Three weeks until Carbon Forward 2022 – Europe’s leading environmental markets conference. Taking place in London and online from Oct. 12-14, don’t miss the chance to hear about the risks and opportunities presented by the world’s largest carbon markets – compliance and voluntary. Or come network with your industry peers and meet our sponsors and exhibitors.
In-person passes are limited and going fast, so Register Now!
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Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here
TOP STORY
FEATURE: Transition risks grow as climate lawsuits against governments accelerate
A record number of lawsuits against government climate action were filed last year, building pressure to bolster ambition and a move by vulnerable states to involve the International Court of Justice.
EMEA
Germany considering plan to boost EUA auction revenue target under REPowerEU
Germany is weighing a proposal to increase the revenue target for carbon allowance sales under the EU’s REPowerEU plan, but wants to ensure measures are taken to protect the integrity of the ETS.
European securities watchdog rejects use of EU carbon as general collateral in wider energy markets
Europe’s securities watchdog has rejected the idea that EU Allowances should be able to be used as general collateral by financial market participants amid ongoing turmoil in the bloc’s energy markets.
Euro Markets: EUAs tread water at support level as traders dig for news while energy markets ease
EUA prices held station around a key technical support level in thin trade on Thursday as traders described a market lacking direction, while energy markets were also quiet amid anticipation of a Brussels plan to cap energy costs that may include rules governing speculation in natural gas markets.
European exchange to expand environmental markets offering in partnership with product developer
A major European exchange and environmental product developer inked a new cooperation agreement Thursday, expanding their existing partnership as they look to ramp up listed environmental markets in Europe and North America.
Faster free allocation phaseout would aid EU steel decarbonisation by curbing scrap exports -report
A faster phase-out of free emissions allowance allocations to steel firms in the EU would incentivise steel scrap recycling on the continent and prevent millions of tonnes of carbon-intensive exports to countries such as Bangladesh, Pakistan, and Turkey, a report has found.
INTERNATIONAL
Officials make patchy progress on UN carbon credit mechanism
The Article 6.4 Supervisory Body failed to find consensus on core items at its second meeting this week to leave uncertainty on key aspects of the UN’s new carbon crediting mechanism, but the body did agree on a new fee structure, work plan, and the need for external technical support.
Governments to gather at COP27 to steer forest funding via new partnership
Moves are underway to cement a collective pledge by 141 countries to arrest and reverse deforestation by 2030 into a cohesive partnership at November’s COP27 UN climate conference in Sharm el-Sheikh that includes cooperation on carbon markets.
Aviation CO2 emissions heading for tripling by 2050 absent strong policy action -report
Lacklustre efforts to tackle aviation emissions by governments and industry bodies have put the sector well outside a 1.5C pathway, with global aviation emissions potentially tripling from 2019 levels by 2050 in the absence of stronger policies, a report has found.
Clean hydrogen project pipeline rising but investment needs to triple by 2030 for net zero alignment -report
The number of global hydrogen projects in the pipeline has reached a new high of 680, reflecting investment of $240 billion, but investment proposals will need to reach to $700 bln by 2030 if low carbon hydrogen is to align with a net zero emissions by 2050 pathway, an industry report has said.
Direct air capture no longer seen as a “future technology” as policy tailwinds pave way for growth
Developers and advocates of direct air capture are hailing the long-sought emergence of the technology in the North American marketplace as newly established government incentives are expected to spur growth in the industry, while development projects are advancing.
ASIA PACIFIC
Japan kicks off J-Credit trading with low volumes on debut day
Test trading of domestic carbon offsets opened on the Tokyo Stock Exchange (TSE) on Thursday ahead of the April launch of the GX League, with modest trading activity recorded in the first session.
Exchanges jockey for position in Mainland China-Hong Kong carbon market race
Bringing Hong Kong into China’s biggest regional ETS might be a cost-effective way of implementing a carbon market there, a Guangdong carbon exchange official said Thursday, even as HK looks to establish itself as a major environmental markets hub linking the mainland with the rest of the world.
Market players warn of price volatility risk in early years of Australia’s Safeguard Mechanism
The creation of a secondary crediting scheme in the reformed Safeguard Mechanism could spark volatility in the market in the early years after the reform is implemented, and the government should introduce measures to minimise that, Australia’s peak body for financial institutions have warned.
Thai industry group sets up Southeast Asian state’s first carbon market exchange
Thailand has established its first carbon credit exchange in an effort to boost the private sector’s role in emissions reduction and contribute to the Southeast Asian country’s broadly stated goal to reach carbon neutrality by 2050, it was announced this week.
VOLUNTARY
Loose SDG claims could leave offset buyers duped, warns report
A lack of standardisation in framing Sustainable Development Goals (SDG) could leave buyers of offsets duped over the social, environment and economic benefits of a project in the voluntary carbon market (VCM), according to a report published on Thursday.
CLARIFICATION: Offset rating agency reaffirms high marks to major Indonesian nature projects
(Updates to clarify Wednesday’s article to show that the scores reaffirmed previous ratings and adds detail from the ratings agency that the grades are specifically for pre-2021 vintages)
AMERICAS
NA Markets: CCA prices tread lower amid lack of drivers, RGAs fade to 2-mth low
California Carbon Allowance (CCA) prices fell on revamped selling pressure this week amid a bearish macroeconomic environment, while RGGI Allowances (RGAs) also lost ground as speculators offloaded permits and compliance entities stayed on the sidelines.
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Premium job listings
- Executive Director, Climate Warehouse/International Emissions Trading Association (IETA) – Singapore
- Technical Director, Climate Warehouse/International Emissions Trading Association (IETA) – Singapore/remote
- Multiple Carbon Project Officers, NatureCo – APAC, AFRICA, LATAM
- Carbon Procurement Manager, KliK – Zurich
Or click here to see all listings
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CONFERENCE
Three weeks until Carbon Forward 2022 – Europe’s leading environmental markets conference. Taking place in London and online from Oct. 12-14, don’t miss the chance to hear about the risks and opportunities presented by the world’s largest carbon markets – compliance and voluntary. Or come network with your industry peers and meet our sponsors and exhibitors. In-person passes are limited and going fast, so Register Now!
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Carbon Pulse has teamed up with CME Group to provide its clients with regular updates on the global carbon markets. Check out these briefs for the latest insights on pressing trends and events impacting markets, published every other week. Registration required
INTERNATIONAL
Coal cut-off – HSBC bank’s fund arm has said it will stop financing the expansion of thermal coal from funds it manages actively with immediate effect, marking an acceleration of a broader commitment it made last year and ahead of rival Standard Chartered, which said earlier this year it would end all direct coal financing for clients by 2032. HSBC said last December it would cut exposure to thermal coal financing across all its businesses by at least 25% by 2025 and 50% by 2030, though non-EU or non-OECD-based clients could be funded until a global phase-out by 2040. (Reuters)
Clean jobs – The number of workers in the renewable energy sector across the world has grown from 12 mln in 2020 to 12.7 mln in 2021, according to a report published by the International Renewable Energy Agency (IRENA). The agency’s annual review of renewable energy jobs, developed in collaboration with the International Labour Organisation (ILO), shows that an increasing number of countries are creating jobs in the sector. Almost two-thirds of all renewable energy jobs are in Asia, with China alone accounting for 42% of the global total, followed by the EU and Brazil with 10% each, and the USA and India with 7% each. The world scored a new record in 2021, producing 132.8 GW of solar PV capacity installations, up from 125.6 GW in 2020. While solar energy was found to be the fastest-growing sector worldwide, providing 4.3 million jobs in 2021, more than a third of the current global workforce in renewable energy is China which is the world’s first manufacturer and installer of PV panels. (Euractiv)
EMEA
Fracking in detail – Fracking can go ahead in the UK, the government announced on Thursday, lifting a moratorium on the controversial process, BBC reports. The decision comes alongside the publication of a new scientific review into the practice by the British Geological Survey (BGS). The BGS has concluded there is still a limited understanding of the UK’s shale reserves and the drilling impacts. A moratorium on fracking was put in place in 2019 following concerns over earth tremors. But with the energy crisis worsening globally and world leaders scrambling to secure energy supplies, the question has been reopened, despite multiple experts, the UK’s own climate change advisors, a fracking company itself, and local communities coming out against the decision. Fracking is a way of mining gas and oil from shale rock and can lead to earthquakes.
Store more – Nineteen companies have applied to develop CO2 storages off Britain in the country’s first such licensing round, according to the North Sea Transition Authority (NSTA) in a move to help the government meet its goal of holding 20-30 mln tonnes of CO2 by 2030. Bidders weren’t named but Italy’s Eni said it had applied at the depleted Hewett gas field. (Reuters)
Return of the Rat – Germany’s Uniper said on Thursday it would keep open a unit at its Ratcliffe coal power station in Britain to help shore up electricity supplies this winter. “Following discussions with National Grid ESO (Electricity System Operator) … We can confirm that the unit will now continue to be available until 31 March 2023,” Mike Lockett, Uniper UK Country Chairman said in a statement. National Grid ESO has already signed deals with power generators Drax Group and EDF to extend the life of four coal-fired power units at two plants for the upcoming winter. Uniper said it would also review the possibility of keeping the plant open until September 2024, the date by when Britain has said it plans to close all coal-fired power plants. (Reuters)
Stick with it – German industry plans to stick to existing decarbonisation targets despite the challenges caused by Europe’s energy crisis, but calls for “existentially important” electricity price relief for companies, according to the president of the country’s most important industry association BDI, Siegfried Russwurm. “Consistent commitment to climate protection is in the very own interest of companies,” he told participants at the lobby group’s climate conference. But a high priority for climate action must not translate into a “business as usual” in energy and climate policy, Russwurm said. “A significant electricity price relief is existentially important” via cutting energy taxes and transmission grid fees, he argued. (Clean Energy Wire)
Chocolate addiction – The German economic cooperation ministry (BMZ) has announced plans for a climate and development partnership with the Cote d’Ivoire, Clean Energy Wire reports. This will involve restoring five mln hectares of tropical forest and expanding the use of renewable energies. The West African country has seen its forest land cover reduce from 37% to just 8% since 1960, mostly due to cocoa farming. As well as reforestation, the BMZ will help implement and promote sustainable supply chains and agricultural practices. Germany pledged €35 mln for the new climate and development partnership.
AMERICAS
Permitpalooza – The transition to a clean energy economy will involve trade-offs, and few are as stark as those in the permitting bill unveiled Wednesday by West Virginia Democratic Sen. Joe Manchin. The bill could provide a significant boost to transmission infrastructure, which is needed to ensure widespread renewable adoption. Where permitting a transmission line can now take a decade, the bill would limit federal environmental reviews to two years, put a statute of limitation of 150 days on legal challenges, and give the US Federal Energy Regulatory Commission more authority to permit transmission lines. But Manchin’s proposal could also lead to the construction of more fossil fuel projects, producing more GHG emissions and blunting attempts to green the US economy. It would expand a programme aimed at expediting federal permitting reviews to include offshore oil leases and approve the Mountain Valley pipeline, which would carry natural gas from West Virginia into Virginia. Whether the proposal can survive the House and Senate is an open question. The bill has scrambled traditional political alliances. Republicans and progressive Democrats are opposed. Clean energy developers are supportive. Most, though not all, environmentalists are against it. (E&E News)
Fields and forests – The US has committed to cut national emissions in half by 2030, but it can’t achieve that goal without agriculture, which currently emits more than 10% of the country’s annual emissions. Until now, details about how to cut agricultural emissions — without compromising food security or producer livelihoods — were unclear, the Environmental Defense Fund says in a new study. Ambitious Climate Mitigation Pathways for US Agriculture and Forestry: Vision for 2030, the report from EDF with economic analysis from ICF, “provides a bold but achievable roadmap for how farms, ranches and forests can get the US 17% of the way toward its 2030 goal.” The study sets the first science-based targets for reduced emissions from US agriculture and increased carbon storage from US forestry, and identifies the most impactful, lowest-cost pathways to achieve those targets. By 2030, US farms and ranches can cut agricultural emissions by 23%, and US forests can boost carbon storage by 43%.
Read his lips – Canadian Environment Minister Steven Guilbeault isn’t warming to the idea of combating climate change by imposing a windfall tax on the massive profits being posted by Canadian energy companies, the Canadian Press reports. UN Secretary-General Antonio Guterres this week said fossil fuel companies are making massive profits and should be taxed extra to pay for climate action and deliver help to people struggling with their energy and food bills. Guilbeault says Canada is already ensuring fossil fuel companies pay their fair share toward climate action through carbon pricing and regulations. That includes an overall cap on oil and gas sector emissions and specific regulations on methane from oil and gas production, and on overall emissions from producing and using gasoline and diesel.
First Nations focus – Three First Nations in British Columbia have released a climate action plan they believe will pave the way for a prosperous, carbon-friendly future, and have called on the federal and provincial governments to adopt it. The climate action plan lays out seven actions for both policy and investment, including expanding carbon offsets and trading and providing renewables to northern communities by expanding the northwest transmission grid that runs roughly from Terrace to Iskut, BC. It also calls for expediting approvals of First Nation climate solution projects within a year; currently, the timeframe is approximately four years. (National Observer)
ASIA PACIFIC
Steel deal – Rio Tinto and China’s Shougang Group, one of the world’s top 10 steel producers, have signed a Memorandum of Understanding (MoU) to promote research, design and implementation of low-carbon solutions for the steel value chain, International Mining reports. The MoU’s focus areas include low-carbon sintering technology, blast furnace (BF) and basic oxygen furnace (BOF) optimisation, and carbon capture and utilisation (CCU). This partnership with Shougang underlines Rio Tinto’s strategic commitment to partner with customers on steel decarbonisation pathways and to invest in technologies that could deliver reductions in steelmaking carbon intensity, it said. Initial efforts will be focused on, but not limited to, BF slag heat recovery, BOF slag utilisation, CCU and low-carbon sintering technology.
Hydrogen deal – A consortium of three of South Korea’s industrial giants has unveiled plans to develop a green energy export corridor connecting North Queensland to north-east Asia, that will export more than 1 million tonnes a year of green ammonia, and be powered by 3GW of renewable energy generation capacity, Renew Economy reports. The huge green hydrogen plans of the so-called “Han-Ho H2” consortium were revealed on Wednesday, through the signing of a Memorandum of Understanding between Australian-based Ark Energy and its parent company Korea Zinc, as well as Hanwha Impact and SK Gas.
New CCUS unit – Chinese oil giant Sinopec has launched a specialised unit to engage in capturing and storing CO2 as well as equity investment in carbon-related assets, Reuters reports. Based in the eastern city of Nanjing, the subsidiary has registered capital of 2.5 bln yuan ($352 mln), data showed. The move came after Sinopec last month put into operation China’s largest carbon capture, utilisation and storage (CCUS) facility in Shandong province. It has announced an ambitious goal of capturing and storing 3 Mt annually of CO2 and utilising 2 Mt a year by 2025.
VOLUNTARY
No more wading around – New York-based insurance broker and risk advisor Marsh on Thursday announced US clients now have the option to pay their service fees in VERs or renewable energy certificates (REC). Under the payment programme, Marsh clients can opt to pay for US insurance broking or risk advisory services by transferring agreed upon VERs and RECs to Bank of America, which has extensive experience with carbon markets, via a registry account. After receiving the credits and certificates, Bank of America will send the proceeds to Marsh.
AND FINALLY…
Statute of Liberty – The cities of Paris and New York have joined a coalition of associations and local authorities that are suing oil major TotalEnergies for failing to adequately fight climate change, the coalition said in a statement on Wednesday. The legal action that started in Jan. 2020 uses a 2017 French law requiring major French companies to draft vigilance plans to prevent environmental damage. The coalition wants a judge to order TotalEnergies to “take the necessary measures to drastically reduce its greenhouse gas emissions and align itself with the objectives of the Paris Agreement”, in a move that it said would be “similar to the Shell decision in the Netherlands”. In a landmark May 2021 ruling a Dutch court ordered Royal Dutch Shell to accelerate its carbon emission reduction target. (Reuters)
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