Two 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
ANALYSIS: World risks “immense” climate impacts of Russian gas flaring and pipeline leaks
The world is risking “immense” consequences for the climate as Russia looks to burn excess gas no longer being sent to Europe, while experts believe a series of gas leaks from the Nord Stream pipelines this week will worsen the situation.
INTERNATIONAL
BRIEFING: Spot the difference – breaking down the climate risk rulebooks
Companies are set to face a maze of intersecting climate risk reporting requirements as early drafts of three competing rulebooks and comments analysed by Carbon Pulse reveal an array of differences on key issues such as emissions scope, oversight, and offset use.
Initiative maps out $7 trillion global nature market in protection effort
A global cross-stakeholder body has set out guidance aiming to shape nature markets that it says eventually could be worth nearly 9% of global GDP, and including initiatives such as voluntary carbon credits, conservation, soft commodities and nature-based solutions for carbon sequestration.
EMEA
EU lawmakers tee up battle over REPowerEU carbon sale sources
Forthcoming talks on how to finance part of the EU’s rapid exit from Russian fossil fuels promise to be heated, with lawmakers and member states at odds over which carbon allowances to raise €20 billion from, though both are critical of a Brussels plan to tap the supply-managing MSR.
Euro Markets: EUAs give up half Monday’s gains as market digests REPowerEU proposals and gas rises
EUA prices gave up half of the previous session’s sharp gains on Tuesday as traders absorbed the implications of the European Parliament’s preliminary deal on REPowerEU carbon sales, while energy prices rose strongly after reports of leaks in undersea sections of the Nord Stream gas pipeline system.
Recommended UK net zero gas pathway to cost billions -report
The UK is on track to spend £473 billion by 2050 to feed its reliance on fossil gas, despite the availability of lower-cost, zero-emission solutions, according to a new report by IEEFA, while an alternative decarbonisation pathway would avoid £100 billion in international payments for gas supplies.
New central bank framework needed to safeguard South African economy from foreign carbon price policies -study
In order to maintain financial stability and manage monetary policy, South Africa’s central bank needs to develop a framework to monitor and estimate the impact of international climate mitigation policies, in particular carbon border adjustment mechanisms (CBAMs), on the country’s economy.
ICIS energy analyst joins London-based carbon fund
An energy analyst has left analytics firm ICIS to join a London-based fund.
VOLUNTARY
Expect higher prices for Article 6 authorised carbon credits, say experts
Carbon credits will most certainly be more expensive than their alternatives when they include authorisations from host-country governments, speakers at a virtual event said on Tuesday, pointing to another factor that would differentiate credits and complicate fungibility in the market.
Gold Standard endorses ICVCM plan to improve carbon credit rigour, seeks improvements
The work of the Integrity Council for the Voluntary Carbon Market (ICVCM) is important for ensuring high standards in the VER space, Gold Standard said Tuesday in comments that separate the offset certifier from its largest competitor.
Indian offset developer quadruples cookstove production capacity
An India-based carbon project developer has expanded its production facilities, more than quadrupling the number of cookstoves it can produce annually to 5 million.
US oil and gas producer achieves net zero emissions in 2021 via V2005 offsets
A Texas-based fossil fuel company achieved net zero Scope 1 emissions last year by retiring carbon credits dating back to the mid-2000s from Carbon Capture and Storage (CCS) projects used for Enhanced Oil Recovery (EOR), according to the company’s 2022 sustainability report released Monday.\
Online trading platform for “high-quality” removal credits raises €5.5 mln in new funding
A nascent digital MRV platform and marketplace for “high-quality” carbon removal credits has raised €5.5 million in new investor funding.
Climate Impact Partners bolsters voluntary carbon sourcing team with two more market experts
Voluntary carbon offset provider Climate Impact Partners has bolstered its sourcing team with two more market experts.
ASIA PACIFIC
Crime and carbon punishment: Chinese province issues first court guidelines for forestry sink-focused compensation scheme
A Chinese province has published a set of work guidelines that lays out how lawbreakers can be made to buy forestry carbon sinks under an ecological compensation scheme, the first of its kind in the country that has drawn mixed feedback from observers.
Woodside calls for “urgent” access to international, correspondingly adjusted credits under Australia’s Safeguard Mechanism
There is an “urgent need” for Australian Safeguard facilities to access international carbon credits that have been correspondingly adjusted in line with Paris Agreement rules, oil and gas company Woodside said Tuesday.
AMERICAS
LCFS Market: California prices crash below $70 as naturals come out selling
California Low Carbon Fuel Standard (LCFS) credit values on Tuesday veered towards levels not seen since summer 2016 as market participants reported numerous credit generators were on offer.
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CONFERENCE
Two 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
Hydrogen pledge – More than 20 countries, led by Japan, have agreed to boost output of low-emission hydrogen to at least 90 million tonnes a year by 2030 from 1 million tonnes now, the Japanese industry ministry said on Monday, Channel News Asia reports. The agreement between countries including the United States, Australia, and Germany came at the Hydrogen Energy Ministerial Meeting in Tokyo. The global goal of producing 90 million tonnes of blue hydrogen – produced from natural gas but eliminating emissions by capturing and storing the emitted carbon – and green hydrogen – extracted from water using electrolysis powered by renewable energy – a year by 2030 is slightly below the 95 million tonnes that the International Energy Agency (IEA) says is required over the same time frame to help achieve its 2050 net zero scenario.
Climate tech investors – Is a global economic recession imminent? That question has been giving many people watching markets sleepless nights. One group, however, seems less worried: climate tech investors. Typically recessions see investors fleeing to safer assets like government bonds and mature companies. And they start investing less in or even divesting from riskier assets, such as venture capital, which bets on early-stage companies fully expecting many to fail and hoping that some succeed wildly. Things are different now, according to Mark Cupta, managing director of Prelude Ventures. “2022 is on pace to eclipse every other year in venture-capital fundraising” with the trend “amplified” for climate investing, he says. (Bloomberg Green)
EMEA
German seeks more renewables – Germany has been given the green light by Brussels to fine-tune and boost its renewable energy production through three new measures. Firstly, a change from a fixed to a sliding market premium in the payment structure for innovation tenders, so that electricity providers are not overcompensated during price spikes. Instead, the premium will be judged over a longer period so that it covers the gap between the market price and energy cost. Secondly, new financial incentives will be introduced for consumers to invest in small grid-connected rooftop solar. Finally, an additional and more incentivised round of ground-based and rooftop solar tenders will be held in 2022 after the first two rounds were undersubscribed.
Preparing for power – UK opposition leader Keir Starmer has pledged that a Labour government would set up a publicly owned clean energy company within a year of being elected to power. Addressing the party’s annual conference, Starmer said the state-backed company would take advantage of the opportunities in British power, because it is right for jobs, because it is right for energy independence from tyrants, referring to Russia’s Putin. Dubbed “Great British Energy”, the new venture would enable British people to profit from the nation’s clean energy resources, he said, stressing that state-backed energy companies from France, China, and Sweden were all currently profiting from wind and nuclear power generated in Britain. But he stressed that the drive to achieve net zero emissions was an engine for economic growth across the UK, repeatedly emphasising that decarbonisation would create jobs and opportunities for the entire country. (BusinessGreen)
Irish offsetting – The Irish government is to offset a planned hike in the country’s carbon tax next month by cutting the National Oil Reserves Agency (NORA) levy. Minister for Finance Paschal Donohoe unveiled Budget 2023 on Tuesday, pledging that the price of fuel at the pumps would not increase. In a budget focused on the ongoing cost-of-living crisis, the minister said that climate change is “one of the other key challenges of our times”, with its effects becoming more frequent and more destructive. He confirmed that Ireland’s domestic carbon tax on petrol and diesel will increase from €41 to €48.50 per tonne from Oct. 12, but that this would be balanced with an equivalent 2 cents/litre cut to the country’s fuel levy, which was introduced in 1996 as a means of funding the maintenance of holding 90 days of strategic oil reserves for use in an emergency. (Agriland)
ASIA PACIFIC
Storage target – The Victorian state government in Australia will fund a new 125MW/250MWh big battery and grid forming inverter in the Murray River Renewable Energy Zone as part of Australia-first plans to target 2.6GW of new energy storage capacity for the state by 2030, and 6.3GW by 2035, RenewEconomy reports. The government announced plans to introduce what it says are the biggest energy storage targets in Australia, alongside a A$157 million funding package to boost Victoria’s shift to renewable energy and away from coal. The targets will see Victoria will aim for 2.6 GW of renewable energy storage capacity by 2030, and then 6.3 GW of storage by 2035.
Low carbon methanol – Methanex, the world’s largest producer and supplier of methanol, has made a significant investment to reduce carbon emissions at its Motunui facility in New Zealand, the company stated in a press release. Once completed, this project has the potential to reduce the site’s carbon emissions by over 50,000 tonnes per annum, the equivalent of taking 20,000 cars off the road.
Hydrogen MoU – Inpex has extended a memorandum of understanding (MOU) with Indonesian utility PLN concerning long-term liquefied natural gas (LNG) supply and expanded the scope of the MOU to incorporate joint studies in hydrogen/ammonia and CCS in relation to the Abadi LNG project, according to an Inpex press release. Meanwhile Inpex has also joined CO2CRC, an Australian-based CCS research centre, which is exploring the opportunity for large scale CCS in the Bonaparte Basin off the northwest coast of Australia with joint venture participants TotalEnergies and Woodside Energy, both existing members of CO2CRC.
Decarb commitments – Japanese shipping firm MOL and Akishima Laboratories have formed a strategic partnership to progress fuel efficiency of MOL Group-operated vessels and minimise vessels’ greenhouse gas (GHG) emissions, MOL announced in a press release. The partnership has set a clear target to achieve a 5% improvement in fuel efficiency, compared to FY2019, by end of FY 2024 with the goal of promoting vessel operating efficiency. MOL also announced that it signed the Sector Transition Strategy “Making Net-Zero Ammonia Possible,” a public-private partnership aimed at promoting decarbonisation in industry. The proposal identifies this decade as a critical period toward the decarbonisation of the ammonia industry by 2030, and sets out specific action requirements for stakeholders on what clean energy, industrial plants, and policy reforms should look like across the entire value chain in order to reach Paris Agreement targets by 2050, MOL stated in a press release.
New guidelines – A benchmark carmaker based in the province of Guandong, one of China’s manufacturing hubs, has issued a set of guidelines and standards for industry peers to calculate the emissions generated in the local automobile sector, paving the foundation for the sector to move towards carbon neutrality, according to a statement issued Monday by Guangzhou-based China Emissions Exchange. State-owned GAC Group, the fifth largest car manufacturer in the country, has participated in the drafting of the guidelines with help from the local government, the statement said. China, the world’s largest vehicle market, has pledged to peak emissions from the automotive industry by 2027 at 1.75 bln tonnes.
AMERICAS
Border state battle – US Senator Mitch McConnell is urging Republicans to vote “no” on advancing permitting reform legislation put forward by Democrat Joe Manchin, Politico reports. The legislation would combine a short-term government funding package with energy permitting legislation, allowing Manchin’s energy legislation “to ride along the must-pass legislation”, the outlet says. Manchin said his bill would allow energy companies to get products to the market in one to three years instead of five to 10 years, according to the Hill. It adds: “Manchin said he expected Senator Bernie Sanders, an outspoken progressive, and other ‘far-left’ liberals to oppose his legislation to limit federal agency authority to review new energy projects but was stunned when Republicans also came out in opposition last week.” Separately, the Hill reports that a coalition of 18 Republican attorneys general voiced opposition to the energy-permitting reform bill in a letter to Senate leadership Monday. (Carbon Brief)
Absent-minded – The Carlyle Group, one of the world’s largest private equity firms, omitted its largest oil and gas investment from regulatory filings on its exposure to GHG pollution risk earlier this year, an AP investigation finds. The firm, which holds $376 bln in assets, claims to be better on climate than the rest of its peers despite having one of the biggest portfolios of fossil fuel companies, but left the emissions from Texas-based energy specialist NGP Energy Capital out of its report –mentioning it only as a footnote and claiming the relationship is only passive. NGP, which boasts its own portfolio of oil and gas companies, accounted for 8% of Carlyle earnings over the last five years, bringing in $512 million in the first half of this year alone – 49% of Carlyle’s profits – thanks to high oil and gas prices due to the Russian invasion of Ukraine. (Climate Nexus)
Hammer time – Hammerhead Resources, a Calgary-based oil and gas developer, has entered into a SPAC merger with Decarbonization Plus Acquisition Corp. IV that values Hammerhead at roughly $1 bln, Axios reports. Hammerhead says it plans to invest roughly $176 mln in CO2 capture and storage between 2023 and 2029.
Send in the lobbyists – The Swiss direct air capture company Climeworks has registered US lobbyists for the first time, retaining the clean energy-focused firm Boundary Stone Partners, a filing shows. Boundary Stone’s work is expected to include “at-scale deployment of DAC, carbon dioxide removal, federal permitting, [and] establishment of voluntary carbon markets,” Axios reports.
VOLUNTARY
Flying green – Air Canada has introduced Chooose, a global climate technology company, as the airline’s new carbon offset programme provider. Air Canada’s new carbon offset programme is integrated into its Canadian and US websites booking process, where the Chooose platform automatically estimates GHG emissions of the customer’s journey and allows them to voluntarily elect to offset the GHG emissions associated with their flight. If purchased, the contribution is automatically made to Chooose, who will then provide a certificate confirming the customer’s climate offset purchase. Air Canada has committed to net zero emissions from all its global operations by 2050, with absolute midterm GHG net reduction targets by 2030 for both its air and ground operations compared to its 2019 baseline.
SCIENCE & TECH
Negative qualities – With industry efforts already targeting $2/kg hydrogen by 2030, the $3/kg hydrogen subsidy contained in the US Inflation Reduction Act could push green hydrogen prices into negative territory in some regions – and render it nearly free in many others, Brenor Brophy, vice president of project development at Plug Power, noted during the RE+ conference last week. Even before the Inflation Reduction Act, many companies wanted to put money into hydrogen deals in order to get ahead of the flood of interest they anticipated would come if tax credits were announced, according to Mona Dajani, global lead for the renewable energy practice at Pillsbury Law. “The day for pilots is over. It came and went in the blink of an eye,” said Margaret Campbell, director of business development for green hydrogen at Engie North America. “Everyone is looking at putting hundreds of megawatt-scale facilities on the ground, immediately. The demand is urgent, immediate, and enormous.” (Utility Dive)
AND FINALLY…
A little help from the kelp – Seaweed is a crop that scientists believe can help to effectively reverse the climate crisis, The Guardian reports, profiling the UK’s largest offshore seaweed farm. Managed by a company called Seagrown, the farm grows three fast-growing species of kelp that can be used to make everything from a biodegradable alternative to a plastic bottles to an umami-rich condiment, as well as eco-friendly fertiliser and cattle feed. A 2019 study found seaweed 20 times more effective than plants at carbon sequestration: taking CO2 from the atmosphere and “locking” it up in solid or liquid form. Seaweed does this effortlessly by exporting a large portion of its biomass out into the deep sea.
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