CP Daily: Wednesday September 28, 2022

Published 03:24 on September 29, 2022  /  Last updated at 03:24 on September 29, 2022  /  Newsletters  /  No Comments

A daily summary of our news plus bite-sized updates from around the world.

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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TOP STORY

Swift launch of Washington cap-and-trade system amongst numerous challenges facing programme

The quick turnaround in launching Washington state’s carbon market could yield adverse consequences, a webinar heard Wednesday, as analysts presented their allowance pricing scenarios for the WCI-modelled programme and market participants voiced concern about offset procedures.

EMEA

EU ministers head for fraught REPowerEU talks amid unresolved spat

Czechia is set to stick to its compromise plans in its efforts to broker a united stance among EU nations for bloc’s REPowerEU strategy, despite some member states objecting to raiding the ETS-derived Innovation Fund, an official told Carbon Pulse on Wednesday.

Proposed 10% EU winter power use cut could reduce sectoral emissions by one quarter -analysts

A sustained 10% drop in EU power demand over the winter as proposed by Brussels could lead to a 26% drop in electricity sector emissions, according to analysts, though this scenario would be ambitious given the scale of such a curtailment.

Euro Markets: EUAs give up rest of Monday’s gains as focus switches to funds’ growing net short

EUAs gave up further ground on Wednesday, with prices settling at their lowest in more than six months as the market continued to digest EU lawmaker plans on allowance sales to fund the REPowerEU package, while investment funds’ record net short position in the futures market also drew focus.

EU should scrap “Fit for 55” ETS reforms to protect industrial competitiveness -lobby group

The EU should scrap key elements of its proposed “Fit for 55” reforms of the EU ETS amid the current energy crisis, leaving the market in its current format to protect industry’s competitiveness, a lobby group said on Wednesday.

VOLUNTARY

Coalition seeks to add to Core Carbon Principles, as another standard hits back

The IC-VCM’s carbon credit standard-setting process should add more safeguards for host communities, ban oil firms from trading and offsetting the units while ensuring they are all correspondingly adjusted, a cross-stakeholder coalition said on Wednesday.

Platform offers 9 mln national-scale carbon units, bigger volumes loom

Some nine million national-scale deforestation reduction credits have again been made available to the voluntary carbon market this week, with initial buying limited but far greater potential volumes promised within weeks.

Carbon removal business set to return trillions for early investors -report

The nascent carbon removal market is set to accelerate to maturity as a record year of investment pledges this year is bolstered by several underlying market dynamics, according to a report published on Thursday.

New token seeks to tackle carbon, biodiversity

A web3 company on Wednesday launched a new digital token that is backed by a combination of carbon emissions reductions and biodiversity gains.

Myanmar mangrove project completes initial planting

A blue carbon offset project in Myanmar has planted 1,500 hectares of mangrove forest to complete its first development stage, its backers said in an update on Wednesday.

Rating agency awards two fresh grades, puts one more on watch

A carbon credit ratings agency has given a cookstove project in Nepal and a group of hydropower plants in China, both accredited by Verra, a reasonable chance of avoiding a tonne of CO2.

AMERICAS

Colombia’s new administration seen setting limits on offset usage in carbon tax reforms

Carbon tax reforms recently unveiled by Colombia’s newly elected leftist President Gustavo Petro are viewed by some observers as including controversial provisions that impose new limits on the use of offsets, measures that are causing confusion amongst stakeholders and potentially dimming the prospects for the passage of the legislation.

California offset issuance recedes as DEBs premium hits new high

California compliance offset issuances fell this week to levels more in line with subdued totals this year, according to state data published Wednesday, while the price premium for credits that provide direct environmental benefits (DEBs) the state set a new record.

ASIA PACIFIC

China accelerates investments in coal-fired power and steel plants, increasing financial risk -report

Increased investments in China’s new coal-fired power plants and blast furnaces could lead to the build-up of excess coal-based capacity and falling utilisation rates rather than emissions peaks, a report published on Wednesday found.

Co-firing coal plants with ammonia costly for Japan’s decarbonisation goals -report

Japanese utilities are exploring ways to reduce CO2 emissions from coal-fired power by co-firing plants with ammonia, but this is not the most cost-effective way for the Northeast Asian economy to reach its power sector decarbonisation goals, a report released on Wednesday has found.

Australia Market Roundup: Queensland to quit coal by 2035 as ACCU price ticks up

Australia’s Queensland state government has announced its power stations will no longer run on coal by 2035 as part of a sweeping 10-year energy transition plan, while the price of Australian Carbon Credit Units (ACCUs) has seen a small rise over the past week.

Australian carbon network calls for more Indigenous-focussed ERF methods

An Australian carbon group has urged the Clean Energy Regulator to explore suitable methodologies for Indigenous organisations, releasing a study to highlight a dearth of opportunities in the carbon farming space.

INTERNATIONAL

Fungibility obstacles: whales, dolphins and other carbon credit attributes

Some carbon project developers care less about climate outcomes than they do about protecting nature or supporting vulnerable communities, a virtual event heard Wednesday – a stance that risks complicating fungibility for a market already struggling to simplify trading.

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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

EMEA

Cap in hand – Energy ministers from 15 EU countries have called for a cap on wholesale gas prices in a letter to EU energy commissioner Kadri Simson ahead of a key meeting on Friday, saying such a cap was “the priority” response and could be complemented by more financial oversight of the gas market and developing new European gas price benchmarks. The 15 ministers are from Belgium, Bulgaria, Croatia, France, Greece, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain. They would need just one more country in favour of a gas price cap to achieve the qualified majority usually required to approve an EU legal proposal from the European Commission. (Montel)

Rubber stamp – Germany’s economy ministry and the operators of two of the country’s three remaining nuclear plants have agreed on a concept for keeping them in an emergency reserve beyond their scheduled decommissioning date until mid-April 2023, Clean Energy Wire reports. The plants Isar 2 in southern state Bavaria and Neckarwestheim 2 in neighbouring Baden-Wurttemberg will be transferred into the reserve on Dec. 31 – the date they were due to be taken offgrid. Instead, they will be kept ready to avert a looming power grid bottleneck in southern Germany, the economy ministry said. Minister Robert Habeck said the task is to guarantee supply while at the same time accounting for the fact that nuclear power is a high-risk technology that requires following a strict safety protocol. Germany generally has a stable electricity system without the nuclear plants but supply security must be viewed in a European context, the Green Party minister said, pointing at the difficulties neighbouring France had keeping its nuclear plant fleet operational during the summer.

ASIA PACIFIC

Low-carbon partnership – France is seeking to expand its partnership with Singapore to achieve goals set in the Paris Agreement on climate change, Straits Times reports. Mr Olivier Becht, France’s Minister for Foreign Trade, said Europe’s third-largest economy wants to work with Singapore and its companies to develop technologies and solutions for energy transition and digitalisation. The two countries on Sep. 21 approved the France-Singapore Digital and Green Partnership workplan, which includes programmes to support joint research and development projects, cyber-security labelling schemes, artificial intelligence, and heritage conservation. Speaking at a press conference on Monday in Singapore, on his second visit here, he said some French companies are already helping the Republic with renewable energy installations and digitalisation projects that reduce carbon and greenhouse gas emissions. Mr Becht visited the Port of Singapore, where French shipping giant CMA CGM and the Maritime and Port Authority of Singapore (MPA) recently initiated a collaboration to develop solutions for maritime decarbonisation, digitalization, and innovation.

New listing – The world’s first low-carbon ETF with a geographical focus on Asia Pacific, with assets under management (AUM) of S$150 mln ($104 mln) at launch, has been listed on the Singapore Exchange (SGX), according to a statement released Wednesday by the bourse. The listing has brought the total global AUM of sustainability-linked ETFs listed on SGX to more than S$1 bln, the statement showed. The global ESG ETF market has continued to draw investors’ interest – ETFs focused on ESG strategies this year crossed US$350 billion in AUM, an increase of close to nine times since 2018.

AMERICAS

How the tables have turned – A mix of politics, policy divides, and a ticking clock thwarted US legislation to speed permitting for energy projects ranging from fossil fuel pipelines to power transmission to renewables, as coal state Sen. Joe Manchin (D) threw in the towel for the moment on Wednesday. Democratic leaders stripped his proposal from the bill to continue government funding past Sep. 30 after it became clear the measure lacked votes. Renewables industry groups called the proposal needed to realise the goals of the recently-passed Inflation Reduction Act, which invests in a huge buildout of wind, solar, and other low-carbon energy. But climate activists opposed making it easier to build oil-and-gas infrastructure – and specifically the bill’s approval of the Mountain Valley Pipeline gas project. A number of progressive Democrats sided with them. (Axios)

Capture cash – The US Department of Energy announced a nearly $4.9 bln set of funding opportunities aimed at bolstering investments in the carbon management industry and to reduce CO2 emissions through power generation and industrial operations, Power Engineering reports. The funding from the Bipartisan Infrastructure Law is intended to support three programmes to demonstrate and deploy carbon capture systems, along with carbon transport and storage infrastructure. Projects will be required to develop implementation strategies and report on activities and outcomes related to community economic and other benefits and environmental impacts, such as investments in registered apprenticeships, hiring local workers, participation of minority-owned business, or changes to non-CO2 pollution.

VOLUNTARY

Ratings expansion – Carbon credit rating agency BeZero is to feature its rating and summaries on the blockchain marketplace Senken, which was launched last month. BeZero has now partnered with several companies, including CBL, AirCarbon Exchange, Cloverly, Patch and AlliedOffsets, to showcase its ratings of more than 250 projects in the voluntary carbon market.  Carbon Pulse is also partnering with BeZero, and will be launching its ratings age shortly.

AND FINALLY…

O (dimly-lit) Christmas Tree, O (dimly-lit) Christmas Tree… – Portugal’s government will limit decorative lighting at Christmas, implement air conditioning controls, and suggest changes to teleworking arrangements to save energy, Euractiv reports. According to the energy saving plan 2022-2023, published on Tuesday in a cabinet resolution, the government will implement several saving measures over the coming months, which in the case of the Central Administration, will be mandatory. The interior lighting of buildings will be turned off from 2200 local time in the winter period and from 2300 in the summer period and outside from midnight. In addition, it established that the periods of Christmas lighting will be limited to 1800 to 2400 from Dec. 6 to Jan. 6. Interior lighting will also have to be switched off whenever the space is not in use and after working hours, promoting greater use of natural light and other measures. According to the plan, the temperatures of the air-conditioning equipment will be regulated to a maximum of 18C in winter and a minimum of 25C in summer. Among the recommendations for local administrations is the “regulation of the water temperature of indoor swimming pools to 26C and a 2C reduction in the temperature of ambient heating where indoor swimming pools are located (to 28C).” There are also similar recommendations for consumers, including reducing the baths and showers and minimising use of washing machines and dishwashers. In total, the measures presented in the Energy Saving Plan 2022-2023 save 188 mcm of natural gas, which represents 5% of consumption compared to the reference period, the executive said.

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