CP Daily: Thursday September 29, 2022

Published 00:31 on September 30, 2022  /  Last updated at 00:34 on September 30, 2022  /  Newsletters  /  No Comments

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

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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TOP STORY

FEATURE: Central banks’ climate efforts limited compared to carbon price

The European Central Bank is leading efforts among its peers worldwide to step up the fight against climate change and biodiversity loss, but evidence suggests these moves will have scant impact compared to even a modest carbon price.

EMEA

Nord Stream leaks could emit more than two-thirds of annual Danish GHGs -experts

Leaks from Nord Stream pipelines this week may emit greenhouse gases equivalent to more-than 70% of Danish annual output over a 20-year period, according to analysis of government figures that would place them among the biggest gas leaks ever and pose a major climate threat.

PREVIEW: Energy ministers to rubberstamp emergency interventions, battle lingers on gas price cap

Energy ministers will meet on Friday to finally adopt long-floated measures aimed at taming rocketing energy prices, ranging from mandatory electricity curbs to taxing windfall profits, against the backdrop of a worsened geopolitical scenario since the EU-27 gathered only a couple of weeks prior.

Euro Markets: EUAs shrug off flash sell-off as traders see support emerging at recent lows

EUAs recorded a modest rally on Thursday after testing a recent low and later shrugging off a flash sell-off of nearly €2.50, as traders suggested the market has found an interim support level while energy prices gave back strong gains as Germany unveiled a €200 billion gas price-capping initiative.

EU investors urge Brussels to defend Innovation Fund amid threats to cut size

A group of clean technology investors and policy leaders are urging policymakers to avoid cutting the size of the ETS-backed Innovation Fund amid emerging threats to reduce its scale.

EU steelmakers calls for carbon cost support, still back Fit for 55

The European steel association Eurofer has called on Brussels for help in managing the costs associated with carbon ahead of ministerial energy crisis talks on Friday, but continues to support the EU’s flagship Fit for 55 climate package that is soon to be finalised, a representative confirmed to Carbon Pulse.

AMERICAS

Bipartisan US lawmakers propose bill to promote global forest carbon market development

US Republican and Democratic lawmakers on Thursday introduced a bill to combat deforestation and aid global CO2 reduction efforts, including by helping countries to participate in carbon markets.

Washington state slightly tightens emissions budgets in final cap-and-trade rule

The Washington Department of Ecology (ECY) on Thursday published its final WCI-modelled carbon market regulation, making a slight alteration in the initial GHG budgets ahead of the programme launch in January.

NA Markets: CCA, RGGI prices slide on macro contagion before slight recovery

Both California Carbon Allowance (CCA) and RGGI Allowance (RGA) prices fell further towards six-month lows this week as EU carbon permits and broader equity markets took a beating, though both clawed back small gains towards mid-week amid uncertain short-term outlooks for both programmes.

Alberta large emitter regime needs tighter benchmarks to avoid credit price crash -analysis

The Alberta government must increase the stringency of its Technology Innovation and Emissions Reduction (TIER) programme even more than it is planning in order to prevent a downturn in emissions performance credit and offset prices, researchers said Wednesday.

OFFICIAL CORRECTION – California, RGGI carbon market fundamentals to shift after mid-decade -analysis

*Updates article originally published Sep. 14 to incorporate corrected BNEF analysis on the California carbon market*

The California cap-and-trade system will see allowance supply exceed demand in 2022 before switching later on this decade, while market fundamentals in the Northeast US RGGI scheme will move in the opposite direction, analysts said this week.

ASIA PACIFIC

ANALYSIS: Japan seeks Asian region to adopt broader use of technologies for lower emissions path

Japan is seeking to enhance its role in the promotion and financing of low carbon projects in Asia, with a focus on kickstarting what officials term “transition technologies” that would nevertheless prolong the use of fossil fuel consumption if the emissions generated from that use, such as in power generation, are reduced or abated by those technologies.

China’s emission trading regulations yet to be examined, though legislation might be near -ministry

China’s Ministry of Ecology and Environment (MEE) said the legislation of the nation’s emissions trading scheme is still awaiting further examination, though a lack of specific timeline has left observers questioning whether the carbon market will embedded in law before the end of the year.

Western Australia launches second funding round to boost carbon farming

The Western Australian state government has announced the second funding round for a carbon farming programme to encourage more landholders to participate in the industry.

Korean bank threatens to pull Santos’ Barossa LNG funding if emissions not cut or offset

A South Korean investment bank says it will pull its funding from Santos’ Barossa gas project, unless the project commits to CCS or buys millions of Australian Carbon Credit Units (ACCUs) to offset the project’s emissions.

HK-listed firm signs 2 Mt carbon credit deal with Singapore trading company

A Hong Kong-listed investment company has signed a carbon credits transaction agreement with a Singaporean trading company involving the purchase of 2 million voluntary carbon credits, it announced on Thursday.

NZU price will not follow proposed CCR trigger level, expert says

The proposed hike of New Zealand’s Cost Containment Reserve (CCR) price trigger is highly unlikely to cause NZU prices to follow suit, according to one submission to the government’s ETS review.

INTERNATIONAL

Officials set out plans on Article 6.4 removals crediting, seek expert input

The Supervisory Body for the UN’s new crediting mechanism has issued recommendations on carbon removals and called on experts to help finalise its guidance, despite fears that the ideas are too vague.

VOLUNTARY

‘Gold plating’ offsets could be damaging, warns standards body

‘Gold plating’ certain types of offset credits in the drive to improve integrity in the voluntary carbon market (VCM) could prove detrimental in combating global warming, a markets standards body warned on Thursday.

AVIATION

Airline lobby IATA backs off plan to weaken CORSIA emissions baseline

Air carriers’ association IATA on Wednesday scrapped its request for a less ambitious CORSIA emissions baseline, setting the stage for the ICAO Assembly to adopt the slightly more ambitious compromise proposal put forth by the UN body’s Council.

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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

Nightflare – Major oil companies are not declaring a significant source of greenhouse gas emissions, a BBC investigation has revealed. The BBC found millions of tonnes of undeclared emissions from gas flaring at oil fields where BP, Eni, ExxonMobil, Chevron, and Shell work. Flaring of natural gas is the wasteful burning of excess gas released during oil production. The companies said their reporting method was standard industry practice. Flared gases emit a potent mix of carbon dioxide, methane, and black soot which pollute the air and accelerate global warming. The BBC has also found high levels of potentially cancer-causing chemicals in Iraqi communities near oil fields where there is gas flaring. These fields have some of the highest levels of undeclared flaring in the world, according to the findings. Read the recent Carbon Pulse analysis on the impact of flaring on emissions.

Bit by bit – Researchers from Cambridge University estimate that approximately 199.65 MtCO2e can be attributed to the Bitcoin network since its inception. While 92% of the emissions have occurred since 2018 as emissions have risen sharply in recent years, they estimated that annual GHG emissions from Bitcoin as of Sep. 21 stood at 48.35 MtCO2e, about 14.1% lower than the estimated GHG emissions in 2021 or 56.29 MtCO2e. Putting the researchers’ best-guess estimates into perspective, this total at 48.35 MtCO2e represents approximately 0.10% of global GHGs, similar to that of countries such as Nepal and the Central African Republic. In other news, recent Carbon Pulse analysis suggested that, participants in the fledgling on-chain carbon market are aiming to move past public perceptions of the industry’s high carbon footprint after the world’s second-biggest blockchain Ethereum, made operational changes that will shed 99.5% of its energy consumption. Bitcoin is the largest and by-far the most polluting.

EMEA

Capture the deal – Italian energy firm Eni through its Eni Next subsidiary, investment firm Audacy Ventures, and Neva SGR have all pledged cash to Cool Planet Technologies, a company focused on carbon capture technologies. The firm has closed a capital raise at €3 mln that will be put towards a demonstration plant using carbon capture technology at Holcim’s Hover cement works, near Hannover in Germany. It is expected to be operational in Q4 of 2023 and capture between 6,000 and 16,000 tonnes a year. Two further phases of the projects are planned to capture 200,000 tonnes per year and 1.0 million tonnes per year starting  in 2025 and 2026 respectively. A further capital raise is planned to underwrite the cost of future expansion, leading to the beginning of commercial operations in 2024. (Energy Voice)

We’ll think about it – France’s EDF will review whether there is a case to keep open the Hartlepool and Heysham 1 nuclear power plants in Britain beyond their current expected closure date in 2024, the company said Wednesday. EDF, which operates all of Britain’s eight nuclear power plants providing around 13% of the country’s electricity, said it would invest £1 bln over 2023-25 to help the UK plants maintain output. All but one of Britain’s nuclear plants are scheduled to close by 2030, and EDF’s Hinkley Point C, the first new plant in more than 20 years, is expected to come online in 2026. EDF said the review would be made in the coming months and that its ambition was for the two plants to generate power for longer if possible. (Reuters)

Ghost in the machine – An exclusive report in the Guardian says more than 5,000 completely empty passenger flights have flown to or from UK airports since 2019, with another 35,000 operating with fewer than 10% of seats filled. It says this “makes a total of about 40,000 ‘ghost flights’”. The paper says the report is based on analysis of data from the UK’s Civil Aviation Authority (CAA) and includes, for example, 663 empty flights between Heathrow and the US. It says the CAA will now publish this data quarterly, as a result of a series of FoI requests by the Guardian. (Carbon Brief)

How romantic – Some Brussels establishments will serve customers by candlelight, turning off their ovens or stoves between Thursday and Sunday to highlight their difficulties amid soaring energy prices, Euractiv reports. Customers will only be able to order food and drinks that do not require switching on electrical appliances. “It will require effort and imagination to provide our customers with elaborate recipes without using our equipment. It will mean serving cold dishes or using a barbecue, as we will be turning everything off, except for fridges, which are essential for food preservation,” restaurant owner Pia Renaudat told Le Soir.

AMERICAS

Carbon Pierre – Canada’s federal Conservative Party (CPC) failed in its latest bid to vote down the planned carbon price increase, this time with newly-minted CPC leader Pierre Pollievre sounding the alarm of inflation as the latest reason for stalling the hike. Canada’s price on carbon is C$50/tonne and set to rise $15 every year until reaching $170/tonne in 2030. Pollievre argued the high cost of goods is already hitting Canadians’ pockets and the increased price on carbon will hit them harder. Politicians in the Maritime province of Nova Scotia are rebuilding from Hurricane Fiona were divided between those who said higher prices would impact recovering communities and others who argued a higher price on carbon was meant to avoid natural disasters like that very hurricane. (National Post)

Oil sands spin off – TotalEnergies said on Wednesday it is looking to spin off its Canadian oil sands operations and list the new company on the Toronto Stock Exchange, as the assets do not fit with the French oil major’s low-emissions strategy. The spin-off would include TotalEnergies’ 24.58% stake in Suncor Energy’s Fort Hills oil sands mining project in northern Alberta and its 50% stake in the ConocoPhillips-operated Surmont thermal project, as well as midstream and trading-related activities. At an investor presentation in New York, TotalEnergies said the proposal would be subject to a shareholder vote at its next annual general meeting in May 2023. (Reuters)

Carbon capture conundrum – A sizeable chunk of oil-and-gas executives don’t see carbon capture, utilisation, and storage (CCUS) projects becoming profitable despite expanded tax credits in the new climate law, per the latest Dallas Fed survey. The share of respondents who indicated that proposed CCUS projects won’t be profitable with the new government subsidies reached 54%, with 42% indicating that only some projects will be profitable, according to the results of the survey. GHG removal technologies such as CCUS are seen as increasingly critical for putting the world on a path to meeting the Paris climate goal as conventional means to offset and reduce emissions fails to gather sufficient scale. (Axios)

ASIA PACIFIC

Shutting down – Australia’s biggest-emitting company, AGL, has moved forward the closure of its coal-fired Loy Yang A power station by a decade to 2035, it announced Thursday. The strategy details its transition to renewable energy after opposition from its largest shareholder, billionaire Mike Cannon-Brookes, forced it in May to ditch plans to demerge, reports the Guardian.

Little by little – Japan’s environment ministry has picked another five projects that will receive up to 50% in upfront funding to develop under the Joint Crediting Mechanism (JCM), it announced Thursday. All small renewable energy programmes, the five are expected to generate a total 22,000 JCM credits annually. Eurus Holdings are developing two solar schemes in Chile, Alumport and Tokyo Century Corp. are backing one project each in Indonesia, while the fifth was a rooftop solar scheme in Vietnam established by Marubeni Corp. Since 2013, the ministry has provided funding for a total 223 projects, which can earn a total 2.35 mln units each year. The government will receive around 50% of the credits issued to the pre-funded projects.

Feeling bullish – Indonesia is able to sequester as much as 25 bln tonnes of CO2 and is well placed to make as much as $565 bln from international carbon trading, the chairman of the Financial Services Authority (OJK) has said, according to news outlet Republika, though without specifying the time horizon for the estimates. His comments come after Finance Minister Sri Mulayni Indrawati in July estimated a much more modest $170 mln in annual earnings from forest carbon credits. OJK stands ready to set up an appropriate supervisory mechanism to back up the market-related initiatives outlined in the Indonesian NDC, the chairman, Mahendra Siregar, said.

VOLUNTARY

Sustainable sojourn – Airbnb said in its Corporate Sustainability Update released this week that it is beginning to purchase third-party reviewed and certified carbon credits to promote nature-based solutions, and plans to increase this investment over time to address the residual emissions that it is unable to reduce. Airbnb said that it is committed to supporting credible, high-quality projects that are accredited through independent third-party organizations, such as the American Carbon Registry, Verra, or the Climate Action Registry, and that have verified social and environmental benefits, like local employment opportunities and biodiversity protection. By 2030, Airbnb is committing to reducing its corporate emissions as follows from its 2019 baseline year: reducing Scope 1 and 2 (absolute) emissions by 78.4%, and reducing Scope 3 emissions intensity (MtCO2e/$1M gross profit) by 55%.

Air capture consultation – The American Carbon Registry (ACR) on Thursday announced a stakeholder consultation for Version 2.0 of its  CCS methodology. The methodology now includes direct air capture (DAC) and using sustainable biomass as a feedstock, and will open possibilities for geologic storage to include saline formations and depleted oil and gas reservoirs. ACR said this move will also widen the geographic area for the projects it supports.

SCIENCE & TECH

Reactor revamp – Upstate New York’s largest nuclear power station is branching out into the hydrogen business in hopes of boosting its profits and its role in New York’s energy grid of the future. Nine Mile Point Nuclear Station soon will begin using a fraction of its electric output to make hydrogen, a fuel that could one day power airplanes and trucks, heat buildings, and store energy for the power grid, among other uses. It’s a demonstration project for now. But plant owner Constellation Energy Corp., the nation’s largest nuclear operator, anticipates that hydrogen will play an important role in the company’s future, CEO Joe Dominguez said Wednesday at the Scriba plant. Eventually, some of Constellation’s 23 nuclear plants might devote up to half of their generating capacity to hydrogen production, Dominguez said. “This technology is going to be incredibly important,’’ he said. (Syracuse.com)

Better watch that waist line – Trees have long been known to buffer humans from the worst effects of climate change by pulling CO2 from the atmosphere. Now new research shows just how much forests have been bulking up on that excess carbon. The study, recently published in the Journal Nature Communications, finds that elevated CO2 levels in the atmosphere have increased wood volume – or the biomass – of forests in the US. Although other factors like climate and pests can somewhat affect a tree’s volume, the study found that elevated carbon levels consistently led to an increase of wood volume in 10 different temperate forest groups across the country. This suggests that trees are helping to shield Earth’s ecosystem from the impacts of global warming through their rapid growth. “Forests are taking carbon out of the atmosphere at a rate of about 13% of our gross emissions,” said Brent Sohngen, co-author of the study and professor of environmental and resource economics at The Ohio State University. “While we’re putting billions of tonnes of carbon dioxide into the atmosphere, we’re actually taking much of it out just by letting our forests grow.” This phenomenon is called carbon fertilization: An influx of CO2 increases a plant’s rate of photosynthesis, which combines energy from the sun, water, and nutrients from the ground and air to produce fuel for life and spurs plant growth. Over the last two decades, forests in the US have sequestered about 700-800 Mt of CO2 per year, which, according to the study, accounts for roughly 10% to 11% of the country’s total CO2 emissions. While exposure to high levels of carbon dioxide can have ill effects on natural systems and infrastructure, trees have no issue gluttoning themselves on Earth’s extra supply of the GHG. To put it in perspective, if you imagine a tree as just a huge cylinder, the added volume the study finds essentially amounts to an extra tree ring, Sohngen said. Although such growth may not be noticeable to the average person, compared to the trees of 30 years ago, modern vegetation is about 20% to 30% bigger than it used to be. (Newswise)

AND FINALLY…

Let’s drink to that – Spanish-headquartered utility Iberdrola has launched the first intelligent ‘agrivoltaic’ power plant in Spain in the Gonzalez Byass and Grupo Emperador vineyards located in the town of Guadamur, Toledo. The Winesolar project allows the layout of the solar modules to be adapted to the needs of the vineyards, in order to regulate sun exposure and temperature utilising the shade provided by the panels. Special trackers are controlled by an AI algorithm capable of determining the optimum position of the solar panels in relation to the vines at any given moment. The degree of inclination is established according to the information collected by the sensors placed in the vineyards, which record data relating to solar radiation, soil humidity, wind conditions and the thickness of the vine trunk, among others. The project aims to contribute to improving the quality of the grapes, allow for a more efficient use of the land, reduce irrigation water consumption, and improve the crop’s resistance to climatic conditions in the face of rising temperatures and increasingly frequent heat waves. With a capacity of 40 kW, the electricity generated will be used entirely for self-consumption by the two wineries. This will help to support decarbonisation and reduce energy costs. Iberdrola will monitor the results of the project over the next year, which will enable it to continue adapting this innovative system. The company plans to replicate this system on other vineyards in Spain, which accounts for 13% of the world’s vineyards. This initiative was one of the four selected from among more than a hundred ideas received from 32 countries for the challenge posed by the company to find new low-cost, environmentally friendly solutions to combine the sustainable deployment of photovoltaic farms and primary sector activities in rural areas.

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