CP Daily: Thursday October 6, 2022

Published 01:56 on October 7, 2022  /  Last updated at 01:33 on October 20, 2022  /  Newsletters  /  No Comments

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

One week 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

NZ proposes to give local councils greater power over carbon forestry

The New Zealand government on Thursday proposed to give local councils a greater say in regulating carbon forestry as it launched yet another ETS consultation that pushed the NZU price up by almost 6%.

CARBON FORWARD

Last chance to join Europe’s premier carbon conference

The seventh instalment of Carbon Forward – the premier annual carbon markets conference – is back next week, and it’s stacked with a first class line-up of speakers ready to discuss the risks and opportunities across the rapidly evolving global climate policy landscape.

VOLUNTARY

ANALYSIS: Disclosure on current, future use of carbon offsets to pave way to integrity pairing

Sunlight may soon shine into the opaque world of carbon credit use, with offset disclosure a key requirement under forthcoming corporate reporting rules – paving the way to credibility and integrity assessments at both the investor and policy-maker levels.

New voluntary carbon asset venture launches for Asian market

A group of firms on Thursday announced the launch of a venture that will generate carbon credits and other environmental products across the Asian region for the voluntary market.

Macquarie announces new investment in carbon offset consultancy

Global financial service group Macquarie announced a new partnership on Thursday to establish a pipeline of “high-quality” nature-based carbon offset projects, with the aim to help corporates and other clients advance their climate commitments.

Private equity firm buys majority stake in nature-based project developer

A private equity firm has purchased a majority state in a French nature-based solutions project developer.

Brazilian bank voluntarily cancels largest ever batch of Kyoto credits

A Brazilian bank has voluntarily cancelled the largest ever batch of carbon credits issued under the Kyoto Protocol’s Clean Development Mechanism (CDM).

EMEA

EU Market: EUAs fail to re-test €70 amid REPowerEU doubts

EUAs inched up on Thursday following a strong auction but failed to match the previous session’s move above €70, as traders fretted about the potential for the EU to advance more carbon sales to help pay for the REPowerEU’s initiative.

Norway to set floor price for its EU ETS compensation scheme

Norway is introducing a floor price for its indirect EU ETS cost compensation scheme to shield its energy-intensive industries from carbon leakage as the government seeks to rein in future costs.

A lot of “hurdles” to overcome before carbon pricing can spread across Africa -experts

There are a lot of challenges to overcome before carbon pricing systems can spread across Africa, experts told an event Thursday, despite recent announcements across multiple nations in the region that flagged markets in development.

AMERICAS

NA Markets: CCA, RGA turnaround with broader market upswing

California Carbon Allowance (CCA) and RGGI Allowance (RGA) prices rallied alongside broader markets over the last week after nearly two months of declining price action.

CCA prices to more than double by 2027, RGAs to rebound in late 2023 -analytics firm

CCAs are projected to rise to the first allowance price containment reserve (APCR) trigger by 2027, while RGAs are forecast to prompt a cost containment reserve (CCR) trigger price by 2024, according a report issued Thursday by a London-based analytics firm.

INTERNATIONAL

Nearly half of world’s coal firms still seeking to expand -database

Although last year’s UN COP26 UN climate summit in Glasgow ended with an agreement to “accelerate efforts towards the phasedown of unabated coal”, almost half of the companies tracked by NGOs in a global database are still heading in the opposite direction.

Big corporate emitters fail to account for climate risk in their financial reporting, survey finds

Almost all of the world’s largest corporate emitters do not sufficiently acknowledge climate risks in their financial statements, leaving investors ‘in the dark’ as to whether and how their financial reporting takes into account the impacts of climate change, according to a report released on Thursday.

SHIPPING

Maritime, energy players combine to develop “onboard” carbon capture tech to reduce shipping emissions

A consortium of players in the energy and shipping industries launched a project this week to explore the viability of carbon capture on vessels, reflecting a push to explore the utilisation of the technology to reduce emissions from shipping, a sector which is heavily dependent on fossil fuels but faces increasing pressure to decarbonise its operations.

ASIA PACIFIC

Western Australia EPA could rule out new projects with high Scope 3 emissions, Gorgon report says

The Western Australia Environmental Protection Authority (EPA) has flagged the possibility of not recommending new polluting projects based on their Scope 3 GHG emissions.

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CONFERENCE

One week 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

AMERICAS

Pacific pact – The governors of California, Oregon, Washington as well as the British Columbia’s premier have signed a pledge to pursue zero-carbon shipping and decarbonise ports. The renewed partnership will promote investments in climate infrastructure, such as electric vehicle charging stations and a clean electric grid, according to the agreement. Participating officials also pledged to protect their residents from climate impacts like drought and wildfire, while ensuring that all communities are included in the clean energy transition. The US West Coast states and BC have some of the world’s most ambitious transportation electrification and emission standards, according to Pacific Environment. Extending this ambition to the seas will save thousands of lives in West Coast port communities and will help to bring the global shipping industry in alignment with the Paris Agreement’s goal to limit global temperature rise to 1.5 C. Pacific Environment lamented the lack of mandates or implementation in the agreement, calling for a decarbonised shipping industry on the North American West Coast by 2040.

Finding the good – The American Petroleum Institute will hold a workshop Thursday on the merits of a clean fuel standard, a policy aimed at slashing carbon emissions from transportation, the nation’s largest source of planet-warming pollution, according to a draft meeting agenda obtained by The Climate 202. According to the Washington Post, the meeting, which was confirmed by two people familiar with the matter, signals that the oil and gas industry’s top lobbying arm is edging closer to supporting another climate policy after endorsing a tax on carbon emissions in Mar. 2021. Representatives for automakers, ethanol producers and other industry interests are expected to attend the workshop at a hotel in downtown Washington, according to the two individuals, who spoke on the condition of anonymity because they were not authorised to comment publicly.

CAPE v CGA – A group of Canadian public health professionals and advocates have filed a C$10-mln greenwashing complaint against the Canadian Gas Association (CGA) for a recent ad campaign promoting natural gas as a clean, affordable, sustainable energy option. In the complaint to Competition Bureau Canada, the Canadian Association of Physicians for the Environment (CAPE) and other doctors, nurses, and environmental activists cite scientific literature to back their contention that the carbon emissions from natural gas are comparable to coal, and that gas production pollutes the air and taints water sources. They ask the bureau to investigate CGA’s “Fuelling Canada” campaign that instead depicts gas as a low-emission, “sustainable energy choice for the future.” The complainants are asking that the CGA, which represents companies like Enbridge and Fortis, be fined and forced to retract its statements – should they be judged false and misleading. The complaint also takes issue with CGA’s position that gas is, and will remain, the most budget-friendly option for Canadian homeowners. Gas is already more expensive than a low-carbon heat pump, writes CAPE, citing a 2022 report from Natural Resources Canada. And due to climate policies, “gas companies will also have to either adopt expensive emissions reduction technologies, such as renewable natural gas, or pay the increasing carbon price.” The CGA’s messaging does not cover that ground. It describes natural gas as budget-friendly, claiming on Twitter and elsewhere that “households that use natural gas for space and water heating save up to C$2,000 a year compared to other heating sources.” These representations “could convince a family to install a gas-powered energy system because they believe it to be ‘clean’ and ‘affordable’ but be stuck living with a harmful polluter and paying volatile, rising gas prices for the 25-year life of the system,” CAPE says. And “low-income households will be the worst impacted.” (The Energy Mix)

EMEA

Mark our words – EU member states reiterated their commitment to the Paris Agreement ahead of COP27 next month, saying they expect a 2009 pledge to provide $100 bln per year in financial assistance to developing nations “will be met in 2023”. Economy ministers from the EU-27 met on Tuesday and adopted conclusions reiterating their commitment to deliver on international climate finance. The statement emphasised the need to “raise ambition and accelerate action” in response to climate change by pushing governments to “provide appropriate incentives to attract public and private investments”. Ministers pledged to deliver on a 2009 commitment by rich nations to provide $100 billion per year in support of developing countries suffering the most from the consequences of climate change, a target which so far has never been met. In their statement, the ministers said they expect “the goal will be met in 2023”. (Euractiv)

Insurer turns greenerMunich Re will no longer invest or insure new contracts or projects in oil and gas fields if there has been no production from them before the end of this year, the German financial giant announced Thursday as part of its commitment to the Paris Agreement. The policy also extends to new midstream infrastructure related to oil, as well as new oil fired power plants. The move covers investment and insurance where the contract or project is bundled with other risks, such as existing oil and gas fields.

Transition transaction – South Africa has submitted a plan to the governments of the UK, France, Germany, and the EU on how it plans to spend the $8.6 bln promised to help the country’s state utility to transition from coal to renewables, sources told Reuters on Thursday. South Africa is the world’s 12th largest emitter, largely due to 80% of its electricity being powered by coal. The investments were mostly made as concessional loans at the 2021 UN climate talks in Glasgow (COP 26). South Africa is hoping to get a deal in to secure the funding before this year’s COP27 climate talks are held in Egypt. (Reuters)

ASIA PACIFIC

Yes, but no – Simon Upton, New Zealand’s parliamentary commissioner for the environment, has commissioned a report to consider whether there are grounds for NZ to change its rule that farmers can not use forestry credits to offset methane emissions. The experts found that it would be possible to offset NZ’s annual 16.4 MtCO2e in methane emissions through CO2 sequestration, but it would take up an area of over 700,000 hectares to do so, and area would need to be replanted every 16 years. Those massive planting efforts would technically make NZ’s agriculture sector net zero, but would still contribute to global warming as the cooling effect of the forests would not entirely make up for the warming effect of the cattle herds, Upton’s report said. The commissioner chose to not make any recommendations either way on offset eligibility.

VOLUNTARY

Route to REDD – Standards body Verra launched their own consultation for Unplanned Deforestation and/or Degradation (AUDD) methodologies in its transition to a consolidated REDD methodology on Oct. 5 and updated their website’s list of what’s open for consultation on Thursday. Revising how limits on reference regions are lifted, standardising how to forecast future deforestation, as well as revising field data uncertainties are all up for consultation. Comments will be accepted until Nov. 6.

Comments commence – The American Carbon Registry (ACR) is launching its public consultation for a new methodology for avoided deforestation in the US, a press release announced Thursday. The methodology co-authored by offset developer Green Assets and ACR is written for the quantification, monitoring, reporting, and verification of GHG emission reductions and removals from avoided deforestation projects. ACR’s methodology only applies to non-federal US forestlands which avoid land use change to agriculture, mining, or development.

SCIENCE & TECH

Impatient hydrogen – Europe cannot afford to ait any longer for regulation around green hydrogen production, industry groups said on Thursday. The Renewable Hydrogen Coalition and Hydrogen Europe urged the EU to adopt latest proposals for hydrogen development as soon as possible. “The renewable hydrogen industry cannot afford to wat another three months to have production rules, nor face a patchwork of national rules from the transportation of RED [the renewable energy directive] that would obstruct cross-country trade and undermine investments,” they said in an open letter. The lobby groups warned there would be no investment if offtakers cannot claim their hydrogen as fully renewable. The warning comes after Hydrogen Europe spearheaded a campaign that saw the EU Parliament scrap the European Commission’s proposals for the industry, which included additionality regulations by 2027, in which green hydrogen is produced using only new renewable energy capacity and accounted for on an hour-by-hour basis. The lobby groups’ letter calls for additionality to be phased in by 2028, and the renewable energy used to make the hydrogen accounted for on a monthly basis. “Switching to a more granular temporal correlation should be gradual, subject to the actual deployment of renewables and actual feasibility for project developers to deliver a tighter requirement,” the letter stated.

AND FINALLY…

Brief pause – The scramble to secure energy supplies will slow the pace of the energy transition for a few years, but it will regain its momentum in due course, according to Lord Stern of the London School of Economics. “The combination of needing to find more energy in the next three or four years, together with the disruption of capital markets … will slow things down,” he told the Energy Intelligence Forum in London. “But I think also if you look out three, four, five years and more, it will accelerate,” said Stern, a professor of economics and government at the LSE. The current crisis has prompted some observers to suggest that the three elements of the so-called energy trilemma — affordability, sustainability and security of supply — are irreconcilable under the present circumstances. But Stern — lead author of the 2006 Stern review on the Economics of Climate Change — said that in his view “the horse race between prosperity on the one hand and environment on the other is a fake horse race.” “We fail at one, we fail on the other. … I think this is such a time where we can advance on those three fronts together.”

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