Carbon Forward 2022 – Europe’s leading environmental markets conference – takes place in London and online this week from Wednesday to Friday, 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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CARBON FORWARD 2022
Gabon boasts potential to scale, co-benefits in forthcoming massive REDD credit issuance
Gabon’s upcoming massive issuance of carbon credits comes with extensive co-benefits and the ability to scale, the nation’s environment minister Lee White said on Wednesday.
CORSIA offset demand to skew 30% lower with revised baseline -analysis
The weakening of CORSIA’s post-2023 emissions baseline last week will depress airlines’ carbon credit demand by 30% compared to UN body ICAO’s original plan, a market research provider said Wednesday.
South African carbon supply shortfall forecast to average 100 mln into 2030s
The gap between the supply and demand of eligible carbon credits for cancellation against South Africa’s domestic carbon tax will average 100 million across each trading phase until at least 2030, and continue well into the 2030s, a conference heard Wednesday.
ASIA PACIFIC
ANALYSIS: Passing SMC legislation could prove challenging for Australia’s Labor govt
Australian political parties are examining the draft legislation the Labor government unveiled this week to create Safeguard Mechanism Credits (SMCs), however passing it could prove challenging if rhetoric from the Greens Party is anything to go by.
Australia’s Clean Energy Regulator pushes next ERF auction to 2023
The next Emissions Reductions Fund (ERF) auction will be held on Mar. 29-30 next year, the Clean Energy Regulator announced Thursday, as the multiple ongoing reform processes to the Australian offset market means there will only be one auction in 2022.
Australian govt green bank invests in regenerative carbon project
Australia’s Clean Energy Finance Corporation (CEFC) has committed A$30 million ($18 mln) to a hybrid sustainable grazing model that it says will generate carbon credits and protect biodiversity and sustainable red meat production.
SK Market: Bids dry up in monthly KAU auction as bearish sentiment grips market
South Korea on Wednesday sold only half the allowances on offer in its monthly CO2 permit auction, amid dwindling buy interest as the market again faces challenges with oversupply.
Investment of $37 bln to retire Indonesia’s coal fleet by 2040 more cost-effective than prolonging subsidies for fossil fuel power -report
Indonesia would be able to exit coal-fired power by 2040 with investments of $37 billion, but this cost compares favourably over the long term with recent annual subsidies to coal plants amounting to $10 bln annually and the high cost of deploying CCUS, according to research released on Thursday.
Indian companies form carbon market association to help shape emerging policy landscape
A group of stakeholders have launched an Indian carbon market association to help shape the development of domestic emissions trading and contribute to boosting the nations’ market capabilities.
EMEA
EU talks to continue on gas price cap after “difficult” ministerial meeting
A broad consensus of EU nations support a gas on gas prices for power generation, EU energy commissioner Kadri Simson said on Wednesday after a “difficult” informal meeting of the bloc’s energy ministers.
Euro Markets: EUAs shrug off strong auction and funds’ short covering to again test support
EUAs shrugged off a midday price surge triggered by a combination of a firm Polish auction and a 2 million tonne drop in investment funds’ net short positions to again test recent lows, while energy prices were largely stable as EU ministers met to discuss ways to cap the price of natural gas used for power generation.
UK business progress on net zero at risk from carbon offsets, say government advisors
Voluntary carbon markets are not working, according to a report released Thursday from the UK’s Climate Change Committee (CCC) that outlined related risks to businesses in reaching their net zero emissions commitments, and provided offset-relevant recommendations to UK policymakers.
UK govt to allow ETS emitters to omit COVID-led activity declines from free allocation calculations
The British government will this year legislate changes to allow big emitters to omit COVID-triggered drops in their 2020 activity levels that might have adverse effects on their future free UK ETS carbon permit allocations.
Carbon options traders at Swiss commodities shop, Czech utility join UK-based energy fund
The head of emissions at a Swiss commodity trading firm and a carbon options trader from a Czech utility have left their respective firms to join a UK-based energy investment fund.
AMERICAS
California’s recent legislative, regulatory actions to impact WCI allowance price forecasts -analysts
Bills and regulations approved last quarter are expected to impact California’s emissions forecasts, the supply and demand for California Carbon Allowances (CCA) in the state’s cap-and-trade scheme, and allowance prices, a webinar heard Wednesday, based on four scenarios presented by an analysis firm.
Voluntary CCO retirements pick up while California carbon market deadline approaches
California compliance offset issuances ticked slightly upwards this week ahead of the state’s interim cap-and-trade compliance deadline, while entities voluntarily retired more credits over Q3, according to state data published Wednesday.
Washington Clean Fuels Program to yield early credit surplus -report
The Washington Clean Fuels Program (WCFP) will build up a substantial credit bank over its first two years as low-carbon fuels will easily beat the GHG reduction goals of the transportation sector system, according to a report released Wednesday.
INTERNATIONAL
World Bank to launch carbon credit metadata layer in December, names interim secretary
The World Bank, in partnership with the government of Singapore and the International Emissions Trading Association (IETA), will launch a decentralised metadata layer for operational use in December that will enable end-to-end offset data sharing and transparency for carbon markets.
Developing countries must be involved in proposed climate club -report
Developing countries should be involved in the creation of a climate club which the G7 has pledged to establish by the end of this year, according to a report published by researchers that also underlined the importance of keeping the initiative as a supportive measure for UN-level climate targets.
VOLUNTARY
AirCarbon Exchange, C-Quest join forces to launch first carbon credit auction for LED lighting projects
Singapore-based voluntary carbon trading platform Air Carbon Exchange (ACX) and US-based offset developer C-Quest Capital (CQC) have teamed up to launch what will be the first-ever auction for carbon credits generated from LED light bulb projects, the two companies jointly announced on Wednesday.
Offset ratings firm downgrades Canadian VCS project
A carbon credit ratings agency downgraded a Canadian VCS-registered project to its lowest score amid fresh information and a review.
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CONFERENCE
Carbon Forward 2022 – Europe’s leading environmental markets conference – takes place in London and online this week from Wednesday to Friday, 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
Systematic change – A group of 10 major economies are building momentum to scale-up climate finance for developing countries by reforming how development banks spend money, starting with the largest: the World Bank. On Tuesday, Germany and the US handed a joint proposal for “a fundamental reform of the World Bank” to its management, during this week’s annual meetings in Washington DC. The proposals aim to make the bank fit to address global challenges, including climate action and biodiversity conservation. A spokesperson for the German government told Climate Home the proposed reforms were backed by 10 countries, including all of the G7 group. Development minister Svenja Schulze, who serves as Germany’s representative on the World Bank’s board of governors, said: “The World Bank’s current model … is no longer appropriate in this time of global crises. Challenges and investment needs are so great that the model needs to be adjusted.” Schulze said the reforms should include “climate lending on better terms” and “targeted budget support for governments which want to pursue policy reforms to make their economies climate neutral”. Germany expects a response from the bank by the end of the year.
Reduction race – Europe’s fourth-largest emitter, Italy’s Enel, has cut more carbon than any other company on Earth over the past decade, Corporate Knights has discovered in its latest research. By slashing 73 Mt since 2012, Enel has achieved an impressive 56% cut in Scope 1 and 2 emissions, making the Italian electricity and gas distributor something of a “renewable supermajor.” Released today, Corporate Knights’ latest research – the Carbon Reduction 20 – pinpoints global companies that have decarbonised faster than their peers while simultaneously increasing revenue over the last decade (2012-21). To identify these transition players, Corporate Knights evaluated GHG emission trends for more than 6,500 global companies across eight critical sectors, which account for more than 95% of global emissions by publicly traded companies. While the Carbon Reduction 20 have decarbonised their operations significantly from 2012 to 2021 (by 43%, for a total of 373 Mt), it should be noted that the companies identified in this research are still some of the world’s largest and most active polluters.
More storage – Energy storage installations around the world are projected to reach a cumulative 411 GW (or 1,194 GWh) by the end of 2030, according to the latest forecast from research company BloombergNEF. That is 15 times the 27GW/56GWh of storage that was online at the end of 2021. BNEF’s 2H 2022 Energy Storage Market Outlook sees an additional 13% of capacity by 2030 than previously estimated, primarily driven by recent policy developments. This is equal to an extra 46GW/145GWh. The most notable new policies include the US Inflation Reduction Act, a landmark piece of legislation providing more than $369 bln in funding for clean technologies, and the European Union’s REPowerEU plan, which sets ambitious targets to reduce reliance on gas from Russia.
EMEA
Taps on – Vladimir Putin has suggested that Russia could supply gas to Europe this winter using one section of the Nord Stream pipelines that remains intact, and that the other lines could be repaired if their future use were guaranteed, while also suggesting rerouting volumes via Turkey. In a speech railing at western plans to introduce a price cap on Russian oil in response to Moscow’s invasion of Ukraine, the Russian president both blamed the EU for rising global energy prices and hailed a recent decision by the Opec+ producers’ cartel to cut oil output in order to keep prices high. Speaking at an energy forum in Moscow on Wednesday, Putin blamed the attacks on the Nord Stream 1 and 2 pipelines on those who “benefit” in the west, hinting at the involvement of Washington, Kyiv or Warsaw. Putin described the attacks as setting “a most dangerous precedent” and warned other infrastructure could be at risk, in what may be viewed in the west as a thinly veiled threat. The US and its allies suspect Russia of sabotaging the pipelines near Denmark, leading to huge gas leaks in the Baltic Sea, and European countries have stepped up military patrols to protect energy supplies and infrastructure. (Financial Times)
Hasta la vista – Spain has begun the process of withdrawing from the Energy Charter Treaty, its minister for the ecological transition said. Teresa Ribera told Politico that a process to reduce the pact’s protections for fossil fuel projects had brought “no improvements.” The 1994 treaty was designed to protect investments in energy infrastructure in post-Soviet countries but it affords sweeping protections for investors against government intervention. Those protections have been used in recent years to sue countries for climate friendly policies, such as coal power phaseouts and restrictions on drilling for oil. Reforming the deal to strip protections from fossil fuels has been a priority for the EU. Talks concluded in June with a proposal that would allow the EU and UK to phase out fossil fuel protections, but green groups and some EU countries have criticised the plan. Spain has said for the past two years that the process needed to deliver profound change or it would leave.
Intense stuff – Germany’s major economic sectors, including energy supply, mining, manufacturing and agriculture, emitted 205 kilograms of CO2 per €1,000 of gross value added in 2020, down 8.4% from a year earlier, according to a new report by the Federal Statistical Office (Destatis). The report examines the emission intensity of the country’s economic sectors, which also include water supply and waste management, construction and services. The emission intensity had steadily decreased in the preceding years, falling 26.6% from 304 kg of CO2 per €1,000 of gross value added in 2010 to 224 kg by 2019. The energy supply industry had the highest emissions intensity in 2020 with 4,506 kg, and the highest absolute CO2 emissions in 2020 of 228.7 Mt or 40% of total emissions. (Clean Energy Wire)
Repurposed assets – Net Zero Technology Centre has been awarded £2.12 mln from Scottish Government’s Just Transition Fund (JTF) to support delivery of its Hydrogen Offshore Production Project (HOP2). The HOP2 project, which will be delivered over four years, will demonstrate if offshore hydrogen production and storage is feasible at a scale of 500 MW to 1 GW through the repurposing of existing oil and gas assets. It will also outline what a new build project for offshore hydrogen production could deliver within the UKCS and what the impact of anchoring this emerging sector in Scotland will be on the regional workforce, supporting a just transition.
ASIA PACIFIC
Going public — The Australian branch of US investment firm VanEck will launch the first exchange-traded fund on the ASX this week, under the ticker XCO2, Investor Daily reports. The plan to list on the local bourse was announced in May, and will allow local investors to take advantage of the potential rise of carbon credit prices by providing them access to the biggest ETS’s in the world. XCO2 will track the ICE Global Carbon Futures Index, which sources carbon credit futures prices from the EU ETS, the Californian Cap and Trade Programme, the RGGI, and the UK ETS. VanEck APAC CEO and managing director Arian Neiron said the benefit of global carbon credit futures is that they can be freely traded on global exchanges with attractive market size and liquidity, giving investors full price discovery.
Maiden voyage – Marubeni has conducted a trial voyage on one of Marubeni’s chartered vessels using a marine biofuel blend, from Vlissingen, the Netherlands to Morgan’s Point, Texas, the company said in a press release. To the best of the company’s knowledge, this is the first biofuel supply to an ethylene carrier in the world. The ethylene carrier GasChem Dollart was supplied with B25 marine biofuel in Vlissingen, the Netherlands, consisting of approximately 25% fatty acid methyl ester (FAME), blended with very low sulfur fuel oil (VLSFO).
E-investment – SK Trading International, a subsidiary of SK Innovation’s crude oil and petroleum products trading business, has invested in Infinium, a technology company specialising in electricity-based fuel (e-fuel) in the US, the company stated in a press release. Infinium is a company with liquid fuel synthesis process technology. By synthesising hydrogen with carbon dioxide based on gas to liquid technology, it is considered to have the fastest commercialisation rate in this field. It plans to continue to increase its scale early next year, starting with its first commercial production in Texas.
AMERICAS
Production push – Senate Energy Committee chair Joe Manchin (D) is urging President Joe Biden to marshal executive powers to help boost US oil production following the OPEC+ move to cut output. Manchin, in a new letter, calls the OPEC+ move “reckless” and a revenue boost for Russian President Vladimir Putin’s regime. It calls for steps including: more drilling permits and other steps to enable companies to develop federal leases; expedited reviews for energy projects, including the Mountain Valley Pipeline; and ensuring permitting agencies have enough staff. Manchin’s appeal echoes his legislation to mandate faster permitting for U.S. energy projects, which has stalled. (Axios)
AND FINALLY…
Dual crises – The World Meteorological Organization (WMO) has warned that climate change could spark an energy crisis as serious as the one currently resulting largely from Russia’s invasion of Ukraine, according to New Scientist. The organisation has, therefore, issued an “urgent” call for nations to prepare their power grids for extreme weather, in a year when hurricanes, heatwaves and flooding have already led to blackouts around the world, the news outlet adds. Covering the same report from WMO, Reuters references suggestions made by the organisation including retrofitting hydropower dams to match new rainfall patterns and shoring up plants against storm surge. (Carbon Brief)
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