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TOP STORY
FEATURE: Market sees limited CORSIA aviation buyers pre-2024 as air of uncertainty clouds future demand
Demand for CORSIA-eligible units will remain limited until at least 2024 with most airlines unlikely to need credits to comply with ICAO’s recently-agreed weaker baseline, according to sector stakeholders, while many potential buyers are still confused about their compliance obligations and credit eligibility and will therefore stay on the sidelines until greater clarity emerges.
EMEA
Brussels to propose larger REPowerEU funding after assessing needs
The European Commission will propose adding “EU financial firepower” to the bloc’s REPowerEU initiative to exit Russian fossil fuels, it said on Tuesday, making good on an earlier call by Commission President Ursula von der Leyen and raising the potential for a further raid on the EU ETS.
Euro Markets: Late recovery drives modest EUA gain as traders see market losing momentum
EUAs posted a modest gain on Tuesday despite spending most of the day in negative territory, while energy prices declined amid increasing confidence that Europe will weather the coming winter without fuel and power shortages.
UK emissions expected to fall through 2040, but pace too slow for net zero
The UK government released its 2021-40 emissions projections on Tuesday, detailing progress towards climate goals while underscoring that further efforts will be needed to reach net zero GHGs by mid-century.
ASIA PACIFIC
Singapore inks bilateral carbon market deal with Vietnam
Singapore has signed another bilateral agreement, this time with Vietnam, on collaboration over carbon credit trading in line with Article 6 guidelines, the island-state’s Ministry of Trade and Industry announced.
Australia, Singapore to cooperate on carbon markets as part of broad green economy agreement
Australia and Singapore on Tuesday signed an extensive green economy agreement (GEA) that paves the way for bilateral cooperation on a wide range of efforts to cut greenhouse gas emissions, including on international carbon markets.
Australian businesses united in wanting stronger NDC, divided on path to achieve it
A new survey suggests the majority of Australian businesses want the government to set more ambitions emissions reduction targets, and that getting to net zero by 2050 is not fast enough, as uncertainty dominates the domestic carbon market.
Global asset manager signs ACCU offtake agreement with Indigenous savanna burning project
A global asset manager has signed a three-year Australian Carbon Credit Unit (ACCU) deal to receive savanna burning carbon credits from an Indigenous Australian carbon corporation.
China’s Liaoning and Baotou to introduce forestry offset plans
Two regional governments in China have announced their latest plans for the forestry offset market, despite a lack of policy clarity due to the suspension of the national offset programme.
Singapore-based investor commits $10 mln to recently launched carbon fund
An Australian-based carbon market investment company has secured a $10 million investment in its second carbon fund from a Singapore financial investment firm specialising in regenerative agriculture and nature-based solutions.
South Korea seeks more market makers to solve ETS liquidity issue
South Korea has issued a tender for two more market makers to operate in its national CO2 emissions trading scheme from the turn of the year, in the hope that it might help improve liquidity in the modestly traded market.
APAC merger creates markets, tech, and climate solutions platform
An Asia Pacific carbon and clean energy tech and services firm has acquired an Asia-based environmental and energy commodity markets brokerage company, as part of a strategy to offer end-to-end markets, tech and climate solutions for business.
AMERICAS
Nova Scotia proposes bill to replace cap-and-trade programme with emissions-based system
The Progressive Conservative government of the Canadian Maritime province of Nova Scotia on Tuesday presented an alternate plan for meeting Canada’s federally mandated carbon price of C$65/tonne in 2023, which if passed would replace Nova Scotia’s three-year-old cap-and-trade programme.
California’s power sector GHG emissions through September nearly match year-ago levels
Carbon emissions from California’s electricity sector through the first nine months of the year were almost identical to levels recorded for the same period a year ago, as natural gas-fired generation overtook renewables to become the dominant source of power on the grid, data published Tuesday from network manager California Independent System Operator (CAISO) showed.
Colombia’s carbon tax reform offset usage limit remains unresolved
The percentage of allowable offsets to be included in Colombia’s carbon tax reform remains a key point of contention among stakeholders closely following the ongoing tax reform debate process in congress.
Canadian logging as polluting as oilsands, with climate impact ‘masked’ by dubious accounting -report
Canada’s logging emissions are roughly equivalent to those from the country’s oilsands, according to a report published Tuesday, which also accused the federal government of significantly underestimating the CO2 output from the forestry industry.
Washington state opens public feedback period on forest offset project
The Washington State Department of Natural Resources (DNR) and a major US developer announced on Tuesday the details of a public comment period for a sizeable forest protection offset project.
UPDATE – High court’s ruling derails Pennsylvania’s chance at Q4 RGGI auction listing
(Updates Monday’s article with additional comments on outlook for the outstanding Pennsylvania RGGI legal cases)
VOLUNTARY
High intermediary markups dragging on voluntary carbon market development, warns report
Intermediaries and investor profits accounted for a third of the traded value in the voluntary carbon market (VCM) in 2021, claimed a report published on Tuesday that proposed a more developer-centric model to finance small- and mid-sized projects.
EKI partners with Singapore firm in launch of $125 mln climate impact fund
EKI Energy Services, the world’s largest carbon offsets developer, has launched India’s first climate impact fund, worth $125 million, in a partnership with a Singaporean fund management company, they announced on Tuesday.
New Singapore exchange readies for voluntary carbon futures launch
A new exchange has taken a step closer to launching a batch of voluntary carbon market futures that will soon be followed by a fresh approach to the liquified natural gas (LNG) market.
ICE unveils voluntary carbon auction participation roadmap ahead of first sale in December
Exchange operator ICE has unveiled a roadmap for participation in its upcoming voluntary carbon auctions, with the first such sale set to take place in December.
INTERNATIONAL
CCS capacity to grow six-fold by 2030 but not fast enough for net zero track, energy consultancy says
Global capacity of carbon capture utilisation and storage (CCUS) is set to grow six-fold over the rest of the decade to around 280 million tonnes per year, although this rate of growth is still not fast enough to meet climate goals, according to research by an energy consultancy released on Tuesday.
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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
Threat averted – The Net-Zero Banking Alliance told its 119 members on Monday they can continue to fund fossil fuel projects — even for coal — Bloomberg reports. The new guidelines allow major banks to continue to reap the reputational benefits of being able to say they are a member of the NZBA without needing to actually divest from any of the polluting industries causing the climate crisis. In turn, the NZBA avoids the embarrassment of many of its most notable members following through on threats to leave the group en masse. The NZBA letter to its members — which include Deutsche Bank, Goldman Sachs, UBS, JPMorgan Chase, Morgan Stanley, and Bank of America, among others — came after the UN-backed Race to Zero campaign tightened requirements for its members’ decarbonisation targets. It also set off calls for the Glasgow Financial Alliance for Net Zero, the world’s biggest zero-carbon finance club, to explain how its members will reach the net-zero targets to which they have committed. (Climate Nexus)
EMEA
Scholz’s shove – Germany extended its last three nuclear power plants beyond the end of this year after Chancellor Olaf Scholz put an end to a coalition spat that threatened efforts to deal with an unprecedented energy crisis, Bloomberg reports. In a dramatic reversal of an earlier decision by Economy Minister Robert Habeck, Scholz ordered Germany’s remaining reactors to remain in operation until mid-April next year at the latest. The plants, which provided less than 12% of the country’s power last year, will remain connected to the grid and can help offset periods when other generation is low or when demand peaks.
Treaty turmoil – The Energy Charter Treaty (ECT) edged closer to a full-blown European revolt late on Tuesday, as the Netherlands became the latest country to announce it would withdraw from the deal, Politico reported. Spain made a similar call last week, with Poland also in the process of withdrawal. Italy has quit. Read Carbon Pulse’s reporting on a ‘carve out’ won by European nations in June that would curb protection for fossil fuels under the treaty.
True blue – Blue Carbon, recently founded in the UAE with an aim to support carbon removal projects around the world, hosted a four-day workshop for Angola’s Minister of Agriculture and Forestry delegation in Dubai with the objective of advancing the development of the countries “huge forests” as nature-based initiatives. “It may be mentioned that Angola’s forests are spread on over 69.3 mln hectares of land, 55.6% of its total territorial area, with 68.9 mln hectares of native (natural) and 61,000 hectares of planted rainforests. Leveraging on preserving its forests, Angola has a significant potential globally to fight the negative effects of the climate change,” Blue Carbon said in a release. During the workshop, Blue Carbon also offered national forestry inventory and aggregate data services to Angola. (Menafn)
ASIA PACIFIC
Not ready – Asian economies are ill prepared for upcoming carbon market regulation by the European Union that proposes a levy on imports of carbon-intensive goods and makes goods produced in countries with weaker carbon pricing mechanisms highly uncompetitive, industry sources and analysts told S&P Global Commodity Insights. Few countries in Asia have imposed any form of carbon tax and only China, South Korea, and Australia have established nationwide emission trading schemes to price carbon. Most exporters in these countries also lack broader awareness about the impacts of the EU’s move, and are yet to establish uniform, stringent emission accounting and reporting practices, industry executives said. EU’s carbon border adjustment mechanism, or CBAM, could be implemented as early as 2023 when European companies have to start reporting emissions of imported goods, although they will not need to purchase CBAM certificates until 2026-2027. The Council of the European Union and the European Parliament are yet to decide on the timeline. This gives Asian governments some breathing room to put in emissions accounting frameworks, but decarbonising supply chains could still take years to accomplish, analysts said.
Stepping down – Indonesia’s state utility Perusahaan Listrik Negara (PLN) is in negotiations with U.S. and European investors to help finance an acceleration scheme for its coal power plant retirement, its chief executive said on Tuesday, according to Reuters. PLN is targeting reaching net zero carbon emission by 2060 and planning the early retirement of coal plants worth a collective capacity of 10 gigawatts overall.
Hydrogen momentum – The development of a hydrogen hub is being fast tracked by the West Australian government after receiving significant interest from major global producers, ABC reports. The state’s hydrogen minister, Alannah MacTiernan, said the government would tip A$5.5 million into feasibility and planning works for the Oakajee Strategic Industrial Area. This included spending A$500,000 on a joint study with the Netherlands’ Port of Rotterdam — which is working to become Europe’s hydrogen hub — into exporting hydrogen products. Ms. MacTiernan said the 6,000-hectare Oakajaee site had potential to create world class renewable hydrogen exports.
AMERICAS
Insurance assurance – The US Treasury Department is launching an initiative to uncover climate-related risks to private insurance markets via data collection, Axios reports. Property insurance is becoming harder to buy in places like wildfire-plagued California and hurricane-devastated Florida, so prompted by an executive order on financial risks from climate change, Treasury’s Federal Insurance Office is issuing a proposed data collection from large property insurers to help assess those risks across the US. It aims to identify the potential for disruptions in private insurance coverage in parts of the country that are especially at risk of climate impacts. The data collection would generally apply to large property and casualty insurers in most states with $100 mln or more in policies. The information would be aggregated by ZIP code, and would not include information on individual homeowners’ policies.
Cover story – Nearly six in 10 US farms surveyed (57%) currently plant cover crops on their farmland, according to the latest Purdue University/CME Group Ag Economy Barometer report. The top reasons among survey respondents for planting cover crops are to “improve soil health” (37%) and “improve erosion control” (33%), while just 5% said “carbon sequestration” was a motivator for planting cover crops. Estimates say that cover crop plantings increased to 22 mln acres in 2021, up 43% from the 15.4 mln acres planted in 2017. Purdue’s Ag Economy Barometer for September 2022 also found that 40% of producers who planted cover crops said they have done so for five years or less. Another 28% have done so for 10 years or more. Most of these producers only plant cover crops on a portion of their farmland. Each month, Purdue’s Ag Economy Barometer calculates data from 400 US agricultural producers’ responses to a telephone survey. (AgFunderNews)
Carbon price exemption – A private member’s bill that would exempt certain agricultural activities from the federal carbon price is under discussion by MPs, Canada’s National Observer reports. Ontario Conservative MP Ben Lobb first tabled Bill C-234 in February. It is based on a previous bill sponsored by a fellow Tory that died on the order paper when the federal election was called. Lobb’s bill would amend the Greenhouse Gas Pollution Pricing Act to add propane and natural gas used to dry grain and heat livestock barns to the list of farm fuels (gasoline and diesel) already exempt from the federal carbon tax. The bill passed second reading with the support of the Conservatives, NDP, Bloc Quebecois, and Green Party in May.
On our lands – Three BC First Nations have reached a pact in which two of the groups have agreed to help the third tackle the environmental effects of industrial development on their traditional territories. The memorandum of understanding was announced Monday by the Haisla, Nisga’a and Halfway River First Nations after being developed through the First Nations Climate Initiative, or FNCI, a network launched in 2019 to focus on climate change and Indigenous concerns. Both the Haisla and the Nisga’a nations are pursuing liquefied natural gas projects in their respective territories. The region is home to the Montney natural gas fields in northeastern BC, which are to feed LNG Canada, a processing facility under construction in northern BC on a Kitimat industrial site on the Haisla Nation’s traditional territory. The area is also a likely source for other proposed LNG projects, including Cedar LNG, a partnership between the Haisla and Pembina Pipeline Corp., and the Ksi Lisims project, being pursued by the Nisga’a and Rockies LNG and Western LNG. Through the MoU, the three nations plan to explore nature-based solutions on the Halfway River territory – including planting trees and restoring wetlands – to protect and restore ecosystems, as well as nurturing carbon sinks. The FNCI on Monday also called on the BC and federal governments to expand carbon markets, saying those markets could help governments reach net zero targets and help foot the bill for massive restoration projects on Indigenous territories. (Globe & Mail)
VOLUNTARY
Amazon carbon credits – Mercuria Energy Trading is one of three companies showing interest in registering and acquiring up to 200 Mt of jurisdictional carbon credits tied to the Amazon forest that are being sold by Brazil’s Tocantins state, officials said. Tocantins expects the credits, generated between 2016 and 2032, to be worth up to 2 bln reais ($191 mln), said state environmental official Marli Santos. Switzerland-based Mercuria is competing with a subsidiary of Britain’s Systemiq, a company focused on sustainable businesses, and Brazil’s Future Carbon Holding. The state will announce the winner on Wednesday, Tocantins said in a statement. (Reuters)
Urban trees on blockchain – The Regen Network Development has released its marketplace application for tokenized carbon and ecological assets, Regen Marketplace, with a listing for 2021 City Forest Credits (CFC). CFC is the US national standard for carbon emission reductions through urban forest preservation and carbon removal through urban tree canopy reforestation. The urban forestry projects featured in the marketplace launch have direct impacts on 20 million Americans, the Regen Network Development claims. The CFC portfolio represents all the verified city forest carbon credits across the US. The Regen Marketplace is targeted at nature-based solutions. Sellers can define, manage, mint and sell tokenized carbon and other ecological assets in the blockchain-based registry system. More than 20 partners are currently designing new ecological assets within the Regen Marketplace. Since 2020, Regen Network Development has partnered with blockchain protocols to become carbon neutral, retiring over 10,000 tons of carbon.
AND FINALLY…
Up in smoke – In an open-access report in the journal Environmental Pollution, researchers from UCLA and the University of Chicago estimate that California’s wildfire emissions from 2020, estimated at around 127 Mt of CO2e, are approximately two times higher than California’s total GHG emissions reductions since 2003. Without considering future vegetation regrowth, CO2e emissions from the 2020 wildfires could be the second most important source in the state above either industry or electrical power generation, the report said. The CO2 from wildfires is not counted against California’s emissions targets, but if it were they would be setting California back in meeting its climate goals, with the carbon emissions from California’s 2020 fire season alone making up 49% of the state’s 2030 emissions target. California’s expansive wildfires were the second largest source of emissions in the state in 2020, behind only the transportation sector, the report found. While some of the carbon release from fires will be balanced by later vegetation regrowth, it will not occur quickly enough to avert highly dangerous levels of increased emissions, temperatures, and climate change, the researchers said. The researchers also examined the financial costs. The emissions released from the 2020 wildfires equate to more than $7 bln in total global damages, or about $986.9 mln in damages to the US and some $98.7 mln in damages for California. These damages are on top of the fire control costs, damages from air pollution, and direct loss of life and property. (Green Car Congress)
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