CP Daily: Thursday October 20, 2022

Published 00:43 on October 21, 2022  /  Last updated at 00:43 on October 21, 2022  /  Newsletters  /  No Comments

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

Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here

TOP STORY

Brazilian state to begin talks with trading firm over sale of 200 mln forestry credits

The preliminary result of a public call issued by the Brazilian state of Tocantins will see a major commodities trading firm progress to negotiate with the government over the sale of 200 million tonnes of jurisdictional forest carbon credits, according to a Thursday release.

ASIA-PACIFIC

INTERVIEW: The carbon credit conundrum of Asia-Pacific’s cross-border CCS projects

Governments and companies across the Asia-Pacific plan to rely heavily on CCS to reach net zero, with annual storage expected in the several hundred million tonnes of CO2 by the early 2030s, most of it via cross-border projects, but so far regulators have been quiet about who would be earning the potential carbon credits for the activities.

Indonesia’s Pertamina, IDX sign agreement to cooperate on carbon trading

Indonesian state-owned oil and gas company Pertamina has signed an agreement with the Indonesian Stock Exchange (IDX) to cooperate on carbon trading.

INTERNATIONAL

EU lawmakers want bloc to strengthen emissions goal, climate finance ahead of COP27

The European Parliament passed a resolution on Thursday urging member states to raise the EU’s 2030 emissions reduction target and disburse more money to developing countries starting this year.

US veteran climate experts note optimism on role of carbon markets

Both the voluntary carbon market (VCM) and international carbon trading under the Paris Agreement should be leveraged for their potential to drive private sector capital towards GHG mitigation, US climate experts said during a summit on Thursday.

VOLUNTARY

VER price rout continues amid economic woes and IC-VCM uncertainty

Voluntary emissions reduction (VER) prices slid lower Thursday, extending a sell off this week, as a combination of the increasingly gloomy macro-economic picture combined with wider concerns over the integrity of the market.

New Forests partners with development agencies to invest in African sustainable forestry fund

Global investment manager New Forests has partnered with three European development finance agencies to invest $200 million in a sustainable forestry fund for Sub-Saharan Africa, the Sydney-based company announced on Thursday.

US agricultural carbon removals startup raises $6 mln for volcanic dust CO2 capture programme

An agricultural carbon removals startup has raised over $6 million in seed funding to scale up its business of using volcanic rock dust to capture CO2 and improve crop yields.

Carbon project developer beefs up digital analytics for forestry activities

A leading carbon project developer has partnered with three technology specialists to provide analysis into its forestry projects at a time of increased scrutiny into the quality of REDD+ and ARR credits.

Environmental markets platform IncubEx hires more ex-ICE talent

Environmental markets platform IncubEx has hired another trading expert formerly with rival ICE.

EMEA

EU leaders gather for energy price talks, REPowerEU gets little early attention

EU leaders gathered for two-day talks in Brussels on Thursday seeking to debate new energy price-taming measures, with an idea for larger REPowerEU funding getting little attention as negotiations were set to continue late into the night.

Ireland to buy EU and international carbon units to meet its non-ETS target

Ireland intends to source both intergovernmental EU carbon units and international offset credits to meet its non-ETS EU emissions obligations, after EU data published this week revealed the nation as the only member state with a major shortfall for 2020.

Euro Markets: EUAs continue in narrowing channel as traders eye technical breakout

EUAs extended their rangebound trading on moderate volume on Thursday as traders eyed technical signals that suggest the market is likely to break out of its month-long range, while energy prices rose for the first time in seven sessions amid signs of lower temperatures approaching the region.

Output from Europe’s largest coal plant could be replaced by wind and solar -report

Europe’s largest coal-fired power plant could replace most of its lignite generation with renewables paired with batteries or lower-carbon thermal capacity, according to a report from a clean energy research group, outlining a strategy that would lower the overall power system costs in the Polish region where it is located while maintaining energy security.

EU needs greater ambition for zero emissions shipping to avoid LNG trap, green think-tank warns

EU regulatory efforts to spur the decarbonisation of shipping need to be strengthened to avoid the use of LNG as a transitional lower emissions fuel for vessels, a shift which would not only undermine efforts to realise climate goals for the sector but also mitigate the region’s energy security objectives, a non-profit think-tank has warned.

AMERICAS

NA Markets: Macro market weakness derails CCAs, RGAs trek higher

California Carbon Allowance (CCA) and RGGI Allowance (RGA) prices gave back most of last week’s gains, falling back in step with broader market weakness after two weeks of respite from nearly two months of declining price action.

—————————————————

Premium job listings

Or click here to see all listings

—————————————————

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

Getting it done – Indonesia is on track to secure a clean energy partnership with rich countries when it hosts a G20 summit in November, obtaining international funding to cut its reliance on coal power and to implement a green and fair transition, energy analysts said, according to the Thomson Reuters Foundation (via Japan Times). The multibillion-dollar agreement is expected to help Indonesia retire coal-fired plants early and ramp up investment in renewables, backed by wealthy nations, development and private banks, and philanthropists.

Hydrogen high – The fledgling green hydrogen industry has seen an investment surge of over $70 bln in the wake of Russia’s illegal invasion of Ukraine, as producers have looked to develop production facilities that do not rely on costly fossil gas as a feedstock. That is the conclusion of a major new report from think-tank Carbon Tracker, which warns that hydrogen production assets that rely on fossil gas could become stranded over the course of the next decade as green hydrogen plants become increasingly cost competitive. (BusinessGreen)

But can they afford the hotels? – For the first time ever, children will have an official space at the UN climate conference in Egypt next month. It may be surprising given the way young activists like Vanessa Nakate and Greta Thunberg have lead the climate movement in recent years, but young people have not had a dedicated platform at a COP before now. The newly-announced Children and Youth Pavilion at COP27 in Sharm El-Sheikh will enable them to hold discussions and policy briefings. It will be located in the ‘Blue Zone’ – the inner, UN-managed space which hosts the global negotiations. (Euronews)

EMEA

Cleaning up the cape – South Africa’s cabinet has approved an investment plan for an $8.5 bln package to accelerate the country’s transition away from coal and towards clean energy. In a short statement, the country’s cabinet said the plan outlines the investments required to achieve the decarbonisation commitments made by the government of South Africa while promoting sustainable development, and ensuring a just transition for affected workers and communities. The plan, expected to be published at next month’s COP27 climate summit, follows nearly a year of negotiations between the governments of South Africa and the UK, EU, US, France, and Germany, which are contributing funds. South Africa’s president Cyril Ramaphosa has repeatedly said his government would only accept a deal that offered good terms, based on grants and concessional funding, that aligns with national development goals, including debt reduction and job creation. Yet insiders told Climate Home News that less than 3% of the money will be delivered as grants, with the rest split between concessional and commercial loans. International finance experts have questioned whether package offers the country better terms than it can already access on local and international markets.

There’s always a catch – Europe has worked hard to fill up natural gas reserves for the winter, but the inconvenient truth is that national governments have little to no control over those supplies. Only about 10% of the gas in storage facilities from Italy to the Netherlands is under the direct control of public officials through national strategic reserves, according to data compiled by Bloomberg. The rest is in the hands of international trading companies, energy utilities, and industrial groups, and companies are free to sell to the highest bidder, even if it’s in another country. That means a cold snap in Germany could trigger a run on gas in its neighbours and strain Europe’s solidarity in the process. The region’s gas network is supposed to work by allowing supplies to flow between markets. As long as there’s enough fuel in the system, it should balance out. But it hasn’t operated under a scenario like the current crisis.

Interference risk – EU leaders should commit to gas demand cuts as interfering with wholesale gas prices would create “significant risk” of supply shortages, said think-tank Epico ahead of a key meeting in Brussels on Thursday. Options such as gas price caps, a new LNG price index, joint buying and directly subsidising end-users all included one or more political, financial or supply security risks, according to analysis by the Berlin-based energy and climate think-tank. All short-term options to intervene directly in wholesale gas prices would create difficult allocation decisions given the lack of price signals, said Epico. All options to lower prices also risked increasing gas demand, adding to the risk of shortages and undermining the price softening effects. Epico therefore recommended that the EU trigger an “emergency alert” so its voluntary goal to save 15% of gas this winter – around 45 bcm – became binding and to regularly review if more stringent cuts were needed. (Montel)

German shortfall – Germany is likely to fall short of its climate funding promise to less-developed countries as the country faces severe budget cuts, Bloomberg reports. The country provided €5.3 bln from its public budget for climate adaptation and renewable energies in other countries in 2021, according to data published by the Development Ministry on Thursday. That’s less than the annual €6 bln until 2025 that Germany pledged at the G7 summit last year. The target will be even harder to reach amid government efforts to restore its balanced-budget policy that was suspended in 2020 for the pandemic. The Development Ministry, which covers about 88% of Germany’s climate funding, has a current budget of about €12.4 bln that faces being trimmed as much as €2 bln a year by 2025, according to Jochen Flasbarth, the ministry’s deputy minister.  To reach Germany’s promise, “clear additional efforts are required in the budget years 2024 and 2025,” Flasbarth said.

German ambition – Germany can implement ambitious climate action and at the same time strive for long-term energy sovereignty as it attempts to find a way out of the current energy crisis, said researchers from Ariadne, a government-funded alliance of more than 25 research institutes. Energy saving is key to this, especially in the short term, they said. After Russia stopped deliveries to Germany, the researchers project that the country will have about 600 TWh of gas annually through imports from reliable suppliers and domestic production in the coming years. That means it will have to reduce consumption by 30% compared to pre-crisis years. In principle, the gas saving potentials in the relevant sectors are sufficient, but Germany needs a “clear trend reversal” in the energy and buildings sectors to ensure that the theoretical savings potential is actually used, the researchers said. Citing the climate targets, the researchers wrote that cutting gas consumption by 250 TWh alone would lead to CO2 reduction of 50 Mt per year compared to the 2017-21 average. Although part of the gas reduction goes hand in hand with a switch to coal or heating oil, the resulting additional emissions are capped by EU ETS. Of course, this would mean efforts to weaken the ETS should be stopped. “One of the key tasks of the coming weeks and months will be to safeguard the integrity of the ETS,” said Ottmar Edenhofer, director of the Potsdam Institute for Climate Impact Research (PIK). (Clean Energy Wire)

German waste – Separately, Germany is at risk of wasting billions of euros by building out LNG imports instead of moving toward sustainable alternatives like energy efficiency, according to a report by think-tank E3G. The country could be on the line for about €200 bln of additional costs for gas imports by the end of the decade, causing a doubling of bills for consumers, and should instead focus on more sustainable measures. (Bloomberg)

French follow? – France’s High Climate Council has urged Paris and the EU to follow in the footsteps of the Netherlands and Spain by withdrawing from the Energy Charter Treaty, arguing that the international trade pact is “incompatible” with the EU’s green objectives. The ECT is an international agreement signed in the 1990s to protect investments in energy infrastructure in former Soviet states. But in recent years it has been used by fossil fuel and renewable energy companies to sue governments for regulatory changes that threaten their returns on investments. The treaty is now being questioned for promoting fossil fuel interests, leaving EU member states torn between their legal obligations under the ECT and their commitment to decarbonise under the Paris Agreement on climate change. According to the French advisers, “only a withdrawal from the ECT … would make it possible to remove the treaty’s incompatibility with decarbonisation targets for 2030”, if not 2050. (Euractiv)

Sweden’s switch – Sweden’s new government condensed its environment ministry in a move that critics say sets the stage for policies that threaten the climate targets. The country’s legacy as a front-runner on climate matters is coming under question after Prime Minister Ulf Kristersson decided the new environment minister will work under the ministry for enterprise and energy.

Shale shift – When Baltic states switched off Russian power and halted other imports in response to Moscow’s invasion of Ukraine, Estonia restarted its shale oil power plants and set back its efforts to phase out heavily polluting fuels, Reuters reports. Estonian power plants in 2020 had a capacity of 3 GW, its regulator said, of which 2 GW was from plants that burn locally produced shale oil that emit similar amounts to coal and which are being phased out by 2035.

Bad press – UK biomass giant Drax has pulled out of two industry conferences following weeks of negative publicity, DeSmog reports. Drax, which generates around 6% of the UK’s electricity through burning wood pellets at its power station in Yorkshire, is hoping to secure an estimated £31.7 bln in government subsidies for a carbon capture project. The energy produced by the company is currently classified as renewable under UK and EU law, based on the disputed argument that emissions from burning the wood will be recaptured by trees planted in their place. But Drax’s green credentials have been eroded by a string of revelations, which link the firm to clear-cutting Canadian forests and document repeated breaches of pollution levels around US manufacturing plants.

Baker boost – US energy giant Baker Hughes has announced a substantial investment in UK climate-tech pioneer Levidian, valuing the British business at £130 mln. Baker Hughes delivers a £12 mln boost for Levidian and its ground-breaking technology to reduce GHG emissions. The Cambridge-based firm has developed the world-first LOOP device, which decarbonises methane to produce hydrogen and graphene. The investment, which values Levidian at approximately £130 mln, will create around 100 jobs and bolsters production of more LOOPs to convert methane into fuels of the future. “This unique technology is a symbol of British innovation and creativity, accelerating the move towards net zero and builds on Levidian’s work with National Grid and United Utilities.”

ASIA PACIFIC

New target — The Victorian state Labor government has vowed it will reach net zero emissions by 2045, instead of 2050, ahead of the upcoming local election, the ABC reports. The election promise also includes an interim emissions reduction target of 75-80% by 2035, with the state being powered by 95% renewable energy by the same date. The government said it planned to build 4.5 GW of publicly owned renewable energy generation, by spending A$20 mln ($12.5 mln) on reviving the State Electricity Commission (SEC). The SEC previously owned nearly all the state’s electricity infrastructure and generation, but was chopped up and sold throughout the 1990’s. Victorian Premier Daniel Andrews said he wanted to bring power back into the hands of the people, by creating a government-owned entity. The new renewable energy targets line up to when AGL Energy intends to close the Loy Yang A coal-fired power station in 2035.

More gas  A large gas field owned by China National Offshore Oil Corporation (CNOOC) has been approved by the Chinese authorities, with daily output of around 587,000 cubic metres of natural gas, according to a company statement released Wednesday. Based in Qiongdongnan Basin, the field has proven natural gas reserves of over 50 bln cubic metres and condensate oil reserves of 3 mln cubic metres, the Chinese state-owned oil giant said in the statement. The discovery of the field will lay a solid foundation for a gas production base with trillion cubic meters of resources in the South China Sea, CNOCC said.

AMERICAS

Pushing the Boundary – During the third quarter of 2022, SaskPower’s CCS facility at the Boundary Dam was available 94.5% of the time, capturing 219,750 tonnes of CO2, the Estevan Mercury reports. While online, the facility had a daily average capture rate of 2,500 tonnes, with a peak one-day capture of 2,742 tonnes, according to numbers released by the Crown corporation on Tuesday. “This strong performance resulted in an emissions intensity of 436 tonnes of carbon dioxide per megawatt hour (CO2/MWh), well within the federal carbon tax threshold of 549 tonnes CO2/MWh,” SaskPower said in a release. The second quarter of this year also marked the second straight three-month stretch in which at least 200,000 tonnes of CO2 were captured. SaskPower noted the CCS facility will be down for a two-week planned maintenance outage in mid-October. Since Unit 3 went online in October 2014, a little more than 4.8 Mt of CO2 have been blocked from entering the Earth’s atmosphere, which works out to about 600,000 tonnes per year. In the first nine months of this year, the CCS facility has captured 556,332 tonnes of CO2.

RGGI room – RGGI will host a webinar on compliance for CO2 budget sources providing an overview of the 2022 interim control process on Nov. 3 from 1100 to 1230 Eastern (1600 to 1730 GMT), a press release from the trading bloc said Thursday. The current control period is from Jan. 1, 2021 to Dec. 31, 2022 and the interim control period is from Jan. 1, 2022 to Dec. 31, 2022. Carbon budget sources have to hold 50% of its emissions in each interim control period. The webinar will feature a question and answer period.

VOLUNTARY

DAC expansion – Climeworks has completed the commercial operation phase of its first technology generation at a plant in Hinwil, Switzerland, as the company aims to scale its direct air capture and storage capacity. Partners in project included Audi, Coca-Cola, and the Swiss government. The plant when opened in 2017 was the very first commercial DAC facility, providing air-captured CO2 to customers for utilisation. Climeworks has since then announced the much larger Orca and Mammoth DAC plants, both in Iceland, as it aims to reach gigatonne capacity.

Cookstoves for calcio – Italian football giant Juventus has announced a partnership with Pact Capital to reduce its carbon impact by purchasing offsets. The first step of the agreement will see Juventus commit to an understanding of its carbon footprint by collecting data and information on its direct and indirect impacts in relation to its C02 emissions. Pact Capital will then look after the offsetting of these emissions through carbon credits. These will specifically be from projects to improve cooking practices in Nigeria and a renewable energy project in Turkey.

Partners’ partners – Climate Impact Partners has partnered with three technology specialists to provide cutting-edge analysis into the climate impact of forestry projects. Climate Impact Partners, specialists in carbon market solutions for climate action, is working with Geotree, Kayrros and Treemetics to improve the quality, frequency and efficiency of monitoring and reporting on forestry projects. Partnerships with three global leaders in climate data analytics will help Climate Impact Partners demonstrate the value and impact of projects, and achieve its goal of working with clients and project partners to reduce global emissions by 1 billion tonnes of CO2 by 2030.

AND FINALLY…

Money making from info faking – New research from the Dewey Square Group (DSG) reveals the extent to which advertising networks such as Google Ads and Yahoo Ads support and profit from websites that spread climate disinformation. In Oct. 2021, Google announced a new policy that prohibits climate disinformation content, but enforcement has proven lacking, DSG said. Its report shows that a year later, Google is still serving ads on climate disinformation sites and even remains a top vendor for them. Google has claimed in past documents they “have an important responsibility to our users and to the societies in which we operate to curb the efforts of those who aim to propagate false information on our platforms.” Yet the analysis conducted by DSG proves they are active participants in the spread of mis- and disinformation through their ad networks. DSG analysed the sources of advertisements on the top 113 websites that produce climate disinformation between Oct. 2021 and Sep. 2022 – sites that receive over 56 mln weekly visits. Fox News and Breitbart top the list, followed by the Daily Wire, Gateway Pundit, and Epoch Times. The study found that nearly 80% of these sites displayed advertising from one or more major ad networks, including Google and Amazon. Google was the largest ad network used by climate disinformation sites, with 49% of outgoing US ad traffic on websites that accounted for 97.7% of the total projected weekly visits to websites in the dataset. Google’s display ad networks were present on the greatest number of these top climate disinformation sites, and were monetising the largest share of ad clicks from them. “If advertisers bought ads on these climate disinformation sites at an industry median price cost-per-click, then Google would potentially have pulled in $7.67 million in display advertising revenue over the past year from these sites,” DSG said. Read the report here.

Got a tip?  How about some feedback?  Email us at news@carbon-pulse.com