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TOP STORY
Indonesia adopts carbon trading regulations
Indonesia has finalised and adopted regulations guiding domestic and international carbon trade, results-based payments, and carbon fees, providing some clarity for global emissions traders that have had voluntary offset issuances disrupted in recent months as the rules were under development.
ASIA PACIFIC
INTERVIEW: PNG REDD+ moratorium should stay until credible framework in place, governor says
An outspoken Papua New Guinean governor has argued that the moratorium on REDD+ projects for the voluntary market in the country should remain in place until regulations are properly implemented, noting there is still confusion over who is governing carbon credit projects in the country.
Chubb outlines ‘very clear’ themes emerging in ACCU review, but conclusions yet to be drawn
The former chief scientist tasked with chairing the independent review into Australia’s carbon credit market, Professor Ian Chubb, has outlined what he sees as the main themes coming out of the raft of submissions and research his team is pouring over, but told a conference Wednesday it was too soon to say what the specific outcome of the review will be.
Australian industry body welcomes Labor’s first climate budget, but urges policy clarity to guide investment
Australia’s Carbon Market Institute (CMI) has broadly welcomed the climate-related elements of the federal Labor government’s first budget that was delivered on Tuesday, but has also stated that uncertainty for carbon market players will remain until key policy decisions are made by Canberra to facilitate greater action on climate change.
Emissions from Chinese-financed overseas power plants could consume 1.7% of global carbon budget -report
Estimated emissions for operating Chinese-financed overseas power plants could cumulatively consume 1.7% of the global carbon budget that gives a 50-50 chance of limiting global warming to 1.5C, a policy brief has found.
Japan needs to lift carbon price to at least $30/t to accelerate clean transition in power sector -report
A carbon price of at least $30 per tonne of CO2 would enable Japan to bring forward a phase-out of fossil-fuel fired power generation and accelerate the transition to renewables in the electricity sector, a report released on Wednesday has found.
INTERNATIONAL
National pledges nowhere near 1.5C warming limit, world on course for 2.5C -UN report
Nationally determined contributions (NDCs) will reduce global emissions relative to previous strategies though not by enough to limit warming to Paris-agreed temperature goals, according to a UN report published Wednesday that outlined the potential for international cooperation such as via carbon markets to get nations closer on track.
No global sector on track to meet Paris Agreement’s 1.5C warming target -report
Not a single global sector is on course to decarbonise in time to meet the Paris Agreement’s preferred warming target of 1.5C, with many far from close to the required pathway and some heading in the wrong direction entirely, according to a report published Wednesday.
INTERVIEW: Demand, not supply, the problem with unlocking and scaling removals
The real obstacle to overcome for scaling technology-based removals in the voluntary carbon market is the lack of a demand signal rather than the scarcity of supply, according to a senior member of a large project developer speaking to Carbon Pulse.
EMEA
Euro Markets: EUAs’ four-day rally hits seven-week high before afternoon sell-off
EUAs rose strongly to reach a new seven-week high on Wednesday before giving up the day’s gains as the market appeared to pause after bring driven as much as 18% higher in just four days.
First Saudi carbon auction distributes 1.4 Mt across 15 firms as Aramco announces $1.5 bln fund
The first carbon credit auction hosted by Saudi Arabia’s sovereign investment fund has dished out 1.4 million units across 15 regional and domestic firms including Aramco, with the state oil company also announcing a $1.5 billion fund to help it reach net zero emissions by 2050.
Iberdrola Q3 results continue to underscore Iberian hydro woes
Spanish utility Iberdrola announced a continued increase in ETS-covered gas generation in its Q3 results on Wednesday as hydro output remained well below both 2021 and 2020 levels, reflective of a wider trend across the region that has prompted a surge in fossil output.
EU nations spent 76% of ETS auction revenues on climate, energy in 2021 -report
EU member states reported that they used 76% of their 2021 ETS auction revenues for climate and energy purposes, the European Commission said in a report published on Wednesday detailing the bloc’s progress on climate policy over the past year.
UK govt trims free ETS allowance allocations by a further 140,000 tonnes
The UK government has again tweaked free carbon allowance allocations for heavy industry over the first five years of the country’s ETS, holding back a further 140,000 permits from emitters.
AMERICAS
California’s ARB has authority to operate cap-and-trade programme beyond 2030 -law firm
California regulator ARB has the existing statutory authority to continue its WCI-linked carbon market past 2030, while a simple majority vote from the state’s progressive legislature could stave off legal challenges to the agency’s extension of the programme, a law firm has argued.
California accelerates CCO issuance ahead of true-up deadline, but still lags 2021
California regulator ARB boosted its compliance offset distribution this reporting period before the Nov. 1 interim cap-and-trade compliance deadline, according to government data published Wednesday, though the year-to-date issuance still lags levels reached in 2021.
VOLUNTARY
Project to harmonise global carbon credit registry data to launch in December
A joint initiative to provide an open source metadata system to share information about carbon credits and projects across digital platforms and ease integration of multiple registry systems will go live before the end of the year, it was announced on Wednesday.
Canadian bank commits to purchase CO2 removal credits from mineralisation company
A Canada-based financial services company on Wednesday announced it will purchase carbon removal credits from a Nova Scotia-headquartered firm specialising in decarbonising concrete.
British Airways partners with climate tech firm to launch new flight emissions management platform
British Airways has partnered with a climate tech firm to create a new platform for passengers to manage and offset their flight emissions.
Carbon credit ratings platform hires senior executive from Fitch
A carbon credit ratings platform has hired a senior executive from data and research firm Fitch to steer and expand commercial opportunities.
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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
Greenhouse records – GHG concentrations climbed at above-average rates to new records last year, the World Meteorological Organisation said on Wednesday, warning that time is running out for people to make the transformational changes needed to cap global temperature rises. The UN weather agency’s annual report showed that hikes in the atmospheric concentration of all three GHGs – CO2, methane and nitrous oxide – outstripped the average increase over the past decade, it showed, meaning they are now all at new record levels. Concentrations of CO2 rose by 2.5 parts per million to 415.7 – a level not seen since at least 3 mln years ago when the Earth was much warmer. The jump in the potent, heat-trapping gas methane was the highest since records began in 1983. (Reuters)
EMEA
Removing doubt – The European Commission is due to release a formal carbon removals policy proposal, the so-called Certification of Carbon Removals (CRC-M), at the end of November, according to Christian Holzleitner of the Commission’s climate department, speaking at an event hosted by removals-focused think-tank Carbon Gap in Brussels on Wednesday. This confirms the release of a proposal long expected by year-end, after the EU’s executive has consulted on how best to organise such legislation following a communication released late last year. Holzleitner said the proposal will aim to define criteria for carbon removal and set a baseline in order to attribute responsibility and prevent greenwashing. Read Carbon Pulse’s feature on how the current lack of global carbon removals policy threatens climate goals.
Extending support – The European Commission is further consulting member states on an extension and adjustment of the state aid Temporary Crisis Framework designed to support the economy in the context of Russia’s war against Ukraine. The extra exercise focuses on possible amendments relating to support given to energy companies to cover the financial collaterals for their trading activities amid sky-high prices and support to energy-intensive firms impacted by these costs. The Commission intends to adopt the revised Temporary Crisis Framework by the end of October.
Frack’s sake – The UK’s nationwide moratorium on shale gas fracking will be reinstated Rishi Sunak said during his first prime minister’s questions in the nation’s parliament. He told MPs that he “stands by” the Conservative party’s 2019 manifesto commitment that banned fracking. The overarching ban was lifted by predecessor Liz Truss during her brief leadership. The party’s 2019 manifesto stated: “We placed a moratorium on fracking in England with immediate effect. Having listened to local communities, we have ruled out changes to the planning system. We will not support fracking unless the science shows categorically that it can be done safely.” One senior government insider confirmed to the FT that Truss’s decision on allowing fracking would be reversed.
More please – Germany is preparing for a worst-case scenario in which it needs to double financial aid to Uniper, the nation’s biggest gas supplier, to €60 bln. Uniper’s financial situation is worsening with an expected adjusted net loss of €3.2 bln for the first nine months of the year as it buys more expensive wholesale gas to meet supply contracts after Moscow cut flows. Prices would have to stay high for two years for the shortfall to hit the government’s maximum projection, sources told Bloomberg. The staggering figure assumes gas prices remain at highs seen during the summer months. Uniper urgently needs money to fund replacements for its supply contracts with hundreds of local German utilities. As things stand, Uniper will receive around €31 bln from the state from a €200 bln aid package. The bailout will result in the full nationalisation of the utility by the end of the year. If the law is confirmed by the German Senate on Friday, the funds could be transferred as soon as next week, sources said. A spokesperson for the Economy Ministry declined to confirm the figure. Uniper declined to comment. Bloomberg Intelligence analyst Patricio Alvarez said €60 billion would only be conceivable in case of extremely high gas prices of about €200 for at least two years.
BASF bash – BASF has said it will have to downsize “permanently” in Europe, with high energy costs making the region increasingly uncompetitive. The statement from the world’s largest chemicals group by revenue came after it opened the first part of its new €10 bln plastics engineering facility in China a month ago, which it said would support growing demand in the country. “The European chemical market has been growing only weakly for about a decade [and] the significant increase in natural gas and power prices over the course of this year is putting pressure on chemical value chains,” chief executive Martin Brudermuller said. BASF, which produces products from basic petrochemicals to fertilisers and glues, spent €2.2 bln more on natural gas at its European sites in the first nine months of 2022, compared with the same period last year. Brudermuller said the European gas crisis, coupled with stricter industry regulations in the EU, was forcing the company to cut costs in the region “as quickly as possible and also permanently”. The company announced two weeks ago that it would reduce costs by €1 bln over the next two years, targeting mainly “non-production areas” such as IT, communications as well as research and development. (FT)
The row over Turow – In a complaint filed to the European Commission, Czech and German NGOs criticised the agreement between Czechia and Poland, which allows Poland to use the Turow coal mine despite its negative impact on the Czech environment. Greenpeace, Bund Sachsen and the association Uhelna filed the complaint, which notes that the bilateral agreement does not resolve the negative impact caused by the mining as promised during the negotiations. “The Czech Constitutional Court refused to deal with the agreement because, according to it, it does not fall within its jurisdiction. The local people and environmental organisations are turning to the European Commission, which is the only one that can still make a difference,” Petra Kalenska from Frank Bold, the law firm that drafted the complaint, has said. She added that by signing the agreement, Czechia has agreed to illegal mining. PGE, the Polish company that owns Turow, was mining from February to September 2022 without having an environmental impact assessment, which is in total contravention of European law, the lawyer added. The group said it wants to continue mining till 2044 and plans to expand the mine further. After Poland was ordered by the EU Court to pay up a daily €500,000 fine for not complying with its interim measures to close the mine, the Czech government signed a deal with Poland to address the impact of mining activities, and Czechia withdrew the suit. Following the deal’s signing by the Czech and Polish prime ministers on Feb. 3, Poland paid Czechia €45 mln in compensation for the damage caused. (Euractiv)
ASIA PACIFIC
Three agreements – The Singaporean government has signed a raft of agreements on the sidelines of Singapore International Energy Week (SIEW), the country’s ministry of trade and industry stated in separate announcements. The first, with the Malaysian state of Sarawak, will involve co-operation on mutual interests in carbon capture and storage (CCS) and carbon credits. A joint workgroup will be set up for policy exchanges and to identify potential projects for implementation, according to the ministry. “Singapore and Sarawak enjoy longstanding relations. The workgroup reaffirms our commitment to collaborate with like-minded partners in areas of mutual interest such as carbon capture and storage and carbon credits. International cooperation is critical to promote regional and global climate action to achieve the Paris Agreement goals,” Singapore’s trade minister, Tan Lee Seng, stated. In addition, Singapore’s ministry of trade and industry signed an agreement with Cambodia on cross-border electricity trade, the development and financing of renewable energy in Cambodia, and the development of regional power grids. Another agreement was signed with Japan on closer cooperation over strengthening the LNG supply chain, discussions on the use of LNG as a transition fuel, and knowledge sharing on the measurement, reporting, and verification of greenhouse gas emissions.
Shell signs with JV – Shell Eastern Petroleum has signed a Memorandum of Understanding (MoU) with Brunei Shell Petroleum (BSP), a 50:50 joint venture between Shell and the Brunei government, to explore the feasibility of carbon transport and storage options for Brunei Darussalam and Singapore, Reuters reports. This could potentially form part of a carbon capture and storage (CCS) hub in Southeast Asia, according to Shell. As per the agreement, the companies will evaluate the technical and commercial feasibility of carbon storage options in Brunei Darussalam and carbon transport solutions from Singapore.
Aim higher – Taiwan’s environmental regulator is likely to set a more ambitious emissions reduction target for 2030 by year-end after a thorough re-examination, Economic Daily News reported. The government, previously setting the target at 20%, has allocated nearly NT$900 bln ($28 bln) to work on climate initiatives over the coming eight years, with an ultimate goal of reaching net zero by 2050, according to the report. The island nation’s greenhouse gas emissions totalled 285.13 mln metric tonnes of CO2e in 2020, representing a 1.88% decrease from the 2005 level, slightly falling short of the 2% target.
New unit – Sichuan Energy Investment Development, a state-owned group that mainly runs electricity business in Southwest China’s Sichuan province, has recently established its carbon asset management arm, People’s Daily reported. The subsidiary, which manages around 6 mln tonnes of carbon assets, has formed strategic partnerships with a few Sichuan-based companies, the report said. It also plans to explore the potential of nature-based sink projects in other Chinese regions, including a mangrove pilot in Guangxi province.
AMERICAS
Prairie offsets – The Saskatchewan government intends to move ahead with its own carbon offset credits program. In the speech from the throne read today by Lt. Gov. Russ Mirasty, the government said there “are better ways to address climate change than the punitive taxes and ineffective regulations imposed by the federal government.” It said the programme will generate voluntary carbon offset credits to producers and companies that have commodities with lower GHG emissions than global averages. The credits will be used to reduce their own carbon footprint or traded to other companies and producers. Premier Scott Moe said agricultural lands are fixing enough carbon each year that they could make the province net negative when it comes to emissions. He said the province leads in making agriculture more sustainable. In 2020, nearly 13 Mt of carbon were sequestered in agricultural soil. A zero-till adoption rate of over 95% puts Saskatchewan ahead of other provinces in that regard, Western Producer reports.
Ventos venture – French oil and gas major TotalEnergies announced on Wednesday the creation of a new joint venture with Brazilian company Casa dos Ventos to set up a new renewable energy portfolio in Brazil. TotalEnergies will hold 34% of the new venture while Casa dos Ventos will hold 66%. TotalEnergies said that it would pay $550 mln in cash and a potential extra $30 mln to complete the acquisition, and would have the option to buy an extra 15% stake in the Brazil venture after 5 years. (Reuters)
VOLUNTARY
Rocking the targets – XTX Markets has bought 8,374 carbon removal credits over the past year including the largest single purchase ever on the Puro.earth marketplace, the algorithmic trading firm said. That put the firm in the top 10 companies globally for carbon purchases, according to the cdr.fyi tracking platform. It has also invested over £400,000 into early-stage companies working towards net zero, through the Carbon13 accelerator, partnering with tech sector-focused intermediary Supercritical and enhanced rock weathering removals developer Undo.
Neutral venture – Carbon crypto venture Solid World DAO has partnered with Neutral Protocol, a derivatives platform for ReFi assets, to allow users to trade carbon futures, options, and execute strategies. Neutral’s platform will enable market participants to lock in prices for carbon credit transactions or forward contracts, hedge their carbon or forward holdings, and express market sentiment while enabling a new layer of trading strategy.
RBC reductions – Royal Bank of Canada (RBC) has set interim targets to cut carbon emissions from the most heavily polluting sectors it finances by 2030, though executives said the bank may need to direct more money to some industries in the near term to drive their decarbonisation efforts, The Globe and Mail reports. The targets announced by Canada’s biggest bank on Wednesday aim to cut the intensity of emissions – reductions per unit of economic output, rather than absolute cuts – from the oil and gas, power generation, and automotive sectors by anywhere from 11% to 54% in the next seven years. RBC is the last of the Big Five Canadian banks to outline its 2030 targets, after its rivals set similar goals early this year.
SCIENCE & TECH
Adding adaptation – Bill Gates’s climate-oriented venture capital fund is expanding its mission, adding adaptation to its investment categories and establishing a later-stage fund to help clean-tech startups begin building plants and scaling up their technologies, MIT Technology Review reports. The firm will focus on several areas, including ways to help farmers and communities grapple with increasingly common or severe droughts; such approaches could include advanced desalination technology or systems that pull moisture out of the air. Another will include helping crops remain productive as the world becomes hotter, wetter, or drier, potentially through indoor farming and genetically alteration.
AND FINALLY…
The cost of continuing to do business – New analysis provides eye-popping estimates of costs to achieve net zero global emissions by 2050 while concluding it’s quite feasible. The topline from BNY Mellon Investment Management and Fathom Consulting’s report is that a cool $100 trillion of capital investment is needed. But that’s less than one-fifth of total anticipated global investment over the next 30 years, or 3% of cumulative GDP, it finds, adding that “[M]ost of it will either grow the world’s capital stock, supporting future economic growth, or replace existing ‘dirty’ capital with clean infrastructure when that capital reaches the end of its useful economic life.” It sees around $20 trillion in “stranded” capital, a term that generally refers to sunk investments in infrastructure that’s incompatible with climate goals. These assets may need to be “abandoned early or retrofitted.” (Axios)
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