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TOP STORY
COP27 PREVIEW – PART 1: The big ticket topics to follow in Sharm el-Sheikh
Loss and damage, climate finance, and the emissions mitigation gap are expected to be among the top issues faced by representatives from nearly 200 governments at UN climate talks starting this week, according to climate experts and other observers.
AMERICAS
Lula victory in Brazil election may not guarantee environmental policy success
Luiz Inacio Lula da Silva will attempt to restore Brazil’s role in addressing climate change after winning the country’s presidential election on Sunday, but a stronger presence of ousted President Jair Bolsonaro’s party in Congress from next year will complicate legislative efforts to do so.
RGGI Q3 emissions stay elevated through hot summer
RGGI-regulated entities increased year-on-year CO2 output in the third quarter of 2022 when adjusting for exemptions and unreported emissions from Maryland power generators under the cap-and-trade programme, according to data published Monday.
California LCFS credit bank leaps 14% in Q2 to post surplus record
The amount of credits generated in California’s Low Carbon Fuel Standard (LCFS) hit a fresh record in Q2, as substantial volumes of renewable diesel (RD) and electricity propelled the credit bank to the highest level since the inception of the programme over a decade ago, according to government data published Monday.
VOLUNTARY
Nigeria working on “billion dollar” voluntary carbon market as part of African initiative to launch at COP27 -govt
Nigeria is working on a “billion-dollar” voluntary carbon market project in Africa in collaboration with regional and international partners that is due to launch at the upcoming COP27 event in Egypt, the government said on Sunday.
Carbon finance firm secures offtake deal for UK soil carbon credits
A global carbon finance firm has inked a deal for the offtake of soil carbon certificates from a large farm owner in the UK, as landowners look for new revenue streams now that the country has left the EU.
VCM Report: Nature-based offsets mount slight recovery
Nature-based spot and nearby future offset prices bounced off lows last week, partly buoyed by news of Indonesia clarifying carbon trading rules and the upcoming UN climate talks, but the market in general remain depressed by the gloomy macro-economic outlook.
EMEA
EU extends state aid flexibility, demands ‘green strings’ are attached
The European Commission has extended the bloc’s state aid Temporary Crisis Framework to the end of next year, meaning member states can continue providing additional support to ETS-covered entities hit by the energy crisis and ongoing war in Ukraine.
Euro Markets: EUAs drop 1.5% into technical channel to consolidate last week’s gains
EUAs gave up some of last week’s 18% rally on Monday as the market appeared to be consolidating, with prices moving largely between two important technical levels while traders waited for directional signals.
Rescheduled Swiss aviation carbon auction sells out
A rescheduled auction for Swiss aviation carbon permits has successfully cleared, albeit at a price well below the implied secondary market.
ASIA PACIFIC
China should include SAF in ETS to decarbonise aviation sector -report
China should include sustainable aviation fuel (SAF) in the country’s carbon emissions trading scheme and set mandatory targets that bring aviation emissions down as part of its policy support to decarbonise the sector, a report has called for.
NZ Market: NZU price jumps, volumes up
The NZU price and traded volumes have risen in recent weeks off the back of higher trading interest, analysts told Carbon Pulse, as the market waits on the government to decide on ETS price settings.
BAVARDAGE
US-based green group hires veteran South African carbon markets negotiator
A US-headquartered green group has announced the hiring of a clean energy expert and veteran carbon markets negotiator from South Africa.
SPONSORED
Carbon markets driving price discovery -CME
Promoted content – Sponsored by CME Group – As organisations make carbon neutral pledges, more are turning to carbon pricing instruments to hedge positions. That includes a suite of futures contracts, writes Russell Blinch.
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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
ASIA PACIFIC
Come and join us – G7 countries have asked India to join a Just Energy Transition Partnership (JETP) that will help finance rapid deployment of clean energy projects in India and possibly reduce the country’s dependence on coal, Hindustan Times reports. India has not responded to the partnership offer as yet, officials aware of the matter said, adding that the external affairs ministry is now co-ordinating interministerial consultations on the matter. If India accepts, the JETP will likely be announced at the upcoming UN Climate Conference (COP27) in Sharm El Sheikh, Egypt in November. The contentious issue is whether India should concede to any clauses on reducing coal consumption as part of the partnership, the officials added, asking not to be named. “Yes, the G7 has approached us. We (India) have not rejected the partnership. MEA is anchoring consultations. It depends on government’s stand on these matters,” said one of them, a senior official in environment ministry.
Hydrogen hub – Karnataka will emerge as the lead state in manufacturing green hydrogen in India, the New Indian Express reports. “The state government is planning to set up India’s first green hydrogen cluster in Mangaluru,” additional chief secretary, commerce & industry, EV Ramana Reddy, told the New Indian Express. “Seven companies ACME Solar, ABC Cleantech, ReNew Power, Avaada, JSW Green Hydrogen, Petronas Hydrogen, and O2 Power have evinced interest to invest in Karnataka for green hydrogen manufacturing. Four of them have been cleared for investment by the state high-level committee and three are at the MoU stage,” Reddy said.
Net zero bank – United Overseas Bank (UOB) has announced sectoral plans to reach net zero by 2050, The Edge Singapore reports. UOB’s commitments cover six sectors, which make up about 60% of its corporate lending portfolio, announced the bank on Oct. 31. These six sectors are power, automotive, oil and gas, real estate, construction, and steel. UOB commits to no new project financing for upstream oil and gas projects approved for development after 2022. By 2050, UOB will reduce emissions intensity for the remaining five sectors by between 85% and 100%, against a 2021 baseline. UOB’s commitments include interim 2030 targets. By the end of this decade, UOB says it will reduce emissions intensity by between 20% and 61% for the five sectors.
Capturing CO2 – JGC Holdings has announced that domestic EPC operating company, JGC Japan Corporation, has started technical development on CO2 capture, applying unused cold energy from LNG, according to a JGC press release. These efforts support development and demonstration in a joint project of Toho Gas, Nagoya University, and the Tokai National Higher Education and Research System, that was selected by Japan’s New Energy and Industrial Technology Development Organization (NEDO) in May 2022 as a Green Innovation Fund project for development of technology for CO2 separation and capture. JGC Japan has been contracted by Toho Gas as a participant since September this year. This development and demonstration is focused on Cryo-Capture technology, which applies unused LNG cold energy in CO2 capture from factory exhaust gas. The R&D builds on the work of Nagoya University’s Institute of Innovation for Future Society, whose innovative technique for applying unused LNG cold energy to capture CO2 from factory exhaust gas requires only a small amount of additional energy, which promises to reduce CO2 capture costs.
Cloudy outlook – China’s full-year power consumption is expected to increase by 4%-5% annually this year amid slow economic recovery, according to a report published by the China Electricity Council (CEC). On the supply side, the country is likely to experience a tight power supply this quarter partly because local coal companies have been squeezed by surging coal costs, the power industry association said. More than half of the coal business units controlled by China’s major power groups have been suffering from financial losses, given that the purchase cost of coal increased by 260 bln yuan ($35.6 bln) year-on-year during the first three quarters of this year, according to the report.
AMERICAS
Red Sea sojourn – US President Joe Biden will attend COP27 on Nov. 11, the White House said Friday. Having the leader of the world’s largest historical CO2 emitter – and second-largest current source behind China – show up could boost the difficult talks. The summit will feature tough negotiations over rich industrial powers compensating developing countries for climate harms they have played little role in causing, and US officials say they support the “loss and damage” concept but are wary of committing to specific funding mechanisms. Additionally, Biden’s ability to follow through on new aid pledges will be constrained if, as appears likely, the midterms bring GOP control of one or both chambers of Congress. (Axios)
Windfall tax (Swing of the Axe) – Meanwhile, Biden escalated weeks of sharp warnings to energy producers on Monday by floating a so-called “windfall” tax on their corporate profits, calling out major gas companies for racking up gains from a spike in prices he attributes to Russia’s war in Ukraine. Biden’s speech came as Americans face continued high prices at the gas pump in the final stretch of the midterm campaign season. Biden spoke just days after several global energy giants posted a round of massive corporate profits and after several months of Biden targeting oil executives in a push to drive private sector actions to increase production and capacity, and, in turn, drive down high prices at the pump. (CNN)
EMEA
Just stop oil – Several German NGOs have called on the government to rule out public support for fossil fuel extraction projects in other countries and thus make good on its pledge signed at last year’s UN climate change conference COP26, Clean Energy Wire reports. Insufficient implementation of the agreement to phase out foreign fossil fuel financing by the end of 2022 would damage Germany’s credibility at the forthcoming COP27 and put a heavy burden on the negotiations, Germanwatch, Greenpeace, E3G, and others said in an open letter to the chancellor and several ministers. According to the NGOs, the government is currently working on new funding criteria and could decide these soon. They said they are deeply concerned about the signals they received from the chancellery and economy ministry that upstream (extraction) and midstream (transport infrastructure) projects could be supported.
Beaucoup d’arbres – France will plant 1 billion trees – or 10% of the country’s forest area – by 2030 to capture carbon and preserve biodiversity, President Emmanuel Macron told firefighters in a speech on Friday. In France, blazes destroyed 72,000 hectares of forest this summer, or six times more than the average of the last 10 years. In his speech, Macron thanked the many hundred firefighters, foresters, elected representatives and security actors who had their part in fighting the fires that destroyed the thousands of hectares of forest this summer. In his speech Macron also announced his new forest strategy for 2030, which aims to reinforce departmental and airborne resources. Among the announced measures, Macron said the departmental fire and rescue services will receive a yearly budget of €150 mln. France will also grow its amphibious aircraft fleet as Macron announced an “unprecedented” €250 mln will be spent have a total of 16 Canadairs by 2027, up from the current 12. (Euractiv)
Chilly outlook – The chances of the UK facing a colder winter than normal are increasing, risking higher demand for heating as the energy crisis tightens supplies. According to Met Office forecasts, the chances of a cold winter are now slightly higher than usual. “The likelihood of a colder three-month period overall is slightly greater than normal,” the Met said in its outlook. Even so, the most likely scenario remains an average winter, according to the outlook. But a colder turn could push up heating demand from households and consumers. The UK’s grid operator has already warned of the risk of blackouts if gas shortages reduce availability of the fuel for power generation. (Bloomberg)
Rishi or won’t he? – The Financial Times reports that the UK’s new PM Rishi Sunak might attend COP27 after all, following a large fallout from his announcement last week that he will not be going to the summit along with leaders such as Emmanuel Macron and Joe Biden, whose attendance was confirmed on Friday. Sunak’s “change of heart” could also be linked to news that former PM Boris Johnson was planning on going. British media is also reporting that Sunak has decided to uphold his predecessor Liz Truss’ decision to not allow King Charles to attend the summit.
VOLUNTARY
Shift happens – Decarbonisation solutions company ShiftCarbon on Monday announced its has completed approvals for offset standards Verra and Gold Standard to offer what it says are the highest quality carbon credits to its existing and new customers. ShiftCarbon provides a platform for carbon accounting, offsetting, and MRV automation of credits using a modular software and Internet of Things (IoT) sensor technology. For enterprises, ShiftCarbon offsets a measure and offset platform to embed CO2 neutrality into businesses easily and efficiently.
SCIENCE & TECH
CC-too-slow – Carbon capture, utilisation, and storage (CCUS) technologies are being adopted too slowly to achieve even the IPCC’s 2C upper limit for global warming, according to a new McKinsey study. The research, Scaling the CCUS industry to achieve net-zero emissions, released today, finds that CCUS has the potential to decarbonise 45% of remaining emissions from carbon-intensive industries ranging from cement to steel production. But CCUS adoption needs to grow 120 times by 2050 for the world to meet its existing net zero commitments, at a cost of $130 bln per year – more than governments are willing or able to afford alone. Scaling CCUS at the pace required will call for coordinated action by governments, investors, and industry players. New revenue streams may need to be developed, including new uses for CO2 as an industrial feedstock, and targeting consumer segments willing to pay for premium-priced green products. The industry may need to reduce the cost of CCUS through small-scale pilots, while collaborating to form cross-sector clusters to share large infrastructure like pipeline networks. Meanwhile, governments may need to define the role of CCUS in their industrial strategies and create the regulatory, tax and reporting frameworks that will allow the industry to scale, while still using subsidies for early projects to stimulate future growth.
AND FINALLY…
Shun el-Shiekh – Swedish climate activist Greta Thunberg has said she will skip next week’s COP27 talks in Egypt, criticising the global summit as a forum for “greenwashing”. “I’m not going to COP27 for many reasons, but the space for civil society this year is extremely limited,” she said during a Q&A at the launch of her latest book at London’s Southbank Centre. The 19-year-old activist had previously tweeted to express solidarity with “prisoners of conscience” being held in Egypt. COP27 opens in the Red Sea resort town of Sharm el-Sheikh on Nov. 6. Thunberg was among those who last week signed a petition by a human rights coalition calling on Egyptian authorities to open up civic space and release political prisoners. (Guardian)
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