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TOP STORY
COP27 PREVIEW – PART 2: What the Sharm el-Sheikh talks will mean for carbon markets
UN climate talks opening in Egypt this week are unlikely to have the same emphasis on carbon markets as last year’s Glasgow summit, but experts expect development on crucial details underlying Article 6 of the Paris Agreement and how it impacts the voluntary carbon market (VCM) and global climate policy.
ASIA PACIFIC
China to hammer out emissions-related standards by 2025
Chinese regulators have jointly released an implementation plan to establish a wide range of emissions-related standards to realise carbon neutrality.
Australia Market Update: Landfill gas dominates massive ACCU issuance, regulator urges transparency report opt-in
Australian Carbon Credit Unit (ACCU) issuance soared to nearly 750,000 units in its latest update – over half of them to landfill gas projects – while the Clean Energy Regulator (CER) urged companies to opt in to next year’s Corporate Emissions Reduction Transparency (CERT) report.
NZ liquid fossil fuel emissions rise in 2021-22, EPA data shows
Emissions from New Zealand’s liquid fossil fuel sector climbed in 2021-22 while several other sectors reported a drop in carbon output, according to regulatory reporting, as GHG emissions have not yet returned to pre-pandemic levels.
Indonesian bourse partners with digital exchange to develop carbon trading infrastructure
The Indonesian Stock Exchange (IDX) has partnered with a Singapore-based digital exchange to develop the country’s carbon trading system.
Major Australian bank hires new head of carbon business
A major Australian bank has announced a raft of senior hirings for its commodity, trade, and carbon team, including a new head of carbon business joining from Pollination Group.
VOLUNTARY
Xpansiv to launch new standardised carbon credit contract for cookstoves
Xpansiv is launching a standardised spot contract for cookstoves offsets next month that hopes to overcome general criticisms of poor quality projects in the voluntary carbon market (VCM) with the requirement of achieving at least five sustainable development goals (SGDs).
At least 29 mln REDD credits eligible for backdating with CCB
At least 29 mln forestry conservation (REDD) credits from 12 projects accredited by Verra over the last eight months could be retroactively backdated with the co-benefit Climate, Community and Biodiversity (CCB) standard, boosting their value, analysts have suggested.
Forest groups, carbon exchange partner to urge acceptance of HFLD carbon credits
Several forest-related green groups and organisations have teamed up with a carbon trading exchange to urge investors to support credits from projects in regions with high forest coverage and low deforestation (HFLD) levels.
Tech firm to introduce KYC requirements to tokenise carbon credits
A tech firm specialising in allowing users to tokenise carbon credits will introduce know-your-customer (KYC) requirements on some of its services in an effort to meet expected demands from major offset standards.
Tech start-up launches platform to help firms track and reduce indirect emissions
A carbon accounting start-up has launched a platform aiming to help enterprises account for and cut Scope 3 emissions, which often represent more than three-quarters of corporate carbon footprints.
AMERICAS
US forest carbon initiative announces programme freeze to address demand imbalance
A US-headquartered nature-based project developer is freezing carbon programme enrollment for six months in an attempt to rebalance carbon credit supply with deficient market demand.
Massachusetts CO2 output jumps 18% in Q3, putting state’s GWSA market on course to exceed budget
The Massachusetts Global Warming Solutions Act (GWSA) cap-and-trade system registered its highest emissions total for a third quarter in four years, making it all but certain that CO2 output will exceed the adjusted 2022 allowance budget for the power sector programme, according to data updated this week.
INTERNATIONAL
G20 finance for fossil fuels slumped in 2019-21 but still nearly double than for clean energy -report
G20 countries and multilateral development banks (MDBs) provided at least $55 billion per year in international public finance for oil, gas, and coal projects between 2019-21, nearly twice as much as was provided by from those sources for clean energy over the same period, a report from non-profit climate groups revealed on Tuesday.
Oil and gas companies improving in methane measurement, reporting, but need to step up efforts -report
Oil and gas companies are showing improvement in their measurement and reporting of methane, but efforts by the industry need to accelerate so that emissions of the potent greenhouse gas can be reduced quickly enough to align with a 1.5C pathway by 2030, a report released this week said.
US, UAE strike deal to spur $100 bln of clean energy investments
The US and UAE have signed a partnership to catalyse $100 billion of investment in clean energy projects and add 100 GW of clean energy globally by 2035, state news agency WAM reported on Tuesday.
EMEA
NGOs seek end to EU’s ‘dash for gas’ in Africa as Egypt welcomes climate summit
The EU must stop its dash for new gas supplies in Africa and instead focus on providing a just transition to clean energy for all citizens worldwide, more than 100 climate groups and individuals urged in a letter to EU leaders on Wednesday.
Euro Markets: EUAs drop most in 3 weeks amid waning sentiment and options activity
EUA prices fell for a second session on Tuesday, losing the most in three weeks and further trimming last week’s 18% gain after a weak auction dampened sentiment, and options trading led to a sharp sell-off in futures in the middle of the day.
Changes to UK cost containment mechanism mean no extra UKA supply until at least May
There will be no intervention to inject additional UK allowances into the British carbon market until at least May 2023 after the latest step-change to the formula used to calculate the trigger price for the market’s cost containment mechanism.
Veteran carbon trader joins London-based investment firm
A veteran European carbon trader has joined a London-based investment firm to establish a trading desk for carbon and power.
ICYM
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.
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
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INTERNATIONAL
Kerry touts offsets – US climate envoy John Kerry is hoping to unlock private sector investments to phase out coal in emerging economies, under deals known as Just Energy Transition Partnerships (JETPs), by using carbon credits to lure private investments. He has floated the idea with a number of large companies and could make an announcement at the COP27 climate summit, Climate Home reported, citing anonymous sources. Other partner countries are not keen on the idea, but have not ruled it out, with one source said Germany is particularly sceptical. Kerry told an event at Chatham House last week: “One of the things we are looking at is the possibility of the private sector in effect being enticed to the table because you then have a way of them getting something they need and want, which may be a credit towards their goal … “And you get cash which goes directly into closing down some coal plants and deploying renewables, which is direct emissions reductions.”
Sink focus – Government and corporate climate pledges focus too much on land-based carbon sinks such as tree planting rather than food production and biodiversity, researchers said in The Land Gap report published Tuesday, which estimated that around 1.2 billion hectares of land would have to earmarked for carbon removal to fulfil countries’ climate pledges – an area larger than the US or almost four times the size of India. The study judged that around 551 million hectares would be a reasonable target. (Reuters)
More land needed – Climate pledges made by countries worldwide are “dangerously over-reliant” on tree planting and land restoration that would require an area greater than the size of the US and risked sparking conflict, a study has concluded. The assessment of the national climate plans submitted by nearly 200 nations to the UN found they would require a total of 1.2 bln hectares of land for nature-based carbon removal activities, such as tree planting. The strategy was not only slow to implement but could create conflict by displacing farmland and putting climate and food security objectives at odds, said the report, compiled by more than 20 researchers led by the University of Melbourne’s Climate Futures initiative. Countries were turning to land-based solutions instead of doing “the hard work of steeply reducing emissions from fossil fuels, decarbonising food systems and stopping the destruction of forests and other ecosystems,” the authors said. Global land area, excluding ice and barren rock, is estimated at 13 bln hectares. The report concluded that 166 countries plus the EU bloc had stated intentions to plant trees on 633 mln hectares, including single-species plantations, which would drive up competition for the space with industries such as agriculture. Many nations had issued targets for their own land, but in some cases the commitments were vague. Another 551 mln hectares of degraded land would be restored, a practice that “holds more promise for climate and biodiversity and poses fewer threats to other dimensions of sustainability”, researchers said. (FT)
Gravy train keeps rollin’ – The 19 individual country members of the G20 provided $693 bln in fossil fuel support in 2021, thereby slowing down progress on reaching the goals of the Paris Agreement, according to a new report released by Bloomberg Philanthropies and BloombergNEF (BNEF). This quite substantial sum distorted prices, encouraged potentially wasteful use and production of fossil fuels, and resulted in investment in long-lived, emission-intensive equipment and infrastructure, the authors said. The Climate Policy Factbook evaluates the progress made by each G20 nation in three concrete policy areas: 1) phasing out support for fossil fuels, 2) putting a price on emissions, and 3) enforcing climate-risk disclosure. The report aims to increase transparency and inform policy priorities ahead of the G20 Summit in Indonesia and COP27 climate conference in Egypt, where much of the discussion will focus on how to realise the many pledges and targets announced at COP26 in Glasgow a year ago. The share of G20 fossil fuel support allocated to coal is slowly shrinking – from 4.1% in 2016, to 2.9% in 2021. But coal still attracted a total of $20 bln of government support in 2021. This is surprising given that much of the effort to phase out fossil fuel support has focused on coal, including pledges announced at recent G20 summits and COP26. While 2021 estimates are provisional, they suggest fossil support spending surged 16%. This spike was not simply due to economic recovery and higher energy use as 2021’s total was 5% higher than 2016, a year in which energy use was approximately level. In fact, the 2021 increase was driven by a 16% increase in support to fossil fuel producers and utilities.
AMERICAS
Fossil future – US Republicans are preparing to advance an ambitious energy agenda if they win control of the House of Representatives in next week’s elections — including faster approvals of fossil fuel projects and probes of how President Joe Biden’s administration is spending its hundreds of billions in climate dollars. The plan, described by a dozen current and former House lawmakers, aides and outside allies, seeks to build on the political momentum that the GOP claimed on energy policy this year, as jumps in fuel and electricity prices battered Biden’s popularity and complicated his climate agenda. The GOP effort would include components of a strategy that top House Republican Kevin McCarthy released in June that called for measures to stimulate oil and gas production, ease permitting regulations, and seek to reduce reliance on China and Russia for critical materials. It also would propose actions that lawmakers of both parties may be able to agree on, such as faster approvals for low-carbon energy sources like renewable power, small nuclear reactors, and hydrogen. (Politico)
On the border – Mexico and the US are working on ambitious plans to turn parts of the border region into a clean energy hub, replete with solar and wind plants, lithium mining, and electric vehicle factories, President Andres Manuel Lopez Obrador (AMLO) said Monday. Mexico is looking to build five large solar plants, to help remodel car factories for electric vehicles, and produce batteries and semiconductors in the state of Sonora, which shares nearly 600 km (370 miles) of border with the US, AMLO said at a daily press conference. Mexico has also been working with Biden’s top climate diplomat John Kerry, who made the latest of several trips to Mexico last weekend, on a “really, really very important” plan to “generate more wind and solar energy and to drive the modernisation of hydroelectricity,” Lopez Obrador said, giving few details on the project. (Bloomberg)
Canyon continuation – California utility Pacific Gas & Electric (PG&E) on Monday submitted an application to the US Nuclear Regulatory Commission requesting to continue operating the Diablo Canyon nuclear plant until 2030. California lawmakers voted in September to keep the plant running, in an effort to maintain grid reliability. Diablo Canyon’s two units had been set to retire in 2024 and 2025, but concerns over the reliability of California’s grid prompted officials to reconsider. The plant provides about 8.5% of in-state generation. (Utility Dive)
Polklore – Xcel Energy plans to retire its 1,067MW coal-fired Polk power plant in northwest Texas in 2028, four years earlier than planned, a move that would speed up the utility company’s exit from coal by about three years. With planned power plant retirements in other states, Xcel will shutter its entire coal-fired generating fleet in its eight-state service territory before 2031, the Minneapolis-based company said Monday. Xcel previously aimed to be coal-free by 2034. Xcel owned about 6,500 MW of coal-fired generation at the end of last year, according to its most recent annual report. (Utility Dive)
Tax territory – Canada’s Northwest Territories is updating its carbon tax system to align with the rising federal price on carbon and more stringent requirements, the regional government announced Monday. The federal price on carbon is going up to C$65/tonne in 2023, and will continue to rise by C$15 every year until reaching C$170/tonne by 2030. Carbon tax rebates are now prohibited to fund activities that drive down the price on emissions, meaning the rebates will no longer cover heating and large emitters. The Northwest Territories’ government will instead give a tax rebate for heating and large emitters through a territorial programme. Meanwhile,. the neighbouring Yukon territory announced its updated carbon tax plans on Oct. 24, as it will introduce a revenue-neutral Mining Business Rebate.
EMEA
Not enough – The draft climate action programme currently being debated among German ministries is not enough to reach GHG reduction targets in the transport sector for 2030, and additional steps are to be agreed on early next year, documents seen by Clean Energy Wire show. The transport sector must cut some 271 Mt by 2030, yet there is still a gap of 118-175 Mt unless further measures are introduced, according to the paper. Following recent criticism regarding insufficient efforts, the transport ministry said that it would include new proposals in the government’s overarching climate action programme 2022, which will have to be approved by the full cabinet. However, the issue has now been postponed. The government intends to present a new package of measures for transport next spring. Among the 2030 goals in the transport sector is increasing the number of electric cars to 15 mln. Additionally, the promotion of electromobility, rail transport, and urban and regional transport are to be expanded, and more renewable fuels are to be used. The paper also envisages a number of other measures, including an accelerated expansion of renewable energy sources, renovation measures in the building sector and the expansion of organic farming, that could reduce sufficient GHGs in the energy, industry, and building sectors by 2030. Germany’s ambitious goals to achieve climate neutrality by 2045 are only possible if decisive measures are taken now and greenhouse gas emissions fall significantly in this decade. To ensure those goals are achieved, the government is developing a wide-ranging climate protection programme to address needed emission reductions of 65% by 2030 compared to 1990 levels.
Not my volt! – UK battery firm Britishvolt has averted collapse by securing additional funding for the business, the BBC reports. The future of the start-up was thrown into doubt over fears it could run out of money after the government rejected a £30 mln advance in funding. The firm wants to build a factory in the region of Northumberland which would build batteries for electric vehicles. The government, which had championed the development, had committed £100 mln in total to Britishvolt for the project. It is understood the firm wanted to draw down nearly a third of the funding early, but the government refused. It has now secured cash for the business to stay afloat in the short to medium term, sources with understanding of the matter said. The sources would not comment on the identity of the new backer or backers. Britishvolt has struggled to find investors to help fund the construction of its so-called gigafactory in Blyth. The plant had been expected to create 3,000 jobs, but has already been delayed several times, which has led to doubts over whether the £3.8 bln project would become a reality. But the firm, which is yet to make any revenue, has carried out talks in recent months to try to secure fresh funds to stay afloat.
VOLUNTARY
Dos DAC – British Columbia-headquartered Carbon Engineering (CE) on Monday announced it has begun front-end planning and engineering for direct air capture (DAC) facilities at a second site in the US in Kleberg County, Texas. The site is expected to provide access for the potential construction of multiple DAC facilities that would be capable of collectively removing up to 30 Mt from the atmosphere annually for dedicated sequestration. CE has been contracted by its US development partner, 1PointFive, for the front-end planning and engineering of a 1Mt DAC facility that is intended to be replicated into multi-million tonne deployments. The design is being adapted from the first large-scale, commercial facility to use CE’s DAC technology, which is already under construction in the Texas Permian Basin, and is anticipated to form the basis of accelerated large-scale deployments in the US.
Karora Borealis – Toronto-based minerals company Karora Resources on Tuesday announced it has achieved Scope 1-2 CO2 neutrality for the second straight year in 2022 through purchasing and retiring 95,000 VERs. In a press release, the company said that through its alliance with Invert Inc., it selected a range of offset projects, ranging from renewable projects to reforestation in Australia, among others. The retired Australian carbon offsets are independently verified by Gold Standard and simultaneously qualify as government accredited Australian Biodiversity Units, meeting the standards required for the Australian Government’s Climate Active Program
AND FINALLY…
Art attack – German chancellor Olaf Scholz has criticised the actions of climate activists targeting artworks and blocking traffic by gluing themselves to streets. “There are other ways in which people can express their opinion,” he said. Climate activists have targeted multiple artworks in museums across Europe to draw attention to the cost-of-living crisis and government reactions to the climate crisis. In Germany, two protesters from the group Last Generation threw mashed potatoes over a Claude Monet painting in Potsdam and two others glued themselves to an exhibition dinosaur skeleton in Berlin’s Natural History Museum on 30 October. Climate activists are also frequently blocking motorways and large street crossings in capitals like London and Berlin. (Clean Energy Wire)
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