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COP27
US climate envoy Kerry announces “light on detail” plan to decarbonise power in developing countries via corporate carbon credit purchases
US climate envoy John Kerry announced on Wednesday plans to enable companies to buy carbon credits to support developing countries in accelerating their phaseout of coal power and renewable power expansion, aiming to develop a framework by the end of next year to scale the finance available and confirming a partnership with a new African carbon market initiative.
ANALYSIS: US climate envoy’s carbon market concept battles three thorny issues
A new global carbon market concept pushed by the US on Wednesday is bracing to battle at least three thorny issues that have plagued carbon credit markets in the voluntary space over the years, including their use towards net zero targets, preventing carbon leakage, and benefiting the most vulnerable.
China says talks with US remain informal amid push to tackle loss and damage, Article 6 implementation
China’s delegation to COP27 in Sharm el-Sheikh has begun informal discussions with their US counterpart, as the world’s largest emitter aims to promote multilateral efforts on addressing climate change and loss and damage, as well as push against actions such as the EU’s proposed carbon border mechanism, President Xi Jinping’s representative to COP27 told journalists Wednesday.
Rights experts want Article 6.4 grievance mechanism with teeth in place before carbon credit issuances start
Experts have urged the supervisory body on Article 6.4 to ensure the proposed grievance process, or mechanism, has teeth, is designed by landholders, and has key transparency assurances, as efforts are underway to establish it in time for the beginning of credit issuances in 2025.
Dominican Republic, GCC plan Article 6.2 deals during summit
Senior representatives from the Dominican Republic and certifier Global Carbon Council both said Wednesday that they are looking to leave COP27 with carbon credit trade deals announced under Article 6.2 of the Paris Agreement.
Laos readying 30 mln tonnes in forestry emissions reductions by 2025, exploring credit options -minister
Southeast Asian nation Laos aims to generate 30 million tonnes worth of forestry emissions reductions by 2025, with a senior minister telling a COP27 event that the government is now “highly engaged” in driving private sector interest with possible VCM and Article 6.2 involvement on the horizon.
Oil and gas GHG emissions much higher than claimed, finds report
Many oil and gas facilities around the world are emitting three times more greenhouse gases (GHG) than claimed, a new report states.
Roundup for Day 3 – Nov. 9
It’s Wednesday – Finance Day – at COP27 in Sharm el-Sheikh, and Carbon Pulse will keep you updated with developments throughout the day. Timestamps in local time (EEST, GMT+2).
AMERICAS
US midterms deliver state-level climate wins, as federal results avoid IRA snapback
An anticipated red wave was more of a ripple in the US midterm election on Tuesday as the Republican Party appeared to have come up short in its ability to limit the Inflation Reduction Act’s (IRA) $370 billion in climate initiatives, while state-level victories by Democrats preserved market-based carbon reduction programmes across the country.
California floats steeper 2030 LCFS carbon intensity target, potential RNG phase out
California regulator ARB presented a stronger potential 2030 carbon intensity reduction goal for the Low Carbon Fuel Standard (LCFS) on Wednesday, which was more stringent than two targets published earlier this year, with some of those scenarios limiting the ability of credit generation from renewable natural gas (RNG) and crop-based biofuels.
California DEBs offset pool jumps by a quarter with addition of Arizona-based credits
California regulator ARB issued the lowest number of compliance offsets since mid-July for the latest reporting period, but tagged more than 11 mln credits from an Arizona forestry project with the distinction of accruing direct environmental benefits to the state (DEBs), according to government data published Wednesday.
US announces strategic plans, funding for advancing nature-based solutions
The US will focus on five strategic areas to support nature-based solutions (NBS) and achieve the country’s 2030 GHG reduction targets, President Joe Biden’s administration announced Tuesday on the sidelines of COP27.
ASIA PACIFIC
Singapore passes bill to increase carbon tax, setting trajectory for S$50-80/t by 2030
Singapore has passed the Carbon Pricing (Amendment) Bill, formally establishing an increase in its carbon tax in two stages to S$45 ($32) per tonne from 2026 and putting the country on a pathway for the tax to reach as high as between S$50-80/t by 2030.
SK Market: Korean auction sees lacklustre interest as oversupply looms
Interest in South Korea’s monthly CO2 allowance auction continues to decline, with traders picking up less than a quarter of the volume available at Wednesday’s sale amid continued oversupply in the market.
China ETS should include cement and steel sooner to reduce CBAM impact, experts say
China should expand the sectoral coverage of its national emissions trading scheme to include cement and steel as soon as possible to mitigate the impact of the carbon border adjustment mechanism (CBAM) proposed by the EU, a webinar heard on Wednesday.
Japan leads G20 in fossil fuel financing, promotes false solutions to climate change -report
Japan is the world’s leader when it comes to public financing of fossil fuels, driving an expansion of gas use and promoting false solutions to climate change such as hydrogen/ammonia-co-firing and carbon capture that will only prolong the demand for hydrocarbons, a report has claimed.
EMEA
EU institutions clinch deal on non-ETS effort sharing regulation
The EU has reached a provisional political agreement on reforming the bloc’s Effort Sharing Regulation (ESR) that establishes binding national targets in non-ETS sectors, after late-night trilogue talks on Tuesday between negotiators from the Parliament, Commission, and Council of member states.
EU Parliament poised to sign off on REPowerEU changes -sources
The European Parliament is expected this week to vote in line with several of its committees over the bloc’s REPowerEU package to exit Russian fossil fuels, several sources told Carbon Pulse on Wednesday, teeing up a tussle with member states on several issues including sources of carbon allowance funding.
Key EU lawmaker flags potential for “small delay” in CBAM reporting as talks drag on
Next year’s planned introduction of a reporting system for the EU’s carbon border adjustment mechanism (CBAM) is likely to suffer a “small delay” as the legislators are still negotiating the proposal, the European Parliament’s lead lawmaker on the issue said on Wednesday.
Euro Markets: EUAs drop as much as €4 as traders eye Parliament REPowerEU vote
EUAs dropped by more than €4 at one point on Wednesday as sellers continued to dominate the market ahead of a European Parliament vote on the bloc’s REPowerEU plan even as exchange data showed investment funds had added to net length last week.
VOLUNTARY
EEX looks to market sovereign REDD.plus credits after Xpansiv departed
German-based exchange EEX looks set to fill the gap left by Xpansiv last month after the latter dropped plans to host carbon units from sovereign forestry conservation platform REDD.plus.
Industrial decarbonisation investor buys stake in London-based energy and carbon risk manager
A London-based energy and carbon risk management firm has announced a private equity investment from a firm specialising in industrial decarbonisation.
Ratings firm downgrades VCS-certified African project on overcrediting risk
A carbon credit ratings agency has downgraded is score for major VCS-certified African REDD project on concerns that it may have been awarded too many credits.
Oil and gas exploration firm signs multi-year clean cookstove partnership with UN-based non-profit
A US-headquartered oil and gas exploration firm has inked a multi-year partnership with a UN-backed non-profit to help drive a “sustainable” market for clean cooking solutions, including “clean-burning” liquefied petroleum gas (LPG).
INTERNATIONAL
Securities regulators launch dual consultations into compliance, voluntary carbon markets
A global group of securities regulators has launched dual consultations into compliance and voluntary carbon markets, seeking feedback on the role of financial watchdogs can play in increasing the resilience of these schemes while also leveraging the experience gained from wider financial markets.
Open source platform shows forestry data for every country in the world
A platform showing forestry data across every country and jurisdiction in the world, including degradation levels, was launched at COP27 in Sharm el-Sheikh 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
Pricing CI – Commodity information platform S&P Global Commodity Insights, a division of S&P Global, announced on Wednesday the Nov. 15 launch of the industry’s first-ever carbon intensity (CI) estimates for diesel, gasoline, and jet fuel, along with daily carbon offset price premiums. S&P Global uses proprietary information about the quantity of crude grade feedstock in each region, the different types of refinery configurations, the number of these refiners, and the regional refinery yields to estimate a regional weighted CI value for the individual products used on PRELIM, an open-source model, according to the company’s press release. The offset price premium assessments will be tied to existing price benchmarks for diesel, gas, and jet fuel in Northwest Europe (NWE), US Gulf Coast (USGC), and Singapore, the company stated. The daily price premium assessments will be published in $/gal, $/mt, $/bbl for the US, Europe, and Asia respectively using the daily Platts Carbon Removal Credit (CRC) voluntary carbon credit assessment.
EMEA
Green spend – Spain’s Iberdrola plans to invest €47 bln in its electricity networks, renewable energy production, and customer businesses in 2023-25 with profits expected to rise, Reuters reports. Iberdrola is pushing to remain one of the global renewable power leaders at a time when utilities are facing a challenging transition away from fossil fuels, accelerated by the need to cut energy dependence on Russia. In a strategy update, Iberdrola said 57% of the investment, or €27 bln, would be in electricity networks, while €17 bln would go to renewables. Nearly half of that would be spent on offshore wind. Iberdrola plans to deliver 52 GW of newly installed renewables capacity by 2025, it added. “If we are to learn one lesson from the current crisis, it is the compelling need to deliver electrification quickly for a more secure, clean, and competitive energy system,” said Executive Chairman Ignacio Galan.
Downtime – Sweden’s biggest nuclear rector has unexpectedly shut down after suffering a fault in its turbine. The shutdown of the plant, which is operated by Uniper and is vital to power supplies in southern Sweden, makes an already strained supply situation even worse – although demand is tempered by unseasonably mild weather. Uniper 1,400MW facility halted completely at 1043 local time after earlier running at slightly reduced capacity, according to a filing with power exchange Nord Pool. “We’re carrying out searches to see what the fault is,” said Uniper spokesman Torbjorn Larsson. The firm aims to update the market within 25 hours, according to the filing. (Bloomberg)
F-off – As Europe looks to reach climate neutrality by 2050, it is targetting highly-potent fluorinated gases that are used mainly in air conditioning and refrigeration but also in green technologies like heat pumps. The EU is in the process of revamping its 2014 F-gas regulation, with the European Commission proposing earlier this year to get rid of F-gases almost completely. The Commission ultimately seeks to reduce F-gas emissions by 98% by 2050. On the way there, the 2030 target is 21% of the average in the early 2010s. But MEPs have raised concerns that industry may switch from F-gases to chemically harmful substances as an intermediary step instead of going all the way. As well, some are worried the new regulation risks undermining the EU’s objective of putting 30 million heat pumps on the market by 2030, while others say EU measures need to more aggressively tackle the illicit trade in these gases. (Euractiv)
Germany going Dutch – Landlords in Germany will have to participate in a CO2 levy for residential buildings that so far has solely been borne by tenants, reports Reuters. Germany’s “traffic light” coalition – formed by the Social Democrats (SPD), the Green Party, and the Free Democrats (FDP) – has agreed on a tiered cost-sharing system for the nEHS levy system for building emissions first introduced in 2021. The new tier model will see costs distributed between landlords and tenants depending on the consumption and condition of the building. In the case of buildings with particularly high emissions, landlords would have to bear a maximum of 95% of the costs. “This gives landlords a greater incentive to make energy-saving investments,” FDP lawmaker Bernhard Daldrup told Reuters. “Conversely, landlords in the upper segment are largely relieved,” he added. The CO2 levy in residential buildings covers emissions in the sector caused by the combustion of fossil fuels and is currently paid entirely by tenants via their heating bill. According to the tenants’ association, the CO2 levy on average will cost tenants in an apartment building an additional €67 for gas and €98 for heating oil systems annually. The CO2 price in the building sector is set to gradually increase annually, though the rise for next year has been postponed due to the energy crisis. The law is set to be passed this week and enter into force in 2023.
Hydrogen agreement – BP has signed an agreement with Mauritania to explore ways to develop low carbon hydrogen on a large scale in the West African country, Reuters reports. The memorandum of understanding, which does not include a time frame or targets for the project, aims to build on BP’s presence in a country where it is already developing a large liquefied natural gas (LNG) facility. Under the plan, BP will initially study the feasibility of building onshore wind and solar farms that are required for the production of green hydrogen, which is produced by electrolysis using renewable energy.
Don’t park in the sun – In France, solar just got a huge boost from new legislation approved through its Senate this week that requires all parking lots with spaces for at least 80 vehicles – both existing and new – be covered by solar panels, Elektrek reports. The new provisions are part of French president Emmanuel Macron’s large-scale plan to heavily invest in renewables, which aims to multiply by 10 the amount of solar energy produced in the country, and to double the power from land-based wind farms. Starting from July 2023, smaller carparks that have between 80 and 400 spaces will have five years to comply with the new measures. Carparks with more than 400 spaces have a shorter timeline. According to the government, this plan, which particularly targets large parking areas around commercial centres and train stations, could generate up to 11 GW, which is the equivalent of 10 nuclear reactors, powering millions of homes.
ASIA PACIFIC
Advice needed – China’s environmental ministry has released a draft for the revision of emissions reporting guidelines, a move it believes will improve the availability and quality of emissions data. The guidelines have been amended to streamline the reporting process and clarify some technical details for emitters, though power companies still need to report their data every month, according to the draft. The paper has been made public for consultation, with stakeholders asked to advise on the proposal by Nov. 18, the ministry said.
Fortescue signs again – The Government of Kazakhstan and Australia’s Fortescue Future Industries have signed a Framework Agreement on the implementation of green hydrogen production projects in several regions of the country, including the Atyrau and Mangystau regions, Hydrogen Central reports. The agreement was signed during the meeting between Alikhan Smailov, Prime Minister of Kazakhstan, and Andrew Forrest, CEO of Fortescue, at the COP27 Summit of World Leaders on Climate Change in Egypt. The implementation of the agreement is expected to contribute significantly to Kazakhstan’s targets to reduce greenhouse gas emissions by 15% by 2030 and achieve carbon neutrality by 2060. Future projects are designed to produce a significant amount of green hydrogen, which will also be supplied to the European market under a memorandum of understanding signed the day before between Kazakhstan and the European Union.
Hydrogen funding – Leading superannuation fund Hesta says it is set to invest A$100 million into Countrywide Hydrogen after the start-up green hydrogen developer ratcheted up progress at several projects this year, RenewEconomy reports. The new partnership will see Hesta fund existing projects but also have the opportunity to be a co-investor on new developments, says Countrywide managing director Geoffrey Drucker. The investment is still dependent on due diligence and a term sheet outlines their “intention to jointly pursue green hydrogen projects and to advance definitive agreements” as yet unnamed. Countrywide was bought by ASX-listed ReNu Energy in February, and although all of its five projects are still in planning stages it intends to have its home-made green hydrogen in the market within two years. There are three projects in Tasmania and two in Victoria.
Insure net zero – The Insurance Council of Australia has released a paper outlining the way insurers can achieve net zero emissions for their operations by 2030 and across the entirety of insurers’ activities by 2050, Reinsurance News reports. Authored by Boston Consulting Group for the Insurance Council, the roadmap draws on extensive consultation with the A$60 billion general insurance sector over the last 12 months. Andrew Hall, CEO Insurance Council of Australia, commented, “As a financial service focused on risk, insurance is already bearing the cost of worsening extreme weather driven by climate change. “Insurance customers around the country are facing a new era of extreme weather, from more intense rainfall and flooding, more severe bushfires, and projections of more intense cyclones.”
Not enough – Environmental groups have raised concerns about Taiwan’s emissions target, urging the government to increase planned carbon emissions cuts from 20% to 40% by 2030, Taipei Times reports. The island nation’s 2050 net zero goal is not possible without elevating emission reduction targets for 2030, and continued inaction would put the commitment to carbon neutrality in a bad light, group representatives said. Despite the lack of a clear timeline, Taiwan’s environmental regulator has said it might set a more ambitious emissions reduction target for 2030 by year-end after re-examination, according to a report by Economic Daily News.
AMERICAS
Go with the flow – The California and Quebec governments on Wednesday published an example of the accounting mechanism developed by the jurisdictions that account for compliance instruments traded between the two subnational entities and retired in the WCI-linked carbon market. The accounting mechanism was developed under Article 8 of the California-Quebec linkage agreement, designed to help prevent double counting of emissions reductions. Over 2013-20, the accounting mechanism showed that some 51.1 mln allowances and offsets have flown into Quebec from California, though the governments cautioned the results should not be interpreted as a net flow between the jurisdictions. This is because the example with public data does not account for administrative transfers, voluntary retirements, or return of free allowance allocation, which are confidential and represent a small portion of the total market supply and retirements. Additionally, it does not incorporate adjustments related to Ontario’s abrupt, six-month linkage with the WCI programme, meaning the official net flow will be calculated using confidential data from the Compliance Instrument Tracking System Service (CITSS).
440 Mt to freedom – Think-tank Canadian Climate Institute on Wednesday launched a new online data project, 440 Megatonnes, which tracks Canada’s progress on implementing climate policy and reducing greenhouse gas emissions. 440 Megatonnes refers to Canada’s commitment to reduce emissions by at least 40% 2005 levels by the end of the decade – or no more than 440 Mt a year in 2030 –en route to net zero by 2050. The website features expert insights, one-of-a-kind searchable databases, and downloadable open-source data showing where Canada is on track to meet its 2030 target and where there are opportunities to correct course. It tracks information about national, regional, and sectoral emissions, government policies and spending, and corporate emissions reduction commitments.
REC sale – Brokerage Evolution Markets on Tuesday announced it will conduct a Renewable Energy Certificate (REC) auction on Nov. 16 on behalf of the Massachusetts Clean Energy Center (MassCEC). MassCEC plans to offer 3,529 V22 Massachusetts Class I Renewable Certificates from three renewable energy projects: the Green Affordable Housing Initiative, Fairhaven Wind LLC facility, and the Jiminy Peak Mountain Resort wind energy facility. Renewable energy certificates from each project have been approved by the Massachusetts Department of Energy Resources (DOER) as eligible sources under the Massachusetts Renewable Portfolio Standard (MA RPS).
AND FINALLY…
No soup for you! – Climate protesters in Australia on Wednesday scrawled graffiti and glued themselves to an Andy Warhol artwork depicting Campbell’s soup cans but didn’t appear to damage the piece because it’s encased in glass. It was the latest incident in which climate protesters have targeted an iconic piece of art without causing permanent damage. Other protesters have thrown soup over Vincent van Gogh’s “Sunflowers” in London and mashed potatoes at a Claude Monet painting in Germany. A group called Stop Fossil Fuel Subsidies posted video to social media showing two women applying blue graffiti to five of 10 screen prints by Warhol depicting Campbell’s soup cans and then gluing themselves to the work at the National Gallery of Australia in Canberra. “We’re in a climate emergency,” one of the women shouts. The group said its members were highlighting the dangers of capitalism by gluing themselves to a work that depicts “consumerism gone mad.” (AP)
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