CP Daily: Thursday November 10, 2022

Published 05:25 on November 11, 2022  /  Last updated at 06:03 on November 11, 2022  /  Newsletters  /  No Comments

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

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COP27

Countries’ dash for gas will lead to supply, emissions overshoot -analysis

The energy crisis has overtaken the climate crisis, as emissions from new gas capacity now threatens the 1.5 C warming limit, according to analysis released Thursday, as the fossil fuel has wedged itself into multiple discussions during the COP27 conference.

Offset project developer, investor ink Article 6.2 partnership with Senegalese company

A global offset project developer and carbon market investor at COP27 on Thursday announced a memorandum with a Senegal government-backed company under Article 6.2 of the Paris Agreement, in what is billed as the world’s first private sector ‘ITMO’ partnership.

Global emissions from fossil fuel use rise by 1% in 2022 to new high, research finds

Global CO2 emissions from fossil fuel use are estimated to increase by 1% in 2022 to 36.6 billion tonnes, reaching a new record and reflecting a full rebound from the pre-COVID-19 levels in 2019, research released early Friday shows.

Roundup for Day 4 – Nov. 10

It’s Thursday – Science Day – at COP27 in Sharm el-Sheikh, and Carbon Pulse will keep you updated with related developments throughout the day. Timestamps in local time (EEST, GMT+2).

EMEA

POLL: Analysts cut short-, medium-term EU carbon price forecasts on worsening outlook

Analysts have cut their short- and medium-term EU carbon price forecasts over a mix of bearish factors including Europe’s energy crisis, the continent’s worsening economic outlook, and increased allowance sales through the bloc’s REPowerEU plan.

EU Parliament signs off on REPowerEU changes, seeking to frontload ETS auction revenue entirely from govt supply

The European Parliament voted on Thursday in line with several of its committees over the bloc’s REPowerEU package to ditch Russian fossil fuels, teeing up a tussle with member states on several issues including sources of carbon allowance funding.

EU energy companies announce strong ETS-covered generation rise in 9M results

European utilities and energy firms have reported a significant rise in fossil fuel generation that is covered by the EU ETS over the first nine months of 2022, according to multiple company results published Thursday.

Euro Markets: EUAs erase early losses on Parliament vote as energy gets US inflation boost

EUAs rallied on Thursday after an early fall that saw prices tumble by more than €2 in less than an hour, as traders reacted the European Parliament’s vote on proposals to sell allowances to fund the bloc’s transition away from fossil fuels, while bullish US inflation data drove energy markets higher.

Swiss bank’s AM arm launches new fund to capitalise on carbon market “inefficiencies”

The asset management arm of a Swiss bank has launched a new fund to capitalise on “inefficiencies” in the carbon markets.

VOLUNTARY

UN posts Gabon’s REDD results, paving way for potentially huge national-scale carbon credit issuance

The UN late on Wednesday posted Gabon’s REDD forest protection results over the past decade, the final procedural step that paves the way for the world’s biggest carbon credit issuance.

Verra struggling to clear bulging backload of new projects

Verra is overhauling internal processes in a bid to clear an “unprecedented” surge of often poorly documented project requests that threatens to stifle the rapid expansion of the voluntary carbon market (VCM).

£9.3-bln UK pension fund makes £100-mln anchor commitment to new forest carbon investment vehicle

A £9.3-billion UK pension fund has made a £100-million anchor commitment to a new fund that monetises carbon credits from developing timberland plantations and restoring forests.

Rating agency slightly downgrades two hydro projects in India

A rating agency has slightly downgraded its scores for two Verra-accredited hydropower projects in India, although both grades still give a moderate chance of achieving or removing a tonne of CO2 per credit.

AMERICAS

California’s ARB launches second probe into Wisconsin offset project

California regulator ARB on Thursday announced an investigation into a Wisconsin-based livestock project, coming just two years after the agency invalidated offsets from the same dairy digester for non-compliance with state permit requirements.

NA Markets: CCAs and RGAs decline while Q4 WCI sale, new Pennsylvania leadership come into focus

California Carbon Allowance (CCA) and RGGI Allowances (RGA) prices traded lower through the US midterm election week and shrugged off a cooler US Consumer Price Index (CPI) reading, as market participants geared up for the Q4 WCI auction and look to guidance from Pennsylvania’s governor-elect on the state’s RGGI future.

2023 WCI floor price gets set as October inflation dips below 8%

Next year’s WCI-linked cap-and-trade auction reserve price is unofficially set as October inflation fell below 8% for the first time since February, according to federal data published Thursday.

US proposes rule for federal contractors to disclose GHGs, set science-based targets

US President Joe Biden on Thursday at COP27 proposed a GHG emissions disclosure rule for federal contractors that would also require major suppliers to set science-based targets to cut their carbon output.

ASIA PACIFIC

Vietnam raises 2030 climate targets in updated NDC

Vietnam has adopted more ambitious targets to reduce its emissions by 2030 from a Business as Usual (BAU) trajectory in its latest NDC submission to the UNFCCC, although overall its GHG output is still likely to rise in absolute terms in scenarios laid out in both its unconditional and conditional pledges.

Bhutan signs partnership to develop carbon credit aggregation platform

The commercial arm of the Bhutanese government has teamed up with a Singapore-headquartered tech company to develop a blockchain-based platform to streamline the issuance of carbon credits in the country.

Chevron partners with MOL to assess LCO2 transport from Singapore to Australia

Chevron has signed a joint study agreement (JSA) with Japanese shipping company Mitsui OSK Lines (MOL) to assess the feasibility of transporting liquefied CO2 (LCO2) from Singapore to permanent storage locations in Australia, the US oil and gas major announced on Thursday.

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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

Now go forth and prosper – Nations vulnerable to climate change have begun to publish “prosperity plans”, laying out what they want money to be spent on to stop climate change from thwarting their economic development. The Climate Vulnerable Forum (CVF) has helped Bangladesh, Maldives, Sri Lanka, and Ghana put together lengthy documents laying out billions of dollars of investments they want to attract by 2030. Senegal and Costa Rica are leading a group of around 30 nations with plans in the pipeline, according to CVF finance adviser Sara-Jane Ahmed. Ahmed told Climate Home that the rich governments which failed to deliver their promised $100 bln a year by 2020 were not going to mobilise the trillions of dollars that vulnerable countries need without private sector help. She added that the UN Green Climate Fund, which distributes climate finance from developed to developing countries, was too slow to distribute. She said the prosperity plans aim to use public finance from governments and multilateral banks to attract larger amounts of private finance, known as leveraging, quickly.

Pour some sugarcane on me – Shell has agreed to buy a total of 3.25 bln L of sugar-cane cellulosic ethanol under a long-term agreement with Brazil’s Raizen, the companies announced this week. The low-carbon fuel is expected to be produced by five plants that Raizen plans to build in Brazil, bringing its total portfolio of cellulosic ethanol facilities to nine.     Under the agreement, Shell Trading Rotterdam will buy the cellulosic ethanol produced during the first 10 years of each new facility’s operational life. Raizen, which is 88% owned by Shell and Brazilian conglomerate Cosan, will supply cellulosic ethanol with a carbon intensity that is approximately 75% lower than gasoline. The last of the plants is expected to begin production by the end of 2027, meaning Shell would continue to receive sugar cane cellulosic ethanol from that plant until 2037.

EMEA

Billion-euro fail – Billions of euros in aid given to coal regions in the EU have all but failed to spearhead an effective climate transition, auditors said as reported by Euractiv. The European Court of Auditors (ECA) analysed the effects that expenditures of some €12.5 bln in 2014-20 had for seven coal-producing regions in Germany, Poland, Romania, the Czech Republic, and Spain. “EU support for coal regions achieved little for climate transition,” the ECA said in its audit. EU financial assistance for coal regions has had a limited impact on both jobs and energy transition, the ECA added. It said the funds in question were used more for related development upgrades ranging from health to transport infrastructure, among other broad quality of life projects, but provided little impetus to the transition to green energy.

Romanian reactors – Romania plans to borrow more than $3 bln from the Export-Import Bank of the US (EXIM) to build two new reactors at the country’s sole nuclear power plant in Cernavoda. EXIM issued two letters of interest for US exports being used at the nuclear power project in Romania. One of the letters concerns a first loan of about $50 mln to support the second phase of the project, starting in the second quarter of 2023, while the second letter refers to a $3 bln loan that will cover the US contribution to the project as a whole, Romania’s Energy Minister Virgil Popescu said. The governments of Romania and the US have an agreement on cooperation in the field of nuclear energy. (Euractiv)

50 few – French President Emmanuel Macron presented his carbon emission reduction targets for the industrial sector this week, highlighting the need for investment in greener industries and speaking to competitiveness issues stemming from the US Inflation Reduction Act (IRA). In France, industry is responsible for more than 20% of national GHG emissions, but also represents more than 3.2 mln jobs and just over 10% of the country’s GDP. The aim is to halve over the next ten years the emissions of 50 industrial sites that are among the 120 biggest carbon emitters in France, reducing national CO2e by 5%. Only €5 bln has been secured to finance the scheme thus far, a pale comparison to the IRA’s $369 bln in support, which Macron said could see European manufacturers relocate across the Atlantic. A revision of EU State Aid rules may be needed in this respect, he said. (Reuters).

Missing Wisting – Soaring costs and supply chain bottlenecks have put a question mark over plans for what would be the world’s most northern oilfield in production, with Norway’s Equinor and its partners postponing a decision on the Arctic project. Environmental campaigners celebrated on Thursday as state-controlled Equinor pushed back an investment decision on the Wisting offshore oilfield to the end of 2026 from December this year, with one analyst saying it could be shelved indefinitely. Greenpeace said the delay means 200 MtCO2 will stay in the ground. (Reuters)

ASIA PACIFIC

Big transition spend – Canadian funds management giant Brookfield Asset Management is leading a surprise A$18.4 bln takeover bid for Australia’s biggest utility Origin Energy, with plans to split the business in two and spend another A$20 bln by 2030 on renewables and storage to make it a “green retailer,” RenewEconomy reports. Brookfield is offering A$9 a share for Origin and intends to retain its electricity and gas retailing business, while bid partner MidOcean Energy will take over the LNG business. Brookfield’s investment is part of the Brookfield Global Transition Fund, the world’s largest fund dedicated to the energy transition, and it says it plans to spend an additional A$20 billion in renewable and firming capacity by 2030. “The energy transition in Australia is a once in a generation investment opportunity but that investment needs to be accelerated materially in order to meet Australia’s legislated climate goals,” Brookfield Asia Pacific CEO Stewart Upson said in a statement. “Our business plan includes an additional investment of A$20 billion by 2030 to build the required renewable capacity and storage and position Origin as Australia’s leading ‘greentailer’.

Hydrogen supply chain – As part of Dubai’s strategy to become a sustainable global hub for clean energy, the emirate’s energy company, ENOC Group, and Japanese heavy-industry manufacturer IHI Corporation signed a Memorandum of Understanding (MoU) to explore establishing a low carbon hydrogen and low carbon ammonia supply chain in the UAE, Gulf News reports. The move is aligned with the UAE’s overall efforts to diversify its energy sources to transition into a clean energy model for the world to emulate. The produced fuel will be exported to Japan and supplied within the UAE and across the region for bunkering and other purposes.

Hydrogen strategy – South Korea has vowed to significantly boost the use and production of clean hydrogen by extending support for securing advanced technologies and building infrastructure to achieve zero emission goals and become the world’s No. 1 hydrogen industry powerhouse, Yonhap news agency reports. The government announced the comprehensive roadmap during a hydrogen economy commission meeting in Seoul presided over by Prime Minister Han Duck-soo. Under the blueprint, the government will push to boost the number of hydrogen-powered commercial vehicles in the country to 30,000 by 2030 from the current 211 units and build 70 liquid hydrogen fueling stations across the country. It also seeks to raise the ratio of blue and green hydrogen out of the total power output to 2.1% in 2030 and further to 7.1 % by 2036.

Give us back the oil – New Zealand’s main opposition party, the National party, reaffirmed on Thursday that if it wins next year’s election it will repeal the offshore oil and gas ban, which was introduced by the current administration in 2018. In a speech, the party’s energy spokesperson Stuart Smith said that while he supported the 2050 net zero target, but that it must be met in a way that “doesn’t impoverish us all”. He also said the country’s 100% renewable energy target was too costly. (Stuff)

Working on the chain – Australian blockchain outfit TYMLEZ has partnered with project developer Natural Carbon to tokenise ACCUs from the Olkola Ajin-Plkola fire project. The two are working together with natural asset management platform Cecil to make the credits tradeable on chain in a bid to support First Nations communities’ access to new carbon markets, they said in a press release.

Standards in the making  China, the world’s largest vehicle manufacturing country, is drafting carbon emission accounting standards for its automotive sector, state-owned media CGTN reports, citing the China Association of Automobile Manufacturers (CAAM). It is necessary to reduce carbon emissions from the entire life cycle of car production to reduce emissions in China’s automobile sector and narrow the gap with the developed countries, CAAM executive vice chairman Fu Bingfeng said. The industry needs to cut CO2 emissions by 20% by 2035, below a 2027 peak, to be on track to China’s 2060 net-zero target, according to a report by Greenpeace.

AMERICAS

Here’s someone we haven’t heard from in a while – US Sen. Joe Manchin has decided against scheduling a confirmation hearing for Federal Energy Regulatory Commission (FERC) Chair Richard Glick with only weeks left before the end of the current Congress. The West Virginia Democrat is “not comfortable” moving forward with Glick’s renomination, Sam Runyon, spokeswoman for Manchin’s office, said Thursday. The decision comes days after Manchin criticised President Joe Biden’s remarks on shutting down coal plants. Glick, a Democrat who was nominated in 2017 by the Trump administration, was renominated by the Biden White House in May. If the Senate doesn’t act during the lame-duck Congressional session to end the year, the White House could still resubmit his nomination in early 2023. (Bloomberg Law)

Agro angst – The Biden administration may soon have to defend its $3.5 bln programme to encourage climate-smart food production, following Tuesday’s midterm elections, E&E Daily reports. Republicans on the House Agriculture Committee are making the administration’s Partnerships for Climate-Smart Commodities grant programme an early target for oversight as they prepare for the likelihood of taking the majority in the House. While lawmakers may not be in a position to dismantle the programme, which the Agriculture Department created and funded earlier this year without congressional action, they have a valid complaint that Agriculture Secretary Tom Vilsack overstepped in how he launched it, former House Agriculture Chair Collin Peterson (D) said Wednesday.

RVOs’ round the corner – The US EPA on Wednesday sent the preliminary renewable volume obligations (RVOs) for 2023 and later under the Renewable Fuel Standard (RFS) to the White House Office of Management and Budget (OMB) for review, according to updated agency data. Although OMB typically has 30 days to review regulatory proposals before publication, a consent decree between the EPA and trade association Growth Energy requires the environment department to release the biofuel quotas by Nov. 30.

Pain at the pump – Every litre of gasoline or diesel Nova Scotians pump into their vehicles contributes 15.5 cents to provincial coffers through the automotive fuel tax, but Finance Minister Allan MacMaster says cutting into that C$260-mln pool of money is not in the cards — and he blames the federal government, CBC reports. Minister MacMaster said PM Justin Trudeau’s government has forbidden the province from reducing any tax that would negate the carbon levy Ottawa is likely to soon impose on the province in place of the cap-and-trade programme the province is scrapping. Nova Scotia doesn’t want a federal carbon tax, but only went halfway to meeting stringent new federal rules to curb GHGs.

SCIENCE & TECH

Finger on the button – Policy analysts and planners will be able to “communicate smarter” about climate change action by using a new online decision-support tool that has been launched today at COP27. Developed by researchers at the University of Leeds and the Met Office, it synthesises the latest scientific evidence on the broader effects of climate change initiatives, enabling decision makers to explain how climate change action can not only help with reducing the physical impacts from global warming but can help achieve wider benefits such as improving air quality, health and wellbeing and boosting employment. “Research in the field of climate science is moving at pace and there is a pressing need for policymakers to have a way of accessing the latest evidence on climate mitigation and adaptation options, particularly the wider benefits they can bring to communities, health services, businesses as well as the risks they may pose,” said Dr Bianca van Bavel, Research Fellow in Climate Change and Health at the Priestley International Centre for Climate at Leeds who is leading the project.

New 2030 SBTi targets – Two companies – sustainable buildings company Holcim and biotech company Novozymes – have updated their 2030 climate targets in line with the Science Based Targets initiative (SBTi) for the 1.5 degrees c global warming target of the Paris Agreement. In its new 2030 targets, Holcim upgraded its target to reduce scope 1 and 2 emissions per ton of cementitious by 25% by 2030 from a 2018 base year. In its new 2030 targets, Holcim upgraded its target to reduce scope 1 and 2 emissions per ton of cementitious by 25% by 2030 from a 2018 base year. Novozymes has committed to reducing absolute scope 1 and 2 GHG emissions by 75% by 2030 from a 2018 base year, and also commits to increasing annual sourcing of renewable electricity from 37% in 2018 to 100% by 2025. The biotech company has committed to reducing absolute scope 1 and 2 GHG emissions by 90% by 2050 from a 2018 base year.  At the end of last year, more than 2,200 companies across 70 countries and 15 industries, representing more than one third ($38 trillion) of the global market capitalization, had approved emission reduction targets or commitments with the SBTi.

AND FINALLY…

What’s in a name? – A University of Exeter researcher is raising awareness of the melting Arctic region and what it means for humanity by asking people to ‘change their names’ for COP27. Gail Whiteman, a Professor in Sustainability at the University of Exeter Business School, is the founder of Arctic Basecamp, a science communications platform that regularly attends high-level events such as the World Economic Forum in Davos and the COPs with the aim of ‘speaking science to power’ about the global risks from Arctic change. Professor Whiteman, who has changed her social media profile for the duration of the conference to ‘Gail Uncontrollable Wildfires Whiteman’, has launched an ArcticRisk Name Generator that allows anyone to type in their name and obtain a new name, replete with climate risks, which can then use on social media and beyond. And attendees of COP27 can visit the name generator through QR codes on banners and digital screens at the conference venue, and the Arctic Basecamp team will supply sustainable name labels.

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