CP Daily: Monday November 14, 2022

Published 01:30 on November 15, 2022  /  Last updated at 01:43 on November 15, 2022  /  Newsletters  /  No Comments

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

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COP27

EXCLUSIVE: Brazil’s most forested states preparing to sell hundreds of millions of carbon credits

At least three of Brazil’s most forested states are preparing to bring what could be hundreds of millions of credits to the global voluntary carbon market, Carbon Pulse has confirmed.

US-China agree to resume formal climate talks, giving hope after lacklustre beginning to second week

The US and China will resume official talks on climate change, after their leaders held a meeting at the G20 Summit in Bali on Monday, raising hopes that the move will spur substantial progress to the so-far sluggish COP27 negotiations in Sharm el-Sheikh.

Turkey to announce a higher emissions goal and peak year in revised NDC -sources

Turkey is set to announce an updated NDC this week, with the government set to pledge to the UNFCCC a higher emissions cut target and for the first time declare when its emissions will peak, sources close to the process told Carbon Pulse on Monday.

Bigger climate finance goal on horizon as $100 bln shortcuts blasted

Several high-level representatives from rich countries noted on Monday the need to mobilise much greater levels of climate finance flows to vulnerable countries, responding to developing country lambasting of the current $100 billion promise as “insufficient” and “broken.”

Three-quarters of OECD on course for 2030 coal exit as corporates shift focus to financing fossil fuels in Africa

Countries that belong to the Organisation for Economic Co-operation and Development (OECD) are set to close three-quarters of their coal power plants by 2030, but research shows that fossil fuel companies mostly based in such nations have begun to ramp up new investment in Africa instead.

As work piles up, UN summit hosts give officials more time

UN COP27 climate talks hosts Egypt have tasked officials to continue negotiations for two more days before ministers take over, maintaining current formations despite slow-going during the first half of the two-week summit on issues such as Article 6 carbon markets.

India publishes long-term climate strategy focusing on demand reduction, low carbon fuels, and coal phase down

India published its long-term climate strategy on Monday that will steer the world’s third biggest emitter towards meeting a net zero target by 2070, focusing on technological solutions such as scaling hydrogen and CCS, reducing household demand, and phasing out its coal production.

Australia back on the global climate stage as it pushes institutions on green finance

Australia is pressuring multilateral finance institutions, such as the World Bank, to unlock climate finance for developing nations, as it seeks to re-establish itself as an international leader on the climate change after almost a decade of policy stubbornness on the world stage.

Workarounds could secure Taiwan access to Paris carbon market, experts say

The Paris Agreement’s carbon trading rulebook offers ways for non-UN member Taiwan to participate in the emerging Article 6 market, though it would require extensive cooperation from seller countries and updates to domestic legislation, according to experts.

Chile, Morocco, and India close in on leading European nations in annual climate change performance index

In a report announced at the UN’s annual climate in Egypt, several countries including Chile, Morocco, and India have emerged as consistently performing well across metrics that consider emissions per capita, policy outlook, and energy use as they edge nearer to leading Scandinavian nations, but no single country was found to be on a 1.5C-aligned pathway.

Roundup for Days 6-8 – Nov. 12-14

It’s the second Monday – Water and Gender Day – at COP27 in Sharm el-Sheikh, and Carbon Pulse rounds up today’s othere news from the summit as well as announcements made over the weekend. Timestamps in local time (EEST, GMT+2).

CP Daily: COP27 Midpoint Special

We’re halfway through COP27 and there’s been no shortage of news and announcements from this year’s UN climate talks in Sharm el-Sheikh.  Here is a recast of the *44 articles* published by Carbon Pulse relating to the first week of the summit.

VOLUNTARY

VCM Report: Nature-based contracts crash lower amid lack of prompt demand

Spot and nearby futures for nature-based solutions continued to sink lower in the past week despite a raft of upbeat announcements of investment in the voluntary carbon market (VCM) at COP27 in Egypt.

Carbon credit ratings firm BeZero Carbon raises $50 mln for global expansion

BeZero Carbon has secured $50 mln in second round funding as it seeks to establish itself as the market leading ratings agency in the global voluntary carbon market.

Canadian VER investor expects “transformational” growth in 2023 after suffering millions in losses

A Canada-based voluntary carbon credit investor on Monday said it is readying for a successful 2023, even as the firm reported several million in losses over the first financial quarter and further uncertainty regarding REDD offset deliveries.

Energy firm to develop framework to source carbon credits from ‘responsibly sourced’ gas

An energy firm announced Friday it will develop a framework for sourcing carbon credits from responsibly sourced gas processes to then be brought to the voluntary carbon market, according to a media release.

AMERICAS 

Producers’ WCI net length nearly evaporates amid large spread trade, speculators move in opposite directions

Compliance entities dropped their California Carbon Allowance (CCA) net length to lows not seen since early April as a massive spread trade occurred, as financials throttled back CCA net length from four-month highs while continuing to add to their RGGI holdings, according to US Commodity Futures Trading Commission (CFTC) data published Monday.

Nodal Exchange, IncubEx launch Washington state carbon futures contract

Commodity trading platform Nodal Exchange and environmental products developer IncubEx will launch a Washington carbon allowance futures contract across several vintages ahead of the newest US cap-and-trade market kicking off next year, the companies announced Monday.

EMEA

EU climate chief touts hydrogen solution for Africa despite NGO warning

EU climate chief Frans Timmermans arrived at COP27 UN climate talks on Monday proclaiming that hydrogen could be a huge opportunity for Africa, despite green groups stating that if the fuel does not come from 100% renewable sources this solution will only worsen the energy and climate crisis.

Euro Markets: EUAs drop early before trading sideways as market awaits midweek Brussels talks

EUAs fell early and then traded in a narrow range on Monday as traders awaited directional signals from a scheduled meeting of lawmakers in Brussels on Wednesday, while energy prices rose after a major North Sea field suffered an outage.

ASIA PACIFIC

ExxonMobil, Pertamina sign $2.5 billion deal to assess CCS hub in Indonesia

ExxonMobil and Indonesian national oil company Pertamina have signed a $2.5 billion agreement to further assess the development of a regional carbon capture and storage hub in Indonesia to sequester CO2 from domestic and international sources, they announced over the weekend.

ADB signs MoU with Indonesian partners for first coal plant retirement plan under transition mechanism

The Asian Development Bank (ADB) has signed a Memorandum of Understanding (MoU) with Indonesian counterparties to explore the early retirement of a coal-fired power station under the bank’s Energy Transition Mechanism (ETM), it announced on Monday.

BAVARDAGE

Carbon Pulse hires first product director, doubles Brussels reporting team amid major growth push

FREE READ – Carbon Pulse has hired its first product director, as the world’s leading carbon markets news service focuses on developing its non-editorial content, while it has also doubled its Brussels-based reporting team amid a major growth push.

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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

EMEA

Fit for 57 – The EU’s climate chief Frans Timmermans arrives in Sharm el-Sheikh for the COP27 summit with news that the EU’s 2030 climate goal “can now be increased to 57%” from the current 55% goal, he told journalists at the end of last week, EurActiv reported. This appears to represent a more aggressive line than the stance member states agreed collectively in the weeks prior, which indicated that the 27-nation bloc intends to update its target from the current goal of a 55% cut in net GHG emissions under 1990 levels, but only after the COP27 session. EU legislators are aiming to complete work by year-end on the mammoth Fit for 55 climate package, designed to recalibrate its policies in line with the 55% goal, which raised the bloc’s target from 40%. They have struck provisional agreements on three of these bills in recent days, including a more ambitious position on a land use (LULUCF) bill that would de-facto raise the EU’s target to 57%. The legislators are aiming to complete work on ETS-related bills in mid-December, with negotiations unaffected by a higher headline number for the overall target.

SEFE haven – Germany moved to nationalise a second major gas company in two months as Berlin seeks to secure supplies for the winter and contain the financial shock from Russia’s squeeze on European energy, Bloomberg reports. The takeover of SEFE Securing Energy for Europe GmbH, the former European trading and supply unit of Gazprom PJSC, is necessary to prevent a collapse that could set off a chain reaction through the economy, forcing factories to shut down and households to go without heat. SEFE is a central distributor for commercial and residential users. The government will take a 100% stake in SEFE – formerly known as Gazprom Germania – and increase its loan to the company to €13.8 bln, the Economy Ministry said Monday. The step was required because SEFE’s over-indebtedness and the threat of imminent insolvency would endanger the security of supply in Germany, the ministry said.

Heat on the treaty – As EU countries including Germany and France look to withdraw from the Energy Charter Treaty, pressure on the Austrian government to follow suit is growing, Euractiv reports. The treaty is an investment protection treaty designed in the 1990s to protect new investments into energy infrastructure in former Soviet countries. As countries look to phase out fossil fuels, companies have used the treaty to sue for damages. On Friday, the German government struck an intragovernment deal that included an exit from the treaty. France, Poland, Spain, and the Netherlands have also announced their intention to withdraw and Italy left the treaty in 2015. Now, opposition parties and their associated trade unions want Austria to follow suit.

Scottish batteries – UK power-storage company Zenobe Energy plans to invest £750 mln in a trio of large battery projects in Scotland to help integrate Britain’s wind power resources into the power grid. The UK expects to more than triple its fleet of offshore wind farms this decade as it cuts carbon emissions and natural gas demand. While Scotland has some of the nation’s best wind energy potential, the electric grid is overloaded and clean power is often wasted rather than going to population centers in southern England. (Bloomberg)

Greenwashed bonds – A joint venture between the tyre giant Michelin and its Indonesian partner Barito Pacific, financed by $95 million worth of green bonds marketed by BNP Paribas, appears to be an extraordinary case of Europe-made greenwashing. An investigation, conducted by Voxeurop and Tempo magazine, shows the limits of  the first industrial project in Asia financed by green bonds: a rubber-tree plantation, covering tens of thousands of hectares on the island of Sumatra, initially deforested by Barito itself. Despite being aware of that, the main actors in the scheme chose to ignore independent reports and warnings from NGOs in order to bankroll a project that was in trouble due to a fall in the price of rubber.

Livid in Lisbon – Hundreds of protesters angry about the climate crisis took to the streets of Lisbon on Saturday, with dozens storming a building where Portugal’s Economy Minister Antonio Costa e Silva was speaking, demanding that the former oil executive resign. Holding banners and chanting slogans, protesters demanded climate action. As some demonstrators broke into the building, the outside shouted: “Out Costa e Silva!” Police officers dragged the protesters out of the building. Portuguese broadcaster RTP reported the minister left the building through the back door. The economy ministry declined to comment. (Euractiv)

AMERICAS

Beneficial emissions budgets – Canada has not decided on whether to implement a cap-and-trade system or beef up its existing ‘backstop’ CO2 pricing approach for the oil and gas sector, though the “predictability” of emissions reductions from a carbon market is a benefit, environment minister Steven Guilbeault told The Globe and Mail. Speaking on the sidelines of COP27 on Monday, Guilbeault said he expects a decision on the oil and gas sector CO2 pricing method to be made by the spring, after a long consultation period, with regulations to be put in place by the end of 2023.

Canada clean fuels cash – Canadian natural resources minister Jonathan Wilkinson on Monday announced that approximately 60 projects have been selected to receive funding under the government’s C$1.5-bln Clean Fuels Fund (CFF). In a press release, the government said these projects represent a first tranche of the highest-ranking applications from last year’s call for proposals and have a total combined value of more than $3.8 bln. The federal government is undertaking negotiations to finalise the terms of funding for each project, and the total federal investment in these projects will be up to C$800 mln. A second tranche of projects, from last year’s call for proposal, is currently being reviewed, with funding decisions expected to be finalised in December.

Falling off track – Edmonton will miss its target to reach net zero GHG emissions by 2050 by a long shot unless significant investments are made into climate actions plans, shows one of the first “carbon budgets” released in Canada, the Globe and Mail reports. The document shows Alberta’s capital city will deplete its allotted 176 Mt CO2 emissions by 2037 instead of 2050. It will also fall eight years short of its corporate target of carbon neutrality by 2040. Edmonton, like many other cities across Canada, declared a climate emergency in 2019. Climate change experts say the carbon budget highlights that the “business as usual” approach to meeting climate goals is failing – and likely in more cities than one – but studies like this can serve as a catalyst for change.

FERC finality – The prospect of US Federal Energy Regulatory Commission Chair Richard Glick losing his job by year’s end could derail policies critical for President Joe Biden’s clean energy and climate agenda, E&E News reports. Conservative Democratic Senator Joe Manchin last week said he is opposed to holding a re-confirmation hearing for Glick by the end of the year, E&E meaning the commission will be made up of two Democrats and two Republicans. Glick saw his term expire in June and must receive Senate approval to stay on. Glick has advanced a slew of regulatory changes seen as key for adding more solar, wind, and batteries to the nation’s power grid. But his efforts to establish a more climate-focused process for reviewing natural gas pipeline projects had been criticised by Republicans and Manchin, who hails from natural gas-rich West Virginia. (Energy Wire) 

Long storage demos – The US Department of Energy on Monday announced nearly $350 mln for emerging Long-Duration Energy Storage (LDES) demonstration projects capable of delivering electricity for 10 to 24 hours or longer to support a low-cost, reliable, carbon-free electric grid. Funded in part by President Joe Biden’s Bipartisan Infrastructure Law, this funding opportunity will advance new renewable energy technologies, enhance the capabilities of customers and communities to integrate grid storage more effectively, increase grid resilience, and expand America’s global leadership in energy storage, the agency said in a press release.

Carbon removal bills – State legislators from California and Massachusetts plan to introduce bills to promote carbon removal to ensure the success of legally binding net zero targets, Argus reports. Josh Becker (D), California state senator and vice-chair of the state’s Joint Committee on Climate Change Policy, and Cynthia Stone Creem (D), Massachusetts state senate majority leader and chair of the Senate Climate Change and Global Warming Committee, will file bills in January to push for carbon removal in their respective states, according to policy announcements made during the COP27 climate summit.

ASIA PACIFIC

FFI, again – Queensland’s push to become a hydrogen superpower has gained serious new momentum with the announcement of a renewable energy “super hub” in the state’s north that will host more than 10 GW of wind and solar projects to produce green hydrogen at an industrial scale, RenewEconomy reports. Plans to develop the north Queensland super hub were announced by the Labor Palaszczuk government on Monday, along with Andrew Forrest’s Fortescue Future Industries and his recently acquired renewables developer Windlab. The government says detailed planning is already underway for the super hub, with the first stage to include Windlab’s proposed 800 MW Prairie wind farm and a 1 GW “Wongalee project,” the details of which were not specified. Despite the lack of detail, the news is big – big enough for FFI chief executive Mark Hutchinson to describe it as a “game changer,” even in the context of that company’s billion-dollar budget and growing global list of giga-scale projects. “For the first time, the north Queensland super hub will provide the quantity of green energy we need to support large-scale green hydrogen production right here in Queensland,” Hutchinson said.

New standards – China has launched a set of management standards for small-scale offset programmes targeting individuals through online platforms, setting benchmarks for regional governments and enterprises to encourage green behaviour, China News reports. Based on a consistent methodology, the standards clearly define individual carbon accounts and green behaviour that can generate credits, according to the report. The work team comprised of experts from more than 30 organizations, including China Beijing Environment Exchange and tech giant Ant Group.

VOLUNTARY

Another SAFe deal – Renewable fuels producer DG Fuels entered into a long-term sustainable aviation fuel (SAF) and carbon credit offtake agreement with an undisclosed investment grade buyer, the company announced on Monday. This offtake agreement, along with previously announced agreements, accounts for 100% of DG Fuels’ 120 mln gal/yr of expected SAF production at its Louisiana plant. HydrogenPro will supply at least 839 MW of green hydrogen for the initial minimum five-year term of combined SAF and carbon credit purchases that exceed $4 bln. Delivery of SAF and carbon credits are expected to begin in late 2026 or early 2027, the press release stated.

Collecting cash – Crypto venture Thallo has raised $2.5 mln from a group of investors as it prepares the launch of its blockchain-based exchange for tokenised carbon credits, it announced Monday. Participants in its latest funding round included Ripple, Arcan, Friendly Trading 2, Allegory, Cerulean Ventures, and Flori Ventures. Thallo plans to launch a trading platform that includes a two-way bridge between blockchain and the legacy carbon market, and last month signed a first-of-its-kind agreement with an offset registry, Colombia’s BioCarbon Registry.

SCIENCE & TECH

Green hydro hockey stick – Green hydrogen is entering hockey stick territory: the point where it sees a sudden and sharp turn upward, BloombergNEF reports. A boom in the supply of and demand for the environment-friendly gas will power a whopping 120-fold global expansion in key equipment used to split water and produce hydrogen. Installations of electrolysers are set to grow from 2 GW currently to 242 GW over the next eight years, with companies like Longi Green Technology, John Cockerill, Plug Power, ITM Power, and ThyssenKrupp leading the manufacturing. Cumulatively, around $130 bln will be spent on electrolysers between now and 2030.

AND FINALLY…

Bezos bucks – One of the richest men in the world, Amazon-founder Jeff Bezos, plans to give away the majority of his $124 bln fortune during his lifetime, with the aim of fighting climate change and “unifying humanity”, he told CNN. In an interview alongside his partner, the journalist-turned-philanthropist Lauren Sanchez, Bezos said the couple is “building the capacity to be able to give away this money”. The 58-year-old said he would devote the bulk of his wealth to fighting climate change and supporting people who can unify humanity in the face of deep social and political divisions. Asked whether he intends to donate the majority of his wealth within his lifetime, Bezos said: “Yeah, I do.” He did not set a specific target.

Bonus edition … Decarbonise Dwight – The actor formerly known as Rainn Wilson, who came to fame with his role of Dwight on the US version of the television series “The Office”, has changed his name to Rainnfall Heat Wave Extreme Winter Wilson, highlighting the need for action on climate change. Wilson made the announcement on a Twitter video post last week while climate negotiations persist at COP27. Wilson, a board member of Arctic Basecamp, changed his name via a website called Arctic Risk Name Generator, which CP Daily featured last week. The actor said his name change is not a joke. (NBC)

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