CP Daily: Tuesday November 22, 2022

Published 01:00 on November 23, 2022  /  Last updated at 01:04 on November 23, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

EU negotiators strike provisional deal on shipping in the EU ETS -MEP

EU negotiators have agreed a unified position on how shipping will be added to the EU ETS, seeking to add the sector’s emissions gradually over 2024-26 rather than immediately as the Parliament had initially wanted, an MEP involved in the talks said on Tuesday.

VOLUNTARY

ANALYSIS: Overwhelming loss of market confidence in REDD in 2022 as uncertainty bites demand

Forestry conservation projects, often battered by criticism of over crediting, have crashed out of favour with corporates amid deepening economic gloom, leading to a massive 65% drop in the number of credits retired this year compared to last.

Climeworks signs agreement with US firm to develop 1 Mt/year DAC and storage hub

Swiss direct air capture (DAC) technology firm Climeworks has signed a Memorandum of Understanding (MoU) with a US CO2 sequestration company to develop a DAC and storage hub in Louisiana that would permanently remove up to 1 million tonnes of CO2 per year by 2030, it has announced.

Ratings firm upholds REDD project score after lengthy deliberation

A carbon credit ratings agency has reaffirmed its score for a lowly-rated REDD project in South America, upholding the rating six months after first flagging it for a potential change.

Carbon finance firm partners with Danish Red Cross for Southeast Asian blue carbon projects

A carbon finance firm has signed a letter of intent with the Danish Red Cross to look into developing blue carbon projects in Southeast Asia.

ASIA PACIFIC

FEATURE: Australia wants to host COP31 with the Pacific, but its actions at home and abroad may complicate things

Australia has been adamant that it wants to host COP31 in partnership with Pacific Island nations in 2026, but the country’s continuing fossil fuel subsidies and its aim to use carbon credits generated in the region to offset those developments could stymie partnership building efforts, a diplomatic expert has said.

Singapore-based tech company raises $1.5 mln in funding round for carbon trading marketplace

A Singapore-based climate tech company has closed a pre-seed fundraising round at $1.5 million, and will use the capital to scale its operations in Southeast Asia and accelerate the launch of a blockchain-based carbon trading marketplace in early 2023, it announced on Tuesday.

Govt commissioned report finds strengths and weaknesses in four ACCU methods, calls for substantial overhaul

An Australian government-commissioned report on four offset methodologies, currently subject to an independent review, has found each need to be overhauled to ensure their integrity in relation to additionality and permanence.

AMERICAS

Atlantic Canadian provinces to face later ‘backstop’ CO2 fuel levy in 2023, as subnational large emitter programmes approved

The Canadian government on Tuesday announced it will delay implementation of the federal CO2 levy on fossil fuels next year on three of the four Atlantic provinces, as all subnational output-based systems proved successful in meeting the requirements of Ottawa’s post-2022 carbon pricing benchmark.

RGGI emitters increase share of allowance holdings in Q3, but 2022 compliance shortfall expands

RGGI compliance entities continued to accumulate CO2 allowances through the third quarter, according to a market report, but not enough to keep pace with the overall emission levels for the first nine months of the year across the 11-state market.

EMEA

Euro Markets: EUAs trade in narrow band as market continues to wait for signals

EUAs ended the day slightly lower in thin trading, with the market moving in one of the narrowest ranges seen this year as traders continued to seek out a trend, while energy prices rose for a third day as colder weather and concerns over Russian gas supplies through Ukraine continued to buoy the markets.

COMMENT

The opaqueness of the engineered carbon removal market is stunting its growth

If the engineered carbon removal industry is to show all the naysayers and propel towards gigatonne scale, it needs to double down on trust and transparency, writes Ted Christie-Miller of BeZero Carbon.

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CONFERENCE

Asia’s largest carbon markets event is back! The International Emissions Trading Association (IETA) looks forward to welcoming delegates to its flagship Asia Climate Summit (ACS) 2022, being held Dec. 6-8 at the Marina Bay Sands Convention Center in Singapore. Everything you need to know about carbon markets in Asia in 3 days! Held in a hybrid format with both in-person and virtual offerings, the programme brings together leading private sector experts and policymakers from both the carbon and energy world to discuss the current state of play, and what’s next for compliance and voluntary markets. An ideal forum to take stock of the world’s evolving net zero landscape and clean growth opportunities. Organised by IETA, in collaboration with ICAP and the IEA.

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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

Have you ever seen the rain (data)? – Scientists warn that a lack of weather data in much of Africa means that loss and damage funds can not be dependent on a disaster being proven to be caused by climate change. A shortage of weather monitoring stations in places like West Africa’s Sahel region make it difficult to prove a disaster was caused by climate change. But that shouldn’t stop people affected by disasters like droughts from getting money to rebuild their lives when their livestock die, scientists told Climate Home. At COP27 in Egypt last weekend, countries agreed to establish a fund to support climate victims and tasked a transitional committee with working out the details by COP28 in Dubai next year. This committee will work out how to determine under what circumstances rich countries should pay out funds to developing ones for climate disasters. Last week, scientists from World Weather Attribution said they could not work out climate change’s role as in this year’s food crisis in the Central Sahel region of north-west Africa. Erratic rainfall in 2021 triggered a severe food crisis, leaving 9.7 mln people in Burkina Faso, Mali, and Niger facing hunger. Scientists used three observational data sets and three indices of wet season characteristics. These were how much it rained in June, when it started raining and how long it rained for. They concluded that they “could not detect significant trends or a climate change influence in the 2021 rainy season.” But they said this could be due to uncertainties in the observational data and problems when working out the climate models for drought, with part of the problem due to a lack of weather stations in Africa.

EMEA

Gas cap – The European Commission on Tuesday proposed introducing a gas price cap for a year from Jan. 1 at €275/MWh, according to EU energy commissioner Kadri Simson. The Commission hopes the ceiling will help member states curb energy prices for homes and businesses that have reached record highs this year following Russia’s invasion of Ukraine, leading to inflation and a cost of living squeeze. Energy ministers from the bloc’s 27 member countries will debate the proposals on Thursday.

Twin deal – Industrial gases company Air Liquide and TotalEnergies plan to produce low-carbon hydrogen at the Grandpuits site in France, the pair said on Tuesday, as France looks to increase its sources of renewable energy, Reuters reports. France and other European countries are aiming to build up their renewable energy resources with Russian energy supplies hit as a result of sanctions against Moscow following its invasion of Ukraine. French President Emmanuel Macron said in September he would cut down on bureaucractic processes to get more French renewable energy projects off the ground. Air Liquide will invest more than $133 mln in the construction and operation of a new facility producing hydrogen, while TotalEnergies’ biorefinery will use the unit’s hydrogen to produce sustainable aviation fuel, the companies said in a joint statement.

Wind and solar – Germany is examining the introduction of state guarantees for investments in wind and solar power to improve the country’s industrial potential, economy minister Robert Habeck has said. To promote the energy transition and scale up renewable power capacity, state support could include production or purchase guarantees, which can partially offset uncertainties regarding project permits, the Green Party politician said. “It might make sense for the state to step in with a guarantee and say ‘you can order before the approval is there’, then the ramp-up of the industry will be correspondingly faster,” Habeck said following a summit with representatives from the renewable power industry and grid operators. In addition to financial guarantees, structural reforms to accelerate planning approval are needed both nationally and at the European level, Habeck added. The introduction of CO2 footprints for renewable energy components is also being discussed with the EU. This is supposed to support local and decentralised power production, and implies that wind turbines or solar panels would not have to be transported halfway around the world, Habeck said. (Clean Energy Wire)

Greener fuel for cars – German fuel supplier Aral, owned by BP is piloting two new fuels – Aral Futura Super 95 and Aral Futura Diesel – that claim to reduce CO2 emissions by at least 25% compared to standard DIN EN 590 diesel and DIN EN 228 gasoline, and contain at least 30% of high-quality renewable components, the company announced. They are now publicly available for customers at one Aral station in Berlin and another in Düsseldorf. Aral Futura Fuels can be used without any modification to their vehicle, provided it can run on E10 or B7 fuel.

Money on trees – Commercial forestry values in the UK have escalated by at least 15% in the past year, according to an industry report launched Tuesday. Increasing demand for timber assets driven by net zero ambitions contributed to rising prices in a market characterised by fewer, smaller, but higher value sales in 2022, as Scotland “spearheaded the charge for economic forestry” with an 84% share of UK commercial forestry sales. Meanwhile, the land available for natural capital projects including native afforestation, peatland restoration and rewilding also trebled over the past year, a sector led by England. The UK Forest Market Report 2022, the most comprehensive review of the market, was produced by Tilhill – a UK woodland creation, forest management, and timber harvesting company – and specialist forestry firm Goldcrest Land & Forestry Group. The report estimated the market was worth well over £200 mln – taking into account a considerable number of off-market sales on top of the £195 mln monitored by the two firms. The focus on nature-based solutions beyond timber revealed far more land suitable for these projects, swelling to £80.7 mln (from £26.4 mln in 2021) based on the data monitored.

ASIA PACIFIC

Tell us what you really think – Andrew Forrest, the Australian billionaire iron ore miner who is now the country’s most vocal green energy supporter, has described fossil fuels as a “joke of history,” RenewEconomy reports. In a speech to the annual general meeting of Fortescue Metals, Forrest said continued use of fossil fuels would simply increase costs, and add to pollution and accelerate climate change. “Fossil fuels are a joke of history, the more you use it, the more expensive it becomes,” Forrest said. “What government can’t work that out?” Forrest’s comments continue his increasingly strident attacks on the fossil fuel industry, and the industrial companies that he says are too slow to embrace the green energy transition, and are “downright lazy” or protecting vested interests. He also criticised them for hiding behind “net zero” pledges. “You have big oil companies talking right now today, saying we can go net zero per barrel of oil. That means no change. That means ripping off the carbon credit market, or creating fakes. I mean real zero, stopping pollution by 2030. Real zero means no oil, no gas, no diesel, no offsets. Offsets must only be used as a temporary measure while the technology or innovation required to completely decarbonise evades us, but it’s coming.” Forrest re-iterated Fortescue’s plans to save 3 Mt of “poisonous” Co2 emissions a year by 2030 with its own “zero emissions plan”. It plans to spend A$6.2 bln to reach that goal.

Scaling seaweed – Blue Carbon Lab has had a peer reviewed paper published in Frontiers, exploring the ecological, technical, economic, and governance feasibilities of growing seaweed in the ocean for carbon sequestration. The study said under ideal conditions, an area of 400,00 sq. km, or 16.4 bln biodegradable rafts could sequester 1 GtCO2. However it said quantifying carbon sequestration from ocean afforestation remains elusive given several outstanding oceanic biogeochemical considerations. Ocean afforestation carries complex risks to marine ecosystems, such as the impact on animals and plants that exist on the ocean floor. Governance, and social challenges also exist, such as the legality of operation in relation to ocean treaties, the report summarised. “The concept of ocean afforestation is still in its infancy, and while there are large research gaps, further investment into research should be given before the concept can be adequately compared against the suite of potential ocean-based climate change mitigation strategies,” it said.

Down with gas – For decades, “natural gas” has sold itself to families as the fastest, most-efficient way to cook. But now there’s a battle for your kitchen stove, and a push to get you to embrace electric for your health and for the planet, ABC reports. A coalition of chefs, doctors, climate scientists, and real estate developers have joined forces to push back against the gas industry’s marketing, with the aim of removing gas from kitchens worldwide. Campaigners say in addition to heating the climate, gas stoves contribute to asthma and other health conditions. And that coalition thinks that if they can rid kitchens of gas, they’ll rid homes of the fossil fuel altogether. The Global Cooksafe Coalition is being launched in Sydney today and announcing partnerships with developers Lendlease and GPT, who have agreed to stop putting any gas in new buildings by 2030 and to retrofit existing buildings by 2040. “Our view is that the future is all electric, whether it’s electric vehicles, whether it’s cooking, whether it’s space heating,” said Davina Rooney, chief executive of the Green Building Council, and one of the founders of the Global Cooksafe Coalition.

Big LNG deal  Sinopec, China’s largest oil refiner, has secured one of the biggest-ever liquefied natural gas deals, signing a 27-year agreement to purchase 4 Mt a year of the fuel from QatarEnergy, the Financial Times reports. The agreement follows a shorter 10-year LNG purchase arrangement signed in 2021 between QatarEnergy and Guangdong Energy Group Natural Gas Company, according to the report. Chinese buyers were more confident about the longer-term need for LNG, while Europeans were uncertain about their requirements after 2025 due to the energy transition and high prices leading to lower demand, a McKinsey survey has found.

New research hub – The government of Guangxi Zhuang autonomous region, one of China’s most forest-rich areas, has established a research centre for the development of forestry carbon sinks, according to China News. The new research hub will focus on a few key areas, including forests, grassland, and wetland ecosystems, for policymakers to explore the potential of nature-based solutions. This came after a Guangxi-based forestry group in August signed a cooperation agreement with PetroChina for a deal that involves the pre-order of 5 mln offset credits.

AMERICAS

Alaska to California – A new lawsuit threatens to upend a landmark, four-decade-old revenue sharing pact that’s guided the distribution of more than $2 bln among Alaska’s Native corporations. The litigation stems from the 121-page, 1982 settlement agreement that has long defused financial disputes between the 12 regional Native corporations: The deal successfully outlined how the companies should share income from exploiting resources like forests, but did not specifically contemplate what should happen with money earned by preserving them. The new lawsuit, filed last month, hinges on a major new revenue stream that has generated more than $100 mln for three of the regional corporations since 2016. Juneau-based Sealaska Corp., Copper River Valley-based Ahtna Inc. and Gulf of Alaska-area Chugach Alaska Corp. have all put tracts of timber holdings into California’s compliance offset market, which allow forest owners to get paid for keeping lands unharvested for 100 years. The plaintiffs argue that the 1982 agreement, and a 1971 federal law – the Alaska Native Claims Settlement Act, or ANCSA – that underpins it, require 70% of those carbon credit revenues to be shared among the rest of the regional corporations. The 1982 agreement calls for revenue sharing disputes to be handled by a private, three-member arbitration panel. But after a unanimous panel decision in July that found the carbon credit revenues not subject to sharing, the three plaintiffs – Nome-based Bering Straits Native Corp., Kotzebue-based NANA Regional Corp. and Bethel-based Calista Corp. – appealed their case to the state court system. They’re asking Anchorage Superior Court Judge Jack McKenna to either award them a portion of the carbon credits money under the 1982 agreement — or, if he rules that the pact doesn’t apply, to invalidate it altogether. (Anchorage Daily News)

Coal stands – US coal production totalled 153.9 Mt in the third quarter, up 3.8% YoY and 5.6% higher than Q2, S&P Global Market Intelligence reports. Coal sector employment averaged 43,755 workers in Q3, expanding by 8.4% YoY. Gains in coal mine production and employee counts compared to 2021 levels were seen across Northern Appalachia, Central Appalachia, and the Illinois Basin. Sector employee counts increased by the most in the Illinois Basin – up 15% YoY, followed by Central Appalachia at a 10.4% YoY gain, and Northern Appalachia up by 4.4% YoY. Both coal production and employment are down compared to levels seen through most of the 2010s with the increasing use of natural gas and renewables, the report noted.

Bulking up SAF – Neste has used barges for the first time to deliver over 500,000 gal (1,500 Mt) of sustainable aviation fuel (SAF) as a ready-made blend fuel to Los Angeles International Airport (LAX), the Finnish refiner announced.  The delivery was made in cooperation with LAXFUEL, a consortium of airlines operating at the US airport. Smaller deliveries of SAF have been used for flights out of LAX in the past, but those have been in smaller and infrequent quantities brought in by trucks. This partnership marks the first time that SAF is being delivered as a ready-made fuel blend into the existing fuelling infrastructure in large volumes at LAX. Neste’s SAF is produced from 100% sustainably sourced renewable waste and residue raw materials, including used cooking oil and animal fat waste, reduces GHG emissions by up to 80% over the fuel’s life cycle compared to using fossil jet fuel. SAF is blended with conventional jet fuel to work with existing fuelling infrastructure and aircraft engines.

VOLUNTARY

A billion for a billion – Morgan Stanley Investment Management (MSIM) said on Monday it had launched a new $1 bln private equity strategy to invest in companies which will remove 1 Bt of CO2e from the atmosphere by 2050 or prevent that amount entering the atmosphere. The investments in North American and European companies will focus on the mobility, power, sustainable food and agriculture sectors, and circular economy. Investments are expected to deliver both financial returns and positive environmental impact, MSIM said. MSIM said it would also tie some of the 1GT investment team’s compensation to the emissions performance of underlying investments. (Reuters)

Cooking in Rwanda – Energy trading company BB Energy announced on Tuesday that it would distribute 200,000 cookstoves in rural communities in Rwanda. The cookstoves aim to replace the traditional three-stone fire cooking method, reducing emissions such as carbon monoxide as well as curbing deforestation. The project has been submitted for potential carbon offset issuance under Verra’s Verified Carbon Standard.

SCIENCE & TECH

Far above the world – Is it possible to track CO2 emissions and emission reductions from space? New research shows that it is, according to The Conversation, in an article written by a research scientist who also published the work in a scientific journal. A global network of ground-based CO2 measurements began in 1957 and now consists of over 100 stations around the world. Accurate and precise measurements from these stations have revealed a lot about changes in global atmospheric CO2 and the earth’s overall carbon cycle, but the stations can’t be placed everywhere on Earth. Satellites, however, can observe the entire planet. Those that measure CO2 in the lower atmosphere near earth’s surface (where CO2 emissions and CO2 uptake by plants happens) first began making measurements in 2002. By using two NASA satellites, OCO-2 and OCO-3, the research showed that satellite observations can track changes in facility-level CO2 emissions (this particular study analysed CO2 from the Belchatow coal plant in Poland). This means that satellites can be used to verify (or refute) reported CO2 emission reductions that result from climate change mitigation — like mandated efficiency improvements, carbon capture and storage technology, etc, according to the report.

AND FINALLY…

Go kick rocks – A climate fund founded by Bill Gates is investing in technology that uses surges of electricity to shatter rocks and mineral ores in a bid to reduce energy usage and CO2 emissions at mines. A European fund tied to Gates’ Breakthrough Energy Ventures invested €12 mln ($12.3 mln) in the I-ROX pulsed-power venture with Robert Friedland’s I-Pulse Inc. The technology is based on short, high-intensity bursts of power to streamline crushing and grinding processes that today make up the most energy-intensive and expensive part of mining. That would help producers of metals like copper and nickel achieve carbon-reduction targets, thereby boosting industry efforts to gain acceptance for expansions to meet growing demand in the transition away from fossil fuels. (Bloomberg)

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