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TOP STORY
ANALYSIS: Scope 3 emissions could be fertile ground for new “contribution” credits
Newly defined carbon credits under the UN’s Paris Agreement could serve an important role in corporates’ net zero carbon claims, according to some experts and government representatives, even though these credits are not designed as traditional “offsets.”
AMERICAS
WCI auction settles at lowest level of 2022 in Q4, as advance sale dips further
The California-Quebec November current vintage auction settled towards the bottom of traders’ expectations, but the advance auction price dropped much lower than the prior two sales, according to results published Wednesday.
California offset issuances in November decline, continuing lag from year-ago levels
Compliance offsets issued by California regulator ARB for the two-weeks that began in mid-November were the third-lowest of all the reporting periods for the year, continuing the trend of 2022 issuances significantly trailing year-ago levels, according to government data published Wednesday.
EMEA
EFRAG delivers draft ESG and climate disclosure rules to European Commission
The European Financial Reporting Advisory Group (EFRAG) delivered the first set of its draft ESG and climate disclosure requirements to the European Commission on Tuesday, with the technical advisor modifying the rules to best align with public feedback.
Euro Markets: EUAs get a lift as buyers attempt to breach technical level
EUAs caught a big lift from a strong daily auction to record an increase of as much as 4.1% on Wednesday as traders appeared to cover short positions and even build new length, while energy prices extended their rally for a fourth day on a combination of fundamental and regulatory news.
Lawmakers want the EU’s future budget income to include ETS, CBAM
Members of the European Parliament voted on Wednesday to pave the way for the EU’s central budget to be substantially fed by a new basket of revenue streams based on the ETS, the carbon border adjustment mechanism (CBAM), and a share of the reallocated profits of large multinational companies.
ASIA PACIFIC
Australian alumina refining pathway to net zero needs low emissions technology kickstart -report
Australia’s emissions-intensive alumina refining sector has a credible pathway to reach net zero emissions by 2050, although key technologies to achieve this are still at varying stages of technological and commercial maturity and will require significant investment to make an impact, a report commissioned by an Australian government agency released on Friday has concluded.
Australia Market Roundup: Govt invests A$500 mln towards clean energy tech, releases “sobering” climate report, ACCU issuance flat
The Australian government has committed A$500 million to its green bank to invest in project and technologies that will reduce emissions, as a new report has found the nations climate will get hotter, wetter, and drier as a result of worsening climate conditions, while Australian carbon credit issuance is flat.
China tackles energy supply disruptions with increased gas imports -report
Energy security concerns have pushed China to secure supply from diverse sources and reduce reliance on expensive spot natural gas purchases, a move reflecting the country’s increased focus on both fossil fuel-based energy security and emissions reductions amid economic headwinds, a report has found.
VOLUNTARY
Canadian tech company offers C$10 mln in VER convertible notes
A Canadian green technology company on Tuesday announced a private placement for C$10 million ($7.5 mln) in notes that will be convertible into VERs from its equipment to reduce vehicle emissions.
British Airways adds carbon removals to its voluntary passenger programme
IAG’s British Airways has added an option for its passengers to buy CO2 removals credits to address their flight emissions in addition to its conventional carbon credit and sustainable aviation fuel (SAF) offerings.
CORRECTION – Ratings firm upholds REDD project score after further updates
(Corrects Tuesday’s article on the country of two CAR projects that had erroneously said India, clarifies the process of review on a Latin American REDD project)
COMMENT
COP27 delivers a clear signal to the voluntary carbon market
The COP27 UN climate talks gave a clear signal that ”mitigation contribution” units cannot be used for offset claims, the next step is for all voluntary market participants to finally accept this, writes Niklas Kaskeala of carbon credit retailer Compensate.
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Tenders
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Premium job listings
- Market Analyst, Global Carbon Markets, Climate Finance Partners (CLIFI) – Remote
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- Forest Carbon Lead (Technical/Expert), Compassionate Carbon – Remote
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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
Cement CCS breakthrough – Cement giant Cemex has announced a raft of new carbon capture projects in Europe and North America, Global Cement reports. When commissioned, they will bring its total installed CO2 capture capacity to over 3 mln tonnes per year, according to a Cemex press release. The projects consist of three front-end engineering (FEED) studies to scale installations of Australia-based Leilac’s direct separation technology at Cemex cement plants in Germany, Poland, and the US; a fourth FEED study for 95% capture installation at the Balcones, Texas, cement plant using RTI International’s solvent capture technology; and a development partnership for the cement industry’s most comprehensive carbon capture, utilisation and storage (CCUS) study that will focus on eight cement plants in Europe, Mexico, and the US, the report said.
Maritime workaround – Shipping companies could exploit loopholes in upcoming UN IMO Carbon Intensity Indicator regulations, which will require them to grade the carbon intensity of individual ships from next year, industry insiders have warned. Some executives in the sector have highlighted various weaknesses in the rules, with others accusing certain states of resisting tougher measures. Based on historic emissions data, some 25% of container ships are set to receive the lowest rating as well as 15% of bulk and crude tankers, according to estimates produced by industry group Bimco and shared with the FT. But with the IMO measures weeks away from being enforced, industry leaders said companies could find workarounds, rather than make meaningful progress towards decarbonisation.
What to wear – The richest consumers in countries like the UK, US, and Japan must only buy an average of five new fashion garments per year by 2030 to keep the 1.5C target alive, a new report finds. It warns that without urgent action from government, industry, and consumers, fashion could take up to a quarter of the global carbon budget by 2050. “Fashion’s climate impact is far higher in wealthier countries like the UK, where the richest 20% need to reduce their carbon footprint from fashion consumption by 83% by 2030 to be aligned with the 1.5C temperature goal of the Paris Agreement,” reads the report, authored by the Hot or Cool Institute and published jointly with the Rapid Transition Alliance. “On average, the fashion consumption of the richest 20% emits 20 times the emissions of the poorest 20%, although this varies substantially across countries.” The report adds that retail mega-events like Black Friday are “totally incompatible with our global climate commitments”. The authors estimate that by 2030, emissions from fashion are expected to rise by almost 50%, and by then the global fashion industry will be emitting the same amount of emissions released by India in 2021, a nation of around 1.4 bln people and the world’s third largest emitter.
EMEA
Coal coffers – South Africa is in talks with several other countries to help cut its reliance from coal, Environment Minister Barbara Creecy said, in addition to the $8.5 bln secured at COP26 in Glasgow from the US, Japan, UK, Germany and the EU, as part of a Just Energy Transition (JET) Partnership, to find a quick transition away from the fossil fuel, Bloomberg reports. South Africa, the world’s 13th-biggest source of climate-warming gases, has estimated the cost of shutting down its fleet of dilapidated coal-fired power plants will cost $87 bln. In addition to electricity, South Africa, as part of its coal transition plan, is trying to boost investment in its nascent electric vehicle and green hydrogen industries. The US and Japan, on Nov. 15, announced a similar JET deal for Indonesia at a cost of $20 bln while Vietnam may reportedly secure as much as $14 bln.
Tap the brakes – The gas and electricity “price brakes” that Germany’s government plans to finance with scooping up windfall profits made by power producers during the energy crisis endanger the country’s decarbonisation targets, energy industry groups have warned. The draft plan tabled by the economy and climate ministry risked to “pull the rug” from under renewable power investors’ feet and “intentionally and without any need threatens the energy transition’s achievements,” said renewable power lobby group BEE. The plan would disadvantage renewable power producers vis-à-vis fossil energy companies using hard coal or natural gas, the group argued, predicting that many companies would go to court if the government adopts the draft and gets parliament’s approval in December as planned. The government plans to introduce caps on gas and electricity prices by Mar. 2023 that take effect retroactively from January. The cap is meant to benefit households and small businesses, and would put a discount on a consumption level equalling 80% of last year’s use, while every additional kWh would have to be paid at current market rates. Industrial producers will receive a discount for 70% of their 2021 consumption level. To finance the measure, the government plans to tap into its €200-bln “defence shield” for the energy crisis, and also scoop up profits of power producers retroactively from Sep. 2022, Reuters reported. The scheme is supposed to remain in place until at least June 2023, and possibly until the end of 2024. (Clean Energy Wire)
Love LIFE – The Commission has approved more than €380 mln of funding for 168 new projects across Europe under the LIFE Programme for the environment and climate action. At the heart of the European Green Deal, LIFE projects can help the EU become climate-neutral by 2050 and reach climate, energy and environmental goals, it said. They support biodiversity, nature restoration and a circular economy while contributing to the clean energy transition across the continent. The funding is a 27% increase on last year’s funding, and will mobilise a total investment of over €562 mln. Projects from almost all EU countries will benefit from this EU funding in four themes: nature and biodiversity, circular economy and quality of life, climate change mitigation and adaptation, and the clean energy transition.
Swiss accounting – Large Swiss companies will be required to implement the recommendations of the internationally recognized Task Force on Climate-related Financial Disclosures (TCFD), and publish a report on climate issues next year, the Federal Council of Switzerland has announced. The new law, which will come into force on Jan 1, will be applicable to companies open to the public, banks and insurance companies with 500 or more employees, whose balance sheet total is equal to or greater than 20 million Swiss francs and whose turnover exceeds 40 million Swiss francs. Companies will need to report on the financial risks it incurs from its climate-related activities, the effects it has on the climate, as well as its target and plan to cut direct and indirect greenhouse gases.
Blackmail – Moldova said on Wednesday that Russia had sent no signals that it would stop supplying it with gas next month but that it was ready for any scenario because Moscow was using energy resources as “a tool of blackmail”, Euractiv reports. State-run Russian gas company Gazprom accused Ukraine on Tuesday of keeping gas supplies destined for Moldova, and that it could from Nov. 28 start reducing gas supplies to Moldova that pass through Ukraine. Ukraine, which has been invaded by Russia, has denied withholding Russian gas meant for Moldova. Chisinau, which is dependent on Russia for its gas, said on Wednesday it would pay for any gas deliveries. “There are no signals that Russia will stop supplying gas to Moldova in December. But the government is ready for any scenario, as Russia continues to use energy resources as a tool of blackmail,” Prime Minister Natalia Gavrilita told local television.
Slovenian windfall – The Slovenian government unveiled a draft law that would impose a windfall tax on energy companies in 2022 and 2023 to subsidise renewables and finance measures to reduce electricity demand during peak times, Euractiv reports. Under the proposal, any revenue over €180/MWh of electricity produced in Slovenia and sold on the wholesale market would be channelled into the national budget. Producers whose production costs exceed €180/MWh would be exempted, as would electricity produced using natural gas and small installations with a peak output of under 500 kW. A windfall tax would also be imposed on companies that produce and process crude oil and natural gas in Slovenia, making them pay a “solidarity charge” for 2022 and 2023, defined as the difference between corporate profit in 2022 or 2023 and average profit in 2018-2021 multiplied by a factor of 1.2. The vast majority of primary energy players in Slovenia, which includes almost the entire electricity sector, are partially or wholly owned by the state. The windfall tax is attached to a series of measures designed to reduce demand at peak times by at least 5% during winter.
ASIA PACIFIC
Case closed — The New Zealand High Court has confirmed the legality of advice provided to the government by the independent Climate Change Commission (CCC) about its NDCs and its first three emissions budget. A case was brought against the advice by Lawyers for Climate Action NZ and concerned the calculations and accounting methods the CCC used to formulate its advice. A statement from the legal group noted that Justice Mallon accepted its key concern that neither the NDC Advice nor the Budgets Advice put NZ on track to reduce domestic net emissions by 2030 as per IPCC global pathways. However the judgement also noted that the CCC “did not make a serious logical error that led to an irrational recommendation”. “It meant that its NDC Advice on consistency with the 1.5C global effort was not based entirely on a truly mathematical comparison with the IPCC 1.5C global pathways.,” the judgement said. The group in a statement said “While we are disappointed with the outcome, there are many helpful points in the judgment. We will be carefully reviewing it and considering whether to appeal”. Climate Change and Environment Minister James Shaw released a statement saying he did not believe the proceedings were designed to slow climate action. “Rather, it was a way of testing the system, making sure we had the settings right, and I think that’s actually very healthy”. He said the case had highlighted some “potential points of confusion” about the way the government set its targets, adding that it would be something he would look into, regardless of the outcome of the case.
Hydrogen finance – Capping off a big month for ReNu Energy, the company closed its capital raise oversubscribed, collecting A$4.5 million before costs through the issue of 75 million new shares, PVmagazine reports. The newly raised capital, the ASX-listed ReNu said, will go towards its Tasmanian and Indonesian green hydrogen projects – which it is primarily pursuing through its wholly owned subsidiary Countrywide Hydrogen, which it acquired in February. In Tasmania, ReNu is moving to build a modest 5 MW facility. It also recently announced its plan to work with Australian Pacific Airports to develop another 5 MW facility at Launceston airport. Also in November, ReNu announced its memorandum of understanding with Anantara Energy, a partnership between Singapore-based independent power producer Quantum Power Asia and German PV developer ib vogt, to investigate the feasibility of developing a large-scale green hydrogen production facility in Indonesia’s Riau archipelago. The plan features a 10 MW electrolyser supported by at least 100 MW of solar.
Nuclear on the moon – China is developing a new system that uses nuclear energy to address its moon station’s long-term, high-power energy demands, though no technical details about the nuclear reactor being built were revealed, South China Morning Post reports. The basic configuration of the moon station will comprise a lander, a hopper and an orbiter as well as a rover that will be charged with nuclear energy, according to the report. The station is expected to be complete by 2028.
New listing – Huadian New Energy, the renewable energy unit of China Huadian, one of China’s top five state-owned power groups, aims to raise about 30 bln yuan (US$4.2 bln) via a listing on the Shanghai Stock Exchange, according to a prospectus. The company, with an installed electricity capacity of around 27 GW, plans to use the funds to expand its solar and wind capacity across the country. It posted operating revenue of 21.6 bln yuan for 2021, the prospectus shows.
Compensation through forestry – A Shanghai-based company guilty of illegal logging has been asked to buy VCS units on Shanghai Environment and Energy Exchange, the first of its kind on the local bourse, according to the Shanghai Observer. The wrongdoer, accused of logging 201 trees, has agreed to buy 187 carbon credits generated from a forestry project in Inner Mongolia, the report said. Similar compensation cases have emerged in some Chinese provinces, such as Fujian and Guizhou, where lawbreakers who are involved in criminal activities that indirectly cause harm to forests are also subject to the carbon sink-based compensation mechanism.
AMERICAS
Univestment – The Canadian federal government is investing C$58 mln from the Climate Action and Awareness Fund into 24 projects from 12 universities and one NGO that aim to advance the science and technology behind fighting climate change, it said in a press release Wednesday. Out of the total amount, the University of Waterloo will receive C$16 mln to study how to reduce emissions at the municipal level and monitor landfill emissions. Other recipients including the University of Toronto, Concordia University, the University of Calgary, McGill University, Dalhousie University, and Carleton University, will all study nature-based solutions like wetlands.
BC does it – British Columbia has led the way in the uptake of zero-emission vehicles in North America, increased the number of public charging stations in the province by 50% in one year, and eliminated the largest fossil fuel subsidy in the province – just three key areas where progress has been made on climate action, the government claimed in the 2022 Climate Change Accountability Report released Wednesday. The report provides progress updates on a wide range of CleanBC programs to reduce emissions, build a cleaner economy and prepare for the impacts of climate change over the 2021-22 fiscal period. It confirms that, despite some technical changes from the federal government’s national emissions inventory and modelling updates, B.C. is largely projected to meet its 2030 target. The accountability report provides new data on progress made across sectors like transportation, industry, buildings and communities, and the public service.
SCIENCE & TECH
Inject it – Efforts to build the infrastructure for CO2 transport and storage are continuing with Equinor and Norwegian design firm Breeze Ship Design launching a collaboration to develop a CO2 carrier with direct offshore injection capabilities, Maritime Executive reports. Other efforts so far have focused on CO2 capture and transport moving the material for storage to a processing plant as opposed to direct injection. “Equinor believes that the direct injection concept is an interesting way to implement ship-based transport and injection solutions for CO2. We need to make sure the technical risks are reduced to an acceptable level and that the business case is sound,” said Elisabeth Birkeland, VP for carbon capture and storage solutions at Equinor. Equinor and Breeze envision a vessel that will operate in Northern Europe and Scandinavia transporting CO2 to discharge locations in the North Sea. Propulsion for the vessel will be based on ammonia dual fuel to provide green operations.
AND FINALLY…
Down in a hole – A machine capable of digging the world’s deepest hole could potentially unlock enough renewable energy to power the entire planet, according to its creators. US-based Quaise Energy is developing a drilling rig that it hopes will reach 16km (10 miles) beneath the Earth’s surface in order to tap “inexhaustible clean energy” from geothermal heat in the crust. The difficulties of drilling at those depths have meant tapping deep geothermal energy at scale has so far proved impossible. After boring through softer rock closer to the surface, Quaise Energy replaces traditional drill bits with milimetre wave energy that melts and vaporizes the harder rocks it encounters. The technique was developed by researchers at MIT 15 years ago, and is finally ready to be taken out of the lab. If successful Quaise Energy claims that any country on Earth could potentially become energy independent. The firm has already raised more than $63 million in an effort to commercialise the technology. (Independent)
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