CP Daily: Friday November 25, 2022

Published 23:44 on November 25, 2022  /  Last updated at 23:47 on November 25, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

INTERACTIVE: Mapping international emissions trade agreements as interest gathers pace

As the number of countries announcing bilateral emissions trade agreements and partnerships has increased, Carbon Pulse has launched a tracker to monitor such arrangements as updated national climate plans also point towards a rise in the use of cooperative approaches.

EMEA

Norway and Switzerland strike deal to explore CCS and CDR together

Norway and Switzerland signed an agreement on Friday to strengthen ties on carbon capture and storage (CCS) and carbon dioxide removal (CDR), with the Alpine nation eyeing Norway’s vast carbon capture potential to help it reach net zero emissions by mid-century.

Euro Markets: EUAs post first weekly rise since October as bulls shrug off lack of liquidity

EUAs rose for a third day on Friday to give the market its first weekly increase in a month, as traders initially eyed a key technical level before prices eased amid profit-taking in a quiet session.

AMERICAS

ANALYSIS: Colombian carbon tax reforms bring mixed signals to offset market

Colombian offset project development may slow after the government halved the credit usage limit against the national carbon tax this month, but the simultaneous expansion of the $4/tonne fee to coal and interest from voluntary market buyers could help sustain demand, stakeholders told Carbon Pulse.

Climate change risks triggering localised Amazon tree death “tipping points” -study

Climate change risks triggering localised “tipping points” in the Amazon rainforest that could have severe consequences, a new study has found.

Carbon project developer strengthens ties in Argentina

A global offset project developer and carbon market investor has made further inroads into the Argentinian market by signing a second partnership this month with a regional government in the country.

ASIA PACIFIC

CN Markets: CEA liquidity improves as thermal plants offload allowance surplus

Trading volume in China’s national emissions trading scheme continued to increase over the past week as thermal plants began to sell extra allowances to cover their financial losses, while the offset market remained depressed amid severely limited supply.

Govts should fund pilot blue carbon projects to boost private sector confidence, investment, report says

Governments in the Indo-Pacific should invest in blue carbon demonstration projects in order to provide proof to private investors that they can deliver financial returns, according to an Australian-funded regional report.

Hong Kong exchange’s voluntary carbon market sees early momentum

Dozens of trades have gone through during the first four weeks of trading at the Hong Kong Exchanges and Clearing’s (HKEX) recently launched Core Climate offset platform with the support of major financial institutions in the region, the bourse said, as Hong Kong gets ready to challenge Singapore for the status of the Asia-Pacific region’s main carbon trading hub.

Japanese oil company makes first forest carbon deal ahead of national roll-out

A major Japanese oil company has secured its first forward offtake deal of forestry-based J-Credits, and will seek to roll out forest conservation initiatives across the country, it announced on Friday.

VOLUNTARY

Offset quality checking tool aims to cover most of VCM market by Q3 2023

An open-access service rating the quality of projects in the voluntary carbon market expects to cover four-fifths of issued carbon credits by Q3 2023 amid plans to add five more project types.

SBTi urged to include mechanisms for permanent carbon removal in corporate net zero standard

A group of companies have urged the Science-based Targets Initiative (SBTi) to adopt more robust requirements for the use of permanent carbon removal technologies in the organisation’s corporate net zero standard, a document which aims to steer corporates on an emissions reduction pathway that aligns with a 1.5C scenario.

Offset ratings firm alters scores of 10 projects in review blitz

A carbon credit ratings agency has changed its scores for ten projects as part of two sectoral portfolio reviews this week, while one of the market’s biggest credit issuers had its lofty rating upheld.

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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

EMEA

Cast a wide net zero – The European Commission is preparing a plan to accelerate the ecological transition of the bloc’s fisheries and decarbonise the sector as it deals with the current energy crisis, Euractiv reports. The rise in fuel prices as a result of the war in Ukraine is having ‘catastrophic consequences’ on EU fisheries, to the point of threatening the sector’s ‘viability’, European fisheries Commissioner Virginijus Sinkevicius told the EU-27 ministers at the Agrifish EU Council on Monday. Each time marine diesel goes up by €0.10, the profitability of the EU’s fisheries sector decreases by an estimated €188 mln – half the cost of the ships’ operations – according to the Commission’s estimates. Though the sector was able to benefit from the swift rapid release of state aid and the European Maritime Affairs, Fisheries and Aquaculture Fund (EMFAF) to fend off fuel price increases, Sinkevicius believes the solution lies in remedying the sector’s dependence on fossil fuels. And technological innovation, according to the Commission, is how the fisheries sector will move away from its reliance on fossil fuels. Initiatives that aim to modernise the sector have already been launched in the EU.

Dash for LNG – In a bid to reduce dependence on Russian gas, Austria, Croatia, and the German region of Bavaria announced an energy-political partnership as heads of government visited an LNG terminal in the northern Adriatic, Euractiv reports. Dependent on Russian gas and strongly interconnected, Austria and Bavaria signed up for the partnership to reduce their shared dependence on Russian gas to allow for imports from global gas markets. The Krk LNG terminal can regasify LNG from countries like Qatar and the US. With an annual capacity of 3 bcm, the terminal will have its capacity doubled to more than 6 bcm. In 2021, Austria imported about 7 bcm worth of gas from Russia. Read Carbon Pulse’s analysis on the emissions impact of Europe’s dash for LNG.

Just transition – Denmark will receive €89 mln to achieve climate neutrality by 2050. The grants are part of the Just Transition Fund (JTF) programme adopted by the European Commission, to help small and medium businesses in the green transition while reskilling workers of the polluting industries. The main beneficiaries will be the regions of North Jutland, home to the cement industry, and South Jutland, facing the consequences of phasing out fossil fuel production in the North Sea.

Tricky Trilogue Poland has warned EU institutions against introducing any kind of carbon price for heating fuels, arguing that a warm home in winter should not be a market commodity, according to Euractiv. The missive, signed by Poland’s climate and environment minister Anna Moskwa, rings the alarm about plans to extend the EU’s ETS to heating and transport fuels. Proposals to extend carbon pricing to heating and transport fuels are part of a wider package of energy and climate laws aiming to reduce the EU’s emissions by 55% before the decade’s end. The proposal is now entering final “trilogue” talks in the EU institutions, with negotiators from the European Commission, Parliament, and the 27 EU member states aiming to reach a decision before the end of December. The letter from the Polish minister said the fossil fuel price spike will have “the very likely consequence that it will lead to increased energy poverty” across the EU. “We cannot allow this to happen,” the Polish minister warns. “We want our citizens to be warm and safe in winter, and this is not an issue on which there can be a compromise during the trialogues.”

Boris against the ban – Former UK prime ministers Liz Truss and Boris Johnson joined a parliamentary rebellion aiming to overturn England’s effective ban on onshore wind farms, creating a fresh headache for UK leader Rishi Sunak, Bloomberg reports. Both Truss and Johnson signed an amendment to proposed government legislation which would ease current restrictions on onshore wind. It’s their first public act of dissent against Sunak’s government.

ASIA PACIFIC

Bulk storage – A report from Australia’s Clean Energy Council (CEC) has found that investment commitments in large-scale storage projects reached a new record in 2022, with 14 new projects worth over A$2 bln ($1.3 bln) committed in the past 12 months.  The 12-month rolling energy output from utility scale storage reached a record high – 1,984 MWh – almost four times higher than this time last year, the report said. CEC CEO Kane Thornton said, however, the report made clear that the clean energy transition in Australia had been stifled by years of policy uncertainty. He said just one project reached financial close in Q3 2022, and the amount of quarterly commissioned capacity continues the downward trend of the last few years, and is now at its lowest level on record at 127 MW. “Industry confidence to invest is growing, aided by clearer and more potent policy directions across the country, but the investment trend over the past year shows that we need a sustained focus on the energy transition from all governments,” he said.

Green finance – The Asian Development Bank (ADB) has approved a $500 mln loan to support Indonesia’s energy sector reforms to boost fiscal sustainability and governance, expand private sector investments in clean and renewable energy, and promote green recovery from the coronavirus (COVID-19) pandemic, it announced in a press release. ADB will also administer a $15 mln loan for the third subprogram of the Sustainable and Inclusive Energy Program funded by the Association of Southeast Asian Nations (ASEAN) Infrastructure Fund through its ASEAN Catalytic Green Finance Facility (ACGF). In addition, the project will include an equivalent of $292 mln in cofinancing from the German Development Cooperation, through KfW, and $60 mln from the Economic Development Cooperation Fund.

Dirty development – On Friday, a new coal-fired power station began operating in southern Bangladesh, The Economist reports. The project sits 14 km from the Sundarbans, the world’s largest mangrove forest and a UNESCO heritage site. The plant, which cost $2 bln to build, will burn 5 Mt of coal each year. Bangladesh’s government hailed it as a symbol of co-operation with neighbouring India, the project’s main financier. But the plant is controversial: environmentalists opposed it and demanded that private banks not fund it, partly because of the threat it poses to the forest. Bangladesh’s energy policy is cleaner than this fiasco suggests. Last year, the government scrapped plans to construct 10 coal-fired power stations after pressure from activists and trouble getting the necessary investments. It has instead focused largely on building natural gas and nuclear plants, but domestic gas reserves are declining and imports are expensive. Regular blackouts – last month more than 100 mln people were plunged into darkness – may also slow Bangladesh’s transition away from the world’s dirtiest fuel.

MoU to decarbonise – Marubeni has signed a Memorandum of Understanding (MoU) with the Vietnam Electricity Group (EVN), a state-owned power utility, on mutual collaboration towards the achievement of a decarbonised society in Vietnam, according to a Marubeni press release. EVN and Marubeni will jointly study a wide range of decarbonisation projects, including the decarbonisation or carbon emission reduction of existing thermal power plants in Vietnam, and the development of renewable energy and sustainable green energy such as biomass, ammonia, and hydrogen. Marubeni is the first company to sign an MOU with EVN focusing on the theme of decarbonisation, and together the two companies will work to achieve decarbonization in Vietnam’s power sector.

CO2 transport – A Chinese shipbuilding firm has started building two 7,500-cubic meter liquefied CO2 carriers for Northern Lights, a Norwegian carbon capture and storage project, China Daily reports. Dalian Shipbuilding Industry Co Ltd, a subsidiary of China State Shipbuilding Corporation Ltd, has independently designed and developed the vessels for liquefied CO2 shipping. Each ship is about 130 m long and 21.2 m wide. The first ship is scheduled to be delivered in the first quarter of 2024. The ships designed to run on dual-fuel consisting of LNG and light diesel oil are commissioned to be used for the European CO2 capture and storage programme. They will collect CO2 produced by industries in Europe and transport it to the CO2-receiving terminal on the west coast of Norway for processing, before injecting it into the seabed for permanent storage at 2,600 m deep.

AMERICAS

Banking baseline – Toronto Dominion (TD) Bank and the Bank of Montreal (BMO) are fairing better at decarbonising than the other four major banks in Canada, according to a report from Investors for Paris Compliance released Nov. 23. TD did better than other banks on setting higher emissions reductions targets that cover a good deal of the bank’s operations, while BMO outperformed on setting an absolute target in reductions, the report stated. TD was better on financed emissions disclosure of its loans and underwriting. BMO’s transition plan to eventually put an end to its energy investments outside of Canada was well received by the study’s authors. All Canadian banks still lag in their decarbonisation efforts and none of them are heading towards net zero, the report said. (National Observer)

Pining for pines – New Jersey state officials have approved a plan to fell 2.4 mln trees across 1,300 acres (526 ha) in the federally protected Bass River State Forest to prevent wildfires, according to reports. The New Jersey Pinelands Commission adopted the plan that is set to begin in April and reduce the canopy cover to 43% from 68% on over 1,000 acres of the Pinelands National Refuge, the state’s application detailed. The plan involves thinning the dense forest undergrowth by removing trees that are two inches or less in diameter, along with taller and thicker pines on either side of some roads to create a fire break against a spreading blaze. “We are in an era of climate change, it’s incumbent on us to do our utmost to preserve these trees that are sequestering carbon,” said Mark Lohbauer, Pinelands commissioner, who voted against the plan. (AP)

AND FINALLY…

Hemp tempts – Hemp plants could be the missing player in the fight against climate change, as it can absorb CO2 from the air more than twice as effectively as a tree, according to a New York research group, reports the Daily Mail. Hudson Carbon found that one acre of cannabis plants can store up to three tons of carbon, removing more than seven tons from the atmosphere. “’Roughly speaking, if [the US] did 50 mln acres of hemp, we would be sequestering a couple hundred million tonnes of carbon per year on that acreage,” said Ben Dobson, founder and president of Hudson Carbon. Hemp is a variety of the Cannabis sativa plant but contains deficient levels of the psychoactive compound THC compared to marijuana, which is another variety.

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