CP Daily: Tuesday November 29, 2022

Published 01:32 on November 30, 2022  /  Last updated at 01:32 on November 30, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

Japan govt outlines comprehensive carbon market plan, plans Asia-wide push

Japan on Tuesday announced a proposal to gradually expand the domestic use of carbon pricing to help fund $1.1 trillion in economic transition bonds while also launching a push for increased use of an emissions market to drive decarbonisation across Asia.

VOLUNTARY

Nordic initiative publishes best-practice guidelines for voluntary carbon market engagement

A government-funded initiative by the Nordic nations has published final guidelines that outline how to most effectively use voluntary carbon markets to address the current ambition and implementation gaps in relation to the Paris Agreement’s 1.5C temperature warming limit.

New corporate approach needed including internal carbon pricing to make offsetting more effective -report

Voluntary carbon offsetting in its current form has not been a useful tool in leading towards meaningful emissions reductions and a new approach should be adopted including setting an internal carbon tax to enable companies to execute more effective climate strategies, a white paper released on Tuesday has claimed.

Rubicon crosses the voluntary carbon market with launch of new “high quality” product

A new VER market platform Rubicon Carbon launched Tuesday with initial backing of $300 million, and aims to raise $1 billion by year-end to tap into what it said is growing corporate demand for voluntary offsets.

Xpansiv to launch carbon credit auction service

Xpansiv is launching an auction service for carbon credits, the environmental commodities, the environmental commodity marketplace announced Tuesday.

New carbon credit platform receives VC funding to simplify biochar project development

A US-based sustainability startup on Tuesday announced it has gained funding to launch a platform to accelerate the development of biochar projects.

Satellite image company, soil carbon project developer form strategic alliance

A provider of AI-powered satellite imagery analysis and an Australian offset project developer on Tuesday announced an alliance to improve soil carbon measurement.

INTERNATIONAL

Switzerland confirms 2% voluntary carbon credit cancellation for atmosphere

The Swiss government issued a statement on Tuesday confirming that 2% of its imported carbon credits would be cancelled for the good of the environment, a provision recommended under the Paris Agreement but remaining voluntary in many cases.

Majority of climate disclosure reporting fails to include ‘decision-useful’ information -report

Despite the growing number of firms producing climate-related disclosures, a large proportion do not include useful information, according to research published Tuesday.

Survey finds 84% of hydrocarbon professionals see CCUS as mainstay

Some 84% of hydrocarbon professionals expect carbon capture, utilisation and storage (CCUS) will be a mainstay in the industry, and over half plan on installing CCUS solutions over the next decade, according to a survey published on Tuesday.

EMEA

Shipping’s entry into EU ETS likely to weigh on market initially, say analysts

Adding shipping to the EU ETS is likely to have an initial bearish impact due to how legislators are designing the process, analysts told Carbon Pulse, while the maritime sector is expected to take varying approaches to buying the allowances they will need.

Stricter rules needed on how EU nations spend ETS revenues as billions go elsewhere -report

As much as €25 billion of ETS-derived revenues distributed by EU member states between 2013-21 were not spent on climate action, according to analysis from a green group published on Tuesday that called for more stringent rules on the spending of funds from ETS allowance sales.

Euro Markets: EUAs climb to one-month high while UKAs loses premium to EU permits despite gain

EUAs rose to their highest in four weeks after a strong auction result brought buyers into the market, while UK allowances were only marginally firmer, wiping out the historical premium the benchmark British contract has held to EUAs for most of the year.

ASIA PACIFIC

Australia to hold consultation on Indo-Pacific Carbon Offset Scheme guidelines in 2023

The Australian government plans to launch a consultation on the draft programme guidelines for its Indo-Pacific Carbon Offset Scheme (IPCOS) next year, as some market participants are lamenting its go-slow approach to the policy’s development.

Carmaker forms blue carbon alliance with South Korean govt

A domestic carmaker has agreed to work with South Korea’s Ministry of Maritime Affairs and Fisheries to develop and promote blue carbon projects in a bid to sequester CO2 and protect biodiversity.

China’s Hebei to allocate 50 bln yuan for climate financing projects

The government of China’s Hebei province, known as the country’s steelmaking hub, has teamed up with a state-owned bank to provide financial support for the development of climate-related projects with a fund scale of 50 billion yuan ($6.98 bln) for the upcoming three years.

AMERICAS

Washington state confirms accelerated carbon intensity reduction schedule in final Clean Fuels Program regulations

The Washington State Department of Ecology (ECY) on Monday published final regulations of its Clean Fuels Program (CFP), confirming an accelerated timeline to achieve average carbon intensity (CI) reductions for covered transportation fuels.

SHIPPING

Maritime emissions jump in 2021 amid uncertain low-carbon outlook -report

Greenhouse gas emissions from the world’s maritime fleet increased by 4.7% in 2021, with most of the increase coming from container ships, dry bulk carriers and general cargo vessels, a report from UNCTAD, the UN institution dealing with trade and development, warned Tuesday.

SPONSORED

Companies turning to futures to meet carbon reduction goals -CME Group

Promoted content – Sponsored by CME Group: As the voluntary carbon offset market grows, price risk is becoming a bigger factor. “Having a clear price signal is important for companies, giving them the confidence to move forward.”

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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

Stamp out slavery — An Australian clean energy industry group has warned of growing evidence linking renewable energy supply chains to modern slavery, and urged companies and governments to act to stamp it out, The Guardian reports. A report released by the Clean Energy Council said slavery in all supply chains was a global problem, however countries like Australia were on a trajectory to generating the vast majority of their electricity from solar, hydro, wind, and batteries by 2030, and they need to play an active role in addressing it in renewable energy industries. The report cited detailed allegations of forced labour and slavery in supply chains for solar and wind energy and battery storage, including the internment of Uyghur and Kazakh people in Xinjiang province, China, which is the source of 40-45% of the world’s solar-grade polysilicon, major issues with the mining of cobalt in the Democratic Republic of Congo, used for batteries, with children as young as seven working in mines, and examples of workers in Ecuador’s region of the Amazon being subject to substandard labour conditions, while harvesting balsa wood for wind turbines. The report, compiled alongside Norton Rose Fullbright, said a globally recognised certificate of origin scheme is needed.

ASIA PACIFIC

Victorian outlook – The re-election of the Labor government last weekend in the state election in Victoria, Australia, means that there is a mandate for several ambitious policies on climate change to proceed in the country’s second-most populous state, according to a commentary from Environment Victoria, a non-profit green advocacy group. These include the following climate-related targets to be reached by 2035 that were outlined in Labor’s election campaign: phasing out all coal plants, 95% share for renewables in power generation, 75-80% cut in emissions, 4 GW of offshore wind, and 6.3 GW of battery storage. Furthermore, the state government will revive the State Electricity Commission to re-insert public ownership of power generation assets, with a pledge of A$1 bln worth of investment to develop 4.5 GW of renewables capacity.

Look what we’re doing – Australia and Singapore negotiators will pitch elements of their recently finalised Green Economy Agreement (GEA) in Brisbane next month, when 14 countries meet to begin working out details for the US-led Indo-Pacific Economic Framework (IPEF), Australian Financial Review reports. The accord aims to reduce barriers on the trade of environmental goods and services and encourage carbon trading. It could also pave the way for Singapore to import Australian hydrogen and provide a model for the rest of the region. The GEA will also focus on particular aspects of low-carbon economies such as green shipping, which is of interest to other IPEF nations including Fiji. US President Joe Biden announced the IPEF in May as a counter to China’s growing influence across the region. Members include Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.

It’s a match – New Zealand utility Meridian has selected Woodside as the preferred partner to move forward to the development stage of the proposed Southern Green Hydrogen (SGH) project in New Zealand, according to a company statement. A final investment decision will follow the development stage. Woodside was selected after an extensive competitive bidding process based on its capability and experience in operations, process safety, and liquids marketing. Meridian Chief Executive Neal Barclay said, “We’re very pleased to be partnering with Woodside which, like us, is focussed on progressing a world-class hydrogen and ammonia facility in Southland, New Zealand, that will provide significant benefits to the local community. In addition to its operational and marketing expertise, Woodside has demonstrated climate change ambitions, and as we are a 100% energy company and committed to sustainability, that was a key focus for us in selecting a partner.”

Chipping in – A pioneering boiler conversion project is now up and ready to go, using woodchips to make potato chips, while slashing emissions, Beehive, the New Zealand government’s website reports. “McCain’s newly converted coal boiler will reduce CO2 emissions at its Timaru factory by 95% and is an excellent example of the great climate gains we can achieve through new and innovative technology,” says Energy and Resources Minister, Megan Woods. “By converting their coal boiler to burn domestically sourced woodchips, made possible by Government co-funding, McCain will reduce carbon emissions by approximately 30,000 t/yr, that equates to taking 11,000 cars off the road,” Megan Woods said. McCain’s $5.6 mln conversion project received NZ$2.9 mln of contestable funding from the Government Investment in Decarbonising Industry Fund (GIDI).

Hydrogen agreement – JERA, Kyushu Electric Power, Chugoku Electric Power, Shikoku Electric Power, and Tohoku Electric Power have concluded a memorandum of understanding (MoU) to consider collaboration aimed at the adoption of hydrogen and ammonia as fuel for power generation, according to a JERA press release. The five companies, each of which operates large-scale thermal power plants in Japan, will discuss possibilities for collaboration in the following areas aimed at establishing and expanding supply chains for hydrogen and ammonia for fuel: joint procurement aimed at reducing hydrogen and ammonia procurement costs for domestic power plants, establishment of transportation and storage methods for hydrogen and ammonia, working to gain policy support and to develop rules related to hydrogen and ammonia, exchange of opinions, and discussion of collaborative projects related to the introduction of hydrogen and ammonia in Japan.

Shipping agreement – The Korea Shipping Association and SK Energy have signed an agreement to proactively respond to the implementation of the International Maritime Organisation (IMO)’s EEXI (Ship Operation Energy Efficiency Index) and CII (Ship Carbon Emission Efficiency Index) regulations, as well to promote an eco-friendly stance in domestic shipping industry, by rewarding compliance with the regulations from shipping companies, according to an SK Energy press release.

On ice – China’s strict Covid restrictions are cutting off international collaborations and stymieing climate projects, grinding some grassroots climate action to a halt, Bloomberg reports. With people stranded at home, many climate projects are on pause, potentially slowing the country’s ability to reduce emissions and move forward on adaptation. Beijing, once a popular destination for hosting environmental workshops, has also lost its allure for global climate experts, according to the report.

Timber! – The Australian government’s green bank, the Clean Energy Finance Corporation, has committed A$70 mln ($47 mln) in debt finance to the Melbourne T3 Collingwood development – the first project to be financed through its Timber Building Programme. The programme is designed to kickstart mass timber construction in Australia, in order to reduce embodied carbon in building materials. The 15-story building will deliver a dual emissions reduction impact – cutting embodied carbon levels by as much as 40% during the construction phase, and, once operational, target market leading net zero emissions, according to the CEFC. “We are very pleased to announce T3 Collingwood as our first investment under the innovative CEFC Timber Building Program, which aims to encourage the use of mass timber in the construction sector,” CEFC CEO Ian Learmonth said. “Mass timber can play an important role in decarbonising the buildings that make up our cities and this investment showcases how timber can be used to change the way we approach commercial scale buildings.” He added that the commercial property sector has been making significant progress to reduce operational carbon, and timber represented the next frontier of the industry. T3 Collingwood will use about 4,000 cubic metres of wood for the structural frame, fixing in place about 3,000 t of carbon. Including biogenic carbon storage, embodied carbon emitted during construction – in processes such as raw material procurement, manufacturing, construction, and demolition – is equal to an emissions reduction of approximately 40% compared with the equivalent use of reinforced concrete, the CEFC said.

AMERICAS

Forest fund – The Amazon Fund is courting the US, UK, France, Switzerland, and Canada for support, as Brazilian President-elect Luiz Inacio Lula da Silva seeks to revive the preservation mechanism, his advisors said Tuesday. Lula founded the fund in 2003 during his previous administration and received its biggest contributions from Germany and Norway. When outgoing President Jair Bolsonaro was elected in 2018, he froze the fund due to alleged spending irregularities. Since then, $563 mln in Amazon conservation funding has sat idle. (Reuters)

More on methane – The US Bureau of Land Management on Monday released draft rules to limit methane pollution from oil and gas drilling on public and Native lands. Along with requiring methane leak detection and repair plans in lease applications, the proposed rules would also limit flaring due to lack of pipeline capacity. Flaring and venting have increased on public and Native lands – enough gas was burned between 2010 and 2020 to power roughly 675,000 homes per year. The draft rules follow President Joe Biden’s administration’s more comprehensive methane pollution reduction plan announced at COP27. (Climate Nexus)

Senate stalled – The US Senate Environment and Public Works Committee vote on the confirmation of the Democratic Party’s nominee, Joe Goffman, to head up the EPA air office ended in a draw on Tuesday. It was the fourth attempt at confirming Goffman at the committee level. The Democrats are eager to appoint their nominees to the EPA during this session to enact the Inflation Reduction Act. That means the vote will now move to face the full Senate. Some Democratic Senators who support fossil fuels may oppose Goffman, though that remains uncertain. Two other EPA nominations are also awaiting confirmation, David Uhlmann is awaiting a vote to head up the agency’s enforcement arm and Carlton Waterhouse is looking for his own discharge vote after a panel also tied in his confirmation hearing to head the Office of Land and Emergency Management. (E&E)

Climate collusion – Sixteen Puerto Rican cities and towns are suing oil majors including Chevron, ExxonMobil, and Shell in federal court under the Racketeer Influenced and Corrupt Organizations Act (RICO) for allegedly denying the existence of climate change, Reuters reported Tuesday. The towns argue that oil firms created a multi-billion dollar marketing campaign to convince the public that fossil fuels don’t harm the climate. The suit aims to make the oil majors financially liable for the damage in Puerto Rico from the 2017 hurricane season. (Reuters)

EMEA

Looking elsewhere – Qatar has agreed to supply Germany with LNG under a long-term deal that will go a small way to helping the European country replace piped flows from Russia, Bloomberg reports. State-owned Qatar Energy and ConocoPhillips have signed agreements that will see the Persian Gulf state send up to 2 Mt/yr of LNG to Germany from 2026. The deals will last at least 15 years, Qatar’s energy minister, Saad al Kaabi, told reporters in Doha alongside Ryan Lance, ConocoPhillips’ CEO. The deal with Qatar is only 6% of the 46 bcm of Russian gas that Germany imported in 2021. But signing an agreement is significant as the global LNG market is increasingly competitive, with Europe fighting over cargoes with Asia during the winter. Recent Carbon Pulse analysis looked at the significant level of emissions leakage that could be created from Europe’s dash to replace Russian pipeline gas with LNG.

VOLUNTARY

Sell us your shares – Australian superannuation fund Aware Super and two offshore funds are trying to pick up a combined $55 mln stake in Blackstone-backed carbon trading platform Xpansiv, AFR reports. The funds are offering to pay $10.31 a share for up to 5.3 mln Xpansiv shares in a deal valuing the company at $800 mln excluding debt, according to documents sent to shareholders. Investors reckon the offer’s at about a 30% premium to where the company raised capital from local institutions only 15 months ago, and comes six months after the group failed to secure an IPO and instead signed a debt deal with Blackstone. The funds, seeking a combined 6.9% stake, reportedly sent their offer to Xpansiv’s investors on Nov. 17. The deal launched with pre-commitments from a bunch of Xpansiv directors and management who said they would tip in 846,344 shares worth $US8.7 mln, and another 367,429 options. The sellers included Xpansiv executive chairperson William Stewart (selling 11% of his shares), CEO Joe Madden (14%), president John Melby (66%), chief strategy officer Nathan Rockliff (17%) and chief commercial officer Ben Stuart (23%). Major institutional investors BP Technology Ventures, S&P Global Ventures, and Australia’s CBA had already declined to participate in the offer, the document said. Interestingly, the bid was made via a new entity called Galaxy Offeror Pty Ltd. Galaxy Offeror’s two directors were Xpansiv’s Madden and Stuart and its sole shareholder was Sydney-based advised Stuart Nelson. However, the document said the buying was on behalf of Australia’s Aware Super (already a small Xpansiv shareholder), New York-based Atlas Merchant Capital, and Takeoff Lux – an investment fund run by European private equity firm Vitruvian Partners. The bidders were calling for stock by 1700 on Dec. 16.

SCIENCE & TECH

Reform raise – Carbon Reform, a startup building technology to reduce CO2, improve air quality, and save energy from buildings, on Tuesday announced the closing of a $3 mln seed investment. In a press release, the company said its Carbon Capsule technology diverts and purifies return air from commercial buildings, removing CO2, volatile organic compounds, particulates, and pathogens, so the air can be safely recirculated to occupants. By reducing the amount of outside air needed, installing the Carbon Capsule can provide significant energy savings from existing HVAC units, it said. The round was led by Azolla Ventures, a climate tech VC fund created by Prime Coalition, that invests in early-stage technology companies with the potential for gigaton-scale climate impact.

What gets measured, gets sequestered – A half-dozen companies unveiled a joint initiative on Tuesday to help verify that carbon capture and sequestration (CCS) projects work as intended. Environmental data and software firm Project Canary, Denbury Resources – which uses CO2 injections to boost oil recovery – and other partners announced joint work to support “third-party independent environmental assessments and data measurement”. Members of the new “collective” plan to harmonise existing frameworks and requirements into a measurement, verification, and reporting system that’s applicable to various industries. Others involved so far include the energy infrastructure firm Enerflex, tech services firm Advanced Resources International, IMA Financial Group, and Wolf Carbon Solutions US. (Axios)

AND FINALLY…

Delighting you maybe not always – Canon has scaled back its efforts to rein in its climate impact, according to a study of the Japanese photography and printing company’s GHG disclosure data. In newly submitted information to carbon measurement non-profit CDP, which charts the decarbonisation progress of firms in line with the goals of the Paris Agreement, Canon has effectively slashed its climate ambition in half. Canon’s 2021 absolute emissions reduction target was 50% from 2008 levels by 2030, which was in line with Paris’ global warming limit of 1.5 C above pre-industrial levels. However, the company’s new climate target is a 30% from 2018 levels by the end of the decade. When base year adjustments and different emissions scopes are taken into account, this represents an emissions cut drop from 50% by 2030 to 23% by 2030 – which is not Paris-aligned – analysis by Transition Asia, a non-government organisation that scrutinises sustainability commitments in East Asia, has found. Transition Asia modelled Canon’s current and recent business growth projections, energy efficiency improvements, and energy consumption to forecast the firm’s emissions trajectory from 2022 to 2030. It concluded that Canon has lowered its climate ambition because it was failing to meet its original target. (Eco-business)

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