CP Daily: Wednesday November 30, 2022

Published 01:02 on December 1, 2022  /  Last updated at 01:05 on December 1, 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 takes steps towards first voluntary carbon removal certification, but leaves many unhappy

The European Commission presented its highly-anticipated proposal for a certification scheme for voluntary carbon removals on Wednesday, a move welcomed by some observers as offering a first step towards a robust regulatory framework, while others noted a number of shortcomings.

EMEA

‘Historic’ deal on inclusion of maritime sector in EU ETS reached -MEP

A ‘historic’ deal on the inclusion of maritime in the EU ETS has been provisionally struck by EU negotiators in Tuesday evening’s trilogues meaning 40% of maritime emissions would be covered in 2024 and phased-in to full-scope in 2026, but discussions are still open regarding other EU ETS-related reform bills, a senior MEP involved in the talks said on Wednesday morning.

EU’s Fit for 55 climate package nearing completion, but thorny issues remain with time running out -lawmakers

EUAs completed a second consecutive monthly increase on Wednesday, with prices rising to their highest since late August as buying interest continued to drive the market and generated healthy volume, while the UK allowance contract continued to lose ground compared to its EU counterpart.

Euro Markets: EUAs rises most in four weeks to hit three-month high as utility buying fuels short squeeze

EUAs completed a second consecutive monthly increase on Wednesday, with prices rising to their highest since late August as buying interest continued to drive the market and generated healthy volume, while the UK allowance contract continued to lose ground compared to its EU counterpart.

EU clean energy subsidies should go to sectors where the carbon price ‘doesn’t work’ -report

EU subsidies for decarbonisation that are derived from ETS revenues would most effectively be distributed to sectors where the carbon price is too low or where free allowances make it hard for clean energy to compete, according to a report published Thursday, which proposed mechanisms to channel cash to where it’s most needed.

European Commission appoints new director-general of climate directorate

The European Commission has appointed a new director-general for its climate directorate after the previous head died unexpectedly this summer.

EU, Switzerland significantly increasing frequency of allowance transfer dates in 2023

The EU and Switzerland are significantly increasing the frequency of dates where allowance transfers are allowed between the two regional emissions trading schemes.

ASIA PACIFIC

NZ govt reverses course on key element of proposed split-gas farm level policy

The New Zealand government has announced it will bring all “scientifically robust” forms of carbon sequestration, including native forestry, into its emissions trading scheme from 2025, in a bid to placate the agriculture sector.

Australian govt introduces below-baseline crediting legislation to Parliament

The Australian government has introduced legislation to parliament that would create Safeguard Mechanism Credits (SMCs), designed to reward regulated facilities that stay below their emissions baselines.

Japanese power company weighs large Australian offshore CCS project

One of Japan’s biggest power companies is considering capturing and shipping up to 10 million tonnes of CO2 annually to be stored at a floating CCS hub off the coast of Australia.

Soil carbon all the rage in Australia, but issuances remain out of reach

Interest in and registration of soil carbon projects has skyrocketed in Australia in recent years, however only one project has ever been issued Australian Carbon Credit Units (ACCUs).

Australian firms to pilot nature-based solutions in Vietnam

A group of Australian firms along with the government have teamed up to run a pilot reforestation project in Vietnam in a bid to lay the foundations for broader implementation of nature-based projects in the country.

Report urges palm oil industry to make up for nearly 1 mln hectares of forest loss

The global palm oil industry should contribute to the recovery of past harm made in oil palm-rich landscapes, regenerating nearly 1 million hectares (ha) of forest, according to a non-profit report released on Wednesday.

UN publishes 2018-20 data for GHG emissions savings from forestry in Indonesia

The UN released this week data on GHG emissions from forestry for Indonesia in 2018-20, reporting that the forest-rich Southeast Asian nation had been able to achieve annual average GHG emissions savings in that sector of nearly 200 million MtCO2e for the three-year period.

Nestle partners with NZ dairy co-op to cut emissions, as farmers rail against GHG pricing scheme

Nestle has partnered with a New Zealand dairy farming company to develop a commercially viable net zero carbon emissions dairy farm by 2032, as the wider dairy sector has urged the government to ditch its proposed split-gas farm-level GHG pricing scheme.

AMERICAS

California’s review of forest offset protocol elicits focus on buffer pool risk ratings, remote sensing tools

California regulator ARB in a public workshop on Wednesday reviewed the state’s forestry offset protocol, exploring expert insights and public input on the relevant science, data, and tools for future amendments to the programme under the WCI-linked cap-and-trade system.

British Columbia LCFS records second consecutive annual credit surplus in 2021

The British Columbia Low Carbon Fuel Standard (BC-LCFS) saw credit generation outpace deficits for the second straight year in 2021 as fuel suppliers engaged in more low-carbon projects, according to provincial data published Wednesday.

INTERNATIONAL

Getting on Paris pathway needs quadrupling of clean energy deployment this decade -report

A pathway exists for the world to get on track to less than 2C of global warming, but this will require determined action from both governments and the private sector to accelerate the transition to a low-carbon global economy with a significant ramp-up of investment, a report released on Wednesday has found.

VOLUNTARY

Indian carbon standard registry links up with CTX

An Indian carbon standards registry has linked up on Wednesday with the Carbon Trade Exchange (CTX), for an initial display of five projects on offer and almost 100,000 credits made available to the voluntary carbon market, the exchange told Carbon Pulse.

SPONSORED

Companies turning to futures to meet carbon reduction goals -CME

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

What’s your opinion? – Vanuatu has published a draft UN resolution requesting an advisory opinion from the International Court of Justice (ICJ) on states’ legal obligation for climate action and the consequences of causing harm. While the court, which is the UN’s main judiciary arm, has no binding authority, its opinion could inform lawsuits around the world and strengthen vulnerable countries’ position in international negotiations. Vanuatu is facing sea level rise and increasingly powerful cyclones that periodically cripple its economy. As emissions rise and the world remains off track to meet its climate goals, overheating is threatening the archipelago’s ecology, livelihoods and infrastructure. The draft resolution aims to establish the legal avenues for climate justice for present and future generations. It was prepared with a broad coalition of 17 countries, including Angola, Bangladesh, Germany, Mozambique, New Zealand, Portugal and Vietnam and a number of small island states. (Climate Home)

AMERICAS

Cap-and-trade court – The International Centre for Settlement of Investment Disputes has published next week’s hearing schedule for fossil fuel conglomerate Koch Industries and subsidiary Koch Supply & Trading’s lawsuit against Canada, after the Ontario government abruptly blew up its WCI-linked cap-and-trade regulation. Koch Industries has claimed the firm is owed $30.2 mln against a lost investment in WCI allowances after Progressive Conservative Premier Doug Ford cancelled the trading programme shortly after taking power in 2018. The Ford government passed a related law forbidding investors from suing the government for damages stemming from the closing of Ontario’s brief experience with cap-and-trade. However, Canadian PM Justin Trudeau’s Liberal government, advocating on behalf of Ontario, has argued allowances Koch purchased in the shuttered cap-and-trade system are not protected investments under the North American Free Trade Agreement, which was succeeded by the USMCA free trade agreement in 2020. The hearing, which is closed to the public, will take place over Dec. 5-8. It will feature testimony from Ontario Assistant Deputy Minister for Climate Change Alexander Wood, current and former Koch traders Frank King and Graeme Martin, academics Michael Mehling and Robert Stavins, law professors Jeremy De Beer and Larissa Katz, and consultant Franz Litz.

Quoting quotas – The US EPA is expected to publish preliminary Renewable Volume Obligation (RVO) standards for 2023 – the annual biofuel blending quotas under the Renewable Fuel Standard (RFS) – by the end of the week, Reuters reported. Under the RFS, oil refiners are required to blend billions of gallons of biofuels into the nation’s fuel mix, or buy tradeable credits from those that do. The agency is also expected to release initial biofuel quotas for 2024 and 2025 in the delayed release that runs up against a court-ordered Nov. 30 deadline to publish preliminary RVOs for the 2023 compliance year. The EPA had sent the RVOs to the White House Office of Management and Budget (OMB) for review, and a 30-day review period would tie in with a Dec. 8 or 9 publication of annual quotas, market participants had previously told Carbon Pulse. The OMB had several meetings scheduled with RFS stakeholders earlier this week, participants noted.

Sun and fossil free fun in Mexico – A tourism hotspot in Mexico, Mar de Cortes, aims to be the first carbon-neutral region in the world by 2030 after signing a deal with Spectrotec to help it develop local carbon mitigation projects, and ClimateTrade to calculate its carbon footprint and facilitate offsetting for businesses, residents and visitors, ClimateTrade announced. In a first phase, the Mar de Cortes Forum will support the development of local, certified carbon mitigation projects to help the region avoid or absorb carbon emissions. The second phase will consist of implementing micro-offsetting across the Gulf of California region. Visitors will be able to offset their carbon footprint when making a purchase or booking a stay online or physically with local businesses. There will be a carbon-neutral marketplace where tourists can book hotel stays, reserve experiences and buy products with automatic carbon offsetting. The Mar de Cortés Forum Summit 2022, held last week in the Gulf of California, was also made carbon neutral in partnership with ClimateTrade.

EMEA

Case dismissed – The European General Court has dismissed a 2018 case brought by the Austrian government against the European Commission over a new Hungarian nuclear power plant, Paks II, financed by Budapest and Russia. Austria is historically one of the EU’s anti-nuclear countries and is currently suing the European Commission over its “green” label for nuclear power in the EU taxonomy. In 2018, Vienna also sued the Commission for failing to ensure fair competition and maintained that Hungary’s state aid for a new nuclear power plant had violated the bloc’s level playing field. The lower EU General Court dismissed the lawsuit on Wednesday. The court held, that while the subsidy was of significant size, at €12.5 bln, its limited envisioned purpose limited its impact on the level playing field. “Since it only concerns the investment costs for two new reactors to replace the four old reactors that will be gradually shut down due to their age, and no operating aid is foreseen, the impact on the energy market is limited,” the court stated, rejecting the Austrian argument of disproportionate state aid. Vienna’s other arguments were also rejected by the court. (Euractiv)

And another – The Dutch state does not have to compensate German energy suppliers RWE and Uniper for the decision to close coal-fired energy plants in the Netherlands by 2030, a Dutch court ruled on Wednesday. RWE owns two of the current four coal-fired energy plants in the Netherlands, and Uniper one. Both filed lawsuits last year to seek compensation for the Dutch government’s 2018 decision to ban the use of coal in electricity generation this decade, shutting all coal-fired plants by 2030. But the court said the government had acted in good faith, as it sought to reduce CO2 emissions in the Netherlands in line with European climate goals. RWE and Uniper could have expected the announcement given the relatively high levels of CO2 emitted by the plants, the court said, and were also given time to adjust to the plans and seek ways to transform their plants to more sustainable sources of energy. (Reuters)

Another lawsuit – The Finnish Association for Nature Conservation and Greenpeace claim the government has failed to reach its carbon neutrality target and will be taking the issue to the Supreme Administrative Court. The NGOs argue that the government has not fulfilled its binding obligations regarding the Climate Change Act and the pursuit of carbon neutrality by 2035 in light of new data. A report published in October revealed that forests in Finland are no longer sufficient in removing carbon. This would be Finland’s first climate trial if the court takes up the case. Instead, the land-use sector has for the first time turned into a net emitter of greenhouse gases. Deforestation has in recent years increased and forests are growing more slowly than previously expected. The environmental organisations have decided to act proactively and not wait for the new numbers to be published in December by Statistics Finland and the Natural Resources Institute Finland. (Euractiv)

Oil refinery adds CCS – Essar Oil UK plans to build a £360 mln carbon capture and storage (CCS) plant at its Stanlow refinery in the UK, which will cut an estimated 810,000 tCO2 a year or nearly 40% of the plan’s annual emissions, the company announced Wednesday. The CCS plants will be connected to the fluid catalytic cracker, which turns heavy residual fuels into lighter products such as diesel and gasoline. Kent, an engineering company, has been contracted to conduct a pre-feed study, and the new CCS plant is expected to open in 2027. Essar Oil UK has committed to reducing carbon emissions from operations by 75% by 2030 and becoming net zero by 2040. In September, the company signed a heads of terms offtake agreement with Vertex, a joint venture with Progressive Energy, for the supply of 280 MW of hydrogen, which will partly be used to run Stanlow’s new £45 mln hydrogen furnace that was delivered in August.

OMV! – Carlyle Group is exploring a multi-billion-dollar bid for a large part of Austrian energy company OMV’s oil and gas portfolio, in what would be a bold move by a buyout firm to further expand into fossil fuels, people familiar with the matter said. The private equity firm is eyeing OMV’s upstream operations in most of the markets where it operates, the people said, asking not to be identified because the information is private. OMV plans to reduce oil and gas production by a fifth by 2030 and exit upstream production of fossil fuels by 2050. It has upstream operations in places including Libya, Iraqi Kurdistan, Malaysia, Norway, and the UAE. (Bloomberg)

A chill in the air – Temperatures are poised to plunge next month in Northern Europe as cold air blows in from the Arctic in what will be the first proper winter test for the region’s fragile energy systems. The Nordic region and Germany will see temperatures well below average for this time of year, with levels in Helsinki falling as much as 6.9 C below average on Tuesday and Wednesday, Maxar Technologies Inc. said in a report. It’s only southern Europe that will be spared the frigid temperatures, forecasters warn. After a milder-than-normal autumn, which allowed utilities to replenish depleted natural gas reserves, the winter’s first prolonged cold snap will put Europe’s power supplies to the test. From Finland to France, governments have warned of shortages and rolling blackouts as demand is set to increase in the coming months. (Bloomberg)

ASIA PACIFIC

Wind investment – Australia’s Clean Energy Finance Corporation (CEFC) has announced a market-leading wind investment, with its single largest investment in a wind project – which is also targeting its single largest emissions abatement, the Australian government agency stated in a press release. The CEFC has committed up to A$175 million to develop Stage 1 of the Golden Plains Wind Farm. The project will include 122 wind turbines and generate 756.4 MW of clean energy to replace coal-fired generation. The estimated annual emissions abatement is an average 770,000 tonnes CO2e, or more than 23 million tonnes CO2e over the project’s 30-year lifetime. Golden Plains Wind Farm is the first fully merchant wind farm in Australia to be financed by commercial lenders, with the CEFC commercial debt package crowding in an additional A$1.8 billion of private sector capital. This includes 100% equity from clean energy investor TagEnergy, in its first Australian investment. Debt providers include Westpac, Bank of China, Mizuho, German state-owned investment bank KfW, the Commonwealth Bank, and Danish Credit Export Agency EKF.

Renewable Rio – Anglo-Australian mining giant Rio Tinto is planning to invest a further A$600 million in renewable energy assets in Western Australia’s Pilbara region as it continues its efforts to decarbonise its local iron ore operations, RenewEconomy reports. The company on Tuesday announced plans to fund the construction of two 100 MW solar power facilities as well as a 200 MWh worth of on-grid battery storage across the Pilbara by 2026. The new capacity will add to Rio Tinto’s existing 34 MW of solar power installed at the recently commissioned Gudai-Darri iron ore mine, and a 34 MW/10MWh battery at Tom Price. The company says approval has already been granted for Rio Tinto’s first major standalone solar farm on the Pilbara coast. The 100 MW solar PV project will consist of approximately 225,000 solar panels and will be built to withstand the Pilbara’s at-times cyclonic weather conditions. Construction is expected to get underway next year, with project commissioning planned for 2025.

Climate futures – Singapore’s exchange, SGX Group, is launching futures on the Nikkei 225 Climate Change 1.5C Target Index, which is based on the well-known and broadly traded Nikkei 225, The Edge reports. This product is meant to address rising investor appetite for climate-related products. Created by Nikkei and Wilshire, the Nikkei 225 Climate Change 1.5C Target Index is designed to have greenhouse gas emission intensity that is 50% less than its parent Nikkei 225 and to continue reducing it by at least 7% on an annual basis. According to SGX, this is compliant with the EU Paris-Aligned Benchmark aimed at attaining the goals of the Paris Agreement.

VOLUNTARY

Free carbon accounting template – Rating agency BeZero Carbon has launched a free carbon accounting template that will help carbon credit project developers to report their  carbon accounting in a standardised, accessible format, while at the same time holding a public consultation, open to Jan. 27,  to gather feedback on the template. The tool is applicable to all project types across the Voluntary Carbon Market, and has been launched to overcome the fragmented nature of public disclosure of carbon project information, and the difficulty in comparing it across standard board and project type. Even within the same sector, each project reports their carbon accounting in a unique way, BeZero noted. The template moves away from structuring carbon accounting around the specific elements of each project individually. It shows a project’s core information and carbon accounting details including baseline assumption, project net emissions, leakage and risk buffer allocation – all in one place.

SCIENCE & TECH

Mind the gap – The famous Keeling Curve may soon have a rare data gap, Axios writes. The Mauna Loa eruption in Hawaii on Monday cut power to the observatory where atmospheric CO2 levels are measured, according to the Scripps Institution of Oceanography. Mauna Loa’s spectacular eruption is forcing Ralph Keeling, the son of Charles David Keeling, who began CO2 measurements on the peak in 1958, to find a similar location to take CO2 readings in the meantime. The Keeling Curve, which shows the build-up of CO2 in the atmosphere since 1958, provides vivid evidence of the effects of burning fossil fuels. The measurements, taken nearly continuously since 1958, show that CO2 levels are higher now than at any time in at least 3 mln years. The observatory, which the US’ NOAA operates, is ideal for taking CO2 readings since it stands at 11,315 feet, well above the higher, transient pollution levels present below, and is free of vegetation.

City view – ClimateView, a Swedish climate technology company, has upgraded its ClimateOS SaaS platform with new software called “Impact Intelligence” to help city planners transform climate ambition into executable and trackable climate action plans. To receive public or private money, cities need to be able to show both the decarbonization and economic impact these investments will have, the Swedish company points out. The new Impact Intelligence module gives cities the tools to calculate and visualize a transition’s implementation and operational costs. It can also measure the potential carbon reduction and associated co-benefits, such as public health benefits and job creation. If a small city like Helsinborg, with a population of 115,000, shifted 15% of its vehicle kilometers to walking and cycling, the total economic benefit will be 159 million EUR  from now to 2030, according to ClimateView.

AND FINALLY…

Say it ain’t Geo – NASA on Tuesday announced that its GeoCarb mission, which was intended to be a low-cost satellite to monitor CO2, methane, and how plant life changes over North and South America, was being killed because of cost overruns. When it was announced six years ago, it was supposed to cost $166 mln, but the latest NASA figures show costs would balloon to more than $600 mln and it was years late. Unlike other satellites that monitor GHGs from low Earth orbit and get different parts of the globe in a big picture, GeoCarb was supposed to be at a much higher altitude of 22,236 miles (35,785 km) from one fixed place in orbit and focus intently on North and South America. However, the space agency said it will still be watching CO2 emissions, but in different ways. (AP)

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