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TOP STORY

EU strikes deal on aviation coverage in bloc’s carbon market

EU co-legislators have struck a provisional political deal in the early hours of Wednesday that would have flights within the bloc paying for all their CO2 emissions from 2026.

EMEA

ANALYSIS: Analysts flag increasing risks of EU industry shutdowns as crisis persists

A greater-than-expected slump in EU power and gas consumption so far in Q4 is raising the prospect that parts of European heavy industry will never fully recover from the current extreme energy price environment, presenting a longer-term risk for carbon allowance demand.

Euro Markets: EUAs edge higher on cold weather and position-taking, despite below-market auction

EUAs regained strength during Wednesday’s session after initially dropping on a below-market auction, with prices settling above €88 for the first time since August as energy prices surged on looming colder weather.

INTERNATIONAL

World Bank, IETA, Singapore launch global initiative to unify carbon credit registry data

A group of international partners has launched an open-source metadata system to share information about carbon credits that aims to improve transparency for carbon markets, they announced on Wednesday.

US asset manager Vanguard drops out of net zero investment initiative

The world’s second largest investment advisor Vanguard on Wednesday withdrew its membership from the Net Zero Asset Managers (NZAM) initiative, coming as Republican-led US states ramp up their attacks on ESG investing.

VOLUNTARY

REDD credit prices crash to rock bottom value amid lack of year-end demand

REDD forestry conservation credits have tumbled this week amid thin year-end demand and uncertainty over the impact of a UN decision to limit the role of offsetting in a future global crediting mechanism.

Verra offers proof of backlog struggle as carbon credit pipeline builds

Offset standard developer and manager Verra on Wednesday provided further insight into the substantial number of project listings and verifications this year causing a backlog of VER issuances, and said it would provide further documentation to stakeholders to ward off potential delivery risk for commercial contracts.

Large established carmakers set to struggle to meet net-zero targets

Most large multinational automakers are struggling to electrify their fleets and secure access to critical battery materials despite these firms setting ambitious net zero emissions goals, a report has found.

French ag carbon startup raises €3 mln in pre-seed funding

A French-headquartered startup that develops nature-based carbon credit solutions in the agricultural sector has raised €3 million in pre-seed funding.

AMERICAS

Virginia advances regulation to put end date on RGGI membership

Virginia cleared its first hurdle in leaving the RGGI bloc Wednesday morning when the Air Pollution Control Board (APCB) endorsed a draft proposal to rescind the state’s carbon market regulation, though some board members expressed concerns regarding their authority to scrap the programme.

Argentina provincial pilot VER auction sells out -media

The Argentinian province of Cordoba sold out of all the limited carbon credit volume on offer at the government’s pilot auction last week, a media outlet reported Tuesday.

ASIA PACIFIC

Methodology uncertainties continue to distress China’s offset market -observers

Concerns surrounding eligible methodologies for China’s voluntary market continue to distress project developers, though the long-awaited relaunch of the country’s national offset programme could be only months away, experts told Carbon Pulse.

Korean ETS emitters expect free allocation to stop flowing from 2026, leaving little time to meet 2030 NDC

South Korean emitters covered under its domestic emissions trading scheme are concerned that its allocation plan will align with its 2030 NDC from 2026, providing limited time to cut emissions sufficiently to meet the national target, according to a market expert.

SHIPPING

SBTi launches 1.5C-aligned roadmap for shipping sector companies

Corporate climate goal-setting template provider SBTi has launched new guidance for the shipping sector, requiring maritime companies to reach net zero CO2 output by 2040.

BIODIVERSITY

Consultants lay out draft basics for a global voluntary biodiversity credit market

A global biodiversity credit market could be based around a framework for determining biodiversity carrying capacity (BCC) and rules for who is able to trade various credit types, according to Paris-based consultants Carbone 4.

Nature-based markets are worth $10 trillion per year, study finds

The Taskforce on Nature Markets, supported by consultancy McKinsey’s Vivid Economics, released Wednesday a report that outlines how the world could utilise nature markets to curb biodiversity loss and ecosystem degradation, valuing multiple established and nascent markets at almost $10 trillion per year in total.

COP15: 30×30 unlikely to be achieved without agreement to address drivers of degradation -experts

While an agreement by global governments to protect 30% of the world’s land and sea area by 2030 would likely dub the Montreal negotiations a success, more is needed on how to address the drivers of biodiversity degradation, say experts, or risk condemning targets to empty promises.

EU green finance group warns against monetising nature

The push for a ‘nature positive economy’ through initiatives such as biodiversity credit trading risks is doomed to be an environmental failure and should be stopped, according to an EU-based green finance group.

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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

Cutting coal – The G7 industrialised nations has made a new $15 bln offer to Vietnam to agree during a summit next week on funding to speed up its transition away from coal, three people familiar with the talks told Reuters. Vietnam, which is among the world’s top 20 coal users, was initially slated to sign up for the so-called just energy transition partnership with G7 nations at a global COP27 climate summit in November, but high-level talks broke off before the meeting. To persuade Vietnam to back the offer, Western negotiators led by the EU and Britain have proposed a bigger financial package, which includes $7.5 bln made up almost exclusively of loans from the public sector and the same amount in pledges from the private sector, the sources said.

EMEA

Coal comeback – Britain on Wednesday approved its first new deep coal mine in decades. To be developed by West Cumbria Mining in northwest England, the project seeks to extract coking coal that is used in the steel industry rather than for electricity generation, the BBC reports. It is expected to create around 500 jobs and operate for 50 years. The project has come under criticism from the British government’s own CCC independent climate advisory panel as well as climate activists and organisations flagging the incompatibility with the nation’s binding 2050 net zero emissions target. The CCC pointed out that the mine is projected to increase UK emissions by 0.4 MtCO2e a year, with 85% of its product set to be exported despite declining global demand for coking coal. West Cumbria Mining said it will be the world’s first ‘net zero’ coal mine of its kind, as they will offset the emissions from the construction phase (but presumably not from burning the coal itself). The announcement comes a year after the UK hosted COP26, when it lobbied other countries to “consign coal to history”.

Buried – SSE plc and Equinor have been given UK government approval to build the country’s power station with carbon capture at Keadby, Lincolnshire, according to government documents published on Wednesday. The 910-MW Keadby 3 gas-fired plant would capture and store up to 1.5 mln tonnes a year of CO2 and form part of the East Coast Cluster’s CO2 transport and storage system. SSE and Equinor are also working on a project to build a hydrogen-fuelled power plant at the Keadby site together with a hydrogen storage facility, as well as a further generation facility with carbon capture at Peterhead, Scotland.

Gas cap or not – One week before the next EU energy ministers’ meeting, the Czech Republic proposed another compromise for a broader bloc-wide gas price cap — lowering the intervention threshold to €220 from the €275 suggested by the European Commission, according to a document seen by Bloomberg. But member states still don’t see eye to eye, with one group demanding a far lower cap, while the other would prefer no cap at all.

Tacked on — A TotalEnergies executive has told a conference in Papua New Guinea that its proposed 5.4 Mt LNG in the country will have CCS from day one as part of its net zero emissions plans, Reuters reports. Final investment decision on the project is slated for the end of 2023, and is a joint venture between the French company, ExxonMobil, Santos, and stated-owned Kumul Petroleum. TotalEnergies delegate for Australia and PNG, Jean-Francois Hery, said the company planned to sell most of its gas allocation prior to the investment decision and was confident it would succeed. While the CCS element is being marketed to buyers, the gas is not currently being sold with an explicit low-carbon label.  The company’s senior vice-president for APAC, Julien Pouget, told the conference the CCS project would start with a 1 mln tonne capture capacity, and ramp up to a nameplate capacity of between 50 mln and 100 mln tonnes per year by 2050. The LNG aspect of the project is expected to begin operation in 2027-2028, Pouget, according to a separate article by Argus Media.

Forest plays — Australian mining magnate Andrew Forrest’s Squadron Energy has bought renewable energy player CWP Renewables for A$4 bln ($3.6 bln), outbidding energy players including Iberdrola, Tilt Renewables, and Origin Energy, RenewEconomy reports. Squadron said the deal takes its renewable energy operating portfolio to 2.4 GW, with an Australian development pipeline of 20 GW. “Squadron is proud to bring a very significant portion of Australia’s renewable energy assets home to local ownership. It means that Squadron has the renewable energy critical mass to help Australia step beyond fossil fuels,” Forrest said. The purchase of CWP follows Squadron’s previous purchase of renewable energy developer Windlab, the start of construction of the A$3 bln Clarke Creek wind, solar, and battery farm in Queensland, and the unveiling of a new 10 GW renewable hub in north Queensland.

What’s in a name — The massive Asian Renewable Energy Hub has been renamed, as part of the project’s new shift in focus, RenewEconomy reports. The project, set to be located in the Pilbara region of Western Australia, has been renamed the Australian Renewable Energy Hub. Operated by BP, after it bought a 40.5% stake in the project in June, the company said it will initially build around 3 GW of wind and solar to supply renewable power, and green hydrogen and ammonia to miners and industrial users in Western Australia. “We thought carefully about the project name, and decided we wanted to better reflect its prime location and showcase Australia’s natural assets, as well as the country’s aspiration to become a renewable energy superpower,” Lucy Nation, project director and APAC hydrogen vice president at BP said. The company said the capacity will still be built out to 26 GW, but with a focus on greening iron ore mining an processing, the start of green steel production, replacing diesel fuel used trains and heavy transport, local electricity generation, and in bunkering of green shipping fuels at Port Headland. The renewable energy was initially designed to generate green hydrogen for export to the region, however questions remain the costs of and technology of doing so.

If CO2 floats your boat – Singapore’s Global Centre for Maritime Decarbonisation has issued an invitation for proposals to evaluate the safety, technical, and operational requirements for offloading CO2 captured on ships, Argus reports. GCMD is part of a consortium that aims to study how best to offload liquefied CO2 from capture systems on board vessels, based on the proposals submitted. It expects to make one award in the Q2 2023 upon completing the proposal evaluations.

CCS deal – Australian firm KC8 Capture Technologies (KC8) announced a partnership with Australia’s largest cementitious products company, Cement Australia, where the partnership will see KC8 design, construct, and install a demonstration plant to capture CO2 at Cement Australia’s fully operational cement facility in Queensland, KC8 said in a press release. “KC8 has developed one of the most sustainable, cost effective, solvent-based carbon capture processes available today – The system has the potential to capture up to 95% of CO2 emissions from heavy industry sources, such as cement plants, power stations and other large CO2 emitting industries,” the company said. Labelled the PACER (Potassium Carbonate Absorption for Clinker Emissions Reduction) project, Cement Australia will support KC8 in scaling up their technology. The plant is estimated to be constructed by Q2 2023, with testing and full plant operation to follow.

AMERICAS

White House goes green – US President Joe Biden’s administration on Wednesday unveiled a new building performance standard that would require federal agencies to slash energy use and electrify equipment and appliances in 30% of their building space by the end of the decade, CNBC reports. The move is the latest push by the White House to curb fossil fuel use in residential and commercial buildings, which comprise about 12% of US GHG emissions, according to the EPA. Energy used in federal buildings for space heating, water heating, cooking, and other needs comprise more than 25% of federal GHGs, the White House said.

Offshore windfall – The Biden administration’s first offshore wind sale in the Pacific Ocean netted $757 mln at close Wednesday after a competitive two-day contest among energy companies looking to float turbines off the California coast, E&E reports. The Bureau of Ocean Energy Management offered five leases off the northern and central coast, a total area roughly the size of Los Angeles. The leases represent 4.6 GW of potential offshore wind electricity, enough to power 1.5 mln homes. Winning bidders included German utility RWE, Norwegian oil and gas giant Equinor, and multinational power generation and energy storage company Invenergy.

Permitting provision in peril – US Congressional Democrats decided not to speed up the permitting process with defense legislation after the left and right both railed against the idea, Axios writes. Congressional leaders on Tuesday opted against using a bill authorising military spending to finish a deal Democrats had made with Sen. Joe Manchin (D) on the permits. Biden’s deal with Manchin on permits led to a massive climate law being passed this summer with the Inflation Reduction Act. House Speaker Nancy Pelosi pitched lawmakers Tuesday on using the military bill as a vehicle for the trade. But environmentalists, progressives and Republican lawmakers all opposed it – just like they had three months earlier with a similar push. Energy developers, including wind and solar companies, want Congress to make permits faster, and that isn’t going away.

Conservation Canada – The Canadian federal government has committed as much as C$800 mln for four Indigenous-led conservation projects that total almost 1 mln square kilometers, PM Justin Trudeau announced during the UN meeting on global biodiversity in Montreal on Wednesday. The projects will be in British Columbia (BC), the Northwest Territories, northern Ontario, and Nunavut. Marine conservation in the Great Bear Sea in BC, boreal forest protection in the Northwest Territories, preserving the world’s third-largest wetland in Ontario and water conservation in Nunavut will involve 49 Indigenous communities in total. (Canadian Press)

Action-packed plan – The Canadian province of Nova Scotia released its new climate change plan on Tuesday outlining 68 actions towards reaching their goal of reducing emissions by 53% below 2005 levels by 2030, and net zero emissions by 2050. The Atlantic province plans to achieve its 2030 emissions target of 10.8 Mt, from about 16 Mt in 2020, through the phase-out of coal-fired generation, increasing the share of electricity from renewable sources to 80% from about 30% in 2021, reducing reliance on oil for home heating by at least 20%, and having 30% of new vehicle sales to be zero-emission vehicles by 2030. These projections do not include potential GHG reductions from the new provincial output-based pricing system, which covers the electricity sector and large industry after winding down its cap-and-trade programme this month. It also does not include a federal fuel charge rate on fossil fuels. Modelling was completed before the output-based pricing system programme was designed and the federal fuel charge rate was announced by the federal government, the plan noted. The province held its last cap-and-trade auction today.

VOLUNTARY

Coal for now – Switzerland-based mining and trading house Glencore expects to shut down 12 coal mines over the next 12 years even as the world’s largest mining company enjoys bumper profits because of high coal prices. It said it would accelerate the closure of several mines by 2035 in order to meet its emissions targets. However, its coal production is expected to be flat between 2022 and 2025, with guidance of roughly 110 mln tonnes a year, down from Glencore’s previous estimate, according to an investor update. The company will cut its full-scope emissions by 15% by 2026 and by 50% by 2035 compared with its 2019 baseline. (FT)

Gone with the Kyndryl – Kyndryl, the world’s largest IT infrastructure services provider, on Wednesday announced a plan to achieve net zero carbon emissions by 2040. In a press release, the New York-headquartered firm said it set interim 2030 goals to reduce Scope 1-2 emissions 75% below an unspecified baseline, achieve a 50% reduction in CO2 output across its global enterprise – also below an unspecified baseline – and obtain 100% of purchased electricity through renewable sources.

SCIENCE & TECH

Storage unit – Long-duration storage energy (LDES) projects around the world have attracted more than $58 bln in commitments made by governments and companies since 2019. If all these projects went forward, it would lead to the installation of 57 GW of LDES – the equivalent of three times the global energy-storage capacity deployed in 2022, according to analysis from Wood Mackenzie. The firm’s report on LDES published Wednesday found that projects representing $30 bln are now either under construction or in operation. However, most long-duration energy storage technologies are still nascent, and technology developers will struggle to scale cost-effectively before 2030. Currently, pumped hydro storage is the only LDES technology deployed on a large-scale and will continue to dominate the market until 2030.

AND FINALLY…

Sub-0 for 10 – During its executive board meeting on Tuesday, the International Olympic Committee (IOC) delayed selecting the 2030 Winter Olympics host city after discussing climate change and sustainability, CBS Sports reported. The decision, originally scheduled to be announced after the 2023 IOC session, was delayed to give the Future Host Commission more time to assess preliminary results of academic research showing a potential reduction in the number of climate-reliable hosts. A proposal to ensure climate reliability would require potential host countries to show average minimum temperatures of below zero degrees for snow competition venues during the Winter Games over a 10-year period. The IOC also discussed the rotation of the Olympic Winter Games within a pool of hosts. The board deliberated over a double award for hosting in 2030 and 2034 to create stability for winter sports and the Olympic Winter Games, but no conclusion was reached, the report stated.

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