CP Daily: Thursday December 8, 2022

Published 02:00 on December 9, 2022  /  Last updated at 00:25 on December 10, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

MSR raid may be back on the table as REPowerEU, EU ETS reform talks near end

An option to raise €20 billion for the REPowerEU package by selling allowances held in the supply-managing MSR is still being discussed by legislators in final negotiations, an MEP close to the process said Thursday, reflecting on a controversial idea that had been widely considered ‘off-the-table’.

ASIA PACIFIC

Australia flags tighter carbon control for large new projects, announces mechanism to invest in renewables rollout

Australia plans to impose stricter controls on greenhouse house gas emissions from large projects, including requirements to disclose plans to manage or offset emissions, Environment Minister Tanya Plibersek said Thursday.

Indonesian project developers feel stifled by certifier delays, govt regulations, industry head says

Around 200 Indonesian carbon projects are currently in the development pipeline, however developers feel stuck between adhering to the government’s new regulatory requirements and the hold-ups in international project registration and credit issuances in the VCM, according to an industry head who warned that developers are considering ditching international standards all together.

China sees potential in biochar, though regulatory clarity needed

There is considerable potential for China, the world’s largest rice producer, to reduce emissions in the agricultural sector through the introduction of biochar, though regulatory clarity is needed to further ignite project developers’ interest, according to an industry expert.

EMEA

Euro Markets: EUAs chart third consecutive gain on back of supportive technicals and fundamentals

EUAs rose 0.7% on Thursday for a third consecutive daily rise, with supportive factors including the first above-market auction of the month, elevated energy prices, and next week’s options expiry.

Business coalition calls for 2035 zero emissions law on new EU trucks

EUAs rose 0.7% on Thursday for a third consecutive daily rise, with supportive factors including the first above-market auction of the month, elevated energy prices, and next week’s options expiry.

UK, Switzerland agree to regulate bilateral flights under their carbon markets from 2023

The UK and Switzerland have agreed to include flights between the two countries under their respective carbon markets starting next year.

VOLUNTARY

Nature carbon fund manager eyes expansion, new funds in 2023

A nature-focused carbon fund manager is set to boost its portfolio of funds next year, with the owners eyeing what they see as growing demand for carbon credits from institutional investors.

Puro.earth adds enhanced weathering to list of removals methodologies

Enhanced weathering (ERW), which can remove CO2 from the atmosphere for 10,000 years with very low risk of reversal, has been accredited as a methodology for the first time by Puro.Earth in a move that could accelerate the supply of removal credits in the voluntary carbon market (VCM).

Asset manager aquires majority stake in forestry firm

A large asset management firm has announced the acquisition of a majority stake in a Danish company that provides management and consulting services for natural resource investments, including carbon credits and conservation projects.

Carbon platform owner Xpansiv shuffles leadership, expands board

Xpansiv, owner of the CBL carbon credit marketplace, has shuffled its leadership after a flurry of takeovers that includes registry administrator APX and the intermediary Evolution Markets.

US bank foundation pledges funds for blue carbon database

The charitable arm of a Tennessee-headquartered financial services firm on Wednesday committed an undisclosed amount of funds towards developing a database that will assess blue carbon credit potential over portions of the US coastline.

AMERICAS

NA Markets: CCAs cruise steadily higher, RGAs stagnate amid Q4 auction

California Carbon Allowance (CCA) prices moved steadily higher through the week as market participants dissected the odds of lawmakers adopting a stronger 2030 emissions reduction target, while RGGI Allowances (RGAs) traded within a tight range into the last quarterly auction for the year on Dec. 7.

US refrigerant carbon offset pilot project sells nearly 20,000 credits at “significant premium”

Five mid-size California grocery stores participated in a pilot project run by an industry group and an offset developer to ease the financial burden of transitioning to environmentally friendly refrigeration by selling thousands of carbon offsets, a press release announced Thursday.

INTERNATIONAL

Pivotal net zero role for carbon capture tech needs standard-setting, policy support to unlock financial access, conference panel says

Carbon capture technologies can play a key long term role in global efforts to meet net zero emissions ambitions, but this is only likely to be realised if financial and regulatory barriers are overcome and if standards are developed to promote a greater role for carbon markets, industry observers noted at a conference on Thursday.

Trafigura to focus on Article 6, nature-based removals for its carbon trading activities

Singapore-based commodity trading house Trafigura on Thursday said its carbon trading team will focus going forward on developments related to Article 6 of the Paris Agreement and its development of nature-based CO2 removal projects.

BIODIVERSITY

Australia to overhaul environment, biodiversity legislation after devastating review

Australia on Thursday announced it plans far-reaching reforms to its environmental and biodiversity protection laws in response to a recent independent review that concluded the nation’s nature is being destroyed.

Salesforce props up nature, climate groups with $4 mln in spending

Customer relationship management firm Salesforce on Wednesday announced a total $4 million in nature-related grants and accelerator funding for nine companies and organisation.

Biodiversity Pulse Weekly

A weekly summary of our biodiversity news plus bite-sized updates from around the world. All articles in this edition are free to read (no subscription required).

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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

Slow steaming – International and domestic shipping will need to more than halve its energy use by 2030 to align with Paris goals, a new 78-page report published today by the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping, reports shipping industry news publication Spash247. The industry uses approximately 12.6 exajoules (EJ) of energy each year, corresponding to around 300 mln tonnes of fossil fuels currently, according to the report. But to align with the Paris 1.5C trajectory, the industry must limit its fossil fuel consumption of the global fleet to approximately 6 EJ by 2030. Improving onboard energy efficiency by just 8% – or 1% per year until 2030 – could save around one EJ of energy, equivalent to 24 mln tonnes of fuel oil according to the report. To replace one EJ of fossil fuel, the number of vessels sailing on alternative fuels must increase from around 700 today to approximately 3,000 by 2030, with the report identifying the challenges to scale up alternative fuels. EU legislators have provisionally agreed that 40% of emissions from the maritime sector would be covered by the ETS market in 2024, rising to 70% in 2025 and 100% in 2026. As part of the deal, 50% of international maritime trips to Europe and from Europe are also to be included in the ETS, and 100% of trips that take place within Europe.

EMEA

Abuja expects – Nigeria’s vice president Yemi Osinbajo has arrived in New York for a high-level meeting to activate the African carbon market initiative (ACMI) launched at last month’s COP27 UN climate talks, The Cable reported. Osinbajo is expected to have a meeting that will lead to the mobilisation of funding and technical support for Nigeria’s energy transition plan – the strategy to reach net-zero emissions by 2060. On Friday he is expected to deliver a keynote address at a meeting organised by the Rockefeller Foundation, and attend meetings with global agencies and potential financial partners. Read Carbon Pulse’s reporting on the ACMI and on how Nigeria is aiming to tap the voluntary carbon market.

ArcelorMittal CCU – Luxembourg-based steelmaker ArcelorMittal has begun its CCU project at its Ghent steel plant in Belgium. The €‎200 mln project is the first of its kind for the European steel industry. Once production reaches full capacity, the Steelanol plant will reduce annual carbon emissions from the Ghent plant by 125,000 metric tonnes by converting waste and by-products into new products. (Steel Orbis)

Coal compensation – €1.4 bln in funding by the German federal and state governments has been allocated to the former lignite mining regions of Brandenburg, Saxony, Saxony-Anhalt and Thuringia for the period from 2023 to 2027. Since 1991, federal and state government have invested €11.9 bln in supporting these regions in coping with the consequences of lignite mining and in reusing and recultivating the previously used areas.

LNG whizz – New analysis by NewClimate Institute estimated that the eleven planned LNG terminals in Germany with a total capacity of about 73 bcm per year would allow the import of about 50% more gas than was obtained from Russia before the war at 46 bcm per year. The study argued that building LNG terminals would mainly minimise the risk of undersupply but would also threaten climate goals. The construction and operation of all planned LNG terminals would be in conflict with the climate protection goals and would therefore be a breach of the climate protection law and the international obligations under the Paris Agreement, the analysis argued, advocating instead for sustained gas demand reductions. Recent Carbon Pulse analysis also pointed to the emissions leakage headache of opting for LNG to replace pipeline gas.

H2 auctions – The German government has also launched a €900 mln auction scheme for green hydrogen imports, Clean Energy Wire reports. The idea of the so-called ‘H2 Global’ mechanism is to procure the fuel on the world market and sell it within the EU to the highest bidder. It is organised by the business-led H2 Global Foundation, said the economy ministry. Through an intermediary the foundation concludes long-term purchase agreements for green hydrogen and its derivatives, such as ammonia, methanol, and sustainable aviation fuel, to give hydrogen producers planning and investment security. On the other side, it concludes sales contracts in Europe. H2 Global buys the products at the lowest possible prices and then sells them on to the highest bidder. As this is expected to be a money loser, the government will cover the difference with subsidies. The first deliveries of these sustainable hydrogen derivatives to Germany and Europe are planned for the end of 2024. The economy ministry said the government plans to make a further  €3.5 bln available for new bidding rounds with durations up to 2036.

AMERICAS

Social cost court – A US federal appeals court appeared poised Wednesday to uphold the President Joe Biden administration’s use of an interim climate metric to estimate the costs of rising GHG emissions. n oral arguments, a three-judge panel on the 5th US Circuit Court of Appeals seemed sceptical that Republican-led states challenging the federal government had suffered any direct harm from agencies using the interim social cost of greenhouse gases (SC-GHG). The court had blocked an order from a lower bench earlier this year that briefly halted agencies’ use of the interim estimates, but until Wednesday, the 5th Circuit had not ruled on the substance of the arguments raised by Louisiana Attorney General Jeff Landry (R) and a coalition of other states. During Wednesday’s hearing, the judges repeated earlier critiques of the states’ claims. (E&E News)

Removal recommendation – Former US Energy Secretary Ernest Moniz called for creating a federal authority to pay for removing vast amounts of carbon from the atmosphere, saying the approach was needed to scale up an industry he called essential to fighting climate change. Moniz’s Energy Futures Initiative think-tank proposed establishing a National Carbon Removal Authority that would treat extracting carbon from the air as a public benefit, paid for with public money. The authority would begin operations in 2035, paying private companies to remove atmospheric carbon and either use it or store it. The authority would have a $33 bln budget to cover its first 10 years. (Bloomberg)

Exxon axes carbon – ExxonMobil on Thursday announced its corporate plan for the next five years, with a sizeable increase in investments aimed at emission reductions and accretive lower-emission initiatives, including its Low Carbon Solutions business, according to a company press release. The corporate plan through 2027 maintains annual capital expenditures at $20-$25 bln, while growing lower-emissions investments to approximately $17 bln. The plan is expected to double earnings and cash flow potential by 2027 versus 2019 and supports the company’s strategic priorities, which include leading the industry in safety, shareholder returns, earnings and cash flow growth; cost and capital efficiency; and reductions in GHG emissions intensity. More than 70% of capital investments will be deployed in strategic developments in the US Permian Basin, Guyana, Brazil, and LNG projects around the world.

CCS frontrunner Canadian crude producer Athabasca Oil may beat an alliance of the country’s largest energy companies in rolling out CCS in the oil sands, Bloomberg reports. Athabasca, Canada’s 10th largest oil producer, has partnered with Entropy to build a CCS facility at its Leismer oil sands site and plans to go ahead with the project next year, it said in its capital budget released Wednesday. The development is being funded by Entropy and will be built in as part of an expansion of Leismer oil sands well site in Alberta. It’s part of Athabasca’s plans to reduce emissions intensity by 30% by 2025. It’s on track to happen ahead of projects by the Pathways Alliance — made up of the largest oil sands producers including Suncor Energy, Cenovus Energy, and Canadian Natural Resources. Alliance members plan to invest C$24 bln ($17.6 bln) by 2030 to cut emissions, mostly through CCS.

Cypress thrill – California Resources Corp. (CRC) said it would capture CO2 emissions at a planned blue hydrogen facility at the Elk Hills Field in Kern County. The project would sequester 100,000 t/yr of CO2 at the Lone Cypress hydrogen project. The plant is set to be California’s first blue hydrogen facility, with production of 30 tonnes/day and the potential to double output. A final investment decision is targeted in late 2023, with full operations by the end of 2025. Blue hydrogen is produced from natural gas, with the CO2 generated during the methane reforming process captured and stored permanently underground.

ASIA PACIFIC

Do you see it now? – Japanese IT firm Fujitsu and Nomura Research Institute will later this month launch a demonstration project aiming to visualise all CO2 emissions involved in corporate supply chains, in a bid to make it easier to take action to reduce the climate impact of those supply chains, Nikkei reports. Once they establish that it is possible to share CO2 data, they intend to build a system that can be scaled up globally. From April next year, some 30 companies are expected to participate in a test phase, including large Japanese corporations such as Honda, Canon, and Mitsui & Co.

CCUS action – Oil major Shell has signed an MoU with India’s Oil and Natural Gas Corp. to study the potential for collaboration on joint CCUS projects in key basins in India, including depleted oil and gas fields and saline aquifers, ONGC has announced. The partners will look for viable project sites to store CO2 as well as enhancing oil recover, the announcement said.

VOLUNTARY

Bad cake, nice icing – Macquarie is rejecting almost all proposed carbon offset projects because they fall below the firm’s standards, a bank official said at the Asia Climate Summit in Singapore this week. The Australian bank has reviewed 110 projects since February, and “probably like 90% of them are out,” said Suraj Vanniarachchy, a vice president at the lender. That’s due to “missing elements” related to the quality, permanence, and economics of the projects, he said, according to Bloomberg. Macquarie has encountered instances of “the same land, same projects claimed by different project developers” Vanniarachchy said, with local communities having been left in the dark. “I think people are trying to bake the cake with very bad ingredients and put a nice icing.” Macquarie is angling for a slice of the voluntary carbon market, having expanded its global carbon team this April to add four hires including Vanniarachchy to find and fund new projects. Though the team is adding to its pipeline, its approach to development is not “very aggressive,” Vanniarachchy said. “We are not saying we want to develop 1,000 projects … We probably do one or two good ones.”

Hoosier help – The Indianapolis City-County Council voted 18-5 Monday to support an effort to protect and generate revenue for the maintenance of urban forests and trees throughout the city of Indianapolis and Marion County. The special resolution supports the city-county council’s exploration and development of a forest and tree carbon credit resolution and requires an update on this process within a year. It also calls for a carbon programme that would fund the US city’s urban forests and trees. (Indiana Environmental Reporter)

AND FINALLY…

Rome’s re(Greta)ble solar row – A row has broken out over two “ugly” solar panels intended to power the lights on Rome’s traditional Christmas tree, The Guardian reports. There is always much anticipation in the Italian capital when the fir arrives at the Piazza Venezia in the historic centre – a UNESCO world heritage site – with many giving their view on the choice of decoration. The 2017 incarnation made headlines around the world when its threadbare appearance drew comparisons with a toilet brush. This year it was the decision to install two giant solar panels at its base that sparked a row. Vittorio Sgarbi, an art critic and undersecretary at the culture ministry, described the initiative as “an exhibition of bogus environmentalism”. He said he had sought clarification from Rome’s superintendent for archaeology as he wages his battle “in defence of the landscape”. “This is an idea a la Greta Thunberg,” he said.

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