CP Daily: Monday December 12, 2022

Published 03:15 on December 13, 2022  /  Last updated at 03:52 on December 13, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

IEA flags need for additional €100 bln for EU to cover Russian fossil fuel gap

Another €100 billion in public funds will be needed by the EU to address a gas supply gap next winter, the IEA said on Monday in a report presented alongside European Commission President Ursula Von der Leyen that further raises the potential for a fresh raid on EU ETS revenues.

ASIA PACIFIC

Philippines govt to review green laws with aim to kickstart carbon market

The Philippines government will be reviewing the introduction of regulations to facilitate the development of a carbon market in the country, local media reported on Monday.

Australia Market Roundup:  ACCU issuance slumps as government set to legislate energy price caps

The number of Australian Carbon Credit Units (ACCUs) issued inched downwards in the Clean Energy Regulator’s latest update, as the country’s gas industry has expressed outrage over the government’s plan to cap coal and gas prices in a bid to stave off soaring energy prices.

Australian renewable energy founders form ACCU carbon project business

The directors of an Australian renewable energy company have formed a new carbon project development business with a focus on nature-based projects to generate Australian Carbon Credit Units (ACCUs).

Sequestering CO2 key to reaching Australia’s net zero target, scientific agency says

Sequestration of CO2 will be a “key component” for Australia to meet its emissions reduction targets, with nature-based methods already able to provide lower cost and scalable solutions, while engineered technologies such as direct air capture (DAC) able to make a longer term impact with policy and investment backing to reach commercial maturity, according to a report released on Monday.

Korean securities firm to expand voluntary market presence with CIX deal

One of South Korea’s biggest asset managers has penned an MoU with Singapore exchange Climate impact X to broaden its presence in the voluntary carbon market, both internationally and as a provider of credits for Korean buyers.

China’s Shanxi passes new laws to regulate coal sector amid coal expansion

The government of China’s biggest coal-producing region has passed provincial regulations for the development of “clean coal”, with a special focus on data quality, amid the province’s continued coal expansion.

EMEA

Euro Markets: EUAs climb to 3.5-month high as traders await trilogue outcomes and position for options expiry

EUAs rose to their highest in more than three months on Monday as traders continued to position ahead of Wednesday’s options contract expiry, and watched for signals on the EU’s intentions on funding the energy transition ahead of talks on the REPowerEU initiative, while energy prices weakened as gas reserves appeared ample despite the cold snap.

EU Parliament industry committee report suggests EUA price corridor, dynamic MSR trigger

Setting a price corridor would be the most effective way to control the price trajectory of EUAs and reduce the influence of speculators, while changes to the MSR would enable the market to overcome emerging supply challenges amid rising costs of hedging power generation, according to a report published Friday.

Energy infrastructure at the core of EU’s foreign investment plan in first year

The board of the EU’s Global Gateway came together for the first time on Sunday, assessing the first year of the bloc’s response to China’s Belt and Road foreign investment initiative and seeking ways to involve the private sector.

ICE effects plan to let EU carbon permits be used for trader margin cover

Exchange operator ICE is proceeding with its plan to allow market participants to use EU Allowances as margin cover, it announced Monday.

VOLUNTARY

VCM Report: Bear market hits the bottom as Vanguard quits climate initiative

Voluntary offsets tumbled last week, sinking to year lows Wednesday that coincided with reports of Vanguard, the world’s second largest asset manager, pulling out of the Net Zero Asset Managers Initiative (NZAM).

Australian resources companies extend cooperation agreement on PNG carbon projects

Two Australian resources players have extended their cooperating agreement to explore the possibility of developing some 1.4 million hectares of rainforest in Papua New Guinea into a series of carbon offset projects.

Manulife joins Trillion Trees Initiative on heels of launching forest carbon fund

Financial services company Manulife on Monday announced its partnership with the World Economic Forum’s Trillion Trees Initiative, with the pledge aiming to help scale the firm’s newly launched carbon offset-focused fund.

Less than 10% of all UK banks endorse disclosure framework -report

Just 12 of the 130 banks headquartered in the UK have endorsed the framework set out by the Taskforce on Climate-Related Financial Disclosures (TCFD), according to research published Monday, with another study finding that the top 25 European banks fail to implement ambitious climate policies across their business.

SHIPPING

IMO to present revised climate plan for shipping at July meeting amid calls for short-term action

The UN’s shipping branch will adopt a revised greenhouse gas strategy at its next meeting in July, its secretary general announced on Monday as the current negotiating session kicked off in London aiming to craft a detailed plan for decarbonising the sector.

AMERICAS

Mexico’s updated Paris target backslides on already-meagre GHG reduction commitment -watchdog

A more ambitious climate target in Mexico’s updated Paris Agreement commitment is actually worse than its previous insufficient target due to higher baseline emissions and selective accounting, a watchdog group said Monday.

BIODIVERSITY (FREE TO READ)

COP15: “Glimmers of light” in dark landscape as IUCN documents restoration efforts

While extinction threats, tipping points, and ecological collapse have dominated newsfeeds at the COP15 biodiversity negotiations in Montreal, a new IUCN tool allows viewers to track progress on targets to restore degraded landscapes, providing “glimmers of light” in an otherwise dark landscape.

COP15: Is ambition on biodiversity dropping with the draft agreement’s bracket count?

Delegates met for the fourth day of official negotiations at the UN COP15 biodiversity talks on Saturday, where the pace of progress is accelerating to agree the text that will form the post-2020 global agreement – but only if “progress” is measured in “bracket count”, according to some groups of observers.

COP15: More than 100 investors sign on to biodiversity impact initiative

A group of global institutional investors launched the Nature Action 100 (NA100) at the UN’s COP15 biodiversity negotiations on Sunday, calling on the financial sector to help address nature loss through engagement and decision making which incorporates portfolio companies’ impact on biodiversity.

COP15: New tool revealed to track finance flows for biodiversity alignment

A new tool that tracks and rates $31 trillion in global financial flows for their biodiversity impact was launched on the sidelines of the UN’s COP15 biodiversity summit on Saturday, touted as a first step for broad-based financial realignment towards nature-positive outcomes.

Kering, L’Occitane Group back new Climate Fund for Nature with €140 mln

French luxury goods firm Kering and beauty goods retailer L’Occitane have pledged €140 mln to a new fund that will mobilise investments from the luxury fashion and beaty industries to protect and restore nature, focusing in particular on empowering women.

New technical paper proposes integrity principles for voluntary biodiversity credit framework

A new paper has outlined a series of integrity principles that could form part of a voluntary biodiversity crediting framework, likely to be key to scaling the nascent market and closing the current private finance gap.

Australian banks, super funds yet to pick up ball on nature risks

The vast majority of Australian banks and superannuation funds have yet to set nature-related targets, and only a small minority of them plan to do so, according to a survey released Monday carried out by the Australian Conservation Foundation (ACF).

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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

Clubbers assemble – The G7 economic powers decided on Monday to set up an international Climate Club and invited interested states that pursue ambitious climate policies to join it, G7 chair Germany said in a statement. The G7 is asking the OECD, in tandem with the IEA, to host an interim secretariat for the Climate Club, Germany added. German Economy Minister and Vice Chancellor Robert Habeck added the G7 wanted to bring climate-friendly commodities, such as green steel, onto the market more quickly and to improve the opportunities for them worldwide. (Reuters)

Inking the deal – Switzerland signed a climate protection agreement with Uruguay on Monday that will allow for bilateral trade under Article 6 of the Paris Agreement. The Foundation for Climate Protection and Carbon Offset KliK will initiate its activities in Uruguay to support the development of climate protection programmes with the aim to purchase the resulting ITMOs, Klik said in a release. The agreement was announced earlier in the year, and is among several the Swiss government has inked with other countries.

EMEA

No green peace – Environmental group Greenpeace has started legal proceedings against the UK government in a bid to the stop the award of more than 100 new licences to explore for oil and gas in the North Sea, the FT reports. The campaign group said it had applied to the High Court for a judicial review of the decision in October to approve a new oil and gas licensing round, the first for nearly three years. Two other climate groups, Friends of the Earth and Uplift, have written to the UK business minister Grant Shapps warning him that they believe the approval of the licensing process was “unlawful”, and calling for him to reverse the decision, taken by his predecessor. The UK, like many other countries, is looking to increase its energy independence in the wake of Russia’s invasion of Ukraine and Moscow’s weaponisation of its vast gas reserves. It argued as part of that strategy it would need to exploit the “full potential of our North Sea assets” at the time it approved the latest licensing round.

Coal own-goal? – There is continuing coverage in the UK of the news that the government has granted planning approval to a new coking coal mine in Cumbria. The Observer reports that “senior steel industry figures have rejected claims that their demand for coal has driven the government’s divisive decision to sanction the first new UK coal mine for 30 years”. It quotes Chris McDonald, chief executive of the Materials Processing Institute, which serves as the UK’s national centre for steel research: “The UK steel industry has been clear that the coal from the West Cumbria mine has limited potential due to its high sulphur levels. This, combined with the industry’s drive to decarbonise, means that by the time the mine opens, only one of the UK’s current four blast furnaces is likely to be able to use this coal, meaning that more than 90% of production will be exported. The situation is the same in Europe with even tighter sulphur controls and a faster drive to green steel, meaning that some companies will have moved away from coal completely by the mid 2030s.” Meanwhile, US climate envoy John Kerry last week said he is “closely examining” the matter over concerns that it will raise GHGs and send the wrong signal to developing countries. (Carbon Brief)

Missing the target – Gas savings in Germany are below the level necessary to avoid gas shortages, warned the German grid agency, as a 20% cut in gas consumption goal was missed last week amid a cold snap. In past years, about half of German gas imports originated from Russia. With these flows reduced significantly, and no capability to import LNG, the German regulator has rung the alarm, and the 20% savings target is at risk, with the current the total savings at only 13%, according to Klaus Muller, head of the German grid agency. Last week, the German weather agency warned that a mild winter was significantly less likely than a comparatively cold winter, at 5% for warmer and 38% for colder weather, respectively. (Euractiv)

Methane moves – Some EU countries are trying to weaken the bloc’s planned law to cut methane emissions in the oil and gas sector, documents show, weeks after the EU pledged at the COP27 climate conference to do more to tackle the potent greenhouse gas. The European Commission last year proposed legislation to require oil and gas companies in Europe find and fix leaky infrastructure allowing methane to escape. Checks would be required every three months, starting six months after the regulation takes effect. But EU countries, who are negotiating the law, want to delay the first survey to 12 months, and then set different timelines – in some cases less frequent – for checking different types of infrastructure, according to their latest draft compromise, seen by Reuters, which showed Hungary and Romania had requested weaker rules.

Slovak aid – A €250 mln scheme will help energy-intensive companies in Slovakia. The European Commission approved the measure to compensate the sector for higher electricity prices resulting from the impact of carbon prices on electricity generation costs, so-called ‘indirect emission costs’, incurred between 2021-2030 under the ETS. The final payment will be made in 2031 and the deadline for the payments of 2021 will be April 30 2023. The maximum aid amount per beneficiary will be equal to 75% of the indirect emission costs incurred. To encourage energy savings, the aid amount is calculated based on electricity consumption efficiency benchmarks. Beneficiaries will have to either implement certain energy audit recommendations, or cover at least 30% of their electricity consumption with carbon-free sources.

Jobs by the million – Nigeria’s vice president Yemi Osinbajo has declared that his nation’s participation in the carbon market could create 30 mln jobs in the next decade, with the potential to create more than 100 mln jobs through climate aligned projects by 2050, This Day reports. Osinbajo made this disclosure in a keynote address at a high-level international meeting on Africa Carbon Market Initiative (ACMI) hosted by the Rockefeller Foundation in New York City, USA, where he stressed the importance of building the carbon markets architecture in Africa. Read Carbon Pulse’s reporting on the ACMI and on how Nigeria is aiming to tap the voluntary carbon market.

ASIA PACIFIC

We need India – As the world is moving towards garnering energy support from cleaner sources, American plane maker Boeing on Sunday said that India is a priority country for its ambitious program which aims to decarbonise aerospace globally from both civilian and military aircraft, Mint News reports. This is part of the company’s efforts to chalk out a path toward a sustainable future. The senior official from the company claimed that it is capable of flying on 100% Sustainable Aviation Fuel (SAF) by the year 2030. “India is hugely important to Boeing and to our aviation business, but also to our sustainability journey. I think some of the commitments and potential that we see here in India to become self-reliant through the scaling of sustainable aviation fuel is really promising,” Brian, Boeing’s Vice President for Global Sustainability Policy and Partnerships told news agency PTI.

Give credits – A Hong Kong-listed electric vehicle (EV) charging solutions operator has started a carbon credit project, which would encourage local EV owners to earn revenue by selling Verra-certified carbon credits generated by their facilities through the city’s bourse, South China Morning Post reports. Cornerstone Technologies has talked to Hong Kong Exchanges and Clearing (HKEX) about how to operate the project on a newly established voluntary carbon credit trading platform, the company said. The Hong Kong government is aiming for all new cars sold in Hong Kong to be electric by as early as 2030.

More natural gas – The daily natural gas output of the Tarim Oilfield in Northwest China’s Xinjiang Uygur Autonomous Region, one of the main sources of the country’s west-to-east gas transmission, has surpassed 100 mln cubic meters (m3), Global Times reports. The cumulative natural gas output of the field increased to 30.3 bln m3 this year, adding 360 mln m3 from a year ago, according to the report. A total of 19 natural gas wells across the Tarim Oilfield are fully operational, supplying gas to nearly 400 mln people in 15 Chinese provinces and cities along the west-east natural gas transmission pipeline.

AMERICAS

Drive clean – The US EPA released its annual Automotive Trends report for 2021 model year vehicles showing vehicle fuel economy remained at record high levels of 25.4 miles/gal, while emissions reached record lows of 347 grams/mi, down on average by 2 g/mi for all new vehicles, the agency said in a press release. The report showed all vehicle types at record low emissions, with all 14 large automotive manufacturers achieving compliance with light-duty GHG standards through at least model year 2020, but the market has shifted away from cars and towards sport utility vehicles and pickups. The report also showed fuel economy in the US to have increased by 32% – or 6.1 mi/gal – since 2004, and emissions down 25% – or 114 g/mi – in the same period. Hybrid vehicles reached a new high of 9% of all production in model year 2021, while all zero emission vehicles including electric, hybrid, and fuel-cell vehicles reached 4% of nationwide production for the same period, the report noted.

Farmer funds – The US Department of Agriculture will distribute an additional $325 mln in funding for projects tailored to smaller-scale farmers to reduce their GHG emissions, taking its total annual investment in climate-friendly farming to more than $3 billion, the agency announced Monday. The money will fund 71 projects, ranging from $250,000 to just under $5 mln, which will aid small and historically underserved farmers in adopting and assessing lower-emission farming practices. Some projects will monitor and verify the benefits of climate-friendly farm practices like rotating crops, installing solar panels in farm fields and reducing fertilizer application. Others will provide technical assistance to help farmers adopt new practices and skills. (Reuters)

Lone neutral ranger – The Austin-Bergstrom International Airport earned a 3+ carbon neutral accreditation from Airport Carbon Accreditation, a global airport certification programme, for the second consecutive year, the Austin American-Stateman reported. The six levels of airport certification include: mapping, reduction, optimisation, neutrality, transformation, and transition. The carbon neutrality accreditation is awarded to an airport when the airport buys offsets for emissions that cannot be completely eliminated. The city of Austin’s Department of Aviation has reduced the airport’s carbon footprint by paying to provide airport shuttle buses that run on renewable natural gas (RNG) in partnership with RNG provider Clean Energy Fuels, using solar energy around the airport in partnership with Austin Energy, and collaborating with airlines to use more zero-emission ground service equipment. Austin’s airport is the only carbon neutral airport in the US and joins Ottawa’s Macdonald-Cartier International Airport as the only other North American airport at the same level of carbon neutrality, the report stated.

SCIENCE & TECH

Fusion breakthrough – US government scientists have possibly made a breakthrough in the pursuit of limitless, zero-carbon power by producing more energy than was absorbed in a fusion reaction, reports the FT. The federal Lawrence Livermore National Laboratory in California, which uses a process called inertial confinement fusion that involves bombarding a tiny pellet of hydrogen plasma with the world’s biggest laser, has achieved net energy gain in a fusion experiment in the past two weeks, although the data was still being analysed. The fusion reaction at the $3.5 bln US government facility produced about 2.5 megajoules of energy, which was about 120% of the 2.1 megajoules of energy in the lasers. Such was the power produced in the fusion experiment that some of the diagnostic equipment was damaged. In August last year, the research institute came the closest in the world to net energy gain when it produced 1.37 megajoules from a fusion reaction, which was about 70% of the energy in the lasers on that occasion. Earlier this year the Biden administration passed the Inflation Reduction Act, which included nearly $370 bln in new subsidies for low-carbon energy.

AND FINALLY…

Record “foot”print – The 2022 World Cup is forecast to have the highest climate footprint of all World Cups and Olympic Games held since 2010, according to an Energy Monitor analysis. The Qatar World Cup’s pre-event emissions estimates are slightly more than those of the Rio 2016 Summer Olympics, which was expected to emit 3.6 Mt of CO2e. A study of the sustainability of the Olympic Games shows that instead of being exemplars of sustainability – as they claim to be – the Olympics are becoming less, not more, sustainable over time. Analysing 16 games since 1992, the researchers conclude that “sustainability remains an elusive concept in the Olympic Games, and in mega-events more generally”.

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