Newsletters > CP Daily: Tuesday December 13, 2022

CP Daily: Tuesday December 13, 2022

Published 02:20 on December 14, 2022  /  Last updated at 02:26 on December 14, 2022  / Carbon Pulse /  Newsletters

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

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TOP STORY

EU legislators strike provisional deal to impose carbon border measures 

EU legislators reached a provisional agreement early on Tuesday to impose a carbon border adjustment mechanism (CBAM) on selected imported goods, though the pace of its replacement with EU ETS free allocation as a carbon leakage protection measure is yet to be determined.

ASIA PACIFIC

India’s parliament approves bill to establish framework for carbon trading, mandate green energy use

India’s upper house has voted in favour of a bill that will facilitate a framework for developing a carbon market in the country following passage in the lower house earlier this year, paving the way for it to become a tool to help the country meet its energy transition goals.

China’s Zhejiang completes first batch of forest carbon sink transactions

Zhejiang, a coastal province in East China, has recently completed its first batch of forest carbon sink transactions in the years-long absence of a national offset market.

INTERVIEW: Scalable, affordable DAC technology much closer than govts think, project proponent says

The developer of a Direct Air Capture (DAC) project in New Zealand says the technology is maturing at a much faster rate than previously expected by governments, urging them to begin regulatory planning in order to reap the benefits it could potentially provide.

Australian govt seeks stakeholder views of GO scheme proposals for hydrogen

The Australian government is seeking views from stakeholders on two policy papers that is has drafted for a proposed Guarantee of Origin (GO) scheme for hydrogen and renewable electricity certification, it has announced.

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.

AMERICAS

ANALYSIS: With Virginia’s RGGI repeal pending, are emitters’ obligations going up in smoke?

Power generators in Virginia still face legal ramifications to meet their RGGI obligations for all of 2023 and potentially later years as well, despite the state’s plan to sever the carbon market regulation before the programme’s three-year true-up deadline, experts told Carbon Pulse.

Quebec readies final offset protocol for afforestation and reforestation projects

The Quebec environment ministry (MELCC) on Tuesday said the government now recognises carbon offsets from privately-owned afforestation and reforestation projects under the state’s cap-and-trade programme, with the province’s approach having several differences from WCI partner California’s forestry protocol.

Washington to provide guidance on double compliance for carbon market power exporters

The Washington State Department of Ecology (ECY) plans on issuing a guidance document concerning double compliance obligations for cap-and-trade regulated power exporters to California before the end of the year, the department told Carbon Pulse.

EMEA

EU’s Innovation Fund to disburse €62 mln for small-scale projects

The EU is investing over €62 million in 17 small-scale clean tech projects, the European Commission said on Tuesday, detailing a fourth round of grant awards under the ETS-powered Innovation Fund.

Oil major’s forestry project in Congo comes under fire over land rights

A forestry project in the Republic of Congo co-developed by oil major TotalEnergies has been criticised by investigative journalists and campaigners for its treatment of local people.

Euro Markets: EUAs drift as traders focus on REPowerEU, ETS reform talks in Brussels ahead of options expiry

EUA prices slipped on Tuesday as the market continued to focus on political negotiations on EU ETS reform and potential additional auctions from next year as well as Wednesday’s expiry of the December options contract.

VOLUNTARY

ISDA publishes documentation for the trading of carbon credits

The International Swaps and Derivatives Association (ISDA) published new industry documentation for the trading of verified carbon credits on Tuesday, as it seeks to develop legal and risk management standards for markets related to environmental activities.

Investment manager CAM raises $650 mln for natural capital funds

Investors have committed $650 million to two natural capital funds managed by Climate Asset Management (CAM), one of which will seek to create a pipeline of high-quality carbon credits.

INTERNATIONAL 

Two-thirds of companies fail to improve on environmental impact score in 2022

Two-thirds of companies that needed to improve on environmental impact scores failed to do so in a 2022 based on an annual climate change disclosure rating, as just 1.3% of those surveyed met the highest criteria.

BIODIVERSITY (FREE TO READ)

COP15: Finance tops list of crunch issues as ministers arrive in Montreal for high-level section of talks

Ministers and other top delegates have started to arrive at the UN’s COP15 negotiations ahead of the Dec. 15-17 high-level segment that is meant to polish off a new global agreement on biodiversity.

COP15: Seven nations sign up to Canada-led Sustainable Critical Minerals Alliance

A new international alliance has formed on the sidelines of COP15 in Montreal to ensure the prevention of biodiversity loss, engagement with Indigenous communities, and the phasing out of greenhouse gas emissions from mining of critical minerals.

Iberdrola commits to net positive impact on nature by 2030

Spain-headquartered renewable energy generator Iberdrola has committed to ensuring all its global facilities will have a net positive impact on nature by 2030.

INTERVIEW: Search for biodiversity metric gold standard holds risks for some

Reaching consensus on which metrics can most accurately quantify biodiversity impact is considered crucial to support streamlined government and corporate reporting, and could underpin the emergence of a voluntary biodiversity credit market, but it could also come at a great cost for some.

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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

Advertising red card – Carbon Market Watch has filed multiple legal complaints in Europe regarding international football body FIFA’s claim that the 2022 World Cup in Qatar is carbon neutral. In it’s complaint to the Belgian advertising ethics panel, CMW argued that FIFA’s marketing was misleading and false and in breach of the rules and codes of the Jury d’ethique publicitaire (JEP). In particular, the watchdog argued that the “carbon neutral” nature of this World Cup had not been certified or validated by any independent body, that the methodology used by FIFA to measure its “carbon neutrality” was erroneous and resulted in a significant underestimation, and that FIFA also failed to meet its obligations in terms of offsetting to support its carbon neutrality communication. Thus, the plaintiff advanced that FIFA was in breach of articles 1, 4, 6, 9, 11, 22, D1, D2, D3 of the ICC Advertising and Marketing Communications Code and articles 1, 3, 7, 8, 10 of the Ecological Advertising Code. Similar claims have been simultaneously launched in France, the Netherlands, the UK, and Switzerland. The relevant authorities in Belgium, France, the Netherlands, the United Kingdom, and Switzerland announced that all five complaints would be examined jointly by the Swiss authorities. CMW released a study earlier this year that found the event’s projected emissions may have been understated and the carbon credits used lack environmental integrity. The World Cup, which ends this weekend, is projected to emit 3.63 MtCO2e, according to a separate study commissioned by the organisers, which would make it one of the most polluting sports events in human history.

EMEA

Gas impasse – EU countries aim to finally agree on a price cap for gas on Monday, even though some countries still fear a price ceiling might cause more problems than it solves, Czech Industry Minister Jozef Sikela said on Tuesday after chairing a meeting of EU energy ministers. Sikela said the ministers had requested expert advice before their next meeting on Monday on the level of the price cap, as some countries still fear it will cause bigger problems than the current energy crisis. He added that the proposal for the cap would include ways to suspend it if it turns out it doesn’t function well. (Reuters)

Belgian blast-off – Belgium will impose new taxes on older, noisier planes as well as private jets and short haul flights, according to a government statement reported by Reuters. Currently, aircraft using Brussels Airport have to pay a tax determined by the noise level generated at take-off and landing. Until now, small planes such as private jets have been exempt. As of April 1 2023, taxes will not only be dependent on noise, but on air pollution, greenhouse gas emissions and the destination of the flight and duties will increase for flights shorter than 500 km. In April 2022, Belgium introduced a €2 tax per passenger on EU routes and a new boarding tax to encourage alternatives to short haul flights. For flights under 500 km from Brussels airport, this tax rises to €10 per passenger. For destinations further afield, it is €2-4, while transit passengers are exempt. The move led low-cost carrier Ryanair to close its Brussels Zaventem airport base this winter citing “unsustainable” cost increases.

Sky high Norwegians – Norwegian air travel emits nearly double the CO2 emissions per passenger compared to the global average, according to a study by Norway’s University of Science and Technology (NTNU), reports schengenvisa. The data provided by the International Council on Clean Transportation (ICCT) has revealed that Norway’s aviation emissions are twice that of France, Sweden and Germany. Part of the reason why air travel emission is so high in Norway is the country’s geography, littered with fjords and mountains. The routes Oslo to Bergen and Oslo to Trondheim alone account for nearly 20% of the emissions on domestic routes. “On average, each Norwegian contributes about 580 kg of CO2 through domestic and international flights. This amounts to 7.3% of Norwegians’ CO2 footprint and is more than twice as high as the world average of 2.8%,”  Helen Muri, climate researcher at Norway’s University of Science and Technology.

Fresh funding  – The UK government has announced £102 mln of new funding to support clean energy production in the UK. The funding includes £77 mln to bolster nuclear fuel production and support the development of the next generation of advanced nuclear reactors, along with £25 mln to accelerate the deployment of hydrogen BECCS. In the nuclear package, the government provides £60 mln to kick start the next phase of research into the new cutting-edge high temperature gas reactor (HTGR), a type of advanced modular reactor (AMR), which could be up and running by the early 2030s. By generating temperatures of up to 950C, HTGRs provide a source of clean, high temperature heat that could help decarbonise industrial processes in the UK. There is also £4 mln for the AMR carbon capture programme, and up to £13 mln for nuclear fuel fabricators Westinghouse to help the company develop the capability to making both reprocessed uranium and freshly mined uranium.

Financing the freeze – The UK grid spent more than £27 mln in just one day paying power stations to crank up supplies at short notice, a cost that will ultimately fall on already stretched consumers, Bloomberg reports. During this week’s winter cold spell, one gas-fired power station operated by a unit of Vitol Group, earned more than £11 mln, according to figures from Enappsys. Another gas station earned about £12.6 mln. Meanwhile, two coal-fired power plants that were put on emergency standby and advised that their generation could be needed to ‘keep the lights on’ were ultimately told to stand down as the UK’s energy needs were met by other sources, including a pickup in wind power.

ASIA PACIFIC

India bound – India could attract close to $10 billion in renewable energy investment in 2023, a bright spot as public markets remain largely shut to big-ticket capital raising, according to Bank of America top executives in the country, Economic Times reports. Deals and investments will continue to flow into areas such as electric vehicles and green hydrogen, Kaku Nakhate, the lender’s president and India country head, said in an interview, as investors look to reflect the energy transition in their portfolios. “If you really have to get your ESG story right, and if you are into energy, then you can do large pieces of work in India,” Nakhate said. Investors and companies attending the bank’s recent North American roadshow were impressed by the Indian government’s clear targets to achieve net zero carbon, Nakhate said. “People take us seriously,” she said. “That’s why we are seeing more sustainability funds that want to invest in India.”

Gas wars — Australia’s aluminium giants have welcomed the federal government’s plan to cap gas prices to A$12 per gigajoule, saying their mines and processing plants are at risk of becoming inviable without urgent price release, the Nine newspapers report. The gas industry has continued to warn that the proposed cap would deter vital future investments and imperil energy security, however industry representatives for aluminium companies including Rio Tinto, Alcoa, and the Portland and Tomago, welcomed the Albanese government’s intervention. Aluminium Council of Australia chief executive Marghanita Johnson said the industry had seen a four-fold increase in prices offered for gas-supply contracts in the past year alone, as a result of Russia’s invasion of Ukraine. She said the government’s bill struck the right balance between maintaining trust of trading partners and global investors with the needs of domestic consumers. Meanwhile, several gas companies including Woodside and Shell have called off talks with prospective customers for new gas supplies amid uncertainty over the impact of the new regulations.

Individual contributions – China’s Shenzhen City has recently completed its first carbon trading by individuals, marking a milestone in the city’s push to establish a regional “inclusive” offset programme designed for the public, China Daily reports. Reduced emissions are calculated through Blue Planet, a WeChat service jointly developed by the municipal environment bureau, Shenzhen-based China Emissions Exchange, and Tencent. Emission reductions made by Shenzhen residents through green travel were listed and traded on the local bourse for an undisclosed amount, while users were offered free subway tickets as an incentive, according to the report.

AMERICAS

Brazilian deforestation spikes – Deforestation in the world’s most biodiverse savanna, the Brazilian Cerrado, rose by around 25% in the 12 months through July from the previous period, two people familiar with the still unreleased government data told Reuters. Brazil has yet to publish its official annual figures for Cerrado deforestation, based on satellite analysis by the government’s space research agency Inpe. The sources requested anonymity as the data is not yet public. Such an increase would mean more than 10,000 sq km (3,861 sq mi) of forest and other native savanna vegetation were destroyed in the 12 months, the most since 2015.

US DAC funding – The US Department of Energy on Tuesday agreed to commit $3.7 bln to finance projects to remove planet-warming carbon from the atmosphere and meet the US goal of net-zero GHGs by 2050, Reuters reports. The announcement formalizes a previously announced plan to finance four DAC hubs to draw CO2 from the air and store it underground. The agency also outlined programs to bolster research on carbon removal technology and fund grants to state and local governments and utilities for carbon capture. The initiatives are funded by the Bipartisan Infrastructure Law. The proposed DAC hubs will yank at least 1 Mt/yr of carbon from the atmosphere, for storage underground or conversion into products. Applications for the hubs are due early next year, and it will likely be at least two years before they are in operation, the Department of Energy said.

ATL cred – The City of Atlanta adopted legislation last week to use an 87-ha old-growth forest called Lake Charlotte Nature Preserve for its voluntary carbon credit programme. Atlanta will pay non-profit registry, City Forest Credits, $392,500 to apply for credits an evaluate their worth. The city said it plans on generating millions of dollars for conservation through the programme and has until Jan. 5, 2023 to apply for the credits. (Axios)

VOLUNTARY

Lifetime balance – Global financial services firm Guardian Capital Group Limited announced plans on Tuesday to remove its lifetime carbon balance (LCB) – the total GHG emissions from its operations since the company’s inception in 1962 to Dec. 31, 2021 – by 2040, through annual investments in Swiss non-profit The Pond Foundation’s carbon removal projects. Guardian’s emissions for the first year will be offset through investments in three projects: Ricehouse, Durell Rewild Forest Restoration, and Tanoe-Ehy Forest, the company said in the press release. Guardian’s total LCB emissions were assessed at 35,219 tCO2e based on the Greenhouse Gas Protocol, an international standard for corporate accounting and reporting of emissions, which categorises Scope 1, 2, and 3 emissions, based on the source, the company noted.

SCIENCE & TECH

Cloudy outlook – Almost $250 bln of existing and planned hydroelectricity projects and assets are dependent on threatened forests, according to a new report urging nations and investors to collaborate to protect key natural ecosystems that are critical to achieving net zero emissions. Climate and nature-based asset solutions specialists Earth Security has published a new report examining the “cloud forests” across 25 countries that are crucial to supporting the creation of hydroelectricity. The Cloud Forest Assets: Financing a Valuable Nature-based Solution found that almost 1000 hydropower dams are currently operating in countries where more than half of water demand comes from “cloud forests”. The report warns that of the 1,084 dams that are at various stages of planning to support the energy transition across these cloud forest countries, 684 – almost two-thirds – are set to rely on cloud forest water in the future. (edie)

AND FINALLY…

Entertainment edition – Blue Carbon – a musical documentary on coastal ecosystems that sequester carbon – has been given the green light, Deadline reports. The full-length film will feature music from Wu-Tang leader RZA and Brazilian artist Seu Jorge, and it is being supported by Conservation International alongside a number of European broadcasters, including NDR which has pre-bought German rights. The documentary will be fronted by producer, DJ, and marine biologist Jayda G as she explores how we are losing these unsung ecosystems at an alarming rate, how Blue Carbon can help mitigate the effects of climate change, and how we can protect the fragile ecosystems from further destruction. The project will take in shorelines from Senegal and Vietnam to France, Miami, Brazil and Colombia. Due to be completed in spring 2023, producers are lining up an education and outreach campaign that will generate grassroots activism around blue carbon ecosystems and they plan to engage policymakers about how to harness nature-based solutions to help conserve blue carbon. Separately, on Tuesday the music video for Don’t Ruin My World by reggae icon and humanitarian Julian Marley debuted at the launch of the “World Restoration Flagships Programs” – a UN initiative that has recognised 10 exemplary restoration projects for their ambitious, promising, and inspirational works. The song was commissioned by forest conservation company Everland. An accompanying press release reads: “437 million hectares of tropical forest has already been lost in the past two decades, equivalent to 2.5 times the size of the US, with deforestation continuing to take place at a rapid rate of 25 million hectares per year.” “I created this song for Everland to help get the word out about the urgent need to protect nature and life on Earth. It’s an anthem to amplify the voices of young people who are anxious about the climate crisis and are demanding that those in charge do what is right to safeguard their future before it’s too late,” added Julian Marley.

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