CP Daily: Tuesday December 20, 2022

Published 03:44 on December 21, 2022  /  Last updated at 03:49 on December 21, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

INTERVIEW: Wisconsin county to pursue largest forestry VER project of its kind

A northern Wisconsin county recently won approval to enter into a contract to generate voluntary carbon credits from over several hundred thousand acres of forestland, with a local representative overseeing the project casting aside doubts he had about its environmental integrity.

AMERICAS

British Columbia strengthens 2030 LCFS target to most stringent in North America

The British Columbia government on Tuesday announced it has completed amendments to tighten the carbon intensity (CI) targets of the province’s Low Carbon Fuel Standard (LCFS), making them the most stringent in North America for 2030, while also tripling the non-compliance penalty under the transportation sector programme.

Washington offers under 10% of annual emissions budget in inaugural carbon auction

The Washington State Department of Ecology (ECY) will make available fewer than 10% of the state’s 2023 GHG cap at the jurisdiction’s first ever cap-and-invest sale in February, according to an official notice published Tuesday.

California gasoline and diesel sales take divergent routes in September

Gasoline sales in California for September fell from last month’s annual high, while diesel consumption jumped to its highest point since June, according to state data released Tuesday.

Massachusetts December GWSA auction recedes from record high

Power generators regulated under Massachusetts’ Global Warming Solutions Act (GWSA) carbon market purchased allowances at the December current and advance auction at lower prices than the record-setting sales this fall, according to results published Tuesday.

PIMCO-affiliated company secures $100 mln for carbon credit fund

An affiliate of a US-based investment firm with more than a trillion dollars of assets under management has launched a fund focused on carbon credits, expanding upon its environmental commodity market offerings, according a US Securities and Exchange Commission (SEC) filing.

VOLUNTARY

Oil major admits Indigenous people could miss out on benefits from Congo reforestation project

A major oil company is considering extending the area of its reforestation carbon credit project in the Republic of Congo, after details were brought to light by Carbon Pulse about how some Indigenous people living within the original remit of the venture will not be entitled to receive compensation and benefits.

Standards body refutes claims of not consulting local people in huge forestry project

A critical letter about the treatment of indigenous people in a jurisdictional forestry conservation project in Guyana involving the oil major Hess has been refuted by the standards body crediting the scheme, the jurisdictional Architecture for REDD+ Transactions (ART) programme.

Fund launches call for climate contribution projects ahead of third cash allocation

A fund set up as an alternative to carbon offsetting has launched a three-pronged call for proposals ahead of its third round of allocations of grants and pre-purchases in Q2 2023.

EMEA

Financials haven’t impacted EU carbon price much, but ETS trade data needs improvement -European Parliament study

A study commissioned by a European Parliament committee has found that financials probably haven’t had much impact in influencing price dynamics and volatility in the EU carbon market, though the authors echoed calls for ongoing monitoring and better trading data quality and availability.

Euro Markets: EUAs top €90 amid steady buying in thin trade as energy prices weaken further

Dec-23 EUAs posted strong gains on their first day as the benchmark contract as traders began to accumulate positions in the new front-December contract amid relatively light volumes, while energy prices continued to decline amid forecasts for milder temperatures and a new EU gas price cap deal.

ASIA PACIFIC

New Zealand proposes to apply “lowest possible” cost on agricultural emissions

The New Zealand government has detailed how it would price agriculture emissions, making further concessions to the primary sector as it attempts to balance what is practical to implement, politically palatable, and effective in cutting pollution.

Australia releases emissions reduction consultation on National Energy Objectives

The Australian government is seeking feedback on draft legislation released Tuesday that looks to include emissions reductions as part of the country’s National Energy Objectives (NEO).

Including cement in China’s ETS needed to realise decarbonisation -industry group

China should accelerate the inclusion of the cement industry in the national emissions trading market and leverage the role of carbon pricing to push for decarbonisation, as low-carbon technology is likely to increase cement production costs and create a significant green premium in the near term, an industry group has urged.

Australian miner Fortescue signs MoU to develop green steel plant in Europe

Australian iron ore producer Fortescue Metals Group (FMG) has signed a Memorandum of Understanding (MoU) with three partner companies to develop technology for net zero emissions ironmaking, the company announced on Tuesday.

Australia Market Roundup: ACCU price reaches 5-month high on bullish sentiment, CEFC reaches renewable investment milestone

The spot price for Australian Carbon Credit Units (ACCUs) inched up to a five-month high over the last week, thanks to a flurry of end-of-year activity in anticipation of market reforms, according to analysis.

INTERNATIONAL

Removals need subsidies higher than carbon price due to greater impact, say researchers

Carbon removal technologies need government subsidies higher than the price of carbon prices because they have a greater overall impact on the atmosphere than efforts to reduce emissions, according to a study published on Tuesday.

UNDP and Klik Foundation sign MoU for international carbon trade

The United Nations Development Programme (UNDP) and Switzerland’s Klik Foundation have announced that they wish to cooperate in their climate protection efforts under Article 6 of the Paris Agreement as part of a Memorandum of Understanding (MoU), they announced Monday.

BIODIVERSITY (FREE TO READ)

Biodiversity market stakeholders grapple with balancing steady demand, quality supply

The need to incentivise demand to invest in biodiversity as a tradeable commodity versus the value of high-quality, diverse ecosystem supply in the evolving biodiversity credit market architecture is creating challenges for market proponents.

EU ministers call for dedicated financing and consideration of national context in future biodiversity law

EU environment ministers welcomed nature restoration proposals from the European Commission during a preliminary discussion on Tuesday, but several major economies in the bloc expressed concern over the finances needed and that national contexts be fully taken into account.

COMMENT

Nature Positive must build on lessons learned from implementing the mitigation hierarchy

There is a risk that references to nature positive goals will become a tactic used to distract consumers and the public from a continued failure to manage development impacts on biodiversity. This risk must not be overlooked as implementation of the Post-2020 Global Biodiversity Framework begins, write a group of biodiversity and conservation experts.

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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

Gasping for ambition – UN secretary general Antonio Guterres will hold a “climate ambition summit” in September to challenge leaders of governments and businesses to come up with new, tangible, and credible climate action to accelerate the pace of change and confront the existential threat of the climate crisis, the Guardian reports. “We are still moving in the wrong direction…The 1.5C goal is gasping for breath,” said Guterres. He said the invitation to the summit is open but there will be “no room for backsliders, greenwashers, blame-shifters, or repackaging of announcements of previous years”.

BeyondNetZero’s Billions — Private equity firm General Atlantic’s BeyondNetZero said it has secured $3.5 bln to back companies that can help in the world’s fight against global warming, Reuters reports. General Atlantic raised $2.6 bln from institutional investors including sovereign wealth funds and multinational companies for an inaugural fund. An additional $900 mln will come from existing General Atlantic funds, BeyondNetZero Chairman John Browne told Reuters. Launched in 2021, BeyondNetZero aims to invest up to $200 mln in individual companies that can help cut emissions, particularly in decarbonisation, resource conservation, energy efficiency, and emissions management, Browne said.

EMEA

Subsidy buddies – The economy ministers of France and Germany have proposed a joint paper on how Washington should tweak its subsidy-laden IRA climate law and how Brussels should respond. They want “a green economic partnership” with common rules on access to subsidy packages, Politico reports. The pair will head to Washington next month for talks but have urged the EU to come up with a new fast-track procedure for clearing subsidies in “key industrial sectors.”

Futuristic hydrogen – Saudi Arabia’s $500 bln NEOM venture, a futuristic city being developed in Tabuk, has signed agreements with banks to build the world’s largest green hydrogen-based ammonia production plant, Oil and Gas Middle East reports. The plant will use 4 GW of renewable power from solar, wind, and storage to produce 600 tonnes per day of hydrogen. The project, set to come on stream in 2026, is expected to produce about 1.2 mln tonnes of green ammonia per year. NEOM Green Hydrogen Co (NGHC) plans to “leverage the expertise and vision of its partners to accelerate the global green hydrogen economy,” David Edmondson, CEO of NGHC said.

First offshore CCS in Italy– Italian energy company Eni, known as one of the world’s major oil companies, is joining forces with energy infrastructure company Snam to build Italy’s first offshore CCS project, Eni announced. The first phase of the project will capture 25,000 tonnes of CO2 from Eni’s Casalborsetti, a natural gas treatment plant in Ravenna. Once captured, the CO2 will be piped to the Porto Corsini Mare Ovest platform and injected into the depleted gas field offshore Ravenna for permanent storage. “Phase 1 of the Ravenna Project will allow to reduce emissions from the Casalborsetti power plant, launching in Italy a project based on a mature technological process that is key for the achievement of our climate goals,” said Eni chief executive Claudio Descalzi. Eni has committed to a net-zero 2050 target. The Italian energy company envisage a 35% reduction in absolute 1, 2 and 3 emissions by 2030 and 80% by 2040 compared to 2018 levels. In addition for scope 1 and 2 emissions only, Eni has a target to cut 40% in 2025 compared to 2018, as well as a net-zero target of 2035.

Just for Italy – Italy will receive €1 bln under the Just Transition Fund (JTF) following the adoption of its Territorial Just Transition Plan (TJTP), the European Commission announced. This EU support aims to help deliver a just climate transition in Taranto, Apulia, and in Sulcis Iglesiente, Sardinia, by fostering economic diversification and job creation in green sectors, including renewable energy. Separately, the European Commission said it found the amendments to an existing Italian guarantee scheme to support companies in the context of Russia’s war against Ukraine to be in line with the State Aid Temporary Crisis Framework. The scheme includes the introduction of the possibility, for energy-intensive businesses, to obtain guarantees to cover their liquidity needs.

And for Poland too – The European Commission has approved a €1.1 bln Polish scheme to support particularly affected energy intensive companies in the context of Russia’s war against Ukraine. The scheme was approved under the State aid Temporary Crisis Framework, adopted by the Commission in March and amended in July and October. Under this measure, which will be administered by the Polish Ministry of Development and Technology, the aid will take the form of direct grants. The measure will be open to small and medium-sized enterprises and large companies that qualify as energy intensive businesses and that are active in particularly affected sectors and sub-sectors.

Gas stats – European countries collectively reduced their gas consumption by 20.1% compared to the average of the same months between 2017 and 2021, according to figures released on Tuesday by Eurostat, the EU’s statistics body. The figures will be an encouragement for EU countries, which have sought to slash their gas consumption and boost energy savings amid falling gas supplies from Russia in the wake of the Ukraine war. They also coincide with a warm autumn, which delayed the start of the winter heating season. In response to the energy crisis and increasing cut-offs of Russian gas flows, EU capitals signed up in July to a voluntary target to decrease gas consumption. The aim is to reduce gas use by 15% between August 2022 and March 2023 compared to the last five years – a target that could be made mandatory in case of emergency. (Euractiv)

Crisis response – Germany’s energy consumption in 2022 went down by 4.7% compared to last year, hitting its lowest level since the country’s reunification, according to preliminary data by energy market research group AG Energiebilanzen (AGEB). High prices due to the energy crisis meant short-term savings by consumers and energy efficiency investments with medium to long-term impact, as well as price-related production cuts in individual economic sectors, said AGEB. (Clean Energy Wire)

AMERICAS

Heavy-duty controls – The US EPA finalised emissions standards for heavy-duty trucks beginning with model year 2027 that are 80% stronger than current standards, the agency announced Tuesday. This was the first update in 20 years for emission standards of heavy-duty trucks, and the EPA expects the new standards to extend the life of vehicles by 1.5–2.5 times, yielding emissions warranties that are 2.8–4.5 times longer, the agency noted in their press release. The final rule includes provisions for longer useful life and warranty periods, and also requires manufacturers to better ensure that vehicle engines and emission control systems work properly on the road, while preventing vehicle drivers from tampering with emission controls. The agency intends to release two more actions under its Clean Trucks Plan: “Phase 3” GHG standards for heavy-duty vehicles in model year 2027, and multipollutant standards for light- and medium-duty vehicles beginning in model year 2027, the agency said. The final rule is effective 60 days after publication in the federal register.

ZEV coast – The Washington State Department of Ecology (ECY) on Monday updated its Clean Vehicles Program to require all new cars sold in the state by 2035 to be electric, hydrogen-fuelled, or hybrid with at least 50 mi (80 km) of electric-only range. Washington lawmakers set the stage in 2020 when they passed the Motor Vehicles Emissions Law, directing the ECY to adopt California’s emissions standards as they rolled out. This summer, California regulator ARB’s Board voted to ban the sale of gas-powered vehicles by 2035, and Oregon also adopted California’s zero-emissions vehicle model on Monday. (Seattle Times)

Oklahoma! — Woodside Energy has awarded a major contract to Air Liquide Engineering and Construction as part of its H2OK hydrogen project in Ardmore, Oklahoma, the company said. Air Liquide will engineer and fabricate two 30 t/d liquefaction units which will liquefy hydrogen produced through electrolysis in preparation for storage, loading, and transportation to customers. Woodside CEO Meg O’Neill said the contract award was a significant milestone for the project, as front-end engineering and design work is expected to be completed by the end of the year. The project will see Woodside generate and store green hydrogen for hydrogen fuel-cell powered commercial and heavy transport vehicles. “Our customers are increasingly seeking out low-cost, lower-carbon sources of energy, such as hydrogen and ammonia. H2OK would produce hydrogen for use as a fuel for commercial and heavy transport, supporting customers’ chosen decarbonisation pathways,” O’Neill said. Woodside has already selected Nel Hydrogen Electrolyser AS to design and develop alkaline electrolyser equipment for the project. Woodside said it will make a final investment decision on the project in 2023.

Big ammonia deal – The Texas group behind a potential $7.5 bln “blue” ammonia plant in Ascension Parish, Louisiana, has hired a Danish company to provide licensing and engineering work for the massive energy project, The Advocate reports. Topsoe, a decarbonisation company that specializes in hydrogen and ammonia technology licensing and carbon capture, will provide “licensing, engineering, proprietary hardware, and catalyst” services for the project, according to a news release from Ascension Clean Energy (ACE) the joint venture led by Clean Hydrogen Works that is planning the Ascension plant. “A technology leader in decarbonisation, Topsoe’s scientific and technical knowledge, experience, and partnership mindset make them an ideal technology provider for hydrogen and ammonia production, as well as carbon capture for ACE,” Vee Godley, Clean Hydrogen Works senior vice president and chief development officer, said in a statement. The companies expect to produce 7.2 Mt of “blue” ammonia annually at the facility while sequestering 12 MtCO2, a capture rate of up to 98% of its possible CO2 emissions.

Moo-ving the needle on methane – The California Dairy Research Foundation (CDRF) and University of California, Davis CLEAR Center recently announced the release of a new analysis of methane reduction progress titled “Meeting the Call: How California is Pioneering a Pathway to Significant Dairy Sector Methane Reduction”. The paper, authored by researchers at UC Davis concludes that efforts are on track to achieve the state’s world-leading target for reducing dairy methane emissions by 40% by 2030. By documenting achievements to-date, additional reduction efforts already funded, historic and current economic trends, and the projected availability of new solutions, the analysis lays out a workable path toward meeting California’s goal.

Cementing climate progress – Lafarge Canada on Monday announced the full transformation of the Brookfield Cement Plant’s production in Nova Scotia to a greener portfolio. From now on, the site’s production of general use cement ends and will shift to reduced carbon portland limestone cement – branded as OneCem – the company’s eco-efficient alternative. Brookfield is Lafarge’s third cement plant to be converted in 2022 and the first Atlantic Market plant to convert – the others being the Bath Cement Plant (ON) in June and the Richmond Cement Plant (BC) earlier this year, in March.

ASIA PACIFIC

Hydrogen in train – India’s minister for railways, Ashwini Vaishnaw, informed that the country will roll out its first domestically designed and built hydrogen-powered train by Dec. 2023, Mint reports. “We are designing and the design should be out anywhere by May or June,” Ashwini Vaishnaw told reporters during a visit to the southern city of Bengaluru. The hydrogen-powered train will be called Vande Metro and will be manufactured in large numbers with an objective to replace the trains built in the 1950s and 60s. Currently, most of the trains in India are powered by diesel or electricity. In an effort to reduce carbon emissions and achieve climate goals, governments around the world are looking for sustainable transport alternatives, and betting on clean hydrogen being part of the effort.

Methane cloud – Last month, a satellite flew over the dry, arid landscape of South Australia state’s Cooper Basin and spotted a large cloud of the super potent greenhouse gas methane. The plume was observed Nov. 23 near a few petroleum-producing fields and a natural gas pipeline owned by Epic Energy, Energy Voice reports. The company initially told Bloomberg News there were no incidents or work on its Moomba-to-Adelaide conduit over that timeframe in the vicinity of the plume that could have caused it. “We are not aware of any methane release in the area which have resulted from our operations,” Stephen Mudge, general manager of strategy and business development at Epic, said in an email Dec. 7. A subsequent investigation by the South Australia Department for Energy and Mining found just the opposite. Compressor Station 1 on the pipeline experienced a pressure safety valve gas release on Nov. 22 and 23, the regulator said in an email Dec. 15. The agency said it didn’t know how much methane was released. When Bloomberg News contacted Epic about the release disclosed by regulators, the company said that it had subsequently discovered the Nov. 22 release while investigating a separate incident on the same compressor station from this month.

Give me data   A large majority of Hong Kong-based financial institutions are facing challenges measuring climate risk, including a lack of available data and standardised measurement methodologies, South China Morning Post reports, citing a report from Hong Kong Monetary Authority (HKMA), the city’s de facto central bank. Survey respondents engaged in cross-boundary and international activities also cited data quality, a lack of consistency across jurisdictions in data definition and taxonomy, and regulatory guidance and frameworks, as their top challenges. Over half of the surveyed institutions have been measuring climate risks, and 76% are planning to allocate similar or more resources to the task over the next 12 months.

VOLUNTARY

Talking about the weather – Verra is establishing an Enhanced Weathering and Mineralization (EWM) Advisory Group (AG) and invites interested stakeholders to apply. The EWM AG will be a strategic resource for the development of an EWM initiative in the Verified Carbon Standard (VCS) Program by evaluating its readiness, merits, and risks and its potential acceptance in carbon markets. Details about the EWM AG’s scope, qualifications, criteria for participation, and application instructions are in the Call for Expressions of Interest: Enhanced Weathering and Mineralization Advisory Group (PDF). The deadline for applying is Jan. 6, 2023.

SCIENCE & TECH

Sweaty in ’23 – Next year is forecast to be the 10th consecutive year in which global temperatures will be at least 1 C above pre-industrial levels, the UK’s Met Office has said. The forecast estimates global average temperatures in 2023 will be around 1.2 C above what they were before humans started to drive climate change – putting it on track to be one of the world’s hottest years. The current record hot year in the records dating back to 1850 is 2016, a year that saw an “El Nino” climate pattern in the Pacific which pushes up global temperatures on top of global warming trends. (Press Association)

Fuel cell breakthrough – Swedish company Nilsson Energy has signed a distribution agreement with the French company EODev (Energy Observer Developments) to sell its GEH2 fuel cell power generators on the Nordic market, the company stated in a press release, which can replace generators powered by fossil fuel products such as diesel. Nilsson Energy is a system integrator that develops, designs, installs, and services decentralised energy systems with green hydrogen as an energy carrier. “The fuel cell generator is absolutely ‘state of the art’ and we see enormous potential in being able to offer zero emission electricity wherever it is needed. In addition, we can supply it with hydrogen and either sell, lease or to let, which further facilitates handling for our customers,” Pontus Lundgren, chief executive of Nilsson Energy, stated. With the fuel cell generator, the need for diesel and other fossil-powered generators is reduced, according to the press release. It is perfect for construction sites, road works, agriculture, or at larger events and concerts where there is a need for electricity and heat. As the generator is mobile and easy to handle, it can be moved to the next project or event, depending on the need. The product is also available as a marine application, which will facilitate the transition to electrification in the boating industry. By connecting to a mobile charging station, it is also possible to charge cars where there is no possibility to do so today, according to the company.

Fulcrum feat – Clean energy company Fulcrum BioEnegy on Tuesday announced it has successfully produced a low-carbon synthetic crude oil using landfill waste as a feedstock at its Sierra BioFuels Plant, the world’s first commercial-scale landfill waste-to-fuels plant.  By producing a synthetic crude oil product, which can then be further refined into sustainable aviation fuel (SAF), Fulcrum said in a press release that it has demonstrated its process and is preparing to supply its strategic partners with SAF that it expects will be net zero carbon when compared on a lifecycle basis to traditional petroleum-based jet fuel.

AND FINALLY…

Mob ruling – The same racketeering legislation used to bring down mob bosses, motorcycle gangs, football executives, and international fraudsters is to be tested against oil and coal companies who are accused of conspiring to deceive the public over the climate crisis, the Guardian reports. An attempt will be made to hold the fossil fuel industry accountable for “decades of deception” in a lawsuit being brought by communities in Puerto Rico devastated by Hurricane Maria in 2017. The 1970 Racketeer Influenced and Corrupt Organizations (RICO) Act was originally intended to combat criminal enterprises like the mafia, but has since been used in civil courts to litigate harms caused by opioids, vehicle emissions, and even e-cigarettes as organised crime cases. Now, the first-ever climate change RICO case alleges that international oil and coal companies, their trade associations, and a network of paid think-tanks, scientists and other operatives conspired to deceive the public – specifically residents of Puerto Rico – about the direct link between their GHG-emitting products and climate change.

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