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TOP STORY

California legislature should consider cap-and-trade changes to meet 2030 GHG target -govt report

California lawmakers could pursue several options that would bolster the environmental performance of the state’s WCI-linked cap-and-trade regulation, which as currently structured will not meet the state’s 2030 GHG reduction target, a government body said in a report published Wednesday.

EMEA

Euro Markets: EUAs drop 7% to six-week low as milder weather weighs on energy markets

EUAs extended their slump on Wednesday as a continuation of unseasonably mild weather across Europe kept carbon under heavy selling pressure, with Dec-23s shedding some 7% to break below €80 as they tracked a wider sell-off across energy markets.

Brussels to set out new EU industrial strategy by end of month

The European Commission will set out a new bloc-wide industrial strategy by the end of January amid growing pressure by industry and member states to avoid de-industrialisation and help big-emitting  companies decarbonise amid high energy prices, a Commission spokesperson said on Wednesday.

Germany fails to achieve emissions targets in 2022 -report

Germany failed to meet its emissions reduction targets in 2022 largely due to a rise in coal and oil consumption triggered by high energy prices caused by Russia’s invasion of Ukraine, German think-tank Agora Energiewende said in a report published on Wednesday.

AMERICAS

North Carolina RGGI rulemaking plans face delay

The next stage in the North Carolina Department of Environmental Quality’s (DEQ) cap-and-trade rulemaking process scheduled for January has been postponed, the agency’s spokesperson told Carbon Pulse, potentially pushing back implementation of the RGGI-aligned programme.

Massachusetts proposes retiring GWSA carbon allowances associated with waste steam

The Massachusetts Department of Environmental Protection (MassDEP) on Wednesday proposed amendments that would remove carbon allowances from auctions under the in-state Global Warming Solutions Act (GWSA) cap-and-trade system that are associated with supplying waste steam.

Climate Action Reserve developing Dominican Republic livestock offset protocol

Offset registry Climate Action Reserve (CAR) laid out a timeline for developing a livestock protocol specific to the Dominican Republic on Wednesday, as the Caribbean country continues to ramp up its international carbon credit strategy.

VOLUNTARY

Slim pickings undermine CDR market in 2022 despite Airbus mega-deal -report

Demand for carbon dioxide removal (CDR) credits, including pre-purchases of long-term contracts, jumped a staggering 533% last year, although most of the volume was from one future mega-deal, while the spot market remained tiny, according to a report published Wednesday.

Carbon removal platform adds Spanish partner amid ambitious growth plans

A carbon removal platform has added its first Spanish partner to offer biochar credits from Iberia for the first time amid plans to quadruple growth this year.

Climate Impact Partners appoints CEO from global utility

Carbon credit provider Climate Impact Partners has appointed former GE executive Sheri Hickok as its new CEO, succeeding Vaughan Lindsay, the company said on Wednesday.

ASIA PACIFIC

India approves $2.4-bln hydrogen plan

India’s cabinet on Wednesday approved initial outlay of 197.5 billion rupees ($2.4 bln) for a National Green Hydrogen Mission that is expects will make the county a global hub for production, utilisation, and export of green hydrogen.

Thailand releases EU-aligned draft sustainable finance taxonomy

The Thai government has released a draft sustainable finance taxonomy that bars gas from being classified as green, and will use a traffic light system to categorise its environmental considerations.

Major Chinese forestry firm builds partnerships with Shanxi and Hunan

State-owned China Forestry Group Corporation (CFGC) has recently formed partnerships with two regional authorities in China, the latest in a growing line of similar government-led collaborations to explore the potential of forestry projects.

BIODIVERSITY (FREE TO READ)

EU opens funding call for biodiversity projects

The European Commission has launched a call for innovative biodiversity projects to receive grants worth almost €200 million as part of a 2023 programme.

COMMENT

Along the curve – searching for value in the voluntary carbon market

Carbon market broker Matt Udberg of ICAP assesses trading patterns in the voluntary carbon market as a shift in volume from physical markets to futures brought an influx of new counterparties over 2022.

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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

Brown-to-green – For the first time, more money was raised in the debt markets for climate-friendly projects than for fossil-fuel companies. Roughly $580 bln was arranged in 2022 for renewable energy and other environmentally responsible ventures, while the oil, gas and coal industries turned to lenders and underwriters for closer to $530 bln, according to data compiled by Bloomberg. But it’s not that green financing is finally winning out over fossil fuel lending. Rather, Big Oil looks to be getting more money from elsewhere as high oil prices have likely freed energy companies from their dependence on capital markets and turn to more opaque private equity.

EMEA

Wissing the point – The German transport minister Volker Wissing has triggered a fresh debate over the government decision to switch off the country’s remaining nuclear plants in mid-April. In an interview with German media, Wissing called to extend the lifespan of nuclear power plants, arguing they would help lower emissions in the transport sector because it can be used to charge electric cars. Wissing proposed to transfer the decision to an independent expert commission to avoid political discussions. His call to keep nuclear plants open risks a return to a conflict already had by the government coalition over nuclear energy, when Wissing’s FDP and the Greens – both in government – argued for months over the future of the technology. Eventually, chancellor Olaf Scholz intervened to settle the dispute, by paving the way for prolonging the lifespan of all three remaining reactors to April 15. (Clean Energy Wire)

Winding down the year – Blustery weather conditions helped ensure the UK set a wind power generation record over the new year period, according to data from grid operator National Grid ESO, BusinessGreen reports. On Dec. 30, the UK’s fleet of wind turbines generated 20.9 GW of electricity in the half-hour period between 1800 and 1830 GMT, beating the previous record of 20.9 GW set on Nov. 2. The peak represented the third time the generation record was broken during 2022. National Grid ESO also announced that a new record was set on the same day for the percentage of low-carbon electricity delivered by renewables and nuclear assets for a half-hour period, with clean power meeting 87.2% of demand. Overall, wind provided 61.4% of Britain’s electricity on Nov. 30.

Mine action – Green group Friends of the Earth is to take legal action against the UK government over its decision to approve the country’s first major coal mine in more than 40 years, the BBC reports. It argues that Communities Secretary Michael Gove “acted unlawfully” when he approved the project in Cumbria last month and “failed to account for the significant climate impacts” for the mine that is expected to extract millions of tonnes of coking coal for steel production each year. Read Carbon Pulse’s reporting on how Gold Standard has dismissed the UK government’s statement that the standard body’s carbon credits could be used to mitigate the mine’s impact.

Speaking of coal – Lignite mining in the Slovak Upper Nitra region is coming to an end as the last two coal mines will close by the end of 2023 following the government’s plans to stop subsidies for domestic mining. Subsidies should have previously ended in 2030, but in 2018 the government decided on 2023 as the end date, Euractiv reports. According to a spokeswoman from the company operating the mines, enough reserves to last for several decades are still untouched in the area. Mines are owned by the mining company Hornonitrianske bane a.s., which can theoretically continue in mining without the subsidies as mining itself is not prohibited, but the company has ruled this out. The end of coal mining will have huge consequences for the employees and the region. In 2018, around 4,000 people worked in the mines, but as of Dec. 1, 2022, the company had 1,903 employees, of which 1,068 were miners. Most of them will lose their jobs by the year’s end or early 2024. The company will only keep several dozen employees for further processes related to the liquidation of mining operations and revitalisation of the area. By the end of the year, the Novaky coal-fired power plant Novaky will close as well, with heat to come primarily from renewable sources – a combination of biomass and solar panels.

ASIA PACIFIC

Solar funding — The Australian Renewable Energy Agency (ARENA) has committed A$41.5 mln ($28 mln) to 13 R&D projects looking to significantly reduce the cost of solar PV. ARENA is targeting 30% module efficiency at 30 cents per installed watt at utility scale by 2030. Funding has been allocation to focus on commercialisation prospects, which will take place after each project’s R&D phase, to fast track the technologies to market. Funding has been allocated across two streams – with A$27.5 mln going to solar cells and modules, while the other A$14 mln will go to solar operations and maintenance. The funding has been distributed to projects at universities including the University of New South Wales, Australia National University and the University of Sydney. “Australia’s solar researchers have helped to make solar PV the cheapest form of energy in history, but to create a future in which Australian solar energy supplies the world with clean power, fuels and products, we need to be ambitious and drive the cost of solar even lower,” ARENA CEO Darren Miller said.

Start up — Thailand’s Ministry of Natural Resources and Environment has launched a carbon credit programme in the community of Ban Khonh Taban in Phetchaburi province, the Pattaya Mail reports. The village joined the Thailand Voluntary Emissions Reduction Programme in 2015. Residents conserve the local forests with assistance from the Royal Forest Department, Kasetsart University, the Mae Fah Luan Foundation, and electricity producer Ratch Group. The village has already been certified with 5,259 tonnes of CO2e. The government hopes the scheme can be expanded to over 12,000 communities and help the country preserve and expand its forests. The news comes as the Bangkok Post reports that the government’s Excise Department aims to complete its study of carbon tax collection measures by this year. The department has set up a committee to invite stakeholders to discuss its plan to introduce a carbon tax, and wants to provide tax incentives for environmentally friendly products.

Wind that rises — French renewable energy developer Neoen has secured financing for the first stage of a huge wind, solar, and storage project in South Australia, the Australian Financial Review reports. The financing deal with six lenders, including Australian banks ANZ and Westpac, will support the construction of the first 209 MW of the 412 MW Goyder South wind farm near Burra. The venture is underpinned by two long-term power sales contracts with the ACT government and business power retailer Flow Power. A deal for debt financing for the remaining 203MW of the first stage of the wind farm is anticipated later in 2023. That power capacity will be provided to miner BHP, to supply its Olympic Dam mine in South Australia. Neoen did not reveal how much construction would cost, but said it would provide equity funding, while debt would be provided by the six banks, which also include HSBC, Mizuho, Societe Generale and Sumitomo Mitsui Banking Corporation. The entire Goyder project will eventually include 1.2 GW of wind generation, 600 MW of solar, and 900 MW of battery storage.

Powering up — Spanish renewable energy developer Acciona has signed an agreement with Queensland state-owned utility Stanwell to supply renewable electricity to power its 3000 MW hydrogen electrolysis facility in Gladstone, Argus Media reports. Stanwell is developing the hydrogen project with a consortium of Japanese firms, and is intended to produce green hydrogen for export to Japan. Acciona will supply the electricity from the 600 MW Aldoga solar project, the first stage of which is expected to be operational by 2025. Stanwell said the agreement meant that the  hydrogen being produced will be guaranteed to be produced from renewable energy sources. The hydrogen project is one of several in the area, as part of the state government’s planned hydrogen hub.

AMERICAS

Green goals – Canadian Natural Resources Minister Jonathan Wilkinson is moving ahead with two major mandate items in 2023 – introducing “just transition” legislation and finalising a major Atlantic electricity project. Wilkinson told CBC News the government will, he hopes, introduce early this year the long-awaited legislation to help workers in the oil and gas sector move into green energy jobs. Wilkinson also said the Liberals hope in the coming months to finalise an agreement on the Atlantic Loop – a proposed C$5 bln project to deliver hydroelectricity from Labrador and Quebec to New Brunswick and Nova Scotia. The latter two provinces have committed to phasing out their carbon-intensive coal-fired plants by 2030.

Down the ‘path’ – Canada’s largest oil sands producers signed an agreement with the Alberta government allowing them to assess the geology of an underground carbon storage site, a step in their plan to tackle GHG emissions, the companies said on Wednesday. The Pathways Alliance, consisting of six companies representing 95% of Canada’s oil sands production, is proposing a CCS hub that will gather and store emissions from 14 oil sands projects in northern Alberta by 2030. The oil and gas sector is Canada’s highest-polluting industry and CCS is an important plank in Pathways’ plan to reach net zero emissions by 2050. But the costly technology takes years to build, and proposed Canadian projects are relying on government support to move forward. The CCS plan is expected to cost about C$16.5 bln ($12.2 bln) by 2030. Last year the Canadian government unveiled a CCS investment tax credit, but the oil industry is asking federal and provincial governments for further financial support. (BOE Report)

Out of the ‘blue’ – California Resources on Wednesday announced a CO2 management agreement between Carbon TerraVault Holdings (CTV) and Grannus, an independent clean-tech company that is building a portfolio of blue ammonia and hydrogen production facilities to supply the agriculture, mobility, and marine fuel markets, to sequester 370,000 t/y of CO2 at CTV III from a new blue ammonia and hydrogen plant to be constructed in Northern California. Called the Grannus Blue Ammonia and Hydrogen Project, the project aims to be California’s first blue ammonia and hydrogen facility producing 150,000 t/y of blue ammonia and 10,000 t/y of blue hydrogen. The blue ammonia facility will use Grannus’ patented process, which is expected to operate a virtually emissions-free facility once the CO2 is sequestered. California produces over a third of the country’s vegetables and three-quarters of the country’s fruits and nuts, providing a strong ammonia market in the state. (MarketScreener)

AVIATION

Taking off – The International Air Transport Association, responsible for creating and implementing global commercial aviation standards, has announced in a yearly report that the production of Sustainable Aviation Fuel (SAF) has experienced a 200% increase compared to the previous year, Airways reports. In 2022, 450 mln liters of SAF were produced and distributed to airlines around the world for use on commercial passenger and cargo flights. The goal is to produce 30 bln liters by 2030 as part of the industry’s roadmap to achieve net zero CO2 emissions by 2050. SAF has been used to operate over 450,000 commercial flights to date. The growing number of operators signing agreements with SAF producers sends a clear sign to the market that the novel jet fuel is needed in larger quantities to support the high demand.

AND FINALLY…

Let’s plant trees, K-pop fans – SM Entertainment, the label of top K-pop groups including Girls’ Generation and Aespa, has vowed to tackle the climate crisis and ensure environmental sustainability by pushing for a tree-planting movement in cooperation with its artists and their international fans. “A song can change one’s life. In the same way, one tree can change the world,” the company’s founder and executive producer Lee Soo-man said during an online sustainability forum, which was live-streamed to some 470,000 people in 105 countries on YouTube. “In 2021, Mongolia announced it would plant 1 bln trees by 2030 and Saudi Arabia said it would reach net zero emissions by 2050 and plant 50 bln trees. If a K-pop festival joins this initiative, we can bring fandoms and youth to these regions. If more people voluntarily take part in this movement, it will boost our mission of saving our earth, making it greener,” Lee noted.  (Korea Times, SM Sustainability Forum)

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