CP Daily: Thursday January 5, 2023

Published 00:34 on January 6, 2023  /  Last updated at 00:34 on January 6, 2023  /  Newsletters  /  No Comments

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

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TOP STORY

ANALYSIS: California cap-and-trade registration backlog more than doubles in Q4 amid longer wait times

The number of entities awaiting approval by California regulator ARB to participate in the state’s cap-and-trade programme more than doubled in the fourth quarter, according to analysis by Carbon Pulse, as authorisations are reportedly taking as long as 12 months to complete.

ASIA PACIFIC

Expert group proposes single-phase target for Japan’s pilot GX market

A government-commissioned expert group has recommended that participants in Japan’s domestic voluntary carbon market, the GX League, should set a single target for the 2023-25 pilot phase of the scheme, with final regulations for the initial trading period to be released later this month.

China to study the possibility of including soil and water conservation in national voluntary market

China‘s State Council has recommended studying the possibility of including carbon sinks generated from soil and water conservation projects in its national offset market, in a move backing the long-awaited relaunch of the Chinese Certified Emissions Reductions (CCER) programme.

China’s Shandong to build regional offset scheme

Northern China’s Shandong province has rolled out a work plan for the construction of its own offset programme, the latest move for regional authorities in the country to explore new options in the absence of a national offsetting mechanism.

EMEA

Euro Markets: EUAs tick up on technical and gas rebound as warm weather encourages return to fuel switching

European carbon prices rose just over 1% on Thursday, rebounding somewhat after two heavy loss-making sessions, though fundamentals remained weak as warm winter weather has driven a return to incentivised coal-to-gas fuel-switching and has dampened overall demand for energy.

Utility RWE teams up with Equinor on hydrogen-based decarbonisation efforts

Norway’s Equinor and Germany’s RWE plan to develop a large-scale hydrogen-based value chain to help transition Germany away from coal, the energy companies said on Thursday alongside a wider cooperation deal by their respective governments.

UAE oil company earmarks $15 bln to reduce carbon footprint

The Abu Dhabi National Oil Company (ADNOC), which bought a 24.9% stake in Austrian oil refining group OMV in December, has earmarked $15 bln for decarbonisation projects to help towards a goal of reducing carbon intensity by 25% by 2030.

AMERICAS

WCI Markets: CCAs prices slide into New Year, Washington allowances soar ahead of programme launch

California Carbon Allowance (CCA) prices began 2023 by eating into the end-of-year run-up, as Washington Carbon Allowance (WCA) prices continued to accelerate ahead of the official launch of the cap-and-trade system on Sunday, jumping more than 20% over December.

VOLUNTARY

Merger of UK tech firm, Canadian ESG investor to expand global environmental credit blockchain platform

A British technology company and a Toronto-based ESG investment firm on Thursday announced a merger that they said will pave the way for a broader roll out of a blockchain-based environmental credit platform for creating and trading international offsets.

BIODIVERSITY (FREE TO READ)

Australian forests continue to be cleared at globally significant levels, reports say

A series of reports have found Australian forests are continuing to be cleared at globally significant levels, to the point where some could become net carbon emitters in the coming decades in the face of the ever-increasing impacts of climate change while putting domestic biodiversity under pressure.

Indonesian start-up to fund, advise Southeast Asian biodiversity efforts

An Indonesia-based investment firm that will help drive investments and provide strategic advice on early-stage nature-based businesses in Southeast Asia is having its soft launch this month.

IDB picks four projects for digital biodiversity token initiative

The Inter-American Development Bank (IDB) has picked four project proposals across Latin America and the Caribbean for an initiative seeking to find innovative ways to use digital assets to promote biodiversity conservation and climate change action.

COMMENT

Behind the bears, we see plenty of bulls

Why I remain bullish on the verified carbon markets, writes Melissa Lindsay, founder of Emstream and Emsurge.

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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

AMERICAS

Brazil’s new climate cop – Sao Paulo Deputy-elect Marina Silva was sworn in Wednesday as Brazil’s new environment minister, almost 15 years after leaving that office during President Luiz Inacio Lula Da Silva’s second term in office, MercoPress reports. During a crowded ceremony at the Planalto Palace, Silva delivered a speech that lasted about an hour. She underlined that Brazil has become an environmental pariah and that, in the last few years, there has been an emptying of climate change policies and of structures to combat deforestation. Silva also announced the creation of the National Authority for Climate Security, an autonomous agency to be linked to the Ministry of Environment and Climate Change, which will however keep the acronym MMA. The creation of the National Authority for Climate Security was a proposal brought by Silva during the elections and welcomed by the then-candidate Lula. According to the minister, the project should be constituted by the end of March. There will also be a government council exclusively to deal with the issue, under the command of the Brazilian president.

Delayed standards – In the Unified Agenda – a semi-annual list of regulatory plans across all federal agencies – released on Wednesday, the White House Office of Management and Budget (OMB) acknowledged that the EPA would miss its self-imposed March deadline for GHG emission standards for new and existing power plants. The agency now plans to propose the standards by April and finalise them by June 2024, the Washington Post reported. EPA officials also acknowledged they will not make their spring target for finalising tougher limits on soot. A final rule is now scheduled for release by August, while a proposed rule is expected this month. Also delayed to March is a final rule affirming the EPA’s authority to curb emissions of mercury and other toxic air pollutants from power plant smokestacks. At the Interior Department, officials are now aiming to finalise a rule targeting leaks, venting, and flaring of methane from oil and gas operations on public lands by September, rather than next month. Green groups criticised the delays, noting that if these rules were issued in the waning days of the Biden administration’s first term, a future Republican-controlled Congress could overturn them using the Congressional Review Act, which allows lawmakers to scrap any regulation within 60 legislative days of its finalisation by a simple majority vote.

Forest storage – Meanwhile, the Unified Agenda said that the US Forest Service is considering allowing greater use of the lands it oversees for sequestering and storing CO2, according to the Biden administration’s latest update to proposed regulations across federal agencies. The Forest Service may seek to allow “exclusive or perpetual” use of National Forest System lands for CCUS a nod to the administration’s efforts to cast forest policies as a tool to mitigate climate change. A spokesperson for the Forest Service said the provision would remove an obstacle to storing carbon underground in national forests. Current regulations for special uses of National Forest System land don’t allow for perpetual use, he said, which would be necessary to allow carbon storage under Forest Service land. While the proposal being considered wouldn’t authorise any carbon storage itself, it would open the way for such projects, he said. A notice of proposed rulemaking could come in August, according to the regulatory agenda. (E&E News)

GOP’s climate chasm – The Republican brawl over whom to elect House speaker hasn’t changed anything about climate policy — yet. But the chaos this week has underscored concerns that the new Congress is ill-equipped to address global warming. And though the short-term impact on policy might be limited, observers expect the drawn-out fight for House speaker to exacerbate tensions between business-aligned Republicans — who are tiptoeing toward climate action — and GOP hardliners who deny climate science. The potential consequences of that tension are twofold. GOP lawmakers have threatened to use their newfound majority in the House to investigate President Joe Biden and his administration’s efforts to confront global warming. While those investigations are still likely to happen, the manner of execution is still very much up in the air. More broadly, the widening Republican rift could make it even harder for US policymakers to craft durable climate solutions. (E&E Daily)

EMEA

Nuclear vote – The surge in global energy costs is reigniting the debate on Italy’s ‘no nuclear’ stance, Politico reports. Right-wing parties are pushing for a rethink of the country’s long-standing nuclear ban, citing the need to attain energy sovereignty to manage rising energy bills and to fill the gap left by fossil fuels as they’re phased out thanks to climate change pledges. Matteo Salvini, leader of the pro-industry League party, announced last weekend a petition to force a consultative referendum on reintroducing nuclear energy. The country had closed all reactors in the years following the Chernobyl disaster in 1986.

Grid and bear it – Germany will not experience an electricity shortage as a result of an exit from coal and nuclear power generation if it rolls out renewables as planned, even if the country’s power consumption rises due to heat pumps, electric cars, and hydrogen electrolysers, the German grid agency said in a preview to the period 2025 to 2031. At the same time, Berlin aims to build an additional 17-21 GW of extra gas capacity. By 2030, the German government wants the country to run on 80% renewable electricity. Gas power plants are expected to cover the remaining 20%. The country’s three remaining nuclear power plants are due to be taken off grid in mid-April, and the government aims to bring forward the exit from coal from the agreed 2038 phase-out date to 2030. (Clean Energy Wire)

Going electric – Sales of new battery-powered cars outstripped diesel in the UK for the first time in 2022, data from the Society of Motor Manufacturers and Traders (SMMT) shows. The UK new car market recorded its fifth consecutive month of growth in December, up 18.3% year-on-year to reach 128,462 new registrations, although a sluggish first half of the year still saw new car registrations only reach 1.61 mln in 2022, down slightly from 2021, and down around 700,000 cars from pre-Covid levels. But December also saw battery electric vehicles (BEVs) claim their largest ever monthly market share, some 32.9%, while for 2022 as a whole they comprised 16.6% of registrations, surpassing diesel for the first time to become the second most popular car after petrol. Meanwhile, plug-in hybrids (PHEVs) saw their annual share decline to 6.3%, meaning that combined, all plug-in vehicles accounted for 22.9% of new registrations in 2022 – a record high, although a smaller increase in overall market share than recorded in previous years. Hybrid electric vehicles (HEVs) also enjoyed growth, rising to an 11.6% market share for the year. As a result, average new car CO2 fell -6.9% year-on-year to 111.4g/km, a record low.

Get ready – State-owned power utility Elektroprivreda BiH (EPBiH) expects the introduction of carbon taxation in Bosnia and Herzegovina within three to eight years. According to its Business Plan for the period 2023-25, it is one of the biggest risks in the company’s operations and an expense that will reduce its profits. The introduction of a carbon tax is a decision that awaits the Western Balkans as they commit themselves to total decarbonisation by 2050 under the Sofia Declaration. An analysis showed that half of the countries in the region are seriously working on the introduction of such a system, while the rest are lagging behind. There are no binding deadlines for the introduction of a carbon tax in Bosnia and Herzegovina, but things are likely to be accelerated by the recent decision of the EU to introduce a Carbon Border Adjustment Mechanism (CBAM) from 2026. EPBiH expects the carbon pricing system in BiH to be rolled out in time for that. (Balkan Green Energy News)

ASIA PACIFIC

Caught out — ASX-listed gas explorer Black Mountain Energy has been fined nearly A$40,000 ($27,000) by the corporate regulator for greenwashing, the Nine Newspapers report. The Australian Securities Investment Commission (ASIC) fined the company for making false and misleading claims it would achieve net-zero emissions. ASIC issued three infringements related to Black Mountain presentations to investors from Dec. 2021 to Sept. 2022 that claimed its Project Valhalla gas project would have net zero emissions. “ASIC was concerned that BME either did not have a reasonable basis to make the representations, or that the representations were factually incorrect”, ASIC said. Black Mountain released a statement Thursday telling the market it would pay the penalty  on a “no admissions” basis and would not be regarded as having contravened the ASIC Act.

Big contracts – Power Construction Corporation of China (PowerChina), a Shanghai-listed civil engineering firm, has secured two contracts valued at a combined 10.95 bln yuan ($1.59 bln) to build clean energy projects in Inner Mongolia’s Tongliao city, according to a corporate filing released on Thursday. The contracts include the construction of a 1.38 million-kilowatt wind power facility and a zero-carbon equipment project in the region, the filing said. The two projects are both expected to be completed in 563 days.

VOLUNTARY

Proof, please — International investors with $2.2 trln in assets have filed a shareholder resolution asking commodity giant Glencore to show how its development of thermal coal mines meet the goals of the Paris climate accord to keep global temperatures below 1.5C, Reuters reports. Legal and General Investment Management (LGIM) were one of several major institutional investors asking Glencore to reveal how its production and capex plans align with the Paris Agreements and the International Energy Agency’s Net Zero Emissions pathway. “Having both invested in and engaged with Glencore over many years, a higher degree of transparency is necessary in order to clarify how the company’s exposure to thermal coal is aligned with the 1.5C pathway and corresponds to its net zero commitment,” LGIM Analyst Dror Elkayam said. Other investors include Swiss based Ethos Foundation, Australian pension fund Vision Super, and HSBC Management. The resolution will be put to a vote at Glencore’s AGM this year.

Have a cow – Start-up company Melliens at CES2023 in Las Vegas this week announced its cow carbon platform that monitors the CO2 footprint of cattle and trades the resulting offsets. Melliens said it is the first climate technology company to monitor the carbon footprints of beef cattle and trade accumulated carbon credits in carbon markets. According to the South Korea-based company, carbon emissions from cattle make up 10% of overall agricultural emissions, and that could grow to 40% by 2050. The platform is intended to quantify and verify the reduced carbon emissions, while generating credits in real time. The cow carbon credits will soon be available for purchase by anyone, and profits will be shared with beef suppliers, according to Mellien. (PV Magazine).

Green ads – Yahoo announced Thursday an integration with Scope3 to offer carbon neutral private marketplace media in the Yahoo supply side platform (SSP), an inventory management platform and exchange for advertisers. Advertisers buying through the Yahoo SSP can now easily find and buy green media products powered by Scope3 to ensure their digital ad campaigns align with their broader sustainability goals. The digital media and advertising industry has a massive carbon footprint due to the complexity of digital ad supply chains and the sheer volume of ad transactions, and Scope3 was formed to help solve this sustainability problem. By measuring the carbon emissions of the entire digital advertising supply chain, Scope3 helps companies like Yahoo make it easy for anyone buying through their platform to factor carbon into every business decision. (Business Wire)

Look forward, not back – Green hushing, where companies keep quiet about their climate plans, is being caused by media criticism of older projects that were cutting edge at the time and essential to bringing down emissions, but now look outdated, said Renat Heuberger, chief executive of South Pole. He warns that a quarter of companies that have set net zero targets do not plan to publicise them for fear of being accused of greenwashing. But criticism of older projects is “applying a 2022 vision to a very different context and world”, Heuberger points out. An example is renewable energy, he explained. To develop a wind or solar project in Chile a decade ago was very difficult – there was no local bank to fund the project so it was clearly additional. Today, those projects may not be additional because there might be financing as technology costs have come down and the rate of return is higher – especially during an energy crisis. Heuberger noted that a decade ago, VCM credits were selling at less than $1 and only the low hanging fruit or the cheapest and most straightforward projects could get developed. “Witnessing problematic projects being cherry picked and splashed across the media, it’s clear we have a long way to go to win this argument,” the chief executive of South Pole said. “But we can’t let the perfect become the enemy of the good. The VCM offers measurable, scalable, and growing benefits.”

SCIENCE & TECH

Simplifying sampling – Conservation practices such as crop rotation, no-tillage, cover crops, and other conservation practices that improve soil health enhance the total soil organic carbon (SOC) stock in a soil profile. A study led by researchers at the Agroecosystem Sustainability Centre (ASC) at the University of Illinois Urbana-Champaign found that high-accuracy SOC concentration measurements are needed to quantify cropland carbon budgets, but the current publicly available soil dataset is sufficient to accurately calculate carbon credits with low uncertainty. The results indicate that expensive in-field soil sampling may not be required when focusing only on quantifying soil carbon credits from farm conservation practices—a major benefit for the agricultural carbon credit market. “The approach in this study can be applied to other models and used to assess important uncertainties of the carbon sequestration potential of various conservative land management practices,” said Bin Peng, the other primary author of the study and senior research scientist at ASC and the Department of Natural Resources and Environmental Sciences (NRES) at Illinois.

If I had a nickel – Canada Nickel Company has devised an In-Process Tailings (IPT) Carbonation process that injects a concentrated source of CO2 in tailings from the milling process while the tailings are still in the processing circuit, rather than after they have been deposited, International Mining reported. The latest test work was conducted on material from the Crawford, Ontario project at Kingston Process Metallurgy (KPM). The testing resulted in 37 tCO2 captured/tonne of nickel – 34 tonnes of that amount was captured within 25 hours. The 37-tonne figure is believed to represent a potential maximum and there is no certainty that such an amount could be achieved in commercial operation, the company said. Canada Nickel believes that the IPT Carbonation process could be scaled up with availability of concentrated (rather than atmospheric) sources of CO2, potentially from downstream processing of concentrates from its Crawford plant, a wide range of industrial processing activities, green hydrogen production, or carbon capture facilities. The integrated feasibility study for the project is expected to be delivered in Q2 2023, with Canada Nickel continuing to target receipt of permits by mid-2025 with construction to follow. The company believes the successful incorporation of IPT Carbonation could also potentially allow a portion of its project capital expenditures to become eligible for the CCS refundable investment tax credits of 37.5–60% from 2022–30 and 18.75–30% from 2031–40 announced in the 2022 federal budget.

Born for the corn – Boston-based Indigo Ag and fertiliser distributor ISAOSA on Thursday announced plans to bring Indigo’s microbial technology to Mexican corn growers for the first time. Indigo 30, which is part of the ag tech company’s portfolio of microbial products, has been proven to increase crop yields of corn, the company said in a press release. The novel formulation will for the first timetable Indigo 30 to be directly mixed with fertiliser, which significantly expands the window of application of the product for farmers. Commercial launch is planned for the first half of 2024 following completion of the registration process.

AND FINALLY…

Climate quitters – Tackling climate change will transform the labour market. With the right policies in place, more than 24 mln green jobs could be created globally by 2030, according to the International Labour Organization, Bloomberg reports. But finding people to fill those roles quickly won’t be easy. One 2022 LinkedIn survey found that listings for green jobs have grown at an annual pace of 8% since 2015, while green talent grew only 6% each year over the same period. One bright spot: many job seekers are now looking to work in companies aligned with climate goals. A 2021 Yale School of Management survey of 2,000 students across 29 business schools globally found that 51% would accept lower salaries to work for an environmentally responsible company. That’s a good sign, because filling the labour gap will require both new skills and people leaving their existing jobs for new and rapidly evolving industries. This year, more people were employed by clean energy companies than by fossil fuels, according to a report by the IEA. There is also a growing roster of people who are quitting their jobs to tackle climate change.

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