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TOP STORY
PREVIEW: Chubb review findings to be released Monday as ACCU market hopes for end to uncertainty
The long-awaited findings of the review into Australia’s carbon market are expected to be released Monday, with market players hoping it will restore confidence in the system, and put lingering animosity between some actors to rest.
EMEA
Euro Markets: EUAs track gas sell-off to chart 8% weekly loss, fresh 6-wk low
EUA prices continued to closely follow gas market movements on Friday as afternoon losses on the TTF pressured carbon to a 1.8% slump on the day and a fall of 8% over the week.
Norway advances green hydrogen plans as Germany warms to CCS
Norwegian renewables powerhouse Statkraft gas ordered 40 MW of electrolysers from tech firm Nel, the companies said on Friday in a move that further boosts the country’s hydrogen capabilities following this week’s deepened energy partnership with Germany.
ASIA PACIFIC
More work needed to link Hong Kong with Chinese carbon markets -official
Hong Kong is still keen to find a way to link up with China’s carbon trading market, but more work has to be done to make that happen given the complexity of the issue, according to a top official at the Securities and Futures Commission (SFC).
CN Markets: CEA trading grinds to a halt with lower volume and price as uncertainty remains
Sentiment in the Chinese carbon market has fallen off a cliff in recent days after a flurry of trading activity in the last week of last year, while the central government has yet to make a final decision on allocation and offset rules going forward.
SK Market: KAUs fall by over a fifth in first week of new year
South Korean CO2 allowances lost a fifth of their value in the first week of 2023, as a glut of allowances and sluggish economic performance continued to weigh on sentiment despite government promises to improve market conditions.
AMERICAS
WCI compliance instrument overhang builds despite retirements in Q4
The compliance instrument surplus bank expanded in the fourth quarter even after accounting for 2021 interim obligations in the linked cap-and-trade system, according to programme data published Friday.
Compliance entities trim California carbon and RGGI length, while financials pad WCI position
Regulated parties reduced their California Carbon Allowance (CCA) and RGGI Allowance (RGA) net length this week, as financials went the opposite direction in the WCI market, according to US Commodity Futures Trading Commission (CFTC) data published Friday.
VOLUNTARY
Drivers to earn tokenised nature-based carbon credits from charging electric vehicles
The electric car revolution could be set for a fresh incentive with drivers soon to be able to earn tokenised nature-based credits after plugging into a charge point.
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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
Climate insurance – Chubb, the world’s largest publicly traded property and casualty insurance company, announced on Wednesday the launch of a new global climate business unit, drawing on the company’s extensive technical capabilities in underwriting and risk engineering and bringing together Chubb units engaged in traditional, alternative and renewable energy, climate tech, agribusiness, and risk engineering services. The new business unit will provide a full spectrum of insurance products and services to businesses engaged in developing or employing new technologies and processes that help reduce the dependence on carbon. It will also provide risk management and resiliency services to help those managing the impact of climate change.
EMEA
Blowin’ in the wind – Wind supplied over a quarter of Great Britain’s electricity for the first time ever last year, highlighting the rapid growth of the renewable energy, reports the Daily Telegraph. New figures from National Grid show wind was the second largest source of electricity over 2022, supplying 26.8%, up five percentage points from 2021. During the windiest month, February, turbines generated 41.4% of national supply. Meanwhile, a windy day on Dec. 30 saw turbines’ output hit 20.918 GW – the most Britain’s growing wind fleet has managed so far. Turbine-generated electricity was second only to gas as a source last year, which generated 38.5% of the mix. Meanwhile, gas-fired power generation reached a three-year high as demand rose for the country to generate and export electricity, Bloomberg reports. Almost 39% of power generated in Britain came from gas-fired plants, compared with about 38% in 2021 and 35% in 2020.
Fuel options – The German government wants to stick to the development of synthetic fuels despite the planned phaseout of combustion engines at EU level by 2035. €1.9 bln have been earmarked to support the rollout of e-fuels and “advanced biofuels” by 2026, the government said in response to an enquiry by the opposition CDU/CSU parliamentary group detailing funding still subject to European Commission approval. The government said last year that the use of synthetic fuels was “indispensable” to reach climate targets in the transport sector. In its response to the enquiry, the government now said that e-fuels and advanced biofuels are among the options that could help to lower emissions in the existing combustion engine car fleet. (AFP, Clean Energy Wire)
Just one Cyril – South Africa’s governing party said it is committed to reducing the nation’s reliance on coal but that a transition to cleaner forms of energy must be approached with caution to minimise any negative fallout. “We have resolved that the transition to a low-carbon economy must be just and inclusive,” President Cyril Ramaphosa said in his closing address to an African National Congress conference early Friday. “It must be executed at a pace that is in concert with the developmental needs of our country.” While Ramaphosa has championed the use of more renewable power, he has run into opposition from his Mineral Resources and Energy Minister Gwede Mantashe and labour unions that represent mineworkers and fear job losses. (Bloomberg)
AMERICAS
Under the microscope – The White House issued a new policy directive Friday that aims to spur clean energy development and fulfill US President Joe Biden’s pledge to strengthen the green economy, E&E News reports. The GHG guidance directs federal planners to mitigate GHGs “to the greatest extent possible” when surveying the impacts of projects like highways, pipelines, transmissions, bridges, and renewable energy ventures. The documents builds on an Obama-era edict that former President Donald Trump scrapped. The years-in-the-making guidance does not amount to a rulemaking and, to the chagrin of environmentalists, would be easy for a future president to quickly repeal. Still, the White House said the policy guidance complements ongoing rulemakings and would generally make clean energy project reviews clearer and more focused.
Renewed RNG interest – Renewable natural gas is sparking new interest from lenders and financiers close to Wall Street, with expanding subsidies for RNG production expected to support massive growth and investment in coming years, S&P Global Commodity Insights reports. The industry has experienced tremendous growth in recent years as facilities have rolled out across the US and Canada, although production volumes remain tiny compared with traditional generation or transport fuels. But Daniel Flannery, managing director of Riverstone Holdings, expects that could soon change, considering new subsidies offered under the Inflation Reduction Act signed into law by US President Joe Biden last year. That $370 bln green energy salvo included an investment tax credit promising to reimburse up to 40% of a qualified biogas project’s development costs, as well as a renewed $0.50/gal fuel tax credit for RNG used as a transportation fuel. His group is forecasting tenfold growth for US RNG production capacity in the long-term, from current levels around 220 MMcf/d to an ultimate potential around 2.2 Bcf/d, while near-term growth could explode following the IRA’s passage.
Vaulting ahead – Pacific Gas & Electric and Energy Vault, a Swiss-based energy storage developer, announced Thursday a partnership to operate a utility-scale battery plus green hydrogen long-duration energy storage system in Northern California. The hybrid system, with at least 293 MWh of dispatchable carbon-free energy, would be capable of powering about 2,000 electric customers on a PG&E microgrid in Calistoga, California. It’s expected to provide a minimum of 48 hours of backup power in outages and would be the first of its kind and largest utility-scale green hydrogen project in the US, Energy Vault said. (Utility Dive)
Minnesota movements – The Public Utilities Commission of Minnesota unanimously approved the state’s first carbon capture pipeline route on Friday, sending the proposed project to an environmental review. The 28 mi (45 km) pipeline would run from an ethanol plant in Minnesota to North Dakota, where the carbon would be buried deep underground. The project would cost $4.5 bln and the technology is yet to be deployed at scale. (AP)
Canadian carbon capture clash – Canadian PM Justin Trudeau, head of a Liberal minority government, is publicly urging the traditionally conservative-run, oil-producing province of Alberta to fund carbon capture and and storage (CCUS) tax credits with its budget surplus, a Friday interview with Reuters revealed. The Canadian oil and gas industry has been asking different levels of government for greater funding in light of the advantageous tax benefits to CCUS south of the border in the US, stemming from the Inflation Reduction Act. The Alberta United Conservative Party government, headed up by Premier Danielle Smith, has opposed funding climate policies.
ASIA PACIFIC
Harmonious — The Australian Renewable Energy Agency (ARENA) has committed A$1. million ($675,000) in grant funding to the University of Wollongong to support its harmonics study. A statement from ARENA said the study aims to develop a methodology that will help energy grids accommodate variable energy outputs, such as wind and solar. The project will help overcome the effects of voltage waveform distortion, known as harmonics, which can adversely impact grids and hold back renewables, ARENA said. “The University of Wollongong is tackling a very important project in harmonics that has the potential to benefit our energy transition by reducing the grid connection costs associated with renewable energy generation, while also addressing the integration challenges of new grid scale supply,” ARENA CEO Darren Miller said. “This will help ensure secure and reliable grid operation at high levels of renewables penetration”.
Green acquisition — HSBC Asset Management is adding energy transition infrastructure boutique Green Transition Partners (GTP) to its alternatives business lineup, Pensions & Investments reports. Hong Kong-based GTP, a specialist asset manager investing in green energy infrastructure such as storage, grids, charging, and hydrogen infrastructure across Asia, launched in 2021, but its team has been working together for more than five years, according to a spokeswoman for HSBC. The combination of GTP and HSBC’s existing business across the region will give HSBC Alternatives the “scale, reach, and capabilities to provide some of the capital required to support the transition to net-zero” in what will likely prove the world’s biggest market for energy transition infrastructure investments, Daisy Ho, HSBC Asset Management’s Asia-Pacific CEO, said in a news release.
VOLUNTARY
A league of their own – The NFL’s Houston Texans agreed to buy carbon credits from Occidental Petroleum to offset the impacts of the team’s air travel to games in other cities. Occidental’s 1PointFive unit said it will be the team’s “preferred carbon removal partner,” according to a statement released Friday. The Texans, currently the worst-ranked team in the NFL, said the offsets will cover three seasons of flights. Occidental’s DAC project in the Permian Basin oilfield of West Texas will remove 500,000 t/y of CO2 and lock the GHGs deep underground. The Houston Texans will pay Occidental for credits tied to a share of the carbon removed. Construction of the plant is expected to finish in 2024. Such arrangements were viewed with skepticism when Occidental first announced the project in 2019 but since then major emitters such as Airbus and United Airlines have signed up for offsets. The business received a further boost from the Inflation Reduction Act last year that provides for a $180/t tax credit to remove CO2 from the air.
AND FINALLY…
Green partying – Allcot, a global offset project developer and carbon market investor headquartered in Switzerland, has compensated 6 tonnes of carbon emissions from its end-of-year celebrations in Spain, Senegal, Colombia, Mexico and Argentina in 2022, the company posted on Linkedin. The carbon credits acquired come from a REDD+ project in Colombia called Siviru-Usagara-Pizarro-Piliza (VCS ID. 1391). The Verra-credited project is expected to generate 7.9 mln VCUs over its lifetime.
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