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TOP STORY

ANALYSIS: Brazil poised to pass bill enforcing regulated carbon market

The Brazilian Congress is likely to pass a proposal to launch a national carbon trading programme covering the compliance and voluntary market, endorsed by newly-inaugurated President Lula da Silva, experts told Carbon Pulse.

INTERNATIONAL

UAE picks oil company boss as president of COP28 climate talks

The United Arab Emirates has selected state oil firm boss Sultan Al-Jaber as president of the next UN climate conference to be held in the nation in December, angering climate campaigners who likened the appointment to a cigarette company leader being put in charge of a health conference.

Clean energy tech investment can surge with climate policy backing, IEA says

The global market for key mass-manufactured clean energy technologies will reach around $650 billion per year by 2030, around three times the current level, if countries worldwide fully implement their announced climate policies and pledges, the International Energy Agency (IEA) stated in a report released on Thursday.

ICE to alter delivery method for California, nature-based carbon contracts

Exchange operator ICE in the coming months will change the delivery method for its California and nature-based carbon futures contracts, aligning its procedures with its Europe-based environmental products.

VOLUNTARY

Survey points to keen corporate interest in carbon credits, but also mistrust

Most business executives see the voluntary carbon market (VCM) as an important tool to meet near-term climate goals, according to a survey published on Thursday, with responses also raising significant concerns that some companies are using carbon credits for greenwashing.

Climeworks delivers first DAC removal tonnes to tech firms

Swiss firm Climeworks on Thursday announced it has distributed its first carbon removal tonnes from its direct air capture plus storage (DAC+S) facility in Iceland to three North American tech giants, with one of the companies having previously pledged to pay a steep price for the credits.

EMEA

Analysts forecast significant EUA tightness from the late 2020s in light of reforms

The EU ETS will move from oversupply to significant tightness towards the end of the decade and beyond, analysts said on Thursday, assessing the overall impact of recently-agreed reforms that have the overall effect of backloading ambition for several years.

EU carbon border mechanism less likely to face global backlash -lawmaker

The EU will face less international opposition for slapping on levy on industrial emissions outside its territory than it did a decade ago with airlines, key lawmaker Peter Liese said on Thursday, judging that the bloc’s carbon border adjustment mechanism (CBAM) will be fully implemented as a result.

Euro Markets: EUAs move up amid increased focus on short-dated trading

EUAs made healthy gains on Thursday with traders highlighting underlying demand in the run-up to compliance season, amid a growing focus on short-dated trading to keep costs down that has robbed the December contract of some liquidity.

AMERICAS

WCI Markets: CCA prices pick up amid renewed spread activity, Washington allowances stall

California Carbon Allowance (CCA) prices picked up momentum on the back of a watchdog report and stronger spread activity resuming after the winter break, while Washington Carbon Allowance (CCA) prices stalled after the initial bout of trades ahead of the official launch of the state’s cap-and-invest programme at the start of the year.

Virginia to open RGGI repeal proposal to public comment this month

Virginia Governor Glenn Youngkin’s (R) administration on Wednesday said it will move to public comment this month its proposal to rescind the state’s RGGI-linked cap-and-trade regulation at the end of the year.

ASIA PACIFIC

Shenzhen releases draft accounting guidelines for blue carbon

Shenzhen, home to more than 12 million people, has released a set of accounting guidelines for ocean-based carbon sink projects, as a broader ambition for the Chinese megacity to explore the potential of blue carbon.

EKI signs deal with DNV to enhance carbon market advisory services

Indian carbon offset developer EKI Energy Services will collaborate with DNV to promote awareness and support governance to develop a climate transition ecosystem, which will involve its provision of advisory services to the classification society’s assurance customers to help them reach their carbon neutral goals, the two entities announced on Thursday.

BIODIVERSITY (FREE TO READ)

ANALYSIS: Government must lead investment in Australia’s Nature Repair Market if it wants it to succeed, experts say

As the Australian government seeks input on its draft legislation for its Nature Repair Market, policy watchers warn that its so-called Green Wall Street will crash if it doesn’t lead investment in the market.

Conservation partnership forms to drive biodiversity credit pilot deals

Four organisations in the UK and Peru have partnered with the aim to facilitate one or more pilot biodiversity stewardship credits (BCS) transactions in a bid to create a model for future growth of a biodiversity market.

EU’s biggest party opposes MEP efforts to ramp up nature restoration law

The EU’s biggest political group will not support an effort in the European Parliament to increase the ambition of the bloc’s nature restoration bill, senior party members said on Thursday while urging that food security and increased cooperation with farmers must be taken into account.

Biodiversity Pulse Weekly: Thursday January 12, 2023

A weekly summary of our biodiversity news plus bite-sized updates from around the world. All articles in this edition are free to read (no subscription required).

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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

EMEA

Secret cash for coal – HSBC made a $360 mln loan to an energy company that is tearing down a German village to expand a large coal mine, despite its promise to phase down fossil fuel financing. According to a report by the UK-based Times, senior executives at the bank advised against disclosing a loan to the Garzweiler II open-cast mine as part of German energy company RWE’s coal project. An anonymous HSBC banker told the newspaper that it was their understanding the bank was happy to provide the funds but did not want to be publicly associated with the loan, calling the approach “questionable”. According to data from analysts at Refinitiv, RWE received $5.4 bln in loans from banks that have made commitments to align their financing and investments with net zero by 2050, also including Barclays and Santander. HSBC responded that details of this deal and all its participating banks are in the public domain, as is normal. The bank added that it has processes to ensure our financing aligns with our policies, which include an expectation on clients to produce and implement credible transition plans. (Investment Week)

Not zero – UK Prime Minister Rishi Sunak has been criticised by his own net zero tsar, who says the UK risks missing its green targets due to inconsistent policies and lack of commitment to pledges, The Guardian reports. In his net zero review, Chris Skidmore says a large barrier to renewable energy is a lack of confidence in the government, which has inconsistent policy support for green energy, with measures such as Sunak’s new electricity tax. One core issue mentioned throughout the report is a lack of policy commitment. Skidmore, a Conservative lawmaker like Sunak, was asked by the former prime minister Liz Truss to write a review on the policy to reach net zero carbon emissions by 2050. He was asked to find out what was working with the policy regarding not putting more carbon into the atmosphere than the UK absorbs, and to make the business case for the goal.

Climate listing – Exchange Euronext today announced the launch of the CAC SBT 1.5C an index investing solely in companies within the SBF 120 Index that have emissions reduction targets approved to be in line with the 1.5C goal of the Paris Agreement, it said in an emailed statement. After the launch of the Euronext CAC 40 ESG Index in March 2021, the bourse said the CAC SBT 1.5C will provide a climate-focused version of the CAC 40 and respond to the growing demand for sustainable investment tools from investors and from the market.

Capturing Copenhagen – The European Commission has approved, under EU State aid rules, a €1.1 bln Danish scheme to support the roll-out of CCS technologies. The aid will be awarded through a competitive tendering procedure to be concluded in 2023. The tender will be open to companies active in any industrial sectors, including the waste and energy sectors. Under a 20-year contract, the beneficiary will capture and store an annual minimum of 0.4 Mt CO2 from 2026. The aid will cover the difference between the estimated total costs of capturing and storing a tonne of CO2 over the lifetime of the contract and the return expected by the beneficiary. The maximum amount of aid will be equal to €54.9 mln a year, adjusted to inflation.

ASIA PACIFIC

Banking survey – WWF-Singapore’s 2022 Sustainable Banking Assessment, which now includes 36 ASEAN banks and 10 major Japanese and South Korean banks, finds that more than double the number of banks from 2021’s assessment have committed to achieving net-zero financed emissions by 2050, The Edge reports. The report, released on Jan 12, says more Asian banks have made commitments to achieve net-zero financed emissions by 2050, increasing from seven banks in 2021 (15%) to 18 banks in 2022 (39%). However, the report also finds that although leading banks continue to enhance their environmental and social risk management policies and processes, half the banks assessed have made little or no progress since 2021. “Many have not yet put basic environmental and social policies and procedures in place. As the chasm between leader and laggard banks in the region widens, laggard banks risk becoming disproportionately exposed to [such] risks. It is critical that all banks in the region rapidly progress so that we have a chance to achieve the 1.5°C goal,” reads WWF-Singapore’s report. Equally, when it comes to nature-related risks, banks need to go beyond recognition and commitment and expand their capacity to manage these risks within their policies. The report assess banks across their sustainability strategy, stakeholder engagement, public statements on environmental and social issues, assessing risks to clients, staff sustainability training and disclosure of targets, among others.

Certified – The Korea Chamber of Commerce and Industry(KCCI) said Thursday that it has established the Carbon Reduction Certification Center, a professional organisation that evaluates companies’ voluntary carbon reduction activities and certifies their reduction achievements in support of efforts toward carbon neutrality, reports the Korea Economic Daily. The centre will evaluate and certify company climate performances based on their products, technologies, and services, and is based around principles applied in global carbon standards such as the CDM, Verra, and Gold Standard.

Bad look – New Zealand Steel’s holding company Tasman Steel increased its profit by 153% to a bumper NZ$340 million ($215 mln) in June while receiving free NZUs worth NZ$117 mln from the government, Stuff reports. The government provides carbon credits to other large industrial emitters that compete with overseas firms and the steel business’s chief executive, Robin Davies, said they essentially “neutralised” carbon costs that were passed through to the company in its electricity bills. “Electricity providers pass through the cost of carbon to businesses like ours,” he said.  The rationale for large industrial exporters being reimbursed was that production could otherwise move overseas at no gain to the environment, he suggested. The Environment Ministry is currently reviewing the free allocations of carbon credits to companies such as NZ Steel.

More oil – Chinese oil giant CNOOC Ltd has raised its 2023 production target by around 8% to a record 650-660 mln barrels of oil equivalent (boe), compared to 620 mln boe produced last year, Reuters reports. The state-controlled company is aiming for 6% average annual production growth by 2025 when output is forecast to hit 2 mln boe a day, according to Chief Executive Officer Zhou Xinhuai. This year, CNOOC plans to spend 100-110 bln yuan ($14.8-16.3 bln), up from last year’s 100 billion yuan, the second highest ever after the 105.7 bln yuan it spent in 2014.

AMERICAS

To the Great White North – SRECTrade, the single partner to manage and transact environmental commodities, announced that it has expanded its management and transaction services to Canada. With these services, SRECTrade and parent company Xpansiv, the premier global market-infrastructure platform for environmental commodities, generate and monetise clean fuel credits to fund budgets to help cover the cost of deploying and operating zero emission vehicles. In June 2022, Canada launched the Clean Fuel Regulations (CFR), requiring a reduction in the carbon intensity of transportation fuels by 15% by 2030. This fuel-agnostic programme provides valuable incentives for transitioning to and operating clean fleets, including EV charging stations, electric and hydrogen buses, trucks, and other equipment. The CFR shares many similarities with clean fuel programmes across the US including the California Low Carbon Fuel Standard and Oregon Clean Fuel Program. SRECTrade is already serving Canadian companies and multinationals broadening their participation in clean fuel programmes. As the largest agent manager of EV charging and renewable energy assets across North America, the firm’s expansion into Canada solidifies SRECTrade’s continued leadership in the space, providing clients equitable access to clean fuel and renewable energy programmes wherever they exist.

A breath of fresh air – Hydrostor, a leading long-duration energy storage provider, and Central Coast Community Energy (3CE), one of California’s largest community choice aggregators, announced Thursday that they have executed a 25-year energy storage power purchase agreements (PPA) for 200 MW/1,600 MWh from Hydrostor’s 100%-owned Willow Rock Energy Storage Center. Using Hydrostor’s patented advanced compressed air energy storage solution, Willow Rock will abate up to 28 Mt/yr of CO2 over its lifetime, equivalent to removing 120,000+ cars from the road, each year, for 50+ years. The nearly $1 bln contract represents one of the largest standalone long-duration energy storage PPAs, providing 8 hours of energy storage to 3CE. Once completed, the project will help 3CE provide 100% clean and renewable energy to more than 440,000 customers by 2030 and support up to 40 full-time operating positions, and $500 mln in regional direct and indirect impacts to the local economy.

Renewed commitment – Pittsburgh-based PNC Financial Services Group announced Thursday the expansion of its environmental finance commitment to $30 bln. The bank initially announced in Aug. 2021 a commitment of $20 bln over five years in support of environmental finance. Since then, PNC has completed $9 bln in environmental financing for its customers. The $30 bln environmental finance goal is comprised of the following pillars which may evolve over time: green buildings, renewable energy, clean transportation, and environmental sustainability-linked bonds and loans. As a result of its recent integration of BBVA USA’s footprint, PNC is also planning to establish new, ambitious, science-aligned environmental targets for its operational footprint, including further reducing carbon emissions, and energy and water consumption.

VOLUNTARY

Accredit where accredit is due – Offset standard developer and manager Verra on Thursday announced it has authorised three new accreditation bodies for the VCS Program: Entidad Mexicana de Acreditacion; the US-based National Accreditation Board for Certification Bodies; and the Sri Lanka Accreditation Board for Conformity Assessment. Accreditation bodies can accredit validation and verification bodies (VVBs) for the VCS Program in their respective jurisdictions, Verra said in the announcement. They can also grant ISO 14065 accreditation – the international principles and requirements for bodies validating and verifying environmental information – to VVBs anywhere in the world. Verra said the move will support the continued growth of the voluntary carbon market (VCM), which is witnessing a surge of interest in new carbon projects and growing demand for auditing services. Authorising more entities to accredit VVBs should significantly reduce certification timelines and costs for VCS projects, Verra added.

Planting the seed – Open Forest Protocol, a Zug, Switzerland-based provider of an open forest measurement, reporting, and verification platform built on a carbon neutral blockchain, raised $4.1 mln in pre-seed funding, FinSMEs reported Wednesday. VC tech specialists such as Shima Capital, Ubermorgen Ventures, Not Boring Capital, Mercy Corps Ventures, Byzantine Marine, Big Brain Holdings, and Valor Capital have joined with a number of angel investors in supporting the platform. The company intends to use the funds to expand operations and its business reach. Founded by Swiss scientist Frederic Fournier and American web3 specialist Michael Kelly, Open Forest Protocol is an open platform allowing forest projects of any size, all over the world, to measure, report, and verify their forestation data – thus creating benefits all along the value chain, from local communities on the ground to the voluntary carbon market.

AND FINALLY…

Cold irony – In the week before Davos plays its usual wintry part as host of the World Economic Forum’s annual jamboree, the biggest question isn’t what might be discussed among business and political leaders, but whether there’ll be enough snow for skiing, Bloomberg reports. Despite decades of incremental change, the risks posed by a warming planet weren’t much of a priority for the world’s elite until recently. This year, more than a third of the panel discussions on the official agenda are linked to climate change, alongside the usual fare on the health of the global economy and the delicate state of geopolitics. But looking at the executive summaries from the 2010s, the first mention of “climate” didn’t come until 2014. Barring the pandemic, the WEF has physically convened business leaders and heads of state every year since 1971. Since then, the snowpack has thinned more than 40% on average.

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