CP Daily: Friday January 13, 2023

Published 00:41 on January 14, 2023  /  Last updated at 00:45 on January 14, 2023  /  Newsletters  /  No Comments

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

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TOP STORY

UK net zero review urges clarity on ETS, wants voluntary market regulator

The UK should set out a clearer pre-and post-2030 pathway for its ETS and give assurances for industry on carbon leakage risk, according to a government-commissioned review of the nation’s net zero strategy published on Friday that also called for voluntary carbon market regulation within two years.

ASIA PACIFIC

Australian Greens gearing up to fight Safeguard Mechanism reforms

The Australian Greens are laying the groundwork for a fight with the government over the Safeguard Mechanism once parliament resumes, centred on how coal, oil, and gas facilities covered by the scheme are treated.

AU Market: ACCU bull run continues as a record number of credits retired in 2022

The price for Australian Carbon Credit Units (ACCUs) ended trading up 2.8% Friday as the market continues to react positively to the Safeguard Mechanism reforms, while total voluntary Kyoto-era carbon credit retirements for 2022 reached a record 17.3 million.

CN Markets: CEAs lightly traded in the absence of new policy signals, bleak Q1 forecast

Volumes continued to drop in China’s emissions market over the past week, with price levels remaining rangebound while analysts expect trading activity to be stalled this quarter given holiday factors and the lack of regulatory updates from the central government.

EMEA

Euro Markets: EUAs reverse early losses on short covering for 3.2% weekly gain as gas correlation rises

EUAs fell to a week-low on Friday before staging a late rally on short covering to end the week up 3.2% despite weaker energy markets, while carbon’s short term price correlation with natural gas rose to its highest level in a year.

Brussels seeks to weigh funding options to respond to US subsidy plans

The EU should use one or more funding tools for clean tech investment so the bloc can ensure global competitiveness, European Commission’s president Ursula von der Leyen said on Friday.

Climate talks’ host UAE bolsters green hydrogen ties with Netherlands, UK

The United Arab Emirates on Friday made plans to advance its green hydrogen cooperation with the the Netherlands and the UK, adding to a pact stuck with Germany by this year’s UN climate talks host and furthering its ambition to becoming a major exporter of the fuel.

AMERICAS

US Carbon Markets and LCFS Roundup for week ending January 13, 2023

A summary of legislative, regulatory, and policy action on carbon and low-carbon fuel standard markets at the US federal and subnational levels this week, including a carbon offset and CCUS management proposal in Alaska, GHG reduction goal legislation in Colorado, and a constitutional amendment package for regulations in Pennsylvania.

Emitters add V23 permits, while speculators reduce holdings across North American carbon markets

Regulated parties increased their holdings across North American carbon markets, adding to California Carbon Allowance (CCA) and RGGI Allowance (RGA) net length this week, while financials reduced net interest across both markets, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

VOLUNTARY

Ocean-based CO2 removal firm secures $12 mln from Norwegian, Saudi oil majors

A California-based carbon removal company on Thursday announced it has raised $12 mln to accelerate its technology to sequester atmospheric CO2 directly from ocean water, for which tech giants have recently committed to pay nearly $1,000/tonne.

Climate solutions platform Chooose nets $15 mln from Temasek, Ashton Kutcher-affiliated firm

Norway-based Chooose on Friday announced a $15 mln capital raise from several venture capital firms to expand its climate tech platform that provides access to carbon offsets, removals, and sustainable aviation fuels.

Ratings firm puts high-scoring African REDD project ‘on watch’

A carbon credit ratings agency has put a highly-ranked Verra-certified REDD project on ratings watch for a potential downgrade, with a Gold Standard biogas project also facing scrutiny.

INTERNATIONAL

ART programme lists Ethiopia REDD+ concept, approves Guyana monitoring period

The Architecture for REDD+ Transactions (ART) Program on late Friday afternoon announced it has approved a listing for Ethiopia under The REDD+ Environmental Excellency Standard (TREES), as well as a monitoring report for Guyana’s emissions reductions achieved in 2021.

Low-carbon spending growth to slow in 2023 but hydrogen, CCUS emerge as bright spots, consultant says

Spending on low-carbon energy sources will increase by around 10% in 2023, reflecting slower annual growth than last year as investors remain wary of inflation, although investment in hydrogen and carbon capture and storage will more than double this year, analysis by an energy consulting firm released on Friday has projected.

BIODIVERSITY (FREE TO READ)

Asian banks lag on nature risks, WWF finds

Asian banks are increasingly recognising nature-related risks as important, but are making little headway in converting that recognition into clearly stated expectations from their clients, WWF Singapore’s annual Sustainable Banking Assessment (SUSBA) has found.

Seaweed is an underexploited resource in Europe, report finds

Seaweed farming can be a powerful tool to capture carbon and transform regional economies in the EU but it is being hindered by an overly-complicated and costly regulatory process, according to a report prepared for the European Commission and published on Friday.

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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

Port, meet storm – Nearly nine in ten major ports globally are exposed to damaging climate hazards, resulting in escalating economic impacts on global trade, according to new research from the University of Oxford’s Environmental Change Institute (ECI). Ports are crucial for the economy; they handle the vast majority of globe trade, are important hubs for industry and transport, and large providers of employment. But, by their very nature, ports are located in hazard-prone areas along the coast and close to rivers – exposed to storm and floods – and will have to cope with sea level rise and more severe storms because of climate change. This could cause physical damages to port infrastructure, and disrupt port operations – with far-reaching consequences. As a measure of how big the problems could be, Hurricane Katrina (2005) shut down three ports in the US that handle almost half the country’s agricultural exports. And the 2011 Tohoku earthquake and tsunami damaged maritime assets worth $12 bln. Nevertheless, the climate risks faced by ports have not been quantified on a global scale – until now. In a study published in Communications Earth and Environment this week, researchers from the ECI provide a detailed picture of climate risks for 1,340 of the most important ports globally. It combines a new geospatial database of port infrastructure assets with the most detailed available information on natural hazards, including earthquakes, cyclones and flooding, as well as localised information on “marine extremes” (wind speeds, waves, temperature, overtopping). The authors found that 86% of all ports are exposed to more than three types of climatic and geophysical hazards, and that extreme conditions at sea (e.g. storms) are expected to cause operational disruptions to around 40% of ports globally. What’s more, ports are exposed to other hazards including river flooding and earthquakes so port designers and operators have to take multiple hazards into consideration. But that’s not always happening at the moment, the report said. The climate risk totals $7.6 bln per year, most of which is attributed to tropical cyclones and river flooding of ports. This number is more than half as large as a previous estimate of the climate risk of road and rail infrastructure on a global scale, illustrating that, although ports only encompass relatively small areas, the high value and density of assets can contribute to the climate risk on a national and global scale.

EMEA

Wash it off – The European Commission will propose measures in the coming months to tackle misleading climate claims by companies, stepping up its efforts to curb widespread greenwashing in product advertisement, according to a draft document seen by Bloomberg. EU countries will have to ensure that environmental assertions made by companies about their products are backed by scientific evidence, according to draft European Commission proposals seen by Bloomberg. Under the plans, firms that want to tout the positive climate aspects of their offerings also have to highlight the detrimental effects or face fines.

Hot water – UK electricity firm Drax agreed to pay a £6.1 mln fine for breaching its licence, after charging the grid operator excessive prices to reduce its power generation, Bloomberg reports. The company’s pumped storage subsidiary secured “excessive payments” between 2019 and mid-2022 by entering inflated bids into the system’s balancing mechanism, which aims to fine-tune the country’s supply and demand, UK regulator Ofgem said in a statement. Drax cooperated fully with Ofgem and has put in place measures to prevent this happening again, a spokesperson said in an emailed statement.

Heating up – French senators rejected a resolution to take the country out of the European electricity market. But while the resolution was largely expected to fail, the vote on the contrary revealed growing defiance against the EU market, EurActiv reports. The resolution, put forward by the French communist group, received emphatic support from other left-wing parties in what appeared as an unprecedented statement of distrust in the EU electricity market. Wholesale electricity prices have skyrocketed last year on the back of falling Russian gas supplies, low hydropower production caused by summer droughts and widespread failures in the French nuclear power fleet. But according to one communist senator, the problem has more to do with the market’s structure than with the Ukraine war or France’s ailing nuclear fleet – a view that seems to be gaining traction in the Senate. The 57 senators of the centre-right Union Centrist (UC) group unexpectedly supported the senator’s resolution, which suggested leaving the European electricity market altogether in response to soaring power prices.

ASIA PACIFIC

Gold diggers – An Australian company, Gold Hydrogen, which holds the largest tenure position over naturally occurring hydrogen in Australia on South Australia’s Yorke Peninsula and Kangaroo Island, is looking to play a part in the country’s low carbon and low-cost energy mix, Stockhead reports. Gold hydrogen is hydrogen that occurs naturally via geological processes, which offers significant cost and emissions advantages relative to other means of production. A treasure trove of data detailing accidental natural hydrogen discoveries by South Australian geologists in the 1930s is what led the decision of Gold Hydrogen team of energy experts to jump into the fast-moving hydrogen space. Chaired by the country’s longest serving foreign minister, Alexander Downer, as well as resources exploration expert Luke Titus and managing director Neil McDonald, the company has been admitted to the official list of the Australian Stock Exchange. In an interview with Stockhead, chief operating officer Luke Titus says the company plans to twin the original bores that were drilled almost a century ago by using modern techniques and applying further techniques such as soil testing, airborne surveys, and seismic processing to validate the historical hydrogen occurrences for the drilling process.

Hydro for hydrogen – Nepal is in a favourable situation for the production of hydrogen due to the abundance of renewable energy in the form of hydropower, the Kathmandu Post reports. According to reports from public and private entities, Nepal will have at least 10,000 megawatts of hydropower by 2030, with a demand of approximately 7,000 megawatts. The total capacity is expected to be 39,000 megawatts by 2040. Thus, surplus hydropower could be channelled to produce green hydrogen at a competitive price. It is anticipated that the cost of producing green hydrogen will be below $1 per kg by 2050. Meanwhile, the Indian government has set green hydrogen and ammonia consumption targets for some industries to create demand, the government said, as it unveiled a policy for green energy, Reuters reported on Friday.

Let’s talk blue carbon – Experts from Indonesia and South Korea exchanged their knowledge and experiences at a seminar on Wednesday to support blue carbon projects in Indonesia, Antara News reports. “This seminar is a follow-up to South Korea-Indonesia’s blue carbon cooperation,” assistant deputy for climate change and disaster mitigation at the coordinating ministry for maritime affairs and investment, Kus Prisetiahadi, said. The seminar served as a forum for Indonesian and South Korean experts in the field of blue carbon to discuss ideas that will become the foundation for designing blue carbon projects in Indonesia under the Official Development Assistance (ODA) scheme.

Summit score – The South Australian state capital of Adelaide will host the 2024 International Renewable Energy Conference (IREC), the state and federal government’s announced. Around 3,5000 participants are expected to attend the conference next year – the first time it will be held in Oceania. The government said the conference would  be an opportunity to strengthen international trade partnerships and showcase Australia’s renewed climate leadership. South Australia is leading the world in its take up of renewable energy – with 85% of the state’s electricity demand coming from wind and solar for December, according to data from market operator. “The future of energy in Australia and the world is renewable, and sharing the latest knowledge with international partners and experts will help make that vision a reality,” Climate Change and Energy Minister Chris Bowen said. “Australia is on the path to becoming a renewable energy superpower. Forums like IREC will help us continue to work with global partners, the Pacific and First Nations to address key challenges in renewable energy and find the best path to a clean energy future for all”. The summit will run from Apr. 7-11, 2024.

New partnership – China Hubei Emission Exchange has signed a strategic cooperation agreement with Wuhan Huayuan Electric Power Design Institute to work on carbon-related projects, the exchange said in a WeChat post. The two parties will work together to develop carbon assets, hold training sessions, provide low-carbon transition services for industries, and conduct study on regional offset programmes, the statement said. As one of the pilot emissions trading markets in China, the Hubei bourse has been operational since 2014, covering 166 MtCO2 in 2020.

AMERICAS

The Diablo you know – California regulators on Thursday voted to open a rulemaking to consider extending the operations of the 2.2GW Diablo Canyon nuclear power plant, the last operational nuclear facility in the state. The rulemaking stems from legislation approved last September, which among other things required the California Public Utilities Commission to issue a decision by the end of this year establishing new retirement dates for the two units of the nuclear plant. Diablo Canyon, which is owned and operated by Pacific Gas & Electric, is currently licensed to operate until 2024 and 2025 for each of its two units respectively. The 2022 legislation SB-846 allows Diablo Canyon Unit 1 to be kept running through Oct. 31, 2029, and Unit 2 until Oct. 31, 2030. In November, PG&E applied to the US Nuclear Regulatory Commission to keep the plant running until 2030. (Utility Dive)

Regulatory reform rodeo – The Canadian prairie province of Alberta’s carbon pricing and emissions trading system, the Technology Innovation and Emissions Reduction (TIER) regime, is holding its first public information session on recent amendments  Jan. 23, at 1330-1530 pm Mountain Time (1830-2030 GMT), the provincial government announced Friday. The amendments went into effect Jan. 1 and created stronger emissions standards and expanded offset usage to bring the regulation in line with the updated federal CO2 pricing benchmark.

Territory tie-up – The governments of Canada and the Yukon Territory on Thursday announced they have signed an Agreement in Principle (AiP) under the 2 Billion Trees programme. While the Government of Canada engages directly with individual organisations across the country toward planting trees under the 2 Billion Trees program, working closely with provinces and territories on shared planting plans is another way to strengthen the programme and tailor results for local communities, the federal administration said in a press release. AiPs are a vital first step in moving toward concrete agreements further supporting tree-planting initiatives across the country, it added.

VOLUNTARY

New kids on the blockchain – Carbon project developer Allcot has created a new business division – Allcot IO – to develop on-chain carbon projects, deepening its ties with the DeFi world despite the prolonged hiatus of blockchain activities in the voluntary carbon market over 2022. The Swiss-headquartered firm’s founder and CEO Alexis Leroy said the move “will bridge the gap between legacy projects mechanisms and the much needed scaling up and transparency to accelerate and multiply impacts”. The venture already touts partnerships with Web3 specialists Senken, Flowcarbon, and EcoRegistry. Read Carbon Pulse’s analysis on how traditional carbon actors are seeking to deepen ties with DeFi.

AND FINALLY…

Silent but deadly – ExxonMobil’s own scientists accurately predicted future global warming in reports dating back to the late 1970s and early 1980s, despite the company publicly continuing for years to cast doubt on climate science and lobby against climate action, according to a new analysis. Researchers examined climate projections produced between 1977 and 2003 by Exxon, one of the world’s biggest oil and gas companies. They found the company’s science was not only good enough to predict long term temperature rise, but also accurately predicted when human-caused climate change would become discernible, according to the report published Thursday in the journal Science. A slew of internal Exxon documents unearthed by researchers and journalists over the past few years have shown that the company was aware of the link between fossil fuels and climate change at least as far back as the 1970s. But until now, there hasn’t been an in-depth review of Exxon’s own climate modelling data, said Geoffrey Supran, a research fellow in the history of science at Harvard University and a co-author of the report. This is “the first-ever systematic assessment of the fossil fuel industry’s climate projections,” Supran told CNN.

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