CP Daily: Monday January 16, 2023

Published 03:16 on January 17, 2023  /  Last updated at 03:16 on January 17, 2023  /  Newsletters  /  No Comments

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

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TOP STORY

Brussels competition chief Vestager, France align on EU industrial policy approach

EU competition chief  Margrethe Vestager and French officials have released similar strategies on how the EU should respond to the US green stimulus package, with beefed-up subsidies and continued relaxation of state aid rules for key energy transition sectors at the heart of the plans.

EMEA

UK minister underlines “economic opportunity” of net zero, confirms ETS reform in 2023

UK climate minister Graham Stuart welcomed a recent review into the country’s net zero strategy on Monday, highlighting the economic benefit of immediate climate action and confirming there would be developments on UK ETS reform in 2023.

Euro Markets: Carbon sheds 2.9% as market focuses on gas price weakness and prospect of fuel switching

European carbon began the week on a bearish note as energy prices extended losses for a fifth consecutive session on Monday, bringing the bearish prospect of coal-to-gas fuel switching closer than it has been for many months despite forecasts calling for a spell of lower temperatures.

AMERICAS

Canadian investment firm joins with former MP to launch carbon credit venture

A Vancouver-based carbon credit investment firm announced in a press release its plans to generate technology-based credits with municipal and federal governments on Monday, and a former Conservative Party Member of Parliament from Alberta is partnering on the project.

ASIA PACIFIC

NZ Market: NZU price slides to six-month low on gloomy outlook

The secondary price for NZUs in New Zealand’s ETS has hit a six month low in recent days, as recent government announcements indicate it aims to keep prices low due to inflationary and political pressures.

Australian govt grants a further A$70 mln for regional hydrogen hub development

The Australian government will provide A$70 million ($49 mln) for the development of a hydrogen hub in the state of Queensland, Prime Minister Anthony Albanese and the Minister for Energy and Climate Change, Chris Bowen, have jointly announced.

Korea’s SK forms VCM partnership with UAE sovereign wealth fund

South Korea’s SK Group has agreed to form a partnership with Mubadala Investment, a sovereign wealth fund of the United Arab Emirates (UAE), to cooperate in voluntary carbon markets (VCM) in the Asian region.

VOLUNTARY

Africa carbon market initiative confirms next steps, secures upfront sales

The Africa Carbon Markets Initiative (ACMI) advanced on its 13-point action programme on Monday, while revealing details on an already-secured $200 million in advance sales of carbon credits.

VCM Report: Bear market continues into 2023 as surplus of credits grows

Standardised carbon credit prices slipped lower over the past week, particularly in nature-based contracts where the bearish trend was evident across the curve.

US envoy Kerry outlines next steps for ETA voluntary carbon market concept

US climate envoy John Kerry on Sunday set out initial core principles and the first experts for an advisory panel for the Energy Transition Accelerator (ETA) jurisdictional carbon crediting mechanism.

Korea’s SK forms VCM partnership with UAE sovereign wealth fund

South Korea’s SK Group has agreed to form a partnership with Mubadala Investment, a sovereign wealth fund of the United Arab Emirates (UAE), to cooperate in voluntary carbon markets (VCM) in the Asian region.

Major commodities trader commits to buy 50,000 tonnes worth of removals

A major trader of global commodities has made a commitment to purchase 50,000 tonnes of carbon removals by 2030 as a founding member of the First Movers Commission, it said on Monday.

Carbon offsetting programme inks €50 mln deal with blockchain marketplace

A firm that helps firms and individuals offset their climate impact has closed a sourcing deal worth up to €50 million to purchase carbon credits from a blockchain-based marketplace, they announced Monday.

BIODIVERSITY (FREE TO READ)

WEF principles on biodiversity market challenge area-based credits

The fledgling practice of issuing voluntary biodiversity credits based on the area protected by a project is among the elements scrutinised in a draft set of integrity and governance principles for the market released by the World Economic Forum.

WWF announces tool to help measure corporate impact and risks for biodiversity loss

Conservation organisation WWF launched a new free-access tool on Monday intended to help companies and investors better understand their impacts and dependencies on biodiversity.

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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

Kerry picking – US climate envoy John Kerry backs the UAE’s decision to appoint the CEO of a state-run oil company to preside over the upcoming UN COP28 climate negotiations in Dubai, citing his work on renewable energy projects. In an interview with the Associated Press, the former US secretary of state acknowledged that the UAE and other countries relying on fossil fuels to fund their state coffers face finding some balance ahead. However, he dismissed the idea that al-Jaber’s appointment should be automatically disqualified due to him leading the Abu Dhabi National Oil Co. Activists, however, equated it to asking arms dealers to lead peace talks when authorities announced his nomination Thursday. (Guardian)

EMEA

Greta be worth it – Around 6,000 protesters – including climate activist Greta Thunberg – marched through mud and rain to the German village of Luetzerath on Saturday, according to a police estimate, demonstrating against the expansion of an opencast lignite mine, Climate Home reports. The clearing of the village in the western state of North Rhine-Westphalia was agreed between RWE and the government in a deal that allowed the energy giant to demolish Lutzerath in exchange for its faster exit from coal and saving five villages originally slated for destruction. “This is a betrayal of present and future generations … Germany is one of the biggest polluters in the world and needs to be held accountable,” Thunberg said.

Greenlight to FF55 – The European Parliament’s environment committee swiftly approved all three pieces of Fit for 55 climate policy legislation submitted to them on Monday evening, in what the committee’s president Pascal Canfin described a “positive mood”. Results of the swift voting session show wide margins with 60 in favour, 10 contrary and 6 abstainers for a provisional trilogue agreement on land use, forestry and agriculture (LULUCF), 62 in favour, 12 contrary and 3 abstainers on the Effort Sharing Regulation (ESR) for other non-ETS sectors, and 69 in favour, 4 contrary and 5 abstainers on the deforestation import bill. All three files are now expected to be put to the vote of the full Parliament in March, with parallel approvals needed by the EU Council of member states before they can pass into law.

No friend of this earth – Campaign group Friends of the Earth confirmed that it has officially kicked off legal action against the UK government’s controversial decision to grant planning approval for a new coal mine in Cumbria, BusinessGreen reports. The campaign group said it filed an application with the High Court to challenge the government’s decision late on Friday afternoon, arguing that it was unlawful on multiple grounds. The campaign group said that the government’s lengthy decision document explaining its approval for the Whitehaven coal mine “glossed over” or ignored submissions to the planning inquiry made by environmental campaigners. Specifically, the application for a judicial review of the decision alleges the government’s conclusion that the mine developer’s plans to purchase carbon offsets would result in ‘net zero’ emissions from the site was “wrong and unlawful” as such offset credits do not count towards the UK’s carbon budgets.

Blue economy – The recently-born Clean Energy Marine Hubs (CEM Hubs) initiative from the International Chamber of Shipping (ICS), the International Association of Ports & Harbors (IAPH) and the Clean Energy Ministerial (CEM) got room for discussion at International Renewable Energy Agency’s (IRENA) assembly last weekend in Abu Dhabi. IRENA welcomed the cross-sectoral public-private platform aimed to accelerate the production, transport and use of low-carbon fuels that will be transported by shipping for the world. They added that IRENA “will continue to expand its collaboration with ICS and partners in the shipping sector to further strengthen the CEM Hubs initiative and accelerate the use of renewables-based fuels in the shipping and other end-use sectors”. Backed by the UAE, Canada, Norway, Uruguay and Panama, the CEM Hubs may now be on the EU radar, as commissioners Frans Timmermans and Kadri Simson attended the assembly, too.

ASIA PACIFIC

Sustainable bonds – To finance Singapore’s green energy transition and ensure the stability of the electricity market, the country’s Energy Market Authority (EMA) is looking to launch green, sustainable and transition bonds as part of a $2 billion multi-currency medium-term note programme, The Straits Times reports. Green bonds are financial instruments used to fund projects with environmental benefits, and provide investors with regular or fixed-income payments. Markets and regulators are currently moving towards tightening the definition of projects that can qualify for green bonds. Sustainable and transition bonds, on the other hand, are targeted at helping carbon-intensive companies or governments to cut their greenhouse gas emissions. These bonds could involve projects relating to natural gas, such as retrofitting existing natural gas plants to lower their emission intensity. These would otherwise not qualify for the issuance of green bonds, said OCBC Bank’s credit research analyst Ezien Hoo. Ms Hoo also noted that the bonds, if launched, would be EMA’s inaugural bond issuance, and come after a number of public agencies have done so to finance various types of sustainable infrastructure.

Charging up — The Queensland government has released a discussion paper on how the state can become a global leader of the battery and energy storage industry. The Labor government’s energy and jobs package commits A$500 mln ($348 mln) to invest in large-scale and community batteries. Acting Premier Stephen Miles said the plan would support the deployment of network batteries of different scales to provide additional energy storage for excess solar and improve resilience. Feedback from the industry will help inform the ongoing development of the government’s Queensland Battery Industry Strategy, which is expected to be released in mid-2023. The final strategy will focus on how to move the state’s critical minerals further along the value chain. This includes how to boost Queensland’s capabilities in refining, production of advanced battery materials, cell manufacture, pack assembly, installation, and recycling. Submissions on the discussion paper are open until Mar. 31, 2023.

New hydrogen plan – SK Energy, SK Innovation’s refining arm, has signed a Memorandum of Understanding (MOU) with Korea Hydro & Nuclear Power to promote a gas-station-based distributed power generation business in urban areas, according to a company statement. The two firms said they aim to cooperate in establishing hydrogen charging stations and promoting their eco-friendly hydrogen convergence business that uses waste resources, with two pilot sites already running with installed fuel cells in two SK gas stations. As part of the plan, the two companies will continue utilising SK Energy’s contact points with customers, such as gas stations and idle public lands, to establish “Hybrid Energy Super Stations,” the statement said.

AMERICAS

Powering Kitimat – LNG Canada’s first LNG export terminal at Kitimat, BC is weighing a second phase expansion that will double its annual liquefaction capacity to 28 Mt, but will be powered initially by natural gas-fired turbines, pending a final investment decision, Reuters reported. The phase 2 LNG plant would switch to electricity as more renewable power becomes available, which requires hundreds of kilometres of new transmission lines from BC’s hydroelectric generation plants to the Kitimat terminal located in the province’s remote northwest coast. Electrifying Phase 2 is expected to be more expensive than using natural gas, but some buyers may pay more for LNG produced with lower emissions, Jason Klein, CEO at LNG Canada said, noting that some buyers already purchase carbon offsets for LNG cargoes. LNG Canada says the terminal would emit 4 Mt/yr of GHG annually – the lowest emissions intensity in the world – if both phases used natural gas power. Future LNG projects need to fit within BC’s climate goals, the province’s ministry of energy said in a statement, while federal environment minister Steven Guilbeault said it was up to BC to decide what to do with its electricity.

Boycott backlash – The 24 US states considering legislation modelled after the Energy Discrimination Elimination Act, which pulls government funds from investment firms considering ESG, could lose millions of dollars in the municipal bonds market, an Econsult Solutions study found. Texas has already passed the legislation while Florida, Kentucky, Louisiana, Missouri, Oklahoma, and West Virginia are among the states considering similar bills. The study found municipal bonds could miss out on $264-$708 mln in interest payments should the bills go ahead. (New Jersey Monitor)

AND FINALLY…

Lake light-up – New York’s Symbion Power has won a bid to produce electricity from methane trapped in a lake in eastern Democratic Republic of Congo, the country’s oil minister Didier Budimbu Ntubuanga told Bloomberg. Symbion’s CEO Paul Hinks confirmed the company won the Makelele methane gas block on Lake Kivu with its partner Renewable Energy Developments. The company proposed a 60MW $300 mln-plus gas-to-electricity project, in one of the world’s least-electrified nations. Lake Kivu is shared by Congo and Rwanda and contains enough methane to produce an estimated 700 MW of electricity over more than 50 years. The methane, produced in part by microorganisms in the lake, is dissolved in its deep waters.

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