CP Daily: Monday January 23, 2023

Published 03:22 on January 24, 2023  /  Last updated at 03:40 on January 24, 2023  /  Newsletters  /  No Comments

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

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TOP STORY

Voluntary carbon market could reach $1 trillion valuation under right rules, say analysts

The value of the voluntary carbon market (VCM) could approach $1 trillion as soon as 2037 if stakeholders adopt more rigorous quality standards and puts a greater emphasis on carbon removal, analysts said in a report published Monday that said such developments would solidify market confidence, lift prices, and drive demand.

VOLUNTARY

VCM Report: Damning reports on REDD+ crush prices as buyers retreat

REDD+ avoided deforestation credit prices continued to sink over the past week in the wake of damning reports published in national newspapers about widespread over-crediting in the sector.

Record number of financials request firms to disclose environmental impact -report

A record 260 financial institutions participated last year in a campaign aimed at getting firms to disclose their environmental impact, marking a 56% increase over 2021, according to a report released on Monday that reflects the growing pressure investors are placing on companies to raise climate ambition.

Ratings agency puts US CCS projects ‘on watch’ for potential score change

A carbon credit ratings agency has put three ACR-certified enhanced oil recovery (EOR) projects in the US on ratings watch for a potential score change.

Former C-Quest Capital manager launches digital offset management platform

A former investment manager at project developer C-Quest Capital has co-founded a software firm that is launching a digital platform designed to streamline the management of carbon offset projects.

AMERICAS

US-based investment firm nets over $100 million for global carbon allowance fund

A New York-headquartered asset manager substantially ramped up its sales over the last 12 months in a fund that invests in compliance carbon markets worldwide, according to a filing submitted to the US Securities and Exchange Commission (SEC) on Friday.

RGGI Market: RGA prices stumble back toward early-year levels as lower heating demand weighs

RGGI Allowance (RGA) prices gave up some of the prior week’s gains as gas prices and power demand lessened, while traders debated the potential market impacts of a court decision on Pennsylvania’s cap-and-trade regulation injunction materialising in the short term.

Oregon offset project that failed to report wildfire carbon loss compliant for now, California’s ARB says

A forest offset project owned by Indigenous tribes in Oregon has not publicly disclosed unintentional reversals in carbon stock from a large wildfire in 2020, but California regulator ARB maintains the operation has not broken any rules under the state’s cap-and-trade regulation.

EMEA

UK’s steel bailouts signpost green subsidy boost, carbon border adjustment

The UK is expected to announce some £600 million in support to help decarbonise two steelmakers according to several media reports, a potential signpost for the nation joining the broader global green subsidy push, while simultaneously considering a carbon border adjustment to ensure fair competition.

Euro Markets: EUAs test key resistance as analyst warns of allocation delays

EUAs gave up an early rally to three-week highs but still ended the day modestly higher after repeatedly testing a key resistance level, shrugging off an analyst’s warning that the issuance of free allowances for 2023 may be delayed.

ASIA PACIFIC

Australia Market Roundup: ACCUs rise 11%, as regulator mints 300k credits

Australian Carbon Credit Units (ACCUs) have increased their value by around 11% across the board over the past week, while the Clean Energy Regulator issued 300,000 new units to project proponents.

INTERNATIONAL

Steel industry overlooking mine methane leaks in low-carbon transition -report

Decarbonisation pathways for the steel sector place too much weight on relatively nascent, tech-focused solutions such as CCUS for reducing emissions, while overlooking methane discharges during coal mining that could be addressed immediately, according to a report published Monday.

SPONSORED

Post-COP27, Carbon Markets Turn Focus to Pricing -CME Group

Promoted content – Sponsored by CME Group: Following COP27, carbon markets are focused on a pricing benchmark. CME Group GEO futures are seeing increased interest as a tool to manage carbon pricing risk.

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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

Carbon calculations – In partnership with over 30 leading global organisations, Smart Freight Centre and the World Business Council for Sustainable Development (WBCSD) have released a new guidance to support GHG emissions data sharing across the logistics value chain, Fibre2Fashion reported Sunday. The two organisations have partnered in a bid to increase transparency on logistics emissions and work towards a net-zero logistics sector. This consortium is supported by the World Economic Forum, and McKinsey Sustainability is its knowledge partner. The objective of the guidance is to enable companies to better understand and track their logistics emissions on a granular operational level and seeks to quantify the footprint of end-to-end logistics emissions, from supplier to final customer, with a focus on primary data calculations.

EMEA

Electricity market outreach – The EU Commission has launched a consultation on the reform of the electricity market design. The consultation, open until Feb. 13, will support the Commission’s work on a legislative proposal, expected in Q1. The reform was announced by President von der Leyen in her annual State of the Union Speech last year and has been called for by the European Council, too. The goal is to “make the electricity market design fit for the future, allowing it to deliver the benefits of affordable clean energy to everyone”, Energy Commissioner Kadri Simson said. The reform should “better shield households and businesses from high energy prices, to increase resilience, and to accelerate the transition set out in the European Green Deal and REPowerEU Plan”, the announcement read.

Quake-prone – The Netherlands wants to close Europe’s largest gasfield this year because it is considered dangerous to keep operating it, according to a government official. Hans Vijlbrief, state secretary for mining, who is responsible for the earthquake-prone Groningen gasfield, said he aimed to shut it by Oct. 1 but would wait to see if there was a shortage of gas in Europe after the winter. If necessary, it would remain open until Oct. 2024. The onshore gasfield, in Netherlands’ north-east close to the German border, is currently producing just a fraction of its capacity, said Vijlbrief, who also ruled out expanding production at the site. (Financial Times)

Fair warning – One of Europe’s biggest investors is putting banks on notice and may start exiting the sector unless it sees proof that claims of portfolio decarbonisation are matched by action, Bloomberg reported Monday. ABP, Europe’s biggest pension fund with about $600 bln under management, is setting “transparent” key performance indicators that financial firms must meet in order to avoid being sold off in the next three years, said Dominique Dijkhuis, a member of the executive board and head of investments at ABP. Banks need to “take responsibility,” which means looking “very critically” at their fossil-fuel exposures and “maybe move out.” The remarks reflect a rapidly evolving landscape, as institutional investors, regulators, legislators, and climate activists ramp up scrutiny of the finance industry’s role in fueling GHGs. That’s as banks making net-zero pledges continue to provide substantial support to oil, gas, and coal firms that are expanding their business.

It’s how you burn it – The International Energy Agency (IEA) has acknowledged “weaknesses” in how biomass energy is counted in national statistics after several EU countries reported a sudden increase in residential wood burning to meet their 2020 renewable energy goals, Euractiv reports. Biomass is often portrayed as an overlooked energy giant, with the European Commission saying it is “the main source of renewable energy in the EU, with a share of almost 60%” – more than wind and solar combined. Yet, experts agree these figures are probably overstated because of the way biomass is counted in EU renewable energy statistics, especially when it is burned for heating. “The worst way to burn biomass is to do it in an open fire,” said Jan Rosenow, director of European programmes at the Regulatory Assistance Project (RAP), a think-tank specialised in clean energy. According to Rosenow, around 30% of the energy contained in a wood log is transformed into usable heat when burned in a fireplace, while the remaining 70% is just lost and “goes up your chimney”. However, that is not reflected in official EU statistics, which assume that 100% of the biomass is burned efficiently. By contrast, other renewable heating technologies like heat pumps, which run on electricity, are measured according to a different metric: energy output, or useful energy. The result, according to Rosenow, is that biomass-based heating looks disproportionately bigger than it really is in the EU’s official statistical reports. “Biomass is counted in primary energy terms, not useful energy. If you used useful energy excluding energy waste, it would probably be a lot less,” he said.

Pedal to das metal – German transport minister Volker Wissing has renewed his rejection of a general speed limit on the country’s autobahns after a report found that the measure could save almost three times more emissions than previously thought. “Speed belongs to the citizens’ own responsibility as long as others are not endangered,” the Free Democrat (FDP) said, according to a report on tagesschau.de. “The state should hold back here.” Wissing added that high energy prices “are already causing many people to drive more slowly.” Germany’s environment agency UBA said in a report that a motorway speed limit of 120 km/hour would reduce CO2 emissions by about 6.7 Mt a year. In an earlier report from 2020, using a different methodology, the UBA had said that a speed limit would reduce emissions by 2.6 Mt. (Clean Energy Wire)

The fate of COP28 – Frans Timmermans, EU vice-president in charge of the European Green Deal, started on Monday a week-long visit to Latin America. He will visit Brazil (Jan. 23-24), Colombia (Jan. 25-27), and Mexico (Jan. 28-30) to discuss the forthcoming COP28 UN climate conference with government representatives, stakeholders and civil society, and take stock of progress made on emission reductions, environmental protection and the clean energy transition. On Tuesday, Timmermans will be in the city of Belem in the Amazones, candidate to host COP30.

AMERICAS

Not fast enough – US Treasury Secretary Janet Yellen on Sunday said the country wanted to see quicker progress on the World Bank’s plans for expanding its lending capacity to address climate change and other global crises, Reuters reported Sunday. The World Bank’s “evolution roadmap”, reported by Reuters earlier this month, calls for the bank to negotiate with shareholders ahead of April meetings on proposals that include a capital increase and new lending tools. It calls for World Bank management to develop specific proposals to change its mission, operating model, and financial capacity that could be approved by the joint World Bank and IMF Development Committee in October. The plan marks the start of a negotiation process to alter the bank’s mission and financial resources and shift it away from a country- and project-specific lending model used since its creation at the end of World War II.

In the driver’s seat – California on Friday announced the latest data regarding its transition to zero-emission vehicles (ZEVs) in the state. Electric, plug-in hybrid, and fuel cell vehicles garnered 18% of all new car sales in 2022, according to media outlet Engadget. Residents from California bought 345,800 ZEVs, a 38% increase from 2021 and a 138% increase from 2020. Two-thirds of the accumulated bought vehicles were made by automaker Tesla. Governor Gavin Newsom stated that the state has been continuing to lead this revolution of transitioning the world with ZEVs as it introduced new policies and investments that drive innovation, create jobs, and expand access and affordability for ZEVs. (Tech Times)

Renewable buying spree – The California PUC is considering asking electricity providers in the state to procure 4 GW of new capacity to ensure grid reliability, in addition to the 11.5 GW of procurement the regulators ordered in 2021, Utility Dive reported Monday. The additional capacity is required for a variety of reasons, including updated load forecasts that suggest electricity demand is increasing more than previously expected, the impacts of a changing climate, and the likelihood that more fossil fuel plants will be retiring, according to the agency. New forecasts point to increasing electric demand, beyond what regulators initially anticipated, likely due to extreme weather, a greater expected increase in electric vehicles, higher usage of air conditioning, and electrification of the built environment. At the same time, California expects to have less access to imported electricity from its neighboring states, as they face similar trends. Accordingly, the CPUC’s proposal would have power providers procure an additional 4 GW of resources, to come online in 2026 and 2027.

ASIA PACIFIC

Storage bill – The Western Australia state government has released for public consultation the Greenhouse Gas Storage and Transport Bill as part of its efforts to decarbonise the economy, the Department of Mines, Industry Regulation, and Safety said. The bill seeks to establish a legislative regime similar to the federal Offshore Petroleum and Greenhouse Gas Storage Act, and includes provisions such as property rights for GHG storage formations, acreage release for GHG exploration titles, and retention leases and injection licences. The consultation closes on Apr. 14.

SCIENCE & TECH

Cash cow – Bill Gates has joined a slew of billionaires investing in an Australian climate technology startup that has plans to disrupt the methane-emitting animal agriculture industry with a lab-grown feed additive, Farming Independent reported Monday. Breakthrough Energy Ventures, led by the Microsoft founder, and Andrew Forrest’s Harvest Road Group took part in a $12 mln Phase 2 seed funding round for Rumin8, according to a statement Monday. The Perth-based firm is developing a supplement for livestock made from synthetically-replicated bromoform, the active ingredient found in a red seaweed. Giving cows seaweed in their feed could cut 98 % of their methane emissions, according to one study. Livestock account for almost one third of man-made emissions of methane, the biggest contributor to global warming after carbon dioxide.

AND FINALLY…

Don’t know, don’t care – Half of those flying in business and first class “don’t care what their carbon footprint is”, according to a new poll from YouGov Profiles. When asked if they agreed with the statement that they “don’t care what (their) carbon footprint is,” 51% agreed and just 18% disagreed. The poll took place after the CEO of Heathrow, John Holland-Kaye, said that “wealthy people … and wealthy nations should be funding the energy transition in aviation to help support developing countries.” Speaking at Davos last week, Holland-Kaye said that the cost of travel would have to rise in the short-term to pay for Sustainable Aviation Fuel (SAF), but as production scaled up, prices would come down. SAF is between two and six times more expensive than traditional jet fuel, and is increasingly being offered by airlines at an additional cost to flyers. Air France has recently added a compulsory surcharge to its tickets to pay for SAF. The YouGov research found that while most (72%) of consumers who have booked first or business class in the past 12 months “don’t mind paying more for products that are good for the environment,” 65% though ‘it costs too much to be green all the time.” (Business Traveller)

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