CP Daily: Tuesday January 24, 2023

Published 01:57 on January 25, 2023  /  Last updated at 01:57 on January 25, 2023  /  Newsletters  /  No Comments

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

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TOP STORY

EU to push back annual ETS allocation and compliance deadlines to accommodate administrative workload

The EU will push back the deadlines for member states to hand out free EUAs and for installations to surrender allowances each year, acknowledging that the process of calculating allocations has been made more complicated by the need to adjust handouts according to individual installations’ output levels.

VOLUNTARY

Amid over-crediting claims, Verra promises revamped REDD plans in Q2

Standards body Verra has mounted a robust defence of REDD in the wake of damning reports of widespread over-crediting of projects it has accredited in the sector, promising on Tuesday that its new consolidated methodology for avoided deforestation will be released in the second quarter.

INTERVIEW: Integrity labelling set to clean house for existing carbon credits

The Integrity Council for the Voluntary Carbon Market (IC-VCM) has clarified that its labelling of high-integrity carbon credits will extend to past issuances, aiming to help clean up the considerable surplus of older-vintage credits.

Broker launches index price for REDD+ based on three well-known projects

A broking house is launching a new price assessment for REDD+ contracts based on the daily auction price of three well-known projects, at a time when the avoided deforestation market has been thrown into disarray by the publication of damning reports about widespread over-crediting.

Head of US commodities regulator underscores authority to oversee voluntary carbon market

The head of a US financial market regulator said in comments Monday that the agency is vested with the authority to oversee the voluntary carbon market (VCM), according to a media report.

Petroleum focused project developer gets funding boost from oil major investment vehicle

A carbon credit project developer focused on decarbonising the oil and gas sector has become the thirtieth investment for an oil major-owned climate fund’s $1 billion-plus portfolio.

EMEA

Euro Markets: EUAs plunge by most in three weeks as gas and power price drops trigger selling

EUA prices dropped the most in nearly three weeks on Tuesday as sustained selling emerged when gas prices plunged on news that a major US export facility is set to resume LNG shipments, while traders were surprised by an EU decision to shift the market’s annual issuance and compliance cycle.

AMERICAS

US Nuclear Regulatory Commission declines initial request to resume review of California’s Diablo Canyon reactors

A US government agency on Tuesday rejected a request from the operator of California’s Diablo Canyon Power Plant to reopen an earlier application that would extend the facility’s lifespan, saying that the nuclear energy installation had not submitted the information necessary to proceed with a review.

BIODIVERSITY (FREE TO READ)

US joins high-ambition coalition ahead of crucial ocean summit

The US is joining the high-ambition coalition on Biodiversity Beyond National Jurisdiction (BBNJ), a high-level official said Monday, seeking to create some momentum ahead of next month’s summit in New York where world nations hope to agree on an international legally binding BBNJ instrument.

EU launches initiative in fresh bid to tackle pollinator decline

The EU kicked off ‘a new deal for pollinators’ on Tuesday, renewing a 2018 initiative and following up on a citizens’ movement as one in three bee, butterfly, and hoverfly species are currently disappearing.

Australia’s environmental law failing to protect biodiversity, study finds

Australia’s environment protection and biodiversity conservation (EPBC) legislation failed to have any impact on halting species decline and habitat loss over a 15-year period, a University of Queensland study has found, urging the government to change its approach.

Amazon invests in French biodiversity fund

Amazon has announced it is investing €3 million in CDC Biodiversity’s Fonds Nature 2050 that will support nature and wildlife restoration in France.

COMMENT

Know your market – building trust to scale the global carbon markets

The voluntary carbon markets needs to continue developing the necessary infrastructure to increase the supply of credible projects and incentivise market participation, writes Robin Green of Carbonplace.

SPONSORED

Post-COP27, Carbon Markets Turn Focus to Pricing -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

Cocoa cash – The World Bank on Tuesday announced its Forest Carbon Partnership Facility (FCPF) has paid Ghana nearly $4.9 mln for reducing 973,500 tCO2e over June-Dec. 2019 through its Cocoa Forest REDD+ forest protection project, confirming prior reporting in December from the Ghanaian times. Ghana is eligible to receive three more payments totalling $50 mln for 10 Mt of reductions by the end of 2024, subject to showing further avoided deforestation results. Ghana is the second African country after Mozambique to receive FCFP payments, and third globally when including Costa Rica.

EMEA

Debt-for-nature – Portugal has signed an agreement to swap Cape Verde’s debt for investments in an environmental and climate fund that is being established by the archipelago nation off West Africa’s coast, Portuguese Prime Minister Antonio Costa said. The former Portuguese colony, which is already suffering from rising sea levels and significant biodiversity loss due to increasing ocean acidity, owes around €140 mln to the Portuguese state and over 400 mln to its banks and other entities. Costa said that initially, €12 mln of debt repayments to the state scheduled until 2025 will be put in the fund, and ultimately “the entire amount of debt repayments” will end up there, allowing Cape Verde to invest in energy transition and the fight against climate change. So-called “debt-for-nature” swap deals are emerging in other countries and are part of attempts to resolve a dilemma faced by world leaders on how and who will foot the bill for actions taken to reduce the impact of climate change. (Reuters)

Trucking out – The zero emission truck sector passed another major milestone, with the launch of Europe’s first dedicated electric truck charging corridor in Germany, BusinessGreen reports. BP’s electric vehicle charging arm, BP Pulse, announced the launch of six public charging locations along a 600 km stretch of the Rhine-Alpine corridor, which have been fitted with ultra-fast 300 kW charge points that are specifically designed for electric trucks, capable of charging more than 20 electric trucks, per charger each day. The corridor is one of the busiest road freight routes in Europe connecting North Sea ports in Belgium and the Netherlands with the Mediterranean port of Genoa in Italy through a network of motorways that cover around 1,300 km.

Cash back – The introduction of a so-called climate premium (“Klimageld”) to return the revenues from Germany’s national carbon price on transport and heating fuels to citizens will take several more years, economy minister Robert Habeck said at an event by webinar series project Europe Calling. Asked whether citizens could expect a payment before the next planned federal elections in 2025, Habeck said: “No, but a system allowing that such a transfer can be made after those elections.” The government parties had promised in their coalition agreement to introduce a premium as a mechanism to cushion the future rise in the national CO2 price for transport and heating fuels for lower-income consumers and thus increase acceptance for this climate action instrument. An annual per capita payment – the same amount for each person – would mean that people with lower and middle incomes are relieved more financially, as they statistically have a smaller CO2 footprint. However, a major hurdle is the question of how to get that payment to the population, as “the German state lacks a central interface with all citizens”. Merging information from existing systems – for example to pay out child benefits or collect income tax – is “a data protection challenge,” said Habeck, but added that the finance ministry was working on it . “As always in Germany, it is complicated and takes longer,” the minister said. (Clean Energy Wire)

AMERICAS

Going gangbusters – The US is on course to more than double its gas liquefaction capacity over the next five years, BloombergNEF reported Tuesday. With three projects slated for final investment decision this year, the country’s LNG export capacity is expected to reach 169 Mt/yr by 2027, placing it far ahead of the world’s second-largest exporter, Qatar. “The US is in the lead because of its flexible contract terms and the competitive landscape of project developers,” said Michael Yip, BloombergNEF’s global LNG specialist. Contracts with US projects made up 89% of deals in 2022.

Blinders on – North American progress towards a full decarbonisation of its energy systems is slow and “should be stepped up” if the region is going to be a net-zero role model for the rest of the world, a Siemens report from Monday said. Although North American emissions are responsible for about 15% of global emissions, the region’s emissions have dropped by 18% since 2005 compared to 24% in Europe over the same time period. Yet while North America is perceived as having recently made major progress towards energy decarbonisation, Siemens said “there is still room for improvement” – mainly, by reducing coal-fired power, which still comprises about one-fifth of North American power generation. “A number of small blind spots exist,” Siemens said. “The design of emission markets has not even begun, and sector coupling remains in the planning stage. Overall progress on many energy priorities is slow, and the pace should be stepped up so the region can act as a role model for the rest of the world.” (S&P Global)

New York’s Resolution – Wall Street banks including Bank of America, Goldman Sachs Group, and JP Morgan are being asked to set higher 2030 GHG emissions reductions standards in their investment portfolios by a resolution from New York City Comptroller Brad Lander, Reuters reported Tuesday. The Comptroller pointed to Citigroup reducing emissions from its loan portfolio by 29% by the end of the decade compared to 2020 as an example to follow.

Flying credits – Illinois state lawmakers passed legislation to give airlines a $1.50 tax credit per gallon of sustainable aviation fuel (SAF) sold to or used by an air carrier in Illinois towards domestic flights for a decade starting June 1, 2023, Argus media reported Monday. Airlines in Illinois will be able to claim SAF tax credits for up to 10 mln gal/yr (37.8 mln L/yr) dependent on the amount they spend on domestic conventional jet fuel that year. They can also combine the Illinois SAF credit with the new $1.25–$1.75/gal credit under the federal Inflation Reduction Act (IRA). Starting in June 2028, the state tax credit will only apply to SAF derived from domestic feedstocks.

Show me the money – The CEO of Cenovus Energy on Jan. 23 said friction between the federal and Alberta governments was making it difficult to hold meaningful discussions on funding CCS technology needed to decarbonise the oil and gas sector, Hart Energy reported Tuesday. Cenovus CEO Alex Pourbaix was speaking on behalf of the Pathways Alliance, a collaboration between Canada’s six largest oil sands producers targeting net-zero emissions by 2050. It is planning to develop a CCS hub in northern Alberta, expected to cost C$16.5 bln ($12.3 bln) by 2030. Of that, the group wants public money to fund 66%, or roughly C$10.9 bln, and says government support would speed up decarbonisation and help establish a competitive clean-tech industry in Canada. So far, the federal government has unveiled an investment tax credit worth C$2.6 bln over the next five years, but both Ottawa and Alberta say the other should contribute more. Alberta’s conservative Premier Danielle Smith is a vocal critic of Liberal Prime Minister Justin Trudeau and has slammed many aspects of federal climate policy, accusing Ottawa of trying to cripple the western province’s energy sector.

VOLUNTARY

Rocking all over – German-Brazilian startup InPlanet has raised €1.2 mln in a pre-seed funding round to finance its enhance rock weathering (ERW) technology for large scale CO2 removal from the atmosphere that will be focused on tropical agriculture. “In 2023, we plan to spread 50,000 t of rock powder to remove 10,000 t of CO2,” said Felix Harteneck, chief executive and co-founder at InPlanet. The company has built scientific partnerships with leading universities in agricultural research like the University of São Paulo (ESALQ), Brasilia (UNB), and Newcastle to develop effective monitoring, reporting, and verification of ERW in Brazil. The early impact investors include Carbon Removal Partners, Ubermorgen Ventures, Trellis Road, Katapult VC, and Carbon Drawdown Initiative.

SCIENCE & TECH

A win-win – British researchers have found a way to cut CO2 emissions from steelmaking — and save money too, Bloomberg reports. Steel production accounts for about 7% of the world’s carbon emissions. It’s also fiendishly difficult to decarbonise due its reliance on coking coal to turn iron ore into its raw metallic form. In a paper published in the Journal of Cleaner Production this month, scientists at the University of Birmingham in England proposed using a form of the mineral perovskite to recycle the CO2 that steelmaking blast furnaces produce. If they can make it work at a large scale, the process could drastically cut the industry’s emissions, without the need for expensive new equipment or machinery.

Recycling CO2 – Scientists at the US Department of Energy’s Pacific Northwest National Laboratory (PNNL) have designed a new system that efficiently captures CO2 and converts it into methanol for $39/t, the least costly process thus far, the laboratory reported. Converting CO2 into methanol that has many uses as a fuel, solvent, and an important ingredient in plastics, paint, construction materials, and car parts, incentivises industrial entities to capture and repurpose their carbon, the researchers noted. “We’re trying to recycle the CO2, much like we try to recycle other things like glass, aluminium, and plastics,” said David Heldebrant, who leads the PNNL research team. PNNL’s process described in the journal Advanced Energy Materials is designed to fit into coal-, gas-, or biomass-fired power plants, as well as cement kilns and steel plants.

AND FINALLY…

Wood-be sanctions – Montel reports that there is mounting evidence that Russian wood pellet exporters could be circumnavigating an EU-wide embargo on biomass imports from the country by exporting via Turkey. While exports of Russian pellets to Europe – including Denmark, Belgium, Italy, and the UK – have ground to a halt since the embargo was enacted in April last year amid Moscow’s war on Ukraine, shipments to Turkey surged while Turkish exports to EU nations rose eight-fold over the first ten months of 2022, data showed.

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