Newsletters > CP Daily: Friday January 27, 2023

CP Daily: Friday January 27, 2023

Published 01:28 on January 28, 2023  /  Last updated at 01:32 on January 28, 2023  / /  Newsletters

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

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TOP STORY

South Pole pausing offset sales from flagship REDD+ project amid baseline revalidation, media scrutiny

Carbon credit developer and intermediary South Pole will not immediately sell recent-vintage offsets from a major African REDD+ project as the firm reassesses the initiative’s emissions baseline, the company said Friday after an investigative report argued the undertaking over-credited tens of millions of GHG reductions throughout the past decade.

SHIPPING

ANALYSIS: Smaller green shipping deals bode well for global agreement

As nations squabble at the UN’s maritime agency (IMO) over a headline global climate target for shipping, governments are doing better at making smaller-scale arrangements that cut across historic rich-poor divides and are widely seen as essential for decarbonising the sector.

AMERICAS

Washington agency in lawsuit response denies free allowances uniquely harm independent power plant

Washington’s Department of Ecology (ECY) filed its response on Thursday denying allegations brought forward in a December lawsuit from an independent power producer, which requested equal protection under the law and asked for similar relief granted to local plants under the state’s recently launched cap-and-invest scheme, court documents showed.

Speculators and emitters trim CCA holdings, add to RGGI positions

Both financials and regulated entities pared back their California Carbon Allowance (CCA) positions this week, while they slightly boosted their holdings of RGGI Allowances (RGAs), according to US Commodity Futures Trading Commission (CFTC) data published Friday.

US Carbon Markets and LCFS Roundup for week ending January 27, 2023

A summary of legislative, regulatory, and policy action on carbon, clean fuel standard, and clean energy markets at the US federal and subnational levels this week, including a 100% zero-carbon power bill in Minnesota.

EMEA

EU carbon removals plan lacks sufficient safeguards for offsetting, say researchers

An EU’s proposal for a voluntary carbon removal certification scheme lacks sufficient rigour to ensure soil carbon credits are not overstating their climate benefits, according to research commissioned by the German government that recommended against using such credits for offsetting purposes.

Euro Markets: Short covering rally ends at new one-month high before falling back amid indecision

European carbon extended recent gains to reach its highest in a month on Friday, before slipping back to post a loss on the day – but a 4.9% weekly rise – as the recent short covering-driven rally came to an end and traders positioned themselves for the market’s next move.

Czech investor acquires UK gas power firm InterGen

Czech group Creditas is expanding into the UK, with the acquisition of InterGen which provides about 5% of UK power generation capacity via four gas-fired facilities.

ASIA PACIFIC

South Korea secures first government CDM deal in Uzbekistan

South Korea has signed its first government contract to buy Clean Development Mechanism (CDM) carbon credits from a landfill gas project in Uzbekistan.

Japan CCS roadmap targets 12 Mt per year of CO2 storage by 2030, 120-240 Mt annually by 2050

Japan aims to secure between 6 -12 million tonnes of CO2 storage annually by 2030, with the target acting as a benchmark to realise a longer-term goal to reach storage capacity of the greenhouse gas of between 120-240 Mt annually by 2050, according to a CCS roadmap released by the Japanese government on Thursday.

Japan extends J-Credit eligibility to include international emissions

Japanese companies looking to voluntarily offset their emissions from activities abroad will from now on be allowed to use J-Credits for the purpose, the government said on Friday.

INTERNATIONAL

Green steel firm announces $120 mln financing led by EU heavyweight

A US-based green steel firm has secured $120 million of Series C fundraising led by EU-based multinational steelmaker ArcelorMittal, it announced on Friday, with tech giant Microsoft also involved.

BIODIVERSITY (FREE TO READ)

Race is on to teach business how to navigate the biodiversity crisis

Sweden’s CircHive and UK-based NatureAlpha this week became the latest initiatives seeking to offer businesses and financials insight into their impact on nature and how to deal with it, a field that is rapidly becoming crowded.

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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

WTO get ready for the CBAM-a-lam – India is likely to raise the issue the EU’s carbon border adjustment mechanism (CBAM) in the WTO. According to the minutes of a meeting held in December and chaired by senior officials of the Department of Commerce (DoC), it was decided that the “DoC will raise the issue of CBAM in all appropriate fora of the WTO”, The Hindu’s BusinessLine reported. The EU’s levy will be implemented in 2026, with the transition period starting this year as importers in the EU will have to report the related emissions on goods brought in. Short-term measures suggested by officials include interventions in the WTO’s Committee on Trade and Environment (CTE), Committee on Market Access (CMA), Committee for Trade and Development (CTD), Council for Trade in Goods (CTG), and coordination with like-minded members for responding to the taxation. India is also exploring the possibility of having its own CBAM “based on per capita emissions or per capita cumulative (historical) emissions.” The Department of Revenue, in consultation with other departments including the DoC, has been asked to look into it. A legal representative present at the meeting identified eight sectors to be affected: iron and steel, aluminium, cement, fertiliser, electricity, hydrogen, indirect emissions, and downstream products like screws and bolts.

Sustainability standards – New climate and sustainability disclosure rules are on track for issuance by the end of this year’s second quarter, International Sustainability Standards Board (ISSB) Chair Emmanuel Faber affirmed, Reuters reported Thursday. The board plans to complete redeliberations in February, Faber said on Jan. 24. After that, the ISSB will be balloted, a process that enables standard-setters to take a final look at the draft standards one last time before they are published. Redeliberations have been based on the more than 1,000 responses that the board received on IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information, and S2, Climate-related Disclosures, which were issued in Mar. 2022 for public comment. The standards are being developed to provide a global baseline of financial reporting disclosure rules for reporting environmental, social, and governance related issues.

H across the water – Germany and Australia plan to intensify their cooperation in the areas of energy, climate protection, and emissions reduction, German economy minister Robert Habeck together with Australian education minister Bettina Stark-Watzinger and climate and energy minister Chris Bowen, said following meetings in Berlin. The two countries will put a particular focus on hydrogen and commit to supporting the establishment and expansion of a joint market. The ministers announced up to €72 mln in funding for four new joint projects under the German–Australian Hydrogen Innovation and Technology Incubator (HyGATE) initiative, including new technologies for electrolysers and a project to produce methanol with solar electricity. The governments also released a joint summary report on the German-Australian Hydrogen Feasibility Study, which said much still needs to be done to establish a renewable hydrogen supply chain. (Clean Energy Wire)

AMERICAS

Brazilian bond – Brazil plans to issue its first-ever green bond in 2023, the Treasury Secretary said on Thursday, as the country’s new leftist government tries to use its environmental agenda to attract investment. Rogerio Ceron, speaking at a news conference, said the timing and terms of the sale would be specified later this year. Ceron said the bonds must be linked to green projects, citing sustainable agriculture and energy transition as examples, and calling them a sign of the country’s commitment to the environment. In early 2021 under the government of then-President Jair Bolsonaro, the Treasury said it would build a framework for issuing an ESG sovereign bond, referring to a bond based around environmental, social, and governance criteria. (Reuters)

Mexico’s missing methane monitoring – Mexican oil and gas companies, including state giant Pemex, are lagging behind on their obligations to identify, report, and mitigate methane emissions from their installations, an investigation by a group of non-profits found, Reuters reported Wednesday. Government regulation requires oil and gas companies to identify and measure their methane emissions, and submit a so-called programme for prevention and integrated control of methane emissions to environmental regulators. Investigators at the Mexican Methane Emissions Observatory, an alliance of three non-profit organisations, found that so far only 7% of regulated entities have submitted some of the required documents.

Eying an exit? – US EPA Administrator Michael Regan is considering stepping down, according to four sources familiar with the matter, Reuters reported Thursday. Regan has been thinking seriously about departing and has been exploring options outside President Joe Biden’s (D) administration but has not made any decisions, one source said. The EPA said Regan had no plans to depart. The EPA is the main agency responsible for environmental and climate regulation. It is expected to roll out its regulatory agenda for power plants in March.

It’s over for oversight – US House Republicans on Thursday eliminated an Oversight and Accountability subcommittee focused on the environment, E&E Daily reported Friday. Chair James Comer (R) announced that the new subcommittee will instead be named “Economic Growth, Energy Policy, and Regulatory Affairs.” Under Democratic leadership, the Environment panel launched sweeping investigations into the oil industry. Now, the focus is expected to shift to scrutinising federal agencies and Biden energy policies. It’s likely Democrats will challenge Republicans on these decisions at the panel’s organisational meeting, scheduled for next Tuesday.

Ravenswood renewables – The plan to transform New York City’s Ravenswood Generating Station into a clean energy hub has taken a big step forward with its operators announcing this week that they have acquired an offshore wind site to deliver power to the plant. Rise Light & Power officials said that the offshore site would deliver more than 1,000 MW of power to the plant, with the RGGI-regulated Ravenswood station currently generating around 1,800 MW, mostly powered by gas. The transition would form part of Rise Light & Power’s overall plan to retire its existing four generators and turn the site into a renewable energy hub. The company plans to generate power through clean energy sources, including offshore wind, wind from upstate New York, and solar power. (licpost)

Farm carve-out – A private member’s bill that would exempt certain agricultural activities from the federal carbon price is heading back to the Canadian House of Commons with a few changes. The bill would amend the federal Greenhouse Gas Pollution Pricing Act to add natural gas and propane used to dry grain and heat livestock barns to the list of farm fuels — including gasoline and diesel — already exempt from the federal price on pollution. The Standing Committee on Agriculture and Agri-Food finished its study of Bill C-234 in November, and it is expected to pass a vote in the House despite the Liberal Party’s opposition. Over five committee meetings, NDP agriculture and food critic MacGregor and Conservative MPs made the case for the fuel exemption because farmers don’t have other commercially viable fuel options, particularly for grain dryers. Liberal MP and committee member Ryan Turnbull says the bill will disincentivise investment in developing alternative technology because it removes the carbon price from the equation. (National Observer)

EMEA

The government’s volt – The UK’s battery manufacturing industry is doomed unless the government ramps up support for the sector, according to the founder of failed battery startup Britshvolt, Bloomberg reports. Formerly the UK’s main hope for a homegrown supplier to the electric-vehicle industry, Britishvolt went into bankruptcy this month. The company could have been saved had the government given it only a third of the £100 mln  pledged by former Prime Minister Boris Johnson, said Orral Nadjari, who stepped down as CEO in August yet remained the company’s biggest shareholder. Support pledged didn’t materialise however, and private financing dried up, forcing Britishvolt to go into administration. The lack of clear ambition combined with the willingness to let the firm go under shows a lack of commitment to the sector, according to Nadjari.

Legislating into the wind – To receive currently blocked EU recovery funds, Poland must work on implementing so-called milestones, including liberalising wind energy law, EurActiv reports. The law currently prohibits the construction of wind turbines according to the so-called 10H rule, which was adopted due to the noise operating wind turbines generates. In other words, turbines cannot be set up within a radius of 10 turbines from residential buildings and nature conservation parks such as reserves. The same 10H rule applies to the construction of residential buildings. But because respecting such a provision requires having a great deal of land, developing renewables in fossil-fuel-reliant Poland has proven difficult. In its first attempt to amend the law, the government proposed to set a minimum distance of 500 metres between turbines and residential homes, so that the 10H rule only applies to national parks. Following an amendment tabled by a lawmaker who chairs the parliamentary energy committee the minimum distance was increased to 700 metres – a proposal politicians and experts agree will further limit investment opportunities for wind power plants in Poland.

Re-badging green funds – A wave of asset managers have re-badged green funds amid unclarity over what constitutes ‘sustainable investment’, reports Reuters. A total of €175 bln of assets from the EU’s highest sustainability classification have been downgraded in the fourth quarter. The EU’s Sustainable Finance Disclosure Regulation (SFDR), which aims to tackle misleading claims from managers over their sustainability efforts, is gradually being rolled out and from January required more detailed information to back them up. Ahead of that, European Supervisory Authorities (ESAs) had sought to clarify how to apply elements of the regulation. Yet many managers said questions remained, particularly around what qualified as a ‘sustainable investment’. As a result, many opted to reclassify their funds as ‘Article 8’, which carries with it less onerous reporting requirements, from the highest level, Article 9. Overall, 419 products saw their status change in the fourth quarter, of which 307 were cut from Article 9 to Article 8, some 40% of the ‘dark green’.

Total nightmare – The Nanterre public prosecution office in France started investigations against oil and gas giant TotalEnergies in Dec. 2021 for allegedly misleading commercial practice, investigative media Mediapart revealed on Thursday. The French multinational has been under fire from environmental NGOs for years, but this is the first time it faces formal prosecution regarding “greenwashing” practices, Mediapart found. The investigation followed a complaint environmental NGOs Wild Legal, Sea Shepherd France, and Darwin Climax Coalitions filed in October 2020 that claims the oil giant is directly responsible for significant air pollution and “environmental lies”. In the spring of 2022, the same NGOs lodged another complaint for practices of so-called “ecocide” – a recent addition to French law that refers to deliberate and intentional environmental damage. The courts have not yet said whether formal investigations would be launched on the grounds of this second complaint. Another group of NGOs filed a lawsuit against TotalEnergies in Jan. 2020, asking that it be “ordered to take all necessary measures to drastically reduce greenhouse gas emissions”, with the municipalities of New York City and Paris joining the call for litigation in September of last year. (Euractiv)

ASIA PACIFIC

Don’t give up the hype – Iron ore billionaire and green energy investor Andrew Forrest says he expects his Fortescue Metals Group to seal five big green energy deals in 2023, and expects its newly acquired battery technology business to turn into a multi billion dollar prospect, with manufacturing to start in a few months, Reneweconomy reports. Forrest made the predictions at the company’s quarterly production report, and despite confirmation of news – first flagged by RenewEconomy in November – that the company had lost its planned technology partner for the much hyped electrolyser manufacturing facility in Gladstone. The US-based Plug Power said it had withdrawn because the project no longer made economic sense. Forrest insisted on Friday that the project will open this year with FFI’s “own world leading technology” and at the scale predicted. Forrest says the company expects to reach a final investment decision this year on five green energy projects under the auspices of Fortescue Future Industries, with first production due in 2024. These include the Gibson Island green hydrogen project in Queensland, but the others are likely to be located in the US, or Europe. Meanwhile, Germany and Australia are boosting research into renewable hydrogen production with around A$110 million combined conditional funding for four joint projects, the Australian Renewable Energy Agency’s Arenawire reports. The agreement brings together Australian and German industry and research partners to deliver new projects, primarily based in Australia.

Greener shipping – Sister companies Mitsui O.S.K. Lines (MOL) and Mitsui announced that they have received Approval in Principle (AiP) from Japanese classification group ClassNK for the design of a large ammonia-powered bulk carrier, according to a MOL press release. MOL and Mitsui jointly determined the size and specifications of the vessel, and both companies entrusted Mitsubishi Shipbuilding for design of the vessel. The AiP covers a “210,000 DWT Cape size” bulker, a highly versatile class of ship. The design calls for a main engine fueled by ammonia, which emits no CO2 when burned, thereby achieving zero CO2 emissions during the voyage. The vessel will also feature two ammonia fuel tanks on deck to maximise the cruising range for various routes and to make the most effective use of cargo space. MOL also announced that it had joined the Shipping Sector of the First Movers Coalition (FMC) during this year’s World Economic Forum in Davos. MOL was the first Japanese company to joint the FMC in May 2022, and has now joined the shipping arm, pledging a “commitment to decarbonise shipping by proactively introducing clean alternative fuels with our partners to build a more resilient and cleaner supply chain as a leader in the industry.”

VOLUNTARY

Second hand market – CheckSammy, a recycling hauler based in Canada’s pacific province of British Columbia, is launching a carbon offset marketplace for businesses to invest in sustainability initiatives, it announced in a press release on Thursday. The CheckSammy Carbon Offset Marketplace is being launched in partnership with offset developer South Pole, and will feature biodiversity and nature-based solutions.

SCIENCE & TECH

Dire degradation – New research warns that human activity and drought may have degraded more than a third of the Amazon rainforest – “double the previous estimate”, reports the Guardian, which says the work “heightens concerns that the globally important ecosystem is slipping towards a point of no return”. The review study, published in Science, says that fires, land conversion, logging, and water shortages have weakened the resilience of up to 2.5 mln sq km of the forest, an area 10 times the size of the UK, the paper says. This has left the area “drier, more flammable and more vulnerable than before, prompting the authors to warn of ‘megafires’ in the future”. The paper continues: “Between 5.5% and 38% of what is left of the world’s biggest tropical forest is also less able to regulate the climate, generate rainfall, store carbon, provide a habitat to other species, offer a livelihood to local people, and sustain itself as a viable ecosystem, the paper observes. This degradation is on top of the 17% of the original forest that has been completely cleared over the past half century.” (Carbon Brief)

AND FINALLY…

Raise a glass – Before you enjoy a drink this weekend, take a moment to consider the carbon footprint of what you’re imbibing. According to 8billiontrees.com, wine and its production emit nearly three times as much CO2e as beer (2.16 kg per litre for vino compared to 0.81 kg/L for a brewski). Winemaking emits more CO2 if the vineyard uses fertilisers or the soil is tilled. The vines themselves should absorb some of the CO2, but the fermentation process and the energy-intensive production of the glass bottles more than offsets that. “Even the introduction of screw caps over the last decade to replace corks amplifies the carbon impact of your favourite bottle of wine,” 8billiontrees adds, also pointing out the vast quantities of water used to grow the grapes. “Packaging is the worst CO2 offender, though, in the wine industry, with the bottle itself accounting for over 60% of the carbon footprint of wine … Consider that every year in the US nearly 4 billion bottles are produced just for the wine industry alone, creating a carbon footprint for wine of more than 5 bln kgs of CO2.” For beer, the brewing process alone generates in excess of 0.25 kg of CO2/L, with the remainder of the climactic impact derived from the bottles, the bottling process, and GHGs from transportation. Even cocktails were found to be not as bad as wine for the atmosphere. Staple bar beverages including the Mojito (230g CO2e per drink), the Long Island Iced Tea (318g), and the Cosmopolitan (366g) were seen as going easy on the climate. “Certain tropical drinks have ingredients comprised of more fresh fruits than others, sourced unfortunately from very far away tropical countries. The simple addition of those ingredients to a cocktail will increase the carbon footprint just from the logistics alone.” In terms of the hard stuff, rum had the largest footprint of the lot at 3.5 kg of CO2e/L, followed by 3.0-3.3 kg for brandy, tequila, bourbon, cognac, and sake. Whiskey, vodka, and gin came in lower.

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