Newsletters > CP Daily: Monday February 13, 2023

CP Daily: Monday February 13, 2023

Published 03:03 on February 14, 2023  /  Last updated at 03:25 on February 14, 2023  / /  Newsletters

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

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TOP STORIES

Verra suspends account of PNG developer ahead of new investigation

Verra has suspended the registry account of the developer of a REDD+ project in Papua New Guinea and will conduct a review in light of previous civil charges laid against the developer’s chief executive, the certifier said on Monday following an investigation by Australian broadcaster ABC.

PNG’s Climate Change Development Authority raided by country’s anti-corruption police

The national authority in charge of Papua New Guinea’s carbon market regulations was raided by the country’s fraud squad on Friday, sparking concerns that its work to create a regulatory framework for the market could be impacted.

ASIA PACIFIC

EKI shares crash in India as offset project developer sees profits drop, accounting practices flagged by auditors

The shares of EKI Energy Services crashed on India’s BSE stock exchange Monday after the project developer reported a sharp drop in profits and its auditors flagged issues with how it recognised customer revenues.

Crucial senator quizzes Australian government on ACCU use in Safeguard Mechanism

A key Australian senator has urged the government to publicly release the carbon estimation areas of crediting projects, as a Climate Analytics report questioned the efficacy of land-based offsets in the Safeguard Mechanism.

Think-tank files consumer law complaint against Australian carbon neutral programme

A think-tank on Tuesday filed a complaint to Australia’s consumer protection authority, arguing that the government’s Climate Active scheme, which certifies ‘carbon neutral’ companies, activities, and products, may be misleading or deceptive.

Emissions from Australia’s NT shale gas can be largely offset domestically in most cases, report says

GHG emissions from future onshore shale gas production in Australia’s Northern Territory (NT) could largely be offset with the use of carbon credits within Australia and use of domestic mitigation technologies, in most cases, although a high production scenario would require the use of international offsets as well, according to a government scientific agency.

EMEA

ANALYSIS: UKA premium evaporates as demand to swap EUAs dries up and market nears balance

The premium for UK Allowance prices over EUAs has evaporated after rising to over €32 in mid-2022, as UK emitters are thought to have largely finished replacing forward hedges in European permits with the British equivalent and the impact of a deeper recession begins to be felt.

Euro Markets: EUAs drift in light trade as market awaits Parliamentary vote on additional EUA auction volumes

EUA prices dropped away on Monday on light volume as traders awaited Tuesday’s European Parliament vote on the REPowerEU initiative, and amid a wider energy market sell-off as recovering gas supply and forecasts for milder weather were expected to depress fuel and power prices.

EU lawmakers full of praise for REPowerEU ahead of endorsement vote

Members of the European Parliament mostly spoke well of the REPowerEU initiative to speed the bloc’s exit from Russian fossil fuels in a debate on Monday, teeing up a vote to approve legislation a day later.

With investors waiting, Brussels sets out rules to define renewable hydrogen

The European Commission on Monday adopted rules seeking to define what constitutes renewable hydrogen as part of a fast-track lawmaking process.

DRC submits high level carbon tax proposal and seeks to establish markets regulator

A senior politician in the forest-rich Democratic Republic of Congo (DRC) has submitted a proposal to introduce a domestic carbon tax, establish an authority to govern market involvement, and push forward on the implementation of the country’s nationally determined contributions (NDC), as the African nation seeks maximise revenues from its natural resources.

Ethiopia signs $40 mln carbon deal with World Bank for sustainable forestry management

Ethiopia has signed a $40 million agreement with the World Bank to access funds from a sustainable forestry programme to reduce emissions by tackling deforestation and land degradation, the multilateral development bank announced.

London-based brokerage loses appeal, must pay compensation in EU carbon trading fraud case

A London-based brokerage has lost its appeal against a British court ruling ordering it to pay nearly £10 million in compensation to liquidators for its involvement in an EU carbon trading fraud scheme.

VOLUNTARY

VCM Report: REDD+ prices claw back ground, but large gap remains between standard and OTC credits

REDD+ avoided deforestation offsets ticked higher over the past week as the market looked to shrug off the recent negative press about widespread over-crediting in the voluntary carbon market, although the end of the week saw another project thrust negatively into the media spotlight.

Lufthansa introduces green fare for customers to fully offset flights

German carrier Lufthansa will begin offering more expensive flights to customers with their emissions fully offset via a combination of a majority of carbon credits plus some sustainable aviation fuel (SAF), it announced Monday.

Indigenous-led technical committee to inform jurisdictional REDD+ co-benefits certification

A jurisdictional REDD+ programme on Monday announced the formation of a technical committee led by four Indigenous and local community organisations from Latin America and Africa, which will help develop an optional certification for some of the non-carbon benefits of forests.

Ratings firm downgrades scores in sweep of water projects

A carbon credit ratings agency has downgraded its scores for three Gold Standard-certified water purification projects in Africa as part of a review into the activity.

Project developer launches new climate data analytics unit

A European-based project developer has launched a climate data analytics unit to help organisations decarbonise, also appointing a head of the new branch.

AMERICAS

RGGI Market: RGA prices retreat amidst warmer Northeast temperatures

RGGI Allowance (RGA) prices retreated over the last five days as warmer weather descended across the region, with a few notably low volume days recorded on ICE.

Former Washington state senator nets $14 mln to launch climate investment firm

A recently retired Washington State Senator has teamed up with an investment executive and a climate strategy advisor and raised $14 million to launch a Seattle-based company to help corporations decarbonise.

INTERNATIONAL

Major corporates claiming climate leadership are found wanting -report

Some of the world’s largest corporations are failing the climate credibility test, an analysis published on Monday found, pointing to shortcoming related to dubious “net zero” claims, marginal progress towards decarbonisation, erroneous use of carbon offsets, and a lack of transparency across companies such as Amazon, Walmart, PepsiCo, and Nestle.

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CONFERENCES

North American Carbon World (NACW) 2023 – Mar. 21-23, Anaheim: For 20 years, the NACW conference has been the place for carbon professionals working in North American carbon markets and climate policy to learn, collaborate, and network. Taking place Mar. 21-23 in Anaheim, California, NACW 2023 will dive into new policies and developments that will shape and scale carbon markets and climate solutions with integrity, ambition, and equity. Register now to gain actionable insights for bold climate solutions and participate in premier networking opportunities with an active and engaged audience to strengthen your organization’s strategy for navigating the carbon landscape.

European Climate Summit (ECS 2023) – Mar. 28-30, Lisbon: Registration for the 5th edition of the European Climate Summit organised by IETA and partners is open. The ECS brings together leading private sector experts and policymakers from both the carbon and energy world, to analyse and discuss the current developments and pressing challenges. The summit provides a discussion and networking forum for policymakers, business leaders, and innovators involved in building, scaling, and collaborating on markets for net zero. The event will feature high-level plenaries, cross-cutting deep dives, interactive side events, and quality networking opportunities. Registration here.

ANNOUNCEMENT

Call for Expression of Interest to join the Climate Action Data Trust User Forum. Climate Action Data Trust has launched a Call for Expression of Interest to join the CAD Trust User Forum. The Initiative is looking for a variety of stakeholders across the carbon market value chain, from both the public and private sector. The purpose of the User Forum is to act as a market sounding board for the Council and the Technical Committee on business, policy, and technical matters. CAD Trust is a decentralised meta data platform that links, aggregates and harmonises all major carbon registry data to enhance transparent accounting in line with Article 6 of the Paris Agreement. Deadline for applications extended to Feb. 28, 2023.

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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

EMEA

Footing the bill – Since the start of the energy crisis in Sep. 2021, €792 bln has been allocated and earmarked across European countries to shield consumers from the rising energy costs, not including measures at the sub-national and supra-national levels, according to data from think tank Bruegel. Of the total, €681 bln was in the EU, of which €268 bln has been earmarked by Germany alone, while €103 bln in the UK, and €8.1 bln in Norway.

Don’t get distracted – A group of seven EU countries has called on the European Commission to keep its upcoming reform of the electricity market “targeted” and focused on measures that will enable the green transition while ensuring affordable energy for consumers. Electricity prices skyrocketed across Europe last year as Moscow turned off the gas tap in retaliation for EU sanctions imposed against Russia over its military aggression in Ukraine. Pressed by EU governments to address this, the European Commission is currently preparing a review of EU electricity market rules, arguing that EU power markets need to be adapted to the “new realities of dominant renewables” and higher gas prices. Spain and France were among the countries calling for a root-and-branch review of electricity market rules, but not all EU countries share this view. In a joint letter, published on Monday, Germany, Denmark, Estonia, Finland, Luxembourg, Latvia and the Netherlands called for a cautious approach that preserves the current market setup. (Euractiv)

It’s hy time they figured this out – The European Commission has tabled long-awaited rules defining the circumstances under which hydrogen can be labelled as coming from “renewable” energy sources. Last minute, Paris also won recognition for low-carbon hydrogen produced from nuclear electricity. As Europe turns to hydrogen, there are fears that electrolysers producing the gaseous fuel will drive up demand for power and cannibalise renewable electricity intended for other uses. To prevent this, the Commission has been working on a set of rules to ensure green hydrogen uses only “additional” sources of renewable electricity. After more than a year of delay due to intense lobbying from Paris and Berlin, the EU executive finally adopted those rules on Friday evening, according to documents obtained by Euractiv. To ensure green hydrogen is made only from “additional” renewable power, the Commission sought to correlate its production in time and space. According to this principle, a Spanish hydrogen producer, for instance, would be unable to claim hydrogen as renewable if the electricity used came from Sweden. How closely the two would have to be correlated – hourly or quarterly, 50 kilometres apart or from a neighbouring country – have since been subject of intense debate, with industry pushing for looser rules and green campaigners insisting on a close correlation to avoid cannibalisation. After months of hesitation, the Commission finally took a decision and set out two important criteria:

  • By 2030, hydrogen production must be matched to renewable energy production on an hourly basis. Until then, the correlation is set on a monthly basis.
  • By 2028, hydrogen producers must prove that their electrolysers are connected to renewable energy installations no older than 36 months.

The Commission expects the time and space correlation criteria to become irrelevant once 90% of electricity production in a given country comes from renewable sources. This is where France scored a major victory. For months, French politicians have lobbied Brussels to hammer the point that green hydrogen should also come from low-carbon nuclear electricity, not just renewables. That risk now appears to be eliminated, as under the rules adopted Friday, countries with a low-carbon electricity mix will be exempt from the additionality rule provided they invest in new renewable energy generation capacity for “an amount that is at least equivalent to the amount of electricity that is claimed as fully renewable”. To demonstrate this, hydrogen producers will have to produce power purchase agreements (PPAs), which allow buyers to purchase renewable energy at a predictable price while helping generators secure financing for their projects. The exemption will apply if the average carbon intensity of the electricity used for hydrogen production “is located in a bidding zone where the emission intensity of electricity is lower than 18 gCO2eq/MJ,” according to the Commission’s proposal. This means the exception will apply as long as a country’s electricity production emits less than 65 grammes of CO2 equivalent per kilowatt hour, Euractiv understands. And among all 27 EU countries, only nuclear-reliant France and hydro-rich Sweden meet this criteria.

French wind – A floating offshore wind farm off the coast of southern Brittany, in France, will get €2.08 bln as state aid. The EU Commission authorised the measure on Monday, with France’s energy and environmental objectives and the EU green deal in mind. The wind farm will be the first commercial project of this type in France. It should have a capacity of 230 to 270 MW and produce 1 TWh of renewable electricity per year for a period of 35 years. The aid will be granted in the form of a variable monthly bonus.

Bus barney – Europe’s biggest low-cost airline Ryanair has blasted the Irish government’s use of EU ETS revenue to shore up unprofitable school bus routes and with no transparency over how the rest of the money was spent. The government put 76% of an estimated €485 mln towards Bus Eireann, which the Dublin-based carrier said – via letter to the government – was a “scandal” given that the bus company’s fleet was “extremely emission intensive”. It lambasted the government over its explanation of where the other 24% in funding went after being told it had gone on “climate finance”. The government said did not accept the assertions and said Ireland was “fully complaint” with its requirements. It said funding the school transport scheme was an eligible category for expenditure, and that it provided critical transport for almost 120,000 students, including 16,000 with special education needs, that would otherwise require more emissions intensive private transport. The airline said Ireland should be reinvesting some of the funds in air travel that would help reduce fuel consumption, CO2 emissions and noise. (Irish Times)

AMERICAS

Biden for Brazil – US President Joe Biden on Friday promised to “work with Congress” to fund the protection of the Amazon rainforest, after meeting with Brazil’s new president Lula da Silva. The Amazon Fund is a pot of money administered by the Brazilian Development Bank which is spent on forest protection projects like small-scale farming and management of forests by indigenous people. The $1.2 bln fund was suspended under former President Jair Bolsonaro but revived on Lula’s first day in office in January. The US has never financially backed it before. (Climate Home)

Pesky permits – The US EPA is moving too slowly to allow states to permit and oversee carbon-reduction projects, according to Louisiana’s governor, slowing millions of dollars in investments designed to tackle greenhouse gas reduction, Offshore Engineer reported Monday. Louisiana and other top oil-producing states say they can speed up permitting of CCS projects if allowed to handle decisions that currently fall under the EPA. There are dozens of these projects with multi-million dollar price tags proposed by energy firms around the US. Developers would benefit from broadening permitting of so-called Class VI CCS wells to states, Louisiana Governor John Bel Edwards (D) said in a letter last month to EPA Administrator Michael Regan seen by Reuters. The process has lacked clarity and a clear timeline, Edwards wrote.

Base (crediting) is the place – California regulator ARB on Monday posted an update to the Low Carbon Fuel Standard methodology document that summarises and describes the calculation of base credits for non-metered electric vehicle charging. Public feedback on the document is due by Mar. 15.

Nova emitter – The Canadian Maritime province of Nova Scotia added a third emitter to its short list of compliance entities under its output-based pricing system (OBPS), following a provincial government order Friday. The Kameron Coal Donkin mine joins Lafarge Cement and Nova Scotia Power as compliance entities that emit over 50,000 tonnes of CO2 annually, forcing their participation in the pricing system. Environment Minister Tim Halman called the Donkin coal mine the second-largest polluter in the province. Nova Scotia replaced its cap-and-trade system with the OBPS on Jan. 1 of this year, and a federal fuel carbon pricing system will come into effect in the province on July 1. (CBC)

Alberta protocol update – The Alberta Ministry of Environment and Protected Areas on Monday released a draft carbon offset protocol for Agriculture Nitrous Oxide Emission Reductions under the province’s Technology Innovation and Emissions Reduction (TIER) regime. Version 2.1 of the protocol includes an updated quantification methodology and EcoDistrict related emission and leaching factors as per the approach used in Canada’s 2022 National Inventory report, among other technical and clarifying changes. The public comment period closes Mar. 6.

VOLUNTARY

Last hurrah? – US-based carrier Delta Air Lines purchased and retired $116 mln of carbon offsets for full-year 2021 and Q1 2022 emissions last year, the company said in a Securities and Exchange Commission (SEC) 10-K filing Friday. While this was an increase of $21 mln compared to its VER purchases reported in its 2021 10-K, it differs from Delta’s $137 mln spend on carbon offsets for its 2021 emissions detailed in last year’s ESG report. Reiterating previous guidance, Delta added “substantially all” of its investments towards hitting its long-term carbon neutrality goal will go towards climate solutions other than VERs.

Removal standards – A group of 35 organisations representing carbon removal buyers, suppliers, verifiers, non-profits, and academics organised by Stripe, Lowercarbon Capital, Isometric, and CarbonPlan have called for the creation of an independent standards initiative for approving carbon dioxide removal (CDR) protocols, CarbonPlan noted in a blog post on Friday. The group expect the initiative to provide reference points to ensure that claimed permanent removals were consistently and rigorously quantified and were aligned with relevant system boundaries. In order to avoid conflict of interest, the letter specified that funding for the proposed standards initiative “should not involve issuing or selling of carbon credits”. The group welcomed parties interested in joining the initiative to add their signature to the open letter. Questions or request for information are to be directed to hello@carbonplan.org.

Vaulting over tech hurdles – Climate Vault, a non-profit that reduces and removes carbon emissions, on Monday announced that it launched its first RFP of 2023 to identify, assess, and award funds to emerging carbon dioxide removal (CDR) technologies. Climate Vault’s grant funding seeks to stimulate the growth and development of innovative CDR technologies that are helping make net negative emissions possible. CDR projects aim to remove historical carbon emissions from the atmosphere and safely store the carbon long-term so that it cannot continue exacerbating the climate crisis. Many innovative carbon removal technologies are currently in development and show promise for massive environmental upside. A recent study by the State of CDR, however, has found that while the bulk of CDR deployment is anticipated to occur in the second half of the century, this will only be possible if there is substantial development of novel CDR solutions within the next ten years.

Banking on carbon – Climate tech innovators Cloverly and ecolytiq announced on Monday that they are partnering to equip financial institutions with the ability to offer high-quality and verified carbon credits. According to the announcement, the partnership defines a new standard in banking by mainstreaming climate action, making it scalable, and accessible. Growing demand for measurable and effective climate action elevates the value in embedded solutions for consumers and businesses around the world. Carbon credits represent a critical tool in the fight against climate change, providing companies with the ability to generate near-term impact while also addressing complex, systemic challenges in the long run. Together, ecolytiq and Cloverly help banks increase their participation in the carbon removal ecosystem by offering new digital-first products that make climate action engaging and accessible. The carbon credits will be an add-on to ecolytiq’s marketplace for climate positive contributions and primarily used for commercial and business banking solutions.

New president – Verra has appointed Judith Simon as its new president during a critical time for the standards body after methodologies for REDD+ avoided deforestation have come under scrutiny for massively failing to deliver carbon savings. Prior to joining Verra, Simon drove enterprise-level transformative efforts at large companies such as Zillow, Redfin, CarMax, and more. Verra is embarking on a major effort to improve its operations, from streamlining the certification process, embracing technology, and ensuring a high degree of professionalism across all operations. Simon will report to Verra chief executive David Antonioli and oversee all elements of Verra’s internal operations.

ASIA PACIFIC

Vast sum — The Australian Renewable Energy Agency has committed A$65 mln ($45 mln) in funding to Vast Solar to construct a first-of-its-kind 30 MW/288 MWh  concentrated solar power plant in Port August, South Australia. The agency announced the funding was conditional upon the VS1 project reached financial close, slated for later this year, and is expected to be operational in 2025. The A$203 mln project aims to demonstrate the technical and operational performance of the company’s modular concentrated solar power  (CSP) at utility scale to unlock further investment in future projects. CSP uses mirrors to concentrate and capture heat from the sun in solar receivers, with high temperature heat transferred via sodium and stored in molten salt. The stored heat can then be used to heat water to create steam to power a turbine and produce electricity, or the heat can also be used directly to decarbonise some industrial processes, according to ARENA. One of the benefits of CSP is that the captured heat can be stored cost-effectively for long periods with little loss of energy. ARENA CEO Darren Miller said the expansion of Vast Solar’s technology into a commercial scale project shows that CSP technology could play an important role in generating and storing renewable energy at scale.

Stop logging, make money – Stopping native logging in the Australian state of NSW could create A$100 mln in climate-related benefits annually, according to RenewEconomy, compared to the A$9 mln the industry cost taxpayers in 2022. Emissions of 3.6 Mt from native logging in the state are equivalent to that produced by 840,000 internal combustion cars, writes Dr Jen Sanger in her latest report ‘NSW Forest Carbon’ for The Tree Project. The report is part of a series that Sanger began publishing in June last year, covering Tasmania, Victoria, and NSW looking at what native logged trees are actually used for and that impact on carbon emissions. She found that in NSW sequestering carbon in native trees rather than logging them could yield as much as $2.7 bln in carbon mitigation benefits between 2023 and 2050. In Victoria that financial benefit comes to A$3.1 bln and in Tasmania it’s A$2.6 bln, for a combined $8.4 bln across the three states.

Fresh money – SinoCarbon Innovation & Investment Co Ltd, a Beijing-based advisory firm, has raised an undisclosed amount in a Series A funding round led by a strategic fund owned by the government of Shangdong province and power group China General Nuclear Power Corporation, it said in a statement issued Monday. SinoCarbon has provided environmental-related consulting services to more than 180 local governments and 3,000 corporate clients, including CHN Energy and China Huaneng Group, according to the company’s website.

SCIENCE & TECH

Algae is not the solution – After advertising its efforts to produce environmentally friendly fuels from algae for over a decade, Exxon Mobil is now quietly walking away from its most heavily publicised climate solution, Bloomberg reports. Exxon has slashed its support for Viridos, a biotech company based in La Jolla, California, that operated as the oil giant’s key technical partner since it began its algae push in 2009. With Exxon funding drying up and difficulty finding other backers, the biotech firm laid off 60% of its staff on Dec. 27, according to Viridos executives. The biotech company said it is still moving forward with algae research.

Algae is the solution – Malaysia’s national oil company, Petronas, and the Sarawak Economic Development Corporation (SEDC) have entered into a joint development agreement for microalgae oil production, Digital News Asia reports. The agreement is specifically for the development of algae production technology and will be undertaken by Petronas Research, a Petronas subsidiary; and SEDC Energy, a subsidiary of SEDC.

AND FINALLY…

Blades of glory – Wind turbines face an unsustainable dilemma: after decades of producing renewable energy, their seemingly indestructible blades often end up in garbage dumps, left to remain for years. Now, Denmark’s Vestas Wind Systems, the world’s largest producer of wind turbines, says it has developed a chemical solution that allows the blades – made with durable epoxy resin – to be broken down and recycled. Vestas’s process is the result of joint initiative including Denmark’s Aarhus University and US-based Olin. The company now plans to move it from the lab to a pilot project for two years, before rolling it out on a commercial scale. Its cost hasn’t been disclosed. (Bloomberg)

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