Newsletters > CP Daily: Monday February 20, 2023

CP Daily: Monday February 20, 2023

Published 02:13 on February 21, 2023  /  Last updated at 02:26 on February 21, 2023  / /  Newsletters

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

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TOP STORIES

Euro Markets: EUAs jump to new record but fail to breach key level

European carbon set a new record high on Monday as participants continued to eye a run at the €100 barrier amid a combination of supportive fundamentals and speculative trading, while energy prices reversed Friday’s losses amid bullish weather forecasts.

ANALYSIS: EU ETS ignoring politicians’ views on preferred price as fundamentals seen holding strong

European political discourse around recently-agreed EU carbon market reforms has seen some lawmakers stating clear opinions on their preferred price levels, but traders seem to have different ideas, ignoring those views in the short term as levels hit fresh records.

ASIA PACIFIC

FEATURE: Australia grapples with how best to decarbonise its suburbs

A trial to electrify communities in New South Wales has led to renewed calls by some for Australia to commit to cutting emissions by replacing fossil-fuel based home appliances and vehicles, rather than turning to hydrogen or biogas, which they deem costly and inefficient.

India publishes list of eligible Article 6.2 activities

Green hydrogen, sustainable aviation fuel, and CCUS are among 13 activity types that India has said will be eligible to generate credits that can be sold abroad under Article 6.2 of the Paris Agreement.

South Korea to conduct study on 4th basic plan for ETS

South Korea has issued a tender for assistance to develop the 4th basic plan for its domestic emissions trading scheme (ETS), which will incorporate the country’s updated climate goals for 2030, expected to significantly increase the ambition of the scheme.

Australian heavy industry can decarbonise in line with 1.5C with over A$600 bln investment by 2050 -report

Heavy industries in Australia can cut their emissions by as much as 92% by 2050 in an ambitious decarbonisation scenario outlined in a report from an industry-led study group released in Sydney on Monday.

Major Chinese papermaker eyes 1 mln carbon credits trade a year on Beijing exchange

A Shanghai-listed forestry and paper company has signed a strategic cooperation agreement with China Beijing Green Exchange to explore the potential of forest carbon sinks, as part of its plan to further tap into the domestic voluntary market

US venture firm acquires stake in Australian-based carbon finance business

A US-based venture capitalist group has acquired a stake in an Australian carbon finance organisation to ramp up its data and analytics offerings.

VOLUNTARY

INTERVIEW: Verra boss vows to keep open mind for credit standard’s extensive revamp

Upcoming changes to the world’s largest voluntary carbon crediting programme promise to look broader and deeper than simple tweaks to methodologies, according to the organisation’s CEO David Antonioli, pointing to past trends that have seen more fundamental shifts in the standard.

VCM Report: Standardardised nature-based contracts remain under pressure

The gulf between standardised nature-based contracts and newer vintages in the REDD+ avoided deforestation market remained very wide over the past week, while prices for standard CORSIA-eligible credits dropped lower.

Academics team up with tech experts on nature carbon credit assessment tool

UK academics have joined with remote sensing and blockchain specialists to develop an assessment tool that aims to compare nature-based carbon credit projects on a like-for-like basis with any other offset project type.

EMEA

Germany could cancel up to 14 mln EUAs from 2024 auctions -analysts

Germany could cancel up to 14 million EU ETS allowances from the country’s auctions next year,  according to analysts, after a government ministry reportedly said it was in favour of removing the permits from the market to counterbalance the impact of its coal plant closures.

EU climate ambitions undermined by imported methane emissions -report

The EU’s aim to reduce greenhouse gas emissions by at least 55% by 2030 is being undermined by methane emissions associated with fossil fuel imports, according to researchers in a report published on Tuesday.

Malawi eyes sale of 5 mln carbon units per year -media

The president of Malawi has said that he wants the country to produce 5 million carbon credits per year to generate as much as $100 million and boost employment in the African nation, domestic media reported Monday.

AMERICAS

RGGI Market: RGAs shrug off New Jersey clean power goal, while Chinese oil major opens account

RGGI Allowance (RGA) price volatility evaporated this week as market participants dismissed the near-term impacts of New Jersey accelerating its 100% clean electricity target, while a state-owned Chinese oil company opened a speculative account in the power sector carbon market.

INTERNATIONAL

EU foreign ministers fail to unite over fossil fuel phaseout

EU foreign ministers on Monday failed to unanimously agree on a call to push for a global phaseout of fossil fuels, though officials promised a fresh approach on the bloc’s climate diplomacy.

BIODIVERSITY (FREE TO READ)

Global initiative launched to restore 1 mln hectares of kelp forests by 2040

A first global initiative has been launched by marine ecologists in Australia that sets an ambitious target of restoring 1 million hectares of kelp forests by 2040, aiming to reverse the climate change-induced decline of the ecologically valuable seaweed species, it was announced on Sunday.

ICYM

Carbon credit investor pursues offtake from “largest” forest project in Western Hemisphere

A US-based carbon offset investor and consultancy this week advanced a strategic partnership that could see the firm eventually acquire tens of millions of offsets from a proposed Canadian improved forest management project, which it claims will be the largest in the Western Hemisphere.

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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

INTERNATIONAL

Belt-tightening – The head of the IEA, Fatih Birol, has warned of possible energy shortages next winter as relatively little new LNG is coming to the market while China’s consumption is set to rise this year. European governments made many correct decisions over the last year to ensure energy supply, such as building more LNG terminals to replace pipeline deliveries of Russian gas, Birol told Reuters on the sidelines of the annual Munich Security Conference over the weekend. But they also got lucky, he added, with a mild winter dampening demand while economic weakness in China led to the first drop in consumption there for 40 years.

He’s off – Zaheer Fakir, South Africa’s chief climate finance negotiator for climate talks, has resigned to take up a new role as senior adviser to United Arab Emirates’ COP28 team ahead of the annual talks there in December, the Daily Maverick reports, adding that this will now be a vital position to fill as South Africa negotiates for finance to de-carbonise a faltering economy that is dangerously dependent on coal and Eskom. Fakir is a veteran climate diplomat, having served on the board of the Green Climate Fund and having facilitated the development of South Africa’s Climate Investment Fund Accelerated Coal Transition Investment Plan approved in 2022. He is also the chair of the UNFCCC Standing Committee on Finance.

EMEA

Delay the shock – While Brussels works on its reform of the EU’s electricity market backed by the likes of France and Spain, Germany is pushing to delay the overhaul until after the 2024 EU elections, EurActiv reports. In 2022, record electricity prices prompted calls for reform of the EU’s market design to reduce the impacts of gas prices on electricity and ensure low-cost electricity is passed through to consumers. European Commission President Ursula von der Leyen has made the reform a priority, opening a consultation in January with a concrete proposal expected on March 14. However, Berlin is not expected to entertain an electricity reform at scale without significant domestic deliberation, which is still ongoing. Analysts have suggested it could boost affordability and avoid carbon costs.

Out of your Leag – The German economy ministry is in talks with the largest power plant operator in eastern Germany, Leag, about an “exit from lignite” by 2030 instead of the earlier target of 2028, reports Der Spiegel. The outlet adds that Leag’s majority shareholder, the Czech firm EPH, wants to “neither confirm nor deny” talks. However, the state governments in the German states of Saxony-Anhalt and Saxony have spoken out against an early end to lignite mining, notes the newspaper, adding that a law passed in 2020 stipulates that coal-fired power generation will not be phased out until 2038. Last October, German economy and climate minister Robert Habeck agreed with the state government of North Rhine-Westphalia and the energy company RWE to exit coal in 2030, says the outlet. Der Spiegel adds that, on Wednesday, the minister will visit the Schwarze Pumpe “coal-industrial” site in Lusatia with Leag. (Carbon Brief)

Rebate rumble – The German finance ministry is preparing a law to support companies that invest in energy efficiency and decarbonisation through tax rebates, business daily Handelsblatt reported. The tax reform was initially supposed to take effect in 2022 but had been postponed due to the volatile economic situation during the energy crisis. The exact amount of support funds included in the reform package has not yet been determined, as the finance ministry still needs to spell out details about individual measures. (Clean Energy Wire)

No wind from windfall – Analysis from UK trade body Energy UK suggests that the design of the government’s windfall tax on energy producers has made low carbon projects 20-30% more expensive on average, with some now up to 50% more costly to develop, and up to 54 GW of capacity at risk by 2030.

Cow curbing – Denmark should aim to reduce beef and dairy production by levying an emissions tax on farming of the equivalent of $108/tonne in order to reach its climate targets, according to the Danish Climate Council, the government’s independent adviser. The new government said in December it sees an emissions tax on farming as crucial to achieving a binding target of reducing CO2 emissions by 70% of 1990 levels by 2030. If no new policies are introduced, farming in Denmark is expected to account for around 40% of emissions in 2030, the council says. The sector currently accounts for 28% of emissions, according to Statistics Denmark. (Reuters)

AMERICAS

Climate picks – Last week, US President Joe Biden announced that Lael Brainard, the vice chair of the Federal Reserve who is known for citing the financial risks posed by climate change, would become his top economic adviser. Her appointment follows that of Richard Revesz, an environmental lawyer and an academic who is known for defending climate regulations, who last month became head of the White House’s top regulatory office – a place that has historically been viewed as the place where environmental controls go to die. The appointments to two of the most powerful posts in the White House underscore how Biden has pursued an “all-of-government” approach to climate change, appointing people with backgrounds in climate policy to senior positions across federal agencies. It also illustrates his intent to use executive action to address global warming in the last two years of this term with Republicans controlling the House of Representatives. (NYT)

Climate jobs – Canada on Friday released a long-awaited sustainable jobs plan, laying out how the federal government plans to help train workers for roles in the coming clean energy economy as the world aims for net zero emissions by 2050. The plan, to be followed by legislation later this year, includes steps such as setting up a sustainable jobs secretariat to coordinate government policies and a partnership council to promote consultation with provinces, labour unions, and others. (Reuters)

ASIA PACIFIC

In the sea-weeds — A New Zealand research project co-led by Blue Carbon Services and National Institute of Water and Atmospheric Research (NIWA) will provide the country’s first national estimate of natural kelp-based carbon sequestration in the marine environment. Live News NZ reported the Quantifying Kelp Blue Carbon project will aim to improve the country’s understanding of the overall role of deep-sea kelp in offsetting New Zealand’s carbon emissions The project was awarded NZ$1.15 mln ($717,000) from the Ministry of Business, Innovation and Employment  Endeavour “Smart Ideas” fund to conduct research from 2022-24. Its findings could provide incentives to develop near and offshore kelp aquaculture, and to conserve and grow existing macroalgae beds to contribute to the country’s zero carbon objectives. High-level estimates suggest about 11% of the carbon drawdown by kelp could be sequestered for thousands of years in deep marine sediments, according to NIWA, which said it planned to use the funding to test its hypothesis.

Hydrogen out west – Perth-based Infinite Green Energy (IGE) announced it has entered into a binding memorandum of understanding (MOU) with key joint development agreement terms with Samsung C&T, to jointly develop and build the MEG HP1 green hydrogen plant, PV Magazine reports. The agreement sees Samsung take a stake of undisclosed size for an undisclosed sum in the solar-powered green hydrogen project being developed by IGE near Northam about 100 kilometres east of Perth in Western Australia’s Wheatbelt region. The MEG HP1 project will build on the existing 11 MW Northam Solar Farm, with the addition of a 10 MW hydrogen electrolyser and battery energy storage. Once fully operational, the facility is expected to produce up to four tonnes of renewable hydrogen a day for medium and heavy-duty transport use by early 2024. IGE said the scope is there to expand the solar facility to 18 MW, potentially doubling the site’s production capacity to 8 tonnes of green hydrogen daily.

AND FINALLY…

A whale of a time – The offshore wind industry has a 36-tonne problem on its hands. Since early December, close to two dozen large whales have washed up on or near beaches on the US Atlantic coast, and about a third of the so-called strandings have occurred on the shores of New Jersey. It’s unclear what exactly is fuelling the deaths, but an unlikely coalition of wind opponents, local environmental groups, and conservative talk show hosts have zeroed in on offshore wind as the culprit. They argue that projects in development are disrupting marine life and contributing to the unusually high number of deceased whales. US government officials and the companies behind those wind projects remain firm: There is no evidence linking the whale mortalities to ongoing offshore wind development. They say New Jersey’s offshore wind ambitions are continuing as planned. (Bloomberg)

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