Newsletters > CP Daily: Monday February 27, 2023

CP Daily: Monday February 27, 2023

Published 06:15 on February 28, 2023  /  Last updated at 06:28 on February 28, 2023  / /  Newsletters

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

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TOP STORY

Despite getting legal approval, REPowerEU auctions could take several months to get underway

The EU is eyeing a summer start for sales of tens of millions of frontloaded carbon allowances under the bloc’s REPowerEU programme, Carbon Pulse understands, with officials considering scheduling them at the same time as they update this year’s auction calendar for new MSR-related withdrawals.

EMEA

Euro Markets: EUAs top €100 amid reports REPowerEU auction implementation will be delayed

EUAs neared last week’s record highs on Monday after news emerged suggesting the EU may not rush the sale of additional allowances under the REPowerEU plan, as traders rejected the growing caution of analysts who see increasing potential for a bearish reversal as the peak demand season approaches.

European authorities raid power, heating plants across Bulgaria over suspected EU ETS fraud

European authorities on Monday carried out raids in 11 Bulgarian cities in an ongoing investigation into suspected fraud through under-reporting of EU ETS emissions by power and heating plants.

Nuclear divide deepens across EU as ministers eye power market changes

A dozen EU pro-nuclear nations met on the sidelines of talks on bloc-wide power market reform on Monday, deepening the divide over atomic power that has increasingly snagged negotiations to speed the bloc’s clean energy transition in recent weeks.

AMERICAS

PREVIEW: Uncertainty dominates market ahead of inaugural Washington cap-and-trade auction

Few traders have a firm grasp of where Washington state’s first WCI-modelled carbon market sale will settle on Tuesday, as ambiguity regarding entities’ ability and willingness to bid in the sale juxtaposes against potential support from the small volume on offer and potential future linkage to the California-Quebec programme.

RGGI Markets: RGA prices slip on fewer coal, oil burns as auction approaches

RGGI Allowance (RGA) prices remained inched lower over the past week as market participants suggested mild weather and a lack of catalysts were killing volatility ahead of the power sector carbon market’s Q1 auction.

ASIA PACIFIC

Australian industry body proposes ACCU vintage limits for the Safeguard Mechanism

An Australian industry body has recommended vintage limits be placed on Australian Carbon Credit Units (ACCUs) being used for compliance purposes under the Safeguard Mechanism, but not until after the initial review period.

NZ Market: ETS price remains in the doldrums ahead of year’s first auction

The spot price for NZUs have continued to sink in recent weeks in one of the biggest corrections in the market’s history, despite the quarterly auction being less than a month away.

China accelerates coal project approvals, doubts emerge over climate targets -report

China has seen coal power projects accelerate dramatically last year with new permits reaching the highest level since 2015, adding to the worries over the country’s ability to realise its climate goals, a report has found.

India’s states need to accelerate their clean energy policies to help realise NDC goals, report says

India will need state governments to ramp up their actions to accelerate the transition to renewables at the regional level to give the world’s third-largest GHG emitter a better chance to meet its NDC goals, a joint report from two climate policy think-tanks urged on Monday.

VOLUNTARY

VCM Report: Standardised nature-based offsets rally as market starts to correct

Standardised nature-based offset prices ticked higher over the past week while over-the-counter project-specific prices held steady, narrowing the gap between the two for the first time since claims of widespread over-crediting in the REDD+ avoided deforestation sector five weeks ago.

BIODIVERSITY (FREE TO READ)

GEF-led group urges governments to help build, drive voluntary nature certificate market

Biodiversity-positive carbon credits and nature certificates can play a key role in closing the biodiversity funding gap, but governments and policymakers should support the development and scaling-up of the market, according to a high-level working group led by the Global Environment Facility (GEF).

Major asset managers not investing responsibly for people and planet -report

The majority of the world’s largest asset managers that together control over $77 trillion of assets are not investing responsibly and are failing to protect the climate, biodiversity, and people, a report by the responsible investment NGO ShareAction has found.

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CONFERENCES

Argus Asia Carbon Conference – Mar. 14-16, Sarawak, Malaysia: Organised by Argus Media in collaboration with the Ministry of Energy and Environmental Sustainability Sarawak (MEESty), and with host sponsor Samling Group, the Asia Carbon Conference will take place on Mar. 14-16 in Kuching, Sarawak, Malaysia. Join us for the first industry leadership conference for carbon offsetting and trading in Asia to get ahead of your competitors in a rapidly growing global market. This is your opportunity to interact, learn, and network, for the answers you need on fundamental questions about carbon offsets: how do they work, and how might they impact Asia? Find out more

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

Not blown away – The EU built 16 GW of new wind installations in 2022, a record year and up 40% on 2021 but still not enough to meet the EU’s 2030 goals, according to lobby group WindEurope’s annual report. Investments in new wind farms and new wind turbine orders were down in 2022 because of government interventions in electricity markets and inflation. WindEurope called on national governments to restore investor confidence. Germany was the country that built the most, followed by Sweden, Finland, France, and the UK. Europe has now installed a total of 255 GW of wind energy capacity. Permitting bottlenecks remained the biggest challenge to the expansion of the wind sector, however the new REPowerEU rules may help. Looking ahead, WindEurope expects 129 GW of new wind power to be installed over the next five years in Europe, and 98 GW of this will be in the EU with an average of 19.6 GW a year. The EU needs to build 31 GW a year to reach its target by 2030. Read Carbon Pulse’s analysis on bow the EU swerve away from Russia is bringing clean energy goals within reach.

Covering costs – Energy-intensive companies in Slovenia can claim compensation for a portion of the indirect costs of greenhouse gas emissions after the European Commission approved the country’s €99 mln compensation scheme, EurActiv reports. The government issued a regulation that will be the basis for compensation, a measure is expected to make companies more competitive EU-wide. The government estimates that between 10-25 companies will be eligible. The compensation will cover part of the companies’ costs of higher electricity prices resulting from the impact of carbon prices on electricity generation costs, incurred between 2022 and 2024, under the EU ETS. The compensation will be paid for the costs incurred in the previous year, with the final payment to be made in 2025.

ASIA PACIFIC

Oil-greening – India’s top oil firm IOC will set up green hydrogen plants at all its refineries as it pivots to a green transition plan to achieve net zero emissions from its operations by 2046, its chairman Shrikant Madhav Vaidya said, Business Standard reports. Indian Oil Corporation (IOC) is remodelling business with an increased focus on petrochemicals to hedge volatility in the fuel business, while at the same time turning petrol pumps into energy outlets that offer EV charging points and battery swapping options besides conventional fuels as it looks to make itself future-ready, he said. The company intends to expand its refining capacity to 106.7 Mt per annum from 81.2 Mt as it sees India’s oil demand climbing from 5.1 mln barrels per day to 7-7.2 mln by 2030 and 9 mln by 2040.

Gas cleaning – Japanese city gas utilities intend to introduce a framework of “clean gas certificates” for e-methane and biogas in the fiscal year 2024-25 as part of accelerating efforts toward carbon neutrality, a top official at the Japan Gas Association said Feb. 24, S&P Global Platts reports. Japanese city gas utilities see the introduction and expansion of e-methane and biogas as among key steps to decarbonise the country’s city gas, which is currently supplied after adjusting calorific values of regasified LNG and domestically-produced natural gas. As an initiative of the private sector, the Japanese city gas utilities are working to issue the certificates for production and injection of clean gas at pipelines. To introduce the certificates, the Japanese city gas utilities aim to set guidelines for clean gas certificates in the first half of FY 2023-24 and start its test operations in the second half, with an aim to have it introduced in FY 2024-25.

Green spending – Malaysia will provide up to 2 bln ringgit ($447 mln) in a financing facility via its central bank to support sustainable technology startups and help SMEs implement low carbon practices, the government announced in its 2023 budget, The Edge reports. In addition, its sovereign wealth fund, Khazanah, will provide 150 mln ringgit to spur the development of environmentally friendly projects including supporting the carbon market and reforestation. The Green Technology Financing Scheme (GTFS) will also be enhanced with the guarantee value increased to 3 bln ringgit until 2025. Furthermore, an Ecological Fiscal Transfer for Biodiversity Conservation (EFT) allocation to state governments will be increased to 150 mln ringgit per year compared to 70 mln ringgit last year. EFT allocation to states will take into consideration new addition of gazetted protected areas including for tiger habitats and reforestation efforts of degraded areas.

Integration — Two companies have announced a data transparency pilot for a carbon market project in Indonesia. Mercy Corp Ventures and Forest Carbon aim to integrate their Web3 technology into the carbon credit issuance process, generating data missing in the current market, which it hopes will increase trust in carbon markets, leading to an increase in capital flows into local communities. The Web3 tech will be applied to Forest Carbon’s Sumatra Merang Peatland project, which restores degraded wetland forests and delivers benefits for local communities, according to the companies. Data layers will address some of the common criticisms that projects face, and also add a monitoring and evaluation layer to analyse Forest Carbon’s community impact. Mercy Venture Corps argues that reducing the reliance of intermediaries by moving project and credit data on chain would introduce more speed in verification, while maintaining or enhancing quality.

Gear it up – South Korea’s environment ministry has established a special team to help domestic companies better cope with the impact of EU’s Carbon Border Adjustment Mechanism (CBAM), which will take effect from October this year, it said in a statement released on Monday. The expert council, consisting of government bodies and officials from companies in the steel, aluminium, and cement industries, will hold its first meeting on the afternoon of Feb. 28, according to the statement. In the upcoming meeting, the council is set to discuss issues about the preparation of emissions calculation guidelines and public-private collaboration plans, the ministry said.

New step – Lion Group Holding Company, which offers an all-in-one trading platform covering non-fungible tokens (NFTs) and the metaverse, is expanding into carbon trading and financing, according to PYMNTS.com. “Being a global service provider committed to full compliance, coupled with Lion’s existing core competencies in financial and Web3.0 technology, paves a strong foundation on which to build Lion’s digital carbon trading business,” CEO Wang Chunning said in a press release, without elaborating on any plans.

AMERICAS

Barely budged – Power plant emissions of sulfur dioxide and two other dangerous pollutants resumed their downward trek last year, according to newly released US EPA data. But in another sign of the headwinds that President Joe Biden’s administration faces in greening the power sector, CO2 releases barely dipped, E&E News reported Monday. At 1.7 bln tonnes, those releases remained higher than in 2020, the year before Biden took office. Nationally, the power industry is the second-largest source of GHGs, ranking only behind the transportation sector. Under Biden, the White House wants 80% of the electric grid to be carbon free by 2030, followed by 100% by 2035. Administration officials are hopeful that a massive funding boost approved last year as part of the Inflation Reduction Act will help spur the transition.

Power hungry – The California Public Utilities Commission (CPUC) on Feb. 23 ordered load-serving entities in the state to procure an additional 4 GW of net qualifying capacity in addition to the 11.5 GW it ordered in June 2021, Utility Dive reported. The 4 GW “of additional procurement for 2026 and 2027 is in response to the increasing and accelerating impacts of climate change, and updated load forecasting from the California Energy Commission that suggests that electricity demand is increasing and will continue to increase compared to when the CPUC adopted its 2021 decision,” the CPUC said. The additional capacity also accounts for “the updated anticipated retirements of some additional fossil-fueled generation resources, as well as the likelihood that the previously authorised long-lead time resources will need additional time to be brought online,” the commission added.

Community chest – The Oregon Department of Environmental Quality (DEQ) on Monday posted the inflation adjusted community climate investment (CCI) credit contribution amount for Mar. 1, 2023 through Feb. 29, 2024, set at $123. Under the state’s Climate Protection Program, fuel suppliers can meet up to 10% of their obligations for the 2022-24 compliance period by contributing funds to DEQ-approved entities. These approved entities then invest those funds in projects that reduce GHG emissions in Oregon’s communities. Once DEQ has completed written agreements with the approved CCI entities, fuel suppliers can choose to earn CCI credits.

VOLUNTARY

Verra advisory body – Offset standard developer and manager Verra on Monday announced it is relaunching the Verified Carbon Standard (VCS) Program Advisory Group to help align the VCS Program with the global ambition to halve global GHG emissions by 2030 and reach net zero by mid-century. Verra said the group will be a strategic resource to support the near- and long-term progress of the VCS Program in meeting the integrity needs of the evolving carbon market and achieving greater impact. Verra is seeking a diverse group of global experts representing academic institutions, government and multilateral organisations, non-governmental organisations, civil society groups, and VCS project stakeholders, with applications due by Mar. 27. Verra expects to finalise selections by mid-April and convene the first meeting shortly after.

Amazonian token – Technology platform Bioma Eco has launched a green cryptocurrency token “Bioma” available on the Binance cryptocurrency exchange, representing one inch of preserved forest in the Brazilian Amazon, the company stated in a press release on Monday. The company uses drone technology to map and georeference areas of native forests using high resolution satellite images. The token is available to small and large investors via the Binance Smart Chain blockchain validation mechanism, the company added.

AND FINALLY…

Combatting cow burps – Researchers in Japan are working to reduce the climate impact of methane expelled in cow burps – said to have a GHG effect around 25 times greater than CO2 – by developing stomach sensors and using AI to effectively administer feed that inhibits methane production. A research team led by Yasuo Kobayashi, a specially appointed professor at the Graduate School of Agriculture at Hokkaido University, is now testing feeds such as seaweed and vegetable oil to find diets that may be effective in reducing emissions. The team also plans to develop a small sensor by 2030 to be placed in the rumen to collect data on microbial activity and to determine when methane production peaks. Elsewhere, Australian startup Rumin8, which shares a similar ambition, has received a new $12 mln investment from investors including Microsoft founder Bill Gates. The Perth-based company is working on a dietary supplement featuring seaweed that it says is “highly efficient, low-cost, and scalable” and will reduce the emissions from livestock. (Kyodo News, the Guardian)

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