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TOP STORY
Lawmakers consider creation of an EU carbon removals market before 2030
EU parliamentarians are considering whether to push for the creation of a bloc-wide carbon removals market before the end of the decade, with at least one senior MEP signalling on Wednesday that they will submit an amendment in upcoming legislation while another urged caution.
EMEA
EU lawmakers call for steeper phase-down of F-gases from 2039
The European Parliament’s environment committee (ENVI) on Wednesday voted for a steeper phase-down of fluorinated gases (F-gases) from 2039 onwards, aiming to raise ambition in a revised regulation to rid the bloc of the potent warming gases used in refrigeration.
EUA price at €100 makes green hydrogen competitive, says bloc’s top climate official
The current price of EU carbon allowances makes renewable hydrogen competitive against fossil fuel-derived, the European Commission’s top climate official told an event in Brussels on Wednesday in remarks that contrast with recent legislator views expressing unease at the record levels.
Euro Markets: Carbon weakens as trade data show further build in funds’ net long positions last week
EUA prices weakened for a second day as selling pressure built up ahead of the weekly release of Commitment of Traders data, which showed that funds added to their net long position last week.
EDP posts surge in coal and gas burn in 2022 results
Portuguese utility EDP reported a 50% jump in EU ETS-covered fossil power generation in full-year results for 2022, published Wednesday, as extreme low hydro output in Spain and Portugal forced a ramp up in gas burn.
IT firm launches algorithm to track UK seagrass carbon sinks
A multinational IT firm has partnered with a seagrass conservation charity to launch an open-source algorithm that helps locate, quantify, and track seagrass meadows initially across the UK, announcing the move to celebrate the UN’s first-ever World Seagrass Day on Wednesday.
AMERICAS
CCAs pivot higher after California ARB chair says carbon market stringency must increase
California Carbon Allowance (CCA) prices jumped on Wednesday afternoon after the head of regulator ARB confirmed the agency must strengthen the WCI-linked cap-and-trade system to achieve an accelerated 2030 GHG reduction target.
LCFS Market: California credits retreat from five-month highs, as another offset project applies for fuel pathway
California Low Carbon Fuel Standard (LCFS) credit values in recent days unravelled from 5.5-month highs that were spurred by a presentation last week to tighten the scheme’s GHG reduction targets, while an Idaho-based California Carbon Offset (CCO) project applied to transition to the transportation sector programme.
VOLUNTARY
Forestry credits must rise to $30-50 range to have real impact -UNEP
The market must value carbon credits from forestry projects in a range of $30-50/tonne to make conservation and restoration economically viable, a senior member of the UN Environment Programme told an event on Wednesday.
US financier offers $100 mln worth of offsets on Canadian fintech platform
A US-based carbon credit financier and originator on Tuesday announced an initial offering of $100 million in offsets available via a Toronto-based capital raising platform.
Verra net assets skyrocket by 270% in two years on surging carbon credit issuances
Net assets from offset standard developer and manager Verra nearly quadrupled between 2019 and 2021 as carbon credit issuances spiked, according to its annual financial statement published Tuesday.
ASIA PACIFIC
Indonesia receives first advanced payment for REDD+ activities from World Bank’s forest carbon facility
Indonesia has received its first advanced payment, totalling $20 million, for REDD+ activities in East Kalimantan province from the World Bank’s Forest Carbon Partnership Facility (FCPF).
Japan adds J-credit methodology for paddy rice cultivation
The committee steering Japan’s J-Credit programme has given the green light to a new methodology regarding the cultivation of paddy rice, a move reflecting the government’s increased focus on the development of nature-based solutions and ambition to drive new supply ahead of the GX League launch.
India must avoid carbon market pitfalls, think-tank says
A carbon market in India can encourage a cost-efficient, low carbon transformation of the Indian economy, but policymakers need to ensure that it is well designed and implemented to avoid key pitfalls that would undermine its ability to contribute to meeting long term climate goals, a report from a Mumbai-based environmental think-tank has found.
INTERNATIONAL
Associations warn against financial instrument regulation for carbon
Regulatory associations and industry bodies are calling for carbon credits to be classified as physical commodities globally, rather than as financial instruments where regulation is more onerous.
BIODIVERSITY (FREE TO READ)
Trader accreditation, price floor needed to help govern scaled-up biodiversity market -report
Special trader accreditations, a price floor on credits, and potential sellers’ clubs that guarantee high-quality supply are some of the elements proposed by Geneva-based non-profit NatureFinance and the Taskforce on Nature Markets to help govern a scaled-up market for biodiversity credits.
Biodiversity and climate goals converging with private sector “front and centre” -experts
Speakers at the One Forest Summit that began on Wednesday in Gabon described the converging of nature and climate goals and outlined their view that the private sector will assume a leading role in channeling finance to nascent biodiversity markets.
Australia strikes ocean eDNA biodiversity partnership with major philanthropic group
The Australian government has teamed up with the Minderoo Foundation to track threatened marine species through environmental DNA (eDNA) technology, an approach some are pushing to use as a foundation for countries to earn biodiversity credits through Marine Protected Areas (MPAs).
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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
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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
All rise – Australia will co-sponsor the Pacific island nation of Vanuatu’s historic bid for the international court of justice to rule on the international legal obligations that countries have to act on climate change, The Guardian reports. The small-island state will soon put a resolution to the UN General Assembly seeking an opinion, asking the court to pay particular attention to the harm experienced by islands that are particularly vulnerable to rising temperatures and sea levels. (Carbon Brief)
Protesting protectionism – As rich countries compete to get electric vehicles made in their countries, the head of the IMF warned that a “slide into protectionism” will make it harder for poorer countries to access green technology and reduce emissions. Ahead of last weekend’s G20 finance ministers summit in India, IMF boss Kristalina Georgieva wrote in a blog that there are “signs of progress, as major economies realign their fiscal frameworks to accelerate the green transition.” “But policies should stay focused on that transition – rather than providing a competitive advantage to domestic firms,” Georgieva noted. She continued to write that policies should “be carefully designed to avoid wasteful spending or trade tensions, and to make sure that technology is shared with the developing world”. (Climate Home)
EMEA
Car clash – Germany and Italy stepped up their opposition to an EU push to phase out combustion-engine cars that is pivotal to the bloc’s green agenda, Bloomberg reports. The plan, which effectively bans the combustion engine in new cars from 2035, was provisionally agreed on by member states and the bloc’s parliament last year but Germany wants the Commission to come up with a technical proposal to allow the continued use of climate-neutral e-fuels, Italy is broadly opposed to the regulation while Poland and Hungary have always opposed the deal. The planned formal approval by member states next week had previously been seen as a formality, though an assurance from the Commission, such as a statement or declaration, could be enough to stop Germany from abstaining.
Green bonds – At least 85% of the funds raised through green bonds in the EU should go to projects aligned with the Taxonomy Regulation, according to a deal reached on Tuesday by the European Parliament and Council on a Commission proposal. The new Green Bond Regulation is the “world’s first” set of comprehensive rules in this field, but Reuters reports that compliance with the standards remains on a voluntary basis. “Led by Europe and European issuers, the green bond market is growing into an important source of funding for companies that need to fund large-scale climate-friendly investments, such as renewable energy, clean transportation, and energy-efficient buildings,” said the EU finance commissioner, Mairead McGuinness. The Commission will also create templates for issuers of other bonds with environmental objectives, even if they do not make use of the bonds, and a regime for the registration and supervision of external reviewers.
Sacre bleu – A severe winter drought in France is causing worries that the country’s energy production could be impacted throughout the year, compounding an already tense energy supply situation across Europe, Handelsblatt reported. A dry spell lasting more than 32 days since the end of January has made the current winter the driest period registered in the country since full records began in 1959 and raised severe concerns about the consequences for agriculture, energy and ecosystems. In a situation described by environment minister Christophe Bechu as “catastrophic”, the government introduced a state of emergency and corresponding water saving measures at an unusually early time of the year. According to Bechu, water supply is even more threatened than in 2022, when a prolonged drought led to throttled hydro and nuclear power production and prompted strict water saving measures especially in the south of the country. Energy policy observer Jean-Marc Jancovici said the lack of rain and snow will again suppress energy generation from hydropower and nuclear plants, which need river water for cooling. The drought is also affecting neighbouring states, such as Spain, Italy or Switzerland. (Clean Energy Wire)
Atomic action – Slovakia may build a new nuclear reactor in the future as electricity consumption is expected to increase in light of new energy-intensive projects, EurActiv reports. The Slovak Nuclear Regulatory Authority already has a request for an authorisation of construction from the Nuclear Energy Company of Slovakia, which is partly owned by the state. The company wants to build a power plant on the present Jaslovske Bohunice power plant site, which will reach the end of its lifetime sometime after 2040. Supporters of the projects argue that Slovakia will need a new power plant because of the higher electricity consumption after several new energy-intensive projects are completed, such as the new Volvo factory and the construction of two electric arc furnaces at the US steel factory in Kosice or potential battery gigafactory. Experts, however, warn that Slovakia needs flexible sources able to provide so-called ancillary services for renewables.
Standby switch – UK energy minister Grant Shapps says plans to close Britain’s last coal-burning power plants should be delayed for another year and hopes to keep the plants on standby through next winter despite prior agreements to begin winding down operations later this month as the nation moves to lower-carbon electricity sources. Shapps said it would be “crazy” to risk the nation’s energy security by not having the coal plants on standby, adding that he was “investigating what a contract would look [like]” for the plants to stay open. However, the companies running the plants said they had not received any formal request to stay open. (Daily Telegraph)
Green steel – Germany’s largest steel manufacturer, Thyssenkrupp, placed an order with plant builder SMS group to construct the company’s first hydrogen-powered direct reduction plant at the Duisburg location. This is one of the biggest industrial decarbonisation projects worldwide and will avoid more than 3.5 MtCO2 a year in the future. The project will cost €1.8 bln and will have a capacity of 2.5 mln tonnes of directly reduced iron. It is expected to come online by the end of 2026. The project will require EU approval under state aid provisions as well as final funding decisions. The project marks the first attempts at decarbonising the European steel industry, which has struggled to lower its carbon emissions in past years.
Port of call – Associated British Ports (ABP), the UK’s leading ports group, has launched its wide-ranging new sustainability strategy, Ready for Tomorrow (RFT), backed by a plan to invest around £2 bln in decarbonising its own operations by 2040 at the latest and in major infrastructure projects to enable the wider UK energy transition, PortNews reported Wednesday. Ready for Tomorrow looks both internally at ABP’s own operations and outwards, to building greater partnership and collaboration to meet the challenges and grasp the generational opportunities of sustainability. For ABP’s own operations Ready for Tomorrow identifies five focus areas for action: Net Zero, air quality, biodiversity, waste, and water management. Each focus area has a programme of action plans – including action ideas from ABP’s employees in our ports and other locations – to achieve ambitious but credible targets. This includes a commitment to reach Net Zero from ABP’s own operations (Scopes 1 and 2) by 2040. Ready for Tomorrow embraces the fact that ports, and in particular ABP, as the UK’s largest ports operator, have a vital and unique enabling role for a range of major decarbonisation and sustainability projects.
AMERICAS
Hard-wired for the transition – Despite a tumultuous year in 2022, the US economy is now firmly on the clean energy transition path to drive down emissions and create economic opportunities. Investment in clean energy generation and technologies shattered records in 2022, even as supply chain disruptions, an international energy crisis, and rising interest rates elevated prices for key energy commodities, according to the 2023 Sustainable Energy in America Factbook published Wednesday by BloombergNEF and the and the Business Council for Sustainable Energy (BCSE). Power generation from renewable sources hit a new record, consumers purchased nearly 1 mln new EVs, and Congress sent a clear signal about long-term commitment to decarbonisation through the passage of the Inflation Reduction Act, the most consequential climate law in US history.
Queueing for climate cash – The US EPA began inviting states on Wednesday to receive funds for climate planning under a $5 bln grant programme created by last year’s inflation reduction law. The first phase of the programme, which EPA has said it will launch on Mar. 1, allows states and other subnational governments to opt in to receive a slice of the programme’s $250 mln planning fund to help them develop a climate strategy. Later this summer, EPA will begin accepting applications for grants to be awarded competitively under the programme’s $4.6 bln implementation budget. States, tribes, and cities are eligible for funding under both phases of the Climate Pollution Reduction Grants programme, as are US territories and the District of Columbia. (E&E News)
Shifting gears – The Biden administration is advancing a fuel policy shift demanded by Midwest governors who expect it will encourage filling stations to sell higher-ethanol E15 gasoline and offer it year-round. Under the EPA proposal outlined Wednesday, the change would start by the 2024 summer driving season, with effects rippling across the fuel supply chain, from refineries to filling stations. While on the one hand the EPA’s move is a positive for ethanol advocates, it’s also a blow to supporters who called for action by this summer. But refiners and pipeline operators argued they needed time to adapt, including by adding equipment to produce, store and distribute a new, lower-volatility gasoline blendstock for the region. The EPA action would take effect in Apr. 2024, Ben Hengst, deputy director of the EPA’s Office of Transportation and Air Quality, said during an address at the industry’s National Ethanol Conference. (Bloomberg)
Playing the devil’s advocate – The California Energy Commission on Tuesday approved a staff analysis recommending the state pursue extending the operation of the Diablo Canyon Power Plant through 2030 to ensure electricity grid reliability, Utility Dive reported. Officials said they considered data showing California risks energy supply shortfalls during extreme weather events driven by climate change. State legislation requires the CEC to determine the need to extend Diablo Canyon’s license beyond its expiration in 2025. In Jan. 2018, the California Public Utilities Commission approved a proposal by Pacific Gas & Electric, Diablo Canyon’s owner, to retire Unit 1 in 2024 and Unit 2 the following year. Diablo Canyon supplies about 17% of California’s zero-carbon electricity and 9% of total electricity, according to the CEC. “As California confronts a rapidly changing climate, extraordinary heat events and record energy demand are becoming increasingly ordinary,” said CEC Vice Chair Siva Gunda. “The state needs to keep all options on the table to protect public health and safety.”
Oregon emissions – Oregon’s sector-based GHG emissions reached 61.4 MtCO2e in 2021, a 5.5% increase from 2020 levels, according to Department of Environmental Quality (DEQ) data published Wednesday. The state’s cap-and-reduce Climate Protection Program went into effect from 2022, subjecting transportation fuel and natural gas suppliers to a declining emissions cap.
Bad Exxon – Exxon Mobil failed to initially report a release of super-potent GHG methane in the Permian Basin that occurred in early February, violating state rules. The incident at the company’s facility in New Mexico was reported after it reviewed a third-party satellite image. Exxon is the biggest US operator to publicly acknowledge a misstep in reporting its emissions since high-resolution satellite imagery of methane concentrations has become more widely available in the last few months. It also comes at a delicate moment after Exxon disclosed last week that the Justice Department may seek a fine for a well blowout in Ohio that caused an enormous methane leak in 2018. Exxon blamed its failure to initially notify regulators when the leak was discovered on Feb. 5 on human error, saying someone forgot to file a form. “We filed a notification with the state regulator, however our filing was unfortunately submitted after the required reporting time,” the company said in a statement. Exxon this week amended the filing, revising up the amount to 529,000 cubic feet from 448,000 cubic feet. Operators in New Mexico with releases caused by an emergency or malfunction that exceed 500,000 cubic feet must notify regulators verbally or through an email within 24 hours and must file a more detailed description of the event within 15 days. Releases less than 500,000 cubic feet need only submit notification within 15 days. (Bloomberg)
ASIA PACIFIC
On the agenda – Japan will stress the importance of investment in natural gas, liquefied natural gas, as well as cleaner fuels such as hydrogen and ammonia during its presidency of the G7 this year, a senior energy official said, Channel News Asia reports. Japan, president of the rich-country grouping for 2023, will hold a ministerial meeting on climate, energy and environment in the city of Sapporo on Apr. 15-16, ahead of the main G7 summit in Hiroshima city on May 19-21. Japan expects global energy markets to remain tight for years and it would “emphasise investment into natural gas, LNG, hydrogen and ammonia”, Takeshi Soda, director of the Ministry of Economy, Trade and Industry’s petroleum and natural gas division, told a conference.
Optimism prevails – Japan, which imports nearly all of the fuel used in its power sector, can get 90% of its electricity from clean sources by 2035, Reuters reports, citing findings from a study by the Lawrence Berkeley National Laboratory. The resource-poor country’s power grid can remain reliable without coal generation or new gas-fired power plants, and the share of 90% would cut electricity costs by 6% and power sector emissions by 92% from 2020 levels, supported by extra battery storage and inter-regional transmission lines, according to the study. Japan has pledged to cut GHG emissions by 46% by 2030 versus 2013 levels by boosting renewable energy in its electricity mix to 36%-38%, double 2019’s levels.
Low carbon spending – Indian conglomerate Essar has announced that will invest $3.6 bln in India and the UK through a new entity to drive decarbonisation, Argus reports. The company announced the formation of Essar Energy Transition (EET), a new entity that will invest $2.4 bln in the UK and $1.2 bln in India to develop a range of low-carbon energy transition projects over the next five years. EET will invest $1.2 bln in developing a cost-efficient global supply hub in India for low-carbon fuels such green ammonia and green hydrogen, with the aim of exporting green ammonia from India to the UK and other European countries to meet rising market demand in these locations, Essar said. Essar is currently developing 1 GW per year of green ammonia production capacity in India for sale to the UK and global markets. Essar also plans to create an LNG value chain in India, including the production of LNG trucks and fuel stations and a pellet plant in the eastern state of Odisha. But the company did not provide further details on these projects. The company said its aims for India will complement the government’s goal of making the country a hub for green hydrogen production and export.
Miss the green bus — Australian iron ore billionaire Andrew Forrest has warned Australia is in danger of “missing the bus” on the massive green hydrogen opportunity if it cannot match the incentives and government support provided by the US, and now the EU, RenewEconomy reports. Forrest told a seminar on Wednesday that hydrogen would be a key component of the $100 trillion green energy transition opportunity, but all the capital is heading to the US because of its Inflation Reduction Act. He noted that his own company, Fortescue Future Industries, which is targeting 15 mln tonnes in green hydrogen production per year by 2030, will likely have its first three ventures of scale in the US due to the IRA’s tax and production credits. He said the US was already luring capital, projects, technologies an people, and it doesn’t face the same transportation issues as Australia, given it would be consumed in the US. Clean Energy Council CEO Kane Thornton said Australia may have even less time to move – less than a year – and cited a recent example where one grid engineer hired by an Australian renewable developer instead rang from the airport to announce he was getting twice as much money in the US.
Blue carbon auction – Around 2,340 offsets generated from a blue carbon project based in Xiangshan County have been auctioned off, marking the first blue carbon auction in China, according to a notice posted Tuesday on Ningbo City’s public resources trading platform. The sale cleared at 106 yuan ($15.42) per tonne, compared to the starting price of 30 yuan, the notice said. The buyer, Zhejiang Yiduan Precision Machinery Co Ltd, said the purchase of such credits was made in preparation for the upcoming relaunch of the national offset programme, which has been shut down since 2017 and is yet to approve any methodology on ocean-based offsets, local media reports.
VOLUNTARY
Standards backed – Voluntary carbon market business association ICROA has endorsed carbon removals standard Puro.earth and conditionally endorsed Socialcarbon, enabling both to be listed in the body’s Code of Best Practice, and ICROA accredited organisations to be able to transact units and offset client emissions with these credits effective immediately. Standards ART TREES and Global Carbon Council have also now been fully endorsed by the body.
Foam party – The American Carbon Registry (ACR) on Wednesday published version 2.0 of the Methodology for the Quantification, Monitoring, Reporting and Verification of GHG Emission Reductions from the Destruction of Ozone Depleting Substances (ODS) and High-Global Warming Potential (GWP) Foam. ACR said the methodology supports high-integrity projects that destroy extremely potent ODS and High-GWP foam, which are more harmful than CO2 for the climate. Version 1.0 of the ACR Methodology updated and expanded California regulator ARB’s ODS Compliance Offset Protocol that was first adopted for use in the state’s cap-and-trade programme in 2011 and was subsequently revised in 2014. The main updates in version 2.0 include adding Canada as an eligible source country; allowing the destruction of ODS globally at any TEAP-compliant or RCRA-permitted destruction facility; making specific unused ODS solvents eligible for destruction; allowing crediting for 100% of destroyed ODS and High-GWP foam; and, including as eligible for destruction additional CFCs, HCFCs and HFCs.
Joining forces –Paris-based carbon management and reduction platform Sweep and San Francisco-based climate solutions firm 3Degrees on Wednesday announced they are joining forces to help organisations effectively implement meaningful emission reductions that are aligned with their climate and business goals. With Sweep, businesses can measure and track carbon data in real-time, set reduction targets, and simulate decarbonisation initiatives – while engaging all the stakeholders contributing to their global footprint. 3Degrees’ expert consulting services help companies seamlessly onboard the platform, develop emission reduction roadmaps, and access renewable energy and decarbonisation tools to immediately address their global operations and value chain emissions. The announcement follows the launch of Sweep for Supply Chain, a solution designed to support businesses in addressing supply chain emissions.
SCIENCE & TECH
Gone girl – The first three winter-long, “triple-dip” La Nina event of the 21st century is waning, with increasing odds for an El Nino to form in the tropical Pacific Ocean, the World Meteorological Organization (WMO) stated today, In addition to influencing global weather patterns, El Nino events release a tremendous amount of ocean heat into the atmosphere, and would increase the odds for a record warm year in 2024. The WMO’s chances of an El Niño in its outlook gradually rise from 15% during the April through June period, to 35% in the May to July period. They reach 55% by the summer. La Nina conditions are characterised by cooler than average ocean temperatures in the equatorial tropical Pacific Ocean, causing particular weather pattern shifts globally. If and when an El Nino arrives, there may be a slight delay in its effects on global average temperatures. The UK Met Office has forecast a 93% chance that at least one year will be the warmest on record by 2026, with a 50% chance of temporarily reaching 1.5 C above the pre-industrial era. (Axios)
AND FINALLY…
Green bonus BS – Over three-quarters of executives at Europe’s largest 50 firms have some sort of executive bonus for hitting environmental targets, and a surprisingly high number of senior employees received the payout, despite slow progress on emissions reductions. A report from PwC and the London Business School found in 2022 that half of green bonuses were paid out in full, while the average company gave out 86% of its green bonuses. That’s inconsistent with the corporate sector’s progress on climate change, according to the report. One company that gave out a sizeable bonus was Shell, which has not committed to reduce its absolute emissions. (FT)
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