CP Daily: Friday March 10, 2023

Published 04:25 on March 11, 2023  /  Last updated at 04:25 on March 11, 2023  / Peter Kiernan /  Newsletters  /  No Comments

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

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ANALYSIS: With ‘tighter’ contracts, CIX aims to resume voluntary carbon market’s standardisation push

Singapore-based platform Climate Impact X (CIX) is planning to launch standardised nature-based carbon contracts on its new spot trading platform, forging ahead with efforts to drive fungibility in the voluntary market even as rivals focus on project-specific auctions.


PREVIEW: EU’s Net Zero Industry Act proposal seen sparking funding battle

With the presentation of the European Commission’s proposal for a Net Zero Industry Act approaching, Brussels plan to bolster domestic production is set to spark controversy.

EU lawmakers agree to increase 2030 energy efficiency targets

Negotiators from the European Parliament and EU member states have agreed to increase targets to reduce final energy usage after trilogue discussions that lasted until the early hours of Friday morning.

Power generation at risk after ECJ rules Bulgarian govt broke law by exempting coal plant emissions

Power generation by one of Europe’s largest coal plants could be at risk after the EU’s top court this week found that the Bulgarian government broke the law by allowing the facility to exceed pollution limits.

Euro Markets: EUAs post 8.3% weekly gain to close in on record

European carbon permit prices advanced for a fifth straight day on Friday, posting an 8.3% weekly gain and rising above €100 as the market continued to eye the record high amid soaring energy prices.

German aluminium plant to shut down and turn into recycling hub

German aluminium manufacturer Speira will end smelting operations at its Rheinwerk facility and invest in the plant’s recycling capacities instead, the company announced on Thursday.


INTERVIEW: Changing labels – organisations start to shun ‘climate neutral’ claims in favour of contributions

A major European intermediary is warning companies against making ‘climate neutrality’ claims in favour of climate contributions, the clearest sign yet of a shift in voluntary carbon market practices in a bid avoid carbon credit purchases getting mired in concerns about double-claiming.

Xpansiv delays first auction of Cambodian REDD+ credits

Xpansiv has been directed to postpone its first carbon credit auction that was slated for this week.

BP splashes cash on energy transition to counter extra oil and gas spending

BP is promising to spend up to $8 billion more on its energy transition plans by 2030, its annual report for 2022 revealed on Friday after the oil major rolled back on previous short term climate targets to facilitate pumping out more oil and gas this decade.

Standards body targeting small scale nature restoration raises startup cash

A newly-formed standards body that aims to target small-scale nature restoration projects has raised €5 million in seed funding, deploying digital auditing towards plots of land previously deemed too costly to manage cost-effectively.

Shell manager leaves to set up nature-based carbon firm

A manager in Shell’s nature-based solutions team has left the company to co-found a project development firm that will focus on building carbon projects with co-benefits across Southeast Asia.


RGGI Q1 auction clearing price sinks to 1.5-year nadir on meagre speculative participation

The Q1 RGGI cap-and-trade auction this week cleared at the lowest level since Q3 2021 as financial participants took a back seat, according to results published Friday.

US Carbon Markets and LCFS Roundup for week ending Mar. 10, 2023

A summary of legislative, regulatory, and policy action on carbon, clean fuel standard, and clean energy markets at the US federal and subnational levels this week, including the reintroduction of a RGGI-blocking bill in Pennsylvania and clean fuel standard proposal in Minnesota, along with movement on carbon offset bills in Washington and West Virginia.

Onslaught of California offset to LCFS applications persists with New York project

A New York-based livestock offset project is seeking to transition from generating California Carbon Offsets (CCOs) to renewable natural gas under the Low Carbon Fuel Standard (LCFS), according to documents posted Friday, marking the fourth application published this month and continuing a years-long trend.

Producers lengthen CCA and RGA positions through mid-February, while financial players sell

Compliance entities added to their net long California Carbon Allowance (CCA) and RGGI Allowance (RGA) holdings over a two-week stretch last month and speculators offloaded permits, data from the US Commodity Futures Trading Commission (CFTC) showed this week as it continued publishing backlogged Commitments of Traders reports.


Indonesia releases CCS regulations, opens door for carbon trading

The Indonesian government has announced a set of regulations to guide the development of a carbon capture, utilisation, and storage (CCUS) sector in the Southeast Asian country’s oil and gas industry, which includes allowing for the monetising of the activity through the use of carbon credits, the Ministry of Energy and Minerals Resources (MEMR) announced on Friday.

CN Markets: CEA price stable amid tepid sentiment, CCER volume increases

The spot price for Chinese carbon allowances remained stable over the past week amid lukewarm sentiment, while the latest change in the country’s leadership team has aroused speculations about the future of the carbon market.

Soil carbon hard to get off ground, but developer optimistic issuances will come soon

The head of one of Australia’s largest carbon project developers remains bullish about soil carbon projects, but has acknowledged the credit issuance from the controversial project type has taken longer than anticipated.


Officials target Q4 for preparing key Article 6 methodological guidance

The body responsible for shaping which carbon projects will be issued credits under Article 6.4 of the Paris Agreement resumed work this week, providing clarity on procedural matters such as a work plan that targets final recommendations on methodologies including removals before COP28 in December.

Xpansiv to provide access to its environmental reference data to ease trade

Environmental markets platform Xpansiv said Friday it will open up its standardised reference data for public use to enable companies to identify and track environmental assets across their entire lifecycle.


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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

Carbon Forward Asia – May 2-3, Singapore/Online: Carbon Forward is coming to Asia! Join us in Singapore or watch the conference online, and gain valuable insights into the trends and developments in carbon pricing throughout the Asia Pacific region. We will discuss investment opportunities across compliance and voluntary carbon markets, as well as transport initiatives such as CORSIA and SAF for aviation and shipping sector programmes, the impact of the EU’s carbon border adjustment mechanism (CBAM), CCS crediting, developments under Article 6 of the Paris Agreement, corporate climate goals, and other exciting topics. We are curating a high-level programme for this rapidly-evolving region, with the agenda and speaker line-up to be released soon. Early Bird tickets are now available. Purchase yours now



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


Power play – The EU plans to encourage governments and companies to use more stable, long-term power market contracts to avoid massive price swings as part of a reform demanded by member states following an unprecedented energy crisis, Bloomberg reports, citing a draft of the European Commission’s power market reform proposal due on Mar. 16. The EU’s executive arm wants to keep the marginal pricing model and avoid drastic changes to the market design in a bid to ensure predictability and keep electricity flowing freely across the region.

Cash for CCS – Britain will invest £20 bln over the next 20 years in projects to capture and store CO2, the government said on Friday, as part of efforts to meet climate goals and create jobs. A report by Britain’s climate advisers on Thursday said technology that filters planet-warming carbon from industrial smokestacks before it reaches the atmosphere has a crucial role as Britain aims to reduce emissions to net zero by 2050. The investment, to be set out in next Wednesday’s budget as part of what the government is calling a “clean energy reset” will “drive forward projects that aim to store 20-30 million tonnes of CO2 a year by 2030, equal to the emissions from 10-15 million cars,” Friday’s statement from the government’s Treasury department said. “The UK has enough carbon capture capacity to store over a century and half of national annual CO2 emissions, making it one of the most attractive carbon capture markets on earth.” The Treasury also said it will launch a competition for the country’s first small modular nuclear reactor (SMR) and that the government’s “Great British Nuclear” body will select sites for potential projects, and remove cost, uncertainty, and bureaucratic barriers for manufacturers. (Reuters)

Cash for BECCS – UK officials have raised fears that Drax may divert £2 bln of planned investment in carbon capture to the US, lured by President Joe Biden’s massive package of green subsidies. A delegation of US senators is scheduled to visit Drax power station in England next week where they will be shown the company’s plans for new BECCS technology, people familiar with the matter told Bloomberg.

Le bromance – A new partnership between the UK and French governments has been signed which aims to help both nations make the move towards greater energy security by moving away from fossil fuels and towards renewables and nuclear power, the British government said in a press release. Under the deal signed Friday, the UK and France commit to further cooperation on civil nuclear, to capitalise on the ambition of both countries to significantly grow their sectors. The statement also commits France and the UK to work together, along with other G7 leaders, to take concerted action to cut reliance on civil nuclear and related goods from Russia, including working to diversify their supplies of uranium and nuclear fuel production capability. The UK currently has three interconnectors with a capacity for 4 GW with France that will also be expanded by up to two thirds, subject to regulatory approval. The UK targets at least 18 GW of interconnection capacity by 2030.


SA(F)ve for longer – The five-year shelf life of US tax credits included in the Inflation Reduction Act (IRA) for lower-carbon aviation fuel is too short to anchor development of the nascent industry, energy executives said at the CERAweek conference in Houston, according to Reuters. Sustainable aviation fuel (SAF) tax credits extend to 2027, but it would take much longer to scale up production of SAF to make it competitive with cheaper petroleum-based jet fuel. “Having a policy that expires at that five-year mark really doesn’t help,” said LanzaJet Chief Executive Jimmy Samartzis. Though the IRA is a “game-changer” in supporting the SAF market, the tax credits are insufficient to make SAF competitive with traditional jet fuel, said Bryan Fisher, managing director at non-profit RMI. Devin Mogler, a senior vice president at Green Plains, said he expected the tax credit would be extended past 2027 as new alliances building within the energy and biofuels communities – various players involved in the SAF, ethanol, and biodiesel industries that have a stake in seeing the market expand –would be pushing for an extension for the credits.

Alberta advances – Renewable energy has overtaken coal as Alberta’s second-largest source of electricity, according to the Alberta Electric System Operator. The change is mostly a result of natural gas supplanting coal as the primary source of power between 2015 and 2022. Natural gas grew as a proportion of Alberta’s power generation to 73% in 2022 from 41% in 2015. Conversely, coal power cratered to 12% of Alberta’s energy mix from 50% in 2015. Renewable power generation nearly doubled over the seven years, to 13% from 7%. (CBC)


Moo-ve over cows — New Zealand-based fermentation start-up, Daisy Lab, has successfully closed an oversubscribed Seed funding round, Green Queen reports. The NZ$1.5 mln ($930,000) seed investment was led by the Values Trust, Icehouse Ventures, and Outset Ventures. Daisy Lab said it would use the funding to scale up production of its microbial whey protein and continue its research into caseins. The company is looking to use its technology to produce high-quality, dairy-identical proteins without the need for cows in order to deliver dairy that reduces GHG emissions, land and water use. Animal agriculture is New Zealand’s biggest emitting sector. Daisy said the technology has the potential to revolutionise the food industry and address climate change and food security. Precision fermentation is a rapidly growing field that allows companies to produce high-quality proteins and other biomolecules without the need for animal agriculture. Daisy Lab joins category leaders including Perfect Day and Remilk in developing novel ways to produce dairy-identical proteins using precision fermentation.

First of its kind – Taiheiyo Cement, one of the top cement makers in Japan, has secured the first transition-linked loan in the country’s cement sector, which will be used to help achieve its 2050 carbon neutrality target, it said in a statement released earlier this week. With funds from the Development Bank of Japan, the company aims to cut domestic CO2 emissions by 40% and reduce emissions intensity in the supply chain by 20% by 2030, compared to the 2000 level, Taiheiyo Cement said, without disclosing the exact size of the loan.


REDD on the line – In response to a Guardian article on Friday suggesting that offset standards developer and registry Verra planned to replace its rainforest REDD methodology after the newspaper’s investigations exposed flaws in the protocol, Verra issued a statement that it was not scrapping those methodologies. The registry outlined that an update to REDD had been “subject to consultation for many years” and that “a key outcome of the latest consultation, which took place a year ago, was to bring forward release of the update to July-September 2023”. Verra also noted that existing REDD projects would use the updated protocol to calculate offsets when data for their respective jurisdictions would be available and approved.

EV offsets – A regional US bank, Connecticut Green Bank, and its partners secured Verra-accredited VCS carbon credits using the registry’s VM0038 methodology for deploying electric vehicle (EV) charging systems, the company announced Friday in a press release. The Green Bank’s roster of project partners originally included EV charging pioneers Volta, U-Go Stations, which Blink Charging recently acquired, Proterra, and the EV Structure Company. The consortium’s partners have expanded to now include Dominion Energy, Exelon, Optiwatt, EV Match, BLINK, AmpUp, and OpConnect, the release noted. The environmental benefits of these initial credits are equivalent to 5,278 tCO2 worth of abatement. This is the bank’s first entry into carbon markets.


AI gone bananas – ChatGPT maker OpenAI uses cloud computing that relies on thousands of chips inside servers in massive data centres across the globe to train AI algorithms called models, analysing data to help them learn to perform tasks. AI uses more energy than other forms of computing, and training a single model can gobble up more electricity than 100 US homes use in an entire year, Bloomberg reported on Thursday. Yet no one knows exactly how much total electricity AI uses, the type of power supplied to run these programmes, and carbon emissions attributed to AI, Sasha Luccioni, a researcher at AI company Hugging Face, said in a paper quantifying the carbon impact of the company’s bot BLOOM, a rival of OpenAI’s GPT-3. Researchers training GPT-3, which is a single general-purpose AI programme that can generate language and has many different uses, took 1.287 GWh, according to a research paper published in 2021, or about as much electricity as 120 US homes would consume in a year. That training generated 502 tonnes of carbon emissions, according to the same paper, or about as much as 110 US cars emit in a year. While training a model has a huge upfront power cost, researchers found in some cases it is only about 40% of the power burned by the actual use of the model, with billions of requests pouring in for popular programmes. OpenAI’s GPT-3 uses 175 bln parameters, or variables, that the AI system has learned through its training and retraining. Its predecessor used just 1.5 bln. Most data centres use graphics processing units or GPUs to train AI models and those components are among the most power hungry the chip industry makes. When chipmaker Nvidia does share that information, Luccioni thinks it will turn out that GPUs burn up as much as the total emissions of a small country. She said, “It’s going to be bananas.”

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