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TOP STORY
ANALYSIS: Court case showcases conflict potential amid China’s lack of ETS legislation
The legislation underpinning China’s emissions trading scheme (ETS) is yet to be finalised, a situation that is creating regulatory uncertainties for participants around the definitions of allowances and trading rules, in turn impacting market activities, experts have told Carbon Pulse.
EMEA
ANALYSIS: EU carbon hedging to remain low as crises continue to bite
Depressed levels of carbon hedging by EU utilities in 2022, mainly due to the energy crisis, may well continue with a shaky macroeconomic picture further weakening in recent weeks, expectations of lower power sector emissions in 2023 and beyond, and the risk of gas supply shortages later in the year.
EU legislators reach provisional deal to spur clean maritime fuels
Negotiators of the European Parliament and Council reached a provisional deal early Thursday morning on the FuelEU Maritime initiative, aiming to reduce the carbon footprint of the maritime sector by accelerating the deployment of sustainable fuels.
EU parliament head condemns halt to cars ban, leaders push for prompt agreement
The European Parliament’s president Roberta Metsola stressed the need to respect the legislative process at the EU leaders’ summit on Thursday, held amid tensions over Germany’s last minute refusal to back a 2035 ban on CO2-emitting cars, but the issue failed to distract leaders from swiftly adopting conclusions on other issues.
Euro Markets: EUAs climb to seven-day high as investors resume buying amid compliance demand
EUA prices rose for the fourth time in five days on Thursday as sustained buying after Wednesday’s expiry of March options and continued compliance purchases drove the market to its highest intraday level in six days, while energy markets were also stronger amid an improvement in macro sentiment.
INTERNATIONAL
INTERVIEW: UN-issued carbon credits could emerge next year, says IETA boss
Carbon credits from the Paris Agreement’s Article 6.4 mechanism could be issued next year if the supervisory body and the secretariat of the UNFFCC get into gear, the president and CEO of the International Emissions Trading Association (IETA) told Carbon Pulse on Thursday.
AMERICAS
WCI Markets: CCAs continue to align with macro sentiment through another volatile week
California Carbon Allowance (CCA) prices inched higher through another volatile week as banking contagion fears eased and central banks turned their attention back to tackling inflation pressures.
GWSA March cap-and-trade auction clears at lowest level in three sales
Power generators regulated under Massachusetts’ Global Warming Solutions Act (GWSA) carbon market purchased allowances at the March current and advance auction at the lowest price since Q2, according to results published Thursday.
Alignment necessary between California LCFS and US RFS on electricity crediting
California regulator ARB and the US government must pursue harmonisation between the treatment of biogas-derived electricity under the Low Carbon Fuel Standard (LCFS) and Renewable Fuel Standard (RFS) as a new addition to the latter biofuels programme takes shape, a conference heard Thursday.
ASIA PACIFIC
China coal use to bounce back in 2023, could push global demand to record level, consultancy says
China’s coal demand is set to bounce back strongly in 2023 on the back of GDP growth, which could also push global consumption for the carbon intensive fuel to a new record level in the most bullish scenario, according to an outlook on the impact of China’s post-Covid-19 re-opening on the Asian economic giant’s demand for commodities.
NZ market watchers say ETS review expected, but warn of “significant disruption” from policy uncertainty
New Zealand ETS observers were optimistic about the government’s announced review into the ETS, however there are fears that it will add even more policy uncertainty for the market ahead of the coming election.
Australian agtech company to propose new soil carbon method
An Australian agtech firm has announced plans to put forward a new soil carbon methodology of sequestering carbon to begin generating Australian Carbon Credit Units, in the hopes of leveraging compliance demand created by the reformed Safeguard Mechanism.
VOLUNTARY
Gold Standard proposes new coal phaseout and clean energy methodology concept
Carbon project certifier Gold Standard will look to credit the early phaseout of coal power plants and their replacement with renewables, according to a proposed methodology concept published Thursday.
Trade-off qualms between new and existing carbon credit methodologies unfounded -experts
There does not need to be a trade-off between improving existing carbon credit methodologies and bringing new and innovative ideas to market, a panel at the North American Carbon World conference in Anaheim heard Thursday.
Engie deepens ties with certifier to accelerate Africa’s clean energy rollout
A unit of utility Engie has deepened its partnership with a data-driven startup certifier, aiming to accelerate the use of climate finance in the off-grid sector in sub-Saharan Africa through issuing and selling carbon credits to the voluntary market.
BIODIVERSITY (FREE TO READ)
Biodiversity Pulse Weekly: Thursday March 23, 2023
A weekly summary of our biodiversity news plus bite-sized updates from around the world. All articles in this edition are free to read (no subscription required).
Nations announce largest ever freshwater restoration initiative
A group of six African and Latin American nations on Thursday officially launched the Freshwater Challenge, an initiative to restore 300,000 km of rivers and 350 million hectares of wetlands by the end of the decade.
Green group urges EU to create nature restoration funding mechanism in freshwater biodiversity push
The EU needs a dedicated funding mechanism to help member states prepare and implement their national restoration plans on nature and lead the world on freshwater biodiversity, green group Nature Conservancy urged as global negotiators are gathered for the three-day UN Water Conference in New York.
Monacan foundation, asset manager launch €100-mln marine protection fund
The Prince Albert II Foundation and Monaco Asset Management have launched a fund that aims to invest €100 million this decade in start-ups seeking to reduce ocean pollution and protect marine ecosystems.
UNEP backs gamers to help green the planet in 2023 event
The UN Environment Programme (UNEP) has partnered with a technology platform that aims to rally the global gaming industry to join forces to protect nature in a 2023 event focusing on wildlife.
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CONFERENCES
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
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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
Meddling with science – China, the US, Saudi Arabia, and Norway are among countries that significantly altered the IPCC document that will shape global climate policy for years to come, according to Earth Negotiations Bulletin, the only news organisation allowed to observe last week’s proceedings when 195 nations gathered to approve the summary of climate science findings over the last five years (read Carbon Pulse’s report on the outcome). Chinese negotiators successfully lobbied to delete a reference to exact reductions in the final summary for policymakers, moving it to an adjacent chart. Saudi Arabia “strongly opposed” the inclusion of a sentence saying the use of fossil fuels is the “root cause” of climate change and managed to whittle down to one reference the challenges faced by direct air capture technologies. The US opposed a request from India, Bolivia, and China to include a sentence that suggested transfers of technology would be one determinant of how quickly and deeply global emissions are cut. Norway forced a change on a section referring to the need for “deep, rapid, and sustained” emissions reductions starting this decade. The final wording stresses the need for just “strong” emissions reductions. (Bloomberg)
Talks ahead of talks – Spain and the IEA are to host a multi-stakeholder international climate and energy summit on Oct. 2 aimed at building a grand coalition to keep 1.5C within reach. Held in Madrid weeks before the December COP28 UN climate negotiations in Dubai, the event will focus on the urgency of accelerating the global clean energy transition, taking place during Spain’s six-month tenure as presidency holder of the Council of the EU. The summit aims to send a strong message to the Paris Agreement’s Global Stocktake process culminating at COP28.
Amazon-saving efforts – Norway has pledged its support for Brazil’s efforts to attract additional donor countries for the Amazon Fund that it helped set up to fight deforestation and spur sustainable development. The fund, launched in 2009, was frozen in 2019 by former far-right President Jair Bolsonaro. It was re-activated by the government of leftist President Luiz Inacio Lula da Silva in January. The Amazon Fund was set up with an initial donation of $1 bln from Norway. Germany contributed $300 mln. France and Spain have shown interest in contributing, while Britain is studying whether to contribute and the US signalled its intent to do so. (Reuters)
EMEA
Taxonomy taxiing – The EU will propose adding aircraft manufacturing and leasing to the bloc’s green taxonomy label for sustainable investments, if these activities meet strict criteria including having zero emissions or not adding to the global fleet and meeting certain CO2 limits, according to a draft seen by Bloomberg that also features rules for adding maritime and road transport. From 2030, passenger aircraft will have to use a minimum 10% share of sustainable aviation fuels, increasing by 2 percentage points each year. The commission also added rules for other transport sectors like road and maritime.
Looking ahead – Berlin’s energy watchdog has warned that companies and households will need to cut gas use further if Germany is to avoid an energy crunch next winter. Klaus Muller, head of the country’s Federal Network Agency, said Germany’s power crisis is not over and much depended on whether next winter would be colder than the last. “The danger of a gas shortage is still there,” he told the Financial Times. “It depends a lot on whether we continue to curb gas use and ensure diversified supplies into Germany. And there are risks.” These included China’s economic recovery, which was accelerating “more quickly than many predicted”, leading to a higher demand for gas that will have “consequences in terms of price”.
ASIA PACIFIC
No coking coal – BHP Group on Thursday signed an agreement with engineering and project management firm Hatch to design an electric smelting furnace pilot plant in Australia in an attempt to slash its GHG emissions to zero by 2050, Channel News Asia reports. The facility will help lower CO2 intensity in steel production using iron ore from the global miner’s Pilbara mines. The plant will be able to produce steel from iron ore using renewable electricity and hydrogen replacing coking coal. Last October, the mining giant teamed up with steelmaker ArcelorMittal and two others to test a new technology to reduce carbon emissions in steelmaking at two plants in Belgium and North America.
Biofuels bonanza – Ampol and ENEOS have announced the signing of an MoU to explore the production of advanced biofuels at the Lytton refinery in Brisbane, Australia, Ampol stated in a press release. The parties have also executed a separate MoU with the Queensland government and will continue to engage with the state as work progresses to discuss investment and project development as part of the Queensland Biofutures 10-Year roadmap. Ampol and ENEOS will jointly explore the feasibility of delivering an advanced biofuels manufacturing facility with the capacity to generate up to 500 mln litres of sustainable aviation fuel (SAF) and renewable diesel annually. Initial work will consider the use of agricultural, animal, and other waste feedstocks prevalent in the Queensland market and seek to leverage the use of existing refinery manufacturing and distribution infrastructure to produce biofuels for domestic use and for the export market where possible.
Ammonia announcement – SK Innovation invested an additional $50 mln in Amogy, a company specialising in ammonia-based hydrogen fuel cell (ammonia fuel cell) systems that SK had invested in last year, the company announced. The investment is to actively participate in efforts to build a global ammonia ecosystem for global carbon reduction, the release said. SK announced that it had participated in a Series B-1 investment of $139 mln recently raised by Amogy. Meanwhile, Amogy and MOL announced the signing of an MoU on the adoption of ammonia-to-power systems developed by Amogy for ships, and for the establishment of an ammonia supply chain, according to a joint press release.
Expect delays — The future New South Wales government may not shut down Australia’s largest coal-fired power station, Origin Energy’s Eraring, at its current scheduled closure date of 2025, RenewEconomy reports. The state heads to the polls this weekend, with NSW Labor leader Chris Minns, who remains the favourite to win, earlier this month flagged the possibility of buying up the black coal plant from its owner Origin Energy to keep in running beyond its planned closure date of Aug. 2025. Meanwhile, Coalition leader Dominic Perrottet told local media he was open to all options, including extending the coal plant’s life. The comments come amid speculation that Origin may delay the closure of at least one of Eraring’s four units. A spokesperson from the company simply stressed to RenewEconomy that the gentailer has made no changes to its decision to close Eraring in 2025, just as there have been no material changes to the market conditions that informed that decision.
AMERICAS
Coal’s collapse – For the first time, no coal-burning power plants in New England qualified for payments in the region’s annual electricity auction. New England’s last coal plant — the Merrimack power station in New Hampshire — failed to secure payments through a capacity auction this month, according to new data from regional grid operator ISO New England. The results reflect a changing energy mix, as nearly a quarter of the resources that did qualify for the auction were carbon-free, including offshore wind farms and battery storage facilities under development in New England, the data showed. Capacity auctions in New England are designed to ensure that electric utilities have sufficient power supplies to keep the lights on several years into the future. The recent auction covered the period of June 2026 through May 2027. The first capacity auction in the region was held in 2008, according to the grid operator. (Energywire)
Net zero LNG – Woodfibre LNG, a 2.1 Mt/yr project north of Vancouver, said Thursday it had developed a “tangible plan” to be net zero by the time it makes its first exports in 2027, 23 years ahead of Canada’s federal commitment to achieve net zero by 2050. Its Roadmap to Net Zero will build on the already low-emissions profile of the project, which will use electric compressors in the liquefaction process, and incorporate offsets drawn from two nearby nature-based offset projects. “This roadmap will see Woodfibre LNG be the first LNG export facility in the world to achieve net zero, and includes commitments to be net zero both through the construction stage of the project and during operations,” Woodfibre LNG said. Construction will begin in September, with first cargoes expected in 2027. The roadmap aligns with the BC government’s recently-released Energy Action Framework, which requires that proposed LNG facilities in or entering the environmental assessment process must develop and submit a credible plan to be net zero by 2030. (Natural Gas World)
VOLUNTARY
SAF partnership – Alaska Airlines on Thursday announced an agreement with Shell Aviation to expand the sustainable aviation fuel (SAF) market beyond a standard fuel supply agreement. The cross-industry collaboration brings together a world-class fuel supply chain and the fifth-largest domestic carrier to procure and use sustainable fuel, while working together to define and tackle what it will take to advance SAF technology, development, infrastructure, and investment. Details of the agreement include commitments to deepen understanding of the technology, infrastructure, carbon accounting systems, and public policy support needed to bring SAF to more markets, in greater quantities, and at a more sustainable long-term cost. The companies will put particular focus on enabling supply to the West Coast and alleviating fuelling infrastructure challenges in the Pacific Northwest. Shell Aviation will also supply up to 37.9 mln litres (10 mln gals) of neat SAF to Alaska Airlines at their hub in Los Angeles.
Carbon software seed funding – Alcove, a software startup that lets companies manage and track carbon credits, has raised $3 mln in seed funding. Some technology investors are willing to step in on early-stage rounds even amid a broader slowdown in funding for climate software companies. Seven Seven Six led the all-equity round but is not getting a board seat, said Alcove co-CEO Mariana Garza. XYZ Venture Capital and a Sequoia scout also participated in the round. Garza declined to share the company’s valuation. Alcove makes enterprise software that allows companies to track and catalogue carbon credits. Nashville-based clean energy company Clearloop is the startup’s first customer, co-CEO Marley Rafson told Axios. Its software was first created for credit suppliers — i.e. clean energy producers like Clearloop — but will eventually expand access to credit buyers, Garza said. (Axios)
Joining forces – CarbonChain, an AI-fuelled carbon accounting platform using granular data to provide end-to-end visibility into the carbon footprint of a company’s supply chain, on Thursday announced its partnership with ClearSky. The partnership enhances ClearSky’s corporate sustainability solutions and combines both companies’ market-leading expertise, which together covers commodities, supply chains, carbon footprinting, environmental finance, and carbon offsetting. This partnership comes amid increasing demand for low-carbon products and services, tightening carbon reporting and regulatory demands, and enables companies to strengthen their carbon reduction and procurement strategies, fulfill reporting demands, and ensure accurate assessment of offset purchases, the press release noted.
AND FINALLY…
Carbon-eating cement – Bloomberg profiles the US energy department’s incubator ARPA-E annual expo on experimental green technologies. Among more recent efforts is a bio-mining project for critical minerals, which uses engineered microbes that adsorb rare earth elements needed for renewables and batteries. Another is a process developed by the company Brimstone Energy to make carbon-negative cement using calcium silicate rock instead of carbon-heavy limestone, removing carbon from the air during the process.
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