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Voluntary offset standards welcome core carbon principles as necessary integrity “floor”
The two largest voluntary carbon credit issuing standards, Verra and Gold Standard, have welcomed the publication of the core carbon principles (CCPs) by the Integrity Council for the Voluntary Carbon Market (IC-VCM) released Thursday, as providing a crucial “floor of competence” for climate projects.
ANALYSIS: Experts underline resilience of carbon markets despite financial turbulence
Both compliance markets and voluntary carbon markets are sufficiently resilient to withstand current macroeconomic headwinds, with experts underlining that bearish impacts of the unwinding banking crisis and rising inflation would be short-term, a conference heard on Wednesday.
Voluntary carbon group ICROA unveils accreditation, governance shake-up to address market tribulations
Carbon offset trade group ICROA on Thursday announced it has remodelled its accreditation programme as part of a wider internal overhaul and rebrand made in response to the voluntary carbon market’s rapid growth and mounting integrity concerns.
Verra offsets become most expensive among major carbon registries after fee increases
Carbon standards body Verra on Thursday scrapped its tiered fee structure for a higher flat issuance rate per offset, while also raising non-issuance related project levies and introducing new charges for verification and validation bodies (VVBs).
ACX teams up with blockchain tech firm in carbon futures exchange launch
ACX Group has formed a partnership with a blockchain technology provider to trade forward-financed carbon credits, the Singapore-based carbon exchange announced on Thursday.
Rimba Raya resolution boosts Canadian VER investor’s 2023 outlook
A Toronto-based VER investor is confident the recent validation of the Indonesian Rimba Raya REDD+ project and increasing corporate offset demand will improve its growth prospects this year, the firm said in a financial results call on Thursday, even as it continues to post higher net losses on its books.
Start-up tech firm raises €46 mln in Series B funding for soil carbon platform
A start up tech company has raised €46 million in Series B funding, a year after raising €20 mln in series A funding, for its soil carbon platform.
Vancouver-based developer launches new carbon trading platform
A Canadian project developer has announced the beta launch on Thursday of its carbon credit trading platform, a move to offer a more resilient and flexible infrastructure for market participants to list, buy, sell, and verify voluntary carbon offsets.
EU ETS likely to escape position limits, minimum holding period in MiFID, MiFIR shake-up -experts
A major shake-up of rules governing derivatives trade in EU Allowances appears to have been defeated, but stakeholders are still concerned at what they say is a growing trend towards political interference in the bloc’s flagship climate programme.
UK GHG output resumes long-term downtrend in 2022 thanks to warmer weather, heating cuts
UK greenhouse gas output resumed its long-term downtrend in 2022, the government confirmed Thursday, as a drop in heating fuel use helped limit the post-pandemic rebound in emissions.
EU Council and Parliament strike compromise on higher renewables target
EU legislators reached a provisional political agreement on Thursday to raise the share of renewable energy in the block’s overall energy consumption to 42.5% by 2030, in a compromise deal that would mean an additional 2.5% indicative top-up allowing the share to reach 45%.
EU lawmakers vote to push for steeper F-gas phase-out
The EU will need to phase out fluorinated greenhouse gases (F-gases) at a steeper rate from 2039 to 2050, according to the European Parliament vote on Thursday.
Euro Markets: EUAs edge higher for third day, testing resistance amid light trading
European carbon was relatively quiet on Thursday, with the benchmark futures rising for a third day amid light volume and in one of its narrowest ranges of the year to date, while energy markets were broadly firmer even as Europe’s gas reserves were predicted to reach their 2023 goal early.
UK unveils first CCS, hydrogen support and consults on carbon leakage
UK forestry fund buys three more projects for £10 million
A UK forestry fund has this month added three new nature-based projects to its portfolio from activities across Scotland and Wales, the firm announced Thursday.
ANALYSIS: Australia’s Safeguard Mechanism passes the Senate, but experts warn much more will need to be done
The Australian Parliament on Thursday passed the strengthened Safeguard Mechanism, providing policy certainty to the country’s industrial sector and carbon market, however experts have emphasised the government’s work to achieve its climate goals have only just begun.
NZ Market: NZU price drops to 18-mth low as confidence in market “wafer thin”
New Zealand’s carbon allowance price on Thursday fell by 10% to an 18-month low, as the usual end of financial year doldrums have been compounded by cratering confidence in the market.
WCI Markets: CCAs tick up as macro correlation holds, WCAs head towards $60
California Carbon Allowance (CCA) prices rose in tandem with a more supportive macroeconomic environment this week as recent volatility calmed, while Washington Carbon Allowance (WCA) values set new record highs as compliance entities were heard buying.
California carbon market registration backlog nearly quadruples over past six months
The number of entities awaiting approval by California regulator ARB to take delivery of allowances or offsets in the state’s cap-and-trade programme jumped further in Q1, according to Carbon Pulse analysis of state data, with the few new participants coming from financial players.
Another US court suspends EPA denial of RFS compliance relief, pending review
A US federal court on Thursday issued a stay on the EPA’s move to reject small refiners’ request for compliance relief under the Renewable Fuel Standard (RFS), building on several other moves by appellate judges this year.
BIODIVERSITY (FREE TO READ)
Biodiversity Pulse Weekly: Thursday March 30, 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).
eDNA growing as key tool to support biodiversity credit market
Project developers are already turning to environmental DNA (eDNA) for data they need to generate biodiversity credits, supported by today’s availability of easy-to-use kits and tailored analytical offerings.
Scottish Widows steps up fight against biodiversity loss, climate change with £1.4 bln in new funds
Pension fund Scottish Widows this week rolled out four new funds totalling £1.4 billion that will invest in companies seeking to help resolve nature and climate change issues.
VCM Integrity Council publishes core carbon principles, programme assessment framework, in next step of offset quality drive
The Integrity Council for the Voluntary Carbon Market (IC-VCM) on Thursday published its core carbon principles, programme assessment framework, and list of additional attributes, as it moves closer in establishing its stamp of quality assurance in the market.
ICAO Council greenlights two offset programmes for next CORSIA phase, sets vintage range
Two existing CORSIA programmes have received re-eligibility from the ICAO Council to supply carbon credits under the next phase of the global aviation offset scheme, as the UN body also advanced the vintage range for units during this period, according to a recent decision.
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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
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
Making friends – Germany has signed agreements to intensify its cooperation on climate and energy with Chile and Uruguay, with strong focus on decarbonising emission-intensive industry, Clean Energy Wire reports. At the Berlin Energy Transition Dialogue, economy and climate minister Robert Habeck signed an MoU with his Chilean counterpart, Diego Pardow, to establish a task force to cooperate together towards a climate neutral industry. The group is set to develop recommendations for linking energy, water use and climate protection, “including the use of carbon pricing instruments and the emissions trading system, as well as modelling the impact of climate change on long-term energy planning,” the energy ministry (BMWK) wrote in a media release.
BECCS in doubt – Drax, the owner of the UK’s biggest power station, is scrambling to secure a lifeline for its £2 bln carbon capture biomass project after it was rejected by ministers in an initial funding round, reports the Daily Telegraph. Drax failed to get so-called Track-1 status from Grant Shapps, the Energy Secretary, which would have granted subsidies for its biomass project with carbon capture and storage. However, Drax said it has been invited to enter “formal bilateral discussions” with the UK Government immediately. The UK Government has committed to publish its biomass strategy by the end of June, which will set out how the technology could be deployed. In the House of Commons on Thursday, energy minister Graham Stuart insisted that Drax and its carbon capture technology “are critically important to this country”. Drax had said it was prepared to invest £2 billion to fit the technology – known as Bioenergy with Carbon Capture and Storage or BECCS – to some of the units at its Selby plant in North Yorkshire, supporting as many as 10,000 jobs.
Call time – The European Commission has received 239 applications from innovative cleantech projects in response to the third call for large-scale projects under the bloc’s Innovation Fund, it said Wednesday. The proposals featured 25 eligible countries represented and covered four technology areas – general decarbonisation (98), electrification in industry and hydrogen (71), cleantech manufacturing (39), and mid-sized pilots (31). They will now compete for a total budget of €3 bln, which will be raised from auctioning allowances under the EU ETS. “Taken together, the proposed projects would achieve an expected reduction of greenhouse gas emissions of 2.4 billion tonnes of CO2 equivalent. The total funding requested amounts to €18 bln, which represents around 6 times the budget available,” the Commission said. The number of applications in the main Innovation Fund categories are: 42 for renewable energy, 26 for energy storage, and 171 for energy-intensive industries, including carbon capture, use, and storage. The next step is to check the admissibility and eligibility of the submitted applications. Proposals that pass this check will be evaluated by independent external experts based on their potential to avoid greenhouse gas emissions, their innovation, maturity, potential for scaling up, and cost efficiency. The Commission said it will inform the applicants and publish the results of the evaluation in the second half of July 2023, with grants to be awarded by the end of this year. Rejected proposals with potential to improve their maturity may be offered Project Development Assistance by the European Investment Bank. The third call for small-scale projects, amounting to a total budget of €100 mln, launched on Thursday.
Results are in – The European Central Bank (ECB) has published the results of an inaugural climate stress test conducted on its own balance sheet and those of the 20 EU central banks that use the euro. According to Responsible Investor, these exercises have become a permanent fixture in the ECB’s annual supervisory calendar since it conducted the first economy-wide stress test in 2021, followed by last year’s exercise which covered 104 major EU banks, but this is the first time that the bank has put itself to the test. In its most recent exercise, the ECB found that the Eurosystem’s corporate bond holdings have a similar degree of climate risk compared to the outstanding market for bonds that meet the central banks’ eligibility criteria for purchases. The ECB began introducing a so-called “green tilt” to bond purchases last October – which fell beyond the cut-off date for the stress test in June – and so “this outcome was expected”, said the supervisor. Other Eurosystem assets, namely covered bonds and asset-backed securities (ABS), which often employ real estate as collateral or to generate cash, showed an elevated vulnerability under scenarios where no climate policies are introduced resulting in a failed transition, or a Europe-wide flood. The methodology used in the exercise is in line with the previous two climate stress tests conducted by the ECB and is the second vintage to be produced by global green central banking collective the Network for Greening the Financial System (NGFS). The strength of climate policies is represented by a hypothetical price on carbon over a 30-year period. ECB staff included two additional short-term scenarios: a flood risk scenario, and a disorderly scenario that incorporates sharp increases in carbon prices. The completion of the exercise delivers on a key plank of the ECB’s 2021 strategy to integrate climate change into its supervisory activities. The ECB has already made climate a factor in its bond purchases, collateral framework, bank regulatory capital and portfolio disclosures. In related news, the central banks of Germany, Portugal, Estonia, Ireland, Greece, Cyprus, Portugal, Finland, Latvia, Malta, the Netherlands, Slovenia, Spain and Slovakia have published TCFD-aligned reports of their investment portfolios – many for the first time.
Swede and sour – Sweden has increased its GHG emissions while other EU member states are reducing them since the new right-wing government, in office for five months, changed its tack on climate policy, Euractiv reports. Since coming to power late last year, the centre-right Swedish government has been criticised for the results of its environmental policy, which the Swedish Climate Policy Council’s annual assessment says is undoing important progress on climate action. According to the Council, this is the first time in two decades that policy changes have led to increased greenhouse gas emissions. But the Swedish government is making long-term and holistic plans that are not necessarily reflected in the Climate Policy Council’s assessment, said Environment Minister Romina Pourmokhtari of the Liberal party/Renew Europe. “Climate change is a critical issue that requires a holistic approach at local, national and global levels. The measures that we decide on during this mandate will be long-term investments that lead to reduced emissions,” she said on Wednesday, adding that Sweden will reach the 2045 net-zero emissions goal. After the general elections last September, the centre-right Moderates, the Christian Democrats, and the Liberals entered a coalition supported by the far-right Sweden Democrats (SD). The SD are not formally part of the government though, while they requested their immigration policy to be applied, they also have a say in many areas, including EU energy and industry policy. The ruling centre-right coalition has since stopped the previous government’s investments in high-speed railway, scrapped the financial incentive to buy fossil-free cars, and cut the budget for the protection of nature. For the current opposition, the Council’s report is yet more proof of the far-right’s influence on the Swedish government as the supporting far-right Sweden Democrats (SD) party is considered to have a history of denying climate change, with its leader Jimmie Akesson declaring on TV that there was no scientific proof of a climate crisis, which he called a “new religion”.
Pension pull out – Two of Australia’s largest pension funds pulled money out of Chinese stocks and boosted positions in the country’s fossil fuel sector in the final six months of 2022, Reuters reports. The value of China and Hong Kong listed equities at AustralianSuper and Aware Super, which collectively manage about A$400 bln ($267.24 bln), fell by about a quarter respectively, according to mandatory portfolio disclosures published on fund websites and analysed by Reuters. Total share counts also fell. Both funds collectively increased their shareholdings in Woodside Energy Group, Australia’s largest independent natural gas producer, by roughly 14 mln shares. With offices in London and New York and growing teams of stock pickers, Australia’s A$2.3 trillion pension sector is muscling onto the world stage and the disclosures reveal how the country’s largest investors are positioning on China and transition to renewable energy. The disclosures come just days after activist investors accused the big Australian pension funds of failing to push fossil fuel producers like Woodside hard enough to decarbonise. More than two years after selling the stock from its actively managed portfolio, AustralianSuper grew the number of shares in thermal coal producer Whitehaven Coal by about 40%, for a total position of A$21 mln via an external mandate with IFM Investors.
Sinister consequences — The head of Japan’s biggest oil and gas producer, Inpex, has warned Australia risks undermining global security through a decision to “quietly quit” the international gas trade, the ABC reports. Inpex CEO Takyuki Ueda gave an extraordinary speech to a federal parliamentary event on Thursday, suggesting Japan had been rattled by government interventions in Australia’s gas industry. The Albanese government legislated to cap coal and gas prices for 12 months late last year, while requiring produced to abide by “reasonable pricing” guidelines indefinitely, in response to soaring domestic gas prices as a result of Russia’s invasion of Ukraine, and allegations of price gouging by gas companies. Inpex operates the A$60 bln Ichthys LNG development off Australia’s north west coast. Ueda said while Japan sympathised with Australian government concerns last year over the state of domestic markets, the North Asian country was worried about any potential ripples that could jeopardise its own energy security. He added that Australia’s “quiet quitting” of the LNG business has potentially very sinister consequences, namely that customers would turn to countries including Russia, China, and Iran for LNG. Australia currently vies with the US and Qatar for the position of the world’s biggest LNG exporter.
Lowering energy costs – US House Republicans passed HR-1, the Lower Energy Costs Act, by a 225-204 vote on Thursday, the Associated Press reported. The legislation would increase domestic oil, gas, and coal production and ease permitting restrictions that delay pipelines, refineries, and other projects. The legislation also seeks to boost production of critical minerals such as lithium, nickel, and cobalt. Senate majority leader Chuck Schumer (D) called the bill “dead on arrival”, while President Joe Biden has threatened to veto the bill, the report noted. The White House has said that the bill would roll back investments in clean energy and “pad oil and gas company profits”.
Pillars of (wind) power – The US Department of Energy (DOE) announced its Offshore Wind Energy Strategy on Wednesday based on what the department referred to as four “pillars”. The NOW pillar involved lowering costs to $51/MWh by 2030 from $73 by developing a domestic supply chain; the FORWARD pillar would strive to reduce floating offshore wind cost by over 70% to $45/MWh by 2035 by establishing US leadership in floating offshore wind design and manufacturing; the CONNECT pillar would enable reliable and resilient transmission solutions for large-scale offshore wind deployment; and the TRANSFORM pillar looks to expand offshore wind co-generation technologies for widespread electrification and decarbonization. The strategy is part of the administration’s efforts to deploy 30 GW of offshore wind energy by 2030 and set the nation on a pathway to 110 GW by 2050.
Meanwhile back at the farm – A private member’s bill that would create specific carve-outs for farmers in Canada’s carbon pricing scheme has passed in the House of Commons, The Canadian Press reports. The bill would exempt farmers from paying for emissions from natural gas and propane they use for certain activities performed on their farms, such as drying grain, preparing feed, irrigating and heating barns. It passed with the support of Conservative, NDP, Bloc Quebecois and Green Party MPs, with a few Liberals joining the opposition parties to vote in favour. The private member’s bill introduced by Conservative MP Ben Lobb last month, which would not exempt farmers from the carbon price for activities performed off-site, will now be debated in the Senate. Farmer groups have said they are facing rising production costs, and the proposed law would give them financial relief from those pressures. Campaigners Environmental Defence warned that exempting these high-emitting farming activities from carbon pricing will only further encourage other sectors to demand similar treatment, thereby weakening the government’s policy as well as low-carbon investment signals.
WA to go – The Washington Department of Ecology on Thursday announced that due to unforeseen challenges with the technology development for the Washington Fuels Reporting System (WFRS), and the development of the supporting documents, the reporting period for Q1 of the Clean Fuel Standard will both begin and end later than originally scheduled. Ecology currently estimates the delay to be approximately two weeks, and will communicate directly to market participants when it is ready to open the reporting period, the agency said in an email.
Treasure Trove – Trove Research is launching a survey to track investment in the global carbon market pre-pipeline activity in an attempt to shed light on how much new investment is being poured in new carbon projects and to increase transparency around the carbon markets in general. Projects that generate carbon credits have come under scrutiny in recent years with criticisms often addressed at older projects created under outdated standards or more relaxed approaches to verification. The survey will gather information on how much capital has been raised and will likely be raised in the future, allocation of capital to activities and types of projects, regions, benefits of the projects and future off-take arrangements for carbon credit sales. All responses must be submitted and received by Apr. 28, 2023.
Space is the place – Everland, manager of the biggest portfolio of REDD+ forest projects in the world, on Thursday named Space Intelligence as its main data partner. In a press release, Everland said it will use the state-of-the-art technology from Space Intelligence to build a comprehensive view of changes across three continents in land cover across a portfolio of site-based REDD+ projects and their surrounding regions. Space Intelligence is currently providing mapping services for 10 projects across five countries including Cambodia, Kenya, the Democratic Republic of the Congo, Colombia, and Peru.
Takes one to know one – Ontario Premier Doug Ford dismissed Canadian Environment Minister Steven Guilbeault as “a real piece of work” over his claim the province has no plan to fight climate change. In a rare display of tension between Queen’s Park and Ottawa, Ford blasted Guilbeault on Thursday after the federal minister’s criticism of the province’s long-standing opposition to carbon pricing. “Oh, boy, that guy’s a real piece of work, isn’t he?” the premier told reporters in Hamilton. On Wednesday in Ottawa, Guilbeault attacked Ford for saying federal carbon pricing policies were hurting families. “A family of four in Ontario will get almost C$1,000 back from the federal carbon pricing system and I find it incredibly rich coming from a premier who has no plan to fight climate change,” the minister said. Ford abruptly blew up Ontario’s WCI-linked cap-and-trade programme shortly after winning the province’s 2018 election, costing companies tens of millions of dollars they were unable to recover through subsequent legislation, which also shielded the premier’s Progressive Conservative government from legal liability over the revocation. The Ontario government later unsuccessfully sued Ottawa over its national carbon pricing legislation.
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