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TOP STORY

INTERVIEW: Ecuador’s return to the carbon market hinges on forthcoming legislative vote

A legislative vote is slated to take place in Ecuador in the coming weeks, with the potential to greenlight carbon market development in the heavily-forested South American country after years of inactivity.

EMEA

EU nations approve ETS-related bills in final lawmaking stage, agree provisional sustainable aviation fuel mandate with MEPs

EU member states on Tuesday gave their approval to a series of provisional deals aiming to put shipping, buildings and road transport under carbon pricing, impose a carbon border adjustment mechanism (CBAM), and launch a Social Climate Fund, while also agreeing a draft mandate with MEPs to boost and govern the use of sustainable aviation fuels (SAFs).

Euro Markets: EUAs tumble to three-month low amid “relentless” selling as Fit for 55 reforms approved

EUA prices fell for a ninth time in the last ten sessions on Tuesday, settling at their lowest in three months as sentiment continued to weaken amid “relentless selling pressure”, even as ministers formally approved ETS reforms and the launch of a carbon border adjustment mechanism.

EU’s REPowerEU initiative to cut 20% off households’ heating bills -study

EU household heating bills could be 20% lighter compared to a business as usual scenario in 2030, according to a cross-stakeholder-commissioned study published on Wednesday that examines the consequences of the bloc achieving its energy security ambitions set out in its REPowerEU strategy.

Irish minister calls for rewetting peatlands to be included in EU carbon farming definition

The Irish minister for agriculture has called for the rewetting of peatlands to be included in the European Commission’s definition of carbon farming, during a meeting in Luxembourg on Tuesday.

Green group warns about lack of coordination on EU carbon removals efforts as new lobby group forms

The EU is advancing on incentivising and regulating carbon removals as part of its efforts to reach net zero emissions by mid-century, an NGO said on Tuesday as it unveiled its policy tracker tool, adding a warning that the lack of coordinated vision and uneven efforts could jeopardise progress.

VOLUNTARY

REDD price slump attracts flurry of trades for older vintage credits

The slump in REDD avoided deforestation prices triggered a flurry of trades on Tuesday for older vintages of some well-known projects in the sector, brokers reported.

Carbon accounting platform for supply chains raises $10 million in funding

A carbon accounting platform for supply chains is set for quick expansion after raising $10 million in series A funding, it announced Tuesday.

US-based carbon offset firm attracts new $5 million investment

A US-based carbon offset firm has secured a $5 million investment, it announced Tuesday, bringing it closer to its fundraising goal.

ASIA PACIFIC

Major Chinese securities firm inks 100 mln yuan CCER deal with forestry firm

One of China’s biggest securities firms has signed a letter of intent with a Shanghai-listed forestry and paper company to secure domestically-issued CCERs worth no less than 100 million yuan ($14.5 mln), aiming to make a preemptive move ahead of the relaunch of the national voluntary scheme.

China should open for secondary spot power market trading -IEA

China should consider implementing a secondary model within its national spot power market that interfaces with the existing local markets to accelerate the decarbonisation of the country’s power sector, according to the International Energy Agency (IEA).

CIX teams up with AI-powered decarbonisation platform

Singapore-based carbon exchange Climate Impact X (CIX) has partnered with an AI-driven decarbonisation platform that will provide access to voluntary buyers with net zero targets across several Asia-Pacific countries.

AMERICAS

Washington outlines free allowance distribution for electric utilities through 2026

The Washington Department of Ecology (ECY) on Monday said it will distribute over 40 million free allowances to electrical utilities between 2023 and 2025 to mitigate the compliance cost exposure from the cap-and-trade system, while final allowance totals are still to be determined for 2026.

Canadian Clean Fuel Regulations set to regulate 20 fossil fuel suppliers

Some 20 producers and importers of gasoline and diesel are among the transportation fuel suppliers initially registered under Canada’s impending Clean Fuel Regulations (CFR), according to government data published Tuesday.

INTERNATIONAL

Study backs argument for CBAM revenue recycling to vulnerable trading partners

The EU’s carbon border adjustment mechanism (CBAM) will have a disproportionate effect on low- and middle-income countries, according to a study published this week that supports the argument for revenues collected at the border to be recycled back to vulnerable trading partners.

Green hydrogen project pipeline accelerates in reaction to last year’s gas price hike -analysts

The global low-carbon project pipeline has accelerated in the past year to reach over 400 projects in the first quarter of 2023, driven by green hydrogen projects as last year’s elevated gas prices have taken the shine off prospects for fossil-fuel based projects equipped with CCS, analysts told a webinar on Tuesday.

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CONFERENCES

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. The confirmed attendee list is approaching 250 people. Purchase your tickets now, before they sell out!

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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

Now we’re talking – Chinese climate envoy Xie Zhenhua has invited his American counterpart John Kerry to China, boosting hopes that the world’s two biggest emitters can renew their cooperation on climate change. The two veteran diplomats spoke virtually last week as the US hosted the Major Economies Forum on climate. During this talk, Xie issued an invitation to Kerry, the former US secretary of state told Foreign Policy magazine. While US President Joe Biden’s government has tried to keep climate talks separate to the broader US-China relationship, issues such as the independence of Taiwan and the recent Chinese spy balloon scandal have prevented the two sides from engaging meaningfully on climate change. Health issues have also hindered progress, with Kerry telling Foreign Policy magazine that Xie suffered “something of a stroke” in January which prevented him from working for “a month and a half or so”. Xie has not made any foreign trips since and his participation in November’s COP28 climate talks is in doubt. (Climate Home)

Be Kerry careful – Relying on technology to remove carbon dioxide from the atmosphere is “dangerous” and a cause for “alarm”, John Kerry has warned. The US special presidential envoy for climate said in an interview with the Guardian that new technologies may not prevent the world from passing “tipping points”, key temperature thresholds that, once passed, could trigger a cascade of unstoppable physical effects. Instead, he called on governments to deploy renewable energy faster, along with related technologies such as electric vehicles. These are already available for widespread deployment, and could prevent the world from reaching the high levels of CO2 in the atmosphere that would cause temperatures to breach the threshold of 1.5C above pre-industrial levels.

Venturing out to 2050 – The Venture Climate Alliance (VCA), a partnership of 23 global venture capital (VC) firms across the US and Europe launched on Tuesday to develop tools and best practices for collecting, interpreting, and reporting carbon emissions, and climate impact data towards achieving net zero or negative emissions by 2050 as part of their membership commitment. Member VCs would work together to provide tools and guidance to help overcome barriers associated with aligning early-stage investments with net zero goals, the press release stated. Initially, VCs would inventory their Scope 1–3 carbon footprint for their own operations by 2030 or sooner, and encourage their portfolio companies to set net zero targets by 2050 or sooner. Membership is open to any VC firm or division of a larger firm engaged primarily in venture investing that agrees to fulfill VCA’s commitments and to actively contribute as appropriate. The VCA’s founding members are Prelude Ventures, Capricorn Investment Group, DCVC, Energy Impact Partners, Galvanize Climate Solutions, S2G Ventures, Union Square Ventures, Tiger Global, World Fund and 2150; along with Obvious Ventures, Congruent Ventures, Valo Ventures, Clean Energy Ventures, Fifth Wall, Overture Ventures, Blackhorn Ventures, Spring Lane Capital, Azolla Ventures, Systemiq Capital, The Westly Group, Innovation Endeavors, and ReGen Ventures. It is supported by Great Circle Capital Advisors, a climate finance advisory firm.

EMEA

F-gases – Co-legislators started their negotiations to finalise a bill to tackle fluorinated gases and ozone depleting substances with the first trilogue meeting on Tuesday. “Perhaps a deal with the Swedish presidency” and “deadline at the end of June”, wrote the Greens’ negotiator Bas Eickhout on Twitter. Read Carbon Pulse’s analysis on how EU efforts to banish F-gases clash with clean energy plans.

Shell shuffle – Oil major Shell has decided to pull out of the BP-led Northern Endurance Partnership project to transport captured carbon to offshore storage sites in northeast England. NEP is aiming to be part of the East Coast Cluster, one of two CCS ventures fast-tracked for UK government funding. Shell said it will focus on the Acorn CCS project in Scotland, of which it is the technical developer. Britain’s National Grid has already NEP. (Reuters)

French duplicity – Officially, France has said it supports more ambitious targets for reducing emissions from commercial traffic at sea, a more polluting sector than air transport, yet in the corridors of the EU, it has sought to weaken the IMO’s climate plan for maritime transport in order to protect its industry, according to an investigative report from French site Mediapart. Progress at the recent IMO summit on international 2030 and 2040 targets for the sector broke down, which the news outlet claims was due in part to French lobbying, as well as from several other capitals.

Blown off course – European efforts to rapidly scale-up offshore wind farms to help cut dependence on Russian natural gas are falling short as developers struggle to deliver projects, Bloomberg reports. Significant changes in how governments offer new developments as well as incentives for hydrogen production are crucial to get Europe on track to reach its renewable power goals, which are key to the EU’s climate and energy security plans, Rasmus Errboe, head of Europe for Orsted, told the outlet. The prognosis comes after European leaders gathered in Belgium on Monday to promote the promise of the North Sea in Europe’s low-carbon future, targeting 300 GW by 2050.

Iberian electricity – Already existing Spanish and Portuguese measures aimed at reducing the wholesale electricity prices will last until the end of the year, thanks to an amendment officially approved by the EU Commission on Tuesday.  The aid, lowering the input costs of fossil fuel-fired power stations, was approved in June 2022 and set to expire on May 31 this year. However, Spain and Portugal notified to the Commission their intention to prolong the original measure until December 31 with some modifications: the price cap trajectory would “provide a smooth and predictable phase-out, converging with expected gas market prices by the end of 2023”, buyers in the wholesale electricity market would be exempted from paying the adjustment cost between June 1 and December 31, for those volumes of their electricity purchases for which they have entered into contracts for electricity supply at a fixed price prior to March 7, and final consumer are exempted from paying the adjustment cost from May 1 to December 31 for those volumes of their electricity purchases for which they have concluded contracts for financial hedging of their electricity price risks prior to March 7. The budget of the modified measure will ultimately depend on whether the mechanism is activated until the end of 2023, that is on whether the price cap will be below the gas market prices.

Fund facts – Germany is facing a shortfall of about €12 bln ($13.2 bln) in its Climate and Transformation Fund (KTF) meant to help green the economy, as earmarked funds fall below expected costs through 2026, Bloomberg reported. The fund was set up last year outside the regular budget to provide subsidies for programmes such as renovating buildings, switching to e-mobility, clean manufacturing, expanding renewable energies and improving energy efficiency. The fund has received about €60 bln of unused pandemic aid, and also receives revenue from the EU ETS allowance auctions and domestic carbon pricing, with the latter coming in short of projections after a planned increase to the carbon price on heating and fuels was postponed. Subsidies to help replace fossil-fuel heating systems could add an additional €15 billion in costs, as the ruling coalition agreed last week to ban new gas- and oil-fired heaters in Germany from next year. Funding challenges are likely to widen the gap to achieving the country’s target to reduce emissions by 65% by 2030 compared to 1990 levels. (Bloomberg)

Joint EU gas purchasing commences – The European Commission launched its first call for the joint purchasing of gas at EU level on Tuesday. This is intended for the EU to prepare for next winter by refilling its gas storage and to negotiate better prices with international suppliers. The companies required aggregated volumes will be put out to tender on the global market. The first purchase agreements are expected before the summer.

Green day in court – The UK’s High Court today has granted Greenpeace permission to proceed with a judicial review of the government’s decision to launch a new licensing oil and gas round, the campaigners said. The government’s move was made without taking into account the environmental effects of consuming the fossils fuels that are to be extracted, despite this amounting to more than 80% of the total emissions generated from the new licences.

AMERICAS

World #2 – Canada’s green energy subsidies announced in the 2023 federal budget would raise renewable energy project values by over 50% over their lifetime, positioning Canada second only to the US in renewable energy development, research firm Rystad Energy said in a research note on Tuesday. Canada’s new renewable energy investment tax credit (ITC) offers a 30% tax write-off for renewable technologies deployed through 2034. The ITC drops to 15% in 2034, and is phased out after 2034. A 250 MW project in Canada would now be valued at $202 mln after tax, up from $131 mln before the ITC, the researchers stated. Rystad expects Canada’s share of renewable power generation to hit 97% by 2050 mostly from additional solar capacity, up from an 83% share currently, powered by renewable and nuclear sources. The oil and gas province of Alberta has emerged as a leader in solar and wind development, with Rystad analysts forecasting the region to pass 20 GW of installed renewable capacity by 2030. Green hydrogen projects are slated to receive 40% tax credits for developments emitting less than 0.75 kgCO2E/kg of clean hydrogen. Gray or blue hydrogen projects could see 5% to 25% ITC, depending on labor conditions. Furthermore, the government will provide a 30% tax credit to incentivise investment in machinery and equipment used to manufacture clean energy projects, including storage equipment and recycling of critical materials used in electric vehicles (EVs) and batteries, the research note specified.

Another lawsuit – In 2020, the Kichwa community of Puerto Franco and the Ethnic Council of the Kichwa Peoples of the Amazon (CEPKA) filed a lawsuit against the Peruvian Government and the Cordillera Azul National Park for dispossession of their territory. The park’s REDD project has sold over 30 mln carbon credits for more than $80.5 mln, reportedly without consultation or benefit to the Indigenous Kichwa community. According to REDD Monitor, on Mar. 22, 2023 the court ordered the titling process for the traditionally occupied territory of the Kichwa community, resizing the Permanent Production Forest, declaring forestry concessions null and void, and initiating a free and informed consultation for the national park’s creation. The ruling is said to ensure the Kichwa communities will have a say in the park’s management and receive long-overdue benefits from the REDD project. However, the court ruling is understood to avoid impacting fossil fuel corporations like Shell and TotalEnergies that have bought 87% of the carbon credits. An analysis released by independent experts last month raised doubts whether the Cordillera Azul project has delivered on its promise to counterbalance emissions by big oil firms.  As well, the investigation led by The Associated Press also found that according to satellite analysis, tree loss in the area has more than doubled.

Restoration revenue – The California Department of Forestry and Fire Protection (CAL FIRE) awarded $142 mln in funding from the state’s cap-and-trade programme to 27 grants across 75,000 acres (30,351 ha) in restoration and preservation of the state’s forests, a local outlet reported Tuesday. About $7 mln will fund the fourth phase of landscape restoration of 3,000 acres within the 2013 Rim Fire area, where over 257,000 acres had burned and 90,000 acres had suffered fire damage. Additionally, nearly $7 mln will cover the Upper Mokelumne River Watershed Authority to conduct fuel breaks, hand thinning, and prescribed burns in Amador and El Dorado counties. (myMotherLode.com)

Treevolution – Forests are evolving to adapt to warmer weather caused by climate change, but not fast enough to avoid fires, infestation, or death from maladaptation, according to a research paper from the Proceedings of the National Academy of Sciences journal published Monday. Western US forests are undergoing thermophilisation, which adapts them to a warmer climate, but were being outpaced by the warming planet tenfold. The evolution of forests to handle warmer weather may have major implications down the road, as current forested areas may only be able to support grassland in the future.  (Bloomberg)

Oklahoma! – US producer CF Industries and NextEra Energy Resources announced a memorandum of understanding (MoU) for a joint venture to develop a zero-carbon-intensity hydrogen project at CF Industries’ Verdigris complex in Oklahoma, ICIS reports. The firms said the proposed project was included in the funding application submitted to the US Department of Energy (DOE) this month by the HALO Hydrogen Hub, a three-state effort established by Arkansas, Louisiana, and Oklahoma to compete for funding from the DOE’s regional clean hydrogen hub programme. CF Industries and NextEra Energy Resources anticipate that support for the project from the DOE programme will be a key aspect of their evaluation process. A final investment decision has not been made for this project. The proposed project envisions a jointly owned 100 MW electrolysis plant at the Verdigris Complex that would be powered by a dedicated 450 MW renewable energy facility developed by NextEra Energy Resources. CF Industries would be the sole offtaker of 100% of the zero-carbon green hydrogen output from the site’s electrolysers.

ASIA PACIFIC

Green ports – The Maritime and Port Authority of Singapore (MPA), Port of Los Angeles (POLA), and Port of Long Beach (POLB), with the support of C40 Cities, signed a memorandum of understanding (MoU) to establish a green and digital shipping corridor between Singapore and the San Pedro Bay port complex to support the decarbonisation of the maritime industry and improve efficiencies through digitalisation, C40 Cities, a non-profit, stated in a press release. As leading global hub ports, Singapore, Los Angeles, and Long Beach are vital nodes on the trans-Pacific shipping lane and key stakeholders in the maritime sector’s green transition. Ahead of the revision of the International Maritime Organization (IMO)’s Initial Strategy for the Reduction of Greenhouse Gas (GHG) Emissions from Ships in July 2023, the three ports will come together with C40 and other stakeholders in the maritime and energy value chains, to jointly accelerate the decarbonisation of the maritime industry in line with the goals of IMO, and Singapore’s and the United States’ respective Nationally Determined Contributions (NDCs).

Awareness is key – South Korea will promote the environmental labelling certification system and publish a guidebook to raise awareness of eco-friendly products in the future, the environment ministry said on Monday in response to questions raised in recent media reports. Out of 4,558 cases of products involved in greenwashing in 2022, only 4 cases (0.08%) were ordered to be corrected, and there is a need to improve the system for providing eco-friendly information, given the lack of consumer awareness, according to a report by Seoul-based TV channel JTBC. “For labelling and advertising violations caused by negligence, education and awareness improvement are given priority over punishment … Most companies recognised and corrected their violations during the investigation stage, resulting in only four actual orders,” the ministry said in a statement. Despite that, the government is also planning to increase fines and strengthen surveillance and monitoring, considering the recent surge in greenwashing violations, according to the ministry.

VOLUNTARY

Expanding I-REC – Xpansiv is launching trading in renewable energy certificates from the International REC Standard (I-REC) and the Evident registry on its CBL spot exchange , it announced Tuesday. The move follows last Wednesday’s launch of trading in Australian Carbon Credit Unit (ACCU) on the exchange. Xpansiv plans to list a variety of I-REC products based on host country and project type and fully integrate the Evident Registry, where I-REC renewable energy products are issued and managed, with the company’s trading platform and portfolio management system. Xpansiv plans to launch I-REC trading in the second quarter with the integration of the Evident registry to follow. Xpansiv currently offers nearly one hundred global voluntary and compliance RECs on the platform. In addition to North American and Australian RECs currently traded on the exchange, Xpansiv’s registry infrastructure provider APX offers voluntary global RECs through its TIGRS product. The environmental performance data uses Xpansiv’s Universal Project Number (UPN), which the company recently made available for licensing. “By integrating UPNs into any structured or private credit deal managed on the T-REX platform, lenders and companies will be able to create data-driven sustainability-linked covenants and benchmark across a wider range of metrics,” said Benjamin Cohen, chief executive of T-REX.

SusPicious minds – Toronto-based environmental, agricultural, and industrial biotechnology company SusGlobal Energy announced Tuesday that its wholly owned subsidiary – SusGlobal Energy Belleville – has generated some 9,500 additional carbon offsets and sold a further 3,00 as part of the Anew SusGlobal Belleville Compsomting Offset Project in Ontario. The project is listed on the GHG CleanProjects Registry from CSA Group, and has generated some 124,500 credits over the 2017-22 period. SusGlobal did not reveal the buyer of the credits.

Future movers – Germany-based carbon removals marketplace Carbonfuture has joined the First Movers Coalition as an implementation partner supplying the industry group with credits to help fulfil their buying mandates. Read Carbon Pulse’s reporting on the First Movers Coalition, a global initiative launched last year to spur the decarbonisation of heavy industry and the long-distance transport sector.

SCIENCE & TECH

Hard to abate help – Green hydrogen has a unique and critical role to play in decarbonising hard to abate sectors according to the Green Hydrogen Technology Assessment released Tuesday by Deloitte and World Wildlife Fund (WWF) together with the Renewable Thermal Collaborative (RTC). Currently, the industrial sector accounts for approximately 24% of total GHG emissions in the US, more than half from fossil fuel combustion to generate process heat that powers most industrial functions, the groups said in a press release. Green hydrogen, which is produced by electrolysis using renewable electricity, is uniquely positioned to decarbonise high-heat industrial processes due to its high heating value and high flame temperature during combustion. However, given the capital expense required for industrial end-users to incorporate hydrogen into their processes, policy support is critical to the development of a green hydrogen market for industrial heating.

4-in-1 – Clarke Energy, an engineering design firm, signed an agreement with Liberty Coca-Cola Beverages, the largest producer and distributor of Coca-Cola beverages in the northeast US, to build a ‘quadgeneration’ plant in New York, the companies announced on Tuesday in a press release. Quadgeneration is the process of generating electricity, heat, and cooling while recovering CO2 from the system, then polishing it to beverage-grade standard CO2. The bottling plant will reduce emissions by sourcing 1,700 kW electricity using combined heat and power technology rather than from the grid, provides thermal energy and cooling for internal processes, while using recovered CO2 that would otherwise be sourced externally for the carbonated beverage bottling plant. Liberty will now be able to recover CO2 directly from the power generator’s engine exhaust systems, and upgrade the CO2 to International Society of Beverage Technologists (ISBT) and Coca-Cola internal CO2 standards.

AND FINALLY…

The Strait and narrow – A former Pacific Island president has backed a Torres-Strait Islander-led legal case to hold the Australian government accountable for climate crisis inaction. On Monday, Anote Tong, the former president of Kiribati, signed a statement of solidarity with Paul Kabai and Pabai Pabai, who have taken the government to court, demanding further emissions reductions in line with science. The two Torres Strait Islander men hail from the Boigu and Saibai communities on two of Australia’s northernmost inhabited islands. Low-lying Saibai is just four km from Papua New Guinea, and both islands are regularly flooded by seawater. The pair are leading a landmark class action on behalf of their island communities, arguing the commonwealth of Australia is acting unlawfully in failing to stop climate change that, if unchecked, will destroy their homelands. Tong lent his support and said Australia needed to do more to cut emissions. (Guardian)

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