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TOP STORY

PREVIEW: Experts expect fresh renewables pledges at Berlin climate dialogue

Scaling finance for renewables is expected to come into focus at a high level event in Berlin next week, with experts suggesting that fresh pledges may be announced by the German organisers and the UAE, which will host the year-end COP28 UN climate summit.

AMERICAS

Washington conducting emergency rulemaking on carbon market allowance reserve language

The Washington Department on Ecology (ECY) announced Wednesday it is conducting an emergency rulemaking on the Allowance Price Containment Reserve (APCR) ahead of the Q2 cap-and-trade auction, as Washington Carbon Allowances (WCAs) on the secondary market continue to trade above the mechanism’s Tier 2 trigger price.

WCI Markets: CCAs ebb and flow with macro sentiment, WCAs trigger emergency rulemaking

California Carbon Allowance (CCA) prices traded in step with macro sentiment, trending softer through most of the week but pushing higher on Thursday, while Washington regulators stepped in with emergency rulemaking provisions to dampen runaway prices.

US states request stronger federal guidance on VER additionality, carbon neutral claims

Over a dozen Democrat-led US states this week asked the US Federal Trade Commission (FTC) to shore up language regarding the environmental integrity of voluntary offsets and carbon neutrality claims in order to prevent greenwashing.

Verra to assist Panama with launching national carbon market

Panama’s environment ministry (MiAMBIENTE) and offset standards body Verra have signed a memorandum of understanding (MoU) to help develop a national voluntary carbon market in the Central American country, according to an announcement on Thursday.

VOLUNTARY

Ratings firm gives nature projects low scores on emissions, better on SDGs

A carbon credit ratings agency gave details about its views on hundreds of carbon projects on Thursday, depicting low grades for nature activities on carbon promises but higher scores on SDG benefits – while the company also commented on Verra’s proposed new approach to forest carbon crediting.

Sellers drop asking price for REDD credits after flurry of trades

Sellers are dropping their prices for REDD avoided deforestation credits after a flurry of activity in the sector this week that triggered a brief rally in market value, sources told Carbon Pulse on Thursday.

Canada-based VER investor sees COO resign amid restructuring agreement

A Toronto-headquartered voluntary carbon financier on Thursday announced it has executed a restructuring agreement that will consolidate the ownership structure of its developer arm and see the firm’s COO resign.

Ratings agency downgrades several projects to rock-bottom scores

A carbon credit ratings agency downgraded its scores for seven carbon projects on Thursday, including a large REDD scheme in Cambodia that at one stage had been deemed as a highly-ranked activity by the company.

ASIA PACIFIC

CBAM rules likely to move up China ETS coverage schedule -analysts

The implementation of the EU’s carbon border tax would likely speed up the construction of China’s national carbon market, bringing aluminium, cement, and steel sectors into the ETS within a couple of years, analysts said Thursday.

Singapore, Cambodia sign Article 6 carbon trading MoU

Singapore and Cambodia have signed a memorandum of understanding to develop a framework by the year’s end to allow the trading of correspondingly adjusted Article 6 carbon credits under the Paris Agreement as a way to help the two countries meet their NDCs.

Guangdong releases guidelines on carbon allowance-secured loans

China’s Guangdong province has released a set of draft work guidelines for bank loans using carbon emissions allowances as collateral, as a starting point to explore the broader potential of carbon finance.

NZ Market: NZU price slips following climate commission advice

The spot NZU price fell by NZ$2.50, or 4.1%, on Thursday following the Climate Change Commission recommending a major overhaul of the ETS to align it with the country’s emission reduction goals.

South Korea targets clean hydrogen standards in place by 2024

South Korea has outlined broad plans to introduce a certification system for clean hydrogen, covering the setting of standards and providing incentives to enable low-carbon hydrogen to contribute to the country’s long-term climate policy goals.

EMEA

German trading platform launches RFQ-based EU carbon marketplace

A German over-the-counter energy trading platform on Thursday launched an EU ETS allowance marketplace for industrial firms that do not have direct access to exchanges or daily auctions.

Euro Markets: EUAs snap 6-day losing streak despite “strong rejection” of technical bounce

EUAs snapped their six-day losing streak on Thursday, as prices extended technical gains made late in the previous session amid a strong auction, before giving up most gains back as traders eyed a second month of reduced auction supply in May.

Scope of new EU fund for energy transition to be considered this summer -Commissioner

EU industry chief Thierry Breton reiterated his support for a new sovereign fund to support the energy transition on Thursday, telling a parliamentary committee that the scope of the investment vehicle would be considered over the summer.

INTERNATIONAL

Steel group releases global standard for measuring GHG emissions, adopting 1.5C ‘glidepath’

A climate policy steel group with members across the industry’s entire supply chain has released a draft global standard to measure and report emissions from steelmaking, it was announced.

World Economic Forum report identifies core trends and challenges facing blockchain-based climate action

The World Economic Forum has published a paper this week that looks at the key trends and obstacles ahead for integrating blockchain-based solutions into climate action, focusing on the current information gap, reputational challenges, as well as the growing recognition around the uses of new Web3 technologies to help meet targets.

COMMENT

Carbon isn’t just another commodity market

Behind all the noise, opinions, and stakeholders, lies one meta debate in the voluntary carbon market: Tommy Ricketts of BeZero Carbon asks what financial market structure should it ape?

BIODIVERSITY (FREE TO READ)

UN chief throws weight behind calls for global financial reform, SDG stimulus

UN Secretary-General Antonio Guterres has backed calls for urgent action to transform the global financial system in a bid to ease the deepening debt distress while putting poor nations in a better position to handle critical issues such as climate change and nature loss.

Analysts urge governments, businesses to put nature-based solutions at heart of fight against water crisis

The public and private sectors along with financial institutions and NGOs must coordinate efforts to enable implementation and investment in nature-based solutions to help stave off the threat of global water shortage, according to analysts.

Biodiversity Pulse Weekly: Thursday April 27, 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).

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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

EMEA

Set to miss – The UK is set to miss its target for a net zero power grid because it lacks coherent policies to attract investors, a committee of lawmakers said. Delays to grid connections, planning constraints, and an uncompetitive business environment all mean the country is unlikely to achieve its goal of decarbonizing the power supply system by 2035, Parliament’s Business, Energy and Industrial Strategy Committee said in a report on Friday. The criticism reinforces the findings of an independent climate change watchdog, which last month said the government was unlikely to reach its net zero power target. The UK has struggled to cut red tape delaying renewable-energy projects and faces intensifying competition from the US, which is promising bumper subsidies for green energy development. (Bloomberg)

Fortum stays strong – Moscow’s decision to temporarily take over the Russian assets of Fortum has not caused panic among investors and after a slump, the company’s share recovered, EurActiv reports. The Russian government announced on Tuesday that the assets owned in the country by the Finnish state-owned energy company Fortum and its former German subsidiary Uniper had been temporarily seized. The decree has no relation to ownership, and the owners are not stripped of their assets, the statement reads, adding that the move aims to ensure uninterrupted work of companies that are vital for stable functioning of the Russian energy sector. Russia deemed the measure necessary because of actions by “unfriendly” countries’ actions which have been “contrary to international law”. In response, Fortum said Wednesday it had received no official confirmation from the Russian authorities, and the company is currently investigating the situation.

European results – German chemicals giant BASF has maintained its profit forecast for 2023 but warned of great uncertainty in the global economy as it saw demand weaken across its segments, it said in quarterly results on Thursday. BASF is targeting sales this year in a range of €84-87 bln and adjusted earnings before interest and tax of €4.8-5.4 bln, Reuters reports.  Spanish oil company Repsol also reported in results on Thursday that its first quarter net profit fell 20% YoY as oil and gas prices shrunk from the first three months of 2022. The company said its net profit was €1.11 bln.

New chapters – Both Slovakia and Malta submitted a request to the EU Commission this week to modify their recovery and resilience plans, adding a REPowerEU chapter. Slovakia’s proposed modification foresees six new reforms, eight new investments and 95 modifications to the planned measures, to support renewable energy sources, the transport sector and households at risk of energy poverty. The requested amount, added to Slovakia’s REPowerEU grants allocation (€367 mln), makes the overall submitted modified plan worth €6.4 bln. On Malta’s side, the new REPowerEU chapter would accelerate the permitting of renewable energy projects, introduce an obligation to install rooftop solar panels on new buildings, and expand the capacity of the electricity grid, including battery storage solutions. The requested amount, on top of Malta’s REPowerEU grants allocation (€30 mln), makes the overall submitted modified plan worth €328 mln. The EU executive now has up to two months to assess the requests, after which the baton will pass to the Council for the following four weeks.

Carbon free whisky – A Scottish carbon capture firm that aims to remove carbon dioxide that has been naturally captured in organic materials like grain and barley has received a seven-figure investment by Steyn Group, the BBC reports. Carbon Capture Scotland has developed a method of capturing CO2 produced from organic processes such as whisky fermentation. The technology has been trialled at its existing site near Dumfries and will be put in use at several distilleries including Tullibardine in Perthshire and Whyte and Mackay’s Invergordon distillery. Carbon Capture Scotland is also looking into locations in which to permanently store and remove carbon dioxide in geological formations like North Sea oil reservoirs. Steyn’s investment will help the firm generate carbon dioxide removal (CDR) credits.

AMERICAS

Fracking friction – Exxon Mobil is seeking to recoup its investment of $53 mln from the Colombian government after its eight exploration and production contracts were ended, liquidated, or suspended, Reuters and Climate Home reported Thursday. A bill to ban fracking in Colombia has passed the country’s Senate and is due for a Congressional vote in the coming months. The bill was brought in under left-wing President Gustavo Petro’s administration, which won the national election 9 months ago, and bans non-conventional resource development, including fracking. Under the bill, investors can transfer their investments or be awarded convention resource development projects.

Limits to debt – To avoid defaulting on its debt in June, the US House passed a debt ceiling plan on Wednesday that would raise the federal government’s debt ceiling to $31.4 trillion through to March of next year and avoid default, while enacting broad-based cuts in spending amounting to $4.8 trln saved over 10 years. Some of the cuts include slashing clean energy tax incentives for various initiatives related to pollution reduction, energy efficiency, and environmental justice, E&E news reported Thursday. Biofuel tax credits and other alternatives critical to Iowa and Midwestern states were reintroduced and retained after late negotiations Wednesday night. Democrats and green groups have criticised the passage of the debt limit with US Senate majority leader Chuck Schumer (D) expressing opposition to the plan, while President Biden has threatened to veto the bill if it reached his desk, potentially resulting in the US defaulting on its debt for the first time in history.

LCFS delays – California’s regulator ARB postponed the Low Carbon Fuel Standard (LCFS) public meetings to May 31 and June 1, from the previously scheduled May 2 and May 4 dates. The meetings are part of the informal rulemaking process towards agency plans to strengthen the LCFS programme’s carbon intensity (CI) reduction goals and improve the scheme. The ARB will post workshop materials on their website by May 30, the notice specified.

Net zero Post – Canada Post’s domestic ground service is offsetting its emissions through the Great Bear Forest Carbon Project, under the BC Carbon Registry using the Forest Carbon Offset Protocol, according to a press release Thursday. Canada Post says carbon-neutral shipping will not cost consumers more and it is prioritising projects led or owned by Indigenous peoples that are real, permanent, and additional. The offsets will not contribute to the taxpayer-owned company’s emissions reduction targets. Canada Post aims to be entirely carbon-neutral by 2050 by electrifying its entire fleet by 2040 and greening its offices.

ASIA PACIFIC

Energy strengths — New Zealand can leverage its vast renewable energy resources to cut emissions across its economy and meet national climate goals while maintaining energy security, the International Energy Agency said in a new report released Thursday. The report finds that New Zealand has more work to do in setting pathways to meet its ambitious objectives, and that the long-term energy strategy that the government plans to release at the end of 2024 will be a key step. The IEA said the country already has a low-emissions power system, with over 80% of electricity coming from renewable resources, namely hydropower. This share could easily surpass 90% based on existing policies, the report said, however the electricity system will need to adapt to the upcoming changes, notably the integration of greater shares of variable renewables, such as wind and solar. The report recommends advancing reforms to the permitting system for new renewable projects, finalising an offshore wind regulatory framework, and providing timely clarity on the government-backed NZ Battery storage project for pumped hydro. Cutting transport, and industrial emissions remain a key challenge, the IEA noted, urging the government to invest in technologies that would bring the cost of reducing emissions down from these sectors.

Net Zero Hub — Climateworks has signed a two-year MoU with the Indonesia Chamber of Commerce (Kadin) to build capacity within the country’s private sector and to ramp up corporate efforts to cut emissions, the NGO announced recently. The MoU establishes Climateworks Centre as the knowledge part of the Kadin’s Net Zero Hub initiative, which aims to connect the Indonesian private sector with the global sustainability movement, Climateworks said. It helps companies start their net zero journeys by providing resources, toolkits, and guides, it added. Guntur Sutiyono, Climateworks country lead for Indonesia, said the NGO would work with Kadin members to decarbonise supply chains, anticipate climate risks and implement ESG frameworks that make up the basis of global sustainability reporting.

New roadmap – China’s Shandong province has released a three-year plan for the development of carbon finance, aiming to make the size of carbon-related bonds in the region reach 10 bln yuan ($1.44 bln), according to a policy document released earlier this week. In addition, the provincial government plans to formulate related standards, improve a regional offset programme, and encourage the issuance of green loans. The authority has also said it will encourage innovative insurance products as a tool to protect nature-based carbon sinks generated across the province.

VOLUNTARY

Seen from space – Nestle will pilot new cutting-edge satellite technology to drive transparency in its reforestation projects, it announced this week. Nestle will be the first food and beverage company to pilot Airbus’s new Pleiades Neo satellites in the monitoring of its reforestation efforts. The company will use the very high-resolution images from this technology to help ensure that the trees it has planted in sourcing regions continue to thrive over the long term. This approach will help Nestle demonstrate the amount of carbon it is removing from the atmosphere through its Global Reforestation Program, a key pillar of its 2050 net zero emissions ambition. The company will first apply the technology in the Ranong and Chumphon provinces of Southern Thailand, where a reforestation project has been ongoing since last year. Pleiades Neo satellites will monitor more than 150 000 shade trees in farms from where Nestle sources its coffee, over a 20-year period. Shade trees help prevent coffee’s over-exposure to the sun, increase yield and productivity in the long term, while also removing carbon from the atmosphere. Based on this experience, Nestle will determine whether to expand the approach to other locations around the world.

SCIENCE & TECHNOLOGY

Poisoned children – Climate change makes droughts like that currently devastating East Africa at least 100 times more likely and the catastrophic humanitarian crisis there would not have happened without climate change, a new report from World Weather Attribution finds. The results highlight the devastating inequity of pollution released by the world’s wealthiest nations causing famine (in all but name) so dire in Somalia that mothers are forced to poison their children with detergent in the hopes they can receive food in a medical centre, or renting out their children to other beggars because people begging with children are given more than those begging alone. Climate change, mainly caused by the extraction and combustion of fossil fuels has heated global temperatures an average of 1.2C (2.2F) above pre-industrial averages. The international team of scientists assessed myriad factors — including hotter temperatures, increased evaporation, and La Nina’s impacts on rainy seasons — and determined the contributing factors would not have led to drought at all in a 1.2C cooler world. The Horn of Africa is responsible for essentially no climate pollution, and in large part because it has no fossil fuels to burn, is largely shut out from international climate aid. (Climate Nexus)

AND FINALLY…

You are about to enter another dimension – Life in the ocean’s “twilight zone” could decline dramatically due to climate change, new research suggests. The twilight zone (200-1,000 metres deep) gets very little light but is home to a wide variety of organisms and billions of tonnes of organic matter. The new study warns that climate change could cause a 20-40% reduction in twilight zone life by the end of the century. And in a high-emissions future, life in the twilight zone could be severely depleted within 150 years, with no recovery for thousands of years. “We still know relatively little about the ocean twilight zone, but using evidence from the past we can understand what may happen in the future,” said Katherine Crichton from the University of Exeter and lead author of the study. The study’s three emissions scenarios are based on total CO2 emissions after 2010. “Low” is 625 bln tonnes, “medium” is 2,500 bln, and “high” is 5,000 bln. For context, the Global Carbon Budget (led by the University of Exeter) estimated total global CO2 emissions of 40.6 bln tonnes in 2022 alone. Emissions have been close to 40 bln tonnes every year from 2010 to 2022, so most of the CO2 (about 500 bln tonnes) for the study’s “low” scenario has already been emitted. At the current rate, the “medium” scenario would be reached 50 years from now, and the “high” in just over a century.

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