Newsletters > CP Daily: Monday May 1, 2023

CP Daily: Monday May 1, 2023

Published 06:38 on May 2, 2023  /  Last updated at 06:53 on May 2, 2023  / Carbon Pulse /  Newsletters

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

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TOP STORY

POLL: Analysts raise short-term EUA forecasts after Q1 rally, but warn of mounting bearish pressures

Analysts have raised their short-term forecasts for EU carbon prices, but warned of coalescing bearish pressures including from increasing permit supply and weakening fundamentals.

AVIATION

India to participate in CORSIA aviation offsetting scheme from 2027

India will participate in ICAO’s CORSIA scheme for international civil aviation from 2027, the government announced late last week.

AMERICAS

Forested Brazilian state resumes plans to auction millions of hectares of public land for carbon project development

One of Brazil’s most forested states has resumed plans to auction millions of hectares of public land to generate voluntary carbon credits and help avoid deforestation.

RGGI Q1 CO2 output sinks over 10% as mild weather, coal retirements weigh

CO2 emissions in the 11-state RGGI cap-and-trade system were primed to have fallen by more than 10% during the first three months of the year even with several big-emitting power generators having yet to report their output, according to data published Monday.

RGGI Market: RGAs experience late-week rebound, despite Q1 emissions softening

RGGI Allowance (RGA) values reversed a week-long price decline on Friday as stakeholders urged member states to tighten the programme’s allowance caps and incorporate a slew of reforms, even as data showed first quarter emissions sank lower compared to last year.

CCA 2023 average price forecasts get a bump higher, RGGI remains a 2024 story

Analysts nudged their California Carbon Allowance (CCA) 2023 average price forecasts higher on market expectations of future programme tightness but expect near-term price declines into the May WCI auction, while they  maintained existing RGGI Allowance (RGA) price forecasts in a placid market.

Washington state argues power producer is not a utility, does not qualify for free carbon allowances

Washington Department of Ecology (ECY) filed a response on Friday in the lawsuit between the state and Chicago-based power firm Invenergy, where the ECY argued Invenergy is not similar to utilities receiving free allowances.

ASIA PACIFIC

Australia, PNG sign carbon market cooperation statements amid corruption investigation

Australia and Papua New Guinea have signed an outcome statement that focusses on climate finance and carbon market participation and an action plan for the Indo-Pacific Carbon Offset Scheme (IPCOS), as a corruption investigation has led to arrests of PNG climate officials.

Pavilion Energy teams up with Japanese partner to expand offset business

Singapore-based LNG trader Pavilion Energy has announced a partnership with a climate tech company in Japan to promote decarbonisation in the two countries through the use of offsets.

INTERNATIONAL

Mitsubishi, ADB launch funds to unlock billions in climate finance

Mitsubishi and the Asian Development Bank (ADB) on Tuesday separately announced the establishment of new funds that seek to unleash billions of dollars into climate finance and decarbonisation tech.

VOLUNTARY

Canada-based carbon marketer secures purchase of 50k offsets from Swiss brokerage

A Canadian-based carbon marketing and project development company announced on Monday that it had entered into an agreement to purchase 50,000 carbon offsets from low carbon commodity brokerage firm SCB Group, while also introducing a new funding model to expand popular projects.

ICYM

ANALYSIS: On the hook – the EU wants Big Oil to pay towards the great carbon clean-up

European oil and gas producers are set to face an obligation to help store CO2 at an annual rate of 50 million tonnes by 2030, as set out in the recently-proposed Net Zero Industry Act (NZIA).

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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 350 people! Last chance to purchase your tickets 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

AMERICAS

Atlantic united – The Canadian federal carbon levy will go into effect in the Maritime province of New Brunswick on July 1, after the jurisdiction announced it was opting out of its own pricing plan back in February, CTV News reports. Progressive Conservative Premier Blaine Higgs said adopting the federal price on carbon would bring New Brunswick in line with the rest of Atlantic Canada, as Nova Scotia also ditched its provincial plan for the federal backstop. Residents of the province will now receive rebate cheques from the federal government, to compensate for increased costs from C$65/tonne pricing system. The province will still apply its own system to cover industrial emitters, however.

Gas expansion – Premier Doug Ford’s government is preparing to expand gas-fired power plants in Ontario, a move critics say will make the province’s electricity system dirtier and could eventually leave taxpayers on the hook. The province is currently soliciting bids for additional gas-fired electricity generation, which means either new gas plants get built or existing gas plants get expanded.  It’s poised to be Ontario’s biggest increase in the gas-fired power supply in more than a decade, since the previous Liberal government scrapped two gas plants, in Mississauga and Oakville, at a cost the auditor general pegged at around C$1 bln. Ford’s energy minister, Todd Smith, says Ontario needs gas plants now to help meet an expected surge in demand for electricity and to provide power while some units of the province’s nuclear stations are down for refurbishment. The Ford government’s push to generate more of Ontario’s electricity from natural gas has the potential to conflict with PM Justin Trudeau’s government’s push for Canada’s grid to be net zero emissions by 2035. (CBC)

Washington winds changing – Washington Governor Jay Inslee (D) will not seek a fourth term in the state’s next election on Nov. 5, 2024, according to a press release Monday. The governor ushered in numerous progressive policies during his time in office, including the state’s WCI-linked cap-and-trade programme and clean fuels standard that began in January. Inslee was first elected in 2012 and is the second-ever Washington governor to serve three terms. One expected nominee to lead the Democrats is state Attorney General Bob Ferguson, who initiated legal challenged against former President Trump’s Muslim travel ban. (AP)

e-RIN wrangling – The US government could delay a decision on giving electric vehicle (EV) manufacturers tradable credits under the Renewable Fuel Standard (RFS) due to concern about legal challenges to the plan, two sources familiar with the matter told Reuters. The plan would have given EV automakers such as Tesla credits for charging vehicles using power generated from renewable natural gas, or methane collected from sources such as cattle or landfills. The EPA initially proposed adding EVs to the programme through the ‘e-RIN’ pathway when it outlined the mandates for blending biofuels for 2023-25. The government would now like to split the two things to avoid the possibility that legal challenges to the inclusion of EVs could delay the issue of the next round of RFS quotas on biofuels.

ASIA PACIFIC

Carbon concerns — A staff member at New Zealand’s highest emitting company, dairy company Fonterra, was asked to help the government design its rules for buying overseas carbon offsets to meet its 2030 NDC, Stuff NZ reports. The process has reignited concerns about the plan for a mass buy-up of carbon offsets, which is expected to cost billions under any scenario. There are just seven years left to vet and purchase millions of tonnes of carbon offsets from other countries, which could be anything from overseas tree-planting to renewable energy schemes. Facing intense criticism for relying on overseas projects, ministers asked a team at the Ministry for the Environment to draft rules ensuring the offsets have “environmental integrity”. A footnote to a mid-2020 briefing to Shaw, released to Stuff under the Official Information Act, named just three organisations as having contributed staff input to a “small expert group to help us develop principles and guidelines”. These included policy think-tank Motu, the Environmental Defence Fund, and Fonterra. Greenpeace said local NGOs should have been part of the advisory team, criticising the government’s lack of work on the issue.

Bye-bye Browse — Shell has signed an agreement to sell to BP its 27% stake in the carbon-intensive Browse natural gas project off the northwest coast of Australia, Bloomberg reports. Shell Australia said in a statement that the Browse asset is no longer a strategic fit in the context of Shell’s global portfolio, without disclosing price.  BP spokesperson confirmed the deal, saying it would take the company’s stake in the project to 44%. The sale is subject to regulatory approvals. Browse has the potential to produce 11.4 million tons of LNG, liquefied petroleum gas and domestic gas a year, and is a key potential development amid increasing global fuel demand. Woodside Energy Group is operator of the project and other partners include PetroChina Co. and Japan Australia LNG Pty. The project would emit at least 70 MtCO2e over its 30-year lifetime. Operator Woodside’s pursual of the project has attracted the ire of climate and environmental groups and shareholders, however the JV said it is pursuing ways to manage emissions, such as through CCS.

VOLUNTARY

ACR update – Offset standard American Carbon Registry (ACR) on Monday announced an open public comment period for updates to the ACR Standard, which details ACR’s requirements and specifications for the quantification, monitoring, reporting, verification, registration and issuance of project-based GHG emission reductions and removals as carbon credits. Key updates include codifying ACR’s existing scope exclusion for projects that displace one type of fossil fuel to another type of fossil fuel and projects that lock-in long-term GHG emissions; clarifying requirements to use ACR templates for key project document submissions; detailing the specification of environmental and social risk assessment requirements and the use of ACR tools and templates; and significantly enhancing the Complaints and Appeals process to detail the scope of complaints, the stepwise process for evaluation, investigation and resolution including timelines, and the requirements and process for appeals. Public comments are due June 2, and ACR Standard 8.0 will go into effect July 1.

Very verified verifiers – Standards organisation Verra has approved three new validation/verification bodies (VVBs) for the Verified Carbon Standard (VCS) Program, according to a press release Monday. Ecolance, TUV Rheinland, and Internat Energy Solutions Canada were all approved to assess VCS methodologies, methodology elements, and VCS projects to ensure they meet Verra’s requirements. Ecolance will cover energy, energy demand, waste handling and disposal, and Agriculture, Forestry and Other Land Use (AFOLU). TUV Rheinland will cover energy, energy demand, manufacturing industries, chemical industry, transport, mining/mineral production, metal production, fugitive emissions from fuels (solid, oil, and gas), waste handling and disposal, AFOLU, and livestock and manure management. Internat Energy Solutions Canada will cover manufacturing industries.

AND FINALLY…

The secret climate impact of pets – An increase in the number of households with pets has posed unique challenges to the environment, with many expressing worries over the faecal load, the use of plastic bags to clean up dog poop, and the landfill implications of pet toys. Concerns have also been raised over the environmental impact of cat litter made of bentonite clay, which requires strip mining and can be highly polluting to water. Additionally, Some experts have pointed to the carbon footprint of pet food, given the huge need for meat. Globally, it’s estimated that if household pets represented a country, it would rank 5th in meat consumption, only behind China, the US, Brazil, and Russia. (Forbes)

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