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CARBON FORWARD ASIA
PNG to publicly release carbon market regulations next month, minister says
Papua New Guinea will publicly release its carbon market regulations and REDD+ guidelines next month after they are expected to be approved by the National Executive Council in June, the country’s environment minister told Carbon Pulse on Wednesday, as the head of the country’s climate authority responded to corruption allegations that have consumed the body.
South Korea could see emerging Article 6 demand, though regulatory ambiguity weighs down sentiment
South Korea is considering lifting the current limit on offset use for ETS compliance, which could further boost domestic demand for Article 6-aligned credits, panellists told a conference on Tuesday.
Integrity of nature-based projects key as credit buyers prioritise reputational risk
Quality and reputational risk more than price are decisive factors for buyers of nature-based carbon credits, with investors seeking to ensure that such projects have the ability to deliver on meeting climate and environmental goals, a conference heard on Wednesday.
Lack of policy clarity seen to hamper nature-based project development in Asia
A lack of policy and regulatory clarity surrounding the nature-based carbon market is making it difficult for project developers to make investment decisions, just as the fledgling biodiversity market is emerging as a potential rival, panellists told a conference on Wednesday.
EMEA
UPDATE – European Commission says no additional Innovation Fund EUA sales before 2024
(Updates with confirmation from Commission) – Additional sales of EU Allowances from the Innovation Fund for the bloc’s REPowerEU plan will only start in 2024 after the auctioning regulation is updated later this year, a source at the European Commission told Carbon Pulse on Tuesday.
Euro Markets: EUAs unwind Tuesday gains to test major support as funds’ positioning moves to short
European carbon prices on Wednesday gave up all the gains made in the previous session, falling to their lowest in more than three months, as market sentiment relaxed after the European Commission announced there would be no further EUA volumes added to market supply this year, while investment funds’ positioning flipped to net short for the first time since January.
Enel EU ETS-covered generation dips 5% in Q1, IEA urges Italy to speed up for EU targets
Generation covered by the EU’s carbon market across Italian utility Enel’s power plants fell 5% year-on-year during the first quarter of 2023 as hydro output rebounded after extreme lows seen in 2022, while the IEA separately warned in an analysis that Italy must accelerate its renewables expansion to meet more ambitious climate targets.
EU steel group says “worst” is over but demand outlook remains weak
A Brussels-based steel association has suggested that the “worst” impacts on the sector of the energy and inflation crisis is now “behind” the region but that 2023 demand for steel will be lower year-on-year, according to a release on Wednesday.
VOLUNTARY
Firms that buy carbon credits also enact greater in-scope emissions reductions, says new report
Research from a carbon project ratings agency suggests that companies that purchase and retire credits also tend to implement greater in-scope emissions cuts than those that do not, contravening criticism of the voluntary carbon market (VCM) that offset-buying distracts from direct corporate climate action.
US private equity firm seeks to raise $500 mln for new forestry, agriculture fund with carbon optionality
A US private equity investment manager announced on Wednesday the launch of a natural resources fund investing in global forestry and agriculture assets combined with carbon sequestration.
Blockchain-based carbon platform partners with GHG accounting firm
A blockchain carbon offsetting firm on Wednesday announced a partnership with a carbon accounting firm to provide comprehensive end-to-end solutions to clients.
Former Shell VP joins carbon capture firm
The former Vice President of Energy Transition for Shell USA is joining an Illinois-based carbon capture company as Executive Vice President of Growth and Strategic Projects, the company said in a press release Wednesday.
AMERICAS
Brazilian Senate passes Bolsonaro-era voluntary carbon measure for public forest concessions
The Brazilian Senate on Tuesday voted in favour of legislation allowing the sale of voluntary carbon credits from public forest concessions, leaving only President Luiz Inacio Lula da Silva to sign his predecessor’s bill into law.
LCFS Market: California prices head towards $90 following data release, while major refiner heard selling
California Low Carbon Fuel Standard (LCFS) prices this week shrugged off another large quarterly credit generation figure to approach an eight-month high, even as traders reported one of the largest refiners under the programme was heard selling units.
Oregon Clean Fuels Program ekes out Q4 credit surplus as diesel alternatives boom
The Oregon Clean Fuels Program (OCFP) recorded its lone quarterly credit surplus of 2022 over the October-December period as low-carbon diesel alternatives outweighed greater deficits from fossil fuels, government data showed Tuesday.
Largest Massachusetts GWSA emitters can cover 2023 short positions as Q1 emissions stall
Four of the largest regulated entities under the Massachusetts Global Warming Solutions Act (GWSA) carbon market have emissions trending above 2023 allowance holdings, but should be able to satisfy compliance obligations through various channels given the plunge in Q1 emissions, according to a report published Wednesday.
Long-time carbon trader leaves Canadian bank for US-based fund
A Toronto-based trader has parted ways with one of Canada’s largest financial institutions after spending more than a decade transacting products in European and North American compliance and voluntary carbon markets, Carbon Pulse has learned.
ASIA PACIFIC
Indian renewable company secures extra $250 mln from global investment firm
A start-up decarbonisation platform has secured $250 million of additional financing from a global investment firm after the company won long-term contracts to deliver round-the-clock green energy to industries in India.
Australia Market Roundup: Northern Territory government greenlights fracking, ACCU price inches up
The Northern Territory government will allow the expansion fracking in the Beetaloo Basin, after the government announced it was satisfied the recommendations of an independent inquiry into the practice had been met.
Australia’s Santos signs MoUs for offshore CO2 storage in Timor-Leste
Oil and gas company Santos has closed four non-binding memoranda of understanding (MoUs) for storage of upwards of 10 million tonnes of CO2 annually at a CCS facility in Timor-Leste, that could seek carbon credits under Australian and international schemes.
INTERNATIONAL
Germany pledges fresh funding to UN’s Green Climate Fund
Germany will increase its financing to climate action in developing countries, chancellor Olaf Scholz announced as the two-day Petersberg dialogue concluded in Berlin on Wednesday, pledging fresh funding to the Green Climate Fund (GCF).
SHIPPING
Vitol partners with Danish tech firm ZeroNorth to decarbonise, optimise maritime operations
Commodities trading firm Vitol has entered into a strategic partnership with Danish tech company ZeroNorth, through with the partners will share access to maritime optimisation and emissions reduction services.
BIODIVERSITY (FREE TO READ)
Study quantifies high reputational risk to public firms in nature-threatening activities
A report published Wednesday has quantified the different reputational risk levels facing firms which undertake extractive projects close to environmentally-sensitive sites, finding that publicly-listed companies operating in proximity to nature are 77% more likely to see damage to their business than those that are not.
COMMENT
Communication is key: Four ways carbon projects can better engage with Indigenous people
Developers need to embed Indigenous leadership into projects in a way that is not fundamentally disempowering, and for this there must be lasting, genuine interactions between project developers and people on the ground, writes Isack Bryson of Carbon Tanzania.
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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
Multiple pathways – India is seeking to build a consensus within the G20 to let countries choose a roadmap to cut carbon emissions, instead of setting a deadline to end the use of fossil fuels, three Indian government officials said, as reported by Climate Home. India is keen on introducing the phrase “multiple energy pathways” in a communique to be released at a G20 summit in September and has been supported by countries including China and South Africa, one of the officials said. India recently opposed a deadline proposed by rich nations to end the use of coal, an official said. In recent meetings of the G7, the UK and Canada pushed for agreement on a 2030 coal phaseout but were opposed by Japan, the USA, and the EU. The G7 did agree to accelerate the phase-out of unabated fossil fuels so as to achieve net zero in energy systems by 2050 at the latest at its recent meeting. At the Petersberg summit in Berlin this week, the UAE’s climate envoy and COP28 head called for a tripling of renewable capacity by 2030, and a phaseout date for “fossil fuel emissions”, though not specifically fossil fuels themselves.
Dodgy ESG – Investment funds branded as green or socially responsible are being used by some of the world’s largest asset managers to invest hundreds of millions of pounds in fossil fuel companies, the Guardian reports. The research by the Common Wealth think-tank showed that the US fund managers BlackRock and State Street and the UK-based Legal & General were among asset managers to use funds with an ESG label to invest in fossil fuel firms. The think-tank also said that despite claims that ESG funds offer a green and socially responsible option for investors, the research shows these funds are significantly exposed to fossil fuel companies. Between February and April this year, BlackRock, State Street, and Legal & General alone were found to hold $1 bln in bonds issued by fossil fuel companies in their ESG funds.
AMERICAS
Peaking blinders – About 1,000 natural gas-fired power plants that provide energy at periods of peak demand could be excluded from the toughest standards under the US EPA’s upcoming carbon rules. The EPA is expected to propose power plant rules next week that would regulate carbon emissions at existing coal and gas facilities for the first time. The rules are expected to treat so-called peaker plants – which provide backup power to the grid – differently from baseload units, according to four people who have been briefed by EPA. Two outcomes are possible in the rules. The regulations might not cover peaker plants, two of the people said. Or the agency could offer laxer standards than those being planned for baseload units, two other people said. Those are likely to be based on efficiency improvements. (E&E News)
Virginia promises power – The largest utility in Virginia, Dominion Energy, filed a planning document on Monday with state regulators indicating it plans on keeping most of its power stations for decades to come and may add both natural gas and nuclear facilities. The filings are consistent with Governor Glenn Youngkin’s (R) energy policy, who aims at taking the state out of RGGI through executive and regulatory action, bypassing the Democrat-majority legislature. (AP)
Mass wind – The Massachusetts Department of Energy Resources and the state’s electric distribution companies filed a draft Request for Proposals on Tuesday that seeks up to 3,600 MW of offshore wind projects. If approved by the Massachusetts Department of Public Utilities, the RFP will be the state’s largest procurement of offshore wind energy. The procurement could supply 25% of the state’s annual electricity demand, according to the DOER. However, the filing has raised questions about additionality and whether some of the 3,600 MW will go to companies looking to re-bid existing projects they say are no longer financially viable. (Utility Dive)
EMEA
Summer rebound – German airline group Deutsche Lufthansa said it expected strong demand for holiday travel this summer to fill seats on its planes, Reuters reports. “The continuously strong demand gives us confidence for the coming months,” finance chief Remco Steenbergen said in a call on Wednesday. Lufthansa said it still expects to post a significant year-on-year improvement in earnings for the full year 2023.
ASIA PACIFIC
Tax n’ trade – India needs to put in place a broad-based carbon pricing system in line with emerging global best practices and introduce a carbon tax, the Reserve Bank of India (RBI) said in a report this week. Due to its regressive nature, the carbon tax may need to be accompanied by complementary redistributive policies, in view of the inability of the weaker sections to move to eco-friendly modes of production and patterns of consumption, according to the ‘Report on Currency and Finance 2022-23’. The report does not represent the views of the RBI and is based on the findings and conclusions of the contributors from the Department of Economic and Policy Research. It also recommended introducing an emissions trading system linked to a green taxonomy policy, covering all sectors of the economy, which can partly balance subsidy and tax. The report argued that there is an urgent need for green taxonomy in India, clearly spelling out what constitutes ‘green’, to help direct investment through better-designed policies and improve the monitoring of progress. As well, such a policy would help identify sustainable green assets and activities and limit the potential risk of greenwashing. (Business Line)
VOLUNTARY
Green mining – Project developer Karbon-X announced Wednesday a partnership with full-service mining firm Tamarack Mining Services to provide carbon credits through the DrillGreen Offsetting programme utilising the Tamarack Procurement platform. The protocol aims to generate carbon offsets through the decrease in power consumption, CO2 reduction initiatives, or CCS during mining activities such as exploration, construction, or extraction, the press release noted. “DrillGreen employs data and calculation methods to offset emissions produced from fuel usage at any site using high-quality, verified emission reduction certificates,” Chad Clovis, CEO of Karbon-X, said in the press release.
Green network – Environmental markets platform Xpansiv and emissions brokerage Evolution Markets that joined forces in January, announced membership into the Clean Energy Buyers Association (CEBA) in a Tuesday press release. The firms aim to promote and help scale the development and procurement of renewable energy sources. CEBA affiliation gives Xpansiv and Evolution Markets access to a global network of companies, energy developers, and service providers engaged in renewable energy procurement. Xpansiv operates the largest independent platform for solar renewable energy credits in North America. Evolution Market’s expertise covers global carbon, emissions, renewable energy, and OTC power, natural gas, oil, nuclear fuel, and biofuels markets.
SCIENCE & TECH
Cheap CCS – A scientific breakthrough could drive down the cost of carbon, capture and storage (CCS) by cheaply turning CO2 into a powder, reports Science Direct. International researchers have discovered that mixing a type of salt, called guanidinium sulfate, with the greenhouse gas will trap CO2 molecules in layers without reacting with them. The new technique introduces a new way of storing and transporting CO2 as a solid, rather than the usual way as a form of dry ice or compressed in gas cylinders. The process is cheaper than current methods because the CO2 is captured without needing water or nitrogen. “Our team made it possible to carry CO2 in a solid form without the need for refrigeration or pressure,” said Cafer Yavuz, professor of chemistry, and director of the KAUST Oxide and Organic Nanomaterials for Energy & Environment Laboratory. “You will be able to literally shovel CO2 loaded solids from now on.” The research was carried out at Southern University of Science and Technology, University of Science and Technology of China, and King Abdullah University of Science and Technology.
AND FINALLY…
Full spectrum – Biodiversity beats climate when it comes to swaying Republicans, Bloomberg reports. The topic of biodiversity may be an easier subject to broach with US investors who lean Republican, where conversations about deforestation, water, and land-use are more unifying than climate change, according to experts. “Using phrases related to carbon emissions instantly becomes a highly political conversation in a Republican state,” John Hoeppner, US stewardship and sustainable investment lead at Legal & General Investment Management America, told Bloomberg. Whereas “habitat conservation has support across the political spectrum,” he added. ESG investing has been attacked by GOP politicians with some red states having gone so far as to bar Wall Street firms that promote ESG from managing public funds.
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