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TOP STORY
EU’s top climate official sees agriculture, removals as focus of 2040 goal-setting
The potential inclusion of carbon removals in the EU ETS, how to tackle emissions from agriculture, and a focus on curbing consumption are among the top issues being considered in forming the EU’s 2040 emissions target, the bloc’s top climate official Kurt Vandenberghe told a conference this week.
EMEA
EU nations agree to force companies to say more about their carbon credit use
EU nations this week agreed a united line to require companies to reveal more about their climate goals to consumers, but stopped short of lawmaker efforts to also ban the use of carbon credits for such claims altogether.
Euro Markets: EUAs drift to new 14-week low amid worsening sentiment as UKAs turn upward
European carbon prices made modest losses on Thursday, declining to a new 14-week low even after a strong auction result helped the market erase early weakness, while UK allowance prices snapped an eight-day losing streak.
Uniper becomes the latest EU utility to post Q1 emissions drop, ArcelorMittal flags demand rebound
Uniper became the latest major European utility on Thursday to report in financial results a significant drop in power generation covered by the EU’s carbon market over the first quarter of the year.
VOLUNTARY
Verra suspends African cookstove, mangrove projects
Carbon standard manager Verra has suspended a major cookstove project and two mangrove restoration projects over the past week, preventing the schemes from being issued with carbon credits.
Ratings agency’s latest advice on Verra’s REDD+ points to additionality and permanence hooks
A carbon credit ratings agency on Thursday released the final part of its four-part series pointing out opportunities and challenges with Verra’s draft consolidated REDD+ methodology, this time outlining “permanence” and “additionality” hooks.
Co-benefits yielding higher forestry VER prices, but difficulties abound in quantifying extra costs
Voluntary carbon offset prices from forestry projects largely attracted higher values in recent years when paired with co-benefits beyond GHG sequestration, though it is uncertain if these premium values are covering the elevated costs of carrying out such sustainable development efforts, a webinar heard Thursday.
Startup plans to create bio-naphtha for the chemical industry with carbon-rich algae
A seaweed startup plans to sequester 100 mln tonnes of CO2 by 2040 and a billion tonnes by 2050 after launching its first algae farm off the coast of Spain’s Canary Islands.
Large amounts of Africa’s trees, carbon stocks not located in forests, researchers find
Nearly 30% of Africa’s trees are located outside areas previously classified as forests or woodlands, researches have found using satellite imaging, presenting an opportunity to better estimate carbon stocks and more effectively direct climate change mitigation efforts.
South Pole CEO hits back at “incomplete and factually incorrect” reports of Kariba REDD+ over-crediting
The CEO of offset developer South Pole has hit back at “incomplete and factually incorrect” news reports alleging that the company’s Kariba REDD+ forest preservation project in Africa has over-issued carbon credits.
AMERICAS
WCI Markets: WCAs correct following emergency rulemaking, CCAs slip on banking failures
Washington Carbon Allowance (WCA) values tumbled this week in response to forthcoming emergency rulemaking provisions for the programme’s permit reserve, while California Carbon Allowance (CCA) prices declined on extremely light volumes amid numerous bank failures and ahead of the Q3 WCI auction.
Research group finds Quebec’s reforestation offset protocol critically flawed
Major problems with Quebec’s afforestation and reforestation offset protocol under the province’s WCI-linked cap-and-trade programme means it could potentially over-credit into the millions, researchers said in analysis released Wednesday.
ASIA PACIFIC
NZ Market: NZU price falls to 20-month low despite spate of positive news
New Zealand carbon allowances hit a 20-month low on Wednesday amid weak demand and ongoing market uncertainty, though observers believe recent policy movements by government could signal future improvements in market conditions.
INTERNATIONAL
Oil majors report earnings hikes on increased output, snub net zero pledges
Two oil majors reported strong Q1 earnings characterised by fossil fuel production growth on Thursday, with one stating that its operating plans do not currently reflect the company’s net zero promises.
World Bank carbon registry project appoints EY executive as new director
The Climate Action Data Trust (CAD Trust) has announced the appointment of a former EY climate change expert as its new executive director.
BIODIVERSITY (FREE TO READ)
New fund to drive $100 mln in sustainable fisheries investments
Green group WWF and environmental impact firm Finance Earth have teamed up to launch a fund that seeks to catalyse over $100 million in investments in sustainable fisheries by the end of the decade.
Institutional investment manager charts path for integrating biodiversity into fixed income portfolios
A major investment management firm has charted a pathway for integrating biodiversity into institutional fixed income portfolios, warning that investors face a myriad of regulatory and systemic risks in ignoring the issue.
World Bank flags massive nature risks for emerging market banking systems
Banks in emerging markets allocate around half – and in some cases much more – of their credit portfolio to businesses highly dependent on ecosystem services, exposing them to significant risks from nature and biodiversity loss, according to the World Bank.
Australian agricultural fund eyes biodiversity, carbon credits
Natural capital investor Kilter Rural will this month launch an A$500-million ($333.7 mln) sustainable agriculture fund that will buy and develop 21,000 hectares of farmland in Southeastern Australia, creating biodiversity and carbon credits in the process.
Biodiversity Pulse Weekly: Thursday May 4, 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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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
Betts on life – One of the world’s most respected climate diplomats – Pete Betts, lead negotiator for the UK and EU at UN climate negotiations, who helped deliver the historic Paris Agreement – has been diagnosed with terminal brain cancer. It has been 14 months since he was given 15 months to live. In a touching piece in the FT, 13 lessons from a leading climate negotiator at the end of his life, Betts reflects on a lifetime of work on the defining issue of our time and how his thinking has been shaped by his illness. He discusses serious flaws in UN climate negotiations, including a cumbersome process made worse at times by inadequate political leadership. Betts identifies little-known figures who have made an invaluable difference, as well as those holding back progress. As well, he spoke of what approaching death has taught him about what matters in life.
Ditching coal – Globally significant financial institutions (FIs) are committing to divest from coal at a quicker rate as climate change becomes a priority globally, a press release from the Institute for Energy Economics and Financial Analysis (IEEFA) stated. It took almost six years for the first 100 institutions to adopt coal exclusion policies, but since then the number has doubled in just over three years. European financial institutions are leading the way in coal divestment with stricter policies than those in other regions, though FIs from Asia are also increasing rapidly, with 41 now having formal exit policies compared to only 10 between 2013-19. A total of 22 FIs in emerging economies have also established coal divestment policies, including South Africa, Malaysia, China, Turkey, India, and the Philippines, all of which are largely reliant on coal for electricity. The US, France, UK, Japan, South Korea, Germany, Australia, and the Netherlands have the highest number of FIs with formal coal exit policies. Overall, there are 114 FIs in Europe, 53 in Asia-Pacific, 27 in North America, 6 in Africa, and 2 in South America with coal exclusion policies.
Soy it ain’t so – The world’s largest grain trader, Cargill, is facing a first-ever legal challenge in the US over its failure to remove deforestation and human rights abuses from its soya supply chain in Brazil. ClientEarth, an environmental law organisation, filed the formal complaint on Thursday, accusing Cargill of inadequate monitoring and a laggard response to the decline of the Amazon rainforest and other globally important biomes, such as the Cerrado savannah and the Atlantic Forest. The case, which was submitted under the guidelines of the Organisation for Economic Co-operation and Development, argues that Cargill’s “shoddy due diligence raises the risk that the meat sold in supermarkets across the world is raised on so-called ‘dirty’ soy”. ClientEarth says this breaches the international code on responsible business conduct. The lawyers behind the complaint have stressed the urgency of the issue because Amazon degradation is approaching a tipping point, after which scientists say the rainforest will turn into dry grassland, emitting vast amounts of CO2. The Amazon’s sister biome, the Cerrado, has already lost half of its tree cover. (Guardian)
EMEA
Clean exit – The EU can cut its fossil gas use in half by 2030 and fully exit the fuel by 2050 while maintaining supply security and industrial production at today’s levels without disruptive behavioural changes, energy policy think-tank Agora Energiewende said. The report titled “EU Gas Exit Pathway” states that crucial actions to help the phaseout include the ramp up of renewable energy to 70% of power generation by 2030, and 85% by 2040. The share in 2021 was about 35%. Other elements necessary to exit fossil gas use are to improve energy efficiency and electrifying process heat in the industry sector, insulating buildings, as well as installing 40 mln heat pumps by 2030 and 80 mln by 2040, Agora said. (Clean Energy Wire)
Closing coal – German utility RWE is intensifying efforts to ditch its lignite operations sooner than expected, according to a note from Morgan Stanley analysts after speaking with company executives on a trip to the US, Bloomberg reports. The German utility already agreed to close its coal-fired power stations by 2030 but is seeking input from investors on how to offload those assets sooner and boost shareholder value, according to the bank’s note to clients seen by the news site. RWE, which hosted its general annual meeting on Thursday, has held events for investors in London and the US in recent weeks.
Frozen – AIB, the European company responsible for an energy certification system for power companies in the region, has suspended the sale of green energy credits from Iceland. According to the company, there are indications that a “double claiming of energy attributes was taking place”, with some corporate buyers claiming they had purchased the credits even after selling them on to another party. The certificates are bought by foreign companies and are a huge source of income for Icelandic energy producers. While over 99% of energy produced in Iceland comes from renewable sources like hydroelectric and geothermal power, a majority of energy produced in Europe is still nuclear or fossil fuel. Some 90% of energy produced in Iceland is now sold on renewable energy credit markets, meaning consumers of non-renewable energy can purchase green energy credits even if their operations are powered by, for example, coal. AIB pointed to a lack of oversight on the sale of the certificates from Iceland, and that it needs to be better clarified who is responsible for the oversight. (Iceland Review)
AMERICAS
Rainforest recession – The Brazilian economy could lose $184 mln by 2050 due to the Amazon rainforest facing a point of no return if precipitation rates continue to fall, according to a World Bank report published Thursday. The combination of illegal deforestation, cattle grazing, and climate change threatens Brazil’s agricultural sector, access to clean drinking water, and ability to produce hydroelectricity. Extreme weather events already cause Brazil $2.6 bln per year in damage. (Bloomberg)
An Enbridge too far – Shareholders of North American pipeline operator Enbridge rejected on Wednesday a small investor’s resolution to ask the company to annually report all the indirect GHG emissions of the oil and gas it handles. Enbridge’s board had recommended rejection of the proposal, which was non-binding. Shareholders voted 71% against it. The resolution, from DI Foundation, reflects growing pressure on companies to account for more than just the emissions they generate themselves. By far, most of the emissions associated with oil and gas are produced when their final products are used, not during initial extraction. (Reuters)
A flock of Segalls – Evergreen Action, a group that’s proven influential in designing some of the Democrats’ climate law, is bringing on Craig Segall in a key policy role, Axios reported Thursday. Segall is a veteran California regulator ARB and will serve as Evergreen’s vice president of policy. He will provide added intellectual firepower that reflects the shift toward defending President Joe Biden’s climate policies in a divided Congress, and a challenging court environment, reporters noted in their newsletter. Segall most recently worked on designing a path to zero emissions for California’s transportation system, and previously served as an ARB attorney, brokering emissions agreements between the state and the automotive industry, and playing a role in reauthorising the state’s WCI-linked cap-and-trade programme.
ASIA PACIFIC
Blowout — Australia’s Snowy Hydro 2.0 pumped hydropower project has been delayed, once again, to 2029 due to COVID, supply chain issues, design changes due to the complexity of the project, and problems with the massive drilling machines, RenewEconomy reports. The latest update is just the latest in a series of disastrous announcements for a project that is already heavily delayed and running billions of dollars over budget. The full catastrophe of the latest blowout beyond the latest official number of A$5.9 bln ($3.9 bln) will not be revealed until July. Some critics of the project fear that the total cost of the project could blow out to $10 bln, not including the transmission infrastructure required to transport its output to various parts of the grid. The Snowy Hydro 2.0 project is developed by federal government owned organisation Snowy Hydro, with the latest cost blowout potentially meaning it will need further federal funding to see it to completion.
Fracking confusion – This week the Chief Minister of Australia’s Northern Territory (NT), Natasha Fyles, green-lit full-scale gas production in the Beetaloo Basin, five years after a moratorium on fracking was lifted, ABC News reports. However, that ban was lifted on the condition that the NT government implement in full all 135 recommendations of the 2018 Pepper Inquiry, which were aimed at mitigating all associated risks from fracking in the territory. Chief Minister Fyles stated that the government had undertaken a comprehensive body of work so that it could meet all those 135 independent recommendations, according to the ABC. But the independent officer overseeing the implementation of those requirements, David Ritchie, said that, crucially, recommendation 9.8 of the inquiry, which required the NT and federal governments seek to ensure no net increase in Australia’s CO2 emissions from fracked gas in the NT, remained outstanding. In Ritchie’s final report, he wrote that there had been no progress on the crux of this recommendation, the ABC report said. Meanwhile think tank Grattan Institute programme director for energy and climate change, Tony Wood, said it was still unclear how the NT government would help offset all the lifecycle emissions from fracking, as had been promised.
VOLUNTARY
Checking the checkers – Carbon credit issuer Verra has come under fire from campaign group Survival International for its choice of auditor to check its draft consolidated REDD forest protection methodology released in April, Climate Home reports. Survival pointed out that the “rigour” of auditor Aster’s work has been called into question of late because the company signed off on a check to the Northern Kenya Grassland Carbon project that was in March suspended by Verra while it carries out its own audit.
AVIATION
Flying SAFe – US carrier United Airlines announced plans on Thursday to start using sustainable aviation fuel (SAF) blend on departing flights from San Francisco airport, and later in the year from London’s Heathrow airport. The airline has used SAF blends from Los Angeles airport since 2016, from Amsterdam’s Schiphol airport since 2022, and expects to use approximately 10 mln gal of SAF this year, the press release said. United Airlines had invested in over 5 bln gal of future production of SAF to date, the statement noted, which was more than any other airline and was the first airline to commit to a 2050 net zero emissions target.
AND FINALLY…
Commutes too costly – Public transport is too expensive in many European countries, an analysis by campaigners Greenpeace has revealed. Greenpeace looked at 30 European countries and their capitals, ranking public transport affordability and simplicity. Bulgaria, Croatia, Greece, and Norway scored worst in the ranking of national transport tickets, while Dublin, London, Paris, and Amsterdam ranked worst for the capitals. Public transport tickets in the EU are taxed at an average of 11% VAT, which is still higher than many other basic services and necessities. Six EU countries currently tax public transport as much as jewellery or luxury watches, the analysis found. Greenpeace is calling on governments to create affordable “climate tickets” for all public transport and for the Commission to facilitate this.
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