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TOP STORY

EU lawmakers poised to take a hard line against voluntary offset claims

Most EU lawmakers on Tuesday voiced their support for a proposal that would ban the bloc’s companies from relying on carbon credits when making sustainability claims to consumers, suggesting a smooth passage for the plans in a vote due later this week.

EMEA

UKA POLL: Prices to recover but analysts see discount to EUAs remain amid supply pressures, policy uncertainty

UK carbon allowances will pare recent losses to average around £70 for the remainder of the year but will remain valued below their EU counterparts amid policy uncertainty and supply and demand factors, analysts predicted in Carbon Pulse’s inaugural UKA price poll.

UK businesses call for new industrial strategy, end to “flip flopping” on government support

UK businesses are asking the government to relaunch an industrial strategy, noting the importance of supporting manufacturing in the face of increased competitive pressure from the US and other global jurisdictions, as well as the backdrop of Brexit, technology acceleration, and the transition to a net zero emissions economy.

New mandatory reporting in UK to create CCS “treasure map”

The UK government will require mandatory reporting by oil and gas firms operating in the North Sea in efforts to create a “treasure map” of potential CO2 storage sites, aiming to affirm overall storage capacity to help attract private investment.

EU lawmakers vote to include imports in bill to curb energy-sector methane

The European Parliament voted to raise ambition on a proposal to limit methane emissions from the EU energy sector on Tuesday, including passing an amendment on extending the same rules to imports despite opposition from some political groups.

Euro Markets: Carbon consolidates above key technical level before late rush of buying sets 5-day high

EUAs gained for a third straight day amid moderate volume on Tuesday as bulls steered the market away from the 200-day moving average before a late surge took prices to a five-day high, while energy prices resumed their steady declines as storage supplies continue to rise faster than historic trends.

UK announces latest round of award recipients to support industry energy saving, emissions cuts

The UK government announced on Tuesday millions in grants for 26 businesses awarded under its Industrial Energy Transformation Fund (IETF), designed to support businesses that use high amounts of energy in reducing their fossil fuels by adopting low-carbon technologies.

ASIA PACIFIC

Australia commits cash to ACCU reforms, but Clean Energy Regulator funding cut in latest budget

Australia has committed cash in its latest budget to ensure the recommendations of the independent review into its carbon market are carried out alongside a raft of investments in hydrogen and electrification, touting its goal to turn the country into a renewable energy superpower.

China’s Lianjiang drafting trading rules for fishery carbon credits

A county government in China’s Fujian province has issued a call for public opinions on a set of administrative measures for the registry and trading of ocean-based carbon sinks, with a focus on credits generated by local fishery projects.

New Zealand climate legal group files court review over Cabinet’s decision to ignore ETS advice

A climate-focussed legal group has filed a judicial review against the New Zealand government’s decision to ignore the Climate Change Commission’s advice on ETS prices settings last year, it announced Tuesday.

AMERICAS

Pennsylvania joining RGGI would slash allowance prices and emissions, modelling says

Pennsylvania’s membership in the power sector RGGI carbon market would cause allowance values to fall significantly and yield CO2 abatement with little change in electricity prices, according to new modelling published Tuesday.

RFS Market: Potential delay in ‘e-RINs’ pathway drives up D3 prices to 3-mth high

The price of D3 RINs jumped in recent days following a media report that the US EPA may delay a proposal that would permit electric vehicles (EV) automakers to earn Renewable Fuel Standard (RFS) credits by using renewable electricity produced from biogas.

VOLUNTARY

VCM Report: Growing supply weighs on market as corporates eye gloomy economic data

Voluntary avoidance credits continued to soften over the past week as the macroeconomic climate of higher interest rates and slowing economic growth undermined corporate demand during a growing glut of available supply in the market.

INTERNATIONAL

S&P Platts’ global head of carbon resigns to join rival

The global head of carbon for S&P Global Platts has resigned to take up a similar role at an industry competitor, Carbon Pulse has learned.

BIODIVERSITY (FREE TO READ)

EU agency affirms science behind Nature Restoration Act in wake of parliamentary ruckus

The European Environment Agency (EEA) published a note on Tuesday outlining the declining trends in biodiversity across the continent and highlighting how restoration will benefit both nature and social objectives, key points in the wake of parliamentary ruckus surrounding the bloc’s proposed Nature Restoration Act.

Australia’s opposition Coalition to support govt’s nature repair market bill

Australia’s main opposition parties in the right-wing Coalition has announced it will support the government’s nature repair market legislation, barring the chance for the Greens and independents in the Senate to leverage their influence to force changes to the proposed bill.

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CONFERENCES

Grow to Zero! – June 26-27, London: Insightful discussions on carbon market evolution? Thought leadership on blended finance for impact? Networking with impact investors and sustainability professionals? Find it all at Gold Standard’s Conference, Grow to Zero! 26-27 June 2023 at Kings Place, London. Tickets and agenda details available here: www.growtozero.co.uk

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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

“Mind-boggling” methane – Methane leaks alone from Turkmenistan’s two main fossil fuel fields caused more global heating in 2022 than the entire CO2 emissions of the UK, satellite data has revealed, The Guardian reports. Emissions of the potent GHG from the oil- and gas-rich country are “mind-boggling”, and an “infuriating” problem that should be easy to fix, experts have said. The data produced by Kayrros for the newspaper found that the western fossil fuel field in Turkmenistan, on the Caspian coast, leaked 2.6 mln tonnes of methane in 2022. The eastern field emitted 1.8 Mt. Together, the two fields released emissions equivalent to 366 Mt of CO2e, more than the UK’s annual emissions, which are the 17th-biggest in the world. The satellite data used by Kayrros to detect methane has been collected since the start of 2019 and Turkmenistan’s overall emissions show a level trend since then. Satellites have also detected 840 super-emitting events, or leaks from single wells, tanks, or pipes at a rate of a few tonnes an hour or more, the most from any nation.

Dirty secrets – Two major European asset managers have jointly filed a shareholder resolution at a Japanese electricity generator Electric Power Development, also known as J-Power, to disclose credible short and medium-term emission reduction targets aligned with the goals of the Paris Agreement, Reuters reported. J-Power operates Japan’s largest coal-fired power stations. Amundi and HSBC Asset Management filed the resolution with the Australasian Centre for Corporate Responsibility (ACCR), the non-profit climate group said in a statement on Tuesday. J-Power “has presented no indicative schedule for retirement of its coal-fired power assets – instead presenting a plan that involves capital expenditure into speculative technology such as ammonia co-firing prolonging the life of these assets,” the statement said.

Recognise – India is pressing the EU for mutual recognition of its carbon pricing system and to exempt micro-, small-, and medium-sized enterprises in certain sectors from the bloc’s carbon border adjustment mechanism (CBAM), an unnamed government official said. Companies from seven carbon-intensive sectors including steel, cement, fertiliser, aluminium, and hydrocarbon products will soon have to seek compliance certificates from the EU authorities to comply with the CBAM. India has asked the EU to give recognition to its yet-to-be-launched Carbon Credit Trading Scheme (CCTS), which is being designed by the power ministry. “India is dealing with the issue both at bilateral and multilateral levels. Bilaterally, we are asking the EU to have a mutual recognition agreement with us, and make a carve-out for MSMEs and if possible for the country as has been done in the case of some other countries,” the official said. Indian officials have previously warned that the country plans to file a challenge to the EU’s CBAM with the WTO. (Economic Times)

Catalytic converter – The Catalytic Climate Finance Facility (CC Facility) on Tuesday launched an open an open call for early-stage and market-ready blended climate finance vehicles seeking grant funding and technical support for scaling up. With an initial size of $12 mln, the CC Facility has plans to increase its funding up to $100 mln. The CC Facility will select promising solutions to launch and scale through grant funding and dedicated acceleration services to severely under-financed sectors in developing countries. There is a special call for ideas targeting climate adaptation for agriculture in Sub-Saharan Africa and South Asia.

EMEA

EU can replace Russian gas by 2028 – The EU can replace Russian gas with green energy by 2028, a report by the Oxford Sustainable Finance Group has found. The “Race to Replace” study estimates that up to 90% of the additional investment required, on top of currently planned European Green Deal spending, could be recouped over the next 30 years by getting rid of the need to purchase gas. The new analysis looks at the costs of replacing gas for electricity and heating with clean energy, instead of substituting supply with fossil fuels from other countries.

Decisions, decisions – BP expects to make a final investment decision in 2024 on a cluster of carbon capture projects in northern England, including a gas-fired power plant in Teesside, it said on Tuesday. The British government chose BP’s Net Zero Teesside (NZT) power plant among other projects in the region in March for the next phase of a government support programme to decarbonise industrial processes, prompting talks on commercial details. On Tuesday, the Department for Energy Security and NZT said it would take until mid-September to make a decision on whether to grant permission for the gas-fired power station, postponing a previous May deadline. The carbon captured from the (NZT) power plant would be pumped through pipes and fed into the Endurance (NEP) carbon storage site in the North Sea. BP had previously pencilled in a 2023 final investment decision for the Endurance carbon storage site. BP’s partners for the NEP include Equinor and TotalEnergies, with Shell pulling out of the project this year. (Reuters)

Another lawsuit – Environmental groups Greenpeace and ReCommon said on Tuesday they had launched a lawsuit against Italian energy group Eni for contributing to climate change with its fossil fuel businesses. Greenpeace said it had served notices about the lawsuit to Eni as well as the Italian Economy Ministry and Italian state lender Cassa Depositi e Prestiti (CDP), which jointly control the company with a stake of around 30%. The lawsuit would be a first for Italy. (Reuters)

Steel surcharges – Price and information provider Platts of S&P Global Commodity Insights has launched two new daily European carbon-accounted hot-rolled coil (HRC) steel price assessments to help bring greater transparency to the metals market’s decarbonisation journey.  The assessments mark Platts’ first-ever carbon-accounted pricing offering for the steel supply chain and reflect carbon emissions-related surcharges or upcharges implemented by market participants but not trade that includes offsets to reduce emissions profiles.

Mari-age – Digital solution providers MariApps and zero44 are to offer the shipping sector a ‘one stop shop’ solution for the EU ETS, covering reporting, compliance, stakeholder alignment, and trading. In a statement announcing the partnership, the companies said that customers are able to sign up now and the new offering will be available from Q4 2023. The zero44 software will help parties to keep track of the flow of allowances and money and provide direct access to EUA trading as well as the Union Registry. For MariApps customers, the zero44 solution will be integrated with smartOps, MariApps’ existing vessel performance data tool. (Bunkerspot)

AMERICAS

Supply and demand – US natural gas production will rise to a record high in 2023, while demand will fall, the US Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Tuesday. EIA projected dry gas production will rise to 101.09 bln cubic feet per day (bcfd) in 2023 and 101.24 bcfd in 2024 from a record 98.13 bcfd in 2022. The agency also projected domestic gas consumption would fall to 87.54 bcfd in 2023 and 86.05 bcfd in 2024 from a record 88.53 bcfd in 2022. If correct, 2024 would be the first time that output rises for four years in a row since 2015, Reuters reported. It would also be the first time that demand declines for two years in a row since 2006. The latest projections for 2023 were higher than the EIA’s April forecast of 100.87 bcfd for supply and 87.37 bcfd for demand. The agency forecast that average US LNG exports would reach 12.11 bcfd in 2023 and 12.73 bcfd in 2024, up from a record 10.59 bcfd in 2022. That 2023 LNG forecast was higher than the 12.08 bcfd EIA forecast in April. EIA projected US coal production would fall from 597.2 mln short tons in 2022 to 577.1 mln in 2023, the lowest since 2020, and 491.2 mln in 2024, the lowest since 1963, as natural gas and renewable sources of power displace coal-fired plants. As gas demand eases and power producers burn less coal, EIA projected CO2 emissions from fossil fuels would fall from 4.964 bln tonnes in 2022 to 4.830 bln in 2023 and 4.807 bln in 2024. That compares with 4.580 bln in 2020, which was the lowest since 1983 because the pandemic depressed demand for energy.

Not clear in New York – With a month remaining in New York’s scheduled legislative session, it is not clear lawmakers will take up a broader role in cap-and-trade before the regulations are due to be finalised at the end of the year, Politico reported. Governor Kathy Hochul and the legislature last week agreed a budget that required lawmaker sign-off to spend the money raised from cap-and-trade auctions and establishing a fund for rebates, but the proposal scrapped virtually all programme design details that previous proposals laid out.

Skyview’s the limit – Renewable energy project developer Skyview Ventures on Tuesday announced the completion of its second Grid Carbon Offsets (GCOs) project in West Virginia. Skyview said that the project financing will be supplemented by the sale of GCOs, with buyers having already paid $8.50 per ton in order to receive 15 years’ worth of offsets from the company’s first GCO project, according to its website. A Skyview Ventures employee told Carbon Pulse the two projects will generate 9,000 credits over their lifetimes.

Reforestation for transportation – Winnebago Industries, makers of the famous RVs, announced a partnership with environmental charity The Nature Conservancy in a press release on Tuesday to embark on a reforestation project in Minnesota and blue carbon development in Florida. Winnebago is headquartered in Minnesota and owns a boat manufacturer, Chris-Craft, in Florida. The effort is part of Winnebago Industries’ pledge to reach net zero by 2050.

ASIA PACIFIC

Indigenous funds – Indonesian civil society groups have launched a multimillion-dollar fund aimed at empowering Indigenous and local communities across the Southeast Asian country in the fight against climate change, Barron’s reports. The Nusantara Fund – the first direct funding mechanism for indigenous and local communities in the country – was launched by the environmental group Walhi, the Consortium for Agrarian Reform (KPA), and Indigenous group NGO AMAN. It received $3 mln in initial support from international philanthropic organisations such as the Ford Foundation and Packard Foundation. It is part of a $1.7 bln Forest Tenure Pledge that was first announced at COP26 in Glasgow, which recognised the important role of Indigenous and local communities in protecting tropical forests and their contribution to mitigate climate change. Indonesia, home to the world’s third-largest rainforest area, claims to have made some progress by reducing the rate of primary forest loss for five straight years up to 2021, but total forest cover keeps receding.

Budget boost – The New Zealand government will commit NZ$300 mln ($189 mln) to its green fund, NZ Green Investment Finance (NZGIF),  in it’s latest budget, the government announced. Climate Change and Environment Minister James Shaw said the latest funding boost would take NZGIF’s pool of capital to NZ$700 mln. He said the investment would support existing and future projects, including transport, process heat, infrastructure and early-stage companies. As at June 2022, the total estimated lifetime emissions reductions of NZGIF’s investments was 580,000 to 710,000 tonnes of CO2e, according to the government.

VOLUNTARY

Adani out – Three Adani Group companies have lost their endorsement from the SBTi corporate climate goal template verifier, a blow to the industrial conglomerate’s attempt to reposition itself as a leader of India’s energy transition, Bloomberg reports. Adani Green, Adani Transmission, and Adani Ports & Special Economic Zone, were removed in late April from SBTi’s list of “companies taking action” after the body concluded that the involved companies are not in conformity with the initiative’s standards and policy requirements. In February a filing revealed Adani was using stock from its Green companies as collateral to help finance its controversial Carmichael coal mine. The Adani Group said it was “optimistic” the SBTi would “review and reverse its decision.”

Mind the gap – Australia-headquartered Carbon Growth Partners (CGP), a carbon markets investor, is banking on a forthcoming correction in voluntary credit prices to bridge the gap between impact and for-profit investing, FinanceAsia reports. Following a successful debut fund, the firm recently launched a second fund focused on investments that help reduce global CO2 emissions. CGP is targetting an internal rate of return of over 20%, defying the notion that impact investing yields lower returns. The company expects carbon credit prices to rise exponentially before 2030 due to the current mispricing of these assets and structural constraints in their future supply. CGP’s first fund raised $100 mln against an initial target of $100 mln, within two fundraising rounds in the space of three weeks.  Its second fund – the Carbon Growth Fund, a Cayman-domiciled, open-ended fund with a two-year lock-up period – has already achieved a first close of $30 mln, with plans to raise an additional $20 mln. As a general partner, CGP invests about 80% of raised capital in the primary market, meaning that the firm buys credits directly from projects and project developers, with the remaining 20% deployed across the secondary market. “Ultimately we want that to get to $100 million by the end of this year, and to a total of $200-250 million in about a year from now,” founder and CEO Rich Gilmore told FinanceAsia.

SCIENCE & TECH

Captured value – Technology firm Aker’s carbon capture unit and developer Carbfix have extended their partnership to explore full CCS value chains locations in Europe and North America with a two-year non-exclusive MoU. The two Nordic firms aim to develop sites capturing between 100,000- 1 mln tonnes of CO2 a year, exploring Carbfix’s rock-injecting technology that has so far mineralised over 90,000 tonnes of CO2 in Iceland. In 2021, both companies joined forces to work on cutting emissions at Elkem Iceland’s ferrosilicon plant.

Hot in Hanoi – Vietnam has recorded its highest ever temperature, just over 44C, with experts predicting it would soon be surpassed because of climate change, BBC reports. The record was set in the northern province of Thanh Hoa, where officials warned people to stay indoors during the hottest times of the day. Other countries in the region have also been experiencing extremely hot weather. Thailand reported a record-equalling 44.6C in its western Mak province. Meanwhile Myanmar’s media reported that a town in the east had recorded 43.8C, the highest temperature for a decade. Both countries typically experience a hot period before the monsoon season, but the intensity of the latest heat has broken previous records. Vietnam’s previous record temperature of 43.4C was set in central Ha Tinh province four years ago.

AND FINALLY…

Don’t stop not believing – Since he started in the job, Canadian Conservative Party Leader Pierre Poilievre has woven his promises to cut CBC funding and end the Liberal government’s carbon levy into almost all his public remarks, but a new poll says many Canadians don’t believe he would actually do either. Abacus Data released survey results on Tuesday and found that some of the Conservative leader’s most consistent promises are falling on very sceptical ears. Poilievre, like several Conservative leaders before him, regularly says he will eliminate the carbon levy, repeating that message in speeches, the House of Commons, and social media, but only 46% of Canadians believe he will probably or definitely make that move. A further 28% felt he probably or definitely would keep the tax in place, and 26% said they didn’t know. (Montreal Gazette)

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