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TOP STORY

US plans to launch carbon removals purchasing programme by year-end, as senators push reverse auction mechanism

US President Joe Biden’s administration aims to expand its support for carbon removals beyond direct air capture by launching a purchasing programme covering all forms of removals by year-end, a government official told a conference this week, as a bipartisan group of senators on Friday released a bill to support such solutions through a reverse auction.

EMEA

France goes solo on new tax credit and nuclear, asks EU for a break

France has announced a new tax credit for green investments and cash incentives for purchasing new electric cars made in Europe, while President Emmanuel Macron called for “a European regulatory pause” late on Thursday during a speech about reindustrialising the economy.

Eyeing an end to war, Ukrainian industry starts research on introducing an ETS

Representatives of companies operating in Ukraine’s agricultural, energy, steel, cement, chemical, woodworking and processing industries announced on Friday that they have commenced research towards implementing a carbon pricing system in the country once its brutal conflict with Russia ends.

Euro Markets: EUAs give up early short-covering gains but end week up 4.1% amid sharply lower gas prices

European carbon prices posted a 4.1% weekly increase after the market first clawed back much of the previous session’s losses amid strong demand in the final auction of the week, before giving back most of the gains in the afternoon as gas prices tumbled.

Member states make scant progress in handling out free 2023 EUAs over past fortnight

EU member states made scant progress over the past fortnight in handing this year’s free EUA allocation to heavy industry, according to data released late Friday.

EU ETS non-compliance rate holds steady at 3.2%, data shows

More than 3% of eligible installations and airlines covered by the EU and/or Swiss carbon markets remain in non-compliance, according to data published by the European Commission last week.

SSE approves second battery storage project at former UK coal power plant site

UK-based SSE Renewables has given the green light for a 150MW battery energy storage system (BESS) at the site of a former coal-fired power plant.

VOLUNTARY

Tanzania govt holds carbon market talks with private sector, though questions surround one company involved

Tanzania has opened discussions with the private sector about developing its forest carbon market, but questions have arisen surrounding one of the foreign companies involved.

Canadian ag tech company raises C$15 mln to aid in soil carbon verification

A Montreal-based soil science firm this week announced it has netted C$15 mln ($11 mln) from investors to expand its technology that it says will help establish a reliable method to verify nature-based carbon credits.

Rating agency upgrades ARR project in Chile, but downgrades Kenya water purifying project

A carbon credit rating agency has upgraded a Verra-accredited afforestation project in Chile following a review, noting a low chance of over-crediting because of the project’s conservative approach to carbon accounting.

Shell signs LED lighting deal for Indian offset project to avoid emissions of over 60 MtCO2e

A US-headquartered offset developer has teamed up with a Shell subsidiary to finance one of the largest household energy efficiency lighting projects in the world, the company announced on Friday.

ASIA PACIFIC

Australia opens new ERF exit window for ACCU contract holders

Australia has opened a third pilot exit window for carbon abatement contract (CAC) holders with the Emissions Reductions Fund (ERF) to sell their Australian Carbon Credit Units (ACCUs) on the secondary market, the Clean Energy Regulator announced Friday.

NZ forestry slash report calls on govt to expand scope of ETS review, stricter forest management

A government commissioned inquiry into the devastating damage caused by forestry slash in the wake of Cyclone Gabrielle has urged Wellington to expand the scope of the ETS to consider how it encourages monoculture exotic tree plantings.

CN Markets: CEA price edges up with sustained liquidity, but outlook bearish

Allowance prices in China’s national emissions market edged up over the past week amid sustained liquidity, though bearish sentiment lingers as participants are still awaiting more guidance from the government.

AMERICAS

US Carbon Markets and LCFS Roundup for week ending May 12, 2023

A summary of legislative, regulatory, and policy action on carbon, clean fuel standard, and clean energy markets at the US federal and subnational levels this week, including the updated status of several carbon market and climate-related California bills, and the Vermont legislature overriding a veto of a bill to draft clean heat standard regulations.

Speculators sell CCAs ahead of auction, producers continue to reduce RGGI net length

Financial entities sold off a significant chunk of their California Carbon Allowance (CCA) net length this week as they continued to pare down in RGGI, while compliance players continued to shed holdings across the board, data from the US Commodity Futures Trading Commission (CFTC) showed Friday.

BIODIVERSITY (FREE TO READ)

Gabon restructures debt through Nature Conservancy to fund marine conservation project -report

Gabon is in talks with the Nature Conservancy (TNC) to facilitate a $500 mln debt swap for a marine conservation project in the country arranged by Bank of America, according to a media report.

Govt-commissioned panel urges New Zealand to set up biodiversity credit market

New Zealand should establish a biodiversity credit market to help drive sustainable land use and increase resilience, concluded a report released Friday by the government-appointed inquiry panel into the devastating impacts of Cyclone Gabrielle in February.

Never coming back: Abandoned land brings opportunities, challenges for biodiversity target planners

Land equivalent to an area half the size of Australia has been abandoned over the past five decades, though policymakers and conservationists have spent little time trying to understand how that impacts biodiversity and how such territory can contribute to the world meeting its targets under the Global Biodiversity Framework (GBF), according to research published this week.

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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

You’re dismissed – A London judge dismissed a lawsuit accusing Shell’s board members of failing to manage climate change risks, Bloomberg reports. In a decision published Friday, the judge threw ClientEarth’s suit out before a full hearing as there isn’t a clear case against Shell. The environmental law firm now has the opportunity to request an oral hearing to ask the court to reconsider. “The claim is utterly misconceived and a clear misuse of the English courts,” a spokesperson for Shell said in an emailed statement. “Our directors have always complied with their duties and acted in the company’s best interests.” A spokesperson for ClientEarth didn’t immediately respond to a request for comment.

The problem with Joe – In the second installation of a new series explaining how key commodities are affected by and contribute to climate change, an in-depth Carbon Brief visual feature looks at coffee – from how it is grown in the world’s bean belt to where it is roasted, traded and consumed – with a special focus on Colombia and Ethiopia. The first feature in the series looked at wheat.

ASIA PACIFIC

Green light for the black stuff – Australian Environment Minister Tanya Plibersek has for the first time granted approval for a new coal mine, sparking accusations from conservation groups that the government is fuelling global warming, The Age reports. Plibersek last night signed off the final environmental approvals for Australian miner Bowen Coking Coal’s Isaac River project, a relatively small mine in Central Queensland with a short, five-year lifespan producing steel-making coal for export. She said there were no grounds to reject the company’s development application, which must be considered on a case-by-case basis and not for its cumulative contribution to greenhouse gas emissions. The federal environment minister has the final say, under the Environment Protection and Biodiversity Conservation (EPBC) Act, over major projects that will impact matters of national environmental significance such as endangered plants and animals as well as World Heritage areas and national parks.

AI for carbon neutrality – South Korea’s Ulsan National Institute of Science and Technology (UNIST) announced that it had entered a strategic partnership with the Abu Dhabi National Oil Company (ADNOC), the largest state-run oil company in the United Arab Emirates (UAE), to lead the global digital carbon-neutral market, UNIST announced in a statement. The partnership aims to lead the development of a decarbonisation optimisation system for large-scale oil refining and petrochemical processes, leveraging the power of Artificial intelligence (AI). The signing of the strategic collaboration agreement between UNIST and ADNOC took place at the Abu Dhabi Energy Center. The joint efforts of UNIST and ADNOC will launch two digital carbon-neutral leading projects in the second half of this year. These projects are focused on developing AI technology for the optimisation of continuous multi-step processes of liquid chemicals in oil and petrochemical plants, as well as environmental monitoring systems that utilise AI and satellite images. Additionally, a digital carbon-neutral joint research center will also be established as early as this year.

Ban lifted — The Malaysian government has lifted its ban on renewable energy exports, a move that experts say will boost the local renewables sector and benefit neighbouring Singapore, Eco-Business reports. In a slew of announcements on Malaysia’s renewable energy policies, economy minister Rafizi Ramli said that the lifting of the renewable energy export ban was agreed at a cabinet meeting on 3 May. At the same meeting, the government also reached a consensus on a targeted renewable energy mix of 70% by 2050, which would require an eleven-fold increase in renewable energy capacity from current capacity, Rafizi said. Malaysia’s previous target to achieve a 40% renewable energy mix by 2035 was announced in late 2021. Although details on the renewable energy trade mechanism have yet to be announced, Rafizi said that more details on the additional layers of policy frameworks and incentives will be unveiled in the coming months.

SMR plans – Seoul-based GS Energy has signed a memorandum of understanding (MoU) with Uljin County in North Gyeongsang Province, South Korea, to consider the use of small modular reactor (SMR) technology to provide heat and power to a planned industrial complex centred around nuclear and hydrogen energy, according to World Nuclear News. The county reportedly plans to build an SMR plant with six NuScale SMR modules, and the construction of the plant would likely begin in 2028, as it may take 5 years to receive approval from the Korean government.

AMERICAS

You *can* say Kingston doesn’t love you – The US’ largest public utility released plans Friday to build a new natural gas plant in Tennessee, largely dismissing renewable energy alternatives one day after President Joe Biden’s administration proposed strict new limits on GHG output from power plants. The Tennessee Valley Authority is replacing its coal-burning Kingston Fossil Plant, the site of a massive coal ash spill in 2008. TVA’s draft environmental impact statement says constructing a 1500MW gas plant along with 3-4 MW of solar and 100 MW of battery storage at the Kingston site is “the best overall solution to provide low-cost, reliable energy to the TVA power system.” TVA considered replacing the Kingston plant with 1500 megawatts of solar and 2,200 megawatts of battery storage at various locations around the Tennessee Valley, but nixed solar as less reliable and spent only a few pages on the analysis. (AP)

Please proceed – A Montana judge on Friday said a climate change lawsuit from young people challenging the state’s pro-fossil fuel policies will proceed to trial despite efforts by officials to derail the case. Attorneys for the 16 young plaintiffs alleged state officials were trying to avoid the upcoming trial when Republican lawmakers in March repealed the state’s energy policy. The plaintiffs and their backers are hoping to use the two-week trial that’s set to start on June 12 to highlight the dangers of fossil fuel emissions that scientists say are making climate change worse. Montana’s Republican Attorney General Austin Knudsen, had asked state Judge Kathy Seeley to dismiss any part of the case touching on the cancelled energy policy. Attorneys for the state also wanted more time to resolve a dispute over recent amendments to a law that allows officials to ignore GHG emissions when approving fossil-fuel projects. The case was brought in 2020 by attorneys for the environmental group Our Children’s Trust, which since 2010 has filed climate lawsuits in every state on behalf of youth plaintiffs. Many of the cases – including a previous one in Montana – have been dismissed. None have yet reached trial. (AP)

RGGI auction study – The most significant policy changes within the RGGI cap-and-trade programme, positively impacted the auction clearing price, two researchers with the Royal Melbourne Institute of Technology said in a paper published in the Munich Personal RePEc Archive. The study examined firm behaviour and auction performance from both theoretical and empirical perspectives, and utilised auction theory to offer theoretical insights regarding the optimal bidding behaviour of firms participating in RGGI auctions. Additionally, the authors analysed data from the past 58 RGGI auctions to assess the relevant parameters, employing panel random effects, and machine learning models.

Carbon capture chums – Carbon America and Svante Technologies on Thursday announced a collaboration to focus on commercial deployment of carbon capture, utilisation, and storage (CCUS) projects in the US. In a press release, the companies said they will work together to identify and deploy projects which can rapidly GHG emissions, leveraging Svante’s novel solid sorbent carbon capture technology and Carbon America’s expertise in CCUS project development.

EMEA

Situation critical – Turkey’s updated Nationally Determined Contribution (NDC) submitted last month has been criticised by Climate Action Tracker as being “critically insufficient” for its incompatibility with the Paris Agreement’s 1.5C temperature goal – the worst possible rating awarded by the think-tank. The country’s current policies already align with the goals set out in the NDC, implying no further reductions in real-world emissions will be made. Despite having the world’s third-largest coal pipeline, Turkey has yet to develop a feasible coal phaseout plan for the power sector by 2030, despite being committed to achieving net zero emissions by 2053. Over the past two decades, Turkey’s energy demand has grown significantly, leading to a heavy reliance on oil, coal, and fossil gas imports. CAT said this not only burdens the economy but also exposes the country to volatile commodity markets, and despite global awareness of the climate crisis, Turkey aims to become a fossil gas hub. To reverse the increasing trend in emissions, CAT recommended that Turkey maximises its renewable energy potential, develops a coal phaseout plan, sets stronger 2030 NDC targets, and diversifies its renewable energy sources. Unfortunately, Turkey’s National Energy Plan for 2035 does not put the country on track for a coal exit but instead increases installed coal capacity. In transportation, Turkey has limited policies to reduce emissions but plans to manufacture its own electric vehicles (EVs) by the end of 2023.

Ban the ban – The planned ban on new gas boilers in Germany is facing strong opposition in parliament and may not be fully implemented until 2030. In 2021, the German government decided that new boilers must run on 65% renewable energy from 2025, effectively banning the gas-burning variety. This date was advanced by a year due to Germany’s tight gas supply following Russia’s invasion of Ukraine. However, the Free Democratic Party (FDP), a junior member of Germany’s three-party coalition, has always opposed the proposal. A leaked draft law to implement the ban in 2024 caused controversy, and though the government endorsed the ban, the FDP quickly disowned the deal. Now, both the parliament and the Bundesrat, representing Germany’s 16 federal states, are scrutinising the law. The Bundesrat insists that 2024 is too soon for the ban, while the FDP aims to change the law as much as possible. It is almost certain now that the ban will not commence in 2024, according to media reports. Meanwhile, sales of oil and gas heating systems in Germany have surged ahead of the planned law. The Federation of the German Heating Industry reports substantial increases in the sale of gas and oil systems, electric heat pumps, and bioenergy heating systems. (Climate Home, Clean Energy Wire)

Laser-focussed – Scotland may conduct an annual airborne laser scan of the country’s landscapes to monitor the health of its forest, peatlands and natural ecosystems, the Guardian reports. The Scottish government is weighing up the benefits of annual 3D imaging flights to provide regular data on nature restoration across the temperate rainforests of the west coast to the peaks of the Cairngorms, akin to an annual CT scan for biodiversity. The laser scans – known as lidar (light detection and ranging) – would generate a three-dimensional map of Scotland every year. The data could be used to assess progress on climate and biodiversity targets, provide higher quality data for its carbon market by monitoring changes in forests and peatlands, and study how ecosystems change as the world warms. Despite billions of pounds dedicated to nature restoration for climate and biodiversity across the globe, monitoring often relies on measurement techniques that are decades old. Lidar technology has been shown to provide accurate assessments on a landscape scale.

Innovation Fun! – On June 13, the European Commission’s DG Climate Action will host a hybrid Stakeholder Consultation Event. The event will update about the achievements and developments of the Innovation Fund and gather views from stakeholders on future calls for proposals, following the revision of the ETS Directive. The event will also be an opportunity for sector specific stakeholders to provide their contribution on the design of the 2023 Innovation Fund call for proposals. Registrations to participate in the event in person (on a first come first served basis, in person participation limited to maximum two participants per organisation) or online are now open.

AND FINALLY…

The sweet smell of (no) carbon – Supermodel Cara Delevigne has teamed up with Swedish utility Vattenfall to promote the benefits of green hydrogen in a video for “Industrial Emissions Face Mist“. In the video Delevigne sashays through plumes of water mist, demonstrating that green hydrogen is an emissions-free process that produces only water as a by-product. The clip was made to highlight the fossil-free Hybrit steel technology that Vattenfall, SSAB and LKAB are developing. Hybrit uses hydrogen that is made using renewable electrolysis rather than by reforming with coal or natural gas, and uses the hydrogen instead of coal or coke to reduce iron ore in the steelmaking process, resulting in zero-emissions steel.

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