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TOP STORY
Research suggests effective international cooperation under Article 6 could double emissions reductions
The effective trading of mitigation outcomes under the Paris Agreement’s Article 6 could more than double the volume of carbon reductions that nations make towards their national targets, according to a report published Thursday.
AMERICAS
Brazilian state to ink 250 mln REDD credit deal with Swiss energy trading firm
An Amazon-adjacent Brazilian state will sign a 10-year agreement to supply hundreds of millions of avoided deforestation carbon credits to a Swiss commodity trader, the subnational government announced Wednesday.
California legislature declines stronger 2030 GHG goal and LCFS credit restrictions, moves cap-and-trade review to first floor vote
A California legislative committee on Thursday held bills that would have ratcheted up the state’s 2030 GHG reduction target and throttled Low Carbon Fuel Standard (LCFS) crediting from dairy digesters, though lawmakers did send to the floor proposals to review the state’s WCI-linked cap-and-trade programme and implement other climate policies and disclosure requirements.
WCI Markets: California, Washington carbon markets stagnate amidst auction lull
California Carbon Allowance (CCA) prices traded through a narrow range into the WCI Q2 allowance sale on Wednesday, while Washington Carbon Allowances (WCA) prices held flat this week ahead of the upcoming auction at the end of the month.
Canada govt watchdog report on steep clean fuel standard costs generates stern rebuke
Canada’s government budget watchdog on Thursday said the impending Clean Fuel Regulations (CFR) will cost some residents over C$1,000 in 2030, though Prime Minister Justin Trudeau’s administration and researchers said the analysis was highly flawed.
VOLUNTARY
VCMI aims to bolster government carbon credit regulatory efforts
The Voluntary Carbon Market Integrity initiative (VCMI) aims to lend a helping hand to governments as they accelerate market regulation, with the group providing advice to support both host countries in VCM oversight, as well as buyer countries in claims requirements.
US startup secures $53 mln carbon removals offtake agreement
A carbon removals buyers’ club has struck a $53 mln multi-year offtake deal with a San Francisco-based startup, agreeing to buy 112,000 tonnes worth from stored waste biomass between 2024 and 2030.
Carbon removal marketplace and biochar firm ink offtake agreement
A carbon marketplace has signed a long-term offtake agreement with a biochar technology firm to secure removal units in a bid to scale the nascent market, they said in a release Thursday.
Blockchain venture rolls out funding pool to help finance mangrove projects
A blockchain-based venture has unveiled its first liquidity pool to help boost the sale of ‘forward’ carbon credits for mangrove restoration projects.
ARR project in Ghana downgraded by rating agency in review of the sector
A carbon credit rating agency has downgraded a Verra-accredited reforestation project in Ghana amid concerns about additionality and over-crediting.
EMEA
UK govt slashes 2021-25 free ETS allowance allocations by another 8 mln due to diminished industrial output
The UK government has slashed free ETS allowance allocations between 2021-25 by a further 8 million tonnes due to reduced production at industrial plants, according to data published late Thursday.
ANALYSIS: EU carbon price tussle reflects split views on near-term market direction
European carbon prices are being pulled in opposite directions amid a battle between bearish near-term fundamentals and stubborn technical trading targeting levels in the upper €80s, but some market players see the potential for values to slump to levels not seen since January as a paucity of demand weighs.
UK awards CCS licences with potential to store 30 million tonnes of CO2 a year
The UK’s plans to bolster carbon capture and storage (CCS) took a step closer on Thursday after the government offered 12 companies a total of 20 operating licences with the potential to bury around 30 million tonnes of CO2 a year, or nearly 10% of the country’s current emissions.
Euro Markets: EUAs climb to two-week high on steady covering demand, UKAs extend gains
European carbon rose to its highest in more than two weeks on Thursday amid steady afternoon buying in a thin market as many offices were closed to observe a public holiday, while UK allowances extended Wednesday’s gains to hit a three-week high after the latest fortnightly auction cleared at a record high.
ANALYSIS: Experts caution “opportunistic” Zimbabwe carbon deals bonfire to have wider-ranging consequences for voluntary market
(Additional comments added) – Zimbabwe’s decision to void all existing carbon credit agreements and cream off future revenues from credit sales is an opportunistic move that could render offset projects in the country and elsewhere unattractive or unviable, while also potentially spurring other nations demand similar concessions, stakeholders told Carbon Pulse.
ASIA PACIFIC
Singapore, Bhutan sign Article 6 carbon trading cooperation MoU
Singapore and Bhutan have signed a Memorandum of Understanding to develop a framework to allow the trading of correspondingly adjusted Article 6 carbon credits by the end of the year, as a way to help the two countries achieve their climate goals.
Australia’s Climate Change Authority launches consultation on 2035 NDC, carbon farming rules
Australia’s Climate Change Authority (CCA) has begun consulting on developing the country’s 2035 emissions reduction target, its climate advice to government, and reviews on the country’s emissions reporting and carbon farming rules, releasing an issue paper Thursday on the key themes it will consider.
New Zealand budget funds ETS reform and carbon exchange, but climate fund slashed due to low NZU price
The New Zealand government has committed a modest amount of cash to design a new regulatory regime for the country’s ETS as well as a centralised exchange for NZU trading in its latest budget, announced Thursday.
INTERNATIONAL
Research suggests effective international cooperation under Article 6 could double emissions reductions
The effective trading of mitigation outcomes under the Paris Agreement’s Article 6 could more than double the volume of carbon reductions that nations make towards their national targets, according to a report published Thursday.
Nuclear capacity must triple to meet global climate goals -report
Nuclear capacity must triple by 2050 if the world is to remain within the upper 2C warming limit of the Paris Agreement, a report has calculated, with the cost of scaling the technology seen as the largest hurdle.
BIODIVERSITY (FREE TO READ)
Biodiversity Pulse Weekly: Thursday May 18, 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).
New partnership to scale sustainable landscape carbon, biodiversity project investments
A new partnership announced Thursday will structure and help finance large-scale conservation and restoration projects in biodiversity-rich landscapes with a view to generate nature-based environmental credits.
Collaboration, markets can help bolster South Africa’s struggling provincial nature reserves, study says
Public-private collaboration and sustainable financing through biodiversity and carbon markets can help improve the situation for South Africa’s vast network of provincial nature reserves that are increasingly failing, a recent study has found.
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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
Mixed messages – The United Arab Emirates has appointed 31 people, including fossil fuel executives and climate campaigners, to its advisory board for November’s COP28 climate talks. The group includes the chair of an Indian gas company, the former head of China’s national oil company, the ex-boss of the UK’s BP oil firm and the CEO of an Emirati oil and gas producer. It also features the head of the African climate foundation, a veteran Bangladeshi anti fossil-fuel campaigner, and the former president of the climate-threatened Marshall Islands. (Climate Home)
Clean profits – Shell executives are telling their renewable power business that it needs to become more profitable, not just deliver lower carbon emissions, and pull back from the less successful elements of its clean-energy strategy. That was the message from Steve Hill, executive vice president of Shell Energy, at an internal town hall for his team on Wednesday, according to comments from the meeting reviewed by Bloomberg. It’s part of a revamped strategy from new CEO Wael Sawan that will be fully revealed in June, as he seeks to improve Shell’s performance and eliminate businesses that aren’t producing adequate returns.
Forest fervour – India’s exports worth about $1.3 bln could be affected every year due to the EU’s anti-deforestation law passed earlier this week, LiveMint reports, citing a report by economic think-tank Global Trade Research Initiative (GTRI). The regulation sets mandatory due diligence rules for all operators and traders who place, make available or export the following commodities from the EU market: palm oil, cattle, wood, coffee, cocoa, rubber and soy. Read Carbon Pulse’s reporting on the measure.
AMERICAS
Political power plant pressure – White House officials pressured the US EPA to deliver a stronger rulemaking than it had originally planned, ahead of the agency’s emissions limits on fossil fuel-power plants proposal, Politico reported Wednesday. Six anonymous sources told the news publication that the White House asked for a proposed rule that would be enacted sooner and would cover more emissions than what the EPA originally suggested. Previous attempts to regulate power plant emissions have failed under both Obama and Trump, with the Supreme Court crushing the Clean Power Plan and the Affordable Clean Energy rule, respectively.
PEER pressure – Senator Tom Carper (D), chair of the US Senate Environment and Public Works Committee is backing the Promoting Efficient and Engaged Reviews (PEER) Act – an accelerated two-year permitting timeline for projects covering renewable energy deployment, coastal erosion improvements, and transmission infrastructure build-outs, among other projects, E&E news reported Thursday. This version of the bill was introduced with Senator Brian Schatz (D), with other Democrat original co-sponsors Senators Sheldon Whitehouse, Tina Smith, and Chris Murphy.
Smelting CCS – Engineering consultant Wood is supporting mining company Teck Resources’ pilot plant capturing carbon from sulfide ores in the smelting process in Trail, British Columbia, the company’s press release noted on Thursday. Teck’s smelter and refining complex in Trail is one of the world’s largest integrated zinc and lead operations, producing a variety of specialty metals, chemicals, and fertilizer products. The pilot carbon capture plant is scheduled to be commissioned in the second half of 2023.
Enter the Chamber – The Amazon Chamber, the first business chamber connecting the US private sector with entrepreneurs from the Amazon rainforest, has officially launched in Miami. The organization aims to support the Amazon bio-economy by connecting under-represented entrepreneurs from Amazonian regions with North American investors. By doing so, they provide opportunities for American investors to back sustainable, early-stage ventures and help protect one of the world’s most important biomes. The Amazon Chamber has a diverse roster of businesses from sectors like agriculture, healthcare, and ecotourism, and is currently raising capital with a target of $2 mln this year. (Business Journals)
EMEA
Green investment – Venture capital investments in Germany’s startups specialising in climate protection technologies fell to the second highest level ever last year, according to public development bank KfW. Total investments decreased to €1.6 bln in 2022 from a record €2.6 bln in 2021. The most recent decline is primarily due to the gloomier general conditions as a result of the shift in interest rates and the overall economic slowdown, KfW said, adding it did not expect an increase this year. Yet, the bank stressed that investments are clearly on the rise in the longer-term, pointing to the mere €53 mln in venture capital the climate tech start-ups collected in 2009. (Clean Energy Wire)
Green pause – The European Commission has delayed four key pieces of Green Deal legislation, according to the new Commission programme seen by Politico. With European elections now set for June 6-9, 2024, the holdup will increase pressure on Ursula von der Leyen’s Commission to push through its mammoth green agenda before the clock runs down on its mandate even as most climate-related elements are completed or at a late stage. The executive will not publish the food and biodiversity package including a new soil health law until July 5 — a month later than originally planned. The delay comes as the EU’s green policies face pushback from the centre-right EPP political group, which has been pitching itself as a defender of farmers ahead of next year’s vote.
ASIA PACIFIC
Trip only – Japan’s Idemitsu Kosan has shipped a load of so-called “carbon neutral” biomass styrene monomer to Chimei Corp. in Taiwan. However, unlike others who are starting to use carbon credits to offset the full lifecycle emissions of the products they ship, Idemitsu and Chimei only offset the carbon output from the voyage itself, which required 193 voluntary carbon credits of unspecified origin – likely at a cost of below $1,000 in total.
Vroom vroom – Four Japanese motorcycle manufacturers are teaming up to develop a hydrogen-powered engine that could help cut carbon emissions and contribute to Japan’s goal of carbon neutrality. Honda Motor, Yamaha Motor, Suzuki Motor, and Kawasaki Motors unveiled a plan to jointly set up a body as early as this month to research and develop hydrogen engines for motorcycles. Each company will work on a different research area. They hope to apply their findings to mini-vehicles and drones as well. Honda says “the use of hydrogen poses technical challenges, including fast flame speed and a large region of ignition, which often result in unstable combustion” and “limited fuel tank capacity in case of use in small mobility vehicles.” The four companies have already worked together on other carbon-neutrality projects, such as providing a service for sharing replaceable batteries for electric motorcycles. (NHK)
VOLUNTARY
Initial issuance – Toronto-based VER financier Base Carbon on Thursday announced offset standard developer and manager Verra has issued the first 1.02 mln Verified Carbon Units (VCUs) generated from the company’s Vietnam Household Devices Projet. Citigroup Global Markets was already contracted to purchase the first 7.4 mln credits generated from the project. Additionally, Base Carbon said it appointed Kwesi Marshall at CFO and Wes Fulford as president.
SCIENCE & TECH
Powered by sunshine – Researchers have created an artificial leaf that mimics photosynthesis and uses sunlight to convert CO2-infused water vapour into ethanol and propanol that could be used to power a car, Daily Mail reported Thursday, citing a study led by University of Cambridge researchers that was published in the Nature Energy journal. The Cambridge researchers made their artificial leaf from multiple layers including copper, glass, silver, and graphite, using copper and palladium for the catalyst. In the presence of sunlight, the catalyst converts CO2 to ethanol and propanol, and the water into oxygen. The technology is still at proof-of-concept lab scale with modest efficiency, the researchers warned, but could provide an alternative to land-based ethanol used to blend into petroleum. The researchers are now working to improve the light absorbers so that they can better absorb sunlight, as well as the catalyst so it can convert more sunlight into fuel, the report noted. Further work will also be required to make the device scalable so that it can produce large volumes of fuel – although it’s unclear how much this would cost.
AND FINALLY…
Exxes and Nos – Exxon Mobil pushed back against investors pressing the largest US oil producer to report on the risks to its business from restrictions on GHG emissions and potential environmental disasters. In a reply on Wednesday to proxy advisor Glass Lewis, Exxon said the prospect of the world achieving net zero emissions by 2050 is remote and should not be further evaluated in its financial statements. A shareholder proposal seeking a report on the cost of having to abandon projects faces a shareholder vote on May 31. Glass Lewis backed the initiative, concluding Exxon could face material financial risks from the net zero scenario. (Reuters)
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