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TOP STORY

Aviation rebound helps lift UK ETS emissions 2.5% in 2022

Verified emissions in the UK ETS rose by 2.5% in 2022, the government announced late Thursday, with the increase in output driven by a post-pandemic rebound in aviation.

INTERNATIONAL

PREVIEW: Pressure builds on UAE hosts to set priorities ahead of crunch UN climate summit

Pressure is mounting on the UAE ahead of the UNFCCC’s intersessional climate change conference in Bonn next week, with criticism building among stakeholders over the Gulf state’s hosting of the year-end COP28 UN climate summit due to the lack of a clear agenda, split priorities among negotiating parties, and the potential influence of the fossil fuel industry.

Article 6 body to drop tonne-year accounting from UN carbon market recommendations

The body responsible for helping to shape which mitigation activities can be credited under the Paris Agreement on Thursday signalled it will drop the controversial tonne-year accounting method from its recommendations.

Swiss carbon buyer issues plea for Article 6 project development ideas

Switzerland’s main carbon credit buying entity has issued a plea to project developers to reach out to pitch ideas under Article 6.2, the mechanism for bilateral carbon trade between countries to help meet Paris Agreement targets, amid a paucity of available opportunities in the market.

EMEA

Next steps on EU carbon border levy coming soon, as Brussels readies details

The European Commission is likely to publish its first set of implementation and delegated acts in the coming weeks related to the recently-passed carbon border adjustment mechanism (CBAM), with experts weighing whether details are likely on the thorny issue of carbon price equivalency.

EU lawmakers back law forcing companies to disclose carbon footprint

The European Parliament voted on Thursday to approve its stance on a package of rules that will force EU companies to disclose their carbon footprint and take steps to reduce it as part of corporate sustainability requirements.

Euro Markets: EUAs resume downward trend, reach new four-month low as weak gas triggers liquidations

European carbon prices dropped sharply on Thursday afternoon as plunging gas prices dragged carbon through levels that triggered renewed selling following a morning tug-of-war that pitted short-positioned traders against others seeking to continue Wednesday’s short-squeeze rally.

Austrian startup receives first certified credits from European forestry projects

An Austrian startup has generated the first certified credits from a series of regional forest management projects, the firm announced this week, confirming further activities across multiple other EU nations.

VOLUNTARY

Developer promotes new Indonesian forest and mangrove carbon project pipeline

A carbon project developer is showcasing deals made with provincial governments in Indonesia, claiming that the agreements add a very significant volume of carbon credits to its project pipeline.

Companies that use carbon credits twice as successful at GHG abatement -report

Corporations that are “material” users of carbon credits have slashed their emissions twice as fast as companies that have not made such purchases, aa research firm said in a report published Thursday.

Half of the world’s largest corporates are still to take climate target plunge -tracker

More than half of 1,986 large global corporations are yet to pledge a carbon emission reduction target, according to the latest findings of researchers tracking company-level activity that reveal a major gap shortfall in climate action and potential carbon credit demand.

Protected forests store almost 10 bln tonnes more CO2 than unprotected ones, study finds

Protected forests worldwide store an additional 9.65 billion tonnes of carbon in their aboveground biomass compared to similar unprotected areas, according to new research.

ASIA PACIFIC

Pacific leaders reject carbon market development as legitimate climate finance, call on Australia to cut fossil fuel use as part of COP31 bid

The Australian government must do more to transition away from using and exporting fossil fuels if it wants to host COP31 in partnership with the Pacific, regional climate officials told a webinar Thursday, adding that climate finance in the form of carbon offset projects would be inadequate to address their existential needs.

APAC oil and gas firms risk financing challenges amid slow decarbonisation efforts

Most oil and gas (O&G) firms in the Asia Pacific region may face more financing challenges than their international peers because of their lack of detailed plans to decarbonise and their wait-and-see approach to new energy, a report has found.

South Korea could phase out coal by 2035 with govt support -research

South Korea will be able to retire its entire coal fleet by 2035 in alignment with the Paris Agreement if the government provides sufficient support for transition finance, research released Thursday has found.

South Korea announces ETS emissions carryover and borrowing schedule

South Korea has circulated an updated schedule for emissions allowance carryover and borrowing for its emissions trading scheme, which faces its annual compliance deadline at the end of this month.

Bangladesh floats carbon tax for owners of multiple cars

The government of Bangladesh has proposed a carbon tax in its 2023-24 budget, aimed at reducing carbon emissions, easing city traffic congestion, and promoting public transportation use.

AMERICAS

New York solicits input on speculative participation, trading restrictions in cap-and-invest programme design

New York state is taking feedback on all design elements of its proposed economy-wide cap-and-invest system including speculative participation, trading restrictions, allowance holding period limits, and reporting requirements, even as it contemplates linkage with other jurisdictions’ programmes, government officials told a webinar on Thursday.

WCI Markets: CCAs meander despite bullish workshop expectations, WCAs steady into Q2 auction

California Carbon Allowance (CCA) prices plateaued this week despite a forthcoming cap-and-trade rulemaking webinar and relatively strong WCI Q2 auction result, while the lull in activity ahead of Wednesday’s Washington Carbon Allowance (WCA) auction was briefly interrupted by a small trade.

ExxonMobil to bury 800k tonnes of CO2/yr from US steel producer

Oil major ExxonMobil on Thursday announced a carbon capture and storage (CCS) deal to bury 800,000 tonnes of CO2e annually from a US steelmaker.

BIODIVERSITY (FREE TO READ)

Tensions mount within European Parliament amid split over nature law

Tensions within the European Parliament have been rising for weeks, with fractious negotiations over the bloc’s proposed nature restoration law reaching breaking point in recent days.

Danish govt launches ocean nature fund, partners with business groups on biodiversity

Denmark will set up a $71.7-million fund to restore and protect marine nature, the government announced this week, while the environment ministry has formed an alliance with the nation’s leading industry associations to develop a common framework for taking biodiversity action.

Biodiversity Pulse Weekly: Thursday June 1, 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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Premium job listings

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• Portfolio Manager/Senior Carbon Trader, Carbon Cap – London
• Chief Financial Officer (CFO), Carbon Credits, CL-Invest – Oslo

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CONFERENCES

Sylvera’s Carbon Markets Summit – June 8, Online: Sylvera’s second annual Carbon Markets Summit is a week away. Join us on Thursday, June 8th for a dynamic virtual event that brings together corporate sustainability, policy and financial market leaders from Pachama, Bain & Co., Morgan Stanley, JPMorgan Chase, VCMI, SBTi, Aon, and more, to discuss the state of the Voluntary Carbon Markets. We’ll explore a range of relevant topics including the market’s changing landscape, best practices for risk management, the latest in policy and growing regulatory interest, and much more. Register here

Carbon Fast Forward Mediterranean 2023 – June 22, Athens: Following the pandemic and the energy crisis in Europe, the environmental markets in the Mediterranean have gained momentum as a central tool for companies in the region to achieve their emissions reductions targets, through transparent carbon pricing and a robust cap-and-trade mechanism. The increased ambition that the European Commission has announced as part of its Fit for 55 package will bring the shipping sector into the EU ETS market and increase compliance costs for industrial installations and airlines operating in the region. Join us for this one-day, regionally-focussed event geared towards Mediterranean installation operators and shipowners. Register now, since spaces are very limited.

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

Argus Carbon Markets & Regulation Conference – July 5-7, Lisbon: In the wake of new legislative reforms to the EU ETS being confirmed, and as voluntary carbon markets continue to shift and evolve, the Argus Carbon Markets & Regulation Conference returns to Portugal to provide necessary insights for your company to remain competitive and aware of the upcoming opportunities within Europe and globally. This is your opportunity to stay up to date on the latest market dynamics through panel discussions, fire side chats, and presentations with industry peers and policy makers in-person. Join market-makers in defining both the compliance and voluntary carbon market by booking your place today. Carbon Pulse readers can enjoy a 10% discount with the code PULSE10. To find out more and to book your place, click here

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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

Tales of climate finance – Italy helped a retailer open chocolate and gelato stores across Asia. The US offered a loan for a coastal hotel expansion in Haiti. Belgium backed the film “La Tierra Roja”, a love story set in the Argentine rainforest. And Japan is financing a new coal plant in Bangladesh and an airport expansion in Egypt. Funding for the five projects totalled $2.6 bln, and all four countries counted their backing as so-called “climate finance” – grants, loans, bonds, equity investments, and other contributions meant to help developing nations reduce emissions and adapt to a warming world. Developed nations have pledged to funnel a combined total of $100 bln/yr toward this goal, which they affirmed during climate talks in Paris in 2015. The funding helped crown Japan and the US as two of the top five contributors. Although a coal plant, a hotel, chocolate stores, a movie, and an airport expansion don’t seem like efforts to combat global warming, nothing prevented the governments that funded them from reporting them as such to the UN and counting them toward their giving total. In doing so, they broke no rules. That’s because the pledge came with no official guidelines for what activities count as climate finance. Though some organisations have developed their own standards, the lack of a uniform system of accountability has allowed countries to make up their own. The UN Climate Change secretariat told Reuters it is up to the countries themselves to decide whether to impose uniform standards. Developed nations have resisted doing so.

ASIA PACIFIC

Ground to a halt — Clean energy construction in Australia hit a new peak in the first quarter of 2023, with eight new projects worth a cumulative A$1.3 bln commencing construction, but investment in new renewable projects is at an all-time low, RenewEconomy reports. A report from industry body the Clean Energy Council (CEC) showed construction starts are double that of the last quarter of 2022. Three of the new projects are based in Western Australia, where the CEC says the shift away from coal-fired generation has began to accelerate. However, no new generation projects reached financial close in the first quarter of this year. A single 200 MW/400 MWh big battery, at Rangebank, in Melbourne’s south-east, worth A$400 million, was the only renewable to reach financial close in the quarter. CEC chief executive Kane Thornton says that while the construction numbers are promising, the relative dearth of projects reaching financial close is cause for concern. He said that while energy investors are enthusiastic about investing in clean energy in Australia, there are a variety of headwinds that are undermining confidence at present. These pressure include global competition driven by the US’s IRA, grid connections and constraints, supply chain and workforce constraints, and unwieldy planning approvals and regimes.

At the cost of rainforests —  Millions of dollars in green financing intended to help Indonesia reduce its carbon emissions have been invested in a project that is destroying rainforests in Papua for producing biomass to make electricity, Climate Home News reports. The money has been used to help the construction of a biomass power plant operated by Medco Group, which plans to expand its plantations by at least 2,500 hectares and cut down more rainforest. The Indonesian government has said it aims to keep the country’s furnaces burning but phase out a portion of the fossil fuels by “co-firing” with biomass.

More coal —  Guangdong, one of the Chinese provinces that led the country’s coal plant permitting boom last year, has decided to expand the role of coal and renewables in its power mix by 2025, according to a plan recently released by the provincial development and reform commission. The decision reflects the panic about meeting peak loads, concerns about reliance on hydropower imports given the risk of droughts, and the gas shortage/price surge, Lauri Myllyvirta, lead analyst at Centre for Research on Energy and Clean Air, said in a LinkedIn post. The modest increase in targeted power generation from clean energy, along with an apparent increase in projected power demand, means that the targeted generation mix also became dirtier, Myllyvirta noted.

AMERICAS

Petrobras plan – Brazilian state-run oil company Petrobras on Thursday said its board of directors had approved a revision of part of its 2023-28 strategic plan in a bid to increase investments in low-carbon initiatives. Petroleo Brasileiro SA, as the company is formally known, said in a securities filing that under the new plan it would target 6% to 15% of its total capital expenditure (CAPEX) for low carbon, up from 6% in the 2023-27 strategic plan. The move, Petrobras said, is aimed at preparing the company for the energy transition, “reconciling the current focus on oil and gas with the search for diversification of our portfolio in low-carbon businesses.” (Reuters)

No (ferro)go – Brazil’s Supreme Court upheld the suspension of the government’s 2017 decree, pending studies, that would reduce the size of the Jamanxim National Forest to accommodate the almost 1,000 km (620 miles) Ferrograo grain railroad carrying soyabean and corn to export markets via northern ports, Reuters reported on Thursday. The proposed railroad would have also affected local communities in northern Brazilian states of Mato Grosso and Para, and the Indigenous Kayapo community who considered the decree unconstitutional, the report noted. The government would be required to seek formal congressional approval if it decided to move forward with the railway, Andre Maimoni, an attorney for PSOL – the political party that had brought the case before the Supreme Court, said.

Brazil blockade – A bipartisan collection of 21 US Congress members have launched an official compliant to trade representative Katherine Tai on Thursday against Brazil’s low-carbon biofuels market, RenovaBio, arguing it blocks out US companies. Brazil has a 16% tariff on US ethanol, which is expected to increase to 18% in 2024. Congress members say Brazilian ethanol producers have access to California’s LCFS programme, making Brazil’s trade barriers unfair. (Reuters)

Groaning in Wyoming – A carbon capture project slated to remove 5 Mt of CO2 from the atmosphere by 2030 has been delayed after initially promising to come online this year, E&E News reported. Wyoming’s Project Bison faces multiple issues including its California owners CarbonCapture Inc. being uncertain on where to build the plant, while transport partner Frontier Carbon Solutions will not get underground storage permits for another four months. How to power the direct air capture operation also still remains an uncertainty.

Biomass boost – California has awarded two new grants totalling $1 mln to projects that will develop technology to convert biomass to carbon-negative energy. The Department of Conservation announced the first six awards through the Forest Biomass to Carbon-Negative Biofuels Program on Apr.18; the two new grants are also part of that grant opportunity, but are specific to projects that will be implemented through tribal partnerships.

Amazon walk-out – Hundreds of Amazon workers told executives to “strive harder” as they walked out in protest over the company’s failure to achieve its climate goals, an inequitable return to working in an office policy, and recent layoffs of around 27,000 people. After announcing a climate pledge in 2019, the massive company’s emissions profile rose 40%, as it continues to rely on fossil fuels in its massive supply chain of cargo ships, warehouses, trucks, and other distribution channels. “The climate crisis is here now, and this is a real chance to stand together in solidarity to save every last slice of earth that we can,” the Amazon Employees for Climate Justice said in a news release. The NewClimate Institute, a nonprofit that assesses corporate climate pledges, gave Amazon a poor rating earlier this year because their strategy is heavily reliant on carbon credits and offsets. (Climate Nexus)

VOLUNTARY

Scope 3 slip – Verra is delaying the effective data for the VCS Program’s Scope 3 emissions double claiming requirements to Jan. 1, 2024 from July 1, 2023, the offset standard manager and developer announced Thursday. Such double claiming occurs when an organization reports in its Scope 3 emissions statement a GHG emission reduction or removal that is also associated with an issued Verified Carbon Unit (VCU). The affected requirements will be revised in the next update to the VCS Program, currently scheduled for Q3 2023, with an effective date of Jan. 1, 2024. The revised requirements will clarify what disclosures are required and define which projects are subject to these requirements.

CDR procurement – Microsoft on Thursday announced its carbon removal procurement cycle for Fiscal Year 2024, with a cutoff date to apply of July 15. The company purchases carbon removal from nature-based and engineered solutions, having pledged in Jan. 2020 to achieve carbon negativity by 2030.

Cowboy take me away – Cowboy Clean Fuels, an energy technology company formed to produce carbon-negative, renewable natural gas (RNG) from readily available agricultural byproducts, on Thursday announced that Puro.earth will verify and issue CO2 Removal Certificates (CORCs) for atmospheric CO2 removed as a result of the company’s first commercial project in Wyoming. In a press release, the company said Puro.earth has reviewed the Cowboy Clean Fuels’ process and believes it will meet the requirements set in the Geologically Stored Carbon Methodology, which covers activities where CO2 is captured from the atmosphere and stored permanently into deep geological formations, and results in net CO2 removal impact. The company also announced the first listing of CORCs will be on the Puro.earth digital trading platform once verification of its facility and production is completed.

Hail to the chief – Mahua Acharya, former CEO of Convergence Energy Services Ltd (CESL) and a carbon markets expert, has rejoined Washington DC-based project developers C-Quest Capital (CQC) as Chief of Staff. Acharya previously served as CEO of CQC’s India operations, where she led a large-scale energy efficiency program for Indian households using carbon finance. In her new role, she will manage the organisation alongside the CEO, with a focus on expanding global engagement, strengthening policy, and regulatory community relations, especially regarding carbon markets. Prior to CQC, Acharya oversaw the world’s largest electric bus programme at CESL, and has extensive experience in green finance, renewable energy, and carbon markets across multiple countries. (Mint)

EMEA

Critical stakes – EU nations are considering requiring that at least half of the critical raw materials the bloc needs are processed domestically, in an effort to better prepare for the clean-energy transition. An updated proposal put forward by Sweden, which holds the EU’s rotating presidency, would boost the requirement from 40% initially laid out by the European Commission in its proposed Critical Raw Materials Act, according to a copy of the document seen by Bloomberg. The EU is seeking to re-shore the vital components needed for low-carbon technologies amid growing competition with the US and China over clean-energy manufacturing.

STEAG sticking point – Plans to sell the western German coal plant operator STEAG could present a significant hurdle to government plans to pull the country’s coal exit forward to 2030, unless the company puts in place a binding decommissioning plan as part of the sales process, analysts from the Institute for Energy Economics and Financial Analysis (IEEFA) have warned. “As a state-owned company, STEAG’s management should set the standard for a planned and effective coal phaseout strategy that upholds and accelerates Germany’s Energiewende agenda,” power sector analyst Jonathan Bruegel said. STEAG has not yet released a decarbonisation plan, IEEFA said, adding that “there is a risk that STEAG’s buyer might maximise the coal fleet’s lifetime until it is compulsorily decommissioned … Selling STEAG to a private owner with a profit maximisation goal is neither timely nor helpful for paving the way for Germany’s coal exit strategy.” STEAG has been put up for sale by its owners. Reuters had reported that the company, which is owned by six municipal utilities in Germany’s industrial Ruhr region, aims to sign a deal with a strategic buyer or financial investor over the coming months and close the transaction by the end of the year. Czech energy group EPH – which also partially acquired eastern German lignite operations from Vattenfall some years ago – is a potential buyer, Reuters said. (Clean Energy Wire)

SCIENCE & TECH

No longer safe, no longer just – Seven of eight “safe and just” global Earth-system limits have already been breached, including climate, ecosystems and freshwater, according to a new study. It introduces justice considerations into the now widely cited – but controversial – concept of planetary boundaries, which often makes these limits stricter, reports Carbon Brief.

AND FINALLY…

Something stinky — Thousands of Woodside Energy employees were evacuated from the company’s headquarters in Perth after a faux gas leak organised by protestors campaigning against its oil and gas developments on the Burrup peninsula, in Western Australia, the Nine Newspapers report. A dozen firefighters swarmed the building to investigate the smell just after 10 am on Thursday, understood to have been caused by non-toxic stench gas released by Disrupt Burrup Hub protester Kristen Morrissey. The substance, typically used by mining companies for an emergency, forced Woodside’s workers to flee across a nearby pedestrian bridge and to an adjacent park. The area was cordoned off by authorities, with the stench lingering for several hours. WA Police confirmed officers from the Tactical Response team’s Bomb Response Unit examined and removed the source of the gas alongside government chemists. A Woodside spokeswoman confirmed employees had been mustered to safety by emergency services and that the company would be referring the matter to authorities. She said police gave the all-clear for workers to return to their desks about four and a half hours after the evacuation. The fake gas on Thursday is the latest in a long series of actions against Woodside and its plans to prolong and expand gas production on the Burrup Peninsula near Karratha in WA’s north west, where its two gas export plants are located.

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