Newsletters > CP Daily: Friday June 2, 2023

CP Daily: Friday June 2, 2023

Published 03:29 on June 3, 2023  /  Last updated at 03:29 on June 3, 2023  / /  Newsletters

A daily summary of our news plus bite-sized updates from around the world.

Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here

TOP STORY

FEATURE: Keep on moving – Dynamic baselines seen driving accuracy in forest carbon accounting

In the context of accusations of widespread over-crediting in the voluntary carbon market (VCM), one emergent accounting approach could tackle some of the challenges with auditing of forestry projects, offering real-time and dynamic monitoring of climate impact via remote sensing technologies.

EMEA

Loophole in EU carbon market’s MSR has further tightened market, say experts

A persistent loophole in EU ETS regulations has been artificially tightening the carbon market for years, according to observers, steepening the annual drawdown in permit supply with knock-on effects for allowances prices and costs for European industries.

Euro Markets: EUAs post modest weekly loss, hover above recent lows as short squeeze seen ending

EU carbon prices erased almost all their early gains on Friday to post a small increase on the day but a 4% drop on the week, as a rally inspired by a strong daily auction faded in the afternoon along with the bullishness inspired by data showing that investment funds were holding their largest ever net short position.

Growth of MENA regional carbon market to hinge on infrastructure, transparency -experts

The Middle East and North Africa (MENA) region’s aspirations to become a global hub for decarbonisation and sustainable finance will hinge on the construction of more robust market infrastructure and improved transparency on creation and use of carbon credits, concluded a roundtable debate at a conference held in Bahrain.

Steelmaker SSAB takes plunge with fossil free facility, would cut Swedish emissions 3%

Swedish steelmaker SSAB has taken a major step towards plans to convert the entire Nordic production system to fossil free by around 2030.

European Commission pushes back on nations’ efforts to tackle private jet emissions

The European Commission’s transport boss underlined this week that their institution has no intention of proposing new measures aimed at curbing private jet emissions despite a push from a group of several member states to tighten environmental measures on their use.

AMERICAS

California cap-and-trade review bill falters, anti-greenwashing and climate disclosure proposals move forward

A bill designed to inform California’s forthcoming review of its WCI-linked cap-and-trade regulation was held on Thursday, while a suite of voluntary carbon offset and climate disclosure bills in the Golden State sailed through their first floor votes this week.

Verra joins initiative to spur Brazil voluntary carbon market

Carbon credit certifier Verra on Friday agreed to join an initiative to bolster development of the voluntary carbon market (VCM) in Brazil, aiming to help scale the nation’s nature-based activities.

Financial players shore up length across North American carbon markets, producers shed CCAs, RGGI

Speculators extended net holdings across North American carbon markets this week, while producers shed significant length across California Carbon Allowances (CCAs) and RGGI Allowances (RGAs), data from the US Commodity Futures Trading Commission (CFTC) showed Friday.

ASIA PACIFIC

Australia Market Roundup: Clock ticking for new human-induced regeneration projects to register, regulator warns

Australian carbon project developers have been given one month’s notice to register new human-induced regeneration (HIR) projects, ahead of the method’s expiration date in September this year, the Clean Energy Regulator said Friday.

Airline Qantas launches A$400-mln climate fund, calls for expressions of interest

Australian airline Qantas will establish a A$400 million ($263.2 mln) fund to provide direct investments in climate-related projects and initiatives, with a focus on sustainability aviation fuel (SAF) and nature-based solutions, the carrier announced this week.

Australian energy company blasted for offering cash to customers to switch from electric to gas appliances

Environmental and climate groups have slammed an Australian gas distribution company’s decision to offer cash incentives to customers who switch from electric to gas appliances, saying it flies in the face of efforts to transition away from the fossil fuel to reduce emissions.

CN Markets: CEA price reaches 5-mth high, volumes remain modest

Allowance prices in China’s national emissions market reached year-to-date high this week despite shrinking trading volumes, with analysts expecting price level to remain flat this month amid lukewarm sentiment.

Japanese bank to provide J-Credit generation and purchase services

A Tokyo-listed bank has teamed up with a domestic offset provider to further integrate carbon credit purchase in its services for clients as part of its sustainability strategy.

VOLUNTARY

Ratings firm downgrades African cookstove project

A cookstove project in Malawi has been downgraded by a carbon credit rating agency to having a low chance of achieving its stated carbon avoidance because of concerns about usage and stove effectiveness, while credits from a biodigester project in India were given a very low chance of avoiding a tonne of CO2.

BIODIVERSITY (FREE TO READ)

Conservation alliance asks for clearer purpose, offset ban in Australia’s nature repair market

The Australian government should clarify the purpose of its planned biodiversity market and rule out the use of credits for offsetting purposes for at least three years, according to an umbrella organisation for some of the nation’s biggest conservation groups.

Asset manager calls on governments to provide regulatory foundations for nature positive investments

If the world is to meet the goals of the Global Biodiversity Framework (GBF), governments must act swiftly to put in place regulations that incentivise nature positive investments and penalise nature negative activity, a global asset manager has said.

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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

EMEA

Nuclear option – France has requested to reopen discussions on a key Green Deal law to ensure a greater role for nuclear energy in Europe’s transition to renewable power, a move strongly opposed by Germany. This has resulted in a deadlock, Bloomberg reports. Paris has reportedly informed Sweden, the current EU presidency holder, about its intent to modify an already brokered agreement, which would necessitate restarting talks with the European Parliament and European Commission. Germany, having recently closed its last nuclear plants, and other EU member states are resisting this move, advocating for the law to be passed in its current form. This disagreement has placed Europe’s two largest economies at odds over nuclear power’s role amidst efforts to transition to a low-carbon economy and an ongoing energy crisis. The present EU deal, reached in March, aims to increase the region’s 2030 renewable energy target to 42.5% of total energy consumption, while reserving a minor role for nuclear power. Sweden is striving to find a resolution that a majority of member states can agree on before its presidency term concludes on June 30. Any additional delay could potentially impact the objectives of the Green Deal, the EU’s plan for carbon neutrality.

Helping hand – Romania has asked its economy ministry for finance to support a €1.7 bln state aid scheme for large industrial consumers, after record energy prices and high carbon costs in 2022 have put pressure on energy-intensive users, reports local media source Adevarul. The scheme will be submitted for approval to the European Commission under its state aid rules and will consist of direct payments, tax waivers, guarantees, and loans. Romanian utility Oltenia received €848.6 mln for EUA costs last year, Carbon Pulse reported.

That old lignite lifeline – Germany will likely need several lignite power units that had been brought back online from reserve during the energy crisis last year also for the coming winter, Economy Minister Robert Habeck said at a press conference. In view of the gas supply situation and the difficulties surrounding the installation of new LNG import infrastructure on the island of Rugen, the country will need additional capacities in winter, such as the eastern German lignite units, the Green Party minister said. During the energy crisis, Germany had decided to temporarily allow lignite power plants that had already been in a reserve to re-enter the market and produce electricity. The rules are currently scheduled to expire by the end of June, but could be extended by ministerial decree, Habeck said. The Times carries a news feature focused on why Habeck is rapidly losing his supporters. The paper reports that 50% of the electorate wants Habeck to resign. This compares to a year ago when he had widespread support due to his handling of the country’s energy security when Russia invaded Ukraine. The Green party in Germany, which is in the coalition government, is “running into heavy resistance with its climate policies”, falling behind the far-right Alternative for Germany (AfD) party with polling at 14-16%. One controversial policy, initiated by Habeck, is an attempt to ban the installation of new oil and gas boilers in households from 2024. A decision about the law is due by June 13. (Clean Energy Wire, Carbon Brief)

Power cut – Electricity producer Slovenske Elektrarne recorded the second-highest loss for a Slovak company in a decade and is suing the state for making it sell at a loss to customers, Euractiv reports. Slovakia’s biggest electricity producer ended their 2022 yearly accounts with €217 mln in the red. Only one Slovak company has had a worse financial year in the last ten years, US Steel, in 2013 with a €370 mln loss. It is also the power plant’s first loss in a decade. The company claims one of the reasons for this loss is last year’s memorandum, which forced companies to sell electricity to households at a discount.

Shamrock shame – Ireland’s Environmental Protection Agency said the country is projected to only cut GHG emissions by 29% by 2030, compared to a goal of 51%. This represents a 4% reduction each year, which the EPA says “is insufficient to achieve the ambition” of the national Climate Action Plan. Ireland will not reach its first two carbon budgets “by a significant margin”, according to the EPA. The EPA’s projection is based on assumptions such as economic growth, fuel prices and government policy. Almost all sectors are on a trajectory to exceed their national sectoral emissions ceilings for 2025 and 2030, including agriculture, electricity, transport, and industry. Residential buildings are the only sector not expected to seriously underperform in cutting GHGs. (Newstalk)

Greenwash finance – The European Banking Authority has found evidence of widespread greenwashing across the financial system, as concerns grow that banks, asset managers and insurers are overstating their climate credentials. A particular problem was banks and investors promoting their support for initiatives such as clean energy while failing to say they also financed projects linked to fossil fuels, deforestation and human rights abuses, the EBA said. Separately, the Frankfurt-based European Insurance and Occupational Pensions Authority warned that greenwashing was having a “substantial impact” on consumers of insurance and pension products. (FT)

REPowerEU – Denmark submitted a request to add a new chapter to its Recovery and Resilience Plan, the European Commission announced on Thursday. It will cover measures related to renewable energy, developing green skills, replacing oil burners and gas furnaces and carbon capture and storage. The Danish government aims to achieve the additional REPowerEU objectives through one new reform, one new investment and two existing investments that would be scaled up. The total EU contribution to Denmark would then be worth €1.63 bln. The Commission has now up to two months to assess the proposal.

Wrong sign – Luxembourgish PM Xavier Bettel criticised his Belgian counterpart’s call to put a halt to enacting new EU climate laws to ease the burden on companies at the Second European Political Community Summit in Moldova. Bettel reacted to De Croo’s call for a regulatory break on EU environmental laws that echo the same call Macron made earlier in May, a call that has been criticised by the Belgian Greens and EU Commission Vice-President Frans Timmermans. “It would be a wrong sign to deny that the climate crisis is a top priority”, Bettel told journalists in Moldova, referring to the fallout between De Croo and Timmermans that followed De Croo’s call. Timmermans and De Croo fell out ahead of the summit in Moldova. (Euractiv)

ASIA PACIFIC

Somewhat clearer – Australia’s Clean Energy Regulator late on Friday released data on the Carbon Estimation Areas (CEAs) backing up ACCU issuances to human-induced regeneration (HIR) projects. HIR projects came under fire last year as researchers at ANU claimed most HIR projects were a “fraud” and that their data showed forest regeneration stemmed from rainfall levels rather than project activities. The regulator defended the projects, saying the researchers did not have the specific CEA data and hence could not draw exact conclusions. The CEA data could not be released, however, as project-level privacy was protected via legislation. That legislation has now been amended, but the CEA data released Friday appears to provide limited insight into whether HIR projects actually reduce emissions.

Launch – Chinese state-owned power generator China Energy Investment Corporation has started operations at Asia’s largest coal-linked carbon capture, utilisation and storage (CCUS) facility, according to a report in state media outlet CCTV on Friday.The facility, adjoined to the group’s Taizhou thermal coal power plant in the country’s eastern Jiangsu province, has the annual capacity to store 500,000 tonnes of carbon dioxide, the report said. (Reuters)

Big fall – Japan’s liquefied natural gas (LNG) imports last month fell to the lowest in more than two decades as efforts to conserve energy and boost nuclear power reduced the need for the fossil fuel, according to Bloomberg. Deliveries to Japan, a top importer, declined to around 4 mln tonnes in May, about a 30% drop from a year ago and the least since 2002, government data showed. The decline in LNG shipments to the East Asian country is helping to ease the global fuel shortage, pushing prices to the lowest level in two years, Bloomberg said.

Calling for participants – Japan’s environment ministry has called for local financial institutions to participate in an engagement programme to understand their own climate risks and opportunities through a framework created by the Task Force on Climate-related Financial Disclosures (TCFD), it said in a notice released this week. Institutions wishing to join the programme are encouraged to send their applications by the end of this month. In Japan, disclosure based on the TCFD recommendations is obligatory for companies listed on the Tokyo Stock Exchange’s Prime Market.

IEXciting – The Indian Energy Exchange (IEX) is looking to start trading voluntary carbon credits by the end of this year, Chairman and Managing Director S.N. Goel said Thursday. The IEX launched the International Carbon Exchange, a wholly owned subsidiary, in Dec. 2022 to offer a platform for the growing supply of carbon credits and upcoming demand for emissions reductions. The exchange will be open to Indian carbon credits approved by Verra, Gold Standard, and other registries, but it would also explore whether credits issued for projects in other countries can participate on the exchange. India may sell 200 mln credits by 2030, and demand from Indian companies is estimated to be 120-130 mln by that year, said Rohit Bajaj, senior vice president and head-business development, strategy and regulatory affairs at IEX. The two executives added that IEX will be the trading platform for India’s upcoming compliance carbon market, which is expected to launch in 2025-26. (S&P Global)

AMERICAS

SHARE pressure – A non-profit advocacy Shareholder Association for Research and Education (SHARE) is encouraging Montreal-based retailer Dollarama’s shareholders to vote to adopt stronger decarbonisation targets for its operation and supply chain, SHARE said in a press release on Thursday. Dollarama has a goal to reduce its Scope 1 and 2 emissions by 25% by 2030, but lacks a 2050 target or time-bound commitment to disclose Scope 3 emissions, which likely constitute an overwhelming part of the company’s emissions, SHARE noted. The retailer has cited growth ambition as a key barrier to setting more stringent targets. However, competitor Dollar Tree announced plans to set science-based net zero targets by June 2024, while growing at a faster pace than Dollarama, SHARE observed, pointing to Dollar Tree’s 464 store openings last year compared to Dollarama’s 65.

Big Apple challenge – The New York State Energy Research and Development Authority (NYSERDA) announced $15 mln in the fifth round of funding as part of the Commercial and Industrial (C&I) Carbon Challenge, in a press release on Friday. The funds available through the state’s $6 bln Clean Energy Fund, are part of Round XIII of the Regional Economic Development Council (REDC) initiative that provides support to local economic development projects. To date, REDC has awarded more than $7.7 bln in grants. The C&I Carbon Challenge provides funding to large energy users to implement clean energy projects that reduce carbon emissions and is available to manufacturers, colleges, universities, health care facilities, and office building owners in the Big Apple. Project proposals may employ a combination of energy or manufacturing process efficiency strategies, carbon capture technology, renewable generation, or energy storage, with a focus on those that electrify buildings or manufacturing equipment, capture emissions, reduce industrial thermal process emissions, and/or make operational and technical changes that reduce industrial process emissions. Awards between $500,000 to $5 mln will be given to partially offset clean energy project costs for the largest commercial and industrial energy users in the state, with an aggregate 12-mth average demand of 3 MW or greater. Awardees are selected based on their plans for project implementation, institutional commitment to sustainability, overall level of GHG emissions reduced, and their potential to beneficially impact disadvantaged communities. The initiative is accepting applications for funding till July 28, 2023, the statement noted.

VOLUNTARY

Investment climate – Blackstone funds have completed a deal to take a 60% equity stake in Emerson’s climate technologies division as it separates from the rest of the firm, Citywire reports. The new standalone business, which was valued at $14 bln by Blackstone, will be rebranded to Copeland. Emerson will receive around $9.7 bln of sale proceeds upfront and a $2.25 bln seller’s note, while retaining 40% common equity ownership. Blackstone funds will take a 60% controlling ownership. Copeland’s product portfolio includes compressors, controls, thermostats, valves, software and monitoring equipment. It reported net sales of $5 bln last year and is targeting expansion in the electric heat pumps and climate-friendly refrigerants markets.

SCIENCE & TECH

Predicting wildfires – Michal Aibin, a visiting professor of Computer Sciences at Northeastern University in Vancouver, BC and his team have developed a computer vision algorithm that assesses and classifies forests according to their fire risk, the University’s magazine reported on Friday. This enables foresters to see the most at-risk areas and pre-emptively direct appropriate fire-prevention efforts. Roughly 1,800 forest fires burned 135,000 ha in Canada last year, costing $650 mln, Aibin said, with global wildfires releasing 645 MtCO2 in 2021. The professor uses a drone to scan woodland areas, collecting data such as the amount of flammable debris in the area, the species of trees and their respective flammability, the proximity of water sources, areas with diseases that weaken the trees and more. Information is made available to foresters who can see the most fire-prone areas, learn why that area is particularly risky, and direct mitigation and prevention strategies, the report said. Presently focused on forests in BC, the professor sees worldwide application of the programme, and is working on expanding the amount and type of risk factors analysed to make it more geographically specific.

AND FINALLY…

Floaty McFloatface – Chemicals producer BASF is deploying a new freight vessel adapted for low water levels in the Rhine river, Die Welt reports. Shallower water in Germany’s largest river have occurred frequently in recent years and are linked to low precipitation caused by climate change. Freight transport on waterways has been severely affected, forcing companies to switch to railway or road transport. Chemical companies and other industrial producers have constructed production facilities on the Rhine and other major rivers because these usually offer more convenient transport conditions than other locations. The adapted vessel named Stolt Ludwigshafen has a length of 135 metres and a width of 30 metres. The ship’s size, shape, and light construction materials are supposed to let it cope even with “extremely low” water levels without affecting its manoeuvrability. In addition to the damaging effects of droughts on ecosystems and agriculture, low water levels and high temperatures in Europe’s rivers have become a challenge for energy production, which often relies on rivers for cooling power plants, and other economic activities, especially inland navigation. (Clean Energy Wire)

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