Newsletters > CP Daily: Monday June 5, 2023

CP Daily: Monday June 5, 2023

Published 03:31 on June 6, 2023  /  Last updated at 00:57 on June 7, 2023  / Carbon Pulse /  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

Removals come to the fore at UN carbon market meeting, guidance body signals further work

The UN body helping to shape which projects are eligible under the Paris Agreement’s carbon credit mechanism has launched a consultation on the role of removals, with members planning further work to agree on technical elements relating to permanence, storage, and the classification of activities.

INTERNATIONAL

Experts propose pathway to avoid meaningless global stocktake on climate progress

Bureaucrats this week will continue a global stocktake of progress made on climate action under the UN Paris Agreement, but some observers say that the process needs to promote concrete solutions, rather than simply pointing out current failures.

Failure to meet $100 bln finance goal to undermine UN talks, says charity

The rich world’s failure so far to provide evidence it has met the $100 bln pledge for developing nations will hinder negotiations at upcoming UN summits, according to a report by a development charity published Monday, as climate finance tensions come into focus at talks that begin in Bonn this week.

Global North would owe South $170 trillion for overshooting carbon budgets -researchers

Researchers have proposed a solution for financing climate change mitigation by assigning financial responsibilities to nations based “rigorous ethical criteria”, and have calculated that through this approach the Global North would owe the Global South around $170 trillion.

Global carbon fund seeks to raise $200 mln

A global carbon fund has launched a new round of capital raising, seeking to raise $20 million by the end of the month as part of a broader effort to secure $200 million by mid-2024, it announced Tuesday.

Direct air capture needs solar-like reductions to scale development -report

The cost of direct air capture (DAC) needs to come down over the 27 years through 2050 by at least the same rate that solar PV did over the past 40 years to ensure the carbon removal technology emerges as an effective climate solution, consultants said in a report published on Monday.

UK project developer inks Pakistan green hydrogen, carbon deal with top Chinese oil producer

A London-listed international power and natural resource project developer has teamed up with one of China’s largest oil and gas producers through the operation of subsidiaries to jointly develop a planned green hydrogen project in Pakistan.

EMEA

Germany launches carbon price-linked support scheme for heavy industry

The German government will this week launch a multi-billion euro Carbon Contracts for Difference (CCfD) programme to help the nation’s EU ETS-covered heavy industries decarbonise their operations, the minister of economy and climate Robert Habeck announced on Monday.

Euro Markets: Carbon jumps 4.4% on resumption of short squeeze as gas leaps 20% on similar move

European carbon prices rose 4.4% on Monday as traders resumed their squeeze of short positions while the market was also boosted by stronger energy markets amid bullish news headlines and fundamental drivers as well as a significant squeeze in natural gas markets.

Another ex-Point Carbon/Refinitiv carbon markets expert joins Veyt

Another ex-Point Carbon/Refinitiv carbon markets expert has been reunited with former colleagues at Oslo-based analytics firm Veyt.

AMERICAS

Analyst predicts Q2 RGGI auction will clear below secondary market, CCAs and WCAs to remain stable

The Q2 RGGI auction this week will come in below the secondary market despite expectations of a declining permit surplus and warmer weather, as California Carbon Allowance (CCAs) and Washington Carbon Allowances (WCAs) will experience longer-term price growth but near-term stability, according to a recent analyst report.

RGGI Market: RGAs pull back slightly heading into Q2 auction

RGGI Allowance (RGA) values ticked down from five-month highs in muted activity over the last five days as traders looked towards this week’s Q2 allowance sale.

Virginia regulatory official recommends lower cost for reinstated Dominion RGGI Rider

The Virginia State Corporation Commission (SCC) should adjust down the total cost for a Dominion Energy subsidiary to purchase tens of millions of RGGI Allowances (RGAs) before the jurisdiction leaves the power sector carbon market at year-end, a hearing examiner wrote last week.

RFS Market: RINs sink to 1-yr lows as traders await final biofuel quotas

US biofuel credit (RIN) values sagged to levels not seen in over a year on Monday as traders pointed to the impending finalisation of multi-year Renewable Fuel Standard (RFS) quotas and a continued influx of renewable diesel (RD) production.

ASIA PACIFIC

Australia’s Clean Energy Regulator releases carbon estimation areas, but secrecy provisions prevent full transparency

The Clean Energy Regulator has published carbon estimation areas (CEAs) for Australian carbon credit projects, but secrecy laws still prevent it from releasing data that would allow third-parties to judge their effectiveness.

Global NGOs partner to drive nature-based solutions projects in Southeast Asia

A group of eight green groups on Monday launched a coalition that will focus on delivering nature-based projects across the Southeast Asian region that reduce emissions and conserve biodiversity.

Japanese firm signs broad carbon credit MoU with the Philippines

Japanese start-up Green Carbon has signed a Memorandum of Understanding (MoU) with the Philippines’ state-owned National Development Company (NDC) with a view to generating 45 million carbon credits across a range of project types.

Climate finance group seeking consultation on financing guidelines for APAC coal phase-out

The Asia-Pacific Network of the Glasgow Financial Alliance for Net Zero (GFANZ) climate finance coalition has begun seeking public consultation on its proposed set of voluntary guidance on financing the managed phase-out of coal power plants in the region, with the final report set to be published later this year.

Study highlights multiple ways farmers can cut emissions and remain profitable, but technical challenges remain

It would be cheaper and more socially acceptable for land managers to implement a variety of operational changes to cut GHG emissions rather than purchasing carbon offsets, a new study has found, but adaptation remains a key challenge.

VOLUNTARY

VCM Report: Surplus weighs on market amid dipping demand

Carbon credit prices continued to soften over the past week amid dipping demand and a growing surplus weighing on the voluntary market.

BIODIVERSITY (FREE TO READ)

Asset managers fare poorly on climate and biodiversity action -report

Global asset managers are largely failing to align portfolios to net-zero pathways and are also mostly ignoring biodiversity risks, according to a report published Sunday that relied on a comprehensive sample of global data.

UK-funded initiative to pilot biodiversity crediting in Uganda, Zambia

An initiative funded by the UK government has launched a programme to generate biodiversity credits through nature restoration and conservation projects in Uganda and Zambia.

ICYM

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.

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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

Airline angst – Airlines took aim at Europe over green fuel mandates and its failures to stem France’s air traffic control strikes as they weigh on carrier capacities at a global airlines meeting in Istanbul on Monday. European regulators have introduced a new mandate demanding airlines use sustainable aviation fuel (SAF), an alternative to jet fuel that produces fewer carbon emissions but is between two to four times more expensive than its traditional alternative. New rules will require fuel suppliers to ensure they can make 2% of fuel available at EU airports SAF by 2025, rising to 6% in 2030, 20% in 2035 and gradually to 70% in 2050. Officials lambasted Europe for introducing a mandate, arguing that a global approach to increasing SAF production or tax incentives like those introduced by the US under the Inflation Reduction Act would be more effective. (Reuters)

EMEA

Green steel machine – Germany is planning to make around €2 bln available to help fund a green steel plant that Thyssenkrupp aims to build at its base in Duisburg, one of the struggling conglomerate’s key turnaround projects. The funds, unveiled by Germany’s Economy Ministry on Monday, include €700 mln pledged by the German state of North Rhine-Westphalia, where Thyssenkrupp’s headquarters is located. Under its hydrogen-based climate strategy for steel production, dubbed tkH2Steel, Thyssenkrupp plans to commission a so-called direct reduction iron (DRI) plant for the climate-friendly production of 2.5 Mt of steel annually, with a production start scheduled for 2026. The company, which like its peers is under pressure to retool its entire production process and make it carbon neutral, estimates the costs for the site as well as required infrastructure at over €2 bln. (Reuters)

British nukes – UK opposition leader Keir Starmer has described nuclear power as a “critical part” of the country’s energy mix and pledged to get stalled projects over the line, as his Labour Party positions itself firmly behind the technology, the Guardian reports. Before the Labour leader presents his net zero energy policies during a speech in Scotland early next week, the party said it would push forward nuclear to boost energy security, cut costs for consumers and create jobs. The governing Conservatives have not opened any new nuclear power plants during 13 years in power, despite a number of new plants still not operational despite having been identified in 2009 when Labour was last in power.

Nyeri good – The Nyeri County Government in Kenya has announced plans to launch a carbon credit programme, aiming to leverage the region’s abundant tree cover and forest resources to generate carbon credits. These credits can then be sold to fund environmental conservation efforts and support local communities, particularly farmers. Nyeri County’s CECM for Water, Irrigation, Environment and Climate Change, Fredrick Kinyua, revealed that experts are being consulted to develop a strategy for the programme. He noted that the county’s tree and forest cover percentages are among the highest in the country, making it a natural asset for such a project. Kinyua further explained that selling these carbon credits will offer financial benefits to local farmers, promote reforestation, and preserve critical ecosystems, while attracting sustainability-focused investors and businesses. (KNA)

Another lawsuit – Twenty investors have filed a lawsuit against XL Insurance Company SE, seeking compensation for losses they suffered from a carbon credit scam facilitated by British law firm Colemans CTTS LLP, which is now dissolved. The investors argue that, as the indemnity insurer of Colemans, XL Insurance owes around £1.4 mln in damages. According to the claim filed in the High Court, Colemans misled investors by not verifying the authenticity of the carbon credits involved in the scheme and acting beyond its expertise. Between 2010 and 2013, Colemans collected about £14.7 mln from investors. The law firm has been found to have knowingly sold credits at inflated prices and failed to identify the risks of the scheme. The investors seek the cancellation of the carbon credit transactions processed by Colemans or, alternatively, demand XL Insurance cover some of the losses and reimburse any fees charged by Colemans. (Law360)

ASIA PACIFIC

Green spend – Green capital spend in South-east Asia dwindled for two years straight, despite a notable rise in government and corporate commitments to channel new capital towards the region’s decarbonisation needs in 2022. Bain & Company, Temasek, GenZero and Amazon Web Services’ latest stocktake found that the region’s green deal transaction value fell again in 2022, this time by 7% to $5.2 bln, from US$5.6 bln in 2021. The spend in 2020 was US$6.6 bln. The slowdown is of concern as an estimated US$1.5 trillion in cumulative investment is needed for South-east Asian countries’ energy and nature sectors to fulfil their nationally-determined contribution (NDC) targets by 2030. If this goes on, the top emitting countries – Indonesia, Vietnam and Thailand – are at risk of missing their targets. (Business Times)

Green ties — Australia will provide a A$105 mln ($69 mln) package of official development assistance to Vietnam to support its clean energy transition. A spokesperson for the Department of Foreign Affairs and Trade told Carbon Pulse that A$75 mln over five years will provide technical assistance, economic research and analysis, and promote access to climate financing opportunities. The cash will support Vietnam’s inclusive and sustainable transition to “clean” energy, greening of the transport sector, and trade policy implementation. The other A$30 mln, over three years, will act as seed funding to stimulate private sector investment in clean energy infrastructure and market development, the spokesperson said.  This will be delivered through the Private Infrastructure Development Group, and the Emerging Markets Impact Investment Fund. The programme is expected to leverage over A$90 mln in private investment.

New product – POSCO, South Korea’s top steelmaker, has introduced the first product from its low-carbon brand Greenate, which features products that emit lower CO2 emissions through the use of green production processes, Korea Economic Daily reports. The steelmaker has supplied its first low-carbon product to LG Electronics, shipping 200 tonnes of steel products used as parts and materials for dryers, and said it will expand the supply of green products for use in household appliances. POSCO recently also released its carbon neutrality roadmap, with a low-carbon product line to debut by 2030.

Talents needed – Taiwan Climate Partnership, a coalition founded by eight leading firms in the island’s information and communications tech­nology sector, has established an educational institution to help cultivate green talents, it announced on Monday. The new institution, aiming to solve the island’s talent shortage, will first cooperate with three universities and Taiwan AI Academy to provide relevant courses, said Yancey Hai, chairman of Delta Electronics and the climate alliance.

AMERICAS

Carbon price freeze – The Conservative Party of Canada is calling on the federal Liberal minority government to implement a plan to balance the budget and freeze its federal carbon tax, CBC reported Monday. The price on carbon in Canada is C$65/tonne this year and set to increase C$15 per year until 2030 when it reaches C$170. If the Liberals don’t meet Conservative Party leader Pierre Poilievre’s demands, the official opposition will attempt to delay a budget vote with 900 proposed amendments. The deputy Speaker of the House dismissed 200 proposed amendments and categorised the remaining 700 into four categories which will be dealt with en masse. The budget is likely to eventually pass given the supply-and-confidence agreement between the minority Liberals and the New Democrat Party. Pierre Poilievre’s Conservatives are campaigning to scrap the price on carbon.

Hot air claims – An environmental coalition Sortons le gaz filed a complaint with Quebec’s consumer protection bureau saying gas distribution company Energir was billing customers for renewable natural gas while providing regular natural gas instead, the Canadian Press reported on Sunday. The coalition is seeking a C$100,000 fine as it says almost all of the gas Energir injects into its network originates from fossil gas, for which its 1,484 residential and industrial customers have paid a supplement renewable gas fee.

Clean energy wait – A bill to create a nation-leading clean energy plan for New Jersey won’t be taken up by state lawmakers until after the November election. The bill, S-2978 (22R), would put the state on the path to get 100% of its electricity from zero-carbon sources by 2035 – the most aggressive clean energy goal of any large state. Sen. Bob Smith (D) chair of the Senate Environment and Energy Committee, had previously hoped to have the bill out of committee before the fall. Now the bill is unlikely to get a hearing until the end of the year. “It’s definitely a post-election thing, hopefully,” Smith told Politico.

VOLUNTARY

Green cruise – Norwegian Cruise Line Holdings (NCLH) has bought 1.6 mln offsets to date contributing to 14 projects globally including in South Korea, Brazil, and Turkey, the company released in its ESG report. This includes 750,000 units to support the Hyundai Waste Energy Recovery Co-generation Project (Phase II), which is a 400 MW cogeneration plant at Dangjin Hyundai Steel Mill in South Korea, nearly 275,000 from the Barra Grande Hydro Power Plant project in Brazil, as well as credits from hydropower plants in Turkey. The cruise line, which has a 2050 net zero ambition, has recently revamped  its climate action strategy, and is now targeting a reduction in GHG intensity of 10% by 2026 and 25% by 2030, compared to a 2019 baseline with intensity measured on a per capacity day basis. As part of the strategy, NCLH is modifying two ships, expected to be delivered in 2027 and 2028, to accommodate the use of green methanol as an alternative fuel source. The cruise line has also tested small quantities of biodiesel blend B30, which is 70% marine gas oil and 30% biodiesel, in four of its ships to-date. By the end of 2023, NCLH anticipates more than 20% of its fleet will have tested and operated on biodiesel blends. NCLH currently has 12 ships equipped with shore power capabilities which allows these ships to connect to onshore electrical power grids to supply much of the power needed while docked when available, and expects to have approximately 60% of its fleet shore-power enabled by year-end 2023 and approximately 70% by year-end 2025.

I am what IALM – A revised version of the Verra’s Improved Agricultural Land Management (IALM) methodology was published Thursday following internal review, expert analysis, and public consultation, a press release detailed. Reduced tillage and improvements in fertilizer application, biomass residue and water management, cash and cover crop planting and harvesting practices, and grazing practices are all part of the new version of VM0042. The revision has been ongoing since 2021 and received over 400 public comment submissions. A new soil organic carbon measurement that does not depend on models, language addressing degraded lands, and a requirement to address leakage were some of what was included in the new version.

Forum, assemble! – The Climate Action Data Trust (CAD Trust) has announced the launch of its User Forum. Established to act as a market sounding board for technical, policy, and business questions, this group shares CAD Trust’s commitment to increasing transparency and interoperability in carbon markets. After receiving high-quality submissions from over 100 applicants, the CAD Trust selected 20 candidates to join the forum. The list of members can be found here. A varied mix of carbon markets stakeholders, these individuals will provide input to the Council’s priorities during the interim period, which lasts until the end of 2024. The group will also comment on the data model resulting from the work of the Technical Committee. This will include, among other things, suggesting future changes; identifying potential data use cases; communicating market needs to enable better data use; and identifying desired IT updates and inputting into future feature development. The forum is due to meet for the first time on June 14.

SCIENCE & TECH

Canada in flames – Canada is on track for its worst-ever year of wildfire destruction as warm and dry conditions are forecast to persist through to the end of the summer after an unprecedented start to the fire season, officials said on Monday. Blazes are burning in nearly all Canadian provinces and territories, and federal government officials said their modelling shows increased wildfire risk in most of Canada through August. Quebec, in eastern Canada, was currently the worst impacted due to multiple fires ignited by lightning, officials said. Flames have been mushrooming rapidly in eastern Canada and have forced evacuations in the Atlantic province of Nova Scotia as well as coastal Quebec. By Sunday, about 3.3 million hectares had already burned – about 13 times the 10-year average – and more 120,000 people had been at least temporarily forced from their homes. There are currently 413 active wildfires, including 249 deemed out of control, and about 26,000 people are under evacuation orders across Canada. (Reuters)

AND FINALLY…

Something fishy going on – Fish populations are relocating to colder waters in the north and south poles as a result of global warming, new research has found. The study by researchers at the University of Glasgow has found the majority of the world’s fish population are shifting closer to the poles or deeper waters in order to stay cool. Rising temperatures affect the critical functions of marine life such as their metabolism, growth, and reproduction, while changes in marine life have been up to seven times faster than animal responses on land. The study found that some fish species have completely disappeared from some locations. While in some cases some fish species may be able to change aspects of their biology in order to adapt to warmer conditions, a relocation may be the only means of coping with rapid increases in temperatures. The latest study looked at data on 115 species of fish across all major oceanic regions. (Independent)

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