Newsletters > CP Daily: Friday June 9, 2023

CP Daily: Friday June 9, 2023

Published 02:57 on June 10, 2023  /  Last updated at 03:02 on June 10, 2023  /  Newsletters

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

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TOP STORY

Governmental climate credibility gap exposed as UN talks near halfway point with little to show

Global progress on climate change continues to stutter as a key two-week UN summit reaches its halfway point with few signs of progress on Friday, as an academic analysis of national plans showed that almost none of the highly polluting countries have a credible trajectory towards net zero emissions.

INTERNATIONAL

ANALYSIS: Climate finance alliance still has future despite exodus of insurance firms

The Glasgow Financial Alliance for Net Zero (GFANZ) coalition still has an important role to assume in meeting international climate targets, experts have said, despite an exodus of insurance firms from one of its sub-groups that has led some to question the effectiveness of such industry initiatives.

Ghana, South Korea negotiate bilateral carbon trade deal

Ghana has opened talks with South Korea to negotiate a bilateral carbon trade deal, an official from the African nation said on Friday as the government continues to lead the field in leveraging the Article 6.2 mechanism of the Paris Agreement.

AMERICAS

RGGI Q2 auction maintains bearish trend with another sub-$13 clear

The Q2 RGGI cap-and-trade auction cleared below $13 for the third consecutive allowance sale against broad market expectations as compliance participation waned, according to results published Friday.

Small size of first Washington carbon reserve sale sends allowance prices soaring

Washington state will make only one-eighteenth of its Allowance Price Containment Reserve (APCR) permits available at the cost containment mechanism’s first sale in August, the Department of Ecology (ECY) announced Friday afternoon, sending secondary market prices soaring to the reserve’s Tier 2 price.

Speculators slash CCA length, producers favour current California vintage and buy RGAs

Speculators significantly reduced their net holdings of California Carbon Allowances (CCAs) this week, while producers built length in the current vintage WCI contract and picked up RGGI Allowances (RGAs), data from the US Commodity Futures Trading Commission (CFTC) showed Friday.

EMEA

EU seeks views as it prepares creation of an industrial carbon management market

The European Commission has launched a long-awaited consultation on the EU’s upcoming industrial carbon management strategy which is seen by stakeholders in the removals and carbon capture and storage space as key for shaping the future of such technologies in the bloc.

Euro Markets: EUAs post biggest weekly gain in six months amid short covering as front-month gas spikes

European carbon prices rose for a third day on Friday to reach their highest in nearly three weeks, breaking through a slew of technical targets as traders covered short bets on carbon and gas, triggered by a relatively strong auction and a nearly 24% intraday gain in prompt gas prices.

One EU member state adjusts free 2023 EUA allocation in past fortnight

Just one EU member state made adjustments to its free allocation of 2023 ETS carbon permits over the past fortnight, according to data released late Friday.

ASIA PACIFIC

ACCU issuance nearly halves in Q1, but market well-supplied to 2030, Australian regulator says

The number of Australian Carbon Credit Units (ACCUs) issued in the first quarter of 2023 fell by nearly half compared to the same period last year, according to the Clean Energy Regulator, though it estimated that the market is well supplied to 2030.

Australia publishes ACCU market reform plan, grant guidelines to A$20 mln outreach programme

The Australian government on Friday published its long-awaited implementation plan to reform the country’s carbon market, while it will launch its A$20 million ($13.3 mln) Carbon Farming Outreach programme next week.

Japan’s main bourse to launch carbon market, trading to begin around October

Japan’s main bourse will set up a carbon market that initiates trading of domestically issued J-Credits around October this year, it announced Friday.

Singapore-based start-up partners with Chevron for pilot lower carbon fuel oil deal

A Singapore-based green finance platform has teamed up with oil major Chevron to back a fuel oil transaction with carbon credits under a government-backed pilot programme that seeks to improve transparency and trust in sustainable finance.

Australia commits funding to help Laos participate in Article 6 markets

Australia has committed A$2.6 million ($1.7 mln) to a partnership with Laos and the Global Green Growth Institute (GGGI) to help strengthen its capacity in carbon markets and participation in Article 6 markets.

CN Markets: CEA price reaches new year-to-date high, though liquidity remains drained

Allowance prices in China’s carbon market edged up over the past week with improved but still small trading volume, though the overall sentiment remains cautious amid concerns over the impact of the upcoming carbon border tax, experts said.

ADB-approved Indonesian project brings size to JCM

The Asian Development Bank (ADB) has given the green light to a geothermal power generation project utilising the Japan Fund for the Joint Crediting Mechanism (JCM), which will be one of the largest projects registered under the bilateral mechanism so far.

VOLUNTARY

Electronics, transport giants latest to introduce internal carbon pricing

A Japanese electronics giant and a Danish transport and logistics conglomerate are the latest major companies to introduce internal carbon pricing.

Brazilian wind power project downgraded, REDD initiative praised by ratings agencies

One rating agency has downgraded its score for credits from a wind power project in Brazil, while another praised a REDD+ project in the country.

UPDATE – Farmer payouts drop during 2nd year of US soil carbon offset programme

(Updates with details from company) – A major US-based agricultural carbon offset firm distributed around $6 mln to US farmers and ranchers in its second year, it announced Wednesday, around a third less than was awarded in the programme’s inaugural year.

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CONFERENCES

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

Business is good – Shell will keep oil output steady or slightly higher into 2030 as part of CEO Wael Sawan’s efforts to regain investor confidence as the energy giant wrestles with poor returns from renewables while oil and gas profits are booming, company sources told Reuters. Sawan will announce at an investor event next week the scrapping of a target to reduce oil output by 1% to 2% per year having already largely reached its goal for production cuts, mainly through selling oil assets such as its US shale business, the sources said.

EMEA

Bottled it – The poll-leading UK opposition party has watered down a commitment to an annual £28 bln of borrowing for a “green prosperity plan”, announcing that the figure would not be reached in the first two and a half years of a Labour government, the FT reports. This means it has watered down its overall £140 bln flagship green energy plan days before it was due to be presented due to cost. The party said that it was still committed to the scheme, but it would only gradually “ramp up” borrowing to an annual £28 bln and that the target would be achieved in the “second half of the first parliament” if Labour wins the next general election, due to take place next year. The policy is considered the main UK opposition party’s biggest single spending commitment and was first announced in 2021 when interest rates were close to zero. They have since risen to 4.5%. Labour said it would borrow in the government bond market to accelerate the shift towards the UK’s 2050 net zero target by backing projects including renewable energy schemes, nuclear power, and home insulation.

Pointless tax – The UK Treasury announced a plan to ease a windfall tax on the profits of British oil and gas companies, but the measure was quickly criticised as insufficient to boost investment in the North Sea, Bloomberg reports. The tax rate, which has been at 75% for the companies since last year, will return to 40% if average energy prices fall to $71.40/bbl and 54p/thm for gas for two consecutive quarters. The government said it is aiming to secure energy supply and protect jobs, but it acknowledged that the measure is unlikely to kick in before 2028, when the windfall tax is due to end anyway – and by which time a new government is likely to be in charge.

Consumer aid – Separately, the Treasury pegged the final cost of keeping a lid on the UK’s energy bills at £39.3 bln between Oct. 2022 and Mar. 2023 after Russia’s invasion of Ukraine propelled energy market prices to record levels, The Guardian reports. The unprecedented jump in wholesale energy costs forced the government to make its biggest ever intervention on energy bills at a cost to the exchequer of about £2,500 every second since October, it said. Home energy bills had been on course to more than triple in the space of a year to reach an annual average of £4,300 in the first quarter. In response, the government spent £21 bln to cap the average dual fuel bill at £2,500 through its energy price guarantee. It spent a further £12 bln to give every household a £400 rebate in order to reduce costs further. The National Audit Office (NAO) criticised the schemes for offering support to millions of households that were still able to afford their energy bills. The NAO had forecast that the government’s support plans would cost £69 bln, but falling market prices have reduced the cost of the schemes. The Treasury also spent £5.5 bln over the winter through its energy bill relief scheme, which provided a discount to businesses and public sector organisations such as schools and hospitals between October and March.

State aid – Slovenia will receive €150 mln to support the rollout of renewable energy and energy storage, the EU Commission announced on Friday. The aid, through direct grants up to €25 mln per beneficiary, will be granted on the basis of an estimated capacity volume and budget and no later than 31 December 2025. Brussels found that the scheme is in line with the conditions set out in the temporary crisis and transition framework, and that it is necessary, appropriate and proportionate to accelerate the green transition.

Forest bonds – Kenya could raise as much as 10 bln shillings ($72 mln) to spend on curbing deforestation to fight climate change if it securitises income from its forests, according to David Gikaria, chairman of the National Assembly’s environment committee. “Logging and plantation revenues can be used to raise bonds for the restoration of arid and semi-arid lands,” the committee said in a budget report that’s under debate. The funds can also support a credit guarantee program offering farmers incentives to grow high-value fruit trees, it said. In addition, companies buying carbon credits from forest projects should be granted tax breaks, the lawmakers proposed. Kenya targets to plant 15 bln trees by 2030 to help restore 10.6 mln hectares (26.2 mln acres) of degraded land and enlarge forest cover to 30% from 8.8%. (Bloomberg)

AMERICAS

Shape up or ship out – Two bills were introduced in the US Congress this week aimed at ending pollution from maritime shipping: the Clean Shipping Act of 2023 and the International Maritime Pollution Accountability Act of 2023. Submitted by Democrat lawmakers, the bills stand little chance at passing Congress due to Republican control of the House and the lack of a sufficient Democrat majority in the Senate. The Clean Shipping Act would direct the US EPA to promulgate regulations to reduce GHG emissions from marine vessels of 400 gross tonnage and above that call on ports in the US, reaching 100% GHG emission reductions by 2040. It also directs EPA to require zero in-port emissions from marine vessels by 2030. The International Maritime Pollution Accountability Act would introduce a pollution fee on large marine vessels: a $150 per tonne maritime CO2e fee, as well as fees for the NOx, So2, and PM2.5 that ships emit. The revenue generated would then be directed towards funding for the shipping industry and its decarbonisation.

Early emissions – Oregon fuel suppliers released 21.1 million tonnes of anthropogenic CO2e in 2022, according to unverified figures released by the Department of Environmental Quality (DEQ) on Friday. The DEQ said the data was preliminary and being released in response to a public records request, and therefore was not commensurate with or directly comparable to data published for prior years that had gone through agency review and verification. DEQ said it will post reviewed and verified GHG emissions data this fall.

Building paths to net zero – Seattle Mayor Bruce Harrell launched a new proposed Building Emissions Performance Standard (BEPS) for existing 1,650 non-residential and 1,885 multi-family buildings greater than 20,000 sq. ft., along with 600 campus buildings at colleges and hospitals with reporting requirements starting 2027, to reduce emissions by 325,000 t – or 27% below 2008 levels – by 2050, the city reported in a blog post on Thursday. Buildings owners would have flexible compliance pathways: Path A: meet standard targets at five-year intervals to be net zero by 2050; Path B: receive extensions or exemptions, deduct emissions from certain end uses, or make compliance payments for the first interval; Path C: create a detailed decarbonisation compliance plan that outlines a path to net zero.

ASIA PACIFIC

JERA partnership  – JERA, Japan’s biggest power generator, has teamed up with chemical manufacturer Nippon Shokubai and engineering company Chiyoda Corporation to jointly develop ammonia cracking technologies, it said in a statement released Friday. Under the current plan, JERA will conduct bench-scale tests to confirm and evaluate the performance of catalysts and processes and identify issues for social implementation. Nippon Shokubai will consider the establishment of a basic manufacturing method for the development of a catalyst for extracting hydrogen from ammonia, while Chiyoda will design a bench-scale testing facility, according to the statement.

Another JERA partnership – In another release, JERA said it will work with oil giant ENEOS to establish a large-scale CO2-free hydrogen supply chain, with the aim of constructing a hydrogen quality standard system for industrial utilisation.  ENEOS will conduct research on hydrogen properties for a wide range of industrial fuel applications, while JERA will evaluate the impact of aromatic compounds on power generation applications.

Green commitments – Indonesia’s Pertamina NRE said it has succeeded in increasing the additional installed capacity of solar power plants by 236%, with the total reaching 35 MW by the end of 2022, according to a company statement. Various green business initiatives were initiated during 2022, it said, through collaborations with strategic partners. Pertamina NRE has been developing clean hydrogen with SEMBCORP, IGNIS, TEPCO, Keppel, Chevron, and Krakatau Steel. The Indonesian company has also teamed with Pertamina Hulu Energi and the Pertamina Internasional Refinery for its carbon trading initiative.

AND FINALLY…

Movin’ to the country… – An unusually warm winter and subsequent late spring freeze caused Georgia to lose more than 90% of its peach crop this year. In 2021, the 130 mln pounds of peaches produced in the Peach State were valued at around $85 mln. Lawton Pearson of Pearson Farm in Fort Valley, Georgia told CNN the peach crop hasn’t been hit this bad since back in 1955. Peaches need some periods of cold weather to fruit, but the first three months of 2023 were the warmest on record in Georgia and the number of days cold enough for a healthy peach crop has been dwindling as the climate continues to warm. (Climate Nexus)

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