Newsletters > CP Daily: Monday June 12, 2023

CP Daily: Monday June 12, 2023

Published 02:15 on June 13, 2023  /  Last updated at 00:39 on November 2, 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

PREVIEW: Upcoming NZ ETS auction seen unlikely to clear amid lingering uncertainty

New Zealand is unlikely to sell any of the 8.9 million NZUs that will be made available at this week’s auction, market participants told Carbon Pulse, doubting bids will meet the government’s confidential reserve price.

AMERICAS

WCI Markets: CCAs rally to 10-mth high ahead of cap-and-trade rulemaking workshop

California Carbon Allowance (CCA) prices on Monday surged to levels not seen since last summer ahead of this week’s California-Quebec joint workshop to discuss potential amendments to the linked cap-and-trade programmes.

RGGI Market: RGAs sink after Q2 auction settlement misses to downside

RGGI Allowance (RGA) prices bounced around this week as traders positioned for the June auction, but ultimately ended at a loss after results showed the Q2 sale cleared below most market participants’ expectations.

New York lawmaker looks to 2024 after LCFS legislation sputters

The New York Assembly this weekend failed to vote on a bill to enact a low-carbon fuel standard (LCFS) prior to the adjournment of the 2023 legislative session, with a key lawmaker aiming to receive more education on the transportation sector programme before the next session begins.

VOLUNTARY

VCM Report: Retirement levels bounce back from May’s low levels

A flurry of companies took advantage of low carbon credit prices last week to boost retirement levels, giving an indication that the long-sliding market has found a floor.

Match made in heaven: Plant-fungi relationships could trap over a third of global fossil fuel emissions, finds new study

The relationships between plants and fungi may sequester carbon equivalent to more than one-third of global CO2 emissions from fossil fuels, according to a new study.

Zimbabwe eyes pan-African carbon trading registry as it prepares to host VCM summit

Zimbabwe is preparing to host a voluntary carbon markets forum as it targets creating a pan-African registry linked to the country’s Victoria Falls Stock Exchange (VFEX).

Tech companies team up to launch draft UK peatland crediting blueprint

Two UK-based technology companies have partnered to publish a draft methodology for crediting emissions removals from restoring peatlands.

Impact investment fund provides $3.5 million to expand African cookstove supply

An impact investment fund has agreed to disburse $3.5 million to a project developer to distribute a further 90,000 cookstoves via an existing carbon crediting programme in Africa.

Xpansiv spins out finance data subsidiary in nod to the future

Xpansiv is spinning out its finance data subsidiary into a new company called Fiutur following the company’s decision to licence its global environmental reference system in conjunction with its digital measurement, reporting and verification technology.

Dutch climate tech firm raises €3 mln in new funding

A Dutch climate tech firm has secured €3 million in funding to accelerate the growth of its product Life Cycle Assessment (LCA) technology and market teams.

Microbes critical factor for soil carbon storage, new research confirms

Microbes are the most critical factor in determining the carbon storage capacity of soil, far surpassing other processes like decomposition, according to new research that could have significant implications for climate change mitigation and improving soil health for agriculture.

ASIA PACIFIC

Singapore adds Mongolia to roster of Article 6 carbon trading partners

Singapore and Mongolia have signed a Memorandum of Understanding (MoU) on collaboration under Article 6 of the Paris Agreement, the Southeast Asian island’s tenth such carbon trading partner.

NZ opposition party vows to keep agriculture out of ETS

New Zealand’s opposition National party will keep agriculture out of the nation’s emissions trading scheme and delay a separate pricing mechanism for the sector by five years, if it wins the general election in October, it announced Monday.

China’s Chengdu planning special vouchers to subsidise carbon management investments

One of China’s largest cities is planning to roll out a special subsidy programme for businesses through the issuance of ‘zero carbon vouchers’ on an integrated platform to encourage more investments in carbon management.

EMEA

Euro Markets: Carbon shoots to three-week high amid steady pressure on short positions as gas weakens

European carbon prices overcame early weakness on Monday to reach a three-week high as early selling gave way to renewed demand – which some participants said was short-covering – while energy markets were weaker as gas prices continued to whipsaw.

Investor associations criticise Brussels for diluting climate disclosure rules

Draft European Commission rules to require companies in the EU to disclose social and environmental risks and impacts of their activities have been significantly watered down compared to the technical advisory recommendations, sustainable finance associations said on Monday.

INTERNATIONAL

Just 5% of global emissions are covered by credible targets, new corporate disclosure tracker finds

Current disclosed corporate targets are not sufficient to limit warming to 1.5C, according to a new tracker, finding that only 5% of the world’s emissions are covered by robust plans.

Growth in national and sub-national net zero target setting slows, company momentum speeds up -analysis

Growth in the number of national and sub-national net zero targets has slowed, though company net zero target-setting momentum continues at speed in the absence of universal standards, according to a report published Monday.

BIODIVERSITY (FREE TO READ)

Conservation charity lines up massive project pipeline for biodiversity market

UK-based Botanical Gardens Conservation International (BGCI) is preparing a large number of projects protecting threatened tree species for the fledgling biodiversity credit market, expecting the first issuances before the end of the year.

Transparent Project releases world-first standardised natural capital accounting methodology

The EU-funded Transparent Project has published the Natural Capital Management Accounting (NCMA) methodology, providing corporations with practical guidance for environmental profit and loss (EP&L) bookkeeping.

Circular economy could relieve pressure on biodiversity worldwide -report

The circular economy can play a role in alleviating most of the pressure currently applied by the food, construction, energy, and textile sectors on biodiversity worldwide, according to a briefing by the European Environment Agency (EEA) published on Monday.

Biodiversity offsetting scheme had limited-to-no impact, study finds

A scientific study evaluating the impact of one of the first established biodiversity offsetting schemes on native vegetation found it was not possible to conclusively demonstrate the policy had resulted in a net biodiversity gain due to limited data and the lack of robust impact evaluations.

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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

Discriminatory and punitive – Indonesia and Malaysia, two of the world’s leading palm oil producers, have criticised the EU’s new anti-deforestation law, claiming it unfairly burdens small farmers and threatens their economies. The EU Deforestation-Free Regulation (EUDR) seeks to ban commodities linked to illicit deforestation, including palm oil, and places stringent certification requirements on businesses. Officials from Indonesia and Malaysia argue that the law, which they believe is “inherently discriminatory and punitive,” could undermine efforts to combat poverty and require burdensome new procedures for certification and traceability. They’ve asked the EU for clarity on compliance requirements and are seeking further engagement on the law. The EU, however, has denied the allegations. The disagreement has reportedly impacted trade talks between the EU and Indonesia. (Euractiv)

EMEA

Emissions down – CO2 emissions from fossil fuels for energy use in the EU decreased by 2.8% year-on-year in 2022, according to Eurostat estimates published on Monday. The largest decrease was registered in the Netherlands (-13%), followed by Luxembourg (-12%), Belgium (-10%) and Hungary (-9%).  On the other end, Bulgaria registered the biggest increase in CO2 emissions (+12%), followed by Portugal (+9.9%) and Malta (+4.1%). Data show that Germany alone accounts for one-quarter of the EU’s total CO2 emissions from fossil fuel combustion for energy use. Italy and Poland (each 12%), and France (11%) came next on the EU’s list of the biggest CO2 emitters in 2022. In particular, CO2 emissions from gas decreased significantly (-13%), “reflecting, among other things, the efforts invested by EU countries to achieve the voluntary gas demand reduction target introduced in August 2022”, Eurostat said.

Making plans – Germany’s government will present the long-awaited ‘National Security Strategy’ on Wednesday with critical raw materials as a main focus, chancellor Olaf Scholz said at an event in the country, as Clean Energy Wire reports.

Fund raising – Britain and other rich nations should consider a carbon tax as the most efficient way to reduce GHGs, Bank of England policymaker Catherine Mann said on Monday. Mann said carbon taxes and emission trading schemes gave clear incentives for people and businesses to reduce their emissions as well as raising revenue, and complemented potentially costly government spending on green technology. (Reuters)

Blown away – A new study confirmed the UK’s pipeline of offshore wind projects grew again last year, climbing from 91.2 GW to 97.9 GW, BusinessGreen reports. The relatively modest growth was outstripped by the huge expansion in the global offshore wind pipeline, which saw nearly 400 GW of new projects proposed taking the total pipeline to 1.23 TW.

Coal weather – National Grid has asked the Ratcliffe coal-fired power station to warm up to cope with extra electricity demand for air conditioning as much of Britain swelters in the heat, the Guardian reports. In the early hours of Monday morning, the grid’s electricity system operator asked its owner, Uniper, to ready the asset for use. Temperatures broke 30C for the first time this year over the weekend and meteorologists forecast the chance of Britain experiencing a hot summer was 45% with weather expected to push up demand for power.

Polish pushback – Poland will appeal against EU rules to end the sale of fossil fuel cars across the bloc from 2035 to the bloc’s top court within days, the country’s climate minister Anna Moskwa said Monday. A package of EU regulations approved earlier this year aims at launching a new carbon market to rein in emissions from buildings and transport, cutting carbon emissions from passenger cars and vans to zero from 2035. Poland has been the only country consistently opposing the proposal and voted against the rules, arguing they lacked a proper analysis of market and social consequences of the ban. (Reuters)

Early birds – France will reach the level of electricity consumption expected in 2050 as early as 2030-35, according to draft forecasts by RTE, the country’s electricity network operator, seen by EurActiv. This new scenario is “one of transformation, even revolution: both on an industrial level and in terms of practical uses”, said Thomas Veyrenc, head of strategy and evaluation at RTE. The needs are increasing as the industry revises its electricity requirements to compensate for the lack of Russian gas since the outbreak of the war in Ukraine, explained RTE. This proves that “the EU is finally being seen as a standard-bearer for the economy’s decarbonisation. Its targets are becoming drivers for speed rather than constraints,” Phuc-Vinh Nguyen, an energy policy researcher at the Jacques Delors Institute, told EURACTIV. But while these prospects are a “very good thing”, especially in France, they still need to be “confirmed”, Nguyen added.

Sun and wind – The EIB and Iberdrola have signed a new financing agreement worth €1 bln to fast forward the energy transition in Europe by building an extensive network of 19 solar power plants and three onshore wind farms in Spain, Portugal, and Germany. With a total installed capacity of 2.2 GW, the projects envisage a joint investment of more than €1.7 bln, which will accelerate the energy transition and boost supply security, climate action, and social cohesion in Europe. The operation is part of the EIB’s financing package in support of REPowerEU, the EU plan to strengthen Europe’s energy autonomy

Word of advice – Developing renewable sources of energy and improving energy efficiency are necessary for climate change mitigation and energy security in Lithuania, the IMF said in a statement following an official staff visit to the Baltic nation. The new energy matrix and the transition towards it should be carefully calibrated to avoid hampering long-term growth, and moving away from fossil fuels and increasing energy efficiency are necessary to enhance energy security and reduce CO2 emissions in line with the country’s pledges for climate change mitigation, the agency added. “However, the current pace of reduction in emissions is not consistent with that objective. This will require the application of a carbon tax in sectors not covered by the [EU ETS] – set to gradually increase to €60 per metric tonne of CO2 emissions on all types of fossil fuel by 2030 – and other measures including ‘feebates’ on fossil-fuel consumption to incentivise energy conservation and more investment in renewable energy.” This follows similar guidance given last month to nearby Estonia following an IMF mission to that country. The agency said Estonia’s energy security could be supported by a more ambitious green transition. Energy security was strengthened and diversified by filling gas reserves, securing sources of LNG supply, and building infrastructures, but GHG emissions likely increased in 2022 due to a higher reliance on oil shale for electricity production following the energy crisis, it noted. Phasing out oil shale in energy production, introducing a carbon tax, and extending the coverage of the EU ETS – currently the lowest in the EU – are key steps to reducing GHG emissions, the IMF added. “Accelerating the planned investment in renewables, especially in wind and solar energy, which are a relatively small share in Estonia’s energy mix, and boosting energy efficiency in the building and transport sectors are also priorities.”

The gig is up – Danish pension fund AP Pension has invested in the Morgan Stanley 1 Gigaton fund, which aims to remove one gigaton of CO2e emissions from the Earth’s atmosphere by mid-century. 1GT is focused on investments in growth-stage companies that will seek to collectively avoid or remove 1 bln tonnes from the date of investment through 2050. The private equity fund is focused on investments in companies that aim to reduce carbon emissions in sectors such as sustainable food and agriculture, the circular economy, energy, and transport. Citywire Selector last month reported that Morgan Stanley had raised $500 mln in commitments from European investors for the ambitious Article 9 strategy. AP Pension is an independent pension company and currently has around €20 bln in assets. (Citywire)

APAC

Steely ambitions – The world’s biggest steelmaker, China Baowu, and the world’s biggest iron ore producer, Rio Tinto, on Monday announced they had signed an MoU to work together on a number of new projects in China and Australia seeking to decarbonise the steel value chain. Among planned projects are building a pilot electric melter at one of Baowu’s mills in China, optimising pelletisation technology for Australian ores as a feedstock for low-carbon shaft firnace-based direct reduction, expanding the development of Baowu’s CO2-slashing HYCROF technology, and studying opportunities for low-carbon iron in Western Australia.

Going green – The Japanese steel industry alone will have to spend about 10 trillion yen ($72 bln) to put innovative decarbonization technologies to practical use, Japan Times reports, citing an estimate by the country’s economy and trade ministry. Major Japanese steel manufacturers, including JFE Steel and Nippon Steel, are accelerating technology development and investment in a push to decarbonise their operations, such as expanding the size of electric furnaces and developing a method for substituting hydrogen for coking coal in steel production. CO2 emissions from steel production account for roughly 50% of Japan’s domestic industrial sector, according to the report.

Offsets available – An offset trading platform established by a subsidiary of Japanese trading house Mitsui, e-dash Carbon Offset, recently started selling domestically issued J-Credits, decarbonisation service provider e-dash said in a statement Monday, without disclosing further details. The new marketplace, also supported by Tokyo-listed Itoki Corporation, is the country’s first privately-owned marketplace to trade such credits beyond the Tokyo Stock Exchange.

AMERICAS

Carbon funds for Cali transit – California lawmakers reached a handshake deal late Sunday that would prove more than $3 bln for other beleaguered transit agencies that say low ridership since the COVID-19 pandemic is ending them over a fiscal cliff and without stat aid would lead to catastrophic service cuts. The proposed deal between the state Assembly and Senate restores $2 bln in transportation infrastructure funding that was slated to be cut if revenues are as low as the governor’s budget office expects, and allows the money to be used for transit operations at local transportation authorities’ discretion. The deal would allow local transit agencies to proper up their operating budgets over the next three years by diverting $1.1 bln in cap-and-trade auction revenues that are supposed to be set aside to reduce GHG emissions. Whether Gov. Gavin Newsom (D) will sign such a budget bill, however, remains to be seen. The proposed deal is expected to be passed by the Assembly and Senate on Thursday, the deadline to finalise the state budget for Fiscal Year 2023-24 that begins in July. (The Mercury News)

West Virginia vs. EPA, again – The US EPA would be blocked from forcing fossil fuel power plants to reduce their CO2 significantly by 2040 under new Republican legislation from West Virginia lawmakers. The bicameral measure, introduced by Republicans Sen. Shelley Moore Capito and Rep. Carol Miller, seeks to halt the EPA draft rule, issued last month, before it gathers momentum. The rule would have a major impact on West Virginia, the country’s second-largest coal producer and fourth in the nation in natural gas marketed production in 2021, according to the US Energy Information Administration. (Bloomberg Law)

SHIPPING

Methanol for Maersk – OCI Global on Monday announced it is fuelling the first ever green methanol-powered container ship in a new partnership with shipping company AP Moller-Maersk. In a press release, OCI said it will provide ISCC certified biomethanol to power the maiden voyage of Maersk’s first dual-fuelled container ship, in a pioneering step towards the decarbonisation of global shipping. The vessel leaves South Korea for its maiden voyage this summer, sailing along one of the world’s busiest shipping routes to Northern Europe via the Suez Canal.

AND FINALLY…

Big lawsuit in Big Sky Country – A groundbreaking climate lawsuit brought by 16 children in Montana more than three years ago went to trial Monday morning. The plaintiffs, now 5 to 22 years old, argue Montana’s fossil fuel-friendly policies violate the state’s 1972 constitution’s guaranteed right to “a clean and healthful environment.” The state has opposed the lawsuit so far on procedural grounds. The judge in the case has already stated she will not issue prescriptive policies the state must enact, if the plaintiffs were to win, but would instead issue an order declaring it had violated its own constitution. Such a ruling, however, could be a major boon to similar lawsuits across the country. “It will change the future of the planet if courts will start declaring the conduct of government unconstitutional,” Julia Olson, founder of Our Children’s Trust, the nonprofit that filed the lawsuit on the plaintiffs’ behalf, told the AP. The fact that the case is going to trial at all, is itself significant, Rebecca Bratspies, director of the CUNY School of Law’s Center for Urban and Environmental Reform, told the Wall Street Journal. “I don’t think there was a sense until somewhat recently that litigation in courts, under state constitutions, might be a path forward.” Co-plaintiff Claire Vlases told Grist that “I’ve done as much as I think I can do as a person. And now I believe it’s time for my government to take action.” (Climate Nexus)

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