Newsletters > CP Daily: Wednesday June 14, 2023

CP Daily: Wednesday June 14, 2023

Published 06:00 on June 15, 2023  /  Last updated at 06:17 on June 15, 2023  / Carbon Pulse /  Newsletters

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

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TOP STORIES

INTERVIEW: Saudi voluntary carbon firm to launch exchange next year, sets sights on being among world’s largest markets by 2030

A Saudi company established to scale up voluntary carbon market involvement across the Global South has announced it will launch an Article 6-ready exchange in 2024 and aims to establish one of the largest global markets by the end of the decade, as it hosted its second auction of credits on Wednesday.

Saudi voluntary carbon market auction sells 2.2 mln units at $6/tonne

The Saudi company set up to drive voluntary carbon market (VCM) growth sold 2.2 mln carbon credits in an auction held in Kenya on Wednesday, with the units clearing at a price of 23.50 Saudi riyal per tonne, equivalent to nearly $6.30, and sold to 16 mostly domestic firms.

AMERICAS

California’s ARB reiterates greater cap-and-trade ambition, says formal rulemaking could begin this year

California regulator ARB discussed potential scenarios of raising the Allowance Price Containment Reserve (APCR) tiers and ceiling prices in addition to modelling increased stringency of the cap-and-trade programme at a webinar on Wednesday, adding that formal rulemaking could begin as early as this year.

Quebec awards more offsets than California, as ARB’s distribution craters

Quebec distributed more compliance offsets than WCI partner California this week, as a plunge in the Golden State’s issuances lined up with one of the few yearly allocations by La Belle Province, according to government data published Wednesday.

Nova Scotia June cap-and-trade auction settles at floor with major utility absent

The Nova Scotia carbon auction this month sold all allowances at the scheme’s floor price, with the Canadian province’s largest utility not having qualified after receiving millions of extra free permits this spring, according to results published Wednesday.

British Columbia reviews fuel switching offset protocol due to additionality risk

The British Columbia government on Tuesday put the province’s fuel switching offset protocol (FSOP) under review because emissions reductions under the methodology may no longer be additional to business-as-usual practice.

Status quo for 2023-25 RFS volumes will weigh on RIN prices, bank says

US biofuel credit (RIN) prices will continue to face pressure if the EPA does not hike the next three years’ worth of Renewable Fuel Standard (RFS) quotas in an upcoming final rulemaking, a major investment bank said Tuesday.

Rio de Janeiro approves tax breaks to incentivise voluntary carbon credit use

Rio de Janeiro Mayor Eduardo Paes this week signed legislation to reduce costs for firms utilising voluntary carbon credits and position the Brazilian city as a centre of the green economy.

VOLUNTARY

Peruvian appeals court overturns Cordillera REDD+ project ruling

An appeals court in Peru has overturned a landmark ruling that would have given an Indigenous community there the right to reclaim ancestral rainforests in the Cordillera Azul National Park, which has been registered as a REDD+ project.

FEATURE: Two-way bridge over troubled water – momentum builds behind crypto carbon solution

In a bid to eliminate fears of double counting and bring liquidity back to the crypto carbon space after a troubled year, an emergent blockchain solution, ‘the two-way bridge’, is gathering momentum.

Pre-issuance European soil carbon credits said to fetch up to €60 in fast growing market

Pre-issuance credits for a European soil carbon scheme expected to be certified by Verra before the end of the year are being snapped up between €50-60 amid a spike of interest in the fast-growing voluntary market, a project developer said on Wednesday.

ACX, BeZero expand carbon credit ratings partnership to Gulf States

BeZero Carbon and ACX have expanded their carbon credit ratings partnership to the Middle East, an offering buyers in the Gulf States access to offset grades.

EMEA

EU climate science advisors recommend 90-95% GHG cut as 2040 target

The EU’s panel of climate science advisors has recommended that the bloc set a 2040 greenhouse gas emissions reduction goal of 90-95% below 1990 levels in upcoming legislation, an interim goal that would hinge largely on the rapid decarbonisation of the power sector.

Euro Markets: EUAs reach two-month high on extended short squeeze as energy reverses early losses

EUA prices rose to the highest in nearly two months on Wednesday as traders continued to test the strength of short positions after a weekly data release showed a persistent large net short position among investment funds, while gas and power markets reversed course in the middle of the day to post a sixth successive daily gain amid renewed paring of short holdings.

Food for thought: Experts digest idea of including agricultural emissions in EU ETS

Experts weighed the merits of including agriculture emissions in the EU ETS at an event in Brussels on Wednesday, with panellists agreeing that the market mechanism could be a stronger policy tool than what is in place now to lower the bloc’s farming emissions, which have not fallen since 2005.

German government waters down divisive clean heating bill, delaying transition

Germany’s government has agreed on a watered down version of a law to cut emissions from heating amid fears over excessive costs, a move likely to apply bullish pressure to the nation’s fuels carbon pricing system as a result of delaying the transition.

Africa’s first international carbon standard registry launches with pledge to sharply pare down development costs

A new international carbon standard registry that aims to sharply cut the cost of project development was launched in South Africa on Wednesday.

Africa Climate Mobility Initiative, Mozambique govt launch programme to advance carbon trading

The Africa Climate Mobility Initiative (ACMI) and the Mozambique government this week launched a scheme aimed at integrating the country into global carbon markets and fostering sustainable economic growth.

INTERNATIONAL

Global groups collaborate to develop coal-to-renewable crediting methodology

A consortium of groups has begun developing a methodology to use carbon finance to transition emerging economies away from coal-fired power to renewable energy, with plans to present the method at COP28 in Dubai, they announced Wednesday.

German national security strategy pledges ‘substantial contribution’ to climate finance

The delayed German national security strategy was published Wednesday and includes key climate pledges including a promise for a ‘substantial contribution’ to international climate finance, rapid operationalisation of the global loss and damage finance mechanism, and a doubling down on the creation of an climate club between countries.

Shell vows to hold oil output steady, low-carbon spend to remain a fraction

Shell promised to deliver more value with less emissions on Wednesday, pledging to spend $10-15 billion of capital investment on low carbon technology between 2023-25, after angering climate activists by abandoning plans to cut oil production each year for the rest of the decade.

Peak oil demand on horizon amid surge in demand for electric vehicles, says IEA

Peak global oil demand is in sight amid surging demand for electric vehicles, the International Energy Agency (IEA) said on Wednesday, bringing forward the date.

ASIA PACIFIC

Taiwan planning to unleash public lands for generating forest carbon credits -minister

Taiwan is planning to utilise idle public lands to generate forest carbon credits, with two projects in the pipeline that will be launched next year at the earliest, according to the island’s newly-appointed finance minister.

BHP backs three projects to help scale blue carbon in Australia

Miner BHP has picked three projects to support via its blue carbon grants programme in a bid to help drive marine emissions cuts across Australia and develop blue carbon methodologies for the domestic carbon market.

Singaporean carbon management platform partners with major Japanese firms

A Singapore-headquartered decarbonisation SaaS platform operator is aiming to make a foray into the Japanese market through strategic partnerships with local and international companies, lining up several major firms for a partnership, it announced Thursday.

Australia appoints chair, advisory board of Net Zero Authority

Australia on Wednesday appointed the chair and advisory board of its newly-established Net Zero Authority (NZA), tasked with guiding the country’s economic transition to net zero emissions.

BIODIVERSITY (FREE TO READ)

Coral Triangle nations eye new fund to back marine action plan

The six-nation Coral Triangle Initiative is launching a conservation fund with initial contributions from German development bank KfW and USAID to back its new action plan for marine protection.

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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

EMEA

Franco-German spat – EU member states have further delayed a decision until Friday to sign-off on the EU’s scaled-up 2030 renewable energy targets after a proposal to allay French concerns over its nuclear industry was criticised by nations led by Germany. At a meeting of EU government officials on Wednesday, Sweden floated amending part of the provisional trilogue deal but this triggered scepticism from a majority of countries, Bloomberg reported, citing unnamed EU diplomats with knowledge of the talks. Paris has been pushing to change a non-binding ‘recital’ in the text over concerns about the cost and time needed to upgrade its gas-powered ammonia plants so that they use hydrogen produced using renewable electricity.

Sustainable recharging – The European Parliament approved on Wednesday new rules for the design, production and waste management of all types of batteries sold in the EU. MEPs endorsed a deal reached last year with the Council. The text includes more stringent targets for waste collection (for portable batteries – 45% by 2023, 63% by 2027 and 73% by 2030; for LMT batteries – 51% by 2028 and 61% by 2031), recycling efficiency (eight years after the entry into force of the regulation – 16% for cobalt, 85% for lead, 6% for lithium and 6% for nickel; 13 years after the entry into force: 26% for cobalt, 85% for lead, 12% for lithium and 15% for nickel), and material recovery (lithium – 50% by 2027 and 80% by 2031; cobalt, copper, lead and nickel – 90% by 2027 and 95% by 2031), as well as tougher sustainability, performance and labelling requirements. Due diligence policy will also be put in place for all economic operators, except SMEs. Finally, portable batteries in appliances will be easier to replace. The Council will now have to formally endorse the text before its publication in the EU Official Journal shortly after and its entry into force.

The row over Turow – A Warsaw provincial administrative court has ordered the suspension of the expansion of the Turow lignite mine beyond 2026 due to concerns about the environmental impact of the mine. The EKO-UNIA Ecological Association, Greenpeace, the Frank Bold Foundation, and the town of Zittau argued that PGE’s report on the environmental impact assessment of the mine expansion was seriously flawed. Despite the ruling, Polish PM Mateusz Morawiecki vowed the government would keep the mine operating and declared that “no courts, whether from Brussels or Warsaw, will dictate to us what is meant by Poland’s energy security.” On Feb. 17, 2023, the Polish Ministry of Climate and Environment permitted the mine to continue operating until 2044. Radoslaw Gawlik from the EKO-UNIA Ecological Association said the failure of the government and PGE to plan the transition away from coal in the Bogatynia-Zgorzelec region has already meant the area has missed out on 1 bln zlotys ($234 mln) in EU funding for a just transition.

AMERICAS

Gas stove gamble – The White House released its energy agenda on Tuesday, outlining plans to regulate gas powered stoves, transmission, and heat pumps in the latter half of 2023 and the early part of 2024. The Department of Energy (DOE) is hoping to finalise its regulation on gas stoves by 2025, but the issue has proven a political lightning rod. House Republicans and 29 House Democrats passed a bill that would ban the Consumer Product Safety Commission from regulating gas stoves and are set to pass a similar bill limiting the DOE, but neither are expected to pass the Democrat-controlled Senate. (E&E News)

Government gets – US federal agencies on Wednesday paved the way for state, city, and local governments and other nonprofit entities to join the private sector in accessing the lucrative tax credits included in the Biden administration’s landmark climate bill. The US Department of the Treasury and Internal Revenue Service on Wednesday released guidance on what tax-exempt entities need to do to access the credits the provisions that were included in the Inflation Reduction Act, which President Joe Biden signed into law in August. In the 10 months since the IRA passed, private sector companies have announced more than $107 billion in new clean energy investments, John Podesta, senior advisor to the president for clean energy innovation and implementation, said on a call with reporters on Tuesday. Conventionally, states, territories, tribes, local governments and nonprofits have not been not eligible for tax credits, because they do not derive profits from which to deduct the value of a tax credit. The IRA changed that. (CNBC)

Paper power – The Canadian federal government is giving C$3.6 mln ($2.7 mln) to an American pulp firm called International Paper Company to use a “first-of-its-kind filtration technology” to reduce the use emissions from creating paper, a press release said Wednesday. The project will take place at the paper company’s plant in Fort McMurray, Alberta. The filtration technology, which has not been used at an industrial scale before, is supplied by US-based Via Separations.

ASIA PACIFIC

Steel yourself — Australian miner Fortescue Metals Group (FMG) has signed a MoU with China’s Baowu Steel Group Corporation to work together on reducing emissions associated with iron and steelmaking, the company announced. The collaboration will explore lower emissions iron making technology at one of China Baowu’s operations in China using Fortescue iron ore and green hydrogen. It will also involve iron ore benefication R&D and collaboration opportunities in renewable energy and green hydrogen. FMG CEO Fiona Hicks said her company was exploring a range of options to reduce emissions in the steel value chain including through partnerships with suppliers, customers and research institutes.

Gas leak — An unknown number of disused wells off the West Australian coast leaking gas for at least 10 years are impossible to fix, according to gas producer Santos, the Nine Newspapers report. The leaks at the Legendre field, 105 km north of the Pilbara port of Dampier, were first spotted by an underwater remotely operated vehicle in 2013, two years after work was done to seal them permanently. Santos submitted a plan to regulator NOPSEMA in early 2022 that rejected action to stem the leaks as “not technically feasible”. Instead, the company proposed to monitor them for another five years. Australia’s offshore regulator would not comment on Santos’ plan as it was under assessment, but was clear about its policy, saying it would never accept that gas wells leak indefinitely.

Say it loud – Business leaders in South Korea on Wednesday reaffirmed their will to lead the global hydrogen economy and accelerate the hydrogen transformation in the country, the Korea Herald reports. The members of the Korea H2 Business Summit, a corporate-led hydrogen alliance that includes Hyundai Motor and SK Group, have announced the goals of having more than 10% of emission reductions through hydrogen in 2030 and more than 25% in 2050. Companies also called for the need to establish a bidding market for green hydrogen development and expand government incentives for hydrogen fuel cell systems, according to the report.

AVIATION

First SAF – Sustainable aviation fuels (SAF) have been certified for the first time under the UN’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), ICAO announced. Nine batches of SAF totalling 1,542 tonnes and produced in China, the Netherlands, and the US by ECOCHEM, Neste, and WorldEnergy respectively, were certified. These fuels, made from wastes, have 75-84% lower CO2 emissions compared to conventional aviation fuels. ICAO Council President Salvatore Sciacchitano said that the successful certification demonstrates the robustness of the CORSIA global framework for sustainability assessment and its readiness to support ICAO’s climate change goals.

VOLUNTARY

More than six – The demand-side focused The Voluntary Carbon Markets Integrity Initiative (VCMI) has joined the Article 6 Implementation Partnership, the initiative set up under Japan’s leadership last year to boost understanding and accelerate the implementation of the Article 6 emissions trading provision of the Paris Agreement. The move follows VCMI last month launching a toolkit aimed at assisting governments with their market regulation and oversight. By joining the partnership, VCMI said it hopes to support host countries as they integrate voluntary carbon market finance into their plans to meet and enhance NDC Paris pledges and implement the rules and modalities necessary for carbon market activities to be recognised under Article 6.

INVESTMENT

Hey big spender – Finnish pension giant Ilmarinen Mutual Pension Insurance has invested €2.74 bln in new climate-focused iShares ETFs in the US and Japan, launched by BlackRock. Of that, €2 bln was invested in the US fund, with the remaining €745 mln going into the Japanese fund. Both investments mark a continuation of the firm’s climate-oriented investment policy, an Ilmarinen spokesperson said. The new iShares ETFs track the MSCI Climate Action indices. (Citywire)

Serious ESG – European limited partners are taking ESG far more seriously than their US counterparts, a new report suggests. Coller Capital’s latest Global Private Equity Barometer survey found that three-quarters of European LPs have appointed dedicated ESG personnel, Citywire reports. By contrast, just 21% of American LPs had done so, with 72% having no plans at all to appoint in-house specialists of this kind. However, the report also found that most LPs did not expect the ESG backlash in the US to negatively impact the emphasis general partners place on ESG. “Only 4% of LPs expect the anti-ESG movement in the US will result in GPs deprioritising the importance of ESG within the private equity market,” it said. “The majority of LPs are not expecting GPs to change the emphasis they place on ESG.”

AND FINALLY…

Death sentence – Rich countries are signing a “death sentence” for millions of poor people around the world by failing to phase out fossil fuels, climate activist Greta Thunberg told governments at the SB58 UNFCCC talks in Bonn earlier this week. She warned during the intersessional summit that with annual GHGs at an all-time high, only a rapid and equitable phaseout of fossil fuels would keep global temperatures within the scientifically advised limit of 1.5C above pre-industrial levels. “The coming months and years… will be crucial to what the future looks like. It is what we decide now that will define the rest of humanity’s future,” she told a press conference at in Bonn where governments are meeting to discuss the climate crisis. The talks continue to be fraught with disagreements over climate finance (The Guardian)

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