Newsletters > CP Daily: Thursday June 15, 2023

CP Daily: Thursday June 15, 2023

Published 02:00 on June 16, 2023  /  Last updated at 02:02 on June 16, 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

ANALYSIS: Negotiators advance talks on Article 6 technicalities despite chaos of UN Bonn summit

Parties negotiating rules for the new Article 6.4 UN carbon crediting mechanism under the Paris Agreement managed to advance discussions on technical details during UN climate negotiations held in Bonn over the past two weeks, despite chaotic scenes that held up wider progress at the gathering.

INTERNATIONAL

Gold Standard and GGGI team up to launch policy crediting framework

Carbon credit certifier Gold Standard has partnered with the intergovernmental body Global Green Growth Institute (GGGI) to deliver a policy crediting framework than would enable country-to-country emissions trade at scale under Article 6 of the Paris Agreement.

Global steel industry has the mettle to decarbonise by early 2040s, say think-tanks

The global steel industry could achieve net zero emissions by the early 2040s without risking stranded assets from existing coal-based blast furnaces, according to a new study by two European think-tanks.

VOLUNTARY

Singapore-based trading platform seeks new markets to add to REDD benchmark

Moves to create a benchmark price for voluntary carbon credits are gathering pace, with Singapore-based CIX platform now exploring other categories in the market after launching its REDD avoided deforestation assessment last week, a company executive told Carbon Pulse on Thursday.

OECD says multinationals should use carbon credits only as a last resort

Carbon credits should only used as a last resort in corporate climate action, and large corporates should prioritise eliminating or reducing sources of emissions over offsetting, the Organisation for Economic Cooperation and Development (OECD) has advised in updated guidance.

Canada-based developer finalises $2.5 mln pre-sale of African reforestation credits to mystery buyer

A Sierra Leone rewilding project run by a Canadian company had $2.5 million (C$3.3 mln) of its yet-to-be generated carbon credits pre-purchased by a Fortune 100 company, the developer announced Thursday.

Canada-based voluntary carbon project investor launches online credit marketplace

A Canadian-based voluntary carbon project investor has launched an online marketplace offering credits from its portfolio.

EMEA

Respite for big emitters as Germany unveils plans to close 2030 emissions cut gap

Germany’s economy ministry on Wednesday unveiled a draft of its long-anticipated climate action programme, easing the burden on big emitters while seeking to steer the nation towards its currently-out-of-reach 2030 emissions reduction target.

Spain to push electricity market reform under EU presidency, as election looms

Spain wants to speed up a reform of the EU electricity market design as the country prepares to take over the rotating EU presidency next month, though the nation’s July elections may spur a rapid change in course as the ruling administration trails in the polls.

Euro Markets: EUAs snap six-day rally after reaching new two-month high amid high gas volatility

EUAs snapped their six-day rally on Thursday, settling lower after earlier hitting a new two-month high as the market ebbed and flowed in response to another 25% swing in prompt gas prices, leading some to speculate that the recent rally driven by short-covering in both markets may be nearing an end.

AMERICAS

WCI Markets: CCAs push higher from rulemaking workshop and into options expiry, Washington reserve sale size boosts secondary market

California Carbon Allowance (CCA) prices rallied through a packed week of activity including a cap-and-trade public workshop discussing plans to increase programme stringency, options expiry, and macro markets rallying after a pause in the US interest rate hiking cycle, while Washington Carbon Allowances (WCA) initially lurched higher on the announcement of a small reserve sale in August.

ASIA PACIFIC

China thermal power growth accelerates in May amid expanded coal output

Growth in China’s thermal power generation accelerated in May, outpacing the growth of total power output amid expanded coal production, despite the slower-than-expected economic recovery, government data showed Thursday.

BIODIVERSITY (FREE TO READ)

EU lawmakers defeat efforts to kill nature bill, vote postponed due to lack of time

The European Parliament’s environment committee (ENVI) narrowly defeated a move to fully reject the highly disputed nature restoration bill on Thursday, but its full position is yet to be established because the voting process was suspended after several hours due to a lack of time.

Biodiversity offsetting included as green investment in EU green taxonomy

The European Commission has included biodiversity offsetting in its taxonomy of what counts as a sustainable investment, against the recommendations of the body advising the EU executive on green taxonomy rules.

Biodiversity Pulse Weekly: Thursday June 15, 2023

A weekly summary of our biodiversity news plus bite-sized updates from around the world. All articles in this edition are free to read (no subscription required).

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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

Climate cash check – Several hundred World Bank-backed projects with the stated aim of tackling climate change mitigation or adaptation have no obvious connection to those, the FT reports, based on a study by researchers at the Center for Global Development and the Breakthrough Institute that examined more than 2,500 projects in the World Bank climate portfolio listed between 2000-22 that largely did not touch on the lender’s carbon credit investments over that period. In response, World Bank officials said the lender embedded climate objectives into its development lending, rather than lending only to specific climate projects. Bank officials also said that since 2011 it had used a methodology employed by all multilateral lenders to express the expected benefits of a loan as a percentage, meaning some projects that have only a small climate co-benefit were still proportionally counted. The findings come a week ahead of the high-level Summit for a New Global Financing Pact in Paris that will address climate finance and global financial reforms including multilateral lending.

Detox diet – Separately, a World Bank report published Thursday states that trillions of dollars spent on subsidies for agriculture, fishing, and fossil fuels are causing harm to the planet and could be better used to combat climate change. According to the “Detox Development: Repurposing Environmentally Harmful Subsidies” paper, governments spend about $1.25 trillion a year on these subsidies, approximately six times the amount pledged annually for renewable energies and low-carbon development under the Paris Agreement. The report details how these subsidies lead to environmental degradation and contribute to climate change, air pollution, and inequality. Subsidies for fossil fuels were $577 bln in 2021, and if redirected, could yield at least half a trillion dollars for more sustainable uses. The report also highlights the issue of implicit subsidies, which amount to $6 trillion annually and represent the costs associated with pollution, GHG emissions, and the destruction of nature. Direct agriculture subsidies of over $635 bln a year contribute to excessive fertiliser use and forest loss, while $35 bln in yearly fisheries subsidies are depleting fish stocks and reducing profitability. The report calls for subsidy reform, compensating vulnerable groups, transparent communication, providing adjustment time, and demonstrating reinvestment of the freed-up revenue for longer-term development.

Fossil phase out – UN chief Antonio Guterres has said fossil fuels, not just their emissions, are the problem in the climate crisis, in an apparent rebuke to the UAE Cop28 presidency. Speaking after a meeting with civil society, Guterres urged countries to “progressively phase [fossil fuels] out, moving to leave oil, gas and coal in the ground where they belong”, and boost investment in renewable energy. Guterres’ statements take aim at countries calling for the phase out of fossil fuel emissions rather than the fuels themselves and for the large-scale deployment of CCS technology. (Climate Home)

Greening steel – India’s Tata Steel signed an agreement with Germany’s SMS group on Wednesday to collaborate on a technology that aims to cut carbon emissions from the steel-making process by more than 50%, the steelmaker said in a statement. The two companies will hold technical discussions and demonstrate a decarbonisation technology developed by the SMS group at a blast furnace in Tata’s Jamshedpur plant in eastern India as part of the agreement, Tata Steel said. (Reuters)

EMEA

Wonky maths – The European Commission’s energy system modelling will not produce accurate calculations about the EU’s climate future until it receives the update it needs, writes Niels Fuglsang, a Danish MEP for the centre-left S&D and lead lawmaker on the Energy Efficiency Directive. He stated that the Commission needs to deliver an up-to-date EU modelling tool ready to create a strong background for the 2040 climate target and policies. Fuglsang cited CONCITO and other analysis, finding that the modelling is not up-to-date on cost and performance of crucial technologies such as heat pumps, electric boilers, and energy storage. (EurActiv)

Paris promise – The French government is mulling building a minimum of 8-14 new nuclear reactors and boosting targeted solar capacity from 100 GW to 140 GW by 2050, according to an official document seen by Montel. The working document, which would form the basis for discussion between MPs and energy sector players to finalise a new energy roadmap to 2023, referred to the need to “maximise efforts on nuclear and renewables”. The government was also expecting its nuclear fleet to produce 361 TWh by 2030, compared with this year’s forecast annual output of 300-330 TWh and minimum of 6 nuclear plants originally pledged by President Emmanuel Macron.

Coal awakening – British power generator Drax Group is in talks with National Grid to restart two coal-fired units to be used as emergency back up power supply for next winter, Bloomberg reports. National Grid was asked by the government earlier this year to explore extending a coal reserve that was used last winter as a safety buffer. Drax is in talks to re-open the units at its power station in north England, according to the grid operator’s early winter outlook published on Thursday.

Tax guidance needed – A Scottish accountancy firm has urged for more explicit legislation regarding carbon taxation, stating that HMRC’s lack of guidance could hinder Scotland’s net zero objectives. Douglas Home & Co has highlighted growing confusion over the taxation of carbon credits amid increasing demand for Scottish land suitable for offsetting. Landowners seeking to generate woodland carbon units face a complicated taxation landscape, with no specific instructions from HMRC on how credits should be taxed. Despite many arguing for an exemption from taxation for carbon sequestration revenue, the accountants argue that the lack of clarity from HMRC could lead to significant variations in taxation rates depending on how income from Pending Issuance Units (PIUs) and Woodland Carbon Units (WCUs) are classified. The situation could potentially be costly for landowners and organisations, with income tax rates ranging from nil to 46%. (Scottish Financial News)

AMERICAS

CREATE removals – A bipartisan group of US senators on Thursday introduced the Carbon Removal, Efficient Agencies, Technology Expertise (CREATE) Act to boost research and development of carbon removal technologies that advance global sustainability. The bill would create, within the National Science and Technology Council, a new interagency group on Large-Scale Carbon Management that will be co-chaired by the Office of Science and Technology Policy and officials from several Cabinet agencies. It would establish four working groups within the Large-Scale Carbon Management interagency group to pursue a technological and detailed CDR research and demonstration initiative across several federal agencies. The working groups will coordinate with the Office of Management and Budget to enhance existing research programmes as well as establish new ones to deliver commercial-ready CDR innovations within a decade. It also would require that the working groups focus on carbon removal in the oceans, atmosphere, and land using both natural and technological approaches.

Decarbonisation dash – As many as 40 projects to decarbonise the US industrial sector will receive $135 mln from the Department of Energy, according to a press release Thursday. The projects operating in 21 states will seek to drive down energy emissions in the power intensive part of the economy. The industrial sector makes up one-third of all energy-related US GHG emissions and is extremely challenging to decarbonise, the release said. The chemicals sector will see nine projects receive $38 mln, iron and steel industry participants will see 10 projects get $31 mln, the cement and concrete industry will have five projects receiving $16 mln, paper and forest businesses will get six projects and $16 mln, the food and beverage sector will get three projects and $11 mln, and seven cross sector decarbonisation technologies will get $20 mln.

Green jobs legislation – The Canadian government on Thursday presented a sustainable jobs bill intended to prepare workers for a transition to a lower-carbon economy following years of consultation and opposition from Alberta, Canada’s main fossil fuel-producing province. PM Justin Trudeau’s Liberal government hopes the sustainable jobs legislation will help train workers for new roles in a future green economy, and attract billions of dollars in investment by creating a skilled clean energy workforce. It includes creating a partnership council to advise the government on job creation and supporting workers, publishing an action plan every five years and establishing a sustainable jobs secretariat to ensure coherent policies across federal departments. Once passed, the legislation will also hold future governments to account with respect to supporting Canada’s workers by putting in place structures, guidelines, and accountability mechanisms, the government said in a statement. (Reuters)

Exemption attention – The Washington Department of Ecology (ECY) on Thursday announced it will convene a Cap-and-Invest Fuel Exemptions Workgroup from mid-June to Sep. 2023. In a press release, ECY said the goal of the workgroup is to facilitate a collaborative and solution-focused dialogue to ensure that maritime, agricultural, and aviation customers are able to benefit from the fuel exemptions set in state law under Washington’s Climate Commitment Act. But despite the exemptions, operators in those sectors have complained that fuel companies are still making them pay a surcharge to cover the costs of the climate law. Some of these companies were referred to the attorney general, and two have reportedly stopped, but most continue to charge farmers extra, according to NBC’s King 5. (E&E News)

ASIA PACIFIC

Changed his mind? – Fortescue Metals Group is exploring carbon farming as a potential method for earning Australian Carbon Credit Units (ACCUs), which could be sold to offset emitters exceeding their carbon limits. This comes despite previous scepticism from executive chairman Andrew Forrest regarding the offset industry. Forrest in 2021 said some offsets were scams and companies should avoid using offsets as much as possible. He also predicted they would decline in popularity “as people realise how very unreliable they are”. Fast forward two years, and the company anticipates a potential rush to purchase ACCUs in the near future due to enforcement of the Albanese government’s safeguard mechanism policy. Fortescue is considering its commercial opportunities in light of new regulations compelling polluters to decrease emissions or invest more in offsets. Despite a goal of achieving “real zero” emissions by 2030, the company might begin generating ACCUs through partnerships around carbon farming. However, Fortescue refrained from providing detailed information about its potential plans for carbon farming or trading ACCUs. (AFR)

Count me in – Japanese shipping company K Line has participated in the GX League, a government-led decarbonisation initiative that also includes a voluntary carbon market, it announced Thursday. To date, more than 600 companies from various industries had endorsed the GX League, government data showed. K Line’s latest announcement came after it earlier this year unveiled a plan to work with Kansai Electric Power Co (KEPCO), one of the largest utilities in the country, to study marine transportation options for liquefied CO2 emitted by power plants.

VOLUNTARY

Soil, streamlined – Regrow Ag, a Resilient Agriculture Platform provider, has partnered with Australian agritech startup FarmLab to streamline soil sampling for carbon farming projects. Regrow’s customers use its MRV software to monitor nature-based agriculture projects, which help sequester atmospheric CO2 in soil and vegetation. Though Regrow’s DNDC soil carbon model can estimate the amount of carbon sequestered in soil, some projects still require soil testing. The partnership with FarmLab will simplify this process, providing an integrated, efficient, and error-free approach to soil sampling and data integration. The collaboration will support compliance with emissions accounting protocols, facilitating the piloting of regenerative agriculture projects. Currently, FarmLab operates in Australia and the USA, with plans for future expansion.

Stand and deliver – Environmentalists Stand.earth are calling on the owners of Cargill, the world’s largest food business, to implement more robust measures to prevent deforestation and nature degradation across its vast global supply chains. Representatives hand-delivered a new report to members of the Cargill-MacMillan family in Minnesota, cataloguing past human rights and environmental violations across its supply chains. These include instances of child labour on cocoa plantations on the Ivory Coast, plus deforestation in the Amazon rainforest in Brazil among at least 50 cases of deforestation in the past 20 years. Cargill has stated that the claims made in the report are “grossly mischaracterised” and that the business has “unwavering commitments” to uphold human rights and end deforestation. A spokesperson for the company stated that suppliers have previously been suspended with immediate effect for breaking Cargill’s human rights policy and/or its policy on forests. (edie)

INVESTMENT

Hydrogen investment – A subsidiary of Mitsui O.S.K. Lines (MOL), one of the world’s largest shipping companies, has made a strategic investment in a clean hydrogen-ammonia production and export facility based in Louisiana, according to a company statement released on Thursday. The facility, named Ascension Clean Energy, is expected to produce 7.2 Mt of clean hydrogen-ammonia annually with a projected investment of $7.5 bln. Other shareholders include project developer Clean Hydrogen Works (CHW), carbon solution provider Denbury, and tanker company Hafnia.

RES result – Varo Energy is set to acquire 100% of the share capital in Renewable Energy Services BV (RES), a leading biogas trading company in Europe. The move, which follows Varo’s acquisition of a significant shareholding in Bio Energy Coeverden, a major biogas facility, will bolster Varo’s position in the European market. Demand for biogas is projected to triple by 2030, with bio-LNG expected to grow tenfold in Germany by the end of the decade. Since 2013, RES has been one of Europe’s fastest growing biogas suppliers, achieving 800% year-on-year growth. The company is on track to deliver 1 TWh of biogas in 2023. The transaction is slated for completion in Q3 2023, pending regulatory approval.

AVIATION/SHIPPING

Fuelling the future – SkyNRG, a sustainable aviation fuel (SAF) supplier, has projected that global SAF production could reach 12.8 Mt by 2030 and up to 120 Mt by 2050. However, reaching these figures would require the construction of 400 new refineries in Europe and the US at a cost of $650 bln, and competition for fuel feedstocks is expected to be intense. SkyNRG’s 2023 SAF market outlook suggests that 2030 mandates in Europe are likely to be met, with an estimated 3.3 Mt of SAF in use commercially. However, 2050 mandates could necessitate over 150 SAF refineries across Europe, costing $250 bln. SkyNRG also anticipates that demand in Europe could significantly outstrip supply. In the US, SkyNRG predicts 5.8 Mt of SAF could be in commercial use by 2030, although more production will be needed. To reach a domestic SAF production capacity of 77 Mt by 2050, the US would have to deploy around 250 SAF refineries, at a cost of $400 bln. (GreenAir)

SCIENCE & TECH

2023 vs 2016 – Global temperatures have accelerated to record-setting levels this month, an ominous sign in the climate crisis ahead of a gathering El Nino that could potentially propel 2023 to become the hottest year ever recorded. Preliminary global average temperatures taken so far in June are nearly 1C (1.8F) above levels previously recorded for the same month, going back to 1979. While the month is not yet complete and may not set a new June record, climate scientists say it follows a pattern of strengthening global heating that could see this year top the previous high in 2016. Last week, the National Oceanic and Atmospheric Administration (NOAA) said El Nino conditions are now present and will “gradually strengthen” into early next year. Michael Mann, a climate scientist at the University of Pennsylvania, said human-caused warming will be exacerbated by an event that typically adds between 0.1C to 0.2C (0.18F to 0.36F) to the overall global temperature. (Guardian)

AND FINALLY…

Doomscrolling – BanklessTimes.com conducted an investigation into the carbon footprint of various social media platforms, discovering that even passive actions like scrolling, liking, and sharing can have significant carbon emissions. The study found that TikTok users generate the most CO2 per day (84.16g), followed by Reddit (58.53g), Instagram (30.45g), Snapchat (26.97g), Facebook (26.07g), Twitter (18.60g), Pinterest (18.46g), and YouTube (8.74g). To provide a sense of scale, a lifetime of Facebook scrolling emits as much CO2 as a return flight from London to Stockholm, while TikTok usage equates to a journey from London to Stockholm and then to Puerto Rico.

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