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TOP STORIES

New Zealand weighs splitting ETS in two as part of far-reaching market reforms

Creating separate markets for emissions reductions and carbon removals is one of several drastic options considered by the NZ government, as it on Monday launched two brand new consultation processes to mend its stuttering emissions trading scheme.

NZU price plummets following ETS consultation release as fatigue, election uncertainty set in

Policy observers and market participants have welcomed some of the policy options raised by the New Zealand government’s proposed overhaul of the ETS, but say it will do little to allay the uncertainty in the market ahead of the national election.

EMEA

Swiss voters approve 2050 net zero climate law

Swiss citizens on Sunday approved the introduction of a climate law to reach net zero emissions by 2050, two years after rejecting a more detailed implementation bill on cost concerns.

EU nations fail to agree power market reforms after coal subsidy clash

The EU’s 27 national energy ministers failed to agree a unified stance on the bloc’s electricity market reform proposal on Monday as several nations refused to extend subsidies to coal power plants due to climate concerns.

Electricity lobby calls on the EU to set “realistic” 2040 climate targets

The EU climate targets for 2040 must be ambitious but realistic, according to the bloc’s power market association Eurelectric, which advocated a goal less ambitious than those of the bloc’s climate science advisors.

Euro Markets: Carbon tests technical support, erases early losses amid late gas recovery

European carbon prices erased early losses on Monday to end the day with a modest fall, as prices rebounded in line with a strong recovery in natural gas after early declines, with EUAs also finding some technical support despite worsening fundamental data.

Munich Re launches EU carbon institutional investment product

Reinsurance giant Munich Re is offering a new institutional investment product based on the EU carbon market.

ASIA PACIFIC

China releases draft regulations to drive emissions cuts for cement

China’s environment ministry has published a set of draft policy regulations for the ‘ultra-low carbon’ transformation of the domestic cement industry, signalling the government’s tighter control over one of its biggest-emitting sectors that is also set to be included in the national carbon market.

Steel producer joins Japan-Malaysia CCS initiative

A major steel producer has joined an ongoing partnership focused on developing a Japan-Malaysia CCS value chain implemented under Japan’s Asia Energy Transition Initiative (AETI).

Australia should ban new gas connections, set phase out dates to meet climate goals, report says

A government-imposed ban on new connections and setting a hard phase-out date should be the first step in Australia’s journey to weaning itself off natural gas, or risk failing to meet its climate goals, a report has warned.

VOLUNTARY

VCM Report: REDD prices tick higher, while higher values heard for specific nature-based removal projects

REDD+ avoided deforestation prices continued to tick higher over the past week, but the avoidance credit market was a mixed bag of slight falls and gains as the overhang of available credits continued to grow, although nature-based removals commanded high prices.

Voluntary carbon market to treat CCP credits as a “minimum bar”, says exchange boss

The voluntary carbon market will consider credits tagged as aligning with the core carbon principles (CCPs) as a “minimum bar” on which to build, according to the CEO of an exchange.

Vitol-Nigeria JV signs credit offtake deal with Saudi voluntary carbon firm

Carbon Vista, a joint venture between the Nigeria Sovereign Investment Authority (NSIA) and energy and commodity trader Vitol, has signed deal with Saudi Arabia’s Regional Voluntary Carbon Market Company (RVCMC) to channel climate finance into Nigeria.

Singapore-based blockchain infrastructure provider launches carbon, REC exchange

InterOpera, a blockchain infrastructure provider backed by Vertex Ventures, Kakao Investments, and Korea Investment Partners, has launched a carbon credit and renewable energy certificate exchange platform.

Fintech companies link services to boost access to tokenised carbon credits

Two digital fintech companies are collaborating on an integrated solution for banks and corporates to track and account for the carbon footprint of their digital assets and any aspect of their value chain, they announced Monday.

UAE state oil firm to set up carbon credit desk -media

Adnoc, the state-owned oil company of the UAE, is to set up a desk to trade carbon credits, people familiar with the matter told Bloomberg.

AMERICAS

US forest data could become widely available under new bill

A bill to make the US Forest Service’s forest inventory analysis programme (FIA) easily accessible to the public was introduced to both houses of Congress by a bipartisan team of representatives and senators over the past month.

BIODIVERSITY (FREE TO READ)

INTERVIEW: In biodiversity, more private finance must mean more state oversight

The ecological success of the voluntary biodiversity credit market will be almost entirely determined by the quality of the governance mechanisms and the measurement methods used, according to a leading biodiversity finance researcher.

COMMENT

Human rights due diligence and the role of carbon offsetting

The problem with carbon offsetting as a means for companies to bear responsibility for their emissions is not the concept itself, but its current implementation. Rather than limiting the use of carbon offsetting by banning terms like “carbon neutral”, policymakers should drive forward reforms to improve the quality of the carbon market, writes Lasse Leipola of Finnwatch.

ICYM

Policymakers agree to slash capital requirements for EU carbon trading, decline to extend treatment to voluntary market

EU institutions have provisionally agreed to lower the perceived level of financial risk associated with EU Allowances, reducing the capital requirements banks need to hold when trading these units but declining to extend the same treatment to voluntary carbon credits.

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Carbon Pulse is hiring!

• North American Environmental Markets Correspondent, Carbon Pulse – Eastern Time Zone
• North American Environmental Markets Correspondent, Carbon Pulse – Pacific Time Zone

Job listings this week

• *Director, Africa Carbon Markets Initiative (ACMI), Global Energy Alliance for People and Planet (GEAPP) – Nairobi
• *Sales Trader, Voluntary Carbon Markets, AFS Energy – Amsterdam
• *Associate Director, Sustainable Commodities Production, WCS – Remote (NYC preferred)
• *Senior Manager, Climate Policy and Strategy, International Climate Policy, Verra – Remote (Worldwide)
• *Senior Program Officer/Program Officer, Climate Policy and Strategy, International Climate Policy, Verra – Remote (Worldwide)
• *Chief Financial Officer (CFO), Carbon Credits, CL-Invest – Oslo
• Business Development Manager Carbon and Biofuels Sales, Origin – Melbourne
• Originator, Power, Environment, and Carbon, AGL – Melbourne
• Deputy Head (Principal) Carbon Pricing Unit, Program Lead Mobilizing Article 6 Trading Structures (MATS) Program, GGGI – Seoul
• Communications Associate, Voluntary Carbon Markets Integrity Initiative (VCMI) – Flexible Location
• Senior Cap-and-Invest Market Monitor (Financial Examiner 4, In-Training), Washington Dept. of Ecology – Lacey

*Premium listings

Or click here to see all listings

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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

Oil backs oil – In a letter to the FT, BP CEO Bernard Looney has come out in defence of COP28 boss Sultan Al-Jaber. The president of the next UN climate summit to be held in Dubai this year, has faced heavy criticism for his suitability to the role, and will remain as UAE state oil chief at the same time as the event. Looney cited the country’s plans to invest in clean energy and Al-Jaber’s leadership credentials, urging the world to give the COP head the chance to make progress.

Hypocrisy – US and European efforts to subsidise domestic renewable energy industries are tantamount to western “protectionism” and will hold back developing countries’ climate ambitions, India’s power minister has warned, as the FT reports. Raj Kumar Singh, India’s minister for power and renewable energy, said measures such as the US Inflation Reduction Act and Europe’s green hydrogen auctions, which both offer heavy subsidies to renewable industries, would undermine budding clean energy production in emerging economies such as India.

Grace period – South Korean steelmakers have asked their government to negotiate with the EU for an extension of the period during which domestic methods for calculating carbon emissions can be used. This is in response to the EU’s new Carbon Border Adjustment Mechanism (CBAM), which will be fully implemented by 2026. During a transitional phase starting in Oct. 2023, non-EU operators can use their own calculation methods until 2024. The South Korean steel industry has expressed concerns about the potential impacts of CBAM on competitiveness and costs, as South Korea is a significant exporter of steel to Europe. The South Korean government aims to aid steelmakers in transitioning to low-emission production, with plans to replace coal-fuelled blast furnaces with hydrogen-powered ones. (Yonhap)

EMEA

Green Marshall – Ukraine is seeking up to $40 bln to fund the initial stage of a “Green Marshall Plan” aimed at rebuilding its economy, including the creation of a coal-free steel industry. This announcement comes before an international summit co-hosted by Ukraine and Britain, where short-term funding issues and long-term reconstruction efforts will be discussed. The World Bank estimates that Ukraine’s reconstruction will cost more than $400 bln, over three times its GDP. The plan will focus initially on the iron and steel industry, which accounted for around 10% of Ukrainian GDP and a third of export revenues in 2021. The industry also made up 15% of the country’s carbon emissions, and the plan intends to rebuild this sector using renewable energy. The ultimate goal is to turn Ukraine into the world’s cheapest supplier of green steel, aiding Europe’s decarbonisation efforts. Officials from over 60 countries and top global multilateral institutions such as the World Bank, EIB, and EBRD are expected to attend the conference. Ukraine’s funding plan includes finance from export credit agencies, the Ukrainian Development Fund, EU transition funding, and private sector loans. The potential use of $300 bln of frozen Russian central bank reserves is also on the discussion agenda. (Reuters)

Clean superpower – Britain’s main opposition Labour Party has pledged to turn the country into a clean energy superpower by 2030, saying it would overturn a ban on new onshore wind farms while respecting any oil and gas licences granted before the next election, Reuters reports. Labour, which opinion polls suggest is on course to win a national election expected next year, has tried to position itself as the only party which can spur economic growth by investing heavily in green technologies and jobs with plans to rival similar investments in the US and the EU. However, earlier this month it pared back its flagship pledge to spend £28 bln every year until the end of the decade on building up green industries, blaming high interest rates. On Monday, Labour leader Keir Starmer set out pledges for 100% clean and affordable power by 2030; to establish a publicly-owned energy company, GB Energy; to create a National Wealth Fund to invest in green technologies; and to upgrade poorly insulated homes. The party would also overturn the ban on new onshore wind farms which Labour says has added £5.1 bln to energy bills, or £182 per household, because Britain has been forced to turn to more expensive power.

State aid – An amendment to an Estonian scheme will support electricity production from renewable energy sources, as per the European Commission’s approval announced on Monday. Renewables and efficient cogeneration installations benefitting from the scheme receive support in the form of a fixed feed-in premium to the market price. The premium on top of the market price is set at €53.7/MWh for electricity produced from renewables, including electricity produced in combined heat and power systems using renewables, and €32/MWh for electricity produced in highly efficient combined heat and power systems using natural gas, retort gas, peat and municipal waste. Estonia notified the Commission of its intention to amend the scheme, by increasing its  budget by €650 mln, bringing the total budget to €1.37 bln (from €720 mln).

Green take off –  Hydrogen and electric aircraft will enter commercial use during this decade, according to a report presented by the Alliance for Zero Emission Aviation (AZEA) on Monday. The AZEA showcased progress in preparing for hydrogen and electric aircraft, and called on the EU to  establish an appropriate regulatory framework, during its second general assembly in Le Bourget, France. The report also describes the analysis carried out by the AZEA working groups over the past six months and the next steps for the Alliance. The EU executive, represented by European Commissioner for the Internal Market Thierry Breton, who attended the event, said it supports the objective of preparing the entry into service of hydrogen and electric aircraft.

ASIA PACIFIC

Stepping up — A new South Australia bill show’s the state’s EPA is about to play a much larger role in tackling climate change, a policy advisor has observed. The Environment Protection (Objects of ACT and Board Attributes) Amendment Bill inserts references to climate change mitigation and adaptation into the objects of the state’s Environment Protection Act, and adds a reference to requiring polluters to limit the risk of environmental harm “in relation to a changing climate”, Murray Griffin, head of policy advisory Earthed wrote in a LinkedIn post. That’s important partly because the EPA must consider the objects of the Act when considering development applications, and applications for licences, he wrote. Currently the state’s Environment Protection Act does not mention climate change, meaning the effect of the bill would ensure the agency would play a larger role in tackling climate change. The state Labor government has also asked the Premier’s Climate Change Council to review the state’s GHG emissions reduction laws to ensure there is an adequate strategy in place for the state to meet its 2030 and 2050 emission reduction targets.

Seeking partners – India is in talks with South Africa, Taiwan, and several developing nations to contest the Carbon Border Adjustment Mechanism (CBAM) at the World Trade Organization (WTO), Mint reports, citing an unnamed government official. In addition to seeking a postponement of CBAM until there is clarity on its compliance with the WTO rules, the country is also hoping to get some extra transition periods for its micro, small, and medium enterprises (MSMEs), according to the report. The EU’S carbon tax is estimated to impact Indian exports valued at over $8 bln annually starting in 2026.

AMERICAS

More like re-billion-ce – US President Joe Biden on Monday announced that his administration will invest over $2.6 billion to combat climate change and enhance community resilience. The funding includes nearly $600 mln for climate resilience via the National Oceanic and Atmospheric Administration’s “Climate Resilience Regional Challenge”. The investment was revealed during Biden’s visit to California. The Department of Defense will also invest more than $2 billion to modernise the national electric grid. Biden also announced a White House summit focusing on climate resilience, involving local, state, tribal, and territorial leaders.

LNG mitigation – A Canadian natural gas coalition Energy for a Secure Future (ESF) released a report on Monday asking the federal government for emission credits through the Paris Agreement Article 6.2 mechanism for liquid natural gas (LNG) exports which displace higher emitting energy sources in international markets such as India and China that still rely on coal, the Globe and Mail reported Monday. Switzerland had announced similar bilateral deals involving internationally transferred mitigation outcomes with Ghana and Vanuatu last November. Canada’s federal government has said it held Article 6 talks with a couple of Canada’s allies who are prospective LNG buyers, but claims the issue of carbon credits is complex and time-consuming. Five proposals for LNG exports via tankers remain active in BC, including potential expansions at LNG Canada in Kitimat, FortisBC’s Tilbury LNG domestic plant in Delta, Cedar LNG, Ksi Lisims LNG on BC’s north coast, and Woodfibre LNG near Squamish that could together potentially generate $10.2 bln in annual GDP if built according to the ESF report. Think tank The Pembina Institute and non-profit David Suzuki Foundation have criticised Canada’s focus on LNG in separate studies published in May.

Growing network – Canadian commodity distributor Targray announced opening a new biodiesel terminal in Meade, Washington on Monday in a press release. The new site looks to supply biodiesel fuel mandated under the US renewable fuels blending requirements since 2006. The company has a network of biodiesel distribution terminals located in California, Oregon, Washington, and the Upper Midwest.

VOLUNTARY

New joiner – Agence Francaise de Developpement (AFD), which carries out more than 4,800 projects in France’s overseas departments and territories and another 150 countries, has joined the International Partnership for Blue Carbon (IPBC), a global network of governments and organisations committed to conserving coastal ecosystems, IPBC announced on LinkedIn. AFD currently supports 15 blue carbon projects across the world and will play a key role in supporting France’s commitment to the IPBC, according to the LinkedIn post.

Blue carbon research – A study taking stock of the CO2 stored in Singapore’s coastal and marine ecosystems, and another on building coral reef resilience are the first projects to be awarded grants under a $25 million marine climate research programme, Strait Times reports. These research projects “will enhance our capacity to safeguard critical marine habitats, and to tap nature-based solutions to adapt to climate change”, said National Development Minister Desmond Lee.

SCIENCE & TECH

Green dream – A new study published in Communications Earth & Environment suggests that seaweed cultivation may not be a viable solution for capturing between 2.5 and 13 billion tonnes of carbon from the atmosphere per year, the range considered necessary to mitigate climate change. The researchers used a dynamic seaweed growth model considering factors like nitrate supply to estimate the global potential yield of four types of seaweed under different scenarios of nutrient availability and ocean conditions. The findings indicate that to harvest 1 bln tonnes per year of seaweed carbon, over 1 million spare km of the most productive waters in the equatorial Pacific would need to be farmed. The cultivation area would have to triple beyond these waters for the same yield. Techniques like “depth cycling” or upswelling nutrients from deeper waters can help maintain productivity. The researchers conclude that future research must understand the global variation in seaweed growth potential to accurately assess the carbon removal capability of seaweed cultivation. (Carbon Herald)

AVIATION

Back to the drawing board – The development of the all-electric passenger aircraft P-Volt for domestic routes in Norway has been paused after Italian developer Tecnam concluded that short battery life would make the project commercially unfeasible. The plane, developed in partnership with Rolls-Royce and Norwegian operator Wideroe, had been under study for three years. The research found that operators would need to replace the entire battery storage unit after only a few hundred flights, leading to increased operating costs. Despite this setback, Tecnam remains open to resuming the project when technology advancement allows. Norway aims to have electrified aircraft in domestic scheduled flights by 2030 and to reduce emissions from domestic flights by 80% by 2040. (GreenAir)

Total SAF – TotalEnergies has announced plans to produce 500,000 tonnes of sustainable aviation fuel (SAF) from its French facilities by 2028, which will increase to 1.5 Mt globally per year by 2030, accounting for around 10% of global SAF demand. The Grandpuits site near Paris is expected to generate 210,000 tonnes per year of SAF by 2025, and an additional 75,000 tonnes per year by 2027. Further production is anticipated from the Gonfreville site and the La Mede biorefinery.

INVESTMENT

Up for grabs — Food and beverage corporation PepsiCo has selected 10 APAC-based startup finalists for its inaugural sustainability accelerator programme, including climate techs that aim to help reduce emissions from industrial sectors. The finalists for the Greenhouse Accelerator APAC Sustainability Edition include New Zealand-based Aspiring Materials, which plans to shift the packaging, construction, and agriculture industries to use carbon-free rocks to supply products that can offset or directly capture industrial or atmospheric carbon, according to PepsiCo’s statement released Monday. Shenzhen-based Powered Carbon, a company that has expertise in biotechnology and electrochemistry, was also selected as one of the finalists. The company provides innovative CCUS solutions that can transfer CO2 into different types of chemicals, such as formic acid, acetic acid, polyhydroxy fatty acid, amino acid derivatives and alternative proteins. The selected startups for the accelerator programme will receive support, including $20,000 in grants during the four-month business optimisation programme designed to accelerate their growth, PepsiCo said. At the end of the programme, one startup will be eventually awarded an additional $100,000 and the opportunity to continue partnering with PepsiCo on future projects.

AND FINALLY…

Climate Memorial Day – EU The European Parliament has voted to establish an annual ‘EU day for the victims of the global climate crises’, to be held on July 15 starting this year. The day aims to commemorate those who have lost their lives due to climate change and to raise awareness of the humanitarian crises it is causing. The resolution, which gained 395 votes in favour, 109 against, and 31 abstentions, invites the European Council and the Commission to back the initiative. MEPs highlight that climate change leads to unpredictable weather phenomena, threats to food and water safety, and the emergence and spread of infectious diseases. This comes after the adoption of the European Climate Law, which mandates the EU to become climate neutral by 2050 and reduce net GHG emissions by at least 55% in 2030.

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