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TOP STORY
PREVIEW: Paris summit hopes to secure fresh commitments to reshape global finance agenda
France will host an international summit later this week aiming to forge consensus on how to reshape the finance agenda, discussing the easing of debt burdens, new international taxes, and how best to channel greater flows to developing economies to speed the energy transition and help them to deal with the impacts of climate change.
AMERICAS
Experts defend structure of Washington carbon allowance reserve sales, but target improvements
Washington state’s decision to only offer a fraction of its Allowance Price Containment Reserve (APCR) allowances at the mechanism’s first sale in August will help maintain environmental integrity and provide compliance assurance in the cap-and-trade scheme, though an alternative process could better achieve these outcomes, experts told Carbon Pulse.
California should re-engage on carbon market leadership when considering linkage, watchdog says
California should take a larger role in engaging climate cooperation with subnational jurisdictions when it considers expanding agreements with its WCI-linked cap-and-trade programme, the state’s carbon market watchdog said Tuesday.
RGGI Market: Lack of momentum leads to quiet week for RGAs
RGGI Allowance (RGA) values languished through a narrow range as a lack of momentum pervaded the Northeast US power sector carbon market over the last five days.
Brazilian industry group proposes plan for national cap-and-trade programme
A business group representing Brazil’s industrial sector presented a plan to the federal government on Tuesday for implementing a national cap-and-trade programme that could add 5% to the country’s GDP, as President Luiz Inacio Lula da Silva’s administration reportedly is getting closer to introducing its own proposal for a regulated carbon market.
US commodities regulator seeks tips on carbon market misconduct
The US Commodity Futures Trading Commission (CFTC) on Tuesday issued an alert to inform the public on how to report instances of fraud and manipulation in carbon markets, as the regulator asserts its authority to oversee the spot credits that inform environmental futures contracts.
VOLUNTARY
UAE, Saudi firms sign deal to restore at least 5k hectares of mangroves in Kingdom
A UAE-based mangrove reforestation firm has announced a strategic partnership with a Saudi company to restore at least 5,000 hectares of mangrove forests in Saudi Arabia over the next three years.
Voluntary carbon firms forge ties to de-risk investments for both sellers and buyers
Voluntary carbon market actors are teaming up to help de-risk investments, with two firms developing jurisdictional-level policy risk assessments for carbon credit buyers while two more work on getting early-stage project development to be comprehensive enough to insure.
Former boss of voluntary carbon firm retakes reins as new CEO quits after 3 weeks
The former boss of a Canadian-based voluntary carbon credit aggregator has been reappointed as the company’s head after the new president and CEO stepped down just three weeks into the job.
Italian oil and gas giant Eni defends baseline of Zambian REDD project
Eni has dismissed concerns of overcrediting at a REDD avoided deforestation project in Zambia in a robust response to an investigation by Italy’s publicly-owned television broadcaster.
Gucci makes fashion faux pas about carbon neutrality claim
Gucci has dropped its claim of becoming ‘entirely carbon neutral’ on its website alongside its policy of buying voluntary carbon credits amid a backlash against misleading environmental claims.
Blockchain-based marketplace launches for CCUS carbon credits
A US-based company on Tuesday announced a new blockchain-based marketplace for credits sourced from carbon capture, utilisation, and storage (CCUS) technology.
Global tennis tour launches app to enable players to track and offset travel emissions
The global tennis tour organisation, ATP, has launched an app which will allow professionals to track and then offset their travel emissions by purchasing carbon credits.
EMEA
Ukraine minister doubles down on 2035 coal phaseout ahead of recovery conference
Ukraine’s deputy minister for energy has underlined that the country will keep its commitment to phase out coal by 2035 and can become a European clean energy hub in spite of the war raging within its borders, speaking at a side event ahead of the Ukraine Recovery Conference in London this week.
EU-wide new clean technology fund idea ditched due to budget pressures
The European Commission has abandoned the idea of creating a new EU Sovereignty Fund in favour of setting up a platform to support the bloc’s leadership on critical technologies using only existing cash sources, the executive body announced on Tuesday.
Euro Markets: EUAs hit two-month high ahead of options expiry, COT as natural gas surges again
European carbon climbed to a two-month high on Tuesday as traders began to focus on Wednesday’s June options contract expiry as well as the weekly exchange positions data, while the market also drew support from renewed strength in natural gas.
Germany’s EEX to acquire Nasdaq’s European power, carbon trading businesses
German-headquartered European Energy Exchange (EEX) is set to acquire Nasdaq’s European power trading and clearing business, which includes EU emissions trading operations, the companies announced Tuesday.
European new vehicle CO2 emissions drop for third year as EV registrations surge
Average CO2 emissions of new cars and vans in Europe dropped for a third consecutive year in 2022, according to provisional data published Tuesday, with pure EVs or hybrids representing nearly one in four car registrations.
INTERNATIONAL
Multilateral development banks roll out Paris-aligned methodological principles
The world’s ten major multilateral development banks (MDBs) have published a set of joint methodological principles to ensure the alignment of their new operations and financial flows with the mitigation and adaptation goals of the Paris Agreement.
China softens rhetoric on CBAM, though next step remains uncertain -analysts
China appeared to strike a milder tone regarding its opposition to the EU’s carbon border adjustment mechanism (CBAM) at this month’s WTO talks, though the country’s next step against the planned carbon border measure remains unclear, according to analysts.
ASIA PACIFIC
Australia Market Roundup: Half of over 1 mln ACCUs issued go to HIR projects, as electricity boss calls for more renewables investment
The Clean Energy Regulator has issued some 1.1 million Australian Carbon Credit Units (ACCUs), the largest single issuance in 2023 thus far and with human-induced regeneration (HIR) projects back among recipients, as the head of Australia’s energy market warned the country is not investing in renewables fast enough in line with its climate goals
BIODIVERSITY (FREE TO READ)
EU ministers agree united position on controversial nature restoration law
EU environment ministers reached an agreement on Tuesday on the proposal for a nature restoration law, moving ahead of the divided European Parliament in the bloc’s parallel lawmaking process.
Australian govt’s nature repair market bill in doubt after Coalition reverses its support
Australia’s world-first nature repair market legislation is in jeopardy following the opposition Coalition’s decision to withdraw its support.
COMMENT
Four key considerations for businesses buying carbon credits
Businesses are increasingly aiming to incorporate Natural Climate Solutions (NCS) into their climate plans to fulfil their climate and nature commitments. Jennicca Gordon of the Natural Climate Solutions Alliance outlines how they can ensure the integrity of the credits they purchase and communicate their efforts effectively.
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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
LNG locked in – China has agreed another decades-long LNG deal with Qatar in a further move to safeguard its energy security, Bloomberg reports. China National Petroleum Corp. signed a 27-year LNG purchase agreement for 4 Mt annually with QatarEnergy on Tuesday. Supply will begin in 2026 and CNPC will take a 5% equity stake in a production train at Qatar’s North Field East expansion project, the country’s energy minister and boss of QatarEnergy Saad al-Kaabi said at a signing ceremony in Doha. CNPC is looking to strengthen energy cooperation with Qatar during Chairman Dai Houliang’s visit to the Middle East this week. China is on track to be the world’s largest LNG importer this year, with Shell Plc saying the nation’s demand could nearly double through 2040. The new LNG deal — one of the industry’s longest-ever supply pacts — delivers advantages for both nations. China needs to secure fuel at an affordable rate to meet rising energy demand, while Qatar needs buyers for the gas from a massive expansion scheduled to come online in the middle of this decade.
EMEA
Culture wars – The EU landmark green deal is at risk of being dragged into “culture wars,” said the bloc’s climate chief Frans Timmermans as he warned that plans to reach net-zero by the middle of the century risk being paralysed by political division, Bloomberg reports. His comments come as the bloc faces stiff pushback by groups in parliament and member states to a set of policies designed to slash emissions by 55% this decade. Culture wars, which signify a clash of social values between different ends of the political spectrum, are increasingly on display in Europe’s political debate and seeping into policy making.
Three’s a crowd – Increased cooperation in the field of green hydrogen was among the main topics during Netherlands Prime Minister Rutte’s visit to Namibia on Monday, Euractiv reports. The visit, with Danish Prime Minister Mette Frederiksen, saw a discussion of investments into strategic infrastructure in Namibia with its government to produce and export green hydrogen and ammonia, zinc, phosphate, or manganese towards Europe. The infrastructure would primarily be located along Namibia’s coastline. The talks followed on from a $10 bln government-backed project which, once completed, is set to export green hydrogen to Europe.
Transit challenges – Low water levels in the Rhine river as a consequence of ongoing droughts in various German regions threaten to hurt the country’s economy, economists at Deutsche Bank Research warned in an article published by Spiegel, as translated by Clean Energy Wire. The Rhine is Germany’s most important shipping route for raw materials including coal for power plants, and low water levels could mean that large container ships have to significantly reduce their cargo – in some cases by half – to continue to be able to navigate the waters. If the levels over the course of the year turn out to be similarly low as in 2018 or 2022, this would have a negative impact on the economic recovery, Marc Schattenberg of Deutsche Bank Research told Spiegel.
Back on the menu – The UK government is planning to remove a ban on opening new coal mines from a bill that is going through the parliament, the BBC reports. Representatives also plan to drop changes to the bill which would have enabled small community energy projects to sell electricity directly to local homes. Green representative Caroline Lucas called the decision “reckless” and said the amendments should be reinstated “immediately”. A government spokesperson said it was made after “careful consideration” and they would continue to engage with parliamentarians.
Missing funds – The Malawi Treasury has not been remitting MK3.5 bln ($4.3 mln) of carbon levy funds to the Ministry of Natural Resources and Climate Change for environmental conservation programmes, four years after the tax was introduced, Zodiak Malawi reports. Treasury spokesperson Taurai Banda confirmed to the outlet that the funds have been deposited into a consolidated government account for national budget use. Malawi’s carbon levy was instituted in 2019, collected from motorists. The tax, ranging from MK4,000.00 to MK15,000.00 ($5-18) depending on vehicle cylinder capacity, was later incorporated into the fuel price to ensure all buyers contribute. However, no detailed information has been provided about tax collection and fund management. The Treasury transferred only MK500 mln to the Ministry of Natural Resources and Climate Change, which reportedly hasn’t yet been utilised. The Ministry has now developed guidelines for the Climate Finance Management Fund’s use, with 70% going to community-based projects and 30% for office operations. Stakeholders, including the Parliamentary Committee on Natural Resources, have criticised the misdirection of funds. Committee Chairperson Welani Chilenga accused the Ministry of Finance of lacking seriousness in funding environmental conservation. The Consumers Association of Malawi (CAMA) and Civil Society Network on Climate Change (CISONECC) also expressed disappointment and concerns over lack of accountability.
AMERICAS
Off track emitting – The Canada Energy Regulator (CER) warned on Tuesday that the country will miss its 2050 net zero goal if it fails to further emissions reduction measures. Even with the federal carbon price, the upcoming Clean Energy Regulations, the upcoming Clean Fuel Standard, and the planed oil and gas emissions cap, its still possible Canada could miss its target. To reach net zero by 2050, oil production would have to peak between 2026 and 2029, depending on how much the rest of the world had decarbonised. Demand for electricity would double by 2050 in a net zero Canada, largely met by a supply of wind power. (Reuters)
Regulation reclamation – A US EPA regulation on hydrofluorocarbons (HFCs) was largely left in place, though partially limited, by a split decision at a federal appeals court on Tuesday. The federal agency can regulate HFC blends, a mix of other chemicals, and Congress properly gave legislative power to the EPA in regulating HFCs, the court found. However, the agency cannot force companies to use refillable containers, nor can it create a nationwide tracking system, the decision read. Choice Refrigerants, Worthington Industries, and other trade associations took the EPA to court over its regulation of HFCs. (Courthouse News Service)
ASIA PACIFIC
Trion a-go — Woodside Energy Group has approved the development of the $7.2 bln Trio ultra deepwater oil project in the Gulf of Mexico, its first major investment since its merger with BHP Group’s petroleum arm last year, Reuters reports. Woodside, 60% owner and operator of Trion, forecast its share of the capital expenditure at $4.8 billion. The remainder is set to be funded by Mexican state-owned oil company Pemex, which owns the remaining share. The project will have an oil production capacity of 100,000 barrels per day, with first production targeted for 2028. Activist-investor group Market Forces said Woodside’s investment was a bet against the climate goals of the Paris Agreement.
Fuel salt collaboration – KEPCO Nuclear Fuel (KNF), a subsidiary of South Korea’s state-run power utility KEPCO, has announced a collaboration with GS Engineering & Construction and Seaborg to investigate the feasibility of developing a LEU fuel salt production facility in the East Asian country, according to a company statement released earlier this week. KNF could bring extensive nuclear fuel production and fluoride handling knowledge, while GS E&C have broad experience in a variety of engineering and construction projects. Denmark-headquartered Seaborg is engaged with a number of research partners covering different aspects of fuel salt, the statement said.
At the cost of health – Air pollution from coal plants in South Korea has led to around $ 10 bln in healthcare and welfare expenditures between 2021 and 2022, resulting in nearly 1,970 deaths, according to research conducted by non-profit Solutions for Our Climate and the Centre for Research on Energy and Clean Air (CREA). Of the total cost, around $1.1 bln can be attributed to the coal investments from national pension fund NPS, the world’s third-largest retirement fund and the country’s biggest coal financier, even though the fund pledged to exit coal two years ago. Due to the lagging energy transition, South Korea is projected to have the third-biggest coal capacity among OECD nations in 2030.
VOLUNTARY
One step beyond – The Science Based Targets initiative (SBTi) corporate climate action template body has launched a six-week public consultation on beyond value chain mitigation (BVCM) to help inform its upcoming guidance. The SBTi’s corporate net zero standard has long stated that companies are required to set targets for near- and long-term value chain emissions reductions but only encouraged to do BVCM, to the dismay of some project developers hoping that the body could stimulate carbon credit demand by incorporating credit purchases within the net zero framework. BVCM action has begun to take shape, though in a limited form.
Planting party – Nestle Malaysia said it has made significant progress in its Project RELeaf reforestation programme, planting the first million trees towards its 3 mln tree goal. The company also recently formalised its partnership with TDM Plantation (TDMP), which has pledged to contribute 514 hectares of land to aid Nestle Malaysia in planting an additional 350,000 trees. The initiative is part of Nestle’s Forest Positive strategy to combat climate change and lower carbon emissions. The partnership is expected to help achieve 700,000 tonnes of carbon removal over the next decade. The company is also collaborating with Sime Darby Plantation Berhad (SDP) and has already planted over 420,000 trees in SDP’s operation areas. A recent nationwide tree planting event involved Nestle Cares volunteers and associates from TDMP and SDP, resulting in 7,000 additional trees being planted.
Shield of the Phoenix – Denver-based Carbon Shield has acquired Phoenix Abandonment, an independent petroleum engineering consulting firm that specialises in wellbore and facility abandonment services. The joint entity aims to offer a range of services including plug and abandonment engineering, innovative GHG reduction projects, and the development of high-quality carbon offset markets. The company will utilise its experience in well abandonment to enhance methane reduction at a large scale in an industry that can significantly contribute to global decarbonisation goals. Carbon Shield will assist operators and states with asset retirement obligations and will help governments, communities, and various stakeholders accelerate their fugitive methane reduction goals. It will also continue to provide Phoenix’s traditional services to its existing customers.
INVESTMENT
EX funding – TDK Ventures, the corporate venture capital arm of TDK Corporation, has launched a new $150 mln fund called Fund EX1, aiming to invest in clean-tech startups in Europe and North America at the seed and series A stages. The company has also chosen London for its first European office, citing the city’s strong venture capital presence and focus on environmentally conscious startups. TDK Ventures was established in 2019 as a subsidiary of Japanese electronics firm TDK Corporation and invests in startups in areas such as materials science and energy that it believes are under-represented in venture capital portfolios. (Citywire)
AND FINALLY…
It’s the end of the world as we know it – The Post Carbon Institute has released a white paper addressing the intersectional ‘polycrisis’ of societal and environmental collapse. The paper argues that this calamity, referred to as the “Great Unraveling”, signifies a period where multiple impacts are undermining the social and environmental systems that underpin modern civilisation. The paper is targeted at the general public, academics, NGOs, investors, and media, with the goal of helping them understand the bleak concept, its implications for society and ecosystems, and how we can respond. The paper draws attention to four main areas: the distressing swift shifts in environmental and social conditions; the necessity to navigate complexity, uncertainty, and conflicting priorities; the need to maintain social unity and peaceful international relations while managing the negative effects of past inaction; and the personal skills needed to comprehend the unfolding situation and respond effectively, primarily by enhancing household and community resilience.
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