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TOP STORY

ANALYSIS: UK sends “very strong signal” on removals in ETS reform paper

The UK has set down a very significant marker for the inclusion of removals in its compliance carbon market and one that starkly differs from the EU position, experts have told Carbon Pulse, though integration is unlikely to be rushed.

EMEA

Germany agrees to resume domestic ETS price hike in 2024 after one-year pause -media

Germany’s has agreed to increase its domestic carbon price for buildings and transport from the start of 2024, going back on earlier plans to maintain a lower price after energy costs spiralled in the wake of Russian’s invasion of Ukraine last year, according to media reports.

Euro Markets: EUAs drop below technical level as UKAs give up last of Monday’s reform-inspired gains

EUA prices extended their losses for a third day amid low-key trading, falling below a key technical level as numerous participants headed to an industry conference, while UKAs gave up the last of Monday’s 8.2% jump as the market reaction to news of UK ETS reforms turned bearish, and energy markets fell as renewables output was forecast to rise.

INTERNATIONAL

UN insurers’ climate group ditches requirement to set GHG targets

A UN-convened climate alliance for insurance companies on Wednesday dropped a requirement for its members to set GHG reduction goals after Republican politicians in the US lobbed anti-trust allegations at the initiative.

Policymakers significantly undercounting CO2 emissions from global wood harvesting, researchers say

Scientific papers and public policies are not typically counting the substantial contribution of wood harvesting to global carbon emissions, with GHG output set to take off even further through 2050 as timber demand grows, researchers said Wednesday.

VOLUNTARY

New tool launched to create standardised reports of carbon credit projects at any stage of development

A new tool is about to be launched to formalise best practice in the voluntary carbon market by enabling project developers to report on the governance, financial, and sustainable performance of projects and climate change mitigation programs in a standardised way.

Tech company seeks to become alternative standard for digital carbon market

A technology company is seeking to break the malaise in the digital carbon market (DCM) following last year’s banning of tokenising voluntary credits from mainstream standard bodies by becoming the blockchain standard for the market.

Carbon management firm to sell Canadian biochar credits, as ArcelorMittal invests in biocarbon company

A Germany-based carbon credit intermediary will sell credits from Canada’s first industrial-scale biochar facility on the voluntary market, while steelmaker ArcelorMittal announced plans to purchase biocarbon from another plans in the country.

Methane credit developer inks pre-purchase agreement with global commodity trader

A US-headquartered carbon credit developer on Wednesday announced it has pre-sold units stemming from plugging orphaned oil and gas wells to an international energy and commodity trading firm.

ASIA PACIFIC

Australia’s Safeguard Mechanism is in play, but below baseline credits won’t be issued for some time

Australia’s reformed Safeguard Mechanism has come into force this week, but those expecting facilities to begin generating below baseline credits straight away will be left waiting.

Japanese energy exchange operator begins listing of environmental credits

The operator of Japan’s largest energy trading marketplace has become the latest in the country to initiate trading of environmental credits, including offsets under the domestic J-Credit scheme.

Japan’s latest J-Credit auction clears above 3,000 yen again

Japan’s latest auction of government-issued J-Credits cleared above the 3,000 yen ($20.79) level again, as demand for domestic offsets continued to outpace supply given the limited number of credits available.

Australia grossly under-reporting methane emissions, says analysis

Fugitive methane emissions from Australian fossil fuel projects are nearly twice as high as national estimates, according to new analysis, meaning facilities covered under the Safeguard Mechanism will likely have to double their decarbonisation efforts to be in line with the country’s climate goals.

AMERICAS

ICE launches first Alberta carbon programme futures, as speculator builds credit positions

Global financial exchange ICE will launch futures contracts eligible for compliance under Alberta’s Technology Innovation and Emissions Reduction programme, while transaction data showed a financial player continues to amass holdings in the province’s carbon market.

US startup incubator acquires Canadian voluntary carbon broker and marketplace

A US-based firm that incubates environmental fintech firms on Wednesday announced it has purchased a Canada-headquartered carbon and renewable energy credit broker, though will keep the acquired entity’s branding for its own marketplace under development.

SHIPPING

Insufficient shipping carbon levy could lead to unmanageable regional regulatory differences, says industry

Shipping industry stakeholders have warned that a global carbon levy lacking in sufficient ambition could lead to a bureaucratic nightmare with patchworks of regional and national regulations emerging in response, as national representatives continue discussions in the UK this week to outline international climate plans for the sector.

BIODIVERSITY (FREE TO READ)

EU political groups face major discussions ahead of nature law vote next week

European lawmakers have just days to come to a decision on nature protection measures, with a vote due at next week’s plenary session on a law to restore at least 20% of the bloc’s sea and land areas by 2030.

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CONFERENCES

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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

He’s doing what for who now? – Former South African President Jacob Zuma is representing Belarus at a July 5-7 Zimbabwe conference on the trade in African carbon credits, Bloomberg reports. Zuma, who was seen entering the event venue in Victoria Falls, is due to deliver a “special presentation” on behalf of the Belarusian African Trade organisation on Friday, according to the agenda of the Africa Voluntary Carbon Credits Market Forum. “There is a very big role he has to play at that conference,” Nkululeko Sibanda, spokesperson for the event, said, without elaborating. Zuma, apart from presiding over a 2011 COP in Durban, has no known track record in the carbon credits industry, but he had close ties with Russia, an ally of Belarus, during his nine-year rule. The former president is also facing a corruption trial in South Africa, related to a state arms deal. He has denied wrongdoing. The event organisers are also hosting John Hlophe, who was suspended as the top judge of South Africa’s Western Cape province, the agenda shows. Zuma and Hlophe are board members of the Belarusian African Trade Organization, according to Zimbabwe’s state-controlled Sunday News newspaper. Hlophe was suspended for gross misconduct for trying to pressure judges to rule in favour of Zuma in a court case.  He has denied the allegations. Zimbabwe has close ties with Belarus. President Alexander Lukashenko visited the African nation earlier this year amid pledges of agricultural and industrial investments.

Will they, won’t they? – The UK government has denied reports that it is considering abandoning its crucial £11.6 bln climate finance pledge amid widespread outrage and allegations that it has betrayed climate action, the Independent reports. The denial comes in response to a Tuesday report by the Guardian, based on a leaked briefing note that said the current government was contemplating dropping its commitment to contribute to the global $100 bln climate finance fund.  It quoted the note’s outlining of potential reasons for ditching the pledge and how challenging meeting it would be. This fund, for which the UK doubled its commitment when it hosted COP26 in 2021, is aimed at channelling finance to developing and under-developed countries to tackle the worsening climate crisis. Observers say the failure of rich nations to meet the goal, despite its initial deadline being 2020, is slowing down progress on developing other international climate solutions.

Somalian trees – The UN and Iroko Analytics are collaborating to establish Somalia’s first carbon credits programme through reforestation, with funding provided by the UN’s International Organization for Migration. Although the project is in its early stages and a site has yet to be identified, Iroko’s CEO Jules Caron aims to begin planting trees by the end of the year. Between 3,000 and 5,000 hectares are planned to be planted with a combination of carbon-sequestering trees beneficial to the local community. Revenue from carbon credit sales will go to the community hosting the project, with a portion also going to Iroko. The company, backed by Techstars, is also developing projects in Cameroon. (Bloomberg)

EMEA

Clear support – There is high acceptance for ambitious climate policy in Germany, although many citizens are dissatisfied with the political implementation of the energy and transport transitions, a large survey of the country found. Just over two-thirds continue to strongly support the energy transition despite many uncertainties, the report suggested. A total of 41% of respondents agreed that the issue of climate protection has gained in importance because of the energy crisis. Despite the overall support, however, citizens are dissatisfied with the relief measures taken so far to cushion inflation and increase energy prices. Two-thirds also said the government measures implemented in 2022 only brought minor relief, or none at all. More than half said it’s the political implementation – more than high costs or bureaucracy – that bothers them most when it comes to the energy transition. (Clean Energy Wire)

Camden’s carbon – The North London borough of Camden, in partnership with Retrofit Credits, is pioneering a new approach to carbon offsetting for businesses and organisations. Retrofit Credits allows Camden-based organisations to offset their residual carbon emissions locally by purchasing carbon credits secured directly from energy efficiency improvements made to social housing in Camden. Camden is one of 22 social housing providers to have benefitted from the carbon credit pilot, which will generate around £100,000 this year. Over the next twenty years, it is forecast that the credits generated through the pilot will raise over £7 mln that can be reinvested back into retrofit works across partnering social housing providers. Following the success of the pilot, Camden intends to partner with Retrofit Credits to release further tranches of carbon credits for purchase later this year. Investors can view details on the next tranche of credits for sale via the Camden Climate Alliance.

ASIA PACIFIC

H2 carbon credits -India is considering bilateral agreements with countries such as Japan to allow them to use carbon credits linked to green hydrogen production in India in exchange for investment and purchase deals, Reuters reports. Trading in carbon credits can bring in more investment and assured offtake to India, said two government sources and one industry source, all of whom declined to be named as the discussions are not public. The Indian government approved a $2.13 bln incentive plan to promote green hydrogen in a bid to cut carbon dioxide emissions and become a major exporter in the sector. Any agreements will see overseas companies or financial agencies signing investment and purchase deals with Indian green hydrogen makers, the sources said, adding that India is already in talks with Japan. It follows the two countries signing a preliminary agreement in March for India to join Japan’s Joint Crediting Mechanism (JCM).

Further discussion –  South Korea’s environment ministry will hold a meeting with representatives from Indonesia today (July 6) to discuss the cooperation of the two countries on green infrastructure development, it said in a notice published on Wednesday. At the joint committee, South Korea will introduce a comprehensive plan for floating photovoltaic power generation to be established in Indonesia’s new capital in East Kalimantan, and discuss ways to link the initiative with future GHG reduction projects. The two nations will also review the progress of a smart water management pilot project and the construction of a new water purification plant.

Paper giant’s deception – Singapore-based pulp and paper giant Royal Golden Eagle is linked to deforestation in Indonesia despite having a no-deforestation policy since 2015, according to an investigative report. RGE is one of the world’s largest producers of wood pulp and the products that are made from it. The report co-published by five environmental organizations alleges that RGE’s pulp and paper unit in China, Asia Symbol, received 1.5 million cubic meters (53 million cubic feet) of wood in 2021-2022 from nine pulpwood suppliers in Kalimantan, the Indonesian portion of the island of Borneo. Using geospatial remote-sensing data from TheTreeMap, the report found that three of the nine suppliers had cleared a combined 37,105 hectares (91,688 acres) of natural forest in Kalimantan — an area more than half the size of Singapore — from 2016 to 2022. Almost all of IFP’s concession area, including the forest that was recently cleared, is identified as orangutan habitat while the natural forests play a critical role in sequestering carbon emissions and mitigating climate change.

Climate Inactive – Australia port, GeelongPort has decided to discontinue certification from the government’s Climate Active programme for FY23 it announced recently. The port organisation was carbon neutral certified from its business operations from FY21, and has submitted information to be certified in FY22. The company has also achieved the use of 100% renewable energy in December last year through its Barwon Region Renewable Energy Partnership. However, the company said it was committed to investigating ways it could reduce its absolute carbon emissions rather than purchasing carbon offsets. It comes as an Australian environmental group has called for a review into the scheme.

AMERICAS

Sask system – Saskatchewan is officially no longer under the Canadian federal backstop output-based pricing system, and now operates under its own provincial equivalent, Ottawa confirmed Wednesday. Prime Minister Justin Trudeau’s government announced the move back in November, and Saskatchewan in May published updated regulations to cover the electricity and natural gas pipeline transmission sectors under its existing OBPS. The regulation is back dated to Jan. 1, 2023, and the province is still subject to the federal CO2 levy. The small prairie province is the second-biggest oil-producing jurisdiction in the country, according to the Canadian Association of Petroleum Producers.

Nuclear number one – The government of Ontario announced its intention to begin developing new nuclear capability at its Bruce Power plant on Wednesday, which would make it the largest nuclear power station in the world. The Bruce Power facility aims to add 4,800 MW to the plant, which already supplies 30% of Ontario’s electricity. Demand for electricity is growing in Ontario due to the 2035 electric vehicle (EV) mandate, growing EV manufacturing, and an accelerating influx of immigrants. Ontario Premier Doug Ford had previously promised to ramp up natural gas-powered electricity operations, but has not yet followed through. The Bruce Power facility is currently the second-biggest nuclear energy facility in the world, with only Japan’s Kashiwazaki-Kariwa plant standing above the Ontario operation.

Prairie planting – The Canadian prairie province of Manitoba’s government announced Wednesday it will plant an additional 1 mln trees annually in partnership with the federal government. The plan will cost the Manitoba and federal governments C$8.85 mln each, and is part of the national plan to plant 2 bln trees across the country by 2031.

Pension divestment extension – For the second year in a row, California lawmakers have passed up an opportunity to force its public pension funds to divest from fossil fuels. A bill to that effect, SB-252, passed the state senate but was converted to a two-year bill upon reaching the assembly. That means the bill will come up for a potential floor vote in the next session of the California General Assembly. Under the proposed bill, pension funds of the California Public Employees’ Retirement System and the California State Teachers Retirement System would be forced to divest from fossil fuels by 2031, and halt new investments by 2024. (Bloomberg)

AND FINALLY…

Ganni googly for yarn – Danish fashion brand Ganni and California start-up Rubi, which is pioneering carbon-negative cellulosic textiles, debuted the first-ever yarn made directly from carbon emissions through a fully enzymatic process. The yarn, which is carbon-made and water and land neutral, was unveiled at the Global Fashion Summit in Copenhagen, and marks phase two of the strategic pilot partnership between both brands, where the ambition is to create garments from Rubi-made CO2 fabric. Ganni will be the first-ever fashion brand to trial the fabrics made with Rubi’s patent-pending technology, through a blend composition of 20% Rubi cellulose yarn and standard industry cellulose. Rubi’s patent-pending, cell-free biocatalysis process captures and converts CO2 from the waste streams of manufacturing facilities into cellulose. The converted cellulose is then used to create lyocell yarn which can be used for clothing and materials.

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