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TOP STORY

IMO adopts more ambitious GHG targets for global shipping sector

The UN’s International Maritime Organisation formally adopted a revised greenhouse gas strategy on Friday, more ambitious than its 2018 version but still adrift from aligning the sector with Paris Agreement climate objectives.

INTERNATIONAL

PREVIEW: UN carbon crediting talks poised for crunch debate on Paris alignment of projects

Members of the UN body shaping the rules for crediting carbon projects under the Paris Agreement are to dive deeper into a crucial debate around aligning activity baselines with the ambition of the accord, according to documents published ahead of next week’s meeting.

VOLUNTARY

Citigroup eyes carbon credit investments in wake of JPM “signal”, despite demand drop

Citigroup is considering investing some of its own money in carbon credits though would likely take a broader view than rival JP Morgan Chase’s approach, a conference heard on Friday from an executive at the US bank who viewed the voluntary carbon market’s current ‘decline’ as temporary.

Belarusian group, South Africa’s Zuma donate 2 mln questionable credits to Zimbabwe’s carbon trading efforts

A Belarusian group, through former South African President Jacob Zuma, has donated 2 million questionable carbon credits towards Zimbabwe’s nascent emissions trading efforts.

Malawi orders review of all carbon projects, will take “highest possible” revenue share

Malawi has ordered a review of all carbon projects in the country, making it the latest African nation to seek more control and possibly a greater share of voluntary credit sale revenues.

Insetting may not be any better than offsetting, says carbon credit integrity expert

Companies turning to insetting as a knee-jerk reaction to criticism about offsetting practices may not be pursuing an approach that is any more credible, a leading expert on carbon credit quality told a conference on Friday.

Swedish forestry management, carbon trading services firm raises €2.4 mln in fresh funding

A Swedish forestry management services company and carbon credit marketplace operator has raised €2.4 million in funding from a state-owned venture capital fund and existing owners.

Carbon removals firm to accelerate US expansion plans

A pioneering carbon removals firm is accelerating efforts to expand in the US.

Trio of companies to use blockchain to improve maritime carbon offsetting market integrity

A trio of firms has announced a partnership to incorporate blockchain technology into efforts to develop a traceable method for carbon offsetting transactions within the maritime sector, bringing more integrity to the market.

ASIA PACIFIC

Australia should aim for “well-above” 70% emissions cut by 2035, industry body says

Australia should cut GHG emissions by “well above 70%” by 2035 compared to 2005 levels, according to an industry body’s submission to the Climate Change Authority.

Australian bank commits cash to climate investor as part of A$220 mln Series A

An Australian bank has made an equity investment in a local carbon and natural capital investor as part of a successful A$220 million ($147 mln) Series A capital raising, it announced Monday.

China targets tighter offset market as govt releases draft rules for reborn scheme

After more than six years of suspension, China on Friday released draft regulations for its domestic carbon offset market, proposing significantly tighter settings than in the previous version, though the fate of existing projects was not mentioned.

CN Markets: CEA price reaches 60 yuan amid increased volume, CCER trades slow

China’s national emissions trading scheme (ETS) saw its spot price reach the 60 yuan benchmark over the past week with an uptick in trading volume, while trading activity remained slow in the domestic offset market given the limited supply.

Australia proposes new crediting mechanism for Hydrogen Headstart programme

The Australian government is consulting on it’s A$2 billion ($1.3 bln) Hydrogen Headstart programme, proposing a number of eligibility requirements for project proponents to receive funding, which includes a crediting mechanism.

ACCU market has water rule removed, govt launches grants to allow more plantation projects

The Australian Labor government has removed the ‘water rule’ from its carbon credit scheme to reduce its complexity, while also providing A$73.8 million in grant funding to support new plantation forests.

NZU stockpile shrinks by nearly 10 mln following May surrender deadline

The stockpile of privately held NZUs has shrunk by nearly 10 million due to a combination of the May surrender deadline and new issuance averaging rules, according to analysis.

Major Japanese telecom company launches EV project under J-Credit scheme

A major telecommunication company in Japan has launched an emission reduction project that it says will generate carbon credits under the national offset programme, targeting electric vehicle (EV) customers.

EMEA

European Commission seeks EU’s withdrawal from Energy Charter Treaty

The European Commission on Friday launched a process for the EU to withdraw from the controversial Energy Charter Treaty due to the pact’s incompatibility with the bloc’s climate law and policy, following unilateral exit moves from some states and pressure from lawmakers.

CBAM draft regulation misses opportunity to avoid patchwork of emission accounting standards, says think-tank

The European Commission has missed an opportunity to engineer an international emission accounting standard in its draft implementing regulation for the EU’s carbon border adjustment mechanism (CBAM), a think-tank claimed this week.

Euro Markets: EUAs make small advance as market seeks direction, while UKAs erase 6 weeks of gains

European carbon prices posted a moderate weekly decline despite a second small gain in a row, as participation remained at a low ebb with many participants attending an industry event, while UKAs dropped below £50, wiping out six weeks of recovery after the previous 21-month low.

AMERICAS

WCI compliance instrument surplus gains on offset issuances, while allowance excess shrinks

The WCI compliance instrument surplus bank continued to expand for the second consecutive quarter this year on larger offset issuances, while the cap-and-trade scheme’s allowance glut declined further despite subdued permit retirements over the three months, according to programme data published Friday.

Emitters and speculators boost V23 holdings across North American carbon markets

Emitters entered an overall net long position in California Carbon Allowances (CCAs) for the first time since late February on a bullish outlook and a heat wave, emitters also extended their RGGI Allowance (RGA) net length, while financial entities added to current vintage holdings across both carbon markets, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

BIODIVERSITY (FREE TO READ)

New Zealand launches consultation on national biodiversity market

New Zealand is considering establishing a domestic voluntary biodiversity credit scheme to halt and reverse the decline in natural ecosystems, and on Friday launched a broad consultation process to help shape the design of the market, including its interaction with other policies, such as the country’s carbon emissions trading scheme.

FEATURE: Momentum gathers for new moratorium on deep sea mining ahead of key UN meeting

Green groups, several countries, and scientist coalitions are urging for another moratorium on deep sea mining, days ahead of a decision on whether to start the exploitation of the ocean depths for critical raw materials and minerals is due to be taken at a UN meeting.

Sportswear brand signs up for deforestation-free leather initiative

German sports brand Puma has joined the Deforestation-free Call to Action for Leather, launched last month by the Textile Exchange and the Leather Working Group seeking to end deforestation and conversion of natural ecosystems in leather sourcing.

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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

Words matter – COP28 will accelerate an energy transition that “phases down the use of fossil fuels”, its president-designate from the UAE Sultan Al-Jaber said at a meeting of oil producing countries, raising expectations for the climate summit this year in Dubai, Climate Home reports. The remarks represent a slight shift in Al-Jaber’s position since his previous agenda-setting speech when he expressed support for the “phaseout of fossil fuel emissions”, carving out a big role for CCS technologies. The renewed rhetoric also inches him closer to the UN Secretary-General Antonio Guterres, who last month called on countries to phase out fossil fuels and “to leave oil, gas, and coal in the ground where they belong”. But Al-Jaber has still stopped short of calling for a “phaseout” or indicating the pace at which the phase down needs to happen. His remarks are closely watched as the COP host plays an important part in shaping the direction of negotiations, putting together the draft texts that countries are asked to accept.

EMEA

Loophole alert – European aluminium producers are warning that a loophole in the EU’s carbon border tax will lead heavily polluting exporters such as China to circumvent the rules and flood the bloc with low-cost, emissions-heavy metal. Under the EU’s proposed carbon border adjustment mechanism (CBAM), offcuts of aluminium that are remelted can be sold as a zero-carbon product even if the virgin material was produced with coal or other fossil fuel power. Aluminium companies including Norsk Hydro and Speira told the Financial Times that the CBAM incentivised producers outside the EU to generate as much scrap as possible, which would then be remelted and exported to Europe. Lightweight and durable, aluminium is vital for building aircraft and cars and is used in solar power components. However, it is the most energy-intensive metal known in the industry and is sometimes referred to as “solid electricity”, with production accounting for around 3% of the world’s industrial emissions, according to the IEA. In the EU, smelters emit around 6.8 kg of CO2 for every kg of aluminium, compared to a global average of 16.1 kgCO2 per kg of aluminium, according to the trade body European Aluminium.

Still short – The UK government is facing fresh legal action over its revised climate strategy, just a year after a landmark ruling found the previous policy on tackling GHGs was unlawful, the FT reports. Campaign groups including Friends of the Earth, ClientEarth, and Good Law Project have filed three separate claims at the British High Court in recent weeks over the government’s revised climate plans. The proposals, published in March, set out a strategy for cutting GHGs to net zero to meet its own legally-binding commitments to curb global warming, but in the 40 documents, the government admitted the new plan would fall short. Its calculations showed it would only deliver 92% of the emissions reductions needed to meet the UK’s 2030 goal to cut emissions by 68% compared with their levels in 1990.

Pinky promise? – A coalition of more than 90 UK-based NGOs has written to British PM Rishi Sunak urging the government to stick to its promises of achieving net zero by 2050 and delivering £11.6 billion in climate finance over five years from 2021. The group cited a report by the UK Climate Change Committee asserting that Britain is heading to miss its self-binding emission-cutting goals, and also picked up media reports that the government was seeking to drop its pledge to contribute to global climate and nature restoration funding. The Guardian newspaper quoted a government briefing memo as saying “Our commitment to double our international climate finance to £11.6 bln was made in 2019, when we were still at 0.7 [% of GDP spent on international aid] and pre-Covid,” and adding that meeting this pledge was now “a huge challenge” due to newer pressure, including recent commitments to help Ukraine. The government denied that it was reneging on its promise and that it remains committed to delivering on that pledge.

NextGenerationEU – Another request to add a REPowerEU chapter to a member state’s recovery plan landed on the Commission’s table on Friday, this time from the Netherlands. For instance, firms and households could benefit from this subsidy scheme for taking energy saving measures, such as the purchase of heat pumps, wall, glass and roof insulation, and solar boilers. The Netherlands’ REPowerEU chapter will be financed with €455 mln and a share of the Brexit Adjustment Reserve amounting to €280 mln. The Commission will now assess whether the modified plan still fulfils the assessment criteria and pass the final decision to the Council.

Another lawsuit – The Dutch government has won a legal case permitting it to reduce the number of flights at Amsterdam’s Schiphol airport, one of Europe’s busiest hubs, to address environmental concerns. An appeals court has overruled a local court, enabling the government to decrease flight numbers by 8% to 460,000 a year between the end of 2023 and Oct. 2024. The decision was contested by airlines including KLM, EasyJet, Tui, and Delta due to concerns about noise, pollution, and nitrogen dioxide emissions. Schiphol, which is majority-owned by the state and served 53 mln passengers in 2022, has expressed its willingness to forsake growth to become “quieter, cleaner, and better.” The ruling has sparked fears within the airline industry of similar regulations potentially being implemented across Europe. Shortly after this, Dutch PM Mark Rutte announced his resignation and that of his cabinet, citing irreconcilable differences within his four-party coalition about how to control immigration. The decision on Friday by the Netherlands’ longest-serving premier means the country will face a general election later this year for the 150-seat lower house of parliament. (FT)

And another – An Austrian court has dismissed a lawsuit filed by 12 minors accusing the government of failing to revise a 2011 climate protection law that, they claim, inadequately safeguards their constitutional rights. The plaintiffs, supported by environmental activists, asserted that the law lacked GHG reduction targets, clear responsibilities, and an accountability mechanism. However, the Constitutional Court deemed the suit “inadmissible”, arguing that not all aspects of the law were contested despite being inseparably linked. It also regarded the lawsuit’s scope as “too narrow.” The court did not address the substance of the lawsuit, according to Michaela Kroemer, the plaintiffs’ lawyer. (AFP)

ASIA PACIFIC

Nuclear button – Australian opposition leader Peter Dutton has ramped up calls for Australia to adopt nuclear energy, the Guardian reports. Dutton cast the move as a way to avoid dependence on wind and solar technology from China and a natural next step from the AUKUS security pact. He made the comments at an event organised by the Institute of Public Affairs a Liberal-aligned thinktank that has publicly opposed curbs on coal-fired power and has lobbied against the net zero by 2050 policy. He called for a debate about removing the legislative ban on nuclear power in Australia, a step that was not taken during the nine years of Coalition government, in which he was a senior member. Dutton argued that most of the leading solar panel manufacturers and wind turbine companies are based in China.

Deeper ties – Japanese Prime Minister Fumio Kishida will try to deepen cooperation in the energy sector during his trip to Saudi Arabia, the United Arab Emirates and Qatar later this month, Kyodo News reports, citing government sources. Kishida aims to ensure a stable energy supply from the oil-rich nations, which attempt to diversify their economies, while seeking to pitch resource-poor Japan’s hydrogen and other green technologies, according to the report. The East Asian country relies on imports for more than 90% of its energy needs.

Huge money – Japan’s Mizuho Financial Group this week issued the largest ESG bond ($1.4 bln) by Japanese financial institutions, it said in a statement. The maturity date of the bond has been set at July 6, 2029, and the group will provide the funds to its subsidiary, Mizuho Bank, to finance green projects.”In terms of financing, we will increase money flow aimed at solving social issues, including the transition to a low-carbon society by increasing our sustainable finance target to 100 trillion yen ($0.7 trillion), which includes 50 trillion yen in environment and climate change-related finance,” the group said.

AMERICAS

Still shrinking – Since Luiz Inacio Lula da Silva assumed the Brazilian presidency in Jan. 2023, deforestation rates in the Amazon have significantly decreased, according to data from Brazil’s national space research institute INPE. During the first half of 2023, deforestation covered 2,649 square km, a 34% reduction compared to 2022’s nearly 4,000 square km. This is the lowest loss reported since 2019. Lula’s administration, which prioritises controlling deforestation and restoring environmental law enforcement and conservation programme funding, plans to eliminate deforestation by 2030 as part of its commitment to reducing GHG emissions. This decline contrasts the increased deforestation under former president Jair Bolsonaro, which saw a 60% increase over his four-year term. The official deforestation estimate for 2022/23 will be released in late 2023.

INVESTMENT

Into the blue – BlueOrchard, a global impact investment manager, has raised over $50 mln in the second closing of its InsuResilience Investment Fund Private Equity (IIF PE II). The fund aims to harness private sector capital to support climate change adaptation and resilience building in emerging markets. Working with the German development bank KfW, the fund plans to provide affordable climate risk insurance to vulnerable individuals and small businesses. The fund has already made substantial investments in two climate insurance companies: Singapore-based insurtech firm Igloo and Brazilian agricultural insurance firm Newe. (Funds Europe)

Financing footprints – A working group of investment banks have been unable to find consensus or a required two-thirds majority vote on how to measure the carbon footprint of their underwriting activity that has delayed the publication of their first voluntary rule book due last November, Financial Times reported Friday. Bankers have been reluctant to agree on accounting for carbon emissions of underwriting deals through bonds and equities that typically do not remain on their balance sheets for long, compared to emissions from loan activity, the report explained. Members proposed banks take responsibility for between 17–33% of emissions linked to underwriting activity. However, critics have pointed to the hypocrisy of banks taking 100% credit for green bond underwriting deals in their annual green financing targets but shying from a similar proportion for emissions accounting from underwriting. The deadline for votes is Friday, and a failure to reach two-thirds consensus would result in the decision moving to the accounting body’s board of directors, the report noted.

SCIENCE & TECH

Solar race – Solar power cells have raced past the key milestone of 30% energy efficiency, thanks to innovations by multiple research groups around the world, reports the Guardian. Today’s solar panels use silicon-based cells and are rapidly approaching their maximum conversion of sunlight to electricity of 29%. The breakthrough development is to add a layer of perovskite, another semiconductor, on top of the silicon layer. This captures blue light from the visible spectrum, while the silicon captures red light, boosting the total light captured overall. With more energy absorbed per cell, the cost of solar electricity is even cheaper, meaning that deployment can proceed even faster. The perovskite-silicon “tandem” cells have been under research for about a decade, but recent technical improvements have now pushed them past the 30% milestone. Experts say that if the scale-up production of the tandem cells proceeds smoothly, then they could be commercially available within the next five years.

AND FINALLY…

High-rise hotel – The Hemp Hotel, set to open in Cape Town, South Africa, is being hailed as the world’s tallest building constructed with industrial hemp. The 12-story, 54-room hotel uses hemp-derived “hempcrete” for its walls, providing insulation and fireproof qualities while minimising ecological impact. This material is considered “carbon negative” as it absorbs more CO2 than it releases during production. While building with hemp can be costly, there are potential opportunities to sell carbon credits to offset these expenses, according to The Cool Down. The hotel is viewed as an example of the potential of hemp in the construction sector, with local supplier Afrimat Hemp planning to produce blocks using locally grown hemp. South African President Cyril Ramaphosa sees hemp and cannabis as potential drivers for job creation in the country.

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