Newsletters >  CP Daily: Monday July 24, 2023

 CP Daily: Monday July 24, 2023

Published 03:23 on July 25, 2023  /  Last updated at 10:23 on July 26, 2023  / Carbon Pulse /  Newsletters

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

Canada eliminating most fossil fuel subsidies next year, becomes first in G20 to publish approach

The Canadian government announced Monday it will cease providing subsidies to fossil fuel operations and phase out public financing to the sector by 2024 with exceptions for carbon capture projects, drawing a mixed reaction from green groups.

EMEA

Southern Europe sees gas generation spike as air conditioning ramps up to battle extreme heat

Parts of Europe have seen ETS-covered fossil generation spike due to higher demand for air conditioning after extreme heat has swept across Southern countries such as Greece, Spain, and Italy, as analysts point to sustained consumption this summer with temperatures set to remain elevated.

Spanish election result seen opening up new scenarios for EU climate policy

The result of general elections in Spain on Sunday has thrown the country into political disorder that could last for months and spill over into EU climate policy.

Euro Markets: EUAs consolidate last week’s gains as gas resumes upward trend

European carbon prices gave up early gains to end Monday modestly weaker, as prices consolidated after six successive days of gains ahead of August’s annual drop in auction supply, while gas prices held on to early advances before surging again late in the day.

European chemicals groups signals dismal outlook for regional output in 2023

Chemical production in the EU is on course to decline by about 8% in 2023 compared to the previous year, with no imminent recovery of demand in the region, a large industry group has warned, as it proposes a new climate manifesto for Brussels to follow during the next legislative cycle to keep the ETS-covered industry competitive.

Brussels seeks input on existing methodologies for certifying industrial carbon removal practices

The European Commission is seeking input on existing methodologies for certifying industrial carbon removal practices, as the bloc moves towards establishing a voluntary framework for these activities.

ASIA PACIFIC

Australia Market Roundup: Canberra commits A$50 mln to Indo-Pacific clean energy studies, ACCU issuance up

Australia has committed A$50 million ($33 mln) to support clean energy supply chains in the Indo-Pacific the government announced over the weekend, as the issuance of Australian Carbon Credit Units (ACCUs) rose, according to a regulatory update.

South Korea to subsidise REDD+ feasibility studies for private sector participation

South Korea has launched a funding programme to encourage companies to conduct REDD+ feasibility studies for the private sector, as the country has pledged to secure more forest carbon credits abroad to realise its climate goals.

Productivity Commission comes out against Australian CBAM

Australia’s Productivity Commission used its latest report to rebuke the idea of the government introducing a Carbon Border Adjustment Mechanism, claiming it to be unnecessary and protectionist for local industry.

Korean renewable firm taps into Vietnam’s renewables market, eyes carbon credits

One of the largest energy solution providers in South Korea is planning to expand its renewable energy business in Vietnam and accordingly secure carbon credits, it announced on Monday.

Alibaba notches 13% cut in emissions, highlights progress towards Scope 3+ goal

Chinese e-commerce giant Alibaba Group on Monday announced a 12.9% reduction in net carbon emissions from its direct operations over the past fiscal year, also revealing for the first time progress towards its ‘Scope 3+’ goal.

AMERICAS

RGGI Market: RGAs extend to year-highs with steepest weekly transaction volumes for 2023

The rally in RGGI Allowance (RGA) values continued through another week with a high level of spread activity leading to the largest weekly transaction volumes on ICE, in step with the rally in California Carbon Allowance (CCA) values and global macro positivity.

California gasoline sales stagnate, diesel recedes in April

California gasoline consumption held steady in April while diesel sales dropped, according to recently published state data, leaving transportation sector cap-and-trade emissions to still trail year-ago levels.

VOLUNTARY

VCM Report: Prices drift lower even as net zero pledges continue to rise

Carbon credit prices drifted lower generally in the voluntary market over the past week amid the over-supply of available units, but investment continued to pour into certain sectors to underline a positive outlook amid a steady rise in corporate net zero pledges.

Climate contributions, not offsets, constitute best approach to raising global ambition -report

Climate contributions divorced from offsetting claims are necessary to increase the number of “high-hanging fruit projects” in cost-prohibitive sectors and unlock deep decarbonisation, a think-tank said Friday.

AVIATION

Ryanair signals high EU carbon price risk on future business in new sustainability report

European carrier Ryanair has outlined the main climate-related risks to revenues in a 2023 sustainability report published Monday, with increased carbon pricing cited as “most impactful” on strategy in the firm’s net-zero outlook.

BIODIVERSITY (FREE TO READ)

France votes through law to open up space for biodiversity and carbon credit stacking

The French parliament has voted through a green industrial law that is expected to open up ecosystem restoration projects in the country to biodiversity and carbon credit stacking.

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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

Gearing up – Indonesia and the UK have inked a deal to cooperate on establishing a carbon market in the Asian country, reports The Jakarta Globe. The implementing arrangement was a follow-up to the memorandum of understanding (MoU) that the two nations signed on the sidelines of Bali’s G20 Summit last year where the Indonesia Just Energy Transition Partnership was launched. Under this MoU, the British government committed £2.7 mln from the UK Partnering for Accelerated Climate Transitions (UK PACT) to provide recommendations and policy studies for Indonesia’s carbon pricing. Indonesia plans to launch a carbon exchange this September to facilitate a cap-and-trade carbon market in the country. The UK and Indonesia are fostering closer ties in general, closing a second round of talks last week to boost trade between the countries. UK Minister for International Trade Nigel Huddleston and Indonesian Vice Minister for Trade Dr Jerry Sambuaga agreed in the meeting to grow digital trade and continue to focus on renewable energy opportunities.

EMEA

Max power – The British energy minister, Grant Shapps, has insisted that the government will “max out” the UK’s remaining reserves of North Sea oil and gas, arguing this is compatible with Britain’s pledge to reach net zero carbon emissions by 2050, the FT reports. Opposition Labour leader Keir Starmer has said the UK will grant no new North Sea licences if his party wins the next general election, but would not revoke existing contracts.

Another lawsuit – Environmental law charity ClientEarth has been denied permission by a London high court to pursue a lawsuit against Shell concerning its climate strategy. Holding 27 shares in Shell, ClientEarth claims the company’s directors are not fulfilling their obligations to shareholders since Shell’s current climate transition plan won’t meet its net zero emissions target by 2050. Judge William Trower dismissed the case, suggesting it failed to consider the challenges involved in managing a company as large as Shell. If approved, experts said the suit could have set a precedent for investors to sue other companies over inadequate climate risk management. “This doesn’t mean that climate litigation claims are dead in the water, but there would need to be clear evidence of an serious breach in order for a claim to stick,” said Joanna Ford, Commercial Disputes Partner at Cripps. “The decision shouldn’t be seen as a licence for company directors to simply ignore ESG issues, however, and as we get closer to the net zero target date of 2050 there is likely to be less and less scope for directors to argue that climate issues shouldn’t weigh heavily into their decision making about the management of the companies they are in charge of.” Shell supported the court’s decision, emphasizing their directors’ balanced approach, while ClientEarth expressed disappointment and said it would appeal.

No thanks – The vast majority of German consumers avoid companies linked to greenwashing, a survey seen by newspaper Handelsblatt has found. Some 72% of respondents in the survey conducted by the non-profit Nuremberg Institute for Market Decision (NIM) said they steer clear of businesses accused of making false climate protection statements. (Clean Energy Wire)

Big battery – Carlton Power is currently in advanced talks with companies to finance, build and operate a £750 mln battery energy storage project in the UK set to be the largest in the world, Bloomberg reports. The UK electric generation company has secured planning permission from local authorities for the 1 GW and commercial operations are expected toward the end of 2025, according to a statement released on Monday. Work on the project is expected to start early next year near Manchester.

Below the surface – A €195.6 mln French aid scheme will set up a guarantee fund for deep geothermal operations, after the EU Commission announced its approval on Monday. Brussels authorised a contribution from the French Environment and Energy Management Agency (ADEME) of a maximum of €140 mln, while contributions in the form of subscriptions from project promoters will amount to €55.6 mln. This fund, which will be implemented for a period of 10 years, will grant guarantees for the drilling operations of deep geothermal projects with a capacity of approximately 30 MW. The purpose of these guarantees will be to cover the risk linked to the high degree of uncertainty of the deep geothermal resource during drilling, given that the market is not currently able to guarantee coverage. The maximum amount of compensation per project will amount to €17 mln euros and will be paid to project leaders in the event of failure. Read our feature on EU tapping geothermal heat as ‘model’ facility delivers scale.

ASIA PACIFIC

Big bets – Chinese oil refiners and petrochemical companies, including state oil giant Sinopec and Shanghai-listed Wanhua Chemical, are investing tens of billions of dollars to produce high-end chemicals for solar panels and lithium-ion batteries according to Reuters. As the demand for energy transition technologies is growing in the country, companies are shifting from making more basic petrochemicals for polyester fabrics and plastic packaging to manufacturing higher-value products such as polyolefin elastomers (POE) used to protect the cells on solar panels, ultra-high-molecular-weight polyethylene for lithium-ion battery separators and carbon fibre for wind turbine blades, the report said.

Lowering standards – The Australian government has reduced the benchmark rate of return on investment for its green bank, the Clean Energy Finance Corporation (CEFC), RenewEconomy reports. The CEFC board must now target an average return of at least the five-year Australian government bond rate, plus 2-3% per annum over the medium to long term as the benchmark. The changes undo the increases to target investment returns, ratcheted up under successive Coalition governments, which the CEFC has previously described as “unrealistically high”. Elsewhere, further changes to the investment mandate underline the importance of local content, requiring projects backed by the CEFC to deliver local job opportunities and use local products and services, particularly in regional Australia.

Marketplace for individuals – Decarbonization Support, a green solution provider in Japan, has begun operating a new website it claimed to be the country’s second platform for individuals to trade domestically issued J-Credits, it announced Monday, without disclosing further details. The Japanese company earlier this month opened a similar marketplace and has acquired 800 J-credits for personal asset management purposes, it said.

Carbon partnership – Sharjah National Oil Corporation (SNOC) and Sumitomo Corporation Middle East FZE are clubbing together to look at the potential for carbon capture and storage (CCS) in the UAE’s Sharjah and beyond. Their feasibility study will look into the entire CCE value-chain, including the techno-economic analysis of CO2 capture, transport, storage, business models and regulatory aspects. SNOC’s mature gas field is potentially a competitive carbon sequestration sink due to its large storage capacity and ideal location not far from several large CO2 sources such as power plants (Oil Review Middle East).

AMERICAS

Methane monitoring money – The US government will provide up to $700 mln in funding to monitor and reduce methane emissions from the oil and gas sector, setting aside half of the amount for grants to states, two agencies said on Monday. The funding will be accompanied by technical assistance for companies to rein in emissions of the planet-warming GHG from leaks and daily operations, the US EPA said. States will get as much as $350 mln through the US Department of Energy’s National Energy Technology Laboratory to help companies voluntarily identify and permanently reduce methane emissions from low-producing wells. For the remaining funding, the EPA and the DOE said they will also invite bids from tribal governments, companies, and communities for the deployment of technologies and implementation of best practices in the oil and gas sector. The funding comes from the Inflation Reduction Act as part of a set of Biden administration rules that tackle power plant and vehicle emissions as well as other potent GHGs. (Reuters)

Beyond the trees – California’s diverse native habitats, beyond just trees and forests, have potential as significant carbon sinks to counter the climate crisis, as per a report titled “Hidden in Plain Sight” by the Center for Biological Diversity. While forests are commonly recognised for their carbon-storing abilities, other environments like shrublands, grasslands, deserts, and riparian corridors often go unnoticed but can serve as essential carbon absorbers. The report suggests that developers and policymakers are neglecting local ecosystems for carbon offsets and large-scale tree planting, which have not delivered the expected CO2 storage outcomes. The study emphasises that areas in arid regions and native grasslands’ underground portions can store significant amounts of carbon, with the added benefits of biodiversity, water infiltration, and groundwater replenishment. Protecting these habitats aligns with Governor Gavin Newsom’s “30 by 30” initiative. The study also criticises current developmental reviews for overlooking carbon storage loss due to habitat destruction and advocates for accurate accounting and wiser land-use decisions. (Courthouse News)

INVESTMENT

North America investment – Japanese trading house Itochu Corp plans to invest around $2 bln in renewable power generation assets in the US and Canada via the establishment of a new fund, it said in a statement on Monday. It has been working with Sumitomo Mitsui Trust Bank on the concept of the fund business and investor solicitation activities. Tokyo-based Fuyo General Lease and Tokyu Land Corporation have decided to invest in the new fund, which will be managed by Tyr Energy, a wholly-owned subsidiary of Itochu, according to the statement.

Captured cash – BGF, a growth capital investor in the UK and Ireland, has invested £3.4 mln in Nuada, a British company specialising in advanced carbon capture technology. Nuada’s innovative ‘heatless’ capture method addresses challenges related to energy intensity and cost, paving the way for industries to reduce their carbon footprints more effectively and affordably. The company has partnered with top cement manufacturers and is introducing its technology at Buzzi Unicem’s plant in Italy. BGF’s investment will fund a new pilot plant in the UK. This funding follows Nuada’s £4.5 mln Series A round and nearly £3 mln in grants from UK entities.

SCIENCE & TECH

Batt-tastic – A new solid-state battery technology developed by NASA offers a promising alternative to traditional jet fuel combustion by being able to electrify flight, with zero associated carbon emissions, reports Oil Price.com. Solid-state batteries surpass current lithium-ion batteries by being lighter, boasting a larger energy storage capacity and avoiding any of the environmental and geopolitical implications linked to lithium. Researchers at NASA’s Solid-state Architecture Batteries for Enhanced Rechargeability and Safety (SABERS) say that the design eliminates 30-40% of the battery’s weight, while doubling or even tripling the amount of energy it can store.

AND FINALLY…

Dead and buried – Green technologies and tackling transport emissions could slash the funeral sector’s sizeable carbon footprint, according to a study by UK green funeral provider Full Circle Funerals and sustainability certification firm Planet Mark. It argues that if the government ramped up policy support for the sector it could help slash emissions by up to 400,000 tonnes a year by measures such as using sustainable biofuel instead of fossil gas for cremations, deploying natural burials, especially if digging is done manually, without the use of machines or fuel, and using biodegradable burial bags instead of mahogany veneer coffins. Dutch start-up Loop Biotech earlier this year launched an updated version of its “Living Cocoon” coffin made from hemp and mushroom-based materials, which is designed to biodegrade in 45 days. (BusinessGreen)

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