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TOP STORY

UKA & EUA POLL: Analysts slash UKA forecasts while leaving outlook for EUAs unchanged

Analysts have left their short-term forecasts for EU carbon prices more or less unchanged despite a large drop in carbon-intensive power generation and sluggish demand from industrials, while again raising their longer-term outlooks and significantly slashing their expectations for UK carbon costs.

EMEA

FEATURE: UK peatland market needs key building blocks to boost liquidity, reassure buyers

The market for UK peatland restoration projects is growing fast but needs clear parameters in the way of more regular verifications, contractual obligations, and better reporting guidelines for businesses in order to improve market liquidity and carbon credit sales.

Euro Markets: EUAs continue to drop despite funds building length, while UKAs reach new nadir

European carbon prices extended their recent losses to another two-month low in active trading on Wednesday after data from ICE showed investment funds had boosted their net long position last week, while UK Allowance prices continued their five-month decline to reach a new record low.

Germany’s plans to hike domestic carbon price hit political snag -Bloomberg

Germany’s plans to put its domestic carbon price for buildings and transport back on its pre-energy crisis upward trajectory are in question amid a ministerial clash, Bloomberg reported on Wednesday, citing anonymous sources.

AMERICAS

Second Oregon-based CCO project set for termination following wildfires -report

Another forestry-based California Carbon Offset (CCO) project in neighbouring Oregon will be cancelled after wildfires ravaged the site several years ago, according to a media report Wednesday, which would make it the second improved forest management (IFM) undertaking in the Beaver State to fold.

Record gasoline deficits in Q1 yield Oregon Clean Fuels Program’s second highest net quarterly draw

The Oregon Clean Fuels Program (OCFP) slipped back into net quarterly credit drawdowns during the first three months of the year, as new highs in quarterly gasoline deficits beat out record renewable diesel volumes, according to state data published Tuesday.

Massachusetts GWSA emissions maintain 3-year low during Q2

CO2 output under the Massachusetts Global Warming Solutions Act (GWSA) cap-and-trade system remained at three-year lows through the second quarter of 2023, according to data updated this week.

US climate law alone not enough to meet Paris goal -analysis

Mandates and regulations must accompany the clean energy incentives provided by the Inflation Reduction Act (IRA) in order for the US to hit its Paris Agreement GHG reduction commitment, according to analysis published Wednesday.

ASIA PACIFIC

AU Market: Historic plantings ACCU trade goes for massive premium

An Australian Carbon Credit Unit (ACCU) deal for credits sourced from an environmental plantings project has traded for nearly double the generic market price level, sending a clear market valuation for the credit type, a trader said Wednesday.

Civil societies to take controversial Sabah forest carbon deal to court

A group of civil societies will take the century-long forest carbon deal between the Sabah state government and a Singaporean shell company to civil court, Malaysian media reported Wednesday.

NZ Market: NZU price slips due to weak demand, regulatory uncertainty

NZU prices have steadily declined the week following the government’s announced overhaul of the ETS price controls and settings, as foresters and farmers lament the government’s management of the scheme.

Japanese energy firm enters Australian carbon market

A Tokyo-listed industrial gas and hydrogen supplier has teamed up with a government-backed forestry company in Western Australia for a forestry project in the hope of acquiring carbon credits abroad.

Japanese telecom company latest to target domestic offsets from paddy rice cultivation projects

A major telecommunication company in Japan has become the latest in the country to initiate an offset generation initiative that can reduce emissions from paddy rice cultivation, based on a newly announced methodology under the domestic scheme.

VOLUNTARY

Singaporean tech company issues CO2 removal credits to fund Indonesia biochar projects

A Singaporean tech company has announced plans to produce biochar from sugarcane bagasse waste in Indonesia, and aims to pay for it by issuing CO2 Removal Certificates (CORCs), it announced Wednesday.

Developers take the plunge on direct ocean carbon capture

Direct ocean carbon capture using membrane contactors that bring a solvent into contact with seawater to siphon off the CO2 offers a promising way to capture carbon from the ocean, which is at levels around 50 times greater than the amount in the atmosphere and providing a focus for several developers of innovate climate mitigation projects.

INTERNATIONAL

Cross-border loans a key driver of coal investment in Global South, with risk of same trend emerging for gas -report

Cross-border loans from public banks could become a key driver of investment in gas-fired power plants in the Global South, researchers said in a report published on Wednesday that flagged signs of interest in fossil fuel financing caused by Russia’s war of aggression against Ukraine.

Climate change threat to tropical forests more imminent than thought -study

The canopies of the world’s tropical forests may be approaching vital high-temperature thresholds faster than previously thought, according to recent study.

BIODIVERSITY (FREE TO READ)

Canadian miner says will apply for seabed mining licence next year, eyes 2025 start

Canada’s The Mining Company (TMC) said Tuesday it will apply to the International Seabed Authority (ISA) for a deep sea mining licence after the ISA Council meeting in July next year, and expects to begin operations in an area more than twice as big as initially planned in Q4 2025.

US readies guidance for ecosystem services accounting in cost-benefit analyses

The US federal government has released draft guidelines to support public agencies in including ecosystem services when doing cost-benefit analyses.

Turkey withdraws from hosting biodiversity COP16 due to earthquake devastation

Turkey has withdrawn from hosting the 2024 UN biodiversity summit, citing a force majeure following the three devastating earthquakes earlier in the year, officials confirmed this week.

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CONFERENCES

North America Climate Summit – Sep. 19-21, New York City: The International Emissions Trading Association (IETA) looks forward to welcoming delegates to our flagship North America Climate Summit (NACS) 2023, an official accredited event of New York Climate Week 2023 and the UN General Assembly 2023. The Summit is the ideal forum to take stock of the world’s evolving net zero landscape and clean growth opportunities, and a zoom into North America. Hear from policymakers, business leaders and innovators who are leading the pack in building, scaling and collaborating on carbon pricing and markets for net zero. Register 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

Transatlantic tariffs – Trump-era tariffs and EU retaliatory measures would automatically return on more than $10 bln of steel and aluminum exports between the US and EU unless the two sides fail to extend the current truce by Oct. 31, reports Bloomberg News. The aim is to finalize a legally binding agreement to govern trade in steel and aluminum this year, with the outcome either to extend the October deadline or to allow the return of tariffs on billions of dollars of transatlantic exports, which first began in 2018 when Trump slapped tariffs on steel and aluminum exports from Europe, citing risks to national security. Talks on the so-called Global Arrangement on Sustainable Steel and Aluminum have intensified of late and progress has been made around tackling oversupply from China, with the Oct. 31 deadline fast approaching for a decision to be made.

AMERICAS

Better in Brazil – Deforestation in the Brazilian Amazon fell by at least 60% in July compared to the same month last year, the environment minister, Marina Silva, has told the Guardian. The exact figure, which is based on the Deter satellite alert system, will be released in the coming days, but independent analysts described the preliminary data as “incredible” and said the improvement compared with the same month last year could be the best since 2005. The good news comes ahead of a regional summit that aims to prevent South America’s largest biome from hitting a calamitous tipping point.

Take it back – A group of 39 Senate Republicans called on the US EPA to withdraw its proposed power plant rule requiring coal plants to capture 90% of emissions by 2030, and gas power plants the option to capture 90% of emissions by 2035, or run mostly on hydrogen by 2038, The Hill reported Tuesday. Arguing that carbon capture and clean hydrogen technologies had not yet “been adequately demonstrated” or “viable at commercial scale”, the lawmakers asserted that EPA’s planned rules would prompt coal plant retirements – a proposal in direct conflict with the Supreme Court’s decision in West Virginia versus EPA last June, which ruled that Congress did not authorise the agency to induce generation shifting under the Clean Air Act, the report noted.

Capable capacity – The US offshore wind project pipeline has enough capacity to meet President Joe Biden’s target to have 30 GW of offshore wind energy powering the country by 2030, thanks in large part to ambitious plans by European energy companies seeking to capture lucrative tax credits enacted in 2022. New S&P Global Market Intelligence data and analysis show a total project pipeline of 43.2 GW of planned wind farms off US shores this decade and beyond. The figures are based on project awards by US states as well as federal leasing records and announcements made by developers. Another two wind projects totalling 576 MW of capacity are planned in Canada, according to the data.

Triple capacity – The state of New York’s goal to reach 70% renewable electricity by 2030 means it will have to triple its capacity to 20 GW in the next eight years, according to a report released Tuesday from Comptroller Thomas DiNapoli. The state’s power developers have been stymied by cancelled projects, unaligned incentives, and delays, the report said. The state is currently the sixth largest producer of renewable energy in the US, the report found. (Utility Dive)

LCFS model meeting – California regulator ARB will hold a meeting to update the Low Carbon Fuel Standard (LCFS) model on Aug. 16 from 0900 to 1100 Pacific time (1600-1800 GMT), according to a notice from the agency on Wednesday. The public workshop will go over updates to the California Transportation Supply (CATS) Model. The model was published on Dec. 6, 2022 and updated on Mar. 3, 2023, the latter of which will be explained during the workshop.

Alberta innovation – The Alberta government will launch two hydrogen funding competitions to support hydrogen technologies to be used in production, transmission and distribution, storage, and in industries such as heavy-duty transportation, industrial heat, and chemicals. The funding will be sourced from the Technology Innovation and Emissions Reduction (TIER) fund and is intended to support projects using innovative technologies rather than what is commercially available. Some C$20 mln ($14.98 mln) is available through Alberta Innovates’ Hydrogen Centre of Excellence for early-stage innovations, while another C$25 mln is available through Emissions Reduction Alberta for later-stage technologies.

EMEA

Low demand – German primary energy consumption was down 7% in the first six months of 2023 compared to the same period last year, due to high energy prices and weak economic development, said energy market researchers at AGEB. Energy use from renewable sources increased slightly (0.6%), and there was a marked decrease in the use of fossil fuels, the preliminary data show. AGEB estimates that energy-related CO₂ emissions fell by more than 8% (28 Mt) in the first half of 2023 compared to the same time period in the previous year. This trend fits in with a wider EU drop in power demand. (Clean Energy Wire)

Fuel impasse – EU plans to start taxing polluting aviation fuels have reached an impasse as the bloc’s 27 member states struggle to agree on making green fuels cheaper and fossil fuels more expensive, reports Reuters. Barriers to reaching a decision include whether to introduce an EU-wide minimum tax for polluting fuels, which currently escape levies. It’s now two years since the first proposal to tax aviation fuels was introduced and still a deal is not in sight. Changing EU tax policy is particularly difficult because it requires unanimous approval from all EU countries. The proposal suggests that the minimum tax rate for aviation fuel for flights within Europe would gradually increase over 10 years, while sustainable aviation fuels would get a 10-year tax holiday, to encourage their use.

Cheap and green – While the availability of cheap green electricity will determine where industrial production sites are most lucrative, Germany would not be well-advised to try and keep all energy-intensive industries in the country with a subsidised electricity price, according to government advisers, as EurActiv reports. The economists say that not all industries will be worth keeping in future as a result. Once considered an industrial powerhouse, among key economies, Germany performs the worst in terms of economic growth, with a negative real GDP growth of -0.3% predicted for 2023, according to a new IMF estimate. But while the current dip is expected to be overcome by 2024, according to the forecast, experts expect even bigger changes in the country’s industrial structure in the coming years as the world moves closer to climate neutrality.

Power speed – The British government is set to back plans intended to halve the 14 years it currently takes on average to deliver the big electricity transmission projects needed to overhaul the UK’s energy system. Energy secretary Grant Shapps is expected this week to publish and endorse a report on how Britain can speed up the construction of electricity networks, part of efforts to reassure energy companies that he will remove regulatory barriers to facilitate their investment in new projects. (FT)

Tree cheers for Ireland – The European Commission has approved a €308 mln Irish scheme to support investments in afforestation. Ireland plans to reach 18% forest cover in Ireland by the end of 2027 (compared to 11.6% today) by establishing 8,000 ha a year of forests by paying 100% of landowners’ costs on both public and private lands.

Reaching out – The European Commission has opened two consultations on rules to manage upcoming changes to the EU ETS. The first is open until Aug. 30 and concerns the inclusion of shipping as of next year and proposes to allow any of four methods for calculating methane and nitrous oxide emissions as well as output from biomass, renewable fuels of non-biological origin, and recycle carbon fuel. The second consultation concerns the bloc’s Modernisation Fund, which allows 13 lower-income member states to give free allowances to their power generators in return for conducting upgrades. The document outlines plans for the staggered disbursement of funds for larger projects exceeding €70 mln, and sets out rules to consult member states ahead of proceeding with for projects exceeding €100 mln. This consultation is open until Aug. 29.

ASIA PACIFIC

Demonstration – Australian resources companies Calix Global and Pilbara Minerals have made a final investment decision to build a mid-stream demonstration plant in a joint venture to show off the benefits of producing a mid-stream lithium-enriched product using Calix’s patented electric kiln technology, the companies announced. A joint press release said the technology has the potential to reduce hard-rock lithium processing carbon emissions intensity if powered by renewable energy. It also said independent life cycle assessment studies estimate that converting spodumene using electric calcination when using 100% renewable energy could reduce calcination carbon emissions intensity by around 80%. This would materially reduce carbon emissions in one of the most energy-intensive steps of the lithium battery materials production process. Estimated construction costs will come to A$104 mln, with A$20 mln coming from an Australian government grant.

CCS study – Trading company Itochu has teamed up with six other major Japanese companies to conduct a feasibility study on the development of carbon capture and storage (CCS), it announced Wednesday. The alliance will identify technical issues in the entire CCS value chain as well as commercial and social acceptability issues, using ships to transport CO2 separated and captured at specific plants of Nippon Steel and Taiheiyo Cement to appropriate sites for storage. Other participants in the study include Mitsubishi Heavy Industries, Itochu Oil Exploration, INPEX Corporation, and Taisei Corporation. Japan has set a target of an annual CO2 storage capacity of 6-12 Mt by 2030 under a long-term CCS roadmap.

Shadows behind the sun – The vast majority of solar panels made globally continue to have significant exposure to China, which controls at least 80% of the international supply chain, even with a recent ban imposed by the US on products from Xinjiang for human rights violations, according to the New York Times, citing findings from a new report. The global solar industry was found to be less transparent about the origin of its products, making it more difficult for buyers to determine whether solar panels purchased were made without forced labour.

No, no – China’s foreign ministry has denied media reports claiming the country obstructed discussions on tackling climate change at G20 meetings last week, where environment ministers failed to agree on ways to curb emissions, according to Reuters. The ministry “regrets” the failure to reach an agreement at the meetings, which was caused by “geopolitical issues” brought up by other countries “for no reason,” it said in a statement.

VOLUNTARY

Mena listings – Qatar-based Global Carbon Council is discussing with exchanges in the Middle East to list its offsets. The international carbon credit programme has issued offsets to clean energy projects from nearly 45 countries and would like to list these credits on exchanges based in Egypt, Saudi Arabia and the UAE. The GCC already signed an agreement with the Egyptian Stock Exchange and is also in talks with Saudi Arabia’s sovereign wealth fund. GCC credits are Corsia-compliant.

Rubicon risk adjustment – Carbon solutions provider Rubicon Carbon on Wednesday released a white paper detailing a novel risk adjustment framework for new and legacy offsets. In a press release, the company said the framework is designed to create high integrity carbon credits and drive confidence in the voluntary carbon markets by addressing current issues such as over-crediting risk, future delivery risk, and other risk factors that impact credit quality. Rubicon Carbon launched in November with initial backing of $300 mln from TPG’s Rise Climate investment fund, and said its first product, the Rubicon Carbon Tonne, is backed by an inventory of 20 mln diversified carbon credits.

SCIENCE & TECH

Sound soil sampling – To monitor and sustainably manage soil organic carbon (SOC) stocks under agricultural land use, an accurate way to measure SOC is essential. However, current methods of accurately estimating SOC are resource- and cost-intensive. In their new study, published in Geoderma, Agroecosystem Sustainability Center (ASC) researchers tested a new sampling method in hopes of improving the ability to estimate SOC stocks. The team found that SOC stocks in agricultural fields can be more efficiently measured by using a method called doubly balanced sampling, which accounts for auxiliary information available in elevation maps, satellite images, and previous surveys. Doubly balanced sampling is a modern strategy that improves on the classic method of stratified sampling by selecting locations that are more representative of the field in terms of this auxiliary information.

AND FINALLY…

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