Newsletters > CP Daily: Monday August 7, 2023

CP Daily: Monday August 7, 2023

Published 23:13 on August 7, 2023  /  Last updated at 23:24 on November 1, 2023  / Carbon Pulse /  Newsletters

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

Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here

TOP STORY

Brazil development bank cancels voluntary carbon purchase plans from credit tenders

Brazil’s development bank BNDES on Friday announced that it has scrapped its plan to purchase tens of millions of dollars in voluntary carbon credits from two tender processes last year as the institution restructures its support for the market.

VOLUNTARY

INTERVIEW: Kenya should focus on tax-dodging, not special taxes and fees in revised climate law, says clean fuels distributor

Kenya should close loopholes that allow untaxed carbon revenue to be shifted outside of the country in its upcoming legislation while steering clear of imposing special taxes and fees on the domestic market, a climate tech chief executive told Carbon Pulse on Monday.

VCM Report: Prices drift amid thin trade and uncertainty about CCP label

Carbon credit prices were little changed over the past week amid continuing uncertainty about the impact of the Core Carbon Principles (CCP) framework from the Integrity Council for the Voluntary Carbon Market (ICVCM), although there was a slight bounce in Xpansiv CBL’s nature-based standardised contract.

New platform launches to bring “radical transparency” to voluntary carbon market

A new firm announced a voluntary carbon market listing platform on Monday to accelerate credit supply development by rectifying what it says is the current “information asymmetry” that is stifling growth and trust in the sector.

AVIATION

Aviation non-CO2 methodology gains initial approval from Gold Standard paving way for credit issuance

A methodology for crediting contrail reduction, a form of non-CO2 pollution created by flying, has been provisionally approved by voluntary carbon market certifier Gold Standard, a release announced Wednesday.

EMEA

Euro Markets: EUAs slide despite strong gains in gas as market battles over key support level

European carbon allowance prices declined in thin trading on Monday, with bulls and bears battling over a key technical level, while natural gas made strong gains even as data showed further contractions in industrial output in the EU’s largest economy.

Rwanda to set a floor carbon credit price above $30 per tonne, says minister -media

Rwanda will not sell carbon credits below $30 per tonne and will also look to develop new technology-focused projects as well as expand those involving its forests, the country’s minister of environment was reported as saying by local media.

EU countries are set to outstrip their targets on solar energy, says business group

EU nations are likely to overachieve on the bloc’s overall targets for installing solar power over this decade, according to a business group’s assessment of the government plans submitted to date.

UAE partners with technology providers to deliver blockchain system for carbon credits

An inaugural national system for carbon credits using blockchain technology is being launched in the UAE through a partnership between the Ministry of Climate Change and Environment (MoCCAE) and two technology providers.

ASIA PACIFIC

Australia Market Roundup: Santos signs MoU on Bayu-Undan CCS, NZ hydrogen company secures NSW funding

Australian oil and gas company Santos has signed an agreement with Timor-Leste’s national oil company Timor Gap to explore cooperation opportunities on its Bayu-Undan CCS project.

NZ Market: NZU price, volumes rise as National party say will leave ETS unchanged if elected

Traded NZU volumes rose Monday, pushing the price up slightly, as a National opposition party spokesperson said they would not make major changes to the country’s ETS if it wins government in the October election.

Taiwan launches government-backed carbon exchange, trading to come later

Taiwan’s main bourse on Monday unveiled a government-backed carbon exchange in Kaohsiung, which will start offering trade in domestic carbon credits in the first half of 2024 at the earliest, while international units might become available later this year.

Japanese oil refiner taps into blue carbon, eyeing crediting business

One of Japan’s largest oil refiners has teamed up with an international aquaculture accelerator to explore the potential of blue carbon in the country, seeking the creation of domestically issued blue credits.

AMERICAS

RGGI Market: RGAs recede to 2.5-week low as California carbon rally subsides

RGGI Allowance prices fell back from eight-month highs this week in what market participants attributed to a continued sympathy trade with California Carbon Allowances, as well as a lack of fundamental demand specific to the power sector cap-and-trade system.

BIODIVERSITY (FREE TO READ)

Testing the waters: Indian developer rolls out West Papua reef project as first of several biodiversity pilots

An India-based carbon developer has submitted a coral reef project in Indonesia’s West Papua for pilot status under Verra’s emerging biodiversity methodology, with plans for other project types already teed up.

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CONFERENCES

Argus North American Biofuels, LCFS & Carbon Markets Summit – Sep. 11-13, Monterey, CA: Join 600+ key government representatives and industry stakeholders from across the entire biofuels value chain and carbon markets sector for three days of networking and knowledge exchange. Hear from leading policy makers from California, Oregon, Washington, Canada’s ECCC, Alberta, and British Columbia and industry experts from LanzaJet, BMW of North America, Morgan Stanley, Chevron, Southwest, Mercuria, Radicle, Phillips 66 and more. Take advantage of this opportunity to gather the latest policy and market insights and reconnect with industry peers. Learn more here.

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

Stronger together – The cooperation between Indonesia and the UK to bolster the Asian country’s energy transition has been extended to 2027, when it was due to conclude next year. The Indonesia-UK Cooperation Program Towards Indonesia’s Low Carbon Energy Transition, known as MENTARI, aims to accelerate Indonesia’s Net-Zero Emission (NZE) target and enhance the country’s commitment to a low-carbon future, notably by improving renewable energy planning and procurement. The UK also announced an additional £6.5 mln (135 bln Indonesian Rupiah) to maintain and improve the programme.

AMERICAS

Amazon arguments – The eight Amazon rainforest nations that comprise the Amazon Cooperation Treaty Organization (ACTO) are expected to face divisions over proposals to block new drilling and stop deforestation at their upcoming meeting, according to Reuters. Heads of state from the eight member countries – Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname, and Venezuela – will meet on Tuesday and Wednesday in Belem, Brazil for their first summit in 14 years. The aim of the summit is to craft unified policies, goals, and positions on a wide range of issues, but two issues in particular have already seen some contention between participants. First, Colombia President Gustavo Petro publicly pushed Brazil President Luiz Inacio Lula da Silva last month to block all new oil development in the Amazon, as Brazil weighs allowing a potentially huge new oil field at the mouth of the Amazon River. Second, Lula has called for all countries in the region to commit ending deforestation by 2030, but so far, Bolivia and Venezuela have yet to do so. There may also be contrasting views on which of the many issues discussed at the summit should be prioritised.

Reforestation revenue – Reforestation in Brazil could generate R$776.5 bln ($158.5 bln) in net revenue, says a new study released by Brazilian environmental think-tank Instituto Escolhas. The efforts could result in 2.5 mln jobs, 1 bln cubic metres of wood for sale, and the production of 156 mln tonnes of food. An investment of R$228 bln from both public and private sector funding is needed to generate these revenues in pursuit of targets assumed in the Paris Agreement — reforestation of 12 mln hectares of forests by 2030. (CNN Brasil)

Ecuador infusion – The World Bank on Friday approved a $500 mln loan to support the government of Ecuador in its efforts to achieve resilient, inclusive, and low-carbon development. The first pillar of the loan focuses on improving the fiscal framework and institutional infrastructure for addressing climate change challenges, including governance for the issuance of green bonds and quantification of fiscal risk in public-private partnerships. The second pillar focuses on low-carbon development and mitigating climate change to promote a green economic recovery. More specifically, it aims to do this by promoting private investment, fostering greater energy efficiency, supporting the development of voluntary carbon offset mechanisms, and encouraging sustainable forest management. Through this loan, the World hopes to identify projects eligible for financing through green bonds, broaden the reach of public services, increase investments in non-conventional, renewable electricity, and reduce forest loss.

Durable disclosure – US House Democrats do not want President Joe Biden’s administration to hold back in mandating the most stringent climate disclosure requirements for publicly traded companies. That call for action comes as Republicans on Capitol Hill are seeking to undermine administration efforts to tie emissions reductions to investing decisions. Eighty Democrats signed a letter dated Aug. 7 urging Securities and Exchange Commission Chair Gary Gensler to quickly finalise a “strong and durable” disclosure rule, which is likely to be finalised this fall. The Democrats said that they stand ready to defend the SEC against attacks from opponents who might seek to undermine the new mandates, either through litigation or legislation. (E&E News)

More pipeline debt – Trans Mountain Corporation was granted a new financing guarantee of up to C$3 bln by Canada’s federal government in light of growing costs for its pipeline expansion. In 2018, the company was acquired from Kinder Morgan by the Canadian federal government for C$4.5 bln in an effort to diversify the country’s oil buyers, but has seen delays and construction setbacks more than quadruple project costs to C$30.9 bln. This is the third lending guarantee provided by Export Development Canada this year to Trans Mountain, bringing the cumulative debt guarantee total to as much as C$6 bln for 2023 thus far. (Bloomberg)

EMEA

Italy for next generations? – Italy submitted on Monday a request to the European Commission for revising its recovery and resilience plan and adding a REPowerEU chapter, as part of the post-pandemic NextGeneration initiative. Prior to this step, Italy had submitted on July 11 a request to the Commission to modify a specific set of milestones and targets of its recovery and resilience plan, corresponding to 10 measures included in the 4th payment request. The Commission endorsed this targeted revision of Italy’s plan on July 28, so the Council of member states has the last word now. Italy’s proposed REPowerEU chapter includes the development of renewable energy, the boosting of green skills in both the public and private sector, the tackling of environmentally harmful subsidies, and the improvement of biomethane production. The allocation under the REPowerEU chapter in terms of new grants is €2.76 bln. Also on Monday, Politico reported that Rome is lobbying hard to stop Brussels from tightening pollution guidelines further, arguing that specific geographic and climate conditions — particularly in its northern, industrial regions — prevent it from meeting existing targets. 

Next frontier – Offshore wind in the UK could be on the cusp of a new chapter, according to reports by The Times that BP is considering building two offshore wind farms in British waters without government subsidy contracts. The Morgan and Mona projects in the Irish Sea would boast up to 214 turbines about 20 miles off the coast of north Wales and northwest England and together could power 3.4 mln homes. The newspaper report was based on comments by Bernard Looney, the energy group’s chief executive, who said that the projects could start to be built as soon as ‘late next year’ and may not seek government contracts to secure their revenues. However, industry experts pointed out that BP has yet to apply for planning consent for the projects and so his comments may be premature.

No EU green light needed – The German economy ministry has published a new regulation that will enable federal government and the country’s states to financially support the production of key technologies needed for the energy transition without the need to get an individual EU green light based on state aid rules. The regulation has been approved by the European Commission as part of its “Temporary Crisis and Transition Framework,” which makes it possible for government to support investments in sectors and technologies that are key for the transition to a climate-neutral economy, the ministry said in a press release.

Conservative thinking – The reform of an energy consumption label for passenger cars in Germany underestimates the projected CO2 price of transport fuels like diesel and petrol, consumer protection advocates told business daily Handelsblatt. The draft’s assumptions are based on Germany’s national carbon price for transport fuels, which is set to rise until the end of 2026. According to current plans, it will then amount to €55-65/tCO2. The piece argues that it is still unclear how high the CO2 price will be after this point. From 2027 at the latest, the transport sector will also be covered by the EU ETS, and the German system must be aligned with this price, it adds. (Clean Energy Wire)

ASIA PACIFIC

Frontline finance – Tuvalu Minister of Finance Seve Paeniu has launched discussions with civil society about the challenges faced by frontline communities in the Pacific accessing climate finance, ahead of the Pacific Forum Economic Ministers meeting in Suva. A press release from 350.org said that Pacific communities face the brunt of the climate crisis and are struggling to access resources for disaster recovery, adaptation, and energy security. This week in Kioa, Fiji, frontline communities will formalise the Kato Pacific Community Climate Fund informed by the practical realities and difficulties of trying to access climate finance. Paeniu said some of the obstacles communities face accessing existing funds include coverage duplication leading to competition, as well as complex access rules and procedures that often come with strings attached. The Kato fund will avoid representing the same objectives and scope as other funds, to avoid similar issues, the minister said.

First of its kind – Beijing is likely to see the first transaction of locally issued carbon credits from a hydrogen-based project around September, Xinhua reports. The project, based on a new methodology under the Chinese capital’s offset scheme, was launched in Beijing’s Daxing District last week and is estimated to be capable of reducing 24,000 tonnes of carbon emissions annually. The developer of the initiative, Zhonghe Xinxing Energy Technology Research Institute, has teamed up with 16 hydrogen enterprises for the generation of offsets, according to Xinhua.

Climate finance alliance – China Beijing Green Exchange, which hosts one of the country’s pilot carbon markets, has launched the China Climate Investment and Financing Alliance in cooperation with regional governments, financial institutions and major companies in the energy sector, it announced over the weekend. The alliance aims to actively expand financing channels for companies and tackle problems such as information asymmetry and mismatch between funds and projects, said Wang Naixiang, chairman of the Beijing bourse.

VOLUNTARY

Board games – Carbon credit standard developer and manager Verra on Monday announced the addition of three new board members. Julie McLaughlin is Managing Director with Alvarez & Marsal’s Energy practice, where she specialises in energy transition. Anshari Rahman is Director of Policy and Analytics at GenZero, a Temasek-owned investment platform company focused on global decarbonisation. He leads the development and execution of the firm’s strategic direction on policy, regulations, standards, and carbon pricing matters. Mandy Rambharos serves as Vice President for Global Climate Cooperation at the Environmental Defense Fund (EDF), where she leads EDF’s strategy to promote well-designed carbon pricing and markets that support the transformation toward a low-emissions future.

SCIENCE & TECH

Fusion finding – US scientists have achieved net energy gain in a fusion reaction for the second time since December, the Lawrence Livermore National Laboratory said on Sunday. Scientists at the California-based lab repeated the fusion ignition breakthrough in an experiment in the National Ignition Facility (NIF) on July 30 that produced a higher energy yield than in December, a Lawrence Livermore spokesperson said. Final results are still being analysed, the spokesperson added. Lawrence Livermore achieved a net energy gain in a fusion experiment using lasers on Dec. 5, 2022. The scientists focused a laser on a target of fuel to fuse two light atoms into a denser one, releasing the energy. (Reuters)

AND FINALLY…

Emission eruption – Humans are now emitting CO2 some 200 times faster than supervolcanic eruptions that caused Earth’s most severe mass extinctions, according to research by the Curtin’s School of Earth and Planetary Sciences. The researchers looked at the amount and rate of CO2 emitted by the Kerguelen large volcanic province in the southern Indian Ocean, which led to a comparatively small dent in our environmental and biological cycle, and compared these calculations to the CO2 released by other deadly supervolcanoes. Their results confirmed that the rate at which humankind currently emits CO2 is incompatible with Earth’s natural mechanisms to store CO2 in the atmosphere and oceans over hundreds of thousands of years. (CleanTechnica)

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