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TOP STORY

ANALYSIS: One year in, the US IRA climate law has triggered a global green industry race

One year has passed since the launch of the subsidy-laded Inflation Reduction Act (IRA) in the US, with the legislation igniting domestic cleantech development but also sparking a green investment race in Europe and worldwide.

EMEA

ANALYSIS: Hedging offers EUAs near-term support but weak demand signals to keep price pressure on

An uptick in the forward hedging of EU carbon allowances is likely to have accounted for some of the recent strength in benchmark EUA prices, but analysts point to a bearish remainder of 2023 as power and industrial emissions continue to wane and coal-to-gas fuel switching is also likely to weaken demand.

Euro Markets: EUAs set new 2-week high as data shows rise in funds’ net short positioning

European carbon prices climbed to another August high on Wednesday as positioning data showed speculative investors had increased their net short position last week, while energy prices were modestly lower on profit taking after Tuesday’s sharp increases.

EU greenhouse gas output fell nearly 3% in Q1, with ETS-covered sectors diverging in their rate of decrease

Greenhouse gas (GHG) emissions from sectors covered by the EU ETS showed varied signs of decrease in the first months of 2023 as total emissions across the 27-nation bloc as a whole fell by nearly 3% year-on-year, according to EU data released on Wednesday.

UK backs AI for industrial decarbonisation with funding for innovation and R&D

The UK government is investing several million pounds in accelerating the use of artificial intelligence (AI) to reduce the carbon footprint of industry, with funding for AI projects dedicated to improving renewable energy generation and support for a UK-based research centre focused on using AI for decarbonisation.

AMERICAS

First-ever Washington carbon reserve auction sells out both allowance tiers

The first-ever Allowance Price Containment Reserve sale in Washington state’s WCI-modelled cap-and-trade programme sold all permits in both tiers, according to results published Wednesday.

California identifies fall release for draft LCFS rulemaking package

California regulator ARB on Wednesday gave further insight regarding the start of its formal rulemaking to amend the Low Carbon Fuel Standard (LCFS), with opportunities for public comment in advance of the release of the draft package.

Oil giant joins startup to drive down green hydrogen costs

To drive down the cost of producing clean hydrogen, one of the world’s largest independent oil and gas companies has partnered with a Milwaukee-based startup and plans to use water vapour from industrial processes.

ASIA PACIFIC

NZ parliament debating industrial allocation, ETS late payment penalty legislation

New Zealand is on the cusp of passing legislation that would update industrial allocation settings as well as late payment penalties for ETS participants.

Fund launches to earn ACCUs from environmental plantings

A new fund is being established to earn Australian Carbon Credit Units (ACCUs) from premium environmental plantings (EP), aiming to generate returns of 12-14% per annum.

Australian coal company expansion plans could release 1.2 Mt of methane emissions by 2050 – report

The expansion plans of an Australian coal company could create the equivalent of 100 MtCO2e of GHG emissions from proposed and existing mines, according to new analysis published Thursday.

State government order sparks concerns India’s new forestry act will bring deforestation, despite U-turn

There are growing concerns in India that a controversial new forestry act adopted last month will drive deforestation after a state government ordered that a specific forest category was no longer covered by law, even if that order has been put on hold temporarily.

VOLUNTARY

Governments still cautious and uncertain on Article 6 and the voluntary carbon market, say experts

A lack of national capacity and significant regulatory uncertainty makes for a patchwork of rules between Article 6 and the voluntary carbon market (VCM), industry experts said on Wednesday.

Data firm outlines process for mapping out forestry levels for Verra’s new consolidated REDD methodology

A UK-based digital MRV company has underlined the double-layered process of data gathering to be used to establish deforestation baselines as part of Verra’s in-development consolidated methodology for the REDD avoided deforestation sector.

Green fertiliser company eyes future carbon credit sales via its South American project

A London-listed fertiliser and green hydrogen company is targeting carbon credits as a major revenue source for its South American upcoming project.

INTERNATIONAL

Australia, California sign wide ranging climate cooperation agreement

Australia and the US state of California have signed an MoU to work together to combat climate change, focussing on clean energy and tech, trade, and nature-based solutions.

Oil, gas, coal companies’ production, carbon output not in line with Paris targets -study

Oil, gas, and coal producers have vastly overestimated the efficacy of their climate policies, and will fail to do their share to meet Paris climate targets even when they have company net-zero policies in place, according to a new study that looked at close to 150 companies.

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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

EMEA

Green light for Dutch CCS project – A Dutch court granted approval for a carbon capture and storage project that had been stalled for months due to a court dispute on nitrogen emissions. Following Wednesday’s decision, the developers said the Council of State “has ruled positively on the ecological assessment of the Porthos Project” and that the court “concluded that the ecological study showed that Porthos’s nitrogen deposition does not have a significant impact on nearby natural areas”. The CCS project is slated to come online by 2026. The project could store approximately 2.5 mln tonnes of CO2 per year for 15 years.

UK stutters – Growth in the UK’s low-carbon power generating capacity is set to move at a slower pace than other large global economies for the remainder of the decade, according to a new study by consultancy Oxford Economics. The research found that electricity output from renewables and nuclear in the UK is set to increase by an average 2.9% per year between 2023 and 2030, compared to a growth rate of 10.6% for India, 7.2% for China, 6.4% for the US, and 5.8% for Germany. Coinciding with the one-year anniversary of the $369 bln Inflation Reduction Act signed into law in the US, there are concerns by industry that UK renewables may be left behind as other regions, including China and the EU, respond with similar green investment programmes.

Biochar build – Finnish startup Carbo Culture has opened one of Europe’s largest biochar plants, said to be able to remove 3,000 tonnes of CO2 from the atmosphere annually, located just a short drive from Helsinki, reports Sifted. Biochar is produced by heating up dead tree or crop biomass, preventing the release of carbon when plant matter decomposes. Interest in biochar for its carbon sequestration potential is growing, particularly from the VCM with companies looking to offset their emissions. Europe is expected to host 180 biochar production plants by the end of the year, and is investing in new facilities such as this one from Carbo Culture, which was funded by a €2.2 mln grant from the European Innovation Council.

ASIA PACIFIC

Approval obtained – Taiwan’s state-owned refiner CPC has received approval from the Australian government to acquire four sub-basin permits in oilfields off Western Australia from Carnarvon Energy, it announced Wednesday. OPIC Australia, a subsidiary of CPC, has acquired a 10% interest in the Dorado oil field from Carnarvon, which will receive US$146 mln in total for the transaction, Carnarvon said in another statement. The Dorado oil field is expected to become operational by 2027, with a daily production capacity of up to 80,000 barrels of crude oil, according to CPC.

More participants – Hong Kong’s main bourse HKEX has seen more participants on Core Climate, an offset trading platform that offers credits from international projects, during the first half of the year, it said in a release for H1 2023 interim results. As of  June 2023, the number of Core Climate participants had increased to more than 60, tripling the number of participants at the initial launch in October 2022, HKEX said, without disclosing any further trading details.

Cooler city – The government of Seoul plans to expand the size of forested areas to make the air in the metropolis cooler, creating ‘wind paths’ consisting of trees that connect the mountains outside of the capital to the city’s inner regions dotted with buildings, the Korea Times reports. The government completed the first phase of the project in 2021 with over 540,000 trees planted in six districts, and aims to introduce new trees in 11 city districts amounting to 7.3 hectares during the second phase, with a total budget of around 10 bln won ($7.4 mln), according to the report.

New unit – Singapore-based fintech MVGX Holdings has established a subsidiary to provide carbon Software-as-a-Service (SaaS) solutions, it announced Wednesday. The new unit, named MVGX Tech, will offer a holistic suite of products and software powered by blockchain-enabled technologies, with a focus on carbon measurement, reporting, and verification (MRV), carbon credit development and issuance as well as credit listing and registry, the announcement said.

Biofuel – Malaysia’s palm oil board and state oil firm Petronas signed a memorandum of understanding (MoU) on August 14th to study the use of used cooking oil and palm oil waste as sustainable aviation fuel, Reuters reports. The aim of the agreement is to explore the potential of palm-based products and wastes, such as used cooking oil and palm oil mill effluent, as the main raw materials for local bio-refineries to produce sustainable aviation fuel.

Towards net zero – Adani Green Energy Ltd (AGEL) is targeting to set up 45 GW of renewable energy capacity by 2030, as it looks to cut emissions and help India meet its carbon neutrality target. The company currently has 8,316 MW of operational renewable energy capacity and another 12,118 MW either nearing construction or under execution, ETEnergyworld reports. The target is to take this 20,434 MW (operational plus under execution projects) to 45,000 MW or 45 GW by 2030, they said, adding AGEL is looking to build roughly 3 GW of capacity to generate electricity from solar and wind energy every year. The capacity AGEL is building is about 10% of the renewable energy capacity that India is targeting by 2030 in the transition towards achieving a net zero carbon emission target by 2070.

AMERICAS

Back to business – CEO of Canadian oilsands company Suncor Rich Kruger said the firm needs to return to its roots and focus on the business of low-cost production and profits rather than the energy transition. Kruger, former CEO of ExxonMobil’s Canadian subsidiary Imperial Oil, was recently lured out of retirement to lead restructuring at Suncor. Suncor’s chief sustainability officer Arlene Strom will depart from her role at the end of the year. Her position will not be filled, with sustainability responsibilities rolled into the duties of a new senior vice-president. (Globe and Mail) 

Electricity from biomass – Nine Democrats in the US House of Representatives sent a letter to the EPA on Monday, urging the agency to implement renewable identification numbers for electricity (e-RINs), after it was left out of a recent update to the Renewable Fuel Standard programme. e-RINs would allow generators of renewable electricity from biomass to profit from credits sold to petroleum-based fuel manufacturers. The letter highlights how e-RINS could result in “meaningful greenhouse gas emissions reductions across the transportation industry” and “incentivise investments in new biogas capture and low carbon electricity production”. (Waste Dive) 

Brazilian blockchain – Carbon credit exchange B4 launched in Brazil, with aims of moving upwards of R$12 bln ($2.4 bln) on the platform. The company claims that demand is ten times higher than this value, with interest from large companies and industries in the US, Saudi Arabia, and Japan. The exchange aims to list tokenised carbon credits using blockchain technology. (Estadao)  

VOLUNTARY

Piloting carbon removal – Montreal-based carbon project developer Deep Sky has partnered with XPRIZE, a California non-profit most notable for its $100 mln XPRIZE for Carbon Removal, funded by the Musk Foundation. The partnership will allow XPRIZE Carbon Removal teams, regardless of being named a finalist or not, to pilot their carbon dioxide removal solutions at Deep Sky’s commercialisation project, alongside prototyping and licensing deals each valued at at least $1 mln. 

AVIATION

Tut-tut – Airlines have again been blasted for offering frequent flyer incentives to customers, thereby encouraging carbon-intensive travel behaviours, reports BusinessGreen.  The average air passenger would have to travel on enough flights to emit GHG emissions of between 5.6 and 92.8 tonnes each year in order qualify for frequent flyer membership programmes offered by airlines, which is as much as 112 times higher than the carbon footprint of a typical person who travels by airplane, according to research by climate charity Possible. Lifetime membership status of a frequent flyer programme – such as those offered by British Airways and Virgin Atlantic – can require emitting more than 1,800 tonnes of GHG per person, some 34 times more CO2 than the lifetime per capita share of the remaining carbon budget to limit climate change to 1.5 C, the report found.

SCIENCE & TECH

AND FINALLY…

Winter heatwave – Temperatures in parts of Chile and northern Argentina have soared 20 C above average in the past few weeks, despite it being halfway through the countries’ winter season. A key driver of the intense heat is a persistent area of high pressure, also known as an anticyclone, which has lingered to the east of the Andes. While El Nino made this heatwave more likely, climate change is to blame for making it much worse as the distribution of possible temperatures continues to shift higher and higher. (Climate Home News) 

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