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WEEKEND READING
FEATURE: The latest, little known front in the energy transition
Native hydrogen has become the latest buzzword in the great global hydrogen chase, potentially offering a far cheaper option than ‘green’ hydrogen while offering the same decarbonisation benefits, and does not require carbon sequestration or offsetting like the blue version does.
FEATURE: Complexity of Australia soil carbon calls for software, scale, and long-term thinking
Australia’s farmland holds great potential for generating Australian Carbon Credit Units (ACCUs), but scaling up the market will require technologies capable of doing complex soil carbon measurement and auditing software to track the increase in soil carbon stock, in addition to willingness from farmers to change their management practices.
EMEA
ANALYSIS: EU doubles down on CCUS as UK’s strategy falters at funding stage
As the EU starts defining a strategy to kickstart its carbon capture, utilisation and storage (CCUS) industry, the UK government’s uncertainty over funding is leading to a loss of momentum in one of the countries that first embraced it.
Countries call for EU-wide CO2 transport network to be part of bloc’s CCUS strategy
A number of EU nations have called for the European Commission to develop a shared CO2 transport network as part of the bloc’s industrial carbon management strategy initiative, though NGOs contest whether such infrastructure is really needed.
Euro Markets: EUAs post marginal weekly drop as market begins to adjust to new supply
Carbon prices were little changed as the new month began on Friday, posting a 0.1% five-day decline as the market started to absorb the impact of higher auction supply, while energy markets were also relatively steady amid healthy gas supplies, even as the prospect of strike action at Australian LNG plants grew.
Carbon analyst significantly downgrades mid-term EUA price outlook
A veteran carbon analyst has revised down their forecast for EUA prices out to 2030 in a report exclusively seen by Carbon Pulse, and is now anticipating a much slower growth trajectory out to €200 by the end of the decade.
Exchange-traded product slashes EUA holdings by 27%
One of the largest exchange-traded products that contains EUAs has slashed its holdings in EU carbon by 27% to their lowest level since the end of last year, according to the investment firm’s website.
Cameroon mulls introducing carbon tax, local media reports
Cameroon’s President Paul Biya has hinted at the possibility of introducing a carbon tax as part of the country’s 2024 Finance Act, local media reported this week.
AMERICAS
Paraguay senator announces replacement carbon credit regulation bill
A Paraguayan senator on Friday introduced a carbon credit bill that he says has greater support than previous legislation that would regulate the voluntary market, and will ultimately replace an older proposal.
Washington EITE industries receive first batch of no-cost carbon allowances
Washington state announced on Friday the first allotment of allowances to emissions-intensive and trade-exposed (EITE) industries for use in the cap-and-trade programme’s first compliance period.
Alberta TIER market credit prices continue to stagnate through August
Spot carbon credit prices under the Alberta Technology Innovation and Emissions Reduction (TIER) programme slightly dropped below July levels with a continued slowdown in activity, according to a report published Friday.
Emitters rescind, speculators build CCA net length following Q3 auction results publication
Compliance entities saw their CCA net length fall this week after the August WCI auction results were published and amid the September contract expiry, while financial players moved in the opposite direction, according to US Commodity Futures Trading Commission data published Friday.
*Programming note: due to the Labour Day holiday on Monday, the RGGI Market report will be incorporated in Tuesday’s forthcoming Q3 RGGI auction preview*
ASIA PACIFIC
CN Markets: CEAs come off peak price level, but volume picks up
China’s national carbon markets saw a surge in trading volume over the past week despite a decrease in spot prices, with analysts expecting the recently announced rules on allowance vintage to have a limited impact on near-term sentiment.
NZ seafood company to roll out NZ$10 mln forest offset project
One of the largest seafood companies in New Zealand is investing in a forest-based carbon offset programme supported by Maori land owners, as part of its sustainability goals.
VOLUNTARY
Major US agtech startup reportedly sees company value plummet by around 90% amid wider voluntary market slump
A major US-headquartered agriculture technology startup focused on voluntary carbon has seen its valuation plummet by some 90% from at least $2-3 billion just a few years ago, according to reports.
INTERNATIONAL
UN completes technical check on REDD emissions data for vast areas in two nations
The UN has completed technical checks on the emissions reductions calculations of two major tropical forest nations, raising the prospect that the countries will attempt to monetise the results despite the vintage periods occurring before a 2021 cut-off for inclusion under fiercely debated Paris Agreement provisions.
BIODIVERSITY (FREE TO READ)
INTERVIEW: Companies should act now to avoid nature disclosure iceberg dead ahead, says consultancy boss
Corporates and financial institutions can create sizeable market opportunities by being first-movers in addressing the Taskforce on Nature-related Financial Disclosures framework, said the director of a leading consultancy, ahead of the nature disclosure recommendations formal launch in September.
Biodiversity funds are surging, European watchdog has them sighted
A European financial watchdog has highlighted that there is growing interest in biodiversity but is cautious about potential greenwashing within the market.
UNEP report tracks the billions in marine habitat restoration funding
A new report from UNEP’s World Conservation Monitoring Centre has tracked funding from hundreds of projects that boost marine biodiversity in critical habitats and found private sector funding to be minuscule.
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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
Dodging questions – The UAE plans to counter and minimise criticism of the country’s human rights abuses at COP28, according to an investigation from the Centre for Climate Reporting, shared with the New York Times. Leaked audio of a meeting between senior UAE officials and the country’s summit team offers a rare insight into how the government hopes to limit scrutiny at the summit, the report suggests. Among the revelations are plans to dodge questions on issues such as LGBTQ+ and labour rights, which in their view have no connection to climate change, to ensure COP28 is not used as a “free pass to throw everything at us”.
BOGA bonus – Colombia, the third largest oil producer in Latin America, has joined the Beyond Oil & Gas Alliance, the coalition that works to facilitate the managed phaseout of oil and gas production. Colombia’s move signals that producer countries can engage on the issue of phaseout, ahead of the important upcoming climate negotiations, according to Dan Jorgensen, climate minister of BOGA co-chair nation Denmark in a statement. Since its launch, the Alliance has now grown to 20 members and ‘friends’.
EMEA
Fossil fuel phase-out – EU countries are preparing to advocate for a global deal to phase out fossil fuels at the UN COP28 climate summit, which kicks off in Dubai this November, according to a draft of the EU’s negotiating position, as reported by Reuters. Countries have never before committed in UN negotiations to putting a stop to burning fossil fuels, the main cause of climate change, and expect to meet resistance from economies reliant in income from oil and gas who would prefer to focus on developing CCS technologies. A proposal on phasing out CO2-emitting fossil fuels won backing from over 80 countries at last year’s UN climate summit, but Saudi Arabia and other oil and gas-rich nations opposed it.
CBAM webinars – The European Commission is hosting six online webinars to cover key features of the Carbon Border Adjustment Mechanism (CBAM) for different sectors. The webinar dates and times are as follows: cement on Sep. 15, from 10:00-11:30 CET, aluminum on Sep. 21, from 14:00-15:30 CET, fertilisers on Sep. 26, from 11:30-13:00 CET, electricity on Sep. 28, from 09:30-11:00 CET, hydrogen on Oct. 3, from 15:30-17:00 CET, and iron and steel on Oct. 5, from 16:00-17:30 CET. A seventh webinar for National Competent Authorities will also be organised, with the date communicated at a later stage. Further details and to register for all webinars via this link.
“CO2 neutral” is “CO2 neutral” etc – The European Commission is considering watering down a carbon neutrality requirement for eFuels to allow combustion engine cars to be sold after 2035, reports EurActiv. The draft implementing act, however, is not yet published and is currently being discussed between the different DGs (departments). Internal discussions look at the nature of the “CO2 neutral” eFuels to be allowed under this framework. Euractiv wrote that a working group meeting is expected for early October. Meanwhile, NGOs like T&E asked for a separate framework to certify “CO2 neutral” renewable fuels of non-biological origin (RFNBOs), which would have to be produced with 100% renewable electricity (all additional). A second point of discussion is related to the strengthening of the type-approval process. As for now, T&E’s Lucien Mathieu told Carbon Pulse that “it’s very common for DGs to seek consultation and comments from other DGs”. In this case, DG Clima didn’t agree with DG Grow, out of fear that the move will water down the EU’s climate ambition. This doesn’t necessarily mean there is a dispute, Mathieu explained. Read our recap on the Fit for 55 package, and how the cars issue put it at risk earlier this year.
Peak power payment – UK households will be paid to reduce their power consumption during peak hours for the second year in a row, under the voluntary scheme offered by National Grid known as the demand flexibility service, reports the FT. Participating in the scheme will help to reduce strain on the network and curb the risk of blackouts, which has heightened in the wake of Russia’s invasion of Ukraine and the subsequent disruption of gas supplies, coupled with problems with nuclear power stations in France. These factors are less acute this year but National Grid wishes to retain the scheme to help “build further resilience” in the network and also to encourage consumers to become more flexible about their electricity usage as the grid becomes more reliant on dispersed power plants such as wind and solar. Last year, some 1.6 mln households and businesses took part in the scheme, which was only activated twice when power supplies were forecast to be low, although National Grid also ran 20 test events.
In need of modernisation – The UK is reviewing its membership of the Energy Charter treaty, which historically provided protections for investors in fossil fuels, and much will depend on whether member states reach an agreement on modernised terms by Nov. 23. The UK has played a key role in negotiating an updated treaty, built more on promoting clean and affordable energy, such as CCUS, hydrogen and renewables, however the departure of several member states led to an impasse on modernisation and so UK ministers are considering taking action to safeguard the UK’s green transition.
REPowerEU – Croatia, Hungary and Poland joined the list of member states asking the EU Commission to include new chapters, specifically focused on energy, in their recovery and resilience plans. The Croatian chapter covers measures related to energy security, uptake of renewables, energy efficiency of buildings, transport and fossil-free hydrogen, for a modified plan worth €10.2 bln in total. The Hungarian request includes incentives to expand energy storage capacity and a commitment to substantially boost the country’s energy system’s ability to integrate renewables, for a modified plan worth €10.4 bln. Finally, Poland’s request to modify its plan is based on the need to factor in high inflation experienced in 2022 and 2023, as well as the impossibility to deliver certain measures within the originally envisaged timeline due to objective circumstances – for which the country is asking for almost €60 bln in total. The Commission now has up to two months to assess whether the modified plans still fulfil all the assessment criteria.
Schiphol cap – The Dutch government is set to press ahead with plans to cap the number of flights at Amsterdam’s Schiphol Airport next year. Airlines that use Schiphol including Air France-KLM have sued to prevent a flight cap at Schiphol, one of Europe’s busiest airports. The cap would see flights limited to just over 450,000 starting in Nov. 2024, below 2019 levels around 500,000. Airlines have warned this will harm business and violate previous agreements. The government’s main reason for the cap is to address noise pollution, but it has also cited the need to reduce GHGs, as well as recurring logistical problems at the airport. A transport ministry spokesperson told Reuters that some details of the plan had not been finalised. The proposal now requires approval from the European Commission within the next three months. Airlines opposed to the ban are appealing to the Dutch Supreme Court after losing a legal challenge in July. The announcement was made by the Netherlands’ caretaker government and comes ahead of national elections in November.
VOLUNTARY
Kenya presses ahead – Kenya’s president William Ruto has assented to the Climate Change (Amendment) Bill (National Assembly Bill No. 42 of 2023), which includes ensuring local communities get a larger share of the profits from carbon credit projects. Communities hosting carbon credit projects would receive 40% of the profit generated from land-based offset projects in the country. However, projects in water bodies, including mangrove projects, will cede 25% of profits to local communities. The Bill amends the Climate Change Act, 2016, providing for the regulation of the carbon markets besides enhancing response to climate change. It provides transactions in carbon trading as carried out under the Act reduces greenhouse gas emissions. The Cabinet Secretary, it adds, can enter into a bilateral or multilateral agreement to trade carbon for emission reductions and removals with the approval of the Cabinet.
Faltering confidence – Gucci has stopped buying carbon offsets from South Pole, according to an article by Reuters about falling demand in the voluntary carbon markets as companies withdraw on concern about the credibility of forest protection projects. The fashion house deleted claims on its website earlier this year that it is entirely carbon neutral and is said to be in the process of reviewing its climate strategy for the most positive overall impact. South Pole CEO Renat Heuberger told Reuters that the company had followed the approved methodology for the project from which Gucci had been buying credits at all times. “There is no other way to do deforestation projects. You cannot know 10 years in advance what the deforestation rates will be,” he said.
AMERICAS
Forest foul – A federal judge in Oregon has found that a Trump-era rule change, which allowed for the logging of old growth forests in the Pacific Northwest, violates several laws, reports AP. The change revised a ban on the harvesting of trees 53 cm in diameter and instead emphasised a mixture of trees that provided protection for trees older than 150 years and favoured fire-resistant species. The rule change affected 2.8 mln hectares in Oregon and Washington. After a lawsuit was filed by multiple environmental groups, the judge found that the change violated the National Environmental Policy Act, the National Forest Management Act, and the Endangered Species Act, recommending that the Forest Service should be required to prepare a full environmental impact statement on the change.
A small piece of the puzzle – Minnesota regulators voted Thursday to proceed with an environmental review for part of a $5.5 bln, 3,200-km CO2 pipeline network across five states, proposed by Summit Carbon Solutions. The infrastructure would carry CO2 from more than 30 Midwest ethanol plants to a permanent sequestration site in central North Dakota. So far, regulators in North Dakota have denied the company’s applications for permits, with Iowa regulators pausing their state’s permit hearing, pending Summit’s bid for reconsideration. The project has also encountered resistance from the public, with landowners in South Dakota and rural advocacy groups in Minnesota expressing vocal concern for its environmental impacts and property rights. (AP)
CA clean electricity – California Governor Gavin Newsom and state legislature reached a deal Thursday night to create more renewable energy projects, putting the state on track to meet its 2045 goal of 100% clean electricity. Highlights include proposals for a new central buyer to procure clean electricity for the state’s grid, accelerated permitting for electric transmission projects, and measures to increase grid reliability during extreme weather. The changes are outlined as new amendments to AB-1373. (Bloomberg Law)
ASIA PACIFIC
Vietnam and JETP – Vietnam’s deputy prime minister Tran Hong Ha has signed into action a scheme to implement the Just Energy Transition Plan (JETP) in the country. This takes in a range of actions from improving Vietnam’s institutions and policies to upgrading power transmission infrastructure. Vietnam was included in the JETP last year alongside Indonesia.
Master plan – Climate Governance Malaysia released a New Industrial Master Plan 2030 (NIMP 2030) on Friday to affirm their commitment to international agreements and conventions related to sustainability as the South Asian country aspires to achieve net zero carbon emissions target by 2050. Under the plan, all economic sectors of the country will reconfigure their strategies to ensure Malaysia achieves its goals.
In a (hot)spot – According to a report released by Organized Crime and Corruption Reporting Project (OCCRP), Indian mining and oil giant Vedanta successfully ran a covert lobbying campaign during the pandemic to weaken India’s key environmental regulations. The changes were allegedly approved and implemented by the federal government without public consultation. In one case, Vedanta led a push to ensure mining companies could produce up to 50% more without new environmental approvals. The report alleged that the current central government has been increasingly cracking down on environmentalists in support of mining and oil behemoths.
INVESTMENT
Finding Value – Shell Ventures has invested in Value Group to accelerate the company’s carbon capture, utilisation, and storage (CCUS) strategy. Value Group comprises Value Maritime, known for its Filtree System that filters sulphur and particulates from vessel emissions, and Value Carbon, which focuses on managing the carbon value chain efficiently. The investment will support a range of certified carbon services, including capture, transportation, and storage. Value Group aims to speed up the decarbonisation process in the shipping sector, which has been difficult to abate. Shell’s investment aligns with its broader strategy of supporting technologies and business models that lower emissions. Both companies view this as an important milestone in reducing shipping emissions. (Bunkerspot)
AND FINALLY…
A whale of a claim – The Environmental Investigation Agency (EIA) has refuted claims by Icelandic whaler Kristjan Loftsson that hunting endangered fin whales will aid Iceland in achieving its climate objectives. Loftsson had argued that the CO2 exhaled by these whales and their excretions’ impact on algae growth had a detrimental climate effect. However, the EIA highlights the importance of whales in capturing atmospheric carbon, thus benefiting the oceanic ecosystem. An official report detailing the cruel methods of hunting had earlier led to a temporary suspension of whaling by the Icelandic Government, but Loftsson is lobbying to resume activities soon. The EIA also emphasises the carbon footprint resulting from whaling operations, such as the emissions from storing, shipping, and refrigeration processes. It underscores that reviving whale populations could help in sequestering significant amounts of carbon. The EIA is urging the Icelandic Government to permanently halt all commercial whaling activities.
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