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TOP STORY

Much more climate action needed on all fronts, says UN after taking stock 

While the 2015 Paris Agreement has inspired significant progress in response to climate change, the world is not on track to meet the pact’s long-term goals, according to the UN’s first-ever stocktake of global efforts to tackle the crisis, released Friday.

WEEKEND READING

PREVIEW: Green development, climate action to be G20 summit’s priorities, says talks’ sherpa

Green development and climate finance will be one of the priorities of this weekend’s G20 leaders’ summit, according to G20 Sherpa Amitabh Kant ahead of the two-day meeting in New Delhi this weekend despite climate change goals emerging as one of the major stumbling blocks.

PREVIEW: Observers welcome progress made on key texts ahead of crucial UN carbon market meeting

Stakeholders have welcomed the significant progress, notably on draft recommendations for removals, made by the UN body responsible for shaping the carbon crediting mechanism under Article 6 of the Paris Agreement ahead of a crunch meeting next week, while also highlighting the pressure of using the limited remaining time to finalise key aspects of the guidance, ahead of year-end negotiations at COP28.

AMERICAS

RGGI Q3 auction settles near all-time record, breaking bearish trend of sub-$13 clears

The Q3 RGGI cap-and-trade auction cleared just shy of its all-time record settlement and in-line with broad market expectations near the secondary market values, although compliance participation remained subdued, according to results published Friday.

California opts for 30% LCFS reduction target by 2030, alongside step change and auto-acceleration mechanism

California regulator ARB’s forthcoming Low Carbon Fuel Standard (LCFS) rulemaking package will include a strengthening in the scheme’s carbon intensity (CI) targets alongside other measures to tighten the programme and phase out avoided methane crediting pathways, the agency revealed Friday.

LCFS Market: California prices wane to 6-wk low before state reveals more ambitious CI benchmarks

California Low Carbon Fuel Standard (LCFS) values slid on Friday to levels not seen since late July as market participants reported compliance entities were keen to sit back, though they spiked late in the day after the state published a document detailing its forthcoming rulemaking to strengthen the programme’s carbon intensity (CI) benchmarks.

Second Washington reserve carbon auction announced for fall, following record-high Q3 clearing price

The Washington Department of Ecology (ECY) will offer allowances from its Allowance Price Containment Reserve (APCR) for sale at one fixed-price tier this fall, following a Q3 settlement price which triggered the second-ever reserve auction, according to a government notice published Friday.

Emitters build, financial participants erode CCA and RGA net length

Compliance entities boosted their net length in the California Carbon Allowance (CCA) and RGGI Allowance (RGA) markets over the past week, while speculators pared back their holdings in both North American programmes, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

Brazilian bank expects to generate 60 mln carbon credits over 30 years

A major Brazilian financial services company announced on Thursday it expects its current suite of carbon projects to produce 60 million credits over the next three decades, not counting future investments in the sector.

VOLUNTARY

Shell publicly backs nature-based voluntary carbon credits, despite shelving targets

A senior leader at Shell on Friday appeared to reinforce the company’s support for purchasing nature-based carbon credits, despite the oil major having dropped public targets for its credit-buying programme.

EMEA

Euro Markets: EUAs drop to three-month low after prices break below technical supports

European carbon fell sharply on Friday, recording its seventh successive daily loss, as prices plunged to a three-month low after falling below a key technical support level, even while gas prices jumped amid the start of industrial action at two major LNG exporting facilities in Australia.

Electric cookstove projects need $30-50 carbon credit price, say developers

Electric cookstoves will need a carbon credit price of $30-50 to enable the fledgling market to thrive, according to one of the leading manufacturers and project developers in the market that is set to open a new factory in Nigeria next month and is planning to sell commercially in the future.

Indonesia speaks up for producing countries, who demand say in EU deforestation law

Indonesia is leading a group of 17 commodity-producing countries that are demanding to have a say in the EU’s anti-deforestation law that addresses imported products.

ASIA PACIFIC

CN Markets: CEA prices climb back above 70-yuan level, trading volume surges

China’s national carbon markets saw stable prices over the past week with a surge in trading volume as the ETS compliance deadline is approaching, with experts saying that recent policy change to introduce allowance vintages could shape corporate preferences.

ETS, climate fall by wayside in China national legislative plan

Legislation to underpin the national emissions trading scheme and other climate-related programmes have been placed in the “least important” category to deal with by Chinese officials, leaving the world’s biggest carbon market unfounded in law for another year as lawmakers prioritise energy security and other issues.

Major Japanese bank to provide clients offset creating and trading services

One of Japan’s largest banks has begun intermediary services for the creation and trading of domestically issued J-Credits by partnering with an offset provider, it announced Friday.

INTERNATIONAL

OECD climate group to discuss national carbon pricing approaches, advance stocktake work at fall dialogue meeting

An OECD committee assembled to help improve the impact of emissions reduction efforts around the world through enhanced multilateralism will meet this autumn to discuss countries’ various carbon pricing approaches, as part of an initiative to take stock of global efforts, examine their effectiveness, and prevent carbon leakage.

Leading commercial bank poised to invest in early-stage climate tech as net zero momentum picks up

A London-based commercial bank with significant Asia presence is growing its in-house expertise on climate tech in order to identify the early-stage companies with potential for the biggest climate and commercial impact, a conference was told this week.

SHIPPING

MOL, Shell marine unit to collaborate on shipping decarbonisation efforts

Mitsui OSK Lines (MOL) and Shell Marine Products Singapore have agreed to collaborate on maritime decarbonisation efforts, including advancing cleaner fuel-related measures that could have carbon market implications.

BIODIVERSITY (FREE TO READ)

Free biodiversity risk tool launched by Swiss tech firm

A Biodiversity Risk Assessment (BioRA) tool has been launched by technology company Ceven that is free to use at its basic level.

EU Taxonomy will not include fish farms for two years, think-tank exec predicts

Fish farming will not enter the EU’s list of sustainable investment activities for at least two to three years, an executive at non-profit think-tank Planet Tracker has predicted.

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• Senior Technical Specialist, REDD+ and Climate Policy, Fauna & Flora – Liberia
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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.

Flowcarbon Carbon Smart Summit – Sep. 19, New York City: Your chance to get up to speed on the fast-changing carbon markets at Climate Week NYC!  Join us for a full-day/in-person event featuring leading experts working at the forefront of the voluntary carbon markets — from project development and finance to key policy initiatives, corporate sustainability and technology trends. Speakers will include: Mark Patel (McKinsey), Kelley Kizzier (Bezos Earth Fund), Mark Kenber (VCMI), Alexia Kelly (High Tide), Judith Simon (Verra), David Antonioli, Zach Scott (Trafigura), Julie Bennett Bunuan (Truist) — and many more. Registration is free. Sign up today at carbonsmart.global

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

Problematic ports – Rising sea levels are jeopardising operations at ports around the world, meaning that some of them could become unusable by 2050, reports Reuters. Efforts to reduce the maritime sector’s carbon footprint and develop cleaner technology are vital for the resilience of the sector. Extreme weather is already negatively impacting ports across the globe, including a drought that is hampering operations in the Panama Canal, one of the world’s leading waterways. Of the world’s 3,800 ports, a third are located in a tropical band vulnerable to the most powerful effects of climate change, says The Global Maritime Trends 2050 report, commissioned by shipping services group Lloyd’s Register. The ports of Shanghai, Houston, Rotterdam, and Lazaro Cardenas (in Mexico), are particularly susceptible to rises in sea levels and could consider establishing food defense systems, the report says.

EMEA

Glaring gap – The UK government’s failure to account for rising supply chain costs for offshore wind meant that the latest renewables auction failed to attract any bids for the technology, with just 3.7 GW of new projects clearing in the fifth auction round for renewables, down from almost 11 GW that were awarded contracts in last year’s allocation round. The missing piece of the puzzle places further pressure on the government target to reach 50 GW of offshore wind by 2030. The failure to recognise the impacts of inflation in offshore wind supply chains risks costing UK billpayers as much as £1 bln a year in savings from offshore wind, according to analysis by the Energy and Climate Intelligence Unit. It forecasts that offshore wind will remain around a third cheaper than forecast wholesale prices set by gas of around £100/MWh for the middle of this decade. In contrast, Ireland secured 3 GW of offshore wind capacity at competitive prices in its recent auction as the Irish government allowed for supply chain inflation. Yet, offshore wind in Europe also faces hurdles. Germany awarded 7 GW of new offshore wind capacity in a July auction, with a competitive environment leading to uncapped negative bidding by the developers involved for each of the four sites, meaning that additional costs will be passed on to consumers. Developers were likely bidding on expectations that higher electricity demand will push up prices in the future. While Lithuania’s first offshore wind auction awarded 700 MW to a consortium of developers who also negatively bid, and were willing to pay €20 mln to develop the project. The situation of uncapped bidding in auctions cannot continue, says industry.

Mind the CBAM gap – Some 84% of British manufacturers do not know about new CBAM reporting requirements on exports of goods containing high-carbon steel, and selected other products, to the EU starting in October, according to a survey of more than 700 firms by the British Chamber of Commerce business association. “It is likely manufacturers that export will have to think about allocating dedicated staff resources just to deal with these reporting requirements,” said William Bain, BCC’s head of trade policy. Read Carbon Pulse’s take on the reporting requirements that kick in from October.

The final hurdle – After months of government infighting and an injunction by the country’s top court, the German parliament adopted a ban on new fossil heaters starting from 2028 at the latest. The law led to protests in the country, and threatened to rip apart the already fragile three-party German coalition government. Initially, the law would have enacted a clean cut from fossil fuel boilers as of 2024 and only new heaters running on at least 65% renewables would have been allowed. But the altered version, which has disappointed many climate NGO, will link boiler bans with municipal heat plans that are due to be revised by 2028. “We will achieve three-quarters of the original climate protection targets with this very ambitious law,” Robert Habeck, Germany’s minister for economic affairs and climate action, admitted. Uncertainty fuelled a spike in fossil heaters purchases across the country before the ban date of 2026 in large cities and 2028 in smaller towns. Though heat pump sales were also up 105% compared to the previous year. (Euractiv)

Bad data – A sharp decline in carmaking fuelled a downturn in German industry as production fell for the third consecutive month in July, intensifying pressure on Berlin to lift the economy out of the doldrums, the FT reports. The 0.8% month-on-month decline reported by Germany’s statistical office exceeded the 0.5% fall forecast by economists in a poll. It would have been even bigger without a rebound in energy and construction output in July. Production in Germany’s carmaking sector fell 9%.

Clubbing together – Germany is advocating for an agreement on a clear and concrete target for the global expansion of renewables among the G20, said a government official, ahead of the upcoming meeting of heads of state and government in New Delhi, India, from Sep. 9 – 10. Chancellor Olaf Scholz first showed his support for the idea during the Petersberg Climate Dialogue in Berlin in May. The G7 agreed on joint expansion targets amongst themselves in April. (Clean Energy Wire)

France wants more trees – The French ministry of the energy transition has put forward a methodology for a project to develop mangroves and swamp forests in French overseas departments and regions, as well as a project to increase tree cover in cities. The public consultations are now open for four weeks for feedback on the ministry page.

Green fares – Customers flying between Zurich and Geneva will from Thursday be obliged to offset their flight through Swiss Air’s Green Fares service, which includes a price component to neutralise passengers’ emissions. Some 20% of the CO2 of the domestic flights are offset via purchases of sustainable aviation fuel (SAF), while the remaining 80% come from corresponding contributions made to ‘high quality’ climate protection projects. Swiss Air has also introduced another tier of Green Fare that allows for a 50-50 split between SAF purchases and contributions to climate projects. The modified fares are only applicable to point-to-point travel between the two Swiss cities, and do not apply to any connecting flights. The scheme is reflective of neighbouring France’s mandatory offsetting requirement for domestic flights. However, domestic Swiss routes are covered by the country’s ETS, meaning carbon allowances must be surrendered against all civil aviation flights’ CO2 output, suggesting passengers could be charged twice for their emissions. This initiative is part of Swiss Air’s broader goal to become completely net-carbon-neutral by 2050. (Aviation24)

REPowerEU – Romania presented on Friday a request to change its recovery and resilience plan and to add a specific REPowerEU chapter. This will be aimed at increasing the production of green energy, improving the energy efficiency of buildings, and strengthening the skills of the main operator in green energy, for a total modified plan worth around €28 bln. The EU Commission will now evaluate this proposal, after which member states will be available for four weeks to approve it.

Ghana adjustments – Ghana is working on legislation to regulate the production of carbon credits at sites in the country, Lands and Natural Resources Minister Samuel Jinapor told Bloomberg on the sidelines of the inaugural Africa Climate Summit in Nairobi this week. “We need a proper framework, legislation policy to regulate the carbon market of Ghana,”Jinapor said. Read Carbon Pulse’s extensive reporting on Ghana’s pioneering framework that established levies on such carbon credit exports, having already developed key relationships with several buyer nations and big-hitting trading houses.

Naira assets – Carbon credit revenues cannot replace Nigeria’s oil revenues, Chinnan Maclean-Dikwal, vice chairman of the African Energy Council told business portal Nairametrics in an interview at this week’s Africa Climate Summit in Nairobi. “In 2021, Nigeria’s oil and gas sector earned $50 billion, that is no small feat, that is a lot of money. Carbon credits will not earn that kind of money, they cannot replace Nigeria’s oil revenues,” he said, noting the need for Nigeria to set up a carbon credit framework to allow it to augment such funding.

AMERICAS

Inflation impact – Bank of Canada Governor Tiff Macklem informed that 0.15% of the inflation in the country increase can be attributed to carbon tax, a relatively small effect on year-on-year inflation. CBC reports that carbon tax is thus responsible for one-twentieth of price increases, given that the year-over-year inflation is floating around 3%. Economist at the University of Calgary Trevor Tombe noted that while opponents are correct to point out that eliminating carbon taxes would drop prices, it is equally correct for supporters to note that the tax is not a driver of inflation. The direct and indirect effects of the tax — beyond its price of gasoline, natural gas, and other fossil fuels — inflate prices by 0.21% and 0.19% in Ontario and Alberta, respectively.

CCS permits backlog – The list of permit applications from potential carbon capture and storage (CCS) projects seeking to inject CO2 into rock formations for permanent storage has soared from 14 to 119 in a little more than a year, E&E reports. The EPA, however, has only approved two permits that have led to projects – both located at Archer-Daniels-Midland’s plant in Illinois – while two draft permits that are yet to be finalised have been issued for sites in Vigo Country, Indiana. Project developers, lawmakers, and carbon capture proponents are growing increasingly frustrated at the slow pace of permitting, and have suggested EPA hand off its Safe Drinking Water Act permitting authority to willing states in order to expedite the approval of the CCS permits. So far, the EPA has granted primacy – that is, primary permitting authority – for permanent carbon storage to North Dakota and Wyoming. The agency is also expected to announce its decision for Louisiana’s application for primacy later in the year.

Fruitful disclosure – Apple has come out in favour of a California climate risk disclosure act currently before the state Senate, a move which is being similarly considered by the White House, CNBC reported Friday. The Climate Corporate Data Accountability Act (SB-253) would require companies that operate in California and have more than $1 bln in revenue must disclose their Scope 1, 2, and 3 emissions. Apple’s director of state and local government affairs, Mike Foulkes, wrote a letter to California state senator Scott Wiener, who helped introduce the bill, to express his support.

Brazil benefits – The central Brazilian state of Tocantins received R$7 mln ($1.4 mln) from Mercuria Energy Trading in the first installment of payments for sales of REDD+ forestry carbon credits, which began in June, a state government press release said this week. Governor Wanderlei Barbosa said the funds would go towards improving the lives of the state’s citizens, especially Indigenous peoples. The deal is expected to generate 250 mln REDD credits over 10 years.

Solar water – The central Mexican state of Guanajuato has become the first in the country to register a renewable energy project in voluntary carbon market, a state government press release said on Friday. Solar energy powering hot water heating in homes, as certified by the BioCarbon Registry, and delivered by the Ministry of Environment and Territorial Planning. The state government says the project will avert 5,523 tons of CO2e output every year.

Rideshare rays – Uber Mexico purchased an unspecified number of carbon credits for an undisclosed amount from organisation ilumexico, which installs off-grid solar facilities for Mexican households relient on candles and diesel power for indoor lighting, according to a press release Friday. The deal was facilitated through data firm and credit issuer, CarbonClear, and purchased through decarbonisation firm Apala group. The credits serve to offset Uber Mexico’s emissions from trips taken on its service.

ASIA PACIFIC

Singapore solar – Singapore plans to import electricity from Indonesia, according to a Reuters report on Friday. The Energy Market Authority has given approval for the import of 2 GW of solar power from Indonesia. The news agency reports the two are expected to sign a MoU soon. 

Jet zero– Australia has released its first aviation white paper in a decade just as the CEO of its national airline Qantas has stood down. The country will look at mandating blending sustainable aviation fuel into its jet fuel to cut emissions, though the Labor government admits it will be costly. 

Chevron strike – European gas prices have risen after Chevron failed to avert a strike at its LNG facilities in Western Australia. The US giant operates the Gorgon and Wheatstone facilities in the country’s north and has been embroiled in a pay dispute with workers for months. They have now begun protected industrial action, according to the Offshore Alliance, a partnership of two unions. 

Net zero – Oil India plans to invest about $2 bln in clean energy projects in order to meet its 2040 net zero goal, Reuters reported Friday. The state-owned oil major also plans to invest about $1.1 bln for 1,800 MW solar and onshore wind energy projects and $0.4 mln for green hydrogen projects. The company also plans to invest $100,000 on carbon capture, utilisation and storage (CCUS) projects. The announcement came in after other state-run companies rushed to announce their net zero goals in the last week of August.

Low carbon – Malaysian state of Sarawak plans to provide up to 1 GW of renewable energy to Singapore by 2032, with negotiations to supply the electricity via submarine cables now at an advanced stage, The Straits Times reported Friday. The deal has been under negotiation for more than three years. Singapore aims to import 4GW of low-carbon electricity, including renewable energy, by 2035 to meet about 30 per cent of its power needs.

VOLUNTARY

Earnings incoming – India’s EKI Energy Services (EKI) intends to release its financial results for the June and March quarters by Sep. 20, according to the company’s Managing Director, Manish Dabkara. The delay in the announcement was attributed to disputes with its prior auditor Walker Chandiok. After ceasing relations with a previous audit firm Anmol Bhora & Cowas in Nov. 2020 for not complying with regulatory standards, the company had appointed D N Jhmab & Company, which later requested to terminate its contract due to engagements with other clients. Consequently, Walker Chandiok was enlisted but is presently in the process of being removed due to various disagreements. EKI said Dassani & Associates will serve as the company’s new auditors for the fiscal year 2022-23. (Business Standard)

Partner profile – Germany-based carbon credit intermediary ClimatePartner had to lay-off some 180 staff this year, around a third of its 500+ workforce spanning 13 countries at its peak, Wirtschaftswoche reported. The business weekly outlined the company’s development up to this year’s move away from its carbon neutrality label amid a swathe of court cases brought by green group DUH that questioned the credibility of these types of claims and media reports of vast project over-crediting.

SCIENCE & TECH

Salty hydrogen – The UK must set up a vast network of hydrogen-filled caves to guard against the risk of blackouts under the net zero shift, according to the Royal Society, the country’s premier science body. Its report, ‘Large-scale electricity storage’, published today, examines a wide variety of ways to store surplus wind and solar generated electricity – including green hydrogen, advanced compressed air energy storage (ACAES), ammonia, and heat – which will be needed when Great Britian’s supply is dominated by volatile wind and solar power. It concludes that large-scale electricity storage is essential to mitigate variations in wind and sunshine, particularly long-term variations in the wind, and to keep the nation’s lights on. Storing most of the surplus as hydrogen, in salt caverns, would be the cheapest way of doing this. The report, based on 37 years of weather data, finds that in 2050 up to 100 Terawatt-hours (TWh) of storage will be needed, which would have to be capable of meeting around a quarter of the UK’s current annual electricity demand. Storage on this scale, which would require up to 90 clusters of 10 caverns, is not possible with batteries or pumped hydro, the report states. It would be the equivalent of more than 5,000 Dinorwig pumped hydroelectric dams, referring to a plant in Wales. There are currently three hydrogen storage caverns in the UK, which have been in use since 1972, and the British Geological Survey has identified the geology for ample storage capacity in Cheshire, Wessex and East Yorkshire.

Everyone’s feeling it – Almost the entire global population has experienced heightened temperatures due to human-induced climate change, according to a peer-reviewed report by US-based research group Climate Central. The study analysed data from 180 countries and 22 territories, determining that 98% of the world’s populace encountered temperatures doubled in likelihood due to CO2 pollution. Climate Central noted the universal influence of global warming in recent months, emphasising that the observed temperatures would have been extremely rare or even impossible without human-induced climate change. The research involved comparing actual temperatures with those projected by models that exclude GHG emissions effects, revealing that 6.2 bln people faced days with temperatures made at least five times more probable because of climate change. The report also highlighted the critical role of climate change in facilitating the recent catastrophic heatwaves in North America and Southern Europe. (Climate Home)

SHIPPING

Greener goods – Amazon has agreed with Maersk to ship 20,000 forty-food long containers through 2024 on vessels operating on green biofuel, as the e-commerce giant seeks for ways to curb the carbon footprint of transporting goods. The vessels used will include the shipping carrier’s methanol-powered feeder vessel that will dock in Copenhagen on its maiden voyage on Sep. 14. The partners have reached similar agreements for the past four years, but this is the first time that the mix will be supplemented by green methanol as a second alternative fuel. The venture will lead to emissions reduction of 45,000 tonnes of CO2 annually, when compared to standard bunking fuel, according to Maersk. The deal comes in a suite of related green fuel offering made to cargo owners by ocean carriers as they prepare for tightening CO2 emissions regulation from the IMO (International Maritime Organisation) and EU.

AND FINALLY…

This gig sucks – The pop band The 1975 plans to host what is claimed to be the world’s first carbon-removed gig at London’s O2 Arena in February as part of their 2024 UK and European tour, teaming up with removals experts CUR8. The event aims to physically remove as much CO2 as it generates through means such as air extraction, tree-planting, and spreading CO2-absorbing volcanic rock on farmland. The event’s organiser AEG estimates that a large gig at the O2 generates around 100 tonnes of CO2, costing about £15,000 to remove. Unlike carbon-neutral events that use offsets, this technique aims to physically remove the generated carbon. Most of the carbon comes from audience travel (75 tonnes), followed by electricity (12.5t), food and drinks (8t), transporting the production team and equipment (4t), and band travel (0.5t). AEG said it hopes this will set a precedent for low-carbon live events in the entertainment industry. (i)

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