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TOP STORY

POLL: Analysts slash UKA forecasts due to weak policy ambition, low energy demand

Analysts have heavily cut their average price forecasts for UK carbon allowances out to 2030, citing bearish fundamental pressure from the demand side, as well as weak policy ambition from market reform efforts that will boost supply over the next few years.

AVIATION/SHIPPING

FEATURE: Cargo shippers driven to cut emissions see value of having the wind in their sails

As the shipping sector faces an increased need to account for its carbon emissions, from inclusion in the EU ETS to new carbon indexation rules, ship owners are looking for innovative ways to cut CO2, with some returning to the traditional method of sail power to reduce fuel consumption.

EMEA

EU ministers agree on energy market reform, teeing up final talks with Parliament

The Council of the EU 27 energy ministers reached an agreement on Tuesday on a proposal to amend the bloc’s electricity market design, allowing the start of negotiations with co-legislators in the Parliament on Thursday.

Euro Markets: EUAs pare early losses as market endures further whipsaws from gas volatility

European carbon made back around half of its early losses late on Tuesday, as prices recovered from an early drop to their lowest in more than a week, driven chiefly by volatile natural gas trading amid conflicting reports of supply risk affecting the European pipeline network and updated weather forecasts.

Zambia advances on international carbon trading with strengthened Article 6 framework

Zambia has established the eligibility criteria and the approval process for carbon projects under a strengthened guidelines for Article 6, providing a roadmap for the country’s participation in international carbon markets that aims to give investors more clarity for development in the country.

Oman to plant mangroves for carbon credits and other economic benefits 

Oman plans to plant 100 million mangrove trees in order to generate $160 million in carbon credits, as the government increasingly recognises the economic benefits posed by environmental restoration and seeks to position itself as a global leader on international emissions trade.

AMERICAS

California regulator’s LCFS branch chief departs ahead of rulemaking start

California regulator ARB’s branch chief responsible for overseeing the Low Carbon Fuel Standard (LCFS) has departed the agency just weeks before the commencement of a major rulemaking process to amend the transportation sector climate programme.

US needs “strong social contract” to meet net zero goals, lead global efforts on climate, says report

Inadequate or failed implementation of climate policies is the US’ greatest risk to meeting emissions reductions goals, a consortium of scientists, engineers, and health care professionals said in a report published Tuesday, with nearly 80 recommendations targeting private and public sector engagement.

Quebec sees emissions in 2022 exceeds cap-and-trade programme limits for fifth consecutive year

GHG emissions in Quebec during 2022 exceeded the province’s cap-and-trade programme limits for the fifth consecutive year, according to government data published Tuesday.

Canada’s Newfoundland and Labrador province offering millions of dollars for CCUS research

The Atlantic Canadian Province of Newfoundland and Labrador on Tuesday announced a carbon capture utilisation and storage (CCUS) innovation contest to help decarbonise its oil sector, where the government will fund studies that examine how the technology could work in its unique geography.

Trading firm lands North American carbon portfolio manager from power company

A Chicago-based proprietary trading company has poached a North American environmental products portfolio manager from a long tenure at a New York-based electricity generation development and investment firm, Carbon Pulse has learned.

ASIA PACIFIC

Uzbekistan the first to secure funding under World Bank’s policy crediting programme

Uzbekistan is to receive $46.25 million to cut fossil fuel subsidies via a debut transaction from a longstanding World Bank-led programme to credit emissions reductions achieved through climate policy initiatives.

Indian carbon market to cover just 15% of the country’s GHG emissions by 2030

India’s carbon market will likely cover just 15% of the nation’s greenhouse gas emissions by 2030, according to media reports.

Low-cost renewables will help nations win the green steel race -paper

Australia could be a global giant in green steel manufacturing as it is now a behemoth in iron ore production, provided the government incentivises investment and business commits to a great focus on emissions, according to a paper released Tuesday.

Malaysian shipbuilder debuts new form of oil ship CCS

A local joint venture between Italy’s Eni and BP based in Angola are trialling a new form of carbon capture and storage aboard their oil vessel.

South Korea seeking two additional market makers for domestic ETS

South Korea is seeking to expand the number of market makers in its emissions trading scheme (ETS) in a bid to boost trading activity as the domestic carbon market has been stagnant due to lasting oversupply issues.

Korean project developer to promote microbial materials for tree plantation, generate carbon credits

A South Korean project developer has teamed up with a government-backed research institute to promote a microbial technology that can alleviate tree droughts and help generate carbon credits.

INTERNATIONAL

UN floats new way to calculate cookstove project emissions cuts, receives criticism

UN-backed research to calculate emissions reductions from cookstove carbon projects has been put out for consultation as part of global efforts to address over-crediting concerns, though the work seems to have angered some government authorities and experts.

India, UK among just a handful of major nations on track to meet “fair share” Paris goals -report

Only four major economies are on track to meet what would have been their Paris Agreement goals under “fair share” criteria laid out by an international group, a report said this week.

VOLUNTARY

Plaintiff looking to “survive” Delta Air Lines’ motion to dismiss lawsuit against carbon neutrality claims

Attorneys for the plaintiff in a lawsuit against Delta’s carbon offsetting practices has lodged an opposition to the airline’s motion to dismiss the case in a US federal court, filings showed Monday.

Verra halts credits issuance, launches investigation into Kariba REDD+ project after latest allegations

Carbon credits standard body Verra announced Tuesday that it will initiate an investigation into the Kariba REDD+ project and put it on hold following the publication of another investigative article that details new accusations of trophy hunting and financial malpractice in connection with the Zimbabwean project.

Saudi voluntary carbon market initiative to host developing nations ahead of COP28

Saudi Arabia’s Regional Voluntary Carbon Market Company (RVCMC) is to hold a summit for Global South participants ahead of the year-end COP28 UN climate talks in Dubai, it said on Tuesday.

Canadian carbon capture firm partners with British tech company for CCUS project development

A Vancouver-headquartered carbon removal solutions provider and UK-based CO2 management technology firm announced Tuesday a partnership to eventually deploy large-scale carbon capture, utilisation, and storage (CCUS) projects globally.

Voluntary carbon accounting platform and provider of “trust infrastructure” for removals credits team up

A German-based marketplace and provider of tracking infrastructure for carbon removal credits has partnered with an emissions accounting platform.

BIODIVERSITY (FREE TO READ)

UNDP offers to support design of ‘turtle certificates’ in African island nation

The UN Development Programme (UNDP) will support investors interested in developing or buying “turtle certificates” to support conservation in Central Africa, an executive has said.

UK finance and charity collaboration launches voluntary nature market principles

A group of organisations on Wednesday published the Nature Markets Principles, which contain a number of supply and demand-side principles for buyers and sellers of nature-oriented markets in the UK, with the intention to combat corporate greenwashing and support high-integrity, science-based activities in lieu of relevant policy and regulation.

Australia commits A$25 mln to conservation on private land, plans on environmental reform “lock-up”

The Australian government has committed A$25 million ($15.8 mln) to fund conservation work on privately held land, as the minister for environment on Tuesday laid out details on the consultation process for its environmental law reforms.

Roland Berger teams up with Swiss non-profit in design of global voluntary recycling credit

Global management consultancy Roland Berger on Tuesday announced it will work with a Swiss foundation to develop blockchain technology for a Voluntary Recycling Credit (VRC) that will be presented at COP28 in Dubai.

IUCN outlines new plan to tackle global species decline

Environmental organisation IUCN has called for an increase in financing to stem species loss alongside releasing an action plan to address species decline, but provided little detail on the mechanisms needed to do so.

Biodiversity Pulse: Tuesday October 17, 2023

A twice-weekly summary of our biodiversity news plus bite-sized updates from around the world. All articles in this edition are free to read (no subscription required).

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CONFERENCES

Private Land Conservation Conference | Unite for Nature – Oct. 16-18, Canberra: Nature has been elevated to the world stage and the Australian Land Conservation Alliance’s Private Land Conservation plays a crucial role in exploring the challenges and solutions as we navigate the transition to a nature positive future. Featuring Australian and international conservation practitioners, policy experts, business, finance and industry leaders, landholders, and First Nations groups on the frontlines of conservation, the conference explores pathways to reversing nature loss. To register: www.alcaconference.org.au/registration

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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

Grid and bear it – Efforts to tackle climate change and ensure reliable supplies of electricity could be put at risk unless policy makers and companies quickly take action to improve and expand the world’s electricity grids, according to a special report released today by the IEA. Achieving all national climate and energy goals will require adding or replacing 80 mln km of power lines by 2040, according to a country-by-country analysis carried out for the report. Major changes to how grids operate and are regulated are also essential, while annual investment in grids, which has remained broadly stagnant, needs to double to more than $600 bln a year by 2030.

EMEA

Forcing out – Bulgaria has imposed stringent taxes on Russian-owned oil and gas operations in an effort to make them less profitable and force them and their European buyers to seek other options, the FT reports. Bulgaria has taken a strong turn away from alignment with Moscow since a pro-European government came into power in May. The EU and NATO member was cut off from Gazprom shipments soon after the start of Russia’s full-scale invasion of Ukraine, though Gazprom continued to allow the use of its gas pipeline network to supply Serbia and Hungary, two of Europe’s most pro-Russian governments, with critical gas supplies. Sofia has introduced a Lv20 (€10) excise tax per MWh on transiting Russian gas (about a fifth of the current TTF benchmark gas price) and a 60% tax on the profits of the Russian-owned Lukoil refinery on its Black Sea shore.

Auctioning regulation – The European Commission has adopted the updated auctioning regulation for the EU ETS that needed to be revised following the Fit for 55 legislative package and REPowerEU plan, the bloc’s attempt to wean off Russian gas. The auctioning regulation updates sets out the technical elements necessary for the smooth operation of the EU ETS auctions, like the format, timing, frequency of auctions, rules about the auction calendars and more. The changes that needed to be integrated were related to the extension of the EU ETS to the shipping sector, as well as the new EU ETS2 covering buildings and transport. It also includes updates to the auctioning of aviation auction volumes, the auctioning of the Innovation Fund and the sale of additional allowances in the context of the REPowerEU. The adopted delegated act is now submitted to the European Parliament and Council for scrutiny for two months. If there are no objections, it will be published in the Official Journal and enter into force. More information will be provided in an upcoming regulatory update regarding the publication of the 2024 auction calendars in view of the timing of the entry into force of the New Auctioning Regulation.

Fin findings – Following on from Monday’s agreement by EU environment ministers on their negotiating stance for COP28, the bloc’s finance ministers on Tuesday set out complementary conclusions on climate finance for the world’s biggest contributor. The ministers said they expected the EU’s total contribution for 2022 to be made available by the European Commission mid-November, in time before the start of COP28. They reiterated that they expect the developed world to meet its annual commitment to channel $100 bln a year to poorer nations in 2023 – a goal first due in 2020 and a major source of concern in UN climate negotiations.

CCS friends – Denmark and the Netherlands signed a Memorandum of Understanding on Monday on the sidelines of the EU Environment council in Luxembourg, promising to cooperate on carbon capture and storage (CCS) and CO2 transport. Dutch climate minister Rob Jetten said, “underground storage is a short-term, cost-effective measure for reducing greenhouse gases. Moreover, the development of CO2 storage projects contributes to carbon removal in the future.” The MoU will see transport of CO2 between the two countries, which can be stored in empty oil and gas fields in the two countries’ separate zones of the North Sea. The EU was meant to come up with a EU-wide CCUS strategy this year, but its release has now been postponed to next year. (Euractiv)

ASIA PACIFIC

Not enough – A key Japanese trader of LNG has warned that global demand for the fuel is likely to prove stronger than expected and the current pipeline of projects will be insufficient to meet demand, Bloomberg reports. Kenichi Hori, president of Japanese trading house Mitsui made the comments in an interview this week, noting that demand would outpace supply given that the energy transition will take several decades. His comments come as competition for LNG has intensified after Russia’s invasion of Ukraine, with Europe seeking to curb its dependency on Moscow for gas and emerging nations targeting long-term deals to avoid future shortages.

Green fuels – South Korea’s SK Trading International has invested in Daekyung Oil & Transportation, which specialises in the production of waste-based raw materials, to secure raw materials for the production of bio-jet fuel, it announced Tuesday. Daekyung Oil & Transporation is the country’s largest supplier of animal fat from slaughter by-products and used cooking oil (UCO) from restaurants and food factories, according to the company statement. The deal came after SK in March announced a similar investment in Jinshang, a Southwest China-based UCO supplier, to secure such materials in the Chinese market.

Opinions needed – Us Carbon Offset, a carbon credit registry established by Tokyo-based agritech company Life Lab, is soliciting public comments on a new soil offset methodology, it said in a statement. The new methodology, likely the first of its kind in Japan, will provide a general framework for quantifying the amount of organic carbon stored from farmland management activities, such as the use of green manure crops and reduced tillage. The offset programme will accept feedback on the methodology until Oct. 27, according to the statement.

Sun and shadow – A study conducted by the Indian Institute of Technology Delhi has found that only 29% of India’s landmass has the ability to harness solar power and that 0.2% of the country’s area is losing its photovoltaic potential (about 50 GW of solar energy per year) due to air pollution. The study, which used satellite-derived data, noted that surface insolation over India has been decreasing between 2001 and 2018. The study argued that aerosol loading or excessive particles in air causing air pollution was the main reason behind the same. (The Times of India)

AMERICAS

Provinces’ coal phase out – The Canadian federal government has approved plans from New Brunswick and Nova Scotia provinces to increase renewable energy and phase out coal generation by 2030, amounting to a modified version of the Atlantic Loop–a project that involved improving transmission lines between the two provinces to allow for hydroelectricity imports from Quebec, CBC reported Monday. The first phase of funding for the two provinces includes C$11.5 mln for Nova Scotia to improve monitoring and automation of its electric grid, C$7 mln for Arc, the small nuclear reactor at Point Lepreau, New Brunswick, C$2 mln to explore converting New Brunswick’s last coal-fired power plant in Belledune to sustainably sourced biomass, and C$1 mln for a port in Belledune to study establishing a green industrial hub. Nova Scotia estimates the plan to cost much more, about C$2 bln, while federal energy and natural resources minister Jonathan Wilkinson has said federal funding options would include some mechanisms that would have been part of the Atlantic Loop, such as the Canada Infrastructure Bank loans for transmission lines between the two provinces, and investment tax credits after the federal government finalises them in the coming months.

Ruled out – Ottawa will move ahead with its two GHG reduction regulations, despite the ruling by the Canadian Supreme Court that deemed the Impact Assessment Act unconstitutional, the Globe and Mail reports. Federal officials informed that the ruling does not affect their plans to cap GHG emissions from the oil and gas sector, and that their proposed Clean Electricity Regulations to restrict emissions from power generation is also under the purview of the federal government as well.

Legislation information – The southern Brazilian state of Parana tabled a bill on Monday that seeks to inform residents about the carbon market, the state legislature’s website shows. The bill, which does not propose any regulatory action, suggests that Parana has a high capacity for crop-based offsets and should inform the public about carbon markets before COP28 in Dubai on Nov. 23. While it is possible that the bill represents an intention to promote a Parana state carbon market, there is no indication of potential parameters, criteria or any other details, according to Bruno Duarte, a partner at the law firm Trench Rossi Watanabe. Approving simple bills that don’t aim to regulating anything is common among local legislators in Brazil, Duarte said, because it avoids debate and allows representatives to claim an achievement to the voting public.

VOLUNTARY

No goals – Shell has given up on specific spending and volume targets for carbon offsets, CEO Wael Sawan told an event Tuesday, as Reuters reports. Shell had previously said it wanted to invest around $100 mln a year on offsets and use credits worth up to 120 MtCO2e per year by 2030, but some major credit-generating projects, including in forest preservation, have come under scrutiny for exaggerating their climate impact, while some climate activists argue any offset is a fig leaf for continued use of hydrocarbons. A previous Bloomberg feature had flagged Shell were easing back from the VCM.

Run fast for removals – Organisers of the London Marathon, held in the UK capital every April, are to start paying to remove the CO2 impact of the world-renowned event while aiming to reach net zero by 2030. London Marathon Events (LME) will pay carbon removal company CUR8 to capture 280 tonnes of CO2 from the air, increasing the amount annually, through the use of a £26 ‘climate levy’ on all international participants, the Independent reports. There were around 9,920 LME participants in 2022, with 95% of the total emissions coming from their travel. LME also organises other sporting events such as the Brighton Marathon and seeks to cut around 800 tonnes of carbon a year through removals and emissions reductions.

SCIENCE & TECH

Space-based solar – Developments in space-based solar power are coming on in leaps and bounds with progress being made at the California Institute of Technology to beam solar power wirelessly from space back to Earth, and researchers in China, the US, UK, Japan, and Europe all studying the feasibility of the technology, with a view to possibly launching experiments into space before the end of the decade. China’s ZhuRi programme plans to put a a pilot power plant into orbit generating 20 MW of power by 2035, while in the UK, a group of entrepreneurs behind government-backed start-up Space Solar aim to scale up to a fleet of plants delivering 30 GW into the energy grid by the 2040s. Some argue that space-based solar power has greater potential than nuclear fusion to help the world reach net zero. Harvesting the sun’s energy in space is achieved by attaching solar panels to a satellite, with that energy converted into microwaves, which are subsequently beamed through the atmosphere to receiving antenna where they are reconverted into electricity to be distributed through the grid. However, critics of the technology such as Elon Musk claim that heavy energy losses during conversion from sunlight to electricity make space solar power much less efficient and so uncompetitive with solar farms on Earth. (FT)

AVIATION

Technical applications – Four carbon programmes, ACR, Climate Action Reserve (CAR), Gold Standard, and Verra’s VCS, submitted procedural updates in August and September to a technical body operating under the UN’s CORSIA scheme, while one, Socialcarbon, submitted updated information relevant for the assessment of its re-application, according to the ICAO website. The body now invites the public to submit comments on the updated information submitted by the five programmes, regarding their alignment with eligibility for the UN’s aviation offsetting scheme, with the consultation beginning Oct. 16 and running to Nov. 15.

AND FINALLY…

Here we go again – France’s Canal+ on Monday aired the debut episode of D’Argent et de Sang (Of Blood and Money), a new TV series chronicling the 2008-09 tax fraud saga that cost European governments in excess of €5 bln and shook the EU carbon market to its core.  Based on the book of the same title by Fabrice Arfi, the show is the latest attempt to translate the wild tale of what many call “the crime of the century” into primetime viewing.  This series follows Lords of Scam – a 2021 French documentary about the crime ring made for Netflix, and Carbon – a 2017 film starring Gerard Depardieu.  Carbon Pulse subscribers can read our 2016 feature: The case of the skull ring: Poker pro, Polish broker on trial for French carbon “crime of the century”

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