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TOP STORY

Washington lays out potential cap-and-invest changes to facilitate WCI linkage

The Washington Department of Ecology (ECY) on Monday provided an overview of potential alterations to its cap-and-trade system it may request should the agency decide to link with the broader California-Quebec market, including revisions to auction purchase limits, offset eligibility, and electricity emissions reporting.

EMEA

EU carbon removal bill set to pass first Parliament hurdle as lawmakers keep options open

The EU’s first draft legislation defining a framework for certifying carbon removals is set to pass comfortably in Tuesday’s vote in the European Parliament’s cross-party environment committee, according to multiple sources close to the file, with lawmakers supportive of enabling a wide range of methods to be deployed.

Euro Markets: EUAs drop to two-week low despite strong gas recovery as bearish winds gain strength

European carbon prices dropped to a two-week low on Monday, shrugging off an afternoon rally in gas amid a continuation of last week’s sell-off, as sources pointed to key bearish factors of a lack of further escalation in the Middle East and continental temperatures slightly above seasonal norms.

Half of EU member states’ subsidies for fossil boilers could decarbonise the bloc’s heating by 2040 -report

Redirecting half of EU member states’ money that currently goes to subsiding fossil fuel heating to heat pumps could fully decarbonise heating in the EU by 2040, an NGO concluded in a report published on Monday.

Carbon markets veteran remains unconscious in London hospital two months after cycling accident

Margaret Ann Splawn, a London-based carbon markets veteran, remains unconscious in hospital after a cycling accident two months ago.

AMERICAS

Seven Brazilian states sign regional carbon market agreement

A treaty promising to plant 100 million native trees across southern and southeastern Brazil and create a self-regulatory carbon market, potentially with sectoral emissions limits, was signed by seven states at an annual meeting in Sao Paulo on Saturday.

Washington carbon market traders pursue appeals following auction participation ban -media

Two speculative entities have filed appeals to the Washington Department of Ecology (ECY) after the agency prevented them from participating in past cap-and-invest auctions, a media outlet reported Monday, adding to the department’s growing legal challenges to its WCI-modelled carbon market.

RGGI Market: RGA values inch upwards as benchmark contract approaches all-time high

RGGI Allowances (RGAs) climbed upwards following a period of market stagnation as the benchmark contract neared a record high, although market participants did not anticipate prices surpassing the impending Cost Containment Reserve (CCR) trigger level in the near term.

Financial, methodological barriers preventing rural sector participation in US voluntary carbon market -govt report

Numerous obstacles are currently preventing US agriculture and forestry sector stakeholders from participating in the voluntary carbon market, though the federal government can take several steps to support the development of the space, according to a Department of Agriculture (USDA) report published Monday.

ASIA PACIFIC

I-REC deal seen to support introduction of biomethane in Australia’s Safeguard Mechanism

A deal announced Monday means Australia is closer to offering renewable energy certificates for natural gas as a way for industries to decarbonise and meet their obligations under the Safeguard Mechanism, according to an involved consultancy.

Australia has the world’s widest energy price swings, analysts find

Australia has the widest and wildest price swings of close to 40 electricity markets globally, according to new research, which suggests a large amount of energy storage is needed to balance the market in coming decades.

Taiwan eyes algae cultivation as carves out blue carbon portfolio

Taiwan is developing a methodology for carbon credits generated from algae cultivation activities following the completion of a government-backed pilot project, as part of the government’s efforts to explore the potential of blue carbon.

INTERNATIONAL

Singapore, UAE shore up bilateral climate ties, eyes on carbon markets

Singapore and the United Arab Emirates have committed to deepening their collaboration on climate change issues with the signing of a joint agreement in Abu Dhabi, including a shared ambition on progressing carbon markets.

VOLUNTARY

VCM Report: REDD prices splinter, corresponding adjustments create headache for first-phase CORSIA buying

Demand continued to diverge in the voluntary carbon market over the past week, with some corporates seeking cheap REDD avoided deforestation credits, while others eye ACR-certified units eligible for the first phase of the CORSIA international aviation offsetting scheme, which are expected to obtain corresponding adjustments.

BIODIVERSITY (FREE TO READ)

Centralised private sector biodiversity fund could help hit global targets, says research organisation

A centralised private sector biodiversity fund could help achieve global nature targets without the need to develop biodiversity credit mechanisms, according to a research group.

Philippines govt signs nature-based solution partnership with energy firm

The Philippines Department of Environment and Natural Resources (DENR) has formalised a biodiversity and climate change agreement with a major renewable energy firm in a bid to drive larger private-sector investments into nature-based solutions.

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Job listings this week

• *Director, REDD+ Program Development and Innovation, Verra – Remote (Worldwide)
• *Director, Forest Management Program Development and Innovation, Verra – Remote (Worldwide)
• *Senior Manager, Accreditation Program Standards, Verra – Remote (Worldwide)
• *Senior Director, Business Development (US), Carbonfuture – Remote
• *GHG Management, Environmental Specialist, First Environment – Sacramento
• *Project Administration Specialist, Climate Change, First Environment – Sacramento
• NBS Associate, Hydrology and Peatlands, ecosecurities – SE Asia (Thailand, Indonesia, Malaysia, or Philippines preferred)
• Manager, Carbon Markets, Qantas – Millers Point, NSW
• Managing Director, Sunstone Strategies – Northern California/New York City/Washington DC (Remote)

*Premium listings

Or click here to see all listings

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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

In memoriam – One of the world’s most respected climate diplomats – Pete Betts, lead negotiator for the UK and EU at UN climate negotiations, who helped deliver the historic Paris Agreement – has passed away from brain cancer. “While there are many that shaped that historic achievement, there are only a handful of people of whom it could be said that the Paris Agreement may never have been agreed without them. Pete was one of them,” said Kaveh Guilanpour of the Center for Energy and Cliamte Solutions in a statement. “While Pete represented some of the richest and most powerful nations, he never failed to speak up for the poorest and most vulnerable people and countries, especially when they were not present to defend their own interests. Above all he was a friend and mentor, and will be greatly missed.” In a touching piece in the FT earlier this year, 13 lessons from a leading climate negotiator at the end of his life, Betts reflected on a lifetime of work on the defining issue of our time and how his thinking has been shaped by his illness. He discussed serious flaws in UN climate negotiations, including a cumbersome process made worse at times by inadequate political leadership. Betts identified little-known figures who have made an invaluable difference, as well as those holding back progress. As well, he spoke of what approaching death has taught him about what matters in life.

Business meant – Ikea, Volvo Cars, eBay, Heineken, Godrej Industries, and more than 130 other businesses have urged world leaders to agree a timeline to ditch unabated fossil fuels at the COP28 UN climate talks, the FT reported. The letter, co-ordinated by the We Mean Business Coalition, touched on an issue set to be a flashpoint at this year’s negotiations in Dubai. “We call on all parties attending COP28 to seek outcomes that will lay the groundwork to transform the global energy system towards a full phaseout of unabated fossil fuels and halve emissions this decade,” said the letter.

EMEA

Free handouts – The UK government granted nearly £46 mln of surplus free carbon allowances to sites operated by agricultural group CF Fertilisers and Jim Ratcliffe’s Ineos, and the companies have now permanently closed, according to a piece in the Financial Times. Liberty Steel also received surplus emissions allowances for a steel mill in Wales that was idled this year, based on data published by the government. The newspaper argues that this raises questions over the UK’s management of its carbon market. Free UKA handouts are however, adjusted annually and assessed on a two-year trailing basis, meaning there can be a lag between a fall or increase in production and the number of allowances companies receive. Companies that have cut production at a particular site can end up with allowances exceeding their emissions in the year or two after, which in theory can be utilised if a company eventually restores production, though there is no obligation to hand them back if they then shut down a site for good. The British government has made an attempt to reduce the total level of permit handouts, slashing free allocations quotas this year, including for CF Fertilisers’ facilities, due to lower industrial production.

Populist rising – Switzerland’s right-wing populist party, the conservative Swiss Peoples’ party (SVP), was projected to secure 29.1% of the votes in elections to the National Council, the lower house of parliament, after 95% of district results were declared, the FT reports. This places the SVP on track to achieve its second-best result in the party’s recent history, after winning 29.4% of the vote in 2015. Meanwhile, Switzerland’s two green parties performed poorly, with their combined share of vote dropping from 21% to 16% as voters abandoned green politics over fears about immigration and rising energy costs. The SVP opposed Covid-19 restrictions and more recently, has criticised Switzerland’s participation in sanctions against Russia, which it says have contributed to energy price rises and opposes the country’s tradition of geopolitical neutrality.

More Czech forests – The European Commission has approved a €742 mln Czech state aid scheme to support sustainable forest management, which could exclude investment from voluntary carbon schemes involving forests in the country. The aims of the scheme are to implement sustainable forest management techniques, encourage the growth of forests, and adapt forests to climate change. It will run until Dec. 31, 2028. The aid will be disbursed as direct grants to small, medium, and large forest owners and other entities with similar rights and obligations, including state-owned entities.

Further delays – The German government is considering allowing old coal power plants to remain on standby beyond the currently planned Spring 2024 phase-out to help save gas and ensure supply security when necessary, reports domestic media sources. The economy ministry is currently in talks about extending the relevant regulation. The situation in Germany is said to be much better this year than in 2022, as some analysts question whether extending the pool of old coal plants on standby was necessary. Coal industry representatives, such as the head of energy supplier Steag, Andreas Reichel, called for a speedy decision to ensure that preparations could be made, such as procuring coal and potentially conducting safety checks of the plants. Earlier this month, the German government said that it will allow several lignite plants to return to the market this winter to help secure energy supply and save gas. (Clean Energy Wire)

Electrical manifesto – The EU electricity industry, under the umbrella of the Electrification Alliance, presented on Monday its priority list for the incoming Commission, to be formed after the European Parliament elections of June 2024. “If we are to have any hope of achieving our climate and energy policy, we need to ramp up electrification as quickly as possible,” the paper read. Recommendations include: setting a target of 35% electrification of final energy use across the EU by 2030, adding an electrification indicator to the National Energy and Climate Plans to measure progress, and taking concrete action to accelerate electrification. For the last point, the Alliance suggested a plan for a grid infrastructure that enables climate neutrality, equipping Europeans with the know-how, leveraging finance, and empowering end-users.

Steel yourself for cuts – British Steel’s Chinese owner is preparing to cut almost half the workforce at its UK steel plant as part of a switch to greener steel production using electric arc furnaces instead of CO2-intensive blast furnaces, the Guardian reports. The job cuts are expected to amount to 2,000 as the company battles losses of reportedly £30 mln a month. The cuts are still under consideration and it’s been understood that no firm decision has been made. The company’s owner Jingye Group has been offered £300 mln by the UK government to support a shift to electric arc furnaces, and reportedly to protect jobs and investment too, but it’s not clear how the job cuts shall affect the government’s investment. The UK steel industry is suffering from spiralling costs and competition from cheap steel made in China and elsewhere.

Hands tied – The EU could be locked into dirty fuels long beyond its aim for carbon neutrality by 2050, with oil majors such as Shell and TotalEnergies recently signing multi-decade-long deals for LNG, reports Bloomberg. Shell’s signing of a 27-year agreement to buy LNG from Qatar for the Netherlands is one example, while last week, France’s TotalEnergies signed a similar contract with the Middle Eastern nation. The deals highlight the bloc’s struggle with achieving its net zero by 2050 goal with its need to ensure energy security following the energy crisis precipitated by Russia’s invasion of Ukraine. High borrowing costs and technology uncertainties have also stalled some investments into the clean energy alternatives intended to lead the EU away from fossil fuels.

Clubbing together – Some 11 EU member states have called on the European Commission to strengthen support for renewables, including cutting red tape and enabling the necessary legislation to get projects off the ground, in a joint communication note sent last week ahead of the European Wind Power Package. The countries – Austria, Belgium, Denmark, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, and Portugal – highlight the benefit of renewables and how they can help provide energy security for Europe in an increasingly volatile geopolitical climate. Europe should speed up building the necessary infrastructure for sharing electricity and getting renewable energy projects over the line, the countries have said. (Euractiv)

AMERICAS

Unsuccessful CCS – Texas-based fossil fuel producer Occidental Petroleum quietly sold its carbon capture and storage (CCS) facility, Century, for a “fraction” of its build cost last year, according to an investigation by Bloomberg Green. The plant never operated at more than a third of its capacity in its 13 years of operation, largely due to limited gas supplied from a nearby field.

Driving heavy reductions – Truck manufacturers are surpassing their zero emissions vehicles sales target and are now two years ahead of schedule, California regulator ARB revealed in an annual report on Monday. The report tracks ARB’s Advanced Clean Truck rule that established a phased-in transition toward the sale of 100% zero emissions medium- and heavy-duty vehicles by 2045, with sales requirements starting in 2024. The early success of meeting requirements in 2022 ensures that manufacturers have enough credits to sell internal combustion engine models as needed to meet market demands, the regulator said. The zero-emissions report also tracks the sale of some off-road vehicle types, and found that manufacturers were on track to more than double the required number of zero emissions tractors sales, based on current sales trends and the number of funding vouchers that have been issued by ARB.

World Bank in the Caribbean  – The Dominican Republic will receive a $6 mln payment in 2024 as a product of its verifiable greenhouse gas reductions from forest carbon. The payment is the first result of the country’s participation in the World Bank’s Forest Carbon Partnership Facility, which will allow the Dominican Republic to receive payments of up to $25 mln until 2025 via the Caribbean island’s emissions reduction program. (Dominican Today)

ASIA PACIFIC

Hydrogen ecosystem – Hyundai Motor will help establish an ecosystem for hydrogen-based mobility in the Kingdom of Saudi Arabia through its participation in a new alliance, it announced Monday. The Korean carmaker, which will provide hydrogen fuel cell commercial vehicles, has signed a memorandum of understanding (MOU) with the Korea Automotive Technology Institute (KATECH), Air Products Qudra (APQ), and the Saudi Public Transport Company (SAPTCO). KATECH will explore further opportunities for collaboration in research and development, while APQ will secure hydrogen supply in Saudi Arabia. The governments of South Korea and Saudi Arabia recently signed multiple deals for a wide range of sectors, including crude oil and hydrogen, according to news agency Yonhap.

CCUS partnership – South Korea’s SK Innovation has agreed to work with SK IE Technology and Lotte Chemical to strengthen competitiveness in the field of carbon capture, utilisation and storage (CCUS), they announced Monday. Under the agreement, the companies will use their core carbon capture technologies and know-how to improve the carbon capture process, develop optimal processes for new high-performance separation membranes, and identify new markets for their application. They will also work together to discover and invest in promising technologies for the emerging market.

INVESTMENT

Bless this Hess – Energy giant Chevron on Monday announced an agreement to acquire New York-headquartered oil company Hess for $53 bln. Chevron said the acquisition upgrades and diversifies its portfolio, and that the Stabroek block in Guyana, which Hess owns a 30% stake in, is “an extraordinary asset with industry leading cash margins and low carbon intensity that is expected to deliver production growth into the next decade.” In December, Hess announced that it will purchase 37.5 mln jurisdictional-scale Architecture for REDD+ Transactions (ART) credits from the national government of Guyana over the next decade. This constituted the first sale of credits from the ART programme and the $750 mln purchase total far exceeded expectations for the deal. The Hess acquisition is expected to close in the first half of 2024 and the companies will proceed as separate entities until then, a Chevron spokesperson said. 

SCIENCE & TECH

Inevitable collapse – The collapse of a key component of Antarctica’s ice sheet is “unavoidable” and will melt over hundreds of years, slowly adding 1.8 metres to global sea levels, according to oceanographer Kaitlin Naughten, lead author of a study which calculated future melting of protective ice shelves in western Antarctica. The findings, published Monday in Nature Climate Change, used computer simulations to study the key melting component of warm water melting ice from below across four different atmospheric CO2 scenarios – in each case, ocean warming was too much for the West Antarctic Ice Sheet to survive. Researchers not part of the study echoed the findings, calling that part of Antarctica “doomed” and “eventually going to collapse” (Associated Press).

Forest fad – Unlike previously thought, the replacement of coniferous trees by deciduous ones following fires in North American boreal forests may not constitute a permanent shift, according to a study released Monday in Nature Climate Change. The study, led by Northern Arizona University, found that although forests do become more deciduous following fires, they eventually revert after a few decades back to coniferous coverage. Researchers also found that the abrupt loss of coniferous forests caused by wildfire was offset by a gradual increase in areas that had not recently burned, so that there was no overall shift toward deciduous cover. Deciduous trees are faster growing, take up more carbon, and reflect more light, leading to cooling of the climate and decreased likelihood of fire. However, researchers noted that the newly-discovered resiliency of coniferous forests may not be permanent as climate change continues to affect how forests burn and recover.

AND FINALLY…

Roll out the red carpet – King Charles has received the green light from UK Prime Minister Rishi Sunak to attend COP28 in Dubai next month after being previously blocked by Downing Street from attending the COP27 event in Egypt last year. The UK monarch will travel to the Middle East to make the first major climate change speech of his reign, reports the Daily Mail, and he is also expected to address other world leaders while there. King Charles has been a fervent environmental campaigner for many years and has most recently set up the Sustainable Markets Initiative to strengthen links between the private sector and government. His attendance at COP28 will signal that he intends to continue using his position to highlight environmental causes.

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