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TOP STORY

ANALYSIS: Governments should use legal international frameworks to smother political climate policy wrecking, experts say

Concrete international legal frameworks and agreements should be used by sitting governments to stymie attempts by belligerent political parties to tear down effective climate policies and carbon pricing, panellists told a conference Tuesday.

VOLUNTARY

More companies retiring voluntary carbon credits this year despite downturn in overall volumes

Thousands more companies have retired carbon credits this year than last, data show, even as negative media coverage has seen buyers back away from the market and prices crash.

Carbon removal credit purchases up five-fold since 2021 amidst overall credit issuance decline -report

Demand for quality-focused carbon removal credits has significantly grown, despite an overall credit decline in issuances largely driven by downward trends in REDD+ and renewable energy (RE) credits, according to a report released by a carbon management firm on Wednesday.

INTERVIEW: Corporate partnership breaks new ground on carbon contribution claims

A European manufacturing company and conservation NGO are jointly developing carbon projects where the credits will be donated as a ‘contribution’ towards the host nation’s nationally determined contribution (NDC) goal set under the Paris Agreement, in what is emerging as a model for the voluntary carbon market.

Conference sees new set of guidelines for biomass-based CO2 removal projects

A carbon management firm launched guidelines to mitigate potential adverse impacts related to biomass-based CO2 removal offtake agreements at a conference on Wednesday.

French startup raises $2.6 mln to support rice decarbonisation through satellite-verified carbon credits

A Paris-based startup on Wednesday announced it has raised $2.6 million to expand its monitoring, verification, and brokering of carbon credits generated from emissions reductions in rice throughout markets in Asia, Africa, and South America.

EMEA

EU lawmakers want oil firms to pay for more of the bloc’s CCS infrastructure

Specialised members of the European Parliament voted on Wednesday to widen an obligation on oil firms to pay for the bloc’s CCS infrastructure via the bloc’s Net Zero Industry Act (NZIA), the EU proposal setting 2030 targets to produce ‘strategically important’ clean technologies domestically.

EU’s carbon removal methodologies will be “vital” for global carbon industry, experts hear

The EU’s role in developing robust methodologies for carbon removals as a way to scale up the market and build trust in the nascent industry was highlighted by international players at a forum in Brussels on Wednesday that focused on designing direct air capture (DAC) and bioenergy with carbon capture (BECCS) methodologies.

EU stresses need for world to set targets both for renewables and fossil fuel phaseout

Nations must agree to aggressive near-term targets to increase renewable energy worldwide as well as to phase out fossil fuels to ensure the Paris Agreement’s climate goals are kept within reach, EU officials said on Wednesday in assessing ambitions for year-end COP28 UN climate talks in Dubai.

Euro Markets: EUAs drop below key support, setting stage for further sell-off as speculators add to bearish bets

European carbon prices again reversed early gains on Wednesday and fell to a three-week low below a key support level, as positioning data showed that speculative investors had increased their bearish bets last week, while energy markets were mixed as participants waited for further developments in Gaza to provide signals on potential supply risk from the region.

UAE firm and Kenya sign collaboration agreement for forestry carbon project development

A UAE company has signed a collaboration deal with the Kenyan government for the development of REDD+ projects across millions of hectares in the African nation, according to a press release Wednesday.

ASIA PACIFIC

China’s Guangdong to add three sectors to regional ETS

China’s Guangdong is planning to include three new emissions-intensive sectors in its regional emissions trading scheme (ETS), as the province has pledged to expand the scope of the carbon pricing mechanism.

Australian regulator firm on 2024 start date for national carbon exchange

Australia’s Clean Energy Regulator (CER) has been working behind the scenes to set up a national carbon exchange in the country that it says it will launch early next year, but it has remained coy about any of the details surrounding its development.

Clean Energy Regulator reveals details about HIR ACCU audit reviews

Australia’s Clean Energy Regulator has appointed an expert academic to commence a review of gateway checks for human-induced regeneration (HIR) Australian Carbon Credit Unit (ACCU) projects.

South Korea weighs ETS regulatory changes for CBAM -expert

South Korea is considering introducing regulatory updates to help domestic companies better tackle the trade impact of carbon border taxes, though CO2 permits may continue to be handed out for free in the near term, experts told a conference on Wednesday.

China sets deadline for using pre-suspension CCERs

China has provided additional clarity to its voluntary market by setting a firm time limit on the use of previously issued domestic carbon credits, as the country is in the process of revitalising its offset programme.

J-Credit seller secures offtake agreements with Japanese banks

A Tokyo-based J-Credit intermediary in Japan’s fledgling carbon market has signed a supply agreement with two local banks looking to offset their emissions and offer carbon market access to their customers.

AMERICAS

Quebec considering changes to offset usage in cap-and-trade programme, direct contribution scheme

Quebec’s environment ministry (MELCCFP) is looking at restrictions on the use of offsets within its cap-and-trade programme before the end of the decade, and is also mulling more wholesale changes to the credit system thereafter, officials detailed in a webinar on Wednesday.

California compliance offset project owner suing original developer over intentional reversal of credits

The owner of a California-registered forest offset project is suing the original landowner for over $1 million for allegedly overstating the carbon sequestration capacity of the project, causing the new holder to need to purchase more credits to compensate for an international reversal.

California offset issuance trails 2022 YTD levels, as DEBs premium hits record into compliance deadline

California compliance offset issuance slowed over the past two weeks to once again trail year-ago levels, state data published Wednesday showed, while credits providing direct environmental benefits to the state (DEBs) reached an all-time high premium to untagged units heading into next week’s interim cap-and-trade true-up deadline.

Brazil agricultural association pushes for Article 6.4 recognition of forestry carbon credits at COP28

Nations gathered at the COP28 UN climate summit next month should include carbon credits from forestry-based activities in the final rules for the Article 6.4 successor mechanism to the Kyoto Protocol, a Brazilian agriculture lobby group said in recommendations to the federal government Wednesday.

Canadian carbon project developer forms partnership to address emissions affecting Indigenous territories

A Calgary-based carbon project developer announced Wednesday a partnership with a community development organisation and an ESG-specialised consultancy to provide emission offset solutions and explore CO2 removal options in ways that benefit Indigenous communities.

Oregon Clean Fuels Program chief plans departure for national biofuels lobby

The leader behind the Oregon Clean Fuels Program (OCFP) will take up a senior position at a national advanced biofuels group in early 2024, the organisation announced Tuesday, meaning two West Coast jurisdictions are losing their government agency heads for their respective low-carbon fuel standard (LCFS) programmes.

AVIATION/SHIPPING

Public still leery over airline carbon offsets, prefers clean jet fuel

More than just sustainable aviation fuel (SAF) will be needed to decarbonise the world’s aviation industry as even with full deployment only 80% of emissions will be cut, and customers may not always be willing to cover the costs, a conference heard Wednesday.

BIODIVERSITY (FREE TO READ)

Nature tech investment reaches a total of $7.5 bln, says environmental group

Billions are being invested in nature tech startups that are benefitting from increased emphasis on corporate impact reporting, with MRV and biodiversity credit startups among the largest growing categories.

Biodiversity crediting needs a global integrity council, says non-profit

A multi-stakeholder biodiversity market supervisor could advise on claims and provide quality guidance to both potential buyers and project developers, helping nature crediting to avoid the current integrity issues facing the voluntary carbon market (VCM), according to a non-profit.

Hyundai, IUCN target OECMs with Vietnamese mangrove partnership

A partnership that aims to plant 120,000 mangrove trees in Vietnam during its first year with OECM potential has been announced by Korean carmaker Hyundai and International Union for Conservation of Nature (IUCN).

Malaysia to create biodiversity assets in carbon market through new finance instrument

Malaysia will use a newly launched biodiversity instrument to fund reforestation and forest restoration by generating carbon credits, the nation’s environment minister has said.

Deep-sea mining not environmentally, financially, or technically feasible, says NGO coalition

Ahead of a UN-affiliated meeting next week on deep-sea mining, an NGO-led campaign has called for a blanket moratorium on the activity and the closure of legal loopholes that permit deep-water extraction work.

African alliance targets financial instrument for mangroves

Financial instruments supporting mangroves and forestry are under consideration by members of the African Natural Capital Allliance (ANCA), an executive at the organisation has said.

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CONFERENCES

Aviation Carbon 2023 – Nov. 6-7, London Heathrow: Join us for a unique networking forum for aviation sustainability experts and professionals. Now in its 11th edition, Aviation Carbon attracts over 300 delegates from 70 countries, with over 100 airlines and aircraft operators represented.  Over 60 speakers will be hosting interactive panel discussions and workshops, to discuss key issues such as SAF, sustainability-linked finance, ESG, carbon removal technology, and the non-CO2 impacts of aviation on the climate. Don’t miss this opportunity to be part of a global conversation about the future of sustainable aviation – register here: https://www.aviationcarbon.aero/

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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

Getting worse – The chances of the world limiting the rise in global temperatures to 1.5C since pre-industrial times are now less than the one-third to one-half predicted in the last landmark report by UN’s climate science body, its new chair said. British academic Jim Skea, who has taken over as chair of the IPCC, said the continued rise of GHGs since its 2021 report had reduced the chances of curbing global warming, the FT reports.

VOLUNTARY

Left out – Swiss investment management firm Lombard Odier said that new standards for the global carbon offset market threaten to wipe out a lot of value for investors, Bloomberg reports. Those that don’t meet the new standards will “be trading at a much lower price, if not be stranded altogether,” according to Lorenzo Bernasconi, head of carbon solutions at Lombard Odier Investment Managers. In September, London-based Trove Research found that only about 20% of carbon projects are highly likely to qualify for the ICVCM’s Core Carbon Principles (CCP) integrity label. Registries are already adopting CCP criteria, but Bernasconi warns that they risk stranding legacy assets in doing so. Lombard Odier started its Global Carbon Opportunity strategy last November, investing mainly in compliance credits for institutional clients, and a fund operated by the firm qualified to bid in WCI and RGGI auctions earlier this year. Lombard Odier is also monitoring compliance markets in China and South Korea, and although foreign investors can’t participate yet, the firm expects significant price appreciation in the next few years.

Emirate opening – Exchange provider ACX on Wednesday launched its fully regulated carbon trading exchange and clearing house in the UAE’s Abu Dhabi Global Market (ADGM) financial hub, a move first outlined early last year as part of its growing presence in the region in anticipation of burgeoning voluntary carbon market demand. Without giving price or volume details, ACX said trades have now been executed and settled on the platform, with the first transaction between First Abu Dhabi Bank (FAB) and specialist carbon trading company Helix Climate. Its OTC settlement facility also handled a transaction involving South Pole.

The new class – Remove, a European accelerator focused on CO2 removal technology, has announced the fifth cohort for its CDR Startup Accelerator Program. A total of 20 startups have been selected to participate in this round, including companies such as Seaweed Generation, CyanoCapture, and WindCapture Technologies. The initial 10-week programme will offer coaching on a range of topics, including carbon markets and CDR policy, and will help startups refine their value propositions. The accelerator also provides one-on-one coaching, access to a network of experts, buyers, and investors, and non-dilutive funding. In addition, Remove recently revealed the eight teams advancing to the second stage in its fourth cohort, which involves a more in-depth, six-month programme to help startups build successful CDR companies.

EMEA

Methane compromise – The European Commission is to propose imposing methane emissions limits on EU gas imports from 2030 while taking security of supply considerations into account, Reuters reported, citing a proposal dated Oct. 23 for ongoing talks to finalise a law focused on addressing domestic methane emissions from energy. The compromise proposal would involve the Commission setting out the details in an implementing act at a later date. Negotiations over the bill have been held up over the issue, with the Parliament keen to address imports while member states were more divided and France proposed a gradual intervening over 2026-29.

Industrial strategy – Germany’s economy ministry wants to strengthen the country as an industrial location with a new industry strategy, a key aspect of it being a so-called bridge electricity price for energy-intensive companies, Clean Energy Wire reports. Germany’s economy minister Robert Habeck presented an industry strategy Tuesday in a bid to strengthen the country’s industrial prowess, prevent the migration of energy-intensive key industries, renew prosperity, and push the transition towards climate neutrality forward. Many aspects of the strategy aren’t new and have found consensus within the ruling government coalition, but others, such as the industry power prices, remain controversial.

Oil for carbon swap – Kenyan President William Ruto wants Saudi Arabia to pump billions of dollars into the Kenyan economy in the next three years by purchasing government securities and carbon credits. A source speaking to Kenya-based media outlet, Business Daily, and accompanying Ruto to Riyadh for a three-day summit this week, said that the African nation is eyeing up the Gulf state’s petrol dollars in exchange for carbon credits. Kenya was one of the supplier nations for credits auctioned in recent Saudi voluntary carbon sales, with Riyadh expected to continue to forge close carbon ties with Africa.

Job cuts – Shell will cut around 15% of its low-carbon division workforce and scale back its hydrogen business as part of CEO Wael Sawan’s drive to boost profits, the company told Reuters. Shell will cut 200 jobs and has placed another 130 positions under review as part of a drive to simplify and reduce the headcount in the unit, a spokesperson said.

AMERICAS

Fed finalisation – The US Federal Reserve has finalised principles for a high-level framework for climate-related financial risk management for large financial institutions, it announced Tuesday. The principles address physical and transitional risks associated with climate change and are consistent with existing rules and guidance from the agency, it said. The framework applies to financial institutions with $100 bln or more in assets and is provided in respect to institutions’ governance, strategic planning, and other considerations. The framework does not prohibit or discourage large financial institutions from providing banking services to any specific customers or customer types, and the final principles are substantively similar to draft principles.

BC divided – Residents of British Columbia are split on what should happen to the provincial carbon tax in the event of a Conservative Party victory in the next Canadian federal election, a new Research Co. poll has found. In an online survey of a representative provincial sample, 43% of British Columbians think the provincial carbon tax should be scrapped if the federal version is abandoned, while 40% would prefer to keep it. Support for keeping the provincial carbon tax is highest among British Columbians aged 18-to-34 (54%), but drops among those aged 35-to-54 (44%) and those aged 55 and over (36%).

Blaine game – New Brunswick Premier Blaine Higgs is questioning how the Energy and Utilities Board (EUB) set the “carbon adjustor” charge that consumers have been paying since July, a levy his own legislation forced the board to adopt. Higgs questioned why the EUB set the cost at a higher level than Nova Scotia’s in July, only to lower it based on a market-driven formula the board adopted. New Brunswick Opposition Liberal Leader Susan Holt has been hammering Higgs for months about the carbon adjustor, arguing he could provide cost-of-living relief to New Brunswickers by quickly repealing the legislation his government passed last December. (CBC)

Food foul – A study published Tuesday by environmental group Climate Observatory found that food production in Brazil accounted for 74% of the country’s GHG emissions in 2021, Reuters reports. However, most of these emissions did not come from the actual production process itself, but rather deforestation resulting from the conversion of native vegetation into farms and pastures. Of the 1.8 bln tonnes of GHG emissions coming from Brazilian food production, 78% was associated with beef production. Brazil is the world’s largest beef and soybean exporter, and a Senate committee recently passed ETS legislation that would exempt the agricultural sector’s Scope 1 emissions from compliance obligations following a deal to secure the support of the industry.

Credit claim – Brazilian state-run oil firm Petrobras announced Wednesday that it will use the 175,000 carbon credits it purchased in September to offset to render carbon neutral around a year’s supply of its premium gasoline, Reuters reports. The premium fuel represents about 1% of sales to customers at gas stations supplied by Vibra, Petrobras’ main distributor, which has exclusive rights to sell it. As reported by Carbon Pulse, the credits came from the Envira Amazonia REDD+ project in Feijo in Acre, Brazil, and Petrobras intends to spend as much as $120 mln in the carbon market by 2027. Under the company’s carbon credit purchasing plan, priority will be given to nature-based solutions in Brazil, including projects that feature co-benefits such as encouraging biodiversity and protecting water from contamination. 

New brokerage on the block – Veteran energy broker Sid Perkins has started a new commodity brokerage called Snapper Creek Energy that will trade natural gas and its liquid products, as well as carbon credits, Bloomberg reports. The Miami-based firm started operations on Oct. 16, and its carbon desk is already running and will be focused on longer-term deals. The firm also has an office in Houston and is looking to open one in New York, and the brokerage plans to build in-house research using new technologies to gain a competitive edge.   

ASIA PACIFIC

Wind power partnership – Japan, which aims to have 10 GW of offshore wind power, has agreed to work with Denmark to jointly develop floating offshore wind power technologies, Reuters reports. The two countries are seeking to create a framework to support their cooperation in the field, and will also likely discuss spearheading the creation of de facto global standards for the industry, according to the report.

New gas project – Two affiliates of South Korea’s Hyundai Motor Group, Hyundai Engineering & Construction and Hyundai Engineering, have signed a $2.4 bln contract with oil giant Saudi Aramco to build a gas processing plant, Seoul’s presidential office announced this week. The two Korean companies have been working on the first phase of Aramco’s Jafurah gas processing facilities project, Saudi’s largest unconventional non-oil associated gas field, after winning the order in 2021.

Big build – The Victorian state government has laid out the timeline for the re-establishment of the State Electricity Commission (SEC), designed as a state-owned enterprise to lead its renewable energy transition. The government released a strategic plan which set out three clear priorities of building out the renewable energy workforce, supporting the switch to all-electric households, and investing to accelerate the energy transition. The SEC will invest an initial A$1 bln towards building 4.5 GW of new power through renewable energy and storage projects. It said 2.6 GW of this generation target would be met by 2028. Energy and Climate Change Minister Lily D’Ambrosio described the plan as Victoria’s next “big build”.

AND FINALLY…

Patient moved to intensive care – A new study led by an international coalition of climate scientists warns that Earth’s vital signs have deteriorated to alarming levels, putting life on the planet at risk. Out of 35 planetary vital signs assessed, 20 have reached record extremes, including concerning trends in ocean temperatures, sea ice, and wildfires. The study highlights that government subsidies for fossil fuels doubled from $531 bln in 2021 to over $1 trillion in 2022. It also reports that Canada’s wildfires this year alone emitted more CO2 than the country’s total GHG emissions for 2021. For the first time, 38 days in 2023 experienced global average temperatures exceeding 1.5 degrees Celsius above pre-industrial levels. The researchers, led by Oregon State University, called for urgent action to address “ecological overshoot”, stressing that solutions must be grounded in social justice and equity. They recommend phasing out fossil fuel subsidies, transitioning to plant-based diets, and scaling up forest protection among other measures. (Phys.org)

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