Newsletters > CP Daily: Monday November 20, 2023

CP Daily: Monday November 20, 2023

Published 01:27 on November 21, 2023  /  Last updated at 01:27 on November 21, 2023  / /  Newsletters

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

ANALYSIS: Observers welcome late agreement on Article 6 crediting, concerned by gaps

International carbon market stakeholders have broadly welcomed the last-minute adoption of recommendations for how the UN crediting mechanism under Article 6 of the Paris Agreement should operate, but also pointed to uncertainties that risk diluting ambition and noted the challenge of deferring many key decisions given the ambiguous nature of certain sections of the text.

EMEA

EU extends state aid flexibility for another six months

The European Commission has extended part of the bloc’s state aid Temporary Crisis and Transition Framework by six months, meaning member states can continue providing additional support to certain EU ETS-covered entities hit by the energy crisis and ongoing war in Ukraine.

UK net zero cluster to build and test new direct air capture pilot

A new direct air capture demonstration unit will be installed at the UK’s first and largest net zero industrial cluster in northeast England, resulting from a partnership between a local university and a climate tech company.

EU’s Von der Leyen announces second Hydrogen Bank auction

The second round of EU auctions to support home-grown green hydrogen capacity buildout will take place in spring 2024, European Commission President Ursula von der Leyen announced on Monday.

Euro Markets: EUAs little changed as early weather-driven buying fades along with energy markets

European carbon prices ended Monday little changed after a weather-driven morning rally faded in the afternoon, though sources said speculative traders were working to limit increases as short-biased positions continue to dominate sentiment.

First auction for 2023 Swiss carbon permits sells out

Buyers scooped up all the carbon permits on offer in the first of two Swiss ETS auctions for 2023-vintage units.

AMERICAS

Canada’s $14.6 billion CCUS and clean tech legislation doesn’t close gap with US IRA -experts

Both a proponent and an opponent of carbon capture utilisation and sequestration (CCUS) agree that the US Inflation Reduction Act (IRA) will out-incetivise funding for Canadian technology, despite the expected C$20 billion ($14.6 bln) legislation on Tuesday enshrining a CCUS tax credit first announced in 2021.

Canadian watchdog estimates a C$1.1 bln impact in fuel charges proceeds following carbon levy exemption, C$3 bln in rebate payments

Canada’s recent carbon policies would bring down tax revenue by over C$1 billion and increase rural supplement payments to $3 bln, says the budget watchdog.

PREVIEW: Imminent Brazil ETS vote faces several unresolved issues ahead of COP28

Brazil’s lower house of Congress will hold a crucial vote on a national Emissions Trading System (ETS) legislation this month amid negotiations over the programme’s managing body, sectoral inclusion, and tax reform, two experts told Carbon Pulse.

Brazilian state signs $3 million agricultural carbon credit agreement with major bank

The Brazilian state of Roraima has signed a letter of intent (LOI) with a large Brazilian bank to facilitate $3 million in carbon credit funding for farmers who invest in sustainable agriculture.

RGGI Market: RGAs surpass Cost Containment Reserve trigger levels on modest volume

RGGI allowances (RGAs) again broke a record settlement price for the benchmark contract on small volume, while market participants speculated the logic behind breach of the Cost Containment Reserve (CCR) trigger level.

California gasoline sales rise at slower pace in August, while diesel’s decline decelerates

California gasoline sales and emissions increased only slightly in August compared to the previous year, while diesel consumption and greenhouse gas output lagged 2022 levels by the smallest margins seen so far this year, according to state data published Monday.

US charity calls for project proposals on forest and community revitalisation

A South Carolina-based philanthropic endowment announced a request for proposals (RFP) on Monday as part of its new Impact Investing Program that seeks to deploy $5 million by 2024 to advance sustainable transformation of forests and forest-reliant communities.

ASIA PACIFIC

China seen on track to reach its 2030 climate goal, despite mixed expectations on coal consumption -survey

China is considered on track to reach its climate commitments for this decade, despite observers having mixed expectations on the country’s coal consumption in the coming years, a report has found.

Fossil fuels dominant but falling in China Belt & Road Initiative overseas power projects -report

More than half the installed power capacity from the China-initiated Belt and Road Initiative (BRI) is coal and gas, though their share has declined over the past two years, a report by energy consultancy Wood Mackenzie has found.

PNG industry group calls for govt to establish Customary Land Department

An industry lobby group has urged the government of Papua New Guinea to establish a Customary Land Department (CLD) in the country, saying it could both protect the rights and interests of indigenous communities and foster sustainable development.

Chinese energy regulator to support inclusion of biodiesel in national carbon offset programme

China will promote the inclusion of biodiesel projects in the national carbon offset scheme, as part of a broader plan to popularise the applications of green fuels in the country.

Japan approves 26 new projects under domestic offset scheme

Japan has given the green light to the registration of 26 projects under the J-Credit scheme, which could generate roughly 3.1 million carbon credits over their lifetimes, as the country is seeking to expand the supply of domestically issued offsets.

Japan, Malaysia set 2028 start date for large-scale CCS venture

A consortium of Japanese companies has signed with Malaysian oil and gas giant Petronas to commercialise a carbon capture and storage project by 2028.

INTERNATIONAL

Global goal to triple renewables within sight as governments are already planning to double capacity -report

The world is already planning for a doubling of renewable power capacity by 2030, analysts said in a report published on Tuesday, adding that this should give confidence to governments that a global agreement to triple renewables this decade is achievable.

Top 1% richest emit equivalent to poorest two-thirds of global population -NGO

The super-rich are responsible for 16% of global CO2 emissions, about the same as the emissions from the poorest 66% of humanity in 2019, according to a report by an NGO, that recommended a 60% income tax on the top 1% to lower their emissions and raise funds for the energy transition.

Countries must increase ambition or face global warming of up to 2.9C, says UN report

Nations must go further than their current Paris Agreement pledges in order to be on track to meet targets to curb global warming or face a temperature rise of up to 2.9C this century, according to a UN report Monday that has prompted UN chief Antonio Guterres to urge leaders to “drastically up their game”.

VOLUNTARY

Wildlife Works Carbon sacks two employees in relation to sexual abuse allegations at Kasigau Corridor

Carbon project developer Wildlife Works Carbon (WWC) has fired two staff members at the Kasigau Corridor REDD project in Kenya in relation to its ongoing investigation into sexual harassment and abuse allegations, the company said Monday, whilst apologising to the individuals affected.

Antigua and Barbuda environment ministry distances itself from “trillion-dollar” blue carbon venture

Antigua and Barbuda’s environment ministry has distanced itself from a company purporting to be developing blue carbon projects there worth up to a trillion dollars, despite the venture listing the Caribbean island nation’s prime minister among its leadership team.

Italian startup raises €1.75 mln in pre-seed funding towards DAC tech

An Italian climate tech startup has raised €1.75 million in pre-seed funding to help develop its direct air capture (DAC) technology.

VCM Report: Carbon credit demand boosted as oil major returns to the market

Large volumes of REDD avoided deforestation changed hands at rock bottom prices last week amid the continued fallout from the negative press coverage about the sector, while demand in general was lifted by the reappearance of an oil major in the market retiring a large volume of credits.

BIODIVERSITY (FREE TO READ)

Fingers point at lobbyists as latest round of plastic talks come to barren end

A third round of plastic talks ended in Nairobi Sunday, with negotiators failing to achieve the goal of agreeing a draft treaty text for approval next year and observers blaming excessive influence from fossil fuel and petrochemicals lobbyists.

Better prioritisation can make land protection to avoid mammal extinctions twice as effective, study finds

A new approach to deciding which areas get selected for protection can save almost twice as many mammals from extinction globally, a study has found, with more than half of the most crucial habitat located in just seven countries.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Carbon Pulse has teamed up with CME Group to provide the market operator’s 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

SCIENCE & TECH

We did it – Nov. 18 was the first time in recorded history that the global 2m surface temperature breached 2.0C above the 1850-1900 IPCC baseline, The Washington Post reported Monday. Friday marked the first time that everyday fluctuations around global temperature norms, which have been steadily climbing for decades, swung the planet beyond the dangerous threshold. Zeke Huasfather, a climate scientist with Stripe and Berkeley Earth, said that while a single day above 2C should not be read into too much, it was a “startling sign” of the level of extreme global temperatures the world has experienced this year, more than likely to be declared the hottest on record. The Paris Limit for global temperatures is marked over a long-term average, rather than a single day, or year.

EMEA

JET stream – South African President Cyril Ramaphosa completed an implementation plan for South Africa’s Just Energy Transition Partnership (JET-P), Bloomberg reported Friday. It is expected that the implementation plan, which facilitates the flow of JET-P funding streams to specific projects, will be approved by the country’s cabinet. The plan has not yet been released publicly. The JET-P received an infusion of €500 mln in concessional loans from German development bank KfW Friday as well.

Indirect emission costs – The European Commission approved some amendments to a Spanish state aid scheme, including €5.61 bln budget increase, to compensate energy-intensive companies for higher electricity prices resulting from the impact of carbon prices on electricity costs under the EU ETS. The compensation is granted to eligible companies through a partial refund of costs incurred between 2021 and 2030, with the final payment to be made in 2031.

Waste not, want not –  A private fund focused on building power projects to reduce energy wastage has received backing from the European Investment Fund (€125 mln) together with M&G Investments and the Ireland Strategic Investment Fund. The Green Energy Solutions Fund, run by Sustainable Development Capital (SDCL) reached its €650 mln fundraising target last month and aims to invest in projects such as waste-to-heat plants and solar projects. The fund has agreed to deploy two-thirds of its capital inside the EU on efforts to reduce energy wastage from where it is produced to where it is consumed. (Reuters)

Hydrogen scrapped – A large-scale green hydrogen plant in northern Germany has been scrapped due to high construction costs, with investors claiming the project carried too much economic risk despite the agreed subsidies. The consortium of investors, including Heide refinery, Danish utility Orsted, and French utility EDF’s German subsidiary Hynamics, pulled out of plans for the project’s first stage — a 30 MW electrolyser. The “H2 Westküste” hydrogen production plant was being supported by €36 mln, of which €1 mln has already been spent. However, the “Hyscale 100” project, an even larger electrolyser plant at the Heide refinery, is still on track and is being run by a similar consortium, according to the regional environment minister. (Clean Energy Wire)

Both sides benefit – Some €4 bln has been pledged for renewable energy investments through the Africa-EU Green Energy Initiative by 2030, German chancellor Olaf Scholz has announced, with the capital set to benefit both sides as Germany seeks to import large quantities of green hydrogen, he said. The pledge was made during the summit of the G20 group of influential countries’ Compact with Africa initiative in Berlin, which brought together the leaders of several African and European states, aiming to improve Africa’s role in developing renewable energy, green hydrogen, and critical raw material extraction. (Clean Energy Wire)

“Climate apartheid” – Climate change is a “social crisis” that exacerbates social disparities, said Migration activist Carola Rackete, who has been selected as the top candidate for the far-left Die Linke party, alongside GUE/NGL leader Martin Schirdewan and MEP Ozlem Demirel in next year’s EU elections. Indicative polls show that Die Linke has a fair chance of retaining its five seats in the European elections and would thus remain an essential pillar of the GUE/NGL group in the EU Parliament, contrary to earlier predictions that claimed it might lose its parliamentary group status, Euractiv reports. Rackete, who is not a party member, rose to prominence in 2019 as a ship captain rescuing migrants in the Mediterranean. With Rackete’s candidacy, Diel Linke wants to redefine itself as open to activists from green and social movements, Die Linke co-leader Janine Wissler described.

ASIA PACIFIC

Onshoring –  Macquarie Asset Management has launched an onshore renewable energy business to develop, build, and operate large-scale renewable energy projects in Australia and New Zealand, the company announced Monday. The new company – Aula Energy – has an initial portfolio of 4 GW of planned projects, which it said could support the energy transition. The first cab off the rank will be the Boulder Creek Wind Farm in Queensland, expected to begin construction next year. The company is also working alongside Green Wind Renewables to deliver some 2.4 GW of wind projects in Western Australia, to be connected to the South West Interconnected System (SWIS) – the state’s largest grid. The WA government announced A$700 mln in funding to upgrade the SWIS to fit larger renewable energy projects.

Be the channel – Guangzhou, one of China’s economic powerhouses, has kicked off a pilot investment scheme to spearhead a climate financing push in the Greater Bay Area, South China Morning Post reports. The platform, based in Nansha district, was launched last week to channel debt and equity financing to companies involved in climate change-related projects. A total of 95 projects had submitted funding applications to the scheme for a total investment of 72.7 bln yuan ($10 bln), according to state-owned Shanghai Securities Journal.

Sun is shining – A report released by the New Delhi-based Council on Energy, Environment and Water (CEEW) last week said that India has a massive 637 GW of residential rooftop solar energy potential, equivalent to over 250 mln households across the country, the think tank said in a statement. The report found out that if just one-third of this solar potential is deployed, it may be able to support the entire electricity demand of the residential sector of the South Asian country. The report did a bottom-up analysis across 21 Indian states that cover 97% of the country’s population and found that 60% of the residential rooftop potential is concentrated in just seven states of Uttar Pradesh, Maharashtra, West Bengal, Odisha, Rajasthan, Andhra Pradesh, and Tamil Nadu, according to the statement.

AMERICAS

SEC step back – US Securities and Exchange Commission (SEC) officials have been telling lobbyists and corporate executives in recent days that the agency may be scaling back proposed Scope 3 emissions reporting requirements, Reuters reports. In private meetings, some SEC officials have said that mandating Scope 3 disclosures could make the rule more vulnerable to legal challenges which, if successful, could tie the agency’s hands when writing other rules. The SEC’s proposed rules require publicly listed companies to disclose climate risks, including their Scope 3 emissions when they are “material” and when companies have set reduction targets for them. The agency has said that such information is important for investors’ due diligence, but companies have countered that the data would be hard to produce and legally contentious.

CO2 pipeline intervenor – The city of Bismarck, located in North Dakota, has filed a petition to intervene in the regulatory proceedings regarding Summit Carbon Solutions’ efforts to get a state permit for its Midwest Carbon Express CO2 Pipeline project that would be sited near the city. The proposed $5.5 bln, 2,000 mile (3218 km) pipeline would carry 18 mln tonnes of CO2 emissions from over 30 ethanol plants in the Midwest, to be permanently stored underground in North Dakota. The case first had its permit denied by the North Dakota Public Service Commission (PSC) in August, but has since been reopened after the company petitioned the PSC to reconsider in September. The pipeline is not anticipated to begin operations until early 2026, roughly two years later than the original timeline. (The Bismarck Tribune)

Not without a fight – Dominion Energy, Virginia state’s largest utility provider, faces strong pushback from the Chesterfield community, where it has proposed to build a new natural gas power plant despite a 2020 law that requires the company to generate all of its power using only renewable energy by 2045. The company has referred to the plant as a “peaker” plant, outlined to only operate during peak electrical demand. But residents have expressed deep concern, calling the project a “slap in the face”, citing negative health impacts and disproportionate effects on people of colour. (Inside Climate News)

Amazon application – The Brazilian state of Amazonas is extending the period to submit REDD+ project proposals by 60 days to Jan. 16, 2024, according to a press release from the State Secretariat for the Environment (SEMA). The approved projects will be announced on Feb. 27, the release said. The original notice calling for submissions was posted back in June and applicants must be registered with SEMA to apply. On Nov. 14, Amazonas more than doubled its accredited entities to a total of 25.

VOLUNTARY

Buy the sky – Credit purchasing platform AVID Climate LLC announced in a Monday press release it was buying an unspecified number of credits from aviation climate science firm, SATAVIA. The emissions reductions the credits come from are by reducing the impact of contrail formation, or the trail of cloud-like vapor that planes leave behind. SATAVIA reduces the impact of contrails by using predictive weather modeling.

AVIATION/SHIPPING

Adding sus in sustainability – Major US airlines claim to be focusing on slashing emissions by dramatically increasing the use of sustainable aviation fuel (SAF), but their rhetoric does not match their actions, Leader Post reports. For example, United Airlines says it is investing in more SAF production than any other airline in the world, but its SAF consumption remains far behind several European airlines. United consumed 2.9 mln gal (11 mln litres) of SAF last year, representing 0.08% of its fuel supply. Meanwhile, Air France-KLM used 13.9 mln gal (52.6 mln litres) of SAF, making it the world leader by volume. That amounted to 0.59% of its fuel consumption, more than seven times United’s percentage. The US also trails behind other nations in adopting SAF policies – for example, EU rules require 2% SAF usage by 2025, 20% by 2035, and 70% by 2050. However, United and other US carriers strongly oppose any such mandates on their home turf, arguing that the airlines are already voluntarily pursuing sustainable fuels and that requiring their use before adequate supplies exist will cause prices to soar.

AND FINALLY…

Hollow victory – Aviram Azari, a private investigator and Israeli citizen, was sentenced to 80 months in prison last week for orchestrating a hacking operation targeting anti-Exxon Mobil climate activists. Azari, who has pleaded guilty, directed hackers to breach the email accounts of activists involved in the #ExxonKnew campaign. Despite the use of stolen material by Exxon in court and on its website, the oil company has denied any knowledge of or involvement in the hacking. Azari’s operation, which earned him $4.8 mln from 2014 to 2019, targeted not only climate activists but also financial companies and government officials globally. However, aside from a defunct German financial firm, none of his clients have been publicly identified. Legal experts note the difficulty in prosecuting entities that hired Azari, as hiring a private investigator is not illegal and companies rarely explicitly request illegal activities. The US attorney for the Southern District of New York has not confirmed whether the investigation will extend beyond Azari’s sentencing. Environmentalists see Azari’s punishment as a partial victory, hoping to uncover who financed his activities. His activities have been linked to Exxon’s defence in several climate liability lawsuits, including a class-action lawsuit by Puerto Rican municipalities against the oil company for misleading the public about fossil fuels’ environmental impact. (E&E News)

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