Newsletters > CP Daily: Tuesday November 21, 2023

CP Daily: Tuesday November 21, 2023

Published 00:21 on November 22, 2023  /  Last updated at 09:06 on December 2, 2023  / Carbon Pulse /  Newsletters

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

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TOP STORY

EU’s carbon removal bill passes in full Parliament vote

The EU’s first draft legislation defining a framework for certifying carbon removals passed with a large majority during a vote in the full European Parliament in Strasbourg on Tuesday, paving the way for negotiations with member states and the European Commission for an agreement on the file.

EU lawmakers adopt positions on Net Zero Industry Act and UN climate talks

The European Parliament adopted on Tuesday its position on the EU’s proposed Net Zero Industry Act (NZIA), proposing a wider list of go-to technologies and moving towards ETS-funded sovereignty.

INTERNATIONAL

FEATURE: The end of easy oil extraction is on the horizon, paving the way for renewables

Global warming is not the only driver of the headlong rush to transition to green energy that has triggered a borrowing binge battle between the US and China – the world is also running out of cheap and easily extracted oil.

Government climate pledges are too reliant on land-based carbon sinks -report

Greater pressure should be placed in COP28 negotiations on countries to deliver fast and effective emissions reductions by phasing out fossil fuels and transitioning to low-carbon industry, seeing as a small number of high-emitting, high-income nations are overly reliant on land use to offset emissions in their climate pledges, according to a report published on Tuesday.

UK, South Korea will sign clean energy partnership to “double down” on climate commitments

The UK and South Korea are set to sign a clean energy partnership on Wednesday to boost cooperation on low-carbon technologies, renewables including offshore wind, and tackling climate change.

EMEA

ANALYSIS: EU utilities post double-digit drop in ETS-covered generation as hedging uncertainty adds to bearish mix

Eight of the largest fossil burning power companies in the EU each posted a year-on-year drop in ETS-covered output in excess of 14% over the first nine months of the year, leading analysts to consider the impact on EUAs of the increasing uncertainty of estimating utility emissions in light of clean energy expansion, and the bearish potential of a continued decline in forward hedging from the sector.

More or less than expected? Analysts mixed over impact of 2024 EUA auction volume announcement

The European Commission last week published projected EUA auction volumes for 2024, and analysts are mixed as to how the figure compared to their expectations.

Euro Markets: EUAs slide towards year-to-date low under pressure from weakening gas prices

Carbon prices in Europe tumbled on Tuesday to approach the year-to-date low reached at the start of the month, after a weak auction and amid pressure from a declining natural gas market, with participants again eyeing Wednesday’s Commitment of Traders report for insight into speculative activity.

Far-right, anti-climate policy party’s sudden ascent disrupts Dutch election campaign

Whether the Netherlands adopts a more ambitious climate agenda than that of the outgoing government will hinge on how much the electorate engages in tactical voting to keep the extreme right-wing out of government, as polls reveal a surge in popularity for the populist, anti-climate policy Party For Freedom (PVV) ahead of Wednesday’s vote.

Kenya president calls for EU contribution to African carbon credit market

The EU can help Africa achieve its climate goals by raising its demand for carbon credits, Kenya’s president William Ruto told the European Parliament on Tuesday.

Regulators announce increase to Swiss-EU ETS allowance transfer days for 2024

The EU and Switzerland have published the ETS allowance transfer window schedule for 2024, providing near-daily opportunities for units to flow between the linked carbon markets.

Sharp rise in value of land with natural capital potential bucks wider year-over-year downturn in UK commercial forestry -report

The cost of Britain’s commercial forestry has fallen for the first time in a decade, though the value of listed land with natural capital potential has soared, according to a new report.

AMERICAS

Pennsylvania governor will appeal RGGI court ruling

The legal battle over whether Pennsylvania can join RGGI through executive action will continue, following an appeal from Governor Josh Shapiro (D) of a Nov. 1 Commonwealth Court ruling that blocked the state’s regulations.

Canada sets aside up to C$7 bln to issue carbon contracts for difference

The Canada Growth Fund, a C$15 billion public investment vehicle, will allocate almost half of its capital to issue carbon contracts for difference (CCfDs) and offtake agreements, according to the federal government’s 2023 fall economic statement released Tuesday.

California’s power emissions increase in October, YoY decline slows down

California electricity sector CO2 emissions continued to decrease from the previous year’s levels in October, but at a more moderate pace than in recent months, as shares of natural gas CO2 output skyrocketed and renewables fell back, data published Monday showed.

RGGI compliance entities’ permit shortfall widens after Q3 auction

Allowance holdings of power sector emitters under the RGGI carbon market increased at the end of the third quarter even as their estimated short position widened, while traded volumes cratered through Q3, according to a report published Tuesday.

Rhode Island uses RGGI funds, US DOE monies for energy conservation grant programme

Rhode Island announced funding sourced from the Regional Greenhouse Gas Initiative (RGGI) and the US Department of Energy (DOE) on Tuesday for the state’s new energy efficiency grants for municipalities.

US IRA will fund $2 billion in climate justice grants

Community-driven programmes to install low- and zero-emission technologies, reduce GHG output, and improve climate resiliency are eligible for $2 billion in grants from the Inflation Reduction Act (IRA), the US EPA announced Tuesday.

Carbon removal firms partner to explore large-scale project development opportunities in Canada

Two carbon removal project developers have joined forces to explore the development of large-scale direct air capture (DAC) facilities in Canada.

US forest management strategies may negatively impact carbon sequestration, study warns

Tree-planting initiatives to increase CO2 sequestration, as part of forest management strategies supported by recent US legislation, may not offset the carbon emitted from related efforts to reduce the risk of wildfires, a new study warns.

ASIA PACIFIC

ID Market: National carbon exchange remains quiet two months after launch, but operator expects bigger things to come

Nearly two months since the official launch of Indonesia’s national carbon exchange the platform has seen little trading activity, with its operator and market participants raising several key issues holding it back, however growing international interest and further regulatory development will see the market grow, they said.

Indonesia takes another step to realising $20 bln JETP

Indonesia has launched its Comprehensive Investment and Policy Plan (CIPP) under the Just Energy Transition Partnership (JETP), which includes a $20-billion plan to invest in renewables as part of efforts to rid its power sector of coal.

South Korean carbon project developer gets listed on domestic exchange, eyes Article 6 investments

A major carbon credit project developer and trader in South Korea on Tuesday made its debut on a major domestic exchange, with plans to secure more carbon credits under Article 6 of the Paris Agreement.

Regional gas lobby launches study designed to understand cross-border CCS and crediting mechanisms

A Southeast Asian gas lobby group has launched a new carbon capture and storage accreditation study that will look at the best way to earn carbon credits.

Australia Market Roundup: Santos, Tokyo Gas to investigate e-methane production, South Australia passes hydrogen legislation

Australian oil and gas company Santos is partnering with Tokyo Gas to explore producing carbon neutral synthetic methane, or “e-methane”, in Australia, the former announced Tuesday, as the state of South Australia passed legislation supporting its renewables and hydrogen industry.

Malaysian state passes environment bill to underpin carbon market, tax

A Malaysian state has become the nation’s first to pass legislation that will support the generation and sale of carbon credits, and impose a carbon tax of companies failing to report on their emissions.

Emissions reduction criteria in Australia National Energy Objectives comes into force but key questions remain, analysts say

An emissions reduction requirement in Australia’s National Energy Objectives (NEO) came into effect as of Tuesday, however analysts say key questions remain around its implementation.

Australian iron giant finally sanctions hydrogen projects

Australian miner Fortescue took another step to trying to realise its vast clean energy hopes Monday with the sanctioning of two hydrogen projects prior to its annual general meeting in Perth at a cost of over $700 million.

Pakistan drafts policy framework to establish domestic carbon market -media

Pakistan’s federal government is working on a comprehensive policy framework to establish its domestic carbon market, the prime minister’s office said on Monday as reported by local media.

VOLUNTARY

Verra submits methods for ICVCM assessment, REDD revamp due next week

Moves to bolster confidence in the voluntary carbon market are gathering pace as certifier Verra on Tuesday submitted multiple methods for ICVCM integrity assessments, while announcing that its REDD revamp is due next week along with an update to the VCMI’s buyer guidance.

Climate Impact X suspends Kasigau REDD project from its nature-based index

Climate Impact X (CIX) has temporarily suspended credits from a troubled Kasigau corridor project (VCS 612) into delivery for its nature-based benchmark, Nature X, with immediate effect, a day after two senior staff members at the project were sacked in relation to ongoing investigation into sexual harassment and abuse allegations.

BIODIVERSITY (FREE TO READ)

EU pesticides bill reignites nature divisions among lawmakers

EU lawmakers facing a difficult time agreeing on a text to reduce the use of pesticides, with a debate in the European Parliament on Tuesday replicating some of the controversies seen earlier in the year for the bloc’s nature restoration bill.

FEATURE: Health companies reliant upon nature are among the first to engage with TNFD

Health companies reliant on functioning ecosystems and healthy water supplies for business continuity are taking the lead in reporting their nature dependencies through the Taskforce on Nature Related Financial Disclosures (TNFD) and striving to curb their impacts on the natural world, with several leading multinationals mapping their value chains to understand their biodiversity impacts more closely.

UK nature credit company raises £470,000 in third investment round

UK-based CreditNature has closed its third funding round at £470,000, increasing its valuation to almost £5 million, the company has said.

Plastic Credit Exchange addresses damning pollution reports

Marketplace Plastic Credit Exchange (PCX) has claimed parts of two reports raising concerns about pollution from plastic credits, linked to burning the material as fuel, are inaccurate.

Biodiversity Pulse: Tuesday November 21, 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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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

INTERNATIONAL

Fresh focus – The World Bank is just a few months away from running a mechanism for the forestry sector where it will be issuing certification for carbon credits, said Ajay Banga, the World Bank’s new president at the Singapore FinTech Festival last Friday. The pricing of the World Bank system will “be better and resources can move the right way,” he told the audience.  Strengthening the credibility and transparency of the voluntary carbon markets (VCM) is key to channel funding and resources to combat the climate crisis from developed nations to poorer regions, he said. The bank will ensure there are anti-logging safeguards and that credit certification for forestry is done in a reliable way, he said. By certifying green credits, the World Bank can improve the price of carbon and get money moving from rich nations to developing countries more effectively, said Banga. (eco-business.com)

Crusade against coal – France, with the backing of the US, plans to seek a halt to the private financing of coal-based power plants during COP28, set to kick off in Dubai next week. The plan will deepen divisions at the UN climate conference, Reuters reports, with India and China particularly opposed to any attempt to block the construction of new coal plants for their energy-hungry economies. The “New Coal Exclusion Policy” has already been shared with India, and the country’s related energy ministries did not respond to Reuters’ request for comment. Some 490 GW of new coal capacity, roughly equal to one-fifth of existing global capacity, is planned or under construction, mostly in India and China, according to officials. The new proposal provides for the OECD to set coal-exit standards for private finance firms whose financing could be tracked by regulators, rating agencies, and NGOs, two Indian officials have said.

CCS collab – Abu Dhabi National Oil Company (ADNOC) is teaming up with Australian energy group Santos to explore the development of a global carbon management platform to help customers in Asia Pacific cut emissions, and the two will also work together to advance CCS technologies and the development of a CO2 shipping and transportation network. The UAE’s national oil company is targeting a carbon capture capacity of 10 mtpa by 2030, equivalent to taking over 2 million internal combustion vehicles off the road. It was the first national oil company to announce a net zero emissions target, set for 2045, while the group CEO Sultan Al-Jaber is president-designate of COP28. (oilprice.com)

AMERICAS

Easing emissions – US emissions are expected to fall by 3% even as the economy is on track to grow by 2.5%, pointing to a decoupling of emissions and economic prosperity following two years when GHG output increased or was flat, E&E News reported Tuesday. That’s still well below the 6% annual emissions reductions required for the US to meet its Paris Agreement targets of slicing its GHG output in half by the end of the decade. The US Energy Information Administration said lower coal use caused output to decline by 3%, while data organisation Carbon Monitor said the drop was 2.5% over the first three quarters of the year. A warmer winter also put a damper on natural gas demand.

Wolf retreats – Wolf Carbon Solutions is withdrawing its permit application to build a carbon capture pipeline in Illinois that would transport up to 12 mln tonnes of CO2 annually to a storage site in the state, Reuters reported Tuesday. The move follows a recent recommendation by a staffer at the Illinois Commerce Commission against the 260-mile (418.4 km) pipeline construction citing concerns regarding safety and the uncertainty surrounding CO2 storage as well as the supplier. The pipeline is meant to capture CO2 from two ethanol plants owned by the multinational agricultural firm (ADM) in Iowa, and transport the carbon to a sequestration site managed by ADM in Decatur, Illinois.

Before the pipeline – White County, Indiana, has developed a zoning amendment in response to any carbon sequestration project interested in constructing pipelines or wells in the region, as part of its Area Plan Commission, local news outlet Monticello Herald Journal reported. A carbon sequestration project could only come into White County if a letter was presented from the authorizing board (White County Commissioners), and pipelines and wellheads would have to be setback 2,000 feet (609 metres) from schools, commercial buildings, churches, and residents. The proposing company is also required to provide training to all emergency responders and the environmental officer. Present CO2 pipeline projects in the Midwest have faced a number of regulatory hurdles across jurisdictions, leading some projects to be cancelled outright.

Train to net zero – The US Department of Energy (DOE) issued a request for information on Friday seeking to understand how to transform the rail sector into a net zero emitter, pointing out that trains account for 2% of the countries GHG output. The request seeks to understand what rail technologies would result in net zero emissions and what timeline is feasible for achieving the abatement target. In January, the DOE, the Department of Transportation, the EPA, and the Department of Housing and Urban Development set a goal of decarbonising the transport sector by 2050.

Low cost, low carbon – A draft study prepared for the Colorado Energy Office sees that a technology-neutral, least-cost approach to electricity generation would cut carbon emissions from the state’s power sector by 98.5% below 2005 levels by 2040. Fossil-fueled generation would meet about 1% of the state’s electricity use, with three quarters of electricity coming from in-state wind and solar. The draft study, completed by consulting firm Ascend Analytics, will inform the debate in Colorado’s next legislative session on expanding the state’s clean energy goals beyond an 80% greenhouse gas emissions reduction target for 2030. (Utility Dive)

Another peak – The New York Independent System Operator (ISO) will continue to operate four peak power plants beyond their expected May 2025 retirement date to maintain an adequate electric reliability margin in the most populous city in the country, Utility Dive reported Tuesday. ISO reported in July that rising demand and new emission limits on peak power plants will result in a 446 MW deficit in New York City’s reliability margin starting in the summer of 2025. Consolidated Edison, which delivers electricity to New York City, said it was unable to develop a solution in time but continues to work with the stakeholders on the issue. Generators on the Gowanus 2 & 3 and Narrows 1 & 2 barges will run for two more years and act as a “temporary solution” to the shortfall.

Amazing Alberta – Amazon is purchasing power generated from a windfarm in Alberta to supply its Web Services data centre and a fulfillment centre, Business Facilities reported Monday. The power-purchase agreement will see Amazon operate the 415MW Buffalo Plains wind farm. Canadian firm Borea is involved in the project as well. Amazon is currently five years ahead of its 100% renewable electricity operations goal, and now expected to reach the milestone by 2025.

Underestimated – Methane emissions from Alberta’s energy industry are underestimated by nearly 50%, according to a new study published in peer-reviewed scientific journal Nature Communications Earth and Environment. Lead author, Matthew Johnson, who heads Carleton University’s Energy and Emissions Research Lab, measured emissions at surface, plane, and satellite levels, assessing 3,500 different oil and gas facilities, alongside 5,600 wells. The president of the Canadian Association of Petroluem Producers noted the industry is on track to reduce methane emissions by up to 45%, but Johnson refuted the significance of the goal as the “baseline number is likely a large underestimate”. (CBC)

EMEA

Cross-border CO2 – Yara International has signed a binding commercial agreement with Norwegian CCS storage project Northern Lights to enable the first cross-border transportation and storage of CO2, originally produced from Yara’s ammonia production facility in the Netherlands. The fertiliser producer aims to reduce its annual CO2 emissions by 800,000 tonnes from its Yara Sluiskil facility as a result of the deal, which will see the CO2 liquefied and shipped by Northern Lights from the Netherlands to permanent storage on the Norwegian continental shelf, 2.6 km under the seabed. The liquefied CO2 will be shipped to Oygarden in Norway for storage in onshore tanks prior to onward transport via a subsea pipeline for injection into the offshore saline aquifer. Operations will start in 2025 and continue for 15 years. (Safety4sea.com)

Steel deal – ArcelorMittal is on the hunt for supplies of US LNG in what would be the first such deal for its European steelmaking operations, the FT reports. With the search in its early days, no decision has been made on the length or structure of a contract to supply LNG, but industrial peers of the world’s second-largest steelmaker have signed agreements for about 20 years. A deal would also follow ArcelorMittal’s joint venture with Nippon Steel in India when it signed a five-year LNG agreement with France’s TotalEnergies in 2021.

Faster flows needed – Investment into the development of European clean tech is too slow and unevenly spread out across EU member states, writes Ciaran Humphreys, clean tech expert at the European Climate Neutrality Observatory (ECNO) and a Research Fellow at the Institute for Climate Economics (I4CE), as reported by Euractiv. The EU’s Net-Zero Industry Act (NZIA) is unlikely to rectify this because the proposed investment package supporting the Act, the Strategic Technologies for Europe Platform (STEP), lacks muscle and would see just €10 bln of public funds invested across clean tech, deep tech like AI, and biotech, if passed, which is insufficient to spark a wave of EU-level growth, says Humphreys. Instead, to truly expand the continent’s clean tech manufacturing might, an EU-level Cleantech Investment Plan should be the priority, enough to place Europe on a comparable footing to the US’s Inflation Reduction Act (IRA), which can potentially trigger $1.2 trillion in climate public investments. In contrast, Europe clean tech lacks funding at every development stage, from lab research in universities to factory floor, with many private investors turning to the US or China to spend their money rather than in risky cleantech Europe. To turn things around, the EU needs to significantly scale up public funding and make it available to innovators in all member states, says Humphreys.

Space rescue – The EU will call on satellites to help prevent the destruction of its forests and to fill gaps in data gathering, such as measuring the impact of drought or damage by pests like the bark beetle, Bloomberg reports. On Wednesday, the European Commission plans to propose establishing a forest-monitoring system using aerial information from its Copernicus Sentinel satellites and other data sources, while member states will be encouraged to develop forest plans for over the next 50 years. The effort is expected to help tackle the rising risk of wildfires, pest outbreaks, droughts, and heatwaves as the continent grapples with rising temperatures.

Building funds – Vizcab, a French SaaS platform that calculates the life cycle assessment of construction projects to help them reduce their carbon impact, has raised €5 mln in Series A funding, according to a release Tuesday. The investment will be used to support its continued growth as it aims to empower net zero building strategies with AI-driven solutions and expand its operations across Europe. The round was led by Kompas, an early-stage VC firm focused on the decarbonisation of the built environment and the manufacturing industry, with participation from Rise PropTech Fund, Cemex Ventures, and Altur Investissement alongside existing investors A/O and Banque des Territoires.

ASIA PACIFIC

Sequence initiated – Main Sequence Ventures, a VC fund spun out of Australia’s CSIRO, has led a $2.5 mln fund raising for carbon accounting software start-up Avarni, Start-up Daily reports. It’s the climate tech’s system-as-a-service platform’s third raise since it was founded in 2021. Supporting Main Sequence in the latest round were Brisbane early-stage fund Sprint Ventures and Afterwork Ventures. Avarni uses AI to measure a company’s lifecycle emissions and then help reduce them. The company uses raw supply chain and spending data to help customers understand their Scope 3 emissions and enable supplier engagement on how to reduce them.

More clean energy – North China’s Inner Mongolia, rich in wind and solar resources, plans to increase its installed new energy capacity to over 150 mln kilowatts as of 2025, more than doubling from 2022 levels, state-owned People’s Daily reports. The region will see its installed capacity for wind and solar power reach 98 mln kW and 52 mln kW, respectively, by 2025, the local government said.

SHIPPING

Standard bearers – Shipping industry associations ICS and IBIA have submitted a joint proposal to the UN International Maritime Organization (IMO) – for a Global GHG Fuel Standard as a candidate measure to help meet the IMO’s mid-century net zero emissions goal. The proposal is due for discussion at the IMO’s next environment committee meeting in March. The exact required reductions in the standard would be subject to negotiation between governments, with the ICS/IBIA proposal providing for a streamlined voluntary “energy pooling compliance mechanism” to address the possibility of fuel producers being unable to supply new fuels in sufficient quantities. Read Carbon Pulse’s latest on efforts to decarbonise shipping. (Manifold Times)

VOLUNTARY

Sharing is caring – Normative, a carbon platform for corporates, announced its Carbon Network on Tuesday, which enables businesses to exchange primary data from suppliers across value chains and access climate expertise from consultants and service providers like Nordea, PwC, and Zurich Insurance Group. The network will play a vital role in making carbon visible for everyone, so that it can be managed and reduced, the Swedish firm claims. The aim is that firms can strategically plan and implement reduction initiatives targeting Scope 3 emissions.

AND FINALLY…

Zero by night – Radisson Hotel Group is launching “Net Zero Nights” during COP28, making all guest stays in its 16 UAE hotels net zero in terms of Scope 1 & 2 emissions. The group will purchase renewable energy certificates to offset electric emissions and use offsets from the Rimba Raya REDD+ project to address non-electric emissions. Radisson said its own journey to net zero includes global sustainability initiatives and science-based targets in line with the Paris Agreement. The group is implementing measures like greening hotel buildings, transitioning to renewable energy, and hosting carbon-neutral meetings. Key strategies include enhancing energy efficiency in hotel buildings, shifting to renewable energy, and green operations, with a goal to halve its environmental footprint by 2030.

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