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TOP STORY
ANALYSIS: Experts mull impact of potential forest carbon split under Article 6
Countries are already advancing plans to trade emissions reductions from forest carbon activities under Article 6.2 of the Paris Agreement, yet a decision on the eligibility of such initiatives under the Paris pact’s Article 6.4 centralised carbon crediting mechanism is not imminent, a potential misalignment that has experts at odds.
INTERNATIONAL
Carbon pricing revenues stabilise above $90 bln in 2022
Revenues from carbon pricing mechanisms reached $93 billion last year, slightly lower than the prior year, with more than half of this total specifically redirected towards climate activities, according to a report from a group of climate economics researchers.
VOLUNTARY
Critics cry foul as Verra unfreezes credit issuance from African soil carbon project
Certifier Verra has given the green light for carbon credit issuance from a huge soil carbon project in Africa to restart following a quality control review, although detractors of the venture have called the investigation a “shocking whitewash” that failed to address methodological flaws.
EMEA
EU and Canada launch Green Alliance with carbon markets in mind
The EU and Canada established on Friday a Green Alliance to strengthen their climate cooperation, including an aim to cover over half of global emissions with carbon pricing policies.
EU to publish plan to help power grids handle the coming influx of renewables
The European Commission will put forward an action plan for upgrading the bloc’s electricity grids in which it estimates €584 billion in investments are necessary by 2030 to deal with the influx of renewable energy, according to a leaked document seen by Carbon Pulse.
EU should spend 4% of annual GDP to meet 2040 emissions goals, avoid heavy climate costs, says report
EU member states could avoid spending billions on climate change-related costs by the end of this century if they spend roughly 4% of their GDP per year on measures to reduce emissions 90% by 2040, according to a study by a Dutch consulting firm.
Tanzania urges region to unite against foreign carbon companies, Guyana to call for inclusion of forests in Article 6 -media
Tanzania has urged East African heads of state to take a common stance ahead of COP28 in opposing the dominance of foreign firms in the region’s carbon trading activities, according to domestic media sources.
Euro Markets: EUAs end little changed on day and week as early gains unwind amid energy weakness
European carbon prices posted a marginal advance on the day and week, after earlier increases had given rise to speculation that the month-long decline fuelled by speculative selling may have come to an end as the expiry of the December contract approaches, while energy markets also ended little changed after a late decline on an uncertain weather outlook.
Second physical carbon allowance ETC launches in Europe
A second physical carbon exchange-traded commodity (ETC) that tracks EU Allowances has launched in Europe.
AMERICAS
WCI Markets: CCAs volumes surge, WCA prices continue ascent ahead of holiday weekend
California Carbon Allowance (CCA) prices seesawed ahead of Q4 WCI auction results published on Wednesday as transactions of hit peak volume just before US Thanksgiving, while Washington Carbon Allowances (WCAs) saw a rise in both price and volume, seemingly unaffected by WCI auction results.
Paraguay ARR carbon project to sequester 30 mln tonnes, generate biofuel from reforestation of cattle lands
A Dutch company plans to reforest degraded cattle lands in Paraguay to sequester 30 million tonnes of CO2e over the project’s 30-year lifetime, one of the largest ARR projects of its kind to be registered by Verra, it announced on Friday while flagging co-benefits of creating seedcake for cows and biofuel for planes and vehicles.
ASIA PACIFIC
CN Markets: CEA trading volume plummets after primary compliance deadline passes
Trading volume in China’s carbon market plunged over the past week despite stable allowance prices, as most major Chinese emitters have fulfilled their obligations now that the primary compliance deadline set by the government has passed.
Pakistan considering cap-and-trade system for its carbon market, official says
The federal government of Pakistan is considering a cap-and-trade model for its imminent carbon market, an official said according to local media.
South Korea likely to postpone ETS policy update -media
South Korea may push back the timeline for the release of a basic plan underpinning the next phase of the domestic carbon market, which has been hampered by an oversupply of emissions permits, local media reported.
New Zealand ETS review dumped as National-led coalition govt finalises cabinet line up, party agreements
After weeks of negotiations, the National, Act, and NZ First government on Friday revealed the makeup of their cabinet, having agreed to a power sharing arrangement which says the review into the country’s emissions trading scheme will be scuppered.
Rio Tinto acquires stake in Australian carbon project developer
Anglo-Australian miner Rio Tinto has bought a stake in a local Australian carbon project developer to secure a supply of carbon credits to offset emissions from its operations under the Safeguard Mechanism.
Japanese university buys into DAC venture
A Japanese university will invest in a direct air capture (DAC) venture that aims to begin capturing CO2 via nano-separation membranes later this decade.
Philippines signs MoU with climate tech firm to build ITMO registry, gets ready for Article 6 market -media
The Philippines has signed a memorandum of understanding (MoU) with a local climate tech firm which will help the nation to build an ITMO registry, setting the stage for the country to enter the carbon market, local media reported Friday.
BIODIVERSITY (FREE TO READ)
Swedish drone firm gets €2.7-mln grant to “transform” forestry
A Swedish drone firm has been granted a €2.7-million grant by the government for a three-year project to refine forest-thinning technology it says will reduce the need for energy intensive, habitat-wrecking heavy machinery on the ground.
Responsible mining commission backed by $11 trillion of investors
The Global Investor Commission on Mining has been backed by 82 investors with over $11 trillion in assets collectively under management, with the aim of making the sector more socially and environmentally responsible by 2030.
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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
Stark reality – The daily atmospheric CO2 readings from Mauna Loa volcano in Hawaii are now at 422.36 parts per million (ppm), which is 5.06ppm more than the same day last year, and at less than a week before COP28 kicks off in Dubai — a sobering reminder of humanity’s lack of progress in so far tackling climate change. Exactly a decade ago, the concentration was at 395.64ppm, with the scientific community concerned about the effects on the weather if we were to pass the 400 mark. Now we are well in excess of it, the catastrophic heatwaves, storms, droughts, and floods occurring around the world are proof that their fears were justified. The rise in CO2 levels over the past 12 months is probably the largest ever recorded and more than double the last decade’s annual average, reports the Guardian.
Trading places – The ICVCM announced that Gabriel Labatte has been appointed as co-chair of its Expert Panel, alongside Pedro Barata and Daniel Ortega-Pacheco. Labatte, who is head of the Climate Mitigation Unit and Global Team Leader of the UN-REDD Programme of the UNEP, replaces Lambert Schneider who has stepped down as co-chair but remains a member of the Expert Panel. The panel guides the Integrity Council Board on technical issues, and is made up of nine leading carbon market experts with long-standing experience in the environmental and social integrity of carbon markets. It is then supported by 11 experts with specialised expertise in key topics.
EMEA
Adding to the pot – The UK will join the US and EU in pledging money to the loss and damage fund at the upcoming COP28 Summit, with Prime Minister Rishi Sunak set to attend the two-week conference to demonstrate that the UK remains committed to reaching net zero by 2050 after his recent moves to water down the country’s green agenda, Bloomberg reports. The final amount committed by the UK is yet to be decided, say people familiar, though it is likely to come from the country’s £11.6 bln International Climate Finance pot already ring-fenced by policymakers for the five years to 2026. The EU has previously said it will contribute “substantial” commitments, while the US has said it will add “several million dollars”. The UK will also unveil around £500 mln of new international climate funding for forests at the summit and is also expected to issue a joint statement on expanding nuclear fuel alongside Canada, France, Japan, and the US, the people said.
Electric future – Nissan is leading the charge on a £2 bln investment in its car plant in Sunderland, northeast England, to make two new electric car models at the site and to also fund the building of a third UK battery factory, the FT reports. The company plans to invest £1.12 bln to make electric replacements for the Qashqai and Juke models that it currently manufacturers alongside its electric Leaf at the factory, while the remaining investment will go towards the battery factory and supporting energy infrastructure, it said. The investment is accompanied by government funding of potentially hundreds of millions of pounds, and supports Nissan’s target to only sell electric vehicles in Europe by the end of the decade. The Sunderland factory is expected to only produce electric models by 2030.
Making friends – The Swedish Energy Agency announced that Sweden will soon start to implement its first mitigation activity in Ghana, having signed an MoU in 2021 to enter into bilateral climate cooperation under the Paris Agreement. The project will increase Ghana’s electricity production from solar energy, accelerating the country’s transition to a sustainable energy system, the agency said in a release Friday. The project will lead to the installation of roof-mounted solar panels with battery storage for commercial and industrial facilities across Ghana. This will displace the use of diesel-powered backup generators and grid electricity, reducing emissions by approximately 165,000 MtCO2e by 2030.
ASIA PACIFIC
Up to standard – Australia is seeking feedback to inform development of a fuel quality standard for renewable diesel. Renewable diesel will help reduce emissions in the liquid fuels sector as Australia works towards the transition to net zero emissions by 2050, the government said. A renewable diesel standard will help to expand the market for the fuel, and reduce GHG emissions. The consultation will accept submissions until Feb. 2, 2024.
Sod turning – Indonesia began construction of a CCUS project in West Papua province operated by BP, with a ground-breaking ceremony attended by President Joko Widodo Friday, Reuters reports. The CCUS project has the potential to store up to 1.8 gigatonnes of CO, according to an energy ministry statement. Earlier this year, an energy ministry official said BP would invest $2.6 bln in the project, with the first injection expected in 2026. BP did not give an investment figure. Indonesia wants to develop CCUS and CCS projects across the country, estimating it has carbon storage capacity of 8 gigatonnes in depleted oil and gas reservoirs and 400 gigatonnes in saline aquifers. There are currently 15 CCS and CCUS projects in various stages of development, energy ministry data shows, with a combined investment of nearly $8 bln.
Chasing the sun – Korean carmaker Hyundai Motor has signed a power purchase agreement (PPA) with its affiliate Hyundai Engineering & Construction (Hyundai E&C) as it pledged to achieve carbon neutrality at most of its subsidiaries by 2045, the Korea Economic Daily reports. Under the deal, Hyundai E&C will supply 64 MW of solar-cell-generated electricity to the automaker by 2025 for use at its main car manufacturing plant in Ulsan. That will help slash 39,000 tonnes of carbon annually, equivalent to removing 23,000 passenger cars from the roads. Hyundai Motor also plans to spend more than 200 bln won ($154 mln) by 2025 to build power-generating facilities using solar cells at its domestic plants.
Overseas hydrogen project – Seoul-based Samsung Engineering has kicked off a green hydrogen and ammonia project (H2biscus) in Malaysia through cooperation with Lotte Chemical, Korea National Oil Corporation, and Malaysia’s SEDC Energy, it announced this week. The Sarawak-based project, to be completed in 2024, includes a green hydrogen facility with an annual capacity of 150,000 tonnes and a green ammonia conversion plant with a capacity of 850,000 tonnes, according to a statement. Engineering, procurement, and construction (EPC) is expected to begin at the end of 2024 after a final investment decision is made, and commercial production of hydrogen is expected for early 2028.
AMERICAS
Political price – Electricity and fuel costs are higher in US states controlled by Democrats than they are in states controlled by Republicans, a report from the American Legislative Exchange Council, Tampa Free Press reported Friday. Seven of the eight highest average retail electricity prices are California, Massachusetts, Rhode Island, Connecticut, Vermont, New York and New Jersey, all states with either a green energy mandate or a cap-and-trade programme. Meanwhile, the most affordable electricity in the US can be found in the Republican-controlled states of Idaho, Wyoming, Utah, Oklahoma, North Dakota, and Louisiana, the study found. Additionally, gas prices are cheapest in Republican-controlled states of Mississippi, Arkansas, Oklahoma, and Missouri, while most expensive in Democrat-controlled states of California, Washington, Oregon, and Illinois.
Future fund – Brazil announced its intention to propose an Amazon conservation fund at COP28 in Dubai, which will measure its success in hectares protected rather than in carbon stored, Reuters reported Thursday. Correa do Lago, Brazil’s top climate diplomat, told a ministerial meeting of Amazon rainforest countries about its intention to make the proposal on Thursday. The fund would be run by Brazil’s national development bank, BNDES.
Petro plan – The largest oil company in Brazil, Petrobras plans on investing $11.5 bln in low carbon technologies over the 2024-2028, more than double its prior plan, Monitor do Mercado reported Thursday. Biorefining, offshore wind, solar, carbon capture, utilization and storage, and hydrogen will all be included in the investment. The plan is part of a $102.bln investment plan, the vast majority of which is going to oil and gas ventures. Petrobras estimates 60% of its revenue will go to taxes and government fees over the period.
Rain reprieve – Emissions from Brazil fell 8% year-over-year in 2022, but were still the third-highest since 2005, Folha reported Friday. Decreased deforestation and lower use of thermal power plants were behind the output decline. Abundant rainfall fuelling hydropower plants also reduced demand for coal-fired power. The 2.3 bln tonnes of CO2e emitted by Brazil in 2022 was the final year of former President Jair Bolsonaro’s term, while the two higher years of emissions also came during his administration, in 2019 and 2021.
AND FINALLY…
The COPs play favourites – A study by the University of Leeds in the UK has found that the UN’s COP climate meetings are organised in such a fashion that is more beneficial to richer nations than to poorer ones. The study was based on an analysis of the previous 15 COPs and found that it was impossible for poorer countries to voice their interests since they are not present in all the parallel negotiations. It was also found that the number of fossil fuel industry lobbyists is increasing annually while representatives from civil society and indigenous groups were not present in the same numbers, which can have ramifications for the range of perspectives heard at these summits. The researchers labelled the participating countries as either radicals, opportunists, hypocrites, or evaders. Radicals were the small island states and civil societies, which fought to address the climate change effects while opportunists, such as Saudi Arabia and India, framed climate justice around historical responsibility. The EU, Canada, and Norway were among the hypocrites, which recognised their contribution to climate change but did little to deliver on their promises. Lastly, countries such as the US were evaders, which aimed to block justice claims made by others and viewed the idea of equity as too prescriptive, reported Business Standard.
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