**CP Daily will not be published between Dec. 23 and Jan. 1. Carbon Pulse will file stories and send out CP Alerts on merit during that period. Regular coverage will resume Jan. 2.**
Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here
TOP STORY
ANALYSIS – Blame Game: Parties point fingers in wake of UN carbon talks collapse, note acrimonious path ahead
In the wake of the breakdown in talks on key Article 6 texts at this month’s COP28 UN climate conference, some negotiators and observers have been quick to assign blame and many now struggle to see consensus forming ahead of next year’s summit, as bridges are seen to have been burned almost beyond repair between certain parties.
AMERICAS
New York releases preliminary cap-and-invest programme outline, affordability study
The New York State Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) published two key documents Wednesday as part of the development of the state’s upcoming cap-and-invest programme, dubbed NYCI, which the agencies say will help inform stakeholders to provide feedback for the development of full draft regulations.
US tech giant signs 15-year agreement with removals developer for afforestation carbon credits
A US technology behemoth and a New York-headquartered project developer have signed a 15-year offtake agreement that will eventually equate to millions of tonnes of CO2 removed, they announced on Wednesday, in the latest in a series of moves to acquire nature-based removals credits.
Canada announces first carbon credit offtake agreement, invests C$200 mln into CCS tech
Canada’s C$15 billion ($11.2 bln) public investment vehicle will purchase up to one million carbon credits per annum over 15 years at fixed prices, coupled with a C$200 mln investment into an Alberta-based carbon capture and sequestration (CCS) tech firm, the pair announced Wednesday.
ASIA PACIFIC
Indian government updates draft carbon market rules to include voluntary carbon markets
The Indian government has released an updated carbon market regulations draft, making amendments to its existing rules to include voluntary carbon markets under the ambit.
Australia Market Roundup: Govt shortlists project for Hydrogen Headstart funding, ACCU price inches up
Australia’s federal government has shortlisted six projects to submit full applications for it’s A$2 billion ($1.35 bln) Hydrogen Headstart Program, as the price for Australian Carbon Credit Units (ACCUs) has crept up in recent days.
VOLUNTARY
Standardised REDD prices slide to multi-year lows
Benchmark prices based on avoided deforestation credits tumbled to fresh multi-year lows on Wednesday, continuing a lengthy decline as the voluntary carbon market awaits a shake-up from the ICVCM’s integrity labels.
Too much optimism, reliance on CO2 removal strategies to combat climate change, researchers warn
A new study raises concerns about the reliance on CO2 removal (CDR) strategies like reforestation in national net zero plans, warning that many stakeholders are overly optimistic about this uncertain approach.
EMEA
UK launches plans to set up competitive carbon capture market by 2035
The UK government intends to launch a new domestic carbon capture, usage and storage (CCUS) market by 2035, it announced on Wednesday, furthering support for the process towards its aim of storing 20-30 million tonnes of CO2 a year by 2030.
UK government updates on business plans for GHG removals and bioenergy with carbon capture
The UK government on Wednesday published updates on its plans for greenhouse gas removals and bioenergy with carbon capture, as part of the country’s measures to meet a legally-binding commitment to reach net zero emissions by 2050.
EU ETS-backed fund disburses €2 bln for member states’ energy transition, cash for gas sneaks in
The EU is channelling an additional €2 billion of ETS revenues to decarbonise energy systems in nine EU member states, the Commission said on Wednesday, though some of that funding will go towards natural gas projects.
Germany tops up Innovation Fund money for EU hydrogen auction to support national goals
Germany became the first EU member state to involve itself in the European Hydrogen Bank’s ‘auctions-as-a-service’ scheme on Wednesday, adding money to top up existing ETS-sourced Innovation Fund grant funding, all of which will be allocated via a competitive bidding process to renewable hydrogen producers and awarded to those with the lowest subsidy needs.
INTERVIEW: EU ETS2 will incentivise home heat pumps, says provider
The upcoming launch of EU ETS2 should improve the economics of installing heat pumps for households across Europe by increasing CO2 taxation on gas and levelling the playing field with the unit cost of electricity, according to a clean tech startup.
Fuel producer to convert Finnish oil refinery to renewables
A crude oil refinery in Finland will be gradually transformed into a renewables and circular solutions refining hub, according to plans announced on Wednesday that would eventually eliminate demand for EU ETS allowances at what is currently the nation’s second-biggest emitter.
Euro Markets: EUAs rise for a third day as auction pause bites, funds trim net short position
European carbon made robust gains on Wednesday, posting their largest daily gain in 11 months as energy prices rallied after Tuesday’s sell-off, while exchange data showed that investment funds had reduced their net short position last week for only the second time since mid-October.
Scotland considers imposing cruise ship and landowner emissions tax
Scotland has moved a step closer to introducing emissions levies on visiting cruise ships and large landowners as part of plans to meet its net zero target of 2045, although added a note of caution about assessing the impact of the measures.
BIODIVERSITY (FREE TO READ)
MSCI launches nature framework to demystify metrics
MSCI ESG Research has launched a nature framework with a checklist to help investors start identifying which metrics to consider when incorporating biodiversity into the investment process.
—————————————————
Premium job listings
Or click here to see all job listings
—————————————————
BITE-SIZED UPDATES FROM AROUND THE WORLD
INTERNATIONAL
Spreading tentacles — Australian energy utility Origin Energy has committed A$530 mln ($358 mln) into UK-based electricity retailer Octopus Energy, increasing its shareholding in the company by 3% to 23% in total, One Step Off the Grid reports. Octopus is now the UK’s largest electricity retailer and second-largest energy retailer, with more than 11 mln customer accounts, based on a low-cost operating model and its Kraken platform. Since Origin’s last investment in Octopus in 2022, the company has more than doubled its retail customer base, acquiring the UK’s Bulb Energy, and Shell Energy’s retail business in the UK and Germany.
Gas hotspot – Azerbaijan’s significant gas resources have been promoted as a way to support the global energy transition by a senior government official, after the country won a contentious bid to host next year’s UN climate talks, Reuters reports. CO2 emissions from burning natural gas are lower than those of coal or oil but remain far higher than green energy sources, with climate scientists concerned that rising production of natural gas is emerging as one of the biggest drivers of climate change. Azerbaijan has an estimated 2.5 trillion cubic metres of gas reserves, leading to concerns being raised again about holding the annual COP in another oil producing nation. Hikmet Hajiyev, foreign policy adviser to President Ilham Aliyev, told reporters that he doesn’t have a clear answer for when the country might stop drilling, noting that it needs to stand by existing contracts with partners such as BP.
EMEA
DRC vote – The next leader of the Democratic Republic of Congo will have important decisions to make about how the central African country’s natural resources are used in the energy transition, with the nation going to vote on Wednesday to elect a president. President Felix Tshisekedi is up for re-election and has only just begun to make headway on key environmental and energy issues, reports Bloomberg. At stake, is a need to urgently implement a regulatory framework for carbon credit initiatives to preserve Congo’s forests, which capture nearly twice as much CO2 as the UK each year, and the need to start work on the 40,000 MW Grand Inga hydropower project, which is held up in delays with Australia’s Fortescue Future Industries. There is also contention around Tshisekedi’s launching of a bidding round for oil and gas exploration permits, given that some overlap with critical ecosystems. Furthermore, Congo hosts about 70% of the global cobalt supply, with ongoing concerns about child labour and corruption within the industry. Congo needs to develop a clear plan to clean up the industry or it otherwise risks ceding ground to other countries as demand for cobalt increases further.
Cash from coal phaseout – Slovakia is set to reduce electricity costs by over €388 mln due to its phaseout of coal mining and burning in the Upper Nitra region by the end of 2023. The EU is also supporting employment, entrepreneurship, and the development of green resources in the area with €226 mln, Euractiv reports. Phaseout in the region already began under the former government of Petr Pellegrini in 2018, though the last remaining plant is set to be shut down before the end of the year. NGO Friends of the Earth praised the gradual phaseout and came up with a near €400 mln figure for electricity cost savings. The country will also save 3-5 % of GHGs, the organisation said. Previously, Slovakia spent around €100 mln per year on subsidising electricity production from domestic coal. Closing the mines has even been ranked as the most beneficial climate measure, contributing to health, social and economic savings of up to €605 mln, according to a study on the decarbonisation of Slovakia’s economy organised by government analysts.
Passenger levy – The German government aims to increase the levy on passenger flights to raise revenues equal to the current kerosene tax breaks as part of a comprehensive budget package for 2024 and the years following to fill the billion-euro gap caused by a recent court ruling. The ruling coalition is looking to plug a €17 bln gap in the 2024 federal budget plans, with only about half that amount to be met by budgetary cuts. The budget crisis was sparked in November when the country’s constitutional court ruled that the plan to transfer €60 bln to a special fund earmarked for climate and transformation projects was unlawful. In response, last week the government decided to cut spending on different projects by billions of euros. The coalition is to debate the 2024 budget in parliament by mid-January and adopt it at the end of the month. (Clean Energy Wire)
CCS support – The EU Commission approved a €350 mln Danish state aid scheme under the Recovery and Resilience Facility to promote investments in CCS. The money will be available to all technologies allowing for the capture, transportation, and permanent geological storage of CO2 emitted from biogenic sources from the ambient air. The aid, which will take the form of direct grants, will be awarded through a competitive tendering procedure to be concluded in 2024. CCS projects must be operational by 2026. Aid will be granted per tonne of CO2 captured and permanently stored, on a ‘pay-as-bid’ basis, until 2032. Danish energy firm Orsted and Microsoft have some CCS plans, too. Read about them here.
Danish doors – Denmark will shut down the so-called “open door scheme” for new applications to install renewable energy projects over conflict with EU regulations after being suspended in February. The Danish Energy Agency will reject the remaining applications for the Vikinge Banke, Kadet Banke og Paludan Flak offshore wind farms but projects that are well advanced and have the necessary approvals will continue. (Reuters)
Friends with borders – Portugal, Spain, and France will strengthen energy links, according to an MoU that sets new priorities for the High-Level Group, signed with the EU Commission in Brussels this week. The signatories agreed on the importance of building the energy infrastructures needed to realise a secure and efficient internal energy market, according to a statement from the EU executive, Euractiv reports. Under the deal signed on Tuesday, the three have agreed to commit to the high-level group created in 2015 to cooperate on key strategic projects, such as the establishment of cross-border interconnections and the rapid implementation of priority projects in the field of electricity. On the other hand, the document introduces new priorities for the High-Level Group regarding offshore infrastructure and renewable energy projects, cooperation on cross-border interconnections, and the rapid creation of priority electricity projects.
ESG – The Council of EU member states today reached an agreement on its negotiating mandate on a proposal for a regulation on ESG ratings. It concerns operators that rate companies and financial services against their environmental and sustainability performance. The idea is to regulate the operators so that the ratings are more transparent and trustworthy. The EU hopes that this will increase investor confidence in the products.
Financing flows– ING Groep has pledged to end all financing of upstream oil and gas activities by 2040 and to triple its renewable energy funding following the agreement to transition away from fossil fuels made at COP28 last week. The Dutch bank will boost its financing of renewable power generation to €7.5 bln ($8.2 bln) annually by 2025, up from €2.5 bln in 2022, and will also cut loans for oil and gas exploration and production by 35% by 2030. So by 2040, its portfolio financed emissions will be reduced to zero, reports Bloomberg.
H2 love – The Egyptian cabinet announced on Wednesday that the country has signed an agreement with Saudi company ACWA Power to develop a green hydrogen project with investment totalling over $4 bln. The statement added that a work plan will now be developed for phase one of the green hydrogen project, which aims to feature a production capacity of up to 600,000 tonnes of green ammonia per year. Their intention is to expand the project in phase two to a production capacity of 2 mln tonnes annually. The CEO of ACWA Power affirmed that Egypt could become one of the world’s leading producers of green hydrogen.
ASIA PACIFIC
New find – UAE-headquartered Mubadala Energy has made a huge gas find in offshore Indonesia. The ultra-deepwater discovery was made in the South Andaman Block via well Layaran-1 with gas-in-pace of 6 trillion cubic feet (Tcf), according to the company. It is the world’s second-largest deepwater discovery of 2023, according to Reuters, which cited Wood Mackenize analysts. A gas-in-place estimate is typically refined down to a smaller reserve as work progresses at a new field but Tcf finds are also classified as LNG-scale, or large enough to support a high spend on a complex export project. While COP28’s Global Stocktake cited the need to “transition away from” fossil fuels and the International Energy Agency (IEA) has said no new greenfield projects should be developed, the latter also noted Asia will remain one of the growth areas for hydrocarbon demand as more developed economies move away.
Fudging the numbers – The world’s largest mining company has been accused of fudging its figures over Scope 3 emissions targets. The Institute for Energy Economics and Financial Analysis suggests BHP has been citing out of date numbers from the IEA “to help justify its support for underperforming carbon capture, utilisation and storage (CCUS) technology”. A large portion of the miner’s Scope 3s comes from its metallurgical coal that is used to make steel. It has offloaded its thermal coal assets. IEEFA said the steel industry is “now beginning to decarbonise by switching from blast furnaces to direct reduced iron (DRI) technology that can run on green hydrogen”. It said BHP maintains that CCUS will play a role in decarbonising the steel sector. It is not the first time the group has taken aim at the metallurgical coal sector, as several months ago the analysis firm published a report suggesting Australia’s coal exports to India for its steel sector were at threat from new developments in green hydrogen-fired blast furnaces. Currently, there are neither commercial-scale green hydrogen steel plants, nor CCUS projects in place to capture their vast emissions. The steel sector accounts for between 8-11% of global emissions, depending on who is doing the accounting.
AMERICAS
SAF start – Sustainable aviation fuel (SAF) producer Azure announced Wednesday plans to develop a SAF production facility in Cherryvale, Kansas, according to a press release. The company said it has been progressing a front-end engineering design (FEED) study, which is on track for completion in 2024. The company is targeting a final investment decision by early 2025, and if approved, aims to reach first production in 2027. Azure said the facility will produce approximately 135 mln gallons (511 mln litres) per year of renewable fuels, primarily SAF, and that the use of Azure’s SAF will reduce global aviation emissions by approximately 1 mln tons (about 907,000 tonnes) annually. On Friday, the US government released guidance intended to clarify eligibility for SAF tax credits from the Inflation Reduction Act (IRA), a move intended to incentivise production and help scale the industry.
Mad Manchin – Senator Joe Manchin (D-WV) on Monday sent a letter to the US Government Accountability Office (GAO) requesting a legal opinion on whether guidance issued by the US Treasury Department for implementing the clean vehicle tax credit of the Inflation Reduction Act (IRA) is subject to review under the Congressional Review Act. Manchin expressed concern over proposed changes in regulation around tax credits that he said could hurt American taxpayers and increase the country’s reliance on foreign nations, including China, for battery and vehicle component supply chains. Manchin noted three main areas of concern he has regarding proposed changes to the regulation, including: cutting the critical minerals requirements in section 30D(e)(1) in half, reducing the battery component requirements in section 30D(e)(2), and a perceived flouting of the requirement in section 30D(e)(1)(A) that critical minerals must be extracted or processed in the US or a country that has a free trade agreement with the US. Manchin further criticised proposals from the Treasury earlier this month for “[continuing] in this freewheeling vein.” Manchin argued that looking past the “proposed rule” label and treating the Treasury regulations as a final rule will further the purpose of the Congressional Review Act, and will enable Congress to review and disapprove a rule that he says plainly does not match its intent. “It will enable Congress to reclaim its lawmaking power and its power of the purse,” he stated.
Grants for local projects – The Biden Administration on Wednesday announced a $600 mln Environmental Justice Thriving Communities Grantmaking programme under EPA for small-scale organisations to access federal environmental justice funding. The grant will be awarded to 11 ‘Grantmakers’ consisting of regional selectees, who will issue subgrants to communities in specific EPA Regions, as well as national selectees, who will provide additional support, coordination, and oversight to the subgrantees, applicants, and the Regional Grantmakers. Communities can apply to a Grantmaker for a subgrant to fund various environmental project activities focused on local wellbeing. Ten Grantmakers are receiving $50 mln each with one selectee, Research Triangle Institute, receiving $100 mln to serve as both a Regional Grantmaker serving communities in EPA Region 4 and as a National Grantmaker in which part of their responsibility is providing subgrants to communities in EPA Region 7. The 11 Grantmakers will issue thousands of subgrants to disadvantaged communities over the next three years.
Frontier’s firsts – Carbon storage firm Frontier Carbon Solutions has received the first three Class VI UIC permits issued by the Wyoming Department of Environmental Quality (DEQ) for its carbon storage hub in southwest Wyoming. The Sweetwater Carbon Storage Hub represents the first Class VI permits issued by the state and nearly 20% of the Class VI permits issued nationally, World Oil reported. The Hub will ultimately comprise over 100,000 acres (4,050 ha) of leased pore space and will have the capacity to store over 550 mln tonnes of CO2. Frontier plans to complete the construction of the three Class VI wells in 2024, with permanent sequestration of CO2 commencing shortly thereafter. The firm is also preparing six additional Class VI UIC permits to file with the Wyoming DEQ in early 2024.
CA crude picks up – California’s annual crude volumes continued to increase over a three-year period, according to annual crude volumes and average carbon intensity (CI) values published by state regulator ARB. Volumes last year reached almost 520.8 mln barrels, up some 1.5 mln from 2021 figures. Meanwhile, the annual crude average CI in 2022 reached 12.71, down from 12.80 the year prior, bringing the three-year average to 12.96.
Expanding resiliency – Canada and the provincial government of Manitoba have expanded eligibility for the Sustainable Canadian Agricultural Partnership’s Carbon Sequestration and Grasslands Resilience (CSGR) stream of the Resilient Agricultural Landscape Program (RALP). The CSGR stream will now offer funding to all primary producers across the province, community pastures, Agricultural Crown Land forage lease holders, and Indigenous primary producers and communities. Beneficial management practices available under the expanded stream focus on programme activities directed toward improving carbon sequestration, sustainability, and productivity. Select applicants will receive a maximum of $15,000 per project at 75% of the total approved eligible costs, and projects have up to 18 months to be completed. Applications are being accepted until Jan. 22, 2024.
Amazonian arrangement – The Brazilian State Secretariat for the Environment (SEMA) met at the ministry’s headquarters Tuesday with representatives from the World Bank, the Amazonas State Secretariat of Finance (SEFAZ), and the Special Projects Management Unit (UGPE) to prepare a consultation letter with a proposal for financing up to $200 mln Brazilian reals (around $40.9 mln) for the Amazonas 2030 programme, according to a government press release. The new proposal will include the goals of forest restoration and zero net deforestation by 2030, an increase in Rural Environmental Registries (CARs) and Certificates of Real Rights of Use (CDRUs), strategies to promote the bioeconomy, and more. Secretary of State for the Environment in Amazonas Eduardo Taveira said this process will help in obtaining a loan from the World Bank for the state. The consultation letter is a document that describes actions and costs foreseen in the execution of projects to be contracted with external resources. Once prepared, the letter will be forwarded to the federal government. In the release, Werner Kornexl, a senior environmental specialist at the World Bank, recognised the potential of the state, which has large amounts of native forest, but said this potential is currently unfulfilled. “We are trying to verify and support the management of natural resources, but also to improve the state’s fiscal situation to meet these specific demands that we have here,” he said. According to Kornexl, part of the stipulated loan will go to investments in the bioeconomy, forest concessions, and structuring of state markets for the purchase of related products.
VOLUNTARY
VCM regulation – European banks, investors, and companies operating in the voluntary carbon market may face new regulations, as underlying greenwashing concerns persist and interest in the sector increases, according to Verena Ross, chair of the European Securities and Markets Authority, the bloc’s markets watchdog. Regulatory oversight of the voluntary carbon market might be something the next European Commission considers, she said during an interview reported by Bloomberg, and participants in the market could be subject to a new EU legislative framework, without specifying details.
Puro and simple – The Puro Standard has launched a working group to develop a carbon crediting methodology and a call for experts in ocean CO2 removal involving biomass. The approach, known as Ocean Storage of Biomass (OSB), involves depositing carbon-rich biomass in stable deep ocean or seafloor settings that inhibit decomposition, effectively preventing the return of carbon to the atmosphere. Puro wants to bring together the latest scientific advancements and insights from researchers, project developers, and carbon market experts to close the current knowledge gap and help move forward on crediting the removal type. Interested parties can join the working group to contribute to the development of the OSB methodology by contacting Puro.
Social score – Ratings agency Calyx Global has launched environmental and social screenings designed to help carbon credit buyers better understand the quality of a carbon project. Calyx Global subscribers can now request the environmental and social risks of a carbon project across 10 areas and 55 sub-areas that align with international best practices, the firm said in a release this week.
Verra revamp – Verra made two announcements Wednesday regarding revisions to improve its methodologies. First, the US-based non-profit published VMR0009 Avoided Emissions from Biomass Wastes through the Use as Feedstock in Pulp and Paper, Cardboard, Fiberboard, or Bio-oil Production in its Verified Carbon Standard (VCS) following a public consultation. This revision expands its Clean Development Mechanism (CDM) methodology AM0057 to include wood waste, which had only applied to applied only to agricultural waste and covered project activities, such as the construction of facilities for processing pulp and paper, cardboard, fiberboard, or bio-oil production that uses agricultural waste as feedstock. Second, Verra outlined a plan to strengthen its Improved Forest Management (IFM) methodologies in VCS, which entails developing a clearer delineation of the scope of the current IFM methodologies, updating and streamlining them so they meet the requirements of market integrity initiatives while prioritising efficiency and ease of use, expanding the use of dynamic performance benchmark methodologies, and ensuring consistent leakage accounting across methodologies. Verra says it will be implementing these efforts with input from experts and public consultation, adding that it has already begun to update its methodologies, specifically VM0010 Methodology for Improved Forest Management Conversion from Logged to Protected Forest, v1.3.
New blood – Climate X has appointed Manuel Vicente as its vice president of commercial strategy. Vicente, who was HSBC’s Head of Climate Risk, will now work on Climate X’s efforts to integrate climate risk technology and analysis into global financial strategies, the firm said in a press release Wednesday.
SCIENCE & TECH
Opining on pines – New research from New Zealand reveals the significant impact of pine forests on land, showing it can take up to 30 years for the soil to recover for pastoral use after deforestation. Dr. Ants Roberts of Ravensdown, also known as Dr. Dirt, has highlighted concerns for farmers considering converting pastoral land to forest. Pine forest soil tends to be acidic and lacks the organic matter found in pastoral land, which is crucial for soil health. These soils also have fewer earthworms and are looser, increasing the risk of erosion. The study, involving data analysis from Ngai Tahu land that was converted from forest to pastoral use, was conducted by Ravensdown and AgResearch scientists. Roberts expressed regret over the conversion of high-quality pastoral soil to forestry, especially in light of New Zealand’s dependence on pastoral agriculture for its economy. Since 2017, about 210,000 hectares of pastoral land have been turned into forests under the NZ ETS. Agricultural economists noted the economic trade-off in this conversion, pointing out the loss of exports from agriculture and the delayed financial benefits from carbon credits after forest harvesting. While carbon credits are a factor, the obligation to replant forests to retain these credits is a consideration. Despite the soil degradation concerns, the trend of converting farmland to forests is expected to continue, but the government may restrict planting in the steepest areas due to the risk of slash (debris from logging). The long-term impacts of this trend on New Zealand’s agricultural productivity and soil health remain a significant concern. (Newshub)
AND FINALLY…
Nowhere to hide – One of Australia’s leading defence think tanks has suggested climate change could alter the nature of submarine warfare. The Canberra-based Australian Strategic Policy Institute (ASPI) suggests soundwaves will travel farther through “a warmer, chemically different, less dense ocean — and it will be noisier underwater than ever”. The study modelled the effects of the changing oceans over time by bringing together predictions from the UN Intergovernmental Panel on Climate Change’s representative concentration pathway 8.5 climate model with data from ocean-going Argo data-collection robots that agencies such as the CSIRO use to monitor ocean parameters. In 2021, Australia tore up its agreement with the French to jointly build a fleet of Shortfin diesel-electric Shortfin Barracudas and signed the AUKUS pact with the US and UK, agreeing to new, nuclear-powered subs to be supplied by the US. ASPI notes that while predicting how disruptive enemy tech will be used is hard, it is possible to predict with some confidence how the acoustic environment will change over the coming decades. By next century, ultrasonic sonar transmissions will travel between 40-87% further than they do now and sonar transmissions 15-25% further, meaning submarines will find it harder to hide in the open ocean, but noisier coastal waters will be easier to hide in.
Got a tip? How about some feedback? Email us at news@carbon-pulse.com
