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TOP STORY
New Argentine president includes provisions for national cap-and-trade system in overhaul efforts
Freshly inaugurated President of Argentina Javier Milei last week included provisions for a national cap-and-trade system in an omnibus reform bill put forth to Congress, reinforcing the country’s previous commitment to implementing a carbon market despite Milei’s history of fiery anti-climate change rhetoric and anti-regulation ideology.
EMEA
EU fossil generation falls more than one-fifth in 2023
Electricity generation from fossil fuels in the EU slumped 21% year-on-year in 2023, according to transmission data, with coal producing half as much power over the last twelve months as in 2018, and the share of renewables also jumping in the bloc-wide mix.
Euro Markets: EUAs drop by most in a year as investors renew bearish bets to start new year
European carbon prices plunged on the first trading day of 2024 as speculative traders renewed bearish bets that had been unwound in the final two weeks of last year, while energy prices drifted despite forecasts for colder weather by the end of the week.
Spain to extend its windfall tax on energy companies to shield citizens from inflation
Spanish is extending an existing measure to curb extraordinary profits of large energy companies, in an attempt to alleviate the effects of inflation.
AMERICAS
California ARB tempers last offset issuance in 2023, total credit allotment up nearly 20% on the year
California tempered compliance-grade offset issuance for the last bi-weekly distribution of the year, with one-fifth of issued credits tagged with direct environmental benefits to the state (DEBs), still, total offsets distributed through 2023 stood nearly 20% higher year-on-year, according to data published by state regulator ARB on Wednesday.
Producers, financial players amass V24 carbon allowances across WCI and RGGI markets
Regulated parties and speculators built up 2024 vintage net holdings of California Carbon Allowances (CCAs) and RGGI allowances (RGAs) into the last trading week of 2023, while the US Commodities Futures Trading Commission (CFTC) did not report Washington allowance (WCA) positions in data published Friday.
Major US banks, hedge funds open new California cap-and-trade accounts in Q4
Several US banks and hedge funds opened accounts in California’s WCI-linked carbon market in Q4, while dairy digester offset developers continue to exit the cap-and-trade programme, according to state data published Friday.
Washington 2022 GHG output more than doubles following expanded reporting mandates
Reported emissions in Washington saw a significant surge in 2022 as disclosure requirements extended to fuel suppliers and electric power entities (EPEs) for the first time, data published by the state showed.
Louisiana allowed to permit underground wells for CO2 storage
The Environmental Protection Agency (EPA) granted Louisiana a primary enforcement responsibility over the injection and sequestration of CO2, following a review process lasting several years that ultimately gave the state jurisdiction over burgeoning CO2 storage projects.
ASIA PACIFIC
AU Market: ACCU price starts 2024 at 6-month high
The price for Australian Carbon Credit Units (ACCUs) has started the new year at a six-month high, likely a result of end of year voluntary retirements.
GX working group calls for broad measures to improve Japan’s voluntary carbon market
A government-commissioned working group containing some of Japan’s biggest companies has called for a broad set of actions to be taken to improve liquidity and quality in the nation’s emerging voluntary carbon market, including regulatory guidelines, rating systems, and greater transparency.
INTERNATIONAL
FEATURE: High Ambition Coalition nations still face tough fossil fuel choices
Several members of the High Ambition Coalition (HAC), formed by the Marshall Islands in 2014 to phase out fossil fuels, may yet develop their own gas reserves, despite the COP28 decision to transition away from fossil fuels.
Over 1,000 CDM carbon projects apply for Article 6 transition
A total of 1,225 carbon activities registered under the Kyoto-era Clean Development Mechanism have taken the first steps towards transitioning to the Article 6.4 mechanism, according to UN data, as the deadline to apply expired at the end of 2023.
VOLUNTARY
VCM Report: Year-end rush sees 2023 carbon credit retirements top 2022 levels
Voluntary carbon credit retirements in 2023 exceeded the levels of a year earlier on major registries after a surge in activity in December.
American timberland company earns over $900k for first batch of forest carbon offsets
A Washington-headquartered wood products firm with forest acreage across the US and Canada announced on Tuesday the sale of the company’s first improved forest management (IFM) transaction in the voluntary carbon market.
BIODIVERSITY (FREE TO READ)
Cercarbono puts indicator species methodology out for consultation
Colombia-based credit standard Cercarbono has released for public consultation a methodology that will allow project developers to earn Voluntary Biodiversity Credits (VBCs) for the protection of ecosystem indicator species.
COMMENT
ECOSYSTEM MARKETPLACE – REDD can be high quality: Here’s how
Experts discuss the challenges and potential reforms in using REDD as a credible option for offsetting emissions, emphasising the need for high-integrity credits and improved methodologies to ensure environmental and social integrity while addressing criticisms and safeguarding Indigenous Peoples and local communities.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
EMEA
The price to pay – Electricity and natural gas costs in Germany are likely to stay elevated for the foreseeable future, the country’s Federal Network Agency (BNetzA) has said. As long as Germany continued to use a significant share of fossil fuels in its energy mix, this was unlikely to change, the agency argued. It did not think there would be a return to the high prices from 2022, but also that there was not likely to be an ease back to the levels seen before the energy crisis. Power customers would also be affected by the government’s decision to cancel support payments for grid fees in the context of its austerity measures related to the 2024 budget crisis, they said. (Clean Energy Wire)
A friend in need – European companies have accelerated withdrawals of natural gas from Ukraine as demand for heating increases during the winter months, reducing the chances of the continent suffering another energy crisis, the FT reports. They had turned to Ukraine, home to Europe’s largest tanks, to store their reserves earlier this year despite the war in the country following Russia’s full-scale invasion of 2022. That decision helped energy groups and traders to make only relatively small drawdowns from repositories in the EU, analysts said, keeping gas prices low and making refilling them easier next year.
No-rush Sunak – UK Prime Minister Rishi Sunak has come under attack from climate experts for the government’s failure over the past 18 months to appoint a new chair of the independent committee that advises ministers on emissions targets. In a letter to the British leader leaked to the Observer newspaper, the Grantham Research Institute condemned the “excessive delay” in finding a replacement for the previous chair, John Gummer. Bob Ward, the Grantham Research Institute on Climate Change’s head of policy, warned Sunak that the delay is harming efforts to control carbon emissions and damaging the UK’s reputation as a climate change leader.
Bad books – The German Emissions Trading Authority, DEHSt, is looking into allegations of irregularities in an undisclosed upstream emission reduction project in China, the body told Nikkei Asia. The move comes after allegations by German biofuel producers that upstream emissions reduction (UER) certificates issued by the authority to some international fossil fuel companies for their emission curtailment projects in China were based on fraudulent information.
The kids are alright – The youth organisation of the Social Democrats in Switzerland has collected enough signatures for a national vote on a new tax on the wealthy to cover climate change costs, Bloomberg reported. The group, part of Switzerland’s second-largest party, has proposed a 50% tax on inheritances exceeding 50 mln francs ($59 mln). This would generate around 6 bln francs a year for climate protection measures, the group says. It had collected more than 130,000 signatures as of Dec. 27 and plans to present them to federal authorities in early February. Once legally certified, this will trigger a plebiscite after the government and parliament discuss the issue, though the full process usually takes several years.
Greek transition – The European Investment Bank committed €400 mln to help MYTILINEOS Energy and Metals accelerate renewable energy production across Greece and other EU states, the EIB announced on Tuesday. MYTILINEOS will deploy a new portfolio of solar PV and battery storage systems projects in the period through 2027 that will add a capacity of approximately 2.6 GW. The investment is estimated to total €2.5 bln, with projects rolled out across the EU.
Inefficient policy – Landlords across France are in a bind due to looming restrictions on renting out poorly insulated properties under new rules being phased in, the FT reports. To incentivise renovations, owners are now required to have their properties rated for energy efficiency before they can be sold or rented out. The policy aims to encourage owners to renovate roughly two-thirds of France’s 37 mln homes by 2050. Buildings account for nearly half of French energy consumption and one-third of carbon emissions, while two-thirds of that total comes from homes. Experts say the government’s intervention is unique in Europe, but the new rules pose a particular problem for older apartment buildings and historic homes. Critics warn the policy may worsen France’s housing shortage and could even spark social unrest as high inflation also hits households. Less than 5% of France’s homes are said to be in the two most energy-efficient categories for according to standards.
ASIA PACIFIC
Old truths – Australia came close to adopting an ETS in 2003, but it was killed off by the then right-wing government under Prime Minister John Howard, according to cabinet documents from the period which were released this week, Renew Economy reports. Government ministers suggested an ETS that would award companies allowances to account for their emissions, and face heavy fines if they did not adhere to the caps. However, in a meeting with the PM, industry leaders “expressed opposition to any government announcement of a disposition toward emissions trading as the preferred policy instrument for managing future emissions,” according to the cabinet papers. The scheme was then promptly abandoned. In following decades, the environmental policy would become highly politicised, leading to a similar scheme being introduced by Labor PM Julia Gillard, only for it to be dumped by the following government in 2013 after labelling the scheme a carbon tax.
AMERICAS
Paying for protection – Colombia’s Minister of Environment and Sustainable Development, Susana Muhamad, signed the Cartagena del Chaira agreement against deforestation, with the governor of Caqueta department, Luis Ruiz, and 15 city mayors, the ministry reported on Friday. The agreement establishes a commitment to reduce deforestation, protect the rainforest, and promote peace with nature, using the new Territorial Development Plans that, among others, will ratify the agreement signed with peasant communities a year ago. The Conservar Paga programme will provide economic incentives starting next year to peasant, black, and indigenous communities that are committed to the protection and conservation of the forest, tripling payments for environmental services that are expected to reach $900,000, the statement said, and benefit 10,000 families.
Grant for Alaska – The University of Alaska Fairbanks will receive a $9 mln grant from the Biden administration for a research project that aims to capture CO2 from a proposed coal power plant in the Susitna Valley in Southcentral. The project is one of the 16 recipients of the $444 mln investment for 16 initiatives across 12 states announced in November to support new and expanded large-scale commercial carbon storage efforts. The Alaska grant would help assess the viability of a major carbon “storage complex” in Southcentral Alaska, potentially at the Beluga River gas field west of Anchorage. A 60-mile (96.6 km) pipeline would carry CO2 to Beluga from a new 400 MW coal-fired power plant. As an alternative, researchers would also evaluate whether CO2 could be injected into aquifers closer to the plant, which would save money on pipeline construction. The project would mark the first of its kind in Alaska. (Carbon Conference)
Senate sibling – Washington State Senator Kevin Van de Wege (D) introduced a bill to provide fossil fuel facilities that aren’t owned or operated by utilities with free Climate Commitment Act (CCA) allowances to cover their emissions from generating power delivered in the state. The bill is a companion to House Bill (HB) 1965, which was introduced in December. The bill says that it would provide facilities with free permits “to mitigate the cost burden of the program on electricity customers,” but did not include a requirement for reducing customers’ costs. These free allowances would continue through 2044. The bill was co-sponsored by Senator Drew McEwen (R). In November, a judge dismissed a challenge by a natural gas-fired power producer that argued that such free allowances under CCA were discriminatory under the Constitution.
Climate rebate – A bill filed Dec. 26 in Washington State Legislature could see $1.3 bln in carbon auction revenues be distributed as an equal, one-time payment to the state’s 6.8 mln registered vehicle owners, in an effort to compensate for fuel costs due to the state’s Climate Commitment Act, which governs the state’s cap-and-trade programme. House Bill 2040, also known as the Carbon Auction Rebate, was filed Dec. 26 in Washington State Legislature by Representatives April Connors (R) and Mary Dye (R) and would source the funds from unappropriated cap-and-trade programme revenues prior to June 2024.
No carbon levy – As of Jan. 1, 2024, Saskatchewan’s natural gas utility SaskEnergy ceased to collect the federal carbon levy from residential customers in opposition to the federal government’s exemption of carbon pricing for home heating oil users. The provincial government stated that the measure will save the average Saskatchewan family approximately C$400 ($300) in 2024. Dustin Duncan, the minister responsible for SaskEnergy, doesn’t think carbon price rebate cheques will be impacted, while Brett Dolter, assistant economics professor at the University of Regina, anticipates rebates to likely decrease, according to Global News reports. Meanwhile, neighbouring provinces also saw adjustments related to provincial fuel taxes as of Jan. 1: Manitoba’s newly-elected NDP government under Wab Kinew removed its 14-cent fuel tax, Alberta reinstated its nine-cent gas tax after a two-year suspension, while Ontario extended their break on the gas tax till June, as per CBC reports.
AND FINALLY…
Desert gold – Extreme weather has halved production in the biggest supplier of the world’s most expensive spice, the FT reports. More than nine-tenths of the world’s saffron comes from Iran. It is known as “desert gold” due to its ability to thrive in drier climates and prized for its powerful aroma, rich flavour, and deep colour. But changing weather patterns and water shortages are having a dramatic effect on the industry, according to producers and traders, leading to significant falls in yields that have pushed the price of the world’s most expensive spice to fresh highs.
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