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TOP STORY
INTERVIEW: UN-approved REDD carbon credits available for sale as ITMOs by June, says CfRN
The first UNFCCC-approved sovereign credits from REDD forestry protection, that can be used towards climate targets, will appear for sale in the middle of the year, and prices will likely be fixed annually in an OPEC-like cartel to counter market volatility, Kevin Conrad, the chief executive of the Coalition of Rainforest Nations (CfRN), told Carbon Pulse this week.
EMEA
UK govt proposes controversial bioenergy subsidies to keep plants open in transition to carbon capture
The UK government has opened a consultation into different bioenergy subsidy options with the goal of supporting power plants over an interim period between when current subsidies end, and new bioenergy with carbon capture and storage (BECCS) facilities are expected to come online.
Euro Markets: EUAs post another weekly loss despite second daily gain as traders consider next price move
EU carbon prices extended Thursday’s modest rally after the strongest auction result in five months triggered some renewed compliance buying, and participants speculated over whether the market could see a rally after its recent run of declines, or whether prices will test a key psychological level to the downside.
France amends controversial energy bill, gets rid of nuclear power target -media
France has amended a controversial bill aimed at ensuring energy sovereignty, getting rid of any specific targets for low-carbon sources such as renewables and nuclear, EU-focused media Euractiv reported on Friday.
AMERICAS
US legislators introduce federal bill to establish a technology-based CO2 removal market
US lawmakers have introduced legislation that would require the Department of Energy (DOE) to invest in direct air capture (DAC) or other technology-based solutions for carbon dioxide removal (CDR) to establish a long-term market for such projects.
California gasoline sales dip again in October, diesel sales exceed 2022 levels
California gasoline sales and emissions trailed 2022 levels for the second month in a row in October, although by a smaller margin, while monthly diesel sales and emissions exceeded those from the previous year for only the second time in 2023, according to state data released Friday.
California’s power emissions fall to lowest November in a decade, extending YoY decline
California electricity sector CO2 emissions for November fell below levels for the same month seen in a decade, continuing the decreasing monthly trend in GHG output observed throughout the year, as the grid’s share of natural gas receded following a surge in October, data published Friday showed.
Speculators continue to build CCA holdings as emitters reduce, amid ongoing WCA CFTC reporting hiatus
For the second week in a row, regulated entities reduced net holdings of California Carbon Allowances (CCAs) as speculators built positions, while both groups trimmed RGGI net length, amid an absence of reported data yet again for Washington Carbon Allowances (WCAs), according to information published by the US Commodities Futures Trading Commission (CFTC) Friday.
Almost 350,000 offsets used against subnational Mexican carbon tax -official
Almost 350,000 tonnes worth of carbon offsets have been used against the carbon tax of a Mexican state, according to an official presenting a report by the environmental market platform of the Mexican Stock Exchange on Wednesday.
ASIA PACIFIC
CN Markets: CEA trading volume slides to 7-mth low, CCER liquidity healthier
Weekly trading volume in the Chinese carbon market has dropped to the lowest level since mid-June with prices barely moving, while the offset market this week saw liquidity increase amid heightened expectations for policy progress.
Indonesia presidential candidate aims to speed up carbon trading regulations
A frontrunner group in Indonesia’s presidential election has told local media he would introduce the country’s much-delayed carbon tax, as a government official said the tax would unlikely come into effect until 2025, according to an industry source.
Singapore NBS firm expands, expects first credits from Philippine forest project next year
A Singapore-based nature-based solutions company is expanding in the Southeast Asia region, aiming to begin offering credits from its projects by next year.
NZU demand expected to increase, Carbon Fund says
Increased economic activity and the removal of the Clean Car Discount (CCR) scheme is likely to see an increased demand for NZUs, according to Salt Fund Management’s Carbon Fund, as its value continues to recover.
Major Japanese industrial firm to embark on carbon capture pilot
A major industrial firm in Japan has teamed up with a domestic utility to accelerate the development of next-generation CO2 capture technology, with a pilot project set to become operational in 2025.
INTERNATIONAL
Davos 2024: Industry coalition harnesses food companies’ purchasing power to spur sustainable farming
The world’s top food producers could use their combined purchasing power to create demand of up to $20 billion a year by 2023 for agricultural commodities that are produced sustainably, industry figures said in Davos this week.
VOLUNTARY
FEATURE: Mass movement gains scale to get farmers a fair price in carbon, biodiversity markets
A farmer cooperative is using the power of scale and a collective voice to fetch a fairer price for its members in the carbon and biodiversity markets.
German biochar carbon removals firm enters UK market through partnership
A German biochar firm has partnered with a British carbon removals startup to develop a facility on an industrial site in the north of England.
Chile’s offset mechanism for carbon tax compliance recognises three standards
Chile’s environment ministry has codified the names of three carbon credit standards into law, recognising them as sufficiently robust to qualify credits for compliance purposes under the country’s carbon tax scheme.
BIODIVERSITY (FREE TO READ)
US-based joint venture boosting open-source software for TNFD disclosures
A US-headquartered joint venture is set to expand access to its software models in a bid to underpin investments in nature capital and corporate assessments under the Taskforce on Nature-related Financial Disclosures (TNFD) framework, its co-founder has said.
Major asset manager releases “milestone” TNFD-aligned disclosure
A large investment manager has published its first timberland and agriculture nature disclosure aligned with the Taskforce on Nature-related Financial Disclosure (TNFD) recommendations in an early move set to spark market interest.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
INTERNATIONAL
SMEs and sustainability – A recent study by NatWest’s Sustainable Business Tracker reveals that rising costs are a major obstacle for small and medium-sized enterprises (SMEs) in implementing sustainability initiatives. The tracker, which monitors 850 UK enterprises with 1-249 employees, shows that only 35% of SMEs consider sustainability a high priority for the coming year, down from 36% in the previous quarter. The primary challenge cited by 60% of SMEs is the increase in business costs, with manufacturers being impacted more significantly than service companies. Another hurdle identified in the survey is the difficulty of accurately measuring carbon footprints, with 31% of SMEs highlighting this issue. Other concerns include a lack of customer demand for sustainable products, difficulties in building a business case for sustainability based on cost savings, and uncertainty surrounding government regulations. (edie.net)
COP prep – Executives from Azerbaijan’s state-owned oil and gas company, Socar, are taking steps to improve the company’s climate record ahead of the country hosting the next United Nations COP summit, Bloomberg reports. Socar President Rovshan Najaf met with US Deputy Special Envoy for Climate Rick Duke to discuss climate change issues at the World Economic Forum in Davos earlier this week. Azerbaijan’s climate credentials are being scrutinized as it heavily relies on fossil fuels, with oil and gas accounting for a significant portion of its exports and government budget. While Azerbaijan aims to achieve 30% renewable power by 2030, its decarbonization plans fall short of the global targets recommended by scientists. The country lacks experience in climate diplomacy, and its appointment of Mukhtar Babayev, a former Socar executive, as the presiding officer of COP29 raises concerns. Socar has signed the Oil and Gas Decarbonization Charter, committing to align with net zero goals by 2050 and reduce methane emissions. Azerbaijan has not joined the Global Methane Pledge, however, launched at COP26 by the EU and the US.
COP man-el washing – President of Azerbaijan Ilham Aliyev replied with a U-turn to the observers who pointed out the 28-person organisational committee for COP29, which will be tasked with preparing for this year’s annual UN climate summit, featured not a single woman. Aliyev’s new order added 14 women to the committee, including Azerbaijani ombudsman Sabina Aliyeva, the deputy minister of Agriculture Ilhama Gadimova, and the deputy minister of Ecology and Natural Resources Umayra Taghiyeva.
EMEA
Coming in hot – Britain imported a net 13% of its total electricity in relation to total demand in 2023 – the highest on record – as generally low demand in Europe, high levels of Nordic hydroelectric as well as recovering French nuclear production helped to bolster power supply, according to LSEG analysts. This was up from the previous high of 12% set in 2021 and in complete contrast to 2022 where Great Britain exported more power than it imported relative to power demand. The ability to import and export is reliant on the interconnectivity of power grids via undersea cables and the commissioning of the Viking Link 1,400 MW HVDC submarine power cable between Britain and Denmark in late 2023 will drive these trends. Italy was Europe’s biggest importer – not only in relation to domestic power production, but also in relation to total power demand, with 23% and 19% respectively. In absolute terms, Italy took the crown for Europe’s largest electricity importer at 51.6 TWh.
Export drive – The share of UK’s oil and gas exports has increased from 60% to 80% over the last two decades, casting doubt on the government’s claims that maximizing North Sea resources will enhance energy security, the Guardian reports. The government aims to pass an oil and gas bill on Monday, said to boost energy security by creating a rolling annual licensing regime for new fossil fuel contracts. However, critics argue that these fuels will be sold on the global market, with the majority being exported. The conflict in Ukraine and decision to cease buying Russian oil and gas have amplified the country’s energy security concerns, with many within the Conservative party opposed to the government’s fossil fuel license plans and some resigning over it. Global Witness data reveals that between 2004 and 2023, the UK awarded 1,680 licenses for oil and gas extraction in the North Sea, with the share of UK oil and gas exports increasing and domestic oil production declining in this period. The UK’s refinery capacity and ability to handle its own fossil fuels have also decreased during this time frame.
Island power – Copenhagen Infrastructure Partners, one of the world’s biggest investors in offshore wind farms, is launching Copenhagen Energy Islands to build artificial islands in the North Sea to support the development of offshore wind farms. The company aims to invest €150 bln in constructing these islands, which will use large wind turbines to generate electricity and produce green hydrogen. The concept aligns well with the EU plan to build at least 300 GW of offshore wind in coming years – 10 times today’s level. However, there are technological and political challenges to overcome. The islands are expected to mainly produce power for hydrogen production, with the gas being transported to land through pipelines instead of cables. However, green hydrogen is yet to be produced at scale and would require a reliable source of fresh water for the electrolysis process. Security concerns also exist, as the islands may become targets for attacks, potentially undermining the advantages of decentralized renewable energy. (Bloomberg)
On French soil – France is “not persuaded” that its 2050 ‘zero artificialisation’ goal should be extended at the EU level, even though discussions are currently underway on a European soil monitoring and resilience directive. The debate follows last year’s EU proposal of a directive on soil monitoring and resilience to ensure all ecosystems are in good health by 2050. The proposed bill is in fact similar to France’s existing Climate and Resilience Act of 22 August 2021, Euractiv notes. However, France shows no intention of extending this concept at the EU level. “I’m not convinced that such an objective would make sense at the European level,” said French Ecological Transition Minister Christophe Bechu when he took the floor at an EU environment ministers’ meeting in December.
Call to offsets – It would be “extremely difficult” for South Africa to reach net zero by 2050 without resorting to carbon offsets, according to the draft Integrated Resources Plan 2023 (IRP 2023) published by the country’s department of mineral resources and energy, BusinessDay reports. In the IRP, the department concedes the shortcomings of South Africa’s net zero commitment, which lacks a detailed emission reduction plan. Challenges for reaching net zero without offsets include potential operation of coal-fired power stations beyond 2050 and the necessity of gas for cost-effective scenarios, driving up emissions.
Bill amendment – France’s draft energy sovereignty bill, which attracted controversy for its lack of balance between renewable energies and nuclear power, will not include any targets for now, according to French Economy Minister Bruno Le Maire. Ongoing consultations have highlighted the need for more time to determine what should be included in the law and what should be part of the energy and climate program at the regulatory level. The bill has been criticized for not mentioning France’s renewable energy targets and for replacing the obligation to “reduce” greenhouse gas emissions with an obligation to “aim for a reduction.” However, the bill does include objectives for the availability of EDF’s nuclear reactors. (Euractiv)
ASIA PACIFIC
Co-firing achievement – The Indonesian government has reduced emissions from the country’s coal-fired power stations by 1 MtCO2e in 2023 by co-firing coal with biomass, the Ministry of Energy and Mineral Resources said in a statement. The co-firing programme saw 991,000 tonnes of biomass burned across 43 power stations, producing 1.04 TWh of electricity last year, according to the ministry. The programme is carried out by mixing biomass, such as sawdust, rice husks, and palm shells, with coal. In 2023, seven new co-firing operations came online, with the government targeting 2.8 Mt of biomass to be co-fired in 2024.
Emissions down but not counted – Indonesian national oil company Pertamina said this week its performance is “increasingly” in line with its decarbonisation goals and last year exceeded its target. Last year it cut 1.13 Mt of CO2e from its emissions, as compared with 910,000tCO2e the prior year. It also said sales of its B35 biodiesel reduced Scope 3 emissions by 28 Mt of CO2e. The company did not make note of its full emissions at any scope, however.
Soaring coal imports – China saw coal imports jump 53% in December as the government decided to put an end to a zero-tariff policy this year, according to an analysis by non-profit Centre for Research on Energy and Clean Air (CREA). The total coal imports in 2023 increased by around 61%, government data showed. Supported by continued fuel imports, the growth rate of China’s total fossil fuels supply (production plus net imports) last month rebounded after the fall in November, CREA said.
Recommendations welcome – The Taiwanese government is seeking recommendations on the member candidates for a special committee that will decide the island’s carbon levy rates, according to a release by the environment ministry. Big emitters will have to pay for their emissions from 2025 onwards under the government’s current plan, though the exact rates still await further discussion. The ministry will be open to suggestions until the end of this month, the statement said.
AMERICAS
Para J-REDD – Roughly 100 Indigenous representatives of the state of Brazilian state of Para met from Jan. 16-18 to discuss the development of Para’s Jurisdictional-REDD+ system with state government officials, the Government of Para reported Friday. The workshop, organised by the Federation of Indigenous Peoples of the State of Para, took place in Oriximina and discussed issues such as the definition of safeguards. The event was supported by Brazilian non-profit Amazon Environmental Research Institute (IPAM) and US-based non-profit The Nature Conservancy. The Amazonian state’s system will be developed in accordance with the Architecture for REDD+ Transaction (ART) programme. Notably, REDD+ projects in the state have faced allegations of land theft in the past, which surfaced in the Brazilian Senate in Oct. 2023. However, the state has launched a number of government-led initiatives to generate carbon credits, including a public concession on 10,000 hectares of forest in Dec. 2023 and the finalisation of an Emissions Reductions Purchase Agreement with buyers’ group the LEAF Coalition.
Base expectations – Canadian VER investor Base Carbon announced that the first issuance from their Rwanda cookstove project would be in the first quarter, originally expected during the second half of last year, CEO Michael Costa said in a webinar Friday. The company had invested $8.83 mln at the end of Q2 in the project, but had no offtake arrangement in place for the Rwanda credits, which they expect have a high probability of being in demand given the project had a “corresponding adjustment” label. Countries make a corresponding adjustment in their Paris Agreement emission reduction levels when exporting offsets generated locally to avoid double counting. The company was working with project partners and minority shareholders on pricing of the Rwanda project offsets. Currently valued at C$0.47 ($0.35), Base Carbon’s shares have traded between C$0.26–C$0.59 in the last year.
Kicking the can – Ontario released a high-level roadmap in the province’s plan for electrification and the energy transition, with one recommendation, out of a total of 25, that directly addresses emission reductions. The recommendation detailed “potential changes” to the provincial electricity and natural gas regulator Ontario Energy Board’s (OEB) policy, mandate, and objectives to include addressing emission reductions. However, this would only take place in the years following the release of a provincial energy transition vision and a separate review of the OEB’s activities.
BC electricity – BC Hydro, the government of British Columbia’s electric utility and the province’s main electricity distributor, released its 10-year, C$36 bln ($26.8 bln) expansion plan of its electrical system on Tuesday. The province has budgeted $10 bln towards electrification and greenhouse gas reduction efforts in alignment with the province’s emission reduction targets of a 40% reduction by 2030, 60% by 2040, and 80% by 2050, relative to a 2007 baseline. The specific investments are not detailed in the plan.
Permitting burning – The Washington Senate Committee on Environment, Energy, and Technology on Friday heard from Senator Kevin Van De Wege (D), who outlined Senate bill (SB 6121) that adds definitions of biochar, biochar mini and macro units, and clean cellulosic biomass to the Washington Clean Air Act. Washington Clean Air Act generally prohibits outdoor burning in areas exceeding pollutant limits with exceptions for certain burning activities used to improve or maintain fire dependent ecosystems for rare plants or animals, in which cases the Department of Natural Resources (DNR) and the Department of Ecology may offer permits. SB 6121 adds biochar production with biochar micro or mini units from the burning of clean cellulosic biomass from forestry operations to the list of permits that DNR issues and regulates, as well as to the list of priorities under which DNR must encourage landowners to use logging and alternative silviculture practices to reduce the need for burning. It also lays out a biochar production fee of $1 per tonne of agricultural waste consumed.
VOLUNTARY
BeZero appointment – Christopher Bredholt has joined the BeZero Carbon team as director, ratings following a 10-year stint at Moody’s and previous to that at JPMorgan. He has nearly 20 years of experience as both a private equity and credit analyst across infrastructure sectors, with expertise in renewable energy and project finance, and so will bring a unique approach to rating carbon projects at different stages of their lifecycle, a LinkedIn post said today.
INVESTMENT
Long-term commitment – The mismatch between the short-termism of investment funds and the longer payback periods needed for sustainable investing is creating issues with the concept of ESG investing, the FT reports. In the US, the term ESG has become politicised with Republican politicians criticising money managers like BlackRock for being too “woke” and instances of money being rapidly being put into funds and rapidly taken out. One of the key issues is the short-term nature of investment funds, with most large UK asset managers reporting quarterly results, encouraging portfolio managers to think on a short-term basis. However, this is fundamentally incompatible with the longer term nature of climate change and the long-term commitment of capital required for structural sustainable change.
AND FINALLY…
1-800-climate-help – The US-based Disaster Distress Helpline, established following BP’s Deepwater Horizon oil spill, assists those experiencing emotional distress due to disasters or violent events, E&E reports. Despite its decade-long service and rising call volume, largely due to climate-related disasters and the recent pandemic, many remain unaware of its existence. The helpline emphasises mental health support post-disaster, a need often overlooked in favour of physical aid. Funded by the Department of Health and Human Services, it operates 24/7 with 514 counsellors across six centres. Calls have surged recently, especially following events like hurricanes and Covid-19, highlighting an increasing need for such mental health support in the face of escalating climate crises and other traumatic events.
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