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TOP STORY

Companies unable to comply with EU carbon border policy due to tech issues

Companies that must comply with the EU’s carbon border adjustment mechanism are facing difficulties in submitting their reports less than a week before the first reporting deadline, multiple national EU registries have said.

INTERNATIONAL

ANALYSIS: Lag in Swiss funding revives additionality questions over Thai Article 6 carbon sales

The lag between project inception and receipt of financing in the world’s first internationally transferred mitigation outcomes (ITMOs) – transacted in January from Thailand to Switzerland – is raising questions about the financial additionality of these credits traded under the Paris Agreement’s Article 6.2, experts have told Carbon Pulse.

FEATURE: New initiative weighs up carbon markets as financial mechanism to incentivise keeping oil underground

A fresh initiative is spearheading the idea of compensating resource-rich nations for leaving oil reserves untapped, with potentially significant benefits for climate mitigation and the carbon markets.

Oil and gas emissions to eat up two-thirds of global carbon budget despite industry pledge, says NGO

Oil and gas companies that have signed up to a COP28 sectoral decarbonisation pact are set to use over 60% of the world’s remaining carbon budget under a 1.5C warming scenario, according to an NGO.

Axis and allies: Researchers identify countries likely to support, oppose EU’s CBAM

Researchers have identified the countries most likely to the support the EU’s Carbon Border Adjustment Mechanism (CBAM), and therefore which governments are most willing to accept it amid an objective of securing the policy’s survival and broader adoption globally.

EMEA

EU nations call for ambitious 2040 climate targets in joint letter

The European Union’s executive body, the Commission, should recommend an ambitious climate target for 2040, said the ministers of 11 member states on Friday, following a leak of the draft proposal seen by Carbon Pulse.

Mozambique forest carbon crediting scheme stalls over ongoing deforestation

A forest carbon partnership programme in Mozambique, issuing large volumes of carbon credits to a project in the country, has experienced above-baseline deforestation at the site, with the nation’s engagement in the voluntary carbon market (VCM) also subject to regulatory roadblocks, according to local and international sources.

Euro Markets: EUAs post marginal weekly decline after late gas-driven surge erases earlier losses

European carbon allowance prices posted a marginal loss for the week after a late gas-driven rise in prices wiped out earlier losses on Friday, after the market had been poised to record a bigger five-day decline despite a strong auction result.

AMERICAS

US pauses LNG export approvals

The Biden administration will assess the impacts on energy costs, energy security, and the environment during the temporary pause in pending approvals of liquified natural gas (LNG) exports, the White House announced Friday.

Speculators slash North American carbon market holdings across the board, CFTC reports WCA after four-week gap

Speculators reduced their positions and producers picked up holdings across North American carbon allowances, while information regarding Washington Carbon Allowances (WCAs) was finally disclosed after a month-long hiatus, data published by the US Commodities Futures Trading Commission (CFTC) Friday showed.

New York officials detail preliminary analysis of impacts from statewide cap-and-invest

Officials from two New York agencies outlined in a webinar Friday a preliminary analysis of potential market effects and wider impacts of the state’s future cap-and-invest programme under different modelled price-ceiling scenarios, finding that all substantially reduce emissions, but obligating electricity could result in leakage and higher costs.

ASIA PACIFIC

Japan to boost J-Credit supply with new project registrations

Japan’s J-Credit certification committee on Friday registered 32 new projects to start earning credits under the scheme, while issuing some 75,000 units to existing programmes.

Japanese trading house to develop woody biomass project in Indonesia

A Japanese trading house has teamed up with a Nordic biomaterial solution provider for the sustainable utilisation of woody biomass, targeting emissions reductions from use of forest resources in Indonesia, it announced Friday.

CN Markets: CEAs stable, CCER liquidity remains low despite market relaunch

Allowances in the Chinese carbon market rose slightly over the past week amid lukewarm demand, while the national offset market saw liquidity remain sluggish even after the official restart of the national voluntary programme.

VOLUNTARY

Climate tech deals in carbon, industry were bright spot in otherwise tough 2023 -analysts

Investor appetite for climate tech deals in industry and carbon was particularly strong last year, even as overall investment dropped 30% on the year prior, say analysts.

Fresh expose of hot air in cookstoves carbon market met with cool reaction

A fresh expose this week about over-crediting in cookstoves projects has been met with a muted voluntary carbon market (VCM) reaction, although the sector is ‘well offered’, according to sources.

Climate Action Reserve adopts forestry protocols in Guatemala, Panama

The Climate Action Reserve (CAR) this week approved forest carbon protocols in Guatemala and Panama, continuing the US standard body’s policy to develop country-specific offset methodologies.

BIODIVERSITY (FREE TO READ)

Issues with EU nature restoration law need resolution, says Commission biodiversity official

Elements of the EU nature restoration bill need resolving if the provisional legislation is to succeed, the deputy head of the European Commission’s biodiversity unit has said.

Singaporean biodiversity and carbon credit tech startup closes seed funding round

A startup based in Singapore focused on delivering data on biodiversity and carbon credits has closed its seed funding round.

GRI launches biodiversity impact standard 101

The Global Reporting Initiative (GRI) has launched a new biodiversity standard for supporting organisations in assessing their impacts on biodiversity, as stakeholder demand for nature-related disclosures gains traction.

Nature scientist at “wit’s end” with arguments against plant-based farming

A nature scientist clashed with a farming industry representative about how agriculture should address biodiversity loss, during an Ireland-focused webinar.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

INTERNATIONAL

Beyond words – The World Wildlife Fund published its 2024 climate crisis forecast, saying we are past the point where words alone are going to make a difference for the planet. The group will be closely watching nationally determined contributions, and says that countries should deliver emissions reductions of about 60% by 2035 to stay on track with the Paris agreement goals. Companies will have to make strong net-zero commitments, report against them, and stick to them, WWF adds. And every gathering of world leaders should be measured by whether anything has been done to realise commitments made at COP28, says the report.

EMEA

Lofty targets – Delays to the UK’s flagship Hinkley Point C nuclear power plant in southwest England are throwing into doubt the ability of Britain’s Labour party to reach its target to decarbonise the electricity system by 2030 should it form the next government, the FT reports. The UK’s main opposition has a strong lead in the polls ahead of the upcoming general election and wants all power generation sourced from low-carbon sources within six years. However, analysts say that the Hinkley delay, now to between 2029-2031, would make achieving the 2030 target even harder to achieve. There are suggestions that gas-fired power plants would help plug the gap in generating capacity left by declining nuclear capacity, with four of the UK’s fleet of five nuclear plants set to close by March 2029. Operator EDF seeks to extend their life but any such step would require regulatory approval. Nuclear provides ‘baseload’ power and so is seen by some as crucial to the low-carbon transition, as it offsets intermittent generation from renewables.

Italy’s gas addiction – While being Europe’s biggest public financier of fossil fuels, Italian export credit agency SACE did not make any progress towards trying to align with the Paris Climate Agreement, according to a new report by think-tank Perspectives Climate Group. Italy has been found to be the biggest “promise breaker” among Clean Energy Transition Partnership signatories, the report stated. Export credit agencies like SACE play an important role in the energy sector due to their unique role of de-risking investments abroad. SACE doubled down on its export finance for oil and gas projects. More than 15% of its total portfolio was directly exposed to oil and gas projects, and this share has not dropped more since SACE’s new support for oil and gas in 2021 was bigger than 2020. More than half of SACE’s fossil finance went to the African continent alone.

Nuclear now – Ukraine plans to begin construction on four new nuclear power reactors in the near future to address the energy capacity lost during the war with Russia, Euractiv reports. Two of the reactors will use Russian-made equipment imported from Bulgaria, while the other two will utilize Western technology from Westinghouse. All four reactors will be built at the Khmelnytskyi nuclear power plant. The timeline for construction is more aggressive than previously indicated, with work expected to start in the summer or autumn of this year. Ukraine aims to expand its nuclear power sector to compensate for the shutdown of Zaporizhzhia, Europe’s largest nuclear plant, as Russia gained control of the facility after launching a full-scale invasion of Ukraine in early 2022, and its six nuclear reactors are now idled. Today three nuclear power plants in Ukraine-controlled territory produce more than 55% of the country’s electricity needs.

The best-laid schemes… – A new pipeline and LNG infrastructure will be focal points of Snam’s plan to invest €11.5 bln ($12.5 bln) by 2027 to expand its infrastructure to support the country’s energy transition, 15% more than in its previous business plan, World Pipelines reports. Investment in a carbon capture and storage hub and a European hydrogen network will also be key, the Italian utility said. The group is also working with energy group Eni on a CCS hub offshore Ravenna.

Captain, it’s January – The EU executive president at the International Climate Forum of Hamburg businesses said the work of the current college “is far from over” and “2024 will be a decisive year”. In her speech, she talked about energy infrastructure and the importance of artificial intelligence for the bloc’s competitiveness, adding that her goal is to bring energy prices down further. Using electricity networks on land and sea, hydrogen electrolysers to the transport and storage of CO2, and super grids operated with AI, “we will create the energy backbone of the economy of the future”. 

AMERICAS

Refinery request – Two small refineries owned by Texas-based CVR Energy have asked the US Environmental Protection Agency (EPA) to initiate rulemaking to restructure its renewable identification number (RIN) trading under the Renewable Fuel Standard (RFS) to limit the number of participating parties, reported Biodiesel Magazine. In a letter, CVR Energy CEO David Lamp claimed that the current RIN trading program has led to market manipulation and increased fuel costs because of the participation of entities that seek solely to profit. According to Lamp, a reformed RIN program that minimised the participation of non-obligated parties would drive down the cost of RINs, lower the cost of transportation fuels, mitigate disproportionate economic harm to small and merchant refineries, and minimize lawsuits against EPA.

On the rise – Washington consumers of utility NW Natural, an energy provider for more than 2.5 mln people in the Pacific Northwest, will see an increase to their monthly bill as a result of the firm’s compliance with the state’s Climate Commitment Act, which governs Washington’s cap-and-trade programme. A typical residential customer will see a $8.78 increase per month, or 11.9%, while customers connected to the utility’s system after July 26, 2021, will see a $28.14 increase, or 38.2%, reported local news outlet The Columbian.

Braiding sweetgrass – Canada’s environment ministry announced an almost C$12.8 mln ($9.5 mln) investment Friday to support 27 Indigenous-led nature-based climate solutions across Canada, focused on carbon capture and biodiversity through a combination of both Indigenous knowledge and Western science approaches. Projects include peatland restoration to preserve caribou habitat and promote carbon sequestration by the Mikisew Cree First Nation, as well as research and knowledge gathering into nature-based climate solutions by the Unama’ki Institute of Natural Resources.

VOLUNTARY

Puro and simple – Puro.earth, a carbon removals standard and marketplace, published a report on a consultation it held over its ‘General Rules’. The public consultation period, which took place from Dec. 11, 2023, to Jan. 10, 2024, invited stakeholders to help better its rules, the firm said. The report, published Friday, outlined the feedback from 31 participants and 202 comments, as it attempts to align the ‘Puro Standard General Rules’ with global benchmarks, such as CORSIA and the ICVCM’s imminent CCP stamp of quality.

Buoyant demand – Norway’s Aker Carbon Capture has posted record revenues on buoyant demand for its CO2 solutions, though profitability still eludes it, Upstream reports. The company recorded high commercial activity across Europe and the US in the fourth quarter, posting record quarterly revenue of 573 mln Norwegian krone ($55 mln), up 139% against the same period of 2022. A strong fourth quarter did not pull the company from the red zone, but marginally improved the bottom line. Standouts from 2023 included five Just Catch 100 modular carbon capture units ordered by Orsted, with customers also paying for CCS research to be carried out on 50 units for onshore and 19 units for offshore installation.

SHIPPING

Proactive reaction – Brokerage Norwegian Oil Trading has launched sales of EU allowances to help the shipping industry meet its ETS compliance obligations, which were applied to the sector from Jan. 1, 2024. The firm has stated that the launch represents a “proactive stance” toward fostering a greener future for shipping, and not “merely a response to regulatory pressures.”

LNG ships dirtier than thought – According to a new study by the International Council on Clean Transportation (ICCT), policymakers should increase default methane slip values to at least 6% for LNG engines. Data collected by drones, helicopters and onboard sensors show that real-world methane slips for the most common type of LNG marine engines (LPDF 4-stroke) averaged 6.4% whereas EU regulations currently assume 3.1% methane slips and the United Nations International Maritime Organisation assumes 3.5%. (Safety4Sea)

AND FINALLY…

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