Newsletters > CP Daily: Wednesday February 7, 2024

CP Daily: Wednesday February 7, 2024

Published 00:42 on February 8, 2024 / Last updated at 00:44 on February 8, 2024 / / Newsletters

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

8 TAKEAWAYS: Rocky road ahead for the EU’s 2040 targets and carbon management plan

The European Commission’s recommendations on Tuesday that the EU aim to reduce emissions by 90% by 2040 and deploy carbon capture to help get there marked the beginning of a rocky road of further climate negotiations.

AMERICAS

ANALYSIS: New review for zero-rated BC forest carbon project after key data surfaces

A large voluntary forest carbon project in British Columbia, developed by a major Canadian timber company, will have its initial ‘zero’ grade issued by a US-based ratings firm reviewed after important data said to be missing was made publicly available.

US venture capital firm raises $100 mln again for climate tech startups

A US-based venture capital firm has secured $100 million in its second funding round, primarily earmarked for Series A investments in companies working towards decarbonisation, the company announced Wednesday.

Records and roadblocks: Think-tank examines the dual reality of US clean energy

Despite record growth in US clean energy sources last year, an environmental think-tank has warned the sector faces challenges, including supply chain issues and the need for accelerated renewable power installations to meet the country’s climate targets.

Canada’s Northwest Territories approves carbon tax exemption on diesel home heating fuel

The Northwest Territories (NWT), which maintains its own carbon pricing legislation in place of the federal government’s, approved the carbon tax exemption on home heating fuel, alongside a reduction in its quarterly territorial rebate on Wednesday.

SHIPPING

Non-EU shipping companies struggle to navigate ETS rules in tight timeframe

The European Commission’s list of shipping companies and assigned countries for participating in the EU ETS is causing administrative burdens for firms outside the bloc – with little time in which to navigate the new rules.

Most shipowners back LNG to meet IMO rules despite methanol hype -report

Shipowners have targeted liquefied natural gas (LNG) as the fuel to meet the International Maritime Organisation’s (IMO) 2030 climate targets, while methanol, seen as a distant second-place option, has been largely promoted by just one major company, finds a report.

EMEA

Investing in cheap EU carbon allowances one of the “great opportunities” of 2024 -analysts

Despite their current downtrend, investing in EU carbon allowances will likely be one of the “great opportunities” of 2024, analysts predict.

Euro Markets: EUAs give up Tuesday gains despite auction gap as weekly position data shows little change

European carbon prices gave up the previous session’s gains amid a sharp sell-off on Wednesday afternoon, as the lack of a daily auction and inconclusive weekly position data failed to offer any impetus while mixed energy markets also struggled to give direction.

Only 8% of Germans see carbon pricing as key climate policy tool

Just 8% of Germans see carbon pricing as the most important climate policy to achieve targets, according to a survey published Wednesday.

ASIA PACIFIC

New Zealand court waves through legal action against emitters

New Zealand’s Supreme Court has permitted legal action to proceed against the country’s biggest emitters after finding that companies may be liable for their contributions to climate change.

Australian govt “slipping” on ACCU reforms, industry body says

An Australian carbon market industry body has urged the government speed up its work programme on reforming the market to unlock new methodologies and domestic credit supply, or run the risk of emitters being forced to rely on international credits to meet compliance obligations.

Australia’s biggest mining region needs 10x the renewable commitment made at COP28 to decarbonise

The International Energy Agency’s recommendation that renewable energy installation be tripled by the end of the decade would be a drop in a vast ocean at one of Australia’s more emissions-intense regions, and the scale needed is not yet close to get decarbonisation across the line.

Cambodia to study carbon credit tokenisation, eyes exchange

The government of Cambodia has decided to study the potential of combining the concept of securities token offering (STO) with carbon credits, with an exchange reportedly to be introduced later this year.

CN Markets: CEA price goes up, volumes down as market prepares for week-long Lunar New Year break

Allowance prices in China’s carbon market edged up over the past four trading days despite recent regulatory news, while only a few hundred credits changed hands in the national offset market amid diminishing demand as traders get ready for the annual Spring Festival break.

VOLUNTARY

Tumbling biochar prices tap into growing demand in nascent carbon removals market

Crashing prices have boosted interest in biochar credits in the nascent carbon removal market, although big ticket punts have catapulted direct air capture (DAC) as well as bioenergy with carbon capture and storage (BECCS), into the limelight and skewed emerging drivers of demand, a review of 2023 has revealed.

Danish agtech startup buys UK-based farm management software company to boost soil carbon efforts

A Danish tech startup specialising in regenerative agriculture finance and technology has acquired a UK-based farm management software business that has thousands of farmer clients across more than 100 countries.

Energy transition fund for developing countries receives EIB backing

A blended finance fund dedicated to investing in clean energy and infrastructure in developing countries has received $282 million of commitments, bolstered by a recent investment from the European Investment Bank (EIB).

Verra launches consultation on refrigerant methodology as part of carbon crediting reform efforts

Verra has launched a public consultation on proposed revisions to a refrigerant leak detection methodology as part of revisions to parts of its carbon crediting programmes.

INTERNATIONAL

Climate-focused guarantee company aims to unlock billions in green finance

A climate finance company launched this week aims to unlock billions for developing countries by providing guarantees for institutional investors buying green bonds on the London Stock Exchange.

US biorefinery offtake partnership with Japanese firm to reduce 1.4 Mt CO2 yearly

A joint development agreement announced Wednesday between a US petrochemical producer and a diversified Japanese conglomerate is expected to reduce 1.4 million tonnes of CO2 annually from a biofuel refinery combined with carbon capture and storage (CCS).

Tech company, brokerage launch regulated trading platform for tokenised environmental assets

A US-based tech company specialising in environmental assets and a German brokerage have launched a regulated trading platform for tokenised renewable energy certificates (RECs).

BIODIVERSITY (FREE TO READ)

Biodiversity credits will “counterbalance” negative corporate impacts, expert says

Corporations will use biodiversity credits to “counterbalance” the harm they inflict on nature throughout their supply chains, but the practice should not be called offsetting, a data expert has predicted.

Norwegian sovereign fund identifies ‘very high’ nature risks in first TNFD disclosure step

Norges Bank Investment Management (NBIM), which oversees Norway’s $1.4 trillion sovereign wealth fund, has highlighted the significant impacts and dependencies on biodiversity linked to its investees’ sectors, in its first step towards adopting the TNFD’s recommendations.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Join the dark side – We have implemented a ‘dark mode’ feature on our website aimed at those who prefer to consume a bit less electricity (or use up a bit less mobile/tablet battery life) while reading our news or who find our all-white background a bit hard on the old eyes.  Just look for the sun/moon button to toggle between light and dark modes.  For desktop users, you can also drag and drop that button to your preferred location on your screen.

INTERNATIONAL

Gas addiction – Natural gas will still be needed post-2050 in some hard-to-abate industries, said Dutch energy envoy Frederik Wisselink on the sidelines of the India Energy Week conference in Goa, Bloomberg reports. In order to reach net zero targets by mid-century, countries will need to capture emissions or find other carbon negative alternatives, he said. Last year, Shell Plc signed deals with Qatar to receive as much as 3.5 Mt of LNG a year to Rotterdam’s Gate import terminal for 27 years from 2026.

Fighting its corner – India, along with South Africa and other like-minded nations, is planning to protest the EU’s proposed carbon tax on imports of steel, iron ore, and cement at the next World Trade Organization (WTO) meeting – the WTO Ministerial Conference to be held in Abu Dhabi from Feb. 26-29. India had previously expressed its concerns and decided to file a complaint with the WTO, as well as discuss the issue with EU officials in bilateral meetings. The EU argues that its Carbon Border Adjustment Mechanism (CBAM) complies with WTO rules by applying the same carbon price on imported goods as domestic producers. The legislation is intended to prevent European industry from being undercut by cheaper goods from countries with weaker environmental regulations. (Reuters)

EMEA

Car CO2 down – CO2 emissions from new passenger vehicles in the EU dropped by 5.1% between 2021 and 2022, with all car manufacturers meeting their 2022 carbon targets, according to a report from the International Council on Clean Transportation. The reductions are owed primarily to the growing uptake of electric vehicles, as the share of battery EVs rose by 33% and of plug-in hybrids by 3%, it found. Battery EVs made up over 13% of new vehicles as of 2022, and plug-ins just under 10%. The market share of diesel cars fell from 23% to 20% between 2021 and 2022, while the share of petrol vehicles dropped from 48% to 46%.

German love for engines – Belgium (currently holding the presidency of the Council of EU member states) has postponed a vote on new emission standards for trucks, initially planned for today, to Friday, after Germany withdrew its previous support for the law, leaving the majority unclear. The EU’s new CO2 standards for trucks would see average tailpipe emissions of new trucks being reduced by 90% by 2040, meaning that manufacturers would need to predominantly sell electric and hydrogen trucks by that date. Smaller countries such as Hungary or Slovakia already signalled opposition to the law, and Italian support is unclear as its main request for a mechanism to account for alternative fuels was not included. (Euractiv)

Caveat – In line with the earnings of the rest of the big five listed oil and gas companies over the past week, TotalEnergies on Wednesday reported a drop in fourth-quarter earnings as prices fell. The company also plans to buy back $2 bln of shares this quarter. Total aims to reach net zero by 2050 or earlier. A disclaimer in the earnings specifically mentions climate, saying that the company’s goals, including those concerning climate change and carbon neutrality, should not be interpreted as assurances that the goals will be achieved. On Tuesday, Total and Oil and Natural Gas Corporation also signed an agreement to carry out methane emissions detection and measurement campaigns, as part of ONGC’s goal of reducing its methane emissions in India by 2030.

Passing on the baton – A UK venture to build the world’s first fusion power plant will come to the fore this week as its EU-backed predecessor winds down, the FT reports. The new Spherical Tokamak for Energy Production (STEP) project to be built in Nottinghamshire aims to use innovative reactor technology to prove fusion energy as a safe and potentially inexhaustible source of low-carbon power. It succeeds the Joint European Torus (JET) project outside Oxford after 40 record-breaking years. Recent times have seen a wave of public and private investment into fusion energy as climate change and geopolitical conflict bring energy security to the fore. Fusion’s great promise is that by recreating the reaction that generates the Sun’s heat, power stations will be able to produce abundant energy anywhere in the world.

Clean heat – Energy companies, manufacturers, and financial groups have written to UK Energy Secretary Claire Coutinho to show their support for the clean heat market mechanism. The letter is in response to reports that the government is considering scrapping the policy following lobbying from boiler manufacturers. Think-tank E3G says the mechanism is already working and is incentivising boiler manufacturers to create attractive clean heat consumer offers. Policy chopping and changing sends a confusing signal to households, industry, and investors, E3G says. Among signatories to the letter are Daiken, OVO Energy, and Good Energy.

ASIA PACIFIC

Big off-taker –  Global tech giant Amazon has announced itself as the main long-term energy off-taker of the 125MW Wandoan South solar farm in Queensland, and with the farm’s official name being changed to the Amazon Solar Farm Australia, Renew Economy reports. It is the first time Amazon has entered into the renewables market in Queensland, as it seeks to secure 100% of its energy supply by 2025. The company already has contracts with two operational solar farms in New South Wakes, and a wind farm in Victoria. It has three rooftop solar installations at its facilities in Melbourne and Sydney. The Amazon Solar Farm’s operator, Vena Energy, now has an Australian operational renewable portfolio of 407 MW.

WoodTos Tossed – A potential merger of Australia’s two largest oil and gas companies was publicly scrapped today after both sides confirmed. The news of the possible A$80 bln deal broke two months ago and both Woodside Energy and Santos confirmed they were conducting due diligence but any deal would have had to offer compelling value to shareholders. Institutional investors, some of whom picked one stock and others that held both, questioned the deal given Santos shareholders would want a “compelling” premium for their long underpriced stock while Woodside saw a zero to 10% premium as realistic based on other recent M&A. Both companies have already increased in size via prior deals in the past two years, and should both have agreed a question over whether Australia’s competition regulator would have agreed remained. The deal would have created an LNG powerhouse, but many of Santos’ assets were not seen as of particular use by Woodside shareholders. One cheeky analyst named the potential merged entity ‘WoodTos’. 

Power planning – The Indian Ministry of New and Renewable Energy is working on the procedure to promote green hydrogen use in supporting round-the-clock electricity, it announced Wednesday. In order to promote the National Green Hydrogen Mission, the ministry is having discussions with various stakeholders including, the Ministry of Power, NTPC, Central Electricity Commission, and Solar Energy Corporation of India regarding potential options for the use of green hydrogen in combination with solar and wind energy, to ensure continuous supply of electricity, especially during peak power demand. Officials from various ministries have been directed to draft guidelines and the learnings from the first such project will be applied to bigger projects in the future, the ministry stated.

Country’s first – Malaysia’s Bursa Carbon Exchange plans to trade the country’s first nature-based carbon credit by the end of June this year, Eco-Business reported. The credits, registered under Verra, will be based on the Kuamut Rainforest Conservation Project in Sabah and the exchange plans to auction those credits as soon as they are issued. The project which includes over 83,000 hectares of tropical rainforests is expected to reduce emissions by 543,049 tonnes of CO2 emissions every year over the project’s lifespan of 30 years. Kuamut project is jointly managed by Permian Malaysia and the Sabah Forestry Department. It is also supported by indigenous community organisation PACOS Trust and the South East Asia Rainforest Research Partnership.

AMERICAS

Ban the ban – Some 23 Republican-led states are challenging the Biden administration’s recent decision to temporarily halt the approval of overseas shipments of LNG, E&E News reports. This action, initiated by the Department of Energy (DOE) to assess the climate and economic impacts of LNG exports, has sparked legal and political contention, highlighting the divide over the future of energy policy and climate initiatives. The AGs of Louisiana, Texas, and other states have penned a letter to President Biden and the DOE, criticising the move as a response to climate activist pressures that could harm the economy and compromise national security. They argue that this “surprise freeze” on LNG exports disregards America’s energy challenges in favour of an environmental agenda, potentially jeopardising jobs, billions in capital expenditures, and the energy needs of US allies. The DOE’s pause on LNG export approvals is under scrutiny for potentially overstepping its regulatory authority, with states invoking the “major questions” doctrine and questioning the DOE’s right to issue such a comprehensive pause without clear congressional authorisation. They contend that the Natural Gas Act generally favours export authorisation and that the pause violates procedural norms and regulatory timelines. Energy Secretary Jennifer Granholm defends the pause as a necessary step to fully understand LNG exports’ implications on the US and global environment, emphasising the DOE’s commitment to data-driven decision-making.

New Hampshire priorities – New Hampshire’s Department of Environmental Services (NHDES) on Monday released a list of priority measures for the state’s Priority Climate Action Plan (PCAP) focusing on transportation and residential building sectors. According to NHDES, the majority of the state’s GHG emissions are from the transportation and residential sectors, accounting for 43.8% and 20.5% of emissions, respectively. The draft hence highlights measures such as expanding electric vehicle infrastructure and incentivising EV purchase, as well as increasing public transportation availability by increasing current transit fleets and transitioning to cleaner options. For the building sector, the proposal calls to establish or scale existing programmes to weatherise and pre-weatherise residential buildings, and offer incentives to adopt heat pumps. PCAP is due to the US EPA on Mar. 1. Timely submittal of a PCAP is a prerequisite for competing in the second phase of the Climate Pollution Reduction Grants programme, the notice read, where the EPA will competitively award $4.3 bln in grants to eligible entities for implementation of measures listed in PCAP. Applications for funding to implement the measures are due Apr. 1. NHDES will be accepting comments regarding the draft plan until Feb. 20.

Supersede for Summit – The North Dakota Public Service Commission, which previously denied Summit Carbon Solutions’ application for a pipeline permit for construction of its CO2 pipeline in Aug. 2023, decided Wednesday that state rules supersede local ordinances on pipeline zoning issues, reported the Bismarck Tribune. This effectively prevents counties from restricting pipelines, as Burleigh and Emmons counties last year placed restrictions in response to Summit’s project. The PSC has yet to set a date for an updated hearing on the pipeline, as new material has flooded the case, said Commission Chair Randy Christmann.

Capturing Chevron’s emissions – Chevron New Energies, a division of US oil major Chevron, has signed a license agreement with engineering and construction firm Fluor to use its proprietary carbon capture solution to reduce CO2 emissions at Chevron’s Eastridge Cogeneration facility in Kern County, California, Carbon Herald reported Wednesday. Fluor’s Econamine FG PlusSM technology is expected to reduce the Eastridge facility’s carbon emissions by approximately 95%. The construction firm will develop a process design package, supply proprietary equipment, and provide technical support services throughout various stages of the project as part of the agreement.

Cleaning air some more – The US EPA has updated its air quality standard, the Clean Air Act, to address soot pollution by strengthening the annual national ambient air quality standard for fine particulate matter (PM2.5) from a level of 12 micrograms per cubic metre to 9 micrograms per cubic metre. EPA is also modifying the PM2.5 monitoring network design criteria to include a factor that accounts for proximity of populations at increased risk of PM2.5-related health effects to sources of air pollution. 

Puerto Rican power – A report Wednesday from the US DOE and Federal Emergency Management Agency (FEMA) found that Puerto Rico can fully shift to clean energy by 2050, reported WTOP News. Power plants that rely on coal, petroleum, and natural gas currently generate about 97% of Puerto Rico’s electricity, with renewables accounting for only 3%, but the two-year study found that the island has more than tenfold the renewable energy resources required to meet its demands through 2050. New infrastructure capable of generating hundreds of megawatts is needed, however, the report found, and officials have warned that such an investment could lead to additional rate increases on an island that already has a much higher electric rate compared with the US mainland. Accordingly, DOE officials on Wednesday announced a new funding programme that will subsidise residential rooftop solar and battery storage systems for up to 30,000 low-income households on the island. Homeowners who qualify can start applying by Feb. 22.

VOLUNTARY

Sky’s the limit – Montreal-based Deep Sky, a carbon removal project developer, has teamed up with Irish company NEG8 Carbon, a direct air capture (DAC) firm, to deploy new technology in Canada. As part of the collaboration, NEG8 Carbon will supply and install an air processing unit (APU) capable of removing over 300 tonnes of CO2 annually, the firms said in a release. Deep Sky will operate NEG8 Carbon’s DAC system at its Deep Sky Labs research facility in Quebec from 2025, utilising the region’s renewable hydroelectric energy. The partners will assess the DAC unit’s performance in carbon removal and energy consumption.

Compliance for all – Software company Offstream has unveiled a solution designed to streamline compliance for carbon removal project developers amidst the rapidly growing low-carbon economy. Launched in May, Offstream said it has quickly positioned itself as an ally for developers navigating the complexities of removal-based decarbonisation efforts, including biochar, DAC, and green ammonia projects. By offering a self-service tool that simplifies workflows, Offstream aims to significantly reduce the hurdles associated with compliance, thereby facilitating billion tonne-scale removals.

Redeeming offsets – The Philippines branch of oil-major Chevron, has introduced Caltex Carbon Offset Program at its service stations in the Philippines. Through the programme, the customers can choose to offset a portion of their CO2 emissions by using their Caltex loyalty points. Chevron has previously launched similar voluntary initiatives in Singapore and Malaysia. The programme offers customers the chance to redeem their loyalty points for carbon offset vouchers, which converts points into cash value, which Chevron and its affiliates will invest in two chosen carbon offset projects in Indonesia and Cambodia. Both projects, one being Rimba Raya Biodiversity Reserve Project in Indonesia and the other being Seima Protection Forest in Cambodia, are registered, validated, and verified by the Verified Carbon Standard (VCS) programme, local media WazzupPH reported.

Movin’ on up – Xpansiv has announced the promotion of Janet Mihalyfi to President, Managed Solutions. She previously held the position of Senior Vice President, Renewables at the Managed Solutions division of the marketplace. Mihalyfi will be responsible for guiding the strategic growth of the team, as well as the business unit’s ongoing operations, the firm said in a release. She will also join its management team. Xpansiv formed the Managed Solutions division when the company acquired SRECTrade in 2021. SRECTrade is the largest independent technology platform for managing and selling solar and renewable energy credits in North America.

SCIENCE & TECH

CO2 conversion gains momentum – The effort to transform CO2 from industrial emissions into fuel and plastics is gaining traction after McMaster University researchers and computational chemistry experts at the Danish Technical University in Copenhagen found how the process works and its bottlenecks, Phys.org reported Tuesday. The researchers aimed to figure out why synthetic materials that have been shown to catalyse and convert CO2 break down too quickly for the process to be practical at an industrial level. By implementing powerful magnification equipment at the Canadian Centre for Electron Microscopy (CCEM) at McMaster’s campus, the researchers captured the chemical reaction at the nanoscale, which enabled them to study the conversion process and understand the process of the catalyst breaking down under operating conditions. The study authors hope that the new information will facilitate the global effort to reduce carbon pollution by drawing CO2 away from waste streams and instead be recycled to create useful products that would otherwise be produced from fossil fuels. The work is published in the Nature Communications journal.

AND FINALLY…

When 5 is not enough – A recent study suggests that due to the increasing strength of hurricanes in a warming world, a new Category 6 should be considered for the Saffir-Simpson Hurricane Wind Scale. The paper, published in the Proceedings of the National Academy of Sciences, highlights the significant impact of climate change on storm intensity, proposing a hypothetical Category 6 for hurricanes with maximum sustained winds greater than 192 mph. This suggestion comes amidst observations of tropical cyclones undergoing more rapid and frequent intensification, becoming wetter, and a greater proportion reaching stronger storm categories. Examples include Super Typhoon Haiyan (2013), Hurricane Patricia (2015), and Super Typhoon Meranti (2016). The research indicates that human-caused climate change has more than doubled the risk of Category 6-strength storms since 1979. But critics of the Saffir-Simpson Scale argue it focuses solely on wind, ignoring other deadly aspects like storm surge and rainfall. Despite the call for a new category, some experts advocate for reforming the scale to include these other hazards or replacing it altogether, emphasising the need to adapt our metrics to better reflect the evolving risks posed by climate change.

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