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TOP STORY

EU ETS2 needs historically huge emissions reductions from cars, buildings to prevent “very high” allowance prices, study warns

Emissions covered by the upcoming EU ETS2 for road transportation and buildings will need to fall over five times faster than historic reduction rates in order to meet the scheme’s cap and prevent “very high” allowance prices, according to a new study.

AMERICAS

PREVIEW: WCI Q1 auction settlement expected to clear at new record high

WCI market participants largely expect the Wednesday Q1 auction to settle in line with front-month California Carbon Allowance (CCA) prices on the secondary market, which would result in a new record-high clearing price at quarterly sales in programme history.

Washington Senate passes WCI linkage bill

A bill to facilitate linking Washington’s carbon market with the California-Quebec WCI scheme passed the Senate chamber on Monday, bringing the jurisdictions one step closer in process that could take years.

Enrolment imminent for $80-mln US climate-smart ag programme

An $80-million climate-smart agriculture programme in the US aiming to test a new model to measure net GHG impacts will soon be open for enrolment in four states.

Officials call for cap-and-trade reauthorisation in California, suggest programme amendments to ease consumer costs

A joint hearing on Tuesday regarding California’s cap-and-trade scheme heard participants voice support for programme extension beyond 2030, although stakeholders proposed several improvements to better support disadvantaged communities.

Ontario moves to legislate referendum for future carbon programmes

The Ontario provincial government of Canada will introduce legislation that would require a referendum be held before the province’s lawmakers can implement new carbon pricing measures.

EMEA

EU climate chief calls on “crown jewel” carbon markets to contribute to 2040 90% target

The EU should put a special focus on carbon markets to reach its climate targets, with the European Commission’s climate chief suggesting it could help cut emissions by 90% compared to 1990 levels while also aiding other countries reach their reduction goals.

EU must focus on producing own green hydrogen before importing it -report

The EU needs to focus on developing its own green hydrogen supply before looking to import, as many of the potential supplier countries will struggle to scale up production and develop export infrastructure, according to research released on Tuesday.

European carbon removals intermediary channels $7 mln in corporate credit purchases

A Paris-headquartered carbon removals startup has sold credits worth more than $7 million to its corporate clients from novel technologies in its latest procurement round.

Rush to implement EU green transition could trigger collateral damage for manufacturing, says industry group

The rush to implement the EU Green Deal could lead to unintended consequences for industries in the bloc, such as the loss of manufacturing capacities and an increased dependence on imports, a press briefing heard.

Euro Markets: EUAs extend losses, approach two-year low before late rally ahead of position data

EU carbon allowances continued their retreat under the weight of selling pressure on Tuesday, reaching yet another 23-month low as traders focused on a key price level last seen during the first days of the conflict in Ukraine, before the market saw a late rally ahead of weekly position data due on Wednesday morning.

UK campaigners take action against carbon capture at Drax top-emitting plant

Drax Power Limited should be prevented from installing carbon capture technology at a power plant in Selby, the single-biggest carbon emitter in the UK, according to campaigners who have taken the first steps in challenging the plan.

ASIA PACIFIC

India launches wasteland restoration plan to drive massive carbon emissions cuts

The NITI Aayog, India’s planning commission, has launched an initiative to restore 26 million hectares of the country’s wastelands by 2030 and create an additional carbon sink of 2.5-3 billion tonnes of CO2e.

Investor, tech firm partner to launch Japan’s first nature-based carbon fund

A Tokyo-based sustainable investment platform has teamed up with a technology and advisory firm to launch what they say will be Japan’s first investment fund for nature-based carbon credits, with a target size of 10 billion yen ($67 million).

Australia’s Garnaut proposes Carbon Solutions Levy to underwrite transition

Two prominent Australian economists on Wednesday laid out their updated vision for how they see the country becoming a renewable energy superpower, chiefly by introducing a levy on all fossil fuel production facilities and imports.

NZ Market: Well-supplied compliance buyers and policy vacuum creates directionless NZU price

The NZU price has been trading sideways for the last six weeks, as emitters stocked up on units see no need to wade in, while the market awaits answers from the government on lingering policy issues, according to market participants.

INTERNATIONAL

UAE, Azerbaijan, Brazil announce “troika” to raise global climate ambition

The host of last annual UN climate summit, the UAE, has teamed up with Azerbaijan and Brazil where the next two events are due to take place, to form a partnership aimed at raising global climate ambition, they said Tuesday.

FEATURE: Conflict sensitivity should be front of mind when accessing critical energy transition minerals

More attention needs to be paid to conflict avoidance when accessing the materials needed for the green transition, say experts working at the intersection of climate and war.

VOLUNTARY

UAE firm partners with Indonesian project developer on mangrove restoration project

An Indonesian carbon project developer has signed an agreement with a Dubai-based firm to restore around 6,500 hectares of degraded mangrove forest in Aceh province.

Companies should reassess trade association membership for meaningful climate action -report

A new report highlights the frequent clash between companies’ environmental objectives and their membership of trade associations misaligned with the Paris Agreement.

New alliance seeks to forge transparent, trust-based future for nascent CO2 removals industry

A group of carbon dioxide removal (CDR) firms has joined forces to combine data, an established standard, and a digital MRV system to provide real-time tracking of projects and build trust and transparency in the nascent industry.

SHIPPING

Wider green corridors could cut shipping emissions further -report

South Korea could cut emissions from shipping, which it depends on, by up to 20 million tonnes of CO2 per year at a single port via establishing wider scale green corridors, according to a report released Tuesday.

AVIATION

Fuel tech firms close SAF deal for Queensland aviation hubs

Sustainable aviation fuel (SAF) hopeful Jet Zero signed an agreement Tuesday with a fuel tech firm to progress a SAF project in Queensland, Australia and cut local jet emissions by 70%.

BIODIVERSITY (FREE TO READ)

UNEP announces seven new flagship projects eyeing restoration of 40 mln hectares worldwide

The UN Environment Programme (UNEP) has announced seven new flagship restoration projects ahead of the 6th UN Environment Assembly (UNEA), which will be held from Feb. 26 to Mar. 1 in Nairobi, Kenya.

Australian group receives govt grant to teach AI how to recognise native species

An Australian environmental group has received federal government funding to train AI models how to accurately recognise and identify up to 120 native species.

Experts call for more local authority resourcing as UK biodiversity net gain takes root

Executives from across the nature sector have called on the UK government to better resource local authorities to help them implement its biodiversity net gain (BNG) policy, as the requirements become mandatory.

INTERVIEW: Forest carbon developer plans to launch biodiversity credits within four months

A forest carbon project developer plans to launch its first voluntary biodiversity units by mid-2024 in three African countries spanning a total area of 435,000 hectares, Carbon Pulse has learned.

Ireland to pay up to €6,000 per hectare for private woodland restoration

Republic of Ireland has launched a new scheme to pay woodland owners in conservation and restoration projects, as part of the country’s wider plan to tackle biodiversity loss, under which some owners could receive €6,000 per hectare.

Biodiversity Pulse: Tuesday February 13, 2024

A twice-weekly summary of our biodiversity news plus bite-sized updates from around the world. All articles in this edition are free to read (no subscription required).

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Premium job listings

• Programme Officer, Climate Adaptation Climate & Nature Linkages, Fauna & Flora – Cambridge, UK
• Senior Associate/Associate Principal, CrossBoundary Fund for Nature, CrossBoundary – Nairobi/London/Dakar/Elsewhere
• Team Lead (m/f/d), Carbon Markets and Pricing, adelphi – Berlin
• Senior Adviser, REDD+, Fauna & Flora – Cambridge, UK
• Director, Forest Management Program Development and Innovation, Verra – Remote (Worldwide)
• Manager, Integrated Marketing, Verra – Remote (Worldwide, with significant overlap with US business hours)
• Legal Counsel, Verra – Remote (US)
• Forest Carbon Technical Advisor, Wildlife Conservation Society – Phnom Penh
• Environmental Markets Correspondent, Carbon Pulse – Latin America

Or click here to see all job listings

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CONFERENCES

Carbon Forward Asia – March 7-8, Singapore and online: Our conference is anchored on relevant, current content shining the spotlight on opportunities and risks in the Asia-Pacific region. Organised by Carbon Pulse, Redshaw Advisors, and others working in the sector, the agenda will delve into pressing topics with regional and international leaders. With half of all ASEAN countries in the process of establishing domestic carbon markets, we’ll examine at the region’s emerging markets – both compliance and voluntary. And as China prepares to relaunch its CCER offset scheme, we’ll look at domestic demand and possible impacts on voluntary projects. The event will discuss what impact the EU’s Carbon Border Adjustment Mechanism (CBAM) will have. (On Mar. 6 there’s a separate CBAM workshop comprising everything you need to know). Conference attendees will also hear about CORSIA, Article 6, COP29, removals, nature-based solutions, and so much more. Carbon Forward Asia is also a meeting hub for corporates, investors, financiers, bankers, brokers, representatives from industrials, shipping and aviation, oil and gas, utilities, energy, traders, regulators and policy makers, carbon market analysts, project developers, exchanges, rating agencies, and NGOs. Register now!

North American Carbon World (NACW) 2024 – March 19-21, San Francisco: Attend NACW 2024 to learn, collaborate, and network with the North American carbon community and provide a stronger, unified force in advancing climate solutions. Hosted by the Climate Action Reserve, NACW will dive into major new policies, innovations, and developments that will shape and scale carbon markets and climate solutions with integrity and ambition. In addition to outstanding speakers, discussions, and insights, NACW provides premier networking opportunities with an active and engaged audience of leading climate and carbon professionals from all sectors of the economy. www.nacwconference.com

European Climate Summit – April 16-18, Florence: To kick off its annual regional climate summit series this year, IETA looks forward to welcoming delegates to its flagship ECS2024 event, taking place in Italy. ECS comes at a key inflection point for the region’s carbon market. How will the European carbon market evolve in its next phase, which starts in 2031? Around the world, carbon markets are emerging at the fastest ever pace, with new emissions trading systems being developed from Brazil to Vietnam. More markets may mean more opportunities for international cooperation and linking, and some of these could come to Europe. The health of the voluntary carbon market is also a hot topic this year, as the market works to overcome challenges. Environmental integrity and robust quality assurance are at the top of everyone’s mind, and IETA’s ECS2024 will address these issues as well. To register, simply click HERE to join as a delegate. In-person event.

Carbon Forward North America – June 11-12, Toronto: Join us in the Great White North to hear about the evolving carbon pricing and climate policy landscape in North America. Whether you are an emitter, investor, developer, or a new participant in any of the continent’s carbon markets – compliance or voluntary – Carbon Forward North America offers you the opportunity to gain knowledge on both present and future policy developments and market opportunities. Explore the chance to meet the right people or source the right solutions to help you enhance your business prospects or minimise your risk. Come meet the region’s world-leading carbon market experts, compliance players, government officials, investors, project developers, analysts, brokers, and other stakeholders. Agenda to be released soon. To express an interest in speaking or sponsoring, please email michelle@carbon-forward.com

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BITE-SIZED UPDATES FROM AROUND THE WORLD

From dusk to dawn – 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

Better representation required – Climate Action Network International (CAN) is calling out the lack of civil society representation at the IEA Ministerial taking place over three days, starting on Feb. 13, 2024. The International Energy Agency should use the opportunity to champion voices from the environmental, climate, or wider civil society movements for the multiple panels taking place over the three days, CAN says. As without wider public support, a just energy transition won’t happen, it says.

Scrambling for cover – Home insurers are abruptly pulling out of certain markets and cancelling coverage as climate change makes insuring some regions less and less viable, the FT reports. Homeowners on the US east coast are scrambling to find affordable alternatives as companies pull out of certain neighbourhoods, with global warming making extreme weather events like storms, floods, and wildfires more frequent and severe. Overall insurance losses from natural catastrophes has exceeded $100 bln over the last four consecutive years, spooking executives. In the US, a repricing of risks has sparked a significant rise in premiums, while in Europe, executives also warn that insurance prices will have to rise following a series of extreme weather events on the continent.

EMEA

Auto ambitions – Automotive Cells Company (ACC) has raised €4.4 bln in debt funding for the construction of three gigafactories in Europe, with the debt underwritten by commercial banks including including BNP Paribas, Deutsche Bank, ING and Intesa Sanpaolo. ACC will work with its three shareholders Stellantis, Mercedes-Benz and Saft, a subsidiary of TotalEnergies, to launch a capital increase (issuing new shares to finance investments), with Stellantis set to own 45% of ACC’s shares, Mercedes-Benz to own 30%, and Saft 25% by the end of March 2024. ACC officially opened the first of its three planned gigafactories in Billy-Berclau, France in June 2023, while Germany will house its second gigafactory, and Italy its third. (Automotive Logistics)

Thinking ahead – The German government should better anticipate potential carbon price jumps at the time of the introduction of the EU ETS II for buildings and transport in 2027, such as by adapting the national CO2 price and introducing support especially for low-income households, says an alliance of civil society groups following their commissioning of a report from the Institute for Applied Ecology and Green Budget Germany. The report foresees initial demand for EUAs to be high, making them expensive, because emissions reductions in transport and buildings will likely take time to materialise.

Not this year – The UK has pushed back the window for applications for free allocation of UKAs in the 2026-2030 phase of the UK ETS to Apr. 1, 2025-June 30, 2025, the JK ETS Authority, the market administrator, said in a statement issued on Tuesday. The government recently concluded a consultation on changes to the market and is scheduled to publish its response by the end of 2024, and the postponement of the application window will “enable the UK ETS Authority to put forward final proposals on future free allocation rules, allowing operators to determine their eligibility, what free allocations they are applying for [and] which data to submit”, the Authority said. The previous application window was set to run from Apr. 1 to June 30 this year. The Authority said the delay would not impact the issuance of 2026 UKAs.

Permit obstacles – Long and complex industrial permitting processes hinders companies’ green and digital transformation and the EU’s global competitiveness, according to a study by BusinessEurope of 240 companies across 21 European countries, with 35% of those being SMEs, conducted between May and June 2023. About 60% of responding companies have to wait over a year and up to 6 years for a permitting approval, while 83% find the complexity and duration of permitting an obstacle to investing in the EU. They report challenges with public authorities – speed and lack of coordination – as well as complications and uncertainty around EU and national regulations. Meanwhile, some of the EU’s key competitors like the US and China have time limits in place to address some of these difficulties, which the EU should also consider adopting, it says.

Lofty goals – MPs say that a planned fleet of small nuclear reactors (SMRs) in the UK are unlikely to help hit the country’s green target, the Guardian reports. Ministers’ approach to developing SMRs ”lacks clarity” and the role of the technology in helping meet the country’s 2035 clean energy target is unclear, said the Environmental Audit Committee. Great British Body was launched last year to deliver new power stations including a fleet of SMRs, with the government having spent £215 mln on developing SMR design and running a competition for companies to bid for government contracts. Yet, a final investment decision for the first plant is not expected until 2029, meaning SMRs will unlikely contribute much to the 2035 target.

Rocky reliance – Austria’s dependence on Russian gas has risen from 80% to 98% in two years, leading the country’s energy minister to signal the alarm ahead of a national election due to take place in the Autumn, Euractiv reports. The high share of Russian gas is partly caused by rapidly falling gas consumption in Austria – from 100 TWh down to 75 TWh in 2023, according to figures from the energy ministry. While another reason is the contractual ties, with Austrian utility OMV committed to a “take-or-pay” arrangement with Gazprom for up to 60 TWh a year, nearly enough to meet the country’s entire gas demand. However, the energy minister wants to tackle this by encouraging local utilities they can cope without Russian gas, by breaking the de-facto contract with Gazprom, and by considering natural gas in the context of the country’s national security strategy.

ASIA PACIFIC

Halfway there – Japan’s Cabinet on Tuesday approved the draft CCS Business Law, which would establish a permit system for test drilling and storage projects and businesses. Capturing and storing CO2, both domestically and abroad, is a key part of the country’s efforts to meet its 2030 climate targets. The CCS bill is now being passed on to parliament for final approval during its current session, the environment ministry said. Cabinet also approved the Bill on the Promotion of the Supply and Utilisation of Low-Carbon Hydrogen for a Smooth Transition to a Decarbonised Growth Economic Structure.

Centennials – In Japan, developers Green Foresters have launched the Tochigi Centennial Forest Creation Association to help businesses in the Tochigi prefecture reach net zero as well as becoming nature positive, it announced Tuesday. Through afforestation and reforestation projects it intends to generate carbon credits that sponsors of the association can use towards their individual targets. Tochigi Bank, conservation group More Trees, and Sumitomo Osaka Cement are among those that have partnered with the initiative so far.

Cookstoves credits – US-headquartered MicroEnergy Credits has issued carbon credits for its induction cookstove programme in rural parts of India, under the new methodology for metered and measured energy cooking devices of Gold Standard, the firm announced Tuesday. According to the statement released by the firm, cooking done by the traditional methods using wood, coal, and biomass has been a major source of indoor air pollution in India. After the certification, the firm has achieved the impact of removing 85,310 tonnes of CO2 annually, benefitting 133,525 households and creating over 100 jobs in the impact area, it stated.

AMERICAS

South Dakota update – House Bill (HB) 1219, which sought to prohibit the use of eminent domain by CO2 pipelines, failed 7-6 in a South Dakota House Commerce and Energy Committee meeting Monday. Eminent domain allows entities to buy access to private land for projects, and Representative Jon Hansen (R), who introduced the bill, noted that it would still allow pipeline construction, but without unjustly condemning private property, the South Dakota Broadcasters Association reported. This marks the second failure of similar attempts at legislation, following a nearly identical bill that made it through the House last year before its defeat in a Senate committee. Meanwhile, two other bills regarding the fate of carbon pipelines in the state – HB 1185 and HB 1186 – both passed the House floor and are now awaiting vote by the Senate Commerce and Energy Committee.

Lifting LNG permit pause – A bill introduced by Texas Representative August Pfluger (R) to lift the ongoing pause on pending and future approvals of liquefied natural gas (LNG) exports has received opposition from the White House, although President Joe Biden may not veto the measure, E&E reported Tuesday. HR 7176 would grant the Federal Energy Regulatory Commission the sole authority to approve LNG facilities, consequently removing the role of the US Department of Energy in determining LNG export permits. The White House said the bill would eliminate regulatory procedures designed to protect consumers from energy price hikes and the effects of climate change. However, the bill has garnered support from Democratic co-sponsors, Representatives Henry Cuellar and Mary Peltola, as well as 17 other House Republicans. HB 7176 has been referred to the House Committee on Energy and Commerce, where it awaits a floor vote this week.

Farm heating exemption – Canadian budget watchdog Parliamentary Budget Officer (PBO) found Bill C-234, a carbon price exemption bill that would remove the pollution fee from farm facility heating, would reduce fuel charge proceeds by $19 mln in 2023-2024, increasing to $27 mln in 2025-2026, according to a report published Tuesday. This is roughly one quarter of the PBO’s prior estimate published on Sep. 15, 2023, which was not inclusive of two amendments recently passed in Senate on Dec. 12, 2023. Tuesday’s PBO report takes into account both amendments, the first of which limits the exemption for agricultural fuels to natural gas and propane used in grain drying operations and provides no exemption for fuels used to heat or cool a structure used for raising or housing livestock or growing crops. The second amendment limits a sunset clause to three years instead of eight. The PBO assumed that the federal government would reduce rebates so here is no budgetary impact.

Greenwashing – North American non-profit Stand.earth has asked Canada’s Competition Bureau to investigate the marketing campaign of athleticwear company Lululemon, claiming that the firm is misleading customers about its environmental impacts, the Canadian Press reported Monday. While Lululemon has publicly aimed to reduce its Scope 3 emissions intensity by 60%, the company’s reports demonstrate that its emissions rose to nearly 1.7 Mt – up from roughly 830,000 tonnes in 2020. Stand.earth claims that the company’s marketing campaign “goes too far” with the impression that its Lululemon’s products contribute positively to the environment and planet.

Quebec emissions – Quebec’s environment ministry published the 2022 emissions of covered entities under its cap-and-trade programme on Wednesday, which saw seven entities produce a total of just under 19.8 mln tCO2e, a 0.19% decline from 2021 emissions produced by the same entities. Technology manufacturer Teledyne Digital Imaging, recycling company Terrapure, energy firms TransCanada Energy and TransCanada Pipelines, as well as agricultural outfit Viterra Canada all reduced emissions from 2021, with the most significant emissions decline of 33% seen in TransCanada Pipelines. Meanwhile, chemical company WR Grace Canada and zinc refinery CEZinc both increased emissions relative to 2021, with CEZinc seeing the greatest increase at 26.5%.

VOLUNTARY

A new epoch – Anew Climate has developed a new model to assess nature-based forest carbon projects, leveraging machine learning, cloud computing and high-frequency satellite monitoring, as well as ground-level data collection. Using technology initially designed by the military, aerospace sector, and academic institutions, the Epoch Evaluation Platform will enhance carbon credit integrity via improved data transparency and rigour around forest carbon projects, Anew said. The project developer will be rolling out Epoch to its more than 6 million acres (2.4 mln hectares) of forest properties, and these projects will be identified as such in their ACR listings, with some already registered.

SCIENCE & TECH

Optimistic outlook – Strong corporate demand for ”durable” carbon credits is fuelling optimism that pulling CO2 from the sky will get cheaper despite the technology’s seeming unprofitability, writes S&P Global. CDR credit purchases rose from about 615,000 tonnes’ worth in 2022 to more than seven times that amount in 2023, according to industry tracker CDR.fyi. More than 5,000 companies have committed to reaching net-zero GHG emissions by mid-century, meaning there is a huge untapped potential for buying CDR today, said an expert at a Washington DC event last week about the CDR sector.

Ocean discovery – Deep ocean faults, previously thought inactive, may act as major CO2 storage sites, according to a new study by Queen Mary University of London and scientists at the Woods Hole Oceanographic Institution (WHOI). The study analysed rocks from the St. Paul’s transform fault, a remote location 500 km off the coast of Brazil, finding that these rocks may act as significant sinks for CO2. The mantle rocks exposed along these faults react with CO2-rich hydrothermal fluids, locking away the carbon and potentially impacting global geological CO2 fluxes. The discovery is important for considering all aspects of the carbon cycle for accurate climate modelling.

AND FINALLY…

Removers gonna remove – Direct air capture (DAC) firm Spiritus has pledged to remove 40 tonnes of CO2 from the atmosphere to account for emissions from Taylor Swift’s flight this weekend from Japan to the Super Bowl in Las Vegas. Spiritus said the estimated cost to offset the amount of CO2 using “current technologies” is $28,000, based on a price of $700/tonne. “Bringing the cost of carbon removal down to an accessible price is core to Spiritus’ mission. Having developed a technology that mimics aspects of the human lung, Spiritus’ technology has the potential to reduce the cost of carbon removal to below $100 per tonne. In the future, Spiritus’ Direct Air Capture technology could decrease the total cost of removing the flight’s carbon emissions to approximately $4,000,” the company said. Spiritus claims it’s at the forefront of DAC technology, having developed a “unique solution that achieves rapid sorption and desorption rates at a fraction of the sorbent cost versus state-of-the-art sorbents under passive DAC conditions”. It said its approach combines the Spiritus Sorbent and the Spiritus Carbon Orchard, offering a scalable and modular system for low-cost DAC and DAC with sequestration (DACS). Spiritus acknowledged that Swift has purchased carbon credits against her flight emissions, but the company said its actions “go beyond offsetting to actually achieve net zero impact”. It’s been reported that her private jet was just one of a massive 882 that flew to Las Vegas for the Super Bowl.

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