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TOP STORY
RGGI carbon prices hit new record after Q1 auction clears at all-time high, 2024 Cost Containment Reserve emptied
RGGI prices surged to a new all-time high on Friday on news the scheme’s first auction of 2024 cleared at a fresh record and completely emptied this year’s Cost Containment Reserve (CCR).
WEEKEND READS
FEATURE: Russian hints of a green transition are ‘a Potemkin village’, experts say
Moscow says it is looking to build up its clean energy industry and price greenhouse gas emissions — but the talk is seen by some as purely “lip service” designed to look like Russia is acting on climate change.
FEATURE: ‘The Hamburg case’ – How steelmakers won the fight for free EU emissions permits, with help from Germany
The European steel industry has won a special carve-out from the EU ETS, ensuring the sector continues to receive an estimated 18 million carbon allowances for free until 2030, according to previously unreleased documents seen by Carbon Pulse.
INTERNATIONAL
US-led Indo-Pacific initiative plans Article 6 collaboration, weighs big spending on carbon removals
The Indo-Pacific Economic Framework (IPEF), spanning 13 countries across the region and the US, has penned a Clean Economy Agreement (CEA) that involves collaboration on the Paris Agreement’s Article 6 and potential spending of as much as $10-15 billion on carbon removals this decade.
AMERICAS
US federal appeals court hits pause on SEC’s new climate disclosure regulations
A US federal court on Friday halted the US Securities and Exchange Commission’s (SEC) new climate disclosure rules amid mounting legal challenges.
WCI current year auction volumes pick up for Q2 sale
California-Quebec will offer slightly more allowances at May’s WCI auction compared to Q1, breaking the pattern of reduced volumes offered over the last two sales, a government notice published Friday showed.
California regulator ARB addresses LCFS concerns, sees no delay in implementation of amendments
Stakeholders of California regulator ARB’s Environmental Justice Advisory Committee (EJAC) presented concerns surrounding biofuels during a meeting Friday, while ARB staff maintained that changes to the Low Carbon Fuel Standard (LCFS) will take effect by early 2025 at the latest.
Speculators slash holdings across North American carbon markets, compliance entities add CCAs, RGAs
Speculators continued to shed holdings across North American carbon markets, as producers once again increased California Carbon Allowance (CCA) and RGGI Allowance (RGA) net length while dropping Washington Carbon Allowance (WCA) permits, data published Friday by the US Commodities and Futures Trading Commission (CFTC) showed.
Bolivia proposes Amazonian mechanism as a non-market approach to climate mitigation -media
Bolivia supports creating a regional Amazonian mechanism for climate change mitigation and adaptation through sustainable forest management, but would avoid carbon markets, according to remarks by Bolivian Vice-President David Choquehuanca, as reported by local media.
VOLUNTARY
Verra removes troubled REDD carbon project in DRC from registry
Verra has removed a voluntary carbon REDD avoided deforestation project in the Democratic Republic of Congo (DRC) from its registry after a senior government committee recommended that its concession contracts, alongside many others, be cancelled for breaking the law, the standard body told Carbon Pulse Friday.
Another Japanese bank invests in Australian CCUS firm
Another Japanese bank has made a strategic investment in an Australian clean technology firm that specialises in CCUS.
Researchers find way to improve yields, reduce carbon emissions from rice production
Researchers have developed what they say is a promising strategy for enhancing food security and advancing carbon neutrality in global rice production.
Optimised livestock grazing the fine line between carbon source and sink, study finds
Livestock grazing is a ‘double-edged sword’ when it comes to climate change, a new study has found, with intensity optimisation the key to determining whether pastures are carbon sources or sinks.
EMEA
EU countries reach long-awaited but diluted deal on corporate due diligence bill
Ambassadors from the 27 EU member states reached agreement Friday on a bill setting due diligence rules for large companies, including an obligation to adopt Paris-aligned climate plans, with a weakened text ending a cycle of meetings to resolve the EU’s internal divisions.
EU waters down green farming policies in bid to appease farmers
The European Commission finalised a series of legislative proposals that would cut back on green requirements for farmers, announcing the amendments late on Friday afternoon.
Norway to scrap floor price for EU ETS compensation scheme, set annual grant ceiling
Norway is scrapping the floor price for its indirect EU ETS cost compensation scheme and introducing an annual ceiling on the total amount of grant funding available to companies, which is intended to shield energy-intensive industries from carbon leakage.
Germany on track to reach 2030 climate goal, lagging on sectoral targets, agency says
Germany is on track to reach its 2030 national greenhouse gas (GHG) target, recording the sharpest decline in emissions since 1990 last year, but is lagging behind on sectoral goals for agriculture, transport and the building sector, the country’s environment agency said on Friday.
Euro Markets: EUAs give up sizeable gains after failing to breach key level as bears regain confidence
European carbon prices posted a modest daily and weekly gain on Friday, after firmer natural gas prices and the strongest auction in nearly two weeks triggered an unsuccessful attempt to breach a major price level, handing the initiative back to bears.
ASIA PACIFIC
China releases draft emissions guidelines for aluminium smelting in latest sign of imminent ETS expansion
China’s environment ministry on Friday released for public consultation draft CO2 emissions accounting and reporting guidelines for the aluminium smelting industry as part of preparations to expand its emissions trading scheme beyond coal-fired power plants.
Indian exchange to roll out trading in the domestic emissions scheme in 2025
One of the three exchanges planning to host trading of carbon allowances under India’s emissions trading scheme expects to launch the emissions market in the second quarter of the 2025 financial year after the government finalises regulations, and roll it out across states gradually, local media reported.
Major Japanese gas supplier to fund early-stage nature-based projects
One of Japan’s largest gas suppliers has joined hands with a tech consultancy to provide early-stage financing for nature-based voluntary projects, as part of its credit purchase strategy for carbon neutral products.
Safeguard Mechanism’s cost containment measure unlikely to be needed, will stifle innovation, outlook says
The cost containment measure (CCM) function under Australia’s reformed Safeguard Mechanism is unlikely to be needed and its purpose should be addressed, according to analysis released Friday.
Australian govt suggests offering ACCUs to biomethane producers as a way to incentivise investment
Biomethane producers could earn Australian Carbon Credit Units (ACCUs) as a way to attract finance and investment in decarbonising hard-to-abate sectors, according to a government discussion paper, however cost and lack of current demand could prove challenging.
German chemicals giant to support rice-based carbon credit creation in Japan
A subsidiary of a German chemicals manufacturer will work with two project developers to promote its crop cultivation management software, which can simplify the process of creating carbon credits under Japan’s domestic offset scheme.
CN Markets: CEA price touches all-time high as expectations remain optimistic
Chinese carbon prices reached a new high this week despite a lack of substantial compliance demand, as optimistic expectations about policy updates continue to buoy the market.
BIODIVERSITY (FREE TO READ)
BCA’s Indigenous Peoples panel releases biodiversity credits recommendations, opens consultation
The Community Advisory Panel (CAP) of the UN-backed Biodiversity Credit Alliance (BCA) has released draft recommendations on biodiversity credits for consultation, in a bid to bring attention to Indigenous People and local communities’ rights in the emerging voluntary market.
US investor liquidates biodiversity fund
US-headquartered Karner Blue Capital (KBC) has liquidated its biodiversity fund after five years following difficulties in attracting sufficient capital, Carbon Pulse has learned.
NZ minister walks back Significant Natural Areas announcement after deemed unlawful
Just one day after it announced local councils would no longer have to comply with Significant Natural Areas (SNAs) considerations, the New Zealand government has had to retract its announcement after realising it would be unlawful to do so.
Soy production linked to “shocking” land clearance in Brazil’s Cerrado and the Amazon, study says
Nearly 60,000 hectares of forest was cleared in Brazil’s Cerrado and the Amazon in late 2023, with likely ties to the supply chains of some of the world’s largest soy exporters, including Bunge and Cargill, a report has found.
UK govt allocates £25 mln to restore critical nature habitats
The UK government has announced £25 million in funding towards 20 projects aimed at protecting and restoring wildlife habitats across a total area equivalent to the size of York.
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CONFERENCES
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.
Next steps for the UK Emissions Trading Scheme – April 22, Online: Hosted by Westminster Energy, Environment & Transport Forum, stakeholders and policymakers will explore priorities for implementation and maximising the carbon market’s contribution toward the UK’s net zero strategy. Discussion will consider policy priorities, challenges for industries, and plans to expand the scheme to include domestic shipping and energy from waste. Sessions will also explore the auction reserve price, the forthcoming CBAM, and strategies to enhance the UK ETS’s efficacy while mitigating negative impacts. Book your place
Carbon Forward Turkiye – May 9-10, Izmir: With the launch of the pilot ETS in Q4 and a burgeoning voluntary carbon market in the country, this event will give attendees an understanding of the significant impact these schemes, as well as the EU’s CBAM, will have on your business. Full conference agenda coming soon. Secure your spot
Argus Asia Carbon Conference – May 13-15, Kuala Lumpur: Join over 200 industry leaders and senior government officials at the Argus Asia Carbon Conference in Kuala Lumpur on 13-15 May 2024. Connect with key players and explore new opportunities in the region as we discuss innovations in carbon technology, advances in voluntary and compliance markets, the impact of CBAM, financing, nature-based project developments, and more. With ministerial addresses and keynote sessions from Petronas and SaraCarbon, this is your opportunity to gain valuable insights on pan-Asia’s evolving carbon markets. Register
Argus Europe Carbon Conference – May 21-23, Nice: Plan your carbon strategy through market-driven decarbonisation solutions at the at the Argus Europe Carbon Conference on 21-23 May in Nice, France, as we examine the EU ETS and other global compliance structures, voluntary carbon markets and their intersection with carbon abatement industries. This year’s agenda covers the integration of the maritime sector into the EU ETS, the impact of Europe’s exported carbon price through CBAM, developments in carbon removal technologies, voluntary certification methods, and developments around diverse, high-quality credits from Verra and many other leading standards. Register your place to explore new opportunities within Europe and globally.
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
Carbon Forward Expo – October 8-10, London and Online: Save the date! More info coming soon…
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BITE-SIZED UPDATES FROM AROUND THE WORLD
AMERICAS
Climate science at the “woke” Pentagon – If Donald Trump is re-elected, his administration may stop the US military from using climate science in national security planning, based on proposals from conservative groups in Project 2025, led by the Heritage Foundation. According to E&E News, the initiative criticises the Department of Defense for prioritising climate considerations and “leftist politics” over military readiness. Critics argue that ignoring climate science in military planning could hinder the US in understanding and preparing for climate-related national security threats, including how adversaries might leverage climate change. Project 2025 aims to shift control of the National Defense Strategy from the Defense Department to White House political appointees, focusing on minimising climate change considerations and other policies deemed polarising. Critics within the military and political spheres warn that such changes could undermine the Pentagon’s mission and global stability efforts, as climate change is considered a significant threat multiplier. Despite the proposals, it’s uncertain whether the Department of Defense will comply with such a drastic redirection from established climate policies and strategies.
Goodbye gasoline – The EPA’s final clean car rule is expected to be announced next Wednesday, with a separate rule for heavy trucks to be announced later, reports Politico. The current policy proposal, first announced by the EPA in Apr. 2023, outlined for two-thirds of new passenger cars and one-fourth of new heavy trucks sold in the US to be all-electric by 2032, and requires carmakers to cut their average CO2 emissions by 52% between 2027-2032. However, in February, The New York Times reported that the EPA looked to relax its limits on tailpipe emissions intended to shift Americans from gas-powered cars to electric vehicles. A Feb. 7 report published by the Congressional Budget Office also found the Apr. 2023 EPA proposal to be the largest factor in revised costs contributing to ongoing federal deficits, totalling $224 bln out of an overall $428 bln in Inflation Reduction Act-related deficits through 2033.
Forest carbon study – A New Hampshire bill to study nature-based carbon credits generated in-state will head to the House floor for vote following a 19-0 vote in the House Ways and Means Committee. HB 1709, sponsored by House Representative Eamon Kelley (D), would establish a forest commission composed of lawmakers, agency staff, academia, public, and a conservation NGO to study the effects of forest carbon programmes in-state. The commission would include, but not be limited to: the study of the programmes’ effects on local and state tax revenue; alternative revenue sources; impacts to the forest products industry; trends in local participation; and how forest carbon agreements should be reported to the state.
EMEA
Dirty money – Germany’s largest investment funds are continuing to put billions of euros into fossil fuel companies, says Greenpeace, with none of the four investment funds analysed by the NGO having transitioned to an investment portfolio in line with the Paris Agreement targets. With total fossil fuel investments of €16.8 bln, Deutsche Bank subsidiary DWS leads the ranking of fossil fuel investors, putting about four times more into companies in the oil, gas, and coal business than its competitors Allianz Global Investors, Deka Investments, and Union Investment, the NGO finds. Union Investment has at least tightened its rulebook for coal investments, the analysis finds. Greenpeace is calling on investment funds to quickly establish credible rules for fossil fuel investments and to halt funding of coal and expanding oil and gas extraction altogether. (Clean Energy Wire)
Market backing – The EU should develop downstream markets within the steel value chain that can absorb the green premium of the 20-50% higher production cost for green steel, or otherwise risks a lack of commercial viability for the low-carbon steel projects expected across the bloc by 2030. Some EU companies from sectors like construction, heating and cooling, automotive, and white goods have pledged to buy green steel, but the demand is only a fraction of projected annual capacity by 2030, writes a CEPS analyst. For green steel production to be commercially viable, the EU ETS price needs to rise substantially and average power prices also need to drop, according to Agora Industry. While there also needs to be more consensus around what green steel actually is in order to avoid greenwashing, and transitional regulatory measures to create lead markets for green steel to guarantee demand for the material until cost parity is achieved between green and conventional steelmaking.
Green job growth – The number of people employed in the UK’s green industries rose by almost 20% from 2020 to 2022, with the data suggesting that UK employment in the area reached 639,400 full-time equivalents in 2022, according to figures from the Office for National Statistic (ONS). Green jobs are defined by the agency as “employment in an activity that contributes to protecting or restoring the environment, including those that mitigate or adapt to climate change”. This includes environmental charities, environmental consultancy, renewable energy, recycling nature restoration, and low-carbon transport. The largest number of green jobs came under the activities of energy efficient products and waste, with around 116,100 and 138,900 FTE employees in 2022, respectively. Large increases were seen in a number of activities including low-carbon transport, renewable energy, and environmental consultancy. (the Independent)
A clean transition – Ukraine will be able to transition from fossil fuels to carbon-free power generation by 2050 through expanding the use of renewable energy, according to experts from the organisations REKK, DiXi Group, the Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine, the Austrian Institute of Technology, and the Project for the Promotion of Regulatory Issues. The use of coal in Ukraine in particular can be stopped by 2035 without endangering resource sufficiency in the energy system, the study finds. Under both of its net zero scenarios, by 2030, Ukraine’s coal-fired power plant capacity will be only 850 MW, compared to 17,000 MW today. The country needs to improve the investment climate to reduce risk for investors and allow the capital in to fund the energy transition, it finds.
EU opens Greenland office – European Commission president Ursula von der Leyen cut the ribbon Friday on the EU’s brand new representation office in Greenland, saying the move marks a new era in the EU’s presence in the Arctic region. The opening of an EU Office in Nuuk is part of the EU’s Arctic strategy. Its aim will be to “deepen cooperation across a variety of fields, including education, renewable energy, critical raw materials and biodiversity protection,” the EU executive said in a statement. The opening comes with the signature of two bilateral cooperation agreements, including a €22.5 million “Green Growth programme” that will see the EU “invest in energy and critical raw materials value chains, environmental preservation, and research, to help diversify Greenland’s economy and develop strategic industries like clean hydrogen.” While not in the EU, the autonomous Danish territory is of strong interest to Brussels, especially for highly sought after raw materials, writes the Guardian, saying Greenland is thought to hold 25 of the 34 materials needed in Europe.
ASIA PACIFIC
A good shot – New Zealand’s Associate Agricultural Minister and Act MP Andrew Hoggard said there is a “good shot” that they could stop agricultural emissions ever being priced in any form, Stuff NZ reports. National has promised to keep agricultural carbon out of the ETS, and not to introduce any form of pricing mechanism on the sector until at least 2030. However, Hoggard told a political panel discussion he thought he had “a good shot” at stopping even that from happening. Labour previously attempted to introduce a split-gas farm level emissions pricing scheme, but was forced to delay it after it argued that the industry was not prepared for one, before it promptly lost office. National MP Mike Butterick, who was also on the panel, said there was no update on whether or not pricing agricultural emissions in the future would be scrapped or not. Emissions from the sector make up roughly half of New Zealand’s total GHG output.
VOLUNTARY
More bad news – The Guardian published another article critical of carbon offsetting on Friday, with a long feature taking aim at ‘carbon cowboys’ who have failed to distribute revenues from nature-based projects to local communities. The article reports that people living within the bounds of the large Kariba REDD+ project in Zimbabwe have not seen much of the profit. Since 2011, the Verra-registered activity has generated revenue of more than €100 mln from selling voluntary carbon credits, but only a fraction of the money has been distributed to villages, according to the article. South Pole walked away from the project in October after negative media coverage, mostly focused on over-crediting, and Verra has also halted credit issuance.
Green flag – CUSIP Global Services, an issuer of alphanumeric codes for financial instruments, has partnered with green investment advocacy group the Climate Bonds Initiative to add text to the standard code for green bonds describing additional sustainability data. The new information, which includes more granular use of proceeds insights and non-alignment details, will cover municipal and corporate debt issued globally, and is provided at no cost to CUSIP customers. This constitutes the latest industry-led push to evaluate, flag, or decarbonise capital markets activity. Currently, the Partnership for Carbon Accounting Financials (PCAF) offers standards and guidance for reporting ‘facilitated emissions’ from capital markets activity, in keeping with the principles of the GHG Protocol’s Category 15. However, green financial disclosure regulations typically do not include facilitated emissions, focusing instead on financed emissions (from investments).
Make way for Hayes – Former Biden administration climate official David Hayes has joined the board of directors of a Houston-based carbon sequestration company, the firm announced this week. Hayes joined the board of Vaulted Deep in January. The company boasts its “advanced slurry sequestration technology,” which involves taking organic waste that would have decomposed — such as paper sludge and agricultural and livestock waste — and injecting it underground permanently. Hayes, a veteran of Democratic administrations, is now a lecturer at Stanford Law School. He served as Interior deputy secretary in the Clinton and Obama administrations before he joined the Biden White House as a climate aide. His expertise will help “critically accelerate our efforts to geologically sequester carbon at scale and deliver key environmental co-benefits, while helping solidify the future of carbon removal as an industry,” Vaulted Deep’s CEO Julia Reichelstein said in a statement. (E&E News)
AND FINALLY…
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