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TOP STORY
INTERVIEW: Battling to stay afloat, huge Indonesian REDD+ project slashes headcount while warning credit issuance could more than halve
Rimba Raya is struggling to keep afloat after the concession holder of the popular Indonesian REDD+ project drastically cut staff numbers and warned there could be a sharp drop in voluntary carbon credit issuance, possibly impacting historical supplies, after it adopts Verra’s new consolidated methodology for avoided deforestation.
WEEKEND READ
ANALYSIS: CBAM hedging unlikely to have impact on EU ETS market, experts say
Some companies, including international ones, are already trying to hedge their CBAM certificate exposure by buying EUAs on the forward market, but this additional demand will not impact EUA prices, according to market observers.
INTERNATIONAL
Taliban joins UN climate change talks for the first time
The Taliban government in Afghanistan has entered the first stage of discussions with the UN, donors, NGOs, and other stakeholders to understand the impact of climate change on the Central Asian nation.
World could add 40% new LNG capacity before decade’s end, report says
The world’s long-term supply of LNG may well outstrip demand and markets may tip into oversupply in just two years, according to a report published this week, adding to concerns over the fossil fuel industry’s ability to reduce carbon emissions in line with global targets.
ASIA PACIFIC
CN Markets: CEAs jump more than 10%, top 100 yuan for the first time
China’s national carbon market saw allowance prices extend recent gains over the past week, climbing above the 100 yuan ($13.80) level and rising for the seventh straight session, amid continued optimism among participants.
Australia opens extended fourth exit window for ERF contract holders
Australia’s Clean Energy Regulator on Friday opened the fourth pilot exit arrangement window for companies with fixed delivery contracts to sell carbon credits to the government’s Emissions Reductions Fund (ERF), with additional eligibility requirements for sellers.
Japan introduces market maker scheme to boost carbon trading liquidity
Japan has decided to officially introduce a market maker mechanism to boost liquidity in its exchange-traded domestic carbon market.
AMERICAS
Over-allocated California-Quebec carbon markets to miss 2030 emissions targets -study
The joint WCI carbon market’s generous allowance budgets are likely to be ineffective in reaching the jurisdictions’ CO2 reduction targets for 2030, academic researchers warn, instead recommending large cap adjustments or widened scopes while likening the cap-and-trade system to an overly complicated carbon tax.
US energy-related CO2 emissions reductions decline 2.7% in 2023, driven by power sector
US energy-related CO2 emissions decreased slightly year-on-year in 2023, largely due to reduced coal-fired electricity generation as natural gas and solar power generation increased, according to federal data.
Compliance builds long-dated CCA holdings, speculators de-risk across rest of North American carbon markets
Speculators continued to de-risk across North American carbon markets, while WCI compliance entities built vintage 2025 holdings this week, according to data from the US Commodity Futures Trading Commissions (CFTC) released Friday.
LATAM Roundup: Latin America’s compliance carbon systems integrate with voluntary market, pursue growth
Carbon Pulse rounds up recent developments in compliance carbon systems within the Latin America and Caribbean region, taking a look at Brazil’s stabilising market for emissions reductions credits from biofuels after a year of rising prices, and summarising the carbon tax regimes that accept offsets.
US-based paint producer announces subsidiary to establish carbon capture facility
A Florida-headquartered paint producer this week unveiled a subsidiary with plans to build a facility in Arizona that will use captured CO2 to manufacture concrete products.
EMEA
CBAM must tackle recycled aluminium emissions loophole, industry and NGOs say
The EU’s carbon border adjustment mechanism (CBAM) will drive up prices of aluminium, as it fails to address a loophole for process scrap that could lead to vast amounts of carbon emissions being imported into the bloc, a report by a consulting firm and a panel of industry and NGO experts warned this week.
France to launch first-ever carbon storage projects
The French government will authorise the construction of its first carbon storage facilities, signing contracts with some of the largest emitters in the country as part of its efforts to reach net zero emissions by 2050, Industry and Energy Minister Delegate Roland Lescure announced on Friday.
Green hydrogen can help slash curtailment costs in UK by absorbing surplus renewable energy
The production of green hydrogen during periods of high renewable energy supply could help save the UK hundreds of millions of pounds each year in curtailment costs, according to a report by an engineering company.
UK authority issues guidance for finance firms ahead of new anti-greenwashing rule
The UK’s Financial Conduct Authority (FCA) has published guidance aimed at helping financial firms comply with a forthcoming anti-greenwashing rule aimed at building trust in sustainable investments, including to help companies decarbonise.
Euro Markets: EUAs retreat, post second weekly loss on profit taking in quiet trading
European carbon permit prices posted a second weekly loss in succession on Friday as prices retreated in concert with TTF natural gas, with sources also reporting healthy profit-taking ahead of the weekend.
VOLUNTARY
South Pole secures fresh funding for changes under new leadership
Swiss-headquartered voluntary carbon project developer and investor South Pole has secured fresh financing from its largest shareholders, setting the company up for the next phase of development following recent changes in senior leadership, it announced this week.
Callirius, Cula partner to boost monitoring and financing for biochar projects
A German-based climate finance company and a startup focusing on MRV solutions for durable carbon removal have teamed up to advance biochar projects and verify their climate impact.
Second tranche takes Canadian asset manager’s forest fund to $335 mln
A major Canadian global asset manager announced on Friday the second close of its forest fund, investing in sustainably managed forests where carbon sequestration is prioritised over timber production.
Soil management firms to facilitate carbon credit generation for Texas landowners
Two Texas-based soil management companies are collaborating with the state’s property owners association to engage landowners in nature-based carbon capture initiatives and credit generation.
BIODIVERSITY (FREE TO READ)
INTERVIEW: Carbon standard to pilot nature stewardship credits in 2025
Carbon standard Social Carbon plans to release a methodology for ‘nature stewardship credits’ during the third quarter of this year at the latest, with the first pilots expected to launch in 2025, the company has told Carbon Pulse.
Biodiversity conservation actions found to be effective in two-thirds of cases
Nature conservation actions implemented to date have led to gains in biodiversity or contributed to slowing its decline in two-thirds of cases, according to a study claiming to be the first of its kind.
More than half of world’s plastic pollution linked to 56 companies, study finds
Fifty-six multinationals are responsible for more than half of the world’s branded plastic pollution, with five companies producing nearly a quarter of that, a study has unveiled.
Plastic offsetting project in Indonesia suspended following community complaints -media
A plastic offsetting project backed by a food and drink multinational has been suspended on Verra’s plastic credit registry following complaints by the local community that the recycling facility was built illegally close to their land and without proper consultation, leading to withdrawal of involvement by the multinational.
Soil database would boost agricultural biodiversity credits, says Mirova exec
A soil database for small farmers would help financial institutions scale up the nascent biodiversity credits market, an expert at French investor Mirova has said.
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CONFERENCES
Carbon Forward Turkiye – May 9-10, Izmir: With the imminent launch of the pilot ETS in Q4 2024 and a burgeoning voluntary carbon market in the country, this inaugural event will give attendees an understanding of the significant impact these schemes, as well as the EU’s CBAM, will have on your business. Carbon Forward Turkiye also offers a chance to position and network with peers, policymakers, corporates, trade bodies, and analysts. 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.
Eurelectric “Lights ON” Power Summit – May 22-23, Lagonissi, Greece: This is our biggest event gathering every year around 500 energy experts across Europe. This year, we’ll welcome more than 60 speakers to discuss:
- Getting Europe’s power infrastructure ready for net-zero
- Delivering on the EU 2040 climate targets
- Powering Europe’s industrial competitiveness with affordable energy
- Ensuring security of supply in more hostile energy geopolitics
- Implementing the electricity market reform
- Speeding up digitalisation
- Integrating renewables with biodiversity
Carbon Forward North America – June 11-12, Toronto and Online: 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. We are allocating a limited number of free passes to attendees representing medium- and large-sized companies that buy and retire voluntary carbon credits. If your firm is an end-user of carbon offsets and is not a major energy producer or supplier, contact us to apply for a free pass (1 per company). Otherwise, 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
INTERNATIONAL
Troubling times – An escalation of tensions in the Middle East would push the price of oil in excess of $100 a barrel and reverse the recent downward trend in global inflation, according to the World Bank. The Washington-based institution said the recent decline in commodity prices had been levelling off even before the recent missile strikes by Iran and Israel, making interest rate decisions for central banks more challenging. Adding that its forecast that crude prices would average $84 a barrel this year would prove too optimistic in the event that the crisis worsens. Concerns about a full-scale war in the Middle East have already precipitated a rise in oil prices and dearer fuel costs for drivers, while financial markets have pared back expectations of interest rate cuts this year in response to stickier than expected inflation. (the Guardian)
BHP goes for … copper – The world’s largest mining company BHP has made a non-binding, all-scrip offer to acquire smaller miner Anglo American to secure a swathe of copper assets it sees as central to the energy transition. The offer, rejected by Anglo late Friday, offered exposure not just to a metal seen as a central to the energy transition but also to high-quality Brazilian iron ore, and Anglo’s portfolio of both metallurgical and thermal coal. BHP has kept its higher quality ‘met coal’ assets given its use in steel creation, but spun off the latter thermal assets, citing climate concerns. Any similar spin off now would likely open the mining giant to criticism of passing the buck. “Cumulative primary copper demand over the next 30 years to be double the amount consumed in the previous 30,” BHP’s report on mining and the energy transition of September, said.
Jera expands into New Delhi – Japan’s Jera said this week it had started up full operations of its Indian subsidiary, based in New Delhi. The Japanese trading house has been working with and investing in Indian renewable company ReNew, with the two working on a green ammonia plant, with the commodity to be sent to Japan and burned in place of more polluting fuels such as coal. “JERA Energy India has been established to widen business opportunities in the Indian market, which is expected to continue to grow in the future,” it said.
EMEA
Unhappy Germany NGOs – Germany’s Parliament has approved a controversial reform of the country’s key legislation for reaching climate targets, outraging many NGOs who say the changes will delay emission cuts and are as a result “unconstitutional”. The law weakens the responsibility of individual ministries for emission cuts in their sectors, by focusing exclusively on the country’s overall ambitions to cut GHG emissions. (Clean Energy Wire)
Green power boost – Renewable energy accounted for about 56% of electricity consumption in Germany in the first three months of the year, according to preliminary calculations by the Centre for Solar Energy and Hydrogen Research Baden-Wurttemberg and utility association BDEW. “In total, renewable energy plants generated around 75.9 billion kWh of electricity from January to March, around 9% more than in the same period last year,” BDEW said. Onshore wind energy plants alone produced 39.4 billion kWh of electricity, covering more than a quarter of demand. Germany is aiming for a renewable electricity share of 80% by 2030. (Clean Energy Wire)
Allez les small nukes – The European Commission has approved a €300 million French measure to support French state-owned utility EDF’s subsidiary Nuward in researching and developing small modular nuclear reactors (SMRs). The project aims to develop processes for the design and construction of SMRs based on a simple and modular design and with a power output equivalent to or less than 300 MWe. The front-end design is the third phase of the overall Nuward project, which contains five distinct phases. The Commission already approved a €50 mln French measure to support the second phase of the project.
Saving UK Steel – Indian steel giant Tata has said it will proceed with a £1.25 bln plan to replace its ageing UK blast furnaces with state-of-the-art electric arc furnaces. The company said that this represents the largest investment in the UK steel industry for decades, adding that it should directly preserve 5,000 jobs as well as thousands more in the supply chain, and should ultimately reduce UK CO2 emissions by 5 mln tonnes each year. The transition plan remains controversial in some quarters due to the fact that it will result in the UK no longer being a major producer of primary steel.
We have concerns – The UK’s National Grid has criticised the EU’s upcoming CBAM, describing it as self-defeating. According to Rebecca Sedler, MD for interconnectors at National Grid, the CBAM could negatively impact the UK and EU by reducing electricity exports from Great Britain, increasing wind power curtailment, and diminishing benefits for consumers. Sedler highlighted that the CBAM might lead to an increase in CO2 emissions, thus posing a significant risk to both regions’ net zero targets. Furthermore, the mechanism could discourage the development of crucial energy infrastructure like interconnectors and offshore hybrid assets in the North Sea. There are calls from within the industry to exempt electricity trading from the CBAM or to exclude the UK entirely, though it is unclear if National Grid will seek specific concessions. The CBAM is set to be implemented in 2026 to prevent companies from relocating high-emission operations to less regulated countries. Concerns about the inclusion of electricity in the CBAM have also been raised, as it could deter investment in renewable energy and suppress power trading through the UK’s extensive network of interconnectors. (Montel)
UK shoots for SAF – The UK government aims to ensure that 10% of all jet fuel in flights taking off from the UK come from sustainable sources by 2030, it confirmed this week. The Sustainable Aviation Fuel (SAF) mandate, which is subject to parliamentary approval, would come into force from 2025 as one of the first of its kind, the government said. The target, which it called ambitious but achievable, will see around 1.2 Mt of SAF supplied to the UK airline industry every year. The SAF industry is estimated to add £1.8 bln to the UK economy. The government also recently announced that it had allocated £135 mln through the Advanced Fuels Fund, supporting 13 SAF projects in the country. These initiatives are aimed to ensure that another approach to decarbonisation — the rationing of flights through ‘demand management’ — is ruled out, it said.
Danish wind ambitions – Denmark has launched its largest tendering process for offshore wind yet, with the procurement procedure set to establish at least 6 GW of offshore wind power to be completed by 2030. The procurement procedure is divided into six sites in the areas of North Sea I, the Kattegat, Kriegers Flak II, and Hesselo. Tenderers will also have the possibility to erect more turbines than initially granted, with opportunity to establish up to 10 GW or more, equating to the energy consumption of more than 10 mln Danish and European households. Denmark today has a total installed capacity of 2.7 GW offshore wind power, and the Thor Offshore Wind Farm currently under construction in the North Sea will supply a further 1 GW when completed in 2027.
ASIA PACIFIC
Almost ready – Japan and the EU will agree as early as May to create common rules on government subsidies and procurement targeting electric vehicles and renewable energy equipment, according to Nikkei Asia. The two sides aim to build a supply chain based on several common principles including sustainability, transparency, and reliability, the report said, citing a draft ministerial agreement. Meanwhile, Sumitomo, one of the major trading houses in Japan, is planning to spend 200 billion yen ($1.28 bln) to install batteries across the country, in order to facilitate an electricity network for renewable energy, Nikkei reported.
Rice projects – Japanese agricultural machinery manufacturer Yanmar has teamed up with offset developer Faeger to help popularise rice-focused projects, which can generate carbon credits under the domestic J-Credit scheme, it announced Friday. Yanmar said it will support farmers across the country to implement low-carbon practices through the partnership, though without elaborating on specific targets. Faeger, aiming to promote a methodology featuring the extension of the mid-drying period in rice cultivation, has secured around 6,000 J-Credits in fiscal 2023.
Banking on strategy – The National Bank for Agriculture and Rural Development (NABARD) in India has this week released its Climate Strategy 2030, which aims to address India’s escalating need for green financing. Under the strategy, bank intends to accelerate green lending across sectors, play a broader market-making role, achieve internal green transformation of NABARD, and mobilise resources strategically. Despite the pressing demand, where India requires around $170 bln annually to reach a cumulative total of over $2.5 trillion by 2030, current green finance inflows are critically insufficient, the bank said in a press statement.
Cooperation needed – India’s power secretary has advocated for enhanced international cooperation on carbon capture, utilisation, and storage and green hydrogen at the World Energy Congress in the Netherlands. He spoke about the complexity of managing energy transitions, stressing inclusive approaches and the role of technology deployment and cooperation, adding that the country’s carbon markets will further advance sustainability efforts. The secretary also told the conference that developing countries require support in accessing financing and clean technologies, to help them navigate the energy trilemma effectively. (Press Information Bureau)
AMERICAS
Not for long – Canadian low-carbon exports – defined as clean fuels, mined clean energy materials, clean electricity and power equipment, clean industry, and clean transport – see nearly twice the growth rate of all other exports combined, according to a report published Thursday by think tank Canadian Climate Institute. At an aggregate level, these low-carbon exports have grown by an annual average of 9.4% over the past ten years, starting at C$15.8 billion in 2013, and growing to C$38.7 billion in 2023. This is relative to the average growth rate of all exports in Canada that see an average of 5% per year, the report added. However, separately, TD Bank estimated in Mar. 2024 that Canada’s oil and gas exports will grow given the start-up of the Trans Mountain Pipeline and the restart of the Terra Nova oil field, which could put Canada in the running to be the largest source of global oil supply growth, the financial firm said.
Not EPA – Four Republican-led states are suing to block Interior Department methane regulations targeted at fossil fuel drilling on public lands, in a complaint filed Wednesday in the US District Court for the District of North Dakota, E&E News reported Friday. The states of North Dakota, Wyoming, Montana, and Texas argued that the department attempts to play the role of the EPA and inappropriately asserts “federal regulatory authority over oil and gas that is owned by the States and private parties”. A federal judge blocked an Obama-era version of the rule in 2020.
Land back – California has awarded over $100 million to 33 tribal land projects, returning over 38,000 acres of ancestral land (15,400 ha) to Indigenous stewardship, Governor Gavin Newsom (D) announced on Friday. In California, the Yurok Tribe is the project proponent of multiple offset projects on their ancestral lands and has generated more than 1 mln ARB-eligible credits since 2012, according to ARB’s most recent offset issuance data.
EPA scrutiny – A panel of the US Court of Appeals for the District of Columbia Circuit judges heard from the Coalition for Renewable Natural Gas (RNG Coalition) on Thursday to understand the differences between how the US Environmental Protection Agency (EPA) applies the Renewable Fuel Standard (RFS) to renewable natural gas and other biofuels, Agri Pulse reported Friday. The RNG Coalition is challenging provisions in the RFS rule claiming it imposes gruelling burdens on biogas producers. It’s also contending that the RFS does not grant the EPA the authority to regulate feedstock producers who are not directly involved in the RIN generation process. Questions from the judges included whether the agency could transfer data collection requirements to renewable fuel producers, and inquiries about the extent to which the EPA could regulate biogas producers.
Out with the old… – Richard Newell, who’s leaving his job as the head of Resources for the Future, is joining an AI company, E&E News reports. The environmental think tank’s outgoing CEO will join the software company C3 AI as CTO for sustainability, Newell said this week in a farewell email to his co-workers. Newell said the new job will involve helping “private and public enterprises digitally transform to reduce greenhouse gas emissions, conserve energy and water, and create sustainable supply chains.” Newell has led RFF since 2016. He previously served in Democratic and Republican administrations, including leading the federal Energy Information Administration during the Obama administration.
… In with the new – The Natural Resources Defense Council has hired a new leader for its climate adaptation work, the green group announced Friday. Adelle Thomas is set to start Monday as adaptation leader for NRDC’s environmental health sector, the organisation said. Thomas joins the group from the science and policy institute Climate Analytics, where she was a senior scientist researching climate adaptation and resilience. Thomas has served as a scientific adviser in UN climate negotiations and she was a lead author of several IPCC, E&E News reports.
VOLUNTARY
Brazilian premium – Governor Helder Barbalho of Brazil’s Para said this week that his state, which is preparing for its first issuance of jurisdictional carbon credits this summer, intends to sell them for $15/credit, reported Folha de Sao Paolo. This is higher than the $10/credit price received by Costa Rica in its agreement with buyers’ group the LEAF Coalition. Barbalho claimed this is because his state has a higher degree of judicial integrity than its Central American counterpart. 40% of the revenue raised from the sale of credits will go towards environmental policies, while the rest will be divided among Indigenous communities, quilombolas, and rural producers. The national outlet also reported that Acre – which announced an agreement with the LEAF Coalition at COP28 – aims to sign that final agreement in the first half of this year and expects to generate between 30-50 mln credits by 2027. The Acre agreement covers deforestation rates from 2018-2022, while Para’s will base period will be 2017-2021, the outlet added.
INVESTMENT
Returns, then reductions – Global private equity firm KKR looks to make significant financial returns on the energy transition, but sees specific targeting of emissions reductions as counterproductive, Emmanuel Lagarrigue, co-head of global climate at KKR told Semafor. Lagarrigue noted that emissions reductions as a metric for the firm’s success, alongside financial returns, is a risk on two levels – one, being that a highest-possible emissions impact portfolio would lead to an unbalanced and potentially unprofitable portfolio, and the second, being that the firm looks to prove there is no trade off between returns and decarbonisation. KKR looks to strike deals every 3-6 months between $750 mln – 1 mln, with a focus on OECD countries.
AND FINALLY…
Power in your pocket – Australian researchers have developed a carbon-negative power generator that uses CO2 to produce electricity. The proof-of-concept device could mean people can charge their mobile phones through absorbing CO2, they added. This small, laboratory-scale device could lead to a new method of industrial-scale carbon capture, they said. The device functions by coating flakes of boron nitride with a polymer and embedding them in a hydrogel, which, when exposed to CO2, generates electricity through the movement of ions. “At present we can harvest around 1% of the total energy carried intrinsically by carbon dioxide but like other technologies, we will now work on improving efficiency and reducing cost,” said Zhuyuan Wang, a postdoctoral researcher and lead author of the paper in a press release. This innovation not only captures CO2 but also converts it into electrical energy, the researchers added, potentially offering a dual benefit for small-scale electronic power and integration into larger carbon capture facilities. (Anthropocene)
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