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TOP STORY
FEATURE: Article 6 additionality for renewables should be determined case-by-case, say market rule-makers
Article 6 negotiators and voluntary carbon market (VCM) standards could justifiably exclude some renewable energy projects out of hand due to additionality hazards, but others require careful case-by-case consideration, say watchdogs and stakeholders who spoke to Carbon Pulse.
VOLUNTARY
War of words erupts as Verra pledges to prevent Kariba REDD project developer from making “clean getaway”
A public spat has flared up over the Kariba REDD+ project in Zimbabwe, with standards body Verra warning that it will not let the developer, a “self-professed bad actor, … to make a clean getaway, leaving others holding the bag”.
Verra extends suspension of Rimba Raya voluntary carbon project from its registry
Verra has extended the suspension of Rimba Raya’s registry account amid continuing uncertainty about the future of the voluntary carbon REDD project in Indonesia, it told Carbon Pulse Thursday.
Buy voluntary carbon credits now because debate over their value in future is over, says bank
Buy voluntary carbon credits today because the debate over whether they could be valuable has ended, according to a large investment bank.
Voluntary carbon markets shrank in 2023 for second consecutive year -research
Voluntary carbon market volume and value globally declined in 2023 for the second year in a row from its 2021 peak, as intense media scrutiny held back buyers, according to research released on Thursday.
EMEA
‘Europe badly needs an industrial policy’, says Polish climate minister
The European Union must beef up support for its domestic clean tech industry otherwise it will be wiped out by heavily-subsidised Chinese and US competitors, warned Poland’s climate minister.
EU energy ministers lay the way forward for the Green Deal
Energy ministers from the EU’s 27 countries believe that work has just begun on making the Green Deal a reality, with the next five years crucial to the implementation of climate and environmental policies across the bloc.
Weak pricing continues to impact EU ETS efficacy, finds report
Weak carbon pricing in the EU Emissions Trading Scheme (ETS) is continuing to limit the incentive for polluters to decarbonise, according to a new report published Thursday.
EU ETS prices closely related to policy credibility, study finds
Policy credibility is crucial for carbon prices in the EU Emissions Trading System to be high enough to efficiently incentivise emission reductions in the long term, according to a study published in Nature Energy.
INTERVIEW: European biomethane removals poised to scale but need coordinated regulation
Biomethane with carbon capture, a kind of carbon removal, is poised to scale in Europe and will benefit from pro-CCS policies, but overlapping regulations at the EU and national level must coordinate to make these opportunities accessible, a German advisory firm told Carbon Pulse.
Saudi Arabia to finance Kenya clean cooking plan in return for carbon credits -media
Saudi Arabia will fund Kenya’s planned switch to cooking with liquefied petroleum gas (LPG) stoves instead of those burning firewood, charcoal, and kerosene in return for carbon credits, according to local media sources.
Euro Markets: Late gas spike drives EUAs to 2.2% gain
European carbon prices struggled for direction for much of Thursday, moving in a thin range and closely tracking gas, as the market continued to digest weekly investor data published Wednesday, before a late spike on the TTF June saw EUAs jump to a 2.2% gain.
AMERICAS
WCI Q2 auction clears well below secondary market, trader expectations
The delayed Q2 California-Quebec current vintage carbon auction settled at a discount to secondary market prices and well below trader expectations.
WCI Markets: Traders temper expectations for California ETS workshop, WCA activity up a notch
California Carbon Allowance (CCA) prices gradually edged higher through a busy week of both Q2 WCI auction results and a cap-and-trade workshop, while Washington Carbon Allowance (WCA) prices also increased with a pick up in weekly transacted volumes.
ASIA PACIFIC
NZ Market: Speculators drive NZU price rally as limited climate spending announced in budget
The spot NZU price has climbed nearly 7% in recent days as the coalition government announced little in new funding on climate initiatives in its latest budget Thursday, focusing instead on funding tax breaks and public service spending.
China releases plan to cut CO2 from energy sector
China has released an energy conservation and carbon reduction action plan it says will cut CO2 emissions from energy consumption over the next year by 130 million tonnes.
Asian CCUS makes strides, will need continued govt support, report finds
Last year saw rapid progress for CCS and CCUS projects across the Asia Pacific, with the ability to start dealing with CO2 imports making strides in key regions like Australia, Indonesia, and Malaysia, consultants said Thursday.
Japan, ADB to expand range of JCM cooperation
Japan and the Asian Development Bank have agreed to expand cooperation on funding Joint Crediting Mechanism (JCM) initiatives beyond just energy-related projects, in a bid to accelerate financing under the programme and ramp up carbon credit generation.
Australia Market Roundup: Govt releases draft net zero transport and infrastructure roadmap
The federal government has released a draft roadmap for car-dependent Australia on how it will reduce emissions in the transport and transport infrastructure sector for consultation, as part of its six sectoral plans to reduce emissions.
Singapore carbon exchange appoints interim CEO
Singapore-based Climate Impact X on Thursday announced it has appointed an interim CEO, after predecessor Mikkel Larsen announced his resignation in March.
INTERNATIONAL
Net zero transition cheaper for consumers than status quo, IEA report finds
While clean technologies like electric vehicles and heat pumps may require higher upfront funding than fossil fuels, their low running costs make them a cheaper option for consumers in the long term, making the green transition fairer than the status quo, the International Energy Agency (IEA) said in a new report.
Countries over-reliant on carbon removals in national climate plans, finds report
Large economies are relying heavily on carbon removals in their national climate plans to avoid making deep and immediate emissions cuts, which risks prolonging fossil fuel use and jeopardising Paris Agreement goals, according to a report published Thursday.
No new fossil projects needed to satisfy energy demand from now to 2050, researchers say
Existing fossil fuel projects are enough to meet global energy demands in a global transition to net zero, researchers at UCL and the International Institute for Sustainable Development (IISD) have found.
Limited emissions mitigation in emerging economies from climate-oriented trade policies -paper
Carbon border adjustment mechanisms (CBAMs) offer little in the way of reducing emissions in developing countries, and even alongside carbon taxes won’t be enough for those countries to reach net zero, according to a working paper published earlier this month.
BIODIVERSITY (FREE TO READ)
Deadlock over funding frustrates last CBD biodiversity talks before COP16
The latest Convention on Biological Diversity (CBD) negotiations in Nairobi, Kenya wrapped up on Wednesday with limited progress on key topics on the agenda, as much work remains to be done at this year’s UN biodiversity summit.
Malaysian developer launches plastic waste collection, recycling methodology
A Kuala Lumpur-based carbon offset developer has launched a plastic waste collection and recycling methodology in a bid to establish itself in the emerging plastic credit market.
Biodiversity footprint provider expects to double clients again
French data company Iceberg Data Lab expects to double the number of clients using its products, including the Corporate Biodiversity Footprints (CBF), for a second time over the next year.
CDC Biodiversite flags complexity of brokers trading biodiversity credits
Trading biodiversity credits through agents, rather than directly from project developers, would create more obstacles for the market to overcome, data provider CDC Biodiversite has said.
Canadian risk experts call for climate frameworks to address nature
A Canadian group of risk experts have called on the country’s government, regulators, and business leaders to ensure their climate risk frameworks include nature-related issues.
Tech firms mull funding biodiversity credit methodologies
An environmental impact platform and a payments network have closed their call for proposals set to identify innovative finance projects, saying they seek to fund initiatives in the emerging biodiversity credit market.
Swedish biodiversity credit developer revamps methodology, launches five more pilot projects
Swedish company Qarlbo Biodiversity has revamped the methodology that saw a local bank last year pick up Europe’s first voluntary biodiversity credits and on Thursday announced five new pilot projects along with plans to invest in projects globally.
Biodiversity Pulse: Thursday May 30, 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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BIOCHAR REPORT
Supercritical’s latest report reveals a 30x surge in biochar supply over the next four years, however 88% of this growth comes from low-quality credits. “Boom or Bust? 2024 Biochar Market Outlook” delves into the pressing challenges buyers face, offering exclusive data and trends from Supercritical’s own marketplace which covers 80% of the market. Discover why high-quality biochar commands premium prices and how savvy buyers secure long-term agreements amidst the scarcity. This essential report equips you with the insights needed to navigate the evolving biochar landscape and make informed decisions in this burgeoning market. Download the report
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WEBINAR
Surprises from analyzing over 500+ carbon projects – June 12th, 9AM BST: Join carbon market experts from Morgan Stanley, BCG, and Calyx Global as they discuss insights gained from evaluating carbon credit quality. The speakers will review the surprising project types with higher GHG integrity, due diligence best practices, and how to consider beyond carbon impacts. Learn what key factors play a critical role in assessing GHG integrity – helping you make more informed decisions. Register for the webinar here. You will receive an on-demand recording after the webinar if you register but cannot attend live.
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CONFERENCES
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. To express an interest in speaking or sponsoring, please email michelle@carbon-forward.com
FREE PASSES: We have allocated a limited number of free passes for Carbon Forward North America to attendees representing medium and large companies that currently buy and retire voluntary carbon credits or are looking to do so in the future. If your organisation is an end user of carbon offsets or wants to learn more about offsetting, and is not from the energy or financial sectors, contact us to apply for a free pass. Maximum one per company.
Carbon Forward Expo – October 8-10, London and Online: Save the date! More info coming soon…
Argentina Carbon Forum – June 4-5, Buenos Aires: The Argentina Carbon Forum, a key initiative to strengthen carbon markets in the country, seeks to mobilise local actors and promote intensive climate action. This event opens doors for public-private sector organisations to leverage economic and environmental benefits by financing projects that mitigate climate change. It also offers business visibility, networking and access to valuable information, discussing issues such as markets and negotiations, implementation of emissions trading systems, and decarbonisation strategies. The Argentina Carbon Forum fosters collaboration and the development of innovative solutions for a sustainable future. Register here
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BITE-SIZED UPDATES FROM AROUND THE WORLD
EMEA
It’s official! – The Council of the EU member states today adopted a historic decision to withdraw from the Energy Charter Treaty (ECT), an international agreement from the 1990s that allows the fossil fuel industry to sue governments over their climate and energy policies. Observers have been accusing the pact of contradicting the goals of the Paris Agreement. Remaining members include COP29 host Azerbaijan, Norway, Switzerland, Japan, Kazakhstan, Turkiye, Jordan, and Afghanistan. In the EU, the national governments of Lithuania, Latvia, Romania, and Czechia are considering leaving. Others are looking to modernise the pact from within: read our feature and fact file on the entire saga.
A helping hand – Turk Eximbank has secured a €1 bln commercial loan, guaranteed by the World Bank, to help Turkish exporters adapt to the EU’s carbon border adjustment mechanism (CBAM). The 10-year loan is provided by Deutsche Bank, Standard Chartered, BNP Paris, and ING. The International Bank of Reconstruction and Development (IBRD) is providing a €600 mln first loss guarantee to the lenders, Turk Eximbank said in a statement. (gtreview)
ASIA PACIFIC
Japan funds LNG – Woodside Energy has secured a $1 bln loan from the Japan Bank for International Cooperation for its Scarborough gas field development that will send an additional 5 mln tonnes of LNG to the world market from 2026. Japanese companies own a significant chunk of the project and have offtake deals for the commodity. “The agreement follows a memorandum of understanding signed by Woodside and JBIC in November 2022 aimed at securing a stable supply of energy for Japan and to assist in achieving its decarbonisation goals,” Woodside said. Japan sees a continued supply of LNG as central to its energy needs even as it decarbonises.
Taiwan tie-up – The Taiwan Carbon Solution Exchange Corporation (TCX) and voluntary carbon standards body and registry Verra have signed an MoU to promote the development, issuance, and use of high-quality carbon credits toward credible corporate climate strategies and national climate objectives. The signing took place at the Voluntary Carbon Markets: Integrity and Sustainability Conference in Taipei. Both TCX and Verra said they believe the MoU will lead to an acceleration of climate action. Under the agreement, TCX and Verra will establish a cooperation mechanism between the two parties to develop local capacity in TCX in relation to Verra programmes, promote communication channels, and expand ongoing relationships.
Bit of a stretch? – Michelin, the world’s largest tire manufacturer, has been actively involved in the PT Royal Lestari Utama (RLU) project in Indonesia, aiming to demonstrate sustainable rubber production and environmental responsibility. In 2014, Michelin acquired a 49% stake in RLU, a joint venture with the Indonesian company Barito Pacific, aiming to source 10% of its rubber sustainably. The company has since increased its stake to 100%, becoming the sole owner in 2022. Michelin’s sustainability initiatives with RLU include the planting of over 13 mln rubber trees and the preservation of significant forest areas, which purportedly save thousands of hectares of primary forest and absorb substantial amounts of carbon emissions. Moreover, Michelin claims to have created thousands of jobs and improved local livelihoods by integrating small rubber farmers into its supply chain and investing in community infrastructure. However, the project has faced criticism and allegations of greenwashing, particularly concerning deforestation and ecological damage prior to its sustainability commitments, according to Mongabay. Critics point out that substantial forest areas were cleared before Michelin’s no-deforestation pledge and that some ongoing activities contradict the sustainability claims. For example, despite conservation efforts, rubber production continues on parts of the conserved land, and natural forest regeneration lags behind ongoing deforestation. Controversies also surround the effectiveness of partnerships and compliance with sustainability standards, with setbacks including a failed collaboration with WWF and challenges in engaging local communities respectfully. What’s more, critics argue that despite Michelin’s commitments, the actual environmental impact and the fulfilment of its conservation promises remain questionable. The investigation was conducted and supported by a number of organisations including Mongabay, the Global Initiative Against Transnational Organized Crime, IJ4EU, the Environmental Reporting Collective, Journalismfund.eu, and Mediabridge.
New bid – Canadian asset management giant Brookfield has lobbed a A$10 bln ($6.6 bln) bid for French renewable player Neon – Australia’s biggest renewable energy developer, Renew Economy reports. It follows Brookfield’s failed bid to acquire Origin Energy earlier this year, as it sought to gain a foothold in the Australian energy market. Brookfield said it has reached an agreement with Neoen parent company Impala and TagEnergy, and other shareholders to secure a 53.32% in Neoen. An offer will be made to other shareholders, pitched at a 27% premium over Neoen’s last closing price. Neoen has a six-10-year pipeline of renewable energy projects in Australia of around 10 GW.
AMERICAS
Not axing this tax – Alberta Premier Danielle Smith supports industrial carbon pricing, and has no plans to cancel the provincial programme, reported the Globe and Mail. Industrial emitters in the province fall under its Technology Innovation and Emissions Reduction (TIER) programme and market, which sees participants uphold compliance obligations as per benchmarks established by the provincial government. Revenues from TIER, forecasted at C$851 mln from 2023-24, was allocated to fund initiatives such as CCUS, debt reduction, and marketing of Canadian energy worldwide. Smith told the Globe and Mail that although the province had a net zero by 2050 goal, there was no intention of setting interim targets.
Increasing investment – Vancouver-based project developer Ostrom Climate Solutions reported a quarterly net loss of nearly $1.1 mln, widening from a net loss of $490,000 in the same period last year, according to its financial results for Q1 2024 published Thursday. The company is increasing activities in climate-smart agriculture in the Philippines, and attributes its losses to development costs related to this project, as well as increased operational expenses and a lower gross margin. Ostrom also reported revenues of nearly $927,000 this quarter, an increase of 76.3% from the same period last year, driven by sales in VER units.
Hear me out – The Brazilian government is looking to leverage its discussion with the UK regarding the development of the carbon border adjustment mechanism (CBAM) to reduce the EU’s resistance to more favourable conditions for Brazilian exporters. CBAM applies a price to carbon emitted in the production of imported goods, but divergences exist between how to measure and price the emissions. The “anti-pollution” charge will come into full force in 2026, leaving the possibility of reviewing the scope of the mechanism until then. Brazil seeks to use this opportunity to ensure that its demands on the methodology to measure emissions are met by Europeans. Brazilian industry groups have provided input in the development of the country’s official position on the topic, to be then transmitted to the UK through a public consultation period open until June. (UOL)
VOLUNTARY
Digital Gold – Gold Standard, with the support of the Swedish Energy Agency, has released a new digital ‘SDG Impact Tool’ enabling project developers to report the sustainable development impact of their projects as required under Gold Standard for the Global Goals. The tool allows for the independent verification and certification of these impacts, streamlining a major part of the Gold Standard certification. The tool was built by Thinking Machines Data Science, a technology consultancy solving high-impact problems with AI and data. In addition, a new public ‘SDG Impact Dashboard’, available on the Gold Standard Website, showcases climate and SDG impact data from Gold Standard projects, across time, location, technology type, and more. The two new tools are part of Gold Standard’s plan to fully digitalise its standard and certification process.
BeZero rates BECCS – Ratings agency BeZero Carbon has developed the industry’s first rating to assess the quality of bioenergy with carbon capture and storage (BECCS) projects, with credits generated by one such project in North America having received a rating of BBB by the rating agency. The project is the first ethanol production plant to ever generate carbon removal credits in the VCM and the BBB rating achieved represents a moderate likelihood of delivering on its climate claims of removing a tonne of CO2 from the atmosphere. To date, only 18% of BeZero-rated projects are rated a BBB or higher. The BECCS sector is forecast to drive removal of up to 5 bln tonnes of CO2 from the atmosphere against 2050 climate targets. As of May 2023, total cumulative global removal by this sector has reached about 260,000 tonnes of CO₂e. By 2030, annual demand for durable engineered carbon removal could reach between 40 and 200 mln tonnes of CO₂e, according to estimates.
Work in progress – The Science Based Targets initiative (SBTi) has drafted a response to the Bloomberg article ‘Inside the SBTi Scope 3 Scandal’ published on May 24, confirming that its revision of the Corporate Net-Zero Standard continues to undergo the thorough process of SBTi’s Standard Operating Procedure for the Development of Standards and that no standards have been changed or will be changed until that process is complete. “After public consultation, the Technical Council will receive the draft standard for review and approval, and it will then go to the Board of Trustees for consideration and adoption”, it clarified. A key part of the workplan to revise the Standard is to address challenges with Scope 3 target setting and implementation, including “potential roles of Environmental Attribute Certificates (EACs) under the right guardrails”, with the SBTi to publish a discussion paper in July 2024 setting out the preliminary view on the evolution of the SBTi’s conceptual framework for Scope 3 target setting. The SBTi is currently assessing evidence and producing a results report on emission reduction credits, which is to be published in the middle of the year, together with an independent systematic review of scientific literature, it said. The drafted revised Corporate Net-Zero Standard will be subject to public consultation expected to occur by end-2024, it said.
A new leaf – Carbon insurance company Oka has welcomed David Antonioli to its advisory board, following his 15-year tenure as CEO of Verra and prior to that, a stint at EcoSecurities and as Global Climate Change Advisor to the US Agency for International Development. As the first adviser to join Oka’s advisory board, David will support Oka in developing its policy coverage to meet new regulatory and risk requirements. “Oka addresses one of the key missing pieces in the voluntary carbon market,” said Antonioli. “Its dedicated insurance solutions mitigate some critical risks facing the market and have the potential to mobilize investment and innovation, accelerating progress towards net zero.”
Fundamental flaws – Some of the world’s richest and most polluting companies, including Delta, Gucci, Volkswagen, ExxonMobil, and Nestle have invested in carbon offset projects that have fundamental failings and are “probably junk”, according to a classification system developed by nonprofit, corporate watchdog Corporate Accountability. For 33 of the top 50 corporate buyers, more than a third of their entire offsets portfolio is “likely junk” – suggesting at least some claims about carbon neutrality and emission reductions have been exaggerated, the analysis finds, with fundamental failings related to a lack of additionality and risk of emissions being shifted elsewhere. At least 43% of the 81 mln credits purchased by the oil and gas majors are for projects that have at least one fundamental flaw and are “probably junk”, while just over 42% of the total credits (55 mln) purchased by airlines and 38% purchased by automakers (21 mln) for the top 50 projects are likely worthless at reducing emissions, it finds. (the Guardian)
Deep Sky and DAC – Montreal-headquartered CDR project developer Deep Sky and US-based modular DAC firm Sustaera announced Thursday that they have signed a MoU to explore the nascent technology in Canada. As part of the agreement, both parties agreed to explore deployment of a Sustaera unit at one of Deep Sky’s future commercial facilities that they said will have a total capability of removing approximately 1,000 to 5,000 tCO2/yr. Additionally, they agreed to share data for technology evaluation.
Fashion forward – British fashion retailer New Look has partnered with seaweed-specialising firm Carbon Kapture for the former to invest in cultivation and carbon sequestration projects, reported Business Green. Carbon Kapture’s ‘Hope on a Rope’ initiative will enable New Look and its employees to directly sponsor seaweed cultivation projects on a per metre basis, the pair said. The seaweed also produces biochar which is then donated to local farmers to enhance soil quality and promote sustainable agricultural practices, they added. Carbon Kapture said the investment could deliver visible results in one year, according to the outlet.
AND FINALLY…
The burning capital – India’s capital New Delhi has recorded 52.3C this week, breaking all the previous records, the Times of India reported. Extreme weather conditions in the northern and western parts of the South Asian country have caused students to faint in schools and drinking water taps to dry up, writes Carbon Brief. According to India’s weather bureau, temperatures have been 9C higher than expected, with the government issuing red alerts in several districts in the country and an advisory to the residents to stay indoors to avoid heatstroke and other illnesses. India is one of the most vulnerable countries to the adverse impact of climate change. Given the unusually large variation in temperature recorded, some scientists have confirmed that the recording of 52.3C is being viewed as an anomaly and is being investigated, however, this should not distract from the city’s dangerously high near-50C temperatures, the media outlet added.
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