Newsletters > CP Daily: Monday June 3, 2024

CP Daily: Monday June 3, 2024

Published 04:53 on June 4, 2024  /  Last updated at 04:53 on June 4, 2024  / /  Newsletters

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

Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here

TOP STORY

‘We will work our ass off’ to close Article 6 deal, EU Commission says

The European Commission is stepping up efforts to close a deal on international carbon credits, but a successful outcome needs to be based on a clear understanding that emissions reductions or removals – rather than climate finance – are the top priority, a senior EU official has said.

EMEA

EU’s CBAM may hurt bloc’s manufacturers more than int’l ones -NGO

The EU’s Carbon Border Adjustment Mechanism (CBAM) might hurt industrial manufacturers based in Europe more than those in third countries due to loopholes and its limited scope, according to a report published by a Brussels-based climate NGO.

Von der Leyen presidency sees fossil fuels squeezed out of EU power mix -analysts

Since 2019, when the current Ursula von der Leyen-led European Commission took office, coal and gas has been rapidly pushed out of the EU power mix, with policies enacted by her presidency likely to keep driving this trend, according to analysis released Monday.

Euro Markets: EUAs climb 5% to test recent highs before giving up gains as market tracks volatile gas

European carbon prices jumped steeply on Monday morning and approached a five-month high, before giving up virtually all their gains in the afternoon, as natural gas markets were roiled by an unscheduled outage in the North Sea, while UK Allowances also climbed to their most in nearly eight months before they too fell back.

UBS AM launches EU carbon ETC

UBS Asset Management has launched an exchange-traded commodity (ETC) that gives investors exposure to the EU carbon market.

AMERICAS

FEATURE: Major carbon removal project in US Gulf Coast faces substantial storage challenges

Hundreds of millions of dollars in federal funding currently back a direct air capture (DAC) project in the US Gulf Coast, but the developers have yet to reach a final decision on storage of captured CO2, while academics and community members heed caution towards industry scale-up in the region.

Price containment mechanisms buffer WCI ETS from technological uncertainties, limited impact from facility caps -think tank

Dynamic allowance supply from price containment mechanisms could provide flexibility and reduce uncertainties through varying technological outcomes in California, while facility-specific caps could ensure emissions reductions in disadvantaged communities with minimal impact on the market, according to a think tank report.

Analysts revise down near-term CCA forecasts amid workshop disappointment, predict low auction clear in Washington

Analysts lowered their California Carbon Allowance (CCA) price estimates in light of workshop letdowns, but nevertheless foresaw an uptick in values following clarity regarding programme adjustments, and also projected a low auction clear in Washington’s carbon market.

RGGI Market: RGAs retreat from record highs on low volumes ahead of Q2 auction

RGGI allowances (RGAs) reached an all-time high last Wednesday before tailing off at the end of the week, as market participants largely look to the upcoming second auction of the year despite expressing varying degrees of confidence in recent historic prices.

ASIA PACIFIC

ID Market: Ministry officials blame lack of awareness for carbon exchange’s low activity

Indonesian Ministry of Finance officials have attributed the limited activity on the country’s national carbon exchange to a lack of awareness, as its staff continue to hold seminars and information sessions to get the word out.

Shanghai sells all allowances on offer at CO2 auction

The Shanghai municipal government on Friday sold all 1 million CO2 permits that were on offer, with the sale clearing in line with the secondary market, well above the auction’s price floor.

VOLUNTARY

VCM Report: Voluntary carbon trade dries up at end of May as market waits for CCPs to brighten June

Thin liquidity continued to stalk the market last week, although a number of high-priced trades, and expectations that the Integrity Council for the Voluntary Carbon Market (ICVCM) could soon approve the first methodologies for the CCPs quality label, kept optimism upbeat.

INTERVIEW: Crucial for compliance schemes to be tech agnostic when integrating carbon removals

A startup accelerator has stressed the need for a tech-agnostic approach when integrating carbon removals into the UK and EU compliance schemes, pointing to the early-stage nature of the market and fact that some methods are still in development.

INTERVIEW: Paraguay a promising hotspot for LATAM carbon markets, says developer

Asuncion has reassured voluntary market (VCM) stakeholders with its low risk profile, favourability to carbon markets, and facilitating frameworks, enticing project proponents despite the country’s small size, an international developer told Carbon Pulse in Buenos Aires on Monday.

Paris airports group looking for voluntary carbon credits to offset emissions

The operating entity of three Paris airports closes a tender Monday for the provision of voluntary carbon credits from France-based projects to offset some of the group’s annual emissions.

Voluntary carbon registry launches first ocean alkalinity protocol

A voluntary carbon registry has published what it describes as the world’s first ocean alkalinity protocol, with buyers already signed up to purchase the first batch of credits.

LSEG, Japanese financial sign VCM collaboration agreement

A Japanese financial institution has signed an agreement with the London Stock Exchange Group (LSEG) to collaborate on growing carbon markets, they announced in a joint statement Monday.

SHIPPING

Demand uncertainty threatens European shipping e-fuel projects -NGO

Two-thirds of European green shipping fuel projects are at risk due to lack of certainty from investors, according to a new report.

BIODIVERSITY (FREE TO READ)

Developers team up to scale nature-based solutions in Latin America, eye biodiversity credits

French and Peru-based developers of nature-based solution projects have partnered to scale up reforestation, afforestation, and agroforestry initiatives in Latin America, aiming to generate both carbon and biodiversity credits.

India’s biggest packaged water company proposes framework to establish water credits for the beverage industry

India’s biggest bottled water company has proposed developing a framework for establishing water credits to make the beverage industry accountable for its water use.

Over 40% of securities held by French financials highly dependent on ecosystems, study finds

French financial institutions are highly exposed to risks associated with biodiversity loss, with over 40% of securities in their portfolios issued by companies heavily dependent on at least one ecosystem service, a paper has found.

ICYM

EU’s Market Stability Reserve to withdraw another 267 mln permits from ETS starting Sep. 2024

Almost 267 million carbon allowances will be withdrawn from the EU ETS over the 12 months starting this September and inserted into the Market Stability Reserve (MSR), the European Commission announced late Saturday in its annual ‘TNAC’ update.

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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

INTERNATIONAL

Big call – The UN’s climate chief, Simon Stiell, has called on climate negotiators in Bonn at SB60 to work through differences and find consensus on Article 6 of the Paris Agreement. “We must also move towards better carbon markets by making progress on Article 6 here in Bonn,” he said. Observers have called for a “reset” in talks after chaotic scenes in discussions about UN carbon markets at COP28 in Dubai last year. Climate finance is also high on the agenda at the intersessional summit that runs from June 3-13.

Risky business – Brussels-based NGO Carbon Market Watch, in collaboration with CLARA, has published a report taking aim at attempts to see UN REDD+ results used as carbon credits. The report is especially timely, they say, as some countries are trying to create a ‘fast track’ for UN REDD+ results to become Article 6.2 ITMOs. This could mean, for example, that Suriname’s REDD+ results from 2021  – nearly 5 mln tonnes – would become ITMOs, and can thus be used to compensate for countries’ emissions. The from the organisations outlines what it sees as the differences between UN REDD+ and Article 6.2, and highlights the inherent risks of REDD+ that make it incompatible with offsetting, according to them.

EMEA

Clear hydrogen – The European Commission is launching work on a pilot mechanism, which aims to accelerate investments by providing a clearer picture of the market situation of both offtakers and suppliers and facilitating contacts between them. It will be in place for five years and will be part of the European Hydrogen Bank. It will collect, process, and give access to information on demand and supply for renewable, low-carbon hydrogen, and derivatives, allowing European buyers to market with both European and foreign suppliers. A procurement process has started on Monday to find a service provider to develop at IT platform to operate the pilot mechanism. The Commission plans to sign a contract by the end of this year, so that it can start operations by mid-2025.

ASIA PACIFIC

Cashed up – ASX-listed Vulcan Energy has received combined strategic investments of A$65 mln ($43 mln) from CIMIC Group and Hancock Prospecting to support the construction of the first phase of its integrated renewable energy and zero-carbon lithium project in Germany, it told the market Monday. CIMIC now controls a 6% stake in Vulcan share capital, while Hancock has boosted its stake in the company to 7.5%, making it the company’s second-largest shareholder. The funds raised will allow Vulcan to begin early validation works for the engineering procurement and construction management for the plant, as well as pre-ordering long-lead items, it said. The company’s share price was up 6.3% in reaction to the news at A$5.04. Vulcan’s flagship project aims to produce lithium, heat, and renewable energy from geothermal brine, as a way to become a supplier of zero-carbon lithium to Europe. The company’s combined geothermal energy and lithium resource is the largest in Europe, according to Vulcan.

Green loans – The Clean Energy Finance Corporation, Australia’s government-owned green bank, has received proposals worth more than A$850 mln ($564 mln) in green loans and confirmed its first investment via the $1 bln Household Energy Upgrades Fund (HEUF). In last year’s budget, the government allocated A$1 bln to the CEFC to create the HEUF and fast-track sustainability improvements in existing housing by providing discounted consumer finance through a broad range of co-financers. It said in a media statement it received proposals from a wide range of financiers, covering green mortgages, green personal loans, and other green finance products to improve home energy performance for homeowners, renters, and strata properties. Its first HUEF investment, valued at A$60 mln, will work with fintech lender Plenti to provide cheaper finance to support solar PV, home batteries, and other energy efficiency upgrades.

Agreements – New Zealand government officials are travelling to Singapore to sign a Clean Economy Agreement with Asian counterparts, according to an official statement. The agreement is designed to increase cooperation on climate goals by mobilising investment in technologies and solutions for energy, industry, and transport. Climate Minister Simon Watts will be joined by a select group of NZ clean tech companies that have been invited to pitch the region’s top investors at the inaugural Clean Economy Investor Forum. Watts gave investment in hydrogen and SAF technology as workstreams already operating under the Clean Economy Agreement. It follows the coalition government signing similar agreements with ASEAN countries to cooperate on clean investment and carbon markets in April.

Low-carbon programme – World Bank has approved a $250 mln loan for Yichang City in Hubei province to help transition to low-carbon transportation. Through the intervention, it is expected that the average daily public transport ridership will improve along with the accessibility to jobs, while also resulting in the reduction of net GHG emissions. The total programme financing over five years is estimated at $1,114 mln, with $250 mln funded through an International Bank for Reconstruction and Development loan from the World Bank and the remaining amount from the Chinese government. The programme aims to enforce cleaner vehicle emission standards and phase out older, heavily polluting freight vehicles and buses. It will also pilot the participation of the transport sector in the emissions trading scheme.

AMERICAS

Mexico makes history – Claudia Sheinbaum – a former mayor of Mexico City and environmental scientist – has been elected as the country’s next president, and will be the first woman to serve in that role. Sheinbaum, who holds a PhD in energy engineering, was part of an IPCC team that shared a Nobel Peace Prize in 2007 with former US Vice President Al Gore for its work on the topic of climate change mitigation in the IPCC Fourth Assessment Report. Her platform included expanding renewable energy and supporting the production of biofuels, but also included a controversial railway project that opponents say is linked to deforestation; as well as limiting foreign investment in the country’s electricity market. Bloomberg projects that Sheinbaum’s coalition will come just short of a supermajority, winning above two-thirds of seats in the lower house of the legislature, but falling short of that threshold in the upper house. Sheinbaum comes from the same party as her presidential predecessor Andres Manuel Lopez Obrador, or AMLO, serving as his Secretary of Environment during AMLO’s tenure as Head of Government of Mexico City from 2000-06. The post-election political landscape will make it difficult for Sheinbaum to deviate from AMLO’s roadmap, Bloomberg reported.

Brazil forest bureaucracy – A law excluding forestry from the list of potentially polluting activities in Brazil was sanctioned on Friday, reported Movimento Economico. With this approval, the forestry sector will no longer need environmental licensing for the planting of forests for pulp extraction, such as pine and eucalyptus, and will be exempt from paying the Environmental Control and Inspection Fee. Minister of Agriculture and Livestock Carlos Favaro said this would simplify the permitting process and reduce operational costs. The main objective is to encourage reforestation, increase investments in the forestry sector, and promote sustainable forest production, he added.

Argentinian agreement – The province of Cordoba has signed a collaboration agreement with MexiCO2 – a climate consultancy and subsidiary of the Mexican Stock Exchange Group – it announced Monday. The agreement was signed by Minister of Infrastructure and Public Services Fabian Lopez; Minister of Environment and Circular Economy Victoria Flores, and Eduardo Piquero, CEO of MexiCO2. Under the agreement, MexiCO2 will provide access to technical expertise and strategic support for growing the carbon market in Cordoba, seeking to help mobilise resources for adaptation and mitigation projects in the province.

No contest – Two environmental groups The Sierra Club and the Natural Resources Defense Council (NRDC) withdrew their lawsuit against the Securities and Exchange Commission’s climate disclosure rule in separate filings on Friday, E&E reported. The groups had argued in March that the SEC has fallen short of its statutory mandate to protect investors, maintain fair, orderly, and efficient markets, and promote capital formation by retreating from the inclusion of Scope 3 emissions from the final climate disclosure rules. NRDC noted in their withdrawal that they would focus resources on advocating for improvements to climate-related financial disclosure outside of the courts. Deluged with lawsuits, the rules were reinstated after litigation was consolidated and moved to a new court. Opening briefs of the cases were due June 14.

Linkage talks – The Washington Department of Ecology (ECY) on Monday announced public meetings to share information and collect input regarding the state’s cap-and-trade linkage rulemaking. The first meeting will be held on July 10, and the ECY will also provide a draft of the rule language prior to the event. A second meeting on the environmental justice impacts of linkage has also been scheduled for July 22. The agency is accepting feedback on Washington’s potential partnership with the broader WCI market beginning Monday until Sep. 27 at 2359 PST.

Coal-driven emissions plateau – Last year’s sharp decline in coal-fired electricity is expected to level off in 2024, and coal plant retirements will fall to the lowest level since 2011, according to the US Energy Information Administration (EIA). The rebound in coal-fired power, combined with projected flat demand for oil and natural gas, means that US energy-related emissions will decline by just two-tenths of a percent in 2024, the EIA estimated. The slowdown in coal plant retirements was largely attributed to grid operators’ projections of surging power demand tied to data centre construction, the rise of AI, an uptick in domestic manufacturing, and increased transportation electrification. (E&E News)

Methane gap widens – The gap between leaders and laggards in methane emissions reduction among US oil and gas producers is widening, according to a new analysis of EPA data by sustainability consultancy ERM. Total reported methane emissions for the sector declined since 2019. Nineteen companies were responsible for half of the industry’s methane in the US in 2022. According to the report, natural gas producers in the highest quartile of methane emissions intensity have an emissions intensity that is 32 times higher than producers in the lowest quartile – up from 26 times higher in ERM’s report on 2021 data published last year. (E&E News)

VOLUNTARY

Busy bodies – Gold Standard has announced three public consultations for new methodology tools running from May 31 to July 2. The first is for ‘Project or Leakage Emissions From Fossil Fuel Combustion’ concerning procedures and requirements for calculating CO2 and non-CO2 GHG emissions from stationary fossil fuel combustion. Additionally, the standard is consulting on ‘Project Emissions Calculations And Monitoring Requirements For Geological Storage Complexes’, which relates to activities dealing with the injection of captured CO2 into saline aquifers or depleted hydrocarbon reservoirs. Finally, Gold Standard is looking at ‘Project And Leakage Emissions From Transportation’ around procedures for calculating emissions from the transportation of goods and materials by trucks and/or rail, with potential adaptations for other transport means.

Consulting on carbon – Deloitte is partnering with Catona Climate to allow its US clients access to Catona’s portfolio of high-impact carbon projects, with organisations able to secure Catona-sourced credits via GreenLight, Deloitte’s carbon performance management offering. GreenLight is targeted at large-scale companies, helping them to create effective strategies and operations for curbing their carbon footprint. Deloitte said that it values Catona’s diligence and rigour when vetting and selecting carbon projects, and its engagement with project developers, in the press release.

Clubbing together – NextGen CDR, a removals buyers’ club set up by Mitsubishi and South Pole, has launched its 2024 call for proposals. The NextGen CDR team said it will purchase from additional projects based on submissions for this year’s process, which will remain open from May 31 until June 14. To date, the advanced market commitment has announced purchases of close to 200,000 tonnes of certified removals, and targets an average price of $200/tonne.

Removals mandate – SEB has received the mandate to sell carbon removals from Hafslund Celsio’s waste-to-energy facility in Oslo, with the company establishing a carbon capture and storage (CCS) facility with the support of the state to capture and permanently store the CO2 generated. Hafslund Celsio owns and operates Norway’s largest district heating network, where the main source of heat is excess heat from waste incineration. The Oslo plant is the country’s largest waste incineration plant and treats an estimated 350,000 metric tonnes of waste annually, with CO2 emissions of around 350,000 tonnes per year. The plant is the largest single source of fossil CO2 emissions in the municipality of Oslo, accounting for 17% of the total. Hafslund Celsio has secured capacity at Northern Lights, guaranteed by the Norwegian state, to store the CO2 captured from the waste incineration process, with the CCS facility expected online in 2028. At full capacity, the Klemetsrud facility will capture up to 175,000 tonnes of biogenic CO2 per year, in addition to reducing Oslo’s fossil emissions by 17%.

AND FINALLY…

Low carbon chips – The Champions League final on Saturday included carbon labels on the menu boards displayed at Wembley Stadium, as well as all food trucks at Champions Festival sites throughout the weekend. The labels, developed by My Emissions, use an A to E rating system to communicate the carbon impact of food for offer during the football final. UEFA will review the impact of the initiatives with My Emissions following the event, and this is the latest decarbonisation initiative on offer by UEFA since it launched a carbon footprint calculator in March designed to help football clubs lower emissions. (Sustainability Beat)

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