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TOP STORY
BRIEFING: Companies risk being ‘locked out’ of carbon removal market if they do not buy credits now
The global carbon dioxide removal (CDR) market risks failing to fully take off if more corporate clients do not commit to purchasing carbon credits now, speakers at a conference in London warned this week.
CARBON FORWARD NORTH AMERICA
Longer term strategy necessary in maturing VCM, experts say
Heightened regulatory scrutiny could encourage investment in the voluntary carbon market (VCM), but market players need a long-term strategy for the relatively nascent industry, panellists told conference attendees this week.
EMEA
INTERVIEW: Behavioural analysis of EUA trading strategies needed as power sector decarbonises
Sector-specific trading strategies for EU carbon allowances will increasingly determine supply and demand balances as free allocations are phased out and Europe’s power sector contiues to decarbonise, according to a carbon analyst and financial modelling expert.
Fate of EU nature law hangs in the balance at Monday ministerial meeting
A long quest for legislation to restore ecosystems across land in Europe may reach the end of the line on Monday when the EU’s 27 environment ministers gather in Luxembourg for what could be a decisive meeting, although negotiators are still unsure about how things will play out exactly.
Euro Markets: EUAs finally give way under weight of options-related selling, while UKA discount at one-year low
After clinging to the week’s narrow trading range for the first half of Friday, European carbon prices fell away to a six-week low in the afternoon as option traders unwound hedges ahead of next Wednesday’s expiry of the June options contracts, while UK allowances trimmed their discount to the European contract to the least in a year.
AMERICAS
Canadian emissions and GDP higher in 2030 without carbon pricing -government data
Both Canada’s emissions and GDP would be higher in 2030 without carbon pricing, according to data made public Thursday by Environment and Climate Change Canada (ECCC).
WCI Q3 auction volume dips to lowest offered YtD
The California-Quebec joint WCI auction in August will offer the lowest volume of allowances so far this year, according to a notice from California regulator ARB published Friday.
Traders add longer-dated vintages, mostly reduce V24s across North American carbon markets
Emitters and speculators added to longer dated California Carbon Allowance (CCAs) holdings, while slashing length for the most part in current vintages across the WCI, RGGI, and Washington carbon markets, according to weekly data from the US Commodity Futures Trading Commission (CFTC).
California Legislature passes 2024-25 budget, allocates $40 mln for carbon removal
The California Legislature passed its 2024 budget in the form of Assembly Bill 107 (AB 107) on Thursday, and now awaits the approval of Governor Gavin Newsom (D) to conduct a total of $293 billion in spending, including $40 million for carbon removal research and development.
ASIA PACIFIC
Singapore set to give carbon tax rate cut for refiners -reports
Singapore is ramping up its carbon tax from this year, but is planning major rebates for refineries and petrochemicals until the end of 2025 amid increased international competition, according to Reuters.
New Zealand cancels controversial annual ETS forestry charges for this year
The New Zealand government has scrapped this year’s annual service charges for forestry under the emissions trading scheme.
High number of ACCU projects claiming for the first time, regulator data shows
Applications from projects looking to receive Australian Carbon Credit Units (ACCUs) totalled 4.3 million units at the end of the Q1, with many claiming for the first time, according to data published by the Clean Energy Regulator (CER) Friday.
ANALYSIS: Australian NGOs urge govt to form clean energy partnerships with fossil fuel trading partners, but real-world challenges abound
NGOs this week have said Australia should find ways to establish partnerships with its fossil fuel trading partners to build regional cooperation towards reducing greenhouse gas emissions, but while it has potential, experts have raised a litany of challenges that could stifle such ambitions.
CN Markets: CEA price remains stable, current compliance period may see lasting oversupply
China’s national carbon market saw allowance prices remain rangebound over the past week, with analysts expecting a lingering oversupply in the market during the current compliance period.
Japanese climate tech company raises $26 mln, forms multi-sector carbon alliances
A Tokyo-based climate technology announced Friday it has raised 4.2 billion yen ($26 mln) in Series C funding while setting up alliances – including on carbon credits – across several sectors to accelerate the decarbonisation process.
Regulator approves 21 projects for J-Credit scheme
Japan’s domestic J-Credit scheme has received a boost as the system administrator has approved the registration of 21 projects capable of generating just over 1.1 million units.
VOLUNTARY
VCM activity plummeted in May, ahead of first CCP integrity label approval
Credit retirements from the four main standard bodies in the voluntary carbon market plummeted in May, just ahead of the first approval of the core carbon principle (CCP) label for an estimated 27 million credits at the start of June.
Korean investors still cautious on the voluntary carbon market amid insufficient policy guidance
Investors in South Korea remain cautious about making a foray into the international voluntary carbon market, given the absence of government guidance and slow trades of domestic emissions permits, an event heard this week.
Japanese developer teams up with provincial govt for rice projects in Vietnam
A Tokyo-based carbon project developer has partnered with a provincial government in Vietnam for developing methane offsetting projects in the Red River Delta region of the Southeast Asian nation.
BIODIVERSITY (FREE TO READ)
INTERVIEW: Octopus Investments takes mixed approach to natural capital strategy
A British investor launching a natural capital strategy is aiming for a strong risk-return profile by balancing investments in nascent markets like biodiversity with more assured sectors like renewable energy and afforestation.
Canada releases 2030 nature strategy
The Canadian government has released a 2030 Nature Strategy for reversing biodiversity loss, in line with the goals of the COP15 final agreement, proposing ramping up natural capital accounting.
FEATURE: Nature tech startups sit tight on biodiversity monitoring amid concerns over lack of investment
Nature tech companies are struggling to attract investment for biodiversity monitoring due to lack of corporate demand, with venture capitalists encouraging them to “survive” as the market is slated to grow within the next two years.
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CONFERENCES
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BITE-SIZED UPDATES FROM AROUND THE WORLD
INTERNATIONAL
The name’s outcome bond – The World Bank will soon issue a new bond to raise $200 mln in order to boost reforestation in Brazil’s Amazon, Reuters reported. The bond is also expected to support World Bank’s sustainable development activities and provide financing for reforestation projects selected by Brazilian startup Mombak. The startup buys degraded land from farmers and ranchers or partners with them to replant native species in the world’s largest rainforest, and generates carbon credits that can be traded globally. Meanwhile, World Bank’s “outcome bond” model, allows investors to support specific sustainable projects and outcomes. Some similar initiatives by the World Bank include a $100 mln bond to finance plastic reduction projects in Ghana and Indonesia, and a $150 mln bond to support efforts to increase the endangered black rhino population in South Africa, Reuters added.
G7 commitments – The G7 bolstered its commitment to address the “triple global crisis of climate change, pollution, and biodiversity loss” as per the group’s communique published Friday. The leaders of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States gathered in Borgo Egnazia, Italy from June 13-15 and committed to limit warming to 1.5C. The group’s climate ambitions resemble statements made by the nations at COP28, as leaders said they would affirm the important role of high-integrity carbon markets and carbon pricing; commit to a transition away from fossil fuels; accelerate decarbonisation in industrial sectors; tackle methane emissions; reduce dependency on Russian fossil fuels; advance safe use and scale of nuclear energy; ensure clean energy for developing countries, particularly in Africa, advance climate finance at COP29, and halt and reverse biodiversity loss and deforestation by 2030.
ASIA PACIFIC
Low-carbon sugarcane – Japanese beverage giant Suntory has launched a three-year low carbon sugarcane farming project in Thailand in partnership with VIVE Programme, a voluntary sustainability programme, and Thailand’s sugar producer Kaset Thai International Sugar Corporation (KTIS). Funded by Suntory, the pilot programme will facilitate farming interventions based on regenerative agricultural practices. This programme will contribute to developing low-carbon commodity supply chains of the Suntory Group and reducing GHG emissions to meet its 2030 target of 30% reduction across the whole value chain against a 2019 baseline, the beverage firm said.
You’ve got my back – South Korea’s K-eco has announced four international emissions reduction projects that will receive government support this year, according to a notice released Thursday. A Vietnam-based landfill project and a water purification project in Ghana will be subsidised for feasibility studies. Preliminary feasibility studies for two other projects (Uzbekistan and Vietnam) will also receive financial support from the government, the notice showed.
AMERICAS
Chemicals from corn – Houston-based sustainable chemicals startup Solugen has received a $214 mln conditional loan commitment from the US Department of Energy’s Loan Programs Office. According to Solugen CEO Gaurab Chakrabarti and CTO Sean Hunt, the company will use the loan to build a “bioforge”, or sustainable chemicals plant, in Marshall, Minnesota. The company turns corn sugar into sustainable chemicals that are critical ingredients to produce concrete, industrial and wastewater treatments, and household detergents. Solugen’s chemicals can replace or reduce the need for others made from petroleum. (CNBC)
Google energy deal – Two of Google’s data centres in Nevada will be powered by an advanced geothermal project, following an agreement signed with NV Energy on Friday. The 15-year Energy Supply Agreement was signed between Sierra Pacific Power Company and Callisto Enterprises, subsidiaries of NV Energy and Google, respectively, and filed with the Public Utilities Commission of Nevada. The price per MWh was redacted from public documents. The agreement is among the tech giant’s efforts to operate its data centres and campuses on 24/7 carbon-free energy by 2030, amid growing energy demand resulting from AI.
More renewables – The barrier to dispatching 24/7 carbon-free energy is not hourly matching, but insufficient data and renewable generation, Utility Dive reported Thursday. Gridmatic, an energy modelling company, ran a year-long pilot to match a data centre with zero-carbon energy sources, and was able to meet 80% of the centre’s power consumption with appropriate sources, but Gridmatic ultimately could not find affordable resources to match all the energy needs. There needs to be more localised, dispatchable carbon-free generation such as nuclear energy, alongside more transparent and standardised emissions data, said David Miller, vice president of business development for Gridmatic.
VOLUNTARY
Alternative thinking – A former managing director at Goldman Sachs has clubbed together with law firm Linklaters and nonprofit Scope 3 Climate Capital to develop and promote an alternative to carbon credits by developing a new product designed to reduce emissions in corporate supply chains. The product — known as a sector-transition acceleration contract (STAC) — acts as a direct transaction between a company and its supplier whereby the former rewards the latter for emissions cuts by, for example, placing money budgeted for credits into escrow accounts, to be released to suppliers once they’ve met climate milestones. The goal being to reduce private sector reliance on carbon credits as a way to meet net zero pledges and to also allow institutional investors to tackle portfolio climate risks that conventional diversification tactics can’t fix. STACs fit into a rising effort to produce legally defined financial instruments that can support the decarbonization of supply chains. The American Bar Association has published model contracts companies can use, while the EU passed legislation earlier this year that mandates companies to create transition plans requiring them to document actual emissions reductions. (Bloomberg News)
Efficiency wins – Aluminium producer Rusal has registered the first projects in the Russian register of carbon units (CU) in accordance with changes in Russian legislation concerning carbon regulation. Rusal’s two projects to be added under the new rules were energy efficiency improvements of the Ural Aluminum Smelter in the production of heat energy and in the preparation of raw water, with expected emissions reductions amounting to 1 mln tonnes of CO2 equivalent. The Russian UE registry began operating on Sep. 1, 2022, operated by JSC Kontur. As of June 1, 2024, the requirements for the volume of disclosed information have been expanded. “In accordance with the new rules, the contractor is obliged to provide all project documentation for subsequent disclosure on the registry website, including reports on project implementation, validation and verification of their results,” said Oksana Gogunskaya, general director of Kontur JSC.
Travel miles offset – A carbon removal collective for the travel industry, Tomorrow’s Air, has partnered with direct air company Octavia Carbon in Kenya, to aggregate traveler demand for carbon removal with permanent storage offerings. Travel businesses can partner with Tomorrow’s Air to include carbon removal payments in their trip offerings, while travelers can purchase directly through the website. Launched by the Adventure Travel Trade Association with its global network of sustainable travel partners and in partnership with DAC company Climeworks, Tomorrow’s Air aims to “unite a global collective to clean carbon dioxide from the atmosphere”. Launching this November, Octavia Carbon’s plant will be based in the Kenyan Rift Valley and run on renewable energy to capture CO2 from the atmosphere, with the CO2 then stored in the Rift Valley’s basaltic rock formations.
ECCC appointment – California-based CDR firm Equatic announced today the appointment of Catherine McKenna, the former Minister of Environment and Climate Change Canada, to its Industrial Advisory Board, according to a Friday press release. McKenna’s other experience includes stints as Chair of UN Secretary General’s High Level Expert Group on Net Zero and founder and CEO of advisory firm Climate and Nature Solutions. In May, Equatic, in partnership with EcoEngineers and the International Organization for Standardization (ISO), launched a new MRV methodology for electrolytic ocean-based CDR.
SCIENCE & TECH
Canada’s seabed carbon – Ocean scientists across Canada created discovered that 10.9 billion tonnes of CO2 is estimated to exist within the top 30 centimetres of seabed sentiments across Canada, according to research published in peer-reviewed academic journal Earth System Science Data. The team of researchers from the University of Victoria, University of Alberta, and Dalhousie University created the first high-resolution maps of carbon in Canada’s seabed sediments, covering 4.5 mln square km – nearly 80% of Canada’s total marine area. They found considerable variation across Canada’s seabed, including high levels of carbon at the bottom of fjords and inlets in British Columbia, but very low carbon in shallower areas offshore, as well as low levels of carbon in the Arctic seafloor, but higher carbon predicted in sediments close to the Arctic coasts, the researchers reported in The Conversation on Thursday.
AND FINALLY…
Growing up in extremes – Prenatal and early exposure to extreme cold and heat could have harmful “lasting impacts” on brain development, according to new research published in Nature Climate Change and reported by Carbon Brief. The impacts should be considered in the context of climate change, the researchers warned. The researchers assessed brain scans of 2,681 children in an observation study in the Netherlands, and found that heat exposure during infancy and toddlerhood as well as cold exposure during pregnancy and infancy, could have lasting impacts on children’s “white matter microstructure”. The children living in poorer neighbourhoods were more vulnerable to cold and heat, they found.
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