Newsletters > CP Daily: Monday August 12, 2024

CP Daily: Monday August 12, 2024

Published 02:28 on August 13, 2024  /  Last updated at 02:28 on August 13, 2024  / /  Newsletters

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

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TOP STORY

FEATURE: Entities risk missing first ETS2 deadlines with national laws yet to be set

Many regulated entities under the EU’s incoming Emissions Trading System for heating and transport (ETS2) worry they won’t be able to meet their first compliance deadline — as all but one EU country has yet to implement the policy into national law, while another is drawing criticism for its move to do so.

EMEA

EU member states make scant progress in 2024 EUA handout

EU member states handed out fewer than 10 million EUAs for 2024 to industrial installations in the last two weeks, raising the total number of permits issued by just 1.5 percentage points and leaving the market with more than 21% of its annual allocation still to be distributed among emitters.

EU General Court to rule on ETS preliminary cases

The EU’s General Court will take over the legal jurisdiction for hearing and deciding questions regarding preliminary rulings on the EU ETS, under a change announced on Monday.

Euro Markets: EUAs cling on to bulk of early gains after gas gives up massive 6.2% jump

European carbon prices rose to a more than two-month high on Monday, propelled by year-to-date highs in natural gas and power, growing geopolitical risks, and the prospect of sharply warmer temperatures across Europe that were expected to boost the call on thermal power, though the EUA contract’s early gains were trimmed amid an afternoon slump in gas and power markets.

AMERICAS

US CBAM can be vital climate, cooperation tool if crafted carefully -brief

Current proposals for a carbon border adjustment mechanism (CBAM) in the US are disjointed, but such a policy can be a valuable global climate tool if certain steps are taken to ensure its effectiveness as both a climate and economic measure, according to brief published recently.

RGGI Market: RGAs drift higher near-term from sustained compliance buying

RGGI allowance (RGA) benchmark prices regained levels north of $27 over the last week as compliance buying kept the demand signal in place, but most traders viewed prices at these levels to be eventually unsustainable

California cap-and-trade stakeholders advocate for implementation of programme changes in 2025

Stakeholders were united in calling for California’s ARB to implement changes to the ETS in 2025 rather than 2026, although proponents were divided in support between potential options for allowance budget reductions, according to comments submitted after the regulator’s last informal rulemaking workshop.

Washington state court’s ruling against lawsuits blocking cap-and-invest repeal reaching November ballot raises transparency concerns

The Washington Supreme Court rejected challenges by non-profits against certification of recent initiatives, including one to repeal the state’s ETS, with the initiatives’ sponsor bewailing lack of transparency on complaints filed.

ASIA PACIFIC

INTERVIEW: Malaysian carbon alliance to back ASEAN interoperable carbon market, says inaugural president

One of the many goals of the newly-formed carbon market alliance in Malaysia is to support an interoperable carbon market across the Association of Southeast Asian Nations (ASEAN) region, the association’s inaugural president has told Carbon Pulse.

Australian miners, airline commit A$80 mln to carbon origination fund in first close

An Australian investment joint venture has launched a carbon credit fund focusing on reforesting agricultural land after securing A$80 million ($52 mln) in its initial close from some of the country’s largest miners and airlines.

Australia’s gas and coal exports taking vast share of remaining carbon budget -report

Australia’s contribution to global warming and its share of the world’s carbon budget is much higher than it appears and within just over a decade could amount to 77 billion tonnes of CO2e, a report from one of Australia’s leading climate scientists cautioned.

Carbon ETF leaves Australian exchange after losses, lack of interest

A carbon exchange traded fund (ETF) on the Australian bourse will shut down operations next month, citing failure to reach the needed size to track the benchmark and meet its investment plans, not being cost effective to investors compared to other carbon ETFs, and limited secondary market trading volumes.

Tokyo government selects startups to kick off carbon offset projects

The government of Tokyo has selected several climate startups to initiate voluntary projects that can create credits from nature-based and farming solutions, with the first batch of pilot projects to be implemented in the coming months.

VOLUNTARY

VCM Report: Surprise sell-off in N-GEO futures sees contract dip below physical levels

A sell-off in Xpansiv CBL’s N-GEO futures contract on CME, attributed to an urgent portfolio liquidation, caught the voluntary market by surprise last week.

DATA DIVE: CCP-tagged voluntary carbon credits see lift in retirements, defy summer slump

Carbon credits issued under methodologies that have been assessed as adhering to Integrity Council for the Voluntary Carbon Market (ICVCM)’s Core Carbon Principles (CCPs) saw a significant year-on-year lift in retirements in June and July, defying the summer slump seen across the wider market.

BECCS holds high potential for emission cuts, profit gains -report

While bioenergy with carbon capture and storage (BECCS) is still a nascent technology, companies with biogenic emissions that fail to integrate the solution into their sustainability strategies may be missing out on significant opportunities for both emissions reductions and financial gains, according to a report on Monday.

Demand for cheap offsets by major companies ‘undermines’ climate integrity of voluntary carbon market -report

Demand for low-quality offsets by major companies is undermining efforts to boost climate integrity in the voluntary carbon market (VCM), according to new research.

CCUS not a viable option for retrofitting of existing thermal power plants -Indian official

The feasibility of carbon capture, utilisation, and storage (CCUS) is highly uncertain, making it an unviable option for the retrofitting of existing thermal power plants, an Indian government official has told the upper house of Parliament.

AVIATION

BRIEFING: First SAF plant launches converting CO2, H2 to jet fuel in single step

The first facility to demonstrate the production of sustainable aviation fuel (SAF) using CO2 and hydrogen in a single-step process has been launched at Oxford Airport on Monday.

Aviation needs more CORSIA carbon credit supply to decarbonise -IATA

International air carriers’ association IATA has urged that greater supply of CORSIA carbon credits be made available to the market to enable the aviation industry to effectively decarbonise, warning of a looming shortage.

BIODIVERSITY (FREE TO READ)

German fund pilots biodiversity credit methodology to scale African market

A Germany-based investment vehicle is piloting its biodiversity credit methodology for endangered species within a reserve in South Africa, in a bid to increase investors’ appetite towards habitat conservation in the area.

Securities firm leads call for China OECMs

A Shanghai- and Hong Kong-listed securities firm has issued a call for expressions of interest in Mainland China projects seeking status as Other Effective land-based Conservation Measures (OECMs) as part of the country’s efforts to meet its commitments under the Global Biodiversity Framework (GBF).

Projects with up to 3.5 mln hectares preparing to generate biodiversity credits -research

Sixty projects up to 3.5 million hectares of land in size at their largest are in development with the aim of generating biodiversity credits, an international survey has shown.

‘Integrated’ forest restoration projects could highly benefit biodiversity, climate, and people -study

Forest restoration plans should adopt ‘integrated’ approaches, encompassing biodiversity, climate, and human livelihood simultaneously, as this could deliver significant benefits across all three areas, a study carried out in India has found.

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CONFERENCES

Carbon Forward Expo – October 8-10, London and Online: Our flagship conference returns to the stunning De Vere Grand Connaught Rooms in Covent Garden. As the agenda comes together for our ninth annual event, we want to make sure you don’t miss out on our 10% discount offer, which is available throughout August. We’re also offering free passes for offset buyers. Get in touch to find out if you’re eligible and how to apply. Register now!

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BITE-SIZED UPDATES FROM AROUND THE WORLD

INTERNATIONAL

COP precursor – Baku is gearing up to host the inaugural Baku Climate Action Week from Sep. 30 to Oct. 4, which will engage and mobilise society ahead of the UN climate summit COP29 in November. In partnership with London Climate Action Week, Baku Climate Action Week will feature a range of high-level international conferences alongside multistakeholder local and community events. The first half of the week will showcase public institutions, academia, and the private sector, while the second half will feature arts and culture.

New friends – The Climate Vulnerable Forum (CVF) headquartered in Accra, Ghana, has signed a Memorandum of Understanding (MoU) with India’s Observer Research Foundation (ORF) to conduct joint work on climate change, including driving investments into clean energy and technology in the CVF’s 68 member countries. Under the partnership, the CVF and ORF will focus on three areas including the assessment of the natural capital value of resources across CVF member countries, operationalising debt-for-nature swaps, and establishing methodologies to measure emission reductions in line with the circular economy principles of Article 6 of the Paris Agreement, a press statement said.

EMEA

Committee convening – Egypt is creating a new Environmental and Climate Policy Committee to lead on its green transition, reports Daily News Egypt. Headed up by Egyptian Environment Minister Yasmine Fouad, the committee will bring together key ministries such as planning, finance, energy, and industry to jointly develop a strategy for transitioning to a green economy. It main goal will be to develop a unified position on climate change, including national goals and participation in international negotiations, while it will also coordinate efforts to implement OECD recommendations on the environment.

Watering down on climate – The SNP has been accused of watering down its climate change commitment by planning to delay the launch of a new legally enshrined strategy. The next statutory climate change plan was initially promised by the Scottish government in draft form by Nov. 2023 and must be published in three months’ time. But ministers are instead proposing a new bill on five-year emissions-lowering carbon budgets, subject to the approval of MSPs, that will extend the previous legal deadline into 2025. The Green Party, SNP’s former coalition partners, view the move as very concerning, saying that any delays counter the need for more urgent climate action. (the Times)

ASIA PACIFIC

Field funding – Four Australian projects have been awarded A$9 mln ($5 mln) in grants under the government’s Methane Emissions Reduction in Livestock research and development programme, it announced Friday. The programme aims to find effective solutions to reduce livestock methane emissions, a challenging task given that most cattle and sheep are farmed on extensive grazing systems. The funding went to two universities, a biotech company, and a lot feeding company, looking at various ways to cut methane emissions, including the use of asparagopsis, Polygain and Agolin, and Bovaer. Livestock methane emissions make up around 70% of GHG from the agriculture sector and 13% of Australia’s total emissions.

Alternative protein – Japanese food processing company Ajinomoto will start selling food products using Solein, an edible microbial protein alternative, in its pop-up stores for a limited period, according to a company statement. Ajinomoto has been working with Solar Foods, a Finnish startup, for the project since last year. Solein is the world’s most sustainable protein with comparative GHG emissions of around 20% of plant protein and 1% of meat, according to Solar Foods.

Solar power contract – Japan’s MUFG Bank has signed a contract with Osaka Gas and Machiokoshi Energy to receive electricity generated from an 89-hectare pasture in Hokkaido, as the bank sees to cut its emissions, Kyodo News reported. The farm, which may be the country’s first solar panel farm located in a sheep pasture for renewable energy, will be enough to power about 4,000 Japanese households a year, the report said.

Yes, Minister – Fresh from announcing A$50 mln ($32.2 mln) in new Australian Carbon Credit Unit (ACCU) generating projects last week, Wollemi Capital has appointed a former state treasurer to its board. Ex-New South Wales Treasurer Matt Kean, who most recently also joined the Climate Change Authority as Chair, will take on a full time role at the company using his background handling multiple portfolios including a four-year stint in energy and the environment under a prior Liberal government. Kean also delivered an electricity roadmap in 2020 to drive more renewable power into the grid, at a time when federal climate and energy policy was in a deficit and Australian states both Labor and Liberal enacted their own climate change and energy policies. “The roadmap, comprising 12 GW of renewables and 2 GW of long duration storage, was the biggest renewable energy policy in Australia’s history,”  Wollemi said in a LinkedIn post Monday. Last Monday Wollemi announced it had been quietly putting together a pipeline of 10 nature-based solution projects with four developers, and suggested it was approaching the sector in a similar way as traditional infrastructure programmes to ensure finance is scalable as demand grows. 

We’ve got your back – China’s central bank, the People’s Bank of China (PBOC), will extend a low-carbon lending programme to support decarbonisation projects by companies to the end of 2027, according to Reuters. The PBOC financing scheme, launched in 2021, gives banks up to 60% of the principal for qualified loans at a one-year lending rate of 1.75%.

Pledge – China has unveiled a set of new state-level guidelines aimed at establishing a green and low-carbon circular economy by 2035, China Daily reported, citing a document released Sunday by the State Council. By 2030, China should see the scale of the energy conservation and environmental protection industry reach about 15 trillion yuan ($2.1 trillion) and the consumption of non-fossil energy increase to 25% of the nation’s total energy use by 2030, the document showed.

AMERICAS

60% well, but – Some 40% of major manufacturing projects funded by the Inflation Reduction Act have been delayed or paused, according to investigation by the Financial Times, published Sunday. Of the projects worth more than $100 mln, a total of $84 bln have been delayed between two months and several years, or paused indefinitely. Several factors have contributed to the slow down, including deteriorating market conditions, slowing demand, and a lack of policy certainty in a high-stakes election year.

Building codes – The US General Services Administration (GSA) updated P100 Facility Standards (P100) last week for 300,000 federal public buildings to advance energy efficiency, reduce emissions, and increase resilience. Updated every three years, P100 establishes benchmarks for: 1) electrification – equipment and systems powered by clean energy sources; 2) embodied carbon – use of salvaged, reused, regenerative, and biomimetic materials; 3) energy efficiency – minimise energy loss and improve overall efficiency; 4) grid interactive efficient buildings – a more resilient, responsive grid; 5) water reuse – mandating 15% potable water reuse rate; 6) construction decarbonisation – clean energy operations, material salvage, and offsite assemblage; and 7) labour practices – ensure supply chains free of child and forced labour, workers protected from extreme heat.

Driving demand – The US Environmental Protection Agency (EPA) announced the plan for its Buy Clean initiative to boost clean American manufacturing last Wednesday. The label programme will define what constitutes “clean” construction materials as part of the domestic effort to grow the domestic market for US-made, lower-carbon construction materials. EPA anticipates that labeling requirements for each product type will be periodically reviewed and updated every two to four years to respond to and drive market shifts and help users meet sustainability objectives.

Midwest milk – The Michigan Milk Producers Association and the Canadian Dairy Distillery announced last week that they had broken ground on a new $41 mln plant in Constantine, Michigan. The facility aims to transform 14,000 tonnes of milk permeate, a dairy byproduct, into 2.2 million gallons (8.3 mln litres) of ethanol annually, reported Advance Biofuels USA. When blended with transportation fuel, the permeate ethanol will offset 14,500 tonnes of carbon a year. Ethanol production at the plant is planned for 2025.

Reducing carbon ‘hoofprint’ – Dave Fischer, who operates Fischer Farms in Indiana, every week delivers “natural, high-quality” beef to Indiana University’s dining halls, 150 restaurants, and multiple retailers and online customers using climate-smart production practices. Fisher also manages a multi-million dollar five-year project design to explore new ways to produce beef with lower GHG emissions. Last year, Fischer Farms was one of only a few non-institutional entities to obtain a Climate Smart Commodities grant from the US Department of Agriculture. The farm relies on annual ryegrass as a primary forage and cover crop on his rolling land. Not only does it make haylage to mix with corn silage in a total mixed ration, but it returns carbon to the soil, in part, due to the mass and depth of roots it produces. The farm will continue to look for avenues to capture carbon through plants, reduce methane emissions, and slash nitrogen use in crops to make their beef operation carbon negative, Fischer said. (Farm Progress)

New buses for New York – New York Governor Kathy Hochul (D) announced Monday $200 mln in funding for zero-emission school buses through Clean Water, Clean Air, and Green Jobs Environmental Bond Act. The funding, distributed through the New York School Bus Incentive Program, provides support for the purchase of electric buses, charging infrastructure, or fleet electrification planning as public schools transition to zero-emission technologies that improve air quality and reduce pollution in communities, Hochul’s office said. The funding is available on a first-come, first-serve basis.

Spot the issue – The US Department of Transportation’s Maritime Administration (MARAD) should pause and reconsider its approval of the Enterprise Product Partners’ Sea Port Oil Terminal (SPOT) and amend permit assessment measures for similar pending projects, a group of 22 US congressional Democrats on Friday told President Joe Biden’s administration. The agency should pause all new and pending deepwater port licensing decisions to update its approval criteria based on environmental justice, climate, and public health impacts, they wrote in their joint letter, which is the latest in an intraparty rift over Enterprise’s new deepwater oil port located 35 miles (56 km) off the coast of Brazoria, Texas, in the Gulf of Mexico. Initially planned for 2025, it is expected to become operational by late 2026 or early 2027. But the project has sparked environmental concerns surrounding increased local air pollution and oil spills. Friday’s letter argued that failing to consider environmental impacts would be inconsistent with Biden’s executive orders for federal agencies to suspend, rescind, or halt actions that conflict with goals to protect public health and the environment. (S&P Global)

Joint efforts – A North Carolina-based trade group US Composting Council (USCC) and nonprofit US Biochar Initiative out of Oregon, signed a Memorandum of Understanding (MOU) to collaborate on enhancing soil health, water quality, and sustainability through the use of compost and biochar, the organisations said in a joint press release on Thursday. The partnership aims to: improve plant health, soil health, and water quality and conservation through compost and biochar use as soil amendments; reduce soil erosion with biochar and compost use; dispose of and use plant waste through the composting and biochar processes to reduce odour, reduce GHG emissions, sequester carbon and create valuable materials; and promote the value of biochar and composting to assist in developing sustainable communities.

Unlikely allies – Representatives of environmental group Sierra Club, the National Rifles Association, and a newly formed coalition Free Soil have all opposed Summit Carbon Solutions’ Midwest Carbon Express CO2 pipeline, ESG University reported Monday. This adds to a growing list of opposition towards the 2,500-mile project that plans to build pipelines across Minnesota, Nebraska, North Dakota, and South Dakota. The project developer continues to grapple with regulatory hurdles as stakeholders remain concerned about the environmental and safety issues pertaining to pipelines. Iowa in June approved the application for SCS’ construction permit, but challenges persist in the state as well as other regions – including both the Dakotas. The pipeline project is facing a two-year delay in operations in light of increased stakeholder pushback.

INVESTMENT

Goodbye – Goldman Sachs’ fund division will leave investor engagement group Climate Action 100+, the most recent of high-profile departures a growing anti-ESG movement and anti-fossil fuel divestment movement in the US, Reuters reported Friday. The investor-led initiative was launched in 2017 and aimed to encourage airlines, oil majors, and other companies to reduce their carbon footprint. JP Morgan Asset Management and State Street Global Advisors left in Feb. 2024, followed by a scaling-back of participation in the group by BlackRock the same month. Other firms that have recently left the group include Aristotle Credit and Aristotle Pacific Capital, TCW Group, Vert Asset Management, Mellon Investment Corp, and Water Asset Management, according to Reuters.

Sustainable timber investing – Stafford Capital Partners has invested $70 mln to acquire the first assets for its debut carbon-offset timberland fund. The Stafford Carbon Offsets Opportunities Fund, backed by UK local government pension schemes, has invested $60 mln to acquire degraded pastureland in south-western Brazil and made a $12 mln investment in three properties totalling 1,914 ha in New Zealand. In Brazil, the focus will be on commercial timber planting and forest restoration, while in New Zealand, the land will be used for grazing or forestry. Institutional investor appetite for carbon-sequestering properties of timber are growing in the context of the net zero race, said Stafford Capital’s CEO Angus Whiteley.

SCIENCE & TECH

Older is better – Older trees are able to accelerate their rates of absorbing planet-warming emissions, scientists at the University of Birmingham have found, the BBC reports. A forest of mature oak trees was exposed to elevated levels of CO2 for seven years and in response, the trees increased their production of wood – locking in the GHG emissions and preventing them from warming the planet. The researchers hope the study, published in Nature Climate Change, will demonstrate the importance of protecting and maintaining mature forests for tackling climate change. It is estimated that globally a football field of primary forest is lost every six seconds.

AND FINALLY…

Not my cuppa – The impacts of climate change in India and Kenya could push up the price of a British cuppa tea by as much as 30%, the Yorkshire Evening Post reported. The harvests in both countries are being affected by heatwaves, drought, and flooding, which cut into tea production yields. India’s tea production was down by 30% in May compared to the same period last year.

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