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TOP STORY
ANALYSIS: Voluntary, regulated carbon markets need each another, but solving the supply bottleneck will take years
Voluntary and regulated carbon markets need one another, international stakeholders told a World Bank-convened event this week, but creating the right investment conditions to scale supply and blur the lines between the two forms of pricing mechanisms will take years.
INTERNATIONAL
Swiss group awards letter of support to biogas carbon project in Ghana under Article 6
The Swiss industry agency entrusted by its government with arranging Article 6.2 bilateral agreements has provided written and financial support to a biogas project in Ghana, a global forerunner in Paris Agreement carbon trading deals.
EMEA
PREVIEW: EU Parliament to debate new Commission, climate-agri nexus, amid Orban stress next week
The 720 members of the European Parliament are gearing up for holding confirmation hearings with the new commissioners-designate, and for holding a series of debates on climate and the bloc’s agricultural sector, as they gather in Strasbourg next week for the first time after the summer break.
Euro Markets: EUAs hit new 7-week low, fall 2% on week but remain rangebound as gas awaits direction
EU carbon allowances fell for a fourth straight week, shedding a little over 2% from last Friday as prices spent the morning in positive territory, before falling to a seven-week low in the afternoon as they struggled to match a more resilient natural gas market.
European utilities push back on “disruptive” electricity market reforms
Measures to lower electricity prices for European industry to drive their global competitiveness, could severely dampen the business case for investments in clean power, warned European electricity trade association Eurelectric this week.
EU identifies ‘ambition gap’ in national climate action plans
The European Commission has identified an “ambition gap” in the National Energy and Climate Action Plans (NECPs) adopted by EU countries, saying better planning and a tighter governance framework is needed to ensure the bloc delivers on its climate goals.
Plans scrapped for UK’s first ‘net zero’ coal mine that would have relied on carbon credits
Planning approval for the UK’s first deep coal mine in 30 years has been quashed by a court because of unlawful claims the mine would be ‘net zero’ and have no impact on the emissions cuts required under the country’s Climate Change Act.
German biogas company raises funding to scale up carbon-negative plug-and-play plants
A German biogas energy startup has raised $62 million in Series A funding following an oversubscribed round, enabling it to begin producing power plants and meet pre-orders from farmers and industrials, it announced on Friday.
AMERICAS
California state Republicans propose bills to reform LCFS, cap-and-trade
California Republicans have introduced legislation to exempt gas from the state’s cap-and-trade scheme, as well as freeze impending amendments to the Low Carbon Fuel Standard (LCFS), with the overall aim to reduce retail gasoline prices.
US Democrats introduce legislation for carbon scoring, penalties for fossil fuel firms
Democrats in the US Congress introduced separate bills on Thursday that would require analysis of the effects on emissions from legislative proposals and charge fossil fuel companies for their historic CO2 output.
US appeals court gives EPA go-ahead to justify interstate air pollution regulation
A US federal appeals court on Thursday instructed the Environmental Protection Agency (EPA) to respond to the concerns of the Supreme Court (SCOTUS) and petitioners who effectively halted the regulator’s scheme to reduce interstate air pollution.
EPA issues violation notice to Illinois CO2 injection operation due to leak
The US Environmental Protection Agency (EPA) has notified a large-scale carbon injection project in Illinois it has violated its operating permit following a CO2 leak that occurred in 2023, according to documents shared with Carbon Pulse.
CFTC: Financials stick with V25 CCA thesis, RGGI slides into shoulder season
Financial entities continued to bolster V25 California Carbon Allowance (CCA) holdings, reducing exposure to V24s over the week, while traders tempered RGGI net length as shoulder season weakness set in, according to data from the US Commodity Futures Trading Commission (CFTC).
ASIA PACIFIC
AU Market: Over 1 mln units traded in a single day pushes ACCU prices to 16-month high
The generic spot price for Australian Carbon Credit Units (ACCUs) reached a 16-month high Thursday off the back of over 1 million credits changing hands throughout the day.
CN Markets: CEA price declines amid shrinking liquidity despite market expansion plans
Recent policy updates on sectoral expansion failed to boost trading activity in China’s emissions market over the past week, which saw permit prices fall below 90 yuan ($12.69) again with shrinking liquidity.
Japanese trading house to join world’s largest low-carbon ammonia project
A major Japanese trading house has secured a preliminary agreement to buy a stake in a large low-carbon ammonia project in the US, it announced Friday.
Indonesia targets $65 bln in earnings from carbon trade by 2028
Indonesian president-elect Prabowo Subianto, who comes to power next month after a February win at the polls, plans to generate and sell rain forest carbon credits worth a total of $65 billion by 2028, Reuters reported Friday, citing a government advisor.
Australia’s new hydrogen paper confirms plans for all-green future
Australia has debuted a new national hydrogen strategy as part of its wider Future Made in Australia (FMIA) strategy which it says will cut CO2e emissions by between 93-186 million tonnes per year by 2050, with up to 15 Mt/year of green hydrogen produced at the same time and the Safeguard Mechanism driving hydrogen tech uptake by businesses keen to drop emissions.
China’s Sichuan seeks forest carbon offset methodologies under local scheme
The government of China’s Sichuan province is seeking methodological proposals on the development of forest carbon sinks under the local offset scheme.
VOLUNTARY
CAD Trust partners with QAI to advance carbon market data initiatives
The Climate Action Data Trust (CAD Trust) and Quantedge Advancement Initiative (WAI) announced a two-year funding partnership Friday to catalyse climate change action and improve carbon market data, the former said.
BIODIVERSITY (FREE TO READ)
EU Commission boss Von der Leyen backs nature credits to drive restoration
The nascent nature credits market is a key solution to the need for economic incentives to restore nature, with its viability proven by carbon, European Commission President Ursula von der Leyen said in a speech on Friday.
INTERVIEW: Forest restoration company gears up for biodiversity credit market
A native forest restoration company is in talks with two major standards to launch its first biodiversity credit projects next year, with a big park in the Philippines among the sites under consideration, the firm told Carbon Pulse.
Japan launches trial of nature coexistence support certificates
Japan’s environment ministry on Friday announced it is now accepting applications from companies seeking so-called nature coexistence support certificates, after the originally intended pilot late last year got delayed.
Biodiversity markets need ‘trust factor’ to scale, tech expert says
Tech firms can give emerging biodiversity markets the ‘trust factor’ companies need to buy nature credits without fear of backlash, a data specialist told a webinar this week.
Rural workers reject nature commodification in run-up to COP16
Smallholder farmers have released a declaration in advance of UN biodiversity conference COP16 with a rejection of discussions that aim to commodify nature.
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EVENTS
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!
IETA’s North American Climate Summit – September 24-26, NYC: NACS 2024 is the premier gathering of carbon market practitioners, experts, and governments from across North America and beyond. Attending NACS 2024 presents a unique opportunity to learn from experts, enhance your carbon market expertise, and expand your network of leaders to collaboratively move the needle on delivering climate action and transition finance at scale. Gain insights on the evolving carbon pricing landscape, latest market trends, most relevant regulatory developments and “what to watch” through COP29 Baku and beyond. Organized by IETA, in collaboration with the International Carbon Action Partnership (ICAP), NACS 2024 is an in-person event with recorded plenary and breakout sessions. The program features high-level plenaries, inspirational keynotes, topic deep-dives, cross-cutting breakouts, interactive side events, exclusive roundtables and unmatched networking opportunities to foster meaningful connections. Secure your spot
Eurelectric’s Power Barometer 2024 – October 3, Brussels: Over the past five years, the power sector has faced unprecedented challenges among the COVID-19 pandemic, the energy crisis, and mounting competition from China and the US. With new policymakers taking office, political attention is now on energy independence, industrialisation, competitiveness, and the ongoing climate battle. Eurelectric Power Barometer 2024 data report will take stock of these developments with DG ENER Director General Ditte Juul Jorgensen, MEP Niels Fuglsang, and SSE Managing Director Sam Peacock. Make sure to join them at our free launch event! Register here
Chile Carbon Forum – October 8-10, Santiago: The forum will bring together experts, business leaders, and government officials to discuss challenges and opportunities within the carbon market. It will cover topics such as carbon taxes, offsetting mechanisms, climate finance, carbon market regulations, international cooperation, nature-based solutions, and innovative emission reduction strategies. The agenda includes panel discussions, workshops, and keynote speeches that emphasize the importance of these topics in promoting a low-carbon economy and combating climate change. This forum is crucial for understanding and advancing collaborative approaches to sustainability. For more information, visit Chile Carbon Forum.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
INTERNATIONAL
Slow progress (again) – At the latest climate talks in Baku, which ended on Thursday, countries made little progress towards agreeing a new climate finance goal to replace the current $100-bln-a-year target, dimming prospects for the main expected outcome from November’s COP29 summit, Climate Home reports. Negotiators gathered in Azerbaijan this week for the last round of technical talks before COP29, after mid-year discussions in Bonn ended in stalemate on several crunch issues.
Want some help? – The US announced efforts to help Nigeria curb methane emissions from its oil and gas sector while increasing access to clean energy, E&E News reports. American officials pledged a variety of technical support to meet those objectives over two days of meetings in Washington with Nigerian representatives. It includes the launch of a State Department-led clean energy buyers club to promote investment in Nigerian clean power projects and a program on nuclear energy technologies. The US Agency for International Development pledged up to $85 mln in assistance over the next five years to improve electricity access across the country of 218 mln people. The inaugural talks are one of roughly 20 “strategic energy dialogues” overseen by the State Department’s Bureau of Energy Resources in an attempt to strengthen bilateral relations with major energy producers, according to administration officials.
AMERICAS
Methane rule struck down – A federal judge blocked a new methane rule from being enforced by the Bureau of Land Management in five Western states – North Dakota, Montana, Texas, Utah, and Wyoming. The methane rule would limit how much methane oil companies can release or burn while forcing them to pay royalties for methane that they do emit. On Thursday, the judge from the US District of North Dakota said that the rule represents a “significant impingement” upon states’ rights, and that the Clean Air Act already regulates this activity. (E&E News)
Emptying pockets – Fossil fuel billionaire Kelcy Warren could bankrupt Greenpeace US, should his $300 mln lawsuit against the group succeed in court, the Wall Street Journal reported last week. Warren’s company, Energy Transfer, sued the activists following months long protests that blocked his firm’s Dakota Access Pipeline. Greenpeace said it only played a supporting role in the protest, but the lawsuit blames the group for a construction delay that cost the company millions of dollars. Some Greenpeace officials fear Warren’s victory is likely, WSJ said, as it prepares contingency plans and continues to clash internally over what would constitute an acceptable settlement with Energy Transfer.
Different inputs – Although Canada’s Parliamentary Budget Office found a 1.3% lower impact to GDP as a result of carbon pricing relative to a no-policy scenario, think-tank Canadian Climate Institute (CCI) claims more moderate impacts ranging from 0.5-0.9%, it said in a blog post Friday. This is a result of differed inputs between CCI and PBO’s economic modelling, the think-tank added. PBO estimated the transportation sector to shrink 22.3% with carbon pricing, while CCI suggests a decline of 1% by 2030. Further, PBO projected a 21.5% smaller oil and gas sector, while CCI estimates a 4% smaller sector by 2030. CCI alleges that PBO overestimated industrial and household costs, due to insufficient characterisation of policy details, overlooking of regional differences, and underrepresentation of key technologies.
Washington spending – The Washington Department of Commerce announced Friday that it is awarding $37 mln to 46 clean energy projects, using revenue from the state’s Climate Commitment Act. The total is split between two grant programmes: 1) to support research, development, and demonstration of new technologies that improve the production, use, storage, and transportation of energy; and 2) to fund a wide variety of projects to promote clean energy and reduce GHG emissions, including activities that modernise the electric grid, promote solar energy, enhance community resilience, support low-income communities, and facilitate siting and permitting of new clean energy projects. The total includes about $2.3 mln in funding to two carbon capture projects. This includes $250,000 to study carbon capture at a natural gas combined cycle plant in Elma and $1.9 mln to Eastern Washington University for a modular pilot carbon capture system utilising a novel metal-organic framework.
EV expectations – The California Public Utilities Commission approved regulations Thursday that would give electric companies nearly nine years, in some cases, to connect EV charging stations to the power grid. However, this schedule only applies in cases where the power companies must build “upstream improvements” such as new distribution lines or substations. Electric companies would have to move quicker when not making such improvements. E&E reported the electric vehicle industry and environmental group as saying that this decision would dampen growth of the charging business at a crucial time, while at least one trade group has threatened to sue.
Less is more – NW Natural, Oregon’s largest natural gas company, has promoted renewable natural gas (RNG) as a green alternative to fossil fuels since 2017. RNG is produced from decomposing organic waste, such as from landfills and dairy farms, and was touted as a solution to help lower carbon emissions. NW Natural spent over $1 mln on advertising and lobbying to support this claim, helping pass legislation and creating campaigns like “Less We Can” to emphasise its environmental efforts. However, despite its promises, the company has delivered little RNG to customers and continues to supply mostly fossil natural gas. Internal documents and regulatory filings reveal that NW Natural’s efforts were largely aimed at preserving its fossil fuel business while giving the appearance of going green. The company has also fought legal battles and city regulations aimed at reducing natural gas use. Although NW Natural claims to be committed to renewable energy, its current supply of RNG makes up less than 1% of its gas, far below its stated goals. The company’s reliance on costly RNG sources from out-of-state meatpacking plants, along with regulatory challenges, has hindered its progress. Despite the marketing and legislative wins, NW Natural has yet to fulfil its green promises. (ProPublica)
ASIA PACIFIC
Yes to nuclear – South Korea’s Nuclear Safety and Security Commission this week approved the construction of two nuclear power plants, officially ending its anti-nuclear policy pursued by the previous Moon Jae-in administration, according to the Korea Economic Daily. The government also plans to build additional nuclear power plants – up to three new nuclear plants will be constructed by 2038 and South Korea’s first small modular reactors (SMRs) will be introduced in 2035. The country will need to generate 10.6 GW of energy by 2038, of which 4.4 GW is expected to come from nuclear power plants, according to the current basic plan for electricity supply and demand.
Net zero stores – Convenience store chain Seven-Eleven Japan has teamed up with Tokyo Gas and Tokyo Gas Engineering Solutions to promote the decarbonisation of its business activities and the entire supply chain, according to a company statement. The three companies have been working together to achieve net zero emissions for around 750 Seven-Eleven stores in the Kanto area through the purchase of solar power and the utilisation of environmental values. The alliance aims to expand the project to cover 2,000 stores in the future.
Under consideration – South Korea’s central bank has begun internal discussions about Scope 3 disclosure, ESG Economy reports. The Bank of Korea believes that if it takes the lead in strengthening climate disclosure, financial institutions or other companies will follow suit. However, the bank remains cautious about the issue, as the disclosure may involve sensitive information about foreign currency asset management. The central bank, urged to play a more active role in the country’s green transition, is also considering special loans to support the decarbonisation of smaller companies.
New network – Griffith Asia Institute has announced it will establish a new green energy network to connect Asian economies with China. The Green Energy Network will coordinate with Asian energy decision-makers in policy, finance, and industry to navigate complex negotiations, and build capacity to engage with China, it said in an statement. Griffith estimated energy demand in the region to grow 3% annually, requiring a significant transformation of energy systems throughout Asia to achieve net zero emissions by 2050. The network builds on close partnerships with other regional institutions, including Indonesia’s Institute of Essential Services Reform, the Pakistan China Institute, and Climate Smart Ventures to begin work in the pilot phase with stakeholders.
Adaro out – One of Indonesia’s coal miners plans to sell off an asset valued at just under $2.5 billion, Bloomberg reported this week. PT Adaro Energy Indonesia plans to offload its 99.9% stake in Adaro Andalan Indonesia, the news service reported the company telling the local bourse. Coal use is still rampant in Indonesia and ‘captive’ coal plants not part of the grid but instead used to power metals processing are not even part of its Just Energy Transition Plan, but large companies also see more value in energy transition minerals.
Floating solar – Coal dependent Indonesia is looking at expanding its renewable energy footprint. The nation already has good geothermal resources and a president-elect planning to pursue biofuels, but the Ministry of Energy and Natural Resources said Friday it is looking to use floating solar on its reservoirs also, which may offer 14 gigawatts of power to the grid across 257 dams. The Ministry of Public Works and Housing gave permission this week to increase solar capacity at several dams.
EMEA
“Absurd” demand – NGO Transport & Environment (T&E) called the request by the European car industry association ACEA to invoke a crisis clause to delay emissions targets “absurd”. In the leak, attained by Bloomberg, car manufacturers asked the European Commission to resort to article 122 in the EU treaties – last used for the Ukraine was and the COvid pandemic – to delay the 2025 car CO2 targets by two years. The EU CO2 standard became law in 2019 and gives manufacturers until the end of 2025 to comply. They can comply by increasing sales of battery electric and hybrid vehicles next year.
A helping hand for the farmers – The European Commission today authorised EU member states to pay higher advances of Common Agriculture Policy (CAP) funds to agricultural producers, thus helping to address liquidity problems. They will now be able to receive up to 70% of their direct payments in advance as of Oct. 16, compared with 50% currently. Earlier this year, some 500 tractors descended in Brussels on to protest against green regulations and EU bureaucracy ahead of the European elections on June 6-9. The European Commission bowed to the pressure and put forward a last-minute reform of the Common Agricultural Policy (CAP) that cuts back on green requirements for the sector. The mini-reform was approved in March by EU farm ministers, to the dismay of environmental groups.
Stop brining – Amsterdam-based startup Brineworks has secured $2.2 mln in funding, led by VC firm Pale blue dot, TechEU reports. Brineworks’ seawater electrolyser enables CO2 extraction with its high-efficiency design, while co-producing green hydrogen (H2) at a low cost, it claims. Its dual-output process also sets a new standard by being able to offer CO2 extraction at under $100 per tonne.
SCIENCE & TECH
Global cooling – A British government science agency, the Advanced Research and Invention Agency (ARIA), is to provide some £57 million to researchers to researchers to explore ways to artificially cool the planet, reported The New York Times. It is among the largest single financing packages towards “solar geoengineering” research, and it will fund several types of solar geoengineering. Options include injecting aerosols like sulfur dioxide into the stratosphere, or shooting sea-salt aerosols into low-lying cloud areas to reflect sunlight away from the Earth.
AND FINALLY…
Desperate times – After a record-breaking year of wildfires in 2023, the demand for specialised firefighting aircraft, particularly the amphibious Canadair plane, has surged, Bloomberg reports. The aircraft, renowned for its ability to scoop water in 12 seconds and drop it over fires, is seen as crucial in combating increasingly intense wildfires caused by climate change. De Havilland Aircraft of Canada, which now produces the plane, recently secured an order for 22 new firefighting planes from the EU, marking the first production since the aircraft was discontinued in 2015. The EU’s commitment to expanding its firefighting fleet comes amid worsening wildfires, with countries like Greece, Turkey, and Canada facing severe blazes. The Canadair, or its successor the DHC-515, is highly valued for its manoeuvrability, speed, and ability to refill quickly, making it indispensable during wildfire outbreaks. De Havilland expects demand for these aircraft to increase as climate change prolongs fire seasons and older planes need replacing. The EU’s decision to order these planes highlights the growing need for more aerial firefighting resources as fires become more frequent and destructive. Currently, 160 Canadairs are in operation worldwide, but experts predict further competition in the market as wildfires worsen globally.
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