Newsletters > CP Daily: Monday January 31, 2022

CP Daily: Monday January 31, 2022

Published 01:20 on February 1, 2022  /  Last updated at 01:20 on February 1, 2022  / Carbon Pulse /  Newsletters

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

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TOP STORY

Global carbon market value soars more than 2.5 times in 2021 to €760 bln -analysts

The world’s carbon markets grew by more than 2.5 times in 2021 to reach a turnover of €760 billion compared to €288 bln in 2020, as prices in six of the seven main compliance schemes rose by an average 225%, according to a report issued on Monday.

AMERICAS

RGGI emissions vault over 10% in Q4 as 2021 output exceeds adjusted cap

RGGI CO2 output jumped higher than both 2019 and 2020 levels in the fourth quarter of last year, with emissions rising in nearly every state in the power sector cap-and-trade programme, official data showed on Monday.

California LCFS credit bank jumps 5% in Q3 as surplus hits three-year high

The California Low Carbon Fuel Standard (LCFS) registered its largest quarterly credit build in almost five years over July-Sep. 2021, as renewable diesel volume beat analysts’ predictions and renewable natural gas and electric vehicle credit growth kept up their torrid pace.

EMEA

Removing doubt: EU debate kicks off on carbon removals certifications

How the EU measures, certifies, and uses carbon removal outcomes under its climate policy package is up for debate until the end of the year, a conference heard on Monday as experts explored ways of integrating removal credits into the EU ETS and working with voluntary market standards boards.

Euro Markets: EUAs claw back early losses despite weakness in prompt gas

EUAs recovered early losses on Monday, as sentiment rallied after the weakest auction of the year to date, while gas markets slid on an uncertain weather outlook as tensions with Russia appeared to ease.

Ryanair posts highest demand since 2019 in Q4, advances EUA hedging

Ryanair saw its passenger rate jump almost 300% year-on-year to 31 million in Q4 2021, its highest quarterly total since 2019 despite the re-imposition of travel restrictions due to the Omicron coronavirus variant, the airline said in financial results on Monday.

ASIA PACIFIC

Australian carbon body warns against government offset veto power

A proposal to let the agriculture ministry veto some offset projects deemed to have unintended consequences for rural Australia could destabilise the nation’s carbon market, according to a chief industry body.

Australian oil and gas lobby group calls for tax and policy incentives to boost CCS, hydrogen

APPEA, Australia’s oil and gas peak body, on Monday called for the federal government to provide tax and other incentives to secure investment in CCS and fossil fuel-based hydrogen to help meet the country’s recently set net zero emissions goals.

VOLUNTARY

Tech firm raids BCT pool ahead of nature-based carbon token launch

The firm responsible for minting the majority of voluntary carbon credits as on-chain tokens has over the past few days without warning withdrawn a significant amount of nature-based BCT units ahead of launching a separate token, seeking to prevent speculators from crashing the price of the new credit.

VCM Report: Nature-based VER prices ease from record highs but remain robust

Standardised nature-based voluntary emissions reduction (VER) prices eased back from record levels this week as some participants flagged a potential pause in the market’s consistent upward rally.

ICYM

EXCLUSIVE: Rising EU ETS emissions point to urgent need for a dynamic pricing paradigm -Andurand

*Now available to non-subscribers* – With high energy prices dominating the political agenda and politicians in certain EU member states training their sights on the bloc’s carbon market, there is one salient fact being missed in all the hubbub: ETS emissions likely increased by 6% in 2021, and are set to rise further again this year. Self-evidently, this means that the price of EUAs is not yet high enough to drive structural decarbonisation, write Pierre Andurand and Mark Lewis in an exclusive piece for Carbon Pulse.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Carbon Pulse has teamed up with CME Group to provide its clients with regular updates on the global carbon markets. Check out these briefs for the latest insights on pressing trends and events impacting markets, published every other week. Registration required

EMEA

Storm Malik – UK windfarms generated a record amount of renewable electricity over the weekend as Storm Malik battered parts of Scotland and northern England. Wind speeds of up to 100 mph helped wind power generation rise to a provisional all-time high of almost 20 GW – or more than half the UK’s electricity – according to data from National Grid. The winter storms have followed a summer of low wind power generation across the UK and Europe, which caused increased use of gas-fired power plants during a global supply shortfall. The high winds helped to ease power prices. (Guardian)

Bills, bills, bills – Germany’s new coalition government is pressing ahead with plans to quickly end the support paid to renewable energy operators that comes directly from household bills. The decision is a bid to help households in times of rising energy costs. “If the coalition agrees, then I would make it financially possible for the renewables levy to be eliminated in the middle of the year,” finance minister Christian Lindner (FDP) said in an interview with news magazine Der Spiegel. He signalled that an end to the renewables surcharge could come earlier than planned. Both the climate minister Robert Habeck (Green Party) and the Social Democrats’ (SPD) parliamentary group had proposed an earlier end to the levy that is currently due to be abolished as of Jan. 2023. Support to renewable energy operators will then be subsidised through the federal budget. This is estimated to save the average household around €300 per year. (Clean Energy Wire)

Blame game – Consumers reeling from soaring energy prices in Poland this winter are getting a new message from the government in their electric bills: the EU’s climate policy is responsible for more than half of the power production costs. Earlier this month, the Polish climate ministry mandated that the nation’s energy providers detail the impact of CO2 costs in invoices to households. While those bills don’t explicitly blame the EU, the cost breakdown suggests that the bloc’s rising prices for EUAs are falling on coal-dependent Poland. There’s also no mention of how the government used billions of euros in EU ETS revenues, which go to member states. (Bloomberg)

Out of sync – Energy taxation, carbon pricing policies, and fossil fuel subsidies must be aligned more closely if the EU wants to reach its 2030 climate targets, EU auditors said in a report published Monday. Under the EU’s current Energy Taxation Directive, polluting energy sources like coal may have a tax advantage compared to more carbon-efficient ones, according to the European Court of Auditors. “For instance, coal is taxed less than natural gas, and some fossil fuels are taxed significantly less than electricity,” ECA said in a statement. On average, coal is taxed €2.90/MWh while gas is taxed €7/MWh. Electricity, by comparison, is taxed €32.1/MWh, according to the report. Moreover, fossil fuel subsidies – such as low taxes on petrol and diesel – have remained constant over the last decade, despite commitments from the European Commission and some EU member states to phase them out. Overall, subsidies for fossil fuels amount to more than €55 bln per year and 15 EU member states spend more on fossil fuel subsidies than on renewable energy subsidies, the auditors noted – a figure which doesn’t take into account the financial support given to poor households during the ongoing gas crisis. And as the EU aims to more than halve its GHG emissions by the end of the decade, this kind of discrepancy cannot be allowed to continue, the report warns. (Euractiv)

ASIA PACIFIC

Dodgy accounting – US coal mining giant Peabody Energy has repeatedly submitted incorrect greenhouse gas emissions reports to the Australian government, prompting questions about the reliability of national climate data based on company assessments, The Guardian reports. Australia’s Clean Energy Regulator found Peabody had a history of filing inaccurate reports required under the National Greenhouse and Energy Reporting Act due to calculation errors, poor record-keeping and inconsistent data collection and analysis.

Green dollars – India’s green sector is demanding more funding to help nation meet its international commitments, Weather.com reports. Green groups in India have demanded an increased allocation and stricter compliance that would help usher in a better life for Indian citizens and help India meet its international commitments on climate change.

Mongolia hydrogen bid – Adelaide-headquartered Elixir Energy has announced it has achieved progress on multiple fronts for its proposed Gobi H2 green hydrogen project in Mongolia, including the signing of a memorandum of understanding (MoU) to support project finance, PV Magazine reports.

Victorian values – The Labor government in the Australian state of Victoria is taking the next step in meeting its 2050 target of net zero emissions by seeking independent expert advice on an interim emissions reduction target for 2035, the Victorian government announced. The minister for energy, the environment and climate change, Lily D’Ambrosio, announced on Monday the forming of the Interim Targets Independent Expert Panel – which will provide advice on recommended interim targets for reducing greenhouse gas emissions between 2031 and 2035.

AMERICAS

Clean cash – The British Columbia government on Monday announced 25 projects that will support the adoption of cleaner technologies and reduce emissions in the pulp and paper, mining, oil and gas, and other sectors as part of the CleanBC Industry Fund’s third round of investment. The CleanBC projects are supported by more than C$70 mln in provincial carbon tax revenues paid by industry and are part of the programme’s Emissions Performance stream. The third round of CleanBC Industry Fund projects are expected to reduce approximately 4.6 MtCO2e over the next decade, more than the first two rounds of which are expected to generate 1.4 MtCO2e in abatement.

Browned in the ground – An underground coal fire burning since the US President Chester Arthur’s administration could be linked to the Marshall Fire in Boulder County, Colorado, late last December, bringing renewed attention to the dangers posed by coal burning underground, the AP reports. At least 259 underground coal mine fires were burning in the US as of last September according to federal data, with possibly thousands more undocumented fires in unmined coal seams. The subterranean fires can be ignited in multiple ways and are often impossible to extinguish because they feed on the oxygen naturally present in coal itself. Burning coal seams emit toxic fumes and are becoming a greater potential danger as climate change, caused primarily by the extraction and combustion of fossil fuels, turns the vegetation above them into veritable tinder. The Marshall Fire – the urban firestorm that incinerated more than 1,000 homes and buildings and killed at least one person in late-Dec. 2021 – may have been started by an “impossible to extinguish” mine fire ignited in 1883. (Climate Nexus)

AND FINALLY…

Jet zero – A laboratory to grow algae for jet fuel has opened in Istanbul, as part of an EU-backed push to cut carbon emissions from flying, Climate Home reports. Ministers hope that Turkish Airlines will make its first biofuelled flight by the end of 2022, but others are sceptical that algae can make much of a dent in aviation emissions. The €6 mln demonstration project is funded by the EU and Turkish government and will grow simple water-based plants, known as algae, in outdoor ponds and indoor tubes, and refine them into fuel and other products. Aviation is a notoriously difficult sector to clean up. Electric batteries, the main solution for the land-based transport sector, are heavy and not powerful enough to keep planes in the sky for long periods.

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