Newsletters > CP Daily: Wednesday March 16, 2022

CP Daily: Wednesday March 16, 2022

Published 01:14 on March 17, 2022  /  Last updated at 01:14 on March 17, 2022  / /  Newsletters

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

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TOP STORY

Virginia crafts emergency regulation to break RGGI linkage

Virginia Governor Glenn Youngkin (R) on Tuesday released the draft of an emergency regulation that would rescind the state’s RGGI-linked cap-and-trade programme, a move he said was necessary because the power sector scheme is deleteriously impacting ratepayers.

ASIA PACIFIC

SK Market: Tepid interest in Korean CO2 auction as prices fall to 7-mth lows

South Korea sold just over a quarter of the allowances on offer at Wednesday’s monthly carbon sale, as auction and spot KAU prices both fell to their lowest levels in over seven months.

New Zealand auction clears at NZ$70, releases most of cost containment reserve

New Zealand’s first carbon allowance auction of the year cleared at NZ$70 ($47.37), with almost 80% of the 2022 cost containment reserve (CCR) released.

Australian startup claims major breakthrough in green hydrogen technology cost cuts

An Australian hydrogen technology outfit has developed a more efficient way of producing renewable-based hydrogen with electrolysis that could see the green fuel produced competitively at commercial scale, the company, Hysata, claimed on Wednesday.

VOLUNTARY

Integrity Council pushes back timelines on guidance to ensure quality voluntary carbon offsets

The private-sector-led Integrity Council for the Voluntary Carbon Market (ICVCM) firmed up its timelines on Wednesday for the long-awaited release of its new standards that it hopes will set a benchmark for carbon offset quality.

Climate Impact X launches platform for companies to navigate VCM

Singapore-based Climate Impact X (CIX) has launched a digital platform for businesses and carbon project suppliers to list, discover, compare, buy, and retire quality carbon credits, the exchange announced on Wednesday.

C-Quest Capital secures funding for Southeast Asia cookstove roll-out

Cookstove project developer C-Quest Capital has secured funding from two Singapore-based organisations to enable a large-scale expansion of its offset project portfolio across four Southeast Asian nations.

Agoro Carbon Alliance to split from parent company Yara

US-based agricultural carbon offset firm Agoro Carbon Alliance on Wednesday announced it will be officially carved out from Norwegian fertiliser company Yara.

EMEA

Euro Markets: EUAs lifted on optimistic Russia-Ukraine news

EUAs received a boost Wednesday from news that ceasefire talks with Russia and Ukraine may be edging towards a compromise.

Energy efficiency measures could deliver rapid cut to UK gas burn, says think-tank

The UK could reduce its projected gas burn by 25 TWh this year and slash its Russian gas imports by 80% if it swiftly rolled out nine energy efficiency measures, a climate think-tank proposed on Wednesday, moves that would also significantly cut UK carbon allowance (UKA) demand.

EU approves indirect ETS cost compensation plans by Spain, Czechia

The European Commission on Wednesday approved plans by Spain and Czechia to compensate their ETS-covered industries for indirect costs caused by power producers passing on the cost of paying for their carbon allowances.

OMV spells out full-scope net zero pledge with 2050 phaseout of oil and gas

Austria’s OMV has unveiled a net zero strategy across all emissions scopes that will see it cease oil and gas production by 2050, prioritising carbon capture and storage (CCS) and other tech-based portfolio changes to meet the goal, the company said on Wednesday.

AMERICAS

LCFS Market: California prices drop further into $120s as renewable diesel margins come into question

California Low Carbon Fuel Standard (LCFS) credit values exacerbated their most recent weeks-long slide on Wednesday as traders wondered what influence worsening renewable diesel (RD) production margins might have on the programme.

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CONFERENCES

North American Carbon World (NACW) 2022 – Apr. 6-8 in Anaheim, California – presented by the Climate Action Reserve: Learn, collaborate, and network on carbon markets and climate policy at NACW, North America’s largest carbon event. NACW features comprehensive and up-to-date information, key thought leaders advancing innovative climate solutions, and the best networking opportunities with colleagues in the business, government, nonprofit, and academic sectors. NACW will dive into the status and future of North American carbon markets, climate policies, innovative solutions, natural climate solutions, net zero pledges and beyond, transportation and LCFS markets. www.nacwconference.com

City Week 2022: Resetting Priorities for a Better Future – Apr. 25-27 at London Guildhall: Now in its 12th year, City Week is the premier gathering of the international financial services community. Organised in partnership with the UK Government and leading City institutions, City Week brings together industry leaders and policy makers from around the globe to consider the future of global financial markets. Each day will address a specific theme, with Day 1 focussing on “Meeting the climate change challenge – the role of financial services in achieving net zero”. www.cityweekuk.com

Reuters Events: Global Energy Transition 2022 – June 14-15 in New York City: The conference unites CEOs and changemakers from the energy, industrial, and government ecosystems to shed light on the defining issue of our time, and help companies meet a uniquely difficult challenge. Over two days and five critical themes, we will define the future of energy, inspire a decade of action, and prepare the sector for challenges still to come, with diverse voices from around the world bringing passion and expertise to deliver a new path forward. Find out more by visiting the website today: https://bit.ly/35H7cgb

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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

INTERNATIONAL

Pledging short – Nationally-determined contributions to the UN Paris Agreement would reduce GHG emissions by 9% in this decade – far short of the global goal of cutting emissions by nearly half by 2030, according to Columbia University’s Center on Global Energy Policy. The US and EU are on track to reduce emissions from 2015 levels by only 27% by 2030. Countries like China and India would actually see emissions rise by 10% through this decade. (Reuters)

Unlucky 13 – Energy costs are poised to hit an all-time high of more than 13% of global GDP this year as the price of keeping the world running surges. Primary energy expenditure as a share of output is set to double from 2021’s level of just 6.5%, according to analysis by consultancy Thunder Said Energy. Soaring commodity costs are pushing up inflation and adding to bills for households and industry alike. (Bloomberg)

Data drop – Startup company Corporate Carbon Database has launched a data platform on corporate climate metrics, featuring information on 26,800 facilities across 11,300 companies in 35 countries. The venture has been formed by Cedric Bleuez, who has expanded the Carbon Market Data platform that has long tracked EU ETS installations.

EMEA

Taxonomy rethink – Some 102 MEPs have urged Brussels to withdraw sustainable finance taxonomy plans to label energy investments in gas as green, saying this undermined Europe’s push to reduce reliance on Russian fossil fuels, Reuters reported. The letter was signed by representatives from five parliamentary groups, which together represent most of the European Parliament’s 705 lawmakers. However, few groups have a firm position, since opinion is split among members. Read Carbon Pulse’s report on the taxonomy proposal, which was published before Russia’s invasion of Ukraine and could still be rejected by a majority of MEPs or 20 of the EU’s 27 countries by July. (Reuters)

Banking on hydrogen – The European Clean Hydrogen Alliance has launched a call for project promoters among its members to present their ideas to the European Investment Ban (EIB). Promoters of electrolyser manufacturing and hydrogen production projects are invited to provide basic project information by Apr. 5 to the bank. EIB teams will then assess the information provided and select projects. Introductions are expected to be held from the end of April and will give project promoters the opportunity to present their projects in detail. The possibility of EIB advisory support will also be explored for eligible projects, according to a press release. Last week, the European Commission announced the REPowerEU Communication that included the doubling of the EU hydrogen production target and underlined the need to enhance manufacturing capabilities of equipment such as electrolysers.

Refilling the stocks – EU countries should immediately start refilling their gas storage facilities to prepare for next winter and provide a buffer against supply shocks, leaders will say at a summit next week, Euractiv reports. Russia’s invasion of Ukraine has prompted leaders from the EU’s 27 member countries to agree last week to end their reliance on Russian fossil fuels. Measures include ramping up LNG imports and speeding up renewable energy expansion. A total Russian phaseout will take years, however, so countries are also planning measures to mitigate potential disruptions to supply from Russia, which provides 40% of the EU’s gas, 27% of its oil imports and 46% of coal imports. “Refilling of gas storage across the Union should start now. Member states and the Commission will urgently coordinate measures necessary to ensure adequate levels of gas storage before the next winter,” said a draft of the conclusions for an EU leaders summit on March 24-25, the news website reported.

Searching for solar – Non-profit green search engine, Ecosia, has announced plans to invest $23 mln in solar energy platform start-up Zolar, and urged other businesses to follow suit and plough capital into renewables projects in a bid to boost Europe’s energy security following Russia’s invasion of Ukraine. In backing Zolar, a platform which aims to make solar panel installations more affordable for households, Ecosia said it would be better placed to further increase its investment in renewable energy capacity across Europe. The investment in Zolar is expected to help support the installation of solar panels on around 1,300 individual households, with each system absorbing an average of four tonnes of CO2 per year, according to Ecosia. (Business Green)

UK energy strategy – British Prime Minister Boris Johnson said that a new national energy strategy will be set out next week as Russia’s invasion of Ukraine continues to drive up energy prices, Reuters reports. “What Putin is doing in Ukraine is causing global uncertainty and a spike in the price of oil, that feeds through to the forecourts in the UK and everybody can see the effect of the increase in gas prices,” Johnson said during a visit to the middle east on Wednesday. He also stressed the need to double the pace of construction of wind farms, echoing an opinion piece published in a British newspaper on Tuesday that doubled down on the country’s net zero goals.

Swiss waste – The Swiss government and operators of household waste incineration plants have renewed an agreement that aims to reduce the industry’s CO2 emissions. The deal was signed between the government’s environment and energy department (DETEC) and the Swiss association of operators of waste treatment facilities (ASED) and replaces the prior deal signed in 2014 that expired at the end of 2021. Operators have now committed to commissioning carbon capture, storage, and utilisation (CCUS) facilities by 2030. The industry had successfully achieved the targets set as part of the previous agreement in reducing net annual CO2 emissions by 200,000 tonnes by 2020 relative to 2010 and by a total of 1 mln tonnes over the entire 2010-20 period. The new agreement obliges operators to commission at least one CCUS facility by 2030 that has a minimum nominal capacity of 100,000 tonnes of CO2 per year. As these plants do not fall within the scope of the EU ETS, to which the Swiss carbon trading system is linked, the Federal Council agreed with companies in the sector to set them targets for reducing CO2 emissions. In return, they are exempted from participating in the ETS.

Taxing times – The share of environmental taxes in Germany’s public revenues fell to a historic low last year and only covers a fraction of environmental costs, said a report by think-tank Green Budget Germany (FÖS). “Contrary to the myth that environmental and climate protection makes ‘everything more expensive’, the share of environmental taxes in public revenues has been declining for almost two decades. In 2021, it was at a historic low of 3.7%,” the researchers said, adding that they used a narrow definition that included energy taxes on motor and heating fuels, electricity tax, motor vehicle tax, and air traffic tax. All other EU countries have a higher share of environmental taxes except Luxembourg. Polluters currently pay less than 20% of the real costs of damage to the environment and health through environmental taxes, while the general public, other countries, and future generations shoulder more than 80%, FÖS said. (Clean Energy Wire)

Standard fare – Top African lender Standard Bank’s new fossil fuel strategy did not guarantee emissions reductions or rule out backing projects such as a planned Ugandan oil pipeline, Reuters reported. It did ban funding for new or expanding coal plants, though said new mines would be possible in limited circumstances. New oil-fired plants or expansion plans would also only be possible in limited circumstances and it would reduce loans for oil exploration and production by 5% by 2030. It said its exposure to gas would grow to 0.91% of its loan book by 2030, before falling to 0.4% by mid-century. Meanwhile, Britain’s HSBC has toughened its climate commitments and pledged greater openness about its progress after pressure from activists who said they would now withdraw a resolution slated for its next shareholder meeting. HSBC said it would cut financing to the fossil fuel industry in line with the 1.5C warming goal and from next year it would publish details of how it is implementing its goals.

ASIA PACIFIC

Hydrogen build – French engineering company Technip Energies has inked an agreement aimed at accelerating the development of green hydrogen in India, Upstream reports. Technip has signed a memorandum of understanding with Indian renewable-energy player Greenko Group’s ZeroC subsidiary to explore green hydrogen project development opportunities. The newly formed partnership will explore green hydrogen opportunities across multiple sectors, including India’s refining, petrochemicals, fertiliser, chemicals, and power plants.

Soil solution – More than A$54 mln has been set aside for farmers to access low-cost soil testing in exchange for sharing their data with the Australian government, as it builds a national soil database, Queensland Country Life reports. Farmers and land managers can apply for soil testing grants of up to A$10,000, along with assistance from Commonwealth government-funded soil extension officers to interpret their test results. Agriculture Minister David Littleproud said the two-year programme would help Australian farmers improve their agricultural productivity and participate in soil carbon projects under the Emissions Reduction Fund. “Soil health is critical to farm performance, so sampling supported under the programme will show up in the farmers’ bottom line,” Mr Littleproud said. “Soil testing to participate in carbon reduction programmes can be expensive but this programme will help farmers be part of the solution to climate change,” he added. The cost of testing soil has long been a barrier to farmers wishing to enhance their soil or take part in carbon projects.

Triggered – Japan has begun preparations to implement a trigger clause for its gasoline tax, which will lower the levy as long as crude oil prices remain high amid Russia’s invasion of Ukraine, according to the Yomiuri Shimbun newspaper. Such a trigger has been in place in the past, but was removed in 2011 in order to secure funds for reconstruction after the earthquake and Fukushima nuclear disaster.

AMERICAS

Bloom doom – Fossil fuel interests and Sen. Joe Manchin dashed the hopes of President Joe Biden’s nominee for a top regulatory post at the US Federal Reserve, calling Sarah Bloom Raskin insufficiently committed to an “all-of-the-above energy policy.” Raskin drew criticism for arguing that climate change is a threat to financial stability, and Republican senators fretted Raskin would discourage banks from lending money to fossil fuel companies. The withdrawal clears the way for Senate action on four other nominations, including a second term as Fed chairman for Jerome Powell. “Addressing the transition of the economy as it grapples with the effects of climate change is critical to the future of American prosperity,” Raskin wrote the president in withdrawing her nomination. “I stand with the vast majority of financial regulators and central banks in the United States and abroad recognising these facts.” (Climate Nexus)

HFC halt – Since the US EPA’s hydrofluorocarbon programme took effect on Jan. 1, Customs and Border Patrol has caught and re-exported illegal HFC shipments equivalent to 530,000 tCO2, the agency announced on Tuesday. President Biden’s administration paired the congressionally mandated HFC phase-down with an import enforcement task force after studying illegal HFC trade in Europe. (Politico)

VOLUNTARY

Follow the money – One of Canada’s largest timber companies is setting aside 40,000 hectares of British Columbia coastal forests – woodlands three times larger than the city of Vancouver – after concluding it can make more money from letting trees grow and selling carbon credits than from logging. On Wednesday, Mosaic Forest Management announced it will defer the harvesting of “old forests” on Vancouver Island and Haida Gwaii for at least 25 years, opting instead to sell nature-based carbon credits to companies that want to offset a portion of their GHG emissions. The Vancouver-based company is halting logging on 7% of its timberlands, calling it the largest project of its kind in Canada. Mosaic estimates the programme, which it calls the BigCoast Forest Climate Initiative, will generate between C$100-300 mln, based on current prices for carbon credits. In an interview, Mosaic chief forester Domenico Iannidinardo said: “We expect to make at least as much from the BigCoast initiative as we would earn from harvesting these forests.” Mosaic oversees forest holdings for two BC companies – TimberWest Forest Corp. and Island Timberlands L.P. – which are owned by three large pension plans: the British Columbia Investment Management Corp., the Public Sector Pension Investment Board, and Alberta Investment Management Corp. (Globe & Mail)

Greenstream – Reforestation and carbon offset company Dutch Green Business Group (DGB) on Tuesday announced an agreement with brokerage Emstream and its wholesale voluntary carbon marketplace Emsurge Carbon as a primary route to market its voluntary emissions reductions (VERs). DGB earlier this month announced it had completed its first large VER offtake agreement for 126,300 VERs at a contract price of $10/tonne, with the company having a project pipeline capable of originating 13 mln credits.

SCIENCE & TECH

Pollen problems – Pollen levels could triple in some places as the world warms, and allergy season will start more than a month earlier and be far more intense, new research shows. Pollen season in the US used to start around St. Patrick’s Day, but now often starts around Valentine’s Day as a warming climate prompts plants to bloom earlier and keeps them blooming later, releasing more pollen. Increased levels of CO2 from burning fossil fuels also helps plants produce more pollen, study co-author and University of Michigan professor Allison Steiner told ABC News. By the end of the century, pollen season could begin as much as 40 days earlier than it has in recent decades and annual pollen counts could climb by up to 250%. (Climate Nexus)

AND FINALLY…

Here comes the sun – “Milestones may be arbitrary, but the morale boost they provide is not,” writes PV magazine, in light of its expectation that the world has now installed enough solar panels to generate 1 TW of electricity directly from the sun. The calculation that the world had now hit 1,000 GW of solar capacity is based on an estimation that 183 GW was installed in 2021, and there was already 788 GW of capacity in place at the end of 2020. These two values total 971 GW of installed solar. PV magazine has since calculated that in 2022 the world had now also built the remaining 29 GW required to breach the 1 TW mark. The largest contributor to this capacity is China, that reached 100 GW in late 2016 and has expanded capacity at a rapid rate since. Meanwhile, the EU hit 100 GW in 2015, and the US hit 100 GW in the first quarter of 2021. These three regions represent more than half of the world’s installed solar capacity.

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