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TOP STORIES
POLL: Analysts predict record rebound in EU ETS emissions in 2021
Verified emissions under the EU ETS likely rose by a record 8.3% last year, according to a poll of analysts, with output rebounding from the pandemic-induced drop in 2020 as utilities burned more coal and the European economy recovered.
ANALYSIS: China’s uphill battle to rid its carbon market of bad data
China has vowed to put an end to fake and misleading data in its domestic carbon market, but market participants say officials face a difficult task as bad actors simply have no incentive to stop.
EMEA
Think-tank calls for €100 bln EU fund to end reliance on Russian gas by 2027
The EU could slash gas demand in five years by massively scaling up renewables and energy efficiency supported by a new €100 billion fund, a think-tank said on Thursday as Germany considers suspending its coal phaseout and EU leaders meet for talks on how to ramp up pressure on Moscow.
Euro Markets: EUAs break out of tight range amid late surge of buying amid poor liquidity
EUAs broke out of a tight range late on Thursday as determined buying drove the market up by more than €1.50 during the settlement period, while energy markets also rose as participants expressed concern that soaring prices have reduced traders’ ability to take on new positions amid high exchange margins.
After EU rejection, Norway carbon capture plant catches fresh momentum
Oslo’s municipality has secured financing for the Klemetsrud waste-to-energy carbon capture plant, spurring fresh optimism for a project denied EU funding as a debate looms on carbon removal credits.
AMERICAS
NA Markets: CCAs search for direction as market reprices volatility, RGGI erases early-week losses
California Carbon Allowance (CCA) prices meandered this week as spread rates widened and traders repriced volatility in the options market, while RGGI Allowance (RGA) values regained nearly all of their losses suffered during an early-week plunge.
LCFS Market: California price plunge prolongs as $110 comes into view
The unravelling of California Low Carbon Fuel Standard (LCFS) credit values extended into this week, as traders continued to point to a lack of bid-side support from obligated parties amid a flood of renewable diesel (RD) coming into the state.
Brokers Evolution Markets name new CEO in executive team shake-up
Evolution Markets has appointed a new CEO, it said Thursday, as the environmental and energy brokers announced a series of changes to its executive team.
ASIA PACIFIC
Offset surrender rises slightly under Australia’s Safeguard Mechanism
The number of carbon credits surrendered under Australia’s Safeguard Mechanism rose moderately in FY2020-21, regulator data showed Thursday, though the vast majority of the nation’s biggest emitters remain untroubled by the programme.
Major NZ emitter sees large cut in free carbon allowances
One of the biggest industrial facilities in New Zealand’s emissions trading scheme will have most of its free NZUs cut, starting from 2021, the government announced Thursday.
VOLUNTARY
TotalEnergies confirms role for nature-based credits in near-term climate plans
French oil major TotalEnergies intends to source 100 million nature-based carbon credits by 2030 as part of its plans to offset its Scope 1 and 2 residual emissions, the company said Thursday.
Nasdaq launches price indexes at recently acquired carbon removal platform
Nasdaq has launched three commodity price reference indexes in the world’s first move to track the price of removing CO2 from the atmosphere, the US-headquartered exchange operator announced on Thursday.
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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
Brussels binge – US President Joe Biden and other world leaders convened in Brussels on Thursday for three back-to-back summits on Russia’s war against Ukraine: for NATO, the G7, and with Biden invited to take part in part of the European Council summit of EU leaders. The G7 agreed to take “further steps to reduce our reliance on Russian energy, and will work together to this end” while securing “alternative and sustainable supplies”. The G7 said the “crisis reinforces our determination to meet the goals of the Paris agreement and of the Glasgow climate pact and limit the rise in global temperatures to 1.5C, by accelerating reduction of our reliance on fossil fuels and our transition to clean energy”. The EU leaders’ discussion is set to continue into Friday. Separately, a political deal to be announced Friday between the US and the EU will pave the way for additional imports of LNG from the US to help the bloc replace Russian imports of the fuel, Bloomberg reported. LNG imports from Russia, the EU’s biggest energy supplier, stood at around 14-18 bln cubic meters annually in the past years. The EU-US deal will provide a political platform for commercial agreements that will need to follow for shipments to begin. The 27-nation bloc is aiming to replace this year nearly two-thirds of its total gas imports from Russia, which amounted to 155 bcm last year, after the war waged by President Vladimir Putin forced an unprecedented re-think of the bloc’s energy strategy.
It’s all about trust – The implementation of the Paris Agreement and its increasing requirements for national reporting and review arrangements is challenged by states’ unwillingness to commit to transparency, according to a study by the Finnish Institute of International Affairs (FIIA). “Most countries have always been reluctant to see their climate actions subject to any kind of international oversight”, said one co-author, Senior Research Fellow Romain Weikmans. “The politics of transparency have been conflictual from the start of the UN climate regime 30 years ago.” According to the research, the performance of countries in the UNFCCC transparency requirements is not necessarily improving over time. The new reporting obligations within the “Enhanced Transparency Framework”, to be implemented by 2024 in accordance with Paris, are thus likely to face difficulties. “In order to make the framework work, there is a need to hold the political attention of major powers not only in the negotiations phase but also in the implementation process”, says Antto Vihma, study co-author and research professor at FIIA. The importance of the UNFCCC reporting and review requirements lies in the enhancement of accountability, mutual trust, and higher level of ambition that could lead to further climate actions, FIIA added.
AMERICAS
Cash back – The value of carbon-price rebate cheques from the Canadian federal government will jump 66% in Ontario and 71% in Manitoba this year, to make up for too-small rebates the last two years, the National Observer reports. The second annual report on federal carbon pricing, which was tabled in the House of Commons this week, shows Canada collected more than C$4.2 bln in carbon levies on consumers and small businesses in 2020-21 when the carbon price was C$40/tonne of CO2e. Canada’s carbon pricing policy is designed to return 90% of revenues to households in provinces where the federal system is in place. Rebates will also rise in Ontario and Saskatchewan, the other two provinces where the federal policy applies. For the first time starting in July, payments will come quarterly, rather than hidden as a lump sum in annual tax-return deposits. Carbon-price backers say this will make the money more visible to Canadians. For a family of four, the annual payments for this fiscal year will be C$745 in Ontario, C$832 in Manitoba, C$1,101 in Saskatchewan and C$1,079 in Alberta. Carbon levy revenues are higher in provinces that rely more on coal and natural gas for electricity, so in turn the incentive payments to those provinces are higher. On Apr. 1, Canada’s carbon price will rise to C$50 per tonne and is then slated to increase by $15 per tonne each year reaching C$170 in 2030. At C$50, the carbon price will then add 11 Canadian cents to each litre of gasoline.
Oil sands to the rescue – Canada’s natural resources minister Jonathan Wilkinson announced on Thursday that Canada will hike oil and gas exports to help ease the global energy crunch exacerbated by Russia’s invasion of Ukraine one month ago. “European leaders have been clear: their short-term focus is on eliminating their reliance on Russian oil and gas, while they shift as rapidly as possible to renewables and clean hydrogen,” Wilkinson said in a statement. “Our European friends and allies need Canada and others to step up,” he added. Canadian industry will look to incrementally increase its oil and gas exports in 2022 by up to 300,000 barrels per day – 200,000 bbl/day of oil and up to 100,000 BOE/day of natural gas. The announcement comes less than a week before the federal government is expected to release its 2030 emissions reduction plan that it had originally said would define strict oil and gas sector emissions caps.
FERC shirks – US regulators on Thursday delayed requirements to consider GHG emissions before approvals of gas projects, after lawmakers complained the policy would harm the industry just when European allies need gas due to the crisis in Ukraine. Federal Energy Regulatory Commission (FERC) Chairman Richard Glick said that two guidelines the panel approved last month to consider GHG, environmental justice and landowner issues before approving liquefied natural gas terminals and other gas projects would now be considered “drafts.” Under the new designation, the draft guidelines on projects will not apply to pending projects until FERC issues any final guidance, the panel said. Comments on the guidelines will be due by April 25, with reply comments due on May 25. (Reuters)
Transformation fund – Krane Funds Advisors, an asset management firm known for its exchange-traded funds (ETFs), has launched the KraneShares Global Carbon Transformation ETF (ticker: KGHG). The ETF, listed Mar. 16 on the New York Stock Exchange, will focus on companies in traditionally high emitting industries that are proactively focused on decarbonisation.
ASIA PACIFIC
Casting the net – The Hong Kong stock exchange, HKEX, has signed an MoU with the China Emissions Exchange in Guangzhou to explore the possibility of developing a voluntary emissions trading programme in the Greater Bay area, covering Hong Kong, Macao, and mainland China’s Guangdong province, they announced Thursday. That follows a similar MoU HKEX signed last year with the Guangdong Futures Exchange. A number of players are looking for carbon opportunities in the capital-strong and densely populated Greater Bay region, though companies are waiting for regulators in the various jurisdictions to clarify how they might be able to proceed.
Green partnership – Steelmaker ArcelorMittal on Tuesday announced a renewable energy partnership in India with Greenko Group as part of its strategy to reduce its carbon footprint by going green, Livemint reports. Under the alliance, ArcelorMittal will invest A$600 mln to own and fund a 975 MW renewable energy project in Andhra Pradesh. The project will leverage a hydro pumped storage plant to provide continuous green energy to ArcelorMittal Nippon Steel India. The idea is to use cheap green power during off-peak hours to raise water to a height and then release it into a lower reservoir to generate power when there is more demand.
Finance failure – Banks in Asia are “falling short” when it comes to meeting global pledges to tackle climate change and aligning with the decarbonisation aims of their countries, according to a study published on Wednesday, Straits Times reports. Nearly 200 countries signed a pact in Glasgow last year calling on banks and financial institutions across the world to mobilise more finance to help achieve global climate goals and to seek innovative ways to pay for climate adaptation. But a review of 32 banks throughout East and Southeast Asia showed that none had made any clear commitments or adequate implementation plans to meet the goals of the Paris climate agreement, according to Asia Research & Engagement, a Singapore-based environment group.
EMEA
Food comes first – European Commission has this week unveiled plans to address agricultural concerns spurred by the Ukraine crisis, for instance by growing more food internally, including on fields that farmers usually set aside for nature restoration, and doling out €500 mln in EU crisis funds to compensate for rising fertiliser prices, which can be topped up by national governments. By slamming the handbrake on green rules, planting as much food as possible and splashing the cash, the EU hopes to avert the worst economic effects at home — but also to help prop up Ukraine’s creaking food system and ease the struggles of people facing starvation further afield, Politico reported.
VOLUNTARY
Harvest time – Offset standard developer and manager Verra on Wednesday announced a public consultation on the Methodology for Improved Forest Management Through Targeted, Short-Term Harvest Deferral under its VCS programme. The methodology, developed by San Francisco-based forestry offset marketplace NCX, enables the quantification of GHG reductions from deferring harvests for a specified time, relies on a performance method for demonstrating additionality and selecting the crediting baseline. Verra will host a public webinar on the methodology Mar. 28 at 1100 Eastern time (1500 GMT/1600 BST), and the public consultation is open until Apr. 22.
AND FINALLY…
Bleak leaks – A pollution survey using sensors on small airplanes to detect methane emissions across a major US oil and natural gas production zone points to greater releases of the potent climate-warming gas than previous estimated by other methods, according to results published Wednesday. Underwritten by philanthropists and the fossil fuel industry, the study examined emissions from Oct. 2018 through Jan. 2020 across New Mexico’s portion of the Permian Basin, one of the world’s largest sources of oil and natural gas that extends into West Texas. The study estimated that methane emissions are equivalent to roughly 9% of the overall gas production in the surveyed area. That’s more than double the rate in several previous studies of the Permian Basin and national estimates by the US government of natural gas lost to leaks and releases. (AP)
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