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TOP STORY
Boundaries increasingly blurred between voluntary and compliance markets as standards are pending
The difference between the voluntary carbon market (VCM) and compliance carbon markets will continue to blur, speakers told a conference on Wednesday, ahead of hotly-anticipated standards to be published later this year.
VOLUNTARY
Verra moves to immediately halt tokenisation of retired offsets, will explore alternative
Voluntary carbon standard manager Verra will with immediate effect stop companies like Toucan Protocol from tokenising carbon credits that have been retired, and instead explore an alternative, it said Wednesday.
Tokenisation of carbon credits needs higher standards, experts say
Tokenisation and the use of blockchain is a double-edged sword that needs high water marks to provide integrity in carbon markets, a conference heard Wednesday following earlier news that Verra stopped crypto companies from tokenising credits that have already been retired.
ASIA PACIFIC
Quad countries to support Article 6, carbon markets in the Indo-Pacific
The four nations known as the Quad countries – Australia, India, Japan, and the US – will launch a mission to help the Indo-Pacific region implement Article 6 of the Paris Agreement while backing high-quality carbon markets.
Study urges China to reform ETS to drive deeper CO2 cuts, reduce costs
Gradually introducing permit auctioning and transitioning to a cap-and-trade system from the current intensity-based approach are some of the measures China can put in place to achieve deeper carbon cuts from its ETS at a lower cost, according to a study released Wednesday.
Australian seaweed to cut cow burps soon, but farmers will have to wait for ACCUs
The first use of Asparigopsis – a type of seaweed endemic to Australia – to reduce methane emissions in livestock could occur in a matter of months, however it may be some time before farmers can begin generating Australian Carbon Credits Units (ACCUs) for it.
Singapore’s CIX announces first carbon credit auction in Q3 for three projects
Climate Impact X (CIX) has formed a partnership with a UK-based carbon finance firm to hold its first auction for nature-based carbon credits, the newly-formed Singapore-based carbon exchange announced on Wednesday.
Originator Viridios Capital bolsters Asia-Pacific team with three hires
Carbon offset project originator and portfolio management firm Viridios Capital has filled three senior positions for the Asia-Pacific region.
AMERICAS
California offset issuance hits two-year low, while DEBs prices rise
California regulator ARB distributed the smallest number of compliance offsets this week since spring 2020, while traders reported credits tagged with in-state benefits were seeing increasingly higher values than out-of-state units.
EMEA
Euro Markets: EUAs little changed in thin trade as scarce buyers fail to retake technical level
EUA prices consolidated their gains from Tuesday after early strength, but failed to re-take a key technical level amid thin trading as participants eyed public holidays across much of Europe in the coming few days.
UK govt issues £27 mln in EU ETS non-compliance fines
The UK government has levied more than £27 million in new environmental fines, with the bulk related to compliance breaches under the EU ETS.
AVIATION
Use of biofuels for aviation will be a political decision, says minister
The pathway for decarbonising the aviation sector will be a political decision because of the lack of available biofuels, while public investment in infrastructure for alternative energies will require concrete evidence of emission reductions rather than “dreams”, an Italian minister told a conference Wednesday.
COMMENT
The EU’s MSR sale proposal – “Ooooh! Look at that cookie jar!”
The European Commission’s plan to bring roughly 200-250 million EUAs out of the Market Stability Reserve (MSR) and auction them to raise €20 billion to fund the bloc’s shift away from Russian energy has jolted the EU ETS, igniting “trust” concerns by market participants who liken the move to Brussels raising the EU’s climate cookie jar.
WE’RE HIRING!
Greater China Environmental Markets Correspondent, Carbon Pulse – Greater China
Carbon Pulse is seeking a Greater China Environmental Markets Correspondent.
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CONFERENCES
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
Coal curbs – G7 climate ministers will this week consider committing to phase out polluting coal-fuelled energy by 2030 and decarbonise their power sectors by 2035, according to a draft meeting communique seen by Reuters. The ministers are meeting in Berlin from Wednesday to Friday. There, they will attempt to agree on commitments to ensure their short-term response to soaring global energy prices and fuel supply fears does not derail longer term commitments to slash greenhouse gas emissions heating the planet.
EMEA
Ladies leading – Three women are to steer France’s new ‘super’ environment ministry: Ecological Transition Minister Amélie de Montchalin and Energy Transition Minister Agnès Pannier-Runacher will be working under newly-appointed Prime Minister Elisabeth Borne in charge of ‘ecological and energy planning’. Environmental policy will be among the priorities of re-elected French President Emmanuel Macron, who appointed former ecological transition minister Elisabeth Borne to head the entire government, entrusting her with “ecological and energy planning” – a slogan borrowed from radical-left leader Jean-Luc Mélenchon’s campaign. Former public transformation and service minister de Montchalin will be responsible for “the territorial implementation of ecological transition policies”, while former industry minister Pannier-Runacher will aim to “move away from fossil fuels.” (Euractiv)
Vote of confidence – TotalEnergies’ shareholders on Wednesday voted in favour of the French oil and gas company’s climate strategy to cut emissions from its fuel product sales by more than 30% by 2030, compared with 2015 at an annual meeting as protesters outside denounced the group’s environmental toll and its business in Russia. Support at 88.89% was down from 91.88% last year when shareholders voted in favour of the climate plan and approved a rebranding marking the company’s shift toward renewable energy. (Reuters)
Foot race – Bidders offering to implement offshore wind power projects with the lowest CO2 footprint could have an advantage in Germany’s future renewable power auctions that determine who gets to install new wind farms in the country’s territorial waters, according to a proposal by Germany’s council of federal states (Bundesrat). Due to rapidly dwindling costs for offshore wind power generation that saw many projects with zero-support bids emerge in recent years, regulators are looking for new ways to rank proposed projects in auctions. (Tagesspiegel Background, Clean Energy Wire)
ASIA PACIFIC
Carbon court – A legal application filed by Australia’s Indigenous groups in the Northern Territory and environmentalists to stop the Export-Import Bank of Korea (KEXIM) from funding a subsea gas pipeline for the Santos-led Barossa gas and LNG project has been dismissed by the Seoul Central District Court, NT Independent reports. The court ruled that it would not block loans on the project. Traditional landowners in the Northern Territory launched legal action in March against KEXIM and Korea Trade Insurance Corp (K-Sure) in the South Korean court to block part funding for a $4.7 bln Barossa gas project to be built by Santos in waters north of Darwin with South Korean energy company SK E&S as a major partner. Both KEXIM and K-Sure had delayed their consideration of the loans and guarantees after the action was taken.
Hydrogen plans – Japanese gas distributor Toho Gas plans to start delivering hydrogen produced from natural gas at a plant with an output capacity of 1.7 tonnes per day in Chita, central Japan’s Aichi prefecture, by 2024, Argus Media reports. This is the first step for Toho Gas to supply hydrogen to nearby areas, where demand from industrial users is predicted to rise. The company will start with the 1.7 tonnes per day plant and expand the capacity to 5 tonnes per day or more, depending on the demand in the area. The company is also exploring the possibility of using the plant as a hydrogen import terminal in the future.
AMERICAS
Full disclosure – The US federal government is planning to propose a rule requiring suppliers of goods and services to the federal government to disclose their GHG emissions. The proposal is part of the administration’s push toward net zero procurement by 2050, 100% zero emissions vehicle procurement by 2035, and 100% carbon free electricity by 2030 for the federal government. The GHG disclosure rule will be distinct, yet similar to the SEC’s March proposal that requires listed companies to report carbon emissions in their annual filings, Bloomberg Law reports.
Business as usual – 72% of Exxon shareholders backed the board in voting against most proposals tabled that would involve strategies to reduce fossil fuel sales in order to cut emissions from burning fossil fuel products or Scope 3 GHG emissions. More than 37% of investors voted for the company to provide a report on plastic production, while low carbon business planning received a mere 10.5% of the votes, Reuters reports. Better climate data analysis was the only proposal to receive investor backing.
VOLUNTARY
Capturing commitments – The First Movers Coalition (FMC) has garnered $300 mln in funding commitments from tech giants Microsoft and Salesforce to invest in technologies that remove CO2 from the air. This funding adds to last month’s $2 bln in commitments towards carbon removal technologies that the group had announced, which included a $200 mln pledge from Google parent company Alphabet. FMC aims to address carbon removal from hard to abate sectors such as aluminium, cement, and chemicals that contribute to a third of global emissions. (Bloomberg)
Growth spurt – Carbon offset ratings service BeZero has taken on £17 mln of capital between Sep. 2021 and March 2022 ahead of a full launch of its service after two years of development, the company said in a blog update. The company has grown from 45 to 95 people since December, including more than 50 research and ratings analysts.
Building investment – OGCI Climate Investments, a “specialist decarbonisation investor”, has today led an investment round of over £15 mln for Converge, a technology company accelerating decarbonisation in the construction sector with its intelligence platform fusing physical and construction data. ConstructionDNA, Converge’s construction optimisation AI platform, works with physical sensors located across construction sites to provide users with real-time data and actionable insights to improve efficiency and reduce emissions. Converge focused its initial efforts on concrete, which is responsible for 8% of all GHG emissions. ConstructionDNA’s AI-based concrete module is being used by world-leading contractors and ready-mix concrete suppliers. The flagship module predicts when concrete will reach strength with more than 95% confidence, speeding up build times by up to 30% and empowering the transition to carbon efficient concretes. Using the technology, ready-mix suppliers are reliably and safely optimizing their concrete mix designs to significantly reduce GHG emissions. With OGCI CI’s mission-aligned series A preferred stock financing, Converge’s ambition is to reduce average cement content in concrete by around 15%.
Lights, camera… – Carbon market associations IETA and ICROA are collaborating with ITN Productions to produce a news-style programme “Net Zero: The Integrity Pathway”. Anchored by author and presenter Claire Nasir from ITN’s London studios, the programme will educate on best practices in corporate GHG mitigation, including high-integrity carbon offsetting and insetting, and why a responsible approach to net zero considers avoiding, removing, and reducing emissions. It will raise awareness of best practices in carbon reduction and offsetting, showcase the organisations performing well in this area, and highlight the benefits and impacts these activities have to individuals and communities on the ground. The programme will also explore the difference between compliance markets and voluntary markets and the latest technological advances and innovations surrounding the trajectory to net zero. Featuring expert interviews, news items, and reporter-led sponsored editorial profiles from leading organisations filmed on location, the programme will launch in early Nov. 2022 and will be supported by an extensive campaign targeting IETA members and professional networks.
AND FINALLY…
Double Dutch – Environmental campaigners are suing the Dutch airline KLM over “greenwashing” adverts they say misleadingly promote the sustainability of flying. Lawyers from ClientEarth are supporting Fossielvrij NL, a Netherlands-based campaign group, to bring a claim that KLM’s ad campaigns give a false impression of the sustainability of its flights and its plans to address its impact on the climate. KLM’s campaign says it is on track to reach net zero carbon emissions by 2050, and that it plans to introduce hydrogen and electric planes and scale up the use of synthetic kerosene from 2035. The litigants claim KLM is violating European consumer law by misleading customers, as they say the aviation sector cannot reach net zero without limiting the overall number of flights. KLM received a rap on the knuckles over a separate marketing campaign using the line “Be a hero, fly CO2 zero” last month from the Dutch advertising regulator. The regulator found that although the carbon credits bought by KLM for the scheme resulted in some offsetting of emissions, it was not “adequate” for the airline to claim carbon neutrality. (Guardian)
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