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TOP STORY
Brussels’ MSR sale idea faces uphill battle as EU Parliament unites in opposition
An idea to fund the REPowerEU strategy by selling MSR-held carbon units looks set for a troubled path into law, with MEPs from across the political spectrum on Tuesday rallying against the ‘short-sighted’ measure they feel undermines the bloc’s carbon market and progress towards emissions targets.
EMEA
EU lawmakers to raise ambition on renewables, fear RePowerEU complications
EU lawmakers are likely to push for a tougher 2030 renewables target than member states at an interim vote this week, though Brussels’ REPowerEU plan to quickly ditch Russian fossil fuels is set to complicate work on finalising legislation.
EU’s emergency coal plant use to have ‘negligible’ emissions impact -think-tank
Plans in Europe to place several phased-out coal power plants on standby in case Russian gas supplies suddenly stop would add no more than 1.3% to emissions annually, an environmental think-tank said on Wednesday in findings that suggest the moves will have a limited bearing on climate efforts.
Euro Markets: EUAs rise to 7-day high ahead of auction gap as energy gains continue amid weather concerns
EUAs rose to their highest in seven days on Tuesday as traders positioned ahead of the fortnightly gap in the auction schedule, while energy prices were lifted by reports that French nuclear plants may have to trim operating rates as temperatures were forecast to soar across most of western Europe next week.
EU ETS-derived Innovation Fund awards €1.8 bln to 17 large projects
The EU awarded €1.8 billion to 17 large carbon-cutting projects across Europe on Tuesday, the second large-scale activities selected to receive cash from the ETS-derived Innovation Fund.
UK’s Drax seeks approval for world’s largest carbon capture facility
British utility Drax has submitted plans to build the world’s largest carbon capture facility at its wood-burning power station, aiming to make good on its ambition to generate 8 Mt of carbon removals a year at the site by 2030.
VOLUNTARY
VCM surplus is an “illusion” amid robust fundamental demand, say investors
Carbon credits have weathered the turmoil in financial markets since Russia invaded Ukraine better than leading asset classes, and the market remains underpinned by robust fundamental demand despite its voluntary nature and a growing surplus of offsets, a webinar heard Tuesday.
Colombian airline Avianca offsets 98% of emissions during H1
Colombian air carrier Avianca on Monday announced has purchased carbon credits for nearly 98% of its operational emissions during the first half of 2022, and will buy a larger number of offsets over the final six months of the year.
Startups offer blockchain ventures ways to address their carbon footprint
Two startups have teamed up to offer web3 companies the technology to offset their carbon footprint by buying tokenised voluntary carbon market (VCM) credits, while another venture has announced its entry into the space by the end of the year with a “private” blockchain-based carbon marketplace.
Software firm TraceSafe acquires carbon credit platform Offsety
Canadian software development company TraceSafe on Tuesday announced it purchased individuals-focused carbon credit platform Offsety.
AMERICAS
RGGI Q3 auction volumes bloat with contested Pennsylvania inclusion
Auction volumes offered at RGGI’s Q3 sale soared with the addition of PA’s quota of allowances, announced Tuesday, amidst ongoing legal machinations between PA state lawmakers and the coal industry.
Brazil’s RenovaBio price surge pits gas costs against emissions mitigation
The Brazilian Ministry of Mines and Energy (MME) has two obvious options for reducing sky-high Decarbonisation Credit (CBIO) values under its RenovaBio programme, either raise the price of gasoline during an election year or weaken the biofuel market’s CO2 mitigation goals, according to a World Bank economist.
ASIA PACIFIC
Australian market roundup: Govt green bank, superfund launch sustainability tech fund as new landfill gas projects registered
Australia’s government-backed green investment bank has partnered with an airline superannuation fund to launch a A$100 million ($67 mln) green tech fund, while the Clean Energy Regulator has registered nine new offset projects.
INTERNATIONAL
British university, global tech giant partner to build climate research centre
A prestigious British university and a global tech giant have joined forces to launch a research centre for decarbonisation and nature-based climate solutions.
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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
The worst is yet to come – A global squeeze on energy supply that’s triggered crippling shortages and sent power and fuel prices surging may get worse, according to the head of the IEA, Bloomberg reported. “The world has never witnessed such a major energy crisis in terms of its depth and its complexity,” IEA Executive Director Fatih Birol said Tuesday at a global energy forum in Sydney. “We might not have seen the worst of it yet — this is affecting the entire world.” The whole energy system is in turmoil following the February invasion of Ukraine by Russia, at the time the biggest oil and natural gas exporter and a major player in commodities, Birol said. Soaring prices are lifting the cost of filling gas tanks, heating homes and powering industry across the globe, adding to inflationary pressures and leading to deadly protests from Africa to Sri Lanka. Like the oil crises of the 1970s, which prompted huge gains in fuel efficiency and a boom in nuclear power, the world may see faster adoption of government policies that speed the transition to cleaner energy, Birol said. In the meantime, security of oil and gas supplies will continue to pose a challenge for Europe, and also for other regions, he said.
Energised agreement — The US and Australia’s respective energy ministers signed a cooperative agreement at the Sydney Energy Forum on Tuesday – The Australia – United States Net Zero Technology Acceleration Partnership – to ramp up the deployment of zero emissions technology and cooperate on critical minerals supply chains. A statement from Energy and Climate Minister Chris Bowen said the partnership is the first step as part of making climate change a centrepiece of the Australian US alliance, adding that the current threats to global energy markets and energy security make international cooperation even more important. Cooperation will include industry, research and the private sector to drive investment, trade, and development of the commercial opportunities between the two countries, and will initially focus on technology including long duration energy storage, digital electricity grids and the integration of renewables, hydrogen, and CO2 removal, including direct air capture. The agreement was signed on the same day as a MoU between Australia’s peak scientific body, the Commonwealth Scientific, Research, Industry Organisation, and the US National Renewable Energy Laboratory.
EMEA
Economic heart attack – European stocks plunging 20%. Junk credit spreads widening past 2020 crisis levels. The euro sinking to just 90 cents against the US dollar. The predictions are ominous for financial markets if Russia cuts off all the gas supply to Europe. Shipments are currently running at reduced levels with the main pipeline shut for a 10-day maintenance, and fears are building over whether Moscow will turn the tap back on. Many investors are asking: How bad could this get? To that question, strategists across Wall Street have tried to put numbers on a scenario that would be unthinkable in normal times. There are so many variables, such as the length of any shutdown, the extent of supply cuts, and how far countries would go to ration energy, that anyone’s prediction is a guess at best. However, Germany’s economy in particular would face a “severe crisis” should supplies from Russia come to a complete stop, Christian Kullmann, the president of the German Chemicals Industry Association (VCI), told Sueddeutsche Zeitung. “In the event of a complete gas embargo, I fear a heart attack for the German economy, including our industry,” he said. As chemical products are needed “for 90% of all production processes” in Germany, the country would “come to a standstill” without the chemical industry, the lobbyist added. Asked whether industry had to be favoured over private households in the case of possible rationing of gas, Kullmann emphasised the importance of securing jobs and income. “It is more important for society than fully securing private gas supplies. What good would it do if households continued to get gas but could no longer pay for it?” The German government has warned that a decision by Russia to stop gas deliveries will cause severe damage to the entire economy, with unemployment rising and businesses potentially going bust. Many companies have written letters to the government insisting how “systemically relevant” they are, often highlighting their role in what could be a long line of production steps for crucial products. Using fossil gas in industry processes like chemicals production cannot be substituted overnight. Companies can either try to run operations more efficiently, or lower or shut down production. (Bloomberg, Clean Energy Wire)
Rome keeps calm – Elsewhere, Russian gas giant Gazprom reduced its daily gas supplies by a third, Italian energy giant Eni reported after the Nord Stream 1 pipeline in Germany entered its first day of maintenance, according to EurActiv. However, this was not enough for the Italian government to raise the state of alert. Such a relatively small share of the total daily supply “is largely offset by the other supplies that the government has secured through the diversification plan carried out in recent months,” the government said.
Climate package off-track – Fears of a big climate backslide by the EU may be overblown, new research shows, though the margin for error for reaching net-zero by 2050 is getting smaller, Bloomberg reported. The bloc’s use of more coal and imported LNG to replace Russian fossil fuels does mean that emissions will rise this year and next — around 5%, according to research firm ICIS — but legislation is also being put in place that will require steeper cuts later this decade. If all goes to plan, by the end of the decade, the total amount of greenhouse gases Europe dumps into the atmosphere will remain the same. The result will keep one of the world’s most ambitious climate strategies on track, while providing the EU with enough energy to keep the economy going in the short term through burning coal.
ASIA PACIFIC
Closer look — Up to 19 coal and gas project approvals could be reassessed if a legal application by the Environment Council of Central Queensland is successful. The ABC reports that the group has written to federal Environment Minister Tanya Plibersek formally requesting she reconsider how projects approvals are assessed under federal environmental law, and to consider the broader effects of climate change and how emissions from these projects could damage environments. Represented by lawyers at Environment Justice Australia, the environmental group argues those 19 coal and gas projects are likely to damage 2,121 matters of national environmental significance, including the Great Barrier Reef, koalas and dugongs. Some of the decisions — about what sort of impacts the projects were likely to have — were made by ministers or their representatives a decade or more ago. In each of the 19 projects, no assessment of how its activities would contribute to climate change — nor of the flow-on effects of that on thousands of other environmental matters of concern — is currently required under federal environmental law. The letters ask for those decisions to be “reconsidered”, under a rarely used mechanism in Australia’s federal environment laws.
Paying the price – Temasek has increased its internal carbon price to $50/tCO2 as the Singapore state-owned investor takes steps to meet a net zero target by 2050, according to Bloomberg. The $287 bln fund lifted the internal price from $42/t, and plans to increase it further to $100/t by 2030, according to the investor’s annual report released Tuesday. A portion of the firm’s staff incentives will be tied to 10-year carbon targets, Temasek said.
AMERICAS
C-suite solidarity – CEOs of seven US firms including food producer Danone North America and clothing company Levi Strauss have called on Congress to pass ambitious climate reforms in a letter released Tuesday. Budget negotiations are currently ongoing in the US Senat,e and the letter addressed to Democratic congressional leaders Nancy Pelosi and Chuck Schumer urges a tough line on climate. The letter from industry leaders asks Senators to also push for clean energy investment.
Refining hydro-gen – Oil and gas producer and refinery operator Irving Oil, headquartered in New Brunswick, has entered into an agreement with New York-based fuel cell company Plug Power to purchase a 5 MW hydrogen electrolyser, the company announced Tuesday. The electrolyser is expected to produce 2 tonnes of hydrogen per day using electricity from the local grid. Irving plans to work with the province to ensure the electricity being used to power its hydrogen electrolyser is sourced from clean energy sources, said Andy Carson, Irving’s director of energy transition. (Toronto Star)
AVIATION
Fuel first – For the first time in aviation history, a CORSIA-certified batch of sustainable aviation fuel (SAF) was delivered to a commercial airline. American Airlines took possession of a batch of Neste MY Sustainable Aviation Fuel at San Francisco International Airport, the Texas-based carrier announced Tuesday. The batch was delivered as part of a pilot programme to certify SAF as a CORSIA-eligible fuel that can be used by an airline to meet its emissions obligation under UN aviation body ICAO’s carbon neutral growth mechanism.
SCIENCE & TECH
Storage wars – Norway’s Equinor is to acquire US-based battery storage developer East Point Energy after signing an agreement to take a 100% stake in the company. Equinor, a major producer of oil and gas, said Tuesday that Charlottesville-headquartered East Point had a 4.1GW pipeline of “early to mid-stage battery storage projects focused on the US East Coast.” According to Equinor, the transaction is slated for completion in the third quarter of 2022. This is the latest M&A deal involving an energy storage firm. (CNBC)
AND FINALLY…
Wind belt block – Wind farms in southern Minnesota’s wind belt are generating more electricity than transmission lines can handle, forcing some turbines offline and causing shortfalls in municipal budgets, the Star Tribune reports. “Fundamentally, there is [a] bottleneck,” Public Utilities Commission member Joe Sullivan, said at a public meeting. “Southern Minnesota and our region does not have enough transmission capacity.” Eighteen counties reported a 14% drop in wind tax revenue last year and a couple reported losses as high as 34%. Rural areas are major beneficiaries of wind energy production tax revenue, but cost and NIMBY objections often stand in the way of building the transmission lines necessary to get the power generated into the grid. (Climate Nexus)
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