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TOP STORY

Brussels bets on energy savings as risk of full Russian gas cut-off rises

As the prospect of a full cut-off of Russian gas into the EU looks increasingly likely, the European Commission is seeking ways to drastically reduce the bloc’s industrial consumption to help build supplies ahead of winter without further crippling the economy.

ASIA PACIFIC

Three members of Australia’s offset oversight body asked to quit in shock shakeup

The Australian government has accepted the resignations of three of its Emissions Reduction Oversight Committee (ERAC) members, including its chair, in a shocking move that leaves the development of anticipated new methodologies in limbo.

Macintosh papers slam regulator, ERAC defence of controversial ACCU method

Australia National University has published two more studies attacking the human induced regeneration (HIR) offset methodology and the way in which it has been defended by the Clean Energy Regulator and the government’s carbon credit oversight committee.

China tries again to legislate emissions trading regulations

Trading regulations for China’s national emissions trading scheme have been included in the State Council’s 2022 legislative work plan, sparking some hope among market observers that the scheme might finally be written into law despite also appearing in last year’s work plan.

China govt think-tank lays foundation for better regulation of carbon sinks

A government-run think-tank is preparing the ground for better regulation and management of Chinese carbon sequestration projects as it urges a speedy relaunch of the national offsetting scheme.

AMERICAS

NA Markets: Steady sell-off leads CCAs to 3.5-mth low, RGGI drops on Pennsylvania lawsuits 

California Carbon Allowance (CCA) prices continued to decline this week on the weight of bearish macroeconomic factors, while RGGI Allowances (RGAs) slipped to prices not seen since early May on uncertainty around the future of Pennsylvania’s membership to the regional carbon trading bloc.

California carbon market watchdog to prioritise EJ concerns, post-2030 outlook in annual report

An independent advisory committee discussed key topics to address in its annual report to reform California’s cap-and-trade programme on Thursday, and will initially focus on incorporating its environmental justice (EJ) group’s recommendations as well as looking at the design of the regulation after this decade.

Clean power innovator’s newest California acquisition aimed for low-carbon electricity production, CCS

A clean energy technology firm will retool an idled California biomass plant into a dual-purpose facility to supply emissions-free power while capturing and storing CO2, the company reported this week.

US way off track from meeting enhanced Paris Agreement target

The US will not come close to meeting its more ambitious Paris Agreement GHG reduction target formalised last year, with industrial sector emissions plateauing and abatement in other sectors progressing at a slower-than-needed pace, according to a report published Thursday.

EMEA

EU Fit for 55 climate package should be finalised by year-end, says Timmermans

The EU’s mammoth Fit for 55 climate policy package can become law by year-end, the European Commission’s climate chief Frans Timmermans said on Thursday as the bloc’s environment ministers discuss their negotiating stance for November’s COP27 UN climate negotiations.

Euro Markets: EUAs little changed as market unmoved by opposition to Commission’s MSR sales plan

EUAs were little changed after trading in a narrow range on Thursday amid widespread opposition among EU legislators to a plan to sell €20 billion worth of carbon units to help fund the bloc’s transition away from Russian fossil fuels.

VOLUNTARY

Oil company Eni secured more than 2 mln offsets in 2021 via African deals

Italian oil and gas firm Eni secured more than 2 million carbon credits over 2021 from its investments in African nature-based projects, the company said in filings published this week.

Climate tech VC fund raises $70 mln for second entrepreneur-supporting fund

A climate tech VC fund has raised $70 million in its latest funding round, as it eyes more investment in early-stage entrepreneurs via its second fund.

UK nature reserve, German industrial conglomerate in £500k deal to launch, scale “critical” VCM infrastructure

A UK nature reserve has secured a partnership deal worth more than half a million pounds with a German multinational industrial manufacturer to launch and globally scale “critical market infrastructure” for voluntary nature-based climate solutions.

Developer opens tender for pre-2016 REDD+ credits from Peruvian project

A developer has opened a tender for up to 680,000 carbon credits of vintage 2008-15 generated by a REDD+ project in Peru.

World’s first solar-powered DAC project aims for $20/t abatement cost

The world’s first solar powered direct air capture (DAC) project is looking to sell forward offset credits for €900/tonne ($904) as it eventually seeks to compress, transport and store CO2 for under $20 per tonne.

German biochar company looks to expand CCS to 30,000 tCO2 a year

A German biochar company is planning to scale up its CCS capacity to more than 30,000 tonnes of CO2 a year by 2025 through building the country’s first network of carbon removal parks.

Environmental consultancy unveils offset project developer subsidiary

A new company focusing on voluntary carbon offsets aims to become Europe’s top credit originator, joining an increasingly crowded marketplace offering services to corporate clients.

Global travel tech giant invests in Norwegian-based offset platform provider

A global travel tech giant has invested in a Norwegian-based offset platform provider to help travellers buy carbon credits against their travel plans.

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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

Paging Dr. Copper – Copper supply shortages will be so severe and prices so high in coming years that they risk delaying the global shift away from fossil fuels. That’s the conclusion of a new S&P Global study that warns of “unprecedented and untenable” copper shortfalls in the coming decade as suppliers grapple with a near doubling of demand by 2035. Prices that fell below $7,500 a metric tonne this week are set to soar back above their $10,845 peak later this decade, driven by the metal’s key role in the clean energy and transport industries, S&P Global said. “Either supply miraculously appears or the goal of energy transition just gets pushed out further,” said S&P Global Vice Chairman Dan Yergin. The bullish findings are a long way from the slowdown of recent months, when copper lost a third of its value from a March peak. Analysts from Goldman Sachs to Bank of America have slashed their near-term forecasts in anticipation of a drop in consumer spending and industrial activity. New supply coming online in Peru and the Congo has added to the bearish sentiment. Longer term, though, the equation changes. Demand is set to reach around 50 Mt by 2035 from 25 mln today, the study found. With new deposits trickier and pricier to find and develop, the main sources of new supply would come from recycling and gains at existing mines. Based on current trends, an annual supply shortfall of almost 10 Mt would open up in 2035, the study found. That’s equivalent to 20% of demand projected to be required for a 2050 net-zero world. Even assuming aggressive growth in capacity utilisation and all-time high recycling rates, the market would still face persistent deficits, including nearly 1.6 Mt in 2035, it said. (Bloomberg)

EMEA

Turbine blackmailing – Kremlin-controlled energy giant Gazprom said on Wednesday it could not guarantee the safe operation of a critical part of the Nord Stream 1 gas pipeline because of doubt over the return of a turbine from Canada, Euractiv reported. Ottawa at the weekend said it had issued a permit to allow the return of the turbine needed for Nord Stream 1’s Portovaya compressor station in Russia. Reportedly, under the compromise, the turbine would be sent to Germany first, so Canada does not breach any sanctions. Then Germany will deliver the turbine to Russia. Earlier this month, Gazprom has cut the capacity along the Nord Stream 1 pipeline to just 40% of usual levels, citing the delayed return of a turbine being serviced by Germany’s Siemens Energy, in Canada. The Nord Stream 1 pipeline transports 55 billion cubic metres (bcm) a year of gas from Russia to Germany under the Baltic Sea. Ukraine had urged Canada not to return the repaired part, saying it would undermine sanctions against Russia.

Berlin, you can do better – The German government’s action programmes designed to bring the high-emitting transport and buildings sectors back on their emission reduction trajectories, have been criticised for being too vague and unambitious by civil society groups, industries, and think-tanks, Clean Energy Wire reported. The German Business Initiative for Energy Efficiency (DENEFF) said the programme presented by the buildings and climate ministries on July 13 misses “clear guidelines for investments”. “Although the paper invokes the urgent need for more planning security for a massive reduction in energy consumption by increasing the rate and depth of renovation, the actual measures remain vague,” DENEFF wrote, adding that all market participants were still waiting for clear announcements on medium-term funding for national minimum efficiency standards for existing buildings.

Tighter rules – Spain is asking for input on plans to tighten tax rules on the transport, storage, and possession of F-gases, following the recent discovery of an illegal smuggling ring. Under the proposed changes, those manufacturing, storing, or acquiring fluorinated gases within the EU must present quarterly declarations in accordance with the existing special tax due on the gases. They would also be required to register with Spanish authorities, according to a consultation launched Thursday. Last month, Spanish police arrested 27 people and seized €11 million worth of smuggled F-gases in a major bust of a criminal network. Some 110 tonnes of different types of fluorinated refrigerant gases were impounded by Spain’s Guardia Civil at the port of Valencia after the gang imported it from China under the guise of intending to ship it on to other non-EU destinations, such as Jordan. In reality, the suspects were allegedly selling the gas on the black market throughout Spain while circumventing taxes owed. The Spanish treasury estimates that the crime has cost taxpayers €3.5 mln in lost revenue. (Bloomberg)

AMERICAS

Peak polluters – Hilcorp Energy, Exxon Mobil, and ConocoPhillips release the most GHGs among US oil and gas companies, according to a new report published Thursday from several sustainability organizations using data from the US government. The annual report ranks emissions data from the 303 oil and gas companies in the US that report emissions under the EPA’s Greenhouse Gas Reporting Program, and aims to bring transparency into emissions reporting, which has historically been hard to measure in a comparable and consistent manner. Nonprofit organisations Clean Air Task Force and Ceres commissioned the sustainability consultancy ERM to develop the report, and it uses government data up through 2020, the most up-to-date emissions data available from the EPA. (CNBC)

Dissent to disclosure – The US Securities and Exchange Commission’s (SEC) planned climate risk disclosure is facing a new threat from 24 Republican state attorneys general (AG) who are threatening to sue the SEC on the grounds it violated the recent Supreme Court ruling on West Virginia v. EPA, the AGs argue in a submission to the EPA filed Wednesday. The AGs, who represent nearly half the US, say they’ll sue the SEC if it doesn’t drop its plans to disclose the climate risks of publicly traded companies to potential investors. Following the Supreme Court’s West Virgina v. EPA decision on June 30, one law professor told Carbon Pulse he believed the SEC’s climate disclosure plan was in jeopardy. (Washington Examiner)

DOE to CCS – The US Department of Energy (DOE) plans to offer $2.54 bln to help finance six CCS demonstration projects at coal- and gas-fired power plants as well as at industrial facilities, according to a notice of intent issued Wednesday. DOE will also provide $100 mln for designing regional carbon dioxide pipeline systems, the department said in a separate notice. The department said it expects to accept 12 applications for the initial design of CCS projects, which would receive a total of $160 mln in DOE funding. It then plans to offer $2.1 bln for the detailed design and construction of six CCS projects, two at coal-fired power plants, two at gas-fired plants, and two at industrial facilities. The funding, provided in last year’s Bipartisan Infrastructure Act, requires applicants to pay for at least half of their project’s costs, and proposed projects must capture at least 95% of the CO2 from the facilities. (Utility Dive)

LNG to CCS – US fossil fuel exploration and production company ConocoPhillips on Thursday announced a potentially significant expansion of its global LNG business through investment in a new large-scale LNG facility under development by Sempra Infrastructure in Texas. ConocoPhillips has entered into a Heads of Agreement (HOA) with Sempra to acquire a 30% direct equity holding in Port Arthur Liquefaction Holdings, LLC and an LNG offtake equivalent to approximately 5 Mt/year for the Port Arthur LNG project. The companies will also evaluate development of low-carbon projects, including a CCS project for the Port Arthur LNG facility, and Sempra Infrastructure would have the opportunity to participate in CCS projects developed by ConocoPhillips in Texas or Louisiana in connection with the Port Arthur LNG project.

Transmission westward – The Ten West Link Transmission Line project in Arizona, providing delivery of 25 GW of solar, wind, and geothermal production on public land by 2025, was approved by US President Joe Biden’s administration on Thursday. The endeavour is situated on some of the best land for solar generation in the region, supporting the potential for future projects to supply Central Arizona and Southern California, the federal government said in a release.

MRV money – Canadian environment minister Steven Guilbeault on Thursday announced C$4.5 mln over four years to support Pacific Alliance countries – Mexico, Peru, Chile, and Colombia – in strengthening their national climate MRV systems. The Gold Standard Foundation will implement the Pacific Alliance MRV programme to help countries track their emissions reduction progress as they work toward achieving their NDCs under the Paris Agreement.

ASIA PACIFIC

Pieces in the puzzle – Guangzhou-based China Emissions Exchange (CEEX) has signed a strategic cooperation agreement with Bank of China, the sole clearing bank for RMB business in Hong Kong, they announced Thursday. Under the agreement, the two sides are to jointly explore the development of green finance and carbon markets in the Greater Bay Area, which covers Guangdong, Hong Kong, and Macao. That announcement follows a similar agreement signed in March with the Hong Kong stock exchange in an attempt to connect the international financial hub to China’s domestic carbon markets.

Spend! – Vietnam should spend $368 bln through 2040 to mitigate and adapt to climate change while advancing its development goals, Bloomberg reports, citing a report from the World Bank. Without taking the proper adaption and mitigation measures –  approximated at 6.8% of its annual gross domestic product – climate change could cost Vietnam as much as 14.5% of its GDP by 2050, according to the analysis released Thursday.

BP Biofuel – BP is aiming to start producing sustainable aviation fuel in Australia by 2025, after converting its oil refinery near Perth to produce renewable fuels, Reuters reports. The project is expected to cost “hundreds of millions” of dollars, BPs Asia Pacific vice president of low-carbon solutions, Lucy Nations, said. BP has not disclosed what volume it plans to produce, but Nation said output would depend on demand as the facility would be able to switch day-to-day between producing sustainable aviation fuel and biodiesel. Its Kwinana plant is in Western Australia, a region dominated by the mining industry where there is heavy demand for diesel for trucks. Australia has no SAF production so far and has no mandates for the fuel, unlike the European Union, which last week approved plans to require suppliers to blend a minimum of 2% of SAF into their jet fuel from 2025, rising to 85% in 2050. BP’s plant on the west coast and an A$500 mln ($337 mln)  plant being built by private firm Oceania Biofuels on the east coast will be the country’s first two SAF plants. Oceania’s plant will be able to produce more than 350 mln litres per year of sustainable aviation fuel and renewable diesel.

Another raise – India-focused renewable energy platform Continuum Green Energy has raised $350 mln from two marquee global institutional investors to finance the expansion of its clean energy projects. Continuum raised the debt by issuing senior secured floating rate notes. The fund-raising round provided the investors with an option to issue an additional $50 mln on fulfilling certain conditions. Continuum Green Energy is majority-owned by a global infrastructure fund managed by Morgan Stanley Infrastructure Partners. Continuum is an India-focused renewable platform with most of its assets focused on the commercial & industrial consumers, with 1.3 GW of operating and near-operational capacity and an additional 1.2 GW of projects nearing construction. (Mercom India)

Federal funding – The Australian Research Council has granted Monash Univeristy A$5 mln to lead a new research hub to develop technologies to transform CO2 emissions from the energy and manufacturing sectors into valuable products. Monash said in a release on Thursday that it will use new electrochemical, thermochemical, and biochemical methods to convert CO2 into useful products, and develop efficient direct air capture technologies for CO2 recycling. It will also drive new policy mechanisms to support early-stage market development of products and technologies to help drive industry transformation, it said. The university will partner with seven national and international academic organisation as well as 22 industry partners, including Woodside Energy, to form the hub.

Methanation dreams – Japan’s Marubeni and Osaka Gas have signed a joint study agreement with Peru LNG to explore the feasibility of synthetic methane production in the South American nation. The hope is to be able to produce methane through a synthetic reaction of green hydrogen produce from renewable energy and CO2 extracted from industrial facilities. While the methane can then be added to the gas infrastructure in the two countries, the CO2 involved can be captured and recovered, hence reducing overall emissions from natural gas production and consumption.

Maybe – Saudi-based utility developer ACWA Power last week visited Inner Mongolia, eyeing the opportunity to jointly develop a pilot hydrogen storage project for green ammonia production in the region, according to a company statement. Representatives from Hong Kong-listed energy solution provider Beijing Energy International and Singapore’s SembCorp also joined the meeting. ACWA Power is currently operating the world’s largest utility-scale, commercially-based hydrogen facility powered entirely by renewable energy.

SHIPPING

Retrofit ready – Maritime consultancy Marsoft announced a collaboration with offset project developer and marketer ClimeCo on Thursday to expand the range and value of Marsoft’s GreenScreen carbon credit services. GreenScreen enables shipowners to issue Gold Standard-certified VERs based on CO2 reductions from retrofitting their ships.

AVIATION

On the 12th day of CCS-mas – US carbon capture start-up Twelve, Alaska Airlines, and Microsoft on Thursday announced a Memorandum of Understanding (MOU) to collaborate on advancing the market for sustainable aviation fuels (SAF) to include fuels derived from recaptured CO2 and renewable energy, and working toward the first commercial demonstration flight in the United States powered by Twelve’s “E-Jet”. In a press release, the companies said through the first-of-its-kind agreement, they will work to advance production and use of Twelve’s E-Jet, a low-carbon jet fuel produced by a power-to-liquids process leveraging the company’s carbon transformation technology, which uses only renewable energy, water, and CO2 as inputs to transform CO2 into a variety of critical chemicals and materials conventionally made from fossil fuels. As part of the work outlined to advance the scalability and use of the technology, the companies will work toward a demonstration flight using E-Jet, and to supply the fuel to address some of Microsoft’s business travel on Alaska

SCIENCE & TECH

Cheap as chips – A significant majority of the renewable energy capacity installed last year in G20 countries was cheaper than even the cheapest coal-fired electricity, a new report from the International Renewable Energy Agency (IRENA) shows. Almost two-thirds of the 244 GW of renewable energy capacity installed last year was cheaper than coal, with the cost of onshore wind falling 15% and offshore wind and PV solar falling 13% in 2021 compared to 2020. With methane-based gas prices remaining high in the wake of the Russian war and atrocities in Ukraine, the intergovernmental body’s report found wind and solar generation saved Europe as much as $50 bln in imported fossil fuel costs from January to May of this year. (Climate Nexus)

Welcome to the Twilight Zone – The amount of carbon stored by microscopic plankton will increase in the coming century, predict researchers at the University of Bristol and the National Oceanography Centre (NOC). Using the latest IPCC models, the team expects the ‘Biological Pump’ – a process where microscopic plants, often called phytoplankton, take up carbon and then die and sink into the “Twilight Zone” deep ocean (200-1000 metres down), where carbon is stored for hundreds of years – to account for 5-17% of the total increase in carbon uptake by the oceans by 2100. However, the IPCC models have no consistent representation of the environmental and ecological processes in the Twilight Zone. This leads to a large uncertainty in how much CO2 originating from the atmosphere the Biological Pump will store beyond the end of the century. In theory, after 2100 carbon storage by the Biological Pump could stall and instead may start acting as a source of CO2, which could exacerbate climate change further. The researchers’ findings were published recently in the journal PNAS (Proceedings of the National Academy of Sciences).

AND FINALLY…

A different kind of carbon credit – Would-be British holidaymakers who find themselves on the wrong end of flight cancellations can cash in the saved carbon via a new holiday programme launched by a hotel in the country’s Cotswolds district. Stroud’s Stonehouse Court Hotel has introduced a ‘carbon saving cancellation’ package, where it looks to offer discounted stays for those hit by cancelled flights. Guests can swap their lost airmiles for ‘carbon credit’ at the hotel, depending on how much carbon was saved by their cancelled flights. The hotel is offering 32% discounted last-minute midweek stays for those whose holiday plans have been thrown into disarray, because it wants to the contribution inadvertently being made towards fighting climate change. As well, the hotel is assigning a value to the avoided CO2 and allowing guests to spend that in its restaurant/bar. For example, a cancelled economy seat to Spain is worth a £7.15 voucher, while anyone who missed out on a flight to New York could benefit from £31.72 in credit. To calculate the carbon impact, Stonehouse Court used C Level’s flight carbon calculator, which utilises UK government emissions factors and methodology to calculate various environmental impacts. (Mirror)

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