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TOP STORY
ANALYSIS: Carbon removal technology interest surges in Australia – whether it works remains to be seen
Technological solutions to remove carbon from the atmosphere, like CCS, CCUS, and Direct Air Capture (DAC) are gaining traction in Australia with support from the federal government, however the technologies’ ability to work as intended and the way it is being used by the fossil fuel industry remain deeply questionable, according to its critics.
EMEA
Brussels readies plans for emergency gas rationing -leaked draft
The European Commission is set to propose mandatory gas rationing for member states should the EU declare an emergency amid a worsening supply outlook, according to a leaked draft seen by Carbon Pulse on Tuesday.
Court orders UK to outline policies to meet emissions reduction targets
Following a legal challenges from environmental groups, a court has ordered the UK government to outline how it plans to meet emissions reduction targets as part of its net zero strategy with the current level of detail unlawful.
When a utility thinks it’s a financial: Reports shed light on EU ETS trading activities, strategies
Some utilities in the EU ETS behave more like financial institutions, according to analysis of historical trading data, suggesting that participant segmentation practices may need to be reviewed as lawmakers consider restricting the market access of some non-compliance players.
Euro Markets: EUAs test trend line support as gas market drops ahead of Nord Stream 1 restart
EUAs gave up ground for a second day on Tuesday, sliding towards the bottom of their recent range and bringing key support levels into focus, while energy markets gave up early gains after reports indicated the Nord Stream 1 pipeline was set to resume flows on Thursday after a maintenance shutdown ends.
UK aviation net zero strategy assumes £378/tonne carbon price in 2050 to meet climate goals
The UK’s net zero strategy for aviation assumes a carbon price rise to £378/tonne by mid-century to meet the goal of climate neutrality in the sector, and does not envisage emissions to rise above pre-pandemic levels, according to documentation published on Tuesday.
London brokers lose for third time in legal fight over £5.6 mln EU ETS tax fraud claim
A London-based brokerage has once again been denied in its appeal to claim back £5.6 million in tax linked to fraudulent trades in EU carbon allowances.
ASIA PACIFIC
Indian government set to introduce bill to establish carbon market framework, boost renewables use
India’s Modi government will shortly introduce legislation to the country’s lower house of parliament, the Lok Sabha, that will facilitate a national framework for carbon trading and boost clean energy use, according to local media reports.
Australian market roundup: Environment minister talks up role of carbon markets as ACCU delivery plummets
Australia’s environment minister has emphasised the expanding role carbon credits will play in protecting and restoring marine and land-based ecosystems, while ACCU delivery to the government fell slightly in the last financial year, according to regulator data.
Hong Kong stock exchange appoints head of carbon products
Hong Kong Exchanges and Clearing (HKEX) has appointed a head of carbon and ESG products and markets, underpinning its ambition to establish itself as an emissions trading hub.
AMERICAS
Washington carbon market stakeholders fixating on compliance costs, offsets ahead of final regulation
Washington electric and natural gas utilities are seeking further cost relief for consumers and a level playing field in the state’s final cap-and-trade regulation, while offset protocols are also a concern for creating a viable carbon credit market and eventually linking with the California-Quebec programme, according to public comments.
VOLUNTARY
US forest group issues green bond to finance nature-based carbon offsets
A US-based conservation organisation on Tuesday announced a multi-million-dollar green bond to support drastically scaling up its small acreage forest offsets programme.
First voluntary offsets project partnership launched for produce growers
A global offset developer and a North American farming financier launched on Tuesday an industry-first programme for produce growers of primary crops to participate in the voluntary carbon market (VCM).
UPDATE – Crypto carbon venture to delay launch amid market turmoil -media
“We did not tell the [Wall Street Journal] reporter ‘indefinitely’,” a spokesperson for Flowcarbon said Tuesday, responding to queries sent this weekend by Carbon Pulse regarding reports that the well-funded US firm that tokenises nature-based credits had decided to postpone its product launch amid turmoil in the crypto markets and downturn in on-chain carbon credits prices. “We appreciate the media for their ongoing focus on us, even when they get it wrong! Our token launch is happening soon, we have numerous partnership announcements about to break, and we look forward to keeping everyone posted!”
INTERNATIONAL
Loss and damage “shield” to be launched at COP27 -Petersberg Climate Dialogue
Germany confirmed details of its proposed “global shield” on Tuesday, aiming to “acknowledge” and “address” loss and damage caused by climate change impacts on the world’s most vulnerable countries, while the nation also announced a new partnership to import natural gas and hydrogen.
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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
AMERICAS
Order up – US President Joe Biden plans to announce new executive orders aimed at tackling the climate crisis on Wednesday during a trip to Massachusetts, sources familiar with his plans told Reuters. The announcement is unlikely to include the declaration of a climate emergency, which would enable the use of the Defense Production Act to ramp up production of a wide range of renewable energy products and systems. US Senate Democrats and environmental groups have been calling for such a declaration in light of news last week that conservative Democratic Sen. Joe Manchin was not ready to support key climate provisions in Congress.
Regs at risk – Any federal regulation that could address the climate crisis will likely receive heightened scrutiny from the Supreme Court’s right-wing supermajority, environmental lawyers warn. They point to references by Chief Justice Roberts and Justice Gorsuch to statements by then-EPA Administrator Gina McCarthy and President Obama in 2014 that reveal the supermajority’s long-standing eagerness to use its new “major questions” doctrine to strike down any regulation it views as being crafted to reduce climate pollution, even if reducing climate pollution is an incidental or ancillary benefit. “I think it’s a mark of how … aggressive this Supreme Court seems,” Lisa Heinzerling, a Georgetown law professor who crafted the winning arguments in the Supreme Court’s 2007 Massachusetts v. EPA ruling, recognizing federal authority to regulate greenhouse gas pollution under the Clean Air Act, told E&E News. “How — to me — untrustworthy it seems and how worried we should be in the aftermath [of West Virginia v. EPA] that just talking about climate might get [EPA] into trouble.” (Climate Nexus)
More time – The US Commodity Futures Trading Commission is extending the deadline for the public comment period on a Request for Information on Climate-Related Financial Risk (RFI) to Oct. 7. On June 2, the CFTC announced it is seeking public feedback on all aspects of climate-related financial risk, including as it may pertain to the derivatives markets, underlying commodities markets, registered entities, registrants, and other related market participants. The RFI also seeks responses on questions specific to data, scenario analysis and stress testing, risk management, disclosure, product innovation, voluntary carbon markets, digital assets, greenwashing, financially vulnerable communities, and public-private partnerships and engagement. The RFI was published in the Federal Register on June 8, with a 60-day comment period scheduled to close on Aug. 8. Based on the broad range of topics addressed in the RFI, the CFTC is extending the deadline by an additional 60 days. Comments may be submitted electronically through the CFTC’s Comments Online process. All comments received will be posted on the CFTC website.
EMEA
Nuke stress test – The German government has said it will carry out a second assessment of the benefits of extending the runtime of the country’s remaining nuclear plants beyond their scheduled closure date, the Sueddeutsche Zeitung reports. Through another power grid “stress test” that will last “several weeks,” the climate and economy ministry aims to determine whether the three plants still in operation can contribute to keeping Germany’s energy supply sufficient throughout the winter, as the prospect of a full halt to energy trading with Russia has thrown the country’s energy industry into turmoil. A spokesperson for the ministry, which is led by Green Party minister Robert Habeck, said the test will hopefully clarify whether Germany will have sufficient electricity production capacity when the nuclear plants go offline on Dec. 31 as planned. A first test in March found the nuclear plants would be of no great help in the current gas supply crisis, mainly because they cannot replace gas needed for heating and industry purposes. However, the new test, which will be conducted by transmission grid operators will also take into account skyrocketing gas prices which are expected to create serious difficulties both for households and business customers. In Germany’s three-party coalition government, Habeck’s Greens and chancellor Olaf Scholz’s Social Democrats (SPD) have ruled out continuing nuclear power production even amid the energy crisis caused by the war in Ukraine, while the pro-business Free Democrats (FDP) have proposed a change of strategy if necessary, which would keep the reactors in operation for a limited period of time. Utility bosses recently said that all they need is a green light from the government to get the nukes up and running again, and that suggestions that the plants wouldn’t be able to restart until late next year were false. (Clean Energy Wire)
Deciphering Putin’s mind – The European Commission doesn’t expect Russia to restart a key natural gas pipeline this week, a senior official said, the clearest indication yet that the bloc is bracing for the worst, Bloomberg reported early on Tuesday. “We don’t expect that it comes back,” Budget Commissioner Johannes Hahn said Tuesday. “We are working on the assumption that it doesn’t return to operation. And in that case, certain additional measures need to be taken. “Russia is scheduled to resume flows through the Nord Stream pipeline on July 21 after planned maintenance. Still, concerns are growing from Brussels to Berlin that the link may not return, especially after Russia slashed flows last month, citing delays caused by sanctions, the outlet said. However, Reuters reported later in the day that Russian gas flows via the Nord Stream 1 pipeline are seen restarting on time on Thursday after the completion of scheduled maintenance, citing two sources familiar with the export plans. In a sort of follow-up, Bloomberg reported that Germany will wait at least until Monday to determine whether Russia has cut off gas supply through a key pipeline, a few days after maintenance is due to be completed.
Force majeure – Russia’s energy giant is threatening to send less gas to Europe — but Germany, one of its main importers, has rejected the idea, CNBC reported. Majority state-owned Gazprom said Monday that due to unforeseeable circumstances it is not in a position to comply with gas contracts in Europe. Germany’s energy firm, Uniper, confirmed to CNBC that Gazprom had claimed “force majeure” on its supplies. Force majeure, a legal term, occurs when unforeseeable circumstances prevent one party from fulfilling its contractual duties, in theory absolving them from penalties.
Subsidy rethink – The Polish government will discuss other solutions to replace the Russian coal embargo and tackle high coal prices, said Prime Minister Mateusz Morawiecki after a subsidy system introduced last month proved ‘problematic’. To stop the price rise of coal, the government introduced a subsidy system last month. Every coal dealer who keeps the prices at no higher than 996 zlotys (€208) per tonne receives a 1073 zl (€224) supplement from the government. However, the solution is uneconomic for most dealers, and few of them decided to join the government programme. “Indeed, it proves problematic to create a system in which a consumer can buy coal at a regular price,” admitted Morawiecki, quoted by Wirtualna Polska. In his view, the system’s failure is the dealers’ fault, who show “no will to cooperate” with the government. Consequently, the cabinet decided to look for other ways to compensate the households for the high coal prices. New ideas will be presented soon, Morawiecki said. (Euractiv)
Cohesion cash – Italy will receive €42.7 bln from the EU in 2021-27 to promote economic, social, and territorial cohesion, with a particular focus on the Southern regions, thanks to the adoption of the Cohesion Policy Partnership Agreement between the Commission and Italy. The Partnership Agreement sets out the jointly agreed investment priorities for Italy’s green and digital transition while supporting the most fragile socio-economic areas and vulnerable groups. Together with national co-financing, the total Cohesion Policy allocation is €75 bln. More than €30 bln from the European Regional and Development Fund (ERDF) and the European Social Fund Plus (ESF+) will be allocated to the less-developed regions in Southern Italy. This stronger targeting is crucial to reduce the (still large) gap among regions in terms of economic activity, employment opportunities, education, and access to services and healthcare. (European Commission)
Climate talks, gas deal – Egypt’s president Abdel Fattah al-Sisi pledged to assist Germany’s move towards independence from Russia by supplying natural gas and agreed on a green hydrogen partnership during a meeting with German chancellor Olaf Scholz at the Petersberg Climate Dialogue in Berlin, newspaper General Anzeiger reported. Scholz stressed the importance of moving away from fossil fuels and reiterated that Germany aims to be one of the first climate-neutral industrialised nations. Meanwhile, Egypt’s al-Sisi said he is looking to make the UN climate conference COP27, in November in Sharm el-Sheikh a success, adding he wanted to make Egypt a “hub for renewable energy.” (Clean Energy Wire)
The heat is on – For British homeowners struggling to keep cool during unprecedented high temperatures this summer, including Tuesday’s record above 40C in parts of the country, it’s ironically one of the best times to consider installing a new heating and cooling system, Bloomberg reports. As the UK aims to cut GHG emissions, the government has tried to encourage Britons to switch their heating system from a boiler that burns natural gas to an electric unit known as a heat pump. Up until recently, the government provided subsidies for the devices if they generated only heat. Now, homeowners can apply for funds to install heat pumps that produce cool air as well. The technology is one of the few examples of a single solution that can both mitigate the cause of climate change and adapt to its increasingly dangerous impacts. Traditionally mild British summers mean few homes in the country have cooling. A government report from last year cited a study that found a maximum of 3% of households had any sort of air conditioning, and the vast majority of those are portable units that serve a single room. Rather than buy a separate device for cooling, Britons could get both kinds of temperature control in one efficient device.
ASIA PACIFIC
Carbon capture collaboration – Malaysia’s national energy company Petronas and independent risk management and assurance company DNV are teaming up on carbon capture, utilisation, and storage (CCUS) initiatives, Upstream reports. The duo will address the technical, regulatory, and business challenges of CCUS deployment, particularly in the Southeast Asian region, by leveraging each organisation’s technical skills, resources and research capabilities. Under a memorandum of understanding, DNV and Petronas will collaborate on technical issues including safety, environment, risk, technology and the qualification of storage sites; legislation and regulation; capability development and commercial areas.
Green help – Pakistan will seek financial and technical help from foreign donors to increase the total share of renewables to up to 60% of power generation by 2030, The News reports. The Pakistan government has already approached the Asian Development Bank (ADB) for financial help after the inclusion of Pakistan in the bank’s Energy Transition Mechanism, a programme which aims to support the transition of power generation from coal to renewables in select Asian economies. Pakistan’s minister for climate change, Sherry Rehman, recently stated “we must also remember that Pakistan should not be burdened with the financial costs of the transition in this climate emergency”.
Beyond petroleum – Oil major BP is aiming to start producing Sustainable Aviation Fuel (SAF) in Australia by 2025 after converting its oil refinery near Perth to produce renewable fuels, Biofuels International reports. BP has not disclosed what volume it plans to produce, but BP’s Asia Pacific vice president of low-carbon solutions, Lucy Nation, said that output would depend on demand as the facility would be able to switch day-to-day between producing SAF and biodiesel.
Fresh money – SPIC Hydrogen Energy, a hydrogen business unit of China’s State Power Investment Corporation, started raising money for its Series B financing round last Friday, with a target of raising no less than 1.5 bln yuan ($222 mln). The company last year closed its Series A+ funding round with a total of 1.08 bln yuan raised from 16 investors. It is reportedly aiming to complete an IPO by 2025.
Hydrogen alliance – The Shanghai Environment and Energy Exchange (SEEE) has teamed up with Shanghai Electric Power and two other organisations for the construction of a new hydrogen exchange, local media reported. Although the SEEE did not reveal any further detail on the timelines, the city has vowed to pour resources into the development of its hydrogen sector. The size of Shanghai’s hydrogen supply chain is expected to reach 100 bln yuan ($14.83 bln) by 2025.
Green start – China’s first data centre running entirely on traceable, clean energy has become operational, according to BJX. Based in Northwest China’s Qinghai province, the green data centre has the country’s first green-power smart supply system that integrates power, power grid, power load, and energy storage. The facility is operated by China Telecom, a top three Chinese telecommunications company, with a total investment of 1 bln yuan.
SCIENCE & TECH
Emissions E-solution – Expleo, a UK-based engineering and technology company, has claimed that its new closed-loop fuel solution for global shipping can deliver a 92% reduction in GHG emissions and OPEX savings of £1.4 mln a year per vessel, Bunkerspot reports. In a statement, Expleo said its vessel modelling also showed a projected four-year payback on retrofit CAPEX. Jonathan Taylor, vice-president of marine at Expleo said: “Our solution uses solid oxide fuel cell (SOFC), technology which, although highly efficient and well suited to use in marine environments, releases a high concentration of CO2. To achieve the desired reduction in GHGs, we partnered SOFC with a novel carbon capture and storage system, enabling a vessel to use its captured CO2 and green hydrogen to synthesise e-methanol. The green hydrogen in the solution can be produced at offshore wind farms, from surplus electrical energy or supplied in-port – ensuring the closed-loop remains as sustainable as possible.”
AND FINALLY…
Getting warmer – One of the most influential climate deniers in American history has died. Patrick Michaels, who passed away Saturday at 72, created the modern concept of “lukewarmism,” which holds that humans are warming the planet but rejects the notion it will have severe consequences. That idea has become dominant in today’s Republican Party, which rejects significant restrictions on fossil fuels and has ignored the warnings of climate scientists who have said that unabated warming will be devastating for humanity. Michaels, who had a PhD in climatology from the University of Wisconsin, Madison, was among the handful of researchers with a legitimate climate science background who were unwilling to change their minds even as their numbers dwindled in the face of a growing body of research that clearly demonstrated humans are warming the planet at an unprecedented pace through the burning of fossil fuels. He often highlighted doubt in climate science and chose to ignore far greater areas of certainty and consensus, often being paid by the fossil fuel industry to promote such views. (E&E News)
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