One month until Carbon Forward 2022 – Europe’s leading environmental markets conference. Taking place in London and online from Oct. 12-14, don’t miss the chance to hear about the risks and opportunities presented by the world’s largest carbon markets – compliance and voluntary. Or come network with your industry peers and meet our sponsors and exhibitors.
In-person passes are limited and going fast, so Register Now!
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TOP STORY
ANALYSIS: Blockchain carbon industry looks beyond controversy as ‘the Merge’ wipes out emissions
Participants in the fledgling on-chain carbon market are looking to move past public perceptions of the industry’s unfeasibly high carbon footprint after the world’s second-biggest blockchain on Thursday made operational changes that will shed 99.5% of its energy consumption.
INTERNATIONAL
Carbon credit public metadata project prepares for October launch
Infrastructure that aims to compile and standardise information from the world’s fragmented carbon markets will launch to the public next month, with partners and founders at the World Bank Group providing more details on how the metadata platform will operate and help scale the market.
Decarbonising steel by 2050 requires input costs to rise by 15-20% -report
The investment needed to decarbonise the steel and iron ore industry by 2050 could reach as high as $1.4 trillion over the next three decades, in order to finance “revolution” across every stage of the value chain, consultants said in a report released Thursday.
VOLUNTARY
Turn the mitigation hierarchy upside down, carbon fund manager says
The head of a global carbon fund has argued that the mitigation hierarchy surrounding offsets needs to be turned on its head, and that it was unjust for rich nations to withhold revenues that stem from carbon markets to poorer nations that need it.
NASA-backed scientists to launch public MRV platform to track forest carbon
A coalition of scientists backed by multiple global governments and US space agency NASA will launch a free-to-access digital platform in November to track using AI and satellite data the carbon emissions and removal of all forests across the globe.
KlimaDAO acts alone to destroy controversial credits in BCT token
Crypto carbon group KlimaDAO has finally rid the market of more than 670,000 remaining carbon credit tokens from a Chinese HFC-23 project that were bought onto blockchain last year, acting alone after fellow tech firm Toucan Protocol declined to join in.
African developer plans cookstove project in Malawi to generate 5 mln credits
More than 5 million carbon credits will be generated by a cookstoves project in Malawi after a project developer found backing from a Swiss-based investment foundation.
Canadian carbon finance company receives C$25 mln investment
An Ottawa-headquartered personalised carbon footprint calculator and offset investor has raised C$25 million ($18.9 mln) in equity financing from a Newfoundland-based iron company and high-net worth investors, according to a press release Thursday.
South Korean electronics giant pledges net zero by 2050, research on carbon capture tech, 100% renewables use
Samsung Electronics will target net zero emissions by 2050, spend 7 trillion won ($5 billion) on green and low emission technologies, and has joined RE100, which aims for corporates to reach 100% renewable energy use, the South Korean company announced on Thursday.
EMEA
EU shipping emissions rise in H1 2022 amid Covid recovery -shipbroker
Emissions from the maritime shipping sector inched higher in the first half of the year, according to research by a shipbroker that comes as EU institutions prepare to resume negotiations over how to include the sector in the bloc’s ETS starting within the next couple of years.
EUAs in ‘tug of war’ between utility buying and demand destruction -analysts
The price direction of EU carbon allowances will continue to be directed by the scale of emissions from fossil burning utilities balanced against the curtailment of energy consumption by industry this winter, an audience heard Thursday.
Euro Markets: EUAs bounce after giving up Wednesday gains while gas drops as demand measures delayed
EUAs recovered some of their early losses in a relatively calm market on Thursday as traders caught their breath after the previous day’s volatility, while gas prices dropped as Germany delayed a key element of its plan to reduce gas demand over the coming winter.
NGOs sue European Commission over inclusion of biomass in Taxonomy
Some 11 NGOs are suing the European Commission over its inclusion of biomass and forestry activities in the bloc-wide Taxonomy Regulation, they announced on Friday, arguing that rather than channelling private capital into climate action the move would exacerbate warming and forest degradation.
AMERICAS
NA Markets: CCA traders mull impacts from ARB Scoping Plan comments, RGAs stabilise after Q3 auction
California Carbon Allowance (CCA) prices withstood broader market setbacks after a higher-than-expected inflation print on Tuesday and following regulator comments on cap-and-trade programme changes, while RGGI Allowances (RGAs) held their ground despite last week’s Q3 auction clearing failing to continue a 1.5-year streak of record settlements.
California, RGGI carbon market fundamentals to shift after mid-decade -analysis
The California cap-and-trade system will see allowance supply exceed demand in 2022 before switching later on this decade, while market fundamentals in the Northeast US RGGI scheme will move in the opposite direction, analysts said this week.
ASIA PACIFIC
Woodside admits offsets safer bet than CCS in final Browse LNG environmental plan
Oil and gas company Woodside Energy Group says offsets are likely to be an easier option to invest in than CCS in order to neutralise carbon emissions from its proposed Browse LNG development offshore Western Australia.
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CONFERENCE
One month until Carbon Forward 2022 – Europe’s leading environmental markets conference. Taking place in London and online from Oct. 12-14, don’t miss the chance to hear about the risks and opportunities presented by the world’s largest carbon markets – compliance and voluntary. Or come network with your industry peers and meet our sponsors and exhibitors. In-person passes are limited and going fast, so Register Now!
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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
True colours – Documents obtained by US congressional investigators show that oil industry executives privately downplayed their companies’ own public messages about efforts to reduce GHG emissions and weakened industry-wide commitments to push for climate policies. Internal Exxon documents show that the oil giant pressed an industry group, the Oil and Gas Climate Initiative, to remove language from a 2019 policy statement that “could create a potential commitment to advocate on the Paris Agreement goals.” At Royal Dutch Shell, an Oct. 2020 email sent by an employee, discussing talking points for Shell’s president for the US, said that the company’s announcement of a pathway to net zero emissions “has nothing to do with our business plans.” These and other documents, reviewed by The New York Times, come from a cache of hundreds of thousands of pages of corporate emails, memos and other files obtained under subpoena as part of an examination by the House Committee on Oversight and Reform into the fossil fuel industry’s efforts over the decades to mislead the public about its role in climate change, dismissing evidence that the burning of fossil fuels was driving an increase in global temperatures even as their own scientists warned of a clear link.
Gloom and Toomey – Republicans on the Senate Banking Committee took aim at US Securities and Exchange Commission Chair Gary Gensler’s plan to implement a new rule requiring disclosure of climate change risks during a hearing Thursday. The SEC voted in March to propose a new rule requiring public companies to report risks related to climate change and their own GHG emissions, in an effort to standardise such disclosures and provide investors with useful information. Sen. Pat Toomey of Pennsylvania, the committee’s top Republican, predicted that the Supreme Court would toss out the rule if it is ultimately implemented. Toomey pointed to the Supreme Court’s recent ruling in West Virginia v. EPA, which took aim at the ability of regulatory agencies to write rules on issues of major economic and political significance without clear statutory authorisation. (Market Watch)
Glossy brochure – The Ontario provincial government is arguing in court that its climate change mitigation efforts are actually a communications strategy and not a law, in a bid to protect itself from a class action suit, the Toronto Star reports. Seven young Ontarians are suing the provincial government for violating their rights by not adequately addressing its CO2 output. Lawyers for the right-wing Ford government likened the province’s climate plan to a “glossy brochure” rather than a law, and they told the court that Ontario doesn’t account for a significant portion of global carbon emissions and therefore is powerless to prevent the changing climate. The new target is “woefully inadequate,” lawyers for the young people argued, and puts the province on “a path to climate disaster.” The province did not argue that the target was sufficient, nor did its lawyers explain its scientific basis. Instead, they claimed the new target is merely aspirational, part of a plan that has no legal force.
EMEA
Romanian aid – The European Commission has endorsed a positive preliminary assessment of Romania’s first payment request for €2.6 billion, of which €1.8 billion in grants and €0.8 billion in loans, under the Recovery and Resilience Facility (RRF), the key instrument at the heart of NextGenerationEU. On May 31, Romania submitted to the Commission a payment request based on the achievement of the 21 milestones and targets selected in the Council Implementing Decision for the first instalment. They cover reforms in the areas of sustainable transport, decarbonisation and road safety, in the electricity market, in the replacement of coal in the energy mix, in improving tax and tax administration processes, in stepping up the fight against corruption, as well as reforms of the compulsory education system to prevent and reduce early school leaving, and of Romania’s audit and control system for the implementation of the RRF. With their request, the Romanian authorities provided detailed and comprehensive evidence demonstrating the fulfilment of the 21 milestones targets. The Commission has thoroughly assessed this information before presenting its positive preliminary assessment of the payment request.
Changing of the guard – The UK government’s energy bill is set to be paused or ditched completely as Prime Minister Liz Truss focuses on capping customers’ bills and reforming the UK’s electricity market, the i newspaper reports. Jacob Rees-Mogg, the new energy minister, told officials this week that he planned to effectively put on hold the policy currently going through the British parliamentary process. The legislation, proposed by Boris Johnson’s government, was wide-ranging and would have overhauled everything from CO2 in transport, to carbon capture, and civil nuclear power production. The new government is understood to be pushing for two big reforms. First, decoupling electricity prices from the global gas price – not least as renewable energy is now nine times cheaper than gas. The second change would be a move to so-called locational pricing to incentivise the private sector to build additional capacity. The national grid operator has argued that the switch would ease congestion in the UK’s transmission networks from energy-rich Scotland to energy-hungry England. Critics say a better solution is to invest in better infrastructure linking the two countries’ electricity networks. Separately, the government is set to meet with some of the country’s biggest power producers to push through a measure that would cap wholesale electricity prices starting this winter, Bloomberg reports. A deal could see Rees-Mogg sign long-term contracts with low-carbon energy sources like wind farms, nuclear plants, and biomass-burning stations to sell power at fixed prices in the coming weeks, providing long-term certainty for those producers. The UK wants to get the measure set up as soon as possible, potentially by Oct. 1, sources said. Among the companies leading the negotiations with the government are the UK units of RWE, Orsted, Vattenfall, and EDF. Local companies SSE, Drax, Scottish Power, and Octopus Energy are also involved.
Three’s companies – Germany is in advanced talks to take over Uniper and two other large gas importers in a historic step to avoid a collapse of its energy market, sources told Bloomberg. State ownership of Uniper, VNG, and Securing Energy for Europe, formerly Gazprom Germania, is the main solution under discussion, the people said. The government is understood to be considering buying Fortum’s controlling stake in Uniper for a nominal price and would then inject billions of euros into the company through a capital increase. That move would dilute the stakes of Uniper’s remaining outside shareholders. The exact specifics have yet to be agreed but a conclusion could be reached in the coming days, the sources said.
Giving up easy – The city of Copenhagen, often celebrated as one of the world’s greenest for its cycling culture and other initiatives, recently defaulted on its pledge to become carbon-neutral by 2025, the Conversation reports. This early failure in the global race to net zero emissions may foreshadow backtracking by other target-setters, indicating that pledges to cease contributing to climate change demand greater scrutiny. Since 2012, when Copenhagen launched its plan to become the first carbon-neutral city in the world by 2025, the city has enjoyed international recognition and a significant branding boost. It expects to reduce emissions by 80% by, for instance, switching its power and district heating systems to biomass, wind and solar, renovating buildings to make them energy efficient and improving public transport. The remaining emissions were supposed to be mopped up by installing carbon capture and storage technology at the local waste-to-energy plant. This would remove CO2 from the smokestack before it is emitted to the atmosphere, isolating it for later underground storage. But at the beginning of August 2022, the semi-public utility Amager Resource Center which manages the plant announced it was ineligible for national CCS funding. This funding, it argued, would otherwise have enabled them to capture CO2 generated by burning the city’s waste. And so, Copenhagen has given up on its pledge. Cities such as Glasgow and Helsinki, countries like Sweden and the UK, and companies including IKEA and Apple have all made similar pledges to be net zero by 2030, 2045, or 2050. Yet various reports and studies suggest that these pledges often skimp on important details, by failing to include progress reports or specify the emissions they target. Critics have warned that the idea of net zero may only serve to greenwash reputations and diminish the urgency around decarbonisation.
ASIA PACIFIC
Ammonia study – A second phase feasibility study into an ammonia supply chain from Australia to Japan will be undertaken jointly by Australian energy major Woodside, Japan Oil, Gas and Metals National Corporation (Jogmec), Marubeni Corporation, Hokuriku Electric Power, Kansai Electric Power, Tohoku Electric Power, and Hokkaido Electric Power, Mining Weekly reports. Woodside, Jogmec, Marubeni, Hokuriku Electric, and Kansai Electric last year conducted a feasibility study on the entire supply chain, including the production of lower-emissions ammonia in Australia from natural gas with CO2 abatement methods such as carbon capture and storage (CCS), carbon capture and utilisation (CCU), and bio-sequestration; marine transportation to Japan; ammonia’s use as a fuel for power generation and marine use; and financing.
Go sustainable – Singapore bank DBS is urging oil and gas companies to focus on sustainable fuels, particularly sustainable aviation fuels (SAF), low-emission biofuels, hydrogen and ammonia, Gasworld reports. But in its new net zero blueprint, covering nine key industrial sectors, DBS acknowledges it is ’neither realistic nor desirable’ to abruptly cut off fossil fuel supply without offering commercially-viable alternatives, while demand remains high. The banking corporation – which itself is committed to achieving net zero operational carbon emissions by the end of 2022 – is targeting 27.7 MtCO2e in 2030 and a significant cut to 3 MtCO2e by 2050 in the oil and gas (O&G) sector. To achieve its targets, DBS – which became a signatory of the Net-Zero Banking Alliance last October – will support clients to meet their transition targets by financing their decarbonisation efforts; reduce exposure, especially to high-emitting parts of the O&G value chain; and direct financing to companies that are diversifying away from pure O&G production.
Renewables boost – Indonesia has issued a regulation to encourage renewable energy use in one of the world’s biggest carbon emitters, including a plan to retire some coal plants early, a presidential decree said, Reuters reports. The world’s largest exporter of coal aims to increase the proportion of renewables in its energy mix to 23% by 2025, but has only reached around 12% so far. Coal currently powers around 60% of the country’s electricity needs. Indonesia set a goal last year to achieve net-zero emissions by 2060 and pledged alongside dozens of other countries to phase down coal use to help limit global warming to less than 1.5C above pre-industrial levels.
Green light to nuclear – China’s State Council has approved the construction of two nuclear plants, both in southeast provinces, in order to ensure energy security and advance green development, according to a report by Jiemian. The move came after Beijing in April gave green light to three nuclear power projects with a total of six reactors, the report said. China, which had a year-long moratorium on new nuclear projects after the Fukushima disaster, has at least 52 reactors under construction or planned, according to the World Nuclear Association.
New CCS project – Taiwan’s state-run power company has started working on a pilot carbon capture project at the Taichung Power Plant, the fourth largest coal-fired power station in the world, as part of its effort to achieve net zero by 2050, Central News Agency reports, citing Taipower officials. With an initial investment of NT$760 mln ($24.35 mln), the facility should be able to capture about 2,000 tonnes of CO2 per year by 2025, according to the report. Taipower is seeking ways to scale up the CCS project and promote the techniques at the island’s other power plants, the report said.
VOLUNTARY
Most at risk – Over 90% of the world’s largest companies will have at least one asset financially-exposed to climate risks such as wildfires or floods by the 2050s, data provided by S&P Global Sustainable show. And more than a third of those companies will see at least one asset lose 20% or more of its value as the planet heats up. The new S&P dataset aims to offer clients a way to predict the future financial costs of changing hazard exposure for 20,000 companies, with similar products unveiled this month by JPMorgan, Fitch Ratings and Morningstar in response to growing client demand. (Bloomberg)
Window is open – Gold Standard has today opened applications for investment funds to join the two-year pilot phase of new impact fund certification requirements. These requirements have been developed to support serious sustainable funds in measuring, managing and maximising the sustainable development impact of its investments. Gold Standard CEO Margaret Kim said: “The world urgently needs trillions of dollars to achieve the sustainable development goals, and the majority of the capital must come from the private sector, including impact funds. The new fund requirements from Gold Standard bring best practice in impact measurement, management and maximisation, to support fund managers in delivering credible contributions to the goals.” Gold Standard requirements ensure best practice impact investing that builds on IFC safeguards, the UNDP Equity Standard, OECD Blended Finance approaches and best practice in the market – providing support from initial strategy design, through project screening, feasibility, to implementation and exit. Impact Fund Certification certifies that a fund will deliver on its sustainable strategy, going beyond the more traditional environmental social, governance (ESG) model, which is focused on risk avoidance, and providing evidence of real contributions to climate and sustainable goals. Application of the fund requirements minimises non-delivery risks through the measurement of the actual outcomes at the level of the investee.
Win for Winrock – The US Department of Agriculture (USDA) has named Winrock International to implement the $20 mln Growing Value for Producers Through Increased Access to Markets for Climate-Smart Commodities project. The five-year project will support US farmers and ranchers to increase adoption of climate-smart practices and capitalize on their climate value by certifying and monetising results in commodity markets. Winrock’s American Carbon Registry (ACR) will lead the USDA project with support from partners Intertribal Agriculture Council, Riceland Foods, Arva Intelligence, and Blue Raster. It will offer financial support ($25-40 per acre per year) and technical support to producers to adopt practices and participate in the market through sales of the certificates.
AND FINALLY…
Pata-gone – Setting a new example in environmental corporate leadership, the billionaire owner of Patagonia is giving the entire company away to fight the Earth’s climate devastation, he announced on Wednesday. Founder Yvon Chouinard, who turned his passion for rock climbing into one of the world’s most successful sportswear brands, is giving the entire company to a uniquely structured trust and non-profit, designed to pump all of the company’s profits into saving the planet. “As of now, Earth is our only shareholder,” the company announced. “ALL profits, in perpetuity, will go to our mission to ‘save our home planet’.” Chouinard, 83, worked with his wife and two children, as well as teams of company lawyers, to create a structure that will allow Patagonia to continue to operate as a for-profit company whose proceeds will go to benefit environmental efforts. “If we have any hope of a thriving planet – much less a thriving business – 50 years from now, it is going to take all of us doing what we can with the resources we have,” said Chouinard in a statement. “This is another way we’ve found to do our part.” Chouinard’s family donated 2% of all stock and all decision-making authority to a trust, which will oversee the company’s mission and values. The other 98% of the company’s stock will go to a non-profit called the Holdfast Collective, which “will use every dollar received to fight the environmental crisis, protect nature and biodiversity, and support thriving communities, as quickly as possible,” according to the statement. Each year, the money Patagonia makes after reinvesting in the business will be distributed to the non-profit to help fight the environmental crisis. (Guardian)
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