Newsletters > CP Daily: Thursday December 15, 2022

CP Daily: Thursday December 15, 2022

Published 04:40 on December 16, 2022  /  Last updated at 00:38 on November 2, 2023  / /  Newsletters

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TOP STORY

PREVIEW: EU legislators gear up for ‘jumbo’ talks to reshape the carbon market

EU legislators will on Friday aim to negotiate to a finish EU ETS-related bills under the bloc’s overarching Fit for 55 climate policy package, with talks expected to last over one or even two nights.

AMERICAS

California’s ARB sets state on carbon neutral path by adopting 2022 Scoping Plan

California regulator ARB’s Board on Thursday voted to implement the state’s final 2022 Scoping Plan, reaching the culmination of a two-year development process and setting the state on track to become carbon neutral by 2045 and strengthen its suite of climate policies.

NA Markets: CCA momentum increases through option expiry, RGAs stay rooted after Q4 sale

California Carbon Allowance (CCA) prices continued to pick up steam through the option-expiry week, while RGGI Allowances (RGAs) were unchanged over the last five days despite volumes picking up after the prior week’s fourth quarter auction.

Alberta finalises stronger emissions benchmarks, higher offset usage for TIER regime

The Alberta government on Thursday announced that it will tighten output-based standards for both industrials and power generators in its Technology Innovation and Emissions Reduction (TIER) large emitter programme while also raising the scheme’s offset usage threshold and creating several new classes of credits.

Ontario installs large emitter programme updates to meet federal benchmark requirements

The Ontario Ministry of Environment, Conservation, and Parks (MECP) this week finalised amendments to increase the stringency of its Emissions Performance Standards (EPS) programme to avoid running afoul of Canada’s stricter CO2 pricing mandate.

Carney-chaired asset management firm opted to sell, rather than replant, deforested Brazilian land -campaigners

A Canadian-headquartered asset manager chaired by UN climate champion Mark Carney oversaw the clearing of thousands of hectares worth of tropical forest in Brazil and then opted to sell the land rather than reforest it, a campaign group has claimed.

US FTC seeks comment on carbon offsetting as it steps up greenwashing enforcement

The US Federal Trade Commission (FTC) on Wednesday asked for public input on its rules for making environmental marketing claims, including for carbon offsets and renewable energy, as it looks to bolster enforcement against greenwashing.

ASIA PACIFIC

New Zealand releases ETS price control settings, ignores Climate Change Commission recommendations

The New Zealand government on Thursday announced the country’s emissions trading scheme price settings between 2023-27, keeping much of the existing architecture in place and making only a marginal increase to the Cost Containment Reserve trigger price despite the recommendation from the Climate Change Commission to more than double it.

NZ Market: NZU price drops 12% in reaction to “status quo” ETS price settings

The spot price for NZUs fell by almost 13% to NZ$75 ($47.66) on Friday in reaction to the government keeping the ETS price settings mostly as is, bar slight adjustments for inflation.

Energy control legislation pushes back release of Safeguard Mechanism policy

The Australian government has delayed the release of its final policy proposal to overhaul the Safeguard Mechanism, due to its focus on its energy price legislation that has now been legislated by parliament.

China thermal power growth slows in November amid sluggish economic recovery

Growth in China’s thermal power generation slowed in November, though outpaced the growth of total power output amid mixed signs of economic recovery, government data showed Thursday.

Shenzhen releases methodologies for forest sinks and bike-sharing, complementing local offset scheme

The environment regulator in Shenzhen, one of China’s economic powerhouses, has launched offset methodologies for forest carbon sinks and bike-sharing, the latest move in an emerging trend for regional governments to expand their offset schemes.

Blue carbon startup secures credit certification for kelp forest restoration venture

A startup company has gained certification to use blue carbon credits for a venture in Japan that restores kelp forests and develops sea urchin aquaculture, it announced on Thursday.

EMEA

Euro Markets: EUAs give up early gains on rate hikes as traders eye ETS reform talks

EUAs gave up early gains on Thursday after equity markets tanked on warnings of further rate hikes, while traders switched their focus to Friday’s trilogue discussions on EU ETS reform and next week’s expiry of the December futures contract.

UK firms shop abroad for VCM credits due to poor domestic market -report

UK corporates are seeking to buy foreign carbon credits for offsetting because of a lack of high quality domestic  projects, according to a survey of listed companies commissioned by a listings firm.

VOLUNTARY

Brazilian company begins $100 mln deployment to generate Amazonian carbon removal credits

A Brazil-based startup on Thursday announced it has started to operationalise $100 mln towards reforesting degraded Amazonian land through a revamped methodology, and is already in a discussion to sell the resulting carbon removal credits at a level well above other VER prices.

Indigo Ag grants farmers $30/tonne for US soil carbon credits

US farm technology firm Indigo Ag on Thursday announced it has disbursed $3.7 mln to growers ahead of its second soil carbon credit issuance, with these payments having risen substantially since the start of the programme.

US soil carbon removals firm secures $12 mln to expand farmland reach

A two-year-old US-based soil carbon removal company on Thursday announced the close of a Series A funding round exceeding $12 million.

Two Frontier companies ramp up size, scope of tech-based carbon removal purchases

A pair of tech companies belonging to Frontier, a carbon removal funding initiative, announced Thursday investment of up to $11 million in seven projects that cover an increasingly wide array of tech-based CO2 removal activities.

BIODIVERSITY (FREE TO READ)

FEATURE: Piloting biodiversity credits sees different methodologies to leverage finance

Projects in the nascent voluntary biodiversity credit (VBC) market are already piloting different approaches to measuring biodiversity improvements ahead of larger standards that could emerge as early as next year.

Gabon, Mongolia team up with conservation groups to protect vast natural areas

Gabon and Mongolia have allied with conservation collaboration initiative Enduring Earth to protect large areas of land, oceans, and freshwater resources as part of their commitments to meet the 30×30 global natural protection target that is being negotiated at COP15 in Montreal.

Biodiversity Pulse Weekly: Thursday December 15, 2022

A weekly summary of our biodiversity news plus bite-sized updates from around the world. All articles in this edition are free to read (no subscription required).

COMMENT

Carbon market myths busted!

Much of the media and NGO community have recently muddied the waters around the global carbon market by repeating a set of myths around the market, writes Charles Bedford of Carbon Growth Partners.

Carbon copy: Biodiversity markets need to avoid repeating past mistakes

Financing for biodiversity is about to take off with the launch of biodiversity markets. They have the opportunity to learn from the successes and mistakes of the Voluntary Carbon Market by creating an effective biodiversity metrics framework, writes Torrey Sanseverino, a natural capital research associate with offset ratings agency BeZero.

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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

VOLUNTARY

Colossal CCS cash – US oil company Chevron has led a $318 mln fundraising round for Canada-based Svante, which develops filters to capture industrial carbon emissions for storage or reuse, the companies said on Thursday. The deal is the largest North American raise for a carbon capture tech company to date, JPMorgan told Reuters, with the bank acting as co-placement agent with RBC Capital Markets. Other investors to take part in the Series E funding round include Singaporean sovereign wealth fund Temasek, Samsung Engineering, and the venture capital arms of United Airlines and 3M.

Respect for the dead – Agropalma, the only Brazilian company with the sustainability certificate issued by the Roundtable on Sustainable Palm Oil (RSPO), is accused of a wide range of land-grabbing allegations in Para state, Mongabay reports. The claims allege that more than half of the 107,000 hectares (264,000 acres) registered by Agropalma was derived from fraudulent land titles and even the creation of a fake land registration bureau, which is at the centre of a legal battle led by state prosecutors and public defenders. Quilombola communities say that part of the area occupied by Agropalma overlaps with their ancestral land, including two cemeteries visited by Mongabay. In one of them, residents claim that just one-quarter of the cemetery remains and that the company planted palm trees on top of the graves, which the company denies. There are also other financial interests in the land at stake, researchers say, pointing to the company’s moves into bauxite mining and the sale of carbon credits in the areas subject to litigation, further intensifying the disputes.

Defi the odds – Crypto company KlimaDAO has published its Introduction to the Digital Carbon Market that aims to help readers orient the defi ecosystem and leverage the open-access tools that have been built. The report also looks to the future, sharing insights on the transparent, neutral, and public infrastructure needed to accelerate the growth of the market. KlimaDAO will also host a series of webinars, starting on Feb. 7 2023, to walkthrough and answer questions about the digital market.

Forest for the trees – Eastman, a global specialty materials company that produces a broad range of products found in items people use every day, announced that it has signed a partnership agreement with the environmental nongovernmental organisation SOS Mata Atlantica and Bracell, a soluble cellulose producer, to donate 15,000 seedlings in support of a programme designed to help restore the Brazilian Atlantic Forest. This environmental initiative will support Future Forests, a programme created to catalyze forest restoration in permanent protection areas, such as riparian forests and legal reserves in the Atlantic Forest biome.

Kodama kash – Forest restoration company Kodama on Thursday announced that it has raised $6.6 mln in a Series Seed funding round co-led by leading climate tech investors Breakthrough Energy Ventures and Congruent Ventures. In a press release, the company said it is developing a full-stack solution that improves operational efficiencies on the ground and utilises unmerchantable biomass.

EMEA

By next month – EU leaders meeting in Brussels for the quarterly European Council have tasked the European Commission to come up with a European industrial policy proposal by the end of January the Commission, according to interim conclusions posted by a Council spokesperson. The leaders agreed that the proposal should “ensure Europe’s competitiveness at a global scale”. It also asked the Commission to come up with a proposal and impact assessment on the structural reform of the EU’s electricity market in early 2023. The leaders also decided to continue working on a joint gas purchasing mechanism, closely monitor gas storage levels, and strengthen gas demand reduction objectives as part of a plan to prepare for winter 2023/24. The leaders also called for faster renewable energy deployment and finalisation of the revamps to directives on renewable energy (RED), energy efficiency (EED) and energy performance in buildings (EPBD).

Passing on the torch – Beside key decisions on emissions trading and border taxation, a bunch of files under the Fit for 55 climate policy package, which have also been discussed by EU co-legislators this week, can wait up until the end of winter holidays, an EU source told Carbon Pulse. The Czech presidency is passing on the torch to the Swedish one for the renewable energy directive (RED, at its third trilogue on Thursday), European green bonds (4th stage on Wednesday), the energy efficiency directive (3rd stage on Wednesday), and the alternative fuels infrastructure regulation (2nd stage on Tuesday). Talks on these topics, among others, will resume in 2023.

Ta-ta TTF? – Intercontinental Exchange has warned it may pull its gas trading market out of the Netherlands if Brussels presses ahead with a plan to introduce a cap on prices, the FT reports. The market, known as the Dutch Title Transfer Facility (TTF), is the region’s main centre for trading and setting the price of gas, and has become a symbolic issue as the bloc tries to respond to its broadening energy crisis. In an effort to quell the rapid rise in energy prices in the wake of Russia’s invasion of Ukraine, the EU has implemented a series of measures including mandatory gas storage and consumption reduction targets. But governments from countries including Belgium, Spain and Greece have insisted that a cap on the price of gas is also necessary to protect consumers and industry from the volatile prices. Others, including Germany and the Netherlands, fear a cap would threaten the security of gas supplies and put financial stability at risk because it would put unbearable costs on market users. On Tuesday, ministers failed for a second time to find a resolution to the debate and have delayed approval of the measure to their final meeting of the year next Monday. In a memo sent to member states on Thursday, and seen by the Financial Times, ICE warned that the rapid imposition of a cap would give it no time for customers to adapt or for the market operator to test the system’s resilience and risk management systems. A cap would likely force traders to immediately recalculate their prices, risks and costs, putting greater strain on the market, it said.

Just transition – The Portuguese regions of Alentejo Litoral and Medio Tejo and the city of Matosinhos will receive €223.8 mln under the EU Just Transition Fund. The money will help Portugal, where three of the largest CO2-emitting plants recently closed, transition towards a climate-neutral economy in a fair way.

ASIA PACIFIC

Module maverick — BP has made a A$20 mln ($13.6 mln) investment into Australian renewable energy company 5B Holdings, closing the company’s A$55 mln Series B funding round, which was co-led by existing investors AES Corp and Artesian. B5 said in a statement that BP’s cash will support the company’s technology development and growth, and accelerate its international expansion. BP Principal Jonathan Stone will join 5B’s board of directors, as part of the arrangement. The company has developed its 5B Maverick, which consists of up to 90 solar panels mounted on specially designed frames that can be unfolded and installed at speed. 5B has deployed its tech across more than 100 sites worldwide, with total generating capacity of 60 MW. The company is planning toe establish a manufacturing and assembly hub in North America. BP will explore the best opportunities to collaborate on the deployment of the Maverick tech on future projects, according to the statement.

Nordic deal – Norwegian oil giant Equinor has thrown its weight behind the offshore wind plans of Australian renewables company Nexsphere to build a 1 GW project off the coast of north-east Tasmania, Renew Economy reports. Nexsphere said the two companies were working up a deal, expected to be completed in the first part of 2023, to collaborate on the proposed Bass Offshore Wind Energy project (BOWE). The project was first proposed roughly a year ago by Nexsphere, formerly Brookvale Energy, for up to 70 wind turbines off the coast of Tasmania, with a link to connect at George Town, close to the proposed Marinus Link undersea cable to the Australian mainland. The project also has its eyes on the big green hydrogen and green ammonia facilities planned by the likes of Fortescue, Woodside, and Origin for Bell Bay, as well as the potential to export electricity through the Marinus Link to Victoria in the future.

Solar for ammonia – Petronas subsidiary and clean energy entity Gentari Hydrogen has inked a memorandum of understanding with Japan’s IHI Corporation to evaluate the feasibility of using solar energy producing green ammonia derived from renewables, The Edge reports. Under the memorandum, IHI and Gentari will consider a business model for ammonia production and a suitable site for solar power generation in Johor, where green ammonia will be produced and used locally for power generation and marine fuel supply, as well as exported to the Japanese and Asian markets. “In this study, IHI will fulfil the role of conducting technical studies and ammonia demand surveys for Japan, while Gentari handles the assessment of renewable energy supply and various facilities in Malaysia, as well as various market demand surveys,” said IHI in a statement.

Solar splurge in Italy – Hitachi Rail has signed a 20-year deal to buy solar energy in Italy, cutting around 7,000 tCO2e a year. The offtake arrangement with A2A Energy will result in 40,000 panels installed over the next two years on land and roofs of the Reggio Calabria, Naples and Pistoia production facilities of Hitachi Rail, a subsidiary of global conglomerate Hitachi Ltd. The solar photovoltaic panels, will cover more than 100,000 square metres, will capable of producing around 19 gigawatts a year of energy, which is equal to 60% of the average annual needs of Hitachi Rail’s six Italian sites (31 gigawatts per year). Hitachi Ltd has a global goal of achieving zero emissions from its main production sites by 2030 and carbon neutrality across its value chain by 2050.

AMERICAS

Charging ahead on EVs – The California Energy Commission on Wednesday approved a $2.9-bln investment plan that accelerates California’s 2025 EV charging and hydrogen refueling goals, Green Car Congress reports. The funds will support the deployment of thousands of zero-emission trucks, school buses, and transit buses to deliver clean air benefits to communities hit hardest by the impacts of pollution from medium- and heavy-duty vehicles. The 2022-2023 Investment Plan Update increases funding for the CEC’s Clean Transportation Program by 30 times compared to 2019 with an additional $2.4 bln from the recent state budget that will be spent over the next four years and with at least 50% targeted to benefit priority populations. CEC staff estimates the plan will result in 90,000 new EV chargers across the state, more than double the 80,000 chargers installed today. Combined with funding from utilities and other programs, these investments are expected to ensure the state achieves its goal to deploy 250,000 chargers by 2025.

Big deal for Big Trees – Big Tree Carbon, an indigenous-led, publicly traded natural asset development company based in Ontario, announced that it has signed an engagement letter with Colliers, a leading professional services and investment management company, and R&B Cormier Inc., a natural resource contracting and consulting firm, which will act jointly to provide consulting and analysis services to Big Tree forest carbon projects and future forest-based business developments. Together, Colliers/Cormier has been responsible for the analysis, marketing, and sale of C$140 mln in multiple carbon-based land sales encompassing approximately 180,000 ha in the past two years in Ontario.

CO2 in Mexico – HANetf has announced that it has listed the SparkChange Physical Carbon EUA exchange-traded commodity (CO2) in Mexico. It said demand for exchange-traded products in Mexico has been steadily growing, and the country is well positioned macroeconomically relative to other Latin American and emerging markets. CO2 provides exposure to physical EU Allowances (EUAs), with buyers able to actively withhold these permits from polluters, preventing the further release of GHGs. CO2 has also been listed in exchanges in the UK, Germany, and Italy.

AVIATION

Flight first – Virgin Atlantic has received £1 mln in UK government funding to operate the world’s first net zero transatlantic flight. The London to New York flight – which is set to take off next year – will be fully powered by sustainable aviation fuels (SAFs) instead of kerosene.

SCIENCE & TECH

Fast ferry – Ferry emissions could be cut by 97.5% by switching to a new type of electric hydrofoil ship that will be launched in Sweden, next year, reports the Royal Institute of Technology in Stockholm. The Candela P-12 Shuttle will be the fastest at 30 knots and longest-range at 60-nautical miles electric ferry in the world, and its carbon footprint over 30 years will be minimal compared to diesel ferries, the Institute claims. The hydrofoil technology lifts the boat on wings that ’fly’ under water, eliminating water resistance from pushing the hull through water. Energy consumption is reduced by 80% compared to conventional ships. Since the flying ferry doesn’t create any wake, Stockholm has granted it an exemption from the speed limits when the ferry starts its sea-trials, which will cut travel times from 55 minutes to 25 minutes from the suburb of Ekero to central Stockholm.

Low-carbon hydrogen – Honeywell and Johnson Matthey (JM), on Thursday announced they will work together to deploy low carbon hydrogen solutions, according to a press release. The companies will offer JM’s innovative LCH technology, coupled with Honeywell’s leading carbon capture technology to produce lower carbon intensity hydrogen (blue hydrogen) at scale. Ready to be deployed today, this offering will provide project developers a new option for producing clean hydrogen. The demand for hydrogen solutions is on the rise with public policies and funding mechanisms being put in place to encourage investment. An example is the US Inflation Reduction Act, which commits billions in production tax incentives for clean hydrogen producers.

AND FINALLY…

Kris Kringle’s carbon footprint – Santa’s carbon footprint has been calculated for the first time by TRACK from event:decision, the sustainability measurement tool for global events. Delivery by sleigh, recycling of toys to younger siblings, and clever carbon offsetting by elves means his footprint comes out at just over 10 grams of CO2 per child, equivalent to one scoop of ice cream considerably less than a gift ordered from Amazon.com. Santa travels some 160 mln km to deliver joy to 2 bln children each year. event:decision assumed Santa’s travel can be equated with a seat on a 747 plane for a similar distance, but without sustainable aviation fuel. So that’s 18,400 tCO2e. Whether that’s all from reindeer methane is unclear. Santa’s cabin at the North Pole is reputed to be only 232 sq metres, and heating that in such a cold place isn’t cheap. The event:decision team understands Santa uses renewable sources for his energy, but we can still add in approximately 10 tCo2e. Toys that Santa delivers are made by the elves from recyclable materials wherever possible with no batteries included. All toys he delivers are played with for some time and then hopefully passed on to younger siblings or someone who might appreciate them. Recycling of toys is a very sustainable solution. How the elves make so many toys in such a small space is a mystery, but event:decision have learned that the elves plant a new tree for every one that they use in manufacturing. The team at event:decision finally arrived at 20,000 tCO2e all in.

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