Newsletters > CP Daily: Wednesday February 8, 2023

CP Daily: Wednesday February 8, 2023

Published 01:32 on February 9, 2023  /  Last updated at 01:32 on February 9, 2023  / /  Newsletters

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

FEATURE: Sailing away – rising emissions from luxury yachts continue to evade EU ETS coverage

The EU’s recently agreed Fit for 55 climate package will expand the scope of the bloc’s emissions trading scheme (ETS) in both ambition and across new sectors such as shipping, but will continue to exclude polluting yachts that are estimated to emit over a million tonnes of CO2 a year and rising.

ASIA PACIFIC

Traders back rice offset suspension as China’s market downturn drags on

Carbon traders have expressed a lack of surprise at Verra’s suspension of the UN rice farming methodology and back whistleblower concerns, but say the issue will have limited repercussions for the wider voluntary carbon market and instead primarily add to woes in the Chinese market.

Hotly anticipated ACCU method left in the lurch in wake of Chubb review

A game-changing Australian methodology that was on the cusp of being implemented has been left in limbo in the wake of the independent review into the country’s carbon market, with its developers unclear on when the method will be finalised.

Analysis finds Safeguard Mechanism fair and effective, but technical and political questions remain

An advisory firm has found the Australian government’s overhauled Safeguard Mechanism policy to be “balanced, fair, and effective” and will create strong demand for Australian Carbon Credit Units (ACCUs), but noted several crucial sticking points in the proposed policy that remain to be addressed.

SK Market: Korean auction price continues to fall amid dwindling buy interest

South Korea on Wednesday sold fewer than 70% of the permits on offer at its monthly KAU auction, with the clearing price continuing to fall as the national carbon market has been hampered by the oversupply of CO2 units.

VOLUNTARY

South Pole explores ways to keep Kariba REDD+ scheme viable amid credit price slump

South Pole is exploring additional ways to support the Kariba REDD+ project in case it receives low revenue through the carbon market going forward, the company told Carbon Pulse.

Bank-led carbon credit transaction network prepares to move beyond pilot trades

Nine global banks invested $45 million in a new carbon credit transaction network on Wednesday, providing details on plans to expand the platform beyond pilot deals to help scale the voluntary carbon market and make it easier for their customers to participate.

Startup attracts French multinationals to be part of €11 mln biochar venture

A startup has raised €11 million for its biochar carbon removals venture, the company said on Wednesday, attracting three major French firms to be part of what is claimed as Europe’s largest Series A round in climate tech.

Ratings firm downgrades three Brazilian hydropower projects in latest update

A rating agency has downgraded three Verra-credited hydropower projects in Brazil to a low likelihood of achieving stated carbon avoidance claims, and continued to keep the projects on watch for further review.

EMEA

EU nations signal backing for ETS reforms, lead lawmaker sees Parliament following suit

A strong majority of EU nations on Wednesday signalled their approval of the provisional deal on ETS reforms, while the Parliament’s lead lawmaker on the issue expects similar levels of backing from MEPs.

Euro Markets: EUAs end day little changed as EU signals Fit for 55 approval and trade data delayed

European carbon prices ended the day almost unchanged on Wednesday amid relatively light volume attributed to the market’s waiting for the European Parliament to approve market reforms, while the publication of a key dataset detailing positions in the market was delayed due to technical issues.

AMERICAS

Judge in Pennsylvania RGGI lawsuit favours arguments by power generators

The Pennsylvania Department of Environmental Protection (DEP) on Wednesday sparred with three natural gas-fired power generators in their lawsuit against the state’s RGGI-modelled cap-and-trade regulation, with one Commonwealth Court judge appearing to side with the fossil fuel companies’ argument that the power sector scheme will cause emissions leakage.

California offset issuance dives to 7-mth low, DEBs total plummets

California granted the fewest number of compliance offsets since July over the past two weeks, with only a tiny portion of these accruing direct environmental benefits (DEBs) to the state, according to data from regulator ARB published Wednesday.

INTERNATIONAL

Power sector CO2 emissions hit new high in 2022 but possible tipping point ahead due to renewables growth, IEA says

Global CO2 emissions from power generation reached an all-time high in 2022, mainly on the back of growth in fossil fuel-fired generation in the Asia-Pacific and worldwide power demand edging up, but aggressive renewables capacity build-out means that electricity emissions will stabilise at around the same level over the next three years, the International Energy Agency (IEA) reported on Wednesday.

Companies more likely to prepare climate transition plans but full disclosure lags -report

Less than 1% of nearly 19,000 companies involved in a survey had fully disclosed information on all indicators that benchmark their progress on meeting climate goals, according to a report from non-profit climate disclosure group CDP, on Wednesday.

AVIATION

ICAO says airline passenger demand to eclipse 2019 levels this year

UN body ICAO on Wednesday said airline passenger demand is expected to completely rebound from the COVID-19 pandemic this year and rise above 2019 levels, which suggests that carriers could accrue some pilot phase compliance obligations under the CORSIA offsetting scheme.

BIODIVERSITY (FREE TO READ)

New South Wales environment laws failing to protect koala populations, report says

A new report has found that legal protection for Sydney’s koalas are woefully inadequate and will fail to halt the decline of the iconic species, urging the New South Wales state government to close environmental loopholes and ensure regulations are applied consistently.

COMMENT

Voluntary carbon markets – still broken but signs of a breakthrough?

Voluntary carbon markets have come under fire in recent weeks with questions raised of the merits of a range of projects across the world. While the headlines are of course disappointing and knock confidence in the sector as a whole, the greater scrutiny is welcomed to ensure carbon credits deliver the climate impact they are designed to offer and to provide sufficient return on capital to carbon-reducing projects to stimulate more such projects, writes Louis Redshaw of Redshaw Advisors.

ANNOUNCEMENT

Call for Expression of Interest to join the Climate Action Data Trust User Forum

Climate Action Data Trust is launching a Call for Expression of Interest to join the CAD Trust User Forum. We are looking for a variety of stakeholders across the carbon market value chain, from both the public and private sector. Applicants who meet the necessary criteria are encouraged to submit their interest online.

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CONFERENCES

North American Carbon World (NACW) 2023 – Mar. 21-23, Anaheim: For 20 years, the NACW conference has been the place for carbon professionals working in North American carbon markets and climate policy to learn, collaborate, and network. Taking place Mar. 21-23 in Anaheim, California, NACW 2023 will dive into new policies and developments that will shape and scale carbon markets and climate solutions with integrity, ambition, and equity. Register now to gain actionable insights for bold climate solutions and participate in premier networking opportunities with an active and engaged audience to strengthen your organization’s strategy for navigating the carbon landscape.

European Climate Summit (ECS 2023) – Mar. 28-30, Lisbon: Registration for the 5th edition of the European Climate Summit organised by IETA and partners is open. The ECS brings together leading private sector experts and policymakers from both the carbon and energy world, to analyse and discuss the current developments and pressing challenges. The summit provides a discussion and networking forum for policymakers, business leaders, and innovators involved in building, scaling, and collaborating on markets for net zero. The event will feature high-level plenaries, cross-cutting deep dives, interactive side events, and quality networking opportunities. Registration here.

ANNOUNCEMENT

Call for Expression of Interest to join the Climate Action Data Trust User Forum. Climate Action Data Trust has launched a Call for Expression of Interest to join the CAD Trust User Forum. The Initiative is looking for a variety of stakeholders across the carbon market value chain, from both the public and private sector. The purpose of the User Forum is to act as a market sounding board for the Council and the Technical Committee on business, policy, and technical matters. CAD Trust is a decentralised meta data platform that links, aggregates and harmonises all major carbon registry data to enhance transparent accounting in line with Article 6 of the Paris Agreement. Deadline for Applications: Feb. 15, 2023.

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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

Here comes the hydrogen – Canada’s agreement to supply Germany with green hydrogen received a boost as provincial regulators gave environmental approval to a $6 bln project that would produce the fuel in Nova Scotia, Bloomberg reported Wednesday. The move clears the way for EverWind Fuels to begin construction in the first half of the year, with ammonia deliveries to German utilities Eon SE and Uniper SE slated to start by 2025, the company said Tuesday. The project’s first phase would produce 200,000 t/y, before ramping up to full output of 1 Mt of green hydrogen and ammonia by 2026, the company said. The project marks a step forward for the hydrogen supply agreement that Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed in August. Hydrogen burns hot enough to be used in steel production and is seen as a key fuel for helping curb industrial emissions.

Coal conundrum – Coal power plants are a major contributor to climate disruption — but current policies give just a 1 in 20 chance of phasing them out by 2050. According to a study published on Monday in the journal Nature Climate Change, growing calls for an end to the use of coal — and even widespread global agreements to stop burning the fuel for electricity — won’t be enough to keep the world from burning coal through mid-century, The Hill reported on the same day.  Instead, doing so will require more hands-on regulation and policies, the scientists found. They noted that such policies might have to include global bans on mining the fuel. Their study showed why exiting coal — an agreed-upon international community goal since the 2021 UN climate change conference — is such a heavy lift.

AMERICAS

One step forward, one step back – US President Joe Biden touted the 2022 passage of the climate-focused Inflation Reduction Act and criticised Big Oil profits, while saying oil would be needed “for at least another decade” in his State of the Union address Tuesday night, Climate Nexus reported. Connecting the devastation wrought by across the country by “record floods, droughts, storms and wildfires” to climate change, Biden touted IRA provisions aiding recovery in investment in climate-resilient infrastructure along with “clean energy to cut pollution and create jobs in communities often left behind.” Biden also criticised Big Oil for making “$200 billion in the midst of a global energy crisis” while “invest[ing] too little of that profit to increase domestic production.” Biden said the US. will “need oil for at least another decade … and beyond that,” slammed oil companies for using “the record profits to buy back their own stock, rewarding their CEOs and shareholders.” Biden has previously called for taxing what he described as Big Oil’s “windfall of war” and Tuesday night called for quadrupling taxes on corporate stock buybacks. Biden also called out Republicans whose districts have benefited from the IRA despite their votes against it. Of his “Republican friends who voted against [the IRA] I still get asked to fund the projects in those districts as well, but don’t worry,” Biden said. “I promised I’d be a president for all Americans. We’ll fund these projects. And I’ll see you at the groundbreaking.” Climate campaigners 350.org criticised Biden’s assertion that oil will need to remain for at least a decade, noting his administration’s approval of ConocoPhillips’ $8 bln Willow Project in Alaska, which would be the largest oil and gas development on federal land. Renewable non-profit organisation ACORE also argued the clean power growth envisioned by the IRA will only occur if the government enhances and expands the nation’s electrical transmission network, “which is inefficient, balkanised, and antiquated in much of the country.”

LCFS workshop – California regulatory ARB on Wednesday announced it will hold an all-day public workshop on Feb. 22 regarding potential changes to the Low Carbon Fuel Standard (LCFS) programme. In the morning, staff will present additional information on the potential credit generation opportunities that may affect LCFS carbon intensity targets, including stakeholder feedback from previous workshops. Staff will also present preliminary fuel mix and cost outputs from the California Transportation Supply (CATS) model presented at the Nov. 2022 workshop. In the afternoon, staff will present concepts related to streamlining implementation.

California DAC’in – Carbon TerraVault Holdings, a subsidiary of California Resources Corp., on Wednesday announced it has assembled a consortium of organisations across industry, technology, academia, national labs, community, government, and labor, to pursue US Department of Energy funding under its Regional Direct Air Capture (DAC) Hubs Initiative to create the California DAC Hub, the state’s first full-scale DAC plus storage (DAC+S) network of regional DAC+S hubs. DAC+S is a solution that can remove and then permanently store atmospheric CO2 using low carbon emission energy and provide economic benefits to surrounding communities. California DAC Hub will help accelerate the Golden State’s climate leadership and achieve its carbon neutrality goal, and prioritise surrounding under-represented California communities through transformative benefits potentially including local air quality improvements, from helping maximise the use of renewable energy; utilisation of reclaimed water and/or production of new water; quality union jobs in construction and low carbon energy technologies; and science, technology, engineering, and math and energy transition education programs.

Lawsuit looming – The North Dakota Industrial Commission voiced unanimous support Monday to move toward filing a lawsuit challenging Minnesota’s carbon-free electricity legislation, with North Dakota’s governor arguing the neighbouring state is overreaching, The Bismarck Tribune reported the same day. Minnesota Gov. Tim Walz is expected to sign a bill that requires Minnesota utilities to transition to 100% carbon-free electricity by 2040. The bill would prevent North Dakota utilities from exporting power generated from coal and gas to Minnesota. North Dakota exports about 50% of its electricity supply, with the vast majority used in Minnesota, according to the North Dakota Lignite Energy Council. North Dakota Gov. Doug Burgum, who chairs the state’s Industrial Commission, said state leaders tried unsuccessfully to urge Minnesota to amend the bill so it would not affect North Dakota utility companies. North Dakota officials will continue to work with Minnesota to attempt to reach an agreement to avoid a lawsuit, Burgum said.

Western workshop – Alberta’s industrial carbon pricing mechanism, the Technology Innovation and Emissions Reduction (TIER) Regulation, is holding a compliance and emissions workshop on Feb. 23 from 0900-1200 Mountain Time (1600-1900 GMT). Large emitters and opted in facilities who are reporting for 2022 will be the focus for the first two hours and 15 minutes of the workshop. Compliance reporting requirements, quantification methodologies, verification, opting into regulation and application process, benchmarks and application process, TIER regulated facility performance, and key learnings and reminders for compliance reporting will get covered in the first section. The final 45 minutes will be covered key updates and requirements under the Alberta Emission Offset System.

ASIA PACIFIC

Coal rejected – Australia’s federal environment minister has officially blocked mining magnate Clive Palmer’s bid for a new Central Queensland coal mine, ABC reports. Tanya Plibersek said she rejected the project because of the risks it posed to the Great Barrier Reef, freshwater creeks, and groundwater. Last year, the newly installed minister made an initial decision to reject the project and sought public consultation. Her department received more than 9,000 public comments, with 98% in favour of blocking the project. Ms Plibersek’s decision is the first time in Australian history that a coal mine has been refused under national environmental laws. The planned mining site was just 10 km from the edge of the Great Barrier Reef world heritage area near Rockhampton. “I have decided not to approve the Central Queensland Coal Project because the risks to the Great Barrier Reef, freshwater creeks, and groundwater are too great,” Ms Plibersek said in a statement.

Urgent need – Taiwan’s ministry of economic affairs has launched several plans to help local fastener makers better cope with the impact of the Carbon Border Adjustment Mechanism (CBAM), a new carbon pricing framework in the EU, according to Economic Daily News. The government will provide partial subsidies for companies to improve emission accounting capacity and implement low-carbon practices, with an upper limit of NT$10 mln ($332,664) for each project. In 2022, Taiwan’s fastener exports totalled NT$186.9 bln, with the EU market taking up more than 30% of the total sales, according to ministry-run think tank Metal Industries Research & Development Centre.

EMEA

Greener Atlantic – The German and French economy ministers said “substantial progress” has been made in talks about transparency and cooperation on green subsidies between the EU and the US during a visit to Washington. Germany’s Robert Habeck, together with French economy minister Bruno Le Maire were  advocating for “joint green lead markets” for climate-friendly technologies instead of competing for investments through state intervention. Habeck said they had agreed to “create transparency on how the different subsidy systems work and how the amounts are to be roughly measured,” with the US promising to keep the EU informed about its subsidy plans. Additionally, a “critical raw materials club” should reduce the dependence on important raw materials from other regions of the world, Habeck announced. (Clean Energy Wire, Die Zeit)

Italian idea – Italy intends to use funds coming from the EU under the so-called REPowerEU plan to completely wean itself off Russian gas and turn the country into energy hub for the bloc, PM Giorgia Meloni said in a statement. Meloni, who met on Monday with relevant ministers and the CEOs of energy groups Eni, Enel, Snam and Terna, mentioned the need to cooperate with Africa on energy supplies. With total funds close to €300 bln, the REPowerEU plan is aimed at ending the EU’s dependence on Russian fossil fuels and tackling the climate crisis. It includes about €225 bln of untapped loans made available under the NextGenerationEU pandemic recovery plan launched in 2021. The European Commission also proposed to fund it through additional €20 bln in grants from the sale of EU ETS allowances. (Euractiv)

Major boost – French oil firm TotalEnergies posted a record net profit of $36.2 bln in 2022, double the previous year, joining in the sector’s bumper earnings thanks to higher oil and gas prices since Russia invaded Ukraine. TotalEnergies’ Q4 adjusted net income was $7.6 bln, including a $4.1 bln impairment related to the deconsolidation of its stake in Russian gas firm Novatek. Similarly, Norwegian major Equinor also posted a record $74.9 bln adjusted operating profit for 2022 in results posted Wednesday, more than double its previous high. The oil and gas producer’s adjusted earnings before tax and interest for Q4 marginally rose to $15.1 bln YoY, beating analysts’ expectations. This follows soaring profits recorded by other oil and gas majors for 2022 including BP. (Reuters)

Drax dispute – Operators at one of the UK’s largest power generation facilities are set to begin a series of strikes this month over a wage dispute. A walkout by 180 workers at Drax Group’s power station in Yorkshire, which produces 6% of the country’s electricity, will begin on Feb. 20 and 27 with further dates over the following two months, according to a statement from the Unite union. The company previously offered an 8% pay rise which the workers rejected, citing the UK’s double-digit inflation rate. Drax said the offer was worth 10% as it would include a backdated period. The strike call at Drax’s power plant comes amid the worst industrial unrest in Britain in over 30 years with nurses, ambulance staff, railway employees and school teachers walking out and demanding higher wages. (Bloomberg)

VOLUNTARY

Three-in-one –Telus Markets, a technology firm specialising in commodity transactions, launched Tellus Climate Suite, a platform with three interoperable products that combine GHG accounting with digital marketplaces for streamlined operation and error-free data transfer, the company said in a press release on Tuesday. Users can purchase clean power, carbon offsets, and RECs from the platform, which has expanded functionality from the company’s existing Tellus PPA that offered clean power purchasing, the statement noted. “Up to now, sustainability teams had to go through a long process to identify and select technology solutions and digital marketplaces, ending up with a disconnected technology stack requiring significant management time and manual data transfer. With the launch of Tellus Climate Suite, for the first time these teams can leverage a single solution to manage and execute their organisation’s sustainability plans to help achieve their climate goals,” Chip Horton, CEO at Tellus Markets said.

SCIENCE & TECH

A(mass)ing the evidence – Enviva, the world’s leading producer of sustainably sourced woody biomass, along with the US Industrial Pellet Association, announced Wednesday that they welcome a recent study, titled “Impacts of the US southeast wood pellet industry on local forest carbon stocks.” The study has been peer-reviewed and published in a leading scientific journal, Nature, confirming that the wood pellet industry has met the overall condition of forest carbon neutrality in the US Southeast between 2000 and 2019. According to the International Energy Agency, if harvest volumes (for wood products and energy) and losses related to mortality and disturbances do not exceed the growth across the whole forest, there is no net reduction in forest carbon stock. The 2022 study in Nature additionally confirms, by data, that carbon neutrality guidelines have been met by biomass producers in the US Southeast, which is the world’s leading region for wood pellet production and export. Between 2000 and 2019, data and observations were collected from more than 19,000 forest inventory tracts maintained by the US Forest Service. At the completion of the study, researchers concluded that, “our estimates offer robust evidence that the wood pellet industry has met the overall condition of forest carbon neutrality.”

AND FINALLY…

Buffalo kills — New modelling from Charles Darwin University (CDU) researchers in Australia has found the control of feral buffaloes could be worth millions in carbon offsets, changing the economics of control programmes. The university said water buffalo control measures in the Northern Territory have helped protect vital ecosystems in the past but such programs are often too expensive to maintain for long, but CDU ecologists suggest that this would no longer be the case if it were possible to generate carbon credits by culling the feral animals. The researchers ran 20-year simulations of feral water buffalo populations to estimate how much methane production would be avoided on a parcel of land in the South Alligator River region of Kakadu National Park. The research paper, which was published this month in Wildlife Research, concluded that the potential value of the avoided methane emissions resulting from controlling water buffalo far exceeded the costs of applying aerial control operations. Limiting the increase of buffalo numbers through annual aerial control could avoid the release of more than 790,000 tonnes of GHG per year over the 20-year simulation, estimating a net worth of A$1 mln ($697,000) per year, after subtracting the cost of aerial control measures. The researchers cautioned that much more research is needed in this space and that the modelling was based on assumptions such as the carrying capacity of the landscape, which would have to be tested and examined further.  The Australian government and Adelaide-based project developer Northwest Carbon in 2011 released a methodology to earn credits for culling feral camels, but it was later rejected.

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