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TOP STORY

Euro Markets: Front-December EUAs breach €100 for first time despite EU approval of REPowerEU auctions

Front-December EUAs rose above €100/tonne for the first time in the European market’s 18-year history amid determined flurries of buying on Tuesday, as traders appeared to reject the short-term impact of the EU’s plan to front-load auction sales to fund the pivot away from Russian fossil fuels.

EMEA

EU nations approve REPowerEU deal to frontload carbon auctions

EU nations on Tuesday formally adopted the REPowerEU deal, a quicker-than-expected clearing one of the last hurdles for the legislation to pass into law that paves the way for officials to bring forward EUA auctions to raise an additional €20 billion to fund the package.

Engie’s EU ETS-covered power generation rises 8% in 2022

Power generation covered by the EU ETS rose 8% last year across Engie’s European portfolio, the company announced in full-year results on Tuesday, driven by a drop in hydro and nuclear output that saw its gas assets produce 10% more electricity year-on-year despite record high energy prices.

AMERICAS

California signals support for stronger pre-2030 LCFS targets, RNG phase out

California regulator ARB on Tuesday said a near-term step change in the carbon intensity targets of the Low Carbon Fuel Standard (LCFS) may be necessary to ensure price support and drive climate ambition, while it seeks to move forward with phasing out the ability of renewable natural gas (RNG) to generate credits.

Washington state asks court to dismiss power producer’s cap-and-trade lawsuit

The Washington Department of Ecology (ECY) asked a federal court to throw out a lawsuit against the state’s WCI-modelled cap-and-trade programme, arguing a gas-fired power producer’s claims of discrimination under the regulation are fatally flawed.

ASIA PACIFIC

India’s Article 6.2 listing can boost carbon markets, access to finance, but roadmaps now needed, analysts say

India’s publishing of a list of carbon credit activities that can be traded under Article 6.2 has been welcomed by local market observers as a further step in developing the country’s carbon market infrastructure with global links, while policy analysts posited that the Indian government could now outline specific roadmaps for each mitigation activity that was designated under the Paris Agreement provision.

Close call for foresters after NZ ETS rule change just before Cyclone Gabrielle

A rule change in New Zealand’s ETS that came into effect on Jan. 1 has spared foresters from potentially massive financial losses from damage caused from Cyclone Gabrielle, though the cyclone may still have significant impact on the market as affected carbon foresters will have to stop their accounting and NZU issuance until their forests have recovered.

INTERNATIONAL

Global methane emissions from energy inched up in 2022, but high fossil fuel prices make mitigation affordable -report

Global methane emissions from energy-related activity increased slightly in 2022 to reach nearly 135 million tonnes per year, gradually inching back towards pre-Covid levels and reflecting that output of the potent greenhouse gas is stubbornly not on track with the International Energy Agency’s (IEA) net zero emissions by 2050 scenario, the Paris-based organisation stated on Tuesday.

VOLUNTARY

Ratings firm puts six carbon projects on watch in latest review round

A carbon credit ratings agency has put six projects on watch for a potential changes in their scores as part of portfolio reviews, while upholding the majority of grades in its latest round.

AVIATION/SHIPPING

Japan’s ZIPAIR to offset emissions through CORSIA credits, tapping into VCM

Japanese low-cost airline ZIPAIR will begin offsetting emissions through the purchase of CORSIA eligible credits and the use of domestic J-Credits, it announced on Tuesday, bucking the emerging trend of airline companies shying away from carbon credits.

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CONFERENCES

Argus Asia Carbon Conference – Mar. 14-16, Sarawak, Malaysia: Organised by Argus Media in collaboration with the Ministry of Energy and Environmental Sustainability Sarawak (MEESty), and with host sponsor Samling Group, the Asia Carbon Conference will take place on Mar. 14-16 in Kuching, Sarawak, Malaysia. Join us for the first industry leadership conference for carbon offsetting and trading in Asia to get ahead of your competitors in a rapidly growing global market. This is your opportunity to interact, learn, and network, for the answers you need on fundamental questions about carbon offsets: how do they work, and how might they impact Asia? Find out more

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 extended to Feb. 28, 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

Biden and the bank – US President Joe Biden administration is about to undertake one of its most complicated international initiatives, installing a new leader at the World Bank who can steer the organisation toward a sweeping climate change agenda, Politico reported Tuesday. Bank President David Malpass’s abrupt announcement that he will step down from his post a year early opens the way for President Joe Biden to choose someone who embraces the new goal of fundamentally overhauling the bank’s work to focus more on climate and other global challenges. More than a dozen close watchers of the bank who were interviewed for this story said the rift, and now its resolution, allows the US to reshape the institution it helped launch nearly eight decades ago to tackle one of the world’s most intractable policy issues: climate change. The path ahead is littered with obstacles for the US. The Biden administration will need to identify a leader with the ability to wrangle a giant bureaucratic institution. It will have to guide the bank’s other leading shareholders, including China, through an organisational overhaul to focus on climate concerns on a much larger scale. And an expanded climate change agenda might eventually require a substantial capital increase from the bank’s 189 member countries — a move that could prove difficult since it would require approval of the US Congress, where Republican lawmakers have been critical of both the bank and the climate agenda.

Words are important – A key minister from UAE has called for the phaseout of oil and gas. Governments failed to agree on this wording at COP27 talks and this phrase is likely to divide nations at the next summit this year in Dubai in November. The UAE’s environment minister Mariam Almheiri told the Munich Security Conference: “We need the oil and gas sector to be with us. We need to shift the way they are doing business and we need to decarbonise what they are doing. We need to then phase out oil and gas in a just way.” (Climate Home)

Changing track – Mercuria, a Swiss commodities trader built on buying and selling oil, is looking to acquire solar and wind power assets. The trading house is also looking to invest in low-carbon transport projects and in supply chains for the metals needed for the shift to cleaner energies, co-founder and CEO Marco Dunand said in an interview with Bloomberg.

Shipshape emissions – The Maersk Mc-Kinney Moller Center for Zero Carbon Shipping is developing a tradable instrument based on the GHG intensity of marine fuel consumption, following the example of similar mechanisms in the utility and aviation sectors, according to project developers, S&P Global Commodity Insights reported Monday. Since the third quarter of last year, the Denmark-based research and development center has been designing a “book and claim” platform where shipping companies and cargo owners can digitally record emissions from their voyages. The emissions then will be tokenised and expressed in CO2e/Megajoules in units, exchangeable among project participants that can use this instrument in their carbon accounting. Frederik Jacobsen, a project manager at the center, said the system will allow those on the supply chain using more expensive low-emission fuels to sell their decarbonisation effects to those consuming conventional oil-based fuels. Such voluntary transactions would “funnel capital back to companies which are investing in green shipping capacity,” Jacobsen recently told S&P Global Commodity Insights.

EMEA

Pump jump – Sales of heat pumps rose by well over a third in Europe to hit a record high last year, according to industry analysis published by the European Heat Pump Association (EHPA), after government support and soaring fossil fuel prices boosted uptake of the technology. EU policmakers are counting on pumps that suck in heat from the air, ground or water and use a refrigeration cycle to transform it into home heat as a means to reduce CO2 emissions and also to cut dependence on imported fossil fuels. European heat pump sales totalled 3 mln last year, the EHPA said, citing data from 21 countries including non-EU Britain and Norway. That was a 37% jump from the 2.2 mln sold in 2021 in the countries – 16 of which have reported 2022 data, and five of which had not. (Reuters)

SAF deal – Sasol, the global chemicals and energy company, and Danish company Topsoe, a global leader in carbon emission reduction technologies, have signed a Memorandum of Understanding (MoU) with the intent to establish a 50/50 Joint Venture (JV) in 2023 to produce sustainable aviation fuels (SAF), according to a joint press release. Sasol and Topsoe seek to enhance and enable faster SAF production development through the establishment of a JV. The JV will produce SAF derived from non-fossil feedstock, utilizing green hydrogen, sustainable sources of CO2 and/or biomass based on Sasol’s Fischer Tropsch and Topsoe’s relevant SAF technologies. These unique and complementary technologies offer multiple pathways to SAF production at scale. The partnership between Sasol and Topsoe, through Sasol ecoFT, is already well positioned to be a strong player in this growing market through leading technological capabilities and collaboration with the aviation industry. Sasol and Topsoe have been strategic partners for more than 25 years.

ASIA PACIFIC

Urgent investment — Australia’s New South Wales is set to bear the brunt of reliability risks in the country’s main power grid, as mass coal-fired power exits hit before sufficient replacement capacity can be built, the energy market operator (AEMO) warned. The ABC reported that AEMO said that while the overall forecast security of the National Electricity Market had improved since last August, there had been a deterioration in the country’s most populous state. Driving the slip were delays to a new gas-fired power plant being built by the federal government at Kurri Kurri, near Newcastle, along with the planned closure of Australia’s biggest generator – the coal-fired Eraring – in 2025. AEMO’s boss, Daniel Westerman, used the findings to reiterate calls for the urgent development of new generation, transmission and long-duration storage to replace the coal leaving the system.

Building momentum – Bursa Malaysia has signed a memorandum of collaboration (MoC) with Malaysian Green Technology and Climate Change Corp (MGTC) to build and promote the local voluntary carbon market (VCM) ecosystem, following the launch of the Bursa Carbon Exchange (BCX) in December 2022, The Star reports. Bursa chief executive officer Datuk Muhamad Umar Swift said the three-year collaboration will focus on three main areas, namely, the development of a national VCM handbook, the creation of a directory of carbon industry service providers, and to hold the inaugural Malaysia carbon market forum this year. “Our partnership with MGTC is timely and significant in accelerating capacity building among key players in the VCM ecosystem and collaboratively advancing the nation’s green agenda. These joint initiatives with MGTC will help drive awareness, build know-how, connect participants and catalyse trading interest, which are important in building a successful carbon exchange that would elevate Malaysia’s position as a leader in environmental, social and governance-related offerings,” he said during the signing ceremony yesterday.

Not enough land –  China’s energy authority has called for further policy support for the renewable energy industry, as project developers are struggling to get access to land, according to Reuters. The rapid growth of the sector has put it into competition with other industries, particularly agriculture, for land use, making it tougher to win land rights for installing solar panels. Given this, the country needs to remove the hurdles to construction and promote integration with the grid to ensure its first batch of large-scale wind and solar power bases are put into operation on time, the National Energy Administration (NEA) said.

New forestry project – Dongzhu Ecological Environment Protection Co.,Ltd, a Shanghai-listed landscaping service provider, has partnered with a state-owned investment company to jointly developt a forestry project in the Xinjiang Uygur Autonomous Region, it said in a statement issued last week. Under the agreement, Dongzhu will be the main developer for the project, which will cover nearly 220,000 hectares of forest and 480,000 hectares of grasslands, according to the statement. The agreement will be valid for 31 years, and is conditional on the relaunch of the CCER programme, Dongzhu said.

AMERICAS

Defending the withdrawal – The chief executive of Vanguard has defended his decision to pull the world’s second largest asset manager out of an industry-wide alliance to tackle climate change, saying the group’s “voice was being drowned out,” the Financial Times reported Tuesday. In December, Vanguard resigned from the Net Zero Asset Managers initiative, a coalition of 301 asset managers committed to reducing GHG emissions. “We felt that our voice was being drowned out or confused,” said Tim Buckley in an interview with the Financial Times. Buckley added that Vanguard’s approach to managing climate change risks, which is focused primarily on company disclosure standards, “has not changed.” “We don’t believe that we should dictate company strategy,” he said, in his first public comments about the decision. “It would be hubris to presume that we know the right strategy for the thousands of companies that Vanguard invests with. We just want to make sure that risks are being appropriately disclosed and that every company is playing by the rules.” The decision to withdraw from the coalition has sparked fury among environmental activists already angered by the Pennsylvania-based asset manager’s refusal to rule out new investments in fossil fuels.

Failure to launch? – Trans Mountain purchased carbon credits from a tiny, non-functioning Alberta startup proposing to produce seaweed-based additives that reduce methane emissions from cows, Canada’s National Observer reported Tuesday. The federal Crown corporation, which is labouring under massive cost overruns on its Trans Mountain pipeline expansion project, purchased credits to offset some of its carbon emissions from Synergraze Inc. in 2021. Synergraze is seeking permission to build a seaweed-additive factory on a plot of agricultural land in East Sooke, British Columbia. Researchers have found that feeding some seaweed species to cows reduces how much methane they belch into the atmosphere. However, it is unclear whether Synergraze, a company owned by Alberta woman Tamara Loiselle that lists one employee, will ever get its project off the ground. The company has yet to obtain permission to build on the land from both the local land use committee and the provincial body that oversees farmland — let alone grow seaweed — and faces stiff local opposition.

VOLUNTARY

For green jetsetters – KlimaDAO and Fly Air announced Monday that they have partnered together to launch a first-of-its-kind fully automated carbon offsetting solution for chartered jet services. The partnership will enable the carbon emissions of flights to be automatically calculated based on the type of jet used and the distance travelled. This information will be utilised by the platform to ensure that sufficient compensatory measures are taken by Fly Air on behalf of its customers to mitigate the impact of the carbon emissions. The partnership will facilitate instantaneous offsetting of carbon credits via KlimaDAO, which is built on top of the public blockchain Polygon, meaning that the carbon credits that are retired are fully traceable and verifiable, including the amount, type, and vintage year of the credits used. Today, there are almost 25 mln carbon credits available within the Digital Carbon Market that can be utilized by projects looking to efficiently and transparently offset their carbon emissions.

Sustainable flight funding – In an effort to rally businesses and consumers, United announced on Tuesday that it has launched the United Airlines Ventures Sustainable Flight Fund, a first-of-its-kind investment vehicle designed to support start-ups focused on decarbonising air travel by accelerating the research, production, and technologies associated with sustainable aviation fuel (SAF). The fund starts with more than $100 mln in investments from United and its inaugural partners Air Canada, Boeing, GE Aerospace, JPMorgan Chase, and Honeywell. Through the fund, these and potentially additional corporate participants will invest alongside United in SAF technology and production start-ups identified by United. In the past two years alone, United Airlines Ventures has invested in start-ups such as Cemvita, Dimensional Energy, and NEXT Renewable Fuels. And in a first among US airlines, anyone who buys a ticket on the United website or app now has the option to contribute to supplement United’s investment in the fund. The first 10,000 people who choose to contribute will each receive 500 MileagePlus Miles as a thank-you.

SCIENCE & TECH

Tracking growth – The number of NatWest mobile banking customers using carbon tracking technology from Cogo has increased by 10%, to 334,500 active users, the company said on Tuesday. The initiative supports customers wanting to know more about how their spending decisions impact GHG emissions. The app also encourages users to choose greener options by providing tips and hints delivered through the app. The 2021 pilot showed the average user saved approximately 11 kg of CO2 emissions per month. “Providing a touchpoint with so many customers, banks have an important strategic role to play in helping the wider public address their own climate impact,” Emma Kisby, EMEA CEO of Cogo said in a statement.

AND FINALLY…

Never gonna give fuel up – Formula 1 “will never switch to electric”, Stefano Domenicali, president and CEO of the motor sport group, said in an interview published by Italian newspaper Il Sole 24 Ore on Sunday. To help lower emissions, F1 is developing a zero-emission petrol that “could be used by planes and vessels” as well, Domenicali said. Domenicali criticised politicians for setting impossible energy-transition targets and for having an ideological approach to electric, which has become “an indisputable dogma.” “It’s possible to reach zero emissions without changing engines or throwing away existing cars,” Domenicali told the newspaper. This week, the European Parliament signed off on a deal reached with member states last year that requires automakers to reach a zero-emission target by 2035 and to cut pollution levels by 55% this decade. (Politico)

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