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TOP STORY
ANALYSIS: EU thirst for LNG could keep emerging economies on coal for longer
In a knock-on effect of the European scramble to secure liquified natural gas, analysts expect key Asian economies will draw out their use of coal and oil for power generation as they prioritise security of supply, a move that could prop up global energy sector emissions for several years.
AMERICAS
New study questions integrity of California’s forestry offset protocol, details extensive over-crediting
An environmental group on Thursday highlighted findings of a new study that alleges California’s forest offset protocol overestimated the amount of carbon sequestered and made unsubstantiated additionality claims in one assessment area, resulting in the over-crediting of 100% of units issued at several sites.
California power emissions nearly flat in 2022, tick down in January
California electricity sector CO2 output ended 2022 just below year-earlier levels, while Jan. 2023 emissions were also slightly down year-on-year, according to data published Friday.
US Carbon Markets and LCFS Roundup for week ending Mar. 3, 2023
A summary of legislative, regulatory, and policy action on carbon, clean fuel standard, and clean energy markets at the US federal and subnational levels this week, including the Vermont Senate passing amended clean heat standard legislation, the referral of a voluntary carbon credit disclosure bill in California, and the announcement of a rulemaking process for Oregon’s cap-and-reduce system.
Emitters pounce on CCAs, while speculators return to RGGI in early February
The US Commodity Futures Trading Commission (CFTC) on Friday continued publishing delayed Commitments of Traders reports following a cyber attack on the agency’s third-party data provider several weeks ago, showing that compliance entities padded their net long California carbon positions and speculators picked up RGAs in early February.
Climate Action Reserve developing Guatemala forest offset protocol
Offset registry Climate Action Reserve (CAR) on Friday announced it will commence development of a forest carbon protocol specific to Guatemala, continuing the US-based standard’s trend of country-specific endeavours.
EMEA
EU to propose allocating portion of ETS revenues towards net zero “resilience” projects -leaked draft
EU member states will be forced to allocate a portion of their EU ETS auction revenues towards key climate projects under a new industrial strategy set to be proposed by the European Commission later this month, according to a leaked draft seen by Carbon Pulse on Friday.
German pushback delays vote on EU car standard, as bloc’s green legacy faces testing month
EU nations on Friday delayed a vote planned for next week to endorse a deal on CO2 car standards amid protests from Germany, complicating what had been seen as a mere formality in a busy month of work for legislators on the bloc’s climate policy.
Euro Markets: Buyers limit fourth successive day of losses as EUAs post biggest weekly drop in two months
European carbon prices weakened for a fourth session on Friday, posting a 5.4% weekly loss and falling to their lowest in more than two weeks, though buyers appeared to increase their interest and helped limit the day’s decline while energy prices fell for a fifth successive day.
ASIA PACIFIC
CN Markets: CEA volume rebounds, though momentum still lacking in China’s carbon market
Liquidity improved in China’s emissions market over the past week, with prices moving just marginally and observers keen to know whether an upcoming political event could shed some light on the developments of carbon markets.
Bursa Malaysia to auction credits from Cambodian, Chinese projects in inaugural auction
Two offset projects located in Cambodia and China will supply the inaugural Mar. 16 auction on BCX, Bursa Malaysia’s new carbon credit exchange.
PNG provides detail on carbon market regulations, but doubts linger of its ability to enforce them
The Papua New Guinea government has released details of its long-awaited carbon market regulations that are scheduled to be implemented by the end of the month, however there are doubts the new rules will settle long-running land rights and governance issues.
VOLUNTARY
Offset buyers prefer in-house due diligence, worry about issues “beyond carbon” -survey
Companies prefer to use in-house due diligence before buying carbon credits and are hesitant to trust rating agencies’ second hand analysis, according to a survey of market participants that identifies a potential obstacle to the scaling of the voluntary carbon market.
PNG REDD+ project downgraded by a rating agency
A rating agency has downgraded a REDD+ avoided deforestation projects in Papua New Guinea that has been in the media spotlight recently.
BIODIVERSITY (FREE TO READ)
France announces €100 mln for global forest protection mechanism
French President Emmanuel Macron has announced funding for a new forest protection scheme that will use scientific evidence to compensate countries via biodiversity certificates that are proven to have protected or restored their natural resources, aiming to resolve what he called an “absurd” current shortfall in funding to forest-rich nations offered by carbon crediting.
ANALYSIS: All sources of demand welcome to help build biodiversity market –experts
Leveraging demand from regulatory compliance may be key to building a robust market for biodiversity credits, some experts have said, pointing towards the potential for a softening divide between voluntary- and compliance-driven approaches.
Panama, EU announce major ocean protection commitments
At the Our Ocean Conference that opened in Panama Thursday, the host government announced it is expanding its marine protected areas to cover more than half the nation’s oceans, while the EU said it will spend €816.5 million this year for various ocean protection initiatives.
Carbon credit ratings agency eyes role in biodiversity market
Independent ratings could drive higher-quality biodiversity credits and contribute to greater transparency in the fledgling market, carbon credit ratings agency BeZero said in a research note.
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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
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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
Commenced in Canada – Canada on Friday published a framework for sustainable investing that outlines activities it considers consistent with the country’s climate targets, though some experts said the guidelines could prolong the life of polluting industries. The taxonomy report, produced by Canada’s Sustainable Finance Action Council (SFAC) and released by the Department of Finance, approves investment in two different categories for activities considered consistent with meeting the country’s climate targets. A ‘green’ label is awarded to activities that emit little or no carbon, such as solar and wind, or activities that enable them, such as hydrogen pipelines. Unlike the EU’s taxonomy, which was formalised last year, Canada does not give a green investment label to nuclear and gas. Canada’s is also one of the first taxonomies in the world to set criteria for ‘transition’ activities, which aim to decarbonise emission-intensive activities. The document excludes investment in new coal, oil and gas projects, but it does potentially include carbon capture and storage (CCS) upgrades to oil sand production, concrete production with sequestration, blue hydrogen production, and electrification of steelmaking. The report says all investment activities need to be consistent with Canada’s target to be net zero by 2050 and must address Scope 1-3 emissions. (Climate Home)
Cancelled in Canada – A major fossil fuel supplier and marketer in Canada on Friday cancelled its plans to build a renewable diesel refinery in Burnaby, British Columbia, calling out the US Inflation Reduction Act (IRA) as a cause for its demise. Parkland Corporation said it’s not going ahead with its 6,500 barrel-a-day facility because of uncertainty around the competitiveness of the renewable diesel, rising production costs, and the IRA. Tax benefits for green technology like renewable fuel plants, but also carbon capture and storage are now much more generous in the US than in Canada, posing a competition quandary for PM Justin Trudeau’s Liberal government. (Bloomberg)
X-energy gets the axe – A nuclear energy company is scrapping plans to build an advanced reactor plant in Washington state with Department of Energy (DOE) funds after it inked a separate deal to build a similar project in the Gulf Coast, E&E News reported Friday. DOE had planned to help fund construction of the $2.2 bln X-energy advanced nuclear project, which was to be operated by public utility Energy Northwest at the Hanford nuclear site as part of the department’s Advanced Reactor Demonstration Program. The plant in Washington state had a target start date of 2028. But the plans at the Hanford site collapsed this week following an announced collaboration between Dow Inc. and X-energy. According to that deal, the companies plan to deploy the nuclear company’s Xe-100 high temperature gas-cooled reactor at an industrial facility in the US Gulf Coast.
EMEA
Deep-sea power sharing – France and Spain announced a breakthrough in a long-running impasse over what would be their first undersea electricity link, a move that will nearly double the power exchange capacity between the two countries from 2,800 to 5,000 MW. Spanish competition watchdog CNMC and French energy regulator CRE gave the go-ahead to a new cost-sharing deal between the two countries for a project first broached in 2017 after a sharp increase in its estimated cost, EurActiv reports. The 400 km cable spanning from Spain’s northern coast to France’s western coast through the Bay of Biscay is now estimated at a total cost of around €2.85 bln, above the initial estimate of €1.75 bln, CNMC said. The EU will contribute at least €578 mln towards the cost and after discounting EU aid, the distribution of costs will be 54% for Spain and 46% for France, with the burden for Spain now slightly lower than what was agreed in 2017.
Savvy electricity – Hooking up millions of electric vehicles, heat pumps and other devices to the UK’s electricity could save up between £3.2 billion and £4.7bn a year by the end of this decade, Ofgem, the energy watchdog has predicted, reports the Daily Telegraph. That is compared to the alternative, which is keeping gas power plants running, reports the Daily Telegraph. Instead, Ofgem’s preferred proposals will give households a bigger role in fine tuning supply and demand for electricity, by consuming or generating power through smart devices such as batteries, electric cars and heat pumps when required. For example, electric cars parked in people’s driveways could be called upon to send electricity back into the grid when supplies are tight. According to the Climate Change Committee, there could be around 27.6 mln electric vehicles on Britain’s roads by 2035. This could provide a major boost and avoid the need to build extra nuclear or renewable generation, Ofgem said. The regulator also proposed setting up new bodies with responsibility for regional grid plans, forcing companies to share more data, and establishing a joined-up way for households to help supply energy back into the grid from their new smart devices.
Sky-high profits – Germany’s Lufthansa said it had delivered an “unprecedented” turnaround as it swung to a €1.51 bln profit last year in its annual results and expects a significant improvement in earnings this year, Reuters reports. Passenger numbers more than doubled and net revenue almost doubled from 2021, although the figures remain short of pre-pandemic levels. “Lufthansa is back,” CEO Carsten Spohr said in a statement. “In just one year, we have achieved an unprecedented financial turnaround … Demand for air travel remains high in 2023,” he added.
ASIA PACIFIC
Oh what a feeling — Australia’s leading car maker Toyota could face fines of up to A$50 mln ($33.7 mln) after Greenpeace reported the company to the country’s corporate watchdog for alleged greenwashing. AAP News reports that Greenpeace made a 25-page complaint to the Australian Competition Consumer Commission on Friday, outlining seven allegations against the car brand. Greenpeace Australia Pacific Campaign Director Lindsay Soutar said the group had concerns the company was not taking action to deliver zero-emission cars and was lobbying against a transition to EVs. The complaint, filed by legal group Environmental Defenders Office, Greenpeace alleges Toyota’s plan to reach net-zero by 2050 is misleading because the company has “no concrete plans” to achieve it and had few emission-reduction targets validated by industry groups. A Toyota spokesperson has denied the allegations, pointing to the company’s release of hybrid EVs as proof it plans to cut transport pollution. If the ACCC finds Toyota has misled Australians, the authority could ban specific advertising, issue fines or take the company to court.
Methane mitigation mechanism – Australia’s coal mines could achieve significant methane emissions reductions for just A$500 mln annually, approximately 1% of the annual profits of the Australian coal industry, according to a commentary from Ember, a climate think-tank. Integrating methane mitigation into the Safeguard Mechanism is a low cost and high return opportunity for Australia to tackle its growing coal mine methane problem, the commentary argued. The Australian parliament is currently considering reforms to the Safeguard Mechanism to incentivise Australia’s largest greenhouse gas emitters to reduce their emissions in line with Australia’s climate targets, and in light of Ember’s own research that revealed that Australia could deliver two-thirds of its commitment under the Global Methane Pledge by tackling emissions from coal mines, the parliament has a great opportunity to achieve rapid emissions cuts by integrating methane emissions measurement and mitigation into the Safeguard Mechanism.
Hydrogen plans – India is close to issuing guidelines for renewable hydrogen producers and tenders for electrolyser manufacturers to help disburse the government’s subsidy, Tarun Kapoor, according to energy transition adviser to Prime Minister Narendra Modi, S&P Global Platts reports. The country’s National Green Hydrogen Mission, released in January, is to provide $2.4 bln in funding support for renewable hydrogen production and electrolyser manufacturing, with a goal of delivering 5 million tonnes per year of green hydrogen by 2030.
Gimme money – Regulators in China’s Chongqing City have announced a set of guidelines for companies to use their right to the potential proceeds from forest sinks as collateral to get bank loans, as part of the local government’s effort to promote green finance, according to policy documents published earlier this year. Under the current rules, borrowers are required to claim clear ownership with valid documents recognised by the forestry department, and the expected amount of carbon credits should be calculated in accordance with the methodologies under the national voluntary programme (CCER) or the regional offset initiative (CQCER). Lenders may commission a third-party agency to assess the monetary value of forest sinks based on market prices in the national or local voluntary market, regulators said.
SCIENCE & TECH
New heights for hydrogen – A test flight over central Washington state marked the second significant, if early, milestone for hydrogen-powered aviation so far this year, Canary Media reported Thursday. Universal Hydrogen said it successfully flew a 40-passenger aircraft using primarily hydrogen during part of the 15-minute flight early on Thursday morning. The Los Angeles–based startup replaced one of the plane’s two turbine engines with a fuel-cell electric powertrain. The other conventional engine remained in place, though the pilot said he was able to reduce its use. The flight came just weeks after another hydrogen aviation startup, ZeroAvia, flight-tested its own prototype plane over the English countryside. The 19-seater flew for 10 minutes, making it the largest aircraft powered partly by hydrogen to take flight. That mantle now apparently belongs to Universal Hydrogen.
AND FINALLY…
BlocParty – US green building technology startup BlocPower has raised nearly $25 mln in equity funding and $130 mln in debt financing to retrofit tens of thousands of apartments and other dwellings with climate-friendly appliances, Bloomberg reports. The money will allow the New York-based company to expand the reach of its software platform, BlocMaps, which identifies buildings in need of retrofits and recommends the best technologies to lower GHG emissions. The company sells the platform to municipalities as software-as-a service. Once retrofits have been identified, BlocPower coordinates and finances the replacement of fossil fuel boilers, furnaces, and water heaters with high-efficiency electric devices in multi-family dwellings and other buildings. It also manages the installation of solar panels. The funding comes as the federal Inflation Reduction Act takes effect, providing billions of dollars for low- and moderate-income families to replace fossil fuel furnaces and water heaters. BlocPower says it collects any available rebates for electrification and passes the savings on to a building’s landlord. The burning of fossil fuels in buildings accounted for 13% of US greenhouse gas emissions in 2020, according to the EPA. In cities, commercial and residential buildings can account for a significant percentage of municipal carbon emissions. BlocPower said it has retrofitted more than 5,000 apartments and buildings to date, primarily in New York, and has signed agreements to electrify buildings in Ithaca, New York; Denver, Colorado; Menlo Park and San Jose in California; and other cities.
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