Newsletters > CP Daily: Monday April 3, 2023

CP Daily: Monday April 3, 2023

Published 02:00 on April 4, 2023  /  Last updated at 02:00 on April 4, 2023  / /  Newsletters

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

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TOP STORY

Stationary EU ETS emissions in surprise fall in 2022, preliminary data shows

Verified emissions from stationary installations in the EU ETS dipped by 1.2% in 2022, according to preliminary but incomplete data published by the European Commission late Monday, with GHG output under the 18-year old market appearing to resume its long-term downtrend in a surprise year-over-year decline that most analysts did not see coming.

VOLUNTARY

VCM Report: Futures rally at end of quarter, boosted by CCP-label news

The quarterly corporate reporting deadline alongside the release of the ICVCM’s core carbon principles (CCP) triggered a bounce in offset futures over the past week even as spot prices barely budged, while there were further rises in prices of removal credits to extend a recent trend.

FEATURE: Are carbon markets worth saving? Experts explain why they answer ‘yes’

As the voluntary carbon credit landscape continues to face criticism, green-group experts are pondering whether the market could be worth saving and if there are aspects that should be maintained or tossed.

AMERICAS

Legal experts forewarn of litigation as Virginia’s RGGI repeal contrary to law

Environmental groups are warning of costly and unnecessary litigation as Virginia’s proposed RGGI repeal regulation is unlikely to withstand even cursory legal scrutiny, while opponents are backing the end of the so-called ‘tax’ that they say significantly increased electricity costs with little real-world CO2 reductions, according to public comments.

RGGI Market: RGAs lift to 7-week high as programme review meeting offers further clarity

RGGI Allowance (RGA) prices rose to a nearly two-month high this week after member states discussed their plans to potentially tighten allowance budgets under the cap-and-trade system, and as New York officials said they are designing an economy-wide carbon market with RGGI linkage in mind.

Analysts raise CCA forecast for 2023, dispel near-term RGGI upside

Average California Carbon Allowance (CCA) prices will skew slightly higher this year as speculators jump on regulatory news, while the outlook for financial players in the RGGI Allowance (RGA) market remains bleak in 2023, an analysis firm said in a recent report.

ASIA PACIFIC

AU Market: ACCU volumes rise as regulator expects issuance lag on HIR projects

Total traded volumes of Australian Carbon Credit Units (ACCUs) rose significantly over the past week as the government successfully passed its Safeguard Mechanism reforms through parliament, while the Clean Energy Regulator has warned of timeline blowouts on accrediting human-induced regeneration (HIR) projects.

More flexibility technologies needed to support China’s renewable power generation -analysts

A range of available flexibility technologies can help China’s power system accommodate the uptake of renewable generation, though more supporting policies are needed to create the conditions for such technologies to compete against coal power, according to analysts.

EMEA

Euro Markets: EUAs rise most in two months as market faces 24% auction supply drop

EUAs surged by the most in more than two months on Monday, reaching their highest in nearly three weeks amid rocketing oil prices and ahead of April’s drop in auction supply, and appeared to brush aside the publication of data that showed a modest decrease in emissions from covered entities last year.

BIODIVERSITY (FREE TO READ)

UK updates green finance strategy and aims to pilot new nature markets

The UK has published an update to its green finance strategy as well as a nature markets framework stating the intention to pilot new finance opportunities that may include biodiversity crediting.

Stock markets finally begin to consider biodiversity after major UN meetings, study finds

There is no indication that global stock markets have priced in risk from corporate biodiversity footprints in recent years, but that has begun to change after the high-profile UN summits in Kunming and Montreal, a study has found.

British state-owned bank eyes growing role in natural capital markets after first nature restoration investment

The UK Infrastructure Bank (UKIB) has announced a first £12-million investment in a major nature restoration project in Scotland amid plans to grow its role in markets that underpin positive climate and biodiversity outcomes.

Nature-based markets can help scale sustainability-linked sovereign debt solutions, report finds

Sustainability-linked sovereign debt-related (SLSD) bond issuances can grow 100-fold this decade to help address the crises trio of debt, climate, and nature, a report released Friday found, with linkages to nature markets seen as one of several steps that could help scale the instrument.

COMMENT

In defence of nature-based carbon offsets

Carbon offsets are not the solution to climate change, nor should they be the central pillar of any country or government’s net zero plans. But they are very important in the short and medium term because many emissions that cannot be reduced away can be offset, taking that damaging CO2 back out of the atmosphere, writes Ed Mitchard, chief scientist at UK-headquartered nature tech firm Space Intelligence.

ICYM

EU seeks views on 2040 emissions target, requires increase in removals

The European Commission launched a consultation on Friday as part of its preparation for proposing EU 2040 climate goals next year to ensure the bloc hits its binding net zero emissions goal a decade later.

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CONFERENCES

Carbon Forward Asia – May 2-3, Singapore/Online: Carbon Forward is coming to Asia! Join us in Singapore or watch the conference online, and gain valuable insights into the trends and developments in carbon pricing throughout the Asia Pacific region. We will discuss investment opportunities across compliance and voluntary carbon markets, as well as transport initiatives such as CORSIA and SAF for aviation and shipping sector programmes, the impact of the EU’s carbon border adjustment mechanism (CBAM), CCS crediting, developments under Article 6 of the Paris Agreement, corporate climate goals, and other exciting topics. We are curating a high-level programme for this rapidly-evolving region, with the agenda and speaker line-up to be released soon. Early Bird tickets are now available. Purchase yours now

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Carbon Pulse has teamed up with CME Group to provide its clients with regular updates on the global carbon markets. Check out these briefs for the latest insights on pressing trends and events impacting markets, published every other week. Registration required

INTERNATIONAL

Financial factions – Danish pension fund AkademikerPension may leave the UN-backed Net Zero Asset Owner Alliance because new requirements detailed in a position paper for its 85 members do not attach enough strings to owning the shares and bonds of publicly listed oil and gas companies, according to its chief investment officer, Anders Schelde. Hopes for more ambitious requirements were dashed by concerns among some of the coalition’s members that prescriptive goals could open them up to allegations that their industry was colluding and attract antitrust lawsuits, according to people familiar with the deliberations.The row is the latest in a string of policy splits among major climate coalitions of financial firms. (Reuters)

EMEA

Germany plans for more energy cuts – Germany’s coalition government plans to require the private and public sectors to reduce their energy consumption by 26.5% by 2030 compared to 2008, a draft law seen by Reuters showed on Monday. Low Russian gas supplies last winter led to citizens and industry to cut energy use by 20%. The German cabinet is due to pass a new law making even greater savings obligatory for the public and private sectors, according to the draft law. Companies will have to use an energy management system to plan consumption. The draft law also sets reduction targets of 39% by 2040 and 45% by 2045.

Marin’s MarOUT – Finland’s main conservative party claimed victory in a parliamentary election Sunday in a very close three-way race in which Prime Minister Sanna Marin’s centre-left party was defeated. The centre-right National Coalition Party (NCP) won narrowly, likely signalling a more traditional shift in climate policy for the country than Marin’s government had set. She was aiming for Finland to become the first fossil-free society by 2035, whereas the leader of the NCP, Petteri Orpo, is seen to be more concerned about plugging national debt and the economy. Orpo will likely be against setting up a new European-wide fund for the EU’s Green Deal Industrial Plan and may not be willing to hand out generous clean energy grants and subsidies. He will have to choose with whom to team up for a majority coalition however, if Orpo sides with the Social Democrats’ party there will be clashes over budget, including potentially budget going for green subsidies. On the other hand, Orpo’s party could side with the Nationalist Finns Party, teeing up a tussle over different immigration stances.

Hydrogen Made in Italy – The European Commission approved a €450 mln Italian scheme to support the production of renewable hydrogen with the aim to foster the transition to a net-zero economy in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework. It will be open to companies of all sizes active in Italy and projects will be selected through an open competitive bidding process. The maximum amount of aid per project will be of €20 mln. The Commission also approved €30 mln for an Italian scheme to support commercial bus transport operators in the context of Russia’s war against Ukraine, in line with support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies. Beneficiaries will be able to receive limited amounts of aid in the form of direct grants.

Splitting the country – The era of nuclear power in Germany will end on April 15 as planned, the German environment minister has said, as reported by Clean Energy Wire. Steffi Lemke stressed that the phaseout would not endanger the power supply security in Germany or other countries, arguing that ending nuclear power will ultimately make the country a safer place. The renewable power industry welcomed the nuclear exit’s completion, stating that wind and solar power are ready to replace the reactors, whereas a survey suggests most people in the country appear to be sceptical whether the energy system is ready to run without reactors.

ASIA PACIFIC

Thai emissions – Thailand emitted 247.7 mln tonnes of CO2 last year, up 1.5% year on year as the country’s economy recovered from the pandemic, the government’s Energy Policy and Planning Office said, The Nation reports. The slight increase in CO2 emissions was caused by increased demand for energy due to the rebound in the services and tourism sectors triggered by the lifting of Covid-19 restrictions, said the office’s director general Wattanapong Kurowat. The transport sector emitted 79.6 mln tonnes of CO2 last year, up 14.9% year on year, while businesses and households emitted 13.7 mln tonnes of CO2, up 8.4% year on year, Wattanapong said. Industry and electricity production emitted 66.5 mln and 87.9 mln tonnes of CO2, down 6.7% and 3.2% year on year, respectively, he added. He said 42% of CO2 was emitted from fuel oil, followed by natural gas (30%) and coal (28%).

Shell won’t be right — Australia’s corporate watchdog, the Australian Securities and Investments Commission (ASIC) has confirmed it is investigating a complaint against Shell for alleged greenwashing. Advocacy group Comms Declare, which lodged the complaint to ASIC last year, released a statement, noting Shell may have breached sections of Australian Consumer Law by giving investors and customers the false impression that the company has a plan to be net-zero by 2050. Comms Declare Founder Belinda Noble said vague and meaningless net zero fantasies are being cynically deployed by fossil fuel companies to buy social licence. Greenwashing is one of ASIC’s enforcement priorities this year and has recently launched court proceedings against an Australian pension fund.

Green tender – India will issue tenders for the installation of 250 GW of green energy capacity by Mar. 2028, according to a government memo, as it looks to cut its emissions by 45% from 2005 levels, Reuters reports. After missing a target to install 175 GW in renewable energy capacity by 2022, India is now trying to boost non-fossil capacity – solar and wind energy, nuclear, and hydro power, and bio-power – to 500 GW by 2030. Its renewable energy capacity, excluding big hydro and nuclear power, exceeds 122 GW, while non-fossil capacity currently stands at more than 175 GW, according to government data as of February 28. The energy-hungry nation will issue tenders to install 15 GW of renewable energy capacity each in the first two quarters of this fiscal year, ending March 2024, followed by bids for 10 GW in the next two quarters, according to the memo. The world’s third-largest greenhouse gas emitter is also looking to boost the share of non-fossil capacity to 50% in 2030, from 42.6% currently. Coal currently accounts for over half of India’s 412.2 GW power generation capacity.

Thai green slurry – Japanese automaker Toyota has signed a MoU with Thailand’s Siam Cement Group (SCG) and the Commercial Japan Partnership Technologies (CJPT) cooperation to work together to achieve carbon neutrality in Thailand. Toyota released a statement Monday saying the three companies would expand and deepen their collaboration to promote carbon neutrality work in energy, data and mobility, and using the country’s natural resources. Examples they gave including producing hydrogen from unutilised resources such as biomass and food waste, as well as hydropower and solar, supplying more zero-emission and hybrid EVs to the domestic market, and cutting emissions in the country’s telco sector.

Reopen to individuals – China Hubei Emissions Exchange, one of the country’s eight pilot markets, has begun receiving applications again from individual investors to open their accounts, according to a statement recently released by the exchange. From Mar.22, individuals wishing to participate in the market are allowed to fill out their applications, and they should hold an investment account in securities, futures, or carbon trading for at least one year, with transaction amounts over the past year reaching no less than 500,000 yuan ($72,570), according to the latest rules announced by the Hubei bourse. The review of account opening applications for both individual and institutional had been suspended for almost half a year on the exchange since Nov. 4 last year, due to system upgrades and optimisation.

AMERICAS

Method accounting – Changing New York’s unique accounting method for GHG emissions has become an unexpected issue in state budget talks, sparking concern among environmental groups. The proposal has support from the fossil fuel industry and would likely enable more combustion of natural gas and other fuels for longer than currently envisioned under New York’s climate law in a plan approved in December. Gov. Kathy Hochul is supportive of the change, which was also proposed in a bill sponsored by Energy Committee Chair Sen. Kevin Parker last week, and it has come up in budget negotiations. Some other Senate Democrats are not supportive of the proposal. New York is the one of only two jurisdictions to use a 20-year time horizon to account for the damaging effects of planet-warming gasses instead of 100 years. It makes methane, the main component of natural gas, more potent than under the longer accounting timeline. Backers say this more accurately reflects the short-term warming impact of GHGs and the urgency around reducing emissions. However, the governor indicated in her State of the State address in January that she wants to link a proposed cap-and-trade policy for emissions in New York with other states, and directed state agencies to analyse the cost of using international accounting methods compared to the state’s law for cap-and-trade. California and other markets all use the 100-year timeline and incorporate the benefits of capturing emissions from biofuels before they’re burned. Meanwhile, after blowing past the Apr. 1 deadline to approve a new state budget, Hochul on Monday proposed to extend the existing state budget plan until Apr. 10 to keep the government up and running as she and legislative leaders continue to debate the details of a final deal. In addition to the global warming potential time horizon issue, the governor’s office and legislature are deciding how prescriptive lawmakers should be in crafting New York’s forthcoming economy-wide cap-and-trade system. (Politico, City & State New York)

Homer runs – Homer City Generation on Friday informed wholesale grid operator PJM it will decommission all of its Homer City coal units, with operations winding down over the next 90 days. Homer City based its decision on several factors including the low price of natural gas, a dramatic spike in the cost of its ongoing coal supply, unseasonably warm winters, and increasingly stringent environmental regulations. In addition, Homer cited the ongoing uncertainty regarding the state’s implementation of its RGGI-modelled cap-and-trade regulation, which is currently blocked by a court order. Homer City is the largest coal-fired power plant still operating in Pennsylvania at nearly 2 GW. (PA Environment Digest Blog)

That’s baby stuff – California State Senator Henry Stern (D) has cancelled the Apr. 10 presentation of his GHG reduction legislation (SB-12) before the Senate Appropriations Committee. A spokesperson for Stern told Carbon Pulse the senator is on paternity leave, and that the legislation would be heard at a later date. SB-12 would raise California’s 2030 GHG reduction target to 55% below 1990 levels from the current goal of at least 40%, and Stern previously floated incorporating amendments to the bill that would reform the state’s WCI-linked cap-and-trade regulation.

VOLUNTARY

Barely credible – Just 5% of the UK’s largest public companies have published climate transition plans that are “credible” or sufficiently detailed under the British government’s Transition Plan Taskforce’s (TPT) draft disclosure framework, despite most businesses saying they are committed to slashing their GHG emissions, according to research from consultancy EY that found that despite about 80% of FTSE 100 companies having already disclosed some sort of plans that includes public targets to achieve net zero emissions by 2050, only 5% would comply. As part of a raft of green measures announced on last week, the UK government said it would consult later this year on making transition plans — where companies outline how they will cut emissions and the associated costs of doing so — mandatory for all large companies, including private businesses, without justification. (FT)

AND FINALLY…

Methane blockers – Cows in the UK could be given “methane blockers” in an attempt to reduce their greenhouse gas emissions, the Guardian reports. The proposal comes following a consultation that began in August on how new types of animal feed may be able to reduce methane emissions from cows, which are the major cause of livestock emissions. Farmers welcomed the proposal but green campaigners were sceptical, arguing that the move would not address the other major environmental harms resulting from the beef and dairy industries and showed a fixation on ‘techno fixes’ rather than reducing consumption.

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