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TOP STORY

FEATURE: Going beyond – SBTi guidance seeks to trigger interest in contribution claims

The Science Based Targets Initiative (SBTi) expects its upcoming beyond value chain mitigation (BVCM) guidance to stoke interest in contribution claims, a form of corporate climate action that will suit some companies more than others, and will not always translate into increased carbon credit use.

EMEA

Hungary introduces €40/tonne carbon tax, 10% transaction fee for recipients of large volumes of free EU Allowances

The Hungarian government announced this week by decree it will introduce a tax of €40 per tonne of emissions for EU ETS participants that receive a large volume of free carbon allowances, as well as a 10% transaction fee on those permits.

Euro Markets: EUAs extend pre-August rally, reaching 1-month high as spread to UKAs widens 25% in a week

European carbon prices rose 6.3% this week, reaching their highest in a month on Friday as buying continued ahead of August’s annual drop in auction supply, further widening the EUA premium to UK Allowances, while energy prices gave up early gains amid profit-taking ahead of the weekend.

RWE posts 17% drop in EU ETS-covered fossil power output in H1

RWE reported a drop of almost one-fifth year-on-year in power generation covered by the EU ETS during the first six months of 2023, in preliminary results published Friday.

Steelmaker SSAB misses profit forecast with demand set to remain low

Swedish steelmaker SSAB highlighted weak demand in Europe as the core reason for a halving of its operating profit in Q2, with global steel prices also falling, the firm said in quarterly financial results published Friday.

VOLUNTARY

Brazilian state’s public defender launches legal action over alleged REDD+ project ‘land theft’

The public defender of a forest-rich Brazilian state has launched legal action against several organisations and a local government over allegations of land theft linked to a REDD+ project.

Kariba, other Zimbabwe carbon projects pause technical activities, but otherwise functioning as normal -operator

The Kariba REDD+ project and other voluntary carbon initiatives in Zimbabwe have paused their technical activities in line with a government directive, but monitoring and other operations continue as normal, the operator of the large forest protection scheme said Friday.

Stakeholders urge Uganda govt to bolster support for global carbon markets participation

Energy sector stakeholders have urged the Ugandan government for bolstered support to solidify the country’s standing in global carbon markets, as ministers acknowledged domestic fragmentation and a need for more regulatory enhancements.

Cookstove market in hot water if Swiss caution spreads, warns project developer

The fast-growing cookstove carbon credit market will be crippled if there is a shift to an overly cautious calculation of avoided emissions that is already used by some countries, a project developer has warned.

Carbon developer seeks partnership with landowners in western Brazilian state

A Switzerland-based carbon project developer announced Friday it was planning new activities that comply with Verra and Gold Standard methodologies in a heavily deforested Brazilian state by partnering with local landowners.

ASIA PACIFIC

South Korea should relax carryover rules to vitalise ETS, think-tank says

South Korea should gradually ease carryover restrictions to better reflect the current national emissions reductions target and boost liquidity in the domestic emissions trading scheme (ETS), a government-run think-tank has called for.

Standard Chartered eyes role as Vietnam plans carbon trading exchange

Standard Chartered’s Vietnam branch has offered to provide sustainable products and services for the Southeast Asian nation’s future emissions market, according to local media reports, as regulators get on with the task of building a carbon exchange.

CN Markets: CEA price holds above 60 yuan despite shrinking liquidity, CCER trading volume hits a new low

CO2 allowance prices in China’s carbon market remained above the 60 benchmark over the past week despite a sharp decrease in trading volume after the government released the latest carryover rules for unused permits, while liquidity continued to shrink in the national offset market.

INTERNATIONAL

Stalemate as G20 fails to make progress on renewables, fossil fuel phase-down

G20 energy ministers wrapped up their meeting in Goa on Saturday without any progress on ambition to ratchet up renewable energy production and cut the use of fossil fuels.

Compliance demand expected to drive new wave of investment in carbon markets in the next 18 months, panellists say

A major step-change in demand for carbon credits is coming in the next 18 months from large emitters, due to increasing compliance and societal demand, a bank’s head of environmental markets told a conference Thursday.

As global temperatures soar, UN-backed initiative recognises media’s pivotal role in shaping public perception, govt response

(Free read) – As global temperatures rise to record levels, a UN-backed initiative has recognised media’s pivotal role in both shaping public perceptions to heatwaves and climate change and influencing the response of policymakers.

Former Shell global environmental products head joining Mercuria

Shell’s former manager of Global Environmental Products is joining Mercuria in a similar role.

AMERICAS

Brazil ETS regulation to reach Congress in August, faces new opponent

Regulatory language introducing Brazil’s ETS to Congress is expected in August, but an Indigenous group is vowing to oppose the measure over a lack of consultation, according to local media reports.

Producers boost CCA holdings, financials lock-in profits but scoop ACP, RGGI contracts as prices bolt higher

Emitters once again added to their California Carbon Allowances (CCAs) net length as prices made new year-to-date highs ahead of ARB’s public workshop next week, while speculators took profits, choosing to reduce CCA net positions but continuing to amass RGGI Allowances (RGA), data from the US Commodity Futures Trading Commission (CFTC) showed Friday.

BIODIVERSITY (FREE TO READ)

A voluntary biodiversity market is coming to Australia with or without the nature repair market bill, experts say

Australia can expect to see a voluntary biodiversity market emerge in the not-too-distant future whether the government is successful at passing its nature repair market legislation or not, experts told a conference this week.

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Premium job listings

• *Land Use Methodology Development Manager, GreenCollar Group – Australia/US
• Senior Program Officer, Forest Carbon Innovation Operations, Verra – Remote (Worldwide)
• Senior Engineer, Oil & Gas Sector with Carbon Market and Upstream Emission Reduction Project Expertise, ICA-Finance – Oslo
• Senior Program Officer, REDD+ Remote Sensing and GIS Analysis, Verra – Remote (Worldwide)
• Senior carbon/commodities trading analyst, RepuTex Energy – Melbourne

*New listing

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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

Cool it – At the 14th Clean Energy Ministerial, COP28 President-Designate Al-Jaber called on nations to support the Global Cooling Pledge. This initiative, a collaboration between the UNEP and the COP28 presidency, focuses on offering sustainable cooling solutions to vulnerable regions, preserving food and vaccine integrity, and reducing emissions. The pledge covers five main areas: nature-based solutions, super-efficient appliances, cold chains for food and vaccines, district cooling, and national cooling action plans. Al-Jaber emphasised that cooling access is crucial for climate mitigation and adaptation, stressing its significance for low-income communities particularly affected by heat. Highlighting sustainable cooling’s importance in cutting GHG emissions and improving healthcare access, Al-Jaber urged countries to endorse the pledge before COP28.

EMEA

Seal the deal – French energy company Engie and the Belgian government are set to sign contractual documents setting out the terms and conditions for restarting two nuclear reactors Doel 4 and Tihange 3 in the winter of 2025, EurActiv reports. In June, Belgium and Engie signed an agreement on the extension of the two plants after they decided on the extension in January due to the uncertain future of the country’s energy supplies. Now, the agreement is set to be signed on Friday.

More moola – Italy needs to invest €118 bln annually to decarbonise its economy but lacks the financial strategy to attract funds from private investors and to allocate money to specific measures, climate change think-tank ECCO said. In its energy and climate plan sent to Brussels this week, the Italian government forecast total investments worth €830 bln in the period 2023-30 to help phase out fossil fuels, increase the use of renewable energy, and cut carbon emissions. “The document lacks details on how much money will come from the state coffers, how to draw private investments and which incentives and tax breaks could be used,” ECCO said in its report. Italy needs a strategy to mobilise substantial private financial resources to accompany public funds made available by the European Commission through its Recovery and Resilience Facility (RFF) and REPowerEU schemes, ECCO added. Italy is due to receive €191.5 bln in grants and cheap loans through 2026 from the EU’s RRF in what is seen as a once-in-a-generation opportunity to revitalise a sluggish economy. However, bureaucratic incompetence and a lack of expertise at managing such projects are making it increasingly difficult for the country to make use of the EU funds on time. ECCO also called on the government to be more ambitious in the roll-out of renewable energy sources, in the phase out of natural gas and coal and in shifting to electric cars. (Reuters)

Markets magic – Germany’s pro-business FDP party political group backs an expansion of emissions trading both domestically and EU-wide as a more cost-effective means of reaching climate goals, DPA reports. The news agency compiled the party’s 101 responses to questions submitted by campaign group Friday’s For Future. The FDP, led by finance minister Christian Lindner as a junior government coalition member, strongly favoured such policies to enable the market to respond and have a technology-neutral response to tackling climate change. One response suggested Germany could go faster than the EU as a whole in pricing road transport and buildings emissions – Germany’s fixed nEHS carbon price mechanism is due to evolve into a free-floating system from 2026, a year earlier than the second EU carbon market is scheduled to launch. The FDP also noted that introducing a speed limit to Germany’s autobahns would have little effect on limiting emissions, and reiterated its opposition to the Greens-led economy ministry plans for a €30 bln power price subsidy for the nation’s industry.

Retrofailure – An alliance of more than a dozen NGOs in Germany has voiced “great sorrow” about a looming collapse of sustainable building retrofitting in the country, arguing this could threaten climate targets, jobs and social peace. In an open letter to the government and the parliament, the alliance – which includes environmental NGOs Bund, Nabu, WWF, consumer protection organisation vzbv, and industry associations such as energy efficiency initiative Deneff – said that orders for building modernisation have “massively declined or come to a halt altogether”. Applications for facade renovations, insulation, and heat pumps have gone down significantly, the alliance added. This drop could lead to higher building emissions and to a rise in energy costs that would burden poorer households in poorly insulated homes even more – possibly leading to “massive social upheavals”. “In the skilled trades, there’s a risk of layoffs. Companies that built up capacities based on political signalling will not be able to maintain them due to a lack of demand,” the alliance said, calling for a subsidy programme in the building sector. A lack of skilled workers could then also threaten long-term modernisation and construction targets. The alliance said it would be “an illusion” to believe that high energy and CO2 prices alone could lead to higher energy efficiency. The country needed a “schedule for retrofitting the entire building stock”, with respective changes to subsidy schemes, financing frameworks, regulative law and tenancy law, the group added. (Clean Energy Wire)

ASIA PACIFIC

Green investment – SK Innovation, owner of South Korea’s top refiner SK Energy, will invest more than 1 trillion won ($780 mln) in three green businesses including hydrogen and ammonia, bioenergy, and carbon capture and storage (CCS) by 2026, Business Korea reports, citing industry sources. It plans to spend half of the investment on hydrogen and ammonia projects over the coming four years, the report said. In addition, SK Innovation will allocate 33 bln won for the development of domestic waste gasification technology to produce bioenergy and another 10 bln won for CCS-related projects.

Good in Gujarat – Carbon credit seller and consultancy Creduce has partnered with India’s Gujarat Ecology Commission through an MoU to monitor and support mangrove habitat plantation, aiming to restore 10,000 hectares of coastal areas in Gujarat. This initiative addresses concerns that by 2070, half of India’s mangroves might be affected by climate change. Creduce will offer project development, monitoring, and credit trading assistance for the initiative.

Going deeper – China has begun drilling another hole more than 10,000 metres deep in the southwestern province of Sichuan in the hope of finding a large natural gas reserve, South China Moring Post reports. The initiative, arguably the most difficult drilling project in the world, is being conducted by PetroChina Southwest Oil and Gasfield Company. This could be the second ultra-deep well drilled in China, after the first project was initiated in the petroleum-rich Tarim Basin region, the report said.

Isolated Australia – Australia may face reduced international flight frequencies due to its long-haul, high-polluting routes being seen as easy cuts to meet environmental targets, warns the Australian Airports Association (AAA). While mandatory emissions reduction schemes for global aviation are still under negotiation, Australia might be “priced out” of the international aviation network when carbon pricing and targets are implemented in the upcoming decade. The AAA emphasises that due to Australia’s geographical location, maintaining international flights is crucial for migration, tourism, and business. The association suggests bolstering the local sustainable aviation fuel (SAF) industry to prevent the country’s isolation, and for the Australian government to advocate for the nation’s aviation connectivity and focus on reducing short-haul flights in other regions. (Guardian)

AMERICAS

Hot water – The US Department of Energy on Friday proposed energy efficiency standards on water heaters it said would save consumers $11.4 bln on energy and water bills annually. The standards on residential water heater efficiency, which are required by Congress, have not been updated in 13 years, Reuters reports. Water heating is responsible for roughly 13% of both annual residential energy use and consumer utility costs, the DOE said. The proposal would require the most common-sized electric water heaters to achieve efficiency gains with heat pump technology and gas-fired water heaters to achieve efficiency gains through condensing technology. The standards, to take effect in 2029 if finalised, are expected to save nearly $200 bln and reduce more than 500 Mt of CO2e over 30 years, about equal to the combined annual emissions of 63 mln homes, or approximately 50% of homes in the US, the DOE said. Tankless water heater maker Rinnai said the proposed standards for its products were “technologically impossible” and would reduce consumer choice. The administration of President Joe Biden has issued proposed or final efficiency standards for 18 product categories so far this year.

Offshore auction – The US Department of the Interior is holding its first-ever offshore wind auction next month, putting up 3.7 GW of potential power generation for lease, Utility Dive reported Friday. The three lease areas will be off Lake Charles, Louisiana, as well as two areas offshore Galveston, Texas, making up 102,480 acres and 96,786 acres respectively. The Bureau of Ocean Energy Management found 16 entities were eligible to bid for leases.

Workshop incoming – The California EPA and fellow state regulator ARB are holding a public workshop on the federal EPA’s Climate Pollution Reduction Grant (CPRG) programme on Aug. 3 from 1400-1600 Pacific time (0000-00200 Aug. 4 GMT). A number of state agencies will be on hand to discuss California’s current work under the CPRG and how it plans to move forward. The CPRG was created under the federal Inflation Reduction Act, and gives cities and tribal lands funding for climate plans.

SCIENCE & TECH

Red alert – July 2023 is set to be the hottest month in possibly thousands of years, says top NASA climatologist Gavin Schmidt. Preliminary estimates using combined ground and satellite data from the EU and the University of Maine reveal shattered daily heat records. While the El Nino weather pattern is emerging, Schmidt said it plays a minor role compared to the widespread warming observed, especially in oceans. He warned that the continued release of GHGs intensifies this warming. Schmidt estimates a 50-50 chance that 2023 will be the hottest year on record, while others predict the likelihood at as high as 80%. Moreover, 2024 is anticipated to be even warmer due to a peaking El Nino.

Meat meltdown – A new Oxford University study found that low-meat diets have environmental impacts about 30% less than high-meat diets, taking into account GHG emissions, land use, water use, water pollution and biodiversity impact. The researchers linked dietary data from over 55,000 individuals with data on the environmental impacts of the foods they eat, based on where and how the food is produced. The research shows that a big meat-eater’s diet produces an average of 10.24 kg of planet-warming GHGs each day, whereas a low meat-eater produces almost half that at 5.37 kg per day, and vegan diets are even less at just 2.47 kg a day.

More thaw – Stunning drone footage has revealed details of a one kilometre long gash in Russia’s Far East that forms the world’s biggest permafrost crater. The footage shows the ‘cave-in’, which began to form after the surrounding forest was cleared in the 1960s and the permafrost underground began to melt, causing the land to sink. Scientists say Russia is warming at least 2.5 times faster than the rest of the world, melting the long-frozen tundra that covers about 65% of the country’s landmass and releasing greenhouse gases stored in the thawed soil. (Reuters)

AND FINALLY…

Heatwave hiatus – Seville will introduce new ‘bioclimatic’ bus shelters next year to provide shelter to city dwellers seeking respite from heatwaves, after temperatures exceeded 40C in mid-July. The bust stops use a combination of circulating water, solar panels and sensors to reduce the temperature around them by up to 20C. They detect the presence of people using sensors and so trigger the cooling function, which is powered by the solar panels. The bus stops will function during the hottest part of the day in Seville, from 1pm to 7pm, and were designed by researchers from the Higher Technical School of Engineering at the University of Seville. The researchers also plan to use the technology to create climate shelters for children in schools.

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