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TOP STORY
ICVCM unveils global benchmark for high-integrity carbon credits
The Integrity Council for the Voluntary Carbon Market has published the framework it will use to assess whether carbon credits meet its Core Carbon Principles integrity label, work that forges an uncertain path for many REDD projects and raises the bar on transparency.
AMERICAS
California carbon prices surge to all-time high after state floats steep allowance budget cuts
California regulator ARB on Wednesday presented several scenarios for removing cap-and-trade permits in order to hit the state’s more ambitious emissions reduction goals, sending allowance prices skyward as traders expressed surprise at the magnitude of the potential supply cuts.
California 2023 compliance offset issuance closes in to last year’s levels through July
California offset issuance is catching up to 2022 levels, with nearly half of the credits over the most recent period providing direct environmental benefits to the state (DEBs), data from state regulator published Wednesday showed.
California H1 power emissions plummet nearly 20% after meagre June total
California electricity sector CO2 output held at 10-year lows through the first half of the year as renewable and hydroelectric power generation remained high, according to data published Wednesday.
US forms methane emissions task force, reiterates prior mitigation commitments
US President Joe Biden’s administration announced a new Cabinet-level task force on Wednesday to help government agencies and stakeholders slash methane output, as it repeated previous steps the country will take to curb the potent greenhouse gas.
ASIA PACIFIC
NZ Market: NZU price rises 27% off the back of ETS price control change announcement
The spot price for NZUs has skyrocketed by almost 27% following the government’s announced changes to the ETS price controls and settings, however market participants have noted considerable uncertainty remains.
South Korea activates ETS price floor to stabilise carbon market as prices hit a new low
South Korea has set a temporary price floor for the domestic emission trading scheme (ETS) to stabilise the market, as allowance prices have crashed to unprecedented new lows.
Japanese startup launches new carbon exchange, keen on credit creation business
A Tokyo-based climate startup has launched a carbon exchange to vitalise the creation and distribution of carbon credits, with plans to set up offices in Southeast Asia and South America, it announced Wednesday.
Japanese renewables firm looking to expand biomass capacity in Vietnam, eyeing carbon credits
A Japanese renewables company is expanding its biomass production capacity in Vietnam where it plans to generate carbon credits for international trade as well as for use in the emerging domestic carbon market.
EMEA
ANALYSIS: Hungary could raise over €300 mln with new carbon levies, other member states unlikely to follow suit
Hungary could raise hundreds of millions of euros from its recently adopted carbon tax and free allowance transaction fee policy on operators that receive high volumes of EU carbon permit handouts, analysts told Carbon Pulse, though they do not believe it likely that other nations in the bloc will introduce similar regulation given the expected competitive disadvantage and costs for affected firms in the country.
Euro Markets: EUAs wipe out early gains, erase week’s increase as COT data shows funds building net length
EUA prices wiped out all this week’s gains on Wednesday after earlier climbing to their highest in five weeks, as position data showed investment funds had boosted their net long position to the most in more than three months, while natural gas prices continued to gyrate, gaining as much as 5.2% before also plunging to settle 10% down on the day.
EU steel association revises down 2023 outlook on sluggish demand
EU steel association Eurofer has lowered its 2023 consumption forecast for the 27-nation bloc, citing high energy prices, war-related disruptions, and sluggish demand prospects as resulting in a deeper-than-expected 3% recession for the ETS-covered sector, relative to 2022 levels.
VOLUNTARY
REDD+ sector needs non-market funding mechanism, according to green activists
The REDD+ market needs root and branch reform and a non-market funding mechanism, warns a green activist group that finds there is very little evidence the sector in its current guise has caused meaningful reductions in deforestation and degradation, abated global emissions, or contributed to the development of forest peoples.
German court rules against another company’s climate neutrality claim – NGO
A German regional court has ruled that a retail firm’s climate neutrality claims lack sufficient credibility, the latest in a series of cases brought by an NGO alleging that carbon credits underpinning such voluntary corporate claims are unfit for purpose.
INTERNATIONAL
Carbon markets to play important role in financing African clean cookstoves -IEA
Carbon markets will become important sources of funding to address the need for clean cooking projects, particularly in sub-Saharan Africa, according to an International Energy Agency (IEA) report published Wednesday.
BIODIVERSITY (FREE TO READ)
Australia lacks the seed supplies, knowledge for nature repair market, experts say
Australian supplies and knowledge of its native seeds are inadequate for the scale and demand necessary for the government’s proposed voluntary biodiversity credit market, according to experts.
International regulations miss 40% of species threatened by trade
International rules regulating wildlife trade overlook some 40% of plants and animals at risk from such trade because there is no established methodology to identify them, a study has found.
Think-tank releases catalogue of natural capital metrics, methods
Australian think-tank Climateworks Centre on Wednesday released the Natural Capital Measurement Catalogue (NCMC) as a consistent reference source for companies to measure, manage, and report on their natural capital assets.
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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
Nada in Nicaragua – The UN Green Climate Fund has suspended payments to a $117 mln forest protection project in Nicaragua over human rights concerns, the first such decision since its creation in 2010. An investigation by the fund’s independent complaint mechanism found a series of failures that could “cause or exacerbate” violent conflict between indigenous people and settlers. The Green Climate Fund (GCF) will not provide any money to the project managed by Nicaragua’s authoritarian regime until it fully complies with the fund’s rules, its board ruled at an annual meeting in July. This marks the first time the GCF board puts on hold an approved project over human rights concerns. The decision comes at the end of a process that took more than two years since a coalition of local and international NGOs filed a complaint. But the fund stopped short of entirely scrapping the project, as local activists requested. The Nicaraguan government now has the chance to make it compliant with the GCF rules. (Climate Home)
EMEA
Hydrogen strategy – The German government coalition has presented a long-expected update to its national hydrogen strategy with the aim of speeding up the development of a market for the fuel, which it sees as essential on the path to climate neutrality by 2045. The update doubles the 2030 target for domestic capacity of electrolysers to produce green hydrogen made from renewable energy to 10 GW, but says that Germany will have to import the majority of hydrogen to meet demand. It emphasises that direct state support on the production side will only be available for green hydrogen, but says that applications using hydrogen made from fossil fuels where CO2 is captured and then stored – so-called blue hydrogen – could also receive state support. Energy industry association BDEW welcomed the update, but called for a clear investment framework for companies, while environmental NGOs criticised the possible support for blue hydrogen. (Clean Energy Wire)
In wildfires – As the Mediterranean dry weather conditions and high temperatures are posing a severe threat to lives, livelihoods, and ecosystems, the EU used its civil protection mechanism to help. Bulgaria, Croatia, Cyprus, France, Italy, Malta, Poland, Romania, Slovakia, and Serbia are contributing to the mechanism’s response to the wildfires in Greece. In total, over 490 firefighters and seven planes have been deployed to different areas of the country. One EU liaison officer is supporting the coordination of operations in Greece and the EU’s Copernicus satellite mapping is providing damage assessment on several areas in the Attica region and Rhodes. In addition, two Canadairs from the rescEU reserve hosted by Spain are being deployed to northwest Tunisia. The EU commissioner for Crisis management, Janez Lenracic, said that “Together, we are deploying available resources to fight the fires and protect our citizens and landscapes”. “I would also like to express my heartfelt sympathy and support to the families and colleagues of the two Greek firefighters who lost their lives yesterday when their firefighting plane crashed on the Greek island of Evia,” Lenarcic added.
How to adapt – The European Commission adopted on Wednesday a new set of guidelines to assist member states in their national adaptation strategies, plans and policies. “The weather events many Europeans are experiencing these days will become more extreme and more frequent if climate change continues unchecked,” the commissioner in charge of the European Green Deal, Frans Timmermans, said. “Building on the EU’s Adaptation Strategy, the guidelines we have issued today will help all EU countries, regions and local administrations to plan effective adaptation measures to protect our citizens, businesses, cities and nature from the impact of climate change.”
Limit not a target – Bringing in a speed limit of 130 kmph across all of Germany’s motorways could result in nearly €1 bln in welfare savings, according to a new study, Carbon Brief reports. While more than 96% of German roads are subject to a permanent speed limit, just 30% of the 13,000 km network of autobahn has permanent or temporary speed limits. According to a new paper published in the Ecological Economics journal, bringing in a 130 kmph speed limit could bring about nearly millions in welfare savings from avoided CO2 emissions, along with a host of other benefits.
State aid – A €5 bln Czech scheme will support large energy producers in the context of Russia’s war against Ukraine. The aid will take the form of subsidised loans, to help companies meet the collateral requests in the energy trading markets, with the final aim of supporting the functioning of the markets and the supply of energy to the economy. The scheme expired on 31 December 2022. The EU Commission concluded that the Czech scheme was necessary, appropriate and proportionate to remedy a serious disturbance in the economy.
Come together – Europe has its first national carbon dioxide removal association: the Deutscher Verband fur negative Emissionen (DVNE), the body announced. The DVNE aims to inform the public about negative emissions and carbon dioxide removal. It is a multi-stakeholder platform to facilitate collaboration and the development of policies in Germany to realise net-zero by 2045 and net-negative thereafter, with 31 founding members.
AMERICAS
Canadian conflagrations – Emissions from the 2023 Canadian wildfires will at least double those from the rest of the economy, Bloomberg reports. Werner Kurz, a senior research scientist at Natural Resources Canada, says that preliminary estimates suggest around 1,420 MtCO2e have been released so far, which is much higher than in recent years. This wildfire season has been unprecedented, burning 11.7 mln hectares so far, about the land area of Ohio. Unfortunately, the season is hardly halfway through and there appear to be no signs of it slowing down.
Purge project – A coalition of conservative groups has assembled a plan to systematically target most of the US federal government’s work on climate and clean energy. It proposes a sweeping deconstruction of government programs that goes far beyond what former President Donald Trump attempted to do by targeting “deep state” employees in federal agencies. And it’s designed to be implemented on the first day of a Republican presidency. Called Project 2025, it would block the expansion of the electrical grid for wind and solar energy; slash funding for the EPA environmental justice office; shutter the Energy Department’s renewable energy offices; prevent states from adopting California’s electric car standards; and give Republican state officials more power to regulate polluting industries. It was written by hundreds of conservative policy experts, energy lobbyists, industry consultants and former Trump administration officials. If enacted, it could decimate the federal government’s climate work, stymie the clean energy transition and shift agencies toward servicing and nurturing the fossil fuel industry rather than regulating it. (E&E News)
Carbon fees for peace – Some COP26.7 bln ($6.7 mln) in revenue from the Q1 2023 collection of Colombia’s carbon tax will be invested in productive projects to replace illicit crops in various parts of the country, the Colombia in Peace Fund announced Tuesday, according to a press release from the South American nation’s president. The Colombia in Peace Fund (FCP) is a financial vehicle created from the signing of the Peace Agreement in 2016 that ended five decades of conflict with the Revolutionary Armed Forces of Colombia.
ASIA PACIFIC
CCS potential – A subsidiary of Japan’s Sumitomo Corporation has signed an agreement with Sharjah National Oil Corporation (SNOC), a major energy producer in the UAE, to conduct a joint feasibility study on the potential of carbon capture and storage (CCS), Sumitomo said in a statement released this week. The CCS project will capture CO2 from emitters in Sharjah and neighbouring emirates and store the CO2 in an on-shore mature gas field operated by SNOC, in order to expand CCS business and accordingly generate carbon credits, according to the statement. The gas field could be a competitive carbon sink for sequestration, due to its large storage capacity of over several hundred mln tonnes of CO2, Sumitomo said.
Cancelled – Canadian gas company Atco has announced it has scrapped plans for a commercial scale green hydrogen project in Western Australia, due to to transportation costs, RenewEconomy reports. The company had planned to build a 10 MW green hydrogen electrolyser next to the 180 MW Warradarge wind farm, which would enable the production of 4.3 tonnes of green hydrogen per year. The project was one of three green hydrogen projects which received grant funding by the Australian Renewable Energy Agency. However Atco said it has scrapped the project because it would involve trucking the hydrogen to points where it can be injected into the gas network, and will relinquish the A$28.3 mln it received from ARENA. Atco said it is still confident green hydrogen can be delivered, but said it needs to be located closer to heavy industry where the green hydrogen can be used.
Greener flight – China Southern Airlines has launched a voluntary carbon offsetting service for passengers to reduce the environmental impact of aviation emissions, it said in a Facebook post. The airline recently introduced a platform for passengers to buy domestically-issued CCERs to offer their carbon footprint, and is planning to kick off more initiatives to encourage emissions reductions, state-owned Guangzhou Daily Newspaper reports.
VOLUNTARY
Fine by them – DWS is in advanced negotiations with the Securities and Exchange Commission (SEC), with the aim of resolving the US regulator’s investigation into greenwashing allegations by September, Citywire reports. The German asset management firm made the statement as part of a mid-year update, which reflected an SEC investigation into DWS which has been ongoing since 2021. The investigation came in the wake of accusations by DWS’ former head of sustainability, Desiree Fixler, who accused the fund company of having made false statements on the subject of sustainability. German officials also searched the premises of DWS and Deutsche Bank in Frankfurt last year. Reuters recently reported that the ongoing negotiations is not expected to result in a significant fine for the German firm.
Last resort in Rio – Anglo-Australian miner Rio Tinto said it would miss its 2025 decarbonisation target unless it turned to its “last resort” of buying carbon credits, as it reported its lowest first-half earnings in three years. Chief Executive Jakob Stausholm said on Wednesday that the company’s fast growth, along with the time needed to develop new technical solutions, made the 2025 climate target hard to reach. Rio had originally targeted a 15% reduction in direct and indirect emissions) by 2025, and a 50% reduction by 2030, relative to a 2018 baseline. Those targets were adopted in 2021. Stausholm said the 2025 targets could still be met but only by purchasing carbon offsets, which he said was a “last resort”. (FT)
In-the-field – Investigative journalism outfit Follow the Money (FTM) published its latest in a series of articles about carbon credit developer and intermediary South Pole on Wednesday, this time reporting on its unannounced visit to the Kariba REDD project site in Zimbabwe and focusing on how local operator – Carbon Green Africa – distributed the €40 mln share of carbon credit revenue designated to be spent locally. FTM says it was given by Carbon Green Africa’s Steve Wentzel unaudited documents that cover less than a quarter of that total, with Wentzel saying he had “provided sufficient documentation to show the funds received are accounted for”.
Cows and carbon – Soil carbon credit company Grassroots Carbon and international food and beverages leader Nestle on Wednesday announced a partnership to remove carbon from Nestle’s US supply shed. Grassroots Carbon works with ranchers to measure and certify carbon storage and monitor carbon levels in the soil, and recently sold 200,000 removal credits to Microsoft. The agreement will see the measure and certification of further carbon sequestration for a period of 15 years. The investment from Nestle helps cover the cost of implementing regenerative agriculture practices for ranchers. The companies stated that the aim of the partnership is to decarbonise the beef supply chain and positively impact grasslands while also supporting local livelihoods.
AI for ambition – Sustainability tech platform Clarity AI and global climate finance company Aspiration have on Wednesday announced a partnership to provide solutions to end consumers who want to understand their sustainability performance and reduce their carbon footprint. Clarity AI said its extensive coverage of retailers and use of personalised data tracking and AI enables its platform to provide insight into the sustainability of end-consumer’s purchasing habits and develop recommendations to positively affect their impact. With this information, users can offset their carbon footprint by purchasing vetted nature-based carbon credits, including from Aspiration projects with benefits for biodiversity and job creation for underrepresented communities. Clarity AI and Aspiration believe this partnership can satisfy the growing customer demand for carbon data and subsequent mitigation strategies on their purchases.\
AND FINALLY…
We didn’t start the A(f)I(re) – Several US states are piloting AI-powered systems to detect wildfires faster than traditional bystander reporting systems allow. Wildfires are burning longer and more frequently because of climate change, and sopping them sooner could save lives and reduce massive costs. Currently, at least seven states use AI detection to monitor wildfires, including California’s Department of Forestry and Fire Protection (CalFire) and Arizona’s Salt River Project. The AI helps lowers the workload for first responders and is able to accomplish these tasks much quicker than humans could, Neal Driscoll, principal investigator for ALERTCalifornia, told Axios. Traditionally, responding agencies have had to rely on bystanders to call in and report a fire, with no guarantee of how long it might take for fire to be first spotted. One of the benefits of the pilot program is that the cameras can be placed in remote areas where there may be few people or limited cell service to facilitate fire reporting, Robert Foxworthy, a spokesman for Cal Fire, told Axios.
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