Newsletters > CP Daily: Monday July 31, 2023

CP Daily: Monday July 31, 2023

Published 08:32 on August 1, 2023  /  Last updated at 09:11 on December 2, 2023  / /  Newsletters

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

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TOP STORY

EU publishes updated volume of ETS allowances to be auctioned for REPowerEU for next three years

The European Commission has published a proposal for the bloc’s revised EU ETS auctioning regulation that features updated annual volumes to be auctioned for the REPowerEU energy security strategy, with some analysts saying the volume is higher than expected and therefore could be bearish for carbon prices.

AMERICAS

WCI Markets: CCAs set new all-time high as bullish workshop, gamma squeeze boost prices

Benchmark California Carbon Allowance (CCA) prices on Monday traded at a record high for the third time in the past four sessions, as market participants pointed to the impact of state regulator ARB’s potential cap-and-trade allowance budget cuts and options volatility sellers raced to cover their deltas amid the rally.

RGGI Market: RGAs notch 8-mth high on CCA momentum, while Virginia repeal faces first challenge

RGGI Allowance (RGA) values kept up recent momentum to new register new year-to-date highs this week amid the latest spike in California Carbon Allowance (CCA) prices, while the first legal challenge to Virginia’s planned cap-and-trade repeal regulation was announced Monday.

LCFS quarterly net credit surplus recedes for second straight period during Q1

California Low Carbon Fuel Standard net credits exceeded the 1 million mark for the fourth straight quarter during the January-March period, though the total additions to the programme’s surplus bank slowed for the second three-month stretch in a row, according to state data published Monday.

IncubEx, Nodal Exchange roll out futures contracts for Washington clean fuel credits, vintage-specific WCAs

Environmental products developer IncubEx and commodity trading platform Nodal Exchange next month will launch the first-ever futures contracts for Washington Clean Fuels Program (WCFP) credits, as well as vintage-specific offerings of their existing Washington Carbon Allowance (WCA) products

EMEA

UK confirms support for two more CCS plants, grants more than 100 oil and gas licences

The UK government will provide financial backing to the nation’s third and fourth CCS projects, Prime Minister Rishi Sunak said on Monday while announcing plans for more than 100 oil and gas licences that he insisted were compatible with the nation’s binding 2050 net zero emissions target.

Euro Markets: Carbon retreats, posts 2.7% monthly drop in July as market readies for August supply cut

European carbon prices ended the month of July down 2.7% as EUAs extended their decline for a second day amid mounting selling pressure, even as the market prepared for the August cut in auction supply that starts on Tuesday, while energy prices rose as gas recovered from a technical sell-off last week.

EU steps up climate diplomacy with the Philippines

The EU will commit €466 million to green initiatives in the Philippines and relaunch negotiations for a free trade agreement with the Southeast Asian country, the European Commission announced on Monday.

VOLUNTARY

Consultancy predicts retail carbon offset demand growth will explode to $115 bln by 2030

Pervasive growth in retail consumers purchasing offsets to mitigate the environmental impact of their expenditures will drive voluntary carbon market growth to outsized proportions, a global consultancy outlined in its annual financial predictions on Monday.

VCM Report: Prices slip as exchange volume shifts back to nature credits

The prices of most standardised voluntary carbon market contracts fell over the past week with volume concentrated on project-specific nature-based projects, one exchange noted, as the market digested the publication of a much-awaited set of guidelines for carbon credit supply.

Global Carbon Council, Korean non-profit ink agreement to boost voluntary credit market

The Qatar-based Global Carbon Council (GCC) and Seoul-headquartered Climate Change Center (CCC) on Monday said they will form a partnership to promote voluntary carbon markets in their respective geographic areas.

Rating agency partners with environmental intelligence firm to bolster scrutiny of nature projects

A carbon credit rating agency has teamed up with an environmental intelligence company to deploy satellite technology for monitoring carbon stocks in the Amazon.

INTERNATIONAL

Republic of Congo, Italian company sign $88-mln forest carbon agreement

The Republic of Congo and an Italian company have signed an $88 million agreement to develop a carbon forestry project in the country, they announced Monday.

Japanese firms strike carbon credit marketing deals with Kenyan developer

Two major Japanese companies have signed MoUs with a carbon project developer in Kenya to fund the expansion of its business and market a share of the resulting carbon credits to buyers in Japan and elsewhere in the Asia-Pacific.

EU commits €33 mln to climate, biodiversity programme in PNG

The EU has committed €33 million ($36 mln) to Papua New Guinea as part of a forests, climate change, and biodiversity investment programme in a bid to aid the Pacific nation in its transition to a greener economy.

ASIA PACIFIC

China continues to add coal-based steel projects despite unsolved overcapacity -analysts

Chinese steel firms are making considerable investments in new coal-based steelmaking capacity, even though the sector continues to suffer from multiple issues including low profitability and overcapacity, a report has found.

South Korea joins Japan in raising concerns over Australia’s Safeguard Mechanism

South Korea has joined Japan in expressing concern over how Australia’s strengthened Safeguard Mechanism will impact current and future LNG projects it has invested in.

BIODIVERSITY (FREE TO READ)

ISA negotiations end with no decision on deep sea mining

The International Seabed Authority (ISA) wrapped up three weeks of negotiations in Jamaica Friday with no decision on deep seabed mining, denying the mining industry the green light to go ahead for at least another two years.

Verra biodiversity methodology to provide global framework with localised modules

Verra’s SD VISta Nature Framework and biodiversity methodology will provide an overarching global framework for projects to meet, complemented by localised modules based on biomes or eco-regions, and may also incorporate the issue of biodiversity significance.

Plan Vivo to strike balance between accessibility and credibility with biodiversity credit protocol

The biodiversity credit protocol expected to be launched by Plan Vivo later this year will strive to offer an approach with scientific credibility that is also accessible to communities and can be rolled out at scale, heard a recent conference on nature-based solutions.

AfDB, UNEP team up to boost biodiversity finance for Africa

The African Development Bank and the UN Environment Programme have signed a framework to drive the implementation of the Global Biodiversity Framework, which includes a partnership to help attract additional finance for nature.

COMMENT

Four reasons why “nationalisation risk” is not so risky

Governments’ recent declarations to exercise more control over carbon market activities in their jurisdictions are far less an example of “nationalisation risk” than a case of a maturing market where countries are making an understandable and arguably inevitable assertion of sovereignty over their natural resources, writes Verra’s Robin Rix.

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CONFERENCES

North America Climate Summit – Sep. 19-21, New York City: The International Emissions Trading Association (IETA) looks forward to welcoming delegates to our flagship North America Climate Summit (NACS) 2023, an official accredited event of New York Climate Week 2023 and the UN General Assembly 2023. The Summit is the ideal forum to take stock of the world’s evolving net zero landscape and clean growth opportunities, and a zoom into North America. Hear from policymakers, business leaders and innovators who are leading the pack in building, scaling and collaborating on carbon pricing and markets for net zero. Register 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

INTERNATIONAL

Carbon calculations – A majority of investment bankers given the task of setting the first industry standards for calculating the carbon footprints of capital-markets activities have backed a compromise deal that would see banks report only one-third of emissions related to stock and bond underwriting. The eight-member working group was chaired by Barclays Plc and Morgan Stanley and more than half of its members voted for disclosing just 33% of the so-called facilitated emissions, according to an unnamed person speaking to Bloomberg. Just two members of the group voted for 100% disclosure. The group was assembled in early 2021 by the Partnership for Carbon Accounting Financials.

Small steps – The UAE’s state energy company has brought forward its emissions reduction target as the Gulf country prepares to host the COP28 climate talks in December, the FT reports. Adnoc on Monday said it would aim to achieve net zero emissions from its operations by 2045 rather than 2050 and cut methane emissions to zero by 2030. The announcement comes as the UAE faces criticism from activists and a group of US and EU lawmakers over its preparations for the climate talks, which will be chaired by Adnoc chief executive Sultan Al-Jaber. Critics have argued that Al-Jaber’s role as head of Adnoc conflicts with his leadership of the talks. This month, the Adnoc chief executive put forward his vision for COP28, which included setting a mid-century timeline for the phasing down of fossil fuels produced without the capture of emissions.

Call to action – Australia and the UK governments have announced a joint funding call to accelerate green hydrogen projects, the two countries announced. Australia Climate Change and Energy Minister Chris Bowen and UK Secretary of State for Energy Security and Net Zero Grant Shapps announced a new joint initiative at a green hydrogen round table as part of broader climate talks in Goa, India. Both countries will provide funding for Australian and British companies to work together on research, development or demonstration projects on renewable hydrogen. A readout from the Australian government said the agreement will focus on renewable hydrogen and its applications to decarbonise industry and transport. The programme will be launched in October.

EMEA

Bad deal – The EU focus on climate in all policy fields is unnecessary and the Green Deal should be abolished, Maximilian Krah, the German populist far-right Alternative for Germany’s (AfD) lead candidate for the 2024 EU elections, told a national public broadcaster in an interview. The EU’s leaders had made climate policy a cross-sectional task, which had led to the creation of a lot of bureaucracy, the politician said, arguing that the Green Deal would lead to the deindustrialisation of Europe. The controversial politician is a member of the European Parliament and was elected lead candidate at a party conference over the weekend. (Clean Energy Wire)

EU extinctions – Expanding protected areas in the EU should be guided by choosing locations that are home to the species facing “the most imminent threat of extinction”, as opposed to the current regime that prioritises reaching targets simply through the amount of area that is protected, a new study suggests. Protected areas in the EU currently cover 50% of the range of threatened species, with Spain, Greece, and Portugal housing the greatest number of species with an “imminent” extinction threat.  The EU has a collective goal to expand protected areas by 30% by 2030 to “halt and reverse” biodiversity loss, as agreed in the Kunming-Montreal Global Biodiversity Framework and the EU Biodiversity Strategy.

Deadly heat – A new heat protection plan in Germany aims to halve the number of excess death due to heat this year compared to 2022, when more than 8,000 people died of heat-related causes in the warmest year on record in Germany (tied with 2018). The initial focus of the plan will be on communication and awareness-raising, especially within nursing facilities and with people most at risk. The health ministry is also working closely with meteorological service DWD to devise a system to send out early warnings of heatwaves, and with media broadcasters, who can then distribute the information more widely. (Clean Energy Wire) 

AMERICAS

New nuclear – The first new nuclear reactor the US has built in over 30 years is now in commercial production, a Georgia Power subsidiary announced Monday. Vogtle Unit 3 is expected to operate for 60-80, years according to Southern Nuclear Operating Company, and Vogtle Unit 4 is expected to come online late 2023 or early 2024. Georgia Power said Plant Vogtle will become the largest clean energy site in the US when all four units are operational. (Utility Dive)

California CCUS mandate meeting – California regulator ARB, along with three other agencies, will hold a public meeting providing an overview of SB-905 carbon capture, utilisation, and sequestration (CCUS) requirements, the agency announced in an email Monday. The meeting will be held Aug. 15, with participants having the option to join from 1000-1130 Pacific time (1700-1830 GMT) or 1730-1900 Pacific time (0030-0200 GMT). Senate Bill 905 (SB-905) become law on Sep. 16, 2022 and directs ARB to create CCUS and direct air capture regulations and programme to accelerate the technologies by Jan. 1, 2025.

INVESTMENT

Hitting for the (up)cycle – Canada-based Carbon Upcycling Technologies on Monday announced the closing of a $26 mln (C$34 mln) Series A fundraise led by Climate Investment and BDC Capital’s Climate Tech Fund. In a press release, Carbon Upcycling said the funding will be used to deploy multiple commercial projects, including two co-located directly at cement plants. Projects will continue to validate the cost-effectiveness of Carbon Upcycling’s all-electric solution that mineralises CO2 emissions from industrial facilities and upcycles industrial byproducts into materials that reduce the carbon footprint of cement and concrete.

ASIA PACIFIC

Chasing the Sun – South Korea’s SK Group plans to establish overseas photovoltaic projects to expand renewable energy business and create additional revenues through the generation of carbon credits via its engineering arm SK Ecoplant, according to an ESG report released Monday. The Korean conglomerate also aims to maximise the direct removal effect of atmospheric GHG through the promotion of carbon capture, utilisation, and storage (CCUS) and natural-based carbon sink projects, it said in the report, without elaborating. Earlier this year, SK agreed to form a partnership with Mubadala Investment, a sovereign wealth fund of the UAE, to cooperate in voluntary carbon markets in the Asian region.

AND FINALLY…

Cool as a cucumber – The demand for personal cooling devices, from fan-cooled beds to baby carriers, is on the rise as people grapple with ways to keep cool in rising temperatures. Tokyo’s annual Extreme Heat Countermeasures Exhibition last week showcased many cooling products, including fan-based safety helmets to cool outdoor workers, large-scale fans for use in factories and stadiums, fan-cooled baby carriers, wearable devices to warn of heatstroke and even cold packs for dogs.

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