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TOP STORY

Governments spend record amount in fossil fuel subsidies in 2022 -IMF

Governments spent a record $7 trillion in fossil fuel subsidies in 2022, the International Monetary Fund (IMF) has calculated, more than governments spent annually on education and about two thirds of what they spent on healthcare.

ASIA PACIFIC

CN Markets: CEA trading volume surges as price extends record high

Weekly trading volume in China’s emissions market almost doubled from the previous week with a new high in carbon prices, even as traders remain keen to know how the government will solve the surplus problem.

ACCU projects must have Native Title holders consent to get registered, govt consultation proposes

The Australian government is proposing to bar carbon project developments on Native Title land from being registered if proponents have not explicitly obtained consent from all eligible interest holders (EIH).

New hydrogen tech could ‘green’ steel for lower costs

Australia’s chief scientific body has partnered with RFC Ambrian to found a new company they say can use 30% less electricity to generate clean hydrogen, reducing costs.

AMERICAS

Quebec seeks to withdraw part of cap-and-trade offset protocol lacking additionality

The Quebec government this week released draft regulations to amend one of its compliance offset protocols, after finding that evolving processes have rendered some of the activities non-additional and ineligible for credit generation.

California legislature passes bill to clarify state funding for offset projects, as climate disclosure proposal faces business lobby pushback

The California Senate on Thursday approved legislation to clarify the eligibility of state-funded projects to generate carbon offsets, while a large business lobby ramped up its opposition to a bill that would mandate Scope 1-3 GHG reporting requirements within the state.

Producers pick up CCAs and sell off RGAs, while speculators shorten in both markets

Regulated parties picked up California Carbon Allowances (CCAs) before the publication of historic WCI Q3 auction results and sold off RGGI Allowances (RGA), while speculators let go of permits in both markets, data from the US Commodity Futures Trading Commission (CFTC) showed Friday.

EMEA

France extends the permissible run-time of its two coal plants as insurance against winter blackouts

France’s two remaining coal power plants have been allowed to operate for longer in case of winter blackouts thanks to a temporary relief of emissions reduction standards through 2024, announced the energy transition ministry as Germany signed off on its final hard coal plant closure payments.

Euro Markets: EUAs continue to weaken, post 3% weekly loss after early short-covering rally

European carbon prices dropped for a third day to return a 3% weekly decline as traders resumed bearish bets after a brief bout of profit taking in the morning after one of the strongest auction results this year, while energy prices were steadily firmer amid continued worries over Australian LNG output.

VOLUNTARY

New initiative looks to understand how voluntary carbon markets credits can drive water investment

A carbon markets integrity body has issued a call for analysis to better understand how voluntary carbon markets (VCM) can boost investment in resilient water systems.

BIODIVERSITY (FREE TO READ)

US government lacks awareness of UK net gain strategy, says DC expert

The US government in general is unaware of the UK’s biodiversity net gain (BNG) policy, the executive director of a policy-focused company has claimed.

Philanthropy has “vital” role in supporting biodiversity investment, bank says

Philanthropic funding has a “potentially vital” role in driving investment towards tackling biodiversity loss, the sustainability research arm of Swiss bank UBS has said.

Australia’s Biodiversity Council begs for gas well drilling halt

Australia’s Biodiversity Council is asking the Queensland state government to halt new gas developments in the Lake Eyre Basin given the potential damage to the floodplains by drilling and its related infrastructure.

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CONFERENCES

Argus North American Biofuels, LCFS & Carbon Markets Summit – Sep. 11-13, Monterey, CA: Join 600+ key government representatives and industry stakeholders from across the entire biofuels value chain and carbon markets sector for three days of networking and knowledge exchange. Hear from leading policy makers from California, Oregon, Washington, Canada’s ECCC, Alberta, and British Columbia and industry experts from LanzaJet, BMW of North America, Morgan Stanley, Chevron, Southwest, Mercuria, Radicle, Phillips 66 and more. Take advantage of this opportunity to gather the latest policy and market insights and reconnect with industry peers. Learn more here.

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

Shipping slowdown – Increase in drought is slowing down ship traffic in Panama Canal, a major global trading route, while the Mississippi River – a vital pathway for American wheat and corn export – faces the risk of drying out due to increasing heat and drought, the New York Times reports. Last year, droughts stalled shipments through the Rhine in Germany as well as along the Yangtze, China’s most important river route. As the average global temperature rises, the possibility of droughts affecting trade routes and consequently disrupting transport and prices has become significantly higher.

AMERICAS

Brazil bonds – Brazil plans to issue $2 bln in sustainable sovereign bonds in September, according to senior finance ministry officials, but the government did not specify the volume or issuance date to avoid impacting markets, Reuters reported. Green and social projects would back the bonds, which would support Brazil’s Climate Fund operations. The country’s National Monetary Council (CMN) including the finance minister, planning minister, and central bank governor defined the framework that governs the Climate Fund on Thursday, which is expected to be rolled out in September. A delay of the operation until early 2024 due to unforeseen circumstances would not be a problem, government officials have said.

Panama panic – Panama could lose 31% of its GDP by 2050 if it fails to address its GHG emissions, according to a study by McKinsey Panama, reports ANPanama. The study finds that the crossing of the 1.5C threshold and sea level rise of one metre would result in an array of negative climate effects, including the loss of one-third of arable land and a decrease in marine biomass. The reductions necessary to avoid such a scenario could be achieved through the creation of a voluntary carbon market, development of renewable energies in the region, and reforestation, amongst other initiatives, according to the report. Other Latin American countries – Colombia, Uruguay, and Ecuador – also face GDP reductions of 49%, 42%, and 40% respectively by 2050 if emissions are not adequately addressed.

More money, less carbon – The US DOE announced over $25 mln in research and development grants for 30 small businesses across the country working on carbon capture, conversion, storage, and management projects. Awarded projects include innovative materials development using CO2, advanced techniques for energy-efficient carbon capture, and novel monitoring of geologic carbon storage. The grants are a product of the DOE’s Small Business Innovation Research and Small Business Technology Transfer awards, which collectively awarded $126 mln to projects working in energy and cybersecurity.

Biofuel scale-up – Alberta biofuel producer Canary Biofuels will ramp up its 20 mln gal/year (75.7 mln L) biodiesel facility in southern Alberta to full capacity in September, said CEO George Wadsworth, alongside continued expansion plans in California. The Alberta plant, located in Lethbridge, is currently operating at 60-70% capacity, where it processes a plant and animal blend of biomass into biofuels. Currently, biodiesel from the plant is transported in rail cars and sold into the US Midwest and West Coast markets. The company is presently building another biodiesel facility in Stockton, California, with plans to “have …up and running in late 2023,” said Wadsworth. (S&P Global)

EMEA

Subterranean source – Germany is looking to call on its geothermal energy resources for heat generation in its journey to phasing out fossil fuels, reports Reuters. The country’s geothermal reserves have so far been largely untapped, despite being some of the largest in Europe, but surging power prices last year in Europe have triggered renewed interest in the renewable energy source from utilities and fossil fuel companies. “Our goal is to tap as much geothermal energy as possible by 2030,” to feed 10 times as much energy into the heating network as it does today, said German Chancellor at an event for his Social Democrats party (SPD) in Bavaria on Thursday. The number of geothermal power stations in Germany is expected to rise to 54 from 42 in future, he said.

New Dutch EU Commissioner up for grabs – The current Dutch finance minister, Wopke Hoekstra, has been put forward by Dutch prime minister Mark Rutte’s government as the replacement for outgoing EU climate chief Frans Timmermans, the European Commission confirmed on Friday. The candidate will be interviewed by EU commission president Ursula Von der Leyen on Aug. 29, at which point it will be decided which portfolio Hoekstra will receive based on his experience, an EU spokesperson confirmed. Maros Sefcovic remains as the newly appointed commissioner in charge of the European Green Deal.

Swedish chapter – Sweden has submitted a request to the European Commission to modify its recovery and resilience plan and add a REPowerEU chapter. It will cover measures related to the energy efficiency of buildings and streamlining of authorisation processes for the construction of electricity grids. The REPowerEU plan was introduced in May 2022 and has at its heart achieving secure, affordable and clean energy in the EU. Under the plan, the EU supports member states in putting forward reforms and investments to phase out the EU’s dependence on Russian fossil fuel and ramp up zero-carbon sources and energy resilience.

Power highways – Electricity from offshore wind farms in the North Sea will be brought to power-hungry consumers in western Germany by way of a new energy corridor nicknamed “Windader West” with a transfer capacity of 8 GW. Transmission system operator (TSO) Amprion will be developing the power lines, which will feed into the state of North Rhine-Westphalia by 2036, with the first 2GW ready from 2032. The TSO is now searching for a course for the underground cables and total investment volume will be between €16 and €18 bln. (Clean Energy Wire)

ASIA PACIFIC

One step closer – The Western Australian government has announced that BP Australia has completed a feasibility study into the development of a large-scale green hydrogen production facility at the former Kwinana Oil Refinery south of Perth, making it one step closer to FID, RenewEconomy reports. WA energy minister Bill Johnston announced the completion of the state-funded “concept development phase study” on Friday, saying it brings the proposed H2Kwinana further towards realisation. The study has identified two potential base case scenarios, with the H2Kwinana producing either 44 tonnes per day of green hydrogen or 143 tonnes per day. A third case identified the potential growth target of 429 tonnes per day. BP announced the wind down of the Kwinana Oil refinery – one time the biggest of its kind in Australia – in October 2020, after 65 years of operation.

CCS project – Japan’s Electric Power Development (J-Power), ENEOS, and JX Nippon Oil & Gas Exploration Corporation have jointly signed a consignment contract with state-run Japan Organization for Metals and Energy Security (JOGMEC) for a carbon capture and storage (CCS) project, J-Power announced Friday. J-Power and ENEOS will be responsible for conducting studies on separation, capture and transport, while JX and a subcontractor will be working on the storage part, according to the statement. The initiative has been selected by JOGMEC as one of the seven ‘advanced’ projects to help create a CCS value chain by 2030.

Rocky road – Rising borrowing costs could complicate Indonesia’s energy transition plans to phase out coal, and the Southeast Asian nation’s talks with international partners on setting up a $20 bln fund have taken longer than expected, Sri Mulyani Indrawati, the country’s finance minister, told Reuters. It is challenging to reach an agreement within the Indonesian government on projects included in the so-called JETP fund and matching them with the International Partners Group’s (IPG) wishes and funding sources, according to the minister. With rising borrowing costs and interest rates on capital, the government also has to see “whether this will fit with our principle of a just and affordable energy transition,” she said.

Reaching net zero – India will need to invest $12.7 trillion in its energy system, or more than three times its gross domestic product, to reach net zero emissions by 2050, Bloomberg reported. Hitting that target early will require moving swiftly to clean-up the country’s vast and coal-dependent electricity sector, according to BNEF’s New Energy Outlook for India, published on Thursday. India’s power mix is improving, though spending is more modest at $262 bln a year on average. In that scenario, rather than reaching net zero by 2050, India’s energy-related emissions will rise by more than a fifth from 2021 levels, with the power sector, a key contributor, not peaking until 2036.

Offshore wind – The World Bank Group published its report on the offshore wind roadmap for Sri Lanka on Friday. This report is an output of the Group’s Offshore Wind Development Program, jointly led by the Energy Sector Management Assistance Program and the International Finance Corporation, which aims to accelerate offshore wind development in emerging markets. Sri Lanka has strong natural conditions for offshore wind, with more than 50GW of potential. Sri Lanka has an opportunity to use this domestic renewable energy resource as part of its transition to net zero carbon and to help reduce the economic burden from fossil fuel imports.

Anonymous gift – The Indian Institute of Technology (IIT) Bombay has received a donation of $18.6 mln from an alumnus to establish a Green Energy and Sustainability Research Hub, Press Trust of India reported Thursday. The IIT B, however, did not disclose the identity of the alumnus, saying he wanted to remain anonymous. The contribution will redefine the institute’s role in addressing the global climate crisis. The hub will be located within a state-of-the-art academic building on the IIT Bombay campus in suburban Powai and its focus will extend to critically important areas, said the institute in a statement.

AND FINALLY…

Cold catastrophe – Up to 10,000 emperor penguin chicks are estimated to have been killed in the Antarctic as sea ice beneath them melted and broke apart before they could develop the waterproof feathers needed to swim in the ocean, according to a satellite recording of the event that occurred in late 2022. The loss of the Smyley Island colony occurred in the west of the continent in an area fronting on to the Bellingshausen Sea. More than 90% of emperor penguin colonies are predicted to be all but extinct by the end of the century, as the continent’s seasonal sea ice withers in an ever-warming world. Antarctic summer sea ice has been on a sharp downturn since 2016, with the two absolute lowest years having occurred in the past two summer seasons, in 2021/22 and in 2022/23, when the Bellingshausen was almost completely devoid of ice cover. (BBC)

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