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TOP STORY
ANALYSIS: Aviation, energy sectors see slump in voluntary carbon credit retirements
The two largest voluntary carbon credit buying sectors over the past three years have seen significant declines in retirements in 2023, registry data collated by an analytics firm shows, at the same time as integrity initiatives look to shore up confidence in the market.
EMEA
UK government set to consult on supply mechanism, unconcerned about low carbon price –source
The UK government is preparing to consult with stakeholders in the coming months on introducing a supply control mechanism to the UK ETS, but has not proposed any short-term measures to prop up the price of UK Allowances after their 50% drop this year, a government minister reportedly said last week.
PREVIEW: Poland’s election to set pace of renewables rollout, coal kicked down road
Poland’s election outcome this weekend may lead to more support for renewables in the country if the main opposition receives enough votes to form a coalition government, but a clear coal phaseout date is not likely to be set by either of the main political parties.
Euro Markets: EUAs jump by most in four months as shorts unwind positions amid soaring energy
European carbon prices rose by their biggest margin most in four months on Tuesday, reaching a ten-day high as the market began to catch up with a 37% leap in front-month natural gas prices since last Thursday, which traders said has triggered EUA short-covering among speculative investors.
EU co-legislators divided over import measures for methane emissions
Negotiators for the European Commission, the European Parliament, and the Council of EU member states met on Tuesday to discuss methane emissions reduction in the energy sector, aiming to narrow divisions over the extent the EU should regulate gas imports.
VOLUNTARY
More research gives further credence to notion of carbon credit buyers as corporate climate leaders
Companies that are active buyers in the voluntary carbon market (VCM) reduce their emissions quicker and have more ambitious climate strategies than those that are not, according to a study published Tuesday that reinforces previous research with similar findings.
New York global financial index provider acquires UK environmental market research consultancy
A US-based multi-asset investment data and portfolio analysis product provider on Tuesday announced the acquisition of a carbon intelligence analysis and advisory firm.
Liquidity in CIX trading window heats up race for carbon credit benchmarking
Around 3.5 million carbon credits have been bid and offered on the Climate Impact X (CIX) trading window for its Nature X nature-based solutions index since its June launch, the company announced Tuesday, highlighting the growing competition for benchmarking voluntary carbon market products.
Startup raises $3.2 million for a tokenised environmental assets marketplace
A US-based startup company has raised $3.2 million to help build an exchange to host trade in multiple tokenised carbon credits intended to boost market liquidity.
AMERICAS
California governor vetoes bill that would address false claims by carbon offset sellers
California Governor Gavin Newsom (D) this weekend declined to sign a Senate bill that would have tightened regulations for voluntary carbon offset marketers by subjecting them to the state’s advertising law.
California energy company announces first carbon capture and storage project
A California-based oil and natural gas producer revealed on Tuesday its plans for a large-scale carbon capture and storage (CCS) project based in the state’s major oil-producing region.
RGGI states increase allowance volume for Q4 sale, as Virginia prepares to exit
Allowance volumes offered at RGGI’s Q4 auction will increase to the highest point since the first quarter of this year, the power sector cap-and-trade scheme’s notice showed Tuesday, with Virginia primed to participate in its last ever sale.
LCFS Market: Washington prices plummet 33% following Q1 credit data publication
Washington Clean Fuels Program (WCFP) prices have lost a third of their value in just over a week after recent data showed the inaugural quarter of the low-carbon fuel standard produced a credit surplus.
ASIA PACIFIC
Japanese climate tech firm raises $13.5 mln to boost, expand business activities
A Japanese climate tech firm has paired up with several financial institutions to raise 2 billion yen ($13.5 million) in order to strengthen and expand its business, it said on Tuesday.
CDM board approves Chinese firm’s renewable hydrogen crediting methodology
The Executive Board of the United Nations Clean Development Mechanism (CDM) has approved a hydrogen baseline and monitoring carbon crediting methodology proposed by a Chinese hydrogen company and the country’s biggest state-owned wind power producer and main carbon exchange.
INTERNATIONAL
OPEC confident oil demand will rise in mid-term, not fall
The world’s oil cartel is backing itself over other analysts and predicting higher oil demand to 2045 as the world’s population expands by 1.5 billion and fears of energy insecurity drive nations to lock in energy security.
Biogas to grow faster than green hydrogen, but LNG still the heavy hitter -IEA
World gas demand is set to grow in developing nations across Asia and the gas-rich parts of Africa even as legacy buyers ramp down their imports to focus on power supply from renewables and nuclear, according to the International Energy Agency (IEA).
SHIPPING
Paying EU carbon costs cheaper than switching to green fuels for shipping sector -analysts
The costs of switching to greener fuels for the container shipping sector currently exceeds the costs of purchasing EU ETS allowances and may continue to be higher even if carbon prices rise, bank analysts said in a report published on Tuesday that outlined how the sector’s entry into carbon market from next year is expected to lead to a 20-40% rise in freight rates.
BIODIVERSITY (FREE TO READ)
Biodiversity credits, collectives could encourage sustainable land-use change in NZ -report
A New Zealand study has found that a biodiversity market could be a viable, credible solution to encouraging farmers and landholders to making their business climate resilient and meeting environmental expectations, compared to traditional debt funding models.
Biodiversity Pulse: Tuesday October 10, 2023
A twice-weekly summary of our biodiversity news plus bite-sized updates from around the world. All articles in this edition are free to read (no subscription required).
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Premium job listings
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CONFERENCES
Carbon Forward 2023 – Oct. 11-13, London: Join us for Europe’s pre-eminent carbon markets conference, covering the EU and UK ETS as well as international voluntary markets and compliance schemes elsewhere in the world. The event brings together attendees from all related sectors, including traders and intermediaries, big emitters, financiers, project developers, analysts, consultants, NGOs, and government representatives. Topics to be covered include carbon pricing regimes globally, investment opportunities, Article 6 cooperation, CBAM, net zero strategies, and de-risking the voluntary carbon markets. Passes are going fast so secure yours today!
Private Land Conservation Conference | Unite for Nature – Oct. 16-18, Canberra: Nature has been elevated to the world stage and the Australian Land Conservation Alliance’s Private Land Conservation plays a crucial role in exploring the challenges and solutions as we navigate the transition to a nature positive future. Featuring Australian and international conservation practitioners, policy experts, business, finance and industry leaders, landholders, and First Nations groups on the frontlines of conservation, the conference explores pathways to reversing nature loss. To register: www.alcaconference.org.au/registration
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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
Not so fast – The US has significantly scaled back its ambition for a trade agreement with the EU, at least in its initial phase, reports The New York Times. The two have been working on a trade agreement for the past two years that would encourage trade in steel and aluminium made in more environmentally friendly ways, but longstanding differences on how to handle trade and regulation have reemerged. With an Oct. 31 deadline approaching, the outcome would be disappointing for American negotiators, one of whom described a potential deal as ‘a paradigm-shifting model’ that would reduce CO2 produced by heavy industries. They had envisioned setting up a club of nations committed to cleaner production, initially with Europe and later to be joined by other countries, that would act to block dirtier steel, aluminium, and other products from their markets. The narrower deal currently being proposed includes an immediate agreement for countries to take steps to combat a flood of dirtier steel from countries like China, as well as a commitment to continue negotiations on a framework that would discourage trade in dirtier products, sources said.
Jobs on the line – The global coal industry may have to shed nearly 1 mln jobs by 2050, even without any further pledges to phase out fossil fuels, with China and India facing the biggest losses, research showed on Tuesday. Hundreds of labour-intensive mines are expected to close in the coming decades as they reach the end of their lifespans and countries replace coal with cleaner low-carbon energy sources. But most of the mines likely to shut down have no planning underway to extend the life of those operations or to manage a transition to a post-coal economy, US-based think tank Global Energy Monitor (GEM) warned. (Climate Home)
Azeri update – Oil-producing Azerbaijan has submitted to the UN a revised NDC, extending its original 2030 climate pledge to cut its emissions 35% below 1990 levels by 2030 into a 2050 target of a 40% reduction “taking into account the maximum possible absorption capacity of forests and ecosystems”. It made only a vague reference to the use of Article 6 international emissions trade and no mention of carbon pricing. The significance of the document is unclear, given that NDCs are intended as nearer-term contributions through 2030 and that the nation’s emissions had already fallen substantially below 1990 levels following the post-Soviet economic collapse. Azerbaijan’s net emissions in 1990 were 79 MtCO2e, and had fallen to 54 MtCO2e by 2016, the updated NDC pointed out. The document said the government had an opportunity to propose a higher target “taking into account the new realities after the liberation of about 20% of the country’s territories from a 30-year occupation”, likely referring to last month’s Azerbaijani offensive that led Armenian separatists to exit the enclave of Nagorno-Karabakh.
EMEA
Sabotage – A probe into a leak from an undersea gas pipeline between Finland and Estonia is proceeding on the assumption that it was a deliberate act of destruction, according to people familiar with the matter, speaking to Bloomberg. There are no final conclusions, the people said, though officials are expected to give more details on the investigation later. European gas prices rose as much as 10% in reaction to the news. An unusual drop in pressure in the pipeline prompted the operators to halt flows early on Sunday, with the neighboring countries starting an inspection.
Election fallout – One day after being hit hard by voters in two state elections, the three parties of Germany’s federal government coalition have gone into damage assessment mode and are looking for ways to improve their low approval ratings halfway through their four-year term in office, including possible adjustments to their ambitious climate policy, reports German daily newspaper Handelsblatt. In the state elections in important economic regions Hesse and Bavaria, the SPD, the Green Party, and the FDP together received 35% and less than 26% of the total vote respectively, meaning they would have no chance to form a majority government there. The coalition of chancellor Olaf Scholz of the SPD has low approval ratings in national surveys, partly due to it constantly being perceived as being in dispute over climate and energy policy questions, for example, over nuclear power, fossil heating bans, or the future of combustion engine cars. Populist and conservative parties turned out to be the great winners in the two western state elections that had been seen as a clear shift to the right in the country’s political architecture. (Clean Energy Wire)
Getting climate fit – The World Climate Foundation has announced a new project Climatefit, a continent-wide initiative to support EU territories adapt to climate change, funded by the Horizon Europe Programme. The 40-month project is aimed at tackling climate-related challenges, with a budget of €5.8 mln, and a primary objective of supporting EU nations by bridging the finance gap and providing capacity building help for public authorities. A consortium of 32 organisations, led by the World Climate Foundation, has been funded by the European Commission to develop tailored plans for climate adaptation investments, investment strategies, and investment cases, the release stated.
Coventry buzz – Hopes of building a globally competitive EV manufacturing base in the UK have been given a major boost today, with the news that advanced talks are now underway with international investors over plans to build a new gigafactory in Coventry, Business Green reports. Several unnamed Asian battery manufacturers are reportedly interested in investing in the West Midlands Gigafactory, plans for which are being developed by a public-private partnership between the city council and its airport. A joint venture company has been set up by the two organisations, under the banner West Midlands Gigafactory, which today revealed it is now in advanced discussions to secure investment in the proposed site, which is currently the only location in the UK with planning permission in place for a large-scale gigafactory.
AMERICAS
Social cost sustained – The US Supreme Court will not hear legal challenges to interim calculations of the social cost of GHGs by Republican states, E&E News reported Tuesday. Missouri Attorney General Andrew Bailey (R) argued that the use of interim values to estimate the damage of GHGs exceeded the authority of President Joe Biden. The White House has used $51/tonne as an interim social cost of GHGs in regulatory activity as the EPA and other agencies work on nailing down an official figure. While the Supreme Court did not give an explanation for its ruling, previous federal courts have said Missouri and a similar challenge from Louisiana failed to prove they had faced injury from the rule.
Beyond boundaries – Legal representation for oil companies have filed a motion to dismiss cases that accuse the oil industry of misleading the public about the dangers of burning fossil fuels, and seeking compensation in Delaware’s climate liability case and two Maryland county lawsuits. Lawyers argued that courts ruling in favour of local governments would require state judges to set energy policy far beyond their borders, E&E news reported Tuesday. Allowing claims to proceed would not only “usurp” the legislative and executive branches of the federal government to set climate policy, but would do so retrospectively and far beyond geographic boundaries, the lawyers noted. A court in Hawaii has rejected a similar motion to dismiss in cases filed by the city and county of Honolulu, Delaware, and Hoboken, New Jersey, with more motions to dismiss expected against cases brought by Puerto Rico, New Jersey, and Charleston, South Carolina, among the more than two dozen local governments to file legal claims since 2017. Last month, California became the largest and latest to file a climate liability suit, which could spur other governments to follow suit, the report noted.
Blockchain data – Environmental technology developer Devvstream Holdings announced the launch of its environmental project management platform Carbon Offset Program Platform (COPP), in a press release Tuesday. The COPP platform provides detailed information about the firm’s portfolio of offset projects on its blockchain registry, making relevant project data available to corporates seeking to purchase carbon offsets.
ASIA PACIFIC
Greenlight – Australia’s corporate watchdog, the Australian Competition and Consumer Commission (ACCC), has cleared the Brookfield-led takeover of Origin Energy for A$15.3 bln ($9.7 bln) as it was likely to speed up Australia’s renewable energy transition and could lead to a more rapid reduction of GHG emissions, Reuters reports. Origin said the ACCC approval was an “important milestone” in the acquisition process, however it still needs shareholder approval. Under the consortium deal, Origin will be broken up into two businesses, with its energy markets arm including its electricity generation and electricity and gas retail businesses, to be acquired by Brookfield. EIG’s MidOcean Energy, the other consortium partner, will take control of Origin’s integrated gas business. Brookfield has committed to investing A$20 bln in renewable energy assets if the deal goes through.
Done deal – India signed an MoU with Saudi Arabia on Sunday to establish a framework for electrical interconnection, green/clean hydrogen, and supply chains on the sidelines of the MENA Climate Week in Riyadh. The MoU aims to establish a general framework for cooperation between the two countries in the field of electrical interconnection, exchange of electricity during peak times and emergencies, co-development of projects, co-production of green hydrogen and renewable energy, and establishing secure, reliable and resilient supply chains of materials used in the renewable energy sector.
Bank on it – Indian public sector banks (PSBs) are contemplating co-lending strategies and climate risk assessment metrics to maintain their growth and profitability momentum. With the increased global focus on challenges posed by climate change, this step by PSBs will help them in building financial sector resilience, The Economic Times reported Monday. The country’s largest bank, State Bank of India, has already started identifying climate risks.
VOLUNTARY
Grady’s gig – Mary Grady, executive director of ACR and Architecture for REDD+ Transactions (ART), has been appointed to the governing board of the Integrity Council for the Voluntary Carbon Market (ICVCM), according to a Tuesday statement from the offset standards bodies. The ICVCM board of directors is responsible for guiding the organisation’s strategic direction, providing oversight, and making key decisions. Grady has decades of experience in both compliance and voluntary markets and is one of one of the world’s leading experts on jurisdictional approaches to carbon crediting, according to the release.
AND FINALLY…
Every baking hour – The damage caused by the climate crisis through extreme weather has cost $16 mln an hour for the past 20 years, according to a new estimate. The study is the first to calculate a global figure for the increased costs directly attributable to human-caused global heating. It found average costs of $140 bln a year from 2000 to 2019, although the figure varies significantly from year to year. The latest data shows $280 bln in costs in 2022. The researchers said lack of data, particularly in low-income countries, meant the figures were likely to be seriously underestimated. Additional climate costs, such as from crop yield declines and sea level rise, were also not included. The researchers produced the estimates by combining data on how much global heating worsened extreme weather events with economic data on losses. The study also found that the number of people affected by extreme weather because of the climate crisis was 1.2 bln over two decades. (Guardian)
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