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COP28

PREVIEW – Hosts to push voluntary carbon as markets eye convergence with UN rules

Hosts UAE plan to push voluntary carbon markets (VCM) at COP28, with regional involvement likely to ramp up at the summit, announcements expected on new and existing crediting initiatives, and stakeholders anticipating preparations for the convergence of private-sector markets and government ones under the UN Paris Agreement’s Article 6, in light of a rising number of international bilateral trade agreements and a wider drive towards raising integrity.

Boosting climate resilience of food and agriculture to be new focal point at UN climate talks

Greater focus will be given to food and agriculture this year at COP28 in Dubai, as the links between food production and climate change become increasingly apparent, with a day dedicated to the topic and a concerted push to get governments to align agricultural policies with their emissions pledges.

Canada silent on oil and gas cap, pushing for coal phaseout

Canada’s priorities for negotiations at COP28 in Dubai will include finalising a loss and damages fund, encouraging a strong response to the Global Stocktake, and pushing for a coal phase out, but representatives won’t comment on the country’s planned oil and gas emissions limit until Friday.

EMEA

EU co-legislators strike provisional deal on industrial air pollution

EU co-legislators reached a provisional political agreement to revise existing legislation on harmful industrial emissions across the bloc, striking a deal in the early hours of Wednesday that widens obligations to include more farmers and miners but not methane-intensive cattle rearers.

Euro Markets: EUAs drop to 13-month low in “falling knife” market as bearish sentiment persists

European carbon prices fell to a new 13-month low on Wednesday after data from futures exchanges showed that investment funds had built a record net short position after trimming it the prior week, while the main energy markets dropped to their lowest levels in 22 months.

Debt financing another obstacle on EU emitters’ decarbonisation journey -ECB

Varying degrees of debt financing could present a new challenge to European firms striving to achieve the emissions reductions required under the EU’s Green Deal and Fit for 55 initiatives.

South Africa carbon credit supply shortfall to continue into 2040s -consultancy

A shortfall in the supply of carbon credits eligible for cancellation against South Africa’s domestic carbon tax is likely to continue into the 2040s, but could be alleviated by expanding the market to the wider region, according to a report published by a consultancy.

East African nations should prioritise certain GHG mitigation project types for maximum impact -study

Identifying and prioritising mitigation technologies or activities could assist East African countries in developing “positive lists” that can be used to help combat climate change through the operationalisation of the Paris Agreement’s Article 6, according to a new study.

AMERICAS

Washington releases draft cap-and-trade bill to facilitate WCI linkage

The Washington State Department of Ecology (ECY) on Monday published a draft cap-and-trade bill that incorporates amendments to facilitate linkage between the state’s carbon market with the broader California-Quebec scheme, as well as other tweaks to the Climate Commitment Act (CCA).

Amazon, the company, steps up investment in Amazon, the rainforest

US tech giant Amazon is increasing its investment in the vast rainforest after which it is named through two new agroforestry projects, in an effort to meet its 2040 net zero pledge and promote projects that meet a new standard, company representatives told Carbon Pulse on Wednesday.

ICE introduces Trade at Settlement for certain CCA futures contracts

ICE is introducing Trade at Settlement (TAS) capability for some California Carbon Allowances (CCA) futures starting December, the exchange announced Wednesday.

ASIA PACIFIC

Plans to restart oil and gas exploration in New Zealand makes COP28 ‘awkward’

Plans by the new right-wing coalition government in New Zealand to lift the ban of offshore oil and gas exploration will make things uncomfortable for the country’s negotiators at COP28, according to observers, with the Pacific nation often taking an outsized leadership role at the UN climate talks despite its small size.

South Korea activates ETS price floor again to stabilise market

South Korea has activated a temporary price floor in its domestic emission trading scheme (ETS), as the government aims to stabilise the sagging prices in the oversupplied market for the remainder of the year.

Malaysian state releases new CCS acreage to facilitate carbon market

A Malaysian state government has signed off on allowing one of its local oil companies 1.32 million hectares (3.2 mln acres) for carbon capture and storage, local media reported Wednesday.

Australia’s emissions rise by 4 Mt as govt’s “broad and deep” climate agenda yet to translate to GHG reductions

Australia’s GHG emissions have risen by 4 million tonnes of CO2e in 2023 and although the government is pursuing a “broad and deep” climate policy agenda it has yet to translate to falls in GHGs, a report by the country’s Climate Change Authority said Thursday.

Australia’s coal mine emissions could be double official government numbers -report

Australia could be under-reporting its coal mine methane emissions by more than 80%, according to a report released Wednesday.

Australian pipeline giant expands decarbonisation plans

An Australian pipeline company has signed on a junior partner to develop more biomethane as it takes steps to decarbonise its operations longer term.

Australia’s New South Wales legislates emission reduction targets

The New South Wales (NSW) state parliament on Thursday passed legislation that will make its emissions reduction targets legally binding, the government announced.

Japanese natural capital consortium to launch carbon exchange next spring

A cross-sector alliance that aims to revitalise Japan’s carbon credit market is planning to launch a carbon exchange next spring, it announced Wednesday.

INTERNATIONAL

Switzerland ties up with three more countries for Article 6 credit trade

Switzerland has concluded bilateral agreements with Chile, Kenya, and Tunisia to pave the way for buying correspondingly adjusted carbon credits from them under the Paris Agreement.

Policymakers are making progress on energy efficiency, but not fast enough -IEA

Policymakers around the world have made progress this year on improving energy efficiency, but this is not moving fast enough to meet climate targets, the IEA said in a report published on Wednesday.

VOLUNTARY

Xpansiv drops more REDD projects from N-GEO eligibility

Voluntary market exchange operator Xpansiv announced late Wednesday that it had dumped more REDD projects from its N-GEO Standard Spot Contract after Verra listed them as ‘on hold’.

Nasdaq launches digital carbon credit tech, signs up removal standard

New York-based exchange provider Nasdaq on Wednesday launched a new technology it said can securely digitalise the issuance, settlement, and custody of carbon credits to pave the way for institutionalising the global emissions market, with its own carbon removal standard the first to sign up.

Non-profit unveils updated version of global forestry data tool

A US-based non-profit has updated its carbon inventory statistics and maps for forest and non-forest lands globally in its overhauled tool, which it says will support country efforts to create stronger, more accurate deforestation policies.

First ever carbon mineralisation at active mine now fully funded

A Canadian province announced funding for a carbon removal mineralisation company, allowing the world’s first CO2-to-rock project at an active mine to go ahead in Australia on Wednesday.

Oil-backed direct air capture startup unveils pilot in aim to drive carbon removals below $100/t

An Israel-headquartered direct air capture startup, backed by several oil majors as well as the Frontier removals buyers’ club, has launched a pilot for its electrochemical dual-cell system, which it hopes will help drive carbon credits generated using the technology below $100/tonne.

Respira invests in new DAC project in UAE

Climate financier Respira International intends to purchase up to 50,000 direct air capture (DAC) credits for an undisclosed price in a new project in the UAE, the company announced Wednesday.

SHIPPING

Shipping firms forge alliance to cut emissions by raising cold storage temperatures

Companies representing around 60% of the world’s shipping market on Wednesday launched an emissions-saving alliance to raise the standard temperatures for transporting frozen foods, citing research that suggests food safety would not be impacted.

BIODIVERSITY (FREE TO READ)

UK pushes ahead with mandatory biodiversity net gain law

The UK government will lay biodiversity net gain (BNG) before parliament on Nov. 30 in a step towards making the law mandatory, it announced among a raft of nature-related pledges.

EU nature restoration law hurdles opposition to give ‘ray of hope’

The provisional EU nature restoration bill has overcome opposition from agriculture lobbyists, lending a “ray of hope” to the bloc’s environmental future, following approval from the European Parliament’s environment committee (ENVI).

L’Oreal teams up with Great Barrier Reef Foundation to calculate coral reef biodiversity value

Global beauty product brand L’Oreal is partnering with the Great Barrier Reef Foundation (GBRF) to pioneer a methodology to calculate the value of coral reef biodiversity and support the deployment of heat-tolerant corals.

Building materials maker extends IUCN partnership to focus on biodiversity, water

Switzerland-headquartered Holcim on Wednesday announced a three-year partnership with IUCN to strengthen their environmental cooperation, including plans for the conservation group to validate Holcim’s biodiversity baseline.

COMMENT

To succeed, REDD+ should focus on what Indigenous peoples and Local Communities value

REDD+ standards should not only include technical and scientific aspects developed in the Global North, but also contributions and experiences of the inhabitants of the same territories where these standards will be implemented, writes Gustavo Sanchez of the Mexican Network of Rural Forestry Organizations and colleagues representing other Indigenous peoples and Local Communities.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Carbon Pulse has teamed up with CME Group to provide the market operator’s 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

Methane map – Environmental intelligence company Kayrros has released an open-source extension to its Methane Watch map ahead of COP28, which provides methane emissions insights at the regional and facility level, in addition to natural gas trades worldwide and the corresponding methane emissions. The platform will show data from two satellites and reveal some 5,650 ‘methane super-emitters’, on which Kayrros has called for a global ban. Reducing methane will be a key focus at this year’s COP, with the greenhouse gas second only to CO2 as the biggest source of global warming.

Basel beckons – The Basel Committee of banking regulators has proposed that — starting in Jan. 2026 — banks publish detailed information about the impact of climate change on their business to help investors and regulators check on how the risks are being managed. The global watchdog wants to make it easier for investors to also compare climate exposures at lenders, and ensure banks hold enough capital to remain stable. It said such disclosures could help accelerate the availability of climate related data, which is evolving, but coverage in some cases remain patchy. (Reuters)

EMEA

Climate lawsuit – Three Portuguese environmental groups have filed a legal action in court against the Portuguese government’s perceived lack of effort to bring in legislation that effectively tackles climate change. The groups Ultimo Recurso, Quercus, and Sciaeno pointed to the goals set out under the country’s National Energy and Climate Plan 2030, namely to decarbonise the economy, promote sustainable mobility, and prioritise energy sufficiency, saying that the government has made no moves to achieve them. The lawsuit filed on Monday follows a year of unending heatwaves and forest fires in Portugal, with European Commission data showing Portugal to be the second-worst country affected by wildfires in 2022. (Jurist)

Penalty drops – The UK has set the civil penalty charge for UK ETS non-compliance in 2024 at £64.90, according to a government statement published late on Wednesday. The 2024 penalty represents a 22% drop from the £83.03 penalty that is being charged for the 2023 compliance year. Covered entities that fail to surrender UKAs matching their 2024 emissions in April 2025 will be required to pay the penalty cost for each tonne not covered by a surrendered UKA, and will need to make good the shortfall in the following year.

Five EU nations – Denmark, France, Germany, Sweden, and the Netherlands have signed the Aaborg Declaration, which marks CCUS as an essential technology needed to support the green transition and reach net-zero emissions by 2050. The Declaration also calls for the need to develop a European CCUS market. The declaration was signed during the CCUS Forum in Aalborg, Denmark. It further clarifies the commitment towards CCUS by the five countries, highlighting that they will strive towards a unified CCS and CCU market in Europe. The signatories further reiterated the importance of collaborating on CCUS projects, noting the value of building efficient and cost-effective cross-border CO2 transport infrastructure, and also called on the European Commission to improve regulatory predictability for permanent negative emissions in the bloc. Read Carbon Pulse’s latest on EU efforts to place a responsibility on oil and gas producers to meet an EU-level 2030 target for annual CO2 injection capacity. 

ASIA PACIFIC

Green products – Japanese industrial giant Hitachi will make all its aluminium products manufactured in Japan from “green aluminium” produced through less carbon intensive processes than conventional methods by next March, according to Nikkei. Cutting emissions from aluminium production is considered crucial to the company’s 2050 net zero targets, as Hitachi uses around 10,000 tonnes of the material domestically to make everything from refrigerators and washing machines to railroad cars.

Worst year – Investment in Australia’s renewable energy sector is more than 10 times lower than where it should be to reach 2030 targets, according to advocacy group the Clean Energy Council, PV Magazine reports. The CEC’s latest report said 2023 is shaping up as the worst year for large-scale renewable energy investment since it began tracking data in 2017. It said just six large-scale project, totalling 509 MW, have been financially committed so far this year. Between 5-7 GW would need to be financially committed to reach Australia’s target of 82% renewable penetration by 2030. The federal government has responded by launching an expanded Capacity Investment Scheme which will underwrite renewable energy and storage supply through a series of auctions starting in April.

Coal to gas switching – Cambodia has scrapped plans to build a $1.5 bln 700 MW coal-fired power station, and will build an 800 MW gas-fired plant instead, Energy Minister Keo Rottanak told Reuters. The plan would see Cambodia building an LNG import terminal which would supply fuel to the plant, the minister said. The planned terminal would be Cambodia’s first and make it a new import market in Southeast Asia. Rottanak said the plant would be commissioned by 2030, but did not reveal its cost.

New rules – The Western Australian government has introduced CCS legislation to enable the transport and storage of GHG in the state. The state government said the Petroleum Legislation Amendment Bill 2023 and the Petroleum and Geothermal Energy Safety Levies Amendment Bill 2023 would introduce a framework for GHG storage and transport, as well as the exploration of naturally occurring hydrogen. It said the legislation aligns with the state’s net zero ambitions. WA is already home to one of the largest CCS facilities in the world at Chevron’s Gorgon LNG project on Barrow Island in the state’s remote north.

AMERICAS

Plastic capture – The world’s first net-zero integrated ethylene cracker and derivatives complex will get built, thanks to carbon capture tax credits from the Canadian federal and Alberta provincial governments, according to US chemical firm Dow Inc., the Calgary Herald reported Wednesday. The C$8.9 bln ($6.55 bln) project was first announced in 2021, but incentive tax credits covering a potentially combined 62% of expenditure rebates that would make the facility profitable were only announced in the past week. The facility is an ethane cracker, which converts raw ethane into ethylene, used to make plastic.

Only in New York – Four New York City employees and the conservative non-profit Americans for Fair Treatment have filed a lawsuit contending that a decision by former Mayor Bill de Blasio to rid public pension funds of billions of dollars in fossil fuel investments put their retirement at risk, E&E reports. The lawsuit argues that the three public pension funds that pulled money out of the oil and gas industry in 2021  violated their “fiduciary duties” and abused their power by divesting holdings in what the complaint calls a “misguided and ineffectual gesture to address climate change.” Robert Skinner, a partner at Ropes & Gray, said that the case “could open up a floodgate of litigation”.

VOLUNTARY

ART application – The Architecture for REDD+ Transactions (ART) announced in a release Wednesday it will submit this week its application to for its jurisdictional crediting programme to be assessed against the ICVCM’s Core Carbon Principles. Last year, ART said it issued the first verified credits under its programme and is currently overseeing a pipeline of 18 jurisdictions that have started the crediting process for protecting and restoring their forests. The LEAF Coalition, which includes four governments and over 20 corporations, has committed over $1.5 bln for the purchase of ART-issued TREES Credits. This endorsement makes ART a strong candidate for approval by the ICVCM, the organisation said. Its programme is also approved by the UN’s ICAO to supply credits to CORSIA.

Stakeholder engagement – Indigenous Peoples and local community members have been invited to join the new VCM Engagement Forum to help shape the future of the voluntary carbon market. The invitation to these groups has been extended by the Integrity Council for the Voluntary Carbon Market (ICVCM) and the Voluntary Carbon Market Integrity Initiative (VCMI), which have developed the idea for the Forum over the last two years, recognising the importance of strengthening engagement and participation with local stakeholders in carbon project development.

ACR assessment – Voluntary registry ACR submitted an application to have their crediting programme assessed against the ICVCM’s Core Carbon Principles (CCPs). Executive Director of ACR Mary Grady serves on the ICVCM Governing Board, but is a non-voting Board member and will not be involved in decisions ICVCM makes about any crediting programmes, the registry explained.

SHIPPING

Looking ship-shape – Ship owner V. Group is teaming up with carbon trading firm Aither to assist ship operators with compliance under the EU ETS, once maritime transport is included in the scheme from Jan. 2024. The new partnership will enable V. customers to access an online portal to ascertain the cost of the carbon used, and to then be able to purchase carbon credits and have them deposited with the EU registry in order to maintain compliance with the incoming EU ETS scheme. The ShipSure platform will provide verified emissions data for vessels under technical management by V. (bunkerspot.com)

INVESTMENT

SBTi goodbye – Four banks have abandoned the UN’s Science Based Targets Initiative (SBTi) to scrutinise corporations’ climate targets over fears the banks’ own fossil fuel investment may get hindered, Reuters reported Thursday. HSBC, Standard Chartered Plc, Societe Generale, and ABN Amro Bank NV believed the emissions reductions targets were too difficult to meet, Reuters’ sources said. They also explained that the deserting of SBTi happened over the past year and the banks erroneously told the UN it was because they were part of the Net-Zero Banking Alliance (NZBA). SBTi has certified emissions targets of almost 4,000 companies are in line with the Paris agreement.

AND FINALLY…

Host hoaxing  – The UAE has hit back at what it described as “fake news” designed to undermine its work as the host of the COP28 climate conference. Just one day before the UN’s biggest and most important annual climate conference gets underway, the UAE said it had become aware of a number of press releases purporting to be issued by COP28 and other entities. An official-looking letter was widely circulated on social media that suggested COP28 president-designate Sultan Al-Jaber was poised to step down from his position as chief executive of state oil giant ADNOC. The clarification came shortly after Al-Jaber forcefully pushed back over reports earlier in the week that said the UAE planned to use its role as the host of the climate summit as a platform to lobby foreign government officials for oil and gas deals. (CNBC)

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