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TOP STORY
ANALYSIS: How carbon capture could help bring Britain back closer to the EU
The UK government’s announcement this week on its plans to set up a competitive carbon capture, utilisation and storage (CCUS) market was full of references to imports, opening up a separate front for the green transition bringing the UK and EU closer together in the wake of Brexit.
No escape from CBAM: Indian industries bound to be severely impacted by new UK policy -experts
Large Indian industries will be unable to escape the carbon border adjustment mechanism (CBAM) announced by the UK earlier this week, according to some trade experts, who further added that soon all value-added products will be included under the mechanism.
ASIA PACIFIC
India must set high standards for voluntary carbon credits for market to be credible -experts
India needs to make sure that projects deemed eligible to supply carbon credits under its recently announced voluntary carbon market hold a high standard for the new programme to be a credible tool to cut greenhouse gas emissions, experts have warned.
BHP, China’s Baowu complete mining car wheel decarbonisation pilot
Mining giant BHP Billiton has completed a joint pilot project with China Baowu Steel Group that focuses on reduced emissions from mined iron ore used in the production of mining car wheels, and using carbon credits to offset the residual greenhouse gases.
Indonesian oiler adds to NBS portfolio with low-cost forest project
Indonesia’s state oil company Pertamina’s renewable energy division and forest developer PT Inhutani have signed an agreement for a nature-based solutions project in North Kalimantan, home to vast tropical forests.
CN Markets: Chinese CO2 permits hit two-month high ahead of final compliance deadline
Allowance prices in China’s carbon market reached a near two-month high over the past week amid stable trading volumes, as the year-end compliance deadline is rapidly approaching.
Taiwan voluntary carbon exchange sees trades on launch day
An exchange backed by the Taiwanese government saw trade in international carbon credits on its inaugural day on Friday, with solid interest from domestic companies.
EMEA
UK lawmakers urge govt to consider curbing aviation demand, account for carbon-intensive SAFs
A cross-party group of British MPs has urged the UK government to consider demand management measures for the aviation sector and to account comprehensively for the carbon footprint of sustainable aviation fuels (SAFs) to ensure its 2050 net zero emissions goal is met.
INTERVIEW: Sweden could be the epicentre for producing green steel ingredients, says industry initiative
An industry initiative to produce a low-carbon precursor for green steel is setting its sights on using Sweden’s renewable energy and high-quality iron ore resources as the backdrop for large-scale production for European export.
EU nations seek to keep rules for climate-related equity indices despite red tape cull
Climate-related equity indices should still be subject to EU oversight, according to a position agreed by EU member states this week that endorsed a proposal that most benchmarks should not remain under the scope of regulation.
Euro Markets: EUAs post fifth increase in a row as market shrugs off 22% increase in auction volumes
EUAs extended their week-long rally in a shortened session on Friday before the four-day Christmas break, shrugging off an initial dip in response to the 22% increase in auction volumes scheduled for the first eight months of 2024 as traders continued to trim short positions ahead of the holiday.
AMERICAS
Latin American airline group in 400k Brazilian offset deal
A Latin American airline group has agreed to buy 400,000 carbon offsets over 10 years to help protect 22,000 hectares in the Amazon and Cerrado biomes of Brazil.
Emitters grow V23 and V24 CCA holdings, as speculators conduct the same in RGGI
Compliance entities in the California Carbon Allowance (CCA) market grew both V23 and V24 holdings, while speculators in the RGGI Allowance (RGA) market did the same, as Washington Carbon Allowance (WCA) market saw both groups add to their net length, US Commodity Futures Trading Commission (CFTC) data showed Friday.
Registered participants for Washington’s cap-and-trade scheme pick up in Q4
The Washington Department of Ecology (ECY) has revealed the list of entities registered to hold allowances and offsets in the state’s WCI-modelled cap-and-invest programme throughout Q4, with the number of companies more than 70% higher than entities that have qualified to bid in auctions.
INTERNATIONAL
Freeze of EU-US steel tariffs to pave way for end to trade war, says EU industry
A decision by the EU to keep rebalancing tariffs on US steel and aluminium products on stand-by this week may be a sign that tension between the two sides is easing after a years-long dispute, the EU’s industry hopes.
VOLUNTARY
FEATURE: Digital MRV is growing up, set to bring greater transparency to voluntary carbon market
Efforts to improve the digital mapping of land cover and calculate carbon stores over time have been pushed to the forefront in the voluntary carbon market (VCM) as stakeholders seek to strengthen the integrity and transparency of carbon projects.
VCMI’s new flexibility claim idea could backfire, report warns
Corporates would be left off the hook for climate targets if the VCMI’s new ‘flexibility’ claim idea for Scope 3 emissions is given the green light, warns a report that finds some companies could even increase their climate pollution up to 2030 as a result.
Carbon credit retirements for 2023 set to match 2022 levels, defying fears of dented market confidence
Voluntary carbon credit retirements have almost reached the same level as a year earlier with just days remaining in 2023, boosted by a surge in activity by an oil major early on Friday.
California-based startup eyes Indian tea plantation carbon credits
A California-based agri-tech firm has teamed up with a tea research institute in India to help farmers generate income through the generation and sale of carbon credits.
Emerging markets hedge fund takes strategic stake in VCM financier
An emerging markets hedge fund has made an investment into a prominent climate financier in the voluntary carbon market.
Fund launches call for climate contribution projects ahead of fourth cash allocation
A fund created as an alternative to carbon offsetting by a EU-based climate project platform has launched a three-pronged call for proposals ahead of its fourth round of allocations of grants and pre-purchases in Q2 2024.
ART programme lists Burkina Faso REDD+ concept
The Secretariat of the ART carbon credit standard on Friday announced that it has approved a listing for Burkina Faso under its TREES jurisdictional certification programme.
BIODIVERSITY (FREE TO READ)
Jaguar corridor investment fund targets raising up to $130 mln by mid-2024
A fund focused on conservation in the ‘jaguar corridor’ area of Latin America aims to raise between $100 million and $130 mln by mid-2024, Carbon Pulse has learned.
Conservationists challenge UK in court for overfishing
A marine charity will reportedly apply to take the government to court next month to argue that it ignored the advice of an independent scientific body to set more stringent limits on fishing in 2024.
Australian state government bans new hydrocarbon exploration in delicate floodplain area
The state government of Queensland in Australia has banned new oil and gas development in the Lake Eyre region in a bid to protect vulnerable rivers and floodplains.
COMMENT
Update of the EU ETS free allocation – polluting for free during a climate crisis
The proposed revision of EU ETS free allocations fails to deliver social and environmental change, write Lidia Tamellini of Carbon Market Watch and Aymeric Amand of Sandbag.
ICYM
UPDATE – Brazil cap-and-trade bill passes lower chamber, to return to senate
*updated to reflect late amendments to the bill*
The Brazilian Chamber of Deputies on Thursday evening passed a bill establishing a national cap-and-trade programme, though the legislation will now head back to the senate after undergoing a number of changes.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
INTERNATIONAL
It’s official – The UNFCCC on Friday published the final attendees lists for COP28, showing that a record of around 70,000 people participated on-site, entering the venue’s higher-security Blue Zone. Party and Party Overflow made up the bulk of this at 44,000, while NGOs and intergovernmental organisations added a further 15,000. As previously reported, host country guests totalled a record 4,200, with many high-profile delegates making the trip to Dubai on invitation from the UAE. Nearly 2,700 media representatives were also in attendance (including Carbon Pulse’s 14 correspondents), while a measly 66 people registered to attend virtually. Preliminary estimates had put the total number of people expected to make the trip to COP28 at 70,000, though this was later increased to as much as 100,000 by some outlets. The UN figures do not cover any attendees who weren’t registered, for example those visiting the lower-security Green Zone.
AMERICAS
US hydrogen – The Biden Administration released guidance for the 45V tax credit Friday, which outlines how companies may qualify to write off up to $3 per kilogram of the cleanest hydrogen produced with prevailing wages and apprenticeship requirements. The guidance aims to ensure production of clean hydrogen does not take away clean electricity from the grid that could be used for other purposes. While hydrogen produced with renewable energy is most likely to earn the full credit, hydrogen produced by fossil fuels with carbon capture will also qualify.
Farmer fight – Brazil’s power agribusiness sector is planning more strongly to challenge President Luiz Inacio Lula da Silva’s environmental agenda in 2024, reports Bloomberg. The congressional agribusiness caucus counts roughly 60% of Brazilian legislators as members, and will prioritise legislation to loosen environmental licensing rules and curb protections for Indigenous lands, amongst a series of other policies that run counter to President Lula’s ambitions. The agribusiness industry successfully fought off efforts by Finance Minister Fernando Haddad to include the sector under compliance obligation in the passage of national ETS legislation Thursday evening by the country’s lower chamber. However, there is room for cooperation. With extreme weather affecting crops and markets already reducing estimates for next year’s soybean harvest, Brazil’s top agricultural export product, farmers want more government aid to help mitigate the effects of climate emergencies.
Hot potato – Irving Oil, the exclusive supplier of petroleum products to the Canadian maritime province Prince Edward Island (PEI), will pass along costs from the federal government’s Clean Fuel Standard (CFS) onto PEI consumers, the Island Regulatory and Appeals Commission (IRAC) ruled Friday. CFS aims to reduce the carbon intensity of transportation fuels, with annual carbon intensity reduction requirements alongside penalties for entities that do not meet the targets. A consultant estimated the cost to PEI consumers to be about four cents per litre, but critics said Irving calculated costs based on the most expensive option to comply with regulations, while federal environment minister Steven Guilbeault wrote to IRAC stating that there should be no extra costs because the rules gave refineries a full year to come into compliance, CBC reported.
The conflict continues – North Dakota Public Service Commission heard legal arguments Thursday on whether Summit Carbon Solutions is legally required to honour local county ordinances across its proposed 333 mile (535 km) route through the state, reported The Bismarck Tribune. Summit argued that the county ordinances in place are unreasonably restrictive with setbacks that make for few, if any, possible routes through the counties. Lawyers for both Burleigh and Emmons counties argued that Summit is free to seek variances and waivers from local ordinances, which could allow the pipeline to travel through their counties, if approved. The decision could set precedence for future pipeline development in the state, argued Kevin Pranis, marketing manager for Laborers’ District Council Minnesota and North Dakota. The proposed $5.5 bln, 2,000 mile (3,218 km) pipeline would carry 18 mln tonnes of CO2 emissions from over 30 ethanol plants in the Midwest, to be permanently stored underground in North Dakota. The case first had its permit denied by the North Dakota Public Service Commission (PSC) in August, but has since been reopened after the company petitioned the PSC to reconsider in September. The pipeline is not anticipated to begin operations until early 2026, roughly two years later than the original timeline.
EMEA
A helping hand – The European Commission has published the default values that can be used to determine embedded emissions in imported goods (except electricity) covered by the Carbon Border Adjustment Mechanism (CBAM) during its transitional phase until end-2025. These values can be used when importers lack the necessary information and will be revised regularly after the end of the first reporting period to take into account industry feedback. During the first three quarterly reports (Q4 of 2023 and Q1&2 of 2024), declarants may report embedded emissions based on default values made available and published by the Commission without quantitative limit. Between Q3 2024 – end-2025, declarants can still report using the estimations but only for complex goods and with a limit of 20% of the total embedded emissions. Flexibilities to be integrated into the online reporting tool include an option for recording emission data of a specific good to be reused in subsequent reports, and an option for reconducting the previous report by updating the imported quantities.
Cross-sector cuts – LKAB, the Swedish miner of steelmaking ingredient iron, is also working to reduce the emissions profile of the cement industry with the signing of a contract with startup Cemvision to supply it with green cement, Bloomberg reports. Cemvision is currently making green cement in a demo plant in southern Poland, with a capacity of 4,000 tonnes a year, and by 2030, aims to produce 5Mt annually. Its cement product reduces carbon emissions by 95% compared to traditional methods by stripping out limestone and heating from the manufacturing process, it says.
France goes fossil-free – The EU Commission approved on Thursday a €1.3 bln French state aid scheme to support non-fossil technologies. The objective is to ensure that supply and demand of electricity are kept in balance during peak times such as the winter period, which is a necessary condition for the integration of variable renewable energy sources in the system. The scheme is open to operators of demand response and storage units, including large industrial energy consumers, and small residential and tertiary services consumers. Capacities involving fossil fuel generators are not eligible. The measure will run until the first quarter of 2026, when the French authorities intend to reform the existing capacity mechanism.
ASIA PACIFIC
Emissions expansion ok’ed – New South Wales has recommended the expansion of a coal mine that would add three years to its life and over 28 Mt of production. Idemitsu wishes to expand its Boggabri mine and the state government approved the plan late Friday. Under the new plan, the Boggabri mine now closes in 2036. It still needs to be formally approved by state environmental minister Paul Scully. After incorporating advice from its Net-Zero Emissions Modeling team (NZEM) it estimated 860,000 MtCO2e more than what the originally approved mine would have produced, or an average of 230,000 tCO2e per annum. “This represents about 0.06% of Australia’s emissions and 0.21% of NSW’s annual emissions, based on 2020 reported total GHG emissions… The Department considers that the modification is consistent with current NSW and Commonwealth policy settings in regard to GHG emissions,” it said.
AND FINALLY…
Use highway, save the climate – The Nairobi Expressway, a 27 km highway through Kenya’s capital, is a star example of the city’s climate-smart efforts, local newspaper The Star reports. The China-backed project includes potted flowers and more than 3,000 planted trees along sections of the roadway, and has notably cut travel time from two hours to 20 minutes in a highly-trafficked region of the city, seeing the use of 70,000 vehicles daily. “Every motorist in Kenya should use the Expressway as part of the efforts to protect the environment, the cash saved on fuel notwithstanding,” said John Kariuki, a telecommunication engineer, who lives in Kitengela, south of Nairobi, and uses the road every day. The highway is eligible for use via toll, paid to Chinese firm Moja Expressway in an agreement that will see the foreign entity charge fees for 27 years before transfer to the Kenyan government.
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