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TOP STORY
LEAK: EU to include carbon removals in 90% 2040 climate target communication
The European Commission will include carbon removals in its recommended goal to reduce net greenhouse gas emissions by 90% by 2040 compared to 1990 levels, according to a leaked draft seen by Carbon Pulse on Thursday.
VOLUNTARY
EXCLUSIVE: BP invests in startup platform offering SAF, carbon credits to buyers
BP has invested into a software platform that allows corporates and individuals to purchase carbon credits or sustainable aviation fuel (SAF) to offset emissions in hard-to-abate sectors.
Survey adds pressure on SBTi to allow carbon credits for Scope 3 emissions targets
Pressure is mounting on the Science-Based Targets initiative (SBTi) to allow companies to use carbon credits to meet emissions reductions targets, after a survey of corporate big hitters found a healthy majority said it would galvanise meeting their mitigation goals.
Oil and gas firm adds four PNG nature-based projects to carbon arm
An Australian fossil fuel company is expanding its nature-based carbon project portfolio in Papua New Guinea and expects its offset portfolio to swell to above 10 million units while also readying a new carbon trading desk in Singapore.
Berlin voluntary carbon startup secures €10 mln in funding round
A Berlin-based startup that offers a digital voluntary carbon market platform has successfully raised €10.3 million in a recent funding round, it said Thursday.
Study reveals how time, site conditions, and forest management affect biofuels’ carbon footprint
A recent dynamic life cycle assessment (LCA) study has revealed that soil organic carbon (SOC) changes resulting from the removal of forest residues for biofuel production significantly impact greenhouse gas emissions.
EMEA
POLL: Analysts lower UKA price forecasts, as market poised for 2024 oversupply
Analysts have dropped their outlook for benchmark permit prices in the UK carbon market in 2024, citing oversupply, policy uncertainty, and expectations that a wide discount to EUAs will remain a characteristic of the British scheme.
Brussels awards €600 mln to carbon and energy infrastructure projects
The European Commission has handed out nearly €600 million to eight cross-border energy infrastructure projects, including several for CO2 management, it announced on Thursday.
Ratings agency cuts EUA forecast but sees full 2024 recovery from price drop
Analysts at a major ratings agency have cut their outlook for EU carbon prices, following other experts in tempering their expectations amid a confluence of bearish factors but differing in their anticipation of a full recovery later this year.
Euro Markets: Buyers fade away and aggressive selling returns to push EUAs down 4%
European carbon prices fell back on Thursday as the surge of buying interest that had driven prices back above €65.00 in midweek dried up and aggressive selling returned, though robust defence emerged late in the day to prevent further falls.
AMERICAS
Canadian government under-reporting forestry emissions -experts
While Canada’s greenhouse gas inventory demonstrates the forestry sector as roughly carbon neutral, academics and environmental non-profits called attention to methodologies that instead deem the sector as generating more emissions than electricity and agriculture, accounting for more than 10% of the country’s annual emissions, in a series of reports published in January.
WCI Markets: WCA prices plummet below CCAs amid Washington programme uncertainty
Washington Carbon Allowance (WCA) prices took a nosedive following verification of a ballot initiative aimed at repealing the state’s Climate Commitment Act, while California Carbon Allowance (CCA) prices once again briefly broke to new all-time highs earlier in the week.
US DOE allocates $254 mln to industrial decarbonisation
The US Department of Energy (DOE) announced Thursday the disbursement of awards to 49 projects nationwide geared to reduce industrial greenhouse gas (GHG) emissions, as well as additional available funding opportunities to tackle decarbonisation challenges in hard-to-abate industries.
Drax launches US-based carbon removals business
UK power company Drax is setting up a new US-based business unit to develop and build large-scale carbon removal projects internationally, it announced on Thursday.
Washington House committee advances WCI linkage, debates speculator study bills for cap-and-invest
Members of the Washington House Environment and Energy Committee advanced a bill intended to facilitate linkage between the state’s young cap-and-invest programme and the California-Quebec carbon market on Thursday, while also hearing testimony and debating issues around a proposal to study the inclusion of speculators in allowance auctions.
ASIA PACIFIC
Growing number of APAC exchanges can bring market transparency, but at risk of liquidity, conference hears
The rise of multiple new carbon market exchanges in the Asia Pacific in recent years will help bring price transparency and encourage market development, but they could risk splintering liquidity, panellists told a conference Wednesday.
Biochar developer partners with Indian firm to generate “high-quality” carbon removal credits
A Singapore-headquartered biochar project developer has teamed up with an Indian renewable energy firm to generate high-quality carbon sequestration credits while also developing ethanol for aviation fuel, the companies announced Thursday.
ACCU demand to remain muted for now, grow as Safeguard fully kicks in, bank says
Demand for Australian Carbon Credit Units (ACCUs) will continue to be limited this year as buyers and emitters demonstrate “a reluctance to accumulate” in response to new compliance obligations under the Safeguard Mechanism, a leading local bank said Thursday.
ACCU prices unlikely to consolidate until 2025-27, trader predicts
Significant price consolidation of Australian Carbon Credit Units (ACCUs) sourced from different project types is unlikely to occur until the first compliance deadline to surrender credits under the Safeguard Mechanism in early 2025, a trader said Thursday.
INTERNATIONAL
Carbon data dashboard seeks integration with more national registries this year
A blockchain-based metadata platform that seeks to foster transparent accounting in carbon markets is seeking data integration with more national registries this year, with multiple projects already in the pipeline.
BIODIVERSITY (FREE TO READ)
World Bank issues bond to tackle plastic waste, repaying investors with plastic, carbon credits
The World Bank has issued an outcome bond in partnership with a social enterprise whereby the proceeds will be directed towards reducing and recycling plastic waste, generating plastic and carbon credits to provide a financial return to investors.
UNDP releases guidelines for reform of government subsidies harmful to biodiversity
The UN Development Programme (UNDP) has released a set of guidelines to enable governments to redesign subsidies harmful to biodiversity.
Australian market administrator joins nature positive partnership
An independent environmental markets administrator in Australia has joined a broad partnership that is in the process of bidding for government funding to launch an initiative to drive investments in nature positive carbon, biodiversity, and natural capital initiatives.
Ireland targets society-wide awareness with biodiversity action plan
The Republic of Ireland has said it wants every person in the country to be aware of the importance of biodiversity, as it launches its latest National Biodiversity Action Plan.
Biodiversity Pulse: Thursday January 25, 2024
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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BITE-SIZED UPDATES FROM AROUND THE WORLD
INTERNATIONAL
Get your submissions in – A new web interface has been launched to support the pre-registration of Article 6.4 projects, the UN has said. “Activity participants of a proposed Article 6.4 project must demonstrate that consideration has been given to the Article 6.4 mechanism benefits in the decision to implement the project,” the body said. To do so, participants must submit a “prior consideration notification” to the UNFCCC secretariat, notifying their intention to register a proposed project under the Article 6.4 mechanism. Participants can do this through the web interface available on the Article 6 rules and regulations web page under ‘forms’, the UN added.
Focal points – Host of COP29 Azerbaijan aims to extend the discussion this November beyond climate into wider environmental issues such as water shortages, reports The National. The need to help poorer countries get their hands on clean technology will also be top of the agenda as will efforts to send a signal of peace to the region after an exchange of olive branches with Armenia broke a stalemate on staging the talks. The country wants to draw attention to the shrinking Caspian Sea, the environmental cost of wars, and developing world finance, said Elin Suleymanov, Azerbaijan’s ambassador in London.
Questionable motives – Fossil fuels account for over 90% of all Azerbaijan exports, but as the country gears up to host the COP29 UN climate summit in November, it’s looking to present a greener image on the world stage. The creation of green energy division Socar Green in its state-owned oil and gas company is one important sign, with the division pledging investments in solar and wind projects, green hydrogen production, and carbon capture and storage (CCS). However, critics are sceptical that the move could just be greenwashing, Climate Change News reports. That said, Azerbaijan pumps less than 1% of global oil and gas output, and its reserves are already getting depleted, with oil there expected to run out in about 25 years, though it has enough gas for nearly 100 years. So Socar could do with coming up with a transition plan, particularly given it scores very poorly on its climate credentials, according to the Oil and Gas Benchmark. Azerbaijan also has largely untapped potential for renewable energy, with a mere 6% of its electricity mix currently generated by renewables, despite the fact it has strong wind and solar resources.
EMEA
Cleaning up – The EU emitted 8% less CO2 from burning fossil fuels last year than it did in 2022, leading to the lowest level of CO2 emissions in 60 years, the Guardian reports. The yearly drop in planet-heating pollution is the steepest behind 2020, when governments shut factories and halted flights to prevent the spread of Covid-19. More than half of the emissions drop last year came from the use of cleaner electricity, according to the report by the Centre for Research on Energy and Clean Air (Crea), with the EU building record levels of solar panels and wind turbines, in addition to greater power availability from hydro dams and nuclear plants. In addition, lower demand for electricity aided by good weather, and cuts to power use in industry due to high gas prices, also contributed to the decline.
Lighter burden – The cost of air pollution caused by Europe’s largest industrial plants has dropped substantially due to technological improvement and policy action, though still remains at 2% of EU GDP, according to updated analysis by the European Environment Agency (EEA). Air pollution costs arising from the continent’s largest industrial plants average between €268 -428 bln per year, the EEA analysis shows, which in 2021, corresponded to about 2% of the EU’s GDP. A mere 1% of the most polluting facilities, many of which coal plants, contributed to half the total damage. However, the environmental and health costs of European industry have declined by a third (33%) from 2012 to 2021, with the energy sector accounting for most of the total decrease thanks to the adoption of ‘best available techniques’, the renewable energy shift, and move to less polluting fuels driven by EU action. The revision of the Industrial Emissions Directive and the new Industrial Emissions Portal Regulation (IEPR) has helped to make EU industry greener, while strengthening of the EU Air Quality Directive is expected to further support this development. The 2024 update of the EEA briefing looks at the externalities of industrial air pollution from about 10,000 largest facilities in Europe, from 2012 to 2021.
EU backs mini nuclear plants – The bloc wants to roll out Small Modular Reactors (SMRs) in the 2030s as a way to hit its 2040 climate goals and reduce emissions, a draft seen by Bloomberg reveals. The EU will unveil its European Industrial Alliance on SMRs next month to encourage collaboration in a nascent sector, according to the draft declaration. SMRs aren’t potentially commercially proven at scale yet and EU nations are split over the role they should play.
Missing invites – The London Energy Security Conference announced to great fanfare last August by former U.K. Energy Secretary Grant Shapps may never come to fruition, given there is no confirmed venue, no clear agenda, and no invitations have gone out, Politico reports. The news outlet has asked several European energy officials on whether they had received updates on the event and received a negative response. The government had originally said the summit would take place in “spring 2024 … around the time of the second anniversary of the Russian invasion of Ukraine” but there are suggestions it could have been pushed aside when Shapps moved onto becoming defense secretary, leaving Claire Coutinho as his successor at the Department for Energy Security and Net Zero (DESNZ). DESNZ insist the event is still on their agenda but actual information remains vague about what form the summit could now take.
Flat-packing a punch – IKEA said its Scope 3 emissions decreased in 2023 by 23.6% compared to 2016, and by 12.5% from 2022, in an annual sustainability report. Carbon saving measures have contributed most significantly to the decrease, it said. These include improvements in the energy efficiency of energy-using products and an increase in renewable energy across the value chain.
More clarity, per favore – Italy’s climate policy is not so clear, Luca Bergamaschi, co-founder of the think tank Ecco climate said in an interview with Clean Energy Wire. While the government has announced major contributions to international climate finance, there is also a strong focus on fossil gas and lagging e-mobility expansion across the country. As the host of the rotating presidency of the Group of Seven (G7) largest democratic economies, there will be more scrutiny on how Italian prime minister Giorgia Meloni will handle the expectations on the role of the G7 in the international climate arena. Italy is weak on core mitigation and energy issues, and gas is still the main focus in every strategy. Contrary to the European Commission’s advice to focus on electric mobility, Italy is focusing on biofuels as an automotive solution.
Plane figures – Wizz Air said its emissions fell in 2023, to 51.5 grams of CO2 per revenue passenger kilometre from 55.2g the previous year. The budget airline also reported passenger numbers up 22% on the year in the third quarter of the 2024 financial year, at 15.1 mln. The company expects that capacity growth – measured in available seat kilometres – will be about 20% on the year in the second half of the 2024 financial year, and then flat in the first half of 2025. Budapest-headquartered Wizz Air markets itself as Europe’s greenest ultra-low cost airline, with the youngest fleet among European peers at an average of 4.2 years and able to do fully electric turnarounds at Budapest airport.
Banking on net zero – HSBC published its net zero transition plan, outlining how it aims to fulfil its commitment to be a net zero bank by 2050. “We recognise that our history brings with it an unavoidable starting point – a portfolio today with a heavy financed emissions footprint,” says CEO Noel Quinn. The goal is to make choices that can lead to a meaningful impact on emissions reduction in the real economy and not just the bank’s portfolio, says the plan, a 100-page document outlining its vision sector by sector. Supporting the protection of the natural environment requires the acceleration of the emergence of natural capital as an asset class, it adds, pointing to high quality carbon credits. It cites analysis that finds that $155 trn will be needed to finance the transition to net zero by 2050 in the markets that HSBC serves. The bank says it financed and facilitated more than $210 bln of sustainable finance and investment between 2020 and 2022.
Stranded assets? – Private equity firms invested in the North Sea could see cash flow from oil and gas fall by more than 60% below expectations if global warming is held to 1.7C, says financial think tank Carbon Tracker. Many oil and gas companies are only taking into account existing climate pledges in their investments, but clean technologies, supported by government climate policies, are eroding global demand for oil and gas, it says. The International Energy Agency expects fossil fuel demand to peak by the end of the decade. The energy transition is irreversible, says Climate Tracker, and accelerating falling demand will drive down commodity prices, and with it the cash flows and value of oil and gas companies.
ASIA PACIFIC
Chipping in – Bank of China will be joining the Japanese carbon market by adding solar power panels at residential buildings near its office locations in the country. The project will be implemented by developer Bywill, and is expected to generate around 23,000 J-Credits. The bank is planning to use revenue from the J-Credit sales to invest in other environmental activities, according to a press release issued by Bywill.
Do what is needed – Indian minister for new and renewable energy, R K Singh, on Wednesday said that the South Asian nation is on the path of decarbonisation and if the need arises, more funds should be allocated for decarbonisation of the country’s iron and steel sector under the National Green Hydrogen Mission. The minister stressed that the companies should think of “ways and means” to use more green hydrogen as its use results in lower carbon content in the final product. He added that in the wake of trade barriers imposed by the developed countries, energy transition becomes significantly important for the competitiveness of the sector, referring to the recent implementation of CBAM in Europe and plans of the UK and Australia to do so. Singh also added that many manufacturers have already begun experimenting with the use of green hydrogen in the production of steel.
AMERICAS
IRA envy – Joe Biden’s hope that other governments follow his lead by lavishly spending on the green transition and adopting interventionalist industrial policy measures is unlikely to materialise, given that most other countries lack the US’s fiscal largesse and ability to enforce trade barriers in quite the same way, the FT reported. The centrepiece to Biden’s green mastermind is the Inflation Reduction Act (IRA), which includes a huge programme of federal spending and open-ended tax credits to promote domestic green production in the US, and is accompanied by policy measures to shield US steel producers from import competition. Initial estimates for the IRA are for it to cost $385 bln over 10 years, though costs may balloon to nearly $3 trillion once the environmental targets are achieved — costs that other big economies like the UK would struggle to afford. In the EU, implementing an IRA-like funding mechanism for the green transition is painfully slow to get out the door due to bureaucratic barriers and the lack of a permanent centralised taxing or borrowing function, while the bloc has also resisted being as aggressive as the US on restricting trade and investment with China. In the UK, where public finances are already stretched, copying the IRA would be inconceivable due to lack of affordability, while its economy is nowhere near big enough to sustain a self-contained industry for green goods.
Buy-out – Orsted will buy out its joint venture partner Eversource Energy from the 924 MW Sunrise Wind offshore wind project in New York, in signs that the Danish wind giant is still keen to grow in the nascent American offshore wind market, despite rising costs, Bloomberg reported. Developers have been cancelling or delaying projects off the Atlantic coast as they battle high interest rates and supply chain bottlenecks, with Orsted abandoning two New Jersey projects last year and taking $4 bln in impairment charges. Investors await an update from Orsted early next month on how it plans to recover from a series of costly setbacks last year, mostly in its US division. Orsted hasn’t detailed the price paid for the 50% stake in Sunrise Wind, but the agreement is contingent on the project winning a contract to deliver power in a New York auction.
Three-year wait – The earliest that Manitoba, the only Canadian province under the federal carbon backstop pricing set at C$65/t increasing to C$80/t in April, can introduce its own carbon pricing system for industrial emitters in 2027, according to Canada’s environment ministry, a local outlet reported Wednesday. The government plans to review provincial carbon pricing plans in 2026 to ensure they meet federal criteria for 2027 to 2030. Last week, provincial Premier Wab Kinew signalled he would work with Ottawa to re-examine how the federal carbon price was applied in Manitoba. (Global News)
Pipeline process – Minnesota has released a draft environmental impact statement for Summit’s proposed 28-mile (45.1 km) Otter Tail to Wilkin CO2 pipeline project in the western central part of the state, Agweek reported Wednesday. The draft found the project to result in: minimal impact on property values; minimal noise beyond construction of the pipeline; continuation of agriculture along the pipeline right of way (though this would be disrupted during the construction period); and no impact on public health and safety from normal operations. Nevertheless, opponents include environmental groups and some landowners, who have brought concerns over safety, potential damage to cropland and property values, and the threat of eminent domain. The public has until Feb. 24 to comment on the draft, which would help the Public Utilities Commission determine whether to approve or deny the proposal.
Family forests – More family woodland owners in New England have an opportunity to apply for financial support to care for their forested property, and increase carbon storage, following a newly launched partnership between New England Forestry Foundation (NEFF) and the American Forest Foundation (AFF). Northeast family forest owners of at least 30 acres are eligible to enrol in the Family Forest Carbon Program (FFCP), administered by AFF and the Nature Conservancy and partially funded in New England by NEFF. More specifically, the programme is open for enrolment in all counties in Maine, New Hampshire, and Vermont, and the following counties in Massachusetts: Berkshire, Franklin, Hampden, Hampshire, and Worcester. The project is the first component of NEFF’s New England Climate-Smart Commodities Partnership initiative, which was made possible by a $30 mln US Department of Agriculture grant. NEFF will be launching other opportunities for family forest owners in other states and counties in coming months, as well as introducing an incentive programme for Tribal Nations in Maine and large commercial landowners.
VOLUNTARY
AND FINALLY…
Going underground – A study examining 207 subway projects across 47 countries found that expanding subway systems by 1 km costs approximately $200 mln. KPMG estimates the annual operational and maintenance costs to be around 2% of the initial investments. While subway systems can effectively reduce congestion and improve health, their high upfront costs often make them unaffordable for many city governments, especially those with fiscal constraints. However, recent research highlighted by the World Economic Forum and utilising the World Bank’s satellite-based carbon emissions database has quantified the impact of subway systems on CO2 output. The study covered about 1,500 cities with populations over 500,000, of which only 192 have subway systems. It was found that CO2 emissions in cities with subways are 50% lower than those without, translating to an 11% reduction in global CO2 emissions. For city leaders considering subway investments, two main considerations emerge: the economic benefit and financing options. The economic benefit includes CO2 savings alongside reduced commuting times and vehicular pollution. The Social Cost of Carbon (SCC), which estimates the cost of damages caused by an additional ton of CO2, varies based on future discounting methods. By calculating the annual emission differences with and without subways from 2020 to 2050, valued at the SCC, and considering investment and operational costs, the study assessed the returns on investment through the net present value ratio (NPVR). If NPVRs are greater than 0, subway projects yield positive co-benefits, with NPVRs above 1.8 justifying subway systems on climate grounds alone. The study presented three scenarios:
- Modest assumptions: $50/t SCC and $280 mln/km cost, yielding co-benefits in 294 cities.
- Midrange assumptions: $100/t SCC and $200 mln/km cost, yielding co-benefits in 465 cities.
- Aspirational assumptions: $150/t SCC and $140 mln/km cost, yielding co-benefits in 794 cities.
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