News and intelligence on carbon markets, greenhouse gas pricing, and climate policy
Published 02:42 on December 23, 2022 / Last updated at 03:02 on December 23, 2022 / Newsletters / No Comments
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A Japanese expert panel on Thursday approved a draft basic decarbonisation plan, with the government now intending to present a bill to parliament early next year that would legislate plans to launch an emissions trading scheme in 2026 and a carbon levy on fossil fuel imports two years later.
Voluntary carbon credit retirements are set to fall below 2021 levels this year due to a massive fall in demand for forestry and land use units, while renewable energy credits poised for a year-on-year rise, according to data from a carbon analytics firm.
Carbon credit certifier body Verra has launched a new review process of its methodologies, prioritising those not been updated for five years while also updating two methodologies with immediate effect involving geological storage and afforestation, reforestation, and revegetation (ARR) projects.
Two companies announced Thursday they are partnering up to expand access to clean cooking technologies, which are expected to generate over $20 million in voluntary carbon credit sales over the next decade.
A US-based biochar company has been approved to start selling carbon credits on a major platform for engineered removal units.
Alberta compliance offset values climbed to new heights this week after the provincial government set the CO2 price trajectory and increased credit usage limits under the Technology Innovation and Emissions Reduction (TIER) regime, as data showed financial players have bolstered their positions since early November.
California Carbon Allowance (CCA) prices continued their end-of-year run up this week, albeit at a slower pace than in 2021, while RGGI Allowance (RGA) values picked up over the last five days after a prolonged stagnation.
California Governor Gavin Newsom (D) on Wednesday tapped a representative from organised labour to sit on the state’s Independent Emissions Market Advisory Committee (IEMAC), filling a nearly two-year vacancy on the carbon market watchdog.
US biofuel credit (RIN) values this week pared back roughly half of their losses that followed the EPA publishing lower-than-expected Renewable Fuel Standard (RFS) quotas, with traders attributing the price bump to year-end activity.
Another Canada-headquartered carbon credit investment firm is preparing to go public.
Finland is likely to fail to meet its net carbon sink target under the EU’s land use regulation (LULUCF), researchers said in a report published this week that concluded the country would face massive costs either from fines or from having to buy allowances from other member states.
EUAs rose 1.5% on Thursday on relatively little volume as the market exhibited more of the volatility that has seen strong price moves over the last week in the approach to the holiday break, while energy markets fell yet again amid milder weather.
China’s environment ministry has circulated a set of updated greenhouse gas emissions accounting guidelines for power generation facilities, a move considered crucial to improve the transparency and effectiveness of the national emissions trading scheme (ETS).
The lack of a clear legal framework has made it difficult for foreign businesses to buy nature-based carbon credits in Vietnam, according to local media reports, potentially redirecting investments to other nations in the region instead.
Even temporarily overshooting the 1.5-2C temperature limit goals of the Paris Agreement could significantly increase the risk of tipping point cascades that lead to irreversible changes to the climate, according to analysis published on Thursday.
BIODIVERSITY (FREE TO READ)
The Philippines has partnered with the One Planet Initiative to consider the possibility of establishing a biodiversity credit market, as the government is looking at ways to attract more investments to help battle the challenges of climate change and nature loss.
The Australian government will develop regional plans to help protect, restore, and manage the environment, starting with four areas in New South Wales, however green groups have warned its plan could lead to unintended consequences and perverse outcomes.
A 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).
ART/TREES and CORSIA must urgently restrict the use of HFLD credits to safeguard environmental integrity, argue several consultants critical of decisions by both bodies to enable HFLD credits to be used to offset fossil fuel emissions.
Ghana is fast developing global leadership as a seller of carbon credits under the Paris Agreement’s Article 6 international trade provision by establishing levies on such exports, having already developed key relationships with several buyer nations and big-hitting trading houses.
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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
Hydrogen leakwatch – The green hydrogen express is gathering pace, but it may have a worrying problem with leaks, Reuters reports. As governments and energy companies line up big bets on the much-touted fuel of the future, some scientists say the lack of data on leaks and the potential harm they could cause is a blind spot for the nascent industry. At least four studies published this year say hydrogen loses its environmental edge when it seeps into the atmosphere. Two scientists told Reuters that if 10% leaks during its production, transportation, storage or use, the benefits of using green hydrogen over fossil fuels would be completely wiped out.
Coal this Christmas – Germany is burning coal for electricity at the fastest pace in at least six years, data compiled by Bloomberg shows. It’s also poised to be one of the few nations to increase coal imports next year. Germany plans to phase out coal use by 2038, but the ruling coalition is pushing for an even earlier target of 2030. To weather the current crisis, the country has temporarily brought back some coal plants that were offline and the country now generates more than a third of its electricity from coal-fired power plants, according to Destatis, the federal statistical office. In Q3, its electricity from coal-fired generation was 13.3% higher than the same period a year earlier, the agency said.
Poor marks for Czechia – The EU’s overarching green deal failed to make sufficient progress under the outgoing Czech Presidency of the EU Council of member states, despite advances on biodiversity and clean air, according to the European Environmental Bureau. The watchdog’s six-month assessment of the six-month identified poor effort and outcomes on agriculture, water, chemicals, and the rule of law, and insufficient progress on climate. The EEB provides a comprehensive biannual assessment of each outgoing presidency’s performance, which will next be published on Jan. 5 next year.
Brussels waives through – The European Commission continued its slew of pre-Christmas approvals. Spain will receive almost €869 mln from the EU’s Just Transition Fund (JTF) following the adoption of its Just Transition Programme and its Territorial Just Transition Plan (TJTP). Spain is on track to phase out coal for energy production ahead of its initial planning of 2030. The cash will help deliver a just climate transition in the regions affected by the corresponding closures of coal mines and coal power plants. The European Commission approved a €3 bln Polish scheme to support companies active in the Polish gas market in the context of Russia’s war against Ukraine. The scheme was approved under the State aid Temporary Crisis Framework that recognises that the EU economy is experiencing a serious disturbance. Germany also got approval for a €49 bln scheme to provide grants to companies across sectors of all sizes which are final consumers of electricity, natural gas, and heat produced using natural gas and electricity.
DC Risk off – Insurers are resisting efforts by the US government to probe whether hurricanes and wildfires are making insurance unaffordable for American homeowners, as financial regulators sharpen their scrutiny of climate-related risks”, the FT reports. The US Treasury has proposed requiring insurers to hand over underwriting data, broken down by zip code and covering the last five years, in an attempt to assess the potential for ‘major disruptions’ in insurance coverage in some parts of the country. But business groups have argued the plans would push up costs for insurers, and accused the Treasury of failing to co-ordinate with state-level regulators, in comments submitted before a deadline this week.
No deal — JPMorgan said on Thursday it had set targets to cut emissions tied to its finance and dealmaking in the iron and steel, cement, and aviation sectors, as those emissions linked to oil and gas usage rose, Reuters reports. As the largest US bank and major funder to the fossil fuel industry, investors and campaigners keenly watch JPMorgan’s climate efforts as the world shifts to a low-carbon economy. After releasing targets for oil and gas, electric power, and autos in 2021, the new sector targets mean the bank now has plans to reduce emissions from all of the sectors most responsible for climate-damaging carbon emissions. For iron and steel, the bank said it aims to cut emissions per tonne of crude steel produced by 31% by 2030. For cement it is targeting a 29% cut and for aviation a cut of 36%. The bank said all the targets were in line with the International Energy Agency’s Net Zero Emissions (NZE) scenario.
Ain’t easy being green — A Canadian federal advisory body is proposing to disqualify any new oil and gas projects from being classified as green, and award that designation only in a limited and qualified way to projects to reduce pollution from existing fossil-fuel production. The recommendations are included in a framework for a rulebook to define sustainable investments in the country, known as a green taxonomy, a copy of which was obtained by The Globe and Mail. Submitted to Finance Canada this fall by the government-appointed Sustainable Finance Action Council (SFAC), the 77-page document received sign-off from all of that group’s members – including representatives of most major Canadian financial institutions, insurers, and pension funds. But it has not yet been publicly released by Ottawa, even as the EU and other jurisdictions have taken a lead in developing such guides for growing numbers of climate-conscious investors.
A win for wood — A perennial battle in Congress over the environmental effects of burning wood for energy has tipped again toward the biomass industry, E&E News reports. The $1.7 trillion omnibus spending bill declares forest bioenergy carbon neutral and instructs federal agencies to adopt policies supporting that assumption, discarding efforts in both the House and Senate to avoid the terminology. The bill, poised to pass by Friday, calls on agencies to “establish clear and simple policies” for forest biomass as an energy source, including policies that “reflect the carbon neutrality of forest bioenergy and recognize biomass as a renewable energy source.” Industry groups say turning woody biomass into energy — such as by burning wood pellets — doesn’t add to net carbon emissions as long as forests aren’t converted to nonforest uses in the process. The bill language, which has appeared annually for several years, reflects that position.
No encore for Glencore – The Canadian government has rejected Glencore’s proposal to develop the Sukunka coal mine project in northeastern British Columbia (BC) owing to substantial adverse environmental effects that cannot be mitigated, NS Energy reports. The federal decision has been driven by the BC government’s refusal to issue an environmental assessment certificate to the proposed open-pit metallurgical coal mine. Assessment of the Sukunka coal mine project was undertaken by BC on behalf of the Canadian government. According to the environmental assessment, the project will have considerable adverse and cumulative effects on the vulnerable and red-listed Quintette caribou herd, increasing the probability of its extinction.
EV boost — The New Zealand government has touted its clean car policies, highlighting there a now more than 62,000 EVs on the country’s road – 60% more than at the end of 2021. Transport Minister Michael Wood said in a statement Thursday there are now charging stations every 75 km for over 97% of New Zealand’s state highway network. “EV charger availability is only going to get better as we develop our national EV charging strategy which is set for release in early 2023, work with the sector on innovations like temporary charger stations, and roll out more infrastructure,” he said.
Wind power — The Asian Development Bank has committed $107 million with BIM Wind Power Joint Stock Company to develop a 88 MW windfarm in Ninh Thuan province, Vietnam. The ADB said in a statement Wednesday it expects the windfarm will offset around 215,000 tCO2e per year. ADB was the lead arranger and book runner, sourcing $25 mln from its own capital, $25 mln from the Japan International Cooperation Agency, $13 mln from the Hong Kong Mortgage Corporation, $17 mln from Sumitomo Mitsui, and $18 mln from ING Bank, and $9 mln from Cathay United Bank. ADB said it will also administer an additional $5 million grant from the Goldman Sachs and Bloomberg Philanthropies-backed Climate Innovation and Development Fund to help de-risk the investment. the grant will be used to enforce social and environmental safeguards related to the projects, such as by reducing shadow flicker impacts, and preservation of wildlife habitat. “This project is a crucial step toward Viet Nam’s resilience and ongoing recovery by further expanding the country’s renewable energy mix and contributing to its net-zero targets,” ADB Director Jackie B. Surtani said.
New platform – Chinese tech giant Tencent has launched an online platform that aims to fire up innovation in low-carbon technology in the country by connecting entrepreneurs, investors and researchers, South China Morning Post reports. The company hopes its TanLIVE platform – which includes a resource pool for stakeholders, a tool kit that gathers policy insights, and incubators -will accelerate the commercialisation of low-carbon technologies and function as China’s version of Climate-KIC, the EU’s largest climate-focused innovation community, according to the report.
Drilling underway– Japan’s biggest oil and gas explorer, Inpex Corp, has commenced exploratory onshore drilling operations at a location near its MinamiNagaoka gas field in Niigata Prefecture, the company said in a statement released Thursday. The new project, likely to be carried out until July 2023, could contribute to the improvement of the island nation’s energy self-sufficiency rate if the drilling leads to the commercial production of oil and natural gas, according to the statement. The exploratory plan in June was made eligible to receive a public grant from the Japanese Ministry of Economy Trade and Industry (METI).
Popping CORCs – Carbon removal standards body Puro.earth issued 225,000 credits, known as CORCs, in 2022, up 250% from last year, it revealed on Linkedin. The trading value of the credits also increased 350% year-on-year. Some 27 new carbon removal suppliers joined the Finnish based standards body, and supply of projects issuing CORCS grew to 27 countries. The number of sales channel partners and traders who sell CORCs to their clients grew to 31 organisations including Watershed, Invert Inc, Pledge, Patch, Supercritical, and Cloverly.
Blue carbon boost – The University of the West Indies St Augustine Campus and the Inter-American Development Bank have signed a technical cooperation agreement for $996,000 to implement a monitoring, verification, and reporting (MRV) system for mangrove ecosystems, reports the Trinidad and Tobago Guardian. The science-based data platform on the sequestration and release of blue carbon will be used in participant country sites of the UK’s Blue Carbon Fund that was set up to invest in projects in the Caribbean and Latin America.
Credit where credit’s due – An indigenous Peruvian tribe, the Kichwa, seek compensation for revenues generated from the sale of carbon credits produced from the Cordillera Azul National Park, a park created in 2001 that reportedly runs across their ancestral land, the Associated Press reports. Over the last eight years, the park’s management has arranged to sell at least 28 million credits, bringing in tens of millions of dollars from oil giants Shell and TotalEnergies, who bought carbon credits from the park. Members of the Kichwa tribe insisted they weren’t consulted about the park or the offsets. The Peruvian government and CIMA, the Spanish acronym for the non-profit set up to protect the national park, argue consent wasn’t required here because the park was never Kichwa land.
SCIENCE & TECH
Keep it in the ground – A new technology under development at the Sandia National Laboratories could help companies keep carbon emissions deep underground, New Mexico Inno reports. Sandia engineers are working with scientists at the University of Texas – Austin, the California Institute of Technology, and the Research Triangle Institute to build sensors that could detect CO2 leaks from underground storage vaults. The sensors could be used by companies working on carbon sequestration — the process of removing carbon from the atmosphere and storing it in a solid or liquid form.
It’s in the books – Klimaatklever – a term for climate activists who glue themselves to art – has been voted the Dutch word of the year. The Van Dale dictionary, the authority on the Dutch language, defined klimaatklever as “an activist who glues himself to an object with symbolic value to raise public awareness of climate change”. Belgian voters in Flanders also picked the slang term, which pokes fun at the activists, as their word of the year. It was coined by combining the Dutch word for climate with klever, which can mean sticker or one who clings. (Telegraph)
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CP Daily: Thursday December 22, 2022 « Carbon Pulse – Carbon Pulse
News and intelligence on carbon markets, greenhouse gas pricing, and climate policy