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Published 00:51 on November 29, 2023 / Last updated at 00:51 on November 29, 2023 / Mark Tilly / Newsletters
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COP28
With the UN body mandated to shape the carbon crediting mechanism under Article 6 of the Paris Agreement having already produced its final recommendations, the focus on markets in negotiations at COP28 will be on finalising technical details relating to the international trade of units, such as determining the rules around national authorisation of transactions, the transparency of reporting, and establishing safeguards for the mechanism.
EMEA
EU ETS revenues are still being directed to fossil fuels infrastructure due to legal loopholes and a lack of transparency, green groups warned on Tuesday.
EU co-legislators in the early hours of Tuesday reached a provisional political agreement to set common internal market rules for gas and hydrogen, after extensive closed-door negotiations that left some elements still to be concluded.
German utility RWE, historically the biggest emitter in the EU ETS, is dropping its ‘strategic’ hedging of carbon for lignite coal power production, it announced Tuesday, as it unveiled an ambitious new roadmap for green energy technology investment over the next seven years.
An Estonia carbon project developer has raised €2.5 million in seed funding to expand its European portfolio of forestry activities, it said Tuesday.
European carbon prices slumped for a second day, falling to a new one-year low as selling across all energy markets continued, while traders also digested news that a major EU emitter had called time on its long-term hedging strategy.
AMERICAS
The government of Alberta will provide energy, building, and chemical industries with a 12% incentive tax credit for new eligible capital project costs on carbon capture, utilisation, and storage (CCUS) operations, funded in part by its emissions trading system, the province announced Tuesday.
Alberta’s United Conservative government introduced a resolution Monday to challenge the federal Liberal government’s draft regulations in pursuit of a nation-wide net zero electricity grid by 2035.
A technology company, an offset project developer, and an Indigenous tribe have pooled resources and funding to co-develop the first phase of an Improved Forest Management (IFM) project in the northern regions of British Columbia.
ASIA PACIFIC
A financial conglomerate in Japan has decided to invest in Singapore-based carbon exchange Climate Impact X (CIX) to help scale the international carbon credit market in Asia, they announced Tuesday.
Oil and gas company Santos has urged the government to provide a guaranteed supply of Australian Carbon Credit Units (ACCUs) in order to meet its compliance regulations under the Safeguard Mechanism, according to tabled correspondence.
A Japanese peer-reviewed study has verified direct air capture (DAC) of carbon occurring in the chemical process for manufacturing concrete, which it said could be useful for the industrial sector or countries looking to offset their emissions.
The Shanghai government will auction off 3 million carbon allowances under its emissions trading scheme this week to ensure regulated companies can acquire enough permits for compliance purposes.
India has pledged to triple its renewable energy capacity by 2030 as part of efforts to meet climate targets, but needs to spend $101 billion more than planned this decade to align itself with the International Energy Agency’s pathway to meeting its 2070 net zero target, according to a report released Wednesday.
INTERNATIONAL
Construction of new coal-fired power plants has dropped in 2023 across most of the world while all of Asia continues to lead the world in terms of new coal construction, not counting China, according to a report released Tuesday.
A report released by the World Economic Forum (WEF) and consultancy Accenture on Tuesday assessing the decarbonisation efforts of heavy industry and transport sectors says the industries require $13.5 trillion in investment to achieve net zero by 2050.
VOLUNTARY
This year has seen a shift in the voluntary carbon markets, with demand gravitating towards pricier, higher quality carbon credits that bring other benefits in addition to mitigating greenhouse gas emissions, according to a report published on Tuesday.
A European-based biochar developer has completed a funding round with capital raised from both existing and new investors, to fund its transition from proof-of-concept to the building of commercial-scale facilities.
The Voluntary Carbon Markets Integrity Initiative (VCMI) issued new guidance today for carbon credit-buying firms, including a new proposed use case for carbon credits that has swiftly divided opinion, with campaigners warning the proposal risks diluting company goals and market participants claiming it could raise ambition by encouraging more companies to take action.
A Singapore-headquartered carbon software firm has teamed up with a UK-based exchange technology provider to build carbon trading infrastructure for national markets connected by a shared registry, they announced Tuesday.
AVIATION
A US carrier has become the first customer of a carbon dioxide removal (CDR) company that compresses biomass residue, such as timber or farm crops, into dense carbon blocks at relatively low cost.
BIODIVERSITY (FREE TO READ)
A UK-French led initiative on an international biodiversity credit market has launched a ‘call for views’ to help it address the challenges in scaling the market on topics including pricing, stewardship, and offsets.
Just four of 53 of the world’s biggest companies most at-risk from deforestation loss have a policy on the topic covering their entire supply chains, non-profit Ceres has found.
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
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
EMEA
Press on regardless – Germany will continue to pursue its green transition plan and be at the forefront of innovation in climate-friendly technologies, even in the face of a budget crisis resulting from a landmark ruling by the constitutional court, Clean Energy Wire reports. The coalition last week froze future spending commitments and chose to declare an emergency situation for 2023 to allow for greater levels of debt, in order to keep energy prices in check for citizens and companies. Following that, the German government faces tricky decisions around how to plug funding gaps for energy and climate programmes, as well as other areas. However, chancellor Olaf Scholz said that negotiating the country’s 2024 budget would be a key goal in modernising the country against the backdrop of intense global competition.
Spain’s support – The European Commission has approved a €1.1 bln Spanish scheme to support investments for the production of equipment necessary to foster the transition towards a net zero economy, in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework, initially adopted by the Commission in March and amended last week. It provides grants and will be open to companies producing relevant equipment, namely batteries, solar panels, wind turbines, heat-pumps and electrolysers, as well as key components designed and primarily used as direct input for the production of such equipment or related critical raw materials necessary for their production.
CCS at risk – A report from Westwood Global Energy Group indicates that the UK has the potential to significantly exceed its CCS targets by 2030 and 2035. However, the study warns of risks due to delays, cancellations, and under-delivery in projects. The UK could potentially have up to seven carbon storage sites by 2030, with a capacity of over 45 Mt per annum, and possibly double its 50 Mt/year target by 2035. Yet, even minor delays could lead to missing the 2030 targets, Westwood warned. Challenges include government funding setbacks, congested licence work programmes, and difficulties in securing CO2 access. Westwood emphasises the need for timely project completion and effective contingency planning to ensure adherence to schedules and a stable CO2 supply.
Gas gets a pass – The Scottish government has postponed its plan to phase out fossil fuel boilers by at least three years, now aiming for legislation in 2025 and potentially implementing regulations by 2028. Zero Carbon Buildings Minister Patrick Harvie cited fairness and clarity as reasons for the delay. The initial phaseout was planned for 2025 for off-grid properties and 2030 for those on the gas mains, with a 2045 “backstop” for all homes to use zero-emission heating systems. The revised plan also includes targets for different types of housing, with private rentals needing to meet a minimum energy standard by 2028, and owner-occupied homes by 2033. The government still aims for all homes to shift to clean heat by 2045. The decarbonisation plan, estimated to cost £33 bln, has raised financial concerns among opposition MSPs. The government has committed over £1.8 bln for this purpose and offers grants and loans to assist with the installation of heat pumps. This initiative is part of Scotland’s effort to reduce greenhouse gas emissions, which significantly come from heating buildings. (BBC)
ESG benchmarking – The Abu Dhabi stock exchange has launched an ESG benchmark index ahead of COP28, which will initially include 24 companies listed on the Abu Dhabi Securities Exchange (ADX) and constituents of the FTSE ADX General Index. Developed in collaboration with FTSE Russell, the FTSE ADX ESG Screened Index is designed to measure the relative ESG performance of companies based on their publicly reported emissions, environmental product innovation, human rights, shareholders and others, measured on an annual basis. (Reuters)
ASIA PACIFIC
Linking up – Several regional councils in Australia’s Queensland have joined forces to develop 930km of transmission lines in the state’s north, featuring 4.2 GW of solar, grid-scale battery storage, Renew Economy reports. The council signed an MoU with Visir, the parent company of transmission company CuString. The Remote Area Planning and Development (RAPAD) Power Grid would install a ‘non-regulated line’ supported by commercial contracts with major network users. The RAPAD Grid would help power north Queensland’s green industrial and hydrogen export ambitions, particularly in Gladstone and Townsville, by bridging transmission gaps, and hosting new renewable energy capacity.
Biofuel marketplace – ACX, which operates environmental trading platforms in Abu Dhabi and Singapore respectively, has launched a physical biofuels trading platform, it announced Tuesday. The platform will allow market participants to facilitate trading in biodiesel, renewable diesel (HVO), sustainable aviation fuel (SAF) and some of its feedstocks such as UCO (used cooking oil) on a 24/5 basis, ACX said. The size of the global market for biodiesel and SAF is currently estimated at over 50 mln tonnes in 2023 and is expected to exceed 80 mln tonnes by 2030, or a value exceeding $104 bln, according to ACX.
Low-carbon cement – Taiwan Cement Corporation (TCC) will increase its stake in Turkish cement firm Oyak and Portuguese cement company Cimpor to sustain competitive advantages in response to the emergence of carbon border taxes, with a budget of NTD 26.6 bln ($845 mln), it said in a statement released Tuesday. Oyak is actively developing alternative fuels and advanced clinker technologies to reduce carbon emissions, while Cimpor built a Cameroon-based cement plant that uses biomass fuel for 90% of its energy consumption. Expanding the low-carbon product capacity will help TCC enter the European market, the company said.
New tools – Japanese agritech startup Enowa will introduce its water management system Paditch and 100 valves to a rice farm operator in Toyama Prefecture, supporting the creation of carbon credits under the domestic J-Credit scheme, it announced Tuesday. Enowa said the initiative is based on a methodology that helps rice farmers cut emissions by extending the mid-drying period. The company also plans to release an AI-based diagnosis to prevent extended mid-drying from damaging rice cultivation.
AMERICAS
Brazil ETS vote this week – A vote on Brazil’s emissions trading system (ETS) legislation is due this week in Congress’ lower house, the Chamber of Deputies, and President Luiz Inacio Lula da Silva’s administration had promised the cap-and-trade bill would become law before COP28, which begins Thursday. On Nov. 20, environmental experts defended the inclusion of agriculture industry in the proposed Brazilian Greenhouse Gas Emissions Trading System (SBCE) as a credit generator at a hearing, despite having its compliance obligations removed. On Nov. 21, a member of the Chamber of Deputies, Giovani Cherini, submitted written testimony that “cow farts” do not cause climate change, and suggested that Brazilians may be supplied with nutrition pills instead of food if the agriculture industry is over regulated. Cherini is part of the same Liberal party as former President Jair Bolsonaro.
Bike battery blazes – Landlords in New York City are increasingly banning the storage of e-bikes in apartment buildings following a rise in fires started by lithium batteries used in e-bikes and other mobility devices, reports Gothamist. According to the city fire department, illegal or dangerous batteries have started 243 fires this year, which have killed 17 people. Landlords are under pressure from insurance companies to prevent these devices from being brought into their buildings, and the city council has tried to crack down on illegal lithium batteries. In October, it also passed a bill establishing an office to facilitate trade-ins of unsafe e-bike batteries for certified batteries, which the council member who introduced the legislation described as first-of-its-kind.
Breaking ground – An inaugural geothermal project is up and running in Nevada, set to help power Google’s data centers with clean energy. Startup Fervo has developed the 3.5MW geothermal plant, which will feed electricity into the local grid that serves two Google data centres outside of Las Vegas and Reno. The project is different from typical geothermal plants in that there is hot rock but no fluid — so to generate the geothermal energy, Fervo has drilled horizontal wells through which it pumps water, which is then heated to bring steam to the surface. The tactics are gleaned from the oil and gas sector, which tap energy sources that would otherwise be out of reach. The project will contribute to Google’s plan to run on around-the-clock pollution-free electricity by 2030. (the Verge)
Signed into law – By 2040, 100% of Michigan’s energy is set to come from clean sources under a new law approved by Governor Gretchen Whitmer (D) Tuesday, notably one of the most ambitious clean energy goals among the United States. Earlier legislation proposed a 100% clean energy standard by 2035, but the adjusted timeline requires an 80% clean energy standard by 2035. The legislation states that clean energy sources generate electricity without greenhouse gas emissions, thus including nuclear generation and natural gas generation with carbon capture. The legislation also stipulates a renewable standard of 50% of 2030 and 60% by 2035, which includes generation via wind, solar, and hydroelectric facilities. (Detroit Free Press)
Alberta abates – The province of Alberta said it hit its methane reduction goal three years early, cutting the gas output by 45% compared to 2014 levels, a government press release said Tuesday. The government said it achieved its target in 2022, and was originally planning to by 2025. As much as C$57 mln ($42 mln) in incentives was offered to cut methane emissions by the province since 2020, the press release said. However, Alberta could be undercounting its methane emissions by as much as 50%, according to a study from Carleton University’s Energy and Emissions Research Lab released on Nov. 20.
More value, less carbon – Chemical maker Dow approved an investment Tuesday in the $6.5 bln Path2Zero project in Alberta, which claims to be the world’s first net zero Scope 1 and 2 emissions ethylene and derivatives complex. According to a release, the new capacity would allow Dow to capture growing customer demand in packaging, infrastructure, and hygiene, with potential additional value captured from commercializing low and zero-emissions products. The investment is expected to deliver $1 bln of EBITDA growth per year at full run rates over the economic cycle while decarbonizing 20% of Dow’s global ethylene capacity.
Carbon farmer – Farmers in the western part of Brazil’s Parana state will be given carbon credits for their sustainable agriculture during the 2023/2024 harvest, a press release said Tuesday. Agricultural startup NetWord Agro will provide credits based on carbon sequestration in soil, crops, and maintained forest during the cultivation of soybeans, corn, wheat, and oats.
VOLUNTARY
A credit like no other – A new partnership between carbon ratings agency BeZero Carbon and CUSIP Global Services (CGS) is creating unique identifiers for carbon credits in order to improve the efficiency of trading credits on the VCM. The CUSIP developed by CGS is a nine-character alphanumeric security identifier that captures the unique attributes of issuers and their financial instruments throughout the US and Canada. This has been the standard for US securities identification for many decades, and by transposing its use into the carbon market, BeZero and CGS will integrate carbon credit data into the most widely used global market identifier available, the partnership claims. CUSIP numbers will be applied to projects accredited by the Verified Carbon Standard, American Carbon Registry, Gold Standard and Climate Action Reserve, and will also be integrated onto the BeZero Carbon platform in the coming months. (Retail Banker International)
AVIATION
Flying or washing? – British airline Virgin Atlantic commenced its first transatlantic flight powered entirely by sustainable aviation fuel (SAF) on Tuesday, although the moment heard greenwashing criticisms from environmental groups. Greenpeace warned that the feedstock used in the flight is not available in quantities large enough to make a significant impact on aviation’s emissions, while an aerospace engineer said that the production process was a “technological dead-end” that cannot be sustainably scaled beyond a few percent of existing jet fuel use. (Griffin Daily)
AND FINALLY…
Colonial legacy – Considering colonial rule radically shifts historical responsibility for climate change, according to a study by Carbon Brief. While accounting for emissions under colonial rule still places the US and China as top contributors to global warming, the analysis found that the French share of historical emissions increases by half, the UK nearly doubles, the Netherlands nearly triples, and Portugal more than triples. Meanwhile, India is among the former colonies seeing its share of historical responsibility fall — by 15%, to below the UK — with Indonesia down by 24% and Africa’s already small contribution also dropping 24%. The new analysis is based on CO2 emissions from the burning of fossil fuels and cement production, along with land use, land use change and forestry, and covers the period from 1850-2023.
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