News and intelligence on carbon markets, greenhouse gas pricing, and climate policy
Published 23:15 on April 1, 2022 / Last updated at 23:15 on April 1, 2022 / Newsletter / No Comments
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Verified emissions in the EU ETS rose by 9.1% in 2021, according to incomplete and preliminary like-for-like data published by the European Commission on Friday.
Some 440 companies, including most major names in the power, manufacturing, mining, and finance industries, have agreed to join Japan’s voluntary carbon emissions trading market.
The spot price for Chinese carbon allowances remained stable this week as the bullish signal from a draft plan showing the government intends to make tougher-than-expected cuts in allocation was offset by the next compliance deadline being set almost two years into the future.
Taiwan has released a transition plan to meet its 2050 target, leaning heavily on boosting renewables and investing in hydrogen, CCUS, and nature-based solutions with a yet-to-be decided carbon price playing a supporting role.
Australia will introduce veto power for the minister of agriculture for some carbon offset projects after next week, the government confirmed Friday.
Canada’s federal ‘backstop’ CO2 price and British Columbia’s carbon tax increased as scheduled to C$50 ($40) on Friday, as the oil-rich province of Alberta suspended its gasoline tax as crude prices remain elevated.
Financial players’ California Carbon Allowance (CCA) holdings this week fell to the lowest since last spring as the March contract rolled off, while compliance entities parted with permits to a lesser extent, according to US Commodity Futures Trading Commission (CFTC) data published Friday.
The Virginia State Corporation Commission (SCC) on Friday approved a petition by Dominion Energy to voluntarily withdraw its plan to recover RGGI-related costs over the next rate year, with the utility to provide an update on the matter this summer as the state’s carbon market membership remains uncertain.
EUAs consolidated early gains amid sharply weaker natural gas prices on Friday, shrugging off one of the weakest ever auctions as EU data revealed the largest annual increase in verified emissions.
EU plans to label some gas and nuclear power plants as green investments face rejection by lawmakers as war in Ukraine and the resulting scramble away from Russian fossil fuels has drastically altered the bloc’s energy outlook, several EU sources have told Carbon Pulse.
It’s been a somewhat wild start to 2022, and with it the received wisdom that that EU carbon and gas prices move together, is – temporarily? – deceived wisdom.
An Australian oil and gas company has unveiled plans to cut its emissions to zero by turning them into non-fungible tokens (NFTs), fuelling global hopes that the world can accelerate GHG cuts with the cryptocurrency approach, which analysts say can generate around 50 billion offsets per year.
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North American Carbon World (NACW) 2022 – Apr. 6-8 in Anaheim, California – presented by the Climate Action Reserve: Learn, collaborate, and network on carbon markets and climate policy at NACW, North America’s largest carbon event. NACW features comprehensive and up-to-date information, key thought leaders advancing innovative climate solutions, and the best networking opportunities with colleagues in the business, government, nonprofit, and academic sectors. NACW will dive into the status and future of North American carbon markets, climate policies, innovative solutions, natural climate solutions, net zero pledges and beyond, transportation and LCFS markets. www.nacwconference.com
City Week 2022: Resetting Priorities for a Better Future – Apr. 25-27 at London Guildhall: Now in its 12th year, City Week is the premier gathering of the international financial services community. Organised in partnership with the UK Government and leading City institutions, City Week brings together industry leaders and policy makers from around the globe to consider the future of global financial markets. Each day will address a specific theme, with Day 1 focussing on “Meeting the climate change challenge – the role of financial services in achieving net zero”. www.cityweekuk.com
Reuters Events: Global Energy Transition 2022 – June 14-15 in New York City: The conference unites CEOs and changemakers from the energy, industrial, and government ecosystems to shed light on the defining issue of our time, and help companies meet a uniquely difficult challenge. Over two days and five critical themes, we will define the future of energy, inspire a decade of action, and prepare the sector for challenges still to come, with diverse voices from around the world bringing passion and expertise to deliver a new path forward. Find out more by visiting the website today: https://bit.ly/35H7cgb
BITE-SIZED UPDATES FROM AROUND THE WORLD
has teamed up with 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
The EU, China, and Sharm-El Sheikh – At the 23rd bilateral summit between the EU and China held on Friday, leaders agreed to continue cooperation on climate change and the energy transition, the Commission said in a press release. The EU stressed the importance of additional measures, including on phasing down coal, in the run-up to the COP27 UN climate talks in Egypt’s Sharm-El Sheikh. The two powers vowed to work together to secure a new global biodiversity framework at May’s COP15 in Kunming, with the High-Level Dialogue on Environment and Climate due to meet before the summer. At a press conference Commission President Ursula von der Leyen said “we have to cooperate constructively on climate issues,” adding that high energy prices should in no way be perceived as a pretext to step back on climate action. Climate efforts likely occupied only a minor role in the closed-door meeting, with the agenda dominated by security concerns amid the war in Ukraine.
Innovation first – The European Commission signed grant agreements of €1.1 bln with seven large-scale projects via the EU Innovation Fund, funded by revenues from the EU ETS, the EU’s executive body announced. These projects aim to reduce emissions by over 76 Mt of CO2eq during the first ten years of operation. The seven projects are deploying innovative low-carbon technologies at industrial scale, covering key sectors such as hydrogen, steel, chemicals, cement, solar energy, biofuels, and carbon capture and storage. Read Carbon Pulse’s report on the seven projects, more than half of which were seeking to capture and bury their emissions in the North Sea.
Doom and gloom – The heads of Germany’s large, energy intensive companies have warned against severe damages that would be caused by a stop to Russian gas deliveries. If Germany were to cut off Russian gas deliveries, the repercussions would be dramatic, Christian Bruch, CEO of Siemens Energy, told a German newspaper. For some industries, a steady gas supply is existential, said Bruch. He added that production without Russian gas would be possible by importing LNG and building up renewables, but not immediately. Delivering LNG gas from terminals in the west to the east of the country would also be difficult, he said. Chemical company BASF even warned of an unprecedented economic downturn that could submit the German economy into its worst crisis since the end of the second world war. It would take four to five years to substitute the Russian deliveries with other sources, the firm’s boss estimated. (Clean Energy Wire)
Cost of living keeps biting – Spiralling energy bills and disruptions caused by the war in Ukraine caused consumer prices in the eurozone to surge by a new record of 7.5% in March, according to the EU statistics agency Eurostat, AFP reports. Last month’s rise marked a further acceleration in inflation from February, which at 5.9% year-on-year was already a eurozone record, it said. The surge has been fuelled in part by a 44.7% hike in energy prices over the year, made worse as Europe found itself caught in an oil and gas crunch due to tensions with Russia over its invasion of Ukraine.
Mornings at the CAFE – The US National Highway Traffic Safety Administration (NHTSA) on Friday finalised Corporate Average Fuel Economy (CAFE) standards for light-duty vehicles that it said will “strengthen US energy independence and help reduce reliance on fossil fuels,” while pushing automakers to further improve the fuel efficiency of gasoline-powered vehicles as the industry shifts to electrification. The standards will increase fuel efficiency by 8% annually for cars and light trucks in the 2024 and 2025 model years, and by 10% annually for 2026. The standards will require an industrywide fleet average of approximately 49 mpg (20.8 km/L) in the 2026 model year. US gasoline consumption will be cut by more than 200 bln gal (757 bln L) through 2050 in comparison with a continuation of the Trump-era standards, NHTSA said. (Automotive News)
Annapolis approval – Maryland is expected to enact new clean energy policies that would require significant reductions in carbon emissions, a move that could shake up the fuel mix in a state that relies on natural gas for more than a third of its power. A supermajority of members in the Maryland House of Delegates voted this week to advance the “Climate Solutions Now Act of 2022,” which calls on the state to reduce its economy-wide GHG emissions by 60% below 2006 levels by 2031 and to achieve net zero by 2045. Having already passed the Senate, the bill could be vetoed by Gov. Larry Hogan (R), who this month called it a “reckless and controversial energy tax bill.” But state Sen. Paul Pinsky (D) said he expects the legislature to have enough votes to override a potential veto before the session ends Apr. 11. In addition to mandating state-wide emissions reductions, the bill would direct the Maryland Public Service Commission and the state’s Building Codes Administration to “study and make recommendations on the electrification of buildings in the state” by the end of 2023. An earlier version of the bill requiring buildings constructed beginning in 2023 not to use fossil fuels for water and space heating was amended to instead only require the study. The plan would also compel electric utilities to expand existing energy efficiency and conservation programmes, create new requirements for monitoring methane emissions from landfills, and require school boards to purchase electric school buses beginning in fiscal year 2025, among other provisions. (E&E News)
Hydrogen Horgan – A new government office dedicated to hydrogen projects and proposals could help British Columbia reduce GHG emissions 30% by 2050 and bolster the economy, Premier John Horgan said Thursday. Horgan said the BC Hydrogen Office will allow government to create a framework that doesn’t exist, making the province a leader in hydrogen use. The previous Liberal government announced plans for a so-called hydrogen highway shortly before the 2010 Winter Olympics with plans for hydrogen fuel stations between Vancouver and Whistler, but the idea fizzled out. (Toronto Star)
One down, three to go – Australian utility AGL Energy has taken the first major step towards the full retirement of the Liddell coal-fired power station, announcing the closure of the first of four of the power station’s generator units, Renew Economy reports. AGL announced that it had closed the first 500 MW coal-fired unit at the power station, as it moves to wind down the entire facility over the next 12 months. It is a major milestone for one of Australia’s oldest power stations and another nail in the coffin for coal fired generators, which have seen their reliability diminished with age and their financial viability eroded by the emergence of lower cost renewable energy supplies. As a reflection of the shifts in Australia’s power generation mix, the Clean Energy Council reported that renewables accounted for 32.5% of Australia’s power generation in 2021, an increase of nearly five percentage points from 2020 (27.7%). Fossil fuel-based power generation fell to 67.5% in 2021, down from 72.3% in 2020, and from 86.5% in 2014.
Bigger footprint – Total GHGs emitted by Asia’s biggest oil refiner, Sinopec, drifted up for a second year in 2021, while methane recovery rose nearly 20% from levels a year-ago, Reuters reports. The state-backed firm plans to achieve carbon-peaking and carbon-neutrality ahead of the national schedule of 2030 and 2060, respectively. However, the company’s total climate-warming GHGs reached 172.56 MtCO2e in 2021, the second year of increase, according to Sinopec’s annual environmental report released on Friday. Methane emissions were 299.9 mln cubic metres in 2021, up from 283.56 mln in 2020.
Modest first – The first offsets under the Japan-Bangladesh JCM were issued this week, with a modest 499 units awarded for CO2 reductions at two project sites – an efficient air condition project at a chain of tag factories and a solar/diesel hybrid power generation system at a manufacturing plant. The Japanese govt will receive 251 of the credits. Japan has JCM partnerships with 17 nations, though several of them have yet to generate any credits.
Mirova monies – Investment manager Mirova on Thursday announced an RFP for carbon credit projects to apply to its Nature+ Accelerator Fund. Mirova, an affiliate of French investment banking company Nataxis Investment Managers, will invest in projects across four categories: territorial conservation and restoration (jurisdictional and nested REDD+, biodiversity, and conservation credits); marine conservation and coastal resilience (blue carbon, marine protected areas); sustainable agriculture (agroforestry, soil carbon); and nature-based innovation (drone technology, smart apps). The RFP is exclusively dedicated to projects applying for the fund’s seed and early venture window, and proposals are due by the end of May.
SCIENCE & TECH
Mapping net zero – New mapping of zero emission pilots and demonstration efforts in shipping reveals Norway and Japan are out in front in terms of the number of projects underway, Splash247 reports. The Getting to Zero Coalition’s latest update on global action to decarbonise shipping includes significantly more projects – up from 106 to 203 – focusing on ship technologies, fuel production, as well as bunkering and infrastructure, with Norway and Japan the most busy. Some of the key findings in this year’s mapping include an increased focus on hydrogen-derived fuels, a higher number of large vessels targeting ammonia and methanol, more bunkering and infrastructure projects, as well as the emergence of fuel production in Oceania. “Electricity-derived fuels, particularly hydrogen and ammonia, are increasingly taking a larger share of the industry’s focus, with 42 of the fuel production projects involving so-called green hydrogen based on electrolysis,” commented Jesse Fahnestock, head of research and analysis at the Global Maritime Forum.
PEI in the face – The Prince Edward Island (PEI) legislature missed an Apr. 1 deadline for an increase to the federal carbon levy, but the resulting increase in gas prices is expected within a few days. MLAs didn’t get to the third-reading stage for the bill to implement the changes by the end of the session Thursday. The Canadian province has said the federal government is allowing PEI some leeway on the carbon tax deadline, given that the provincial change is in the works, so Ottawa will not move to implement any change on its own. The increased CO2 levy would add 4.4 cents to the current 6.63 cents in the province, and with HST thrown in, the pump price would go up 5.1 cents. Meanwhile, PEI Finance Minister Darlene Compton says a spreadsheet error resulted in the province’s official budget book projecting carbon levy revenues this year to be almost C$10 mln too high. Following question period on Wednesday, Compton tabled a document she called a “minor administrative correction” to the province’s budget estimates book. The document was a correction of a page showing the province’s revenue from taxes, licences and permits, originally released in the province’s Feb. 2022 budget. The original book showed forecasted 2021-22 revenue from carbon taxes at C$29 mln, while the corrected page showed the forecasted revenue at $19.4 mln. (CBC, Saltwire)
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News and intelligence on carbon markets, greenhouse gas pricing, and climate policy
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