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TOP STORY
ANALYSIS: Cloud of reputational risk continues to hang over voluntary carbon buyers
Negative media coverage continued to dominate discussions during a carbon conference in New York held this week, as stakeholders in the voluntary market reacted to continued reports from a newspaper that has persistently criticised corporate credit use, with fears of reputational risk threatening to further depress buying activity.
VOLUNTARY
INTERVIEW: Credit buyers can receive financial returns as well as offsets when investing in first VCM-designated forestry fund
Companies are being offered the prospect of both meeting their emissions reduction obligations and receiving a financial return by investing in the first company to receive the London Stock Exchange Group (LSEG)’s voluntary carbon market designation, according to the co-founder of the exchange company’s first listed natural capital and forestry fund.
Experienced European sustainability leaders more willing than newbies to pay more for high-integrity carbon credits -survey
Experienced European corporate sustainability leaders would be willing to pay as much as 82% more for high-integrity carbon credits due to an understanding of the benefits they bring over low-quality units, according to a survey published on Thursday by a carbon credit marketplace.
Soil carbon a cheaper alternative to direct air capture, developers argue
Soil carbon projects could prove a cheaper alternative to direct air capture (DAC) technology for CO2 removal buyers, according to developers in the space, who say testing of ground storage is making older sequestration methods more reliable.
Corresponding adjustments will “kill the voluntary market”, carbon standard argues
Any potential mandate for corresponding adjustments in the voluntary carbon market will depress activity in the space, though alterations to host country emissions inventories can still be useful in some instances, a conference heard Thursday.
Nature-based carbon developer closes $11.5 million to help fund Southeast Asian projects
A company founded by two forest carbon veterans has closed $11.5 million in funding from a Singapore-based investor to help develop projects in Southeast Asia.
AMERICAS
Academics once again find California forest offset protocol lacks additionality, ARB sees potential biases
Improved forest management (IFM) projects under California’s compliance offset programme may not reduce emissions as claimed, researchers said Thursday in findings that add to a growing chorus of academic literature, though state regulator ARB pointed to potential biases in the new study.
WCI Markets: CCAs climb down from record high, WCA volatility subsides as traders remain wary
California Carbon Allowance (CCA) prices reached a new record high following the announcement of state regulator ARB’s upcoming cap-and-trade rulemaking workshop, though were unable to sustain this gain, while Washington Carbon Allowances (WCA) moved downward amid continued hesitancy to participate in the market.
California transportation CO2 output trends lower through H1 as gasoline stagnates, diesel drops
California gasoline sales in June nearly equalled year-ago levels as diesel consumption fell, continuing the trend of the state’s cap-and-trade covered transportation sector GHG output trailing historic levels through the first half of 2023, according to state data published Wednesday.
California introduces international initiative to address methane emissions
California on Wednesday announced an international climate initiative targeting methane reduction and mitigation, as seven signatories from six countries participated in the launch event at New York Climate Week.
Latin American company partners with US climate tech firm for carbon project development
A US-based climate tech firm secured additional funds from an e-commerce company to implement nature-based carbon projects in Latin America, the companies announced Thursday.
ASIA PACIFIC
New Zealand imposes per-hectare charge on exotic ETS forests
The New Zealand government has announced it will begin charging an annual fee of NZ$30.25 ($17.90) per hectare on post-1989 forest land in the emissions trading scheme, as well as thrusting a litany of service fees on participants, sparking outrage from forestry groups.
Australia opens consultation on clean hydrogen guarantee of origin
Australia has opened consultation on a guarantee of origin scheme for clean hydrogen, as the nation has ambitious hydrogen plans for both a domestic and export industry, with its roadmap for development closing last month.
Taiwan should bring in carbon levy by year-end, starting at over $15/t -green groups
Taiwan should finalise the rates for a proposed carbon levy scheme by the end of this year with a starting rate of more than $15 per tonne of CO2, as delaying further could make it harder for the island to meet its net zero goals, domestic environmental groups have urged.
Japanese developer teams up with agtech solution provider to create domestic offsets
A Tokyo-based offset project developer is planning to work with a smart agricultural solution provider to expand its credit-generating business in Japan, eyeing rice cultivation projects.
EMEA
Euro Markets: EUAs post sharp gain amid strong auction and gas support as UKAs continue to fall
EU carbon prices posted robust gains on Thursday after a strong auction outcome triggered steady buying and firmer gas prices supported EUAs, while UK Allowances slid to yet another record low as traders fretted about bearish political signals and speculated over whether UKA prices were set to test the auction reserve price.
CBAM to add up to 56% to imported cost of steel from India and China by 2034 -report
The cost of importing steel into the EU from India and China could rise by 49% and 56% respectively when the EU’s carbon border adjustment mechanism is fully implemented by 2034, analysts estimated in a report published on Thursday.
Leading DAC developer eyes Kenya’s Great Rift Valley for scale-up
Kenya’s Great Rift Valley holds strong potential for scaling up direct air capture (DAC) projects thanks to its abundant low-energy sources and geological resources for storing carbon, according to a partnership of project developers eyeing up the region for the development of large-scale DAC projects.
INTERNATIONAL
Swiss entity raises fuel levy to buy an extra $663 million worth of ITMOs
A Swiss foundation is raising the fee it charges fuel distributors to help source a huge amount of international carbon credits required by a change in the nation’s climate law.
Incentives work when it comes to renewable transition, says Norway PM
Incentives work in persuading people to switch to renewables, Norway’s Prime Minister Jonas Gahr Store said Thursday, pointing out that by 2025 there will be no new sales of fossil fuel-powered cars in the country.
AVIATION
ICE to Launch CORSIA carbon credit futures to add to nature-based offering
Exchange ICE on Thursday announced plans to launch a futures contract for CORSIA-eligible carbon credits, as it steps up competition to rival bourse CME.
BIODIVERSITY (FREE TO READ)
UK-France bilateral summit leads to millions invested for nature restoration and climate
A UK state visit to France aiming to cement climate collaboration between the two countries has resulted in a series of nature-based investments from retail companies, investment houses, and not-for-profits.
TNFD launch is tipping point for biodiversity credits, report says
The voluntary biodiversity credits market has reached a “tipping point” following the launch of the final recommendations by Taskforce on Nature-related Financial Disclosures (TNFD), according to a report led by an Australian law firm.
Australian study touts soundscape analysis as low-cost way to measure biodiversity, as nature repair market bill hits political chicanery
An Australian paper has trialled the use of ‘soundscape analysis’ as a low-cost way to indicate farm dam health, with its authors saying it could be an innovative way to track and reward biodiversity change in Australia’s nature repair market.
Current biodiversity metrics do not help the financial sector make the right decisions, say researchers
Available metrics to assess biodiversity may not be fit for purpose and risk embedding negative biases into investor decision-making, according to a new paper that proposed two “forward-looking” approaches for biodiversity-focused investment decisions.
Biodiversity credits could lead to misleading nature-positive claims, report says
Biodiversity credits could lead to organisations making inaccurate nature-positive claims because the lack of standards makes assessing their veracity impossible, a report has found.
Biodiversity Pulse Weekly: Thursday September 21, 2023
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).
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CONFERENCES
Carbon Forward 2023 – Oct. 11-13, London: Join us for Europe’s pre-eminent carbon markets conference, covering the EU and UK ETS as well as international voluntary markets and compliance schemes elsewhere in the world. The event brings together attendees from all related sectors, including traders and intermediaries, big emitters, financiers, project developers, analysts, consultants, NGOs, and government representatives. Topics to be covered include carbon pricing regimes globally, investment opportunities, Article 6 cooperation, CBAM, net zero strategies, and de-risking the voluntary carbon markets. Passes are going fast to secure yours today!
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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
INTERNATIONAL
Mangrove restoration – UAE Minister of Climate Change and Environment Mariam Almheiri endorsed Mangrove Breakthrough and announced a high-level Mangroves Ministerial on COP28’s Nature, Oceans, and Land Use Day to advance discussions to accelerate nature-based solutions. A collaborative effort between the Global Mangrove Alliance (GMA) and the UN Climate Change High-level Champions, the Mangrove Breakthrough aims to restore and protect 15 million ha of mangroves around the world and halt mangrove losses. It also calls for an investment of $4 billion by 2030 to conserve and revitalize mangrove ecosystems. Almheiri noted that the Mangroves Ministerial will focus on accelerating finance, policy, and technology to meet the initiative’s global target. (Zawya)
AMERICAS
Funding Amazon – The Inter-American Development Bank and Brazilian Banco do Brazil signed a letter of intent on Thursday to create a $250 mln line of credit to finance companies and rural producers from the Amazon rainforest. The funds will also finance renewable energy projects and improve access for urban, rural, and forest areas in the Amazon, prioritising isolated locations. Earlier this week, the Brazilian lender signed an MOU with the World Bank on a $400 mln line of credit to help develop sustainable agriculture and the restoration of degraded areas in the Amazon region. (Reuters)
Brazil carbon certificate – The Parana Institute of Technology (Tecpar) launched a programme Thursday to support companies with the verification of carbon and GHG projects and inventories. The scheme, known as the Tepcar Certification, evaluates the methodology used to measure the emission, reduction and removal of a carbon project, and certifies whether it has been applied correctly based on international standards and reference literature. The first certificate was delivered Thursday to the Neocarbon Institute, a Brazilian non-profit that registers carbon projects and payment for environmental services.
Socialising the social cost – US President Joe Biden’s administration is instructing federal agencies to step up its usage of the Social Cost of Greenhouse Gases (SC-GHG), a metric representative of the known damages that greenhouse gas emissions cause across society. In a report published Thursday, the White House outlines for agencies to use SC-GHG in a wider range of decision-making processes, such as environmental reviews conducted under the National Environmental Policy Act (NEPA), agency budgeting, and procurement decisions.
Conversion cash – The US Department of Energy’s (DOE) Office of Fossil Energy and Carbon Management (FECM) announced up to $17.5 million in funding to advance technologies that convert CO2 captured from industrial facilities and power plants into valuable products. Selected projects will focus on two areas: first, advancing research and development to use captured CO2 to produce algae-derived value-added products, where applications must identify a specific end use for the algal product, such as animal or fish feed, biochar, fertiliser, building products, and polymers. The second area focuses on developing projects that advance oxygen-based approaches which lead to reductions in CO2 emissions associated with industrial production processes. The applicants should also address the societal considerations and impacts of their proposed projects, emphasising diversity, equity, inclusion, and accessibility throughout the research and development process.
EMEA
ETS state aid – The EU Commission approved on Thursday a EUR233 mln Austrian scheme to compensate energy-intensive companies for indirect emission costs incurred in 2022, under the EU ETS. The measure will benefit companies active in Austria in sectors considered at risk of carbon leakage, such as aluminium, with the exception of the sector of manufacturing of refined petroleum products. The compensation will be granted to eligible companies through a partial refund of the indirect emission costs incurred in 2022, with the payment to be made in 2023. The maximum aid amount per beneficiary will be equal to 75% of the indirect emission costs incurred. To encourage energy savings, the aid amount is calculated based on electricity consumption efficiency benchmarks. In order to qualify for compensation, eligible beneficiaries have to implement certain energy audit recommendations.
Sharing is caring – The impacts of the pandemic in terms of dissuading people in Germany to use public transport are starting to ease, according to the country’s statistical office data, showing that the number of passengers using inner city public transport in Germany increased by 10% in the first six months of 2023, compared to the same period of 2022. Long-distance routes were also busier, with trains seeing an increase of 16% and buses a rise of 89%. (Clean Energy Wire)
Blooming tech – The European investment fund (EIF) will send EUR40 mln, one of the largest sums EIF has ever spent on a first-time growth-stage fund, into the European climate tech growth fund ‘Blume Equity’, which help companies in the transition to a low-carbon economy and a more sustainable environment. “Thanks to this new agreement, additional investment will be channelled towards high-growth and cutting-edge SMEs engaged in climate and environmental initiatives,” said the EU commissioner for the Economy, Paolo Gentiloni. “This is a great example of how InvestEU helps make Europe greener, more digital and more innovative, thus contributing to sustainable growth and the creation of quality jobs.”
Innovation nexus – Toshiba Corp. will establish a ‘Regenerative Innovation Centre’ in Dusseldorf, Germany, to deliver research on carbon neutrality and the circular economy, it announced Thursday. The digital-led centre will address social issues related to decarbonisation and the circular economy from different angles, including science, engineering, economics, and society. It also aims to form an important nexus for collaboration with well-known universities and research organisations across the EU and the UK. Technical focus areas for the centre will include batteries, renewable energies, CO2 capture and storage, and digital platforms including AI.
ASIA PACIFIC
Green wind – Australian bank Macquarie Group, and project developer Green Wind Renewables, have unveiled plans to build 2.4 GW of onshore wind in Western Australia and connect it to the main grid, the South West Interconnected System, Renew Economy reports. The bank said the projects were in early stages of development, with land agreements secured, and that they would diversify and expand its portfolio of onshore renewables, while also making a solid and timely contribution to WA’s energy transition. The WA government has laid out an ambitious plan to build 50 GW of new energy capacity in just 20 years. The new capacity is needed to supply an anticipated surge in demand for power from electrification, new green industries, critical minerals and renewable hydrogen, and state Labor has allocated A$126 mln ($80 mln) in the coming year to kick-start work on the network needs for these plans.
50 – 50 – French oil company TotalEnergies will invest $300 mln in a joint venture with Indian Adani Green Energy to build renewable capacity in India. The joint venture will have the capacity to generate 1,050 MW of electricity from solar and wind farms. TotalEnergies owns about a 20% stake in Adani Green Energy. According to Adani Green, this deal will help it achieve its target of having 45 GW of renewable energy capacity by 2030 (Reuters).
Priority – Indian central bank, the Reserve Bank of India, is mulling a priority sector lending tag for solar panel manufacturers and will take a decision on the same in the next few months. Zeebusiness reports that the proposal has the backing of the central ministry of finance as the government is keen to make more funds available to boost indigenous production of solar panels and cut imports, providing a push to green energy to fight climate change. The total domestic capacity for manufacturing solar modules is about 20 GW, of which about 13.3 GW has been enlisted in the Approved List of Models and Manufacturers. The capacity for manufacturing solar cells is around 4 GW.
More native hydrogen work in Australia – Australia’s nascent native hydrogen exploration scene is busy lately as private explorer H2EX partner the CSIRO, the national science agency, advises it has observed ‘high-confidence’ hydrogen seeps at its South Australian acreage after soil gas sampling work. The small company has awarded a contract to space company Fleet Space Technologies to deploy its passive sensors on the land. Elsewhere in the same stage, Gold Hydrogen is gearing up to deploy an SLB (formerly Schlumberger) rig to drill one of the nation’s first native hydrogen exploration wells.
Indonesia offers up blocks – Indonesia has offered new exploration blocks to oil and gas companies and the government reaffirmed its support for upstream work to develop more resources and has changed fiscal terms to ones it believes are more attractive. The blocks have been released on the sidelines of the national oil and gas conference, held in Bali.
Forest credit deal – An Inner Mongolia-based subsidiary of China Huaneng Group, one of the country’s largest power companies, has agreed to purchase 120,000 forest carbon credits from Hulunbuir Forestry Group to offset part of its obligations, according to a company statement posted on WeChat. The statement did not specify whether the subsidiary is regulated under the national ETS, but said the deal is valued at around 7.5 mln yuan ($1.03 mln).
New tool – Japan’s SkillUp AI, which runs a human resources development programme for the country’s green transformation, has started using Sustana, a cloud service provided by Sumitomo Mitsui Banking Corporation (SMBC), to help clients calculate and reduce their emissions, it announced Thursday. Sustana has been deployed by corporates doing business with SMBC, one of Japan’s largest lenders, since its release in May 2022.
CCUS hub – BP Berau Ltd. (bp) and PT Kilang Pertamina Internasional (Pertamina) signed an MoU Thursday for studying the potential for gas supply and CO2 injection in Tangguh related to the potential for developing blue ammonia in Bintuni Bay, West Papua. Tangguh is well positioned and has the potential to become the first carbon capture, utilisation, and storage (CCUS) centre in the country for both domestic and international emitters, said Pertamina in a statement. Indonesia is increasingly attracting companies that are seeking opportunities to transport CO2 from their domestic industry to store in the Southeast Asian country. Earlier this month, a GE-backed business alliance was established for the feasibility study of CCUS to establish Indonesia as an industry hub in the region.
VOLUNTARY
Community cookstove credits – Blockchain-based carbon credit provider KlimaDao on Thursday announced a partnership with brokerage SCB Group to launch a new prepaid carbon liquidity pool for community cookstove projects using Solid World’s platform. The new prepaid credit pool launched with 54,000 tonnes of CO2 and over $1 mln in total liquidity. The credits are from a Gold Standard-certified project for the provision and use of improved cookstoves for Rohingya refugees in Bangladesh. Solid World announced its first liquidity pool in May to help boost the sale of forward carbon credits for mangrove restoration projects.
Methane emissions credits – Real-time data and control technology company Loci Controls on Thursday announced the creation of what it says are industry-first carbon credits from methane reduction projects at two municipal solid waste landfill. Using the American Carbon Registry’s methodology, Loci said it uses automated landfill gas control technology and real-time data to increase methane captured at landfills in excess of existing regulations, creating financial incentives to reduce emissions in excess of US EPA regulatory oversight. The projects in New Jersey and North Carolina generated a combined 50,000 tonnes of GHG reductions, and the credits can be used for CORSIA compliance as well as in voluntary markets.
SCIENCE & TECH
Steel sourcing – An advanced membrane technology will be used to capture the CO2 emitted by steelmaking through a partnership between the US DOE’s National Energy Technology Laboratory and US Steel at the latter’s Edgar Thomson plant in Pennsylvania, the companies announced. The project belongs to the DOE’s Point Source Carbon Capture Program, which aims to capture carbon from industrial facilities in order to reduce CO2 emissions to meet US carbon reduction goals. Among the benefits of polymer membranes to separate CO2 are that they require few moving parts and no CO2 regeneration steps, meaning that the technology can be lower cost than some other CO2 separation technologies.
AND FINALLY…
WFH eco-warriors – Working from home can reduce an individual’s carbon emissions by more than half, provided the necessary steps are taken, according to a recently published study. At the height of the COVID-19 pandemic, an estimated 50% of all Americans were working remotely, and still around one-fifth continue to work from home (WFH) around 20% of the time, at least part-time. The study looked at five factors, including commuting, non-commute travel, IT devices, office energy efficiency, and residential energy use to determine how much carbon the average American office employee saves by working from home. The data also used a dataset from Microsoft that offered a window into the daily lifestyle and energy habits of remote workers to draw conclusions about the GHG emissions of remote work compared to being in an office. Some of the results were relatively surprising, such as remote workers often take several short car trips during the day, or use more energy over the course of a workday on dishwashers and air conditioning, for example, so the conclusions are not as black and white as some may expect. Significant GHG reductions often only hold if workers drive an EV, use renewable-powered electricity at home, and turn off unnecessary lights and appliances. Factors such as the energy efficiency of a comparable office building and the availability of public transit also play a role. “It’s not all about how many days you work from home,” says Yanqiu Tao, a sustainability engineer at Cornell and first author of the paper. “It’s about how well you live sustainably.”
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