CP Daily: Wednesday January 3, 2024 ?

Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here[1]

TOP STORY

A carbon standard has had a busy festive season with significant issuances from REDD+ projects in the last week, amounting to about 15% of its total credit issuance so far.

AMERICAS

Over 25 commenters offered input on proposed amendments to the joint California-Quebec cap-and-trade programme following a November public rulemaking workshop, as multiple observers called for an updated price modelling but provided varied recommendations for adjustments to the scheme.

A new US-based livestock carbon insetting marketplace has announced its first sale, with the credits generated and transacted within the sector’s supply chain.

An infrastructure capital provider announced on Wednesday a $5 million investment towards the development and scaling of a new biochar facility expected to begin production as early as the first quarter of 2024.

INTERNATIONAL

The ongoing challenge of rolling out power grids to keep up with the increase in renewable energy capacity is being tackled head on by a provider of artificial intelligence (AI) technology that maps out the underground environment, working with companies worldwide to speed the shift to clean electrification.

China will help Egypt build a gigawatt-scale solar farm as the North African nation works to progress its goal for renewable energy to make up 42% of electricity by 2030 and cut millions of tonnes of CO2, underpinned by private sector investment.

EMEA

European carbon prices clawed back on Wednesday some of the prior session’s 5.5% drop as forecasts pointed to lower temperatures and reduced wind generation in the coming days, while an uptick in activity in timespreads suggested compliance participants are beginning to shift volumes farther along the curve.

Chemical and steel companies expect to relocate their facilities over the coming decades as part of adapting to decarbonisation, a survey conducted last year revealed.

Czech government ministries are at odds over how their carbon market revenue is to be spent, delaying passage of ETS reforms into national law that are likely to trigger a step-up in spending among all EU nations.

VOLUNTARY

A London-based carbon asset manager has signed a memorandum of understanding with the Republic of North Macedonia to develop voluntary carbon market activities in the country, they announced Wednesday.

A research centre in Germany says it has found a new and novel way to trap CO2 via ‘synthetic biology’ that is far more effective than nature-based solutions.

BIODIVERSITY (FREE TO READ)

Chinese researchers have pitched global targets for wetlands conservation that could inform national biodiversity strategies in a bid to address their absence.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

INTERNATIONAL

Australia dethroned – The US has overtaken Australia as the world’s largest exporter of LNG as new projects have come online and others have been brought back online, such as Freeport LNG. Qatar and Australia have been neck and neck for years but as the US has ramped up projects and taken advantage of its massive unconventional oil and gas resources, LNG export concerns have sprung up along the Gulf Coast in Texas and Louisiana. According to Bloomberg,[3] the US shipped 91.2 million tonnes in 2023, more than any nation ever has. Australia’s record stands at around 82 Mtpa, although total installed nameplate capacity is 88 Mtpa. By 2028, the US will be shipping over 130 Mtpa and Qatar, which has two sequential field expansions planned, over 125 Mta. While Australia has another 5 Mtpa of new supply due online by 2026 thanks to Woodside Energy’s Scarborough project, its other projects are delayed or declining and exploration for new resources has been on the wane for some time. Two-thirds of Australia’s LNG exports are concentrated in Western Australia and account for the sparsely populated state’s large rise in emissions in recent years. Part of the success of the US’s rapid build-out, in addition to its vast shale gas supplies, has been its smaller ‘modular’ LNG facilities, which have lower upfront capital costs and can be added to more easily, although Australia’s 2017 trade white paper first flagged the US was a serious threat to its own LNG export supremacy. Separately, this week it was reported US oil exports hit their own historic high. 

EMEA

The only way is down – The amount of UK electricity generated from fossil fuels fell 22% year-on-year in 2023 to the lowest level since 1957, according to Carbon Brief analysis[4]. The 104 TWh generated from fossil fuels in 2023 is the lowest level in 66 years. Electricity from fossil fuels has now fallen by two-thirds (199 TWh) since peaking in 2008. Within that total, coal has dropped by 115 TWh (97%) and gas by 80 TWh (45%), the analysis stated. These declines have been caused by the rapid expansion of renewable energy (up six-fold since 2008, some 113 TWh) and by lower electricity demand (down 21% since 2008, some 83 TWh), Carbon Brief continued. As a result, fossil fuels made up just 33% of UK electricity supplies in 2023 – their lowest-ever share – of which gas was 31%, coal just over 1%, and oil just below 1%.

Coal truth – Similarly, Germany’s lignite power production fell to the lowest level since 1963 last year, while hard coal power production even dropped to the lowest level since 1955, an analysis by research institute Fraunhofer ISE has found. Clean Energy Wire reported[5] that the country’s entire coal-fired power production fell by almost one-third (48 TWh), cutting coal’s share of total net power generation to 26%. Meanwhile, the country sourced nearly 60% of its net power production from renewables, which generated a total of 260 TWh, an increase of 7.2% compared to 2022. Total EU fossil generation fell[6] more than one-fifth in 2023.

Huge hit off Namibia – A Portuguese oil company has reported encouraging results from its initial drilling offshore Namibia. Galp Energia ‘spud’ its well mid-November in the Orange Basin, one of the newest and most prospective oil frontiers in the world. It is targeting an apparent 10 billion barrel prospect. “Drilling and data acquisition campaigns are underway, making any conclusion premature before operations are completed and results assessed”, it said. The area has seen a series of huge discoveries in the past several years, most recently by Shell and TotalEnergies. 

Home improvements – The UK’s wind, solar, and hydro power facilities produced more than enough renewable electricity during 2023 to power all the nation’s 28 mln homes, according to analysis from the ECIU. Offshore and onshore wind turbines, solar farms, and hydro electricity generators are estimated to have produced over 90 TWh of electricity throughout the 2023, while power generation from fossil gas-fired power plants continued to fall, the think tank said, as reports BusinessGreen[7]. While renewables provided enough power to meet the needs of all UK households, this is not yet enough to meet the country’s industrial and commercial electricity requirements, the analysis showed.

ASIA PACIFIC

Mangrove credits in Modi homeland – The forest department of India’s Gujarat plans to develop mangroves to earn carbon credits worth R22.17 bln ($270 mln), an official told Indian media[8] Tuesday. It has signed three memoranda of understanding, but did not disclose with whom. The forest department will also organise a ‘Toward Net-Zero’ event on Jan. 12 as part of the 10th Vibrant Gujarat Global Summit. India’s net zero date is set for 2070, or two decades after most nations’. The Summit runs Jan. 10-12. A core precept of the mangrove project is community involvement, which local media has called a ‘first of its kind’ project for the nation. The forest department of PM Naredra Modi’s home state has also signed agreements for carbon credits via agro-forestry, with the hope of developing sustainable land use practices. It is also exploring carbon sequestration in wetlands and a state ecological agency is conducting initial studies at four pilot sites in Ramsar – Nal Sarovar, Thol, Khijdia and Vadhwana. Another 50 MOUs were signed around tree planting, nature education camps, resource persons, and knowledge sharing around wildlife conservation. 

Coal way up in Vietnam – Vietnam’s coal use for electricity rose by over 40% last year as drought knocked out a large portion of its hydropower capacity, which typically supplies 35% of total power needs. Vietnam News[9] reports that coal’s share of the grid rose from 33.2% to 46.2% in 2023. Gas-fired turbines and oil-fired thermal power accounted for a share of 9.8%. Renewables made up 13%, but have a total installed capacity of 27%. “Renewable energy remains expensive due to earlier incentive policies, which have driven its prices as high as US9.35 cents per FiT1, higher than EVN’s electricity retail prices,” the state-run English language newspaper said. EVN is Electricity Vietnam, the only power supplier in the country. Vietnam has 21GW of renewable capacity, the highest in the ASEAN region. It is unlikely power prices will fall this year. The nation added 3 GW of capacity in 2023, taking total installed electricity capacity to 80 GW.

Climate tech exodus – Australia is being urged to reconsider the possibility of creating a IRA, with local investors, executives and start-up founders warning of a potential exodus of climate tech companies if it fails to follow the US’ example, the Nine Newspapers report[10]. Australia’s climate tech industry has grown 23% in the past year, proving to be the sector most resilient to a decline in tech investments, however local executives are warning that growth is at risk if the Albanese government does not follow the US model. Cicada Innovations CEO Sally-Ann Williams said the IRA and other similar measures by other countries would likely pull Australian entrepreneurs offshore, at a time when the local industry is already struggling with a “brain drain” problem.

Coal swap cuts CO2 – Indonesia’s state power supplier PLN used 1 Mt of biomass over 2023 as a replacement for coal, Reuters[11] reported Wednesday. This apparently resulted in just over 1 Mt of CO2 abatement. It said the company used biomass for ‘co-firing’ at 43 of its power stations and PLN plans to expand this to 52 power stations by next year. Co-firing involves adding biomass to coal boilers. It typically does not result in any loss of efficiency. Biomass consumption rose by 71% over 2022. Coal makes up the majority of Indonesia’s electricity supply but under its Just Energy Transition Plan the fossil fuel’s use will fall and emissions will be capped at 230 Mt per annum in 2030, and fall thereafter. 

AMERICAS

Mobility mobilised – Brazilian President Luiz Lula da Silva signed on Dec. 30 a measure for the creation of a national programme for green mobility and innovation, Quatro Rodas reported[12] Tuesday. The Mover programme created by the Ministry of Development, Industry, Commerce and Services (MDIC) will redefine decarbonisation goals and an emissions measurement system that considers the entire cycle of the energy source used, in a system called “from well to wheel”, which will be required in addition with the current “from tank to wheel”. The move also includes “all types of vehicles capable of reducing environmental damage”, such as buses, trucks, and even very light vehicles like bicycles and motorcycles. From 2027 onwards, the measurement will be even broader, adopting the “cradle to grave” system that will measure the complete carbon footprint of vehicles in Brazil. Electric cars will also go through this system, accounting for the manufacturing process of their batteries. As a way to encourage sustainable practices, the Brazilian government will also provide a system of gradually increasing incentives to companies, totaling about R$19 bln in credits until the end of the programme in 2030. The new programme will also encourage the “neo-industrialization” of Brazil, with incentives for research and the arrival of new industries by providing tax incentives to invest in R&D. Finally, the programme also creates National Fund for Industrial and Technological Development, which will be managed by the Brazilian Development Bank, under the coordination of the MDIC.

New CFO – Canadian carbon capture firm Svante Svante announced[13] Tuesday the hiring of Justine Fisher as the Vancouver-headquartered company’s new CFO. The firm witnessed impressive growth in 2023, achieving unicorn status[14] in January and announcing a series of partnerships with UK CO2 management tech firm Storegga[15], US multinational conglomerate 3M[16], and Australian oil and gas company Pilot Energy[17]. According to the Tuesday press release from Svante, Fisher brings over 20 years of experience in corporate finance, capital raising, balance sheet management, and investor communications in the commodities and industrial sectors. She will be responsible for overseeing the company’s strategic planning, budgeting, forecasting, performance reporting, accounting, treasury, tax, and financial reporting functions, as well as the company people and culture group. Additionally, she will serve as the company’s steward of financial matters with external stakeholders, including capital markets, institutional investors, lenders, regulators, and auditors. Since its founding in 2007, Svante has grown to employ nearly 300 people, the release stated.

Berkeley gas ban – A federal court of appeals for the ninth circuit refused to reconsider its decision to overturn Berkeley, California’s ban on natural gas hookups in new construction, Smart Cities Dive reported[18] on Tuesday. The three-judge panel agreed with plaintiff California Restaurant Association, a non-profit restaurant owners association, that the city overstepped the federal Energy and Policy Conservation Act when it passed the ban in 2019. The City of Berkeley had filed a petition in May for an appeal hearing to the court’s April decision. The petition drew support from the Biden administration, states, and other cities. Berkeley would require to appeal to the US Supreme Court if it wants to continue to appeal the decision.

CO2 for sale – House Bill 2069, put forward in Washington State Legislature on Jan. 2, could see public utility districts (PUDs) wholesale biogenic CO2[19] and other coproducts of processing biogas from landfills, anaerobic digesters, and wastewater treatment facilities. PUDs, which receive free allowances[20] under the state’s cap-and-trade programme as per state mandate to supply 100% clean power by 2045 without ratepayer burden, presently have the ability to sell biodiesel, ethanol, and renewable hydrogen. The bill was prefiled by Representatives Gina Mosbrucker (R) and Beth Doglio (D).

Land settlements – Washington representatives Alex Ramel (D) and Joe Fitzgibbon (D) prefiled last week HB 2039[21], a bill to modify the appeals process for environmental and land use matters. The bill includes a new section to consolidate multiple appeals for the same project in case consolidation would expedite the hearing process and avoid duplication of testimony.

New GHG sources – Pesticides and anesthetics could be subject to regulation[22] due to its high global warming potential in Washington state, according to House Bill 2073, prefiled in state legislature on Jan. 2 by Representatives Vandana Slatter (D) and Joe Fitzgibbon (D). The bill would require the Department of Ecology (ECY) to commission a study to be completed by July 1, 2025 that analyses the evidence supporting the treatment of sulfuryl fluoride (a fumigant pesticide) as a greenhouse gas, as well as assess anesthetic gases with high global warming potential with recommendations for regulation and emissions reductions. ECY would also be required to consult with medical and environmental stakeholders to develop a guidance document that would reduce the emissions of these anesthetic gases, leading to facilities complying with said document after July 1, 2026.

Mexico carbon scoping – Government representatives of the province of Cordoba in Mexico met with members of Mexico2, the carbon market platform of the Mexican Stock Exchange, local outlet Lavoz reported[23] Wednesday. The Secretary of Energy Transition of the Ministry of Infrastructure and Public Services Pablo Gabutti, the Minister of the Environment and Circular Economy Victoria Flores, the Secretary of Livestock Catalina Boetto, and Claudio Puertolas, president of engineering firm EPEC, participated in the meetings. Discussions were held to analyse initiatives and opportunities for local and international climate action but it wasn’t clear when the meetings occurred. Aligning with carbon registry Climate Action Reserve’s California Climate Action Protocol to generate livestock methane capture offsets, opportunities in carbon markets, smart measurement of electricity consumption, and promotion of a circular economy were some of the other topics of the meetings.

Offshore offloaded – Equinor and BP have terminated an Offshore Wind Renewable Energy Certificate (OREC) agreement with the New York State Energy Research and Development Authority (NYSERDA) for the Empire Wind 2 project, reports[24] gCaptain. Empire Wind 2 is planned with potential generative capacity of 1,260 MW and constitutes second phase of the Equinor and BP’s Empire Wind project, which has a combined potential capacity of more than 2 GW. Equinor said the decision to terminate the OREC agreement with NYSERDA reflects changes in the economic circumstances within the industry, citing factors such as inflation, interest rates, and supply chain disruptions. The company said the cancellation provides an opportunity for a project reset by repositioning it to continue development in anticipation of new offtake opportunities. The cancellation comes despite efforts by New York to help revitalise struggling project developers and protect the state’s climate goals. In October, it announced the largest-ever investment in renewable energy[25] by a US state, giving an undisclosed award to three offshore wind projects and allocating $300 mln to advance the nation’s first offshore wind blade and nacelle manufacturing facilities, amongst other investments in renewable energy. Market participants in RGGI, of which New York is part, have expressed concerns about the feasibility[26] of projections of renewable energy in modelling by the programme, including in terms of bringing wind projects to life in the short-term.

VOLUNTARY

Cash for carbon – Kenya-based direct air capture firm has received[27] an undisclosed amount from Renew Capital Angels, which focuses on investment in African startups. Octavia Carbon, which aims to become[28] the first African direct air capture plant to generate credits in 2024, will use the money to expand its operations and advance its technology. Octavia provides carbon removals credits for pre-purchase, leveraging Kenya’s natural geothermal reserves and geology, which is considered well-suited for DAC capacity.

Tokenized investment – New York-based investment firm FG Capital Advisors will launch a Carbon Token in 2025, a blockchain product representative of an investment in the carbon offset market, the firm announced in a press release Wednesday. The token requires a minimum $2.5 mln subscription and funds raised from token sales will finance project concessions, team development, protocol development, token marketing, and compliance. Project investment priorities include battery metal projects in frontier markets and peatlands such as the Congo Basin for carbon offset projects in the voluntary carbon market.

AND FINALLY…

Fossils forced out of Fringe – After decades, Western Australia’s Fringe Festival, the third-largest of its kind in the world, has cut ties with fossil fuel sponsorship. Woodside Energy confirmed Wednesday it fully ended the relationship after losing naming rights over a year ago. There had been widespread protest from activists and performers over its ongoing sponsorship of the event. US oil giant Chevron, which operates two LNG projects in the state, pulled its own decades-long sponsorship of the more mainstream Perth Festival, the oldest arts festival in the state, in 2022. Protests against the Woodside sponsorship had been going on for years and controversy exploded in 2020 when a ‘gag’ clause preventing the weeks-long festival’s performers from criticising sponsors was exposed. This didn’t stop a protest performance by drag queen ‘Ash-Traylia’ that served as the soft launch for a collective climate action by group Clean State to try to stop the company’s LNG expansion plans. The late-night event featured academics, activists and a largely naked, shaven headed gimp on a leash painted entirely pink. Woodside peer Santos ended its Tennis Australia partnership after one year. TA organises the Australian Open. BP lost its sponsorship of the Royal Opera House last year. Woodside sponsorship of the Nippers, an Australian children’s Surf Lifesaving group, has also been attacked. 

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References

  1. ^ Subscribe here (eepurl.com)
  2. ^ click here (carbon-pulse.com)
  3. ^ Bloomberg, (www.bloomberg.com)
  4. ^ according to Carbon Brief analysis (www.carbonbrief.org)
  5. ^ reported (www.cleanenergywire.org)
  6. ^ fell (carbon-pulse.com)
  7. ^ as reports BusinessGreen (www.businessgreen.com)
  8. ^ Indian media (www.latestly.com)
  9. ^ Vietnam News (vietnamnews.vn)
  10. ^ Nine Newspapers report (www.smh.com.au)
  11. ^ Reuters (www.reuters.com)
  12. ^ Quatro Rodas reported (quatrorodas.abril.com.br)
  13. ^ Svante announced (www.svanteinc.com)
  14. ^ achieving unicorn status (carbon-pulse.com)
  15. ^ Storegga (carbon-pulse.com)
  16. ^ conglomerate 3M (carbon-pulse.com)
  17. ^ Pilot Energy (carbon-pulse.com)
  18. ^ Smart Cities Dive reported (www.smartcitiesdive.com)
  19. ^ wholesale biogenic CO2 (www.waclimateleg.info)
  20. ^ receive free allowances (carbon-pulse.com)
  21. ^ prefiled last week HB 2039 (app.leg.wa.gov)
  22. ^ subject to regulation (www.waclimateleg.info)
  23. ^ local outlet Lavoz reported (www.lavoz.com.ar)
  24. ^ reports (gcaptain.com)
  25. ^ the largest-ever investment in renewable energy (carbon-pulse.com)
  26. ^ expressed concerns about the feasibility (carbon-pulse.com)
  27. ^ received (www.renewcapital.com)
  28. ^ aims to become (carbon-pulse.com)
  29. ^ (twitter.com)
  30. ^ Share on LinkedIn (www.linkedin.com)

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