Carbon Pulse

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California Low Carbon Fuel Standard (LCFS) prices tumbled to new four year-lows this week as traders noted credit values were converging with those of Oregon’s Clean Fuels Program (OCFP).

The collapse in European carbon prices over the last two weeks has revived the debate over the impact of speculative traders on the market, as analysts suggest that the record drop in EUAs far outstretches any likely fundamental, long-term impact from the conflict in Ukraine and its knock-on effect on energy prices.

California regulator ARB minted just over 200,000 new compliance offsets this week, with the forestry protocol accounting for much of the new issuance, according to agency data published Wednesday.

US President Joe Biden said on Tuesday that the nation’s ban on Russian oil and gas would cost Americans even as the administration’s plan to protect consumers from price spikes is well underway, while the plan itself appears to diverge on short and long term objectives with respect to climate targets.

The global CO2 price floor set out by the International Monetary Fund (IMF) last year would need to overcome several key obstacles such as scalability and international consensus before implementation, a roundtable heard Wednesday.

The EU's proposed second ETS for buildings and transport along with energy tax reforms may contribute to fighting inequality while lowering emissions, according to a study published on Wednesday that contradicts arguments that the market would place an unbearable cost for the most vulnerable.

The differing approach to the energy transition by US and European oil was highlighted at an energy industry conference this week, with representatives from Chevron, BP, and Repsol outlining how their companies plan to navigate the shift towards a low carbon global economy by 2050.

Carbon prices rallied strongly for a second day as momentum from Tuesday carried over along with incremental buying by options traders, while energy markets backed off amid statements from Russia that indicated it may be moderating its military campaign ambitions in Ukraine.

With three weeks left to enter the first round of Japan’s domestic voluntary carbon market, only a handful of energy companies have signed up, a government update showed Wednesday, as manufacturers dominate the scheme’s early backers.

The price crash in Australia’s offset market will likely force many planned sequestration projects to press the pause button, according to analysts, as some market participants accused the government of favouring industry incumbents.

A daily summary of our news plus bite-sized updates from around the world.

A Finland-based company is launching a blockchain-based trading platform for tokenised offsets derived from regenerative projects certified by Verra, it announced Wednesday.

US biofuel credit (RIN) values crashed beneath $1 on Tuesday as market participants pointed to a plummeting soybean oil-heating oil (BOHO) spread as President Joe Biden announced a ban on Russian oil and gas imports.

The approval of an international emissions trading rulebook under the Paris Agreement's Article 6 last year will provide the framework needed for further growth in more transparent compliance and voluntary carbon markets, according to panellists speaking at an industry conference on Tuesday.

CO2 output from California’s electricity sector dropped year-over-year in January as renewables generation increased and fossil gas waned, though record low snowpack readings portend a dire outlook for the state’s hydro supply this year.

The European Commission aims to use the full flexibility of its state aid powers to help the EU respond to surging energy costs, it said in its Energy Communication published on Tuesday, potentially allowing member states to expand the industries eligible to receive indirect ETS cost compensation.

The quarterly RGGI auction on Wednesday is primed to clear close to a new all-time high for the fifth consecutive sale, though a significance price retracement in recent days has cooled traders’ views that bids will trigger additional volume from the Cost Containment Reserve (CCR).  

Lawmakers quizzed energy experts on Tuesday on how the UK can address energy security and affordability pressures while maintaining climate ambition, shedding light on the challenges for Prime Minister Boris Johnson’s promised energy supply strategy amid the Ukraine crisis.

Global CO2 emissions spiked by 6% year-on-year to hit 36.3 billion tonnes in 2021 and record the highest ever annual total, as coal and gas consumption ramped up to meet rebounding global economic demand from the low levels seen in pandemic-struck 2020, according to an International Energy Agency (IEA) analysis released on Tuesday.