Renewable energy carbon credits not eligible for CCP
The integrity council for the voluntary carbon market (ICVCM), a non-profit governance body, said carbon credits from renewable energy projects will not be eligible for its core carbon principles (CCPs).
Renewable energy credits issued under eight current carbon methodologies "fail to meet the CCP Assessment Framework requirements on additionality because they are insufficiently rigorous in assessing whether the projects would have gone ahead without the incentive of carbon credit revenues," the ICVCM said.
This move automatically excludes 236mn unretired credits or around a third of the supply within the voluntary carbon market. The ICVCM also rejected a methodology for projects reducing the release of sulphur hexafluoride (SF6), also because of weak additionality components. This refers to the methodology AM0065 under Verra's carbon crediting programme, which currently only covers one project in the US for a total of 2.64mn credits issued, of which just 185,000 are unretired.
ICVCM's decision only covers current renewable energy methodologies and does not exclude the possibility of reviewing more rigorous approaches. "Renewable energy projects financed by carbon credits still have a role to play in the decarbonisation of energy grids... more robust methodologies would unlock finance for a new wave of renewable energy projects in places where they are most needed ," ICVCM chair Annette Nazareth said. This refers to renewable energy projects set up in countries with financial and legislative barriers, probably including most of the UN least developed countries (LDCs).
The ICVCM has also approved a new methodology — Verra's AM0023 — covering methane leaks, mainly in Bangladesh and Uzbekistan, which accounts for 19mn unretired credits, taking the total of unretired credits eligible for CCPs to 27mn or 3.6pc of the supply in the voluntary carbon market.
Assessments of key carbon methodologies such as improved forest management (IFM) or afforestation, reforestation and revegetation (ARR) are now concluded and the council's board is expected to make final decisions "soon", the ICVCM said. Assessments of other popular credits such as reducing emissions from deforestation and forest degradation (REDD+) or clean cookstoves are due within the coming months.
Related news posts
Guyana seeking to market carbon credits to airlines
Guyana seeking to market carbon credits to airlines
Kingston, 5 August (Argus) — Growing oil producer Guyana has started discussions with several airlines for the sale of its carbon credits, saying other efforts to transact its forest carbon are progressing slowly. The heavily forested country in northern South America will use a compliance market in Singapore to trade its certified carbon credits with airlines, vice president Bharrat Jagdeo said. The country faced the prospect of not being able to sell its credits after being proactive in establishing a low carbon development strategy and getting its credits certified, he said. "We have been fighting to get our carbon sold into a compliance market, and there is a Singapore-based market that allows trading in forest carbon for airlines," Jagdeo said. "We have started discussions to see whether we can sell our certified carbon to some of the airlines and hopefully the prices will be good." The government did not identify the potential buyers. Guyana aims to monetize its forests' climate and ecosystem services while promoting low-carbon economic development that is guided by its low carbon development strategy, the government said. Guyana's low-carbon development strategy is aimed at combating climate change globally, it said. "Guyana has set out a vision for monetizing the climate and ecosystem services provided by our standing forest, while accelerating the country's economic development along a low carbon trajectory," it said. Guyana has secured 7.14mn carbon units from Architecture for REDD+ Transaction (ART) for its low deforestation rate along with sustaining high levels of forest coverage. ART is a global initiative that encourages governments to reduce forest degradation and to restore forests. "This achievement made Guyana the first country to be issued carbon credits eligible for use by airline operators in their efforts to reduce carbon emissions," the government said. The credits were issued "in recognition of Guyana's successful efforts to reduce emissions from forest loss and degradation and maintain one of the world's most intact tropical forests," ART said. Heavily forested Guyana has a population of 750,000. It is a carbon sink with forests covering an area the size of England and stor ing 19.5 gigatons of carbo n , the government said. Guyana's deforestation rate is less than 0.05pc, it said. Airlines have been working towards their targets in the 2024-2026 phase of the International Civil Aviation Organization's carbon offsetting and reduction scheme. "There are some new standards required for the aviation sector and in those new standards there will have to be carbon credit offtake," Guyana's president Irfaan Ali said. ART issued 33.47mn TREES credits in December 2022 to Guyana for 2016-2020. The credits are ART's standard for measuring and quantifying greenhouse gas emission reductions. Guyana has had some success in transacting its carbon credits. It negotiated an agreement with Hess Corporation to sell carbon credits for $750mn. It received the first $150mn in 2023. Hess is part of an ExxonMobil-led consortium that started producing crude offshore Guyana in 2019. US major Chevron's planned takeover of Hess will not affect the agreement, Jagdeo said. Norway had earlier committed to providing Guyana up to $250mn for avoided deforestation once certain performance indicators were met. Guyana started negotiating with airlines after failing to get the United Nations Framework Convention on Climate Change (UNfccc) and some non-governmental organizations to add forest carbon to a compliance market, the government said. But it made "no significant" progress" in the discussions, Jagdeo said. "The UNfccc is treating the tropical countries badly," he said. "If we didn't branch out on our own since 2009, and set up our low carbon development strategy that gave us the $250mn deal with Norway, then the $750mn agreement with Hess, we would be left back like some other countries." By Canute James Guyana forest credit payments $ Credit years Payment $/ton 2016-2020 187.5 15 2021-2025 250.0 20 2026-2030 312.5 25 — Guyana Payment by Hess, for approximately 30pc or 37.5mn of Guyana's ART TREES credits Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US-China power rivalry mars super pollutant goal
US-China power rivalry mars super pollutant goal
San Francisco, 5 August (Argus) — The US wants China to play a greater role in mitigating what it says is the other half of global warming — climate super pollutants — and talks are picking up ahead of the Cop 29 UN climate conference later this year. But trade friction is growing, and Beijing has other priorities. The US' chief climate adviser, John Podesta, and deputy special envoy for climate, Rick Duke, will visit China for talks with their Chinese counterpart Liu Zhenmin later this year. This follows discussions in May that focused on curbing methane emissions. The US unveiled a plan on 23 July to reduce the environmental impact of methane, hydrofluorocarbons and nitrous oxide (N2O) — greenhouse gases (GHGs) considered far more potent than CO2 — and Podesta, who is expected to focus on N2O when he next meets Liu, has stressed the importance of engaging China. "The world is looking to us to find ways where we can work together… like in these non-CO2 spaces," Podesta says. Methane is over 80 times more potent than CO2 over the first two decades after its release. N2O is 270 times more potent than CO2 and takes more than 100 years to break down. Almost two-thirds of global adipic acid — an intermediary for nylon 66 and polyurethane — production occurs in China and the US. China accounts for about 94pc of global annual N2O emissions or 134mn t/yr of CO2 equivalent (CO2e) — owing to a lack of abatement — mainly from adipic acid production. The rest of the world accounts for just 8.5mn t/yr of CO2e. China has had the largest increase in N2O emissions between 1980 and 2020, while emissions from Europe have declined and those from the US have remained relatively stable, according to Oceanic and Atmospheric Research. China's energy sector, dominated by coal mining, contributes about 45pc of its total methane emissions, while agriculture accounts for another 40pc share. But Chinese coal mines employ more than 1.5mn workers, and output accounts for half of global production, San Francisco-based Global Energy Monitor estimates. Chinese president Xi Jinping might prefer to keep unemployment low in an economic downturn. China's second-quarter GDP grew by 4.7pc, lower than a 5pc forecast for the year. In agriculture, the state council's action plan aims to boost grain output by 50mn t to nearly 750mn t by 2030, from a record 695mn t last year. The country's first food security law, which requires provinces to incorporate food security into development plans, came into effect in May. Walking the talk Ultimately, Beijing needs to assimilate reliable pollution data to tackle global warming, but it stopped publishing methane emissions data in 2014, and has no credible N2O emissions data, although it hopes to better regulate carbon emissions reporting through a new plan. China also has no firm target for methane or N2O emissions reductions. It released its first methane plan in November but is not part of the Global Methane Pledge and its current nationally determined contributions do not cover non-GHGs. Then there is the familiar US-China rivalry, although Podesta is optimistic. "We are obviously in a period of competition across a range of issues… particularly in the clean energy space but we also need to find ways we can at least understand where each side is going," Podesta says. Whether Donald Trump or Kamala Harris becomes the next US president, China's green industrial policy is likely to provoke more protectionist measures. And its new subsidy-backed stimulus policy to propel electric vehicle (EV) sales could exacerbate this. Xi said he wants the country to focus on boosting consumption growth in the second half of the year and EVs feature strongly in this agenda. China's heat-trapping emissions by gas (2020) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Aemetis optimistic about LCFS update, tax credit
Aemetis optimistic about LCFS update, tax credit
New York, 2 August (Argus) — US biofuels producer Aemetis expects supportive regulatory changes to boost profits, which have struggled recently on lower prices. Chief executive Eric McAfee said Thursday that expected policy changes in the next year will "significantly increase the value of our products," which include ethanol and renewable natural gas. He cited the California Air Resources Board's (CARB) upcoming meeting in November in which regulators will consider updates to the state's low-carbon fuel standard (LCFS), as well as an Inflation Reduction Act federal tax credit for clean fuels kicking off in January and Environmental Protection Agency action to approve higher E15 ethanol blends in more of the country next year. In California, regulators are weighing tougher targets for the LCFS program, where sagging credit prices over the last year could deter investments in decarbonizing transportation. They have floated an initial step down in carbon intensity limits in 2025 of 7pc or more. McAfee predicted that CARB would ultimately determine that a 9pc stepdown "basically is the minimum required, not the maximum, but the minimum required to move major oil companies forward on buying more credits now". He said that in discussions with CARB officials, it was "pretty clear" that the growth in unused credits available for compliance in future years had exceeded expectations. The bank of credits, which do not expire, hit a record high at the end of the first quarter, according to data released this week. The Inflation Reduction Act's 45Z tax credit, which will tie incentives to a fuel's lifecycle greenhouse gas emissions, could also benefit the company's expanding biogas business. McAfee said there is a "wide range" of potential outcomes, since it is unclear how federal regulators will account for fuels with negative carbon intensity. But he expects a worst-case scenario would still be a subsidy of around $7.20/mmBTU. That credit will also be more generous to sustainable aviation fuel (SAF), although it is unclear when Aemetis' planned SAF and renewable diesel production facility in Riverbank, California, will come on line. The company received key air permits from local regulators in the first quarter this year and that it was "discussing the use of innovative pricing structures with our airline customers to accelerate the financing, construction, and operation of the SAF plant", McAfee said. Aemetis has signed offtake agreements with companies such as Delta Air Lines and Alaska Airlines. The company did not immediately respond to a request for comment on its timeline for starting up the plant, which could produce 90mn USG/yr of SAF and renewable diesel. Aemetis this week reported a net loss of $29.2mn in the second quarter this year, up from a net loss of $25.3mn during the same period last year. The company sold more ethanol and renewable natural gas in the US and less biodiesel in India but received lower prices for many of its products. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Oregon CFP credit bank continues to grow
Oregon CFP credit bank continues to grow
Washington, 2 August (Argus) — The surplus of Oregon Clean Fuels Program (CFP) credits grew to a record volume in the first quarter of the year with renewable diesel continuing to increase its share of the state's diesel pool. The pace of credit generation slowed in the quarter but still exceeded deficits by about 105,000 metric tonnes (t), bringing the total volume of credits available for future use to nearly 1.3mn t, according to state data published on Thursday. The growth in the surplus came largely as the result of a continued surge in renewable diesel use in Oregon, with totaled more than 55.6mn USG in the quarter. The fuel accounted for more than 60pc of all new credits in the first quarter with more than 444,000, a more than 10pc increase from the previous quarter and a more than 210pc jump from 1Q 2023. It also represented more than 29pc of the liquid diesel pool. Biodiesel generated about 13pc of new credits or about 92,400t during the quarter, as total use fell by more than 26pc from the previous quarter and about 14pc from a year prior. Deficit generation increased by about 3.6pc from the previous quarter to about 611,000 t as the new year brought with it an increase in the overall carbon intensity target for the program. Gasoline deficits jumped by more than 10pc compared with the fourth quarter of 2023 and 18pc from the first quarter last year. Petroleum diesel deficits also increased by more than 9pc even as consumption declined by more than 7pc from the prior quarter and 17pc from a year ago. LCFS programs require yearly reductions in the carbon intensity of transportation fuels. Fuels that exceed the annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. Oregon requires a 20pc reduction by 2030 and 37pc by 2035. This year's target is 8pc, up from 6.5pc last year. An ongoing rulemaking process this year will consider changes to how the state calculates the carbon intensity of fuels and verifies the activity of participants, but it will not touch the annual targets. Spot Oregon credits have fallen by nearly 60pc since the previous data release in May and about 88pc since late September, when state data offered the first indications that renewable diesel that was already inundating the California market had found its way to the smaller Oregon pool. Argus assessed Oregon credits at $20/t on Thursday. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more