Citing ongoing trade disruption and decreased shipments to the U.S., Chinese module supplier Jinko on Tuesday reported a net loss of $181.7 million for the first quarter of 2025.
The company shipped more than 19 GW of modules, cells and wafers in the first three months of the year, down 27.7% from the previous quarter and 12.7% from the first quarter of 2024. Total revenues of $1.91 billion represented a drop of 33% from the previous quarter and 39.9% from a year earlier.
Low prices and decreased demand driven by international trade policies "pressured profit margins" in all segments of the supply chain over Q1, according to Jinko's Chairman and CEO Xiande Li.
"Due to a year-over-year decline in shipments to the U.S. market and a continued decline in higher-price overseas orders, our module prices and profitability decreased both year-over-year and sequentially," Li said.
In response to the disruption of reciprocal tariffs, Li said Jinko, which has 10 GW of manufacturing capacity across Southeast Asia, has "flexibly adjusted our supply chain strategy and regional shipment mix."
The expansion of Jinko's Florida plant to 2 GW of n-type capacity is now complete, according to the earnings presentation, and the "largest overseas n-type production facility" is steadily progressing in Saudi Arabia. That facility will produce 10 GW each of cells and modules annually when it starts operations in the second half of 2026.
The company is making the overseas market its "strategic priority" for its energy storage business. Battery shipments totaled 300 MWh in the first quarter, a "substantial" increase from this time last year, and Jinko expects to ship around 6 GWh worth by the end of 2025, leveraging its PV customer base to offer integrated solar-and-storage options.
The company anticipates shipping between 20 and 25 GW of modules in the second quarter and between 85 and 100 GW for all of 2025. Jinko shipped a total of 92.9 GW in 2024.
Installations were up 31% in China year-over-year in the first quarter, and the average monthly bids for modules are "returning to a more rational level.", which Li attributed to "market self-regulation and high-quality development initiatives."
Reporting by Colt Shaw, cshaw@opisnet.com
Editing by Jordan Godwin, jgodwin@opisnet.com
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Vietnam will require the trading of emission quotas and carbon credits in its domestic carbon market to be conducted via designated securities firms through the Hanoi Stock Exchange, according to a notice released Tuesday by the Ministry of Natural Resources and Environment.
The requirement, proposed by the Ministry of Finance, is included in a draft decree outlining the organization and operation of the country's carbon trading exchange.
A pilot phase for the carbon market is scheduled to run from June 2025 through the end of 2028, with full-scale operations expected to begin in 2029. However, the June launch is expected to be largely symbolic, due to the absence of an operational national registry, said Mai Duong, carbon analyst at research firm Veyt.
Before credits or quotas can be listed for trading, they must be verified and registered in the national registry by the Ministry of Agriculture and Environment.
Participation in the market will be open to both authorized individuals and organizations for carbon credit trading. However, only facilities subject to compliance obligations will be allowed to trade emission quotas.
Covered entities are unlikely to engage in quota trading until benchmarks are set and allowances are allocated, as their obligations remain undefined, Duong added.
The draft decree also introduces a phased approach to emissions quota allocation. Sectoral management ministries will be responsible for proposing annual emission quotas for facilities under their jurisdiction, with allocations scheduled across three periods: 2025-2026, 2027-2028 and 2029-2030.
In the initial phase, quotas will be distributed to major emitters in thermal power, steel production and cement manufacturing. Approximately 150 facilities are expected to receive allocations, covering around 40% of the country's total greenhouse gas emissions.
In addition, sectoral ministries will be tasked with approving technical guidelines for generating carbon credits, registering and deregistering carbon projects, and issuing carbon credits for eligible projects under their purview.
While the notice did not specify how offsets would be applied toward compliance obligations, an agriculture ministry official recently stated at a carbon event that the ministry is proposing to allow up to 30% offset usage -- three times the original proposal, according to Duong.
Reporting by Lujia Wang, lwang@opisnet.com
Editing by Mei-Hwen Wong, mwong@opisnet.com
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Massachusetts and Maryland -- two of the 10 states that passed California's Advanced Clean Truck Rule -- have delayed enforcement of the stringent emissions targets.
The rule requires manufacturers of on-road medium- and heavy-duty vehicles to produce and sell an increasing percentage of zero-emission vehicles from model years 2025 through 2035.
The Massachusetts Department of Environmental Protection on Tuesday announced a two-year reprieve for truck manufacturers unable to meet the requirements of the Advanced Clean Trucks program. Manufacturers will get a grace period for the 2025 and 2026 model years if they continue to make internal combustion
engine trucks for distributors.
And Maryland Gov. Wes Moore earlier this month signed an executive order suspending enforcement of the ACT program for two years.
MassDEP said that truck manufacturers find the regulation too difficult. Some manufacturers are limiting ICE truck sales to ensure they comply with the sales requirements.
The department also said the Trump administration created "significant uncertainty around ZEV incentives, charging investments, manufacturing and tariffs, each of which threaten a smooth transition to medium- and heavy-duty ZEVs."
The delay gives manufacturers "flexibility" while keeping the state "on track" to achieve emissions reductions, MassDEP said.
The rules in Massachusetts, New Jersey, New York, Oregon and Washington arescheduled to go into effect with MY 2025 vehicles. Vermont's rules will take effect in the 2026 model year and rules in Colorado, Maryland, New Mexico and Rhode Island are set to begin in the 2027 model year.
"Legislation has been introduced in all of the 2025 states to delay implementation of the rule until at least 2027," the RV Industry Association said this month in a legislative update.
A bill was also introduced in the Vermont legislation last week and a proposal in Washington would repeal the ACT Rule in the state.
"While federal law permits states to adopt California's motor vehicle emission standards as an alternative to the federal [Clean Air Act] standards, this remains optional," according to the Washington bill (SB 5091). "Decarbonizing the transportation sector is achievable and an important objective in Washington state but adopting California's standards limits flexibility in meeting Washington's unique needs and economy."
Reporting by Donna Harris, dharris@opisnet.com
Editing by Jeff Barber, jbarber@opisnet.com
© 2025 Oil Price Information Service, LLC. All rights reserved.
California Gov. Gavin Newsom announced Tuesday he along with Senate President pro Tempore Mike McGuire and Assembly Speaker Robert Rivas would work together to extend the state's Cap-and Trade Program this legislative year.
Newsom noted updates on extending the program would be revealed "in the coming weeks."
"California must continue to lead on reducing pollution and ensuring our climate dollars benefit all residents," Newsom said in a news release. "That's why we're doubling down on cap-and-trade: one of our most effective tools to cut emissions and create good-paying jobs. Cap-and-trade is a huge success and, working together, we'll demonstrate real climate leadership that will attract investment and innovation to deliver the technologies of tomorrow, right here in California."
Tuesday's announcement was made a week after President Donald Trump published Executive Order: Protecting American Energy from State Overreach. The order called out states with emissions reduction goals that included California, New York and Vermont.
According to the EO, these state policies increase energy costs for consumers and undermine the principles of federalism by imposing the regulatory preferences of a few states on the entire nation.
The EO directs the Attorney General to identify and take action against any laws that may be unconstitutional or preempted by federal law, particularly those related to climate change or environmental initiatives.
Meanwhile, California Assembly Bill 1207 and Senate Bill 840, both introduced on Feb. 21, aimed to reauthorize extending the program past its current end date of 2030 before being amended.
AB1207 was amended on Mar. 17 to require the California Air Resources Board to "consider the full social cost associated with emitting a metric ton of greenhouse gases, as determined by the United States Environmental Protection Agency in November 2023."
Meanwhile, SB 840 was amended on Mar. 26 to "extend indefinitely the requirement for the Legislative Analyst's Office to annually submit to the Legislature the report on the economic impacts and benefits of those greenhouse gas emissions targets. The bill would require the committee, at a public hearing, to review the annual report by the Legislative Analyst's Office."
The Trump administration sued California in October 2019, alleging its Cap-and-Trade Program -- which has been linked to the Canadian province of Quebec since 2014 -- constituted a treaty and overstepped the federal government's authority. The Biden administration dropped the lawsuit in April 2021.
The California Carbon Allowance V25 December 2025 forward delivery contract traded at $27.25/mt and $28.27/mt on the Intercontinental Exchange by 1 p.m. CT. On Monday, OPIS assessed the CCA V25 December 2025 price at $26.69/mt.
Reporting by Mayra Cruz, mcruz@opisnet.com
Editing by Kylee West, kwest@opisnet.com
© 2025 Oil Price Information Service, LLC. All rights reserved.
California Carbon Allowance secondary market prices stumbled Monday morning, sinking further following President Trump's executive order last week targetingstate-level emissions reduction efforts. Meanwhile, Regional Greenhouse GasInitiative prices were up slightly, and Washington Carbon Allowances weakenedbased on lower offers.
The CCA V25 December 2025 contract traded at $26.53/metric ton and $26.85/mt on the Intercontinental Exchange as of 1:30 p.m. ET Monday. OPIS on Friday assessed the CCA V25 December 2025 price at $26.89/mt, down more than $2/mt on the week.
The ICE CCA V25 April 2025 contract traded at $25.58/mt and $25.85/mt by midday Monday. OPIS on Friday assessed the CCA V25 April 2025 price at $25.90/mt.
OPIS CCA prices Friday were down $2.715/mt for April and $2.735/mt for December compared to a week ago.
North American compliance carbon market prices sank during trade following the executive order, titled "Protecting American Energy from State Overreach." The order specifically called out the emissions cap in California as one that "punishes carbon use by adopting impossible caps on the amount of carbon
businesses may use, all but forcing businesses to pay large sums to 'trade' carbon credits to meet California's radical requirements."
California Air Resources Board Chair Liane Randolph said Wednesday that the state would continue to maintain its authority to curb emissions.
"Since our first climate change scoping plan, we have used a portfolio approach that includes performance standards, incentives and carbon pricing," according to a statement from Randolph. "Emissions have gone down while [the] economy has grown. We are committed to defending our record of success."
OPIS CCA prices Wednesday reached their lowest mark since September 2022, according to OPIS data. The OPIS assessment of $26.225/mt on Wednesday was the weakest for the current year forward delivery since $26.085/mt on Sept. 27, 2022.
The 2025 floor price, or auction reserve price, is set at $25.87/mt. CCA contracts traded below that level on Wednesday following the executive order, before rising later in the day.
Prior to last week, CCA trade prices had not fallen below the auction floor, which often serves as a soft floor to secondary market trade prices as well, since March 2020. Prices most recently dipped below the then-floor of $16.68/mt on March 17, 2020, when they were assessed at $16.58/mt for prompt delivery at
the beginning of the Covid-19 pandemic.
OPIS CCA V25 December 2025 prices had already dropped below $30/mt multiple times this year following mounting uncertainty about the timeline for the state's Cap-and-Trade Program Update process to be completed. The process began in 2022.
Regional Greenhouse Gas Initiative secondary market prices recovered Monday morning following significant losses last week.
The ICE RGGI V25 December 2025 contract traded at $18/short ton and $18.40/st by 1:30 p.m. ET Monday. OPIS assessed the blended RGGI V24/V25 December 2025 price at $17.525/st on Friday.
The ICE RGGI V25 April 2025 contract was bid at $17.40/st and offered at $17.57/st by midday Monday. OPIS assessed the blended RGGI V24/V25 April 2025 price at $16.985/st on Friday.
RGGI prices Friday were down $4.84/st for April and $4.93/st for December compared to a week ago.
Last week's executive order, in addition to singling out California, called out rulemaking for forthcoming cap-and-invest programs in New York and Vermont as "extortion."
In a Tuesday news release, New York Gov. Kathy Hochul said the Trump administration has already taken $325.5 million in federal funding for future state infrastructure and resilience projects and another $56 million for projects that have already started.
While other compliance market prices recovered last Thursday, the RGGI market sank further on a second day following the executive order.
OPIS RGGI prices on Thursday fell below the 2025 cost containment trigger price of $17.03/st for the first time this year, which in the past has served as a soft price ceiling for secondary market RGGI prices, but has been less so as the CCR has been depleted in recent years.
The OPIS RGGI forward delivery price Thursday reached lower than it had since an assessment of $16.35/st on March 14, 2024.
Also last week, Pennsylvania Republican lawmakers introduced a bill April 7 allowing the Department of Environmental Protection to create a measure for General Assembly consideration to limit carbon emissions and repeal regulations regarding the state's participation in RGGI.
Rep. James Stuzzi (R) introduced House Bill 1164, co-sponsored by 25 Republican representatives. The bill would authorize the DEP to have a public comment process on a proposed draft legislation to limit carbon emissions within 180 days and have a minimum of four public hearings.
The bill included a memo dated Dec. 9, 2024, which aimed to repeal RGGI regulations. Pennsylvania officially joined RGGI in 2022, but has been prevented from participating in the quarterly auctions due to legal challenges.
RGGI also announced Tuesday its second quarterly auction will be held June 4. The auction will offer 15.24 million allowances.
The first quarterly auction in March sold out of 15.39 million RGGI allowances at a clearing price of $19.76/st. The 2025 cost containment reserve of 8.13 million allowances was exhausted at the auction.
Washington Carbon Allowance secondary market prices were pointed lower amid softening offers.
The ICE WCA V25 December 2025 contract was bid at $57.11/mt and offered at $57.50/mt by 1:30 p.m. ET Monday. OPIS on Friday assessed the WCA V25 December 2025 price at $58/mt.
The ICE WCA V25 April 2025 contract was bid at $55.50/mt and offered at $55.89/mt by midday Monday. OPIS assessed the WCA V25 March 2025 price at $56.25/mt on Friday.
WCA prices Friday were down $1.78/mt for April and $2/mt for December compared to a week ago, also driven downward by the executive order.
Reporting by Christie Citranglo, ccitranglo@opisnet.com
Editing by Slade Rand, srand@opisnet.com and Kylee West, kwest@opisnet.com
© 2025 Oil Price Information Service, LLC. All rights reserved.
The World Bank's core mission is development and language around the institution's work and investments should align more with that and not climate, according to an internal email seen by OPIS.
"It's all about going back to basics," said the email sent last Friday by Valerie Hickey, global director of the climate change group at the World Bank. "That's the tune that I heard [last] week from three distinct constituencies: Ajay [Banga, the bank's president], the US [Environment Department's] office, and senior representatives from Ministries of Environment, Forests and Finance across the Congo Basin," she said.
"...We need to remember our roots as a development bank. That we are not a climate bank even as the weather is becoming a major constraint to ending poverty," she added.
Communications regarding the World Bank's work "also have to go back to basics", the email said, including altering how staff in the climate change team talk about the Paris Agreement climate goals. Instead of referring to "climate finance", it should talk about "smarter development finance that has
climate co-benefits", according to the email.
The email does not suggest making actual changes to World Bank policy or its climate investments. The proposed changes in communications around climate do not represent changes to the bank's core development mission and will not result in "doing less of what our clients need us to do", the email said.
Recalibrating communication and vocabulary would be a "journey", Hickey said.
"But it's a journey that will get us to where our client countries, our major shareholders and our management want us to be. And be quickly," the email said.
In November, the World Bank said it was committed to increasing its climate finance from 35% of total lending to 45% over its 2025 fiscal year, which runs between July 2024 and June 2025. In the previous fiscal year, the World Bank provided $42.6 billion in climate finance, or 44% of its total financing target for that fiscal year.
At an event at The Economic Club of Washington D.C. in late March, Banga responded to a question about how the World Bank was adapting to the current political climate in the US.
"What I've done over the last few months... is to go to people [on Capitol Hill] and now people in the [federal] administration and tell them what's inside 'climate change'. I understand the words can be not what you want, but let's talk about what's inside it first," Banga said.
Banga added that half of the bank's 45% climate finance goal for fiscal year 2025 is aimed at resiliency or adaptation efforts and the other half is focused on mitigation.
The World Bank declined to comment.
The email is part of a wider trend of institutions and corporates altering language around climate change in the wake of President Donald Trump's election in November. Since then, the US has withdrawn from global institutions like the World Health Organization and from the Paris Agreement, the international treaty signed in 2015 aimed at limiting the rise in global temperature to below 2 degrees Celsius above pre-industrial levels.
Similarly, since President Trump assumed office, government agencies have ordered via official and unofficial guidance that certain terms like "climate crisis" and "climate science" be removed from public-facing websites, according to the New York Times.
In late March, Bloomberg reported that mentions of "sustainability and related terms on earning calls" across S&P 500 companies fell on average by 76% compared to how companies were talking about the environment three years ago.
The World Bank is owned by 189 countries, and the US is the largest single shareholder of the bank's International Finance Corporation (IFC) with a 17.34% share, according to the bank's website. The US is also the only World Bank shareholder that has veto power regarding changes in the structure of the bank.
The World Bank Group was founded in 1944 and is composed of five international organizations: the IFC, the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the Multilateral Investment Guarantee Agency (MIGA) and the International Center for Settlement of Investment Disputes (ICSID).
The bank's main lending arms are the IBRD, which issues loans to middle-income countries, and the IDA, which provides loans and grants to the poorest countries.
Reporting by Humberto J. Rocha, hrocha@opisnet.com
Editing by Anthony Lane, alane@opisnet.com
© 2025 Oil Price Information Service, LLC. All rights reserved.
The Bundestag, the lower house of Germany's parliament, has agreed to enshrine reaching net zero carbon emissions by 2045 in the country's constitution after a two-thirds majority voted in favor of spending reforms that mark a break with its longstanding fiscal conservatism.
The constitutional reform -- approved on Tuesday by 513 of the Bundestag's 733 parliamentarians -- will allow the government to spend hundreds of billions of euros to fund defense, infrastructure and climate efforts.
The country's constitutional 'debt brake' was established in 2009 and limited the federal government's deficit to 0.35% of gross domestic product. Legislators from the center-right Christian Democratic Union (CDU) and the Christian Social Union (CSU) along with the center-left Social Democratic Party and the Greens approved the exemption of defense, infrastructure and climate spending from the rule in Tuesday's session.
As part of the constitutional reforms, €100 billion euros will be allocated towards Germany's Climate and Transformation Fund over the next 12 years to achieve the country's climate targets for 2045. This is part of a wider €500 billion fund designated for infrastructure over the same time period.
The Bundesrat -- a council of German federal states -- is expected to approve the package on Friday, finalizing the legislative process.
Germany originally set out its 2045 goal in its Climate Change Act in 2021, which had the goals of reducing emissions by 65% by 2030 based on 1990 levels and 88% by 2040 before reaching climate neutrality by 2045.
Viviane Raddatz, climate director at conservation campaigner World Wildlife Fund Germany, said that the fund had great potential for boosting climate protection and that enshrining climate neutrality in the country's constitution represented a milestone.
"But one thing is clear: €8 billion per year is far from enough to truly close the financing gap. Last week's [government carbon] emissions data show that we urgently need to invest in the transport and building sectors: Germany needs €30 billion annually here alone -- €18 billion for heat pumps and building renovation, €3.7 billion for heating networks and €12 billion for climate-friendly mobility, including €10 billion for rail," Raddatz said.
Sebastian Manhart, a policy advisor at CarbonFuture, a startup focused on carbon removals technology, said in an online post that the constitutional amendment bucked the trends of countries like the US backtracking on their climate commitments.
"Instead, [Germany] has done the opposite: enshrined [its 2045 commitment] in the most visible and long-lasting way possible," Manhart said.
Melina Maier, an associate at Global Counsel, an advisory firm, said that the 2045 target date "is a spending guideline, not a new binding target." Maier explained that the country's top court has previously ruled that the German constitution mandates a timely transition regardless of a specific deadline and that while the new constitutional amendment does reference 2045, "it does not have immediate legal implication for the approval of infrastructure projects."
The 2045 date can, however, shape future legal debate on climate policies that entities like non-governmental organizations can use, Maier said.
Maier noted that around €8 billion a year will be allocated to the fund focusing on "energy-efficient buildings and low-emission industries", but added that infrastructure and climate funds will not be sufficient to achieve decarbonization in Germany.
"It needs a coherent government strategy to align investments with priorities. The fund's impact -- both domestically and across the EU -- will ultimately hinge on how the next government allocates and prioritizes investments," Maier said.
The changes to the constitution come in the aftermath of German federal elections in late February when the conservative CDU, led by chancellor-in-waiting Friedrich Merz, and its CSU allies came out on top with a combined 28.6% of the vote, followed by the far-right party Alternative for Germany, which gained 20.8% of votes.
Reporting by Humberto J. Rocha, hrocha@opisnet.com
Editing by Anthony Lane, alane@opisnet.com
© 2025 Oil Price Information Service, LLC. All rights reserved.
Corning, Suniva and Heliene have announced a partnership they say will produce the first fully made-in-America solar modules.
Corning will produce wafers in Michigan, sourcing polysilicon from its subsidiary Hemlock Semiconductor. Suniva will treat the wafers in its Georgia plant to make cells, which Heliene will assemble into modules in Minnesota. The resulting panels will have a record 66% domestic content, offering developers a "significant advantage" to clearing percentage thresholds needed to secure the
10% domestic content bonus to the Inflation Reduction Act's Investment Tax Credit (ITC).
Corning has not released the timeline or annual capacity for its wafer facility. The company in October announced that it would be expanding Hemlock's polysilicon production, and developing ingot-and-wafer manufacturing in the state.
That followed shortly after news that ingot and wafer producers would be eligible for a 25% Advanced Manufacturing Investment Credit established in 2022's CHIPS and Science Act, and that Hemlock had locked up roughly $325 million in federal funding to expand its polysilicon production.
South Korea's Qcells had billed itself as the first firm to develop a soup-to-nuts U.S. supply chain, a claim that crumbled when REC Silicon in December announced it was ceasing production at its Moses Lake polysilicon plant in Washington. Qcells will now supply its forthcoming ingot-wafer-cell-module facility in Georgia with OCI polysilicon made in Malaysia.
After filing for bankruptcy in 2017, Suniva re-asserted itself with the help of the IRA, starting U.S. cell production at its 1 GW Georgia factory again in September. It is now one of just two cell producers operational in the country after ES Foundry fired up production lines in South Carolina in January. Suniva had previously established a supply partnership with Heliene, which produces 800 MW of modules annually and will add 1 GW of additional capacity in 2025.
Reporting by Colt Shaw, cshaw@opisnet.com
Editing by Jordan Godwin, jgodwin@opisnet.com
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Global commodities trader Trafigura has emerged as the highest bidder in Singapore's first public tender for Article 6-aligned nature-based carbon credits, offering S$299.19 million ($223 million) for an undisclosed volume, as the city-state seeks to complement domestic climate action with international offsets.
The government's request for proposals closed on Feb. 14 and attracted 17 bidders, including major commodities traders and energy firms. "Trafigura has offered to supply high-integrity carbon credits from our global portfolio of nature-based removals," a spokesperson from the commodities firm said on Wednesday, in response to queries on proposal details.
Other major bids to supply correspondingly adjusted nature-based credits through 2031 include Mercuria Asia Resources' S$206.65 million for 5.36 million metric tons at S$38.52/mt, with an alternate offer of S$35.41/mt, with detailed pricing depending on the delivery year and project. Singapore-based DNZ ClimateTech proposed S$200 million for 5 million mt, averaging S$40/mt.
Singapore aims to cut emissions to 60 million mtCO2e by 2030, using international credits to help meet its climate targets. The country expects to use 2.51 million mt of internationally transferred mitigation outcomes annually from 2021 to 2030, which must comply with Article 6 rules to prevent double counting in emissions reductions. Price signals from early Article 6-aligned deals suggest a clear premium compared to credits traded in the voluntary markets. Switzerland's Klik Foundation, which manages the country's decarbonization efforts, paid an average price of CHF 27/mt ($30/mt) for its Article 6-aligned credits in 2023, as reported by OPIS.
Carbon Credit Prices Across Voluntary and Compliance Markets
Source: Average bid price data available*, OPIS APAC Carbon Report,
Global Carbon Offsets Report (Feb. 20, 2025)
Disclosed average per-unit bid prices, excluding outliers, ranged from S$25 to S$55/mt, higher than offsets eligible under the CORSIA aviation offsetting scheme, which OPIS last assessed at $18.25/mt. This range also surpasses prices in regional compliance markets such as Australia, New Zealand and South Korea ($6.70 to $35.90/mt). In the voluntary market, OPIS priced 2025 REDD+ credits at $12.13/mt and blue carbon credits at $28.24/mt.
Each bid could include a portfolio of projects with pricing quoted in Singapore dollars per mtCO2e for each annual delivery tranche, according to tender documents seen. Singapore has signed legally binding agreements with Ghana and Papua New Guinea for such transfers and has substantially concluded talks with Bhutan, Paraguay and Vietnam.
Carbon Solutions Services submitted the highest disclosed per-unit price at S$55/mt for 500,000 mt, offering credits from Ghana and Paraguay backed by Temasek's GenZero platform. Malaysia’s Carbon Trace submitted the lowest disclosed price of S$25/mt for 1 million mt.
Other bids include U.S. firm Native, a public benefit corporation, which bid S$190.99 million for 5.4 million mt, with tiered pricing from S$26.41 to S$44.07 per mt over five years. Energy major Shell Eastern Trading submitted a S$34.04 million bid pending management approval, while PetroChina International (Singapore) offered S$21.84 million for 500,000 mt, with prices escalating from S$38.88 to S$49.88/mt for 2027-2029 delivery.
Some bidders structured pricing around Singapore's carbon tax, which allows liable companies to offset up to 5% of emissions with international credits from 2024. Climate Asset Facility offered S$73.15 million for 1.75 million mt, proposing a 50% discount to the projected tax rate, starting at S$22.50/mt in 2027 and rising to S$40/mt by 2031, plus a S$13.50/mt fee for corresponding adjustments.
The tender called for credits from approved methodologies, including forest management, grassland sustainability and wetland restoration under Verra, ART-TREES and Gold Standard. The National Climate Change Secretariat said the total procurement volume will be decided after proposal assessments. Partial offers are expected to be considered unless bidders specify otherwise.
Singapore is positioning itself as a carbon trading hub, with the sector projected to create up to $5.6 billion in economic value. Successful bidders must provide a 5% security deposit and could face penalties of up to S$80/mt if they fail to deliver credits. Bids remain valid for 180 days.
Reporting by Melissa Goh, mgoh@opisnet.com
Editing by Mei-Hwen Wong, mwong@opisnet.com
© 2025 Oil Price Information Service, LLC. All rights reserved.
Apple misled consumers and engaged in greenwashing when it promoted its 2023 watch lineup as carbon neutral, plaintiffs alleged in a class-action suit filed in US District Court Wednesday.
The California tech company described its 2023 watches as "its first-ever carbon neutral products" in a September news release that year. Apple had reduced value chain emissions for the watches by over 75%, it said. "The company will use high-quality carbon credits to address the small amount of remaining emissions, resulting in a carbon neutral product footprint," Apple said at the time.
The seven plaintiffs named in the lawsuit, filed in the US District Court for the Northern District of California this week, allege that Apple's carbon neutral claims were "false and misleading" because the projects from which Apple retired carbon credits to account for the products' remaining emissions "fail to provide genuine, additional carbon reductions," the complaint reads.
The plaintiffs "suffered economic injury because Apple's false 'carbon neutral' claims deprived them of the ability to make informed purchasing decisions in the smartwatch market," according to the complaint.
They are, therefore, seeking damages related to purchasing the watches on false pretenses, Fletch Trammell, one of the attorneys bringing the case, told OPIS.
"We have to prove, when we get in front of a jury, that there is a definition of what carbon neutrality means," Trammell said. "Apple claimed that it met that definition using certain components that actually quantified the amount of carbon offset. We can demonstrate that those carbon offsets are completely bogus. There was no carbon neutrality, which makes that claim untrue."
According to the complaint, Apple retired credits from the Chyulu Hills REDD+ project in Kenya and the Guinan ARR Project in China to address the remaining emissions from its 2023 watch lineup.
REDD+ stands for reducing emissions from deforestation and forest degradation, while ARR stands for afforestation, reforestation and revegetation.
Citing satellite imagery, plaintiffs allege that the majority of Chyulu Hill's protected forest carbon stocks lie within the Chyulu Hills National Park, which has been protected land since 1983. They also argue that 78% of Guinan was "already covered by trees" before the project's crediting period began.
As such, "the two primary projects from which Apple purchases its carbon credits ... fail to provide genuine carbon reductions," according to the lawsuit.
In its 2024 Environmental Progress Report, the latest available, Apple said it retired 230,000 vintage 2018 credits from Chyulu Hills and 255,000 V19-V21 credits from Guinan "toward our corporate emissions footprint for 2023" but did not specify if any of the credits were specifically designated for its watch products' carbon neutrality.
The company was named as the beneficiary of over 1.5 million credits retired since 2021 from six different projects, Verra records show. The company was not designated as the retiree of any credits on the Gold Standard, ACR or Climate Action Reserve registries.
Apple did not respond to a request for comment.
Nine other false and misleading advertising cases have been brought against companies in the US in the past, including Delta Airlines, its partner KLM Royal Dutch Airlines, JBS USA Food Co., Etsy, Danone Waters of America, Eversource Energy, Tyson Foods and Northwest Natural Gas Co., according to the Global Climate Change Litigation Database.
These lawsuits have significantly dampened demand for carbon credits, sources have told OPIS. But their plaintiffs have yet to establish a successful track record in court.
KLM had two greenwashing cases dismissed. In one, the plaintiff's attorney was found to have knowingly brought his client's claims on false pretenses and was sanctioned by the US District Court of the Southern District of New York.
The cases against JBS and Danone were dismissed, but both judges allowed the plaintiffs to bring amended complaints. The case against Etsy was voluntarily dismissed by the plaintiffs. The cases against Delta, Eversource and Northwest Natural Gas are still in progress.
At the same time, the practice of advertising products as carbon neutral has received significant criticism.
The European Union decided to ban carbon neutral claims on products following negotiations that concluded just over a week after Apple's Watch announcement in September 2023. The bloc's Empowering Consumers for the Green Transition Directive will take effect in 2026.
"There is no such thing as 'carbon neutral' ... cheese, plastic bottles, flights or bank accounts," European Consumer Organization Deputy Director General Ursula Pachl said in a statement at the time.
Besides sourcing credits from the voluntary market, Apple has dedicated significant investments to developing carbon projects.
The Cupertino, Calif.-headquartered corporation announced a $200 million initiative to fund forest removal projects in partnership with Goldman Sachs and Conservation International - one of the developers of Chyulu Hills - in 2021. The company aimed to use the fund to remove at least 1 million metric tons of carbon per year.
Apple expanded the effort in 2023 with an additional $200 million commitment and a goal of removing an additional 1 million mt of emissions that has been overseen by Climate Asset Management. Apple suppliers TSMC and Murata Manufacturing joined the Restore Fund with contributions of $50 million and $30 million, respectively, in 2024.
Apple maintains a broader corporate goal of reducing value chain emissions by 75% by 2030 and achieving carbon neutrality by offsetting the remainder with carbon credits.
Reporting by Henry Kronk, hkronk@opisnet.com
Editing by Jeremy Rakes, jrakes@opisnet.com
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Paraguayan President Santiago Peña signed a law on Tuesday that will bring all carbon projects in the country under one registry and manage their interplay between voluntary and Paris Agreement markets.
Law No. 7190/23 "On Carbon Credits" was passed by the Paraguayan legislature in 2023, and following its signing by Peña, will take effect within 180 days, according to its text.
All projects operating in Paraguay will need to record their activity with a national registry that will be established by the country's Ministry of Environment and Sustainable Development (MADES), according to the law. The registry will also oversee the country's participation in the Paris Agreement and prevent the double-counting of credits for voluntary retirements and nationally determined contributions of the UN climate accord.
The law "will allow the country to advance in bilateral negotiations with Singapore, the United Arab Emirates (UAE), Switzerland, Taiwan and Finland, negotiations that are already underway," MADES said in a Tuesday news release.
Projects that sell their credits to the voluntary market will need to contribute between 3% and 10% of issuances to Paraguay to advance its own NDC.
Violations of the law could incur penalties of temporary or permanent disqualification from the Paraguayan national registry and fines, according to the text.
The law stipulates that carbon projects operating in Paraguay will have one year to register with the new system.
"This is a great opportunity, since the voluntary market is currently paying between $3 and $15 per ton of sequestered carbon, and the regulated market between $40 and $70," Minister of Industry and Commerce Javier Giménez said in the news release. "Given the type of carbon sequestration projects that Paraguay offers in its forestry sector, this could become an export market of between $300 and $500 million per year."
The prices Giménez quoted roughly matched OPIS price assessments for nature-based reduction projects. OPIS on Tuesday assessed its REDD+ V20 Tier 3 range at 50cts/metric ton to $13/mt and its REDD+ V22 Tier 3 range at $5.50/mt to $15.50/mt. But nature-based removal credits from afforestation,
reforestation and revegetation projects trade at a premium and can command forward prices of $50/mt or higher, as OPIS has previously reported.
REDD+ stands for reducing emissions from deforestation and forest degradation.
Paraguay's carbon credit law could draw a significant volume of nature-based credits from the voluntary market into the Paris Agreement system. Three REDD+ and seven ARR projects in the country are currently registered with Verra, registry records show. Three more REDD+, three more ARR and two agricultural land management projects are in Verra's development pipeline. Together, these have estimated annual issuances of over 8.9 million credits.
Two ARR projects registered with Gold Standard are also underway.
"Paraguay is a country with strategic resources and immense potential. With this regulation, we ensure that these resources translate into real opportunities for Paraguayans, in employment, investment and sustainable growth," Peña said in the MADES news release.
MADES did not immediately respond to a request for comment.
Reporting by Henry Kronk, hkronk@opisnet.com
Editing by Jeremy Rakes, jrakes@opisnet.com
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The stage is set for Malaysia’s solar demand growth to pick up pace following the introduction of new government policies last year aimed at broadening access to renewable energy, said Khirul Nizam, Strategic Partnerships and Business Development Lead at Malaysian state utility Tenaga Nasional Berhad (TNB)’s New Energy Division, which oversees TNB’s overseas and domestic renewable energy portfolio.
Recent solar headlines on Malaysia have focused on the impact of U.S. tariffs on Malaysia’s export- oriented solar manufacturing sector but domestically, the government is charting its own course towards a solar-dominated net-zero future.
“In any country with a regulated electricity model, the pace of energy transition will always depend on the regulations. And the growth of renewable energy in Malaysia has been driven by positive policies from the government,” said Nizam, who was TNB Renewables’ chief operating officer before a two-year overseas stint in Turkey.
Malaysia’s energy regulator, the Energy Commission, issued guidelines last September for the Corporate Renewable Energy Supply Scheme (CRESS), a new initiative that marks a radical departure from how companies can access green electricity in the country.
Current government solar schemes such as the utility-scale Large-Scale Solar (LSS) designate TNB as the single offtaker. TNB, which owns the National Grid in Peninsular Malaysia, then sells the green electricity produced to consumers.
Under CRESS however, consumers can contract directly with solar developers instead of only buying renewable energy from state utilities. Project developers previously had to wait for government tenders to be issued to bid for solar projects, but they now can negotiate at their own pace with companies looking for renewable energy capacity.
“You can describe LSS as relatively low risk, low return because you are dealing with state utilities. CRESS in comparison is more high risk and high return because it is purely willing buyer and willing seller. The faster you can get customers, the faster you can grow your projects,” said Nizam.
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At least two green electricity supply agreements have already been signed under CRESS since its implementation last September. Renewable energy developer UEM Lestra announced in January that it secured CRESS offtakers for its 1GW hybrid solar power plant in Johor with a target to meet commercial operations by end of 2027. TNB announced last November that it was supplying Bridge Data Centres with 400 MW of green electricity under CRESS.
Prices of these CRESS agreements were not disclosed. But bids into earlier LSS tenders have fallen below RM0.15/kwh ($0.034/kWh) amid declining module prices.
Riding on the wave of burgeoning investments in AI around the world, data centers are set to become a key driver for corporate green electricity demand, Nizam said.
As of end-September 2023, TNB completed six data center projects with around 292 MW of electricity supply and signed 2 GW of electricity supply agreements (ESAs) with eight data center projects. By September 2024, the numbers had surged to 1.7 GW of 17 completed data projects, 1.9 GW for eight projects still under construction and another 1.1 GW for six projects for which ESAs have been signed.
TNB now expects the potential electricity demand from data centers to exceed 5 GW by 2035, itself an upgrade from its 2023 projections of 4.3 GW.
“Data centers right now are looking into renewables because they are concerned about ESG (environmental, social and governance) goals,” Nizam said.
Even as it rolls out stimulus policies for green energy, Malaysia’s solar growth can appear modest compared to the breakneck speed at which some of its neighbors are expanding the sector. Solar capacity in Vietnam, for example, skyrocketed by over 400% from 2019 to 2021 after having added 11 GW in 2020 alone.
But by sitting out on the high-speed chase for expansion, Malaysia has also avoided the logjams and project failures that have at least temporarily derailed some of the growth markets.
“Malaysia is very stable in terms of regulatory policies because we are doing things for the long-term,” Nizam said, noting that grid capacity and project sustainability are key considerations.
Whether at stable or breakneck speed, energy transition is capital-intensive. Malaysian Prime Minister Anwar Ibrahim called publicly in January 2024 for government-linked governments to reduce their overseas investments in favor of domestic ones, providing yet another fillip to the country’s renewable energy sector.
TNB itself has a renewable energy project pipeline of up to 10 GW from 2024 to 2030, the bulk of which are solar or hydro-solar hybrid projects. On project count alone, most of these upcoming projects are in Malaysia rather than overseas, where TNB has built up a significant presence over the years.
Even so, there are questions over whether Malaysia’s domestic boom can sustain a domestic supply manufacturing chain on its own, Nizam said. Malaysia has around 10 GW of module manufacturing capacity, the bulk of which is absorbed by overseas markets.
“To build your own supply chain, you have to make sure your market is big enough, and that you can compete with the lowest cost supplier for the long-term,” Nizam said.
With the lowest cost module suppliers in China embroiled in a downward spiral of cut-throat price competition, questions have been raised over the health and direction of the solar industry, both for manufacturers and project developers.
Nizam, with his years of experience in international and domestic solar markets, remains unfazed. “The solar market has always experienced boom and bust cycles. The industry as whole will get through it like before,” he said.
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The leaders of the European People's Party (EPP), the party with the most representatives in the European Union Parliament—the EU's legislative body—with 188 out of a total 720 seats, said the carbon border tariff that importers are expected to start paying next year "should be put on hold for at least two years."
Following the EPP's leaders' retreat in Berlin over the weekend under EPP President Manfred Weber, the party published a three-page brief criticizing regulatory burdens and obligations for companies in Europe that are stymying economic growth and investment.
"We advocate cutting back bureaucracy and regulation substantially... we need to go further and be even more bold because excessive regulation and bureaucracy has today become a key reason for the EU's productivity falling further behind the US and China," the party wrote.
The centre right party—of which EU Commission President Ursula von der Leyen is a member—said a two-year pause should also look at reviewing the scope of the carbon border adjustment mechanism (CBAM) and other laws.
This would be to "limit the scope of these laws to the largest companies with more than 1,000 employees, eliminate the direct effect to [small and medium-sized enterprises], align legislative overlaps ... and significantly reduce the reporting obligations for large companies by at least 50%", the EPP leaders wrote.
The CBAM went into effect in October 2023, requiring EU importers to file quarterly and eventually annual reports detailing the embedded emissions in their products.
The CBAM will initially apply to six sectors—steel, cement, iron, fertilizers, hydrogen and electricity—but the EU could announce an increase to that scope this year in order to include more sectors by 2030.
EU importers are scheduled to start paying for these embedded emissions based on the weekly average auction price of EU carbon allowances (EUAs) starting in 2026 as the CBAM cost is phased in gradually until fully implemented in 2034.
"The CBAM has to be scrutinized as well regarding its effects on red tape and the competitiveness of the different sectors of our economy," the EPP said. The EPP said the two-year pause should also apply to the implementation of corporate sustainability regulation such as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence
Directive (CSDDD).
An EPP representative told OPIS on Tuesday that the two year pause on the CBAM and other legislation is now part of the party's official stance according to the party leaders following their weekend retreat.
"[The] EPP Group's position on CBAM is unchanged. The EPP Group supports CBAM but the implementation and paperwork has proven to be too burdensome, including the paperwork to prove the carbon content. Therefore, we need time to fix it," the representative said.
'Certainty' Needed for Businesses and Trump Trade War Looms
Gabriel Rozenberg, chief executive officer of CBAMBOO, a software company aimed at CBAM compliance, told OPIS on Tuesday that European businesses deserve certainty, especially as there has been a ramping up phase for the CBAM since late 2023.
Policymakers should be careful when pushing for simplifications that do not undermine the credibility of the future tax requirement, Rozenberg said, otherwise companies "could get whipsawed" by a major new charge they failed to anticipate.
"There is obvious room for improvement and simplification in the way that the CBAM operates on companies. At the same time, businesses right now have less than a year to prepare for the introduction of a major new tax," Rozenberg said.
Faten Aggad, executive director of the African Future Policies Hub, wrote in a social media post Monday evening that the EPP could potentially block the ongoing legislative review as the CBAM transitions towards full entry next year.
"That process is ongoing and the [EU] Commission is expected to submit a legislative proposal to the [EU] Parliament detailing proposals on scope expansion, measures for developing countries, etc.," Aggad wrote. "That legislative proposal risks being blocked by the EPP and their allies (from right to center). This would make it a majority opposition."
Aggad noted that with President Donald Trump now in power in the United States, the EU might want to avoid a trade war, especially if the American president decides to place a steel tariff on EU goods.
"A new Trump tariff would be felt more strongly this time around... a postponement may be the least worst option considering circumstances," Aggad said.
In his first day in office, Trump signed an executive order pulling the US out of the Paris climate agreement, to which nearly 200 countries signed back in 2015 to keep global warming levels below 2 degrees Celsius above pre-industrial levels. Trump also pulled out of the agreement in 2017 in his first term and former President Joe Biden re-inserted the US into the pact in early 2021.
Earmarking Larger EU ETS Revenues for Hard-to-Abate Industry
The EU Emissions Trading System (EU ETS) or carbon scheme is also in the EPP's crosshairs.
The EPP leaders wrote that a "larger share of ETS revenues should be earmarked to energy intensive industries, for example for supporting green hydrogen or carbon capture and storage solutions."
Energy intensive industries include the cement, steel, iron sectors among others that are the highest carbon emitters in the EU ETS. While these industries receive free EUAs on an annual basis depending on their current activity levels, the EPP appears to be calling for additional funds from EU ETS
revenues to be allocated towards these industries.
The EU ETS is a market-based mechanism that charges polluters a variable carbon price with the incentive to decarbonize in order to buy less EUAs.
As of Monday, OPIS assessed the benchmark December 2025 EUAs futures contract at €79.50/mt ($82.29), its highest level in months.
"The EU has decided on ambitious climate targets and policies to achieve them. When implementing them, we must make sure that they do not lead to deindustrialization. If climate policy becomes an obstacle for competitiveness and growth, it will not only fail to have the support of European citizens, but it will also risk increasing global emissions because products will be produced in other regions of the world with higher emissions," the EPP leaders wrote.
Reporting by Humberto J. Rocha, hrocha@opisnet.com
Editing by Yazdi Merchant, ymerchant@opisnet.com
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Singapore's first public tender for carbon credits, seeking at least 0.5 million metric tons (mt) of credits from high-quality nature-based projects, positions the city-state as an early mover in government-led Article 6 transactions under the Paris Agreement, potentially setting a benchmark for the nascent global market, sources said.
The Request for Proposal (RFP), issued by the Prime Minister's Office in September 2024, is intended to count towards Singapore's Nationally Determined Contribution (NDC) target to reduce emissions to around 60 million metric tons of CO2 equivalent (mtCO2e) by 2030, after peaking earlier.
Official projections have estimated Singapore will require 2.51 million mtCO2e annually in Internationally Transferred Mitigation Outcomes (ITMOs) from 2021 to 2030 to make up for residual emissions reductions required to meet its NDC target. It has sought bilateral collaboration on ITMOs with partners via Article 6.2 of the Paris Agreement, underpinned by legally binding bilateral Implementation Agreements, which require corresponding adjustments for credits transferred to Singapore to avoid double counting.
The contract will span an expected period of five years, requiring delivery of correspondingly adjusted nature-based credits generated between 2021 and 2030. Final delivery of all credits must be completed by Feb. 15, 2031, according to tender documents seen by OPIS. Initially scheduled to close in November, the submission deadline was extended twice, first to Jan. 17 and now to Feb. 14.
Each proposal must deliver a minimum of 0.5 million mt of credits, though the total procurement volume will be determined after receiving and assessing proposals, a spokesperson from the National Climate Change Secretariat (NCCS) said.
Successful bidders will be subject to a 5% security deposit based on the contract value and must source alternative eligible credits in case of shortfalls. Potential penalties will be tied to Singapore's prevailing carbon tax, which is set to rise from S$25 ($18.30) per mt now to S$45 in 2026 and as much as S$80 by 2030.
"The security deposit and liquidated damages are safeguards against non and/or late delivery of carbon credits," the NCCS said.
Market participants noted that these requirements, combined with the risks in securing host-country authorizations under Article 6, could deter smaller players - limiting participation to firms with robust financial backing and host-country relationships.
"The tender could carry more risk for sellers than what has been seen in some early private-sector deals and negotiations, which supply correspondingly adjusted credits contingent on host-country authorization," a trader said.
One project developer described the penalties as severe, particularly given the potential financial burden if credits are not delivered. "A penalty towards the upper end of Singapore's potential carbon tax hike to S$80/mt by 2030 if failing to deliver or source alternative credits would be devastating," the developer said. "It's far beyond what developers can expect to sell credits for."
Credits for the tender must meet Singapore's Environmental Integrity Criteria, be verified under approved methodologies, and align with government-to-government agreements. Accepted methodologies include Verra standards for forest management (VM0012), sustainable grasslands (VM0032), peatland rewetting (VM0036), Verra's jurisdictional REDD+ programs, and ART-TREES REDD+ (Version 2.0). Bidders may also propose alternative methodologies for consideration, such as those recognized by the International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation or the Integrity Council for the Voluntary Carbon Market's Core Carbon Principles, following tender documents.
Proposals can include a portfolio of up to 10 projects and must specify eligible host countries with bilateral agreements or MOUs with Singapore. While Singapore is in various stages of negotiation with a range of partner countries, legally binding implementation agreements have been finalized only with Ghana and Papua New Guinea, to date. For countries without agreements, bidders must secure confirmation from the host government of its willingness to negotiate. "Clarity on its implementation agreements and processes will be critical for bidders," a second trader added.
Pricing will be based on Singapore dollars per mtCO2e for each annual delivery tranche, following the tender.
Carbon credits in the voluntary market vary significantly based on methodology, vintage and volume. OPIS last assessed nature-based REDD+ Vintage 2021 Credits at $8/mt, Blue Carbon V21 Credits at $25.71/mt, and Afforestation/Reforestation V21 Credits at $17.23/mt on Jan. 16.
Price signals from early Article 6-aligned deals suggest a clear premium compared to credits traded in the voluntary markets. Switzerland's Klik Foundation, which manages the country's decarbonization efforts, paid an average price of CHF 27/mt ($29.62/mt) for its Article 6.2-aligned credits in 2023, as OPIS reported.
Singapore's first tender highlights its ambition to position itself as a hub for carbon markets while setting standards for nature-based solutions (NBS), a segment under scrutiny in recent years, sources indicated.
"We are encouraged by early market activity, such as Singapore's RFP, as it signals progress in advancing Article 6," said Bjorn Fonden, International Policy Advisor at IETA, adding that Article 6 is fully ready for implementation following COP29.
"Supply remains constrained, largely due to the complexities of establishing national frameworks and aligning ITMO exports with NDC priorities in host countries. We believe that these early demand signals from buyers can help boost market confidence and enable the unlocking of high-integrity supply," Fonden added.
Globally, 97 bilateral agreements between 59 countries have been signed under Article 6.2, with 141 pilot projects recorded to date, most under Japan's Joint Crediting Mechanism, according to the UN Environment Program. Only five projects, including Thailand's Bangkok E-Bus Program and Ghana's Transformative Cookstove Activity, have received authorization so far, underscoring the nascent stage of Article 6 implementation.
$1 = S$1.367
$1 = CHF 0.910
Reporting by Melissa Goh, mgoh@opisnet.com
Editing by Mei-Hwen Wong, mwong@opisnet.com
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More regulatory clarity is needed to tap into Indonesia's carbon market potential following a moratorium on international trading that has stalled the market's growth for years, participants at the Carbon Digital Conference 2024 held Dec. 9-11 in Jakarta, Indonesia, said.
Discussions at the event focused on aligning domestic standards with international frameworks and addressing barriers and opportunities to enable the market's progress.
Vice Minister of Environment Diaz Hendropriyono emphasized the key task of improving the national carbon registry (SRN-PPI) in this effort, described as the backbone of Indonesia's market infrastructure.
"It has to be user-friendly, cost-effective, and fast," Diaz said on Dec. 11, stressing the need to reduce credit registration delays and cut transaction costs. Carbon projects in Indonesia must be registered in the SRN-PPI to be formally acknowledged and claimed for crediting.
Plans are underway to streamline project pre-feasibility stages and expand the number of validation and verification bodies (VVBs). "We currently have around five to six VVBs, and we are working to accredit nine more soon," Diaz added. "The more VVBs we have, the more competition, which will hopefully lower prices and reduce bottlenecks."
Indonesia has long been a key supplier to global carbon markets, particularly through nature-based solutions such as the Katingan Peatland Restoration and Rimba Raya REDD+ projects. A white paper released by PwC and the Indonesia Carbon Trade Association (IDCTA) last week projected that the country could generate 1.28 billion carbon credits by 2030, translating to $6.8 billion to $15.2 billion in corresponding adjustment revenue and $0.6 billion to $1.5 billion from non-corresponding adjustments.
While Indonesia is open to collaboration under Article 6 of the Paris Agreement, it will prioritize domestic climate goals. "Carbon trading must support the achievement of our NDCs," Diaz said. The country has already signed bilateral agreements with players, including Japan, under the Joint Crediting Mechanism. However, certainty around corresponding adjustments remains essential to instill confidence among international participants.
Stakeholders noted Indonesia's potential to meet global demand for carbon credits, including under Article 6 and the CORSIA aviation offsetting scheme. "There is interest from countries like Singapore and Japan in sourcing Article 6-compliant credits globally to fulfill their NDCs," said Fam Wee Wei, Singapore's Director of Carbon Mitigation and International Trade at the Trade and Industry Ministry, as well as from companies seeking credits to manage tax liabilities or for voluntary use.
Participants also underscored the need for mutual recognition between the SRN registry and international standards such as Verra and Gold Standard. They said this alignment is essential to facilitating the flow of high-integrity credits and restarting international trade.
"There are too many standards and methodologies," said Dr. Riza Suarga, chairman of the IDCTA. "Tapping on existing methodologies can provide more assurance to secure investments as well." Suarga noted that waiting for regulatory frameworks to solidify was a legitimate strategy for market participants.
Land title disputes were flagged as another critical risk to address. "Investors need assurance that land titles and ownership structures are clearly delineated," said Fam Wee Wei. Without clarity, participants noted, such issuescould deter much-needed investment in the forestry sector, a cornerstone of Indonesia's carbon credit pipeline. Still, Fam highlighted existing investor protection clauses within regional free trade agreements that provide a measure of assurance for Singaporean investors.
Despite these challenges, optimism remains. Indonesia's new administration, which took office in October, and has signaled a commitment to restoring confidence in the country's carbon market ecosystem.
The country is already preparing a growing pipeline of projects for registration, signaling significant supply potential. Developers noted that several forestry and mangrove projects are close to being credit-ready and awaiting regulatory clarity to proceed.
As of June, more than 260 projects were registered under the national registry, with energy (172) and forestry (45) projects dominating the list. According to the PwC-IDCTA white paper, an additional 75 projects, including 33 energy and eight forestry initiatives, have been verified.
"We have shortlisted and are ready to invest in several carbon projects in Indonesia, but regulatory certainty needs to come first before we do that," one attendee said, adding that robust regulations aligned with international standards and registries will be key to supporting meaningful progress in Indonesia's carbon markets.
The CDC2024 was organized by the IDCTA in partnership with IETA, JETRO and PwC.
Reporting by Melissa Goh, mgoh@opisnet.com
Editing by Hanwei Wu, hwu@opisnet.com
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Opportunities abound in Southeast Asia's nascent solar market but quality still trumps quantity when it comes to project development, according to Peak Energy's CEO, Gavin Adda, undoubtedly drawing from his decades-long experience of navigating solar markets around the world.
Adda might have long left the archaeology field that he majored in during college but his illustrious career in the solar industry is no less Indiana Jones-esque.
He left Samsung in 2013 as the managing director of its utility-sale renewable business in the U.S. following a six-year stint, moved to Singapore where he engineered the sale of REC to ChemChina, helped found renewable energy developer CleanTech Solar, then took over as CEO of French oil majorTotalEnergies' utility-scale and distributed generation business in Asia.
Developing and nurturing nascent markets was his trade, a forte that took him from one pioneering deal to the next across Asia, the Middle East and Africa.
Now Adda finds himself building yet another business - regional solar developer Peak Energy, which is backed by $70 billion investment fund Stonepeak, one of the world's largest infrastructure funds.
"A lot of the value (in solar projects) comes from early-stage development but there are not many players out there focused on that stage - in Asia generally and in Southeast Asia especially. I wanted to bring more funding in at that stage," Adda said of his move to Peak Energy a year ago.
Peak Energy inherited from Stonepeak a solar investment portfolio of less than 30 MW in Japan and 99 MW in South Korea. Over the past year, Peak Energy has added an under-construction 291 MWh battery energy storage system in South Australia, around 300 MW of projects in Korea and 100 MW in Taiwan. Another 600-700 MW of projects is under development, the bulk of it in Southeast Asia.
"If you look at where global renewables growth is coming - a lot of the future growth is coming from Southeast Asia. That is where the opportunity is," Adda said.
On paper, the argument might seem obvious. Southeast Asia is expected to account for 25% of global energy demand growth between now and 2035, second only to India, according to the International Energy Agency (IEA) last month. The region however currently receives only 2% of global clean energy fundingdespite representing 6% of the global gross domestic product (GDP) and 5% of global energy demand.
But to actually navigate the region's labyrinth of solar policies requires as much guile and finesse as finding the lost Ark, and this is where Adda's globetrotting experience comes in handy.
"What's interesting for me is when I look at Southeast Asia or Asia generally, I can draw parallels between them and what happened in various states across the U.S. - 15- 20 years ago. Arizona and California are particularly good examples of the wide range of reactions you might see. This history gives us aframework and sense of what could happen next and the problems we can expect to see," Adda said.
Countries across Southeast Asia have announced a slew of policy changes over the past year aimed at driving renewable energy growth. Malaysia, Thailand and Vietnam now allow, each to a different degree, renewable energy developers to sell electricity directly to consumers. Indonesia halved in August the minimum local content requirement for solar power plants to 20%.
Adda highlighted a key driver behind this liberalization trend in Southeast Asia that mirrors the decoupling dynamics seen in the PV manufacturing space.
"The big driver behind all this is that large industrials and corporates are moving out of China and into Southeast Asia. They have carbon targets. If it is difficult to get renewable energy in one country, they will just move to another one," Adda said.
The crash in solar module prices might seem like another apparent boost to solar developers -- the China Module Marker, OPIS's benchmark for solar modules loading from China, has plunged by over 66% to $0.087/wp as of Nov. 12.
Thanks partly to this price crash, solar is indeed already outperforming grid parity for behind-the-meter (BTM) projects, Adda said. Indonesia charges electricity tariffs of around $0.07 per kWh for businesses, which is among the lowest in Asia. Solar can do lower at $0.05 to $0.06 per kWh, Adda pointed out.
But like all high-growth markets, renewable energy project development in Asia space has been attracting a deluge of new entrants. The Department of Energy in the Philippines, for example, has awarded around 510 solar projects to at least 274 different entities so far as of August 2024. It announced in October that it could terminate over 50 of these projects for not complying with agreed timelines.
"We're always going to see irrational players come into the market, maybe with not a lot of experience in power or renewables and doing deals at unsustainable prices," Adda said.
In the absence of a liquid spot electricity market, which is the case in most of Asia, solar power is typically sold via government feed-in tariffs schemes, negotiated power purchase agreements (PPAs) or auctions. Given the long lifespan and capital-intensive nature of solar projects, competing on price alone is a risk for both the developer and the off-taker.
The shortcomings of such an approach will be laid bare as funding slows, Adda pointed out.
This is already happening. Globally, fundraising by infrastructure funds tallied around $98 bn in 2023, sharply lower than the $173 bn raised in 2022, with 2024 appearing to lag 2023, according to data provider Preqin in May.
Developers that rushed into project development using equity have to turn to debt financing as funding dries up. But some would be stuck because badly built projects and badly structured contracts are unlikely to attract lenders, Adda said.
"It is really difficult to generalize across the region but I think generally you are seeing a pause and you are seeing a lot of developers tap out," he added.
Unsurprisingly, Adda notes that this "debt chasm" phenomenon is a replay of what had happened in the U.S. 15 years ago.
Not that it fazes him. "The key has always been to steer your ship without getting too distracted by everybody else," Adda said.
"If they want to be irrational, then let them go ahead. We will pick up their portfolios after they are gone. There's no magic here - it's infrastructure."
Reporting by Hanwei Wu, hwu@opisnet.com
Editing by Lujia Wang, lwang@opisnet.com
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Washington Carbon Allowance (WCA) secondary market prices spiked $10/mt Wednesday morning following state voters' decision Tuesday night to maintain the Cap-and-Invest Program.
Ballot measure Initiative 2117 failed with 61.69% or 1.57 million votes "no" and 38.31% or 973,000 votes "yes,” according to preliminary state results published Tuesday. The measure sought to repeal parts of Washington's Climate Commitment Act (CCA) including the Cap-and-Invest Program.
The program will continue to operate as scheduled.
On Wednesday morning, V24 WCAs for December 2024 delivery reached a year-to-date high of $61.75/mt. Trades done at that level on the Intercontinental Exchange were followed by trades at $58/mt and $59/mt, as of 1 p.m. ET. OPIS on Tuesday assessed WCA V24 December 2024 at $50.85/mt.
WCA prices began a steep descent in mid-January when the initiative was validated by the Secretary of State. On that day, Jan. 16, WCA V24 December 2024 was assessed at $50/mt. On March 15, the assessment reached a record low of $29.50/mt.
Meanwhile, On March 6, the WCA auction settlement plummeted in the first quarterly event to $25.76/mt, close to the 2024 auction reserve price of $24.02/mt.
Leading up to the election, the price recovered ground on positive sentiment for the longevity of the program.
OPIS Carbon Policy Analyst Kate Haerizadeh said Tuesday that the vote reinforced Washington's position as a climate leader and "could catalyze similar action across the nation; therefore, making Washington an important voice in the broader climate policy landscape."
Other states may use "Washington's Cap-and-Invest framework as a benchmark for achievable climate policy," she said.
The fourth-quarterly auction on Dec. 4 will offer 10.2 million WCAs. The state Department of Ecology is scheduled to release auction results on Dec. 11.
In opposition of the Cap-and-Invest Program, State Representative Jim Walsh (R) filed Initiative 2117 in November 2023. That campaign was further funded by Let's Go Washington Republican donor Brian Heywood.
Future Linkage in Focus
In September, California and Québec and Washington lawmakers said a deal to link the state's emissions trading programs could be finalized as early as Spring 2025.
California and Québec linked Cap-and-Trade Programs in 2014.
"This linkage would expand Washington's carbon market, allowing for increased trading opportunities and stabilizing allowance prices," Haerizadeh said. "A link would amplify Washington's climate leadership by aligning it with other regions committed to ambitious climate action, creating a more unified cap-and-trade system across the U.S. West Coast."
Reporting by Slade Rand, srand@opisnet.com
Editing by Bridget Hunsucker, bhunsucker@opisnet.com
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Biofuels producer DG Fuels plans to turn corn stover and wood waste into 193 million gal/year of sustainable aviation fuel at a facility in Minnesota by 2030, the Washington, D.C.-based company said last week.
DGF's plan represents "the most significant commitment towards commercial scale SAF production in [Minnesota]," according to a Monday news release from Greater MSP, a public-private partnership that supports economic growth in Minneapolis-St. Paul.
Greater MSP also leads the effort to build the Minnesota SAF Hub, a self-reliant SAF supply chain in the region.
DGF said it will cost about $5 billion to build the plant, which will be in Moorhead, about 230 miles northwest of Minneapolis-St. Paul, on the state's border with North Dakota. Greater MSP said the plant's projected output represents almost half of the fuel used at Minneapolis-St. Paul International Airport, where "current demand for SAF . . . outstrips supply."
The Minnesota SAF Hub's so-called anchor members include Georgia-based Delta Air Lines, St. Paul-based water treatment technology company Ecolab, Minneapolis-based electric utility and natural gas delivery company Xcel Energy, North Carolina-based Bank of America and New York-based consulting firm McKinsey and Company.
The coalition aims to attract SAF producers to the region with its "abundant and diverse feedstocks, clean electricity, mature rail networks and strong state support," Greater MSP said.
In early September, Kansas-based fuel producer Flint Hills Resources said it would partner with Delta to develop a 30-million-gal/year SAF blending facility in Rosemount, Minn., which will send fuel to MSP International, where Delta operates its second largest hub. That project is scheduled for completion by
the end of 2025.
Later that month, Delta flew a commercial jet from MSP International to New York using SAF made from the winter oilseed crop camelina. Indianapolis-based refiner Calumet refined the feedstock at its Montana Renewables plant.
Reporting by Aaron Alford, aalford@opisnet.com
Editing by Jordan Godwin, jgodwin@opisnet.com
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Washington voters on Tuesday will decide the fate of the state's cap-and-Invest program ahead of what would be the program's second anniversary in January.
The program has been marked by allowance price volatility and rulemaking updates as the state's Department of Ecology continues to make tweaks to balance its potential impact on retail fuel prices and its role in helping the state achieve its goals under the Climate Commitment Act.
Kate Haerizadeh, an OPIS policy analyst, said the program, should it survive the referendum to end it, will depend on effective market adjustments and linkage discussions.
"The Washington program's future could hinge not only on the ballot initiative outcome but also on the state's ongoing rule adjustments to ensure market stability. As the program matures and moves forward, balancing price containment measures with demand driven auction outcomes will be key," she said.
Allowance Prices
After the start of the program's first compliance period in January 2023, OPIS assessed prices for the program's primary compliance instrument, Washington Carbon Allowances, at about $45/metric ton based on secondary market activity.
OPIS assessed the WCA V23 December 2023 price at $43/mt through the first few weeks of the program's life based on limited trade information for the contract on the Nodal exchange. The first WCA auction occurred on Feb. 28 and signaled robust demand.
The first quarterly auction held in Q1 2023 settled at $48.50/mt and sold out of 6.2 million WCAs, according to Ecology. During a conference shortly after, the department's climate commitment act implementation manager Luke Martland told attendees the auction generated "dramatically more" revenue than the state Legislature had projected.
Prices continued to rise and auction settlement prices jumped to $56.01/mt in Q2 and $63.03/mt in Q3. Both settlement prices breached the auctions' Allowance Price Containment Reserve Tier 1 price, triggering supplemental allowance auctions that are built into the program to temper rapid increases in compliance costs.
Amid the surge in demand, OPIS WCA price assessments, which reflect daily trades on the secondary market, hit an all-time high of $70.50/mt for the OPIS WCA current vintage forward contract on April 14, 2023.
Each of the APCR allowance auctions sold out, and Ecology implemented several emergency rulemaking to inflate supply and relieve upward pressure on WCA prices.
The first APCR sold out of 1.05 million allowances, and regulators in September 2023 enacted emergency rulemaking to allocate 5 million APCR allowances at the second reserve auction scheduled for November 2023.
The initial APCR pool in 2023 was 3.16 million WCAs, or 5% of the total annual budget of 63.3 million. Ahead of the APCR auctions in 2023, Ecology enacted emergency rulemaking that clarified allowance holding limits, increased APCR auction volumes and specified that allowances acquired through APCR auctions must be deposited into an entity's compliance account.
The second APCR auction offered nearly five times the amount of WCAs available in the first APCR auction, and only offered allowances priced at the Tier 1 price as opposed to two batches of allowances priced at both the Tier 1 and 2"Based on the auction results thus far, we determined that frontloading the supply of allowances for the November APCR auction would increase market stability by putting downward pressure on businesses' compliance costs," Ecology said in its September emergency rulemaking update.
The agency in December said it would allocate another 1 million reserve allowances for 2024 under a new APCR schedule. Ecology said it adjusted the APCR schedule to offer a potential 7 million APCR allowances in 2024. It said all allowances offered at APCR auctions during the first compliance period, which runs through 2026, would be at the $51.90/mt Tier 1 price, as opposed to
being split between the Tier 1 and $66.68/mt Tier 2 prices. The Tier 1 price increases annually by 5% plus inflation.
These steps appeared to stem further jumps in allowance prices, as the Q4 2023 cap-and-invest auction in December sold out, but the price settled just one cent below the APCR trigger threshold.
Initiative 2117
The rapid increase in allowance prices earlier in 2023 led to a ballot initiative to repeal the state's Climate Commitment Act, which would effectively end the Cap-and-Invest program.
Signatures for Initiative 2117 were collected late last year and the state in January said the measure would appear on voters' ballots in November. Washington voters will decide the emissions trading program's future in Tuesday's general election.
WCA secondary market prices fell in the first quarter after the state said the future of the program would be decided by voters.
In addition, the program had recently been saturated with uniformly priced reserve allowances that could not be traded on the secondary market.
The uncertain future of the program led to bearish prices this year. OPIS assessed the WCA V24 December 2024 price at an all-time low $29.50/mt on March 15. Throughout the year, a strong supply of credits and weaker auction demand
pushed quarterly auction settlements to close to the 2024 floor price of $24.02/mt.
OPIS on Tuesday assessed the WCA V24 December 2024 price at $47/mt.
Voter support for the ballot question has fallen in the second half of the year, according to polling data released in July, September and October.
Voter surveys in mid-October showed declining support for program repeal among likely voters. According to SurveyUSA poll results published on Oct. 20 by the Seattle Times, 48% of respondents said they would vote against the initiative and 30% said they would vote to repeal the program. Twenty-two percent of those responding said they were undecided.
The poll of 703 likely voters was conducted Oct. 9-14 and sponsored by the newspaper, Seattle television station KING 5 and the University of Washington's Center for an Informed Public.
A similar SurveyUSA poll conducted in July showed 34% of likely voters said they would vote against repeal and 48% said they would vote to end the program. The remaining 18% described themselves as uncertain.
A separate poll of 403 registered state voters, conducted from Sept. 3-6, showed support for repeal had weakened to 30% from 41% in May, according to nonpartisan media group Cascade PBS/Elway.
The referendum "would prohibit state agencies from imposing any type of carbon tax credit trading, and repeal legislation establishing a cap-and-invest program to reduce greenhouse gas emissions. This measure would decrease funding for investments in transportation, clean air, renewable energy, conservation, and emissions-reduction."
A "yes" vote would repeal the law that established the program and would prohibit the state from enacting similar emissions cap-and-trade markets.
The September poll showed 46% of respondents would vote against repeal, up from 31% in May, and 24% of respondents were "undecided," down from 28% in May. Washington's secretary of state in October released arguments for and against the referendum.
Supporters of a repeal argue the program is an "expensive, unfair and wasteful CO2 tax." Program opponents said the "CO2 tax added nearly 40cts per gallon at the pump, making Washington's fuel some of the most expensive in the nation."Supporters of the program argued that the referendum was "purposely misleading" and "a threat to [Washington's] air, land and water." They also
said the initiative would "cut one-third of funding for [Washington's] already stretched transportation plan."
Washington's retail unleaded fuel prices have fluctuated in recent years. The average price for regular gasoline in the state was $3.573/gal in 2021, or 54.6cts above the U.S. average, according to OPIS retail fuel price data. That premium climbed to 74cts in 2022, when gasoline prices in the state averaged $4.722/gal.
In 2023, the year the cap-and-invest program took effect, the average retail price for gasoline in the state was $4.593/gal, $1.052 above the national average.
From January through October, the state's average premium to the national price was 87.53cts/gal.
Linkage Discussions
Despite the possibility of repeal, Ecology has been focused on the program's future that could include a linkage with California and Quebec's cap-and-trade program under the Western Climate Initiative.
California, Québec and Washington in March said they were exploring a linkage of their carbon markets. This was the acknowledgement that the three jurisdictions were working to link after Washington said it intended to pursue such an arrangement in November 2023. California and Québec linked their markets in 2014.
Ecology regulators said linkage could add price stability and support program longevity.
"Our analysis shows that if a linkage were to occur by 2027, Washington (and WCI) allowance price would trade at the APCR tier 1 level. However, without a linkage Washington allowance would be trading at the price ceiling level by 2027," Ecology said when it announced plans to pursue combining its program with the others.
A linked program would hold joint auctions of allowances that could be used for compliance in California, Washington and Québec and would be tradable across jurisdictions. The linked market would have a uniform allowance price.
In April, Washington Gov. Jay Inslee signed a bill (S.B. 6058) that would facilitate linking the state's carbon emissions market with the California and Québec program.
Legislative changes to the program include adjusted compliance periods, increased allowance purchase limits and new rules on offset use, among other language submitted by Ecology in the fall of 2023.
The three jurisdictions in late September said they were making progress toward an agreement, adding that a deal to join the programs could be finalized as early as next spring.
"We believe linkage will strengthen our respective efforts to fight climate change and reduce air pollution, while also encouraging more governments to adopt scalable, market-based climate policies in the future," the three jurisdictions said.
An OPIS analysis found that a move to link Washington's program with California and Québec's could bring regional price stability and enable allowance trading across borders, therefore establishing a broader and multi-jurisdictional carbon market.
"This integration does, however, require a consistent regulatory framework to prevent destabilizing market shocks going forward."
Amid the linkage discussions, WCA and CCA secondary market prices alternated between a discount and a premium to one another during the past year.
OPIS WCA assessment prices fell below CCA prices in January before briefly surpassing OPIS CCA prices in July and again in early September.
CCA and WCA prices in late September averaged near the same level, before WCAs strengthened in secondary market trade this past month. Thus far in October 2024, the OPIS WCA V24 December 2024 price has averaged $45.862/mt while the matching CCA price averaged $37.330/mt.
"The fluctuating relationship between WCA and CCA prices underscores the market's sensitivity to local regulatory changes, trading volumes, and also the unique compliance dynamics in Washington state," Haerizadeh said.
OPIS assessed the WCA V24 December 2024 price at $47/mt on Tuesday, and the CCA V24 December 2024 price at $37.015/mt.
What's Next
Ecology has said it will continue to operate the program until it receives direction based on the results of Tuesday's vote. If a repeal vote succeeds, the initiative would take effect on Dec. 5 and would effectively cancel the results of the fourth-quarter allowance auction scheduled for Dec. 4.
"Unless I-2117 passes and takes effect, Ecology will continue implementing the Climate Commitment Act and the Cap-and-Invest Program as it currently stands, including holding all scheduled auctions and enforcing all compliance deadlines," the agency said in July.
If the program is ended by voters, Ecology said it would no longer have authority provided under the repealed provisions. The referendum would not affect statutes governing Ecology's Greenhouse Gas Reporting Program, and the department would continue implementing that program.
The agency last week provided an update on entities' access to the Compliance Instrument Tracking System Service platform should the initiative pass.
Ecology said it would take at least three months to withdraw from the CITSS if the program is repealed and expects that the platform would remain accessible over that period.
Ultimately, the program's first two years were highlighted by stronger-than-expected initial allowance demand, frequent regulatory responses to adjust supply level and a public response to a perceived increase in fuel prices.
"Washington's Cap-and-Invest program is at a pivotal moment as it is balancing climate goals with the challenges of market stability and affordability," Haerizadeh said. "The outcome of the upcoming vote will both determine the program's future and could even influence whether or not other states consider integrating carbon markets as a viable tool for emissions reduction."
Reporting by Slade Rand, srand@opisnet.com
Editing by Kylee West, kwest@opisnet.com and Jeff Barber jbarber@opisnet.com
© 2024 Oil Price Information Service, LLC. All rights reserved.
Montana Renewables (MRL) and Delta Air Lines have introduced the use of sustainable aviation fuel (SAF) in Michigan as a 7,000+-gal shipment of SAF has been transported to the Detroit Metropolitan Airport (DTW), the companies said in a Thursday release.
"Supplying the SAF [to the Detroit Metropolitan Airport] marks another significant milestone in the decarbonization of air travel," said MRL Chief Executive Bruce Fleming.
MRL refined and blended Minnesota and North Dakota-grown winter camelina into SAF after receiving the feedstock from Cargill. MRL subsequently sold the SAF directly to Delta Air Lines, and the airline fuel then arrived to DTW via pipeline from Dearborn, Michigan's Buckeye Pipeline facility.
"We are especially pleased to pioneer camelina oil as a non-food renewable that provides additional cash crop potential for farmers," Fleming said.
MRL -- an unrestricted subsidiary of Calumet and renewable fuels company headquartered in Great Falls, Montana -- is currently the largest SAF producer in North America, the company said. SAF can reduce lifecycle carbon emissions of jet fuel by more than 80% compared to conventional jet fuel, according to the International Air Transport Association.
In September, the Minneapolis-St. Paul International Airport also received its first 7,000-gallon shipment of camelina-feedstock SAF to be used for Delta Air Lines' commercial flights.
Reporting by Maura Hossler, mhossler@opisnet.com
Editing by Jordan Godwin, jgodwin@opisnet.com
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India's government has approved a list of ten sectors to participate in its voluntary carbon market under the Carbon Credit Trading Scheme (CCTS), including energy, agriculture and forestry, according to a notice from the Bureau of Energy Efficiency (BEE) dated Sept. 20 and published on Oct. 15.
Six sectors have been approved for the first phase, namely energy, industry, waste, agriculture, forestry, and transport, in line with recommendations from the market's steering committee. Examples of technologies covered in each sector include:
- Energy: Green hydrogen production via electrolysis or biomass, energy efficiency in lime production, compressed biogas, renewable energy with storage and offshore wind.
- Industry: Green ammonia usage and feedstock switches in ammonia-urea manufacturing.
- Waste: Biochar production and landfill gas capture.
- Agriculture: Systematic rice intensification, biochar, and agroforestry.
- Forestry: Afforestation and institutional forestry.
- Transport: Modal shift and electric vehicles.
A second phase will include construction, fugitive emissions from fuels and industrial gases, solvent use, and carbon capture and storage (CCUS).
The BEE, which oversees offset methodology development under the CCTS, said in its notice that it would publish sectoral scope and methodologies from "time to time" after approval from the central government.
In response, the Carbon Removal India Alliance (CRIA) on Oct. 19 welcomed the inclusion of carbon dioxide removal (CDR) technologies such as biochar and agroforestry, describing it as India's "first acknowledgment and inclusion of any CDR methods under the ICM regime."
The Carbon Markets Association of India (CMAI) also cited the BEE notice as a milestone in operationalizing the country's offset market by defining sector scopes.
The CCTS, first announced in 2023, is expected to launch carbon credit trading in 2026. The market will involve both compliance and voluntary mechanisms. Non-obligated entities can register projects that reduce or avoid emissions and earn Carbon Credit Certificates (CCCs) to trade on power exchanges, as OPIS earlier reported.
Under the compliance mechanism, nine energy-intensive sectors, including aluminum, cement, and steel, are being considered for mandatory greenhouse gas emission intensity targets. Entities exceeding greenhouse gas emissions intensity targets will earn credits, while those failing must purchase certificates to cover the shortfall.
Reporting by Melissa Goh, mgoh@opisnet.com
Editing by Lujia Wang, lwang@opisnet.com
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New draft rules for Washington state carbon offset credits show the state is maintaining a tight approach to verification and environmental justice in the emissions offsets market.
Regulators on Tuesday published full draft rule language for Cap-and-Invest offsets rulemaking ahead of public meetings later this month. The state Department of Ecology would operate the offsets market more strictly than other compliance offset markets, according to OPIS analysis, highlighted by a focus
on direct environmental benefits to the state (DEBS) and State Environmental Policy Act (SEPA) compliance in the draft rulemaking.
The new draft lays out rules to "ensure an offset credit can be used as a compliance instrument" in Washington state. Full language is available on the Ecology website.
According to OPIS policy analyst Kate Haerizadeh, the new draft rules underscore Washington state's more stringent regulatory approach compared to California's. Stronger verification processes included in this draft, along with other rules like the requirement that Ecology credits provide DEBS, could lead to a tighter supply of Washington offset credits.
"I believe pricing may reflect the reduced availability of credits and potentially increased demand from industries needing compliance flexibility, and overall be influenced by the stricter requirements," Haerizadeh said.
Haerizadeh noted the Ecology offset program will expand as more sectors are included, but that the draft rulemaking does not mention future market stability or collaboration with the Western Climate Initiative (WCI).
"Instead, the focus was on Washington regulating even more stringently than California, underscoring the state's current independent approach," the analyst said.
OPIS on Wednesday assessed benchmark California Carbon Offset (CCO) prices at $15.70/mt for the CCO-3, $15.55/mt for the CCO-8 and $15.95/mt for the Golden CCO. DEBS offset credits were assessed at a $15.10/mt premium to non-DEBS credits.
The new rules also introduce stricter compliance with the State Environmental Policy Act (SEPA), specifically in avoiding future harm to the environment due to offset projects.
"When analysis under [SEPA] is required for an offset project, a project-level SEPA analysis finding no significant adverse environmental impact after mitigation fulfills this requirement," according to the draft rule.
Haerizadeh said the draft also provides "tougher rules" for third party project verification and credit invalidation should projects not meet standards.
Ecology will host a public meeting specifically on Environmental Justice and the rulemaking on Oct. 21. Haerizadeh said the draft rules emphasize protecting tribal and low-income communities, with provisions for additional Environmental Justice sessions.
Washington regulations also call for reduced usage of offset credits for compliance obligations compared to California. The rule initially caps offset usage at 5% through 2030, before a gradual decrease "pushing for more direct emissions reductions," Haerizadeh said.
Compliance entities may use offsets for up to 5% of their obligation until 2030, but starting in 2026 that percentage begins to decrease. The general offset limit falls to 4%, though entities are then able to use offsets generated on tribal land for an additional 2% of their obligation.
"The general offset limit remains at 5% until 2030, but starting in 2026, it decreases to 4% for non-tribal offsets. However, entities can use an additional 2% from tribal projects, allowing for some flexibility and bringing the total possible offset usage to 6%," Haerizadeh said.
The rulemaking allows for expansion of project types, and also provides new specifics for the Ozone Depleting Substances (ODS) protocol Ecology plans to adapt.
Changes to the ODS protocol, according to OPIS analysis, include updates to new accounting values, expansion of eligible aerosol ODS sources and revised emissions factors in line with new Environmental Protection Agency data.
"The ODS protocol revisions modernize GHG accounting by adopting AR5 values (instead of AR4) and expanding eligibility, but this will likely reduce the number of credits generated," Haerizadeh said.
The expansion of eligible ODS supplies include federal sources and medical aerosols, but the rules indicate it will be a highly regulated expansion of these sources according to Haerizadeh. The new protocols allow for regular program updates based on new EPA data, and the ODS rules have stricter requirements for transparency and accuracy, Haerizadeh said.
Ecology in March 2023 approved both the American Carbon Registry and Climate Action Reserve as cap-and-invest offset project registries. Ecology issued its first offset credits in December 2023 to two ODS projects, ahead of a smaller issuance in Feb. 2024 to another ODS project.
Reporting by Slade Rand, srand@opisnet.com
Editing by Kylee West kwest@opisnet.com
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Delaware will receive $14.3 million in federal money to build medium- and heavy-duty electric vehicle charging infrastructure along the I-95 corridor in the state, EPA said on Thursday.
The EPA Climate Pollution Reduction Grant money was provided under the Inflation Reduction Act and supports the Biden administration's efforts to build EV charging infrastructure along the nation's major highways, EPA said.
The I-95 corridor, which runs 1,924 miles from Florida to Maine, is among the most heavily traveled roads on the East Coast.
Twenty-three miles of the highway run through Delaware, the second-shortest segment after the 16 miles in New Hampshire. The Delaware House Service Area in Newark is the only rest area on the state's portion of the highway.
Adam Ortiz, EPA regional administrator for the Mid-Atlantic, called the grant "a critical down payment for zero-emission freight movement in participating states."
Delaware is part of the Clean Corridor Coalition, a group of states that also includes New Jersey, Connecticut and Maryland. The group is expected to receive $250 million in EPA funding for EV charging infrastructure for commercial zero-emission medium- and heavy-duty vehicles along the corridor, according to EPA.
Plans call for development of 20 freight truck charging infrastructure sites along the corridor that will include about 148 ports suitable for overnight use, 164 fast charging ports, and 138 ultra-fast charging ports, according to EPA.
Reporting by Steve Cronin, scronin@opisnet.com
Editing by Jeff Barber, jbarber@opisnet.com
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India's Jupiter International is staying close to its roots as a solar cell manufacturer even as it embarks on vertical integration to navigate the country's new solar landscape, according to the company's CEO, Dhurv Sharma, during an OPIS interview at the Renewable Energy India Expo on Oct. 3.
The company has long been India's largest pure play solar cell producer with an 800-megawatt (MW) facility at its Himachal Pradesh stronghold in northern India. But come next April, it would have added 1.4 gigawatts (GW) of module capacity from a new joint-venture Odisha plant in eastern India. Its total module capacity is then expected to rise to 2.8 GW in September and to 4.8 GW in December 2026. By then, the company's cell capacity would have risen to 7 GW with another 3 GW of wafer capacity added further upstream.
"We still want to be largely a cell manufacturer but with a lot of command on cell technology and some integration into quality module manufacturing," Sharma said.
Even with the new integration plans, Jupiter's cell capacity would still be significantly higher than its module capacity, Sharma noted. The company is also already in discussions to sell solar cells from its 2026 capacity to other module manufacturers, he added.
So why take the drastic step of expanding into the modules segment in the first place?
Sharma, a longtime advocate for Indian solar manufacturing, has been with Jupiter from the beginning when the company set up its first cell facility in 2009 with a capacity of just 32 MW. In the years since, Sharma has focused on expanding the company's cell capacity without extending into the upstream or downstream segments.
But the regulatory landscape in India's solar industry has undergone a sea change in the past two years. After having spent the better part of the 2010s rallying industry peers and government officials to better support Indian solar manufacturers against low-priced imports from China, Sharma now sees clear government support for the local industry, setting the stage for a new era of aggressive capacity expansion by domestic manufacturers.
"The government of India today...is willing to protect domestic manufacturing against the asset deflation that China is exporting in the solar context. We now have a clear understanding that the government wants to enable a larger solar manufacturing base," Sharma said.
Over the past two years, the Chinese Module Marker (CMM), the OPIS marker for FOB China module prices, has fallen from $0.265/wp to $0.09/wp as of Oct. 1. While the price deflation is a boon to project developers, it is also a bane to domestic solar manufacturers unable to compete with Chinese imports in the absence of government support.
India currently has a slew of trade measures and incentive schemes to support its domestic solar manufacturers, including a 40% basic customs duty and an Approved List of Models and Manufacturers (ALMM), an exclusionary list from which government projects can only source their modules.
Ensuring the "demand visibility" that ALMM provides is very important for local manufacturers, Sharma said. Based on the balance sheets of listed companies in China, Chinese solar manufacturers are selling modules at a loss despite their large capacities, he noted.
"Circumstances like these require multiple support packages (for the domestic industry). It cannot be a very simple approach," Sharma said.
Despite the improved government support for domestic manufacturers, Sharma remains mindful of the price volatility and crashes that have besieged the solar industry in recent years. Vertically integrating into the module and wafer segments is a way to "protect and de-risk the business", he said.
The solar veteran, perhaps untypically, also tends to shy away from the hyperbolic talk normally associated with a burgeoning industry -- even his assessment of solar cell technologies is measured. At a time when Chinese manufacturers have switched en masse to the newer TOPCon cell technology, Sharma still sees value in the previous incumbent Mono PERC technology.
In Sharma's view, the switch to TOPCon technology happened very quickly at a time when the solar industry was distressed with price falls and overcapacity.
"In normal circumstances it takes a while for new technologies to mature and be adopted. But companies have rushed into adoption and mainstreaming of the Topcon technology, whether due to competitive pressure or combination of various factors.," Sharma said.
"If I had to take a decision today (on whether to use TOPCon in a project), I would be happy to push it off by another five to six months," he added.
Jupiter's new solar projects, the first of which is scheduled to be ready in five to six months time, will be based on TOPCon technology.
In keeping with the theme of hewing close to its roots, Jupiter will not be focusing on overseas markets for now despite growing Indian solar exports to the US.
"Ideally, producers who manufacture at where the market is are the ones who will succeed. And for us, that is India," Sharma said.
Reporting by Hanwei Wu, hwu@opisnet.com
Editing by Lujia Wang, lwang@opisnet.com
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The British government is committing "up to £21.7 billion" ($28.57 billion) over the next 25 years to fund two carbon capture, utilization and storage (CCUS) clusters in the northeast and northwest parts of England, a decision that could pave the way for 8.5 million tons of carbon emissions being sequestered each year.
The funding will go towards carbon capture projects in the East Coast Cluster in northeast England and the HyNet cluster in northwest England and north Wales.
The former is expected to capture emissions from the Phillips 66-operated 221,000-b/d Humber refinery and the Prax-operated 113,000-b/d Lindsey refinery, while the HyNet cluster includes a project to capture emissions from the Essar Oil-operated 200,000-b/d Stanlow oil refinery.
The government said the multi-billion pound funding would create 4,000 jobs and support up to 50,000 jobs in the long-term.
The East Coast Cluster is a collaboration between six different energy companies, including BP, Eni, Equinor, National Grid, Shell and TotalEnergies.
The HyNet cluster could reduce carbon emissions by up to 10 million tons a year, according to the HyNet Alliance, which comprises several companies including Heidelberg Materials, Cargill, Engie and Ineos, among others.
The Carbon Capture and Storage Association trade body welcomed the government's commitment, with Olivia Powis, the CCSA's chief executive, noting that this would help the country's journey towards net zero.
The funding "means that we can deliver thousands of new highly skilled jobs whilst reducing our carbon dioxide emissions and retaining existing jobs in our industrial areas in critical industries like cement, chemicals and manufacturing across the UK," Powis said in a statement Friday.
There is strong cross-party political support for CCUS in the U.K., and the investment announced by the new Labour-led British government is similar in scale to the £20 billion of support over 20 years promised by the last Conservative administration in 2023.
Developing the CCUS clusters dovetails with the new government's emphasis on boosting economic growth and construction work across several economic sectors.
The country's new chancellor, Rachel Reeves, wrote in the Guardian newspaper on Friday that CCUS is a "gamechanging technology" representing "a major success story for British industry" that would also result in "jobs in the supply chain, such as pipe welders, mechanical engineers, site managers and surveyors."
Delay to CCS Projects Could Boost Carbon Prices
The British government has set a target to capture 20-30 million mt of carbon by 2030, with four clusters operational by the end of the decade. Meeting that goal would result in the capture of carbon equivalent to a quarter of the 96.8 million mt emitted last year by installations and airlines subject to the UK's Emissions Trading System.
Capturing upwards of 30 million mt of carbon every year would consequently put a significant dent in demand for UK emissions allowances (UKA), the pollution permits which must be purchased by industrial emitters covered by the cap-and-trade ETS.
But delays in bringing CCS projects online could have expensive ramifications later in the decade and into the 2030s for those emitters, especially polluters that are unable to pass the full cost of carbon onto end-consumers. In that CCS-delayed scenario, demand for UKAs will be higher than expected, while the number of annual allowances available for purchase in the ETS will have shrunk.
British carbon prices have been in the doldrums for more than a year and on a downward slide for two years. OPIS assessed the benchmark December 2024 UK emissions allowance at £36.32 ($47.59) on Thursday, far below the record settle of £97.75 on August 19, 2022, but most analysts forecast that prices will be in triple digits by the end of the decade.
Such a price would force the country's largest installations to spend almost half a billion pounds a year on UKAs if they do not decarbonize.
Reporting by Humberto J. Rocha, hrocha@opisnet.com
Editing by Anthony Lane, alane@opisnet.com
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US attorneys and the Federal Bureau of Investigation have charged former executives of CQC Impact Investors with alleged criminal fraud for manipulating cookstove carbon project data to inflate credit issuances and secure an investment of more than $100 million, the Department of Justice announced
Wednesday.
The charges were brought against former CQC CEO Ken Newcombe and former CQC Chief of Carbon and Sustainability Accounting Tridip Goswami.
CQC is also known as C-Quest Capital.
Both allegedly manipulated data from their former company's Africa-based cookstove projects in order to issue millions of carbon credits that did not represent real emissions reductions. Newcombe was also accused of using manipulated data to obtain an investment in CQC of up to $250 million, DOJ said
in a news release.
Former CQC COO Jason Steele cooperated with law enforcement and pleaded guilty to three fraud charges "in connection with the conduct," according to the release.
In a statement Thursday, a spokesperson for Newcombe denied the charges. Goswami could not be immediately reached for comment.
Southern District of New York US Attorney Damian Williams said in the release that the "alleged actions of the defendants and their co-conspirators risked undermining the integrity of [the voluntary carbon market], which is an important part of the fight against climate change. Protecting the sanctity and
integrity of the financial markets continues to be a cornerstone initiative for this office, and we will continue to be vigilant in rooting out fraud in the market for carbon credits."
US attorneys declined to charge CQC itself because the company "truthfully and completely disclosed all criminal conduct in which officers, employees and agents of CQC had been engaged promptly after becoming aware of it," DOJ said.
Allegations of the cookstove project data manipulation were announced in June by CQC. The company said in June it had "uncovered wrongdoing" by Newcombe "that resulted in the over-issuance of millions of carbon credits ... in connection with its clean cooking programs registered with the carbon credit registry Verra."
Newcombe had previously stepped down from his role in February and was succeeded by Jules Kortenhorst, a former partner at private equity firm Vision Ridge, one of CQC's minority investors.
CQC said in June it had informed US law enforcement of wrongdoing. It also pledged to cancel the credits it had been improperly issued and revamp its monitoring, reporting and verification (MRV) processes as a result.
Verra, in turn, suspended the company's 27 projects registered with the standard and launched its own investigation into the matter, the organization said at the time.
Following the announcement, a spokesperson for Newcombe denied the allegations and said they were "part of a coordinated scheme" by Vision Ridge "to coerce Dr. Newcombe into giving up his majority shareholding in C-Quest Capital."
The Washington Post, citing anonymous sources at CQC, reported in September that it was Newcombe and "others" who had initially identified the over-issuances.
"Newcombe pushed for reforms, including a 'more reliable measurement-based surveying approach, suspending crediting processes and re-training staff,'" the Post reported, citing Newcombe's spokesperson.
Cookstove carbon projects operate by providing devices to households that use emissions-heavy means, such as burning charcoal in open fires, to prepare their food. To verify and validate their emissions reductions, CQC surveyed cookstove recipients about the use of their devices.
DOJ said on Wednesday that in 2020, Newcombe "set a new direction for CQC and decided to rapidly and aggressively increase the size" of its projects. In order to hit expansion goals, "CQC had to rely on partners that did poor work installing stoves; installed stoves in locations that were outside of a
project's scope" and at times "claimed to install stoves that were never installed," DOJ said.
Survey data collected to verify projects' emissions reductions indicated that the projects were roughly half as effective as the company hoped. In internal communications between Newcombe, Steele and Goswami, the latter suggested they "revise" the survey results, DOJ said.
DOJ alleged that ultimately, "Newcombe, Goswami and Steele agreed to manipulate the survey data for the Malawi and Zambia projects and enlist a person from outside CQC to fill out fraudulent survey forms to reflect the manipulated numbers."
Newcombe's spokesperson said in the most recent statement that the 77-year-old Newcombe is dying of cancer.
Knowing that the DOJ case "will likely be a futile exercise resulting in dismissal and knowing that its futile filing could hasten his death, one can fairly wonder whether the word Justice is still fairly included in its name," they said.
Cookstove Credits, Suspected of Over-Issuances, Trade at a Discount
In recent years, numerous carbon credit project types have been criticized for engaging in lax MRV. A study published in Nature Sustainability in July 2023 found that cookstove projects overestimated their emissions reductions by a factor of 9.2.
This alleged lack of integrity has caused the credits produced by cookstove credits to trade at a discount to others in the market, sources have told OPIS. On Thursday, OPIS heard offers for vintage 2022 credits from Africa-based projects in the range of $3.50/metric ton to $4/mt.
The offers were still stronger than the weakest offers for REDD+ forestry credits, a project type that has also been accused of over-crediting. V16 credits from an Asia-based REDD+ project were heard offered as low as 40cts/mt on Thursday.
Still, these offer indications fall well below OPIS assessment averages, which take into account the full range of price indicators in the market. The OPIS REDD+ V22 Credits Average was calculated at $9.25/mt on Wednesday.
Nature-based removal credits, such as those issued by afforestation, reforestation and revegetation (ARR) and blue carbon projects, which restore coastal environments, trade stronger still.
OPIS calculated the ARR V22 Credits Average at $22.177/mt and the Blue Carbon V22 Credits Average at $29.677/mt on Wednesday.
Reporting by Henry Kronk, hkronk@opisnet.com
Editing by Bridget Hunsucker, bhunsucker@opisnet.com
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Uniper's Ratcliffe-on-Soar power plant, the last coal-fired facility in the United Kingdom, is closing today. The plant began operating in 1968. With the closure, UK becomes the first of the G7 economies to completely eliminate coal from its electricity generation.
Many of the 170 employees will stay on to dismantle the infrastructure over the next two years, said owner Uniper to the media.
“(The plant's closure) marks the end of an era and coal workers can be rightly proud of their work powering our country for over 140 years. We owe generations a debt of gratitude as a country,” Energy Minister Michael Shanks said in a statement.
The plant had a generating capacity of 2 GW and supplied electricity to two million homes. The last delivery of coal, about 15,000 tonnes, arrived by train last June.
The UK imported 49,700 t of thermal coal in 2023 compared to 0.14 mt in 2022, 0.19 in 2021 and 0.59 mt in 2020.
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Tightening EU climate regulations are expected to catalyze stronger global carbon policies, with policy certainty crucial for building confidence in investing in transition technologies and initiatives, panelists said on Wednesday during a discussion hosted by OPIS, a Dow Jones company, at the Wall Street Journal's Journal House in Singapore.
Evolving EU climate policy, particularly the Carbon Border Adjustment Mechanism (CBAM) that seeks to level the carbon emission costs for products imported into the EU, will have a material impact on major EU exporters such as China and India.
This has intensified efforts to establish robust carbon pricing outside the EU, encouraging countries to strengthen their own emission trading schemes (ETS), said Vidur Nayar, Head of Environmental Trading Asia-Pacific at Hartree Partners, who described CBAM and its ramifications as the "ultimate climate chess game".
Examples of countries' responses to CBAM include China's recent inclusion of the cement and aluminum sectors in its ETS, aligning with the sector coverage under CBAM, and South Korea's preparation of trade-exposed companies for EU regulations ahead of implementation.
Nayar believes the intent of the EU regulations is to spur climate actions in other countries rather than impose additional taxes on products. However, it has triggered diplomatic responses, as seen by Turkey's proposal to join BRICS.
On a corporate level, companies outside of the EU need to take proactive steps to enhance their reporting, disclosure, and putting forward contracts to ensure readiness and alignment with the CBAM tariff and the EU ETS price, said Jaclyn Dove, Global Head of Sustainable Finance Strategic Initiatives at Standard Chartered.
This, however, would not necessarily lead to a significant inflow of EU Allowances or CBAM certificates into the EU, as countries would prefer to retain and use their carbon revenues within their own regions, added Nayar.
The opportunity also lies in companies shaping policies in their home countries, allowing them to influence how these evolve, align incentives with their interests, and position themselves to address challenges, said Dale Hardcastle, Global Head of Carbon Markets at Bain & Company.
Panels meanwhile underscored the importance of policy and regulatory certainty in enabling companies and investors to make informed decisions, commit resources, and drive the necessary investment and transition efforts.
Hardcastle pointed out that policy uncertainty is a key factor that could hold back the ability to scale up finance and move forward with the next stages of projects.
There is sufficient green finance available, but the challenge is scaling it up to meet investment needs and direct capital where it's most required for scalability, added Dove. Achieving net-zero ambitions will necessitate global collaboration, involving both public and private capital, with policymakers facilitating essential regulations and capital flows.
Nayar added that the lack of policy certainty has been a challenge, but he believes CBAM is bringing the conversation "front and center" and helping to strengthen ETS and climate finance initiatives.
The markets need to iteratively develop policies that will not be perfect on day one, and all these need to be improved over time; what companies and corporations are looking for most is regulatory certainty and a clear pathway, he said.
"From my perspective, any increase in pricing or internal carbon pricing that CBAM does result in, allows better investment decisions and unlocks green finance over a longer period," said Nayar.
The panel session, hosted by OPIS, was part of a two-day Journal House event organized by The Wall Street Journal. Watch the recordings of both OPIS panel sessions:
"The Growing Reach of Emissions Rules"
"New Dynamics of Solar"
Find the complete Journal House Singapore program and recordings here.
Reporting by Lujia Wang, lwang@opisnet.com
Editing by Hanwei Wu, hwu@opisnet.com
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China has launched a public consultation on expanding the national emissions trading scheme (ETS) to include sectors such as cement, steel, and electrolytic aluminum, with emissions coverage to start from 2024, according to a notice from the Ministry of Ecology and Environment (MEE) on Sept. 8.
China's ETS was launched in July 2021 to cover only power generation entities, accounting for around 5 million metric tons of carbon dioxide equivalent (tCO2e) emissions annually.
With the inclusion of the new sectors starting from the compliance year 2024, the national ETS would cover about 60% of China's total emissions, according to the MEE.
Around 1,500 new key emitting entities will be added, covering an additional 3 billion tCO2e of emissions, MEE noted. Like the power sector, entities emitting over 26,000 tCO2e/year will be included.
Free allowances will be allocated to newly covered sectors based on emission intensity, with the overall allocation mostly aligned with actual emissions over the first two to three years to provide time for capacity building, the MEE said.
The MEE's explanatory note highlighted that the national ETS has not yet met expectations as a market mechanism, primarily due to low activity and a lack of diverse participants, and it falls behind more established markets like the EU's ETS.
Between 2022 and 2023, 263 million metric tons of Chinese Emission Allowances (CEAs) were traded, marking a 47% increase from the first cycle. However, this volume remains significantly below the total covered emissions for compliance years 2021 and 2022, which exceeded 10 billion tCO2e.
The CEA last closed at 89.98 yuan per metric tons (mt) ($13.08/mt) on Monday, according to Shanghai Environmental and Energy Exchange data.
The first compliance deadline for the three sectors will be at the end of 2025. The consultation will close on September 19.
($1 = CNY 7.10)
Reporting by Lujia Wang, lwang@opisnet.com
Editing by Hanwei Wu, hwu@opisnet.com
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The voluntary carbon market (VCM) with access to international trading would be a more suitable option to facilitate blue carbon projects in New Zealand, than the country's Emissions Trading Scheme (ETS), initial findings from a government-commissioned report released on Sept. 3 outlined.
Funded by the Nature Conservancy Aotearoa New Zealand and the Ministry for the Environment, the report emphasizes the greater flexibility and financial viability of the VCM for blue carbon projects, which focus on the carbon sequestration potential of ecosystems such as salt marshes, seagrass, and
mangroves.
Authors noted that the voluntary carbon market is more likely to facilitate the development of blue carbon projects at scale by creating high-integrity carbon credits potentially holding a premium and access to a large pool of credit buyers. Verification through international registries such as Verra would enable integration with standards such as the ICVCM Core Carbon Principles.
This is compared to the NZ ETS, which despite having benefits such as more stable price signals and potentially lower costs, holds risks including existing price controls, an oversupply of New Zealand Units, and lack of accountability of co-benefits, according to the report.
OPIS last assessed the scheme's NZU at NZ$62.08/mt ($38.46/mt) on Thursday. International vintage 2024 blue carbon units, registered under registries including the American Carbon Registry, Climate Action Reserve, Gold Standard, and Verra, were marked at an average of $30.76/mt.
However, the report urged the development of a national strategy to scale blue carbon projects, with the government providing clarity about Article 6 of the Paris Agreement and whether carbon credits can be sold overseas to enable the voluntary market.
"Addressing policy barriers and creating an enabling environment has the potential to accelerate pilot projects already underway in New Zealand and support the uptake of blue carbon projects in New Zealand for the international voluntary market, at scale," said Olya Albot, project manager for nature-based solutions at The Nature Conservancy Aotearoa New Zealand.
The authors also recommended a Maori-led study into the barriers and opportunities for blue carbon projects, with the indigenous group having roles as land owners and customary title owners of coastal marine areas.
Reporting by Melissa Goh, mgoh@opisnet.com
Editing by Chuan Ong, cong@opisnet.com
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No bids were placed in Wednesday's September quarterly New Zealand emissions unit (NZU) auction, leaving all 7.6 million NZUs unsold and rolled over to the year's final auction on December 4.
This marks the second straight auction without any participation, following the June 2024 auction, the first on record with no bids. Since March 2023, NZU auctions have struggled to fully clear, with only the March 2024 auction selling a portion of the available units.
The latest result was in line with market expectations, as the auction floor price of NZ$64/mt -- the minimum price at which NZUs can be sold -- remains higher than secondary market prices, despite a recent uptick.
In August, New Zealand announced it would halve the supply of NZUs available through its Emissions Trading Scheme (ETS) while maintaining price control settings, which triggered a surge in spot prices. NZUs were last assessed by OPIS at NZ$61.73/mt on Tuesday, a 15.4% increase month to month.
Many market participants have noted that with supply forthcoming at these levels, buying at NZ$64 at auction did not appear to be a rational course of action, trading platform Carbon Match said in an update, seeing little interest despite a reduced supply of six million units to be offered across the whole of 2025.
All 3.525 million units offered in the September auction, along with 4.075 million unsold units rolled over from the March and June auctions, will be carried forward to the next auction on Dec. 4. Unsold units are not carried forward into the following calendar year, as seen in 2023 when 23 million units
were effectively removed from the market.
Following the auction, NZU prices rose, with the most recent trades at NZ$62.25/mt on major platforms around midday, still NZ$1.75/mt below the auction price floor but 52 cents higher than the OPIS assessment on Tuesday.
Reporting by Melissa Goh, mgoh@opisnet.com; Chuan Ong, cong@opisnet.com
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China has listed on Monday the first Chinese Certified Emission Reduction (CCER) projects for public consultation, around eight months after the relaunch of the Chinese Certified Emission Reduction (CCER) scheme in January.
The interim registry operator, the National Center for Climate Change Strategy and International Cooperation (NCSC), began accepting project registration applications on Aug. 23, OPIS reported earlier. The CCER was previously suspended in 2017 after a five-year run.
A total of 33 projects have been listed on the CCER registry across all four methodologies currently available, that are expected to generate 9.67 million metric tons (mt) of carbon dioxide equivalents (tCO2e) per year or 96.43 million tCO2e in total, registry data showed.
A total of 19 grid-connected offshore wind power projects have been listed, expected to generate 8.97 million tCO2e/year of emission reductions or 85.28 million tCO2e in total. Additionally, 8 afforestation carbon sink projects are listed, projected to generate 249,389 tCO2e/year or 6.55 million tCO2e. Four
distributed grid-connected solar thermal projects are expected to produce 451,757 tCO2e/year, totaling 4.52 million tCO2e. The remaining 2 projects involve mangrove creation, estimated to reduce emissions by 2,805 tCO2e/year, totaling 77,795 tCO2e.
The crediting period for these projects spans from 2020 to 2023, with annual reductions of 17.83 million tCO2e, 27.17 million tCO2e, 49.66 million tCO2e, and 1.78 million tCO2e, respectively.
Under the current regulation, CCERs can offset compliance obligations under the national emission trading scheme (ETS), with a cap of 5%. Although CCERs issued before March 14, 2017, are still in circulation, they will no longer be eligible for compliance obligations starting in 2025.
The public consultation period for the project design document is 20 working days.
Reporting by Lujia Wang, lwang@opisnet.com
Editing by Chuan Ong, cong@opisnet.com
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Eight Japanese companies, including Sojitz Corporation, SBI Sumishin Net Bank, and Salesforce Japan, have announced a partnership with the country's Hamamatsu City to develop voluntary carbon credits under Verra's improved forest management (IFM) methodology, the firms said on Aug. 30.
The alliance, which also includes Temix Green, Maply, Fuyo General Lease, Green Carbon, and Sustainacraft, will begin verification for the issuance of credits under Verra's Verified Carbon Standard (VCS) program in September, using the IFM methodology for artificial cedar and cypress forests in the city.
This approach involves sustainable practices for logging and the elongation of logging cycles to enhance carbon sequestration. The participating companies bring experience in forestry, forestry administration, and digital platforms for creating and issuing forest-derived carbon credits, with networks to potential buyer companies internationally, the firms said.
The coastal Hamamatsu City in Shizuoka Prefecture has a 100,000-hectare forest area, one of the largest in Japan.
While Japan's carbon trading has traditionally centered around government-certified J-Credits, the partners highlight a rising demand from global corporations for credits that comply with international standards, such as Verra's Verified Carbon Standard (VCS).
There are currently no Verified Carbon Standard (VCS) projects registered in Japan, according to data from the Verra registry. However, three VCS projects are under validation or development in the country, including one by Hitachi Systems which employs the IFM methodology as well.
Forestry carbon credits generally fetch the highest premium within the domestic J-Credit market, last listed at 5,000 yen per metric ton ($34.30/mt) on Aug. 30, according to data from the Tokyo Stock Exchange. This is compared to J-Credits in other categories, such as renewable electricity (4,580 yen/mt) and energy conservation (1,600 yen/mt).
($1 = 145.9 Japanese yen)
-- Reporting by Melissa Goh, mgoh@opisnet.com; Editing by Chuan Ong,
cong@opisnet.com
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New Zealand is continuing to advance its international climate cooperation efforts as a way to potential cooperation under Article 6 of the Paris Agreement to meet its climate targets, Climate Change Minister Simon Watts told OPIS in an interview on Aug. 20.
"We're looking for opportunities to work with other countries, particularly in Southeast Asia, on how we can achieve a win-win... in decarbonization and emissions reduction," said Watts on the sidelines of the Carbon Forestry 2024 Conference in Rotorua.
He noted that New Zealand has progressed green economy agreements or Memorandums of Understanding (MOUs) with jurisdictions including Singapore, the Philippines, Thailand, and California, and is working closely with Pacific neighbors. New Zealand is seeking to expand its international green economy deals, including potentially with India and China, Watts said.
"The MOUs we have in place provide a pathway to enter into Article 6 agreements," Watts said. "New Zealand needs options to meet its 2030 NDC target, and that's very much front of mind for us, and is very challenging and difficult."
Under the Paris Agreement, New Zealand has committed to reducing net emissions by 50% below gross 2005 levels by 2030 as part of its Nationally Determined Contributions (NDCs). Meeting the NDC requires significantly deeper emissions reductions than the current domestic targets. New Zealand has previously estimated a shortfall of around 100 million metric tons (mt), necessitating offshore mitigation, with associated costs potentially scaling into the billions.
Panelists at the conference also earlier highlighted uncertainty around the government's strategy to close the gap between the domestic emissions budget and the NDC target, especially concerning the emissions trading scheme's (ETS) role. In a 2023 report, the government had said it was exploring options such as offshore mitigation activities, with a focus on the Asia-Pacific, and
linking the ETS to international markets that meet integrity standards.
While Watts did not provide a specific timeline or details on the government's strategy, he noted the importance of adding more substance to the agreements "as soon as practical". The government is first seeking to publish its second domestic emissions reduction plan by the end of 2024.
Domestically, Watts addressed recent adjustments to the ETS, where the government has significantly reduced the supply of New Zealand Units (NZUs) available for auction from 2025. This decision announced Aug. 20 aims to correct an oversupply that has led to depressed carbon prices and bring stability to the market, and saw units rally in price the days after.
"The key aspect is that we've got certainty in the market and that investors that are investing in asset classes such as forestry have a degree of certainty around what's going to happen in the future," Watts told OPIS. "It's a positive thing... in a macroeconomic environment where there's a lot of uncertainty."
OPIS assessed the NZU at a five-month high of NZ$61.13/mt ($38.02/mt) on Aug. 26, up 10.7% week-to-week as market participants reacted to the announcement.
New Zealand stakeholders have largely welcomed the government's decision to reduce auction supply, as OPIS reported, though some note outstanding concerns about the role of forestry NZU supply in the ETS. Clarity on land-use policies that could restrict the type of forestry that can enter the ETS stands as a
fundamental issue to be addressed, sources indicated.
The Carbon Forestry 2024 Conference was organized by Innovatek on Aug. 20-21.
($1 = NZ$1.61)
Reporting by Melissa Goh, mgoh@opisnet.com
Editing by Lujia Wang, lwang@opisnet.com
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India has installed a record 15 gigawatts (GW) of solar capacity in the first half of 2024, an increase of 282% year to year, the highest half-yearly and annual installations to date, due to the commissioning of several previously delayed projects, according to research company Mercom India on August 22.
The Country added 5 GW of solar capacity in quarter two, an increase of 170% year to year from 1.8 GW, but down 49% quarter to quarter from 9.9 GW. According to Mercom, 4.3 GW of large-scale solar projects including 1.8 GW of open access projects were commissioned in Q2. Although large-scale capacity additions rose 191% year to year, they fell 55% quarter to quarter.
The reimposition of the Approved List of Models and Manufacturers (ALMM) from April 1 had impacted several open access projects in addition to grid connectivity and transmission infrastructure delays during the second quarter. Moreover, Q1 solar installations had surged ahead of the ALKMM reimposition, Priyadarshini Sanjay, Managing Director at Mercom India said. The states of Rajasthan, Gujarat and Karnataka led large-scale solar capacity additions in Q2 contributing 30%, 22% and 21% respectively of total quarterly installations.
India's cumulative installed solar capacity reached 87.2 GW as of June 2024 with utility-scale projects making up 87% and rooftop solar 13%. Solar comprises 19.5% of India's installed power capacity and made up 44% of the Country's total installed renewable energy capacity. The states of Rajasthan, Gujarat and Karnataka led the country's cumulative installed large-scale solar capacity at 29%, 15% and 14% respectively.
India has a large-scale solar project pipeline of 146 GW with another 104 GW of projects tendered and awaiting auction as of June 2024, but challenges arising from transmission infrastructure constraints particularly in Rajasthan remain, although hybrid and energy storage projects which utilize the same transmission lines may reduce these challenges, Sanjay said.
According to Mercom, 41.4 GW of tenders were announced in the first half of 2024, an increase of 51% from 27.5 GW year to year although in Q2, 10.7 GW of tenders were announced, down 22% from 13.6 GW year to year and 65% quarter to quarter at 30.7 GW. The drop in the volume of tenders announced in Q2 could be a result of the delay in the Ministry of New and Renewable Energy (MNRE) releasing the bidding trajectory for the year, and concerns over tepid response and higher bids after the ALMM reimposition, Sanjay said.
A total of 31.8 GW of projects were auctioned in the first half of 2024, an increase of 321% year to year from 27.5 GW over the same period last year, although in Q2, 6.7 GW of solar projects were auctioned, consistent year to year but down 73% from 25.1 GW quarter to quarter, according to Mercom.
India has set a goal of achieving 500 GW of renewable installed capacity, including 270 GW of solar capacity by 2030, according to the MNRE. In recent years, India has been building up its local solar supply chain capability. The Country has more than 50 GW of total ALMM listed module capacity which meets the Bureau of Indian Standards and MNRE's efficiency criteria.
Reporting by Serena Seng, sseng@opisnet.com
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Swiss manufacturer Meyer Burger has announced it is not moving forward with the development of a 2 GW cell factory in Colorado, saying the plans are "no longer financially feasible."
The company's German cell plant, previously slated for retirement, "will continue to form the backbone of Meyer Burger's solar cell supply," the company said in a statement Monday.
The company said it will now return its focus to its new 1.4 GW module plant currently ramping up in Goodyear, Arizona. A tentative plan for a 0.7 GW expansion there has also been shelved but "remains an option."
Continuing to supply Goodyear's production lines with cells produced in Germany is "the most economical option" in the current market, Meyer Burger said.
The Section 45X Advanced Manufacturing Production Tax Credit (PTC) established by 2022's Inflation Reduction Act has led to many announcements of new solar module and cell factories in the U.S., but a handful of those cell plant plans have since been walked back, with manufacturers citing financial difficulties.
"The debt financing previously sought through the monetization of 45X tax credits will continue to be pursued on a reduced scale, tailored to module production in the U.S.," Meyer Burger said.
When its Colorado Springs cell plant was initially announced in the summer of 2023, Meyer Burger expected to have it up and running by the end of this year. In a June press release announcing the start of production at the Arizona HJT module plant, the company said updated timing for the cell plant was contingent on closing of 45x financing.
As a result of this "revised strategy," a partnership with an unnamed U.S. technology company, first teased in a June press release, has fallen through. The company expected to finalize the agreement by the third quarter of this year, in what was aimed at developing "a solar module that is manufactured in
the U.S. with an increasing share of domestic components."
It's unclear how the mothballed plans could complicate other contracts. In June, Meyer Burger announced a three-year offtake deal with a "major U.S. energy company" to buy up to 1.75 GW of modules starting in early 2026. A two-year extension option would become effective upon the completion of the cell plant's financing, Meyer Burger said.
Reporting by Colt Shaw, cshaw@opisnet.com
Editing by Aaron Alford, aalford@opisnet.com
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Carbon credit issuances from nature-based projects registered with Verra have fallen sharply so far this year, with REDD+ taking a greater hit than removal project types like afforestation and coastal environment restoration, records show.
Since the start of 2022, Verra-registered REDD+ projects issued over 110 million credits. So far this year, Verra has issued 4.2 million credits after issuing over 44.7 million credits in 2023.
REDD+ stands for reducing emissions from deforestation and forest degradation.
By comparison, Verra-registered removal projects like afforestation, reforestation and revegetation and Blue Carbon projects, which restore coastal environments, produced 22.58 million credits since 2022, including 2.38 million credits so far this year. In 2023, Verra issued over 8 million removal credits.
Toronto-based Carbon Streaming has signed streaming agreements with numerous nature-based carbon projects, including both REDD+ and ARR initiatives. During a second-quarter earnings call Wednesday, Carbon Streaming interim Chief Executive Officer Christian Milau attributed slow issuances to backlogs at Verra.
The accusation is a common refrain among developers and investors, but a Verra spokesperson recently told OPIS that fewer projects have requested issuances this year and that previous backlogs had been cleared.
A range of quality exists among nature-based removal projects, as it does with REDD+, but ARR and Blue Carbon credits tend to command higher values. OPIS has heard trades of volumes of 2,000 REDD+ credits or more ranging from $1/mt to $12/mt in recent weeks. By contrast, trades for ARR and Blue Carbon credits were heard between $5/mt and $30/mt.
OPIS calculated the REDD+ Vintage 2021 Credits Average at $8.56/mt on Monday. Blue Carbon V21 and ARR V21 Credits Averages were calculated at $31.202/mt and $21.677/mt, respectively.
Milau, speaking on the earnings call, said carbon markets had been difficult to predict in recent years and that investors are looking primarily for high-quality nature-based removal credits.
Carbon Streaming's investment strategy "is starting to prove out," Milau said. "The focus on good quality projects recently with scalable growth, removals, Article 6 and some committed offtakes I think is the way forward here."
"We have to also remember, long-term removal projects take some time to gestate and get to the cash flowing stage," Milau continued. "So I think it would be naïve of us to completely ignore the avoidance market. I do think in the long term, cashflow from removal projects will be superior and they have a longevity potentially that some of the avoidance projects don't have. But that business also can't just wait the 5 to 7 years it takes a tree to grow."
Reporting by Henry Kronk, hkronk@opisnet.com
Editing by Jeremy Rakes, jrakes@opisnet.com and Michael Kelly, mkelly@opisnet.com
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China-based solar photovoltaic (PV) manufacturer Beyondsun Green Energy has begun operation at its new intelligent manufacturing facility, the first in Zhongwei City, Ningxia, producing the company's first N-Power-Pro series N-type TOPCon photovoltaic module, Beyondsun said on August 1.
The facility at an investment of 3 billion yuan ($417.75 million) will be built in two phases. Phase one involves the establishment of a 3 gigawatt (GW) high-efficiency N-type TOPCon module production plant, while Phase two involves the establishment of a 2 GW high-efficiency Heterojunction (HJT) module production plant, a 3 GW aluminum alloy frame production line, and a 3 gigawatt hour (GWh) energy storage battery production line.
This is the first time the company has expanded its manufacturing facilities, since the company ramped up its module production capacity to 3.6 GW and launched N-type high-efficiency TOPCon modules in 2022, according to the company's website. Beyondsun currently has a module production capacity of 5
GW.
According to industry sources, new production facilities that have come on-stream in recent months have added pressure to a solar industry struggling with overcapacity and low prices. In the first half of 2024, China added about 21.5 GW of new module production capacity with more than 10 GW of new plants expected to come online in the second half of the year, an industry source said.
The new production facilities in addition to capacity expansions by module manufacturers this year have led to intense price competition amongst module manufacturers, as they compete for new orders resulting in TOPCon module monthly average prices falling to $0.097 per watt peak (wp) in July, down 14.2% from January, according to OPIS data.
As competition intensifies and profit margins shrink, coupled with the high capital expenditures and slow growth returns of investing in new manufacturing facilities, several new projects have been put on hold or divested as solar PV manufacturers chose to conserve cash and focus resources on weathering a market storm. According to the China Photovoltaic Industry Association (CPIA), about 20 GW of new module capacity was put on hold in the first half of 2024.
The weak demand and sluggish growth in the module industry has a more pronounced negative impact on the cells industry as several cell manufacturers put on hold or terminated new capacity expansion plans amid the supply glut in both the cells and module sector, a market source said.
Jiangxi Haiyuan Composites divested its investment in the 15 GW N-type high-efficiency cells and 3 GW high-efficiency module production facility in Chuzhou City earlier in March. The project was slated to produce 10 GW of high-efficiency cells in Phase one and 5 GW HJT cells and 3 GW high-efficiency modules in Phase two. Jiangxi Haiyuan Composites divested 100% of the equity of its wholly-owned subsidiary Chuzhou Saiwei Energy Technology to Zhejiang Aixu Solar Technology for 38 million.
In March, Lingda Group terminated its investment in the 20 GW high-efficiency cells production facility in Tongling. The project was originally slated to produce 10 GW of TOPCon high-efficiency cells in Phase one and 5 GW TOPCon high-efficiency cells and 5 GW HJT cells in Phase two.
In August, East China Heavy Machinery Company announced that the company's board of directors reviewed and approved the proposal to terminate the investment in the construction of the Bozhou 10 GW N-type high-efficiency solar cell production base project due to the downturn in the PV industry.
As the solar PV industry struggles under the weight of overcapacity, capacity expansion projects that are in stages of construction are left with little choice but to soldier on. These projects that come on-stream in the next few months will be competing in a very saturated market with low profit returns, sources said. More capacity expansion projects are expected to be put on hold in the coming months as the industry waits out the PV market downturn.
Reporting by Serena Seng, sseng@opisnet.com
© 2024 Oil Price Information Service, LLC. All rights reserved.
The Washington state Office of Financial Management estimates $3.8 billion in lost revenue from canceled emissions allowance auctions through fiscal years 2025-2029 if citizens vote to repeal the
state's cap-and-invest program in November, according to a new fiscal impact statement released this week.
The Washington Secretary of State published the statement along with new ballot materials this week for the vote on Initiative 2117 in November, which would repeal the state's cap-and-invest emissions
trading program if passed.
Initiative 2117 would also prohibit the state from enacting other similar emissions allowance trade systems if passed. The citizen-led initiative to the legislature collected signatures in 2023, the cap-and-
invest program's inaugural year, and was certified in January to appear on the general election ballot.
According to SurveyUSA polling results published this week by the Seattle Times, 48% of likely Washington voters were "certain to vote yes" on Initiative 2117 while 34% of respondents were "certain to vote no," and 18% were "not certain." SurveyUSA polled 708 likely voters from July 10-13.
The fiscal impact statement released this week detailed potential reductions to state expenditures and revenues from carbon allowance auctions under the initiative.
"If approved by voters, Initiative 2117 will reduce state revenue from carbon allowance auctions by $3.8 billion and reduce state expenditures by $1.7 billion between the effective date of the initiative and June 30, 2029," according to the statement.
If successful, the initiative's effective date would be Dec. 5, meaning the fourth quarterly Washington Carbon Allowance auction scheduled for Dec. 4 would no longer take place, the report stated.
Auction certification and other processes would extend past the date Initiative 2117 potentially would take effect, the Office of Financial Management said.
"Under the initiative, the last auction would take place on September 4, 2024," the statement read. "The three remaining auctions scheduled in state fiscal year 2025 would be canceled."
The cap-and-invest auction 7 on Sept. 4 will offer 7.94 million WCAs during the current portion, without an advance offering. The previous auction on June 5 sold out of 7.8 million V23 and V24 WCAs and settled at $29.92/mt. The auction did not sell out of the advance portion of V27 allowances.
The fiscal impact report noted reduced funding would go to projects and programs including "transportation emissions reduction, transit, pedestrian safety; ferry and other transportation electrification; air quality improvement; renewable and clean energy; grid modernization and building decarbonization; increasing the climate resilience of the state's waters, forests and other ecosystems; fire prevention and forest health; and restoring and improving salmon habitat."
The six quarterly and two allowance price containment reserve WCA auctions have generated $2.15 billion in funds since the cap-and-invest program began in 2023, according to the state Department of Ecology.
"The 2024 supplemental transportation, operating and capital budgets identify which programs and projects would and would not be eligible for this funding if the initiative passes," according to the
statement. "Spending authority of $1.7 billion in state fiscal year 2025 would no longer exist because the budget appropriations would be eliminated along with repeal of the accounts."
The report also said under the initiative, Ecology would undertake rulemaking from 2025-2027 to "repeal Climate Commitment Act rules and to amend rules regarding greenhouse gas emission
reporting."
WCA secondary market prices deflated during the first 2024 quarter following news of the Initiative 2117 appearing on ballots in the fall.
OPIS WCA assessed prices in 2024 bottomed out on March 15 at $29.50/mt for December and $27.80/mt for the prompt month before slowly regaining ground.
Washington state, California and Quebec in late March announced they were working to link carbon markets. Ecology held a listening session Monday on environmental justice and the potential linkage
of cap-and-invest to California and Quebec's joint carbon market.
Ecology staff earlier this month reiterated a potential linkage agreement could be enacted by late 2025.
The Secretary of State this week also published a ballot measure Explanatory Statement and Public Investment Impact Disclosure.
Initiative 2117 will appear on the ballot as written: "Initiative Measure No. 2117 concerns carbon tax credit trading. This measure would prohibit state agencies from imposing any type of carbon tax credit trading, and repeal legislation establishing a cap and invest program to reduce greenhouse gas emissions. This measure would decrease funding for investments in transportation, clean air, renewable energy, conservation, and emissions-reduction. Should this measure be enacted into law?"
Reporting by Slade Rand, srand@opisnet.com
Editing by Mayra Cruz, mcruz@opisnet.com and Michael Kelly, mkelly@opisnet.com
© 2024 Oil Price Information Service, LLC. All rights reserved.
Reports and announcements published over the last week have crystallised both the challenges facing the buildout of carbon capture storage (CCS) projects in the UK, but also how the technology retains widespread political support, including from the country's newly elected government.
The British government and carbon capture use and storage (CCUS) project developers in the UK are just weeks away from making final investment decisions to take CCUS projects forward, but the timetable for their completion is slipping and "numerous technical issues remain", the country's official
spending watchdog warned last Tuesday.
The National Audit Office, which scrutinises government spending on behalf of the UK's parliament, noted that the government's language about delivering the first wave of CCS projects hinted at likely delays.
The British government had originally aimed to have two 'Track-1' CCS clusters in the northwest and east of England operational by the end of 2026, with a target of capturing and storing upwards of 15.5 million metric tons of carbon per annum under the North and Irish Seas. However, that ambition has already been scaled back to storing 8.5 million mt/year at a later date, the NAO said.
"By May 2022 [the UK's Department for Energy Security and Net Zero (DESNZ)] was working towards the Track-1 clusters starting operations by the end of 2027, which remains its target. More recently, DESNZ has adapted this target to 'support' two clusters by the mid-2020s, indicating that it expects them to
begin operating later," said the NAO report.
Those Track-1 clusters are the HyNet cluster, which includes a project to capture emissions from the Essar Oil-operated 200,000 barrels per day Stanlow oil refinery, and the East Coast Cluster, which would capture emissions from the Phillips 66-operated 221,000-b/d Humber refinery and the Prax-operated
113,000-b/d Lindsey refinery. The two clusters include several other CCS projects.
"DESNZ is currently considering whether achieving [final investment decisions] across all eight [CCS] projects by September 2024 is feasible. It therefore expects to achieve FID with at least some of the Track-1 projects by September 2024, with the rest reaching FID in 2025," the public spending watchdog said last week.
The NAO suggested that staggering the delivery of projects in the clusters had both potential advantages and disadvantages in achieving value for taxpayer investments: "It could lead to fewer projects making use of common transport and storage infrastructure. But it may also lead to earlier [emissions] reductions...In addition, DESNZ considers this approach may prevent more mature projects needing to retender contracts if they are delayed by waiting for other projects to be ready to take final investment decisions."
Delay to CCS Projects Could Boost Carbon Prices
The British government has set a target to capture 20-30 million mt of carbon by 2030, with four clusters operational by the end of the decade. Meeting that goal would result in the capture of carbon equivalent to a quarter of the 96.8 million mt emitted last year by installations and airlines subject to the UK's Emissions Trading System.
Capturing upwards of 30 million mt of carbon every year would consequently put a significant dent in demand for UK emissions allowances (UKA), the pollution permits which must be purchased by industrial emitters covered by the cap-and-trade ETS.
But delays in bringing CCS projects online could have expensive ramifications later in the decade and into the 2030s for those emitters, especially polluters that are unable to pass the full cost of carbon onto end-consumers. In that CCS-delayed scenario, demand for UKAs will be higher than expected, while the
number of annual allowances available for purchase in the ETS will have shrunk.
Although British carbon prices have been in the doldrums for more than a year -- OPIS assessed the benchmark December 2024 UK emissions allowance at £39.375 ($50.51) on Monday, down from the record settle of £97.75 on August 19, 2022 -- most analysts forecast that prices will be in triple digits by the end of the decade. Such a price would force the country's largest installations to spend almost half a billion pounds a year on UKAs if they do not decarbonize.
Technical Issues Highlighted by Report
The NAO report warned that significant practical challenges must be addressed to deliver CCS in the UK.
"Numerous technical issues remain...Pipelines need to be built to connect [CCS facilities] to onshore terminals and then to undersea sites," the NAO said, adding that there was "uncertainty" about "how effective the solvents that projects will use to capture carbon will prove and whether proposed storage
areas are viable."
The nation's official spending watchdog also examined the institutional capacity of the British government to negotiate effectively with project developers, pointing out that the Department for Energy Security and Net Zero had struggled to meet recruitment targets for its CCUS Directorate employees.
"When the Directorate was established, 51.5 full-time equivalent (FTE) staff -- less than half the 103.5 FTE that DESNZ assessed it would need for 2021-22 -- were in post," said the NAO. "DESNZ considers this difference reflects the time it takes to fill vacancies. The number of staff required increased sharply,
particularly as Track-1 negotiations started. By 2023-24 DESNZ calculated that it needed 206.5 FTE, compared to a staffing level of 144.5 FTE at the start of that year."
The report did not look at whether construction contractors undertaking CCS projects might also face staffing-related issues. The UK has a "tight labor market" ExxonMobil's senior project manager Brian Talley told OPIS in April, while many industry insiders have said that demands on contractors are likely
to rise because of other energy transition-related projects.
Alex Milward, director of carbon capture utilization and storage at the Department for Energy Security and Net Zero, told OPIS during COP28 in Dubai at the end of last year that the government is alert to the possibility of worker-related issues causing delays.
"I think there is obviously a potential bottleneck which we're working extremely hard [to avoid]," said Milward, referring to the skills base. "We map where we think the pinch points are and where the capacities are...Certainly if there is a critical element in the supply chain that's not there, then the
whole program can get [backed up], so we're monitoring it very closely and hopefully avoiding the bottlenecks," he added.
In response to the NAO report, Ruth Herbert, chief executive officer of the Carbon Capture and Storage Association which advocates for the technology's development across Europe, said: "The NAO has noted that completing negotiations to support the Track-1 [CCS cluster] projects will be a very significant milestone in signalling the programme's commercial feasibility and the government's commitment to CCUS. We are pleased that due to continued investment from industry, Track-1 financial investment decisions are on track to be taken by September. Keeping to this timetable will demonstrate to investors that the UK is an attractive location for the net zero industries of the future."
"CCS on power generation is set to play a key role in enabling the Net Zero Power target and industries across the UK, such as cement manufacturing, hydrogen production and energy from waste are relying on the deployment of carbon capture to reduce their emissions," Herbert added.
Political Support Remains after Change of Government
The UK's general election on July 4 resulted in the Labour Party coming to power, but it is not obvious that there will be any change of approach to CCS from the new government in the short-term.
One of the new government's first announcements referenced forthcoming investment in the technology through a partnership between Great British Energy -- a new state-owned company with £8.3 billion of public money -- and the Crown Estate, which manages the £16 billion property land and seabed portfolio of the British monarch. The partnership "will also help boost new technologies such as
carbon capture and storage, hydrogen, wave and tidal energy," the announcement said, without offering further details.
The previous Conservative government pledged £1 billion in 2020 to help develop four CCS clusters by 2030, and it went further in its budget of March 2023 by pledging £20 billion of support over a 20 year period.
OPIS asked the Department of Energy Security and Net Zero last week if the new government will maintain that commitment.
"We are taking immediate action to implement our plan for clean power by 2030, while continuing to develop cutting-edge technologies like carbon capture, usage and storage, which the NAO recognises will help to decarbonise our economy," a spokesperson for DESNZ said in response.
"This technology is vital to boost our energy independence...The initial cluster projects are nearing the first financial investment decisions this year, which are expected to create jobs and bring in billions of public and private investment into our industrial heartlands," the government added.
Although Rachel Reeves, the new chancellor in charge of the UK's public finances, put a few large transport infrastructure projects on ice on Monday, there was no suggestion that the Labour party's support for CCS will change. CCS projects also command strong backing from trade unions affiliated with Labour, and several members of the new cabinet were photographed before the election visiting CCS project exhibitions at business and political conferences.
Reeves has backed the development of the technology in several public statements, noting at a business conference on February 1 this year that C-Capture -- a CCS technology company developing amine- and nitrogen-free solvents -- is located in her own Leeds West constituency and "at the frontier
of the energy transition,"
On a visit to the company's premises last year, Reeves hailed "the incredible work taking place [at the site] on carbon capture and storage. It's these types of businesses that show the huge potential we have as a region and a country to be a world leader in the industries of the future."
Reporting by Anthony Lane, alane@opisnet.com
Editing by Yazdi Merchant, ymerchant@opisnet.com
© 2024 Oil Price Information Service, LLC. All rights reserved.
Major listed solar manufacturers in China are expecting net losses for the first half of 2024 after price drops across the solar supply chain wiped out net profits made a year ago, according to company
announcements over the past week.
Longi Green Energy Technology, among the world's top three solar module sellers, is expecting a net loss of 4.8 billion yuan ($673 million) to 5.5 billion yuan for 1H-2024, a sharp reversal from the 9.18 billion yuan net profit it made a year ago.
Tongwei Solar, a major polysilicon manufacturer who is also a top five module seller, expects a net loss of 3 billion yuan to 3.3 billion yuan for 1H-2024 after having reported a net profit of 13.27 billion
yuan a year ago.
JA Solar, another top five module seller, expects a net loss of 0.8 billion to 1.2 billion yuan compared to net profit of 4.8 billion yuan over the same period.
TCL Zhonghuan, a major wafer producer that also sells modules, is expecting a net loss of 2.9 to 3.2 billion yuan for the first half of the year compared to a net profit of 4.53 billion yuan a year ago.
All four companies attributed the reversals to imbalances in supply-demand fundamentals and the resulting price falls across the solar supply chain.
JA Solar, Longi and Tongwei all noted that their module sale volumes rose sharply from a year ago but net losses were incurred nonetheless due to the severe price falls.
Prices of polysilicon in the Chinese domestic market averaged 53.528 yuan per kilogram (kg) during the first half of this year, just slightly over a third of the 180.584 yuan/kg averaged a year ago, according to OPIS data.
Prices of FOB China Mono Perc modules meanwhile averaged $0.108 per watt peak (wp) during the first half of this year, less than half the $0.227/wp a year ago.
Because supply in the market has been far outpacing demand, Longi also expects to set aside a high provision for inventory impairment.
The manufacturers did not say when they expect the market malaise to end.
But TCL and Longi said they would work on releasing new products and using advanced manufacturing methods to gain competitive advantages.
($1 = CNY 7.13)
Reporting by Hanwei Wu, hwu@opisnet.com
Editing by Chuan Ong, cong@opisnet.com
© 2024 Oil Price Information Service, LLC. All rights reserved.
OPIS assess prices for Los Angeles and San Francisco renewable diesel fuel and sustainable aviation fuel (SAF). These new assessments bring transparency to the growing renewable fuels market in the U.S. West Coast. They are based on confirmed price intelligence reported by verified market participants.
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