S&P Global Commodity Insights - Carbon Markets Daily
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Carbon Markets Daily March 14, 2023
Market Commentary and Rationale
Platts stand-alone carbon credit assessments ($/mtCO2e) Symbol Price Change Platts CEC PCECA00 2.50 0.00 Platts CNC CNCAD00 2.40 0.00 Platts Renewable Energy 2022 CNRED00 2.55 0.00 Platts Renewable Energy 2023 CNRED10 2.75 0.00 Platts Methane Collection 2022 AMECA00 3.70 0.00 Platts Methane Collection 2023 AMECB00 3.80 0.00
Platts Global Carbon Daily Commentary Platts CEC, Platts CNC stable on day amid lack of activity Prices all over the map for REDD+ credits Renewable energy credits continue to struggle A bearish trend continued to weigh on market sentiment as low demand was seen across the segments of the voluntary carbon markets. Lack of activity was also seen on the exchanges, with few trades seen in the last few days. Platts CNC, which reflects nature-based credits with a maximum volume of 20,000 mt including standardized contract such as CBL’s N-GEO, was assessed stable on the day at $2.40/mtCO2e. Platts CEC –which reflects CORSIA eligible credits with a maximum volume of 20,000 mt including standardized contracts such as CBL’s GEO and ACX’s CET –was stable on day at $2.50/mtCO2e. Platts CEC has been stable for the last nine days. It was assessed at $2.55/mtCO2e on March 1 and it has remained stable ever since. Nature-based credits Market sources struggled with visibility on spreads amid continued low market liquidity and widening spreads. “The market is still very quiet, vintage 2016 of VCS-CCB REDD+ projects is being offered between $3.50/mtCO2e to $6.00/ mtCO2e. Pick your guess,” a Europe-based trader said. Fair value for the 2016 VCS-CCB vintage year would be at around $4.00/mtCO2e, the same source said, when looking at large volumes. A broker shared an indicative premium for the 2018 vintage year towards the 2016 vintage year at $4.50/mtCO2e. In the afforestation and deforestation segment of the market, a batch of ACR certified credits sourced from the US and with a 2013 vintage were heard offered at $9.50/mtCO2e (70,000 mt). Cookstoves credits Platts heard some offers for a bunch of GS certified credits from different countries in Africa. Some 100,000 mt each of ID 5642 and ID 10790 Cookstoves credits with a 2021 vintage were heard offered at $8.30/mtCO2e from Kenya and Somalia. Some 100,000 mt of ID 5642 and ID 10790 credits with 2022 vintage were heard offered at $9.50/mtCO2e each, indicating a
Platts avoidance-based credits ($/mtCO2e) Symbol
Price
Change
3.10 3.20 6.35 6.30 2.00 3.10 3.20 7.95 8.15 -2.00
0.00 0.00
Platts CAC 2022 Platts CAC 2023
ACACA00 ACACB00 CNHDD00 AHDVA00 AHHDB00 AHHDA00 APOLA00 APOLB00 ANBAA00 ANBAB00 Symbol ACRCA00 ACRCB00 ANCCA00 ANCCB00 ATCCA00 ATCCB00
+0.10 +0.10
Platts Household Devices 2022 Platts Household Devices 2023 HHD Energy Efficiency Diff Platts Industrial Pollutants 2022 Platts Industrial Pollutants 2023 Platts Nature-Based Avoidance 2022 Platts Nature-Based Avoidance 2023 HHD LDC Diff
0.00 0.00 0.00 0.00 0.00 0.00
Platts removals-based credits ($/mtCO2e)
Price 12.50 12.80 12.50 12.80
Change
0.00 0.00 0.00 0.00 0.00 0.00
Platts CRC 2022 Platts CRC 2023
Platts Natural Carbon Capture 2022 Platts Natural Carbon Capture 2023 Platts Tech Carbon Capture 2022 Platts Tech Carbon Capture 2023
127.00 137.00
Platts low carbon assessments
Symbol AMPCA00 AMPCB00
Price 0.015 2.472
Chage 0.000 0.000
MPC Platts 0.10% Threshold ($/MPC) MPC Platts 0.10% Threshold ($/mtCO2e)
Platts-Viridios carbon credit indices ($/mtCO2e) Symbol
Price 11.54 21.88 14.80 16.56 14.54 17.39 26.25
Change
-0.14 -0.25 -0.17 -0.19 -0.18 -0.21 -0.33
Household Devices CARBEX
CBXAA00 CBXAB00 CBXAC00 CBXAD00 CBXAE00 CBXAF00 CBXAG00
Soil CARBEX
Eco Create CARBEX
Eco Create CARBEX Biodiverse
Eco Protect CARBEX
Eco Protect CARBEX Social
Blue Carbon CARBEX
Xpansiv carbon credit spot settlements ($/mtCO2e) Symbol Price
Change
2.40 2.35
0.00
GEO Spot Settlement N-GEO Spot Settlement
GEOCC00 NEOCC00 GNEOC00 ASDGA00 NEOCT00 CEOCC00 CEECC00
-0.05 -0.05 +0.05 -0.05
-0.05
GEO/N-GEO Spot Settlement Spread
6.55 2.35 0.74 0.97
SD-GEO Settlement
N-GEO Trailing Spot Settlement C-GEO Trailing Spot Settlement
0.00 0.00
C-GEO Spot Settlement
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Carbon Markets Daily
March 14, 2023
CME CBL carbon markets futures settlements ($/mt) Symbol Price
Xpansiv carbon credit spot assessments ($/mtCO2e) Symbol Price
Change
Change
2.41 2.43 2.42 2.10 2.13 2.24 2.56 2.65 2.75 0.84 0.80 0.78 0.66 0.65 0.63
+0.08 +0.07 +0.07 -0.12 -0.12 -0.12
2.45 2.40
0.00 0.00 0.00 0.00 0.00 0.00
CME CBL GEO Mo01 CME CBL GEO Mo02 CME CBL GEO Mo03 CME CBL N-GEO Mo01 CME CBL N-GEO Mo02 CME CBL N-GEO Mo03
GEO Spot 12:00 GMT N-GEO Spot 12:00 GMT
GIOCC01 GIOCC02 GIOCC03 NIOCC01 NIOCC02 NIOCC03 NIOCT01 NIOCT02 NIOCT03 CIOCC01 CIOCC02 CIOCC03 CIOCT01 CIOCT02 CIOCT03
GEOCI00 NEOCI00 GNEOI00 ASDGB00 CEOCI00 CEECI00 NEOCJ00
-0.05
GEO/N-GEO Spot 12:00 GMT Spread
6.50 0.70 0.90 2.35
SD-GEO 12:00 GMT
C-GEO Trailing Spot 12:00 GMT C-GEO Spot 12:00 GMT N-GEO Spot 16:30 London
0.00 0.00 0.00
-0.05
CME CBL N-GEO Tr Mo01 (Jul-23)* CME CBL N-GEO Tr Mo02 (Aug-23) CME CBL N-GEO Tr Mo03 (Sep-23)
CME CBL carbon credit futures assessments ($/mt) Symbol Price
+0.02 +0.02 +0.02
CME CBL C-GEO Mo01 CME CBL C-GEO Mo02 CME CBL C-GEO Mo03 CME CBL C-GEO Tr Mo01 CME CBL C-GEO Tr Mo02 CME CBL C-GEO Tr Mo03
Change
2.38 3.43 0.80 3.38
-0.04 -0.07
CME CBL GEO 12:00 GMT Nearest-December CME CBL N-GEO 12:00 GMT Nearest-December CME CBL C-GEO 12:00 GMT Nearest-December CME CBL N-GEO 16:30 London Nearest-December
GIOCE00 NIOCE00 CIOCE00 NIOCG00
0.00 0.00 0.00
0.00
-0.05
*N-GEO Trailing front month contract is Jul-23 and will expire on July 26, 2023.
Platts APAC compliance market assessments Symbol Price
Platts North America compliance market assessments March 9, 2023 Symbol Price Change CCA Next December Strip ($/alw) ARECB04 30.90 +0.78 CCO Next December Strip ($/mt) ARECC04 20.12 -0.35 California Bundled REC Bucket 1 ($/MWh) RECCAB1 21.00 0.00
Change
Australia (19:30 Canberra/ Melbourne/ Sydney)
(AUD/mtCO2e)
ACCU Generic
36.95 38.35
+0.05
ACCGA00 ACCHA00
0.00
ACCU HIR
New Zealand (19:30 Auckland/Wellington/Christchurch)
(NZD/mtCO2e)
New Zealand Emission Unit (NZU)
65.50
-0.30
ANZUA00
South Korea (13:00 Seoul)
(WON/mtCO2e)
South Korea Allowance Unit (KAU) South Korea Offset Credit (KOC)
AKAUA00 13200.00 AKAUB00 12400.00
+100.00
0.00
Platts EMEA compliance market assessments Symbol Price
Change
Symbol
Price Change
(Eur/mt)
(GBP/mt)
UK Allowances Nearest-December UK Allowances Nearest-December +1 UK Allowances Nearest-December +2 EU Allowances Nearest-December EU Allowances Nearest-December +1 EU Allowances Nearest-December +2
90.57 96.85
-3.41 -3.40 -3.39 -3.00 -3.03 -3.03
79.90 85.44 92.54
-3.11 -3.11 -3.11
AIDUK00 AIDUK11 AIDUK22 EADLP00 EADLP11 EADLP22
AIEUK00 AIEUK11 AIEUK22
104.90
92.68 97.27
102.28
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Carbon Markets Daily
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© 2023 by S&P Global Inc. All rights reserved.
Carbon Markets Daily
March 14, 2023
Heards
March 14 before close PLATTS CARBON: [heard 1000 GMT]: ACX’s CET spot contract heard 5k bid at $2.40/tCO2e; PLATTS CARBON: [heard 1000 GMT]: ACX’s CET spot contract heard 3k offered at $2.55/tCO2e; PLATTS CARBON: [heard 1000 GMT]: ACX’s GNA spot contract heard 2k bid at $1.45/tCO2e; PLATTS CARBON: [heard 1000 GMT]: ACX’s GNA spot contract heard 2k offered at $1.95/tCO2e; PLATTS CARBON: [heard 1000 GMT]: ACX’s GNB spot contract heard 1k offered at $6.10/tCO2e; PLATTS CARBON: [heard 1000 GMT]: ACX’s GN6 spot contract heard 2k offered at $5.05/tCO2e; PLATTS CARBON: [heard 1000 GMT]: ACX’s GN7 spot contract heard 2k offered at $5.75/tCO2e; PLATTS CARBON: [heard 1000 GMT]: ACX’s HOT spot contract heard 1k offered at $8.00/tCO2e; PLATTS CARBON: [heard 1000 GMT]: ACX’s GER spot contract heard 1k bid at $2.50/tCO2e; PLATTS CARBON: [heard 1000 GMT]: ACX’s GER spot contract heard 1k offered at $3.83/tCO2e; PLATTS CARBON: [heard 1100 GMT]: Xpansiv CBL’s GEO spot contract heard 2,000 t bid at $2.30/t; PLATTS CARBON: [heard 1100 GMT]: Xpansiv CBL’s GEO spot contract heard 2,000 t offered at $2.55/t; PLATTS CARBON: [heard 1100 GMT]: Xpansiv CBL’s N-GEO spot contract heard 1,000 t bid at $2.20/t; PLATTS CARBON: [heard 1100 GMT]: Xpansiv CBL’s N-GEO spot contract heard 1,000 t offered at $2.45/t; PLATTS CARBON: [heard 1100 GMT]: Xpansiv CBL’s C-GEO-TR spot contract heard 1,000 t bid at $0.50/t; PLATTS CARBON: [heard 1100 GMT]: Xpansiv CBL’s C-GEO-TR spot contract heard 1,000 t offered at $1.50/t; PLATTS CARBON: [heard 1100 GMT]: Xpansiv CBL’s C-GEO spot contract heard 2,000 t bid at $0.75/t; PLATTS CARBON: [heard 1100 GMT]: Xpansiv CBL’s C-GEO spot contract heard 2,000 t offered at $1.00/t; PLATTS CARBON: [heard before close]: GS certified Household Devices (Cookstoves) credits heard 25,000 mt offered at $10.75/mtCO2e; vintage: 2020; delivery: 2023; co-benefits: 3, 13, 15; region: Uganda; source: broker; PLATTS CARBON: [heard before close]: GS certified Household Devices 5642 (Cookstoves) credits heard 100k offered $8.30/mtCO2e; vintage: 2021; delivery: 2023; co-benefits: 1, 3, 8, 13; region: Kenya; source: broker; PLATTS CARBON: [heard before market close]: GS certified Household Devices (Cookstoves) ID 10790 credits 100,000 mt heard offered $8.30/mtCO2e; vintage: 2021; delivery: 2023; co-benefits: 1, 3, 7, 8, 13; region: Somalia; source: broker; PLATTS CARBON: [heard before close]: GS certified Household Devices 5642 (Cookstoves) credits heard 100k offered $9.50/mtCO2e; vintage: 2022; delivery: 2023; co-benefits: 1, 3, 8, 13; region: Kenya; source: broker; PLATTS CARBON: [heard before market close]: GS certified Household Devices (Cookstoves) ID 10790 credits 100,000 mt heard offered $9.50/mtCO2e; vintage: 2022; delivery: 2023; co-benefits: 1, 3, 7, 8, 13; region: Somalia; source: broker; PLATTS CARBON: [heard before market close]: GS certified Household Devices (Cookstoves) ID 4539 credits 300,000 mt heard offered $7.90/mtCO2e; vintage: 2020-2022; delivery: Forward; co-benefits: 3, 13, 15; region: Malawi; source: broker; PLATTS CARBON: [heard before market close]: GS certified Household Devices (Cookstoves) ID 2094 credits 90,000 mt heard offered $7.75/mtCO2e; vintage: 2021; delivery: Forward; co-benefits:1, 3, 7, 8, 13; region: Ghana; source: broker; PLATTS CARBON: [heard before market close]: VCS certified Renewable Energy (Wind) credits 50,000 mt heard bid at $2.10/mtCO2e; vintage: 2018+; delivery: 2023; co-benefits: unspecified; region: India; source: trader; PLATTS CARBON: [heard before market close]: VCS certified Renewable Energy (Wind) credits 50,000 mt heard offered at $2.60/mtCO2e; vintage: 2018+; delivery: 2023; co-benefits: unspecified; region: India; source: trader; PLATTS CARBON: CDM certified Renewable Energy (Hydro) credits heard 330,872 mt traded at $1.15/mtCO2e; vintage: CP2; delivery: 2023; co-benefits: unspecified; region: Vietnam; source: broker; PLATTS CARBON: VCS-CCB Triple Gold certified REDD+ ID 1477 (Katingan) credits heard 25k offered at $9.25/mtCO2e; vintage: 2019; delivery: 2023; co-benefits: 13, 15, 17, 1, 3, 5, 6, 8, 16; region: Indonesia; source: broker; PLATTS CARBON: VCS-CCB certified REDD+ ID 934 (Mai Ndombe) credits heard 25k bid at $7.25/mtCO2e; vintage: 2019; delivery: 2023; co-benefits: 8, 9, 10, 13, 15; region: DRC; source: broker; PLATTS CARBON: VCS-CCB certified REDD+ ID 934 (Mai Ndombe) credits heard 25k offered at $9.00/mtCO2e; vintage: 2019; delivery: 2023; co-benefits: 8, 9, 10, 13, 15; region: DRC; source: broker; PLATTS CARBON: VCS-CCB Triple Gold certified REDD+ ID 1477 (Katingan) credits heard 25k bid at $4.50/mtCO2e; vintage: 2017; delivery: 2023; co-benefits: 13, 15, 17, 1, 3, 5, 6, 8, 16; region: Indonesia; source: broker; PLATTS CARBON: VCS-CCB Triple Gold certified REDD+ ID 1477 (Katingan) credits heard 25k offered at $6.25/mtCO2e; vintage: 2017; delivery: 2023; co-benefits: 13, 15, 17, 1, 3, 5, 6, 8, 16; region: Indonesia; source: broker; PLATTS CARBON: VCS certified Afforestation ID 2361 (Forestal San Pedro) credits heard 15k offered at $6.15/mtCO2e; vintage: 2016; delivery: 2023; co-benefits: unspecified; region: Paraguay; source: broker; PLATTS CARBON: VCS-CCB certified REDD+ ID 1650 (Keo Seima) credits heard 25k offer at $4.75/mtCO2e; vintage: 2017; delivery: 2023; co-benefits: 1, 2, 3, 6, 8, 13, 15; region: Cambodia; source: broker; PLATTS CARBON: VCS-CCB Triple Gold certified REDD+ ID 1477 (Katingan) credits heard 31k offered at $4.75/mtCO2e; vintage: 2016; delivery: 2023; co-benefits: 13, 15, 17, 1, 3, 5, 6, 8, 16; region: Indonesia; source: broker; PLATTS CARBON: VCS-CCB certified Afforestation ID 959 (Guanare) credits heard 49k offered at $3.80/mtCO2e; vintage: 2013; delivery: 2023; co-benefits: unspecified; region: Uruguay; source: broker; PLATTS CARBON: VCS-CCB certified REDD+ ID 981 (Pacajai) credits heard 75k offer at $3.80/mtCO2e; vintage: 2017; delivery: 2023; co-benefits: 8, 13, 15; region: Brazil; source: broker; PLATTS CARBON: VCS-CCB certified REDD+ ID 981 (Pacajai) credits heard 85k offer at $3.40/mtCO2e; vintage: 2016; delivery: 2023; co-benefits: 8, 13, 15; region: Brazil; source: broker; PLATTS CARBON: VCS certified CORSIA eligible Methane Collection ID 2605 (Landfill Gas) credits heard 400k offer at $3.90/mtCO2e; vintage: 2019-2020; delivery: 2023; co-benefits: unspecified; region: Turkey; source: broker; PLATTS CARBON: VCS certified CORSIA eligible Renewable Energy ID 1792 (Solar) credits heard 70k bid at $2.35/mtCO2e; vintage: 2019; delivery: 2023; co-benefits: unspecified; region: India; source: broker; PLATTS CARBON: VCS certified CORSIA eligible Renewable Energy ID 1792 (Solar) credits offered 70k offer at $2.75/mtCO2e; vintage: 2019; delivery: 2023; co-benefits: unspecified; region: India; source: broker;
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Carbon Markets Daily
March 14, 2023
PLATTS CARBON: VCS certified Renewable Energy ID 1200 (Wind) credits offered 50k bid at $2.20/mtCO2e; vintage: 2017; delivery: 2023; co-benefits: unspecified; region: China; source: broker; PLATTS CARBON: VCS certified Renewable Energy ID 1351 (Biomass) credits offered 82k bid at $2.00/mtCO2e; vintage: 2019-2021; delivery: 2023; co-benefits: unspecified; region: India; source: broker; PLATTS CARBON: GS certified Renewable Energy ID 7468 (Wind) credits heard 43k bid at $2.95/mtCO2e; vintage: 2021; delivery: 2023; co-benefits: unspecified; region: India; source: broker; PLATTS CARBON: GS certified Renewable Energy ID 7468 (Wind) credits heard 43k offered at $3.20/mtCO2e; vintage: 2021; delivery: 2023; co-benefits: unspecified; region: India; source: broker; PLATTS CARBON: ACR certified Afforestation/Reforestation ID 114 (Green Trees) credits heard 70k offered at $9.50/mtCO2e; vintage: 2013; delivery: 2023; co-benefits: unspecified; region: USA; source: broker; PLATTS CARBON: VCS-CCB Gold certified REDD+ ID 1748 (Southern Cardamom) heard vintage 2018 at a $4.50/mtCO2e premium towards 2016 vintage; source: broker; PLATTS CARBON: VCS-CCB certified REDD+ credits heard indicative value for large volumes at $4.00/mtCO2e; vintage: 2016; delivery: 2023; co-benefits: unspecified; region: unspecified; source: trader; PLATTS CARBON: VCS-CCB certified REDD+ credits heard indicative value for large volumes at $9.00/mtCO2e; vintage: 2018; delivery: 2023; co-benefits: unspecified; region: unspecified; source: trader;
PLATTS CARBON: [heard 1200 GMT]: Xpansiv CBL’s GEO spot contract heard 2,000 t bid at $2.30/t; PLATTS CARBON: [heard 1200 GMT]: Xpansiv CBL’s GEO spot contract heard 2,000 t offered at $2.55/t; PLATTS CARBON: [heard 1200 GMT]: Xpansiv CBL’s N-GEO spot contract heard 1,000 t bid at $2.20/t; PLATTS CARBON: [heard 1200 GMT]: Xpansiv CBL’s N-GEO spot contract heard 1,000 t offered at $2.45/t; PLATTS CARBON: [heard 1200 GMT]: Xpansiv CBL’s C-GEO-TR spot contract heard 1,000 t bid at $0.50/t; PLATTS CARBON: [heard 1200 GMT]: Xpansiv CBL’s C-GEO-TR spot contract heard 1,000 t offered at $1.50/t; PLATTS CARBON: [heard 1200 GMT]: Xpansiv CBL’s C-GEO spot contract heard 2,000 t bid at $0.75/t; PLATTS CARBON: [heard 1200 GMT]: Xpansiv CBL’s C-GEO spot contract heard 2,000 t offered at $1.00/t;
Platts Carbon Rationale This rationale is relevant for assessments in the CBN market data category: The Platts CEC price was assessed stable on the day March 14. CBL’s GEO spot contract was heard bid and offered in the $2.30-$2.55/mtCO2e range, with 2,000 mt on each side. ACX’s CET spot contract was heard bid and offered in the $2.40- $2.55/tCO2e range with 5,000 mt and 3,000 mt on each side, respectively. The Platts CNC price was assessed stable on the day. The Xpansiv CBL’s N-GEO spot contract was heard bid and offered in the $2.20-$2.45/mt range with 2,000 mt and 1,000 mt on each side, respectively. ACX’s GN7 contract was heard offered at $5.75/mtCO2e for 2,000 mt. Platts Renewable Energy Current Year (CY) was assessed stable on the day. Platts heard about 25,000 mt GS-certified ID 7468 wind credits traded at $2.95/mtCO2e with 2020 vintage from India. It had heard earlier that GS-certified credits were at a $1/mtCO2e premium over VCS credits. About 43,000 mt Wind ID 7468 credits were offered at $3.20/mtCO2e with a 2021 vintage. The prices were quite low for GS-certified credits. An India-based source said that the owner was selling these credits at $3.90/mtCO2e and maybe some intermediary was selling them at lower levels to cut some losses. Platts also heard about 50,000 mt VCS-certified wind credits bid at $2.10/mtCO2e and offered at $2.60/mtCO2e with a 2018+ vintage from India. About 70,000 mt of solar credits ID 1792 were heard bid and offered in the range of $2.35/mtCO2e-$2.75/mtCO2e with a 2019 vintage. Sources said that prices of VCS-certified credits were falling further while GS was holding stable. Platts Methane Collection CY was assessed stable on the day, after Platts heard some 400,000 mt VCS-certified credits from Turkey were offered at $3.90/mtCO2e with 2019-2020 vintage.
$1.20/mtCO2e premium between 2021 and 2022 vintage credits. Platts had earlier heard that African credits were at a $1.75/mtCO2e premium over Indian ones. Some forward delivery prices were also heard March 14. Cookstoves credits with ID 4539 and ID 2094 were heard offered at $7.90/mtCO2e and $7.75/mtCO2e, respectively, with 300,000 mt and 90,000 mt volumes. ID 4539 has a 2020-2022 vintage, while ID 2094 has 2021 vintage. Offer prices for the forward delivery were lower than that for the spot markets, indicating they were still being offered at a discount. A Singapore-based source said most forward contracts were priced lower because of the risk. Delay in issuances, which has been a usual case in recent times, also adds to the discount, the source said. Weakness in renewables Bearishness continued in the renewable energy segment, with an India-based trader seeing zero demand. Some 43,000 mt Wind ID 7468 credits were offered at $3.20/mtCO2e with a 2021 vintage. The prices were quite low for GS certified credits. The trader said the owner was selling these credits at $3.90/mtCO2e and this offer might be from some intermediary selling the credits at lower levels to cut losses. Platts had heard earlier that GS certified credits were at a $1/mtCO2e premium over VCS credits. Platts also heard some 50,000 mt VCS certified wind credits bid at $2.10/mtCO2e and offered at $2.60/mtCO2e with a 2018+ vintage from India. Some 70,000 mt solar credits ID 1792 credits were heard bid and offered in the range of $2.35/mtCO2e- $2.75/mtCO2e with a 2019 vintage. The source said prices of VCS certified credits were falling further, while GS was holding stable. —Kanchan Yadav, Silvia Favasuli
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© 2023 by S&P Global Inc. All rights reserved.
Carbon Markets Daily
March 14, 2023
Platts Industrial Pollutants CY was assessed stable on the day, following the movement in Platts Renewable Energy CY and Platts Methane Collection CY. The Platts Nature-Based Avoidance Current Year price was assessed stable on the day. About 25,000 mt VCS-CCB REDD+ ID 934 Mai Ndombe credits were heard bid at $7.25/mtCO2e and offered at $9.00/mtCO2e with a 2019 vintage. Platts had earlier heard that 2019 vintage credits were at a premium of $1-$1.05/ mtCO2e over 2018 vintage credits. It had also heard that VCS-CCB Gold certified REDD+ ID 1748 (Southern Cardamom) credits with vintage 2018 were at a premium of $4.50/mtCO2e toward the 2016 vintage. Platts also heard an indicative value for large volume VCS CCB certified REDD+ credits at $9.00/mtCO2e with a 2018 vintage. Platts Natural Carbon Capture was assessed stable on the day amid a lack of market activity. Platts Household Devices CY was assessed higher on the day. About 100,000 mt each of ID 5642 and ID 10790 Cookstoves credits with a 2021 vintage were heard offered at $8.30/mtCO2e from Kenya and Somalia. Platts had earlier heard that African credits were at a $1.75/mtCO2e premium over Indian ones. Platts is part of S&P Global Commodity Insights. Platts Americas MPC Daily Rationale Platts assessed the value of a Methane Performance Certificate on March 14 at 1.5 cents/MPC, unchanged on the day. Platts assessed Methane Collection credits unchanged on the day at $3.70/mtCO2e. Platts assessed CORSIA-eligible credits, or CEC, unchanged on the day at $2.50/mtCO2e. This rationale is relevant for assessments in the MPC market data category. This rationale applies to symbols
and biodiversity: the pensions imperative”. “This could set quality standards that corporations looking to do the right thing could trust, enabling them to allocate money with confidence in these offsets having additionality and really delivering on those climate and nature goals,” it added. Many of the UK’s pension schemes are looking to increase their involvement in the environmental, social and governance sector, and to reduce their exposure to oil and gas companies. In its report, Scottish Widows also said pension funds can lead the way on investment in projects that protect nature and wildlife. The financing gap for nature preservation projects can be reduced via voluntary corporate actions with money flowing into areas like peatland and soil restoration, forest and ocean conservation, it added. “Demand for good quality carbon offsets will only continue to grow and if these offsets are structured with nature-related co-benefits, then this becomes a win-win, helping to secure both decarbonization and nature preservation,” the report said. Credibility issues VCMs are currently facing questions about credibility. The efficacy of some carbon credits, especially nature-based offsets, have recently come under fire from media and academics questioning whether the programs represent genuine carbon reductions. This market is also undergoing a significant transition, with a suite of integrity and quality initiatives, expected to be announced in the coming months. The Integrity Council for the Voluntary Carbon Market will introduce high-integrity carbon credit labels in the third quarter of 2023, and it will publish its final Core Carbon Principles (CCPs) in March to create a more transparent, liquid, high integrity voluntary carbon market. Meanwhile, the Voluntary Carbon Markets Integrity Initiative (VCMI) is reworking a draft consultation aimed at bringing integrity to corporate claims made about the use of carbon credits. This intense scrutiny had a major impact on prices of and demand for nature-based carbon offsets, but the market has been recovering in recent weeks. Platts CNC, an assessment that reflects the most competitive nature-based carbon credit prices, was assessed at $2.40/mtCO2e March 14, up from the all-time low of $1.70/mtC02e Feb. 3. Platts CNC averaged $9.55/mtC02e in 2022, according to data from S&P Global Commodity Insights. —Eklavya Gupte Barriers remain to commercial CCS rollout in Europe, despite high carbon prices Economic models, tech risk present obstacles Some CCS projects clear with Eur100/mt CO2 price Only 30% of compliance CO2 price seen as bankable Carbon capture and storage developers say they still require state support to get projects up and running, despite record-high
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Carbon Markets Daily
March 14, 2023
“The likes of Shell and SSE have said that delivering the business models through primary legislation is ‘a matter of urgency’,” the review said in its Mission Zero report. “On power CCUS there is a particular ‘lack of clarity on market design’ according to BP, with uncertainty as to how the Dispatchable Power Agreement (DPA) will fit into future electricity markets being developed under government’s Review of Electricity Market arrangements (REMA).” “Delays will create uncertainty for developers and investors, increasing the cost of investment,” Storegga told the review.
carbon prices that now cover much of the cost of the process, because of risks posed by relatively immature technology, a lack of an established economic model and the early stage of industry development. The EU Emissions Trading System carbon price breached Eur100/mt for the first time on Feb. 21, and has remained at elevated levels, assessed at Eur95.68/mt ($102.49/mt) on March 13, according to Platts assessments from S&P Global Commodity Insights. The UK carbon price under its Emissions Trading Scheme was assessed at GBP83.01/mt CO2e (Eur93.98/mt, $100.95/mt) March 13. Transport and storage costs for CO2 are in the region of $10- $20/mt (Eur9-19/mt), while capture costs vary widely depending on the sector, Storegga CFO Michael Alsford told S&P Global on the sidelines of International Energy Week March 1. Other project developers gave indications of capture costs in the region of $30-$40/mt CO2, while the International Energy Agency shows higher costs in industries with lower concentrations of CO2 emissions. However, while CO2 prices in Europe appear on paper to cover capture and storage costs, other barriers remain. “There are quite a few challenges and things that need to come together in order for this whole sector to move forward and establish itself, and one of those is getting the economic model right, but it’s not the only thing,” Ro Lazarovitch, projects lawyer at Bracewell, told S&P Global in an interview March 13. “When I look at the whole CCS sector, I’m thinking to myself, here we are trying to create a new industry from scratch,” he said. “If you look at established industries like the global LNG trade, that has its roots in the 1980s and earlier, and that took a really long time to get to the mature market we have today.” Business model support Building an industry on such a scale would take much longer without state support, Lazarovitch said, noting that business models were needed to develop both sides of the market —capturing industrial emissions, and the storage side—simultaneously. Storage hubs need to know they will have the CO2 supplied to them from when the facilities start operating, and industrial emitters likewise need guarantees there will be somewhere to put the captured CO2, he said. Linda Cook, CEO of Harbour Energy, which is leading the Viking CCS project in the UK, said the system itself didn’t need government funding, but the associated emitters did. “What we need is the regulatory framework… because at least part of our project will be regulated in terms of what we can charge, so we need to understand how that model is going to work,” Cook said on an investor call earlier in March. “We need the government to assign… the emitters who have indicated support for our project to our project. Then we need the long-term government commitment around the long-term liability related to the storage.” A review of the UK government’s net-zero strategy carried out in 2022 pointed to an urgent need to bring forward legislation for CCS projects.
Technology risk A further barrier is technology risk at the early stage of market development, Lazarovitch said. There are few commercial-scale plants in operation, and some, such as Chevron’s Gorgon project in Australia have run into regulatory difficulties. The CCUS project associated with the company’s LNG facility, one of the largest CCUS projects in the world, fell short of five-year capture goals, driven by delays in commissioning and start-up constraints, exposing Chevron and its partners Shell and ExxonMobil to liabilities for the shortfall, S&P Global reported in 2021. Lazarovitch said a further issue arises from contractual obligations, which financiers would be very alert to. The solution lies in equity, using proven technology or manufacturer guarantees, all of which make projects more expensive and complicate financing arrangements, he said. Furthermore, the sector is at what Lazarovitch called the “exploration” stage, with many developers scoping feasibility, with desktop studies and geological surveys, all of which will take time, and are not guaranteed to lead to project development. Carbon price discount And while some CCS projects would clear with a carbon price of Eur100/mt, Storegga’s Alsford said, Lazarovitch noted lenders are not so keen on merchant-based financing arrangements at present. “If you’re looking to project finance something like this, as a lender, what you want to see is robust support around the technology,” he said. “You want to see pre-committed contracts, and you probably want to see floor pricing.”
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Carbon Markets Daily
March 14, 2023
identified and added to the program each year. According to data shared by Altayyar, 700-plus million people in Africa depend on solid fuels like wood, coal or biomass for cooking. The program has already started discussions to explore potential collaborations with Asian countries including India and Thailand. —Silvia Favasuli CARBON AUCTION: EU sells 2.409 million CO2 allowances at Eur92.34/mtCO2e Seller: 25 EU member states plus three non-members Cleared price: Eur92.34/mt CO2 equivalent ($98.89/mt) Minimum/maximum bid: Eur81.30-105/mtCO2e Cover ratio (YTD average): 1.16 (2.00) Total bidders (successful): 21 (18) Platform: European Energy Exchange, Germany Notes: Cleared price falls to Eur92.34/mtCO2e on March 14 from Eur94.36/mtCO2e on March 13. —Eklavya Gupte Revenue: Eur222.447 million Volume: 2.409 million mtCO2e Total bids received: 2.806 million mtCO2e Farms can earn credits by becoming more sustainable Soil carbon projects aim to store carbon through improved practices Hedge fund Hedonova has invested $16 million in soil carbon startup Carbonomy, which enables farms to earn carbon credits by adopting sustainable practices, the companies said in a statement March 13. Soil carbon projects aim to store additional carbon in agricultural soil, through activities including improving fertilizer application, re-establishing pasture or modifying grazing practices. This investment is part of Carbonomy’s Series A funding round at a valuation of $130 million. Carbonomy provides a platform that enables farms to earn carbon credits by adopting sustainable practices such as reducing the use of fertilizers and pesticides, improving soil health, and implementing renewable energy solutions. “These credits can then be sold to companies and organizations that want to offset their carbon footprint and achieve their sustainability goals,” the statement added. This investment is part Hedonova’s broader strategy to support its agricultural investment portfolio. “We are excited to support Carbonomy’s mission to help farms become more sustainable and increase their revenue. This investment will be… used to service our current and new agri investments by helping them earn carbon credits,” Hedonova Ceo Hedonova invests $16 million in soil carbon startup Carbonomy
Most counterparties would want take-or-pay, or deliver-or-pay, contracts, he added. Again, referring to the LNG sector, Lazarovitch said it was only relatively recently that the industry was financed on a merchant model. Prior to the market maturing, projects would secure financing on the basis of pre-sold volumes and a floor price, he noted. Alsford said some banks were interested in financing CCS projects, looking at arrangements on a contract-for-difference basis against UK or EU ETS prices over a period of around 10 years. And Lazarovitch said there was plenty of interest in the sectors, from both established big oil and gas companies through to venture capital-backed startups, though the larger companies tended to make headlines, being able to deploy large sums of money upfront. However, another problem is the hefty discounting of today’s carbon prices by financiers, Carbon Capture and Storage Association CEO told S&P Global. “The challenge is convincing financiers to invest capital,” she said at IE Week March 1. “They do not quite trust the carbon price or politicians.” Only around 30% of the compliance carbon price is seen as bankable by financiers looking at long-term CCS commitments, she said. —James Burgess Saudi Oil Sustainability Program to boost LPG distribution for cookstoves in Africa LPG and LPG-fueled cookstoves facilities to be sold in urban areas OSP to build off grid solar power generation and electrical cookstoves in rural areas OSP started implementation of the program in Madagascar, Nigeria and Ghana Saudi Arabia’s Oil Sustainability Program aims to build the infrastructure needed to help distribute LPG across the African continent to replace biomass and charcoal cookstoves, one of the program’s director said. Together with setting up facilities for the supply of LPG and supporting the adoption of an ad hoc regulatory landscape, the program will also make affordable LPG cooking kits available in urban areas, Mohammad Altayyar told delegates at the ARDA 2023 conference in Cape Town. While LPG-fueled cookstoves will mostly be introduced in urban areas, the program aims to provide off-grid solar power generation in rural areas and to support the installation of electrical cookstoves, Altayyar said. The program started engaging with key stakeholders in Q4 2022, including the African Energy Chamber (ARDA) and the governments of Gnana, Niger and Senegal. The program kicked off implementation of the project in 2022 in Ghana, Madagascar and Nigeria. New countries will be
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Carbon Markets Daily
March 14, 2023
Alexander Cavendish said. Platts, part of S&P Global Commodity Insights, assessed natural carbon capture credit prices at $12.80/mtCO2e on March 13, which compares with an all-time high of $22.90/mtCO2e on Feb. 1, 2022. European Parliament formally backs three key climate bills, part of Fit for 55 package Parliament agrees on extension of Market Stability Reserve up to 2030 Approval of EU’s commitment to cut emissions to 40% from 2005 levels Prices for EU carbon permits remain at high levels, just below Eur100/mt The European Parliament formally approved a raft of climate reforms March 14 after the EU had provisionally agreed on them late last year as part of its Fit for 55 package. The Parliament agreed to extend the Market Stability Reserve of the EU Emissions Trading System to 2030, which is in place to protect against falling CO2 prices due to external shocks. “This means that at least 24% of the market surplus should be put in the market stability reserve and a minimum of 200 million allowances until 31 December 2030,” the European Parliament said in a statement. “From 1 January 2031 onwards the intake rate would fall to 12% and the minimum number of allowances to 100 million.” The MSR was established in 2015 to address the structural imbalance between the supply of and demand for allowances in the EU ETS. “Ensuring a strong emissions trading system will lower our dependence on fossil fuels and on Russia,” said Cyrus Engerer, a Maltese Member of the European Parliament. “We need to accelerate our transition to renewables and to work towards energy sovereignty.” In mid-December, negotiators agreed to reform the EU’s Emissions Trading System, increasing carbon cutting ambitions to 2030, detailing the removal of free allowances and introducing new carbon pricing mechanisms. More targets The Parliament also approved a bill that calls for EU countries to reduce greenhouse gas emissions from 30% to 40% compared with 2005 levels. This bill sets binding annual reductions for greenhouse gas emissions for road transport, heating of buildings, agriculture, small industrial installations and waste management for each EU member state and currently regulates roughly 60% of all EU emissions. “For the first time, all EU countries must now reduce GHG emissions with targets ranging between 10 and 50%,” the statement said. Thirdly, the Parliament approved a law that raises the EU —Eklavya Gupte
carbon sinks target for the land use and forestry sector by 15%. “The EU 2030 target for net greenhouse gas removals in the land, land use change and forestry sector will be set at 310 million mtCO2e…” the statement said. “This new EU target should reduce the EU’s GHGs in 2030 further from 55% to around 57% compared to 1990-levels.” Member states will be allowed to purchase or sell removal credits between land use, land use change and forestry sector (LULUCF) and the Effort Sharing Regulation to reach their targets. The Effort Sharing Regulation is part of the Fit for 55 in 2030 package. High carbon prices The main purpose of the ETS is to reduce GHG emissions and carbon intensity to meet their net-zero targets, which includes a commitment to reduce net emissions by 55% by 2030. The EU’s ETS cap and trade system places a limit on the level of emissions covered by different sectors. It includes around 45% of the bloc’s total greenhouse gas emissions. The cap declines each year to guarantee emissions fall over time. Companies can buy and sell carbon permits known as EU Allowances, which can be traded for the CO2 they emit. EU Allowances, carbon permits under the EU ETS, recently hit record highs above Eur100/mtCO2e ($105/mtCO2e), attributed to technical signals and strong financial investor interest, along with the tightening of rules of the bloc’s key climate policies, especially under its ETS. December 2023 EU Allowances, which hit Eur101.16/mtCO2e on Feb. 21, have eased back to trade in a Eur93-98/mtCO2e range in early March. Platts, part of S&P Global Commodity Insights, assessed EU Allowances for December 2023 at Eur95.68/mtCO2e on March 13. —Eklavya Gupte Subscriber Notes Platts moves annual roll for reflected vintages in Voluntary Carbon Credit Assessments to first working day of Q3 Platts, part of S&P Global Commodity Insights, has amended the annual roll for the vintages reflected in its Voluntary Carbon Credit assessments to the first working day of Q3 from the start of 2023. A proposal published Oct. 21 is available here: https://www. spglobal.com/commodityinsights/en/our-methodology/ subscriber-notes/102122-platts-proposes-to-move-the-annual roll-for-reflected-vintages-to-first-working-day-of-q3. The decision note published Nov. 30 is available here: https:// www.spglobal.com/commodityinsights/en/our-methodology/ subscriber-notes/113022-platts-to-move-annual-roll-for reflected-vintages-in-voluntary-carbon-credit-assessments-to first-working-day-of-q3 Previously, Platts methodology rolled on the first working day of the new year, with all assessments reflecting new vintages. For example, under the previous methodology, the Platts Household Devices assessment reflected vintages from the last
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© 2023 by S&P Global Inc. All rights reserved.
Carbon Markets Daily
March 14, 2023
Unit: Australian dollars per metric ton of carbon dioxide equivalent (AUD/mtCO2e) Volume: 1,000 mtCO2e to 100,000 mtCO2e New Zealand Carbon Credit Units Platts has begun publishing a daily New Zealand Unit price assessment. NZUs are issued by the New Zealand government to participants under its Emissions Trading Scheme. The government auctions certain proportion of NZUs quarterly to ETS participants and allocates some of them freely to certain industrial entities. The government also issues NZUs to forestry project developers under a legislated methodology for sequestering carbon. The daily Platts assessment will reflect the following: Time Stamp: 19:30 Auckland/Wellington/Christchurch Unit: New Zealand dollars per metric ton of carbon dioxide equivalent (NZD/mtCO2e) Volume: 1,000 mtCO2e to 100,000 mtCO2e Both ACCUs and NZUs do not have an expiry date and can be held by the market participants in line with the respective country’s financial laws. Platts spot market assessments do not include a specific vintage, but will include the most competitive contracts available. These assessments are published in Platts Carbon Markets Daily, on Platts Carbon Markets Alert and Energy Transition Alert, and in the Platts Pricing Database under the following codes: Assessment Daily Code Monthly Code Currency ACCU Generic ACCGA00 ACCGA03 AUD ACCU HIR ACCHA00 ACCHA03 AUD NZU ANZUA00 ANZUA03 NZD Platts will publish these assessments in line with the APAC Carbon publishing calendar. More details about the publication schedule can be found here: https://www.spglobal.com/ commodityinsights/en/our-methodology/holiday platts_carbon@spglobal.com and pricegroup@spglobal.com. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request. Platts begins publication of Korean Allowance Unit and Korean Offset Credit Carbon Assessments Platts, part of S&P Global Commodity Insights has started publishing new Korean Allowance Unit (KAU) and Korean Offset Credit (KOC) Carbon Markets assessments from March 1, 2023. A proposal was published Jan. 30 and available here: Please send all questions and feedback to AsiaComplianceCarbon@spglobal.com ,
four years, including the current year, which would have been 2020-2023 on Jan. 3, 2023. Under the methodology change, Platts will instead update the vintages reflected from July 3, 2023. In the above example, Platts Household Devices will continue to reflect vintages from 2019 to 2022 on Jan. 3 and only roll to reflect vintages from 2020 to 2023 on July 3, 2023. The methodology change has been made following research as well as market feedback, which found that credits reflecting current year vintage were not available for most product types until later in the calendar year, following the verification of individual project emissions data. While credits for current year vintages for some project types are available promptly into the new year—Renewable Energy and Methane Collection, for example — current year vintage credits from other types of projects —Agriculture, Forestry & Land Use (AFOLU) and Household Devices projects, for example — typically take longer to verify. Please send any further feedback to platts_carbon@spglobal.com and pricegroup@spglobal.com. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts launches Australian and New Zealand carbon credit assessments Platts, part of S&P Global Commodity Insights, has begun publishing new daily assessments for Australian Carbon Credits Units (ACCUs) and New Zealand Units, (NZUs) effective March 1. These daily spot market assessments reflect the most competitively priced bids, offers and trades as reported in either the Platts Market on Close assessment process, in the brokered market, or on trading and exchange platforms. Australian Carbon Credit Units Platts has begun publishing two new daily price assessments covering the Australian Carbon Credit Unit market: Generic ACCUs and Human-Induced Regeneration ACCUs. ACCUs are issued by Australia’s Clean Energy Regulator to carbon project developers based on legislated methodologies. They are used to offset emissions by liable entities under Australia’s Safeguard Mechanism scheme and can also be used to offset additional emissions on a voluntary basis. Generic ACCUs represent credits issued for avoidance-based methods such as avoided deforestation, landfill and alternative waste treatment and energy efficiency methods. Human-Induced regeneration, or HIR ACCUs are generated from projects that store carbon by establishing and maintaining permanent native forests through assisted regeneration in the form of activities such as livestock and grazing management. The daily Platts assessments will reflect the following: Time Stamp: 19:30 Melbourne/Sydney/Canberra time
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