S&P Global Commodity Insights - Carbon Markets Daily

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

7

© 2023 by S&P Global Inc. All rights reserved.