S&P Global Commodity Insights Weekly ET News Highlights – February 27, 2023

The US Department of Interior proposed the first-ever offshore wind power lease sale in the Gulf of Mexico Feb. 22, an early step in the process of utilizing the Gulf to help meet the Biden administration's goal of installing 30 GW of offshore wind power by 2030. The proposed lease sale follows the department's approval of two others in offshore New York and offshore California. As the administration seeks to tap more offshore wind resources, investments in the offshore market tripled year-over-year to $9.8 billion in 2022, according to the Feb. 21 US Offshore Wind Market Report. While most investments were driven by lease auction fees, more than $4.4 billion was directed to port infrastructure, supply chain development and transmission.

In Asia Pacific, the India government has issued a list of carbon credit types eligible for cross-border trading under Article 6 of the Paris Agreement, with the aim of attracting foreign capital to costly innovative green technologies. Meanwhile Indonesia's long-awaited national carbon market has been officially launched, covering 42 companies operating 99 coal-fired power plants with installed capacity of 34 GW, while New Zealand's carbon credit price fell to a 14-month low after the government set a new floor price for the instrument. Finally Japanese city gas utilities intend to introduce a framework of "clean gas certificates" for e-methane and biogas in fiscal year 2024-25 as part of accelerating efforts toward carbon neutrality. In an initial phase the certificates are to be issued to clean gas produced domestically.

European carbon prices breached Eur100/mt for the first time ever, a significant milestone and a level that analysts say will drive further decarbonization in the EU. The foundations for the price rally were already laid at the end of 2022, with the EU introducing tighter rules under its Emissions Trading Scheme. An April deadline for annual surrendering of ETS allowances has also driven demand, though the market has decoupled from short-term fundamentals to some extent. In the Middle East, you'd have to say Saudi Arabia's efforts in the area of carbon capture are mixed, from a climate perspective. State oil company Aramco is exploring how best to extract more crude oil by injecting CO2 captured from its Jubail CCS plant into existing wells from 2027. – James Burgess

North America

SPGlobal.com

Bitcoin miners flocking to Texas want to stabilize ERCOT's volatile renewables

Multiple US agencies launch offshore wind power development efforts

US offshore wind investments more than triple in 2022, IRA to boost alternative uses

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US IRA creates alluring business models for carbon negative hydrogen: researcher

Texas grid's uncertainty in weather, economics, politics keep experts ‘up at night'

Asia Pacific

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India's cross-border carbon credit list focused on innovative green technologies

Japanese gas utilities to introduce 'clean gas certificates' in FY 2024-25: JGA

Australia's electricity market needs urgent investment over next decade, says operator

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Indonesia officially launches carbon trading for power sector

New Zealand carbon price falls to over one-year low on weak policy support

Japan's MOL, Air Water to study liquefied bio-methane potential for bunkering

EMEA

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Developing economies hit hardest by EU's carbon border tax

European carbon prices breach Eur100/mtCO2e mark, trading at record-high

Saudi Aramco identifying fields for EOR with CO2 injection from Jubail CCS plant

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Uniper warns of green hydrogen market distortion risk from proposed EC rules

TES, Energie 360 partner on renewable natural gas plans in Switzerland

Charts of the week:

Source: S&P Global Commodity Insights

Quotes of the week:

"If we want more and more renewable energy to be built in this country we need to provide a load that allows [developers] to properly monetize that generation capacity. Bitcoin mining is the perfect load for renewable energy" -- Fred Thiel, CEO of Marathon Digital Holdings

India's Article 6 carbon credit technology definitions "will help the expansion of the carbon market as a whole and bring indirect positive impact on the VCM" -- Samrat Sengupta, EKI Energy Services

Price of the week:

NZ$67/mtCO2e

The price of New Zealand Units fell to a 14-month low on Feb. 23, having hit NZ$88.50/mtCO2e in November. In December the government set a floor price for NZUs at NZ$33.06/mtCO2e.

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Idemitsu, ENEOS, Toyota, MHI eye introducing carbon-neutral fuels in Japan by 2030

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