ESG News |March


Selected Monthly ESG News

Carbon Finance

International Energy Agency: 2022 CO2 Emissions Report

On March 7th, the International Energy Agency released its "2022 CO2 Emissions" analysis report. The report indicates that global energy-related carbon emissions increased by 0.9% in 2022, which is significantly lower than the 6% increase in 2021. However, emissions are still showing an upward trend, which is detrimental to sustainable development. Therefore, more effective actions need to be taken to accelerate the transition to clean energy.

Some countries   wanted to exclude nuclear energy from EU renewable energy targets

On March 17th, seven EU countries, including Germany, Spain and Denmark, opposed France's inclusion of nuclear energy in the EU's renewable energy targets, stressing that nuclear energy is a low-carbon energy source rather than a renewable energy source. These countries have expressed a willingness to discuss the role of low-carbon fuels, such as natural gas, in other EU regulations, but renewable energy targets should be limited to wind, solar and other renewable energy sources.

Biden Announces $6 Billion Funding to Scale Industrial Decarbonization Projects

The Biden administration unveiled on March 9th a series of initiatives aimed at reducing greenhouse gas emissions from the industrial sector, including the announcement of a $6 billion Industrial Demonstrations Program to accelerate decarbonization projects targeting hard-to-abate sectors. The new $6 billion funding program, announced through the Department of Energy (DOE), will provide up to 50% of the cost of first-of-a-kind or early-stage decarbonization projects, in order to bring them to scale this decade. The projects are expected to target the highest emitting industries – such as iron and steel, aluminum, cement and concrete – with cross cutting technologies with the greatest potential to achieve significant decarbonization domestically and globally.

Sustainable Investments

EU Lawmakers Vote to Require all Member States to Cut Emissions by 2023

On March 14th, the European Parliament passed a revised Effort Sharing Regulation, which requires all EU member states to reduce their greenhouse gas emissions by 2030 and increases the EU's overall emissions reduction target for 2030 from 30% (based on 2005 levels) to 40%. This regulation is part of the EU's "Fit for 55" roadmap, which aims to reduce greenhouse gas emissions by 55% by 2030. The regulation also sets annual emission limits for each member state and restricts member states from using excess emissions allowances saved from previous years, borrowing allowances from future years, or trading allowances with other member states.

Green Finance

The European Union has delayed a vote on whether to ban the sale of internal combustion engine vehicles in 2035

Recently, Swedish spokesman, also as   the rotating presidency of the Council of the European Union, confirmed the postponement of the vote of the "2035 European New Fuel Car and Small Truck Zero Emission Agreement" on social platforms. The EU was scheduled to vote on March 7th. The vote was postponed indefinitely, possibly for fear that Germany might abstain, because the auto industry accounts for the majority of the German economy. Germany's Free Democratic Party has been calling for a change in the deal. They want the EU to consider an exemption for cars with internal combustion engines that run on synthetic fuels.

Global energy emissions rose to a new record of 36.8 billion tonnes in 2022

On March 2nd, the International Energy Agency said that global energy-related CO2 emissions had reached a record high last year, which were expected to increase by another 0.9% in 2022 to a new record (36.8 billion tonnes). Despite the development of renewable energy, energy-saving measures and electric vehicles, emissions cuts are needed to avoid runaway climate change. Some fossil fuel companies are still using high-carbon energy in pursuit of high profits.

Blue Finance

The first nationwide auction of "blue carbon" was conducted in China with each ton selling for 106 RMB.

On February 28th, the first nationwide auction of "blue carbon" was held in Xiangshan, Zhejiang Province, and eventually sold for a high price of 106 RMB per ton. The proceeds from the transaction will be used for future seaweed farming and carbon sequestration mechanism research. The blue carbon trading represented by this event, which is market-oriented, is a pioneering initiative that achieves a win-win situation between economic development and ecological restoration. The auction format used in this event effectively addressed the pain point of "difficult pricing" for blue carbon.

Responsible Investments

The Ministry of Finance has lawfully imposed administrative penalties on Deloitte and Huarong.

On March 17th, the Ministry of Finance issued an administrative penalty against Huarong and Deloitte, including measures such as confiscating RMB 211.9044 million from Deloitte's Beijing branch. Since 2021, the Ministry of Finance has conducted inspections on the accounting information quality of Huarong and the professional quality of its audit firm Deloitte. It was found that Deloitte did not pay sufficient attention to the substance of many of Huarong's economic transactions and failed to objectively evaluate the company's asset status, resulting in serious audit defects.

Article classification: ESG News

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