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December
World Bank, partners launch tracking system to clean up carbon markets
Written by Nur Yasmin
The World Bank and partners including Singapore on Wednesday launched a global tracking system to clean up the opaque market for carbon credits and help developing countries raise much-needed climate finance quickly and more cheaply.
Carbon credits - generated through activities such as planting forests or pulling climate-damaging carbon dioxide from the air - are sold to polluters to offset their emissions as a way of helping them reach net-zero emissions to limit global warming.
While governments wrangle over the rules for trading so-called compliance credits, projects are being launched to generate new credits and countries are setting up registers to track them.
Private-sector efforts also have sprung up offering credits for "voluntary" carbon markets, while a range of registries such as Verra and Gold Standard is accrediting and tracking them.
The $2 billion voluntary market has remained small. Critics cite concerns including poor market transparency, a limited supply of credits and questions over the quality of projects.
The new database - called the Climate Action Data Trust (CAD Trust) - aims to address these issues by collating all the project and carbon credit data in one place and making it free to the public.
"The goal for us was to create this global, public data layer which allows people to get a better sense of what's happening across the world, across different jurisdictions, across different programmes," Chandra Shekhar Sinha, an adviser of the Climate Change Group at the World Bank, told Reuters.
"We're able to track it, avoid double-counting (and) figure out what are the innovations that are taking place," and hopefully create a "race to the top" at the same time as lowering the barriers to entry for market participants.
The CAD Trust, co-founded with the International Emissions Trading Association (IETA), will provide a platform listing various existing carbon offset registries to make it easier for companies and countries to share data.
Sonam Tashi, chief planning office at Bhutan's Ministry of Economic Affairs, told Reuters the new CAD Trust portal would allow the country to save around $1 million in initial costs for accessing the market, compared with the costs of setting up its own systems.
"It really helps us ... leapfrog the entire learning process. It brings us up to speed with what is required within the carbon markets," he said.
He said Bhutan is in discussions with possible buyers who want details about how carbon credits from its forests are being registered, verified and monitored.
"This is where the World Bank facility will help us," Tashi said. "The CAD Trust meets all the technical requirements of host countries and buyers."
Using the CAD Trust means Bhutan would likely be able to start selling credits in 2023 - a year earlier than if the country had not been able to access the facility, he said. (Reuters)
December
EU escalates WTO case against China over patents, Lithuania
Written by Nur Yasmin
The European Commission said on Wednesday it had requested the formation of adjudicating panels at the World Trade Organization, the next step in two trade disputes with China after failing to resolve them bilaterally.
The disputes, both brought to the WTO at the beginning of the year, concern alleged Chinese restrictions on EU companies' rights to use foreign courts to protect their high-tech patents and on trade with EU member Lithuania.
The EU executive, which oversees trade policy for the 27-member European Union, said both sets of measures were highly damaging to European businesses, with those against Lithuania disrupting intra-EU trade and supply chains.
The Commission formally requested consultations with China at the WTO, the first step in a WTO challenge. Such consultations rarely resolve disputes.
The EU executive said the WTO panels would likely be formed early in 2023, noting that panel proceedings can last up to one and a half years.
China said it will handle the EU's trade disputes request in accordance with the WTO's dispute settlement procedure, according to a statement by the commerce ministry.
The panel requests come as the European Union reviews its stance towards China, seeing it increasingly as a competitor and system rival than a partner. Russia's invasion of Ukraine has also led EU leaders to express concern about economic reliance on China, which has taken a more neutral stance on the conflict.
The United States and the EU held the third ministerial-level meeting on Monday of their Trade and Technology Council (TTC), designed to enhance regulatory cooperation and present a united front against China.
An EU official said the timing of the requests was not linked to the TTC, but reflected the work required to build both cases. In the Lithuania case, many of China's actions were not published measures, which are typically the focus for WTO litigation.
One of the disputes concerns China's downgrading of diplomatic ties with Lithuania from December 2021 and pressure on multinationals to sever links with the Baltic nation of 2.8 million people after it allowed Taiwan to open a de facto embassy in Vilnius.
The Commission said China had also placed import bans on alcohol, beef, dairy, logs and peat shipped from Lithuania on the basis of plant and food safety rules without proving the bans were justified.
In the other case, the Commission said Chinese courts had since August 2020 issued "anti-suit injunctions" that prevent European companies from seeking redress over standard-essential patents in non-Chinese courts, such as EU courts.
The Commission said Chinese manufacturers used the injunctions to pressure patent rights holders to grant them cheaper access to European technology. (Reuters)
December
South Korea considers ordering more truckers back to work
Written by Nur Yasmin
The South Korean government was moving on Wednesday towards ordering more truckers to return to work as their national strike entered its 14th day.
But the administration has so far failed to achieve a breakthrough in negotiations with the truckers, whose strike to extend an income-guarantee programme has widely obstructed shipments from the country, the world's sixth-biggest exporter.
Cabinet would meet on Thursday to discuss ordering drivers who serve the petrochemical and steel industries to get back to work, the Finance Ministry said.
Last month, the government ordered drivers serving the cement industry to return to work.
The strike has disrupted supply chains and, according to the government, in its first 12 days delayed delivery of goods worth 3.5 trillion won ($2.65 billion).
Despatches of petrochemicals for domestic delivery were down to 65% of normal levels, the transport ministry said on Wednesday, while steel shipments for all customers were running at 47%.
Petrochemical companies are considering cutting production as early as next weekend due to shortages of raw material or space for storing inventory that cannot be despatched.
Despatches of cement have bounced back to 93% of normal levels from 10% earlier in the strike, thanks to the government telling drivers to return to work, according to the Korea Cement Association lobby group.
Although they are getting limited road freight service, ports are operating.
Suffering from soaring fuel costs, as many as 25,000 striking truckers are calling for a temporary minimum-pay scheme for their industry to be made permanent.
On Wednesday, some said loss of income in the strike was becoming difficult for drivers to bear.
"Every one of us made enormous efforts to stop our trucks," Lee Sung-chul, a striking cement trailer driver, told a meeting organised by a member of parliament on Wednesday.
"But the strike has gone on for more than 10 days. Given family finances and car instalments, some non-union drivers have started work again," said Lee, himself getting calls from his nervous wife to return to work.
Another striking trucker, Lee Geum-sang, who drives a fuel tanker, said he felt time was not on the truckers' side.
"It is very frustrating. I am afraid many drivers on the strike won't make it until next week," he said. (Reuters)
December
India central bank says inflation battle not over, raises rates again
Written by Nur Yasmin
India's central bank raised its key policy rate by 35 basis points to 6.25% on Wednesday, the highest in over three years and its fifth straight increase, and vowed there will be no let up in its fight to tame high inflation.
While there have been signs recently that price pressures may be moderating, Reserve Bank of India (RBI) Governor Shaktikanta Das said the main risk was that inflation could remain pervasive and elevated, reinforcing market views the central bank could hike rates again in coming months.
The monetary policy committee (MPC), comprising three members from the RBI and three external members, raised the key lending rate or the repo rate (INREPO=ECI) to 6.25% -- the highest since April 2019. Five of the six members voted in favour of the increase.
A strong two-thirds majority in a Reuters analysts poll had predicted a 35 basis point (bps) increase, smaller than its last three hikes of 50 bps each, and said it was still too soon for the central bank to take its eye off inflation, which has stayed above the upper end of the RBI's 2-6% tolerance band all year.
India's annual retail inflation eased to a three-month low of 6.77% in October, helped by a slower rise in food prices and a higher base effect, strengthening bets on smaller rate increases by the RBI going ahead.
Das said the worst of this year's inflationary spike "is behind us" but warned there was no room for complacency.
"The MPC was of the view that further calibrated monetary policy action was warranted to keep inflation expectations anchored, break core inflation persistence and contain second round effects," Das said as he announced the monetary policy committee's decision.
"The focus on inflation control continues. There will be no let up in our efforts to bring inflation to more manageable levels," he added.
Michael Patra, RBI deputy governor in-charge of monetary policy, underlined the importance of the smaller rate hike than at previous meetings, but said the central bank was closely watching for second round effects of inflation.
"After continuous 50 bps increases, it has now moderated. That tells you of a shift," Patra told reporters.
"The worst of inflation is over but the moderation of inflation will be very grudging, very uneven. So we must shepherd inflation first firmly into the tolerance band and then to the target."
'SLIGHTLY MORE HAWKISH'
Investors expect at least one more rate hike in the current cycle at the next meeting.
"The statement was slightly more hawkish than perhaps expected by markets, with no indication that the central bank is coming to the end of its rate hiking cycle for now," Sakshi Gupta, principal economist at HDFC Bank said.
Other market watchers agreed.
"We continue to expect the focus of MPC to remain in a watchful mode as uncertainties on inflation settle down. We see a possibility of another 25 bps rate hike before a prolonged pause," Upasna Bhardwaj, chief economist at Kotak Mahindra Bank said.
The MPC also maintained its stance on "withdrawal of accommodation", with four out of six members voting in favour as the committee continues to focus on pulling out high levels of cash from the banking system without stunting growth.
The MPC lowered its GDP growth projection for financial year 2022/23 to 6.8% from 7% earlier, while keeping its retail inflation forecast steady at 6.7%.
"Growth in India remains resilient in the international environment. A 6.8% growth (rate) is robust," Das said.
India posted annual economic growth of 6.3% in its July-September quarter, slightly better than expected but less than half the 13.5% growth in the previous three months as distortions caused by COVID-19 lockdowns faded in Asia's third-largest economy.
The Indian rupee stayed higher against the dollar after the policy decision, while government bond yields also remained elevated.
The rupee was at 82.50, up from 82.53 before the decision and 82.62 at previous close, while the benchmark bond yield was at 7.2824%, after rising to its highest in last two weeks and up from 7.2113% earlier. It had ended at 7.2486% on Tuesday.
The Nifty 50 index (.NSEI) was down 0.27% at 18,592.10, as of 01:45 p.m IST, and the S&P BSE Sensex (.BSESN) declined 0.2% to 62,503.73. (Reuters)
December
New Zealand Navy idles ships as labour crisis hits
Written by Nur Yasmin
Three of New Zealand's nine naval ships are sitting idle in port as higher civilian salaries lure personnel out of the military, the country's Defence Force said on Wednesday, even as tensions in the Pacific rise between China and the U.S. and its allies.
The HMNZS Wellington, an offshore patrol vessel, headed back to New Zealand early from what was meant to be a three-month deployment in the Pacific and was taken out of operation in November because of shortages, the New Zealand Defence Force said.
The Wellington is the third ship to be put into "care and custody", with two other vessels - another offshore patrol vessel and a smaller patrol vessel for operating close to shore - pulled off the line and their crews reassigned last year. The vessels have crews of 24 to 42.
The bottom line is "workforce issues are impacting ship availability to deliver naval outputs," an August note from the Chief of the Defence Force Air Marshal Kevin Short to the Minister of Defence said. "Risks remain to Naval output delivery if attrition and hollowness cannot be addressed in a timely manner."
NZDF has just over 15,000 personnel, including civilian staff, and about 2,800 are in the Navy. The Defence Force said in May that it would spend 90 million New Zealand dollars ($57 million) over four years to raise the salaries of the lowest-paid workers. Officials hope personnel figures will significantly improve by 2026-2027.
Having so few ships available makes it harder for the navy to handle multiple challenges at once, a New Zealand Defence Force (NZDF) spokesperson said.
The problem is especially acute as the U.S., Japan, Australia and other countries in the region square off against China and strive for influence. New defence spending plans, driven by lessons learned from Russia's invasion of Japan, are also taking shape.
New Zealand, which spends roughly 1.5% its of GDP on defence, this year announced it would review its own defence policy in light of regional geopolitics and climate change. The review is not expected to be completed until 2024.
In July, after China signed a security pact with the Solomon Islands, New Zealand Prime Minister Jacinda Ardern said the Pacific region could manage security issues on its own.
The number of people leaving the defence force is at its highest level - the Navy attrition rate was about 16.5% in the year to November - in decades as staff have quit for jobs in the private sector, where salaries have risen due to a tight labour market.
New Zealand's Defence Force is also dealing with ageing equipment and a large number of personnel being assigned to border quarantine facilities.
Minister of Defence Peeni Henare acknowledged in an email that staff losses were hurting the Defence Force, but said the government was committed to rebuilding it.
"There is more still to do," he said.
The country is replacing its fleet of C-130 cargo planes and P-3 maritime patrol aircraft (MPA), and the first of four Boeing P-8A Poseidon MPA is due to arrive this month. Plans for a new military vessel built for Southern Ocean and Antarctic conditions were shelved this year. (Reuters)
December
Airlines forced to ration jet fuel in New Zealand, but limited impact seen
Written by Nur Yasmin
Key regional airlines said on Wednesday they expected to continue scheduled flights with New Zealand, which is beginning to ration jet fuel after a recent shipment failed government tests.
Airlines are being told that jet fuel supplies at the country's largest airport in Auckland will be throttled to 75% of planned allocations, said Cath O'Brien, an official of a national panel of airline representatives.
But national carrier Air New Zealand (AIR.NZ) and Singapore Airlines (SIAL.SI) ruled out immediate schedule changes, as did an official of another major regional airline, who sought anonymity in the absence of authorisation to speak with media.
"We know how important it is to get our customers around our network in the lead-up to Christmas and our team are working hard to ensure we will continue," said David Morgan, chief safety officer for the national carrier.
No schedule changes were currently being considered, he added.
A spokesperson for Singapore Airlines said it was working closely with authorities to understand if operations would be affected, adding, "There are currently no changes to our scheduled operations."
Routine tests on Monday uncovered conductivity levels above regulatory thresholds, said Z Energy, the importer supplying about 40% of New Zealand's transport fuels, although no concerns had been flagged by previous tests en route and on arrival.
Z Energy is weighing options, such as ordering a replacement shipment, a company spokesperson told Reuters.
Most of the suspect fuel will be sent to an overseas refinery for reprocessing. New Zealand's only refinery at Marsden Point, north of Auckland, was converted into an import-only terminal in April.
The next scheduled shipment, due to arrive on Dec. 12, will be ready for use by Dec. 18.
O'Brien said regional airlines would mitigate the impact of reduced supplies by loading extra fuel at destinations such as Australia, though longer-haul airlines would need to consider refuelling stops or trading off cargo for more fuel.
"So while it's possible, it's not simple and it's not cheap," added O'Brien, the executive director of the Board of Airline Representatives of New Zealand. (Reuters)
December
Oil prices climb after Russian crude sanctions kick in
Written by Nur Yasmin
Oil rebounded on Tuesday after plunging by more than 3% in the previous session, as the implementation of sanctions on Russian seaborne crude oil eased concerns about oversupply while the relaxing of China's COVID curbs bolstered the demand outlook.
Brent crude futures had gained 85 cents to $83.53 a barrel by 0733 GMT. West Texas Intermediate crude (WTI) rose 68 cents to $77.62 a barrel.
Crude futures on Monday recorded their biggest daily drop in two weeks, after U.S. service sector data raised worries that the Federal Reserve could continue its aggressive policy tightening path.
The Group of Seven set a top price of $60 a barrel on Russian crude, aiming to limit Moscow's ability to finance its war in Ukraine, but Russia has said it will not abide by the measure even if it has to cut production.
The price cap, to be enforced by the G7 nations, the European Union and Australia, comes on top of the EU's embargo on imports of Russian crude by sea and similar pledges by the United States, Canada, Japan and Britain.
While the market weighs the impact of sanctions on Russian supply, it was also watching a traffic jam of oil tankers off the coast of Turkey on Monday, with Ankara insisting on new proof of insurance for all vessels.
"The threat of losing protection and indemnity (P&I) insurance will limit Russia's access to the tanker market, reducing crude exports to 2.4 million barrels per day (bpd) – 500,000 bpd lower than levels seen before Russia invaded Ukraine in late February this year," said analysts from Rystad Energy in a note.
In China, more cities are easing COVID-19-related curbs, prompting optimism for increased demand in the world's top oil importer.
The country is set to announce a further relaxation of some of the world's toughest COVID curbs as early as Wednesday, sources said.
Business and manufacturing activity in China, the world's second-largest economy, have been hit this year by strict measures to rein in the spread of the coronavirus.
But the oil price gains could prove fragile, as it would take time to confirm a sustained recovery in Chinese consumption, as well as the supply impact of Russian sanctions.
Saudi Arabia, the world's top oil exporter, cut the January official selling price for its flagship Arab Light crude for Asian buyers to a 10-month low. (Reuters)
December
EU agrees law preventing import of goods linked to deforestation
Written by Nur Yasmin
The European Union agreed on Tuesday on a new law to prevent companies from selling into the EU market coffee, beef, soy and other commodities linked to deforestation around the world.
The law will require companies to produce a due diligence statement showing that their supply chains are not contributing to the destruction of forests before they sell goods into the EU - or they could face hefty fines.
"I hope that this innovative regulation will give impetus to the protection of forests around the globe and inspire other countries at the COP15," said the European Parliament's lead negotiator, Christophe Hansen.
Deforestation is a major source of greenhouse gas emissions that drive climate change and will be in focus at a U.N. COP15 conference this week, where countries will seek a global deal to protect nature.
Negotiators from EU countries and the European Parliament struck the deal on the law early on Tuesday.
It will apply to soy, beef, palm oil, wood, cocoa and coffee, and some derived products including leather, chocolate and furniture. Rubber, charcoal and some palm oil derivatives were included at the request of EU lawmakers.
Companies would need to show when and where the commodities were produced and "verifiable" information that they were not grown on land deforested after 2020.
Failure to comply could result in fines of up to 4% of a company's turnover in an EU member state.
Countries that will be impacted by the new rules, including Brazil, Indonesia and Colombia, say they are burdensome and costly. Supply certification is also difficult to monitor, especially as some chains can span multiple nations.
While campaigners welcomed the law as "historic", they also criticised its requirement for companies to prove they respected the rights of indigenous people - but only if those rights are already legally protected in the producer country.
"The EU has missed the chance to signal to the world that the most important solution to stopping deforestation is upholding indigenous rights," said Nicole Polsterer from campaign group Fern.
EU countries and the European parliament must now formally approve the legislation. The law can enter into force 20 days later, after which large companies have 18 months to comply, and smaller firms 24 months.
EU member nations will be required to carry out compliance checks covering 9% of companies exporting from countries with a high risk of deforestation, 3% from standard-risk countries and 1% for low-risk countries.
The EU said it would work with affected countries to build up their capacity to implement the rules. (Reuters)
December
U.N. summit aims for global pact to protect nature
Written by Nur Yasmin
Countries are gathering Tuesday for a key U.N. nature conference in Montreal, aiming to broker a new global agreement to protect what's left of Earth's wildlife and natural spaces.
Negotiators hope that the two-week summit, known as COP15, yields a deal that ensures there is more "nature" — animals, plants, and healthy ecosystems — in 2030 than what exists now. But how that progress is pursued and measured will need to be agreed by all 196 governments under the U.N. Convention on Biological Diversity (CBD).
Countries are gathering Tuesday for a key U.N. nature conference in Montreal, aiming to broker a new global agreement to protect what's left of Earth's wildlife and natural spaces.
Negotiators hope that the two-week summit, known as COP15, yields a deal that ensures there is more "nature" — animals, plants, and healthy ecosystems — in 2030 than what exists now. But how that progress is pursued and measured will need to be agreed by all 196 governments under the U.N. Convention on Biological Diversity (CBD).
Countries are gathering Tuesday for a key U.N. nature conference in Montreal, aiming to broker a new global agreement to protect what's left of Earth's wildlife and natural spaces.
Negotiators hope that the two-week summit, known as COP15, yields a deal that ensures there is more "nature" — animals, plants, and healthy ecosystems — in 2030 than what exists now. But how that progress is pursued and measured will need to be agreed by all 196 governments under the U.N. Convention on Biological Diversity (CBD).
Countries are gathering Tuesday for a key U.N. nature conference in Montreal, aiming to broker a new global agreement to protect what's left of Earth's wildlife and natural spaces.
Negotiators hope that the two-week summit, known as COP15, yields a deal that ensures there is more "nature" — animals, plants, and healthy ecosystems — in 2030 than what exists now. But how that progress is pursued and measured will need to be agreed by all 196 governments under the U.N. Convention on Biological Diversity (CBD). (Reuters)
December
Pakistani court to oversee probe into death of journalist in Kenya
Written by Nur Yasmin
Pakistan's Supreme Court set up a panel of five judges on Tuesday to supervise an investigation into the death of a prominent journalist who was shot and killed in Kenya, the court said.
Journalist Arshad Sharif, 50, was killed on Oct. 23 while travelling in a vehicle on the outskirts of the Kenyan capital of Nairobi. Kenyan police said it was a case of mistaken identity.
Sharif had earlier fled from Pakistan citing threats to his life after the government registered a treason case against him.
The Supreme Court said it had taken up the case voluntarily and was seeking responses from Pakistan's foreign and interior ministries, the Federal Investigation Agency and Intelligence Bureau.
"The journalist community and the public at large are deeply distressed and concerned about the death of the senior journalist and are seeking the court's scrutiny of the matter," the court said in a statement.
Sharif worked for many years as a prime-time television news show host for ARY News in Pakistan.
Kenyan police said Sharif was shot dead when police hunting car thieves opened fire on the vehicle he was travelling in as it drove through their roadblock late at night without stopping.
Police had formed a roadblock using small stones but the car in which Sharif was a passenger failed to stop, even after officers opened fire, police said in a report. Nine bullets hit the car and one hit Sharif in the head.
Despite the Kenyan police findings, Pakistan's interior minister said there was evidence to suggest it was a targeted killing based on initial findings of a team of Pakistani investigators who visited Kenya last month.
Interior Minister Rana Sanaullah said Sharif's body had bruises and torture marks.
The treason case filed against Sharif stemmed from reporting he did that led to an accusation he had spread a call from an official in a previous government, led by former cricket star Imran Khan, for members of the armed forces to mutiny.
Both Sharif and the official in the previous government denied inciting mutiny.
Former prime minister Khan said Sharif had been murdered for his journalistic work. He called for a judicial investigation. (Reuters)