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DAILY BRIEFING Activist investor Elliott turns up heat on SSE over renewables spin-off
Activist investor Elliott turns up heat on SSE over renewables spin-off


Activist investor Elliott turns up heat on SSE over renewables spin-off
The Times Read Article

An activist investor has “stepped up its campaign” for the Scottish energy company SSE to break itself up and spin off its renewables division, according to the Times. The newspaper says the US hedge fund Elliott has been “agitating privately for changes” for months, and has now issued a 10-page open letter calling for actions that it claims could boost the valuation of the group by 30%. SSE operates electricity networks and has a major renewables business operating and building wind farms, as well as interests in gas-fired power plants, the article notes. In its coverage, Bloomberg states that Elliott, which said it is one of the top-five investors in SSE, has argued that the company had failed to provide a convincing explanation so far for why it has resisted calls to divide up the business. In a separate piece of analysis, Times energy editor Emily Gosden looks at the breakdown of what Elliott is proposing. It quotes the open letter, which states: “Despite SSE’s attractive renewable power generation and electricity transmission and distribution assets, the company trades at a significant multiple discount to its renewables peers and also suffers from deep, persistent share-price underperformance.“ The Financial Times notes that besides calling for SSE to split its electricity networks and renewables divisions into two companies, it has pushed for the appointment of two new independent directors and criticised chief executive Alistair Phillips-Davies. The newspaper reports on comments from another SSE investor at Royal London Asset Management who warns that the disruption of these measures would be bad for shareholders and hurt the UK’s path to net-zero emissions. In an opinion piece, the Guardian’s financial editor Nils Pratley writes that while Elliott’s argument that a “standalone renewables division would be inundated with offers of cheap capital from ESG-friendly investors will sound beguiling”, it may be “wishful thinking”. However, he also criticises the lack of “renewable specialists” on SSE’s board, noting that this is where “Elliott’s case is strongest”. Alistair Osborne, chief business commentator at the Times, also expresses scepticism about Elliott’s call for a break-up, but notes that despite a “strategic update” last month SSE “still hasn’t made a proper case against”.

Meanwhile, in Australia, Reuters reports that French firm Neoen SA has activated the largest battery in the country, and one of the largest in the world, in time for the southern-hemisphere summer. The 300 megawatt (MW) energy storage project, dubbed the Victorian Big Battery, “is seen as crucial to preventing blackouts, especially during heatwaves, in a market increasingly reliant on solar and wind power”, according to the newswire. Bloomberg notes that the facility has opened on the site that itself experienced a major fire during testing of its systems using Tesla batteries in July.

Major US utilities plan coast-to-coast, EV-charging network
E&E News Read Article

More than 50 US power companies have come together to build a fast-charging network for electric vehicles (EV) that spans the length of the country, along major travel corridors, by the end of 2023, according to E&E News. The group, dubbed the National Electric Highway Coalition, did not set a specific goal for numbers of charging station installations planned across this decade, the news website notes. However, it adds that the coalition said its first actions would be to fill in gaps in charging infrastructure along the interstate highway system. In its coverage, the Verge notes that the US is expected to need more than 100,000 fast charging ports for the 22m electric vehicles set to be on US roads by 2030, up from 46,000 public charging stations and 1.8m electric vehicles today. The article also notes that the coalition welcomed the $7.5bn set aside for charging points in the Biden administration’s recent infrastructure law. Separately, Bloomberg reports that oil company BP has agreed to acquire Amply Power, a provider of electric-vehicle charging, “in an expansion of its e-mobility business in the US”. The piece notes that the move comes as “large oil companies are under increasing pressure from investors and consumers to keep pace with the global shift to low-carbon energy”.

Meanwhile, the Hill reports that Mexico is “ratcheting up pressure” against electric vehicle tax credits for American-built cars, a Biden administration measure that some Mexican officials are comparing to former president Donald Trump’s threat to impose tariffs on their nation. The piece explains that the auto industry employs nearly 1m workers directly in Mexico, and the government there says Biden’s measure contravenes the US-Mexico-Canada (USMCA) trade deal “by granting undue advantages to US-built vehicles”.

Another Bloomberg article reports that the Biden administration has proposed “modest quotas” for the use of biofuels while also seeking to block exemptions for dozens of refineries, a plan criticised by oil refiners who said it would raise costs for consumers and not provide environmental benefits. Separately, the BBC News Reality Check team has a piece on how Indonesia’s biodiesel drive to decarbonise its transport is leading to deforestation.

Biden continues where Trump left off with oil drilling permits: report
The Independent Read Article

The Independent reports on new research that shows US president Joe Biden is approving more oil and gas drilling permits each month than former president Donald Trump did during his first three years in the White House. Analysis of federal data by thinktank Public Citizen showed that the Bureau of Land Management (BLM) approved an average of roughly 333 drilling permits per month during Biden’s presidency, the piece states. It notes that while this is down about a quarter from the 452 permits issued per month in 2020, the final year of Trump’s presidency, it is more than 35% higher than when Trump took office in 2017. Reporting from the World Petroleum Congress in Houston, Texas, the Financial Times describes “mixed messages” being sent to oil and gas producers, as the Biden administration balances its climate commitments with support for domestic oil production. The Guardian has more coverage from the congress noting that oil and gas representatives had attacked the speed of transition to clean energy.

There is continued reporting on a legal challenge of the UK’s decision to help finance a $20bn liquefied natural gas project in northern Mozambique. According to Bloomberg, activist group Friends of the Earth has asked London’s High Court to “overturn approval for government funding it claims should never have been considered compliant with the Paris Agreement”. Reuters also has the story.

Finally, the Guardian reports that Indigenous leaders are calling on the Science Museum in London to cancel its sponsorship deal with the Adani Group – a major operator of coal mines and coal-fired power stations.

From Siberia to US west, wildfires spewed record carbon emissions this year
Reuters via the Guardian Read Article

Wildfires produced a record amount of carbon emissions in many parts of the world including Siberia, the US and Turkey this year, according to data from the EU’s Copernicus Atmosphere Monitoring Service reported by Reuters. The piece notes that “climate change fanned unusually intense blazes”, which have ultimately emitted 1.76bn tonnes of emissions globally in 2021, equivalent to more than double Germany’s annual CO2 emissions. Bloomberg notes that the worst-hit regions, North America and Siberia, were responsible for most of the emissions. “The report underscores the twin impacts of wildfires: not only do they emit enormous amounts of stored carbon into the atmosphere, they also decimate sources of flora that are a key to capturing greenhouse gases,” the news website states. Sky News cites a researcher at Copernicus who says that while wildfire emissions were not the highest since they began monitoring in 2003, such emissions are likely to increase as climate change continues.

Alok Sharma: UK must push forward on climate action like other countries
Press Association via Belfast Telegraph Read Article

The Press Association reports from a committee hearing with COP26 president Alok Sharma, held in the wake of the summit last month, in which he told MPs that the UK needs to push forward on delivering its climate goals just as it is asking other countries to do. COP26 led to a pact that requested countries to come forward with more ambitious plans for emissions-cutting efforts up to 2030 to limit dangerous warming, the piece notes. Meanwhile, a separate Press Association piece quotes Pete Betts, former UK and EU lead negotiator for UN climate talks, who said that the Glasgow climate pact from COP26 was a “success” but noted that far more needs to be done to protect the world from climate change. (For more on COP26, see Carbon Brief‘s summary.)

Meanwhile, as a new German government prepares to take office this week, Energy Monitor looks at what the coalition means for the energy transition. Politico has a piece on Germany’s new climate minister, Robert Habeck, who it says “will be one of Europe’s most powerful ministers if he can persuade the public and the finance ministry to back his plans”. (Carbon Brief has an article analysing what the new coalition government in Germany means for climate change.)


Neglecting our North Sea reserves just does not add up
Ben Wright, The Daily Telegraph Read Article

Ben Wright, a columnist and associate editor at the Daily Telegraph, writes that the UK risks “running low on energy reserves” after Shell pulled out of the Cambo oil field development in the North Sea. He points the finger at “lukewarm backing in Westminster” and “outright hostility emanating from Holyrood”. He writes: “Having used North Sea oil riches as one of the main pillars of the case for Scottish independence in 2014, Nicola Sturgeon appears to have undergone a Damascene conversion to aggressive environmentalism in the intervening years.” Wright argues that while “very few people disagree that the world should seek to transition from fossil fuels to renewable sources of energy”, most people also agree “this process will take years if not decades”. He concludes: “There’s a big difference between managed decline and wanton neglect. In the matter of the North Sea’s gas and oil reserves, Westminster is in danger of erring towards the latter. Holyrood has already embraced it.”

A piece in the Conversation looks at why Shell has decided to pull out of the Cambo project. “One interpretation of Shell’s announcement is that it weighed Cambo’s potential returns against its reputational value, plus the cost of tying up capital in the long and contested process of developing a large oil project in the North Sea,” the authors write. Another Conversation piece goes further, stating in its headline that “we should ban all new oil and gas fields”. David Waltham, a professor of geophysics at Royal Holloway University, writes that “we cannot safely set fire to all the fuel we’ve already found, so why look for more?”.


Forecast-based attribution of a winter heatwave within the limit of predictability
Proceedings of the National Academy of Sciences Read Article

A new study uses a “storyline” attribution framework to assess the impact of individual drivers on an individual extreme weather event. Focusing on the “exceptional” European winter heatwave of February 2019, the authors use the operational European Centre for Medium-Range Weather Forecasts (ECMWF) forecast model that successfully predicted the event. The study quantifies the direct impact of CO2 on the heatwave, finding that it increases its magnitude by 0.31C and its probability by 52%, compared to pre-industrial conditions.

Changing the world with words? Euphemisms in climate change issues
Ecological Economics Read Article

Using climate change euphemisms, such as “clean coal” or “ethical oil”, can “undermine the objectives of raising climate change awareness and changing behaviours to reduce emissions”, a new study says. The authors “characterise euphemisms related to climate change issues and show how they are often manipulated to serve vested interests opposing climate change action”. They also highlight “euphemistic names of astroturfing organisations” and suggest “some practical ways to prevent or avoid detrimental consequences associated with euphemisms”.

Prolonged marine heatwaves in the Arctic: 1982-2020
Geophysical Research Letters Read Article

The annual intensity, frequency, duration, and coverage of Arctic marine heatwaves have all “increased significantly in recent decades”, new research finds. These trends are “closely associated with the increasing surface air temperature and decreasing sea-ice concentration under the global warming environment”, the authors say. The “low heat tolerance” of the Arctic means these heatwaves “may have a strong impact on the Arctic bio-ecosystem”, the study warns.


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Get a Daily or Weekly round-up of all the important articles and papers selected by Carbon Brief by email. By entering your email address you agree for your data to be handled in accordance with our Privacy Policy.