**Monday, May 28 is a public holiday in the UK and US, so no CP Daily will be published. But fret not, as today’s newsletter contains twice as much news as normal**
Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here
TOP STORY
Experts challenge California’s ARB on allowance over-supply, carbon offsets at legislative hearing
California regulator ARB’s planning on how to set post-2020 emissions caps and new offset requirement in the state’s carbon market could have negative implications for future GHG reductions, several experts said at a hearing on Thursday.
EMEA
Sweden scraps EUA cancellation plan, to spend funds on innovation instead
Sweden has scrapped its plan to spend SEK 300 million (€29.4 mln) annually to buy and cancel EU Allowances to offset emissions from its sale of state-owned utility Vattenfall’s German lignite assets, and will instead spend the money on low-carbon innovation amongst big emitters.
EU Market: EU carbon prices hit fresh 7-yr high, have doubled since end-2017
European carbon prices jumped to a fresh seven-year high on Thursday, before recovering from a brief intraday drop under €16.
South African cabinet approves carbon tax proposal, bringing long-delayed bill a step closer to passage
South Africa’s cabinet on Thursday approved the government’s proposed carbon tax bill, bringing the long-delayed legislation a step closer to becoming reality.
EU registry to be temporarily suspended for 48 hours in early June
Access to the EU’s emissions trading registry will be suspended for 48 hours in early June to allow for a software upgrade, the European Commission announced on Thursday.
AMERICAS
Investors increase RGGI auction participation in 2017 as compliance entities look elsewhere
More speculators partook in RGGI’s quarterly auctions in 2017 while compliance-oriented entities increasingly turned to the secondary market for their allowance needs, according to the programme’s annual report published Thursday.
NA Markets: WCI prices rise after over-subscribed auction
California carbon prices edged higher following Wednesday’s announcement that the second quarterly WCI auction had sold out.
New Jersey governor endorses energy package, including contentious nuclear bill
New Jersey Governor Phil Murphy (D) signed a raft of energy legislation into law on Wednesday, including a controversial Zero Emissions Certificate (ZEC) programme for the nuclear power sector.
ASIA PACIFIC
China announces tender system to push down wind power costs
China will introduce a tender system for new utility-scale wind power plants in a bid to cut costs and reduce wasted generation, the nation’s energy regulator said Thursday.
SK Market: Korean CO2 extends highs as compliance rush builds momentum
South Korean carbon permits rose another 1.8% on Thursday to extend yesterday’s 5.5-month high as emitters continued to scramble for the trickle of available supply in the tight market.
NZ Market: NZUs drop to 7-week low in slow trade
New Zealand carbon allowances have dropped to their lowest level since early April amid a lack of significant demand ahead of next week’s compliance deadline.
VOLUNTARY
Ben & Jerry’s customers scoop up REDD credits in retail offsetting initiative
Ice cream maker Ben & Jerry’s is piloting an initiative where customers automatically offset the footprint of their retail purchases through buying Peruvian forestry offsets via blockchain technology.
INTERNATIONAL
CBL Markets, UNFCCC in deal to trade CERs on exchange operator’s platform
Energy and environmental commodity exchange operator CBL Markets has agreed a partnership with the UN’s climate change secretariat to list spot CERs on its trading platform, it announced on Thursday.
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CARBON FORWARD 2018
SAVE THE DATE: Carbon Forward 2018 – Survive and thrive in the global carbon markets
Don’t miss the 3rd annual Carbon Forward conference and training day – Oct. 16-18, 2018 in London.
Spend two days with top experts, players, and decision-makers from the global carbon markets as they address today’s most attractive opportunities and pressing challenges. And join us for the EU ETS pre-conference training day organised by carbon market experts Redshaw Advisors, where you will learn how to effectively manage your carbon risk ahead of the looming overhaul of the bloc’s emissions trading scheme.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Trouble in the Congo – A major forest protection scheme in the Democratic Republic of Congo is in turmoil, amid a standoff between the country’s environment ministry and international donors, Climate Home reports. Environment minister Amy Ambatobe has awarded three forestry concessions to Chinese companies and started a process to allocate 14 more. This would open an area of rainforest the size of Belgium to industrial logging. A well-placed source, speaking on condition of anonymity, suggested to Climate Home that Ambatobe saw logging contracts as a bigger vote-winner than foreign aid for forest protection. The Central Africa Forest Initiative (Cafi), which gets the bulk of its funding from Norway, responded in March by freezing payments to DRC projects. It says the concessions breach an agreement it struck with the DRC government to conserve the forest in return for international aid money. A wider group of donors including US and Japan have also written to Cafi’s national funding channel Fonaredd, expressing concerns. The news comes after Norway’s Office of the Auditor General last week issued a highly critical report on its international forest protection programme, including Cafi’s precursor in DRC. Norway has spent almost a billion kroner ($120 mln) in DRC over the past decade, while deforestation has continued to rise. Not only does the Congo basin hold the world’s second largest rainforest, scientists recently discovered vast stores of carbon-rich peat under the trees. If disturbed, it could be a big source of greenhouse gas emissions.
Urgenda 2.0 – A landmark climate case in the Netherlands, the first to rule that a government has a constitutional duty to protect its citizens from the impacts of climate change, is heading back to court on Monday for a hearing on the Dutch government’s appeal, Climate Liability News reports. The Dutch court’s ruling in Urgenda Foundation v. The State of Netherlands in 2015 ordered the government to take more aggressive action to cut emissions, inspiring similar lawsuits around the world from activist groups and citizens trying to compel their own lawmakers to act more decisively on climate change. The lawsuit was filed by the Urgenda Foundation and 886 citizens in 2013, seeking to hold the government accountable for its promises to aggressively cut emissions at a time when the country was falling behind in reaching its renewable energy goals. While the government has made progress in cutting emissions, it remains off track to reaching its goal of reducing by 25% by 2020, as ordered by the Hague District Court in its 2015 ruling.
If you can make it until then – Embattled coal and nuclear power-plant operators stand to get a lot more money to provide capacity to the biggest US electricity grid – if they can hold on for another three years. Generators are going to make $140 a megawatt-day for the year starting in June 2021, 83% more than the prior year, according to the results Wednesday of the latest capacity auction held by PJM Interconnection LLC. It was the first increase in three years and 19% more than the highest analyst estimate compiled by Bloomberg. Years of declining power prices have made it tough for plant operators, and at least 7 GW of coal and nuclear capacity in the PJM region – which is comprised of 13 eastern states and Washington DC – are at risk of closing by 2021.
Summer school – The Oregon Joint Committee on Carbon Reduction met this week for the first time since the state’s cap-and-trade legislation stalled in March. The 14-person committee, co-chaired by House Speaker Tina Kotek (D) and Senate President Peter Courtney (D), will see lawmakers develop new policy proposals and hear testimony from invited guests with the goal of recommending a new carbon pricing policy for introduction in 2019. Speakers at this week’s session included Oregon Department of Environmental Quality director Richard Whitman and Resources for the Future senior fellow Dallas Burtraw. The committee is scheduled to meet at least six more times throughout the summer and fall. For more detail on the committee’s goals, check out Carbon Pulse’s interview with Oregon Representative Ken Helm. (The Dalles Chronicle)
Similar fate – The New Hampshire Site Evaluation Committee denied an appeal by Eversource to grant the company a siting permit for its Northern Pass hydroelectric line, after the body gave its initial ruling in February. The committee threw out the company’s motion to rehear the project, dismissing Eversource’s concern that the regulatory body had not considered the positive benefits of the project. Eversource said it will consider appealing the case to the New Hampshire Supreme Court, and issued a statement where it said it would continue to work with stakeholders on a project that receives approval. (AP)
Mobil’s methane – Exxon is targeting a 15% cut in methane emissions by 2020, Reuters reports, the latest effort by an oil major to reduce its carbon footprint. The world’s largest publicly traded oil producer will replace oil equipment and update technology to curb methane emissions from its US shale facilities. It will use leak detection-and-repair technology, as well as cut natural gas flaring by about 25%, with most reductions expected in West Africa.
Everything but – The Trump administration debated whether it should attack or simply ignore federal research on climate change, the Washington Post reports. A memo obtained by the Post and written last September by former top White House energy and environmental aide Michael Catanzaro presented three pathways for the administration to approach climate science. The menu of options: conducting a red team/blue team exercise to “highlight uncertainties”; using the Administrative Procedure Act to formally attack scientific findings; or “ignor[ing], and not seek[ing] to characterize or question, the science being conducted by Federal agencies and outside entities.” The memo did not present an option for endorsing federal climate science. (Climate Nexus)
Evolution of belief – New NASA Administrator Jim Bridenstine this week endorsed that major federal report, telling lawmakers it “has clearly stated that it is extremely likely … that human activity is the dominate cause of global warming and I have no reason to doubt the science that comes from that.” Bridenstine agreed that his new position on the science constituted an evolution of his views and vowed to protect climate science work at the space agency. (Politico)
Ocean focused – New US offshore wind projects approved on Wednesday will add a combined 1.2 GW of power to Massachusetts and Rhode Island. The 800GW project from Vineyard Wind will start construction in 2019 with plans to commence operation in 2021, and will be Massachusetts’ first offshore wind project. Meanwhile, Rhode Island, the only state with offshore wind power currently, will see the construction of the 400GW Deepwater Wind project. Massachusetts has a legislative requirement to acquire 1,600 GW of offshore wind capacity over the next decade, while Rhode Island Governor Gina Raimondo is building on her commitment to increase the state’s clean energy portfolio to 1,000 MW by 2020. (Utility Dive)
Fishy business – Canadian federal lawmakers on Wednesday voted to exempt Canada’s 46,000 commercial fishermen from paying the national backstop carbon levy. The vote on a snap amendment followed “unrelenting pressure” against the tax, said one MP: ‘There is a possibility we might go further.” (Blocklock’s Reporter)
Gassed out – Europe wants its industry to burn more natural gas instead of coal to reduce global warming. The problem is, there isn’t enough gas at the right price. Depleted gas stores after the coldest winter since 2012, coupled with pipeline constraints on flows from Russia and Norway, have driven prices to their highest level in at least five years. The result: generating electricity from gas is unprofitable for many utilities, according to Bloomberg calculations based on the cost of fuel, power and emission permits.
Import alert – A rising CO2 price and low electricity prices led coal plant operators in Germany to throttle down their power production during the recent Pentecost public holiday, causing a short period of net power imports in a country that usually produces far more than it consumes, according to Frankfurter Rundschau. Very sunny and windy weather caused Germany’s renewable facilities to produce a lot of electricity, while at the same time consumption was low due to most businesses being closed. In addition, melting snow in the Alps filled many hydro plants in Germany’s southern neighbour countries, making power even cheaper. But the jump in EUA prices, which have hit €16/tonne, made operating coal plants so expensive that the owners decided to lower the total capacity to 3 GW from about 16 over the bank holiday. (Clean Energy Wire)
Not nice for rice – Climate change could make rice less nutritious, according to new research. A study published Wednesday in the journal Science Advances finds that growing rice in high atmospheric levels of CO2 – including levels expected by 2100 under some emissions scenarios – resulted in a decline of levels of various key vitamins and iron, zinc and protein. “About two billion people rely on rice as a primary food source and among those that are the poorest, often the consumption of rice in terms of their daily calories is over 50%,” said study co-author and USDA scientist Lewis Ziska. “Anything that impacts rice in terms of its nutritional quality is going to have an impact.”(Climate Nexus)
A family affair – Ten families filed a climate lawsuit on Thursday against the European Parliament and the European Council over the EU’s emissions target. They claim the “inadequate” target to reduce 1990-level GHGs by at least 40% by 2030 does not protect their fundamental rights. In the application, dubbed the People’s Climate Case, they say their livelihoods have been and will be put at risk by climate change and call for higher ambition. The 10 families are from Portugal, Germany, France, Italy, Romania, Kenya and Fiji. They are joined by the Swedish Sami Youth Association Sáminuorra. (Climate Home)
Talanoa tales – Emissions trading association IETA has launched a major communications project for 2018 to support the UNFCCC process as it moves towards agreeing the implementation of the Paris Agreement. IETA’s Talanoa Stories will present its members’ experiences, showcasing their ambitions to help achieve Paris’ goals of keeping temperature rises to less than 2C while underlining how a price on carbon can drive private investment to achieve this. The initiative shadows the formal UNFCCC Talanoa Dialogue, in which nations share their own experiences and ambitions as part of an ongoing conversation throughout the year. IETA’s multimedia project, which will include members’ words, images, and films, will develop throughout 2018 to reach its final form at COP24 in Katowice in November.
And finally… Good for some, bad for others – Achieving Paris’ toughest climate change target will save the world about $30 trillion in damages, far more than the costs of cutting GHGs, according to a economic analysis published in the journal Nature. Most nations, representing 90% of global population, would benefit economically from limiting warming to 1.5C. This includes almost all the world’s poorest countries, as well as the three biggest economies – the US, China and Japan. Australia and South Africa would also benefit, with the biggest winners being Middle East nations, which are threatened with extreme heatwaves beyond the limit of human survival. However, some cold countries – particularly Russia, Canada, and Scandinavian nations – are likely to have their growth restricted if the 1.5C target is met, the study suggests. This is because a small amount of additional warming to 2C is seen as be beneficial to their economies. (The Guardian)
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