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TOP STORY
US EPA advisory panel votes to assess science behind CPP rollback
The US EPA’s Scientific Advisory Board (SAB) voted late Thursday to review whether several of the agency’s decisions to repeal or weaken environmental policies such as the Clean Power Plan (CPP) were based on insufficient scientific information, serving as a possible check on Administrator Scott Pruitt’s efforts to scale back GHG regulations.
EMEA
EU Market: EUAs recover from 2-week low as dark spreads crushed
EU carbon prices bounced back above €15 on Friday to claw back much of the previous day’s heavy losses, combining with weaker German power to knock generator profit margins to their lowest in at least a decade.
ASIA PACIFIC
Australia gives late wave of approvals to projects ahead of offset auction
Australia’s Clean Energy Regulator has approved 42 new carbon credit projects over the past two weeks that are now cleared to participate in next week’s ERF auction, potentially tightening competition among bidders.
SK Market: KAUs slide further but volumes soar as govt auction tempers market
South Korean allowances slipped further on Friday as the government’s auction announcement took some of the edge off the demand rush that had seen prices hit fresh six-month highs earlier this week.
DATA
CN Markets: Pilot market data for week ending Jun. 1, 2018
Below is a table of the closing prices, ranges and volumes for China’s regional pilot carbon markets this week. All prices are in RMB, and volumes in tonnes of CO2e. Data sourced from local exchanges.
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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
Cold War coal awards – A draft memo circulated on Thursday will see the US Department of Energy (DOE) use a Cold War-era provision to order grid operators to buy electricity from struggling coal and nuclear plants, an action that some observers have said is an unprecedented intervention into US energy markets. According to the memo, the DOE would exercise emergency authority under two federal laws, including the so-called 202 authority of the Federal Power Act and 68-year-old Defense Production Act, to guarantee profits for power plants that store large amounts of fuel. While advocates say that the measures are necessary for national security reasons and in the case of natural disasters, opponents have criticised the proposal as the government ‘picking winners’ via a bailout for the uneconomical coal and nuclear industry that is being undercut by cheaper natural gas and renewables. (Bloomberg)
Holy huddle – Pope Francis is hosting a gathering next week at the Vatican with executives of major oil producers and investment firms to talk about how the companies can address climate change, Axios reports, citing several people familiar with the event. It’s one of the most significant developments showing how corporations are working with other world leaders on climate change amid President Trump’s whole-scale retreat on the issue. One year ago today, Trump announced his intention to withdraw America from the Paris Agreement.
Paved with coal – Much has been made of China’s Belt and Road Initiative (BRI) and how Beijing can use it to get other developing nations on board with its domestic desire for an anti-pollution, low-carbon development path. But Xinhua on Friday wrote that China has now released $200 million – soon to be followed by $800 mln more – to add another 600MW to Zimbabwe’s biggest coal-fired power station, deepening concerns that Chinese investors who can no longer easily make investments in dirty industries at home will be looking at options in BRI countries instead.
Heat ahead – Europe’s summer will kick off with a warm June that’s set to boost demand for electricity for fans and air conditioning. All five forecasters surveyed by Bloomberg News predict unusually warm weather in the north and east. Temperatures are expected to abate slightly from the record heat seen in April and May, but could still be as much as 6 degrees Celsius (10.8 Fahrenheit) above average in some areas.
Carbon-neutral gas – Oil giant Shell will begin packaging some of its natural gas with carbon offsets in an attempt to market the fuel as clean energy. The company is offering the product to business customers in Europe to show that emissions from the fuel are neutralised with financing for carbon reduction projects, and is testing markets in Germany, Italy, Spain, and the UK to gauge demand for what credits it will use. The company said it “has access” to REDD offsets, saying deforestation schemes “are the most obvious” choice. (Bloomberg)
Mind if we burn this? – The UK’s Drax has submitted an application to the Planning Inspectorate for a development consent order for its plans to replace two of the three remaining coal units at its power station in Yorkshire with up to 3.6 GW of gas generation and up to 200 MW of battery storage. Under the proposals, which were first laid out in September, the company will substitute each of the two coal units with a high-efficiency combined-cycle gas turbine and a battery storage system. The existing steam boilers will be repurposed to generate electricity using the exhaust gases from the turbines. (Utility Week)
Say auf wiedersehen – Due to the end of their 20-year life span of guaranteed support payments, about 20 GW of wind power capacity in Germany will be retired by 2023 as their operation is no longer profitable, according to Simone Peter, the head of Germany’s Renewable Energy Federation (BEE). “This will have substantial consequences,” Peter told Energie & Management, arguing that the special auctions for wind and solar power promised in the government’s coalition treaty should be carried out urgently. This is necessary for Germany to achieve its 2030 climate goals, and to increase the share of renewables in its overall power consumption to 65% by that year, the former Green Party head argues. According to Peter, Germany needs a national CO2 price to make the cost of fossil energy sources visible and improve social participation in the planning of renewable power expansion, and must not mull changing the feed-in priority for renewables to better manage grid bottlenecks. (Clean Energy Wire)
Protocol postings – The Alberta Climate Change Office has posted new technical guidance for assessing the additionality of carbon offset protocols used to comply with the province’s Carbon Competitiveness Incentive Regulation (CCIR). Meanwhile, the office also announced that it has also scrapped the protocol for Nitrous Oxide Abatement from Nitric Acid Production, having previously said that those activities were now covered by the CCIR, which went into effect this year.
Sombre anniversary – One year after the Trump administration announced its intent to withdraw from the Paris Agreement, leaders from multiple sectors and states are reiterating their continued commitment to climate action. In the US, a broad collection of coalitions are working to bridge the gap: more than half of Americans now live in a state or city or work for a business that remains committed to driving down its carbon pollution in line with Paris Agreement goals through the “We Are Still In” initiative. Hundreds of US municipal leaders have also demonstrated a continued commitment to upholding the goals of the Paris Agreement, including the 400-strong Climate Mayors group. (Climate Nexus)
And finally…‘Cheers’, or ‘Kippis’! – A Finnish brewery slated to open in 2019 is not only aiming to become carbon neutral, but carbon negative, in the hopes of spurring more sustainable practices in the brewing industry. Everyman’s Right Brewery has worked with Lappeenranta University and a life-cycle assessment company to conclude that the brewery could produce beer with 100% renewable energy from the brewery’s own energy sources, as well as bottling excess CO2 used in production and offer it to bars and restaurants. The company also said that using offsets to achieve its carbon goals would be “cheating”, and hopes to relinquish the costs of its extra green technology investment within five years. (Beverage Daily)
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