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TOP STORY
WCI Q4 auction seen clearing close to secondary market, but consensus view evades
The California-Quebec November current vintage auction will likely settle within a few cents of the secondary market, most traders predict, but there did not appear to be consensus view as to whether it would be at a discount or premium.
ASIA PACIFIC
Analysts see potential upside for Korean CO2 price as emissions rise
South Korean carbon prices are at their highest since July, but could go even higher as rising emissions in some of the biggest ETS sectors are set to further deplete available supply in the market, according to analysts.
Japan’s industry unmoved despite carbon pricing calls growing louder
Japan’s biggest business lobby group on Tuesday reiterated that it wants to stick to its voluntary approach to cutting emissions despite growing calls for the government to put a price on carbon to help meet its Paris target at lower cost.
INTERNATIONAL
World can’t take any more new fossil fuel plants, warns IEA
The world cannot afford to build any more fossil fuel-based infrastructure without increasing warming by more than 2C, the global energy watchdog IEA warned Tuesday in its annual World Energy Outlook.
EMEA
EU Market: Sharp sell-offs and quick recoveries see EUAs hold above €20 to end wild session
European carbon ended lower on Tuesday in a wild session that saw buyers emerge to quickly lift prices back up every time they crashed below €20.
Germany’s Uniper maintains hedging freeze, aims to ‘catch upside’
German utility Uniper continued to hold back on its EUA hedging in Q3, but said it intends to catch up to its normal rates when margins are fatter.
AMERICAS
NYISO carbon charge would have minor impact on emissions, studies show
The New York Independent System Operator’s (NYISO) proposed carbon charge would have a minor impact on emissions inside of the state and across the region, while leading to little change in the RGGI market, three independent studies found.
Former Quebec environment minister joins climate practice of Canadian law firm
Quebec’s former environment minister and a key architect of the province’s cap-and-trade scheme is joining the energy and climate practice of a major Canadian law firm.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
**#OCTT – Carbon Pulse is helping to pioneer a new Twitter hashtag for tweets and discussion surrounding the world’s carbon markets. Starting today, we are using #OCTT in such tweets. Borrowing from the oil markets’ #OOTT, our acronym stands for the Organisation of Carbon-Trading Tweeters. Please join us in mainstreaming this new hashtag to further discussion of carbon markets on social media. Once it picks up steam, we can consider regionalising it based on the various schemes.**
Spain verde – Spain’s centre-left government on Tuesday published a new draft climate plan that targets 100% renewable power by 2050, outpacing EU goals, and a ban on new gas and oil exploration. It sets interim 2030 goals and aims for an emissions cut of as much as 90% below 1990 levels by 2050. The country intends to go beyond the EU target of 32% and install 35% renewable energy by 2030, with at least 70% renewable electricity. It aims to improve energy efficiency by 35% – also going beyond the EU target of 32.5%. By 2050 the country is aiming for emissions to be at least 90% below 1990 levels, with electricity generation being 100% renewable. Spain pledges to end all fossil fuel subsidies and prohibit fracking. It aims for a zero-emission vehicle fleet by 2050 and will ban the sale of new petrol and diesel cars by 2040. The draft law will be submitted to Spain’s parliament before the end of the year. (EurActiv, GSCC)
Even them, now – Woodside Petroleum, Australia’s biggest oil and gas exploration and production company, has become the latest major emitter to urge the government to get its act together and design a long-term climate policy that includes a price on carbon. CEO Peter Coleman on Tuesday told a conference that the recent IPCC report shows delaying action any longer is simply too risky, Fairfax reports. But Finance Minister Mathias Cormann on the same day dismissed concerns from within the ruling Coalition over lack of climate action, saying the government is already dealing with it, just in an economically responsible way, according to AAP.
Fossil vows – Australia’s Victoria is gearing up for the Nov. 24 state elections, and energy and climate is a contentious issue there, just as it is on the national level. The opposition Coalition on Monday presented its energy strategy should it win the election, and promised to release a tender to build a 500MW power station next year. Modelling backing up the strategy showed the new plant would likely run on natural gas, but coal would also be an option. However, state power generators were not thrilled about the thought of the state government underwriting a major new plant, Fairfax reported. Opposition leader Matthew Guy also pledged to ditch the state’s target of getting 40% of its electricity from renewables by 2025 should he become state premier. The ruling Labor party has said it would increase that target to 50%.
LoNG game – Climate debate in Australia is mostly focused on coal versus renewables, but the nation’s rapidly increasing LNG production is quickly becoming a major concern, writes the Guardian. With little or no public scrutiny, GHG emissions from the sector is on track to triple from 2015 to 2020 to nearly 40 million tonnes.
You’re not resigning, you’re fired – Britain will be excluded from the EU ETS and all other legislation to help limit the impact of climate change if it leaves the bloc in Mar. 2019 without a deal, the European Commission said Tuesday. In order to safeguard the cap-and-trade system, Brussels said it may temporarily suspend permit auctions and free allocation linked to the UK market – contingency measures aimed at minimising the worst disruption in key areas in case of a no-deal Brexit. The UK has already announced that it would leave the EU ETS under a ‘no deal’ scenario and replace it with a carbon tax. It has also pledged to not hold auctions or allocate EUAs if its future in the scheme is not certain. (Reuters)
Rubber-stamping – The European Parliament today voted to approve legislation for EU targets for 32% renewables and 32.5% energy efficiency for 2030, and to impose a looser governance structure that lifts the binding targets imposed on member states for 2020. It also today adopted a new law to phase out highest-emitting biofuels made from palm and soybean oil. The bills now await sign-off by member state ministers before they can pass into law.
Mexico methane – Mexico’s Agencia de Seguridad, Energia y Ambiente (ASEA) finalised regulations Tuesday to cut methane pollution from the oil and gas sector by 45% by 2025. The regulations use best practices to reduce emissions from a variety of areas, including pipelines, compressor stations, and pumps. The regulations come more than two years after Canada, US, and Mexico signed a declaration to meet that same emission goal. The US has since pulled out of that agreement. Mexico’s baseline is unclear, though Canada’s goal is based on 2012 levels. Mexican state-owned oil producer Pemex was among 13 oil and gas producers that committed to reducing their methane emissions earlier this year.
California wildfires – No registered forestry offset projects have been impacted by the wildfires occurring across California, officials said. The most active fires are ravaging southern California, which is not an active area for forestry projects. Camp Fire, which is northeast of Chico, is the closest to an active ARB-registered project, and it is 30% contain. CAR 1113 and CAR 1114, which are both developed by Sierra Pacific Industries, are north of Camp Fire, but they appear unaffected.
More lawsuits – New York City has filed its appeal of a federal judge’s decision to throw out its liability suit against five major oil companies for their contributions to climate change, arguing that the judge did not rule on the merits of the claim that was filed. In its appeal, the city contends that US District Judge John Keenan “misunderstood the city’s allegations and, on the basis of that misunderstanding, erroneously concluded that various federal law doctrines barred the city’s claims.” New York’s suit, filed in January against Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell, sought billions in damages to cover infrastructure improvements needed to protect New Yorkers from the increasing effects of climate change. The suit includes federal claims of public nuisance, private nuisance and trespass and seeks monetary damages to help pay for the costs of protecting the city. Keenan ruled in July that the city’s claims are covered under federal law, but involve greenhouse gas emissions that cross state lines. That puts them under the jurisdiction of the Clean Air Act, which authorises the EPA to regulate GHGs. Meanwhile, Democrats scored a string of state attorney general victories last week, ousting loyal oil and gas allies and threatening to add to mounting lawsuits against the industry over climate change. (Climate Liability News, HuffPo)
Value added – AES Corp., a long-time builder of coal-fired power plants around the world, published a report Tuesday that projects how climate change could affect its business. The bottom line, the company says, is that its move away from carbon fuels means its business model holds up whether the world warms a lot or a little. The report, which AES says is a first for its industry, comes after ValueAct Capital Partners took a stake in the utility company in January and the fund’s CEO Jeff Ubben joined the board to help steer it further in a clean direction. The company also said it will cut the carbon intensity of its power fleet by 70% by 2030, deeper than its previous goal of a 50% decrease. Shares are up 45% since ValueAct revealed its position. (Bloomberg)
Stickin’ it to ’em – The Ontario government plans to place stickers on gas pumps across the province alerting drivers to the impacts of the federal carbon tax proposal, and will also include line item breakdowns on home heating bills, The Globe and Mail reports. Ontario is already challenging Ottawa’s pan-Canadian carbon pricing proposal in court, but when the federal ‘backstop’ kicks in next year, Premier Doug Ford’s government plans to let consumers know how the carbon charges impact consumers. The federal government announced last month that it would impose the federal backstop on Ontario, which this summer scrapped its carbon market under Ford. The backstop will start at C$20/tonne in 2019 and rise by C$10 each year to C$50 in 2022.
Denied – A UK court has refused a request from defendants to appeal a ruling that orders them to repay £18.7 million to victims of an unauthorised collective investment scam. The company at the centre of the case – London-based Capital Alternatives Limited – along with its founder Renwick Haddow and others, were earlier this year found to have offered such investment schemes using VERs to be generated from reforested or protected forest land in Sierra Leone, Brazil and Australia. The High Court initially ordered the defendants to pay £16.9 mln in restitution, but following applications by the UK’s FCA to take into account further losses from the African Land scheme, the court increased the amount by £1.8 mln. That trial’s judge refused the defendants’ applications for permission to appeal, and the UK Court of Appeal upheld that decision last month.
And finally… Stellar solution – Scientists are attempting to use technology from the International Space Station to reduce global emissions. Professor Stefano Brandani and Dr. Giulio Santori from the University of Edinburgh are trying to re-purpose an air filter system from the station to reduce CO2 on earth. The system uses zeolites, a sponge-like mineral that has tiny pores to lock in CO2 molecules. On the space station, the zeolites empty their CO2 when exposed to the vacuum of space. In the long-term, zeolites could be used in stations that could capture CO2 directly from the air – but this is a long way off as compressing CO2 is just part of the problem. Because CO2 is very dilute in ambient air, technology such as giant fans would be needed to suck it towards the stations without spending too much energy or money – something that is still too high a hurdle for current technologies. Prof. Brandani said: “The issue is how much it costs and who then owns the CO2.” (Phys.org)
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