CP Daily: Thursday May 9, 2019

Published 22:57 on May 9, 2019  /  Last updated at 02:03 on May 29, 2019  /  Newsletter  /  No Comments

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

NA Markets: California allowances retrace following auction deadline, RGGI inches up

California Carbon Allowance (CCA) prices dipped on the secondary market after the May auction bid guarantee deadline passed last week, while RGGI allowances (RGAs) saw an incremental price uptick amid increased buying.

EMEA

Greening of EU power sector has so far had little to do with carbon market -ICIS

EU power sector emission cuts have had little to do with the recent trebling of the bloc’s ETS prices and are more because of ever-increasing renewables deployment, ICIS analysts said on Thursday, adding this was likely to change over the next few years as prices push to €40.

Italy’s Enel reports 16% drop in Q1 thermal power output as higher CO2 price bites

Enel’s EU ETS-regulated power output fell 16% in Q1 2019 compared to a year earlier, shrinking the company’s EUA requirement even as it kept its hedging roughly steady, according to quarterly results released late Wednesday.

EU Market: EUAs slip back after setting 2-week high above €27

EUAs raced to an early peak above €27 on Thursday, but a weak auction and declining natural gas prices dented the confidence of bullish speculators, triggering a sell-off.

AMERICAS

RGGI transacted volume slides in Q1 2019 as top firms increase holdings -report

Secondary market activity in the northeast US RGGI ETS declined during the first quarter of 2019 as the largest firms gained a bigger share of net short and long positions, according to a report published Thursday.

US EPA rejects argument for halt to 2018 biofuel credit waivers

A US federal appeals court should not accept a biofuel trade group’s motion to temporarily halt compliance waivers under the Renewable Fuels Standard (RFS) because its argument is untimely and lacks merit, the EPA said in a court filing this week.

ASIA PACIFIC

SK Market: KAUs extend record highs as supply squeeze continues

South Korean carbon allowances inched upwards in Thursday trade to hit new record highs for the fifth time in just over two weeks as sellers continued to sit on their surplus units rather than bringing them to market.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Eight against extermination – Eight former Brazilian environment ministers warned on Wednesday that far-right President Jair Bolsonaro was transforming the country into an “exterminator of the future” by systematically trying to destroy the country’s environmental protection policies. The ex-ministers, who served governments across the political spectrum for nearly 30 years, highlighted the “depletion” of the environment ministry’s powers by Bolsonaro, including stripping it of jurisdiction over the country’s water agency and forestry service and eliminating three senior officials, including the secretary on climate change. In a speech on Wednesday, Bolsonaro said that he would remove environmental protections in a part of the forested coast south of Rio de Janeiro in order to created “a Cancun of Brazil”. (The Guardian)

King me – King County, Washington announced on Thursday that it has become the first local government in the US to offer a certified carbon offset programme that protects local forests. The urban and rural components of the King County Forest Carbon Program are expected to store at least 100,000 tonnes of CO2 over the first five years, and the jurisdiction has already lined up buyers. Seattle-based tech giant Microsoft has committed to purchasing all of the rural-based credits that will be issued later this year through Verra’s VCS – of with London-based consultants Natural Capital Solutions having already pre-purchased the credits – while fishing company Fisherman’s Finest will purchase the urban-based offsets from the programme.

Flight flop – Less than half of the world’s major airlines are giving passengers the opportunity to offset the carbon dioxide produced from their flights, and when airlines do offer such a scheme, generally fewer than 1% of flyers are choosing to spend more. Of the 28 airlines approached, less than half offered an offset scheme and the majority declined to provide data on the number of passengers offsetting their flights during a one year period – often saying their figures were too low to report. (BBC)

EU appetites – The EU is currently using twice more than the EU ecosystems can renew and lacks sustainable consumption policies, according to a report by WWF and Global Footprint Network. It said the EU uses up almost 20% of the Earth’s bio-capacity although it comprises only 7% of the world population, meaning 2.8 planets would be needed if everyone consumed at the rate of the average EU resident, well above the world average which is approximately 1.7 planets. (Reuters)

Greening corporate Germany – German insurer Allianz aims to make the massive investments that back its business “climate-neutral” by 2050, meaning that the company will no longer invest money in shares or bonds issued by companies whose activity is harmful to the climate, AFP reports. As an asset manager, it manages a portfolio of €1,960 billion, but so far has applied no exclusionary policies to their placement. Meanwhile, privately-held German technology firm Bosch wants to become carbon neutral from 2020 in its scope 1 and 2 emissions by tapping more green power, ramping up energy savings and offsetting emissions using projects with “high standards” such as the Gold Standard having joined Germany’s Alliance for Development and Climate initiative. (AFP, Bosch)

Lab cash – Oil major ExxonMobil is promising up to $100m over the next 10 years to US government National Renewable Energy Laboratory and National Energy Technology Laboratory to research technologies including advanced biofuels and ways to capture and store carbon emissions. If paid at the rate of $10m a year, the pledge would represent a little under 1% of Exxon’s research and development budget of $1.12bn last year. (Financial Times)

Mile denial – Utility Exelon on Wednesday said it will shut down Unit 1 of its Pennsylvania-based Three Mile Island nuclear power plant by Sep. 30 after a roughly $500 mln bailout bill stalled in the state legislature. The company initially announced its plans for the plant’s permanent closure in May 2017, citing economic challenges and market flaws that fail to recognise the environmental and resiliency benefits of nuclear power in the state. However, this year’s proposal to add a nuclear carve-out to the state’s Alternative Energy Portfolio Standards (AEPS) elicited a flurry of criticism from both greens and some utility and industry groups, ultimately leading to the failure of the legislation. Dismantling the plant could take six decades and cost more than $1 bln, media reported, citing Exelon estimates. (Utility Dive)

Extra expenditures – California Governor Gavin Newsom (D) on Thursday released a revised state budget proposal, which builds on the $1 bln cap-and-trade expenditure plan released in January. The May revision targets an extra $251.5 mln in carbon allowance revenues to fund state initiatives, including one-time increases of $130 mln for programmes that reduce emissions from the transportation sector, $92 mln to support transformative climate communities through transit-oriented development and neighbourhood projects in disadvantaged communities, and $10 mln for climate-smart agriculture.

California counterfactuals – Had the other 49 US states reduced fossil fuel use relative to economic activity at the same pace as California since 1975, nationwide carbon emissions would have been lower by 1.2 bln tonnes, or 24%, in 2016, a new study found Thursday. The report, authored by green group NRDC and economist and policy analyst Charles Komanoff, found that California was able to cut its fossil fuel use relative to economic activity 18% faster than the rest of the country, thanks to a sustained commitment to efficiency and clean energy policies and programmes. Key policies the researchers attributed that achievement to include the state’s GHG targets, renewable portfolio standard (RPS), low-carbon fuel standard (LCFS) and clean vehicle standards, and coordinated investment in research and development in incentive programmes to bring technologies from the lab into widespread use.

And finally… No beef with this beef – The North Australian Pastoral Company will be launching the world’s first carbon neutral beef in July. CEO Phil Cummins announced the Five Founders brand at the 6th Australasian Emissions Reduction Summit in Melbourne on Thursday, at which delegates were served the beef the previous night. EY has independently verified the carbon neutrality of the product, which will be certified to the Australian government’s carbon neutral scheme.

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