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TOP STORY
ANALYSIS: WCI auction expected to clear under secondary market despite bull run
California Carbon Allowances (CCA) are expected to clear underneath secondary market levels at Tuesday’s WCI auction despite the recent price surge, as compliance entities seek out discounts at the quarterly sale.
EMEA
Merkel sets sights on a 2050 net zero emission goal for Germany
The German government will discuss how, rather than if, the country can achieve a 2050 net zero emissions goal, Chancellor Angela Merkel said on Tuesday.
€40 EUAs this year? Don’t rule it out, warns BloombergNEF
EU carbon allowances are expected to remain volatile for the rest of the year, analysts said, with prices seen ending 2019 within a wide range that is mostly well above current levels.
EU Market: EUAs race towards €26 on supportive auction, energy gains
EUAs surged by more than a euro in the final three hours of trade on Tuesday, reversing the previous day’s rapid afternoon loss as a stronger auction and supportive energy prices muted any selling.
AMERICAS
US Supreme Court denies industry appeal of Oregon LCFS
The US Supreme Court refused Monday to hear an appeal from several fossil fuel and business trade groups that challenged that the Oregon Clean Fuels Program (OCFP) illegally regulates interstate commerce, thereby allowing the state’s low-carbon fuel standard to withstand another legal test.
Analysts raising WCI price forecasts on rise of long-term speculative interest
The influx of speculators into the California Carbon Allowance (CCA) market over the past several months will tighten the amount of available permit supply and raise prices going forward, though little change to the WCI programme’s emissions profile is expected, analysts said Tuesday.
ASIA PACIFIC
Australia rejects cement firm’s carbon secrecy plea
Australia’s Clean Energy Regulator on Tuesday published CO2 caps for four installations operated by the nation’s biggest cement producer, rejecting the firm’s application to withhold the information and revealing that the plants have been granted the right to emit far more than they currently do.
CN Markets: Guangdong CO2 price stays firm as signs of compliance demand emerge
Guangdong carbon allowances inched up 1% in Tuesday trade to stay near 4-year highs, as emerging power sector demand adds to speculation-driven trade in China’s biggest emissions market.
NZ Market: Arbitrage trade helps keep lid on New Zealand CO2 prices
A steady flow of supply from emitters looking to raise cash to pay the NZ$25 fixed price option ahead of this month’s compliance deadline is keeping New Zealand carbon prices in check.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Horse trading – Oregon Republicans agreed to forgo protests over the state’s WCI-modelled cap-and-trade bill after reaching an agreement with Democrats to drop other legislation. Senate Republicans had walked out last week, and by doing so prevented the Senate from reaching a quorum. Governor Kate Brown (D) and Democratic leadership reached an agreement with Republicans over the weekend that would see legislation on vaccines and guns in exchange for support on an education bill. The agreement, according to Malheur Enterprise, would also prevent the Republicans from fighting the cap-and-trade bill, though as part of the negotiations GOP Sen. Cliff Bentz would be allowed to provide more input on the proposal going forward. Bentz has led the Republican opposition to the bill, and is a co-vice chair of the committee designing the proposal. Regulatory sources have said the bill is likely to pass after Democrats have spent nearly two years crafting the proposal. (Malheur Enterprise)
No brownouts here – California projects adequate power supplies to meet summer needs, mainly due to above-normal hydroelectric capacity this year, according to a new report from grid operator CAISO. The state said abundant hydro resources will play a major role in supplying electricity this summer, with the snowpack at 162% of the average as of Apr. 2, according to state data. Increased hydroelectric power usually reduces the amount of natural gas power used by the state and leads to a reduction of emissions from the sector. The state also said gas supplies will continue to be impacted by reduced capacity and restrictions on the Aliso Canyon storage facility.
Not letting up – Seizing a new opportunity they believe has been opened up by the White House, hardline foes of climate action on Monday once again asked the Trump Administration to reverse the EPA’s landmark ‘endangerment finding’ that allows the agency to regulate GHGs. The US Supreme Court in 2007 ruled that the EPA had authority to regulate those gases as pollutants if it found that they were a danger to human health and the environment. According to InsideClimate News, the Competitive Enterprise Institute (CEI), a conservative Washington DC think-tank and steadfast ally of the fossil fuel industry, has filed a petition with the EPA seeking to block the agency from continuing to use the finding, which it adopted in 2009 as a basis for policymaking and which served as the foundation for most of President Obama’s climate agenda. If the EPA were to suspend the endangerment finding, it would have profound consequences for rules the agency adopted under the Clean Air Act. The CEI’s new challenge is different: it doesn’t attack the science per se, but instead challenges the process that the EPA used to adopt the endangerment finding. CEI argues that the scientific peer review done at that time did not meet the government’s legal data quality requirements under guidelines expanded on Apr. 24 by Trump’s Office of Management and Budget.
Losing the will – The world “is moving in the opposite direction of the Paris climate pact goals, with investment in renewable energy falling for the second consecutive year”, according to new figures from the International Energy Agency (IEA). Spending on renewable power fell 1% to $304bn in 2018 – the lowest level since 2014. The new report from the world’s energy watchdog also warns that spending on fossil fuel extraction is rising, with expenditure in oil and gas extraction seeing a 3.7% increase to $477bn. Fatih Birol, the IEA’s executive director, said: “Compared to 2015 when the Paris climate agreement was signed, the appetite to push low carbon investments and policies is slowly fading.” He added: “If there was a bigger political will, we would have seen the numbers go the other way.” (Carbon Brief, FT)
Under pressure – Canada’s ruling Liberals are poised to force the federal Conservatives to clarify if they believe the country should meet its emissions targets under Paris Agreement. The motion calls on the House of Commons to recognise climate change as a “real and urgent crisis, driven by human activity,” that is causing floods, forest fires and extreme weather events. The motion comes as Tory Leader Andrew Scheer faces pressure to reveal his climate plan in the lead-up to this autumn’s federal election. The move will force Scheer’s MPs to vote one way or another on the Canada’s international commitments on climate change. (HuffPost)
Tax please – The CEO of European utility E.ON has called for a new carbon tax of €35/tonne in Germany, stating that a “better and fairer energy transition” was possible. The tax would be €35 per tonne emissions that result from the use of fossil fuels for power generation, transport, and heating. In a speech to shareholders in the western German city of Essen, Johannes Teyssen said such a tax, currently being discussed by the government, should not burden consumers and instead suggested revenues from the tax be paid indirectly back to them, according to Reuters. “We propose that the income from the CO2 tax goes towards financing the renewable feed-in law (EEG) of around €25 billion via the state budget,” he said. E.ON in 2016 spun off its coal- and gas-fired power stations into subsidiary Uniper, of which Finnish utility Fortum now controls 49.99%.
Steel your nerves – The UK government is drawing up contingency plans for the collapse of British Steel, UK’s second-biggest steel producer, Sky News reports from anonymous sources. The company faces administration as soon as Wednesday and is seeking a further loan of up to £75 mln from the government that sources say is part of the same package as last month’s £120 mln taxpayer bailout to cover EU ETS compliance (read Carbon Pulse’s take on that here). People close to the discussions blamed a slump in orders from European customers on Brexit concerns. Insolvency could in theory prevent the company from receiving its full allocation of EUAs, which were involved in the first loan agreement with the government and the sale proceeds of which are meant to be shared with taxpayers. (Sky News)
REC it up – On behalf of the Massachusetts Clean Energy Center, Evolution Markets will host an auction of renewable energy certificates (RECs) eligible for compliance under the Massachusetts renewable portfolio standard.For this auction MassCEC plans to offer 5,898 Vintage 2019 Class I Renewable Certificates generated in the third and fourth quarters of 2019. The auction, which will take place between 1030 and 1200 EST on May 21 will be conducted on Evolution Markets’ online auction platform, EvoAuctionSM.
And finally… Cap-and-charge – Swedish fintech company Doconomy has launched the first ever banking service and credit card to simultaneously manage your personal finances and your daily carbon emissions. The DO Black Card is a collaborative effort with Doconomy, Mastercard, and the UNFCCC. The card complements users’ existing banking services, but the accompanying app tracks the carbon emissions associated with each DO card purchase and caps the cardholder and the limits they set for themselves. According to inhabitat, not only is the DO Card the first to explicitly track emissions associated with personal finance purchases, the card itself is made from bio-sourced materials and printed with Air-Ink, a recycled ink made with air pollution particles such as soot. Cardholders also have the opportunity to offset their emissions through the UN’s CDM-backed Climate Neutral Now programme.
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