CP Daily: Friday November 22, 2019

Published 23:11 on November 22, 2019  /  Last updated at 23:13 on November 22, 2019  /  Newsletter  /  No Comments

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

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TOP STORY

Norway eyes cancelling 6 mln EUAs by 2030 to meet non-ETS reduction goals

The Norwegian government has proposed cancelling up to 6 million EUAs over the next decade to help meet the country’s non-ETS reduction goals.

AMERICAS

Oregon eyes January release for draft ETS proposal, as legislators still debating revisions

Oregon Democratic legislators are expected to unveil a draft cap-and-trade bill in mid-January, while lawmakers are still addressing possible revisions to build wider support for the measure, a state senator told Carbon Pulse.

Nevada to evaluate market-based climate policies as part of executive order

Nevada will consider market-based mechanisms among a host of possible carbon abatement strategies to achieve higher GHG reduction targets set by legislators this year, Governor Steve Sisolak’s (D) executive order stipulated Friday.

RGGI increasing CO2, co-pollutant burden on environmental justice communities -report

Low-income and disadvantaged communities experienced rising carbon emissions and greater exposure to particulate matter due to the Northeast US RGGI cap-and-trade programme design, a non-governmental organisation said in a report this week.

ASIA PACIFIC

China CDM cash to be used to fund gas projects

The Chinese government fund administering tax revenue from sales of UN-issued carbon credits has approved preferential loans to three new projects, including two natural gas distribution systems.

CN Markets: Pilot market data for week ending Nov. 22, 2019

Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.

EMEA

EU Market: EUAs jump 3% as bullish factors close out choppy trading week

European carbon prices rose by 3% on Friday, bolstered by colder weather forecasts, bullish comments out of China, and end-of-year buying, traders said.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Hydrogen hype – Australian federal and state energy ministers on Friday agreed on a national hydrogen strategy that aims to make the nation a world leader in clean hydrogen production by 2030. The plan will pave the way for increased production of hydrogen using fossil fuels with CCS or renewable energy, both for domestic use and export. However, earlier in the day the Australia Institute think-tank released a report saying the consulting that backs up the strategy had massively exaggerated export potential. For example, the minimum sales potential to Japan was set three times higher than the amount of hydrogen Japan plans to use in 2030. The think-tank also said that producing hydrogen from renewables in a cost-competitive way was at least 10 years away, meaning the production would rely on fossil fuels for now, the Guardian reports. The ministers also discussed climate policy and the Climate Solution Package. While discussions likely were concerning potential changes to the Emissions Reduction Fund, little seemed to come from it with the communique released after the meeting just noting that the issue had been discussed.

Ending the war – The right-wing government in New South Wales is preparing to roll out a new climate policy that would establish a special 3,000MW renewable energy zone that would get project-owners easier access to the grid, according to the Sydney Morning Herald. The state – which over the past two weeks has been harrowed by unprecedented bushfires that scientists say have been caused by climate change – is proposing the policy as a way to end Australia’s ‘climate wars’, said energy and environment minister Matt Kean. The plan would include setting up a facility that would let consumers buy carbon credits to offset emissions from their electricity consumption.

Rich and neutral – China can become a fully-developed economy that doesn’t produce any carbon emissions by mid-century. The nation’s high savings and investment rate allow for the spending required to meet the twin goals, according to a report by The Energy Transitions Commission, a global coalition of executives from across the energy landscape committed to the Paris Agreement. The move by the second-biggest economy toward zero emissions is critical for the world to counter climate change. While China has spent more money than any other country on clean energy, it’s still the biggest consumer of coal, and is estimated to have as much capacity in the pipeline as the current total in EU. The nation could triple its per-capita economic growth and standard of living while cutting final energy demand by 27% in 2050, said the ETC, which published the report in partnership with the Rocky Mountain Institute. That would require reductions in steel and cement use, a more circular use of materials such as plastics, and energy efficiency measures including the electrification of transport.

China cuts – The government of China has decided to reduce renewable power subsidies by 30%, from 8.1 bln yuan ($1.15 bln) in 2019 to 5.7 bln yuan in 2020. In 2020, around 52% of the subsidies will go to wind projects, 47% to solar parks, and 1% to biomass plants. China is phasing out public support for renewable power plants, as the fall in manufacturing costs is helping renewable projects to achieve grid parity with coal-fired power plants and to compete with them. Subsidies for large solar plants will be phased out soon and subsidies for new onshore wind projects could be removed at the end of 2021, in an attempt to reduce a subsidy payment backlog of at least 120 bln yuan. In Jan. 2019, the NDRC unveiled new solar and wind policies for the development of future subsidy-free projects. The renewable projects will generate power at the same price as non-subsidised coal-fired power plants and will not have to comply with any quota restrictions. However, wind and solar projects will receive governmental support on land and financing. Consequently, in May 2019, the commission and the National Energy Administration (NEA) of China approved 250 renewable power projects totalling 20,760 MW in 16 provinces that will be developed without subsidy. Most of the projects (168) will be solar PV projects, for a total capacity of 14,780 MW, followed by 56 wind projects (4,510 MW) and 26 “distributed trading pilot projects” (1,470 MW). (Enerdata)

Windfall tax – The UK’s main opposition Labour party manifesto for the Dec. 12 general election would hit oil and gas companies with a windfall tax of about £11 billion to finance plans to tackle the climate crisis and create 1 million green jobs. The oil levy would be used to pay for a ‘just transition fund’ to help retrain 37,000 workers in the industry to ‘make the transition to a clean economy’, while making the “substantial majority” of the way to net zero emissions by 2030.  That was somewhat of a climb-down from the party’s previous pledge to achieve carbon neutrality by the end of next decade. (Press Association)

Getting closer to connection – The European Council this week approved amendments to Annexes I and II of the Swiss-EU carbon market linking agreement, which update relevant aspects of the original annexes that were agreed in 2015. The updates mainly reflect changes in Swiss and EU legislation since the conclusion of those negotiations. It also provides for a provisional solution to operationalise the link between the two ETS’ – with a deadline set for May 2020, as expected. The EU-Swiss Joint Committee that oversees the market linkage is scheduled to adopt the amended annexes on Dec. 5.  After that, the linking agreement must be ratified on both sides before it can enter into force on Jan. 1, 2020.

Colombia cooperation – Business lobby IETA and the Association of Colombian Carbon Market Participants (Asocarbono) on Friday signed a Memorandum of Understanding to explore ways to work together to strengthen business capacity for the expanding carbon market in Colombia. The agreement, signed during Asocarbono’s first annual congress in Bogota, initiates a new programme of cooperation between the two business groups, according to a press release. The Colombian region of Boyaca launched Latin America’s first ETS in September, and the federal government is currently studying ways to implement a nationwide carbon market.

Six to shut – Maryland’s House Environment and Transportation Committee Chairman Kumar Barve (D) will introduce legislation in 2020 to shutter the state’s six remaining coal plants. In a conference call with reporters this week, Barve said he hadn’t settled on a timeline for shutting down the coal plants, and said he hoped Republicans, including Governor Larry Hogan, would support the measure. Meanwhile, New York’s last coal plant is expected to operate through the winter because of reliability concerns, despite regulators having filed to shut it down as soon as Feb. 15. (Maryland Matters, Utility Dive)

Ship shape – The UN shipping body IMO’s failure to agree on immediate climate measures means the incoming European Commission President Ursula von der Leyen must make good of her promise to include the maritime sector under the EU ETS, argues Sam Van den plas of campaign group Carbon Market Watch. Read Carbon Pulse’s latest on progress at the IMO, including industry suggesting charging ships a $2/tonne fuel tax.

Set on RECs – Virginia-based bourse Nodal Exchange and Chicago-based product development firm IncubEx announced on Friday they will launch three new Renewable Energy Certificate (REC) futures on Dec. 3, pending regulatory review. Nodal Exchange will list Texas Compliance Green-e Eligible REC Vintage Specific Front Half futures, Texas Compliance Green-e Eligible REC Vintage Specific Back Half futures, and New Jersey Class II REC futures. These contracts are only available on Nodal Exchange and feature vintages offered out to 2025, the companies said in a press release.

And finally… “A very beautiful madness” – From the time Spain offered to host this year’s UN climate talks after the Chilean government backed out less than a month ago, workers have been labouring around the clock to prepare Madrid’s Ifema conference centre for COP25, which will run for its originally scheduled Dec. 2-13 fortnight. On Oct. 31, Ifema director Eduardo Lopez-Puertas received the first call from Spanish energy transition minister Teresa Ribera asking for the availability of the site, and as early as Nov. 4, the Ifema machine started up. The usual suppliers were mobilised, with nearly 1,500 people brought in to set up the seven pavilions dedicated to the COP. Madrid has recruited in record time more than 400 volunteers, in addition to the 200 provided by the UN. “It’s madness, yes, but a very beautiful madness,” Lopez-Puertas said. (Le Monde, $)

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