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ANALYSIS: RGGI participants expect Q2 auction settlement near secondary market, with potential Virginia surprise
Market participants anticipate Wednesday’s Q2 RGGI sale will settle close to the secondary market price despite expectations that emissions are dropping due to the COVID-19 pandemic.
In the latest edition of our Carbon Pulse Conversations podcast, we chat with Cristian Mosella, co-founder and executive director of Chilean consultancy EnergyLab, about the South American country’s recent COP25 presidency, its updated Paris Agreement NDC, and developments regarding a potential emissions trading programme and the current carbon tax.
EUAs jumped by more than a euro to above €22 on Tuesday, eclipsing the previous session’s losses as colder weather prospects and acute short-term supply problems lifted much of the energy complex.
Most EU countries have set insufficient emission targets in their climate roadmaps for 2030 and should review the plans, focusing on non-ETS sectors where ambition falls significantly short of achieving the 27-nation bloc’s targets, according to environmental NGOs.
New Zealand carbon allowances shot to their highest levels in three months on Tuesday after the government announced it would increase the fixed price option level for major emitters.
RIN prices climbed to levels not seen in more than two years on Monday as obligated parties under the Renewable Fuel Standard (RFS) continued to show strong demand for credits, but some questioned the sustainability of the bull run.
Britain is aiming to establish its own domestic carbon market from 2021 that may or may not link to the EU ETS, the UK government confirmed on Monday as part of its long-awaited response to a public consultation, proposing a few ambitious features of its own.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Nothing’s changed – China will not adjust its climate change targets in the aftermath of the coronavirus crisis, an environment ministry spokesman told reporters Tuesday, Reuters reports. That might reassure observers that the economic situation won’t bring with it lower climate ambition, but the spokesman also indicated strongly China is not about to increase its ambition under the Paris Agreement.
Rescinded regs – President Donald Trump’s administration says it could rescind requirements for oil and gas companies to reduce their emissions of methane by the end of next month. The US EPA on May 29 submitted its final rule on the methane standards for internal review, according to a court filing. If the White House Office of Management and Budget approves a request to expedite internal review, the agency anticipates it can finalize the rule by the end of July. Oil and gas companies have been complying with the methane restrictions since 2016. The rule was the last major climate regulation issued under former president Barack Obama, but it only applied to new and heavily modified facilities. Those facilities were required to install low-emissions equipment, look for methane leaks and make timely repairs. (Argus)
Football forests – An area of intact forest the size of a football pitch was lost every six seconds globally last year, according to new satellite data, the Guardian reports, citing data released by the Global Forest Watch – a programme of the World Resources Institute. Nearly 12 mln hectares of tree cover was lost across the tropics, including nearly 4 mln hectares of dense, old rainforest that held significant stores of carbon and had been home to a vast array of wildlife. The biggest surge in forest loss was in Bolivia, where fires led to an 80% greater reduction in tree cover than in any previous year on record. Brazil was responsible for more than a third of the loss of tropical forest. (Carbon Brief)
Cash removals – Swiss startup Climeworks has raised $76 mln from a private funding round – the biggest private investment in a direct air capture firm to date. The firm intends to use the proceeds to build a new plant with a capacity of about 100,000 tonnes of CO2 a year and a start date as early as 2022. (Bloomberg)
Banking off coal – Six more financial institutions have signed up to the cross-stakeholder Powering Past Coal Alliance (PPCA), taking to 16 the number of investors on board and pledging to cut off financing to the coal industry and boost investment in clean energy infrastructure as part of efforts towards a 2030 global phaseout of unabated coal power. The six institutions are the UK’s Aberdeen Standard Investments, Legal & General, and the Church of England Pensions Board, plus Canada’s Desjardins, Netherlands’ Robeco, and insurance giant Swiss Re. (BusinessGreen)
Deadline delay – Amendments to the Canadian ‘backstop’ output-based pricing system (OBPS) regulations came into force on Sunday that push back the large emitter programme’s 2019 compliance deadline to Apr. 15, 2021 from Dec. 15, 2020, the environment ministry announced Monday. The change, proposed this spring due to the coronavirus pandemic, also sees the market-based regime’s verified GHG reports for 2019 postponed until Oct. 1, 2020 from June 1.
Be brief – A group of Canadian environmental and law organisations on Monday released a policy brief for building the legal foundation for the country to reach net zero emissions by 2050. The paper proposes a framework for a new Canadian Climate Accountability Act that would enshrine the nation’s ambitious commitment made last year by Prime Minister Justin Trudeau.
Ag-berta – The Alberta government on Monday announced an ‘Emissions Reduction Alberta (ERA) Challenge’ to speed innovation and curb GHGs in the agriculture, agri-food, and forestry sectors. A total of C$40 mln for the initiative will come from revenues via the province’s TIER regime, the market-based large emitter programme. The government will hold a webinar on the challenge on June 29, and the deadline to apply is Aug. 27. (High River Online)
1-877-Kash4Kars – A government-backed purchase premium on all new vehicles bought in Germany would lead to a rise in CO2 emissions, according to a study by the International Council on Clean Transportation (ICCT). The research organisation found CO2 emissions would increase by 1% if a scheme covered all car types, but would fall by 62% if it targeted only battery-powered vehicles. If a subsidy programme was limited to vehicles that meet the EU’s 2021 CO2 emissions target (110 g/km), a fall of 28% is expected. The study coincided with a report by the ifo research institute that casts doubt on the economic benefits of scrappage schemes, whereby new car buyers receive a bonus in exchange for trading in their old vehicle. The subsidies lead to a short-term boost in sales but a substantial fall in the medium term. (Clean Energy Wire)
And finally… Countdown to extinction – The sixth mass extinction of wildlife on Earth is accelerating, according to an analysis by scientists who warn it may be a tipping point for the collapse of civilisation. More than 500 species of land animals were found to be on the brink of extinction and likely to be lost within 20 years. In comparison, the same number were lost over the whole of the last century. Rising human population, destruction of habitats, the wildlife trade, pollution, and climate change must all be urgently tackled to stop the extinction, the scientists added. (The Guardian)
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