CP Daily: Thursday June 4, 2020

Published 23:56 on June 4, 2020  /  Last updated at 23:56 on June 4, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

Bipartisan US lawmakers introduce carbon offsets bill for farms and forests

Bipartisan Senate legislation unveiled on Thursday would help rural US stakeholders participate in carbon markets, building on heightened attention this year for driving climate change mitigation in the country’s agriculture and forestry sectors.

PODCAST

CARBON PULSE CONVERSATIONS 012: RGGI Commissioners

In the latest installment of our Carbon Pulse Conversations podcast, we speak with former RGGI Commissioners Justin Johnson and David Littel about the upcoming 2021 programme review for the Northeast US power sector cap-and-trade scheme.

AMERICAS

NA Markets: California prices dip after May auction results, RGGI hits one-month high

California Carbon Allowance (CCA) prices slid following the Q2 auction and despite a legislative push to require an ETS rulemaking next year, while RGGI prices rose ahead of the programme’s own quarterly sale.

Judge to rule on Trump administration’s remaining WCI linkage challenge without public appearance

A federal judge will not hear oral arguments this month in deciding on whether the California-Quebec ETS linkage is a violation of the US Constitution’s Foreign Affair Doctrine, and has also rejected the state’s request to delay the court timeline to July.

EMEA

Increasing EU’s 2030 GHG target may be “premature” given virus impact -Polish experts

Raising the EU’s 2030 emissions target may prove risky as the economic impact of the coronavirus pandemic and a potential rebound cannot be properly estimated, according to senior Polish experts.

EU Market: EUAs hold above €22 despite analyst warnings

EUAs stayed above €22 for the second straight day on Thursday, further locking in this week’s big gains despite a weaker energy complex and bearish analyst comments.

ASIA PACIFIC

NZ Market: NZUs extend gains as bullish sentiment prevails

New Zealand carbon allowances saw strong gains for a third consecutive day on Thursday as expectations grow that the price will move towards the NZ$35 fixed price option (FPO) over time.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Summit later – An EU-China summit planned for September has been postponed to an unspecified date due to the coronavirus pandemic. The plan had been to convene European and Chinese leaders in Leipzig for what was pitched as a landmark occasion for the EU, falling under Germany’s Council presidency and Angela Merkel’s autumnal time in office, Politico reports. The summit had been billed as an opportunity to forge mutual higher climate ambition ahead of November UN climate negotiations, though that Glasgow COP26 meeting has been postponed for a year.

Fossil fall – The coronavirus outbreak could trigger a $25 trillion collapse in the fossil fuel industry by accelerating a terminal decline for the world’s most polluting companies, according to non-profit financial think-tank Carbon Tracker. It found that the value of the world’s fossil fuel reserves could fall by two-thirds, sooner than the industry expects, because the Covid-19 crisis has hastened the peak for oil, gas, and coal demand. (The Guardian)

German future – Germany’s €130 bln coronavirus recovery stimulus package has – as part of a €50 billion “future package” – earmarked €9 bln for the expansion of hydrogen capacity in a bid to meet emission targets. Germany eyes hydrogen capacity of up to 5 GW by 2030, with a further 5 GW to be installed by 2040 at the latest at a cost of about €7 bln, with the other €2 bln for forging partnerships with countries where hydrogen can be efficiently produced. The stimulus package also sets fixed prices for Germany’s EEG renewable energy surcharge, which will fall to €0.065 per kilowatt hour in 2021 and €0.06 in 2022, compared with €0.0676 this year. Germany said it will also oblige all petrol stations to offer electric car charging to help remove refuelling concerns and boost consumer demand for the vehicles. The coalition government resisted industry calls for a buyers’ premium for all types of cars, and instead opted to double subsidies for electric cars. Economists and researchers welcomed the focus on climate-friendly technologies but, like NGOs, criticised that the government missed the opportunity to fully align the programme with climate targets. (Reuters, Clean Energy Wire)

Buda-bond – Hungary has set a climate neutrality goal for 2050, in a law passed by parliament on Wednesday, signalling support for the EU net zero emissions strategy just one day after the government issued a €1.5 bln green bond, with the bulk of funds earmarked for the railway system. The law reaffirmed Hungary’s existing 2030 target of a 40% cut in emissions from 1990 levels, leaving the heavy lifting until next decade and causing observers to doubt the government’s commitment. (Climate Home)

Running towards the exit – Poland, the EU’s biggest hard coal producer, is considering closing at least three mines in the coming months as the coronavirus pandemic forces it to accelerate its exit from the sector, sources familiar with the matter told Reuters. Poland, the only EU member to refuse to pledge to become climate neutral by 2050, has long had a close relationship with coal, which has historically been a pillar of its economy. However the sector has often been loss-making in recent years, even as the state has sought to financially prop it up.

Shell offsets – Oil major Shell’s UK retail energy arm this week launched two new ‘carbon neutral’ energy tariffs for British households, combining its existing 100% renewable power offer with a promise to offset emissions from heating and cooking through investment in land-based projects, BusinessGreen reported. The move extends an initiative last year whereby the company offered carbon neutral driving to its motorist customers the UK and the Netherlands.

Young and promising – The world’s second-largest reinsurer Swiss Re is pushing for the development of carbon capture technologies, noting that while this industry is “still in its infancy,” it could bring a “wealth of opportunities for insurance and investments,” according to the firm’s annual study of emerging risks. Insurers and reinsurers stand to be among the biggest losers from rising global temperatures that can destroy homes and businesses, uproot populations and make entire regions uninhabitable. The industry has a responsibility to “uphold awareness of climate risks” and be an “effective partner for climate-risk adaptation and the transition to a low-carbon economy,” according to the study. (Bloomberg)

Stacked 16 – A new 12-person Democratic National Committee (DNC) panel stacked with progressive climate activists is calling on presumptive US presidential nominee Joe Biden to back a plan to spend up to $16 trillion to speed the country away from fossil fuels. The plan released Thursday from the DNC Council on the Environment and Climate Crisis calls for the US to ban fracking, deny new federal permits for fossil fuel infrastructure projects like pipelines, eliminate gas-fired heat and other fossil fuels in new buildings by 2025, and set vehicle fuel standards at levels so stringent they would halt the sale of new gasoline- or diesel-powered cars by 2030. The proposal is designed to pressure the party and its presidential nominee to take an aggressive stance on climate change, though the DNC is not obligated to adopt it. (Politico)

Taking their foot off the gas – Massachusetts Attorney General Maura Healey on Thursday called on the Department of Public Utilities (DPU) to open an investigation into the future of the Bay State’s natural gas industry as it transitions away from fossil fuels and toward net zero emissions by 2050. The AG’s office recommended that the DPU conduct a two-phased investigation, first requiring the gas companies to submit detailed economic analyses and business plans that project the state’s future gas demand in a carbon-constrained economy, including probable revenues, expenses, and investments. The second phase should then focus on how to develop and carry out the necessary changes in a way that protects the state’s gas consumers, the AG said.

Pipe out – A 240-kilometre pipeline that could hold the key to Alberta’s future as an oil and gas-producing region quietly opened this spring. Known as the Alberta Carbon Trunk Line, the pipeline captures CO2 emitted by a bitumen refinery and a fertiliser plant outside Edmonton, and carries it to an oilfield where it is pumped into the ground, where most of it is forever buried but some is used to increase the amount of oil recovered. At its current operational level, the pipeline is projected to capture 1.6 million tonnes of CO2 per year and has the capacity to capture an additional 13 million tonnes of CO2 per year if sources or emitters can be matched with destinations where it can be stored. (National Post)

And finally… It’s always money in Philadelphia – A federal judge on Wednesday signed off on a deal between the US EPA and bankrupt Philadelphia Energy Solutions that caps the refiner’s outstanding Renewable Fuel Standard (RFS) compliance obligations at $10 mln. The agreement, approved in the United States Bankruptcy Court for the District of Delaware, cuts the Philadelphia refiner’s regulatory liability by more than 70% from $35 mln from the original agreement, with the aim of freeing up cash for the company to pay off creditors. The company first filed for bankruptcy in Jan. 2018 and emerged that August, though a massive explosion caused by a faulty pipe last year led PES back into insolvency proceedings in July 2019. (Reuters)

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