CP Daily: Friday June 5, 2020

Published 01:12 on June 6, 2020  /  Last updated at 01:36 on June 6, 2020  / Carbon Pulse /  Newsletters

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RGGI Q2 sale settles at discount despite Dominion participation

The Q2 RGGI auction settled below the secondary market, results published Friday showed, with a subsidiary of Virginia-based Dominion Energy participating in the sale prior to the state’s official entrance in the Northeast US power sector ETS next year.


California launches investigation into 15K livestock credits for regulatory violations

California regulator ARB opened an investigation on Friday into a Wisconsin-based livestock project for failing to meet regulatory compliance during its fourth reporting period, with nearly all the 15,000 credits under review used last year by an oil major.

California ETS rulemaking language necessary, though changes unlikely before 2022 -senator

A California budget proposal to amend the state’s WCI-linked carbon market would likely not make any near-term changes to allowance prices, but is necessary to ensure the scheme helps the state reach its long-term climate goals, a state senator told Carbon Pulse on Friday.

WCI regulated entities reduce California carbon positions as speculators’ holdings flatline

CI compliance entities cut California Carbon Allowance (CCA) holdings after the Q2 auction, while speculators’ kept their net long position roughly unchanged from the previous week, according to US Commodity Futures Trading Commission (CFTC) data released Friday.

LCFS Market: California credits approach price ceiling after amendments finalised

California Low Carbon Fuel Standard (LCFS) credits have closed in on the transportation programme’s impending price cap over the past week after a state agency gave final approval for that cost containment mechanism to take effect.


EU Market: EUAs surge nearly 5% to pre-lockdown levels above €23

EUAs surged by almost 5% to a three-month high on Friday, climbing back to pre-lockdown levels as oil gains and surprise US jobs numbers helped lift the wider energy complex and carbon’s technical signals continued to point north.

EU’s €10bln Innovation Fund corrects past mistakes, but inconsistencies remain, experts say

The European Commission has toughened its requirements to finance emissions reduction projects under its yet-to-be-launched Innovation Fund, but some stakeholders pointed out inconsistencies after the EU’s executive unveiled the mechanism’s funding criteria on Friday.


SK Market: CO2 prices sink to 9-month low as traders adjust to virus impact

South Korean CO2 allowances have slumped to their lowest level since last September on bearish economic data and plentiful supply ahead of 2019 compliance.

NZ Market: NZUs take another leap as buyers chase limited supply

New Zealand carbon allowances rose again in Friday trade, ending the week almost 16% above levels seen prior to the government’s Tuesday announcement on moving the fixed price option level.

CN Markets: Pilot market data for week ending June 5, 2020

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



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.



Zeroing up – The UNFCCC launched its ‘Race to Zero’ campaign to mark World Environment Day, comprising roughly 1,000 businesses with annual revenues totalling $4.72 trillion, as well as 458 cities, 505 universities, 24 regions, and 36 major investors. All have committed to submit a plan on how they intend to reach net zero emissions by mid-century – including interim milestones – ahead of the rescheduled Nov. 2021 COP26 climate summit. These now cover more than half of global GDP and a quarter of carbon emissions, as the pledges have grown 38% since December’s COP25 summit in Madrid. One notable newbie was UK engineering firm Rolls Royce, which pledged to become a net zero carbon business while developing new technologies that allow the hard-to-abate aviation, power, shipping, and rail industries to decarbonise in the same timeframe. The company announced it will publish a roadmap this year that sets out how it plans to align its business with the Paris Agreement’s 1.5C global warming goal, including proposals for reaching net zero emissions across its operations by 2030 and its wider footprint 20 years later. (BusinessGreen)

Metal health’ll drive you mad – The London Metal Exchange – the world’s major metal trading hub – plans to launch next year a platform to trade spot ‘low-carbon’ aluminium mostly produced with renewable energy. This marks the first time a metal will be traded based on its environmental footprint and will help determine if consumers were willing to pay a premium for low-carbon aluminium. Hydro-powered aluminium common in Europe produces about 4 tonnes of CO2 compared to 15 tonnes from coal-based output prevalent in China. (Financial Times)

Colombia cash – COP26 President and UK Business Secretary Alok Sharma marked World Environment Day with a £64 mln package of funding and support for tropical rainforests in Colombia, bolstering the nation’s efforts to protect the Amazon and tropical forests in Colombia, and its fragile ecosystem from deforestation. Part of the UK’s commitment to fighting global climate change, the package will strengthen Colombia’s land rights and criminal justice system, controlling deforestation while building a fairer, greener and more resilient rural economy in the region.

It’s still on – Climate change has been pushed off the front page in recent months amid the COVID-19 pandemic, but in South Korea on Friday, 226 of the nation’s 228 local governments joined together to declare a climate emergency. They said their jurisdictions would take the lead in guiding the country out of the crisis, and pledged to all set emissions targets in line with keeping global temperature growth to 1.5C. They also called on the National Assembly to set a path to net-zero emissions by 2050 as soon as possible.

Air dud – The US EPA on Thursday announced a change in how cost-benefit analyses are calculated for Clean Air Act regulations, in the midst of a pandemic made worse by polluted air. The rule change would mean the cost savings from the environmental and health benefits of new regulations, also known as co-benefits, couldn’t be factored into decisions. Co-benefits were often used by the Obama administration to justify new pollution restrictions, and critics say the move would make it harder to pass future limits on air pollution. Also yesterday, President Donald Trump signed an executive order that would allow agencies to ignore environmental laws such as the Endangered Species Act and the National Environmental Policy Act when approving new infrastructure projects because of the “economic emergency” created by the pandemic. However, critics say the move is legally shaky and will likely be challenged in court. (Climate Nexus)

The truck stops here – California regulator ARB will conduct a public hearing on June 25 to consider adopting the state’s proposed Advanced Clean Trucks Regulation, the agency announced Friday. This is the second of two board hearings on the item, with ARB staff slated to release the Final Environmental Analysis and its Response to Comments on the Draft Environmental Analysis for the proposed regulation before the meeting. It has not yet been determined if the meeting will take place in person at the ARB’s Sacramento headquarters or remotely.

The clearing price is right – ICE on Friday announced amendments to its California Carbon Allowance (CCA) Current and Advance Auction Clearing Price (ACP) contracts effective June 22, subject to completion of the regulatory review period. The amendments provide clarity to how the bourse will determine the settlement price of the ACP contracts if no auction price is published by the WCI auction operators. They also amend the last trading day provisions in both contracts to give ICE the flexibility to extend the last trading day for an expiring Auction Contract in the event that the auction, or publication of the auction clearing price, is temporarily delayed.

Clean deal – Clean energy firm ReNew Power on Thursday said it has inked a definitive agreement to acquire artificial intelligence and machine learning startup Climate Connect. The acquisition will give ReNew Power access to energy management services and will not only add to its digital capabilities, but will also allow it to offer a suite of digital product offerings to customers across the energy value chain, it added. ReNew Power plans to operate Climate Connect as an independent subsidiary that continues to focus on building a global team, world class data integrity and software development processes, as well as business development activities, it said. Climate Connect sold its own subsidiary CaliforniaCarbon.info earlier this year to Delhi-based sustainability advisory firm cKinetics.

And finally… Trash talk – Scientists announced Thursday that they had measured the highest monthly reading ever recorded of atmospheric CO2 in May. According to the scientists from NOAA and Scripps Institution of Oceanography, atmospheric CO2 measured at Hawaii’s Mauna Loa Observatory reached a seasonal peak of 417.1 parts per mln for 2020 in May – 2.4 ppm higher than the 2019 peak of 414.7 ppm recorded in May 2019. The scientists said the rate of increase during 2020 came despite the reduction in emissions due to the coronavirus pandemic, since the drop has not been wide enough to stand out from natural CO2 variability. “People may be surprised to hear that the response to the coronavirus outbreak hasn’t done more to influence CO2 levels,” said Scripps geochemist Ralph Keeling in a statement. “But the build-up of CO2 is a bit like trash in a landfill. As we keep emitting, it keeps piling up.” (Politico)

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