Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here

TOP STORY

EU nations back adjusted CORSIA baseline, dimming outlook for airline offset buying

EU nations on Tuesday decided to back a plan to modify the emissions baseline for the UN’s CORSIA international flight offsetting mechanism, teeing up a global decision this month that is expected to eliminate airlines’ carbon credit demand in the burgeoning market until the mid-2020s.

AMERICAS

ANALYSIS: Alberta offset prices to remain stable despite COVID-19 impacts

Alberta offset values under the province’s large emitter programme will keep steady despite the economic impacts of the coronavirus pandemic, with bullish expectations of a rising CO2 price likely to counteract minor contractions in demand in the short-term, project developers and market participants said.

Trump admin claims WCI linkage directly violates US Constitution, maintains connection to Paris Agreement

California’s carbon market linkage with Quebec represents a direct conflict with the US Constitution’s Foreign Affairs Doctrine and subverts the Trump administration’s ability to negotiate an equitable international climate agreement, the Department of Justice (DOJ) argued in a new brief.

Maine seeking to finalise RGGI regulation next month

Maine’s Department of Environmental Protection (DEP) is aiming to send a completed RGGI regulation for final approval next month, a department spokesperson told Carbon Pulse.

EMEA

Carbon pricing alone won’t decarbonise EU heavy industry, say researchers

Europe’s cement and steel industries need a mix of transition policies and a revision of their free EUA allocations to reach the EU’s 2050 net zero emission objective, experts said at a webinar on Tuesday, noting that the bloc’s carbon market is not enough to get there.

EU Market: EUAs drop further from €23 as technicals weaken

EUAs ended near €22.50 on Tuesday, continuing to ease back from Monday’s three-month high as previously bullish technical signals grew more mixed.

ASIA PACIFIC

NZ Market: NZUs soar to record high above NZ$30 as bullish sentiment dominate

New Zealand carbon allowances traded up to an all-time high of NZ$30.75 ($20.13) on Tuesday, smashing the previous record as the market continued to move north on the back of last week’s government announcement on adjusting the fixed price option level.

Tianjin auction offers cheap lifeline for emitters, quick profit for investors

China’s Tianjin has set the price floor for the market’s annual CO2 allowance auction on Wednesday, offering emitters and investors a shot at securing permits at as much as 25% below the secondary market.

———————————

BITE-SIZED UPDATES FROM AROUND THE WORLD

Early closing – The world’s coal and gas-fired power plants would have to shut down 10-30 years sooner than their usual 35-to-40-year lifespan so that global climate targets can be met, according to a study published in the scientific journal Environmental Research Letters. (Journal de l’environnement, EurActiv)

Link re-think – The EU will refuse to link its ETS to any new British carbon market without guarantees that it won’t undercut the bloc’s scheme, said diplomats and officials familiar with ongoing Brexit talks, adding that a connection similar to the EU-Swiss ETS link is off limits for the UK. London has so far been unwilling to include binding climate commitments in the new EU-UK deal, while Brussels wants guarantees that one party could not gain an unfair competitive advantage through future decisions on carbon pricing – a “level playing field” principle the EU is pursuing across other policy standards from labour to state aid. The UK presented plans last week to launch its own ETS from 2021 after it leaves the EU scheme, and it said the two could be linked “if it suits both sides’ interests”. But two EU sources said the kind of trading link Switzerland has with the bloc was not doable. “The UK and Switzerland are different cases entirely. The UK would be much more of a threat to our own ETS if they are linked without stronger safeguards,” one diplomat told Reuters. The UK’s scheme, which based on the design plans could be up to a tenth of the size of the EU’s annual emissions cap with it launches, would be much larger than the Swiss ETS, which linked to the EU market this year and features annual emissions below 10 million tonnes.

Breakin’ the law – Germany’s domestic ETS for heat and transport that is to start next year is “unconstitutional”, according to advice prepared for the opposition liberal Free Democrats (FDP). The FDP would strive for a judicial review of the law in a bid to head off potential legal challenges, the party’s climate spokesman Lukas Koehler told a press conference in Berlin on Tuesday. The FDP’s advice focused on the nature of the scheme’s transition from a fixed price to a cap-and-trade system. Germany’s plan would see a levy of €25 in 2021 grow to €55 in 2025, and then be replaced by trading scheme with a €55-65 price collar in 2026. The absence of a cap on supply together with a fixed price over the first part of the scheme was “clearly unconstitutional”, said the author of the FDP’s advice, tax law expert Rainer Wernsmann of the university of Passau. But the FDP may struggle to find the required quarter of parliament to support a judicial review as it holds just 11% of seats. Koehler hoped to recruit support from the Greens and Left party, adding all parties had an interest in ensuring German laws conformed to the constitution. Private sector legal challenges are likely to emerge next year as companies could only take a case to court once they had been affected, Koehler said. (Montel)

Coal streak – At midnight on Wednesday the UK will have gone two full months without burning coal to generate power, beating last year’s 18-day streak. When Britain went into lockdown, electricity demand plummeted; the grid responded by taking power plants off the network and the country’s four remaining coal-fired plants were among the first to be shut down. For the first time, renewables has exceeded fossil output. Renewables were responsible for 37% of electricity supplied to the network versus 35% for fossil fuels. (BBC)

Coal bleak – Combined European and Mediterranean thermal coal imports could plunge 40% to a record low of 42.8 mln tonnes this year amid poor generation demand, the director of consultancy Perret Associates said Tuesday. The total would be 30 Mt down on the year and less than a third of the import volume recorded just half a decade ago, Guillaume Perret told Montel. Perret attributed the decline in part to persistently low gas prices and an elevated carbon market. “[This has meant] the clean dark spreads have remained heavily negative and much lower than the clean spark spreads even for baseload generation,” he said.

Green back(down) – Ireland’s Green Party has been plunged into further unrest after leader Eamon Ryan signalled he is prepared to compromise on its push for domestic carbon tax receipts to be refunded to households, as the party continues negotiations with Fine Gael and Fianna Fail to form a coalition government. Sources said that the Greens had been fighting hard for a so-called ‘fee-and-dividend’ approach as recently as the weekend, but claimed that Ryan has now rowed back on the demand as efforts continue to reach a deal this week. The ruling Fine Gael party and rival Fianna Fail are on the verge of forming a coalition government with the Greens some four months after the general election ended in a three-way stalemate. The two centrist parties released a draft framework in April that sets out 10 key policy promises, one of which is a plan to raise Ireland’s domestic carbon tax in line with a cross-party trajectory agreed last year, which would see the levy on fossil fuels climb to €80/tonne by 2030 from €26 currently. (Independent.ie)

Brief extension – China was meant to cut all subsidies for solar and wind power after this year in a move to cut overcapacity in the sector and force facilities to compete with coal-fired power on price. However, some individual projects under construction have received an extension due to the COVID-19 pandemic, and on Tuesday Bloomberg reported Shanghai has extended the subsidies through 2021 for solar and offshore wind, as the first jurisdiction in China to do so.

The Penn is mightier than the sword – Pennsylvania’s Republican-controlled House Environmental Resources and Energy Committee on Tuesday advanced to a full floor vote HB-2025, which would prohibit Governor Tom Wolf’s (D) administration from joining the Northeast US RGGI carbon market without legislative approval. Despite the move, Wolf said during a press conference on Monday that he will veto the legislation, asserting that he does indeed have the legal authority through Pennsylvania’s Clean Air Act to enact a power sector ETS, tentatively slated to start in 2022. The Pennsylvania Department of Environmental Protection’s Environmental Quality Board (EQB) is slated to vote on approving the state’s draft cap-and-trade regulation on July 21, opening up a public comment period this fall. (PA Environment Digest Blog)

+44 – A bipartisan group of 44 US House members on Monday called on President Trump to deny requests by oil states to grant waivers to Renewable Fuel Standard (RFS) requirements. The missive comes after a bipartisan Senate letter last month asked Trump to order EPA to leave the programme intact. Both refiners and ethanol producers have been strained by the collapse in demand for gas brought on by the coronavirus epidemic, and both have gathered allies to attack or defend the programme. (Politico)

Hack job – A report released by Citizen Lab, a cybersecurity watchdog group at the University of Toronto, has revealed details of a widespread ‘hacking-for-hire’ operation that it alleges could have links to oil major ExxonMobil. The campaign has been targeting email accounts of government officials, journalists, banks, environmental activists, organisations, and other individuals for at least four years. According to climate activists 350.org, the report discovered a large cluster of targeted individuals and organisations that were engaged in environmental issues in the US. Allegedly, these organisations were all linked to the #ExxonKnew campaign that has highlighted documents pointing to Exxon’s decades-long knowledge of climate change.

That kid with the carbon credits said “Radicle” – The CCSI Group of Companies on Monday announced it is consolidating all of its efforts under a new name, Radicle. Started in Calgary 12 years ago, the firm incorporates offset project developers and consultancies Carbon Credit Solutions Inc, Climate Smart Group, Cap-Op Energy, TriCore Carbon Solutions, and Carbon Solutions Group.

And finally… Crystal mirrors – Experimental marine geoengineering schems are “distracting technofixes” that violate an international moratorium on the largely untested tech projects, the HOME coalition of nearly 200 environmental groups has said. One such plan, which began preliminary experiments last month, involves spraying trillions of microscopic salt crystals into the air above Australia’s Great Barrier Reef. Its proponents hope that the salt will mix with low-altitude clouds, making them brighter and able to reflect more sunlight away from the reef. But HOME said the project contravenes a 2010 UN moratorium on ocean geoengineering. (AFP)

Got a tip? Email us at news@carbon-pulse.com