CP Daily: Monday June 15, 2020

Published 00:51 on June 16, 2020  /  Last updated at 01:04 on June 16, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

ANALYSIS: From black sheep to blue chip, offsetting wages battle for acceptance

Long seen as a shortcut for corporate climate action, offsetting is aiming for a major credibility boost this year, in a process that could transform the voluntary and compliance carbon markets.

EMEA

ETS a sticking point as EU ministers fail to unite on energy’s recovery role

A spat about the ETS has played a part in EU energy ministers failing to adopt a united line on the energy sector’s response to the COVID-19 pandemic, Carbon Pulse has learnt.

Ireland’s carbon tax to rise further under new coalition government

Ireland is set to steepen the trajectory of its rising domestic carbon tax under an agreement reached by party leaders this weekend to form a new coalition government after months of stalemate.

Switzerland cancels second straight carbon allowance sale over low demand

Switzerland has cancelled its second straight carbon allowance auction due to low demand, the government announced Monday.

EU Market: EUAs lift from two-week low as oil, equity jump eclipses virus worry

EUAs lifted back above €22 in line with oil and equity gains on Monday, recovering from a two-week low amid wider fears that a second wave of COVID-19 cases will weigh on global recovery prospects.

AMERICAS

California ETS rulemaking proposal passed by Assembly, Senate

The California legislature passed a budget provision on Monday that directs regulator ARB to conduct a rulemaking on the WCI-linked cap-and-trade programme by next year, sending the measure to the governor for final approval.

California court upholds ban on San Diego County voluntary offset programme

A San Diego County provision for rural housing developments to utilise out-of-jurisdiction carbon credits violates the California Environmental Quality Act (CEAQ) because it lacks stringent language on additionality and environmental integrity, California judges ruled Friday in support of a lower court ruling.

ASIA PACIFIC

Fossil fuels rise sharply as China recovery gets underway

Thermal power generation in China rose sharply last month, according to official data, indicating a rapid rebound in CO2 emission levels as the world’s second-biggest economy strives to get back on track.

VOLUNTARY

Unilever sets 2039 full-scope net zero emissions target, launches €1 bln fund

Consumer goods firm Unilever has bolstered its voluntary climate goal, pledging on Monday to reach net zero emissions from its operations and products by 2039 while launching a €1 billion climate and nature fund to be spent over the next decade.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Big bovines – The biggest 13 dairy companies in the world have the same combined GHG emissions as the UK – the sixth biggest economy in the world – according to a report by Institute for Agriculture and Trade Policy (IATP) in the US. Their collective emissions rose 11% in the two years after the 2015 Paris Agreement, largely due to consolidation in the sector that has forced milk prices below the cost of production. The researchers say caps on production should be reintroduced to protect both the climate and small farmers. (The Guardian)

Slash & burn – BP will write off up to $17.5 bln from the value of its assets as the UK oil major revises longer-term energy price assumptions with the expectation of a quicker shift away from fossil fuels. BP said coronavirus will have a lasting impact on the global economy as well as oil and gas demand and sees the pandemic only accelerating a global shift towards cleaner forms of energy. Under its new chief executive Bernard Looney, the company is undertaking an overhaul of its business as it becomes a leaner organisation that is fit for the energy transition. (FT, Carbon Brief)

Fossil farewell – The UK is planning a new climate strategy that would phase out financial support for oil and gas infrastructure in developing countries ahead of the UN’s COP26 climate talks next November. The UK Export Finance (UKEF), a government credit agency, has offered loans, guarantees, and insurance worth at least £3 bln to UK companies involved in foreign fossil fuel projects since the Paris Agreement, according to figures unearthed by Global Justice Now. The group also found that the government’s development bank, CDC Group, has directly invested at least £300 mln in high-emissions projects in Africa and south Asia, including fossil fuel power plants and cement-making. (The Guardian)

Green hurdles – Reuters says it has seen government documents showing that Germany is set to seal deals to remove two stumbling blocks to hitting its target for green energy to reach 65% of production by 2030. A draft of an addendum to a law on energy in buildings shows the removal of a solar capacity cap of 52 GW and a general rule to build wind turbines 1,000 meters away from homes are set to be passed at the June 18 cabinet meeting. (Carbon Brief)

Pentalateral – Energy ministers from Austria, the Benelux, France, Germany, and Switzerland signed a joint political declaration on clean hydrogen as a result of the Pentalateral Energy Forum. The countries believe scaling up hydrogen will contribute to fully decarbonising Europe’s energy systems, and commit to take a joint approach, identifying common objectives and assessing “the role of CO2 prices in the hydrogen market”. This comes right after one of the signatories, Germany, released last week its much anticipated €9 bln hydrogen strategy, while the European Commission is meant to present an EU-wide landmark document on June 24. According to the signatories, the Commission’s strategy must “secure Europe’s position as a front runner in innovation, industrial competitiveness and decarbonisation.”

Can’t stop, won’t stop – A 15 billion crown ($1.6 billion) expansion of Sweden’s biggest oil refinery, can go ahead, a court ruled on Monday, potentially creating the country’s biggest polluter and running counter to the government’s promise to cut emissions. The expansion of Preem’s Lysekil refinery would see its emissions increase by 1 Mt to 2.7 mln per year, making it Sweden’s biggest emitter of GHGs. The court said it had no means to stop the expansion of the plant, planned for a decade, as it adhered to EU rules. “The so-called stop rule in the Environmental Code cannot be applied to operations that are part of the EU [ETS],” the court said. The ruling kicks the issue into the hands of the government – a minority coalition of the Social Democrats and Greens that has promised both more jobs and to lower GHGs. Deputy Prime Minister Isabella Lovin of the Green Party said in a statement the government would now look at whether to permit the expansion, but gave no date for a decision. (Reuters)

Woody costs – The UK’s exit from the EU provides Britain an opportunity to rethink its biomass policies that zero-rate sustainable wood-burning under carbon pricing, according to environmental think-tank Ember. It found that energy bill payers committed to subsidies of more than £13 billion, including £10 bln at Drax’s power station alone, while biomass generators are receiving carbon tax breaks of £333 mln a year. Read Carbon Pulse’s article on Ember’s earlier study for the whole of the EU that suggests biomass policies put at risk global climate targets.

Reverse of the medal – Converting farmland into forests is one common way for farmers or project developers in New Zealand to generate carbon credits that currently sell in the domestic ETS for around NZ$31.40/t ($20.23). But while tree planting plays a crucial role in the nation’s strategy to cut emissions, this is hollowing out rural communities, according to critics, who say speculators are buying up land that otherwise would have been farms to keep forests on indefinitely. That means a falling rural population, closing of rural schools, and a loss of jobs for the greater community, they add. (Stuff)

Fossil farms – The US Department of Agriculture, which manages the country’s national forests and grasslands, will prioritise oil, logging, mining, and grazing, according to a memo issued by Agriculture Secretary Sonny Perdue on Friday. The directive is consistent with President Donald Trump’s executive order to expedite fossil fuel extraction and other projects on federal lands and would limit the number of pages and time spent to complete environmental documents. (Climate Nexus)

Essence precedes existence – The US EPA has placed so-called ‘gap-filling’ compliance waiver petitions from small refiners under the Renewable Fuel Standard (RFS) in an administrative hiatus to avoid reporting their existence in the agency’s public dashboard created by Administrator Andrew Wheeler to increase transparency, oil industry sources tell Politico. Wheeler and Under Secretary of Energy Mark Menezes last month indicated that small refiners have petitioned the EPA to grant them economic hardship status going years back. This is a response to a federal court decision this year that said only facilities that had obtained those exemptions continuously since they were first offered in 2013 were eligible to receive them for the current year, sources told the news outlet.

And finally… Serve the insurgents – The Democratic National Committee’s (DNC) council on climate change irked party leadership when it published policy recommendations this month that ventured beyond US presidential candidate Joe Biden’s plan, three people familiar with the matter told Reuters. Members of the DNC Environment and Climate Crisis Council, formed last year, published proposals for the party’s four-year platform earlier this month, calling for up to $16 trillion in spending to shift the US economy away from fossil fuels while banning hydraulic fracturing and oil and gas exports. However, one senior Democrat familiar with the DNC’s workings said climate council members overstepped by putting out recommendations that are unlikely to be adopted in the party’s platform, which will be drafted by a DNC committee before its August convention. Additionally, two people close to the DNC said the council blindsided the party by publicly releasing the 14-page document. “They acted like insurgents within the party trying to stake out a left flank before the convention,” one of the sources said.

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