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TOP STORIES: CARBON FAST FORWARD ONLINE
The UK is more likely to next year launch a standalone ETS rather than one linked to the EU scheme, and as such prices are expected to be far lower than in the continental market, a conference heard on Thursday.
Most EU ETS-covered industries are likely to face the maximum possible tightening of their free allocation benchmarks over the next five years, a German government official said Thursday.
The coronavirus pandemic is making it easier for the EU to raise its 2030 emissions target and tighten the ETS cap due to energy market dynamics and stronger political will, experts told the Carbon Fast Forward Online conference on Thursday.
European carbon prices spiked by 8% to a four-month high on Thursday on speculative buying, a bullish auction result, and as positive coronavirus news out of China helped lift wider markets, sending EUAs above their 200-day moving average for the first time since late last year.
Pressure is mounting on the Danish government to introduce a carbon tax to help achieve the country’s emissions reduction targets, despite its climate minister ruling out the idea amid coronavirus concerns.
California Carbon Allowance (CCA) values dipped beneath the 2020 WCI floor price this week amid increased selling, while RGGI allowances (RGAs) rose toward the Emissions Containment Reserve (ECR) trigger price on bullish outlook.
Obligated parties under the Renewable Fuel Standard (RFS) have submitted 52 compliance waiver applications in order to sidestep a federal court ruling this year that could otherwise pare back the EPA’s small refinery exemption (SRE) programme, agency data showed Thursday.
The governor of Jalisco announced this week that the jurisdiction will apply a CO2 levy starting next year, becoming the latest Mexican state to forge ahead on carbon pricing.
The International Energy Agency on Thursday outlined a $3 trillion coronavirus recovery plan that it says will reduce global 2023 GHG emissions by 4.5 billion tonnes of CO2e below BAU levels, all while adding to economic growth and saving or creating millions of jobs.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Warsaw says ‘nie’ – Poland will again reject on Friday the European Commission’s proposal to earmark a portion of EU ETS revenues for the bloc’s seven-year budget, its development minister Jadwiga Emilewicz has said. According to Emilewicz, it would heavily penalise EU countries highly dependent on coal. “It was not our choice at the end of the 1960s to invest more and more heavily in coal and to run power plants based on coal,” she said, according to the Financial Times. “It was decided in Moscow that we would be excluded from building nuclear power plants, whereas Czechoslovakia or Hungary could do that.” The European Council summit on Friday will probably see the Commission’s proposal to include EUA revenues as ‘own resources’ watered down, as any new resources require unanimity among the 27 members. Read Carbon Pulse’s briefing on the EU budget negotiations.
Capitals takeover – The mayors of the Visegrad 4 capital cities – Bratislava, Budapest, Prague, and Warsaw – signed a letter this week demanding EU leaders to support raising the bloc’s 2030 CO2 reduction target to 55% below 1990 levels, up from the current 40% target. “We are ready and eager to do our part … Capital cities are a significant source of GHG emissions, but also have a vast, untapped potential for reducing them,” they wrote. The statement comes after the governments of these countries largely opposed a more stringent 2030 target, which also determines the EU ETS emissions cap. Among the signatories was Rafal Trzaskowski, the mayor of Warsaw, who is running against the incumbent Andrzej Duda in Poland’s presidential election, with a first round of voting taking place on June 28.
Rescue strings – EU Parliamentarians have approved a sustainable finance “taxonomy” of green finance rules ensuring investments do not prop up polluting industries, requirements they and investors say should also guide the Commission’s proposed €750 bln coronavirus recovery fund. (Reuters)
Start spending – New Zealand Green Investment Finance (NZGIF), a government green fund set up in Dec. 2018, has made its first investment, ploughing NZ$15 million into cleaning up operations at the port in Wellington, reports Stuff. The funding will go towards moving to electric vehicles, generating renewable energy, and improving energy efficiency, all targeting reducing the port’s carbon emissions. The NZ$100 mln fund is hoping to raise private funding equal to or larger than its own investments as it builds its portfolio.
FERC CO2 price conference – The US Federal Energy Regulatory Commission (FERC) on Wednesday accepted a request from a broad coalition of renewable energy groups and independent fossil fuel generators to hold a technical conference to examine carbon pricing in wholesale power markets. Their request, signed by the American Council on Renewable Energy, the Electric Power Supply Association and others, does not seek FERC action to establish carbon pricing, but says a formal informational meeting could add to the agency’s record on the subject and inform “how best to move forward at the state and regional levels” on carbon pricing. A group of six Democratic senators subsequently urged FERC to hold the conference, now scheduled for Sep. 30. (Politico)
And finally… Can’t take the heat – A prolonged heatwave in Siberia is “undoubtedly alarming”, climate scientists have said, with the freak temperatures linked to wildfires, a huge oil spill, and a plague of tree-eating moths. On a global scale, the Siberian heat is helping push the world towards its hottest year on record in 2020, despite a temporary dip in carbon emissions owing to the coronavirus pandemic. Temperatures in the polar regions are rising fastest because ocean currents carry heat towards the poles and reflective ice and snow is melting away. Russian towns in the Arctic circle have recorded extraordinary temperatures, with Nizhnyaya Pesha hitting 30C on 9 June and Khatanga, which usually has daytime temperatures of around 0C at this time of year, hitting 25C on 22 May. The previous record was 12C. (The Guardian)
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