CP Daily: Tuesday September 1, 2020

Published 01:33 on September 2, 2020  /  Last updated at 02:15 on September 2, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

Traders foresee secondary market discount for RGGI Q3 auction settlement, despite price surge

RGGI market participants largely anticipate the September auction will settle underneath the secondary market, although aggressive compliance buying could potentially see the quarterly sale eclipse current price levels.

AMERICAS

ANALYSIS: Canadian large emitters unlikely to use Alberta offsets for 2019 OBPS compliance

Companies may not utilise Alberta offsets for 2019 obligations under Ottawa’s ‘backstop’ output-based pricing regulation (OBPS) because of a lack of available credits, quick turnaround to surrender units ahead of the inaugural compliance deadline, and differing CO2 pricing levels, traders and analysts said.

California invalidates credits from third offset project for regulatory compliance issues

California regulator ARB voided nearly a third of the offsets from a Wisconsin-based livestock project under review on Tuesday after concluding the dairy digester was not in regulatory compliance.

California fuel sales bounce back in May after coronavirus-fuelled plunge

California fuel consumption rebounded in May after hitting historic lows during April, but the year-to-date total remains significantly below 2019 due to the COVID-19 pandemic, according to state data released Monday.

Global trading firm registers for RGGI after operating in California-Quebec ETS

A global trading firm opened a RGGI CO2 Allowance Tracking System (COATS) account this week, representing the 10th new speculator and latest financial entity to transition into the Northeast US power sector carbon market after participating in WCI cap-and-trade programme.

EMEA

Higher EU 2030 emission goal “doable”, says Commission climate chief

An more ambitious EU 2030 GHG reduction target makes sense amid the coronavirus crisis and is due to be proposed by the European Commission within weeks, the EU executive’s climate chief Frans Timmermans said on Tuesday, as lawmakers struggle to agree on how much higher the goal should be.

EU Market: EUAs fall 3.2% to below €28 as full-sized auctions return

EUAs slipped below €28 as full-sized auctions resumed on Tuesday, with prices retreating further from Monday’s stint above €30 in defiance of mostly bullish expectations and a more positive macro economic outlook.

MEPs demand EU ETS revenues form part of EU recovery budget

The EU’s seven-year budget and COVID-19 recovery plan must include funding ETS revenues from next year, a European Parliament committee said on Tuesday, firming the assembly’s resistance on how the bloc’s bailout plans are paid for.

UK carbon specialist joins London-based trading firm CF Partners

A veteran UK-based carbon consultant has joined London-based trading house CF Partners, aiming to develop a deeper service for British emitters navigating post-Brexit carbon pricing.

ASIA PACIFIC

Australia relinquishes nearly 100k carbon credits

Australia’s Clean Energy Regulator has relinquished nearly 100,000 carbon credits after project owners initially submitted misleading data.

Queensland govt fund offers A$93 mln to 21 carbon offset projects

The Queensland state government in Australia has offered A$93 million ($68.7 mln) to 21 carbon offset project applicants under the first investment round of its Land Restoration Fund, Premier Annastacia Palaszczuk said Tuesday.

Tianjin reports 100% ETS compliance after record trading volumes

All 113 companies participating in Tianjin’s pilot emissions trading scheme met the 2019 compliance deadline this week, the municipal government announced Tuesday, after an extra auction for struggling firms last week and record trading volumes in recent months turned up sufficient supply.

VOLUNTARY

CORSIA impacts weighing on otherwise resilient voluntary offset prices -developer

Voluntary carbon offset prices are steady this year as demand largely keeps up, but the COVID-19 pandemic’s disproportionate impact on international air travel and changes to the global aviation offset mechanism CORSIA are exerting bearish pressure, a project developer said Tuesday.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Renewables rising – Wind and solar made up 67% of the 256 GW in new power generating capacity added worldwide in 2019, widening their gap with fossil fuels, which fell to 25%, per new data from BloombergNEF. On a generation basis, wind produced 6% of global power last year and solar accounted for 3%. BNEF also found that “gas and hydro remain the second and third most popular technologies globally on a megawatts-installed basis and continue to expand”, though they grew by just 1% from 2018 to 2019, the smallest rate of change in a decade. (Axios)

Dragging heels – Only one in 10 energy suppliers globally has prioritised renewables over fossil fuels, and even those that are spending on greener energy are continuing to invest in CO2-heavy coal and natural gas, according to a study led by a researcher from Oxford University’s Smith School and published in the journal Nature Energy. The research looked at more than 3,000 electricity companies worldwide and used machine learning techniques to analyse their activities over the past two decades. (BBC)

Steel start – Swedish green steel venture HYBRIT, developed by state-owned steelmaker SSAB, utility Vattenfall, and miner LKAB, started test operations at its pilot plant on Monday. The HYBRIT project aims for the first fossil-free steel to be commercially available by 2026, and to become fossil free in its operations by 2045. (Reuters)

Greening up – Emissions from Britain’s electricity system dropped by more than a third during the coronavirus lockdown after renewable energy played its largest ever role helping to keep the lights on, according to a quarterly report undertaken by Imperial College London for power firm Drax. Electricity demand fell by 13% year-on-year in Q2, which along with clear skies and windy conditions helped the share of renewables to grow by a third to 40% of the energy mix. (Guardian)

Lifetime limits – Danish window manufacturer Velux has promised to become a ‘lifetime carbon neutral’ firm by 2041, a commitment that will see it work with green group WWF to remove 5.2 MtCO2 from the atmosphere, as much as it has emitted through operations and power since its founding in 1941. It intends to do this by investing in forest and biodiversity projects developed by WWF, with the first two in Uganda and Myanmar. (BusinessGreen)

BCG buys – Business strategy organisation Boston Consulting Group (BCG) will fund nature-based and “engineered” carbon removal projects an expected cost of $35/tonne in 2025 and $80 in 2030 as it seeks to become “climate positive” by the end of the decade, the company announced Tuesday. These prices represent a significant step up from where offsets currently retail on the voluntary carbon market, with BCG committing $400 mln in services over the next 10 years to support environmental organisations, industry groups, and government agencies working on net zero projects. BGC already works with Massachusetts-based agriculture technology company Indigo Ag on the latter’s Terraton Initiative, which seeks to draw down 1 trillion tonnes of CO2 through regenerative agriculture and soil wellness initiatives. (GreenBiz)

And finally… Polar pyres – The amount of CO2 emitted by Arctic wildfires this year is already 35% higher than the figure for the whole of 2019, according to the latest data from the EU’s Copernicus atmosphere monitoring service. Through Aug. 24, some 245 MtCO2 had been released from wildfires, compared to 181 Mt for all of last year. The peak number of active fire observations was about 600 in late July, compared with 400 in 2019 and well above the average equivalent number of roughly 100 between 2003 and 2018. (Guardian)

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