CP Daily: Friday September 4, 2020

Published 23:27 on September 4, 2020  /  Last updated at 00:22 on September 5, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

RGGI auction settles at highest level since 2015 on aggressive compliance bidding

The RGGI Q3 auction settled at a sizeable premium to the secondary market as compliance entities ramped up purchases and bucked market expectations, according to data published Friday.

INTERNATIONAL

Saudi Arabia steers clear of carbon pricing in G20 presidency effort

Saudi Arabia won’t push CO2 pricing under its climate initiatives for the G20 presidency this year, instead favouring a loose framework aiming to stimulate demand for carbon removals, according to a senior government envoy.

EMEA

EUAs to “tread water” around current levels before record run in 2021 -analysts

EU carbon prices are expected to “tread water” around current levels near €27-28 for the remainder of the year before rising to a new all-time high in 2021, analysts said Friday.

EU Market: EUAs follow equities lower ahead of supply surge

EUAs fell on Friday despite a decent auction result, as more selling in equity markets carried over to carbon.

AMERICAS

Financials boost CCA holdings for second straight week as compliance trims length

Speculators bolstered their California Carbon Allowance (CCA) positions for the second consecutive week, as compliance entities trimmed their holdings by more than 1 mln for the first time since June, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

LCFS Market: California prices creep up as futures activity resumes

California Low Carbon Fuel Standard (LCFS) credit prices rose to a one-month high this week as activity on bourses ICE and Nodal Exchange picked up after a quiet summer.

ASIA PACIFIC

New Zealand weighs earmarking of funds from CO2 auctioning

New Zealand is considering whether to earmark proceeds from NZU auctioning from next year, with purchasing international carbon credits and funding emission cuts at home among the options, according to government documents.

CN Markets: Pilot market data for week ending Sep. 4, 2020

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

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Moorburg moolah – Swedish utility Vattenfall’s 1GW German unit has applied to shut down the Moorburg coal-fired power station in Hamburg under the government’s hard coal plant retirement scheme that is due to report timelines in December, a spokeswoman said, countering earlier German media reports that the five-year-old plant might close by year-end. Vattenfall has never been happy with the 1.6GW plant, which was conceived in 2007, opened in 2015, cost €2.8 bln and supplies two-thirds of the port town’s electricity needs. (Reuters)

German jostling – Germany’s ruling conservative CDU/CSU Union has admitted to its own shortcomings when it comes to climate policy and is now searching for a new chairman and candidate for the chancellor’s spot, which will shape the poll-leading union’s course on environmental policy. One year before the upcoming federal elections, the Greens are gaining unprecedented popularity, making them an attractive coalition partner ahead of the current Social Democrats. (EurActiv)

Nobody wants it – Poland’s coal demand expected to fall by around 7 Mt next year, or more than 10% of its annual hard coal production, Deputy Minister of State Assets Artur Sobon said Friday.  The fuel has become costly due to rising prices of EU carbon permits. The industry has also struggled with falling demand, which accelerated during the COVID-19 lockdown because the country used less power. Speaking at the same webstreamed event, Tomasz Rogala, CEO of Poland’s biggest coal producer – state-run PGG – also said his company had to adjust its output to the demand from Polish utilities, as it would not find new markets for its products. PGG produces around 30 Mt of coal a year, but its output is expected to drop this year. (Reuters)

Sovereign fund scrutiny – Norway’s $1.2 trillion wealth fund will ask the companies in its portfolio that emit the most CO2 for more detailed climate-related data in order to understand the risk posed to its investments. Norway’s fund is invested in 9,200 companies, or 1.5% of the world’s stocks, and listed its own carbon footprint at 107.6 MtCO2e in 2019, which is double that of the country itself. The fund recently changed its CEO by appointing hedge fund veteran Nicolai Tangen, who started this week. (Reuters)

I Mass-a-choo-choo-choose you The Massachusetts Supreme Court ruled in favour of the state’s Department of Public Utilities (DPU) on Thursday, upholding power purchase agreements (PPAs) the regulators had awarded last year to utility Hydro-Quebec. The DPU had approved PPAs to provide over 9.5 TWh annually from the utility by Dec. 31, 2022, which are important to advancing the development of the controversial cross-border New England Clean Energy Connect (NECEC) hydro transmission line. NextEra Energy Resources, an independent power producer in the region with more expensive, ageing resources, such as the nuclear Seabrook Plant, alleged in the lawsuit that the hydroelectric generation was not eligible for the contracts, as it could not be provided without interruption as a “firm service”. While the NECEC faces continued opposition in Maine, the state’s own Supreme Court last month ruled that a ballot initiative to let voters decide on the project was unconstitutional. (Utility Dive)

Full of holes – A proposed ban on polluting ship fuel in Arctic waters would only eliminate 5% of the most harmful climate-busting emissions due to a raft of waivers and exemptions, a new study warned on Thursday. According to a proposal penned by IMO states in February, heavy fuel oil  – a notoriously polluting ship fuel – should be banned in Arctic waters from 2024, reflecting a similar Antarctic ban in place since 2011. But a number of exemptions and waivers would allow 74% of the HFO-burning fleet to continue to use the fuel until 2029, the study published by the International Council on Clean Transportation said, meaning that it would only reduce black carbon emissions by 5% instead of the 30% promised by a full ban. (Euractiv)

Stick your stickers – An Ontario law forcing gas stations to display stickers showing the cost of federal carbon pricing has been ruled unconstitutional. Ontario Superior Court Justice Edward M. Morgan ruled the legislation, which was enacted as part of a dispute over Ottawa’s carbon pricing plan in 2019, violated free speech provisions of the Charter of Rights and Freedoms. The Canadian Civil Liberties Association challenged the legislation, and the court agreed with their assertion that the stickers were a “compelled political message.” Morgan says gasoline stations are at liberty to keep the stickers on their pumps or “remove them as they see fit.” There was no word from the government if it intends to appeal the decision. (680 News)

And finally… Supersized sink – The world’s oceans soak up more carbon than most scientific models suggest, according to new research. Previous estimates of the movement of carbon between the atmosphere and oceans have not accounted for temperature differences at the water’s surface and a few metres below. The new study, led by the University of Exeter, includes this, and finds up to twice as much net flux of carbon in certain times and locations compared to uncorrected models.

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