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The European Commission is considering a one-off emissions cap reduction and a tighter annual linear reduction factor in the EU ETS from 2026 as part of plans to raise the bloc’s 2030 emissions reduction target to “at least 55%”, it said in documents released on Thursday.
South Korean companies will only be allowed to use half the previously expected amount of offsets to help meet their 2021-25 ETS compliance requirements, according to an environment ministry proposal.
Australia on Thursday announced a A$1.9 billion ($1.4 bln) funding package for low-carbon technology development that will divert funds from renewables into hydrogen, soil carbon, and CCS, while also seeking to boost the domestic offset market.
Oil majors’ plans to transition their California-based refineries to renewable diesel and other biofuels production are showcasing the impact of the state’s Low Carbon Fuel Standard (LCFS) and anticipated decline in petroleum-based fuel consumption, as momentum builds for a national version of the programme to replace or supplement the Renewable Fuel Standard (RFS).
California Carbon Allowance (CCA) prices this week climbed to their highest level since the COVID-19 pandemic inflicted bearish pressure on the secondary market this spring, while RGGI allowance (RGA) values inched up on thin demand.
Quebec does not intend to complete its cap-and-trade forestry protocol this year, after delaying the timeline earlier this summer due to the coronavirus pandemic, a government spokesperson told Carbon Pulse.
European carbon prices retreated by more than 5% on Thursday on what traders said was a ‘buy the rumour, sell the fact’ response to the European Commission publishing its plan to raise the EU’s 2030 emissions reduction target.
Finland has confirmed it will end its scheme to compensate heavy industry for its indirect EU ETS costs next year, replacing the programme with support to help the sectors electrify.
BITE-SIZED UPDATES FROM AROUND THE WORLD
IMF approves – IMF President Kristalina Georgieva on Wednesday endorsed the EU’s plans to implement a CBAM, and called on major emitters to draw up a carbon price floor. “The EU cannot stop global warming on its own. But it can bring the world together. A top priority should be an agreement on a carbon pricing floor among major emitting countries,” Georgieva said in a statement. The IMF chief said that in the absence of such an agreement, applying a border tariffs could help avoid carbon leakage and ensure fairness towards European businesses. Experts say it was significant that the IMF has publicly endorsed the EU’s plan, even though big nations including Russia, China, and the US oppose the move. (Climate Home)
Smooth sailing – A European Parliament proposal to fast-track the inclusion of shipping to the EU ETS got the green light late Wednesday as lawmakers comfortably adopted the full report on bloc’s reviewed MRV regulation for ships with 520 votes to 94, with 77 abstentions. MEPs also approved the assembly’s position on a system of ‘own resources’ to finance the €750 bln EU-wide recovery fund from the COVID pandemic, with 455 votes in favour, 146 against, and 88 abstentions. According to the Parliament’s report, a portion of revenues from auctioning EUAs and funds raised by a prospective CBAM should help pay for the coronavirus recovery plan. Both files are now awaiting the position of the Council of EU member states before trilogue negotiations can begin.
We don’t know about this… – German industry representatives are voicing scepticism over the EU’s plans to strengthen its emissions reduction targets. The increase of the current 2030 target by a further 15 percentage points would mean a roughly fivefold increase in the efforts of the 27 EU member states, said Dieter Kempf, president of the Federation of German Industries (BDI). And according to BDI calculations, Germany alone would have to invest €2.3 trillion to achieve climate neutrality by 2050. “You can work out who of the other 26 countries can afford to do this. The level of ambition not only differs greatly within the EU, but also globally,” said Kempf. The Commission’s target is feasible, but close to “over-ambitious,” he added. Hildegard Mueller, president of the German Association of Automotive Industries (VDA), was also critical: “If we commit ourselves to our target for 2050, this means a 50% reduction in fleet limits by 2050, by which time around 60% of new cars sold in Germany would have to be electric,” Mueller said. In the first months of 2020, the share of electric cars sold on the German car market was 9%, which is 1% more than the EU average. (EurActiv)
We just want to ditch it all – Germany’s right-wing nationalist AfD party has called for an end to all major climate action efforts to which the country has committed itself, and it wants to abandon both the Paris Agreement and the European Green Deal. One year before Germany’s general election, the party holds 12.6% of the seats in the German Bundestag, firmly positioning itself as the only party in parliament that is openly opposed to emissions reduction efforts. The party’s popularity has risen in the wake of Europe’s 2015 refugee and immigration crisis, and has sought to appeal to climate change deniers and people dissatisfied with Germany’s energy transition, for example by calling for an exit to the country’s coal exit programme. AfD also wants to drop Germany’s planned domestic carbon pricing scheme for transport and heating, abandon the Renewable Energy Act (EEG) used to fund low-carbon power sources, and tighten the licensing rules for wind turbines. Instead, the party wants to reverse Germany’s nuclear power phaseout and to cancel all climate-related aid.
Balkin’ at the Balkans – European Commission President Ursula von der Leyen on Wednesday urged the Western Balkans nations to join the EU in ramping up their climate targets, saying arguing that the region is “a part of Europe, and not a stopover on the Silk Road”. The Commission has proposed increasing the bloc’s 2030 emissions reduction goal to at least 55% below 1990 levels, up from the current 40%. Von der Leyen emphasised that meeting this new target will create jobs and halve air pollution – both priorities for the Western Balkans. But she also emphasised determination to ensure trade with the EU is fair by addressing carbon leakage through a CBAM. This should warn Western Balkan countries, whose emitters are yet to be subjected to a carbon price, “to stop betting on Chinese-financed coal plants,” said environmental campaigners CAN Europe.
Cementing goals – Major EU ETS emitter HeidelbergCement plans to reduce CO2 output 30% by 2025 compared to 1990 levels, five years earlier than previously planned, having already reduced emissions by 22% between 1990 and 2019. The company also aims to offer CO2-neutral concrete by 2050 at the latest. (Clean Energy Wire)
Cementing goals, part II – Mexico’s Cemex has signed a deal with London-based Carbon Clean to launch a CO2 capture pilot programme early next year, the cement producer said Thursday, as it aims to meet targets for lowering emissions across its global markets. The two companies are developing technology capable of capturing up to 100,000 tCO2 annually at a cost of less than $30/tonne captured, Cemex added. (Reuters)
Stagnant standard – After stagnating from around 1990 to 2005, the average fuel burn of new jet aircraft decreased at a faster pace from the late 2000s and continued during the last decade, according to a new study by the International Council on Clean Transportation (ICCT). The reductions were also compared in the study with UN body ICAO’s aircraft CO2 emissions standard, under which all new aircraft will need to meet fuel burn targets for their specific sizes in order to be sold globally starting in 2028. ICCT’s analysis showed that the average new aircraft delivered in 2016, the year the standard was finalised, already complied with the 2028 requirements. In 2019, the average new aircraft delivered passed the standard by 6%, it said. “As this research shows, ICAO’s CO2 standard lags the existing efforts of manufacturers by more than 10 years,” said the authors. “This suggests ICAO should review and tighten its CO2 standard as quickly as possible.” (GreenAir Online)
Climate cash – Tech giant Amazon has named the first recipients of money from the $2 bln venture fund it rolled out in June to help companies deliver climate-friendly technologies. Amazon, which has pledged to reach net zero emissions by 2040, announced that the initial recipients are: Carbon Cure Technologies, a firm that sequesters CO2 in concrete; Pachama, which provides forest offsets and touts machine learning and satellite imagery to measure and verify CO2 removal; Redwood Materials, the battery and electronic waste recycling company launched by Tesla’s former chief technology officer; and Turntide Technologies, which provides efficient electric motors. (Axios)
Realistic representatives – US Representatives David McKinley (R)and Kurt Schrader (D) are planning legislation to decarbonise the power sector over 30 years. The two members of the House Energy and Commerce Committee previously penned an op-ed this year calling for realistic solutions to tackle climate change that can earn bipartisan support. An ensuing discussion draft, shared with Politico, calls for creating a clean energy standard for the electric power sector that would reduce carbon emissions 80% by 2050. It would also invest in clean energy technology, support the deployment of CCUS, and provide tax credits for advanced renewables.
The Cross-reductions of America – Indiana state lawmakers are considering a programme that would allow landowners to sell carbon credits into the voluntary offset market. State Senator Mark Stoops (D), who is retiring this year, said he hopes lawmakers will introduce his draft bill on offsets in the next legislative session. Mike Braun (R), the Crossroads of America’s US senator, introduced a similar bipartisan bill this year at the federal level. (WFYI)
Rubber stamp – The Massachusetts Executive Office of Energy & Environmental Affairs and Department of Environmental Protection proposed to re-promulgate requirements for power generators under the state’s Global Warming Solutions Act (GWSA) cap-and-trade programme on Thursday. The decision would not make any changes to the current scheme, but if approved, the amendments would extend emissions limits through the 2021-50 time period. The GWSA currently regulates electricity sector CO2 output from 23 in-state generators. The state agencies plan to hold a virtual meeting on the subject on Oct. 13.
Credits for sale – The Kenya Electricity Generating Company (KenGen) is seeking a buyer for offsets from its six CDM projects, which have a total potential offset yield of 1.5 million CERs annually. The portfolio includes three geothermal plants, two hydro dams, and a wind farm. KenGen said it wants to hire a transaction advisor to help it sell credits, which it suggested could also include voluntary units. The deadline for submissions is Sep. 29.
And finally… Imagine (no) dragons – The world’s largest lizard, the Komodo dragon, could be driven to extinction by climate change unless significant measures to intervene are taken soon. A new international study, led by the University of Adelaide and Deakin University, has found that the impact of both global warming and sea-level rise threatens the extinction of Komodo dragons, which already have restricted habitats, and this must be better incorporated into conservation strategies. Research models predict local extinction on three of the five island habitats where Komodo dragons are found today. The Komodo dragon has existed on Earth for more than a million years, but only an estimated 4,000 remain in the wild.
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