CP Daily: Wednesday September 30, 2020

Published 00:14 on October 1, 2020  /  Last updated at 00:23 on October 1, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

CDM under “back door” threat as Paris era looms

The CDM risks being killed “through the back door” as officials consider blocking post-2020 carbon offset renewals rather than waiting for countries to agree on the UN mechanism’s future under the Paris Agreement.

EMEA

EU carbon border measure “no silver bullet”, must support existing policies -senior EC official

The EU will need to carefully combine a carbon border adjustment mechanism (CBAM) with the bloc’s existing polices for spurring decarbonisation and ensuring competitiveness, a senior European Commission official said on Thursday.

Brussels seeks to tighten F-gas emissions regulations

The European Commission favours putting tougher curbs on potent F-gas emissions used in air-conditioning units and electrical equipment, it said on Wednesday, judging that cleaner solutions are likely too costly to be otherwise taken up voluntarily.

EU Market: Carbon consolidates near €27 as strong auction met with technical selling

EU carbon prices consolidated near €27 on Wednesday as buying backed by a strong UK auction result was met by technical selling, after a record number of compliance players reported EUA holdings last week.

AMERICAS

US regulator can accommodate power grid CO2 pricing, experts say

The US Federal Energy Regulation Commission (FERC) has the authority to approve a carbon price brought forth by independent and regional wholesale grid operators, a conference heard Wednesday.

New California-based speculators among 10 WCI accounts opened during Q3

Ten entities opened California-based Compliance Instrument Tracking System Service (CITSS) accounts during the third quarter of 2020, as three others shuttered their accounts in the WCI-linked ETS, data from state regulator ARB showed Wednesday.

Virginia power utility registers in RGGI system ahead of 2021 linkage

A Virginia-based electricity generator opened an account in RGGI’s CO2 Allowance Tracking System (COATS) this week, with the state set to join the Northeast US power sector cap-and-trade programme next year.

ASIA PACIFIC

New Zealand sets carbon auction dates, volumes for 2021

New Zealand has released its NZU auction schedule for 2021, confirming that the first ever government-organised allowance sale will be held next March.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Merkel wants 55 – German Chancellor Angela Merkel has thrown her weight behind the European Commission’s proposal to increase the bloc’s climate target to reduce emissions by at least 55% by 2030. She told lawmakers at the Bundestag that the German presidency of the EU Council, responsible to build consensus over the European Climate Law, would “fight” for the upgraded target to have unanimous backing among the 27 nations. The bloc’s environment ministers are meeting in Berlin on Wednesday and Thursday to discuss the proposed 2030 climate target. (Clean Energy Wire)

Advantage: America – The US economy would emerge as a global winner from a border adjustable carbon tax in part because American-manufactured goods are 80% more carbon efficient than the world average, according to a new report by the Climate Leadership Council, which advocates for a border-adjustable carbon fee that would return revenues to Americans. The carbon-intensity of US GDP is three times less than China and four times less than India, which would advantage US exports – such as energy-intensive goods like steel – in an emerging trade regime where countries with carbon price policies impose penalties on nations that lack similar measures, the report noted. A separate analysis of CLC’s carbon dividend plan showed the bottom 80% of US households would financially benefit from its carbon price plan. The group also named Greg Bertelsen as its permanent CEO after its previous head Ted Halstead died this summer. (Politico)

Promise unkept – President Trump’s promise to save the coal industry has gone unfulfilled with production of the fuel that once powered the US economy set to fall to the lowest level in over half a century, Politico reports. Despite aggressive rollbacks of pollution regulations, the industry’s outlook has only worsened. The EIA expects total US coal output to plummet to 511 Mt this year, down 28% from a year earlier and the lowest level since 1964, amid weak electricity demand and competition from other sources. Even with an expected rebound next year, the industry output will remain a fraction of the 1.17 billion-tonne peak seen in 2008, when coal still produced half the nation’s power. West Virginia Sen. Joe Manchin (D) said he sees little chance that industry will ever regain its footing – a message he’s taken directly to Trump. Still, the president’s inability to protect the industry has done little to dampen enthusiasm for his re-election among miners, and many in the coal patch aren’t concerned about whether Trump has made good on his 2016 promises.

Hasta la Vistra – US competitive energy supplier Vistra on Tuesday announced it would retire 6.8 GW of coal by 2027, blaming in part its grid operator’s “irreparably dysfunctional” market. The company owns seven coal-fired power plants across the Midwest, mostly within the territory of the Midcontinent Independent System Operator (MISO), and would retire the majority of its plants through 2025-27 “or sooner should economic or other conditions dictate,” the company said in a statement. Alongside those retirements, Vistra plans to reach net zero emissions by mid-century and add nearly 1 GW of solar, plus one energy storage project by the end of 2022. Green group Sierra Club said the announcement marks one of the largest coal fleet retirements in US history. (Utility Dive)

Michigan markets – Michigan Governor Gretchen Whitmer’s (D) executive order last week mandating net zero emissions by 2050 in the Midwest State will likely include a plan to incentivise agriculture-based carbon offsets. Michigan Department of Environment, Great Lakes, and Energy director Liesl Clark told Brownfield the newly announced Council on Climate Solutions will work to create structures such as a carbon market where farmland could be used to sequester GHGs. The Wolverine State’s Department of Natural Resources recently selected environmental advisory firm Bluesource to develop the first offset project on state-owned forest land in the US, with the aim of supplying credits to the voluntary offset market.

Steel resolve – The world’s largest steelmaker ArcelorMittal has committed to being carbon neutral by 2050, although it said a level playing field with carbon border adjustments and abundant, affordable clean energy would be required to get there. The long-term ambition adds to its goal made last year of aiming to reduce its CO2 emissions 30% by 2030. (Reuters)

Total targets – France’s oil major Total pledged to reduce emissions from the burning of its oil and gas products to below the level they had in 2015 by 2030, slashing around a third off its European direct and indirect GHG output by 2030. The goals add to the company’s net zero 2050 commitment. (Reuters)

Smooth sailing – Denmark said on Tuesday that it could reach its 2030 climate target of reducing emissions by 70%, one of the world’s most ambitious, without compromising its generous welfare benefits. Last year, parties passed a law committing Denmark to reduce GHG emissions by 70% from 1990 levels, or around 20 MtCO2e, within 10 years. In a climate plan published on Tuesday, the government estimated that the annual cost of implementing the shift to greener technologies would rise to $2.5-$3.7 bln by 2030, or 0.7%-1.0% of GDP. (Reuters)

What do we want? A tax! When do we want it? Now! – The UK should introduce a carbon tax to replace its membership in the EU ETS, British think-tank Policy Exchange has said, while the alternative option of a domestic ETS should only be considered if it can be linked to other systems such as California, Quebec, and Switzerland, and should not be introduced before 2024. The UK is set to drop out of the EU ETS at the end of the Brexit transition period on Dec. 31, 2020, with the government indicating its preference is to set up a domestic market that would then link back to the EU system. But the lack of progress in Brexit negotiations makes it unlikely that a link will be established in time, in which case a standalone ETS is the government’s preferred alternative, with a tax being considered as a back-up option. But Policy Exchange has called for the UK to reject a standalone ETS, citing its vulnerability to volatility owing to the limited size of the market. Instead, it urged the government to “commit to a long-term, rising carbon emissions tax as its preferred post-Brexit carbon pricing regime”, as part of recommendations it published this week on the future of UK-EU energy co-operation. The tax should cover the same sectors as the EU ETS and be set in line with current EUA prices, it added, and the existing carbon price support tax imposed on the UK power sector should be removed from 2024 to ensure that CO2 prices are aligned across all sectors. (Argus)

Cheap and easy? – The UK’s University of Southampton has modelled the impact of spreading volcanic ash from a ship to an area of ocean floor to help amplify natural processes which lock away CO2 in the seabed. They found the technique has the potential to be cheaper, technologically simpler, and less invasive than other techniques to remove harmful gases. The initial findings suggest that this method could sequester as much as 2,300 tonnes of CO2 per 50,000 tonnes of ash, delivered for a cost of $50 per tCO2 sequestered – much cheaper than most other GHG removal methods.

No bids – India received no bids for 15 of the 38 mines auctioned as a part of its plan to open up coal mining to private companies, reflecting little investor appetite for the sector clouded by environmental concerns and low margins. A total of 82 bids were received for 23 coal mines or blocks, the coal ministry said in a statement late on Monday. Coal production in India has to date largely been restricted to state-run Coal India Ltd and another smaller government-controlled company, though Prime Minister Narendra Modi opened up coal mining to the private sector this year. (Economic Times)

SPAC atttack – A group of energy industry veterans are launching a special purpose acquisition company (SPAC) aimed specifically at taking climate tech startups public, Axios reports. The Climate Change Crisis Real Impact I Acquisition Corp. on Tuesday announced a $200 mln IPO, with 20 mln shares priced at $10 each.  The “world’s first climate-focused” SPAC also has some prominent names involved, including former NRG Energy CEO David Crane, former senior GE exec Beth Comstock, and John Cavalier – previously with Hudson Clean Energy partners. They’re targeting sectors including renewables, grid stability, EV charging, climate-friendly liquid fuels, waste reduction, and sustainable farming. They’re also interested in the young but growing field of removing CO2 already in the atmosphere – an area also attracting investment from Bill Gates, Amazon, and other deep pockets. SPACs are public companies that operate as a shell, designed to acquire startups and thus make them public too. The concept isn’t new, but 2020 has seen a burst of new ones and new deals. And Wednesday saw the Qell Acquisition Corp. announce a separate $300 mln IPO, with 30 mln units priced at $10 each. This SPAC, led by former senior GM exec Barry Engle, will “search for a target in the next-generation mobility, transportation and sustainable industrial technology sectors”.

Protocols passed – Offset registry Climate Action Reserve’s (CAR) Board of Directors on Wednesday adopted two new protocols. The Soil Enrichment Protocol provides guidance for developing offset projects that involve the adoption of agricultural management practices that are intended to increase soil organic carbon storage and/or decrease net emissions of CO2, CH4, and N2O from agricultural operations. The Adipic Acid Production Protocol creates new financial incentives for the installation and use of emission control technology to reduce nitrous oxide (N2O) emissions as a by-product of adipic acid production.

Quebec consultation – The Quebec environment ministry (MELCC) on Wednesday published a draft regulation respecting the mandatory reporting of emissions under the province’s WCI-linked ETS. The regulation, which is now up for a 45-day public comment period, will update the global warming potentials used to report GHGs starting next year and the emissions factors that fuel distributors must use.

And finally… Breaker’s dozen – For the first time in 12 years, the moderator of a US presidential debate asked a question about climate change, which ended up constituting the most time ever spent on the issue in a single debate. Climate change was the focus of an unusually substantive, approximately 10-minute portion of Tuesday’s otherwise raucous 90-minute presidential debate between President Donald Trump and former Vice President Joe Biden — an amount about equal to the time devoted to the issue in all presidential debates since 2004 combined. Climate change was not one of the pre-announced debate topics, an omission that sparked substantial criticism and public pushback from advocates and lawmakers. During the debate, Biden argued that he doesn’t support progressives’ Green New Deal, though his online climate platform last year called it “crucial framework for meeting the climate challenges we face”, without endorsing it outright. Meanwhile, when asked whether human-induced emissions fuel climate change, Trump said “I think a lot of things do, but I think to an extent, yes”. That’s somewhat different than his past rejection of global warming as a hoax, but still at odds with the scientific consensus that humans are the dominant driver of ongoing warming. (Climate Nexus, Axios)

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