CP Daily: Monday October 5, 2020

Published 23:09 on October 5, 2020  /  Last updated at 00:39 on October 7, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

BRIEFING: MEPs brace for knife-edge vote on EU 2030 climate target

EU lawmakers face a tightly-contested vote on the bloc’s 2030 emissions cut target this week, with more progressive forces willing to back a 55% goal but rejecting any inclusion of natural sinks and foreign carbon credits.

INTERNATIONAL

UN board dodges decision on ‘back door’ CDM extension into Paris era

A move to block CDM post-2020 carbon offset activity looks set to go to the wire as officials on Monday opted to postpone until December a decision seen as a ‘back door’ threat to the UN mechanism.

Brazil voluntary carbon programme may ease Paris double counting fears

The Brazilian environment ministry (MMA) has launched a carbon-focused element of its voluntary ecosystem services market for forests that some stakeholders view as a positive sign for the country to avoid double counting emissions reductions under the Paris Agreement.

AMERICAS

WCI data reveals 2021 allocations, consignment figures as carbon market surplus edges past 300 mln

WCI compliance entities received their 2021 free allowance distributions during the third quarter, while the number of carbon permits consigned to joint auctions next year fell from 2020 levels, according to California-Quebec data published Monday afternoon.

Timeline for California forestry protocol revisions remains unclear, sources say

California regulator ARB does not have a timeline for amending its cap-and-trade forestry protocol, with regulatory and market sources expecting further delays until an offset task force completes its annual report next year.

EMEA

EU Market: EUAs hold near €27 despite early weakness, bearish auction

EUAs dipped on Monday on a weak auction result and after weekend Brexit talks yielded little, defying strength in wider markets due in part to positive updates on US President Trump’s progress in battling the coronavirus.

UK judge grants right to appeal in long-running EU ETS tax fraud case

A British judge has granted the right to appeal in a £45 million tax fraud case linked to the EU carbon market, meaning the long-running civil suit may still be a ways from seeing finality.

*** Carbon Pulse’s new EU legislative guide and calendar allows subscribers to stay up-to-date with all relevant European Green Deal legislation and key dates. It is available on the EMEA tab on the front page of the website. ***

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BITE-SIZED UPDATES FROM AROUND THE WORLD

ExcessMobil – US oil major ExxonMobil has been planning to increase annual CO2 emissions by as much as the output of the entire nation of Greece, an analysis of internal documents shows, setting one of the largest corporate emitters against international efforts to slow the pace of warming. The drive to expand both fossil fuel production and planet-warming pollution comes at a time when some of Exxon’s rivals, such as BP and Shell, are moving to curb oil and zero-out emissions. Exxon’s own assessment of its $210 bln investment strategy shows yearly emissions rising 17% by 2025, according to the documents. (Bloomberg)

Mine your business – The construction of the UK’s first coal mine in more than 30 years has been suspended by the government following a local council decision to approve the project last Friday. UK housing minister Robert Jenrick said he reserved the right to review planning permission for the Cumbria coking coal-for-industry venture, which environmentalists saying it is incompatible with the country’s 2050 net zero emissions target. (FT)

Warning shots – Companies in Russia and Australia are moving to safeguard interests in anticipation of the EU’s carbon border tax. PhosAgro PJSC, Russia’s biggest producer of phosphate fertilizer, is calling for the government to help mitigate potentially billions in losses for the country’s raw materials producers if Europe introduces a carbon tax. The firm’s CEO said the government could help companies mitigate carbon tax costs by re-examining the potential for the nation’s forests to absorb pollution. In Australia, companies have been urged to start preparing now for the CBAM in 2023, or else risk getting caught up in a potential fracturing of the world trade system. Consulting firms are gearing up to offer carbon audits to their clients, while think-tank experts warn that the border tax could end up splintering the world into high-carbon and low-carbon blocs. (Bloomberg and Australian Financial Review)

Green bond bumper – Green bonds have passed their biggest milestone yet, with more than $1 trillion issued since the securities first emerged in 2007, according to BNEF. Together, corporate, government, municipal, and mortgage green bond issuance in 2020 trailed 2019’s volumes through August. This all changed in September, when green bonds saw more than $50 bln brought to market in that month alone. More than $200 bln worth of green bonds have been issued in 2020 thus far. This represents a 12% increase compared with the first nine months of 2019.

Further for the forests – Some of Britain’s largest companies have welcomed planned legislation to protect against illegal deforestation through tighter supply chain oversight as a “step forward”, but have encouraged the government to go further to address the issue. Signatories included supermarkets Tesco, Marks & Spencer, Morrison’s, and Sainsbury’s, food manufacturers Unilever, Nestle, and Greencore Group, McDonald’s, and various livestock producers. Under the proposals, large companies would have to report on how they source tropical commodities and would be banned from using products that are harvested illegally in their country of origin. The companies want the new rules to apply to all deforestation, however, not just in cases where the destruction is illegal. (Reuters)

Ammonia plug-in plan – Energy firm Orsted and fertiliser company Yara are in discussions to build a 100MW green hydrogen plant in the Netherlands powered by offshore wind. “If the required public co-funding is secured and the right regulatory framework is in place, the project could be operational in 2024/2025,” the firms said in a press release, with a final investment decision due next year. Power supply would come from Orsted’s offshore wind farms, Borssele 1 and 2, which are slated to become operational before the end of this year. (Montel)

Colombia for Carlos – Colombian President Ivan Duque Martinez on Saturday swore in Carlos Eduardo Correa Escaf as the country’s new Minister of Environment and Sustainable Development. In a press release, Duque listed the maturation of Colombia’s carbon credit market as one of the tasks for Correa, who previously served as mayor of the northern city of Monteria from 2012-15 and was the Business Administrator for EAFIT University in Medellin.

Adding Annamie – Canadian Green Party members on Saturday selected Toronto lawyer Annamie Paul as their next leader, bringing to a close the year-long race to replace Elizabeth May. Paul, who is the first Black permanent leader of a major federal political party in Canada, assumes the leadership of a party that has been closely tied to May for the better part of the last 14 years. In the process, Paul beat out fellow lawyer Dimitri Lascaris and former Winnipeg mayor and Ontario Environment Minister Glen Murray. Paul ran under the Green banner in the last federal election but placed a distant fourth to former Liberal finance minister Bill Morneau. Paul has already been nominated to run in the Oct. 26 by-election in that riding after Morneau’s abrupt resignation this summer. (CBC)

I’m your zero – Investor-owned utility Public Service Enterprise Group (PSEG) last week applied to extend Zero Emission Certificates (ZECs) for two nuclear power plants in New Jersey, citing the state’s climate policy, cheaper cost of ZECs compared with solar and offshore wind subsidies, and power market weakness. The New Jersey Board of Public Utilities previously issued an order determining that PSEG’s Hope Creek, Salem 1, and Salem 2 nuclear plants were eligible to receive ZECs from Apr. 2019 through May 2022, and the company is now applying for a three-year extension of this programme. The RGGI-regulated company said the plants are “essential” for New Jersey to successfully reach its goal of a 100% carbon-free energy supply by 2050, as outlined in the state’s Energy Master Plan. (S&P Global Platts)

Procedural pitch – The US Supreme Court said on Friday it would hear a procedural question in the city of Baltimore’s lawsuit to hold 26 fossil fuel companies liable for the costs of responding to climate change. The rather technical question at issue, which is unrelated to the substance of Baltimore’s lawsuit, is over the criteria by which federal appeals courts evaluate the question of whether the case should be eventually heard in a state or federal court. In other suits brought by cities and states against fossil fuel companies for their contribution to climate change, those companies have consistently sought to remove the cases to federal courts where they believe they will get a more favourable reception. (Climate Nexus)

GEOdudes – Xpansiv CBL Holding Group (XCHG) on Monday announced the first trades of its CORSIA-aligned Global Emissions Offset (GEO) product on its spot exchange subsidiary CBL Markets. Counterparties involved in the trades were Australia-based investment bank Macquarie and environmental market services firm AitherCO2. XCHG did not reveal the prices or volumes for the trade. Carbon credits dubbed Eligible Emissions Units (EEUs) and approved by UN body ICAO for compliance with the international aviation offset market CORSIA underpin the GEO product.

Seventh heaven  – The American Carbon Registry (ACR) on Friday announced a public comment period for updates to the ACR Standard v7.0, which details ACR’s requirements and specifications for the quantification, monitoring, reporting, verification, registration, and issuance of project-based GHG emissions reductions and removals as carbon credits. Key updates include the use of 100-year Global Warming Potentials from the IPCC 5th Assessment Report to calculate emissions reductions, requirements to avoiding double claiming between achievement of NDC targets under the Paris Agreement and voluntary offsetting, and the addition of detailed procedures to avoid double counting in CORSIA. Public comments are due by Dec. 1.

And finally… Slow-walking in a burning world President Donald Trump’s administration is slow-walking a mandatory climate report by not seeking out scientists to work on it, says one of the authors of the last National Climate Assessment. Donald Wuebbles, a climate scientist at the University of Illinois who co-led the first volume of the fourth National Climate Assessment, said the Trump administration is late in putting out a call in the Federal Register for researchers to produce the fifth version. By law, Congress and the White House are supposed to receive a report no less than every four years on the state of climate change and its impacts on humanity and the natural world. The next version of the report is supposed to come out in 2022, which means the important early step of recruiting the dozens of scientists who will contribute to it needs to start now, Wuebbles said. The Trump administration tried to bury the last version of the assessment, in 2018, by releasing it the day after US Thanksgiving. (E&E News)

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