CP Daily: Wednesday October 7, 2020

Published 01:11 on October 8, 2020  /  Last updated at 01:18 on October 8, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

European Parliament votes to raise EU 2030 target to stronger-than-expected 60%

The European Parliament on Tuesday agreed to push for higher European climate ambition with a 60% emissions reduction target for 2030, a tight preliminary vote revealed on Wednesday, with the supported goal exceeding most observer expectations.

AMERICAS

California offset discount reaches historic levels due to low demand and rising supply

California Carbon Offset (CCO) prices are seeing record high discounts to allowances amid an influx of supply and a lack of buyers ahead of the state’s Nov. 1 interim ETS compliance deadline, market participants and developers said.

Chile targets 2023 for CO2 levy threshold changes and offset provision

Chile is aiming to implement an overhaul to its flat $5/tonne carbon tax in 2023 that will alter the coverage threshold for emitters and allow companies to utilise offsets against an undetermined portion of their GHG output, a government official said Wednesday.

LCFS Market: California price stagnation continues amid new RNG, RD announcements

California Low Carbon Fuel Standard (LCFS) credits this week remained within the tight range that has persisted over the past three months, as oil majors and biofuel companies made new announcements to produce renewable natural gas (RNG) and expand existing renewable diesel (RD) production capacity.

EMEA

EU Market: EUAs hit 2-week high on Parliament vote, but give back gains

EUAs surged more than 4% to a two-week high early Wednesday on news the European Parliament backed a stronger-than-expected 2030 climate target, but they gave back all those gains over the course of the day on profit-taking, a weak auction result, and Brexit uncertainty, traders said.

Norway ups climate spend to compensate industry ETS costs

Norway’s government plans to increase its climate spending to cover the ballooning cost of compensating heavy industry for indirect EU ETS costs, while campaigners flagged that the country is on course to need to buy a significant number of carbon units from non-ETS sectors.

EU carbon prices to top €80 by 2030 if industrial innovation, wider climate action isn’t ramped up -report

EU carbon prices could soar to average €50 over the next decade and end Phase 4 of the ETS above €80 if abatement technology – particularly in the heavy industrials sector – doesn’t accelerate and governments and companies don’t ramp up their climate action.

*** 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 under the EMEA tab. ***

INTERNATIONAL

Switzerland favours product-pushing offset projects in third ITMO call

Switzerland’s carbon credit procurement agency Klik has launched a third call for proposals from developers hoping to sell emissions units to the country under the Paris Agreement’s Article 6.

ASIA PACIFIC

Australia’s support for Pacific carbon markets falls short, group says

Australia’s 2020-21 budget included a modest amount for supporting ocean and forest-based carbon activities in the Pacific region, but the government should do more, an industry group said Wednesday.

ICYM

POLL: Analysts elevate EUA price outlooks as market eyes new all-time highs

EU carbon prices will rise through the rest of this year, though they may not reach a new all-time high or sustainably hold above the tenuous €30 level until well into 2021, analysts predicted, as they substantially raised their EUA forecasts across the board.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Back at it in BC – The British Columbia government may look to secure credits through international emissions trading for any GHG reductions that result from the export of lower-carbon products from the province, such as lumber, copper, and aluminium, to help meet Canada’s climate targets, according to draft government documents obtained by The Narwhal. A draft “ITMOs 101” presentation – referring to Internationally Transferred Mitigation Outcomes (ITMOs) under the yet-to-be-finalised Article 6 of the Paris Agreement – and shared among BC government officials in Nov. 2019 referred to the potential of BC clean products to displace more carbon-intensive alternatives in other countries. But the presentation also referred to the federal government’s 2002 attempt to introduce the concept that natural gas exports to the US would meet 30% of Canada’s GHG reduction targets under Kyoto, noting the idea was abandoned after poor reaction from the international community. The Business Council of British Columbia this summer asked Ottawa to explore how LNG exports from the province could qualify for ITMOs, and previous Conservative prime minister candidate Andrew Scheer floated a similar plan last year. Meanwhile, BC’s NDP leader John Horgan this weekend pledged to legislate a 2050 net zero GHG goal for the province if re-elected on Oct. 24. The left-wing NDP, which formed a minority government in 2017 with the support of two Green Party lawmakers, has already set a carbon abatement target of 80% below 2007 levels by 2050. (Global News)

To-do list – China’s goal of reaching carbon neutrality by 2060 would require investments of more than $5 trillion, which would include renewable power generation capacity as well as carbon capture technology, consultancy Wood Mackenzie said Thursday. If delivered, the country’s pledge would bring about the biggest reduction in projected global warming of any climate commitment made to date. But for China to reach its goal, Woodmac estimated that solar, wind, and storage capacities will have to increase 11 times to 5,040 GW by 2050 compared with 2020 levels. Coal-fired power capacity will have to halve, while gas has to end at the same level as in 2019, the consultancy added. (Reuters)

Coal comeback – Coal’s share of US electric generation will rise to 24% in 2021 after falling to 20% in 2020 amid ongoing plant closures, according to the Energy Information Administration’s (EIA) latest Short Term Energy Outlook published Tuesday. Although coal-fired generation is on a long-term downward trend in the US, the EIA expects the resource will get a bit of a reprieve in 2021, driven by an overall increase in energy use as the economy recovers from the coronavirus pandemic, and by high natural gas prices. The increase in forecasted coal generation for 2021 comes with a 5.4% rise in forecasted energy-related CO2 emissions next year, after the EIA projected carbon output to drop 10% in 2020. (Utility Dive)

California conservation – California Governor Gavin Newsom (D) on Wednesday issued an executive order that sets a first-in-the-nation goal to conserve 30% of the state’s land and coastal water by 2030, including through storing carbon in natural and working lands. Specifically, the order directs state agencies to pursue innovative strategies, partnerships, and actions through healthy soils management, wetlands restoration, active forest management, and boosting green infrastructure in urban areas. Within one year, agencies must also develop a Natural and Working Lands Climate Smart Strategy that serves as a framework to advance California’s 2045 carbon neutrality goal.

No laughing matter – The growing use of nitrogen fertilisers for farming is putting the world’s climate goals at risk, a breakthrough study published in the journal Nature has warned. Emissions of N2O have risen by 20% from pre-industrial levels, with agriculture responsible for the lion’s share of the increase, researchers found. The landmark study has been touted as the most comprehensive assessment to date of the world’s N2O emissions to date, and suggests concentrations are now beginning to exceed predicted levels across most IPCC GHG emissions scenarios. (Business Green)

Wide off the mark… France’s imported emissions would need to fall by 65% by 2050 to fall in line with a 1.5C warming target, according to the latest report by the country’s High Climate Council. France’s total carbon footprint – including imported products – is about 70% higher than its national emissions. In 2018, the total footprint amounted to 749 Mt CO2e compared with 445 Mt CO2e emitted nationally. (EurActiv)

…and out of the ballpark – While some oil and gas firms like Shell and BP have set out plans to go carbon neutral, none of the world’s 59 biggest fossil fuel companies have a long-term plan that would align their emissions with a 2C climate goal by 2050, according to new research by the Transition Pathway Initiative. The authors of the report assessed companies on their carbon reduction performance and found only seven could meet emissions targets in line with the ‘Paris Pledges’ made in 2015, which even if met would only reduce emissions to 3.2C warming. (EurActiv)

Re-run – Officials from Heathrow Airport will argue in the UK supreme court this week that its proposed third runway would only ever be built in accordance with Britain’s climate commitments, as it seeks to overturn a court of appeal verdict that stopped the airport’s expansion plans. A two-day hearing started Wednesday that could allow Heathrow to proceed once more with building an additional runway. The expansion plans were approved in principle by parliament in 2018 under Theresa May’s government, though legal action by climate campaigners initially failed to force a judicial review. However, in a landmark judgment, the court of appeal ruled in favour of the case brought by the environmental litigation charity Plan B and Friends of the Earth. (Guardian)

Popular promises – New Zealand Prime Minister Jacinda Ardern said her government would phase out coal-fired boilers and reduce carbon emissions from public transport buses if returned to power in polls on Oct. 17. Ardern, who is also the leader of the Labour Party, said her government would introduce laws to prevent installation of new boilers and replace existing ones with electric alternatives to reduce emissions. The government will also create a $32.9 mln fund to help local councils buy zero emissions buses by 2025. Climate change is a key issue in the election, which according to a string of opinion polls, Ardern’s Labour Party was largely expected to win. (Reuters)

Extracting themselves – Australia’s largest miner, BHP, and the largest energy company, Origin Energy, have suspended their membership of the mining industry body Queensland Resources Council over state election ads urging people to “vote the Greens last”. Several other major resource companies are understood to have raised concerns about the ads, which the QRC says were approved by its board. In a statement, BHP said it objected to advertising that “specifically targets the overall standing of one political party” and had formally asked for the ads to be withdrawn. (Guardian)

And finally… Is someone getting the (as)best(os) of you? Scientists are exploring ways to use mineral waste from asbestos mines to pull huge amounts of CO2 from the air. The vast surface area of certain types of fibrous asbestos makes them particularly good at grabbing hold of CO2 in rainwater or air. The initial hope is to offset the ample emissions from mining itself using minerals already extracted in the process. But the ultimate aim is to figure out how to effectively and affordably dig up minerals, potentially including asbestos, specifically for the purpose of drawing down vast amounts of GHG from the atmosphere. (MIT Technology Review)

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