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TOP STORY
ANALYSIS: With millions at stake, Korean offset investors sweat over CDM impasse
South Korean investors in projects expected to import tens of millions of carbon credits are tying their fortunes to a UN body that has so far dodged a decision on keeping Clean Development Mechanism (CDM) units flowing beyond this year.
AMERICAS
California offset task force recommends shorter invalidation timelines, compliance limit transfers
California regulator ARB should reduce the invalidation period for offsets, allow regulated entities to trade compliance limits, and implement four new or revised protocols to incentivise additional credit usage in the state’s WCI-linked carbon market, according to a report published Wednesday.
NA Markets: CCAs edge closer to pandemic highs, RGGI breaks out of month-long range
California Carbon Allowance (CCA) prices this week inched close to their highest levels since the COVID-19 outbreak as activity surged on the secondary market, while RGGI allowance (RGA) values rose slightly on thin volume.
Canada may need nearly C$300/tonne carbon price to hit 2030 Paris goal -gov’t report
Canada’s GHG reduction target may require a CO2 price of almost C$300 ($226) per tonne under the country’s ‘backstop’ fossil fuel levy and output-based pricing system (OBPS) if no additional climate policies are implemented, a government report said Thursday.
EMEA
EU lawmakers adopt position on European Climate Law
The European Parliament on Thursday adopted its official position on the European Climate Law, seeking to increase the EU’s 2030 emissions reduction target to at least 60% below 1990 levels, up from the current 40%.
Steelmaker ArcelorMittal to permanently close big-emitting Polish facility
The world’s biggest steelmaker ArcelorMittal has decided to permanently close its blast furnace in Krakow, Poland, blaming the coronavirus-induced demand hit, cheaper imports, and higher costs for power and carbon.
EU Market: EUAs slip to 1-week low amid EU 2030 target, Brexit doubts
EUAs fell towards €26 on Thursday, receding further from the previous session’s two-week high as traders cast doubts on the influence of MEPs’ higher climate ambition and the ability of EU and UK negotiators to reach a Brexit trade agreement before next week’s deadline.
*** 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. ***
INTERNATIONAL
IMF backs global green spending spree, rising carbon prices to curb climate change
A major public green spending programme combined with steadily rising carbon prices would help the world achieve net zero greenhouse gas emissions by 2050 at a moderate cost and with longer-term benefits outweighing that, the International Monetary Fund (IMF) said Thursday.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Frack attack – The exchanges on climate and energy in last night’s US vice presidential debate broke no new policy ground but did offer a window onto the campaigns’ political strategies as Democratic nominee Joe Biden leads President Donald Trump heading into the final weeks. During the debate, Vice President Mike Pence claimed multiple times that the Joe Biden-Kamala Harris team wants to ban fracking, though it’s not a part of Biden’s platform and Harris rejected the assertion. Harris repeatedly touted the ticket’s proposal to invest in renewables as part of the wider, infrastructure-focused economic plans they want to move quickly, while Pence repeatedly looked to tether Harris to progressives’ Green New Deal. Pence, the former Republican governor of Indiana, also refused to answer moderator Susan Page’s question about whether he accepts the science on the way climate change is making wildfires and hurricanes stronger and more dangerous, and he suggested that the cause of climate change is an open question, contrary to the scientific consensus on the dominant human influence. (Axios)
Czar and in charge – Joe Biden’s transition team is considering appointing a climate and energy ‘czar’ to help direct sweeping changes across federal agencies if he wins next month’s election, according to people familiar with the discussions. One anonymous source told Politico there was no firm list of candidates for such a role, but some of the names that have circulated include former Secretary of State John Kerry and former Bill Clinton adviser John Podesta. President Barack Obama’s administration had put former EPA administrator Carol Browner in a similar role, appointing her director of the White House Office of Energy and Climate Change Policy. Browner left the position after two years when Congress failed to pass a cap-and-trade bill.
Clean combat – A three-judge panel appeared divided Thursday on President Trump’s effort to repeal the Obama-era Clean Power Plan (CPP) and replace it with the far weaker Affordable Clean Energy (ACE) rule. The US Court of Appeals for the District of Columbia heard six hours of virtual arguments from a coalition of public health and environmental groups, states and cities, and nine power companies that the ACE rule does virtually nothing to reduce CO2 output and will actually lead to a dangerous increase in other pollutants, violating the EPA’s legal obligation to take action to reduce GHGs. At stake is whether the Trump administration can lock in an extremely narrow interpretation of the Clean Air Act by persuading judges that the federal government does not have the authority to set national restrictions on CO2 emissions or force states to move away from coal-fired power. The Supreme Court issued a historic stay on the CPP in 2016, and the Trump-era EPA finalised the ACE rule in 2019. (NYT)
Pumped up – Saudi Aramco plans to boost its production capacity so it can pump as much of Saudi Arabia’s vast oil reserves when demand picks up – before a shift to cleaner energy makes crude all but worthless, industry sources and analysts said. With almost 20% of the world’s proven reserves and production costs of just $4 a barrel, Aramco believes it can undercut competitors and carry on making money even when lower oil prices make it unprofitable for rivals, the sources said. Riyadh now plans to follow through on its apparent threat in March during an oil price war with Russia to raise its capacity. (Reuters)
Plateau projection – In its latest outlook, OPEC has forecast oil demand will plateau in 2040 at 109.3 mln bpd – some 10% above its 2019 level – but may already have crested in the US and other wealthier countries. The organisation expects demand for its core product to fall more than 10% among the world’s richest economies this year, and says it will never return to pre-pandemic 2019 levels. Over the course of the next 25 years, it expects demand in those most developed countries to fall by about 27%. The outlook also forecasts marine fuel oil demand to grow by 400,000 bpd over the next five years. (WSJ and Lloyd’s List)
Stamp of approval – Germany’s lower house of parliament on Thursday approved a tax on GHG emissions to be levied in stages from 2021, raising retail prices of car fuels, such as gasoline and diesel, heating oil, and natural gas. The move, which entails alterations to a law on fuel emissions trading, envisages a tax of €25 per tonne of CO2e in 2021, rising to €55 per tonne in 2025, and followed by an emissions trading scheme with a price collar after that. (Reuters)
Aiming for the top – Australia’s Finance Minister Mathias Cormann will leave his position at the end of the month and travel to Europe to campaign for the top job in the OECD, the Guardian reports. Cormann’s government has been widely criticised for lacking climate ambition since it took office seven years ago, and Cormann himself has fought tooth and nail against any form of carbon pricing for a decade – both issues championed by the OECD. But speaking to Australian media, he defended his record on the issue and said he was looking forward to countering people’s understanding of it.
Buried in the bay – Italian energy group Eni has won a licence in the UK to store CO2 in depleted gas fields as part of its strategy to make its business greener. The licence, awarded by Britain’s Oil and Gas Authority, will cover the Liverpool Bay area of the East Irish Sea, Eni said in a statement. While a final investment decision still needs to be taken, Eni plans to use the depleted Hamilton, Hamilton North, and Lennox fields in the area to store CO2 captured in northwest England and northern Wales. Earlier this year, Eni pledged to slash its GHG emissions by 80% in one of the most ambitious clean-up drives in an industry under pressure from investors to go green. (Reuters)
Hey men, nice Earthshot – Prince William and Sir David Attenborough have joined forces to launch what they hope will become the “Nobel Prize for environmentalism”. With £50 mln to be awarded over a decade, the “Earthshot Prize” is the biggest environmental prize ever, with the search now on for 50 solutions to the world’s gravest environmental problems by 2030. The money will be awarded in the form of five £1 mln prizes every year for 10 years. (BBC)
Ontario options – The Ontario government can have a carbon pricing system and also work to reduce taxes to make life more affordable, according to a report from think-tank Smart Prosperity Institute published Thursday. The four options laid out by the paper include increasing income tax credits, reducing the harmonised sales tax, developing a provincial version of the federal government’s Climate Action Incentive for delivering CO2 levy rebates to residents, and increasing the Ontario Trillium Benefit, which is the combined payment of the province’s energy and property tax credit. Ontario is currently subject to Ottawa’s ‘backstop’ carbon tax, though it challenged the federal CO2 pricing regime in Canada’s Supreme Court last month.
Burlington CO2 price factory – A proposal from Burlington, Vermont Mayor Miro Weinberger this week would assign a $100/tonne carbon tax to new buildings that want to connect to fossil fuel infrastructure. The city’s “Building Electrification and Carbon Price Ordinance” proposal features one pathway where a new building does not connect to fossil fuel infrastructure, thus meaning that no further requirements apply during the permit process. But in the second pathway, the new building connects to fossil fuel infrastructure and assigns the $100 fee against the expected emissions for the first 10 years of building operation. This process would repeat every 10 years until the building no longer is using fossil fuels. (Vermont Daily Chronicle)
Tru(terra) to form – Blockchain-based carbon credit company Nori announced a pilot project on Thursday with Truterra, a sustainability business and subsidiary of US food manufacturer Land O’Lakes, to create a voluntary carbon removal marketplace. The pilot programme would use farm data to calculate CO2 removal impacts from on-site conservation practices, allowing farmers to tap into an additional revenue stream. The programme would enable farmers to see the value of carbon credits, which fetch $15 per tonne on Nori’s marketplace. (Successful Farming)
Don’t look back in anger – At least 8 mln people in the US viewed advertisements on Facebook that denied the reality of climate change over the first half of 2020, according to think-tank InfluenceMap. The report identified 51 disinformation advertisements paid for by conservative groups, with the ads stating climate change was a hoax or that it was not an existential threat. Facebook announced a climate science information centre last month to tackle erroneous information about climate change. (Guardian)
Diamonds are forever – A Chicago-based company is using carbon capture technology to develop carbon negative diamonds. Diamond manufacturer Aether is utilising captured CO2 from Swiss-based Climeworks to create lab-grown diamonds that are being marketed as a more ethical alternative to traditional diamond mining that is fraught with problems, from worker exploitation to deforestation to water pollution. However, while lab-grown diamonds are marketed as a more ethical alternative, they’re typically made from fossil fuels. (FastCompany)
And finally… Climate Ctrl-X – Editing the genetic makeup of cows could significantly reduce methane from their belches and farts which contribute to the climate crisis, according to a new report. Gene editing – making changes in the DNA sequence of living things, essentially tailoring characteristics – has developed rapidly in the past decade. The report published last month by nonpartisan science and tech think-tank the Information Technology and Innovation Foundation (ITIF) looked at how gene editing can tackle climate challenges, from optimising biofuels to improving the sustainability of fish and shrimp aquaculture and reducing methane emissions from rice paddies and cows. ITIF’s report suggested that gene editing could lead to a 50% improvement in agricultural productivity by 2050. There are around 1.4 bln cattle on the planet, making up the second-largest source of agricultural GHGs after food waste. (Independent)
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