Newsletters > CP Daily: Monday October 12, 2020

CP Daily: Monday October 12, 2020

Published 00:50 on October 13, 2020  /  Last updated at 02:06 on October 13, 2020  / Carbon Pulse /  Newsletters

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

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TOP STORY

Major report urges China to cap CO2 emissions by 2025, strengthen NDC

China should set an absolute cap on CO2 emissions in its 14th five-year plan and strengthen its 2030 targets under the Paris Agreement, a report commissioned by the Chinese government recommended on Monday.

AMERICAS

California power emissions rose in August as heatwave increased demand

California power sector emissions rose year-on-year in August as sweltering weather swept across the state, causing the grid operator to issue the first rolling blackouts since 2001, California Independent System Operator (CAISO) data showed.

California offset task force ideas offer limited market benefit, say traders

California carbon market participants see offset task force recommendations for a reduced invalidation period and a tradeable limit as positives, but foresee few market impacts if those changes were implemented.

EMEA

Adding buildings to the EU ETS is “no miracle powder”, MEPs say

Expanding the scope of the EU ETS to include the bloc’s building stock will not sufficiently address emissions from the sector, MEPs and experts said on Monday, as the European Commission prepares to unveil its strategy to modernise heating and cooling systems this week.

EU should stick to domestic-only climate target through 2030, says Commission official

The EU should stick to a “domestic-only” emissions target until at least 2030, a European Commission official said on Monday, rejecting a return to the bloc using international credits during Phase 4 of the ETS.

EU Market: EUAs bounce back towards €26 after hitting eight-week low

EUAs fell to their lowest in almost two months on Monday amid a weaker energy complex, technical selling, and worries over the coronavirus, reinforcing the downward trend that pushed prices nearly 5% lower last week.

ASIA PACIFIC

Australia Market Roundup: Issuance slows, CDM deadlock could shift voluntary dynamics

Australian carbon credit issuances slowed to just over 250,000 units this week, while a UN impasse over the future of the CDM could have major impacts on Australia’s voluntary emissions market.

COMMENT

Autumn stock-take on EU carbon prices

It’s officially autumn; EU carbon allowance (EUA) compliance buyers are weighing up the choice between doing their 2020 buying now or waiting till the spring, fuel prices are on the rise as temperatures fall, and analysts have updated their price predictions for the rest of the year. Time for a stock-take.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Taking out the trash – Mitsui & Co., the Japanese trading house, will sell all its remaining stakes in coal-fired power plants by 2030, Reuters reports. The company has set a net zero emissions target by 2050 and is shifting from coal to gas as part of that process. Mitsui & Co. still owns stakes in coal plants in China, Indonesia, Malaysia, and Morocco.

Shaky future – Some of China’s state-owned steelmakers and power plants have been ordered to stop coal exports from Australia, according to Argus. The orders are not official and have reportedly only been issued to some companies in some parts of China. However, the report illustrates the increasingly strenuous relationship between the countries, and also underlines the uncertain future of Australia’s massive coal export industry.

DIY – In Australia, the water sector in Victoria is planning to launch a number of carbon offset projects to help the industry meet the state government target of becoming carbon neutral by mid-century. The credits will be used to offset emissions the industry isn’t able to cut. The West Gippsland Catchment Management Authority has issued a tender on behalf of all the state’s regional authorities and water companies, seeking proposals from suitably qualified consultants to undertake a carbon sequestration analysis to support a proposal for a statewide offset programme. The programme will be modest in size, but adds to the steadily growing offset demand from state governments and agencies in Australia.

Methane leaks – A European Commission strategy to address methane emissions, due to be released on Wednesday, will not set limits on emissions from fossil fuels but will focus on data monitoring and reporting instead, according to a leaked draft seen by Euractiv. Environmental campaigners said that delaying plans to reduce emissions to 2024 or 2025 means that cuts won’t likely be seen before 2030. As a first step, the strategy recommends promoting the establishment of an independent international methane emissions mechanism covering the energy sector. Using the Copernicus satellites, the EU executive also proposes a global surveillance system for so-called “super-emitters” – oil and gas facilities with “disproportionately high-emissions” of methane leaking from the installations.

Straying off – In negotiations over the next funding period for farmers under the EU’s €60 bln Common Agriculture Policy, member states have failed to account for the more ambitious climate target recently proposed by the European Commission, NGO Germanwatch said in a press release. According to the statement, a large part of the direct payments would be defined as” climate-friendly “without any effective criteria, so that nothing would have to change in most farms in terms of land management and animal husbandry”. (Clean Energy Wire)

Friendly separation – Polish state-run utilities will next year start separating coal assets from the rest of their business, which should make it easier to raise financing for green projects as banks shun fossil fuels, according to a deputy assets minister. The ways to do it are still under discussion, but possible options include the kind of reorganisation seen in Germany, where energy giants RWE and EON split their businesses. Meanwhile, Poland is in talks with unions at its biggest coal group PGG, which ended in an initial agreement that assumes gradual closure of PGG mines by 2049. (Reuters)

Triple jump – One in 10 new cars sold across Europe this year will be electric or plug-in hybrid, triple last year’s sales levels after carmakers rolled out new models to meet the EU’s updated emissions rules, according to projections from NGO Transport & Environment. The market share of mostly electric cars will rise to 15% next year, the group forecasts, as carmakers across the continent race to cut their CO2 levels. Under the rules, carmakers must reduce the average emissions from their vehicles to 95g CO2/km or face fines that could run into billions of euros. In the first six months of the year, average emissions fell from 122g to 111g, the largest six-month drop in more than a decade. (FT)

May the carbon tax rise up to meet you – Ireland is set to raise its domestic carbon tax by 29% next year when the government unveils its annual budget on Tuesday. A coalition deal agreed earlier this year – ending months of political stalemate following February’s election – decided that the tax on fossil fuels current set at €26/tonne of CO2 would rise by a steeper trajectory than planned until at least 2029 – increasing by €7.50/year rather than €6. According to RTE, next year’s rise will lead to a €1.47 increase in the cost of a 60 litre fill of diesel and €1.28 for a similar amount of petrol, as well as add 90 cents to a bag of coal and 20 cents to a bale of peat briquettes.

Doubling up – Utility Duke Energy announced plans Friday to double its renewable generation by 2025 and to transition its natural gas business to net zero methane emissions by 2030. The company plans to double its enterprise-wide renewable portfolio standard to 16 GW by 2030, up from the current 8GW goal. It is also aiming to add renewable capacity for 40 GW by 2050 and retire all coal-fired only units in the Carolinas by 2030. In addition, the utility’s natural gas business would target net zero methane emissions by 2030, but it did not detail how it would achieve that goal.

Who’s to blame – Pacific Gas & Electric (PG&E) reported on Friday that the California Department of Forestry and Fire Protection (CAL Fire) had seized utility equipment as part of an investigation into the Zogg fire in Shasta County, California. The disclosure comes months after PG&E exited bankruptcy after being found liable for the 2018 Camp Fire. The company has implemented various policies, including shutting off power, to reduces the chances of sparking wildfires in the state.

Risky business – New homes sales are declining in low-lying areas in Florida due to buyers showing more apprehension about climate change, according to new research released Monday. A study published in the National Bureau of Economic Research found the volume of home sales in the areas most exposed sea level rise dropped 16-20% during 2013-18 compared to less exposed areas. Those at-risk markets declined 5% from their peak in the 2018-20 period, the research found. “We propose a demand-side explanation for our findings where prospective buyers have become more pessimistic about climate change risk than prospective sellers,” the authors wrote.

Sold to the highest bidders – Paul Milgrom and Robert Wilson, professors at Stanford University, have won this year’s Nobel Prize in economics for their work on auction theory. The committee awarding the prize — officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — said the theory they developed had been instrumental in the design of new and complex auction formats used around the world for purposes ranging from the sale of radio spectrum, to setting electricity tariffs, allocating airport landing slots or setting up emissions trading systems. (FT)

And finally… Cum(mings) what May – British PM Boris Johnson has asked former PM Theresa May to take charge of the COP26 climate summit planned for Glasgow in 2021. May has not turned down the post, according to The Sunday Times, but she has been put off by the prospect of having to work closely with Johnson’s chief advisor Dominic Cummings. She reportedly discussed climate change with Johnson because she had introduced the target for the UK to be “net zero” in carbon emissions by 2050. The climate summit will see leaders from across the world descend on Scotland’s biggest city for a ‘global stock-take’ of the progress made since the 2015 Paris Agreement. (The National)

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