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CARBON FORWARD 2020
Voluntary carbon project developers are optimistic about their growth prospects, regardless of warnings that the onset of the Paris Agreement era may drastically shrink supply.
The European Commission will try to accommodate demands from some EU nations reluctant to endorse a higher 2030 emissions reduction target by assessing the impact on individual member states and sectors, the Commission’s climate chief Frans Timmermans said Friday.
Several richer EU nations may fall short of their emissions targets in non-ETS sectors, according to the European Commission’s assessment of national climate plans released this week as the bloc’s leaders discuss whether to set even higher goals.
EU carbon prices jumped on Friday, fuelled by a very bullish auction result, but gave back all those gains to close at their lowest in four months and notch a 3.2% fall for the week.
A private-sector taskforce assembled by former Bank of England boss Mark Carney that is aiming to scale up global voluntary carbon offsetting will endeavour to launch a new “credible” market by early 2021, according to reports.
Australia’s Clean Energy Regulator issued more than 1.2 million new carbon credits this week as developers LMS Energy and Terra Carbon requested crediting for a big number of projects, while analysts said they see domestic offset prices over time aligning with large-scale generation certificates.
Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.
The New York Public Service Commission (PSC) on Thursday identified the Northern New York transmission line project as high priority for meeting the state’s enhanced renewable targets, as it added new programmes and carve-outs to the Clean Energy Standard (CES).
Speculators and compliance entities both increased their California Carbon Allowance (CCA) holdings this week as prices increased on the secondary market, US Commodity Futures Trading Commission (CFTC) data showed Friday.
BITE-SIZED UPDATES FROM AROUND THE WORLD
It’s a trend – Mitsubishi UFJ Financial Group is set to become the latest in a growing line of Japanese financials pulling out of coal, Bloomberg reports. The banking group is set to announce that it will halve its $3.58 bln in lending to the sector by 2030 and reduce it to zero by 2040, the agency reported, citing anonymous sources. Several other banks have already announced similar targets, and earlier this week power company Jera said it will likely shut five of its nine coal-fired power plants by 2030, replacing them with less polluting fuels, though the exact details will depend on government policy, according to a report by Argus.
It’s definitely a trend – South Korea’s majority state-owned utility Kepco drew global criticism earlier this month when it decided to take a 40% stake in the Vung Ang 2 coal-fired power project in Vietnam. But Kepco president Lee Jun-sin told a government hearing Thursday evening that Vung Ang would be the company’s last investment in coal, local media reported. That means that two previously planned coal projects – the 1GW Sual 2 project in the Philippines and the 630MW Thabametsi plant in South Africa – will either be cancelled or transitioned to natural gas.
Farm focus – New Zealand recently became the first nation in the world to propose legislation that would make climate risk reporting mandatory for banks. Rating agency Fitch said in a note Friday that the move is unlikely to impact banks in the near term as the law would only enter into force in 2023 if approved by parliament. However, it could lead to heightened scrutiny on lending to the agriculture sector, Fitch added. Agriculture accounts for almost half of New Zealand’s total GHG emissions, and the government is in the process of designing a carbon pricing mechanism for the sector that would be introduced in 2025. Agriculture also accounts for 13% of NZ banks’ lending portfolios, and is the biggest source of emissions within that.
Push it higher – Germany’s environment minister has called for a sharp increase in the country’s renewables targets. Svenja Schulze said the country will have to increase renewables’ share in power use to “at least 75%, maybe even 80%” by 2030, depending on the new EU climate target currently under discussion. A new target would require a massive policy effort, given that Germany is currently not on track to even reach the existing target of 65%. (Clean Energy Wire)
I get by with a little support from my (German) friends – The German Ministry of the Environment, Nature Conservation and Nuclear Safety (BMU) has announced it is supporting Gold Standard to develop a framework to transition the voluntary carbon market for alignment with new rules emerging from the Paris Agreement in an effort to scale market impact. “With clear science indicating an urgent need to decarbonise the global economy, alongside a growing willingness among companies to commit to climate action, the voluntary carbon market is poised to become a major solution to the climate emergency,” it said. Gold Standard and partners that include government, civil society, and market stakeholders will develop Voluntary Carbon Market Transition Framework to serve as a roadmap to transition voluntary carbon standards to be aligned with Paris’ Article 6 to remain ambitious and credible, accessible and equitable for host countries and engaged parties, and operational and scalable to contribute significantly to global climate goals.
Aviation ask – An annual independent survey carried out for UK air navigation services provider NATS has found a strengthening of public attitudes towards climate action and a demand for the aviation industry to treat it as a top priority. The vast majority (70%) of those interviewed across the UK – an 18-point rise in just two years – agreed that emissions reduction was the highest priority for improvement by the industry, almost double the number who think it should prioritise noise (36%). By a margin of 12-to-1, the public believe the industry should be prioritising investment in greener technology, such as fully-electric commercial aircraft, and just 39% supported airport expansion, down from 57% in 2019. The survey was carried out by Ipsos MORI in early March, just before COVID-19 brought air travel to a virtual halt. (GreenAir Online)
Gas ask – Two gas generators filed a complaint with the US Federal Energy Regulatory Commission (FERC) this week, claiming the New York Independent System Operator’s (NYISO) market rules are unjust and discriminatory. The Cricket Valley Energy Center and Empire Generating Company asserted that current market rules do not address price suppression caused by zero emissions credits (ZECs), renewable energy credits (RECs), or offshore wind credits, and therefore disadvantage resources not receiving those payments. Their request mirrors the complaint filed by Calpine Corporation and other generators in 2016 that eventually led to the controversial Minimum Offer Price Rule (MOPR) expansion within the PJM Interconnection’s wholesale capacity market. New York has a goal of reaching 70% renewable energy by 2030, one formally adopted by the state’s Public Service Commission on Thursday. (Utility Dive)
Coast-to-coast – Two developments on opposite coasts of the continental US this week signalled the country’s continued transition away from fossil fuels toward clean energy. The Boardman plant – Oregon’s last coal-fired power station and the largest single emitter of GHGs in the state – shut down for good yesterday, some 20 years ahead of schedule. The plant’s closure came one day after a major development for offshore wind energy on the Atlantic Seaboard. On Wednesday, utility Dominion Energy announced its offshore wind installation off Virginia Beach had completed testing and was ready to begin feeding into Virginia’s power grid. The 12MW test project is a significant step, the utility said, toward the completion of its proposed 2.6GW commercial project, which is the largest offshore wind project in North America and will start construction in 2024. (Climate Nexus)
How do I steer my early 30s? – The US EPA released updated small refinery exemption (SRE) data on Thursday, reporting two additional SRE petitions have been filed for compliance year 2019 of the Renewable Fuel Standard (RFS). The total number of refiners’ 2019 compliance waiver submissions for the national biofuels programme now stands at 31. No other changes were made to the agency’s SRE data. (Ethanol Producer Magazine)
And finally… Yes, but – US Democratic presidential nominee Joe Biden pitched a future dependent on renewables and carbon capture, while repeating his position that he would not ban fracking during last night’s town hall in Philadelphia. “The future rests in renewable energy,” he said, going on to tout his actions in the Obama administration that helped bring down the cost of wind and solar power. But Biden again tried to walk the line on his fracking stance in the crucial swing state that employs thousands in the industry, reiterating that he is not proposing a fracking ban. The former VP also tried to put some distance between his $2 trillion climate plan and the progressive-backed Green New Deal, saying that getting to a zero-carbon economy by 2030 is “not possible”. Instead, Biden highlighted using CCS for eliminating emissions from electricity generation by 2035, while still using natural gas. Separately, moderator Kristen Welker of broadcaster NBC on Friday announced that climate change will be among the six topics for the final presidential debate between Biden and Donald Trump on Oct. 22. (Politico, AP)
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