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TOP STORY
ANALYSIS: Shipowners face reality of EU carbon market expansion amid global wrangling, retaliation threats
The European shipping industry is waking up to the reality that the 27-nation bloc is determined to include the sector in its ETS, as the UN body tasked with tackling global maritime emissions struggles to agree on measures that campaigners say would make little difference.
EMEA
EU environment ministers strike partial deal over bloc’s climate law
EU environment ministers agreed a partial deal over the European Climate Law to bind member states to an EU-wide 2050 net zero target on Friday, deferring a decision on the bloc’s 2030 goal.
EU Market: EUAs leap 5% to above €25 as rebound continues
EUAs jumped more than 5% to above €25 on Friday, continuing the previous session’s rebound from a four-month low on short-covering and amid bullish signals from the energy complex.
AMERICAS
Environmental groups, legislators urge stronger post-2020 RGGI caps for New York
New York’s proposed RGGI CO2 budgets over the next decade should be updated to align with the state’s long-term climate goals, and the government should set a lower minimum threshold for units to be regulated under the power sector cap-and-trade programme, environmental groups and lawmakers wrote in public comments.
Traders foresee limited near-term California LCFS price impacts from US election result
Market participants do not anticipate California Low Carbon Fuel Standard (LCFS) credit prices to immediately react once the results of next month’s US presidential election are known, although a win by Democratic nominee Joe Biden coupled with other factors could have bearish implications in the long term.
Financial entities, emitters’ California carbon positions stagnate as prices hit 7-mth high
Speculators and compliance entities held their California Carbon Allowance (CCA) length mostly firm over the past week as neither side dramatically altered their positions, US Commodity Futures Trading Commission (CFTC) data showed Friday.
ASIA PACIFIC
KEPCO to stop subsidising KAU purchases for power plants
South Korea’s majority state-owned power company KEPCO will stop subsidising CO2 allowance purchases for power plants from next year, according to domestic media reports this week.
Australia Market Roundup: Issuance drops, Woodside revises down ACCU estimate
Australian carbon credit issuances fell back down to near-average levels this week after last week’s bumper handout, while oil firm Woodside has revised down its expected offset yield from a major forestry project.
CN Markets: Pilot market data for week ending Oct. 23, 2020
Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Brexit options – The UK parliament’s cross-party Business, Energy and Industrial Strategy (BEIS) Committee has urged the British government to set out by the end of the month the country’s post-Brexit carbon pricing plans. That’s according to a letter re-published on Twitter by committee chair Darren Jones MP that said the uncertainty was preventing British emitters from carrying out the government’s instructions to prepare for a ‘no-deal’ scenario on Jan. 1. Read Carbon Pulse’s take on the committee’s hearing on the UK’s ETS framework earlier this month.
Innovation impetus – The French government has launched a call for hydrogen projects looking for state support to fund developments in two categories. The first category, with €2-5 mln available per project, is for improvements in the production and transport of hydrogen, as well as in developing end user cases. The second focuses on developing renewable or carbon-free hydrogen supply and distribution within the industrial and transport sectors. France’s September pledge contained one of the EU’s most ambitious electrolyser capacity targets, with a plan to bring 6.5 GW online by the end of the decade. (ICIS)
Refuted in Russia – Russia has no plans to introduce a carbon tax, Maxim Reshetnikov, Russian economic development minister, told news agency Interfax. Foreign investors raised the issue of carbon regulation in the country against the backdrop of the EU’s plans to introduce a CBAM from 2023 during a meeting of Russia’s Foreign Investment Advisory Council this week. Russian businesses are already raising the issue that companies that might be affected by the EU’s planned carbon border tax may be needing extra support from the government. The authorities are in dialogue with them, but it is difficult for the moment to discuss any details, Reshetnikov said.
Outback exports – Australia has granted “major project” status to a $36 bln project to build the world’s biggest power station and export green hydrogen from a remote desert to Asia. The designation recognises the strategic significance of the Asian Renewable Energy Hub, a project backed by Vestas, Intercontinental Energy, Macquarie Group, and CWP Renewables. It reflects growing recognition from a previously sceptical Conservative government that climate concerns mean it has to diversify its economy away from fossil fuels, which generated $73 bln in export earnings last year. Canberra’s backing for the project aims to fast-track construction of the world’s largest solar and wind farm on a 6,500 square km site in Western Australia. (FT)
California carbon capture – CCS technology isn’t a silver bullet, but it could play an important role in reducing emissions from California’s electricity and industrial sectors, according to a new report from the non-profit organisation Energy Futures Initiative (EFI) and Stanford University. California’s geological structure, which includes thick layers of sand and shale, as well as other factors, offer the potential to store 60 MtCO2 – equal to total emissions from the state’s electricity sector in 2017 – annually, for 1,000 years. The report said California has strong drivers for CCS, including ambitious emissions goals, the support offered by the Low Carbon Fuel Standard’s (LCFS) inclusion of CCS projects, as well as the potential of CCS to create clean energy jobs. The report pinpointed 76 electricity generation and industrial facilities in the state that could be equipped with the technology. (Utility Dive)
Lousy (sm)Arch weather – The second-largest coal company in the US is accelerating plans to pivot away from producing the type of coal used in power plants, a stark sign of the sector’s irreversible decline. Arch Resources reported a $192 mln quarterly loss Thursday, and announced plans to steeply cut production from its mines in Wyoming’s Powder River Basin as part of its pivot toward coal used in metals production. CEO Paul Lang said the company’s undertaking a “systematic winding down” of its thermal coal operations, calling it the “right business solution in the event we are unable to find an appropriate buyer” for those assets. (Axios)
And finally… Rear window – President Donald Trump and Democratic nominee Joe Biden squared off in the last US presidential debate on Thursday, which was also the first time that climate change was a pre-scheduled segment at a debate. Biden said he would “transition from the oil industry” because of its sizable pollution, though his deputy campaign manager clarified that Biden was talking about eliminating oil subsidies. Biden also added after the debate that while he would get rid of subsidies, “we’re not getting rid of fossil fuels for a very long time”. Meanwhile, Trump kept up his persistent message of economics and US energy dominance, and tried to shift the focus back to China’s “filthy” emissions and his false claim that Biden wants to ban fracking. The oddest part of the exchange may have centered on energy efficiency measures pushed by Biden, which prompted Trump to accuse him of a war on windows: “When he says buildings, they want to take buildings down because they want to make bigger windows into smaller windows,” Trump said. “As far as they’re concerned, if you had no window, it would be a lovely thing. This is the craziest plan that anybody has ever seen.” Additionally, the president was asked about deregulation in the context of the communities of colour that are more likely to live near chemical plants and oil refineries. “The families that we’re talking about are employed heavily and they’re making a lot of money, more money than they’ve ever made,” Trump said. (Axios, Politico)
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