CP Daily: Friday October 30, 2020

Published 01:00 on October 31, 2020  /  Last updated at 01:04 on October 31, 2020  / Carbon Pulse /  Newsletters

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

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EXCLUSIVE: China wants offsets in ETS from start, opens door for financials

China’s environment ministry wants to allow the use of carbon credits from the start in the national emissions trading scheme, including from renewable energy projects, and to also open the door for financials to trade CO2 permits, according to draft government documents obtained by Carbon Pulse.

PREVIEW: US election marks critical juncture for the future of domestic, international climate policy

Tuesday’s US election is primed to have a significant impact on future national and global climate mitigation efforts, with former Vice President Joe Biden and President Donald Trump offering starkly different views on environmental policy and clean energy.


EU Market: EUAs edge up but technical selling limits gains, as prices notch 7% weekly fall

European carbon prices extended their rebound from this week’s four-month low on Friday, but technical selling above €24 continued to cap EUA gains.

Italy’s Enel increases ‘science-based’ emissions reduction target for 2030

Italian utility Enel on Friday announced a 2030 commitment to reduce its emissions intensity by 80% below 2017 levels, ramping up from a goal of 70% that the company set only last year.

Major European airlines bounce back from COVID demand drop in Q3, but risk ‘second wave’ effects

European airline groups AirFrance/KLM and IAG saw a rebound in their passenger capacity in Q3 on increased holiday travel demand during the summer break, but restrictions amid a second wave of coronavirus cases cast doubt over the sector’s recovery.

Cement firms flag Q3 COVID recovery, expect little impact from new restrictions

Two major cement producers on Friday reported a rebound in output over Q3 as building sites worldwide resumed activity following coronavirus lockdowns, with recent restrictions in Europe expected to have little impact.

Portugal’s EDP sees EU coal power generation plunge 58%

Portuguese utility EDP saw a 58% year-on-year drop in its EU ETS-covered coal power output for the first nine months of 2020, far outstripping a 3% fall in its total power output, it reported on Friday.


California LCFS posts 124k deficit in Q2 2020 on higher diesel volumes

Entities regulated by California’s Low Carbon Fuel Standard (LCFS) recorded a credit deficit of 124,100 tonnes during Q2, bucking some stakeholders’ expectations that a coronavirus-fuelled plunge in gasoline demand could yielded a surplus.

Hedge funds add to California carbon positions as allowance prices slip from recent highs

Speculators’ California Carbon Allowance (CCA) length rose across the week as prices dipped, while compliance entities kept their overall long position relatively stable, US Commodity Futures Trading Commission (CFTC) data showed Friday.

Virginia asks court to dismiss cap-and-trade lawsuit on procedural grounds

Virginia is looking to quash a lawsuit challenging its RGGI-modelled carbon market regulation, as the government argues the industrial association plaintiff did not pay the $71 filing fee on time, according to court records.

RFS Market: RIN prices inch down from 2.5-year highs ahead of US election

US biofuel credit (RIN) values under the Renewable Fuel Standard (RFS) retreated slightly this week from levels not seen in more than two years, as market stakeholders noted prices could react significantly based on the outcome of next week’s presidential election.


Australia Market Roundup: ACCU issuance sees big bump, BP to repurpose refinery

Australia’s Clean Energy Regulator tripled the number of carbon credits issued this week as a handful of projects applied for large amounts, while oil firm BP said it will wind down refining activities at a big-emitting facility in Western Australia.

Tokyo ETS firms donate 4.2 mln offsets to help make Olympics carbon free

A total 153 companies participating in Tokyo’s emissions trading scheme have donated almost 4.2 million carbon offsets to the metropolitan government to help offset emissions from the city’s hosting of the Olympic Games.

Lacklustre interest at Shanghai deadline day carbon auction

Shanghai sold only 118,000 of the 2 million allowances on offer at Friday’s auction, which was held on the deadline day for 2019 compliance for emitters still needing to acquire units.

CN Markets: Pilot market data for week ending Oct. 30, 2020

Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.



*Carbon Pulse is organising and moderating a series of side events at the IETA-ICAP Carbon Markets Virtual Pavilion on Nov. 11-12, including sessions on the EU ETS, China, Canada, RGGI, and carbon as an investible asset class. The full event programme also offers high-level discussions and interactive sessions, along with an informal carbon markets networking area for people to connect and stay in touch. Registration is free and open to the public, but spaces are limited for the Carbon Pulse side events so sign up now!*

No ‘green’ label – Gas-fired power plants will not be classed as a sustainable investment in the EU unless they meet an emissions limit that none currently comply with, according to a draft European Commission document seen by Reuters. The landmark EU rules, due to be finalised this year, will force providers of financial products to disclose from end-2021 which investments meet climate criteria and can therefore be marketed as “sustainable”. The draft rules say that to be classed as a sustainable investment, gas power plants must not produce more than 100 grams of CO2e per kWh. Even Europe’s most efficient plants produce more than three times this limit, according to estimates by industry and climate think-tank Ember. To comply, plants could use CCS technology, although currently no European gas plants do so.

Innovation fun – The European Commission received 311 applications for the first €1 bln call for projects under the EU’s Innovation Fund, financed through the auctioning of 450 mln EUAs plus non-disbursed funds from its predecessor NER300 programme. The fund is meant to support large-scale CCS, renewables, and energy storage projects through a two-stage application process that will review the candidates’ potential for GHGs avoidance and degree of innovation. The Commission expects to launch a second call for smaller-scale projects in December.

Falling short – The Netherlands, one of the EU’s biggest polluters, looks set to miss its own target for reducing GHG emissions this decade despite new climate initiatives, its main environmental advisory body said Friday. Dutch emissions are set to drop 34% relative to 1990 levels by 2030, PBL said, well short of the government’s target of a 49% reduction by the end of the decade. “The rate at which emissions are reduced needs to double in the next 10 years in order to reach the goal,” the researchers said. (Reuters)

Vroom – The German car industry has committed to climate-neutral mobility by 2050 for the first time, but continues to reject a sole focus on electric mobility. Following a fierce quarrel within the lobby group, industry association VDA said that modern combustion engines and synthetic fuels “will play a major role” in achieving climate targets, even if EVs are the near-term priority. In contrast, VDA’s largest member Volkswagen and many green mobility proponents argue that a clear focus on the rollout of electric mobility is required to lower emissions in the sector, which have remained stubbornly high. (Clean Energy Wire)

Balkan Stream – The extension of Gazprom’s Turkish Stream gas pipeline through Bulgaria was falsely labelled as an extension of the national gas transmission network and circumvented EU energy liberalisation rules under the Third Energy Package, a Euractiv investigation found. As a result of the extension of the Turkish Stream, Gazprom now has control of all of Bulgaria’s key gas pipeline exits in the strategic southern direction to Turkey, Greece, and North Macedonia, as well as to Serbia in the west. In turn, the only opportunities for free export of non-Russian natural gas through Bulgaria are north to Romania. According to some experts, the moment of truth will come when the Balkan Stream is put into operation as it will become obvious that it is in violation of the EU Gas Directive, as Gazprom holds more than 50% of its capacity.

Extracted from Exxon – Oil major ExxonMobil will lay off an estimated 14,000 workers, or about 15% of its global workforce, including 1,900 workers in the US, the company announced Thursday. Analysts said the layoffs are part of an effort by the beleaguered company to maintain its stock dividend despite sharply reduced demand during the coronavirus pandemic. While other oil majors have leaned into reducing emissions and building out renewable energy, Exxon has doubled down on oil as it plans to increase its GHG output in the coming years. News of the layoffs comes as a former Exxon employee, who consistently received strong performance reviews and was widely respected by his colleagues, says he was pushed out of the company after he raised Exxon’s climate denial in a Q&A session with company executives. (Climate Nexus)

Raising Arizona – Arizona Corporation Commissioners on Thursday in a split vote approved a plan for utilities to get all of their energy from carbon-free sources by 2050, bringing the state closer in line to other Western US states. The new regulations require electric utilities to get half their power from renewable energy like solar and wind in 2035, with the 2050 target incorporating other measures like nuclear and energy efficiency measures such as subsidising low-watt light bulbs or attic insulation for customers. The plan also has interim requirements that utilities cut CO2 emissions in half by 2032 and 75% by 2040 beneath an average 2016-18 baseline. (azcentral)

Explain yourself – California Senator Dianne Feinstein (D) and Representative Nanette Barragan (D) on Thursday called on utility Southern California Gas Company (SoCalGas) to explain recent reports that it was undermining California’s climate change goals. In their letter, the federal legislators cited an ongoing investigation by the California Public Utilities Commission’s Public Advocates Office that SoCalGas has engaged in a lobbying campaign to undermine the state’s clean energy goals. According to documents related to the investigation, SoCalGas has formed a group named Californians for Balanced Energy Solutions using ratepayer money to advocate for increased natural gas use without clearly communicating its relationship with the company. Additionally, the documents say the utility has lobbied against increased efficiency standards for home furnaces and failed to comply with the Public Advocates Office’s discovery requests regarding additional documents related to the investigation.

One and only – Maryland issued nearly 5,300 RGGI offsets to a landfill methane capture project on Friday, marking the fourth issuance for the only such project registered in the Northeast US power sector cap-and-trade programme. The new issuance marked a significant reduction from the 15,400-16,900 issued in each of the three previous reporting periods for the New Beulah Landfill Gas project. RGGI compliance entities can use offsets to cover up to 3.3% of their total obligations, but no credits have been used to date. The cap-and-trade programme is cutting two offset protocols in 2021, with some member states opting to eliminate the use of the credits completely.

REC-comended – Virginia-based bourse Nodal Exchange and Chicago-based product development firm IncubEx on Thursday announced the upcoming launch of seven new Renewable Energy Certificate (REC) futures and options on Nov. 17. Pending regulatory review, Nodal will list physically-delivered futures contracts on:

  • M-RETS Renewable Energy Certificates from Center for Resource Solutions (CRS) Listed Wind Energy Facilities (front-half and back-half)
  • Texas Compliance Solar Renewable Energy Certificates from CRS Listed Facilities (front-half and back-half) and
  • New York Renewable Energy Certificates Tier 1

Additionally, Nodal also will add option contracts on Texas Compliance Renewable Energy Certificates from CRS Listed Facilities (front-half and back-half), complementing the corresponding futures contracts listed in Dec. 2019.

And finally… Curse of Chucky – An independent review committee of US utility FirstEnergy’s board of directors on Thursday evening announced the immediate termination of CEO Charles “Chuck” Jones and two other top executives overseeing marketing and external affairs for violating “certain FirstEnergy policies and its codes of conduct.”  The move followed the same-day guilty pleas of two of four lobbyists charged in July in a federal racketeering probe into the nearly $61 mln campaign to fund the passage by Ohio lawmakers of a $1.5 bln public bailout of two northern Ohio nuclear power plants previously owned by FirstEnergy and two coal-fired plants jointly owned by the state’s utilities through the legislation HB-6. Though not identified in the July indictment, FirstEnergy is believed to have been “Company A” in the investigation of how corporate “dark money” was used by former Ohio House Speaker Larry Householder (R) to fund the multi-year campaign for passage of the bailout legislation. Despite a flurry of hearings to revoke HB-6 earlier in the fall, the Republican-controlled Ohio House and Senate have not moved the repeal of the legislation out of committee. (Utility Dive)

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