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TOP STORY
ANALYSIS: Market braces for massive offset uptake in China’s carbon market
Offset trading in China’s national ETS could hit 250-500 million units in the market’s first year once the government finalises rules and begins issuing new credits, according to traders and analysts.
EMEA
CO2 emissions from German energy sector set to tumble by over 10% in 2020 -researchers
Germany’s energy-related CO2 emissions are set to notch a large annual drop for the third straight year, according to researchers, as the coronavirus pandemic slashes the sector’s emissions by more than 10% compared to 2019.
EU’s eastern neighbours need carbon pricing and integrated energy market to decarbonise, study says
The EU’s Balkan and Eastern European neighbours will need to establish their own carbon markets with a view to fully participating in the bloc’s ETS in the future and integrating their power and gas markets to effectively cut emissions, a preliminary study said.
EU Market: EUAs lift 3% as recovery rally continues ahead of US election
EUAs rose on Tuesday as wider markets continued to rebound from last week’s COVID-related declines, with carbon breaking above a key technical level following another strong auction further as traders kept a cautious eye on today’s US election.
ICE Futures Europe outlines plan for trading transition from EU ETS Phase 3 to Phase 4
ICE Futures Europe, Europe’s main emissions trading exchange, on Tuesday announced measures to prepare for transactions involving carbon allowances from Phase 4 of the EU ETS (2021-30).
AMERICAS
NA Markets: RGGI prices rise on US election outlook, California allowances stagnate
Traders took a more bullish view of the RGGI market on Tuesday ahead of the presidential election, as California Carbon Allowance (CCA) prices remained more muted on the secondary market.
INTERNATIONAL
UPDATED BRIEFING: World Bank REDD Deals
*Includes breakdown on Vietnam’s ERPA signed in Oct. 2020*
Five countries have signed deforestation reduction agreements under the World Bank’s Forest Carbon Partnership Facility (FCPF) that could form the base of possible international emissions trade, with the remainder of the deals expected to be completed by Nov. 2020.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
*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!*
Soil reversal – An average global temperature rise of 2C would lead to around 230 bln tonnes of carbon being released from the world’s soil, according to an international research study led by the UK’s University of Exeter. It reveals the sensitivity of soil carbon ‘turnover’ to global warming and subsequently halves uncertainty about this in future climate change projections. (Independent)
Quality over quantity – China on Tuesday released some draft proposals for its 14th five-year plan (2021-25) and a vision for 2035, though did not go into any details, saying instead it was prioritising quality of quantity. The statement reinforced China’s intentions to reduce its carbon intensity and peak GHG emissions by 2030, adding the country would develop a plan for how to do so. It also said the nation would be able to double economic output over the next 15 years. (Xinhua)
Come on ScoMo – The UK and France are leading a group of countries calling on the Australian government to make ambitious new climate change commitments by next month if Australian PM Scott Morrison is to speak at a global summit on the issue, reports the Guardian. A letter sent to Morrison and other national leaders on Oct. 22 called on countries to rebuild economies after the coronavirus “in a way that charts a greener, more resilient, sustainable path” that puts the world on track to limit global heating to 1.5C above pre-industrial levels. Speaking slots will be given only to leaders who set stronger targets to cut GHGs over the next decade, announce a long-term strategy to reach net-zero emissions, commit new finance for developing countries, or have ambitious plans and policies to adapt to locked-in climate change impacts. The letter is also signed by Chilean President Sebastian Pinera, Italian PM Giuseppe Conte, and UN Secretary General Antonio Guterres. (Carbon Brief)
Tax us, please – Australian Greens MP Adam Bandt addressed South Korea’s embassy in Canberra this week, and took the opportunity to encourage its major trading partner to impose carbon tariffs on Australia’s fossil-fuel intensive exports, according to the Sydney Morning Herald.
Who’s next – An Australian lawyer who earlier this week succeeded in having a major superannuation fund settling outside of court and agreeing on bringing its investment activities in line with a net zero pathway is taking on the government next, The Age reports. Representing a university student, lawyer David Barden will next week argue in court that the government is failing to take into account a wide range of climate change risks when issuing government bonds.
Can’t wait – Spain on Tuesday approved a decree setting out rules for renewable energy auctions with the aim of holding the first round by the end of this year, its Energy and Environment Ministry said. Spain has set out an ambitious plan to install 50 GW of renewable capacity by 2030, which “is a crucial lever to reactivate the economy, for a recovery, and we cannot wait,” Energy and Environment Minister Teresa Ribera said. The current system was created in 2013 when the costs of producing energy from renewable sources were higher than the price it could command in the market, but solar energy can now be produced at costs lower than the market price. Bids will be submitted sealed, and the winners will receive different prices based on their offers, in what is known as a “pay as bid” system. (Reuters)
Shakin’ and Bakin’ – Baker Hughes on Tuesday said it would buy Norway-based Compact Carbon Capture in a bid to expand its footprint beyond oil and gas oilfield services as it prepares for a transition to a low-carbon future. Baker said the deal for Compact Carbon Capture, which develops technology specialising in CCS, includes all intellectual property, personnel, and commercial agreements. Baker is targeting net zero emissions by 2050. (Reuters)
Get out the shovels – The Alberta government on Monday announced it is funding C$100 mln for Emissions Reduction Alberta’s Shovel-Ready Challenge through revenues from the province’s market-based large emitter programme – the Technology Innovation and Emissions Reduction (TIER) regime. Up to C$50 mln in additional funds will also be available from the federal Low Carbon Economy Leadership Fund. The financial support is aimed at companies ready to implement leading-edge technologies for economic recovery and sustainability in applications for both greenfield and brownfield operations. Meanwhile, the Alberta environment ministry on Tuesday posted new documents regarding quantification methodologies and aggregate facility benchmarking under TIER and the province’s Specified Gas Reporting Regulation.
Consultation extension – Offset standard manager and developer Verra has extended its public consultation on Jurisdictional and Nested REDD+ (JNR) by 30 days until Dec. 7. Verra said it extended the consultation – which covers proposed changes for jurisdictional REDD+ programmes and nested projects, including draft versions of the JNR Requirements, a new JNR Allocation Tool. and the JNR Validation and Verification Process – to provide stakeholders more time for substantive review. Due to the extension, Verra added the final JNR updates will likely be released by the end of the first quarter of 2021.
REC sale – Evolution Markets will host a Renewable Energy Credit (REC) auction on behalf the Massachusetts Clean Energy Center on Nov. 12, the brokerage announced Tuesday. MassCEC plans to offer 6,127 Vintage 2020 Massachusetts Class I Renewable Energy Certificates (RECs) generated in the first and second quarters of 2020, with the credits coming from four different projects in the Bay State. The credits will be sold in one lot.
And finally… Gas(light) gamble – A climate poll on Twitter posted by Shell has backfired. The survey, posted on Tuesday morning, asked: “What are you willing to change to help reduce emissions?” US Congresswoman Alexandria Ocasio-Cortez (D) was one high-profile respondent, posting a tweet that was liked 350,000 times stating her willingness to hold Shell accountable for lying about the impact of climate change for 30 years. Others said the company was gaslighting the public by suggesting individual actions could stop the climate crisis, rather than systemic change to the fossil fuel industry. Shell responded saying “changing the energy system requires everyone to play their part.” (Guardian)
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