CP Daily: Thursday November 5, 2020

Published 00:24 on November 6, 2020  /  Last updated at 09:20 on November 6, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

Free allocation of 2021 EU carbon allowances to be delayed -govt announcement

The distribution of free EU carbon allowances for 2021 will be delayed due to slow progress in setting ETS emissions benchmarks and calculating allocation quotas, according to a government announcement.

AMERICAS

Quebec cap-and-trade emissions rise for fourth straight year in 2019

Emissions regulated under Quebec’s WCI-linked carbon market increased by almost 1% last year, as the CO2 from a newly opened cement plant outweighed lower GHG output elsewhere in the economy.

NA Markets: RGGI allowance prices continue torrid H2 stretch, California carbon holds firm

RGGI Allowance (RGA) prices jumped by almost 4% this week on the potential for a presidential election victory by Democratic nominee Joe Biden, while California Carbon Allowance (CCA) values remained mostly steady after the publication of 2019 emissions data under the WCI-linked cap-and-trade programme.

RFS Market: RIN prices spike on prospect of Biden election victory

US biofuel credit (RIN) prices surged by 10% on Thursday morning as the Renewable Fuel Standard (RFS) market took a favourable view of Democratic nominee Joe Biden’s prospect of winning the presidential election.

UPDATE – US Election Roundup: Presidential vote count continues, as Georgia Democrats force Senate run-off

US election results remained too close on Thursday to decipher whether President Donald Trump or Democratic nominee Joe Biden will take the Oval Office next year, though an outside chance that Democrats could win two Senate special elections in Georgia gives a faint hope to passing climate legislation through Congress.

EMEA

EU Market: EUA recovery rally enters third day amid buying spurt, looming supply curbs

EU carbon allowances rose for a third straight day on Thursday, topping €26 for the first time in a month as short-covering, compliance and speculative buying, and looming supply curbs helped reverse more of the recent downtrend and lift prices further from this week’s four-month low.

EU receives over 300 proposals for clean tech projects chasing €1 bln of Innovation Fund cash

Some 311 large low-carbon projects will be competing for €1 billion from the first call of the ETS-financed Innovation Fund, with over half of the initiatives targetting industry decarbonisation.

Spanish utility Iberdrola unveils €75 bln decarbonisation plan

Spanish power producer Iberdrola unveiled plans on Thursday to invest €75 billion in its renewable energy, grids, and retail business by 2025, while rival Endesa reported a massive drop off in coal use.

ArcelorMittal sees output recover in Q3, prepares ‘green steel’ plans

Steelmaker ArcelorMittal reported a bounce in its output for Q3 after a sharp downturn caused by the coronavirus crisis, according to quarterly results on Thursday that detailed preparations for its first supply of ‘green steel’ through a CO2 savings certification system.

Wizz Air expects Q4 capacity drop as COVID resurgence reverses summer recovery

Hungarian carrier Wizz Air expects its passenger capacity to decline in Q4 due to a surge in coronavirus cases and new lockdown measures, undoing a Q3 recovery that saw its capacity reach 80%.

CORRELATIONS: EUA link to power and coal prices strengthens amid wider market turmoil

The relationship between EU carbon prices and German power has strengthened in recent weeks, with some indications of a more positive correlation also emerging between EUAs and coal as the fuel regains competitiveness against gas.

ASIA PACIFIC

China’s Guangdong province to hand out carbon credits for donating, selling second-hand clothes

The Guangdong provincial government has approved a pilot project to award carbon credits to companies, groups, and individuals that sell or donate used clothing, the first jurisdiction in the world to do so.

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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!*

Moscow move – Russian President Vladimir Putin signed a decree on Wednesday on cutting emissions in Russia by 2030 to 70% of 1990 levels including carbon sinks, Russian business newspaper Kommersant reports of the world’s fourth biggest emitter. That represents a tightening from Russia’s previous target and Paris Agreement pledge of a 25-30% cut beneath 1990 levels, with Putin now pushing his country to meet its commitment under the 2015 treaty but stressing that any action must be balanced with the need to ensure strong economic development. Experts noted to Kommersant that the new target de facto implies significantly higher emissions than the current level of 50% beneath 1990 levels when including sinks, and will be implemented without any extra efforts.

Delhi mulls – India is considering setting up trading programmes to curb its emissions of GHGs and particulate matter, according to environment ministry official Ravi Shankar Prasad, saying the country is also keen to benefit from an international carbon trading mechanism under negotiation through the Paris Agreement. Prasad was speaking at an online event where 24 private companies, including Reliance Industries, Vedanta, and JSW Steel, pledged their support for the government’s climate commitments. (Bloomberg)

Realigning development – A group of European development finance institutions managing $50 bln said on Thursday they planned to stop lending money to fossil fuel projects by the end of the decade. The Association of European Development Finance Institutions, whose 15 government-owned members invest across emerging and frontier markets, also said it would align all new lending to the Paris Agreement by 2022. It would also ensure that all investment portfolios achieve net zero emissions by 2050 at the latest. (Reuters)

Double, double boiler trouble – Almost a million gas boilers a year will have to be replaced with low-carbon forms of heating to meet the UK’s climate targets, but the public is unprepared for the change, according to a new report. Ministers are considering setting a date when the sale of conventional gas boilers will be banned, but think-tank Social Market Foundation said they risked a backlash unless they launched an education campaign to explain why it was necessary. About 25 mln homes in the UK are heated by natural gas and home energy use accounts for 15% of the country’s GHG emissions. (The Times)

Malay magic – Malaysia’s state-run oil firm Petronas has set a target to achieve net zero emissions status by 2050 as it steps up efforts to embrace cleaner forms of energy. Petronas said it would continue to intensify its efforts toward reducing emissions from its assets by deploying innovative operations and technologies. It also said it would pursue new avenues of revenue creation via investments in nature-based solutions as well as establish greater accessibility to cleaner energy solutions. (S&P Global Platts)

A higher TIER – Alberta’s carbon price under its large emitter programme, the Technology Innovation and Emissions Reduction (TIER) regime, will rise to C$40/tonne in 2021, the provincial environment ministry confirmed Thursday. This follows comments from Alberta Premier Jason Kenney earlier this year that the CO2 price for industrials and power sector emitters would rise by C$10 next year, despite the conservative-led province challenging the federal Greenhouse Gas Pollution Pricing Act (GGPPA) in the Supreme Court of Canada. The price hike will bring the TIER excess emissions charge in line with Ottawa’s rising CO2 price mandate under the federal legislation.

Taking the Highvale road – Calgary-based utility TransAlta will end operations at its Highvale thermal coal mine by the end of 2021 as it switches to natural gas at all of its coal-fired plants in Canada. The announcement comes four years earlier than TransAlta originally planned, with CEO Dawn Farrell saying the decision stemmed from the economics of producing coal under Alberta’s TIER carbon price. Farrell added TransAlta’s GHG emissions will be under 11.5 Mt by the end of 2022, down almost 70% from 2005. (CBC)

And finally… The cost of not doing business – The US exit from the Paris Agreement on Wednesday creates a climate liability risk for American businesses, according to analysts at BNEF. While no government had a net zero emissions commitment when the climate pact was signed in 2015, today 60% of global emissions are covered by such a pledge. This could create problems if US companies become unattractive to investors and become choked off to global capital flows, while their physical assets will also likely be in danger due to climate inaction.

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