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TOP STORY
CO2 removals will not be included in EU carbon market -senior official
The EU is not planning to include carbon removal certificates in the EU ETS, a European Commission senior official clarified on Wednesday as its climate department works on designing its first system to certify removals.
EMEA
EU Market: EUAs soar to two-month high on auction delay news
EUAs leapt more than 5% to a two-month high on Wednesday on news that the start of the 2021 auctions would be delayed.
Poland’s PGE posts 3.2% fall in CO2 output as carbon costs squeeze margins
Poland’s utility PGE posted a 3.2% year-on-year fall in CO2 output over the first nine months as its carbon costs weighed on the company’s coal generation.
Over 35 mln EUAs could be added to 2021 auction supply after going unused by utilities
More than 35 million additional carbon allowances left over from Phase 3 of the EU ETS (2013-20) could be auctioned next year, the European Commission confirmed on Wednesday.
By the numbers: A snapshot of the EU ETS – 2019-20 edition
The European Commission on Wednesday adopted its annual report on the functioning of the EU ETS, which covered the market’s developments in 2019 and into 2020, as well as summarising measures proposed or agreed this year.
UK utility SSE sees emissions rise on greater gas balancing role
UK utility SSE saw its ETS-covered thermal power output rise 16% over the six months through September as the company’s gas plants were called on more often to balance the grid, the company said on Wednesday.
AMERICAS
TCI jurisdictions evaluating impact of COVID-19, but remain committed to carbon market
The Transportation & Climate Initiative (TCI) jurisdictions are evaluating the impact of the coronavirus pandemic on the cost-benefit analysis of the proposed fuel sector cap-and-trade scheme, but regulatory sources do not believe support for the regional US programme is wavering.
Grid operators, fossil fuel states differ on US FERC carbon pricing statement
Stakeholders drew competing views of the US Federal Energy Regulatory Commission’s (FERC) proposed policy statement last month on CO2 pricing, with wholesale power grid operators supporting the move and fossil-fuel heavy states encouraging a more cautious path forward.
GOP Senate majority would yield long odds for US clean fuel standard
A federal low-carbon fuel standard (LCFS) is unlikely to materialise unless Democrats can win both Georgia Senate seats up for grabs in a January run-off election, a conference heard Wednesday.
INTERNATIONAL
Switzerland signs second carbon offset deal with Ghana
Switzerland has agreed a bilateral deal with Ghana to purchase carbon offsets under the Paris Agreement’s Article 6, in the second such agreement announced by the European nation in as many months.
COMMENT
Has EU carbon rounded the corner?
We are now in the last four weeks of the Dec-20 EUAs’ reign as the front-year futures contract. There are fewer than 25 daily auctions left this year, and yesterday (Nov. 17) we were told that the European Commission won’t be starting 2021 EUA auctions until the end of January or even early February.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Updating pledges – Some 151 governments, or more than three quarters of countries, have indicated they will make stronger commitments under the Paris Agreement by the end of 2020, according to a tracker launched by the 48-member Climate Vulnerable Forum (CVF) of developing countries. Of those, 120 nations affirmed they would submit updated climate action plans since the start of the COVID-19 crisis, suggesting they are aiming for a green recovery. Laggard countries include Brazil, US, Canada, and the UK. (Reuters)
Announce it and they will come – Climate Action 100+, a global investors initiative working with major emitters to grind out emissions reductions in line with the Paris Agreement, on Wednesday announced nine more companies that have agreed to implement “strong governance frameworks and improve climate-related disclosures”. Those included Saudi Arabia’s Aramco, chemical firms Incitec Pivot and Orica from Australia, industrial conglomerate Grupo Argos from Colombia, German energy provider Uniper, Indian cement producer UltraTech, metals and mining firm Grupo Mexico and oil and gas giant PEMEX of Mexico, and Papua New Guinea’s Oil Search.
Climate calls – Most of US President-elect Joe Biden’s calls with foreign leaders Tuesday included discussions of climate change, E&E reported. Biden spoke with leaders of Chile, India, Israel, and South Africa, and discussed climate change with all but the Israeli leaders, according to readouts provided by the transition team. Biden also discussed climate change in earlier calls with international leaders, including Canadian PM Justin Trudeau and Pope Francis, and numerous world leaders mentioned climate change in statements congratulating Biden on his defeat of President Donald Trump. (Climate Nexus)
Mind on my money – The amount of professional money managed using all three ESG criteria rose sharply in recent years, and now represents 33% of the $51.4 trillion in total US assets under professional management, according to a new report. The findings from The Forum for Sustainable and Responsible Investment (US SIF) show that sustainable investing assets now total $17.1 trillion, a 42% increase over 2018. In asset-weighted terms, climate change is the most important specific ESG issue cited by money managers who invest both institutional and individuals’ money, with $4.2 trillion devoted to this issue, a rise of 39% from 2018. The foundation conducted research on 384 money managers, 1,204 community investing institutions, and 530 institutional asset owners. (MarketWatch)
Pricing in Pennsylvania – The Pennsylvania House Environment and Energy Resources Committee on Tuesday passed Rep. Jim Struzzi’s (R) resolution urging the Independent Regulatory Review Commission to reject Governor Tom Wolf’s (D) RGGI-modelled draft cap-and-trade regulation that was released for public comment this month. In the resolution, Struzzi reiterated his previous stance that joining the Northeast US power sector ETS is a major fiscal and energy policy decision that can only be made by the General Assembly, though Wolf has repeatedly said he has the power to implement the programme using his existing authority. Separately, the Pennsylvania Department of Environmental Protection told the Environmental Quality Board (EQB) on Tuesday it expects to present its report and recommendation on a rulemaking petition proposing an economy-wide cap-and-trade programme covering all major sources of GHG emissions to the Board during Q1 2021. The EQB agreed to take a look at the petition in Apr. 2019. (WCCS Radio, PA Environment Digest Blog)
More in Maryland – In its annual report to Governor Larry Hogan (R) released earlier this week, the Maryland Commission on Climate Change recommended that the state reach at least a 50% GHG reduction below 2006 levels by 2030 and achieve net zero emissions by 2045, up from the state’s current target of a 40% cut by 2030. However, some Maryland legislators said that the commission’s goals and recommendations did not go far enough, noting that the report’s support for the Transportation and Climate Initiative (TCI) cap-and-invest programme relies on a policy that has only been proposed. But other environmental groups praised the report, particularly for its recommendation that the state transition away from coal by 2030. (Maryland Matters)
Off in Ontario – Ontario risks missing its 2030 GHG reduction target because Premier Doug Ford’s administration has not made climate change a cross-governmental priority, according to a report from Auditor General Bonnie Lysyk published Wednesday. The report found that two government ministries and a key agency on the file neither assess or enforce building energy efficiency compliance, despite it being a major contributor to Ontario’s GHG emissions. Lysyk’s 2019 report similarly found that the Ford government will not meet its 2030 GHG abatement goal of a 30% reduction below 2005 levels. Separately, Dianne Saxe, Ontario’s former environmental commissioner who had her position axed by Ford, has been appointed deputy leader of the provincial Green Party. Saxe is the first Green candidate to be announced for the next election, scheduled for 2022, but the party said Monday that it intends to run a full slate of candidates. (CBC, National Observer)
Breached in Brazil – Climate campaigners are taking the Brazilian government to the country’s supreme court, arguing its deforestation record breaches constitutional protections for the Amazon and future generations as well as international commitments. The environmentalists are seeking a court order on the government to reduce deforestation by 60% in 2021, in line with the national policy on climate change. If this target is missed, campaigners say deforestation should stop completely for a year. In 2019, the Brazilian government abandoned its main anti-deforestation plan, known as PPCDAm. In the same year – President Jair Bolsonaro’s first full year in office – there was a 34% increase in deforestation. (Climate Home)
More consultations – Following the publication of several consultations on the EU’s climate policy and laws governing emissions reductions, including the EU ETS Directive, the European Commission on Tuesday published two additional consultations on the Renewable Energy and the Energy Efficiency Directives. According to the Commission’s impact assessment for an upgraded 2030 target, the share of energy from renewable sources for 2030 should reach 38-40%, whereas energy efficiency must be improved by 36-39% for final energy consumption and 39-41% for primary energy consumption.
Life in (green) plastic, it’s fantastic – Plastics manufacturing can be considered a “sustainable” economic activity in Europe provided that they are “fully manufactured by mechanical recycling of plastic waste” or by chemical recycling processes if minimum emissions standards are met, according to a leaked EU proposal seen by Euractiv. The new standards for sustainable plastic manufacturing are expected to be tabled in the coming days under the EU’s sustainable finance taxonomy, which determines what type of investments make a substantial contribution to the EU’s fight against climate change. The EU also plans to establish criteria for chemical recycling, but green groups have warned that this would not necessarily reduce emissions, compared with less energy-intensive processes like mechanical recycling. Therefore, this could lead to greenwashing, which the taxonomy was designed to avoid.
D3 kings of orient are – The first ever physically-delivered US biofuel (RIN) futures contract traded on Tuesday, bourse Nodal Exchange announced. Some 100,000 cellulosic (D3) V21 RIN futures for Oct-21 delivery traded for $1.57 on the bourse, the same day that the company launched its contract for the Renewable Fuel Standard (RFS) credits. Renewable natural gas (RNG) project developer AMP Americas was listed as one of the counterparties, while the second entity remained anonymous. Amerex Brokers executed the transaction.
Got more CERs? – Slovenia-based carbon trading firm Belektron is seeking another 500,000 CERs from a variety of project types, posting a second expression of interest on the UN’s CDM website in as many days. “We are looking for ICE-eligible CERs for an indicative buying price of €0.25/tonne. Price subject to further confirmation,” the firm said. Belektron posted an ad on Tuesday seeking 375,000 of the Kyoto Protocol units.
And finally… I’ll be Grahamed – In his new memoir “A Promised Land”, former US President Barack Obama underscores how environmental issues, including cap-and-trade legislation, proved to be some of the most difficult problems during his first term in office. The White House turned to Senator Lindsey Graham (R) in Oct. 2009 to try to pass a carbon market bill. Graham said he could deliver the necessary Republican votes if Senator Joe Lieberman (I) steered the process and Senator John Kerry (D) convinced environmentalists to make concessions on nuclear subsidies and additional offshore drilling. Obama “wasn’t wild” about relying on Graham, he wrote, and by the spring of 2010, “it became increasingly obvious that Graham couldn’t deliver on his end of the bargain.” (Politico)
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