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TOP STORY
WCI Q4 current vintage auction sells out at steep discount to secondary market
Last week’s WCI current vintage auction sold out for the first time since February, but the settlement was beneath traders’ expectations as compliance entities purchased fewer allowances than the prior sale, according to results released Tuesday afternoon.
EMEA
ANALYSIS: Analysts reinforce bullish EU carbon price outlooks on auction delay
Analysts have reinforced their bullish outlooks for EU carbon prices in the coming months following news last week that the start of next year’s allowance auctions would be delayed.
EU Market: EUAs break through technical resistance as markets react to Biden transition
EU carbon allowances rose for the third straight session on Tuesday as bullish sentiment about a smooth transition of presidential power in the US lifted wider markets, with an upcoming supply drought also helping EUAs bust through a technical ceiling to notch their highest close in two months.
Utility Enel to cut CO2 by nearly a third over next 3 years, plans earlier coal phaseout
Italy-based utility Enel unveiled plans on Tuesday to cut its emissions by 30% over the next three years and to bring forward its coal phaseout date by three years to 2027.
EU confirms strong warming effects of aviation beyond CO2, urges caution
The non-CO2 climate impacts from aviation are at least as important as those of CO2 alone, according to fresh analysis published by the European Commission on Tuesday, which has angered campaigners by recommending waiting years to take any action.
Denmark excludes increased carbon levy in ‘green’ taxation reform
The Danish government has backed down on moves to increase its carbon tax, with the measure excluded from reform proposals presented late Monday following months of debate among ministers.
UPDATE – As some eye Chancellor’s review for UK carbon pricing plan clues, legal experts foretell an ETS
While stakeholders will be closely watching this week’s UK spending review for any sign of a decision on the government’s post-Brexit carbon pricing plans, some legal experts appear convinced that an ETS will be the chosen outcome and that the first allowance auction could be held in Q2 2021.
AMERICAS
Rising CO2 price could accomplish half of Canada’s 2050 net zero goal -report
Canada could reach its 2030 and 2050 emissions reduction goals by increasing its carbon price over the next two decades, with the country achieving more abatement if it phases out its output-based pricing system, a report said Tuesday.
TCI could finish carbon market framework by mid-December, as new polling shows opposition
The TCI consortium is expected to release a final Memorandum of Understanding (MOU) by mid-December that would allow participating US jurisdictions to advance the proposed transport cap-and-trade programme next year, while new polling shows public opposition to the scheme.
RFS Market: RIN prices slide in holiday-shortened week
US biofuel credit (RIN) values fell towards a three-week low on Tuesday, while biofuel and agriculture groups called on a federal court to force the EPA to address an improper waiver given out under the Renewable Fuel Standard (RFS) several years ago.
ASIA PACIFIC
Australia Market Roundup: Victoria announces carbon sequestration cash, ERF delivery holds steady
The Victoria state government on Tuesday announced A$92 million ($68 mln) over 16 years for a land-based carbon sequestration programme, while new Clean Energy Regulator data shows developers continue to sell well over a million offsets per month to the federal government.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Decision time – EU governments will on Wednesday discuss a plan for leaders to endorse at their Dec. 10-11 Council meeting that backs a goal of reducing GHGs by at least 55% by 2030 from 1990 levels. Draft guidelines for a political statement at the summit include assurances on financing the transition away from fossil fuels and the acknowledgment of differing national conditions in member states, according to an EU document seen by Bloomberg. That move is aimed at convincing Poland and some other countries to drop their reservations about a tougher target. An agreement on the bloc’s Green Deal law requires unanimity from all EU leaders, a challenging task given concerns by Poland and others about the costs of the clean shift. Nations including Ireland and Belgium have joined the government in Warsaw in a call for more detailed analysis on how much individual member states would need to spend to meet tougher climate goals. The final decision on whether to seek a deal at the December summit will be in the hands of Council President Charles Michel, who will chair tomorrow’s meeting. The discussion among ambassadors representing member states will provide more feedback to Michel before he proposes in a week a draft political statement for the leaders to sign off in December. Depending on reactions by member states, the draft may be different from the guidelines sent to governments on Tuesday, Bloomberg adds.
Touchy taxonomy – The EU’s draft green finance taxonomy to guide investors on what is sustainable are lax for the polluting shipping sector and challenging for buildings, NGOs say. Shipping was not part of expert group recommendations, but NGOs say the proposed criteria lacks long-term signals that will spur investment towards sustainable shipping, while bioenergy settings are too wide. On the other hand, buildings criteria are tougher than expert group recommendations and may rule out most buildings older than 2001. The draft is out for consultation for four weeks and would apply from 2022. (Reuters)
Dirty hybrids – ‘Green’ hybrid cars are emitting up to eight times more pollution than advertised, a study published Monday by green group T&E found. Three of the most popular plug-in hybrid electric vehicles (PHEVs) in 2020 emitted 28-89% more CO2 than advertised when tested by Emissions Analytics on a fully charged battery in optimal conditions. On an empty battery, they emitted three-to-eight times more than official values. Selling plug-in hybrids makes it easier for carmakers to meet their EU car CO2 standards as PHEVs are currently given additional credits. T&E said the EU should end this weakening of the regulation when it reviews the targets for 2025 and 2030 next year.
Double difference – The UK will double to 12 GW the capacity of renewable energy projects eligible for support in its fourth round of 15-year CfD auctions in late 2021, with floating offshore wind projects able to bid for the first time ever and and solar and onshore wind projects for the first time since 2015. Coal-to-biomass conversions will be excluded. (Reuters)
Batteries charged – A conference on battery cell production in Europe launched by the German EU Council presidency aims to get European battery production off the ground. The conference focussed on two so-called Important Projects of Common European Interest (IPCEI), bringing together 60 companies across Europe to spur innovation in battery production. Germany is investing €3 bln into the two projects with the aim of producing “the most innovative and environmentally friendly battery cells in Europe” and create thousands of jobs throughout the continent, Altmaier said, adding the battery project could be used as a blueprint for other IPCEIs, for example in hydrogen production. (Clean Energy Wire)
Green team – Trade bodies including WindEurope and SolarPowerEurope have received backing from Bill Gates-backed Breakthrough Energy to form a new coalition aimed at growing renewable hydrogen production and use across the continent. Called the Renewable Hydrogen Coalition, the initiative has been launched in recognition of the fact that more than 90% of hydrogen produced globally in 2019 used fossil fuels. The Coalition will build a network of academics, researchers, entrepreneurs, trade bodies, and large businesses. It also has backing from the EU commissioner for energy Kadri Simson. The framework includes a goal to produce 10 Mt of renewable hydrogen by 2030. (edie)
Departing partner – Former Secretary of State John Kerry (D) will resign from his position as chairman of a climate advisory board in order to avoid the appearance of a conflict of interest with his role in President-elect Joe Biden’s (D) administration, Fox Business has learned. After being nominated as Special Presidential Envoy for Climate on Monday, a spokesperson for Biden’s transition team said Kerry plans to step aside as chairman of the advisory board at Climate Finance Partners. The group is the sub-advisor to the US-listed KFA Global Carbon Exchange-Traded Fund (ETF), which allows retail investors for the first time to indirectly hold cross-continental stakes in cap-and-trade schemes.
Firm fossils – Even with many more policies to curb emissions than are currently in place, oil and gas would still make up nearly two-thirds of energy sources three decades from now, according to a report from the Canadian Energy Regulator (CER) published Tuesday. The 104-page report looks at two potential scenarios for energy use in Canada: one using only the climate policies already in place, and an “evolving scenario” that expands the impacts of those policies. Under the status quo scenario, demand for oil and gas remains relatively stable over the next three years, while in the “evolving scenario” oil and gas demand peaks in 2019 but still accounts for 64% of all energy used in Canada by mid-century. (Canadian Press)
And finally… Business as usual – Most organisations’ climate mitigation efforts have stayed the same – or even accelerated – under COVID-19, according to research commissioned by climate consultancy and offset project investor firm South Pole. The poll of 120 sustainability leaders from sectors including industry & manufacturing, consumer goods and services, finance, property, and construction found that despite the profound challenges of COVID, most organisations’ climate mitigation efforts (65%) have either remained the same through COVID-19 (38%), or even accelerated (27%). The drive for decarbonisation accelerated in the financial services (19%) and technology and telecommunications (16%) sectors, which had the largest proportion of respondents stating that their efforts have increased. Around a third of respondents (36%) said their climate mitigation efforts have slowed down (20%) or had temporarily paused until there is more economic certainty (16%). A staggering 83% of executives polled work for organisations that have either set a net zero target (50%) or are considering setting one (33%). However, the survey also showed that only 11% of organisations have set a science-based target (SBT), which South Pole said could be a sign that companies are not ready to commit fully to a decarbonation strategy. What’s more, less than half (48%) of those who had set such goals had also set milestones to get there.
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