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Industry groups and NGOs alike agree that expanding the scope of the EU ETS to include vehicles and the bloc’s building stock will be a “risky” move, according to responses to the European Commission’s consultation to review the legislation underpinning the system.
EUAs reached a fresh two-month high on Friday before easing back for a robust 5.2% weekly gain as fears about an extended auction-free period continued to drive bullish sentiment.
The Netherlands has set the rate at which its carbon tax on EU ETS-covered heavy industries will apply next year, a government agency said Friday, using a measure slightly below current benchmark prices.
The distribution of free EU carbon allowances for 2021 will be delayed until at least Q2 next year due to the protracted process to set ETS emissions benchmarks and calculate allocation quotas, the European Commission confirmed on Friday.
The EU and Switzerland has published the ETS allowance transfer window schedule for 2021, providing 29 one-day opportunities for units to flow between the linked carbon markets.
Colombia has submitted an upgraded NDC of a 51% emissions reduction target by 2030, President Ivan Duque said Thursday, potentially representing a significant raising of ambition.
South Korea will increase its 2030 climate target before the administration’s term ends in May 2022, President Moon Jae-in said Friday.
Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.
The last week has seen a couple of significant changes to the predicted supply schedule for the start of EU ETS Phase 4, and while they may not be big game-changers in the long term (overall supply in 2021 won’t be affected), they do have the potential to change the market dynamic in the first quarter at the very least.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Ahead of schedule – India will achieve its target of reducing the emissions intensity of its GDP by 35% well before the year 2030, Environment Minister Prakash Javadekar said Thursday. “India has achieved its voluntary target of reducing emissions intensity of its GDP by 21% over 2005 levels by 2020 and is poised to achieve 35% reduction well before the target year of 2030,” Javadekar said. The minister made the remarks while signing a memorandum of understanding (MoU) with Finland to develop cooperation between the two countries in the field of environment protection and biodiversity conservation. (Economic Times)
The great hydrogen face-off – EU member states are fighting over which type of hydrogen to support, with two opposing camps facing off: those backing ‘green’ hydrogen produced exclusively from renewable electricity, and those in favour of a broader “low-carbon” definition, which also includes nuclear power and decarbonised gases, Euractiv reports. The latest draft conclusions of a meeting of energy ministers significantly weakens the priority given to renewable hydrogen, according to critics who denounced pressure from a group of countries pushing in favour of nuclear and natural gas. This group includes Czechia, Finland, France, Hungary, the Netherlands, Poland, and Romania. In the opposite camp are Austria, Denmark, Ireland, Latvia, Luxembourg, Portugal, and Spain, which support hydrogen produced exclusively from renewables.
More CCS, please – A position paper submitted on Friday by the governments of the Netherlands, Norway, Denmark, and Sweden has demanded the EU step up its efforts in deploying CCS and further integrate carbon removals into the bloc’s climate policy. “Technologies like bio-energy CCS (BECCS) and direct air capture of CO2 have an important role in providing negative emissions for residual emissions that may remain in the economy and to achieve negative emissions thereafter,” the non-paper said. Considerable investment is needed in developing safe and sufficient geological storage sites, the document adds, with Scandinavian countries pioneering efforts to establish large-scale CCS networks.
Applications please – The European Commission on Wednesday opened a call for applications for electricity and gas projects to be candidates for the fifth EU ‘Projects of Common Interest’ (PCIs) list. It runs until Jan. 7, 2021. Calls for PCI candidates in the ‘Priority Corridors’ for smart grids, cross-border CO2 network, and oil will follow. Under the current rules, the Commission is obliged to include calls for the different types of projects listed in the regulation (including gas and oil). Eligible projects will be assessed by the Commission to identify if they address a European need that can be best solved through infrastructure. The 5th PCI list will be adopted by the Commission by the end of 2021 under the existing regulation on Trans-European Energy Networks (TEN-E). The Commission is scheduled to table legislative proposals for revising the TEN-E Regulation before the end of 2020, but the new rules will only be in place in time for the 6th PCI list.
Don’t ice the ICE just yet– German Chancellor Angela Merkel warned against excessively strict exhaust regulations for the European car industry, Handelsblatt writes. Europe shouldn’t say it will ban the internal combustion engine but then make it “technically impossible,” Merkel said at a meeting of the Confederation of German Employers’ Associations. The German government wants to advance the transition to electric mobility, “but of course we will still be dependent on combustion engines for the next years,” Merkel said. She was referring to a working group of industry and government representatives that will accompany planned legislative measures in Brussels, such as the new ‘Euro 7’ emissions standard. Although nothing has been decided yet, a study commissioned by the European Commission finds that rules will be much stricter than those of the ‘Euro 6’ standards. The automotive industry fears that if emissions limits are too strict, it will put an end to combustion engine cars by 2025. (Clean Energy Wire)
Dogger deal – British utility SSE and Norwegian oil company Equinor have agreed to invest £6 bln to construct the first two phases of the Dogger Bank offshore wind power project, the two companies said on Thursday, making it the world’s largest offshore wind farm. The construction of 2.4 GW of capacity in the British part of the North Sea will be financed by a group of 29 banks and three credit export agencies. The first phase, of 1.2 GW, is expected to start operations in 2023, with the second following about a year later. A third phase is planned for completion by 2026, by which time Dogger Bank would produce enough electricity to supply 5% of British demand, the companies said. (Reuters)
Spending stop – The economic impact of the coronavirus crisis is pouring cold water on the climate investment plans of Germany’s small and medium-sized enterprises (SMEs), development bank KfW said in a report. “Only 47% of SMEs have carried out their 2020 investments as planned,” KfW found, adding that this would be a much greater drop than after the financial crisis in 2008. “The investment increase that had been weak in the last years anyway has now come to a full stop,” the bank writes, arguing that the crisis has exacerbated a “target conflict between securing financial resilience and making crucial investments into the future.” According to KfW, the COVID-19 crisis is hampering preparations to exploit emerging business opportunities in climate-friendly technology and digitalisation and would cut investments by SMEs alone by about €40 bln this year, which at least could help make large-scale bankruptcies unlikely. Secure investment conditions, for example through a “predictably rising CO2 price signal” could further help to create a favourable environment for SME investment, KfW added. (Clean Energy Wire)
Shopping spree – Greece plans to spend more than half of the €32 bln it will get from the EU coronavirus recovery fund on green and digital transformation projects, its deputy finance minister said on Wednesday. The EU’s long-term budget, coupled with its €750 bln Next Generation EU initiative, will provide a total of €1.8 trillion to help repair the economic damage caused by the pandemic. Greece is to get €19.4 bln in grants and €12.7 bln in cheap loans over the next six years, equal to about 16% of its GDP. Some 58% of the grants or €8.3 bln will be invested in renewable energy projects, including connecting islands with the mainland electricity grid, 5G networks, and infrastructure for electric cars. (Euractiv with Reuters)
Neutral in the sky – German flag carrier Lufthansa is set to operate its first-ever 100% carbon neutral cargo flight on Sunday. The flight will be performed by a Boeing 777F aircraft and will travel to Shanghai and back from the airline’s main Frankfurt hub, fuelled completely by sustainable aviation fuels (SAFs). CO2 is still generated by producing and moving the fuels, so to make its flight truly carbon natural, Lufthansa is planting trees in deforested areas to take this residual carbon out of the atmosphere. The airline said it will use the flight to highlight the need to improve the production and infrastructure needed by SAFs. Lufthansa Cargo will regularly operate carbon neutral flights from summer 2021. (Simple Flying)
Got CERs? – Australia’s Tasman Environmental Markets – the self-proclaimed largest buyer of voluntary offsets in Australasia – is seeking over 1 mln post-2013 vintage CERs, according to an expression of interest posted on the UNFCCC website.
And finally… Premature abscission – Tree leaves may fall earlier in autumn due to climate change, rather than later as previously thought. The finding suggests forests will store significantly less carbon than expected as temperatures rise, and earlier leaf-fall may have knock-on effects on insects and other species. ETH Zurich university in Switzerland looked at autumn leaf-fall data from 1948 to 2015 for six temperate tree species across nearly 4,000 sites in central Europe, modelling what would happen by 2100 if humanity’s carbon emissions stay high. Instead of the established expectation that warmer autumns will bring a longer growing season with leaf-fall occurring about 2-3 weeks later than today, the team found it would probably happen 3-6 days earlier than now. The team’s experiments and the 67-year tree record suggest higher CO2 levels, temperatures, or light levels are driving the leaves to be more productive in spring and summer, hastening their demise in autumn. Though the study looked at European trees, the team thinks the results will hold true for temperate trees in North America and Asia too. (New Scientist)
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