CP Daily: Friday December 4, 2020

Published 22:45 on December 4, 2020  /  Last updated at 22:45 on December 4, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

RGGI Q4 auction clears above secondary market and near all-time high

The RGGI Q4 auction settled at a premium to the secondary market for the second straight quarter, with compliance entities continuing to aggressively buy allowances, according to results published Friday.

EMEA

EU Market: EUAs launch to new 2.5-month high above €30, with peak prices in sight

EUAs hit a new 2.5-month high on Friday, surpassing the €30 mark touched earlier in the week as wider markets lifted on Brexit deal hopes and bullish stimulus sentiment.

Czech expert group recommends 2038 coal phaseout

Czechia’s Coal Commission voted Friday to recommend that the government close all of its coal-fired power plants by 2038, a move criticised by climate activists as “Paris-incompatible”.

AMERICAS

California’s cap-and-trade programme needs supply adjustment to drive CO2 reductions, IEMAC says

The California carbon market likely needs to adjust its allowance supply to drive future emissions reductions, while state regulator ARB should evaluate the need to continue distributing free permits to refineries, according to an annual watchdog report.

California industrial allowance allocations shrink to begin post-2020 period

California’s free carbon permit distributions to industrial emitters declined by nearly 13% for 2021, with refineries accounting for the largest chunk of the year-on-year difference, according to data published by regulator ARB on Friday afternoon.

California emitters chop carbon holdings, speculators build after Q4 auction

Compliance entities unwound their California Carbon Allowance (CCA) positions following the publication of the final 2020 WCI auction results, while financial entities added to their holdings, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

ASIA PACIFIC

Australia picks priority areas for new offset method development

Australia has identified five new offset project methods it will fast-track over the next four months to further boost the supply of domestic carbon credits, Energy and Emissions Reduction Minister Angus Taylor said Friday.

Australia Market Roundup: Regulator terminates ERF contracts, ACCU issuances rebound

Australia’s Clean Energy Regulator has terminated contracts with two projects that had been expected to deliver almost 550,000 offsets to the ERF, while new credits issuances rebounded after a couple of quiet weeks, data showed.

NZ Market: NZUs notch record high price for third consecutive day as momentum returns

New Zealand carbon allowances have risen 2.2% over the past three trading sessions as demand returned to the market ahead of the far-reaching ETS reforms entering into force next month.

Guangdong, Fujian release 2020 ETS allocation plans, raising questions about national market overlap

Guangdong province continues to tighten ETS settings for companies while Fujian has again declined to reveal its total handouts, according to 2020 allocation plans released Friday that include coal power plants, raising questions about whether the facilities will be excluded from the national market.

CN Markets: Pilot market data for week ending Dec. 4, 2020

Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.

INTERNATIONAL

Apple co-founder, CO2 market entrepreneur partner to launch $1 bln energy efficiency blockchain firm

One of Apple’s co-founders has joined forces with an carbon market entrepreneur to launch a $1 billion blockchain company that tokenises energy efficiency measures.

ICYM

UK to submit Paris NDC to cut emissions at least 68% by 2030 without offsets

The UK government will next week submit a Paris Agreement pledge to cut emissions 68% under 1990 levels by 2030, up from the current 61% goal and without the use of international credits, it announced late Thursday.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

** Join Carbon Pulse’s Anna Gumbau at 1430 CET on Dec. 8 as she moderates a panel discussion hosted by Swedish mining company LKAB. Iron and steel ready for the Green Deal will examine how EU heavy industry frontrunners are aligning their climate objectives with the bloc’s massive decarbonisation initiative. Speakers include LKAB’s President and CEO Jan Mostrom, the European Commission’s Diederik Samsom, Eva Svedling from Sweden’s Ministry of Climate, Swedish MEP Jytte Guteland, and Carbon Market Watch’s Sam van den Plas. Register here ** 

Rig write-off – Denmark has agreed to stop North Sea oil and gas extraction by 2050, as well as cancel its eighth licensing round and any future exploration tenders. Climate minister Dan Jorgensen said it wouldn’t be in line with the country’s 2050 climate neutral ambition to still explore, produce, and sell fossil fuels and hoped Denmark could lead by example. Denmark is the EU’s largest oil and gas producer, although non-EU Norway and the UK are both much bigger. (Reuters)

Net zero gains – Although the EU’s net zero objective by 2050 will destroy six mln jobs and push up the costs of doing business in some sectors, it will bring gains elsewhere that will make up for the difference by creating over 11 mln new jobs, according to a new study by McKinsey released Thursday. “The cost increase and the cost savings almost perfectly balance out,” said Hauke Engel, partner at McKinsey. “The cost of living will not increase. In fact, it will slightly decrease for lower-income households,” Engel told a Euractiv event, adding that those were conservative estimates. But the magnitude of change required to reach the 2050 goal is causing apprehension in eastern EU countries, whose industries are heavily dependent on fossil fuels, and say are lacking the funding and the expertise. According to McKinsey, the level of investments in clean technologies that are needed to reach the net zero goal is around €28 trillion over the next 30 years. (Euractiv)

Sceptical shipping – China’s domestic shipping organisations are not happy about EU plans to bring the sector into the bloc’s ETS, according to Lloyd’s List. After a recent conference, the organisations released a statement saying the EU move would “break the multilateral framework” on how shipping is attempting to deal with climate, suggesting that the Chinese government should weigh on Brussels diplomatically to try and change its mind.

Foreign affair – Reducing US GHG emissions enough to help keep global temperatures from rising 1.5C, while also accounting for its historical contribution to climate change, “is not feasible … through domestic emissions reductions alone,” according to an analysis by the US Climate Action Network. The group said the country would need to curb emissions 195% below 2005 levels by 2030 to hit that mark. Instead, it said the US should strive to curb domestic emissions 70% within the decade while helping other nations slash their contributions to global warming. (Politico)

Domestic affair – President-elect Joe Biden (D) is expected to soon unveil a domestic White House policy chief central to his climate change agenda, Politico reports. Among the most likely candidates are former Michigan Governor Jennifer Granholm (D), who would bring experience with unions, manufacturing, and knowledge of the auto industry, and Washington Governor Jay Inslee (D), who made climate change the central issue of his short presidential bid. Ali Zaidi, who was a key Biden campaign climate adviser, is a favourite of environmental activists for the job.

Screen test – Virginia-based Nodal Exchange reported its first environmental screen trades on Friday, with 35,000 Dec-20 V20 California Carbon Allowances (CCA) changing hands for $17.39. The total volume was split across three separate transactions, though the bourse did not disclose any counterparties. Nodal Exchange has launched several US environmental futures contracts, including CCAs, RGGI allowances, and California Low Carbon Fuel Standard (LCFS) credits, over the past several years as it competes for market share with ICE.

And finally… The glass half empty – A shortage of glass for solar panels is limiting China’s solar panel production and is expected to continue to do so through mid-2021, Reuters reports. The Chinese solar industry, which produces nearly 80% of the world’s solar panels, was minimally hurt by the coronavirus pandemic, but increased demand for bifacial modules and larger solar panels are driving the increased glass demand, analysts say. New glass production capacity is expected to come online next year, but in the meantime, prices are expected to stay high. (Climate Nexus)

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