CP Daily: Monday December 7, 2020

Published 23:20 on December 7, 2020  /  Last updated at 23:28 on December 7, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

South Korea to overhaul carbon pricing system

South Korea plans to strengthen its carbon pricing system as part of its 2050 net zero emissions strategy, though Finance Minister Hong Nam-ki on Monday would not commit to putting in place a carbon tax.

ASIA PACIFIC

Japan opts for automaker emissions trading market

Japan is planning an emissions trading market for its car industry similar to schemes operating in California to help reach its 2050 net zero target.

Santos, Mitsubishi to explore carbon neutral LNG options

Australia’s Santos and Japan’s Mitsubishi are considering options for delivery of carbon neutral LNG from Santos’ Barossa project, after the two on Monday announced a 10-year deal worth 1.5 million tonnes of gas annually.

Singapore hedge fund TradeFlow to offset emissions from commodity trading business

TradeFlow Capital Management will offset the emissions from the movement of goods under its commodity trading business, the Singapore-based hedge fund announced Monday.

EMEA

Free EU carbon allowances an option for shipping -lead MEP

The EU could freely allocate EUAs for shipping if the sector is brought into the bloc’s cap-and-trade system, which could prevent carbon leakage and ensure predictability, a senior MEP from the assembly’s transport committee (TRAN) said on Monday.

EU Market: EUAs slip back below €30 as Brexit talks drag on

EUAs slipped back below €30 on Monday as a weekend Brexit trade deal failed to materialise, though observers are still bullish on carbon due to the upcoming auction drought.

AMERICAS

Dominion Energy estimates RGGI allowance prices surge in late post-2020 period

Dominion Energy anticipates its Virginia-based emissions will declined by more than 10% over the post-2020 period as it joins the RGGI cap-and-trade scheme, and that allowance prices will near $10 by 2030, according to a public filing.

Two utilities hold deficit in Massachusetts emissions programme, data shows

Two Massachusetts generators are holding short positions in the state’s Global Warming Solutions Act (GWSA) programme, with recent prices averaging $7.00 in the thinly-traded market, according to a market oversight report.

COMMENT

Scaling the voluntary carbon markets without sacrificing quality

The TSVCM rightly calls for science-based target setting in tandem with robust carbon offsetting, clear claims guidance for credible communications and broad public support, and long-term corporate commitments and futures contracts to de-risk project development. Yet having sat in Taskforce discussions and observed several emerging instruments that seek to operationalise the forthcoming ‘blueprint,’ Gold Standard’s Owen Hewlett spots several concerns about the quality of what is meant to scale.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Wrong path – None of the world’s 58 biggest emitting countries are on a decarbonisation pathway compatible with the Paris Agreement, according to the Climate Change Performance Index (CCPI) – an annual assessment of progress on emissions reduction, renewable energy deployment, climate policy, and energy use put together by several influential NGOs. It shows no country performing well enough pre-COVID to reach the ‘very high’ grade in the rankings, but Sweden once again topped the global list, followed by the UK. (BusinessGreen)

Coal own goal – China may have shot itself in the foot with its restrictions on coal imports, with domestic prices surging just as the peak winter demand period gets under way, Reuters reports. A second blow is the sharp increase in the price of imported coal from the seaborne market. This also appears largely related to China’s effective ban on imports from Australia, the world’s largest exporter of coking coal used to make steel, and the second-largest of thermal coal used to generate power. The curbs on Australian imports appears to have had the effect of boosting the price of seaborne alternatives, such as those from Indonesia and South Africa. Perhaps ironically, the increase in these prices has dragged Australian thermal coal higher as well. China may be facing the least desirable outcome in its coal sector: domestic prices well above the government’s preferred range, and import prices also moving higher, making what little the country is buying from overseas more expensive than usual. The situation in the coal sector may also be worsened by the potential disruption to the domestic market from the deaths of 23 miners at a mine in the southwestern city of Chongqing on Dec. 4.

Brussels on board – Belgium will support the European Commission’s proposed emissions reduction target of at least 55% below 1990 levels by 2030, Zakia Khattabi, Belgium’s federal climate and environment minister, confirmed on Monday. Belgium was one of the few member states that had not yet stated a clear position on the higher climate objective – an upgrade to the current 40%. The indecision was the result of disagreements between the country’s several governments. EU leaders will try to forge an agreement at a European Council summit on Thursday and Friday, although some nations are still reluctant. Read Carbon Pulse’s latest on the European Council’s draft conclusions.

Big on biomass – The European Commission approved under EU state aid rules Poland’s plans to support the construction of a high-efficiency combined heat and power unit in Chorzow, which will use biomass as fuel. The support will take the form of a direct grant worth €23 mln and will be financed by EU Structural Funds managed by Poland. This is expected to decrease the coal-dependent country’s emissions by around 214,600 tCO2 per year.

Pick three – California Attorney General Xavier Becerra is expected to be named Secretary of Health and Human Services in President-elect Joe Biden’s administration, providing Governor Gavin Newsom (D) another potential seat to fill in the state. Becerra’s appointment would allow Newsom to name a new attorney general, with California Secretary of State Alex Padilla expected to fill Vice President-elect Kamala Harris’ US Senate seat before a replacement is chosen. Regulatory sources said these announcements could slow down the replacing of California ARB Chair Mary Nichols, who is set to leave the agency this year. Nichols is considered a frontrunner for Biden’s EPA administrator, but his chosen candidate for that role has not yet been announced. Newsom has not made any comments about who could fill Nichols’ role on the ARB, which would need to be confirmed by the state senate. (New York Times)

Soot you – The US EPA announced Monday that it will maintain existing air quality standards governing soot pollution over the next five years, rejecting recommendations from agency scientists. The agency declined to revise down those levels as it reviewed the National Ambient Air Quality Standards regulation, which sets limits on soot from coal-fired power plants and vehicle tailpipes. In Monday’s announcement, EPA Administrator Andrew Wheeler said the agency would hold the current standard at 12 millionths of a gram per cubic meter of air. Wheeler made the announcement with Governor Jim Justice of coal-producing West Virginia. (Reuters)

Virtual Insanity – Pennsylvania will hold its first virtual public hearing on Tuesday to consider its cap-and-trade regulation, with the Keystone State hoping to join RGGI in 2022. The state announced a draft proposal earlier this year that set a 78 Mt cap in 2022 and a 3% annual decline, aligning with the post-2020 RGGI Model Rule. Unlike the other RGGI members, Pennsylvania is seeking to join the scheme through executive action after Governor Tom Wolf directed the Department of Environmental Protection to draft regulations to cut power sector emissions. Republicans and the state’s coal regions oppose the programme as they believe it will force power plants to close and cut jobs.

Strong start, poor finish – Los Angeles experienced a 21-day stretch of smog free days in mid-March as the COVID-19 crisis dramatically cut driving in the second largest US city, but late spring and summer heat waves produced the highest number of bad air quality days since 1997, according to a LA Times report. Catastrophic fires across the state contributed to that trend, and cold weather during the fall months may create additional poor air quality days.

PEI in the sky – Prince Edward Island’s current agreement with Ottawa over carbon pricing expires Mar. 31, 2021, and while negotiations on a new pact have been underway for some time, there’s no agreement yet on a replacement deal, according to Premier Dennis King. “What I would like to see from these negotiations would be a plan that all Islanders can get behind, and an indication of our support of the federal initiatives, and the federal support of our own provincial initiatives … I think we all agree that a price on carbon is the way to go to help discourage how we do things and encourage others to change how we do things, whether it’s transportation, etc,” Progressive Conservative leader King told the Canadian province’s legislature on Friday. Two years ago, PEI’s previous Liberal government struck a last-minute deal with the federal government after Ottawa rejected the province’s initial proposal, which included no price on carbon for consumers. The deal saw PEI implementing its own carbon levy at the rate set by Ottawa, but then offsetting prices at the pumps by reducing pre-existing fuel taxes. The province’s cross-party Special Committee on Climate Change earlier this year recommended implementing a more effective carbon pricing system than the current approach. (CBC)

I’m no longer dreaming of a white Christmas – The UK’s Met Office projects that in a scenario based on global emissions accelerating, “by the 2040s most of southern England could no longer see sub-zero days”, which would mean the end of sledging, snowmen, and snowball fights, the forecasters said. If the world reduces emissions significantly, the changes will be less dramatic, the Met Office says. The average coldest day in the UK over the past three decades was -4.3C. If emissions continue to accelerate, leading to a global temperature rise of 4C, then the average coldest day in the UK would remain above 0C across most of the country throughout winter. Even if global emissions are reduced dramatically and world temperatures rise by 2C, the average coldest day in the UK is likely be 0C. The overarching picture is warmer, wetter winters; hotter, drier summers. But within that, there will be a shift towards more extreme events, so more frequent and intense extremes, so heavier rainfall when it occurs. (BBC, Carbon Brief)

And finally… Two pints of lager and a packet of crisps – UK potato crisps firm Walkers aims to will use CO2 captured from beer fermentation in a brewery, which is then mixed with potato waste and turned into fertiliser spread on fields to feed the following year’s potato crop. The company says this will slash CO2 emissions from its manufacturing process by 70%. (BBC)

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