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US President-elect Joe Biden is expected to nominate North Carolina environmental regulator Michael Regan to led the EPA, Reuters reported Thursday.
The European Commission on Thursday released the annual emissions limits per country in sectors not covered by the bloc’s carbon market, although caps governing output from non-ETS sectors are set to tighten significantly as a result of the bloc’s more ambitious climate reduction target agreed last week.
EU climate ministers on Thursday adopted a unified negotiating position for the European Climate Law including a higher 2030 emissions target, while formally endorsing an updated nationally determined contribution (NDC) to the Paris Agreement.
EUAs held around €32 on Thursday, ending a four-day streak of setting new records with traders questioning whether carbon’s massive six-week rally could withstand a larger bout of profit-taking.
ICE Futures Europe has been appointed to host carbon allowance auctions under the UK’s new emissions trading scheme, the London-based exchange announced Thursday.
International offsets can make a legitimate contribution to voluntary climate action, according to green group EDF, which set out key principles on Thursday that contrast with other campaigner calls to end the practise in an increasingly uncertain sector.
An annual decarbonisation rate of 11.7% is now needed to keep global warming below 1.5C, representing more than five times the 2.4% reduction level reached before the pandemic, according to a report published on Friday.
RGGI allowances surged this week on aggressive buying from a compliance entity as California Carbon Allowance (CCA) prices inched up with participants looking to shift positions further out on the curve.
The Emissions Reduction Fund’s next offset auction will be held on Apr. 12-13 next year, Australia’s Clean Energy Regulator said Thursday.
So it’s official – the UK will launch its own emissions trading system in 2021. Of course, it won’t actually begin on January 1, as the Department for Business, Energy and Industrial Strategy – the regulator – has yet to work out what the free allocations should be, how many UK Allowances (are we OK with UKA as an abbreviation?) will be auctioned, etc etc. But we know a few things…
BITE-SIZED UPDATES FROM AROUND THE WORLD
Insuring fossils – Lloyd’s of London, the world’s biggest insurance market made up of 90 syndicates, has set a market-wide policy to stop new insurance cover for coal, oil sands, and Arctic energy projects by Jan. 2022 and to pull out of the business altogether by 2030. Currently less than 5% of the market’s £35 bln annual premiums comes from this area, European insurers like AXA and Zurich have already pulled back from underwriting fossil fuels, though US and Asian insurers have mainly retained their exposure. (The Guardian)
Scope shortfall – While some 43% of the world’s most carbon-intensive companies have some form of net zero pledge in place, just 10% include Scope 3 supply chain emissions, according to a survey from the investor-backed Climate Action 100+ group. Just 26% of utilities have coal phaseout plans in line with the Paris Agreement’s goals, and nearly 200 new oil and gas projects that were green lit this year will undermine Paris efforts, it found. The Climate Action 100+ initiative is backed by 545 investor signatories responsible for more than $52 trillion in assets under management. (BusinessGreen)
This could work – The UK’s efforts to introduce new climate policies and neutralise emissions by 2050 will likely have a “relatively small” impact on the economy, according to the government. A move to a net zero economy will create new jobs and opportunities for green industry to flourish, the British Treasury said in a report published Thursday. Policy that’s designed well will support innovation and encourage the deployment of new technologies such as carbon capture and storage and hydrogen, it added. The review commissioned last year by the Treasury came to a similar conclusion that the government’s independent adviser, the Committee on Climate Change, which last week said the net zero goals may pay for themselves in the opportunities they create. (Bloomberg)
Oiler teamwork – Seven European oil majors and the US’ Occidental Petroleum have agreed on six principles to support the energy transition and collaborate. The principles are to support Paris goals, cut emissions including Scope 3, support country NDCs, back the development of technological and natural emissions sinks, disclose climate risks consistent with the aims of the TCFD, and be transparent on trade association memberships. (S&P Global Platts)
You can’t make everyone happy – The German Bundestag passed an amendment to the Renewable Energy Sources Act (EEG) on Thursday to help the country meet the goal of producing 65% of its electricity from carbon-free sources by 2030. It also specifies that the growth path for the various renewable capacities, e.g. onshore wind, biomass and solar PV, will be amended again early next year to incorporate the higher target and account for the increased need for renewable power in the heating and transport sectors. As well, the government said the “bold step” of exempting green hydrogen production from having to pay the renewables levy would help ramp up that sector. The amendment was passed without support from the opposition, as the leftist Die Linke and Greens have called for higher green electricity production targets while the liberal FDP wants to allow “negative emission technologies”. The Social Democrats – in the government coalition with centre-right CDU/CSU – wanted to stipulate in the law that the expansion of renewables served public safety, which alarmed opposition parties and environmental protection organisations alike, as they feared that a legally stipulated public interest could also have an impact on judicial decisions. Yet the passage was removed from the EEG amendment, although is now the renewable energy sector that is complaining arguing that the reform lacks vision and courage. (Euractiv, Clean Energy Wire)
Das ist history – German energy consumption was at a “historic low” in 2020, largely due to the effects of the pandemic, said energy market research group AG Energiebilanzen (AGEB) based on preliminary data. The researchers also said energy-related CO₂ emissions in Germany dropped 80 Mt in 2020, which means that the country is set to easily surpass its original 2020 target to reduce total GHGs by 40% over 1990 levels. (Clean Energy Wire)
Reasonable views – The European Commission on Thursday adopted a reasoned opinion in a case against Poland brought by Czechia in September, which claimed that Warsaw infringed EU law by certain actions undertaken as part of the procedure for prolonging the mining concession of the Turow lignite coal mine until 2026. In its opinion, the Commission considers that Poland has committed some of the infringements that Czechia had raised in their complaint, such as an incorrect transposition and application of the bloc’s Environmental Impact Assessment Directive, but found that other claims were “unfounded”.
It’s not a tax! – While the EU’s future carbon border adjustment mechanism (CBAM) is not a tax, it must mirror the EU’s own carbon market price and structure in order to be compatible with WTO rules, said French MEP Pascal Canfin of the centrist Renew Europe group, who chairs the European Parliament’s environment committee (ENVI). The European Commission has said it will apply a CBAM on countries that do not make sufficient commitments on climate change. Euractiv interviewed Canfin regarding this controversial measure.
Ban buddies – Canada wants deeper environmental ties with the US and one result could be a North American ban on the sale of new gasoline-powered passenger cars and trucks, Environment Minister Jonathan Wilkinson said Thursday. He said Ottawa and the incoming administration of President-elect Joe Biden both agreed zero emissions vehicles needed to be deployed faster. Canada will discuss with the US how to achieve this and also improve the overall performance of the transport sector, which accounts for 26% of Canadian emissions. Talks with Washington could cover “what the European countries and Quebec and British Columbia have done, which is to put a date at which they will no longer allow the sale of internal combustion engines,” Wilkinson added.
Price parity – A BloombergNEF annual Battery Price Survey found average electric vehicle battery pack prices will be $101/kWh by 2023, with automakers potentially able to produce and sell mass market EVs at the same price as conventional gasoline powered vehicles at that level. The analysis found current battery packs are valued at $126/kWh. EV sales are expected to grow in the coming years.
Final approval – Quebec enacted cap-and-trade amendments on Wednesday that would align the Canadian province’s post-2020 regulation with WCI partner California. The province released a draft regulation earlier this year that would harmonise the post-2020 allowance reserve price tiers to California and make smaller technical tweaks to the scheme. Those changes went into effect on Dec. 16, with many tweaks not being applicable until Jan. 1, 2021.
Bad time for coal I – Nearly a dozen South Korean asset management firms, accounting for some 70% of the domestic bond asset market with a total $177 bln in bonds, have declined to fund the 2,100MW Samcheok Bluepower coal power plant, according to the Korea Beyond Coal Campaign. The firms looking the other way include Shinhan BNP Paribas Asset Management, NH-Amundi, and Hyundai Investments, the campaigners said Thursday. Samchoek is described as South Korea’s “last coal power project”, but it is struggling to find the last $730 mln it needs to finalise construction after President Moon Jae-in’s recent 2050 net zero target announcement. The plant would emit 390 MtCO2 over its 30-year lifetime if built, green group Solutions for our Climate said.
Bad time for coal II – Japan’s Sumitomo and Kansai are among participants in a conglomerate where several have written off the total A$1.2 bln ($916 mln) they paid in 2011 for the Bluewaters coal plant in Western Australia, reports the Guardian. Sumitomo wrote off its A$330 mln share due to “difficulty in refinance of senior secured loans, whose due had come in August 2020”.
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