CP Daily: Monday January 11, 2021

Published 01:46 on January 12, 2021  /  Last updated at 01:46 on January 12, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

China expects carbon market trading platform to go live mid-year

Trading in China’s national emissions trading scheme is expected to begin around mid-year, the person in charge of developing the ETS exchange has told local media.

EMEA

France grounds aviation tax hike in favour of offsetting domestic flights -leaked draft

France will not advance an aviation tax increase suggested by a citizen-led panel, according to a leaked draft of its climate law that instead proposes compulsory offsetting of emissions from domestic flights.

EU Market: EUAs slip towards €34 after again hitting record levels

EUAs fell back towards €34 on Monday despite matching Friday’s record high €35.20 in the opening minutes, as observers expect more gains this week amid continued cold weather.

AMERICAS

US Supreme Court takes up refiner-led lawsuit over biofuel compliance waivers

The US Supreme Court announced Friday that it would review a lower court’s ruling that severely curtailed the EPA’s ability to issue compliance waivers under the Renewable Fuel Standard (RFS), with a future decision potentially adding downside pressure to biofuel credit (RIN) prices that have soared to three-year highs.

US energy companies sue commodity trader over unfilled RFS credits

Two obligated parties under the US Renewable Fuel Standard (RFS) have filed separate lawsuits against a Texas-based commodity shop for failing to deliver biofuel credits (RINs) in fulfilment of contractual obligations.

RGGI expected to announce programme review schedule soon, sources say

The Northeast US RGGI cap-and-trade scheme is expected to make a formal announcement soon about its upcoming programme review, kicking off the process to make further revisions to the power sector carbon market, regulatory sources told Carbon Pulse.

RGGI increases carbon allowance allocations in first post-2020 distribution report

The Northeast RGGI cap-and-trade scheme set aside slightly more allowances for free allocations in 2021, with an estimated 91 million carbon permits earmarked for quarterly auctions this year, according to programme data.

INTERNATIONAL

IEA promises net zero global energy roadmap, warns of post-pandemic GHG rebound

The IEA plans to publish a roadmap for how the global energy sector can reach net zero emissions by 2050, it announced Monday, while flagging that GHGs were set to rebound from pandemic-induced drops seen this year.

Nature summit musters more than $14 bln for land restoration

Governments and development banks have pledged more than $14 billion over the next four years to restore 100 million hectares of land in northern Africa, an effort that would store an estimated 250 million tonnes of CO2.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Committed warning for committed warming – The amount of GHGs already released into the atmosphere by humans will likely warm our planet beyond the 1.5-2C limits of the Paris Agreement, according to a paper published in Nature Climate Change last week. It recalculates previous climate models to assess “committed warming”, or future warming from GHGs already emitted. Previous estimates suggested 1.4C of committed warming above pre-industrial levels, but the findings suggest this the number could be as much as 2.5C. (Reference to the paper repeated following a misleading citation via a Guardian article in Jan. 7’s newsletter).

Hague battle – A legal case in the Netherlands against oil major Shell is putting the spotlight on energy groups’ climate role. Five years since the Dutch government lost a court action forcing it to cut its country’s emissions more deeply, the lawyer behind that case – Roger Cox – has a new target in a legal fight that some believe could force oil companies to accelerate a shift away from fossil fuels and push other corporate polluters to reassess their carbon footprint. The activists represented by Cox want Shell to cut its total CO2 emissions by 45% by 2030, compared with 2019 levels, and to eliminate them entirely by 2050. (FT)

Do better – HSBC is under fire for financing the fossil fuel industry after a group of investors including Amundi and Man Group filed a climate resolution ahead of the bank’s annual meeting in April. The lender announced in October that it would become a net zero emissions bank by 2050, but some of Europe’s biggest investors involved in the resolution said it was failing to take climate change seriously, having made no specific commitments to reduce funding for fossil fuels. The resolution, which was filed by 15 institutional investors with $2.4 trillion in assets, plus 117 individual shareholders, called on HSBC to publish a strategy and targets to reduce its exposure to fossil fuel assets. ShareAction, a responsible investment charity that brought the shareholders together, said the bank was Europe’s second-largest financier of fossil fuels after Barclays. (FT)

Serbia succession – Serbia has taken over the rotating presidency of the Energy Community (EnC), an intergovernmental body supporting Western Balkan nations as well as Ukraine, Moldova, and Georgia to transpose EU energy and climate legislation. The Serbian presidency said on Monday that among its priorities this year will be “to advance the development of a carbon pricing mechanism” for the EnC. Belgrade also wants EnC members to finalise their National Energy and Climate Plans (NECPs) and to adopt 2030 targets for emissions reductions, energy efficiency, and renewables.

Stop, in the name of COVID – A British financial broker on Friday asked to halt an upcoming trial in London over its alleged role in a sprawling tax fraud case linked to the EU carbon market, amid concerns about the new COVID-19 variant and anxiety that remote proceedings will intrude upon its privacy. According to Law360, David Scorey QC, counsel for Tradition Financial Services (TFS), asked a High Court judge to shelve the five-week hearing scheduled for late January over concerns about having its staff travel into London on public transportation and taxis. Tradition, an intermediary between large financial institutions and traders, is fighting accusations that it helped facilitate carousel fraud in the EU ETS nearly a decade ago. Both Deutsche Bank and Citigroup have settled related lawsuits brought by several trading companies that went bust when they were hit with massive tax bills. A remote hearing isn’t a backup option because Tradition’s employees would need to arrange a quiet space in their homes, something that isn’t always possible if their families are confined by the pandemic, Scorey said. The lawsuit, brought by liquidators for Bilta (UK) Ltd. and other defunct traders, claims Bilta sold 7.2 mln allowances between May and July 2009, leading to 60 chains of transactions in which TFS was involved. Tradition has said its role was limited and has denied any wrongdoing.

Hydro-trade – The European Energy Exchange (EEX) is exploring the development of hydrogen contracts to tap into the nascent economy for the zero-carbon fuel, a note from the bourse’s governing council said on Friday. “While the market itself does not yet exist, regulatory conditions and market design for hydrogen are now being established,” it said. The discussions focused on a potential hydrogen market design “with the long-term goal to develop trading products, be it as a physical commodity or guarantee of origin,” it added. EEX, a Deutsche Boerse subsidiary which is active in energy, carbon, and freight markets worldwide, last month launched a working group that engages 120 energy operators. (Economic Times)

CORSIA call – UN body ICAO on Monday announced its next call for emissions unit programmes to apply for eligibility to supply carbon credits under the global aviation offsetting scheme CORSIA. The intake, which will run through Feb. 10, comes two months after ICAO’s Council approved two jurisdictional-scale REDD standards to supply CORSIA units, making them the first international deforestation reduction programmes recognised in a global compliance carbon market.

And finally… Ready and willing – A majority of European citizens intend to fly less and already eat less meat to help fight climate change, according to a survey published by the European Investment Bank (EIB). Of 27,700 survey respondents in the EU’s 27 member states over Oct-Nov. 2020, 74% said they intended to fly less frequently for environmental reasons once COVID-19 restrictions are lifted. Some 66% said they already eat less meat because of climate change, and a further 13% said they planned to do so soon. (Reuters)

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