CP Daily: Tuesday January 12, 2021

Published 01:22 on January 13, 2021  /  Last updated at 01:27 on January 13, 2021  /  Newsletter  /  No Comments

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

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North Carolina green groups petition state for RGGI rulemaking

Two environmental groups on Tuesday asked a North Carolina commission to move forward with a rulemaking to enact a RGGI-aligned cap-and-trade regulation, aiming to extend the regional US power sector programme further into the South.


Washington cap-and-trade bill targets phased approach starting in 2023

Washington state legislators put forth a WCI-modelled carbon market bill this week as requested by Governor Jay Inslee (D), with the proposal aiming to enforce compliance obligations on power importers and natural gas suppliers several years after other sectors.

California nuclear power plant outage could yield higher emissions, traders say

California’s lone nuclear power plant could be offline for several months, potentially resulting in the utilisation of more carbon-emitting sources to cover electricity demand in the first half of the year, several market participants said.

US emissions drop 10% in 2020, though rebound expected -report

US GHG output is expected to have plummeted by double digits last year due to lower fuel consumption brought on by the coronavirus pandemic and a continued decline in coal-fired power, but analysts forecast that these cuts will not be sustained without a structural change in the economy.

Impact investor takes majority share in Houston-based environmental commodity firm

An investment firm has acquired a majority stake in a Houston-based environmental trading firm, the two parties announced Tuesday.


SK Market: KAU price caves in after December bull run ends

South Korean carbon allowances have dropped by 38% since mid-December, as bearish sentiment has returned after an end to surging demand from energy companies.

Australia Market Roundup: Developers sell 1.5 mln offsets to ERF, Chevron runs into CCS problems

Developers under contract with Australia’s Emissions Reduction Fund have delivered more than 1.5 million carbon credits to the government since the start of December, while reports say Chevron is facing fresh problems with storing carbon at its Gorgon LNG project.

Singapore energy trading firm hires ex-Shell offset originator

A Singapore-based energy trading firm has hired a former offset originator with Shell to help build a carbon trading business.


EU Market: EUAs hit new record as gas prices spike on sudden cold snap

EUAs jumped to a new all-time high above €35 on Tuesday as gas and other European energy prices spiked on a looming blast of colder weather.



Stationary significance – The US EPA published a final carbon rule on Wednesday that would exempt Clean Air Act regulations on stationary sources that make up less than 3% of the total US GHG output, leaving power plants as the only affected sector. The EPA proposal would effectively prevent any future regulations on oil and gas wells or refineries because their entire sectors emit less than the 3% threshold, which the agency said will be deemed “necessarily insignificant without consideration of any other factors”. Critics said the rule, which would come in the final eight days of President Donald Trump’s administration, could hamstring President-elect Joe Biden’s climate agenda. However, environmentalists raised procedural questions about the move because the 3% threshold was not mentioned in the draft regulations, which were originally related to emissions limits for new coal plants, potentially not meeting public comment requirements under federal rules. The rule is due to be published Friday in the Federal Register, but it is not due to go into effect until 60 days after publication. ClearView Energy Partners expects Biden to impose an administrative freeze on, and to initiate a review of, regulations finalised in the waning hours of Trump’s term. (Politico)

African outlook – Fossil fuels are set to remain the dominant source of electricity across Africa over the next decade, according to a study published in the journal Nature Energy. The study found that around 2,500 power plants are planned – enough to double electricity production by 2030. Less than 10% of the new power generated will come from wind or solar, risking countries being locked into high-carbon energy for decades. (BBC)

Store it – Australia’s Origin Energy has unveiled plans to build a 700MW battery at the Eraring coal-fired power plant. If the plan moves ahead, it would become the nation’s biggest battery, and boost renewable energy capacity from the site of the company’s only coal plant, which is scheduled to close in 2032. The news broke just a day after France’s Neoen announced plans to build a 500MW facility in western New South Wales. (ABC)

Loosen up – China’s central bank has released a brief study on the national emissions trading scheme, advising the government to “relax access and carbon asset management companies to participate in market transactions and innovate product tools”, so as to boost the efficiency of the ETS. China’s financial authorities have restricted initial trades in the market to spot deals, amid worries of market manipulation and speculator-driven price spikes. A Chinese-language summary of the study is available here.

Modest sunshine – Japan’s environment ministry has selected three solar power projects for initial co-funding under the Joint Crediting Mechanism, it said Tuesday. The ministry picks a host of programmes twice annually, though this time the batch was smaller than usual. The projects include one rooftop solar power installation each in Indonesia, Thailand, and Vietnam, with a total capacity to cut emissions by some 6,000 tCO2e. In total, the ministry has funded schemes under the JCM capable of generating over 17 mln credits by 2030.

Out of Lux – Eurostat data reveal that Luxembourg, alongside Germany, recorded the smallest share of their revenue from environmental taxes among EU member states in 2019. That year, EU nations collected €330.6 bln in environmental tax revenue, 5.9% of total public revenue from taxes and social contributions. The 2019 report found that while environmental taxes remain substantially higher than when the data series started in 2002, the share of the levies relative to a country’s overall GDP decreased slightly to 2.4%, down from 2.6%. Taxes on energy accounted for over half of environmental tax revenue across the 27 nations in 2019, while transport taxes were the second largest sources for all EU member states except Estonia and Lithuania. Both Luxembourg and Germany recorded just 4.4% of their government revenue from environmental taxes in 2019, while Bulgaria had the highest share at 10.3%. (RTL)

Get the lube – Cruise ship operator Carnival has awarded Shell Marine a multi-year lubricants contract for its global fleet of 89 ships, and will offset the CO2 emissions of these products purchased under the deal through the oil major’s nature-based carbon credits. Carnival said the move supports the company’s goal of reducing its GHGs 40% below 2008 levels by 2030. (Marine Log)

Traditioooon… Tradition! – Senior employees at broker Tradition Financial Services will have to choose between testifying in person or appearing remotely at a trial starting this month over tax fraud linked to the EU carbon market, after a judge refused to delay proceedings because of concerns about COVID. TFS had asked the High Court judge to halt the upcoming trial in London due to begin Jan. 25 amid concerns about the new viral variant and anxiety that remote proceedings will intrude upon its privacy. Counsel for TFS requested the five-week hearing be shelved over concerns about having 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. 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. (Law360)

And finally… Bad faith – Controversial papers questioning the seriousness of climate change led by David Legates, a senior official at the National Oceanic and Atmospheric Administration (NOAA) appointed by President Trump, have been published online without White House approval. The papers, which were made available on non-government websites, bear the imprint of the Executive Office of the President and state they were copyrighted by the White House Office of Science and Technology Policy (OSTP), though a spokesperson told the Washington Post that OSTP had no intention of formalising these and they were not approved by the office. The papers make controversial and disputed claims about climate science, including that human-caused global warming “involves a large measure of faith” and that computer models are “too small and slow” to produce meaningful climate simulations. Observers said the papers were designed to become part of the federal record without subjecting them to independent evaluation, as well as influence the interagency National Climate Assessment in 2023. The White House on Tuesday responded by firing both Legates and his colleague Ryan Maue from OSTP, though it was unclear if they would also be dismissed from NOAA.

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