CP Daily: Friday January 15, 2021

Published 02:24 on January 16, 2021  /  Last updated at 02:24 on January 16, 2021  /  Newsletter  /  No Comments

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

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POLL: Analysts again raise EUA price estimates, but little upside seen following latest rally

Analysts have raised their forecasts for EU carbon allowances in 2021, though most don’t see prices rising this year much beyond this month’s record high.


Biden administration unlikely to use carbon pricing to hit US climate goals -experts

US President-elect Joe Biden (D) is unlikely to prioritise a federal carbon pricing plan despite the Democrats now controlling the Senate, while the executive and legislative branches may work in tandem to advance other decarbonisation policy goals, a panel heard Friday.

California watchdog urges state to adjust future cap-and-trade supply, alter free allocations

A California oversight committee urged regulator ARB to address the WCI carbon allowance surplus to ensure the state hits its long-term climate goal, while continuing calls to alter industrial allocation and the design of quarterly auctions.

WCI compliance entities cut California carbon holdings as financials boost position

Regulated entities unwound their California Carbon Allowance (CCA) holdings for the fifth straight week as speculators bolstered their positions by roughly the same amount, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

US EPA to solicit comments on RFS general waiver requests

The US EPA indicated Friday that it will solicit public feedback on requests to waive or reduce 2019 and 2020 biofuel blending requirements under the Renewable Fuel Standard (RFS) brought forth by small refiners and oil-state governors last year.

Two more RFS participants argue commodity trader failed to deliver biofuel credits

Two participants in the US Renewable Fuel Standard (RFS) market have filed or sought to intervene in lawsuits that allege a Texas-based commodity shop violated contractual obligations to deliver biofuel credits (RINs), bringing the total number of involved parties to four.

US-based investment bank hires former RGGI compliance trader

A New York-based environmental trader has joined a multinational investment firm after spending the past decade at a RGGI compliance entity.


EU Market: EUAs plummet 5% as gas rout persists

EUAs dropped to below €32 on Friday, falling further amid continued losses to the energy complex and cancelling out gains since new year that had pushed carbon to record highs.

EU carbon border levy most effective if revenues ‘recycled’ into clean tech -report

A carbon border adjustment mechanism (CBAM) will be most effective if the EU reinvests revenues into R&D for low-carbon technologies and clinches multilateral deals with trade partners, according to a report released this week.



Unstoppable force, immovable object – China National Offshore Oil Corp. (CNOOC) has become the latest major Chinese company to announce it’s carving out a strategy to go carbon neutral, saying Friday it will get 60% of its fuel from clean energy sources by 2060. CNOOC is China’s largest offshore oil and gas company and is one of the country’s biggest emitters. Last year it bought several carbon-neutralised LNG shipments from Shell and Total, and offsets are likely to play a crucial role in the fossil giant’s future efforts to get in line with President Xi’s 2060 carbon neutral announcement from last September. Statements from Chairman Wand Dongjin are available in Chinese here, via Petroleum Link.

You had to be there – Three years ago China set up a Renewable Energy Credit (REC) market. The motivation was largely that the government was running years late in paying out subsidies to wind and solar power companies, and wanted to offer them an alternative route to securing income. But while the REC programme provided a way to get RECs issued, there was no government policy to spark demand. In consequence, China has now issued 270 mln RECs since the programme started, but only 420,000 of those have been picked up by buyers, according to China Energy News.

Climate Allianz – Germany’s largest insurance company Allianz announced on Thursday a 25% emissions reduction target in equities and corporate bonds, its first interim target on the way to the firm’s climate neutrality objective by 2050. Moreover, all equities as well as corporate bonds will in the future be reviewed for their compatibility with the 1.5C Paris Agreement target. By 2025, all real estate invested in by Allianz will also be in line with scientifically-based 1.5C pathways in terms of total emissions, the company added.

Coal’s days are numbered in Germany – Germany’s hard coal imports could drop 18.6% YoY to 26.7 Mt in 2021, coal importers group VDKi forecast on Friday, citing lower usage by steelmakers during the COVID-19 crisis and price competition with gas and renewables in power generation. The 2021 decline will mark the sixth consecutive year in which imports have dropped and brings the full-year result down to about half of the 57.2 Mt recorded in 2016. Germany still has an important role in global coal trade flows and pricing as it remains Europe’s biggest coal importer, but coal’s days are officially numbered in the country after the Berlin government last year passed a bill for ending carbon pollution from coal generation by 2038. (Reuters)

…and in Portugal – The Sines coal plant in Portugal went offline on Jan. 14, leaving the country with just one remaining coal power station in operation, which is scheduled for closure in November. Portuguese energy utility EDP announced its decision to shut down the 1,296 MW Sines coal plant in July last year, bringing the closure forward by two years – from 2023 to 2021. EDP’s initial plans were to close Sines in 2030. The decision is “part of EDP group’s decarbonisation strategy” and was taken in a context where energy production increasingly depends on renewable sources, the company said back in July. EDP’s decision to accelerate the phase out of coal was “a natural consequence of this energy transition process,” “in line with European carbon neutral targets” and the country’s national energy and climate plan, which puts the emphasis on renewables, EDP said in a statement. (Euractiv)

Farm future – The European Commission has published a list of potential eco-schemes to green the EU’s agricultural policy. Among the practices listed is the bloc’s planned carbon farming initiative expected in end-2021, which will provide EU farmers and foresters with incentives to sequester carbon, with views to create a full-fledged system for certification of removals by 2023.

Total-ly done – France’s Total on Friday became the first major global energy company to quit the main US oil and gas lobby API due to disagreements over its climate policies and support for easing drilling regulations. Total said it would not renew its 2021 membership following a review of the lobby’s climate positions, describing them as being only “partially aligned” with Total’s. It puts pressure on Total’s European rivals BP and Shell to follow suit and highlights a widening rift between Europe’s top energy companies and their US rivals ExxonMobil and Chevron. (Reuters)

McCabe call – The incoming Biden administration plans to tap Janet McCabe to serve as deputy administrator of the US EPA, the transition team announced Friday. McCabe previously served as the acting assistant administrator for the Office of Air and Radiation at EPA for much of President Barack Obama’s administration, helping to develop the now-scrapped Clean Power Plan. McCabe currently works as director of the Environmental Resilience Institute at Indiana University and is a professor at the university’s law school. (The Hill)

Baker block – Massachusetts Governor Charlie Baker (R) on Thursday vetoed a far-reaching package of climate change and energy legislation Thursday, rejecting – perhaps temporarily – a bill that would have set the state on a path to in effect eliminate its carbon emissions over the next three decades. The legislation, considered the state’s most sweeping measure to address climate change since the landmark Global Warming Solutions Act in 2008, would have required the state to reduce its emissions by 50% below 1990 levels by the end of the decade. In a letter to the legislature, Baker said he shared lawmakers’ goals but differed with them “on how these goals should best be achieved”, saying the bill would potentially harm regional efforts to procure clean energy and that the GHG goals were not supported by scientific analysis. However, Baker’s administration recently proposed a 2030 GHG target of 45% below 1990 levels and abiding by California’s goal of banning new sales of gas-powered vehicles by 2035, and will implement the Transportation and Climate Initiative (TCI) fuel sector carbon market with two other states and Washington DC from 2023. (Boston Globe)

Cuomo capacity – New York Governor Andrew Cuomo (D) this week announced the state has selected Equinor Wind US to develop a pair of offshore wind facilities capable of generating nearly 2.5 GW. The state has a goal of bringing online 9 GW of offshore wind by 2035, and the new announcement means there are now plans in place for almost half that target. The state has also issued a request for proposals for the development of $5 bln in transmission projects to move renewable energy from the upstate region and Canada into New York City. (Utility Dive)

Polis publication – Colorado Governor Jared Polis’ (D) administration on Thursday published the final version of the state’s GHG reduction roadmap, though environmental advocates said the document is still too vague to guarantee real change. The report from Polis and his climate change team, required by previous legislation, is meant to map the role of state departments and commissions in achieving a 90% reduction in 2005 emissions levels by 2050. The roadmap calls on the Public Utilities Commission to make the target of an 80% reduction in electric power emissions by 2030 a “floor” rather than the ceiling, and Polis said rapid reductions in the cost of utility-scale solar and wind energy make further reductions attainable. However, the final version reiterated the draft roadmap’s aversion to an economy-wide cap-and-trade programme, saying it will not guarantee the necessary emissions reductions. It also noted that while the state would further evaluate a low-carbon fuel standard (LCFS), it will not pursue the policy at the present time. (Colorado Sun)

And finally… Adapt snap – Countries must adapt more quickly to the impacts of climate change or face growing risks of heatwaves, droughts, and other extreme weather, according to the UN Environment Programme’s fifth Adaptation Gap report. It found that while the vast majority of nations have bolstered their plans for the effects of global warming, there remains a vast funding gap for developing countries, many of which are already disproportionately bearing the brunt of global heating. (Independent)

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