CP Daily: Monday January 18, 2021

Published 00:24 on January 19, 2021  /  Last updated at 00:24 on January 19, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

ANALYSIS: California offset sellers see price rebound as others question future demand

California offset prices are seen rebounding this year after being pushed to historic lows by the pandemic and limited compliance buying, but some traders fear emitters may have already procured enough to stunt the market’s future demand.

ASIA PACIFIC

Fossil fuels boom in China despite pandemic effects

China saw strong growth in the production and importing of coal, gas, and oil last year, despite the COVID-19 pandemic and the president’s pledge to move the world’s top emitter towards a carbon neutral economy.

INTERNATIONAL

Carbon pricing, international credits can help curb methane emissions from oil and gas, IEA says

A robust global carbon price can help cut the oil and gas sector’s methane emissions together with other market-based mechanisms such as international credits, the IEA said on Monday.

Carbon markets veteran switches law firms

A longstanding legal expert on emissions markets on Monday joined a law firm seeking to expand its global commodities and energy practise.

EMEA

EU Market: EUAs re-test €32 in halt to pullback

EUAs straddled the €32 mark on Monday as US markets were closed and observers expected carbon to show some resilience following last week’s 9% loss.

ICYM

POLL: Analysts again raise EUA price estimates, but little more upside seen in 2021 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.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Stained rep – Armin Laschet has been elected the new leader of Germany’s largest party, the centre-right CDU, clearing a major hurdle on what could be his way to becoming next German Chancellor. The premier of Germany’s largest federal state, the traditional industry and coal mining heartland of North Rhine-Westphalia, is seen as a loyalist to Angela Merkel and stands for continuity with the parting long-term leader’s centrist course. Even though he has been an ardent supporter of Germany’s planned transition to a hydrogen-based economy, Laschet’s reputation in climate policy is dominated by his pro-industry positioning in the country’s coal exit negotiations and his government’s heavy-handed handling of protests against a new lignite mine. (Clean Energy Wire)

Get your scissors – The agreement by EU member states on an emissions cut of at least 55% by 2030 means that Germany will have to step up its climate ambitions significantly, according to environment state secretary Jochen Flasbarth. “We are convinced that Germany’s contribution to climate protection in 2030 will no longer be 55% but in the order of 65% reduction compared to 1990,” Flasbarth told the energy policy newsletter Tagesspiegel Background. He added that a 60% reduction as proposed by the conservative CSU – the Bavarian sister party to chancellor Angela Merkel’s CDU – will “surely not be enough.” Flasbarth said he believed that the European Commission will not impose new nationally binding targets for transport, building and agriculture on member states by adapting the effort-sharing regulation. “Unfortunately, this has given rise to the misunderstanding among some that we in the environment ministry would think that there would not be a significant increase in climate protection in Germany. That is, of course, nonsense,” Flasbarth said. He added that Germany’s climate policy will become much more European in the future. “The new EU climate target can be implemented to a large extent with Europe-wide instruments. If, for example, the CO2 fleet limits for passenger cars in the EU are increased or the allowances in the EU ETS are made scarcer, this will inevitably change our vehicle fleet and our energy mix,” Flasbarth said. “These instruments do not require any adjustment of national legislation.”

Reworking taxonomy – The European Commission has been forced to delay publication of detailed implementing rules on the EU’s green taxonomy to guide investors making sustainable investments, EurActiv reports. A public consultation closed on Dec. 18 with more than 46,591 answers, and finalised publication of the delegated act due on Jan. 1 was delayed as officials sift the responses. Almost every EU country or interest group had complaints, an EU source said. An updated draft is scheduled to be put to member state envoys Jan. 26, with a final version possible through mid-Feb.

Redoubling renewables – EU renewable power generation has nearly doubled since 2005, producing 34% of EU electricity in 2019 compared with the 38% produced by fossil fuels like coal and gas, according to a European Environment Agency (EEA) report. The EEA found the shift has significantly decreased emissions, while also yielding clear improvements” in key environmental problems. Meeting the EU’s 2030 emissions goals will require an even faster expansion to allow a power sector based 70% on renewables by 2030. (Reuters)

Adios permit – President-elect Joe Biden (D) is expected to rescind the Keystone XL cross-border permit for TC Energy on his first day of his administration, according to a Politico report. Biden is slated to make a series of climate-related executive orders on Wednesday, including returning the US to the Paris Agreement. The pipeline, which would transport more carbon intensive oil sands to US refineries, has faced years of controversial since first being proposed in 2008.

Moderates rule – West Virginia Senator Joe Manchin (D) expressed pessimism about the approval of a Clean Energy Standard (CES) in the Senate under President-elect Joe Biden’s (D) administration, saying the power sector has skewed cleaner without any federal mandate. Manchin, who is widely seen as the Democrat swing vote in the upper legislative chamber, said innovation would drive future emissions reductions in the power sector, and any net zero target should be feasible rather than an artificial date. Biden has proposed a CES programme that would eliminate power sector emissions by 2035. (Washington Examiner)

Speaking up – A group of nearly 100 Japanese companies – including Sony, Panasonic, and Nissan – on Monday called for the government to double its 2030 renewable energy target. Japan currently aims to get some 22-24% of its energy from renewables by the end of the decade, but that risks putting Japan at a disadvantage and the goal should be lifted to 40-50%, the companies said. (AFP)

CORSIA consulted – The UK government on Monday launched a consultation on its approach to implement ICAO’s global aviation offsetting system CORSIA. The consultation seeks views on draft secondary legislation covering the monitoring, reporting, and verification rules of the scheme, and on the implementation of CORSIA alongside the UK ETS. For the latter, the government added that “there will then be a second consultation later this year on the detailed policy design of any interaction between the two schemes followed by a second statutory instrument covering the CORSIA offsetting requirements”. The consultation is open until Feb. 28. BEIS will also host a webinar on aviation carbon pricing on Jan. 28 to provide stakeholders with an overview of the onboarding process and actions necessary for the start of the UK ETS, as well as an opportunity for attendees to put key questions to representatives from the UK government and devolved administrations.

And finally… Meat beating – Consumers and investors are looking at the environmental damage the meat industry has done and are calling for change, the FT writes in an extended feature. As part of these efforts, they are broadening their approach from the damage caused by fossil fuels to other industries, especially the GHGs attributed to the meat and dairy industries. Institutional investors are also taking notice, as debate is turning to risks caused by climate change with livestock rearing and processing assets becoming less viable as the earth warms up.

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