Newsletters > CP Daily: Thursday January 21, 2021

CP Daily: Thursday January 21, 2021

Published 01:04 on January 22, 2021  /  Last updated at 01:22 on January 22, 2021  / Carbon Pulse /  Newsletters

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

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TOP STORY

Canada narrows down federal offset protocols for priority development

The Canadian environment ministry on Wednesday halved the number of protocols that it will initially focus on developing for the federal carbon offset system, thought it may consider additional methodologies at later stages.

EMEA

Ukraine plans to introduce national carbon market in 2025 -minister

Ukraine this week confirmed plans to introduce its own emissions trading scheme in 2025, as the nation continues work to align national legislation with EU regulations.

EU may want earlier ETS cap reset to smooth allowance price path -analysts

EU lawmakers may favour re-setting the cap of the bloc’s carbon market two years earlier than officials have proposed because the move will result in a smoother upward trajectory for EUA prices, analysts said Thursday.

EU Market: EUAs surge above €34 to defy gas losses

EUAs climbed 3.6% on Thursday as a break above technical resistance triggered some buying, traders said, breaking carbon’s recent correlation with gas prices.

World Bank to study how EU carbon border levy will impact neighbouring countries

The World Bank has launched a study on the implications of an EU carbon border adjustment mechanism (CBAM) for European nations outside the bloc and Central Asian countries.

AMERICAS

NA Markets: RGGI prices continue bearish trend, as CCAs inch up despite Q1 auction pessimism

RGGI Allowance (RGA) prices reversed nearly all of their year-to-date gains over the previous week amid a speculation-fuelled sell off, while California Carbon Allowance (CCA) values rose slightly on the secondary market.

Incoming US FERC Chair Glick could open door for wholesale grid CO2 pricing

US President Joe Biden (D) named Democrat Richard Glick as chair of the Federal Energy Regulatory Commission (FERC) on Thursday, a move that stakeholders said could bolster support for clean energy deployment and accommodate grid operators’ plans to incorporate carbon pricing in wholesale power markets.

California ARB and IEMAC members tapped for Biden administration roles

An official for California regulator ARB, a member of the state’s cap-and-trade watchdog committee, and an aviation-focused legal expert from a US environmental organisation were nominated to positions at the Department of Transport (DOT) by US President Joe Biden (D) on Thursday.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Be humble – The US is returning to the Paris Agreement with “humility” due to the jarring international climate policy reversals under the previous administration, John Kerry told business leaders at a G20 forum on Thursday in his first remarks as the country’s national climate envoy. Kerry, the former US secretary of state, acknowledged that America had been absent from international efforts to contain dangerous global heating during President Trump’s presidency, but added that “today no country and no continent is getting the job done”. Kerry added that all nations must raise their climate ambition together at the COP26 climate summit in Glasgow this November, “or we will all fail, together.” (Guardian)

Carbon tax talk – President Biden’s allies in the business community have been meeting to craft a set of proposals, including a potential carbon tax, to help pay for an expected $2 trillion infrastructure plan. One of those efforts, which started just after Biden was declared the winner of the election in November, is being led by long-time Biden ally and New York business leader Dennis Mehiel, along with former Dow Chemical CEO Andrew Liveris, a person with direct knowledge of the matter told CNBC. The people on the calls, including Delaware Senator and Biden confidant Chris Coons (D), have discussed several ideas to pay for the plan, including a carbon tax, the person said. Separately, Biden’s Treasury Secretary nominee Janet Yellen reiterated her support for CO2 pricing after her confirmation hearing before the Senate Finance Committee on Tuesday. In a written response to senators’ questions obtained by Bloomberg, Yellen said that “we cannot solve the climate crisis without effective carbon pricing.” However, she raised concern about proposals to impose stress tests on banks to measure their ability to withstand the economic impact of climate change on assets and loans.

Sale suspension – Meanwhile, Biden is poised to fulfill a campaign pledge and suspend the sale of oil and gas leases on federal land, which accounts for about a tenth of US supplies, four sources told Bloomberg. The moratorium, which would also freeze coal leasing, is set to be unveiled along with a raft of other climate policies next week, and is separate from a 60-day leasing and permitting pause ordered Wednesday. The move would block the sale of new mining and drilling rights across some 700 mln acres of federal land. It could also block offshore oil and gas leasing, though details are still being developed, some of the sources said.

Sharing is Sinclairing – The US EPA this week awarded Sinclair Oil Corporation with Renewable Fuel Standard (RFS) waivers that exempt both its refineries in Wyoming from biofuel blending requirements for the 2019 compliance year, two sources familiar with the matter told Reuters, making it the only company to have received small refinery exemptions (SREs) for that year. The EPA had announced it granted two 2019 waivers to refining facilities on Tuesday night, hours before the departure of the Trump administration, but did not identify the recipients. Some 30 other waiver applications for that year remained unanswered. However, the US Court of Appeals for the DC Circuit ruled on Thursday that the EPA’s action to grant the waivers this week must be stayed after an emergency motion filed by the Renewable Fuels Association on Tuesday challenged the agency’s efforts to process them.

Naughty Aramco – Before it launched the world’s biggest public listing, Saudi Arabia’s Aramco promised potential investors a small piece of a trillion-dollar company with access to unrivalled oil reserves, not just in sheer volume, but in climate friendliness too. Aramco executives emphasised in the run-up to an IPO in 2019 that drilling Saudi oil generates fewer planet-warming emissions than other producers. But Aramco’s GHG accounting fails to provide a complete picture. The Saudi oil giant excludes emissions generated from many of its refineries and petrochemical plants in its overall carbon disclosures, according to a review of public filings by Bloomberg Green. Including all such facilities might nearly double Aramco’s self-reported carbon footprint, adding as much as 55 Mt of CO2e to its annual tally – or about the emissions produced by Portugal – and such missing data is a red flag for investors, said Legal and General Investment Management, one of Aramco’s investors.

It’s over – Europe needs to acknowledge that its future is no longer with fossil fuels, said the president of the European Investment Bank as he presented the bank’s 2020 results on Wednesday. “To put it mildly, gas is over,” Werner Hoyer said at a press conference. “This is a serious departure from the past, but without the end to the use of unabated fossil fuels, we will not be able to reach the climate targets.” The EU aims to reach net zero emissions by 2050 and is adopting a new carbon reduction target of 55% below 1990 levels for 2030. However, gas has remained a grey area, with the European Commission saying it will still be needed to help coal-reliant EU member states transition away from fossil fuels. Under its climate bank roadmap published in 2020, the EIB plans to use 50% of its activity to support climate and environmental sustainability, unlocking €1 trillion for green funding by 2030. It will also ensure that all activity is aligned with the Paris Agreement. (Euractiv)

Coalin’ in Poland – In 2030, the last electricity produced from coal will flow in Greater Poland, the second-largest region in the country. By 2040, the area intends to achieve climate neutrality. According to Euractiv, the difficulty is that the region is home to seven coal mines and is the operation ground for the Patnow-Adamow-Konin Power Plant (ZE PAK), which generates electricity from lignite. It employs several thousand people. Giving up opencast mines – or surface mines – is also a socio-economic challenge. Thousands of people will have to find new jobs and many will have to retrain. Trade unionists from ZE PAK announced that the abandonment of the new Oscislowo opencast mine would mean the loss of as many as 7,000 jobs. They fear the impact of climate neutrality plans and are threatening to go on strike. Separately, An Eastern German city is attempting to stop an opencast lignite mine in neighbouring Poland, reports Tagesspiegel Background. The city of Zittau, located very close to the border tripoint of Germany, Poland, and Czechia, will file an official complaint against Polish government plans to extend mining operations in Turow until 2044. Zittau accuses the Polish authorities of not having made a sufficient environmental impact assessment, and of violating the EU’s Water Framework Directive. City residents fear soil subsidence due to further groundwater pumping, as well as chemical pollution of the local river Neisse. The neighbouring Czech region of Liberec is also concerned that the drinking water for up to 30,000 people could dry up completely due to the mine. (Clean Energy Wire)

Say no to H – A coalition of 33 business and civil society groups have urged the European Commission to prioritise renewables and energy efficiency over hydrogen as part of Europe’s efforts to decarbonise buildings. Europe’s upcoming gas market reform, expected to be tabled in June, “should be aimed at designing an energy system that goes beyond fossil gas” in order to reach climate neutrality by 2050, the coalition said in an open letter on Thursday. The buildings sector needs to cut emissions by 60% over the next 10 years in order to reach the bloc’s 2030 climate goals, the signatories underline. And to achieve this, renewables and energy efficiency should be prioritised – not hydrogen, they argue. (Euractiv)

Kraftwerk revival – The resurrection of the Trans Europe Express 1960s network of direct rail routes between major European capitals is key to achieving carbon neutrality in the EU by 2050, according to a report by 5 NGOs funded by the German government. It found a flight from Paris to Berlin causes at least six times the CO2 of a train journey, with intra-European flights on distances less than 1,000km estimated to create 28 MtCO2e every year. Some 149 of the 365 cross-border rail links that once existed in Europe were non-operational in 2018, with rail now accounting for only 8% of all passenger travel in EU member states. (Guardian)

The less things change…  – Australian PM Scott Morrison has declared that coal mining will continue to generate wealth for his nations for decades, “fending off calls to phase out fossil fuels and toughen action on climate change”, the Sydney Morning Herald reports. However, he also ruled out government subsidies for coal mines and said mining workers knew that “things change over time” without elaborating on what this meant. (Carbon Brief)

Charting a course – New maps released in Nature Climate Change show that forests absorb a net 7.6 bln metric tonnes of CO2 each year – remaining a global carbon sink. Using this new mapping methodology, think-tank WRI says we can now for the first time quantify forest carbon sinks, sources, and overall net fluxes consistently over any area – from small local forests to entire continents. The granularity of the data has big implications for more effective and transparent forest carbon management, the research organisation adds. For example, with this more detailed picture we see that 27% of the world’s net forest carbon sink falls within protected areas, underscoring the need for conservation within these regions.

And finally… Cruzing for a bruising – Following Biden signing an executive order on Wednesday to re-enter the Paris Agreement, Texas Senator Ted Cruz (R) tweeted his opposition to the move. “By rejoining the Paris Climate Agreement, President Biden indicates he’s more interested in the views of the citizens of Paris than in the jobs of the citizens of Pittsburgh. This agreement will do little to affect the climate and will harm the livelihoods of Americans.” Cruz’ comment was immediately lambasted by Democratic politicians, environmental activists, and others, who pointed out that the 2015 climate pact is not strictly about the French capital. Additionally, they noted Cruz joined several other Republican senators and hundreds of GOP representatives after the Jan. 6 far-right mob attack on the Capitol and voted against certifying Pennsylvania’s Electoral College votes – the home state of Pittsburgh – in order to disenfranchise millions of citizens that voted for Biden. Pittsburgh’s Allegheny County voted overwhelmingly for Biden as well, and Mayor Bill Peduto in 2017 committed the city to uphold the goals of the climate agreement after President Trump said he would pull the US out of the pact.

Cruz doubled down on his remarks Thursday.

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