CP Daily: Tuesday February 2, 2021

Published 00:34 on February 3, 2021  /  Last updated at 12:37 on February 4, 2021  /  Newsletter  /  No Comments

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

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California evaluating future role of carbon market, despite official’s comments -sources

California regulator ARB has not yet made a determination about the role of cap-and-trade or the programme’s future allowance supply, despite comments from a state official that the WCI-linked scheme would play a “smaller role” in reaching long-term climate goals, regulatory sources told Carbon Pulse.


ANALYSIS: SSE’s hedging pause highlights uncertainty, differing strategies for emitters under new UK ETS

UK utility SSE expects to pause its forward hedging of thermal generation until the UK carbon market starts issuing units, it said on Tuesday, in contrast to other British operators continuing to use EU Allowances to hedge their post-Brexit production.

EU Market: EUAs leap 6.5% to eye record as fund fever triggers technical breach

EUAs jumped more than €2 to near-record levels above €35 on Tuesday, as reports of bullish fund managers and a strong auction pushed carbon to a technical breakout.

Influential MEPs favour phasing out free EUA allocations once border levy imposed

The European Parliament’s environment committee (ENVI) is due to vote this week on its position on a carbon border adjustment mechanism (CBAM), with a large majority of political groups endorsing a gradual phaseout of the free EU carbon allowances currently given to the bloc’s heavy industry.


Uzbekistan eyes carbon pricing mechanism as part of net zero quest

Uzbekistan’s energy ministry plans to carry out a subsidy reform in its gas-dominated electricity generation sector to be followed by the introduction of a carbon pricing mechanism in a bid to cut energy-related carbon output to net zero by 2050.

NZ Market: Carbon price nears NZ$40 in response to commission proposals

NZUs jumped by a dollar on Tuesday to nearly NZ$40, as the market responded to carbon budget proposals by the government’s independent advisors that would tighten the ETS cap.

Singapore weighs raising carbon tax in new climate plan

Singapore is preparing a multi-ministerial climate plan, with MPs pushing for the government to speed up the review of the nation’s carbon tax in order to increase levels sooner than previously planned.


RGGI targets late summer start for next programme review

The 11 member states participating in the US Northeast and Mid-Atlantic RGGI cap-and-trade market are aiming to begin the power sector scheme’s 2021 review later this summer, the programme announced Tuesday.

Virginia’s Dominion directed to update long-term modelling to achieve clean energy goals

A Virginia power utilities commission could not determine that Dominion Energy’s Integrated Resource Plan to achieve long-term climate goals is reasonable, and as a result has asked the RGGI-regulated company to do additional analysis on future demand, efforts to boost reliability, and customer bill impacts.

Top LCFS credit holder further trims holdings over past half year, data shows

The largest holder of California Low Carbon Fuel Standard (LCFS) credits reduced its share of the surplus bank to the lowest level in nearly three years, programme data showed.




Disclosure closure – The IFRS Foundation international accounting body said it would set out a definitive proposal in September for global rules to govern company disclosures of climate risks. This could then lead to an announcement on creating a global sustainability standards board during the COP26 UN climate conference in November. (Reuters)


Disappearing act – Coal is on track to disappear from the US power grid by 2033 as the push for a carbon-free electricity system gains strength, according to a report published Monday by investment bank Morgan Stanley. The fossil fuel will be supplanted largely by renewables, which will supply 39% of US electricity in 2030 and 55% in 2035. Coal supplied about 20% of US electricity last year and may rebound to as much as 22% in 2021 as higher natural gas prices prompt utilities to shift their fuel mix, according to Energy Department forecasts. But that short-term rebound won’t overcome the global shift toward cleaner sources of electricity, a trend that’s getting a big push from President Biden’s pledge to put the US on a path to an all-green power system. (Bloomberg)

Appearing act – The acting chair of the US Securities and Exchange Commission (SEC) has created a new senior policy advisor position on climate change and ESG, another signal the agency will prioritise both areas under President Joe Biden’s (D) administration. Allison Herren Lee on Monday named Satyam Khanna, an attorney who was a member of the Biden transition team that reviewed banking and securities regulators, to the new post. Khanna was most recently a resident fellow at NYU School of Law’s Institute for Corporate Governance and Finance and served at the SEC as a member of then-Commissioner Robert Jackson Jr.’s staff. (Compliance Week)

California connections – California Independent Emissions Market Advisory Committee (IEMAC) member Jennifer Kropke was named a director of energy jobs at the US Department of Energy last month, resulting in a second vacancy on the state’s cap-and-trade watchdog committee due to federal appointments. IEMAC member Ann Carlson was previously appointed general counsel at the US Department of Transportation’s National Highway Traffic Safety Administration in January. Carlson was chosen for the IEMAC by California Assembly Speaker Anthony Rendon (D), while Governor Gavin Newsom (D) will select Kropke’s replacement.

Liking their Chances – Private equity firm Cresta Fund Management has offered to buy a majority stake in North Atlantic Refining, owner of the idled Come-by-Chance refinery in Newfoundland, according to a letter reviewed by Reuters. The Dallas-based firm said in a letter dated Jan. 22 it would look to convert the refinery to renewable fuel production, potentially anticipating the start of Canada’s Clean Fuel Standard (CFS) in Dec. 2022. The refinery has been shut since March, one of numerous refineries across the US and Canada that have halted operations due to coronavirus-induced demand destruction.

Asia Pacific

Eternal bomb – Australian PM Scott Morrison has over the past few months shifted ever so slowly from ridiculing a net zero emissions target to saying it’s not a matter of when but how. However slow the messaging shift, though, the junior partner of the Coalition – the National party – is wary of the direction, saying their focus will be on the immediate consequences of putting climate policies in place. (AFR)


Global standard – The EU will seek to establish the euro as the reference currency for international hydrogen trading as it makes a dash for clean energy sources, the bloc’s energy chief Kadri Simson said Monday. “We have an opportunity to develop the EU hydrogen economy into a reference market and establish a reliable benchmark for euro-denominated transactions,” she told an event organised by Barcelona-based Esade business school. The Commission aims to install 40 GW of green hydrogen electrolyser capacity with 2030, and support the deployment of 40 GW more near its borders. (Reuters)

Another week, another EU consultation – The Commission launched on Tuesday an online public consultation on the development of a new EU Soil Strategy. The consultation seeks input on challenges and opportunities regarding soil restoration which could deliver the provision of food, energy and raw materials, and carbon sequestration.

Beyond GDP – A biodiversity report backed by the UK finance ministry warns that the world is at extreme risk by the failure of economics to take account of the rapid depletion of the natural world. The so-called Dasgupta report said rather than GDP, a new ‘inclusive wealth’ economic measure is needed that recognises the value of nature as well as an end to government subsidies of $4-6 trillion/year that perpetuate harm to the environment. (Guardian)

And finally…

Sayonara, secret science – A federal judge on Monday vacated the so-called “secret science” rule that limited the US EPA’s ability to use public health research to craft policy. The Biden administration had determined the justification proffered, unsuccessfully, by President Donald Trump’s (R) administration for its hasty publication of the rule was legally indefensible. The rule, originally conceived by the tobacco industry in the 1990s, would have restricted EPA’s ability to use studies that cannot make public their underlying data, for example participants’ medical histories. Such research includes bedrock epidemiological studies upon which EPA has relied for decades, and the implementation of the rule would have made it dramatically more difficult to enact public health and environmental protections. (Climate Nexus)

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