CP Daily: Monday February 8, 2021

Published 00:10 on February 9, 2021  /  Last updated at 12:57 on February 15, 2021  /  Newsletter  /  No Comments

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

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Exchange ICE to relocate EU carbon trading to Netherlands over Brexit limitations

Exchange operator ICE will relocate its EU carbon allowance trading from its London-based hub to the Netherlands in Q2 of this year due to Brexit-related limitations, it announced Monday.


ANALYSIS: Excluding agriculture from Australia’s net zero target would come with risk for offsets, reputation

Australia’s junior coalition partner has flagged the possibility of keeping farming out of the country’s net zero emissions pledge, a move that could potentially jeopardise the offset industry’s ambition to export agriculture-based carbon credits.

HKEX takes stake in Chinese futures exchange

Hong Kong Exchanges and Clearing (HKEX) is taking a minority stake in the Guangzhou Futures Exchange, aiming to extend its engagement in low-carbon markets.


EU Market: EUAs hit new record as cold lifts energy prices, pundits eye €40

EUAs continued their record-breaking rally into a fourth day on Monday, bolstered by higher energy prices as freezing conditions set in in parts of Europe and some observers predicted further gains for this week.

EU should examine sub-national climate pledges for potential overlaps -report

The EU should examine the potential for overlaps between sub-national and corporate emissions pledges and the bloc’s climate policies to better understand their impact on the EU ETS and other initiatives, a report has found.


California offset task force recommends issuance improvements as it advances past ideas

California regulator ARB should provide greater guidance and streamline its compliance offset issuance process, while also adopting new protocols, reducing the default invalidation period, and allowing for tradeable compliance limits, an expert group wrote Monday.

Canada’s 2050 net zero goal achievable with further investments in long-term solutions -report

Canada can meet its goal of economy-wide net zero emissions by 2050, but to do so the government will need to implement more stringent climate policies, push existing GHG-cutting technologies, and back a variety of innovations to accelerate CO2 abatement, a new report found.

RGGI compliance entity, startup register in Northeast US cap-and-trade market

Two additional participants opened RGGI CO2 Allowance Tracking System (COATS) accounts on Monday, aligning with a growing trend of existing regulated entities opening new accounts in the power sector carbon market, programme data showed.


VCM Report: Offset prices surge on heightened CORSIA credit interest

Voluntary emissions reduction (VER) values soared this week as more participants expressed interest in CORSIA-eligible credits following private sector efforts to scale up and standardise the voluntary carbon market (VCM).


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Up in the air – Critical negotiations to prepare for November’s COP26 climate summit will need to take place virtually as the pandemic is still not allowing in-person meetings and further delay is not an option, according to UN chief Antonio Guterres.  This would be the first time UN climate negotiations were held online – a move long resisted by a majority of developing countries, which have repeatedly cited concerns around connectivity and inclusiveness. Negotiators have been taken by surprise by Guterres’ comments, with several sources telling Climate Home they were not aware of his position. A final decision on how to host preparatory negotiations is expected to be taken by the UN Climate Change bureau, which is comprised of UN Climate Change Head Patricia Espinosa and a number of top diplomats that ensure geographical representation. Its next meeting is planned for the end of this month. COP26 could also be postponed for the second time depending on COVID, various media reported last month, with the UK government working on contingency plans for everything from cancellation to holding a full COP26 and everything in between, including a negotiators-only or fully virtual event.

Climate wars – Just as technology has underpinned economic growth for the past decade, analysts at Bank of America believe action on climate change is set to be the key global theme politically and economically for the coming decades. As such, leading the efforts, and owning and controlling the required technologies, will be seen as key in a transforming world. “Thus, following the trade and tech wars of recent years, we expect the next chapter in US-China tensions to be climate wars,” the bank wrote in a Feb. 2 report. “It’s not just about saving the planet. We believe climate strategies offer a route to global supremacy, as much more is at stake here: the economic impact of climate could reach $69 trillion this century, and energy transition investment needing to rise up to $4 trillion per year. Energy independence & supply chain control are also at stake with the geopolitical balance of power also linked to peak oil in 2030.” Whilst US-China relations have been at the forefront of the geopolitical stage in the past decade, Europe fell behind. But this looks set to change as Europe is already a leader in climate policy, with 70% of ESG mutual fund assets, the most advanced green regulation, and a significant head-start on decarbonisation. As a result, climate wars could facilitate a European revival. Already, eight of the 10 largest global cleantech companies are European. “The net result is likely to be more money chasing companies leading the climate transition, while climate laggards could face financing hurdles or lower valuations.”


Blanket price – The German government has earmarked €6 bln for building insulation and heating modernisation in 2021 to achieve its emissions reduction targets. In addition, Minister of Economic Affairs Peter Altmaier named reducing the power price and the introduction of a CO2 price in the building and transport sectors as the most important policies to achieve change in the heating sector. “We have known from the beginning that we would achieve our climate goals in the energy sector but it was always clear that we would have a harder time achieving them in the building and transport sectors. That’s why it makes sense to make electricity cheaper and to set additional fuel saving incentives in these sectors through CO2 pricing.” Altmaier said he hoped that the EU’s new 2030 climate target would result in a bloc-wide carbon price in all sectors. (Clean Energy Wire)

Pushing for SAFs – The European Commission needs to further incentivise the uptake of sustainable aviation fuels (SAF) in the EU, following robust sustainability criteria, said a joint statement signed today by governments of Denmark, Finland, France, Germany, Luxembourg, the Netherlands, Spain, and Sweden. These EU nations “see the use of SAF as one of the most achievable and effective pathways to reduce the climate effects of the aviation sector in the short term.” The Commission was due to present its initiative RefuelEU Aviation to stimulate supply and demand for SAFs in Q4 2020, but it’s been pushed back to end Q1 2021.

Delayed rules – The EU has delayed to late April plans to finalise sustainable finance rules in the face of opposition from some member states over gas and biofuels, EU officials told Reuters. The European Commission had hoped to publish the final climate portion of a list of ‘green’ economic activities designed to funnel cash into low-carbon projects in January, but it triggered last-minute pushback from countries seeking to label gas power as sustainable.

Brit aid – The UK has opened its second competition window through July 14 for its Industrial Energy Transformation Fund, which provides £289 million in grant funding up until 2024 to help ETS-covered heavy industries decarbonise. To benefit smaller firms, the minimum grant has been lowered to £100,000, with grants of up to £14 mln possible. The first window launched in June 2020 saw 39 applications approved for £31 mln of projects calculated to cut emissions by 2.6 MtCO2e over their lifespan.


Get the scissors out – China’s aluminium sector must shut dedicated power capacity equivalent to more than Germany’s entire coal fleet over the next decade to stay on track to meet its carbon pledges, according to climate think-tank Ember (Reuters).

Fertilise it – Japan will propose a target for power plants to use some 3 mln tonnes of ammonia in electricity generation each year by 2030, up from practically nothing currently, as part of its strategy to reduce carbon emissions from the power sector, according to Nikkei.


He’s got standards – Massachusetts Senator Ed Markey (D) wants Democrats to pursue a clean energy standard over carbon pricing in their push for climate legislation under Joe Biden’s presidency. “[M]y view is that sector-wide solutions like a clean energy standard can help enact the Biden campaign promise of moving toward 100% carbon-free electricity sector by 2035,” he told Politico. “And there’s a strong case to be made that this policy proposal can be done through reconciliation. It’s effective, it’s endorsed by the Biden campaign, [and] it polls very well. And I think it should be our starting point for climate negotiations, not a carbon tax.” Markey also said he is pleased with Biden’s early moves on climate change, describing them as “very consistent with the goals” of the Green New Deal resolution he and Rep. Alexandria Ocasio-Cortez (D) unveiled two years ago. “In 2021, the House and Senate both must move quickly to implement a climate crisis response legislative package and to not allow it to slip into 2022. It must be done and it must be done quickly and we should go,” he added.

Rail delay – California is again pushing back the deadline and raising the cost for its high-speed rail project, this time asking the Biden administration for a one-year extension on completing construction on a section of track in the Central Valley. The state now expects to complete construction on a 119-mile segment of track from Bakersfield to Madera in the Central Valley by 2023, the project’s CEO wrote in a letter on Friday. Some of the money is tied to meeting a federal 2022 deadline, prompting the request for an extension, while the budget for that segment of track is expected to jump to $13.8 bln from $12.4 bln. (AP)


And they’re off – After teasing it last month, Tesla co-founder Elon Musk has unveiled his $100 mln XPrize competition with the lofty aim of removing CO2 from the atmosphere or oceans to help stem climate change. The competition opens Monday to teams around the world and will run for four years. In 18 months, judges will select the top 15 teams, each of which will receive $1 mln. At the same time, $200,000 scholarships will be awarded to 25 separate student teams who enter. The top three teams will receive $10 mln, $20 mln, and $50 mln for the third-, second-place and grand prize winners, respectively. Getting that money won’t be easy, though. Judges are hoping to see a solution that can remove a ton of CO2 per day, with the ability to significantly scale that up. “We want to make a truly meaningful impact. Carbon negativity, not neutrality,” Musk said in a statement. (Engadget)


Balloon bursting A Harvard University-backed proposed scientific balloon flight to test the potential for experiments on radiation-reflecting particles in northern Sweden has attracted opposition from environmental groups over fears it could lead to the use of solar geoengineering to cool the Earth and combat the climate crisis by mimicking the effect of a large volcanic eruption. The organisations said that the balloon flight could be the first step towards the adoption of a potentially “dangerous, unpredictable, and unmanageable” technology. (Guardian)

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