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Two members of California’s Compliance Offset Protocol Task Force (OPTF) stepped down on Monday, arguing that the majority of the group stands to financially benefit from expanding and deregulating the state’s carbon credit programme, contradicting the wishes of environmental groups and the environmental justice (EJ) community.
The European Commission must ensure the effects of the COVID-19 pandemic will not “unduly” affect free EUA allocation through 2030, according to heavy industry representatives.
Romania’s second-largest utility CE Oltenia will begin to buy Phase 3 EUAs for 2020 compliance in spot tenders starting on Wednesday, despite a probe into the company’s restructuring plans launched by the European Commission last week.
EUAs slipped back below €38 on Tuesday as energy prices gave back some of the previous session’s gains, even as freezing temperatures continued to bite.
RGGI’s impending Emissions Containment Reserve (ECR) trigger price spurred a rise in allowance prices throughout Q4 2020, as the volume of units transferred between unaffiliated parties surged over the final months of the compliance period, according to a report released Tuesday.
The cumulative value of Southeast Asia-generated carbon credits surpassed $100 million last year, according to a report released this week, with projects in Indonesia securing around four-fifths of the total for their avoided deforestation efforts.
Australia Market Roundup: LFG, herd management projects pick up majority of new ACCUs as prices firm
Landfill gas and beef herd management projects picked up the majority of credits in Australia’s latest offset issuance, as secondary market prices continued to firm.
Madagascar signed an agreement last week with the World Bank-led Forest Carbon Partnership Facility (FCPF) to reduce emissions from deforestation and forest degradation, becoming the eleventh country to ink a REDD deal with the fund.
BITE-SIZED UPDATES FROM AROUND THE WORLD
State seepage – The world’s state-owned fossil fuel companies are poised to invest about $1.9 trillion in oil projects over the next decade, according to a paper by US think-tank Natural Resource Governance Institute. A large proportion of these investments are likely to become stranded assets, with at least $400 bln unlikely to be profitable if the world sticks to its promises to hold global heating to less than 2C. These companies produce around two-thirds of the world’s oil and gas today, with China, India, and Russia expected to be responsible for the lion’s share of the investment. (Guardian)
Shifty behaviour – EU carbon prices have neared a record €40 this month. In Germany, this has caused electricity production from coal-fired power plants to be replaced by gas so far in February – generation that is normally more expensive and therefore less used in the country’s power system. Even the most modern and efficient lignite-fired plants that are usually able to generate at low costs by using fuel mined nearby have been beaten by gas-fired alternatives due to the high costs for EUAs, Tagesspiegel Background reports. This development is aided by low gas prices and the fact that some of the most modern coal-fired power stations were mothballed at the beginning of the year as part of Germany’s coal exit, said consultancy Enervis. Even before this, the merit order – denoting the order of deployment of power plants in Germany – had shifted significantly in 2020, with gas-fired combined heat and power (CHP) plants benefiting from cheap gas able to displace lignite. (Clean Energy Wire)
Decentralise the heat – Germany’s housing association GdW and the right-wing CDU Economic Council have demanded a paradigm shift from energy refurbishments and home insulation towards a decentralised, low CO2 building technology in a 10-point plan. This would require additional investments of €25 bln annually in the residential building sector, the authors say. To achieve the goal, revenue from Germany’s carbon price on heating fuels should be re-invested into the sector to the advantage of tenants, they suggest. (Clean Energy Wire)
Under fire – France’s ‘climate and resilience’ bill, due to be examined by the French Council of Ministers on Wednesday, has already come under fire after a report published on Monday denounced tactics used by the industry to torpedo proposals made by the 150-member citizen-led climate assembly. Three days before the climate bill’s official presentation, 110 environmental and social organisations called for the government and MPs to “revive (its) initial ambition” in an open letter, citing insufficient reductions on GHG emissions and non-compliance with climate objectives. (Euractiv)
Mine rewind – Plans for a new coking coal mine in the UK have been thrown into doubt after the local authority said it would think again about the move following widespread criticism and after new information had come to light. Cumbria County Council had previously approved the application for the country’s first deep coal mine operation in 30 years. Government ministers had declined to intervene in the go-ahead for the mine on the basis it was a local decision. Critics had slammed the decision to move ahead with the mine, calling it hypocritical considering the UK is hosting COP26 this year and is pursuing carbon neutrality by 2050. However, backers argue that if the mine goes ahead, the steel industry, which was to use the coal produced, would source likely source it from elsewhere. (Sky News)
Fair share – The European Commission on Tuesday published on its website the breakdown of member state shares of EUA and EUAA auction volumes during Phase 4 of the EU ETS (2021-30). The decision – dated Dec. 21, 2020 – divvies up 90% of the allowances based on 31 countries’ shares of verified emissions for 2005 or the average of 2005-07, whichever is higher. The remaining 10% are distributed to certain countries for the purposes of solidarity, growth, and interconnections within the EU. The figures also illustrate how the shares shift with the almost complete absence of the UK. Similar to in previous phases, the largest shares go to Germany (22.3%), Poland (13%), Italy (10.5%), and Spain (9.5%), with the UK getting some 0.25% for Northern Ireland, as the region’s power plants remain covered by the EU ETS post-Brexit. For EUAAs, Germany (15.9%), Spain (14.9%), Italy (12.3%), and France (11.3%) control the largest shares, with the UK and Liechtenstein not getting any due to the countries not having any airlines covered by the scheme. The EUAA allocations are based on countries’ shares of aviation emissions in 2018.
Mike check – Michael Regan is a step closer to being confirmed as the next US EPA administrator, after the Senate Environment and Public Works Committee on Tuesday approved his nomination on a 14-6 vote. All Democrats on the committee voted in support of the nominee, as did four Republicans — Senators Kevin Cramer of North Dakota, Lindsey Graham of South Carolina, Dan Sullivan of Alaska, and Roger Wicker of Mississippi. However, it’s not clear when the full Senate may vote on Regan. The Senate trial for former President Donald Trump’s (R) second impeachment is kicking into gear and will take up floor time until it’s completed. (E&E News)
Litigation lull – A US federal court suspended litigation Monday over the Trump administration’s revocation of the California Clean Air Act waiver that had allowed the state to regulate CO2 from vehicles, handing President Joe Biden’s (D) administration time to reverse the action. The abeyance comes despite the request from a coalition of Republican attorneys general for the court to move forward with arguments, since the case was fully briefed. Meanwhile, the automakers that had been helping defend the Trump-era rule dropped out of the suit last week in the hopes of negotiating a single national standard with the Biden administration. (Politico)
Smaller contribution – California drivers use their electric vehicles roughly half as much as gas-powered vehicles on annual basis, raising questions about their ability to displace traditional vehicles, according to a new study. Academics from the University of Chicago and University of California found electric vehicles from Golden State households travelled roughly 5,300 miles (8,500 km) per year on average, or roughly half that of the US fleet average. “This raises questions about transportation electrification for climate policy,” the authors wrote.
Unfamiliar voices – Carbon pricing has not been a big issue in Japan over the past decade, but after the government set a net zero emissions target last year and the government has set up two working groups dealing with it, it is gaining prominence. Tuesday saw the Asahi Shimbun, one of the nation’s biggest newspapers, call for a national carbon price in an editorial. “The environment and economy ministries should work together to develop a carbon pricing system suitable for the realities in Japan,” the paper said.
SCIENCE & TECH
Carbon capture exploration – Cement producer LafargeHolcim and Schlumberger New Energy will explore the development of CCS solutions for cement, the two companies announced Tuesday. The new project will study the feasibility of capturing carbon from two LafargeHolcim cement plants based in Europe and North America, using Schlumberger’s carbon sequestration technologies. “This collaboration is a step towards developing a blueprint for large-scale deployment of CCS solutions in transformational sectors,” the companies said.
Deadlier than thought – Burning fossil fuels kills nearly 9 mln people worldwide, including an estimated 350,000 in the US every year, according to a new study by scientists from Harvard and three British Universities. The staggering death toll is more than double the WHO’s 2017 estimate of deaths caused by air pollution. Based on data from 2018, the scientists found nearly one-in-five deaths that year – and nearly a third of deaths in eastern Asia – were caused by burning fossil fuels. The horrific toll of air pollution surprised even the scientists themselves. “We were initially very hesitant when we obtained the results because they are astounding, but we are discovering more and more about the impact of this pollution,” Eloise Marais, a geographer at University College London and a study co-author, told The Guardian. (Climate Nexus)
Spooning poo – The Guardian details how researchers collected five Eiffel Towers’ worth of sea cucumber poo from a coral reef off Australia’s Queensland, aiming to better understand how the material helps sustain a seascape threatened by climate change. The poo aerates the upper surface of marine sediment, creating a safe habitat for other organisms like crustaceans and releases calcium carbonate to help the coral grow.
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