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EUAs climbed above €40 for the first time ever on Thursday amid bullish technical signals and growth in investor interest, but prices fell sharply in the final minutes on a report that EU lawmakers could be considering speculation curbs.
The UK government has increased the reserve price in its upcoming carbon allowance auctions by almost 50%, and has updated the rules governing the market’s cost containment mechanism, it announced late Thursday.
Oil major Shell set out plans on Thursday to significantly scale up its demand for nature-based carbon credits and CCS as part of its rising climate ambition over the next 15 years.
NA Markets: RGGI prices rise as cold snap persists, while California allowances inch up ahead of Q1 sale
RGGI Allowance (RGA) prices climbed to a nearly three-week high this week on thin secondary market activity, as California Carbon Allowance (CCA) values edged further away from the annual WCI floor price ahead of next week’s quarterly sale.
California Low Carbon Fuel Standard (LCFS) prices retraced towards a recent six-month low this week as a surprising credit build during Q3 2020 continued to exert bearish pressure on the market.
New Zealand is proposing a confidential reserve price on NZU auctions meant to stop government sales of carbon allowances from clearing too far below secondary market prices, according to draft legislation released for public consultation on Thursday.
Changing South Australian state legislation on lease periods for pastoral rangelands could help drive the generation of millions of carbon credits across the state every year, according to a report released Thursday.
Canadian financial software company Abaxx Technologies has agreed to invest in blockchain-based venture AirCarbon, with the potential to scale up the partnership further when the Singapore-based emissions platform develops a regulated futures market, the companies announced Thursday.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Climate convening – US Vice President Kamala Harris (D) and White House aides convened cabinet secretaries and the acting heads of 21 federal agencies on Thursday to begin fulfilling President Joe Biden’s (D) promise to mobilise the entire federal government to confront climate change, The New York Times reports. The first meeting of the National Climate Task Force (NCTF), created as part of a series of executive actions during Biden’s first week in office, focused on job creation as well as ensuring that agency leaders understood their role in helping to set an aggressive new Paris Agreement NDC, which the US plans to announce by the Apr. 22 Leaders’ Climate Summit. Biden later on Thursday created a new Climate Innovation Working Group under the NCTF, part of his plan for launching an Advanced Research Projects Agency-Climate (ARPA-C). The working group “will help coordinate and strengthen federal government-wide efforts to foster affordable, game-changing technologies that can help America achieve the President’s goal of net zero economy-wide emissions by 2050”. As part of this effort, the US Department of Energy announced $100 mln in funding via the Advanced Research Projects Agency-Energy (ARPA-E) to support transformational low-carbon energy technologies.
More orders – Meanwhile, President Biden is likely to issue more executive orders on global warming, said White House climate advisor Gina McCarthy in an interview with E&E News. The former EPA administrator was circumspect yesterday about when those orders might come or what they might entail. But she hinted that Biden isn’t done – even after he launched his presidency with a raft of climate-related orders and actions. McCarthy also left open the option of using a carbon tax, with Treasury Secretary Janet Yellen and Special Presidential Envoy for Climate John Kerry expressing support for the policy.
Risk report – The US Securities and Exchange Commission (SEC) should issue new, mandatory disclosures rules focused on climate risk, as this type of financial risk is not routinely disclosed to the public, according to a report published Thursday by the New York University School of Law and green group EDF. For climate risk disclosures, the authors recommend drawing best practices from existing frameworks and standards, soliciting input from financial and climate experts, corporations, and investors, and coordinating with other financial regulators and drawing on climate-related expertise at other federal agencies through inter-agency working groups.
Contender bender – Germany needs more consistent and ambitious climate policies, including a higher CO2 price, according to Markus Soeder, leader of the country’s conservative CSU party and Bavaria’s state premier, Die Ziet and Clean Energy Wire report. Germany needs a higher CO2 price, determined by supply and demand, which would allow energy taxes to be reduced significantly, he said. The CSU politician is currently leading polls to succeed fellow conservative Angela Merkel as chancellor later this year, but it is still uncertain whether he will run as a candidate for the conservative alliance, as Armin Laschet, the new leader of the much bigger CDU, might claim the candidacy for himself. Read Carbon Pulse’s analysis on how Merkel’s party successor may need to show more on climate to win German elections.
Drax drop – UK utility Drax is set to drop its 3.6 GW conversion of its two remaining coal units to gas, Bloomberg reports. This comes a month after legal campaigners ClientEarth failed in a legal challenge to the government’s approval for what would be the biggest gas-fired power plant in Europe. Read Carbon Pulse’s report on Drax’s December deal to sell four other gas power plants to energy trader Vitol as the British company focuses on a wood-burning route to negative emissions.
Airlines 4 Net Zero – EU aviation organisations Airlines 4 Europe, ACI Europe, ASD, the European Regions Airline Association, and CANSO on Thursday laid out their ‘Destination 2050’ initiative – a roadmap for the sector to reach net zero emissions by 2050 that was heavily reliant on the use of offsets. A study commissioned by the associations projected that passenger demand will continue to grow at an average of 1.4% a year through to mid-century – taking into account the effects of the COVID-19 crisis – but said the uptake of sustainable aviation fuels (SAFs) and hydrogen-powered aircraft could mitigate the environmental effects.
Goodbye, ghost flights – The European Parliament approved a revamp of the EU’s “use it or lose it” waiver for airport slot rules on Thursday, a measure first introduced in Mar. 2020 to stop pandemic-hit airlines from flying almost empty planes to maintain route access. The onset of COVID-19 saw airline passenger levels fall to a trickle, but airlines, worried about not meeting the 80% threshold, flew mostly unoccupied planes regardless – so-called ‘ghost flights’. EU lawmakers have now introduced a lower threshold of 50% for the 2021 summer season. (Euractiv)
U-turn – The French government will scrap a plan to expand the Paris Charles de Gaulle airport, France’s Ecological Transition Minister Barbara Pompili said Thursday. Pompili said the project to build a fourth terminal at the country’s biggest airport does not fit with the nation’s environmental goals. Rather than increase capacity, Pompili said the goal should be to cut emissions. “We will always need planes, but we must move toward a more reasonable use of air travel and reach a reduction in the sector’s greenhouse gas emissions,” she said. (Politico)
Methane action – The European Commission has launched a public consultation on aspects of methane emissions in the energy sector, in order to support the preparation of proposals for new EU legislation due to be tabled later this year. The consultation will run until Apr. 30.
C-BOOM – Australia will be pushing back against UK Prime Minister Boris Johnson’s plan to push climate tariffs at the G7 summit in June, reports the Sydney Morning Herald, with senior government sources telling the paper that such fees would be undermining free trade deals.
More CBAM – While talk about carbon border adjustment measures have primarily come from the EU and the UK so far, Japan might become the latest nation to get on that train. Its Ministry of Economy, Trade and Industry (METI) will consider a similar policy for Japan in parallel with working on a carbon pricing mechanism, reports Nikkei. A decision is expected around mid-year.
Shoe on the other foot – Western Australia is having state government elections this year, and Liberal party leader Zak Kirkup on Thursday promised that if he was elected premier he would shut down all of WA’s four coal-fired power plants by 2025, get the private sector involved in a A$9-bln renewable energy “mega project”, and ensure emissions from government activities hit net zero in 2030, according to WA Today. The state Labor party later said Kirkup’s plan would cost thousands of jobs and be entirely unaffordable, thus turning the two parties’ stances on the climate issue on the federal level on its head.
Midwest magma – Temperatures in the northern Midwest have been so cold for so long that ice volcanoes – which can grow as tall as humans – have emerged on the Great Lakes this week, but their appearances have become more infrequent and short-lasting due to climate change. During the winter, ice shelves can form on the lakes as liquid flows underneath, and the resulting ice erosion creates the volcanoes. Their formation requires long periods of cold conditions, which are becoming less common as the climate warms. “Whatever you would think are the worst conditions to be outside,” those are the prime conditions for this strange phenomena to occur, Tom Finley, director of education at Milwaukee’s Schlitz Audubon Nature Center, told the Washington Post. (Climate Nexus)
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