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TOP STORY

PREVIEW: Traders divided on whether February WCI auction will sell out

Traders differ wildly over how Wednesday’s first WCI auction of the year will perform, with some foreseeing another undersubscribed quarterly sale and others anticipating a sell out potentially above the floor price.

AMERICAS

Canada to consider tightening large emitter benchmarks in OBPS programme review

Canada will explore increasing the annual stringency of performance standards under the ‘backstop’ output-based pricing system (OBPS) after next year in order to meet the country’s long-term GHG reduction goals, the federal environment ministry announced in kicking off a review of the large emitter programme.

Pennsylvania commission seeks one-year delay for RGGI implementation

Pennsylvania should consider delaying the implementation of its RGGI-aligned cap-and-trade regulation by one year and provide further evidence of  Governor Tom Wolf’s (D) statutory authority to implement the programme through executive means, an independent review board said Tuesday.

Analysts trim 2030 WCI emissions forecast on power, transportation sector abatement

Emissions covered by the WCI cap-and-trade programme will trend lower over the decade due to reduced power demand in California and new efforts to decarbonise Quebec’s transportation sector, analysts said in a report published Wednesday.

EMEA

EU Market: EUAs slip on weaker energy, as funds become largest market segment

EUAs fell for the third straight day on Wednesday as a falling energy complex weighed, with carbon defying prevailing bullish sentiment and data showing speculative funds have become the market’s largest segment.

EU carbon prices face more downside risk with warming temperatures -analysts

EU carbon allowances likely face more downside risk after retreating from an all-time high above €40 this week, analysts said Wednesday, with warmer European temperatures set to weigh.

Shipping industry advances progress on cleaner fuels as EU aims to tighten regulation

Danish shipowner Maersk announced Wednesday that its first carbon neutral vessels could operate from 2023, a rollout far faster than previously planned and coming as the wider EU shipping industry urges Brussels to impose targets for cleaner fuels as part of its climate package due in June.

ASIA PACIFIC

Japan-Kenya JCM scheme sees first carbon credits issued

The Japan-Kenya Joint Crediting Mechanism (JCM) committee has approved issuance of carbon credits to a solar PV project in Kenya, the first JCM units awarded to any scheme in the East African country.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

INTERNATIONAL

Risk rubric – BlackRock, the world’s biggest investor, said fossil fuel extractors should base their climate targets on emissions released when their products are burned (scope 3), the Guardian reported. The asset manager said all companies it invests in will be expected to disclose direct emissions from their operations (scope 1) and from energy they buy (scope 2) and set short-, medium-, and long-term emissions goals. The letter outlining its plans also said BlackRock could vote against company directors that fail to provide credible climate plans. Bloomberg reported that the Blackrock paper also said that companies should only use carbon offsets “as a complement, though not a replacement for, substantive and sustained long-term emissions reductions.”

Getting heavy – Just 14% of heavy industry is aligned with global climate goals, with the biggest firms woefully underprepared for the net zero transition, according to the Transition Pathway Initiative, which analysed nearly 170 companies. It found 95 out of 111 large publicly-listed industrials have so far failed to align their emissions with a 2C pathway, with aluminium and paper sectors having the poorest performance. (BusinessGreen)

EMEA

Fossil ties – Three top officials in Ursula von der Leyen’s green-oriented European Commission – Josep Borrell (foreign affairs), Stella Kyriakides (health), and Adina Valean (transport) – had previous ties with the fossil fuel industry, according to research by NGO Global Witness reported by Euractiv. The Commission pointed out its code of conduct sees no conflict of interest where ties apply to family members and noted that only Valean was directly in charge of energy and climate policy.

Franco-German wishlist – German minister Peter Altmaier and Bruno Le Maire from France on Wednesday argued in a joint position paper that the upcoming EU industrial strategy requires a strengthening of the EU ETS together with a carbon border adjustment mechanism to limit the risk of carbon leakage in a WTO-compatible way. Altmaier and Le Maire added that “a revision of the market stability reserve and the introduction of a minimum carbon price should be considered”, echoing previous Franco-German statements calling for a carbon price floor in the ETS.

LIFE-changing investments – The European Commission on Wednesday announced an investment of €121 mln for new integrated projects under the EU’s LIFE research programme for the Environment and Climate Action. This funding – increased by 20% compared to last year – will support Belgium, Germany, Ireland, France, Hungary, Italy, Latvia, the Netherlands, Poland, Portugal, and Slovakia in reaching their objectives in the areas of nature, water, air, waste, climate change mitigation, and climate change adaptation.

AMERICAS

Provincial pricing, part 1 – The federal government owes Canadian families in three provinces more than C$200 mln after underestimating how much it would raise from the carbon tax during the first year of the programme. Finance Canada thought the new price on CO2 pollution would bring in about C$2.3 bln in 2019. When the final tallies were counted however, the ‘backstop’ CO2 fee raised C$2.42 bln. By law, all revenues from the carbon price are to be returned to the province in which they were raised, with 10% going into funds to help smaller businesses, schools, hospitals, and municipal governments cut their own emissions and 90% going to families through income tax rebates. The government didn’t meet that threshold in Ontario, Manitoba, or New Brunswick. (Canadian Press)

Provincial pricing, part 2 – The Alberta government must consider the options of a harmonised sales tax (HST) and a provincial consumer carbon tax to counter the jurisdiction’s mounting debt, according to the Business Council of Alberta. It estimates that an HST would bring in approximately C$1 bln for each percentage point of a sales tax while Alberta could collect C$1.5 bln from a $50/tonne carbon tax. Alberta Premier Jason Kenney scrapped the left-wing NDP government’s CO2 levy when his United Conservative Party won the province’s spring 2019 election, but since 2020 it has been subject to the federal ‘backstop’ carbon tax, where the majority of revenues are rebated to consumers. (CTV News)

Boeing backing – Aerospace manufacturer Boeing on Tuesday filed a request to intervene in a challenge to the US EPA’s 2020 rule creating CO2 emissions standards for jet aircraft before the DC Circuit Court of Appeals. The rule set a standard that aligns with the requirements in an international agreement on aircraft signed by the President Barack Obama’s administration in 2016, but last month 12 states filed a challenge to the rule, calling for one that requires steeper emissions reductions. Boeing thought the rule should stand, arguing that overturning the regulation would “only discourage future international agreements, which are essential to addressing this global issue.” (Politico)

AND FINALLY…

Not so easy breathing – New analysis by AstraZeneca of respiratory inhaler medicine use in the UK shows that 83% of all short-acting beta-2-agonist (SABA) relievers for asthma are prescribed to patients who are potentially overusing their reliever medication, and that overuse is responsible for 250,000 tonnes of CO2e annually. “This new analysis shows that reliever overuse is also a major contributor to greenhouse gas emissions in respiratory care, similar to driving an average diesel car for about 900 million miles,” the authors said. The results also showed that SABA inhaler use drives 70% of GHGs from inhaler devices in the UK, and the per capita use of all SABA reliever inhalers in the UK was approximately three times or more than that observed in other large European countries. The findings will be presented at the British Thoracic Society Winter Meeting and are based on SABA prescription and use data in the UK between 2007-17.

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