CP Daily: Tuesday March 9, 2021

Published 23:55 on March 9, 2021  /  Last updated at 23:55 on March 9, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

MEPs narrowly vote to keep free EU carbon allowances once border levy imposed

A narrow majority of the European Parliament on Tuesday voted against a gradual phaseout of freely allocated EUAs to energy-intensive industries in light of the EU’s prospective carbon border adjustment mechanism (CBAM).

EMEA

EU Market: EUAs climb nearly 4% to hit new record amid surging energy, stock prices

EU Allowances hit a record high above €40 on Tuesday, surging late on higher power, gas, and equities and as a Brussels official urged caution on possible carbon price controls.

EU should be “cautious” about carbon price intervention, says senior Commission official

The EU should be “cautious” about carbon market intervention and keep the supply-adjusting Market Stability Reserve (MSR) as main price stabiliser, a senior EU official said on Tuesday.

Speculator bulls, utility bears: Analyst autopsy of latest EU carbon price rally suggests clashing roles

The bull run that has lifted EU carbon prices to an all-time high to start this year has been mostly built on speculative buying rather than more traditional compliance demand, analysts said.

Oil-led energy “catch-up game” to see EU carbon price target €50 soon -analyst

EU Allowances will head towards €50 soon, an analyst has predicted, as gas and carbon play catch-up to rising crude oil prices.

ASIA PACIFIC

China NPC delegate floats idea of carbon market covering Greater Bay Area

China should establish a mandatory emissions trading market covering Guangdong, Hong Kong, and Macao, and use the platform to launch a carbon neutral Belt and Road Initiative, a National People’s Congress delegate and central bank official said Tuesday.

AMERICAS

California, WCI may seek additional delay in US DOJ challenge over carbon market linkage

California is expected to ask a federal court for an extension in the US Department of Justice’s (DOJ) lawsuit challenging the constitutionality of the WCI carbon market linkage, giving the government additional time to get political appointees confirmed, a lawyer told Carbon Pulse.

RFS Market: RIN prices stretch multi-year highs as gas arbitrage supports

US biofuel credit (RIN) values under the Renewable Fuel Standard (RFS) stormed higher on Tuesday as activity from gasoline traders lent support to expectations of a significant draw on the credit bank and a more stringently enforced programme under President Joe Biden (D).

US-based investment bank opens second RGGI account after new hire

A major investment firm opened an additional RGGI CO2 Allowance Tracking System (COATS) account this week after hiring a new environmental trader earlier this year, data showed this week.

VOLUNTARY

Shopify and Carbon Engineering announce largest ever direct air capture purchase

Canadian e-commerce company Shopify on Tuesday announced a contingent forward agreement to purchase direct air capture (DAC) CO2 removals via a new service from British Columbia-headquartered Carbon Engineering, in what the companies said was the largest publicly announced corporate procurement from the technology to date.

Impact investor Capricorn gives backing to venture building nature offsets portfolio

Impact investor Capricorn has taken a stake in a UK-based financier helping the venture to build a pool of nature-based offsets intended to be sold to buyers under long-term contracts.

Japanese firms form carbon neutral LNG buyers alliance

A group of 15 Japanese companies led by Tokyo Gas on Tuesday announced it had established the Carbon Neutral LNG Buyers Alliance to promote and improve processes for offsetting carbon emissions from liquefied natural gas.

IHS Markit plans carbon offset ‘meta-registry’ to reduce double counting risk

Data and analytics firm IHS Markit announced on Tuesday its intent to launch the first global meta-registry for promoting liquidity and transparency in carbon markets, as well as lowering the risk of double counting or double claiming of credits.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Carbon Pulse has teamed up with CME Group to provide its clients with regular updates on the global carbon markets. Check out these briefs for the latest insights on pressing trends and events impacting markets, published every other week. Registration required.

INTERNATIONAL

Major makeover – Bloomberg profiles clean energy “supermajors” it says have the clout of the energy behemoths that plumbed the world over for oil and gas before them. Enel, Iberdrola, NextEra Energy, and Orsted prioritised the building or buying of clean-power plants when those assets were still considered alternative and expensive. Ever-cheaper solar panels and wind turbines are beginning to dominate new power installations, threatening the growth of natural gas on power grids and upending energy markets.

EMEA

Renovation fade – The long-term renovations strategies that EU countries submitted last year to the European Commission are not in line with the bloc’s objective of reaching climate-neutrality by 2050, according to fresh analysis by the Buildings Performance Institute Europe (BPIE), Euractiv reports. None of the eight strategies analysed in the paper – accounting for over 50% of EU population – are in line with the EU’s 2050 net zero goal, BPIE found. Currently, Europe’s buildings are responsible for around 40% of energy consumption and 36% of GHG emissions in the EU.

Green guidance – The UK Green Building Council has published “vital” guidance on ensuring that net zero buildings and organisations are truly sustainable, setting out principles around high-quality renewable energy procurement and carbon offsets. The guidance seeks to ensure that organisations and buildings make credible claims and avoid “greenwashing”, PlaceTech reports. Renewable energy is among the key themes in the report, which argues that the procurement of green energy in the UK has a limited impact and, in some cases, no impact at all on emissions reductions for the organisation or for the country. The guidance outlines the principles organisations should use to evaluate the quality of their renewable energy procurement strategies. It also also argues that offsets can be utilised as a “credible pathway” toward net zero if used responsibly. However, they should be used only to compensate for unavoidable emissions.

Heat is on – Germany must step up renewables expansion and put a focus on the heating sector, where the majority of energy is still produced with fossil fuels, said Chancellor Angela Merkel at municipal utilities event VKU-Verbandstagung. Renewables’ 46% share of power consumption in 2020 was “remarkable”, but looking at 2030 this was not yet enough. “We are phasing out nuclear energy and coal power step-by-step and must further expand the path for renewable energies,” said Merkel. Aside from electricity, the chancellor singled out heating as a key focus. More than half of total energy consumption in Germany was for process, room, and water heating, and 80% of this came from fossil fuels. “We still have a lot of work ahead of us to build and expand heating grids, which can then be supplied with renewable energy,” said Merkel, adding that hydrogen – “aside from the bridging technology natural gas” – could be a climate-friendly alternative in the sector. “With new infrastructure, hydrogen technologies could be versatile, in heating, but also in mobility and later in industry production,” she said. (Clean Energy Wire)

Plane to train – Germany’s railway operator Deutsche Bahn and airline Lufthansa are planning on making rail travel to airports easier and faster, laying the groundwork for future avoidance of EU ETS-covered short inland flights. More cities will be connected by the “train-to-flight” services to Frankfurt Airport: Berlin, Hamburg, Bremen, Muenster, and Munich will receive so-called sprinter connections that will shorten journeys between metropolises by up to 30 minutes, the companies announced. (Clean Energy Wire)

AMERICAS

Lowering the intensity – US oil major Chevron on Tuesday pledged emissions intensity reduction targets of 40% by 2028 from 2016 levels for oil production, 26% lower CO2 intensity from gas production. 53% less intensity of methane emissions, and an end to “routine” methane flaring by 2030. It also plans to invest $2 bln cumulatively through 2028 on various CO2 reduction projects, and $750 mln through 2028 on renewables projects and carbon offsets. However, the company’s emissions intensity reduction goals do not guarantee that absolute emissions levels will decline. (Axios)

Wind of change – President Joe Biden’s administration completed an environmental review of the Vineyard Wind project off the coast of Massachusetts, moving the windfarm closer to reality. The US Interior Department released its environmental impact statement on Monday for the 800MWh project being developed by Copenhagen Infrastructure Partners and Avangrid Renewables, and its publication begins a 30-day public comment period. Vineyard Wind, the first major offshore wind farm in the US, was incorporated into the RGGI carbon market’s assumptions for its post-2020 regional CO2 caps. (Axios)

Fabric softener – A group of Republican attorneys general has sued the Biden administration for increasing the social cost of carbon (SCC). The group, led by Missouri Attorney General Eric Schmitt, argued only Congress can boost the number, which returned last month to Obama-era levels until the administration can update the number early next year. The suit alleged the new figure – up to $51/tonne from $8/tonne under President Donald Trump would cause serious harm to American industry and “undermines the sovereignty of the states and tears at the fabric of liberty”. (Politico)

Overachievers – California utility Pacific Gas & Electric sourced more than 35% of its 2020 retail sales from renewable sources, exceeding the state’s 33% Renewable Portfolio Standard (RPS) target for the end of the decade, according to the company’s quarterly earnings. PG&E noted the majority of its generation came from third-party purchasing agreements, with 1.3% coming from company-owned resources. In total, roughly 88% of the electricity delivered to end users came from carbon-free sources.

Steering a new ship – Andrew Steer, President and CEO of think-tank World Resources Institute (WRI), on Tuesday announced that Jeff Bezos selected him to lead the Amazon CEO’s Earth Fund. Steer will set the strategic vision and oversee the distribution of grants from the $10 bln fund, which will work with scientists, NGOs, activists, and the private sector to spur new technologies, investments, policy change and behaviour. Last November, the first round of Earth Fund grants were announced, with 16 not-for-profit organizations receiving $791 mln in grants.

VOLUNTARY

Mercado money – Latin American e-commerce and financial services company Mercado Libre on Tuesday selected startup Pachama as its partner in developing projects to restore ecosystems in the region. The $8 mln that Mercado Libre is investing will be in two reforestation projects: The “Mantiqueira Conservation Project,” organised under the auspices of The Nature Conservancy, and the “Corridors of Live Project,” designed and implemented by the Instituto de Pesquisas Ecologicas. Both projects will focus on the reforestation of over 3,000 hectares through natural regeneration and planting over 1 mln trees, restoring biodiversity corridors, and protecting hydrological basins in the Atlantic Forest region of Brazil. (TechCrunch)

AND FINALLY…

Sweating on a solution – Global warming above 1.5C could push tropical regions near the equator above the limit of human adaptation, according to a paper published in the journal Nature Geoscience. Above a “wet-bulb temperature” – a combined measure of heat and humidity – of 35C, people can no longer cool themselves down through sweating. (Guardian)

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