CP Daily: Friday March 12, 2021

Published 22:08 on March 12, 2021  /  Last updated at 00:33 on March 19, 2022  /  Daily Newsletter  /  No Comments

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

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TOP STORY

EU Climate Law negotiations advance, but fail to reach breakthrough

Trilateral negotiations for the European Climate Law are showing progress but have so far not yielded major results, negotiators told Carbon Pulse late on Friday after another round of talks.

EMEA

EU Market: EUAs’ record stretch hits fourth day for 10% weekly rise

EU carbon prices broke their record high for a fourth straight day on Friday, nearing €43 as bullish sentiment holds and energy markets remain supportive.

EU ETS-financed Innovation Fund receives over 200 applications for small-scale projects

The EU has received some 232 applications for €100 million in funding for small-scale projects under the ETS-financed Innovation Fund, the European Commission announced Friday, with energy-intensive industries making over half of the applicants.

AMERICAS

While financials boost, regulated entities slash California carbon holdings

California Carbon Allowance (CCA) speculators bolstered their holdings closer to pre-pandemic levels this week, while emitters cut their positions for a fifth consecutive week, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

US Carbon Pricing and LCFS Roundup for week ending Mar. 12, 2021

A summary of legislative and regulatory action on carbon pricing, clean fuel standards, and clean energy at the US subnational and federal level this week, including in New Mexico, Minnesota, Pennsylvania, and California.

ASIA PACIFIC

Australia Market Roundup: Forestry project earns large first ACCU batch, as hydrogen pilot marks milestone

A Western Australia forest regeneration project this week earned its first batch of carbon credits worth A$2.3 million ($1.8 mln) at current prices, while regulator data underlined voluntary buyers’ preferences for foreign offsets and a hydrogen pilot project commenced operations.

VOLUNTARY

CORRECTION: Xpansiv launches nature-based carbon offset product

(Corrects to indicate that the NEO is not based on CORSIA criteria)

Spot commodities exchange and market data firm Xpansiv launched a nature-based version of its Global Emissions Offset (GEO) on Thursday, building on the firm’s spot and futures offerings of its CORSIA-aligned and other carbon 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

Border warning – The EU’s proposed carbon border adjustment mechanism (CBAM) should be a last resort, US climate envoy John Kerry warned at the end of a four-day trip that aimed to build a transatlantic climate alliance ahead of the COP26 UN climate talks in November. Kerry urged the EU to wait until after the COP summit to move forward with the CBAM, saying it “does have serious implications for economies, and for relationships, and trade.” (FT)

Cor blimey – Australia’s former finance minister Mathias Cormann has won a hard-fought election to become the new chief of the 37-member governmental advisory OECD, despite grave concerns voiced by environmental groups over his record on climate change. Although the result of the secret ballot is not published, most observers say Cormann could not have won without US support, which in turn was likely to bring over Canada. Despite serving under a government that abolished the country’s carbon pricing scheme, failed to commit to a net zero emissions target, and maintained fossil fuel subsidies, Cormann claims his environmental record has been traduced and has pledged to work to help economies around the world achieve global net zero emissions by 2050. (The Guardian)

Counterpunch – Meanwhile down under, the Sydney Morning Herald reports that Australia will launch an ambitious global plan to eliminate tariffs on wind turbines, solar panels, and other green industries in a bid to fight back against the EU’s push to impose carbon levies on countries with weak emissions laws. Millions of dollars in new tariffs could be slapped on Australian exports after the European Parliament this week voted to forge ahead with carbon tariffs on products from countries without a carbon price. Federal Trade Minister Dan Tehan confirmed he would push back against the EU’s move, revealing Australia would argue through the WTO for an alternative plan to slash tariffs on more than 50 environmental goods and services.

COP watch – Climate diplomats in developing countries and civil society groups have warned that slow vaccine rollouts in poorer nations threaten the inclusivity of negotiations at the COP26 summit in Glasgow. The UK host has repeatedly said it is planning for the talks to be held in person while continuing to monitor the COVID-19 situation, Climate Home reports. UK officials are understood to be planning for the meeting to go ahead as a mixed in-person and online event, with country delegates potentially split up and also separated from others including business representatives, civil society, and press, a senior source close to the process told Carbon Pulse.

In the green – BP’s trading arm made nearly $4 bln in 2020, according to a copy of an internal BP presentation seen by Reuters, almost equalling the record trading profit in 2019 despite the collapse in oil demand caused by the pandemic. Trading revenue for majors such as BP and rival Shell shielded them from the full impact of the worst recession to hit the modern energy industry, helping finance their shift towards a new business model in a lower-carbon economy. Even with near record trading earnings, BP posted a $20.3 bln loss with writedowns in 2020 and a $5.7 bln loss without writedowns, plunging into the red for the first time in a decade. BP and Shell are banking on cash flow from trading to support them through their transition and to generate profit as they focus on renewable and power markets and become less dependent on fossil fuels.

EMEA

Roman resolve – Italy plans to cut its emissions by around 60% by 2030 – up from the 33% cut planned as recently as 2019 – after using €80 bln of EU funds for energy transition in the next five years, Ecology Minister Roberto Cingolani said. The minister said a key focus was on cutting red tape to allow energy projects to be authorised quicker. (Reuters)

Gas boost – UK utility Drax has won 15-year capacity auction contracts worth £230 mln for three of four planned 300MW peaker gas power projects. It will now consider selling those on, estimating the capital cost of each at £80-90 mln for two year builds, Reuters reports. Read Carbon Pulse’s article on Drax’s plans to focus on a wood-burning route to negative emissions, with its ETS emissions surging last year as it cleared its final coal stockpiles.

Nuclear fadeout  – Meanwhile, rival utility EDF’s failure to secure capacity contracts from half its nuclear units means the UK’s power generation mix will see a dramatic shift from 2024 as output is forecast to fade out sooner than anticipated, Bloomberg reports. While some of the units are expected to close by 2024 several aren’t and their future looks uncertain. The future capacity has been crowded out by cables that import power from Europe.

Saving the forests – The UK government will invest £150 mln for businesses and investors who support and deliver sustainable land-use projects and protect rainforest regions like the Amazon and Indonesian basins in communities vulnerable to climate change, through the newly launched Mobilising Finance for Forests Programme. The government said that the fund “will help protect rainforests equivalent to an area the size of Wales, cut millions of tonnes of carbon emissions, and improve the lives of over 600,000 people in tropical forest communities across Africa, Asia, and Latin America.”

AMERICAS

Bank run – Climate envoy Kerry wants America’s banks on board with the administration’s climate goals, and he’s pressing them to firm up their commitments for climate-friendly investment, Politico reports. The effort is aimed at drawing pledges that could be announced for the administration’s climate strategy rollout next month, which could also include an executive order on climate finance. Kerry is leveraging his personal ties with Wall Street to persuade Citi, Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs, and JPMorgan Chase – which have all set 2050 net zero goals or aligned with the Paris Agreement – to create a US net-zero banking alliance or pursue more specific financial commitments. So far, the banks’ promises have been vague, and environmentalists are worried they provide enough loopholes to avoid weighty and costly measures to meaningfully curb emissions.

Biofuel banter – The US Supreme Court will hear oral arguments on Apr. 27 regarding a refiner-led case to overturn a decision limiting Renewable Fuel Standard (RFS) compliance waivers, the court announced Friday. The nation’s highest court in January accepted a petition from HollyFrontier and Wynnewood Refining Company to review a lower court’s decision that reined in the agency’s granting of compliance waivers if the facilities did not receive small refinery exemptions (SREs) consistently in previous years. The EPA in February announced it supported the lower court’s ruling to curtail the use of SREs, a reversal from its stance under President Donald Trump.

Stern against Kern – Environmental groups are suing Kern County, California over an ordinance that could clear the way for 40,000 new oil and gas wells in the next 15 years. This is the county’s second attempt at fast-tracking drilling, after a 2015 ordinance was struck down by a state appeals court because it failed to account for the full impact of drilling, violating state law. The new ordinance would allow the county to weigh the impact of as many as 2,700 wells a year, helping to expedite drilling projects in the oil-rich region at the southern end of California’s Central Valley. Opponents contend that the new ordinance would fail to account for health threats to the majority-Latino community, which is already one of the most polluted areas in the country. (Climate Nexus)

ASIA PACIFIC

And another one – China’s Ant Group – an affiliate of the Alibaba Group and owner of Alipay – will phase out its operational carbon emissions and go net zero by 2030, the company said Friday in a message posted on social media channel Weibo. It did not specify how to meet the target or how it defined it, but vowed to publish regular updates on the progress it makes. (Sina Finance)

VOLUNTARY

Not a bunch of bunk – Spanish oil and gas company Repsol on Friday announced it carried out its first LNG bunkering that was compensated with carbon credits. Repsol said it had supplied 430 cubic metres of LNG to a 150-metre long chemical tanker owned by Swedish firm Furetank Rederi at a terminal owned by system operator Enagas in southeastern Spain. Repsol said it had bought credits on the voluntary carbon market related to natural climate solutions for the delivery. (Reuters)

AND FINALLY…

Fraught fund – As Kerry promises to “make good” on a $2 bln pledge to the UN Green Climate Fund, whistleblowers are urging the US to take its money elsewhere until the ‘toxic’ workplace is fixed. Campaigners are calling on President Joe Biden administration’s to commit a further $6 bln to the fund after Trump reneged on the country’s original pledge. But the latest staff survey results, presented internally last month and seen by Climate Home, show faith in the fund’s leadership is at rock bottom. Views of the senior management team were 24% favourable and 40% unfavourable, and unless there is urgent reform, whistleblowers said the money would be better directed elsewhere.

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