CP Daily: Wednesday March 17, 2021

Published 00:45 on March 18, 2021  /  Last updated at 00:45 on March 18, 2021  /  Newsletter  /  No Comments

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

Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here


UK plans for 2023 tightening of its new carbon market

The UK expects to tighten its cap-and-trade programme in 2023 to align with its mid-century net zero emissions target, the government said in a strategy document published Wednesday that could see British emitters face higher carbon costs up to three years earlier that their European rivals.


EU nations eye carbon price-based support for green hydrogen, with Portugal pioneering first auction

EU nations want to support green hydrogen using carbon contracts for difference (CCfD) schemes, with Portugal leading the way by making plans to hold an auction in the second half of 2021.

EU Market: EUAs climb back above €43 to within sight of record, as spec numbers mount

EUAs resumed an upward course on Wednesday, rising 3.3% back towards Monday’s record high as trading data showed speculator numbers and their net long positions rose to fresh records last week.

UK govt seeks stakeholder input for ETS free allocation review

The UK government is gathering stakeholder input to guide the more effective use of free allowance allocations under its new ETS.


Oil company Eni to deepen co-development of forestry offset projects

Italian oil and gas firm Eni will avoid buying spot carbon offsets from brokers where possible, choosing instead to co-develop projects in partnership with developers and local actors, a company official said Wednesday.


Washington Senate LCFS opponent sees possible “path forward” for legislation

A key Washington state senator who has repeatedly blocked low-carbon fuel standard (LCFS) legislation sees a possible path forward for the bill this year if certain provisions are built in, he told a committee Tuesday.

Virginia peaker plant opens new RGGI account, following other emitters

A Virginia-based peaker plant opened a secondary RGGI account on Wednesday, aligning with a growing trend of compliance entities registering general accounts in the power sector cap-and-trade scheme.


NZ Market: First NZU auction sells out at NZ$36

(Updated with further detail)

New Zealand sold all 4.75 million NZUs on offer at its inaugural auction Wednesday, with the sale clearing more than 7% below the secondary market at NZ$36 ($25.90).


POLL: Pandemic slashed EU ETS emissions by record amount in 2020, analysts predict

Emissions covered under the EU ETS likely fell by a record amount in 2020, according to a poll of 10 analysts, as the pandemic and subsequent government-imposed lockdowns slashed power generation and industrial output while wreaking havoc on the European economy.



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.


Another brick in the wall – India could be the next major emitter to announce a net zero target, according to Bloomberg. The news agency reported Wednesday top Indian government officials are debating whether to set a goal to zero out its greenhouse gas emissions by mid-century, or even by 2047 to mark the 100 years of independence from Britain. That report comes after Jayant Sinha, chairman of the parliament’s standing committee on finance, published an op-ed in the Economic Times this weekend, arguing that a net zero target for the country would be a benefit to the economy.


Flying higher – Airline association IATA is in talks with its 300 members over new climate change pledges. IATA boss Alexandre de Juniac said a pledge to commit to net-zero carbon emissions by 2050 may form part of a declaration at the trade body’s annual meeting in June. This would be a significant step up from the current targets of halving 2005 emissions by 2050 and carbon-neutral growth after 2020. (FT)

A central challenge – Central banks and supervisors need to introduce explicit strategies to support the transition to a net zero economy by 2050, researchers from the Grantham Research Institute on Climate Change at the London School of Economics argue in a new report. The researchers said that achieving a net zero economy is the best way of minimising the risks of climate change to the stability of the financial system and the macroeconomy, and that central banks and supervisors need to ensure that their activities are coherent with net zero government policy.

Vague news – Four climate researchers in the journal Nature have outlined some of the issues that are arising as ever more countries, institutions, and companies announce net zero targets. They say that while these action plans are welcome signs of intent, they must be fair, rigorous and transparent. The goals should clarify three aspects: their scope, how they are deemed adequate and fair, and concrete road maps towards and beyond net zero. (Nature)


Carbon driver – The planned tightening of the EU 2030 emissions target to 55% would significantly increase EUA prices, which, combined with more renewables, would largely drive coal-fired power out of the market by 2030, according to an analysis conducted by the Institute of Energy Economics (EWI) at the University of Cologne. Electricity prices would also increase, but only by around €5/MWh, EWI writes, as reported by Clean Energy Wire. This would push coal off the system well ahead of Germany’s mandated 2038 phaseout and is aligned with UN chief Antonio Guterres’ timeline for all OECD nations to end coal use to align with the 1.5C goal of the Paris Agreement.

Taxes out, markets in – Some 29 MPs from Germany’s conservative CDU party have proposed a radical makeover of the nation’s system of taxes, levies, and surcharges on energy to base them on a high CO2 price. These members of Chancellor Angela Merkel’s party propose to do away with all existing subsidies for fossil fuels as well as with the renewables surcharge, the aviation levy, and the vehicle tax by 2025 – which bring about €80 bln to the national budget ever year. Instead, they argue that Germany’s carbon price introduced at the beginning of the year at €25 per tonne should rise more quickly than currently planned to bring it closer to that in EU ETS. (Clean Energy Wire)

Community infringement – Large combustion plants in four nations in the Western Balkans – Bosnia and Herzegovina, Kosovo, Serbia, and North Macedonia –  surpassed air pollution limits in 2018 and 2019, prompting the Vienna-based Energy Community Secretariat to start an infringement procedure against them. The ceilings in question were determined in national emission reduction plans or NERPs, instruments for compliance with the Large Combustion Plants Directive, an EU law that Energy Community members need to transpose. Its director, Janez Kopac, reminded these nations that the EU will move to introduce a border adjustment levy, and that Energy Community members have committed to complete decarbonisation by 2050. (Balkan Green Energy News)

Steel’s clean paper – The world’s biggest steelmaker ArcelorMittal will offer green certificates to customers willing to pay a premium for low-carbon steel, representing emissions savings the company has achieved compared with the average CO2 intensity of European steelmaking. It expects to certify 600,000 tonnes by the end of 2022. Some 1-2% of its 70-80 Mt of annual shipments are currently deemed green and this could rise to 10% by 2030. ArcelorMittal on Wednesday also launched a fund to invest in companies developing breakthrough abatement technologies, with plans to replenish the fund with about $100 mln a year. (Reuters)

Love me tender – The European Commission has opened a €5 mln tender seeking support for emissions trading policy dialogue and cooperation between the EU and China. The effort aims to continue the ongoing cooperation between the two governments on policies tackling climate change, in particular on emissions trading, building on the existing cooperation on emissions trading. “This action will support the implementation of the annual policy dialogue on emissions trading as agreed in the Memorandum of Understanding on ETS cooperation signed at the China-EU summit in July 2018, including through joint policy research activities designed to provide appropriate and effective solutions to challenges of the Chinese ETS,” the notice said. “Furthermore, the action entails important technical knowledge sharing elements to further support China in building up and successfully establishing its nation-wide emission trading system. Specific tasks will include: information and management services, technical assessments and research, organization of specific training activities with a focus on a ‘train-the-trainer approach’.”

Compo cash – The German emissions trading authority DEHSt said 322 German companies with 902 facilities received €546 mln in compensation for indirect EU ETS costs to cover the 2019 fiscal year based on an EUA price of €16.15. Some 328 companies had applied for the funding, which was more than double the €219 mln given out in 2018.

Belgian waffle – A Belgian environmental NGO is taking the Belgian, Flemish, Brussels, and Walloon governments to court for breaching their climate obligations, arguing that inadequate climate policy constitutes a violation of standard of care, and human and children’s rights. The oral hearings before the initial court in Brussels started on Tuesday and will last nine days. In 2015, the NGO, Klimaatzaak (Climate Case in English), filed a claim with the court challenging the “inadequate” climate policies of the Belgian government – a move supported by some 62,000 citizens who were calling for more ambitious climate policies. The case initially got held up in court over a language dispute, which was solved in early 2018. (EU Observer)


Sounding the alarm – Plans by the Canadian federal government to hike carbon taxes to C$170 per tonne by 2030 will cause widespread layoffs and restrict economic growth, a new report claims, though critics hit back that the study was “alarmingly misleading”. A study by the Fraser Institute says Canada could lose 202,000 jobs by 2030 – mostly in Quebec and Ontario – if Ottawa follows through on plans to raise the levy. It would also cause a 2.1% drop in Canadian GDP, or roughly C$44 bln in losses in today’s currency. However, critics from think-tanks such as the Canadian Institute for Climate Choices and Clean Prosperity pointed out that the study ignores the role of the ‘backstop’ output-based pricing system (OBPS) – which replaces the CO2 levy on fossil fuels for large emitters – and compares the future carbon pricing plan to a “completely unrealistic” baseline scenario under which Canada has no additional climate policy. (National Post)

Full force feds – US Treasury Secretary Janet Yellen said the federal government will use all available resources to address the climate change crisis, stressing that low-income and disadvantaged communities carry the bulk of the burden. President Joe Biden faces bleak odds of passing climate change legislation in a divided and polarised Congress, but Yellen said the administration would utilise all options to cut back GHG output. Yellen’s comments came as Rostin Behnam, the acting chair of the Commodity Futures Trading Commission, announced plans on Wednesday to establish a Climate Risk Unit to analyse climate-related hazards in the derivatives markets. (Reuters/Washington Post)

Watch the SCALEs fall from our eyes – A bipartisan cohort of lawmakers in the House and Senate introduced a CCS bill on Wednesday that would invest billions in connecting CO2 emitters and storage sites. The Storing CO2 And Lowering Emissions (SCALE) Act would authorize $4.9 bln in spending over five years and is billed as the first of its kind in Congress, would create programmes to invest heavily in carbon transportation and storage, where it can be either sequestered or used in manufacturing. It would also establish a low-interest loan programme for CO2 transport projects modelled after existing programmes for highway and waterway infrastructure development and bolster Department of Energy cost sharing to create carbon storage hubs. (Politico)


Getting into the game – US-based offset project developer ClimeCo announced a partnership with Heritage Interactive Services on Wednesday to offset all emissions from the NCAA Division I Men’s basketball tournament. The companies used past historical emissions factors across the seven event venues to determine that the sporting event would result in roughly 5,500 tonnes of GHG output.  Indiana University–Purdue University Indianapolis’s Office of Sustainability will collect data during March Madness to conduct a GHG assessment.


Bottom emitter – A group of scientists and economists are pushing for bottom-trawling fishing emissions to be added to nations’ GHG inventories, as a study reveals the practice is responsible for 1 bln tonnes of underwater emissions every year. Trawlers catch fish by dragging nets along the seabed. This process disturbs the carbon stored in sediment, releasing it as CO2 and acidifying the ocean. The annual emissions from this practice are greater than those of Germany, according to the study published in Nature. Although these underwater emissions cannot be translated directly to atmospheric emissions, the study’s authors said a “substantial” amount ends up in the atmosphere. The researchers aim to estimate this amount by the end of 2021. (Climate Home)

Failing grade – In terms of ESG, Bitcoin’s grades are mixed for the S and the G, but very poor for the E, Bank of America said in a report released Wednesday. The network emits today about 60 Mt of CO2, the same annual emissions as Greece. Plus a $1 bln fresh inflow into Bitcoin may cause CO2 to rise by the same emissions as 1.2 mln cars, the bank adds. As hash power today is mostly in coal-fired Xinjiang, a link between prices, energy demand & CO2 means Bitcoin is tied to Chinese coal. Should prices rise to $1 mln, Bitcoin may turn into the world’s 5th largest emitter, surpassing Japan.


Rise of the ‘Skybrators’ – The giant windfarms that line hills and coastlines are not the only way to harness the power of the wind, say green energy pioneers who plan to reinvent wind power by forgoing the need for turbine towers, blades, and even wind. Vortex Bladeless, based just outside Madrid, has pioneered a turbine design that can harness energy from winds without the sweeping white blades considered synonymous with wind power. The design recently won the approval of Norway’s Equinor, which named Vortex on a list of the 10 most exciting startups in the energy sector. Equinor will also offer the startup development support through its tech accelerator programme. The bladeless turbines stand at 3 metres high, a curve-topped cylinder fixed vertically with an elastic rod. To the untrained eye it appears to waggle back and forth, not unlike a car dashboard toy. In reality, it is designed to oscillate within the wind range and generate electricity from the vibration. It has already raised eyebrows on the internet forum site Reddit, where the turbine was likened to a giant vibrating sex toy, or “skybrator”. (Guardian)

Got a tip?  How about some feedback?  Email us at news@carbon-pulse.com