CP Daily: Tuesday March 30, 2021

Published 23:30 on March 30, 2021  /  Last updated at 23:34 on March 30, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

China sets year-end compliance deadline for 2019, 2020 ETS emissions

More than 2,200 power companies covered by China’s national emissions trading scheme will have to surrender allowances for their 2019 and 2020 CO2 emissions by Dec. 31, the government said Tuesday.

EMEA

South Africa proposes tougher 2030 emissions target for revised NDC

South Africa’s government has proposed to tighten its 2030 emissions target by almost a third as part of a revised Paris Agreement pledge that sets out intentions for the export of correspondingly-adjusted carbon credits.

EU Market: EUAs inch above €42 amid strong auction demand, early ETS data readout

EUAs rose for a third straight day on Tuesday as another strong auction continued to stoke bullish sentiment, while an analyst readout of early EU ETS data suggested emissions dropped by less than expected last year.

EU national recovery plans show many “missed opportunities” for climate action, says NGO

The EU’s post-pandemic recovery fund could be spent better as many national plans have “missed opportunities” for low-carbon investments, a Brussels-based green group said on Tuesday.

AVIATION

Middle East carbon standard approved as newest CORSIA offset programme

The ICAO Council this month upgraded the Qatar-based Global Carbon Council (GCC) to supply units for the international aviation offsetting scheme CORSIA, while the UN body also extended the eligibility dates for one already-approved programme.

AMERICAS

British Columbia publishes revised forest offset protocol for consultation

The British Columbia government on Tuesday began its consultation for its revised forest carbon offset protocol (FCOP), coming six years after the province repealed the methodology.

Analysts foresee higher California in-state offset prices as shortage materialises by 2025

California Carbon Offsets (CCOs) with direct environmental benefits to the state (DEBs) are expected to be undersupplied in the latter half of this decade, with premiums slated to rise as market participants anticipate forthcoming shortages, analysts said during a webinar on Tuesday.

California-registered carbon market accounts decline in Q1 as offset participants exit

Six general market participants opened Compliance Instrument Tracking Service System (CITSS) accounts over Q1 2021, while more than a dozen accounts tied to offset projects shuttered in the WCI-linked cap-and-trade scheme, data released by California regulator ARB on Tuesday showed.

LCFS Market: California prices dip to 11-mth low, while forward transactions dry up

California Low Carbon Fuel Standard (LCFS) credits continued to fade this week to levels not seen since last spring, while market participants noted several reasons for a lack of trades further out on the curve in recent months.

ASIA PACIFIC

China prepares to give emissions trading scheme a legislative foundation

China’s Ministry of Ecology and the Environment (MEE) on Tuesday released draft legislation that aims to write the national ETS into law, a move that would bolster the scheme’s authority and enable the government to hand out stricter penalties for non-compliance.

Indonesia launches trial carbon market for coal-fired power plants

Indonesia has launched a trial emissions trading scheme covering 80 coal-fired power plants that initially will run until August, according to the energy and mineral resources ministry.

INTERNATIONAL

Lessons from no deforestation movement helping to shape investors’ views on net zero

Investors networks are increasingly adding interim targets and flexibility into frameworks to evaluate the validity of corporate net zero commitments, building on a decade of trial and error from the no deforestation movement, experts said.

Governments remain short of effective carbon pricing rates, says OECD

Governments have made some progress on pricing carbon from energy use, but the values are still well below estimates of the real cost to the planet, according to OECD analysis published on Tuesday.

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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

Lend trend – The nine major multilateral development banks appear to be switching away from financing fossil fuel projects, with at least $12 bln directed toward clean energy and only $3 bln to fossil fuels, according to Energy Policy Tracker analysis released Tuesday. Overall, project finance spending on fossil fuels in 2018-20 fell by 40% compared to the 2015-17 period. However, not all banks are switching at the same pace. The European Investment Bank spent almost nine times as much on clean energy funding as on fossil fuels, while the European Bank for Reconstruction and Development increased its funding for fossil fuel projects. (Politico)

For the chop – Deforestation in developing countries is often driven by the demand for commodities in richer nations, according to a study in published in the journal Nature Ecology and Evolution. The UK, Germany, France, Italy, and Japan “imported” more than 90% of their national deforestation footprints from abroad through consumption of foreign-made products over 2001-15, the study found, of which 46-57% was from tropical forests. Members of G7 countries cause the loss of nearly four trees each year through their consumption of goods such as coffee and cocoa, it added. (Carbon Brief)

A net job creator – Two-thirds of economists in a recent survey said that it was “likely” or “extremely likely” that the expected benefits of government targets for reaching net-zero emissions by 2050 would outweigh the expected costs, the Independent reports. By comparison, 12% said that it was “unlikely” or “extremely unlikely” that the benefits would outweigh the costs, 18% said it was “still not clear” and 4% said they had “no opinion”. In addition, 74% of economists surveyed said they strongly agreed that “immediate and drastic action is necessary” to tackle the climate crisis. (The Independent)

EMEA

Survey says – More than 90% of business leaders from a handful of African countries support a well-designed global carbon tax regime as a means to boost green growth and shield communities from negative impacts of climate change, said a survey launched in Nairobi on Tuesday. According to the “Zeronomics” survey carried out by Standard Chartered Bank last fall, there is a strong support for a carbon tax and strong regulations to spur green growth in the continent. The poll on business leaders’ attitudes towards low-carbon development was carried out in Ghana, Kenya, Nigeria, Zambia, and South Africa. It found that 78% of executives in those countries believe that financing, regulatory, and governance bottlenecks had derailed action, thereby exposing the continent to adverse impacts of climate change. Some 55% worry that their firms were not transitioning fast enough towards carbon neutrality, while just 35% pledged support to the Paris Agreement. The survey also found that many firms there are delaying transition to carbon-free growth, citing inadequate access to clean technologies and cumbersome regulations. Some 78% of the African executives – compared to 59% of their counterparts elsewhere in the world – stressed the need for extensive organisational change to pave way for the low-carbon transition. (Xinhua)

Gun shy – Geneva-based energy trader Gunvor aims to cut its Scope 1 and 2 emissions by 40% under its 2019 total of 1.9 MtCO2 by 2025. It has set up a new subsidiary called Nyera to invest 10% of the company’s net equity in non-hydrocarbon projects such as solar and biomass, with at least $500 mln over the next three years. Boss Torbjorn Tornqvist said Gunvor was expanding fastest in LNG, gas, and power trading, but was also “beefing up” carbon emissions trading. (Reuters)

Hit the spot – The European Commission has opened an investigation into the Paris-based Epex Spot exchange on suspicions it has hindered competitors in the intraday power markets of six member states, it said on Tuesday. The EU executive is concerned the bourse may have restricted competition in the within-day electricity markets of Austria, Belgium, France, Germany, Luxembourg, and the Netherlands. Its investigation would focus on concerns the exchange “may have adopted behaviours aimed at foreclosing its competitors by curtailing the ability of their customers to access the entire liquidity of the intraday market,” it said in a statement. “If proven, this behaviour may constitute an exclusionary practice, in breach of the EU’s antitrust rules.”  Epex Spot said it was “fully committed to cooperate in good faith with the authorities and to continue the constructive dialogue with the European Commission”. The Epex Spot is the biggest power exchange in several EU member states. (Montel)

Paris-aligned Olympics – The Olympic Games to be held in Paris in 2024 will be the “first sporting event in the world” to have a positive impact on the climate, according to its board of directors, which approved its climate strategy in mid-March. The committee confirmed that Paris 2024 will reduce event-related emissions by 50% compared to previous editions of the Games, and the organising committee is “committed to offsetting all emissions that cannot be avoided by supporting CO2 prevention and capture projects”. (Euractiv)

ASIA PACIFIC

Delhi doubts – World number three emitter India is unlikely to bind itself to a 2050 net zero GHG goal, with the administration concerned the country may have to cut back on consumption if it were to tie itself to a hard emissions deadline amid fast-rising energy demand, two government sources involved in the discussions told Reuters. India is instead aiming to stick to and outperform its current NDC Paris Agreement pledge to reduce GHGs 33-35% from 2005 levels by 2030.

Peculiar timing – Australian oil and gas company Santos announced Tuesday it has decided to go forward with a multi-billion dollar plan to launch the massive Barossa natural gas project just off the coast of the Northern Territory, as part of a package that will also see the Darwin LNG plant’s life extended by some 20 years and add some pipelines, according to the Sydney Morning Herald. The decision comes just months after the company announced it will achieve net zero by 2040, though observers say Barossa is extremely CO2-intensive, requiring extra efforts to reduce emissions. Santos has previously signed an MOU with Japan’s Mitsubishi on potential CCS or carbon credit deals.

AMERICAS

Provincial purpose – The Saskatchewan government has announced its plans to transition from a federally imposed CO2 levy backstop to its own pricing system, but Ottawa is still awaiting the province’s formal pitch and questions linger about whether Saskatchewan’s approach will be approved. Following the last week’s Supreme Court of Canada decision that upheld the constitutionality of the federal CO2 pricing regime, Saskatchewan Premier Scott Moe said his province would craft a carbon levy on fuels similar to New Brunswick’s approved system, which partially offsets the charge by lowering excise taxes. But following Saskatchewan’s announcement Thursday, federal environment minister Jonathan Wilkinson told CBC that such a move to mimic New Brunswick’s rebate at the pump “would defeat the whole purpose” of the carbon price. Asked why Ottawa allowed New Brunswick to do it last year and won’t let Saskatchewan do it now, Wilkinson said that is “something that we are looking to change and to fix on a go-forward basis.”

More time to consider The Transportation and Climate Initiative (TCI) extended a comment period for its draft Model Rule until May 7 from its prior deadline of Apr. 1, according to a press release. Connecticut, Massachusetts, Rhode Island, and Washington DC released the Model Rule earlier this month for the proposed fuel sector cap-and-trade programme. The draft borrows numerous programme elements from the power sector RGGI scheme, including a Cost Containment Reserve, Emissions Containment Reserve, and price floor. However, the advancement of the proposal has faced criticism as 10 TCI states did not sign onto the proposed programme in Dec. 2020. The TCI draft Model Rule had garnered only six public comments as of Tuesday afternoon.

White House to BlackRock – Investment management firm BlackRock hired Obama-era climate finance and diplomacy veteran Paul Bodnar on Tuesday to lead the company’s sustainable investing, the company announced. Bodnar will be tasked with helping to create more sustainable and resilient investment portfolios for clients, and his addition comes as investors are facing increased pressure to account for climate change impacts. Bodnar previously served as Special Assistant to the President and Senior Director for Energy and Climate Change at the National Security Council under Obama.

VOLUNTARY

College credit – Some 42 US higher education institutions have retired 1% of the credits in the domestic voluntary carbon market, according to a report by UK-based data firm AlliedOffsets published Tuesday. Renewable energy projects are the most popular among American education institutions, accounting for 75% of credits retired. The University of Illinois at Urbana-Champaign leads the way with over 400,000 credits retired to date.

Lights, camera, climate action! – Netflix, the maker of the Attenborough climate documentary, plans to banish dirty diesel generators from film sets and use more virtual production techniques, after a review found that more than half of the company’s carbon emissions came from film production. Although the US group serves more than 200 mln online video subscribers worldwide, the study of its emissions showed they came mainly from intensive productions rather than from the data centres behind its streaming service. Netflix will also adopt a carbon price in its budgeting process as a key internal change, as it sets a target for net zero emissions by 2022. Reed Hastings, Netflix chief executive, told the Financial Times that the group was taking responsibility for the carbon footprint of all its branded shows, not just those it makes itself. The company aims to cut its direct emissions, from fuel and electricity, by 45% by 2030 against its 2019 levels.

AND FINALLY…

Off the wagen – Volkswagen is changing the name of its American brand to Voltswagen, in a not-so-subtle nod to the German automaker’s multibillion-dollar effort to become the biggest electric vehicle manufacturer in the world. The company was apparently planning to make the announcement at the end of April but accidentally published a press release about the name change early Monday afternoon, which was first spotted by CNBC before it was taken down. The company confirmed the change to The Verge, and the announcement was later published on Tuesday morning. The larger Volkswagen Group, which sits over brands like Audi and Porsche, will keep the Volkswagen name for its American division, and the name change will officially take effect May 2021.

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