CP Daily: Thursday April 1, 2021

Published 23:05 on April 1, 2021  /  Last updated at 23:05 on April 1, 2021  /  Newsletter  /  No Comments

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

**Due to the Easter holidays, CP Daily will not be sent on Good Friday or Easter Monday**

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TOP STORY

Pandemic triggers huge fall in EU ETS emissions last year -analysts

Verified emissions in the EU ETS excluding aviation dropped by between 11.2% and 12.6% in 2020, according to incomplete and preliminary like-for-like data examined by analysts, confirming estimates that the coronavirus and related lockdowns may have caused the largest ever fall in greenhouse gas output under the 16-year old scheme.

ASIA PACIFIC

CN Markets: CCER bids rise to nearly 30 yuan as national ETS launch looms

Interest in offsets is rising in China with traders taking punts on units they think will be eligible in the national ETS, while Chongqing and Guangdong performed best among the regional pilot markets over the past month.

Australia Market Roundup: Woolworths boosts offset numbers, as Orica registers first carbon project

Supermarket chain Woolworths has received its biggest batch of carbon credits yet for its energy efficient lighting projects across Australia, as miner Orica has registered its first-ever project eligible to generate offsets.

AMERICAS

Canadian CO2 levy increases to C$40/tonne, British Columbia’s hits C$45

The Canadian ‘backstop’ carbon charge on fossil fuels climbed C$10/tonne on Thursday to C$40 ($31.80) after the Supreme Court upheld the constitutionality of Ottawa’s landmark climate strategy last week, while British Columbia’s own CO2 tax rose by a smaller C$5.

California launches offset probe into second Wisconsin-based livestock project

California regulator ARB opened an investigation on Thursday into a second Wisconsin-based livestock project for violating regulatory compliance, with more than 30,000 compliance offsets now under review.

NA Markets: California carbon edges down on spread activity, RGGI dips on few near-term drivers

California Carbon Allowance (CCA) prices dropped on the secondary market this week as entities shifted positions further out on the curve, while RGGI Allowance (RGA) values inched down despite increased trading activity.

California power emissions rise YoY in February despite declining consumption

California power sector carbon emissions increased for the second consecutive month in February, despite the Golden State seeing a reduction in total demand over this period, according to California Independent System Operator (CAISO) data released this week.

Value of US carbon allowance ETFs tops $100 mln as investor interest heats up

The combined value of the two US-listed carbon allowance ETFs has topped $100 million while daily trading volumes surge, as investors continue to swarm into the fast-growing asset class.

EMEA

Germany grants payments to close 1.5 GW of coal power output

Germany on Thursday awarded payments to shut down 1.5 GW of coal power capacity by December, marking another oversubscribed tender towards the country’s coal phaseout.

EU Market: Unmoved by 2020 emissions data, EUAs slip in quiet pre-holiday trade to notch 1.8% weekly gain

EUAs were little changed in a fairly quiet pre-holiday session on Thursday, as traders shrugged off bearish annual emissions data in expectation of further speculative bets that carbon will top last month’s record high.

VOLUNTARY

US airline JetBlue expands existing VER commitment with net zero pledge

Low-cost carrier JetBlue on Thursday announced it will reach net zero emissions by 2040, building on the airline’s existing voluntary emissions reduction (VER) pledge to offset GHGs from all domestic flights.

COMMENT

The mystery of the 2006 EUA price crash

The story goes that in 2006, the first set of verified EU ETS emissions data leaked out about a week before the due date, during the annual Carbon Expo event in Cologne. The data showed that the market was massively oversupplied in Phase 1 and the market crashed on this information. But with prices crashing well before Expo, what really happened?

AFD

Ever Given-inspired Greek startup floats carbon offset scheme from disrupted ships, planes

A new Greek startup, inspired by the beached cargo ship that briefly blocked the Suez Canal, is floating the idea of generating carbon offsets from the incident and other similar events that feature disruptions to global trade or transport, including the movement of fossil fuels.

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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

Lending shift – The World Bank is considering a new climate policy as part of a five-year action plan it is finalising. The plan stops short of promising to halt funding of fossil fuels but commits to align financing flows with the objectives of the Paris Agreement by July 2023. The bank’s sister organisations, the IFC and MIGA, will align 85% of their direct financing with the Paris Agreement by July 2023 and 100% by July 2025. (Reuters)

AMERICAS

Sprechen Sie Deutch? – Four House Democrats on Thursday reintroduced legislation to establish a national carbon tax. The bill would price carbon at $15/tonne in first year and increase the rate by $10 annually, helping to reduce emissions 45% by 2030 and attain net zero GHGs by 2050. The sponsors include Reps. Ted Deutch, Charlie Crist, Judy Chu, Anna Eshoo, and Scott Peters. (The Hill)

CES through Congress – White House National Climate Advisor Gina McCarthy on Thursday said President Joe Biden’s administration would seek to pass a national clean energy standard (CES) through Congress. Such a policy, outlined in Biden’s $2 trillion infrastructure plan released Wednesday, would require utilities to source generation from carbon-free sources to decarbonise the nation’s electricity sector by 2035. Nuclear and CCS technologies would be included in the policy, McCarthy said during a briefing with reporters. (Reuters)

On the same page – US EPA Administrator Michael Regan and Canadian Minister of Environment and Climate Change Jonathan Wilkinson on Thursday released a joint statement confirming their commitment to fight climate change. Ahead of the Apr. 22 Leaders’ Climate Summit hosted by President Biden, the US and Canada have agreed to target methane emissions from oil and gas, emissions from the transportation sector, and opportunities for clean electricity. They added the countries will engage in processes through UN body ICAO to advance a new long-term aspiration goal to decarbonise the aviation sector, as well as achieve the International Maritime Organization’s emissions target for shipping of 50% below 2008 levels by 2050.

Regan reset – Meanwhile, Regan on Wednesday ousted all members of two premier EPA advisory panels, saying that a “reset” was needed as part of a broader campaign to restore scientific integrity at the agency. Via an email Wednesday morning sent by a career EPA employee, all 49 sitting members of the Science Advisory Board and Clean Air Scientific Advisory Committee were fired, in some cases years before their current terms were scheduled to end. In a news release Thursday, EPA said the purge was intended to “reverse deficiencies” stemming from Trump administration policies such as a now-discarded ban on service by EPA grant recipients. Under those policies, the composition of both panels – traditionally made up mostly of academic researchers – came to include more members with ties to industry and views outside the scientific mainstream on climate change and other issues. (E&E News)

Not liable – A federal appeals court on Thursday rejected New York City’s effort to hold five major oil companies liable to help pay the costs of addressing harm caused by global warming. Ruling in favour of oil majors such as BP and Exxon, the 2nd US Circuit Court of Appeals in Manhattan said the regulation of GHGs should be addressed under federal law and international treaties. It rejected the city’s efforts to sue under state nuisance law for damages caused by the companies’ “admittedly legal” production and sale of fossil fuels, and said the city’s federal common law claims were displaced by the federal Clean Air Act. (Reuters)

Detroit reduction city – Michigan-based automaker Ford on Wednesday announced new science-based targets towards the country’s ambition to achieve net zero GHGs by 2050. The targets – to reduce Scope 1 and 2 GHGs operations 76% from 2017 levels, and Scope 3 GHGs from use of the company’s products 50% from 2019 levels, both by 2035 – were recently approved by the Science Based Targets Initiative (SBTi).

EV does it – The White House has directed the US EPA to study whether using renewable fuels to power electric vehicle charging should generate tradeable credits under the Renewable Fuel Standard (RFS) two sources familiar with the discussions told Reuters. The proposal could give the fledgling US electric vehicle industry a big boost because it could grant it fresh incentives and a new revenue stream. But the idea would introduce new actors like Tesla into a programme that has already bitterly divided the oil and corn industries. If the RFS were expanded to include EVs the associated credits (RINs) would come from charging the vehicle using electricity produced by a renewable source of methane, like gas siphoned from landfills or dairy operations, according to the sources.

Aiming for Aemetis – The board of directors of California-based RNG and renewable fuels company Aemetis on Thursday approved the establishment of a new subsidiary named Aemetis Carbon Capture. The company’s carbon capture business unit will initially capture, dehydrate, compress, and sequester CO2 from Aemetis Biogas anaerobic dairy digester projects to further reduce the carbon intensity (CI) of its dairy biogas, which was recently certified by California regulator ARB with a negative CI score under the Low Carbon Fuel Standard (LCFS) of -426 grams of CO2e/MJ, not including the CCS addition. The planned 52 dairies in the Aemetis Biogas projects are expected to produce approximately 1.4 mln MMBtu’s of dairy RNG and about 50,000 tonnes of CO2 each year. The Aemetis ethanol plant currently produces approximately 150,000 tCO2 annually, and the renewable jet/diesel plant under development is expected to produce 160,000 tonnes.

Fun in the Sun(cor) – Canadian midstream company Gibson Energy on Wednesday announced a long-term deal with oil producer Suncor for services at Gibson’s Edmonton-based refined product and crude oil storage terminal, including an expansion to support biofuels blending for Suncor. Gibson said additional infrastructure constructed for the Biofuels Blending Project at its Edmonton Terminal will be used to “facilitate the storage, blending, and transportation of renewable diesel” under a 25-year term contract, which will be combined with other Suncor contracts into a single master contract. The deal precedes Canada’s Clean Fuel Standard, which comes into effect in Dec. 2022. (S&P Global Platts)

IncubEx-tended family – Exchange-traded environmental product developer IncubEx on Thursday announced Robert Gordon has joined the Chicago-headquartered company as chief financial officer. Previously, Gordon served as a consultant at Bain & Company, where he worked on diligence and strategy projects primarily for private equity funds and Fortune 500 companies. Prior to Bain, Gordon held the CFO role at R2 Companies, where he oversaw the finance, operations, and lender relationships for the R2 Yield Fund, a discretionary real estate hedge fund focused on middle-market debt and equity investments.

EMEA

Here’s how you do it – The WTO will work with a number of European countries to ensure a proposed EU carbon border adjustment mechanism will respect international trade rules, the agency and French government said Thursday. French Finance Minister Bruno Le Maire and the WTO’s new leader Ngozi Okonjo-Iweala told a press conference in Geneva that they would set up a working group to examine the proposed CBAM. The plan, which is still in the early planning phases, would be aimed at shielding EU companies against cheaper imports from countries with weaker climate policies. Le Maire said the working group being set up between the WTO and a number of European countries would mull “how to ensure that this mechanism conforms with WTO rules and how to guarantee a fair transition for developing countries.” France, which takes over the EU’s rotating presidency next January, was intent on ensuring that the new mechanism “respects WTO rules”, he said. (AFP)

Amendments – South Africa’s Treasury has published draft amendments to the government’s carbon offset regulations, with the public comment period running until the end of April. Following the implementation of the Carbon Tax Act in 2019, clarification was requested on eligible electrical efficiency projects, the development of a comprehensive framework for inclusion of local standards, and the double dipping limitation on projects qualifying for the energy efficiency savings tax incentive (Section 12L of the Income Tax Act) as eligible carbon offset activities. In addition, comments were raised on the need to update definitions on the carbon offset regulations to enable cancellations from Kyoto national registries and to include crediting periods for non-agriculture, forestry, and other land use (AFOLU) VCS project activities. (Engineering News)

Walking out – Nine members of the expert group advising the EU on its sustainable finance rules have threatened to step down if Brussels pushes ahead with plans that they say would discredit its efforts to fight climate change. A leaked proposal for the rules would label as sustainable some gas plants that generate power and also provide heating or cooling. That came after the Commission’s original proposal – which denied gas-fuelled power plants a green label, following the recommendation of the bloc’s expert advisers – faced resistance from some EU countries. These nine advisers wrote to the Commission on Wednesday, saying the latest leaked proposal contradicted climate science and created reputational risks for them. (Reuters)

AND FINALLY…

Everything’s fibber in Texas – Texas officials were circulating talking points generated from a climate sceptic who blamed the state’s polar vortex-induced blackouts in February on renewable sources, according to a NBC News report. Texas Governor Greg Abbott’s chief of staff Luis Saenz and the state’s Railroad Commission, which regulates the oil and gas sector, received talking points from Alex Epstein, who authored a book entitled “The Moral Case for Fossil Fuels”. Epstein’s talking points said the Texas crisis shows wind and solar are “often useless when you need them most.” His opinions came just before Abbott and other state Republicans blamed renewable energy for the days-long blackout, despite natural gas-fired generation accounting for the bulk of offline generation. Experts said renewable energy likely only contributed minimal impacts to the crisis.

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