CP Daily: Monday April 12, 2021

Published 01:25 on April 13, 2021  /  Last updated at 01:25 on April 13, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

INTERVIEW – Making the grade: London-based startup launches carbon offset ratings service

The flourishing global voluntary carbon market is about to achieve another ‘coming of age’ milestone: its own fixed income-style ratings system.

INTERNATIONAL

Major investors BlackRock, Temasek join forces to combat climate change

Two of the world’s largest investment firms have teamed up to fund next-generation solutions to cut greenhouse gas emissions.

EMEA

EU Market: EUAs hit new record after strong auction

EU carbon prices hit a new record above €44 on Monday, extending last week’s top trade amid strong auction demand, a supportive energy complex, and bullish technical signals.

EU plans to bring shipping into carbon market must not grant free allowances -shipowners

Plans to bring shipping emissions into the EU ETS must ensure that no free emissions allowances are allocated, two national shipowner associations said in a letter on Monday.

AMERICAS

Canadian GHGs tick up in 2019 during first year of carbon pricing plan

Canadian emissions inched higher in 2019 on the back of rising Alberta GHGs and steady output from the transportation and oil and gas sectors, coinciding with the start of Ottawa’s federal ‘backstop’ CO2 levy and output-based pricing system, government data published on Monday showed.

Coronavirus pandemic, restrictions led to 11% plunge in US energy-related emissions last year

US energy-related CO2 emissions declined by double-digits in 2020 as the COVID-19 pandemic and subsequent ‘stay-at-home’ orders reduced overall power consumption and vehicle miles travelled, according to federal data released Monday.

Virginia industry groups argue numerous deficiencies should invalidate RGGI regulation

Virginia’s revised RGGI-modelled cap-and-trade rule should be invalidated because the programme represents an illegal tax, while tweaks to the regulation finalised last year failed to adhere to administrative requirements and went beyond legislative intent, according to a brief filed by an industry group last week.

Quebec shifts 2019 carbon allowances into reserve as province issues new allocation

Quebec shifted past vintage allowances into its price containment reserve and doled out additional free allocations in Q1, with the remaining Vintage 2019 volume for the province’s cap-and-trade programme to be auctioned at the May WCI sale, according to the provincial environmental ministry.

NY State Pension Fund will dump seven companies over oil sands exposure

The New York State Pension Fund will immediately divest of equity and debt associated with seven companies in its portfolio and cease new investments in companies with oil sands exposure after announcing a net zero target last year, the fund said Monday.

ASIA PACIFIC

SK Market: KAUs stoop to 5-yr low as cancellation concerns diminish value

South Korean carbon allowances fell to their lowest levels in more than five years in Monday trade as prospects of having to cancel millions of units due to the oversupply weighed on sentiment.

Australia’s power sector net zero target should rely on some gas, offsets -report

A net zero strategy for Australia’s National Electricity Market (NEM) should allow for some back-up use of natural gas that could be offset through negative emissions methodologies, according to a report released Sunday.

VOLUNTARY

VCM Report: VER prices fade to one-month low, while traders mull impacts of forestry credit review

Voluntary emission reduction (VER) prices continued a month-long descent this week as activity picked up in the futures market, while voluntary carbon market (VCM) traders pondered the impacts of US-based The Nature Conservancy undertaking an internal review of its forestry projects over additionality concerns.

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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

REDD lines – US and European officials are holding weekly online meetings, negotiating a multi-billion dollar climate deal with Brazil that observers fear could help the reelection of president Jair Bolsonaro and reward illegal forest clearance in the Amazon. Brazilian interlocutor Ricardo Salles is asking for a billion dollars a year via carbon markets and payments for ecosystem services in return for which, he says, forest clearance would be reduced by 30-40%. Sources close to the talks say if there is no bilateral deal with Brazil by April, then the US is likely to make a strong but broad statement of support for tropical forests worldwide. This would be a carrot to encourage Amazon nations to compete for funds with quantifiable reductions of deforestation. (Guardian)

Banking pledge – Former Bank of England governor and current UN climate finance envoy Mark Carney is to launch a “Glasgow Finance Alliance for Net-Zero” at the Leaders Summit on Climate being hosted by US President Joe Biden on Apr. 22-23. The alliance is expected to initially include about 30 banks pledging to reach net zero GHG emissions by 2050, according to two anonymous sources. Discussions over the terms are still ongoing, and talks have centred around whether the agreement will extend to the lenders’ financing activities, such as underwriting, as well as their own portfolios. (Bloomberg)

EMEA

ICE ban – Some 63% residents of European cities support a continent-wide ban on combustion engine car sales from 2030, according to a poll of 10,050 people, carried out for environmental campaigners T&E. The poll surveyed people last month in 15 cities including London, Warsaw, and Budapest, with citizens from all cities supporting a ban and an average of 29% opposing the idea of ending petrol and diesel car sales, while 8% said they did not know. (Reuters)

Quarter given – The share of electricity generated from renewables in the EU energy mix (39%) exceeded the share of fossil fuels (36%) in 2020 for the first time ever, according to the European Commission’s latest quarterly gas and electricity markets report. The EU consumption of both electricity (-4%) and gas (-3%) fell from 2019 levels, but consumption figures for most member states were closer to pre-pandemic levels by Q4. ETS-covered coal and lignite generation fell by 22% (-87 TWh), but gas was less affected due to its favourable price, thereby supporting coal-to-gas and lignite-to-gas switching. Solar and wind capacity additions in 2020 were comparable to 2019 levels, showing the pandemic did not significantly slow down renewable expansion. Furthermore, as the outlook for emission-intensive technologies worsens and carbon prices rise, more and more early coal retirements have been announced. In recent months, more expensive EUAs, along with rising gas prices, have driven up wholesale electricity prices on many European markets to levels last seen at the beginning of 2019. The effect was most pronounced in member states dependent on coal and lignite. The wholesale electricity prices dynamic is expected to filter through to retail prices.

Flew through – French lawmakers voted late on Saturday to abolish ETS-covered domestic flights on routes than can be covered by train in under 2.5 hours, endorsing a January draft bill that watered down the measure from a four-hour train journey limit in an interim vote that still needs to be signed off by the upper house of parliament, RFI reported. Read Carbon Pulse’s report on the draft bill, which also requires a phased-in offset requirement for all other domestic flights.

Hydrogen call – The European Commission has launched an invitation to members of the cross-stakeholder European Clean Hydrogen Alliance to submit projects for renewable and low-carbon hydrogen technologies and solutions, aiming to make good on its EU-wide Strategy to install 6 GW of renewable hydrogen electrolysers and produce up to 1 mln tonnes of renewable hydrogen by 2024. The deadline for submitting projects is May 7, while the next Hydrogen Forum meeting on June 17-18 will review the projects and provide opportunities for matchmaking.

Steel surcharge – Tata Steel Europe is introducing a €12/tonne surcharge for all new steel contracts in the UK and Europe with immediate effect to help buy its required EUAs, Argus reported, without saying where it got the information. The surcharge comes amid a current tightness in the steel market, with Argus’ benchmark northwest EU hot-rolled coil index rising to €901/t on Apr. 9 from €384.50 on June 26 last year. Argus said some buyers have already accepted the surcharge, although they have little choice given the lack of alternatives in the marketplace, with other steel mills likely to follow suit.

AMERICAS

All else Equal-nor – Norway’s Equinor has decided to stay in the American Petroleum Institute (API) after the major US oil lobby group changed its stance on climate policy. In a report dated Mar. 2021, Equinor said it had completed an annual review of industry groups’ climate policy alignment with the Paris Agreement to limit global warming to 2C and the company’s goal to be net zero by 2050. While last year Equinor said it found “some misalignments” with the API on climate policy, following API’s commitment to endorse the Paris Agreement’s ambitions, work with the US administration, and back a carbon price policy, Equinor said it would remain a member of API. (Reuters)

Not stopping – The Biden administration said Friday it doesn’t plan to stop the Dakota Access Pipeline from operating while it undergoes a new environmental review. That leaves Judge James Boasberg of the US District Court for the District of Columbia to decide on whether to shut down the pipeline’s operations during the review – a ruling that could come as soon as late this month. The pipeline’s operator has until next Monday to update its filings with the latest estimates of the economic consequences of closing the pipeline – a key element in Boasberg’s decision making. The Native American tribes suing to stop the pipeline will then have until Apr. 23 to respond to the operator. Afterward, Boasberg said he will issue his ruling. (Politico)

ASIA PACIFIC

Kiwi law – New Zealand has become the first country to introduce a law that will require banks, insurers and investment managers to report the impacts of climate change on their business, minister for climate change James Shaw said on Tuesday. All banks with total assets of more than NZ$1 bln ($703 mln), insurers with more than NZ$1 bln in total AUM, and all equity and debt issuers listed on the country’s stock exchange will have to make disclosures. The bill, which has been introduced to the country’s parliament and is expected to receive its first reading this week, will require around 200 of the country’s biggest companies and several foreign firms that meet the threshold to explain how they would manage climate-related risks and opportunities. (Reuters)

AND FINALLY…

Greta gone – Climate activist Greta Thunberg does not plan to attend the COP26 UN climate summit and thinks the once-postponed annual talks planned for November in Glasgow should be delayed again if every expectant attendee cannot be vaccinated against the coronavirus, to ensure all can take part on the same terms. “Inequality and climate injustice is already the heart of the climate crisis … If people can’t be vaccinated and travel to be represented equally, that’s undemocratic and would worsen the problem,” she said. The UK intends to host the event but is yet to decide the extent to which it should be an in-person meeting. (BBC)

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