CP Daily: Friday May 7, 2021

Published 00:45 on May 8, 2021  /  Last updated at 00:45 on May 8, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

EXCLUSIVE: Swedish miner sues Brussels over carbon allocation benchmarks

Swedish miner LKAB has filed a lawsuit against the European Commission over new benchmarks used to determine the free allocation of carbon allowances for steelmaking, according to documents seen by Carbon Pulse on Friday.

EMEA

Brussels should be “very careful not to intervene” in EU carbon market, says Commission’s climate chief

The European Commission should be “very careful not to intervene” in the EU ETS amid the recent speculator-led rally that has brought allowance prices to a record above €50 this week, the bloc’s climate chief said Friday.

EU Market: EUAs jump to new high above €51 as EC climate chief allays intervention fears, flags need for higher prices

EU carbon hit a record above €51 on Friday amid signs of continued investor inflows and as Europe’s climate chief played down prospects of market intervention over soaring EUAs, while calling for even higher prices.

Major European airlines struggle to recover from pre-COVID levels in Q1

Two of Europe’s major airline groups have flagged difficulties in recovering from the COVID-19 crisis in Q1 2021, but expect demand to ramp up in the coming quarters as lockdown restrictions ease and vaccination rates accelerate.

European Commission publishes another year’s worth of EU ETS trading records

The European Commission this week published another year’s worth of trading records from the EU ETS emissions registry, offering a comprehensive glimpse of how carbon units equivalent to over 9.3 billion tonnes of CO2 were shifted across more than 30,000 transactions between May 2017 and Apr. 2018.

INTERNATIONAL

Singapore, Japan ministers to steer Article 6 talks ahead of July meeting

Singapore and Japan will steer international emissions trade talks on the Paris Agreement’s Article 6 rulebook through a July ministerial-level meeting, according to Alok Sharma, President of the COP26 UN climate negotiations.

AMERICAS

Stakeholders seek changes to TCI carbon market, as industry calls CO2 goals “pipe dream”

Stakeholders are advocating for a variety of technical tweaks to the Transportation & Climate Initiative Programme’s (TCI-P) draft cap-and-trade regulation, while industry groups claimed the four participating US jurisdictions’ CO2 reduction goals were unachievable.

California power emissions rise YoY in March, as Q1 output continues to outpace 2020

California power sector emissions increased for the third consecutive month in March as electricity demand rose across the Golden State, according to California Independent System Operator (CAISO) data released this week.

WCI emitters, speculators add length as allowance prices continue bull run

WCI compliance entities and speculators added length in the California Carbon Allowance (CCA) market this week as prices continued on a bull run fuelled by increased financial interest and rising 2022 floor outlooks, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

Value of US-listed carbon allowance ETFs tops $250 mln on accelerating investor interest

The combined value of the two US-listed carbon allowance ETFs has topped a quarter billion dollars as investor cash continues to flood in.

US Carbon Pricing and LCFS Roundup for week ending May 7, 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 developments in California, New York, and Virginia.

VOLUNTARY

Mitsubishi, South Pole to set up carbon removal purchase facility

Japanese conglomerate Mitsubishi and Switzerland-headquartered developer South Pole are planning a facility to assist companies in purchasing $300-800 million worth of carbon removals offsets a year.

Norway’s Yara targets $23/tonne for agriculture-based VERs in new global alliance

Norwegian fertiliser company Yara launched a new business on Friday aimed at generating voluntary emissions reductions (VERs) from farmlands worldwide at upwards of $20 per tonne, adding to the spate of agriculture-focused carbon programmes unveiled in the past year.

UK environment agency rates domestic offsetting methods

The UK’s Environment Agency has rated domestic offsetting methods, attempting to form preferences for meeting its own net zero emissions goal and potentially setting a useful precedent for how other entities can follow.

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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.

EMEA

Fuel fall  – EU CO2 emissions from fossil fuels use fell 10% in 2020 due to crippling coronavirus restrictions, according to the bloc’s statistics agency Eurostat. It said oil consumption fell in almost all member states, gas consumption fell in 15 countries, while renewable power production rose considerably. Greece had the largest decrease (-18.7%), with the lowest occuring in Malta (-1.0%) and Hungary (-1.7%). The emissions include those covered by the EU ETS – which saw its emissions drop 13.3% last year – but also other sources, including transport and buildings.

ASIA PACIFIC

Under pressure – Australia is coming under increased international pressure to boost its near-term climate targets and commit to net zero by 2050. The country was invited to this week’s G7 Plus meeting so that it could hear climate change be addressed, a UK government official told the Sydney Morning Herald. Foreign Minister Marisa Payne was told all OECD countries are expected to have set net zero goals by this November’s COP.

Twenty-four on the floor – Australian investment bank Macquarie has signalled that it will stop financing coal projects by 2024, FT reports, in what the paper described as “a symbolic move that coincided with a bitter political debate in Australia over banks’ withdrawal from the sector”. The bank on Friday said that it expected its lending exposure to coal to “run off” within three years as it outlined a climate policy to align its financing activities with global commitments to achieve net zero emissions by 2050, adding that Macquarie “will continue to fund oil and gas developments”. The bank’s exposure to coal “fell to just A$100 mln ($77.8 mln) in the financial year that ended in March, about half of what it was the previous year”, the paper noted. (Carbon Brief)

Manila drafting – The Asian Development Bank will no longer finance coal mining or oil and natural gas activities, it announced in a draft policy statement. The multilateral development bank provided no timeline for its commitment, but laid out conditions under which fossil fuel projects would continue to receive funding, such as where no other cost-effective technology was available. The draft is due to deliberated by its board of directors in October. (Reuters)

AMERICAS

CCUS consideration – Canadian gas pipeline company Enbridge revealed during its Q1 earnings call that it has proposed a CCUS pipeline project to potential customers in northern Alberta. The project would be bigger than the existing Alberta Carbon Trunk Line in central Alberta that has capacity to transport 14.6 MtCO2 per year from industrial sites for enhanced oil recovery, and is one of many similar proposals Enbridge is pursuing. An Enbridge official said the profitability of CCUS projects is “challenged” but that could change as the Canadian government reveals details of investment tax credits for carbon capture it unveiled in its recent budget. (BNN Bloomberg)

Twin-twin situation – A divided Minneapolis Park Board voted to work with the non-profit group Green Minneapolis to create the Twin Cities’ first tree-planting carbon offset programme. Green Minneapolis Board Chair David Wilson has asked Minneapolis’ Sustainability Office for $2.25 mln of federal COVID-19 relief funds to set up a one-year pilot. The Park Board will receive $2 mln to hire a forestry crew to plant 7,000 trees in 2022, focusing on economically disadvantaged areas with less tree canopy than the rest of the city, such as northeast and north Minneapolis. The remaining $250,000 would establish a process for monitoring the tree planting, certifying credits with the non-profit carbon registry City Forest Credits, and developing a marketplace of Minnesota businesses to be credit buyers. (Star Tribune)

VOLUNTARY

I am what LATAM – South American air carrier LATAM Group this week announced it will purchase voluntary emissions reductions (VERs) for 50% of its GHG output by 2030, en route to achieving carbon neutrality by mid-century. LATAM said it will partner with US green group The Nature Conservancy to identify conservation projects in several ecosystems, including the Amazon, Atlantic forest, and El Cerrado. According to the company’s 2020 integrated report, LATAM’s emissions totalled nearly 5.7 Mt in 2020 – less than half of the 2019 total – though it only purchased 143,000 VERs for its Colombian operations last year due to the impact of the COVID-19 pandemic.

AND FINALLY…

WYne of the times – Wyoming is faced by a transition to renewable energy that’s gathering pace across the US, but it has now come up with a novel and controversial plan to protect its mining industry – sue other states that refuse to take its coal. A new state law has created a $1.2 mln fund to be used by Wyoming’s governor to take legal action against other states that opt to power themselves with clean energy such as solar and wind, rather than burn Wyoming’s coal. Wyoming is America’s largest coal-producing state, digging up nearly 40% of the coal produced nationally each year. The state is heavily dependent upon revenues from mining to run basic services and as it produces 14 times more energy than it consumes, selling coal to other states is a vital source of income. (Guardian)

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