CP Daily: Monday May 10, 2021

Published 01:11 on May 11, 2021  /  Last updated at 01:11 on May 11, 2021  /  Newsletter  /  No Comments

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

*Please note the changes to our Job Listings, including amendments to the terms and prices. Starting May 10, ALL job listings on our website will appear in front of the paywall and will be visible to both Carbon Pulse paid subscribers and non-subscribers for the minimum 4 weeks that they are live. Premium (paid) listings will now be featured in our newsletter on a daily basis, while new Standard (free) listings will continue to appear only on Monday/Tuesday after posting. Premium jobs will also continue to receive priority positioning on our website over Standard roles.*

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TOP STORIES

UK govt slashes free carbon permit allocation to heavy industry ahead of ETS launch

The UK government appears to have slashed by over 30% the number of allowances it will freely allocate to industry this year under its new emissions trading scheme.

COMMENT: The next ETS arriving at Platform 4…

Now that EU ETS compliance is over with for another year, the market can metaphorically wash its hands and move on to the next course of this never-ending feast of carbon: the start of the UK ETS. The world’s newest carbon market is set to kick off, with both the inaugural free allocation and first auctions imminent. But where will UKAs price?

VOLUNTARY

VCM Report: VER values hold as cheap credit supply “dries up”

Voluntary emissions reduction (VER) prices remained steady this week even as traders observed a dwindling supply of low-cost offsets, while voluntary carbon market (VCM) participants pointed out heightened interest for ex-ante, forestry-based removals credits.

EMEA

EU Market: EUAs climb above €52 as investor inflows help boost sentiment

EUAs rose to a new record above €52 on Monday, amid signs of further investor buying and seemingly low prospects for market intervention.

EU Climate Law clears another hurdle in MEP committee vote to final ratification

Lawmakers in the European Parliament’s environment committee (ENVI) on Monday adopted the final version of European Climate Law to set the EU’s net zero objective into national legislation, the second-to-last hurdle to its final ratification.

Higher EU carbon prices spur abatement efforts, competitiveness fears -survey

The EU carbon market is an ever more important driver of emissions cuts, but soaring allowance prices are also increasing participants’ anxiety over competitiveness, according to a survey published Monday.

Netherlands supports large-scale CCS project with contract-for-difference scheme

The Netherlands has awarded €2 bln to an offshore CCS project that public institutions say is “absolutely necessary” to reach the country’s climate goals, with the money to be channelled through a carbon contracts for difference (CCfDs) scheme.

UK appeals court orders retrial in £60 mln EU carbon market tax fraud case

A UK court of appeal has ordered a retrial in a £60 million tax fraud case linked to the EU carbon market after it questioned the ruling judge’s findings following an “inexcusable” delay between the trial and the verdict.

AMERICAS

Virginia, green groups rebuke industry group’s RGGI challenge as meritless, nonsensical

Virginia’s Department of Environmental Quality (DEQ) argued a legal challenge against the agency’s RGGI regulation is nonsensical or inaccurate, while an intervening green group said the industry association bringing forward the suit fashioned meritless claims in an attempt to void the power sector cap-and-trade scheme.

RFS Market: RIN prices briefly notch new highs after Colonial Pipeline hack

US biofuel credit prices (RINs) continued their torrid spring stretch on Monday after the Colonial Pipeline was hacked over the weekend, disrupting a major source of refined fuel products for the eastern part of the country.

ASIA PACIFIC

NZ Market: NZUs slip to three-week low amid FPO’s last dance

New Zealand carbon allowances have slid to a three-week low as demand slumps in the run-up to the May 31 compliance deadline, emitters’ last ever chance to take advantage of the fixed price option (FPO).

Australia Market Roundup: Terra Carbon takes lion’s share of new ACCUs, govt prolongs crediting for some waste projects

Developer Terra Carbon received the largest share of some 300,000 new carbon credits handed out by the Clean Energy Regulator over the past week, while the government has added five years to the ACCU crediting period for some landfill gas projects.

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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

Standard hypocrite – Standard Chartered has been accused of hypocrisy on climate change by an influential pressure group, which warned the bank will be the target of shareholder action unless it tightens its fossil fuel lending policies. Market Forces, an activist environmental group that has led shareholder resolutions at Barclays and Rio Tinto, raised doubts about StanChart’s public commitments to the Paris Agreement in light of its continued financing of big carbon emitters. The group said StanChart recently participated in a $400 mln, five-year syndicated loan to Indonesian coal miner Adaro Energy. This was despite the bank’s own internal calculations showing Adaro’s contribution to global warming was plainly incompatible with Paris, it said. StanChart said it was “developing an advisory resolution for our 2022 AGM to support dialogue on our net zero plans” and “looks forward to engaging with all investors on our plans”. StanChart, which is also a leading force on the Taskforce on Scaling Voluntary Carbon Markets, declined to comment to the FT on Adaro. According to a recent report from Reclaim Finance and Urgewald, two non-profits focused on climate issues, StanChart provided more than $10 bln in financing to coal companies in the two years to Oct. 2020. The bank is ranked as the biggest backer among UK lenders of coal power expansion activities, largely owing to its significant business interests in Asia. A separate report from the Rainforest Action Network found the bank had pumped more than $30 bln into the fossil fuel industry since the Paris agreement was signed.

Big business – Carbon emissions trading at Vitol Group soared 61% in 2020 as the world’s biggest independent oil trader embraced the red-hot pollution market. Vitol traded 106 Mt of CO2e in 2020, the Rotterdam-based company disclosed in its first-ever ESG report. That compares with 66 Mt in 2019, a Vitol spokeswoman told Bloomberg. “We expect the number of compliance carbon markets to increase with major new markets such as China, Colombia and South Africa emerging,” the report said. “Vitol’s role will be to transfer surpluses to deficit markets in the most efficient way.” The world’s biggest commodity traders are piling back into trading voluntary and regulated carbon offsets as emissions prices march steadily higher and investors focus on a shift to greener fuels. The market has also been increasingly driven by financial speculators betting on increased demand from tighter climate goals. Bloomberg reported last year that Vitol was bulking up its power trading desks as part of the shift and it’s also added more traders to buy and sell carbon.  Vitol also disclosed its Scope 1-3 GHG emissions for the first time. Scope 1 rose 14% from 2019 to 1.26 Mt, Scope 2 rose 16% to 21,000 tonnes, and Scope 3 was up 9% to 7.44 Mt.

AMERICAS

Conservation consternation – A new article from ProPublica calls into question the additionality of compliance-based forest carbon offsets generated by conservation organisation Massachusetts Audubon Society. The piece cites recent research from non-profit CarbonPlan that most California Carbon Offset (CCO) project developers approach the logging floor set by state regulator ARB in the WCI-linked cap-and-trade programme’s forestry protocol. It found that nearly 90% of the 65 CCO forestry projects analysed cited future logging possibilities that fell less than 5% above the floor, and Mass Audubon’s scenario was even closer, at 0.2%. When asked whether the nonprofit intended to log to the levels laid out in the documents, an official from Mass Audubon did not directly answer.

Development down-low – The US International Development Finance Corp. (DFC) on Monday announced its first “chief climate officer” and his deputy as the development bank looks to use billions in financing tools to help combat global warming. The chief climate officer is Jake Levine, an energy and climate expert who arrives via the law firm Covington & Burling. He’s previously advised California officials, worked for the power software company Opower, and served in President Obama’s White House. The development bank also announced Aparna Shrivastava, who comes from her role as climate finance lead for the NGO Mercy Corps, as deputy chief climate officer. (Axios)

For the benefit of Bitcoin – Ninepoint Partners is the latest firm seeking to neutralise its Bitcoin ETF’s carbon footprint by dedicating a portion of its management fee to buy offsets. “For some investors who are concerned about the carbon footprint of mining, they may be wary of investing in a Bitcoin ETF,” said Alex Tapscott, managing director of digital assets at the Toronto-based firm, referring to the vast array of computers worldwide that compete to confirm Bitcoin transactions. Ninepoint, which has about $6.5 bln in AUM and institutional contracts, is partnering with environmental software fintech-firm CarbonX to purchase credits and support forest conservation projects. It’s also working with the Crypto Carbon Ratings Institute, which together with CarbonX will provide carbon footprint analysis. Ninepoint didn’t disclose how much of the management fee would be contributed. The effort comes as critics say Bitcoin’s environmental record has worsened while its price has skyrocketed. Bank of America, for instance, said recently the energy used by the network of computers that power the digital coin is comparable to that of many developed countries and rivals the emissions from major fossil-fuel users and producers. (Bloomberg)

Season finale – In the final episode of season 1, the hosts of Yale University’s Pricing Nature podcast talk about the future of progressive climate policy. They speak with Michael Mendez (Assistant Professor at UC-Irvine, author of Climate Change from the Streets), Danny Cullenward (energy economist and lawyer at Stanford, author of Making Climate Policy Work), Keya Chatterjee (Executive Director of US Climate Action Network), and David Roberts (author of the Volts Newsletter), to understand what kind of climate policy progressives favour. Listen/subscribe here

EMEA

Vote for us – Germany’s Social Democratic Party (SPD) has adopted stricter climate targets as part of its federal election platform. The SPD, part of Germany’s ruling coalition with Chancellor Angela Merkel’s conservative CDU/CSU alliance, agreed to the goal of making Germany climate-neutral by 2045 at the latest, rejecting a call to adopt a 2040 climate-neutral target. The SPD also agreed to support a reduction in GHGs by 2030 of 65% below 1990 levels. The party also does not rule out a coal phase-out before the established target year of 2038. SPD leaders also attacked the CDU, CSU, and Green Party for what they see as deficiencies in their climate policies. Germany will head to the polls on Sep. 26. The Green Party has been leading national polls in recent days, surpassing the conservative CDU/CSU bloc and with SPD in third. (Clean Energy Wire)

Pro protest – Thousands of demonstrators took to the streets of Paris and other French cities on Sunday to call for more ambitious measures in the fight against climate change, AP reports. The nationwide protests come after the lower house of parliament last week approved a climate bill aimed at curbing GHG emissions that environment activists say doesn’t go far or fast enough. The activists are angry about the law weakening a set of measures initially proposed a citizens panel. Read Carbon Pulse’s report on key aspects of the bill including domestic flight offsetting.

Power v gas – The UK government is set to announce within weeks that electricity bills could be slashed to help persuade homeowners to abandon gas boilers by 2035. The government wants heat pumps to replace 600,000 gas boilers every year from 2028, and will announce policy costs will be removed from electricity in the coming years in its upcoming heat and buildings strategy.  A consultation will decide how much of the 23% of policy costs will be removed from electricity and recouped elsewhere, with options including transferring the levies directly to gas bills, or adding them to general taxation. (Daily Telegraph)

Make em’ pay – Greece has declared it wants the EU to make charterers liable when it includes shipping in its ETS. The country’s Shipping and Island Policy Minister, Ioannis Plakiotakis, in a letter to the European Commission, says the “polluter pays” principle should apply. Expressing the concerns of the Greek shipping industry regarding the intentions of the European Commission, Plakiotakis said he backs the creation of a special European Fund under the EU ETS to help fund the sector’s decarbonisation. Greece’s proposal to make ships’ commercial operators pay for carbon units is in line with the position taken by the Union of Greek Shipowners. (Seatrade Maritime News)

ASIA PACIFIC

PLN pledge – Indonesia’s state-owned electricity company PLN has pledged to become carbon neutral by 2050 with a plan to phase out fossil fuel-fired power plants and use more renewable energy in its networks. The firm is the country’s largest electricity generator. PLN president director Zulkifli Zaini said the firm was planning to develop new solar and wind installations, mix biomass with coal in existing plants, and convert diesel-fired power plants to renewables. Since 2015, PLN has been building new power plants to produce a combined 35 GW – 60% of which are coal-fired. (Jakarta Post)

AND FINALLY…

… And we’ll keep on polluting till the end – An executive of one of Canada’s largest oil companies has been named a “climate champion” by the UK government to mark six months to the COP26 climate talks in November. A statement published on the UK government’s website said 26 “Canadian climate champions” had been identified “as exceptional individuals actively working to move Canada to net zero emissions”. The “champions” were selected by the Canada Climate Law Initiative (CCLI), a research initiative based out of the University of British Columbia, with input from the British High Commission in Ottawa. The list was revealed during a livestream event co-hosted by CCLI and the British High Commission last week – six months ahead of the start of the climate talks in Glasgow. Martha Hall Findlay, chief sustainability officer at Suncor, a company which produces crude oil from tar sands, made the list of people awarded with the title. Suncor is one of Canada’s largest integrated energy companies and is expanding its oil production. The company has pledged to reduce the emission intensity of its oil production by 30% by 2030 but made no commitment to cut its emissions in absolute terms. Suncor CEO Mark Little is a governor on the board of the Canadian Association of Petroleum Producers (CAPP), which has repeatedly opposed climate policy and lobbied to weaken Canada’s carbon tax on the oil sector. (Climate Home)

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