CP Daily: Monday May 17, 2021

Published 00:22 on May 18, 2021  /  Last updated at 00:22 on May 18, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

ANALYSIS: EU carbon price rally needs to extend, accelerate significantly for ’emergency handbrake’ intervention to even be considered

(Subscribers only) – Germany last week took the side of non-interventionists in response to the sharp rise in EU carbon allowances, putting its faith in an existing protection against market spikes written into the emissions trading system’s rules. But a Carbon Pulse analysis shows that for this ‘emergency handbrake’ clause to be triggered, the rally in EUAs would need to both accelerate and extend significantly – by greater degrees than is being mooted by experts – before prompting lawmakers to even consider stepping in.

ASIA PACIFIC

Cement up next for China ETS inclusion as govt asks industry to prepare

China’s environment ministry has asked the cement industry’s main association to prepare the sector’s entry into the national emissions trading scheme, which could happen as soon as next year.

South Korea falling behind on climate promises, should toughen ETS -report

South Korea is lagging in its efforts to meet its 2030 NDC and its promise reach net zero emissions by mid-century, according to a report released Monday that also urged the government to slash allocation levels in its emissions trading scheme to drive a quicker decarbonisation of its energy sector.

Australia Market Roundup: Coal mine earns large ACCU batch, as more financials take on climate obligations

A facility capturing and combusting methane from a coal mine in Queensland earned the biggest batch of Australian offsets in the Clean Energy Regulator’s latest issuance, while four new major financials have signed up for the Climate League.

AMERICAS

Washington governor vetoes gas tax ties in cap-and-trade, LCFS bills

Washington Governor Jay Inslee (D) on Monday vetoed provisions in carbon market and low-carbon fuel standard (LCFS) bills that tied the implementation of the programmes to passage of a higher gasoline tax, overruling a key compromise negotiated among legislators and drawing major pushback from members of both parties.

NA Markets: California carbon pushes through $20 mark on continued investor interest

California Carbon Allowance (CCA) prices surged past $20 on the benchmark contract over Monday morning, as traders said speculative demand fuelled significant day-on-day rises for the second consecutive session.

Pennsylvania says regulatory timelines could delay RGGI implementation, as committee backs proposal

Pennsylvania’s Department of Environmental Protection (DEP) added quarterly emissions caps to its proposed RGGI regulation as the agency may not be able to promulgate the rule before 2022, the agency said Monday, while an advisory committee narrowly backed the final draft of the power sector cap-and-trade programme.

EMEA

Germany’s €4.35 bln lignite compensation scheme based on “flawed assumptions” -report

Germany’s compensation scheme to support the phaseout of lignite by 2038 is based on “flawed assumptions”, including a carbon price well below what utilities will likely pay for hedging costs, according to an NGO-commissioned report released over the weekend.

EU Market: EUAs stick below €57 as observers predict further record highs ahead

EU carbon prices failed to extend their record-breaking run on Monday, but observers largely maintained their bullish stance despite this week’s jump in allowance auction volumes.

VOLUNTARY

VCM Report: VER prices tick up as supply shortage sustains

Voluntary emissions reduction (VER) prices bucked their recent downward trend this week as voluntary carbon market (VCM) participants continued to point to a lack of low-cost credits to satisfy demand.

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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

Kerry contrary – US climate envoy John Kerry has been ridiculed for saying technologies that don’t yet exist will play a huge role in stabilising the climate. Speaking on a BBC Sunday morning news programme, he said the US was leading the world on climate change – and rapidly phasing out coal-fired power stations. But he rejected a suggestion that Americans need to change their consumption patterns by, for example, eating less meat. He said: ‘I’m told by scientists that 50% of the reductions we have to make (to get to near zero emissions) by 2050 or 2045 are going to come from technologies we don’t yet have.’ This left some leading engineers aghast, with many judging that net zero can be reached with technologies currently at the demonstration or early prototype stage. (BBC)

EMEA

Moscow blow – Russian companies stand to be among the biggest losers from the EU’s proposed carbon border adjustment mechanism (CBAM) on imports, prompting accusations of protectionism from Moscow. Estimates of the potential costs vary from $3 bln a year, according to the Russian natural resources ministry, to a KPMG forecast of about $60 bln between 2022 and 2030. Many Russian companies say they are ready to reduce emissions to retain their market share, including petrochemicals firm Sibur, energy and aluminium firm EN+. (FT)

Greening the blue economy – The European Commission said it would toughen its rules on ship recycling and decommissioning offshore oil and gas sites in a set of strategic guidelines for a sustainable blue economy adopted Monday. The Commission also said it would propose legally binding targets to restore damaged EU ecosystems, targeting fish spawning areas or sites that could be used to store CO2 sucked out of the air. Brussels has already proposed a target for the 27-nation bloc to legally protect 30% of its land and sea by 2030. (Reuters)

AMERICAS

SCOTUS on scope – The Supreme Court on Monday sided with oil and gas companies in a hyper-technical procedural battle with Baltimore officials. In a 7-1 opinion, the justices agreed with BP and other companies that federal appeals courts can review the entire scope of US district court orders that toss climate cases back to the state benches where they were originally filed. While the justices agreed with the oil and gas companies on the narrow question of federal officer involvement, they rejected the firms’ request to rule that all climate liability lawsuits should automatically land in federal court. Embattled oil supermajors such as BP, Shell, and Chevron have been fighting for years to move such cases to federal venues, where state and local challengers may face a greater chance of failure. (E&E News)

AND FINALLY…

Queen’s treebilee – The UK’s Queen Elizabeth and her son Prince Charles planted a tree to mark the launch of the Queen’s Green Canopy, an initiative to celebrate the monarch’s 70 years on the throne. Three million saplings will be given away by the UK’s Woodland Trust charity to schools and community groups, coinciding with UK government plans to announce this week a trebling in domestic woodland creation rates by 2024. (The Times)

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