CP Daily: Wednesday May 19, 2021

Published 00:25 on May 20, 2021  /  Last updated at 00:29 on May 20, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

European markets: EUAs, UKAs tumble as market absorbs first British ETS auction

EUAs tumbled by as much as 8.4% on massive volume Wednesday, extending the previous session’s 7% plunge, while UKA futures also fell during their first trading day as Europe’s carbon markets remained wary over increased supply and speculative profit-taking.

ASIA PACIFIC

China releases trading, registry rules to finalise ETS puzzle

China’s environment ministry on Wednesday released rules for registry, trading, and settlement under its national carbon market, the last piece of the ETS puzzle, though important details were left for the exchange to complete.

Mitsui acquires Australian carbon offset project developer

Mitsui & Co’s Australian subsidiary has acquired an offset developer in order to launch a carbon solution business in the country, the company announced Wednesday.

Australia’s GreenCollar Group buys offsetting retailer platform

Australia’s biggest carbon project developer has acquired a start-up that offers customers the opportunity to offset their greenhouse gas emissions, the company announced Wednesday.

AMERICAS

Washington legislators mull options after partial vetoes of climate bills, as WCI link uncertain

Washington legislators are exploring ways to reverse Governor Jay Inslee’s (D) partial vetoes of their carbon market and low-carbon fuel standard (LCFS) bills, while regulatory experts believe future prospects for a WCI cap-and-trade link could hinge how the final rules are drafted.

Analysts elevate WCI price outlook on booming speculator interest

California Carbon Allowance (CCA) prices will accelerate over the coming decade due to greater speculative involvement in the linked WCI cap-and-trade programme, analysts said Wednesday.

Federal court vacates Trump administration’s last minute biofuel waivers

A US federal court on Wednesday nixed three Renewable Fuel Standard (RFS) compliance waivers handed out in the final hours of President Donald Trump’s tenure, as judges ruled that the EPA did not analyse necessary legal questions in handing out the relief.

EMEA

Ukraine should gradually raise its carbon tax to avoid EU’s border measures -expert group

Ukraine should gradually raise its national CO2 tax to avoid the effects of the EU’s planned carbon border adjustment mechanism (CBAM) while it prepares its national carbon market, an expert group said in a report presented Wednesday.

EU lawmakers adopt stance on green hydrogen, keeping gas as a possibility

MEPs adopted a position on the EU’s Hydrogen Strategy on Wednesday, emphasising support for renewables-derived hydrogen but also leaving the door open for production from gas.

ICYM

UK carbon market expected to open near EU ETS levels, though experts fear patchy trade 

Carbon allowances in the new UK ETS are expected to trade in line or at a slight discount to their EU counterparts from the launch of trade on Wednesday, though concerns over liquidity and market design is leading some experts to believe UKA prices could surpass those on the continent in the coming months.

BRIEFING: A guide to the UK ETS

(Subscribers only) – The UK’s new emissions trading scheme kicks off on Wednesday with the first allowance auction, with the market modelled after the EU ETS to facilitate a future linkage. Here’s a quick guide outlining its design and how it differs from its European counterpart.

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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

Follow This resolution – Nearly 89% of shareholders at Shell’s annual investor meeting on Tuesday voted in favour of the oil and gas company’s strategy to achieve a net zero emissions business by 2050, the FT reports. Despite this success, the firm is also “confronted by growing support for activists’ demands to set more ambitious targets”. A separate resolution by Dutch shareholder activist group Follow This calling for Shell to set more “inspirational” targets attracted the support of 30% of shareholders, although such resolutions require 75% to pass. (Carbon Brief)

AMERICAS

Tegucigalpa calling – Honduras has updated its original Paris Agreement NDC, pledging to cut GHG emissions 16% below BAU levels of 28.945 Mt in 2030. That’s slightly up on the 15% cut beneath BAU of 28.922 Mt in the 2016 version. The contribution still excludes land use emissions due to ongoing struggles in updating forest reference levels, but the government has promised to include these in its second NDC. Check Carbon Pulse’s NDC Tracker for an overview of the previously-submitted and updated Paris pledges.

Kuperberg comeback – The White House said Wednesday morning that veteran climate scientist Mike Kuperberg is returning as head of the US Global Change Research Program (USGCRP) following his removal from the position under President Donald Trump. He’ll oversee the creation of the fifth version of the congressionally mandated National Climate Assessment that’s slated for release by the end of 2023 but may slip. Kuperberg, who has been with the Energy Department for nearly two decades, led USGCRP for five years until last year. Trump had replaced him with David Legates, a meteorologist who disputes the scientific consensus on human-induced warming. (Axios)

EMEA

Tenant troubles – German Conservative CDU/CSU parliamentarians and members of the Bundesrat upper house have announced their opposition to government plans for tenants and landlords to share the burden of extra heating costs caused by the nEHS carbon price on buildings and transport. The Bundesrat housing committee demanded that the effects on investments in the building stock should be critically examined. Both the federal parliament and the Bundesrat need to pass the amendment proposed by the cabinet but criticism of the current compromise may prompt the government to re-examine the issue. (Clean Energy Wire)

Gulf capture – Swiss-based direct air capture firm Climeworks has partnered with Oman renewables company 44.01. The two firms will explore the potential for permanent CO2 storage in the Middle East nation’s unique peridotite rock formations.

Stripping down ali – Russian aluminium producer Rusal has said will demerge its higher carbon assets – representing a little less than half of its capacity – into a separate company as part of its goal to achieve carbon neutrality by 2050 and change its own name to AL+ as part of the process. (Reuters)

AND FINALLY…

Good luck with that – The conservative-backed Alliance for Market Solutions is launching a new advocacy campaign, funded in part through a high six-figure investment from Dow Chemical and Exxon Mobil, in hopes of getting Republicans in the US Congress on board with a carbon price. “The corporate commitment to carbon pricing is real,” Alex Flint, the group’s executive director, told Politico. “This is no longer a policy philosophy discussion. It’s becoming real and companies prefer carbon pricing.” Meanwhile, though, despite the business community’s more vocal embrace of carbon pricing, Republican Whip Steve Scalise and Rep. David McKinley (R) offered a resolution on Tuesday opposing a carbon price. The resolution has passed under Republican control previously.

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