CP Daily: Thursday May 27, 2021

Published 01:16 on May 28, 2021  /  Last updated at 01:18 on May 28, 2021  /  Newsletter  /  No Comments

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

***Due to public holidays in the UK and US, CP Daily will not be published on Monday, May 31***

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TOP STORY

WCI current vintage auction settlement hits all-time high, as speculators procure largest ever share

The California-Quebec Q2 auction settled underneath the secondary market level as speculators purchased their largest share ever, while the current auction clearing price notched an all-time high and landed on the upper end of market expectations, according to results published Thursday.

EMEA

EU capitals give green light to financing pandemic recovery fund with carbon revenues

The 27-nation EU’s capitals are on track to ratify by the end of the month a bill that would allow for carbon pricing-generated revenues to pay back the €800 billion COVID-19 recovery fund, with only two countries left to ratify the decision.

Euro Markets: EUAs lose further ground amid falling energy, pause in investor inflows

EUAs dropped 3.4% to below €52 on Thursday, with carbon weighed down by weaker energy markets and a perceived tailing off of investor buying.

AMERICAS

California’s ARB nixes offsets from a second Wisconsin-based livestock project

California regulator ARB invalidated compliance offsets from a Wisconsin-based livestock project on Wednesday that the agency found to be in violation of state environmental regulations, marking the fourth project to see credits voided under the WCI-linked cap-and-trade programme.

NA Markets: CCA prices rise before Q2 auction results, RGGI dips on thin volume

California Carbon Allowance (CCA) prices climbed on thin secondary market volume as entities awaited the Q2 WCI auction results, while RGGI Allowances (RGAs) sank to $8 ahead of the programme’s own quarterly sale next week.

LCFS Market: California prices bubble up to two-month high

California Low Carbon Fuel Standard (LCFS) values crossed the $190 mark this week as some pointed to higher fuel demand and state regulator ARB’s revisions to the crude average carbon intensity under the transportation sector programme.

INTERNATIONAL

Switzerland to sign next Paris-era carbon offset deal with Senegal -official

Switzerland will soon announce its third bilateral deal under the Paris Agreement’s Article 6 to purchase carbon offsets from Senegal and is undertaking formal and informal discussions with a host of other countries on future arrangements, an official from the European country’s credit procurement agency said Thursday.

VOLUNTARY

Stripe to pay up to $2,050/t in second round of CO2 removal purchases

Online payment processing company Stripe on Wednesday selected six more early-stage CO2 removal (CDR) projects as part of its climate programme, with some of these nascent technologies costing over $2,000 per tonne.

ASIA PACIFIC

China’s Fujian province hands out 1.7 mln forest carbon credits

The Fujian provincial government has issued over 1.7 million forestry-based offsets to boost supply in the local pilot ETS as well as in China’s fledgling voluntary carbon market.

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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

Green allies – The EU and Japan announced on Thursday their intention to form a ‘Green Alliance’ to accelerate the transition of both economies towards becoming climate neutral. The pair has committed to collaborate on renewables, green hydrogen, energy storage, and CCUS; to strengthen environmental protection and increase regulatory cooperation and business exchange; and to maintain leadership on international sustainable finance. The two partners also agreed to work together closely on the international stage to promote cooperation on climate action in developing countries.

Interim NDC – Nigeria on Thursday submitted an ‘interim’ updated NDC to the Paris Agreement, pending an endorsement by its Federal Executive Council. The new NDC contains the same target as its previous submission, consisting of a 20% unconditional reduction below BAU by 2030 and a 45% unconditional target, but the Nigerian government has updated information relative to historical emissions and GHG projections. Check Carbon Pulse’s NDC Tracker for an overview of the previously-submitted and updated Paris pledges.

EMEA

Jetset bill-y – Carbon emissions from private jet flights rose by 31% from 2005-19 and had rebounded to pre-pandemic levels by August 2020 when 60% of public flights were grounded, according to a report by green group T&E reported by The Guardian. It calls for matching Switzerland’s approved scheme where wealthy fliers pay ticket taxes of €325 mln a year to fund the acceleration of zero-carbon aviation. It found that private jets were 5-14 times more polluting per passenger than commercial planes, though the absolute emissions are still a small proportion, with the 2005-19 European total emissions estimated at between 2.1-2.5 MtCO2, around 10% of the pandemic-impacted 2020 aviation ETS total.

Like father, like son – Britain’s former trade minister Liam Fox and Prime Minister Boris Johnson’s dad Stanley have called for a carbon border tax to help protect businesses against cheaper imports from countries with less strict climate policies. Pressure to implement such a measure is reportedly growing within the Conservative party, the FT reports. Fox, trade minister from 2016-19, spoke ahead of a meeting of the world’s seven largest advanced economies in Britain next month, and he outlined his tax proposal in a speech to the Centre for Policy Studies on Thursday. “For UK and European business, there is an increasing view that the carbon price is now so high it is making them uncompetitive in a global context,” he said. “Why should they be taking measures to reduce their carbon footprint while high-polluting countries can sell into their markets without these costs.” Johnson Sr. compared the matter to a COVID vaccine certificate, arguing that countries around the world must agree to stricter standards or face crippling tariffs. “I am perfectly convinced the PM is seized by the absolute logic of the carbon border tax,” he told The Sun. “China can’t expect to continue to export goods which they’ve made using mainly coal – it totally undermines us if we’re getting imports from other countries which haven’t got the same kinds of systems we have … The logic for a carbon border tax is irrefutable.” Britain has a target of reaching net zero emissions by 2050 and last week launched a domestic ETS. (Euractiv)

Your turn – The upcoming overhaul of EU renewable energy regulations due on July 14 will include measures targeting transport and industry, the bloc’s energy policy chief Kadri Simson said on Wednesday. “The pace of renewables uptake is not where it should be, so we are looking at setting an indicative target for renewables in this sector,” Simson said of industry, which is not currently covered by EU renewable energy policies. The EU is on track to get roughly 33% of its energy from renewables by 2030, against an existing 32% goal. However, that will need raising to hit the EU’s new climate target, to cut GHGs at least 55% by 2030 from 1990 levels. (Reuters)

Record-breaking – Europe’s longest ever underwater electricity cable was inaugurated on Thursday by German Chancellor Angela Merkel and Norwegian PM Erna Solberg, marking the completion of the landmark €1.8 bln NordLink project linking the two countries’ grids. The cable, with a potential capacity of 1,400 MW, will allow Norway to export excess hydroelectricity to Germany, and Germany to sell excess wind power to Norway. An even longer underwater electricity cable is currently being built between the UK and Norway, set to come online later this year. (Euractiv)

AMERICAS

Summertime dangers – The North American Electric Reliability Corporation warned Wednesday of elevated risk for energy emergencies this summer in California, Texas, New England and parts of the Midwest, with the non-profit adding those issues could be exacerbated by intermittent clean energy resources. NERC President and CEO Jim Robb said states’ need to account for reliability and energy adequacy as they work to quickly decarbonise their grids. (Utility Dive)

Moving forward – The US Senate Finance Committee advanced the Clean Energy for America Act on Wednesday evening, with the bill to create a system of emissions-based incentives to speed the transition to carbon-free resources. The bill was approved along party lines, as Republicans rejected the final proposal. The proposal would replace existing clean energy tax credits with a 2.5-cent per kWh tax credit that would be linked to certain emissions reduction and labor requirements.

H2 is the answer – NextEra Chairman and CEO Jim Robo said green hydrogen will be critical to fully decarbonising the US power sector and wider economy, S&P Global Platts reports. At a virtual S&P Global Sustainable 1 Conference on Wednesday, Robo said green hydrogen could help the industrial sector decarbonise and also help replace traditional diesel and jet fuel in the transportation and aviation sectors.

ASIA PACIFIC

You’re done – Indonesia won’t approve any new coal-fired power plants as it steps up efforts to reduce carbon emissions, Bloomberg reports. The government will only allow the completion of plants that are already under construction or have reached their financial close, Energy and Mineral Resources Ministry Director-General Rida Mulyana told a parliamentary hearing on Thursday. This is the latest move by Indonesia, the world’s top exporter of thermal coal, to catch up in the global race to cut GHGs. It also plans to offer renewable energy incentives, impose carbon taxes, and develop a carbon trading system as it seeks to cut emissions by 26.8%-27.1% from a 2010 baseline. Southeast Asia’s largest economy will gradually shift about 5,200 diesel-powered plants with total capacity of 2 GW to be powered by renewable sources, Mulyana added. Over the next 10 years, the country is set to need 41 GW worth of capacity.

Won’t somebody please think of the children? – Australia’s environment minister has a duty of care to protect young people from future climate change, the federal court ruled Thursday, in a case brought by eight teenagers and a nun. The plaintiffs had sought an injunction to prevent the minister from approving the expansion of a coal mine in New South Wales, though the judge did not go that far, reports the Guardian. However, observers said later the case could be a game changer in terms of climate-change related lawsuits in Australia.

AND FINALLY…

Friday (off) for future – The introduction of a four-day working week with no loss of pay would dramatically reduce the UK’s carbon footprint and help the country meet its binding climate targets, according to a report. The study, by the environmental organisation Platform London and the 4 Day Week Campaign, found a four-day working week could not only reduce emissions from high-energy workplaces and transport but also cut the carbon footprint of goods consumed in the UK but produced overseas. (Guardian)

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