CP Daily: Tuesday June 8, 2021

Published 01:08 on June 9, 2021  /  Last updated at 01:14 on June 9, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

Poland’s Belchatow, EU’s largest emitter, to start closing lignite units from 2030 -draft plan

Poland’s main utility will start gradually closing generation units at the largest emitting installation in the EU ETS from 2030, according to a draft plan published by the Lodz regional government Tuesday.

EMEA

Germany targets EU aviation allocation in carbon price stance -leaked document

Germany favours the rapid end to free EU carbon allowances for airlines, according to a leaked document, increasing the pressure on the sector as it slowly recovers from the pandemic.

EU carbon could soon “break loose” from fuel-switching dynamics for a move higher -analysts

EU carbon allowances may soon “break loose” from their correlation to utility coal-to-gas switching levels and gravitate towards the higher prices of €75-100 thought needed to continue decarbonising the bloc’s economy, analysts said this week.

Euro Markets: EUAs rise above €52 on gas gains, bullish technicals

EUAs rose 1.4% to settle above €52 on Tuesday, climbing for the second straight day amid a supportive energy complex and as technical signals turned bullish following Monday’s disrupted session.

VOLUNTARY

INTERVIEW: Offset venture Vertree targets big emitters for scale-up of voluntary carbon market

Newly-formed carbon credit provider Vertree is targeting a major push towards providing carbon offsets for harder-to-abate sectors, betting these heavy industries won’t be able to cut their emissions at a politically acceptable cost.

AMERICAS

California will not include state audit’s cost analysis recommendations in Scoping Plan process

California regulator ARB will not incorporate climate programme cost analysis recommendations from a recent state audit in its Scoping Plan update, with officials on Tuesday instead saying long-term GHG reduction goals and emissions trends would inform this process.

California’s April power emissions rise to 2016 levels as hydro continues to lag

California power sector emissions rose for the fourth consecutive month in April amid an uptick in electricity demand as consumer behaviour shifts back to pre-pandemic levels, according to California Independent System Operator (CAISO) data released this week.

LCFS Market: California prices step back ahead of PG&E sale

California Low Carbon Fuel Standard (LCFS) prices inched down in recent days as utility Pacific Gas & Electric (PG&E) prepared for its next credit solicitation, according to participants in the transportation sector programme.

RIN prices to fall this year as bullish factors wane -analysts

US biofuel credit (RIN) values are set to retrace from record levels as gasoline demand recovers and more Renewable Fuel Standard (RFS) policy certainty emerges for the second half of the year, analysts at a major investment bank said.

ASIA PACIFIC

Australia Market Roundup: Voluntary CER cancellations top 3.2 mln in May, as govt funds first DAC demonstration project

Australian companies retired a record 3.2 million CERs last month as the voluntary carbon market boom continues to primarily benefit international projects, while the government on Tuesday announced a funding package for CCS projects that included the nation’s first direct air capture (DAC) scheme.

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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

Fearful fifty – The planet’s atmosphere held more CO2 at its annual May peak than at any time in the last 4 mln years, and 50% more than prior to the Industrial Revolution, NOAA reported Monday. Scientists said the rate of CO2 increase, fueled primarily by the combustion of fossil fuels, showed “no discernible impact” of any pandemic-induced slowdown. Atmospheric CO2 levels peak cyclically every May before vegetation in the Northern Hemisphere wakes up from winter and pulls carbon out of the atmosphere, but overall CO2 levels keep rising because humans keep pumping 40 bln tCO2 into the atmosphere every year. (Climate Nexus)

EMEA

Cash injection – The European Commission on Tuesday presented the EU’s €168 bln draft budget for 2022, complemented by an additional €143 bln sum from the bloc’s coronavirus recovery package, the NextGenerationEU. As agreed last July, the EU will dedicate 30% of its budget at least on climate expenditure, and 7.5% annual spending on preserving biodiversity. The draft 2022 budget allocates €1.2 bln to the EU’s Just Transition Fund supporting the bloc’s coal regions. The sum will be topped up by an additional €4.3 bln from the NextGenerationEU.

CCS cash injection – The Dutch government on Tuesday confirmed that it has awarded €2.1 bln, nearly half of its 2021 annual budget for sustainable projects, to a project aimed at capturing and storing carbon emissions from Rotterdam Port, Europe’s largest. The “Porthos” project, being developed by an industrial consortium that includes Royal Dutch Shell, ExxonMobil, Air Liquide, and Air Products, aims to collect emissions from factories and refineries and store them in empty gas fields in the North Sea. The other major category of subsides awarded in the government’s €4.6 bln budget was for around 3,300 solar panel projects, mostly on rooftops. The Dutch subsidy system is designed to give extra funding at first to more experimental and costly technologies and projects, while the budget for more established projects – such as offshore wind turbines – shrinks as they become profitable. (Reuters)

So, so polluting – In a rare move, the Bulgarian Supreme Court is asking the Court of Justice of the EU to weigh in on a case about one of the biggest coal plants in the Balkans. At the end of 2018, the Bulgarian government granted state-owned Maritsa East 2 a derogation, which gave it indefinite permission to emit SO2 almost double EU limits, putting the health of residents in the surrounding towns in direct danger. Now, the Bulgarian court is asking the top EU court whether the breach of local air quality limits in nearby city Galabovo must be considered when allowing Maritsa East 2 to emit almost double the legal limit. In 2019, the European Commission launched an infringement procedure against Bulgaria over poor air quality and surpassing SO2 limits. The Court of Justice of the EU is expected to rule on the Maritsa case in the next year. (ClientEarth)

Early exit – A lignite power station in the eastern German town of Chemnitz will be shut down by 2023 instead of the last unit running until 2029, the management of plant operator eins energie in sachsen has said. Speaking at an event last week, the chairman Roland Warner said the company didn’t have an alternative but to take block C offline earlier than planned due to a “price explosion” in the EU carbon allowances, local news website TAG24 reports. The Chemnitz combined heat and power plant consists of three units, one of which is already closed with the other two now to follow by 2023. The site of Heizkraftwerk Nord in Chemnitz will be used to instead produce power and heat from natural or renewable gas as of 2022. (Clean Energy Wire)

Dunge plunge – France’s EDF is shutting its Dungeness nuclear power station in the UK with immediate effect, seven years sooner than planned. The two 40-year-old reactors, which have been offline for about three years due to “significant” technical challenges, won’t restart, the company said on its website. With EDF’s new Hinkley Point C facility not due online until 2026, the closure will fuel concerns that power plants will use more polluting gas instead to fill the supply gap left by intermittent renewables, slowing the energy transition. (Bloomberg)

Washers beware – The UK Treasury has set up a new group of expert advisers in order to clamp down on “greenwashing” amid the economic transition to a net zero economy. The new panel, called the Green Technical Advisory Group (GTAG), will oversee the delivery of the government’s “Green Taxonomy”, a framework for judging how environmentally friendly investments are. The GTAG will be chaired by the Green Finance Institute and made up of financial and business stakeholders, taxonomy and data experts, the Treasury said. It will include representatives from the financial industry, business bodies such as the CBI, the government’s environmental advisers the Committee on Climate Change, academics and NGOs. (City AM)

AMERICAS

Priceless proposal – A bipartisan Senate group was a fall-back infrastructure proposal as talks between the White House and GOP senators appear to be at a stalemate. The group of roughly six senators, including Sen. Mitt Romney (R), are expected to shop it to a broader group of roughly 20 centrist-minded senators, known as the G-20, this week. Romney did, however, knock down reports from over the weekend that carbon pricing would be part of the group’s suggestion on how to pay for their proposal, telling reporters that is not included in the plan. What’s more, the GOP’s lead negotiator Sen. Shelley Moore Capito on Tuesday said President Joe Biden ended infrastructure negotiations with Republicans. The end of talks will increase pressure on Democrats to pass a sweeping package using the budget reconciliation process that doesn’t require any Republican votes in the Senate. (The Hill/NBC News)

They went to Jared – A bill that promised to add regulatory teeth to Colorado Gov. Jared Polis’ (D) emissions reductions roadmap was killed in the Senate this week. SB-200 was supposed to add more enforceability measures onto high-emitting sectors across the state, charging a fee on these emissions and create an ombudsman position to focus on communities that are disproportionately impacted by climate change. However, Polis threatened to veto the act, criticising a portion of the bill to the Colorado Springs Gazette and saying it would give broad sweeping control to an unelected Air Quality Control Commission. After a back and forth between Democrats and the governor’s office behind closed doors, the lawmakers decided to kill SB-200 on the Senate floor and roll portions of it into a new amendment for HB-1266, which deals with environmental justice for disproportionately impacted communities. (The Denver Channel)

CCUS consultation – The Canadian Department of Finance on Monday launched a stakeholder consultation of an investment tax credit for CCUS projects with the goal of reducing GHG emissions by 15 Mt annually. The proposal, originally laid out in PM Justin Trudeau’s 2021 budget, intends for the credit to be available for a broad range of CCUS applications across different industrial subsectors, including blue hydrogen projects and direct air capture, but not enhanced oil recovery projects. The CCUS investment tax credit will be available starting in 2022, and on the same timeline, the government will also determine how comparable tax support could be provided to producers of green hydrogen.

VOLUNTARY

Lovie Dovie – Unilever has announced that the first project to benefit from its flagship €1bn Climate & Nature Fund will be a forest restoration scheme in Indonesia, developed through beauty brand Dove. The firm first unveiled the funding last summer, alongside a new commitment to reach net zero emissions for all products by 2039 and to eliminate deforestation from the supply chain by 2023. Late last week, it revealed plans to work, through Dove, with Conservation International on the first project to receive a portion of the fund. The €8.5 mln project is designed to conserve and restore 20,000 hectares of forest in North Sumatra, Indonesia, over a five-year period. Dove claims that the project, which will cover an area twice the size of Paris, will avoid the release of 200,000 tonnes of CO2e and enable a further 300,000 tonnes of CO2e to be sequestered. It has stated that it will monitor and evaluate the realisation of these projected impacts as the project continues. (edie)

Shipmates – Shipbroker McQuilling Partners and Vertis Environmental Finance have announced a partnership to offer carbon offsetting and advisory services to the shipping industry. The agreement will provide ship-owners, oil companies, refiners, and traders with direct access to carbon offsetting and advisory solutions to address their environmental sustainability and carbon-neutral shipping needs, as well as their future environmental compliance requirements. This is the latest in a series of tie-ups by carbon trading or advisory firms and shipbrokers, IFCHOR and ClearBlue Markets inking a partnership earlier this year. Shipbrokers Affinity, BRS, and Clarksons are among those launching their own specialist carbon desks in recent months, as the maritime sector prepares for its likely inclusion in the EU ETS, as shipowners increase efforts to cut or offset their emissions, and as the industry is likely to face wider international pressure through the IMO to reduce its GHGs.

Enough (Air)spaceTime-critical shipping company Airspace on Tuesday announced a partnership with Cool Effect to offset emissions of its logistics operations throughout North America, Southeast Asia, and Europe. Airspace will help fund the Cool Effect Cup of the Amazon project, which helps protect the Peruvian Amazon from further deforestation, while helping local communities develop family sustaining jobs outside of the logging industry.

AND FINALLY…

Dark side of the sun – European transmission grid operators (TSO) are preparing for a partial solar eclipse on Thursday between 1120-1340 GMT. German TSOs are confident they will be able to balance the lower generation from solar PV plants, with the facilities distributed across Germany, meaning they will not all be equally affected. TSOs said that they are expecting a reduction of 4.2 GW while power consumption will remain the same as usual. As a lion share of the generation drop can be accounted for in advance by the marketers of solar power, transmission grid operators only have to take measures to cover for around 1 GW. For this they have tendered additional power to either reduce or increase feed-in if necessary. During the last, more complete solar eclipse in 2015, the effect on PV generation in Germany was greater with a 17% fall in solar electricity output. This year the impact will also be weaker because national capacity has risen to 51 GW from 40 GW six years ago. The next partial solar eclipse will occur on Oct. 25, 2022, with a more severe one coming on Mar. 29, 2025.

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