CP Daily: Monday June 14, 2021

Published 00:47 on June 15, 2021  /  Last updated at 00:50 on June 15, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

Swiss citizens reject updated CO2 reduction strategy by narrow margin

Switzerland defeated by a narrow margin the country’s CO2 Act in a referendum on Sunday, rejecting more ambitious emissions reduction measures under an updated climate plan.

EMEA

Germany publishes free EU carbon allocation list for 2021-25, estimates start for this year’s delayed handouts

Germany on Monday published a provisional list of installations receiving free EU carbon allowances for 2021-25, suggesting the bloc is getting closer to distributing this year’s quota after months of delays.

Euro Markets: EUAs give back gains after Germany releases allocation details

EUAs climbed more than a euro early on Monday amid a strengthening energy complex, but reversed course after Germany revealed plans to hand out more free carbon allowances this year than had been expected.

London-based carbon fund dips toe in UK ETS as new market attracts more interest

A London-based carbon fund has made its first investment in the UK’s nascent emissions trading scheme, as interest from non-compliance players builds.

ASIA PACIFIC

China ETS progresses onto legislative work plan

China’s emissions trading regulations have captured a place in the State Council’s legislative work plan for 2021, meaning the nation’s carbon market could be embedded in law before the end of the year.

Queensland to launch second round of call for carbon projects

The Queensland state government in Australia is readying a second round of investments in carbon projects under its Land Restoration Fund, which will include setting up a new vehicle focused on natural capital.

AMERICAS

Common CO2 pricing standard, large emitter alignment necessary across Canada –report

Providing a uniform standard of coverage for emissions sources and aligning large emitter programmes is necessary to improve the short- and long-term effectiveness of Canada’s patchwork landscape of carbon pricing systems, a report said Monday.

NA Markets: Hot weather pushes electricity generators to hedge California cap-and-trade exposure

A California heat wave forecast throughout this week is spurring higher WCI carbon allowance prices, with some anticipating increased CO2-emitting generation to occur amid an uptick in electricity demand.

Idaho CCO project latest to apply for LCFS transition

An Idaho-based California Carbon Offset (CCO) is the most recent dairy digester aiming to generate credits under the Low Carbon Fuel Standard (LCFS), according to documents published Friday.

INTERNATIONAL

G7 climate pledges leave many details aside

G7 leaders agreed multiple efforts to raise climate ambition but stopped short of any firm commitments at the close of their three-day summit in the UK on Sunday, disappointing environmental campaigners.

Global carbon price expectations surge as markets prove resilient to pandemic -survey

Expected carbon prices over the next decade have increased for every major emissions trading system, reversing bearish sentiment of a year ago as the markets withstood impacts from the global pandemic, according to an annual survey of carbon market participants and observers published on Monday.

VOLUNTARY

VCM Report: VER prices nudge higher as traders see growing upside potential

Voluntary emissions reduction (VER) values largely extended their record highs over the past week, even as voluntary carbon market (VCM) participants thought some corporate buyers still weren’t accounting for upside risk in the rapidly expanding area.

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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

EMEA

Rejected – Members of the German Green party rejected an amendment to its federal election manifesto to raise the country’s national carbon price for heating and transport fuels to €80/t from 2023, up from the €60 that was proposed by the party’s leadership in the draft election programme. Delegates at the Greens’ congress had tabled over 3,000 amendments, but the most controversial ones were rejected, signalling the party has opted for a moderate climate policy path as it sinks in the polls. The Greens’ Chancellor-hopeful Annalena Baerbock was confirmed with 98.5% of the delegates’ vote. (Clean Energy Wire)

Green tilt – The European Central Bank could tilt its purchases of corporate bonds towards companies that pollute less or are cutting their emissions, ECB board member Isabel Schnabel said in a speech on Monday. An advocate of taking environmental considerations into account when carrying out the ECB’s massive bond-buying stimulus programmes, Schnabel said excluding polluters altogether would remove an incentive for them to clean up their acts. “Another possibility would be to pursue a more sophisticated ’tilting strategy’ under which the ECB could adjust its monetary policy operations more gradually in line with sustainability considerations,” Schnabel said. This would mean buying more green bonds and – because this market is still small – favouring “issuers that have a clear path and commitment to reducing their greenhouse gas emissions”, she added. Under its quantitative easing programmes the ECB has been buying corporate bonds in proportion to their outstanding amounts, an approach that Schnabel said favours carbon-intensive companies and should be replaced. (Reuters)

10 recommendations – Utility E.ON has warned that the UK will miss its 2050 net zero goal if the government does not take immediate action to clarify policies, introduce stricter and more urgent regulation, and “win the hearts and minds of consumers and businesses across the nation”. In a new report, ‘The Carbon Countdown: Road to 2030’, E.ON explores the key areas where the UK must move faster and with greater focus in this decade if it intends to meet its 2050 carbon goals. It provided 10 recommendations including introducing a ‘sell-by date’ on products like gas boilers to help UK manufacturers prepare, create stronger building standards to ensure all new properties are net zero, develop a more sustainable carbon leakage protection framework including through a carbon border adjustment mechanism, and tax polluters in a fairer way by extending carbon pricing to fossil fuel-based domestic heating while using the proceeds to take low-carbon levies off domestic electricity bills so customers don’t pay more to heat their homes.

ASIA PACIFIC

Nuke or no? – Japan was due to present a new energy plan this summer, laying out a future energy mix that would bring the country to its 2050 net zero target. However, government officials and policy-makers can’t agree on which role nuclear power should play in the future, so the report will now be delayed, according to Nikkei.

Industry objects – The Keidanren, Japan’s largest business lobby, indicated a reluctance to embrace certain environmental policies including a carbon tax and emissions trading, Nikkei reported, citing comments published by the industry body. The comments included that carbon pricing should set incentives for companies instead of penalising them, and a need for the government to explore ways to reduce the burden of the increased costs companies encounter when using renewable energy by examining schemes used overseas. (Bloomberg Tax)

AMERICAS

Risk recommendations – Experts with the new Initiative on Climate Risk and Resilience Law (ICRRL) are calling on the US Securities and Exchange Commission to strengthen protections from the dangers of climate change to the nation’s financial system. ICRRL’s work formally got underway Monday with the launch of its new website – and with an SEC filing detailing its recommendations for climate change disclosure for businesses. Among its recommendations, the ICRRL said the Commission should establish mandatory climate risk disclosure requirements that produce comparable, specific, and decision-useful information for investors, should move quickly to establish these climate risk disclosure requirements, and that climate risk disclosure and carbon markets are complementary policies, not substitutes.

Taking it on the ‘chin – West Virginia Sen. Joe Manchin (D), offered a spirited defence of the nation’s coal-fired power plants Thursday at Edison Electric Institute’s 2021 conference. Manchin argued US coal-fired power plants are being unfairly singled out by environmentalists, when they are only a small part of the global coal sector. He also expressed scepticism over President Joe Biden’s ambitious goal to bring the power sector to 100% carbon-free electricity by 2035. (Utility Dive)

Aem chat – California-headquartered advanced biofuels company Aemetis on Monday announced a biofuels offtake agreement with international renewable fuels supplier Murex for an estimated $200 mln of low-carbon fuels to be delivered during 2021 to 2023.  The terms of the agreement provide that the fuel and the related Low Carbon Fuel Standard and Renewable Fuel Standard credits will be sold at a fixed discount to the market price at the time of delivery.

VOLUNTARY

Tree tracking – The FT profiles the various start-ups developing tree-tracking technology – including Pachama, Sylvera, and Katam – that are attracting greater investor attention as companies are increasingly prepared to pay to monitor the forest growth that generates carbon offsets. Remote tracking tools using a combination of artificial intelligence, drones, and satellite imagery, but scientists warn that these tools still struggle to distinguish between tree species and to calculate the carbon absorbed in soils.

AND FINALLY…

Rage Against the Barista Machine – Australian Prime Minister Scott Morrison may have spent the weekend on the sidelines of the G7 meeting in the UK, but at home, acting PM Michael McCormack from the coal-backing National party was none too impressed by the talk about phasing out coal. “It pays for a lot of barista machines that produces the coffee that inner-city types sit around and drink and talk about the death of coal,” he told reporters. Video by SBS News.

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