CP Daily: Monday June 28, 2021

Published 00:55 on June 29, 2021  /  Last updated at 00:55 on June 29, 2021  /  Newsletter  /  No Comments

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

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TOP STORIES

Leaked draft suggests Brussels planning early EU ETS supply cuts, inclusion of int’l shipping

The European Commission is planning carbon market reform proposals that would adjust downwards the scheme’s annual cap cut earlier than originally foreseen, while bringing into the ETS emissions from shipping routes outside of EU waters and tweaking the system’s supply control mechanism, according to a leaked draft seen by media.

Draft EU carbon market reform proposal seeks to tighten industry’s free allocation -sources

The EU’s upcoming carbon market reform proposal will seek to place further conditions on free allowance allocation to energy-intensive industries, according to sources familiar with the draft document.

ASIA PACIFIC

China delays start of trading in carbon market

Trading in China’s national emissions trading scheme will not start this month as planned, the carbon exchange in Shanghai confirmed on Monday, though it remains unclear when trading can begin or what has caused the latest setback for the market.

Key govt advisor says cement, aluminium to be brought into China ETS in 2022

Cement and electrolytic aluminium producers will “definitely” be included into China’s national CO2 emissions trading scheme next year, a government advisor and key member of the team that designs the scheme said.

EMEA

UK carbon prices to stick near £50 for now but could easily double by 2023 -analysts

UK carbon allowances are likely to hover around the £50 mark through next year, analysts said, though a number of bullish developments on the radar could easily see prices double by 2023.

EU carbon needs to rise further to protect gas-fired power, data show

Despite a week-long rally that has added more than 6% to EUA prices, carbon needs to rise even higher in order to restore natural gas’ advantage over coal in EU power generation, updated data show.

UK government reveals free ETS carbon allowance quotas for aviation

The UK will hand out 4.36 million free carbon allowances to aviation this year under the country’s new emissions trading scheme, the government announced late Monday.

AMERICAS

Oregon legislature passes ambitious clean energy bill that sets 100% goal

Oregon Democrats passed legislation on Saturday that would require 100% clean energy within two decades, marking one of the strongest renewables goals in the US.

Pacific Northwest climate policies may reduce clean energy exports to California

Pacific Northwest utility companies may see fewer reasons to export renewable power into California over the coming decade, after Washington and Oregon legislatures advanced climate policies that incentivise use of clean energy.

VOLUNTARY

VCM report: CORSIA-eligible credits again tick higher as Latam sellers shy away

Prices for CORSIA-eligible voluntary emissions reductions (VERs) again advanced slightly this week, with one assessment hitting a new peak as some sellers are seen holding back in expectation that governments will eventually step in with regulation.

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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

CONFERENCE

The Argus Live: Carbon Markets and Regulation (15-16 July) conference is a 2-day virtual event that will provide participants with the latest pricing predictions, as well as updates on global policy and regulation within the carbon market. There will also be sessions focusing on the developments and opportunities in the voluntary carbon market. Hear from speakers such as DG CLIMA, EEX, ClearBlue Markets, CF Partners, BASF, Gold Standard, South Pole, Redshaw Advisors and many more. Carbon Pulse readers can receive 15% off their registration fee using the code CARBONPULSE15 at checkout. Register today

EMEA

The ‘law of laws’ to become law – EU ministers on Monday formally adopted the European Climate Law, clearing the last hurdle for the bill setting the bloc’s net zero by 2050 target and higher 2030 target into national legislation. Monday’s rubber-stamp by the Council follows a political agreement reached in April with the European Parliament and the MEPs’ own adoption of the final text last week. The Climate Law will only need to be signed and published in the EU’s Official Journal to become law.

Sun don’t shine, wind don’t blow – The share of renewables in Germany’s power consumption in the first half of 2021 has dropped to 43%, significantly below the 50% achieved in the same period last year, the German Association of Energy and Water Industries (BDEW) and the Centre for Solar Energy and Hydrogen Research Baden-Wuerttemberg (ZSW) have said. The main reason for the lower output of renewable power installations has been unfavourable wind conditions and fewer sunshine hours, especially between January and March. While solar power generation grew slightly by 2% compared to 2020, wind power production both from offshore and onshore turbines dropped 20% “mostly due to the weather,” BDEW and ZSW said. In order to meet national and European climate targets, much quicker construction of new solar and wind power installations would be necessary, BDEW added. Data showed that power production in H1 totalled 292 billion kWh – 4.7% more than the year before. At the same time, power consumption climbed 5.2% percent to 285 bln kWh, partly due to rebounding demand from the pandemic. Production from conventional sources increased nearly 20% YoY to 170 bln kWh. Germany’s 2030 goal is to reach a share of 65% renewables in the power mix. But due to a possible quick phaseout of more fossil fuel power capacity, industry representatives and environmental groups have called for ramping up the goal to at least 70% by the end of the decade. (Clean Energy Wire)

Green buddies – The EU and Morocco on Monday announced their intention to establish a Green Partnership, and they agreed to work together on advancing their energy transition, protecting the environment, and boosting the green economy. At a high-level event, Morocco also presented the revision of its NDC to reach a 45.5% reduction in GHG emissions by 2030. Both sides will present a progress report on the work done at the upcoming COP26 in Glasgow.

Cafi debut – Gabon has become the first country in Africa to receive results-based payments for curbing deforestation under the Central African Forest Initiative (Cafi), earning $17 mln from Norway because of lower emissions from forest loss in 2016 and 2017 than a 2006-2015 baseline. The payment is part of a 2019 agreement between Gabon and Cafi to provide REDD funding worth $150 mln over ten years. Global Forest Watch data using a different methodology shows primary forest loss actually increased in 2016 and 2017, leading campaigners to urge caution. (Climate Home)

Crime doesn’t pay: part 1 – The French fraudster, socialite, poker player Arnaud Mimran has been sentenced to 13 years in prison for masterminding the 2016 kidnap of a Swiss financier. Mimran was already serving an 8-year sentence for orchestrating tax fraud through the EU ETS in 2008-09 that was valued at hundreds of millions of euros, in what French media dubbed “the crime of the century” (Read Carbon Pulse’s ‘The case of the skull ring’ expose from 2016).  Mimran is also accused in two separate murder cases. The 49-year-old Frenchman’s bank accounts were already frozen in Jan. 2015 because of the carousel fraud case when he arranged to meet financier Yomi Rodrig in a western Paris suburb. Rodrig was bundled into a car by a gang and forced to buy millions of shares in a shell company called Cassidy Ventures Inc, controlled by Mimran. (Casino.org)

Crime doesn’t pay: part 2 – Meanwhile, a carbon credit fraudster who scammed people across the UK has been ordered to refund investors £391,680 – and faces four years extra in prison if he fails to pay. Charanjit Sandhu pleaded guilty to running a number of scams in different parts of the country, conning people out of a total £1.7 mln. Authorities said much of the money was spent on his lavish lifestyle, including a luxury holiday villa rental, expensive watches and jewellery, designer clothing, and over £9,000 in dental work. Britain’s Crown Prosecution Service secured a confiscation order for the defendant to pay back all of his available assets. Sandhu pleaded guilty to several counts of conspiracy to defraud related to the sale of carbon credits through Harman Royce Ltd and Kendrick Zale Ltd and received 3-3.5 years in jail sentences to be served concurrently.

ASIA PACIFIC

Tax time – Indonesia’s finance minister on Monday laid out a government proposal for an overhaul of tax regulations, including introducing a carbon tax of 75 rupiah ($0.0052) per kg of CO2e, which equates to $5.18/tonne. According Zawya, Sri Mulyani Indrawati told a meeting with parliament’s finance commission the measures, which also included a programme to report undisclosed assets and an increase in the VAT rate to 12% from 10%, are aimed at boosting government revenues that have dropped in Southeast Asia’s biggest economy due to the coronavirus pandemic. Local media in May reported that Indonesia was considering a tax on CO2 from energy-intensive sectors, even as the government is piloting an emissions trading scheme for coal-fired power plants. Indonesia, a big producer of coal, oil, and gas, would be the second Southeast Asian nation after Singapore to introduce a carbon tax if the government moves forward with the plans.

AMERICAS

Coal consolidation – Miner Glencore has agreed to buy out the stakes in Colombia’s thermal coal mine Cerrejon held by its partners BHP and Anglo American, saying it expects to pay $230 mln when the deal completes in early 2022 and sees production volumes at the mine declining materially by 2030. Glencore, which plans to become a net zero emission company by 2050, has set a goal of managing the depletion of its coal mines by the mid-2040s, rather than selling them, and said owning 100% of Cerrejon would not compromise its climate commitments. (Reuters)

Early retirement – Former Canadian Environmental Minister and current Infrastructure Minister Catherine McKenna announced on Sunday that she would not seek re-election. McKenna said she opted to leave her post to spend more time with her children and to devote more of her energy to climate change issues. McKenna, who helped roll out the national carbon pricing strategy, said Monday that she wanted to seek out environmental changes outside of government, but she would help Prime Minister Justin Trudeau and the Canadian delegation at the upcoming UN COP26 talks in Glasgow. (CBC)

Power pinch – California grid operator CAISO issued its second heat advisory this month, saying consumer conservation was required over the coming week to avoid potential energy shortfalls. The agency noted inland temperatures are expected to be above normal, and the hotter weather is expected to led to more electricity demand. California’s grid faced rolling blackouts last year for failing to account for demand after renewable energy assets, such as solar, tapered off in the evening hours.

Maria, Maria – Massachusetts State Rep. Maria Duaime Robinson is among the frontrunners to replace FERC Commissioner Neil Chatterjee, according to Utility Dive. Robinson has reportedly been vetted by the White House and is being backed by the renewable energy industry. Robinson’s appointment by President Joe Biden would swing FERC to Democrats’ hands. Any nominee would have to be approved by key swing Senate vote Joe Manchin (D – WV).

AND FINALLY…

Centre of cool – A heatwave has hit large parts of the US Pacific Northwest and Western Canada, sending records tumbling as the mercury hit a June record of 101F (38C) in Seattle. Higher temperatures above 115F have been recorded in other areas including Portland, OR. Some cities have opened cooling centres, where residents can escape the heat in air-conditioned buildings. Oregon’s health authority has removed COVID-19 capacity limits at large venues with air conditioning, such as cinemas and shopping malls, in order for people to take shelter from the heat. Shops have sold out of portable air conditioners and fans and a number of COVID-19 vaccination drives have been cancelled. The region normally sees mild summer weather, meaning many people do not have air conditioning. And the heatwave is making climate scientists uneasy, Axios writes. “Because of the fact that climate change has made heatwaves like this much more likely and intense, we might very well reach the tipping point of what our infrastructure and other societal systems are able to deal with,” said Friederike Otto of the University of Oxford. Studies have shown that severe heat events such as this one are now on average about 3-5F hotter than they would be without the many decades of GHG emissions. However, climate scientists tell Axios this actually understates climate change’s influence, because warming is also altering weather patterns in ways that make strong heat domes like the one of the PNW more common and prolonged. (BBC)

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