CP Daily: Tuesday June 29, 2021

Published 00:27 on June 30, 2021  /  Last updated at 00:33 on June 30, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

PREVIEW: Upcoming EU presidency holder Slovenia braces for climate “legislative tsunami”

Slovenia is preparing to steer negotiations on the EU’s upcoming ‘Fit for 55’ climate legislative package, which is due to be officially unveiled in two weeks, as the Balkan nation becomes the bloc’s presidency holder for the second half of 2021.

EMEA

Brussels adopts 5-year national free allocation tables for EU ETS after months of delays

The European Commission late Tuesday said the national allocation tables (NATs) determining free EU Allowance allocations for 2021-25 under the bloc’s carbon market have been finalised, bringing this year’s distribution of permits a step closer following months of delays

Euro Markets: EU carbon hits fresh 6-wk high as gas bulls charge ahead

European carbon climbed on Tuesday to a new six-week high, in what could be its seventh daily gain in eight sessions, as a sharp rise in gas prices and optimistic expectations surrounding the upcoming market reform proposals continued to buoy EUAs.

AMERICAS

West coast heatwave spurring more carbon-emitting generation in California

California power demand is rising amid hotter weather on the US west coast this week, with natural gas-fired generation making up a larger share of the Golden State electricity output, according to grid operator data.

ASIA PACIFIC

Australia releases draft carbon offset method for CCS

Australia released a draft method for public comment on Tuesday that would enable oil and gas companies to earn offsets from carbon capture and storage projects.

Tianjin pre-compliance carbon auction clears at floor price

The Tianjin municipal government on Tuesday sold a little more than half of the 1.5 million CO2 allowances on offer at its pre-compliance auction, with the sale clearing at the price floor, some 4.5% above the trading price in the secondary 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

CONFERENCE

The Argus Live: Carbon Markets and Regulation conference (July 15-16) is a two-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 including 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

INTERNATIONAL

CBAM bashing, Indian edition – At this year’s UN COP26 climate summit, India and other developing nations will oppose plans by the EU and US to penalise imports of carbon-intensive goods via a CBAM to curb emissions. “It is the most regressive proposal” with “no principle of equity adhered to,” Environment Minister Prakash Javadekar said at a BloombergNEF summit Tuesday. “This is unfair taxation, nobody will accept it.” India will instead seek more action from rich countries that have not kept their commitments on reducing emissions, Javadekar said. US President Joe Biden’s administration is considering introducing border adjustment measures, similar to plans put forth by the EU and those being discussed by the UK and Canada. Javadekar listed India’s climate investments, including its solar power plans and its 400 billion rupees ($5.9 bln) in spending on increasing forest cover. The minister also criticised delays in plans to release $100 bln in financial aid to developing nations to help them meet their climate goals. The funds that were supposed to be disbursed by 2020 have now been delayed to 2025.

CBAM bashing, Australian edition – At a separate online event hosted by Politico, Australian Minister for Trade Dan Tehan said the EU’s planned carbon border levy could bolster protectionism and hurt global growth. What’s more, making a CBAM consistent with World Trade Organization rules “would be incredibly difficult for Brussels to achieve,” he added. “If you look for instance at the emissions trading scheme in the European Union, it gives free permits to a large proportion of industry within the European Union, so how you account for that would be very difficult.” Lawmakers in Brussels are mulling the elimination of free EUA allocations to heavy industry should the bloc impose a CBAM on its trading partners that don’t have comparable environmental protections.

Vaccination registration – The UN Climate Change online portal to register parties, admitted observers, and media representatives to attend COP26 in Glasgow (Oct. 31-Nov. 12) has opened. According to a notice from the UNFCCC, the registration process has been launched early with the purpose of facilitating vaccination for the conference. “The early opening … is independent of the decision on the precise format of the COP. Decisions … and more details of the logistical arrangements will be communicated in the coming weeks,” the announcement said, adding that the UK COP presidency is offering vaccines to eligible attendees from the three aforementioned groups who have not yet received a vaccine, are not able to get one in time, and cannot access a shot through other means. The UN said interested participants must respond by July 23 so that the vaccination programme can be rolled out in time and administered “in various cities around the world”. Registration for COP26 will remain open after this deadline for those participants not requesting a vaccine. After the summit was postponed last year due to the pandemic, the UK is pushing ahead with an in-person COP, though the event’s details are yet to be revealed.

Not so fast – The UK’s Competition and Markets Authority has opened an investigation into S&P Global’s planned $44 bln acquisition of IHS Markit. The deal announced late last year would marry two of the world’s biggest financial data providers. IHS Markit operates one of the main online registries in the voluntary carbon market, while both firms have energy news divisions and offer carbon market analysis services. Earlier this month, S&P Global CFO said he sees the deal closing in the fourth quarter. The company had previously forecast a deal close in the second half of the year. (Seeking Alpha)

EMEA

Green up, banks – The EU is considering a wide range of measures to bring the bloc’s financial sector into line with its climate plans, sources who have seen a European Commission strategy paper told Reuters. The document outlines several actions including combating so-called greenwashing of investments, setting climate change targets for banks, and encouraging low-carbon blockchain projects, the sources said. Entitled “financing transition to a sustainable economy”, the paper builds on the EU executive’s 2018 action which set the stage for the bloc’s classification of truly green investments, and mandatory climate-related disclosures by companies. But the Commission believes more action is needed because it has become clearer that Europe should improve how the financial sector contributes to sustainability, the sources said. EU states will be asked to assess how their financial markets contribute to reaching the bloc’s climate goals, covering asset managers, pension funds, banks and insurers. A consolidated report on EU financial markets’ transition will be delivered by the end of 2023, the sources said. The Commission will then coordinate with the ECB and the bloc’s banking watchdog to “calibrate the right pace for the transition”. There will be more work on labelling bonds as sustainable, an “initiative” by Q1 2023 will aim to make ESG ratings of companies more reliable and comparable, and the EU will also consider options to broaden out its taxonomy to cater better for investments in companies moving to a more sustainable footing.

Chugging along – The average CO2 emissions of new cars registered in the EU, Iceland, Norway, and the UK in 2020 have decreased strongly compared to 2019, according to provisional monitoring data from the European Environment Agency, as manufacturers stepped up their efforts to raise the share of electric vehicles in their fleets. The data shows the average CO2 from the 11.6 million new passenger cars registered in 2020 in those 30 countries decreased by 14.5 g CO2/km, or 12% compared to 122.3 g CO2/km in the previous year. “This is by far the greatest annual decrease in emissions since CO2 standards started to apply in 2010,” the European Commission said, adding the main reason was a tripling in the share of EV registrations, which went from 3.5% in 2019 to over 11% in 2020. Despite the shrinking overall market for new cars due to the COVID-19 pandemic, the total number of EVs registered in 2020 rose to over 1 mln. Meanwhile, average CO2 from new vans sold in the EU, Iceland, Norway, and the UK in 2020 was 155.7 g CO2/km – a slight 2.3 g improvement on 2019.

The king is (almost) dead – Britain has committed to ending coal-fired generation from Oct. 1, 2024, the government announced early Wednesday, bringing forward its deadline by one year. The move is part of ambitious commitments to transition away from fossil fuels and decarbonise the power sector in order to achieve net zero emissions by 2050. This announcement confirms the intention set out by Prime Minister Boris Johnson last year, which kicked off a consultation into an earlier phaseout deadline than the previously agreed Oct. 2025 date. Coal’s share in the UK power mix has fallen from nearly 40% a decade ago to under 5% currently.

Change of Lev? – Israeli Finance Minister Avigdor Liberman on Tuesday said the country could seek to introduce a carbon tax, without providing further details. Israel’s new environment minister earlier this month pledged to try to advance legislation that would put a price on the country’s carbon emissions, but some observers cast doubt on the idea amid apparent opposition from the finance ministry. Tuesday’s announcement could signal a change in view, as the Bank of Israel has also recently voiced its support for carbon pricing. Israel last year started working on a strategy, with the central bank recommending the government set up an emissions tax for power, road transport, and cooking gas. (Jerusalem Post)

Methanol leapfrog – The world’s largest shipping firm, Maersk, has called for urgent action to address the climate crisis, saying it will turn first to green methanol, and later to green ammonia in order to reach its goal of becoming carbon neutral by 2050, Euractiv reports. The problem is that methanol today is mostly made from coal or natural gas, said Morten Bo Christiansen, head of decarbonisation at Maersk. This is why Maersk is looking at green methanol made from biomass gasification, or so-called ‘power-to-X’ where biogenic CO2 is added to hydrogen. “And same with ammonia, made from hydrogen and then just adding nitrogen.” The hope is that these alternative shipping fuels will gradually become greener as biomass, ammonia, and hydrogen are produced in growing quantities using sustainable production methods.

ASIA PACIFIC

That’s a lot of hydrogen – Kazakhstan is planning to enter the emerging hydrogen market big time, with Kazakh Invest National Co. having partnered with Germany’s Svevind Energy to build 45 GW worth of solar and wind power capacity across the Central Asian nation. That will be used to power 30 GW of hydrogen electrolysers that can produce some 3 mln tonnes of green hydrogen annually, reports RenewEconomy.

Just come out and say it – Three major investor groups representing some of Australia’s biggest finance firms are calling for government regulators to force big companies to disclose how they plan to address financial risks from climate change. The coalition of investors is warning climate change is becoming a major threat to the global economy, reports Voice of America.

Lower your expectations – The Australian Office of the Chief Economist expects global trade in thermal coal to grow by 7 mln tonnes between 2020 and 2023, according to its latest forecast, a massive 65 mln tonne drop from its previous forecast, according to Argus. The revision in numbers is due to demand from Japan and South Korea falling faster than previously thought, while growth in Indian imports is slower than expected.

Always exceptions – The Japan Bank for International Cooperation (JBIC) will provide support for exports from coal power plants if they come with emissions-cutting steps such as CCS and co-firing ammonia, JBIC Governor Tadashi Maeda said Tuesday. The G7 nations pledged earlier this month to rapidly scale up technologies and policies that accelerate the transition away from unabated coal capacity, including ending new government support for coal power by the end of this year. JBIC plans to support using ammonia or hydrogen as a co-firing fuel in thermal generation, with the understanding that they are needed to slash CO2 in a transition period. Ammonia is seen as a potential effective future energy source as it does not emit CO2 when burned. The state-owned bank announced a new three-year business plan through Mar. 2024, under which it will provide finance to help expand renewables and create a hydrogen supply chain as well as transition finance to support CCUS and ammonia co-firing projects. JBIC will continue financing upstream development of LNG and gas-fired power generation projects as part of transition finance, Maeda said. (Reuters)

AMERICAS

Moving along — The Senate of Canada approved a bill on Tuesday afternoon that would install five-year GHG reduction budgets and a mid-century commitment to net zero emissions. Legislation C-12 — “An Act respecting transparency and accountability in Canada’s efforts to achieve net-zero greenhouse gas emissions by the year 2050” – fulfils a campaign pledge from Prime Minister Justin Trudeau last year to increase Canada’s climate ambition. Under the proposal, the 2050 net zero goal would be codified, and the bill would bind current and future governments to set five-year emissions reduction targets, report their progress, and make adjustments if they fall behind.

California vibes — Canada will ban the sale of new gasoline-power cars and light-duty trucks by 2035, Prime Minster Justin Trudeau’s government said Tuesday, according to a Reuters report. Environment Minister Jonathan Wilkinson said the move would align Canada’s electric vehicle targets to those in the US, with California Governor Gavin Newsom (D) being among the first US states to roll out the target. Canadian province Quebec made a similar announcement last year.

Ditch the market – New York’s Climate Justice Working Group raised concerns on Monday afternoon about market-based programmes being used to help reach the state’s ambitious 2050 carbon neutrality goal. The advisory group specifically called out New York’s tentative support of the proposed Transportation and Climate Initiative (TCI) that would create a fuel sector cap-and-trade programme in the Northeast and Mid-Atlantic regions. The group said cap-and-trade programmes have inherent design flaws that result in environmental racism. TCI has faced significant push back from environmental justice groups while developing a proposed regulation over the past two years, with only four of the 12 jurisdictions – Rhode Island, Connecticut, Washington DC, and Massachusetts — opting into the system.

SHIPPING

Three if by sea – Three global players – Barry Rogliano Salles (BRS), Deltamarin, and Bureau Veritas – are forging a partnership to offer a range of decarbonisation tools and services to the shipowning community. The trio will assess the operational and retrofit solutions required by shipowners to reach their emissions reduction and performance targets. This will include assessments of engine power limitations, propulsion optimisation, and energy saving devices, use of new fuels, wind propulsion and other options. Deltamarin – a leading ship design, offshore engineering, and marine construction specialist – will focus on calculations and engineering optimisation solutions; classification society Bureau Veritas will provide MRV and compliance services; and shipping broker BRS will be focused on optimising the financial performance and cost control aspects of projects including the use of carbon credits, as well as working with shipyards carrying out vessel modifications and retrofitting work. (Splash)

VOLUNTARY

Grenville green – The united counties of Leeds-Grenville in Ontario will sell carbon credits from a 15,000-acre forest in North Grenville. County council entered into a century-long carbon development and marketing agreement on June 24 with Bluesource Canada. The county estimates it will rake in C$4.7-7.7 mln in the first 30 years of the 100-year deal. County Forest Manager Geoff McVey said the municipality is being “rewarded for maintaining or increasing the forest stock” while insuring the forest is maintained without have to go to taxpayers for money. (Brockville Newswatch)

AND FINALLY…

Updates available – Attempts to sue polluting companies and governments over their responsibility for climate change would have a greater chance of success if they made better use of the latest science, according to a study by Oxford University researchers. The paper, published in the journal Nature Climate Change, finds that the growing ability of scientists to link emissions with specific damages caused by climate change, known as attribution science, could provide further evidence in lawsuits. Litigation has become an increasingly important tool used by campaigners seeking to force governments and companies to curb emissions, with more than 1,500 climate-related lawsuits filed around the world to date, including a number of recent high-profile cases have succeeded. However, for the most part they have failed because plaintiffs have not been able to link definitively the harms caused by climate change with GHG emissions, writes DeSmog. The study by the Oxford Sustainable Law Programme and Environmental Change Institute finds that many lawsuits have not used the latest advances in attribution science as evidence.

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