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TOP STORIES
EU leaders deadlocked on carbon market intervention, energy prices
EU leaders on Thursday failed to reach agreements on whether to intervene in the bloc’s carbon market and how to respond to sky-high energy prices, with the issues pushed to their next quarterly meeting.
BRIEFING: Excess speculation risks destabilising EU ETS, threatens climate efforts, warns report
Excessive speculation in the EU ETS could destabilise the market, with improved data availability, better monitoring of financial players, and a dedicated regulatory body needed to avoid “serious” disruption, a report has warned.
AMERICAS
Oregon greenlights cap-and-reduce programme to wrap up years of climate efforts
The Oregon Environmental Quality Commission (EQC) on Thursday approved a rulemaking to implement a market-based climate programme, marking the culmination of Governor Kate Brown’s (D) regulatory approach after walkouts from the minority Republican legislature prevented Democrats from passing a WCI-modelled cap-and-trade bill in past years.
Washington state lays out initial cap-and-trade allowance budget, offset protocols
The Washington Department of Ecology (ECY) on Thursday presented its thinking on the baseline and initial allowance budgets for its WCI-modelled cap-and-trade programme, as it also revealed plans to adopt three offset protocols included in the California carbon market.
NA Markets: CCAs fall below $30 as options expire, RGGI roars back from Virginia-fuelled drop
California Carbon Allowance (CCA) prices declined over the majority of the week on what traders attributed to the December options expiry and speculator-led selling, while RGGI Allowance (RGA) values rebounded to negate all of their recent losses from news that Virginia may leave the programme after their Republican governor-elect takes office.
Canadian carbon border measure faces challenges over CO2 price complexity
Canada is currently examining a carbon border adjustment mechanism (CBAM) as it sets it sights on a domestic carbon price of C$170/tonne by 2030, but experts say this level is not at all reflective of what should be charged for emissions at the border.
EMEA
Euro Markets: Soaring power prices pull carbon higher after nuclear outages tighten French market
EUAs were relatively rangebound in early Thursday trading as the market waited for news from Brussels, where EU leaders are discussing how to react to high energy costs and Poland is expected to propose intervention in the EU ETS.
Netherlands coalition pact seeks to raise CO2 tax, eyes industry deals
A coalition agreement struck by political groups in the Netherlands this week seeks to raise the nation’s carbon tax for EU ETS-covered sectors and to strike bespoke deals with the country’s big-emitting industrial firms.
EU’s Modernisation Fund grants €898.43 mln in eight states since its go-live
The EU ETS-financed Modernisation Fund has disbursed a total of €898.43 million to fund eight countries since it was launched this year, the European Commission said on Thursday, with only Latvia and Slovakia yet to benefit from the cash pot.
ASIA PACIFIC
CN Markets: Overtime compliance rush pushes up China ETS price, volume
China’s carbon price and trading volumes rose again on Thursday as emitters that failed to meet Wednesday’s initial compliance deadline continued to chase supply.
Australian miner faces record Safeguard Mechanism shortfall -report
A major Australian coal miner is facing having to close a gap of over 840,000 tCO2to be in compliance with the Safeguard Mechanism by the end of February, according to documents gathered by the Australian Conservation Foundation (ACF).
VOLUNTARY
US firm plans to launch offset-based ETF
A US-based provider of specialised exchange-traded products intends to launch an ETF tracking carbon offset futures, according to regulatory filings on Wednesday.
Verra open to bilateral agreements with crypto firms
Offset standard manager Verra is open to negotiating bilateral deals with companies that are creating assets based on its carbon credits, such as crypto firms, provided they pass a stringent due diligence test.
Trayport, Incubex VCM trading platform hosts first offset trade
UK-based trading software company Trayport has hosted a first trade in voluntary emissions reductions (VERs) on its Joule system ahead of the launch of a dedicated VCM trading platform, the company said Thursday.
COMMENT
When is a market not a market? When it’s the EU ETS that Poland & Co. want
Everyone’s aware how natural gas prices are up by more than 400% this year due to reduced Russian supplies, tight LNG markets, low EU storages, and the onset of winter demand. And of course since gas is a primary fuel for power generation, there’s been a knock-on effect there too. So you might be forgiven if you find it confusing that a number of EU member states think that suspending the EU ETS and reforming the market is a sure-fire way to deal with these gas and power prices.
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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
TECHNICALS
FuturesTechs, the leading provider of technical analysis to the European energy market, is increasing its product base in 2022 with a new weekly report. Keeping the jargon to a minimum, they hope to attract a wider range of readers in the space beyond their current “active traders” base. They have also listened to feedback from clients and are adding a number of new products in this weekly roundup – UKAs, JKM, seasonal gas markets, as well looking at any developments in equities, forex and cryptocurrencies. For more information or to sign up for a free trial, visit FuturesTechs.co.uk.
AMERICAS
Coal’d farewell – The US Energy Information Administration (EIA) reported that 28% of the coal-fired power plants currently operating in the US will close by 2035, removing 59 GW of coal-based power from the 212 GW currently in operation. Although coal plants have no mandatory retirement age, owners and operators have reported their retirement plans to the EIA, where the average operating unit in the US is 45 years old. Since 2002, around 100 GW of coal capacity has retired in the US, with the average age at retirement being 50 years. The EIA says that retirements occur either when the cost of operating a plant exceeds expected revenue or when operating costs exceed the plant’s value to the power system, such as when lower-cost or more efficient technologies enter the market, when fuel prices change, or when new regulations require additional investment to remain in compliance. “As a result of continued pressure on coal generation to reduce CO2 emissions, the number of coal plants planning to retire between now and 2035 is likely to increase,” the EIA said. As of Sep. 2021, developers have not reported plans to install any new utility-scale coal-fired power plants in the US.
No nuclear New York – Four nuclear units in Upstate New York owned by Exelon will be spun off and head toward decommissioning under a deal that New York regulators approved Thursday. The Chicago-headquartered energy company is working to split its competitive power generation company, Exelon Generation, from its transmission and distribution utility holding company. Among the New York plants owned by Exelon Generation included in the arrangement are the two-unit, 1,918MW Nine Mile Point nuclear power plants and the 842MW James A. FitzPatrick nuclear power plant. (Bloomberg Law)
ASIA PACIFIC
Oil refining to hydrogen – FFI Fortescue Future Industries (FFI) and Refining NZ (RNZ) have agreed to investigate repurposing facilities at the RNZ Marsden Point oil refinery to produce green hydrogen and green hydrogen products, Mirage News reports. FFI and RNZ have signed a memorandum of understanding to study the commercial and technical feasibility of producing, storing, distributing, and exporting industrial-scale green hydrogen and green hydrogen products from the decommissioned RNZ site as it transitions to an import-only fuel terminal. FFI will undertake feasibility studies which will assess key operational and commercial projections for the project and enable the development of a project timeline.
Mission 500 – A ‘Mission 500 GW’ action plan will be drawn up soon by the Indian government to take forward the announcement made by Prime Minister Modi at the COP26 climate conference at Glasgow last month, Economic Times reports. A joint committee of the ministry of power and ministry of new and renewable energy will soon be set up to draw a detailed action plan to take up India’s renewable energy capacity to 500 GW by 2030.
Pertamina plans – Indonesia’s national oil company, Pertamina, is aiming for 17% new and renewable energy (NRE) use by 2030 as part of its long-term business plan, Antara News reports. To achieve this goal, the company has launched eight NRE initiatives, including an increase in the capacity of its geothermal power plants from 672 MW in 2020 to 1,128 MW by 2026. It will also look to increase green hydrogen usage in Indonesia, using electricity from Pertamina’s geothermal field. Pertamina will also allocate around 9% of its total Capex for the 2020-24 period for its entire NRE initiatives, Antara News also reported.
Not banking on coal – HSBC, Europe’s leading banker to corporate Asia, laid out its long-awaited policy on financing thermal coal, and said it expected all its clients to have a plan in place to exit the fossil fuel by the end of 2023, The Straits Times reports. Coal is contentious for governments across Asia as they look to move away from the cheap and widely used, but carbon-intensive, energy source to help meet a global commitment to cut emissions in the fight against climate change. Under its plan, HSBC will cut exposure to thermal coal financing by at least 25% by 2025 and 50% by 2030, although non-EU or non-OECD based clients could be funded until a global phase out by 2040. However, groups which had campaigned for HSBC to issue an explicit policy on thermal coal said the bank’s plan did not go far enough and still lacked sufficient “urgency”.
Emissions dilemma – A company’s external communication often has two contradictory goals, according to The Age, concerning Australian energy company Woodside as it recently signed off on the huge $12 bln Scarborough and Pluto LNG expansion project in Western Australia. The LNG specialist sanctioned its company-defining project in November with the claim it would achieve a 13.5% rate of return. Woodside chief executive Ms O’Neill told analysts at its annual investor update last week that it included an $80 per tonne carbon price in its calculation of hurdle rates. Unless an investor read a small footnote in the July 2020 presentation that introduced the $80 carbon price and understood Australian emissions regulation, they would think returns from Woodside projects included a carbon price.
In memoriam – Five WWF employees have died in a car accident in Pakistan while on their way to monitor a forest protection scheme. The forestry experts died when their vehicle plunged into a deep ravine in Galiyat range in the early hours of Wednesday. They were travelling to Nathiagali, a town nestled among mountains and thick forests in the province of Khyber Pakhtunkhwa, in northwest Pakistan. WWF identified them as Aamir Saeed Khan, a provincial coordinator, Iftikhar Hussain, a campaign organiser, Atif Ali Khan, a geographic information systems analyst, Rafiullah, a forest surveyor and driver Farhan Afridi. A spokesperson for WWF Pakistan told Climate Home the organisation had been “deeply affected by this tragic incident”.
EMEA
Scholz address – Incoming chancellor Olaf Scholz has made his inaugural address to the German parliament, promising to “transform Europe’s largest economy into a climate leader”. He called for a wave of spending to upgrade the industrial economy and combat climate change and said the government has resolved this will be a decade of investment. Despite the bravado, many of the proposals remain vague, Bloomberg noted.
Price parity – Thanks to government subsidies, fully electric cars have become an economical alternative to combustion engine vehicles when it comes to purchase price as well as total costs that arise in the first five years of use, according to an analysis conducted by Berlin-based transport sector think-tank Agora Verkehrswende. It evaluated data from the ADAC German automobile association for the approximately 8,000 new car models available in Germany. (Clean Energy Wire)
VOLUNTARY
Good as Gold – Investment bank Goldman Sachs said it would work with clients in oil and gas, power, and auto manufacturing to reduce carbon emissions substantially by 2030, as it revealed new details about its approach to countering climate change in a report released on Thursday. Starting with a baseline of 2019, it said it would help oil and gas clients reduce emissions by 17%-22%, power by 48%-65%, and autos by 49%-54%. Goldman said it would consider the use of carbon credits when it can verify that they are of high quality to achieve those goals. (Reuters)
AND FINALLY…
False advertising – Ahead of last month’s COP26 climate summit, Google, the world’s biggest provider of ads online, made a big announcement: It would stop placing ads on sites that deny the scientific consensus on climate change. Banned from profiting from its advertising programme, Google said, were sites and videos falsely referring to global warming as a hoax or a scam. Also no longer welcome to run Google ads: Content falsely claiming that GHGs, or human activity, do not contribute to climate change. But new research shows that Google’s policy has had limited effect so far. As of Wednesday, ads placed by Google were still running on scores of articles, including ones on major right-wing sites like Breitbart, that falsely called global warming a hoax and described the UN climate conference last month as “a gigantic eco-fascist gaslighting operation.” The Center for Countering Digital Hate, a non-profit group based in London, said on Thursday that it had counted at least 50 new climate denial articles on 14 different sites, all published after Nov. 9, when Google’s new policy was to have taken effect. An earlier report by the centre’s researchers found that 10 of the most prominent publishers of climate denial content had received nearly 1.1 bln visits in the six months before the climate conference. (NYT)
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