CP Daily: Monday December 20, 2021

Published 03:06 on December 21, 2021  /  Last updated at 03:09 on December 21, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

Hope for US climate legislation disintegrates as Manchin torpedoes reconciliation bill

US Democratic Senator Joe Manchin on Sunday announced he will not vote for his own party’s budget reconciliation package, rebuking a critical component of President Joe Biden’s agenda and potentially destroying any chance Congress may have to pass significant climate-related bills in this term or going forward.

AMERICAS

US EPA imposes more stringent clean car standards in final rulemaking

The US EPA on Monday released its final rulemaking for setting light-duty vehicle GHG standards that were rolled back under the Trump administration, as President Joe Biden’s agency opted to implement more ambitious compliance targets than the proposed rule set out this summer.

WCI to run Washington carbon allowance auctions after state rejoins alliance

The Washington Department of Ecology (ECY) on Monday announced it has signed an agreement with WCI, Inc. to provide a platform for allowances sales under its forthcoming cap-and-trade programme, a decade after the state left the North American climate collaborative it helped jumpstart.

New York dials back clean fuel standard recommendation in draft Scoping Plan release

The New York Climate Action Council (CAC) on Monday approved a draft Scoping Plan for orchestrating the state’s GHG reduction strategy, with members of the body softening language that had endorsed a clean fuel standard while adding a section on possible economy-wide CO2 pricing strategies.

VOLUNTARY

FOCUS: Top-ranked on climate, oil firm Eni bets big on renewables

Italy’s Eni consistently tops climate action rankings for oil firms, with its strong focus on renewables and wide goal-setting establishing the firm as a global leader in a big-emitting sector falling short overall.

VCM Report: VERs extend year-end slump as some sellers give in

Voluntary emissions reduction (VER) prices slipped in most standardised categories this week as a limited amount of sellers accepted lower levels while many participants eyed a new year recovery.

EMEA

Euro Markets: Dec-21 EUA futures expire with 142% YTD gain as traders shift to Dec-22 market

EUA prices jumped sharply on Monday, with the Dec-21 contract expiring with a 142% year-to-date gain as traders shifted buying activity into the Dec-22 contract, and power and natural gas rallied as Gazprom booked less pipeline capacity than expected for January.

As deeper emissions goals loom, EU ministers resume fight over fair shares

Several EU environment ministers criticised the allocation of revised non-ETS emissions targets on Monday, signalling a troubled path into law for the bloc’s climate legislation to help meet 2030 goals.

Carbon prices to hit €140 by 2030, analysts forecast in newly-launched EU ETS coverage

EU carbon prices will reach €140 by 2030, said a team of analysts that has launched coverage of the ETS, with their forecast representing the most bullish outlook to date.

Another London hedge fund reports stellar gains in 2021 from EU carbon

Another London-based hedge fund has reported big gains this year stemming from bullish bets in EU carbon.

ASIA PACIFIC

SK Market: KAUs climb to 19-mth high as financials enter market

Spot allowances in South Korea’s emissions trading scheme rose to a 19-month high on Monday as 20 financial institutions were accepted into the market to bolster liquidity.

Australia Market Roundup: Regulator announces next ERF auction as analysts tip ACCU ‘supercycle’

The next Emissions Reductions Fund (ERF) will be held in April, the Clean Energy Regulator announced Tuesday, even as the biannual event is set to shed its importance as private demand is hoovering up all available offset supply at record high 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

INTERNATIONAL

Unresponsive – UBS Asset Management has excluded Exxon Mobil and four other “unresponsive” energy companies from its climate aware range of funds, including one managed for UK pension scheme NEST, the firms said on Monday. The asset management arm of UBS also divested from Imperial Oil, Kepco, Marathon Oil, and Power Assets following a three-year engagement programme with 49 oil and gas companies identified as lagging on climate change performance, the firms said in a statement. The exclusions also apply to UBS’ actively-managed equity and fixed income sustainability funds. (Reuters)

AMERICAS

Bring on Boric – Gabriel Boric has vowed to unite Chile, fight “the privileges of the few”, and tackle poverty and inequality after winning a decisive victory over his far-right opponent to become the South American country’s youngest premier. The 35-year-old leftist former student leader won 56% of the vote in Sunday’s second-round presidential election, cruising past his ultra-conservative opponent, Jose Antonio Kast, who took 44.2%. Boric has pledged to phase out coal-fired power by the end of his first term, as well as deepening and recalibrating Chile’s national green hydrogen strategy to aid the transition off fossil fuels in the medium-to-long term, according to his campaign website. It is uncertain how his plans will affect Chile’s carbon pricing strategy, with the country’s current right-wing administration planning to reform its $5/tonne CO2 tax in 2023 and seeking to raise the country’s carbon price to at least $35/tonne by 2030. (Guardian)

Power hour – The US Supreme Court will hear arguments in the fight over the scope of EPA’s climate authority over power plants on Feb. 28, the court announced on Friday. The court in October said it would hear appeals from a coalition of red states and coal companies, which stem from the DC Circuit’s January ruling striking down the Trump-era Affordable Clean Energy rule. At issue is whether EPA can consider beyond-the-fenceline strategies like generation shifting; a “no” answer from the Supreme Court could limit the efficacy of any rulemaking. The combined cases are slated for one hour of arguments, with a ruling expected by the end of term in late June or early July. (Politico)

Not the best CCS – The US needs to do a better job vetting which carbon capture projects to support with public funds and improve its oversight once the projects are underway, a government agency watchdog said on Monday. The Department of Energy (DOE) invested $1.1 bln to support nine CCS projects between 2010 and 2017, including six at coal plants and three at other industrial facilities, the report said. Of the nine, none of the coal plant projects and only two of the industrial projects are currently operational, it said. This low success rate was due in part to unexpectedly high costs for the projects, and uncertainty about carbon markets and other incentives, DOE officials told the Government Accountability Office (GAO), according to the report. The GAO said DOE should improve its selection and management of CCS demonstration projects, and Congress should create a mechanism for greater oversight of the projects, like regular reporting. (Reuters)

Offshore expansion, part I – Maryland’s offshore wind portfolio is poised to grow substantially following the state’s Public Service Commission decision on Friday to award offshore wind renewable energy credits to two developers who collectively have proposed more than 1,600 GW of new energy to be built off the coast. The PSC decision allows the two companies ― US Wind and Skipjack Offshore Energy to proceed with their expansion plans in federal waters off of Ocean City. US Wind is permitted to build 808.5 MW of new energy while Skipjack was awarded 846 MW. The proposed new projects are in addition to the 368 MW of offshore wind already being developed by both companies off Maryland’s shore. (Maryland Matters)

Offshore expansion, part II – Meanwhile, Massachusetts on Friday announced the selection of two offshore wind projects totalling 1,600 MW of new capacity, bringing the state to 3,200 MW of a 5,600 MW offshore wind procurement goal by 2027. The state’s third offshore wind procurement awarded two developers that are already working on large-scale projects in the area, Vineyard Wind and Mayflower Wind, doubling the amount of offshore wind secured by the state. Vineyard, a joint venture of Copenhagen Infrastructure Partners and Avangrid Renewables, received a 1,200 MW contract, in addition to its previous 800 MW contract. Separately, Mayflower, a joint venture of Shell and Ocean Winds, received a 400 MW contract, in addition to its first 800 MW project for the state. (Utility Dive)

Colorado cover – Reuters profiles US oil firm Civitas Resources and its low-profile drilling technology allowing extraction closer to urban areas. Civitas says it is Colorado’s first “carbon neutral” producer, having eliminated some diesel-powered pumps, makes modifications to drilling and hydraulic fracturing equipment and its production sites. It also buys carbon credits to offset remaining emissions.

New in Newfoundland – Newfoundland and Labrador Minister of Environment and Climate Change Bernard Davis on Monday released a mid-term update on the Canadian province’s Climate Change Action Plan 2019-2024. The update noted that 13 large stationary emitters have been subjected to the jurisdiction’s output-based pricing system (OBPS) since 2019, and GHG output in both 2019 and 2020 was below the total programme obligation, with performance in the latter year aided by COVID-19 and other shutdowns. The Liberal government noted it is reviewing its CO2 pricing system – which also consists of a rising carbon levy on fossil fuels – as part of the Canadian federal government’s process to raise the ‘backstop’ carbon price and implement a more stringent OBPS regime starting in 2023. Additionally, Newfoundland and Labrador is not on track to hit its 2030 GHG targets, according to briefing notes issued to Premier Andrew Furey ahead of his November trip to COP26. The province in committed in 2019 to reducing emissions to 7.4 Mt by 2030, or 30% below its 2005 emission levels. But current provincial emissions sit at about 11 Mt, briefing notes obtained by The Canadian Press through access to information legislation say, meaning emissions levels would have to drop by about 32% by 2030 to hit the mark.

EMEA

That was fast – The Russian carbon emissions market is worth an estimated $50 billion, President Vladimir Putin said, effectively growing from being worth next to nothing in recent years. “Carbon emissions is essentially a new kind of business. The Russian market for trade in carbon units is estimated at $50 billion. Here is something to think about and something to work on. We also have major competitive advantages in this area,” he said at the Russian Union of Industrialists and Entrepreneurs (RSPP) Congress, as reported by Interfax. Putin said it was essential for international decision-making related to cross-border carbon regulation to be free from signs of unfair competition. Russian businesses expect the Moscow will challenge the EU’s Carbon Border Adjustment Mechanism at the WTO. The country’s is currently implementing plans to establish a national voluntary carbon pricing scheme including rules, standards, a trading platform, and an auditor network, as well as an ETS in its gas-rich Sakhalin region.

Border bluster – Ireland has warned the EU that the bloc’s proposed CBAM border carbon levy could hurt the country’s electricity market and post-Brexit trading relationship if the UK isn’t exempted from the measure. Ireland’s electricity system is integrated with that of Northern Ireland and the UK Power generation is one of the sectors covered by the CBAM due to kick in from 2026. An Irish official told EU environment ministers that the country understood the EU has no intention to have a carbon border on the island of Ireland, but that confirmation was needed amid ongoing post-Brexit talks. (Bloomberg)

Checking the checkpoint – The UK has launched a consultation on potential checks for new oil and gas licences to assess whether projects are in line with the country’s 2050 net zero climate commitments. It calls for views on potential ‘checkpoint’ tests that could be applied to new oil and gas licenses such as domestic demand for the fuels being extracted and the use of technology such as CCS and hydrogen generation. The consultation runs until Feb. 28.

ASIA PACIFIC

E-mission pledge – Alibaba will aim to achieve carbon neutrality in its own operations and slash emissions across its supply chains and transportation networks by the end of the decade, Straits Times reports. Alibaba promised to achieve carbon neutrality by 2030 in its own direct emissions – known as “Scope 1” – as well as its indirect “Scope 2” emissions – derived from the consumption of electricity or heating. The Chinese e-commerce giant also pledged that it would reduce carbon intensity – the amount of carbon per unit of revenue – from the “Scope 3” emissions – produced across its wider value chain in areas such as transportation, purchased goods and services and waste – by 50% by 2030.

Baku backing – Azerbaijan’s state energy firm SOCAR aims to achieve net zero carbon emissions in early 2022 in extracting oil and gas at its own sites and full carbon neutrality by 2050, a company official told Reuters. The company has not set climate targets for projects which it develops jointly with BP and other partners but has been shutting down mature fields, improving infrastructure and equipment.

AND FINALLY…

Convention attention – Post-COVID revival of businesses conferences could bring substantial CO2 emissions, but planners can curb the impact while still enabling lots of in-person interaction, new analysis shows. The paper in Nature Communications attempts a holistic look at the resource footprint of conferences, looking at travel and food demands for big in-person events, but also energy needed for remote communications, to name a few big categories. Looking at virtual, in-person and hybrid models, they conclude that moving meetings and conventions to all-virtual formats can cut emissions by 94%. But it also explores hybrid formats and strategies that curb emissions from travel involving multi-location conference “hubs,” careful flight planning and more. “[S]patially optimal hubs for the hybrid conferences have the potential to slash carbon footprint and energy use by 60–70% while maintaining <50% of virtual participation,” the Cornell University researchers wrote. (Axios)

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