CP Daily: Thursday January 5, 2017

Published 19:26 on January 5, 2017  /  Last updated at 19:31 on January 5, 2017  /  Newsletter  /  No Comments

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

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Mexico’s ETS simulation to launch in coming weeks

Mexico’s cap-and-trade simulation is set to involve around 50 companies and is due to start in late January or early February following several workshops in the coming weeks.

EU Market: EUAs sink to resume bearish start to 2017

EU carbon prices fell sharply on Thursday to resume the downward path that has rung in new near, with traders continuing to bet on further falls once auctions resume next week.

Quebec carbon market emissions fall 2.6% in 2015 on diesel drop

Emissions regulated by Quebec’s carbon market fell by 1.56 million tonnes or 2.6% between 2014 and 2015, according to data released late last month by the Canadian province’s government, with a sharp drop in diesel consumption leading the way lower.

For more information on Quebec and WCI market, today we introduce our WCI Dossier, which provides a 22-page overview of the initiative’s cap-and-trade programme, including recent price and trading developments, political and legal updates, details on expansion beyond the WCI’s initial participants California and Quebec and potential new members. It also features a summary of key elements by the International Carbon Action Partnership (ICAP).

*** The WCI dossier is the tenth of our comprehensive, regularly-updated intelligence ‘Dossiers‘ on carbon pricing policies. Located in the Resources tab on our home page, each dossier builds into a powerful online research tool with key news, analysis, quotes, data, charts, tables, timelines, supporting documents and links – all in one place. And they can all be exported in printable PDF format for convenient offline reading. ***

COMMENT: Reassured optimism trumped US leadership worries at COP22 -EEM

As a broker, advisor and technology provider within the voluntary carbon market, European Environmental Markets (EEM) has keenly followed developments at the COP22 in order to see if the momentum from the 2015 Paris UN climate talks would translate into further significant developments within our sector and climate finance more broadly.

BITE-SIZED UPDATES FROM AROUND THE WORLD

2C bust – The 2C goal of the Paris Agreement seems out of reach, with 2.5C only possible with much more extreme policy measures, argues US climate economist William Nordhaus in a new paper. He contends that there has been little progress in adopting such measures and dubs the EU’s 2030 emission goal “very modest”. (Climate Home)

Hey big spender – China is to spend 2.5 trillion yuan ($361 billion) on renewable power generation by 2020, Reuters reports. China’s National Energy Administration says the investment will create over 13 million jobs in the green energy sector. Under the plans, low-carbon energy, including nuclear, is to contribute about half of new electricity generation to 2020.

Meanwhile in the UK – Investment in windfarms will fall off a “cliff edge” over the next three years and put the UK’s greenhouse gas reduction targets at risk, a thinktank has found.  More than £1 billion of future investment in renewable energy projects disappeared over the course of 2016, the Green Alliance found when it analysed the government’s latest pipeline of major infrastructure plans, The Guardian reports.  Investment in wind, solar, biomass power and waste-to-energy projects is seen declining by 95% between 2017 and 2020.

Optionality – Shell has transacted the first OTC allowance option trade in Guangdong’s ETS, aiming to hedge the volatility that has helped push prices to a year-high of 16.59 yuan ($2.41) on Thursday.

Managing a coma – Five people are employed around the clock in the control room of the first German lignite plant switched off to protect the climate, according to a feature in Frankfurter Rundschau (in German). They are there to keep the station fit for service, but the head of the Buschhaus plant admits it is a challenge to motivate the team to manage a standstill.  In the coming years, seven more plants are to follow Buschhaus into the lignite emergency reserve with a total capacity of 2.7 gigawatts, equivalent to 13% of Germany’s lignite capacity. The stations are to remain operational for a period of four years so they can produce power within eleven days’ notice in case of emergency. But many experts doubt that will ever be the case. (H/T Clean Energy Wire)

And finally… Giga what? Tesla Motor’s Gigafactory in the US state of Nevada has begun mass production of battery cells, staying on track towards its aim of becoming the world’s biggest factory and doubling the world’s production capacity of lithium-ion batteries by 2018. The move is part of Tesla’s plan to scale up mass-market electric cars and build battery packs to power homes and back up the electric grid. (Bloomberg)

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