CP Daily: Friday February 3, 2017

Published 23:30 on February 3, 2017  /  Last updated at 09:52 on February 14, 2017  /  Daily Newsletter  /  No Comments

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

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Brussels proposes to extend suspension of extra-European flights from EU ETS

In a highly anticipated move, the European Commission has proposed extending the suspension of extra-European aviation emissions from regulation under its carbon market until ICAO’s global scheme is able to be evaluated after its launch in 2021.

Bilateral deals offer huge CO2 price discount in China’s pilot markets

Companies with the ability to do large bilateral bulk deals can purchase CO2 allowances at huge discounts compared to on-screen trading in some of China’s pilot emissions trading schemes, a carbon trading firm said Friday.

EU Market: EUAs slip again on light selling but hold bulk of week’s gains

European carbon prices dipped for a third straight day on light selling Friday, but managed to hold on to most of Monday and Tuesday’s gains to notch a 4.9% weekly rise.

Sweden yet to find partners on EUA buy-and-cancel plan, sets long-term course

Sweden has yet to enlist any other nations to join it to buy and cancel EUAs as it sets a course to be carbon neutral by 2045.

Election in sight, BC’s NDP proposes carbon tax increase, 2030 emissions target

With an election just three months away, British Columbia’s NDP party, the Canadian province’s official opposition, has pledged to slowly increase the provincial carbon tax from 2020 to align with federal requirements and to adopt a new medium-term climate target.

SK Market: KAUs hit record high for third straight day

Korean CO2 allowances rose another 3% in Friday trade as a court decision against companies suing the government for more allowances added to bullish sentiment with no prospect of fresh volume coming to market any time soon.

Shanghai raises margin requirements for carbon forwards

The Shanghai Clearing House (SCH), the central counterparty in Shanghai’s market for OTC carbon forward contract trading, on Friday raised the margin calls for its four quarterly expiry contracts.

ECOSYSTEM MARKETPLACE: Gorsuch brings distrust of government agencies to Supreme Court

On January 31, US President Donald Trump nominated Neil Gorsuch, a Denver-based 10th Circuit Court of Appeals judge cut from the same conservative cloth as the justice he’s meant to replace, Antonin Scalia. His history with environmental cases is sparse, however, leaving the environmental community to wonder which way he’ll lean on critical policy such as the Clean Power Plan and Clean Water Rule that are currently tied up in litigation.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Hear Louis Redshaw of Redshaw Advisors discuss the challenges ahead for firms in the EU ETS with Argus’ Tom Young.  They discuss how companies will be affected by legislative developments and the falling supply of allowances in the scheme. Louis also provides his expertise on how companies can prepare for market developments, changing allocations and the impending strengthening of the carbon price. Click here to listen to the webinar (registration required).

Something smells – Republicans in the US House of Representatives on Friday approved a resolution to kill Obama-era rules to curb methane from oil and gas drilling on federal lands, but Democrats in the Senate are trying to convince lawmakers on the other side of the aisle to vote against scrapping the regulation in a ballot that’s expected to be close.  The rule is part of Obama’s broader methane strategy, which seeks to cut emissions from the oil and gas sector by 40-45% below 2012 levels by 2025 – targets that were matched by Canada and Mexico.  Democrats argue that capturing the methane instead of flaring or venting it not only reduces GHG emissions but can generate revenues to fund state and federal programmes.  Republicans hold a two-seat majority in the upper house, which is expected to vote on the measure as early as next week.

Benchmark setting – Brussels has published aggregated industrial production data that was used to determine product benchmarks and work out the share of free allocations between sectors under the current EU ETS trading phase (2013-2020). The data was requested by several stakeholders seeking to influence the negotiations for the post-2020 free allocations. (European Commission)

Insetting ideas – Companies from Chanel to Ben and Jerry’s are benefiting from carbon ‘insetting’, writes Meg Wilcox of investor NGO Ceres. She adds that insetting does more than just offset carbon emissions – it helps companies boost resilience and care for the ecosystems that provide their raw materials. (Ensia)

Brexit waits – The UK government has published its Brexit white paper, setting out its framework for exiting the EU. The document gave away little on whether the UK will attempt to detach from the EU ETS. The section on energy sets out how EU legislation currently underpins the trading of gas and power but said the government was considering all options for the UK’s future relationship with the EU on energy. It did say the UK would be leaving the nuclear safety agency Euratom, which, it explains, was established separately to EU agreements and treaties despite making use of EU institutions.

Save Marris – Hot on the heels of his embracement of “clean coal”, Australian PM Malcolm Turnbull is reportedly set to call further into question his environmental credibility with the imminent appointment to his inner circle of Minerals Council policy wonk Sid Marris.  According to the Australian Financial Review, Marris has accepted a role within the PMO and is set to be announced as Turnbull’s energy and climate policy adviser.

And finally… The evolution of denialThe New York Times takes an in-depth look at how the answer from US Republicans when asked about climate change has evolved over time, from what he calls “hard core climate denial” to a more nuanced and well-crafted argument that is axiomatically true while at the same time sowing “enough doubt to justify inaction on emissions.” All of President Trump’s cabinet picks have “laboured to avoid overt denial” but the public should not be fooled, the paper argues. “The deep consensus among climate scientists, arrived at through decades of research, is that human activity is the cause of most of the planetary warming of recent decades, and probably all of it.” Glimmers of hope in the congressional hearings came from the new secretary of state Rex Tillerson, who implied that he might try to keep the US in the Paris Agreement, and from Rick Perry, Trump’s nominee to head the Department of Energy. (Carbon Brief)

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