CP Daily: Tuesday May 9, 2017

Published 22:14 on May 9, 2017  /  Last updated at 19:59 on May 15, 2017  /  Newsletter  /  No Comments

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

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China preps allowance allocation rules for three sectors to kickstart ETS

China has drawn up draft allocation rules for the three sectors expected to be covered by its national carbon market from the outset, revealing plans to hold back a large share of permits until ex-post adjustments are done in order to guard against potentially faulty historical emissions data.

EUAs may hit €35 by 2024 as reforms bite -analysts

EU carbon prices could soar to €35 by 2024 under reforms proposed by lawmakers, five years faster than those suggested by Brussels, though heavy industry looks set to receive no further cuts to its free allowance allocation next decade, analysts at ICIS said on Tuesday.

Quebec fund eyeing first offset investments amid regulatory turmoil, other “alien” risks

A new fund is ready to invest C$20 million in North American offset projects and is eyeing a larger fund of up to C$100 million in the next 18 months, though regulatory uncertainty coupled with other “alien” risks perceived by investors surrounding carbon could hamper its plans.

Bangladesh set to introduce carbon tax

Bangladesh is set to introduce a tax on fossil fuel consumption in this year’s budget in a bid to curb pollution and boost government revenue, according to local media reports.

EU Market: EUAs add 2.3% after another late-day move

European carbon prices continued their recent rangebound seesaw, climbing 2.3% on Tuesday thanks to another late-day move triggered after EUAs broke above a technical level that had been breached to the downside a day earlier.

Uniper hedging steady in Q1 while E.ON generation drops

Utility Uniper held its German forward power hedging levels steady in Q1 compared to the final three months of 2016, it said in its quarterly report on Tuesday, while former parent company and low-carbon generator E.ON saw a sharp drop in output.

EEX clearinghouse partners with financial software firm to expand trading access

European Commodity Clearing (ECC), a subsidiary of German-based energy bourse EEX, has agreed to cooperate with a financial software technology developer to expand access to its commodity markets, including emissions.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Organisational nightmare – Another meeting of Trump administration advisors over whether to pull the US out of the Paris Agreement has been postponed due to “scheduling conflicts”, a White House official told Reuters. The advisors and cabinet officials were due to convene on Tuesday to attempt to resolve an internal debate over whether Trump should keep his campaign promise to withdraw the country from the 2015 pact, according to senior administration officials and several people briefed on the meeting.  The White House official did not say when the meeting would be rescheduled. Meanwhile, new French president-elect Emmanuel Macron defended the deal in his first call with Trump on Monday, Macron’s spokesperson confirmed.

Brass-backed – A group of retired senior military officers is urging US Secretary of State Rex Tillerson and Defense Secretary James Mattis to remain firm in their support for combating global warming as White House officials consider exiting the Paris Agreement, Bloomberg reports. The 17 veterans argue that climate change poses a critical national security risk and say the US must remain engaged in the international effort to fight it, according to letters sent Monday to Tillerson and Mattis. Among the signatories are three four-star veterans, including former Commander of the US Pacific Command Admiral Sam J. Locklear.

Yuge mistake – President Trump would make a “huge mistake” if he pulls the US out of the Paris Agreement, says Todd Stern, US special envoy for climate change from 2009 to 2016. In an article for the Washington Post, Stern says “hardheaded analysis based on the interests of national security and US business leads to the inescapable conclusion that remaining in the agreement is in America’s best interest”. He concludes with a message for Trump: “don’t pull out — it’s a decision you’d live to regret.”

Capped off – Centrica and SSE declined after the UK Conservative Party said it would promise to cap household energy bills if Theresa May wins the June 8 election, accusing the country’s largest suppliers of “unfair” pricing. According to Bloomberg, under the plan, the standard tariffs of the “Big Six” suppliers – Centrica, EDF, E.ON, Innogy’s Npower, Scottish Power, and SSE – will have to be under a limit that will be reviewed by the energy regulator Ofgem every six months. According the the Tories, this will cover 70% of those companies’ customers.

You’ve got no future – German coal-fired power plant Janschwalde – one of the biggest emitters in the EU ETS – “probably has no economic future post-2021” because of new EU limits on emissions for power plants, according to a report by the US-based Institute for Energy Economics and Financial Analysis. A regulatory committee of EU national representatives recently agreed tighter limits (dubbed BREF) that can now be formally adopted by the European Commission and would have to be met by 2021. The lignite-fired power station has installed capacity of 3,000 megawatts, with six 500MW units. Janschwalde is the third-largest brown coal power plant in operation in Germany and was sold to Czechia-based EPH by Vattenfall last year. “While EPH acquired these assets at a knock-down price, we note that BREF may now crystallise the risk in EPH’s strategy by increasing the company’s exposure to environmental liabilities as governments, investors and individual consumers respond to the problems of air pollution and climate change,” the report’s authors wrote. “We therefore question the wisdom of the German state to agree to pay EPH to decommission two of the units in 2022 and 2023 under a standby capacity reserve agreement.” The installation has emitted an average of 24 mt of CO2 annually so far in Phase 3, meaning that its closure would equate to a minor dent in demand for EUAs. (Clean Energy Wire)

And finally… The weapons of capital – Green power provider Greenpeace Energy uses “the weapons of capital” to push for a German coal exit by offering a power contract that lets customers invest in renewables expansion in the country’s lignite areas, Sueddeutsche Zeitung reports (in German). The company “sees itself as the political enabler of the Energiewende and merges business with the commitment” to a cause. With a support amount of €0.01 per kilowatt hour of electricity, customers finance the construction of new solar PV parks in coal mining areas. “We do not want to wait for politicians any longer,” said Nils Müller, a board member at Greenpeace Energy. (Clean Energy Wire)

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