CP Daily: Thursday January 18, 2018

Published 23:38 on January 18, 2018  /  Last updated at 23:38 on January 18, 2018  /  Newsletter  /  No Comments

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

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TOP STORY

Global CO2 trading volume up 5% in 2017, value up 22% as major markets extend rules -analysts

Global traded carbon volumes rose 5% in 2017 to 6.3 billion tonnes of CO2e while the overall value of the markets climbed 22% to €41 billion ($33.5 billion), the Point Carbon analysts at Thomson Reuters said a market review published Thursday.

AMERICAS

Canadian government planning for post-2022 carbon price increase above C$50/t -reports

The Canadian government is making plans to raise its national minimum carbon price above C$50/tonne after 2022, local media reported late Wednesday, citing leaked federal documents.

Utilities urge Massachusetts’ highest court to scrap state cap-and-trade scheme

New England utilities are pushing Massachusetts’ highest court to scrap the state’s new cap-and-trade system, arguing that regulators have overstepped their authority in introducing the rules.

NA Markets: Prices steady as traders straddle compliance periods

Trading activity in North America’s two carbon markets remained at very modest levels this week as the start of their respective three-year compliance periods has left installations relaxed about buying.

Exchange ICE to launch trade in new California, Ontario carbon contracts on Jan. 22

Market operator ICE will on Jan. 22 launch a suite of new California and Ontario carbon allowance contracts.

EMEA

EU Market: EUAs soar to new two-year high as market ponders aggressive buying

EU carbon prices surged past the €8.50 mark on Thursday, hitting a fresh two-year peak in a third straight day of gains that continued to defy bearish fundamentals and predictions about another January sell-off.

EU court upholds decision to deny chemicals firm Ineos more free allowances 

The EU’s highest court on Thursday upheld a German decision to not allocate extra free allowances to chemicals firm Ineos, which had argued it was entitled to the units because its emissions were in liquid form rather than gas.

ASIA PACIFIC

CN Markets: Chinese trading firm makes bet on Beijing carbon market

A Chinese carbon trading firm on Thursday posted a tender for Beijing Emissions Allowances (BEAs), betting on the torpid market coming to life ahead of the mid-year compliance deadline.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Cost cough-up – Germany will have to spend more than $1.2 trillion to meet even the lower end of the EU’s 2050 CO2 cut target of 80-95% below 1990 levels, according to a draft of a study commissioned by the BDI German industry group from Boston Consulting and Prognos. The study raised questions about Germany’s goal of meeting the upper end of the target, saying that would require huge but unspecified levels of additional spending. The analysis suggested expanding the EU ETS to more sectors and said it was imperative to develop underground CCS systems. (Reuters)

The future according to MEI – Major shifts in the global energy landscape, particularly related to EVs and renewables, mean that global CO2 emissions will plateau by 2030, according to a new report by the Energy Insights division of consultancy McKinsey (MEI). However, increased global energy demand means emissions will remain at more than double the level required for a 2C warming pathway. MEI forecasts that by 2030 every fifth car sold globally will be electric and not just in early adopter markets. Sales of EVs will rise from 3% in 2020 to 20% by 2030, however the growth in light-duty electric trucks is expected to be slower, growing from 1% to 12% in the same period. Renewables are expected to take almost all the growth in global power generation through to 2050. MEI expects that in the next 5-10 years it will become more economic to build renewable capacity than operate existing gas- or coal-fired power plants in most markets. Overall, the additional global net capacity of power generation to 2050 will be 80% renewables, with China and India contributing more than 50%. However, despite major growth in the EV market and the increasing dominance of renewables, a rising population and increasing wealth in non-OECD countries will drive significant energy demand growth, offsetting CO2 emission reductions elsewhere.

Falling short – While Alberta expects to see its GHGs reduced by under climate change policies, the province is likely to fall well short of reaching Canada’s emissions targets even under the best-case scenario for its initiatives, according to the province’s latest progress report released last month. The paper projects that with the measures in the provincial NDP government’s climate initiative, emissions will be reduced from 274 mt in 2015 to 254 mt by 2030. Adding in potential reductions from innovation, the figure is reduced to 222 mt by 2030. However, the Canadian government has committed to cutting its emissions to 30% under 2005 levels by 2030, a target that if followed by Alberta would require the province to reach a level of 163 mt by that year. (Calgary Herald)

Blow hard – Output from UK wind farms has topped 10 GW for the first time, setting a new national record, The Independent reports The news was welcomed by experts, who say it is evidence the UK is “poised to lead its peers in wind generation”. The record comes shortly after 2017 was declared the “greenest year ever” due to the number of renewable energy records broken. Separately, the UK’s offshore wind capacity could increase five-fold by the 2030s, cutting carbon emissions and saving on consumer bills, analysis suggests. The step change in the amount of wind turbines in the seas around Britain’s coasts could be achieved with contracts that by 2025 are effectively “zero-subsidy”, a report from Aurora Energy Research said.

On the road to meeting their targets – All large car and van manufacturers in the EU met their CO2 emissions target in 2016, according to data published by the European Environment Agency (EEA) today. The EEA report confirms preliminary findings that the EU fleet average of new vehicles is well below its 2016 emissions target. The new EEA report shows that, based on laboratory tests, the average emissions level of a new car sold in the EU in 2016 was 118.1 grams of CO2 per kilometre, well below the 2015 target of 130 g. A new van sold in the EU in 2016 emitted on average 163.7 grams of CO2 per kilometre, which is already below the 2017 target of 175 g. Manufacturers will have to reduce emissions further to meet the targets of 95 g CO2/km by 2021 for cars and 147 g CO2/km by 2020 for vans.

Cancelled – Puma Energy Colombia has voluntarily cancelled 55,000 CERs created in that country against its obligations under the national carbon tax, according to the UNFCCC. The batch of CERs, which came from a landfill gas-to-energy project, is the largest to date and brings the total used by emitters against the tax to more than 70,000. Read our latest on the Colombian carbon tax here – ANALYSIS: Colombian emitters face offset supply crunch as door closes on foreign units

The year in carbon – Developer South Pole is holding a webinar on the proliferation of carbon pricing across the globe, and on creating transparency on corporate climate risks and opportunities. It will be moderated by CEO Renat Heuberger, with insights from colleagues Jeff Swartz on carbon markets and climate policy and Charles Henderson on corporate climate action.

And finally… Still a chance – Scientists have presented a new, narrower estimate of the “climate sensitivity” – a measure of how much the climate could warm in response to the release of greenhouse gases. The latest assessment report from the IPCC estimates that climate sensitivity is close to 3C, with a “likely” range of 1.5 to 4.5C. The new study, published in Nature, refines this estimate to 2.8C, with a corresponding range of 2.2-3.4C. The narrower range suggests that global temperature rise is “going to shoot over 1.5C” above pre-industrial levels, the lead author tells Carbon Brief, but “we might be able to avoid 2C”.

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