CP Daily: Wednesday February 21, 2018

Published 23:38 on February 21, 2018  /  Last updated at 00:14 on February 22, 2018  /  Newsletter  /  No Comments

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

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TOP STORY

Analysts expect WCI price lift-off regardless of result of bumper auction

WCI allowances are likely to lift from the market’s auction reserve price in the coming months but could surge more steeply if Wednesday’s record-breaking auction fails to sell out, according to analysts at ClearBlue Markets.

AMERICAS

California’s LCFS rulemaking proposal calls for greater GHG cuts

California officials released unofficial rulemaking documents to the Low Carbon Fuel Standard (LCFS) late on Tuesday, featuring more ambitious emissions reductions targets than previously discussed.

BRIEFING: Understanding California’s Low Carbon Fuel Standard (LCFS)

A concise guide to the programme, detailing principle targets and scope, progress and latest developments.

UPDATE- Oregon ‘cap-and-invest’ amendment would buy legislators over a year to hammer out programme design

(Updates Wednesday’s article with comment from primary bill sponsor Representative Ken Helm (D))

A new proposed amendment to Oregon’s ‘cap-and-invest’ proposal would temporarily strike the section of the bill governing programme design while keeping the more stringent GHG cap, a move that one key legislator told Carbon Pulse could be vital in ensuring that the legislation passes during the 2018 term.

Ontario releases two new draft offset protocols for public review

Ontario’s Ministry of the Environment and Climate Change (MOECC) released two new draft offset protocols on Wednesday and launched a 45-day public review and comment period.

EMEA

EU lawmakers risk undermining ETS price signal because reforms can’t cope -analysts

EU ETS prices could be slashed by as much as half their expected levels next decade as lawmakers prepare clean energy goals that will spur emission cuts steeper than the carbon market’s supply-curbing reforms can cope with, Thomson Reuters analysts said on Wednesday.

EU Market: EUAs drift further from €10 despite improved auction signals

EU carbon prices fell for the second successive session on Wednesday to give back almost all of Monday’s gains that had pushed prices back towards their six-year high above €10.

Iberdrola’s ETS-covered thermal output drops 10% amid coal exit

Spain-based utility Iberdrola reported a 10% drop in its ETS-regulated thermal output over 2017 as the firm’s closure of its last UK coal plant curbed its EUA demand.

EU’s top climate official Delbeke to step down in reshuffle

The European Commission’s top climate official Jos Delbeke is to leave his post after eight years as part of a wider reshuffle that sees him replaced by Mauro Petriccione, a senior commission trade official and Italian national.

ASIA PACIFIC

Australian government proposes to further dilute CO2 regulations for major emitters

Australia’s Department of Environment and Energy has released a proposal to reform its Safeguard Mechanism, a move that would make it easier for companies to increase their CO2 caps and exempt them from auditing their carbon output.

Tokyo ETS emissions marginally down in FY2016

CO2 emissions from the roughly 1,300 participants in the Tokyo emissions trading scheme fell 0.1% last compliance year, with the vast majority of companies already having exceeded their 2019 goals.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Mayors to Pruitt: “Don’t do it”- The group Climate Mayors published a joint letter on Tuesday calling on EPA Administrator Scott Pruitt to not carry out his efforts in repealing the Clean Power Plan. The letter, signed by 236 mayors from 47 states, cited a study from Pruitt’s own EPA that found tens of thousands of additional deaths would occur in the US if global temperatures exceed the 2C goal agreed upon in the Paris Agreement. The mayors also highlighted the massive costs that climate change-fueled disasters would have on coastal properties, including the loss of between $66 to $106 billion to sea level inundation by 2050. The EPA begins its latest round of public hearings on repealing the Obama-era policy on Wednesday. (InsideClimate News).

Capacity crunch – The lead cross-party industry committee of EU Parliamentarians took a stronger stance than member states on regulating so-called capacity mechanisms that would limit payments to coal-fired and less efficient gas-fired plants by attaching emissions limits to capacity payments. The vote is likely to set the parliament’s position ahead next month’s ballot of the whole assembly before final talks on the bill with member states. (Reuters)

Power it up – Australia’s federal government has criticised state administrations for setting “too ambitious” renewable energy targets, claiming it puts the nation’s energy security at risk. But rather than stand down, South Australia’s state Labor government says it will set a 75% renewable energy (and 25% storage) target by 2025 if it wins next month’s state elections. Its previous target was 50%, but that has already been met. (RenewEconomy)

Don’t wait – Each five-year delay in meeting the goals of the Paris Agreement could drive sea levels to rise by an additional 20cm by 2300, according to a study led by the Potsdam Institute for Climate Impacts in Germany and published in the journal Nature Communications. The findings reiterate that “peaking global CO2 emissions as soon as possible is crucial for limiting the risks of sea level rise”. (Carbon Brief)
Off to a rough start- NOAA reports that global temperatures over land and ocean surfaces were 0.71C warmer in January than the 20th century average, furthermore ranking as the fifth highest January temperature since 1880. Additionally, the extent of Arctic sea shrunk 42,500 square miles compared to last year’s record low, 9.4% below the 1981-2010 January average. (Axios)

Fossil tax – The EU should raise taxes on fossil fuels to help meet goals on climate change and plug a budget gap after Britain leaves the bloc, former senior EU officials said in a letter to EU leaders ahead of a discussion by European leaders this Friday on options for the bloc’s next long term budget from 2021 to 2027. The taxes were not among those suggested by the EU Commission, which has instead proposed that a share of the revenue from national auctions of EU ETS permits be used. (Reuters)

Peaking time – Peak oil demand could occur by the late 2030s, according to the  latest annual energy outlook from oil major BP, the first time that BP has shown oil consumption peaking in its long-term forecasts. This is due to a revolution in transport due to self-driving electric cars and a worldwide plastic ban. BP’s main scenario suggests that oil demand for use in cars, trucks, power generation, buildings and industry will decline from 2030-40, with only demand for the “non-combusted” sector and non-road transport such as aviation, shipping and rail still growing after this time. (Financial Times)
And finally… You win some, you Cruz some- Senator and former Republican presidential candidate Ted Cruz gave a speech on Wednesday blasting the federal Renewable Fuel Standard (RFS2) and corresponding Renewable Identification Numbers (RINs) market, a position that has repeatedly drawn the ire of both the biofuels industry and his GOP colleagues from the Midwest. The speech took place at refiner Philadelphia Energy Solutions (PES), which last month announced it was filing for bankruptcy over what it attributed to the unmanageable costs of complying with the RFS2. Cruz claimed that if he was elected president, he would have ended the program, and furthermore called for placing a cap on the price of RINs, rumoured to be at 10 cents/RIN. However, several analyses have suggested that the PES bankruptcy was caused not by RFS compliance, but rather by systemic mismanagement, and that capping RINS at 10 cents each would wipe out a massive portion of the ethanol and biodiesel industry.
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