CP Daily: Thursday March 22, 2018

Published 00:31 on March 23, 2018  /  Last updated at 16:45 on March 26, 2018  /  Newsletter  /  No Comments

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

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TOP STORY

EU leaders ask European Commission to review Paris Agreement commitments

EU leaders on Thursday called upon the European Commission to draft a new EU long-term climate strategy by early next year, setting the stage for an early review of the bloc’s climate goals before many of them have been made law.

EMEA

France’s Macron keeps up push for EU CO2 price floor, border tariffs

France’s President Emmanuel Macron signalled on Thursday that he will continue to push for an EU carbon price floor that includes a border tariff for non-Paris Agreement signatories, despite the limited support both ideas have received from European partners to date.

EU Market: EUAs scale new peak above €13 as Macron talks up price floors

EU carbon prices briefly broke above €13 to hit another 6.5-year high on Thursday on a strong auction and as French President Emmanuel Macron again talked of the need for a European carbon price floor, but EUA later sank to notch a daily loss.

AMERICAS

Mexico might face a 3-year delay to ETS launch amid policy uncertainty, expert warns

Mexico might delay the implementation of its emission trading scheme by up to three years as a result of a short preparation period and uncertainty over the outcome of the upcoming election, an expert has warned.

ARB accepts proposed cap-and-trade amendments on emissions liability, auction reserve price

California regulator ARB accepted proposed amendments to its cap-and-trade programme on Wednesday that would clarify procedures in light of a recent court case and the market’s link with Ontario.

NA Markets: Prices inch higher in conference-interrupted trade

North American carbon prices notched slight gains this week as many participants attended an emissions markets conference.

ASIA PACIFIC

China ups ante on energy consumption control, threatens penalties

China has issued an amendment to its energy consumption regulations that gives the government more authority to impose caps on thousands of “key energy users” and to sanction those failing to meet their targets.

NZ Market: Trading range tightens as NZ carbon market cools down

New Zealand carbon allowances on Thursday traded within a tight 5-cent range for the eighth consecutive session in a petering out of months of bullish sentiment following the change in government.

AVIATION

Offset restrictions needed to ensure CORSIA integrity, spur new project investment -study

In the absence of any eligibility restrictions, ICAO’s CORSIA offset scheme may not be able to deliver sufficient emissions reductions in aviation by using CERs, according to a study released Thursday.

INTERNATIONAL

Global coal plant construction falls for 2nd year, though capacity still exceeds emissions goals -report

Coal-powered capacity growth continued to drop in 2017 due to increased Chinese regulations and a decline in Indian financial and policy support, though not fast enough to significantly curtail global temperature rise, according to a study released Thursday.

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CARBON FORWARD 2018

SAVE THE DATE: Carbon Forward 2018 – Survive and thrive in the global carbon markets

Don’t miss the 3rd annual Carbon Forward conference and training day. Spend two days with top experts, players, and decision-makers from the global carbon markets as they address today’s most attractive opportunities and pressing challenges. And join us for the EU ETS pre-conference training day organised by carbon market experts Redshaw Advisors, where you will learn how to effectively manage your carbon risk ahead of the looming overhaul of the bloc’s emissions trading scheme.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Spending synthesis – The US Congress released the text of a $1.3 trillion omnibus spending plan on Wednesday night, which largely avoids a proposed 31% cut to the EPA floated in an earlier Trump Administration proposal. The Hill reports that the appropriations bill keeps the EPA budget at $8.1 billion for fiscal year 2018, while also adding $763 mln for other EPA programmes related to water infrastructure and Superfund sites. Furthermore, Axios writes that the plan also discards other Trump administration ideas of eliminating or limiting several Department of Energy (DOE) programmes, such as abolishing the Advanced Research Projects Agency (now slated to get a $48-mln funding increase), cutting the budget of the Office of Energy Efficiency and Renewable Energy by 66% (now kept intact with a budget of over $2.3 bln), and trimming the Office of Science’s funding by 15% (now receiving an $868-mln increase). Congress now needs to pass the spending bill by Friday night in order to avoid the third government shutdown in as many months.

Balancing act – Despite initial promises that Alberta’s carbon tax would be revenue-neutral, the province’s NDP government on Thursday confirmed it would use cash from carbon pricing to balance its books in the long-term. Alberta released its budget for the next fiscal year, which shows the oil-rich province will post a smaller-than-expected $8.8-billion deficit this year.  The budget also estimated that payments made under its hybrid Carbon Competitiveness Incentives programme for heavy emitters would grow to C$541 million this year, up 158% from revenues collected under the predecessor SGER system that ended last year. (CBC, Financial Post)

Exemption song – Meanwhile to the west, the government of neighbouring British Columbia is redoing its fiscal framework for the liquefied natural gas industry in an attempt to secure a final investment decision from LNG Canada. The province announced on Thursday that it will set a C$30/tonne cap on any carbon tax the industry is liable to pay, exempting companies from the increases that are due to raise the rate to C$50 by 2022. However, the rebate on the additional carbon tax would only come if LNG Canada meets its target of being the cleanest LNG facility, in terms of CO2 emissions, in the world. BC’s carbon tax will rise by C$5 to C$35/tonne next month. BC also provided a sales tax exemption on the construction costs for any new LNG facility in the province. (Global News)

Climate costs – The World Meteorological Organisation (WMO) said in its State of Climate in 2017 report on Wednesday that weather and climate-related disasters contributed to losses of $320 billion last year – the most on record. Major contributors were the series of catastrophic North Atlantic hurricanes – fuelled by warm sea surface temperatures – that swept across the US and Caribbean. The trio of Hurricanes Harvey, Irma, and Maria racked up $265 bln in losses in the US alone – the most ever for the country – while the $1.3 bln in damages for the island nation of Dominica reached 224% of its GDP.

And finally… Skipping school – Four large oil firms are seeking to dismiss a landmark climate change nuisance suit filed against them by a handful of California municipalities, claiming the court lacks jurisdiction – an argument the companies also cited as the reason they did not participate in a novel Mar. 21 climate science “tutorial” required by the judge presiding over the case. According to McClatchy, only a lawyer for Chevron – the only remaining defendant which is not currently seeking to dismiss the suit – participated in the tutorial, where the company generally agreed with findings from the UN’s IPCC that human activity is causing climate change. Legal representatives for the other four companies – BP, ExxonMobil, ConocoPhillips, and Shell – indicated they would not be participating in the tutorial because they do not believe the court has jurisdiction.

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