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(This is a free read for non-subscribers) – Planning on attending COP24 in Poland this December? Then prepare for inflated accommodation prices and daily commutes to the venue of potentially two hours or more each way.
Down to the wire: EU govts cleared to hand out free 2017 CO2 allowances to generators just days before deadline
The allocation of free carbon allowances to power generators in EU member states eligible under the bloc’s Article 10c ‘derogation’ programme again came down to the wire this year, with most handing out their 2017 quotas some two weeks or less before the ETS compliance deadline.
European carbon prices rose Friday to post a 3.9% weekly gain as the annual compliance season drew near its close and despite another weak auction result.
The decline in China’s energy intensity continued to outpace national targets in Q1, with the shift towards a cleaner economy boosting domestic demand for gas and further cutting the country’s GHG emissions, according figures published by China’s National Bureau of Statistics (NBS) on Friday.
Below is a table of the closing prices, ranges and volumes for China’s regional pilot carbon markets this week. All prices are in RMB, and volumes in tonnes of CO2e. Data sourced from local exchanges.
California LCFS Roundup: Q4 2017 data shows first yearly credit deficit as ARB holds meeting on programme updates
Data released by California regulator ARB for Q4 2017 this week shows that the state’s Low Carbon Fuel Standard (LCFS) recorded a yearly deficit for the first time in the programme’s history, with the publication coming alongside the agency handing out several fines and conducting the first board meeting on a series of possible amendments.
CARBON FORWARD 2018
Don’t miss the 3rd annual Carbon Forward conference and training day – Oct. 16-18, 2018 in London.
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.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Back in town – Two-week talks to smooth the path to a year-end UN deal on the Paris Agreement ‘rulebook’ start in Bonn next week, with government climate action remaining ‘woefully inadequate’ despite promises of tougher measures, according to Fiji, which will preside at the meeting. (Reuters)
Pruitt’s performance – EPA Administrator Scott Pruitt testified before two House of Representatives subcommittees yesterday, where he was confronted with a barrage of questions from Democratic and some Republican lawmakers regarding a series of controversies that have dogged him since he began heading the agency last year. According to Politico, as expected Pruitt routinely deferred the blame to career staff for various controversies, including allegedly giving unauthorised raises to favourite aides. Additionally, one policy-related topic discussed was whether or not the EPA would engage in further steps to reform the federal Renewable Fuels Standard (RFS2), a hotly-debated point of contention between oil and agricultural interests over the past several months. AgWeb reports that Pruitt cited volatility in the RFS2’s corresponding Renewable Identification Number (RIN) market as one area that warranted further scrutiny. Furthermore, Pruitt said that the EPA had received 24 small refinery RFS2 waiver applications in 2017 and 30 so far in 2018 for facilities producing less than 75,000 barrels of fuel per day to avoid compliance with the RFS2. Biofuels groups have ramped up their efforts in criticising these waviers as undermining the integrity of the programme, with the House Biofuels Caucus penning a letter to Pruitt on Thursday calling for the EPA to disclose information on the refiners applying for these exemptions, which the agency grants in private.
Rule review ready – Pruitt also said during his testimony on Thursday that the EPA would pursue a ‘comprehensive rule’ to change the New Source Review (NSR) regulations under the Clean Air Act, which regulates emissions from power plants. So far, the EPA has rescinded two portions of the NSR provisions that critics say will allow major polluting sources to escape tougher emissions controls as they upgrade their facilities and increase output. However, the EPA has only axed these “once in, always in” and “second guessing” components through policy memos, and codifying these changes through a formal rulemaking process would make them much together for a future administration to undo. Former President George H.W. Bush’s EPA tried to end the “once in, always in” provision, but was stopped by Congress after leaked memos from regional EPA staff showed that these members did not support the move. (Utility Dive)
On the up? – The EU ETS is set to shake its over-supply problem, argues Carbon Tracker’s new analyst Mark Lewis, in a column in the Financial Times. Touting his recent price-busting EUA projections, the former bank analyst argues that it would be a mistake for some EU nations to seek to drive more ambition with an EU-wide carbon price floor for the power sector. He argues this would “risk undermining the effectiveness of the hard-won MSR reform by further loosening the EU ETS cap” and these countries would be better off pushing for a deepening of the EU emission cut goal in line with the Paris Agreement.
More cautious – Taking a more cautious line, Thomson Reuters analyst Hege Fjellheim believes it is far from certain that the price on carbon will be the main driver for the European energy sector’s green transition. In a blog post, she flags the possibility of prices not reaching currently forecast higher levels due to overlapping policies and points out that it will probably hard to achieve more ETS ambition at EU level, leaving some countries to advance alone or in smaller groups.
Pompeo passes – The US Senate confirmed outgoing CIA Director Mike Pompeo as the next Secretary of State on Thursday, following former ExxonMobil CEO Rex Tillerson’s departure from head of the foreign affairs division in March. With several Democrats crossing the aisle to approve Pompeo’s nomination by a 57-42 margin, the former Republican Congressman from Kansas is expected steer US foreign policy on an even further rightward course. Pompeo has drawn the ire of many environmental groups for his past statements doubting the contribution of humans to climate change, as well as having taken large campaign donations from the industrialist Koch brothers, who have a history of funding groups that block climate change legislation and obfuscate climate science. (Time)
Cancelled – ExxonMobil has voluntarily cancelled a further 90,000 Columbian CERs against its obligations under the country’s carbon tax, according to the UN. It brought the total number of Colombian CERs cancelled by the oil major to 1.35 mln. Read more about Exxon’s cancellations here.
And finally… Let it snow, please – A group of American Winter Olympians travelled to Congress this week to explain to legislators how climate change was negatively affecting their sports. The event, hosted by Senators Michael Bennet (D) and Susan Collins (R), featured the athletes express their worries about the future of winter sports, with an increasing amount of competitions forced to use man-made snow. (Climate Nexus)
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