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- EU lawmakers strike deal on energy efficiency to confirm more climate ambition
- California’s ARB posts latest thinking on carbon market allowance revenue, assistance factors
- Ontario carbon allowances remain eligible for WCI compliance, but much larger questions remain
- RBS fraud lawsuit: Former trader says initial rise in spot EUA volume not suspicious
- EU Market: Late selling knocks EUAs to fresh 1-mth low, as traders eye options expiry
- Bulgarian power plant inks €79m EU carbon allowance deal with Statkraft Markets
- NZ Market: NZUs edge up from 6-mth lows as buyers take advantage
- SAVE THE DATE: Carbon Forward 2018 – Survive and thrive in the global carbon markets
EU lawmakers agreed on a 32.5% bloc-wide energy efficiency target late on Tuesday, which along with a scaled-up renewables goal would mean the bloc exceeding its 2030 emission goal and curbing demand in the EU ETS.
California regulator Air Resources Board (ARB) released a preliminary discussion draft on Tuesday that would give utilities more options for spending consigned allowance revenue in the state’s cap-and-trade programme, while also updating industry assistance factors and offset protocol procedures.
Ontario carbon allowances held in Quebec and California will remain valid for compliance following Ontario’s departure from the WCI programme, though it remains unclear how the three jurisdictions will manage the fallout from Premier-designate Doug Ford’s decision to kill the province’s carbon market.
A sharp rise in EUA spot trading in early 2009 was initially thought to be more likely due to a natural maturing of the carbon market rather than tax fraud, according to a former trader at UK bank RBS on Tuesday during a trial over a £160 million ($212 mln) lawsuit.
European carbon prices fell to a new one-month low on Tuesday as late selling wiped out earlier gains prompted by the day’s bullish auction.
The Bulgarian unit of US-based power company ContourGlobal has inked a €78.6 mln deal to buy EU carbon allowances from Germany’s Statkraft Markets.
New Zealand carbon allowances edged up from 6-month lows on Tuesday as some buyers stepped in to take advantage of the bargain prices.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Low-carbon cash – Limiting global warming to 1.5C above pre-industrial levels will require an extra $460 billion of investment in the low-carbon economy over the next 12 years, according to a new study. Published in Nature Energy on Monday, it found that this amount is 50% higher than the $303 billion necessary to meet a 2C limit, and nearly 250% more than the extra $132 billion in low-carbon investment required between 2016 and 2030 to meet countries’ NDC targets. Coal investment would not change drastically in either the 1.5C or 2C scenarios, since a significant downscaling of the fossil fuel is already essential in meeting the latter target. (Carbon Brief)
Hands full, problem child – Speaking at the 9th Petersberg Climate Dialogue in Berlin this week, German Chancellor Angela Merkel said Germany will make the security aspects of climate change a priority for its two-year term as non-permanent member in the UN Security Council. Germany itself has “its hands full” to reach its 2030 climate targets, she said, after the government earlier this month admitted it would miss its 2020 targets by a country mile. The country has to decide how to phase out lignite-fired power, as well as decarbonise other sectors. “Our big problem child is transport,” she said, adding that Germany’s climate policy needs to become “more binding”. Germany’s grand coalition government has tasked environment minister Svenja Schulze with drafting a climate protection law. (Clean Energy Market)
Battery boom – Wind and solar are set to surge to almost “50 by 50” – 50% of world generation by 2050 – on the back of precipitous reductions in cost, and the advent of cheaper and cheaper batteries that will enable electricity to be stored and discharged to meet shifts in demand and supply. That’s according to Bloomberg NEF, which published its annual long-term analysis of the future of the global electricity system – New Energy Outlook (NEO) 2018. The 150-page report draws on detailed research by a team of more than 65 analysts around the world, including sophisticated modeling of power systems country-by-country, and of the evolving cost dynamics of different technologies. BNEF predicts that lithium-ion battery prices, already down by nearly 80% per MWh since 2010, will continue to tumble as electric vehicle manufacturing builds up through the 2020s. NEO 2018 sees $11.5 trillion being invested globally in new power generation capacity between 2018 and 2050, with $8.4 trillion of that going to wind and solar and a further $1.5 trillion to other zero-carbon technologies such as hydro and nuclear. This investment will produce a 17-fold increase in solar photovoltaic capacity worldwide, and a sixfold increase in wind power capacity. The levelized cost of electricity, or LCOE, from new PV plants is forecast to fall a further 71% by 2050, while that for onshore wind drops by a further 58%. These two technologies have already seen LCOE reductions of 77% and 41% respectively between 2009 and 2018.
Another casualty – Ontario’s incoming Progressive Conservative government is scrapping the province’s Green Energy Fund, which offered thousands of dollars in rebates to homeowners and businesses who completed energy-efficient renovations. The Liberal government launched the programme in 2017 with C$377 million in cap-and-trade revenues, which premier-designate Doug Ford has also vowed to scrap. The Liberals’ last budget earmarked another $1.7 billion for the programme in the coming years. According to the fund’s website, those who have already signed up for a rebate will still be eligible if the work is completed by the end of August, and the rebate application is submitted by the end of September. More than 140,000 people had taken advantage of the initiative by receiving home energy audits and free smart thermostats. (CTV)
PAC push – A group of veteran conservative political leaders are launching a political-action committee to push for a US carbon tax, a move potentially funded by several large corporations that could test Republican appetite to act on climate legislation. According to the Wall Street Journal, the effort would put financial, advertising, and lobbying muscle behind a policy proposed last year that called for taxing carbon emissions and returning the revenue as a dividend to Americans. The new group, called Americans for Carbon Dividends and co-chaired by former US senators Trent Lott and John Breaux, hopes to build momentum for legislation that Congress could pass after the 2020 presidential race. A number of major corporations that have already come out in support of the policy are said to be weighing financial commitments to the political group, including Exxon Mobil and Royal Dutch Shell.
Bankruptcy or bust – California utility PG&E has told state lawmakers that it may have to declare bankruptcy or reorganise, depending on the extent of its liability for wildfires that devastated the state last October. The company, which is one of the state’s largest emitters, was deemed by California’s fire management agency earlier this month to have caused 12 wildfires from electric equipment that ultimately killed 18 people and burned hundreds of square miles. PG&E previously declared bankruptcy in 2001 during the state’s electricity crisis and has said that the state must address issues regarding insurance affordability and wildlife liability, along with warning the federal Securities and Exchange Commission about its significant impending losses from 10 of the fires. (Utility Dive)
Lacking funds – Rhode Island’s final budget for fiscal year 2019 has not included money to study the costs of a state-wide carbon tax as called for in legislation that was signed by Governor Gina Raimondo last year. While S-108 called on the state Office of Energy Resources (OER) to conduct the study, the department couldn’t come up with the estimated $150,000 to $250,000 in funding, though the commissioner of the OER said that the department is working on soliciting backers for the study. Both the House and Senate versions of a bill that would have implemented a $15/t carbon tax in the US’ smallest state were halted by committees in their respective chambers this spring. (EcoRI)
Feasibility first – US refiner Occidental Petroleum and ethanol producer White Energy announced on Tuesday that they will explore the economic feasibility of a carbon capture, storage, and utilisation project (CCUS) that would be designed to receive credits from the recently expanded 45Q federal tax credit and draft CCUS protocol under California’s Low Carbon Fuel Standard (LCFS). The project, located two of White Energy’s Texas ethanol facilities, would capture CO2 and transport it to Occidental’s enhanced oil recovery (EOR) operations. The study is expected to last six months, and if feasible, the project could start operating in 2021. The announcement came at the CO2NNECT conference in Wyoming, where six US governors also unveiled the Governors’ Partnership on Climate Capture. The group will undertake initiatives that further the development and deployment of CCUS technologies across the country.
Master methodologies – The Alberta Climate Change Office (ACCO) has published the final quantification methodologies for the following chapters of the province’s Carbon Competitiveness Incentive Regulation (CCIR): stationary fuel combustion; industrial processes; imports; production; CO2 emissions from biomass; and measurement, sampling, analysis, and data management. All those chapters except biomass are mandatory quantification methodologies for facilities subject to the CCIR and submitting interim compliance and/or annual compliance reports. Any forecasting facilities that must submit a report for Aug. 15 on the second quarterly period of the CCIR will be required to use the quantification methodologies prescribed in the above chapters.
Birds of a feather – A study published recently in the journal Environmental Politics found that Americans who don’t believe in climate change are more likely to be of older age, white and Republican. They are also far more likely to hold racist beliefs and have high levels of racial resentment. The paper notes that Barack Obama, the first African-American President, mentioning climate change in his State of the Union address and joining the Paris Agreement caused a significant backlash among white Americans who began disbelieving in climate change. (Daily Mail)
And finally… “Out of control” – EPA administrator Scott Pruitt’s idea to have a “red team/blue team” exercise on the validity of climate change science was panned even by members of the White House staff, according to emails obtained by E&E News. Mike Catanzaro, President Trump’s top energy adviser, sent an email in July 2017 to the head of the EPA’s policy office Samantha Dravis expressing his concerns. “There are a lot of press reports about EPA’s planning on this. None of it is being run by us,” Catanzaro wrote. “This seems to be getting out of control.” Previous emails from the EPA showed that the agency was working on a draft press release on the exercise in Nov. 2017 to coincide with the government’s Fourth National Climate Assessment, but White House chief of staff John Kelly reportedly shut the process down in December. (The Hill)
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