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TOP STORY

BRIEFING: Australia’s emerging electricity sector carbon pricing market

Australia this week finalised the design of its proposed National Energy Guarantee (NEG), including a decision to allow a limited number of domestic offsets, paving the way for a carbon pricing scheme of sorts to emerge in the power sector if the policy wins the backing of state ministers next month.

ASIA PACIFIC

China’s Guangdong keeps ETS emission cap level amid national market limbo

China’s biggest provincial pilot emissions trading scheme released its 2018 allocation plan on Thursday, keeping CO2 caps at last year’s levels as the central government has urged stability in the pilot markets.

AMERICAS

NA Markets: WCI ignores Ontario cap-and-trade repeal as RGGI trends upward

North American carbon prices and volumes rose modestly along both coasts this week as the WCI market shrugged off the introduction of a bill to rescind Ontario’s cap-and-trade programme, while increased buying helped lift RGGI allowances.

California LCFS prices shake off waiver news to hit another new high

California Low Carbon Fuel Standard (LCFS) prices overcame a slight retreat in prices this week to reach another record on Thursday, after market participants digested reports that the US federal government may end the state’s higher fuel economy and zero-emissions vehicle (ZEV) standards.

EMEA

EU Market: EUAs recover from auction-led dip below €17

EU carbon prices held above €17 on Thursday, briefly dipping below that mark earlier in the session on a weak auction and sliding power prices before a late recovery sent EUAs back towards the previous settle.

Germany’s EnBW advances hedging over Q2 but still lags previous levels

German utility EnBW advanced its Y+2 hedging considerably over the second quarter, but this still left the company somewhat less hedged overall compared to a year earlier.

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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 – 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.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Mid-century makeover – Six US Northeast states plus New York are not on pace to reduce emissions at a level required to hit their 2050 targets. According to Mike Calviou, senior vice president of strategy and regulation at utility National Grid, these states would have to triple the GHG reductions made between 1990 and 2015 to meet their goals, most of which necessitate a drop in emissions of 80% below 1990 levels by mid-century. To do this, Calviou said that the electricity sector would need to achieve a 67% zero-carbon electricity supply, instead of 45% today; a supply of over 10 million electric vehicles on the road, up from under 75,000 presently; and a doubling of efficiency retrofits alongside the conversion of nearly 5 mln oil-heated buildings to electric heat pumps or natural gas. (Axios)

Upon further analysis – The widely-expected release of lower fuel economy standards for cars and light-duty trucks, along with the revocation of California’s separate waiver and zero-emission vehicle (ZEV) mandate, will be delayed. Sources told Politico that the extra time will give the EPA and National Highway Traffic Safety Administration (NHTSA) an opportunity to conduct an analysis of their proposal, giving them better odds of surviving a court challenge once they release the final plan. The rollback announcement is now set for the middle of next week, though that timeline could also slip.

Which is it? – President Trump attended a roundtable at an Iowa community college on Thursday where he told attendees from the major corn- and biofuel-producing state that he was “getting very close” to approving a year-round waiver for 15% ethanol blends (E15). However, that contradicted statements made by EPA Acting Administrator Andrew Wheeler on Tuesday, who said that any efforts to reform the federal Renewable Fuel Standard (RFS) would need to come as part of a package deal that may include allowing exported biofuels to qualify for Renewable Identification Numbers (RINs). Although the biofuels industry has been supportive of allowing the E15 waiver, previous rumours this summer that the EPA would include exported RINs as part of a scuttled RFS reform proposal caused biofuel credits to hit five-year lows amidst fears of an even greater market oversupply. (Quad City Times)

Invalidation inquiry – A group funded by a major Arizona utility filed a lawsuit last week alleging that over half the signatures of a ballot initiative to bring the state to a 50% Renewable Portfolio Standard (RPS) are invalid. Arizonans for Affordable Energy (AAE) – backed by Pinnacle West, the parent company of utility Arizona Public Service – challenged roughly 270,000 of the 480,000 signatures of the ballot initiative, arguing that the signatories are not residents of the state and citing other irregularities with the petition. Local media reports that a Maricopa County Superior Court judge will determine if AAE can challenge each signature or if a random sampling can make the determination. (Utility Dive)

Survey says – Almost two in three Canadians (64%) say it should be individual provinces, not Ottawa, that determine the appropriate path to reduce carbon emissions, according to a poll conducted by Angus Reid. The rest, (36%) say the federal government should have the power to implement its own plan if necessary.  Among the other findings:

• Support for the federal carbon tax sits at 45%. This is relatively unchanged from last year (44%) but represents a significant drop from 56% support for the idea in 2015.
• Just over half of all Canadians (56%) say global warming is real and primarily caused by human industrial activity, while 20% say it is real but caused by natural processes. The rest are split between uncertainty (11%) or outright disagreement (14%).
• 72% of Canadians think the Saskatchewan government is right to challenge Ottawa’s backstop programme in court, though the country is evenly divided over Ontario Premier Doug Ford’s plan to scrap cap-and-trade.
• 53% said they would support cap-and-trade in their own province, with Quebec the highest at 65% and Alberta and Saskatchewan the lowest at just over 30%. That compares to 74% of Canadians who said back in 2015 they would support a provincial carbon market.
• 47% said they would support a provincial carbon tax, while more than half of respondents doubted that Canada will meet its obligations under the Paris Agreement.

Well blow me down – Europe added 4.5 GW of wind energy capacity in the first half of 2018, according to figures released today by WindEurope. The figure is down on the same period last year (6.1 GW) though is in line with expectations. There was 3.3 GW of onshore wind, driven by Germany (1.6 GW), France (605 MW) and Denmark (202 MW). The 1.1 GW of offshore wind was mainly in the UK (911 MW), Belgium (175 MW) and Denmark (28 MW). Germany is set to install new offshore wind in the second half of the year. “For the whole of 2018, we expect to see 3.3 GW new offshore wind and 10.2 GW of onshore wind. This will mean 13.5 GW of new wind capacity in total for the year,” WindEurope said.

And finally… No relief, part 2 – As hotter temperatures become the new norm, heat-related deaths could triple in the UK by 2050, according to a new report from the government’s Environmental Audit Committee (EAC). In their report, the MPs said that the country is “woefully unprepared” for deadly heatwaves, with the government ignoring warnings from its official climate change advisor. Already, one in five homes today dangerously overheats during heatwaves, and 400 heat-related deaths occurred during the hottest day in 2016 alone. Forecasters say Friday could be the country’s hottest day on record. (The Guardian, Carbon Brief)

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