CP Daily: Thursday September 20, 2018

Published 23:54 on September 20, 2018  /  Last updated at 22:33 on September 21, 2018  /  Newsletter  /  No Comments

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

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TOP STORY

California offsets may be held in frozen Ontario registry accounts, data shows

More than half a million California Carbon Offsets may be stuck in frozen Ontario registry accounts after Premier Doug Ford cancelled the province’s cap-and-trade programme, according to an analysis of state data, which if true would mean the multi-million dollar holdings are now worthless and unusable.

EMEA

Poland lodges request for EU to investigate ETS price hike, says some other states agree

Poland has lodged a written request urging the EU to investigate whether EU ETS price increases have arisen due to market manipulation, junior energy minister Tomasz Dabrowski said Thursday.

History lesson: Will EU carbon forge higher like the S&P, or has it peaked like Bitcoin?

EU carbon has retreated from its 10-year high touched last week, prompting one of the market’s top technical analysts to pontificate on where prices could head next.

Expect EUA growth path to resume after sudden crash, say analysts

EU carbon is expected to resume its upward trajectory and quickly rebound from last week’s 30% crash as prices remain some distance from fuel-switch levels that would curb demand, analysts said.

EU Market: EUAs jump above €22 in more choppy trade

EU carbon prices shot above €22 on Thursday, and even briefly touched €23, continuing this week’s highly volatile activity amid surging energy prices.

AMERICAS

NA Markets: RGGI allowances hit new highs as WCI cools

RGGI allowance prices found support at higher levels this week, while California carbon allowance prices continued to slide on the secondary market.

EV coalition launches voluntary offset methodology to fund infrastructure

A joint project between US electric vehicle (EV) stakeholders, an advisory firm, and an offset registry has yielded a new offset methodology to produce voluntary carbon credits from EV charging and help foster the growth of the sector.

US EPA data reveals 11 RFS waiver applications submitted for 2018

A total of 11 entities have now applied for small refiner exemptions (SREs) from the Renewable Fuel Standard (RFS) for the 2018 compliance year, the US Environmental Protection Agency’s (EPA) website showed Thursday.

ASIA PACIFIC

South Korea’s ETS worth $1.54 bln in first three years

Trading volumes in South Korea’s emissions trading scheme doubled in each of the programme’s first three years, with its overall value hitting 1.72 trillion won ($1.54 billion) despite the market being long 0.96% over the period, the government said.

Australia to hold next ERF auction on Dec. 10-11

Australia will hold the next auction under the Emissions Reduction Fund (ERF) on Dec. 11-12, with spending again likely to be below the A$100-million mark, the Clean Energy Regulator said Thursday.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Three amigos – China, Japan, and South Korea will hold a government-backed academic roundtable discussion on carbon markets for a third consecutive year, Japan’s environment ministry has announced. This year’s meeting will be in Tokyo, on Oct. 22-23. Officials will participate and deliver speeches at the event, but as the three nations are at very different stages of developing carbon pricing strategies, focus remains on studies of national pathways rather than actual talks on market links.

Car swap – New petrol and diesel car sales in Europe must be phased out before 2030 if the auto sector is to play its part in holding global warming to the Paris agreement’s 1.5C goal, according to analysis by the German Aerospace Centre (DLR) and commissioned by Greenpeace. Vehicle emissions have barely changed over the last decade and the industry will exhaust its carbon budget within 5-10 years unless there is a radical shift, the DLR scientists said. So far, the European commission has proposed a 30% cut in vehicle emissions by 2030, although MEPs are pushing to raise that to 45%. (The Guardian)

Need them taxes – Fighting global warming will necessarily require taxing carbon emissions, or setting a price on carbon pollution, the World Bank’s chief executive said Wednesday at a G7 environment meeting in Canada. “We believe very strongly that we can send an economic signal by introducing a shadow price for carbon,” Kristalina Georgieva told AFP, referring to a method of calculating a price per tonne of carbon that includes the social costs of pollution. “We are the last generation that can do something to fight climate change but we are also the first generation that has to live with its consequences,” she said. “There is a consensus among scientists and economists that carbon pricing is the best way to signal to economies that the behaviour has to change.”

Must-have cuts – Germany must cut its 46 GW coal-fired capacity by more than half – to 17-19 GW – by 2030 to reach an industry target of cutting emissions by 61% on 1990 levels, an expert told Montel this week. The cuts could be achieved by a carbon price floor, said Felix Matthes, energy expert at the Institute for Applied Ecology and member of the country’s coal exit commission tasked with steering the closure of polluting plants. He proposed a starting point of €20 in 2020, rising to €40 in 2030, adding that if the carbon price was high enough to limit running hours extensively, then an additional 5 GW of coal-fired capacity could remain online in 2030. He said withdrawing this much capacity from the market would result in a power price increase of €2-8/MWh by the end of the next decade, depending on how the closures were implemented. “The important date for the [coal exit] commission is 2030,” he added after one of the commission’s heads called for the closure of up to 7 GW of coal-fired capacity by 2020 with total abolition between 2035 and 2038.

New members night – Powerful US-based oil companies ExxonMobil, Chevron, and Occidental Petroleum are joining a global consortium of oil and gas producers seeking to address climate change, Axios has learned. The companies are the first U.S.-based members of the group, called the Oil and Gas Climate Initiative (OGCI). This is one of the strongest signs yet of how America’s biggest oil companies, under pressure from investors and lawsuits, are joining most other US corporations in working to reduce GHGs despite President Trump reversing America’s course on the matter. OGCI’s purpose is twofold: work toward cleaner operations, particularly in the area of methane emissions; and invest in new technologies, for which members will contribute to a $1 billion investment fund. The group’s companies, which also include BP, China’s CNPC, and Mexico’s Pemex, represent 30% of the world’s oil and gas production, and 20% of the planet’s primary energy consumption. Their clout is now truly global with the addition of American companies, which had been a notable omission since the group’s founding four years ago. CEOs of several major, publicly traded oil companies say they support carbon taxes and back a separate group writing a proposal for one. But the companies are not actively lobbying Congress to embrace the policy.

Removal rights – With climate-changing emissions still inching higher – and the resulting threats from extreme weather surging – sucking greenhouse gases out of the atmosphere must become an urgent priority, backers of “carbon removal” efforts told a panel discussion on the fledgling approach this week. But the vast scale at which these technologies would need to be implemented to meet the Paris Agreement goals raises ethical concerns, according to scientists from Germany’s Mercator Research Institute. They highlight that there has been no systematic evaluation of the ethics of carbon removal methods by the climate assessment community or professional philosophers. “Negative emissions technologies could be a valuable way to avoid dangerous climate change. But they might become an unjust gamble that uses future generations as collateral,” they said. (Nature)

Tight-lipped – Australian companies should do more to disclose their climate risks, financial regulator Asic found after reviewing a fifth of the nation’s top 300 companies. Only 17% of them consider climate change as a risk at all, and many make no or just very general mentions of it in IPOs and annual reports. Outside the top 100, climate reporting has even gone backwards in recent years, the regulator found, as only 14% of reports contained climate change mentions in 2017, compared to 22% in 2011. (Guardian)

Nuclear sign off – California Governor Jerry Brown signed a bill Wednesday that would protect the environmental, workers, and the local community during the closure of Diablo Canyon nuclear power plant. Pacific Gas & Electric (PG&E) announced in mid-2016 that it would close California’s lone nuclear facility by August 2025. At the time, PG&E said it would replace the generation with zero-emitting sources, but the California Public Utilities Commission did not approve a proposed procurement plan with some renewable sources and energy efficiency projects. Senate Bill 1090 (SB 1090) would require PG&E to replace the power plant’s generation with zero-emitting sources, and mandates a $350 mln employee retention programme and $85 mln community impact mitigation programme.

HFC fiasco – The US EPA is weighing limiting an Obama-era rule on HFCs that it says would lead to a significant increase in GHG emissions. A Wednesday proposal from the agency would rescind the rule that sought to extend leak repair requirements for large refrigerant systems to include those that relied on HFCs, Politico reports. “EPA says it now believes it does not have the authority to set leak requirements for non-ozone depleting substances, such as HFCs. The proposal would result in increased greenhouse gas emissions equivalent to 3 million metric tonnes of carbon dioxide, equal to the annual emissions of 630,000 passenger vehicles, according to EPA’s GHG calculator.”

Better off – The Canadian federal government’s revenue-neutral carbon pricing plan could end up benefiting most households financially, according to new research. The claims are made by a paper to be released by Canadians for Clean Prosperity, a non-partisan group led by Mark Cameron, ex-policy director to Stephen Harper, that promotes putting a price on pollution and cutting taxes. The research by environmental economist Dave Sawyer of EnviroEconomics suggests that in this scenario most households, regardless of income level, would receive more money from the federal government than they would pay in carbon taxes. The national Progressive Conservative party has long railed against the Liberals’ “tax on everything”, but the study of three provinces suggests those households — particularly at the lower end of the income spectrum — would end up better off. The amount they receive would rise over time in line with the direct carbon tax, which will start at C$20/tonne next January and rise to C$50 in 2022. (National Post)

Not a quitter – Canada’s environment minister Catherine McKenna has said she’s no “quitter”, despite calls from Canada’s most prominent environmentalist for her to leave her job, and a G7 meeting that didn’t shift her American counterpart’s opposition to the Paris Agreement, the Globe and Mail reports. David Suzuki described her as an “apologist” for a government that supports the fossil fuel industry, in a story published by La Presse yesterday. (Carbon Brief)

Not a green day – Ontario’s Progressive Conservative Party introduced legislation Thursday to repeal the Green Energy Act. The former Liberal government approved the 2009 act as a way to expand renewable energy product by including feed-in tariffs on various types of renewable energy production. Repealing the proposed legislation would also wipe a portion of the act that prevent local municipalities from blocking solar and wind farms.

One great city – Glen Murray, formerly Ontario’s environment minister and Canadian think-tank Pembina Institute’s executive director, is moving back to his hometown of Winnipeg to join Emerge Knowledge Design, a company that sells software to help governments track recycling and recovering resources. Murray, who was mayor of the Manitoba capital from 1998-2004, told 680CJOB that he had been homesick and had “no desire” to go back into politics after resigning last year. As a Liberal MPP and cabinet minister in Ontario, Murray saw the implementation of the province’s now shuttered cap-and-trade programme, though he noted at the Global Climate Action Summit (GCAS) in San Francisco last week that lawsuits resulting from the cancellation of the ETS could prompt the ruling PC government in Ontario to revive some sort of carbon reduction scheme. (Global News)

Fracking rebellion – Conservative British MPs are preparing to rebel against the government over its proposal to allow fracking companies to carry out exploratory drilling without planning permission, The Times reports. About 20 Conservative MPs are expected to vote against the proposal, which is subject to a public consultation, if ministers decide to try to push it through parliament next year. Labour has pledged to ban fracking and the government has a working majority of only 11. Meanwhile, energy company Cuadrilla has received the final go-ahead from the government to frack a second exploration well at a site in Lancashire, according to the Press Association.

The wonderful thing about TIGRs – Carbon offset firm ALLCOT Group has originated and traded 58,000 TIGRs in Latin America so far this year, marking the first such deals on the continent. The units were sourced from two hydro projects in Guatemala. TIGRs (Tradable Instrument for Global Renewables) are RECs (Renewable Energy Certificates) traded on the online TIGR Registry operated by APX.

And finally… Deadly delay – The government of the German state of North Rhine-Westphalia (NRW) has stopped the clearing of anti-coal activist camps in Hambach Forest “until further notice” after a journalist fell to his death, writes Der Tagesspiegel. “We cannot simply return to business as usual,” said NRW interior minister Herbert Reul. According to the police, a journalist broke through a suspension bridge between two trees and fell 15 metres. He later died from his injuries. There was no police operation ongoing near the scene of the accident, according to a police statement. Clearing of the activist camps in the embattled Hambach Forest – which energy company RWE wants to cut down for the expansion of a nearby lignite mine – began on Sep. 13 and has overshadowed the ongoing talks in Germany’s coal exit commission. (Clean Energy Wire)

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