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The UK will exit the EU carbon market in late March 2019 if Brexit negotiators fail to strike a divorce deal, the British government said in a notice late Friday, while also suggesting UK entities consider opening registry accounts on the continent to retain access to their emission unit holdings.
**Free read** – The UK will be excluded from participating in the EU ETS under a ‘no deal’ Brexit scenario, the government announced late on Friday.
The Polish government is preparing a plan to compensate industry and consumers for rising EUA prices, the country’s energy minister told local media, adding that he will again request that Brussels intervene in the market because the conditions for action have now been met.
European carbon prices added 2.5% on Friday to finish the week back above €20 after plunging to a one-month low in the previous session.
China’s environment ministry has clarified the structure and role of its climate change division, adding the construction of the national emissions trading scheme to its list of duties after omitting the ETS from an initial overview published last month.
New Zealand carbon allowances on Friday came down from the record highs seen earlier in the week, with some observers saying a correction to below NZ$25 might be due.
Australia’s Clean Energy Regulator issued 228,473 new carbon credits this week, with all recipients under contract with the Emissions Reduction Fund and leaving no fresh supply for the secondary market.
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.
Oregon Republican state representative Knute Buehler said this week during a debate that he would oppose legislation to develop a carbon market if elected on Nov. 6 in the state’s tight gubernatorial race, the second major climate policy the candidate has come out against.
The New Hampshire Supreme Court said Friday it will hear an appeal from US-based utility Eversource to construct its cross-border Northern Pass hydroelectric line after a state committee denied the project necessary permits earlier this year.
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Don’t miss the 3rd annual Carbon Forward conference and training day – Oct. 16-18 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.
Climate Change 2018
New frontiers in innovation, finance and climate science
15-16 October | Chatham House, London
The 22nd annual Chatham House Climate Change conference will convene policymakers, climate scientists, NGOs, and business leaders to examine how changing business models and technological frontiers can drive sustainability and decarbonization as well as provide practical solutions to mitigating and managing climate change.
Book online: https://cht.hm/2OOO8m5
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Another carbon exchange? – Tibet is considering setting up its own regional carbon trading exchange, according to reports in domestic media. The local government has released an environmental action plan, saying preliminary research suggests Tibet’s carbon sink could have a value of over 30 billion yuan ($3.45 bln) in a carbon market, although it lacks the ability to monetise that as Tibet does not operate a carbon exchange. No details were available on how a Tibetan carbon trading market would work or who would buy the credits. Neighbouring Sichuan province has exchange-based voluntary carbon offset trading, although liquidity is low due to a lack of buyers.
Do vote with us – A new state-wide poll from news site Crosscut and Elway Research has found 50% approval for Washington’s I-1631 $15/t carbon fee ballot initiative among the 400 registered voters polled. That support is greater than 2016’s voter-led carbon tax I-732, which managed only 40% support in that October’s Elway poll and ended up only garnering 41% of the vote in the November election. However, the research firm’s president Stuart Elway noted that passage is still far from certain, as two-thirds of the initiatives he has seen over the past four decades have lost ground from summer to election time. Of the remaining voters polled, 36% were against I-1631 outright, while 14% were undecided.
Don’t vote for us – Voters in Wentworth in Australia face a by-election in eight days to elect a candidate to take over from Malcolm Turnbull, who left parliament as well when he stepped down as PM in August. The district is notoriously conservative, and has been held by the Liberal party since World War II, but is facing challenges this time. John Hewson, who led the Liberal party in the 1990s, is now urging Wentworth voters to not vote for the party due to its “grossly irresponsible” lack of action on climate change. “It’s a national disgrace,” he told SBS News Service. Turnbull’s son is also advocating for voters to reject the Liberals, the Guardian reports. Should they fail to retain the MP for Wentworth, it would lose its parliamentary majority.
That’s one way to do it – Brazil’s presidential front-runner Jair Bolsonaro would address chronic energy shortages in the country by expanding nuclear and hydroelectric power in the Amazon despite environmental concerns, the adviser overseeing his infrastructure plans told Reuters. The adviser said a Bolsonaro administration would finish constructing the massive Belo Monte hydro dam on an Amazon river tributary, a project that has been criticised for uprooting indigenous communities and damaging the biome, as well as reviving plans for other shelved dams. The far-right Bolsonaro is far ahead in the polls ahead of the Oct. 28 run-off election. (Carbon Brief)
Coal corner – German economy and energy minister Peter Altmaier has proposed quickly retiring 5 GW of lignite power generation capacity with a view to the country’s ongoing talks about a coal phase-out, sources told the Rheinische Post. In addition, he suggested that utility Uniper’s new hard coal plant in Datteln should not be connected to the grid. Uniper said it would be foolish to continue the operation of older power plants instead of the relatively clean Datteln plant. Separately, the Frankfurter Rundschau reported that the Green party looks set to increase its climate ambitions by calling for the immediate retirement of the country’s 20 most dirty power plants. Because of government inaction on coal, at least 10-11 GW of coal capacity must be switched off, according to a position paper by party head Annalena Baerbock and Oliver Krischer, deputy leader of the party’s parliamentary group. The paper also calls for an end to lignite mine extensions and speeding up the roll-out of renewables. During last year’s unsuccessful coalition talks with the Greens and the pro-business FDP, Altmaier’s Christian Democrats (CDU) also proposed the retirement of 5 GW and later agreed to retire 7 GW.
Cheque please – Meanwhile, Germany faces fines to the tune of €2 billion by 2020 for failing to meet emissions reduction targets in sectors not covered by the EU ETS, according to the Frankfurter Allgemeine Zeitung. The government will have to buy up emissions allowances from other states with a better record of meeting the EU targets, especially from Eastern Europe, the article says. So far, Germany was able to compensate for missing certain targets through saving more emissions than formally necessary in other areas, “but since October, every additional tonne of CO2 will have to be paid for straight from the state’s budget,” a situation that did not exist before, says Hans-Jochen Luhmann of the Wuppertal Institute for Climate, Environment and Energy. The exact bill that Germany will have to foot depends on the price for carbon emissions that is derived from the ETS, but the German government so far has not included the expected additional costs in its budget planning. In an answer to a parliamentary inquiry by the pro-business party FDP, the government says it cannot confirm calculations by the Oeko-Institut that the EU’s effort-sharing might cost up to €30 billion by 2030. “The EU member states are not obliged to reveal the costs for emissions allowances transfers,” the government said, adding that the exact bill could therefore not be calculated and that it would “not take part in speculation.” (Clean Energy Wire)
Solar subsidy situation – Solar power projects in the northwest China region of Ningxia are struggling to maintain operations and face “bankruptcy risks” because of long subsidy payment delays, according to an investigation by regulators. After rapid growth in the sector, the solar subsidy payment backlog has reached 120 billion yuan ($17.4 bln), forcing many projects in Ningxia to take high-interest loans to stay afloat, with some unable to afford basic insurance. Additionally, wind and solar projects in China’s western regions are still struggling to compete with coal, as data published earlier this week showed the grid in Ningxia paid just 255.5 yuan per MWh for coal-fired power last year, compared to 871.6 yuan for solar. (Reuters)
Million car march – Sale of the one millionth electric vehicle (EV) in the US is likely to occur this month, according to an estimate from the group Securing America’s Future Energy (SAFE). The prediction, based on data compiled by Inside EVs, comes after automakers sold over 110,000 EVs in the third quarter of 2018, a 108% rise from the same three-month period a year earlier. A large majority of those, over 80,600, were pure electric cars, with plug-in hybrids totalling more than 29,000. Tesla’s Model 3 was by far the best seller, followed by its Model S and Model X. (Axios)
Corona, but no line – The New Mexico Public Regulation Commission (PRC) unanimously approved what could be the largest wind farm in the Western Hemisphere, but a key transmission line meant to serve it remains in limbo. While the PRC approved Pattern Energy’s 2.2 GW Corona Wind Project, it also rejected a 520-mile transmission line proposal from developer SunZia that would carry Corona’s power to California markets. New Mexico officials turned back SunZia’s application in September, saying that it was incomplete, with the company allowed to resubmit it. Although Pattern said it would work SunZia on the renewed application, the company declined to say if it would build the wind farm without the transmission line. (Utility Dive)
And finally… Intensified eyes – The “rapid intensification” of Hurricane Michael, which slammed into the Florida Panhandle just shy of Category 5 strength on Wednesday, is consistent with behaviour predicted by models in a warming world. In a recent study in the Journal of Climate, researchers found more rapid intensifications in a simulation of a human-warmed world, and that this would provide a key pathway toward more intense hurricanes in general. The National Hurricane Center (NHC) defines rapid intensification as an increase in wind speeds of 35 miles per hour (56 kilometres per hour) in less than 24 hours, and Michael strengthened by 45 mph (72 kph) over that span as it moved over waters in the Gulf of Mexico 1 to 2 C above average. In fact, all of the worst Atlantic hurricanes in the past two years – Harvey, Irma, Maria, Florence, and Michael – intensified at a greater rate than the NHC’s threshold. (The Washington Post)
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