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EUAs tumble 8% as bears regain control
European carbon prices plummeted on Thursday, dislodging from their latest trading range to resume their Q1 downtrend as bearish concerns weighed.
China finalises registry for national ETS, though other work remains
China has finalised the registry for its national emissions trading scheme, taking one of several crucial steps necessary to launch the market.
New Zealand tax commission backs expanded carbon pricing, stronger price guidance
New Zealand should price carbon emissions for all sectors and make its emissions trading scheme more ‘tax-like’ by providing stronger price guidance, a government-appointed committee tasked with reforming the nation’s tax system said Thursday.
Environmental groups, utilities reach deal on New England hydroelectric line
Utility companies and environmental groups asked the Maine Public Utilities Commission (MPUC) to issue a construction permit for a New England hydroelectric transmission line after agreeing to a series of financial concessions, according to regulatory documents.
California’s PG&E willing to explore splitting gas, electric businesses
Pacific Gas & Electric (PG&E) would be willing to explore splitting its natural gas and electricity businesses into separate companies to mitigate potential risks, the company said in a California Public Utilities Commission (CPUC) filing, a move that would likely force the state to alter its regulations and may prompt changes to the utility’s carbon allowance allocation.
NA Markets: Traders await WCI auction results as RGGI deadens
California Carbon Allowance (CCA) prices rose slightly this week heading into the first WCI auction of the year, while RGGI allowances (RGAs) stalled amid a continued lack of market drivers.
Voluntary climate initiative to force corporates to set goals deeper than 2C
The Science-Based Targets initiative (SBTi) will soon no longer approve corporate voluntary pledges that align with a 2C global warming goal, as part of efforts to force companies to raise their ambition in line with the Paris Agreement.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Meet the new boss – The UN General Assembly on Thursday elected Inger Andersen of Denmark to a four-year term as Executive Director of the United Nations Environment Programme. Most recently, Anderson served as the Director General for the International Union for Conservation of Nature since 2015, and has held multiple positions at the UN and World Bank in the past. Her election follows the resignation of former UNEP head Erik Solheim in November following a raft of controversies including excess travel and rule-breaking.
Spain plans – Ahead of this April’s national elections, Spain’s Socialist government has proposed a €47 bln public investment plan to tackle climate change over 10 years. Partly financed by issuing green bonds, the plan is designed to make Spain carbon neutral by 2050 and includes proposals to offset job losses in polluting industries. It would shave €75 bln by cutting the country’s imported fossil fuel bill. (Reuters)
You want how much? – German utility RWE wants 10 times more compensation to close its ageing German lignite plants than they are worth, writes the Institute for Energy Economics and Financial Analysis. If market price is the benchmark for compensating the early closure of coal assets, then recent deals indicate that Germany’s coal and lignite power plants and mines have very low value, and therefore “make a mockery” of compensation claims by Germany’s biggest utility under the country’s pending coal phaseout plan. RWE says it wants to be compensated for the premature closure of its coal plants in line with the most generous payouts of the past, a position that ignores the darkening outlook for coal mining and generation, and which pits the company against genuinely affected mining communities for precious taxpayer funds.
Examining capacity – Regardless of Brexit, Brussels has opened an in-depth state aid investigation into the UK’s capacity market after a Nov. 2018 EU court decision annulled its initial backing. The investigation will focus on the participation of demand response providers.
Disclosure rising – As part of its Sustainable Finance Action Plan, Brussels has launched a targeted consultation with the objective to finalise new guidelines for companies reporting on climate-related information. Once finalised, the new guidelines, which are due by July, will supplement the existing guidelines on non-financial reporting that the commission published in 2017. They are intended for use by large listed companies and financial institutions.
Blowing ahead – Wind energy provided 14% of the EU’s electricity last year, up from 12% in 2017, according to statistics released today by industry group WindEurope. Wind power capacity rose in Europe by 11.3 GW in 2018: 8.6 GW onshore and 2.65 GW offshore. Continued growth in capacity and the use of more powerful turbines are helping to drive up wind’s share in the electricity mix. Denmark had the highest share of wind in its electricity last year (41%) followed by Ireland (28%) and Portugal (24%). Wind was 21% of Germany’s electricity. Wind accounted for 49% of all the new power generation capacity in Europe in 2018, but the amount of new wind capacity was down a third on 2017’s record year. More wind means less CO2 emissions, which is bearish for EUA prices.
Kick in the guts – Glencore’s pledge this week to cap its coal production was generally positively received, but not so by the Australian government, where the main bulk of the company’s coal mines are located. Michelle Landry, the assistant minister for children and families and an MP for a mining region, said she was very upset and disappointed by Glencore’s decision, according to the Canberra Times. “My colleagues have given companies like Glencore a lot of support and I think it’s a kick in the guts for us,” she said.
Dalian taking a stand – More bad news for the Australian government, as the Chinese port of Dalian, which last year imported some 7 Mt of Australian coal, has banned further imports of Australian coal and refuses to take shipments through customs. Meanwhile, the Dalian port authority, which oversees five ports, has capped overall coal imports this year to 12 Mt, down from 14 Mt last year, according to Reuters.
On the up – US power sector emissions rose by 0.6% in 2018 to nearly 1.93 billion tonnes, according to preliminary data released by the EPA on Wednesday. However, the agency viewed the data as a success, saying that power generation also increased by 5% YoY. (Utility Dive)
Green New Disclosures – The 12 US Senators sponsoring the Green New Deal (GND) non-binding resolution unveiled earlier this month have accepted nearly $1.1 mln from fossil fuel companies since entering Congress. However, the remaining 88 legislators in the upper chamber who have declined to support the measure have collected close to $59 mln from those industries, according to analysis by non-profit Oil Change International. Meanwhile, the House’s 85 GND co-sponsors accepted a total of $2.2 mln from oil and gas contributors and over $24,000 from coal, far less than the nearly $50 mln from oil and gas and $5.1 mln from coal given to the other 350 representatives. (The Huffington Post)
Check your work – RGGI found numerous technical discrepancies in Virginia’s proposed cap-and-trade regulations, including the state’s proposed annual cap reduction from 2031-2040, but it continues to see the proposal as compatible with the northeast US carbon market. RGGI filed written comments to Virginia’s Department of Environmental Quality that mainly focus on definition and technical clarifications to the proposed regulation. However, it said the proposed 2031-2040 annual reductions were inconsistent with the RGGI Model Rule. In its regulation, Virginia proposed reducing the cap annually by 840,000 short tons in the absence of any proposed 2031-2040 caps, which the RGGI states have not outlined. Officials argue the programme review process should dictate those annual adjustments.
Do it again – The head of Pennsylvania’s House Environmental Resources and Energy Committee has requested that environmental groups petitioning the state to adopt a cap-and-trade programme should re-submit their request. In a letter to Pennsylvania Department of Environmental Protection (DEP) Secretary Patrick McDonnell, Rep. Daryl Metcalfe (R) said the groups must re-submit their petition to the Environmental Quality Board (EQB) because the DEP failed to comply with a certain time requirement in the state code. A spokesperson for DEP said they are reviewing the letter. The petition from the Philadelphia-based Clean Air Council and over 60 other organisations and individuals will not be heard until the EQB’s next meeting in March or April. (PA Environment Digest Blog)
All is upheld – The Delaware Supreme Court upheld a state Superior Court decision from last summer that threw out a challenge to the First State’s participation in the northeast US RGGI programme. The original lawsuit, going back to 2013, was brought by three petitioners who argued that the carbon market caused an increase in electricity bills. After four years of litigation, the Superior Court said that the petitioners had failed to make their case, which the Supreme Court affirmed this week. (Delaware Business Now)
Pricing plug – Massachusetts could plug the $8.4 billion shortfall in revenues necessary to ensure state roads, bridges, and infrastructure are in good repair over the next 10 years in part through a regional carbon pricing programme for transportation, a new report found. The study, released by a group of business leaders as part of A Better City organisation, points to a menu of revenue-raising options to wipe out the gap that in addition to carbon pricing include increasing the gas tax, a peak hours pricing system, or a vehicle miles travelled fee. Massachusetts is one of 10 US jurisdictions that have signed on to develop a regional transportation sector carbon pricing programme. (Boston Business Journal)
Yearly match – The US EPA on Thursday reported that it has received 37 petitions for small refinery exemptions (SREs) to avoid 2018 compliance with the federal Renewable Fuels Standard. That is up from 22 petitions in the agency’s latest update in December, and equals the total of all SREs received for the 2017 compliance year. Biofuels groups have criticised the use of these SREs for waiving compliance requirements for obligated parties to surrender Renewable Identification Numbers (RINs) under the RFS, though it was reported in November that the EPA has put the waiver programme on hold pending a review. The agency has not yet granted a single SRE requested for 2018. (DTN/Progressive Farmer).
A little help – The Alberta government’s subsidies to the fossil fuel sector are increasing and surpassed C$2 billion in the last fiscal year, according to a report released Thursday by Environmental Defence and the International Institute for Sustainable Development (IISD). Premier Rachel Notley has invested in helping oilpatch companies reduce their carbon intensity and help fund the construction of new petrochemical facilities and bitumen upgrader facilities, to name a few of the subsidies listed in the report, according to CBC. The report finds over the last three fiscal years, the government has subsidised the industry by C$1.6 billion a year on average. The authors argue the money would be better spent on diversification and helping the province move toward renewable energy. Experts liken fossil fuel subsidies to a negative carbon price. (CBC)
And finally… Wipe out! – US consumers use roughly three rolls of toilet paper a week, more than anyone else in the world, helping destroy the habitats of native people who live in the Canadian boreal forests where it is sourced and contributing to global warming. That’s according to environmental groups Stand.earth and NRDC, which singled out producers Procter & Gamble, Kimberly-Clark, and Georgia-Pacific for using largely virgin fiber wood pulp in their products rather than recycled content or alternative fibers. (Thomson Reuters Foundation)
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