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Analysts have slashed their near-term EUA forecasts by more than a quarter, predicting that speculators may curb bets on further price rises amid a slew of bearish risks including Germany’s coal phaseout, the potential for a ‘no-deal’ Brexit, and an LNG glut slashing utility demand.
EU carbon prices gained 2.2% on Tuesday to rise further away from last week’s 2.5-month low as wider markets reacted to Brexit developments seen as making a ‘no-deal’ scenario less likely.
UK utility Drax reduced its coal-fired power by more than a third in 2018, cutting its EUA demand as the company relied more on its ETS-neutral biomass generation, the company said in its Q4 filing.
Germany-based chemicals major BASF reported a 3.5% drop in its total GHG emissions for 2018, lowering the baseline for its self-imposed 2030 carbon neutral growth goal.
The Transportation and Climate Initiative (TCI) will hold its first public stakeholder meeting in April as it eyes a final design of a US regional carbon pricing proposal by the end of the year, a regulatory source told Carbon Pulse.
Pennsylvania Republicans are looking to qualify nuclear power plants under the Keystone State’s Alternative Energy Portfolio Standards (AEPS), a provision that would sunset if the state adopts a carbon market regulation.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Climate Kumbaya – US Senate Democrats will introduce a resolution that urges Congress to take immediate action on climate change, according to a Politico report. The resolution is not expected to include any emission reduction targets or require any actions by Congress, but it is meant to show unity among Democrats on the issue. It is unclear if the Republican-controlled Senate would allow a vote on the measure, as Majority Leader Mitch McConnell has said the chamber would vote by this summer on the “Green New Deal” (GND) resolution. Meanwhile, California Senator Dianne Feinstein (D) will not introduce her less ambitious alternative to the GND, which she originally unveiled after being caught on tape last week rejecting a push by children for her to support the sweeping climate change plan. The move was applauded by RL Miller, founder of green political action committee Climate Hawks Vote, who said Feinstein’s weakened proposal was “threatening to divide Senate Democrats”.
We’ll always have Paris – Elsewhere, the House Environment and Climate Change Subcommittee is hosting a hearing on the Paris Agreement and sub-national climate action in the US. The hearing, entitled “We’ll Always Have Paris: Filling the Leadership Void Caused by Federal Inaction on Climate Change,” will examine the importance of the US’ continued commitment to Paris and how cities, states and businesses across the country are stepping up to say “I’m still in”.
I’m 18 – Canadian provincial utility NB Power said it has not budgeted for the increased costs of the federal output-based pricing system (OBPS) that could cost the New Brunswick company C$18 million in 2020, up to six times more than it is paying this year. Under the federal carbon pricing system for large emitters, NB Power’s coal-fired Belledune power plant in 2019 will pay a C$20 fee on all emissions in excess of 800 tonnes per GWh. However, when the emissions charge rises to C$30 in 2020 and the efficiency standard for coal plants tightens to 650 tCO2e/GWh, the utility’s bill will increase by 500% if production levels aren’t cut. In its application for a 2.5% rate increase starting Apr. 1, NB Power said the higher rates included no provision to deal with carbon costs as it waits for both Ottawa to finalise its proposed treatment for industry and for the ruling Progressive Conservatives to develop a New Brunswick plan that meets the federal guidelines. (CBC)
Kern warning – California-based Kern Oil and Refining has threatened to sue the US EPA for failing to respond to its request for a small refinery exemption (SRE) under the federal Renewable Fuels Standard (RFS) within the prescribed 90 days, according to a letter seen by Reuters. The letter, dated Feb. 7, said the privately-owned company had applied for a biofuels waiver on July 19, 2018 that would have excused it from complying with its 2017 RFS obligations. Although the Trump administration is understood to be revising the scoring system it uses for SRE applications, the EPA had said it would continue granting waivers on schedule in the meantime. An EPA official said the agency was reviewing the incoming letter.
Paying for farts – Natural gas provider Southern California Gas (SoCalGas) will mitigate more than 100,000 tonnes of methane emissions as part of a $119.5 million settlement tied to leaks at its Aliso Canyon storage facility, regulator ARB announced Monday. The settlement would include $26.5 mln in loans to 12 dairy digesters in the San Joaquin Valley that would mitigate the methane emitted during the facility’s 2015-2016 natural gas leak. Those loans would be repaid with interest to two funds that would provide additional benefits to the region, and the dairy digesters would repay the loans by selling both the renewable natural gas produced by the projects and their associated environmental attributes. In addition, SoCalGas would pay $93 mln for various purposes, including legal costs, penalties, and further mitigation requirements.
Birds of a feather – Europe’s consensus in favour of curbing emissions is weakening due to rising support for often climate sceptic right-wing populists, according to German consultancy Adelphi. This trend could mean May’s EU Parliament elections could challenge the durability of the bloc’s climate goals. The German far-right nationalist party AfD is among the most climate-sceptical of European populist parties, explicitly denying that humans impact the global climate and actively rejecting policies for a low-carbon economy, Clean Energy Wire reported. Parties like the AfD and British nationalist UKIP “go so far as to spread false information through press releases by drawing on ‘alternative sources’ that are rarely scientifically credible,” the authors say. However, they found that most of the 21 populist parties analysed were merely “disengaged” or had “inconsistent, sometimes ambiguous views, without openly rejecting climate science.” The study also says climate and energy are generally only “niche issues” for far right parties, with most opposing energy transition policy on grounds of cost to national economies and lack of impact on global emissions. (Bloomberg)
ETS cash-for-clean – Brussels has launched a dedicated website for its Innovation Fund, which expands the NER300 beyond funding innovative renewables to all heavy industries. It expects to generate over €10 bln from selling EUAs and launched its first call for proposals in 2020. The European Commission’s Melina Boneva is due to present details on the Fund at the Carbon Fast Forward Mediterranean conference in Athens on April 11.
Investor direction – EU lawmakers have struck a provisional deal on a new generation of low-carbon finance benchmarks to help boost investment in sustainable projects and assets. It creates two new categories of low-carbon benchmarks: a climate-transition benchmark and a specialised benchmark which brings investment portfolios in line with the Paris Agreement goal to limit the global warming to 1.5C.
Oh poo – The end of coal-fired power production in Germany is set to cause problems for the disposal of toxic waste such as sewage sludge, used oil and refinery waste, which is often burned at coal plants, according to public broadcaster WDR. Municipal sewage treatment facilities in particular could have a problem with how to get rid of waste. Environmental scientists oppose burning it, but “the practice so far has been a win-win business for plant operators and waste producers,” WDR reports. (Clean Energy Wire)
And finally… Take notice – As the weather becomes increasingly more extreme, people stop noticing, new research suggests. A study published Monday in the journal Proceedings of the Natural Academy of Sciences found that while people tend to tweet about the weather when it’s extreme or remarkable, posts decrease as people get used to the new climate. Overall, researchers estimate that it takes about five years for once-extreme weather to become “completely unremarkable.” (Climate Nexus)
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