CP Daily: Thursday February 28, 2019

Published 00:27 on March 1, 2019  /  Last updated at 01:07 on March 1, 2019  /  Newsletter  /  No Comments

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

**Building on the success of the annual Carbon Forward global carbon markets conference, we’ve launched Carbon Fast Forward – condensed one-day regional seminars that bring the same insight and expertise of our flagship London event to different corners of Europe.

Our inaugural event – Carbon Fast Forward – Mediterranean – takes place in Athens on April 11.

With a comprehensive agenda and featuring an all-star line-up of speakers, this is a *must-attend* event for emitters from Southern Europe and any other companies with interest in or exposure to the EU ETS.

Due to the venue size, spaces are limited. Super-Early Bird tickets have already sold out and a small number of Early Bird tickets remain

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TOP STORY

China’s carbon emissions rise on lasting construction boom

China’s energy consumption rose 3.3% last year, the government announced Thursday, in what analysts said likely meant a 3% increase in CO2 emissions fuelled by surging power demand from sectors linked to the nation’s construction boom.

EMEA

EU Market: EUAs stretch rally to fifth day, with traders still perplexed over price spike

European carbon prices rose for a fifth straight day on Thursday, briefly topping €22 in a week-long rally that has added almost 20% to prices and continues to confound many traders.

Industrial power plants can only get free EUAs if the heat is distributed, says court advisor

Power plants linked to industrial sites should only be awarded free EUAs if the resulting heat is used in district heating or high efficiency co-generation, a legal advisor to EU’s highest court said Thursday, a view that could raise ETS compliance costs for hundreds of installations across the bloc.

UK-based EU ETS verifiers, Kyoto account holders face restrictions under ‘no-deal’ Brexit

UK-based emission auditors will no longer be able to verify GHG output from EU ETS participants in other countries should Britain leave the bloc without a withdrawal agreement, the UK government announced Thursday.

Utility Engie scales back EUA hedging as it targets new markets

French utility Engie scaled back on its near-term power hedging for 2018, it said in financial results on Thursday, in a move that could be bullish for EUAs if the company attempts to catch up to its historic levels this year.

ASIA PACIFIC

Oil and gas production pushes up GHG output from Australia’s biggest emitters

Increasing oil, gas, and coal production is pushing up greenhouse gas emissions from Australia’s biggest-emitting companies despite sizeable emission cuts from the power sector, government data showed Thursday.

Brokers flag potential for ETS surprise in New Zealand’s upcoming budget

The New Zealand government could opt to rush through ETS changes in its budget on May 30 depending on how many companies pay the NZ$25 fixed price option ahead of the 2018 compliance deadline a day later, according to brokers OM Financial.

South Korea to shut down four coal power plant units for four months

South Korea will shut down four units at two ageing coal-fired power plants in the March-June to reduce air pollution levels, a move that will also reduce CO2 output regulated by the country’s emissions trading scheme.

Another planned Japanese coal plant bites the dust on profit fears

Japan’s Nippon Paper Industries on Thursday became the latest firm in the country to drop plans for constructing a new coal-fired plant amid profitability concerns.

AMERICAS

NA Markets: CCAs find bullish support with auction result, as RGAs move on thin volume

California Carbon Allowance (CCA) prices rose this week as traders took a bullish view of the February WCI auction result published Wednesday, while RGGI allowances (RGAs) found additional price support despite continued thin market activity.

RGGI prices and volume up in Q4 as compliance holdings increase -report

Compliance-oriented entities significantly increased their RGGI allowance holdings during the fourth quarter amid higher trading activity and rising prices, according to a report published Thursday.

Alberta utility TransAlta misses 2018 offset revenue target, but GHGs plummet

Calgary-based power generator TransAlta fell short of its revenue target for carbon offsets in 2018, but the retirement of several coal-fired units helped the Canadian company slash its emissions, it said in annual results published Wednesday.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Here to stay – The US Senate on Thursday confirmed EPA Acting Administrator Andrew Wheeler to permanently head the agency. The upper chamber endorsed the former coal lobbyist by a 52-47 vote, with Senator Susan Collins of Maine the only Republican to break ranks and vote no. Wheeler has led the environmental department since former administrator Scott Pruitt resigned last July amid a flurry of ethics-related investigations. During that time, Wheeler has continued to push President Trump’s deregulatory agenda, including a proposal to freeze vehicle fuel economy standards, replace the stayed Clean Power Plan with the weaker Affordable Clean Energy rule, and ease standards for new coal plants. (Buzzfeed)

Coming back for more – Elsewhere in Washington, US Representative Francis Rooney (R) told a panel hosted by think-tank C2ES on Thursday that he will re-introduce the $24/tonne carbon tax bill proposed by former GOP congressperson Carlos Curbelo last year. Rooney said that the push for a “Green New Deal” by progressives has given him a tool to tell his fellow Republicans to get on board with a carbon tax. Curbelo’s proposal would have implemented the CO2 price in exchange for suspending GHG regulations under the federal Clean Air Act on stationary sources, provided they met their emissions reduction goals. Separately, Rep. Ted Deutch (D) said he still plans to revive the bipartisan Climate Solutions Caucus and spoke with Rooney about it a couple weeks ago, but the government shutdown delayed any action, Politico reports. (Bloomberg Environment, Politico).

Maine muster – Maine Governor Janet Mills (D) announced Thursday that she will become the 22nd governor of a state or territory to join the US Climate Alliance, committing her jurisdiction to upholding the country’s commitment to the Paris Agreement. Mills, who took over for Republican Paul LePage this year, said she will introduce legislation to form a Maine Climate Council to achieve 80% renewable energy by 2030 and 100% by mid-century. However, she declined to endorse a state representative’s $5/tonne carbon tax proposal that had its first hearing on Thursday, noting that no other state has implemented anything similar. (Bangor Daily News)

Pension press – Top US pension funds are asking electric utilities to accelerate efforts to cut carbon emissions, though they won’t force the issue with proxy resolutions this spring. Investors including New York City Comptroller Scott Stringer and the California Public Employees’ Retirement System are asking the 20 largest publicly traded generators in the US for detailed plans to achieve carbon free-electricity by mid-century at the latest, according to material seen by Reuters. The investors are also asking the companies to seek other steps like board commitments and tying progress to executive pay.

Playing with fire – Carbon Tracker’s latest report highlights the persistent practice of oil and gas executives being incentivised to chase growth for the sake of growth, and details why this isn’t in shareholders’ best interests. Despite the focus on “value over volume” of the last few years, the vast majority of companies continue to reward executives based on production volume, the London-based think-tank said. “Companies that try to maximise production in this way risk over-investing and wasting money on projects that deliver poor returns and destroy value,” it added. The report found that:

  • In 2017, 92% of oil and gas companies included measures that directly incentivise growth in fossil fuel development.
  • Only one company, US-based Diamondback Energy, does not reward growth, incentivising executives purely on controlling costs and improving financial returns in 2018.
  • Nine companies have performance metrics that relate in some way to mitigating climate change.

And finally… Fecal findings – Climate change may have contributed to the fall of North America’s first and largest pre-European city, and the proof may lie in the poop, researchers said this week. A study published in the journal Proceedings of the National Academy of Sciences details how fecal records linked to Cahokia, one of the most prominent agricultural sites in North America, gives clues into how declining precipitation and serious flood events may have impacted the population of the city. Cahokia, located in present-day Illinois, peaked in population by AD 1100, but began dwindling a century later before being abandoned by 1400. (Climate Nexus)

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