CP Daily: Wednesday April 24, 2019

Published 02:48 on April 25, 2019  /  Last updated at 02:48 on April 25, 2019  /  Newsletter  /  No Comments

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

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TOP STORY

California defends decision to maintain post-2020 ETS caps as it confirms surplus volume

California regulator ARB defended its decision to maintain the current emissions cap trajectory of its WCI-linked ETS to 2030, despite confirming that there were more than 218 million surplus compliance units at the end of the market’s second compliance period, according to a letter sent to legislators Tuesday.

AMERICAS

Virginia RGGI regulation adds text to allow for possible delay

Virginia’s final cap-and-trade regulation includes language to implement the programme even if it faces any delays from the Republican-controlled legislature, while deferring a decision on regulating biomass emissions to future programme reviews, according to a Department of Environmental Quality (DEQ) presentation.

Oregon cap-and-trade scheme to be undersupplied from day one -analysts

Oregon’s proposed cap-and-trade scheme would be undersupplied from day one and would absorb more than 40 Mt from the wider WCI market over the next decade if legislation currently on the table is passed, analysts predict.

EU lawmakers urge California to reject REDD, fearing wider use by airlines under CORSIA

California should reject the use of REDD tropical forest protection credits under its carbon market because it won’t ensure emission cuts and could pave the way for much greater use by airlines under the UN’s CORSIA offsetting mechanism, a cross-party group of EU lawmakers warned on Wednesday.

New US offset protocol aims to reduce costs for voluntary urban forestry

A new Climate Action Reserve (CAR) protocol aims to reduce costs for voluntary urban forestry projects, but the methodology would have to demonstrate success and pass other regulatory hurdles to become eligible for WCI compliance-grade offsets, a company official said.

PEI election results offer uncertain future for province’s climate policy

Prince Edward Island’s Progressive Conservative party won the right to form a minority government in Tuesday’s election, but a historic showing by the Greens offers the possibility of changing climate politics in Canada’s smallest province.

California mints under 126k offsets in smallest issuance of 2019

California regulator ARB distributed 125,900 California Carbon Offsets (CCOs) this week, in the lightest issuance of the year to date.

EMEA

EU Market: EUAs close lower after weak auction

EUAs slipped on Wednesday as a weak auction result pushed carbon back to technical support levels and further away from the 11-year high near €28 that was approached a day earlier.

Czechia’s big-emitting EPH picks up more UK thermal power assets

Privately-held Czech company EPH will purchase two Northern Ireland thermal plants from US firm AES, consolidating its position as the second biggest emitter in the EU ETS.

ASIA PACIFIC

SK Market: Korean carbon hits 10-mth high amid lingering supply drought

South Korean carbon allowances rose to 10-month highs in Wednesday trade as available supply remained elusive, driving buyers to bid higher with just over two months left to the compliance deadline.

Japan focuses on technology in draft climate strategy

Japan is in the final stages of developing its long term climate action plan with focus firmly on technology development, sparking criticism that the government is “procrastinating”.

COMMENT

Canada’s industry should support carbon pricing, not fight it

The Canadian industry associations’ claims about the negative impact of carbon pricing on jobs and competitiveness are exaggerated and lack empirical evidence. Pollution pricing incentivises companies to innovate, which will be necessary to guarantee their competitiveness in the long-term.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Relevant, but not extraordinary – Australia’s opposition Labor party’s plan to cut emissions by nearly twice as much as the sitting Coalition government has become a major issue in the ongoing election campaign, as the Coalition has claimed it would cost in the A25-35 billion range. But a new report by Citi Group estimated even the biggest-emitting companies would have to pay less than a 1% rate of cost inflation over 10 years to meet their targets under Labor’s plan. The policy costs would be “relevant, but not extraordinary”, Citi concluded. (Australian Financial Review)

Inspector Newsom – Gov. Gavin Newsom has directed the California Energy Commission to investigate possible irregularities in the state’s gas prices, which have recently soared above $4 per gallon. “Independent analysis suggests that an unaccounted-for price differential exists in California’s gas prices and that this price differential may stem in part from inappropriate industry practices,” Newsom wrote in a letter to the commission on Monday. “These are all important reasons for the Commission to help shed light on what’s going on in our gasoline market.” The Western States Petroleum Association, which represents refineries, responded: “Over the past several decades, fuel costs in California have been subject to dozens of independent inquiries by government agencies, all of which concluded the dynamics of supply and demand are responsible for movements in the price of gasoline and diesel fuel … In addition, many ever-changing factors, including the higher cost of producing CARB gasoline and state programs, such as cap-and-trade and the Low Carbon Fuel Standard, impact fluctuations in energy markets.” (SF Chronicle)

More from Equinor – Norway’s oil firm Equinor will revise its climate targets next year and assess its investments against the Paris Agreement, it said after talks with a group of more than 320 investors. Equinor will review its existing climate-related targets to 2030 and set out new targets for after 2030, linking them with staff pay. From 2020, it will also report on the overall, estimated carbon intensity of its products and services but plans to snub a shareholder resolution looking to compel it to set reduction targets for the use of its products as rival Shell has done. (Reuters)

Renewables powerhaus – Power production from renewable sources in Germany hit a new record high on Easter Monday when installations such as wind and solar PV generated 77% to net public electricity supply thanks to strong winds and abundant sunshine, according to research institute Fraunhofer ISE. (Clean Energy Wire)

Please deny – ExxonMobil, currently a defendant in multiple climate change liability lawsuits and one for alleged securities fraud over its climate risk disclosures, has asked a federal judge in Texas to deny class certification in a class action suit brought by investors against the company. That suit, Ramirez v. ExxonMobil Corporation, claims that Exxon misrepresented the value and amount of its reserves and the proxy cost of carbon because the costs it disclosed publicly differed from the data it used internally. The Greater Pennsylvania Carpenters Pension Fund and lead plaintiff Pedro Ramirez Jr. filed the complaint in 2017 as a federal securities class action on behalf of investors who purchased Exxon stock between March 31, 2014 and January 30, 2017. The complaint says Exxon’s “material misstatements and omissions,” means investors “paid artificially inflated prices for Exxon common stock.” The case is proceeding in federal district court following Judge Ed Kinkeade’s refusal to dismiss it and his denial of a motion to reconsider. Exxon filed its response on Friday opposing the plaintiff’s motion for class certification. The certification is a procedural requirement to establish a case as a class action. Exxon argues that because the misrepresentations did not impact the stock price, the claim is unfounded. (Climate Liability News)

Rhode Island ready – Rhode Island’s Department of Environmental Management announced on Wednesday that had secured $250,000 to fund a carbon fee study originally authorised by a 2017 state Senate bill. A request for proposals will be issued this spring in hopes that the study is completed when the General Assembly commences its 2020 study in January. The $250,000 needed to fund the study was issued from the $4.1 mln settlement the Rhode Island attorney general received from Volkswagen emissions scandal, and will be coordinated with the Office of Energy Resources and the Executive Climate Change Coordinating Council. (EcoRI)

Third time’s the charm – New York on Tuesday announced its third annual solicitation for large-scale renewable energy projects under the state’s Clean Energy Standard, targeting 1.5 mln MWh of green electricity each year. The procurement will help meet a 70% renewable standard by 2030, and follows $2.9 bln in contracts being awarded to 46 land-based wind and solar projects over the past two years. (Utility Dive)

RIN sin – Two men were found guilty of making false statements to the US EPA in a conspiracy to fraudulently generate biofuel credits, known as RINs, under the Renewable Fuels Standard. The Department of Justice on Tuesday said the two men’s corporation, Keystone Biofuels, Inc., claimed to be a producer and seller of biofuel, and over four years participated in a conspiracy to fraudulently generate RINs and claim tax refunds based on the biodiesel mixture excise tax credit. (Politico)

Lost his touch – A plan to save uneconomic coal generation appears to have failed in the Indiana legislature, despite the lobbying work of former US EPA Administrator Scott Pruitt. Pruitt was hired by a coal mining company to push language into the state budget that would prevent Indiana utilities from replacing coal plants with gas and renewables. That language is not in the latest budget, however, and the Speaker of the Indiana house told the Associated Press it would likely not be inserted. Indiana utility regulators could put that transition in motion Apr. 24 by approving a new $900 million gas plant for Vectren, meant to replace retiring coal. Lawmakers could also wrap up the legislative session today by passing the budget proposal. (Utility Dive)

Auction action – The World Bank is to host several in-person workshops over the rest of this year to tout the benefits of countries using auctions to distribute climate finance cost-effectively, official Stephanie Rogers told a webinar on Wednesday, without confirming when and where the sessions would be held. The bank has published a report on the issue and is keen to expand auctions beyond its previous hosting of three Pilot Auction Facility sales and the upcoming auction to buy carbon credits on behalf of Germany’s Nitric Acid Climate Action Group (NACAG).

And finally… Protest pause – Environmental campaigners Extinction Rebellion will close their two remaining central London protest sites on Thursday, the group said after 10 days of disruption in the British capital to highlight the risks of climate change that has seen more than 1,000 arrested. They promised more protests in the future, saying direct action was the only way to bring the issue to public attention. (Reuters)

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