CP Daily: Friday April 26, 2019

Published 11:09 on April 27, 2019  /  Last updated at 11:09 on April 27, 2019  /  Newsletter  /  No Comments

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

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TOP STORY

EU Market: EUAs crash back below €26 as 2018 compliance season ends

EUAs slumped 5% to fall below €26 on Friday, crashing through technical support as some speculators sold heavily knowing 2018 compliance buying has effectively ended.

AMERICAS

NA Markets: CCAs surge to record high on smaller volume, while RGGI stagnates

California Carbon Allowance (CCA) prices continued to surge despite transacted volume dipping amid an industry event this week, while RGGI Allowance (RGA) saw little activity after Virginia officials finalised their cap-and-trade emissions.

Higher California auction revenue needed to support emission reductions

California Carbon Allowance (CCA) prices need to quadruple to help support more ambitious carbon reduction policies, a state senator said Friday.

Canadian federal offset system won’t be established until after national election -official

A Canadian government official on Friday revealed more details about Ottawa’s development of a federal offset programme under its ‘backstop’ output-based pricing system (OBPS) for large emitters, though a change in government this fall could impact its future roll-out.

EMEA

EU to consider carbon farming payments system

The EU is considering paying foresters for the CO2 they remove from the atmosphere in an effort to incentivise more emission savings in the sector.

Finland’s Fortum sees ETS emissions dip as hydro availability recovers

Finnish utility Fortum emitted 900,000 tonnes of CO2 from its EU ETS-regulated facilities over Q1 2019, down 10% year-on-year despite lower reservoir levels impacting hydropower output, it said in financial results on Friday.

ASIA PACIFIC

KEPCO to bear the brunt of soaring Korean CO2 prices

South Korean carbon prices rose to fresh record highs on Friday, leaving state-owned utility KEPCO to pick up the bill as the firm is obligated to compensate power companies for the CO2 allowances they have to buy.

CN Markets: Pilot market data for week ending Apr. 26, 2019

Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Belt and road – China is this week hosting a massive investment forum for its Belt and Road Initiative, presenting among others new rules for green finance that two dozens financial institutions have signed up to. But green groups worry that the BRI lets Chinese investors get away with polluting projects no longer viable at home. More than $20 bln has been put into BRI coal projects so far. Climate Home reported that UN chief Antonio Guterres said greening the initiative was important to meeting international climate goals. “We need a lot of investments in sustainable development, in renewable energy, and a lot of investments in infrastructure that respect the future,” he said. (Guardian)

Divest the rest – French utility Engie has sold its four remaining coal-fired power plants in Europe, located in the Netherlands and Germany, to the US investment fund Riverstone Holdings, the French energy group announced on Friday. The sale of these assets, which represent a total installed capacity of 2,345 MW, will reduce its net consolidated debt “by approximately €200m”, Engie said in a statement. (Montel)

Dutch smoke – Big companies in the Netherlands are putting forward their own plans to reduce emissions as they look to ward off the carbon taxes they fear will hammer their businesses, or at least see them softened. Tata Steel proposed that it would build a €500-million energy-efficient alternative to its blast furnace at its plant near Amsterdam using newly developed technology. A spokesman for the economic affairs ministry said a national corporate carbon emissions tax was still needed to make sure industrial companies delivered reductions. (Reuters)

Tax on table – The EU needs a carbon tax to tackle climate change, according to Frans Timmermans, the outgoing European Commission first vice-president, who is among those hoping to succeed Jean-Claude Juncker as Commission president after May’s elections. “That is the biggest change that will lead to polluters understanding they need to change the way they produce … what we also need to do is to make sure that carbon trading goes up by lifting the price of that.” (Euronews)

Drill delay – The Trump administration will shelve its plans to expand offshore drilling in the Atlantic and Arctic following a recent court decision blocking drilling of the Alaskan coast, Interior Department Secretary David Bernhardt said Thursday. In an interview with the Wall Street Journal, Bernhardt said that the potentially years-long appeals process for last month’s ruling “may be discombobulating to our plan.” An Interior spokesperson told press in an email that the Department “is simply evaluating all of its options to determine the best pathway to accomplish the mission entrusted to it by the President.” (Climate Nexus)

Yearly check-up – The market monitor for the northeast US RGGI cap-and-trade programme found no evidence of anti-competitiveness conduct in 2018, according to a new report. Potomac Economics reviewed the carbon market’s four quarterly auctions, finding no material concerns regarding the auction process, barriers to participation in the auctions, or the competitiveness of the results. Additionally, in the secondary market, the market monitor found no evidence of anti-competitive conduct, and found that firms have generally purchased quantities of allowances that are consistent with their expected needs.

And finally… beetle drive – Drought brought on by climate change has weakened trees’ natural defenses and helped spawn bark beetles, creating an insect infestation that has forced landowners to chop down broad patches of forest across Czechia, northern Austria, Bavaria and Slovakia. While the bark beetle is natural to conifer forests and has a role in their ecosystem, climate change has helped it spread especially through single-variety spruce woods planted over the past two centuries. (Reuters)

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