CP Daily: Friday May 31, 2019

Published 22:54 on May 31, 2019  /  Last updated at 22:57 on May 31, 2019  /  Newsletter  /  No Comments

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

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TOP STORY

US EPA abandons trading restrictions in finalised RIN reform package

The US EPA released its final rule on Friday for allowing year-round sales of 15% ethanol blends and increasing transparency in the biofuel credit (RIN) market under the Renewable Fuel Standard (RFS), but the agency dropped several proposed restrictions on credit trading for the time being.

AMERICAS

California forestry offset protocol does not warrant changes due to academic criticism, ARB says

California regulator ARB does not believe criticism of its cap-and-trade programme’s forestry offset protocol raised by a recent policy brief merits any changes to the methodology, because the study included numerous inaccuracies, according to an agency presentation.

California slaps Tesoro with $1.36 mln fine for LCFS reporting violations

California regulator ARB released a $1.36 million settlement agreement on Thursday with fuel refiner and marketer Tesoro for misreporting six years’ worth of data under the state’s Low Carbon Fuel Standard (LCFS), including several million gallons of deficit-generating fuel.

ASIA PACIFIC

NZ Market: NZUs drop to 9-mth low as bearish sentiment over FPO lingers

New Zealand carbon allowances extended their recent losses in Friday trade to close at their lowest levels since last August, with market observers expecting prices to fall further in weeks ahead amid lack of clarity on the future fixed price option level.

Australia’s weekly carbon credit issuance falls below 130k

Australia’s Clean Energy Regulator issued fewer than 130,000 carbon credits this week, while only one new project was registered.

CN Markets: Pilot market data for week ending May 31, 2019

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

EMEA

EU Market: EUAs fall to 1-mth low after exiting tightening trading range

European carbon prices plunged to a one-month low on Friday, as bearish energy and supply-side fundamentals weighed heavily.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Supreme Saskatchewan – The Government of Saskatchewan announced on Friday that it has filed a notice of appeal with the Supreme Court of Canada regarding its lawsuit against Ottawa’s ‘backstop’ carbon pricing plan. The conservative provincial government has argued that the federal Greenhouse Gas Pollution Pricing Act (GGPPA) underpinning the backstop’s rising C$20/tonne carbon levy on fossil fuels and output-based pricing system (OBPS) for large emitters violates the principles of federalism, but the Saskatchewan’s own Court of Appeals ruled 3-2 in favour of the feds earlier this month. The Government of Saskatchewan now has two months to file the province’s factum with Canada’s highest court.

NDP deepening – Canada’s NDP leader Jagmeet Singh released the left-wing party’s climate plan on Friday, pledging to deepen the country’s Paris Agreement GHG targets and tweak the federal backstop carbon pricing strategy. The plan stated that the NDP will declare a climate emergency and revise Canada’s current GHG reduction goal of 30% below 2005 levels by 2030 to fall in line with UN scientific body IPCC’s recommendations for limiting global temperature increases to 1.5C, but the plan stopped short of setting a specific target. In regards to carbon pricing, the NDP would keep the federal revenue-neutral carbon levy on fossil fuels with the caveat of “making it fairer”, while the party pledged to roll back “the breaks the Liberals have given to big polluters”, likely referencing the OBPS that took effect this year. The latter proposal drew criticism from some experts, with Chris Ragan, chair of the Ecofiscal Commission and economics professor and Director of the Max Bell School of Public Policy at McGill University, saying “there’s a reason Canada’s carbon pricing system treats industry differently. Moving away from [output-based pricing would risk shifting investment and industrial activity – and the emissions that come with them – to countries with weaker climate policies. This would hurt the Canadian economy and would not help global emissions.” Other NDP goals include making all new buildings net-zero ready by 2030, electrifying public transit fleets by 2030, and immediately eliminating fossil fuel subsidies.

Man up – Elsewhere, Manitoba NDP leader Wab Kinew pledged to put a price on carbon even if the Conservatives win the October federal election and scrap the ruling Liberals’ backstop CO2 levy and OBPS that applies to the province. Kinew said he would reveal more details about the plan ahead of this fall’s expected election, but he noted the strategy could include cap-and-trade. (The Canadian Press).

Up and away – US economy-wide emissions grew by between 1.5% and 2.5% in 2018, according to a brief from analysts Rhodium Group. The research note updates preliminary estimates the company published in January and shows emissions ticked up in all the biggest categories, including power, transportation, industry, and buildings. The recent increase leaves total US emissions at 10.7% to 11.6% below 2005 levels, off track from the Obama-era Paris Agreement target of a 26-28% reduction from that base year by 2025. (Axios)

Up your effort – Serbia has made limited progress in the area of energy, while the policy areas of environment and climate change have yet to receive adequate attention, according to the European Commission’s latest annual assessment of the implementation of reforms in the country, which was adopted this week.  Serbia has achieved some level of preparation in the area of environment and climate change, though the EC noted that legislation on MRV in line with the EU ETS and Effort Sharing Regulation was finalised in 2017 but is not yet adopted. Serbia is currently in accession negotiations with the EU, along with Turkey, Macedonia, Montenegro, and Albania. (Balkan Green Energy News)

Le biomass – German utility Uniper is in talks with the French government to decide the fate of its coal power plants, and is considering converting them into biomass and other green fuel sources, ICIS reports.

Future futures – China’s Guangdong province has been wanting to set up a futures exchange for years, and earlier this year won government approval to do so as part of the economic plan for the Guangdong-Hong Kong-Macao region. The online China Futures News reported this week that the exchange might be up and running at the end of this year, and carbon futures are being lined up as one of its first products. The exact plan is a little unclear, but it appears trade would focus on Guangdong Emission Allowances for the provincial pilot ETS, at least initially until the national market gets going. The exchange would be set up in the Nansha pilot free trade zone and would not be bound by rules that restrict all other carbon trading in China to spot deals.

And finally… Waterworld – The continental US experienced its wettest 12 months on record from May 1, 2018 through Apr. 30, 2019, receiving 6.25 inches (15.9 cm) of rainfall above the mean, according to a new report by NASA’s Earth Observatory. The total was more than half an inch higher than the previous record three years ago, and the most in 124 years of modern record keeping. NOAA climatologist Ken Kunkel noted that warmer-than-average ocean temperatures in the western Atlantic and Gulf of Mexico added to the atmospheric water content available to weather systems, with 10 states having their wettest 12-month periods on record during this time. The report comes as persistent rainfall has battered the Great Plains and Midwest this spring, leading to only 58% of the US corn crop having been planted as of May 28, well below the 90% five-year average and marking one of the slowest rates since the US Department of Agriculture began collecting data. (Yale Environment 360, Climate Nexus)

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