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European carbon dropped to a fresh five-week low below €26 on Thursday, undoing all of July’s gains, as traders said speculative sellers, Brexit fears, and wider macroeconomic worries were pressuring.
California Carbon Allowance (CCA) prices rose this week ahead of the WCI cap-and-trade programme’s quarterly sale, while RGGI allowances (RGAs) exacerbated their ongoing skid.
Embattled California utility Pacific Gas & Electric (PG&E) will submit its reorganisation plan three weeks ahead of a late September deadline, according to a recent filing, as the company attempts to prevent a bankruptcy court from considering competing proposals from its creditors.
This dossier gives an overview of WCI’s cap-and-trade programme, including an overview of member jurisdictions California and Quebec, along with current developments regarding allowance supply, changes to California’s qualitative and quantitative offset limits, and the status of REDD offsets for reduction in tropical forest loss.
German energy exchange EEX has called for EUA auction rules to be modified and the sale schedule to be overhauled.
Switzerland has delayed what might be its final allowance auctions before it links with the EU ETS.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
BRICS nixed – With little more than a month to go before the UN Secretary General’s climate summit in New York, environment ministers from the big-emitting BRICS countries are meeting in Brazil next week. Expectations are low for them meeting UN chief Antonio Guterres’ universal demands to ramp up ambition as domestic issues are outranking climate change on the agenda. (Climate Home)
Auto motive – Eight senior US House Democrats on Thursday followed in the footsteps of 30 of their Senate colleagues by urging major automakers to sign onto the agreement struck by California and four other manufacturers ahead of the Trump administration’s auto emissions rollback. In a letter, the lawmakers wrote that while the California agreement was not on par with the Obama-era standards that the Trump administration is seeking to roll back, it brings the transportation sector closer to the original standards’ GHG goals and provides greater certainty for industry. Under the California agreement, fuel economy standards would achieve GHG reductions of 3.7% annually from Model Year 2022-2026 – a change from the Obama-era’s targeted 4.7% year-over-year GHG reductions from 2022 to 2025. (Politico)
Pennsylvania ETS modelling – Pennsylvania’s Department of Environmental Protection (DEP) will accept bids through Aug. 22 to perform modelling and analysis on a green group’s proposed economy-wide carbon market for the state, an official for the Philadelphia-based Clean Air Council told Carbon Pulse. As outlined earlier this summer, the DEP has requested two reports on the cap-and-trade petition: an overall summary of the programme’s likely impacts and a sector-by-sector breakdown. The target date for completion is Jan. 2020, and the agency’s final report on how the state’s Environmental Quality Commission should proceed with an ETS will follow.
Pounded by the pound – Losses in the value of sterling related to Britain’s impending exit from the EU have significantly dented the profitability of UK gas-fired power plants, ICIS reports. Generators are having to fork out more GBP to secure the same volume of euro-denominated EUAs than when the currency was stronger. This has further tightened profit margins that had already been cut by a rally in the carbon market. Winter clean spark spreads have fallen sharply having peaked in early July. This is despite contracts on the wholesale NBP gas and UK power markets tracking each other closely due to the marginal role of gas in the generation mix.
Great Scot – Ian Duncan has been appointed as a UK minister for climate change. The native Scot’s job will include working with former lead climate minister Claire Perry in her role as the UK’s nomination for COP26 president. Perry is bidding to bring next year’s UN climate talks to the Scottish city of Glasgow. Duncan is well known to the carbon cognoscenti as the EU Parliament’s lead lawmaker in steering post-2020 ETS reforms before leaving in spring 2017 for an ultimately failed bid to become a British MP. The Conservative government later gave him a lifelong appointment to the UK parliament’s upper House of Lords.
Grid gripe – The UK’s grid operator National Grid said of last week’s major power outage that there was nothing to indicate that the cut anything to do with the fact that the country is moving to more wind or solar power. A gas-fired power station and an offshore windfarm are believed to be behind the outage, though the fault doesn’t seem to concern the technology, but merely their sheer size. The UK’s Energy Emergencies Executive Committee will report its initial findings within five weeks and provide a full report within 12 weeks. (Reuters)
Nordic green – The Nordic Climate Facility (NCF) offers grants between €250,000-500,000 for innovative climate change projects in 21 developing countries. This year’s call for proposals is open until Sep. 5. Its theme is testing the viability of innovative climate solutions, and at least one of the project partners should be an organisation registered in a Nordic country.
Holy hot springs – Poland’s most politically powerful priest has tapped national and EU funds to build a geothermal power plant, though opposition politicians are crying foul and campaigners feel the money would be better spent on renewables. (Politico)
Got grass? – The Climate Action Reserve has released the draft Canada Grassland Project Protocol Version 1.0 for public review and comment. The new voluntary market protocol prevents emissions of GHGs by conserving grassland carbon stocks and avoiding crop cultivation activities on eligible lands in Canada. The draft protocol is available for public comment from Aug. 14-Sep. 13 and the final protocol is expected to be presented to the Reserve Board of Directors for adoption on Oct. 16. The Reserve is hosting a public webinar to discuss and respond to questions on the draft protocol – register here
And finally… It isn’t easy being Green(land) – Climate change is causing widespread grief and anxiety in Greenland as residents grapple with the monumental shifts warming is having on their way of life. A survey released this week shows that 90% of Greenlanders accept the mainstream science on climate change, while 76% say that climate change has impacted their daily lives. Sea ice, which 80% of residents said they had noticed changes to, serves as “an umbilical cord to friends and family in remote rural settlements” for Greenlanders, survey lead author Kelton Minor told The Guardian. (Climate Nexus)
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