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Europe’s biggest emitter RWE expects to achieve carbon neutrality by 2040, continuing fossil fuel generation past next decade even as the company completes a renewables transaction with former rival E.ON.
EUAs dropped well below €25 in a late sell-off on Monday, which sent carbon below a major support level and has put traders on alert for further losses.
A looming set of competing bullish and bearish risks are likely to keep EU carbon prices locked in their existing trading range, though EUAs could bolt in one direction or another should any of them come to fruition.
South Korea’s v2018 CO2 contract fell 10% and was left untraded on its expiry day, but the KAU19s maintained last week’s record highs in a hint that Korean prices might remain far above historical levels despite the 2018 compliance process now being over.
Seventeen entities opened Compliance Instrument Tracking System Service (CITSS) accounts in the California cap-and-trade programme during the third quarter, according to data released by state regulator ARB on Monday.
US biofuel credit (RIN) prices have retreated in recent days amid reports that a major Renewable Fuel Standard (RFS) deal is on hold while President Donald Trump attempts to ward off an impeachment inquiry by Congressional Democrats.
Maryland has issued additional RGGI offset credits to the lone project registered under the Northeast US cap-and-trade programme, data showed.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Circling above – ICAO’s executive committee has agreed on a handful of resolutions, including some on the CORSIA global aviation offsetting mechanism, to send to the organisation’s plenary for a vote at this week triennial Assembly takes place in Montreal. According to Bloomberg, the committee approved the ‘exclusivity’ wording in one resolution, which calls for CORSIA to be the world’s only market-based measure for curbing aviation emissions, with EU nations reportedly not raising any concerns at the meeting on Sunday. Most EU member states want the sector to continue to be covered by the bloc’s ETS. The resolution is expected to be adopted by ICAO’s Assembly, though several European governments may file a ‘reservation’ as a last resort display of protest. The bloc has covered intra-EU flights under its carbon market since 2012, whereas CORSIA is due to launch in 2021 to offset any growth in emissions from international flights.
Time to sleep – The last two of a group of eight lignite power plant units are entering Germany’s security standby, reports news agency dpa. RWE’s unit C at the Neurath power plant was taken offline on Sep. 28 and Leag’s Janschwalde E followed today. In order to save CO2 emissions in the power sector, the government in 2015 agreed with utilities to put old and inefficient lignite plants with a total capacity of 2.7 GW on temporary “security standby”, starting with the first stations in 2016. The plants are mothballed for four years before being closed down permanently. The plants will only be called upon as a very last resort, such as in the case of long-lasting, extreme weather events. The government expects this measure to reduce CO2 emissions by 11 Mt to 12.5 Mt in 2020, with utilities to be reimbursed for any lost profits. (Clean Energy Wire)
The End(esa) of coal – Coal power is no longer competitive in mainland Spain, according to Enel subsidiary Endesa, as the company plans to shut all of its coal-fired generation capacity on the Iberian peninsula. Endesa operates 23 GW of capacity in total in Spain and Portugal, including 7.5 GW of “traditional thermal power.” In a statement to the Spanish stock exchange on Friday, Endesa was unequivocal in its view on coal’s near-term future, blaming market conditions and carbon pricing. “This structural situation has determined that mainland coal-fired thermal power plants are not competitive, and therefore their operation in the electricity generation market is not foreseeable in the future.” Endesa flagged a likely writedown of €1.3 billion as a result, including decommissioning costs, though it did not provide a timeline. In H1 2019, the company generated half as much power from its coal fleet as it did in the same period last year, without closing any capacity. (Greentech Media)
Not done yet – Failure to meet next year’s carbon and renewables targets could cost Ireland up to €124 mln in buy-out penalties, the Independent reports. That’s on top of the €121 mln already spent on accumulating carbon credits in previous years. Ireland is set to miss its target to cut GHGs by 20% below 2005 by 2020. The government began buying emissions rights in 2006 and has amassed €89.5 mln worth of credits to date. In addition, it has invested €31.8 mln in managed funds for carbon reducing projects, which is another mechanism for countries to make up for their poor performance. The Comptroller and Auditor General (CAG) has found, however, that a further €2-14 mln will have to be spent on credits to fully make up for the 2020 shortfall, plus up to €110 mln on purchases called ‘statistical transfers’ to compensate for missing renewable energy targets.
Please tax us – Europe’s largest airline Ryanair is arguing that a tax on kerosene would more effectively reduce aviation’s emissions than the EU ETS and the various national environmental taxes surfacing across the continent, which it claims distort competition and are designed to protect the legacy carriers and the large hub airports. “A tax on kerosene has merit as long as there no exclusions, not for any airline, for any kind of flight – e.g. connecting or long-haul – or airport,” Ryanair chief marketing officer Kenny Jacobs told AIN on the sidelines of a press briefing announcing the low-cost carrier’s summer 2020 schedule in Belgium. He called on the next European Commission, which will take office in November, to look at aviation in a “sensible” way because the sector contributes only 2.5-3% of global CO2 emissions. A tax would promote the use of younger aircraft, Jacobs said, which use less kerosene and produce less CO2. However, he admitted that not all carriers are likely to support this approach.
TCI tomorrow – Officials from US jurisdictions participating in the Transportation and Climate Initiative (TCI) will share updates at 1230 Eastern time (1630 GMT) on Tuesday, Oct. 1, regarding the development of a regional cap-and-invest programme, according to a media advisory sent out Monday. Sources recently told Carbon Pulse that the draft ETS framework to be offered by the 10 TCI jurisdictions in the US Northeast and Mid-Atlantic will provide few specific details about the possible carbon market, as the states have yet to receive modelling results that could dictate future emission caps or allowance price levels in the programme.
Proceeding with caution – The California Public Utilities Commission (CPUC) on Thursday launched a formal proceeding to consider the “ratemaking and other implications” of bankrupt utility Pacific Gas & Electric’s (PG&E) proposed reorganisation plan. By law, the commission must approve any proposed plan and related transactions before the utility’s bankruptcy can be resolved. The commission’s investigation will consider whether the settlement resolves monetary fines or penalties for PG&E’s pre-bankruptcy conduct, whether to approve changes to PG&E’s governance structure, whether PG&E’s plan is consistent with the state’s climate goals, and whether the plan is rate neutral. (Utility Dive)
Candidate can-dos – Several US Democratic presidential candidates on Friday made climate policy-related announcements. Frontrunner Massachusetts Senator Elizabeth Warren said she would reinstate and modernise the nonpartisan Office of Technology Assessment – de-funded by Congress in the 1990s – to provide lawmakers with a vital resource to combat disinformation by the fossil fuel industry and climate change deniers. Elsewhere, Montana Governor Steve Bullock unveiled a package that would make public lands carbon neutral by 2030, while billionaire philanthropist Tom Steyer committed to keep the US in the Paris Agreement and increase its GHG target to 40% below 2005 levels by 2030, up from 26-28% by 2025 presently. (Politico)
Stop all the burping – Dutch specialty chemicals company DSM is expecting strong demand for its food additive which limits the amount of methane burped by cows. “We see a lot of demand already, from food producers and farmers”, DSM’s Clean Cow program director Mark van Nieuwland told Reuters in an interview, even though the launch of the additive, Bovaer, is still more than a year away. “Large (food) companies have clear climate targets, and they need farms to change to meet those. Also consumers are increasing pressure on farmers and many farmers themselves want to limit emissions.” Switzerland’s Nestle this month said it wanted to reduce GHG emissions to zero by 2050, while French dairy maker Danone has said it wants to halve its CO2 by 2030. Cows constantly burp up the powerful GHG methane but DSM says including Bovaer in a cow’s diet could cut these emissions by at least 30%. “Giving this to only three cows will have the same effect as taking one car off the road,” Van Nieuwland said.
Hey Jacinda – New Zealand Prime Minister Jacinda Ardern has returned from her travels to New York for the UN General Assembly and she’s labelling the trip a success – with several nations already approaching her to follow her country’s lead in fighting climate change. Ardern told TVNZ 1’s Breakfast about her speeches on New Zealand being “a world first” in its climate action initiatives, including bringing agriculture into the ETS. “At a lot of the bilaterals I was asked about how are you progressing this issue? Because this is an area where countries haven’t ventured. The reason New Zealand is is because that is where most of our emissions come from and that makes us unique.” She said if the nation develops the technology and instruments needed to sustainably tackle the issues, New Zealand will have “solutions to sell to the world because they will eventually come looking”. However, while she was away, plans to cover agriculture in the NZ ETS stalled as the government coalition partners struggled to agree details.
And finally… “Live (fossil) free or die” – Dozens of people were arrested in New Hampshire Saturday after entering the grounds of one of New England’s largest coal-fired power plants to demand its shutdown. Around 120 members of groups including 350 New Hampshire Action, the Climate Disobedience Center, and Nonviolent Citizen Action were protesting the continued operation of the Merrimack Station in Bow, New Hampshire, which has no timeline for closure. The activists intended to take some coal from the plant in a direct action, but nearly 70 activists, many of them wearing white Tyvek suits and carrying buckets and shovels, were arrested for trespassing on the plant grounds. (Climate Nexus)
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