CP Daily: Monday October 28, 2019

Published 01:26 on October 29, 2019  /  Last updated at 10:38 on July 1, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

FEATURE: Cement sector puts CO2 cuts in focus as it feels pinch from EU ETS

The European cement industry has failed to achieve significant emissions cuts under the EU ETS, though decarbonisation is set to move up the corporate agenda with 2018 marking the first year the sector faced an allowance deficit.

AMERICAS

California emitters searching for CCAs ahead of interim deadline

Small compliance entities are seeking out California Carbon Allowances (CCA) ahead of the interim compliance deadline later this week, but traders say the demand is having minimal impact on prices.

DOJ lawsuit could have limited impact on California carbon prices, analysts say

California Carbon Allowance (CCA) prices would decline amid reduced demand if the Trump Administration’s suit challenging the WCI linkage with Quebec spurs a bifurcated market, according to analysts.

Argus parts ways with US carbon reporter

Price reporting agency Argus Media has parted ways with its US emissions markets and policy reporter, who is to join the trading arm of an energy company, Carbon Pulse has learned.

EMEA

EU Market: EUAs creep back above €25 as EU confirms Brexit delay

EUAs lifted above €25 early on Monday as European leaders agreed to extend the UK’s Brexit deadline, though the Britain’s departure from the bloc remains mired in uncertainty.

Former Hartree carbon trader joins biomass producer

The former head of carbon advisory at trading firm Hartree Partners has joined one of the world’s biggest biomass producers.

ASIA PACIFIC

Australia’s Woodside backs offset crediting for Safeguard companies

Australian oil and gas producer Woodside is backing the idea that facilities covered by the Safeguard Mechanism should be awarded carbon credits if they beat their baselines, which it said should be set based on industry average emissions intensity.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

BASICally the same Environment ministers of the BASIC countries have called for “comprehensive” implementation of the Paris Agreement amid threats by US President Donald Trump to withdraw from it, repeating a pre-COP message the four countries (Brazil, South Africa, India, and China) have made in the past. They also called on developed nations to deliver on their commitment to provide $100 billion in climate finance to developing countries by 2020. Indian Environment Minister Prakash Javadekar, who hosted the talks this weekend, said the meeting worked out priorities and issues as a group to be highlighted at COP25 in Chile in December. “The goal should be from a floor of $100 billion per year, significantly publicly funded and of greater transparency,” the countries said in a joint statement said.

LCOE OMG – BloombergNEF’s latest Levelised Cost of Electricity (LCOE) figures show onshore wind and PV projects at $47 and $51/MWh, a 6% and 11% respectively reduction from six months ago, mainly owing to cheaper equipment. The offshore wind LCOE benchmark sits at $78/MWh today, or down 32% from from last year.  New PV and onshore wind power plants have now reached parity with average wholesale prices in California, China and parts of Europe, BNEF added. “These technologies are winning the race as the cheapest sources of new generation with two-thirds of the global population living in countries where PV or wind are cheaper than coal and gas power plants.”

Fire alarm – Former California Governor Jerry Brown (D) warned the devastating fires in California are “only the beginning” for Americans if politicians fail to address climate change. California is battling wildfires in the northern and southern regions of the state that have been spurred along by strong winds over the weekend. Those winds have caused Pacific Gas & Electric (PG&E) and Southern California Edison to pre-emptively shut off power in the regions. “This is serious …. but this is only the beginning. This is only a taste of the horror and the terror that will occur in decades,” Brown told Politico. PG&E, which is currently going through bankruptcy proceedings, reported a down transmission line near the ignition point of the Kincade fire in Sonoma County. While the fires continued, Governor Gavin Newsom (D) encouraged billionaire investor Warren Buffett’s Berkshire Hathaway to purchase PG&E. There has been growing calls to transform the investor-owned utility into a publicly-owned company.

Fund raiser – The German government expects to raise nearly two-thirds of the funds needed for its enhanced climate protection plan through the extension of emissions trading to transport and heating. The Federal Ministry of Finance forecasts revenues of almost €33 bln from selling domestic CO2 certificates by 2023, according to documents seen by Bloomberg. That compares to the total estimated €54 bln cost of the German climate package unveiled last month, which the government claims is ‘budget neutral’. Germany’s national ETS (nEHS) for the transport and buildings is scheduled to start in 2021 with a fixed allowance price of €10. Bloomberg notes that the estimated annual permit sale revenue from these non-EU ETS sectors is poised to exceed that raised from the country’s EUA auctions.

Lower your expectations – Compensating German coal plant operators for taking their facilities offline during the country’s coal exit could violate EU state aid rules and therefore significantly reduce the amount the companies can hope for, according to a legal opinion written by lawyers of NGO Client Earth. Utility RWE has said it would claim up to €1.5 bln for every GW of coal power capacity shut down after a government-appointed commission in January recommended compensation payments for operators. Client Earth said none of the 14 countries in the EU that have already phased out coal had voluntarily paid money to companies for doing “the unavoidable”, as coal’s demise due to environmental and economic reasons has been predictable for some time. In order for a company to be eligible to receive state aid under EU rules, it would have to prove that a closure would cause “significant” financial losses, which Client Earth said in light of the deteriorating economic situation of the lignite industry “will be hard to prove”. The legal opinion found that most coal plants in the country are now older than 25 years and generally have long reached the breakeven point for their operators. The NGO added that shutting plants down would actually shield the companies from future losses, rather than causing additional costs. (Clean Energy Wire)

Walk the (carbon neutral) walk – The German parliament’s council of elders has decided that CO2 emissions of duty travel by MPs will have to be compensated through a “climate levy”, news agency dpa reports. The costs will be payable for air travel, as well as for trips with parliament’s staff cars, with the funds to be channelled into climate action projects.

See you in cow-rt – After three straight years of crop losses due to soaring temperatures and crippling droughts, Heiner Luetke Schwienhorst has had enough and is taking the German government to court. According to Bloomberg, the dairy farmer from the edge of the Spreewald forest south of Berlin blames Chancellor Angela Merkel’s government for stoking climate change and wants to know why efforts to reign in GHGs have fallen short and put his livelihood at risk. “We’ve lost over a third of our millet crop, half our hay crop,” Schwienhorst said, looking ruefully at the half-empty barn he’ll have to fill to secure enough feed for his 200 dairy cows during the harsh winter months. On Oct. 31, judges in the German capital will hear his case, which is backed by Greenpeace and two other farmers. Schwienhorst wants the court to force the government to come up with a plan to hit Germany’s lapsed 2020 climate goals as soon as possible. He argues that failure to honour the pledge to cut GHGs by 40% below 1990 levels has infringed property, occupational, and health rights. “It’s not that I blame Mrs Merkel,” he said. “This is a problem caused by our whole society.” Carbon Pulse points out that the UN’s FAO estimates that livestock accounts for more than 7 billion tonnes of CO2e annually, representing roughly 15% of global emissions, with cattle’s share of that at around 65%.

And finally… Virtual dystopia – Britain’s National Trust is to use augmented reality headsets to show visitors how climate change will affect its properties and grounds in the next 30 years. Six historic National Trust houses will have state-of-the-art augmented reality installations showing Great Britain in 2050. After walking inside the six-metre long mirrored boxes, visitors will be confronted by the sight of a famous property that has fallen into disrepair in the midst of a heavily polluted environment. The shocking scenes are being used to spur people on into leading a more sustainable life. (Telegraph)

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