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TOP STORY
ANALYSIS: California-Quebec carbon auctions to shrink in 2020 with true-up allocations
The WCI carbon market’s quarterly auctions are projected to contract significantly in 2020, as industrial true-up allocations for the third compliance period will shrink the availability of state-owned allowances, according to Carbon Pulse analysis.
EMEA
Five countries to double size of EU’s post-2020 Modernisation Fund
Five Eastern EU member states have opted to increase the number of carbon allowances they are allocating to the bloc’s post-2020 Modernisation Fund, more than doubling its size.
EU Market: EUAs slump to 2-week low below €25, post 1.8% weekly loss
EUAs fell to a two-week low on Friday as an improved auction performance could only lift prices back temporarily, while weaker energy prices and macroeconomic concerns weighed.
Germany’s EnBW strides ahead on hedging over Q3
German utility EnBW advanced its hedging rates over Q3 2019, it said on Friday, leaving the company more heavily hedged than in recent years to provide a somewhat bearish signal for carbon.
Low-cost EU airline emissions dip in October
Two of Europe’s biggest low-cost airlines posted a second straight month-on-month decline in their carbon emissions in October.
Emitter buying in German EUA auctions remains strong in September
German emitters maintained solid interest in the country’s EUA auctions in September, buying up three quarters of the supply on offer for a third straight month, a government report shows.
INTERNATIONAL
Nepal to sign World Bank REDD deal next month -media
Nepal will ink its GHG reduction agreement with the World Bank’s Forest Carbon Partnership Facility (FCPF) in December, local media reported Friday, in a move that would make it the first Asian nation to forge the REDD deal seen as a possible base for international emissions trade.
ASIA PACIFIC
ACCUs rise to 6-month high, while issuance, delivery remain modest
Australian secondary market offset prices have risen to a six-month high amid a dearth of available supply, while new issuances and delivery to the government’s Emissions Reduction Fund were modest this week.
South Australia launches blue carbon plan
The state government in South Australia has launched a strategy to develop and pilot blue carbon projects that it intends to eventually generate offsets under the federal government’s Carbon Farming Initiative.
CN Markets: Pilot market data for week ending Nov. 8, 2019
Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.
AMERICAS
New Jersey COATS registry accounts re-open ahead of December RGGI auction
Thirty New Jersey CO2 Allowance Tracking System (COATS) accounts were re-opened in the Northeast US RGGI ETS ahead of the scheme’s December auction and less than two months before the state returns to the regional programme, registry data showed Friday.
VOLUNTARY
Cruise line MSC seeks CO2 neutrality through blue carbon offsets
Swiss-based MSC Cruises aims to achieve carbon neutrality in its marine fleet operations by Jan. 2020 through offsetting, and plans to increasingly rely on blue carbon projects to maintain the goal, it announced Friday.
ICYM
EXCLUSIVE – Developers Assemble: EcoSecurities alumni regroup to relaunch iconic offset firm for new era of carbon markets
EcoSecurities, one of the most iconic developers of the offset project boom of the 2000s, is being relaunched by a team of its alumni and co-founders, Carbon Pulse has learned, gearing up to trailblaze once again in a new era of international carbon markets.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Euro billions – The EU provided €21.7 billion in public climate finance to developing countries in 2018, only a marginal increase compared to €20.4 bln in 2017 and €20.2 bln in 2016, according to conclusions adopted today by all EU finance ministers. That makes the EU the largest provider of climate finance, though green group coalition CAN Europe expressed concern that the slowdown was the reverse of what was required to meet a collective global pledge for rich nations to channel $100 bln/year from 2020 from public/private sources. The EU’s public total is likely to rise more sharply next year, however, as major EU members have pledged to double their contributions to the Green Climate Fund.
Unnecessarily expensive – A price on CO2 emissions in Germany’s buildings sector is the most cost-efficient way to cut the climate impact of heating and outperforms all other regulation and subsidies currently in place, economists of research institute ZEW said in a policy brief on the government’s climate package. The carbon pricing system planned by the government in its Climate Action Programme 2030 is based on a fixed price until 2026 and aims to transform into a market-based pricing system thereafter, although prices will be kept within a price corridor. “Instead of real market-based price formation, the government continues to follow a mixture of regulatory law and subsidies,” which, according to the economists, “makes climate action unnecessarily expensive.” The researchers say redistributive effects that disadvantage poorer households under a market-based pricing system could be countered with a “per-capita relief” in taxation or social security contributions, a model already practised in Denmark and Switzerland. (Clean Energy Wire)
Every little helps – The rising price for EUAs is increasing the price of cement, giving German building material giant HeidelbergCement a “strategic competitive advantage” over other cement producers in the EU, the company’s CEO Bernd Scheifele told the Frankfurter Allgemeine Zeitung. Prices for cement have risen by up to 15% over the last few months as producers have had to pay more for emissions arising from the energy-intensive production process, but HeidelbergCement says it has enough allowances to continue production until the end of 2022 and thus is shielded from the rising prices. Scheifele added that smaller local producers across the EU would now have to buy allowances at higher prices, meaning many will go out of business as production becomes too costly. Coming from the process industry, HeidelbergCement has received its allowances free of charge in the first round of trading until 2020 and hopes it will not have to buy any allowances in the next round by reducing its CO2 output by another 30% through a “master plan” that includes powering its cement kilns with biomass instead of coal. (Clean Energy Wire)
Auction green light – The EU’s revised ETS auctioning regulation will enter into force on Nov. 28 after today being published in the bloc’s Official Journal following no objections from lawmakers during a two-month scrutiny period. Read Carbon Pulse’s article on how the regulatory changes aim to avoid market disruption from its fund-raising auctions, potential voluntary EUA cancellations and sale calendars.
Total-ly over it – French oil giant Total won’t renew its membership of the American Fuel and Petrochemical Manufacturers (AFPM) association because of the fossil fuel lobby’s stance on climate change, the company said Friday. Total reviewed its membership of 30 industry associations and detailed its subsequent decision to leave the AFPM because of the lobby’s different views on the Paris Agreement, carbon pricing, and renewable energy. The company also said it would reconsider its memberships of three other groups “in the event of lasting divergences.” Fellow fossil fuel major Shell also rescinded its membership in AFPM earlier this year. (Bloomberg)
Flashing green – The San Francisco Fed hosted the Federal Reserve System’s conference today on the impact of climate change and economics. Among the issues slated for discussion was a “green interest rate,” Reuters reports, which added that the first-ever event was so oversubscribed it was webcast to meet demand. The conference will also include discussions on climate risk, accounting for the effects of climate change on financial asset prices, and understanding the potential implications of climate change for monetary, supervisory and trade policy, according to the San Francisco Fed.
African peanuts – Africa is poised to lead the world’s cleanest economic revolution by using renewable energy sources to power a massive spread of urbanisation and population growth, an IEA study finds. The agency is predicting a boom in solar and for minerals required to produce electric and hydrogen batteries. IEA boss Fatih Birol said some fossil fuels would be needed to support Africa’s heavy industries, but the increase would be insignificant in the wider global climate effort: “Africa’s total contribution to cumulative global emissions from energy over the last 100 years is only 2%, which is half the emissions of Germany today. If everyone in Africa had access to energy this 2% will rise to just 3% – it’s still nothing. It’s peanuts compared to other countries in the world which are using fossil fuels such as coal for energy.”
Headed to the sin bin – A handful of protesters on the ground floor of the cavernous Cape Town International Convention Centre spread fake oil on the ground and chanted to demand an end to fossil fuels, while hundreds of delegates at Africa Oil Week two floors above were largely unaware. The tension keenly felt at oil conferences in Europe was mostly absent over the three-day event in Cape Town, South Africa, as there was little focus on climate change, apart from the shadow that renewable energy is casting over long-term demand. James Josling, head of Africa oil trading for Swiss-based Trafigura, said telling Africa not to develop its resources was akin to making it “pay for the sins” of other regions. (Reuters)
Tech tracking – A “symphony of technologies” including blockchain and satellite imaging increasingly allows corporate buyers and consumers to discover more about the sustainability and ethics of their purchases, including levels of deforestation and emissions. They also help give smallholder farmers an easily accessible sales record to secure loans, win contracts, and protect income from ill-meaning relatives. (Financial Times)
And finally… Bottoms up for climate change – Vodka is not typically afforded the same cachet as more high-brow spirits like bourbon or cognac. It is likelier to drum up images of fraternity parties (and hangovers). But a start-up called Air Co. is looking to elevate the beverage via its new sustainable distillery in Brooklyn. And they aren’t producing your typical vodka. Instead of using fermentation, the company’s patented technology converts CO2 emissions into beverage-grade ethanol. The final product is a premium vodka that removes one pound of CO2 from the atmosphere per bottle. (Forbes)
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