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ANALYSIS: Experts divided on CORSIA aviation offset supply estimates, with CDM renewal risk in focus
Experts are differing greatly on the potential supply of eligible carbon credits that could be available under ICAO’s global aviation offset scheme, and specifically on the amount of available CDM units, which are poised to play a key role.
Industry associations have suggested charging ships a $2/tonne fuel tax, in one of several measures discussed at the UN’s maritime body IMO this week as the sector strives to avoid regulation under the EU ETS.
(Updates with new info) – Switzerland’s Federal Council on Wednesday approved measures paving the way for the linking agreement between the country’s carbon market and the EU ETS to enter into force on Jan. 1, 2020, but the physical connection between the two schemes appears delayed until next spring.
EUAs extended their one-month low on Friday but bounced off a key technical support to claw back towards €24 aided by resurgent energy markets.
Australia will hold the next Emissions Reduction Fund auction in March next year, when for the first time the cost-capping benchmark price will be removed, the Clean Energy Regulator said Friday.
Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.
A bipartisan group of US senators from the Northeast unveiled a bill Thursday to encourage the expansion of the country’s two regional cap-and-trade programmes, including by creating a new division with the EPA.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Potent problem – Global coal mine methane emissions may have reached just under 40 million tonnes last year, according to this week’s IEA’s World Energy Outlook 2019, which given its high warming potential is equivalent to 1.2 billion tonnes of CO2 and equivalent to the international aviation and shipping sectors combined. Climate think-tank Sandbag said the report proves the global coal industry “is even more polluting than we thought” and should face tougher regulation alongside the more concentrated methane leaks from the oil and gas sector. (The Guardian)
Everything’s a climate ministry – The German parliament (Bundestag) on Friday approved the first elements of the government’s €54 billion climate package, which includes legally-binding emissions targets for various sectors of the economy and a trading scheme for the non-EU ETS segments of transport and heating. “Climate protection is finally binding for all, because the law states how much CO2 can be emitted in the areas of buildings, traffic, agriculture, energy, and industry every year. With the Climate Protection Act, every ministry becomes the Ministry of Climate Protection,” said Federal Environment Minister Svenja Schulze. Germany’s ministerial cabinet last month approved the plan after making a few tweaks, sending the proposals for passage by parliament and state lawmakers. The Bundestag’s adoption comes less than two months after the coalition of Chancellor Angela Merkel’s conservative CDU/CSU alliance and the Social Democratic Party (SPD) introduced the measures aimed at helping the country hit its 2030 climate targets (55% below 1990), as well as net zero emissions in 2050 – which is up from the previous goal of an 80-95% cut. The laws must now be debated by the Bundesrat – the federal council of state governments. While the climate law itself is not subject to final state approval, consent to other elements of the climate package – such as a package of tax reforms – could be tied to it. The Green Party, which is in opposition at the federal level, is part of many state government coalitions and has vowed to try and amend the package in order to increase its ambition. (Clean Energy Wire)
Billions bump – An extra £100 billion will be pumped into combating climate change if the Liberal Democrats take power in next month’s UK election, the party’s finance spokesman has announced. Former cabinet minister Ed Davey said a LibDem government will jump-start an economy-wide programme to tackle the climate emergency. “Across a five-year parliament, Liberal Democrats would spend and invest an extra £100 bln of public finance on climate action and environmental preservation. This includes a new £10 bln renewable power fund to leverage in over £100 bln of extra private climate investment. This will fast-track deployment of clean energy, to make Britain not just the world leader in offshore wind, but also the global number one in tidal power too. And we will invest £15 bln more to make every building in the country greener, with an emergency 10-year programme to save energy, end fuel poverty, and cut heating bills,” he added. Davey also launched an attack on the “fantasy” economics of Prime Minister Boris Johnson’s Tories and the opposition Labour party. (Evening Express)
Bits and parts – Woodside Energy’s Burrup Hub LNG plans in Western Australia could add some 20 MtCO2e to annual carbon emissions, but the company is gaining environmental approvals by splitting the plans into a number of sub-projects, the WA Conservation Council says. Some planned activities are onshore, some are offshore, and some in federal waters, meaning different parts need approval from different authorities that don’t necessarily consider the full picture. The projects would also cause some 80 MtCO2e to be emitted overseas when importing countries burn the fuels produced, Fairfax reports. The WA government earlier this year announced an aspirational target to reach net zero emissions in 2050 in a plan that has yet to be detailed but leaves the use of domestic and international target as options for how to achieve the goal.
Really want them carry-overs – Australia remains the only country with a stated intent to use several hundred million Kyoto-era AAUs to meet its Paris Agreement target. Whether that will be allowed could be decided at next month’s COP in Madrid, and Australian negotiators might find themselves seeking out unusual allies such as Russia and Ukraine to try and push through the plan, RenewEconomy reports.
Sky high – Shell’s aviation fuel arm is to support Europe’s first dedicated sustainable aviation fuel production plant in the Netherlands, the oil giant has announced. Shell is to provide technical and commercial expertise to the plant, which is expected to become operational in 2022. It is designed to produce 100,000 tonnes of fuel a year, resulting in a reduction in lifecycle CO2e emissions of approximately 270,000 tonnes. The plant will also produce naphtha, and 15,000 tonnes of bioLPG each year as a by-product. SkyNRG, which will run the plant, was founded by airline Royal Dutch KLM, consultants Spring Associates, and EME in a bid to develop the embryonic market for sustainable aviation fuels. (BusinessGreen)
Thanks Gord – Qatar’s Gulf Organisation for Research and Development (GORD) has pledged to use its new voluntary carbon standard to offset emissions from the 2022 World Cup to be held in the Middle Eastern country. The Global Carbon Trust (GCT) is the Middle East and North Africa (MENA) region’s first voluntary carbon offset programme, and also part of the Qatari Diar Real Estate Investment Company, an offshoot of the country’s sovereign wealth fund. It has been submitted as one of 14 standards vying for approval under ICAO’s CORSIA offsetting scheme for international aviation. According to its submission, the GCT has been designed to eliminate the inability of the CDM to address the inequitable distribution of projects in the region, while also providing guidelines for projects to ensure social safeguards and contributing to the UN Sustainable Development Goals. The GCT’s registry is operated by IHS Markit. (Gulf Times)
The bill is always GREENER – US Senator Tom Udall (D) and Representative Peter Welch (D) reintroduced their GREENER Fuels Act on Thursday, seeking to reform the Renewable Fuels Standard (RFS). Like the companion bills unveiled last year, the proposal would phase out the corn ethanol mandate under the RFS and extend the cellulosic and advanced biofuels mandate until 2 bln gallons of annual production is achieved or the year 2037 is reached, whichever comes first. Last year’s bills did not receive a floor vote in either federal legislative chamber.
And finally… Ain’t nothing gonna slow them down – Big fuel price swings in the US don’t change driving levels much, largely because lots of driving isn’t particularly optional and that people lack reliable alternatives in many areas. According to Axios, which has analysed Department of Energy data, vehicle miles travelled (VMT) has hardly changed over the past 15 years, despite fluctuations in fuel prices of -40% to +50%. “The data suggests that a carbon tax would have to be really high to put a big dent in VMT. Plus, high carbon prices – for that matter any carbon prices – are politically a tough sell,” Axios wrote. “Consumers may be a lot more responsive to CO2 prices than typical gasoline price changes, but even so, the impact on vehicle emissions of a double-digit CO2 price will be small, at least in the near-term,” added Noah Kaufman, an economist with a Columbia University energy think tank. However, he points out that they can still be a useful part of the transportation policy toolkit. Transportation is the largest source of US GHG emissions, so cutting pollution from the sector via cleaner cars, efficiency, and mass transit is a priority.
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