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The EU Parliament voted to declare a climate emergency on Thursday, but without much of the wording that could pressure the incoming European Commission into more short-term ambition.
The EU ETS will turn bearish for the early part of next year amid Brexit uncertainty and ample fuel-switching, with potential bullish political developments not due until later in 2020, ICIS analysts said on Thursday.
EU carbon allowances are unlikely to re-test the €30 level anytime soon, analysts predict, with bearish factors including weak fundamentals, Brexit uncertainty, and a lack of new investors holding back prices.
EUAs lost ground on Thursday as one of the weakest auction performances of the year helped push prices below €25.
South Korea will shut down 15 of its coal-fired power plants over the next three months in a bid to help prevent winter spikes in air pollution, the energy ministry said Thursday, a move that will likely also reduce CO2 emissions.
New Zealand carbon allowances on Thursday fell to their lowest levels since late August as many buyers scale down activity due to the NZ$25 fixed price option remaining in place for 2019 compliance.
Offset issuances in Australia remained below average levels this week, the sixth out of the last seven to award lower numbers of the units, with just under 160,000 credits distributed.
California Carbon Allowance (CCA) prices rose following the Q4 auction results as traders viewed utility Pacific Gas & Electric’s return as a bullish prospect, while RGGI Allowances (RGAs) inched up on thin volume.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Not so mythical – A plan approved by Greece’s cabinet hopes to generate clean investment worth about €44 billion, cut emissions more than 55% by 2030 compared with 2005, and would close down all its coal-fired power plants. (Ekathimerini)
See you in court – The European Commission has referred Poland to the EU Court of Justice for allowing energy intensive businesses to be exempt from coal and gas tax. Under Polish legislation and contrary to EU law, certain energy products such as coal and gas, used by energy intensive companies that fall under the EU ETS are exempt from excise duty. The Commission said: “Common EU energy tax rules require businesses that benefit from such exemptions, if they have introduced environmental or energy efficiency improvements, to go beyond what is required by binding EU instruments such as the EU ETS. However, the Polish legislation does not require such a level of energy efficiency. These rules favour highly polluting activities and as such run against EU climate objectives and generate major distortions of competition within the EU.” The decision to refer Poland to the ECJ follows the country’s failure to bring its legislation in line with EU law following the Commission’s “reasoned opinion” which was sent on July 25, 2019. (Energy Live News)
Don’t want to talk about it – Leaked documents show that the US is refusing toinclude any mention of climate change or greenhouse gas emissions in a future trade agreement with the UK, reports BusinessGreen. The documents show the UK “faces some tough choices post-Brexit”. “On one hand, yesterday’s documents suggest the US will refuse to even mention climate change, let alone include climate-related safeguards. At the same time the White House will also push for the UK to accept demonstrably lower environmental standards for imported goods. On the other hand, the EU has made it absolutely clear that any future trade deal with the UK is contingent on continued close alignment on environmental standards and climate goals.”
Gonna need a bigger rebate – Canadians living in the North should receive higher rebates to compensate for the federal carbon tax than those in Southern Canada, the premier of Nunavut said after meeting Thursday with Prime Minister Justin Trudeau. The northern territory didn’t develop its own carbon pricing plan so it is subject to the federal ‘backstop’ tax, with the bulk of the proceeds recycled back to consumers. But Premier Joe Savikataaq argues the tax is not revenue-neutral for his territory because it has a multiplying effect in driving up not only the cost of transport and heating fuel, but also the price of food and other goods that are shipped to the remote region. However, the federal government counters that its plan provides exemptions, and that Canada’s northern territories have more flexibility on rebates or in creating offset programmes. While Nunavut also opposes the federal tax, it won’t fight it in court, Savikataaq said. Nunavut introduced its own rebate programme during the summer, which the government said would cut in half expected price increases for heating oil, gasoline, diesel, and other fuels. It also acknowledged at the time that the federal carbon tax does not apply to aviation fuel or fuel used by its electric utility, Qulliq Energy Corp. (Canadian Press)
Milkin’ it – New Zealand’s milk industry could be carbon neutral today, according to a new study. Researchers at AgResearch have calculated that a typical dairy farm could go carbon neutral now, while profiting after factoring in a premium paid by climate-conscious consumers. The modelling reveals that making relatively small changes to existing farming practices could allow milk to be marketed as carbon neutral, while also improving water quality downstream. However, there is one major caveat: the exercise assumes that most of the emissions from production will be offset by buying carbon offsets. Actual emissions on the farm would be reduced by a maximum of 20%, with the rest counteracted using credits. While that makes the proposition attractive at today’s carbon prices of just $25 a tonne, the calculations will change when the price of carbon inevitably increases. (Newsroom)
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