CP Daily: Tuesday December 3, 2019

Published 01:17 on December 4, 2019  /  Last updated at 00:04 on December 5, 2019  /  Newsletter  /  No Comments

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

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TOP STORY

ANALYSIS: RGGI auction expected to align with secondary market despite dipping emissions

RGGI market participants are anticipating the upcoming auction to settle in line with the secondary market as the future potential expansion of the scheme to neighbouring states is overshadowing declining emissions in the Northeast region.

COP25

Lower coal use can’t stop global GHGs from rising in 2019 -study

Rising CO2 emissions from natural gas and oil in 2019 will more than offset abatement progress from lower coal usage in major economies, according to research published Wednesday.

ASIA PACIFIC

South Korea dismisses calls to intervene against high carbon prices

South Korea will not bow to industry pressure by intervening in its domestic carbon market to lower CO2 prices, but instead will help companies reduce emissions, the environment ministry said.

EMEA

Spain’s Repsol to consider forestry offsets for net zero emissions pledge

Fossil fuel company Repsol may purchase nature-based credits in pursuit of its 2050 net zero goal announced Monday, coming as part of a broader suite of interim CO2 intensity targets, internal carbon pricing updates, and renewable energy commitments.

EU Market: EUAs slump to two-week low as energy complex tumbles

EUAs slumped to a two-week bottom below €24 on Tuesday as the energy complex continued to weaken, with key contracts hitting their lowest for years amid milder weather and ample supply.

AMERICAS

Massachusetts GWSA allowance prices remain high in Q3 amid low liquidity -report

Carbon allowance prices under Massachusetts’ Global Warming Solutions Act (GWSA) power sector ETS remained high on the secondary market through the third quarter due to low liquidity and market participants expecting future price increases, according to a new report.

COMMENT

What critics of a European ‘carbon border tax’ are missing

Opinions abound on a controversial new policy announced by new European Commission President von der Leyen, the ‘Carbon Border Tax’. Yet many commentators limit themselves to repeating decade-old and often irrelevant arguments, overlooking the actual challenges such a measure will face.

ECOSYSTEM MARKETPLACE

Shades of REDD+: Should forest offsets be eligible for CORSIA?

When operating details of the Kyoto Protocol’s CDM were negotiated from 2001-03, many voiced concerns about forest carbon credits and their high risk of reversals, potential to displace emissions, and the difficulties in accurately quantifying emission reductions. Nearly two decades on, it is worthwhile to reconsider the question of whether or not forest mitigation could be ready for carbon markets. The question is back on the table as ICAO sets up a scheme for reducing emissions from international air travel.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

COP25: Living beyond our means – The European Environment Agency (EEA) has warned in a new report that “Europe will not achieve its sustainability vision of ‘living well within the limits of the planet’ by continuing to promote economic growth and seeking to manage the environmental and social impacts.” According to Greenpeace, the statement is in sharp contrast with comments by European Commission President Ursula von der Leyen who marketed the European Green Deal as “Europe’s new growth strategy” in a speech to delegates at the global climate conference in Madrid on Monday. “The EU is not on track to meeting the vast majority of environmental targets for 2020 – and the outlook for 2030 and 2040 is even bleaker,” added WWF. The EEA calls for fundamental changes to “the core systems that shape the European economy and modern social life – especially the energy, mobility, housing and food systems”. It acknowledges the fundamental need to ensure those most vulnerable do not bear the brunt of a green transition, in addition to documenting the dire state of the climate, nature, and human well-being.

COP25: Coal close-out – Spanish utility Iberdrola will replace its last two coal-fired power plants in the country with subsidy-free wind and solar energy, group chairman Ignacio Galan announced during the Madrid climate summit. The company’s proposal will include 420 MW of new wind and solar PV in Velilla in the province of Palencia, and another 130 MW of onshore wind in Lada, Asturias. The two coal generators are currently scheduled to shutter next year. (Renew Economy)

COP25: Danish dinero – The Danish government on Monday announced the proposed creation of a Green Future Fund, which will be financed to the tune of DKK 25 billion ($3.7 bln). The vehicle will invest in low-carbon and sustainable projects, while creating jobs in those sectors and facilitating the country’s transition to a decarbonised economy. Specifically, the mechanism will boost other existing funds: the Export Credit Fund by DKK 14 bln, the Growth Fund by DKK 4 bln, the Danish Green Investment Fund by DKK 6 bln, and the Investment Fund for Developing Countries by DKK 1 bln. “The agreement also allocates funds for agricultural land set-aside, which can help reduce agricultural greenhouse gas emissions,” the government said, adding that forests are also a priority for funding. Denmark will raise cash for the initiative by increasing taxes on a number of environmentally and socially harmful substances, including cigarettes and plastic bags. (Politiken)

Poland’s coal conundrum – Poland’s 1GW Ostroleka C coal-fired power plant project could be delayed or terminated, Poland’s minister of development Jadwiga Emilewicz said Monday, adding that the facility may need to be “revised” due to shifts in EU climate policy.  The minister said the cost of constructing the plant could be PLN 2-3 billion (€467-701 mln) higher than the previously estimated 6 bln zloty. “The investment plan that has already begun in the field of the turbine and coal generator started earlier this year. Whether we will finish this project in such a form, or whether it will not require correction due to the European Union’s climate policy, this is a decision that is to be made within the next six months,” Emilewicz added. The minister said Poland is now in a difficult situation due to the recent decision of member states to halt the EIB’s ability to finance most fossil fuel-fired projects. Ostroleka C – a joint venture between Polish energy firms Enea and Energa – was set to be the country’s final new coal unit. (Business Insider)

Forced release –  Tech giant Amazon has been trying to withhold its Scope 1 and 2 emissions from its Australian operations, saying publishing them might give away “trade secrets”. However, the country’s Clean Energy Regulator has dismissed the case, and on Tuesday published Amazon’s 2017-18 emissions data, showing the company that year emitted 55,739 tCO2e in Australia. Almost all of those emissions were Scope 2, meaning they were indirect carbon output, likely related to energy consumption at Amazon data centres, according to RenewEconomy.

Bring on Brouillette – The US Senate on Monday night confirmed Dan Brouillette as Energy Secretary, replacing Rick Perry, who exited Sunday after nearly three years under the Trump administration. Brouillette, previously the deputy secretary at the Energy Department, was confirmed in a 70-15 vote, with 22 Democrats backing his selection. (Politico)

Walzing Minnesota – Governor Tim Walz (D) tapped the heads of multiple Minnesota government agencies in an executive order Monday to be part of a new collaboration aimed at getting the state back on track with its climate change goals. Walz said he’ll look to the new climate change sub-cabinet to suggest policy changes and coordinate responses to reduce CO2 emissions and to provide more resiliency as the state experiences heavier rains and warming temperatures. Minnesota lawmakers set GHG reduction goals in 2007 of 30% below 2005 levels by 2025 and 80% by 2050, but so far the state isn’t meeting them. (MPR News)

Gas gains – Fossil fuel trade group the Natural Gas Supply Association (NGSA) came out in support of carbon taxes on Tuesday, though the organisation said it isn’t lobbying for any specific proposal. Representing companies, including Exxon Mobil, Chevron, and ConocoPhillips, President Dena Wiggins said member companies were unanimous in their support for taxing carbon emissions and suggested more in the industry were likely to follow. Not included in the NGSA’s announcement were other greenhouse gas emissions, such as methane, which oil companies routinely flare in lieu of building pipelines and other infrastructure to get natural gas to market. (Chron)

Registry recess – The UN’s CDM Registry will operate with reduced capacity between Dec. 2 and Jan. 6, with delays expected over this period. Operations will be closed on Dec. 25 and 26 and Jan. 1. Due to the ITL year-end closure activities, no transactions will be processed on Dec. 31 after 1030 GMT. “In order to ensure the completion of forwarding requests by Dec. 31, project participants are kindly requested to submit signed F-CDM-FWD forms no later than Dec. 20 close of business,” the UNFCCC said.

And finally… Had to be higher – Oil major Exxon has known for decades that a carbon tax would have to be at least $75/tonne to be effective in combating climate change, a level far higher than the plan it is currently promoting through the Americans for Carbon Dividends (AFCD) campaign, newly discovered documents show. Exxon’s understanding of carbon taxes was revealed in a 1991 economic report commissioned by Canadian-based Imperial Oil Limited, an Exxon subsidiary, and written by economics consulting firm DRI/McGraw Hill. “Only the carbon tax of $200 per tonne of carbon or $55 per tonne of CO2 achieves approximate stabilisation of Canada’s CO2 emissions,” Imperial summarised in a discussion paper written shortly after it received the report. That translates to a tax rate of $78 per tonne in 2019, far higher than the tax Exxon currently supports through ACFD of $40/tonne. (Climate Liability News)

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