CP Daily: Thursday January 9, 2020

Published 01:18 on January 10, 2020  /  Last updated at 01:17 on May 9, 2020  /  Newsletter  /  No Comments

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

COMING IN FEBRUARY: Carbon Fast Forward – Manchester

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TOP STORY

Utah Republicans cue up budget funding for California ETS lawsuit

Utah Republicans have included funding in the state’s upcoming budget for a lawsuit challenging the legality of California’s cap-and-trade programme and emissions performance standard, but final approval is still months away, a government spokesperson told Carbon Pulse.

AMERICAS

NA Markets: CCAs jump to begin 2020, while RGGI prices creep up

California Carbon Allowance (CCA) prices surged to begin the new year on higher demand from speculators, while RGGI allowances (RGAs) inched up on thin volume.

Additional WCI offset project seeks California LCFS transition

Another California-registered offset project is aiming to transfer to the state’s Low Carbon Fuel Standard (LCFS), according to public filings, adding to a recent trend as stakeholders seek higher prices in the complementary market-based scheme.

EMEA

EU Market: EUAs rise from €24 on stronger auction, steadier energy markets

EUAs climbed above €24 on Thursday after a stronger auction and as the energy complex lifted following a fresh rocket attack in Iraq and strikes affecting France’s power market.

Slovenian prop shop Belekton hires former utility CO2 trader to open Berlin desk

Slovenia-based trading house Belektron has hired a former utility emissions trader to set up a new desk in Berlin.

ASIA PACIFIC

Latest Australian offset issuance tops 1.1 mln ACCUs

Australia’s Clean Energy Regulator has issued over 1.1 million carbon credits since Christmas, its first data release of 2020 showed Thursday.

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WE’RE HIRING!

Climate and Energy Correspondent – Brussels

Carbon Pulse is looking for a Climate and Energy Correspondent to help us bolster and expand our coverage of the EU ETS and other energy and environmental markets, as well as climate and energy policy at a national, EU, and international level.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Keen on green – Global issuance of green bonds, loans, and other types of sustainable debt totalled $465 billion last year, up 78% from $261 bln in 2018, with the outstanding volume topping $1 trillion, according to data compiled by BloombergNEF. Green bonds made up $271 bln of the total, with sustainability-linked loans the fastest-growing sub-sector. (Bloomberg)

More cold feet – In his State of the State address Thursday, Vermont Gov. Phil Scott cast a shadow on the prospects of him signing his state up for the multi-state compact to reduce vehicle emissions, known as the Transportation Climate Initiative. According to CommonWealth, Scott, who along with Massachusetts Gov. Charlie Baker is one of two Republican governors in New England, did not address the TCI by name but discussed at length ways Vermont has been working to incentivise the purchase of electric vehicles. “It’s incentives, not penalties, which will help us transition more quickly,” Scott said in his speech, adding that many Vermonters have to travel long distances to get to work out of necessity, not choice. “I simply cannot support proposals that will make things more expensive for them.” Vermont was one of the 12 original states to begin negotiations on a regional cap-and-trade programme for emissions from cars and trucks. New Hampshire has since withdrawn from those talks following estimates that the proposals under consideration could add 5-17 cents to the price of a gallon of gasoline. Read our recent roundup of other states’ positions on TCI here.

Financial fossil focus – US environmental, indigenous rights, and investor groups are uniting behind a new campaign targeting the financial sector for funding fossil fuel projects. Labelled “Stop the Money Pipeline,” the effort builds on the years-long divestment movement aimed at endowments, philanthropies, universities, and faith organisations. The groups will now train their sights on banks, insurance companies, and asset managers in a new push beginning Friday. The campaign’s website names JPMorgan Chase, BlackRock and Liberty Mutual as top targets. (Politico)

Clean contention – Climate activists sued the Oregon Secretary of State on Wednesday over her rejection last month of two clean energy petitions for the Nov. 2020 election. Initiatives 48 and 49 would have required 100% carbon-free energy by 2045 in slightly different ways, and backers were planning to ultimately go forward with one or the other and to use them as leverage in the ongoing cap-and-trade debate. However, Secretary of State Bev Clarno ruled the initiative petitions violated the Oregon Constitution by addressing more than a single issue — specifically, with prevailing-wage and other labour requirements for renewable energy construction projects used to comply with the 100% standard. The petitioners charged that Clarno “has provided no legal reasoning or explanation for departing from settled law and practice” on including labour standards in statutes. (Portland Business Journal)

Back-up planThe Port of Rotterdam has called for the EU to include shipping in its ETS if the IMO does not put “sufficiently ambitious” plans in place to cut emissions at the global level by 2023.  In a report published Tuesday, the port authority said the idea should be investigated by the European Commission in order to have a back-up instrument.  “The decarbonisation of shipping is expected to be too slow if there are no strong financial incentives such as market-based measures in place at global or EU level,” it said. “In addition, the introduction of a global carbon offset scheme for shipping emissions above 2020 levels could help curb growth of new emissions,” the port authority added, which would echo the approach being adopted by fellow UN agency ICAO to address aviation emissions.  The IMO’s current climate strategy, adopted in 2018, envisages a cut of at least 40% in emissions per transport work from 2008 levels by 2030, and a cut of at least 50% to the global industry’s total output by 2050. (Ship & Bunker)

R WE buying it? – RWE, Germany’s largest power producer, could become a takeover target as big industry players strive to expand their renewable portfolios around the world, Goldman Sachs said in a research note on Wednesday. Following an asset swap with E.ON, RWE last year became Europe’s third-largest renewables player after Spain’s Iberdrola and Italy’s Enel, and the world’s No.2 offshore wind player after Denmark’s Orsted. However, its EV/EBITDA multiple – a valuation metric that measures the ratio between enterprise value and earnings – stands at 7, less than half of Orsted’s 14.2. With a market value of less than 17 billion euros ($19 billion), RWE looks cheap when compared to its bigger rivals, Goldman Sachs said. (Reuters)

Naughty – The UK government has fined two oil and gas companies nearly £133,000 in total for breaches linked to the EU ETS.  Repsol Sinopec Resources UK was hit with a penalty of £96,244 on Dec. 2 last year, while TOTAL E&P UK was fined £36,487 two months earlier – both for violating Regulation 41 of the UK’s Greenhouse Gas Emissions Trading Scheme Regulations, which has to do with a company surrendering a sufficient number of carbon units against its emissions output.  It was unclear whether Repsol’s fine related to its €4 million EU ETS bill that the exploration firm unsuccessfully appealed in court last year.

It’s coming – On Jan. 14, the European Commission is expected to propose its ‘just transition’ fund to support the shift to a climate neutral EU. The mechanism will aim to mobilise €100 billion to help regions whose economies are based on carbon-intensive activities, like coal mining. (WWF)

And finally… Hot spot – The world had its second-hottest year on record in 2019, at the end of what was the hottest recorded decade, which itself was 0.6C warmer than the 1981-2000 average, according to the Copernicus Climate Change Service of the EU.  The report comes a week ahead of similar findings due from US agencies NASA and NOAA. The past five years were 1.1-1.2C warmer than pre-industrial temperatures and perilously close to one of the temperature guardrails outlined in the Paris Agreement. (Washington Post)

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