CP Daily: Wednesday January 15, 2020

Published 23:27 on January 15, 2020  /  Last updated at 23:27 on January 15, 2020  /  Newsletter  /  No Comments

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

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TOP STORIES

California ETS watchdog recommends automatic supply trigger, altering value of banked allowances

California regulator ARB should consider an automatic supply-cutting mechanism in the WCI-linked carbon market, and subsequently should adjust the compliance value of banked permits, according to a watchdog report released Wednesday.

Oregon GOP may walk out over cap-and-trade bill despite more lenient provisions

Oregon Republicans are open to walking out on the upcoming legislative session for a second straight year to protest a revised WCI-modelled ETS bill released this week, arguing the proposal should instead be decided by a ballot initiative.

EMEA

EU lawmakers stress need for bloc to have interim goals towards net zero emissions

The EU’s Parliament gave its firm backing to the European Green Deal on Wednesday, while stressing that the bloc needs interim targets towards its 2050 net zero emission goal.

EU Market: EUAs bounce back above €24 after strong auctions

EUAs climbed back above €24 on Wednesday, unwinding the previous session’s losses then making further gains as the day’s two allowance auctions cleared at premiums to reflect stronger demand.

EUA allocations to new, expanding facilities grind to a crawl in H2 2019

Allocations of free carbon allowances to new and expanding companies in the EU ETS ground to a crawl in the second half of 2019, with nearly two thirds of the over 310 million units assigned to the bloc’s New Entrants’ Reserve (NER) remaining unclaimed with a year left in the phase.

ASIA PACIFIC

No cap will make China’s carbon market less efficient -report

China’s decision to make its ETS intensity-based rather than having an absolute CO2 cap will make emission cuts more expensive, according to researchers, who say the system can still achieve significant reductions.

NZ Market: NZUs inch to new highs, but observers see volatility ahead

NZUs rose further on Wednesday to extend this week’s record high, but with secondary market prices now 16% above the 2019 Fixed Price Option level some market participants expect increased volatility in the next few months.

AMERICAS

California hands out 1.3 mln offsets to start 2020

California regulator ARB divvied out nearly 1.3 million new California Carbon Offsets (CCOs) in its first issuance of 2020 as the all-time supply rose to nearly 170 mln, according to data published Wednesday.

New US soil offset protocol seeks simplified approach to additionality

A US offset registry and agricultural technology company began the process of developing a soil carbon methodology for the voluntary offset market on Wednesday, with a focus on streamlining the process of proving additionality.

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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

We need to talk – US Democrat presidential candidates were eager to discuss climate change last night, pointing to the issue in the context of trade and foreign policy before moderators finally turned to a set of climate questions in the final half-hour of the debate. According to Politico, the candidates all reiterated their pledges to undo Trump’s various environmental rollbacks and to transition away from fossil energy, but they differed over exactly how to get there.

Budget breakdown – Europe’s carbon market is on track either to fall short of delivering its share of an international climate goal or to require an “unrealistic” update from 2030, according to the German Environment Agency (UBA). The Paris Agreement’s ambition to limit global warming this century to 1.5C implies a budget of around 30 bln tonnes of CO2e for the EU ETS between 2016-2050, the UBA said in a report. In contrast, the UBA estimated the EU ETS was already on track to exhaust 25 bln tonnes of this budget by 2030. Even the most ambitious 1.5C scenario in the European Commission’s policy vision implied a total ETS budget of 33 bln tonnes, or 10% more than the UBA’s most cost-efficient path for cutting CO2. (Montel)

German kick start – Angela Merkel is seeking to kick start her stalled climate agenda and make good on vows to clean up Europe’s largest economy amid unrelenting public pressure on her fractious government, Bloomberg reports. The chancellor met with the premiers of German coal mining states on Wednesday to see how already earmarked funds may hasten an exit from the dirtiest fossil fuel. The gathering in Berlin is part of a flurry of activity with climate at the top of Germans’ political concerns after a landmark climate package fell short with voters. Sending a message that Germany is ready to invest in a cleaner economy, her administration on Tuesday unveiled an €86 billion package to overhaul the country’s rail network. The hope is to shift people and goods away from more polluting road and air transport.

Chose well – Etihad Airways on Wednesday announced its commitment to a minimum target of zero net carbon emissions by 2050 and halving its 2019 net emission levels by 2035. In a statement, the UAE-headquartered airline said that its ambitious environmental targets will be achieved through a mix of internal initiatives, collaboration with industry partners, and adoption of a carbon offsetting programme. Tony Douglas, group CEO of Etihad Aviation Group, said the entire air transport industry – from airlines and suppliers to airspace providers – are responsible to help reduce aviation emissions, and solutions need to be holistic and coordinated, not isolated and sporadic. Etihad joins a growing group of airlines that are striving to reduce and offset their emissions. (Arabian Business)

Rising felling – Deforestation in Brazil’s Amazon rose 85% in 2019 compared to the previous year, according to a data-based warning system from Brazil’s National Institute for Space Research (INPE), in the latest piece of evidence to highlight rampant tree-felling. According to data from INPE’s DETER database, which publishes alerts on fires and other types of developments affecting the rainforest, the area with deforestation warnings last year totalled 9,166 sq. km (3,539 sq. miles), compared to 4,946 sq. km in 2018. The DETER numbers are not considered official deforestation data. That comes from a different system called PRODES, also managed by INPE. PRODES numbers released in November showed deforestation rose to its highest in over a decade this year, jumping 30% from 2018 to 9,762 sq. km. Researchers and environmentalists blame right-wing President Jair Bolsonaro for emboldening ranchers and loggers by calling for the Amazon to be developed and for weakening the government environmental agency Ibama. Bolsonaro has denied responsibility and blamed previous left-wing governments for the increase in deforestation, saying policies including budget cuts at agencies like Ibama were in place well before the new government took office on Jan. 1. (Reuters)

Final five – Mexico currently has infrastructure that can supply the country with 30% clean energy, just below its goal Energy Transition Law goal of 35% by 2024, according to a government press release. As part of the Energy Transition Special Program for the 2019-2924 period currently under development, President Andres Manuel Lopez Obrador instructed the other 5% of the goal be achieved through the optimisation of the Laguna Verde nuclear plant, repowering of hydroelectric plants, and building on the existing general transition towards renewable energy.

Ammonia afloat – Shipbuilder Samsung Heavy Industries and engine maker MAN Energy Solutions are among leading companies looking to develop a vessel that can run on ammonia as part of efforts to speed up carbon reductions in shipping through cleaner fuel options. The project aims to be operational for an oil tanker by 2024 but be adaptable to other types of ships. (Reuters)

Bye Bryony – British Baroness Bryony Worthington has stepped down as executive director of the European arm of climate campaigners Environmental Defense Fund. In an email, she gave no reason for her resignation but said she remains with the organisation on a part-time consultancy basis. Worthington was the lead author in the team that drafted the UK’s 2008 Climate Change Act, and she founded London-based think-tank Sandbag the same year.

And finally… Einar re-public – Former power trader Einar Aas – a Norwegian whose default in 2018 blew a €114 mln hole in the clearing fund of Nasdaq’s European commodities unit – has returned to the market as an analyst with trading firm Branden Forvaltning. “We can confirm that Einar Aas has been appointed as analyst at Branden Forvaltning since 1 January. He will not execute any trading activities,” the firm’s chairman, Aasmund Haugsvaer, told Montel on Tuesday. “It is obvious that he has something to offer us on analysis,” the chairman added. Aas had been the single most successful power trader in the Nordic market. (Montel)

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