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- ANALYSIS: Suspension lifted, EU ETS prepares to grapple with deluge of UK permits
- EU Market: EUAs slump to 4-month low as UK supply looms large
- Five Massachusetts generators above 2019 GWSA limits as allowance surplus grows
- Vermont Democrats back TCI programme, await final cap-and-trade structure
- Top LCFS credit holder sheds position in Q3, data shows
- Chinese carbon markets closed at least another week as coronavirus spreads
- Australia resources minister quits, seeks a more coal-friendly deputy PM
- Voluntary Market
While the EU carbon market welcomes long-awaited clarity regarding the resumption of the UK’s suspended allowance allocations and auctions, experts were mixed over the short-term impact on EUAs – though they all flagged the sheer amount of volume to come as a major price pressure.
EU carbon prices hit a four-month low on Monday as the prospect of additional supply from post-Brexit Britain weighed on an already fragile market, which is also dealing with tumbling energy prices and wider pressures from China’s coronavirus.
Five Massachusetts-based power plants exceeded their annual CO2 limit under the state’s Global Warming Solutions Act (GWSA) cap-and-trade programme last year, but data suggests that surplus allowances in circulation will enable those facilities to meet their upcoming compliance deadline.
Vermont Democratic legislators are supportive of the proposed Transportation and Climate Initiative (TCI) fuel sector carbon market, but they will likely wait until the final structure of the ETS is released before deciding whether to pass legislation requiring the state’s participation.
The largest holder of California Low Carbon Fuel Standard (LCFS) credits reduced its share of the surplus bank volume during the third quarter, while the number two entity offset that trend by bolstering its own position, state data shows.
China’s eight pilot emissions trading markets will remain shut for at least another week as governments have prolonged the national Lunar New Year holiday until Feb. 10 as they fight an uphill battle to control the spread of the coronavirus.
Australian Resources Minister Matt Canavan resigned on Monday evening, declaring he would back MP Barnaby Joyce’s challenge to lead the National party – the junior Coalition partner – because he would be a more staunch defender of the coal industry.
This dossier provides an overview of the voluntary carbon markets, including key market drivers, major trade hubs and the CDM’s use as a voluntary instrument via its cancellation platform.
Job listings this week
- Head of Corporate Developments, Gold Standard – Europe/East Coast North America
- Senior Manager, Climate and Financial Regulation, Ceres – Boston
- Manager, Climate Change Systems Policy, NZ Ministry for Primary Industries – Wellington
- Research Analyst, Climate Change Economics, Climate Analytics – Berlin
- Senior Consultant, Land and Water, South Pole – Zurich/London/Amsterdam/Berlin
- Regional Forest Carbon Advisor, Wildlife Conservation Society – Rwanda
Or click here to see all our job adverts
BITE-SIZED UPDATES FROM AROUND THE WORLD
What the Teck? – Vancouver-based mining company Teck Resources on Monday announced a carbon neutral by 2050 target, as the entity awaits the Canadian government’s decision on the approval of the Frontier oil sands project. Teck’s target comes more than a month after Environment Minister Jonathan Wilkinson said the government will take into account the country’s climate plan when it considers approval of the Frontier project. At full capacity, the C$20.6 billion ($15.55 billion) Frontier project could produce 260,000 barrels per day of bitumen in northern Alberta, making it one of the largest in the oil sands. (Reuters)
Plant, baby, plant – US Republicans are putting the finishing touches on a bill that would cement President Trump’s commitment to a global initiative to plant 1 trillion trees, though experts caution that this is not the most effective way to combat climate change. Legislation being drafted by Rep. Bruce Westerman (R) that will be unveiled this week would commit the US to planting some 3.3 billion trees each year over the next 30 years, an increase of about 800 million trees per year. The bill is just one component of a coming package of legislation from House Republicans that offers their solution to the climate crisis following Democrat’s rollout of their own sweeping plan that would aim to have the US reach carbon neutrality by 2050. Republicans’ efforts to deal with carbon so far lie primarily in sequestering it in trees. (The Hill)
Re-imagine — California utility Pacific Gas & Electric (PG&E) filed an updated bankruptcy plan on Friday that outlines a “re-imagined utility” that would beef up safety, operating, and governance programmes. The company filed for bankruptcy in Jan. 2019 after deadly wildfires in 2017 and 2018 created significant liabilities for the state’s largest utility. In the plan, the company said it would remain committed to renewable energy power purchase agreements as it works towards adhering to the state’s ambitious climate goals, including through the WCI-linked cap-and-trade scheme. In addition, the plan said it would revise its board, regionalising utility operations, appoint an independent safety adviser and make a variety of other improvements. On the heels of that plan, state Senator Scott Wiener (D) said he would introduce legislation this week to revoke the PG&E’s authority to serve its territory and direct the state to assume control. Numerous state politicians, including Governor Gavin Newsom (D), have voiced support for taking control of the company following its bankruptcy filing, but PG&E has opposed that option. (Los Angeles Times)
Bring on the biofuel – US airline Delta has signed an offtake agreement for sustainable aviation biofuel with Northwest Advanced Bio-fuel (NWABF). The offtake agreement builds on Delta’s $2-mln investment for an ongoing feasibility study for the sustainable jet fuel with NWABF. The study, which was announced in Oct. 2019 and is currently underway, is expected to determine the potential for a facility in the US state of Washington that could supply the biofuel for Delta’s operations in Seattle, Portland, San Francisco and Los Angeles by the middle of this year. The offtake agreement with NWABF anticipates fuel production by the end of 2023, while the advanced planning study is expected to conclude later this year. (Biofuels International)
Three for EVs – Carmakers GM, Porsche, and Audi all used Super Bowl ad time during Sunday’s Super Bowl to highlight their offerings in electric vehicles, marking a sharp increase in the number of EV ads from previous years. GM enlisted LeBron James in a 30-second spot advertising the resurrection of the Hummer brand as an electric pickup, with production beginning next year. To date, the market for electric cars in the US has been lukewarm, representing just 2 % of the 17 million vehicles sold nationwide last year. Carmakers’ attention on the Super Bowl shows a deliberate turn into marketing electric vehicles to a new cohort of consumers. (Climate Nexus)
Airports turned seaports – Using sea level rise data from Climate Central and airport locations from OpenFlights, US-based think-tank WRI found that 80 airports could be underwater with one metre of sea level rise, which researchers at the UN’s expert climate panel predict is likely to occur by 2100 if emissions aren’t reduced. Even if GHGs are curtailed and warming is limited to 2C, about half a metre of sea level rise is likely by the end of the century, which would flood 44 airports around the world. The highest number of affected airports are in North America (6), Europe (11), and Asia (7). They include Amsterdam’s Schiphol, which is the 11th busiest airport in the world and is predicted to be underwater with only half a metre of sea rise. In Asia, airports at risk of 50cm higher ocean levels include China’s Yancheng Airport and Iran’s Ramsar International Airport, while in the US, the worse situated include Key West International Airport in Florida and the Jacqueline Cochran Regional Airport in California. And sea level rise is only one aspect of climate change that threatens air travel. Extreme heat, which comes with thinner air, has the potential to ground planes by making them unable to generate lift, and also may make air travel more turbulent.
And finally… Taking back control – November’s crunch COP26 UN climate summit could be relocated to London from Glasgow, as British Prime Minister Boris Johnston weighs rising security costs and the potential embarrassment of hosting the talks in a region whose partly devolved Scottish administration is intent on breaking away from the UK and rejoining the EU. Johnston on Friday sacked summit host Claire Perry O’Neill, who may now sue the government over the move. Any decision on the host city could come as soon as Tuesday morning, as the PM is due to speak at the official UK launch of COP26 in London. (BBC)
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