CP Daily: Wednesday February 12, 2020

Published 23:17 on February 12, 2020  /  Last updated at 23:17 on February 12, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

Oil major BP deepens long-term climate targets, leaves details for later

Oil major BP set a new voluntary 2050 climate goals on Wednesday, pledging to achieve zero emissions from its operations and to halve the carbon intensity of its products.

ASIA PACIFIC

Australia’s industrial emissions rise unabated under weak Safeguard Mechanism, analysts say

Carbon emissions from facilities regulated by Australia’s Safeguard Mechanism have increased 60% above 2005 levels and are set to balloon further over the next decade as major emitters are not required to reduce output under the policy, analysts said Wednesday.

NZ Market: Profit-taking pulls NZUs to 2-month low

New Zealand carbon allowances have shed 4.3% this week, dipping below NZ$27 in Wednesday trade as emitters sold off permits, preparing to pay the NZ$25 fixed price option at the May compliance.

SK Market: KAUs climb to 6-week high as auction fetches bumper prices

South Korean spot CO2 allowances rose to their highest levels since Dec. 26 on Wednesday, with prices reaching even higher in the monthly auction in the afternoon, pushing the 40,000 won threshold.

Guangdong postpones CO2 auction amid coronavirus disruptions

The Guangdong carbon exchange has postponed a CO2 allowance auction under its emissions trading scheme originally scheduled for Wednesday, with a new date yet to be set.

AMERICAS

ANALYSIS: California offset prices on the rise after invalidation case ends

California Carbon Offset (CCO) prices have increased in recent weeks on a variety of factors, including the ARB’s recent invalidation of nearly 20,000 credits, market participants said.

California mints WCI offsets to project involved in invalidation case

California regulator ARB granted 314,200 new California Carbon Offsets (CCOs) this week, including nearly 19,000 credits from a livestock project involved in last month’s invalidation ruling, according to data published Wednesday.

Virginia Senate follows House in approving RGGI companion legislation

The Virginia Senate passed a clean energy bill Tuesday night that would implement the state’s RGGI-modelled power sector ETS regulation with state-run allowance auctions, following the House’s approval of its own version earlier in the day and setting up a signature from Governor Ralph Northam (D).

INTERNATIONAL

IEA to muster clean energy leaders to ensure emissions peak has passed

The IEA will gather ministers and energy industry leaders this summer with the aim of accelerating clean energy deployment this decade and building momentum ahead of the start of the Paris Agreement.

EMEA

EU Market: EUAs rise to €24 on strong auction, signs of virus decline

EUAs leapt higher on Wednesday on a strong showing at Poland’s bumper auction and as the energy complex made gains on signs that the coronavirus, now officially known as Covid-19, could be waning.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

It’s Gove time – Michael Gove, the UK’s Chancellor of the Duchy of Lancaster, is set to become one of the major winners of Thursday’s government reshuffle and will be appointed COP26 president by Prime Minister Boris Johnson, the New Statesman reports. Gove appears certain to retain control of the Cabinet Office and to take on a trio of roles. The Brexiteer and former environment minister is in line to oversee the UN climate summit being hosted by the UK in Glasgow this November, as well as efforts to ensure that conference is part of a government programme to reach net zero emissions overall. Gove is also due to have oversight of Britain’s future trading relationships with Europe and the rest of the world, and he is “highly likely” to take charge of improving the efficiency and delivery of public services. Gove’s COP26 appointment has been predicted by several British media outlets, with the Cabinet Office boss delivering a major speech on climate change this week. The UK’s ability to effectively steer this year’s crunch talks has been called into question though after Johnson last month sacked former minister and the original COP26 president Claire O’Neill. A Financial Times report has revealed the UK government has held talks with an alternative COP26 venue in London as a possible fallback option amid claims of spiralling costs and chaotic preparations in Glasgow.

The taxman stalleth – A rare policy enacted under President Trump to address climate change has run into an unexpected hurdle: the tax man. In 2018, Congress approved a lucrative tax break for companies that use carbon capture technology on industrial sites. At least a dozen carbon capture projects, potentially representing billions of dollars in investments, have been announced since Congress passed its 2018 tax break. But two years later, those plans remain blocked because the Internal Revenue Service has yet to explain how, exactly, companies can claim the tax credit that would make the projects viable. (New York Times)

Know your enemy – Top US House Republicans, including Minority Leader Kevin McCarthy, released a package of climate bills on Wednesday as an alternative to Democrats’ proposals to limit the use of fossil fuels. The bills would expand and make permanent ’45Q’ tax credits for carbon capture, as well as making permitting for those facilities. They would also direct research funding into finding ways to capture carbon more efficiently in natural gas power plants and store that CO2 underground or find industrial uses for it. Another bill would increase domestic and international efforts to plant more trees in line with the World Economic Forum’s Trillion Trees Initiative. However, GOP lawmakers remained opposed to the idea of a carbon price or curtailing fossil fuels. “They’ve misidentified the enemy. It’s emissions, not fossil fuels,” Representative Garret Graves (R) said. (The Houston Chronicle)

Not early enough – The UK’s planned ban on sales of new petrol, diesel, or hybrid cars could start as early as 2032, Transport Secretary Grant Shapps has said. Last week, the government sparked industry concern after bringing the date forward from 2040 to 2035 in a bid to hit mid-century net zero targets. But Shapps told BBC Radio 5 live it would happen by 2035, “or even 2032,” adding there would be consultation. The SMMT car trade body had previously said the 2035 figure was “concerning”. The government is setting out its proposals in the run-up to its hosting of COP26 in Glasgow this November. A Department for Transport spokesperson said: “We are consulting on a range of possible dates to bring forward the end to the sale of petrol and diesel cars and vans. The consultation proposal for this is 2035 – or earlier if a faster transition appears feasible – as well as including hybrids for the first time.”

The harder they fall – Britain’s economy will be the hardest hit in Europe by climate change because being an island means coastal erosion and flooding will have devastating effects, a new report has found. The Global Futures study by WWF and the Global Trade Analysis Project estimates the decline of natural assets will mean the UK suffers some of the biggest financial losses if nature is not preserved from the destruction it currently faces. The country will be third behind only the US and Japan, taking an annual hit to its economy of at least £16 billion by 2050 – the current combined annual funding of the police, fire service, prisons, and law courts.

Switch hitch – Making Poland’s 1 GW power plant in Ostroleka gas-fired instead of coal-fuelled as planned may delay the project beyond 2023, Poland’s minister responsible for energy infrastructure Piotr Naimski said on Tuesday. Construction of the plant in north-east Poland has already started, but its investors, state-run utilities Energa and Enea, have not yet secured full financing. Banks have shied away from backing such projects for environmental and sustainability reasons. Naimski said the fuel switch is being discussed, with a final decision expected soon. According to Poland’s gas grid operator, the process of connecting Ostroleka to the gas grid may take at least five years. Ostroleka, which was supposed to be Poland’s last coal-fuelled power plant, has been criticised by environmentalists and analysts, who said that it is unlikely to pay off due to rising emission costs.

Bank nudge – The EU Parliament voted by a large majority for a non-binding resolution urging the European Central Bank to put climate change at the centre of the bank’s review of its monetary policy strategy this year, endorsing the bank’s chief vision for “gradually eliminating” carbon assets. The European Parliament voted by a large majority for a resolution recommending the ECB looks at ways in which central banks can tackle the climate crisis and help drive the continent’s decarbonisation. While the text bears no legal implications, it is a strong political signal of lawmakers’ support for ECB plans to assess and take into account climate risks. (Climate Home)

Uncommon interest – The EU has given its formal backing to 32 major gas infrastructure projects in a move critics say will lock Europe into burning fossil fuels for generations. The EU Parliament overwhelmingly voted to support Brussels’ fourth Projects of Common Interest list under its “Connecting Europe” programme on the grounds that three-quarters of the 151 projects were electricity- rather than gas-based and would prevent a much more gas-heavy third list remaining in force. The total cost of the infrastructure is estimated to be €29 bln. (The Guardian)

Awkward date – Meanwhile, Zali Steggall – the independent MP who earlier this week floated a new bill to end Australia’s climate paralysis – is hoping to get a meeting with PM Scott Morrison to find common ground on the issue, according to SBS. After Steggall presented her plan on Monday, opposition leader Anthony Albanese cast doubt over the bill’s prospects, saying Morrison was unlikely to allow it to be discussed in parliament, much less be voted on.

And finally… Pot paradox – Marijuana is the US’ most energy-intensive crop, and federal prohibition makes it difficult for the industry to clean up its act, Politico Pro’s Natalie Fertig and Gavin Bade report. Roughly two-thirds of Americans now live in states with some form of legal sales. But as the market expands, regulators and activists are pushing the industry to become more efficient – and that might require federal legalisation. Because marijuana is banned under federal law, cannabis cannot be regulated nor can its environmental effects be researched by the EPA. It also means it cannot be traded across state lines, leading to inefficient, indoor growing operations in states that would simply source their raw product from elsewhere were it legal, the pair reports. And in most cases, banks are banned from providing loans that would allow growers to make sustainability upgrades. (Politico)

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