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Former international development minister Alok Sharma has been named UK climate and energy minister and will preside over this year’s UN climate talks, Downing Street announced Thursday as part of a wide-ranging cabinet reshuffle that featured a number of surprises.
California Carbon Allowance (CCA) prices slid this week as traders adjusted positions ahead of the first WCI auction of 2020, while a significant reaction in RGGI Allowances (RGAs) failed to materialise after Virginia legislators approved a bill to implement the state’s power sector ETS.
Compliance-oriented entities markedly increased their RGGI allowance holdings during Q4 of 2019 amid higher trading activity and rising prices, according to the quarterly market monitor published Thursday.
US biofuel credit (RIN) prices continued their recent bull run this week as reports surfaced that the EPA will meet with Renewable Fuel Standard (RFS) stakeholders over possible changes to the programme’s compliance waiver process, a response to a significant court decision last month.
EUAs rose above €24 for the first time this week on Thursday after another strong auction and as oil markets lifted on expectations that a spike in China’s Covid-19 coronavirus cases would prompt major output cuts.
Australia’s Clean Energy Regulator maintained an above-average carbon credit issuance rate north of 200,000 this week, with Terra Carbon picking up around 80% of the new offsets.
BITE-SIZED UPDATES FROM AROUND THE WORLD
On the road(map) – The US Climate Leadership Council (CLC), a Republican-backed think-tank, published its “Bipartisan Climate Roadmap” on Thursday for its carbon fee and dividend proposal. The CLC’s plan would assign a $40/tonne price to fossil fuels in 2017 dollars, rising by 5% above inflation annually in order to cut US CO2 output by 50% below 2005 levels by 2035. It would also include a backstop mechanism to increase the tax rate by a higher amount if emission cuts are not on track. While the tax would purportedly give more money back to lower- and middle-income families and implement a border carbon adjustment, it would also suspend, repeal, or pre-empt all current and future federal CO2 regulations on stationary sources. Thursday’s announcement also saw former UNFCCC Executive Secretary Christina Figueres and Obama-era energy secretary Ernest Moniz join as founding members of the CLC. Although the plan is designed to appeal to conservatives, and with congressional Republicans having released a suite of tree-planting and carbon capture and storage bills on Wednesday, GOP Representative Garret Graves issued a statement Wednesday night that said, “House Republicans stand united against carbon taxes and burdensome regulations.” (The Washington Post)
Under one and done – Separately, a $25/tonne US carbon tax would raise production costs by 0.7% and lead to a less-than-1% overall increase in consumer prices if costs are passed through by businesses, consultancy EY said in a new report. The analysis found that the electric power industry would experience a far greater impact from a CO2 tax – 11.8% – than most other industries, with transportation following in second place at 1.7%. The largest consumer price increases from a carbon tax are estimated to be in the categories of natural gas (13.1%), electricity (11.8%), fuel oil (10.5%), and gasoline and other motor fuel (9.2%).
Propped up – Free allocation of emission permits to industrials under New Zealand’s ETS is a subsidy to big emitters, and companies should not be allowed to add new activities that would qualify for free permits, the country’s parliamentary commissioner for the environment Simon Upton told a recent hearing on the ETS reform bill. According to Radio NZ, Upton said the criteria for receiving free permits on competitiveness grounds are so lacking that units have probably been given to a number of companies that should not receive them.
It’s Scope 3, Stupid – Scope 3 emissions from fossil fuel majors – those resulting from burning oil and gas sold by major producers – are getting increasing attention as an increasing number of companies, such as BP, make pledges to reduce them. One of Australia’s biggest energy firms, Woodside, on Thursday reported its Scope 3 emissions for the first time, saying 74 MtCO2e were emitted in 2019 from its customers using its products. Another 28 Mt came from ventures in which Woodside has equity, but does not operate. In comparison, the direct (Scope 1) emissions from the company’s own operations amounted to 8.8 Mt, down from 9.8 Mt the previous year.
Decisions, decisions – Swedish utility Vattenfall is speeding up thinking about options for its modern 1.6GW coal power plant at Hamburg Moorburg to minimise losses as Germany phases out the fuel, CEO Magnus Hall said, citing options of converting it to run on gas or biomass, or selling the plant. “We would also welcome it if compensation for the decommissioning of hard-coal plants was extended beyond 2026,” he added, though that is currently not planned. Vattenfall has never been happy with the plant, which was conceived in 2007, opened in 2015, cost €2.8 bln, and supplies two-thirds of the port town’s electricity needs. (Reuters)
And more decisions – Germany is unlikely to clarify anytime soon the extent of its plans to cancel EU carbon allowances associated with upcoming steps to close coal plants, an official said. “I expect no short-term decisions, nothing before 2022,” Jan Weiss, an aide of the German Emissions Trading Authority (DEHSt), told Montel. A proposed German law to exit coal, agreed by senior ministers last month, foresees reducing the country’s carbon auctions to offset surplus allowances generated by coal plant closures through 2038.
Getting better – Norwegian Air published its 2019 earnings on Thursday, reporting 70g of CO2 per revenue passenger kilometre – a 4% cut on 2018 but above the 55-60g levels reported by low-cost rivals Ryanair and Wizz Air. The carrier said its efficiency and younger fleet helped it save 1.7 Mt of CO2 last year compared to the industry average. Norwegian said it surrendered EU carbon units against roughly 40% of its total emissions, and 123,000 of its customers offset their flying footprint through its partnership with environmental service provider Chooose.
Arbor day – Officials of the Michigan college town Ann Arbor are considering imposing a carbon tax on the city’s internal operations that rely on fossil fuels. City Administrator Howard Lazarus presented his idea during a city council meeting this week, with others noting the tax could have a $30,000 impact on Ann Arbor’s general fund. The council will learn more about the tax during a Mar. 30 meeting, with the policy potentially helping the University of Michigan college town meet its goal of achieving carbon neutrality by 2030. (Mlive)
And finally… Tesla’s ant and lizard relocation service – Tesla has searched for bats in the wooded area where it plans to build its German car factory and also plans to resettle ants living there, reports Manager Magazin. In addition, the US carmaker intends to set up 400 birdhouses and relocate lizards, according to a list of environmental protection measures it has published. To make up for the planned deforestation, the company plans to plant three times as many trees elsewhere. Tesla CEO Elon Musk surprised industry observers last November when he announced plans to build the company’s new “gigafactory” for e-car and battery production near Berlin, with environmentalists shortly thereafter calling for a thorough assessment instead of a quick deforestation. Musk attempted to allay concerns by vowing that the plant will “absolutely be designed with sustainability and the environment in mind.” (Clean Energy Wire)
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