CP Daily: Wednesday March 4, 2020

Published 00:55 on March 5, 2020  /  Last updated at 00:55 on March 5, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

Brussels unveils EU climate law, pledging to include 2030 emission goal later

The European Commission unveiled its much-anticipated climate law on Wednesday to bind the EU to a net zero 2050 emission goal, pledging to add in a higher 2030 target later this year.

INTERNATIONAL

World Bank buys 4.2 mln methane offsets in fourth PAF auction

The fourth sale held by the World Bank’s Pilot Auction Facility (PAF) resulted in the procurement of 4.2 million tonnes of methane offsets, the bank announced Wednesday.

AMERICAS

California refutes DOJ arguments ahead of critical ETS linkage hearing

The US Department of Justice’s (DOJ) Constitutionally-based arguments against the California-Quebec carbon market linkage would vastly expand the government’s authority while presenting little legal precedent to do so, state officials wrote this week.

California diesel consumption drops in November, as fuel sector emissions remain under 2018 levels

California fuel consumption sagged further below the previous year’s total as diesel demand declined in November, likely cutting ETS-covered emissions compared to 2018, state data published this week suggested.

RFS Market: RINs extend fall as EPA chief talks market stabilisation measures

US biofuel credit (RIN) values continued to retrace on Wednesday as EPA Administrator Andrew Wheeler said the agency was looking at strategies to limit price volatility under the Renewable Fuel Standard (RFS).

ASIA PACIFIC

China loosens restrictions on new coal-fired power plants

China’s National Energy Administration (NEA) has loosened restrictions on building new coal-fired power plants in around a third of the nation’s regions and provinces.

Australia’s Santos to seek carbon credit cash for CCS project

Oil and gas producer Santos has said it will seek government support in the form of carbon crediting as part of a funding strategy for a carbon capture and storage project that may eventually store up to 20 MtCO2e annually over half a century.

EMEA

EU Market: EUAs lift 2% towards €24 after UK auction clears comfortably

EUAs rose on Wednesday after the first UK auction for over a year cleared above market, inspiring bullish sentiment even as financial markets continue to weigh the severity of the Covid-19 coronavirus outbreak.

COMMENT

The gravity-defying wonder of EUAs

The chart below shows how European carbon prices have outperformed the rest of the energy complex so far this year. EUAs are down just 1.7% since January 1, while coal, oil, natural gas and power have all fallen between 7% and 21%.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Biden’ his time – Former US Vice President Joe Biden carried 10 out of 14 US states voting on “Super Tuesday”, vaulting him past Vermont Senator Bernie Sanders in what is shaping up to be a two-man race for the Democratic presidential nomination. The moderate candidate Biden came out of the night with 453 delegates, with the democratic socialist Sanders winning the largest haul in California to bring his count up to 382. After spending $500 mln on his campaign, billionaire and former New York City Mayor Michael Bloomberg only won 44 delegates on Tuesday, and subsequently suspended his campaign and endorsed Biden on Wednesday. Massachusetts Senator Elizabeth Warren, once considered a frontrunner, is still assessing a path forward after failing to win a single state on Tuesday. The next Democratic primary occurs Mar. 10 in Michigan, which Sanders won in his 2016 campaign. (The Guardian)

HFC hurdle – US Senate Republican leadership and the White House are blocking efforts to add legislation reducing potent global warming refrigerants (HFCs) to a broader bipartisan energy package the Senate is considering this week. Senators John Kennedy (R) and Tom Carper (D) are trying to add the American Innovation and Manufacturing Act to the omnibus energy legislation from Senators Lisa Murkowski (R) and Joe Manchin (D), and have said they’d have the support of nearly two-thirds of the upper chamber for their measure. However, Wyoming Republican John Barrasso, who heads the Senate Environment Committee that oversees the bill, is objecting to holding a vote on the coolant bill, sources tell the Washington Examiner. The White House has also told senators it strongly opposes the coolant language as an amendment, suggesting there wouldn’t be support without a clause prohibiting states from setting their own limits on the refrigerant chemicals.

James gang – The US Senate Energy and Natural Resources (ENR) Committee voted 12-8 to confirm James Danly to the Federal Energy Regulatory Commission (FERC) on Tuesday, giving the now-four person commission a 3-1 Republican majority. Danly, who currently serves as general counsel for FERC, was nominated by the White House in October to fill out the term of former Chair Kevin McIntyre. However, President Trump deviated from past tradition in not sending FERC a Democratic nominee to pair after the departure of Cheryl LaFleur in 2019, drawing the ire of Democratic senators. ENR Ranking Member Joe Manchin (D) voted in favour of Danly’s nomination, but said he would not do so if the situation arose again. (Utility Dive)

Revolving doors – Fossil fuel firms are making good use of the many channels available to them in Brussels to influence EU energy and climate policies, The Guardian reports. According to the EU transparency register, the International Association of Oil and Gas Producers (IOGP) spent €350,160 in 2018 lobbying in Brussels – and activities from the gas industry have intensified since the European Commission unveiled its EU Green Deal. Among others, the oil and gas industry has targeted think-tanks and consulting firms.

Double the fun – In Australia, the Tasmanian state government has set a target to produce renewable energy equal to 200% of its needs in 2040, RenewEconomy reports, going well beyond the current goal of 100% by 2022. A mix of hydro, wind, and solar will allow it to export renewable energy to other states. Tasmania this week also announced it will set up a A$50 million renewable hydrogen fund.

Going neutral – Telstra, Australia’s biggest telecom company, on Wednesday said it will reduce its absolute greenhouse gas emissions by 50% by 2030, down from 1.3 MtCO2e last year, through investments in energy efficiency and renewable energy. But the company’s operations will be carbon neutral already from this year, meaning Telstra will seek to buy carbon offsets to immediately reduce its impact on the climate. Carbon credits will be sourced from renewable energy projects in Australia and other countries where it has operations, the firm said.

Wood worries – Brazil exported thousands of cargoes of wood from an Amazonian port without authorisation from the federal environment agency over the past year, increasing the risk they originated from illegally deforested land, two sources with direct knowledge of the matter told Reuters. After customs officials in Europe and the United States alerted Brazil of the issue, Eduardo Bim, president of the Brazilian environment agency Ibama, changed regulations to do away with previously required export authorisations, according to an internal document seen by the news agency. Para, the Amazonian state from where the thousands of unchecked shipments of wood and lumber were exported, is a hotbed of deforestation. For the 12 months through July 2019, Para accounted for 40% of all illegal deforestation in the Brazilian Amazon, according to government data.

Bag it up  – London-based environmental think-tank Sandbag has changed its name to Ember, reflecting the shift of its six analysts to focus on coal phaseouts and the “dying age of coal power” and away from its 2008 origins on campaigning to strengthen the EU ETS. Phil MacDonald will stay as chief operating officer while Sandbag founder Bryony Worthington sits on Ember’s board. A separate organisation called Sandbag has been set up out of Brussels to continue to focus on EU ETS campaigning.  It will be headed by Suzana Carp.

Gold strategy – The Gold Standard offset certification has unveiled its 2020-25 strategy, in which the non-profit will focus on reducing barriers to market entry, increasing capacity, and incentivising more action to scale positive climate + development impact across environmental markets, corporate sustainability, and climate + development finance.  Read more about it here.

And finally… The sinking sink – The Amazon could turn into a source of carbon in the atmosphere from a sink as soon as the next decade, owing to the damage caused by loggers and farming interests and the impacts of the climate crisis, a new study has found. The study, published on Wednesday in the journal Nature, tracked 300,000 trees over 30 years in large research networks in the Amazon and Africa, providing the first large-scale evidence of the decline in carbon uptake by the world’s tropical forests. The researchers found that the Amazon sink started weakening first, but that African forests are now rapidly following. With the new data, a senior author involved in the study said the research shows that relying on tropical forests is unlikely to be enough to offset large-scale emissions. “There is a lot of talk about offsetting, but the reality is that every country and every sector needs to reach zero emissions, with any small amount of residual emissions needing to be removed from the atmosphere,” author and Leeds University Professor Simon Lewis said. “The use of forests as an offset is largely a marketing tool for companies to try to continue with business as usual.” (The Guardian)

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