CP Daily: Thursday March 5, 2020

Published 23:52 on March 5, 2020  /  Last updated at 23:52 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 STORIES

BRIEFING: The long, inevitable road towards an EU border carbon adjustment

Border carbon adjustments will become necessary and inevitable as the world advances toward decarbonisation, a group of academics told UK lawmakers on Wednesday, highlighting that implementing these divisive policies could give Britain a post-Brexit competitive advantage.

Oregon Republicans’ ETS walkout ends 2020 session, as governor plans executive action

Oregon’s Democrat leaders closed the legislative term on Thursday after the Republican minority fled the capitol to protest a WCI-modelled cap-and-trade bill, but Governor Kate Brown (D) is now finalising executive action to enact climate policy.

EMEA

EU nations stand united on long-term climate strategy, less so on prompt action

EU nations unanimously adopted the bloc’s long-term strategy on Thursday, with even often-reluctant Poland on board with the pathway for an EU-wide 2050 climate neutrality goal.

Polish plan to scrap free airline CO2 units finds tepid support from EU nations, but backers optimistic

A Polish pitch to eliminate free carbon allowance allocations for aircraft operators failed to muster majority support at a meeting of EU environment ministers Thursday, but backers are optimistic the idea found enough backers to help it make its way into formal ETS reform proposals next year.

Germany to fall short of 2030 emissions target despite increased climate efforts -study

Germany will fall short of reaching its 2030 emissions reduction target via the wide-reaching climate package unveiled last year, according to a government-commissioned analysis released Thursday.

EU Market: EUAs stay near €24 as market weighs responses to virus impact

EUAs kept near €24 on Thursday, even as stock markets resumed falls following this week’s government stimulus measures aimed at cushioning the economic fallout from COVID-19 the coronavirus.

AMERICAS

Manitoba reverses course to apply flat C$25 carbon tax and large emitter programme

Manitoba will impose a fixed-price CO2 levy and output-based pricing system (OBPS) for large stationary sources starting on July 1, changing direction after the Canadian province previously ditched that plan and in turn rejecting the federal government’s rising carbon price mandate.

NA Markets: CCA prices retrace after WCI auction as RGGI continues decline

California Carbon Allowance (CCA) prices regressed this week after the Q1 WCI auction bucked previous trends to settle above the secondary market level, while RGGI Allowances (RGAs) dropped ahead of the Northeast US carbon market’s first sale of 2020.

ASIA PACIFIC

Analysts tighten forecast for South Korea ETS

South Korea’s ETS will face a bigger shortage than previously thought ahead of the 2019 compliance season, but will also see a larger excess of allowances for 2020 compared to previous estimates, analysts said Thursday.

Consortium launches new voluntary carbon credit in China’s Guangdong

A group of companies and organisations in China’s Guangdong province has launched an ‘ecological compensation’ offset standard, one of the first initiatives to target Chinese voluntary buyers.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Another one flights the dust – Europe’s largest regional airline – UK-based Flybe – has collapsed into administration, citing ‘additional pressure’ caused by the COVID-19 coronavirus outbreak. The carrier narrowly avoided going bust in January but has continued to lose money since then, with the coronavirus making a difficult situation worse. The news of yet another European airline going bust marks an additional blow to demand in the EU ETS, with Flybe recording verified emissions under the scheme of around 500,000-600,000 tonnes over the past few years versus a free annual allowance allocation of just under 223,000. And as Flybe collapsed after the end of 2019, it or its creditors could be on the hook for last year’s ETS compliance, which could prove tricky if the airline sold its free quotas for 2019 and/or 2020.

Getting its priorities straight – The European Investment Bank (EIB) will prioritise giving loans to projects that increase the electrification of energy supply by moving away from reliance on other fuels, a source close to the matter told ICIS. Gas projects will be funded where alternatives are not possible. The EIB loans funds to projects of common interest (PCIs), which will improve energy interconnections between member states and build security of supply and diversity in Europe. Between 2015-19, the EIB lent more than €5 billion to 30 PCIs, including to the Trans-Adriatic Pipeline which will bring 10 billion cubic metres of Azeri gas per year to the EU. The bank is currently considering its next round of lending to several PCIs, the source said. The EIB plans to provide more loans to green infrastructure and electrification projects. In regions where green electricity is not possible, the bank will consider the next least polluting fuel, like gas. Beyond 2021, the EIB will stop funding LNG-based energy projects, including for LNG terminals. The only projects that might still be financed will be ones that enable the switch from a heavy polluting transport fuel to LNG, or where electrification cannot be done.

No can do – Germany’s largest coal state, North Rhine-Westphalia, says it cannot accept the federal government’s proposed coal exit law without major amendments, arguing that the law treats hard coal power plants unfairly compared to lignite, the Frankfurter Allgemeine Zeitung (FAZ) reports. Regional economy minister Andreas Pinkwart said the current proposal amounts to “clear unequal treatment” and added that amendments were “absolutely necessary”. The coal exit law differentiates between lignite and hard coal in part because a lignite phaseout will have a greater effect on mining regions and workers than hard coal (Germany’s last hard coal mine closed in 2018). The federal government has negotiated compensation with lignite plant operators, while planning a series of auctions to take hard coal capacity off the grid. In a letter to German economy minister Peter Altmaier, four states (North Rhine-Westphalia, Baden-Wuerttemberg, Lower Saxony and Saarland) wrote that they could not accept the law as currently written: “The intended procedure for the decommissioning of coal-fired power plants cannot be accepted,” they said. (Clean Energy Wire)

Flying Finns – Finnish airline Finnair it had stepped up its efforts to achieve carbon neutrality by 2045 through a range of measures and would begin by halving its net emissions by 2025 from their 2019 level. Finnair said most of its emission cuts would be achieved through offsets but it will partner up with Finnish biofuels producer Neste to gradually increase the use of biofuel to 10 million euros annually by the end of 2025 and by year-end will introduce an optional biofuel ticket for passengers. (Reuters)

Last ditch effort – The Dutch government has said it would double the amount of money available under its renewable energy subsidy program to €4 billion in 2020 as it scrambles to meet its obligations under the UN Kyoto Protocol to cut emissions to 25% below 1990 levels by the end of this year. The government also introduced a €4,000 subsidy for buyers of new electric cars. (Reuters)

‘Dova loverMoldova is the latest country to submit a tougher Paris Agreement climate plan to the UN, pledging to cut emissions by 70% by 2030. Providing it receives technical, financial, and technological support, the eastern European country said it could up that to 88%. The country’s emissions plunged after the 1991 collapse of the Soviet Union to levels well below the 2030 goal, but have been edging up in recent years. Emissions were 67% below 1990 levels in 2016 at 14.6 MtCO2e excluding land use and forestry and have risen from 11.6 mln since 2000. The nation of four million people previously committed to cut by at least 64% below 1990 levels by 2030, but strive for a 67% cut. Moldova’s emissions represent 0.026% of the global total. (Climate Home)

Premier league – British North Sea-focused oil and gas producer Premier Oil has committed to carbon neutral operations at its fields by 2030, joining other smaller scale oil and gas firms Energean and Kosmos Energy in setting a net zero goal and pledging to use offsets to help get there. (Reuters)

Hard of hearing – The Supreme Court of Canada on Thursday declined to hear five British Columbia-based challenges against the approval of the Trans Mountain pipeline expansion project. Groups determined to overturn the project – two First Nations, environmental organisations, and teenage activists – had argued a previous judicial review of the pipeline’s re-approval by the federal government was unfairly denied by a single judge from the Federal Court of Appeal in September. However, the Supreme Court declined to hear those challenges relating to climate change impacts and claims of government bias, and as is customary it did not provide a reason for its decision. The proposed Trans Mountain pipeline expansion, owned by the Canadian government, would carry nearly a million barrels of refined oil products and crude oils from Alberta to the BC coast every day after it is finished in mid-2022. (CBC)

And finally… Hot damn – The last three months shattered winter heat records with temperatures almost 1.4 degrees Celsius (2.5 degrees Fahrenheit) higher than the next warmest wintertime just four years ago, Bloomberg reported. Average temperatures between December and February were 3.4 degrees Celsius warmer than average, according to the EU’s Copernicus Climate Change Service. “This was a truly extreme event in its own right,” Carlo Buontempo, director of Copernicus, said in a statement on Thursday. “It is likely that these sorts of events have been made more extreme by the global warming trend.”

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