CP Daily: Monday March 17, 2020

Published 03:22 on March 17, 2020  /  Last updated at 03:22 on March 17, 2020  / Carbon Pulse /  Newsletters

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

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EU Market: Carbon plummets 13% to sub-€20 levels as wider markets gripped by virus-fuelled sell-off

EU carbon prices plummeted on Monday, falling below €20 for the first time in over a year as the coronavirus-fuelled sell-off in financial markets picked up pace despite governments ramping up emergency measures, including the US Federal Reserve slashing interest rates to zero.

Switzerland shuts emissions trading registry, extends compliance deadline over virus crisis

Switzerland has closed its emissions trading registry and extended the ETS compliance deadline for emitters due to the COVID-19 coronavirus outbreak, the government announced Monday, adding that it had also cancelled this month’s allowance auction.


EU’s climate action disrupted as Brussels scrambles to tackle coronavirus

The pace of EU legislative activity on climate policy is set to slow as the response to COVID-19 coronavirus takes the attention of the bloc’s institutions and as non-essential meetings are postponed.

German ETS-covered plant emissions fell nearly 12% in 2019 -govt data

Germany saw its EU ETS-covered emissions from stationary installations fall by nearly 12% last year, according to government figures released Monday, as the EU’s top emitter replaced a significant amount of coal-fired power with cheaper gas and renewables.


China posts weakest industrial output numbers in three decades

China’s industrial output fell 13.5% over January and February, the government said Monday, underpinning estimates that its emissions have been dented in the short term, while rapid COVID-19 spread in Europe and the US may slow China’s expected CO2-intensive recovery.

Australian MP to hold off climate change bill with virus fight in focus

Independent Australian lawmaker Zali Steggall will delay the introduction of her climate bill scheduled for next week to leave the government room to focus on battling the COVID-19 virus.

Australian carbon market conference postponed amid virus spread

The Carbon Market Institute has postponed its annual Australasian Emissions Reduction Summit as a precaution amid the COVID-19 virus spread, it announced Monday.


NA Markets: CCAs, RGAs plummet in early-morning trading amid global slowdown fears

California Carbon Allowance (CCA) and RGGI Allowance (RGA) prices dove on Monday morning after the US Federal Reserve announced further rate cuts to bolster the stock market as the coronavirus pandemic spread across North America.

Oregon governor has authority to roll out cap-and-trade scheme, state DOJ finds

Oregon can implement an ETS on direct and indirect sources of emissions using existing legislative authority, the state’s Department of Justice (DOJ) concluded, though its legal analysis did not address whether state-run auctions could occur.


Airlines’ CORSIA offset requirements could skew lower with flexibility provision -analysis

A flexibility mechanism built into the global aviation offset programme CORSIA could dampen carbon credit obligations during the scheme’s pilot phase to address coronavirus-related impacts on the emission baseline, eliminating the need for any changes to the underlying ICAO resolution, according to a green group’s analysis.

ICYM: UN approves six offset programmes, vintage restrictions for CORSIA aviation scheme

The ICAO Council on Friday endorsed six programmes in full and two others on a conditional basis to supply the UN body’s CORSIA international aviation offset mechanism, with eligible carbon credits initially restricted to a five-year window.


Net zero-driven carbon credit demand set to reshape offset market

Demand for carbon offset credits is set to rise as governments and businesses seek to make good on pledges to achieve net zero emissions in the future, but the market itself will also change dramatically, according to experts.


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Here we COVID again – The Supreme Court of Canada has postponed until at least June hearing a constitutional challenge of the federal government’s carbon tax, the Canadian Press reports.  The top court was to hear the challenge, launched by Saskatchewan and Ontario and supported by several other provinces, next week. But as part of a country-wide effort to stem the spread of COVID-19, Chief Justice Richard Wagner said the court is putting off several hearings, including on the much anticipated carbon tax case. The top courts in Ontario and Saskatchewan rejected arguments by those provinces that the federal government doesn’t have the constitutional authority to impose a carbon tax in provinces that don’t impose a carbon price that meets federal standards. They are appealing those rulings to the Supreme Court. Alberta is also challenging the tax after its appeals court ruled in the province’s favour last month.

Carbon tax before COVID – In a series of high-speed procedural votes, the New Brunswick legislature passed Progressive Conservative Premier Blaine Higgs government’s budget Friday afternoon, clearing the way for politicians and civil servants to turn their full attention to the COVID-19 outbreak. Lawmakers crammed what would normally take weeks of debate, committee sessions, and votes into a 17-minute blitz that also passed the government’s carbon tax legislation. The vote on the New Brunswick government’s CO2 tax approach, which sets a C$30/tonne price but simultaneously drops fuel taxes, had to be approved before Apr. 1 or the Maritime province would have remained regulated by Ottawa’s ‘backstop’ CO2 levy, which does not set out the gas tax relief. (CBC)

Carbon plan after COVID – The US House of Representatives’ Select Committee on the Climate Crisis has postponed the release of its climate action plan for the end of March due to the coronavirus pandemic, Chair Kathy Castor (D) said Monday. The committee has worked on a plan over the past year to develop comprehensive climate policy that could serve as a roadmap should Democrats win back the Senate and White House in the Nov. 2020 election.

Plan on it – The US EPA will issue a plan Tuesday for the phaseout of potential HFCs, commonly used in fire extinguishers, refrigeration, and metal cleaners. The new final rule updates the agency’s most recent production and consumption schedule for the substances, which ran through 2019. A bipartisan group of US senators recently tried to include an HFC phase-down bill to an omnibus energy act, though some Republicans and the White House objected. (Bloomberg)

That’s a plan – The New South Wales state government in Australia became the first to detail how it plans to meet its 2050 net zero emission target. That includes a A$450-mln Emissions Intensity Reduction Programme, offset options for consumers, renewable energy zones, and massive private-sector investments among elements of the strategy, according to the Sydney Morning Herald.

Lansdowne? More like Profits-downe – UK hedge fund Lansdowne Partners lost money on several of its strategies between the start of the year and early March amid the coronavirus market slump, according to data compiled by HSBC. However, the firm’s energy funds eked out positive gains, with the $780 mln Energy Dynamics Fund up 2.2% for the month to Mar. 6 and 7.1% YTD, and the $239 mln Clean Energy Fund up 0.1% and 1.1% respectively. The firm is well known to many in the EU carbon market for having put a large bet on EUAs rising back in early 2017 and for being ultra bullish on the asset class since then. (Reuters)

Under pressure – Mizuho is about to become the first publicly traded company in Japan under shareholder pressure to put in place stronger climate policies, Reuters reports. The financial group is under pressure to align with the Paris Agreement, with questions asked about its coal-lending policies.

Read my lips: “No new fracking” – During the US Democratic presidential debate on Sunday night, confusion persisted after former US Vice President Joe Biden said he would allow “no new fracking” if elected in November. That would have marked a dramatic shift from his existing vow to end new oil-and-gas permitting on federal lands and waters, but Biden’s campaign later clarified he was restating his existing position, rather than adopting rival candidate and US Senator Bernie Sanders’ call for an outright nationwide ban on the practice. Biden also talked up his ability to bolster international climate diplomacy, which Sanders called “nowhere near enough” in light of the problem’s size. The next Democratic primary was slated for six states on Tuesday, though the corona pandemic has caused Georgia and Louisiana to suspend theirs, with Ohio looking at the same move. (Axios)

And finally… Eat the rich – The rich are primarily to blame for the global climate crisis, a study by the University of Leeds of 86 countries claims. The wealthiest tenth of people consume about 20 times more energy overall than the bottom tenth, wherever they live. The gulf is greatest in transport, where the top tenth gobble 187 times more fuel than the poorest tenth, the research says. The researchers found that the richer people became, the more energy they typically use. And it was replicated across all countries. And they warn that, unless there’s a significant policy change, household energy consumption could double from 2011 levels by 2050, even if energy efficiency improves. The study also found that in transport, the richest tenth of consumers use more than half the energy. This reflects previous research showing that 15% of UK travellers take 70% of all flights. The ultra-rich fly by far furthest, while 57% of the UK population does not fly abroad at all. (BBC)

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