CP Daily: Tuesday March 17, 2020

Published 02:43 on March 18, 2020  /  Last updated at 02:46 on March 18, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

California carbon breaches floor price for the first time since 2017

California Carbon Allowances (CCAs) traded underneath the current WCI floor price for the first time in nearly three years on Tuesday, as participants continued to see the growing coronavirus pandemic and resulting economic turmoil as bearish drivers on the joint cap-and-trade programme.

EMEA

EU Market: EUAs slide 8.5% as auction failure tests lower limits

EUAs fell over 8.5% to a fresh 16-month low below €18 on Tuesday as the first auction failure of the year spurred selling, even as wider financial markets held relatively steady following Monday’s coronavirus-fuelled crash.

EU ETS should be “scrapped” from 2021 to counter virus impact -Polish official

The EU ETS should be “scrapped” from next year to help keep EU economies afloat amid the coronavirus outbreak, the Polish deputy minister for state assets said on Tuesday, as other eastern EU countries called for work on the EU’s Green Deal to also be halted.

Mega bullish analysts cut EUA price forecasts on coronavirus concerns

One of the most bullish analyst teams covering the EU carbon market have once again cut their price forecasts for EUAs, this time due to the coronavirus outbreak.

EU utility CEZ confirms lagged hedging rate, expects output lift in 2020

Utility CEZ said Tuesday it had advanced its Czechia-based generation hedging position over Q4 last year, but that the rate still lags on the previous year even as the company expects its EU ETS-covered thermal output to rise in 2020.

EEX cancels EUA auction on lack of bids as prices sink below €19

Exchange EEX on Tuesday cancelled its Common Auction Platform sale of 2.7 million spot EUAs due to a lack of bids, as secondary prices continued to tumble on the coronavirus-fuelled sell-off.

ASIA PACIFIC

NZ Market: NZUs extend 3-mth lows, drop below FPO level

New Zealand carbon allowances on Tuesday fell below the NZ$25 fixed price option for the first time since Dec. 19, as traders in need of cash added to supply.

New Zealand energy exchange launches carbon trading product

A subsidiary of New Zealand’s state-owned grid company has added domestic carbon allowances to its listed products, it announced Tuesday.

AMERICAS

LCFS Market: California credits fall below $200 amid economic stressors

California Low Carbon Fuel Standard (LCFS) prices dropped markedly on Monday, finally succumbing to the impacts of the coronavirus pandemic and changes in the global economy.

ICYM

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.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

CORSIA Insights: How Airlines and Carbon Markets are Preparing and the Role of Sustainable Aviation Fuel – Apr. 9, 2020 at 1000-1100 am PT
Join Bluesource, United Airlines, CBL Markets and Ocean Park Advisors to learn about the CORSIA basics, who will participate, how United is positioning itself for CORSIA, how CORSIA will effect offset markets, the role that sustainable aviation fuel (SAF) will play in lowering emissions and a new centralized exchange for CORSIA-eligible emission units, the IATA Aviation Carbon Exchange (ACE). Register here – http://www.bluesource.com/webinar/

Sustainable stimulus – Political and financial leaders have “a historic opportunity” to usher in a new era for global climate action with economic stimulus packages to confront the coronavirus pandemic, the head of the International Energy Agency (IEA) said. In an interview with Climate Home News, Fatih Birol said he urged those leaders to design “sustainable stimulus packages” that focus on investing in clean energy technologies and accelerate the transition away from fossil fuels. Birol also advocated for countries to capitalise on low interest rates to boost innovation on hydrogen and carbon capture and storage technology, and use the opportunity of steep reductions in oil prices to cut fossil fuel consumption subsidies.

Air fair – A number of US Senate Democrats say any airline bailout package must include measures that limit carbon emissions from the industry. The airline industry asked the federal government Monday for over $50 bln in assistance, including both $30 bln in grants and another $25 bln in loans and tax relief, as airline traffic has nosedived amid the coronavirus outbreak. However, Senator Sheldon Whitehouse (D) tweeted on Tuesday that “carbon offsets should be a condition for any such bailouts”, while Green New Deal co-sponsor Ed Markey (D) added that any infusion of money to the industry should have “major strings attached”, including long-term targets and strategies for decarbonisation. (The Hill)

Twenty-three for PG&E – California utility Pacific Gas & Electric (PG&E) won court approval on Monday to raise $23 bln mln to help pay its bills for its role in destructive wildfires, after Governor Gavin Newsom (D) dropped his opposition to a financing package designed to help the nation’s largest utility get out of bankruptcy. Newsom previously said that he feared PG&E was taking on too much debt to afford an estimated $40 mln in equipment upgrades needed to reduce the chances of its electricity grid igniting destructive wildfires in the future. But the recent volatility in financial markets caused by the coronavirus pandemic apparently softened Newsom’s stance after PG&E lined up commitments from investors promising to buy up to $12 bln in company stock. The company said it is making “good progress” with the governor on other issues as it hopes to emerge from bankruptcy proceedings by June 30. (AP)

A bit of both – The Victoria state government in Australia on Tuesday announced it will lift the moratorium on conventional onshore gas drilling from July 2021, in a bid to boost job creation and increase energy supply. At the same time it will put into the state constitution a permanent ban on fracking and coal seam gas exploration, reports RenewEconomy.

Cancelled in Kosovo – London-listed power generator ContourGlobal has halted plans to build a 500MW coal-fired power plant in Kosovo, and said it will make no further coal plant investments. The project would have provided around half of the electricity demand of the Balkan country which is struggling with power shortages. “We will not develop or acquire coal power plants in the future,” the company said in its full-year results statement on Tuesday. Kosovo last month approved a new coalition government almost four months after a snap elections following the prime minister’s resignation. (Reuters)

Hydrogen coming soon – Major firms RWE, BP, Evonik, and grid operators are to build Germany’s first publicly accessible hydrogen distribution network to connect ‘green gas’ with industrial customers in the northwest of the country from 2022. (Clean Energy Wire)

Beware the viruses of March – California regulator ARB will not hold its Mar. 26 board meeting in Sacramento, abiding by recommendations from the state’s Department of Public Health to limit large gatherings to prevent the spread of the coronavirus, the agency announced Tuesday. The next meeting is slated for Apr. 23.

And finally… E-commerce, eco-friendlier? – Large online retailers in the US produce 17% fewer GHG emissions than brick-and-mortar stores, according to a report from Generation Investment Management LLP. That especially applies to global businesses such as Amazon or Walmart, as the report suggests that smaller online companies can be even more emissions-intensive than the traditional shops, particularly if their warehousing isn’t energy efficient. Walmart has said it will source 50% of its energy needs from renewable sources by 2025, and Amazon has also set a net-zero emissions target for 2040. (Bloomberg)

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