CP Daily: Thursday March 19, 2020

Published 00:31 on March 20, 2020  /  Last updated at 00:32 on March 20, 2020  / Ben Garside /  Newsletters

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

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Indonesia firm on ETS plans despite rising virus concerns

Indonesia is sticking to plans to launch a pilot emissions trading market later this year, a government official said Thursday, despite concerns over the impact of the COVID-19 virus.


Poland to push for emergency EU ETS changes if virus impact persists

Poland may propose emergency EU reforms including ETS changes, the country’s climate ministry told Polish state media on Thursday, aiming to reduce the burden on its economy as it comes under intense strain due to the coronavirus.

EU Market: Virus-thrashed EUA prices rebound after five-day sell-off, but some see more downside ahead

EU carbon prices rebounded somewhat on Thursday following five days of huge losses, but the gains appeared short-lived as EUAs sank back and some experts predicted more coronavirus-fuelled downside to come.

Airline Lufthansa cuts flights 95% amid virus crisis, reversing EUA cost impact

Airline Lufthansa Group faces a drastic cut in its emissions this year as coronavirus measures have seen its passenger flights cut 95%, reversing an upward trend that caused its EU ETS costs soar in 2019, the company’s results on Thursday showed.


NA Markets: CCAs crumble as speculators unwind positions, RGGI careens to 21-mth low

California Carbon Allowance (CCA) prices fell dramatically this week as financial entities unloaded positions due to growing fears of a global recession and the bearish WCI emissions impact from the coronavirus pandemic, while RGGI allowances (RGA) sank to their lowest level since mid-2018.

RFS Market: RIN prices bounce after coronavirus impacts take toll

US biofuel credit (RIN) prices rose on Thursday after the economic impacts of the COVID-19 virus pushed prices under the Renewable Fuel Standard (RFS) to a nearly two-month low earlier this week.


Australian govt advisors back crediting for Safeguard Mechanism emitters

Australia should issue carbon credits to Safeguard Mechanism participants that emit below their baselines, but only if those caps are gradually declining, the Climate Change Authority (CCA) said Thursday.

Vietnam ministry to draw up carbon trading proposal

Vietnam’s environment ministry has been tasked with drawing up the design for a domestic carbon market by the end of the year, though it remains unclear what shape the programme will take or how far-reaching it will be.


Verra seeks clarifications, changes on aviation offset restrictions under CORSIA

Offset standard developer and manager Verra is planning a series of alterations to its Verified Carbon Standard (VCS) project types that the ICAO Council declined to approve for use under the international aviation offset system CORSIA.


Major climate conference nixed over coronavirus

A major annual climate change conference scheduled for late May has been cancelled over the coronavirus crisis.



Chinese rethink – Beijing’s move toward relaxing emissions standards will ratchet up concern that policymakers around the world may scale back their climate goals as they seek to rescue their economies from the ravages of the coronavirus, Bloomberg reports. The Chinese government is said to be debating whether to ease restrictions on the amount of harmful particles that vehicles emit from their tailpipes — a measure known as particle number, or PN. The move would help automakers battling an unprecedented slump as the pandemic slows economic activity. It could be just one of the steps by the government in Beijing to shore up key sectors. That stimulus is likely to come at a cost to efforts to protect the environment, since officials could give priority to the health of industries that have an outsized impact on GHG pollution, especially construction, transport, and infrastructure. That combined with signs that green issues are slipping down the EU’s agenda would reduce momentum on the issue from two main on main forces driving work on climate change. Although China’s measure to minimise virus spreading did cut carbon emissions and air pollution dramatically in February, that silver lining turned out to be temporary. In early March, satellite data show that nitrogen dioxide levels rose across China’s industrial heartland, an indication the country’s economy is recovering.

Winning – Some specialist energy hedge fund managers in London are chalking up big gains amid the coronavirus pandemic, the FT reports, including Per Lekander of Lansdowne Partners. Lekander, who manages around $1bln and focuses on renewable energy, is up 6% this year following big gains in March, some of which were from bets against the EU carbon prices, the paper said without providing sources. Lekander is renowned amongst EU ETS investors for going massively long EUAs back in mid-2017, ahead of a 400% rally that lasted until the end of 2018. Last year, he said that while he had turned short-term bearish on carbon due to worsening fundamentals, he remained “monstrously bullish” for 2021 and 2022. The FT said Lekander has also been backing wind turbine manufacturers and other greener forms of energy generation while betting against fossil fuel companies. Both groups have been caught up in the market turmoil, but oil companies have fallen far harder, leaving him up overall.

It ain’t over – The EU’s Green Deal is “not over” despite the coronavirus pandemic, EU industry commissioner Thierry Breton told an online event today. Although coronavirus will inevitably change these discussions, this should not come at the expense of decarbonisation, Breton said. Only nine days ago, the EU unveiled its new industrial strategy, though since then industries have planned to scale back production in Europe amid supply chain disruptions and sinking demand. Consultancy Energy Aspects told Reuters that Europe’s industrial emissions are expected to fall by more than 20 Mt CO2 this year amid the pandemic. (Reuters)

Hold off – The economic crisis caused in Germany by the coronavirus has led to first calls to postpone the country’s planned CO2 price for heating and transport, which is scheduled to enter into force next year. Gerald Ullrich, a parliamentarian from the opposition pro-business FDP party, told the newswire dpa it would be “irresponsible” to start charging €25 per tonne from 2021 and €55/t by 2025 given the economic slump. “Every economist knows that tax increases are fundamentally wrong in an economic crisis,” Ullrich said. He called on the government to postpone the introduction to save jobs, adding that CO2 emissions would go down anyway because of the crisis. (Clean Energy Wire)

Virus 1, LNG 0 – The coronavirus crisis is likely to mean a delay in energy companies Woodside and Santos’ plans to grow their LNG projects in Western Australia, according to Boiling Cold. The site is referring to a WoodMac report saying the Scarborough and Barossa LNG projects are unlikely to proceed this year amid massive drops in oil and gas prices and major losses in share value for the two companies. The state has seen its gas industry boom in recent years, single-handedly cancelling out all emission reductions that have happened elsewhere in the country.

Floor filing – Wholesale grid operator PJM Interconnection on Wednesday issued a compliance filing with the US Federal Energy Regulatory Commission (FERC) in response to the regulatory body’s controversial Minimum Offer Price Rule (MOPR) order. FERC’s December order attempted to effectively raise the floor prices for state subsidised resources bidding into the wholesale market, eliciting concerns that the new rules could effectively nullify US state policies attempting to increase deployment of new zero-emissions forms of generation. But Wednesday’s filing quelled some of the concerns initially raised by the renewables industry, allowing projects to advocate for lower MOPR floor prices on a case-by-case basis and lowering the overall adjusted floor prices for clean energy technologies to clear future bid auctions. (Utility Dive)

The New Chief – US-based green group The Nature Conservancy (TNC) named Jennifer Morris as its permanent CEO on Tuesday, ending an eight-month search after allegations of a culture of gender discrimination and sexual harassment at the organisation led to the ouster of its top executives. Morris, who is currently the president of Conservation International, will replace interim CEO Sally Jewell. Morris’ appointment is effective May 18. (Politico)

And finally… Big Suit Country – Sixteen Montana youths, acting through their guardians and with the help of two environmental law groups, have filed a sprawling lawsuit to force the US state to rewrite its energy policy to combat climate change. The 104-page complaint, filed in state District Court last week, says the Montana state energy plan, along with a 2011 law that forbids the state to consider climate change when evaluating the impacts of major projects, violates Montanans’ constitutional right to a clean and healthful environment. While similar lawsuits have been filed in several other countries and states to attempt to force policymakers to address climate change and GHGs, proponents of the legal challenge say Big Sky Country’s constitution is unique, with its right to a clean and healthful environment, obligating the state to maintain and protect that environment. (KPAX)

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