CP Daily: Friday March 20, 2020

Published 21:43 on March 20, 2020  /  Last updated at 21:46 on March 20, 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 allowances collapse to 2016 floor price levels on more panic selling

California Carbon Allowances (CCA) retreated beneath $13.00 on Friday as rising concerns about plummeting WCI-capped emissions and higher margin rates forced additional selling.

EMEA

Germany indicates leniency in EU ETS compliance deadlines due to COVID-19 crisis

Germany will take into account instances where EU ETS compliance deadlines have not been met as a result of the coronavirus outbreak and could grant clemency in some cases, the government announced on Friday.

EU Market: EUAs slip again as virus panic pushes carbon to huge 27% weekly loss

EUA failed to extend their rebound into a second day on Friday, slipping back late to cement a a massive weekly loss caused by the coronavirus, as markets faltered despite huge government stimulus measures.

EU should expand ETS to neighbours to avert treaty clash, says energy watchdog

The EU should extend the ETS to its eastern neighbours rather than imposing a carbon border adjustment that risks breaching a longstanding treaty linking energy markets, the head of the region’s energy watchdog told Carbon Pulse on Friday.

EU states, UK hand out a further 8.5 mln free EUAs for 2020

EU member states and the UK handed out a further 8.5 million free carbon allowances to industrial emitters over the past two weeks, according to updated data released late Friday by the European Commission.

AMERICAS

Financial entities make first significant CCA holdings cut as pandemic fears grow -data

Speculators trimmed their California Carbon Allowance (CCA) holdings by nearly 10 million allowances earlier this week amid growing concerns about a coronavirus pandemic reducing compliance demand under the WCI-linked carbon market, according to US Commodity Futures Trading Commission (CFTC) data.

California governor’s shelter-in-place order sinks carbon prices further

California Governor Gavin Newsom (D) issued a statewide ordered for all residents to “shelter in place” on Thursday amid the growing coronavirus pandemic, with the decision likely to reduce emissions in the state’s cap-and-trade programme.

California and Quebec to offer 66.2 million allowances at May sale

The second quarterly WCI carbon auction of the year on May 20 will feature 66.2 current and future vintage permits available for purchase, as the coronavirus pandemic and economic fallout raise concerns that the sale will be undersubscribed for the first time in three years.

ASIA PACIFIC

China’s looser coal policy paves way for 34 GW of new capacity -analysts

China’s recent decision to loosen restrictions on building new coal-fired power plants could spark the construction of additional capacity larger than Poland’s entire fleet, analysts said Friday.

NZ Market: NZUs hammered in fourth consecutive session

New Zealand carbon allowances continued to fall in Friday trade, shedding almost a dollar to hit their lowest levels in eight months as traders unloaded positions.

CN Markets: Pilot market data for week ending Mar. 20, 2020

Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

COVID CORSIA changes? – Changes to the emissions baseline for the CORSIA global aviation offset programme are highly likely once there is a chance to review the coronavirus’ impact on travel, an official with the US Federal Aviation Administration (FAA) told Bloomberg. The official, who spoke on condition of anonymity, said China and other countries and airline groups have been raising the issue of ICAO’s offset scheme, which sets out a 2019-20 average emissions reference level for CORSIA’s carbon neutral growth mandate. However, green groups have said that a flexibility provision built into CORSIA can alleviate air carriers’ credit requirements in the programme’s 2021-23 pilot phase without having to renegotiate the 2016 resolution setting up the scheme. (Read Carbon Pulse’s recent article on that topic here)

COVID Canada cash – The Canadian federal government is preparing a multibillion dollar financial aid package for the oil and gas industry and could announce it as soon as next week, the Globe and Mail reports. One source said Ottawa has prepared C$15 bln ($10.4 bln) in financial aid for the industry, with other measures discussed including access to more credit and job creation for affected workers. In addition, some 65 industry executives penned a letter to Prime Minister Justin Trudeau asking for a suspension of the revenue-neutral federal carbon tax and all income taxes. (Oilprice.com)

COVID continuation – The US EPA is showing no signs of slowing down its work to finalise a host of rollbacks and regulations amid the coronavirus pandemic, sparking concern among public health and environmental groups. The agency on Wednesday formally proposed its controversial scientific transparency rule and is working to swiftly finish its new rollback of Obama-era vehicle emissions standards, dubbed the Safer Affordable Fuel Efficient Vehicles rule. Sources close to EPA told Politico the Trump administration is scrambling to finalise its rules by May 20 to avoid the risk that Democrats could use the Congressional Review Act to overturn the rollbacks if they win control of the White House and Congress in November.

Target shorting – More than 80% of highest-emitting listed companies are failing to deliver GHG reductions aligned to the Paris Agreement’s 2C limit, with many of them also failing to account for climate mitigation and risk strategies, according to the Transition Pathway Initiative’s annual report. It assessed 238 energy, industrial and transport companies on projected emissions intensity and found that just 18% are on course to deliver emission reductions that are aligned to climate science, up 2% from last year. (edie)

And finally… Homing from work – The US electric industry may ask essential staff to live on site at power plants and control centres to keep operations running if the coronavirus outbreak worsens, and has been stockpiling beds, blankets, and food for them, according to industry trade groups and electric cooperatives. The contingency plans, if enacted, would mark an unprecedented step by power providers to keep their highly-skilled workers healthy as both private industry and governments scramble to minimise the impact of the global pandemic that has infected more than 227,000 people worldwide. Scott Aaronson, vice president of security and preparedness at the Edison Electric Institute (EEI), the nation’s biggest power industry association, said some “companies are already either sequestering a healthy group of their essential employees or are considering doing that and are identifying appropriate protocols to do that.” Maria Korsnick, president of the Nuclear Energy Institute, added that some of the nation’s nearly 60 nuclear plants are also “considering measures to isolate a core group to run the plant, stockpiling ready-to-eat meals and disposable tableware, laundry supplies, and personal care items.” Electric power plants, oil and gas infrastructure, and nuclear reactors are considered “critical infrastructure” by the federal government. (Reuters)

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