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Emissions covered under the EU ETS likely fell last year by the largest amount since the financial crisis, according to a poll of analysts, as coal-to-gas fuel-switching and increased renewables generation outweighed a rise in CO2 from aviation and somewhat stagnant industrial output.
EUAs climbed to a one-week high on Wednesday, withstanding a mid-session slump after struggling to absorb a bumper auction to end up 4.4% as markets were buoyed by a US virus-busting stimulus package.
A European Commission proposal to adopt a border adjustment mechanism to prevent carbon leakage will need to wait until spring 2021, despite demands from member states and industry to deliver earlier, a senior EU official said on Wednesday.
The UK’s only EU Aviation Allowance (EUAA) auction of 2020 was cancelled on Wednesday, sale host ICE Futures Europe said, after bidding interest failed to exceed the amount of spot carbon units on offer.
The US federal government missed a deadline on Tuesday to challenge a court’s ruling that limits the EPA’s use of Renewable Fuel Standard (RFS) compliance waivers, though refiners involved in the lawsuit will forge ahead with their own appeal.
Mexico will aim to release offset protocols for use under its ETS in the final quarter of 2020, with several methodologies under consideration, a government official said Wednesday.
California regulator ARB minted more than 535,000 new offsets this week, with another half million credits seeing their invalidation period cut to three years, according to data published Wednesday.
New York’s wholesale grid operator (NYISO) is experiencing an overall reduction in electricity demand due to the COVD-19 pandemic, a trend that is likely to reduce obligations for power generators in the RGGI carbon market.
Virginia officials are unlikely to revise the annual ETS carbon budgets for the state’s power sector in the short term if Governor Ralph Northam (D) signs a bill implementing the existing cap-and-trade regulation into law, a state regulator said.
Australia’s Clean Energy Regulator opened the latest two-day auction under the Emissions Reduction Fund on Wednesday, but with little indication of a resurgence in interest from project developers.
New Zealand allowances edged up 30 cents in Wednesday trade after previously posting losses over six consecutive sessions, as some market participants said the rapid fall had been an overreaction.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Domestic CORSIA cut – The bipartisan Senate deal reached early Wednesday on the US coronavirus stimulus bill abandoned a last-ditch effort by House Speaker Nancy Pelosi (D) to force airlines getting a bailout to cut their carbon footprint. The House language stripped from the deal would have linked aid to airlines to a requirement that they halve their emissions over the next 30 years and start offsetting that CO2 in 2025. Also struck was language that would have provided $100 mln over five years for research and development of more sustainable aviation fuels, as well as a GOP plan to channel $3 bln to purchase roughly 77 million barrels of oil for the nation’s Strategic Petroleum Reserve – a plan Democrats called a “bailout” for the industry. The massive stimulus package, which would provide trillions of dollars for workers, the health care sector, and employers, now requires passage in the Senate and House. (Bloomberg Environment, Axios)
Full force – US federal officials must conduct a full-fledged environmental impact statement on the Dakota Access pipeline after they had previously done a less detailed environmental analysis and a court-ordered supplement, a judge ruled Wednesday. The US District Court for the District of Columbia decided that the Army Corps of Engineers’ latest analysis didn’t fully grapple with how the oil pipeline affects the Standing Rock Sioux Tribe and others near its route, with Judge James Boasberg writing that “too many questions remain unanswered” about the pipeline’s impacts. The ruling doesn’t immediately affect the pipeline’s operations, as the court requested additional briefs from the government, pipeline backers, and the tribes on whether to stop the flow of oil while the Army Corps starts another round of analysis under the National Environmental Policy Act. (Bloomberg Environment)
Back on track – The combination of Brexit and lower demand associated with the coronavirus pandemic should enable the EU as a whole, as well as many member states, to reach their 2020 renewables targets, according to ICIS. This is due to the consequences of a prolonged downturn in demand, which will not be normalised for by the EU’s official statistics office Eurostat, meaning that renewables look set to make up a higher share of consumption in 2020 across the EU. The likelihood of target achievement had already increased from February due to Brexit, since the UK was among the worst performers in the EU for renewable share and will now not be included in the final numbers. The bloc has an overall binding target of 20% renewables in final energy consumption to reach by 2020, laid out in the 2009 renewable energy directive, with each member state having its own individual binding goals.
Hard to meet – Poland will find it harder to meet EU emission goals because the impact of the coronavirus will mean companies will not have enough funds to invest and the completion of some important energy projects may be delayed or even suspended, Poland’s climate ministry said in an emailed response to questions, Reuters reported. Brussels had hoped lone holdout Poland would sign up to the EU’s 2050 net zero emission goal at a June summit, though read Carbon Pulse’s take on how the pace of EU legislative activity on climate policy is set to slow as the virus response takes the attention of the bloc’s institutions and as non-essential meetings are postponed.
#NotAllSmelters – New Zealand went into corona lockdown on Wednesday, shutting everything except for essential services. However, a handful of industrial facilities have been exempted, according to a Newsroom report, including Rio Tinto’s Tiwai Point aluminium smelter. Closing it for the first time since it opened in 1971 would take weeks and was deemed too costly. Methanol producer Methanex is another company that has been excluded from the order. The exemptions keep at least some ETS-covered facilities spewing out carbon emissions during the lockdown.
Bustin’ out – For the fourth year in a row, the number of coal-fired power plants under development worldwide dropped steeply in 2019, according to a report released Thursday by Global Energy Monitor, Greenpeace International, the Sierra Club, and the Centre for Research on Energy and Clean Air. Boom and Bust 2020: Tracking The Global Coal Plant Pipeline is the fifth annual survey of the coal plant pipeline. Its findings include a 16% year-on-year drop in capacity under construction and in pre-construction development, and a 66% drop since 2015. Construction starts were down 5% from 2018 and 66% from 2015, compared to 2019. Despite the decline in development, the coal fleet grew by 34.1 GW in 2019, the first increase in net capacity additions since 2015. Nearly two-thirds (43.8 GW) of the 68.3 GW of newly commissioned capacity was in China. Outside China, the global coal fleet overall shrank for the second year in a row, as these other countries together retired more coal power capacity (27.2 GW) than was commissioned (24.5 GW).
Mind the methane – Methane emissions from coal mines could be more than double previous estimates, according to a new study. While leaks from the production of oil and gas is understood to be one of the biggest sources of atmospheric methane, a new paper published in the Journal of Cleaner Production suggests that coal mining may actually be a bigger contributor to levels of the greenhouse gas. This is even more pronounced when accounting for the impact of old coal mines that continue to seep methane long after they have been abandoned. (Carbon Brief)
Wildlife creep – Over 2,200 wind, solar and hydro power plants have been built within the boundaries of the Earth’s remaining wilderness because they take up to 10 times more space than thermal generators, according to a study published in the journal Global Change Biology. It finds around 17% of renewable facilities globally are located in protected regions, with a further 900 now being developed in key areas of biodiversity and western European countries the worst offenders. (BBC)
Do me a solid – Scientists at Germany’s Karlsruhe Institute of Technology are building a “world’s first” container-sized test facility to turn CO2 from the ambient air into carbon black powder that can be used as a resource in many industries including electronics, printing, and construction. The institute’s private sector spin-off Ineratec is working with Swiss carbon capture pioneers Climeworks on the venture. (Clean Energy Wire)
Not Greta too! – Swedish activist Greta Thunberg said Tuesday it is “extremely likely” that she had a mild case of coronavirus and is encouraging other young people to stay home during the crisis. In an Instagram post, Thunberg revealed that both she and her father fell ill with COVID-19 symptoms following a trip to Central Europe earlier this month, with her father Svante experiencing “much more intense symptoms and a fever.” Thunberg and her father have quarantined themselves away from the rest of their family in Sweden, where tests are limited to only those who go to the hospital.
And finally… The new space race – The world may soon run out of space to store its extra oil as Saudi Arabia prepares to increase its fossil fuel production, even as global demand for energy continues to fall due to the Covid-19 pandemic, according to analysts at energy consultancy Rystad Energy. The analysts estimate that the world has about 7.2 bln barrels of crude and products in storage, but noted the new oil price war is expected to raise the world’s production by more than 2.5 mln barrels per day, outpacing demand for crude by 6 mln barrels daily. In theory, it would take nine months to fill the world’s remaining oil stores, but constraints at many facilities will shorten this window to only a few months. Canada may be days away from running out of storage for its domestic oil production, and the analysts predict the country’s western region will need to rein in daily production by 400,000 barrels by the end of the month. (The Guardian)
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