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The annual EU ETS deadline for surrendering carbon units against 2019 emissions will not be delayed in light of the still unfolding coronavirus outbreak, the European Commission announced late Thursday.
The EU carbon market’s shock-absorbing MSR can only partly avert an allowance price collapse should the coronavirus spur a recession on the scale of the 2009 financial crisis, analysts said on Thursday.
EU leaders should tie their virus-busting stimulus packages to climate action by using carbon market revenues and green taxation, two former EU top climate officials said on Thursday.
EUAs bounced back from an earlier fall on Thursday as markets jumped on record US jobless numbers that were below some expectations and the sealing of a massive stimulus package.
German power generator EnBW advanced its hedging over Q4 2019 to maintain its slightly advanced position amid declining generation and sales, it said in financial results on Thursday, providing a bearish signal for EUAs.
The UK’s greenhouse gas emissions fell 3.6% in 2019, according to provisional government data released Thursday, with another large drop by the power sector helping extend the country’s streak of annual declines.
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.
California offsets will likely weather a short-term collapse in WCI allowance prices triggered by the COVID-19 outbreak, although the pandemic could pose new obstacles for the industry going forward, several developers told Carbon Pulse.
California Carbon Allowance (CCA) prices cratered beneath the 2014 WCI floor price during the week before renewed speculative interest boosted values on the secondary market, while RGGI allowances (RGA) saw more modest week-on-week changes.
Price reporting agency Argus Media has postponed its US and Canadian carbon and biofuel market conferences this spring due to the coronavirus pandemic, Carbon Pulse has learned.
Emissions from facilities covered by Australia’s Safeguard Mechanism rose again in 2018-19, Clean Energy Regulator data showed Thursday, but the need to use offsets to meet targets fell by a quarter as baselines under the scheme grew increasingly generous.
UN aviation body ICAO will look to endorse a second round of programme applications for its global offset system CORSIA by the end of the year, with that decision potentially occurring after countries attempt to forge the rulebook of international emissions trading under the Paris Agreement at COP26, according to an updated timeline.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Cause it’s free… Free fallin’ – Global oil demand is in freefall because of the coronavirus pandemic, a situation that is exacerbated by the price war between Saudi Arabia and Russia, the head of the International Energy Agency said. Fatih Birol’s comments add to the dire outlook for the oil market with traders, banks, and analysts forecasting a huge oversupply as governments shut their economies to combat the contagion. The effects of the glut will be felt for years to come, Birol said. “Today 3 billion people in the world are locked down. As a result of that, we may see demand fall” by as much as 20 mln barrels a day, Birol said at an online event hosted by Atlantic Council on Thursday. Demand is set to drop in Q1, and the decline will likely worsen in the next three months, he added. Consumption of crude has dropped by between 15-20 mln barrels a day, and will be lower by at least 5 mln a day this year, trading firm Vitol said this week. (Bloomberg)
Stop cheering – Emissions reductions due to the coronavirus crisis cannot be considered good news, according to climate researcher Hans Joachim Schellnhuber, founder of the Potsdam Institute for Climate Impact Research (PIK). “Nobody can be happy about any positive climate effect now, since the price we’re paying for this is unbelievably high. That’s due to a collapsing economy, the individual and social costs and especially to the human suffering caused by this pandemic,” he told Frankfurter Rundschau, adding there was “no other way that is more expensive to save CO2.” He called on policymakers not to let environmental action policies such as the EU’s Green Deal fall behind, as measures to contain the virus and its economic impact take precedence on political agendas. Schellnhuber also said the outbreak offered valuable lessons for governments on how to deal with the climate crisis. “The main lesson is that experts should be listened to,” he said, adding that climate change could follow a course similar to the coronavirus outbreak in that the development spirals out of political control regardless of national borders. (Clean Energy Wire)
Rising less – World number five emitter Russia unveiled draft plans for tougher 2030 emission targets this week, with a basic scenario projecting emissions to rise to 2.08 bln tCO2e by 2030, or 67% of 1990 levels and up from 1.58 bln in 201. It says this can be done by curbing fossil fuel demand and boosting renewables, upgrading building insulation and encouraging energy efficiency from petrochemicals to agriculture. That goal is still more ambitious than Moscow’s existing Paris pledge to limit 2030 emissions to 75% of 1990 levels, with Russia’s emissions having collapsed in the post-Soviet era. Campaigners viewed the plans as inadequate and only taking baby steps on climate action. (Climate Home)
Victory lap – The Alberta government has appealed a ruling from a provincial court in February that found the Canadian federal government does not have the constitutional authority to implement its ‘backstop’ carbon pricing system in the province, despite the fact the jurisdiction was victorious in the case. Observers pointed out that because the Supreme Court of Canada has delayed hearing Saskatchewan and Ontario’s appeal of their own unsuccessful challenges of the backstop CO2 plan till June due to the coronavirus pandemic, Alberta’s appeal will allow it to gain a more prominent role in the upcoming oral arguments and put it on equal footing with the other two conservative-led provinces. Dates for the Supreme Court arguments, which were originally slated to take place Mar. 24-25, have not been announced. (The Globe and Mail, $).
Mapped – Carbon Brief has published a major update to its map of the world’s coal-fired power stations, based on the latest Global Coal Plant Tracker from Global Energy Monitor. Developments this year include another increase in capacity, even as the pipeline of new plants shrank for the fourth year in a row and following a record 3% decline in global coal-fired electricity generation in 2019.
And finally… No sickies allowed – Some fossil fuel projects along the US east coast are continuing to tell workers to show up during the coronavirus crisis as the rest of the country shuts down. In coal-heavy states including West Virginia, Virginia, and Ohio, coal has been designated an “essential” service during the pandemic, allowing many mines to remain open. Last week, Pennsylvania Governor Tom Wolf reversed course after initially labelling mining activities as “non-life-sustaining” businesses. Experts say miners with already-weak lungs from years of exposure to coal particles may be particularly susceptible to coronavirus. In Brooklyn, construction work continues on National Grid’s controversial North Brooklyn Pipeline as New York City becomes the centre of the US outbreak. (Climate Nexus)
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