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A proposal to include shipping in the EU ETS has gathered an “encouraging” consensus among EU lawmakers, according to the European Parliament’s lead lawmaker on the issue.
EU carbon prices will resume their downtrend to average €11 this quarter amid an ongoing reduction in power demand and a big fall in the bloc’s 2020 GDP due to the coronavirus, analysts said Tuesday, warning that EUAs could eventually crash to as little as €5 if the crisis persists.
EUAs extended their recent gains into a fourth session on Tuesday, adding as much as 6.6% to hit a new three-week high before retreating to erase the day’s rise as more observers questioned the sustainability of the rally.
The EU must increasingly focus on reducing the steel sector’s use of coal, analysts said on Tuesday, in finding that steelmaking facilities that use the heavy-polluting fuel were the top emitters in seven nations last year.
Northeast power consumption declines due to the COVID-19 are increasing, while California fuel use appears set to dip based on initial state and national data points.
The US Transportation and Climate Initiative (TCI) should include a supply-curbing mechanism in its final cap-and-trade design to ensure reliable revenues to invest in fuel sector CO2 abatement, according to a think-tank report released Tuesday.
The Northeast US RGGI carbon market will offer 16.3 million allowances for sale at its June auction, the 10-state programme announced on Tuesday.
California Low Carbon Fuel Standard (LCFS) prices declined ahead of utility Pacific Gas & Electric’s (PG&E) Tuesday auction, though some participants thought the market was already primed for a retracement amid the prolonged coronavirus outbreak.
South Korea has extended by a month the deadlines for emissions reporting and compliance under its carbon market amid disruptions caused by the COVID-19 outbreak, and has backloaded some of its monthly KAU auction volume accordingly.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Land of Morning Calm – As part of its series on how key emitters are responding to climate change, Carbon Brief looks at South Korea’s attempts to balance its high-emitting industries with its “green” aspirations. The country’s rapid economic expansion over the past few decades has left it with a significant carbon footprint. It was the world’s 13th largest GHG emitter in 2015 and this month voters there head to the polls in a pivotal election for climate policy.
Berlin baulks – Germany will be at least six months late for the end-2019 deadline in submitting its final National Energy and Climate Plan (NECP) to Brussels, Bloomberg reports. An economy ministry spokesperson said that until its coal exit legislation is through parliament, the government can’t finalise emissions projections. Lawmakers are pressing for more regional compensation before they sign off of the coal exit law, risking a delay until autumn. Germany is one of five member states yet to submit an NECP, with Spain finalising its plan just last week.
Clean edge – Almost three-quarters of new electricity generation capacity built in 2019 uses renewable energy, representing an all-time record, according to data from the International Renewable Energy Agency (Irena). It found that new renewable capacity slowed slightly in 2019 – from 179 GW to 176 GW – though new thermal capacity also slowed. Fossil fuel power plants are in decline in Europe and the US, but new coal and gas plants grew in Asia, the Middle East, and Africa. (The Guardian)
Low price findings – The EU ETS saved more than 1 billion tons of CO2 between 2008 and 2016, despite prolonged low prices often below €10/tonne, according to researchers at the Universities of Pittsburgh and Glasgow. This translates to reductions of 3.8% of total EU-wide emissions compared to a world without the EU ETS, or almost half of what EU governments promised to reduce under their Kyoto Protocol commitments. The researchers argue that despite low prices, carbon markets can help reduce emissions. (Proceedings of the National Academy of Sciences)
Essential activity – Canadian company TC Energy (formerly TransCanada) began work on the long-stalled Keystone XL oil sands pipeline in Montana on Monday, despite calls from tribal leaders and environmentalists to delay the $8 bln cross-border project amid the coronavirus pandemic. The 1,200-mile (1,930-kilometre) pipeline, first proposed in 2008, obtained its final state permits necessary for construction on Friday, with the surprise construction announcement coming after the Alberta government last week invested C$1.6 bln ($1.1 bln) to start work. Leaders of American Indian tribes and some residents of rural communities along the pipeline route worry that workers could spread the coronavirus, while a hearing on the request to block work on the controversial project is scheduled for Apr. 16 before US District Judge Brian Morris in Great Falls. (AP)
Prevention priority – US Senate Environment and Public Works (EPW) Chairman John Barrasso (R) said on Monday he won’t allow his panel to vote on a bill to phase down the potent planet-warming refrigerants hydrofluorocarbons without language that would prevent states from setting their own standards that are stricter than federal ones. The same dispute is what sunk a broad energy bill last month that had bipartisan support, with lawmakers having proposed the legislation to phase out HFCs earlier in the year. The EPW opted to accept prepared testimony on the American Innovation and Manufacturing Act from any interested party through Wednesday instead of holding an in-person legislative hearing as it had originally planned. (Politico)
‘Cause of COVID – Industry groups have sent at least six letters to California officials in the past two weeks requesting delays or modifications to new pollution limits on the oil and gas, transportation, building, and agriculture sectors in response to the coronavirus pandemic, according to documents shared with HuffPost. The Truck and Engine Manufacturers Association asked California for an indefinite delay of a new tailpipe pollution regulation, as well as requesting that officials delay or “significantly” modify plans to implement two new regulations increasing tailpipe emissions standards for heavy-duty trucks in California and requiring manufacturers to offer for sale zero-emission vehicles in the state. The Western Growers Association, an industry group representing commercial farmers, separately asked California Governor Gavin Newsom (D) to issue an executive order temporarily halting development of new environmental regulations on agriculture, also citing COVID-19.
And finally… Methane pain – Methane levels in the atmosphere experienced a dramatic rise in 2019, preliminary data released Sunday shows. The US National Oceanic and Atmospheric Administration (NOAA) found that methane levels increased by 11.54 parts per billion (ppb) in 2019 over 2018 levels, the largest increase since 2014. Scientists said that while it was too early to isolate the chief causes, the rise most likely stemmed from the agriculture and natural gas sectors. (Climate Nexus)
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