CP Daily: Thursday April 16, 2020

Published 01:15 on April 17, 2020  /  Last updated at 01:32 on April 17, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

ANALYSIS: Virus fallout means 2020 a write-off for airlines’ CORSIA offset purchases

The bottom fell out of the CORSIA international aviation offset market almost as soon as it began with the coronavirus fallout grounding airlines worldwide, yielding slim prospects for even limited test buying this year.

EMEA

EU Market: EUAs surge 10% after EDF announces French nuke closures

European carbon prices climbed back above €21 on Thursday, surging nearly 10% on what was seen as speculative buying and short-covering as French utility EDF announced a large cut to its nuclear generation output this year.

EU likely to press on with 2030 GHG target study as virus impacts other work

The European Commission is likely to release as scheduled for September a feasibility study on increasing the EU’s 2030 emission reduction target, even as officials consider delaying other climate initiatives as the bloc grapples with the coronavirus pandemic.

‘Coal paradox’ is reshaping Polish attitudes to energy transition -think-tank

Poland’s decline in domestic coal production is likely to have important consequences for the country’s energy transition and its attitude towards low-carbon fuels, according to a Warsaw-based think-tank.

AMERICAS

NA Markets: California carbon briefly tests $16 mark, while RGGI hits 1-month high

California Carbon Allowance (CCA) prices rose by nearly a dollar during the week as regulated parties were said to have ramped up their purchases, while RGGI allowances (RGAs) hit a one-month high on thinly traded volume.

Pennsylvania adhering to draft RGGI regulation schedule amid COVID-19 difficulties

Pennsylvania agencies are maintaining their timeline to finish a draft RGGI-aligned cap-and-trade regulation despite a statewide ‘shelter-in-place’ order to slow the spread of the coronavirus, as green groups outlined numerous ways for the Keystone State to strengthen its existing proposal.

Virginia utility Dominion registers for RGGI programme ahead of June auction

Major Virginia-based utility Dominion Energy has opened a RGGI Compliance Allowance Tracking System (COATS) account, enabling the company to purchase allowances at future auctions or take delivery from the secondary market in the Northeast US ETS.

Refining state governors ask US EPA to waive RFS obligations

Five refining-heavy states petitioned the US EPA to exempt them from requirements under the Renewable Fuel Standard (RFS), arguing that the coronavirus pandemic has made current blending mandates untenable.

INTERNATIONAL

Global carbon fund posts 8% return in first five weeks

A global environmental markets investment fund has notched an impressive 8% return in its first five weeks of operation, its managers said Thursday.

ASIA PACIFIC

New rules to force major Western Australian emitters to document climate, offset strategies

The Western Australia EPA on Thursday released guidelines allowing it to require major new projects to document how they intend to contribute to the state’s 2050 net zero emissions target, including plans to acquire carbon credits.

PODCAST

CARBON PULSE CONVERSATIONS 002: ClearBlue Markets

In the second episode of our new coronavirus-era podcast, Carbon Pulse speaks with Toronto-based analysts and consultants ClearBlue Markets about the pandemic’s effects on the WCI cap-and-trade programme and Canadian carbon pricing systems.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Scoping out – Oil major Shell has joined rivals BP and Repsol in setting a climate goal that includes Scope 3 emissions from fuel it sells to customers, Bloomberg reports. Shell aims to have net-zero emissions from its own operations (Scopes 1 and 2) by 2050, while reducing Scope 3 emissions by around 30% by 2035 and 65% by 2050 through selling products with lower carbon intensity, such as renewable power, biofuels, and hydrogen. The company will provide further details in a strategy update in Q3. Read Carbon Pulse’s interview with Shell executive Duncan van Bergen on the firm’s $300 mln commitment to nature-based solutions.

Keeping promises? – South Korea’s ruling party won a landslide victory in Wednesday’s parliamentary election, securing 180 of the 300 seats available and paving the way for the country to become the first in Asia to pursue a ‘Green New Deal’, Climate Home reports. As Carbon Pulse wrote last month, the Democratic Party promised that if it won the election it would set a net zero target for 2050 and introduce a carbon tax – although it did not specify how that levy would coexist with the emissions trading scheme that has been in operation in the country since 2015.

No can do – Indonesia is the latest country to make clear it won’t raise its climate ambitions this year, according to Eco-Business, citing a national development planning ministry official who said Cabinet had dismissed the idea. Indonesia has linked its current emission reduction targets to its economic growth strategy, and will be using those as reference for the next five years, the official said.

Japan coal cash – Japan’s Sumitomo Mitsui Financial Group has said it would no longer lend to new coal-fired power plants from May 1, a day after peer Mizuho said it would stop financing new coal projects. That completes the coal financing shut-out from Japan’s three major banks, after Mitsubishi UFJ Financial Group made the pledge in 2019. (Reuters)

The heat is on – The coronavirus lockdowns have significantly pushed up heating use across Europe, according to intelligent thermostat maker tado. In Germany, where lockdown measures started on Mar. 22, the use of heating energy went up 9% compared to a year earlier, the company’s analysis of more than 100,000 customers in Europe found. In Italy and Spain, where restrictions started on Mar. 9 and Mar. 14 respectively, demand rose by more than 40%. “The weather plays a minor role here, as outside temperatures differed from the previous year by only 1C on average,” tado said in a release. “The increased consumption of heating energy is largely due to the fact that the population spends more time at home during the corona crisis.”  Heating emissions are not currently covered under the EU ETS. Separately, the extensive suspension of Germany’s industrial production in a bid to slow the spread of coronavirus will have a substantial impact on the country’s energy consumption, industry association BDEW has said. Industrial customers account for between 40-45% of Germany’s electricity and natural gas consumption, but measures to contain the virus, collapsing supply chains and withering demand at home and abroad are expected to lead to a sharp decline in power consumption and related emissions. (Clean Energy Wire)

Wrong time – European Commissioner for Transport Adina Valean told EurActiv in an interview that the coronavirus outbreak means it is the wrong time to condition state aid for airlines on green measures. Significant interventions using public money are expected in the coming weeks and months. Valean suggested that the market for sustainable fuels is simply not mature enough to roll out during a crisis but that the CORSIA international offsetting mechanism agreement “needs to be treasured”, when asked if the aviation industry’s recent concerns about the programme were legitimate. This comes as Austria’s environment minister said state aid for Austrian Airlines should support climate policy targets, with the government in Vienna currently negotiating the matter with parent company Lufthansa, Reuters reports.

Ground game – The US Department of Energy (DOE) is looking at a plan to pay oil producers to keep crude in the ground, Bloomberg reports. The plan would involve buying up to 365 mln barrels of proven oil reserves using the department’s authority to store up to 1 bln barrels in a Strategic Petroleum Reserve, with the companies required to produce the oil purchased by DOE in future years. The plan would need Congress to approve about $7 bln in spending at current oil prices, which would likely draw pushback from Democrats. (Politico)

Permit pause – A US court on Wednesday ruled against the Army Corps of Engineers’ use of a permit that allows new energy pipelines to cross water bodies, in the latest setback to TC Energy Corp’s plans to build the cross-border Keystone XL oil pipeline. Montana Chief District Judge Brian Morris ruled that the Corps violated federal law by failing to adequately consult on risks to endangered species and habitat, and it must comply before it can apply the nationwide permit to any project. The ruling does not affect current work on a span of the $8-bln pipeline across the Canada-US border, but it does raise questions about securing water-crossing routes for the rest of the route, according to lawyers involved in the case. The long-delayed project unexpectedly started construction this month after receiving a C$1.6-bln ($1.1bn) loan from the Alberta government. (Reuters)

True colours – The UK’s efforts to cut GHGs are being undermined by a failure to put in place climate policies that cover imported goods, research has found. About half of Britain’s true carbon footprint is made up of these sources, according to a report from the conservation charity WWF. Emissions associated with imports to the UK, including international travel, have risen to about 316 Mt in 2016 and 358 Mt in 2017, the latest years for which data is available. These imported emissions can vary substantially from year to year, but have been broadly steady or rising, though they are down from a peak of 449 Mt in 2007, before the financial crisis. In contrast, from 1990 to 2016 the UK’s own carbon emissions fell by more than 40%, thanks mainly to a switch away from coal-fired power towards gas and renewable sources of electricity. (Guardian)

Cash for trees – The UK has this week launched the latest £10 mln phase of its £50 mln Woodland Carbon Guarantee programme that allows land managers bid for the option to sell Woodland Carbon Units to the government at a guaranteed price for 35 years. The second £10 mln auction is provisionally set to take place on June 8 and interested parties have until June 5 to qualify. The first auction closed in February and saw 18 contracts offered for 182 hectares of new woodland. (BusinessGreen)

And finally… Ice rage – Greenland’s ice sheet shrank last year by more than any time since record-taking began, according to a study published on Wednesday. Greenland lost around 600 billion tonnes of water in 2019, an amount that would contribute about 1.5 millimetres of sea level rise, according to the study from Columbia and Belgium’s Liege university, published in The Cryosphere. The huge melt was due not only to warm temperatures, but also atmospheric circulation patterns that have become more frequent due to climate change, suggesting scientists may be underestimating the threat to the ice. (Reuters)

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