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New York’s Department of Environmental Conservation (DEC) on Thursday released a draft RGGI regulation that aligns with the post-2020 Model Rule, with enhancements that include coverage for peaking plants under the 25MW threshold for the regional ETS.
In our latest instalment of the Carbon Pulse Conversations podcast, we speak to Marcus Ferdinand, head of European power and carbon analytics at ICIS, about what’s driving EUAs at the moment, how the coronavirus crisis is impacting the EU ETS, and his forecasts for allowance prices.
Plunging EU ETS emissions due to the COVID-19 crisis and other market forces will balloon the scheme’s allowance surplus this year to the equivalent of around two years’ worth of demand, analysts have predicted.
EU power generators Vattenfall and Iberdrola have both reported substantial drops to their ETS-covered thermal power generation in Q1, with milder, wetter weather crimping demand even without account for coronavirus impacts.
The EU should widen an industrial pollution law to cover greenhouse gas (GHG) emissions, environmental campaigners have said, a move that would effectively put an additional layer of regulation on companies already covered by the bloc’s carbon market.
EUAs ended lower for a fourth straight day on Wednesday after again flirting with sub-€20 levels despite the market comfortably absorbing a bumper auction, as data showed speculators were further building their net short positions.
California regulator ARB should consider a rule-based mechanism to automatically adjust allowance supply based on surplus volume, as well as tweak ETS auction provisions to sell state-owned permits simultaneously with consigned volume, a government watchdog group said Wednesday.
Alberta’s large emitter programme will not significantly harm the Canadian province’s oil industry compared to a pre-coronavirus scenario, and some facilities may even come out ahead, according to new analysis published Tuesday.
Maine’s Department of Environmental Protection (DEP) will begin taking comments on its revised post-2020 RGGI regulation on Wednesday after opting not to hold public hearings due to the coronavirus pandemic.
China on Wednesday promoted vice minister Huang Runqiu to be its new ecology and environment (MEE) minister, a move observers say means preparation work for the national carbon market can continue but limits the ministry’s ability to shape policy.
One of China’s largest bike-sharing brands has become the first in the country to earn compliance grade carbon credits for its business.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Green strings – Air France will have to cut its GHG emissions to world-leading levels to get a €7 bln government bailout amid the drastic coronavirus restrictions, according to France’s finance minister Bruno Le Maire. He said the airline would have to cut its 2005-level emissions by half per passenger and per kilometre by 2030 for international routes and by 2024 for domestic flights. Some 2% of its fuel would also have to be derived from sustainable sources by 2025. Separately, the Financial Times reported that the Dutch government had pledged between €2-4 bln to support its carrier KLM, which operates under the same corporate ownership as Air France, while Lufthansa is also understood to be in talks with the German government in an effort to avoid bankruptcy. Read Carbon Pulse’s latest on how airlines are asking their governments for tens of billions in emergency aid packages, though among EU nations only that of Austrian Airlines had previously been contingent on climate action. (Reuters)
Capturing value – Norwegian engineering company Aker Solutions has had its CCS technology approved for use at HeidelbergCement’s cement plant in the country. The technology will be used to capture and liquefy 400,000 tonnes of CO2 a year at the plant. The facility is the most advanced in Europe, with oil majors Equinor, Total, and Shell due to make a final investment decision by year-end on another initiative to capture CO2 from Norway’s onshore oil installations. (Reuters)
Steel supports – At least €100 billion in investment is necessary to make European steel production climate neutral by 2050, according to a study by Munich-based consultancy Roland Berger. It said the EU or national governments should offer such additional tax breaks, subsidies, and financing as are necessary to enable steel producers to make the switch that needs to start in the next 5-10 years. (Clean Energy Wire)
Mum’s the word – Australia’s industry department and the office of Energy Minister Angus Taylor have both rejected freedom of information requests from news website RenewEconomy to release advice provided to the government last year by a business-led panel on how Australia’s carbon offset programme could deliver deeper emission cuts. Among its initial proposals in a document briefly circulated last October was adjusting the Safeguard Mechanism so that emitters meeting their targets would earn carbon credits. However, that short document has grown into a 96-page report submitted to the government earlier this year, but it remains unreleased. Officials are due to review the Safeguard Mechanism and the ERF this year, but it’s unclear how much work can be done on it amid the COVID-19 crisis.
See you in September – The Supreme Court of Canada on Wednesday once again delayed oral arguments for Saskatchewan and Ontario’s lawsuit against the federal government’s ‘backstop’ carbon pricing system. After postponing the original March hearing to June due to the coronavirus pandemic, the court announced the joint cases will now be heard at an undetermined date in September.
Big rig revision – California regulator ARB on Tuesday released its updated advanced clean trucks regulation, scheduled for a vote by the agency’s board in late June. Green group Union of Concerned Scientists said that the ARB responded to public concerns that the original proposal wasn’t strong enough, and doubled the number of electric trucks achieved by 2035 compared to the previous version. The proposal will result in roughly 100,000 and 300,000 electric trucks on California’s roads in 2030 and 2035, respectively, out of roughly 1.8 mln and 1.9 mln total trucks expected in those years.
Jet offset – Oil major BP will donate 3 mln gallons (11.3 mln litres) of jet fuel to Alaska Airlines and delivery company FedEx to assist in coronavirus recovery efforts, and will offset all emissions associated with the fuel, the company announced Wednesday. The credits will come from an unnamed US-based project using BP’s Target Neutral initiative.
Aligned on certifying – The US-based Ecosystem Services Market Consortium (ESMC) and certification body SustainCert will look to verify GHG impacts for carbon credits from the former’s soil carbon protocol, the entities announced Tuesday. The partnership comes as ESMC looks to launch an agricultural ecosystem services market in 2022 for companies to achieve science-based targets and net-zero GHG goals. ESMC is working to submit a protocol to offset programme manager Gold Standard, which is SustainCert’s parent company.
And finally… Green Glen – Former Winnipeg mayor and Ontario Environment Minister Glen Murray on Wednesday announced his bid to lead Canada’s national Green Party. Murray, who as a member of the Ontario Liberals oversaw the development of the province’s now-cancelled carbon market, said he would shift the Greens away from carbon taxes and focus on green jobs linked to things like high-speed rail, along with ultimately banning short-haul flights that don’t run on electricity. Murray added he wants to make the small but increasingly popular party more electable over the course of five to 10 years, targeting 50 of the 338 seats in the federal House of Commons. The party won three seats in the Oct. 2019 election. (CBC)
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