CP Daily: Friday May 1, 2020

Published 02:03 on May 2, 2020  /  Last updated at 02:03 on May 2, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

New Jersey’s RGGI emissions hide significant drops for Q1

New Jersey’s re-entrance into the Northeast US carbon market prompted RGGI emissions to rise during Q1, but this overshadowed significant reductions from the other nine member states as a result of the COVID-19 pandemic.

AMERICAS

New York’s draft RGGI regulation would trigger penalty on biomass plant

A New York-based RGGI facility must surrender allowances for failing to comply with historical obligations if the state adopts its proposed post-2020 ETS regulation, a state official confirmed on Friday.

California LCFS posts 160k credit surplus in Q4 2019

California Low Carbon Fuel Standard (LCFS) credit generation bucked three straight quarters of deficits over the final three months of 2019, with stronger electric vehicle and renewable diesel figures helping to boost the surplus bank over 8 million tonnes to finish the year, according to data posted Thursday.

Compliance entities’ California carbon positions edge down as speculators maintain holdings

Compliance entities continued to trim their California Carbon Allowance (CCA) position on the secondary market, while speculators total holdings remained roughly unchanged week-on-week, according to US Commodity Futures Trading Commission (CFTC) data released Friday.

UPDATED DOSSIER: Canadian federal, provincial, and territorial carbon pricing initiatives

*Incorporates developments through Apr. 2020, including new carbon tax approaches and large emitter programmes in Alberta and New Brunswick, Nova Scotia auction details, and updates on provincial lawsuits against the federal ‘backstop’ carbon pricing regime*

EMEA

Eligible EU countries cleared to hand out final batch of free Phase 3 EUAs to utilities

A handful of eligible EU member states have been cleared to hand out their final batches of free carbon allowances to utilities for the current phase of the ETS, leaving as many as 40 million units to be sold or banked into the next period.

EU Market: EUAs duck below €19 as end to compliance buying leaves demand void

EUAs dropped below €19 on Friday, extending a two-week low in thin holiday trade amid bearish sentiment from Thursday’s passing of the 2019 compliance season and wider financial market weakness.

ASIA PACIFIC

NZ Market: NZUs hold steady despite unknowns lying ahead

NZUs held steady near the NZ$25 fixed price option level this week, with sound demand despite the uncertainty over the economic impact of the COVID-19 crisis and looming reforms.

CN Markets: Pilot market data for week ending May 1, 2020

Closing prices, ranges and volumes for China’s regional pilot carbon markets this week.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

NACW anew – Offset registry Climate Action Reserve (CAR) on Friday announced it will host a virtual series for its 2020 North American Carbon World (NACW) conference after the coronavirus pandemic caused it to cancel its April gathering in San Francisco. The first session on May 7, Navigating the North American Carbon World, will feature a discussion moderated by Carbon Pulse’s own Dan McGraw on climate action and inaction in Canada, the US, and Mexico. The second session on May 14, Supporting Local Action: the California Climate Investments Program, will take a look at current work to distribute allowance revenues from the state’s WCI-linked carbon market.

Best practice – UN chief Antonio Guterres said he hopes many countries will follow the “remarkable example” of South Korea in addressing the coronavirus pandemic and planning to tackle climate change in its recovery, the Associated Press reported. Guterres called on all governments to ensure that recovery spending gives priority to the creation of “green jobs“ and the use of low-carbon energy sources, and he said taxpayers’ money should not be used to subsidise fossil fuels or bail out carbon-intensive industries. “Now is the time to put a price on carbon and for polluters to pay for their pollution,” he added. Read Carbon Pulse’s take on Korea’s plans for a 2050 net zero emissions target and a new carbon tax.

Mixed messages – Japan’s government-owned export credit agency JBIC said it has not changed its policy on financing coal power plants, muddying a message last week from the bank’s head that it will no longer accept loan applications for those types of projects. A JBIC spokesman said the agency will continue to follow Japanese government policy and consider each project on a case-by-case basis based on that. (Reuters)

Loan lobby – The US Federal Reserve announced significant changes to an upcoming crucial loan programme Thursday that will have disproportionate benefits for the struggling oil and gas industry. The Fed relaxed eligibility requirements for its Main Street Lending facility to allow companies with up to 15,000 employees and up to $5 bln in revenue to apply, up from the original standards of 10,000 employees and $2.5 bln in revenue. Fossil fuel industry lobbyists and Republicans from oil- and gas-producing states have pushed for these changes in recent days, and the shifts would especially benefit small- and mid-sized oil and gas companies, many of which were heavily indebted before the pandemic. (Climate Nexus)

CAPP cut – Mining company Teck Resources is leaving oil and gas lobby group Canadian Association of Petroleum Producers (CAPP), the company announced Friday, saying the decision came as part of a cost-cutting drive. In February, Teck cancelled its proposed C$20-bln Frontier oilsands mine in Alberta, saying at the time there was “no constructive path forward” given Canada’s impasse over indigenous rights, climate change, and resource development. CAPP members represent roughly 80% of Canada’s oil and gas production, and the association has lobbied the federal government in recent weeks for delays to the national Clean Fuel Standard, increases in the ‘backstop’ CO2 levy rate, and other climate policies due to COVID-19. (The Canadian Press)

GAP year – The Washington Department of Ecology (ECY) on Friday began a rulemaking process for the Greenhouse Gas Assessment for Projects (GAP) Rule. The measure will address analysis and mitigation of GHGs for environmental assessments of industrial and fossil fuel projects, and is intended to provide consistent and comprehensive assessment methods for those projects and transparency to affected businesses and the public. ECY will hold a hold a series of public meetings on the proposed rule in the summer through winter of 2020, either in-person or web-based.

Pulling the plug – Airbus and Rolls-Royce have announced an ending to their joint hybrid-electric E-Fan X demonstrator programme, a pioneering project directed towards the electrification of commercial passenger aircraft that was launched in 2017. A test aircraft with one of its four jet engines replaced by a 2.5MW motor was due to embark on its first flight in 2021. With the industry in crisis mode, both parties have decided the actual requirement to carry out the test flight was “not critical at this time”.  Airbus CTO Grazia Vittadini said as the aircraft manufacturer started “to navigate the realities of a post-Covid-19 world”, it needed to refocus and reprioritise its efforts to decarbonise the aviation industry. Rolls-Royce CTO Paul Stein said the company would continue with ground testing of the power generation system it had developed for the programme. (GreenAir Online)

And finally… The burp business – Swiss firm Mootral has been able to cut a cow’s potent methane emissions some 30% in tests involving feeding the animals garlic-based pellets. Yet the coronavirus situation is bringing headwinds as an investment round scheduled to close in March fell apart. Mootral still expects to have roughly 300,000 cows taking its supplements by next year, and 7.5 mln by 2024, with an annual revenue of €375 mln from selling the pellets and the resulting VCS-certified carbon credits to corporate buyers. (New York Times)

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