CP Daily: Wednesday May 6, 2020

Published 00:43 on May 7, 2020  /  Last updated at 11:05 on May 7, 2020  / Carbon Pulse /  Newsletters

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

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Swiss-EU ETS trading link delayed further due to coronavirus

The physical link between Switzerland’s carbon market and the EU ETS has been delayed further due to the coronavirus crisis, the European Commission announced late Wednesday.


EU Aviation Allowance prices crash as COVID-19 grounds sector

Prices for EU Aviation Allowances (EUAA) have collapsed in the past few days as experts see zero demand in the coming months from the sector, which has been ravaged by the coronavirus pandemic.

Virus impacts to suppress EU ETS prices into 2021, but lawmaker will seen strong -survey

COVID-19 impacts will weigh on EUA prices into next year but not on EU lawmakers’ resolve to reform the market or wider climate policies, according to a survey published on Wednesday.

Czech senate demands EU ETS renegotiation amid rising heating costs

The Czech senate has passed a resolution demanding the government re-negotiate the country’s obligation under the EU ETS, citing an increased burden on the district heating system.

Governments must resist efforts to weaken carbon pricing, says business coalition

Carbon pricing and the legislation governing it are “essential policy tools” to tackle climate change and governments must stand firm against voices demanding their weakening, a coalition of 40 businesses, financial institutions, and non-profits wrote in a report published Tuesday.

UK should consider wider carbon pricing while oil price is low, say advisors

The UK should consider expanding carbon pricing as part of its post-pandemic recovery measures, the government’s climate advisors said on Wednesday, adding that current low oil prices provide an opportunity to raise carbon taxes.

EU Market: EUAs sink back to €19 despite robust auction comeback

EUAs hung around €19 on Wednesday as the market absorbed a bumper Polish auction far more comfortably than a smaller sale the previous day, as fresh data showed an increase in speculative short positions.

Italy’s Enel advances hedging as coal output sinks

Italian utility Enel advanced its EU power hedging during Q1, resulting in a more heavily hedged position as its coal exit accelerated and it sidestepped early financial impacts from the coronavirus pandemic.

Annual EUA withdrawal number to be published on May 8 -EU Commission

The European Commission will on Friday publish figures determining how many EU ETS carbon allowances will be removed from the market over the 12 months from September, with this year’s calculation release date coming a week earlier than normal.


Hydro gains likely to lower California power sector’s WCI obligations for 2019, data suggests

Robust California hydroelectric generation last year displaced carbon-emitting sources and mitigated lower nuclear output, likely reducing compliance obligations for the power sector in the WCI-linked ETS, according to preliminary California Energy Commission (CEC) data released Tuesday.

Oregon Clean Fuels Program registers nearly 75k surplus for Q4 2019

The Oregon Clean Fuels Program (OCFP) saw its credit surplus nearly halve in Q4 compared to the previous three-month period, though the addition of residential electric vehicle credits for the 2019 calendar year helped build the bank further, data showed Wednesday.

LCFS Market: California prices bounce back following data release

California Low Carbon Fuel Standard (LCFS) credit prices climbed to a one-month high on Tuesday, erasing all losses after state regulator ARB posted higher-than-expected credit generation figures for Q4 2019.


SK Market: Korean carbon’s virus resistance weakens

South Korea’s carbon price is finally showing signs of reacting to the COVID-19 crisis, slipping steadily in recent days amid growing pre-compliance trading activity after weeks of stagnation.



Trading up – French and the Netherlands want the Paris Agreement to become an “essential element” in comprehensive EU trade deals including those currently being negotiated and any updates to existing agreements, ENDS Europe reported, citing a ‘non-paper’. That goes further than the EU’s current stance to not incorporate Paris in deals already in the works. The two nations also say EU trade deals could include commitments to “cooperate on climate policies such as carbon markets” and implement UN biodiversity commitments and could offer enhanced market access to partners in exchange for effective implementation. Separately, the FT reports that the UK is resisting EU moves to incorporate guarantees on respecting international climate change commitments in a future trade deal, adding to mounting disagreements on both sides over how to forge their post-Brexit relationship. EU officials said the most recent negotiating round with the UK had revealed a clear rift over co-operation in the fight against climate change. While the EU wants to nail down guarantees about shared green ambitions, Britain argues that it should not have to make such legal commitments in exchange for preferential access to the European market. The officials said that, during last month’s negotiations, a particular point of disagreement arose over how to weave the Paris Agreement into the future relationship talks. Britain has made clear that it rejects the EU’s vision of an overarching future relationship agreement covering everything from trade to foreign affairs, with a single system for settling disputes. A UK government spokesperson said that Britain was “absolutely committed to tackling climate change”, adding that the country would use its COP26 presidency to drive forward implementation of the 2015 pact.

Gas off-limits? – The European Commission is considering three options for future investments in gas infrastructure as it prepares a revision of EU guidelines on cross-border energy infrastructure financing expected by the end of 2020, according to a leaked scoping paper seen and reported on by EurActiv. The options are a gradual shift from fossil gas and new priorities for renewable gas, a green gas grid with fossil gas banned from EU funding, or an electricity-only option with no gas funding.

Offset clearance – Britain’s advertising watchdog has ruled oil major Shell’s “drive carbon neutral” ad campaign acceptable following complaints, Reuters reported. Last year the company rolled out the strategy in the UK and the Netherlands, offering to offset the emissions from customers’ fuel purchases and underpinned by land-based investments. The regulator said it was satisfied by the claims made in adverts on petrol pumps but was still investigating complaints from radio adverts. Read Carbon Pulse’s interview with the Shell executive heading up the programme, which he saw as causing “winds of change” for the voluntary carbon markets.

Nature needed – All nature-based solutions should include commitments to continue to deliver emissions reductions, to conserve and protect existing ecosystems, to be socially responsible and respect those local communities impacted by projects, and to ensure all projects are ecologically responsible, according to a group of leading academics, campaigners, and executives in a renewed call for governments to accelerate efforts. (BusinessGreen)

Life begins at 40 – Renewable energy sources produced more electricity in the US than coal for a record 40 days in a row, including every day in April, according to a new report from the Institute for Energy Economic and Financial Analysis. The streak, which ran from Mar. 25 through May 3, was two days longer than all of the days in which renewables outperformed coal in 2019 combined. Apr. 2020 was also the first-ever month where renewables made more electricity than coal every day, the analysis said. (Climate Nexus)

REC sale – Evolution Markets will host a Renewable Energy Credit (REC) auction on behalf the Massachusetts Clean Energy Center on May 13, the brokerage announced. MassCEC plans to offer 4,035 Vintage 2019 Massachusetts Class I Renewable Certificates and 77 Vintage 2019 Massachusetts Solar Carve-Out II RECs generated in the third and fourth quarters of 2019, with the credits coming from five different projects in the Bay State.

And finally… Crisis actor – The head of a pro-gas advocacy group backed by California company SoCalGas derailed a local climate vote by threatening to bus in hundreds of protesters in the throes of the coronavirus pandemic, warning “there will be no social distancing”, the Los Angeles Times reports. Elected officials in the California city of San Luis Obispo were set to vote on an energy code that would encourage construction of all-electric buildings that don’t use gas appliances and aren’t hooked up to the gas grid. However, Eric Hofmann, president of Utility Workers Union of America Local 132, which represents thousands of employees of Southern California Gas, sent a Mar. 16 letter to city officials in which he said protestors against the measure “will pull permits and close streets and have a massive protest on Apr. 7”, the planned day of the vote, “potentially adding to this pandemic”. The next week, San Luis Obispo officials scrapped plans for the vote and have not rescheduled it since. Hofmann also chairs the board of directors of Californians for Balanced Energy Solutions, a pro-gas advocacy group that has received funding from SoCalGas and worked closely with the utility to generate opposition to all-electric building policies.

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