CP Daily: Friday May 15, 2020

Published 22:15 on May 15, 2020  /  Last updated at 00:14 on May 23, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

Surprise EU data release lifts lid on 12 years of ETS emissions transactions

The European Commission this week quietly published over 12 years’ worth of trading records from the EU ETS emissions registry, offering a comprehensive glimpse of how hundreds of billions tonnes of CO2 were shifted across more than a million transactions.

EMEA

EU lawmakers call for massive COVID-19 recovery plan, earmarking ETS revenues to general budget

The European Parliament on Friday approved a resolution demanding an ambitious seven-year EU budget and recovery plan amounting to €2 trillion, which could see revenues from auctioned EUAs and imported carbon-intensive goods earmarked in the EU’s general budget.

EU Market: EUAs inch back above €19 ahead of lighter supply load

EUAs lifted above €19 on Friday amid stronger energy prices and lower supply over the next two weeks, but carbon still saw a small weekly loss amid caution over the pace of Europe’s recovery from lockdown.

German utility EnBW keeps ahead on hedging over Q1

German power generator EnBW advanced its hedging over Q1 to maintain its slightly advanced position, it said in financial results on Friday, providing a bearish signal for EUAs even as the company said it saw limited impacts from the coronavirus.

EU member states issue another 480k in free carbon allowances for 2020

EU member states and the UK handed out nearly half a million more free EUAs to industry for 2020 over the past two weeks, data released by the European Commission late Friday showed.

ASIA PACIFIC

Australia ready to prop up offset market if prices fall

Australia’s Clean Energy Regulator is willing to buy carbon credits above A$16 ($10.35) in between auctions to assist the market if offset prices slump due to the COVID-19 crisis, Energy and Emissions Reduction Minister Angus Taylor said Friday.

Australia’s 2020 offset issuances pass 6 million, on course for record

Australia’s Clean Energy Regulator has minted over 320,000 new carbon credits, taking the total so far this year past 6 million and keeping the agency on track for what it expects to be a record year.

CN Markets: Pilot market data for week ending May 15, 2020

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

AMERICAS

TCI delays final carbon market framework until autumn due to COVID-19

The US Transportation and Climate Initiative (TCI) postponed the final Memorandum of Understanding (MOU) for its proposed fuel sector cap-and-trade scheme until this fall in light of the impacts from the coronavirus pandemic, according to an updated timeline released Friday afternoon.

Revised California 2020-21 budget outlines lower ETS revenues

California Governor Gavin Newsom’s revised budget proposal released Thursday anticipates reduced revenue from quarterly cap-and-trade auctions in the next fiscal year, with a flexible mechanism to allocate funding based on future ETS proceeds.

Speculators cut WCI allowance holdings as prices approached floor, data shows

Speculators trimmed their length in the California Carbon Allowance (CCA) market as the secondary market trended back towards the WCI floor price, with compliance entities adding to their holdings during that period,US Commodity Futures Trading Commission (CFTC) data showed Friday.

AVIATION

ICAO postpones decision on rubber-stamping certain VCS offsets for CORSIA eligibility

ICAO’s Council will push back a decision on lifting temporary restrictions to Verified Carbon Standard (VCS) credits approved for the global aviation offset system CORSIA, standard and developer manager Verra told Carbon Pulse.

COMMENT

Climate warriors are right to celebrate low oil prices, but not for the reasons they think

Low oil and gas prices are no boon for the climate in the short term, but they give us a window into a future of ever-decreasing fossil fuel demand that may deter expansion an opportunity to put in place policies that get us paying to decarbonise the fossil fuels we dig up, argues Eli Mitchell-Larson of Oxford University’s Environmental Change Institute.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Stop & drop – The US Energy Information Administration (EIA) says US electricity consumption will drop by a record 4.6% in 2020 as businesses shut during the coronavirus lockdown, Reuters reports. In its short-term outlook, the EIA projected total US power demand will drop to 3,716 bln kWh in 2020 from 3,896 bln in 2019, before rising to 3,753 bln in 2021. On a daily basis, the EIA says business closures caused weekday power demand in March and April to drop by 9-13% in the US central region and 11-14% in New York – the hardest hit state with the most coronavirus cases. Reuters adds: “If power consumption falls as expected in 2020, it would be the first time since 2012 that total demand declines for two years in a row.” (Carbon Brief)

Floating on – The UK is proposing in a consultation document to extend its “contracts for difference” (CfD) low-carbon power generation support scheme through 2030. The government has awarded contracts to about 16 GW of new renewable power capacity so far, and the next allocation round of contracts is scheduled for 2021. It said higher levels of wind deployment will be needed and is considering to help floating offshore wind projects get to commercial deployment. (Reuters)

Sign me up – Romania joins 18 EU nations in a call for a green recovery from the COVID-19 crisis, its Brussels-based Permanent Representation confirmed on Thursday. Despite its sizeable share of coal in its energy mix, Bucharest confirmed its support for “economic recovery measures that sustain an effective transition to climate neutrality,” and endorsed a letter co-signed by 17 other EU environment ministers and published by Climate Home News. Among the European nations that have not signed up are some ‘usual suspects’ including Poland, Hungary, Czechia, Estonia… and, perhaps oddly, Belgium.

Fair enough – Fair and efficient carbon pricing that encourages a shift from fossil fuels to green investment can help deliver a more resilient COVID-19 recovery, as well as raising up to £15 bln a year in crucial revenues for the UK over the next decade, according to a Grantham Research Institute policy briefing reported by BusinessGreen. If carbon is not priced and fossil fuels are subsidised, the recovery will be distorted in favour of a high-carbon economy which will leave society more vulnerable to future risks and lock in a high-carbon path that is more costly to reverse later, it said. Read Carbon Pulse’s article on Grantham’s suggestion of transferring the burden of carbon taxes from people to polluters.

Clean compliance – All 374 entities reporting under the California Low Carbon Fuel Standard (LCFS) complied with the transportation sector programme in 2019, state regulator ARB announced Thursday. Some 59 entities holding deficits at the end of the year met their compliance obligation, with the LCFS regulation allowing companies to carry a credit deficit for five years, with an accompanying 5% annual interest penalty. The 100% compliance figure means a Credit Clearance Market (CCM) will not function this summer, with the ARB releasing some 47,100 LCFS credits back into the market that were pledged for the sale.

Royalties revenues – Toronto-based precious metals royalties and streaming company Star Royalties Ltd. on Friday announced a purchase and gross revenue royalties agreement with AurCrest Gold on the latter’s new Ontario-based forestry offset project. As part of the deal, Star Royalties paid the miner C$155,000 ($110,000) in exchange for receiving the right to 16% of the gross revenues stemming from the project’s credit sales. The agreement also gives Star Royalties interest in AurCrest’s annual revenue share from any carbon sequestration project within the overall Lac Seul Forest management unit.

And finally… Rule rush – Trump administration officials across multiple agencies are rushing to publish as many rules as possible before a deadline that may or may not be affected by the coronavirus pandemic. The administration is seeking to finalise regulations before May 19 in order to prevent a future Democratic president and Congress from undoing them via the Congressional Review Act. According to an analysis from non-partisan watchdog group Accountable.US, agencies have issued 730 rules and proposals since Feb. 11 – the day the WHO officially announced the name of the virus – with the EPA alone releasing or proposing 229 of its own including rolling back clean cars standards, mercury emissions rules, and deciding not to tighten soot pollution standards. (Climate Nexus)

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