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WCI participants anticipate limited demand for California Carbon Allowances (CCAs) at Wednesday’s joint sale after prices crashed on the secondary market this spring, which allowed compliance entities to pick up permits at a much cheaper rate than the auction floor price.
Australia on Tuesday confirmed it is planning major changes to its market-based climate policy package, which would include reforms such as crediting Safeguard Mechanism entities, awarding credits to carbon capture and storage projects, and allowing the use of renewable energy credits for voluntary offsetting.
Big emitters have welcomed Australia’s plans to fund bigger emission cuts through the country’s carbon market mechanisms, though analysts warned the far-reaching changes could cause a huge influx of low-quality offsets without addressing the market’s stunted demand.
New Zealand will not clarify whether the fixed price option in its emissions trading scheme will rise to NZ$35 this year until after 2019 compliance has been completed, the government has confirmed.
California officials are urging a federal court to dismiss the final argument against its ETS linkage with Quebec, while arguing that the Department of Justice’s (DOJ) challenge under the US Constitution’s Foreign Affairs Doctrine represented a significant expansion of power over states.
Oregon’s Environmental Quality Commission (EQC) does not have the legal authority to auction permits under the state’s potential carbon reduction policy, but alternative compliance pathways such as trading should not face a similar barrier, a state agency said Monday.
PJM stakeholders expressed various opinions Tuesday on whether a carbon border adjustment in the wholesale power grid is best for lowering emissions within the 14-jurisdiction region.
The EU ETS must be urgently strengthened to help achieve the Paris Agreement’s 1.5C global warming limit goal, the Swedish government and a network of businesses in the country including McDonald’s and Coca Cola said this week, laying out a number of proposals to beef up the bloc’s market-based climate measures.
The next seven-year EU budget must aim to raise the share of the total spending on climate action, potentially gradually increasing it to 30%, a member of the European Parliament’s negotiating team said on Tuesday.
EUAs dipped on Tuesday but kept close to €20 to consolidate much of the previous session’s major gains, as an auction supply dip looms.
BITE-SIZED UPDATES FROM AROUND THE WORLD
COVID effect – Daily global CO2 emissions fell 17% year-on-year by early April when lockdowns were imposed around the world due to the coronavirus crisis, according to the first definitive study of global carbon output this year published in the journal Nature Climate Change. When the lockdown was at its most stringent, in some countries emissions fell by just over a quarter (26%) on average. As nations slowly get back to normal activity over the course of the year, the annual decline is likely to come in at around 7% if some restrictions to halt the virus remain in place. However, if they are lifted in mid-June, the fall for the year is likely to be only 4%. Emissions from aviation were down the most at some 60%, while surface transport was 36% lower. Power generation and industry accounted for about 86% of the total decline in emissions, while aviation – typically responsible for around 3% of global GHGs – made up 10% of the drop. (The Guardian)
It’s a gas – Pressure is mounting worldwide to make a clean recovery from the coronavirus crisis, but Australia’s National COVID-19 Co-ordination Commission has different plans, according to the Australian Financial Review ($). The committee is pushing to revive a A$6 billion ($3.92 bln) gas pipeline from the coast of Western Australia to Moomba in South Australia, which would then be able to deliver LNG to the east coast. But the project was deemed unviable and discarded two years ago, and that remains the case according to experts, sparking claims that the commission is trying to use the outbreak to push fossil fuel projects that otherwise wouldn’t happen.
Ostroleka is gas, too – Deemed as ‘Poland’s last coal plant’, the 1GW Ostroleka power plant will instead run on gas, the CEO of Polish state-owned refiner PKN Orlen Daniel Obajtek confirmed on Tuesday. Earlier in May, PKN Orlen had completed a takeover of state-run utility Energa, which was developing Ostroleka but suspended the project due to financial circumstances. PKN had planned to continue with the investment, but mulled options to replace coal with less-polluting gas. (Reuters)
Testing negative – Germany’s controversial new Datteln 4 coal plant in the state of North Rhine-Westphalia is running at full capacity in test operation despite the low demand for electricity on the market, resulting in negative electricity prices and causing losses for green power producers, Tageszeitung reports. German hard coal and lignite-fired power plants saw output drop in April to their lowest in decades due to the significant decline in electricity consumption from the coronavirus lockdown and the above-average production of wind and solar power. Datteln 4, which is scheduled to go online this summer, was the only coal plant still running at full capacity for many days in April, as it began test operations despite the federal government’s decision to phase out coal amid massive protests. It was repeatedly tested at full power, usually on days when there was already plenty of electricity. As a result, the electricity exchange price plunged sharply into the red. On Apr. 21 at midday, it reached -€80/MWh, resulting in no remuneration for renewables producers. (Clean Energy Wire)
Cross-border – The European Commission has launched a public consultation to July 13 on the review of the EU rules on trans-European energy infrastructure ahead of a legislative proposal due by year-end. Energy Commissioner Kadri Simson said the updated TEN-E regulation will set out the rules for cross-border energy projects to make sure that they are in line with the bloc’s net zero 2050 climate ambition. (Eureporter)
Integrated – Simson also announced on Tuesday to EU lawmakers from the ITRE committee that the Commission will present a new strategy on Energy System Integration in June. The strategy will propose a greater electrification of transports, buildings, and some industrial processes, and will make energy systems more circular by re-using industrial waste streams for energy purposes. It will also identify future legislative proposals to be presented from 2021. In parallel, the Commission will issue a strategic outlook communication on hydrogen, to increase the deployment of the fuel together with the private sector.
Charged up – The European Investment Bank on Tuesday confirmed it will mobilise €1 bln in support for a “strong, independent” European battery industry in 2020. That is a tenfold increase to the EIB’s previous annual commitments, as the largest international public lending institution has mobilised between 2010 and 2019 a total of €950 mln for battery research. These investments will be made under the framework of the European Battery Alliance, an initiative led by the European Commission Vice-President Maros Sefcovic bringing together industrial players and national governments.
Permit pull – Presumptive Democratic presidential nominee Joe Biden would rescind the cross-border permit granted by Donald Trump that allows the controversial Keystone XL pipeline to cross into the US, effectively killing the project that the current president has made central to his administration. Biden’s statement is the first commitment on how he’d handle the project that has been stalled for over a decade, with President Barack Obama having blocked the pipeline in 2015 while Biden served as vice president. The White House and Alberta government both criticised Biden’s pledge. (Politico)
Chatterjee chatter – US Federal Energy Regulatory Commission (FERC) Chairman Neil Chatterjee is considering running for governor in Virginia next year, Politico reports. A Facebook group titled “Hypothetical: Draft Neil Chatterjee for Virginia Governor 2021” was formed over the weekend, featuring a photo of Chatterjee wearing a Washington Nationals baseball cap while holding a gavel. Chatterjee, a Republican tapped by President Trump to lead the commission in 2018, told Politico he was “just playing around” when he created the group, and plans to finish out his term, which ends in June of next year. “My focus from now until June 30, 2021 is on my duties at FERC,” he told Politico. “Only after my term is complete will I start to give any thought to what I do next in life.” The state’s gubernatorial primary, however, is scheduled for June 8 next year, which would force Chatterjee to make the decision before the end of his FERC term. (The Hill)
Farming clean – The European Commission is mulling 2030 targets to cut EU fertiliser use to bring the agriculture sector into line with its climate policy aims, Reuters reported, citing a numberless draft document due to be published on Wednesday. Agriculture contributes around 10% of EU greenhouse gas emissions.
And finally… Size isn’t everything – Freshwater fish could end up with bigger brains because of climate change – but find themselves less able to carry out simple tasks, according to research by University of Glasgow biologists. It found the fish in a heated tank struggled to navigate a maze to reach a mealworm – even with four attempts to learn the layout of the puzzle, though their brains were larger than fish placed in a cooler tank. “It’s likely that the expansion of brain tissue isn’t accompanied by an expansion of neural density, so their brains don’t provide any additional benefits for being larger,” the study found. (Press Association)
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