CP Daily: Friday June 26, 2020

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*TOP STORY* US threatens CORSIA exit if GHG baseline decision not made next week
The US will opt out of the first three years of the CORSIA offset mechanism for global air travel if other countries do not agree to alter the programme’s emissions baseline next week, with other nations potentially following suit, a Dutch minister said Friday.
*EMEA* Germany leads four-nation call for Brussels to keep alternatives to carbon border tax open
Four EU governments including Germany have co-signed a statement asking the European Commission to consider additional options in preventing carbon leakage besides a carbon border adjustment mechanism (CBAM). EU Market: EUAs fall on weak auction as traders see rally stalling
European carbon prices fell on Friday after the most bearish auction in almost two months and as traders said the six-week rally appears to be “petering out”.
*AMERICAS* California offsets may have reached peak supply -developer
California carbon offset (CCO) supply may have topped out in recent years as protocol changes, manufacturing trends, and transitions to other climate programmes reduce future credit issuances, a project developer said Friday. Low WCI allowance prices could reduce need for California refinery allocations -IEMAC
California should evaluate the future of refinery allocations under its WCI-linked carbon market if allowance prices are expected to remain near the floor price in the post-2020 period, a state watchdog said Friday, adding that regulators should also consider the impact of the supply surplus and possible auction changes. Virginia publishes revised RGGI regulation with state-run allowance sales
Virginia’s Department of Environmental Quality (DEQ) released a revised RGGI regulation on Friday that installs state-run auctions, cuts the 2020 CO2 budget and makes other technical changes ahead of its scheduled adoption later this summer.
*ASIA PACIFIC* NZ Market: NZUs back within breathing distance of record high amid little supply
New Zealand carbon allowances on Friday were almost back up to their June 11 all-time high as sellers show reluctance to let go of permits amid bullish sentiment and high logging prices. CN Markets: Pilot market data for week ending June 26, 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*
*Gas balance -* As the costs of renewables have plunged, the role of gas in the UK has come under scrutiny , Bloomberg reports, focusing on what could be the last big gas power plant to be built in Britain – SSE’s 840MW Keadby plant – due online in 2022. Utilities are now looking to burgeoning abatement technologies, like CCS and hydrogen production, in order to keep building new gas units. The article contrasts big facilities struggling to get enough operating hours to cover costs with smaller ‘peakers’ seen providing back-up power long into the 2030s.
*Hydrogen lifeline –* In the face of crude and natural gas prices, frozen international travel, and growing shareholder unease over emissions, investing in hydrogen has taken on a new urgency for oil-and-gas majors such as Shell, Equinor, and BP. With European governments unveiling tens of billions of euros in new spending to restart economies and satisfy pre-existing climate commitments, hydrogen development could get a major funding kickstart. That spending will be crucial for the technology around hydrogen production to reach a scale that can compete in the international market. (Bloomberg)
*Ship shape -* The world’s largest container shipper A.P. Moller-Maersk will team up with industry majors to set up a $60-mln research centre in Denmark tasked with reducing carbon emissions in the shipping industry. The centre, which would be an independent non-profit organisation, is founded by shipping firms Maersk and NYK Lines, as well as Siemens Energy, MAN Energy Solutions, ABS, Mitsubishi Heavy Industries, and trading conglomerate Cargill. (Reuters)
*Keep on truckin’ – *The board of California regulator ARB approved a landmark rule Thursday requiring automakers to sell electric trucks in the state. The rule will require at least 40% of all tractor trailers and 75% of delivery trucks and vans sold in California to be zero-emission by 2035. Though work trucks and delivery vans make up a small fraction of the vehicles on the road, they are some of the largest sources of pollution in the transportation sector, in part because they travel so many more miles than regular passenger cars. The rule will have outsized benefits for communities of colour, which are exposed to significantly higher levels of pollution, according to proponents of the policy. At least seven states and Washington DC are expected to adopt the rule. (Climate Nexus)
*Panel publication – *A climate panel that US Speaker of the House Nancy Pelosi (D) launched to give every House committee a roadmap to pursue climate change legislation will unveil its long-awaited recommendations on Tuesday , but the report won’t be bipartisan. The House Select Committee on the Climate Crisis report, underway for roughly 14 months, will stitch together recommendations to virtually every House committee. It’s expected to endorse a broad expansion of clean energy incentives, tightening climate regulations for federal agencies, and adding more emphasis on next-generation energy technologies, according to people familiar with the report. (Bloomberg Law, $)
*Gap clapback – *A bipartisan group of 16 US senators on Thursday sent a letter to EPA Administrator Andrew Wheeler urging him to reject the recently filed 52 “gap filling” petitions by small refineries under the Renewable Fuel Standard (RFS), in an effort to circumvent a federal court decision this year. The senators argued that granting those retroactive small refinery exemptions (SREs) would violate the EPA’s own policy for its RFS compliance waiver programme and further worsen the economic challenges faced by the biofuels industry during the coronavirus pandemic. That letter was followed by Iowa Senator Joni Ernst (R) on Friday saying that she will oppose the nomination of Doug Benevento , tapped to be the EPA’s deputy administrator, until the agency says how it will address the gap filling petitions. Without Ernst’s support, Benevento’s nomination will remain stuck in the Senate Environment and Public Works Committee, as many if not all Democrats are expected to oppose him. (Biomass Magazine, Washington Examiner)
*And finally… **I pledge allegiance, to the arena –* Tech giant Amazon on Thursday announced it has purchased the naming rights to Seattle’s KeyArena, which hosts the Women’s National Basketball Association’s Storm and city’s new National Hockey League franchise. The venue, which will become known as the Climate Pledge Arena , will be powered by 100% renewable electricity when it opens by late-summer 2021, and will pursue a zero-carbon footprint. NHL Seattle CEO Tod Leiweke added that the arena also aims to produce zero waste, source food locally, and by 2024 eliminate all single-use plastics. (Seattle Times)
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