CP Daily: Tuesday July 14, 2020
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*TOP STORIES* EU carbon price rally result of higher climate ambition, says German minister
Buyers are pushing up EU carbon prices at a rapid pace because they expect the 27-nation bloc to deliver a higher climate target for 2030, Germany’s environment minister said on Tuesday. Carbon Pulse adds another EU correspondent as Brussels becomes global climate action epicentre
Carbon Pulse has further expanded its roster of reporters, hiring a new Brussels-based correspondent to enhance the company’s news coverage and data analysis during a crucial period for both EU climate policy and the continent’s energy markets.
*AMERICAS* Biden calls for US Clean Energy Standard to achieve grid decarbonisation by 2035
Presumptive US Democratic presidential nominee Joe Biden unveiled a new climate plan on Tuesday that incorporates a market-based clean energy standard and shortens the timeline for the US power sector to hit net-zero emissions compared to recent legislative proposals. California carbon floor price set to rise above 5% next year as inflation rebounds
California’s ETS floor price is on track to climb by more than 5% in 2021 after year-on-year inflation rebounded in June following a collapse during the height of the COVID-19 pandemic, according to federal data released Tuesday. New York firm eyes new low-carbon transition fund
A New York-based firm will launch a hedge fund next month aimed at capitalising on the societal shift to a low-carbon economy, with 40% of its investment aimed at purchasing ETS allowances, according to media reports.
*ASIA PACIFIC* South Korea mum on net zero emissions, carbon tax in Green New Deal
South Korea on Tuesday on Tuesday outlined the basics of its $60 billion Green New Deal, but the plan said nothing about a net zero emissions target or a carbon tax, both of which the ruling party had flagged ahead of the April parliamentary elections. Tianjin extends emissions trading market to 2025
Tianjin has become the first of China’s regional pilot carbon markets to officially confirm it will continue to operate after 2020. Australian offset prices could drop by a third without new policies, analysts say
The price for Australian carbon credits is likely to edge up the next couple of years but is set to slump to an all-time low by the end of the decade unless the government tightens its climate policies, analysts said Tuesday.
*EMEA* EU Market: EUAs reverse course as EU ministers talk up target raising
EUAs rebounded from an early dip on Tuesday, lifting back towards the previous session’s 14-year high as many of the bloc’s environment ministers talked up plans to raise the EU 2030 emissions target this year.
*BITE-SIZED UPDATES FROM AROUND THE WORLD*
*Off again, on again* – Dakota Access Pipeline developers have scored temporary relief from federal appellate judges who agreed to briefly freeze a lower court order directing the oil project to shut down next month. According to Bloomberg , The US Court of Appeals for the District of Columbia Circuit on Tuesday issued an administrative stay – a short-term procedural move that prevents the shutdown order from taking effect while the appeals court considers arguments from Dakota Access and Indigenous advocates on whether to lock in longer-term relief for the pipeline. The stay is expected to last a matter of days or weeks while the DC circuit court decides whether to require the pipeline to halt operations, or allow it to continue moving oil during an appeals process expected to last many months. The Standing Rock Sioux and other tribes have until Monday afternoon to file briefs, with replies due July 23. The appeals court’s involvement comes a week after a federal district court ordered developer Energy Transfer LP to empty the pipeline of oil while the Army Corps of Engineers completes a court-ordered environmental review expected to last into 2021.
*Going off – *A big rise in offshore wind power deals pushed global investment in new renewable power capacity in the first half of 2020 above the same period last year, new data from BNEF shows. Final investment decisions for offshore wind projects totalled $35 bln in H1, which is over 300% more than the same period in 2019. Overall investment in new renewable power capacity, excluding large dams, totalled $132.4 bln in the first half of 2020, which is up 5% from the same period last year. However, onshore wind investment fell 21% and solar investment fell 12%. (Axios)
*Falling short – *A European Commission proposal for the EU’s long-term budget and recovery fund risks leaving a huge shortfall in the “green” investment needed to meet Europe’s climate goals, researchers said Tuesday. With the coronavirus pandemic plunging the EU into a deep recession, leaders from its 27 countries will meet in Brussels on Friday to attempt to agree the bloc’s budget for 2021-27 and an economic stimulus fund. The Commission has proposed a €1.85 trillion ($2.10 trillion) package, which it says will drive a recovery in Europe’s virus-hit economies based on “green” industries and technologies that help to reduce emissions. (Reuters)
*Forest for the trees – *Leading industry figures acknowledge that not all biomass brings benefits to the climate , insisting that only low-value wood and forest residues should make the cut under EU law. “Not all biomass is good biomass,” says Jennifer Jenkins, chief sustainability officer at Enviva, a US-based company which is the world’s largest producer of industrial wood pellets used for electricity and heat production. “We agree that not all biomass should automatically be categorised as carbon neutral,” she added, noting that biomass should not come from high-value trees that could be used in products like furniture or construction material. The question now facing policymakers in Brussels is how to ensure EU energy policies do not encourage the wrong sort of biomass, even inadvertently. Biomass currently represents almost 60% of the EU’s renewable energy, more than solar and wind power combined, according to the EU’s statistical office Eurostat. (EurActiv)
*Two more gone *- Portuguese utility EDP announced in a note on Monday an earlier closure of 1.5 GW of coal-fired capacity in the Iberian peninsula. The closures involve the 1.2GW coal plant in Sines, Portugal, and the 346MW Soto de Ribera 3 installation in the north of Spain. According to the company, the closures are related to the company’s decarbonisation strategy, but EDP admitted that “the prospects for the viability of coal plants have drastically decreased” as a result of rising EUA costs coupled with low gas prices.
*Shaping up for ships* – A report carried out by Finland’s University of Turku and the Finnish Meteorological Institute provides an initial assessment of the effects of emissions trading in maritime transport. The European Commission plans to present a proposal next year on extending the EU ETS to shipping. According to the paper , the impact will depend significantly on the way the plan is implemented and the price level of allowances. Finland’s transport ministry, which commissioned the study, said emissions from maritime transport depend on the type of ship where a great deal of variation exists, and as a result the cost effects may vary considerably between different shipping companies and charterers. It also warns of the risk of carbon leakage, though it notes that implemented successfully, emissions trading can create a significant market for technologies that curb ship emissions. “Combating climate change requires that the entire transport sector is involved in the cause, and our maritime cluster operators have good opportunities to promote sustainable shipping,” the ministry said. “At the same time, Finland’s foreign trade is particularly dependent on maritime transport due to our location. The report shows that further information about the different options and impacts of emissions trading is necessary.”
*Do your duty – *Fifteen US states and Washington DC on Tuesday announced a memorandum of understanding (MOU) to reach 30% zero-emissions vehicles sales in medium- and heavy-duty models by 2030, en route to reaching 100% by mid-century. The MOU, signed largely by east and west coast states, noted the jurisdictions will work through the existing multi-state ZEV Task Force facilitated by the Northeast States for Coordinated Air Use Management (NESCAUM) to develop and implement a ZEV action plan for trucks and buses.
*War all the time –* Canada’s economy will contract by C$54 bln , with the loss of 300,000 jobs, should the country manage to reach its commitments made under the Paris Agreement, says new research from Alberta’s ‘energy war room’. The Canadian Energy Centre – created by Premier Jason Kenney’s government to fight misinformation about the oil and gas sector – argued that even if all national climate policies in place now are fully realised, there will still be an emissions gap in Canada’s Paris NDC of 112 Mt by 2030. However, some experts called the report “fundamentally misleading ” for its assumption that Canada’s carbon price would increase beyond the current maximum ‘backstop’ rate of C$50/tonne in 2022 and for omitting the output-based pricing systems in place across the country. Others noted the report left out any positive numbers associated with emission reductions leading to lower healthcare costs and lives saved through less particulate matter. (National Post)
*And finally… Scrubbed-sidies – *G20 host Saudi Arabia is seeking to remove the term “fossil fuel subsidies” from policy briefs expected to inform ministerial and leaders’ summits later this year, sources close to the preparations tell Climate Home . The move seems to go against a 2009 commitment by the club of major economies to phase out “inefficient fossil fuel subsidies that encourage wasteful consumption”, with leaders having reaffirmed this pledge at every summit in the past decade. Instead of “fossil fuel subsidies”, which is an established concept in the energy literature, they inserted “fossil fuel incentives” – a term with no commonly agreed definition. The edits came in the final stages of Think20, which engages researchers and academics from the international community to thrash out policy recommendations on a range of G20 priorities.
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