CP Daily: Wednesday June 10, 2020

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*TOP STORY* China tipped to make last gasp ETS launch in 2020 as planned
China is expected to overcome coronavirus impacts and impose CO2 curbs on coal power stations as planned this year under its national emissions trading scheme, although observers say the market launch itself may well only happen in the very last days of 2020.
*AVIATION* CBL says CORSIA offset demand can bounce back by 2023 even with baseline change
Offset demand under the international aviation sector’s CORSIA scheme can climb back to near levels expected pre-COVID by as early as 2023, exchange operator CBL Markets said Wednesday, supporting a push to adjust the UN programme’s baseline to cover only 2019 emissions.
*EMEA* Upcoming EU presidencies commit to submit updated NDC by year-end
The upcoming trio of presidencies of the Council of EU member states has pledged to ensure the 27-nation bloc submits an updated NDC by end-2020, reaffirming efforts to raise climate ambition despite the coronavirus pandemic’s effects. Germany unveils €9 bln hydrogen plan to cut industry emissions as firms launch steel pilot
Germany on Wednesday unveiled a €9 billion strategy to expand clean hydrogen capacity at home and abroad to help cut emissions from transport and EU ETS-covered heavy industry, while major companies set out a related plan to use the fuel to decarbonise steel. Israel mulls carbon tax on power, transport, and cooking gas
Israel has started working on a carbon pricing strategy, with the central bank recommending the government to set up an emissions tax for power, road transport, and cooking gas, according to local reports on Wednesday. EU Market: EUAs lift back towards €23 after late surge
EUAs climbed back towards €23 on Wednesday, again nearing this week’s three-month high after late gains that appeared linked to wider market strength and a breach of technical resistance.
*ASIA PACIFIC* SK Market: Korean auction fails to sell out again as demand dwindles
South Korea’s monthly carbon allowance auction failed to sell out for the second consecutive time as demand dwindles in line with the coronavirus-driven economic downturn. CN Markets: Over-subscribed Tianjin auction sells well below secondary market
China’s Tianjin on Wednesday sold all 2 million carbon permits on offer at its annual auction, as more than 30 buyers took advantage of getting access to allowances well below current secondary market prices. NZ Market: NZUs extend record high as demand persists
New Zealand carbon allowances extended their journey into uncharted territory on Wednesday, climbing another 2.1% as buyers continued to pick up any available supply.
*AMERICAS* California offset issuances slide as Quebec doles out 63k credits
California regulator ARB minted over 115,000 new offsets this week across two protocols, while Quebec’s environmental ministry granted nearly 63,000 credits to seven different projects, according to data released Wednesday. California carbon floor price remains on track for less than 5% increase in 2021
California’s carbon market floor price is still set to increase by less than 5% in 2021 after year-on-year inflation dropped further as a result of the COVID-19 pandemic, according to federal data released Wednesday.
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*BITE-SIZED UPDATES FROM AROUND THE WORLD*
*Gas dive -* Gas consumption will see its biggest annual drop in history as measures to contain the coronavirus pandemic cause an “unprecedented shock” to demand, according to the IEA. Lockdown measures combined with a relatively mild northern hemisphere winter will see gas use drop 4% in 2020 – double the drop seen following the 2008 financial crisis. A rebound is expected in 2021, when most of the increase in demand will likely be in Asia, particularly in China and India. (Financial Times)
*Late plan – *Germany’s government has approved the final version of its 10-year national energy and climate plan (NECP) after more than six months of delay in sending it to Brussels as most member states have done. The plan contains Germany’s country-specific targets, such as reducing GHG emissions by at least 55% by 2030 (compared to 1990), reducing primary energy use by 30% (compared to 2008) and increasing the share of renewables in gross final energy consumption to 30%, both also by 2030. The NECP takes into account the government’s “climate package” decisions from autumn 2019, which were introduced to ensure the country meets its 2030 targets. However, studies have since said that the package is not enough to reach these targets. In the plan released today, the government said that the energy and climate policy will be “continuously developed further”. (Clean Energy Wire)
*Green strings attached – *Austrian Airlines secured a €600 mln bailout with green conditionality attached, €150 mln of which will come from its parent company, Lufthansa. Another €150 mln will be direct state subsidies, while the remaining €300 mln will come from Austrian banks, with up to 90% of that secured by the state as the country attempts to rescue the carrier largely grounded due to the coronavirus pandemic. A coalition government of Austria’s conservative party and the Greens agreed that Austrian must in return reduce its carbon emissions by 50% by 2030 compared to 2018, Euractiv reports . The Austrian government also negotiated an anti-dumping regulation that will prevent airlines from selling their tickets below cost coverage, setting a minimum of €40 per seat. Moreover, a ticket tax of €12 planned for 2021 will come earlier, and a €30 levy will be added for flights under 350 km.
*Taxing times* – The Swiss parliament has moved to impose a carbon tax on airline tickets , as part of efforts to reduce greenhouse gas emissions. The overwhelming majority in the House of Representatives on Wednesday approved a proposal for a levy of between CHF30 and CHF120 ($32-126) per ticket for flights departing Switzerland. The tax is expected to generate revenues of about CHF500 million a year. Half of this amount is to be refunded to Swiss citizens, according to a legal amendment under discussion in parliament. Most parties supported the proposal, arguing it could help to reduce air travel, while the right-wing Swiss People’s Party came out against it. The Senate approved the measure last September during an ongoing debate on a reform of the country’s CO2 law. For its part, the House initially rejected the proposal in Dec. 2018, but a majority of the centre-right Radical Party had a change of heart and agreed with supporters on the left. (Swissinfo.ch)
*I love the 90s – *The US can generate 90% clean electricity by 2035 with no added cost or new fossil fuel plants, and could create more than half-a-million jobs per year, a new report from the University of California, Berkeley found. The 2035 timeframe to remove most carbon from the electric grid is 15 years faster than the majority of federal and state policies currently target. The bulk of the clean electricity in 2035 would come from wind and solar, with coal generation ceasing entirely and existing gas generation reduced by 70%. A rapid build-out of additional renewable energy could contribute to the country’s economic recovery effort, pumping $1.7 trillion of investment into the economy and increasing energy sector jobs by up to 530,000 a year. The report was accompanied by a policy paper from Energy Innovation that outlines a range of policies available to achieve the outcomes, including a technology-neutral national Clean Energy Standard and policies to ensure just transition for fossil fuel-dependent communities. (Climate Nexus)
*The new Gulf war – *President Donald Trump’s administration is again considering a proposal – sought since the early days of his presidency – to open up oil and gas drilling off Florida’s coast, but they will wait until after the November election to float it in order to avoid causing controversy in the swing state, four people familiar with the matter told Politico. The details of the offshore drilling plan remain closely guarded and could still change, but it has been developed by Interior Secretary David Bernhardt, Deputy Secretary Kate MacGregor, and acting Assistant Secretary for Land and Minerals Management Casey Hammond, the sources said. In response, Florida lawmakers in recent weeks have taken their concerns directly to Trump and Senate leadership, including possibly including a bill from Florida Republican Senators Rick Scott and Marco Rubio to extend the eastern Gulf of Mexico’s existing drilling moratorium in upcoming legislation, according to one Senate aide.
*The power of equality – *Widespread deployment of CO2 removal (CDR) technology will require lots of cross-border cooperation and complex judgements about nations’ varying responsibilities, a new peer-reviewed paper concludes. The research, published in the journal Nature Climate Change, considers technical constraints – including nations’ differing “biophysical limits” – and broader questions around equity and responsibility to enable the scale-up of CDR. The authors also created a global model for assigning nations CO2 removal “quotas” under “responsibility, capability and equality” principles. For example, the US quota by 2100 is roughly twice as high under responsibility as it is under capability, while Asia would have 7% under the capability factor compared to 43% under equality. (Axios)
*And finally… **I got a fever, and the only prescription is more construction – *The construction and demolition of buildings in China was responsible for nearly a fifth of the nation’s annual CO2 emissions in 2015, according to a new study. The world’s largest emitter has seen “construction fever” as high-rise structures are built to accommodate its rapidly urbanising population. However, the researchers behind the paper, published in the Journal of Cleaner Production, said cutting the carbon footprint from building materials and construction are not being prioritised and should be a key component of China’s strategy to peak its emissions by 2030. (Carbon Brief)
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