Tag Archives: green
Energy Risk USA: Firms Optimistic About California Carbon Market
Author: Mark Pengelly Source: Energy Risk | 16 May 2013 California flies flag for emissions trading Energy market participants upbeat about development of California emissions market, despite legal threats A panel of energy market participants, including representatives of Texas-based power generator Calpine and California-based oil and gas firm Chevron, expressed confidence in the future of the Californian emissions market at the Energy Risk USA conference on May 15. Created under Assembly Bill 32 (AB 32), California’s carbon market was launched with an inaugural quarterly auction of California Carbon Allowances (CCAs) on November 14 last year. A second auction was held on February 19 and a third is scheduled to take place on May 16. Daniel Lieberman, senior advisor for environment and climate change at Chevron, said he expected prices for CCAs to reach $14–15 per tonne at the May 16 auction – well above a minimum $10/tonne floor set by the California Air Resources Board (Carb). As you wait for every milestone to be achieved, there are groups… with lawsuits tucked in their back-pockets The upbeat tone on California’s carbon market contrasts with deep pessimism about the future of the the European Union Emissions Trading System (EU ETS), which has been beset by a massive oversupply of emissions, leading to rock-bottom prices. Elsewhere, the Regional Greenhouse Gas Initiative (RGGI) – a cap-and-trade scheme run by nine states in the US northeast and mid-Atlantic regions – has run into similar difficulties. Despite this, “AB 32 has not been that boring – in fact, it has been quite interesting to follow what has happened as the market takes shape”, said Lieberman. The potential of the Californian carbon market was “a stark difference” to the kind of malaise seen in the EU ETS and RGGI, he added. In part, the success of the Californian emissions market is due to the fact Carb sought to remedy some of the problems encountered by other schemes, say market participants. That included placing restrictions on the role of offsets in the scheme, setting a minimum and maximum price and attempting to stop carbon leakage – or the phenomenon whereby emitters simply move their emissions outside the state. Such measures were motivated by a mistrust of unregulated markets in the wake of California’s 2000–01 energy crisis, said Ethan Ravage, west coast lead at the Geneva-based International Emissions Trading Association (IETA). “In the case of California, everybody has long memories of what happened in 2000 and 2001. They remember what happened with [Houston-based] Enron and they don’t want price spikes in environmental markets that are going to affect consumers, so they’ve actually done a fair amount of work in setting reserve prices in the auctions so there’s a de facto floor and ceiling.” However, the way the scheme has been implemented has given rise to a range of legal challenges – and it is thought that more could follow. From the scheme’s inception, only electricity generators and other major static sources of emissions, such as refineries, are required to buy CCAs. The industries covered by the system would be expanded, Ravage noted, with transportation becoming included in 2015. “As you wait for every milestone to be achieved, there are groups in the background on the extreme left and extreme right with lawsuits tucked in their back pockets,” he said. “There are challenges around whether the state has the authority to hold auctions as opposed to having a tight allocation of allowances; whether it has the authority to regulate out-of-state power; and whether it has the authority to regulate something called resource shuffling, where you just change the way power is dispatched into the state.” But despite the existence of such threats – and the potential impact they might have on prices – panel participants agreed the best strategy energy firms could follow was to simply comply with the scheme. “We hear many stories about lawsuits that are written and ready, just waiting for somebody to file. But we don’t really have a choice – we have to live with the rule,” said Matthew Suhr, director of market analysis at Calpine. On April 19, Carb voted in favour of rules that will see California’s emissions market link up with that of Quebec from January 1, 2014. Continue reading
China’s Carbon Market Unlikely To Go Global For Decades
May 16, 2013 China, the world’s largest greenhouse-gas emitter, probably won’t import carbon credits for two decades as global diplomats craft a new emissions market that will increase supply, the nation’s climate negotiator said. Using offsets from outside China in that period is an “unlikely scenario,” Su Wei said in an interview in Bonn earlier this month. “Rather, internally we will have a lot of offsetting credits.” United Nations envoys are seeking to put together a new carbon market as the world negotiates a climate-protection agreement to take effect around 2020. The need for greenhouse- gas action may surge by then, when global emissions will probably exceed by at least 18 per cent the limits scientists have said will keep temperatures from rising 2 degrees Celsius, the UN estimated in November. “We are not very hopeful that we’ll see a global agreement over the next few years” that will increase demand, said Albrecht von Ruffer, Hamburg-based managing partner of Nserve Environmental Services GmbH. While China, South Korea and California are building or have installed carbon markets, “we don’t expect them to allow meaningful volumes of imports,” he said in a May 13 phone interview. The European Union is due to publish data today showing which emission credits were used by factories, power stations and airlines last year. Excess supply Certified Emission Reduction, or CER, offsets are created from carbon-reducing projects in developing countries under the Clean Development Mechanism, the biggest UN market by supply. Emission Reduction Units are from developed nation projects under the UN’s Joint Implementation mechanism. Supplies from both programs were at 2.1 billion tons as of May 14, according to data from the website of the UN Framework Convention on Climate Change. That’s more than the 1.7 billion tons allowed for compliance in the EU carbon market in the 13 years through 2020, according to that market’s rules. CERs for December have jumped 48 per cent so far this month, amid buying by EU emitters for compliance in the world’s largest carbon market. They rose 1 cent, or 2.6 per cent, to settle at 40 cents a ton on ICE yesterday in London. Waning demand for UN credits drove prices 90 per cent lower in the past year, according to ICE Futures Europe in London. New market A new market might encourage installation of the latest emissions-cutting technology in developing-nation industries, said Artur Runge-Metzger, the EU’s lead negotiator. The plan, still being put together, would stimulate nations to enact policies requiring industries to cut emissions, Runge- Metzger said May 2 in an interview in Bonn. For instance, a facility in the waste-management industry may get credits for implementing technology that’s even more advanced than set out in a government policy. “That may be the part that is going to be credited,” Runge-Metzger said. “You don’t have to go project by project, or waste-management site by waste-management site.” Crediting would result from a monitoring system that’s industrywide rather than project-specific, he said. Under the Clean Development Mechanism, each project must win registration from UN-overseen regulators and monitor its own emission reductions. ‘Not attractive’ A new offsetting market is “not attractive” to China, Su said in a May 2 interview in Bonn. Nations need tighter greenhouse-gas limits to spur consumption of credits, he said. “If there are no ambitious targets, there will be no demand,” he said. “So what’s the purpose of starting a new market mechanism?” Carbon markets are needed to encourage clean technology and protect the climate, according to Norway, a country that is buying offsets. “We believe the carbon markets will be very important in the years going forward,” Kjetil Lund, an Oslo-based deputy minister in the nation’s finance ministry, said in a May 7 phone interview. “We’re not happy with the very low prices.” Nserve, founded in 2003 before the EU’s market began, also is buying selected offsets, favoring those that may be alternatively marketed to companies and people who wish to voluntarily cut their emissions, von Ruffer said. That’s because there’s still not enough certainty about the future of international regulated markets, he said. “I wouldn’t build a business on this hope at the moment.” Read more: http://www.smh.com.a…l#ixzz2TSOXbVhd Continue reading
High Demand For Timber Is A Boom Waiting To Happen
Despite our being in the depths of a global economic recession , timber has never been in greater demand for use both in construction and as an energy source. Since our ancestors first learnt to use fire, make spears and build rudimentary dwellings, wood has been the principal material used to improve living standards. Timber has always played an essential role in the development of civilisation for it is a unique material with countless applications. The recent development of more sophisticated timber products has been rapid and it seems only a few years since I was offered sawdust for free to use as cattle and horse bedding. But now, every speck is required for the manufacture of wood pellets for fuel. While some problems have occurred with small home heating pellet units, the savings compared with purchasing oil or electricity are huge for the larger industrial units heating swimming pools, hospitals, hotels and other high-energy applications which all require fuel throughout the year. Prices for wood are going through the roof and the price of hardwood from Western Canada has risen by approximately 60pc since the end of 2011. The use of wood chip and logs for heating has also grown dramatically. The big question now is where will all this timber come from? Just one power station could get through an entire year’s supply from the private woodland sector if burning timber alone. Laminated beams and arches can now span greater distances than traditional wooden beams without the use of supporting columns. These beams have been used in the construction of bridges and even sports stadia and, being lighter than steel or concrete, are easier to transport and erect. Mixed species woodland has numerous advantages including increased protection against disease. The Pro Silva organisation hosted a field trip to Rahin Woods near Kinnegad recently where we saw mixed species woodland with some fine oak planted in the 1930s growing alongside beech and some assorted species of conifers. Leading the event was Phil Morgan, president of Pro Silva Europe. Continuous cover woodland management has many attractions for owners of farm forests and is a system I hope to apply to my own woods for its benefits have already been proven in many countries. Forestry in Ireland is still in its infancy and we have a lot to learn from our European counterparts. Continue reading
