Issue: 22 Monday, 03 June 2019
Dear ,
With 2019 already well underway, policymakers around the world are busy developing and reforming their domestic climate policy in preparation for 2020. ICAP is also busy preparing for several upcoming events aimed at bringing together diverse stakeholders to share their knowledge and experiences with carbon markets.
As always, we are pleased to share the ICAP newsletter with you, a quarterly summary of the latest developments in emissions trading around the world and an update on ICAP activities. For more information on cap-and-trade programs in force and in the works around the world, please visit the ICAP Interactive ETS Map. It is updated regularly as new information becomes available. In case you missed it, we also released our sixth annual Status Report providing a comprehensive snapshot of the latest developments in ETS around the world.
Kind regards,
ICAP will host two events and an exhibition booth at the 3rd edition of Innovate4Climate (I4C), which takes place in Singapore from 4-7 June 2019. Both events will focus on the Asia-Pacific region and future cooperation among carbon markets: • Experience and future prospects of the Korean Emissions Trading System – together with the Korea Environment Corporation (KECO) and the Korea Environment Institute (KEI), ICAP will host a workshop looking at the recent developments and outlook of the Korean Emissions Trading System (KETS). Discussion will also touch on the prospects of greater regional cooperation in carbon markets and Korea’s potential role. Where/When: I4C conference room – Simpor Jr 4913 – Asia Spotlight, on Wednesday 5 June between 10:45 and 11:45.• Carbon markets in Asia-Pacific: opportunities for cooperation – ICAP will also hold a side event in the margins of I4C, together with the Asia Society Policy Institute. Please join us for this event exploring the opportunities and challenges of cooperation on carbon markets. Where/When: Jasmine Ballrooms Level 3 (room 3811 for the workshop; room 3812 for the reception), Mariana Bay Sands, Singapore, on Wednesday 5 June from 15:00 to 19:00.There is still some capacity for additional participants. If you are interested, please RSVP by sending an email to Alexander.Eden@icapcarbonaction.com.Read more...
On 3 April 2019, the Ministry of Ecology and Environment (MEE) of China released the Interim Regulations on the Management of Carbon Emissions Trading (Draft for Comment) (Chinese) for public consultation. The draft regulation represents a major step for MEE since it took on responsibility for climate policy (including ETS development) about a year ago. Passing an ETS regulation at national level is one of the key tasks needed to prepare for China’s national ETS in 2019.The draft regulation outlines several key design factors: Governance of the national ETS will follow a two-tier structure, with responsibilities shared between the central and regional governments. Transparency will be ensured with MEE to publish an updated list of covered entities annually and report on allowance surrenders and market transactions. Regarding MRV and enforcement, the draft indicates an annual MRV cycle, with covered entities able to choose verifiers from an MEE approved list. Furthermore, it outlines procedures for non-compliance, as well as penalties for covered entities, verifiers, trading entities, and government agencies for misconduct.
On 22 March 2019 the Swiss Council of States (the upper house of the Federal Assembly of Switzerland) and the Swiss National Council (the lower house of the Federal Assembly of Switzerland) gave their final approval for linking the Swiss Emissions Trading System (ETS) with the European Union ETS. The EU Parliament and Council already approved the agreement in early 2018. In a next step, Switzerland and the EU have to ratify the linking agreement so that the link can become operational as of 1 January 2020.
On 16 May 2019, the New Zealand government proposed a second tranche of reforms to the New Zealand Emissions Trading Scheme (NZ ETS). The reforms would enact the following changes: phasing out the fixed-price option to be replaced with a cost containment reserve, allowing a price floor, preparing for auctions, strengthening compliance, publishing more detailed public data, and establishing a separate market governance work program.Before this, on 27 March 2019 New Zealand announced changes to the NZ ETS intended to simplify accounting and improve operations for forestry sector participants. The changes will see “averaging” introduced for all forests newly registered in the NZ ETS from 2021, with the option of those registering in 2019 and 2020 to adopt the new accounting method. Together with the first set of changes announced in December 2018 and the Zero Carbon Amendment Bill announced in May 2019, these reforms are intended to pass into law later this year in a bill amending the Climate Change Response Act 2002, which serves as the legislative framework for NZ ETS.Read more here and here.
On 2 May 2019, Virginia Governor Ralph Northam signed a budget bill that contains restrictions on the state’s participation in the Regional Greenhouse Gas Initiative (RGGI) and in the Transportation Climate Initiative (TCI). This may affect the state’s implementation of its ETS.While the regulation for Virginia’s ETS envisages joining RGGI, the Republican majority in the Virginia legislature added two key provisions to the budget bill. The first provision requires approval from the legislature for any state funding to support Virginia’s participation in RGGI. The second provision restricts the use of any revenues stemming from membership in RGGI or the TCI.As Virginia’s ETS regulation was explicitly designed for the state’s ETS to join RGGI, the restrictions make the implementation of the regulation difficult. Despite the budget law, the state’s Department of Environmental Quality (DEQ) on 1 May 2019 finalized the ETS regulation, which will be published in the Virginia Register of Regulations on 27 May 2019 and take effect 30 days after.Read more here and here.
On 10 May 2019, the Republic of Korea named two ‘market makers’ to its national Emissions Trading System (KETS), which began monthly auctions of allowances in January 2019. The move aims to stimulate liquidity by bringing additional sellers into the market. The Korea Development Bank and the Industrial Bank of Korea are officially designated market makers starting 10 June 2019, when they can begin trading on the market from a government-held reserve of five million allowances.Read more...
On 25 May 2019 the Ministry of Environment and Natural Resources (SEMARNAT) of Mexico released new draft regulations for public comment on the pilot phase of the national emissions trading system (ETS). The process originally began in October 2018 but was suspended to allow the incoming presidency to conduct new consultations. According to the draft, the purpose of the pilot is to help achieve Mexico’s climate targets in a cost-effective way; test the design of the system and allow for adjustments; allow participants to familiarize themselves with emissions trading and develop capacities; and generate a value for emission allowances and offsets. The pilot is scheduled to last 36 months, from 1 January 2020 to 31 December 2022.The draft outlines a range of design elements for the pilot phase, including regarding the scope, cap setting, reserves, allocation, auctions, policy interactions, flexibility instruments, banking, monitoring, and compliance.Read more...
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31.05.2019
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