Issue: 28 Friday, 18 December 2020
Dear ,
As we reach the last months of 2020, we still see the global COVID-19 pandemic impacting not only our public health and economies, but also the way we work. Our collaborations have been radically transformed, as remote and digital tools have become a part of our everyday life. Our daily meetings, teamwork, and conversations, at the core of efforts to share knowledge and build effective climate policy, are now mediated through the little camera at the top of our screens. While this takes new skills, and often a little more patience, we see this shift to digital collaboration as a positive development that not only enables us to continue our work but can potentially help us to connect in new and fruitful ways in the future. And though we are looking forward to seeing you all again in person, our digital collaborations will continue to keep us connected, and our policies can only become stronger for that.
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.All the best,
Next up in ICAP’s series ‘ETS for Policy Practitioners’, supported by the European Commission, is a webinar ‘Electricity Market Regulation and Emissions Trading’ to be held on 13 January 2021 at 2pm CET. While an ETS can be an efficient tool to reduce emissions, its performance depends on some preconditions. One main aspect is the setup and regulation of the electricity market. This webinar explores the conditions for an electricity market to respond to a carbon price and deliver emissions reductions. To register for the webinar, click here.
On 14 December 2020, the UK government confirmed that it will launch its own ETS starting 1 January 2021. The launch date of the UK ETS coincides with the end of the Brexit transition period, after which the UK will no longer be covered by the EU ETS. To ensure continuity for covered entities, the UK ETS will adopt several features of the EU ETS at least in the initial years of its operation. However, there are also notable differences, including a more stringent cap trajectory and a transitional minimum price. The new system will not be linked with the EU ETS at the launch date, but the government notes its openness to linking with a range of international partners. Read more here…
On 11 December 2020, European government leaders agreed to increase the bloc’s 2030 emissions reduction goal from 40% below 1990 levels to 55%. The EU leaders also invited the Commission to explore ways to strengthen the EU ETS and to propose a carbon border adjustment mechanism.This agreement aligns with the proposal of the European Commission in September 2020 to increase ambition for 2030 and revise the ETS in order to achieve carbon neutrality by 2050. Options to revise the ETS will be presented as legislative proposals by June 2021. The new 2030 target of at least 55% emission reductions as well as the 2050 net-zero goal will be adopted in the European Climate Law following negotiations between the Commission, the Council, and the Parliament, which supports a target of 60%. Read more here…
The Canadian government has released a plan to significantly increase carbon prices annually to 2030 as part of a wider proposal to put the country on a path to achieve net-zero emissions by 2050. Published 11 December 2020, “A Healthy Environment and a Healthy Economy” proposes increasing the Canadian price on CO2 by CAD 15 (USD 11.74) per year starting in 2023, rising to CAD 170 (USD 133) per ton in 2030. The price increases would be implemented through the federal mechanisms in the Pan-Canadian Framework, meaning they would be applied to the provinces and territories that have implemented an explicit price-based system, either through a carbon tax or a hybrid system comprising a carbon levy on fuels and an output-based pricing system (OBPS) for industrial emitters. The move would extend and raise annual price increases that are already scheduled through 2022. Read more here...
On 2 November 2020, the General Office of the Ministry of Ecology and Environment (MEE) issued two policy documents on the national ETS, establishing regulatory authority and specifying general rules for market operation and design. This was followed on 20 November, with an updated draft allocation plan for the power sector. Although the documents are still to be approved, they represent key policy developments for the Chinese national ETS and could pave the way for implementation in the first half of 2021.The most important of the policy documents, entitled “The National Measures for the Administration of Carbon Emission Trading (Trial)”, provides the legal basis for the upcoming national ETS. The National Measures include provisions for allowance management, emissions trading, MRV, compliance, offsets, supervision, and accountability. The second policy document, “The Administrative Measures for the Registration, Trading, and Settlement of the National Carbon Emission Rights (Trial)” is a lower-level regulatory document applying to allowance trade, which details aspects of allowance registration, trading, and settlement, as well as the functions of the responsible agencies. The draft allocation plan “2019-2020 National Carbon Emission Trading Cap Setting and Allowance Allocation Implementation Plan (Power Generation Industry)” is also essential to implement the national ETS. The draft continues with benchmarking as the main allocation method, with four distinct benchmarks for power generation that have been tightened since the last draft. Read more here and here...
On 25 November 2020, the Swiss Federal Council revised its CO2 Ordinance, the main piece of secondary legislation regulating the Swiss ETS. The revisions include changes to the system’s cap trajectory, benchmarks, and the use of offsets. The changes take effect on 1 January 2021 and are aligned with those envisaged for the EU ETS Phase 4, bringing the design of the newly linked systems closer together.Read more here...
On 17 November 2020, Vietnam’s National Assembly adopted the revised Law on Environmental Protection, a framework environmental law which gives a clear mandate to design a domestic emissions trading market and MRV system. The law authorizes the Ministry of Natural Resources and Environment (MONRE) to establish an emissions market, set a cap, and determine the method of allowance allocation, allowing for domestic and international offsets. Although the law enters into force on 1 July 2021, a timeline for ETS implementation has not yet been set.Read more here...
On 29 September 2020, the Republic of Korea approved the Korea Emissions Trading System (K-ETS) Phase 3 allocation plan, which will take effect next year and run until 2025. The reforms would see ETS emissions decrease by 4% in the third trading phase compared to Phase 2 alongside expanded coverage, increased auction shares, greater use of benchmarking in free allocation, and tightened power-sector benchmarks.Read more here...
The Netherlands is advancing plans for a carbon tax next year for industry installations already covered by the EU ETS. The legislation is designed to provide additional certainty on the carbon price trajectory and support the national emissions reduction target, which the government is concerned may not be achieved with only the price signal from EU ETS. The bill would establish a minimum carbon price starting at €30 in 2021 and rising by €10.56 each year to reach €125 by 2030. The tax would be calculated as the difference between the minimum price for that year and a benchmark EU allowance (EUA) price. When the benchmark price is above the minimum price, the carbon tax would not be levied. The proposal would also establish a system of tradable exemption rights assigned to liable entities based on EU ETS benchmarks. Read more here...
On 15 September 2020 Pennsylvania’s Environmental Quality Board (EQB) by a 13 to 6 vote adopted draft regulation for an ETS covering CO2 emissions from the power sector and joining the Regional Greenhouse Gas Initiative (RGGI) in 2022. With public comment periods and the state’s regulatory review process, this would put the state on pace to launch its ETS and its RGGI linkage by 2022. However, implementation of the regulation might depend on a potential legal challenge by the Republican-controlled state legislature. Read more here...
Chinese ETS Pilots:- Beijing- Chongqing- Guangdong- Shanghai- Hubei- Shenzhen- Tianjin- Fujian
CNY 75.68 (USD 11.58)**CNY 23.64 (USD 3.62)**CNY 28.45 (USD 4.35)**CNY 41.50 (USD 6.35)**CNY 27.75 (USD 4.24)**CNY 23.28 (USD 3.56)**CNY 25.00 (USD 3.82)**CNY 8.87 (USD 1.36)**
17.12.202017.12.202017.12.202017.12.202017.12.202017.12.202017.12.202017.12.2020
Tanjiaoyi News Service (Chinese)
KRW 30,500 (USD 27.89)**
CommTradeNew Zealand
If you no longer wish to receive this newsletter, click here:
International Carbon Action Partnership Secretariat Köthener Straße 2 D-10963 Berlin Germany
info@icapcarbonaction.com
Copyright © 2020 International Carbon Action Partnership (ICAP)
This email contains graphics, so if you don't see them, .
