Issue: 12 Wednesday, 14 December 2016
Dear ,
We are pleased to present the last ICAP newsletter of 2016, which brings to you the latest developments in emissions trading around the world and activities here at ICAP.
For more information on operating cap-and-trade programs and those under development or consideration around the world, please visit the ICAP Interactive ETS Map on the ICAP website. It is updated regularly as new information becomes available.
As a reminder, the ICAP Newsletter is also available in Chinese, Spanish, French, Korean and Russian. Sign up here and select your desired language in the drop-down menu*.
Sincerely,
On 9 December 2016, Canada’s First Ministers released the Pan-Canadian Framework on Clean Growth and Climate Change, which all provincial and territorial governments have signed except for Saskatchewan. The Framework builds on Canadian Prime Minister Justin Trudeau’s announcement of a national carbon pricing framework in October. By 2018, all Canadian provinces and territories need to introduce carbon pricing. Jurisdictions can either implement a price-based system (e.g. a carbon tax) or an ETS, provided the ETS cap is in line with: (a) Canada’s national emissions reduction target of 30% below 2005 levels by 2030 and (b) the reductions expected from provinces with a direct price on carbon. In jurisdictions which opt for a carbon tax, the carbon price should start with a minimum of CAD 10 per ton (EUR 6.80) in 2018, rising by CAD 10 annually to reach CAD 50 (EUR 34) per ton by 2022. If neither a price-based system nor an ETS is in place by 2018, the national government will impose a carbon price in that jurisdiction. Pricing is to be applied to a common and broad set of sources to ensure effectiveness, and the policy will be revenue neutral for the national government. All revenues generated will remain in that province or territory.
Read more…
Under the Ontario ETS, which will launch in 2017, regulated entities will be able to cover up to 8% of their compliance obligation by using offset credits. On 15 November 2016, the Ministry of Environment and Climate Change released a draft offset regulation for the upcoming system.
Thirteen offset protocols will be developed between 2017-2018, with the first three focusing on ozone-depleting substance, mine-methane capture and landfill capture. The following ten protocols will develop credits for the agriculture and forestry sectors. Additional protocols can be approved by the Minister for Environment and Climate Change provided emissions reductions targeted are real, permanent, additional, quantified and enforceable. According to the draft regulation, emissions reduction projects that began on or after 2007 will be eligible for offset credit generation.
On 21 November 2016, Nova Scotia Premier Stephen McNeil announced the implementation of a cap-and-trade program in 2018, which will focus on reducing emissions within the province and encouraging local investments. It is also in line with the requirements of the federal carbon pricing plan recently announced by the Canadian government. According to the Premier’s announcement, Nova Scotia’s cap-and-trade program will cover the power, transport and building sectors. Initially, most allowances will be allocated for free and the use of offsets will be confined to emissions reduction projects within the province.
Nova Scotia, one of the smaller maritime provinces located on the East Coast of Canada, emitted 19 Mt CO2e in 2012, making up about 2.7% of Canada’s national emissions. The province has already made ambitious strides in climate policy, primarily through emissions caps on the electricity sector and renewable portfolio standards. By 2014, Nova Scotia had already reduced its emissions by 17% below 1990 levels, exceeding its 2020 reduction target of 10% below 1990.
On 2 December 2016, the Californian Air Resources Board (CARB) released a discussion draft for public consultation of parts of the 2030 Target Scoping Plan Update. CARB is the agency overseeing the implementation of California’s climate policy. The scoping plan outlines options for reaching California’s climate target of 40 percent emissions reductions by 2030 from 1990 levels, drawing on economic modeling to propose and examine the adequacy of different policy mixes both with and without a cap-and-trade program.
Three scenarios to achieve the 2030 goal are outlined in the draft: (1) a continuation of the cap-and-trade program after 2020; (2) scaling up existing actions (without the cap-and-trade program) and additional policies for transport, industry and energy; or (3) establishing a carbon tax. Read more...
Less than a year ahead of the scheduled start of the national ETS in China, the southeastern province of Fujian will launch its own regional ETS. In early December, the Fujian Development and Reform Commission (DRC) released a series of documents providing details of its ETS, including rules and guidelines on MRV, allocation, offset usage, market management and trading (Chinese). A preliminary general legal basis (Chinese) was also released in September 2016.
The ETS will cover 277 companies from 25 sectors whose annual energy consumption is above 10,000 tons of coal equivalent in any year between 2013-2015. These include all eight sectors that will be covered by the national ETS, as well as the local ceramics industry and additional service sector companies. No official starting date has been published yet, but the first compliance cycle will cover emissions from 2016 and will end on 30 June 2017.Read more...
In late September 2016, the Beijing DRC issued the list of entities and reporting companies (Chinese), as well as the allowance allocation plan for 2016 (Chinese). There are a total of 947 covered companies (Chinese) with annual emissions equal to or more than 5,000 t, with an additional 582 reporting companies (Chinese) with annual emissions of 2,000-5,000 t per year. Although the allocation method will remain the same, the emissions reduction factors are stricter.
On 18 September 2016, the Shenzhen DRC released its working plan for the fourth compliance year, including a list of new companies and the 2016 allocation plan (Chinese). The Shenzhen ETS covers a total of 824 entities, including 246 new entrants. Benchmarking is applied to the water, power and gas sectors based on sectoral historical carbon intensity while grandfathering based on entities’ historical carbon intensity is applied to port and subway sectors, public buses and other non-transport sectors.
On 9 November 2016, the Shanghai DRC also published an updated list of covered entities and the 2016 allocation plan (Chinese). The Shanghai DRC announced that the cap for 2016 is 155 Mt CO2, which represents a 3% decrease compared to 2015. At the same time the number of participants increased from 191 to 315, and as of the fourth compliance year, Chinese offset credits (CCERs) can only be used to cover 1%, rather than 5%, of the compliance obligation.
On 6 December 2016, the South Korean government released its Basic National Roadmap for Greenhouse Gas Reductions by 2030. The roadmap outlines a key role for carbon markets in reaching the country’s INDC target of reducing emissions 37% below business as usual (BAU) levels by 2030. Based on the government’s BAU forecast of 851 Mt CO2e of emissions in 2030, South Korea must reduce 315 Mt (6%) below 2013 levels. The 2030 climate roadmap breaks down the national target to the sector level with the energy and industry sectors expected to deliver the major share of domestic reductions. In addition, around one third of the total reduction effort shall be met through international offsets.Read more...
CNY 50.50 (USD 7.31)**CNY 47.52 (USD 6.88)**CNY 12.30 (USD 1.78)**CNY 20.57 (USD 2.98)**CNY 19.81 (USD 2.87)**CNY 34.85 (USD 5.05)**CNY 15.05 (USD 2.18)**
12.12.2016
Tanjiaoyi News Service (Chinese)
Carbon News New Zealand
In mid-February 2017, ICAP will release the fourth edition of the ICAP Status Report on ETS worldwide. The report will present key trends, figures and infographics on emissions trading, feature articles from policymakers and experts on the latest developments in their jurisdictions as well as factsheets on all systems in operation and under consideration. Once released, the report will be made available on the ICAP website.
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