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Briefing date 07.07.2022
Europe will count natural gas and nuclear as green energy in some circumstances

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Europe will count natural gas and nuclear as green energy in some circumstances

The European Parliament has backed a proposal “to keep some specific uses of natural gas and nuclear energy in its taxonomy of sustainable sources of energy”, CNBC reports. It says the EU “taxonomy” defines “‘environmentally sustainable economic activities’ for investors, policymakers and companies”. Reuters says lawmakers “thr[ew] out an attempt to block the law that has exposed deep rifts between countries over how to fight climate change”. The vote “paves the way for the EU proposal to pass into law, unless 20 of the bloc’s 27 member states decide to oppose the move, which is seen as very unlikely,” the newswire adds. It quotes EU commissioner for financial services saying it is “a pragmatic proposal to ensure that private investments in gas and nuclear, needed for our energy transition, meet strict criteria”. The Guardian covers the news with the headline: “‘Putin rubbing hands with glee’ after EU votes to class gas and nuclear as green.” It quotes a series of thinktanks and campaigners criticising the move, including one that says: “The EU has now set a dangerous precedent of low ambition for other countries and jurisdictions to follow.”

The Financial Times says the proposal “followed months of heated debate over the inclusion of gas and nuclear in the EU’s financial labelling ‘taxonomy’”. It adds: “campaigners said the law discredits EU efforts to establish itself as a global leader on climate policy”. The paper explains: “The [European] commission has said that gas and nuclear will only be considered green if they are used to transition away from dirtier fossil fuels such as coal and oil. Gas projects should only be considered if direct emissions are limited and they switch to fully renewable power by the end of 2035, according to the legal text. Nuclear power may only be funded if it adheres to certain standards for the disposal of radioactive waste. Several financial institutions including the European Investment Bank, the EU’s lending arm, have already said they are likely to ignore the gas and nuclear designation.” It adds that the European Commission had fuelled controversy over the vote by “coupling gas and nuclear together in one legal act as a compromise between pro-nuclear French and pro-gas German contingents in Brussels…several MEPs said they approved of nuclear as a transitional fuel and not gas, but the construction of the legal act would force them to vote in favour of both”.

Politico says the “contentious plan” is set to trigger “angry investors and a potential flurry of lawsuits”. It adds: “Brussels has repeatedly come under fire for the proposal to include gas and nuclear in its list of sustainable investments – from scientists, sustainable investor groups and the Commission’s own finance advisers, who argue the rules will instead divert money from truly green projects to prop up legacy industries and allow emissions to rise further.” Associated Press says the proposal “looks set to trigger legal challenges”. The New York Times reports of the proposal: “Critics said it would lock in and prolong Europe’s reliance on fossil fuels, while the measure’s proponents, including in the European Commission, the EU executive arm that drafted it, said it was part of a pragmatic approach to the transition to renewable energy, especially as Europe seeks to wean itself off Russian fuel imports in the wake of the invasion of Ukraine.” Climate Home News also has the story.

Several outlets, including the Hill, quote climate activist Greta Thunberg taking to Twitter to call the proposal “hypocrisy”. BusinessGreen quotes the European Environmental Bureau calling it “institutional greenwashing”. The Independent says campaigners labelled the decision “catastrophic”. EurActiv says French energy giant EDF called the vote “welcome” for future nuclear plans.

UK renewables subsidy auction secures 11GW of new capacity
Reuters Read Article

The UK government has awarded “contracts for difference” (CfDs) at auction for nearly 11 gigawatts (GW) of renewable energy capacity, Reuters reports. It says the total was “almost double the capacity achieved in the previous round of auctions”. Bloomberg says the auction also saw record-low prices for offshore wind “helping reduce the country’s dependence on volatile fossil fuel prices and easing future bills for homes and businesses”. Press Association also has the story. On Twitter, Carbon Brief’s Simon Evans posted analysis showing the newly awarded CfD projects would be able to generate around 42 terawatt hours (TWh) of electricity, roughly 13% (one eighth) of current UK demand, at prices some four times below the current cost of electricity from gas.

UK: Government unveils Energy Security Bill, as crisis grips Number 10
BusinessGreen Read Article

The UK has introduced a major piece of energy legislation under the shadow of a wave of resignations from prime minister Boris Johnson’s government, BusinessGreen reports. It says the Energy Security Bill includes “a wave of new measures…to bolster UK energy security, curb fossil fuel imports and accelerate the transition to a clean energy system”. The publication adds that there are 26 “measures” in the bill, including “long-awaited proposals to introduce a new policy framework designed to enable predictable returns for companies investing in new carbon capture and storage (CCS) hubs and hydrogen production capacity” as well as plans for what the Bill calls a “market-based mechanism for the low-carbon heat industry to step up investment and lower the cost of electric heat pumps”. (The Daily Express reports that there is a shortage of trained heat pump installers.)

Bloomberg says the Bill “leaves [the] door open” to the UK extending the life of its remaining coal-fired power stations: “The government last year pledged to close all of Britain’s unabated coal-fired power plants by October 2024 – and said it would enshrine that in law as soon as possible. But there’s no mention of the date in an energy bill published [on] Wednesday. A spokesperson for the Department for Business, Energy and Industrial Strategy said the government remains committed to the 2024 target, despite it not appearing in Wednesday’s bill.” Reuters also covers the Bill, reporting that it will establish a new independent system operator to coordinate and plan the country’s energy system.

Meanwhile, the Guardian reports that the Drax power plant in Yorkshire has agreed “has agreed to extend the life of its coal-fired electricity generation units through this winter as the government scrambles to shore up Britain’s energy supplies”. It adds: “The business secretary, Kwasi Kwarteng, said the operator of the Yorkshire power station had agreed to push its planned closure back by six months until March.” Reuters says Drax will provide a “winter contingency”, only operating under instruction from the system operator – with the coal units not generating commercially.

Separately, DeSmog has an article titled: “What can we expect on climate from Boris Johnson’s new cabinet,” including the new chancellor Nadhim Zahawi. A second DeSmog article says Zahawi “has oil industry ties that span the globe”. The Independent has an analysis piece looking at the prospects for climate action under Johnson’s successor, asking: “Would a new Tory leader take necessary action on climate?” It looks at the voting records of the “runners and riders” to replace Johnson. The Guardian reports: “Anti-green MP Steve Baker considering running for PM if Boris Johnson goes.” (As Carbon Brief was going to press, BBC News and Sky News were reporting that Johnson would resign today.)

In related comment, the Sunday Telegraph’s climate-sceptic editor Allister Heath writes in the Daily Telegraph: “The tragedy of the PM is he used his Brexit triumph to impose socialism and eco-extremism on the UK.” Long-standing opponent of climate action Nigel Farage, a right-wing Brexiteer who never won a personal political mandate in the UK despite repeated attempts, writes in another Daily Telegraph comment: “Were a leadership election to be held this summer, candidates who believe in business and who understand economics could promise not to increase corporation tax by 30% in a few months’ time. They could state their intent for the UK to be self-sufficient in energy – a policy that would be hugely popular among enormous numbers of both Conservative and Labour voters. They could pledge to sort out the Channel crisis, to take Britain out of the European Court of Human Rights, and to tackle the cancer of wokeism. In short, they could redefine Conservatism in the 21st century and use this moment to restore its fortunes.”

In other UK policy news, the Press Association reports that the government has delayed a decision on a proposed new coal mine in Cumbria “amid political turmoil”. A second Press Association article previewing the decision, which had been expected today, quotes campaigners saying approving the mine project would be “a monumental mistake”.

Germany′s Scholz: Ukraine war calls for faster energy transition
Deutsche Welle Read Article

Deutsche Welle reports that German chancellor Olaf Scholz wants to “turbo charge” renewable power and “limit Russia’s influence on energy policy”. The outlet quotes Scholz speaking at an event hosted by the renewable energy association: “Energy policy is not just a question of price. Energy policy is also a security policy…That’s why we now have to turbo charge the expansion of renewable energy”. Reuters also has the story. However, Clean Energy Wire reports that the German government agreed on over 20 laws and ordinances ready to be voted on today, which include reaching 80% renewables by 2030, but the goal of a near 100% greenhouse-gas neutral electricity grid by 2035 was missing.

Meanwhile, Der Spiegel reports that a steep rise in energy prices could lead to a recession in Germany, warns economy minister Robert Habeck, noting that even a credit crunch is possible. The outlet quotes Habeck saying that “social peace in Germany is being severely challenged and strained”. The Daily Express reports on this matter that “almost every second retailer [in Germany] expects a decline in sales in 2022”, according to a survey by the German retail association. The article notes that “retailers cite rising energy costs and high inflation, affecting businesses and citizens”.

Finally, Süddeutsche Zeitung reports that German coalition factions agreed on lowering the minimum energy standards for new houses planned by Habeck. The piece notes that “the stricter specifications for saving energy should be achieved via the building services, for example, with the help of solar modules on the roof”.

Failure of US climate leadership compounds fears for COP27 summit
Financial Times Read Article

Major global emitters including China “are calling into question the US’s commitment to tackling climate change, following legislative setbacks capped by the Supreme Court ruling against federal regulation of carbon emissions”, the Financial Times reports. It says the US “failure to implement its signature climate policies is weighing on the outcome” of the COP27 UN climate summit, due to take place in four months in Egypt. The Guardian reports under the headline: “Global dismay as supreme court ruling leaves Biden’s climate policy in tatters.” It says the ruling “is not fatal to US climate targets”, according to analysts at Rhodium, but quotes a partner at the firm saying: “Congress acting on climate was important before this decision, now it’s even more important.”

For the Financial Times, US investment and industries editor Brooke Masters has a comment piece saying the Supreme Court ruling “puts regulators in handcuffs”. Masters writes: “Though fossil fuel companies and conservative business groups have hailed the EPA decision as a victory, they should be careful of celebrating too much. Uncertainty makes it hard for businesses to plan and regulators who are blocked from making new rules often try to change practices by bringing enforcement cases instead.” She adds: “The Supreme Court decision also puts big investors in the hot seat on climate change. Reducing carbon emissions is vital but expensive. Many companies, focused on quarterly earnings, simply will not do it unless someone holds their feet to the fire. The results could be catastrophic both for long-term profits and the planet as a whole.”

China extends record imports of Russian oil into June, cuts Saudi supply – trade
Reuters Read Article

Reuters reports that China “extended record imports of low-priced Russian crude oil” into June despite a “lockdown-induced slackening” in its total crude oil imports. Citing “tanker trackers and traders”, the newswire says the imports are “squeezing out supplies” from the Middle East and West Africa. It adds that Russia “remained China’s top supplier for the second month in a row, surpassing Saudi Arabia”, citing “tanker tracking specialists” Vortexa, Kpler and Refinitiv. Additionally, Bloomberg writes that Russia has “pocketed $24bn” from selling energy to China and India in just three months following its invasion of Ukraine, adding that the move shows “how higher global prices are limiting efforts by the US and Europe to punish President Vladimir Putin”.

Meanwhile, the state-run industry newspaper China Energy News, citing a report by the state broadcaster CCTV, writes that the crude oil pipeline in Shandong Port was ”put into operation” on Monday, marking the “official start” of the first 20m-tonne oil pipeline built during China’s 14th five-year plan. Separately, China Electric Power News reports that in the second half of June, power coal and coking coal prices were sharply lower nationwide. The state-run industry newspaper adds that, across the country, anthracite prices were stable and national coke (secondary metallurgical coke) fell by “187.8 yuan ($28)/tonne” compared with the previous period. According to a separate report by the outlet, a 50MW (megawatts) solar thermal power plant in Delinghai, Qinghai province has been in “continuous operation for 11 months” with a cumulative power generation of “146GWh (gigawatts hours)”, making it the “first” tower-type molten salt storage solar thermal power plant “in the country and the world whose annual actual power generation fully meets and exceeds the design level”.

Finally, an opinion piece by Adam Minter published by Bloomberg – titled, “Pollution’s impact on China’s crops is worse than imagined” – says that China is “turning back to low-cost coal to boost its ailing economy”. He adds: “It’s an understandable reaction to the toll caused by Covid lockdowns. But it will come with a steep price for the environment and the health of its citizens.” Citing a peer-reviewed study, he writes that the burning of fossil fuels inhibits crop growth worldwide: “The impact on China’s crops is greater than on any other region surveyed, and could account for at least a 25% decline in winter crop yields”. He mentions a report published by Bloomberg last month which said China is “contemplating a ban on further placement of solar panels on farmland” with the aim of boosting food production, even if it comes at the expense of the country’s renewable-energy goals.

French state plans to take full control of EDF
Financial Times Read Article

The French government plans to take full control of energy giant EDF, the Financial Times reports, saying the “nuclear energy specialist…has been grappling with high debt, production outages and conflicting demands from its state shareholder as it gears up to try to process its biggest orders for new reactors in decades”. The paper adds that a planning decision on EDF’s proposed £20bn new nuclear plant at Sizewell in Suffolk is due “by the end of Friday”. Reuters says the move “would give the government more control over a restructuring of the debt-laden group while contending with a European energy crisis”. It continues: “EDF, in which the state already owns 84%, is one of Europe’s biggest utilities and sits at the heart of France’s nuclear strategy, which the government is banking on to blunt the impact of soaring energy prices exacerbated by the prospect of an abrupt halt to Russian gas supplies.” The Guardian reports: “The French state holds an 84% stake in EDF, one of the world’s biggest electricity producers, but the company is facing delays and budget overruns on new nuclear plants in France and Britain, and corrosion problems at some of its ageing reactors, which have heavily hit its shares price in recent months.”

Environmentalists sue Dutch airline KLM for 'greenwashing'
BBC News Read Article

Environmental groups are suing the Dutch airline KLM for “greenwashing”, BBC News reports: “They argue that KLM adverts and [its] carbon-offsetting scheme create the false impression that its flights won’t make climate change worse.” The broadcaster adds: “If the case in Amsterdam is successful, KLM will have to withdraw the advertising, stop any similar advertising in the future and issue corrections.” Politico reports: “While several brands, including in the energy, clothing and food sector, have been hit with greenwashing lawsuits, today’s lawsuit marks the first time an airline is targeted.” Reuters says the move is “part of rising tide of climate litigation”. Associated Press also has the story.


Africa is not Europe's gas station
Mohamed Adow, Project Syndicate Read Article

In a comment for Project Syndicate, Mohamed Adow, director of thinktank Power Shift Africa, criticises Italian and German politicians for attempting to secure new gas deals with African countries. He says: “Germany and Italy are telling Africans that we should saddle ourselves with fossil-fuel infrastructure that will soon become a draft on our economies and propel us toward climate disaster. We must respond with a firm no, and instead demand that European countries support us in the development of renewable energy systems.”

In related news, Reuters reports calls from the African Development Bank for more climate finance for the continent.


On the acceptance of intergenerational climate legacies: A comparison of Canada and Japan
PLOS Climate Read Article

A new study investigates public acceptance of intergenerational climate justice and “willingness to compensate those negatively impacted by previous generations”. With participants from Canada and Japan, the researchers find that “Canadians were more likely to accept an inheritance”, but they were also “more likely to equivocate, in acceptance, if it entailed obligations than the Japanese”. Among those who accepted the inheritance, “Japanese were more generous in settlement of previous generation’s obligations”, the study finds. It also notes that resistance to compensation “diminished with the awareness about the broad scope of intergenerational climate legacies that the current generation enjoyed”.

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