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TODAY'S CLIMATE AND ENERGY HEADLINES

Briefing date 12.10.2021
Sunak considers rescue plan for UK sectors hit by energy crisis

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News.

Sunak considers rescue plan for UK sectors hit by energy crisis
Financial Times Read Article

UK chancellor Rishi Sunak is considering a rescue plan to help the steel industry and other energy-intensive sectors through a winter of high gas prices, reports the Financial Times, just “a day after Treasury insiders said no such proposal was being discussed”. According to “people close to the discussions”, business secretary Kwasi Kwarteng submitted a formal proposal to Sunak yesterday, which includes loans and other support worth in the low hundreds of millions of pounds, the paper explains. It continues: “Downing Street said ministers were looking at ‘what can be done to mitigate’ the effects of spiralling energy prices. On Monday, an ally of the chancellor said Sunak had ‘an open mind’ on the issue.” BBC News says details of the plan “have not been disclosed, but they are thought to focus on a temporary solution to high prices”. The i newspaper notes that the move comes “after Downing St was forced to intervene in the row” between the Treasury and the Department for Business, Enterprise and Industrial Strategy (BEIS), “with the prime minister’s spokesman insisting that the two departments were in discussions over a plan”. Sources at BEIS “insist Treasury officials have been involved all along, even if Sunak himself was not directly taking part”, the Guardian says, adding that “No 10 appeared to back this account on Monday morning”. A separate Guardian analysis piece says the “row over support for businesses hit by the energy crisis laid bare deeper tensions at the top of government”. It adds: “With sky-high energy prices expected to last for months, Sunak is likely to be highly reluctant to put public money on the table. It is hardly surprising, then, that he has become increasingly irked with Kwarteng, who appears to have been signalling to desperate business groups that he would love to help them but is hamstrung by the parsimonious Treasury.” The Guardian also has a profile of Kwarteng, which leads with the story of when, as a student, he represented Trinity College Cambridge on the BBC quiz show University Challenge and, after buzzing in to answer a question, declared: “Oh fuck, I’ve forgotten.“ The Guardian reports that No 10 has had to defend the decision of prime minister Boris Johnson to take a holiday in Spain this week during the energy crisis. A spokesperson said that Johnson “continues to be in charge as is always the case”, adding: “He is in regular contact with ministers and No 10. He is also continuing to take calls, particularly in the run-up to COP26.” The Times reports that “Johnson interrupted his Spanish holiday yesterday to appeal to India and Saudi Arabia to adopt more ambitious climate-change goals in the run-up to next month’s summit in Glasgow”.

Meanwhile, the i newspaper reports that “factory shutdowns and higher operating costs in the industries worst hit by soaring gas prices could ruin their green efforts weeks” ahead of COP26. Paper and steel manufacturers are among the industries to have warned that “high wholesale gas prices could lead to more frequent and longer closures, leaving decarbonising efforts under threat as restarting operations is more energy intensive”, the outlet explains. The Press Association reports that “one of Europe’s largest glass plants has predicted its energy costs could rocket by £60m per year as a result of rising costs”. And the Independent says the UK “could be forced to rely on other nations for key nuclear and defence components unless ministers offer heavy industry an energy bailout”. The outlet explains: “Without fresh funds factories could be forced to halt production of critical inputs such as high-tech ceramic coatings, steel components and bespoke glassware, according to government and industry sources. Such products are used in a range of high security environments, including nuclear reactors, laboratories, ships and submarines.” Bloomberg reports that “UK power prices rose after a coal power plant switched on Monday to make up for a shortfall in wind generation and limited flows on two power cables to Ireland”. And the outlet also reports that the UK government says it is “on track to intervene in its national carbon market in December if prices remain elevated through November”.

Elsewhere, a Sun “exclusive” reports that “tone-deaf” ministers will next week release a “controversial heating and boiler strategy” that will “seek to make electricity cheaper and gas more expensive over the next 15 years”. The paper continues: “The PM will argue that electricity – which is the cleanest it has ever been – is kept artificially expensive, hitting efforts to get people to switch to electric cars and central heating. But insiders say it will take years of listening exercises and legislation before the green levies currently slapped on electricity can be moved over to gas bills.” The strategy will also “ban new gas boilers being installed after 2035, with Brits handed subsidies of between £4,000 and £7,000 to install expensive electric heat pumps”, the paper says.

In other UK news, the Guardian reports on “the biggest analysis of policy preferences ever published”, which shows that the public “backs a carbon tax on polluting industries, higher levies on flying and grants for heat pumps in order to tackle the climate crisis”. And BBC News reports that the government is looking at how to tackle “embodied carbon” as part of an upcoming building strategy.

COP26: World poised for big leap forward on climate crisis, says John Kerry
The Guardian Read Article

In an “exclusive” interview with the Guardian, US climate envoy John Kerry tells the paper that world leaders are “sharpening their pencils” to make fresh commitments at the COP26 climate summit that could put the goals of the Paris Agreement within reach. Kerry says he is anticipating “surprising announcements” from key countries, adding: “I know certain countries are working hard right now on what they can achieve.” However, that there is “still a lot of distance to travel in the next four weeks”, Kerry says: “Glasgow has to show strong commitment to keeping 1.5C in reach, but that does not mean every country will get there. We acknowledge that there will be a gap [between the emissions cuts countries offer and those needed for a 1.5C limit]. The question is, will we have created a critical mass? We are close to that. If we have some more countries stepping up in the next weeks, we have something to build on.” Kerry also says that COP26 could still be a success if Chinese president Xi Jinping does not attend: “I am hopeful that President Xi is very much engaged and is personally making decisions, and personally committed…There was a very clear commitment to work with the US to achieve our goals. We are very hopeful.”

Elsewhere, Alok Sharma – president-designate of COP26 – will give a speech today in which he will urge the G20 group of leading economies to come forward with more ambitious 2030 climate action plans, Reuters reports. According to advance extracts of a speech at the UNESCO World Heritage Centre in Paris, Sharma will say: “COP26 is not a photo op or a talking shop. It must be the forum where we put the world on track to deliver on climate. And that is down to leaders.” Reuters also reports that Australian prime minister Scott Morrison is likely to attend COP26. Morrison “drew criticism globally late last month when he said he was unsure whether he would join other world leaders” at the summit, the newswire says. However, an official tells the outlet that “it not set yet, but it is looking likely now”. The Guardian reports that “the Biden administration has encouraged Scott Morrison and other allies to commit to stronger action on the climate crisis to ratchet up pressure on China to do its part, according to Arthur Sinodinos, Australia’s ambassador to the US”.

In related news, the World Health Organization and about three-quarters of global health care workers yesterday called on governments to step up climate action at COP26, reports Reuters. The UN health agency’s report on climate change and health calls for transformational action in every sector including energy, transport and finance, saying the public health benefits of ambitious climate actions far outweigh the costs, the newswire explains. The WHO report warns that “the burning of fossil fuels is killing us, adding: “Climate change is the single biggest health threat facing humanity,“ reports the Press AssociationBloomberg and the Hill also have the story.

In other COP coverage, the Guardian has also published a series of preview articles for the summit. These include a ”complete guide“ to the COP and why it matters, a ”who’s who“ of the leaders who will be there, and a ”jargon buster“ of key terms. And Reuters reports that the chief executive of Heathrow airport has said the UK should use its COP presidency to help scale up sustainable aviation fuel production by bringing in rules for its use, a price support mechanism via contracts for difference and loan guarantees.

More than 30 countries join US pledge to slash methane emissions
The New York Times Read Article

The Biden administration announced yesterday that 32 countries have joined the US in a pledge to reduce methane emissions, reports the New York Times. The pledge, developed with the European Union and launched last month, commits nations to cut emissions from methane 30% by 2030, the paper explains, adding: “While the four heaviest emitters of methane – China, India, Russia and Brazil – have not joined the pledge, the administration announced that nine of the world’s top 20 methane polluters have signed on. In addition to the US and the EU, they are Canada, Indonesia, Pakistan, Mexico and Nigeria, Argentina and Iraq.” The announcement came at a virtual ministerial meeting hosted in Brussels yesterday with the European Union’s top climate negotiator, Frans Timmermans, and the White House special envoy for climate, John Kerry, reports the Washington Post. With added countries, nations backing the pledge now represent about 30% of global methane emissions and 60% of the global economy, notes Bloomberg. Kerry said he hoped to have more than 100 countries signed up in time for COP26, reports Reuters. He said: “We look forward to welcoming all governments that are ready to tackle methane as the single fastest strategy that we have to keep a safer 1.5C future within reach.“ Also on Monday, more than 20 philanthropic groups, including Bill Gates’ Breakthrough Energy and Chris Hohn’s Children’s Investment Fund Foundation, said they would commit more than $200m on unspecified efforts to support methane reduction, reports the Financial Times. The Hill also has the story.

EU to study joint natural gas buying to protect against price surges – draft
Reuters Read Article

The European Union will look into an option for member states to jointly buy natural gas as the bloc considers ways to protect itself against surging energy prices, according to a draft document seen by Reuters. The newswire continues: “The European Commission will this week publish a ‘toolbox’ of measures that European Union countries can take to respond to soaring energy prices, in response to calls from some counties for an EU response to record-high gas and electricity prices. A draft of that toolbox document said the commission would look into the possible benefits of EU countries jointly buying natural gas – an idea proposed in recent weeks by governments including Spain. Countries could collectively purchase gas to form a strategic reserve, the document said, adding that participation would be voluntary.” The move comes as Moldova requested emergency gas supplies from EU countries after Russian state-controlled exporter Gazprom slashed its shipments to the country, reports the Financial Times. The former Soviet state is seeking a deal to supply more gas via Romania to alleviate shortages and surging prices after a supply contract ran out last month, the paper explains, adding: “Officials are unwilling to agree to new terms with Gazprom at a significantly higher price.”

Meanwhile, Reuters reports that France, Finland, the Czech Republic and other central and eastern European countries have jointly pushed for including nuclear energy in the European Union’s upcoming sustainable finance rules. The European Commission is expected to make a decision in the coming months on whether the climate taxonomy will label nuclear energy and natural gas as green investments, the newswire explains. “To win the climate battle, we need nuclear power,” said a statement from the countries, which was also signed by representatives of Poland, Hungary, Slovakia, Bulgaria, Croatia, Romania, and Slovenia. The Financial Times Europe Express column says the energy crisis has reignited “EU divisions over nuclear power”. The paper also reports that hedge funds are snapping up uranium as they “bet on [a] green energy shift”.

In other energy news, Reuters reports that “oil prices rose by about 2% on Monday, extending gains as an energy crisis grips major economies amid a pick-up in economic activity and restrained supplies from major producers”. In response to the “multi-year peak” in prices, Reuters reports that the White House has said it stands by its calls for oil-producing countries to “do more” to support the global economic recovery. An official said the administration was closely monitoring the cost of oil and gasoline and “using every tool at our disposal to address anti-competitive practices in US and global energy markets to ensure reliable and stable energy markets”, the newswire explains. Oil prices have increased by “more than 120% from just under a year ago”, notes the Hill. A Financial Times Markets Briefing article says that the price rises reflect “fears that fuel demand was recovering faster from last year’s economic slowdown than producers could bring supply to the market”. Reuters reports that Chevron yesterday set a target to cut operational emissions to net-zero by 2050. Chevron’s goal does not include greenhouse gases from all fuel products they sell, unlike European oil peers such as Royal Dutch Shell and Italy’s Eni, the newswire notes.

Finally, a Financial Times Climate Capital article reports on how “energy buyers are shelling out for natural gas cargoes paired with offsets and branded as ‘carbon neutral’, in a growing trend that market participants hope will burnish their green credentials but critics say is a false solution”.

China to set up standards of carbon neutrality

CGTN, the English arm of China’s state broadcaster CCTV, reports that the country is planning to set up and improve the standards of carbon peak and neutrality. The channel cites an “official outline” jointly issued by the Central Committee of the Communist Party of China and the State Council on Wednesday. It adds that “the document unveiled the country will accelerate the upgrading of energy-saving standards”. Xinhua, the state news agency, also carries the story. In an English report, the state-run newswire says that the instruction was part of an outline to promote “standardised development” at the national level in the country’s pursuit of “high-quality development and modernisation”. In a Chinese report, Xinhua explains the outline with 35 individual directives under nine general goals. Under the fourth goal of “improving the standardised guarantee for green development”, the document calls for the establishment and improvement of the standards of carbon peaking and carbon neutrality, the report shows.

Separately, AFP has published a report titled, “In Glasgow, China-US tensions could shape climate future”, via Frances24. The article says that global climate action “will be impossible” without China and the US, “which together account for more than half of emissions”. Citing experts, it notes that “breakthrough US-China cooperation could be the catalyst for a historic agreement on climate change – but also that frosty ties between Washington and Beijing are not, so to speak, the end of the world”. The Daily Telegraph reports that “it is understood that Chinese negotiators are to attend COP26”. But the outlet also points out that the attendance of China’s President Xi Jinping “has not been confirmed”. China also launched its presidency of the United Nations Biodiversity Conference (COP15) yesterday, reports the South China Morning Post. Han Zheng, vice-premier and a member of the seven-strong Politburo Standing Committee, announced that China “will compose a national strategy and action plan for biodiversity protection for a new period, and make the protection of biodiversity an important task”, the outlet says. It also notes that China’s Ministry of Foreign Affairs said that President Xi Jinping will speak today via video link. Ma Jun – founding director of China’s Institute of Public & Environmental Affairs – has a piece in the Guardian on why COP15 “should not be overshadowed” by COP26 as “biodiversity loss is an equally grave threat to humanity” as climate change. The Daily Telegraph reports that “the Prince of Wales will tell China [as COP15] that world leaders must adopt a ‘polluter pays principle’ to ‘supercharge’ saving the planet”.

Elsewhere, Eurasianet – an independent news agency covering news from South Caucasus and Central Asia – reports that China is looking to import more Kazakh coal to tackle power shortages back home. China Energy News reports that China’s measures to increase coal production and supply to deal with power shortages have seen “substantial results”. The report says that around 120m tonnes of coal production capacity have been “gradually released” since August. International Energy Net says that a new round of rain-triggered flooding in Shanxi – China’s biggest coal-producing region – has caused 54,947 to be evacuated and 60 coal mines to suspend their production. Bloomberg and the Daily Telegraph also have the story. The Financial Times reports that “desperate factory owners in China are increasingly turning to diesel generators to keep their businesses going during a power crisis that is threatening both the country’s economic growth and its green ambitions”. Reuters reports that China’s state planner, the National Development and Reform Commission (NDRC), said yesterday it will fully liberalise pricing for electricity generated from coal and that industrial and commercial users will all have to buy from the market. It adds: “The NDRC said, giving no specific time frame, that 100% of electricity generated from coal-fired power will be priced via market trading, up from 70% in the country now.”

India: Power supply situation 'not very critical'; certain pockets a worry – power secretary
CNBC TV 18 Read Article

With states such as Assam running adverts asking citizens to “use electricity judiciously”, India’s power secretary Alok Kumar has told CNBC TV 18 that “​​in some pockets [of] some states, there are certain issues, but generally, the situation is under control”. According to the report, “​​the central government has written to states like Maharashtra and Rajasthan to pay coal companies their dues”. The secretary told CNBC that “these states themselves are responsible for not collecting money from their customers timely and paying to coal companies”.

Meanwhile, Scroll.in reports that “out of the 135 thermal power plants in India, 115 have coal supplies for less than a week, according to an update released by the Central Electricity Authority of India on Monday”.

The Economic Times reports that the state of Punjab will now source much more expensive power from Tata’s imported coal-based Mundra power plant, as its own power plants are not getting enough domestic coal and the “ongoing paddy season has also pushed up electricity demand in the state”.

The energy crisis has sparked “a war of words” between opposition parties and the central government, reports NDTV, with Congress spokesperson Pawan Khera alleging that the crisis is part of a “strategy to make good public sector industries [like Coal India] appear sick.” Hindustan Times reports that Delhi’s deputy chief minister Manish Sisodia likened the coal crisis to the oxygen crisis during India’s deadly second wave of Covid-19, saying that “states had warned the government against an oxygen crisis and the central government dodged its responsibilities. Now the coal shortage issue can lead to a power crisis situation”, “pushing the country into a dark pit”. He urged the central “government to be more cooperative”, which he claimed was “stressing more on proving that states are wrong in their assessment of power shortage”.

Comment.

The Guardian view on cabinet splits: A fight for a party’s heart and soul
Editorial, The Guardian Read Article

The row between chancellor Rishi Sunak and business secretary Kwasi Kwarteng over a rescue plan for UK industry in the face of high energy prices reveals the unresolved issue within the corridors of power of how to resource a “green industrial revolution”, a Guardian editorial says. This policy is “key to the government’s plan to level up parts of the country”, the paper says, yet “time is running out…Pledges for carbon capture projects, for green steel plants and to roll out home insulation are worthless without being backed by cash”. It continues: “The Treasury, alas, is not going to let the climate emergency change its view that rises in government spending have to be paid for by rises in taxation. Mr Sunak is behind plans, it is said, to reduce carbon emissions by increasing household bills by hundreds of pounds a year…Mr Kwarteng has other ideas which appear more in touch with Mr Johnson’s gut instincts. The business secretary, it seems, wants payouts for families to offset green energy bills in the drive towards net-zero emissions. Getting the state to give money directly to households would allow consumers to pay for green investment – and create jobs via subsidies for businesses.” Next week, the government is supposed to set out how much it will spend a year to reach its net-zero targets, the paper says: “So far it’s budgeted just a quarter of the £20bn needed annually. It would be unforgivable if Treasury penny-pinching meant Britain failed to play its part in meeting the challenge of the environmental crisis.”

Also commenting on the energy price rise, Financial Times business columnist Helen Thomas writes that “the Treasury’s narky denial of business secretary Kwasi Kwarteng’s suggestion that it is working with his department on the fallout from soaring gas and electricity prices is probably rooted in classic control freakery ahead of this month’s spending review”. The government should be prepared to step in as it did with CO2 production last month, says Thomas, with industries such as steel, ceramics, paper and chemicals warning of shutdowns. She concludes: “There’s no getting away from the fact that the path to net-zero will be bumpy, unpredictable and require state direction. This is a practice run. Rather than patting down ministerial feathers, the government should be focusing on how it will smooth the costs of transition for businesses and consumers alike.” Writing on the same topic, Guardian columnist Gaby Hinsliff warns that “the longer this drags on, the more jobs are potentially at risk, especially in places heavily dependent on manufacturing – disproportionately the ‘red wall’ seats supposedly closest to this government’s heart”. And Andrew Grice – political columnist for the Independent – writes that “the unseemly and damaging cabinet spat over energy bills will surely mean that Johnson has to knock heads together and find a compromise”.

In other UK comment, an editorial in the Evening Standard says that Prince Charles “is right” on the need for action on climate change: “Now we must act. The moment for lofty ambition must be turned into hard policy, on nationally determined contributions, carbon pricing and financial regulation.” Guardian columnist Simon Jenkins explains why the “climate crisis is forcing us to rethink all long-distance travel”. Author and campaigner Andrew Simms has a piece in the Guardian on how the advertising industry is “fuelling climate disaster” and “getting away with it”. And Evening Standard reporter Jack Kessler says that recent flooding in London was “a wake-up call, making it clear that climate change is no longer confined to scientific models and dystopian literature – it is happening now”. In the Daily Mail, Stephen Glover comments on Prince Charles’s advocacy on climate change: “I suspect most people will be grateful for his involvement. As the years have passed, Prince Charles has become increasingly alarmed by climate change, sometimes to the point of being apocalyptic. It’s fair to say that mainstream opinion, and certainly the political classes, have more or less caught up with him.”

The Times Thunderer column – written by Hamish Trench, chief executive of the Scottish Land Commission – tackles how climate change shapes land ownership, values and markets. Trench writes: “The question is how do we do this well? There are fundamental questions to consider, especially if carbon and natural capital values do grow, about a fair and productive balance of public and private benefit.”

Finally, the Times also carries a short comment piece by self-styled “Brexit hardman” Steve Baker, a Conservative MP and trustee of the climate-sceptic lobby group known as the Global Warming Policy Foundation. He says: “Ministers must abandon immediately their policy of obstructing prosperity by forcing the private sector to leave gas in the ground.” Politico has a feature about how the “UK’s climate science deniers rebrand[ed]” themselves yesterday as “New Zero Watch”. The GWPF director, a climate sceptic known as Benny Peiser, admits to Politico: “We have a credibility problem, because…we’ve been painted as kind of bad guys.”

Science.

Climate mitigation scenarios with persistent Covid-19-related energy demand changes
Nature Energy Read Article

A new paper presents a set of “global Covid-19 shock-and-recovery scenarios” for energy use that “systematically explore the effect of demand changes persisting”. The authors project final energy demand reductions of 1–36 exajoules per year by 2025 and cumulative CO2 emission reductions of 14–45bn tonnes of CO2 by 2030. The authors add: “A low energy demand recovery reduces carbon prices for a 1.5C-consistent pathway by 19%, lowers energy supply investments until 2030 by US$1.8tn and softens the pressure to rapidly upscale renewable energy technologies.”

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