Oregon renewable diesel pours into CFP bank
Rising renewable diesel deliveries helped grow the volume of Oregon Clean Fuels Program (CFP) credits available for future compliance by a record 30pc in the fourth quarter of 2023, according to state data released today.
The roughly 253,000 metric tonne (t) increase in available credits from the previous quarter — bringing the total to 1.1mn t — illustrates the spreading influence of US renewable diesel capacity on markets offering the most incentives for their output. California and Oregon low-carbon fuel standard (LCFS) credit prices have tumbled as renewable diesel deliveries generate a surge of credits in excess of immediate deficit needs. LCFS credits do not expire.
LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed the annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives.
Renewable diesel volumes in Oregon increased by 12pc from the previous quarter to about 37,000 b/d — more than double the volume reported in the fourth quarter of 2022. The fuel represented 24pc of the Oregon liquid diesel pool for the period, while petroleum diesel fell to 75pc. Renewable diesel generated 46pc of all new credits for the quarter, compared to the 14pc from the next-highest contributor, biodiesel.
Deficit generation meanwhile shrank from the previous quarter. Gasoline deficits fell by 6.6pc from the third quarter as consumption fell by roughly the same amount. Gasoline use trailed the fourth quarter of 2022 by 7.1pc. Diesel deficits also shrank as renewable alternatives push it out of the Oregon market. Petroleum diesel deficits fell by 19pc from the previous quarter and consumption was 27pc lower than the fourth quarter of 2022.
Spot Oregon credits have fallen by half since late September, when state data offered the first indications that renewable diesel that was already inundating the California market had found its way to the smaller Oregon pool. The quarter marks the first time Oregon credits available for future compliance have exceeded 1mn t.
Oregon in 2022 approved program targets extending into next decade that target a 20pc reduction by 2030 and a 37pc reduction by 2035. An ongoing rulemaking process this year will consider changes to how the state calculates the carbon intensity of fuels and verifies the activity of participants, but will not touch annual targets.
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Biomethanol market slows, but shipowners eye offtakes
Biomethanol market slows, but shipowners eye offtakes
London, 16 May (Argus) — The UK's biomethanol consumption fell by 37pc last year as competition from alternative renewable fuel compliance options weighed on demand. The UK consumed 40mn litres of biomethanol in 2023, down from 63mn l in 2022, 53mn l in 2021 and 48mn l in 2020, according to provisional data from the country's Department for Transport. Biomethanol is used as a blending component for gasoline in the UK. Market participants attribute the decline in demand to ample supply of competitively priced alternatives to meet the UK's mandate for the use of renewable fuels in the transport sector. Fob ARA range biodiesel prices fell to a 19-month low towards the end of 2023 , following an unusually large influx of supply to Europe from China since the start of the year. EU biodiesel imports from China reached a record 1.06mn t in 2023 , up from 557,000t in 2022, according to GTT data. The increase in imports contributed to lower renewable fuel ticket prices in key European markets, including the UK. Companies supplying biofuels for transport in the UK can generate renewable transport fuel certificates (RTFCs), which are tradeable and can help obligated parties meet the UK's renewables' mandate. The Argus UK non-crop RTFC reduction obligation price averaged 21.79 pence/RTFC in 2023, compared with 36.35p in 2022. The price has averaged 16.79p so far this year, compared with 26.40p and 37.39p in the same period in 2023 and 2022, respectively. The drop in demand for biomethanol from the UK transport sector is weighing on domestic prices. The Argus cif UK biomethanol price has averaged $1,081.43/t so far in May, having been on a consistent downward trend since late October when the price peaked at $1,205/t. The price averaged $1,212.75/t in May 2023. The slowdown in demand has put biomethanol production margins under pressure, prompting some producers to cut output. Silver lining Demand for renewable methanol, in the form of both biomethanol and e-methanol, could be supported by growing interest from the maritime sector in the coming years as shipowners seek to reduce their emssions. The EU's FuelEU maritime regulation is due to come into effect at the start of next year. It aims to reduce the greenhouse gas (GHG) intensity of marine fuels by 2pc in 2025 and by 80pc by 2050. Shipping companies can choose from a wide range of alternative marine fuels to reduce their emissions, but several are betting on methanol and renewable methanol. Danish shipping giant Maersk has ordered 24 methanol-powered container ships for delivery and commissioning during 2024-25, and Japanese classification society ClassNK said in a recent report that it expects a total of 77 methanol-ready ships to be ordered by 2026, up from 27 methanol newbuilds expected to be ordered this year. Offtake agreements for renewable methanol are also on the rise. Maersk has signed several letters of intent for the procurement of biometanol and e-methanol from producers such as Equinor , Proman and OCI Global . The company also said it has secured an agreement with Danish shipping and logistics company Goldwind for the offtake of 500,000 t/yr from 2024. Meanwhile, Singaporean container shipping group X-Press Feeders said last year that it will offtake biomethanol from OCI's Texas plant starting this year. Another spanner in the works? Although the outlook on renewable methanol demand from the shipping sector appears bright, the recognition of biomethane and biomethane-based fuels produced through mass balancing in non-EU grids is uncertain. More than 40 energy companies and institutes have sent joint letters to the European Commission asking for these products to be included in the Union Database , which aims to prevent the relabelling of biofuels' sustainability declaration. The UDB was launched in January 2024 for liquid fuels and will include gaseous fuels in November, but the commission plans to exclude automatic certification of biomethane and biomethane-based fuels if it is transported through gas grids outside of the EU. The measure "is likely to reduce the availability and increase the cost of low- and zero-carbon bunker fuels for shipping" and may also impact hydrogen and hydrogen-derived fuels, one of the letters sent to the commission said. By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Nayara Energy to set up two ethanol plants in India
Nayara Energy to set up two ethanol plants in India
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EBRD ‘green project’ funding hit €6.54bn in 2023
EBRD ‘green project’ funding hit €6.54bn in 2023
London, 15 May (Argus) — The European Bank for Reconstruction and Development (EBRD) hit a record level of investments in the "green economy" in 2023, at €6.54bn ($7.1bn) in 337 projects — up from €6.36bn in 2022. The multilateral development bank (MDB) again reached its target for at least 50pc of its total annual investment to go towards green projects. Of total investments, 50pc went to green projects — flat on the year. The EBRD initially set the goal for 2025, but hit it in 2021, with 51pc of its investment going to green projects. The EBRD's investments stood at €13.1bn in 2023 — a new record high — going towards 464 individual projects. The bank has since the beginning of 2023 ensured that all new investment projects are in line with the Paris climate agreement goals. The Paris agreement seeks to limit the rise in temperature to "well below" 2°C above pre-industrial levels, and preferably to 1.5°C. Countries' focus on MDBs and their role in delivering climate finance has intensified in recent years. Climate finance is set to dominate climate talks this year, including at the UN Cop 29 summit, set for November in Baku, Azerbaijan. Mukhtar Babayev, Cop president-designate, last month called on MDBs and parties to the Cop process to deliver on climate finance. The EBRD is owned by 73 shareholder governments, the EU and the European Investment Bank. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia to explore biofuels mandate, incentives
Australia to explore biofuels mandate, incentives
Sydney, 15 May (Argus) — Australia's federal budget is funding mandate studies and pursuing certification schemes, given the increasing likelihood biofuels will play a significant role in the nation's energy transition. The federal government has pledged A$18.5mn ($12.3mn) in the four years from 2024-25 to develop a certification scheme for low-carbon liquid fuels, including SAF and renewable diesel, by expanding its guarantee of origin programme for long-term demand by the industry . An extra A$1.5mn over two years from 2024-25 will go to analysis of the regulatory impact of the costs and benefits of introducing mandates for low-carbon liquid fuels, while the government has promised consultation on possible production incentives for domestic project developers. Money from the A$1.7bn Future Made in Australia innovation fund will also be made available for liquid fuels research, to be administered by the Australian Renewable Energy Agency to commercialise net zero technology. "The package of announcements is dealing with crucial areas essential for deployment, including certification to ensure Australia develops a sustainable liquid fuels industry, resourcing to support key demand side interventions such as a low carbon fuels standard and consultation on additional supply-side measures such as production credits," Bioenergy Australia chief executive Shahana McKenzie said on 15 May. The funding pales in comparison to the $9bn hydrogen investment promised by the government, although much of that is deferred to the decade from the 2027-28 fiscal year. About 45pc of Australia's energy use is supplied by liquid fuels but the nations lags behind many countries on decarbonising its transport sector. Australia's Commonwealth Scientific and Industrial Research Organisation forecasts demand for jet fuel will grow 75pc by 2050. But no domestic production facility has yet reached a financial close, despite major airlines committing to increasing their SAF use. Domestic feedstocks including agricultural residues could meet 60pc of Australian jet fuel demand initially, growing to 90pc by 2050, Bioenergy Australia has said, while pursuing renewable fuels could cut the country's dependence on oil product imports from 90pc to 61pc by 2040. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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