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Carbon auction suggests optimism over Ontario

  • Market: Electricity, Emissions, Natural gas, Oil products
  • 24/05/18

The latest results from the Western Climate Initiative (WCI) carbon allowance auction indicate that industry officials are betting on the survival of Ontario's cap-and-trade program.

The province, along with California and Quebec, sold all of the nearly 90.6mn vintage 2016 and 2018 allowances offered at a 15 May auction, according to results released yesterday by the state and provincial governments.

That high level of demand at the auction comes just ahead of a 7 June election that could upend the nascent carbon market alliance. The opposition Progressive Conservative Party has threatened to do away with the cap-and-trade program if it takes over as the majority government.

If that happens, the companies buying allowances to cover their carbon emissions could lose their investment. But Ontario industry officials appear to have bet that cap-and-trade will not go away, at least in the short-term.

"Despite the political uncertainty, Ontario entities are not really shying away," said Nicolas Girod of the carbon market advisory firm ClearBlue Markets.

Ontario started its carbon market in 2017 and linked with the California and Quebec programs this year, significantly expanding the market and adding to the number of trading partners available to companies.

Girod noted that 45 Ontario companies qualified for bidding in the latest auction, 10 more than in February.

Numbers like that suggest that Doug Ford, leader of Ontario's Progressive Conservative Party, could find it difficult to disentangle the province from a climate policy that industry has already invested in. More interests than ever have committed to the program, at least for the next two years covered by the current vintage allowances sold at this week's auction.

The sale raised about C$467 ($363mn) for Ontario, as well as $681mn for California and C$190mn for Quebec. That money goes to projects that further reduce emissions, in some cases to the direct benefit of the companies regulated by cap and trade.

Former environment minister Glen Murray, who oversaw the creation of Ontario's cap-and-trade system, has said that it will be "almost impossible" for someone to undo the program and warned they would "pay a very difficult price" to do it.

Key components of the province's climate strategy and market structure are enshrined in legislation and could be particularly difficult to repeal.

But not all market signals suggest widespread optimism about prospects for Ontario's carbon market. A carbon trader for one California fuel wholesaler said that market participants had already accounted for the possibility of Ontario's departure well before the event.

"With the December 2018 futures trading down to $15, we priced in most of the risk already."

The price for vintage 2018 CCAs with a December delivery had dropped more than 40¢ since 1 January 2018 by the time of the May auction.

The vintage 2018 CCAs for December delivery received a slight bump from the auction results, trading for $15.14/t yesterday.

Environmental groups, concerned that the most ambitious carbon pricing program in North America might falter, nonetheless breathed a sigh of relief yesterday.

"The results for both current and future vintage in this auction indicate that confidence is steady, and the California-Quebec-Ontario market remains a world leader in driving climate action," Environmental Defense Fund senior analyst Katelyn Roedner Sutter said.

The last five quarterly auctions, dating back to May 2017, have sold out of the current vintage allowances offered — a period of stability that has provided regulators with a steady source of revenue to fund climate change mitigation projects.

Doug Ford says he is determined to "scrap" the cap-and-trade program. But as the latest auction results indicate, he would have to overcome a growing constituency of support for the fledgling market to make good on that campaign pledge.

2015 GHG emissions by jurisdiction mn t

CCA auctions: Percentage of current vintages sold

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17/07/24

Climate finance goal is top priority: Cop 29 president

Climate finance goal is top priority: Cop 29 president

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TotalEnergies agrees to sell stake in Nigeria SPDC JV


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17/07/24

TotalEnergies agrees to sell stake in Nigeria SPDC JV

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China’s CNOOC gets record gas results from Bohai well


17/07/24
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17/07/24

China’s CNOOC gets record gas results from Bohai well

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New Zealand, Australia carbon brokerage rivalry builds


17/07/24
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17/07/24

New Zealand, Australia carbon brokerage rivalry builds

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Aumentan importaciones de combustible en México


16/07/24
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16/07/24

Aumentan importaciones de combustible en México

Mexico City, 16 July (Argus) — Las importaciones de combustible en México aumentaron en julio de cara a la temporada de viajes de verano e impulsadas por una disminución de la producción nacional en las refinerías de la estatal Pemex. Las importaciones marítimas a México de gasolina, diésel y turbosina, incluidas las importaciones de Pemex y privados, aumentaron un 18pc a aproximadamente 780,000 b/d del 1 al 10 de julio, frente a 663,000 b/d en el mismo periodo de 2023, según datos de Vortexa. Esto se debió principalmente a un aumento del 66pc en los cargamentos de diésel hasta alcanzar 268,000 b/d, ya que la disponibilidad de este combustible en el mercado ilegal probablemente disminuyó, según fuentes del mercado. Los cargamentos de turbosina se cuadriplicaron hasta los 43,000 b/d en el mismo periodo, ya que Pemex reabastece sus inventarios antes de la temporada de viajes aéreos de verano. Las importaciones de combustible a México habían disminuido a principios de este año, después de que la campaña del gobierno para aumentar la producción de refinerías y reducir su dependencia de las importaciones de EE. UU. comenzara a dar sus frutos, aumentando la producción de gasolina y diésel de Pemex en un 32pc y reduciendo sus importaciones hasta un 25pc en marzo. Pero en abril y mayo, el sistema de refinación de Pemex enfrentó varios problemas, desde un incendio en la refinería de Minatitlán hasta un corte de energía importante en la refinería de Tula, lo que llevó los niveles de procesamiento de crudo de Pemex a un mínimo de cinco meses en mayo. Las tasas de operación de las refinerías en junio se publicarán el 26 de julio. Es probable que el procesamiento de crudo haya caído durante el mes pasado debido a operaciones de mantenimiento en dos refinerías, dijo una fuente familiarizada con las operaciones de refinación de Pemex. El mercado tiene sus dudas sobre la posibilidad una fuerte caída en las importaciones de combustible a México, y algunos refinadores de la costa del Golfo de EE. UU. esperan una fuerte y creciente demanda. Además, incluso si la refinería Olmeca de 340,000 b/d iniciara operaciones comerciales este año, es probable que las otras seis refinerías reduzcan sus tasas de utilización, según fuentes del mercado. Recientemente, Pemex comenzó a vender diésel desde la terminal de distribución de la refinería de Olmeca, pero la cantidad es limitada y el combustible se produjo utilizando materia prima destilada en otra planta. La tendencia a la baja en las operaciones de refinado de México podría continuar en julio a pesar de los esfuerzos del gobierno saliente para aumentar la producción nacional. México ha exportado alrededor de 1 millón de b/d de crudo hasta la fecha en julio, un aumento del 20pc frente a los 847,500 b/d en todo junio, según los datos de Vortexa. Esto indica que es probable que las refinerías de Pemex estén operando a tasas más bajas. Las importaciones de combustible de México podrían continuar su tendencia al alza en los próximos meses, pues los gasolineros esperan una mayor demanda de gasolina durante las vacaciones de verano. Los inventarios de gasolina y diésel de Pemex descendieron un 24pc en junio a 6.2 millones de bl, frente a 8.1 millones de bl en junio de 2023, según una respuesta de transparencia de Pemex a una solicitud de Argus . La empresa deberá aumentar sus importaciones si las refinerías no siguen el ritmo de la demanda. Además, las importaciones suelen aumentar en la segunda mitad del año, impulsadas por la demanda de diciembre y la mezcla de gasolina de invierno de menor precio. México importó más gasolina en el segundo semestre del año en 11 de los últimos 12 años y más diésel en ocho de esos mismos años. Juego de unos pocos El mercado de importación de combustible de México se ha limitado a Pemex y a algunas empresas del sector privado durante los últimos tres años del mandato del presidente Andrés Manuel López Obrador, y no hay señales de cambio después de las elecciones presidenciales de junio. Se espera que la presidenta electa Claudia Sheinbaum, que tomará el cargo el 1 de octubre, continúe con las políticas nacionalistas de energía de López Obrador, y tendrá aún menos contrapeso que su predecesor tras la contundente victoria de su partido Morena en las elecciones legislativas. Las importaciones de combustible a México se abrieron a empresas del sector privado después de la reforma energética de 2014, pero la secretaría de energía canceló decenas de permisos de importación de combustible en los últimos años. Por Antonio Gozain Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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