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New Zealand to tax agricultural emissions from 2025

  • Market: Agriculture, Emissions, Fertilizers
  • 12/10/22

The New Zealand government plans for farmers to pay a tax on agricultural greenhouse gas (GHG) emissions from 2025, as part of its plan to reduce emissions in an economy where the sector accounts for around half of the country's emissions.

The government has started a consultation process to seek industry feedback about its emissions levy price proposal for its highest export revenue sector.

Modelling suggests that pricing agricultural emissions at the farm level using a split-gas levy with a low methane price could achieve sufficient reductions to meet or exceed New Zealand's biogenic methane target by 2030, said the country's climate change minister James Shaw.

New Zealand plans to cut biogenic methane emissions, which come from plant and animal sources, by 10pc on 2017 levels by 2030. Emissions reductions are expected to come from land use changes to low-emissions land use with sheep and beef farmers the most affected, Shaw said.

The government proposes that prices for methane will be set each year or three-yearly by the government, based on progress against targets and advice from its Climate Change Commission. The price will be determined by New Zealand's progress towards meeting its biogenic methane emissions reduction target by the end of the decade and the long-term target of net zero emissions by 2050.

This price will be paid for by farmers that meet the government threshold for herd size and fertilizer use, the consultation papers said. Long-lived GHGs like carbon dioxide (CO2) and nitrous oxide will be set annually and linked to emissions trading scheme (ETS) unit prices but with discounts that falls by 1pc.

Revenue from the agriculture emissions levy will go towards new technology, research and incentive payments to farmers that adopt climate-friendly practices.

"This is an important step forward in New Zealand's transition to a low emissions future and delivers on our promise to price agriculture emissions from 2025," said New Zealand prime minister Jacinda Ardern. "No other country in the world has yet developed a system for pricing and reducing agricultural emissions, so our farmers are set to benefit from being first movers."

If an alternative pricing system, such as the levy proposed, is not implemented by 1 January 2025, legislation states that agricultural emissions will be priced under the ETS, the consultation paper said.

New Zealand's GHG emissions budget for 2022-25 sets average emissions at 72.4mn t/yr of CO2 equivalent (CO2e), or 8pc below 2020 levels. New Zealand's carbon budget covers 2026-30 when the average emissions level is targeted to be 61mn t/yr of CO2e and 22.5pc below the 2020 level. Its budget for 2031-35 sets an GHG emissions target at 48mn t/yr of CO2e, or 39pc below 2020 levels.


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12/07/24

Germany's Aurubis copper smelter back from maintenance

Germany's Aurubis copper smelter back from maintenance

London, 12 July (Argus) — Germany's Aurubis today announced that its Hamburg copper smelter returned to service on 11 July from the largest maintenance shutdown in the company's history that began 7 May. A restart is now under way following the €95mn 60-day maintenance that included an overhaul of the flash smelter, installation of heat exchangers in the contact acid plant, as well as the installation of a tap hold drill and tamping machine for improved safety of copper slag tapping. Hydrogen-ready anode furnaces were also installed as measures to improve sustainability. Investments in automation are set to improve efficiency and extend the frequency of planned maintenance rounds to three years from two. The Hamburg smelter's outage has exacerbated sulphuric acid tightness in Europe , and the operational restart is expected to provide some relief to the market. This comes in addition to the lack of availability of molten sulphur in the region, leading to shortages of sulphur burnt acid , which has prompted some consumers to replace burnt acid with smelter acid, lifting demand. Aurubis produced 1.19mn t of sulphuric acid during the first six months of the 2023-24 financial year (October-March), up by 1pc on the same period a year earlier. Output at Aurubis' Hamburg smelter rose by 11pc to 512,000t in the period, while output from the Pirdop smelter saw a 6pc decline on the period to 679,000t . For the first three months of the year, Aurubis produced 598,000t of acid, unchanged from the same quarter of 2022-23, as increased output at its Hamburg smelter offset a decline from Bulgaria's Pirdop plant. Production at Hamburg totalled 258,000t from January-March. By Maria Mosquera Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Australia's Climate Active program drives ACCU demand


12/07/24
News
12/07/24

Australia's Climate Active program drives ACCU demand

Sydney, 12 July (Argus) — The Australian federal government-backed Climate Active certification program continued to drive voluntary demand for Australian Carbon Credit Units (ACCUs) last year, although future growth remains uncertain as the scheme will undergo a planned reform. Cancellations of ACCUs for Climate Active certification reached 592,837 units in 2022, down from an all-time high of 625,705 in 2021, according to estimated data that the Department of Climate Change, Energy, the Environment and Water (DCCEEW) recently disclosed to Argus . Figures for 2023 are not yet available, according to the department, but cancellations may have reached a new high between 650,000-700,000 units, according to Argus estimates ( see table ). Each ACCU represents 1t of CO2 equivalent (CO2e) stored or avoided by a project. The Clean Energy Regulator (CER) said it does not have a dataset of ACCU cancellations for Climate Active certification, despite having disclosed figures in some of its quarterly carbon market reports in recent years. It mentioned late last year that the program accounted for around 0.5mn of a total 0.8mn cancelled for voluntary purposes in the first three quarters of 2023, and later reported total voluntary cancellations of 290,146 units in the fourth quarter alone. Voluntary cancellations reached nearly 1.1mn units in 2023 , a new record high. Certification under the Climate Active standards is awarded to businesses that measure, reduce and offset their carbon emissions to achieve carbon neutrality. More than 700 certifications have been provided to entities including large and small businesses, local governments, and non-profit organisations. But significant changes in climate science, business practices and international benchmarks since the program was established in 2010 prompted the federal Labor government to seek modifications aimed at driving a more ambitious voluntary climate action in Australia, following its separate reform of the compliance market's safeguard mechanism . The DCCEEW late last year launched a consultation with proposals to reform Climate Active, which would require more climate ambition from businesses seeking to be certified under the program. The use of carbon credits to offset emissions that have not been reduced by businesses would be tightened, with a requirement that all eligible international offset units meet a five-year rolling vintage rule, replacing the existing post-2012 vintage requirement. Other proposals include mandating a minimum level of gross emissions reductions and a minimum percentage of renewable electricity use. "The government is working through feedback on these proposals and will announce the consultation outcome later this year," a DCCEEW spokesperson told Argus . No expected changes in eligible offsets ACCUs have been representing a small share of the total offsets used for Climate Active certification at between 5.7-10.8pc in recent years, despite the estimated record high last year, according to DCCEEW estimates ( see table ). Organisations can currently use certified emissions reductions (CERs) and removal units (RMUs) under the program, as well as verified carbon units (VCUs) from the Verra registry and verified emissions reductions (VERs) from Gold Standard. The DCCEEW did not provide a breakdown of cancelled volumes per credit type. No minimum use of ACCUs and no changes to the list of eligible international units are expected in the near term, following advice from a review from Australia's Climate Change Authority (CCA) in 2022. But some market participants have been asking for the removal of CERs, which account for the "vast majority" of carbon offsets surrendered by Australian organisations, according to utility AGL. CERs are "outdated", utility Origin Energy said in its submission to the Climate Active consultation. "We consider it would be consistent with international carbon reduction mechanisms to introduce a clear end date to phase out the use of CERs from the program and ensure greater alignment with the more relevant Paris Agreement," Origin said. "This reform is considered an immediate priority, and of more urgent need than some of the other proposals in this consultation." Uncertainties over future demand More investor and activist pressure in recent years over the use of carbon offsets with perceived low levels of integrity have also been forcing companies to review not only their offset standards, but also claims of ‘carbon neutrality' and similar terms. One of the DCCEEW's proposals is to discontinue the use of ‘carbon neutral' to describe the certified claim and to choose a different description. "A lot of the voluntary demand for carbon offsets in Australia has traditionally come from Climate Active, but the landscape is indeed moving quickly and the concept of carbon neutrality is being replaced by net zero," said Guy Dickinson, chief executive of Australia-based carbon offset services provider BetaCarbon and head of carbon trading at sister company Clima. This should drive more price stratification between carbon removals and carbon avoidance credits, he noted. Telecommunications firm Telstra, one of the biggest companies in Australia, recently announced it will stop using carbon offsets to focus instead on reducing its direct emissions. It will no longer seek Climate Active certification as a result and will remove references that its plans are ‘carbon neutral' or ‘carbon offset'. This could prompt other businesses to follow suit, market participants said. Another source of uncertainty over future voluntary demand comes from a DCCEEWW proposal that abatement from all ACCUs used under Climate Active would count towards meeting Australia's Nationally Determined Contribution (NDC) under the Paris Agreement. The use of ACCUs under the program have so far been treated as ‘additional' to Australia's emissions reduction target through accounting under the Kyoto Protocol. If the government goes ahead with such a proposal, this could disincentivise participation in Climate Active as organisations might consider this as "paying to help the government meet its targets through the voluntary action of businesses," utility EnergyAustralia warned in its submission. There has been increased interest in emerging and alternate standards to those acceptable under Climate Active, such as the American Carbon Registry, Climate Action Reserve and Puro.Earth offsets, according to environmental marketplace Xpansiv's vice president of carbon and Australian energy, Peter Favretto. But Climate Active has reported positive growth in certified brands since its inception and will likely continue to create demand for offsets in the international voluntary market and the Australian ACCU market, he said. "With the upcoming mandatory climate reporting legislation in Australia , and a similar atmosphere in other global jurisdictions such as the US and the UK, there is a growing demand that could lead to further growth in Climate Active certifications," Favretto added. By Juan Weik ACCUs used for Climate Active certification units Year Volume Total voluntary ACCU use Climate Active % 2019 243,105 329,145 73.9 2020 417,405 605,499 68.9 2021 625,705 844,445 74.1 2022 592,837 855,081 69.3 2023 650,000-700,000* 1,090,575 60-64* DCCEEW, CER *Argus estimates Total offsets under Climate Active unit Year ACCUs Total offsets ACCUs % 2019 243,105 4,230,011 5.7 2020 417,405 6,857,628 6.1 2021 625,705 5,796,466 10.8 2022 592,837 7,472,711 7.9 DCCEEW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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India's IPL issues urea counterbids: Update


12/07/24
News
12/07/24

India's IPL issues urea counterbids: Update

Adds latest on counterbid recipients Amsterdam, 12 July (Argus) — Indian fertilizer importer and supplier IPL has sent counterbids to all suppliers at $365/t cfr east coast under its 8 July tender. IPL has secured 80,000t for the west coast under two previous bid rounds at $350.50/t cfr. This latest counterbid validity is until 11:00 IST (05:30 GMT) on 13 July. The importer initially sent counterbids to the suppliers with the seven-lowest priced offers to the east coast earlier today, for a potential total of 480,000t, but has now sent the counters to all potential suppliers under the tender. This round of counters for the east coast follows two rounds for the west earlier in the week. The first round was on 10 July and received no acceptances, while the second was on 11 July and resulted in a trading firm agreeing to supply just a further 30,000t at $350.50/t cfr west coast. The east coast counters may tempt more acceptances given the $15/t premium over the west coast price. Trading firm Liven offered the lowest for 50,000t at $350.50/t cfr west coast, while the lowest offer on the east coast was 100,000t from OQ Trading at $365/t cfr east coast. The lowest offers to both coasts will be confirmed sales in line with tender rules. By Harry Minihan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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India's IPL issues urea counterbids for east coast


12/07/24
News
12/07/24

India's IPL issues urea counterbids for east coast

Amsterdam, 12 July (Argus) — Indian fertilizer importer and supplier IPL has sent counterbids to seven suppliers with the lowest-priced offers to the east coast under its 8 July tender, to possibly buy up to 480,000t at $365/t cfr. IPL has secured 80,000t for the west coast under two previous bid rounds at $350.50/t cfr west coast. This latest counterbid validity is until 11:00 IST (05:30 GMT) on 13 July. The seven-lowest priced offers to the east coast totalled 480,000t, of which the initial lowest-priced offer of 100,000t will be accepted automatically under tender rules. This round of counters for the east coast follows two rounds for the west earlier in the week. The first round was on 10 July and received no acceptances, while the second was on 11 July and resulted in a trading firm agreeing to supply just a further 30,000t at $350.50/t cfr west coast. The east coast counters may tempt more acceptances given the $15/t premium over the west coast price. Trading firm Liven offered the lowest for 50,000t at $350.50/t cfr west coast, while the lowest offer on the east coast was 100,000t from OQ Trading at $365/t cfr east coast. The lowest offers to both coasts will be confirmed sales in line with tender rules. By Harry Minihan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Australia’s BHP to import sulphuric acid for Lynas


12/07/24
News
12/07/24

Australia’s BHP to import sulphuric acid for Lynas

Singapore, 12 July (Argus) — Australian resources firm BHP has "affirmed its commitment to using reasonable efforts" to supply imported acid to Australia-listed mining company Lynas Rare Earths, Lynas said today. This comes after BHP announced a temporary suspension of its Western Australia nickel business from October, citing bearish expectations against nickel prices. Lynas has a supply contract with BHP Nickel West for the provision of sulphuric acid from the Kalgoorlie nickel smelter or imported sources to its Kalgoorlie rare earths processing facility, with the initial term until 30 June 2027. By Deon Ngee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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