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Cop 27: Fossil fuels absent in first cover document

  • Market: Coal, Crude oil, Emissions, Natural gas, Oil products
  • 15/11/22

Fossil fuels have not been included in a first, bare-bones document listing all possible elements of the Cop 27 UN climate summit cover decision to be adopted at the end of the conference.

The document, described as a 'non-paper' by the UNFCCC, is just a bullet-point list of potential topics that could be included in the final Cop 27 decision. It was released late on 14 November, for ministers to start negotiations on the final text.

Coal particularly and fossil fuels more generally are notably absent, although the EU said it expects the mitigation section of the text to build on what was agreed at Cop 26 in Glasgow. Mitigation refers to efforts to reduce emissions.

The Glasgow Climate Pact signed at Cop 26 last year called on countries to accelerate efforts towards the phase-down of unabated coal power and the phase out of inefficient fossil-fuel subsidies. At this Cop, India last week pushed for a phase down of all fossil fuels to be included in the cover text, rather than just coal. Asked if Europe would support India's call, European Commission executive vice-president Frans Timmermans said that "we are all in support of any call to support a phase down of fossil fuels, but we have to make sure that this call does not diminish the early agreement we had on phasing down coal".

"If it comes on top of what was agreed in Glasgow, then the EU will support India's proposal", he said, adding it should not divert "attention and efforts to phase down coal as we have agreed last year in Glasgow".

India, with China, last year secured a last-minute watering down of the language on coal in the Cop 26 cover text.

The EU expects the Sharm el-Sheikh cover text will pick up on the references to fossil fuels, and the phase down of unabated coal, that were made in the Glasgow Climate Pact, but these have yet to be included in the text.

The released list also mentions the "urgency of action to keep 1.5°C in reach". Although some nations may be pushing for this mention to be omitted this year, a large number of countries at Cop have urged no going back on commitments taken in Paris and Glasgow, and have reiterated the urgent need to align emission pledges and actions with the 1.5°C goal. The UN's 2015 Paris Agreement aims to limit global warming to well below 2°C above pre-industrial levels, and ideally to 1.5°C.

The first cover document also mentions the $100 bn/yr finance goal, its status and progress on the target. Egypt wants to see progress on the headline finance target, which developed countries were supposed to meet by 2020 to help developing nations hit their climate goals. The OECD estimates the goal could be reached in 2023.

The document also says the cover decision will reflect the main outcomes on loss and damage, the mitigation work programme and the global goal on adaption. So far, countries remain divided on what progress should look like on the contentious issue of funding arrangements for loss and damage — which many view as key to move forward with other negotiations.


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16/01/25

Trump tariffs may move gas prices, not flows

Trump tariffs may move gas prices, not flows

New York, 16 January (Argus) — US president-elect Donald Trump's threat to impose 25pc tariffs on all imports from Canada would likely raise US natural gas prices if enacted, but not by enough to significantly alter flows across the border. As anxiety over US-imposed tariffs mounted over the past week, gas prices for February delivery on the Pacific coast of southern Canada began trading at a steeper discount to their US counterparts. The February price at Westcoast station 2, a key indicator of western Canadian gas prices, on Wednesday was at a $4.38/mmBtu discount to northwest US gas hub Northwest Sumas, compared with a $3.43/mmBtu discount a week earlier. The February price at Canadian benchmark NIT/AECO on Wednesday also moved to a $2.56/mmBtu discount to the US benchmark Henry Hub in Louisiana from a $2.22/mmBtu discount a week earlier. While other factors could be at play, the wider Canadian discounts line up with a shift in sentiment by Canadian oil and gas groups and politicians over the past week, as those groups coordinate to try and halt the threatened tariffs. "They're likely to come in on January 20th," Danielle Smith, premier of Alberta, a major oil and gas-producing Canadian province, said of the tariffs this week. The attitude is starkly different from a month earlier, when Michael Rose, chief executive of Tourmaline Oil, the largest Canadian gas producer, said at a Goldman Sachs energy conference that he thought there was a "low likelihood" that the tariffs would be imposed. "We'd agree with you," replied Goldman Sachs head of gas research Samantha Dart. But while US-Canadian gas price spreads would widen if gas were not exempted from Trump's tariffs, the western US would probably not reduce purchases of Canadian gas, because "there's nowhere else for them to get the supply," FactSet senior energy analyst Connor McLean said. Moreover, even with a 25pc price increase, Canadian gas is still highly competitive against US-sourced gas and alternative power generation sources like coal. This is also the case for the US' upper midcontinent and east coast, though gas buyers in those regions could also source gas from Appalachia, Oklahoma or the Rockies if there were spare pipeline capacity. The effect of tariffs on gas prices would also probably be dwarfed by more humdrum market dynamics, like the weather. Demand-boosting cold weather this month has quickly drawn down US gas inventories, which appear slated in the coming weeks to flip to a deficit to the five-year average for the first time in more than two years. Even colder weather early next week is also likely to trigger freeze-offs, which are production curtailments caused by extreme cold. Given those more pressing concerns, "tariffs do not come up" in meetings with other market participants, Appalachian gas producer Seneca Resources marketing manager Rob Lindroos told Argus . Approximately 99pc of US gas imports are from Canada via pipeline, with flows into the US averaging 8 Bcf/d (227mn m³/d) in 2023, according to the US Energy Information Administration. Those Canadian sales, accounting for nearly half of western Canada's production, provide crucial energy supplies to the US Pacific northwest and midcontinent, parts of which are far from US reservoirs. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Mexico’s oil states led labor market losers in 2024


16/01/25
News
16/01/25

Mexico’s oil states led labor market losers in 2024

Mexico City, 16 January (Argus) — Mexico's oil and gas-dependent states led state job losses in 2024, driven by a sharp contraction in spending by state-owned Pemex and the completion of the Olmeca refinery, according to energy market sources and state data, even as two-thirds of the country's states posted job growth. Annually, the total employment in Mexico grew by 213,993 jobs in 2024, 67pc fewer than the 651,490 jobs added in 2023, according to the Mexican social security (IMSS) institute's tally of formal jobs, which have full benefits like better access to housing credits and public medical services. The deceleration in the number of jobs created last year adds to signals of a Mexican economy that was cooling as the year progressed, according to economists and energy market sources. "In 2024, the second lowest generation of jobs in the last 15 years was recorded, only after 2020, the year in which the Covid-19 pandemic hit," according to a report from Mexican think tank Mexico Como Vamos. Tabasco state, one of the most important for the energy sector in Mexico, led the reduction in employment among the 11 states that experienced job losses during 2024. Tabasco lost 28,675 jobs over the year, for a 12pc annual decline in employment in the state, according to IMSS data. Twenty-one states, including the capital, posted job growth. Campeche, the state with the second biggest annual percentage of job losses, and Tamaulipas, the other state with a high dependence on the oil sector, also reported significant declines in 2024, with annual formal job losses of 5,952 and 3,120, representing 4pc and 1pc decreases from a year earlier, respectively. These IMSS figures only account for formal jobs registered with the institute, which provide access to medical, pensions, and housing credits, and totaled 22.24mn as of December. The official statistics agency Inegi counts employment nationwide at 59.5mn as of the third quarter last year. Inegi's count of employment includes the informal sector, made up of jobs without social security and other benefits. Inegi's estimates put the informal labor sector at over 54pc of all jobs. According to IMSS, the country lost 405,259 jobs in December compared with November, the largest loss recorded for that month since 2000. Still, December is typically marked by heavy job losses because of seasonal adjustments. But last year the final month's tally was pulled even lower than normal by overall weak hiring over the year, Inegi said, even as total job growth was positive for the full year. While the labor situation in Mexico worsened in 2024 because of the weakening of the national economy, including a sharp depreciation of the peso to the dollar, the decline has hit the states most closely tied to the oil and gas sector and Pemex spending, said Carlos Ramirez, founder of consultancy Integralia. Tabasco hangover "Tabasco benefited greatly from the investment poured into Pemex by the administration of AMLO (former president Juan Manuel Lopez Obrador), Ramirez said. "This is going to change now with the (Claudia) Sheinbaum administration, and the state will suffer a hangover as the new government reduces its support for the oil and gas industry." Still, the national unemployment rate is low, at 2.6pc in November, according to Inegi. And the country added 361,000 jobs in the third quarter from a year earlier, according to Inegi's broader base of data. But the economy was slowing in the second half of 2024. Growth in gross domestic product slowed to an annual 1.6pc in the third quarter from 2.1pc in the second quarter, according to Inegi. Inegi's IGAE, an index that tracks the real economy, showed that the Mexican economy contracted 0.73pc in October, as economists lowered growth estimates for the Mexican economy for this year. Pemex chief executive Victor Rodriguez in early October implemented a 20pc cut to the company's upstream budget, aiming to save Ps26.78bn ($1.32bn). This decision, combined with delays in payments for contracts and a halt in new service agreements, severely impacted local companies in Tabasco and Campeche, according to oil services company association Amespac. Some companies announced layoffs as Pemex's financial constraints rippled through the supply chain. Part of Tabasco's workforce reduction could also be tied to the near-completion of the 340,000 b/d Olmeca refinery, said Jesus Carrillo, an analyst at think tank IMCO. While the major construction phases have concluded, the facility remains in a testing phase, contrary to Pemex's previous promises of full operations in 2024. Despite the recent downturn, heavy Pemex spending during the administration of former president Lopez Obrador made Tabasco the leading state in job creation between December 2018 and December 2024, Ramirez said. But with the refinery now completed and Pemex projecting further budget cuts for 2025, analysts expect labor market challenges in oil-reliant states to persist. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU gas stockdraw in first half of Jan at four-year high


16/01/25
News
16/01/25

EU gas stockdraw in first half of Jan at four-year high

London, 16 January (Argus) — European firms boosted gas withdrawals in the first half of January to meet stronger heating-related demand and compensate for the drop in Russian supply following the end of Ukrainian transit. The European gas stockdraw has accelerated since the turn of this year. Combined EU withdrawals averaged 6.57 TWh/d on 1-15 January, the quickest stockdraw for the period since 8.7 TWh/d in 2021 and up from 4.1 TWh/d in the second half of December, according to GIE transparency platform data. Cold weather has boosted heating demand across much of the continent, particularly in recent days, increasing the call on stocks. Overnight lows in Paris, Milan, Essen and Amsterdam were 2-4°C below the seasonal average on 10-14 January. Quick withdrawals drew combined EU stocks down to 736TWh — 64pc of capacity — on the morning of 15 January. This is down from an average 908TWh and a 80pc fill level on the same date in 2023-24, but still above the 2021-22 average of 620TWh and 56pc of capacity. German withdrawals has been particularly strong over the past week. Withdrawals doubled to 2.4 TWh/d on 8-15 January from 1.2 TWh/d on 1-7 January. The quick stockdraw helped support exports to countries affected by the end of Russian transit gas on 1 January. Inflows of German gas to Austria at Oberkappel and the Czech Republic at VIP Brandov have risen to nearly 300 GWh/d in the first half of this month from a combined 48 GWh/d in December. These countries have also turned to underground reserves to compensate for the lost Russian supply. Austria withdrew 515 GWh/d on 1-15 January, up from 360 GWh/d in December. The stockdraw in the Czech Republic averaged 210 GWh/d on these dates, inching up from 205 GWh/d, as German imports compensated for a larger share of Russian flows . In northwest Europe, high weather-related UK demand pushed UK NBP prompt prices far above the Peg and ZTP, encouraging firms to direct Norwegian supply to the UK instead of France and Belgium. This led to slower Norwegian gas flows to France, which in turn contributed to the higher call on French underground storage. Firms also may have used withdrawn volumes to boost exports to Belgium, as high UK demand weighed on supply from the UK to Belgium on the Interconnector pipeline. The French stockdraw averaged 950 GWh/d on 1-15 January, up from a three-year average of 880 GWh/d for the period. Among countries with the largest storage capacity, the Netherlands has the lowest stocks in percentage terms. Its underground sites stood at 48pc of capacity on the morning of 15 January. Further south, the Italian stockdraw ramped up over the past week to help meet strong consumption and to make up for slower receipts from the Trans Adriatic Pipeline (Tap) after a partial outage at Azerbaijan's Shakh Deniz field. Spain has only 1.2TWh from which it can draw, with another 26TWh in storage that form the state-controlled strategic reserves and can be used only under certain conditions. But quick LNG imports so far this month have rapidly boosted the country's available supply, with LNG stocks having reached 11.2TWh on 15 January after reaching a seven-year low of 6.5TWh on 24 December. The pace of EU withdrawals will continue to largely follow changes in heating-related consumption for the remainder of January. And cold weather today was forecast to persist across much of Europe, with overnight lows in Amsterdam, Paris, Essen, Milan and Madrid anticipated to hover at 1-4°C below seasonal values over much of the next week. While heating-related consumption is likely to remain strong in the coming weeks, wider LNG supply availability could alleviate the call on storage. Several cargoes so far this month have diverted away from Asia towards higher-priced European markets, which may support LNG sendout in the continent later this month. By Isabel Valverde Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Monjasa first to offer biofuel for bunkering in Panama


16/01/25
News
16/01/25

Monjasa first to offer biofuel for bunkering in Panama

New York, 16 January (Argus) — Marine fuel supplier Monjasa will be the first biofuel for bunkering supplier in Panama. Monjasa's B30 is a blend of 30pc used cooking oil methyl ester (Ucome) with 70pc very low-sulphur fuel oil (VLSFO). It is available for delivery on barge in Cristobal, on Panama's Caribbean coast. Monjasa can also deliver B30 in Balboa, on the Pacific side of the canal "although this could lead to price adjustments due to logistical changes", Monjasa told Argus . The company can supply up to 7,000 metric tonnes (t) per month, but it aims to increase this capacity as well as offer additional grades and blend ratios. VLSFO demand on Panama's Caribbean side averaged at 57,912t/month in 2024 according to Panama Canal Authority data. Monjasa also sells biofuels for bunkering in Colombia and Peru. In Colombia, Monjasa has seen biofuel demand from container ship companies, RoRo vessels and most recently from cruise ships. In Peru, demand has been driven by dry bulk vessels used by several mining companies. In northwest Europe, B30 was assessed at $813/t average in the first half of January, 54pc higher compared than VLSFO which was at $528/t. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Marine biodiesel may face future supply constraints:DNV


16/01/25
News
16/01/25

Marine biodiesel may face future supply constraints:DNV

London, 16 January (Argus) — The use of biofuels in maritime transport has good potential to reduce greenhouse gas (GHG) emissions in shipping, but its supply may become tight in the future, according to Norwegian classification agency DNV. A vast majority of biodiesel production is currently routed towards the road sector, as most European countries have biofuel blending requirements for road diesel and gasoline. DNV's report said that the percentage of marine biodiesel used in shipping accounted for 0.3pc of the sector's total energy use in 2023 — according to data from the International Energy Agency (IEA). Fatty acid methyl ester (Fame) and hydrotreated vegetable oil (HVO) are currently the primary types of biofuels used in marine biodiesel blends, with Fame most prominent. The report acknowledged that waste-based Fame biodiesel can be utilised to meet regulations such as FuelEU Maritime , which came into effect this year, and potential International Maritime Organisation (IMO) mid-term measures in 2027 — which DNV expects to significantly boost demand for marine biodiesel. But with increasing demand and incentives to switch to marine biodiesel from conventional bunker fuels, the report pointed to potential supply limitations in the long term. These include scarcity of advanced waste-based feedstock and competition with other sectors such as aviation. Feedstock challenges could revolve around sources such as used cooking oil (UCO), and as a result DNV said that some suppliers are "investigating" the viability of alternative waste feedstocks that can feed into the marine sector. Biofuels produced from food and feed crops are not viable for regulations such as FuelEU Maritime, and it remains unclear whether they can meet the sustainability criteria under upcoming IMO mid-term measures. Further to feedstock scarcity are concerns around competition with other sectors, which have been voiced by market participants. But some participants have also said that while biodiesel suppliers may channel their feedstock towards aviation fuels because of higher margins, a potential source of fuel for marine could stem from by-products of sustainable aviation fuel (SAF) production. DNV's report also advised caution when using biofuels that do not comply with ISO 8217:2024 . This is more specifically relevant to off-spec biofuel blends or blends comprising novel feedstocks such as cashew nut shell liquid . By Hussein Al-Khalisy and Natalia Coelho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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