Cop 27: NDC updates stumble despite pact

  • Market: Emissions
  • 02/12/22

Only a small number of countries updated their nationally determined contributions (NDCs) either during or in the run-up to last month's UN Cop 27 climate conference in Sharm el-Sheikh, Egypt, as wider mitigation ambition at the summit proved tepid.

The Glasgow Climate Pact agreed at Cop 26 last year requested countries revise and increase their 2030 NDC targets, the urgency of which was underscored a few days before Cop 27 by the UN's NDC synthesis report showing that the pledges submitted before the event were still insufficient to meet the 1.5°C target. The 2015 Paris climate agreement aims to limit global warming to well below 2°C above pre-industrial levels, and ideally to 1.5°C.

But despite optimism from US climate envoy John Kerry that the summit would see firm progress on the issue, just five countries submitted official updates to their NDCs during Cop 27 itself — Timor Leste, Vietnam, Andorra, the Bahamas and Mexico.

A further four countries — Chile, the UAE, Kazakhstan and Turkey — announced their intention to update their NDCs at Cop 27, but official documents have not yet been submitted to the UN.

Largest emitters lag

This represents a marked absence of updates from the world's biggest economies, with Mexico and Turkey the only G20 members to have announced NDC revisions during the summit.

Mexico said it would cut its GHGs by 35pc by the end of this decade compared with 2000 levels, while Turkey committed to cut its emissions by 41pc by 2030 compared with a business as usual scenario, up from its previous target presented in October last year of a 21pc cut by the same date. But the country did not say when the new NDC would be submitted.

Australia had updated its 2030 NDC ahead of the conference in June, but its new target still falls short of the 75pc cut needed to help limit the global temperature increase to 1.5°C.

India formalised the commitments it had made at Cop 26 in an NDC submission in August.

The UK "strengthened" its NDC delivery plan in September, but did not increase its emissions cut targets. UK government advisory body the Climate Change Committee (CCC) warned in a post-Cop 27 report this week that "tangible progress has not been demonstrated across a host of areas necessary to meet the UK's 2030 NDC".

Other NDC updates hinge somewhat on awaited political developments. In Brazil, the election of Luiz Inacio Lula da Silva to be the country's next president has built expectations that it will develop a more ambitious, transparent and socially inclusive NDC for 2030.

Brazil only updated its NDC in April, but there are concerns surrounding the credibility of the document.

The EU indicated at Cop 27 that it will update its emissions cut targets only after negotiations between the European Commission, parliament and council on planned reforms to its emissions trading system are complete.

Methane in focus

One area that did see an increase in commitments at Cop 27, albeit largely outside the NDC framework, was methane emissions cuts.

The US during the summit pledged $20bn to tackle methane emissions, while a group of countries committed to "dramatically" reduce methane, CO2 and other greenhouse gases (GHGs) across the fossil fuel chain.

The US, the EU, the UK, Japan, Canada, Norway and Singapore also called for robust reporting and measurement, and for organisations to join the UN's oil and gas methane partnership — a reporting framework for the oil and gas sector.

China signalled a new direction, after choosing not to sign the Global Methane Pledge launched at Cop 26. The country, the world's biggest emitter of methane from fossil fuel operations, released a strategic plan to curb its methane emissions early on at Cop 27, although it is unclear to what extent this will involve mitigation from the coal sector.

A report from the UN, released during Cop, found that global methane emissions will rise by as much as 13pc by 2030, from current levels.

Weak conclusions

But overall progress on mitigation ambition at this year's summit was tepid. The final Cop 27 deal simply reiterated the need to reduce GHGs by 43pc by 2030 relative to 2019 levels, unchanged from pledges made at Cop 26.

Nations in the high level ambition coalition unsuccessfully pushed for the Cop 27 text to include stronger NDCs aligned with the 1.5°C limit goal, mentions of efforts for global emissions to peak by 2025 and a pledge to phase down fossil fuels. EU negotiators had also sought to make the creation of a loss and damage fund conditional on new updated emission reduction targets under the mitigation work programme.

The final deal did "not bring enough added efforts from major emitters to increase and accelerate their emissions cuts", EU executive vice-president and lead climate negotiator Frans Timmermans said following the conclusion of the agreement, warning that a lot of speed had been lost since Cop 26.

The CCC said in its post-Cop 27 report that the Glasgow Climate Pact's request to revisit and strengthen 2030 targets "has been met in a very limited way, with progress stalled on keeping the 1.5°C temperature goal within reach".

Non-governmental organisation the Environmental Defence Fund had expected to see more revised NDCs than were eventually put forward, the group's vice president for global climate co-operation Mandy Rambharos told Argus.

It is "no big surprise that the attention has been on the immediate issues" of the food and energy crises, exacerbated by the war in Ukraine and coming not long after countries began to recover from the Covid-19 pandemic, Rambharos said.

NDCs 'avenue' for action

But NDCs "provide a good avenue" to chart a course through which the climate crisis and the energy, food and water crises can be solved simultaneously, and this narrative needs to be driven more strongly, Rambharos said.

EDF is "cautiously optimistic" that more countries could come forward with more ambitious programmes.

"We saw a strong demonstration of possible solutions and initiatives from a broad range of stakeholders at the Cop," Rambharos said. "We are encouraged that this provides direction of the range of actions countries can avail themselves to raise the ambition of climate action."

Next year's Global Stocktake is a good opportunity to encourage this, Rambharos added. The two-year process, designed to take stock of the implementation of the Paris climate agreement, began at Cop 26 and will be finalised at next year's Cop 28 conference in the UAE.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
20/06/24

Canadian greenwashing bill passes

Canadian greenwashing bill passes

Calgary, 20 June (Argus) — A proponent of a major carbon capture and storage (CCS) project in Canada removed most information from its website this week after a federal bill targeting "greenwashing" successfully made its way through Parliament. The Pathways Alliance, a group of six oil sands producers, removed material from its website in response to Bill C-59 after it passed its third and final reading in Canada's senate on 19 June, citing "uncertainty on how the new law will be interpreted and applied." Parts of the soon-to-be law will "create significant uncertainty for Canadian companies," according to a statement by Pathways which is the proponent of a massive C$16.5bn ($12bn) CCS project in Alberta's oil sands region. The Pathways companies proposed using the project and a host of other technologies to cut CO2 emissions by 10mn-22mn t/yr by 2030. Project details and projections are now gone from the Pathways website, social media and other public communications as the pending law will require companies to show proof when making representations about protecting, restoring or mitigating environmental, social and ecological causes or effects of climate change. Any claim "that is not based on adequate and proper substantiation in accordance with internationally recognized methodology" could result in penalties under the pending law. Offenders may face a maximum penalty of C$10mn for the first offense while subsequent offenses would be as much as C$15mn, or "triple the value of the benefit derived from the anti-competitive practice." Invite to 'resource-draining complaints' The bill does not single out oil and gas companies, but the industry includes the country's largest emitters and has long been in the cross-hairs of the liberal government. Alberta's premier Danielle Smith says the pending bill will have the unintended effect by stifling "many billions in investments in emissions technologies — the very technologies the world needs." Construction of the Pathways project is expected to begin as early as the fourth quarter 2025 with operations starting in 2029 or 2030. The main CO2 transportation pipeline will be 24-36-inches in diameter and stretch about 400km (249 miles). It will initially tap into 13 oil sands facilities from north of Fort McMurray to the Cold Lake region, where the CO2 will be stored underground. Pathways includes Canadian Natural Resources, Cenovus, Suncor, Imperial Oil, ConocoPhillips Canada and MEG Energy, which account for about 95pc of the province's roughly 3.3mn b/d of oil sands production. Some producers took down content as did industry lobby group the Canadian Association of Petroleum Producers (CAPP), which highlighted the "significant" risk the legislation creates. "Buried deep into an omnibus bill and added at a late stage of committee review, these amendments have been put forward without consultation, clarity on guidelines, or the standards that must be met to achieve compliance," said CAPP president Lisa Baiton on Thursday. This "opens the floodgates for frivolous, resource-draining complaints." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more
News

EU warns of 2030 climate ambition gap


19/06/24
News
19/06/24

EU warns of 2030 climate ambition gap

Brussels, 19 June (Argus) — The European Commission has warned of an ambition gap on the way to member states achieving the bloc's 2030 renewables and energy efficiency goals, although it noted "some" progress. And European industry still faces comparatively high energy prices, the commission said in its twice-yearly report on countries' economies and finances. Increasing energy efficiency and switching to less costly renewable energy is "essential" to improve the competitiveness of European industry, but most EU states lack solid and sufficiently detailed investment estimations, as well as concrete measures to attract private clean energy finance, the commission said. And countries need to strengthen their carbon sinks from the land use, land-use change and forestry sectors. For Germany, the commission noted that the transport sector has failed to reach annual sector-specific emission targets, including in 2023 , when the sector increased final energy consumption by 6.3pc compared with 2022. EU states also need to strengthen policies to phase out fossil fuel subsidies so as to align with the EU goal of becoming a climate neutral economy, the commission said. For France, the commission estimated a net budgetary cost of emergency energy support measures at 0.9pc of GDP in 2023 and a projected 0.2pc in 2024, falling to 0pc in 2025. And for Italy the commission forecast a net budgetary cost of emergency energy support measures of 1pc of GDP in 2023, reaching 0pc in 2024. For Germany, the estimations are 1.2pc of GDP going to energy support measures in 2023, 0.1pc in 2024, and 0pc in 2025. Another of the commission's key recommendations is to cut the share of Russian imports in total EU gas imports beyond the 15pc seen in 2023, even if the share historically stood at around 40pc. Further efforts are needed from "certain" countries to phase out imports of LNG from Russia, the commission said. EU states have struggled to agree a further round of sanctions against Russia, which would include restricting the reloading of Russian LNG for export outside the EU at terminals in Europe. EU foreign ministers are expected to discuss the matter at a meeting on 24 June. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Australian opposition releases nuclear power plan


19/06/24
News
19/06/24

Australian opposition releases nuclear power plan

Sydney, 19 June (Argus) — Australia's main political opposition today laid out its nuclear energy plan. It aims to bring the first government-owned reactors on line as early as 2035-37 if it is elected next year. The Liberal-National coalition announced seven locations where small modular reactors (SMRs) or large-scale units could be installed, all in sites hosting coal-fired power facilities that have either closed or are scheduled to close, and each of them would have cooling water capacity and transmission infrastructure. A SMR could start generating electricity by 2035, while a larger plant could come on line by 2037, according to the coalition. "The Australian government will own these assets, but form partnerships with experienced nuclear companies to build and operate them," the opposition's leader Peter Dutton, spokesman for climate change and energy Ted O'Brien and National party leader David Littleproud said in a joint statement on 19 June. The opposition claims the federal Labor government's "renewables-only approach" is expensive and is "failing", while its target of reducing greenhouse gas (GHG) emissions by 43pc by 2030 has become "unachievable". The coalition earlier this month said it would not pursue the target, although it declined to set its own 2030 goal for GHG emissions cuts . Federal energy minister Chris Bowen said the coalition's plan lacked detail, costs or modelling, although the opposition has vowed to engage with local communities while site studies, including detailed technical and economic assessments, take place. The proposed sites are the Liddell and Mount Piper plants in New South Wales; the Tarong and Callide stations in Queensland; the Loy Yang facility in Victoria; the Northern Power station in South Australia; and the Muja plant in Western Australia. Nuclear power generation is prohibited in Australia under federal and state laws, and the Labor government last year ruled out legalising it because of its high costs. The Australian federal government estimates that replacing Australia's coal-fired plants with nuclear would cost A$387bn ($257bn) . The Commonwealth Scientific and Industrial Research Organisation (CSIRO) late last year said SMRs would not have "any major role" in emission cuts needed in the electricity sector for the country to reach its net zero GHG emissions target by 2050, as costs would be well above those for onshore wind and solar photovoltaic (PV). Nuclear plants would also take 15 years or more to be deployed because of lengthy periods for certification, planning and construction, CSIRO noted. CSIRO last month included large-scale nuclear costs for the first time in its annual GenCost report, saying costs would be lower than those for SMRs but still way above renewables. Estimated costs between A$136-226/MWh could be reached by 2040, compared with A$171-366/MWh for SMRs and A$144-239/MWh for coal-fired power with carbon capture and storage (CCS), but only if Australia committed to a "continuous nuclear building programme", requiring an initial investment in a higher cost unit. "If a decision to pursue nuclear in Australia were made in 2025, with political support for the required legislative changes, then the first full operation would be no sooner than 2040," CSIRO noted. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

New Zealand's carbon credit auction fails to clear


19/06/24
News
19/06/24

New Zealand's carbon credit auction fails to clear

Sydney, 19 June (Argus) — New Zealand's second quarterly carbon allowance auction of 2024 failed to clear today, with no bids because prices in the secondary market have been below the regulated auction price floor of NZ$64 ($39). A total of 4,075,700 New Zealand emissions units (NZUs) were left unsold, including 550,700 remaining from the previous auction in March, which sold 2,974,300 units out of the 3,525,000 offered. No company participated in the 19 June auction, which compares with 16 in the previous sale. This was the first time that no bids were received since the auctions started in 2021. All available units will be rolled over to the next auction on 4 September. The secondary market closed at NZ$49 on 18 June, the New Zealand Stock Exchange (NZX) and European Energy Exchange (EEX) — which jointly operate the country's Emissions Trading Scheme (ETS) auction — disclosed on 19 June. Prices fell below NZ$45 and neared one-year lows at the end of May, then recovered to around NZ$55 in early June before falling back again, according to data from trading platforms emsTradepoint, CommTrade and Carbon Match. Policy uncertainty and an increasing oversupply have been affecting NZU prices in recent months. New Zealand's government has until September to decide whether it will follow advice from the country's Climate Change Commission (CCC) to reduce auction volumes to address the oversupply. "If there is no announcement on CCC recommendations before the September auction then that will also likely see no sales," said NZX-listed investment fund Carbon Fund's managing director Paul Harrison. All auctions of 2023 failed, with a total of 23mn unsold units being cancelled as a result. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Mexico GHG program still in limbo: MexiCO2


18/06/24
News
18/06/24

Mexico GHG program still in limbo: MexiCO2

Houston, 18 June (Argus) — Despite Mexico's election of a new president with a background in climate science, it is not clear if the new leadership will revive a stalled national emission trading system (ETS), according to one of the country's top carbon market advocates. President-elect Claudia Sheinbaum, the candidate for the ruling Morena party, won the 2 June election to succeed President Andrés Manuel López Obrador. But it is unclear, ahead of her inauguration on 1 October where Sheinbaum will land on wrangling the emissions program and the country's climate commitments and goals, says Eduardo Piquero, chief executive of MexiCO2, a carbon market advocate and a subsidiary of Mexico's stock exchange. "The only hint we've had so far is during some presidential debates, she mentioned she was very keen on climate change and was going to act on Mexico's commitment," Piquero said. Mexico launched a pilot ETS in 2020, with plans to launch a formal national program in 2022. The pilot-phase covered facilities in the energy and industrial sectors that emitted more than 100,000 metric tonnes of CO2 per year, which received allowances at no cost. More than two years after the expected launch of a national market, a formal rollout remains in limbo, primarily because of a lack of action by the government under López Obrador, who Piquero credits with dismantling much of the program along with Mexican environment ministry Semarnat, which oversaw the program. Putting the program and Semarnat back together could take between 2-3 years, Piquero says. Sheinbaum, the former mayor of Mexico City and a climate scientist, has not yet said what her plans are, if any, for a federal emissions trading scheme. A federal ETS will also require new legislation, given the pilot expired after 36 months, and regulators will need to convince major covered participants such as state-owned oil and gas company Pemex and power producer CFE to take part in the official program. The government will also need to reconcile how the ETS will work with the country's state and local programs, such as state carbon taxes in Durango, Guanajuato, San Luis Potosi, Querétaro, Zacatecas, Tamaulipas, and Estado de México, along with others in-development. Currently, Mexico has a goal of a 35pc reduction in greenhouse gas (GHG) emissions by 2030 from a 2000 baseline. Despite a lack of policy specifics, Sheinbaum pledged to deliver on commitments of her predecessor for items like infrastructure development in southeast Mexico for new natural gas and gas-fired power generation — moves that may not support resumption of the ETS and limiting the nation's emissions. "The only way Mexico can measure and control its emissions is through an ETS," Piquero said. Sheinbaum is set to announce government appointments this week, which would include her choice to head Semarnat, a choice that will color discussions on the future for the ETS program. Piquero expects the job will go to one of two candidates: Marina Robles García, secretary of the environment of Mexico City, or Jose Luis Samaniego, a division chief with the UN Economic Commission for Latin America and the Caribbean. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more