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Africa claims leadership role in global climate fight

  • Market: Coal, Crude oil, Electricity, Emissions, Natural gas
  • 10/11/23

African countries need to see an overhaul of global financial support to leapfrog their economies straight to low-carbon energy, writes Elaine Mills

African heads of state have reframed Africa's role in the global climate-change crisis by asserting a new leadership status for the continent and underscoring its abundant clean energy minerals and renewable energy resources as a potential solution. In return, they called for debt relief for African countries, a global carbon tax and a raft of reforms of the international financial system to support climate action on the continent and worldwide.

The proposal formed part of the "Nairobi declaration" issued at the inaugural Africa Climate Summit in Nairobi, Kenya, in September. This will underpin Africa's common position in negotiations at the UN Cop 28 climate conference in the UAE later this month, and beyond. Leaders committed to aiding global decarbonisation efforts by leapfrogging traditional industrial development, striking a different tone to their previous rhetoric, which was that Africa would pursue industrialisation by any means, including continuing to exploit its domestic oil and gas resources.

According to Kenyan president William Ruto, renewable energy can be just as strong a driver of Africa's economic development as oil and gas. So Kenya will still press ahead with its plans to develop its oil and gas reserves, but just not as a priority, he said. But Kenya's stance contrasts with other African hydrocarbon producing countries, such as Uganda, Nigeria and Senegal, which say that they need to tap their oil and gas resources to develop their economies.

The IEA, in its Africa Energy Outlook 2022, said that Africa's industrialisation will partly rely on exploiting its more than 5 trillion m³ of natural gas that has been discovered but not been approved for development. Cumulative greenhouse gas emissions from the use of these gas resources over the next 30 years would bring the continent's global emissions share to only 3.5pc, the IEA says.

As Africa is the continent most vulnerable to climate change, African leaders have depicted it as a victim of a crisis created by the industrialised world. As such, they insist that Africa will chart a "just energy transition" of its own choosing without being dictated to by the west. But at the Nairobi summit, they signalled more willingness to take part in the global shift away from fossil fuels — and to take advantage of the economic development opportunities this holds for Africa.

"The Africa Climate Summit asserted new leadership on global climate action from the continent most vulnerable to its impacts," E3G programme lead for climate diplomacy and geopolitics Alex Scott said. Ruto shepherded a declaration by African leaders calling for accelerated climate action, mobilising a massive scale of investment in green transition and adaptation in Africa, and reforming the finance system for fairer financing and debt management, Scott said.

Climate-positive thinking

World leaders should "appreciate that decarbonising the global economy is also an opportunity to contribute to equality and shared prosperity", the summit declaration says. "We urge world leaders to rally behind the proposal for a [global] carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation," it adds. This could be supplemented by a global financial transaction tax to fund climate-positive investments, which should be ring-fenced from geopolitical and national interests, the declaration suggests.

African leaders also called for "a new financing architecture that is responsive to Africa's needs" and "collective global action to mobilise the necessary capital for both development and climate action". As part of this, they want to see debt restructuring and relief for African nations, a 10-year grace period on interest payments, an extension of sovereign loans, and debt repayment pauses when climate disasters strike. With these aims in mind, they suggest a new global climate finance charter should be developed through UN and Cop processes by 2025.

They also appealed for an increase in concessional finance to emerging economies, as well as reforms of the international financial system to ease the high cost of capital for African nations. "The scale of financing required to unlock Africa's climate-positive growth is beyond the borrowing capacity of national balance sheets, or at the risk premium that Africa is currently paying for private capital," the declaration says. Africa's annual climate finance needs total $250bn, but it only receives 12pc of this, according to the non-profit Climate Policy Initiative.

African leaders further called for a range of measures to "elevate Africa's share of carbon markets". The International Emissions Trading Association (Ieta) welcomed African countries' increasing interest in carbon markets and expressed hope that more would set up carbon pricing programmes to enable stronger national emissions-reduction contributions. But it baulked at the idea of a global carbon tax, which is "unlikely" to gain political traction, and highly difficult to manage centrally by the UN Framework Convention on Climate Change or any organisation.

A more practical and speedy approach would be to expand the use of national carbon markets that recognise a common pool of international carbon credits, Ieta said. "This could channel large amounts of private-sector capital to climate mitigation opportunities in Africa under Article 6 of the Paris climate agreement."

The leaders called for global and regional trade mechanisms to be designed in such a manner that "African products can compete on fair and equitable terms". In support of this, they called for unilateral and discriminatory measures such as environmental trade tariffs to be eliminated. In return, they committed to aid global decarbonisation efforts by "leapfrogging traditional industrial development and fostering green production and supply chains on a global scale". They expressed concern that only 2pc of $3 trillion in renewable energy investments in the past decade have come to Africa, despite the fact that the continent has an estimated 40pc of the world's renewable energy resources, according to the declaration.

We're all in this together

African leaders called on the international community to contribute towards increasing the continent's renewable power generation to at least 300GW by 2030 from 56GW in 2022. Meeting this target will cost an estimated $600bn and will require a tenfold increase in capital flowing into Africa's renewable energy sector over the next seven years, they said. The UAE pledged $4.5bn to accelerate the development of clean energy projects, which far exceeded the pledges of other governments, such as the US, the UK and those in the EU.

Developed countries have come under fire after missing a goal set in 2009 to provide $100bn/yr in climate financing to developing countries by 2020. The target may finally be hit this year. Just a few days after the Africa Climate Summit, the G20 summit in Delhi echoed the Nairobi declaration's clarion call for an overhaul of the global financial system. The Delhi declaration included new language on the issue of global debt, proposed that the World Bank should be reformed to address the growing economic strains on poorer countries and advocated more financing to help vulnerable nations deal with the costs of climate change.

It also showed agreement on raising investment in energy transition and climate finance from "billions to trillions" of dollars. The declaration highlighted that $5.8 trillion-5.9 trillion was needed pre-2030 to help developing nations implement their nationally determined contributions, as well as $4 trillion/yr for clean energy technologies by 2030 to reach net zero emissions by 2050. Whether African countries can advance their call for a radical reform of the global financial system at Cop 28 will be key to affirming their proclaimed new leadership role in global climate talks.


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13/02/25

Better Opec+ compliance narrowing supply surplus: IEA

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London, 13 February (Argus) — The IEA said today that the Opec+ alliance's improving compliance with agreed crude production targets is "slowly chipping away" at its projected supply surplus this year. In its latest Oil Market Report (OMR), the Paris-based agency again lowered its forecasted surplus for this year, this time by 270,000 b/d to 450,000 b/d. This is the agency's third consecutive downgrade since November, when it saw 2025 supply outstripping demand by 1.15mn b/d. These forecasts are subject to change. With data now "largely complete" for 2024, the agency's balances show supply matching and demand exactly at 102.9mn b/d. This is a long way off the 800,000 b/d supply surplus the IEA forecast for 2024 this time last year. Opec+ is implementing three sets of crude production cuts, and is scheduled to start unwinding one of these — totalling 2.2mn b/d — starting in April. A recent meeting of the group's key producers signalled no change to this plan . The IEA continues to assume all Opec+ cuts will remain in place this year. But the agency said that should production return as planned, this would add 430,000 b/d to its 2025 supply forecast. Aside from Opec+, there are other key supply uncertainties this year. These range from new US sanctions targeting Russian and Iranian oil exports to US tariffs on some of its key trading partners. "It is still too early to tell how trade flows will respond to new US tariffs or the prospect thereof, and what the impact of the escalation of sanctions on Iran and Russia may be in the longer run," the IEA said. As thing stand, the IEA sees global oil supply growing by 1.56mn b/d this year to 104.45mn b/d, compared with growth of 1.76mn b/d projected in its January report. This slower growth was largely driven by Opec+, which the agency now sees supplying 170,000 b/d less than previously thought this year. It also noted a 950,000 b/d fall in global oil supply in January, "with extreme cold weather hitting North American supply, compounding large declines in Nigerian and Libyan production." On demand, the agency upgraded its growth forecast this year by 50,000 b/d to 1.1mn b/d. It sees oil demand at 104mn b/d in 2025, driven by "a minor pickup in GDP growth and lower oil prices as per the current forward curve." The IEA said global observed oil stocks fell by 17.1mn bl in December. Crude stocks fell by 63.5mn bl and products stocks rose by 46.4mn bl. It said preliminary data show global stocks falling by 49.3mn bl in January, led by large draw in China. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Mexico factory output dips 1.4pc in December


12/02/25
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12/02/25

Mexico factory output dips 1.4pc in December

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Italy mulling changes to EU gas stock targets: Boschi


12/02/25
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12/02/25

Italy mulling changes to EU gas stock targets: Boschi

London, 12 February (Argus) — Italy is exploring the idea of lower EU gas storage targets, but no decisions have yet been made, the energy chief at Italy's environment and energy security ministry told Argus . A decision on whether to scrap, change or renew the EU rules implemented in 2022 that required a 90pc EU stockfill on 1 November last year and require the same this coming November could be taken in the coming weeks, energy department head Federico Boschi said. "The [existing] stockfill obligations end on 31 December 2025 and as such, there is space for either a halt, a change or an extension," Boschi said, without specifying whether Italy might advocate for a lower target on 1 November 2025 or beyond, or both. Asked whether Italy was seeking a capacity target for gas storage injections, Boschi said the government had also not yet taken a position. "As far as I know, we have no specific target in mind," he said. Filling storage capacity would benefit energy security, but it could also affect prices and favour speculation by increasing demand when it might otherwise be low, Boschi said. The EU stockfill regulations aim to ensure adequate winter gas reserves. But European summer-winter gas price spreads remain inverted out several years, providing no incentive to book storage capacity during that time. PSV summer 2025 prices closed €4.81/MWh above the winter 2025-26 contract on Tuesday. Seasonal contracts on Argus Italian curve do not extend beyond that, but EU benchmark Dutch TTF summer-winter spreads for storage years 2026-27 and 2027-28 closed at +€2.805/MWh and +€0.20/MWh, respectively, on Tuesday. Italy — the EU member with the second-largest storage capacity after Germany — has been looking at a raft of options to curb energy prices for businesses and households, which are among the highest in Europe. The Italian government approved legislation last week to bring forward storage auctions for the 2025-26 year to allow the market to book capacity if price spreads become favourable in February-March. Italian storage operator Stogit plans to offer 2.5bn m³ of capacity starting from 1 April across products lasting 1-5 years on 17 February-19 March. Compatriot storage operator Edison Stoccaggio plans to offer around 900mn m³ of 2025-26 capacity, but has yet to announce auction dates. In any event, the EU's Gas Co-ordination Group is scheduled to meet on Thursday and may discuss gas storage targets. By Stephen Jewkes and Jeff Kuntz Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US inflation quickens to 3pc in January


12/02/25
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12/02/25

US inflation quickens to 3pc in January

Houston, 12 February (Argus) — US consumer inflation accelerated in January to the fastest pace in half a year, supporting the Federal Reserve's recent decision to pause in its course of rate cuts. The consumer price index (CPI) rose by 3pc in January from a year before, accelerating from 2.9pc in December, the Bureau of Labor Statistics reported today. That marked a fourth month of annual gains from a low of 2.4pc in September. Core inflation, which strips out volatile food and energy, rose by an annual 3.3pc in January from 3.2pc in December. The acceleration in inflation reinforces the Fed's decision last month to hold its target rate steady after three prior rate cuts. The Fed has said it does "not need to be in a hurry" to change its stance while it weighs the impacts of President Donald Trump's tariff policies and other "incoming information". Trump won the November election partly on a pledge to bring down inflation. The energy index rose by 1pc in January following a 0.5pc contraction through December. Gasoline fell by 0.2pc in January after a 3.5pc contraction through December. Piped gas rose by 4.9pc for a second month. Food rose by an annual 2.5pc, matching the prior month's annual gain. Eggs surged by an annual 53pc, as avian flu has slashed supply. Shelter rose by 4.4pc, accounting for 30pc of the overall monthly gain in CPI, slowing from 4.6pc in December. Services less energy services rose by 4.3pc in January following a 4.4pc gain New vehicles fell by 0.3pc after a 0.4pc contraction. Transportation services rose by an annual 8pc in January after a 7.3pc gain in December. Car insurance was up by an annual 11.8pc and airline fares were up by 7.1pc. CPI accelerated to 0.5pc in January from the prior month, the most since August 2023. That followed a monthly gain of 0.4pc in December, 0.3pc in November and three prior months of 0.2pc gains. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US trade policy adds uncertainty to oil market: Opec


12/02/25
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12/02/25

US trade policy adds uncertainty to oil market: Opec

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