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EU to mull 90pc GHG emissions cut by 2040

  • Market: Battery materials, Biofuels, Biomass, Coal, Crude oil, E-fuels, Electricity, Emissions, Hydrogen, Natural gas, Oil products
  • 06/02/24

The European Commission today presented policy documents confirming its preference for a 90pc net greenhouse gas (GHG) emissions reduction by 2040 for the bloc, compared with 1990 levels.

Excluding emissions from agriculture and forestry sectors, the commission calculates that net GHG cuts of 90pc would leave remaining EU GHG emissions in 2040 of under 850mn t/CO2 equivalent (CO2e), with carbon removals reaching up to 400mn t/CO2. Removals would include both "land-based and industrial carbon removals", according to the documents. The commission's industrial carbon management strategy, released today, sets out the need for 280mn t/yr of CO2 storage capacity by 2040 for the EU.

The commission's carefully worded target refers to a "net GHG emissions reduction of 90pc". To secure a majority in October's European parliament nomination vote, climate commissioner Wopke Hoekstra had made a "personal" commitment to defend a "minimum target of at least 90pc" net GHG cuts. The objective of the communication and impact assessment is to launch the political debate on post-2030 legislation, rather than to propose new policy measures or set new sector-specific targets, officials said.

Electrification with a fully decarbonised power system by 2040 is portrayed as the main driver of energy transition. The commission calculates that the share of power in final energy consumption would double from 25pc today to 50pc in 2040. Officials project the shares of battery-electric and other zero-emission vehicles will rise to over 60pc for cars, over 40pc for vans and almost 40pc for heavy-duty vehicles by 2040.

The documents set out cost estimates for the transition, which amount to "close to €660bn ($709bn) per annum on average" over 2031-50 for energy system investment — equivalent to 3.2pc of gross domestic product (GDP). This is compared with investment of €250bn/yr over 2011-20, although that was "a decade with relatively low investments in the energy system", the commission noted. The documents suggest annual spending on transport would be around €870bn, equivalent to 4.2pc of GDP, which is a similar proportion to transport spend in 2011-20. Progress on the circular economy could cut costs, the commission added.

The commission's preferred option of cutting GHG emissions by 90-95pc by 2040, set out in an impact assessment, previously leaked, sets a "clear transition path away from fossil fuels". The commission calculates that 2040 consumption of fossil fuels for energy would decrease by 80pc compared with 2021 — updating a possible error in the leaked documents, which mentioned a baseline year of 1990. Coal would be "phased out" with road, maritime and oil consumption representing 60pc of remaining energy use of fossil fuels.

Policies should ensure that "any remaining fossil fuel combustion will be coupled as soon as possible with carbon capture [utilisation] and storage", following the commitment made in December at the UN Cop 28 climate summit on "transitioning away" from fossil fuels, the commission said. The gas market would change with an increasing role for low-carbon and renewable liquid fuels and gases, it added.

But the documents give no clear date on a fossil fuel phase out. "This is about as meaningful as a target to prevent lung cancer without any plan to end smoking," Greenpeace EU climate campaigner Silvia Pastorelli said, pointing to the lack of a specific target date to phase out coal, oil and gas, or fossil-fuel subsidies.


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18/02/25

Nigeria cuts oil theft, upbeat on output growth plan

Nigeria cuts oil theft, upbeat on output growth plan

Lagos, 18 February (Argus) — Nigeria's upstream regulator NUPRC said losses from oil theft have fallen to just 5,000 b/d, down from 15,000 b/d in August of last year. At its peak in 2018, theft was costing Nigeria as much as 150,000 b/d, according to the Nigeria Extractive Industries Transparency Initiative. Sustained security interventions by the government have been successful in tackling the problem, said NUPRC chief executive Gbenga Komolafe. "Oil theft has significantly reduced to 5,000 b/d, leading to a steady [liquids] production increase to 1.7mn b/d," he added. State-owned oil firm NNPC said security measures have led to around 1,861 illegal connections being removed from pipelines, while 677 points of vandalism were found and fixed over the past 12 months. About 4,124 illegal refineries and 1,897 boats laden with stolen crude were also destroyed within the same period, NNPC said. NUPRC said last year that a forensic study showed 40pc of losses previously attributed to theft in 2020–22 were caused by metering inaccuracies. In July last year, the regulator launched an audit of Nigeria's 187 upstream flow stations to determine where meters are outdated or broken and which designated measurement points lack the required equipment. The audit was to have been completed by November 2024 but an NUPRC source told Argus that it is only being completed now. Komolafe also said a programme that aims to add 1.07mn b/d to Nigeria's liquids output by December 2026 is on track. The ambitious initiative aims to leverage "collaboration among operators, service providers, financiers and host communities", Komolafe said. The programme forecasts an injection of $1.45bn of capital into Nigerian oil blocks under joint venture agreements, $1.11bn into blocks under production-sharing contracts and $650mn into blocks under sole risk contracts. This investment will respectively yield additional output of 470,800 b/d, 224,700 b/d and 374,500 b/d, according to NUPRC. Nigeria has struggled with mobilising upstream investment in the past and has consistenly fallen short of less ambitious production growth targets in recent years. But an NUPRC source told Argus that easy wins are possible under the latest output growth programme, including 42,800 b/d from restarting shut-in wells, 74,900 b/d from the ramp-up of fields recently brought online, 96,300 b/d from drilling new wells and 256,800 b/d from well re-entry. The chief executive of local operator Heirs Energies, Osayande Igiehon, said his company restarted 40 shut-in wells in oil block OML 17, which the company operates with a 45pc stake in a joint venture with NNPC, between the third quarter of last year and 11 February this year. Production has risen to 55,000 b/d, up from 35,000 b/d in January of last year, he said. Nigeria has "the infrastructure in place to deliver up to 2mn b/d, more than 2mn b/d, but a lot of it is shut in, is closed in or is poorly worked," Igiehon said. "Beyond 2mn b/d, we need to do a lot of greenfield investments onshore, in shallow water and in the deep water, investments that will take a longer gestation period," he said. NUPRC data show Nigeria's liquids production rose by 4pc on the month to 1.74mn b/d in January, of which 1.54mn b/d was crude, leaving the country 2.6pc above its Opec+ quota. Argus estimates put Nigeria's January crude production lower, at 1.51mn b/d . Nigeria's junior oil minister Heineken Lokpobiri said the government expects a significant portion of the country's targeted oil output growth will be condensate. The government is considering infrastructure interventions to reduce the co-mingling of crude and condensate, further separation of condensate streams from crude streams in transportation and storage, and to increase marketing of Nigerian output as condensate. By Adebiyi Olusolape Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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H2Med FID unlikely before 2028: Spain's Enagas


18/02/25
News
18/02/25

H2Med FID unlikely before 2028: Spain's Enagas

Paris, 18 February (Argus) — A final investment decision (FID) for the H2Med cross-border European hydrogen corridor is unlikely to be taken before 2028, according to Spanish gas transmission system operator (TSO) Enagas. The FID will "have to be connected to [the awarding] of European funding necessary to undertake the development of the infrastructure", a process that could take some years, Enagas' chief financial officer Luis Romero Urrestarazu said during the company's results call today. Enagas and the H2Med partners are carrying out preliminary studies, for which the European Commission approved funding of €97.3mn ($102mn), the Spanish firm said. Once studies are completed, the firms will "have to go through a whole series of procedures with the European institutions," Urrestarazu said. "We have to file the investment project with the regulators, and eventually, we'll be able to request the funds for construction," he said. Because of this process, Enagas does not see FID for H2Med being taken before 2028. The H2Med consortium will announce more details "when we have more visibility of the timeline," he said. The H2Med corridor aims to transport renewable hydrogen from production centres in the Iberia peninsular to buyers in Germany. Its promoters are targeting 2mn t/yr of transport capacity by 2030, but that appears to be an ambitious timeline with the FID still years away. Enagas plans to take FID for the Spanish hydrogen backbone, which is part of H2Med, by the end of 2027, targeting commissioning in 2030. The company received approval from the Spanish government in late 2023 to be provisional operator of the country's hydrogen grid. This allows it to start the public consultation process and the environmental impact plan, according to Urrestarazu. The Spanish network is planned to have 2,600km of pipelines, 21pc of which will be repurposed gas pipelines, and two underground storage facilities. The TSO is proposing extensions to the backbone's original plans following a recent market survey. In addition to the pipelines, Enagas is developing a network of six hydrogen refuelling stations in Spain, which is expects to start commissioning in 2027. The facilities are planned to have combined supply capacity for 6 t/d of hydrogen, which could refuel 300 trucks per day. Overall, Enagas plans to invest more than €3.1bn in hydrogen infrastructure until 2030. It is also developing infrastructure for CO2 capture, storage and liquefaction in industrial areas, as well as ammonia facilities around ports in Spain. By Pamela Machado Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Japan approves new energy mix target, climate plans


18/02/25
News
18/02/25

Japan approves new energy mix target, climate plans

Tokyo, 18 February (Argus) — Japan has approved its targeted power mix portfolio for the April 2040-March 2041 fiscal year, as well as its new greenhouse gas (GHG) emissions reduction goal, it announced today. The new power mix goal, the centrepiece of the country's Strategic Energy Plan (SEP), is in line with Japan's aim to reduce GHG emissions by 73pc by 2040-41 compared to 2013-14 levels. Tokyo plans to submit the 2040-41 emission target, as well as a 60pc emissions reduction goal for 2035-36, to the UN climate body the UNFCCC on 18 February as the country's nationally determined contribution (NDC). The country has not made major changes to its draft proposal that it unveiled in December. The new SEP sees renewable energy making up 40-50pc of the country's power generation in 2040-41, up from 22.9pc in 2023-24. The share of thermal power will fall to around 30-40pc from 68.6pc, while that of nuclear will increase to around 20pc from 8.5pc during the same period. The 2040-41 target is based on Japanese power demand of 1,100-1,200 TWh, which is higher by 12-22pc from 2023-24. The government has planned the power portfolio so that it is not heavily dependent on one specific power source or fuel type, the country's minister for trade and industry (Meti) Yoji Muto said on 18 February, although the new plan suggests making maximum use of low-carbon power supply sources. Public consultation over 27 December-26 January revealed that some think Japan should slow or even stop the decarbonisation process, given the US government's reversal of its climate policies, including its withdrawal from the Paris climate agreement, said Meti. But global commitment to decarbonisation will remain unchanged, said Muto, adding that Japan will lose its industrial competitiveness if the country delays green transformation efforts. But US president Donald Trump's "drill, baby, drill" policy has prompted the Japanese government to delete a segment from the draft SEP that had initially proposed bilateral co-operation through Tokyo's green transformation strategy and the US' Inflation Reduction Act. Despite Tokyo's decarbonisation goals, the new SEP assumes that fossil fuels, including natural gas, oil and coal, will still account for over 50pc of primary energy demand in 2040-41 in all of its scenarios — although this is down from 93pc in 2013-14 and 83pc in 2022-23. The scenarios vary based on the degree of uptake of renewables, hydrogen and its derivatives, and carbon capture and storage (CCS) technologies, to fulfil the 73pc emission reduction goal by 2040-41. Worst-case scenario Tokyo also has also set out a potential worst-case scenario, assuming slower development of clean technologies, in which fossil fuels would still account for 67pc of primary energy supply in 2040-41. Under this scenario, which assumes Japan will only reduce its GHG emissions by around 61pc by 2040-41, natural gas is estimated to account for about 26pc, or 74mn t, of Japan's primary energy supply, which is higher than the 53mn-61mn t in the base scenarios that are formulated in accordance to the 73pc emissions reduction target. Japan would need to address the potential 21mn t gap in gas demand, which will mostly be met by LNG imports, in 2040-41, depending on the development of clean technologies. The gap is equivalent to 32pc of the country's LNG imports of 65.9mn t in 2024. When asked by Argus whether the government will continue to try securing LNG to ensure energy supply security when considering the worst-case scenario, a Meti official said Tokyo should continue pursuing its 73pc GHG reduction target, but it is necessary to consider the potential risks for each individual policy and the measures that need to be taken, instead of making decisions based on the worst-case scenario. The new SEP has highlighted the role of LNG in the country's energy transition and the necessity to secure long-term supplies of the fuel. It is unclear what ratio gas-fired capacity will account for in Japan's 2040-41 power mix, as the SEP does not include a breakdown of thermal generation. But gas-fed output is expected to take up the majority share, given that gas has already outpaced coal in power generation and Tokyo has pledged to phase out inefficient coal-fired plants by 2030. By Motoko Hasegawa and Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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India's domestic coal supply to utilities rises in Jan


18/02/25
News
18/02/25

India's domestic coal supply to utilities rises in Jan

Singapore, 18 February (Argus) — Domestic thermal coal supplies to Indian utilities rose in January as power plants continued to boost inventories. Combined coal supplies to utilities from domestic sources such as state-controlled Coal India (CIL), Singareni Collieries (SCCL) and captive blocks stood at 76.41mn t, up by 5.8pc from a year earlier, provisional data from India's coal ministry show. Supply was also up from 76.04mn t in December. Indian utilities continued to restock, although coal consumption at utilities was weaker than initially anticipated, as temperatures in most parts of the country were higher last month compared to historical averages, curbing power demand. India's coal-fired generation — which meets most of its power requirements — stood at 109.68TWh during January, down from 111.72TWh a year earlier, but up from 104.30TWh in December, Central Electricity Authority (CEA) data show. Higher domestic coal supplies and weaker coal burn supported stock positions at utilities. Combined coal inventories at Indian power plants stood at around 50.5mn t on 31 January, up from 45.2mn t on 31 December and higher from 38.59mn t as of 31 January 2024, according to CEA data. The inventory as of the end of January would last for over 17 days at the current daily coal consumption rate at utilities. Higher stocks and a steady uptick in domestic supplies might have pressured utility demand for imported coal and India's overall seaborne receipts last month. India imported 11.63mn t of thermal coal last month, down from 13.34mn t a year earlier, according to data from analytics firm Kpler. Imports reached 163mn t in 2024, down from 168.2mn t in 2023, Kpler data show. Indian power sector imports, which account for more than 40pc of the country's overall imports, dropped on the year for the fourth straight month in December , and might have eased in January. Combined thermal coal imports by Indian utilities, excluding captive power plants, stood at 3.25mn t in December, down by 2.17mn t or 49pc from a year earlier, CEA data show. Imports could come under pressure if the government does not extend its directive to imported coal-fired plants, which have a combined capacity of 17.7GW, to boost generation under Section 11 of the Indian electricity law, which also gives some flexibility to such generators to sell excess production in the power market. The directive is due to expire on 28 February. Production, supply mix The increased supplies to utilities were supported by higher overall thermal production. India's coal output rose by 4.4pc in January from a year earlier to 104.49mn t. The country's supplies to all sectors stood at 93.21mn t last month, up by 6.7pc on the year. CIL produced 77.79mn t in January, down from around 78.41mn t a year earlier, while it supplied 69.26mn t, rising from 67.52mn t last year, ministry data show. Of this, 55.01mn t of coal was supplied to the power sector in January, easing from 55.15mn t a year earlier. Meanwhile, output at coal producer SCCL rose by 5pc from a year earlier to 6.97mn t in January. But its overall supplies in January fell by about 1.5pc on the year to 6.12mn t, while dispatches to the power sector rose by 2.2pc on the year to 5.6mn t. Captive coal block producers and other small government mining entities comprised the remainder of the supplies to utilities in January. Output from captive coal blocks and other mining companies rose by over 31pc on the year to 19.72mn t in January, while supplies rose by nearly 30.7pc to 17.83mn t. Data on domestic coal supplies to Indian utilities do not include dispatches to captive power plants set up by industries. Supplies to such captive utilities — from sources such as CIL, SCCL and captive coal blocks — reached 6.29mn t in January, up by almost 9pc from a year earlier. Domestic supplies to steel and cement sector in January rose by 4.5pc and 31pc from a year earlier to 860,000t and 900,000t respectively, the ministry data show. By Saurabh Chaturvedi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Australia's Virgin, Qatar given approval to add flights


18/02/25
News
18/02/25

Australia's Virgin, Qatar given approval to add flights

Sydney, 18 February (Argus) — Privately-held airline Virgin Australia has been given approval by the Australian Competition and Consumer Commission (ACCC) for a planned agreement with state-owned carrier Qatar Airways to boost international flights to Australia. The proposed co-operation includes 28 new weekly return flights from Doha to Perth, Brisbane, Sydney and Melbourne beginning in mid-2025, and is likely to benefit travellers and increase choices for consumers, the ACCC said. Virgin plans to wet-lease aircraft from Qatar to operate the services and has already commenced selling fares. Virgin entered voluntary administration during the Covid-19 pandemic in 2020 before being sold to US private equity investor Bain Capital. The company, Australia's second-largest consumer of jet fuel, formerly operated long-haul flights but has since only operated flights to Australia, New Zealand, the Pacific and Indonesia. Qatar agreed to buy a minority 25pc stake in Virgin in 2024 as part of its expansion into Australia after it was refused authorisation to increase flights to the country by the federal transport minister. The Australian Foreign Investment Review Board and federal treasurer have yet to approve the deal. Australia's sales of jet fuel for international flights averaged 91,000 b/d in 2024, up by 17pc on the year from 78,000 b/d in 2023, according to Australian Petroleum Statistics. Total jet fuel sales were at 161,000 b/d. International jet fuel sales totalled 102,000 b/d in 2019, the final full year before the pandemic. Australia's jet fuel imports totalled 128,000 b/d in 2024, up by 8pc on the year. Further demand growth is likely, with Sydney — Australia's largest airport — reporting international passenger numbers 4pc below 2019 figures in 2024. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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