JETP needs to be scaled up to be effective: Report

Market: Coal, Emissions
16/02/24

The Just Energy Transition Partnerships (JETPs) — intended to help emerging economies' energy transition efforts — need to be scaled up to achieve their full potential, according to a research report.

The JETPs have been "long on promise, but so far short on implementation," according to the Scaling the JETP model report by US research firm the Rockefeller Foundation and US-based environmental advocacy group the Environmental Defense Fund. The JETP is a financing mechanism led by the International Partners Group (IPG) — formed from various donor countries — and the Glasgow Financial Alliance for Net Zero, a coalition of major financial institutions.

The first three JETP deals in South Africa, Indonesia and Vietnam were based on enabling a just transition from coal to clean power, while the latest deal in Senegal focused on accelerating access to clean energy through deploying renewables.

But the deals only cover a small portion of total investment needed to achieve net zero power sector emissions, and there has not been enough "new and additional" concessionary capital after the initial "fanfare" when partnerships are announced. There has been insufficient access to technical, planning and modelling capacities within countries, and also a lack of clarity regarding the roles of involved multilateral development banks (MDBs).

The report suggests four pathways to address and overcome barriers to scale, as well as allow the model to reach its full potential. The first is the development of nationally-owned "country platforms", which are institutional venues that would allow for more structured dialogue between government officials, technical partners and financers. Such a platform would be able to oversee the development of a "nationally appropriate investment plan," states the report.

There are countries that have expressed interest in support packages but currently have no access to them, such as Kenya, Thailand, Mexico and Kazakhstan, according to the report. The second pathway suggests that these countries could come together and announce their interest in such JETP-like deals. This would send a signal to potential support partners and illustrate that there is enough demand to require a reformation of the international financial system, and the countries could collectively set out more "coherent and credible investment plans," states the report.

The third pathway sees more involvement from MDBs, especially if the aforementioned country platforms are successful, as the leadership of these banks will be necessary. The MDBs bring "relevant capabilities in technical sectoral expertise, country-led engagement, government relationship management, [and the] ability to navigate diverse financing partners." The MDBs could help to co-ordinate between providers of capital and help to design investment plans.

Lastly, the IPG needs to expand and increase the donor pool so that there is more concessionary capital, the lack of which is the biggest constraint that deals are currently facing. JETP packages would also be more successful if consolidated offers were made by the group, instead of each IPG member making a discrete offer.

By Prethika Nair

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25/03/25

Lula visits Japan to talk ethanol, Cop 30, beef

Sao Paulo, 25 March (Argus) — Brazilian president Luiz Inacio Lula da Silva traveled to Japan on Tuesday in search of energy transition agreements and new market opportunities to improve trade relations between the countries. Bilateral Japan-Brazil trade fell to around $11bn in 2024, down from $17bn in 2011, the Brazilian government said. Brazil exported $730mn in goods to Japan in January-February, while importing $995mn from the Asian country in the period, according to Brazil trade ministry data. Exports dropped by almost 13.5pc from a year before in the two-month period, while imports grew by nearly 25pc. "Firstly, we have [a shortfall] to turn around," Lula said. Brazil will also ask Japan to join its growth acceleration plan . He is accompanied by 11 ministers and four members of congress, including senate president Davi Alcolumbre and lower house president Hugo Motta. Ethanol market Brazil aims to sell more ethanol to Japan, as the Asian country expects to increase its ethanol blend to 10pc from 3pc by 2030. "If Japan blends 10pc of ethanol into gasoline, it will be an extraordinary step not only for us to export to them but for them to be able to produce in Brazil," Lula said. Japan received 3.4pc of Brazil's ethanol exports, according to Brazil's development and trade ministry. Cop 30 and energy transition Lula's visit also seeks to attract investment in renewable energy, forest revamps and new donations to the Amazon Fund, as well as a "strong commitment" from Japan at the Cop 30 summit, to be held in Brazil later this year. Brazil aims to export clean fuels to generate power to Japan, as power imports account for more than 80pc of all Japanese power demand and "a large share of it comes from fossil sources," according to the Brazilian foreign relations ministry's Asia and Pacific secretary Eduardo Saboia. Brazilian and Japanese companies announced earlier this year plans to produce biomethane in Brazil . The renewable fuel would supply both countries. Brazil and Japan should also sign a deal to help recover the Cerrado biome, which is the second largest biome in Brazil and the second most endangered. It comprises of savanah grasslands and forest and makes up about 25pc of the nation's territory. The Cerrado lost 9.7mn hectares to wildfires in 2024, up by almost 92pc from 2023, according to environmental network MapBiomas' fire monitor researching program. Deforestation is one of Brazil's flagship issues for Cop 30 this year. The country has been pushing for forest protection and recovery initiatives as most of Brazil's past Cop pledges cannot be met with only its remaining forests. Japan and Brazil should talk about the Amazon Fund as well because Brazil "wants more", Saboia said. Japan was the first Asian country to donate to the fund with $14mn, which Saboia said was "too little." Where's the beef? Lula is also targeting opening Japan's beef market to Brazilian exports, as the Asian country imports over 70pc of all its beef. Lula met with members of the beef exporters association Abiec in his first day in Japan to discuss the matter. The bulk of Japan's beef imports — 80pc — come from the US, the Brazilian government said. Brazil does not currently export beef to Japan. "Brazil has the logistic capacity to increase exports and double beef exports every four years," transport ministry Renan Filho said. Brazil has been trying to enter Japan's beef market for over two decades. This time, Lula expects to achieve a technical visit from Japan to inspect Brazil's beef producing conditions as a first step toward accessing the Japanese market. Lula will depart to Vietnam on 28 March to debate a plan to turn the country into one of Brazil's strategic partners. Only Indonesia is considered a Brazil strategic partner in southeast Asia. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Cerrejon to cut coal production by 5-10mn t in 2025

25/03/25

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25/03/25

Cerrejon to cut coal production by 5-10mn t in 2025

Bogota, 25 March (Argus) — Colombia's second-largest coal producer Cerrejon will cut thermal coal production by 5-10mn t with immediate effect. This brings its full-year estimate to 11-16mn t for 2025, the Glencore-owned firm said today. The main reason for the reduction is "unsustainable prices for thermal coal transported by sea". Cerrejon produced 19mn t of steam coal in 2024, which means output could fall by 18.75-42pc on the year. Cerrejon has implemented numerous initiatives to respond to the current challenging market conditions, but said the decision to reduce production will help ensure the sustainability of operations and its ability to continue generating revenue for the region and the country. Thermal coal demand has become increasingly focused on Asian markets, including South Korea, India, Japan and China, and freight costs for Colombian coal to reach those markets of around $37/t are considerably higher than the $16-17/t to reach Colombia's traditional markets, such as Europe and Turkey. At the same time, international coal prices have dropped, further reducing Colombian coal's margins, Cerrejon president Claudia Bejarano said last week in Cartagena at the Colombia Genera conference. "We are losing our competitiveness completely," Bejarano said, adding that coal demand in natural markets for Colombia such as Europe is dwindling Argus ' fob Puerto Bolivar NAR 6,000 kcal/kg thermal coal assessment, which forms part of the Colombian API 10 benchmark, was assessed at $85.20/t at the end of last week, down from $93/t at the start of the year — it was as high as $102/t as recently as November. The drop in production will be followed by a reduction in the workforce, a source familiar with the matter said. The company said production cuts will not affect Cerrejon's current social or environmental commitments. The president of Colombian mining agency Alvaro Pardo told Argus that Colombia's thermal coal exports increased by 8.8pc in 2024, but revenues at the country's largest producers declined by 25pc, reflecting the difficult market conditions amid low coal prices and tight margins, Pardo said. Pardo said market conditions will be a factor in ending coal production over the long term, not the government. The government is concerned about falling international thermal coal prices because the operators of the country's large open-pit mines, including Drummond and Cerrejon, may hand back the coal titles to the government, as Glencore did with its Prodeco mine titles in 2021. By Diana Delgado Colombian coal loaded vs landing prices $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US venue case crucial for future clean air fights

24/03/25

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24/03/25

US venue case crucial for future clean air fights

New York, 24 March (Argus) — The US Supreme Court on Tuesday will hear arguments about the proper court venue for Clean Air Act lawsuits, which could be pivotal for future enforcement of federal air pollution rules. The court is considering both a case involving the Environmental Protection Agency's (EPA) rejections of small refiners' requests for hardship exemptions from a biofuel blend mandate and the agency's separate denials of state plans for addressing ozone-forming NOx emissions. Judges are not expected to decide the legality of EPA's decisions, just the proper courts for settling the disputes. But the cases are still significant: legal uncertainty to date has affected both EPA programs implicated by the Supreme Court's review and could upend enforcement of future rules if the court does not provide sufficient clarity. Federal ozone season NOx allowance prices essentially flatlined last year as participants were hesitant to trade due to risks from so many court cases. And small refinery exemptions are crucial for biofuel demand, so biofuel producers are wary of empowering more lower courts to reconsider denied exemption requests. The Clean Air Act says that EPA actions that are "nationally applicable" or otherwise based on "nationwide scope or effect" should proceed before the US Court of Appeals for the District of Columbia Circuit, while "locally or regionally applicable" actions head to regional circuit courts instead. But judges have disagreed about how to apply those criteria, since many EPA rules have far-reaching effects but on their face target individual states or facilities. Regulated industry fears that EPA could say a broad set of regulations have nationwide scope, centralizing review in the DC Circuit, which is seen as friendlier to federal regulators and where a majority of judges are Democratic appointees. Local conditions — such as a small refinery in Indiana serving local farmers that cannot handle higher biodiesel blends — get short-changed when various companies' concerns are assembled together, they argue. But EPA under the prior administration and Democratic-led states argue that sending these cases to the DC Circuit, which is more experienced with the complexities of federal rulemaking, makes more sense than letting industry seek out favorable jurisdictions. And they highlight the possibility of courts leaving emitters in one part of the country with laxer rules. "The fundamental risk is that you'll end up with decisions on the same point of law coming out differently in different places — and not an expedient way to resolve that," said Brian Bunger, a Holland & Knight partner and the former chief counsel at the Bay Area Air Quality Management District. For instance, both the DC Circuit and the conservative-leaning 5th Circuit agreed that EPA erred when it denied some refiners exemptions from biofuel blend mandates — but they said so for slightly distinct reasons. The 5th Circuit, for instance, went further by saying refiners reasonably relied on past EPA practice and thus the agency incorporating new analysis into its review of waiver requests was unfair. As a result, EPA recently used different criteria when weighing a waiver request from one refiner in the 5th Circuit's jurisdiction than it used for another refiner, according to partially redacted decisions obtained by Argus through a Freedom of Information Act request. The agency said it could not consider at all whether CVR Energy's 75,000 b/d refinery in Wynnewood, Oklahoma, is able to pass on the costs of program compliance to consumers because of the 5th Circuit decision but could weigh such information when deciding a similar petition from Calumet's 15,000 b/d refinery in Great Falls, Montana. The agency issued those decisions in the waning days of former-president Joe Biden's term. While President Donald Trump has pledged a vastly different approach to environmental regulation, his administration for now has not signaled a different stance than the Biden administration on whether these types of disputes should proceed before the DC Circuit. Schrodinger's case It is still unclear whether the judges view the cases as a tricky technical dispute or part of a broader trend of federal agencies overstepping their authority. Tuesday's hearing could provide clues. Of the court's nine justices, four previously served on the DC Circuit and could see value in sending more complex regulatory cases to the expert court, Bunger said. But the court's conservative majority could also be wary of giving EPA too much authority to set venue. Refiners argue that the agency repackaged dozens of individual exemption denials into two larger regulatory actions as a strategy to get the cases before a friendlier court. The Supreme Court has looked skeptically at other EPA rulings and last year overturned a decades-old legal principle that gave agencies leeway when interpreting ambiguous laws. Final Supreme Court decisions usually arrive by late June. However the court rules, businesses say that it should provide a clear enough explanation to prevent similar venue disputes from reemerging. The US Chamber of Commerce told the court it takes no position beyond urging the court to "adopt an interpretation that provides clarity and predictability to all stakeholders." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Colombia not cancelling coal: Mining authority

24/03/25

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24/03/25

Colombia not cancelling coal: Mining authority

Cartagena, 24 March (Argus) — Colombia will honour the terms of coal mining firms' contracts and is not forcing companies out of the industry, which is instead under pressure from market conditions, mining regulator ANM president Alvaro Pardo said. "Today, no thermal coal owner in the country can say that the state violated their rights," Pardo told Argus on the sidelines of the Colombia Genera conference in Cartagena. "We are respectful of their contractual rights." The administration of Colombian president Gustavo Petro has made several anti-fossil fuel statements, and is working on moving to less carbon-intensive energy sources — although it has not included coal in its list of strategic minerals and intends to honour existing coal mining licences until the end of their terms, Pardo said. Instead, market factors are likely to end coal production before the government does, he added. Colombia's thermal coal exports increased by 8.8pc on the year in 2024, but revenues of Colombia's largest thermal coal producers declined by 25pc over the same period, reflecting the difficult market conditions of lower coal prices and tighter margins, Pardo stressed. The government is concerned with the drop in international thermal coal prices because it fears that the large open-pit coal mines including Drummond and Cerrejon may hand back the coal titles to the government as Glencore did in 2021. With global coal prices falling this year, coal demand has also shifted to Asian markets, such as South Korea, India, Japan and China, but freight costs for Colombian coal to reach these markets are around $37/t, compared with $16-17/t to traditional markets such as Europe. "Europe is no longer demanding Colombian coal nor is Chile," Pardo said. When asked whether the government may consider cutting royalties on coal mining firms, Pardo said ANM will not reduce royalties. But the Colombian mining association has stressed that the Colombian mining sector, including coal, has the highest tax rates among peers. The government recently slapped an additional 1pc surcharge on coal exports. The government will not grant new contracts to large open-pit thermal coal mines, Pardo said. The IEA predicts that global coal demand will plateau through 2027, although it reached a record high in 2024 of 8.77bn metric tonnes (t). Anticipating the downturn, the Petro administration is looking at how to convert mining areas to other uses such as for renewable energy, tourism or production of other minerals, Pardo noted. By Diana Delgado Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU readies tweak for CO2 car standards

24/03/25

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24/03/25

EU readies tweak for CO2 car standards

Brussels, 24 March (Argus) — The European Commission is expected to approve this week a legal proposal which would increase flexibility for compliance with CO2 standards for cars and vans. The commission is expected to adopt, by written procedure, a legal proposal on 25 March, targeting additional flexibilities around penalties for cars and vans to meet CO2 emissions performance standards. The proposal is expected to enable compliance with CO2 targets to be calculated over a three-year period , rather than for single years. EU leaders last week called for the legal proposal to be put forward "without delay". EU leaders have also called on the commission to "take forward the review" foreseen in the CO2 for cars regulation. Industry has urged the EU to allow for low carbon and zero emission fuels to be accounted for under the CO2 standards. Separately, further delay to the EU's official emissions reduction goal for 2040 appears likely. The commission does not currently have a "concrete date" to give on the GHG proposal for 2040 but it "does not seem" to be scheduled for presentation this week. The official work program for the commission had listed the 2040 GHG target, an update to the European Climate Law, in the first quarter of 2025. The delay to the EU's 2040 GHG proposal further impacts presentation of an updated EU climate plan — known as a nationally determined contribution (NDC) — which will cover the timeframe up to 2035. The commission said several parties have already missed the 10 February deadline for submission of updated NDCs to UN climate body the UNFCCC. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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