Brazil boosts foreign spending in energy transition
Brazil's climate fund and green transition plan received multi-billion monetary commitments from multilateral agencies during the G20 meetings, as part of government efforts to boost foreign investment in decarbonization.
Brazil estimates that only 6pc of funding for its energy transition projects comes from the private sector, compared with an average of 14pc in other emerging markets and 81pc in developed countries.
The high cost of long-term currency hedge contracts has contributed to the limited participation of foreign investors in Brazil's energy transition, the president of the Inter-American Development Bank (IDB) and former president of Brazil's central bank Ilan Goldfajn said.
To ease the entry of foreign investments, the government launched the Eco Invest Brasil program, which will create currency hedge mechanisms to limit exposure to exchange-rate volatility. Brazil's finance ministry and central bank developed the program with the World Bank and IDB.
The IDB has committed a total of $5.4bn to get the Eco Invest program started, including $3.4bn for currency swaps and $2bn for lines of credit. IDB will also help Brazil prepare and structure projects to receive financing.
The plan seeks to remove obstacles for foreigners to invest in Brazil's energy transition by reducing risks related to the volatility of the Brazilian real, according to the treasury secretary Rogerio Ceron.
As part of the program, the government plans to issue a presidential decree that will create four new lines of credit within the Climate fund.
The goal of the plan is to expand Brazil's integration with the international financial system and boost foreign investment in companies and projects that decarbonize the economy.
Brazil's Bndes development bank also reached an agreement with the Glasgow Financial Alliance for Net Zero (GFANZ) to expand financing for Brazilian decarbonization projects.
IDB will also provide an additional $2bn line of credit and technical support for Brazil's Climate fund, while the World Bank is considering allocating up to $1bn to the fund.
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Brazil biomethane parity prices R2.43-2.79: Correction
Brazil biomethane parity prices R2.43-2.79: Correction
Corrects CNG truck round-trip freight rates in 8th paragraph. Sao Paulo, 21 May (Argus) — Biomethane parity prices in Sao Paulo and Rio de Janeiro states, Brazil's two largest hubs, ranged between R2.43-2.79/m³ (49-56¢/m³) on 23 February, according to the market's first price indicators launched by Argus . That represents the marginal price that can be charged by biomethane producers from gas distributors, reflecting daily Cbio carbon credits assessments and weighted averages of natural gas prices in Rio de Janeiro and Sao Paulo. It is the first specifically calculated Brazilian biomethane price indicator in a market that has often lacked transparency. Biomethane producers traditionally have determined their prices on a case-by-case basis, depending on a series of factors such as the consumer's need for the green attribute, which fuel the biomethane gas will substitute and logistics costs. Initially, the biomethane sector looked to LPG prices for reference, as industry machinery only needs small alterations to substitute one fuel for the other. But the LPG market is much more consolidated and stable in its supply than biomethane. The international crude industry and Brazilian real-dollar exchange rates also influence the market, leading to distortions that do not reflect the renewable natural gas (RNG) market's true conditions. Market participants are still learning the ropes of the biomethane sector, as all of its production and supply structures are new in Brazil, according to Hugo Nery, chief executive of landfill company Marquise Ambiental, part of the joint venture that controls the 110,000 m³/d GNR Fortaleza biomethane plant. All biomethane plants certified by hydrocarbons regulator ANP within Brazil's national biofuels Renovabio policy are eligible to issue Cbio carbon credits, which is a compliance market for fossil fuel distributors to compensate their sales' impact. But this segment is still much smaller than it could be for biomethane manufacturers, according to biomethane producer Gas Verde's chief executive Marcel Jorand. Still, Cbios are the most liquid alternative to pricing the green attribute of biomethane in Brazil, with other certification models still in preliminary stages and not openly traded. Producers are adopting their own solutions to biomethane transportation challenges. Marquise Ambiental's strategy is to build its new biomethane plants near distribution networks, Nery said. GNR Fortaleza was the first plant in Brazil to inject biomethane directly into a distribution network and supplies 20pc of Ceara state's gas demand. On the other hand, biomethane generators Gas Verde and Zeg Biogas supply their customers through CNG truck deliveries. Argus ' CNG truck freight rates, based on Sao Paulo costs, show that each cubic meter of gas delivered on a 150km (93.2-mile) round trip cost R0.005/km on 23 February. Gas Verde and Zeg Biogas eye opportunities for longer-distance deliveries, using LNG trucks that have more range compared with CNG truck freights, or injecting gas into pipelines. Biomethane producers are finding demand for RNG outstripping supply available to the market. Zeg Biogas expects to start up a 30,000 m³/d biomethane plant in Minas Gerais state on the second half of the year. The company aims to explore the off-grid market in the region and expects to sign four additional contracts this year and increase its production capacity, according to chief executive Eduardo Acquaviva. Gas Verde, which owns Brazil's largest biomethane plant in Seropedica, Rio de Janeiro state, with 204,000 m³/d of capacity, also expects to expand. The company will transform nine biogas-fired thermal power plants into biomethane generators in the next 18-24 months. By Rebecca Gompertz Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK will not bank ‘surplus’ from third carbon budget
UK will not bank ‘surplus’ from third carbon budget
London, 21 May (Argus) — The UK overachieved on emissions reduction targets under its third carbon budget, but it will not carry forward the emissions ‘surplus' to the next carbon budget, the government said today. A carbon budget is a cap on emissions over a certain period. The UK's third carbon budget covered 2018-22, while the fourth carbon budget covers 2023-27. UK emissions over 2018-22 stood at 2.15bn t/CO2 equivalent (CO2e) — 319mn t/CO2e below the third carbon budget cap. Emissions on average over the period were 47pc lower than emissions in 1990 — the baseline year. "By the end of the period in 2022, UK net greenhouse gas emissions were 50pc lower than base year emissions", the government said. The country is also on track to overachieve during the fourth carbon budget, it added. "The government decision not to carry forward the surplus keeps the UK within its ambitious target with no additional headroom to emit greenhouse gases over the coming years", the government said. The UK has made progress on cutting emissions, including phasing out coal. But the surplus was largely down to external factors, including the Covid-19 pandemic, the independent advisory Climate Change Committee (CCC) found previously. The UK has a legally-binding target to reach net zero emissions by 2050. It also has targets to cut emissions by 68pc by 2030 and 77pc by 2035, both from the 1990 base level. The CCC warned in February that the government should not carry forward any surplus from the third carbon budget, to avoid weakening action on decarbonisation. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
ScanOcean to supply MGO-HVO blend in Sweden
ScanOcean to supply MGO-HVO blend in Sweden
London, 21 May (Argus) — Swedish bunker firm ScanOcean will supply a B30 marine biodiesel blend made of marine gasoil (MGO) and hydrotreated vegetable oil (HVO) by truck at all Swedish ports. The B30 blend will comprise 70pc MGO and 30pc HVO and meet ISO 8217:2017 MGO specifications, according to ScanOcean. The biofuel component will not contain any fatty acid methyl ester (Fame) and the blend will reportedly be accompanied by ISCC-EU certification and a proof of sustainability (PoS) document. ScanOcean added that they will supply the physical blend but that the HVO component will be sourced from the EU. The B30 blend will achieve a 25pc reduction of CO2 emissions on a well-to-wake basis when compared with conventional MGO, according to the Swedish supplier. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
States have duty to cut GHGs, protect oceans: Court
States have duty to cut GHGs, protect oceans: Court
London, 21 May (Argus) — States that are party to the UN Convention on the Law of the Sea (Unclos) have an obligation to reduce their greenhouse gas (GHG) emissions to protect oceans, the International Tribunal for the Law of the Sea said today in an advisory opinion. The opinion was requested by the Commission of Small Island States on Climate Change and International Law in December 2022. The tribunal found unanimously that states party to Unclos "have the specific obligation to take all measures necessary to ensure that anthropogenic GHG emissions under their jurisdiction or control do not cause damage by pollution to other states and their environment". The group of small island states welcomed the outcome, and said they saw it as a victory. Small island states are extremely vulnerable to the effects of climate change. Unclos has 169 parties — including the EU, China and almost all G20 nations. But the US — the second-highest emitter — is not a party to the convention. Countries must submit new national climate plans — known as nationally determined contributions (NDCs) — by early next year to UN climate body the UNFCCC. "Today's outcome will be instrumental to push the countries most responsible for the climate crisis to ramp up their ambition", lawyer at environmental law firm ClientEarth Lea Main-Klingst said. "And because business must follow where governments lead, companies and financial institutions are going to feel a knock-on effect from this development, too", Main-Klingst added. Similar cases, focused on climate change, are awaiting an advisory opinion or ruling from various international courts. The Inter-American Court is hearing arguments on how climate change is affecting human rights this month, while the International Court of Justice will consider a similar question later this year. The European Court of Human Rights ruled last month that signatories to the European Convention on Human Rights (ECHR) must protect their citizens from the "serious adverse effects of climate change", in a landmark ruling for climate litigation. The ocean is the world's biggest carbon sink, capturing emissions and much of the excess heat generated by GHGs. Sea surface temperatures have hit record highs in recent months, while the global temperature was in 2023 on average 1.45°C higher than pre-industrial levels , the World Meteorological Organisation said earlier this year. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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