Illinois CFS will take more time
Illinois lawmakers will move slowly on a proposed state low-carbon fuel standard (LCFS) as opponents target fuel costs and placing authority over the program with a state agency.
The state Senate Energy and Public Utilities Committee discussed a proposed Illinois LCFS without voting during a Friday morning hearing for which registered opponents of the legislation outnumbered supporters by more than five-to-one. Both members of the public and legislators were wary of granting substantial rulemaking authority on the concept to Illinois environmental regulators.
Lawmakers had delayed a previous hearing and committee vice-chairman and bill sponsor David Koehler (D) switched the topic on the eve of today's hearing from a voting matter to a discussion item.
"This is important stuff and we have to do it right," Koehler said. "I'm committed to doing it right, rather than doing it fast."
LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. California, Oregon and Washington operate US LCFS markets. New Mexico lawmakers earlier this year directed its state environmental regulator to develop a program for that state.
The Koehler bill would direct the Illinois Environmental Protection Agency and Pollution Control Board to establish an LCFS requiring a 20pc reduction in gasoline and diesel carbon intensity by 2038. That direction, used in California, Oregon and, soon, New Mexico, has drawn immediate skepticism from opponents who believe those details should come from legislators who answer to constituents.
"I'm not prepared to cede that responsibility to non-elected boards," committee minority spokeswoman Terri Bryant (R) said today, summarizing concerns that have been raised from other opposed or neutral interest groups watching the bill.
The proposed law would also require consideration for low-carbon agricultural practices. Illinois hosts the largest soybean production of any state as well as an established corn and ethanol sector.
Corn grower and ethanol groups testified today supporting that idea, but not the overall bill.
"I sincerely believe that, if done right, Illinois policy could become a beacon in the Midwest of what a clean transportation standard should look like," said Dustin Marquis, president of the ethanol producers' organization Illinois Renewable Fuels Association.
Some environmental groups also registered as neutral on the language in the morning session, concerned that the proposal lacked protections against land-use changes and other environmental issues associated with agricultural-based lower-carbon fuels. Koehler said it was an issue that would be looked at in an upcoming amendment.
Trucking and fuel retail groups focused on costs based on interpretations of California's program. Truck associations chafed at exemptions for aviation and locomotive fuel, noting that the proposal could make their shipping rivals cheaper.
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Singapore's GCMD to test long-term biofuel shipping use
Singapore's GCMD to test long-term biofuel shipping use
Singapore, 9 May (Argus) — Singapore-based Global Centre for Maritime Decarbonisation (GCMD) and Japanese shipping firm NYK Line will trial the continuous use of a biofuel blend over six months. The study aims to evaluate the effects of the continuous use of B24 biofuel blend of 24pc fatty acid methyl ester (Fame) and 76pc of very low sulphur fuel oil (VLSFO) on a short-sea vehicle carrier that will call at multiple ports, allowing for the regular sampling and testing of fuels stored on the ship. Fame is a "promising" fuel alternative, the firms said, but added that there are concerns about the impact of its extended use on vessel operations. The study hence aims to study the long-term impact of biofuel usage on ship engine performance and fuel delivery system operations. It will also examine the total cost of ownership of using biofuel, including fuel costs and associated maintenance costs, as well as identify potential operating challenges and suggest mitigation strategies. B24 is the current blend of alternative marine fuel that is being used or trialled for bunkering at some key Asian ports like Singapore and Zhoushan. Its usage is expected to rise, especially because the industry is pushing for higher emission cuts from shipping. Participants in the shipping industry are exploring solutions to meet the International Maritime Organization's (IMO) net zero carbon emission target by 2050, with operational safety and costs surfacing as some of the key concerns of alternative fuel adoption . "This knowledge will empower stakeholders across the ecosystem, from shipowners and charterers to biofuels producers and regulators – to make more informed business and policy decisions," GCMD chief executive officer Lynn Loo said. "Ultimately, this pilot will lead to greater confidence for biofuels use at scale, accelerating progress towards decarbonising the maritime industry." Argus assessed B24 biofuel bunker prices at $744.25-759.25/t delivered on board (dob) Singapore on 8 May. By Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s ANZ bank to end new gas, oil lending
Australia’s ANZ bank to end new gas, oil lending
Sydney, 9 May (Argus) — Australia-based bank ANZ has updated its oil and gas policy, with it to no longer provide direct financing to new or expanding upstream oil and gas projects. The bank declared its new policy as part of its 2024 half-year results released on 7 May, saying it would also decline to integrate new customers primarily focused on upstream oil and gas. ANZ said that while it believes gas plays a "material and important part in meeting Australia's current energy needs and will do so for the foreseeable future", it will instead collaborate with energy customers to help finance their transition away from fossil fuels. The bank has a 26pc greenhouse gas (GHG) emissions reduction by 2030 goal and committed in 2020 to exit all lending to companies with exposure to thermal coal, either through extraction or power generation by 2030 as part of lending criteria to support the 2015 UN Paris climate agreement target of net zero GHG emissions by 2050. ANZ has however promised to consider exceptions on a case-by-case basis, if any national energy security issues arise. Australia's banks have been under sustained pressure by environmental groups to exit lending to fossil fuel projects, as upstream gas firms also face shareholder rebellions over climate action plans. But Australia's federal government has conceded gas will likely be needed post-2050 as a firming power source for renewables and industrial feedstock for some sectors. But investment in upstream exploration has been extremely low in recent years, with imports of LNG likely in southern Australia from about 2026 to meet demand for industrial users and power generation. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LNG imports loom as Australia unveils gas strategy
LNG imports loom as Australia unveils gas strategy
Sydney, 9 May (Argus) — Australia's federal government will attempt to reverse the decline in new gas developments by expediting projects, although a report has found it is unlikely to reverse an anticipated shortfall in southern states' supplies later this decade. Canberra's long-awaited Future Gas Strategy will form its future policy on the resource, following two years of uncertainty for the industrial sector. This follows the Labor party-led government's election in May 2022 and its dumping of the previous Liberal-National coalition administration's gas-fed recovery from Covid-19 policy, which emphasised bringing new supplies on line to drive down rising prices. Six principles have been outlined by the government — driving down emissions reductions to reach net zero emissions by 2050, making gas affordable for users during the transition, bringing new supplies on line, supporting a shift to "higher-value and non-substitutable gas uses", ensuring gas and power markets remain fit for purpose during the energy transition and maintaining Australia's status as a reliable trading partner for energy, including LNG. The report found that gas-fired power generation will likely provide grid firming as renewables replace older coal-fired plants. Peak daily gas demand could rise by a factor of two to three by 2043, according to projections, with gas-powered peaking generation labelled a "core component of the National Electricity Market to 2050 and beyond". But by the 2040s more alternatives to gas for peaking and firming are expected to become available. Supplies are forecast to dip significantly in the latter years of the decade, especially in gas-dependent southeast Australia, driven by the 86pc depletion of the region's producing fields. This reduced supplies will outpace a fall in demand , while rising demand is forecast because of the retirement of Western Australia's coal-fired power plants . The report found the causes of Australia's low exploration investment are "multifaceted", blaming the Covid-19 pandemic, difficulties with approvals processes , legal challenges, market interventions and a perceived decline in social licence. It added that international companies may focus on lower cost and lower risk fields in other countries. New sources Stricter enforcement of petroleum retention leases and domestic gas reservation policies are also likely to increase supplies, the report found, with term swap arrangements beneficial in increasing their certainty. Upwards pressure in transport costs is likely to result from increased piping of Queensland coal-bed methane gas to southern markets such as Victoria state, which could influence industrial users to relocate closer to gas fields in the future. Options canvassed to meet demand include more pipelines and processing plants and LNG import terminals , which would provide the fastest option but must overcome regulatory and commercial pressures, given the pricing of LNG would be higher than current domestic prices. Longer term supplies depend on the commerciality from unsanctioned projects such as Narrabri and in the Beetaloo and Surat basins, the report said. More supplies are needed to support exports under foundational LNG contracts, with an impact on the domestic market if Surat basin developments such as Atlas does not continue, the report said. Forecasts show LNG exporters have sufficient production from existing and committed facilities to meet forecast exports until 2027 if expected investments proceed. But beyond this new investment is required, especially for the 8.5mn t/yr Shell-operated Queensland-Curtis LNG at Gladstone. The Australian Energy Producers lobby, which represents upstream oil and gas businesses, said the strategy should now provide clear direction on national energy policy. But the Greens party, the main federal parliamentary group aside from Labor and the Liberal-National coalition, said any plans to continue gas extraction beyond 2050 will negate state and federal net zero 2050 climate targets. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japanese ethylene producers unite for decarbonization
Japanese ethylene producers unite for decarbonization
Tokyo, 8 May (Argus) — Japanese petrochemical producers Mitsui Chemicals, Mitsubishi Chemical and Asahi Kasei have agreed to co-operate on decarbonization of their ethylene crackers in west Japan, targeting to decide a pathway within the current April 2024-March 2025 fiscal year. They plan to accelerate carbon neutrality at Mitsubishi Chemical and Asahi Kasei's 496,000 t/yr Mizushima cracker in Okayama prefecture and Mitsui Chemicals' 455,000 t/yr Osaka cracker in Osaka prefecture. The partners aim to introduce biomass feedstocks such as biomass-based naphtha and bioethanol and low-carbon cracking fuels like ammonia, hydrogen and electricity. They said joining forces will enable them to accelerate reducing greenhouse gas emissions, although they have not yet decided any further details. Mitsui Chemicals has experience in using bio-naphtha and recycled pyrolysis oil at its Osaka cracker. Japanese petrochemical producers have increasingly united to achieve decarbonization of their production processes, which account for around 10pc of the Japanese industrial sector's carbon dioxide emissions, according to the trade and industry ministry. Mitsui Chemicals, Sumitomo Chemical and Maruzen Petrochemical agreed to study the feasibility of chemical recycling and using bio-feedstocks at the Keiyo industrial complex in Chiba. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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