Japan's Tokyo Gas invests in nature-based carbon fund
Japanese gas retailer Tokyo Gas is investing up to $25mn in Climate Asset Management's nature-based carbon fund.
The carbon credits provided by the fund are natural carbon credits created from efforts such as afforestation and nature regeneration. Its carbon credits require large, continuous areas of land to be created, so supplies are limited and are expected to become difficult to purchase in the medium to long term, Tokyo Gas said.
It has secured carbon credits over a 12-year period until 2037 with its investment in the carbon fund of Climate Asset Management, a partnership between HSBC Asset Management and climate change advisory and investment group Pollination.
Tokyo Gas sees carbon credits as an important tool in the transition period from city gas. It aims to replace half of its domestic supplies of city gas with synthetic methane, or so-called e-methane, by 2040 after it starts commercial use in 2030. Japan's trade and industry ministry aims to replace 1pc of the country's city gas volumes to e-methane by 2030 and 90pc by 2050.
The gas retailer is already participating in five e-methane projects globally, including the ReaCH4 project in Cameron in the US state of Louisiana, partnering fellow Japanese gas utilities Osaka Gas and Toho Gas and trading house Mitsubishi. The four companies aim to export 130,000 t/yr of synthetic methane to Japan by 2030 using the 15mn t/yr Cameron LNG facility. This project aims to move to an initial engineering stage this year.
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Western Australia to allow some onshore gas exports
Western Australia to allow some onshore gas exports
Darwin, 19 September (Argus) — Western Australia's (WA) state government will allow onshore developers of gas fields to export about 20pc of their output as LNG during a five-year window, in response to a growing failure to bring on new supplies for the domestic market. WA previously banned onshore gas exports, except in the case of Australian independent Beach Energy's 250 TJ/d (6.7mn m³/d) Waitsia stage 2 project . Beach may be required to share its infrastructure with fellow Perth basin firms, the WA government said, to expedite market access for new projects. Australian mining firm Mineral Resources, which has argued for permission to export 85pc of the gas from its Lockyer project as LNG and fellow WA-based firm Strike Energy may benefit from the changes, as both hold significant reserves in the Perth basin. The changes apply to new onshore developments or existing projects seeking to expand production. Developers are required to reserve 80pc of gas produced for WA, with this rising to 100pc from 2031 onwards. The policy shift follows dire outlooks for WA's gas supplies as the state attempts to wean itself off coal-fired power generation. It currently contributes about a third of the electricity into the state's largest power grid. A parliamentary report last month warned WA cannot rely on sporadic appeals for more gas to meet demand. "These policy changes are sensible responses that balance the need for Western Australia to secure its energy future while encouraging onshore producers to bring on more gas supply as and when it is needed," mines and petroleum Minister David Michael said on 19 September. The 15pc reservation for offshore LNG projects will continue, while WA has promised more transparency on the policy with the publication of a yearly WA Domestic Gas Statement to reveal how producers are meeting obligations, with a review to take place after two years. An interim parliamentary report tabled earlier this year showed about 8pc of the state's offshore gas output has reached WA consumers since 2006, representing just over half the required volumes. Following public criticism of LNG producers' contributions, Australian independent Woodside Energy has since pledged an extra 32PJ (854mn m³) of domestic supplies by the end of 2025 . WA will also seek to strengthen laws designed to prevent companies banking prospective onshore oil and gas tenements, with a review into the "use it or lose it" policy to be led by the state's energy department. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Fed cuts rate by half point, signals more: Update
US Fed cuts rate by half point, signals more: Update
Adds chairman Powell comments, economic projections. Houston, 18 September (Argus) — The US Federal Reserve cut its target interest rate by 50 basis points today, the first rate cut since 2020, with policymakers signaling they expect to make another half-point worth of cuts by the end of 2024. The Fed's Federal Open Market Committee (FOMC) lowered the federal funds rate to 4.75-5pc from the prior range of 5.25-5.5pc, which was a 23-year high. The Fed had kept the target rate unchanged since July 2023 after hiking it for more than a year in the most intense rate-tightening campaign in four decades to quash inflation, which peaked at 9.1pc in mid-2022. "The committee has gained greater confidence that inflation is moving sustainably toward 2pc, and judges that the risks to achieving its employment and inflation goals are roughly in balance," the FOMC said in its statement after the two-day meeting. "Job gains have slowed, and the unemployment rate has moved up but remains low." In their latest economic projections, the Fed board and policymakers expect the target rate range will end 2024 near a midpoint of 4.4pc compared with an end of year midpoint of 5.1pc projected in June, which implies further cuts amounting to 50 basis points by the end of 2024. Policymakers also penciled in another 100 basis points of cuts over the course of 2025. "We're recalibrating policy down over time to a more neutral level and we're moving at the pace that we think is appropriate given developments in the economy," Fed chair Jerome Powell told a press conference after the meeting. "The economy can develop in a way that will cause us to go faster or slower. The US economy is in a good place and our decision today is designed to keep it there." The Fed's economic projections see core Personal Consumption Expenditures inflation — the Fed's favorite measure of inflation — ending 2024 at a median rate of 2.6pc, down from a prior forecast of 2.8pc. Policymakers see core PCE inflation falling to a median of 2.2pc by the end of next year. The outlook for the unemployment rate for the end of 2024 climbed to 4.4pc from 4pc penciled in at the June meeting. Policymakers expect gross domestic product (GDP) growth to end 2024 at an annual 2pc, slightly down from a prior 2.1pc projection. The latest policy meeting comes as the Consumer Price Index (CPI) eased to an annual 2.5pc in August , down from 2.9pc in July, the Labor Department reported on 11 September. Inflation had ticked up to 3.5pc in March from 3.1pc in January, prompting the Fed to turn more cautious about beginning its rate cuts. US job growth has recently slowed sharply, falling to an average 116,000 in the three months through August from 211,000 for the prior three months. The jobless rate rose to 4.3pc in July, the highest in three years, before edging down to 4.2pc in August. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Volatile energy prices risk the transition: IEF
Volatile energy prices risk the transition: IEF
Houston, 18 September (Argus) — High or volatile energy prices risk undermining emissions reductions efforts, International Energy Forum (IEF) secretary-general Joseph McMonigle said today at the Gastech conference in Houston, Texas. "If the public starts to connect high prices and volatility to the energy transition, we're in big trouble and we risk losing public support for the transition and climate policy," he said. McMonigle made his comments on a panel with several energy ministers, who discussed the issues of balancing energy security concerns with transitioning to cleaner fuel sources for electricity. When asked what he would consider a "call to action" for the global energy sector, McMonigle suggested investments in emerging technologies. "I think to allow trading of carbon credits is really important to accelerate the transition," he said. "Also, to provide financing for CCS (carbon capture and storage), which I think is one of the technologies that does not have enough investment behind it." By David Haydon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Wash. regulators plan for cap-and-trade vote
Wash. regulators plan for cap-and-trade vote
Monterey, 18 September (Argus) — Washington regulators are making a "contingency" plan in the event of a successful repeal of the state's emissions cap-and-trade program. Initiative 2117, which looks to repeal the state's cap-and-trade program and prevent any similar program from taking its place, will be on state ballots for the 5 November election. "We are doing contingency planning in case the ballot measure passes and will update our covered entities when we do have information — and I know this initiative is creating a lot of uncertainty," said Stephanie Potts, senior planner with the state Department of Ecology today at the Argus North American Biofuels, LCFS & Carbon Markets Summit in Monterey, California. The agency also remains focused on continuing to implement the program, "assuming it continues," she said. Washington's "cap-and-invest" program requires large industrial facilities, fuel suppliers, and power plants to reduce their greenhouse gas emissions by 45pc by 2030 and by 95pc by 2050, from 1990 levels. The department is in an ongoing rulemaking process to expand and amend its carbon offset protocols, and also continues work to gather input for linkage with the Western Climate Initiative, a linked carbon market between California and Quebec. Potts said Washington expects to have a linkage agreement in place by the end of next year. The uncertainty introduced by the ballot initiative over the fledgling market's future has tempered carbon credit prices and activity this year. Argus assessed Washington carbon allowances (WCAs) for December delivery at $30.25/metric tonne on 4 March, their lowest price since the program's inception in 2023. The drop in prices at that time coincided with a statement by Ecology outlining how a successful repeal would end the agency's authority over the program. Earlier this year, the state Office of Financial Management (OFM) released a fiscal impact statement on a successful repeal that assumed an effective repeal date would be 5 December. By Denise Cathey and Jessica Dell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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