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Russia to present climate strategy at Cop 29

  • Market: Coal, Crude oil, Emissions, Natural gas, Oil products
  • 09/10/24

Russia is preparing to present its climate strategy at the UN Cop 29 climate conference in Baku, Azerbaijan, in November, deputy prime minister Alexander Novak said.

Novak convened a meeting with Russian ministries on climate issues on 7 October, in which a forecast for Russia's emissions rates, in line with the country's 'low emissions economic development strategy to 2050', was discussed. The strategy was approved in 2021.

It is unclear whether the strategy is linked to Russia's new Nationally Determined Contribution (NDC) — a climate plan to be submitted to the UN. Cop parties are expected to publish their next NDCs to the Paris climate agreement — this time for 2035 — in November-February, as part of a cycle that requires countries to "ratchet up" their commitments every five years.

Russia's president Vladimir Putin announced Russia's 2060 net zero ambitions in October 2021, but the country has not updated its NDC since 2020.

The Cop 28 agreement signed in the UAE last year included an energy section calling for "transitioning away from fossil fuels in energy systems", a tripling of renewable capacity by 2030 and for "accelerating action in this critical decade", giving the direction countries need to take in the energy transition.

The country's main focus is on doubling the absorptive capacity of Russia's forests and producing and exporting more gas, to replace demand for more carbon-intensive oil and coal. Russia has no plans to reduce coal and oil output.

Russia's climate envoy Ruslan Edelgeriyev said in November 2022 that Moscow could achieve net zero a decade earlier than in 2060 if its access to international debt markets and technology was not blocked because of the sanctions imposed over Ukraine.

While reiterating net zero ambitions last year despite the sanctions, Putin repeatedly called accelerated decarbonisation irresponsible, claiming that it contributed to Europe's energy crisis in 2021.


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13/11/24

Cop: French energy minister cancels visit to Baku

Cop: French energy minister cancels visit to Baku

London, 13 November (Argus) — French energy minister Agnes Pannier-Runacher on Wednesday cancelled her planned visit to the UN Cop 29 climate summit in Baku, over what she called host Azerbaijan's "unacceptable remarks" on France and Europe. The minister had planned to arrive in Baku on 20 November, to take part in negotiations in the second week of the conference. The French president was not represented in high-level meetings this week, for the first time since the Cop 21 conference in Paris in 2015. "The direct attacks against our country, its institutions and its territories are unjustifiable," Pannier-Runacher told the French senate this afternoon. Azeri president Ilham Aliyev today raised "the so-called overseas territories of France and the Netherlands," while addressing a summit of leaders of small island states. The voice of the populations of the two countries' overseas territories are "often brutally suppressed by the regimes in the metropolis," he said. Aliyev criticised France's response to unrest and protests in the French overseas territory of New Caledonia earlier this year. He called the European parliament and Parliamentary assembly of the council of Europe "symbols of political corruption," and said they shared responsibility with French president Emmanuel Macron for deaths during the events. "Azerbaijan is instrumentalising the fight against climate change for an unworthy personal agenda," Pannier-Runacher said. "It is ironic that Azerbaijan, a repressive and liberticidal regime, is giving lessons in human rights," she said. And the minister criticised Azerbaijan's statements on fossil fuels. President Aliyev yesterday called oil and gas a "gift of god," and said producer countries should not be blamed for supplying market demand. French negotiating teams will work as usual at the conference, with her support from France, Pannier-Runacher said. "We will continue to advocate for the highest level of ambition in the implementation of the Paris Agreement, of which we are the guardians, ten years after its achievement," she said. France had hoped to keep its long-running diplomatic dispute with Azerbaijan under wraps during this Cop. Pannier-Runacher's visit was planned in a climate optic, rather than a bilateral one, with the intention of keeping the two countries' link to the side, a member of the minister's cabinet told Argus last week. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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No sign of peak in CO2 from fossil fuels: Report


13/11/24
News
13/11/24

No sign of peak in CO2 from fossil fuels: Report

London, 13 November (Argus) — Carbon emissions from fossil fuels are projected to hit a fresh record high of 37.4bn t in 2024, with "no sign" that these have peaked, a team of scientists said today in the 2024 Global Carbon Budget report. Total CO2 emissions are projected to reach 41.6bn t in 2024, up from 40.6bn t in 2023, which includes emissions of around 4.2bn t from land-use change, the report found. It also estimates the global carbon budget remaining before the 1.5°C temperature limit set out in the Paris climate agreement is "breached consistently over multiple years". The remaining carbon budget "has almost run out", the report found. There is a 50pc chance that warming will exceed 1.5°C above pre-industrial levels "consistently in about six years", the report found. There is uncertainty around the estimates, largely owed to the effects of other greenhouse gases (GHGs) such as methane and nitrous oxide, it noted. The Paris accord seeks to limit a rise in global temperature to "well below" 2°C above a pre-industrial average, and preferably to 1.5°C. This year is on track to be the hottest on record , the World Meteorological Organisation said on 11 November — the opening day of the UN Cop 29 climate summit in Baku, Azerbaijan. And drought conditions have helped to reverse a recent downward trend in CO2 emissions from land-use change — such as deforestation — in 2024. Those emissions are set to rise in 2024, after falling by 20pc in the past decade, the report found. Permanent CO2 removals from reforestation and planting new trees is "offsetting about half of the permanent deforestation emissions", it added. And the report authors noted that technology-based carbon removals — typically engineered, rather than nature-based — are at current levels only able to account for one-millionth of the CO2 emissions from fossil fuels. Projections for the highest-emitting countries — China, the US and India — are mixed. China's emissions are projected to increase by 0.2pc in 2024, although the report noted that the range means they could decrease. US emissions are set to drop by 0.6pc, while India's are projected to rise by 4.6pc this year. The Global Carbon Budget report — which will be peer-reviewed — is produced annually by an international team of more than 120 scientists. 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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Cop: Brazil aims for 67pc GHG reduction goal by 2035


13/11/24
News
13/11/24

Cop: Brazil aims for 67pc GHG reduction goal by 2035

Baku, 13 November (Argus) — Brazil energy minister Marina Silva said that the country is aiming to reduce greenhouse gas emissions by 67pc by 2035, compared with 2005 levels, but has failed to explain how oil exploration and production fits in the new ambition. Silva explained today that the country is aiming to reach the top end of its 59-67pc range by 2035, which was shared last week before the UN Cop 29 climate summit in Baku, Azerbaijan. The announcement had raised some doubts from climate experts about Brazil's ambition under its Nationally Determined Contribution (NDC) — climate plan. Silva said today that the range is to account for potential elements that could impact the country's climate plan, such as inflation. "We are focused on having absolute emissions of 850mn CO2e [by 2035]," she said today. "We encourage other countries to having equally ambitious goals." Brazil's new NDC is much more than a figure, Silva said. She described it as a "new paradigm for the social and economic development" of the country. She failed to explain what the new climate goal would mean for oil exploration and production in the country, and Brazil's vice-president Geraldo Ackmin highlighted the potential of Brazil's biofuels industry instead. "Around 85pc of Brazil's fleet is running on flexible engine cars using ethanol," he said. He pointed out to Brazil's potential to lead in sustainable aviation fuels and green hydrogen production thanks to its abundant feedstocks. Responding to Azerbaijan President Ilham Aliyev comments that oil and gas is a "gift of god", Silva said that "gods does give us gifts and we should take them with moderation." "If we have too much sugar we will be diabetic," she said. Some non-governmental organizations (NGOs) said that the new NDC is not in line with limiting global warming to 1.5°C above pre-industrial levels. Brazilian climate think tank Observatorio do Clima criticised the government for not increasing its targets for 2030 and for its failure to announce a plan to end the expansion of fossil fuel production. Oil Change International reiterated that Brazil's goal of being on the "forefront of the global energy transition" is incompatible with its plants to increase oil production over the next decade. Money in trillions Commenting on climate finance negotiations, Silva said that developed economies need to increase their efforts towards delivering financing support to developing countries, and that money needs to be "in trillions". "It is not happening at the speed needed," she added. Cop parties must agree at Cop 29 on a new collective quantified goal (NCQG) — the new finance goal — building on the current $100bn/yr target that developed countries agreed to deliver to developing countries over 2020-25. Brazil's secretary for climate, energy and environment Andre Correa said that developing countries are already frustrated by the fact that the $100bn/yr target was missed. Developed nations surpassed the goal by $15.9bn in 2022, but it was missed in 2020 and 2021, according to the OECD. Some developing countries say it has never been met. Developed countries are calling for a broadening of the contributor base, to include nations whose economic circumstances have changed since the UNFCCC was established in 1992. But Correa said that it would not be fair for rich nations to expect that developing economies contribute in the next finance goal as it is not under the rules of the Paris Agreement. "The discussion has been deviated," he said. "Taking into account that developed countries did not achieve the first attempt, it is reasonable to not ask developing economies to pay." By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Trump’s win yields mixed picture for LNG market


13/11/24
News
13/11/24

Trump’s win yields mixed picture for LNG market

London, 13 November (Argus) — Global gas and LNG market participants await clarity on president-elect Donald Trump's course of action once he takes office in January, as the net impact of some of its stated policies remains difficult to gauge. Price movements in recent days show little evidence of a market reaction to the outcome of the election. Prompt and near-curve LNG prices for delivery to Europe and Asia have risen, mostly tracking the increase in European hub prices. But the change in euro-denominated hub prices appears largely unrelated to the jump in the value of the US dollar that followed Trump's win. The dollar index, which measures the dollar against a basket of six other currencies, has rallied since Trump's victory became apparent, reaching a two-year high on 13 November. The US currency was worth over €0.95 on Wednesday, up from €0.91 on polling day. This might have contributed to stronger European hub prices, albeit only slightly. Exchange rates aside, the election result was never likely to have a serious short-term impact on the LNG market. The halt to Russian gas flows through Ukraine at the end of this year, when transit and interconnection agreements between Moscow and Kyiv expire, is the variable with the most disruptive potential for European gas markets that are much more reliant on LNG since Russia launched its full-scale invasion. But a shift in US policy would not be able to exert influence on any negotiations — which remain hypothetical at present — aimed at extending gas flows through Ukraine, given that Trump is only due to take office in late January. But Trump's policies might from next year affect the LNG market. US LNG producers have expressed mixed feelings about the consequences of a second Trump administration, with a dividing line emerging between firms that already export LNG and those that want to build new export facilities. Forward gas prices at the Dutch TTF hub also appear to show a mixed picture, with contracts for delivery next year and in 2026 rising broadly in line with the near curve, while prices for delivery in the following two years have held broadly stable. Operators of existing liquefaction facilities were wary of Trump's enthusiastic endorsement of protectionist policies, which they fear could trigger another trade war with China. The president-elect has pledged to impose a 20pc tariff on all imports — except those from China, which will instead be subject to 60pc. The possibility of Beijing following suit with retaliatory tariffs on US LNG— as in 2018-19, during Trump's first term — concerns many market participants. Trump's trade war with China in 2018-19 was widely seen as detrimental to development of the industry, as it hampered trade between the largest incremental producer and consumer. But the nature of most US LNG contracts — predominantly based on free-on-board delivery — reduced the short-term impact. While physical deliveries to China did vanish in 2019, no US LNG exporter reported cancellations that year, with cargoes simply resold elsewhere or swapped with LNG from other countries. The re-emergence of similar trade disputes from next year could force another reconfiguration of trade flows, possibly facilitated by the fact Europe is now a much larger LNG importer than in 2018-19, when it was heavily dependent on Russian pipeline gas. Physical deliveries of US LNG to China fell sharply in 2022 and have still been at less than half their 2021 peak this year (see chart). But while higher than six years ago, Europe's LNG demand has not pushed beyond 2022's record, and the amount of US LNG in Chinese portfolios is also much larger. On the other hand, developers of new US liquefaction facilities have pinned their hopes on Trump's pledge to reverse the Biden's administration licensing pause, which froze projects and in some cases lost them contracts. But speeding up project approvals could result in a much more amply supplied market later in the decade, when a swathe of new facilities are already due on line (see chart) Industry figures have suggested the [LNG market could be oversupplied as early as 2028](https://direct.argusmedia.com/newsandanalysis/article/2493845. The greatest uncertainties are related to how Trump deals with the conflict in Ukraine. He has boasted he would end the war on his first day in office — overly optimistic at best. But even if his administration could bring about a swift end to the conflict, a full normalisation of relations between Russia and Ukraine is difficult to imagine. Nevertheless, a relaxation of US sanctions — including those targeting Russia's existing 19.8mn t/yr Arctic LNG 2 terminal — could be an initial bargaining chip and might result in an immediate increase in supply. By Antonio Peciccia US liquefaction capacity mn t/yr US LNG deliveries to China mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US inflation rises in October to 2.6pc


13/11/24
News
13/11/24

US inflation rises in October to 2.6pc

Houston, 13 November (Argus) — US inflation ticked higher in October, led by monthly gains in shelter, a reminder that the last lap in the Federal Reserve's marathon to bring inflation to its long-term target remains a challenge. The consumer price index (CPI) accelerated to an annual 2.6pc in October, in line with analysts' forecasts in a survey by Trading Economics, from 2.4pc in September, which was the lowest since February 2021, the Labor Department reported today. Core inflation, which strips out volatile food and energy prices, rose at a 3.3pc rate, unchanged on the month. The energy index contracted by 4.9pc over the 12 months, slowing from a decline of 6.8pc through September. The gasoline index fell by 12.2pc, slowing from a 15.3pc decrease the prior month. The fuel oil index fell by 20.8pc. Federal Reserve policymakers last week cut the target rate by a quarter point, following a half-point cut in September that kicked off an easing cycle from then-23-year highs. Inflation has slowed to near the Fed's 2pc target from highs above 9pc in mid-2022 that proved to be a major impetus behind president-elect Donald Trump's victory at the ballot box on 5 November. The CME's FedWatch tool today gives near-80pc odds of another quarter-point cut in December. "The economy can develop in a way that would cause us to go faster or slower" in adjusting rates lower, Fed chair Jerome Powell told reporters last week after the Fed decision. The food index rose by an annual 2.1pc, slowing from a 2.3pc gain through September. Shelter rose by an annual 4.9pc, unchanged. Transportation services rose by 8.2pc. New vehicles fell by 1.3pc while used vehicle prices fell by 3.4pc. Services less energy services, viewed as core services, rose by 4.8pc. On a monthly basis, CPI rose by 0.2pc in October, a fourth month of such gains after falling by 0.1pc in June. Core inflation rose by 0.3pc for a third month. Shelter accelerated to a 0.4pc monthly gain, accounting for over half of the monthly all-items increase, after a 0.2pc gain. Energy was unchanged in October after falling by 1.9pc in September from the prior month. Food rose by 0.2pc on the month, following a 0.4pc gain. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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