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EU agrees negotiating mandate for Cop 29

  • Market: Emissions
  • 15/10/24

EU ministers have agreed a general negotiating mandate for the UN Cop 29 climate conference, calling for a new climate finance goal, but without mentioning a concrete amount or range of figures for this.

The main point of the EU's mandate remains that of obtaining an "ambitious and balanced" agreement at Cop 29, to be held on 11-22 November in Baku, Azerbaijan. The deal should still hold out hope of maintaining global temperatures within 1.5°C of pre-industrial levels in the "light of the best available science", according to the EU position. The bloc's environment and climate ministers want a Baku text to move "us all forward towards long-term resilience".

The text sticks to language in a previous draft, underlining the need for "transitioning away from fossil fuels", tripling renewable energy capacity, and doubling annual energy efficiency gains by 2030 — all points agreed at last year's Cop 28.

Countries, and especially major economies, should significantly enhance their national climate plans — known as nationally determined contributions (NDCs) — with greenhouse gas (GHG) emissions peaking before 2025, EU ministers said. NDCs should contain "economy wide absolute emission reduction targets" for all GHGs, they added.

The EU will push for a global approach to carbon pricing. The bloc will "encourage" all jurisdictions to introduce or improve their own domestic carbon pricing mechanisms.

And ministers stressed the need to "explore" innovative options for widening the sources of climate finance, including "carbon pricing, levies for implementing climate action" and the "scaling down of harmful incentives". That mirrors language in EU finance ministers' conclusions on international climate finance.

Finance will be the key topic at Cop 29, where countries must finalise the details of a new climate finance goal. Funding needs for this are "in the space of… trillions" of dollars, Azerbaijan's lead negotiator Yalchin Rafiyev said this week. But a "realistic goal for what the public sector could directly provide and mobilise seems to be in the hundreds of billions", he said.

The Cop 29 presidency hosted a series of 'pre-Cop' meetings on 8-12 October, including ministerial dialogues. Some progress was made, the presidency said. Ministers "must now return to their capitals to secure the mandates they need for the breakthroughs they must deliver. There is no excuse for anyone to arrive at Cop 29 without clear political support to make progress", incoming Cop 29 president Mukhtar Babayev said this week.


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31/10/24

US biofuel feedstock use dips in August

US biofuel feedstock use dips in August

New York, 31 October (Argus) — Renewable feedstock usage in the US was down slightly in August but still near all-time highs, even as biomass-based diesel production capacity slipped. There were nearly 3.5bn lbs of renewable feedstocks sent to biodiesel, renewable diesel, and sustainable aviation fuel production in August this year, up from fewer than 3bn lbs a year prior, according to the US Energy Information Administration's (EIA) latest Monthly Biofuels Capacity and Feedstocks Update report. August consumption was 0.4pc below levels in July and 0.5pc below record-high levels in June. US soybean oil consumption for biofuels rose to 39.3mn lbs/d in August, up by 2.1pc from a year earlier on a per-pound basis and up 6.9pc from a month prior. The increase was entirely attributable to increased usage for renewable diesel production, with the feedstock's use for biodiesel slipping slightly from July. Canola oil consumption for biofuels hit 14.2mn lbs/d, up by 58.1pc from a year prior on a per-bound basis but still 19.4pc below record-high levels in July. Distillers corn oil usage, typically less volatile month-to-month than other feedstocks, bucked that trend to hit a high for the year of 13.6mn lbs/d in August. That monthly consumption is up 13.6pc from a year earlier and 20.9pc from a month earlier. Among waste feedstocks, usage of yellow grease, which includes used cooking oil, rose to 22.4mn lbs/d in August, up 13.8pc from levels a year prior and 5.8pc from levels in July. Tallow consumption for biofuels was at 18.6 mn lbs/d over the month, an increase of 27.8pc from August last year but a decrease of 13.4pc from July this year. Production capacity of renewable diesel and similar biofuels — including renewable heating oil, renewable jet fuel, renewable naphtha, and renewable gasoline — was at 4.6bn USG/yr in August, according to EIA. That total is 24.1pc higher than a year earlier and flat from July levels. US biodiesel production capacity meanwhile declined to fewer than 2bn USG/yr over the month, down by 4.3pc from a year earlier and 1.3pc from a month earlier. US biomass-based diesel production capacity has expanded considerably in recent years, but refiners have recently confronted challenging economics as ample supply of fuels used to comply with government programs has helped depress the prices of environmental credits and hurt margins. The industry is also bracing for changes to federal policy given this year's election and a new clean fuel tax credit set to kick off in January. That credit, known as "45Z", will offer a greater subsidy to fuels that produce fewer greenhouse gas emissions, likely encouraging refiners to source more waste feedstocks over vegetable oils. That dynamic is already shaping feedstock usage this year, with Phillips 66 executives saying this week that the company's renewable fuels refinery in California is currently running more higher carbon-intensity feedstocks ahead of a shift to using more waste early next year. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US court set to weigh biofuel blend mandates


31/10/24
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31/10/24

US court set to weigh biofuel blend mandates

New York, 31 October (Argus) — A US court on Friday will weigh some novel issues that could affect enforcement of the Renewable Fuel Standard (RFS), the federal program that sets minimum biofuel blending levels for domestic motor fuel supplies. The Environmental Protection Agency (EPA) in last year's RFS regulation required refiners and importers to blend increasing volumes of renewable fuel from 2023-2025. But the rule differed from past obligations in a crucial way. While the RFS law set annual volume targets of cellulosic, advanced and conventional biofuels through 2022, it tasked EPA with setting volumes in subsequent years by balancing factors such as the environmental impacts of biofuels, energy security, expected production and consumer costs. In a consolidated case to be heard Friday by the US Court of Appeals for the District of Columbia Circuit, environmental groups and oil refiners are separately challenging aspects of how the EPA applied those factors in setting 2023-25 volumes. The court has previously affirmed the legality of many RFS rules. "Past cases always give you some perspective on how the DC court might see it," said Susan Lafferty, a partner at law firm Holland & Knight. "But the DC court could also say, ‘not relevant anymore because this is a different part of the statute that we are working with.'" Refiners say EPA misapplied the criteria, upping compliance costs more than necessary by setting targets for cellulosic and conventional biofuels too high and targets for advanced biofuels too low. They also challenge EPA's balancing of potential impacts, noting that the agency assumed that all parties can easily pass the costs of compliance on to consumers. In a separate case this year, the DC Circuit discarded EPA rejections of program waiver petitions, in part because judges disagreed that refiners can easily pass on the cost of Renewable Identification Number (RIN) credits used to show compliance with the RFS program. EPA used this pass-through theory in the 2023-2025 rule "like a magic wand, waving it around to dismiss any argument that the rule will cause harm", the American Fuel and Petrochemical Manufacturers and small refineries said in a case filing. Lafferty expects the judges at Friday's hearing to probe the extent to which EPA's volumes relied on this pass-through theory, "a policy that now this very court has gutted." Environmentalists have similarly targeted EPA's cost analysis, arguing that the agency downplayed the environmental drawbacks of growing crops for energy. The Center for Biological Diversity and the National Wildlife Federation argue that EPA has legal discretion to set post-2022 volumes for corn- and soybean-derived biofuels as low as zero. EPA counters that the court owes the agency deference in evaluating scientific data and making predictive judgments. And biofuel groups that have intervened argue that the program is designed to require more biofuel production even if there are no formal volume requirements in law anymore. While EPA's post-2022 authority to set blend mandates is a new issue, the DC Circuit has handled various cases about EPA's implementation and has generally been deferential to the agency's volume decisions. The court this year upheld 2020-2022 targets. In a 2019 decision, the court kept volumes in place , despite telling EPA to more deeply weigh endangered species impacts. While the court might take issue with some aspects of EPA's latest rule, including the agency's lateness in finalizing volumes, judges could again be reluctant to upend fuel markets if they find only small oversights. Depending on how skeptical judges appear about EPA's arguments on Friday, the case could cause concern for biorefineries. A decision is expected next year, meaning any order for EPA to better justify its decisions or go back to the drawing board would likely fall to the next president's administration. On the panel for Friday's hearing are two judges familiar with the program: Democratic appointee Cornelia Pillard, who wrote the opinion this year upholding 2020-2022 blend mandates, and Republican appointee Gregory Katsas, who dissented and said those volumes were excessive. The third judge on the panel is Democratic appointee J. Michelle Childs. RINcrease or decrease RIN market activity has thinned as participants await the results of the court case and November's presidential election. In its latest rule, EPA aimed to provide a clearer picture over a longer timeline by finalizing volumes over multiple years. But the agency underestimated the growth in renewable diesel production, partly because of unexpectedly high feedstock imports. The result has been persistent oversupply, which took D4 biomass-based diesel credit prices from around 150¢/RIN in spring last year to as low as 42¢/RIN a year later according to Argus assessments. Multiple refiners have consequently dialed back biofuel production. In the past, RIN prices have proven sensitive to legal developments as traders anticipate supply and demand shifts. Prices softened this summer after the DC Circuit vacated small refinery waivers, leaving it unclear whether many facilities would have to buy RIN credits at all. By Cole Martin and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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UK government consults on oil and gas scope 3 emissions


30/10/24
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30/10/24

UK government consults on oil and gas scope 3 emissions

London, 30 October (Argus) — The UK government has opened a consultation seeking views on assessing the effects of scope 3 — or end-use — emissions from proposed offshore oil and gas projects. "Scope 3 emissions from downstream activities need to be assessed… in relation to offshore oil and gas production activities", the government said today. It proposed that a baseline scenario is defined for assessing scope 3 emissions, to set out how the environment "is likely to evolve without the development of a proposed project". The government also proposed that information on "relevant scope 3 categories" is included when a developers applies for a permit. This would include the effects of emissions from the combustion of oil or gas, as well as "other downstream activities", such as refining or transport of fuels. The UK's current process means that developers applying for consent must provide information on scope 1 and 2 — operational — emissions in an environmental statement. But scope 3 emissions are not included, despite making up around 80-95pc of emissions for a typical oil and gas company. The consultation was spurred by a ruling made in June by the UK's Supreme Court. The judgment ruled that consent for an oil development in southern England was unlawful, as the scope 3 emissions were not considered. The government — which was elected in early July, shortly after the ruling — has halted the assessment of any environmental statements related to oil and gas extraction and storage activities, including any that were already being assessed. These would be deferred until the new environmental guidance was in place, expected in spring 2025. The consultation will close on 8 January 2025. Separately, the government will consult by the end of this year on the implementation of its commitment to issue no new oil and gas licences to explore new fields, it said today. The UK has a legally-binding target of net zero emissions by 2050. 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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Australia to support four new carbon credit methods


30/10/24
News
30/10/24

Australia to support four new carbon credit methods

Sydney, 30 October (Argus) — The Australian federal government will support the development of four new carbon crediting project methodologies proposed outside of government, federal energy minister Chris Bowen announced today. A total of 39 expressions of interest under the proponent-led model launched earlier this year were submitted to the Emission Reduction Assurance Committee (Erac), the statutory body responsible for ensuring the integrity of Australia's carbon crediting framework. The four selected proposals will now move on to the development phase. "Capturing opportunities across Australia remains a key priority for the government, and we've been working to deliver on the Chubb Review recommendation to bring forward more innovative ways to reduce emissions," Bowen told delegates at the Carbon Market Institute (CMI)'s Australasian Emissions Reduction Summit in Melbourne on 30 October. Two of the selected methods were proposed by state governments — the "improved native forest management in multiple-use public native forests (INFM)" method, put forward by the New South Wales (NSW) department of climate change, environment, energy and environment, and the "improved avoided clearing of native regrowth (IACNR)" proposed by the Queensland department of environment, science and innovation. The two others came from indigenous groups — the "extending savanna fire management to the northern arid zone" proposed by the Indigenous Desert Alliance, and the "reducing disturbance of coastal and floodplain wetlands by managing hooved animals" proposed by Northern Australian Indigenous Land and Sea Management Alliance. The successful proponents will now lead work on the drafting of the methods, with the Erac to publish the draft methods for public consultation before recommending them to the minister. A representative from the Department of Climate Change, Energy, the Environment and Water (DCCEEW) previously said that developing a new method under the proponent-led model could take 1-2 years. Delays with new methods The development of new Australian Carbon Credit Unit (ACCU) framework methods had been until now led by the federal government, but this has proved "too slow," CMI's chief executive John Connor previously said. Work on a remake of the Environmental Plantings (EP) method, which will make it easier for landholders to undertake projects, is expected to be finalised by the end of the year, Bowen said on 30 October. The method already expired on 30 September this year. And exposure drafts for three other priority methods will only be delivered in the first half of next year, Bowen noted, including the long-awaited government-led Integrated Farm and Land Management (IFLM) method that will combine activities of several existing soil and vegetation sequestration methods into a single method. This includes the key human-induced regeneration (HIR) ACCU method, which expired on 30 September 2023. The DCCEEW had previously indicated the IFLM exposure draft would be sent to Erac by the end of this year, which would then be followed by public consultation. The other exposure drafts are for new savanna fire management methods and for a reformed landfill gas method which could potentially lead to tighter supplies in the future . By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Washington state race may shift climate priorities


29/10/24
News
29/10/24

Washington state race may shift climate priorities

Houston, 29 October (Argus) — Washington state's gubernatorial race is likely to lead to a change in the attention given to climate change-related policy as governor Jay Inslee (D) exits office. The race between state attorney general Bob Ferguson (D) and former US representative and King County Sheriff Dave Reichert (R) remains one-sided as it approaches election day 5 November, in a solidly Democrat-leaning state. Ferguson retains a wide lead over his opponent, with a Cascade PBS/Elway survey earlier this month showing 56pc of likely voters supporting the attorney general and 37pc backing Reichert. Washington voters have not elected a Republican governor since 1980, backing Democrats in 10 straight elections. "The numbers are going to be really hard for him because there is so many people that will see whoever's name has a ‘D' next to it and that is how they'll vote," said Todd Donovan, a professor of political science at Western Washington University. While Democrats have a good chance of retaining the governor's seat, it is unlikely that a Ferguson administration will feature the same focus on climate change as his predecessor. Inslee, a three-term governor, has been a vocal supporter of climate policies such as the state's Climate Commitment Act dating back to his time in the US House of Representatives. That includes an unsuccessful 2020 presidential bid, which focused heavily on climate and clean energy. The state climate law authorized the "cap-and-invest" program, which launched in January 2023 and requires large industrial facilities, fuel suppliers and power plants to reduce their emissions by 45pc by 2030 and by 95pc by 2050, from 1990 levels. But climate policies remain a distant-third campaign issue for both candidates, with each focusing more on abortion, housing and crime. Climate is an area where Inslee led the conversation, and not the party, says Donovan. "The Democrats are more in defensive mode defending [Inslee's] legacy and the climate policies in the face of these initiatives," he said of the current election. This defense has centered around Initiative 2117, which would repeal the cap-and-trade program. Democrats have focused the campaign around stopping the initiative on how it could affect funding, including $3.3bn lawmakers appropriated for climate-related projects earlier this year, rather than the impacts of climate change, Donovan said. Ferguson supports retaining the program but has called for changes, such as ensuring farmers receive the promised exemption from emissions obligations for fuel, which was a point of contention in the original rollout of the program. Reichert supports the repeal of the program, citing it as adding to higher consumer fuel prices in the state while putting Washington on an unrealistic timeline for transitioning off fossil fuels, he said during an 18 September debate. The move is part of Reichert's larger platform, which focuses on limiting state taxes and supporting small businesses. "We can't put a predesignated date on when we are going to change things and expect things just to work," Reichert said. Ferguson has tried to position his opponent as a climate change denier in recent campaign appearances and materials, citing a recording of Reichert denying human impact on the climate. Recent polling in the state shows a softening of support for Initiative 2117, suggesting voters will decide to retain the cap-and-trade program. If that happens, a Ferguson administration may seek to change the shape of the Washington's carbon market on the other side of the election. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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