UN Cop 29
Overview
Argus provides key insights into the developments and discussions at Cop. We shine a light on how they will affect the global energy and commodity markets.
Decisions made at Cop meetings have far-reaching effects on the markets we serve. Almost 200 countries agreed on "transitioning away from fossil fuels in energy systems" and tripling renewable power capacity at the UN Cop 28 summit in Dubai last year.
Progress at the next two meetings will be crucial in transforming ambitions into actions aligned with the Paris Agreement. Countries must get new plans ready for 2025.
This year, Cop 29 will focus on climate finance. It will cover funding energy transition in developing countries, and increasing private sector involvement and sectorial investment. Article 6 and voluntary carbon markets discussions will also take centre stage.
Follow the key developments in energy transition field with our Net zero page and keep up to date with ongoing coverage of these issues by following Argus Media on LinkedIn and on X.
News
South Africa adopts climate change law
South Africa adopts climate change law
Cape Town, 25 July (Argus) — South Africa's president Cyril Ramaphosa has signed into law the country's climate change bill, which sets out a national response to climate change for the first time. The new climate change act will enable the orderly reduction of greenhouse gas (GHG) emissions through the implementation of sectoral emission targets towards South Africa's commitment to reach net zero by 2050. Currently, the country is the 15th largest GHG emitter in the world, according to the World Resources Institute. The law provides policy guidelines to ensure South Africa reaches its nationally determined contribution (NDC) under the Paris climate agreement by assigning individual enterprises carbon budgets and facilitating public disclosure of their progress. In its updated 2021 NDC, the country has undertaken to cut its GHG emissions to 350mn-420mn t of CO2 equivalent (CO2e), equivalent to 19-32pc below 2010 levels, by 2030. The lower end of this range is in line with the Paris Agreement's 1.5°C global warming threshold. To meet this, South Africa will have to achieve a steep decline in coal-fired electricity generation. A carbon tax is seen as a vital component of the country's mitigation strategy, according to the president. "By internalising the cost of carbon emissions, carbon tax incentivises companies to reduce their carbon footprint and invest in cleaner technologies, and also generates revenue for climate initiatives," Ramaphosa said. South Africa's carbon tax was introduced in a phased approach in June 2019 at a rate of 120 rands/t ($7/t) of CO2 equivalent (CO2e) and increased to R134/t of CO2e by the end of 2022. But tax-free allowances for energy-intensive sectors such as mining, and iron and steel, along with state-owned utility Eskom's exemption, implied an initial effective carbon tax rate as low as R6-48/t of CO2e. South Africa's National Treasury is targeting an increase to $30/t of CO2e by 2030. But the extension of phase one from the end of 2022 to the end of 2025, together with an uncertain future price trajectory and lack of clarity on future exemptions, means the effective carbon tax rate is likely to remain well below the IMF's recommended $50/t of CO2e by 2030 for emerging markets. The new climate change act seeks to align South Africa's climate change policies and strengthen co-ordination between different departments to ensure the country's transition to a low-carbon and climate-resilient economy is not constrained by any policy contradictions. It outlines South Africa's planned mitigation and adaptation actions aimed at cutting GHG emissions over time, while reducing the risk of job losses and promoting new employment opportunities in the emerging green economy. The law also places a legal obligation on provinces and municipalities to ensure climate change risks and associated vulnerabilities are acted upon, while providing mechanisms for national government to offer additional financial support for these efforts. The new act formally establishes the Presidential Climate Commission (PCC) as a statutory body tasked with providing advice on the country's climate change response. Among other things, the PCC is developing proposals for a just transition financing mechanism, for which a platform will be launched in the next few months. Over the last three years, South Africa has seen an increase in extreme weather events often with disastrous consequences for poor communities and vulnerable groups. To address the substantial gap between available disaster funds and the cost of disaster response, the government announced in February that it would establish a climate change response fund. At the time of the announcement, Ramaphosa reiterated that South Africa would undertake its just energy transition "at a pace, scale and cost that our country can afford and in a manner that ensures energy security". Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU pledges €20mn to Brazil's Amazon fund
EU pledges €20mn to Brazil's Amazon fund
Sao Paulo, 23 July (Argus) — The EU has signed a letter of intent with Brazil's Bndes development bank to donate €20mn ($21.7mn) to the Amazon fund as part of broader efforts by Europe to support sustainable development in Brazil. The fund is the world's largest to use the REDD+ framework, which aims to reduce emissions from deforestation and forest degradation and promote sustainable forest management. It has R3.9bn under management and has supported 114 projects to date. The European Investment Bank also agreed to finance €300mn in Brazilian energy transition, green economy and digital transition projects under "very favorable" conditions, it said. The Amazon fund resumed operations last year, after suspending operations for four years during the government of former President Jair Bolsonaro. It attracted R726mn ($130mn) in 2023 . Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil issues guidelines for Amazon power program
Brazil issues guidelines for Amazon power program
Sao Paulo, 22 July (Argus) — Brazil's mines and energy ministry presented the initial guidelines for a program that aims to reduce power generation costs in the Amazon basin. The program also aims to reduce the carbon footprint of power generated in the Amazon basin. The government plans to hold public hearings to define the eligibility criteria for projects that can participate in the program. The program will use funds from the 2022 privatization of power company Eletrobras. The firm transferred R924mn ($166.7mn) to the federal government on 31 January. By law, these funds need to be used to reduce power generation costs and expand power transmission investments in the Amazon basin. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop 29 president seeks climate funds from oil producers
Cop 29 president seeks climate funds from oil producers
London, 22 July (Argus) — The UN Cop 29 climate summit's Azeri presidency plans to launch a climate fund, capitalised with voluntary contributions from oil, coal and gas-producing countries and companies, to support developing economies address climate change. Cop 29 president-designate Mukhtar Babayev has called on contributors to "come forward with climate finance". The Cop 29 presidency is targeting $1bn in initial fundraising, and Azerbaijan will be "a founding contributor", it said. Azerbaijan said last week that it aims to increase its gas exports to Europe . The fund — the Climate Finance Action Fund (CFAF) — will be filled initially with voluntary contributions from fossil fuel-producing countries and companies, the Cop 29 presidency said. "Members will commit to transfer annual contributions as a fixed sum or based on volume of production," it added. The fund's board will include contributor representatives, the presidency said. Half of the fund's capital will go to climate projects in developing countries, supporting renewable energy and adaptation — adjusting to the effects of climate change where possible. The remainder will help countries form their national climate plans — known as nationally determined contributions (NDCs) — in line with the Paris climate agreement, the Cop 29 presidency said. The CFAF aims to mobilise the private sector and de-risk investment, and "profits generated from projects will be reinvested in the fund", the presidency said. It plans to divert 20pc of revenues from investments to a facility "providing highly concessional and grant-based support", accessible to vulnerable countries experiencing the consequences of natural disasters, it added. If operationalised, the fund would join the loss and damage fund in being reliant on voluntary contributions. Loss and damage refers to the unavoidable and irreversible effects of climate change, such as rising sea levels. The call for fossil fuel producers to provide climate finance is not new. EU ministers at the Cop 27 summit in 2022 suggested that oil and gas companies should contribute to the loss and damage fund, then under discussion. The Cop 29 presidency set out its plans for the summit alongside 13 other initiatives. These include a "green energy pledge", the signatories of which will "commit to green energy corridors, zones and grids", according to the presidency. It also named objectives to increase energy storage capacity to 1.5TW by 2030 and to address barriers to a global low-emissions hydrogen market. Cop 29 is scheduled to take place on 11-22 November in Baku, Azerbaijan. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Analysis and explainers
UK election pledges show different paths to net zero
UK election pledges show different paths to net zero
The outcome of the election will have a significant impact on the pace of energy transition, particularly regarding North Sea gas production, writes Georgia Gratton London, 26 June (Argus) — The UK's two main political parties have set out their plans on energy and climate change in their manifestos, ahead of the country's general election on 4 July. Energy security and the cost to consumers is a common theme, but the two parties diverge on their approach to the energy transition. Both the incumbent Conservative and opposition Labour parties are committed to the country's goal of achieving net zero emissions by 2050, which is legally-binding and was passed with significant cross-party support under a Conservative government in 2019. The Conservatives have promised a "pragmatic and proportionate" route to achieve that target — guaranteeing "no new green levies or charges". Labour, which according to recent polls is on course to secure a sizeable majority, has pledged to accelerate the path to net zero, and has committed to a zero-carbon UK power system by 2030. Labour has pledged to "maintain a strategic reserve of gas power stations to guarantee security of supply", but its manifesto does not clarify whether that would involve building any new plants to replace ageing units. In contrast, the Conservative manifesto reiterates previously announced plans to build new gas-fired power stations. The party had previously committed to a decarbonised power network by 2035, in line with a G7 pledge, although that is not mentioned in its manifesto. Both parties are considering measures that could reduce residential gas demand in the long term. They have pledged to invest similar amounts of public money in energy efficiency schemes — £6.6bn ($8.3bn) over the next parliament for Labour, which it says will be used to upgrade 5mn homes, against £6bn over the next three years for the Conservatives, which their manifesto says will "make a million homes warmer". Labour also plans to work with the private sector, including banks and building societies, to facilitate the provision of further private finance in such schemes. The Conservative Party announced that it will fund an "energy efficiency voucher scheme", without providing further details. The different pace of the parties' energy transition plans is apparent from their respective renewable energy targets. Labour's plans to "double onshore wind, triple solar power, and quadruple offshore wind by 2030" would result in installed capacity of 31GW, 48GW and 59GW, respectively, against an end of 2023 baseline. The Conservatives' target to triple offshore wind by the end of the next parliament would put installed capacity at 44GW in 2029 — below the 50GW target for 2030 set in 2022 — while it said it supports solar and onshore wind in some circumstances. The two main parties support nuclear power, including small modular reactors, although those are unlikely to be operational until after 2030. And both pledge to cut planning bureaucracy and tackle grid connections. Diverging upstream The parties have adopted markedly different positions with regard to North Sea oil and gas production. Labour is clear that it "will not revoke existing licences" in the North Sea, but it will not issue any new licences for oil, gas or coal exploration or production, and has pledged to "ban fracking for good". The Conservatives have restated their aim to legislate for annual North Sea licensing rounds, and to "retain the current moratorium on fracking". The Conservative Party aims to keep the windfall tax — which effectively results in a 75pc rate — on oil and gas producers' profits in place "until 2028-29, unless prices fall back to normal sooner". Labour has confirmed plans to lift the rate to 78pc and to retain the tax until the end of the next parliament, which is likely to be mid-2029. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Climate finance divisions remain entrenched
Climate finance divisions remain entrenched
Who should pay, and how much, remain critical sticking points to a deal, write Georgia Gratton, Caroline Varin and Chloe Jardine London, 14 June (Argus) — UN climate talks in Bonn, Germany, ended this week with little progress made on the key issue of climate finance, despite two weeks of negotiations. Countries that are party to UN climate body the UNFCCC managed to "streamline" some details of a new climate finance goal. "We've taken modest steps forward [but] too many issues were left unresolved," UNFCCC executive secretary Simon Stiell said. Countries must finalise details of the new collective quantified goal (NCQG) at the UN Cop 29 climate summit in Baku, Azerbaijan, in November. But existing positions remained entrenched and there are still significant divisions among countries, think-tank E3G said. The NCQG represents the next stage of the $100bn/yr in climate finance that developed countries committed to deliver to developing countries over 2020-25, and countries must decide on several points. These include how much finance should be provided, who should contribute, who should benefit or qualify as "particularly vulnerable" and the quality of the finance — loans or grants — along with the role of private finance. Some countries, including those classed by the UN as the least developed countries (LDCs), are also calling for sub-goals to address issues such as ‘loss and damage', which refers to the unavoidable and irreversible effects of climate change. Developed countries did not come forward with a new finance number during the negotiations, despite being pressed repeatedly by developing nations to do so. The latter, including Saudi Arabia, India and African nations, are calling for at least $1 trillion-1.3 trillion/yr. The US said that it supports a goal that is "fit for purpose" and "from a floor of $100bn/yr", while long-running disagreement on the donor base re-emerged. The UNFCCC works from a list of developed and developing countries dating from 1992, when the body was established. But the EU and other developed nations argue that circumstances have changed in that time and call for some high-emitting developing countries, such as China or Saudi Arabia, to contribute some finance. China made it clear that it has no intention of doing that. "Developing countries voluntarily support each other beyond our capacity and we have no intention to make your numbers look good," the country's negotiator said. While amending the lists of developed and developing nations is technically possible, it would be a lengthy and difficult process. And "the costs of the climate crisis… are only getting worse", Stiell reminded delegates. Trust in the process The issue of climate finance loomed over other discussions in Bonn too. Many countries at the closing plenary expressed deep regret about the lack of progress made in talks about mitigation, which refers to cutting emissions. Means of implementation — finance — and mitigation are "two sides of the very same coin", Brazil's representative said. Brazil, as this year's G20 president and next year's Cop 30 host, has taken a leading role in the climate space. The country's negotiator also raised the issue of trust. Many workstream processes "are now a courthouse, where we accuse each other and where we judge each other", he said. It is a recurring theme in climate finance discussions, as many parties point out that developed nations only hit the $100bn/yr goal in 2022. The issues discussed in Bonn will be carried forward for further negotiation at Cop 29, although Stiell called for a "substantive framework of a draft decision" on the NCQG ahead of the summit. There is a "very steep mountain to climb to achieve ambitious outcomes in Baku", he told delegates. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU faces tougher path to climate legislation
EU faces tougher path to climate legislation
Right-wing parties' strong showing in the European Parliament elections are likely to mean a looser embrace of the Green Deal, writes Dafydd ab Iago Brussels, 14 June (Argus) — The European Parliament elections have resulted in a workable majority for parties that supported the EU's 2030 climate and energy strategy. But political uncertainty in the EU's two largest countries, Germany and France, could add to the difficulties the bloc faces in legislating for its2040 target of cutting net greenhouse gas (GHG) emissions by at least 90pc, compared with 1990 levels. Outgoing member of the European Parliament Markus Pieper sees the majority paving the way for a more pragmatic approach in 2024-29, with internal combustion engine vehicles staying on the roads beyond 2035, and more flexible rules for CO2-neutral fuels such as low-carbon hydrogen, e-fuels, and biofuels. The newly constituted parliament's first plenary session is scheduled to take place in Strasbourg on 16-19 July, when members will choose the parliament's next president and vice-presidents and decide on committee memberships. Awaiting legislation for 2040 climate goals, members from the influential environment and energy committees have a range of technical legislation to approve related to the bloc's 2030 climate goals. This begins with the approval of legislation defining vehicles running "exclusively" on CO2-neutral fuels . A little further down the line, the environment committee will weigh in on legislation setting methane intensity classes for producers and companies selling oil, gas and coal in the EU by 2030. Passing legislation for the 2040 GHG targets will depend on parliamentary and member state approval. Overseeing the legal proposals will be the European Commission president, with Ursula von der Leyen eyeing re-election to this post after her centre-right EPP won 189 seats in parliament. Together with centre-left and liberal parties, von der Leyen's EPP group could form a comfortable majority for climate and energy legislation, with over 400 of the 720 seats. This does not include the Greens, who lost 19 seats and are now down to 53, nor the 135 centre-left socialists. The election results have undoubtably strengthened von der Leyen's bid to be re-elected as commission president, and EU leaders are due to meet on 17 June for their first formal discussions on the matter. The parliament as a whole must approve the EU leaders' choice of commission president, along with the 27 commissioners, including those responsible for energy and climate, that are to take office by the end of the year. Green knights Von der Leyen oversaw the implementation of the Green Deal — the overarching set of policies aimed at cutting EU GHG emissions by 55pc by 2030 compared with 1990 levels. Environment committee member Michael Bloss says it is "absurd" that the Greens now appear to have to come to von der Leyen's aid to rescue her Green Deal, and that he fears the prospect of von der Leyen's EPP group forming majorities in parliament with the conservative ECR and far-right groups. "The Green Deal is not dead," Bloss says. If reappointed, von der Leyen will find herself contending with national capitals more willing to oppose ambitious climate and energy targets. In response to strong gains by the far-right, eurosceptic National Rally party in the EU elections, French president Emmanuel Macron dissolved parliament and called snap National Assembly elections for 30 June and 7 July. And Germany's far-right opposition AfD party outperformed chancellor Olaf Scholz's centre-left SPD, altering Berlin's coalition politics. With Germany's Bundestag election on the horizon in September or October 2025, sensitive coalition politics could well hinder approval of more ambitious, and costly, EU climate legislation. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Rival energy policies unclear as UK election looms
Rival energy policies unclear as UK election looms
London, 3 June (Argus) — The UK has dissolved its parliament as the country prepares for a general election on 4 July. Opposition party Labour has held a substantial lead in polls in recent months over the incumbent Conservatives, but voters are awaiting firm details on many policies — including energy. Confirmation of a summer election by prime minister Rishi Sunak surprised some, but his statement coincided with official data showing that UK inflation has fallen to its lowest in nearly three years. Parties have yet to release detailed manifestos, although Labour is broadly more supportive of net zero policy. The party, led by Keir Starmer, performed well in local elections in early May. It won nearly 200 seats on local councils, as well as several regional mayoral contests, while the Conservatives lost almost 500 council seats. Notably, Labour's Sadiq Khan — who firmly backs environmental measures — increased his support to win a third term as London mayor. Immigration, fiscal policy and healthcare will be the major campaigning issues for all parties, but climate policy is also key. Sunak has rolled back some decarbonisation policies, including pushing back the date to end sales of new internal combustion engine (ICE) cars, while he encouraged more domestic oil and gas production. And Conservatives seized on discontent with the capital's ultra-low emission zone transport policy — planned, ironically, by Conservative then-mayor and later prime minister Boris Johnson — to win a by-election in the London suburbs last year. But legislation to mandate an annual North Sea oil and gas licensing round was not adopted before parliament dissolved. The bill was not among those selected for the "washing-up" process of expediting bills through to become law in the remaining parliamentary time, and outstanding bills cannot be carried over to the next parliament. Labour opposed the bill during its passage through parliament, and said last year that it intends to halt new oil and gas exploration in UK waters. Policy in progress The two main parties have surprisingly similar energy policies, although the Conservatives' largely dates from Johnson's premiership. They both back a windfall tax on oil and gas producers, implemented amid surging oil and gas prices in 2022 and extended this year to 2029, and both support nuclear. They also support green hydrogen, offshore wind and solar — although Labour's targets are slightly more ambitious, and want 35GW of onshore wind by 2030. Labour, like the Conservatives, is eyeing private-sector investment to help fund the energy transition — some channelled through its plan for a publicly owned clean energy company, Great British Energy. The main difference so far is Labour's plan for a zero-carbon power grid by 2030. The Conservatives have set a 2035 target for this goal, which is in line with its commitments as part of the G7 group. The next government will inherit economic challenges, with slow growth forecast, and lingering inflation. Labour in February backed down on its pledge to spend £28bn/yr ($35.6bn/yr) on the energy transition, if it wins power. And the UK has challenging, and legally binding, climate targets to hit. It must cut emissions by 68pc by 2030 and 78pc by 2035, from 1990 levels. The government has hit goals so far, mostly owing to the closure of coal-fired power plants. But the independent Climate Change Committee has warned that action to meet targets from 2030 onwards is "worryingly slow". The prospect of change could prove key for voters. The Conservatives have been in power since 2010, and have fielded five prime ministers during that time — the last two of which were not chosen by the electorate. By Georgia Gratton UK offshore energy expenditure UK energy production and consumption Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop party profiles
US hopes for show of unity with Mexico at Cop 28
US hopes for show of unity with Mexico at Cop 28
Washington, 17 November (Argus) — US president Joe Biden urged his Mexican counterpart, Andres Manuel Lopez Obrador, to step up their countries' cooperation on climate issues ahead of the upcoming Cop 28 UN climate conference. The US wants to demonstrate at Cop 28 that "the US, Mexico and Canada are working in lockstep on this issue," a senior US official told reporters following today's meeting of the two leaders at the Asia-Pacific Economic Cooperation forum in San Francisco. The two presidents did not directly address an ongoing trade dispute related to energy , which remains on track to be resolved within the US-Mexico-Canada free trade agreement. The US complaint centers on Mexico's attempts to dial back the 2014 energy reform over the last five years with laws to favor state-owned Pemex's position in the Mexican fuels market, curtail private-sector renewable energy development and prioritize state utility CFE power dispatch. Biden and Lopez Obrador "acknowledged that we have a broad and deep economic relationship, and like in any sort of any such relationship there will be disagreements," the senior US official said. "We have mechanisms where we're going to work through those issues in a way that is respectful and characteristic of what is one of the most consequential and strategic economic relationships that the US has." Climate change policies is another area of disagreement between the two governments, and it is not clear if Biden's call for additional action will succeed. While Mexico agreed last year to a tougher new greenhouse gas reduction target of 35pc by 2030 from a 2000 baseline, development of new clean energy capacity has been limited to the first 125MW phase of the 1GW Puerto Penasco solar plant and the upgrade of a series of hydroelectric plants. Energy regulator CRE in May approved changes reclassifying gas-fired combined-cycle plants as clean energy sources, allowing them to contribute to Mexico's target of generating 35pc of its power from clean energy by 2024. Giving priority to legacy gas-fired generation forms a core part of the US complaint, as they put US-funded renewable power projects in Mexico at a disadvantage. Biden's meeting with Lopez Obrador has prioritized cooperation to curb migration and drug trafficking. "We've seen our cooperation to address historic levels of migration and I want to thank you, Mr. President and your team, for the cooperation, your leadership, you taking on this challenge," Biden told Lopez Obrador. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2023. Argus Media group . All rights reserved.
EU wants more than renewables at Cop 28
EU wants more than renewables at Cop 28
Wopke Hoekstra hopes delivering on the bloc's climate targets will strengthen its hand in Dubai, writes Dafydd ab Iago Brussels, 17 November (Argus) — The EU's newly appointed climate commissioner, Wopke Hoekstra, wants the UN Cop 28 climate talks to achieve more than an agreement on renewables and energy efficiency goals, with any EU wins tied to progress on loss and damage funding and questions over how substantial the EU contribution can be. Hoekstra said earlier this year that agreeing on a goal of tripling global renewable energy capacity and doubling rates of energy efficiency by 2030 will not be enough to call Cop 28 a success. He suggested a focus on "unabated" progress when it comes to phasing out fossil fuels was not sufficient. Pressure has been mounting ahead of Cop 28 for parties to agree on language signalling the need to reduce output and demand of all fossil fuels, after India last year suggested broadening the focus from coal. But the EU's position lacks agreement timelines. European Commission president Ursula von der Leyen said in September that unabated fossil fuels need to be phased out "well before 2050", while the bloc's environment ministers have not agreed on a specific deadline. The EU parliament has called for a "tangible" phase-out of fossil fuels as soon as possible. But Hoekstra has not committed to a deadline . This lack of detail may forebode the same lack of progress towards a phase-out as at last year's Cop 27 in Sharm el-Sheikh. Yet Hoekstra has been linking progress at Cop 28 on the operationalisation of a loss and damage fund — for compensating irreversible climate change, as agreed in Sharm el-Sheikh last year — to success in climate mitigation, or cutting emissions. "If we make enough progress on mitigation, the fund can be launched in Dubai, with the first pledges too," he said earlier this month. This week he promised a "substantial financial contribution" from the EU, but once again tied to an "ambitious outcome" for mitigation and adaptation. Money's too tight But the EU did not say how much it will contribute to the fund, and squeezing out more money from the bloc, the world's largest climate donor, could prove difficult. Aware of those limits, Spain's climate minister Teresa Ribera has re-floated the idea of fossil fuel companies dedicating a share of profits to sustainable development in the most vulnerable countries. This could find support at Cop 28. Hoekstra supports exploring a range of fossil fuel taxes, and using a share of proceeds from the EU emissions trading system for climate finance. EU finance ministers have reaffirmed their "strong" commitment to developed countries collectively mobilising $100bn/yr in climate finance through to 2025. Another idea pushed by Von der Leyen at a recent climate summit in Nairobi was for global carbon pricing and true carbon credits at Cop 28. She also noted the need to include and reward carbon sinks. Just 23pc of the world's greenhouse gas (GHG) emissions are covered by either a carbon tax or an emissions trading system, according to World Bank analysis, but this is up from 7pc a decade earlier. A new EU agreement on methane regulation could strengthen the bloc's hand. The EU and US were behind a Global Methane Pledge, launched at Cop 26 in Glasgow. "The EU has one more law to demonstrate to our international partners that we are delivering on our climate targets," Hoekstra says. The EU has spent recent months adopting legislation to reform its own climate policies in line with its stricter 2030 emissions target to cut GHG emissions by at least 55pc compared with 1990 levels. With finished laws on the statute book now pushing the EU towards a 42.5pc renewables share in final energy consumption, and a projected 57pc GHG emissions cut by 2030, Hoekstra is also airing a new policy with 85-90pc GHG emissions cuts by 2040. Send comments and request more information at feedback@argusmedia.com Copyright © 2023. Argus Media group . All rights reserved.
Australia seeks climate progress at Cop 28
Australia seeks climate progress at Cop 28
Delivering on its climate pledges will involve the country's transition from fossil fuel to green energy superpower, writes Tom Major Sydney, 10 November (Argus) — Australia has pledged to support the UN climate summit Cop 28 presidency to strive for "ambitious and concrete outcomes" to reduce greenhouse gas (GHG) emissions, but it is sticking to its emissions targets even though they are deemed insufficient to keep to the goals of the Paris Agreement. The country's engagement in climate negotiations has stepped up after the election of a Labor government in May last year, and it is now seen as playing a much more constructive role. Australia was one of the few countries to have updated its 2030 nationally determined contribution (NDC) — or climate pledge — last year, as requested in the Glasgow pact made at Cop 26. Its government legislated a deeper cut to GHG emissions by 2030 to a 43pc reduction from 2005, compared with a previous 26-28pc reduction. But this still falls short of the 75pc cut needed to help limit the global temperature increase to 1.5°C, which was advocated by the minority Green party. Canberra has, however, permanently , as part of its commitment to not using carryover carbon credits for any future emissions-reduction targets. It had faced criticism that those units enabled the country to increase emissions under the Kyoto crediting period by 8pc above 1990 levels. Shaky targets The country has also committed to an 82pc renewable energy target by 2030 as it phases out its coal-fired power generation, but major projects designed to help reach this goal have been delayed because of rising costs. Renewables represented 39pc of generation across the National Electricity Market in the year to March 2023, but new investment has slumped in recent months. And with committed renewable energy projects standing at just 400MW in the first half of 2023, Australia is on track to fall well short of the 5 GW/yr required to meet its 82pc goal. The Australian Energy Market Operator (Aemo) has reiterated warnings that the country may fail to replace its coal-fired power generation unless obstacles including increasing project costs, falling investment levels and skilled labour shortages are addressed. In the September quarter, the states of New South Wales and Victoria said they were making plans for coal-fired power plants, on which they are heavily reliant for their energy needs, to remain open beyond or up to their planned closures — scheduled between 2025 and 2035 . Australia's renewable targets also face issues with grid capacity. The national grid is creaking under the strain of new generation projects and requires tens of billions of dollars in new transmission capacity. But labour shortages, community opposition and inflation are creating headwinds for developers. And although offshore wind has been touted as a solution to the headaches associated with land-based development, planned zones remain uncertain because of environmental and cultural heritage concerns. Emissions from electricity were 3.9pc down on the year for the year to 30 March, attributed to greater renewable power uptake. But electricity-related emissions, which the department of climate change, energy, environment and water expects will do much of the heavy lifting until 2035, will not decrease to the projected 2030 target if coal-fired power continues to dominate the grid. Australia's emissions were 466mn t of CO2 equivalent (CO2e) in the year to March 2023 — 24pc below emissions in the year to June 2005, the baseline year for Australia's 2030 target under the Paris Agreement — but up fractionally on the 465.5mn t CO2e recorded for the previous 12 months on a post-Covid recovery in transport and a rise in agriculture-related emissions. Some progress on emissions reduction could come from the start of Australia's enhanced safeguard mechanism from 1 July. It requires major emitters of more than 100,000 t/yr of CO2e to cut emissions by 4.9pc/yr until 2030. And although the mining and energy sectors continue to struggle for solutions to reduce emissions, investment in battery-powered mine vehicles and green power grids for remote operations to reduce diesel use is gathering momentum. But Climate Action 100+, the world's largest green investor alliance, has released assessments of 14 Australian emissions-heavy firms, showing that 57pc have fully disclosed their net zero commitments but lack short-term targets to meet them. Only 7pc of them currently meet the group's short-term — to 2025 — GHG reduction target covering at least 95pc of Scope 1, 2 and 3 emissions. Australia has promised that sectoral emissions-reduction strategies to cut output from five emissions-intensive areas will be developed by mid-2024 on the recommendation of the government's Climate Change Authority (CCA), which is also tasked with updating Australia's 2030 target with a new 2035 goal by the end of next year. Reality check The country might find itself at odds with calls at Cop 28 to speed up the phase-out of coal-fired power generation, at a time when global coal use keeps hitting record highs. It is also under pressure from its trading partners to continue supplying LNG and coal, amid worldwide energy security concerns, while state governments reliant on coal royalty payments and seeking cheaper domestic gas continue to approve new mines and natural gas fields. Australia is forecast to increase its thermal coal exports to 196mn t from 178mn t in 2022. Most vocally, energy trade partner Japan has promised to continue financing foreign fossil fuel projects, as long as it is necessary for its energy security and geopolitical interests. This comes despite Tokyo's pursuit of renewables, nuclear and cleaner fuels such as sustainably sourced hydrogen and ammonia. With few renewable energy prospects of their own, Japan and South Korea are regarded as key investors in Australia's green hydrogen export ambitions, leading Canberra to reassure Tokyo and Seoul that it remains a reliable trade partner. In the wake of the US Inflation Reduction Act (IRA), Australia has initiated its own A$2bn ($1.27bn) hydrogen production subsidy known as Hydrogen Headstart, which plans to subsidise two or three major projects, targeting 1,000MW of electrolyser capacity by 2030. The first subsidies are expected to be paid in the 2026-27 fiscal year. The government is also keen to tout the nation's reputation as a safe, reliable investment environment to drive a critical minerals sector that it hopes will replace jobs lost in fossil fuel industries in years to come. With most of Australia's lithium exported because of a lack of downstream processing capacity, a national battery strategy is being designed to develop onshore processing. Australia's lithium concentrate production is predicted to rise to 4mn t in 2024-25 from 3.1mn t in 2022-23, mainly driven by mine expansions and new mines — after it grew by around 50pc on the year in January-June. With increased demand also expected for its aluminium, copper and nickel output in the next two years as the world decarbonises, Canberra is seeking closer ties with the US for investment in its critical minerals sector. Ahead of Australia's expected role in co-hosting Cop 31 in 2026, greater scrutiny is likely to come to bear on the fossil-fuel dependent nation, which faces serious headwinds in realising its stated goal of turning its resources-rich economy into a net zero, green energy superpower for the coming decades. Australia Cop 28 contribution (mn t CO2e) 2005 2020 2030 2035 Electricity 197 172 62 58 Other sectors 424 326 307 265 Total 621 498 368 323 — DCCEEW Send comments and request more information at feedback@argusmedia.com Copyright © 2023. Argus Media group . All rights reserved.
Africa claims leadership role in global climate fight
Africa claims leadership role in global climate fight
African countries need to see an overhaul of global financial support to leapfrog their economies straight to low-carbon energy, writes Elaine Mills Cape Town, 10 November (Argus) — African heads of state have reframed Africa's role in the global climate-change crisis by asserting a new leadership status for the continent and underscoring its abundant clean energy minerals and renewable energy resources as a potential solution. In return, they called for debt relief for African countries, a global carbon tax and a raft of reforms of the international financial system to support climate action on the continent and worldwide. The proposal formed part of the "Nairobi declaration" issued at the inaugural Africa Climate Summit in Nairobi, Kenya, in September. This will underpin Africa's common position in negotiations at the UN Cop 28 climate conference in the UAE later this month, and beyond. Leaders committed to aiding global decarbonisation efforts by leapfrogging traditional industrial development, striking a different tone to their previous rhetoric, which was that Africa would pursue industrialisation by any means, including continuing to exploit its domestic oil and gas resources. According to Kenyan president William Ruto, renewable energy can be just as strong a driver of Africa's economic development as oil and gas. So Kenya will still press ahead with its plans to develop its oil and gas reserves, but just not as a priority, he said. But Kenya's stance contrasts with other African hydrocarbon producing countries, such as Uganda, Nigeria and Senegal, which say that they need to tap their oil and gas resources to develop their economies. The IEA, in its Africa Energy Outlook 2022, said that Africa's industrialisation will partly rely on exploiting its more than 5 trillion m³ of natural gas that has been discovered but not been approved for development. Cumulative greenhouse gas emissions from the use of these gas resources over the next 30 years would bring the continent's global emissions share to only 3.5pc, the IEA says. As Africa is the continent most vulnerable to climate change, African leaders have depicted it as a victim of a crisis created by the industrialised world. As such, they insist that Africa will chart a "just energy transition" of its own choosing without being dictated to by the west. But at the Nairobi summit, they signalled more willingness to take part in the global shift away from fossil fuels — and to take advantage of the economic development opportunities this holds for Africa. "The Africa Climate Summit asserted new leadership on global climate action from the continent most vulnerable to its impacts," E3G programme lead for climate diplomacy and geopolitics Alex Scott said. Ruto shepherded a declaration by African leaders calling for accelerated climate action, mobilising a massive scale of investment in green transition and adaptation in Africa, and reforming the finance system for fairer financing and debt management, Scott said. Climate-positive thinking World leaders should "appreciate that decarbonising the global economy is also an opportunity to contribute to equality and shared prosperity", the summit declaration says. "We urge world leaders to rally behind the proposal for a [global] carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation," it adds. This could be supplemented by a global financial transaction tax to fund climate-positive investments, which should be ring-fenced from geopolitical and national interests, the declaration suggests. African leaders also called for "a new financing architecture that is responsive to Africa's needs" and "collective global action to mobilise the necessary capital for both development and climate action". As part of this, they want to see debt restructuring and relief for African nations, a 10-year grace period on interest payments, an extension of sovereign loans, and debt repayment pauses when climate disasters strike. With these aims in mind, they suggest a new global climate finance charter should be developed through UN and Cop processes by 2025. They also appealed for an increase in concessional finance to emerging economies, as well as reforms of the international financial system to ease the high cost of capital for African nations. "The scale of financing required to unlock Africa's climate-positive growth is beyond the borrowing capacity of national balance sheets, or at the risk premium that Africa is currently paying for private capital," the declaration says. Africa's annual climate finance needs total $250bn, but it only receives 12pc of this, according to the non-profit Climate Policy Initiative. African leaders further called for a range of measures to "elevate Africa's share of carbon markets". The International Emissions Trading Association (Ieta) welcomed African countries' increasing interest in carbon markets and expressed hope that more would set up carbon pricing programmes to enable stronger national emissions-reduction contributions. But it baulked at the idea of a global carbon tax, which is "unlikely" to gain political traction, and highly difficult to manage centrally by the UN Framework Convention on Climate Change or any organisation. A more practical and speedy approach would be to expand the use of national carbon markets that recognise a common pool of international carbon credits, Ieta said. "This could channel large amounts of private-sector capital to climate mitigation opportunities in Africa under Article 6 of the Paris climate agreement." The leaders called for global and regional trade mechanisms to be designed in such a manner that "African products can compete on fair and equitable terms". In support of this, they called for unilateral and discriminatory measures such as environmental trade tariffs to be eliminated. In return, they committed to aid global decarbonisation efforts by "leapfrogging traditional industrial development and fostering green production and supply chains on a global scale". They expressed concern that only 2pc of $3 trillion in renewable energy investments in the past decade have come to Africa, despite the fact that the continent has an estimated 40pc of the world's renewable energy resources, according to the declaration. We're all in this together African leaders called on the international community to contribute towards increasing the continent's renewable power generation to at least 300GW by 2030 from 56GW in 2022. Meeting this target will cost an estimated $600bn and will require a tenfold increase in capital flowing into Africa's renewable energy sector over the next seven years, they said. The UAE pledged $4.5bn to accelerate the development of clean energy projects, which far exceeded the pledges of other governments, such as the US, the UK and those in the EU. Developed countries have come under fire after missing a goal set in 2009 to provide $100bn/yr in climate financing to developing countries by 2020. The target may finally be hit this year. Just a few days after the Africa Climate Summit, the G20 summit in Delhi echoed the Nairobi declaration's clarion call for an overhaul of the global financial system. The Delhi declaration included new language on the issue of global debt, proposed that the World Bank should be reformed to address the growing economic strains on poorer countries and advocated more financing to help vulnerable nations deal with the costs of climate change. It also showed agreement on raising investment in energy transition and climate finance from "billions to trillions" of dollars. The declaration highlighted that $5.8 trillion-5.9 trillion was needed pre-2030 to help developing nations implement their nationally determined contributions, as well as $4 trillion/yr for clean energy technologies by 2030 to reach net zero emissions by 2050. Whether African countries can advance their call for a radical reform of the global financial system at Cop 28 will be key to affirming their proclaimed new leadership role in global climate talks. Send comments and request more information at feedback@argusmedia.com Copyright © 2023. Argus Media group . All rights reserved.
Argus related services
