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
India’s IOC plans 1pc SAF blending by Jul-Sep 2025
India’s IOC plans 1pc SAF blending by Jul-Sep 2025
Singapore, 24 October (Argus) — Indian state-controlled refiner IOC plans to achieve at least 1pc sustainable aviation fuel (SAF) in jet fuel by July-September 2025, ahead of the government's aim of 2027. IOC also plans to set up dedicated plants for SAF, IOC's director of research and development Alok Sharma said at the India Refining Summit on 23 October. India aims to have 1pc SAF in jet fuel for international flights by 2027, which will double to 2pc in 2028. Delhi initially targeted to have 1pc SAF blending in jet fuel by 2025, saying it would need 140mn litres/yr of SAF to achieve this as part of the country's efforts to achieve net zero by 2070. Refinery expansions will focus on expanding production of jet fuel on expectations of higher demand, Sharma said. He added that demand for other products will plateau, but that of jet fuel will increase. The IEA sees global oil demand — excluding biofuels — falling to 93.1mn b/d in 2050 . This compared with 97.4mn b/d in last year's World Energy Outlook , mainly because of lower-than-previously expected oil use in transportation, particularly in shipping. Ethanol is likely to gain importance given that there are talks of blending 5pc ethanol in diesel, Sharma said, adding that India is likely to achieve its target of blending 20pc ethanol in gasoline by 2025. India has a set a goal to increase ethanol blending in gasoline to 20pc by 2025, as part of efforts to reduce its dependence on crude imports. Ethanol blending in gasoline was 13.8pc during November 2023-September 2024 and 15.9pc during September 2024, oil ministry data show. Most of the ethanol comes from first-generation plants, while second-generation plants are facing issues with feed handling which they hope to sort out soon, Sharma said. Second-generation bioethanol refers to ethanol made from non-edible resources such as biomass, while first-generation bioethanol is made from food resources such as sugarcane and corn. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU Parliament sets out Cop 29 position
EU Parliament sets out Cop 29 position
Brussels, 22 October (Argus) — The European Parliament's environment committee has voted through a draft resolution urging countries to agree on a new collective goal for climate finance at the UN Cop 29 climate conference in Baku, Azerbaijan, in November. Parliament's text calls for "innovative" sources of finance, similar to language used earlier this month by EU ministers when agreeing a general negotiating mandate for the summit. And the responsibility for delivering on the new collective quantified goal (NCQG) for post-2025 should encompass a "broadened contributor base reflecting parties' evolving financial capabilities and historical emission levels", parliament said. Parliament "insists" that emerging economies with high emissions and high GDP should contribute to the new goal, which is designed to be a successor to developed countries' existing commitment to providing $100bn/yr in climate finance over 2020-25. The draft resolution also notes that the NCQG should clearly prioritise "grants-based finance", be socially fair and aligned with the polluter-pays principle, and ensure that the costs of climate change are borne by those with the greatest capacities. Parliament points to "potential financial contributions from the fossil fuel supply chain". Cop 29 should also co-ordinate for an unambiguous signal on transitioning away from fossil fuels. And the resolution contains a call for the European Commission to work on expanding the scope of the bloc's carbon border adjustment mechanism (CBAM) to more sectors, as well as encouraging the introduction of global carbon pricing. While non-binding, parliament would have to approve any international treaty and detailed climate and energy legislation to achieve greenhouse gas emissions cuts. The resolution received a large cross-party majority in committee, indicating a smoother passage in parliament's plenary vote on the matter next month. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Southeast Asian oil demand to rise to 2050: IEA
Southeast Asian oil demand to rise to 2050: IEA
Singapore, 22 October (Argus) — Southeast Asia's oil demand is set to increase to 7mn b/d in 2050 under current policies, according to the IEA's latest Southeast Asia Energy Outlook released today. Oil demand in the southeast Asian region is set to rise from 5mn b/d in 2023 to 6.4mn b/d in 2035, and to 7mn b/d in 2050. This is a downward revision from the IEA's previous outlook in 2022, which projected oil demand rising to about 7mn b/d in 2030 and 7.5mn b/d in 2050. The IEA's stated policies scenario (Steps) is based on countries' existing policies, while the announced pledges scenario (APS) assumes that governments meet all their national energy and climate targets, including long-term net zero goals. Under the APS, oil demand continues to grow but to a lesser extent to 5.2mn b/d in 2035, and then falls to 3.8mn b/d in 2050. The transport sector is the main driver of the region's increase in oil demand, with oil consumption in that sector more than doubling from 1.3mn b/d in 2000 to 2.8mn b/d currently. Under current policies and trends, gasoline and diesel consumption for road transport rises by around 30pc by 2050, reaching nearly 1.6mn b/d. The region's gas demand is projected to rise from around 170bn m³ currently, to around 210bn m³ in 2030 and about 270bn m³ in 2050. This compared to the IEA's 2022 projections of 240bn m³ in 2030 and about 340bn m³ in 2050. Gas demand has increased by 5pc since 2022, according to the IEA. This recovery comes after a 4pc fall in demand over 2019-22, resulting from Covid-19 and a rise in LNG prices following Russia's invasion of Ukraine. Overall energy demand is expected to rise by "about a third by 2035 and two-thirds by 2050," according to the IEA, with just under half of this demand growth to be met by fossil fuels. Under the APS, energy demand grows to a smaller extent of around 40pc to 2050, reflecting accelerated improvements in efficiency, electrification and fuel switching. The share of fossil fuels in the total energy mix falls from 78pc currently to 65pc in 2050. This is lower than the 2022 outlook's projection that fossil fuels would make up more than 70pc of the energy mix in 2050. The downward revisions in fossil fuel demand and their share in the energy mix is likely because renewables are set to grow rapidly in the region. Renewable energy already accounts for just under 20pc of the region's energy mix, through hydropower, geothermal and bioenergy. Clean energy is set to meet more than 35pc of energy demand growth to 2035 under the Steps scenario, because of rapid expansions in wind and solar power. IEA's growing presence in southeast Asia The IEA and Singapore inaugurated the IEA Regional Co-operation Centre on 21 October — the first office outside of the organisation's Paris headquarters. The centre will serve as a hub for IEA's activities and engagement in the region, so the organisation can provide policy guidance, technical assistance, training and capacity-building to address areas such as scaling up the deployment of renewables and increasing access to finance for clean energy investments. Southeast Asia is projected to be second only to India in the contribution to global energy demand growth over the coming years, said IEA's chief energy economist Tim Gould on 22 October at the Singapore International Energy Week. This is why the new regional center is so important, he added. Cross-border electricity trade, in particular, is going to be a high priority, Gould said. "A key work, from an IEA perspective, is to make those opportunities to bring in the private sector and different sources of finance for these projects," he added. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Chubu eyes exporting CO2 to Australia for CCS
Japan’s Chubu eyes exporting CO2 to Australia for CCS
Osaka, 21 October (Argus) — Japanese utility Chubu Electric Power is considering exporting CO2 to Australia for carbon capture and storage (CCS), as it accelerates efforts to decarbonise industries surrounding Nagoya port in central Japan. Chubu on 21 October agreed with Japanese upstream firm Inpex's subsidiary Inpex Browse E&P to explore the possibility of establishing a CCS value chain, including capturing CO2 in Japan then transporting it from Nagoya port to Western Australia's offshore Bonaparte basin. Further details, including a timeline and potential export volumes, are still unknown. Inpex in 2022 was awarded a greenhouse gas (GHG) storage assessment permit in the Bonaparte basin, together with TotalEnergies CCS Australia and Australian firm Woodside Energy. Operator Inpex aims to reduce GHG emissions from its Ichthys LNG project through this potential CCS site, which is expected to begin operations in the April 2030-March 2031 fiscal year and store more than 10mn t/yr of CO2. Moomba CCS project The deal came after Chubu on 18 October signed an initial agreement with Australian independent Santos, to assess the feasibility on transporting CO2 from Nagoya port to Santos' Moomba CCS project in the onshore Cooper basin of South Australia state. The CCS site has already been commissioned , but it is unclear when Chubu is targeting to export CO2 to the site, which has a full 1.7mn t/yr storage capacity depending on gas production. Details will be decided in future discussions, a Chubu spokesperson said. Chubu and Santos are also planning to study the use of renewable energy, such as geothermal power, to supply energy for other decarbonisation projects in the Copper basin which Santos is developing. Production of hydrogen and synthetic methane, or so-called e-methane, could be such options, the spokesperson told Argus. These are Chubu's first attemmpt to develop CCS projects in Australia, with the company also on course to establish similar CCS value chains between Nagoya port and Indonesia's Tangguh under a collaboration with BP . Diversification of CO2 export destinations would be necessary, as there is a risk to conducting CCS projects only in Indonesia, said the spokesperson. Chubu and BP completed the feasibility study in March and expanded their partnership in August by signing the next-stage agreement to evaluate cost optimisation across the CCS value chain and business models to enable commercial CCS projects. Nagoya is Japan's biggest port by cargo volume and located near steel, automotive, aircraft, machine and manufacturing plants, Chubu previously said. The port aims to reduce its CO2 emissions by 46pc by 2030-31 against 2013-14 levels, as industries around the port account for 3pc of Japan's total emissions, the company added. Japanese firms have intensified their efforts to develop CCS projects, as well as carbon capture, utilisation and storage (CCUS) projects, actively seeking international partnerships. This is driven by Japan's reliance on fossil fuels to ensure energy security and foster economic growth, which necessitates exporting CO2 because of limited domestic storage sites. Japan's parliament in May allowed the government to ratify the 2009 amendment to the International Maritime Organization's London Protocol that will allow the export of CO2. Japan hopes to commercialise CCS operations that Japanese firms are involved in from 2030-31. But there is growing pressure from the ministry of trade and industry that Japan should accelerate CCS projects, in order to not fall behind in the global market. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Analysis and explainers
Trump, Harris run on competing visions for energy
Trump, Harris run on competing visions for energy
Washington, 7 October (Argus) — Energy has emerged as a centrepiece in the US presidential race between Republican candidate former president Donald Trump and Democratic candidate vice-president Kamala Harris, who have repeatedly fought over whose policies would keep domestic energy prices affordable now and in the future. Trump has promised a return to the policies he championed during his first presidential term, when he opened vast tracts of federal land to oil and gas leasing, scrapped rules that would support electric vehicles (EVs), and halted any serious attempts for the federal government to respond to climate change. Trump has embraced "drill, baby, drill" as a core policy plank, which he argues will be an elixir to voters frustrated with inflation and high prices. Vice-president Harris backs an "all-of-the-above" energy policy, her running mate Tim Walz says, and has a further goal to turn the US into a global powerhouse for the types of clean energy manufacturing and EVs that will be needed to make a difference on climate change. But Harris' remark in 2019 that there is "no question I'm in favour of banning fracking" has come to haunt her campaign, despite saying she has dropped that position . Harris says her experience serving as vice-president has shown her that banning fracking was not needed to support a clean energy economy. "As vice-president, I did not ban fracking. As president, I will not ban fracking," she says. Even so, Trump has tried to sow doubts among voters that Harris is sincere in her new position, which he hopes will cost her in the battleground state of Pennsylvania, a key shale gas producer that accounts for 20pc of US natural gas output. "If she won the election, the day after that election, they'll go back to destroying our country and oil will be dead," Trump says. But Trump's promises on oil and gas — and his attacks on the policies of the Biden-Harris administration — have at times borne little resemblance to reality. Trump claims that if he had won a second term in 2020, oil production would be "four times, five times higher", translating into US crude production in excess of 50mn b/d, or more than half of global production. Trump also says that, if elected, he would cut the price of energy "in half or more within a year of taking office", double electricity production and bring gasoline prices below $2/USG. He will do this through "a national emergency declaration" that will cause a "massive increase" in energy supply, Trump says, although energy analysts say his promises are technically and economically unachievable. Trump's oft-repeated claim that US oil and gas production crashed after he left office is also undercut by basic energy statistics, as is his claim that the US has lost the "energy dominance" it had during his term. The US hit record-high production this year, in excess of 13mn b/d of crude and 100bn ft³/d (1 trillion m³/yr) of gas, while US net petroleum exports climbed to a record high of 1.7mn b/d last year. Regulatory rollback Trump has campaigned heavily on rolling back regulations and cutting energy prices, which he says will persuade manufacturers to "pack up and move their production to America". For every new regulation, he promises to remove "10 old and burdensome regulations from the books", echoing an earlier "two-for-one" regulatory repeal policy he attempted to enforce during his first term in office. Trump has shown particular zeal for eliminating policies he sees as part of the "Green New Scam", a blanket term he uses for clean energy spending under President Joe Biden's signature climate legislation, the Inflation Reduction Act, and climate-related regulations. If Trump's first term serves as a guide, he will again seek to repeal regulations that restrict methane emissions from US oil and gas production, weaken CO2 emission limits for power plants and block tailpipe rules that encourage EVs. "I will end the insane EV mandates," Trump says. Faster permitting will be another top priority, Trump says, after his efforts to pass comprehensive permitting legislation collapsed during his first term. A Harris victory, in contrast, would be key to implementing dozens of climate-related regulations issued under the Biden administration and defending them in court. Expediting federal permitting and "cutting red tape" will also be a priority for a Harris administration, given the impediments it can create for clean energy projects and other infrastructure, according to campaign documents. "No-one can tell me we can't build quickly," Harris says. Federal oil and gas leasing has plunged under Biden, who was unable to carry out campaign promises to ban new leasing but was still able to limit onshore lease sales to 210,000 acres/yr (850 km²/yr) in 2022-23, down from more than 6mn acres/yr in 2018-19 under Trump. Oil and gas groups say expanded federal leasing, particularly in the US Gulf of Mexico, is a top policy priority. Trump has vowed to expand federal oil and gas development if he wins, particularly by enabling drilling in Alaska's Arctic National Wildlife Refuge (ANWR), which he opened to leasing in 2017 but has been held up in reviews since Biden took office. "I'll put ANWR back in play," Trump says. Less clear is how Trump would handle offshore leasing, an issue that backfired in his first term when his push for drilling offshore Florida prompted fury from political leaders in the Republican-led state. Harris has yet to explicitly embrace federal drilling, but she has touted the "record energy production" the US has achieved under the Biden-Harris administration, and supports further growth "so that we never again have to rely on foreign oil", according to campaign documents. A recent bipartisan bill from US senator Joe Manchin suggests there is flexibility from the Democrats on the issue, by offering more federal oil leasing in exchange for fast-tracking electric transmission development. LNG pause in balance Biden's decision earlier this year to pause the licensing of newly-built LNG export terminals has fuelled uncertainty for projects such as Venture Global's 28mn t/yr CP2 project in Louisiana. But the pause is only set to last until early 2025, when the US Department of Energy (DOE) will finish work on a study into whether further exports are in the "public interest" based on factors such as climate change and domestic energy prices. Trump says as soon as he takes office he will approve pending LNG export terminals, which he says are "good for the environment, not bad, and good for our country". Harris has yet to describe her approach to licensing more LNG terminals, the approval of which environmental activists say would be a "climate bomb". But Manchin's permitting bill suggests there is some room for manoeuvre, by requiring the DOE to decide on LNG export licences within 90 days. Oil industry officials are preparing for a fight to retain the existing corporate tax rate of 21pc enacted under Trump in 2017, as Congress is heading towards a "tax cliff" at the end of 2025 that will cost more than $4 trillion to avert. Harris has called for Congress to raise the corporate tax rate to 28pc, but wants new tax credits for industries such as manufacturing. Trump has proposed a lower corporate tax rate of 15pc only "for those who make their product in America". At the same time, Trump's push for an across-the-board import tariff of up to 20pc has alarmed industry officials, who say such a policy would raise consumer prices and potentially trigger a disruptive trade war. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Focus on Article 6 as VCM flounders
Focus on Article 6 as VCM flounders
Washington, 30 September (Argus) — As the UN Cop 29 climate summit in Baku, Azerbaijan, approaches in November, the focus is increasingly on whether countries will finally agree on the rules that can unlock future carbon markets under Article 6 of the Paris agreement. Market proponents consider a repeat of last year's Cop 28 in Dubai — where parties failed to agree on the mechanism's rules — would be the worst possible outcome. But they are optimistic given Article 6's placement high on the agenda. "Now it is at the heads of delegation level, which we've never seen," International Emissions Trading Association managing director Katie Sullivan says. But she warns that uncertainty over Article 6's fate is keeping potential carbon market capital "on the sidelines". The voluntary carbon market (VCM), which allows firm to offset their emissions with carbon credits, has found itself in a reputational crisis since last year, with prices crashing. Many potential host countries that are Article 6-ready have felt the impact of climate change this year as they battle with droughts or floods. A functioning market could plough much-needed finance into those countries. But the recent difficulties in the VCM also highlight the importance of integrity. And it is precisely the issues that set Article 6 apart from the VCM that have proved the trickiest to solve. A crucial difference is the need for a corresponding adjustment under Article 6 to prevent double counting by countries of mitigation outcomes. It took five years of talks leading up to Cop 26 in Glasgow to resolve the issue, an EU negotiator said at a World Bank event in Berlin this month. The negotiator, also a member of the supervisory body for the more regulated Article 6.4 mechanism, stressed that "only" three years have passed since Glasgow, and that integrity will continue to go before speed in reaching an agreement. Progress has been slow this year, as the supervisory body works on the rules and standards for the permitted methodologies underlying mitigation and removal activities, and on revising the methodologies of the Kyoto Protocol's Clean Development Mechanism (CDM) that Article 6.4 essentially replaces. Some progress was made this summer on standards for proving "additionality" — that the mitigation would not have happened without the project finance — and setting the "baseline" against which the emissions outcome is measured. Missing rules In contrast, Article 6.2, which allows parties to form bilateral agreements for carbon mitigation projects that generate "internationally traded mitigation outcomes", already provides the possibility of engaging in carbon credit trades. In Berlin, several buyer countries, including Japan and Singapore, made it clear that they will press ahead with deals even if an agreement fails in Baku. Parties under Article 6.2 will typically resort to CDM or the strictest VCM methodologies to underpin their mitigation activities, as they await a final agreement at UN level. And there are no removals projects in the Article 6.2 pipeline, given the lack of precedent in the CDM. They said the main problem is a lack of capacity at host country level, and not so much the missing rules. But some of those missing rules also affect Article 6.2, such as those for credit registries, and more crucially, the timing and scope of credit authorisation, and the extent to which an authorisation might be revoked. German deputy special envoy for climate action Norbert Gorissen last week called for progress on mitigation and ambition at Cop 29. "I'm very concerned that the focus of the incoming presidency is only on finance," he said. The EU does not intend to take part in Article 6 activities. One reason behind the failure in Dubai was stiff opposition from the EU, on grounds of environmental integrity. By Chloe Jardine and Michael Ball Voluntary carbon credits Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UAE, Azerbaijan and Brazil juggle oil and climate goals
UAE, Azerbaijan and Brazil juggle oil and climate goals
Sao Paulo, 27 September (Argus) — Oil and gas producers the UAE, Azerbaijan and Brazil — the Cop presidencies Troika — are pushing for increased global climate ambitions, but are seemingly avoiding the question of fossil fuels in relation to their own new climate targets. Countries party to the UN Framework Convention on Climate Change (UNFCCC) must submit their nationally determined contributions (NDCs) — emissions-cut targets — for 2035 in November-February. Since July, the Troika has been calling on countries to step up. They also said they would signal their own commitments early, which the UAE and Brazil did during a meeting at the UN on 26 September. They will submit their new targets aligned with the Paris agreement's most ambitious temperature limit — 1.5°C — ahead of Cop 29 in Baku in November. Azerbaijan's incoming Cop 29 president Mukhtar Babayev did not offer a timeline, but encouraged all parties to "come forward with 1.5°C-aligned NDCs… well ahead of the 10 February deadline". Cop 28 last year ended with an agreement including transitioning away from fossil fuels and tripling renewable energy capacity globally by 2030. At the UN meeting, Cop 28 president and Abu Dhabi's state-owned Adnoc chief executive, Sultan al-Jaber, reiterated the latter but not the former. Al-Jaber said that the UAE's NDC will remain focused on nature and "will continue to drive investments in diversifying our energy mix", adding the country is on track to triple its renewable energy capacity by 2030. The UAE's focus is likely to be on technologies, with Al-Jaber saying that the new NDC "will leverage artificial intelligence to drive decarbonisation". Cop 30 host Brazil did not mention fossil fuels either, but highlighted efforts to reduce deforestation. The country "will come forward with an ambitious, economy-wide emissions-reduction target covering all greenhouse gases", secretary for climate, energy and environment Andre Correa do Lago said. Oil Change International says the Troika ignores "a simple reality". Delivering NDCs that keep to the 1.5°C goal will not be possible "without an immediate end to fossil fuel expansion". And the three countries all plan to expand oil and gas production. National circumstances The UAE targets crude production of 5mn b/d — from 4.85mn b/d today — before 2027. The third-largest crude oil producer within Opec has received two upward revisions for its production quota in the past two years. It is also expanding gas production capacity. Natural gas output in Azerbaijan reached a new high of 132mn m³/d in 2023, and the country aims to increase it further. Upping exports to the EU to 20bn m³/yr by 2027, from the current 12bn m³/yr, has been a key government commitment since 2022, when Europe was desperate for alternative gas suppliers. Brazil could hit output of 5.3mn-5.4mn b/d by 2029-30, up from 3.4mn b/d in 2023. The government has its eyes on the south and in the environmentally sensitive equatorial margin for new oil exploration. The Troika countries look at fossil fuels through the lens of their own national circumstances — with their economies being heavily reliant on them. Azerbaijan's increasing gas exports spurred an economic boom, with GDP increasing tenfold over 2003-13. Babayev pointed to the "difficulties of developing ambitious NDCs", saying Azerbaijan faces them itself. He recognised the need to deliver "deep, rapid, and sustained emissions reduction, including transitioning away from fossil fuels. But at the same time, Azerbaijan's Ilham Aliyev, "as the head of a country rich in fossil fuels" is defending "the right of these countries to continue investments and production". It is the same for Brazil. President Luiz Inacio Lula da Silva said in June that the country will make "an extraordinary leap" as soon as it begins exploring the equatorial margin. "We want to do everything legal, respecting the environment. But we are not going to throw away any opportunity to make this country grow." Still, the UAE brokered a Cop 28 outcome that included wording on fossil fuels despite pressure from fellow oil producer neighbours. But if it continues to push for the oil and gas sector to increase decarbonisation efforts, it prefers the focus to lie on the industry's emissions rather than output. And oil and gas use accounts for 33pc and 22pc, respectively, of global emissions, the IEA says. By Caroline Varin, Lucas Parolin, Bachar Halabi and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop 29 president Babayev sets out summit action plan
Cop 29 president Babayev sets out summit action plan
The goals might be broadly welcomed, but climate groups want to see progress on fossil fuel consumption, writes Georgia Gratton London, 20 September (Argus) — The president-designate of the UN Cop 29 climate summit, Azeri ecology and natural resources minister Mukhtar Babayev, this week set out 14 initiatives and a detailed agenda for the conference, drawing little-addressed topics into the spotlight, but skating over some of last year's Cop outcomes. Most tangibly, Babayev's letter, sent to parties to UN climate body the UNFCCC, listed a handful of pledges that echo the broadly popular declarations launched at last year's Cop 28 by that summit's UAE presidency. Babayev set out a two-pronged declaration, which seeks to scale up global energy storage capacity to 1.5TW by 2030 and add or refurbish more than 80mn km of power grid by 2040. A separate proposed pledge aims to "commit to green energy zones and corridors", to maximise sustainable energy generation and ensure "cost-effective transmission over large distances and across borders". And the summit will aim to tackle the barriers — including regulatory, technical and financial ones — to a global "clean hydrogen" market. The Cop 29 presidency also aims to address "the growing problem of methane from organic waste", it said. Methane — a potent greenhouse gas — is often a focus at Cop summits, although typically with an eye to the largest emitters, the agriculture and fossil fuel industries. Global methane emissions from agriculture and fossil fuels stood at 142mn t and 118mn t, respectively, in 2023, whereas waste was responsible for 71mn t, IEA data show. Babayev wants governments to commit to targets to cut methane from organic waste and more countries to sign the Global Methane Pledge. The pledge, launched in 2021 at Cop 26, asks signatories to cut methane emissions by at least 30pc by 2030, from 2020 levels. Azerbaijan signed the pledge in March this year. These goals are likely to be broadly welcomed, but environmental groups will also be watching for progress on fossil fuel consumption. Babayev's letter avoided mention of the key agreement reached at last year's Cop 28 — to transition away from fossil fuels — although it did make multiple references to the first global stocktake, the main outcome document from Cop 28. Feeling the heat Azerbaijan is a natural gas exporter, and keen to build on this. The majority of the country's income is from the energy sector, with oil and gas accounting for 90pc of exports and a third of its GDP, according to the World Bank, which lists Azerbaijan among the countries that have most to lose from the transition. Babayev noted that Cop 29 — set for 11-22 November in Baku — will be the first Cop hosted in the Caucasus region. He flagged the "extreme heat [and] water scarcity" the region faces, but also pointed to its wind and solar power potential. And he provided more details of a planned $1bn climate fund, which will be capitalised by fossil fuel-producing countries and companies. "We believe that countries rich in natural resources should be at the forefront of those addressing climate change," Babayev said, noting that the direction came from Azerbaijan's president, Ilham Aliyev. The fund will be a public-private partnership, with "concessional and grant-based support to rapidly address the consequences of natural disasters" in developing countries, Babayev said. It will "provide offtake agreement guarantees for small and medium-sized renewable energy producers and first-loss capital for green industrial projects", with a focus on food and agriculture, he said. Babayev has already said climate finance will be the "centrepiece" in Baku. The planned fund, and any other advances on climate finance, are likely to prove the mark of success for Cop 29. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop party profiles
China sees trade tensions clouding climate summit
China sees trade tensions clouding climate summit
Beijing is leading the world in clean energy investment, but insists on dealing with climate action on its own terms London, 11 October (Argus) — China, the world's leading greenhouse gas emitter, may set more ambitious climate goals post 2030. But it will struggle to align itself closer to a 1.5°C global warming threshold at the UN Cop 29 climate conference while fending off trade barriers. Chinese president Xi Jinping stressed earlier this year that "it is imperative to properly handle the relationship between new energy and traditional energy". Beijing remains ambiguous as to whether its CO2 emissions have peaked, as coal remains integral in its energy mix. But the peak is likely to arrive some years ahead of its 2030 target, according to China's new climate envoy Liu Zhenmin, given the country's industrial push towards clean energy. "If we want to achieve global carbon [neutrality], first we have to address the issue of technology… provide the world with more affordable, secure technology. Second, we need to address financing," Liu said, urging for an agreement on finance for developing countries at Cop 29 in November. But the country does not want to be dragged into contributing to the new goal despite calls from developed countries for China to do so . The country deals with climate action on its own terms. It opted out of a pledge to treble renewables capacity and double energy efficiency at last year's Cop, but the language appeared in the final text agreed by all parties. China's current nationally determined contribution (NDC) targets a CO2 emissions peak but lacks targets for non-CO2 gases such as methane, which would be crucial to meet its 2060 carbon neutrality goal. Most of its methane emissions are found in coal mines. China is due to update its NDC by February. The country needs to raise its ambitions and cut CO2 emissions by at least 30pc from 2023 levels by 2035 and set absolute reduction targets to meet the 1.5°C Paris Agreement target, according to a report by the Centre for Research on Energy and Clean Air. It also said new energy vehicles (NEVs) — battery electric vehicles (EVs), plug-in hybrids and fuel-cell vehicles — need to reach 60pc of total sales, from 50pc currently, to drive transport sector emissions down to 2020 levels by 2035. China might see 100mn NEVs on its roads by 2030. It had nearly 25mn NEVs by June. Its renewable power capacity has already surpassed a 1,200GW target for 2030, hitting 1,206GW in July . This allowed Beijing to cut approvals for new coal-fired power plants by almost 80pc on the year in January-June, according to data from environmental group Greenpeace. But China continues to develop new coal output capacity . Chinese power demand could rise by more than 500 TWh/yr in the coming 5-10 years . Beijing might meet this demand with more renewables and nuclear power, although the latter accounted for just 5pc of the electricity mix last year. Trumped by tariffs? China appeared recently to have narrowed its climate policy differences with the US in terms of approach and objectives . It played a role with the US in bringing a consensus around fossil fuels language. But it is bracing for a showdown on climate finance, and might face huge new tariffs from the US if Republican presidential candidate Donald Trump wins the US election in November. China and advanced economies accounted for 90pc of global wind and solar capacity additions, and more than 95pc of EV sales in 2023, the IEA said. And Chinese EVs are likely to continue making inroads into the EU despite a vote to raise tariffs this month . Consultancy Rhodium reckons tariffs have to be 40-50pc to deter Chinese EV imports. Western countries' decoupling from Chinese products could add $6 trillion to global energy transition costs, warned Liu, as he sought to justify China's industrial policy, a stance he is likely to take at Cop 29. China's carbon emissions by source Emissions: Industrial breakdown Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Africa seeks trillions in climate finance at Cop 29
Africa seeks trillions in climate finance at Cop 29
Africa faces the heaviest economic burden from climate change, and the most uncertainty over funding, writes Elaine Mills Cape Town, 7 October (Argus) — A key priority for African countries at the UN Cop 29 climate talks in Baku next month is to secure a new climate finance goal for developing countries. But as well as serious commitments on an amount, the continent wants increased accessibility and cheaper funding. Regional alliance the African Group of Negotiators (AGN) is seeking a climate finance commitment from developed countries of $1.3 trillion/yr by 2030, under a new climate finance goal currently being negotiated — the so-called new collective and quantified goal (NCQG). The NCQG is the next stage of the $100bn/yr target that developed countries agreed to deliver to developing countries over 2020-25. It was met for the first time in 2022, according to the OECD, but some countries in Africa have complained that the money never reached them. The AGN wants to steer clear of the old target, contesting whether it has even been met. The group says it wants lessons to be learned, especially regarding the quality of the finance and the difficulties countries have had in accessing it. Uganda asks that the new goal avoids "political statements that are not implemented", referring to uncertainties over how the finance was counted and accessed. African states want the funding to come mostly from public sources, largely in the form of grants and highly concessional loans. This should improve borrowing costs and ease debt burdens, which are forcing countries to make trade-offs with critical development needs. The group does not want market-based loans to be counted as climatefinance — the majority of multilateral climate loans were market-based in 2016-22. Most African countries face an unsustainable debt situation that has been worsened by higher global interest rates, AGN chair Ali Mohamed says. "Our focus is on agreed obligations within the multilateral climate process and the need to improve investments to unlock the continent's potential to tackle the climate crisis, which is paralysing most economies," he says. Africa receives only 2pc of total global climate finance, according to think-tank Climate Policy Initiative. The new NCQG must create the right conditions to push that share to at least 30pc, "otherwise it is a failed process", a South Africa negotiator said last month. The heaviest price The first global stocktake at Cop 28 in Dubai last year acknowledged the world is off track in meeting the Paris Agreement's goals, with significant ambition and implementation gaps in mitigation and adaptation, as well as loss and damage, Mohamed says. African countries submitted ambitious nationally determined contributions, but there has not been corresponding financial and technical support for their implementation. "We lack clarity on the amount of current and future funding, capacity building and technical support," Kenya's cabinet secretary for environment, climate change and forestry, Aden Bare Duale, says. This vagueness undermines transparency of support under the Paris accord, and addressing it should be prioritised in the forthcoming negotiations, he says. African countries lose 2-5pc of their GDPs annually and many divert up to 9pc of their budgets responding to climate extremes, according to the State of the Climate in Africa 2023 report by the World Meteorological Organisation. The report serves as a stark reminder of the urgent need for climate action in Africa, where extreme weather events disproportionately impact the continent's socio-economic development, Zambian environment minister Mike Mposha says. "It is African nations who pay the heaviest price," Simon Stiell, head of UN climate body the UNFCCC, says. "But it would be incorrect for any world leader — especially in the G20 — to think ‘It's not my problem'. The economic and political reality — in an interdependent world — is we are all in this crisis together." Climate finance flows and needs in Africa Bilateral climate finance loans in 2016-2022 Multilateral climate finance loans 2016-2022 Multilateral climate finance loans 2016-2022 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canada to push for more climate cash as oil sands grow
Canada to push for more climate cash as oil sands grow
Calgary, 30 September (Argus) — Canada plans to advocate for more cash and accountability at the UN Cop 29 climate talks in Baku, but its record-high oil production and the threat of a general election might complicate its own climate ambitions. The resource-rich country will be pushing for greater financial commitments from Cop countries in November as they look to replace the current, but broadly recognised as inadequate, $100bn/yr target with a new finance goal for developing countries. Canada, like all developed countries, would not say how much it is willing to commit itself. But it favours broadening the goal's contributor base. "Public finance from a relatively small group of developed countries will not be sufficient to meet current needs," federal agency Environment and Climate Change Canada (EEEC) told Argus . The new goal will require "honest reflection". The country in negotiations mentioned the phase-out of fossil fuel subsidies and fossil fuel sector public financing as a mean to increase investments in energy transition sectors, but other key oil-producing countries disagree. Canada's government says it remains focused on the oil and gas industry and expects to see progress on Cop 28's commitment to transition away from fossil fuels. It became the first G20 country to release a framework targeting "inefficient" fossil fuel subsidies last year, accelerating a 2009 commitment to phase out support for its largest source of emissions. This has not stopped investment in Alberta's oil sands from growing, but the federal government is looking to steer more cash towards clean initiatives such as clean hydrogen, clean electricity and carbon capture. The latter could represent a big business for Alberta's producers if subsidised generously. But it could also be a licence to push Canada's crude production beyond its 4.9mn b/d record set last year. Greenhouse gas (GHG) emissions from Canada's oil and gas sector accounted for 33pc, or 217mn t, of the country's total in 2022, according to the National Inventory Report. Cutting them is critical to meet an overall goal of 403mn-439mn t by 2030, but the Office of the Auditor General of Canada says the country is only on track to lower them to 470mn t by that date. Domestic politics And Canada's climate ambitions might be at risk, with the Liberal minority government facing a general election no later than October 2025. Prime minister Justin Trudeau's popularity has dropped to the benefit of Conservative opposition leader Pierre Poilievre. Trudeau has resisted calls from within his party to step down, while Conservatives prepare for what they call a "carbon tax election". They want to axe the federal carbon tax, tanker bans and regulatory burdens. They promote pipelines and energy independence using a mix of energy sources, including fossil fuels, as part of a "gradual transition" to a low-carbon future, and say "the provinces should be free to develop their own climate change policies". Canada's 10 provinces hold jurisdiction over natural resources and that has posed a serious dilemma for the Liberals as they make climate promises on the international stage. Leading oil province Alberta will be sending a delegation to Cop to promote its own emissions-reduction strategies, and counter those of federal environment minister Steven Guilbeault, as the provincial government slams Ottawa's "punitive regulations" and says its climate policies are unrealistic. Trudeau's pursuit of winding down the oil sands was already tricky considering a state-owned pipeline is effectively subsidising the industry by C$8.7bn ($6.45bn), according to non-profit International Institute for Sustainable Development. Export capacity to the Pacific coast tripled to 890,000 b/d when the Trans Mountain Pipeline Expansion opened this year, underpinning growth plans for Canadian oil. By Brett Holmes Canada GHG emissions by sector Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan pushes abatement approach to energy transition
Japan pushes abatement approach to energy transition
Tokyo, 23 September (Argus) — Japan is keen to promote its energy transition approach, focused on carbon abatement technologies, to the wider coal-reliant Asia-Pacific region. The country has accelerated development of carbon abatement technologies to keep fossil fuels in its energy mix and boost energy security and economic growth. Japan, with its G7 counterparts, pledged to phase out "unabated" coal-fired plants by 2035, or "in a timeline consistent with keeping a limit of a 1.5°C temperature rise within reach, in line with countries' net zero pathways". This is a major step for Japan, a resource-poor country. But legislative progress aimed at developing value chains for carbon capture and storage (CCS) and cleaner fuels, such as hydrogen and ammonia, might have encouraged Tokyo to commit, especially since the G7 text allows for some wiggle room. To ensure continued use of its abated thermal power plants, trade and industry ministry has requested ¥11.2bn ($79mn) to support CCS projects, including exploration of CO2 storage sites, for 2025-26, up sharply from the ¥1.2bn budgeted for 2024-25. Japan has yet to set a date to achieve the phase-out target. But it had already promised not to build new unabated coal-fired plants at last year's UN Cop 28 climate talks, while pledging to phase out "inefficient" coal-fired plants by 2030. Less than 5pc of Japan's operational coal fleet has a planned retirement year, according to analysis by Global Energy Monitor, and these might comprise the oldest and least efficient plants. Coal capacity built in the last decade, following the Fukushima-Daiichi nuclear disaster, is unlikely to receive a retirement date without a countrywide policy that calls for a coal exit. Japan's coal demand could decline, to some extent, under global divestment pressure. But the fuel remains key, as the government sees renewables and nuclear as insufficient to meet rising power demand driven by the growth of data centres needed to enable artificial intelligence. Continental divide The country is keen to extend its vision for "various" and "practical" pathways, including abatement technologies, to coal-reliant southeast Asia. This stems from Tokyo's sceptical view about promoting a more European approach to the energy transition — driven by wind and solar power — to Asian countries. Japan stresses the importance of more diversified pathways, including thermal power with abatement. The country aims to spur decarbonisation in Asia-Pacific through a platform called the Asia Zero Emission Community (Azec) initiated in 2022. Asia-Pacific accounts for more than half of global greenhouse gas (GHG) emissions, at 17.178bn t of CO2 equivalent, according to the IEA. In Jakarta last month, 11 Azec countries emphasised the need to co-operate "to decarbonise coal power generation". The platform sets out options such as biogas, hydrogen and ammonia, and retrofitting with CCS and carbon capture, utilisation and storage. Japan's industries have already committed to carbon abatement at coal-fired plants in Asia, leveraging their technological know-how. Tokyo has pledged to provide about $70bn to support decarbonisation globally. This funding is part of wider financial assistance to help mobilise the estimated $28 trillion that Asia requires. To secure the funding, Japan has already issued part of a $139bn climate transition bond and aims to strengthen the financial support through the Asia Zero Emission Centre, the latest Azec initiative, under which transitional finance will be studied further, a trade and industry ministry official told Argus . Japan is on track to reduce its GHG emissions by 46pc by the April 2030-March 2031 fiscal year from its 2013-14 level, and hit its net zero emissions goal by 2050. By Motoko Hasegawa and Yusuke Maekawa Japan CO2 emissions by sector Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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