German industry against multipliers in biofuels law
The planned introduction of multipliers for electricity and hydrogen in a draft law for the use of renewables in transport published by the German environment ministry (BMU) will remove first generation biofuels from the market by 2025, according to a joint statement of eight agricultural and biofuel industry associations.
The German government outlined its plans to toughen the country's biofuels legislation in a draft law at the end of September, which aims to implement the EU's revised Renewable Energy Directive (RED II). It proposes lowering the cap of the energy share of crop-based biofuels to 2.7pc by 2026 from 6.5pc in 2020, and wants to lift Germany's domestic greenhouse gas (GHG) emissions reduction obligation to 7.25pc by 2026. It also plans to introduce multipliers for hydrogen and electricity used in transport with the GHG savings generated by selling electricity to charge electric vehicles to be counted four-fold towards the country's GHG emissions reduction quota.
The government's plans will start a process of displacement at the expense of established sustainable biofuels that are indispensable for climate protection as the introduction of multipliers will disadvantage crop and even waste-based biofuels, the industry alliance said.
It urged the government to exclude multipliers from the draft legislation to ensure an even contribution of all instruments available to reduce domestic GHG emissions. The industry associations further demanded a step-by-step increase of the GHG quota from 6pc in 2020 to 16pc in 2030 and highlighted that a concrete outline for the next 10 years is a prerequisite for necessary investments in e-mobility, hydrogen-mobility and advanced biofuels. The statement adds that the contribution of conventional biofuels to climate targets needs to stay stable until 2030, while the government's target for the use of advanced biofuels needs to become more ambitious.
The joint statement was signed by the German farmers association DBV, bioenergy association BBE, the German biogas association, the waste-based fuels association MvaK, the oilseed growers and processing industry associations Ufop and Ovid and the German biofuels association VDB.
Related news posts
US biodiesel faces poor production economics
US biodiesel faces poor production economics
Houston, 19 April (Argus) — US biodiesel producers are facing worsening production economics, as evidenced by a deteriorating correlation between the soybean oil-heating oil (BOHO) spread and biomass-based diesel D4 renewable information number (RIN) credits. Historically, tighter values in the BOHO spread, an indicator of soybean oil-based biodiesel production margins, have applied downward pressure to D4 RIN values, as biodiesel producers change their credit position, depending on the economics of their operation. But rising renewable diesel production has swelled the supply of D4 RINS, reducing credit values and making it harder for producers to monetize RIN credits, as the correlation between the two production factors deteriorates. Regression analysis measuring the effect of the BOHO spread on the next month's D4 price shows a decoupling of the relationship in recent years, with BOHO in the last two years about half as predictive of the change in D4 credit prices as it was in the years since 2016. The least correlated periods were in the fourth quarter of last year and the first quarter this year. In those quarters, the predictability of the BOHO spread came to 32pc and 34pc, respectively, meaning they were not predictive. The drop coincided with falling credit prices as substantial growth in renewable diesel production oversupplied the D4 RIN market. Unlike biodiesel, renewable diesel draws from a more diverse pool of feedstocks including beef tallow and used cooking oil, making renewable diesel production economics less dependent on soybean oil. D4 RINs have fallen at a faster rate than BOHO over the last year. D4 credits averaged 58.2¢/RIN in the first quarter, down by roughly two-thirds on the year, while BOHO narrowed by 49pc to 79.64¢/USG in the same period. D4 RIN equivalence, a 1.5x multiplier applied to the RIN value that factors in the amount of generated RINs/USG of biodiesel produced, averaged a 7.66¢/USG premium to BOHO in the first quarter, down from 87.73¢/USG a year earlier, leaving producers less room to profit from producing biodiesel. D4 RIN equivalence ended the first quarter at a discount to BOHO, averaging 9.6¢/USG less than BOHO from 6 March-31 March, and obligated parties have had trouble recouping production costs using RINs. Current production fundamentals could force smaller soybean oil-based biodiesel producers to reduce output in the second half of the year, as some producers have not reached purchase agreements for that period, according to market participants. Some facilities have closed. In March, Chevron REG announced the closure of two biodiesel plants in Wisconsin and Iowa "due to market conditions." By Payne Williams and Matthew Cope D4 Prices Vs BOHO Spread $ Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
TUI Cruises receives methanol-ready ship
TUI Cruises receives methanol-ready ship
New York, 18 April (Argus) — Cruise ship company TUI Cruises took delivery of a methanol-ready cruise ship which will start operations at the end of June. Methanol-ready vessels allow ship owners to easily retrofit their vessels to burning methanol in the future. The 7,900t deadweight Mein Schiff 7 will operate in the North Sea, the Baltic Sea, along the European Atlantic coast and in the Mediterranean and run on marine gasoil (MGO). It was built by Finland's Meyer Turku shipyard. In January, TUI Cruises signed a memorandum of understanding with trading company Mabanaft for future supply of green methanol. Mabanaft would cover TUI's methanol needs in northern Germany, and gradually add other European locations. Grey methanol was pegged at $717/t MGO equivalent and biomethanol at $2,279/t MGOe average from 1-18 April in Amsterdam-Rotterdam-Antwerp. About 0.9 times and 2.9 times, respectively, the price of MGO, Argus assessments showed. TUI Cruises is a joint venture between the German tourism company TUI AG and US-based cruise ship company Royal Caribbean. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canada furthers investment in GHG reductions
Canada furthers investment in GHG reductions
Houston, 18 April (Argus) — The Canadian government plans to have C$93bn ($67.5bn) in federal incentives up and running by the end of the year to spur developments in clean energy technology, hydrogen production, carbon capture utilization and storage (CCUS) along with a new tax credit for electric vehicle (EV) supply chains. The Canada Department of Finance, in its 2024 budget released on 16 April, said it expects to have the first planned investment tax credits (ITCs), for CCUS and renewable energy investments, in law before 1 June. The ITCs would be available for investments made generally within or before 2023 depending on the credit. The anticipated clean hydrogen ITC is also moving forward. It could provide 15-40pc of related eligible costs, with projects that produce the cleanest hydrogen set to receive the higher levels of support, along with other credits for equipment purchases and power-purchase agreements. The government is pursuing a new ITC for EV supply chains, meant to bolster in-country manufacturing and consumer adoption of EVs with a 10pc return on the cost of buildings used in vehicle assembly, battery production and related materials. The credit would build on the clean technology manufacturing ITC, which allows businesses to claim 30pc of the cost of new machinery and equipment. To bolster reductions in transportation-related greenhouse gas (GHG) emissions, the government will also direct up to C$500mn ($363mn) in funding from the country's low-carbon fuel standard to support domestic biofuel production . Transportation is the second largest source of GHG emissions for the country, at 28pc, or 188mn metric tonnes of CO2 equivalent, in 2021. But the province of Alberta expressed disappointment at the pace of development of ITC support that could help companies affected by the country's move away from fossil fuels. "There was nothing around ammonia or hydrogen, and no updates on the CCUS ITCs that would actually spur on investment," Alberta finance minister Nate Horner said. The incentives are intended to help Canada achieve a 40-45pc reduction in GHG emissions by 2030, relative to 2005 levels. This would require a reduction in GHG emissions to about 439mn t/yr, while Canada's emissions totaled 670mn in 2021, according to the government's most recent inventory. The budget also details additional plans for the Canada Growth Fund's carbon contracts for a difference, which help decarbonize hard-to-abate industries. The government plans to add off-the-shelf contracts to its current offering of bespoke one-off contracts tailored to a specific enterprise to broaden the reach and GHG reductions of the program. These contracts incentivize businesses to invest in emissions reducing program or technology, such as CCUS, through the government providing a financial backstop to a project developer. The government and developer establish a "strike price" that carbon allowances would need to reach for a return on the investment, with the government paying the difference if the market price fails to increase. CGF signed its first contract under this program last year , with Calgary-based carbon capture and sequestration company Entropy and has around $6bn remaining to issue agreements. To stretch this funding further, the Canadian government intends for Environment and Climate Change Canada to work with provincial and territorial carbon markets to improve performance and potentially send stronger price signals to spur decarbonization. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Germany delays HVO and B10 sales at fuel stations
Germany delays HVO and B10 sales at fuel stations
Hamburg, 18 April (Argus) — HVO and B10 will not be available for sale at German fuel stations until the end of April at the earliest, the environment ministry BMUV told Argus . The biodiesels were previously expected to be on sale from mid April, but the relevant amendment to the 10th Federal Immission Control Ordinance (BImSchV) still needs signatures from the heads of the three federal ministries involved — environment, transport and economics — and the German chancellor, after which it can be published in the Federal Law Gazette. The new regulations can come into force one day after publication. When this happens HVO100 and B10 diesel will be available for sale at German fuel stations. By Max Steinhau and Nik Pais dos Santos Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more