Sweden enlists climate certifier for Article 6
The Swedish Energy Agency has entered into a partnership with climate standard certifier Gold Standard in the context of its international climate co-operation activities under Article 6 of the Paris climate agreement.
Sweden has partnered with non-governmental organisation-founded Gold Standard to "facilitate the Swedish government's acquisition of quality Internationally Transferred Mitigation Outcomes (ITMOs)", in what the certifier said is a first agreement of its kind.
Article 6 of the Paris agreement is designed to enable voluntary international co-operation on climate action, including through the trading of emissions reductions — known as ITMOs — between countries.
Sweden will apply Gold Standard rules and use the certifier's framework and infrastructure for its Article 6 activities under the partnership.
"This is expected to reduce transaction costs, increase certainty over supply for the government, reduce risk for project developers and give independent assurance to all stakeholders that rigorous requirements are in place to ensure integrity and quality," the agency said.
The Swedish Energy Agency last week launched a second public procurement process for projects designed to mitigate greenhouse gas emissions that are compatible with Article 6, targeting activities located in Ghana.
Its first public procurement process for Article 6-compatible mitigation projects in the Dominican Republic opened last month.
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Australia’s Queensland legislates emissions targets
Australia’s Queensland legislates emissions targets
Sydney, 18 April (Argus) — Australia's Queensland state today approved two separate laws setting renewable energy and emissions reduction targets over the next decade, as it transitions away from a coal-fired dependent power generation system. Queensland set net greenhouse gas (GHG) emissions reduction targets of 30pc below 2005 levels by 2030, 75pc by 2035 and zero by 2050 under the Clean Economy Jobs Act, while theEnergy (Renewable Transformation and Jobs) Act sets renewable energy targets of 50pc by 2030, 70pc by 2032 and 80pc by 2035. The state is on track to surpass the 2030 emissions target, latest data show, as it achieved a 29pc reduction in 2021. Even though the share of renewables in the power mix last year was the lowest across Australia at 26.9pc, it has been increasing consistently since 2015 when it was 4.5pc, according to data from the National Electricity Market's OpenNem website. Coal-fired generation has been steadily falling, down to 42.9TWh or a 65.7pc share in 2023 from 52.9TWh or 83pc in 2018. Most of Queensland's coal-fired plants belong to state-owned utilities, which the previous Labor party-led government of Annastacia Palaszczuk indicated would stop burning coal by 2035 . The new Labor party premier Steven Miles disclosed the 75pc emissions reduction target by 2035 in his first speech as leader last December. The Energy Act locks in public ownership of electricity assets, ensuring that at least 54pc of power generation assets above 30MW remain under state control, as well as 100pc of all transmission and distribution assets and 100pc of so-called "deep storage" assets — pumped hydro plants with at least 1.5GW of capacity. The government will need to prepare and publish a public ownership strategy for the July 2025-June 2030 and July 2030-June 2035 periods. A fund totalling A$150mn ($97mn) will also be set up to ensure workers at existing state-owned coal-fired power plants and associated coal mines have access to new jobs and training or financial assistance during the transition. The Clean Economy Jobs Act sees the government receiving advice from an expert panel on the measures needed to reduce emissions. The government will need to develop and publish sector plans by the end of 2025 with annual progress reports to Queensland's parliament. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU ETS in pricing ‘no man’s land’
EU ETS in pricing ‘no man’s land’
Florence, 17 April (Argus) — The EU emissions trading system (ETS) is sitting in a period between traditional price signals from the power sector and expected future industrial sources of price direction, delegates at a conference in Florence, Italy, heard today. The EU ETS is "right in the middle" of the transition phase from a power-centric to industrial-driven market, head of carbon markets at Spanish bank BBVA, Ingo Ramming, told the event, pointing to the fall in hedging of carbon allowances by the power sector as a result of renewable capacity buildout and reduced power demand in the current economic slowdown. Improvements in the economy could see more forward hedging by industrials, Ramming said. Aviation and shipping — the other sectors covered by the EU ETS in which decarbonisation has so far been limited — could be further ahead on this if they had synchronised their carbon hedging with their fuel hedging, Ramming added. But until industry steps in to fill the current gap, the EU ETS is "in no man's land", head of research at fund manager Andurand Capital, Mark Lewis, said. "Carbon this year is a price taker, not a price maker," head of market research and analysis at environmental commodities trading firm Vertis, Stefan Feuchtinger, said. "Carbon doesn't matter to the carbon price." But while Lewis sees this gap leaving space in the market open to the financial sector, attributing recent price direction and volatility to speculators, Feuchtinger believes there is still "significant" power hedging in the EU ETS, even if at much lower levels than in the past. Feuchtinger expects the carbon market to continue to be priced by the utility sector until 2026-27, when there is no longer sufficient coal in the market to justify this and pricing shifts to the industrial side. Where the carbon price will sit once it is set by industrials is "less straightforward", Feuchtinger said. Carbon capture and storage is key to this, he said, but depends on where it is based and which technology is used, requiring carbon prices in a range of €90-150/t of CO2 equivalent. And while carbon prices sitting well below these levels mean less action is currently being taken to develop solutions for industrial decarbonisation, this time delay will lead to larger price spikes in the future, he said. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Gulf lowest-cost green ammonia in 2030: Report
US Gulf lowest-cost green ammonia in 2030: Report
New York, 16 April (Argus) — The US Gulf coast will likely be the lowest cost source of green ammonia to top global bunkering ports Singapore and Rotterdam by 2030, according to a study by independent non-profits Rocky Mountain Institute and the Global Maritime Forum. Green ammonia in Singapore is projected to be sourced from the US Gulf coast at $1,100/t, Chile at $1,850/t, Australia at $1,940/t, Namibia at $2,050/t and India at $2,090/t very low-sulphur fuel oil equivalent (VLSFOe) in 2030. Singapore is also projected to procure green methanol from the US Gulf coast at $1,330/t, China at $1,640/t, Australia at $2,610/t and Egypt at $2,810/t VLSFOe in 2030. The US Gulf coast would be cheaper for both Chinese bio-methanol and Egyptian or Australian e-methanol. But modeling suggests that competition could result in US methanol going to other ports, particularly in Europe, unless the Singaporean port ecosystem moves to proactively secure supply, says the study. In addition to space constraints imposed by its geography, Singapore has relatively poor wind and solar energy sources, which makes local production of green hydrogen-based-fuels expensive, says the study. Singapore locally produced green methanol and green ammonia are projected at $2,910/t and $2,800/t VLSFOe, respectively, in 2030, higher than imports, even when considering the extra transport costs. The study projects that fossil fuels would account for 47mn t VLSFOe, or 95pc of Singapore's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia (about 1.89mn t VLSFOe) and green methanol (3.30mn t VLSFOe). Rotterdam to pull from US Gulf Green ammonia in Rotterdam is projected to be sourced from the US Gulf coast at $1,080/t, locally produced at $2,120/t, sourced from Spain at $2,150/t and from Brazil at $2,310/t. Rotterdam is also projected to procure green methanol from China at $1,830/t, Denmark at $2,060/t, locally produce it at $2,180/t and from Finland at $2,190/t VLSFOe, among other countries, but not the US Gulf coast . The study projects that fossil fuels would account for 8.1mn t VLSFOe, or 95pc of Rotterdam's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia, at about 326,000t, and green methanol, at about 570,000t VLSFOe. Rotterdam has a good renewable energy potential, according to the study. But Rotterdam is also a significant industrial cluster and several of the industries in the port's hinterland are seeking to use hydrogen for decarbonisation. As such, the port is expected to import most of its green hydrogen-based fuel supply. Though US-produced green fuels are likely to be in high demand, Rotterdam can benefit from EU incentives for hydrogen imports, lower-emission fuel demand created by the EU emissions trading system and FuelEU Maritime. But the EU's draft Renewable Energy Directive could limit the potential for European ports like Rotterdam to import US green fuels. The draft requirements in the Directive disallow fuel from some projects that benefit from renewable electricity incentives, like the renewable energy production tax credit provided by the US's Inflation Reduction Act, after 2028. If these draft requirements are accepted in the final regulation, they could limit the window of opportunity for hydrogen imports from the US to Rotterdam to the period before 2028, says the study. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
The Hague eyes higher tax for larger industry emitters
The Hague eyes higher tax for larger industry emitters
Florence, 16 April (Argus) — The Dutch government has decided to maintain the planned rate of increase of its CO2 tax on industry until 2028, after which it will apply a higher tax to emissions that are further over the levy's threshold. Industry tax measures put forward by the government in its 2024 tax plan package were rejected by the senate in December, prompting the government to reexamine the package in its spring memorandum published this week. The government has opted to maintain the current price path for its national CO2 tax on industry until 2028, beyond which point the first 50,000t of taxed emissions will continue on the same path, but for emissions beyond this level the tax will increase to €216 in 2030. This approach "takes into account the limited action prospects of some of the smaller emitters, without losing the incentive for the larger emitters in particular," the government said. The Dutch national CO2 tax on industry introduced in 2021 levies the difference between the EU emissions trading system (ETS) price and a tax level determined by the government, which rises every year, essentially setting a minimum carbon price for covered companies. For 2024, the tax stands at €74.14/t CO2 equivalent (CO2e), up from €55.94/t CO2e last year. The EU ETS benchmark front-year contract has closed at an average of around €61.95/t CO2e this year, Argus data show. The government has turned down a motion to include a hardship clause for companies unable to pay the levy because of "missing preconditions" as "legally and technically undesirable and impracticable", but has commissioned external research to investigate possible alternatives. The Dutch government intends to submit a draft climate plan for 2025-30 for public consultation by the autumn, it said in the memorandum. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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