Australia parliament debates safeguard mechanism bill
The Australian government has introduced the Safeguard Mechanism (Crediting) Amendment Bill 2022 into the lower house of parliament that allows large industrial facilities to earn carbon credits when reducing their greenhouse gas (GHG) emissions below baselines.
The ruling Labor government's reform of the safeguard mechanism, which imposes emissions caps on all facilities emitting over 100,000 t/yr of CO2 equivalent (CO2e), include around 215 facilities. The reform is due to come into force at the start of the 2022-23 fiscal year to 30 June, providing it passes both houses of the Australian parliament without drastic amendments.
Australian independent Woodside Energy has interests in six Australian oil and gas facilities that it either operates or has a financial interest, and most of its domestic facilities would be subject to the mechanism.
The bill amends the National Greenhouse and Energy Reporting Act 2007 (NGER Act) and Australian National Registry of Emissions Units Act 2011 to establish Safeguard Mechanism Credits (SMCs), covering how credits are issued, purchased, and included in the Australian National Registry of Emissions Units.
"The reforms will support industry to reduce emissions efficiently, while maintaining competitiveness as the global economy decarbonises," Australian energy and climate change minister Chris Bowen said. The introduction of the safeguard mechanism is one of the government's policies to reduce GHG emissions to meet its target of a 43pc reduction by 2030 from 2005 levels.
The government said on Thursday that Australia was on track to reduce GHG emissions by 40pc by 2030 from 2005 levels, or just short of its target of 43pc based on current emissions reduction polices. Canberra said it was confident of meeting its target based on the emissions reduction policies it plans to legislate, including the safeguard mechanism.
The 215 facilities that will be subject to the mechanism accounted for 28pc of Australia's total GHG emissions in 2020–21 fiscal year to 30 June, which totalled 486.6mn t of CO2e. To contribute this proportional share of the national emissions target of a 43pc fall by 2030 from 2005 levels, aggregate baselines need to fall to 99mn t of CO2e by 2030 from around 137mn t of CO2e in 2020-21. Australia's national emissions were 621.1mn t of CO2e in 2005 and must fall to 354mn t of CO2e by 2030, if Australia is to meet its international target.
The safeguard mechanism was first introduced on 1 July 2016, and was previously amended in March 2019. There were no meaningful baselines imposed for facilities to reduce their GHG emissions under the original mechanism or through the changes made in the amendments.
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NSTA fines Neo Energy for North Sea methane venting
NSTA fines Neo Energy for North Sea methane venting
London, 18 April (Argus) — UK offshore regulator the North Sea Transition Authority (NSTA) has fined UK upstream firm Neo Energy £100,000 for breaching its methane venting permit at North Sea fields. The company emitted 1,200t of methane in excess of its permit from the Donan, Lochranza and Balloch fields in the first nine months of 2022. Neo had permission to vent 378t of methane from installations at these fields in that year, but incorrectly assigned volumes vented through unlit flares to its flaring consent, the NSTA found. Neo showed a "lack of oversight" by failing to detect the licence breach for seven months, NSTA said. The company reached its annual limit by 21 March 2022, but continued venting without authorisation until October 2022. The company said it did not update its flare and vent allocation process to reflect NSTA guidance updated in 2021, and as such was still assigning its flaring and venting according to previous guidance. Neo becomes the fourth company to be fined by the NSTA over breaches relating to flaring and venting consents. The regulator in 2022 sanctioned Equinor and EnQuest and last year fined Spanish utility Repsol for consent breaches. The four companies have been fined a total of £475,000 for the breaches. And the regulator in February had four more investigations under way for breaches of vent consents. Neo Energy's fine is equivalent to £2.98/t of CO2e emitted, assuming a global warming potential of methane that is 28 times that of CO2 on a 100-year time scale, compared with a UK emissions trading system price of £34.40/t of CO2e on 17 April. The UK offshore industry targets a 50pc reduction in production emissions of greenhouse gases by 2030, from a 2018 baseline. And it intends to end all routine venting and flaring by that year. The regulator last year warned that "further, sustained action" would be needed to reach the 2030 emissions reduction goal. Methane emissions from offshore gas fell in recent years, to 1mn t in 2022 from 1.6mn t in 2018, according to NSTA data. Roughly half of methane emissions in the sector in recent years has been produced by venting, while flaring makes up about a quarter of the emissions. The UK government is a member of the Global Methane Pledge group of countries that aims to reduce methane emissions by 30pc by 2030 from a 2020 baseline. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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.
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