US, Australia agree on minerals, emissions, energy pact
The US has agreed to work with Australia on greenhouse gas (GHG) emissions reduction, with US president Joe Biden promising to advocate for Australia's inclusion for tax credits under his $369bn Inflation Reduction Act (IRA).
Australian prime minister Anthony Albanese announced the bilateral cooperation under a climate, critical minerals and clean energy transformation compact, establishing climate and clean energy as a "central pillar" of the US-Australian alliance. The deal was announced on the sidelines of the G7 meeting taking place in the Japan's Hiroshima, which has focused on clean energy and manufacturing.
Albanese welcomed the IRA as the "largest ever action" to tackle climate change, but concern has been building about the effects the tax credit policy will have in drawing renewable energy investment away from key US allies such as Japan, the EU and Australia, while also harming foreign manufacturers.
Albanese said Biden will push the US Congress to treat Australian suppliers and activity as "domestic activity in the United States" for the purpose of the Defense Production Act, given that the nations work together on nuclear submarines.
"If we think about industries like hydrogen, without that support, there would be a massive incentive for hydrogen-based industries to be based in the United States," Albanese said. "So the big risk with the Inflation Reduction Act to the world because we need to reduce the world's emissions, not just that one nation state, is that you'll see capital leave Australia to go to the United States. This is about addressing that."
Australia assures Japan over gas, coal security
Albanese has separately promised his Japanese counterpart Fumio Kishida that reliable energy supplies will continue to flow, following an unusual intervention in domestic politics by the Japanese ambassador to Australia last year.
"The prime minister underscored Australia's commitment to remaining a reliable supplier of energy to Japan as both countries transition to net zero," a statement from Albanese's office said.
Australia provides about 70pc of Japan's coal imports and 40pc of its gas imports. Japanese ambassador to Australia Shingo Yamagami last year said business and government leaders were concerned over some policies, including a coal royalty increase in the state of Queensland.
Proposed gas developments in Australia's north will face stronger regulatory scrutiny under changes to climate laws that require net zero scope 1 CO2 emissions from new projects. Japan is a major investor in Australian gas and LNG, including the 8.9mn t/yr Inpex-operated Ichthys LNG project near Darwin, the nation's largest single foreign investment.
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Japanese ethylene producers unite for decarbonization
Japanese ethylene producers unite for decarbonization
Tokyo, 8 May (Argus) — Japanese petrochemical producers Mitsui Chemicals, Mitsubishi Chemical and Asahi Kasei have agreed to co-operate on decarbonization of their ethylene crackers in west Japan, targeting to decide a pathway within the current April 2024-March 2025 fiscal year. They plan to accelerate carbon neutrality at Mitsubishi Chemical and Asahi Kasei's 496,000 t/yr Mizushima cracker in Okayama prefecture and Mitsui Chemicals' 455,000 t/yr Osaka cracker in Osaka prefecture. The partners aim to introduce biomass feedstocks such as biomass-based naphtha and bioethanol and low-carbon cracking fuels like ammonia, hydrogen and electricity. They said joining forces will enable them to accelerate reducing greenhouse gas emissions, although they have not yet decided any further details. Mitsui Chemicals has experience in using bio-naphtha and recycled pyrolysis oil at its Osaka cracker. Japanese petrochemical producers have increasingly united to achieve decarbonization of their production processes, which account for around 10pc of the Japanese industrial sector's carbon dioxide emissions, according to the trade and industry ministry. Mitsui Chemicals, Sumitomo Chemical and Maruzen Petrochemical agreed to study the feasibility of chemical recycling and using bio-feedstocks at the Keiyo industrial complex in Chiba. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New Zealand’s Genesis Energy to resume coal imports
New Zealand’s Genesis Energy to resume coal imports
Sydney, 8 May (Argus) — New Zealand's upstream firm and utility Genesis Energy plans to resume thermal coal imports later this year to feed its dual gas- and coal-fired Huntly power plant. The resumption was because of lower domestic gas production and rapidly declining coal stockpiles, and will mark the firm's first coal imports since 2022. Coal inventories at the 953MW Huntly plant, — New Zealand's largest power station by capacity and the country's only coal-fired facility — recently slipped below 500,000t, down from 624,000t at the end of March, and will fall below 350,000t by the end of the winter. This will trigger a need to purchase more coal to maintain a target operational stockpile of around 350,000t ahead of winters in 2025 and 2026, the company said on 8 May. Imports are currently the most efficient option for the quantity the company will need, with a delivery time of around three months, chief executive Malcolm Johns said. Genesis typically imports from Indonesia, the company told Argus . Gas production in New Zealand has dropped at a faster rate than expected, with major field production in April down by 33pc on the year, Genesis said. Lower gas availability typically leads to more coal burn, because the Huntly plant runs on gas and coal. This is in addition to an extended period of low hydropower inflows in recent months, which required higher thermal generation to ensure supply security. A prolonged outage at Huntly's unit 5 gas turbine between June 2023 and January 2024 also led to an even greater need for coal-fired generation, Genesis said. Biomass transition The company — which is 51pc owned by the state — is the second-largest power retailer in New Zealand, behind domestic utility Mercury, according to data from the Electricity Authority. It has a NZ$1.1bn ($659mn) programme for renewable power generation and grid-scale battery storage , which includes a potential replacement of coal with biomass at Huntly. But the transition to biomass "will take some years," Johns said. Genesis has successfully completed a biomass burn trial at Huntly last year and has collaboration agreements with potential New Zealand pellet suppliers, but there is currently no local source for the type of pellets needed for the plant. Genesis is hoping to move to formal agreements "as soon as counterparties are able". The company will not consider importing pellets, it told Argus . "We will only use biomass if we can secure a local New Zealand supply chain that is sustainable and cost-effective," it said. Domestic gas production New Zealand's three-party coalition government said separately on 8 May that the "material decline" in local gas production threatens energy security, blaming the previous Labour party-led government for "policy decisions which have disincentivised investment in gas production." The decisions — which were part of the former government's pledge to achieve a carbon-neutral economy by 2050 — led to a reduction in exploration for new gas resources since 2021, while suppressed maintenance drilling reduced production from existing gas fields, according to a joint release from energy minister Simeon Brown and resources minister Shane Jones. "Due to this significant reduction in gas production, the government has also been advised that some large gas consumers are expressing concern about their ability to secure gas contracts," the government said. Major industrial users such as Canada-based methanol producer Methanex have been forced to reduce production as a result, it noted. "We are working with the sector to increase production, and I will be introducing changes to the Crown Minerals Act to parliament this year that will revitalise the sector and increase production," Jones added. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Arcadium witnesses firm January-March lithium demand
Arcadium witnesses firm January-March lithium demand
Singapore, 8 May (Argus) — US-based Arcadium Lithium said demand was "quite strong" during January-March despite the bearish tone at the start of the year, while acknowledging weaker short-term lithium demand compared with previous forecasts. "Market demand was actually quite strong and certainly not reflective of some of the ‘doomsday' scenarios," said Arcadium chief executive Paul Graves with its first-quarter results, citing still growing electric vehicle (EV) sales globally and in China. Arcadium is the merged entity of Australian lithium firm Allkem and US lithium producer Livent, which completed their merger earlier this year. Global EV sales during January-March were up by around 25pc to over 3mn units, according to the IEA, mainly driven by China. China's new energy vehicle production and sales for the quarter rose by 28pc and 32pc from a year earlier to 2.114mn and 2.089mn units respectively, according to China Association of Automobile Manufacturers data. Expectations for EV sales in China are even higher in the second quarter partly because of "new economic incentives", said Graves, likely referring to China's new automobile trade-in subsidies that has boosted the prices of some battery feedstock metals. Some industry analysts opted to lower their short-term demand forecasts to account for the higher recent sales mix of plug-in hybrid electric vehicles (PHEVs), Graves said, as sales of battery EVs (BEVs) seem to be losing ground. But Graves countered this by stating that lower BEV sales, which he concedes are expected to be lower by on average 20pc globally in 2024 and 2025 compared with forecasts a year ago, will lead to lower lithium demand that will largely be made up by demand from PHEVs and non-automotive such as stationary energy storage. Arcadium predicts only around 5pc lower demand in terms of GWh in 2024 and 2025 compared with previous forecasts, with demand to remain unchanged or even slightly higher in 2026. Output boost Arcadium is still on track to raise its combined lithium carbonate and hydroxide delivered volumes by about 40pc to 50,000-54,000t lithium carbonate equivalent this year, with volume growth weighted towards the second half of the year. It sold during January-March 30,000 dry metric tonnes (dmt) of spodumene concentrate at $827/dmt on a 5.4pc grade basis and 9,300t of lithium hydroxide and carbonate at around $20,500/t. Contrary to the prevailing view that lithium hydroxide is trading at a discount compared with lithium carbonate, Graves said that is "absolutely not the case" in their portfolio but rather it is at a "significant premium to carbonate". The company has fully commissioned the first 10,000 t/yr expansion at its Fenix lithium carbonate facility in Argentina, which is producing at close to full capacity. Its Olaroz stage two expansion in Argentina, with a nameplate capacity of 25,000 t/yr technical-grade lithium carbonate, is producing at lower rates given a longer ramp-up period. Its lithium hydroxide facilities in US North Carolina's Bessemer and China's Zhejiang with a combined 20,000 t/yr of capacity are still undergoing qualification. Arcadium is planning to expand in Argentina and Canada and expects to add 95,000 t/yr of additional nameplate production capacity by the end of 2026, which will span across spodumene, lithium carbonate and lithium hydroxide. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Doubts abound over US midcon E15 shift: NATSO
Doubts abound over US midcon E15 shift: NATSO
Houston, 7 May (Argus) — An effort by eight US midcontinent states to start selling 15pc ethanol (E15) gasoline blends year-round starting in 2025 remains unlikely, according to US fuel retailer trade association NATSO. The US approved last month the request from Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin for year-round E15 gasoline sales starting next year. But even with that approval there are many barriers to making those sales a reality, said David Fialkov vice president of government affairs for NATSO, which represents truck stops and travel center operators. This includes a lack of investment from pipelines and refiners to prepare for the changes, as well as the higher costs of separating and selling different gasoline specifications at the retail level. "I remain pessimistic that it will come to fruition," Fialkov said Tuesday at a conference held by fuel retail industry group SIGMA in Austin, Texas. Political pressure to delay or abate the change in the midcontinent states will probably continue until refiners, pipeline companies and retailers begin to make the investments necessary, said Fialkov. E15 has been available for sale across the US since 2019, but a federal court in 2021 found that the Clean Air Act offers a fuel volatility waiver to refiners to produce only 10pc ethanol gasoline. The Environmental Protection Agency (EPA) has worked around this ruling for the last two summers by issuing temporary emergency orders allowing the sale of E15 because of the war in Ukraine's squeeze on crude prices. A group of midcontinent refiners has petitioned the EPA to delay implementation of the E15 rule until the summer of 2026. The EPA has not yet ruled on the request. Fialkov said a legislative solution to the issue at the federal level would provide a clear and uniform pathway to E15, as opposed to the the EPA's rule which leaves some states still relying on the waiver and others opting to go with year-round E15. By Zach Appel Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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