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Methanol-to-jet nears ASTM approval in SAF supply boost
Methanol-to-jet nears ASTM approval in SAF supply boost
London, 19 June (Argus) — Methanol-to-jet (MTJ) fuel is nearing full approval for use in commercial aircraft, potentially opening a major new route for producing sustainable aviation fuel (SAF) from renewable methanol. The MTJ pathway has passed the key stages of the process by ASTM International, the industry body that approves new fuel for use in aircraft. Industry sources expect remaining formalities to be completed in coming weeks. ASTM's committee recently approved Honeywell's MTJ pathway, the US-based technology provider said this week. This could unlock SAF production from feedstocks such as biomethanol and e-methanol, broadening supply beyond the waste oils and fats used in most SAF production. But the development extends beyond Honeywell. Its technology and fuel samples were used in the qualification work, but the MTJ pathway would be available to all producers operating within the approved specification, when that is adopted by ASTM. The MTJ pathway has passed balloting within ASTM and limited comments remain to be resolved, according to participants. They expect remaining approval steps to be completed at ASTM meetings in Chicago next week, paving the way to include the pathway the next time the organisation revises its D7566 aviation fuel standard. ASTM was not immediately available to confirm the news. The organisation typically confirms pathway approvals when it updates its standard. Honeywell expects the public update to come in July, Honeywell UOP president Rajesh Gattupalli told Argus . New aviation fuel pathways must undergo extensive testing and review before they can be approved. The MTJ process has taken several years. The approval removes one of the main technical barriers facing MTJ and allows the sector to focus on project economics and investment decisions. Until now, lack of ASTM approval has held companies back from taking commercial decisions. "No bank is going to give you a loan without an ASTM certification. No government is going to give you an incentive without an ASTM certification," Gattupalli said. "You don't get an offtake from any airline company without an ASTM certification." Honeywell has licensed its technology to multiple developers, which have been lining up offtake deals, financing, and incentives while waiting. ASTM approval allows them to "move to the next stage," Gattupalli said. The licensor sees most MTJ traction in Europe, where mandates have been spurring demand for SAF, and in China and India, where producers can benefit from strong potential in renewables, he said. Some companies plan to make biomethanol from biomass-derived syngas, while others eye e-methanol from renewable hydrogen and captured CO2. Some hybrid projects would make a mixture of both. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Japan's Cosmo Energy mulls LNG-fired power plant
Japan's Cosmo Energy mulls LNG-fired power plant
Osaka, 19 June (Argus) — Japanese energy firm Cosmo Energy is considering building a gas-fired power plant, given that domestic electricity demand is projected to continue rising. No details of the project framework have been decided. The company unveiled the considerations in its business plan to 2035, which was released on 18 June. The firm is mulling a gas-fired power plant while aiming to develop its renewable energy capacity, including wind and solar. LNG-fired generation can counter imbalances in renewables output. The firm aims to raise renewable capacity to 490MW by the April 2028-March 2029 fiscal year, up from 364MW in 2025-26. It also plans to increase power sales by 35pc to 3.1TWh over the same period. But power sources need to balance economic viability with decarbonisation, without being limited to green energy, the company said. Cosmo is also looking to expand its upstream exposure to natural gas beyond its traditional crude oil business. Details, such as location and timeline, have yet to be decided as the plan remains under consideration. The company may explore such opportunities in the UAE, where it plans to expand oil production . It remains unclear whether Cosmo will also move into liquefaction and LNG trading, even if it expands into upstream gas production and gas-fired generation. Fellow energy firm Idemitsu decided in March to invest in MidOcean Energy, an LNG company backed by US investment firm EIG, with the possibility of engaging in LNG trading. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
South Korea eyes single state-owned power utility
South Korea eyes single state-owned power utility
London, 18 June (Argus) — South Korea's five state-owned utilities are expected to be merged into a single utility — a move that could reshape the country's thermal coal procurement strategy. The country's climate and energy ministry in an interim briefing on Thursday released the findings of a government-commissioned study that identified consolidating five state-run utilities into one utility as the preferred option. The proposal was based on four key principles — strengthening the implementation of the energy transition, reducing financial risks, improving operational efficiency and facilitating a " just transition ". The merger would reduce thermal coal procurement costs through joint purchasing, the study said. "The restructuring of state-owned utilities is not simply about merging companies but about reorganising them into a more competitive business structure capable of responding to the energy transition," climate and energy minister Kim Sung-hwan said. Under the current system, the five state-run utilities procure coal independently and compete to secure the lowest-cost fuel supplies. The merger would prioritise supply security and fuel quality over price, market participants said. Market participants also expect the merger to shift coal procurement towards long-term contracts with major mining companies capable of ensuring stable supply, reducing reliance on spot purchases. Larger tender volumes are also expected to favour large suppliers, they said. The country's independent power producers (IPPs) are likely to maintain a more flexible procurement strategy, balancing spot purchases and long-term contracts while continuing to prioritise cost-effective fuel supplies, sources said. But the merger is unlikely to materialise in the near term, market participants said, owing mainly to the complexity of integrating five utilities with operations spread across the country. They cited challenges such as harmonising different operational systems, deciding on the location of the merged utility's headquarters and navigating regional interests. The restructuring would also require enabling legislation, potentially extending the timeline, they added. South Korea's five state-owned utilities split from parent company Kepco in 2001 as part of power sector reforms aimed at boosting competition and efficiency. They are projected to account for about 83pc of South Korea's thermal coal demand and 89pc of coal-fired output this year, according to Argus' calculations. The merger would have little immediate impact on thermal coal demand, according to market participants, because it would change who operates coal-fired plants rather than the number of plants in operation. Coal-fired plant retirements will continue in line with the country's power supply and demand plan regardless. But market participants said the government's commitment to the energy transition and planned coal phase-out could gradually weigh on thermal coal demand over the longer term. The interim report released on Thursday reaffirmed the South Korean government's target to phase out coal-fired power generation by 2040 and expand renewable capacity to 100GW by 2030 . The transition would place greater emphasis on grid balancing, system flexibility and power stability rather than on simply increasing power generation, market participants said. The energy ministry plans to finalise its plan for reorganising the functions and structure of South Korea's state-owned utilities next month after consulting experts and stakeholders. By Dayu Park HQ location of S Korea's state-owned utilities Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Brazilian ethanol flows start slow under EU-Mercosur
Brazilian ethanol flows start slow under EU-Mercosur
London, 17 June (Argus) — Ethanol exports from Brazil to the EU under the interim Trade Agreement (iTA) with the Mercosur trade bloc, which began on 1 May, have been sluggish so far, as a result of confusion around quota management, difficulties with export licences and uncertainties about the tracking of imported ethanol's final application. Brazil, the Mercosur's largest ethanol producer with a nameplate capacity of more than 77mn t/yr, exported 7,277m³ — approximately 5,780t — of ethanol to EU countries in May, the lowest volume since March 2025, according to Brazilian trade ministry Mdic data. Mercosur is a trade bloc including Brazil, Argentina, Uruguay and Paraguay as permanent members. Increased freight costs as a result of the Iran-US war as well as lower availability of product at the beginning of the 2026-27 sugarcane crop, which spans from 1 April 2026-31 March 2027, weighed on exports. But caution over the EU-Mercosur trade agreement also played a role in diminishing Brazilian ethanol exports to Europe. Many producers and exporters are struggling to access the quotas, and others are waiting to see how practical terms of the deal will unravel. None of the cargoes from Brazil in May have arrived in Europe under the iTA quota, according to market participants. Legal limit Under the EU's implementation regulation, import quotas from Mercosur suppliers are managed under licences and not on a first-come-first-served basis, as some market participants previously assumed. This assumption created some hesitation, with a market participant pointing out that if a cargo was delayed it would run the risk of arriving after the quota had been already allocated, meaning that it would not benefit from the lower or zero tariffs under the quota and incur the maximum Most Favoured Nation (MFN) duty of €192/m³ for undenatured ethanol and €102/m³ for denatured ethanol. Bureaucracy surrounding the licences to benefit from reduced tariffs is also weighing on exports from Brazil. Brazilian producers are struggling with the paperwork needed to export with tariff exemption. Some have even reportedly been denied access, because the Brazilian government only grants the licence to producers and exporters of sugarcane-based ethanol from the north or northeast of the country. Brazil's trade ministry Mdic confirmed to Argus that ethanol from other regions and sources, such as corn, will face no such restrictions. Up until the end of 2026, only a small amount of imported ethanol from Mercosur suppliers will be able to profit from the lower or zero tariffs. This is because the iTA allows for imports of up to 650,000t/yr of Mercosur-origin ethanol, phased in across five years. In 2026, duty-free ethanol imports of only 90,000t are permitted for chemical use and only 40,000t for other purposes, including fuel blending, at an in-quota tariff rate equalling a third of the standard MFN duty. The quotas for this year could be quickly met, considering an IMO2 coated medium range tanker can carry up to 40,000t of ethanol, while a standard stainless steel vessel can carry up to around 18,500t. Smaller chemical tankers frequently carry ethanol too. The EU imported over 60,500t of undenatured ethanol from the Mercosur region in 2025, with more than 72pc of this coming from Brazil, according to Eurostat data. Alcohol misuse Market participants have also voiced uncertainty in relation to how the European Commission will track which industry the imported ethanol will ultimately end up in. Several told Argus that they question what will happen if ethanol imported for the chemical sector ends being used for a different purpose. Under Annex 2-A of the iTA the EU can subject imports to an End-Use Procedure , to conduct the relevant customs checks on the imports' declared use, and that can be applied ethanol imports to ensure their final application. The EU's Union Customs Code (UCC) outlines that to obtain authorisation for this procedure an applicant must have a registered office in the EU customs territory, provide the necessary assurance that the operations using these goods will be properly implemented and provide a guarantee. If end-use conditions are then breached under general EU customs law, a customs debt is incurred, and the importer must pay the difference, plus interest on arrears. Member states set financial penalties for misdeclaration under national law. By Toby Shay and Maria Ligia Barros Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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