Brazil launches coal power program with 2050 end date
The Brazilian government launched a program to encourage the continued use of coal-fired power in the face of a drought-induced power shortage.
The ordinance launched today, which runs counter to most global efforts to penalize coal fired power and other higher carbon fuels, has three objectives: preserving the existing coal power industry — which is concentrated in Brazil's southern region and provides a capacity of 1,572MW; lessening the coal industry's environmental impact; and encouraging contracting of installed coal power capacity.
Coal has became less competitive than other fuels in recent years from an efficiency perspective — with only 32pc efficiency against natural gas' 60pc, for example — while its higher emissions made it less attractive. This led to it losing governmental financing and space in Brazil's power auctions.
The Brazilian coal mining industry has tried to keep the sector alive, as a subsidy being paid by all regulated power consumers is set to expire in 2027.
The proposal calls for unspecified financial incentives for Brazil's coal-fired thermal plants to be put under contract through auctions for the regulated power market. Currently, most of the country's energy is already contracted in this kind of auction, in which the government follows its energy policy to determine which kinds of plants should be considered. The last time a coal-powered thermal plant was hired in an auction was in 2014.
The program also proposes that the government should invest in the modernization of Brazil's coal-fired plants, making them more sustainable, while also making them more attractive during auctions. It also proposes government help in searching for new powerplant financing or retrofitting of existing ones, including using public funding.
The proposal also suggests auction contracts with due dates that extend until 2050, Brazil's current deadline for the decarbonization of its energy grid. The ordinance argues that this is a cheaper alternative to Brazil's risk of an electrical blackout, as coal is an "indigenousfuel, not dollar-denominated."
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Australia's CER undecided on SMC issuance details
Australia's CER undecided on SMC issuance details
Sydney, 12 September (Argus) — Australia's Clean Energy Regulator (CER) has not yet decided on the level of details that will be published alongside the upcoming safeguard mechanism credits (SMCs), while estimated issuance numbers remain within a "wide" range, delegates heard at a forum in Sydney. The regulator will start to issue SMCs early next year to safeguard facilities that report scope 1 greenhouse gas (GHG) emissions below their annual baselines. Each SMC will represent 1t of CO2 equivalent (CO2e) below a facility's baseline, which will have the option to either hold it for future use or sell it in the market. The CER has an estimated range of SMC issuance numbers for the July 2023-June 2024 compliance year, the first under Australia's reformed safeguard mechanism . But this range is "very wide" as several factors are at play, executive general manager Carl Binning told delegates at a safeguard mechanism forum organised by the regulator in Sydney on 11 September. SMC issuances will be "relatively modest initially" according to Binning, but volumes are expected to build up over time as companies intensify efforts to reduce emissions while baselines converge to industry averages. He declined to provide any internal estimates on SMC issuances. Australian companies need to submit their emissions and energy data under the National Greenhouse and Energy Reporting (NGER) scheme by 31 October, including covered emissions data for individual safeguard facilities. The CER is finalising the so-called energy intensity determinations for each facility, which will be used to set their baselines. Baselines will be based on a production-adjusted framework initially weighted towards site-specific emissions intensity values, transitioning to industry average emissions intensity levels by 2030. Under the reformed mechanism, facilities that emit more than 100,000t of CO2 equivalent (CO2e) in a fiscal year face declining baselines — at a rate of 4.9 pc/yr until 2030 — and need to surrender Australian Carbon Credit Units (ACCUs) or SMCs if their onsite abatement activities were not enough to keep their emissions below thresholds. Australia's Department of Climate Change, Energy, the Environment and Water (DCCEEW) late last year estimated SMC issuances would start at around 1.4mn units in the 2024 financial year ending 30 June 2024, rising to 7.4mn in 2030 and 10.3mn in 2035. Facilities that fall below the coverage threshold of 100,000t CO2e can choose to continue receiving SMCs for up to 10 years — with their baselines continuing to decline if they opt in — and the DCCEEW expects such issuances will be the main source of SMCs by 2035 (see table). Uncertain data level All safeguard facilities will need to give a breakdown of the surrendered ACCUs by the method under which they were generated for the first time from the 2024 financial year, as well as a breakdown of their emissions by CO2, methane and nitrous oxide. The CER will publish 2023-24 safeguard data by 15 April 2025. But while the regulator will also need to publish the number of SMCs issued to a facility, there is still no definition on whether it will disclose where SMCs surrendered by facilities came from, Binning told delegates. "One of the issues we're really wrestling with in the design of our new registry is how much information we tag," Binning said. "I think the marketplace is interested in more granularity… so I'd actually invite feedback on this topic," he added. The CER expects that the new registry replacing the Australian National Registry of Emissions Units (ANREU) will be operational by the end of calendar year 2024. It plans to issue SMCs into the new registry and transfer all ACCUs from the ANREU "gradually" over the following months before the start of the next safeguard compliance period. By Juan Weik Projected SMC issuances (mn) Financial year From safeguard facilities From below-threshold facilities Total 2024 1.36 0.05 1.41 2025 1.62 0.13 1.75 2026 2.27 0.06 2.33 2027 3.20 0.26 3.46 2028 3.52 0.22 3.74 2029 4.34 0.54 4.88 2030 5.67 1.77 7.44 2031 5.31 1.92 7.23 2032 5.29 3.75 9.04 2033 6.77 3.47 10.24 2034 5.82 4.72 10.54 2035 4.80 5.51 10.31 Source: DCCEEW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
WMO puts likelihood of La Nina at 60pc from October
WMO puts likelihood of La Nina at 60pc from October
London, 11 September (Argus) — There is a 60pc chance of La Nina weather conditions emerging from October to February next year, the World Meteorological Organisation (WMO) said today. The chance of the El Nino pattern redeveloping during that time are "negligible", it said. La Nina generally leads to a cooling effect on a global level, while El Nino typically has the opposite effect. The weather patterns are naturally occurring, but "are taking place in the broader context of human-induced climate change" that is increasing temperatures globally, the WMO said. The past nine years have been the warmest on record, even with the cooling influence of a La Nina period from 2020 to early 2023, the organisation noted. "Even if a short-term cooling La Nina event does emerge, it will not change the long-term trajectory of rising global temperatures due to heat-trapping greenhouse gases in the atmosphere", WMO secretary-general Celeste Saulo said. Last month was the joint-hottest August on record , and was on average 1.51°C above pre-industrial levels. The Paris climate agreement seeks to limit global warming to "well below" 2°C above pre-industrial temperatures, and preferably to 1.5°C. Global temperatures have been at or close to record highs to date this year and it is "increasingly likely that 2024 is going to be the warmest year on record", EU earth-monitoring service Copernicus said last week. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Carbon markets need frameworks, Article 6 progress
Carbon markets need frameworks, Article 6 progress
Berlin, 10 September (Argus) — International carbon markets need better frameworks both at domestic and international level, and consistent guidance on the role of carbon credits and their legal nature, a report by the World Bank has found. The report, presented at the World Bank's Innovate4Climate conference in Berlin today, calls for better harmonisation at several levels, including governance structures but also extending to frameworks such as integrity initiatives, independent standards, verification bodies, registers, transaction registries or exchanges. The World Bank also urges progress on the framework for a new UN-supervised carbon market under Article 6 of the Paris climate agreement at the UN Cop 29 climate conference in November in Baku, Azerbaijan. Article 6.4 additionally provides for so-called mitigation contribution units, which could be used in the voluntary carbon market for "appropriate claims", the World Bank said. Greg Murray, founder of the KoKo networks which sell carbon units from projects providing efficient cookstoves to African households, called at the conference today for Europe to show "more leadership" on carbon markets at Cop 29. Article 6 negotiations failed last year to a large degree because of the EU's fears of insufficient environmental safeguards for the more regulated Article 6.4 mechanism. There was "big enthusiasm" at Cop 28 in Dubai last year about the work carried out by the Integrity Council for the Voluntary Carbon Market (ICVCM) and the Science Based Target Initiative (SBTI) to raise standards, Hania Dawood, contributor to the report and World Bank practice manager for climate finance and economics, said at the conference today. But this enthusiasm has had no impact on the market, Dawood said. Agreement is still lacking in ongoing Article 6 discussions on key operational issues related to transparency, environmental integrity and the avoidance of double counting of mitigation outcomes. But the long debates over Article 6 are precisely to ensure the mechanism does not suffer the same fate as the voluntary carbon market, said Swiss climate negotiator Simon Fellermeyer, who has also been a member of the Article 6.4 supervisory body. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
2024 RD production outlook up, 2025 down: EIA
2024 RD production outlook up, 2025 down: EIA
New York, 10 September (Argus) — The US Energy Information Administration (EIA) today upped its forecast for 2024 domestic renewable diesel (RD) production but continued to trim its projections for 2025 as challenging economics for refiners persist. The US is expected to produce on average 208,000 b/d of renewable diesel this year, EIA said Tuesday in its latest Short-Term Energy Outlook (STEO), up by around 1pc from August's forecast. Renewable diesel consumption is expected to hit 237,000 b/d this year, an increase of 1.3pc from the prior month's STEO. But next year, EIA now expects 236,000 b/d of renewable diesel production, down by 3.2pc from the prior forecast and down by 19.7pc from the agency's initial projection in January this year of 294,000 b/d. The agency is also forecasting renewable diesel consumption to reach 255,000 b/d in 2025, a 2.3pc decrease from its estimate last month. Renewable diesel producers have struggled over the last year, as ample supply of fuels used for compliance with government clean fuel programs has helped depress the prices of environmental credits and hurt production margins. More capacity has come online this year — with EIA recently pegging production of renewable diesel and related biofuels like sustainable aviation fuel at an all-time high of 4.9bn USG/yr in June — but uncertainty persists about whether future capacity additions will come on line as planned. EIA also upped its projection for US net imports of renewable diesel, raising its 2024 forecast by 7.1pc to 30,000 b/d and its 2025 forecast by 5.6pc to 19,000 b/d. While a federal tax credit starting next year is expected to discourage biofuel imports, since the incentive can only be claimed for fuel produced in the US, EIA's projections have inched upwards over the course of this year. Biodiesel output target up US biodiesel production this year is expected to average 105,000 b/d, up by around 1pc from August's STEO. US Biodiesel consumption should reach 121,000 b/d this year according to the EIA, down by 0.8pc from the prior forecast. For 2025, EIA raised its outlook for biodiesel production by 5.3pc to 100,000 b/d and for biodiesel consumption by 4.4pc to 94,000 b/d. Today's outlook also includes for the first time more granular data about biodiesel and renewable diesel "that better capture how biofuels are being consumed and the share of total distillate fuel they account for," EIA said. While the agency expects total distillate fuel oil consumption to fall slightly this year, biofuels will account for 9pc of that consumption, up from 8pc last year and 5pc in 2022. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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