Colombia launches green taxonomy

  • Spanish Market: Biofuels, Electricity, Emissions, Hydrogen
  • 13/04/22

The taxonomy aims to attract green finance to the country in its effort to mitigate climate change, writes Jacqueline Echevarria

Colombia has launched a green taxonomy that aims to boost green finance in the country. It will help participants in the public and private sectors identify and evaluate investments that can help meet environmental objectives and which are aligned with the country's commitments and policies.

The taxonomy, launched by President Ivan Duque on 11 April during a visit to the New York Stock Exchange, focuses on mitigation and adaptation to climate change, conservation of ecosystems and biodiversity, water management, soil management, circular economy and pollution prevention and control.

The document outlines seven sectors, assets and economic activities that contribute to the environmental goal of mitigating climate change — energy, construction, waste management and emissions capture, water supply and treatment, transportation, information and communication technologies, and manufacturing.

The taxonomy also highlights three sectors of land use — livestock, agriculture and forestry. These sectors together are responsible for 59pc of Colombia's greenhouse gas (GHG) emissions, it says.

The taxonomy is aimed at helping Colombia meet its goal of reducing greenhouse gas emissions by 51pc by 2030 and hitting carbon neutrality by 2050.

The green taxonomy was formulated by the finance ministry with the support of external entities including the World Bank's finance arm IFC.

"The aim was to bring the EU taxonomy to a local context by either dividing a number of activities that were very similar to the EU but also developing some additional details that were fit for the country," says the head of the IFC's climate finance programme for Latin America and the Caribbean, Marcela Ponce, who worked on the project.

Other countries in the region are working with the IFC on developing green taxonomies. "We are also working with the environment ministry in Peru… Chile has started working on defining the governance of a potential taxonomy," Ponce adds. "This is very important for governments because they committed to net zero targets," she says.

Energy implications

The taxonomy identifies 18 economic assets and activities in the energy sector that have a substantial contribution to climate change mitigation, from renewable electricity generation to green hydrogen production and district heating. The energy sector generates 10pc of GHG emissions in the country, the document says.

The taxonomy sets some criteria to determine whether an energy investment is green or sustainable. Solar, wind and ocean energy generation are eligible. But for other generation, heating and cooling activities, it is necessary to carry out a GHG life-cycle study. Facilities operating with life-cycle emissions of less than 100g CO2 equivalent/kWh are eligible, the document says. Renewable energy purchase activity is also eligible if it is subject to a long-term power purchase agreement and has a renewable energy certificate.

On hydropower, facilities with a power density of less than 5W/m² must demonstrate that they operate with life-cycle emissions of less than 100g CO2e/kWh. Geothermal or cogeneration facilities have the same threshold.


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28/04/24

Industry leaders urge realism in green hydrogen push

Industry leaders urge realism in green hydrogen push

Dubai, 28 April (Argus) — Hydrogen and its derivatives will have a critically important role to play in accelerating the energy transition but policymakers need to be more realistic given that many of the technologies are still in their infancy, energy industry leaders from the Middle East and Europe said Sunday at a special meeting of the World Economic Forum in the Saudi capital Riyadh. "The market is a challenge," UAE energy minister Suhail al-Mazrouei said. "There is development of the market, but are we there yet? No. At the same time, are we serious about our production? I would say yes. It's between planning something, and getting the result you are aiming for." The UAE is planning to produce 1.4mn t/yr of hydrogen by 2031, more than 70pc of which will be green hydrogen, al-Mazrouei said. In the longer term the country aims to build its hydrogen capacity to 15mn t/yr by 2050. "Clean energy is something we decided to venture into 17 years ago when we began investing in the likes of [UAE state-owned renewables firm] Masdar and started thinking about what would happen after we export the last barrel of oil," UAE energy minister Suhail al-Mazrouei said. "What we did first is regulate and put a strategy of how much to produce." Al-Mazrouei's Saudi counterpart, Prince Abdulaziz bin Salman, voiced similar concerns. "We don't mind partnering with everybody… With the Koreans, the Japanese, our friends the UAE… but there are challenges," he said. "There is a lack of clarity on the policies, a lack of clarity on the receiving or consumer end, a lack of clarity on the incentives and a lack of clarity around what it takes to develop these technologies." Arguably more prohibitive is the "economics" of new energies such as hydrogen, he said. The cost of green hydrogen today is "between roughly $250-300/bl of oil equivalent," Prince Abdulaziz said. "What kind of a business acumen would choose to buy at $250-300/bl?" Al-Mazrouei agreed that costs are too high. "We cannot just treat the consumers as if they are ready to just pay double or triple the price [of conventional energies today]." Let's be serious The EU has set ambitious targets on renewable hydrogen. In 2022, the bloc doubled its 2030 production target to 10mn t/yr, from 5.6mn t/yr previously, and it is also working towards a separate pledge to import another 10mn t/yr by the same date. The production target is an unrealistic goal, according to the Saudi energy minister. "Those projects that have crossed the finishing line only come to 400,000t ꟷ around 4pc of the target," Prince Abdulaziz said. "How is it conceivable that in 2024, only 4pc has been achieved? How can people imagine that 10mn t/yr can be achieved?" TotalEnergies chief executive Patrick Pouyanne, who was speaking on the same panel, was even more blunt in his assessment, describing the EU's target as "impossible" and "not in reality". "Let us recognise that we are still at the infancy stage, and stop speaking about 10mn t, 20mn t, just to the media. It makes no sense," Pouyanne said. "Let's just be serious about it and find the right roadmap. Yes, we probably won't reach our target by 2030, but that's not a problem. It's more important to take steps and spend the money economically, to give them affordable and clean energy." By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

High inventories pressure Brazil biodiesel prices


26/04/24
26/04/24

High inventories pressure Brazil biodiesel prices

Sao Paulo, 26 April (Argus) — Logistical differentials for Brazilian biodiesel contracts to supply fuel distributors in May and June fell from March and April values, reflecting higher inventories and a bumper crop of soybeans for crushing, which could increase vegetable oil production. The formula for the logistics differential of plants includes the quote of the soybean oil futures contract in Chicago, its differential for export cargoes in the port of Paranagua and the Brazilian real-US dollar exchange rate. It is the portion in the pricing linked to producers' margin. Negotiations for May and June started with plants seeking higher values to recover part of the losses incurred by unscheduled stops , the result of retailers' delays in collecting biodiesel. But the supply glut has not abated, leading to a drop in prices. With higher inventories in the market, fuel distributors stuck close to acquisition goals established by oil regulator ANP for the May-June period. Sales are expected to gain traction over the next two months, as blended diesel demand traditionally gets a seasonal boost from agricultural-sector consumption linked to grain and sugarcane crops. The distribution sector expects an extension of the current supply-demand imbalance, exacerbated by significant volumes of imported diesel at ports and lower-than-expected demand. The situation has generated concern among many participants, who see this trend as a potential sign of non-compliance with the biodiesel blending mandate. ANP data show that the compliance rate with the Brazilian B14 diesel specification dropped to 83.4pc in April from 95.2pc in March, reaching the lowest level since the 2016 start of monitoring. Non-compliance with the minimum biodiesel content accounted for 67pc of the infractions recorded during the period compared to a historical average rate of 47pc. The recent end to a special tax regime for fuel importing companies offered by northern Amapa state's secretary of finance should end a significant source of diesel price distortions and help rebalance supply in the country. Variations The steepest decline in differentials took place in northeastern Bahia state, where premiums for the period ranged from R600-830/m³ (44.35-61.35¢/USG), down from R730-1,020/m³ in the March-April period, according to a recent Argus survey. In the northern microregion of Goias-Tocantins states, the premium range also dropped by around R142/m³ to R300-535/m³ from R440-680/m³. By Alexandre Melo Brazil biodiesel plant differentials R/m³ May/June March/April ± Low High Low High Rio Grande do Sul 110 380 280 450 -120 Sorriso-Nova Mutum 50 340 220 350 -90 Cuiaba-Rondonopolis 80 405 280 450 -123 Northern of Goiás-Tocantins 300 535 440 680 -142 Southern of Goias 350 500 450 650 -125 Parana-Santa Catarina 150 450 400 480 -140 Bahia 600 830 730 1,120 -210 Source: Argus survey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Etanol hidratado impulsiona início da safra 2024-25


26/04/24
26/04/24

Etanol hidratado impulsiona início da safra 2024-25

Sao Paulo, 26 April (Argus) — A produção de etanol no Centro-Sul aumentou 7,2pc na primeira quinzena de abril em relação ao ano passado, com produtores ainda favorecendo o hidratado em meio à demanda crescente. As usinas da região entregaram 841.000m³ ao mercado na primeira quinzena da safra de 2024-25, em comparação com 784.000m³ no mesmo período do ano anterior, segundo os dados mais recentes da União da Indústria de Cana-de-Açúcar e Bioenergia (Unica). A produção de etanol hidratado subiu 39pc e impulsionou a alta anual, totalizando 693.000m³. Já o processamento de anidro, utilizado como mistura na gasolina, caiu 48pc, para 174.000m³. As usinas permanecem destinando mais matéria-prima para o E100, em um cenário de paridade favorável para o biocombustível frente à gasolina na bomba. O hidratado está mais vantajoso para os motoristas em 80pc do mercado de combustíveis leves, disse a Unica. As plantas do Centro-Sul venderam 1,3 milhão de m³ de etanol para o mercado doméstico em abril, salto de 41pc na variação anual. As vendas de hidratado representaram 902.355m³ deste total, alta de 61pc, enquanto as de anidro subiram 14pc, para 448.431m³. Já as exportações totalizaram 52.104m³, queda de 6,2pc. O mix de produção na quinzena foi de 56,4pc para o etanol e 43,6pc para o açúcar, em comparação com 62pc para o biocombustível no mesmo intervalo em 2023. No período, a moagem de cana-de-açúcar avançou 14pc, para 15,8 milhões de t, à medida que a temporada inicia suas operações. Até 16 de abril, 171 usinas estavam operando no ciclo de 2024-25, número maior do que as 166 no mesmo intervalo do ano anterior. A Unica espera que mais 54 unidades recomecem as atividades durante a segunda metade do mês. O etanol à base de milho representou 32pc do volume total produzido na primeira parte de abril, somando 270.500m³, crescimento de 12pc na comparação anual. Por Laura Guedes Envie comentários e solicite mais informações em feedback@argusmedia.com Copyright © 2024. Argus Media group . Todos os direitos reservados.

Lyondell Houston refinery to run at 95pc in 2Q


26/04/24
26/04/24

Lyondell Houston refinery to run at 95pc in 2Q

Houston, 26 April (Argus) — LyondellBasell plans to run its 264,000 b/d Houston, Texas, refinery at average utilization rates of 95pc in the second quarter and may convert its hydrotreaters to petrochemical production when the plant shuts down in early 2025. The company's sole crude refinery ran at an average 79pc utilization rate in the first quarter due to planned maintenance on a coking unit , the company said in earnings released today . "We are evaluating options for the potential reuse of the hydrotreaters at our Houston refinery to purify recycled and renewable cracker feedstocks," chief executive Peter Vanacker said on a conference call today discussing earnings. Lyondell said last year a conversion would feed the company's two 930,000 metric tonnes (t)/yr steam crackers at its Channelview petrochemicals complex. The company today said it plans to make a final investment decision on the conversion in 2025. Hydrotreater conversions — such as one Chevron completed last year at its 269,000 b/d El Segundo, California, refinery — allow the unit to produce renewable diesel, which creates renewable naphtha as a byproduct. Renewable naphtha can be used as a gasoline blending component, steam cracker feed or feed for hydrogen producing units, according to engineering firm Topsoe. Lyondell last year said the Houston refinery will continue to run until early 2025, delaying a previously announced plan to stop crude processing by the end of 2023. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Germany urges closer NDC-climate finance link


26/04/24
26/04/24

Germany urges closer NDC-climate finance link

Berlin, 26 April (Argus) — German federal chancellor Olaf Scholz today stressed the need for nationally determined contributions (NDC) to the Paris climate deal to provide a framework and incentive for climate finance. NDCs — emissions cut targets which countries must draw up and regularly update under the Paris agreement — should provide "clear roadmaps for decarbonisation" to incentivise and reassure private investors, Scholz said at the 15th Petersberg climate dialogue in Berlin, a forum which paves the way for the UN Cop climate conference negotiations later this year. Drawing up an NDC is also about creating good framework conditions for investments in the individual countries themselves, Scholz said. In updating their NDCs, countries have an opportunity to secure investments in green technologies, he said. "Private investors are concerned about a reliable regulatory framework and good governance." Scholz echoed German foreign minister Annalena Baerbock's remarks made at the opening yesterday, when she proposed an "interlocking" of countries' NDCs with investment plans. Baerbock stressed the idea goes beyond getting the countries together to improve their NDCs. It would, for instance, ensure that fossil fuel producers announcing plans to reduce their production do not get penalised by a cut to their credit rating on the financial markets, she said. And it would be about facilitating matchmaking between the private sector in developed countries, and bringing together the ambitions enshrined in the NDCs with instruments ensuring they can be financed, Baerbock said. She gave the example of Barbados, which she said is using its NDC "not just as a national climate action plan but also as a national investment plan", by creating a bank that brings together various factors "linking climate-policy planning, project implementation, and public and private financing". Both Scholz and Baerbock reiterated calls for larger developing countries that have "significantly" contributed to emissions in the past 30 years, and which have the financial means to contribute, to do so. Cop 29 will be held in Baku, Azerbaijan, in November. Finance will be a key topic as countries must decide on a new global goal, the so-called New Collective Quantified Goal (NCQG) on Climate Finance, to replace the pledge missed by developed countries to give $100 bn/yr to developing countries by 2020. Baerbock called for a new annual climate finance budget for developing countries of $1 trillion. Germany plans to modernise its bilateral debt conversion programme, Scholz said. "This is not a panacea, but vulnerable middle-income countries that are willing to reform could also be eligible for climate debt conversion in the future," he said. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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