Brazil falls short as Cop 27 nears

  • Spanish Market: Biofuels, Crude oil, Electricity, Emissions, Hydrogen, Natural gas, Oil products
  • 19/10/22

Brazil has struggled to meet its environmental goals and the country's total emissions may have risen last year

Brazil is heading to the UN Cop 27 climate talks in Egypt next month with little to celebrate, after the country failed to make good on its promise to reduce deforestation, while energy sector emissions have increased.

Brazil committed to cut deforestation by 15pc/yr to 2024, by 40pc in 2025 and 50pc in 2027 at last year's Cop 26 meeting in Glasgow. But the government has not announced a concrete plan to achieve the goal.

Brazil lost 13,235km² of Amazon rainforest between August 2020 and July 2021, up by nearly 22pc from 10,851km² during the previous period, data released in November by national space research institute Inpe show. Although the government has not yet released the official data for the August 2021-July 2022 period, preliminary figures produced by Brazilian environmental think-tank Imazon point to a 3pc increase.

Energy sector emissions rose last year, owing to the increased use of fossil fuels in power generation and declining ethanol output following a once-in-a-century drought that depleted hydroelectric reservoirs and trimmed the sugarcane crop. Emissions rose by 12.4pc to more than 445mn t, government-controlled energy research agency Epe estimates. The increase, combined with higher rates of deforestation, means that Brazil's total 2021 emissions are on track to rise when data are released later this year.

But Brazil has made some progress towards the creation of a voluntary carbon market. The government in May issued a decree that laid out the regulatory framework for a carbon and methane offset market, with the goal of becoming a major exporter of credits. The decree paves the way for the government to set targets for emissions reductions, and establishes a national registry that will certify the credits. Development bank Bndes has been working to set up the market, with plans to purchase up to 100mn reals ($19mn) of offsets. But there is a consensus that legislation needs to be approved for it to expand on a solid regulatory footing, and a draft version of the law remains stuck in committee.

Pledge of the world

Brazil is part of a global pledge to reduce methane emissions by 30pc by 2050 from 2020. The government has launched incentives to reduce methane emissions through increased investments in biomethane production and by extending tax benefits for new biomethane projects, on top of developing methane credits.

Environment minister Joaquim Leite has promised that the Brazilian delegation will not arrive in Cairo empty-handed. The government is installing 10 bases in the Amazon basin to combat illegal deforestation, and plans to replace old, inefficient heavy vehicles with electric or biofuel vehicles.

Brazil's future climate policy will hinge on the outcome of the 30 October presidential election. President Jair Bolsonaro would struggle to convince global leaders that he is serious about reducing deforestation, after environmental devastation reached 15-year highs during his government. His challenger and frontrunner, former president Luiz Inacio Lula da Silva, has a better track record when it comes to the Amazon and has promised to push a more environmentally friendly growth agenda if he is elected for a third term.


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21/06/24

Nigeria adds more oil blocks to 2024 licensing round

Nigeria adds more oil blocks to 2024 licensing round

Lagos, 21 June (Argus) — Nigeria's upstream regulator NUPRC has added 17 oil blocks to its 2024 licensing round and removed five, leaving the total on offer at 24, double the original number. The 17 additions are all deepwater blocks and have been added as a result of new data acquired. "We had indicated that the total number of blocks we are putting on offer is 12. Actually, our intention was to do more but we were constrained by availability of data," NUPRC chief executive Gbenga Komolafe said. Newly acquired data became available between 7 May and 11 June, leading to the round's offer being expanded, Komolafe said. Five blocks on the original list of 12 — PPL 3008, 3009, 267, 268 and PML 51 — have been withdrawn because of "ongoing litigation", according to NUPRC. The regulator did not elaborate on the litigation. It previously said that PPL 3008 and 3009 were formerly OPL 321 and 323, respectively, with the name change reflecting compliance with the provisions of petroleum industry legislation that came into effect in 2021. The blocks are located in the western Niger delta, close to the 44,000 b/d Abo field floating production, storage and offloading (FPSO) facility operated by Italy's Eni. Nigerian upstream operator Oando, which is in the process of acquiring one of Eni's three Nigerian subsidiaries for an undisclosed amount, has a 30pc working interest in OPLs 321 and 323 through its subsidiary Equator Energy. According to Oando, South Korea's KNOC is operator of a joint exploration work programme for the two blocks, which were awarded in Nigeria's 2005 licensing round before becoming the subject of litigation involving the Nigerian government, the operator and Oando's subsidiary. Meanwhile, PML 51, PPL 267 and PPL 268 are new blocks carved out from the former OML 122, NUPRC said. The shallow water OML 122 block, east of the Shell-operated Bonga field, has long been the subject of litigation and is listed on the website of local upstream firm Peak Petroleum as its sole asset. An industry source told Argus that the withdrawn oil blocks were included in the 2024 licensing round after the regulator enforced forfeiture rules against the companies previously linked to them. But legal challenges are not surprising, the source added. At the launch of its 2024–26 regulatory action plan in January, NUPRC said enforcement of "drill or drop provisions" in the 2021 legislation is one of its main commitments. Nigeria plans to conclude the 2024 licensing round with ministerial consent and contracting in January 2025. NUPRC has pushed back the deadline for submissions of pre-qualification documents from 25 June this year to 5 July and the start of data access and evaluation from 4 July to 8 July. By Adebiyi Olusolape Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan's Hokuriku starts biomass co-firing test runs


21/06/24
21/06/24

Japan's Hokuriku starts biomass co-firing test runs

Tokyo, 21 June (Argus) — Japan's utility Hokuriku Electric Power started coal and wood pellet co-firing test runs in April, the company said today. Hokuriku has been conducting co-firing test runs using coal and imported wood pellets at the 700MW Tsuruga No.2 unit in Fukui prefecture since April, with the 700MW Nanao-Ohta No.2 unit in Ishikawa prefecture to follow suit. The company also plans to increase biomass co-combustion rates at these two major coal-fired power plants to 15pc by the April 2030-March 2031 fiscal year, which means a total of 210MW of capacity and 1.5mn MWh/yr of output based on biomass-fired generation. Hokuriku expects its increased biomass co-firing rates to reduce CO2 emissions by 1mn t/yr compared with emissions from coal-firing for the same output, although it did not disclose the volume of wood pellets that will be burned. The company has been co-firing with coal and domestically-produced wood chips at Tsuruga since 2007 and at Nanao-Ohta since 2010, but its total biomass ratio was under 1pc. By Takeshi Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

PetroVietnam, South Korea’s Mubo partner on gas


21/06/24
21/06/24

PetroVietnam, South Korea’s Mubo partner on gas

Singapore, 21 June (Argus) — Vietnam's state-owned PetroVietnam (PVN) today agreed an initial financing deal with the Korea Trade Insurance Corporation, also known as Mubo, to strengthen and streamline South Korean companies' participation in natural gas projects with PVN and its subsidiaries. The $1bn package has both mid- to long-term financial tranches available if South Korean companies secure PVN's natural gas projects. PVN has plans to expand its gas field development, pipeline construction and gas-fired power plants in projects valued at around $12bn. This is aligned with the government's plan to achieve carbon neutrality by 2050 through increased reliance on gas-fired power generation. PVN manages at least four gas-fired power plants, two coal-fired power plants and two hydropower plants, with 5404MW of total capacity, according to the firm. State-owned PetroVietnam Gas (PV Gas) is at the forefront of the gas power sector projects. It operates the 1mn t/yr Thi Vai LNG terminal, commissioned in July 2023 and has started supplying gas-fired power generation to industrial customers since 15 March. Vietnam is expecting to import more LNG, in anticipation of the start-up of the 1.6GW Nhon Trach LNG thermal power plant in November this year. The plant is comprised of two units that could require as much as 775,000 t/yr of LNG each, assuming a generating efficiency of 60pc. It is also building the 3.6mn t/yr Son My LNG import terminal in Binh Thuan province in southcentral Vietnam. The first phase of commercial operations is scheduled for 2027. A second and third phase at Son My will lift's Vietnam's overall LNG import capacity to 10mn t/yr. PV Gas is to supply 70,000t of LNG to state-owned utility EVN for use at its 715MW Phu My 3 thermal power plant in April and May, marking the first LNG supplies to the county's power sector. Russia has also expressed interest to partner with Vietnam for oil and gas supplies, including LNG, following a state visit by Russian President Vladimir Putin to Hanoi on 20 June. By Naomi Ong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Indian regulator seeks oversight of LNG terminals


21/06/24
21/06/24

Indian regulator seeks oversight of LNG terminals

Mumbai, 21 June (Argus) — India's Petroleum and Natural Gas Regulatory Board (PNGRB) has issued a draft proposal for enhanced regulatory control over the country's existing and planned LNG import terminals. The draft regulations released earlier this month has PNGRB taking significant control of India's existing terminals, which includes approval of a new terminal or expansion of capacity following feasibility reports, as well as setting up pipeline infrastructure for regasified LNG. Each project would require a certification of registration by PNGRB and may even face penalties if there are any start-up delays. Developers will also need to publicly disclose their regasification tariffs and other charges for transparency. The regulations are seen as an effort to reverse dwindling utilisation rates at India's existing LNG import facilities, according to traders. The proposed regulatory framework may hinder new investments across India's gas sector more broadly by introducing the additional layer of oversight. PNGRB board of directors typically being short of members results in delays in approvals for existing projects or new products. The Indian Gas Exchange (IGX) small-scale LNG contract was delayed to launch in April this year from the initial plan of late 2023. The contract was needed to help supply gas consumers located in areas not served by pipelines. Plans to introduce LNG contracts for over one-month delivery on the IGX are also being held up because the board does not have sufficient staff to accelerate the speed of decision making, sources with knowledge of the matter said. Utilisation rates at India's seven LNG import terminals ranged from 15pc to 95pc in the April 2023-March 2024 fiscal year, with six operating at 30pc or lower despite a 16pc increase in LNG imports over the same period, oil ministry data show. Indian state-controlled LNG importer Petronet's 17.5mn t/yr Dahej LNG terminal had a 95pc utilisation rate, while Petronet's5mn t/yrKochi, state-controlled firm Gujarat State Petroleum's 5mn t/yr Mundra and state-controlled refiner IOC's 5mn t/yr Ennore terminals operated at 20pc or lower. India plans to add at least 25mn t of LNG import capacity in the next few years on top of its existing 47.7mn t/yr import capacity. India imports around 45pc of its daily gas needs, equivalent to around 190mn m³/d as LNG. The country plans to increase the share of gas in its energy mix to 15pc by 2030, which would increase overall demand to 600mn m³/d. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Canadian greenwashing bill passes


20/06/24
20/06/24

Canadian greenwashing bill passes

Calgary, 20 June (Argus) — A proponent of a major carbon capture and storage (CCS) project in Canada removed most information from its website this week after a federal bill targeting "greenwashing" successfully made its way through Parliament. The Pathways Alliance, a group of six oil sands producers, removed material from its website in response to Bill C-59 after it passed its third and final reading in Canada's senate on 19 June, citing "uncertainty on how the new law will be interpreted and applied." Parts of the soon-to-be law will "create significant uncertainty for Canadian companies," according to a statement by Pathways which is the proponent of a massive C$16.5bn ($12bn) CCS project in Alberta's oil sands region. The Pathways companies proposed using the project and a host of other technologies to cut CO2 emissions by 10mn-22mn t/yr by 2030. Project details and projections are now gone from the Pathways website, social media and other public communications as the pending law will require companies to show proof when making representations about protecting, restoring or mitigating environmental, social and ecological causes or effects of climate change. Any claim "that is not based on adequate and proper substantiation in accordance with internationally recognized methodology" could result in penalties under the pending law. Offenders may face a maximum penalty of C$10mn for the first offense while subsequent offenses would be as much as C$15mn, or "triple the value of the benefit derived from the anti-competitive practice." Invite to 'resource-draining complaints' The bill does not single out oil and gas companies, but the industry includes the country's largest emitters and has long been in the cross-hairs of the liberal government. Alberta's premier Danielle Smith says the pending bill will have the unintended effect by stifling "many billions in investments in emissions technologies — the very technologies the world needs." Construction of the Pathways project is expected to begin as early as the fourth quarter 2025 with operations starting in 2029 or 2030. The main CO2 transportation pipeline will be 24-36-inches in diameter and stretch about 400km (249 miles). It will initially tap into 13 oil sands facilities from north of Fort McMurray to the Cold Lake region, where the CO2 will be stored underground. Pathways includes Canadian Natural Resources, Cenovus, Suncor, Imperial Oil, ConocoPhillips Canada and MEG Energy, which account for about 95pc of the province's roughly 3.3mn b/d of oil sands production. Some producers took down content as did industry lobby group the Canadian Association of Petroleum Producers (CAPP), which highlighted the "significant" risk the legislation creates. "Buried deep into an omnibus bill and added at a late stage of committee review, these amendments have been put forward without consultation, clarity on guidelines, or the standards that must be met to achieve compliance," said CAPP president Lisa Baiton on Thursday. This "opens the floodgates for frivolous, resource-draining complaints." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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