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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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29/01/25

ECA's green export finance bypasses developing nations

ECA's green export finance bypasses developing nations

Berlin, 29 January (Argus) — The "greening" of export credit agency's (ECA) finance which occurred in the past decade has largely bypassed developing countries, with investments mainly flowing to higher-income countries, according to a study on ECA transactions. The study, carried out by researchers from the business schools HEC Lausanne, ETH Zurich and HEC Paris, shows that ECA energy finance going to lower-income countries dropped to below 30pc in 2022-23 from 47pc in 2013-15. ECAs, including export-import banks, are state-backed agencies that help national exporters finance deals abroad by providing guarantees or loans. The share of ECA renewables commitments — mostly offshore wind and, increasingly, green hydrogen — rose to around 40pc in 2022–23, from under 10pc in 2013. The complete phase-out of fossil fuel financing appears "distant", the researchers noted. While ECAs handle financing volumes "on a par with multilateral development banks such as the World Bank", the scope and direction of their energy investments have largely remained "opaque", the researchers said. The study is based on an analysis of almost 1,000 transactions between 2013-23 which financed energy-related infrastructure and were supported by ECAs. For some key ECA countries such as China or Canada, data is only partially available. The study also reveals "notable" disparities between countries. Most members of the Export Finance for Future coalition (E3F), a group of European countries committed to aligning their export finance with the Paris climate agreement, have introduced stricter fossil fuel exclusions and are boosting their renewable portfolios. At the same time, major players like South Korea, Japan, and China have maintained significant levels of oil and gas lending. OECD countries should introduce "more rigorous climate policies" and renew international cooperation, the researchers said, particularly with non-OECD countries such as China. The OECD — where ECA terms and conditions are negotiated — could relaunch the International Working Group on ECAs, they said, to help ensure that countries phasing out support for fossil fuels do not see their market shares grabbed by others. Better renewable investment support via ECAs could help scale up the new collective quantified goal (NCQG) on climate finance, set at a minimum of $300bn annually by 2035 at the last UN Cop 29 climate summit in November, the researchers said. And ECA mandates could also be broadened to accommodate the needs of lower-income regions. "It is high time for ECAs to complete the shift to renewable energy, and through carefully designed policies and international cooperation, become true catalysts for a rapid and just energy transition," lead author Philipp Censkowsky from HEC Lausanne said. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Sydney Airport transits up by 7pc in 2024


29/01/25
29/01/25

Sydney Airport transits up by 7pc in 2024

Sydney, 29 January (Argus) — Passenger numbers rose on the quarter and year at Australia's Sydney Airport in October-December, but remain behind pre-Covid-19 levels, meaning jet fuel demand is likely to be higher in 2025. Total transits at the nation's busiest airport were up by more than 500,000 on a year earlier in the quarter, aided by a 7pc rise in international passengers, while domestic numbers were up by 4pc. Numbers were also up in 2024 compared with 2023's annual figure, again aided by a 12pc rise in international terminal passengers, while domestic numbers rose by just 4pc. Total transits of 41.39mn were 7pc higher than a year earlier but are still 7pc below 2019 levels, the last full year before pandemic-era travel restrictions resulted in Sydney's figures dropping by 75pc in 2020 . Passenger traffic at Australia's Melbourne Airport — the nation's second busiest — rose by 7pc on the year in 2024 to 35.75mn , 5pc below 2019's 37.45mn. Jet fuel sales rose by 11pc in the first 11 months of 2024 to 160,000 b/d, with November the latest month for which data from Australian Petroleum Statistics are available. The figure was 161,000 b/d in January-November 2019, suggesting further growth in jet fuel demand is possible this year. By Tom Major Sydney Airport passenger traffic mn Oct-Dec '24 Jul-Sep '24 Oct-Dec '23 2024 2023 2019 q-o-q % ± y-o-y % ± 2024 vs 2023 % ± Total 11 10.3 10.5 41.4 38.7 44.4 6 5 7 International 4.4 4 4.1 16.3 14.5 16.9 8 7 12 Domestic 6.7 6.3 6.4 25.1 24.1 27.5 5 4 4 — Sydney Airport Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US tariffs could shift Mexican HSFO to Panama


28/01/25
28/01/25

US tariffs could shift Mexican HSFO to Panama

New York, 28 January (Argus) — Proposed US tariffs on Mexican goods would raise US costs for Mexican high-sulphur fuel oil (HSFO), potentially shifting flows of the country's marine fuel to the Central American bunkering hub of Panama. US president Donald Trump has said he will impose 25pc import tariffs on goods from Mexico. US oil companies are asking Trump to exclude oil from tariffs , but it is unclear whether Trump will oblige. Mexico's residual fuel oil exports reached a record high of 218,059 b/d in the first 10 months of 2024, according to data from Mexican state-owned Pemex. The US took most of Mexico's residual fuel oil exports during that period, importing 145,830 b/d from its neighbor, including 124,341 b/d that went to the US Gulf coast, according to US Energy Information Administration data. Should Trump implement the 25pc tariffs, companies bringing Mexican residual fuel oil to the US could reduce bids in effort to recoup their tariff costs. But lower bids could prompt Mexican exporters to redirect some of residual fuel oil to buyers in Panama, northwest Europe and Singapore. If the price makes sense, Panama bunker suppliers could displace some of their US Gulf coast import barrels with Mexican barrels, as Panama suppliers "are constantly out there hunting for the best price available in the international market", a Panama supplier told Argus . Panama's HSFO bunker demand averaged 25,466 b/d (1.19mn t) in January-October 2024. The country does not have an operational refinery and is dependent on imports for all its oil product needs. Panama received the bulk of its residual fuel oil shipments from Mexico, the US Gulf coast and Peru, according to ship tracking data from Vortexa. Trump has also promised unspecified actions to take control of the US-built Panama Canal in response to what he says has been unfair treatment of US ships, a claim that Panama president Jose Raul Mulino has rejected. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US still eyes 1 February for Canada, Mexico tariffs


28/01/25
28/01/25

US still eyes 1 February for Canada, Mexico tariffs

Washington, 28 January (Argus) — President Donald Trump is still keen to impose tariffs on all imports from Canada and Mexico as soon as 1 February, the White House said today. Trump in multiple public comments since taking office on 20 January said he was still considering a 25pc tariff on Canada and Mexico, even though his administration has yet to provide any details on the proposal. Trump spent much of his meeting on Monday with Republican lawmakers at their annual retreat in Florida blasting Canada and Mexico over their allegedly unfair trade practices. Tariffs should become a key source of income for the US government, just as they were in the nineteenth and early twentieth century before being supplanted by income taxes, Trump told the lawmakers, who are looking at ways to extend tax cuts enacted during his first term and set to expire at the end of 2025. Trump also said he would impose tariffs on all imported computer chips, semiconductors and pharmaceuticals. Trump's messaging on China tariffs has been more mixed. He said last week he would go on with his initial plans to impose a 10pc tax on all imports from China, but he also said he preferred to avoid a trade war with Beijing. An executive order Trump signed on 20 January lays out a process suggesting timelines of June-July for imposing tariffs on the US' key trading partners, with no reference to the 1 February deadline. But Trump has the legal authority to impose tariffs on imports from any country by a variety of executive actions and with very short notice, as he demonstrated over the weekend during a high-profile confrontation with Colombia over deporting migrants from the US. Trump told the lawmakers on Monday that he expects to wield the threat of tariffs as a negotiating tool often, because even "a very strong country" like Colombia caved in to his demands. Canada and Mexico appear to be preparing for a protracted trade confrontation with the US if Trump follows through on his threat, with retaliatory measures targeting specific US products and companies. The looming faceoff has unnerved the US oil producers and refiners, which are warning of severe impacts to the integrated North American energy markets if taxes are imposed on flows from Canada and Mexico to the US. Industry group American Petroleum Institute is lobbying the Trump administration to exempt crude and other energy products from any tariffs he plans to impose. Trump last week shrugged off the arguments from the US energy industry about potential negative impacts from confronting Canada and Mexico. "We don't need their oil and gas," Trump said. "We have our own, we have more than anybody." Almost all of Mexico's roughly 500,000 b/d of crude shipments to the US through November are waterborne, targeting Gulf coast refiners, and can be diverted to Asia or Europe. Canadian producers have much less flexibility — more than 4mn b/d of Canada's exports are wholly dependent on pipeline routes to and through the US. Only around 900,000 b/d can be directed away from the US via the recently expanded Trans Mountain pipeline system to the Pacific coast, although late-2024 flows were actually closer to 400,000 b/d, split evenly between the US west coast and Asia. Conversely, many refineries in the US midcontinent have no practical alternative to the Canadian crude. US gasoline prices would move higher by 30-70¢/USG if the 25pc tariffs that Trump has threatened were applied to Canada's oil, Canada's TD Bank projects. Trump's commerce secretary nominee Howard Lutnick will face a confirmation hearing at the Senate Commerce committee on Wednesday, with trade wars likely to feature high among the questions lawmakers direct at him. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Traders expect low uptake of 5-year Latvian gas storage


28/01/25
28/01/25

Traders expect low uptake of 5-year Latvian gas storage

London, 28 January (Argus) — Market participants expect limited demand for a new five-year gas storage product that Latvian operator Conexus will begin offering later this year. Conexus will offer a five-year product for its 25TWh Incukalns storage site for the first time ever on 11 February. This five-year offering will be in addition to the one and two-year products already previously offered by Conexus, along with the storage transfer and interruptible capacity products. All market participants surveyed by Argus expect weak demand for the five-year product, mostly because of unfavourable summer-winter spreads and traders' lack of willingness to commit to bookings that far ahead. Several respondents highlighted that only a limited pool of firms would be interested in planning their activities five years out. Most traders "do not look to the so distant future in the gas storage business", one said. "Not so many market players are ready to tie themselves to local gas markets for five storage cycles in a row," another said. Several respondents criticised the product's rules, with one noting that it could even lead to storage utilisation falling, "considering the fines for inventory transfer between storage seasons". Traders would try to "squeeze out the pipeline/LNG supply potential, rather than over-injecting", they added. Another said they were concerned that the share of the overall storage capacity allocated to the five-year product was "too high" and would make it possible for some market participants to "hijack this very much needed capacity in a similar way" to what happens at the Latvian-Lithuanian border point of Kiemenai. Several traders have expressed frustration that annual capacity at Kiemenai has been fully booked but only a small part is at times used , blocking other shippers from accessing the capacity and resulting in low utilisation rates. Another trader highlighted the product's limitation of only allowing a user to transfer up to 50pc of the total booked capacity from one storage cycle to the next without having to pay additional fees. The previous set of capacity products has been "tested for years and proven to be working", another market participant said, arguing that "imperfect but certain conditions are better than uncertain ones". One trader pointed out that a lack of interest in the five-year product could increase demand for the traditional one and two-year products, increasing the premium at these auctions further. Two other traders pointed out that given prevailing inverted summer-winter spreads, there is little financial incentive to book any capacity products, let alone make a five-year commitment. Ultimately, the "behaviour of local players is and will continue to be influenced by the closest summer-winter spread and the difference between this spread and the one-year storage tariff, not by long-term storage capacity of injection/withdrawal limits," one concluded. By Brendan A'Hearn Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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