Cop 27: Fossil fuels absent in first cover document

Spanish Market: Coal, Crude oil, Emissions, Natural gas, Oil products
15/11/22

Fossil fuels have not been included in a first, bare-bones document listing all possible elements of the Cop 27 UN climate summit cover decision to be adopted at the end of the conference.

The document, described as a 'non-paper' by the UNFCCC, is just a bullet-point list of potential topics that could be included in the final Cop 27 decision. It was released late on 14 November, for ministers to start negotiations on the final text.

Coal particularly and fossil fuels more generally are notably absent, although the EU said it expects the mitigation section of the text to build on what was agreed at Cop 26 in Glasgow. Mitigation refers to efforts to reduce emissions.

The Glasgow Climate Pact signed at Cop 26 last year called on countries to accelerate efforts towards the phase-down of unabated coal power and the phase out of inefficient fossil-fuel subsidies. At this Cop, India last week pushed for a phase down of all fossil fuels to be included in the cover text, rather than just coal. Asked if Europe would support India's call, European Commission executive vice-president Frans Timmermans said that "we are all in support of any call to support a phase down of fossil fuels, but we have to make sure that this call does not diminish the early agreement we had on phasing down coal".

"If it comes on top of what was agreed in Glasgow, then the EU will support India's proposal", he said, adding it should not divert "attention and efforts to phase down coal as we have agreed last year in Glasgow".

India, with China, last year secured a last-minute watering down of the language on coal in the Cop 26 cover text.

The EU expects the Sharm el-Sheikh cover text will pick up on the references to fossil fuels, and the phase down of unabated coal, that were made in the Glasgow Climate Pact, but these have yet to be included in the text.

The released list also mentions the "urgency of action to keep 1.5°C in reach". Although some nations may be pushing for this mention to be omitted this year, a large number of countries at Cop have urged no going back on commitments taken in Paris and Glasgow, and have reiterated the urgent need to align emission pledges and actions with the 1.5°C goal. The UN's 2015 Paris Agreement aims to limit global warming to well below 2°C above pre-industrial levels, and ideally to 1.5°C.

The first cover document also mentions the $100 bn/yr finance goal, its status and progress on the target. Egypt wants to see progress on the headline finance target, which developed countries were supposed to meet by 2020 to help developing nations hit their climate goals. The OECD estimates the goal could be reached in 2023.

The document also says the cover decision will reflect the main outcomes on loss and damage, the mitigation work programme and the global goal on adaption. So far, countries remain divided on what progress should look like on the contentious issue of funding arrangements for loss and damage — which many view as key to move forward with other negotiations.

By Caroline Varin

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15/01/25

Seoul may scale down nuclear expansion plans

The delay to finalising the country's nuclear goals may make it unfeasible to build sufficient capacity before current assets expire, writes Evelyn Lee London, 15 January (Argus) — South Korea's energy industry has faced a whirlwind of challenges since the impeachment of now-suspended president Yoon Suk-Yeol, with the political turmoil stalling a crucial review of its energy strategy in the national assembly. The government is now seeking to scale down its nuclear expansion ambitions in order to hasten the plan's review. Yoon's surprise declaration of martial law last month was reversed within six hours owing to bipartisan political pressure and widespread protests, which resulted in a national assembly vote in favour of the president's impeachment and his subsequent arrest on 15 January. Yoon is suspended from office pending a ruling by the country's constitutional court — due within six months of the impeachment vote on 14 December. If six out of nine justices vote to uphold the impeachment, Yoon will be removed from office and presidential elections will be held within 60 days. South Korea acted quickly following the martial law declaration, but government action has overall been slowed down by the political turmoil — including on energy policy. The latest draft of its long-overdue electricity plan was completed in June and scheduled to be submitted to the Trade, Industry, Energy, Small and Medium-sized Enterprises and Start-ups Committee of the national assembly by the end of last year. But the committee has suspended general meetings since 19 December, according to schedules released on its website. The long-term electricity plan is renewed every two years and serves as a basis for business planning, especially for state-controlled companies. Gas incumbent Kogas' procurement strategy has historically reflected the electricity plan. The latest draft lays out Seoul's intention to build three more nuclear reactors by 2038. But planning and construction would take nearly 14 years, according to the government, so the delay in finalising the plan could result in a power supply shortfall by 2038 — when 9.15GW of existing nuclear capacity is set to expire. Nuclear fallout The government may opt to scale down its nuclear expansion ambitions in order to get the draft electricity plan seen by the committee — which must review the plan, although it is not required to approve it. And less nuclear capacity could increase the need for more gas-fired capacity. The energy ministry pledged on 8 January to finalise the plan by June, after which it will pass related bills including the power grid act, but it did not say how it intends to progress the plan in the national assembly. The Korean Nuclear Society (KNS) responded on 9 January, accusing the government of allegedly planning to revise its nuclear objectives so it can speed up the plan's progress. The government's intent to revise its nuclear goals "without any scientific basis" shows that the electricity plan is just a "political bargaining tool that can vary depending on political interests", the KNS said. This threatens the stability of the South Korean electricity market, it added. The ministry did not respond to Argus' request for comment. But the alleged revision may not have been solely driven by political motives. Seoul may have missed the window of opportunity for approving new nuclear capacity in the timescale required, judging by the 14-year timeline for planning and construction. It remains unclear how the government would offset any reduction in its nuclear ambitions, but South Korea's slow grid development may leave little alternative other than boosting gas-fired capacity. Under the current draft electricity plan, gas-fired output would account for a 25.1pc (160.8TWh) share of total generation in 2030 and 11.1pc (78.1TWh) in 2038, up from 22.9pc (142.4TWh) and 9.3pc (62.3TWh), respectively, in the previous plan. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

IEA nudges global refinery runs forecast higher

15/01/25

IEA nudges global refinery runs forecast higher

London, 15 January (Argus) — The IEA has made a marginal increase to its forecast for global refinery runs this year, driven by the "recent resilient performance" of US and European refineries. The Paris-based energy watchdog now expects global crude throughput of 83.4mn b/d in 2025, whereas its previous projection was 83.3mn b/d. At the same time, it has trimmed its estimate for 2024 runs by 20,000 b/d to 82.7mn b/d on the back of downgrades in Asian throughput. The slight upgrade to the 2025 forecast assumes that US and European refineries extend their recent resilience through the first quarter. But "even as we turn more positive on the short-term outlook, it is important to acknowledge that European refineries remain under pressure from shifting trade patterns, rising carbon costs, higher energy outlays and looming capacity closures", the IEA said today in its latest Oil Market Report (OMR). OECD throughput is forecast to fall by 370,000 b/d to 35.7mn b/d this year "as capacity closures in the United States and Europe drag on activity levels", the agency said. But it marks an upwards revision from last month's projection for the OECD of 35.6mn b/d in 2025. The IEA sees non-OECD refinery runs rising by 1mn b/d to 47.6mn b/d this year. This is a downwards adjustment of 80,000 b/d from the last OMR, but the IEA also trimmed its estimate for 2024 non-OECD throughput by the same amount — so the growth rate is unchanged. The 2025 forecasts for India, China, Pakistan, the Philippines and Singapore have all been cut compared with last month's OMR. The IEA now expects Chinese runs to rise by 240,000 b/d to 14.8mn b/d this year. Last month's forecast had Chinese throughput increasing to 14.9mn b/d. "2025 could prove to be another challenging year for Chinese independent refineries, despite increased crude import quotas, as higher import duties squeeze profitability and recent US sanctions impact access to Russian and Iranian barrels," the agency said. The IEA has raised its 2025 forecast for Nigerian throughput by 60,000 b/d to 460,000 b/d, citing the restart of state-owned NNPC's Warri and Port Harcourt refineries and the start-up of Dangote's 150,000 b/d residue fluid catalytic cracking unit. But it noted that challenges remain in terms of crude supply. By Josh Michalowski Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tariff war is a lose-lose proposition: Canada

15/01/25

Tariff war is a lose-lose proposition: Canada

Calgary, 15 January (Argus) — Any retaliation by Canada to tariffs imposed by the US would be designed to apply political pressure, the country's energy minister said today in Washington, DC, but a potential tariff war between the two countries is a lose-lose proposition. "We are not interested in something that escalates," Canada's minister of energy and natural resources Jonathan Wilkinson said in a panel discussion at the Woodrow Wilson Center. But until tariffs are imposed, Canada does not know how it will need to respond. Canada will likely focus on goods that are "important to American producers," but also those for which Canada has an alternative. "The point in the response is to apply political pressure," said Wilkinson, who advocated for stronger trade ties between the two countries byway of energy and critical minerals. US president-elect Donald Trump plans to impose a 25pc tariff on all imports from both Canada and Mexico when he takes office on 20 January. So far he has not signaled any plans to exempt any goods, including oil and gas. Alberta's premier Danielle Smith and now Wilkinson are promoting the flow of more crude to ensure North America's energy security. "We can enhance the flow of Canadian crude oil from Alberta," said Wilkinson by boosting capacity on pipelines like Enbridge's 3.1mn b/d Mainline crude export system. "The US cannot be energy dominant without Canadian energy." The incoming administration would be open to such pipeline expansions, said Heather Reams, president of Washington-based non-profit Citizens for Responsible Energy Solutions. "It's something that the Trump administration and Republican members in Congress would be interested in revisiting to ensure that there is a steady flow of the energy that's needed to fuel our mutual economies," Reams said on the panel. Enbridge's Mainline moves Canadian crude from Alberta to the US Midcontinent, where Wilkinson expects consumers will be faced with higher gasoline prices — adding as much as 75¢/USG at the pump — should tariffs be imposed. Americans could also see higher food prices if tariffs are put on potash, a fertilizer mined in Saskatchewan and used by US farmers, she said. Development of critical minerals like germanium, gallium and others should be pursued further to minimize the US' exposure and dependence on China, according to Wilkinson, echoing comments made by Ontario premier Doug Ford on 13 January in his own appeal to enhancing trade ties with the US. "We cannot be in a position where China can simply manipulate the market," said Wilkinson, citing that country's dumping of nickel. "We should form a true energy and minerals alliance." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Q&A: Waste-based biofuel to benefit Dutch bunkering

15/01/25

Q&A: Waste-based biofuel to benefit Dutch bunkering

New York, 15 January (Argus) — With marine fuel greenhouse gas (GHG) emissions regulations tightening, shipowners are looking for financially feasible biofuel options. Argus spoke with Leonidas Kanonis , director for communications and analysis at European waste-based and advanced biofuels association (Ewaba), about biofuels for bunkering. Edited highlights follow. Do you think that the Netherlands government will scrap the HBE-G bio-tickets that it has been allocating for marine fuel for use by ocean-going vessels? HBEs are not disappearing in 2025, and the Dutch system will continue as normal, including HBE-G bio tickets. In 2026, the plan is that HBEs will be scrapped altogether, when the Dutch system switches to an Emissions Reduction Obligation. The Emissions Reduction Obligation would be a transposition of the Renewable Energy Directive (REDIII) spanning all transport sectors and HBEs would not exist under such a system. Annex IX of REDIII lists sustainable biofuel feedstocks for advanced biofuels (Part A) and waste-based biofuels (Part B). Under the proposed REDIII, EWABA is advocating those fuels made from feedstocks listed under Annex IX B, which include used cooking oil and animal fat, be allowed into the sustainability criteria for maritime transport. Allowing only "advanced" feedstocks listed under Annex IX A would put the Dutch bunkering sector at a cost-and-supply disadvantage compared with non-EU ports. The Annex IX B exclusion could also put the Netherlands in danger of not hitting its maritime sector target, which rises from a 3.6pc reduction in GHGs in 2026 to 8.2pc in 2030. Annex IX B biodiesel can bridge the gap while advanced technologies such as ammonia and hydrogen are more widely deployed. The EU imposed anti-dumping taxes on Chinese biodiesel imports in mid-August. What has been the effect on European biodiesel producers? Following the Chinese anti-dumping duties (ADDs), we have seen an uptick in domestic European waste-based biodiesel prices, widening the spread between the end product and the European domestic feedstock itself. On the other hand, on 1 December, the Chinese government cancelled the export tax rebate for used cooking oil (UCO), disincentivizing Chinese exporters and making Chinese UCO more expensive for European buyers. It is still early to say what the trend for 2025 will be, but as an industry we are optimistic about increased European biodiesel production. Over the past two years, our members have been suffering, mostly operating at sub-optimal production levels or forced to shut down production. In 2025, there is reserved optimism that the market will improve due to: the ADDs to Chinese biodiesel, the 2025 FuelEU maritime regulation, and the introduction of the EU Database for Biofuels introduced in 2024, which tracks the lifecycle of biofuels and strengthens transparency. Are there other threats next year that are facing the European waste-based and advanced biofuels producers? Overall challenges for the market would be demand for feedstock from competing industries, largely the sustainable aviation fuel (SAF) market with the introduction of the ReFuelEU mandate, but also competing regions as the US imported huge amounts of waste feedstocks from China last year, while southeast Asian and UAE countries promote their own bio-blending targets. Do you think Donald Trump's presidency would affect Europe's biofuel markets? We expect the Trump administration to possibly limit feedstock imports from outside the US, boosting the sales of local soybean and other crop feedstocks to produce domestic HVO, SAF and biodiesel. At the same time, the US government has noted they will impose duties on imports coming from anywhere, with China experiencing the most considerable level of duties of up to 60pc. For example, an import tax on European and UK biodiesel would mean that more fuel is available to fulfill the European and UK mandates, as the US is also relying on HVO and FAME from Europe and the UK to fulfill its own mandates. Biofuel for bunkering has been a popular low-carbon fuel option among container ship companies. But oil tanker owners and dry bulk carrier owners are slower to embrace biofuels. Do you see this changing? At the moment, most biofuels used in shipping are indeed for container ship companies that could more easily afford higher prices of bio components. The biofuels industry is receiving a lot of interest from tanker or carrier owners but for lower biofuel blends compared to container ship companies. Container vessels are willing to buy higher biofuel blends and are interested in B100. Oil tankers are focusing more on B15 and higher bio blends to comply with the minimum GHG reduction targets possible. But as the GHG reduction targets on the FuelEU rise, this will of course change as well. In 2030, what do you project will be the demand for biofuels for bunkering in Europe? As an estimation, we expect waste biofuels bunkering demand in Europe to surpass 2-2.5mn tons by 2030. Specification-wise, what are some of biofuel properties that ship owners need to look out for? We don't believe waste-based and advanced biodiesel fuel properties have considerable issues for ship operators. Especially for blends up to B30, there is nothing to worry about. For higher blends, viscosity and stability are the ones that I believe are more important. Storage time is also important to consider due to lower oxidative stability of FAME compared with fossil diesel alternatives that could be stored longer term. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US inflation gains, core prices ease in December

15/01/25

US inflation gains, core prices ease in December

Houston, 15 January (Argus) — Headline inflation quickened to an annualized 2.9pc in December from a year earlier but core inflation slowed for the first time since August. The acceleration in the consumer price index (CPI) last month compared with 2.7pc in November, according to the Labor Department. Analysts surveyed by Trading Economics had forecast gains of 2.9pc. Core inflation, which excludes volatile food and energy, slowed to an annual 3.2pc from 3.3pc the prior month. It came in under analysts' forecasts of 3.3pc. Traders raised the probability the Federal Reserve will cut its target rate at the June meeting to about 66pc odds from about 58pc Tuesday, according to CME's FedWatch tool. The Fed in December penciled in two likely quarter-point cuts this year but strong job growth and signs of inflation reigniting have been pushing any likely move back later into the year. The energy index contracted by an annual 0.5pc in December, compared with a 3.2pc decline in November. The gasoline index fell by 3.4pc last month compared with an 8.1pc decline the prior month. Energy services rose by 3.3pc following a 2.8pc gain in November. Services less energy services, considered a core services measure, rose by an annual 4.4pc in December after a 4.6pc gain the prior month. Shelter costs rose by an annual 4.6pc following an annual 4.7pc gain the month prior. Food rose by 2.5pc after a 2.7pc gain. Transportation services rose by an annual 7.3pc in December. For the month, the CPI rose by 0.4pc following a 0.3pc gain in November that followed four months of 0.2pc gains. Energy rose by 2.6pc in December from the prior month, accounting for 40pc of the monthly headline gain, after rising by 0.2pc in November. Core inflation slowed to a monthly 0.2pc gain after four months of 0.3pc gains. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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