California to consider tougher LCFS, biogas limits

Spanish Market: Emissions
08/09/23

California will target 50pc tougher transportation fuel carbon targets by the end of the decade, impose new obligations for intrastate jet fuel and reduce the use of one of the top credit-producing fuels under changes to state regulations that could be adopted early next year.

The California Air Resources Board (CARB) late today posted materials offering the first details on proposed changes to its Low Carbon Fuel Standard (LCFS), a market-based carbon-reduction program helping to drive a surge in renewable diesel and other alternative fuel production to the state.

The Standardized Regulatory Impact Assessment (SRIA) includes carbon targets requiring a 30pc reduction in transportation fuel by 2030, compared to the current 20pc. New, more aggressive reductions would begin in 2025 under the amendments submitted to California's Department of Finance for review.

Staff also proposed phasing out avoided methane crediting for dairy biogas, an accounting that grants outsized carbon-reducing credits that helped the fuel rise to the second-largest source of new credits generated in 2022. CARB would also require book-and-claim accounting for biomethane seeking California LCFS credits under the proposal.

The program would expand to impose carbon-reducing obligations on federally-regulated petroleum jet fuel used in flights between destinations in California. And staff proposed a mechanism to automatically adjust the program to tougher targets based on certain, unstated market conditions — an idea meant to more quickly respond to the record volumes of unused credits weighing on the program today.

Under pressure

LCFS programs require yearly reductions in transportation fuel carbon intensity. Higher-carbon fuels that exceed annual limits incur deficits that suppliers must offset with credits generated from the distribution of approved, low-carbon alternatives.

Credits in California's market have sunk from near $200/t in January 2021 to $60/t in February. Spot credits have moved between $85/t and $70/t since May.

Towering supplies of unused credits have helped drag prices lower. Available credits rose to a record 16.5mn t by the end of the first quarter, according to the latest state data — enough to satisfy nearly four out of every five new deficits generated in all of last year. Some found bullishness in net credits growing at a slower pace for two consecutive quarters, but the increase still marked the largest first quarter build in program history. LCFS credits do not expire.

Participants have instead focused on how the program may change to address a widening gap between the flow of credit-generating fuels into the state and the dribble of deficit-generating CARBOB demand since the coronavirus pandemic. But long-standing regulatory obligations slowed CARB's ability to adjust targets as credit prices fell by more than half.

Foot on the gas

Through nearly two years of workshops feeling out California's next LCFS steps, few have been more outspoken for aggressive measures than biogas participants. Industry representatives have consistently pushed for the toughest possible targets and lightest revisions to eligible fuels as biogas grew to generate 14pc of all new credits produced last year.

Critics of biogas have added pressure both through CARB and the state legislature. Opponents fault the LCFS for providing incentives to consolidate and grow dairy operations to the detriment of neighboring communities while providing little new methane reduction.

Methane captured from dairy and swine operations and from landfill diversion projects would be phased out by 2040. Amendments would include at least one ten-year crediting period for avoided methane applications certified before the end of this decade, and allow a five-year crediting period for projects certified between 2030 and 2035.

Limits on renewable diesel feedstocks, another target of environmental opponents this year, were not discussed in the document posted today. Renewable diesel generated a third of all new LCFS credits in 2022, and has led credit generation since 2020.

Moving forward

The SRIA lurches the closely-watched amendment process toward a planned formal proposal before the end of the year and board vote in early 2024. The state Department of Finance will review the filing. Staff for that agency responded last year to CARB filings on Advanced Clean Fleets and this year on zero-emissions forklift rulemakings after 30 days. Submitting the document today would suggest a response no earlier than 8 October.

CARB will then post proposed amendments for at least 45 days of review and comment before a board vote. The board could accept, reject or require their own amendments on the proposal.

By Elliott Blackburn

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20/06/25

Brazil's carbon market rulemaking could pick up

Sao Paulo, 20 June (Argus) — Regulations required to put Brazil's regulated carbon emissions market into force have advanced slowly since congress passed legislation in late 2024, but this year may speed several key pieces. The government plans to gradually implement the market by 2030, even as it prepares to host the Cop 30 climate summit in Belem, Para state in the heart of the Brazilian Amazon in November. So far this year, the working group responsible for issuing the regulations that will govern the new market has met 20 times. Participants in the working group include representatives from 10 government ministries, but the finance ministry is spearheading regulations. A first round should be ready by July, the ministry said this week. The working group could define several elements in coming weeks, including clarity regarding the creation of the new agency that will oversee this market. The law stipulates that this new entity have its own technical staff and be independent from the government. "We urgently need to know who is going to be in charge of this market," Guilherme Lefevre, the director of the Getulio Vargas Foundation's sustainability center said, adding that the market needs to have a strong regulator to have credibility. For the market to move forward, Brazil also needs to create a national system for monitoring, reporting, and verification of greenhouse gas emissions. "Brazil still does not have this system, which is fundamental for the development of the regulated carbon market," Lefevre said. This system will underpin the national emissions allocation plan, which will grant companies emission quotas, which can be traded. The law requires companies that emit over 10,000 metric tonnes (t) of CO2 equivalent (tCO2e/yr) to report their emissions and companies with over 25,0000 tCO2e/yr in emissions to participate in the cap-and-trade system that will go into effect when the new carbon market begins operating completely in 2030. "So far, roughly 600 companies have reported their emissions and a total of around 5,000 companies will need to do so to comply with the market requirements," Laura Albuquerque, chief climate officer at Future Climate consultancy said. She added that that while companies in some sectors, such as steel and pulp and paper are already more prepared for the market, others are behind and are working to understand the extent to which the new market represents a risk or an opportunity. The government is also in a race against time to show progress towards creating the new market ahead of the November Cop 30 meeting, when it plans to launch an initiative that will integrate the Brazilian carbon market with markets in the EU, China and California. The goal is to use this coalition of carbons markets as a test case for a future, global carbon market. Not a silver bullet While the creation of a regulated carbon market is an important element of Brazil's decarbonization efforts, it is only part of the plan to meet its emissions-reduction targets. Compared with other countries, industry represents a small share of total emissions. In 2023 — the most recent year with available data — non-agricultural industry only accounted for just 4pc of Brazil's total emissions. Still, because the law permits companies on the regulated market to purchase a share of their credits from the voluntary market, tropical forest protection and restoration projects will also benefit. With Cop 30 leadership pushing for the next gathering to put into effect what has been agreed at previous summits, Brazil will likely feel pressure to advance more quickly on his own initiatives. Brazil's CO2 equivalent emissions by sector, 2023 mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Pakistan loses EU GSP+ ethanol status

20/06/25

Pakistan loses EU GSP+ ethanol status

London, 20 June (Argus) — The European Commission today suspended Pakistan's Generalised Scheme of Preferences Plus (GSP+) status for imports of ethanol. The removal is effective from today, 20 June. A request was lodged in May last year by France, Germany, Spain, Italy, Hungary and Poland, who sought to activate Article 30 of the GSP Regulation, arguing that ethanol coming from Pakistan since 2022 has "caused a serious disturbance to the Union ethanol market". Under Article 30, the commission can "adopt an implementing act in order to suspend the preferential arrangement in respect of the products concerned". Pakistan was granted GSP+ status in 2014, and this expired at the end of 2023. The status was temporarily extended until 2027. The GSP+ grants reduced-tariff or tariff-free access to the EU for vulnerable low- and lower- to middle-income countries that, according to the EU, "implement 27 international conventions related to human rights, labour rights, protection of the environment and good governance". It fully removes custom duties on two-thirds of the bloc's tariff lines in Pakistan's case, including ethanol. Pakistan is a major supplier of industrial-grade ethanol to Europe, but it does not export fuel-grade ethanol. According to market participants, this is because production facilities in the country lack sustainability certifications such as the International Sustainability and Carbon Certification (ISCC) that are required for biofuels to qualify under the EU Renewable Energy Directive (RED) targets. Fuel-grade ethanol was not included in the bloc's measures. Several Pakistani market participants were hopeful the GSP+ status will remain in place, which has continued to support ethanol exports from the country to the EU ( see table ). But uncertainty has weighed on demand from Europe recently, suppliers said. A participant told Argus that Pakistani sellers may look to offer more into Africa to soften the drop in demand. Some European suppliers anticipated this outcome, and have already stopped importing from Pakistan. European renewable ethanol association ePure expressed concern about the decision to exclude fuel ethanol from the scope of the measures, noting this could open the door to unintended loopholes and weaken the overall effect of the safeguard efforts. By Evelina Lungu and Deborah Sun European ethanol imports from Pakistan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Cop 28 outcome must be implemented in full: Cop 30 head

20/06/25

Cop 28 outcome must be implemented in full: Cop 30 head

London, 20 June (Argus) — The incoming UN Cop 30 summit president Andre Correa do Lago has set out his objectives for the conference in November, placing as a key priority the Cop 28 outcome of trebling renewables capacity and transitioning away from fossil fuels. Correa do Lago today said his plan is to drive "collective action" to tackle climate change, placing a strong emphasis on the global stocktake, the first of which was concluded at Cop 28 in 2023 . That outcome saw almost 200 countries commit to "transition away" from fossil fuels, as well as treble renewables capacity by 2030. The global stocktake, a five-yearly process, sets out progress made towards Paris climate agreement goals. Today's "Action Agenda must drive momentum towards the full implementation of the GST [global stocktake]", Correa do Lago said. The incoming Cop president is focusing on implementing agreements made at previous Cops, and ensuring that countries and all other stakeholders — such as sub-nationals and the private sector — work together to put the decisions into action. Correa do Lago's letter today repeated language from the Cop 28 outcome, and noted his other main themes for Cop 30, which will take place in Belem, in Brazil's Para state, on 10-21 November. As well as shifting energy, industry and transport from fossil fuel-powered to lower- or zero-carbon alternatives, he listed forests, oceans and biodiversity and agriculture and food as key topics. Further topics involved building resilience for cities, infrastructure and water and human and social development. A final priority was enablers and accelerators across the board, including for finance and technology. Correa do Lago said in May that Cop 30 should be a "pivot point" to action on climate change, and "a new era of putting into practice" what has been agreed at previous Cop summits. He has noted a difficult geopolitical situation , which could make talks more challenging. Brazil's Cop 30 presidency is also focused on climate finance at UN climate talks, currently underway in Bonn, Germany. These 'halfway point' discussions serve to cover substantial technical groundwork ahead of political talks at Cop summits each November. Brazil yesterday at Bonn presented a draft of a roadmap to scale up climate finance — from all sources — to $1.3 trillion/year by 2035. The roadmap will not be officially negotiated, although it was a key outcome from Cop 29 in 2024 and is likely to be finalised just ahead of Cop 30 this year. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

BMWE legt RED III Entwurf vor

19/06/25

BMWE legt RED III Entwurf vor

Hamburg, 19 June (Argus) — Das BMWE hat Verbänden am 19. Juni einen ersten Referentenentwurf zur Umsetzung der RED III vorgelegt. Diese sieht grundlegende Veränderungen zur Erfüllung der THG-Quote vor. Erste Preisindikationen steigen schlagartig. Um die auf EU-Ebene gültige dritte Fassung der Erneuerbare-Energien-Direktive (RED III) in deutsches Recht umzusetzen, hat das Bundesministerium für Wirtschaft und Energie (BMWE) einen Entwurf zur Anpassung des Bundes-Immissionsschutzgesetzes (BImSchG) vorgelegt. Unter anderem sieht der Entwurf vor, die Treibhausgasminderungsquote (THG-Quote) bis 2040 schrittweise auf 53 % zu erhöhen (siehe Grafik). Das bisherige Ziel war eine Quotenhöhe von 25,1 % im Jahr 2030. Auch der Pfad bis 2030 wurde leicht angepasst. Damit käme das Gesetz, wenn es in dieser Form umgesetzt wird, einer vielgeäußerten Forderung der Biokraftstoffindustrie nach, die sich für eine stärkere Quotenerhöhung eingesetzt hat. Infolgedessen melden erste Marktteilnehmer Angebote für Andere Zertifikate für das Verpflichtungsjahr 2026 in Höhe von 175 €/tCO2e. Für dieselben Zertifikate für 2025 werden 125 €/tCO2e geboten. Zusätzlich enthält der Entwurf einen Mechanismus, der im Falle einer Übererfüllung die Höhe der Quote im übernächsten Jahr erhöht. Ausschlaggebend ist dafür, ob die gesamte Quotenerfüllung in einem Jahr bereits ausreichen würde, um die Quotenhöhe des Übernächsten Jahres zu erfüllen. Darüber hinaus sieht der Entwurf vor, die Option zur zweifachen Anrechnung von als fortschrittlich geltenden Biokraftstoffen abzuschaffen und die Mindestquote zu erhöhen. Diese steigt dann bis 2030 auf 3 %. Zuvor lag das Ziel bei 2,6 %. Viele Marktteilnehmer haben gemutmaßt, dass die Doppelanrechnungsoption entfallen würde, um die benötigte Menge an Erfüllungsoptionen zu erhöhen. Auch welche Kraftstoffe zur Erfüllung der Quote genutzt werden können wird angepasst: So können keine Kraftstoffe auf Soja- oder Palmölbasis zur Erfüllung genutzt werden. Letzteres schließt auch Kraftstoffe aus Nebenprodukten der Palmölproduktion, allen voran Palmölmühlenabwasser (POME) ein. Dieses wurde in der Vergangenheit insbesondere genutzt, um die fortschrittliche Unterquote zu erfüllen, da es dank einer Sonderklausel trotz seiner Einstufung als fortschrittlich nur einfach zur Erfüllung der THG-Quote angerechnet werden konnte. Diese Regelung würde direkt ab Inkrafttreten der Gesetzesänderung wirksam werden. Die Anrechnungsgrenzen für futtermittel- und abfallbasierte Kraftstoffe werden ebenfalls angepasst: Während das Limit für futtermittelbasierte Produkte bis 2030 von 4,4 % der in Verkehr gebrachten Energiemenge auf 3 % reduziert wird, steigt das Limit für abfallbasierte Produkte wie Altspeiseöl (UCO) bis 2039 von 1,9 % auf 2,8 %. Zusätzlich wird eine Mindestquote für erneuerbare Kraftstoffe nicht-biogenen Urpsrungs (RFNBO) eingeführt. 2026 beträgt der energetische Mindestanteil 0,1 % und soll bis 2040 auf 12 % steigen. Zu den RFNBOs gehören unter anderem synthetische Kraftstoffe wie eFuels (PtL, Power-to-Liquid) und Grüner Wasserstoff. Der Entwurf erweitert den Geltungsbereich der THG-Quote außerdem auf den Luftverkehr. Bisher galt hier eine gesonderte Quote für erneuerbare Kraftstoffe. Darüber hinaus unterliegt nun auch der Seeverkehr der THG-Quote. In der Seefahrt genutzte Kraftstoffe, die im Straßenverkehr anrechenbar wären, können hierbei jedoch nicht für die Erfüllung genutzt werden. Damit soll vermieden werden, dass Unternehmen die Erfüllung ihrer Verpflichtung komplett vom Straßenverkehr auf die Seefahrt umwälzen. Der Entwurf sieht außerdem vor, dass erneuerbare Kraftstoffe nur noch angerechnet werden können, wenn Vor-Ort-Kontrollen der Produktionsstätten durch staatliche Kontrolleure ermöglicht werden. Dies soll das Betrugspotenzial bei der Anrechnung von Biokraftstoffen mindern. Der Entwurf liegt nun den Branchenverbänden vor. Ein Mitglied des Umweltausschusses erklärte am 4. Juni im Rahmen einer Podiumsdiskussion, dass der Entwurf nach Anpassung an eventuelle Verbandsvorschläge im Oktober dem Parlament zur Debatte vorgelegt werden soll und idealerweise zum 1. Januar 2026 in Kraft treten soll. Der Referentenentwurf sieht vor, dass die Änderungen an der THG-Quote mit Beginn des neuen Verpflichtungsjahres in Kraft treten. Dies soll Marktverwerfungen verhindern, für den Fall, dass die Gesetzesänderung innerhalb eines Verpflichtungsjahres in Kraft treten sollte. Von Svea Winter & Max Steinhau Entwicklung der THG-Quote bis 2040 Senden Sie Kommentare und fordern Sie weitere Informationen an feedback@argusmedia.com Copyright © 2025. Argus Media group . Alle Rechte vorbehalten.

Australia’s carbon credit supply remains strong in May

19/06/25

Australia’s carbon credit supply remains strong in May

Sydney, 19 June (Argus) — Australian Carbon Credit Unit (ACCU) supply remained strong in May, bringing total issuances over January-May 2025 closer to the combined volume in the first half of 2024, according to data published on 19 June. A total of 2.11mn ACCUs were issued in May, up from 1.99mn in April , register data released by the Clean Energy Regulator (CER) show. This takes total supply over January-May 2025 to 7.15mn, close to the 7.66mn issued in the first six months of 2024. The regulator did not publish monthly data before 2025. Vegetation methods, mainly from human-induced regeneration (HIR) and avoided deforestation (AD) projects, accounted for 1.32mn ACCUs in May, or nearly 63pc of the total. This was up from just 29pc in April, but below shares of around 82-90pc in February and March. Waste methods, mostly from landfill gas projects, made up 670,596 units, or approximately 32pc of the total. Savana burning, agriculture and energy efficiency methods accounted for the remaining issuances in May ( see chart ). The high number of issuances in April was because of a "backlog of crediting applications for waste methods" , which was expected to clear in the second quarter, the CER said last week. A total of 3.04mn ACCUs were issued in the first quarter, and 5mn applications were "on hand" as of 31 March 2025, the regulator said. The CER maintained its supply forecast of 19mn-24mn for 2025. Bioenergy company LMS Energy remained the largest recipient of new ACCUs in May at 329,879 units, followed by environmental market investor GreenCollar's subsidiary Terra Carbon at 315,420 units and waste management firm Veolia at 154,015 units. ACCU spot prices have been stable in June but continued to rise slowly on the month. The Argus ACCU generic no avoided deforestation (No AD) spot price assessments averaged A$35.65/t CO2 equivalent ($23.20/t CO2e) so far in June, up from A$35.35/t CO2e in May and the highest so far in 2025. By Juan Weik ACCU issuance by method type (mn) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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