70pc CO2 cut needs export solution: Fertilizers Europe

  • Spanish Market: Fertilizers, Hydrogen, Natural gas
  • 28/11/23

European fertilizer producers recently committed to 70pc greenhouse gas (GHG) cuts by 2040, compared to 2020 levels. But on its decarbonisation path, the fertilizer industry needs EU guarantees of a level playing field, not only with the carbon border adjustment mechanism (CBAM). The EU now needs to guarantee a level playing field for EU exporters, says Antoine Hoxha, director-general of Fertilizers Europe, in an interview with Argus.

Why so unhappy? CBAM is coming.

The CBAM is aimed at creating a level playing for imports to the EU, while nudging non-EU countries towards climate action. The current version of CBAM does not resolve an unlevel emissions playing field for EU fertilizer exporters. A review clause might allow for a solution. We need political will for a solution before CBAM finally cuts off free allowances for European fertilizer producers. The best trade lawyers have already come up with WTO-compliant solutions.

What happens if there's no CBAM solution for EU exports?

With no free allocation for the EU fertilizer industry, the emissions trading system (ETS) price effect will be huge. The ETS might constitute some 50-60pc of EU ammonia price per tonne in 2034, when free allowances are completely phased out. You'd be quite simply thrown out of the market, if you're only 20pc higher than non-EU producers. And what's the point, with no market, for EU producers to have the lowest carbon footprint in the world?

How do you feel about EU policy makers making ever more noise about specific CO2 cuts from agriculture and fertilizers?

The European Commission appears to be leaning towards a specific ETS for agricultural production. This is something we could certainly help with as fertilizer producers. And there's an obvious need to reduce emissions. But we need a way to incentivise cuts.

Any possibility of the EU moving against Russian fertilizers?

Russian imports are very high, especially for urea. But the EU has to decide what it wants. We need a level playing field for European producers to compete fairly. Anti-dumping duties on Russian ammonium nitrate aim to correct dumping and restore a level playing field. During the energy crisis, tariffs on urea and ammonia were only temporarily removed for a long list of countries, not for Russia or Belarus.

Will your 70pc CO2 cut by 2040 forestall binding EU emissions cuts?

Our industry target is doable, if there's financial support, enough renewables are available and we have the flexibility to choose the appropriate technology.

Can you decarbonise while the EU wants 20pc fewer fertilizers in 2030?

There's no EU target on reducing fertilizers. It's about cutting fertilizer losses by 50pc by 2030. And that should lead to a 20pc fertilizer use cut. The EU goal would also reduce imports. But once again the goal is not to reduce nutrients, nor cut production, but to cut fertilizer loss via greater nutrient use efficiency. This entails precision farming, new fertilizer formulations.

How is your certification scheme for low-carbon ammonia shaping up?

Our scheme will certify both imports and European production, according to the same criteria. It's currently a voluntary industry scheme. The scheme has to effectively tackle possible cheating, but be flexible enough for market development. At the start, we'll go with a flexible, mass balance approach, co-existing alongside a book-and-claim system. Long-term, we'll move to mass balance.

How stringent will the certification scheme be?

We've gone for a certificate with a numerical carbon footprint per tonne energy source, renewable or not. Biogas is an alternative that could be certified. We're not linked to certifying above a specific number, whether or not a 70pc greenhouse gas (GHG) emission reduction. We certify the carbon footprint. If you're 69pc, you're also cutting GHG. And with carbon capture and storage, you can make further quick gains.


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25/04/24

India’s Gail to shut Dabhol LNG terminal for monsoon

India’s Gail to shut Dabhol LNG terminal for monsoon

Mumbai, 25 April (Argus) — Indian state-controlled gas distributor Gail is planning to shut its 5mn t/yr Dabhol LNG terminal on the west coast from 15 May, ahead of monsoon rains. Gail will also stop importing LNG from mid-May at the terminal, a company official told Argus . This is because of the lack of a breakwater facility at the terminal, which prevents it from anchoring ships in turbulent seas. The breakwater facility was expected to be completed in January, but the cause of the delay is unknown. The terminal is likely to resume operations from the end of September, similar to its plans in 2023 , as this shutdown over the monsoon season is routine. Gail is set to receive a total of 139,635t LNG at the Dabhol terminal in May, which will arrive in two separate shipments from the US' 5.75mn t/yr Cove Point export facility. Both cargoes will be the last that the terminal will receive before it shuts in mid-May. It has received 583,326t of LNG at the terminal since the beginning of the year, lower by 4pc on the year, data from market analytics firm Kpler show. The Dabhol terminal only receives about 2.9mn t/yr of LNG, despite having a nameplate capacity of 5mn t/yr, because it is not used during the monsoon season. Gail intends to gradually increase the capacity of the Dabhol terminal to 12mn t/yr by April 2030–March 2031. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU adopts sustainability due diligence rules


24/04/24
24/04/24

EU adopts sustainability due diligence rules

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Libya eyes progress on Eni-led oil and gas project


24/04/24
24/04/24

Libya eyes progress on Eni-led oil and gas project

London, 24 April (Argus) — Libya intends to move ahead with a $4bn-5bn oil and gas project proposed by Eni, months after putting the project on hold because of widespread opposition. The country's Supreme Council for Energy last month essentially cleared the way for block NC-07 to be awarded to a consortium of Italy's Eni, France's TotalEnergies, Abu Dhabi's Adnoc and Turkey's state-owned Turkish Energy after a technical review found Libyan institutions lacked the financial means to develop the project alone, according to leaked minutes of the meeting seen by Argus . More recently, Turkey's energy minister Alparslan Bayraktar said on 19 April that an agreement on NC-07 was close. "We are about to sign," he said. On 16 April, Libya's acting oil minister Khalifa Rajab Abdulsadek signalled the project was still on the cards. Eni did not comment. State-owned NOC could not be reached. Tripoli-based prime minister Abdelhamid Dbeibeh and NOC had been on the cusp of awarding NC-07 to the Eni-led consortium in January before widespread opposition forced Dbeibeh to order a review addressing concerns . Plans envisage at least 200mn ft³/d of gas and an unspecified amount of oil. The moves reflect a growing impetus by Libya's oil leadership to drive forward long-delayed projects as it seeks to boost oil production capacity from 1.2mn-1.3mn b/d to 2mn b/d and double gas output to around 3.5bn ft³/d over the next three to five years. Libya is also set to begin negotiations with TotalEnergies and ConocoPhillips in Paris next month over their demand for better terms at Waha Oil Company in return for investing in expanding production capacity, an oil industry source told Argus . This is also likely to prove controversial as many in the industry and beyond are opposed to altering contractual terms. The apparent fresh push comes just weeks after the ousting of oil minister Mohamed Oun , who had opposed awarding NC-07 to the consortium and rejected several other oil and gas deals pursued by the Tripoli-based government and NOC. Opponents of the deal have said that the consortium was set to receive a share of production that is too high and that current operator state-owned Agoco could develop the field for a fraction of the cost. The oil ministry under Oun had also suggested that NC-07 could have been put to a public tender rather than be the subject of direct negotiations. Proponents of the NC-07 deal said Libya must rapidly move ahead with projects to ensure domestic demand is met and the country can continue to export gas. The Supreme Council for Energy said Libya will face a severe gas shortage by 2026 on its current trajectory and become a gas importer unless development projects are implemented. While Libya's political divisions persist, its oil sector has enjoyed a greater level of stability over the past two years. Forced production shutdowns have been few and far between while interest from international oil companies has grown. But accusations of improper conduct in the oil industry have increased in tandem. One of the key challenges facing Libya's oil sector is project implementation. A landmark $8bn deal for Eni to develop offshore gas fields was signed in early 2023, but Argus understands that there has been little progress on implementation. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Norway-German H2 pipeline hinges on demand: Equinor


24/04/24
24/04/24

Norway-German H2 pipeline hinges on demand: Equinor

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Oman latest to insist that oil, gas is 'here to stay'


24/04/24
24/04/24

Oman latest to insist that oil, gas is 'here to stay'

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