Von der Leyen faces new Green Deal challenges
The president promises a ‘clean industrial deal', but will need to make compromises over climate policy, writes Dafydd ab Iago
Ursula von der Leyen's re-election by the European Parliament as president of the European Commission on 18 July promises to see a doubling down on climate and energy policy, with her 2024-29 mandate stipulating greenhouse gas (GHG) emissions cuts of at least 90pc by 2040 compared with 1990.
"I have not forgotten how [Russian president Vladimir] Putin blackmailed us by cutting us off from Russian fossil fuels. We invested massively in homegrown cheap renewables and this enabled us to break free from dirty Russian fossil fuels," von der Leyen says, promising to end the "era of dependency on Russian fossil fuels". She has not given an end date for this, nor specified if this includes a commitment to ending Russian LNG imports.
Von der Leyen went on to detail political guidelines for 2024-29. She has pledged to propose a "clean industrial deal" in the first 100 days of her new mandate, albeit without giving concrete figures about how much investment this would channel to infrastructure and industry, particularly for energy-intensive sectors. The clean industrial deal will help bring down energy bills, she says.
Von der Leyen told parliament that the commission would propose legislation, under the European Climate Law, establishing a 90pc emissions-reduction target for 2040. Her political guidelines also call for scaling up and prioritising investment in clean technologies, including grid infrastructure, storage capacity, transport for captured CO2, energy efficiency, power digitalisation and a hydrogen network. She plans to extend aggregate demand mechanisms beyond gas to include hydrogen and critical raw materials, and notes the dangers of dependencies and fraying supply chains — from Putin's energy blackmail to China's monopoly on battery and chip raw materials.
Majority report
Passing the necessary legislation to implement her stated policies will now require approval from EU states and parliament. Unless amplified by Germany's election next year, election victories by far-right parties in France and elsewhere appear not to threaten EU state majorities for specific legislation.
Parliament's political centre-left S&D and liberal Renew groups, as well as von der Leyen's own centre-right European People's Party (EPP), have elaborated key policy requests. These broadly call for the continuation of the European Green Deal — a set of legislation and policy measures aimed at 55pc GHG emissions reductions by 2030 compared with 1990.
A symbolic issue for von der Leyen to decide on — or compromise on — is that of internal combustion engine (ICE) vehicles. EPP wants to stick to technological neutrality and revise the current mandate for sales of new ICE cars to be phased out by 2035, if they cannot run exclusively on carbon-neutral fuels. The EPP wants an e-fuel, biofuel and low-carbon fuel strategy. Von der Leyen's guidelines reflect the need to gain support from centre-right, centre-left and greens. She says the 2035 climate neutrality target for new cars creates investor and manufacturer "predictability" but requires a "technology-neutral approach, in which e-fuels have a role to play". She has not mentioned carbon-neutral biofuels.
It will be impossible for von der Leyen to satisfy all demands in her second mandate. This includes policy requests put forward by the EPP, ranging from a "pragmatic" definition of low-carbon hydrogen and market rules for carbon capture and storage, to postponing the EU's deforestation regulation.
EU member states are expected to propose their candidates for commissioners in August, including for energy, climate and trade policy, with von der Leyen's new commission subject to a final vote in parliament in late October.
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Port of NOLA to close prior to TS Francine
Port of NOLA to close prior to TS Francine
Houston, 10 September (Argus) — The port of New Orleans (Nola) in Louisiana and terminal operators there are limiting operations today in preparation for a full closure Wednesday as tropical storm Francine passes. Terminal operators are expected to reopen on 12 September after damages are assessed. United Bulk Terminals (UBT) issued a force majeure this morning from the Davant terminal on concerns for employee safety. The company did not disclose a timeline for reopening. UBT specializes in coal and petcoke along with other commodities. Associated Terminals will suspend operations 11-12 September and will assess damages on 13 September. The National Weather Service forecasts Francine to make landfall tomorrow on the Louisiana coast as a hurricane. Commodities including petcoke, coal, agriculture and fertilizer are likely to be affected by the port closure. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
2024 RD production outlook up, 2025 down: EIA
2024 RD production outlook up, 2025 down: EIA
New York, 10 September (Argus) — The US Energy Information Administration (EIA) today upped its forecast for 2024 domestic renewable diesel (RD) production but continued to trim its projections for 2025 as challenging economics for refiners persist. The US is expected to produce on average 208,000 b/d of renewable diesel this year, EIA said Tuesday in its latest Short-Term Energy Outlook (STEO), up by around 1pc from August's forecast. Renewable diesel consumption is expected to hit 237,000 b/d this year, an increase of 1.3pc from the prior month's STEO. But next year, EIA now expects 236,000 b/d of renewable diesel production, down by 3.2pc from the prior forecast and down by 19.7pc from the agency's initial projection in January this year of 294,000 b/d. The agency is also forecasting renewable diesel consumption to reach 255,000 b/d in 2025, a 2.3pc decrease from its estimate last month. Renewable diesel producers have struggled over the last year, as ample supply of fuels used for compliance with government clean fuel programs has helped depress the prices of environmental credits and hurt production margins. More capacity has come online this year — with EIA recently pegging production of renewable diesel and related biofuels like sustainable aviation fuel at an all-time high of 4.9bn USG/yr in June — but uncertainty persists about whether future capacity additions will come on line as planned. EIA also upped its projection for US net imports of renewable diesel, raising its 2024 forecast by 7.1pc to 30,000 b/d and its 2025 forecast by 5.6pc to 19,000 b/d. While a federal tax credit starting next year is expected to discourage biofuel imports, since the incentive can only be claimed for fuel produced in the US, EIA's projections have inched upwards over the course of this year. Biodiesel output target up US biodiesel production this year is expected to average 105,000 b/d, up by around 1pc from August's STEO. US Biodiesel consumption should reach 121,000 b/d this year according to the EIA, down by 0.8pc from the prior forecast. For 2025, EIA raised its outlook for biodiesel production by 5.3pc to 100,000 b/d and for biodiesel consumption by 4.4pc to 94,000 b/d. Today's outlook also includes for the first time more granular data about biodiesel and renewable diesel "that better capture how biofuels are being consumed and the share of total distillate fuel they account for," EIA said. While the agency expects total distillate fuel oil consumption to fall slightly this year, biofuels will account for 9pc of that consumption, up from 8pc last year and 5pc in 2022. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Francine set for Wednesday landfall as hurricane
Francine set for Wednesday landfall as hurricane
New York, 10 September (Argus) — Tropical storm Francine is expected to become a hurricane today, as it continues on a path north through offshore US Gulf of Mexico oil and gas production areas on its way to a Louisiana landfall Wednesday. Francine was located about 395 miles south-south west of Cameron, Louisiana, according to an 8am ET advisory from the National Hurricane Center. It is expected to remain off the coast of Texas and intensify to a Category 2 hurricane with winds of up to 100 mph, before landfall. The storm will track through an offshore region that accounts for about 15pc of US crude output and 5pc of US natural gas production. Oil and gas producers started to evacuate personnel from offshore facilities earlier this week and shut in some production. Ports are starting to restrict traffic and offshore lightering operations were paused off of Galveston, Texas, starting Monday night due to high seas. Shell said late Monday it was in the process of shutting in production at its Perdido platform after earlier pausing drilling operations from the facility located about 190 miles south of Houston. Drilling has also been suspended at its Whale facility, which is not scheduled to start operations until later this year. Non-essential personnel have been evacuated from Shell's Enchilada/Salsa and Auger assets, located about 120 miles south of Vermillion Bay, Louisiana. Chevron initiated shut-in procedures for its Anchor and Tahiti platforms 190 miles south of New Orleans and began transporting all personnel from the facilities. Production from its other operated platforms in the Gulf of Mexico remained at normal levels. Non-essential staff were also being removed from the Big Foot and Jack/St. Malo platforms. ExxonMobil said all staff had been transported off the Hoover platform, located about 200 miles south of Houston, and operations shut-in. So far, no major problems are expected at BP's offshore facilities in the region. Ports in the northwestern Gulf of Mexico — including the Texas ports of Corpus Christi, Houston, Galveston, Texas City, Freeport, Beaumont and Port Arthur and the Louisiana ports of Cameron, Lake Charles and New Orleans — were set at port condition Yankee today, meaning gale force winds (39-54 mph) are expected within 24 hours and inbound vessel traffic over 500 gross tons is prohibited. The US Coast Guard's captain of the port of Houston suspended lightering operations at the Galveston Offshore Lightering Area (GOLA) at 11pm ET Monday. Lightering, the process in which crude or refined products are transferred from one ship to another, likely will be delayed off the Texas ports of Corpus Christi and Houston until Thursday due to sea conditions. By Stephen Cunningham and Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Greece's Desfa to front-load gas grid expansion plans
Greece's Desfa to front-load gas grid expansion plans
London, 10 September (Argus) — Greek transmission system operator Desfa plans to complete nearly all the gas projects in its updated 10-year development plan (TYDP) within the next three years. Desfa's projected spend on all projects comes to over €1.37bn, of which €1.34bn would be used within the next three years. The most important of these projects are presented below, split by category. Interconnectors Desfa expects the 1.5bn m³/yr Greece-North Macedonia interconnector to start commercial operations in January 2026, a delay of roughly a year from the timeline it gave in October 2023. The pipeline will run from Nea Messimvria — where Azeri gas enters the Greek grid — to Gevgelija and will cost around €92mn. LNG terminals The connection of the Dioriga LNG terminal will start commercial operations in December 2026, according to the latest TYDP, 1½ years later than previously envisaged. Desfa expects to reach a final investment decision (FID) on a metering and regulating station to connect the planned Dioriga LNG terminal in February 2025. Developer Motor Oil Hellas recently told Argus it plans to make FID on the project by the end of this year . The project will cost Desfa around €21mn and will be financed through connection fees. The new entry point will have a capacity of around 11.8mn m³/d, or 4.3bn m³/yr. Desfa expects a new small-scale jetty already under construction at Revithoussa to start commercial operations in December 2025. The €38mn project will enable ships with capacities of 1,000-30,000m³ of LNG to unload and reload. And Desfa has also taken FID on a compressor station for Revithoussa, which will allow for boil-off gas to be sent into the transmission system rather than flared. Commercial operations are envisioned to start in May 2025. No mention of grid connections for the Argo floating storage and regasification unit or Thessaloniki LNG projects were included in the TYDP, throwing their future into further doubt following recent delays . Power plants Desfa included multiple pipeline connections to gas-fired power plants in the TYDP. The operator expects the 877MW Thermoilektriki Komotinis plant's connection to the grid to start commercial operations in October. It will have a capacity of around 3.4mn m³/d, or 1.24bn m³/yr. The project's operators expect test operations to begin this autumn . Another project will connect Elpedison's planned 826MW plant near Thessaloniki, with a capacity of around 1.14bn m³/yr. Desfa envisions commercial operations beginning in November 2025. A third project would connect to an 840MW plant at Alexandroupolis and start commercial operations in May 2027. Lastly, Desfa expects a project connecting the 873MW Larisa Thermoelectriki plant to start commercial operations in mid-2027. Pipeline capacities for these two projects were not disclosed, but would likely be similar to the first two. Compressor stations Several compressor station plans have been delayed, notably at Komotini and Ampelia. The two expansion phases at Komotini have been pushed back by six months to March and June 2025, respectively, because of delays during the permitting process. The project will increase the system's "technical adequacy", as well as its capacity, according to Desfa. And Desfa expects the compressor station at Ampelia, a crucial part of enabling higher north to south transmission, to start commercial operations only in June 2025. The nine-month delay is because of "extreme weather events" in the area in 2023. And a booster compressor for the Trans-Adriatic pipeline at Nea Messimvria — which will enable fully bidirectional flows — is scheduled to start commercial operations in December 2025. Permitting delays have pushed back the start date by more than a year. Domestic grid Several large projects are also in the works to expand the domestic grid. Desfa plans a 145km pipeline to connect the city of Patras and its industrial area to the grid, expecting FID in June 2025 and the start of commercial operations in March 2027. The pipeline will have a capacity of around 240mn m³/yr, but with the possibility to be doubled if demand is sufficient. Desfa is also planning a 157km pipeline to connect west Macedonia and a metering station at Kardia-Kozani, with a planned capacity of around 440mn m³/yr. This project will help to enable gas supply to district heating installations in the area, Desfa said. Desfa has taken FID and expects commercial operations to start in June 2025. And Desfa's most expensive plan, at €311mn, will duplicate the 215km main transmission line from Karperi to Komotini. This will increase capacity from north to south and aims to eliminate bottlenecks for the provision of firm capacity from new entry and exit points in the northern part of the system, as well as the provision of firm access to the VTP. This will increase liquidity and provide "equitable access to all northern exit points, and is a "priority project" for Desfa. FID is planned for June 2025, and commercial start-up in March 2027. A related €151mn plan will duplicate the 100km Patima-Livadeia line, which will increase pressure in the system and enable firm capacity from the Dioriga Gas terminal. FID is planned for October 2025, and commercial operations in March 2027. By Brendan A'Hearn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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