Brazil to build on G20 for climate leadership role

Spanish Market: Crude oil, Emissions
09/09/24

Brazil to build on G20 for climate leadership role Brazil is looking to use its G20 presidency to advance agreement on energy transition finance — also a central topic at the UN Cop 29 talks this year — consolidating itself as a climate leader as it prepares to host Cop 30 next year.

The country has set fighting climate change as one of its G20 presidency priorities. It called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and foreasier access to climate funds.Brazil is also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. Progressing the painstakingly slow reform of multilateral development banks (MDBs) is important for Brazil.

The G20 finance ministers noted in July an MDB roadmap, to be released in October, is a "key deliverable under the Brazilian presidency". MDB reforms, including aligning funding with climate goals and improving access, are also at the heart of finance discussions ahead of November's Cop 29 in Azerbaijan, and with the G20 conclusions overlapping with the climate talks, decisions made in Brazil could help shape outcomes in Baku. At G20 meetings, Brazil also proposed developing climate disaster prevention tools, reached climate pacts with the US, the UK and France, and began plans to launch a new Amazon fund.

The country hopes to consolidate its climate leadership ahead of Cop 30, which it is hosting in Belem in 2025. It will capitalise on steady reductions in deforestation in the Amazon rainforest over the past two years and increased adoption of renewable energy to foster higher global climate ambitions. The government is already working on an update of its nationally determined contribution (NDC) climate plan, due early next year. Non-governmental organisations have called on Brazil to slash CO2 emissions by 92pc from 2005 levels by 2035 to 200mn t of CO2 equivalent (CO2e)/yr. NGOs also want a more ambitious 2030 target of 400mn t of CO2e/yr — the NDC currently requires emissions to fall to 1.2bn t CO2e/yr.

Preliminary data from Brazil's national institute of space research indicate deforestation fell by nearly 46pc over August 2023-July 2024. Environment minister Marina Silva estimates this cut 250mn t of CO2e emissions in 2023 alone. The final overall 2023emissions data should show another sharp decline, bolstering Brazil's position as a global leader in forest conservation.

The country recently launched its national policy for energy transition, establishing guidelines involving wind, solar, hydro, biomass, biodiesel, ethanol, green diesel, carbon capture and storage, sustainable aviation fuel and green hydrogen, with energy minister Alexandre Silveira saying it is "an opportunity to boost local production" on all those fronts. Brazil also launched a programme to support production of electric vehicles (EVs), although it failed to set a definitive plan to phase out internal combustion engines. EV sales reached more than 94,000 units sold in January-July — surpassing the 93,930 units sold in all of 2023.

The oil producer's challenge

But emissions from Brazil's energy sector rose last year, to 427.8mn t of CO2e from 424.3mn t of CO2e in 2022, with transportation remaining the largest contributor and highlighting the need for more aggressive measures to reduce fossil fuel reliance in transportation. And Brazil is steadily increasing oil production, hoping to increase it further in the south and the country's environmentally sensitive equatorial margin. Output could hit 5.3mn-5.4mn b/d by 2029-30, according to government energy research firm Epe. Brazil still wants to start laying the groundwork for Cop parties to transition away from fossil fuels at Cop 30. But Silva insists developed countries must work on eliminating fossil fuel demand first and provide financial support to help developing nations transition do so.

By Lucas Parolin

Brazil emissions by sector, 2022 %

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07/10/24

Fossil fuel cars phase-out comes up again in Brussels

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Concerns remain over plans of firm tapped to run Citgo

07/10/24

Concerns remain over plans of firm tapped to run Citgo

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Africa seeks trillions in climate finance at Cop 29

07/10/24

Africa seeks trillions in climate finance at Cop 29

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Nigeria starts local currency crude sales to Dangote

07/10/24

Nigeria starts local currency crude sales to Dangote

Lagos, 7 October (Argus) — Nigeria's state-owned oil firm NNPC began selling crude to the country's 650,000 b/d Dangote refinery in the local currency on 1 October, as planned, the Nigerian government said. Co-ordinating minister of the economy Wale Edun said he has conducted "a post-commencement review" of the programme, where downstream regulator NMDPRA, NNPC and Dangote officials confirmed the start of sales in naira. "From 1 October, NNPC will commence the supply of approximately 385,000 b/d of crude oil to the Dangote refinery, which will be paid for in naira," Edun had said previously. The programme will also involve Dangote supplying gasoline and diesel of "equivalent value to the domestic market to be paid for in naira". The crude and product sales will be valued in dollars at prevailing international market prices, but financial settlements will be completed in naira at a fixed exchange rate that has so far not been disclosed. Maritime and port regulatory costs for coastal deliveries of crude and products under the programme, which are normally collected in dollars, "will also be paid for in naira", Edun said. The Nigerian Ports Authority's managing director, Abubakar Dantsoho, previously confirmed the set-up of a "one-stop shop that will co-ordinate service provision from all regulatory and security agencies", listing Nigerian ports, maritime, customs and tax authorities and the navy as participants. Dangote will sell diesel volumes under the programme "to any interested offtaker", the government said, but gasoline will only be sold to NNPC. "NNPC will then sell to various marketers for now," according to the government. "Since gasoline is still subsidised by the government, using discounted foreign exchange [available] only to NNPC, prices at wholesale and retail are still considerably below the market. That is why only NNPC can buy Dangote's gasoline today," said Bob Dickerman, the chief executive of local oil trader Pinnacle. Nigeria's diesel market has been deregulated since 2003 but efforts to remove the country's longstanding gasoline subsidy have stalled. Dangote started sales of gasoline to NNPC on 15 September under an older contract in which the national oil company pays the refiner in dollars. Argus tracking shows Dangote's crude receipts rose by 5pc on the month to 195,000 b/d in September. Dangote said it is aiming for a run rate of 350,000 b/d in its first phase of operations but has fallen short of that level in every month this year except for June. By Adebiyi Olusolape Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Biden urges Israel against Iran oil strike

04/10/24

Biden urges Israel against Iran oil strike

Washington, 4 October (Argus) — President Joe Biden today suggested that Israel should not strike Iran's oil facilities, a day after confirming that such an attack was being discussed. "If I were in their shoes, I'd be thinking about other alternatives than striking oil fields," Biden said. He added that "Israelis have not concluded what they're going to do in terms of a strike that's under discussion." Biden's comments on Thursday lifted crude futures out of concern over the damage of a potential Israeli strike and the Iranian response that could follow. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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