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Russia to present climate strategy at Cop 29

  • Spanish Market: Coal, Crude oil, Emissions, Natural gas, Oil products
  • 09/10/24

Russia is preparing to present its climate strategy at the UN Cop 29 climate conference in Baku, Azerbaijan, in November, deputy prime minister Alexander Novak said.

Novak convened a meeting with Russian ministries on climate issues on 7 October, in which a forecast for Russia's emissions rates, in line with the country's 'low emissions economic development strategy to 2050', was discussed. The strategy was approved in 2021.

It is unclear whether the strategy is linked to Russia's new Nationally Determined Contribution (NDC) — a climate plan to be submitted to the UN. Cop parties are expected to publish their next NDCs to the Paris climate agreement — this time for 2035 — in November-February, as part of a cycle that requires countries to "ratchet up" their commitments every five years.

Russia's president Vladimir Putin announced Russia's 2060 net zero ambitions in October 2021, but the country has not updated its NDC since 2020.

The Cop 28 agreement signed in the UAE last year included an energy section calling for "transitioning away from fossil fuels in energy systems", a tripling of renewable capacity by 2030 and for "accelerating action in this critical decade", giving the direction countries need to take in the energy transition.

The country's main focus is on doubling the absorptive capacity of Russia's forests and producing and exporting more gas, to replace demand for more carbon-intensive oil and coal. Russia has no plans to reduce coal and oil output.

Russia's climate envoy Ruslan Edelgeriyev said in November 2022 that Moscow could achieve net zero a decade earlier than in 2060 if its access to international debt markets and technology was not blocked because of the sanctions imposed over Ukraine.

While reiterating net zero ambitions last year despite the sanctions, Putin repeatedly called accelerated decarbonisation irresponsible, claiming that it contributed to Europe's energy crisis in 2021.


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06/11/24

Mexican peso plummets on Trump win

Mexican peso plummets on Trump win

Mexico City, 6 November (Argus) — The Mexican peso fell sharply against the US dollar as markets priced in potential retaliation against Mexico following former president's Donald Trump's victory in the US presidential election. "A Republican Senate majority and potential House win raise the chances of Trump's radical reforms, which could hurt Mexico's economic dynamism," said a financial analyst from Mexican bank Monex in a note today. The peso initially dropped around 3pc to Ps20.71/$1 early today, hitting a two-year low before recovering to Ps20.20/$1 by midday. The peso may weaken further, as Mexico is vulnerable to tariff hikes amid strained relations over issues like immigration and the opioid crisis, according to a desk report from a major Mexican bank. Trump repeatedly threatened tariffs on Mexico during his presidential campaign, most recently pledging a 25pc tariff on all Mexican imports unless President Claudia Sheinbaum's administration launches a severe crackdown on Mexico's drug cartels, which ship fentanyl and other drugs across the border to the US. Recent constitutional amendments in Mexico, including judicial reforms and proposed eliminations of independent regulators, may also add downward pressure on the peso, according to the report. "The government's goal to direct private-sector involvement could limit market forces," it noted. Mexico's state-owned oil company Pemex typically offsets peso depreciation due to its dollar-denominated oil export revenues, which help cover increased import costs. "Pemex's exports and domestic sales are tied to international hydrocarbon prices, providing a natural hedge," the company stated in its most recent report. Still, analysts warn that Pemex's focus on domestic refining over crude exports could erode this hedge, leaving it more exposed to foreign exchange swings on USD-denominated debt. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Trump victory raises climate law questions


06/11/24
06/11/24

Trump victory raises climate law questions

Houston, 6 November (Argus) — Federal tax incentives enacted through US President Joe Biden's signature 2022 climate law could survive in some fashion during a second Donald Trump administration, but their ultimate fate could depend on a Republican majority in Congress. While details of president-elect Trump's plans will unfold in the coming months, the Inflation Reduction Act (IRA), which established tax incentives for clean electricity and the related supply chain, is very much up for review, according to panelists during a post-election webinar hosted by US law firm Bracewell. Beyond the presumed policy shift, the Biden administration is still working to finalize guidance for some of the IRA's incentives, such as production and investment tax credits for clean energy, and regulators have yet to outline other provisions in the law beyond cursory notices. The confluence of those factors could chill renewable energy development, at least in the near term. "Investors stand the risk of being whipsawed to some degree in terms of not having the comfort they need to make a billion-dollar investments on new clean energy facilities," Bracewell tax policy lead Tim Urban said. In addition, an expected 2025 tax bill could move around several trillions of dollars, "and some of that bill could either end up being IRA fixes or IRA repeals or curtailments," he said. Much will depend on whether Republicans retain a majority in the House of Representatives, which would give them control of Congress after they regained a Senate majority on Tuesday. That would open the door for budget reconciliation — the same process through which Democrats passed the IRA in 2022 — and allow Republicans to make changes to the law with a simple majority vote rather than the 60 typically required to bypass the Senate's filibuster rules. In other words, Republicans would not have to reach across the aisle to compromise with Democrats. While some Republicans have objected to outright ending the IRA, they have not yet faced the "horse trading" and intraparty pressure that accompanies negotiations around major legislation, according to Urban. "I'm still optimistic that that much, if not all the IRA may be salvageable, but I think there's a lot of work to be done," he said. Project developers have signaled a similar outlook , noting that renewable energy expanded during the first Trump administration, despite investment in newer sectors like offshore wind flagging ahead of the 2024 election. Even for offshore wind, they expect a slower pace of development rather than a complete abandonment of the industry by the US. The biggest change could come from competing priorities, with Trump's policies potentially making the all-in cost of resources like natural gas more attractive than renewables. Even without details, Trump's desire to see oil and gas producers " drill, baby, drill ", and his first term in the Oval Office offer some broad insight into how his policies could manifest. "One hallmark of the first Trump administration was to not pick winners and losers on technologies or type of energy," said United States Energy Association chief executive Mark Menezes, who served as US deputy secretary of energy in 2020-21. That meant making sure nuclear could be treated equally with other sources and "renewables weren't forced on a particular group if they didn't want to have renewable power, for example," he said. The incoming administration is likely to pursue a "rather aggressive approach to fossil fuel expansion", with a raft of "immediate" executive orders to support that goal, according to Scott Segal, co-chair of Bracewell's policy resolution group. But the IRA will likely be handled with a "scalpel" rather than a "sledgehammer", he said. By Patrick Zemanek Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop 29 finance talks need leadership after Trump win


06/11/24
06/11/24

Cop 29 finance talks need leadership after Trump win

Edinburgh, 6 November (Argus) — Donald Trump's US presidential election victory will likely affect finance negotiations during the UN Cop 29 climate summit starting next week, but the US can still play a role while other developed countries step up to the plate, according to observers. Key negotiations at Cop on a new finance goal for developing nations, the so-called NCQG, could be "severely undermined" by Trump's victory, as the prospect of Washington withdrawing from the Paris Agreement may discourage other countries from engaging with US officials, non-profit IISD's policy adviser Natalie Jones told Argus . Trump pulled the US out of the Paris Agreement during his last term in office, calling it "horrendously unfair", and he has signalled he will do so again. "This could potentially weaken ambitions" at Cop 29, but it is unlikely to derail negotiations, Jones said. Observers agree that the US can still play a role in talks on the new finance goal, a key topic at this year's summit. Parties to the Paris deal will seek to agree on a new finance goal for developing nations, following on from the current $100bn/yr target, which is broadly recognised as inadequate. "The Biden administration still has a critical window to support vulnerable nations' calls to mobilise climate finance and deliver a strong climate target," civil society organisation Oil Change International's US campaign manager Collin Rees told Argus . The Biden administration's delegation, which will still take part in Cop 29, will not change position at this stage, according to Jones. And the US could continue to show some leadership, she said, adding that Washington likely intends to release its 2035 Nationally Determined Contribution (NDC) early. Countries' new climate plans must be submitted to the UN climate body the UNFCCC by February 2025, but the US could release its NDC at Cop 29 before Trump takes power early next year, she said. "President Biden must do everything he can in the final weeks of his term to protect our climate and communities," including on fossil fuels, Rees said. The prospect of Trump pulling the US out of the Paris accord could cause initial anxiety at Cop 29, Climate Action Network executive director Tasneem Essop said. But "the world's majority recognises that climate action does not hinge on who is in power in the US". "As we saw before and will see again, other countries will step up if the US reneges on their responsibilities and stands back," Essop said. Trump's victory might also present the EU with an opportunity to strengthen its leadership among other developed countries, according to Jones. "It is really on the EU and other countries to step up now," she said. This is a view echoed by German Green lawmaker Michael Bloss, a member of the European Parliament's delegation at Cop 29. "Europe needs to become the adult in the room," Bloss told Argus . The EU cannot rely on the US anymore and must become a global climate leader to ensure success at Cop 29, he said. Meanwhile, Oil Change's Rees stressed that the NCQG is a collective goal. "Other major economies must now step forward to fill the gaps, much as they would have needed to in any scenario given how the US has long refused to pay its fair share," he said. By Caroline Varin and Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Mozambique’s Maputo port halts receipt of coal cargoes


06/11/24
06/11/24

Mozambique’s Maputo port halts receipt of coal cargoes

London, 6 November (Argus) — Mozambique's Maputo port has stopped accepting cargoes after the main entry point for trucking South African coal to the port was temporarily shut today because of rioting in the area. Authorities issued advisories to close the Lebombo port of entry, the main trucking route that links South Africa to Maputo, after media reports surfaced of trucks being torched in Mozambique. "[Maputo Port Development Co], in co-ordination with customs and other relevant Mozambican border authorities, has taken the decision to stop reception of cargo at the Port of Maputo," the operator told customers on Wednesday. Unrest in the country began after national elections on 9 October when the ruling party declared victory with a disputed 71pc of votes and extended its 49-year rule. Opposition to the election results in Mozambique has led to country-wide protests, now escalating to violence and rioting. Mozambique Ports and Railways Authority (CFM) issued a communique on 6 November informing customers about suspension of rail operations to ensure safety of staff and operators. On Monday, truck drivers were instructed to park on the side of the road and leave their vehicles. Customs officials also did not allow truckers to leave Mozambique for South Africa with any processed goods. Sources told Argus that traders were desperately looking for truckers to move coal bound for Maputo to Richards Bay instead "to make up for lost volumes". Trucking rates in South Africa are shooting up as a result. This will "lead to consolidation at non-RBCT ports or higher sales prices", a South Africa based trader said. "[The] implied demurrage has gone up at Richards Bay's Multipurpose and Dry Bulk terminals because of port queues," he added. Maputo serves as an increasingly important export port for South African coal producers who have taken to trucking or railing coal across the border owing to the transit problems South Africa's state-owned rail operator Transnet Freight Rail is experiencing. About 2.7mn t of South African thermal coal was exported from Maputo between January to October this year, according to Kpler data. The coal export figure stood at 5.48mn t for 2023. The dry bulk terminals at Maputo are privately owned by infrastructure operator Grindrod. It has 7.5mn t of export capacity for managing coal and magnetite. By Ashima Sharma Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Europe gas market shows muted reaction to US Trump win


06/11/24
06/11/24

Europe gas market shows muted reaction to US Trump win

London, 6 November (Argus) — The European gas market showed only a limited downward reaction this morning to the US election result, and while some market participants expect a second Donald Trump presidency to ease geopolitical tensions, others see the potential for destabilising effects in the medium term. While vote counting was still ongoing at the time of publication and vice-president Kamala Harris has yet to concede defeat, the Associated Press and major US television networks have concluded that Trump secured enough votes in the Electoral College to win the presidency. European gas prices fell during morning trading, despite the US dollar strengthening by about two basis points against the euro. European gas prices typically move higher in euro terms when the US dollar strengthens to offset the higher cost of dollar-denominated LNG supply. Some market participants attributed the small price fall during morning trading to the expectation that a second Trump administration would seek de-escalation on several geopolitical fronts — such as in Ukraine and the Middle East — which, they say, had supported gas prices in recent weeks. But European gas prices reversed their limited gains by the 16:30 GMT market close. And the European gas price reaction was notably muted relative to the considerable volatility of less than a week ago when a media report had raised the prospect of an imminent deal between European buyers and Azerbaijan for gas transit through Ukraine. These European buyers later denied that a contract would soon be signed . Few market participants foresee a material effect on the gas market stemming from the US election result. "The impact is too vague to really price in," a trading firm said. "Given the tight global supply-demand balance, any setback will be short-lived," another market participant said. The result may fuel speculation that the war between Russia and Ukraine could come to an end sooner, but with the new president set to take office in late January, the change in presidency will have no effect on the possibility of reaching a deal that would allow Russian gas flows through Ukraine to continue beyond the expiry of the transit contract and interconnection agreements between the two countries at the end of this year. If a normalisation of relations with Russia leads a Trump administration to unblock sanctions preventing the use of the Novatek-led 19.8mn t/yr Arctic LNG 2 export terminal, this might bring more LNG supply to the market in 2025 than previously envisaged. Looking further ahead, Trump's pledge to reverse incumbent president Joe Biden administration's LNG licensing pause and speed up the approval of new liquefaction projects may have boosted expectations of global LNG supply towards the end of this decade. But other market participants expressed concern about a potential threat to US LNG exports to Europe in the medium term if the new administration opts not to co-operate with the EU on establishing a framework for monitoring, reporting and verifying methane emissions, which may hamper US-EU LNG trade flows once the EU methane emissions regulation is fully implemented. This, coupled with a "drill, baby, drill" policy in the US domestic market, may lead to a deeper gulf between the two markets, some said. Trump's pledge to impose tariffs on imports into the US, particularly against China, may trigger the risk of retaliation that could affect LNG flows from existing facilities — as was the case in 2019, when deliveries of US LNG to China fell to zero as a result of the trade war between the two countries, before rebounding sharply in 2021 after the two countries agreed on a preliminary trade deal. Only one Chinese buyer had US offtake at the time, but many more subsequently signed on for US LNG, totalling about 22mn t/yr from existing and planned liquefaction projects. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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