Carbon targets must be achievable: Regulator
Voluntary carbon offset markets need clearer regulatory leadership and goals to help deliver meaningful greenhouse gas reductions, one of California's top regulators said today.
Guidelines for voluntary carbon reduction investments should match those in California or other regulated markets, Rajinder Sahota, California's Air Resources Board deputy executive officer for climate change and research, told participants attending the Argus North American Biofuels, LCFS & Carbon Markets Summit.
Environmental regulators must oversee such crediting to ensure root environmental goals are met, she added.
"At their core, these programs are meant to reduce emissions – climate change – they are not about market goals," Sahota said. "It is going to be very hard to see the voluntary market converge into a compliance program unless you have direct oversight and enforceability by a regulator."
The nascent voluntary carbon offset market offers to connect businesses and carbon-reducing projects operating outside of jurisdictions such as California, where such lower-carbon efforts are required.
Skepticism about the utility of these offsets has climbed with the volume of money and corporate pronouncements committed to their use. Democrats in the US House of Representatives earlier this month called for clear, federal standards defining global voluntary carbon offsets.
Investment needs a middle ground between voluntary crediting rules that are ineffectively lax or impossibly hard to achieve. Voluntary offsets must quickly support meaningful, achievable reductions in carbon, Sahota said.
"To the extent that action can be taken across all sectors, and somebody is willing to pay for it, and it is robust action that is verifiable, that should be allowed to happen," Sahota said.
Quick and effective approaches included allowing carbon capture and sequestration projects, biofuels use in California's transportation supply and transitioning petroleum refineries rather than shuttering them, she said. The state cannot achieve its objectives by putting the state's petroleum transportation and energy systems at risk.
"It is not politically or publicly or socially acceptable to actually turn off energy in the state of California," Sahota said, referencing pleas for energy conservation last week as a heat wave seared the state. "In order for us to move away from petroleum, we actually need to first build out the things we want to go to."
Sahota also defended the volume of unused credits amassed in the state's cap-and-trade program.
California lawmakers last month rejected a bill that would have required periodic reviews of the state's cap-and-trade carbon allowance supply. The proposal failed in late August with 34 of 80 possible votes in support. The bill would have required a review of "overallocation and offset credit eligibility" every three years. The proposal followed an estimate earlier this year that participants banked for future use roughly 321mn t of credits – equal to nearly three years of the combined obligations reported by major state refiners Chevron, Marathon Petroleum and Phillips 66.
But that volume was just 5pc of the total credits still needed to meet 2030 requirements, she said.
"Is that OK for hedging an economy-wide market in California?" Sahota asked. "Some will say yes, some will say no."
Updated modeling as part of a broad state environmental policy review scheduled to end later this autumn will guide any future action, she said.
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Lyondell Houston refinery to run at 95pc in 2Q
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Houston, 26 April (Argus) — LyondellBasell plans to run its 264,000 b/d Houston, Texas, refinery at average utilization rates of 95pc in the second quarter and may convert its hydrotreaters to petrochemical production when the plant shuts down in early 2025. The company's sole crude refinery ran at an average 79pc utilization rate in the first quarter due to planned maintenance on a coking unit , the company said in earnings released today . "We are evaluating options for the potential reuse of the hydrotreaters at our Houston refinery to purify recycled and renewable cracker feedstocks," chief executive Peter Vanacker said on a conference call today discussing earnings. Lyondell said last year a conversion would feed the company's two 930,000 metric tonnes (t)/yr steam crackers at its Channelview petrochemicals complex. The company today said it plans to make a final investment decision on the conversion in 2025. Hydrotreater conversions — such as one Chevron completed last year at its 269,000 b/d El Segundo, California, refinery — allow the unit to produce renewable diesel, which creates renewable naphtha as a byproduct. Renewable naphtha can be used as a gasoline blending component, steam cracker feed or feed for hydrogen producing units, according to engineering firm Topsoe. Lyondell last year said the Houston refinery will continue to run until early 2025, delaying a previously announced plan to stop crude processing by the end of 2023. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU adopts Net-Zero Industry Act
EU adopts Net-Zero Industry Act
London, 26 April (Argus) — Members of the European Parliament (MEPs) have adopted Net-Zero Industry Act, which plans to allocate funds towards the production of net-zero technologies. The act provides a pathway to scale up development and production of technologies that are critical towards meeting the EU's recommendation of net-zero greenhouse gas (GHG) emissions by 2050. This would include solar panels, electrolysers and fuel cells, batteries, heat pumps, onshore and offshore wind turbines, grid technologies, sustainable biomethane, as well as carbon capture and storage (CCS). The act is designed to help simplify the regulatory framework for the manufacture of these technologies in order to incentivise European production and supply. It also sets a target of 40pc production within the EU for its annual "deployment needs" of these technologies by 2030. Time limits will be instated on permit grants for manufacturing projects, at 12 months if the manufacturing capacity is under 1 GW/yr and 18 months for those above that. It will introduce time limits of nine months for "net-zero strategic projects" of less than 1 GW/yr and 12 months for those above. This is further complemented by the introduction of net-zero strategic projects for CO2 storage, to help support the development of CCS technology. The act was met with positive reactions from the European Community Shipowners' Association (ECSA), which said the bill will set the benchmark for member states to match 40pc of the deployment needs for clean fuels for shipping with production capacity. ECSA said the Net-Zero Industry Act will be instrumental in supporting the shipping industry to meet targets set under FuelEU Maritime regulations , which are set to come into effect next year. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New technologies aim to boost SAF production
New technologies aim to boost SAF production
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P66 to sell German, Austrian retail business: Update
P66 to sell German, Austrian retail business: Update
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