Paris agreement must restrict old carbon offsets: EU

  • : Emissions
  • 19/06/04

Countries should not be allowed to use carbon offset credits produced before 2020 to meet their greenhouse gas emissions reduction targets under the UN Paris climate agreement, EU climate commissioner Miguel Arias Canete has said.

Negotiators are hoping to complete rules that could establish an international carbon market under the Paris agreement at a UN climate summit in December, after talks on this issue broke down at last year's summit. A sticking point in the negotiations is whether countries will be allowed to use emissions reduction credits generated under the Kyoto protocol's clean development mechanism (CDM), to comply with their Paris agreement targets.

EU climate commissioner Canete has urged countries to restrict the use of these credits. "The use of pre-2020 units towards post-2020 obligations could significantly undermine ambition," Canete said.

The first CDM projects were registered in 2001, meaning that some credits issued by these projects represent CO2 cuts that were achieved more than a decade ago. Countries' Paris agreement targets take effect from 2020.

Article 6.4

The issue sits inside Article 6.4 of the Paris agreement, which will set up a sustainable development mechanism (SDM) to succeed the CDM.

Negotiators have not yet decided whether CDM projects, and certified emission reduction (CER) credits generated by them, will be transferred to the new mechanism.

The system should avoid "unrestricted banking" of Kyoto protocol units, Canete said. Failing to avoid this would "undermine ambition from the very beginning", he said.

Canete's comments echo those of some parties in the UN negotiations, who want to use the SDM as a way to start a fresh carbon market, containing only newly issued credits that meet certain standards. But others worry that if CDM credits are not transferred to the new market, the system will not contain enough supply to set up a functioning carbon market. It could take years for SDM projects to start issuing their first credits, meaning the new market could struggle with low liquidity.

Most large carbon markets, including the EU's, have restricted the use of CDM credits for compliance, partly because of concerns over the environmental integrity of credit-issuing projects. Critics of the system say the credits do not represent "additional" emissions cuts — some CDM projects would likely continue cutting CO2 even if they stopped selling emissions reduction credits, so buying their credits does not support "additional" emissions cuts.

Low demand for the credits has caused a large oversupply to build up in recent years, and kept prices low. The price of certified emission reduction (CER) credits has been below €1/t of CO2 since late 2012.

"It is important to be blunt here — the CDM delivered investment, but it did not work for everyone, particularly in terms of additionality, distribution and sustained demand," Canete said.

This year's negotiations on Article 6 will kick off this month at a UN meeting in Bonn. Final decisions are expected to be taken at the UN summit in December, in Santiago, Chile.


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24/04/22

Europe 2.6°C above pre-industrial temperature in 2023

Europe 2.6°C above pre-industrial temperature in 2023

London, 22 April (Argus) — Temperatures in Europe stood at 2.6°C above pre-industrial levels in 2023, data from the World Meteorological Organisation (WMO) show. Europe last year experienced either its joint-warmest or second-warmest year on record, the WMO and EU earth-monitoring service Copernicus found today, in a joint report, European State of the Climate 2023 . The organisations use datasets covering different geographical domains for Europe. WMO includes Greenland, the South Caucasus and part of the Middle East in its dataset. Copernicus put the temperature in Europe last year at between 2.48–2.58°C above pre-industrial levels. The Paris climate agreement seeks to limit global warming to "well below" 2°C and preferably to 1.5°C. Europe is warming roughly twice as fast as the rest of the world. The global average temperature in 2023 was 1.45°C above the pre-industrial average, the WMO said earlier this year . It confirmed 2023 as the hottest on record. Climate scientists use the period 1850-1900 as the baseline for a pre-industrial average. Temperatures in Europe in 2023 were above average for 11 months of the year, and there was a record number of days with "extreme heat stress", the report found. The three warmest years on record for Europe have occurred since 2020, and the 10 warmest since 2007, it said. Electricity generation from renewables in Europe last year reached the highest proportion on record, at 43pc up from 36pc in 2022, the WMO and Copernicus said. Increased storm activity between October-December and above-average precipitation and river flow resulted in higher potential for wind power and run-of-river hydropower generation, respectively. Atmospheric concentrations of CO2 and methane — the greenhouse gases (GHGs) causing the most warming — continued to increase in 2023, "reaching record levels", the report found. It put CO2 concentrations at 419 parts per million (ppm) and methane at 1,902 parts per billion (ppb) on average last year. "Only around half of anthropogenic emissions of CO2 have been absorbed by land vegetation and oceans", the organisations said. GHGs from human activity are driving climate change, but the El Nino weather phenomenon also typically leads to higher temperatures. The El Nino weather pattern, which started in July 2023, peaked in December , the WMO said previously, but could still affect temperatures this year. There is a 60pc chance of La Nina conditions — which typically lead to lower temperatures — developing in June-August, the US National Oceanic and Atmospheric Administration said earlier this month. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India mulls using more natural gas in steel sector


24/04/19
24/04/19

India mulls using more natural gas in steel sector

Mumbai, 19 April (Argus) — India's steel ministry is considering increasing natural gas consumption in the sector as it aims to lower carbon emissions from the industry. Steelmakers held a meeting with the steel ministry earlier this month, to discuss challenges and avenues to increase gas allocation to the sector, according to a government document seen by Argus . Steel producers requested that the government set gas prices at an affordable range of $7-8/mn Btu for them, to make their gas-based plants viable, as well as for a custom duty waiver on LNG procured for captive power. India's LNG imports attract a custom duty of 2.5pc. City gas distribution firms sell gas at market-determined prices to steel companies. Representatives from the steel industry also requested for the inclusion of gas under the purview of the country's goods and service tax, and to be given higher priority in the allocation of deepwater gas, which has a higher calorific value. Deepwater gas is currently deployed mostly to city gas distribution networks. Steelmakers are currently undertaking feasibility tests for gas pipeline connectivity at various steel plants. But a gas supply transmission agreement requires a minimum five-year period for investment approval. The steel industry is heavily reliant on coal, and the sector accounts for about 8-10pc of carbon emissions in the country. A task force of gas suppliers including IOC, Gail, BPCL, Shell, and HPCL and steel producers like Tata Steel, AMNS, All India Steel Re-roller Association and the Pellet Manufacturers Association has been set up, and the team is expected to submit a report on increasing natural gas usage and lowering carbon emissions by 15 May, the government document said. This team is one of the 13 task forces approved by the steel ministry to define the country's green steel roadmap. The steel ministry aims to increase green steel exports from the country in the light of the policies under the EU's Carbon Border Adjustment Mechanism (CBAM), which will take effect on 1 January 2026. Under the CBAM, importers will need to declare the quantity of goods imported into the EU in the preceding year and their corresponding greenhouse gas emissions. The importers will then have to surrender the corresponding number of CBAM certificates. CBAM certificate prices will be calculated based on the weekly average auction price of EU Emissions Trading System allowances, expressed in €/t of CO2 emitted. This is of higher importance to Indian steelmakers as the EU was the top finished steel export destination for Indian steelmakers during the April 2022-March 2023 fiscal year with total exports of 2.34mn t, and has been the preferred choice for Indian steel exports in the current fiscal year owing to higher prices compared to other regions. Indian steelmakers have started to take steps to lower their carbon emissions by announcing collaborations with technology companies to decarbonise, and are trial injecting hydrogen in blast furnaces, and increasing the usage of natural gas in ironmaking. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Canada furthers investment in GHG reductions


24/04/18
24/04/18

Canada furthers investment in GHG reductions

Houston, 18 April (Argus) — The Canadian government plans to have C$93bn ($67.5bn) in federal incentives up and running by the end of the year to spur developments in clean energy technology, hydrogen production, carbon capture utilization and storage (CCUS) along with a new tax credit for electric vehicle (EV) supply chains. The Canada Department of Finance, in its 2024 budget released on 16 April, said it expects to have the first planned investment tax credits (ITCs), for CCUS and renewable energy investments, in law before 1 June. The ITCs would be available for investments made generally within or before 2023 depending on the credit. The anticipated clean hydrogen ITC is also moving forward. It could provide 15-40pc of related eligible costs, with projects that produce the cleanest hydrogen set to receive the higher levels of support, along with other credits for equipment purchases and power-purchase agreements. The government is pursuing a new ITC for EV supply chains, meant to bolster in-country manufacturing and consumer adoption of EVs with a 10pc return on the cost of buildings used in vehicle assembly, battery production and related materials. The credit would build on the clean technology manufacturing ITC, which allows businesses to claim 30pc of the cost of new machinery and equipment. To bolster reductions in transportation-related greenhouse gas (GHG) emissions, the government will also direct up to C$500mn ($363mn) in funding from the country's low-carbon fuel standard to support domestic biofuel production . Transportation is the second largest source of GHG emissions for the country, at 28pc, or 188mn metric tonnes of CO2 equivalent, in 2021. But the province of Alberta expressed disappointment at the pace of development of ITC support that could help companies affected by the country's move away from fossil fuels. "There was nothing around ammonia or hydrogen, and no updates on the CCUS ITCs that would actually spur on investment," Alberta finance minister Nate Horner said. The incentives are intended to help Canada achieve a 40-45pc reduction in GHG emissions by 2030, relative to 2005 levels. This would require a reduction in GHG emissions to about 439mn t/yr, while Canada's emissions totaled 670mn in 2021, according to the government's most recent inventory. The budget also details additional plans for the Canada Growth Fund's carbon contracts for a difference, which help decarbonize hard-to-abate industries. The government plans to add off-the-shelf contracts to its current offering of bespoke one-off contracts tailored to a specific enterprise to broaden the reach and GHG reductions of the program. These contracts incentivize businesses to invest in emissions reducing program or technology, such as CCUS, through the government providing a financial backstop to a project developer. The government and developer establish a "strike price" that carbon allowances would need to reach for a return on the investment, with the government paying the difference if the market price fails to increase. CGF signed its first contract under this program last year , with Calgary-based carbon capture and sequestration company Entropy and has around $6bn remaining to issue agreements. To stretch this funding further, the Canadian government intends for Environment and Climate Change Canada to work with provincial and territorial carbon markets to improve performance and potentially send stronger price signals to spur decarbonization. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Scotland abandons 2030 climate target to focus on 2045


24/04/18
24/04/18

Scotland abandons 2030 climate target to focus on 2045

Edinburgh, 18 April (Argus) — The Scottish government is abandoning its 2030 target to reduce greenhouse gas (GHG) emissions after the UK's Climate Change Committee (CCC) said last month Scotland would not be able to meet it, but reiterated "unwavering commitment" to its 2045 net zero goal. Scotland had an ambitious interim target to reduce GHG emissions by 75pc by 2030 from a 1990 baseline and its legally binding 2045 net zero goal date is ahead of the rest of the UK. The CCC said in March that the nation was unlikely to meet its 2030 climate goals as "continued delays" in plans and policies mean the required actions to hit targets are now "beyond what is credible". And today, Scotland's cabinet secretary for net zero Mairi McAllan said that the government "accepts the CCC's recent re-articulations" that the "2030 target is out of reach". "We must now act to chart a course to 2045 at a pace and scale that is feasible, fair and just." She said that the government will bring forward "expediting legislation" to remove the 2030 target, calling it "a minor legislative change". McAllan said climate actions are backtracking at the UK level and blamed "severe budget restrictions" by the UK government and the "constrains of devolution". Scotland is a member nation of the UK, and the Scottish parliament has some devolved powers. But energy, for example, remains a reserved matter in the UK, and decisions — including licensing, regulation and policy — are taken by the UK parliament. She said that Scotland was trying to achieve societal and economic transformation with "one hand tied behind our back". Scotland's first minister Humza Yousaf said there was no intention to "roll back" on the target to achieve net zero emissions by 2045, saying that Scotland has made faster progress than any other nation in the UK during 2019-21, but that 2030 was a "stretched" target. McAllan said annual reporting on progress will be kept but by introducing a target approach based on "five-yearly carbon budgets" — a cap on the amount of GHG emitted over a five-year period — in a similar way to the rest of the UK. Scotland missed its annual emissions-reduction target in 2021, for the eighth time in the last 12 years. The CCC's interim chair Piers Forster said today that the removal of the 2030 target was "deeply disappointing". "We are reassured that the net zero target remains in place but interim targets and plans to deliver against them are what makes any net zero commitment credible," he said. McAllan announced a series of measures that the government wants to introduce, including reducing methane emissions in farming, a Scotland-wide integrated transport ticketing system, and the quadrupling of electric car charging points. But it is unclear what will happen to Scotland's delayed climate strategy, which was due at the end of 2023. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Germany delays HVO and B10 sales at fuel stations


24/04/18
24/04/18

Germany delays HVO and B10 sales at fuel stations

Hamburg, 18 April (Argus) — HVO and B10 will not be available for sale at German fuel stations until the end of April at the earliest, the environment ministry BMUV told Argus . The biodiesels were previously expected to be on sale from mid April, but the relevant amendment to the 10th Federal Immission Control Ordinance (BImSchV) still needs signatures from the heads of the three federal ministries involved — environment, transport and economics — and the German chancellor, after which it can be published in the Federal Law Gazette. The new regulations can come into force one day after publication. When this happens HVO100 and B10 diesel will be available for sale at German fuel stations. By Max Steinhau and Nik Pais dos Santos Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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