G7 must lead on decarbonising heavy industry: IEA
G7 members must "explicitly target emissions from heavy industry sectors," and act as "first movers" to work towards net zero greenhouse gas emissions for the sector, Paris-based energy watchdog the IEA said.
The bloc should reach a net zero emissions target through policy and a combination of support mechanisms, including subsidies and mandates for near zero-emission materials, the IEA recommended.
Heavy industry — such as steel, cement and chemical production — accounts for around 70pc of global industrial emissions, at 6bn t/yr, the IEA said. But a global energy transition will increase demand for these products, given their use in renewable energy infrastructure such as wind farms and electric vehicles.
For G7 members — Canada, France, Germany, Italy, Japan, the UK, the US and the EU — heavy industry is responsible for more than 15pc of coal use and around 10pc of oil and gas consumption. China is the only single country with larger heavy industry sectors than the G7 bloc combined, the IEA said, making it key that G7 members mobilise their economic and innovation power to lead a global transition to net zero heavy industry.
The IEA set out a tight timeframe for G7 members to act. G7 members should develop sustainable transition plans — backed by clear policy — by the mid-2020s and funding for innovation technologies should be in place in the next year or two. Members should build finance mechanisms to support decarbonisation over the next three years and should develop policies to create differentiated markets for "near zero emission material production" within four years, the IEA recommended.
The group must also "consolidate existing work on measurement standards" to evaluate emissions intensity, according to the report. Climate reporting standards globally are often fragmented, acting as a stumbling block to a smooth energy transition, industry leaders said earlier this month.
And "stable, absolute and ambitious thresholds" should be set, including interim targets to lower emissions intensity, the report recommends. G7 members should also work to reduce emissions across the supply chain.
The heavy industrial sector will need to overcome several challenges, including decarbonisation technology, which is not often available at commercial scale, as well as the high cost of emissions reduction and the globally-traded nature of many products — which keep margins slim for producers. Energy efficiency will be part of the solution, but "ambitious, stable and well-designed policy frameworks are vital to create conditions for heavy industry sectors to transition rapidly," the IEA said.
The watchdog also called for a focus on decarbonising the cement sector at the UN Cop 27 climate summit, scheduled to take place in November in Egypt.
The IEA released its Achieving Net Zero Heavy Industry Sectors in G7 Members report today, 19 May. The report was requested by Germany's 2022 G7 presidency.
Related news posts
Nippon Steel delays timeline to acquire US Steel
Nippon Steel delays timeline to acquire US Steel
Tokyo, 3 May (Argus) — Japan's Nippon Steel has extended the scheduled timing of its US Steel acquisition completion until the end of the year, following a request by US authorities to submit more documentation, postponing an original plan of closing the deal by September at the latest. Nippon Steel will take more time to complete its $15bn deal to buy US Steel , as the Japanese firm received from the US Department of Justice a "second request" on submitting further documents necessary for the approval procedure. The deal was initially scheduled to close during April-September but is postponed to sometime during July-December, the Japanese firm announced on 3 May. Nippon Steel received the additional request in April, according to a company representative who spoke to Argus, without disclosing the specific date. The company anticipated the possibility of additional requirements, he added. The acquisition procedure may not finish before the US presidential election in November. Both the Democratic and the Republican party candidates repeatedly and vocally have opposed the deal , with incumbent US President Joe Biden pledging that a fellow American steel producer will be "American owned, American operated by American union steel workers". Nippon Steel is confident that its acquisition plan will eventually clear regulatory hurdles with "fair and objective judgement" from the US authorities, the representative added. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Oregon renewable diesel pours into CFP bank
Oregon renewable diesel pours into CFP bank
Houston, 2 May (Argus) — Rising renewable diesel deliveries helped grow the volume of Oregon Clean Fuels Program (CFP) credits available for future compliance by a record 30pc in the fourth quarter of 2023, according to state data released today. The roughly 253,000 metric tonne (t) increase in available credits from the previous quarter — bringing the total to 1.1mn t — illustrates the spreading influence of US renewable diesel capacity on markets offering the most incentives for their output. California and Oregon low-carbon fuel standard (LCFS) credit prices have tumbled as renewable diesel deliveries generate a surge of credits in excess of immediate deficit needs. LCFS credits do not expire. LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed the annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. Renewable diesel volumes in Oregon increased by 12pc from the previous quarter to about 37,000 b/d — more than double the volume reported in the fourth quarter of 2022. The fuel represented 24pc of the Oregon liquid diesel pool for the period, while petroleum diesel fell to 75pc. Renewable diesel generated 46pc of all new credits for the quarter, compared to the 14pc from the next-highest contributor, biodiesel. Deficit generation meanwhile shrank from the previous quarter. Gasoline deficits fell by 6.6pc from the third quarter as consumption fell by roughly the same amount. Gasoline use trailed the fourth quarter of 2022 by 7.1pc. Diesel deficits also shrank as renewable alternatives push it out of the Oregon market. Petroleum diesel deficits fell by 19pc from the previous quarter and consumption was 27pc lower than the fourth quarter of 2022. Spot Oregon credits have fallen by half since late September, when state data offered the first indications that renewable diesel that was already inundating the California market had found its way to the smaller Oregon pool. The quarter marks the first time Oregon credits available for future compliance have exceeded 1mn t. Oregon in 2022 approved program targets extending into next decade that target a 20pc reduction by 2030 and a 37pc reduction by 2035. An ongoing rulemaking process this year will consider changes to how the state calculates the carbon intensity of fuels and verifies the activity of participants, but will not touch annual targets. By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan's trading firms see metals prices cutting profits
Japan's trading firms see metals prices cutting profits
Tokyo, 2 May (Argus) — Major Japanese trading houses are expecting lower profits from their metals businesses during the April 2024-March 2025 fiscal year, mostly because of lower prices of commodities such as iron ore and coking coal . Japanese trading house Mitsui forecast profits for its metal and natural resource business falling by 14pc on the year to ¥290bn ($1.87bn) during 2024-25, primarily because of lower iron ore prices. Mitsui plans to cut iron ore output by 0.3pc on the year to 60.9mn t at its mining projects where the company owns production ri ghts or a production stake during 2024-25 . This includes the joint venture project Robe River in Australia with Australian iron ore producer Rio Tinto. Japanese trading house Sojitz also expects profits from its metal and natural resource business to decline to ¥35bn, down by 20pc on the year, mostly because of a bearish coking coal market. The company said its overall coal business can cut production costs during 2024-25, partly because it plans larger-scale output at the Gregory Crinum coking coal mine in Australia, without disclosing further details. But Sojitz said it cannot generate higher profits because of lower coking coal prices. The trading house expects the average coking coal price to fall to $230/t during 2024-25, according to the company's chief financial officer Makoto Shibuya, down by $57/t from a year earlier. The company reiterated that the price is not necessarily their selling price. Sumitomo expects profits from its natural resource business would remain flat at ¥72bn on the year, mostly as its nickel production in Madagascar recovers from the output cuts in 2023 , with an aim to produce 19,000t of nickel during 2024-25, up by 9.8pc on the year. A rebound in nickel production could offset possible losses from coal and coking coal prices falling to $266/t and $133/t respectively in the ordinary market, down by $21 and $9, according to the trading house. Sumitomo plans to increase coking coal production by 9.1pc to 1.2mn t but reduce coal output by 4.8pc to 4mn t during 2024-25. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Evion-Metachem Indian project starts producing graphite
Evion-Metachem Indian project starts producing graphite
Singapore, 2 May (Argus) — Australian graphite producer Evion's joint venture with Indian producer Metachem Manufacturing has produced and sold 700kg of expandable graphite, with more output planned in the coming months, after missing its timeline last year. Capacity of the expandable graphite plant, located at Kurkumbh near the west Indian city of Pune, will increase to at least 1,800 t/yr over the coming months, said Evion in its latest quarterly activity report. The agreement between the two firms originally envisioned 2,000-2,500 t/yr of production capacity in the first three years, with plans to begin an expansion to double the capacity starting from the second year. Evion previously was expecting first production in October-December 2023. Evion, formerly known as BlackEarth Minerals, back in 2021 signed an offtake deal with Austrian downstream graphite firm Grafitbergbau Kaiserberg for up to 2,500 t/yr of expandable graphite. Graphite concentrate for the plant is expected to come from external parties in the first two years of operations, subsequently switching to products from its Maniry graphite project in Madagascar, said Evion. Madagascar's national office for the environment is carrying out the environmental and social impact assessment for the Maniry project, according to Evion. India in July 2023 identified 30 critical minerals necessary to its green energy transition and energy self-reliance, including graphite. The country's mines ministry, through state trading firm MSTC, in March launched the second round of its auction , involving 18 blocks, for development of critical and strategic minerals in the country. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more