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EU Parliament wants more Cop 27 ambition

  • : Emissions
  • 22/10/20

The European Parliament today called for a "loss and damage" financing facility to be agreed on at the forthcoming UN Cop 27 climate change conference, as well as increased national climate pledges and the securing of $100bn in international climate finance. EU countries should commit to tightened climate targets, parliament said.

The non-binding resolution voted on today calls on the EU to increase climate targets with concrete binding measures, and for a treaty on "non-proliferation" of fossil fuels. Parliament also included several other amendments, including a call for summit participants not to use private jets, and a call to end protection for fossil fuel investors in investment tribunals.

Dutch green member of parliament (MEP) Bas Eickhout — who will head the parliament's Cop 27 delegation in Sharm El-Sheikh, Egypt, from 6-18 November — wants "urgent" progress on a loss and damage scheme to ensure climate change costs are distributed more fairly.

"The current floods in Pakistan make the need for such a mechanism painfully clear," Eickhout said. "The country has barely contributed to climate pollution but it is paying the price for damage caused by others."

The EU should not be shy about its climate achievements in Sharm El-Sheikh, German centre-right EPP MEP Peter Liese said. "If we fulfil our [2030 greenhouse gas emission reduction] plans — and, with what the parliament is asking, we will exceed them — then in 2030, even if the US achieves its plans, which is not so certain, we will have 2.5 times less pro-capita emissions," Liese said.

As co-legislator, parliament would have to give consent to any international agreement signed by the EU. But negotiations are led by the European Commission, following a formal EU negotiating position that is expected to be signed off on 24 October, with the Czech Republic co-ordinating talks between ministers. Speaking to parliament, Czech government minister Ivan Bartos indicated that EU countries would stick to their "mutually confirmed" ambition of at least 55pc greenhouse gas emission reductions by 2030 compared with 1990 levels.

While welcoming deliberation on new collective qualified climate finance goals, taking place until 2024, Bartos only promised the EU's continued "constructive" engagement, with no concrete figures. But the EU remains keen to call on all other countries to scale up their efforts to mobilise at least $100bn/yr in global climate finance as soon as possible, or by 2025.


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24/10/03

Australia’s Origin to exit Hunter Valley Hydrogen Hub

Australia’s Origin to exit Hunter Valley Hydrogen Hub

Sydney, 3 October (Argus) — Australian utility and upstream firm Origin Energy has decided not to proceed with its planned hydrogen development project, the Hunter Valley Hydrogen Hub (HVHH), in Australia's New South Wales. The decision to withdraw from the proposed 55MW HVHH and halt all hydrogen opportunities was made because of continuing uncertainty about the pace and timing of hydrogen market development, Origin said. The firm said the capital-intensive project, intended to progressively replace gas as a feedstock in a nearby ammonia manufacturing plant, carried substantial risks. Origin Energy had an initial agreement with Australian chemicals and explosives company Orica to take 80pc of the green hydrogen produced from the hub for Orica's 360,000 t/yr ammonia facility on Kooragang Island, near the city of Newcastle. Origin Energy and Orica in 2022 said they will study plans to develop the HHVH in Hunter Valley region of NSW, which is Australia's largest thermal coal-producing area. "It has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome. The combination of these factors mean we are unable to see a current pathway to take a final investment decision on the project," said chief executive Frank Calabria on 3 October. Origin had planned to make a final investment decision on the project by late 2024. The hub, which was estimated to cost A$207.6mn ($143mn), had been allocated A$115mn in state and federal funding and was shortlisted for production credits under Canberra's Hydrogen Headstart programme. In July, Origin described the pace of development in the hydrogen industry as "slower than it had anticipated 12 months ago", said. The company expressed hopes that improved electrolysis efficiency would reduce the rising costs of production. The decision is a significant setback for Australia's green hydrogen ambitions, following the July decision by Australian miner and energy company Fortescue to postpone its target of 15mn t/yr green hydrogen output by 2030. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

California adds oilseed limits as vote nears: Update


24/10/02
24/10/02

California adds oilseed limits as vote nears: Update

Updates throughout with more detail on revisions. Houston, 2 October (Argus) — California regulators advanced stricter limits on crop-based biofuels as revisions to a key North American low-carbon incentive program drew closer to a vote. The California Air Resources Board (CARB) late yesterday added sunflower oil — a feedstock with no current approved users or previous indicated use in the program — to restrictions first proposed in August on canola and soybean oil feedstocks for biomass-based diesel. The new language maintained a proposal to make the program's annual targets 9pc tougher in 2025 and to achieve by 2030 a 30pc reduction from 2010 transportation fuel carbon intensity levels. Board decisions that could come as early as 8 November may reconfigure the flow of low-carbon fuels across North America. The state credits anchor a bouquet of incentives that have driven the rapid buildout of renewable diesel capacity and dairy biogas capture systems far beyond California's borders, and inspired similar, but separate, programs along the US west coast and in Canada. CARB staff's latest proposals, published a little before midnight ET on 1 October, offer comparatively minor adjustments to the shock August revisions that spurred a nearly $20 after-hours rally in LCFS prompt prices. Prompt credits early in Wednesday's session traded higher by $3 than they closed the previous trading day before slipping back by midday. LCFS programs require yearly reductions in transportation fuel carbon intensity. Higher-carbon fuels that exceed these annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. California's program has helped spur a rush of new US renewable diesel production capacity, swamping west coast fuel markets and inundating the state's LCFS program with compliance credits. CARB reported more than 26mn metric tonnes of credits on hand by April this year — more than enough to satisfy all new deficits generated in 2023. Staff have sought through this year's rulemaking to restore incentives to more deeply decarbonize state transportation than thought possible during revisions last made in 2019. Participants have generally supported tougher targets, with some fuel suppliers warning about potential price increases and credit generators urging CARB to take a still more aggressive approach. But proposals to limit credit generation to only 20pc of the volume of fuel a supplier made from canola, soybean and now sunflower has found little public support. Environmental opponents have argued that the CARB proposals fall short of what is necessary to add protections against cropland expansion and fuel competition with food supply. Agribusiness and some fuel producers have warned the concept, proposed in August, ran counter to the premise of a neutral, carbon-focused program and against staff's own view last spring. The proposal exceeded what CARB could do without beginning a new rulemaking, some argued. CARB yesterday proposed a grace period for facilities already using the feedstocks to continue generating credits while seeking alternatives. Facilities certified to use those feedstocks before changes are formally adopted could continue using those sources until 2028, compared to a 2026 cut off proposed in August. No facilities currently supplying California have certified sunflower feedstock, and it was not clear that any were planned. "We're not aware of any proposed pathway or lifecycle analysis for sunflower oil, so that addition is just baffling," said Cory-Ann Wind, Clean Fuels Alliance America director of state regulatory affairs. "Clearly not based in science." The latest revisions include a change to how staff communicate a new, proposed automatic adjustment mechanism (AAM). The mechanism would automatically advance to tougher, future targets when credits exceed deficits by a certain amount. Supporters consider this a more responsive approach to market conditions than the years of rulemaking effort already underway. Opponents argue such a mechanism cedes important authority and responsibility from the board. Staff proposed quarterly, rather than annual, updates on whether conditions would trigger an adjustment, and to use conditions during the most recent four quarters, rather than by calendar year. Obligations and targets would continue to work on a calendar-year basis. CARB staff clarified that verifying electric vehicle charging credits would not require site visits to the thousands of charging stations eligible to participate in the program. Staff also clarified how long dairy or swine biogas harvesting projects could continue to generate credits if built this decade, with a proposed reduction in credit periods only applying to projects certified after the new rules were adopted. California formally began this rulemaking process in early January after publishing draft proposals in late December. Regulators initially proposed adjusting 2025 targets lower by 5pc for 2025 — a one-time decrease called a stepdown — to work toward a 30pc reduction target for 2030. CARB set its sights on 21 March for adoption. But staff pulled that proposal in February as hundreds of comments in response poured in. Updated language released on 12 August proposed a steeper stepdown for 2025 of 9pc while keeping the 30pc target for 2030. Public comment on yesterday's publication will continue to 16 October. By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

California eyes more oilseed limits as LCFS vote nears


24/10/02
24/10/02

California eyes more oilseed limits as LCFS vote nears

Houston, 2 October (Argus) — California regulators proposed late Tuesday expanding limits on the Low Carbon Fuel Standard (LCFS) credits certain oilseeds may generate while keeping the program's tougher targets and adoption schedule unchanged. The latest proposed California Air Resources Board (CARB) revisions add sunflower oil — a feedstock with no current approved users or previous indicated use in the program — to restrictions first proposed in August on canola and soybean oil feedstocks for biomass-based diesel. The new language maintained a proposal to make the program's annual targets 9pc tougher in 2025 and to achieve by 2030 a 30pc reduction from 2010 transportation fuel carbon intensity levels. CARB staff's latest proposals, published a little before midnight ET on 1 October, offer comparatively minor adjustments to the shock August revisions that spurred a nearly $20 after-hours rally in LCFS prompt prices. Prompt credits early in Wednesday's session traded higher by $3 than they closed the previous trading day. LCFS programs require yearly reductions in transportation fuel carbon intensity. Higher-carbon fuels that exceed these annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. California's program has helped spur a rush of new US renewable diesel production capacity, swamping west coast fuel markets and inundating the state's LCFS program with compliance credits. CARB reported more than 26mn metric tonnes of credits on hand by April this year — more than double the number of new program deficits generated in all of 2023. Staff have sought through this year's rulemaking to restore incentives to more deeply decarbonize state transportation than thought possible during revisions last made in 2019. California formally began this rulemaking process in early January after publishing draft proposals in late December. Regulators initially proposed adjusting 2025 targets lower by 5pc for 2025 — a one-time decrease called a stepdown — to work toward a 30pc reduction target for 2030. CARB set its sights on 21 March for adoption. But staff pulled that proposal in February as hundreds of comments in response poured in. Updated language released on 12 August proposed a steeper stepdown for 2025 of 9pc while keeping the 30pc target for 2030. The proposal also added a limit on credit generation from certain crop-based feedstocks, to 20pc of the associated volume delivered to California in certain cases. Respondents generally supported the tougher targets, though fuel suppliers warned of higher prices and some credit generators argued that the state should be even more ambitious. No one praised the proposed limits on credit generation. Environmental advocates said the proposal fell short of the protections they sought against crop conversion and other risks; agribusiness warned that the concept distorted the LCFS and could spark lawsuits. By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Malaysia releases updated energy transition policy


24/10/02
24/10/02

Malaysia releases updated energy transition policy

Singapore, 2 October (Argus) — Malaysia has released its updated national climate change policy, which sets out a new framework for the country's transition toward a low-carbon economy. Malaysia on 30 September launched its National Climate Change Policy 2.0, an update to its first national climate change policy that was implemented in 2009. It serves as an "umbrella policy" that ties together the country's various climate initiatives. It sets out a strategic framework to provide an overarching guide on achieving goals, including targets in its nationally determined contribution (NDC) to the Paris agreement — climate plans. The updated policy made no mention of 2035 goals, although countries, including Malaysia, are due to submit their NDCs for that period in November-February to the to the UN Framework Convention on Climate Change (UNFCCC). The country's NDC targets remain unchanged, with the country aiming to reduce emissions by 45pc by 2030 compared with 2005 levels, and achieve net zero by 2050. Its greenhouse gas emissions in 2019 totalled 330.4mn t of CO2 equivalent (CO2e), states the policy document, up from 250mn t of CO2e in 2005. The energy sector accounts for more than 79pc of the country's emissions. The policy acknowledges that as a trading nation and oil producing country, the shifts required for the energy transition pose risks to Malaysia. Policy changes such as carbon pricing may result in overall costs of doing business, and such changes need to be just to ensure there are no negative societal impacts, and no stranded assets. The policy, regulatory, technological and market shifts "are likely to significantly impact Malaysia's economy," states the policy document. Currently, 20-30pc of Malaysia's economy is reliant on sectors that face the aforementioned risks, such as the oil and gas, power generation, metals and mining sectors. Bank Negara Malaysia, the central bank, estimates that the country stands to lose $65.3bn/yr in export revenue "if it fails to comply to these transition risks." The updated policy attempts to address these risks and sets out five strategic thrusts that constitute its new climate change framework. One of these is to strengthen climate governance and institutional capacity. The initiatives under this include creating a comprehensive legal framework to regulate climate action and establishing an effective governance structure to manage climate action. Malaysia, much like many other developing economies, faces challenges in receiving adequate financing for its energy transition. It is estimated that the country needs 350bn ringgit ($84bn) in investments to achieve its net zero goals, according to the policy document. To address this, another key strategy in the policy is to scale up blended financing and stimulate a green economy by increasing the involvement of private sector. In line with this, Malaysia aims to explore the feasibility of carbon pricing instruments and to develop a national policy for the carbon market, to give guidance on carbon trading, including on international compliance and voluntary markets. Other strategies under the policy include supporting carbon capture, utilisation and storage development, as well as enhancing international collaboration on low carbon technology and innovations, although specifics on these initiatives were not provided. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Clean fuel credit not on Treasury priority list


24/10/01
24/10/01

Clean fuel credit not on Treasury priority list

New York, 1 October (Argus) — The US Department of Treasury says it will prioritize issuing final guidance around qualifying for a handful of Inflation Reduction Act clean energy tax credits before the end of President Joe Biden's administration, though guidance around a new credit for low-carbon fuels will likely take longer. The agency's new timeline suggests that granular rules around how to qualify for the 2022 climate law's clean fuels incentive will ultimately be decided by the winner of this year's presidential election. Kicking off in January and lasting through 2027, the 45Z tax credit will replace a suite of expiring fuel-specific credits and offer up to $1/USG for low-carbon road fuels and up to $1.75/USG for low-carbon aviation fuels. Treasury is still "actively" working on guidance around the 45Z incentive, Treasury acting assistant secretary for tax policy Aviva Aron-Dine told reporters today. But unlike for other credits, officials have not provided any timeline for proposing or finalizing that guidance or any signal of whether they could issue any safe harbor assurances before final guidance is available. The Biden administration has not yet clarified how it will calculate greenhouse gas emissions or account for the benefits of "climate-smart" agricultural practices for fuels derived from crop feedstocks, potentially deterring investments until final guidance is available. The 45Z credit requires fuel to meet an initial carbon intensity threshold and then increases the subsidy as a fuel's greenhouse gas emissions fall. Policy clarity is essential, biofuel groups say, since fuel and feedstock offtake contracts are hashed out months in advance and the credit is relatively short-lived compared to other Inflation Reduction Act incentives. Some farm state lawmakers have also pushed for final guidance to bar refiners using foreign feedstocks — such as used cooking oil from China — from being able to claim the credit. The Biden administration still expects to finalize guidance for the 45V clean hydrogen tax credit by year-end out of recognition that the industry "needs certainty" to invest, Aron-Dine said. The final guidance will provide "appropriate adjustments and additional flexibilities" to help projects move forward, she said, while adhering to requirements to consider indirect greenhouse gas emissions caused by the production of clean hydrogen. Treasury also expects to issue final guidance by the end of the administration on the 45Y clean electricity production credit and clean electricity investment credit, a technology-neutral tax credit it proposed earlier this year. The final guidance will continue the "explosive growth" of wind and solar and also provide tax credits to emerging technologies that produce no net greenhouse gas emissions, Aron-Dine said. Other tax credits set to be finalized by the end of the administration include the section 48 investment tax credit and the 45X advanced manufacturing production credit that is supporting the buildout of domestic supply chains, Aron-Dine said. By Cole Martin and Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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