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EU parliament to favour e-fuels, hydrogen: EPP lawmaker

  • : Biofuels, Hydrogen, Natural gas
  • 24/06/10

EU parliament to favour e-fuels, hydrogen: EPP lawmaker

The new EU parliament will be more pragmatic in 2024-2029, favour continuation of the internal combustion engine (ICE) beyond 2035 as well as more flexible rules for low-carbon hydrogen, e-fuels, biofuels, and other CO2-neutral fuels, outgoing member of the European Parliament Markus Pieper told Argus. The centre-right European People's Party (EPP) MEP was the key lawmaker behind the EU's revised renewable energy directive.

Will the next parliament favour renewable liquid fuels in spite of provisions for an ICE phase-out?

For me, the end of the internal combustion engine (ICE) has not been decided yet. The next European Parliament will likely have a majority supporting the continuation of ICE beyond 2035. This would provide planning security for investments in innovation and facilities for e-fuels, biofuels, and other CO2-neutral fuels, including power-to-x (P2X) fuels. Instead of an outright ban on combustion engines, there should be a phase-out of fossil fuels, enabling us to achieve climate targets more quickly and cost-effectively, without overloading power grids. We need to start working on a clear legal framework today. The blending of new fuels must be standardised and regulated.

Do you see the EU parliament favouring greater flexibility in the conditions for renewable hydrogen?

Yes, we have a review clause in the renewable energy directive, whereby the European Commission shall submit a report to council [of ministers] and parliament by 1 July 2028. If this assessment indicates that we cannot achieve targets for green hydrogen in industry due to a lack of supply, then we must adjust the definition of green hydrogen. If we do not adapt, the industry may relocate to regions with fewer environmental regulations. We need to be flexible in our legislation and ready to adjust rules due to worldwide competition.

How can a new EU parliament improve on existing legislation for 2030 climate and energy goals?

The magic word is technological openness. We need to get the best out of all energy resources. Additionally, we need to invest significantly more in the energy transition, especially in the expansion of cross-border green electricity projects. The new European Parliament will likely be more pragmatic and realistic in its energy goals.

Does the EU need to rethink the 2040 goals?

There's no need to rethink the 2040 CO2 reduction target of 90pc [compared with 1990 levels]. But we need to rethink how to achieve goals and keep a close eye on China and India. Europe must constantly redefine and adapt legislation as necessary. One crucial step is reaching new trade arrangements [to balance higher EU climate standards for domestic industry than global competitors]. We have to be more realistic.

Do you think EU 2030 targets for hydrogen are too ambitious?

Yes, the target for green hydrogen to represent 42pc of hydrogen used by industry in 2030 is too ambitious from today's point of view. And I currently don't see the capacity to produce enough hydrogen in Europe. As for imports, non-EU producers often do not meet the same standards for producing green hydrogen. This means we'll need to adapt our definition of green hydrogen and consider more low-carbon solutions. The Paris Climate Agreement remains our primary goal. If we can achieve these goals with low-carbon hydrogen, why not? Still, it remains possible to meet the 2030 green hydrogen targets if we adapt the definition.


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24/07/24

Repsol 2Q profit doubles but cash flow turns negative

Repsol 2Q profit doubles but cash flow turns negative

Madrid, 24 July (Argus) — Spanish integrated Repsol's profit more than doubled on the year in the second quarter, as lower one-time losses and better results in the upstream and customer divisions more than offset a weaker refining performance. But its cash flow turned negative as it completed the buyout of its UK joint venture with China's state-controlled Sinopec, raised investments and experienced weaker refining margins. Net debt was sharply higher, largely reflecting share buy-backs. Repsol has said it will acquire and cancel a further 20mn of its own shares before the end of the year, which will probably further increase its debt. It completed a 40mn buy-back in the first half of the year. Repsol's profit climbed to €657mn ($714mn) in April-June from €308mn a year earlier, when earnings were hit by a large provision against an arbitration ruling that obliged it to acquire Sinopec's stake in their UK joint venture. Excluding this and other special items, such as a near threefold reduction in the negative inventory effect to €85mn, Repsol's adjusted profit increased by 4pc on the year to €859mn. Repsol confirmed the fall in refining margins and upstream production reported earlier in July . Liquids output increased by 3pc on the year to 214,000 b/d, and gas production fell by 4pc to 2.1bn ft³/d. Adjusted upstream profit increased by 4pc on the year to €427mn. The higher crude production and a 13pc rise in realised prices to $78.6/bl more than offset lower gas production and prices, which fell by 6pc to $3.1/'000 ft³ over the same period. Adjusted profit at Repsol's industrial division — which includes 1mn b/d of Spanish and Peruvian refining capacity, an olefins-focused petrochemicals division, and a gas and oil product trading business — was down by 16pc on the year at €288mn. Profit fell at the 117,000 b/d Pampilla refinery in Peru after a turnaround and weak refining margins, and there was lower income from gas trading. Spanish refining profit rose on a higher utilisation rate and gains in oil product trading. Repsol's customer-focused division reported adjusted profit of €158mn in April-June, 7pc higher on the year thanks to higher retail electricity margins, a jump in sales from an expanded customer base, higher margins in aviation fuels and higher sales volumes in lubricants. Repsol swung to a negative free cash flow, before shareholder remuneration and buy-backs, of €574mn in the second quarter, from a positive €392mn a year earlier. After shareholder remuneration, including the share buy-backs and dividends, Repsol had a negative cash position of €1.12bn compared with a positive €133mn a year earlier. Repsol's net debt more than doubled to €4.595bn at the end of June from €2.096bn on 31 December 2023, reflecting the share buy-backs and new leases of equipment. By Jonathan Gleave Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Equinor 2Q profit supported by higher European output


24/07/24
24/07/24

Equinor 2Q profit supported by higher European output

London, 24 July (Argus) — Norway's state-controlled Equinor posted a small rise in profit on the year in the April-June period, as a lift in its European production offset lower gas prices. Equinor reported a profit of $1.87bn in the second quarter, up by 2.2pc on the year but down by 30pc from the first three months of 2024. The company paid two Norwegian corporation tax instalments, totalling $6.98bn, in the second quarter, compared with one in the first quarter. Equinor paid $7.85bn in tax in April-June in total. Its average liquids price in the second quarter was $77.6/bl, up by 10pc from the second quarter of 2023. But average gas prices for Equinor's Norwegian and US production fell in the same period by 17pc and 6pc, respectively. The company noted "strong operational performance and lower impact from turnarounds" on the Norwegian offshore, including new output from the Breidablikk field . Equinor's entitlement production was 1.92mn b/d of oil equivalent (boe/d) in April-June, up by 3pc on the year. The company cited "high production" from Norway's Troll and Oseberg fields in the second quarter, as well as new output from the UK's Buzzard field. But US output slid, owing to offshore turnarounds and "planned curtailments onshore to capture higher value when demand is higher", the company said. It estimates oil and gas production across 2024 will be "stable" compared with last year, while its renewable power generation is expected to increase by around 70pc across the same timespan. Equinor's share of power generation rose by 14pc on the year to 1.1TWh in April-June. Of this, 655GWh was renewables — almost doubling on the year — driven by new onshore wind capacity in Brazil and Poland. "Construction is progressing" on the UK's 1.2GW Dogger Bank A offshore windfarm , Equinor said. It is aiming for full commercial operations in the first half of 2025 at Dogger Bank A — a joint venture with UK utility SSE. Equinor was granted three new licences in June to develop CO2 storage in Norway and Denmark. The Norwegian licences — Albondigas and Kinno — together have CO2 storage potential of 10mn t/yr. The Danish onshore licence, for which Equinor was awarded a 60pc stake, has potential capacity of 12mn t/yr. Equinor has a goal of 30mn-50mn t/yr of CO2 transport and storage capacity by 2035. The company's scope 1 and 2 greenhouse gas (GHG) emissions amounted to 5.6mn t/CO2 equivalent (CO2e) in the first half of the year, edging lower from 5.8mn t/CO2e in January-June 2023. It also incrementally cut its upstream CO2 intensity, from 6.7 kg/boe across 2023, to 6.3 kg/boe in the first half of this year. Equinor has kept its ordinary cash dividend steady , at $0.35/share, and will continue the extraordinary cash dividend of $0.35/share for the second quarter. It will launch a third $1.6bn tranche of its share buyback programme on 25 July. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Bipartisan bill would extend blenders tax credit


24/07/23
24/07/23

Bipartisan bill would extend blenders tax credit

New York, 23 July (Argus) — A bipartisan group of lawmakers has proposed legislation to extend an expiring tax credit for biodiesel and renewable diesel that are blended into the US fuel supply. The bill, which was introduced by representative Mike Carey (R-Ohio) and is pending before the House of Representatives' Ways and Means Committee, would specifically extend a credit offering $1/USG for blenders of biomass-based diesel through 2025. The credit is otherwise set to expire at the end of this year and be replaced in January by the Inflation Reduction Act's 45Z credit, which will be more generous to fuels with lower carbon intensities. The text of the bill has not yet been released. But a draft version shared with Argus by an external group would restrict fuel that is "allowed" a credit under 45Z from also qualifying for the reinstated credit for blenders, a provision that seems to primarily benefit fuel imports. The expiring biodiesel credit allows fuel produced outside the US to qualify, since the credit is claimed by blenders instead of producers, while the new 45Z credit is specifically for refiners producing fuel in the US. The US administration's timeline for finalizing guidance around 45Z is unclear, to the frustration of biofuels groups that have warned that prolonged uncertainty could jeopardize planned investments aimed at boosting production and feedstock supply. An extension of the existing biodiesel credit could potentially provide more certainty to the biofuels supply chain. Fuel retailers that had previously warned that shifting the credit from blenders to producers will raise fuel prices for consumers, including the National Association of Truck Stop Owners and the Society of Independent Gasoline Marketers of America, commended Carey's proposal. But the tax credit extension would also upend other incentives driving biofuel production. The 45Z credit offers up to $1/USG for road fuels, but incentives are more generous the fewer greenhouse gas emissions a fuel produces, whereas the expiring credit does not adjust benefits based on carbon intensity. In addition, prolonging incentives to import fuels could hurt domestic producers and lead to wider biodiesel and renewable diesel availability, potentially weighing on prices of renewable identification number (RIN) credits that refiners submit to regulators to comply with the renewable fuel standard. Market participants have generally expected that prices for RINs, which also act as a source of revenue and incentive to produce low-carbon fuels, will rise next year to account for 45Z providing less of a subsidy than the expiring credit. Clean Fuels Alliance America, which represents biomass-based diesel and sustainable aviation fuel companies, declined to comment or take a position on the legislation. But the group said that it would continue advocating for President Joe Biden's administration to swiftly propose and finalize 45Z guidance. The bill currently has four sponsors, three Republicans and one Democrat, but it is tough to gauge how broad support for any credit extension would be within Congress. It is not uncommon for Congress to pass legislation near the end of the year extending or reinstating tax credits that would have otherwise expired, and various energy tax credits were extended in Congress' lame duck session after the 2020 presidential election. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US House passes waterways bill


24/07/23
24/07/23

US House passes waterways bill

Houston, 23 July (Argus) — The US House of Representatives overwhelmingly approved a bill on Monday authorizing the US Army Corps of Engineers (Corps) to tackle a dozen port, inland waterway and other water infrastructure projects. The Republican-led House voted 359-13 to pass the Waterways Resources Development Act (WRDA), which authorizes the Corps to proceed with plans to upgrade the Seagirt Loop Channel near Baltimore Harbor in Maryland. The bill also will enable the Corps to move forward with 160 feasibility studies, including a $314mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. Water project authorization bills typically are passed every two years and generally garner strong bipartisan support because they affect numerous congressional districts. The Senate Environment and Public Works Committee unanimously passed its own version of the bill on 22 May. That bill does not include an adjustment to the cost-sharing structure for lock and dam construction and other rehabilitation projects. The Senate's version is expected to reach the floor before 2 August, before lawmakers break for their August recess. The Senate is not scheduled to reconvene until 9 September. If the Senate does not pass an identical version of the bill, lawmakers will have to meet in a conference committee to work out the differences. WRDA is "our legislative commitment to investing in and protecting our communities from flooding and droughts, restoring our environment and ecosystems and keeping our nation's competitiveness by supporting out ports and harbors", representative Grace Napolitano (D-California) said. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US House to vote on waterways bill


24/07/22
24/07/22

US House to vote on waterways bill

Houston, 22 July (Argus) — The US House of Representatives is expected to vote on 22 July on a waterways bill that would authorize new infrastructure projects across ports and rivers. The Water Resources Development Act (WRDA) is renewed typically every two years to authorize projects for the US Army Corps of Engineers (Corps). The bipartisan bill is sponsored by representative Rick Larsen (D-Washington) and committee chairman Sam Graves (R-Missouri). The full committee markup occurred 26 June, where amendments were added, and the bill was passed to the full House . A conference committee will need to be called to resolve the different versions of the bill. The major difference between the bills is that the House bill does not include an adjustment to the cost-sharing structure for the lock and dam construction and other rehabilitation projects. The Senate Committee on Environment Public Works passed its own version of the bill on 22 May, with all members in favor of the bill. The House version of the bill approves modifications to the Seagirt Loop Channel near the Baltimore Harbor in Maryland, along with 11 other projects and 160 feasibility studies. One of these studies is a $314.25mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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