UN Cop 29
Overview
Argus provides key insights into the developments and discussions at Cop. We shine a light on how they will affect the global energy and commodity markets.
Decisions made at Cop meetings have far-reaching effects on the markets we serve. Almost 200 countries agreed on "transitioning away from fossil fuels in energy systems" and tripling renewable power capacity at the UN Cop 28 summit in Dubai last year.
Progress at the next two meetings will be crucial in transforming ambitions into actions aligned with the Paris Agreement. Countries must get new plans ready for 2025.
This year, Cop 29 will focus on climate finance. It will cover funding energy transition in developing countries, and increasing private sector involvement and sectorial investment. Article 6 and voluntary carbon markets discussions will also take centre stage.
Follow the key developments in energy transition field with our Net zero page and keep up to date with ongoing coverage of these issues by following Argus Media on LinkedIn and on X.
News
India industries confident of 2030 renewable energy aim
India industries confident of 2030 renewable energy aim
Mumbai, 14 October (Argus) — Indian industries are confident about reaching the country's renewable energy target of 500GW by 2030, senior executives said at the Financial Times' Energy Transition Summit in New Delhi last week. This is especially given strong capacity installation of solar and wind projects in the coming years, delegates heard. India's renewable energy capacity stands at 199.5GW as of August, a rise of 12pc on the year, data from the Central Electricity Authority show. "India's [renewable] power sector has already grown at a [compound annual growth rate] of nearly 20pc in the last 10 years … The pace at which some of the bids are coming, we should reach 500GW by 2030," said domestic utility Tata Power's chief executive officer Praveer Sinha. A record 69GW of renewable energy tenders were issued during the April 2023-March 2024 fiscal year, surpassing the government-mandated target of 50GW. Tata Power is operating 4.5GW installed capacity of renewable energy that produced 64.6Th of electricity in the April 2023-March 2024 fiscal year. It aims to add another 5GW of installed capacity in the coming years, underscoring its commitment to providing round-the-clock renewable energy through solar, wind, and pumped hydro storage projects, Sinha added. Indian steel manufacturer ArcelorMittal Nippon Steel (AMNS) also plans to add 1GW/yr of renewable energy capacity for its captive power consumption, managing director Dilip Oommen said. AMNS has developed a 975MW hybrid renewable energy project at Alamuru village in India's southern state of Andhra Pradesh. The project will generate 661MW of solar and 314MW of wind power capacity, which will be integrated with a pumped hydro storage facility owned by renewables developer Greenko to overcome the intermittent nature of wind and solar power generation, ensuring round-the-clock power. Power generated from the solar and wind sites will be connected from Andhra Pradesh's Kurnool district via a 400kV interstate transmission system up to AMNS' Hazria facility. The firm is also considering using hydrogen in its electric arc furnace, but remains skeptical about the cost economics. "At present, the cost of hydrogen is $3.50/kg," Oommen said, adding that if this falls below $2/kg, it would be feasible for commercial use at its facilities. The reduction in the cost of renewable power generation over the last few years has also raised interest in the sector, incentivising the coal-dominated eastern regions of India to adopt renewables, said Indian independent power provider Ampin Energy's chief executive officer Pinaki Bhattacharya. The domestic steel sector, one of the country's largest carbon emitters, is looking at ways to reduce emissions in light of the policies under the EU's carbon border adjustment mechanism (CBAM), which will take effect on 1 January 2026. This was echoed during a session on 9 October when India's finance minister Nirmala Sitharaman noted that India has been consistent in promoting domestic investment in renewables and establishing transmission lines. But she described CBAM as "a trade barrier" that could hurt investment in India's heavy industries and hinderthe country's transition away from fossil fuels. CBAM is a "unilateral" and "arbitrary" measure, which would "not be helpful" for India, she said, adding that India's concerns "would definitely be voiced" with the EU. Her sentiments were in line with that of commerce minister Piyush Goyal, who said last year that India will not accept any unfair taxes on steel that the EU imposes under the CBAM. Coal to renewables switch "We are not on track yet to displace coal," said Indian not-for-profit thinktank Centre for Science and Environment's director general Sunita Narain, when asked about India's transition from coal to renewables, considering that coal still dominates the country's electricity mix. Renewable energy generation capacity has currently increased to 13pc of the total electricity mix, but the country needs to hit the 35pc target by 2030, she added. India's power generation continues to rely on coal because of an abundant supply of the fuel as well as its cheaper price over other alternatives. Out of India's total installed capacity of 451GW, coal comprises 48.27pc, followed by solar at 19.84pc and wind at 10.47pc, as of August, data from government think tank Niti Aayog show. By Ankit Rathore Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japanese firms eye developing CCS project in Alaska
Japanese firms eye developing CCS project in Alaska
Tokyo, 11 October (Argus) — Two Japanese firms are looking to develop a carbon capture and storage (CCS) value chain between Japan and US' Alaska state to help achieve Japan's 2050 decarbonisation goal. Japanese trading house Sumitomo and Japanese shipping firm Kline today reached a deal to sign a joint research agreement with US independent Hilcorp, for a strategic partnership to capture CO2 in Japan and transport it on a large liquefied CO2 (LCO2) carrier to storage and injection facilities in Alaska. Oil and gas fields have been developed in Alaska since the 1950s and the total storage capacity of the CCS project is expected to be 50 gigatonnes, equivalent to 50 years' worth of Japan's CO2 emissions, Sumitomo said. The world's first LCO2 transportation for CCS is scheduled to start next year ahead of this project, Kline said. Japanese companies are gearing up efforts to seek overseas storage sites for CO2, as domestic storage sites would be insufficient to store all of the country's possible emissions. Tokyo aims to add 6mn-12mn t/yr of CO2 storage capacity domestically and internationally from 2030, with a target of 120mn-240mn t/yr by 2050. The government has projected that Japan will be able to store up to 70pc of its forecasted CO2 emissions of approximately 240mn t/yr in 2050. Japan's parliament in May allowed the government to ratify the 2009 amendment to the International Maritime Organization's London Protocol that will enable the export of CO2. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UN carbon market regulator takes 'agile' approach
UN carbon market regulator takes 'agile' approach
Berlin, 10 October (Argus) — The regulator of the new UN carbon crediting mechanism under Article 6 of the Paris climate agreement decided on key rules this week, adopting an "agile" approach to difficult issues to allow the rules to adapt to "ever-evolving developments in addressing climate change". The Article 6.4 supervisory body decided at its meeting this week in Baku, Azerbaijan, to adopt standards on methodologies and greenhouse gas (GHG) removals open to additional guidance by parties at the UN Cop 29 climate conference in Baku next month. This will allow the supervisory body to review and further improve the standards "whenever necessary" and to "keep up with market developments", it said. The body has requested that the parties meeting at Cop 29 to endorse this approach. The standards will help project developers create and submit methodologies for their projects, to allow them to be registered under the new Paris Agreement Crediting Mechanism (PACM), the group said. Article 6 takes a bottom-up approach to methodologies, allowing project developers to draw up their own methodologies provided they comply with the standard. The standard includes principles such as the downward adjustment of GHG mitigation paths to "encourage ambition over time" and the selection of a baseline against which the mitigation is measured that is below business-as-usual levels. It also includes provisions for equitably sharing the mitigation benefits between the participating countries. This could also be achieved through applying the so-called Sustainable Development Tool adopted at the meeting. The tool, a key objective of which is to set apart the PACM from its predecessor the clean development mechanism's indifference towards environmental and human rights, will require all participants to assess, demonstrate and monitor the environmental and human rights impacts of their projects. Activity participants must also notify the supervisory body of any potential reversal of the achieved mitigation within 30 days of becoming aware of the event. The supervisory body will establish a Reversal Risk Buffer Pool Account in the mechanism registry to compensate fully for avoidable and unavoidable reversals, by cancelling an equivalent amount of buffer Article 6.4 emissions reductions. The supervisory body has tasked experts on the so-called Methodological Expert Panel with continuing their work on various unresolved principles, such as developing a tool for assessing the reversal risk of removals, including the possible application of upper limits and specific risk factors. The supervisory body did not look into the issue of registries at this week's meeting, considered another tricky issue among several outlined by UK department for energy security and net zero head of carbon markets negotiations Dexter Lee at a conference in London this week. But speakers at the event noted a renewed willingness to agree on Article 6 rules this year. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cambodia to push for wind over coal in grid
Cambodia to push for wind over coal in grid
London, 10 October (Argus) — Cambodia appears set to cap its coal-fired capacity at current levels, pushing instead to add wind to its grid by 2026. "There is a need for Cambodia to continue to use coal-fired power, but not to allow new projects," mines and energy minister Keo Rattanak said, adding that the supply will be "affordable, stable and equitable". Cambodia is aiming for carbon neutrality by 2050 and the government has said it is on track to cut carbon emissions by 42pc by 2030. Rattanak told the English-language Phnom Penh Post that Cambodia is expanding wind capacity with six projects in Mondulkiri province that will generate a combined 900MW. He said these will begin operations in 2026, and help to reduce electricity costs. Hydro, solar and biomass made up 57.25pc of Cambodia's generation capacity last year, according to mining and energy ministry data, while coal had a 32.69pc share, with 1.3GW. But in terms of actual generation, coal accounted for 48.06pc. Cambodia is building 265MW of coal-fired capacity, according to Global Energy Monitor data, but the government has not given any updates this year on progress with this. By Shreyashi Sanyal Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Analysis and explainers
Focus on Article 6 as VCM flounders
Focus on Article 6 as VCM flounders
Washington, 30 September (Argus) — As the UN Cop 29 climate summit in Baku, Azerbaijan, approaches in November, the focus is increasingly on whether countries will finally agree on the rules that can unlock future carbon markets under Article 6 of the Paris agreement. Market proponents consider a repeat of last year's Cop 28 in Dubai — where parties failed to agree on the mechanism's rules — would be the worst possible outcome. But they are optimistic given Article 6's placement high on the agenda. "Now it is at the heads of delegation level, which we've never seen," International Emissions Trading Association managing director Katie Sullivan says. But she warns that uncertainty over Article 6's fate is keeping potential carbon market capital "on the sidelines". The voluntary carbon market (VCM), which allows firm to offset their emissions with carbon credits, has found itself in a reputational crisis since last year, with prices crashing. Many potential host countries that are Article 6-ready have felt the impact of climate change this year as they battle with droughts or floods. A functioning market could plough much-needed finance into those countries. But the recent difficulties in the VCM also highlight the importance of integrity. And it is precisely the issues that set Article 6 apart from the VCM that have proved the trickiest to solve. A crucial difference is the need for a corresponding adjustment under Article 6 to prevent double counting by countries of mitigation outcomes. It took five years of talks leading up to Cop 26 in Glasgow to resolve the issue, an EU negotiator said at a World Bank event in Berlin this month. The negotiator, also a member of the supervisory body for the more regulated Article 6.4 mechanism, stressed that "only" three years have passed since Glasgow, and that integrity will continue to go before speed in reaching an agreement. Progress has been slow this year, as the supervisory body works on the rules and standards for the permitted methodologies underlying mitigation and removal activities, and on revising the methodologies of the Kyoto Protocol's Clean Development Mechanism (CDM) that Article 6.4 essentially replaces. Some progress was made this summer on standards for proving "additionality" — that the mitigation would not have happened without the project finance — and setting the "baseline" against which the emissions outcome is measured. Missing rules In contrast, Article 6.2, which allows parties to form bilateral agreements for carbon mitigation projects that generate "internationally traded mitigation outcomes", already provides the possibility of engaging in carbon credit trades. In Berlin, several buyer countries, including Japan and Singapore, made it clear that they will press ahead with deals even if an agreement fails in Baku. Parties under Article 6.2 will typically resort to CDM or the strictest VCM methodologies to underpin their mitigation activities, as they await a final agreement at UN level. And there are no removals projects in the Article 6.2 pipeline, given the lack of precedent in the CDM. They said the main problem is a lack of capacity at host country level, and not so much the missing rules. But some of those missing rules also affect Article 6.2, such as those for credit registries, and more crucially, the timing and scope of credit authorisation, and the extent to which an authorisation might be revoked. German deputy special envoy for climate action Norbert Gorissen last week called for progress on mitigation and ambition at Cop 29. "I'm very concerned that the focus of the incoming presidency is only on finance," he said. The EU does not intend to take part in Article 6 activities. One reason behind the failure in Dubai was stiff opposition from the EU, on grounds of environmental integrity. By Chloe Jardine and Michael Ball Voluntary carbon credits Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UAE, Azerbaijan and Brazil juggle oil and climate goals
UAE, Azerbaijan and Brazil juggle oil and climate goals
Sao Paulo, 27 September (Argus) — Oil and gas producers the UAE, Azerbaijan and Brazil — the Cop presidencies Troika — are pushing for increased global climate ambitions, but are seemingly avoiding the question of fossil fuels in relation to their own new climate targets. Countries party to the UN Framework Convention on Climate Change (UNFCCC) must submit their nationally determined contributions (NDCs) — emissions-cut targets — for 2035 in November-February. Since July, the Troika has been calling on countries to step up. They also said they would signal their own commitments early, which the UAE and Brazil did during a meeting at the UN on 26 September. They will submit their new targets aligned with the Paris agreement's most ambitious temperature limit — 1.5°C — ahead of Cop 29 in Baku in November. Azerbaijan's incoming Cop 29 president Mukhtar Babayev did not offer a timeline, but encouraged all parties to "come forward with 1.5°C-aligned NDCs… well ahead of the 10 February deadline". Cop 28 last year ended with an agreement including transitioning away from fossil fuels and tripling renewable energy capacity globally by 2030. At the UN meeting, Cop 28 president and Abu Dhabi's state-owned Adnoc chief executive, Sultan al-Jaber, reiterated the latter but not the former. Al-Jaber said that the UAE's NDC will remain focused on nature and "will continue to drive investments in diversifying our energy mix", adding the country is on track to triple its renewable energy capacity by 2030. The UAE's focus is likely to be on technologies, with Al-Jaber saying that the new NDC "will leverage artificial intelligence to drive decarbonisation". Cop 30 host Brazil did not mention fossil fuels either, but highlighted efforts to reduce deforestation. The country "will come forward with an ambitious, economy-wide emissions-reduction target covering all greenhouse gases", secretary for climate, energy and environment Andre Correa do Lago said. Oil Change International says the Troika ignores "a simple reality". Delivering NDCs that keep to the 1.5°C goal will not be possible "without an immediate end to fossil fuel expansion". And the three countries all plan to expand oil and gas production. National circumstances The UAE targets crude production of 5mn b/d — from 4.85mn b/d today — before 2027. The third-largest crude oil producer within Opec has received two upward revisions for its production quota in the past two years. It is also expanding gas production capacity. Natural gas output in Azerbaijan reached a new high of 132mn m³/d in 2023, and the country aims to increase it further. Upping exports to the EU to 20bn m³/yr by 2027, from the current 12bn m³/yr, has been a key government commitment since 2022, when Europe was desperate for alternative gas suppliers. Brazil could hit output of 5.3mn-5.4mn b/d by 2029-30, up from 3.4mn b/d in 2023. The government has its eyes on the south and in the environmentally sensitive equatorial margin for new oil exploration. The Troika countries look at fossil fuels through the lens of their own national circumstances — with their economies being heavily reliant on them. Azerbaijan's increasing gas exports spurred an economic boom, with GDP increasing tenfold over 2003-13. Babayev pointed to the "difficulties of developing ambitious NDCs", saying Azerbaijan faces them itself. He recognised the need to deliver "deep, rapid, and sustained emissions reduction, including transitioning away from fossil fuels. But at the same time, Azerbaijan's Ilham Aliyev, "as the head of a country rich in fossil fuels" is defending "the right of these countries to continue investments and production". It is the same for Brazil. President Luiz Inacio Lula da Silva said in June that the country will make "an extraordinary leap" as soon as it begins exploring the equatorial margin. "We want to do everything legal, respecting the environment. But we are not going to throw away any opportunity to make this country grow." Still, the UAE brokered a Cop 28 outcome that included wording on fossil fuels despite pressure from fellow oil producer neighbours. But if it continues to push for the oil and gas sector to increase decarbonisation efforts, it prefers the focus to lie on the industry's emissions rather than output. And oil and gas use accounts for 33pc and 22pc, respectively, of global emissions, the IEA says. By Caroline Varin, Lucas Parolin, Bachar Halabi and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop 29 president Babayev sets out summit action plan
Cop 29 president Babayev sets out summit action plan
The goals might be broadly welcomed, but climate groups want to see progress on fossil fuel consumption, writes Georgia Gratton London, 20 September (Argus) — The president-designate of the UN Cop 29 climate summit, Azeri ecology and natural resources minister Mukhtar Babayev, this week set out 14 initiatives and a detailed agenda for the conference, drawing little-addressed topics into the spotlight, but skating over some of last year's Cop outcomes. Most tangibly, Babayev's letter, sent to parties to UN climate body the UNFCCC, listed a handful of pledges that echo the broadly popular declarations launched at last year's Cop 28 by that summit's UAE presidency. Babayev set out a two-pronged declaration, which seeks to scale up global energy storage capacity to 1.5TW by 2030 and add or refurbish more than 80mn km of power grid by 2040. A separate proposed pledge aims to "commit to green energy zones and corridors", to maximise sustainable energy generation and ensure "cost-effective transmission over large distances and across borders". And the summit will aim to tackle the barriers — including regulatory, technical and financial ones — to a global "clean hydrogen" market. The Cop 29 presidency also aims to address "the growing problem of methane from organic waste", it said. Methane — a potent greenhouse gas — is often a focus at Cop summits, although typically with an eye to the largest emitters, the agriculture and fossil fuel industries. Global methane emissions from agriculture and fossil fuels stood at 142mn t and 118mn t, respectively, in 2023, whereas waste was responsible for 71mn t, IEA data show. Babayev wants governments to commit to targets to cut methane from organic waste and more countries to sign the Global Methane Pledge. The pledge, launched in 2021 at Cop 26, asks signatories to cut methane emissions by at least 30pc by 2030, from 2020 levels. Azerbaijan signed the pledge in March this year. These goals are likely to be broadly welcomed, but environmental groups will also be watching for progress on fossil fuel consumption. Babayev's letter avoided mention of the key agreement reached at last year's Cop 28 — to transition away from fossil fuels — although it did make multiple references to the first global stocktake, the main outcome document from Cop 28. Feeling the heat Azerbaijan is a natural gas exporter, and keen to build on this. The majority of the country's income is from the energy sector, with oil and gas accounting for 90pc of exports and a third of its GDP, according to the World Bank, which lists Azerbaijan among the countries that have most to lose from the transition. Babayev noted that Cop 29 — set for 11-22 November in Baku — will be the first Cop hosted in the Caucasus region. He flagged the "extreme heat [and] water scarcity" the region faces, but also pointed to its wind and solar power potential. And he provided more details of a planned $1bn climate fund, which will be capitalised by fossil fuel-producing countries and companies. "We believe that countries rich in natural resources should be at the forefront of those addressing climate change," Babayev said, noting that the direction came from Azerbaijan's president, Ilham Aliyev. The fund will be a public-private partnership, with "concessional and grant-based support to rapidly address the consequences of natural disasters" in developing countries, Babayev said. It will "provide offtake agreement guarantees for small and medium-sized renewable energy producers and first-loss capital for green industrial projects", with a focus on food and agriculture, he said. Babayev has already said climate finance will be the "centrepiece" in Baku. The planned fund, and any other advances on climate finance, are likely to prove the mark of success for Cop 29. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Huge climate finance divide to bridge ahead of Cop 29
Huge climate finance divide to bridge ahead of Cop 29
London, 17 September (Argus) — Parties have hit a wall in final technical discussions on a new climate finance goal — the "centrepiece" of the UN Cop 29 climate summit in Baku — and ministers have a large gulf to bridge, just two months before the summit. Technical talks took place last week in Baku on the new collective quantified goal (NCQG). The NCQG is the next stage of the $100bn/yr target that developed countries agreed to deliver to developing countries over 2020-25. They missed the goal in 2020-21 but met it in 2022. The Paris climate agreement stipulates that developed countries shall provide financial resources to assist developing countries. "Sticking to set positions and failing to move towards each other will leave too much ground to be covered at Cop 29," the summit's president-designate, Mukhtar Babayev, warned. Azerbaijan's lead negotiator, Yalchin Rafiyev, had asked participants at the meeting's outset to "advance, streamline and narrow options" including for the formulation of the goal — how much should be provided, who should contribute, what type of finance, and what role should private finance play. But despite being told repeatedly to avoid reiterating previous positions, countries and voting blocs did just that, while complaining that ministers need clearer options ahead of Baku. Countries made submissions outlining their NCQG preferences, presented in seven packages and discussed at the meeting. Developing countries have for some time called for a floor of at least $1 trillion/yr for the new goal, but no developed country has committed to a number. Developing countries have also called for finance — mostly public — to be delivered through grants and concessional loans. Developed countries are instead pushing for a "multi-layered goal". They noted the need for global climate-related investment to reach trillions of dollars, but have suggested support levels — the climate finance to developing countries — in the billions, potentially not moving the new goal much further forward. Contributor countries do not want to talk about numbers until other elements that would influence the amount, such as the timeline of the goal or the contributor base, are closer to an agreement, according to non-profit WRI's director for climate finance access, Gaia Larsen. Developed countries leaving negotiations on the amount until the last minute will jeopardise the finance goal, non-governmental organisation Climate Action Network (CAN) global lead on multilateral processes Rebecca Thissen tells Argus . UN voting bloc the Arab Group acknowledged some similarities between the seven packages. But "there are bridges we will never cross", it said. Investing in the energy transition The final figure agreed will have to do some heavy lifting. There is no real definition of climate finance, and finance flows that fall under the NCQG are likely to fund a broad spectrum of energy transition technologies, as well as adaptation projects — adjusting to the effects of climate change — and possibly loss and damage, tackling the unavoidable and irreversible effects of it. "Developed countries refused to include financing for loss and damage within the scope of the new finance goal during the talks [last] week," CAN says. "This puts the loss and damage fund at risk of becoming an empty shell." Guinea pointed out the danger of focusing on investments, as proposed by developed countries, especially for adaptation and loss and damage. "Adaptation is not a strategic option but an imperative to development," Guinea said. UN voting bloc the African Group wants grants and highly concessional loans for loss and damage issues, but developing countries mostly only mentioned mitigation and adaptation in their interventions. South Africa noted that only 2pc of current global financing for the energy transition is reaching the African continent, and that the NCQG would be a "failed process" if it did not help lift this to at least 30pc. And while developed countries are keen to involve the private sector, the Maldives said it does not "see the private sector coming". Developed countries recognised that trillions of dollars are necessary to meet the needs of developing countries and that the previous $100bn/yr goal is not enough, but they called for a "realistic step up" set "within current economic realities". "We need to look beyond public finance because of the limitations on what those numbers can be," according to Australia. And developed countries would prefer a ramp-up period for the goal. "As much as we would like to see [the goal] go in the trillions, there is a political reality there," the EU said. "It must be a stretched goal, an uncomfortable goal, but something pragmatic and that can be met." The new goal must reflect modern economic realities, the US negotiator reiterated last week. Widening the donor base is another contentious topic in the NCQG discussions that did not progress last week. Developed countries have broadly coalesced, calling to expand the contributor base in order to increase the amount of finance for the new goal. But they did not provide any clarity on their exact demands, Thissen said, apart from Switzerland and Canada, which proposed that countries with both emissions and national incomes above certain levels should contribute to climate finance. But the proposals are not likely to "move the conversation forward or get much traction", non-profit Germanwatch's senior adviser on climate finance and development, Bertha Argueta, tells Argus . Party like its 1992 The long-running issue around contributors partly stems from the list of developed and developing countries used by UN climate body the UNFCCC. It dates back to 1992, when the body was established, and has been a bone of contention for some time for many developed countries, which argue that economic circumstances have changed in that time frame, and that several countries classed as developing — and typically heavy emitters — should now contribute to climate funds. But developing countries are digging their heels in, and any changes to the official designations are unlikely. Despite the red lines, and reiteration of previous positions, countries last week managed to find some areas where consensus looks likely — particularly on access to finance and transparency. There is also a broad agreement among developed and developing countries that public finance is at the core of the NCQG. "But different groups have different ideas about what that actually means in terms of its overall role in the NCQG," Argueta says. "The question then is how to build on the points of convergence to reach an agreement." The debates should result in a framework for a draft negotiating text, to be released no later than four weeks before Cop 29. But progress was insufficient to allow negotiators to dive straight into final negotiations in Baku. "Discussions are not exhausted," WRI manager for sustainable finance Natalia Alayza says. Another meeting is planned in Baku and there are still opportunities for parties to have informal consultations, Alayza says. The Cop 29 presidency is also convening ministerial dialogues on the sidelines of the UN general assembly, ongoing in New York, and in Baku in October, in an attempt to break the deadlock. Reaching agreement on the NCQG is an opportunity to rebuild confidence in the Paris Agreement and offer reinsurance to developing countries, Cop 29's Rafiyev reminded parties. "It is a moment of truth for the climate community." By Caroline Varin and Georgia Gratton Public climate finance provided Climate finance provided ($100bn/yr) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop party profiles
Canada to push for more climate cash as oil sands grow
Canada to push for more climate cash as oil sands grow
Calgary, 30 September (Argus) — Canada plans to advocate for more cash and accountability at the UN Cop 29 climate talks in Baku, but its record-high oil production and the threat of a general election might complicate its own climate ambitions. The resource-rich country will be pushing for greater financial commitments from Cop countries in November as they look to replace the current, but broadly recognised as inadequate, $100bn/yr target with a new finance goal for developing countries. Canada, like all developed countries, would not say how much it is willing to commit itself. But it favours broadening the goal's contributor base. "Public finance from a relatively small group of developed countries will not be sufficient to meet current needs," federal agency Environment and Climate Change Canada (EEEC) told Argus . The new goal will require "honest reflection". The country in negotiations mentioned the phase-out of fossil fuel subsidies and fossil fuel sector public financing as a mean to increase investments in energy transition sectors, but other key oil-producing countries disagree. Canada's government says it remains focused on the oil and gas industry and expects to see progress on Cop 28's commitment to transition away from fossil fuels. It became the first G20 country to release a framework targeting "inefficient" fossil fuel subsidies last year, accelerating a 2009 commitment to phase out support for its largest source of emissions. This has not stopped investment in Alberta's oil sands from growing, but the federal government is looking to steer more cash towards clean initiatives such as clean hydrogen, clean electricity and carbon capture. The latter could represent a big business for Alberta's producers if subsidised generously. But it could also be a licence to push Canada's crude production beyond its 4.9mn b/d record set last year. Greenhouse gas (GHG) emissions from Canada's oil and gas sector accounted for 33pc, or 217mn t, of the country's total in 2022, according to the National Inventory Report. Cutting them is critical to meet an overall goal of 403mn-439mn t by 2030, but the Office of the Auditor General of Canada says the country is only on track to lower them to 470mn t by that date. Domestic politics And Canada's climate ambitions might be at risk, with the Liberal minority government facing a general election no later than October 2025. Prime minister Justin Trudeau's popularity has dropped to the benefit of Conservative opposition leader Pierre Poilievre. Trudeau has resisted calls from within his party to step down, while Conservatives prepare for what they call a "carbon tax election". They want to axe the federal carbon tax, tanker bans and regulatory burdens. They promote pipelines and energy independence using a mix of energy sources, including fossil fuels, as part of a "gradual transition" to a low-carbon future, and say "the provinces should be free to develop their own climate change policies". Canada's 10 provinces hold jurisdiction over natural resources and that has posed a serious dilemma for the Liberals as they make climate promises on the international stage. Leading oil province Alberta will be sending a delegation to Cop to promote its own emissions-reduction strategies, and counter those of federal environment minister Steven Guilbeault, as the provincial government slams Ottawa's "punitive regulations" and says its climate policies are unrealistic. Trudeau's pursuit of winding down the oil sands was already tricky considering a state-owned pipeline is effectively subsidising the industry by C$8.7bn ($6.45bn), according to non-profit International Institute for Sustainable Development. Export capacity to the Pacific coast tripled to 890,000 b/d when the Trans Mountain Pipeline Expansion opened this year, underpinning growth plans for Canadian oil. By Brett Holmes Canada GHG emissions by sector Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan pushes abatement approach to energy transition
Japan pushes abatement approach to energy transition
Tokyo, 23 September (Argus) — Japan is keen to promote its energy transition approach, focused on carbon abatement technologies, to the wider coal-reliant Asia-Pacific region. The country has accelerated development of carbon abatement technologies to keep fossil fuels in its energy mix and boost energy security and economic growth. Japan, with its G7 counterparts, pledged to phase out "unabated" coal-fired plants by 2035, or "in a timeline consistent with keeping a limit of a 1.5°C temperature rise within reach, in line with countries' net zero pathways". This is a major step for Japan, a resource-poor country. But legislative progress aimed at developing value chains for carbon capture and storage (CCS) and cleaner fuels, such as hydrogen and ammonia, might have encouraged Tokyo to commit, especially since the G7 text allows for some wiggle room. To ensure continued use of its abated thermal power plants, trade and industry ministry has requested ¥11.2bn ($79mn) to support CCS projects, including exploration of CO2 storage sites, for 2025-26, up sharply from the ¥1.2bn budgeted for 2024-25. Japan has yet to set a date to achieve the phase-out target. But it had already promised not to build new unabated coal-fired plants at last year's UN Cop 28 climate talks, while pledging to phase out "inefficient" coal-fired plants by 2030. Less than 5pc of Japan's operational coal fleet has a planned retirement year, according to analysis by Global Energy Monitor, and these might comprise the oldest and least efficient plants. Coal capacity built in the last decade, following the Fukushima-Daiichi nuclear disaster, is unlikely to receive a retirement date without a countrywide policy that calls for a coal exit. Japan's coal demand could decline, to some extent, under global divestment pressure. But the fuel remains key, as the government sees renewables and nuclear as insufficient to meet rising power demand driven by the growth of data centres needed to enable artificial intelligence. Continental divide The country is keen to extend its vision for "various" and "practical" pathways, including abatement technologies, to coal-reliant southeast Asia. This stems from Tokyo's sceptical view about promoting a more European approach to the energy transition — driven by wind and solar power — to Asian countries. Japan stresses the importance of more diversified pathways, including thermal power with abatement. The country aims to spur decarbonisation in Asia-Pacific through a platform called the Asia Zero Emission Community (Azec) initiated in 2022. Asia-Pacific accounts for more than half of global greenhouse gas (GHG) emissions, at 17.178bn t of CO2 equivalent, according to the IEA. In Jakarta last month, 11 Azec countries emphasised the need to co-operate "to decarbonise coal power generation". The platform sets out options such as biogas, hydrogen and ammonia, and retrofitting with CCS and carbon capture, utilisation and storage. Japan's industries have already committed to carbon abatement at coal-fired plants in Asia, leveraging their technological know-how. Tokyo has pledged to provide about $70bn to support decarbonisation globally. This funding is part of wider financial assistance to help mobilise the estimated $28 trillion that Asia requires. To secure the funding, Japan has already issued part of a $139bn climate transition bond and aims to strengthen the financial support through the Asia Zero Emission Centre, the latest Azec initiative, under which transitional finance will be studied further, a trade and industry ministry official told Argus . Japan is on track to reduce its GHG emissions by 46pc by the April 2030-March 2031 fiscal year from its 2013-14 level, and hit its net zero emissions goal by 2050. By Motoko Hasegawa and Yusuke Maekawa Japan CO2 emissions by sector Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Colombia needs finance to match green ambitions
Colombia needs finance to match green ambitions
New York, 23 September (Argus) — President Gustavo Petro's decision to end hydrocarbon production could prove to be a gamble, as Colombia risks sacrificing key revenues to support its energy transition while access to international finance remains uncertain. Time is of the essence for Petro, with slightly less than two years left for his administration. But he has yet to unveil an energy transition strategy to reach the country's 2050 net zero target. At the same time, he complains that progress is slow because Colombia is being punished for its fossil fuel phase-out ambitions. Unlike other hydrocarbon producers, such as Brazil, which argue that revenues from oil and gas are key to funding their energy transition, Petro ordered an end to new hydrocarbon exploration and production contracts soon after taking office in August 2022. Even though the policy's short and medium-term impact on energy output, and revenue, is likely to be minimal, credit ratings agencies responded by downgrading Colombia's standing. "Most of these [oil and gas] companies have an inventory of licences that lasts around seven years, so right now the oil companies have still 3-4 years of E&P in their plans," Fitch director for Latin American corporates Adriana Eraso says. But long-term growth in the country depends on managing the transition from hydrocarbon production towards renewable energy, ratings agency S&P says. The sector has accounted for 10-20pc of central government revenues in recent years. State-owned oil company Ecopetrol alone contributes about 4pc of the country's gross domestic product (GDP). Natural gas is another cause for concern, Fitch says. Halting exploration could hit the country's output of gas, which is considered a key transition fuel in the region. "Even if Colombia is not going to be an exporter of gas, it could be self-sufficient," Eraso says, adding that it instead faces a shortage as a result of current policy plans. Poor world problems The country, which emerged as climate finance advocate for developing nations during last year's UN Cop 28 summit in Dubai, has long called for developed countries to help fund a shift to cleaner energy. Colombia needs $2.3bn-3.8bn/yr for emissions reduction action until 2030, under its nationally determined contribution climate plan, according to UN climate body the UNFCCC. The country will keep pushing for financial support, to be agreed at Cop 29 in Baku, to help developing countries make headway, a negotiator says. It is also pushing back on a proposal by rich nations to have emerging economies contribute. Colombia wants the target to reflect the context in which developing countries must implement the climate action — limited fiscal scope, high cost of capital and high debts. There are other obstacles to Colombia's transition plans. Droughts have highlighted the urgency of diversifying power generation through more non-conventional renewable generation and gas-fired plants — about 70pc of its generation comes from hydro currently. And while Colombia is ramping up solar generation, it is proving nearly impossible to build more turbines in the wind-rich northern region of La Guajira, where protracted consultation processes with indigenous communities have led to delays, rising costs and cancellations. And the government's decision to increase a tax on the sale of renewable electricity is weighing on its ability to meet green goals. The failure to put forward concrete transition plans that benefit its economy and its communities risks undermining Colombia's climate credibility, even as it hosts the UN's Cop 16 Biodiversity Conference this year. Those plans will also be key to attracting international finance for its energy transition goals. By Jacqueline Echevarria Colombia emissions by sector 2021 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s energy transition hinges on power sector
India’s energy transition hinges on power sector
Mumbai, 17 September (Argus) — India's rapid economic growth has led to surging power demand, which the country aims to meet through expanded renewable energy capacity. But for now, coal remains firmly in its energy mix. Indian GDP grew by 6.7pc last year, according to energy watchdog the IEA, with emissions growing at a slightly faster 7pc, or about 190mn t, to 2.8 gigatonnes of CO2. Accelerating the transition to cleaner power generation is imperative for the country to meet its development and climate goals. But it is still heavily reliant on coal for energy security. India's coal-fired capacity stands at almost 218GW for the 2024 fiscal year, according to government think-tank Niti Aayog, accounting for a 49pc share of the country's total installed power mix. And it aims to add 80GW more coal-fired capacity by April 2031-March 2032. Coal-based power makes up 94pc of India's thermal power generation at present, and is likely to account for at least a 60pc share by 2030, reducing only slightly to 50pc by 2040, state-controlled producer Coal India business development director Debasish Nanda says. India's thermal power generation also includes natural gas, naphtha and diesel. India and more than 200 other countries reiterated a pledge to accelerate "efforts towards the phase-down of unabated coal power" at the UN Cop 28 climate summit in Dubai last year. To reduce its reliance on coal, the Indian government has outlined plans to become a gas-based economy. It aims to increase the share of gas in its energy mix to 15pc by 2030 from about 6pc in 2022. And it plans to expand its renewable energy capacity to 500GW by 2030 from 197GW now. Solar power currently makes up the highest share of this, with 43pc or 81GW, followed by wind power with 46GW. India is set to add a further 6GW of solar-based capacity and 1.2GW of wind-based power by March 2025, according to Niti Aayog. The power sector accounted for more than half of the increase in India's total emissions in 2023, the IEA says. Accelerating the transition is essential, but progress in individual states is highly uneven, according to a report by US-based think-tank the Institute of Energy Economics and Financial Analysis and UK think-tank Ember. States such as Karnataka and Gujarat have effectively integrated renewable energy into their power sectors, but others have not. India has many central and state-level policies to encourage energy independence, but implementation has not been adequate or transparent, the report says. Power move Firms are taking steps to boost renewable capacity. India's largest power producer, NTPC, primarily relies on coal but its 2032 plan to become a major diversified energy supplier includes renewable and nuclear power generation, chairman and managing director Gurdeep Singh says. It expects to have about 60GW of renewable energy capacity by 2032, and is looking to add 10GW of nuclear capacity, with an additional 4GW in a joint venture with a nuclear power corporation, Singh says. India also aims to electrify as much of its industrial sector as possible. State-controlled power transmission company Powergrid has set a target to meet 50pc of its internal energy needs through renewables by 2025 and achieve net zero emissions by 2047. Industry experts predict India's energy-related emissions are likely to increase up to 2028 and recede thereafter. But funding still poses a challenge, especially for a country so large. India earlier this year submitted to UN climate body the UNFCCC a call for developed countries to provide at least $1 trillion/yr in climate finance to developing countries from 2025, in reference to the so-called new collective quantified goal. The government says India alone requires $70bn-80bn/yr to fund its green energy goals. By Rituparna Ghosh and Prethika Nair CO2 emissions by sector, India, 2021 India power capacity sources Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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