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UK, Malaysia strengthen energy transition partnership
UK, Malaysia strengthen energy transition partnership
Singapore, 15 December (Argus) — The UK and Malaysia have launched the second phase of the Malaysia-UK Partnering for Accelerated Climate Transitions (UK PACT) fund, which is aimed at supporting Malaysia's energy transition through targeted projects. The UK will provide up to £2.9mn ($3.88mn) in funding across the 2025-26 and 2026-27 financial years, the countries announced on 12 December. The programme aims to establish a pathway for private and public sector participants through a strategic roadmap for green finance, as well as enable investment into energy storage solutions and grid infrastructure, and strengthen carbon market mechanisms. This second phase builds on the support provided by the UK over 2020-23 and is in line with Malaysia's more recent climate policies such as its national energy transition roadmap, its nationally determined contribution (NDC) for 2035 and its upcoming climate change bill. The first iteration of the programme involved up to £2.6mn in funding for projects in priority areas such as energy, nature and low-carbon policies. The Malaysia-UK PACT in July called for proposals from eligible organisations to develop projects focusing on objectives such as developing a sustainable finance roadmap, improving project bankability by establishing a regulatory framework for renewable integration solutions with a focus on energy storage systems, and providing support to industry and high-emitting sectors to prepare to participate in the domestic emissions trading scheme. The UK has partnered with multiple other countries such as Thailand, Indonesia and most recently, the Philippines, under the PACT programme, which is governed and jointly funded by the UK's Foreign, Commonwealth and Development Office and Department for Energy Security and Net Zero. Malaysia intends to hit peak emissions by as early as 2030 and no later than 2034, depending on the availability of support. In its latest NDC, it aims to achieve an absolute emissions reduction of 15mn-30mn t of CO2 equivalent (CO2e) by 2035 from its projected peak level, which it did not indicate. The country will introduce a carbon tax next year, with an initial focus on the iron, steel and energy sectors. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: Indonesian waste oil supply to fall in 2026
Viewpoint: Indonesian waste oil supply to fall in 2026
Singapore, 15 December (Argus) — Indonesia's implementation of a 50pc biodiesel (B50) blend mandate and ongoing palm plantation seizures may raise palm oil prices and reduce global waste oil supply, likely keeping palm oil mill effluent (Pome) oil prices supported in 2026. The country raised its biodiesel blend target by 5pc to 40pc starting from February 2025 and is targeting another 10pc increase to 50pc by the second half of 2026 . The higher blending mandate would lower total palm oil exports by about 11-12pc in 2026 compared with 2024 and 2025, Indonesian agriculture ministry official Baginda Siagan said at the 21st Indonesian palm oil conference (IPOC2025) in November. This would likely support an increase in crude palm oil (CPO) prices, industry analysts said. Prices of CPO and palm-based waste oil like Pome oil are linked because market participants historically priced Pome oil at a set discount to CPO values, and they are both feedstocks for biofuel production. But waste oil export values have mostly been at a premium to CPO this year due to Indonesia's move to suspend exports of unprocessed Pome oil and used cooking oil (UCO) since 8 January , tightening the global supply of waste oils. Indonesia has yet to resume issuing export permits. The restrictions have since driven exporters to explore refining Pome oil for exports. Refined Pome oil exports totalled 440,000t in January-November, according to Kpler data. No refined Pome oil was shipped in 2024 prior to the export pause because exporters directly shipped unrefined material. Refined Pome oil has lower metals and impurities than unprocessed material and can be used for hydrotreating to produce hydrotreated vegetable oil or hydroprocessed esters and fatty acids synthetic paraffinic kerosene (HEFA-SPK) with less processing than crude Pome oil. Argus launched the refined Pome oil fob Indonesia assessment on 15 October to reflect the value in this emerging export market, and it has since been priced above rival regional biofuels feedstock assessments. Indonesia's export pause was a key factor driving up waste oil prices in the region to three-year highs in September ( see chart ). The duration of Indonesia's ban on crude Pome oil and UCO exports remains uncertain, but the government may be tempted to maintain restrictions to keep more feedstocks available to expand domestic biofuels production. This would continue to limit seaborne supply and support prices on a fob basis. Speaking at IPOC2025, Indonesia's palm plantation fund (BPDP) head suggested exploring alternative waste feedstocks such as UCO for use in the B50 programme to reduce Indonesia's reliance on CPO as biodiesel feedstock. State-owned Pertamina is already trialling sustainable aviation fuel (SAF) production through co-processing UCO at its Cilacap refinery since the second quarter of 2025, and shipped about 32,000 litres of UCO-based HEFA-SPK in its first shipment in August . The country is targeting the production of 1mn kilolitres/yr SAF by 2030 . Plantation seizures may squeeze CPO output Palm oil production in Indonesia may be squeezed by the government's ongoing efforts to reclaim plantation lands it said were illegally acquired this year. The Indonesian government in January formed a forestry task force for this purpose and reclaimed over 3.3mn hectares of plantation land by August, according to its website. The land will be transferred to and managed by state-owned Agrinas Palma Nusantara, which was set up in February to oversee the confiscated land. Agrinas has been recruiting staff to operate its plantation business but the availability of harvesters still poses a challenge, it said in a press release on 1 December. Many in the sector expect the change in land management to reduce plantation efficiency starting in 2026. But the extent of yield and production losses caused by the land seizures remains uncertain, said industry analyst Thomas Mielke at IPOC2025. He estimated palm oil output in the country may decline to 49mn t in 2026 from 49.4mn t in 2025. Ministry officials at IPOC2025 did not comment on the ongoing palm plantation seizures. The collection and export of Pome oil from mills may also fall on the back of fewer fresh fruit bunches harvested from oil palm plantations due to the land seizures. Less CPO available for processing into palm olein for domestic cooking oil could also cause UCO supply to shrink. Traceability concerns continue to threaten demand Meanwhile, concerns surrounding Pome oil traceability have continued among European buyers this year, prompting some EU Member States including Portugal , Germany and Ireland to disincentivise Pome oil usage in their biofuels mandates. Most recently in October, the Dutch emissions authority (NEa) said that it will investigate the international Pome oil supply chain with a focus on "fraud risk", and that any findings could be used in policy recommendations. European Pome oil demand is currently expected to remain stable in the near-term at around 1.9mn t/yr, according to Argus Analytics, but removal of policy support by more markets in the new year could tip the balance. Higher demand for Annex IX Part A feedstocks under the RED III may drive other EU countries to absorb Pome oil volumes diverted from markets that have chosen to disincentivise the feedstock by removing it from the classification. By Malcolm Goh Asian waste oil prices ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Australia to boost battery subsidy scheme for residents
Australia to boost battery subsidy scheme for residents
Sydney, 15 December (Argus) — Australia's federal government will now spend A$7.2bn ($4.8bn) on subsidies for households and small businesses to buy battery storage systems as it grapples with increasing small-scale solar power installation. The programme will grow from the prior A$2.3bn, which was the previous amount allocated to the initiative, because of over-subscription to the scheme so far, Australia's energy minister Chris Bowen said on 13 December. The initiative provides discounts of about 30pc for the upfront installation costs for small-scale battery storage systems with a range of 5-100kWh. The discount has already been taken up by 155,000 customers, Bowen said. The expansion will see 2mn batteries totalling 40GWh capacity installed by 2030, the government estimates. Canberra will tier the subsidy starting May 2026. This means that the discounts are applied to the first 50KWh, for systems up to 100KWh. This links the discount to the number of certificates the system will generate under Australia's small-scale renewable energy scheme. The certificates work by a retailer or installer applying for the credits, which will then be sold on behalf of the buyer, reflected in a discount on the quoted cost of a battery system. After 1 May 2026, the general number of certificates created by each KWh of a battery will be cut from 8.4 to 6.8, with the additional adjustments for medium and large systems. Australia's retail energy prices have soared despite large-scale take-up of rooftop solar in the sun-drenched nation's suburbs, with one in three households in Australia having a rooftop solar array. Canberra is hoping that switching energy usage to the hours in the middle of the working day could help alleviate rising bills, which are a political problem for the government. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
In focus: Australia’s CAC exit fuels uncertainties
In focus: Australia’s CAC exit fuels uncertainties
London, 12 December (Argus) — Australia's long-awaited permanent exit arrangements for fixed delivery carbon abatement contracts (CACs) have sparked uncertainties that are expected to linger in the market throughout at least the first half of 2026, making it harder to forecast fundamentals and prices, market participants have warned. Companies and landholders with active fixed delivery contracts with the federal government — spanning nearly 300 CACs with a combined remaining volume of around 84mn Australian carbon credit units (ACCUs) — will have the option to exit their agreements if they meet certain conditions, the Clean Energy Regulator (CER) announced earlier this month. They will need to deliver at least 25pc of the outstanding volume of ACCUs under their contracts as of 1 January 2025 to be eligible for a 60pc discount on their exit payment, known as buyer's market damages. This would then allow them to sell the remaining 75pc contracted volume elsewhere, potentially unlocking up to more than 60mn ACCUs into the secondary market within the next five years. More than 80pc of the outstanding volumes are in fixed delivery CACs held by just three carbon project developers — GreenCollar, Agriprove and Corporate Carbon Group — according to the latest CER's CAC register data ( see table ). Part of the remaining contracts come from dozens of landholders that work with major service providers including Climate Friendly and Shell Australia's subsidiary Select Carbon . Contract holders have been assessing their CACs, but some have already identified that a few "contractual terms are quite onerous and may not be worth the financial incentive" of the 60pc exit fee discount, a source at a developer told Argus . And in the case of service providers like Climate Friendly, decisions on whether to participate in the voluntary exit arrangement will be made by each CAC holder, co-chief executive Josh Harris said. "Approximately one-quarter of the portfolio of more than 180 land sector projects that we provide services to have fixed delivery CACs, with around 3.2mn ACCUs remaining to be delivered under the original delivery volumes," Harris said. "As agent, Climate Friendly will provide information on the opportunity, and it will be our project partner's choice whether to exit their CAC or not," he added. Clarity not expected until later in 2026 More clarity around the total estimated volumes and the timing of their release is not expected until at least the start of the second half of 2026, after the CER starts to disclose information about the uptake of the voluntary exit arrangements. Contract holders will need to submit an expression of interest by 30 June 2026, with permanent exit arrangements starting from 1 July 2026. They will need to deliver the minimum 25pc volume before they can exit all remaining delivery milestones and receive the 60pc exit fee discount. All obligations will need to be fulfilled by 31 December 2030 if they opt in — including contract holders with CACs currently expiring beyond that date, such as in 2031 or 2032, the CER told Argus on 12 December. Suppliers would retain the flexibility to continue delivering more ACCUs than the 25pc minimum and be paid contract prices averaging around A$12/t CO2 equivalent (CO2e) if they wished so. That would be unlikely to happen, unless spot prices in the secondary market fell sharply in the future, market participants said. Argus ' daily price assessments for generic ACCUs averaged A$35.71/t CO2e so far this year, ranging between A$32.50-38.65/t CO2e. Prices ended this week at A$36.25/t CO2e . The results of the exit arrangements will be published monthly, alongside updates to the CAC register, according to the CER. Around 13mn ACCUs were released from fixed delivery CACs across four pilot exit windows in March 2022-December 2024 ( see table ). Mixed views The permanent CAC exit policy gives land managers "greater certainty around any CAC obligations and offers a clear incentive for early compliance through discounted exit fees", Harris told Argus . The CER said it designed the permanent arrangement with "flexibility and clarity" to encourage widespread uptake and maximise the delivery of outstanding contracts. But while sources at developers said at first look it would be financially beneficial for developers to opt in, several months will be required to assess the detail of the proposal. "It's quite complicated — even the regulator struggled to explain it to the market," a source at a developer said. The CER carried out a closed webinar for CAC holders and service providers right after the announcement, but several participants who attended said many were left with more questions than answers, with specific details yet to be clarified. And several active participants in the ACCU market complained that they were left out of the webinar, having received no invitation. "Market-moving information may be shared in such webinars, so the best practice would be inviting all participants," a trader said. The new exit arrangements might also put pressure on developers with large outstanding balances, making it harder for them to deliver projects into the market, according to market participants. A particularly challenging case is Agriprove, which has only five CACs awarded in auctions in 2016 for a delivery period of 10 years, but for a combined committed volume of 18.18mn ACCUs. The company has delivered just 3,660 units so far, with another 3,905 units having been released through previous exit windows, which means its outstanding balance is still 18.17mn units. Agriprove focuses on soil carbon projects and currently has 616 registered ACCU projects — the largest for a single developer across the scheme, making nearly 25pc of the over 2,400 of currently valid projects. But those projects have received a combined 123,945 ACCUs, as soil carbon is a relatively recent method that is yet to lead to higher issuances. The company did not reply to queries sent by Argus . Other cases GreenCollar and Corporate Carbon Group, on the other hand, are among the developers with the biggest ACCU issuances historically, having delivered significant volumes to the CER through their CACs. Corporate Carbon had been issued around 15mn ACCUs as of earlier this year, with forecast future issuances of around 3mn ACCUs/yr from a mix of owned projects and offtake agreements with other developers and partners in the industry, head of carbon trading Angus Robertson told Argus in April. The company declined to comment on the new CAC exit arrangements. GreenCollar claims to be the largest nature-based ACCU developer, with a market share of over 40pc. Subsidiaries Terra Carbon and Devine Agribusiness Carbon have received 26.8mn and 2.11mn ACCUs so far, respectively, out of a total of 176.6mn, with the combined 28.9mn volume the highest among all developers, just above 27.8mn ACCUs from bioenergy company LMS Energy, which focuses on waste management methods. GreenCollar also declined to comment. But it told Argus late last year that it expected its deliveries to continue until the end date of the last contract, which is in 2032. "We have always fulfilled our obligations under CACs and have at times exercised options to pay exit fees, on occasion rescheduling some deliveries," it said back then. Some contract dates were moved because the start dates of some projects were later than originally anticipated, it said. The company said it never had to purchase ACCUs in the secondary market to fulfil its delivery obligations. CAC holders that fail to deliver their contracted volumes would need to pay the full buyer's market damages and may face other consequences, according to the CER. CAC exit windows ACCUs released 1st pilot exit window (4 March 2022-30 June 2022) 2.6mn 2nd pilot exit window (1 July 2022-31 December 2022) 1.7mn 3rd pilot exit window (1 January 2023-30 June 2023) 4.1mn 4th pilot exit window (1 July 2023-31 December 2024) 4.5mn Permanent exit (1 January 2025-31 December 2030) up to 21mn CER Biggest fixed delivery CAC holders Company Remaining deliveries GreenCollar (Terra Carbon and Devine Agribusiness) 34,752,052 Agriprove 18,174,435 Corporate Carbon* 16,649,110 Others 14,528,153 Total 84,103,750 *includes subsidiary Paniri Ventures CER's CAC register Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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