Mexican electricity law temporarily suspended: Update
Adds recipient of injunction.
A court temporarily suspended Mexico's new electricity law yesterday, a day after it took effect, signaling the start of a wave of litigation against the controversial reform.
"While this interim relief was requested by one company, it will have general effect," stated a Mexico City court judgment yesterday.
Zuma Energia was awarded the first injunction in relation to its La Orejana solar park in Sonora, but Argus understands that developers EDF and Naturgy also secured injunctions against the law. More are expected tomorrow.
Zuma Energia, originally backed by UK private equity fund Actis and acquired last November by China's State Power Investment, is developing 816MW in wind and solar projects in Mexico.
Mexico's new electricity law was published in the official gazette on 9 March after a fast-tracked legislative process launched by President Andres Manuel Lopez Obrador on 1 February.
The law prioritizes dispatching CFE-generated power regardless of cost or environmental impact, revokes self-supply permits and begins a review process of all long-term power purchase agreements (PPAs) between CFE and independent power producers (IPPs).
The temporary suspension of the law was awarded "to guarantee the rights to competition and a free market," states the decision.
Some 40,924 MW, or 48pc, of Mexico's installed capacity is operated under private-sector generation permits that will all be affected by the reform, lawyers have said, predicting an avalanche of legal action under Mexican law and foreign trade agreements.
The law will impact up to $39bn of investments in the renewable energy sector alone, Mexican wind and solar associations Amdee and Asolmex said.
Lopez Obrador's government has passed a flurry of regulatory changes over the past two years that have sought to strengthen CFE's market position despite the 2014 energy reform that called for an even playing field among market participants. But the courts have largely sided with private company legal action over the changes and the supreme court recently set aside the government's electricity policy because it contravened the constitutional right to free competition.
The government has two days to appeal the judgment.
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South Korea to require use of SAF for flights from 2027
South Korea to require use of SAF for flights from 2027
Singapore, 30 August (Argus) — South Korea said it plans to require all international flights departing from its airports to use a mix of 1pc sustainable aviation fuel (SAF) from 2027. This comes as more countries are adopting SAF mandates in accordance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Singapore earlier this year announced a 1pc SAF blending mandate from 2026 , with plans to increase to 3-5pc by 2030, subject to global developments and wider SAF availability and adoption. The Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport announced the 'SAF Expansion Strategy' on 30 August, which includes a target for South Korea to capture 30pc of the global blended SAF export market. While not explicitly stated in the statement, some South Korean refineries expect co-processed SAF to be allowed to meet the country's mandate, sources said. This is important as the country already produces small quantities of SAF via co-processing at existing refining facilities, with three of South Korea's four domestic refineries planning to produce SAF through co-processing by the end of this year . Key strategies The ministries outlined three key strategies to achieve the SAF consumption target — gradual expansion of domestic SAF demand, ensuring a stable domestic supply capacity, and establishing a SAF-friendly legal and institutional environment. Airlines can already refuel with SAF at Korean airports, making South Korea the 20th country to do so as part of their plan to increase domestic SAF demand. The country had tested six flights using 2-4pc imported blended SAF between South Korea and Los Angeles since August 2023. An incentive system is being developed to encourage public and private adoption of SAF, with benefits such as preferential allocation of transport rights, reduced airport facility usage fees and the introduction of airline carbon mileage system for passengers and other benefits. A mid- to long-term roadmap for the gradual expansion of domestic SAF demand will be prepared in early 2025, the ministries said. The country's strategy to secure stable domestic supply capabilities includes considering investment support for domestic SAF production such as tax credits. South Korea's four domestic refineries already plan to invest 4 trillion won ($3bn) in renewable fuels, including SAF by 2030, the ministries said. The government estimates a Hydrotreated Esters and Fatty Acids (HEFA) SAF plant with a production capacity of up to 250,000 t/yr will require an investment of approximately W1 trillion. The supply-side strategy also aims to ease regulations on waste recycling to increase the availability of domestic feedstocks for SAF production. Another strategy is to diversify feedstock and SAF production technology options, with pre-testing expected later this year. The government plans to explore alternative feedstock like microalgae and production pathways such as e-SAF, with a view to developing supply chains. South Korea plans to establish a national standard, certification and testing method for SAF with preparation planned for December 2024. By Deborah Sun Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan faces further delay in nuclear fuel recycling
Japan faces further delay in nuclear fuel recycling
Osaka, 30 August (Argus) — Japan Nuclear Fuel (JNFL) has again extended the start-up of the country's first commercial nuclear fuel reprocessing plant, as it needs extra time to enhance safety features. JNFL, a joint venture of Japanese power utilities, now aims to finish construction of the recycling plant at Rokkasho in north Japan's Aomori prefecture in the April 2026-March 2027 fiscal year, instead of the previous target of "as early as possible" in April-September 2024. The company has also pushed back the completion of building the mixed oxide fuel fabrication plant to 2027-28 from April-September 2024. This is the 27th postponement, far behind its original target of 1997. The repeated delays stemmed from technical issues and safety measures required following the 2011 Fukushima nuclear disaster. Recycling spent nuclear fuel is becoming a critical issue for Japan, as the natural resource-poor country sees the quasi-domestic fuel as an important power source to ensure its energy security and spur its decarbonisation. But the country faces growing constraints on its ability to store radioactive waste, with repeated delays in setting up the reprocessing plant, which may threaten Tokyo's efforts to restart more reactors. Spent fuel has accumulated to 2,968t uranium fuel (tU) at the Rokkasho reprocessing plant, nearing its capacity of 3,000tU. The waste has piled up since 2000 in anticipation of its operation and since shipments to the UK and France by utilities ended in 2001. Japan's overall nuclear waste storage, which has combined capacity of about 24,440tU including Rokkasho's facility, was 81pc full at the end of March 2024, up from 75pc in 2019, according to the trade and industry ministry. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Libyan crude production slips below 600,000 b/d
Libyan crude production slips below 600,000 b/d
Dubai, 30 August (Argus) — Libya's crude output has fallen to below 600,000 b/d, less than half what the country was producing just a month ago, according to figures reported by state-owned oil company NOC. Production has plummeted in recent days after Libya's eastern-based administration announced a blockade on oil output and exports in response to moves by its rival, the Tripoli-based Presidential Council, to replace the central bank governor. Libya produced 591,024 bl on 28 August, NOC said, down from 783,422 bl on 27 August and 958,979 bl on 26 August, NOC said. Production is almost certain to have fallen further on 29-30 August. It represents a more than halving of output in the space of just a month. Production stood at 1.28mn bl on 20 July, NOC said, while Argus assessed the July average at 1.2mn b/d. Total losses over 26-28 August amounted to around 1.5mn bl, worth just over $120mn. NOC said. All of Libya's eastern oil terminals — Es Sider, Ras Lanuf, Zueitina, Marsa el Hariga and Marsa el Brega — received instructions to stop operations at 15:00 local time on 29 August, according to port agents in the country. Some tankers have managed to load crude since the blockade was announced at the start of the week. The New Amorgos and Ohio loaded at Zueitina and Es Sider, respectively, and have since sailed from the country. Five more tankers were scheduled to load crude in the country from today, according to Kpler tracking, four of them in the east. The clash between the rival east and west political factions in Libya had been brewing for over week before the blockade announcement. The eastern-based Libyan National Army (LNA) has imposed several politically motivated oil blockades in the past few years. The LNA ordered the shutdown of the El Sharara field earlier this month, resulting in the loss of around 250,000 b/d of output. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia's Qantas records higher fuel costs in 2023-24
Australia's Qantas records higher fuel costs in 2023-24
Singapore, 30 August (Argus) — Australian airline Qantas Airways recorded a higher fuel bill in the 2023-24 fiscal year to 30 June, as more flights, sustainable aviation fuel (SAF) expenses and carbon offset programmes weighed on costs. Qantas saw its fuel costs rise by 17pc from a year earlier to A$5.32bn ($3.62bn) in 2023-24, according to the company's full-year financial results released on 29 August. The airline group's passenger carrying capacity was up by 21pc on the previous year, with growth in domestic and international capaicty. This saw the group's overall fuel consumption grow to 29mn bl (79,000 b/d), or 18pc up on the previous year. Qantas expects fuel costs in the first half of 2024-25 to remain stable from a year earlier at about A$2.7bn, including hedging and gross carbon costs, with the group forecasting to consume 15.6mn bl of fuel, including SAF. Qantas forecasts domestic group capacity to rise to 104pc of pre-Covid 19 pandemic capacity in the first half of 2024-25. Its international capacity guidance, excluding Jetstar Asia, is expected to rise by about 16pc from the previous year to achieve 102pc of pre-Covid levels in the first half. The group's passenger carrying capacity, measured by available seat kilometres (ASKs), was up on a year earlier by 21pc to 141mn ASK by 2023-24, although this was still about 93pc of pre-Covid levels. Qantas has agreements to offtake SAF, renewing its agreement to buy SAF for flights out of London Heathrow and doubling the size of its corporate customer SAF programme in 2023-24. But the group saw its 2023-24 profit fall, with underlying profit before tax down by 16pc on the previous year to A$2.08bn. By Cara Wong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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