New pledges expected at UN climate talks: Kerry
The opening days of the upcoming UN climate talks will include a number of new commitments from countries to take more action to reduce emissions and support global decarbonization, US climate envoy John Kerry said today.
The US has been working with a number of countries to roll out new commitments at the upcoming UN Cop 27 climate talks in Sharm el-Sheikh, Egypt, ranging from more aggressive climate pledges to agreements to build new renewable energy resources, Kerry said during a State Department briefing.
"We have spent a great deal of time over this past year working with countries around the world to get them to raise their NDCs," Kerry said, referring to the nationally determined contributions (NDC), or pledges, under the Paris Climate Agreement.
Kerry said a number of countries will announce new pledges in coming days, including Mexico, which previously said it is working on an update to its NDC, while more announcements around private sector pledges, deforestation and methane reductions are in the works. The UN conference runs from 6-18 November.
The US has also been working with countries including South Africa and India on new energy transition partnerships , which will be announced at the Cop, Kerry said.
At least year's talks in Glasgow, Scotland, Germany, the UK, the US, France and the EU agreed to support South Africa's energy transition and in particular to phase out its use of coal.
Kerry also previewed a new agreement with host nation Egypt that he said will call for it to reduce its natural gas use and to build out 10GW of new renewable energy capacity.
"There will be more to say about that next week," he said.
Kerry said the US has four priorities going into the talks, including making sure countries stick to their past commitments.
"We seek a collective message out of the Cop that the world is going to remain strong on climate ambition and will build on, not go backward, the pledges" from Glasgow, he said.
Kerry also said the US is committed to finding a path forward to address loss and damage, one of the top priorities for the Egyptian government leading the talks. It refers to providing financial support for countries already suffering from climate-related events such as storms and sea-level rise.
"We are anxious to do this in a very cooperative, non-confrontational way," he said.
Some non-governmental groups have warned the issue could end up derailing talks around other, less controversial issues at the Cop if certain countries feel it is not addressed appropriately.
Kerry did not call for a specific outcome on the issue, but said the US supports "coming out with some kind of structure that provides appropriate financial arrangements."
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Q&A: Corporate reporting and certification schemes
Q&A: Corporate reporting and certification schemes
London, 28 June (Argus) — Corporate reporting standards and obligations are becoming more granular and falling under greater scrutiny across the EU, after new rules came into force at the start of 2024. Argus spoke to net zero adviser Nils Holta at environmental solutions provider Ecohz to review changes to EU legislation and consider their impact on wholesale energy attribute certificates markets. Edited highlights follow: Let's start by decoding the acronyms and taking stock of changes to reporting standards this year. What do the principles of the CSRD and ESRS look like? How do these align with the EU Taxonomy? These are all thematically related pieces of legislation, that are not formally linked to each other. The Corporate Sustainability Reporting Directive (CSRD) and the EU Sustainable Investment Taxonomy are two of the angles of a sustainability transparency triangle completed by the Green Claims Directive (GCD). Through these policy mechanisms, the EU seeks to cover sustainability reporting, sustainability criteria for investments, and marketing information to consumers. Essentially, the EU is trying to add sustainability as a new dimension of the single market, alongside standardised comparisons on quality and price. The CSRD relates more to the finance side. Through the annex with the European Sustainability Reporting Standards (ESRS), it details how companies should report on their sustainability impact, their sustainability-related risks, and any financial opportunities that arrive as a result of sustainability matters. It has been developed as an addition to European financial disclosure requirements, and in Norway, for instance, it has been transposed through amendments to the "accounting law" (Regnskapsloven). For financial undertakings, the Sustainable Finance Disclosure Regulation (SFDR) plays much the same role, albeit at a higher level of granularity. On the consumer-facing side, companies will soon be required to adhere to the GCD when promoting their products' environmental profiles to final consumers in what the EU calls "explicit environmental claims". While not quite the same as sustainability reporting, it fits in a market dynamic where the EU expects economic actors to be more transparent about the environmental qualities of their products — like we are used to for price and quality. Finally, we have the EU Taxonomy for sustainable activities, or just the Taxonomy. The Taxonomy is a list of economic activities with clear criteria on how they can be performed sustainably, and, in some cases, how they can be considered a transitional activity to more sustainable options. The Taxonomy also mandates that large undertakings and financial actors disclose the percentage of their Capex [capital expenditure], Opex [operating expenditure], and turnover that is invested in, finances, or derives from activities that are considered sustainable under the Taxonomy. Here is the link to the CSRD (ESRS), GCD and SFDR. If you are required to report on the percentage of your investments or turnover that is associated with sustainable activities, you need to know how all the companies you invest in are performing. And through the CSRD they are required to share this information in a transparent and streamlined manner. If, as a company, you want to make a claim about a product's environmental profile, you are now also required to possess and sort the information necessary to found that claim through the same directive. So here we have the triangle — the Taxonomy and SFDR push investors towards sustainable investments. The GCD provides consumers with a choice to consume sustainably, and the CSRD and ESRS ensure that companies have the information necessary for the other two to work. So the EU wants you to base Taxonomy reporting or environmental claims on the information published in your CSRD reporting? Not quite. I should stress at this point that EU law does not require companies to use the same methodologies for their CSRD reporting as for explicit environmental claims under the GCD or for showing criteria alignment with the Taxonomy. The simple reason is that communication to different audiences — shareholders, financial sector institutions, consumers — might require different approaches. It is, however, very simple to base claims under the Taxonomy or GCD on information gathered for CSRD reporting, and I have seen companies rely on CSRD reporting for claims of Taxonomy-alignment in their annual reports. How are things changing within the CSRD in terms of how industrial and corporate (I&C) companies will need to document energy — power and gas — consumption throughout their supply chains? What does it mean in terms of scope 2 and 3 emissions? This is a good place to clarify terminology. The CSRD is an EU directive that mandates sustainability reporting, sets out how member states are responsible for making sure companies report, and details which categories of companies need to report. All in all, we are taking about at least 50,000 EU-based companies and maybe another 10,000 non-EU companies with operations in the EU, as a rough assessment. The ESRS are the technical standards, outlining — over some 300 pages — how companies can assess what information they need to report and how this can be reported. The ESRS go into detail regarding how questions about energy consumption and climate transition plans or supply chains are asked and framed. Thank you for the clarification, and now back to the market-based vs location-based reporting? In general, the ESRS move towards market-based reporting. Emissions are to be reported by scope — 1, 2 and 3 — separately and using both market-based and location-based methodologies for Scope 2. They are also to be reported against total turnover, so investors can see the greenhouse gas intensity of their investments' turnover. At the same time, the ESRS clearly state that energy consumption must be reported using the market-based methodology in the case of Scope 2, and that it "can" be market-based in Scope 1, which for most companies would primarily relate to gas. The latter is highly technical and is tied to the EU emissions trading system monitoring and reporting requirements. Disclosing companies must report Scope 3 as it was reported to them. There is no option to not report on Scope 3 emissions outside of Europe, which means that these 60,000 or so companies will push their own reporting requirements through their entire value chain. It also means that oil and gas companies will finally need to include emissions from combustion of their own products in their sustainability reporting. Considering that changes to the CSRD will lead to greater focus on Scope 3 emissions, how is this likely to impact the energy attribute certificates (EAC) markets? Are you already seeing changing approaches to EAC procurement? How do biomethane and hydrogen fit into the picture, and is there a role for carbon offsets? What we are seeing is a greater corporate interest in understanding their own value chain and getting their suppliers to cover Scope 2 consumption with EACs. They can even use the divergence between location and market-based reporting to stress how much they actually achieve by sourcing renewable energy. The result is quite literally the difference between the two numbers. The ESRS do not open for carbon offsets as a way of reducing total emissions. Any offsets must be reported separately. Biomethane and hydrogen would both serve to decarbonise your gas combustion, so mainly Scope 1. However, the requirements for credible claims to consumption are tied to a bundled model, so we expect less focus on certificate trade and more focus on efficient value chains to deliver the product as a whole. There are a lot of open questions here tied to member state transposition of the Renewable Energy Directive (RED) III — and in some cases RED II — and to the coming Union Database for renewable fuels. How will the GCD impact consumer disclosure requirements and how does it tangentially relate to the Taxonomy? Do you expect this to also drive more granular purchases in EAC markets? When procuring EACs, will additional specifications such as eco labels become more prominent in the market? There is no specific link between the GCD and the Taxonomy, but Taxonomy-alignment would definitely be one of the things that can be communicated and substantiated in a way that is aligned with the GCD. Using an eco-label is a way to distinguish your product among several who all use renewable electricity. However, it is difficult to assess exactly how companies and consumers will react to this information in the long term. In the near future, we expect the GCD to lead to a reduction in environmental performance claims overall, at least until companies have a decent understanding of what and how they should communicate. The fine is up to 10pc of total turnover. There are often questions around how nuclear power is viewed in the EU Taxonomy — can you clarify that? And how do you see nuclear power — through scope 2/3 — playing a role in I&C companies documenting carbon neutrality through disclosure mechanisms? There has been a growing trend of energy suppliers offering carbon-neutral tariffs as opposed to renewable owing to the greater cost of documenting renewables through EACs, on top of already higher outright power and gas prices. Do you see I&C customers taking a similar route? Under the Taxonomy, nuclear is not considered renewable. It is, however, acknowledged as carbon-neutral, and we see several EU initiatives targeted at promoting "low-carbon" rather than renewable solutions. There is also an addendum to the Taxonomy, where nuclear and gas-fired power plants can be considered Taxonomy-aligned under certain circumstances. For gas, this relates to replacing coal and being time-limited in nature; while for nuclear, it is tied to a series of environmental and waste-treatment requirements. As long as the market recognises a qualitative difference between renewable and nuclear, EACs for each will be priced differently. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Biden, Trump trade attacks in presidential debate
Biden, Trump trade attacks in presidential debate
Washington, 28 June (Argus) — The first presidential debate of the 2024 election drew out few new details on energy policy, as President Joe Biden and former president Donald Trump hammered each other on issues such as inflation and the state of the US economy. The debate, held in Georgia on Thursday without a live audience, marked the first time Biden and Trump have shared a stage since their last debate in 2020. Biden, who is trailing Trump in many polls, at times struggled to clearly articulate his policy positions — or even to be heard — while Trump repeatedly sought to blame Biden for issues such as high inflation and the outbreak of military conflicts in Ukraine and Israel. "He has not done a good job," Trump said. "And inflation is killing our country. It is absolutely killing us." The substance of the debate was largely overshadowed by the candidates' inability to dispel voters' concerns about them. Needing to put to rest worries about his age, the 81-year-old Biden often appeared feeble and confused. Trump refused to acknowledge he lost the last election and continued to defend the mob that attacked the US Capitol on 6 January 2021. Biden throughout the debate defended his record on the economy, while focusing many of his attacks on Trump's personal conduct, including Trump's conviction on 34 counts in a case involving alleged hush money payments to an adult film star. Biden also criticized Trump's handling of the Covid-19 pandemic, which Biden said ultimately contributed to high inflation. "He didn't do much at all," Biden said. "By the time he left, things were in chaos." The debate repeatedly focused on federal tax policy, particularly a range of tax cuts enacted during Trump's presidency that are set to expire in 2025. A key provision of that tax package cut the top corporate tax rate to 21pc from 35pc. Biden said he would make the tax system more fair by increasing taxes on the wealthy, while arguing that Trump's policies would result in higher inflation and additional costs for consumers. Trump has said he would extend the expiring tax cuts, which are expected to cost $4 trillion over a decade, in addition to seeking deeper tax cuts and a 10pc tariff on all imports. Trump said he rejected the findings of many independent economists that such a tariff would drive up prices for consumers and add to inflation. "It's just going to cause countries that have been ripping us off for years — like China and many others, in all fairness to China — it's going to just force them to pay us a lot of money." Biden argued Trump's policies would result in higher inflation and additional costs for consumers. "He now wants to tax you more by putting a 10pc tariff on everything that comes into the United States of America," Biden said. Trump pivoted to issues such as energy and regulations when he was asked about his actions during the attack on the Capitol. "On January 6, we were energy independent," Trump said. And when pressed on whether he would pursue policies to deal with climate change, Trump focused on having "clean air" and "clean water", while defending his decision to pull the US out of the Paris climate accord. "It was a rip off of the United States, and I ended it because I didn't want to waste that money," Trump said. Biden said Trump did not do a "damn thing" when in office to clean up the air and water and criticized his inaction on climate change. Biden defended his suite of climate rules and support for clean energy, but he failed to tout passage of the Inflation Reduction Act, which provided support for electric vehicles, renewable energy and advanced manufacturing. On foreign policy, Trump insisted that a variety of global conflicts would have never occurred if he was in office. He contended that the war in Ukraine would abruptly be resolved if he were re-elected. "I'll have that war settled," Trump said. "I will get it settled, and I'll get it settled fast before I take office." Biden defended his record on foreign policy, saying he ushered through crucial support that has helped in the defense of Ukraine and Israel. Biden said that stood in contrast to Trump, who he said "encouraged" Russian president Vladimir Putin to invade other countries and has threatened to undermine Europe's defenses against military attacks. "This is a guy who wants to pull out of NATO," Biden said. The debate occurred just days before the US Supreme Court is expected to decide whether Trump, or any other president, should be immune from criminal prosecution for actions taken in office. Trump's attorneys have argued he should be immune from prosecution for any official acts while holding office, which could affect a criminal charge that he sought to undermine the 2020 election. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Mexico to tap economist for energy minister
Mexico to tap economist for energy minister
Mexico City, 27 June (Argus) — Mexican president-elect Claudia Sheinbaum appointed economist and lawyer Luz Elena Gonzalez to become energy minister in her government that will take office on 1 October. Gonzalez has a long record in public service and served as finance director of the Mexico City government during Sheinbaum's tenure as the capital's mayor from 2018-2024. She has no direct energy industry experience. Sheinbaum won a convincing victory in the 2 June presidential elections and will take office on 1 October when Morena political party founder and current president Andres Manuel Lopez Obrador ends his six-year term. Gonzalez will face a range of challenges as energy minister including completion of the long-delayed Olmeca refinery, development of a plan to tackle state-owned Pemex's enormous debt, expansion of Mexico's electricity generation and grid capacity with a renewed focus on clean energy and the construction of natural gas storage. She will also be in charge of policy decisions that will define the role of private-sector investors in the energy sector. Gonzalez will replace Miguel Angel Maciel, appointed following energy minister Rocio Nahle's resignation in October 2023 to pursue the Veracruz gubernatorial election. Nahle, who took office as energy minister in 2018, led efforts to build the Olmeca refinery and has been a strident supporter of Lopez Obrador's energy sovereignty policy that has sought to restrict private-sector investment. Sheinbaum also appointed Jesus Esteva as transport minister, Raquel Buenrostro as civil service minister, David Kershenobich as health minister and Edna Elena Vega as urban and rural development minister. All of the candidates appointed today have either worked with Sheinbaum during her period as Mexico City mayor or in Lopez Obrador's government. By Rebecca Conan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Supreme Court limits SEC enforcement power
US Supreme Court limits SEC enforcement power
Washington, 27 June (Argus) — The US Supreme Court has thrown out the US Securities and Exchange Commission's (SEC) ability to use in-house proceedings to seek civil penalties for securities fraud, finding those cases must instead be brought before a jury trial in federal court. The Supreme Court, in a 6-3 ruling in the case SEC v Jarkesy , said continuing to adjudicate those cases internally would be a violation of the the Seventh Amendment of the US Constitution, which protects the right to a jury trial in some cases. The court's ruling marks a win for conservatives that have pushed to curtail the powers at the SEC and other federal agencies, which often rely on in-house administrative law judges (ALJs) to adjudicate enforcement cases that can be complicated and highly technical. The Supreme Court's ruling centered around an enforcement case filed in 2013 against an investment fund owner named George Jarkesy, who the SEC alleged defrauded investors by misrepresenting investment strategies and inflating the claimed value of the fund. The SEC relied on part of the 2010 Dodd-Frank financial law to pursue the case internally through an ALJ, which imposed a $300,000 civil penalty against Jarkesy, which he then challenged in federal court. But chief justice John Roberts, writing for the majority, said the securities fraud charges could only be brought through a lawsuit in federal court, where there would be an independent judge, a jury trial and broader due process protections. Roberts said that the US Congress had exceeded its powers when it said that securities fraud lawsuits could be adjudicated internally by the SEC, which he said would concentrate the roles of "prosecutor, judge and jury in the hands of the executive branch." The court's opinion could have ramifications across the federal government for enforcement cases that also used ALJs, and which have been put on hold awaiting the Supreme Court ruling. The US Federal Energy Regulatory Commission (FERC) relied on an ALJ when it sought $40mn in penalties from the owner of the Rover natural gas pipeline and a separate case that is seeking up to $223mn in fines from France's TotalEnergies for natural gas trades in 2009-12. FERC chairman Willie Phillips said the agency would take a "careful look" at the opinion but did not have an immediate comment. Although the SEC and other agencies can still pursue the same enforcement cases under the Supreme Court's holding, a jury trial can be more resource-intensive and unpredictable than a case brought before an ALJ, who usually has years of experience in the technicalities of securities and energy laws. Public interest groups have worried the result will be reduced enforcement of federal laws meant to protect the public from fraud and manipulation, particularly in cases where penalties are small. Justice Sonia Sotomayor, who wrote the dissent, said the court's decision was a "power grab" that ignored the policy considerations that Congress made when it authorized the SEC to pursue securities fraud cases internally, such as greater efficiency, expertise, predictability and uniformity in how federal securities laws are enforced. Sotomayor said the court had also disregarded its own precedent, set in a case in 1977, that affirmed agencies could pursue civil penalties internally. The Supreme Court did not rule on the merits of other issues in Jarkesy, such as the claim that the process for appointing ALJs was unconstitutional. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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