IEA estimates record high fossil fuel subsidies in 2022
Fossil fuel consumption subsidies soared to an all-time high in 2022, as governments sought to temper record energy prices, preliminary data from energy watchdog the IEA show.
Global fossil fuel consumption subsidies reached $1.097 trillion in 2022, the IEA estimated — double on the year and a 46pc increase on the amount in 2012, previously the highest on record. The watchdog's preliminary data show that in 2022, subsidies worth $399bn were spent on electricity and $346bn on natural gas — respectively double and more than double on the year. Oil subsidies accounted for $343bn, which remained lower than oil subsidies in 2012 and 2013. But coal subsidies totalled $9bn, the highest on since IEA records began in 2010.
Many interventions to limit the effects of energy price volatility in advanced economies did not meet the IEA's definition of fossil fuel consumption subsidies, the organisation said, given that average end-user prices held above market values. More than $500bn in extra spending in advanced economies was committed to bring down energy bills, in addition to the subsidies, the IEA said.
The Glasgow Climate Pact, signed at the UN Cop 26 climate summit in 2021, called on countries to "phase-out… inefficient fossil fuel subsidies, while providing targeted support to the poorest and most vulnerable". Also at Cop 26, more than 20 countries, including most G7 nations, pledged to phase out public financing of unabated coal, oil and gas projects abroad by the end of 2022.
Concerns mounted ahead of Cop 27 that Russia's war in Ukraine and subsequent fears over energy security could overshadow the pledge. The UK, Denmark, Sweden, Finland and France have "almost completely ended their international support for fossil energy projects", with no exceptions for gas or LNG infrastructure, non-governmental organisation Oil Change International said. Canada has also taken measures to halt overseas funding for fossil fuels.
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US House to vote on waterways bill
US House to vote on waterways bill
Houston, 22 July (Argus) — The US House of Representatives is expected to vote on 22 July on a waterways bill that would authorize new infrastructure projects across ports and rivers. The Water Resources Development Act (WRDA) is renewed typically every two years to authorize projects for the US Army Corps of Engineers (Corps). The bipartisan bill is sponsored by representative Rick Larsen (D-Washington) and committee chairman Sam Graves (R-Missouri). The full committee markup occurred 26 June, where amendments were added, and the bill was passed to the full House . A conference committee will need to be called to resolve the different versions of the bill. The major difference between the bills is that the House bill does not include an adjustment to the cost-sharing structure for the lock and dam construction and other rehabilitation projects. The Senate Committee on Environment Public Works passed its own version of the bill on 22 May, with all members in favor of the bill. The House version of the bill approves modifications to the Seagirt Loop Channel near the Baltimore Harbor in Maryland, along with 11 other projects and 160 feasibility studies. One of these studies is a $314.25mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Iraq begins importing Turkish power to cut crude burn
Iraq begins importing Turkish power to cut crude burn
Dubai, 22 July (Argus) — Iraq's prime minister Mohammed Shia al-Sudani on Sunday inaugurated a power transmission line connecting the country's northern region with Turkey, one of several steps Baghdad is taking to tackle its gruelling electricty outages and to reduce its dependence on burning crude in its power plants. The 115km line connects to a power station west of Mosul and will supply 300MW to the northern provinces of Nineveh, Salahuddin and Kirkuk during peak loads. Delayed for two decades, the project is part of Iraq's strategy to connect to neighbouring grids and "integrate into the regional energy system, allowing for diversity and exchange under various peak load conditions", al-Sudani said. Iraq's electricity minister Ziad Ali Fadel clarified today that the agreement stipulates "Turkey supplies Iraq with 300MW during summer season, while Iraq supplies Turkey with 150MW during the remainder of the year from the surplus of its electricity production". Iraq sits on massive oil reserves and is Opec's second-largest producer but it remains heavily reliant on electricity and gas imports from neighbouring countries. The US-led military invasion in 2003, the emergence of the Islamic State and record levels of corruption have all contributed to the underdevelopment of vital infrastructure in Iraq. Power outages during the summer have been a source of political turmoil often causing massive protests. Data provided by Iraq's oil ministry indicate the country burned an average of 120,000 b/d of crude in its power plants in the first half of this year. Figures from the Joint Organisations Data Initiative (Jodi) suggest Iraq's direct crude burn averaged 185,000 b/d in 2023. Earlier this year, Iraq agreed a five-year gas supply agreement with Iran for up to 50mn m³/d. Baghdad also began benefitting from 40MW of electricity supply from Jordan through a newly-established power line that became operational at the beginning of April. And it aims to "complete the connection with the Gulf Co-operation Council electric grid by the end of this year", al-Sudani said. Iraq's oil ministry said the plan is to reduce crude burn at its power stations. Baghdad said the measures will also help it to adhere to its Opec+ crude production commitments . Iraq has exceeded its Opec+ output target every month this year, and as the group's least compliant member it agreed in May to make additional cuts to compensate for prior overproduction. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vietnam’s 1H 2024 coal imports hit all-time high
Vietnam’s 1H 2024 coal imports hit all-time high
Singapore, 22 July (Argus) — Vietnam's coal imports reached an all-time high in the first half of this year despite an on-year drop in seaborne receipts in June from a relatively high base last year. A growth in seaborne receipts led by strong utility demand took Vietnam's coal imports to 33.43mn t in January-June, up from 24.1mn t in the same period last year, according to customs data. Vietnamese customs data do not differentiate between coking and thermal coal. The imports in the first half of this year hit the highest level since Vietnam imported 30.61mn t in January-June 2020, according to Argus' analysis of the customs data. Imports were at 6.36mn t in June, down from a revised 7.21mn t a year earlier and 6.5mn t in May . This was the first year-on-year drop in imports since January last year. Vietnam's strong imports in the first half of the year comes amid heatwaves in the region, which has boosted power consumption and coal-burn at utilities. Vietnam is leading the growth in imports in the southeast Asian region, a trend that is helping to partly offset a lukewarm demand trend in China — the biggest coal importer in the world. Vietnam could end up importing over 66mn t of coal this year at the current average rate of 5.57mn t/month, according to Argus calculations. This could be the country's highest annual imports since the 55mn t of coal it received in 2020, and up from 51.16mn t in 2023. The on-year dip in imports in June came from a high base a year earlier when strong demand from utilities took the monthly imports to a record high. The dip also came as the coal-fired generation dropped to 12.37TWh in June from 17.08TWh in May this year, while the hydro-power generation more than doubled to 9.55TWh last month on a month-on-month basis, according to Argus calculations based on the data from state-owned utility EVN. The country's coal-fired generation, which accounted for 57pc of overall generation in January-June, could come under pressure on a steady uptick in hydropower output, owing to heavy rains in some parts of the country. Overall generation rose by about 12pc on the year to 151.7TWH in the first half of the year, while coal-fired generation reached 86.34TWh, up from 66.76TWh a year earlier, EVN data show. Hydropower generation was at 28.63TWh during the period, down from 29.83TWh a year earlier, according to the EVN data. Vietnam's northern regions may face heavy rains until 24 July as typhoon Prapiroon heads towards Vietnam after making a landfall in south China's Hainan, according to the country's National Centre for Hydrometeorological Forecasting. Coal-fired generation rose to cater for higher electricity consumption resulting from continued economic recovery and an uptick in air-conditioning demand. Power demand continues to grow, and the peak capacity of the national power system reached 49.53GW on 19 June, up from 45.53GW a year earlier, it said. Peak capacity might increase further to over 52GW this month, it added. Authorities have directed EVN and state-owned coal producers to ensure stable supplies to meet the increased power consumption. The uptick in power consumption and coal demand during the first six months and during the second quarter of the year was also supported by an increase in economic activity. Vietnam's GDP grew by 6.93pc in April-June from a year earlier. The increase in receipts of seaborne coal also followed softness in international coal prices, especially for coal from Vietnam's preferred origins — Indonesia and Australia. Argus assessed Indonesian GAR 4,200 kcal/kg coal at $52.38/t fob Kalimantan on 19 July, with the price of the grade recovering from a 10-month low of $52.07/t on 12 July. Argus assessed the Australian NAR 5,500 kcal/kg coal market at $87.61/t fob Newcastle on 19 July, down from $96.59/t fob Newcastle on 1 March — the highest value for the grade in the year to date. Power saving EVN has advised local authorities, businesses, commercial and residential consumers to ensure economical and efficient use of electricity. It has asked commercial units and households to reduce consumption, and advised them to not set air-conditioner temperatures below 26-27°C. Vietnamese authorities have asked power consumers to pay special attention to electricity usage during peak hours between 11:00am to 3:00pm local time (04:00-08:00 GMT) and 7:00pm to 11:00pm. By Saurabh Chaturvedi Vietnam's coal imports (mn t) Vietnam's Jan-June generation mix (TWh) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
South32 misses Australian coking coal output target
South32 misses Australian coking coal output target
Sydney, 22 July (Argus) — Australian-South African diversified resources company South32 was 2pc off its coking coal production target of 4.4mn t at its Australian Illawarra coal operations in the 2023-24 fiscal year to 30 June. The firm is on track to complete the sale of its Illawarra operations in New South Wales (NSW) state by the end of September, marking its exit from coal as it focuses on its non-ferrous metal portfolio. It completed three and started a fourth longwall move at the Appin and Dendrobium mines, leaving new owner Golden Energy and Resources and M Resources with a lower maintenance burden into 2025. South32's total coal production was down by 24pc in 2023-24 compared with the previous year, largely because of maintenance. The firm increased production in the fourth quarter and final half of 2023-24 after a weak first half but the quarter was still down by 15pc on April-June 2023. South32 expects its costs for 2023-24 to be around $150/t, which is in line with its guidance, which was raised from $140/t in February. It received an average price for its Illawarra coal of $275/t for its metallurgical coal and $113/t for its thermal coal for January-June compared with $276/t and $101/t respectively in July-December 2023. The firm's operating margins at its Illawarra metallurgical coal operations were $17/t on thermal coal and $152/t on metallurgical coal in 2022-23 when its operating costs were $127/t. It will release its 2023-24 results on 29 August. Argus last assessed the premium hard coking coal price at $229/t fob Australia on 19 July, down from $334.50/t on 19 January and close to the $235.50/t on 19 July 2023. It assessed the high-grade 6,000 kcal/kg NAR thermal coal price at $134.87/t fob Newcastle on 19 July, up from $128.09/t on 19 January and down from $129.18/t on 19 January 2023. South32 last year dropped plans for a $700mn expansion at Dendrobium, following a dispute with NSW's water agency over its potential impact on water quality . Dendrobium, which supplies coking coal to the Whyalla steelworks in South Australia and exports from NSW's Port Kembla coal terminal, is expected to close in 2028. By Jo Clarke South32 Illawarra Coal output (mn t) Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 2023-24 2022-23 2023-24 guidance Met coal production 1.27 1.24 1.50 4.31 5.50 4.40 Met coal sales 1.36 1.05 1.53 4.17 5.40 Thermal coal production 0.21 0.16 0.25 0.63 1.02 0.60 Thermal coal sales 0.18 0.19 0.17 0.70 0.96 Total production 1.49 1.41 1.75 4.94 6.52 5.50 Source: South32 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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