US court to revisit $14mn penalty for ExxonMobil

Market: Crude oil, Emissions, Oil products
17/02/23

A federal appeals court said it will reconsider a $14.25mn fine against ExxonMobil for thousands of alleged air pollution violations at its 584,000 b/d refinery complex in Baytown, Texas.

The 5th US Circuit Court of Appeals agreed to hold an "en banc" rehearing, under which all 16 active judges on the court will revisit the emission penalty, which if upheld would be the largest imposed through a citizen lawsuit under the Clean Air Act. The appeal will provide ExxonMobil a chance to present its argument that the penalty was excessive and should be revised.

ExxonMobil did not immediately respond to a request for comment.

Residents living near the refinery complex brought the case in 2010, claiming ExxonMobil violated its air permits thousands of times. A federal district court eventually approved a nearly $20mn penalty, which after an appeal by ExxonMobil was revised to $14.25mn based on 3,651 days of alleged air emission violations from 2005-13.

The 5th Circuit, in a 2-1 ruling last year, upheld the penalty after finding the Clean Air Act did not require the residents to prove they were harmed by each of the thousands of alleged violations. The court rejected ExxonMobil's claims that it could only be fined on the 40 days it said residents showed they were harmed by Baytown's emissions.

The 5th Circuit, in a short order today, threw out last year's decision so the full court can reconsider. The court has tentatively scheduled oral arguments on the case for the week of 15 May.

The nonprofit Environment Texas, which filed the case on behalf of residents, said it was hopeful the 5th Circuit would conclude the case and require ExxonMobil to pay penalties imposed years ago.

"Despite essentially conceding in this litigation that it committed over 16,000 violations of the Clean Air Act, Exxon's now 14-year-long effort to avoid taking responsibility for its illegal pollution is seemingly unending," Environment Texas director Luke Metzger said.

The US Environmental Protection Agency, which is not directly a party in the case, last month filed a "friends of the court" brief urging the 5th Circuit not to grant rehearing. For citizen lawsuit cases under the Clean Air Act, the agency said residents only have to show ongoing harm from a facility to have legal standing to bring a case, rather than having to prove injuries for every day of alleged violations.

By Chris Knight

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10/01/25

Brazil’s inflation decelerates to 4.83pc in December

Sao Paulo, 10 January (Argus) — Brazil's headline inflation decelerated to 4.83pc at the end of 2024 , as declines in power costs were only partially offset by gains in fuel and food, according to government statistics agency IBGE. The consumer price index (CPI) slowed from 4.87pc in November and compared with 4.76pc in October. The year-end print compared with 4.62pc in December 2023, but was down from 5.79pc in December 2022. Food and beverage costs rose by an annual 7.69pc in December, accounting for much of the monthly increase, following a 7.63pc annual gain in November. Beef costs increased by an annual 20.84pc in December following a 15.43pc annual gain for the prior month. Higher beef costs in the domestic market are related to the Brazilian's real depreciation to the US dollar, with the Brazilian real depreciating by 27.4pc to the US dollar between 31 December 2023 and the same date in 2024 . Still, beef prices decelerated by 5.26pc in December alone, down from 8pc in November. Soybean oil rose by 29.21pc over the year, an increase of 1.64 percentage points from November. Fuel prices rose by an annual 10.09pc in December after an 8.78pc gain in November. Motor fuel costs grew by 0.7pc in December, compared with a 0.15pc drop in the prior month, thanks to higher gasoline prices. Diesel prices increased by 0.66pc in the 12-month period, while it decreased by 2.25pc in November. Gasoline prices, the major individual contributor to the annual high — according to IBGE — rose by 9.71pc in December from 9.12pc in the prior month. Still, that was lower than in December 2023, when the annual inflation for gasoline stood at 11pc. Power costs in December contracted by an annual 0.37pc in December, as improvements in power generation allowed for removal of a surcharge from customer bills, after a gain of 3.46pc the prior month. In November, Brazil faced lower river levels at its hydroelectric plants after a period of severe droughts . Brazil's central bank is targeting CPI of 3pc with a margin of 1.5 percentage point above or below. Brazil's central bank in December raised its target rate to 12.25pc from 11.25pc as the real's depreciation accelerated. It also signaled it is likely to increase the rate to 14.25pc by March. Monthly inflation accelerated to 0.52pc in December from 0.39pc in November. But the rate was lower than in December 2023, when it stood at 0.56pc. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US issues 45Z tax guidance for low-carbon fuels

10/01/25

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10/01/25

US issues 45Z tax guidance for low-carbon fuels

Washington, 10 January (Argus) — US producers of low-carbon fuels can start claiming the "45Z" tax credit providing up to $1/USG for road use and $1.75/USG for aviation, following the US Treasury Department's release today of proposed guidance for the credit. The guidance includes proposed regulations and other tools to determine the eligibility of fuels for the 45Z tax credit, which was created by the Inflation Reduction Act to replace a suite of incentives for biofuels that expired at the end of last year. Biofuel producers have been clamoring for guidance from the US Treasury Department so they can start claiming the tax credit, which is available for fuels produced from 1 January 2025 through the end of 2027. "This guidance will help put America on the cutting-edge of future innovation in aviation and renewable fuel while also lowering transportation costs for consumers," US deputy treasury secretary Wally Adeymo said. "Decarbonizing transportation and lowering costs is a win-win for America." The creation of the 45Z tax credit has already prompted a change in US biofuels markets by shifting federal subsidies from blenders to producers. Because the value of tax credit increases for fuels with the lowest lifecycle greenhouse gas (GHG) emissions, it could encourage refiners to source more waste feedstocks such as used cooking oil, rather than conventional crop-based feedstocks. While the guidance is still just a proposal, taxpayers are able to "immediately" use the guidance to claim the 45Z tax credit, until Treasury issues additional guidance, an administration official said. The guidance on 45Z released today affirms that only the producer for the fuel is eligible to claim the credit, not blenders. To be eligible for the tax credit, the fuel must have a "practical or commercial fitness for use in a highway vehicle or aircraft" by itself or when blended into a mixture, Treasury said. Marine diesel and methanol suitable for highway or aircraft use are also eligible for 45Z, as is renewable natural gas that can be used as a transportation fuel. Treasury also released an "annual emissions rate table" offering providers a methodology for determining the lifecycle GHG of fuel. Treasury said a key emissions model from the US Department of Energy, called 45ZCF-GREET, used to calculate the value of the 45Z tax credit is anticipated to be released today, although industry officials said it may be delayed until next week. Treasury said it intends to propose regulations at "a future date" for calculating the GHG emissions benefits of "climate smart agriculture" practices for "cultivating domestic corn, soybeans, and sorghum as feedstocks" for fuel. Those regulations could lower the calculated lifecycle emissions of fuel from those crop-based feedstocks and increase the relative 45Z tax credit. US biofuel producers said they are still awaiting key details on the 45Z tax credit, including the update to the GREET model. Among the outstanding questions is if the guidance released today provides "enough certainty to negotiate feedstock and fuel offtake agreements going forward", said the Clean Fuels America Alliance, an industry group that represents the biodiesel, renewable diesel and sustainable aviation fuel industries. It is unclear how president-elect Donald Trump intends to approach this proposed approach for the 45Z credit, which will be subject to a 90-day public comment period. Trump has promised to "rescind all unspent funds" from the Inflation Reduction Act. But outright repealing 45Z would leave biofuels producers and farmers without a subsidy they say is needed to sustain growth, after the expiration last year of a $1/USG blender tax credit and a tax credit of up to $1.75/USG for sustainable aviation fuel. Biofuel and soybean groups were unsuccessful in a push last year to extend the expiring biofuel tax credits. The 45Z credit is likely to be debated in Congress this year, as Republicans consider repealing parts of the Inflation Reduction Act. House Republicans have already asked for input on revisions to the 45Z credit, signaling they could modify the incentive. In a tightly divided Congress, farm-state lawmakers may hold enough leverage to ensure some type of biofuel incentive — and potentially one friendlier to agricultural producers than 45Z — survives. By Chris Knight and Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Opec+ aims to reverse output falls in 2025

10/01/25

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10/01/25

Opec+ aims to reverse output falls in 2025

London, 10 January (Argus) — Opec+ production cuts in 2024 saw the alliance reduce its crude output to lower than even in the pandemic-hit years of 2021 and 2022. And while Opec+ plans to start unwinding some of these cuts this year, it is far from clear that there will be sufficient room in the market for this additional supply. Opec+ members subject to targets reduced crude output by 1.66mn b/d to 33.96mn b/d in 2024, Argus estimates. This was an even bigger decrease than 2023's 1.44mn b/d and means that the alliance has taken 3.1mn b/d off line over the past two years — equal to about 3pc of global oil supply. Saudi Arabia cut production by 650,000 b/d to 8.96mn b/d last year, the lowest since 2010. Russian production fell by 430,000 b/d to 9.15mn b/d, the lowest since at least 2010. Other big falls came from Kuwait, whose output dropped by 190,000 b/d to 2.43mn b/d, and Iraq, where production declined by 160,000 b/d to 4.13mn b/d — although this was still well above its 4mn b/d target. Opec+ can at least claim that it has so far achieved its stated objective of ensuring oil market stability — average prices for Atlantic basin benchmark North Sea Dated in 2024 were only around $2/bl lower than in 2023 at around $80/bl. But this has come at a cost. While Opec+ has capped its output, countries outside the alliance have continued to boost production — eating into Opec+ market share. Whether Opec+ will stick to this approach is a key factor to watch in 2025. Pressure has been building from some members who want to increase output as soon as possible. As things stand, Opec+ members are set to start unwinding 2.2mn b/d of voluntary crude production cuts starting in April over an 18-month period. But this is not certain, given that most forecasts show a market surplus this year. Opec+ continues to stress that the return of 2.2mn b/d — one of three cuts it is implementing — will depend on market conditions. For now, the alliance is in wait-and-see mode, particularly given the uncertainties associated with the return of Donald Trump as US president and its impact on the global economy. As always, the extent to which Opec+ members complied with their individual output targets was a big issue in 2024. But on balance, the alliance's output last year was 40,000 b/d under its collective target. While serial overproducers such as Iraq, Kazakhstan and Russia attracted a lot of scrutiny and pledged to compensate for exceeding their targets, members such as Azerbaijan, South Sudan and Nigeria produced well below their own targets. Without target Another key development in 2024 was growing production from members of the group that do not adhere to targets — Iran, Libya and Venezuela. Iran boosted output by 380,000 b/d to 3.32mn b/d, the highest since 2018, despite the continuation of US sanctions on its oil exports. Similarly, sanctions-hit Venezuela increased production by 110,000 b/d to a six-year high of 870,000 b/d. Libya saw its production fall by 60,000 b/d to 1.11mn b/d — mostly owing to politically motivated shutdowns — but it ended the year at 1.4mn b/d, the highest in over a decade. On a monthly basis, members subject to cuts saw very little change in their collective output in December, with production edging up by 10,000 b/d to 33.57mn b/d. This was 270,000 b/d below the group's target for the month. Notable changes included a 50,000 b/d increase from Nigeria, which saw its output climb to 1.54mn b/d — the highest since July 2020 — while Kuwaiti output increased by 40,000 b/d to 2.44mn b/d. 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Opec+ crude production mn b/d Dec Nov* Dec target† ± target Opec 9 21.23 21.22 21.23 +0.00 Non-Opec 9 12.34 12.36 12.62 -0.28 Total 33.57 33.58 33.85 -0.28 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Dec Nov* Dec target† ± target Saudi Arabia 8.91 8.93 8.98 -0.07 Iraq 3.99 3.98 4.00 -0.01 Kuwait 2.44 2.40 2.41 +0.03 UAE 2.85 2.97 2.91 -0.06 Algeria 0.91 0.91 0.91 0.00 Nigeria 1.55 1.50 1.50 +0.05 Congo (Brazzaville) 0.27 0.25 0.28 -0.01 Gabon 0.24 0.22 0.17 +0.07 Equatorial Guinea 0.07 0.06 0.07 +0.00 Opec 9 21.23 21.22 21.23 +0.00 Iran 3.40 3.36 na na Libya 1.31 1.24 na na Venezuela 0.90 0.88 na na Total Opec 12^ 26.84 26.70 na na *revised †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Dec Nov* Dec target† ± target Russia 8.97 8.97 8.98 -0.01 Oman 0.75 0.75 0.76 -0.01 Azerbaijan 0.48 0.49 0.55 -0.07 Kazakhstan 1.44 1.45 1.47 -0.03 Malaysia 0.36 0.36 0.40 -0.04 Bahrain 0.18 0.18 0.20 -0.02 Brunei 0.08 0.08 0.08 -0.00 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.06 0.06 0.12 -0.06 Total non-Opec 12.34 12.36 12.62 -0.28 *revised †includes additional cuts where applicable Opec+ crude production* Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Next Canadian PM to be chosen on 9 March

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10/01/25

Next Canadian PM to be chosen on 9 March

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Global agencies agree 2024 was hottest year recorded

10/01/25

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10/01/25

Global agencies agree 2024 was hottest year recorded

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