GREET guidance still a few weeks out: USDA
Final language of a new emissions measurement model that US agencies will use is still "a few weeks" out from being approved by the Treasury department, Department of Agriculture (USDA) secretary Tom Vilsack said today at an industry event.
The Greenhouse gases, Regulated Emissions, and Energy use in Technologies (GREET) emissions measuring model was supposed to be released by 1 March, according to a December announcement. But that guidance will need more time, Vilsack said today at the annual Commodity Classic agriculture conference in Houston, Texas.
Vilsack emphasized it would take weeks — not months — for the final announcement, but confirmed the model would be used by the Treasury department in determining life-cycle emissions of ethanol-derived sustainable aviation fuel (SAF) under the Inflation Reduction Act (IRA).
The Renewable Fuels Association, an industry group, called on the Environmental Protection Agency (EPA) to quickly finalize the GREET model.
"While we are pleased to hear progress is being made on the modified GREET model, we are disappointed by this additional delay," RFA resident Geoff Cooper said in a statement.
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Countries draft trade deal to address climate change
Countries draft trade deal to address climate change
London, 2 July (Argus) — Trade ministers for Costa Rica, Iceland, New Zealand and Switzerland have finished negotiations on a trade deal focused on tackling climate change, pollution and loss of biodiversity. The deal — the agreement on climate change, trade and sustainability (ACCTS) — will include an "ambitious" list of environmental goods, with a definition and criteria for updates, the ministers said. The agreement will eliminate tariffs on more than 300 goods, including solar panels, wind turbines, electric vehicles and wood products. It will also outline conservation and sustainability commitments for the production of such items. The agreement will also "contribute a meaningful definition of fossil fuel subsidies to international efforts", the ministers said. On these, there will be "clear prohibitions and a limited set of exceptions to safeguard fundamental policy goals", the ministerial statement added. Pledges to phase out fossil fuel subsidies by various countries, including the G7 and G20 groups, are long-standing. But subsidies for fossil fuels remain widespread and totalled $7 trillion in 2022, according to the IMF. The legal review of the text must be completed before it is signed, ratified and implemented, the ministers said. Their ambition is for the ACCTS to be "a pathfinder agreement that will drive momentum" at the World Trade Organisation, they added. Norway participated in all 15 rounds of negotiations and hailed the "great progress" made. But the country needs more time to assess the agreement, Norwegian foreign minister Espen Barth Eide said. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Reformed Australia safeguard scheme faces uncertainties
Reformed Australia safeguard scheme faces uncertainties
Canberra, 2 July (Argus) — Australia's reformed safeguard mechanism triggered more decarbonisation efforts in its first year, but key uncertainties need to be clarified to unlock bigger investments, delegates heard at a Carbon Market Institute (CMI) symposium in Canberra on 1 July. Settings are clear until 2030 but uncertainties over a few major factors beyond that year have been causing hesitation and blocking investments, market experts said. The mechanism became a 'declining baseline-and-credit' emissions trading scheme (ETS) from 1 July 2023 after a reform by the Labor government , which set a emission reduction target of 43pc by 2030 from 2005 levels after taking office in mid-2022. Figures from the first year under the reformed scheme, between 1 July 2023-30 June 2024, will only be known after facilities surrender their units ahead of the 1 April 2025 compliance deadline . The Australian government still needs to define the design of the cost containment reserve , under which safeguard facilities may access Australian Carbon Credit Units (ACCUs) held by the Clean Energy Regulator (CER) at a fixed price that started at A$75 ($50) in the 2023-24 fiscal year to 30 June and will be increased with inflation plus 2pc/yr. "On a fundamental basis, [the reserve] shouldn't be required to be triggered before 2027-28, but we do need price signals to unlock a new wave of investments and capitalise a whole new suite of projects that are not already banked," climate solutions and brokerage firm Core Markets' chief executive Chris Halliwell told delegates on 1 July. Uncertainty over baseline decline rate Under the reformed mechanism, facilities that emit more than 100,000t of CO2 equivalent (CO2e) in a fiscal year face declining baselines and need to surrender ACCUs or upcoming safeguard mechanism credits if their onsite abatement activities were not enough to keep their emissions below thresholds. The rate of decline was set at 4.9pc/yr from 2021-22 to 2029-30 and will be set in five-year blocks from 2030-31 onwards, in line with future updates to Australia's Nationally Determined Contribution (NDC) under the Paris Agreement, with later rates to be defined by 1 July 2027. The government disclosed an indicative decline rate of 3.285pc/yr in the safeguard rules from 2030-31 to 2049-50, said Australian carbon advisory company RepuTex's head of research Bret Harper. But that would mean "a less ambitious" rate than the existing one, even as Australia might set a much more ambitious emissions reduction target by 2035, Harper added. Uncertainty for trade-exposed facilities There is significant uncertainty and risk for so-called trade-exposed baseline adjusted facilities, which are typically smaller industrial participants that face a high risk of carbon leakage. Such facilities can apply for a discounted decline rate as low as 1pc/yr, but several of them do not know whether they will qualify, climate risk and energy transition consultancy Energetics' head of emissions quant David Kazmirowicz told delegates. He mentioned the example of one client, Victoria-based glass manufacturer Oceania Glass, which is the sole producer of float glass products in Australia. "All their competition comes from overseas and they are, putting it mildly, up in arms that there was a domestic policy mechanism triggered without an equivalent for overseas imports," he said. "This facility is looking at existential impacts where, I think, big players in the resource industry are potentially not." Australia has been looking at the possibility of introducing a carbon border adjustment mechanism (CBAM), with a second consultation paper to be published in the "near future", said Australian National University professor Frank Jotzo, who has been leading the carbon leakage review. The first round of consultation showed strong "support for the principle of a CBAM", he added. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s safeguard credit selling interest unclear
Australia’s safeguard credit selling interest unclear
Canberra, 2 July (Argus) — There is buying interest in Australia's upcoming safeguard mechanism credits (SMCs), but selling interest has been scant so far, delegates heard at a Carbon Market Institute (CMI) symposium in Canberra on 1 July. The Clean Energy Regulator (CER) will start to issue SMCs from 2025 onwards to safeguard facilities that report scope 1 greenhouse gas (GHG) emissions below their annual baselines, effectively introducing emissions allowances into the Australian carbon market. Each SMC will represent 1t of CO2 equivalent (CO2e) below the baseline of a facility, which will have the option to either hold it for future use or sell it to facilities that exceeded their thresholds. Facilities that overstep their baselines are required to buy and surrender one Australian Carbon Credit Unit (ACCU) or SMC for each excess 1t of CO2e, and will be penalised if they fail to do so. This means companies in need of units will have interest in buying SMCs, but there are doubts about selling interest, market experts said. "We hear lots of our clients aiming to go out there and buy SMCs, but very few who are going to generate them are willing to sell because they see them as a mechanism for hedging future risk," said sustainability advisory firm Anthesis' climate resilience and decarbonisation lead, Thomas Hodgson. Facilities will be allowed to hold an unlimited number of SMCs until 2030. They will be able to use the credits for safeguard compliance at any point up to that year — irrespective of when the SMCs are issued — but the Australian government has pledged to review post-2030 banking arrangements in the scheduled review of the safeguard mechanism in 2026-27, according to CMI. Climate risk and energy transition consultancy Energetics has been working with 10 clients that account for a combined 15mn t/yr of CO2e in Australia. But most of them were not currently looking at the opportunity of receiving SMCs in the near future, Energetics' head of emissions quant David Kazmirowicz said, highlighting a potentially limited credit issuance. Actual SMC transactions are only expected to pick up once the CER issues the first units in early 2025, when there will be more visibility on issuance volumes as well as selling and buying appetite. These below-baseline credits will be "a certificate to watch", said the regulator's principal economist Georgina Prasad. There will be advantages in banking SMCs for future liability, but several facilities likely to receive the credits are not expected to have any liability in the next several years, according to Australian carbon advisory company RepuTex's head of research Bret Harper. "So this is probably a prime opportunity for them to test the market and see if they can monetise those credits," he pointed out. SMCs are expected to trade at a discount to ACCUs as their use will be restricted to safeguard facilities, excluding them from voluntary and non-federal compliance demand, according to market participants. Safeguard volumes accounted for 75pc of all the nearly 1.2mn ACCU cancellations in the first quarter of 2024, according to latest CER data. Generic ACCU prices have ranged between A$33.75-34.60 ($22.50-23.05) in recent weeks. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
IGC keeps Australian grain output, export forecasts
IGC keeps Australian grain output, export forecasts
Sydney, 2 July (Argus) — The International Grains Council's (IGC) projections of Australia's grain production and exports in 2024-25 remain largely unchanged, despite rainfall in major cropping areas in June. The IGC revised its forecasts for Australia's 2024-25 grain production slightly downward from May by 125,000t to 45.5mn t, and exports by 50,000t to 31.7mn t. Wheat production and exports remained unchanged at 30.1mn t and 21.5mn t, respectively. The Bureau of Meteorology (BoM) June rainfall summary showed national rainfall at almost 10pc above the 1961-1990 average. National area-averaged mean temperature was 0.71 degrees higher than the 1961-1990 average. Rainfall was above average for most of Western Australia in June, or in the top 10pc of June months since 1900, supporting crop germination and development. Areas near the Geraldton cropping region — which accounts for approximately 22pc of WA's wheat crop area — received their highest rainfall on record, according to BoM data and the Grain Industry Association of Western Australia (Giwa) estimates. The seasonally late major rainfall event delayed the state's crop development, but warmer soil temperatures accelerated crop growth. That put the state back on track for at least an average year as opposed to a well below average year, Giwa said in its crop report released in early June . Rainfall remained below average in parts of WA's Albany and Kwinana South cropping regions in June. Dryness in June was even more severe in southern New South Wales (NSW) and Victoria, which received below average or very much below average rainfall in June. The Australian Bureau of Agricultural and Resource Economics and Sciences (Abares) noted earlier in June that yield expectations in NSW's southern cropping regions were highly contingent on sufficient and timely rainfall. Abares expects the state's overall winter crop to yield 2.5 t/hectare in 2024-25. The IGC did not change its 2024-25 world grain output projection in June from 2,312mn t in May. Global carryover stocks in 2024-25 were revised upward by 2mn t, but remained the lowest in a decade at 582mn t. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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