British Columbia raises biofuels output goal

  • Market: Biofuels, Emissions
  • 28/06/24

British Columbia has increased by 15pc its 2030 goal for renewable fuels production in the province, driven by the success of its low-carbon fuel standard (LCFS).

The province aims to produce 1.5bn liters/yr (26,000 b/d) of renewable fuels by 2030, up from its prior goal 1.3bn l/yr, the government said Thursday in a report on its clean energy strategy.

British Columbia's LCFS has driven investment in petroleum alternatives and enabled more ambitious biofuel targets, with the province on track to produce 840mn l/yr of renewable fuels by 2026, according to the report.

The new goal specifically covers renewable liquid fuels like renewable diesel and sustainable aviation fuel. The province also aims to scale up renewable natural gas and hydrogen, the report said.

British Columbia's LCFS targets a 30pc reduction in the carbon intensity of the diesel and gasoline fuel pools by 2030 as well as a 10pc reduction in the carbon intensity of aviation fuels. The provincial program, which operates alongside new federal requirements, has the toughest reduction targets of any North American LCFS.

LCFS programs require yearly reductions in transportation fuel carbon intensity. Conventional, higher-carbon fuels that exceed annual limits incur deficits that suppliers must offset with credits generated from the distribution of approved, lower-carbon alternatives.

British Columbia justified its renewable fuels goals in the report, arguing that "liquid and gas fuels will remain essential for the foreseeable future" for long-haul transportation, industry, and remote communities with less access to electricity.

A more ambitious domestic production target is also designed to reduce the province's dependence on fuel imports. The only provincial fuel producers are Tidewater Midstream and Infrastructure's 12,000 b/d refinery and Tidewater Renewables' 3,000 b/d renewable diesel refinery in Prince George as well as Parkland's 55,000 b/d refinery in Burnaby that co-processes renewable feedstocks with conventional petroleum feedstocks.


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02/07/24

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.

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Australia’s safeguard credit selling interest unclear


02/07/24
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02/07/24

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.

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US judge halts 'pause' on LNG export licenses


01/07/24
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01/07/24

US judge halts 'pause' on LNG export licenses

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Denmark to launch carbon tax on agriculture from 2030


01/07/24
News
01/07/24

Denmark to launch carbon tax on agriculture from 2030

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US Supreme Court ends 'deference' to regulators


28/06/24
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28/06/24

US Supreme Court ends 'deference' to regulators

Washington, 28 June (Argus) — The US Supreme Court's conservative majority, in one of its most significant rulings in years, has thrown out a landmark, 40-year-old precedent under which courts have offered federal agencies significant leeway in deciding how to regulate the energy sector and other industries. In a 6-3 ruling that marks a major blow to President Joe Biden's administration, the court's conservatives overturned its 1984 ruling Chevron v. NRDC that for decades has served as a cornerstone for how judges should review the legality of federal regulations when a statute is not clear. But chief justice John Roberts, writing for the majority, said experience has shown the precedent is "unworkable" and became an "impediment, rather than an aid" for courts to analyze what a specific law requires. "All that remains of Chevron is a decaying husk with bold pretensions," the opinion said. For decades, under what is now known as Chevron deference, courts were first required to review if a law was clear and if not, to defer to an agency's interpretation so long as the government's reading was reasonable. But the court's majority said the landmark precedent has become a source of unpredictability, allowing any ambiguity in a law to be a "license authorizing an agency to change positions as much as it likes." Roberts wrote that the federal courts can no longer defer to an agency's interpretation "simply because" a law is ambiguous. "Chevron is overruled," Roberts writes. "Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority." The court's ruling, named Loper Bright Enterprises v. Gina Raimando, focuses on lawsuits from herring fishers who opposed a rule that could require them to pay about $710 per day for an at-sea observer to verify compliance with regional catch limits. The US Commerce Department said it believes it interpreted the law correctly, but the fishers said the "best interpretation" of the statute was that it did not apply to herring fishers. The court's three liberal justices dissented from the ruling, which they said will likely result in "large-scale disruptions" by putting federal judges in the position of having to rule on the merits of a variety of scientific and technical judgments, without the benefit of expertise that regulators have developed over the course of decades. Overturning Chevron will put courts "at the apex" of policy decisions on every conceivable topic, including climate change, health care, finance, transportation, artificial intelligence and other issues where courts lack specific expertise, judge Elena Kagan wrote. "In every sphere of current or future federal regulations, expect courts from now on to play a commanding role," Kagan wrote. The Supreme Court for years has been chipping away at the importance of Chevron deference, such as a 2022 ruling where it created the "major questions doctrine" to invalidate a greenhouse gas emission rule limits for power plants. That doctrine attempts to prohibit agencies from resolving issues that have "vast economic and political significance" without clear direction from the US Congress. That has led regulators to be hesitant in relying on Chevron to defend their regulations in court. The Supreme Court last cited the precedent in 2016. The ruling comes a day after the Supreme Court's conservatives, in another 6-3 ruling , dramatically curtailed the ability of the US Securities and Exchange Commission — and likely many other federal agencies — to use in-house tribunals to impose civil penalties. The court ruled those enforcement cases instead need to be filed as jury trials. That change is expected to curtail enforcement of securities fraud, since court cases are more resource-intensive. 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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