California CARB ULSD prices hit multi-year lows
Outright California CARB diesel prices are at nearly 31-month lows following a narrowing in Los Angeles differentials and the underlying Nymex ultra-low sulphur diesel (ULSD) contract last week.
Front-month outright prices in Los Angeles closed at $2.20/USG on 2 August, the lowest level since December 2021, after a 4pc downturn in the Nymex ULSD contract and a 2¢/USG weekly dip in differentials as August volume was heard traded lower.
Overall ULSD liquidity remained muted in San Francisco, but Friday's Nymex loss pressured outright cash prices to $2.14/USG, also the lowest level since December 2021.
California refiners had nearly doubled CARB diesel production in the week ended 26 July and averaged 193,000 b/d, according to latest data from the California Energy Commission (CEC) released on 1 August. The uptick fueled a 1.6pc increase in the state's total diesel inventory, to 2.9mn bl, despite a concurrent 38pc drop in output of other diesel fuels — a category including high-sulphr, non-California EPA and renewable diesel.
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Guyana seeking to market carbon credits to airlines
Guyana seeking to market carbon credits to airlines
Kingston, 5 August (Argus) — Growing oil producer Guyana has started discussions with several airlines for the sale of its carbon credits, saying other efforts to transact its forest carbon are progressing slowly. The heavily forested country in northern South America will use a compliance market in Singapore to trade its certified carbon credits with airlines, vice president Bharrat Jagdeo said. The country faced the prospect of not being able to sell its credits after being proactive in establishing a low carbon development strategy and getting its credits certified, he said. "We have been fighting to get our carbon sold into a compliance market, and there is a Singapore-based market that allows trading in forest carbon for airlines," Jagdeo said. "We have started discussions to see whether we can sell our certified carbon to some of the airlines and hopefully the prices will be good." The government did not identify the potential buyers. Guyana aims to monetize its forests' climate and ecosystem services while promoting low-carbon economic development that is guided by its low carbon development strategy, the government said. Guyana's low-carbon development strategy is aimed at combating climate change globally, it said. "Guyana has set out a vision for monetizing the climate and ecosystem services provided by our standing forest, while accelerating the country's economic development along a low carbon trajectory," it said. Guyana has secured 7.14mn carbon units from Architecture for REDD+ Transaction (ART) for its low deforestation rate along with sustaining high levels of forest coverage. ART is a global initiative that encourages governments to reduce forest degradation and to restore forests. "This achievement made Guyana the first country to be issued carbon credits eligible for use by airline operators in their efforts to reduce carbon emissions," the government said. The credits were issued "in recognition of Guyana's successful efforts to reduce emissions from forest loss and degradation and maintain one of the world's most intact tropical forests," ART said. Heavily forested Guyana has a population of 750,000. It is a carbon sink with forests covering an area the size of England and stor ing 19.5 gigatons of carbo n , the government said. Guyana's deforestation rate is less than 0.05pc, it said. Airlines have been working towards their targets in the 2024-2026 phase of the International Civil Aviation Organization's carbon offsetting and reduction scheme. "There are some new standards required for the aviation sector and in those new standards there will have to be carbon credit offtake," Guyana's president Irfaan Ali said. ART issued 33.47mn TREES credits in December 2022 to Guyana for 2016-2020. The credits are ART's standard for measuring and quantifying greenhouse gas emission reductions. Guyana has had some success in transacting its carbon credits. It negotiated an agreement with Hess Corporation to sell carbon credits for $750mn. It received the first $150mn in 2023. Hess is part of an ExxonMobil-led consortium that started producing crude offshore Guyana in 2019. US major Chevron's planned takeover of Hess will not affect the agreement, Jagdeo said. Norway had earlier committed to providing Guyana up to $250mn for avoided deforestation once certain performance indicators were met. Guyana started negotiating with airlines after failing to get the United Nations Framework Convention on Climate Change (UNfccc) and some non-governmental organizations to add forest carbon to a compliance market, the government said. But it made "no significant" progress" in the discussions, Jagdeo said. "The UNfccc is treating the tropical countries badly," he said. "If we didn't branch out on our own since 2009, and set up our low carbon development strategy that gave us the $250mn deal with Norway, then the $750mn agreement with Hess, we would be left back like some other countries." By Canute James Guyana forest credit payments $ Credit years Payment $/ton 2016-2020 187.5 15 2021-2025 250.0 20 2026-2030 312.5 25 — Guyana Payment by Hess, for approximately 30pc or 37.5mn of Guyana's ART TREES credits Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore’s middle distillate stocks hit 13-week high
Singapore’s middle distillate stocks hit 13-week high
Mumbai, 5 August (Argus) — Singapore's middle distillate stocks rose to a 13-week high of 11.35mn bl for the week ended 31 July, Enterprise Singapore data show. Light distillates fell for the first time since 10 July and fuel oil inventories dropped to a three-week low. Singapore middle distillate stocks rose with more gasoil imports from swing suppliers India and the Mideast Gulf. The influx in middle distillate stocks was led by the latest stock build with Bahrain, Saudi Arabia and India, the top suppliers to Singapore after South Korea. Singapore's light distillate stocks eased because of a sharp fall in naphtha and gasoline imports. Naphtha imports fell by a third as supplies from Malaysia, India and Bahrain dried up. Exports surged to 19.2mn t from 3.7 mn t a week ago. Gasoline imports fell by 25pc with no supplies from Brunei in the reporting week. Fuel oil inventories continued to decline and fell to a three-week low on the back of lower imports. Oman, Brazil and the US were the top origin for arrivals into Singapore, while exports to China held steady on the week at around 880,000 bl. By Roshni Devi Singapore onshore stocks week to 31 July 2024 (mn bl) Volume ± w-o-w ± w-o-w (%) Light distillates Stocks 14.39 -1.33 -8.51 Naphtha imports 0.72 -1.49 -67.28 Naphtha exports 0.17 0.13 412.96 Gasoline imports 1.99 -0.68 -25.61 Gasoline exports 4.73 -0.11 -2.38 Middle distillates Stocks 11.35 0.30 2.72 Gasoil imports 1.63 -0.50 -23.54 Gasoil exports 3.29 1.76 115.71 Jet fuel imports 0.50 0.33 195.27 Jet fuel exports 0.71 0.68 208.97 Light distillates Stocks 19.56 -0.30 -1.51 Fuel oil imports 5.27 -2.50 -32.39 Fuel oil exports 1.59 -1.38 -46.58 Source: Enterprise Singapore Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
China to set hard targets for curbing CO2 emissions
China to set hard targets for curbing CO2 emissions
San Francisco, 2 August (Argus) — China is planning a shift in the way it controls greenhouse gases, specifically carbon dioxide (CO2) emissions, in a move that could support progress in its national emissions trading scheme (ETS), although it is unclear what emissions levels will be targeted. The country currently measures CO2 against economic growth, or emissions per unit of GDP in what is known as carbon intensity. This allows it to tout progress despite rising emissions so long as these do not rise faster than GDP. But it plans to change this. Beijing aims to incorporate CO2 indicators and related requirements into national plans and establish and improve local carbon assessments in a goal to improve CO2 statistical accounting. This will affect sectors including the power, steel, building materials, non-ferrous metals, and petrochemicals sectors, according to a state council work plan issued on 2 August. It will evaluate CO2 emissions of fixed asset investments and conduct product carbon footprint assessments while local governments will implement provincial carbon budgets that could enter trials in 2025. The latter will involve a wide range of industries including oil, petrochemicals, coal-to-gas, steel, cement, aluminium, solar panels manufacturing and electric vehicles, among others. Beijing is hoping such measures will allow it to set hard targets for CO2 emissions from 2026-2030, although the government will still prioritise intensity control in the meantime in what it calls a ‘dual-control mechanism' — switching from controlling intensity to actual emissions of CO2. Provinces are expected to be allowed to further refine this dual control mechanism, suggesting it will may give localities some leeway to adjust. China's ETS currently includes only the power sector due in large part to challenges collating accurate CO2 emissions data from other sectors, although it is expected to include other sectors like aluminium into the scheme soon. China unveiled new regulations for its ETS earlier this year, aiming to crack down on falsification of data. It sees the ETS as a tool to help it meet a goal to peak carbon emissions before 2030 and reach carbon neutrality before 2060. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Aemetis optimistic about LCFS update, tax credit
Aemetis optimistic about LCFS update, tax credit
New York, 2 August (Argus) — US biofuels producer Aemetis expects supportive regulatory changes to boost profits, which have struggled recently on lower prices. Chief executive Eric McAfee said Thursday that expected policy changes in the next year will "significantly increase the value of our products," which include ethanol and renewable natural gas. He cited the California Air Resources Board's (CARB) upcoming meeting in November in which regulators will consider updates to the state's low-carbon fuel standard (LCFS), as well as an Inflation Reduction Act federal tax credit for clean fuels kicking off in January and Environmental Protection Agency action to approve higher E15 ethanol blends in more of the country next year. In California, regulators are weighing tougher targets for the LCFS program, where sagging credit prices over the last year could deter investments in decarbonizing transportation. They have floated an initial step down in carbon intensity limits in 2025 of 7pc or more. McAfee predicted that CARB would ultimately determine that a 9pc stepdown "basically is the minimum required, not the maximum, but the minimum required to move major oil companies forward on buying more credits now". He said that in discussions with CARB officials, it was "pretty clear" that the growth in unused credits available for compliance in future years had exceeded expectations. The bank of credits, which do not expire, hit a record high at the end of the first quarter, according to data released this week. The Inflation Reduction Act's 45Z tax credit, which will tie incentives to a fuel's lifecycle greenhouse gas emissions, could also benefit the company's expanding biogas business. McAfee said there is a "wide range" of potential outcomes, since it is unclear how federal regulators will account for fuels with negative carbon intensity. But he expects a worst-case scenario would still be a subsidy of around $7.20/mmBTU. That credit will also be more generous to sustainable aviation fuel (SAF), although it is unclear when Aemetis' planned SAF and renewable diesel production facility in Riverbank, California, will come on line. The company received key air permits from local regulators in the first quarter this year and that it was "discussing the use of innovative pricing structures with our airline customers to accelerate the financing, construction, and operation of the SAF plant", McAfee said. Aemetis has signed offtake agreements with companies such as Delta Air Lines and Alaska Airlines. The company did not immediately respond to a request for comment on its timeline for starting up the plant, which could produce 90mn USG/yr of SAF and renewable diesel. Aemetis this week reported a net loss of $29.2mn in the second quarter this year, up from a net loss of $25.3mn during the same period last year. The company sold more ethanol and renewable natural gas in the US and less biodiesel in India but received lower prices for many of its products. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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