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Germany's Landwärme declares insolvency

  • Market: Biofuels, Natural gas
  • 13/08/24

German biomethane supplier Landwärme has today declared insolvency under the country's self-administration procedure and has initiated restructuring measures "to overcome the consequences of the ongoing decline in prices of German greenhouse gas (GHG) emission reduction quota".

Self-administration proceedings are a proven legal framework in German restructuring law analogous to the US' Chapter 11 bankruptcy proceedings. They allow businesses to reorganise structures and financing while operations continue.

Landwärme attributed the price decline of German GHG tickets to an influx of imported, falsely-labelled biodiesel since the start of last year, as well as other alleged fraud cases regarding upstream emission reduction (UER) projects. Fake UER projects have caused the biofuel industry around €4.5bn in damages, according to the company.

Argus' Other GHG credits, GHG certificates which do not fall under caps for crop-based and Annex Part B biofuels, averaged €100/t CO2e in July, down from around €400/t CO2e in January 2023.

Landwärme is also looking to bring a "financially strong partner on board" to regain the necessary stability, it said, and intends to complete the restructuring as quickly as possible.

"This procedure could have been avoided if politicians and authorities had been more consistent in prosecuting and combating the alleged fraud cases in biodiesel and UER projects", managing director Zoltan Elek said.


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20/12/24

US government agencies set to shut down

US government agencies set to shut down

Washington, 20 December (Argus) — US federal agencies would have to furlough millions of workers and curtail permitting and regulatory services if no agreement is reached by Friday at 11:59pm ET to extend funding for the government. US president-elect Donald Trump and his allies — including Tesla chief executive Elon Musk — on 18 December upended a spending deal US House of Representatives speaker Mike Johnson (R-Louisiana) had negotiated with Democratic lawmakers in the House and the Senate. Trump endorsed an alternative proposal that Johnson put together, but that measure failed in a 174-235 vote late on Thursday, with 38 Republicans and nearly every Democrat voting against it. Trump via social media today indicated he would not push for a new funding bill. "If there is going to be a shutdown of government, let it begin now, under the Biden Administration, not after January 20th, under 'TRUMP,'" he wrote. There was little to indicate as of Friday morning that Trump, Republican congressional leadership and lawmakers were negotiating in earnest to avert a shutdown. The House Republican conference is due to meet in the afternoon to weigh its next steps. President Joe Biden said he would support the first funding deal that Johnson negotiated with the Democratic lawmakers. "Republicans are doing the bidding of their billionaire benefactors at the expense of hardworking Americans," the White House said. Any agreement on funding the government will have to secure the approval of the House Republican leadership and all factions of the Republican majority in the House, who appear to be looking for cues from Trump and Musk on how to proceed. Any deal would then require the support of at least 60 House Democrats to clear the procedural barriers, before it reaches the Senate where the Democrats hold a majority. The same factors will be in play even if the shutdown extends into early 2025. The Republicans are set to take the majority in the Senate when new Congress meets on 3 January. But their House majority will be even slimmer, at 219-215, requiring cooperation of Democratic lawmakers and the Biden administration. What happens when the government shuts down? Some agencies are able to continue operations in the event of a funding lapse. Air travel is unlikely to face immediate interruptions because key federal workers are considered "essential," but some work on permits, agricultural and import data, and regulations could be curtailed. The US Federal Energy Regulatory Commission has funding to get through a "short-term" shutdown but could be affected by a longer shutdown, chairman Willie Phillips said. The US Department of Energy, which includes the Energy Information Administration and its critical energy data provision services, expects "no disruptions" if funding lapses for 1-5 days, according to its shutdown plan. The US Environmental Protection Agency would furlough about 90pc of its nearly 17,000 staff in the event of a shutdown, according to a plan it updated earlier this year. The Interior Department's shutdown contingency plan calls for the Bureau of Land Management (BLM) to furlough 4,900 out of its nearly 10,000 employees. BLM, which is responsible for permitting oil, gas and coal activities on the US federal land, would cease nearly all functions other than law enforcement and emergency response. Interior's Bureau of Safety and Environmental Enforcement, which oversees offshore leases, would continue permitting activities but would furlough 60pc of its staff after its funding lapses. The US Bureau of Ocean Energy Management will keep processing some oil and gas exploration plans with an on-call group of 40 exempted personnel, such as time-sensitive actions related to ongoing work. The shutdown also affects multiple other regulatory and permitting functions across other government agencies, including the Departments of Agriculture, Transportation and Treasury. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Investment funds cut net long positions on Ice TTF


20/12/24
News
20/12/24

Investment funds cut net long positions on Ice TTF

London, 20 December (Argus) — Investment funds have cut their TTF gas net long positions on the Intercontinental Exchange (Ice) by nearly 50TWh from their historic peak at the end of November, while commercial undertakings' positions have moved strongly in the opposite direction. Investment funds' net long position had climbed steadily from 202TWh in the week ending 18 October to an all-time high of nearly 294TWh by 29 November. But in the two weeks since that point, their net position has dropped again by 48TWh ( see graph ), leaving their 246TWh net long position at the smallest since 8 November, according to Ice's latest commitments of traders report. However, only around 30pc of the decrease in the net long position came from closing long positions, with the large majority coming from opening up more shorts. Total long contracts were cut to 445TWh on 13 December from 461TWh on 29 November, but short contracts jumped to 200TWh from 167TWh in the same period. Such a large trimming of the net long position contributed to falling prices over the period — the benchmark Argus TTF front-month price fell from €48.45/MWh at the start of the month to €41.10/MWh at the close on 13 December. The front-quarter, front-season and front-year contracts all fell by roughly the same amount, as the entire price curve shifted down. While investment funds reduced their net long position over these two weeks, commercial undertakings — predominantly utilities — moved in the opposite direction, with their net short position falling to 37TWh from 102TWh. This was driven entirely by opening up more long contracts, which jumped to 947TWh from 877TWh, while shorts increased by just 5TWh between 29 November and 13 December to 984TWh. Commercial undertakings' total open interest therefore soared to 1.93PWh by the end of last week, triple the volume of investment funds' total open interest. Investment funds have in the past two weeks bought "risk reduction" contracts — generally used for hedging purposes — for the first time since May 2021. This suggests that some investment funds hold physical positions that they want to hedge their exposure to, although the volumes are small at around 300GWh for both shorts and longs. While utilities' positions in the futures markets are mostly risk-reducing to offset the risk held in physical positions, investment funds' positions are typically not risk-reducing because they are bets on the direction of prices. That said, utilities and other commercial undertakings such as large industrial buyers have increasingly set up trading desks that compete with hedge funds to capitalise on price trends and volatility in recent years. Risk reduction contracts account for around 69pc of commercial undertakings' open interest, meaning the other 31pc of contracts — amounting to 600TWh — were more speculative in nature. This 600TWh of speculative total open interest is only just below the 645TWh held by investment funds. By Brendan A'Hearn ICE TTF net positions TWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: EU, UK mandates will drive global SAF demand


20/12/24
News
20/12/24

Viewpoint: EU, UK mandates will drive global SAF demand

London, 20 December (Argus) — Europe will be a primary consumption hub for sustainable aviation fuel (SAF) in 2025, driven by EU and UK mandates that come into effect in January. The mandates could push European SAF demand above 1.5mn t next year, according to Argus Consulting estimates. There should be more than enough global SAF supply to meet mandated demand in Europe in the early stages of obligations. If all announced projects are completed on time, global capacity could surpass 10mn t/yr in 2025, according to Argus Consulting, with hydrotreated esters and fatty acids synthetic paraffinic kerosene (HEFA-SPK) still the dominant SAF production pathway. But several projects have been hit with delays in the past, and some European majors have scaled back or paused their capacity plans. Actual production is likely to be far lower than nameplate capacity, with the International Air Transport Association (Iata) forecasting global output of 2.1mn t next year . European suppliers may also opt to maximise hydrotreated vegetable oil (HVO) production over HEFA-SPK. In most HEFA-SPK plants, the production process relies on first hydrotreating vegetable oils and fats, a process aligned with standard HVO production. Renewable diesel demand should increase with higher mandates for renewables in road transport and changes to German and Dutch carryover rules on renewable fuel tickets next year. At the same time, European HVO imports face barriers. Definitive EU anti-dumping duties (ADDs) on Chinese biodiesel and HVO are expected to be imposed by February . And anti-dumping and anti-subsidy duties are in place on HVO and biodiesel of US and Canadian origin . SAF is excluded from ADDs on Chinese biofuels. SAF supply has grown at a faster pace than demand this year, pushing the northwest European HEFA-SPK premium to jet fuel to record lows . The European benchmark HEFA-SPK fob ARA range assessment averaged around $2,203/t over 1 January-12 December, down from around $3,016/t in the same period last year. Ready, set, mandate Fuel suppliers will need to incorporate a 2pc share of SAF in their annual EU jet fuel deliveries from next year, with the share rising to 70pc by 2050. Synthetic aviation fuels, such as e-kerosine and hydrogen, must reach a total share of 1.2pc from 2030, rising to 35pc in 2050. The UK's mandate also requires aviation fuel suppliers to hit a 2pc SAF share in 2025, increasing linearly to reach 22pc in 2040. A UK obligation for power-to-liquid SAF will be introduced from 2028 at 0.2pc of total jet fuel demand, rising to 3.5pc in 2040. Separately, London's Heathrow airport aims to increase the share of SAF used to 3pc in 2025 as part of an incentive scheme that helps airlines cover extra costs. Beyond Europe Progress to introduce SAF blending obligations or legislate consumption targets is slower outside of Europe. In China, a pilot programme was launched earlier this year to support domestic SAF uptake. A consumption target of 50,000t was set in the country's five-year plan for 2021-25. Other initiatives in the Asia-Pacific region include South Korea's plan to require all international flights departing from its airports to use a mix of 1pc SAF from 2027 and Singapore's 1pc SAF target by 2026 for flights departing the country. Indonesia plans to require 1pc SAF from 2027, while Malaysia and Hong Kong are also expected to set targets. In the US, the level of priority to be given to renewable aviation fuels is less clear following Donald Trump's election victory. Guidance around a new producers' tax credit, set to come into effect next year, is still pending . The growth of the US SAF market has so far been driven mainly by federal and state financial incentives. By Giulia Squadrin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Australia’s Cleanaway, LMS to produce landfill gas


20/12/24
News
20/12/24

Australia’s Cleanaway, LMS to produce landfill gas

Sydney, 20 December (Argus) — Australian waste management operator Cleanaway and bioenergy firm LMS Energy will partner on a 22MW landfill gas-fired power station at Cleanaway's Lucas Heights facility near the city of Sydney. Cleanaway, Australia's largest publicly listed waste management firm, will receive exclusive rights to landfill gas produced at Lucas Heights for 20 years, the company said on 20 December. LMS will invest A$46mn ($29mn) in new bioelectricity assets, including a 22MW generator. Tightening gas markets owing to underinvestment in new supply has led to speculation that more waste-to-energy plants could be brought on line in coming years, especially in the southern regions. Landfill gas projects receive Australian Carbon Credit Units (ACCUs) by avoiding methane releases, with the total ACCU quantity calculated after a default baseline of 30pc is deducted for projects beginning after 2015. A total of 42.6mn ACCUs were issued to landfill gas projects since the start of the ACCU scheme in 2011, 27pc of the total 155.7mn and the second-largest volume after human-induced regeneration (HIR) methods at 46.68mn. Canberra is reviewing ACCU issuance for these projects, and wants most projects to directly measure methane levels in captured landfill gas to avoid overestimation. Landfill gas operations which generate electricity from the captured gases can also receive large-scale generation certificates (LGCs). LMS has 70 projects currently registered at the Clean Energy Regulator (CER) and has received 24.57mn ACCUs since the start of the scheme. This is the largest volume for any single project proponent, just ahead of Australian environmental market investor GreenCollar's subsidiary Terra Carbon with 23.57mn units. Cleanaway received almost 1mn ACCUs from two projects and has four other projects that have yet to earn ACCUs. By Tom Major and Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Trump backs new deal to avoid shutdown: Update


19/12/24
News
19/12/24

Trump backs new deal to avoid shutdown: Update

Adds updates throughout Washington, 19 December (Argus) — US president-elect Donald Trump is offering his support for a rewritten spending bill that would avoid a government shutdown but leave out a provision authorizing year-round 15pc ethanol gasoline (E15) sales. The bill — which Republicans rewrote today after Trump attacked an earlier bipartisan agreement — would avoid a government shutdown starting Saturday, deliver agricultural aid and provide disaster relief. Trump said the bill was a "very good deal" that would also include a two-year suspension of the "very unnecessary" ceiling on federal debt, until 30 January 2027. "All Republicans, and even the Democrats, should do what is best for our Country, and vote 'YES' for this Bill, TONIGHT!" Trump wrote in a social media post. Passing the bill would require support from Democrats, who are still reeling after Trump and his allies — including Tesla chief executive Elon Musk — upended a spending deal they had spent weeks negotiating with US House speaker Mike Johnson (R-Louisiana). Democrats have not yet said if they would vote against the new agreement. "We are prepared to move forward with the bipartisan agreement that we thought was negotiated in good faith with House Republicans," House minority leader Hakeem Jeffries (D-New York) said earlier today. That earlier deal would have kept the government funded through 14 March, in addition to providing a one-year extension to the farm bill, $100bn in disaster relief and $10bn in aid for farmers. The bill would also provide a waiver that would avoid a looming ban on summertime sales of E15 across much of the US. Ethanol industry officials said they would urge lawmakers to vote against any package without the E15 provision. "Pulling E15 out of the bill makes absolutely no sense and is an insult to America's farmers and renewable fuel producers," Renewable Fuels Association chief executive Geoff Cooper said. If no agreement is reached by Friday at 11:59pm ET, federal agencies would have to furlough millions of workers and curtail services, although some agencies are able to continue operations in the event of a short-term funding lapse. Air travel is unlikely to face immediate interruptions because key federal workers are considered "essential," but some work on permits, agricultural and import data, and regulations could be curtailed. The US Federal Energy Regulatory Commission has funding to get through a "short-term" shutdown but could be affected by a longer shutdown, chairman Willie Phillips said. The US Department of Energy expects "no disruptions" if funding lapses for 1-5 days, according to its shutdown plan. The US Environmental Protection Agency would furlough about 90pc of its nearly 17,000 staff in the event of a shutdown, according to a plan it updated earlier this year. 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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