TotalEnergies invests $100m in US forest carbon credits
TotalEnergies has signed a $100mn agreement with US-based carbon-focused firms Anew Climate and Aurora Sustainable Lands to set up improve forest management (IFM) projects in the US.
Anew and Aurora will oversee a portfolio of 20 projects aimed at deploying IFM practises over 300,000 hectares in 10 US states. TotalEnergies will retire the carbon credits generated by these projects beyond 2030 "to voluntarily offset part of its remaining direct Scope 1 and 2 emissions", the company said. The projects aim to generate carbon credits through the use of sustainable management practises to preserve carbon sinks, reduce timber harvesting and improve water and soil quality. Estimates on the number of carbon credits potentially generated by the projects were not disclosed. "TotalEnergies plans to invest $100mn/yr to build a portfolio of projects capable of generating at least 5mn t of CO2 equivalent/yr by 2030," the firm said.
In June, US tech giant Microsoft signed a similar deal with Anew for 1mn IFM carbon credits.
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CCUS, hydrogen manage expectations ahead of Cop 29
CCUS, hydrogen manage expectations ahead of Cop 29
London, 2 September (Argus) — The final text from last year's UN Cop 28 climate summit in Dubai included a nod to carbon capture, use and storage (CCUS) and "low-carbon hydrogen" production — a first mention for both in Cop outcome texts and rare specificity. But these developing technologies have made little tangible progress since the conference, with few new commercial CCUS projects announced, while investment in hydrogen has slowed. Hydrogen industry participants are not predicting immediate strides forward for the sector at Cop 29, scheduled to take place in Baku, Azerbaijan, in November — industry association Hydrogen Europe is managing expectations for the event, and is already pinning hopes on next year's Cop 30, in Brazil. But it may benefit indirectly from the summit's higher-level initiatives, such as boosting energy transition finance and spurring bilateral carbon credit trading, they say. Baku may struggle to meet the high bar set at last year's Cop, which was described as a "historical moment" by industry group the Hydrogen Council. Perhaps in tacit recognition that hydrogen will be out of the limelight in Azerbaijan — which lacks robust ambitions for the technology — Hydrogen Europe has its hopes pinned on broader initiatives to give the sector a leg-up. Azerbaijan's aim to set up a climate fund bankrolled by fossil fuel companies and oil-producing country governments would be welcome, Hydrogen Europe chief executive Jorgo Chatzimarkakis says. Details of the potential fund are not clear, but it could back renewables, as well as supporting countries struggling to adapt to climate change. Progress at Cop 29 in finalising the details of the Paris Agreement's Article 6 — which allows countries to transfer carbon credits earned from cutting greenhouse gas (GHG) emissions to help other countries meet their climate targets — would "benefit hydrogen big time", Chatzimarkakis adds. It could help to unlock projects in hydrogen-hopeful countries such as Namibia and Mauritania, which have plentiful sun, wind and space but lack straightforward access to finance, he says. For African countries, securing finance is the "single most critical challenge" in sustainable development, the African Climate Foundation says. The continent receives less than 3pc of global renewables investment and its governments will make a "concerted push" for more access to financing at Cop 29, the foundation's energy access and transitions programme manager, Sahele Fekede, says. Hydrogen's bubble deflating? But access to finance is only part of the battle, as several hydrogen-focused investment funds were already established at previous Cops, and governments have earmarked generous subsidy schemes for the sector. The biggest bottleneck this year appears to be commercially viable projects with confirmed customers. The industry has experienced sluggish progress over the past 12-18 months — far from the frenzy of projects and partnerships announced at Cop 27 in 2022, when hydrogen optimism ran high. Firms and governments have pulled back on hydrogen targets recently, but Cop 29 could see some new announcements. And a recent rise in hydrogen investment decisions in Europe, India and Canada, worth billions of dollars collectively, may mean the industry is turning a corner. Cop 29 offers the chance for "material advancements" for hydrogen in global technical standards and certification solutions, Hydrogen Council chief executive Ivana Jemelkova says. But 39 governments pledged to support mutual recognition of hydrogen certificates at Cop 28, so it is doubtful if anything more could be presented on this front in Baku. Key governments also endorsed the first set of technical standards to measure the CO2 footprint of different hydrogen plants at Cop 28 — a vital step to underpin certification. But work to expand this CO2 methodology to cover the midstream section is not expected until 2025-26. Implementing clear "demand drivers" must be the other "critical" talking point, Jemelkova says. Market participants see a lack of willingness to pay for clean hydrogen stifling investment decisions. In contrast, demand within the CCUS industry appears strong, with significant numbers of industrial emitters committing to capture CO2, and setting up pilot projects, while most oil and gas producers are diversifying to some extent into CO2 storage. But subsidy schemes are still under development in many countries and the sector's evolution is often hampered by logistical challenges — getting the capture, storage and transport elements ready simultaneously. The vast majority of CCUS and carbon capture and storage (CCS) facilities are at the planning stage, and many have not yet started construction. Of the almost 840 CCS facilities mapped by energy watchdog the IEA, just 51 are operational. Of these, 10 sequester the CO2 in dedicated storage, while the CO2 from a further six will be used. These 16 plants have announced a combined maximum capacity of 12.7mn t/yr CO2, IEA data show. Carbon capture controversy CCUS and CCS projects frequently attract criticism. They are used to justify continued fossil fuel use and delay action on cutting GHG emissions, non-governmental organisations (NGOs) say. The technology, while cautiously backed by the UN Intergovernmental Panel on Climate Change's overarching climate science reports, is not fully proven at scale for climate purposes, and can be energy-intensive. Oil-producing countries often cite the technology at climate talks, arguing the need to reduce emissions from oil and gas use rather than removing the source of those emissions. The specific language on CCUS in the Cop 28 outcome text is likely to have been included to mollify fossil fuel-producing countries. The EU was clear ahead of Cop 28, setting a firm position that CCS or CCUS should play a minor role in tackling climate change. Use of fossil fuels with CCUS should only be an option for "specific hard-to-abate sectors", EU climate commis sioner Wopke Hoekstra said. He doubled down during the summit, telling delegates that "we cannot CCS ourselves out of the space" to address climate change. But the bloc has since released a proposed carbon management strategy that leans heavily on CCUS to hit ambitious climate goals — although work would have started on the plan well before Cop 28. The EU aims to map potential CO2 storage areas and wants carbon capture to cover all industrial process emissions by 2040. Europe — including non-EU members Norway, Iceland and the UK — is by far the region furthest ahead, with significant CO2 storage potential and the resources to drive a nascent industry. The past year has seen some new CO2 storage licences awarded, and incremental progress on subsidy frameworks, but a lack of commercial agreements and concrete decisions persists, while start dates for existing developments have been pushed back. Both CCUS and hydrogen are developing industries and need substantial investment — from the private sector, but also public funding to de-risk an emerging market. Just five jurisdictions — the US, EU, Canada, Norway and the Netherlands — are responsible for 95pc of public funding for CCS and "fossil hydrogen" to date, NGO Oil Change International says, putting subsidies for the technologies at $30bn in total. Finance will be the "centrepiece" of Cop 29, and given previous mention in a Cop text, CCUS and hydrogen are both well positioned to receive energy transition funding. But the industries also need mandates, subsidies and widely used regulatory frameworks to advance. By Georgia Gratton, Pamela Machado and Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia faces uncertainty over climate credentials
Australia faces uncertainty over climate credentials
Sydney, 2 September (Argus) — Australia's Labor Party-led federal and state governments have advanced key policies over the past year that could help the country meet its 2030 emissions reduction targets. But increased climate opposition, looming national elections in 2025 and policies supporting fossil fuel use threaten to slow the momentum. Canberra has moved to address the country's ability to meet its key 2030 target of renewables accounting for 82pc of energy use — a weak spot in its greenhouse gas (GHG) emissions reduction plan. The goal was looking increasingly unachievable without support so the government expanded its Capacity Investment Scheme (CIS), launching a first major 6GW tender in May. Tenders will run every six months until 2026-27 for a total of 32GW, consisting of 23GW of renewables — solar, wind and hydro — and 9GW of dispatchable capacity such as pumped hydro and grid-scale batteries, all to be in operation by 2030. Australia could achieve a 42pc GHG emissions reduction from 2005 levels by 2030 under a scenario "with additional measures", which include the expanded CIS, the government's projections show. This would be just short of the legislated 43pc target, prompting ministers to assert the goal could be within grasp. But the country must resolve problems arising from its increasingly constrained electricity grid, which have been compounded by slow planning and environmental assessment processes, in part because of rising community opposition. The renewables and transmission rollout has been slower than expected, and some states will be paying utilities to postpone the closure of coal-fired plants, raising concerns that any further extensions could impact the 2030 national target. Australia also faces resistance in other key sectors. Canberra had to backtrack on fuel efficiency standards for new passenger and light commercial vehicles, meaning it may need to look at other options to cut emissions from transportation. This sector currently accounts for a fifth of Australia's total GHG emissions, but could be the largest source by 2030 as the electricity sector decarbonises. Nuclear option Labor, which governs Canberra and all Australian states and territories except Tasmania, faces rising competition in elections next year. The opposition Liberal-National coalition in June said it continued to support achieving net zero emissions by 2050, but warned that Labor's revamped 2030 targets could not be met. Labor's "renewables-only approach" raises supply security and cost issues, the opposition says. It promises instead to focus on a nuclear energy plan to bring state-owned reactors on line as early as 2035-37, if it is elected next year. The opposition coalition has declined to set its own 2030 goal for GHG emissions cuts and is yet to provide more details about its plans, but its strategy of capitalising on the cost-of-living crisis and discontent over large-scale renewables and transmission projects across regional and rural communities seems to be working. Recent polls indicate lower approval ratings for prime minister Anthony Albanese. Australia will join the UN Cop 29 climate conference in Azerbaijan in November looking to win its bid to co-host Cop 31 in 2026 with its vulnerable Pacific island neighbours. But uncertainty over its climate ambitions requires the country to assert its position as a new global climate leader and move on key issues agreed at Cop 28, including transitioning away from fossil fuels, as Pacific countries demand. But Australia still sees gas playing a crucial, albeit reduced, role in its energy transition, and a new strategy in May stated the need to bring new gas supplies on line to keep domestic energy affordable and maintain Australia's status as a reliable LNG supplier. Almost 80pc of Australia's fossil fuel CO2 footprint in 2022 came from its exported carbon, non-governmental organisation Climate Analytics says. By Juan Weik Australia's emissions mn t CO2e Sector 2005 2020 2025* 2030* Electricity 196.7 172.0 131.6 81.4 Stationary energy 82.2 99.9 101.9 96.4 Transport 82.0 93.2 102.2 101.6 Fugitive 42.8 53.6 49.8 46.5 Agriculture 86.0 72.6 79.0 79.8 Industrial processes 30.1 31.9 29.8 24.5 Waste 15.7 13.5 13.2 13.1 LULUCF† 80.7 -42.5 -55.3 -57.1 Total 616.3 494.2 452.1 386.0 Total WAM scenario‡ 358.0 *projected †land use, land-use change and forestry ‡with additional measures — Australian government Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil's Bndes backs reforestation firm
Brazil's Bndes backs reforestation firm
Sao Paulo, 29 August (Argus) — Brazil's Bndes development bank approved R160mn ($28.7mn) in financing for reforestation company Mombak, which will use the funding for projects in Para state that will generate carbon offsets to be sold in the international market. The company has planted over 3mn native tree species in Para as part of its broader efforts to recover degraded areas in the Amazon basin where deforestation levels are highest. Mombak will receive R80mn from the Bndes' Climate fund and another R80mn from the banks' Finem line of credit. This is not Mobak's first project to sell carbon offsets. The company has a deal with Microsoft for 1.5mn offsets and with automobile racing firm McLaren. The funding is part of a partnership between Bndes and the environment ministry to reduce deforestation in an area known as the "deforestation arch" in the Amazon, with the goal of recovering 6mn hectares (ha) of degraded area in this region by 2030 and 18mn ha by 2050. This environmentally vulnerable region has received R1bn in financing since it was officially targeted at the Cop 28 UN climate talks. Mombak was founded in 2021 by former executives from Brazilian tech companies 99 and Nubank. The company has raised roughly R1bn in capital to invest in reforestation projects. It also received backing from the Canada Pension Plan Investment Board, Bain Capital, French insurance company AXA and the Rockefeller Foundation. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK eyes new environmental guidance for oil, gas: Update
UK eyes new environmental guidance for oil, gas: Update
Adds comment from Shell London, 29 August (Argus) — The UK government will develop new environmental guidance for oil and gas firms, in the light of a recent Supreme Court decision that ruled consent for an oil development was unlawful, as the scope 3 emissions — those from burning the oil produced — were not considered. The ruling means that "end use emissions from the burning of extracted hydrocarbons need to be assessed", the government said today. The government will consult on the new guidance and aims to conclude the process "by spring 2025", it said today. It will in the meantime halt and defer the assessment of any environmental statements related to oil and gas extraction and storage activities until the new guidance is in place, including statements that are already being assessed. The Supreme Court in June ruled that Surrey County Council's decision to permit an oil development was "unlawful because the end use atmospheric emissions from burning the extracted oil were not assessed as part of the environmental impact assessment". The government also confirmed that it will not challenge judicial reviews brought against the development consent granted to the Jackdaw and Rosebank oil and gas fields in the North Sea. A judicial review in the UK is a challenge to the way in which a decision has been made by a public body, focusing on the procedures followed rather than the conclusion reached. Environmental campaign groups Greenpeace and Uplift launched legal challenges in December seeking a judicial review of the government's decision to permit Rosebank. Norway's state-owned Equinor and London-listed Ithaca hold 80pc and 20pc of Rosebank, respectively. Greenpeace in July 2022 separately filed a legal challenge against the permitting of Shell's Jackdaw field. "This litigation does not mean the licences for Jackdaw and Rosebank have been withdrawn", the government said. The Labour government, voted into office in July , pledged not to issue any new oil, gas or coal licences, but also promised not to revoke existing ones. Equinor is "currently assessing the implications of today's announcement and will maintain close collaboration with all relevant stakeholders to advance the project. Rosebank is a vital project for the UK and is bringing benefits in terms of investment, job creation and energy security", the company told Argus today. Shell is "carefully considering the implications of today's announcement... we believe the Jackdaw field remains an important development for the UK, providing fuel to heat 1.4mn homes and supporting energy security, as other older gas fields reach the end of production", the company told Argus . North Sea oil and gas production "will be a key component of the UK energy landscape for decades to come", the government said today. The UK government introduced a climate compatibility checkpoint in September 2022, designed to ensure that oil and gas licensing fits UK climate goals. The UK has a legally-binding target of net zero emissions by 2050. The checkpoint, though, does not take into account scope 3 emissions. These typically make up between 80pc and 95pc of total oil and gas company emissions. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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