IEA backs South Korea’s CFE after legal setback
The IEA today expressed support for South Korea's carbon-free energy (CFE) initiative, days after the country's constitutional court ruled that its carbon neutrality law does not conform to the constitution.
The CFE initiative aims to expand all forms of energy sources that do not emit greenhouse gases (GHGs), which notably includes nuclear power, as well as hydrogen and carbon capture, utilisation and storage.
The IEA and South Korea also plan to further work together on the initiative to achieve net zero emissions by 2050. The IEA and South Korea earlier in March also started a research project to analyse the viability of deploying a range of carbon-free energy sources.
But the endorsement for the South Korean-led CFE initiative comes after the country's constitutional court on 29 August ruled that its carbon neutrality law fails to "effectively guarantee gradual and continuous reductions up to 2050, the target year for carbon neutrality". This was because the law does not provide quantitative goals for GHG reduction targets over 2031-49, with the constitutional court adding that the GHG reduction targets are governed in a way that "shifts an excessive burden to the future".
Part of the legislation of the Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Crisis states that the government shall set "a national mid- and long-term greenhouse gas reduction target" to reduce national GHG emissions by at least 35pc from the 2018 level by 2030. South Korea is aiming to cut emissions by 40pc from 2018 levels by 2030 and carbon neutrality by 2050.
The regulation lacks "the required minimum characteristic as a protective measure that corresponds with the risk situation of the climate crisis and thereby violated the principle of prohibition of insufficient protection" with regards to the governance of reduction targets over 2031-49, according to the constitutional court.
Not prescribing any approximate quantitative reduction targets for 2031-49 and having the government decide on the matter every five years also "violated the principle of statutory reservation which includes the principle of parliamentary reservation", the constitutional court added. It is the duty of the state to "address the climate crisis by taking measures to mitigate such risks through reducing the causes of climate change and to adapt to its consequences".
The court did not declare a simple unconstitutional decision, as this would mean the law losing its effect in its entirely, including the quantitative intermediate target. This would result in a "more unconstitutional situation" where the institutional mechanism for GHG mechanism regresses. The law will instead stay in force until it is amended, with a deadline of 28 February 2026.
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Green projects struggle to access €724bn EU funds
Green projects struggle to access €724bn EU funds
Brussels, 2 September (Argus) — EU auditors today raised concerns about the ability of member states to make full use of the €724bn pot allocated to climate-related objectives under the Recovery and Resilience Facility (RRF) — designed to mitigate the economic impact of the Covid pandemic — by the 31 August 2026 deadline. Auditors also highlighted significant compliance challenges facing hydrogen and renewable energy projects. Romania, for instance, had to remove a sub-measure for a hydrogen-ready and renewable gas distribution network, as it became evident the project would not be completed within the RRF's tight timeline. And Italy withdrew a project for offshore electricity generation infrastructure, including wave-based energy, over deadline concerns. "We are flagging risks, as EU countries had drawn down less than a third of the planned funds at the halfway point and made less than 30pc progress towards reaching their predefined milestones and targets," European Court of Auditors (ECA) member Ivana Maletic said. Maletic told Argus that no specific data are available yet on the progress of green deal, as opposed to other RRF projects, such as digitalisation. By the end of 2023, the ECA calculates that the European Commission had disbursed just €213bn, including €56.5bn in pre-financing. Beyond the challenge of meeting the 31 August 2026 completion deadline, some countries' administrative bottlenecks have also hindered progress. For example, Romania's failure to submit contracts for projects with a combined generation capacity of at least 300MW led to the partial suspension of a measure for combined heat and power generation in district heating systems. Another obstacle for projects is the 'do no significant harm' principle — a key component of EU sustainable finance legislation. The principle imposes strict criteria, typically excluding funding for companies deriving 1pc or more of their revenues from hard coal and lignite, 10pc from oil fuels, or 50pc from natural gas. Companies generating more than 50pc of their revenue from power generation with a greenhouse gas intensity exceeding 100g of CO2 equivalent/kWh would also normally be excluded from funding. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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.
TotalEnergies invests $100m in US forest carbon credits
TotalEnergies invests $100m in US forest carbon credits
London, 30 August (Argus) — 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. By Nicola De Sanctis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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