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Japan pushes abatement approach to energy transition

  • Market: Coal, Crude oil, Electricity, Fertilizers, Hydrogen, Natural gas
  • 23/09/24

Japan is keen to promote its energy transition approach, focused on carbon abatement technologies, to the wider coal-reliant Asia-Pacific region.

The country has accelerated development of carbon abatement technologies to keep fossil fuels in its energy mix and boost energy security and economic growth. Japan, with its G7 counterparts, pledged to phase out "unabated" coal-fired plants by 2035, or "in a timeline consistent with keeping a limit of a 1.5°C temperature rise within reach, in line with countries' net zero pathways".

This is a major step for Japan, a resource-poor country. But legislative progress aimed at developing value chains for carbon capture and storage (CCS) and cleaner fuels, such as hydrogen and ammonia, might have encouraged Tokyo to commit, especially since the G7 text allows for some wiggle room.To ensure continued use of its abated thermal power plants, trade and industry ministry has requested ¥11.2bn ($79mn) to support CCS projects, including exploration of CO2 storage sites, for 2025-26, up sharply from the ¥1.2bn budgeted for 2024-25.

Japan has yet to set a date to achieve the phase-out target. But it had already promised not to build new unabated coal-fired plants at last year's UN Cop 28 climate talks, while pledging to phase out "inefficient" coal-fired plants by 2030. Less than 5pc of Japan's operational coal fleet has a planned retirement year, according to analysis by Global Energy Monitor, and these might comprise the oldest and least efficient plants. Coal capacity built in the last decade, following the Fukushima-Daiichi nuclear disaster, is unlikely to receive a retirement date without a countrywide policy that calls for a coal exit.

Japan's coal demand could decline, to some extent, under global divestment pressure. But the fuel remains key, as the government sees renewables and nuclear as insufficient to meet rising power demand driven by the growth of data centres needed to enable artificial intelligence.

Continental divide

The country is keen to extend its vision for "various" and "practical" pathways, including abatement technologies, to coal-reliant southeast Asia. This stems from Tokyo's sceptical view about promoting a more European approach to the energy transition — driven by wind and solar power — to Asian countries. Japan stresses the importance of more diversified pathways, including thermal power with abatement. The country aims to spur decarbonisation in Asia-Pacific through a platform called the Asia Zero Emission Community (Azec) initiated in 2022. Asia-Pacific accounts for more than half of global greenhouse gas (GHG) emissions, at 17.178bn t of CO2 equivalent, according to the IEA.

In Jakarta last month, 11 Azec countries emphasised the need to co-operate "to decarbonise coal power generation". The platform sets out options such as biogas, hydrogen and ammonia, and retrofitting with CCS and carbon capture, utilisation and storage. Japan's industries have already committed to carbon abatement at coal-fired plants in Asia, leveraging their technological know-how.

Tokyo has pledged to provide about $70bn to support decarbonisation globally. This funding is part of wider financial assistance to help mobilise the estimated $28 trillion that Asia requires. To secure the funding, Japan has already issued part of a $139bn climate transition bond and aims to strengthen the financial support through the Asia Zero Emission Centre, the latest Azec initiative, under which transitional finance will be studied further, a trade and industry ministry official told Argus.

Japan is on track to reduce its GHG emissions by 46pc by the April 2030-March 2031 fiscal year from its 2013-14 level, and hit its net zero emissions goal by 2050.

Japan CO2 emissions by sector

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07/03/25

NorthAm market presumes potash is USMCA compliant

NorthAm market presumes potash is USMCA compliant

Houston, 7 March (Argus) — North American fertilizer market players presume that potash (MOP) imported from Canada to the US will be exempt from tariffs for now, despite lack of a clear definition from the latest White House executive order. Potash that is mined and produced in Canada would be considered compliant under the US-Mexico-Canada Agreement (USMCA) and should not face a duty during the tariff pause initiated by the administration of President Donald Trump on Thursday, industry sources told Argus . That understanding should account for the vast majority of MOP produced in Canada and exported to the US. Any potash that is not USMCA certified faces a reduced 10pc duty imposed this week during the month-long delay on the broader Canada and Mexico tariffs Trump has threatened, according to the executive order signed on Thursday. Though the details of what form of Canadian potash products may not be compliant is unclear, the fertilizer market assumption is that no tariffs will apply if data can be provided by the exporter, importer or producer to show the product crossing the border is USMCA compliant, sources said. Examples of non-certified potash product could be compound NPK fertilizers, which are created by mixing nitrogen, phosphate and potassium or other micronutrients, sources said. US industry association The Fertilizer Institute (TFI) called the new executive order's actions "a positive step forward" in its efforts to stress the importance of affordable fertilizer products. On a nutrient basis, the US imported 98pc of its potash in 2023 and about 85pc of those imports came from Canada, according to TFI. But some sources have voiced confusion regarding whether other imported Canadian fertilizer products, such as nitrogen, ammonia and sulfur, would also be considered USMCA compliant. Although sulfur is wholly produced in Canada as a by-product of crude oil refining, and ammonia is created through the usage of likely Canadian natural gas, the situation would be less clear for phosphate fertilizers from Mexico, where some raw materials are imported. The US imported 33pc of its urea consumption on a nutrient basis in 2023, where 15pc of imports came from Canada. For ammonia, the US imported 12pc of its consumption, 50pc of which came from Canada. And 35pc of US ammonium sulfate imports came from Canada in 2024, according to US Census Bureau data. By Taylor Zavala Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Brazil's GDP growth accelerates to 3.4pc in 2024


07/03/25
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07/03/25

Brazil's GDP growth accelerates to 3.4pc in 2024

Sao Paulo, 7 March (Argus) — Brazil's economic growth accelerated to an annual 3.4pc last year, the fastest growth since 2021, as gains in the services and industry sectors offset contractions in the agriculture sector, according to government statistics agency IBGE. Growth accelerated from 3.2pc in 2023 and 3pc the prior year. Growth was at 4.8pc in 2021 as the economy recovered from the Covid-19 induced contraction of 3.3pc in 2020. Agriculture contracted by 3.2pc in 2024 after a 15.1pc gain the year prior. The sector's weak performance came as Brazil faced extreme climate events last year that damaged crops , IBGE said. Corn and soybean output fell by 4.6pc and 12.5pc, respectively, according to IBGE. The industrial sector grew by 3.3pc last year after a 1.6pc gain in 2023. Manufacturing industries rose by 3.8pc, driven by a higher output of vehicles, transport equipment, machinery and electric equipment, according to IBGE. Electricity and gas, water and sewage management increased by 3.6pc in 2024 but still decelerated from a 6.5pc gain a year earlier. Higher temperatures throughout 2024 drove the increase, IBGE said. On the other hand, the climate was unfavorable for power generation. The oil, natural gas and mining industry grew by 0.5pc in 2024 from a year earlier. Gross fixed capital formation — which measures how much companies increased their capital goods — rose by 7.3pc from a 3pc contraction in 2023, led by higher domestic output and capital goods imports. Exports rose by 2.9pc, while imports rose by 14.7pc last year. Investment grew by 17pc. Household consumption increased by 4.8pc from a year prior, driven by a 6.6pc unemployment rate — the lowest registered since IBGE started its historic record in 2012 — federal social aid programs and increased lending. Government spending rose by 1.9pc in 2024 from a year earlier. Quarterly GDP Brazil's GDP growth slowed to an annual 3.6pc in the fourth quarter from 4pc in the third quarter, with several sectors contracting, according to IBGE. Agriculture contracted by an annual 1.5pc in the fourth quarter, with 2.9pc and 0.9pc contractions in the wheat and sugarcane crops, respectively, IBGE said. But the industrial sector grew by an annual 2.5pc in the quarter. Manufacturing posted 5.3pc growth, led by the steel sector and higher output of machinery, equipment, vehicles and chemicals. The services sector grew by 3.4pc. The oil, natural gas and mining industry contracted by 3.6pc from a year earlier thanks to a decrease in oil, gas and iron output, IBGE said. Electricity and gas, water, and sewage management fell by an annual 3.5pc, on lower power consumption as power rates became more expensive amid a drought that struck the country in mid-2024. Household consumption grew by an annual 3.7pc, while government spending grew by 1.2pc in the fourth quarter. Gross fixed capital formation increased by an annual 9.4pc in the fourth quarter, according to IBGE. Exports fell by 0.7pc, while imports, which subtract from growth, rose by 16pc. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Kazakhstan pushes Opec+ output above target


07/03/25
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07/03/25

Kazakhstan pushes Opec+ output above target

London, 7 March (Argus) — Surging output from Kazakhstan saw the Opec+ alliance overshoot its collective crude production target in February for the first time in eight months. Opec+ members subject to targets increased output by 430,000 b/d to just under 34mn b/d in February, 110,000 b/d above target, Argus estimates (see table). This represents the alliance's largest monthly increase since September 2023. The group has signalled that more output is on the way, after eight members agreed to start unwinding 2.2mn b/d of extra cuts from April. Kazakhstan's production rose by 220,000 b/d to a record 1.75mn b/d in February, driven by the start-up of a new production unit at the Chevron-led Tengiz oil project. This helped boost Tengiz production to 878,000 b/d in February and put the country a whopping 280,000 b/d above its Opec+ target. "We fully understand we are overproducing," deputy energy minister Alibek Zhamauov says. "The main reason is that we expected [new] Tengiz production in the middle of the year, however international shareholders decided to start up in January." Kazakhstan is among the largest Opec+ overproducers and has repeatedly said it will compensate for exceeding its target since January 2024. This has frustrated other Opec+ members that have largely stuck to their targets. Zhamauov says Kazakhstan remains committed to the Opec+ alliance — "we fully understand the importance of the Opec+ mission to stabilise the oil market and price for oil". Astana says it has asked international operators at the Tengiz and Kashagan fields to make sharp production cuts so that it can meet its target. The ministry held talks with ExxonMobil, TotalEnergies, Italy's Eni and Shell this week, and energy minister Almasadam Satkaliyev will travel to the US next week to hold further discussions with company chief executives on reducing output, Zhamauov says. Kazakhstan will strive to lower crude output by 297,000 b/d to 1.45mn b/d in March, with most of the reduction coming in the second half of the month, he says. The largest Opec+ overproducer, Iraq, is also supposed to be compensating for previously overshooting its quota. But its output rose by 30,000 b/d to 4.05mn b/d in February — 50,000 b/d above target. Russia was another key overproducer last year, but its compliance has improved in recent months. Output was 20,000 b/d below its target of 8.98mn b/d in February. Other sizeable increases came from Nigeria, which increased output by 70,000 b/d, and the UAE, which rose by 60,000 b/d, with both above target. The group's output in February would have been much higher were it not for the fact that several members, including Azerbaijan, Malaysia, Sudan and South Sudan, have failed to produce anywhere close to their targets in recent months. Forward formula Opec's core Mideast Gulf members are beginning to cut official pricing formulas for April sales. Formula prices can indicate intentions on output, as producers fine-tune how affordable their crude is for marginal refiners. Saudi Aramco has already cut prices for sales to Asia-Pacific by 30-60¢/bl and for Europe by 20-30¢/bl. It kept US term prices unchanged, perhaps aware that tariffs on Canadian and Mexican imports would force US refiners to pay up for alternative sour crudes. Iraq, Kuwait and the UAE typically follow the Saudi lead on price direction. Formula cuts follow lower prices on competing spot sour crude markets, as well as expectations of a drop in demand as refineries shut for maintenance. They also reflect unexpectedly robust Russian exports in the wake of tighter US sanctions on shipping. The vacillation of US president Donald Trump over Canadian and Mexican tariffs will no doubt complicate the calculus as US refiners have another month's grace at least on crude imports before the new levies take effect. Opec+ crude production mn b/d Feb Jan* Feb target† ± target Opec 9 21.37 21.17 21.23 +0.14 Non-Opec 9 12.59 12.36 12.62 -0.03 Total 33.96 33.53 33.85 +0.11 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Feb Jan Feb target* ± target Saudi Arabia 8.93 8.88 8.98 -0.05 Iraq 4.05 4.02 4.00 +0.05 Kuwait 2.44 2.42 2.41 +0.03 UAE 2.93 2.87 2.91 +0.02 Algeria 0.92 0.90 0.91 0.01 Nigeria 1.58 1.51 1.50 +0.08 Congo (Brazzaville) 0.24 0.26 0.28 -0.04 Gabon 0.22 0.25 0.17 +0.05 Equatorial Guinea 0.06 0.06 0.07 -0.01 Opec 9 21.37 21.17 21.23 +0.14 Iran 3.38 3.33 na na Libya 1.39 1.35 na na Venezuela 0.91 0.90 na na Total Opec 12† 27.05 26.75 na na *includes additional cuts where applicable †Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Feb Jan* Feb target† ± target Russia 8.96 8.96 8.98 -0.02 Oman 0.78 0.75 0.76 +0.02 Azerbaijan 0.45 0.45 0.55 -0.10 Kazakhstan 1.75 1.53 1.47 +0.28 Malaysia 0.28 0.31 0.40 -0.12 Bahrain 0.19 0.19 0.20 -0.01 Brunei 0.09 0.09 0.08 0.01 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.07 0.06 0.12 -0.05 Total non-Opec 12.59 12.36 12.62 -0.03 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump reaches out to Iran's supreme leader


07/03/25
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07/03/25

Trump reaches out to Iran's supreme leader

Washington, 7 March (Argus) — US president Donald Trump said today he sent a letter to Iran's supreme leader, Ayatollah Ali Khamenei, in a bid to resolve US-Iranian tensions through diplomacy. "There are two ways Iran can be handled — militarily, or you make a deal," Trump said in a televised interview released today. "I would prefer to make a deal, because I'm not looking to hurt Iran." Trump said he reached out directly to Khamenei, saying "I hope you're going to negotiate because it's going to be a lot better for Iran, and I think they want to get that letter." Khamenei is the final decision-maker under the Iranian constitution, with authority to direct or overrule Iranian president Masoud Pezeshkian's government. Trump has previously denounced former president Barack Obama's diplomacy with Iran but appears to now be following a similar path. Obama exchanged correspondence with Khamenei as the two countries hashed out the Joint Comprehensive Plan of Action (JCPOA) agreement. The JCPOA went into effect in 2016, lifting the US sanctions against Iran in exchange for Tehran's acceptance of restrictions on its nuclear program. Trump in 2018 unilaterally withdrew the US from the JCPOA, leading Tehran to resume work on uranium enrichment and other components of its nuclear program that, according to US experts, in theory would allow Iran to manufacture nuclear weapons in a matter of weeks. Tehran denies pursuing nuclear weapons. The ultimate goal in his diplomacy with Tehran is to prevent Iran from acquiring nuclear weapons, Trump said. "I'm not sure that everybody agrees with me, but we can make a deal that would be just as good as if you won militarily," Trump said. Tehran did not immediately react to Trump's announcement. Khamenei last month appeared to downplay the possibility of renewed diplomacy with the new US administration, noting Trump's withdrawal from the JCPOA. "Negotiating with a government like the US government is not wise, intelligent or honorable," Khamenei said last month. Trump last month directed US government agencies to find ways to dial up economic pressure on Tehran. US sanctions against Iran are already at a maximum, and nothing short of a naval blockade could prevent the flow of Iranian crude to buyers in China through a well-established network of ships, traders and financial intermediaries that have been able to bypass US sanctions. Iranian crude supply to China rebounded in February as more ports allowed access to sanctioned shipping. China's imports of Iranian crude were on course to hit 1.5mn b/d last month. But Trump's anti-Iran directive last month is more likely to hit Iraq, which depends on natural gas and electricity imports from its neighbor. Iraq's electricity ministry has asked the government to raise gasoil imports as a precautionary measure to ensure the country has enough fuel for power generation head of the peak demand summer months. The US since 2018 has granted periodic sanctions waivers to Iraq to allow Baghdad to import energy from Iran. The current waiver is set to expire on Saturday, but the State Department says it has not decided whether to renew it yet. "We are urging the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible," the State Department said on Thursday. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Libya unveils upstream licensing round details


07/03/25
News
07/03/25

Libya unveils upstream licensing round details

London, 7 March (Argus) — Libya has unveiled new details from its first upstream oil and gas licensing round in 18 years. The licensing round offers 22 blocks for exploration and development, split equally between onshore and offshore, according to a summary brochure seen by Argus . State-owned NOC said the blocks are estimated to hold in-place resources of more than 10bn barrels of oil equivalent (boe), while nine of the blocks contain undeveloped discoveries with estimated in place reserves of 1.68bn boe. The bid round is being offered up with a new Production Sharing Agreement (PSA) model, replacing the outdated Epsa 4 contract model of Libya's last licensing round in 2007. NOC said the new PSA could increase contractor internal rate of return (IRR) to 35.8pc compared with 2.5pc under existing terms. Contractors would also share profits with NOC from day one, while a fixed rate for cost recovery would shorten the investment payback period. While the licensing round was officially launched on 3 March in Tripoli, little or no detail had been unveiled until today. There still appears to be no publicly available information on the timeline for bid submissions and awards. Libya also appears to have updated its long-standing crude production target of 2mn b/d. The brochure accompanying the licensing round now mentions a "vision to produce 2mn-3mn b/d." Libya currently produces about 1.4mn b/d of crude and 1.2bn ft³/d of gas, which it wants to increase to 4bn ft³/d. Oil minister Khalifa Abdulsadek previously told Argus that the licensing round was primarily aimed at boosting reserves and keeping output steady. The country's political divisions remain a key risk to the success of Libya's output goals and its latest licensing round. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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