California E15 bill sputters

Market: Emissions
08/10/24

An attempt by California lawmakers to eventually allow the sale of a 15pc ethanol blend gasoline (E15) to temper consumer fuel prices in California has likely stalled in the state senate.

ABX2-9, sponsored by state assembly member Cottie Petrie-Norris (D), would have required the California Air Resources Board (CARB) to finish its evaluation of the potential for moving to an E15 blend from E10, the highest ethanol blending approved in the state, supported by a fee on ethanol producers.

"As you might imagine, I am extremely disappointed to see this common-sense policy fail to move forward as part of the extraordinary session," Petrie-Norris said.

The bill cleared the state assembly with no opposition last week as part of a special session called by governor Gavin Newsom (D) to address retail fuel prices.

ABX2-9, read for the first time on Monday in the state Senate, has been referred to its rules committee for assignment. But the bill will not be referred to the Special Committee on Fuel Supply and Price Spikes for further action, according to state Senate president pro tem Mike McGuire (D).

"While the goals of this legislation are laudable, and we're grateful to the Assembly member's leadership, a more thorough analysis and additional work is needed on the proposal," McGuire said.

California, unlike the rest of the country, has a permanent ban on E15 gasoline due to environmental concerns, such as the potential for higher emissions of NOx, which contributes to smog. Outside of the state, retailers are allowed to sell E15 during only the winter months, but the EPA has granted waivers for summertime sales of E15 each of the last three years.

For now, the California legislature is focusing on AB X2-1, which would require in-state refiners to maintain minimum stocks of gasoline and gasoline blending components, a proposal supported by Newsom.

The state Senate, which has been slow to heed a request by Newsom at the end of August for a special session, convened this week — with the aim of a speedy close to the session.

"With this session we'd like to be able to move quickly and efficiently," McGuire said on Monday.

By Denise Cathey and Payne Williams

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

29/11/24

Denmark pledges DKr150mn to Brazil's Amazon fund

Sao Paulo, 29 November (Argus) — Denmark will donate 150mn Danish kroner ($21.3mn) to Brazil's Amazon fund, adding the Nordic country to a growing list of nations supporting the South American country's efforts to preserve the Amazon forest. The Amazon fund issues grants to projects that prevent, monitor and combat deforestation while promoting conservation and sustainable development in the Amazon. The fund was created in 2008 and is managed by Brazil's Bndes development bank. It has R4.5bn ($750mn) under management and has supported 114 projects to date. Norway is the fund's largest donor, having pledged R3.5bn, followed by German development bank KfW with R388mn and the US with R291mn. Other donors include the UK, Switzerland and Japan. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more

News

Cop 29 Article 6 deal ushers in new carbon markets era

29/11/24

News

29/11/24

Cop 29 Article 6 deal ushers in new carbon markets era

New NDCs will show how many countries aim to use Article 6 mechanisms towards climate goals London, 29 November (Argus) — Countries concluded nine years of negotiations on UN-level carbon market mechanisms at the Cop 29 climate conference in Baku, Azerbaijan, this month, opening up new avenues for carbon trading that will present both opportunities and challenges for existing systems. Cop 29 ended last week with agreement on the crucial outstanding elements to allow the full operationalisation of Article 6 of the Paris Agreement, which includes two mechanisms designed to help countries co-operate on meeting their emissions cut targets, or nationally determined contributions (NDCs), through carbon trading. Article 6.2 provides for the bilateral trading of so-called internationally traded mitigation outcomes (Itmos) between countries, while Article 6.4 establishes the Paris Agreement Crediting Mechanism (PACM). The mechanisms distinguish themselves from existing carbon markets largely in the rules and methodologies underpinning the credits. Article 6.2 credits will be "correspondingly adjusted", meaning emissions savings cannot be double-counted by the buyer and seller. And Article 6.4 specifically requires the downward adjustment of emissions cut pathways over time, as well as providing environmental and human rights safeguards and a buffer pool to address any reversal of achieved mitigation. This offers potential guidance to other carbon markets, whether existing schemes in need of reform or newly established. The unregulated voluntary carbon market (VCM) has notably suffered a reputational crisis since last year, largely as a result of questions surrounding the integrity of its credits. Brazil's planned emissions trading system is "sure to benefit" from the benchmarks established by Article 6.4, Bruno Carvalho Arruda of the Brazilian foreign affairs ministry said this week. But Article 6 also potentially poses competition to existing systems, if the credits that it issues are perceived to be more robust. "The UN system will not be immune from the same criticisms as the VCM," Switzerland's lead negotiator on international carbon markets under Article 6, Simon Fellermeyer, told delegates at Cop 29. But its basis of legitimacy — an inclusive system, which has been developed over a long period of time — gives confidence to participants and could act as a "guiding star" that other markets could try to align with, he said. Healthy competition There is a role for independent carbon crediting registries, but they will be looking at the UN process for comparison, chair of the Article 6.4 supervisory body Olga Gassan-Zade said following the body's initial adoption of key rules for the mechanism last month. "It's healthy to have competition," she said. The submission of new NDCs under the Paris deal, due in February, should bring some more clarity as to how many countries intend to make use of Article 6 mechanisms towards their goals, as they set out how they intend to meet ever-stricter emissions cut targets, this time for 2035. Some parties, including the EU, have made it clear that they will not use Article 6 to meet their targets under the Paris agreement. But deputy director-general of the European Commission's climate directorate, Jan Dusik, still welcomed the agreement on Article 6.4 at Cop 29 as a "significant achievement", emphasising the "complementary role" it can play for individual member states that want to make additional emissions cuts beyond the bloc's NDC, as well as for EU companies. And the flow of money between regions through Article 6 mechanisms could become all the more vital in light of the $300bn/yr climate finance deal reached in Baku, which is widely regarded as inadequate by developing countries. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Cop: Baku mitigation outcomes disappoint

29/11/24

News

29/11/24

Cop: Baku mitigation outcomes disappoint

London, 29 November (Argus) — Parties hoping for higher ambition on mitigation — reducing emissions of greenhouse gases — left the UN Cop 29 climate summit in Baku, Azerbaijan, last week disappointed, after their attempts to reach an ambitious outcome were thwarted. Eyes now turn to next year's summit in Belem, Brazil, where an uncertain geopolitical context and US unwillingness to engage could make mitigation commitments all the more difficult to achieve. The conference achieved the operationalisation of article 6 of the Paris agreement , which allows for international trading of carbon credits. A new climate financing goal to follow on from the $100bn/yr promise for 2020-25 was agreed, although the amount on offer and terms left recipient countries deeply disappointed. Developed countries had pushed for the conference's outcomes to recommit to and build on the historic pledge made at last year's Cop in Dubai to transition away from fossil fuels. But the declaration of host Azerbaijan's president Ilham Aliyev that fossil fuels are a "gift from god" may have set the tone for the following two weeks of negotiations. Hopes alighted on two texts to have Dubai outcomes reflected at Baku — the UAE dialogue on the global stocktake and the mitigation work programme (MWP). But parties fundamentally disagreed on what these texts should include. An "agenda fight" on the first day of the conference caused the opening plenary to be interrupted, with parties disagreeing on whether the global stocktake should be classed under matters related to finance. A fudge was agreed, leaving the text under finance, but with a footnote. This would "provide reassurance that the placement does not prejudge the outcome," Cop president Azerbaijan's Mukhtar Babayev said. The first draft text, which came out near the beginning of the second week, still contained diametrically opposed visions on what the dialogue could consist of. Reciprocal accusations of cherry-picking flew. Saudi Arabia insisted that "the scope of the dialogue is on finance, and [the draft text] is advancing mitigation-centric cherry-picking." The Arab Group would "never accept" a text centred around positions which attempt to draw mitigation into the UAE dialogue, Saudi Arabia said. New Zealand claimed that the UAE dialogue was advancing on all elements except mitigation, and said such cherry-picking was unacceptable. Parties could not reach agreement, rejecting the final draft presented in the early hours of 24 November, two days after the official end of the summit. Developed countries criticised what they called a lack of ambition, with Switzerland saying the text contained "attempts to backtrack on the commitments taken last year", and Australia saying "some bodies have sought to slow or stymie discussions." Vulnerable developing states opposed the text too, with Fiji calling the result an "affront" to the Paris agreement. The mitigation work programme (MWP) text — the result of a workstream set up at Cop 27 in Egypt to provide a forum for discussing means to reduce emissions — was gavelled through without objections, but significantly watered down from drafts. The final text excised references in the preamble to temperature targets and net-zero carbon emissions, did not refer to fossil fuels, and mentioned emissions reductions only in specific contexts. The MWP final text did not provide guidance or encouragement for high ambition on the upcoming round of nationally determined contributions (NDCs) — the documents in which states set out their climate goals for the coming decade. States have until February 2025 to publish the new versions of these documents, which will set out their plans for emissions reductions to 2035. Instead the text highlighted their "nationally determined" nature, a warning against attempts to impose top-down targets on emissions reductions on other states. Other initiatives on mitigation appeared to fall by the wayside. Azerbaijan in July announced its plans for a $1bn "climate finance action fund" to be provided by fossil fuel-producing states and firms. But the plan received no more mention at Baku. Another presidency pledge, to increase global power-sector energy storage and build or refurbish 25mn km of grid infrastructure made an appearance in a draft UAE dialogue text, but was cut for the final, non-adopted version. The outcome of Cop 29 leaves a " mountain of work " to be done at the next Cop in Belem in 2025, according to UNFCCC executive secretary Simon Stiell. Countries will have published their latest NDCs by then, but without the spur of a strong outcome from Baku pushing towards high ambition. Developed countries had already set their sights on an ambitious outcome on mitigation in Brazil, and the lack of reinforcement of the Dubai outcome this year will make that all the more difficult to achieve. The likely role of the US in next year's talks offers little consolation. The election of Donald Trump in the weeks before this Cop opened threw a spanner in the works. Trump withdrew the US from the Paris agreement during his last term, and has indicated his intention to do so again. But with the withdrawal process taking one year from notification, and Trump not due to be inaugurated until January, the US will once again be present next year, but probably as an unwilling partner. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Australia could issue over 9mn safeguard carbon units

29/11/24

News

29/11/24

Australia could issue over 9mn safeguard carbon units

Sydney, 29 November (Argus) — Australia's Clean Energy Regulator (CER) could issue over 9mn safeguard mechanism credits (SMCs) to facilities that reported emissions below their baselines for July 2023-June 2024. This was 4-6 times higher than previously estimated, the Climate Change Authority (CCA) said in its 2024 Annual Progress Report released late on 28 November. A total of 60 out of 215 facilities covered by the safeguard mechanism reported scope 1 greenhouse gas (GHG) emissions below their baselines and could be eligible to apply for a total estimated 9.2mn SMCs, the CCA said. Australia's Department of Climate Change, Energy, the Environment and Water (DCCEEW) late last year estimated SMC issuances would start at just 1.4mn units in 2023-24, while the Clean Energy Regulator (CER) indicated issuances would be "relatively modest initially" in September. The estimates are based on preliminary 2023-24 safeguard data provided by the CER, with the CCA noting the final number of SMCs issued could be affected by possible baseline variations, because of changes in methods used to calculate emissions. The use of flexibility mechanisms, including trade-exposed baseline adjusted (Teba) arrangements and multi-year monitoring periods, will also affect facility baselines and affect the final number of SMCs generated, it added. "An important ongoing watchpoint will be the extent to which safeguard facilities rely on Australian Carbon Credit Units (ACCUs) and SMCs to meet their declining baselines, as opposed to reducing their onsite emissions," the CCA said. Preliminary data showed 153 of the 215 covered facilities — or 71pc of the total — had emissions higher than their baselines in 2023-24, by an estimated aggregate amount of 10.7mn t of CO2e. This would be the maximum exceeded volume, the CCA said, although the exact number will be determined once any use of the flexibility mechanisms is finalised by the CER. This will affect the number of ACCUs or SMCs that facilities that went above their baselines will be required to surrender by the 31 March 2025 deadline under the reformed safeguard mechanism. A total of 219 facilities were under the mechanism in 2022-23, with reported emissions of 138.7mn t of CO2e and ACCU retirements rising to 1.22mn units from 739,000 the previous year. The preliminary data for 2023-24 indicated covered emissions of 135.8mn t of CO2e, down by 2.9mn t of CO2e from the previous year, the CCA said. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

German opposition insists on carbon pricing role

28/11/24

News

28/11/24

German opposition insists on carbon pricing role

Berlin, 28 November (Argus) — Germany's dominant opposition party group CDU/CSU, which is almost certain to lead the next federal government following early elections on 23 February, has warned against "ideological" energy and climate policy, and pledged it will give a stronger role to carbon pricing. "Climate policy must be accepted," deputy head of the CDU/CSU parliamentary group Jens Spahn told delegates at an industry conference this week, after not having been accepted "in the last two years". The CDU/CSU will not support the outgoing government, which lost its parliamentary majority earlier this month, on the proposed power plant bill currently under consultation, Spahn said. He cited the bill's "dirigiste" slant, reflected for instance in the fixed time frames for switching to hydrogen. The CDU/CSU will also roll back the buildings energy act passed last year, with a focus on putting carbon pricing at the centre of the law and not "enforcing ideological choices", Spahn said. The current buildings energy act supports the shift to a heating sector predominantly based on heat pumps and decarbonised heat grids. But a focus on reducing CO2 as quickly as possible, rather than aiming for "the perfect solution", would make easier solutions such as combining heating oil with bio-oil or gas with hydrogen possible, Spahn said. Spahn underlined that heat pump sales had been rising for years before the buildings energy act came into force following a months-long acrimonious debate, since when they have plummeted. And he warned against keeping industries in Germany that "permanently depend on subsidies to function". It should be acceptable for Germany to meet its target to become carbon neutral in 2045 a few years later, Spahn added. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more