Canada sets 2035 emissions reduction goal

Market: Crude oil, Emissions, Natural gas
13/12/24

Canada has set a new 2035 climate goal, aiming to reduce its greenhouse gas emissions by 45-50pc by 2035, from a 2005 baseline.

This builds on its 2030 target of a 40-45pc emissions reduction, again from 2005 levels. Canada's emissions had been in 2015 projected to rise by 9pc by 2030, from 2005 levels, "but we are now successfully bending the curve", the Canadian environment and climate change ministry said.

The newly-announced target is in line with a pledge Canada made at the UN Cop 29 climate summit last month. Countries that are party to the Paris climate accord must submit new national climate plans by 10 February 2025, to cover a timeframe up to 2035. Canada, the EU, Mexico, Norway and Switzerland committed at Cop 29 to set out new plans with "steep emissions cuts" that are consistent with the global 1.5°C temperature increase limit sought by the Paris Agreement.

The plans are known as nationally determined contributions (NDCs). Canada's NDC is being considered by the cabinet, and the country plans to submit it by the deadline, Canadian climate change ambassador Catherine Stewart told Cop 29 delegates on 21 November. Tackling climate change is "both an environmental imperative and an economic opportunity", she added.

The target was informed "by the best available science, Indigenous Knowledge, international climate change commitments, consultations with provinces and territories and expert advice", the ministry said. Canada will also "seek feedback on how to help companies take advantage of the economic opportunities that come with building a clean economy" in the near term, it added.

Although the plan is not yet available, the ministry said that it will examine the role of carbon removal technologies for the energy transition.

"Canadians are increasingly experiencing record-breaking extreme weather," the ministry noted. The country experienced record wildfires in 2023. Carbon emissions from wildfires this year were second only to the "unprecedented" levels in 2023, EU earth-monitoring service Copernicus found this month.

Canada has a legally binding target of net zero emissions by 2050.

By Georgia Gratton

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13/12/24

India's Gujarat Gas raises PNG prices in Morbi cluster

Mumbai, 13 December (Argus) — India's state-run city gas distribution company Gujarat Gas has increased prices of piped natural gas (PNG) in the Morbi industrial cluster in west India's Gujarat state. This came after it kept rates unchanged since July. Prices of PNG used in the industrial ceramic cluster have been hiked to 46.95 rupees/m³ ($0.55/m³) from Rs44.68/m³ in July. This comes to Rs5.60/kcal on an energy equivalent basis, based on a calorific value of 8,400 kcal/kg. This is slightly higher than propane prices, which is a competing fuel in the region's ceramic cluster. Propane prices in Morbi were pegged at Rs61/kg for December , up from Rs60.30/kg in November because of rising import costs. Propane on an energy equivalent basis is Rs5.50/kcal based on the calorific value of 11,100 kcal/kg, traders said. Gujarat Gas has regained some market share in the last few months by keeping its prices unchanged. But it remains to be seen if ceramic units in the region will switch back to propane again. Propane demand in the region fell to 3.2mn m³/d in November from 4.5mn m³/d in October, regional traders said. Overall gas demand in the region was 7mn m³/d in November. Capacity utilisation of ceramic clusters continues to remain weak because of lower export demand for the upcoming Christmas season in the west, according to traders in the region. Gujarat Gas competes with regional propane distributors, including state-controlled IOC, BPCL and HPCL, as well as private-sector firms Reliance Industries, Aegis Logistics and Gogas. It remains to be seen if propane prices will rise further next month, as Saudi Arabia's state-controlled Aramco kept its December propane contract price unchanged at $635/t. Spot LNG prices have also risen this month, which makes a fall in PNG prices unlikely. The Argus -assessed spot price of LNG delivered to India's west coast for first-half January stood at $14.09/mn Btu on 12 December, up from $12.70/mn Btu a month earlier for December-arriving vessels. Tile manufacturers in Morbi have been switching between PNG and propane depending on LNG import prices, since the latter rose in 2022 as a result of the Russia-Ukraine war. By Rituparna Ghosh Propane vs PNG prices (Indian rupees/kcal) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Opec+ decision reduces potential supply surplus: IEA

12/12/24

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12/12/24

Opec+ decision reduces potential supply surplus: IEA

London, 12 December (Argus) — The recent decision by Opec+ members to delay a planned output increase has "materially reduced" a potential supply surplus next year, the IEA said today. Opec+ producers earlier this month pushed back a plan to start unwinding 2.2mn b/d of voluntary crude production cuts by three months to April 2025 and to return the full amount over 18 months rather than a year. Still, the oil market in 2025 is still likely to be significantly oversupplied, the IEA said in its Oil Market Report (OMR), given persistent overproduction by some Opec+ members, strong supply growth from outside the alliance and modest global oil demand growth. The Paris-based agency's base case forecasts show supply exceeding demand by 950,000 b/d next year, even if all Opec+ cuts remain in place. The supply surplus would increase to 1.4mn b/d if alliance members start increasing output from April as planned, the IEA said. This is far from guaranteed. Opec+ has already delayed its plan to increase output three times and continues to say a decision to unwind will depend on market conditions. While the IEA expects oil demand growth to remain subdued next year, its latest forecasts show a slightly higher outlook than in its previous report . The agency revised up its oil demand growth forecast for 2025 by 90,000 b/d to 1.1mn b/d, largely because of China's recently announced economic stimulus measures. This would see global consumption rise to 103.9mn b/d. But the IEA downgraded its oil demand growth forecast for this year by 80,000 b/d, to 840,000 b/d, mostly because of "weaker-than-expected non-OECD deliveries in countries such as China, Saudi Arabia and Indonesia." It said non-OECD oil demand growth in the third quarter, at 320,000 b/d, was the lowest since the height of the Covid-19 pandemic. The IEA said lacklustre demand growth this year and next reflects "a generally sub-par macroeconomic environment and changing patterns of oil use." Increases will be driven by petrochemical feedstocks, and demand for transport fuels "will continue to be constrained by behavioural and technological progress." On supply, the IEA downgraded its growth estimates for 2025 by 110,000 b/d to 1.9mn b/d. Most of this will come from non-Opec+ countries such as the US, Canada, Guyana, Brazil and Argentina. The agency nudged lower its supply forecasts for this year, by 10,000 b/d to 630,000 b/d. The IEA said global observed oil stocks declined by 39.3mn bl in October, led by an "exceptionally sharp" fall in oil product inventories due to low refinery activity coupled with higher demand. It said preliminary data show a rebound in global inventories in November. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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EPA defends 'good neighbor' efficacy

11/12/24

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11/12/24

EPA defends 'good neighbor' efficacy

Houston, 11 December (Argus) — The US Environmental Protection Agency (EPA) responded to concerns raised by the US Supreme Court in June by defending the efficacy of the "good neighbor" plan in reducing NOx emissions regardless of the number of participating states. The high court's concerns were over the issue of severability — that is, how effective the good neighbor plan would be in lowering ozone season NOx emissions if only some of the original 23 states participated. In other words, it is the question of whether the emissions limits placed on states as part of the Cross-State Air Pollution Rule (CSAPR) cap-and-trade program under the plan would have changed based on the number of participating states. In a notice published in the Federal Register on Tuesday, EPA rejected the idea that the effectiveness of the good neighbor plan — and as a result, the NOx emissions limits imposed on each state — would wane if the number of participating states changed. Instead, the agency said that its plan is "by design severable by state" because the NOx emissions limits are imposed on individual sources rather than the states themselves. Each participating state's emissions obligations depend on the number of obligated power plants, their emissions and the types of emissions reduction measures they already have in place. As a result, pausing the imposition of tighter NOx limits under the good neighbor plan in certain states does not affect the NOx limits imposed in other participating states, EPA said. In a similar vein, EPA addressed concerns that the larger version of the CSAPR Group 3 seasonal NOx allowance trading program established under the good neighbor plan would become more illiquid if it covered fewer states than planned, which could lead to a smaller supply of allowances and higher prices. Calling those concerns "unjustified", the agency said that states can withdraw their sources from a trading program by submitting their own ozone reduction plans. EPA also cited previous instances from past cross-state ozone programs where the number of participating states has changed, noting that there has been no evidence of allowance shortages. EPA also responded to concerns that it used an inconsistent methodology to determine emissions obligations for each source — including the emissions reduction strategies that could be used and their associated costs. The agency said it used a methodology that was "nearly identical to prior good neighbor rules" and considered NOx reduction technologies that have been in place "for decades throughout the US." The severability issue was raised by the Supreme Court in June, when it paused implementation of the good neighbor plan nationwide. The court majority said that EPA did not provide a sufficient explanation in response to public comments from states that highlighted those concerns — especially because, until the court issued its stay, only 10 states were participating in the good neighbor plan because of lower court stays. But in September, the US Court of Appeals for the DC Circuit allowed EPA to respond to the issue of severability, while it paused related litigation. EPA finalized the "good neighbor" plan last year to help downwind states meet the 2015 federal ozone standards. It imposed more rigorous CSAPR ozone season NOx emissions limits on more than 20 states and called for new NOx limits for industrial sources. Illiquidity has been persistent in the CSAPR market, depressing activity and keeping prices steady for almost a year because of uncertainty surrounding the numerous legal challenges against the plan. The ozone season runs from May-September each year. With plan halted for the time being, EPA has returned to less-stringent seasonal NOx budgets and reshuffled the remaining participating states into the Group 2 and new "expanded" Group 2 markets, leaving the Group 3 market empty. By Ida Balakrishna Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop 29 grids, storage pledge signatories released

11/12/24

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11/12/24

Cop 29 grids, storage pledge signatories released

London, 11 December (Argus) — The final list of signatories for pledges on expanding energy storage and grid capacity taken at the UN Cop 29 climate summit, was released today, almost four weeks after the commitment was first finalised, with 58 countries out of almost 200 Cop parties taking part. Signatories commit to a collective goal of increasing electricity storage capacity to 1500GW by 2030, a sixfold increase from 2022. Another pledge is to add or refurbish 25mn km of grid infrastructure by 2030, and recognise the need for an additional 65mn km by 2040. Lack of firm, clean power generators to back up intermittent renewables is a major barrier to increasing renewable penetration, while distributed resources require large investments in power grids to transport electricity to consumers. The list of 58 signatory countries includes the so-called troika of Cop host countries the UAE, Azerbaijan and Brazil. The US and all other G7 member states are present, with the exception of France. Also absent among major economies are China and Russia, while Saudi Arabia spoke in support of the pledges during Cop but does not appear on the list of signatories. In comparison, almost 120 countries had signed a pledge to triple global renewable capacity double global energy efficiency by 2030 during the Cop 28 summit in Dubai last year. The grids and storage pledges were one of the centrepiece announcements made by the Azeri host, following on from the calls made in Dubai on renewable capacity and energy efficiency, but also on transitioning away from fossil fuels in energy systems. But divergences on mitigation — actions to cut greenhouse gas emissions — during the summit this year, meant that the completed pledge, as well as any other specific mentions of fuels and energy transition technologies, were not included in final outcome texts. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US inflation rises to 2.7pc in November

11/12/24

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11/12/24

US inflation rises to 2.7pc in November

Houston, 11 December (Argus) — Headline US inflation ticked higher in November, largely on food and shelter costs, suggesting the Federal Reserve still has work to do to reach its inflation target. The consumer price index rose by an annual 2.7pc in November after rising by 2.6pc through October, the Labor Department said. The gain matched expectations in a survey of economists by Trading Economics. So-called core inflation, which strips out more volatile food and energy, rose by 3.3pc, matching the prior month's gains. Services less energy services rose by 4.6pc following a 4.8pc increase the prior period. Today's report is the last consumer price index (CPI) reading before Federal Reserve policymakers meet next week to assess progress in bringing down inflation to their 2pc long term goal and release economic projections. The CME FedWatch tool today gave a 96pc probability the Federal Reserve will cut its target rate by a quarter point at its last meeting of the year, up from nearly 89pc Tuesday. The Fed began cutting its target rate in September after holding it at a 23-year high for more than a year. The energy index contracted by 3.2pc for the 12 months ending in November after falling by 4.9pc through October. Gasoline fell by 8.1pc and the fuel oil index declined by 19.5pc. The food index rose by 2.4pc over the past year, following a 2.1pc gain through the prior month. Transportation services rose by 7.1pc. Shelter slowed to 4.7pc from 4.9pc The CPI rose by 0.3 in November from the prior month, after rising by 0.2pc in each of the prior four months. The shelter index rose by 0.3pc for the month, accounting for nearly 40pc of the total monthly gain in the headline index, Labor said. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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