Australia to involve carbon capture, storage for credit

Market: Crude oil, Natural gas
29/06/21

The Australian government has released plans to issue Australian domestic carbon credits to operators of carbon capture and storage (CCS) projects.

The Australian upstream sector has advocated for such projects in order for the industry to reduce its greenhouse gas (GHG) emissions as well as proponents of producing hydrogen from fossil fuel sources.

Canberra has released a discussion paper where it proposes to include a CCS methodology that would be accepted for the issuance of Australian carbon credit units (ACCUs) under Australia's emissions reduction fund (ERF).

CCS can underpin new low emissions industries such as hydrogen, as well as reducing emissions in hard to abate sectors such as cement production and steel manufacture, the Australian government said in its discussion paper Carbon Capture and Storage Method 2021.

The ruling conservative coalition government outlined its plans to include CCS in the domestic carbon credit scheme last year when Canberra released its technology roadmap to reduce Australia's GHG emissions through technology, which was largely focused on CCS and hydrogen and had little emphasis on renewable energy and battery storage.

ACCUs are only issued through the ERF, which is a federal government-backed fund. The credit units are issued to carbon abatement projects that qualify under the ERF and can be used by the project operator to offset their own GHG profile or sold to other Australian entities that are seeking ways to reduce their GHGs. The ruling Liberal-National party government does not want to create a carbon market and never talks about a carbon price, even as it is increasingly advocated by the upstream industry.

Australian independent Santos has admitted that the economics of its proposed CCS plant at Moomba in the onshore Cooper Basin in South Australia is contingent on the acceptance of CCS projects in the ACCU scheme. Santos plans to build a CCS facility capable of storing 20mn t/yr of CO2e.

Moomba is economic at a carbon price of A$30/t ($23/t) of CO2e, which is above the current ACCU price of around A$19/t, Santos has said.

The ERF is overseen by the Clean Energy Regulator (CER). Canberra provided A$40mn of additional resourcing in to the CER in the 2020-21 fiscal year budget to 30 June to halve the development time of new ERF methods to less than 12 months. In addition to CCS, new methods under development this year include blue carbon, soil carbon, biomethane or green gas, and plantation forestry, the Australian energy minister Angus Taylor said in a statement.

The government is seeking feedback on its CCS methodology proposal before the closing date on 27 July.

By Kevin Morrison

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18/11/24

India cuts allocation to city gas firms again

Delhi, 18 November (Argus) — The Indian government has reduced the domestic gas allocation to the city gas distribution sector by state-run distributor Gail, effective from 17 November. This is the second cut after they first slashed allocation by 20pc, or 4mn-5mn m³/d , last month. The cut for Delhi-based city gas entity Indraprastha Gas is a reduction of 20pc, for Mumbai-based Mahanagar Gas it is 18pc, and for privately owned Adani Total Gas it is 13pc, the firms' stock exchange filings stated over the weekend. The move would reduce the overall share of domestic gas allocation to city gas distributing companies to 30-37pc from 50pc last month and 70pc at the beginning of the year. City gas firms had received priority status for gas allotment over the past two years. "It is uncertain what could have re-instigated this cut, but this may translate into 6.5mn-7mn m³/d based on the different growth rates of city gas firms," Moody's affiliate ICRA senior vice-president Prashant Vashisht told Argus . City gas entities are mulling a hike in CNG rates and are heard to be in talks with the government over the policy changes. The government is yet to formally announce a statement over the cuts and is heard to be asking retailers to give a cost break-up to justify the hike, sources say. These cuts are mainly aimed at compressed natural gas (CNG) supply that has been receiving domestic gas allocation at a fixed price by the government of $6.5/mn btu under New Delhi's pricing mechanism — almost half the price that firms would pay for spot LNG. City gas firms are discussing the possibility of increasing CNG prices by Rs5-5.5/kg by the end of the year to preserve their margins. This would represent a 7pc increase compared with the average CNG price of Rs75.1/kg ($0.88/kg) against Rs94.77/litre of petrol in New Delhi. But the price hike may reduce CNG's competitiveness, hampering further development of the sector and limiting LNG demand growth. CNG vehicles have rapidly expanded their share of the Indian fleet, accounting for 14pc of all four-wheelers at present, up from 8pc three years earlier, data from the government's Vahan website show. The reduction in allocation is linked to reduced supply from conventional gas fields run by state-controlled upstream companies such as ONGC and Oil India. The sector received 27.8mn m³/d of domestic gas over April-September, including about 5mn m³/d of higher-priced supply from high-pressure, high-temperature fields, oil ministry data show. Allocation to the sector was largely unchanged during the same time last year. To bridge this shortfall, city gas firms are exploring options of sourcing gas through LNG , domestically produced high-pressure and high-temperature gas, production from ONGC's new wells, and long-term gas contracts. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Trump taps oil services head as US energy secretary

17/11/24

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17/11/24

Trump taps oil services head as US energy secretary

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Cop: Parties continue slow work on finance goal: Update

16/11/24

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16/11/24

Cop: Parties continue slow work on finance goal: Update

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Cop: Colombia’s climate plan to address fossil fuels

16/11/24

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16/11/24

Cop: Colombia’s climate plan to address fossil fuels

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Cop: Parties continue work on new finance goal

16/11/24

News

16/11/24

Cop: Parties continue work on new finance goal

Baku, 16 November (Argus) — Parties at the UN Cop 29 climate talks in Baku have asked for more time to work on "specific proposals" for a new finance goal, working from a draft text released yesterday , before convening for a plenary session later today, according to the summit's presidency. Country representatives are seeking to agree on a new climate finance goal for developing nations, following on from the current — broadly recognised as inadequate — $100bn/yr target. The draft text still fails to bridge the huge divide between developed and developing countries on key issues such as an amount for the goal, the contributor base and what the funds should be used for. A plenary is due to take place later today in Baku. "Over the last few days some people have doubted whether collectively we can deliver. It is time for the negotiators to start proving them wrong," Cop 29 deputy lead negotiator Samir Bejanov said. Parties continue to stick to their positions. Developed countries have still not come forward with a number for the goal, and want the contributor base broadened. Developing countries remain broadly united in calling for climate public finance of over $1 trillion/yr. Options show that developing country parties seek a new finance goal that serves mitigation — actions to reduce emissions — adaptation and loss and damage. Adaptation refers to adjustments to avoid global warming effects where possible, while loss and damage describes the unavoidable and irreversible effects of such change. Developed nations are also pushing for sub-targets of $220bn/yr for least developed countries (LDCs) and $39bn/yr for small island developing states (Sids), in which money for adaptation should come in the form of grants and highly concessional finance and funding for loss and damage "primarily in grants". The multi-layered approach in the draft, mostly supported by developed countries, does not mention loss and damage. On broadening the contributor base, it has options calling on "parties in a position to contribute" or "all capable parties" to "mobilise jointly $100bn/yr for mitigation and adaptation in developing countries by 2035. The UN climate body the UNFCCC works from a list of developed and developing countries from 1992 — delineating 24 countries plus the EU as developed — and many of these note that economic circumstances have changed in some countries, including China, over the past 32 years. China between 2013 and 2022 provided $45bn in climate finance to developing countries, equivalent to 6.1pc of climate finance provided by all developed countries in the period, according to think-tank WRI. A few options in the multi-layered approach in the draft talk about "investments", which developing countries do not support, and "investing trillions "from all sources, public, private, domestic and international". Some parties on both sides are calling for the reforms of multilateral development banks, key to leverage billions in private sector finance, to accelerate. But these issues are largely outside of the remit of the Cop, even though they may get a boost from the upcoming G20 leaders summit on 18-19 November. UN climate body chief Simon Stiell [today urged G20 leaders to make the climate crisis](https://direct.argusmedia.com/newsandanalysis/article/262963 "order of business number one". He called on G20 to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multi-lateral development bank reforms. Brazil is looking to use its G20 presidency to advance agreement on energy transition finance, having set fighting climate change as one of its G20 priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. By Victoria Hatherick and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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