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Cop 27 unlikely to speed up maritime emissions cuts

  • Market: Emissions, Oil products
  • 14/09/22

The next UN Cop 27 climate conference in Sharm el-Sheikh, Egypt, is unlikely to speed up the International Maritime Organisation's (IMO) decisions on reducing greenhouse gas (GHG) emissions in the shipping industry, just as Cop 26 pressure failed to do so last year.

The IMO's present strategy targets a 50pc reduction in overall GHG emissions by 2050 compared with 2008 levels, and a 70pc reduction in CO2 emissions over the same timeframe. Member countries are currently working towards revising the strategy by the middle of 2023. The Marshall Islands, which with Liberia and Panama have the three largest ship registries globally, does not expect Cop 27 discussions to directly affect the work of the 79th Marine Environment Protection Committee meeting in December. Liberia's Maritime Authority marine environmental protection director Daniel Tarr says he hopes that the discussions at Cop 27 will push the IMO to act, although he also cautions that the most progress he sees happening at December's IMO meeting is a non-binding agreement on a set of more ambitious targets.

Around 10,000 vessels are registered in Liberia and the Marshall Islands, with the latter a major tanker fleet registry. Flag states have responsibility for implementation and enforcement of maritime laws, which means they have to ensure ships under their registries are compliant with the IMO strategy. In the first days of Cop 26 last year, the Marshall Islands led the declaration on zero emission shipping by 2050, with the US and Denmark, and the support of Danish container ship firm Maersk. Other initiatives born during Cop 26 added to pressure on the IMO to revise its emission strategy before 2023. These include the Clydebank declaration for green shipping corridors, which sought to establish at least six zero-emission maritime routes between two or more ports by 2025, and the First Movers Coalition.

If at first you don't succeed

Although Cop 26 brought about ambitious goals for the shipping sector and despite the pressure to do more, IMO member countries have so far failed to agree to speed up the revision process, let alone the setting of new emissions targets. The Marshall Islands, with Kiribati and Solomon Islands submitted a resolution for the 77th IMO environmental committee meeting, which followed Cop 26, to commit to zero GHG emissions in shipping by 2050, but it failed to gain support. And in June, IMO's 78th committee meeting faltered in its attempts to update its emission targets and decide on mid to long-term measures to reduce emissions. Divisions emerged between states over the impact of more ambitious targets, with some states refusing outright to countenance a total phase-out of emissions by 2050. Decisions at the IMO need to be taken unanimously.

But the UN climate conference and some of its initiatives are continuing to influence the IMO debate. A World Shipping Council paper presents three suggestions to IMO members ahead of the December meeting. One of these suggestions is to build on existing initiatives and develop an IMO "green corridors programme", which would draw on Cop 26's Clydebank declaration. Partnerships between Rotterdam and Singapore, as well as Los Angeles and Shanghai, Canadian Great Lake ports, and European Baltic ports have been announced following the 2021 declaration, although none of these has committed to the 2025 target. The World Shipping Council also proposed reducing the number of steps in the GHG fuel standard goals — a mid-term measure proposed by a group of European countries in March that seeks to establish a measure of GHG intensity in marine fuels — and using a well-to-wake lifecycle assessment for benchmarking emissions.

By James Marriott


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02/05/25

Chevron 'not surprised' Calif refineries shutting

Chevron 'not surprised' Calif refineries shutting

Houston, 2 May (Argus) — Chevron's chief executive said today he is not surprised that refineries in California are shutting down, because the state has made it "nearly impossible" to invest going forward. Independent refiner Valero on 16 April said it is planning to shut or re-purpose its 145,000 b/d refinery in Benicia, California, by April 2026. This comes as Phillips 66 is planning to shut its 139,000 b/d Los Angeles refinery later this year. "I'm not surprised to see the announcements that have come out," chief executive Mike Wirth said Friday on Chevron's first-quarter earnings call. Policies coming out of the state "make it nearly impossible to invest in California going forward", he said. The state inserting itself into operational matters like planning turnarounds is "an unwise move", Wirth said. Chevron operates two large refineries in the state — the 269,000 b/d El Segundo, refinery and the 245,000 b/d Richmond refinery. "We do not have any announcements on our refineries at this time," Wirth said. California governor Gavin Newsom last year signed into law AB X2-1, legislation authorizing the state's energy regulator to require refiners to maintain minimum gasoline inventories. The bill is part of a multi-year effort by Newsom to mitigate price spikes at the pump, authorizing the California Energy Commission (CEC) to regulate, develop and impose requirements for in-state refiners to maintain minimum stocks of gasoline and gasoline blending components. The agency is in the rule-making process for some of the regulations, but a vote on a refinery resupply rule was postponed last month to allow for more engagement with stakeholders. The closures of Valero's Benicia refinery and Phillips 66's Los Angeles refinery will eliminate 17pc of the state's crude refining capacity. PBF Energy, which also operates refineries in California, said Thursday that the shutdowns will cause a 250,000 b/d shortfall in gasoline in the state and lead to growing reliance on more expensive imports. Valero chief executive Lane Riggs said last week that California's regulatory and enforcement environment is "the most stringent and difficult" in North America due to 20 years of policies pursuing a move away from fossil fuels. California will require 100pc of in-state sales of new cars and trucks to be electric, plug-in hybrid or hydrogen models by 2035. Five days after Valero's announcement to shut Benicia, Newsom urged state regulators to work closely with refiners on short-term and long-term planning, including through "high-level, immediate engagement" to make sure Californians have access to transportation fuels, according to a letter sent to CEC vice chair Siva Gunda. Newsom ordered the CEC to work with a cross-agency task force to recommend by 1 July any changes in the state's approach that are needed to ensure adequate fuel supply during the state's energy transition. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Shell’s 1Q European gas production up


02/05/25
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02/05/25

Shell’s 1Q European gas production up

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Shell’s 1Q profit falls but beats expectations


02/05/25
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02/05/25

Shell’s 1Q profit falls but beats expectations

London, 2 May (Argus) — Shell's Integrated Gas business segment delivered a solid performance in the first quarter, helping the UK major exceed analysts' earnings estimates despite ongoing struggles in its downstream Chemicals and Products business. Shell reported a first-quarter profit of $4.8bn, down from $7.4bn a year earlier. Adjusted for inventory valuation effects and one-off items, profit was $5.6bn, surpassing analysts' expectations of $5.3bn. Integrated Gas was Shell's top-performing segment, with a profit of $2.8bn, slightly higher than the first quarter of 2024. Production was down by 6.6pc year-on-year at 927,000 b/d oil equivalent (boe/d), but up 2pc from the previous quarter. Less maintenance at the Pearl gas-to-liquids plant in Qatar had a positive impact on production, Shell said. But the company's LNG volumes were affected by unplanned maintenance and weather constraints in Australia, falling to 6.6mn t from 7.6mn t a year earlier. The Upstream segment posted a profit of $2.1bn, down by 8.5pc on a year earlier but double what it made in the fourth quarter of 2024. The segment was hit with a $509mn tax charge related to the UK's Energy Profits Levy in the first quarter, partially offset by gains from asset sales. Production for the segment was slightly down compared to a year earlier at 1.86mn boe/d, partly due to the divestment of Shell's SPDC business in Nigeria. Overall, Shell's first-quarter production was 2.84mn boe/d, down from 2.91mn boe/d a year earlier but up from 2.82mn boe/d in the previous quarter. Shell expects lower production in the current quarter, ranging from 2.45mn boe/d to 2.71mn boe/d due to maintenance across its Integrated Gas portfolio and the absence of volumes from the SPDC business. The Chemicals and Products segment reported a $77mn loss for the first quarter, compared to a $1.3bn profit a year earlier. Refinery runs were down by 4.8pc year-on-year, and chemicals sales volumes were marginally lower. Despite persistent low margins in the downstream, Shell noted that refining and chemicals margins improved compared to the fourth quarter. Shell expects capital spending for 2025 to be within a $20bn-$22bn range, in line with last year's spending. The company is maintaining its dividend at 35.8¢/share and its share buyback programme at $3.5bn a quarter. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US bill would extend expired biofuel credits


01/05/25
News
01/05/25

US bill would extend expired biofuel credits

New York, 1 May (Argus) — Legislation soon to be introduced in the US House would extend expired biofuel incentives through 2026, potentially providing a reprieve to refiners that have curbed production this year because of policy uncertainty. The bill, which will be sponsored by US representative Mike Carey (R-Ohio) and some other Republicans on the powerful House Ways and Means Committee, according to a person familiar, could be introduced as soon as today. It would prolong both the long-running $1/USG for blenders of biomass-based diesel and a separate incentive that offers up to $1.01/USG for producers of cellulosic ethanol. The credits expired at the end of last year but under the proposal would be extended through both 2025 and 2026. The incentives would run alongside the Inflation Reduction Act's new "45Z" credit for clean fuel producers, which offers a sliding scale of benefits based on carbon intensity, though the bill would prevent double claiming of credits, according to bill text shared with Argus . The 45Z credit is less generous across the board to road fuels — offering $1/USG only for carbon-neutral fuels and much less for crop-based diesels — and is still in need of final rules after President Joe Biden's administration issued only preliminary guidance around qualifying. The proposal then would effectively offer a more generous alternative through 2026 for biodiesel, renewable diesel, and cellulosic ethanol but not for other fuels that can claim the technology-neutral 45Z incentive. That could upend the economics of renewable fuel production. Vegetable oil-based diesels for instance could claim the blenders credit and earn more than aviation fuels that draw from the same feedstocks. According to Argus Consulting estimates, aviation fuels derived from wastes like distillers corn oil and domestic used cooking should still earn more than $1/USG this year, conversely, since 45Z is more generous to aviation fuels. Extending the biodiesel blenders credit would also allow foreign fuel imports to again claim federal subsidies, a boost for Finnish refiner Neste and the ailing Canadian biofuel startup Braya Renewable Fuels but a controversial provision for US refiners and feedstock suppliers. The 45Z incentive can only be claimed by US producers. The blenders incentive is also popular among fuel marketer groups, which have warned that shifting subsidies to producers could up fuel costs. The proposal adds to a contentious debate taking place across the biofuel value chain about what the future of clean fuel incentives should look like. Some industry groups see a wholesale reversion to preexisting biofuel credits — or even a temporary period where various partly overlapping incentives coexist — as a tough sell to cost-concerned lawmakers and have instead pushed for revamping 45Z. A proposal last month backed by some farm groups would keep the 45Z incentive but ban foreign feedstocks and adjust carbon intensity modeling to benefit crops. Republicans could keep, modify, extend, or repeal the 45Z incentive as part of negotiations around a larger tax bill this year. But the caucus is still negotiating how much to reduce the federal budget deficit and what to do with Inflation Reduction Act incentives that have spurred clean energy projects in conservative districts. Uncertainty about the future of biofuel policy and sharply lower margins to start 2025 have led to a recently pronounced drop in biodiesel and renewable diesel production . President Donald Trump's administration is working on new biofuel blend mandates, which could be proposed in the coming weeks, but has said little about its plans for biofuel tax policy. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Nigeria’s Warri refinery restart threatened by strike


01/05/25
News
01/05/25

Nigeria’s Warri refinery restart threatened by strike

Lagos, 1 May (Argus) — Plans to restart a section of Nigeria's 125,000 b/d Warri refinery are at risk due to an indefinite strike planned by plant support staff starting on 5 May. The strike is in protest against casualisation, low pay and lack of benefits. A source at the refinery told Argus last week that state-owned NNPC intends to restart the crude and vacuum distillation units (CDU and VDU) and a gas plant in the first week of May. But the support staff have timed their strike to disrupt these plans. Support staff representative Dafe Ighomitedo said the striking workers make up two-thirds of Warri's staff and have been protesting their employment terms since 2015. The refinery has been undergoing a $492mn quick-fix repair contract with South Korean engineering firm Daewoo since June 2022 to restore 60pc of its nameplate capacity. A previous strike called in April 2022 would have delayed the start of the quick-fix programme, but it was called off following appeals from community leaders and a promise from refinery management to address the workers' demands if they supported the programme, Ighomitedo said. Workers were promised an improved salary structure upon the refinery's restart but that promise has not been fulfilled, he added. NNPC did not respond to Argus' requests for comment. NNPC restarted Warri in December last year and crude runs had ramped up to about 78,000 b/d before the refinery was shut again in January "to carry out necessary intervention works on select equipment, including field instruments that were impacting sustainable and steady operations", the company said. NNPC cancelled crude oil allocations to Warri in February and March, reoffering the volumes for export, but said last month that all units at the refinery would be online within a year. By Adebiyi Olusolape Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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