Banks' fossil fuel financing hit $673bn in 2022: Study
Fossil fuel financing from the world's 60 largest banks decreased to $673bn in 2022, from $742bn in 2021, as higher profits for oil and gas companies led to reduced borrowing, according to non-governmental organisations. But financing for the largest LNG firms increased to $22.7bn from $15.2bn in response to energy security concerns.
The 14th annual Banking on Climate Chaos report released today by non-governmental and civil society organisations Rainforest Action Network and Oil Change International, endorsed by 625 organisations, looked at world's 60 largest commercial and investment bank by assets according to rating agency Standard & Poor's (S&P). It found that, for the first time, banks' fossil fuel funding in 2022 was lower than it was in 2016, but it warned this was not the result of more ambitious policies.
"There is little to instill confidence that this shift will become a positive, long-term trend, because fossil fuel profits, not bank policies, were the most notable headline for 2022," the report said. It said "several big players" in the oil and gas sector did not borrow in 2022.
"Since most bank policies do not exclude financing for fossil fuel companies, there is no reason to think that 2022 is anything but a temporary outlier in the trajectory of fossil fuel finance," the report said.
It found that banks' financing of LNG projects in 2022 increased by almost 50pc on the year, on the back of energy security concerns sparked by Russia's war on Ukraine. Japan's Misuho was the top financier of LNG projects in 2022, with LNG US project developer Venture Global and Japanese power utility Jera as its main clients.
"Developers dusted off dozens of proposals for export terminals in North America, Qatar, Africa and Australia," the report said, adding that they also "pushed forward import terminals in Europe and Asia, even as current events laid bare the risks of depending on a volatile global market for fossil gas imports".
The report found that fossil fuel financing remains dominated by a "handful of banks" based in the US, Canada and Japan. Canadian bank Royal Bank of Canada has become the world's largest fossil fuel industry funder in 2022 with $42.1bn, although JP Morgan Chase remains at the top of the list for the 2016-22 period with $434.1bn.
French bank BNP topped its European peers for fossil fuels financing in 2022 with $20.8bn. In Asia-Pacific, Mitsubishi UFJ Financial Group (MUFG) is the largest funder of the industry with $29.5bn.
"Canadian, Japanese and French banks all increased their share of total financing from 2021 to 2022," the report said. US banks provided 28pc of the total financing in 2022, slightly less than the 33pc they provided in 2021, according to the NGOs.
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Yemen’s Houthis attack ships in Red Sea, Mediterranean
Yemen’s Houthis attack ships in Red Sea, Mediterranean
Singapore, 16 July (Argus) — Yemen-based Houthi militants have launched three military operations in the Red Sea and the Mediterranean, Yemen's state-owned news agency Saba said on 15 July. The Houthis carried out multiple attacks against an Israel-owned oil product tanker in the Red Sea, according to US Central Command (Centcom) on 16 July. The Houthis used three surface vessels to attack the Panama-flagged and Monaco-operated Bentley I , which was carrying vegetable oil from Russia to China, Centcom said. There was no reported damage or injuries, Centcom said. Bentley I loaded 39,480t of sunflower oil at Russia's Taman port on 3 July, according to global trade analytics platform Kpler. The Houthis also separately attacked a Marshall Islands-owned, Greek-operated crude oil tanker Chios Lion with an uncrewed surface vessel (USV) in the Red Sea. The USV caused damage but the Chios Lion has not requested assistance and there have not been any reported injuries, Centcom said. The Houthis described its hit as "accurate and direct", according to Saba. The Chios Lion loaded 60,000t (387,000 bl) of high-sulphur straight-run fuel oil on 30 June and 30,000t of fuel oil on 18 June, both at Russia's Tuapse port, according to Kpler. It planned to unload these in China on 22 July. The Houthis have claimed responsibility for these two ship attacks, which were targeted "owing to violation ban decision of access to the ports of occupied Palestine by the company that owns the ship". The Houthis also claimed a third attack on the Olvia with the Iraqi Islamic Resistance in the Mediterranean, with this having "successfully achieved its objective". The Olvia loaded about 6,300t of very-low sulphur fuel oil at Israel's Haifa port on 12 July and was scheduled to unload this at Israel's Ashdod refinery on 13 July. Crude prices were largely lower at 04:00 GMT. The Ice front-month September Brent contract was at $84.63/bl, lower by 22¢/bl from its settlement on 15 July when the contract ended 18¢/bl lower. The Nymex front-month August crude contract was at $81.65/bl, down by 26¢/bl from its settlement on 15 July when the contract ended 30¢/bl lower. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Trump taps Vance as running mate for 2024
Trump taps Vance as running mate for 2024
Washington, 15 July (Argus) — Former president Donald Trump has selected US senator JD Vance (R-Ohio) as his vice presidential pick for his 2024 campaign, elevating a former venture capitalist and close ally to become his running mate in the election. Vance, 39, is best known for his bestselling memoir Hillbilly Elegy that documented his upbringing in Middletown, Ohio, and his Appalachian roots. In the run-up to the presidential elections in 2016, Vance said he was "a never Trump guy" and called Trump "reprehensible." But he has since become one of Trump's top supporters and adopted many of his policies on the economy and immigration. Vance voted against providing more military aid to Ukraine and pushed Europe to spend more on defense. Trump said he chose his running mate after "lengthy deliberation and thought," citing Vance's service in the military, his law degree and his business career, which included launching venture capital firm Narya in 2020. Vance will do "everything he can to help me MAKE AMERICA GREAT AGAIN," Trump said today in a social media post. Like Trump, Vance has pushed to increase domestic oil and gas production and criticized government support for electric vehicles. President Joe Biden's energy policies have been "at war" with workers in states that are struggling because of the importance of low-cost energy to manufacturing, Vance said last month in an interview with Fox News. Trump made the announcement about Vance on the first day of the Republican National Convention in Milwaukee, Wisconsin, and just two days after surviving an assassination attempt during a campaign event in Pennsylvania. Earlier today, federal district court judge Aileen Cannon threw out a felony indictment that alleged Trump had mishandled classified government documents after leaving office. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Polish gas reforms still needed: Energy Traders Europe
Polish gas reforms still needed: Energy Traders Europe
London, 15 July (Argus) — Recent government plans to amend Poland's onerous gas storage legislation are positive, but more serious reforms are necessary to foster increased competition, industry association Energy Traders Europe told Argus . The Polish government last month said it plans to amend the Act on Stocks in November , removing importers' obligation to maintain mandatory gas storage reserves and placing it on state-owned strategic reserves agency Rars instead. Energy Traders Europe welcomed the move but recommended several further steps to bolster competition and liquidity. The Act on Stocks "needs to be revised first and fast" before addressing other issues in the market, the association's gas market manager, Pawel Lont, told Argus . While shifting the obligation to Rars is a positive first step, Poland would still have "state-enforced storage filling with hardly any capacity left for commercial use", which removes an important flexibility source for the market, he said. Ultimately, storage needs to be reformed to a point at which commercial filling becomes not only possible but desired, Lont said. The government needs to ensure that the system provides an incentive for the storage operator to offer products that are attractive to users, Lont said, noting that currently "this incentive simply does not exist, and this set-up can only inflate the costs of gas consumption in Poland". Energy Traders Europe previously suggested that the strategic reserve should be calculated against the demand of vulnerable customers only, as opposed to all consumers, which would significantly reduce the overall burden and free up space for commercial use. It would also be desirable to move the start date of the draft storage legislation to 1 April 2025 and ensure that licence applications declaring the intention to start commercial activity after this date are tested for compliance with these new rules. It can take a year or more for licence applications to be approved, so "the sooner we start, the better", Lont said, adding that the licensing procedure in Poland is "undoubtedly the most problematic in all of Europe". Applications involve a long list of documents that are difficult to complete in a timely manner. There are also issues on the reporting side, with "an impressive list of 20+ positions reported to different bodies at different points in time" on top of standard EU reporting, Lont said. These obligations create exposure and considerable costs for companies, so it would be beneficial to run a critical review on their necessity, he said. And Polish transmission tariffs are high, although this is understandable given Gaz-System's construction of interconnectors with several neighbouring countries over the past few years. Polish tariffs are decided yearly, while entry/exit splits can also be adjusted, which is problematic for trading companies that would like to book longer-term products. The multipliers and seasonal factors "definitely deserve some rethinking as they severely inflate the costs of short-term capacity products, while booking yearly products in Poland can be quite a bet", he said. But even if these other issues are addressed, "We will [still] be looking at a largely monopolised country, with the dominant player having exclusive access to LNG terminals", Lont said. While the gas release programme is positive for the market, it would be beneficial to see whether Orlen's dominance could be challenged at import terminals. Orlen has booked all capacity at the Swinoujscie terminal, as well as at the planned Gdansk terminal, meaning it continues to be the sole beneficiary of the 100pc discount on entry to the grid from LNG terminals. Several measures could be taken to open other companies' access to the terminals, such as secondary capacity trading, use-it-or-lose-it rules or set-aside rules and limits when allocating capacity to a single entity, Lont said. But these measures would be ineffectual without a guarantee that other firms are ready and willing to book this capacity, so the reforms discussed above need to come first so as to ensure that these participants can actively trade in Poland beforehand, Lont said. In general, it is not unusual to have a dominant company in a given country, but "one just needs an environment in which the group cannot abuse its position and its offer can be challenged", he said. Orlen had a 91pc share of the Polish retail market last year, according to regulator URE. Poland has "all the cards" to develop a liquid gas market, but this takes time, so reforms must get going as soon as possible. Since the change of government, it has at least become "much easier to approach the ministries in Poland", which "helps a great deal on the transparency side", Lont said. By Brendan A'Hearn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India, SE Asia demand lift Indonesian May coal exports
India, SE Asia demand lift Indonesian May coal exports
Singapore, 15 July (Argus) — Indonesian coal exports rose in May from a year earlier, led by higher demand from India and southeast Asia. The country exported 46.27mn t of coal in May, up by 6.6pc from a year earlier and by 3.9pc from April , customs data show. The data include all types of coal, such as thermal and coking coal. Indonesia exported about 222mn t of coal in January-May, up from 212mn t a year earlier. The country could export 532.59mn t this year if the current production run rate of 44.37mn t/month is maintained over the next seven months, according to Argus calculations based on customs data. Indonesia exported 521.10mn t last year. The year-on-year increase in May exports was supported mainly by higher demand from India, the world's second-largest coal importer, as utilities lifted their import purchases to replenish stocks for the summer season. Shipments to India in May rose by about 19pc on the year to 10.1mn t, according to the data, although exports slipped from 11.34mn t in April. The steady growth in Indian coal-fired generation, which hit an all-time high in May, continued to support demand for imported coal. The country's overall coal-fired generation, which meets most of the country's power requirements, rose to 119.53TWh, from 106.03TWh a year earlier, according to data from the Central Electricity Authority. Coal-fired generation in May was also higher than 116.5TWh in April, supported by increased power consumption caused by higher air-conditioning usage during the summer heatwaves. Indonesian exports also rose to cater for greater demand from southeast Asia. Exports to the region in May rose by 15.5pc on the year and by 1.5pc from April to 11.19mn t. This was led by a steady rise in exports to Vietnam, where shipments grew by 47pc on the year and by about 17pc on the month to 3.34mn t in May. Demand was led by utilities as coal-fired generation reached a probable record high of 17.08TWh in May, as per Argus calculations based on data from state-owned utility EVN. Vietnamese coal imports reached 6.50mn t in May , up from 4.97mn t a year earlier and from 5.90mn t in April, provisional customs data show. Shipments to China, the world's largest coal importer, accounted for nearly 40pc of Indonesian exports at 18.44mn t, down from 18.82mn t a year earlier but up from 15.57mn t in April. The year-on-year decline was caused by Chinese utilities being less aggressive this year in purchasing seaborne cargoes because of subdued thermal power generation. China's thermal power generation, which mainly uses coal, fell to 454TWh in May from 471TWh a year earlier and 459TWh in April, according to the latest data from the National Bureau of Statistics. China's imports of thermal coal — including non-coking bituminous coal, sub-bituminous coal and lignite — totalled 32.7mn t, down from 31.4mn t a year earlier and from 32.9mn t in April, Chinese customs data show. Output rises A rise in Indonesian coal production supported higher exports in January-May. Output during the period rose to 334mn t, from 314mn t a year earlier, according to data from the country's energy ministry, ESDM. But output in June may have eased on the year to 54mn t, taking the year-to-date tally to about 388mn t, up by 2.1pc from a year earlier. The data will probably be revised, as output is frequently reviewed in Indonesia because of a lag in some producers' reporting. Indonesian output could face pressure from heavy rains in parts of the key coal-producing Kalimantan region, while production cutbacks could also affect overall production. Some coal producers could trim output in response to ongoing low prices in the international market. Argus on 12 July assessed Indonesian GAR 4,200 kcal/kg coal at $52.07/t fob Kalimantan, the lowest level since mid-September 2023. The price is down sharply from the 2023 peak of $90.41/t in January last year. Lower output could dent the export trajectory. Coal exports in June were estimated at 39.82mn t, according to data from trade analytics firm Kpler. Exports in June last year stood at 39.02mn t, according to customs data, and at 38.72mn t, per Kpler's estimates. By Saurabh Chaturvedi Indonesian coal exports mn t Indonesia coal exports by destination, Jan-May mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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