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EU green fuels talks slowed by detail

  • Spanish Market: Biofuels, Natural gas, Oil products
  • 29/11/21

EU energy ministers will meet this week to try and clear stumbling blocks — notably over targeted levels — in legislation aimed at boosting uptake of renewable fuels, including sustainable aviation fuels (SAFs) and maritime fuels with a lower greenhouse gas (GHG) intensity.

Member states had aimed for a common position on the proposals before the end of this year, which would have allowed ministers to press the European Parliament to open talks for a final legal text. But energy ministers are now only expected, on 2 December, to take note of their differences.

Chairing discussions, Slovenia would like ministers to give political "guidance" to member state experts on the "ambition" for SAFs, maritime fuel GHG reductions and, more generally, targets for renewable fuels.

For maritime fuels, member states "largely agree" with the objectives but call for "more time" to examine it properly. And countries are divided on the level and timing of the SAF blending mandates as well as SAF feedstocks. For maritime fuels, the GHG reduction targets are a stumbling block, accompanied by discussions about on-shore power supply requirements, penalties and the geographical scope. Further questions are whether to mandate GHG emission cuts for all ships above a gross tonnage of 5,000t, as well as which fuels to include and how to count these towards GHG intensity reduction targets.

Some agreement has been achieved on less contentious issues, for instance allowing member states to oblige operators to uptake SAF blends at smaller airports, catching more aircraft operators under the blending obligation and defining "yearly" aviation fuel and compliance demonstration by fuel suppliers.

Legal proposals were made by the European Commission, in July, to phase maritime transport emissions into the EU ETS from 2023 to 1 January 2026 and mandate a reduction in the GHG intensity of marine fuels. Ships should reduce their average GHG intensity of the energy used on board by 6pc by 2030, by 49pc by 2050 and by 75pc by 2050, all from 2020 levels.

For SAFs, the commission wants aircraft landing at EU airports to uptake fuel with a 2pc SAF blend by 2025, 5pc by 2030, 20pc by 2035, 32pc by 2040 and 63pc by 2050. From 2030, the 5pc SAF target to be composed of a minimum share of 0.7pc of synthetic aviation fuels or aviation-certified renewable fuels of non-biological origin (RFNBOs), rising to 5pc synthetic aviation fuels from 2035, 8pc from 2040 and 11pc in 2045.

Discussions on SAFs and maritime fuels have hosted similar reservations to those on an overarching revision of the EU's 2018 renewables directive (RED II), which proposes an EU target share of least 40pc renewable in EU gross final consumption of energy by 2030, aligning climate and energy legislation with the bloc's 55pc emissions-reduction target.

Beyond the level of ambition, Slovenia, while chairing discussions, has noted "several" states are against sub-targets for industry, notably the indicative 1.1 percentage point annual increase and a sub-target for RFNBOs. Similarly, energy ministers are divided over the indicative 1.1 percentage point increase in heating and cooling.

Renewables in transport is also contentious, with the 13pc GHG intensity reduction target for transport fuels seen as "too ambitious" for some states. And countries are divided over whether to shift the renewable transport target, currently a 14pc share of energy used in transport by 2030, to a GHG reduction target. Slovenia notes a "majority" of countries have reservations on increasing the sub-targets for advanced biofuels to at least 0.2pc in 2022, 0.5pc in 2025 and 2.2pc by 2030. Similarly, there is no enthusiasm for the proposed new 2.6pc sub-target for transport RFNBOs.


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28/02/25

Trader curbs US-Canada gas trade on tariff risk

Trader curbs US-Canada gas trade on tariff risk

New York, 28 February (Argus) — A major European energy trading company has redirected about 1 Bcf (28mn m³) of natural gas that was scheduled to flow across the US border into Canada to reduce the company's exposure to the threat of impending tariffs, a person with knowledge of the matter told Argus . The trading company originally planned to flow about 30mn cf/d of gas from the US Midwest into Enbridge's Dawn storage hub in Ontario, Canada, every day in March. But the company has decided to cancel that contract and drop the gas off at another location in Chicago, Illinois, instead, because it did not think the slim profit margin of that trade was worth the risk of having to incur potential tariffs imposed by Canada in retaliation to President Donald Trump's threatened 10pc tariffs on energy products flowing across the border. Trump's tariffs are set to take effect on 4 March. The canceled gas flows across the US-Canadian border illustrate the precautions some industry participants are taking to reduce their exposure to price uncertainty resulting from what appears to be a looming trade war between the close energy trading partners. Such precautions are being taken despite the fact that most analysts think the impact on gas prices and cross-border volumes from Trump's tariffs would be modest. If the tariffs are not imposed and the cross-border trades in March are profitable, the European trading company may choose to resume the trade and send gas from the US into Canada on a daily basis, the person said. Opting out of trades that risk tariff exposure is sometimes the most prudent decision, although it slows dealmaking, the person said. The company is still doing deals that move gas from Canada south into the US Pacific Northwest, because those trades are profitable enough to offset the risk of potential tariffs. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Energy a priority for Uruguay’s new government


28/02/25
28/02/25

Energy a priority for Uruguay’s new government

Montevideo, 28 February (Argus) — Energy will play a central role as Uruguay's new president Yamandu Orsi begins his five-year term on 1 March. Orsi, of the left-wing Broad Front coalition, takes over one of South America's most economically and politically stable countries. The economy is forecast to expand by 3pc this year, above the regional average, and the government wants to attract investment to maintain growth. The energy sector is a priority. Uruguay already has one of the region's cleanest grids, with 99pc of power coming from renewable sources, and in February reached the goal of 100pc electrification nationwide, according to the state-run electric company, UTE. The Orsi administration is studying options for the second phase of the energy transition, which includes adding capacity to meet increasing demand from electrification of transportation and clean fuel production. New finance minister Gabriel Oddone said the administration would focus on reducing red tape and potentially provide incentives for investment in the energy sector. Uruguay currently has close to 5.3GW of installed capacity, with 78pc in renewable sources, for its population of 3.5mn. The UTE, which had a profit of $315mn in 2024, is adding 100MW in wind power in the next two years. The Orsi administration plans to prioritize solar capacity. The new government is keenly following the development of low-carbon hydrogen and e-fuel projects. The most advanced project is for production of 700,000 tonnes (t) of synthetic fuel by Chile's HIF Global and ALUR, the biofuel arm of the state-owned Ancap. Investment is estimated at $6bn, making it the largest planned single investment in the country's history. The company requested approval in January of environmental permits for the project's solar park that would include 1.84mn bifacial solar panels. It would produce a peak of 1,162MW. Construction would take 18 months from approval. The municipal council in Paysandu, in northwestern Uruguay where the project is planned, on 27 February approved a change in land use to facilitate plant construction. Ancap, which lost an estimated $130mn last year because its only refinery was closed for six months, has proposed offshore production of low-carbon hydrogen. The Orsi administration has not yet committed to the project. Reverse transition? The new government will also have to also have to decide on the future of seven offshore exploration blocks, with seismic testing planned for late this year, and the possible construction of a gas pipeline that would link Argentina and Brazil. A pipeline exists from Argentina to Uruguay, but it could be expanded and extended to supply southern Brazil. It would require an additional 415km (258mi) in Uruguay, and around 500km in Brazil's Rio Grande do Sul state. Orsi has taken a wait-and-see attitude toward exploration, while a gas pipeline would likely have more popular support because it could expand service from only a section of the coast to a wider region. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Low flood risk expected for upper Mississippi River


28/02/25
28/02/25

Low flood risk expected for upper Mississippi River

Houston, 28 February (Argus) — The spring flood risk is low along the upper Mississippi River, as area soils and streams have amble capacity to accommodate seasonal precipitation, according to the National Weather Service (NWS). Precipitation in the Corn Belt has been below normal this winter, keeping the region abnormally dry, the NWS said Thursday in its second Spring Flood Outlook . Minimal snow pack has formed in the Northern Plains following lackluster winter precipitation. Both these factors have reduced the risk for March-April flooding along the upper Mississippi River. Around 0-2in of water equivalent are in the snowpack along the northern stretches of Minnesota, Wisconsin and Michigan. In addition, stream flows are below normal, giving them more capacity to handle spring rains and snow melt. In other areas of the Corn Belt and the Northern Plains, unfrozen soil is expected to soak up precipitation, asmoisture levels remain below normal. Southern Illinois and Missouri have no frozen soil, completely thawing since the previous outlook . Iowa has 16-24in of frozen soil, slightly higher over the past two weeks. Northern states such as Minnesota and Wisconsin still have an average of 24-36in of frost depth. These states have the entire month of March to defrost and gain moisture levels, since the majority of spring planting for the Corn Belt begin in April. Normal precipitation is projected for the upper Mississippi River basin through the first half of March, according to the NWS' Climate Prediction Center. The seasonal temperatures outlook for March-April are near normal, while precipitation is anticipated to be above average. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Muted Norwegian gas flows in Jan-Feb follow forecast


28/02/25
28/02/25

Muted Norwegian gas flows in Jan-Feb follow forecast

London, 28 February (Argus) — Nominated flows to Europe from Norway have held below 2024 so far this year, but this decline is roughly in line with the Norwegian Offshore Directorate's (NOD) revised forecast for gas output. Nominated Norwegian flows to Europe, including the UK, averaged 327.5mn m³/d on 1 January-27 February, down by 4pc from 340.4mn m³/d a year earlier ( see flows graph ), data from Norwegian offshore system operator Gassco show. But nominated deliveries from the Norwegian continental shelf (NCS) to Europe were particularly high in January last year at 348.2mn m³/d — the second-highest for any month since January 2017. Norwegian flows to Europe held in a range of 295-318.2mn m³/d per year in 2021-23 and averaged 317.4mn m³/d across last year. But factoring out May and September last year, when maintenance on the shelf was the heaviest, average flows were 329.5mn m³/d. Unplanned maintenance has cut into exports On top of already scheduled works, unplanned maintenance has cut into production availability at several Norwegian fields so far this year. Average capacity cuts at Norwegian fields were 11.9mn m³/d in January and 6mn m³/d on 1-27 February, the latest Gassco data show. This is up on the year from capacity reductions of 4.2mn m³/d and 5.6mn m³/d for the respective periods. Gassco's schedule of works does not include capacity restrictions of less than 5mn m³. And past and scheduled Remit messages on the Gassco website include maintenance at 21 producing fields, but there are "currently above 65 producing units delivering into system", the operator has said. Norwegian exports to Europe can also be limited by works at processing plants, although this impact is difficult to assess as production from some fields can be processed at more than one processing plant,is processed at the field or at a receiving terminal. As such, available Norwegian export capacity can at times be lower than works at fields suggest. Nominated flows to Europe peaked at 360.3mn m³ on 19 December 2023 in recent years, even though technical capacity of export infrastructure is higher. Taking this figure as maximum export capacity to Europe, there has been a gap between actual and potential flows in recent months ( see actual versus potential flows graph ). NOD revised down forecast gas output for 2025 The NOD forecast that gas output on the NCS will fall faster on the year in 2025 than previously projected. The NOD forecast NCS gas production to fall this year from 2024 by 5pc to 118.45bn m³ or 324.5mn m³/d this year, according to data published on 20 February. This is a downward revision from its previous projection of 120.4bn m³ or 329.7mn m³/d. This would correspond to a year-on-year decline of 3pc from 2024. The forecast decline in output may have contributed to the drop in exports so far this year, although there is no confirmed production data yet available. The NOD forecast does not factor in commercial flexibility, where firms producing on the shelf may defer some production volumes in reaction to market conditions. In particular, production at the giant Troll field and fields in the Oseberg area, which account for a significant share of overall NCS production, are important flexible assets. Troll produced 119.5mn m³/d and Oseberg fields 24.2mn m³/d last year. While the shape of the TTF forward-price curve has changed in recent days as TTF prompt prices have fallen more than contracts further out along the curve, there remains an incentive to maximise production now looking longer term ( see price graph ), suggesting limited scope for production deferrals. In addition, forecasts by the NOD are likely based on the schedule of works at the time of modelling, but further gas works are often added over time and unplanned outages can occur, as has been the case so far this year. Maintenance at Norwegian fields is scheduled to be significantly lighter in March-December than in the period last year. Capacity cuts at the fields were scheduled as of today to be 14mn m³/d over the next 10 months, peaking at 48.6mn m³/d in September. This is down from realised capacity cuts of 29.7mn m³/d in March-December last year and a peak of 111.9mn m³/d in September 2024. In any event, the 4pc on-the-year decline so far this year is not far from the forecast decrease of 5pc. LNG could fill in for lower Norwegian exports LNG deliveries might need to step up this year to fill in for lower Norwegian exports to Europe. Given the expected reduction of NCS gas output of 5.79bn m³ this year from 2024, assuming an average LNG vessel size at 174,000m³ and accounting for boil-off and heel — LNG which remains in the vessel when unloading — Europe would need an additional 61 LNG cargoes this year to substitute the drop in Norwegian pipeline deliveries. And given the halt in Ukrainian transit of Russian gas at the start of the year, combined with continental storage stocks at a multi-year low approaching the end of the winter, it is likely Europe will need to attract even more LNG cargoes to comply with EU-mandated storage filling targets for 1 November. By Jana Cervinkova Norwegian nominated flows to Europe from Jan '21 until 1-27 Feb '25 mn m³/d Actual nominated vs potential daily Norwegian exports to Europe mn m³ Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Weak demand weighs on Singapore bio-bunker prices


28/02/25
28/02/25

Weak demand weighs on Singapore bio-bunker prices

Singapore, 28 February (Argus) — Bio-bunker prices at the port of Singapore edged down by 1pc on the month in February on the back of weak demand from shipowners and lower fuel oil values. The price of B24 — a blend of 24pc used cooking oil methyl ester (Ucome) and 76pc very low-sulphur fuel oil (VLSFO) — averaged $698.7/t on a delivered on board (dob) basis, down by almost $10/t compared with January. Spot demand in Singapore remained thin throughout February following the lunar new year celebrations, and shipowners continued to mostly purchase through term contracts. B24 dob Singapore prices averaged $703.8/t in January-February, compared with the 2024 average of $729.5/t. The slow trading activity in February was coupled with a 3pc month-on-month slump in very low sulphur fuel oil (VLSFO) cargo prices to an average of $549.1/t fob Singapore. The delivered premium for B24 versus VLSFO cargo prices was 5.7pc higher on the month at $149.6/t. Ucome prices in China bucked the trend, rising by 2.6pc on the month to average $1,084.7/t fob China in February. Ucome prices in China have been rising in recent days and ended the month at about $1,115/t. Singapore continues to be one of the most competitive ports for shipowners as regional sellers compete to offer bio-bunker prices below other ports, but it lost some ground against ports in China and the EU in February. B24 VLSFO blend prices in Guangzhou were $149.6/t above Singapore values on average in February, which was 3.6pc lower than the January premium, while ARA premiums over Singapore slipped by 16.7pc on the month to $99/t. By Mahua Chakravarty Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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