Pennsylvania high court maintains RGGI stay
The Pennsylvania Supreme Court yesterday opted against overruling a lower court's decision to temporarily block the state from participating in the Regional Greenhouse Gas Initiative (RGGI).
The Supreme Court's decision means that a lower court's preliminary injunction, which halted enforcement of a regulation that cleared the state to join RGGI, will remain in place for at least the near future.
The state's efforts to participate in the eastern US power plant cap-and-trade program have been mired in legal challenges for months.
The Commonwealth Court first handed down the injunction in July, finding that Republican lawmakers and a coalition of coal-related groups had raised "substantial" questions about the RGGI rule's legality. Although Pennsylvania regulators' subsequent appeal functioned as an automatic "supersedeas" under state law, temporarily staying that injunction, the Commonwealth Court issued another order to again block the rule's enforcement.
The Department of Environmental Protection (DEP) had asked the Supreme Court to reinstate that stay of the injunction while legal proceedings play out, with the state poised to lose out on hundreds of millions of dollars in potential auction revenues. And in a filing last week, DEP asked the Supreme Court to expedite its review of RGGI-related cases and to promptly schedule an argument session on the injunction's legality.
The court's order yesterday rejects DEP's request to stay the injunction though it does not weigh in definitively on DEP's claims that the injunction was wrongly decided.
Pennsylvania, which will miss next week's auction because of these legal challenges, will also miss the 7 December auction unless the injunction is lifted by 23 October, DEP says.
Unless the Supreme Court gets more involved in the cases, the Commonwealth Court has scheduled its own argument sessions for this autumn. A September session will explore Republicans' claims that the state sought to publish the RGGI rule prematurely, while the more important November session will consider RGGI opponents' broader claims that the rule is unlawful.
The court has also expressed interest in an argument session next February to review claims raised by a group of owners of natural gas-fired power plants in a related case about the RGGI rule's legality.
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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.
New Mexico statute could make LCFS tricky
New Mexico statute could make LCFS tricky
Houston, 12 July (Argus) — US independent refiner Valero warned other New Mexico's low-carbon fuel standard (LCFS) advisers today that lawmakers may make the program uniquely difficult. The language lawmakers passed earlier this year appeared to require the state's Clean Transportation Fuel Standard to reduce the carbon intensity of blended transportation fuels, said Brian Bartlett, part of Valero's public policy and strategic planning group, in a presentation to fellow advisory committee members on the draft rulemaking. That could mean tougher initial targets for the program if the state sets requirements for finished fuels already blended with biofuels, in addition to requirements for neat gasoline and diesel common to other markets, he said. "We are looking at it from the definition that is in the statute, and that is a different definition than is in any other statute," Bartlett said. Regulators and some other advisers in the meeting did not agree with the interpretation as the only way to read the law. LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed the annual limits incur deficits that suppliers must offset with credits generation from the distribution to the market of approved, lower-carbon alternatives. New Mexico lawmakers earlier this year directed the state Environment Department to establish an LCFS by July 2026. The state is speeding toward a formal rulemaking this summer to establish a program on a faster timeline. California's LCFS exists almost entirely through agency rulemakings. The law that led to its creation directs the state to reduce emissions, but legislators did not prescribe a transportation program. Oregon lawmakers, in part building off of that model, referenced a low-carbon fuel standard (LCFS) in 2009 legislation but did not include blended fuels in its definitions. Washington's legislation, passed in 2021 and leading to a program that began enforcement last year, defined regulated fuels as "electricity and any liquid or gaseous fuel" used for transportation. The law explicitly directs reductions using gasoline and diesel baselines, similar to other states. Under the interpretation proposed today, New Mexico would be unique in needing to determine a baseline for blends such as 10pc ethanol gasoline, or 5pc biodiesel. Blended fuels, especially renewable diesel blends, have driven much of the recent credit generation and carbon intensity reductions in west coast programs. "I think that's a novel interpretation that you have presented, and the Environment Department will definitely consider it," the agency's environmental protection division director Department Michelle Miano said. Representatives of ExxonMobil and Phillips 66 suggested that the process may need more time to offer sufficient technical expertise to the department. The Environment Department is seeking to complete a technical report ahead of a planned August petition for a rulemaking establishing the program to the state's Environmental Improvement Board. The advisory committee will meet to discuss the technical report and hold public comment on 26 July. By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia's Climate Active program drives ACCU demand
Australia's Climate Active program drives ACCU demand
Sydney, 12 July (Argus) — The Australian federal government-backed Climate Active certification program continued to drive voluntary demand for Australian Carbon Credit Units (ACCUs) last year, although future growth remains uncertain as the scheme will undergo a planned reform. Cancellations of ACCUs for Climate Active certification reached 592,837 units in 2022, down from an all-time high of 625,705 in 2021, according to estimated data that the Department of Climate Change, Energy, the Environment and Water (DCCEEW) recently disclosed to Argus . Figures for 2023 are not yet available, according to the department, but cancellations may have reached a new high between 650,000-700,000 units, according to Argus estimates ( see table ). Each ACCU represents 1t of CO2 equivalent (CO2e) stored or avoided by a project. The Clean Energy Regulator (CER) said it does not have a dataset of ACCU cancellations for Climate Active certification, despite having disclosed figures in some of its quarterly carbon market reports in recent years. It mentioned late last year that the program accounted for around 0.5mn of a total 0.8mn cancelled for voluntary purposes in the first three quarters of 2023, and later reported total voluntary cancellations of 290,146 units in the fourth quarter alone. Voluntary cancellations reached nearly 1.1mn units in 2023 , a new record high. Certification under the Climate Active standards is awarded to businesses that measure, reduce and offset their carbon emissions to achieve carbon neutrality. More than 700 certifications have been provided to entities including large and small businesses, local governments, and non-profit organisations. But significant changes in climate science, business practices and international benchmarks since the program was established in 2010 prompted the federal Labor government to seek modifications aimed at driving a more ambitious voluntary climate action in Australia, following its separate reform of the compliance market's safeguard mechanism . The DCCEEW late last year launched a consultation with proposals to reform Climate Active, which would require more climate ambition from businesses seeking to be certified under the program. The use of carbon credits to offset emissions that have not been reduced by businesses would be tightened, with a requirement that all eligible international offset units meet a five-year rolling vintage rule, replacing the existing post-2012 vintage requirement. Other proposals include mandating a minimum level of gross emissions reductions and a minimum percentage of renewable electricity use. "The government is working through feedback on these proposals and will announce the consultation outcome later this year," a DCCEEW spokesperson told Argus . No expected changes in eligible offsets ACCUs have been representing a small share of the total offsets used for Climate Active certification at between 5.7-10.8pc in recent years, despite the estimated record high last year, according to DCCEEW estimates ( see table ). Organisations can currently use certified emissions reductions (CERs) and removal units (RMUs) under the program, as well as verified carbon units (VCUs) from the Verra registry and verified emissions reductions (VERs) from Gold Standard. The DCCEEW did not provide a breakdown of cancelled volumes per credit type. No minimum use of ACCUs and no changes to the list of eligible international units are expected in the near term, following advice from a review from Australia's Climate Change Authority (CCA) in 2022. But some market participants have been asking for the removal of CERs, which account for the "vast majority" of carbon offsets surrendered by Australian organisations, according to utility AGL. CERs are "outdated", utility Origin Energy said in its submission to the Climate Active consultation. "We consider it would be consistent with international carbon reduction mechanisms to introduce a clear end date to phase out the use of CERs from the program and ensure greater alignment with the more relevant Paris Agreement," Origin said. "This reform is considered an immediate priority, and of more urgent need than some of the other proposals in this consultation." Uncertainties over future demand More investor and activist pressure in recent years over the use of carbon offsets with perceived low levels of integrity have also been forcing companies to review not only their offset standards, but also claims of ‘carbon neutrality' and similar terms. One of the DCCEEW's proposals is to discontinue the use of ‘carbon neutral' to describe the certified claim and to choose a different description. "A lot of the voluntary demand for carbon offsets in Australia has traditionally come from Climate Active, but the landscape is indeed moving quickly and the concept of carbon neutrality is being replaced by net zero," said Guy Dickinson, chief executive of Australia-based carbon offset services provider BetaCarbon and head of carbon trading at sister company Clima. This should drive more price stratification between carbon removals and carbon avoidance credits, he noted. Telecommunications firm Telstra, one of the biggest companies in Australia, recently announced it will stop using carbon offsets to focus instead on reducing its direct emissions. It will no longer seek Climate Active certification as a result and will remove references that its plans are ‘carbon neutral' or ‘carbon offset'. This could prompt other businesses to follow suit, market participants said. Another source of uncertainty over future voluntary demand comes from a DCCEEWW proposal that abatement from all ACCUs used under Climate Active would count towards meeting Australia's Nationally Determined Contribution (NDC) under the Paris Agreement. The use of ACCUs under the program have so far been treated as ‘additional' to Australia's emissions reduction target through accounting under the Kyoto Protocol. If the government goes ahead with such a proposal, this could disincentivise participation in Climate Active as organisations might consider this as "paying to help the government meet its targets through the voluntary action of businesses," utility EnergyAustralia warned in its submission. There has been increased interest in emerging and alternate standards to those acceptable under Climate Active, such as the American Carbon Registry, Climate Action Reserve and Puro.Earth offsets, according to environmental marketplace Xpansiv's vice president of carbon and Australian energy, Peter Favretto. But Climate Active has reported positive growth in certified brands since its inception and will likely continue to create demand for offsets in the international voluntary market and the Australian ACCU market, he said. "With the upcoming mandatory climate reporting legislation in Australia , and a similar atmosphere in other global jurisdictions such as the US and the UK, there is a growing demand that could lead to further growth in Climate Active certifications," Favretto added. By Juan Weik ACCUs used for Climate Active certification units Year Volume Total voluntary ACCU use Climate Active % 2019 243,105 329,145 73.9 2020 417,405 605,499 68.9 2021 625,705 844,445 74.1 2022 592,837 855,081 69.3 2023 650,000-700,000* 1,090,575 60-64* DCCEEW, CER *Argus estimates Total offsets under Climate Active unit Year ACCUs Total offsets ACCUs % 2019 243,105 4,230,011 5.7 2020 417,405 6,857,628 6.1 2021 625,705 5,796,466 10.8 2022 592,837 7,472,711 7.9 DCCEEW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Boeing used less SAF in 2023 than planned
Boeing used less SAF in 2023 than planned
New York, 10 July (Argus) — US aerospace manufacturer Boeing used less sustainable aviation fuel (SAF) in 2023 than it had initially planned, citing "supply chain issues." Boeing doubled its internal SAF consumption in 2023 compared with year-prior levels according to its latest sustainability report, with the fuel making up about 3pc of its total aviation fuel use over the year. But the company's use of around 478,000 USG neat SAF in its own operations was still less than its previously announced purchase commitments. Boeing early last year committed to funding 5.6mn USG of blended SAF from Finnish biofuels producer Neste over the course of 2023, with 2.6mn USG to be used directly by Boeing and another 3mn USG to support SAF use elsewhere as part of a book-and-claim accounting process. Since the Neste blend contains about 70pc conventional jet fuel, the Boeing commitment in essence was to purchase and use within its own operations about 780,000 USG neat SAF. But Boeing's direct SAF consumption last year, which reflects fuel used internally and not fuel it supported for use elsewhere, was around 61pc of its earlier purchase agreement. The company, confirming the discrepancy, said not all the planned 2.6mn USG were received because of "supply chain issues" but declined to elaborate further. Under the initial deal, Epic Fuels and its parent company Signature Aviation were supposed to supply 2.3mn USG of the Neste blend to Boeing, while Avfuel was supposed to supply 300,000 USG. Avfuel manager of alternative fuels Keith Sawyer told Argus that it ended up supplying more than the planned 300,000 USG at Boeing's request last year and that the fuel supplier is on track to meet its obligations to supply 1.5mn USG of blended SAF to Boeing this year. Epic Fuels and Neste declined comment. Boeing has set plans to use 4mn USG of the same Neste SAF blend in its own operations this year, with some coming from Epic and some from Avfuel, and to purchase SAF certificates associated with 5.4mn USG of blended SAF used elsewhere. Boeing added that SAF, which today mostly comes from hydrotreated vegetable oils and waste fats, is "the biggest lever for the industry to decarbonize by 2050." The company plans to use more of the fuel internally and to ensure that all the commercial airplanes it produces are compatible with 100pc SAF by 2030. In short supply Aviation companies see SAF as crucial for meeting climate goals, though usage to date has been limited by SAF's steep premium to conventional jet fuel. Though prices for SAF delivered to the US west coast have recently fallen on expectations of higher supply, it is still more than twice as expensive as conventional jet according to Argus assessments. The fuel's growth thus hinges on government policy, but low environmental credit prices in the US and uncertainty about a clean fuels tax credit kicking off next year have created a difficult investment environment for biofuels producers. Few potential suppliers and thin market liquidity then make it hard for prospective customers to rapidly scale up their SAF consumption. American Airlines for instance wants to replace 10pc of its jet fuel with SAF by 2030, but the US airline reported in its own sustainability report last week that it used 2.7mn USG SAF in 2023, an increase from the prior year but still less than 0.1pc of its total fuel use. Chief executive Robert Isom said that "we've signed commitments with multiple SAF producers, at a premium, to try to secure supply" but that "the volume of SAF available today and likely to be ready over the next several years is a tiny fraction of what's needed." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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