US, Japan, Germany miss G7 fossil fuel goal: Report

Spanish Market: Coal, Crude oil, Emissions, Natural gas
13/04/23

G7 countries the US, Japan — which is hosting the group's summit this year — Italy and Germany are still lagging behind their commitment to end new direct international public finance for unabated fossil fuels, according to civil society organisations (CSOs) Oil Change International and E3G.

G7 climate and environment ministers reiterated in May 2022 a pledge made by 39 countries at the UN Cop 26 climate conference in 2021, committing to end public financing of unabated coal, oil and gas projects by the end of 2022. The G7 nations are Canada, France, Germany, Italy, Japan, the UK and the US.

Progress has been made in shifting billions in international public finance away from fossil fuels and into clean energy, the organisations said, adding that Canada, the UK and France's new and existing policies "largely meet" the Glasgow and G7 promises.

But Japan and Germany have yet to release policies to meet their commitment, while Italy's policy does not meet the pledge, they added. The three countries, as well as the US, have all missed the 2022 deadline. The US has adopted some guidelines but has not made them public, the two CSOs said.

The G7 has the opportunity to accelerate the energy transition by delivering on their commitment, the CSOs said, adding that the group's climate and energy ministers meeting this weekend in Japan "must reiterate and strengthen" their public financing goal and steer clear of language supporting investments in upstream gas and LNG.

The G7 economies last year added a caveat to the commitment, saying "publicly supported investment in the gas sector can be appropriate" in order to reduce dependency on Russian gas.

Japan is "actively pushing" for investments in LNG this year, although this has been "met with resistance" from the EU, Canada, the UK and the US, the organisations said.

Oil Change International and E3G found that the G7's international public finance for fossil fuels reached at least $73bn in 2020-22, compared with $28.6bn for clean energy over the same period. The brunt of the funding for fossil fuel projects — 82pc — came from export credit agencies (ECAs). The organisations also found that, in 2022-22, 28pc of all G7 energy finance went to gas — $10bn/yr — "more than any other energy sub-sector", with the majority of gas finance going into LNG.

Japan and the US were the top supporters of LNG, providing 47pc and 20pc, respectively, of all of the G7's LNG finance, they said.

A further $8.6bn/yr went to oil and gas projects, they said, while clean energy finance reached $9.5bn in the 2020-22 period.

"Canada, Japan, and Italy provided the most international public finance for fossil fuels between 2020 and 2022, giving an annual average of at least $10.5bn, $6.9bn and $2.9bn, respectively," Oil Change International and E3G said.

By Caroline Varin

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02/04/25

Mexico manufacturing extends contraction in March

Mexico City, 2 April (Argus) — Mexico's manufacturing sector contracted for a 12th consecutive month in March, with production and employment both deepening their slides, according to a survey released today. The manufacturing purchasing managers' index (PMI) ticked up to 47.2 in March from 47.1 in February, but remained below the 50-point threshold between contraction and expansion, according to the latest PMI survey from the finance executive association IMEF. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP. Within the manufacturing PMI, the new orders index rose by 1.3 points to 45.3, still deep in contraction. Meanwhile, production fell by 0.6 points to 44.6. The employment index also declined 0.6 points to 46.4 in March, now in contraction for 14 consecutive months. Meanwhile, the non-manufacturing PMI — covering services and commerce — declined 0.8 points to 48.8 in March from 49.6 in February, holding in contraction for a fourth consecutive month. Within the non-manufacturing PMI, new orders fell 1.5 points to 48.2 and production declined 1 point to 47.5 with employment down a point as well in March to 47.5, as all three pushed deeper into contraction. In contrast, the inventories component rose 3.5 points to 50.6 into expansion territory in March. But this may be the result of company strategies to stockpile inventories ahead of US tariffs and the reciprocal measures Mexico is set to announce on 3 April, IMEF technical advisory board member Sergio Luna said. PMI data show that the economic stagnation that began in late 2024 persisted through March, with results from January and February pointing to a sharp slowdown in the first quarter, IMEF said. This follows annualized GDP growth of 0.5pc in the fourth quarter of 2024, slowing from 1.7pc in the third quarter, according to national statistics agency data. Luna said concerns over US tariffs continue to drive much of the uncertainty reflected in the PMI data. Internal factors — such as reduced government spending to contain the fiscal deficit and investor unease over judicial reforms passed last year — are also weighing on activity, Luna added. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Article 6 credits 'could provide CBAM cost flexibility'

02/04/25

Article 6 credits 'could provide CBAM cost flexibility'

Lisbon, 2 April (Argus) — Allowing the use of credits issued under Article 6 of the Paris climate agreement for compliance with the EU's carbon border adjustment mechanism (CBAM) could provide flexibility for developing countries that lack the capacity to set up their own carbon pricing systems in response to the measure, delegates at a conference in Lisbon, Portugal, heard today. The CBAM regulation provides for a carbon price already paid on a product in its country of origin to be deducted from CBAM costs, providing an incentive for countries importing products covered by the measure to the EU to introduce equivalent carbon pricing systems. But developing countries often lack the capacity to enact such policies, the chief sustainability and innovation officer at ACT Group, Federico di Credico, told delegates, and allowing the use of Article 6 credits for compliance could provide an alternative. This could in one form take place implicitly, di Credico said, if CBAM liabilities are adjusted down in relation to pricing systems that themselves allow some compliance using Article 6 credits. An example of this is Singapore, where 5pc of the country's carbon tax can be offset through the purchase of Article 6 internationally traded mitigation outcomes (Itmos). A more direct inclusion of Article 6 credits for compliance could entail a calculation on a euro-for-euro basis, di Credico suggested, for example reducing a CBAM liability of €100 to €50 if the importer has purchased €50-worth of Article 6 credits. Using a tonne-for-tonne basis would not work because the CBAM is not volume based, he said. But the uncertainty surrounding Article 6 credits means that their inclusion would bring an added layer of complexity to the CBAM, Cedric de Meeus of cement producer Holcim said. Article 6 credits are not usable in the EU emissions trading system (ETS), which forms the reference price for the CBAM, he pointed out, while not all activities producing Article 6 credits would be equivalent to the deep decarbonisation being carried out by European industry. It remains unclear how the EU will take into account carbon prices in other jurisdictions for the purposes of the CBAM. The CBAM regulation includes the ability to credit a "carbon price… effectively paid in the country of origin" but does not define what falls within this term, and the implementing regulation that will provide further detail on the matter has not yet been tabled. Article 6 of the Paris deal provides for two carbon pricing mechanisms allowing countries to collaborate voluntarily to reduce their emissions. Article 6.2, which is already fully operational, produces Itmos through bilateral agreements on emissions reduction or removal projects, while Article 6.4 establishes the soon-to-be-implemented Paris Agreement Crediting Mechanism (Pacm), a UN-regulated global carbon crediting system. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Transition technology draws energy R&D spend: IEA

02/04/25

Transition technology draws energy R&D spend: IEA

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Australia’s gas leaders hit out at market intervention

02/04/25

Australia’s gas leaders hit out at market intervention

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Brazil’s Bauna oilfield restarts after maintenance

02/04/25

Brazil’s Bauna oilfield restarts after maintenance

Sydney, 2 April (Argus) — Brazil-focused Australian oil and gas company Karoon Energy has brought its Bauna oilfield in the offshore Santos basin back on line after the completion of intervention works at its SPS-88 well in February. Production resumed on 27 March after the project was shut down for maintenance on 7 March, Karoon said. The field's output has since reached about 26,500 b/d, above pre-shutdown levels because of the return of SPS-88 well production on 28 March. The well is pumping 2,000 b/d of oil on a restricted choke and is gradually being opened further, with rates in line with expectations. The intervention was originally planned for October-December 2024 after being taken off line in November 2023 because of a mechanical blockage in the gas lift valve. Karoon's plans to acquire the Cidade de Itajai floating production, storage and offloading (FPSO) unit at its Bauna oilfield have progressed, with the transaction on track to close as forecast in April. Selection of a new operations and maintenance contractor for the FPSO will be announced in mid-2025, with an updated cost guidance to be provided once terms are agreed. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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