Cop: New stocktake draft has more fossil fuels options
An updated draft text on the global stocktake — a measure of progress towards Paris Agreement goals — released today has increased the number of options around curbing fossil fuels up for discussion among ministers at the Cop 28 UN climate summit.
The new text, described by the UNFCCC — the UN's climate body — as "refined building blocks", takes the previous three options on language around fossil fuels to five. More options on the table may complicate discussions, which are now at ministerial level, in the second week of Cop 28.
The topic of fossil fuels, and language around phasing them out or reducing their use, has become the dominant one at this year's Cop.
The draft text options include one for "a phase out of fossil fuels in line with best available science", as well as a second option that goes further, urging alignment with the Intergovernmental Panel on Climate Change and the Paris agreement. But there is little difference between them, and a focus on minutiae at this stage in negotiations could run the risk of slowing talks.
The third option calls for phasing out "unabated fossil fuels", peaking consumption this decade, and "underlining the importance for the energy sector to be predominantly free of fossil fuels well ahead of 2050", while the fourth is for a phase-out of unabated fossil fuels, "rapidly reducing their use so as to achieve net-zero CO2 in energy systems by or around mid-century". The final option is for no text on the topic.
But new text around tripling renewable energy capacity by 2030, which 128 countries have now committed to, links the scaling up of renewables to a reduction in fossil fuels, possibly to alleviate concerns around energy security. It outlines "ensuring that the increase in renewable energy capacity is strategically implemented to displace fossil fuel-based energy".
Language around abatement — broadly undefined but relating to carbon removal technology, including carbon capture and storage (CCS) — remains in the text and could act as a bargaining chip for countries that are against cutting back fossil fuels. If parties leave this Cop with terms such as abatement or unabated in the final decision, there will need to be a discussion about what this means in scientific terms, climate programme research associate at non-profit World Resources Institute Jamal Srouji said.
And because the stocktake is "so comprehensive", progress is linked to all other issues up for negotiation at Cop 28, international climate policy expert at Climate Action Network Sven Harmeling said today.
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Brazil's Bndes backs reforestation firm
Brazil's Bndes backs reforestation firm
Sao Paulo, 29 August (Argus) — Brazil's Bndes development bank approved R160mn ($28.7mn) in financing for reforestation company Mombak, which will use the funding for projects in Para state that will generate carbon offsets to be sold in the international market. The company has planted over 3mn native tree species in Para as part of its broader efforts to recover degraded areas in the Amazon basin where deforestation levels are highest. Mombak will receive R80mn from the Bndes' Climate fund and another R80mn from the banks' Finem line of credit. This is not Mobak's first project to sell carbon offsets. The company has a deal with Microsoft for 1.5mn offsets and with automobile racing firm McLaren. The funding is part of a partnership between Bndes and the environment ministry to reduce deforestation in an area known as the "deforestation arch" in the Amazon, with the goal of recovering 6mn hectares (ha) of degraded area in this region by 2030 and 18mn ha by 2050. This environmentally vulnerable region has received R1bn in financing since it was officially targeted at the Cop 28 UN climate talks. Mombak was founded in 2021 by former executives from Brazilian tech companies 99 and Nubank. The company has raised roughly R1bn in capital to invest in reforestation projects. It also received backing from the Canada Pension Plan Investment Board, Bain Capital, French insurance company AXA and the Rockefeller Foundation. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK eyes new environmental guidance for oil, gas: Update
UK eyes new environmental guidance for oil, gas: Update
Adds comment from Shell London, 29 August (Argus) — The UK government will develop new environmental guidance for oil and gas firms, in the light of a recent Supreme Court decision that ruled consent for an oil development was unlawful, as the scope 3 emissions — those from burning the oil produced — were not considered. The ruling means that "end use emissions from the burning of extracted hydrocarbons need to be assessed", the government said today. The government will consult on the new guidance and aims to conclude the process "by spring 2025", it said today. It will in the meantime halt and defer the assessment of any environmental statements related to oil and gas extraction and storage activities until the new guidance is in place, including statements that are already being assessed. The Supreme Court in June ruled that Surrey County Council's decision to permit an oil development was "unlawful because the end use atmospheric emissions from burning the extracted oil were not assessed as part of the environmental impact assessment". The government also confirmed that it will not challenge judicial reviews brought against the development consent granted to the Jackdaw and Rosebank oil and gas fields in the North Sea. A judicial review in the UK is a challenge to the way in which a decision has been made by a public body, focusing on the procedures followed rather than the conclusion reached. Environmental campaign groups Greenpeace and Uplift launched legal challenges in December seeking a judicial review of the government's decision to permit Rosebank. Norway's state-owned Equinor and London-listed Ithaca hold 80pc and 20pc of Rosebank, respectively. Greenpeace in July 2022 separately filed a legal challenge against the permitting of Shell's Jackdaw field. "This litigation does not mean the licences for Jackdaw and Rosebank have been withdrawn", the government said. The Labour government, voted into office in July , pledged not to issue any new oil, gas or coal licences, but also promised not to revoke existing ones. Equinor is "currently assessing the implications of today's announcement and will maintain close collaboration with all relevant stakeholders to advance the project. Rosebank is a vital project for the UK and is bringing benefits in terms of investment, job creation and energy security", the company told Argus today. Shell is "carefully considering the implications of today's announcement... we believe the Jackdaw field remains an important development for the UK, providing fuel to heat 1.4mn homes and supporting energy security, as other older gas fields reach the end of production", the company told Argus . North Sea oil and gas production "will be a key component of the UK energy landscape for decades to come", the government said today. The UK government introduced a climate compatibility checkpoint in September 2022, designed to ensure that oil and gas licensing fits UK climate goals. The UK has a legally-binding target of net zero emissions by 2050. The checkpoint, though, does not take into account scope 3 emissions. These typically make up between 80pc and 95pc of total oil and gas company emissions. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baghdad issues ultimatum to KRG to drive output down
Baghdad issues ultimatum to KRG to drive output down
Dubai, 29 August (Argus) — The federal Iraqi government has issued an ultimatum to northern Iraq's Kurdistan Regional Government (KRG) to reduce its crude output to "the minimum required", or face the possibility of not receiving its share of the budget. The move, communicated today by a senior official at Iraq's state marketer Somo, represents the latest attempt by Baghdad to pressure the KRG into cooperating to help bring Iraqi output below its Opec+ production target. KRG was asked "on several occasions" to cut its production according to the budget law "to the minimum required for their local refineries" — around 50,000 b/d, the official said. "Otherwise, the KRG will have to pay [the federal government] all the revenues they receive, for the extra barrels beyond what their refineries need". Iraq has emerged as the Opec+ group's biggest overproducer, failing to meet its target in any of the first seven months this year. The country, along with Kazakhstan and Russia, which are overproducing too, submitted updated plans to the Opec secretariat last week outlining how it intends to compensate for the extra volume. Iraqi officials said that a lack of visibility on KRG production are complicating efforts. Output has been gradually recovering in Kurdistan this year, even though the 400,000 b/d export pipeline that links fields in the north to the Turkish Mediterranean port of Ceyhan has been shut-in since March 2023 because of a dispute between Baghdad and Turkey. Crude production from the region collapsed below 100,000 b/d in the months following the pipeline closure, but has risen steadily, particularly from fields operated by foreign companies, as they find new outlets for their crude. Foreign operators operating in Kurdistan said they rely on trucking crude to local refineries to stay in business, but Kurdish crude is also being smuggled — by truck — across the border to neighboring Turkey, Iran and Syria, Argus understands. Different accounts Crude output from Iraqi Kurdistan is currently averaging around 350,000 b/d , a spokesperson for the Association of the Petroleum Industry of Kurdistan (Apikur) told Argus. Apikur is an industry body representing the foreign operators in the northern region . Argus assessed KRG production at 200,000-250,000 b/d on average in the first half of the year. But the federal government disputes those numbers, insisting that production from Kurdistan is around 150,000 b/d. "Any more than that will put huge pressure on the KRG," the official said. Assuming refining capacity of 50,000 b/d, the official labelled the higher estimates as "illogical." He pointed to the fact that about 500 trucks are already needed on a daily basis to export the region's 100,000 b/d, and that the state of the roads and service stations does not allow for the double amount of vehicles. Earlier attempts by the federal government to scale back Iraqi Kurdish production have failed, but the official thinks that Baghdad's latest ultimatum will have the desired impact. "These are serious steps," the official said. If KRG production remains above the 50,000 b/d needed for domestic refining, and it does not deliver the proceeds to Baghdad, it will not receive its share of the budget, which it is heavily dependent on to support its economy. Getting back on track Iraq's latest compensation plan put its overproduction in January-July at 206,000 b/d, compared with 197,000 b/d in January-June. Opec+ secondary sources estimated that output rose by 57,000 b/d on the month to 4.251mn b/d in July, some 251,000 b/d above the Opec+ target. The official said Iraqi production should fall to required levels from September. Somo canceled a spot cargo of 1mn bl this month, and Iraq is "working on deferring two similar shipments, before the end of the month," the official said. "That means we will be down around 3mn bl, or 90,000 b/d". He added that a 50,000 b/d decrease in domestic crude consumption resulting from increased gas imports from Iran and stronger domestic gas output will also help with the country's compliance. He said Iraq's August output levels will be down on the month, but dependent "on the position of the KRG". By Nader Itayim and Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Greek regulator approves 2025 gas tariff increases
Greek regulator approves 2025 gas tariff increases
London, 29 August (Argus) — Greek energy regulator RAEWW has approved 2025 gas transmission tariffs previously proposed by transmission system operator Desfa, with some alterations. The annual tariff for entry to the Greek grid is set at roughly €0.35/MWh for 2025, around 4pc higher than in 2024 (see data & download) . Exit tariffs at domestic and international points will be €0.59/MWh, a nearly 21pc increase on the year, while the LNG regasification tariff is set at €0.30/MWh, nearly 35pc higher than in 2024. Before annual capacity auctions in July, Desfa had proposed some differentiation in entry and exit tariffs for different interconnection points, but RAEWW has instead opted for equalising entry and exit fees regardless of the point. Multipliers for shorter-term capacities are set at around 1.38 for quarterly products, 1.48 for monthly products and 2.97 for daily products. These are the same multipliers which have been used for the past two years. RAEWW set the allowed revenue for transmission services at €149.2mn. A much larger portion of the allowed revenue will come from exit points, at around €90.5mn compared with €58.7mn at entry points. The regulator set an allowed revenue of €23.6mn for LNG services. It noted the Revithoussa LNG terminal has consistently exceeded its allowances since 2019, peaking at 312pc in 2023 as use of the terminal soared. RAEWW has also opened a public consultation on proposed changes to the rulebook of Greece's Henex exchange, which would create a new "trading-only" type of participant. The new category of participant does not need to be a registered user of the transmission system, but must have concluded a contract with exclusively one other participant who is registered, and guarantee that it will fulfil its obligations arising from any concluded trades. If the registered system user loses its registered status, then the trading-only participant also does. Any termination of contract between the two parties must immediately be reported to Henex. Interested parties can email responses to the consultation to RAEWW until 20 September. By Brendan A'Hearn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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