US bill aims to boost biofuel use in ships
Legislation proposed in the US House of Representatives on Thursday would allow ocean-going ships to consume renewable fuels without forcing the retirement of associated RIN credits.
RIN credits currently cannot be used for compliance purposes and must be retired if the biofuel is burned outside of US waters. This leads to higher biofuels purchasing costs for vessel owners who do not operate solely in US waters, as they must make up the lost RIN revenue for parties that would otherwise capture it. The only vessels that can avoid the additional costs are littoral and harbor vessels that do not leave US waters.
Passage of the proposed legislation would lower the cost of using biodiesel and renewable diesel for marine fuel, likely increasing demand.
The bipartisan bill was introduced by representatives Mariannette Miller-Meeks (R-Iowa) and John Garamendi (D-California) with co-sponsorships from representatives Nikki Budzinski (D-Illinois) and Carlos Gimenez (R-Florida). The bill's final text will be submitted early next week, according to Miller-Meeks' office.
Under the US Renewable Fuel Standard (RFS), obligated parties such as fuel refiners and importers must blend billions of gallons of biofuels with transportation fuels. To prove compliance with the RFS, these obligated parties acquire tradable RIN credits that are then submitted to the EPA.
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US services contract in June, signal broad weakening
US services contract in June, signal broad weakening
Houston, 3 July (Argus) — Economic activity in the US services sector contracted in June by the most since 2020 while a report earlier this week showed contraction in manufacturing, signaling a broad-based slowdown in the economy as the second quarter came to an end. The Institute for Supply Management's (ISM) services purchasing managers index (PMI) registered 48.8 in June, down from 53.8 in May. Readings above 50 signal expansion, while those below 50 signal contraction for the services economy. The June services PMI "indicates the overall economy is contracting for the first time in 17 months," ISM said. "The decrease in the composite index in June is a result of notably lower business activity, a contraction in new orders for the second time since May 2020 and continued contraction in employment." The business activity/production index fell to 49.6 from 61.2. New orders fell by 6.8 points to 47.3. Employment fell by 1 point to 46.1. Monthly PMI reports can be volatile, but a services PMI above 49 over time generally indicates an expansion of the overall economy. "Survey respondents report that in general, business is flat or lower, and although inflation is easing, some commodities have significantly higher costs," ISM said. The prices index fell by 1.8 points to 56.3, showing slowing but robust price gains. ISM's manufacturing PMI fell to 48.5 in June from 48.7 in May, ISM reported on 1 July. It was the third consecutive month of contraction and marked a 19th month of contraction in the past 20 months. Wednesday's weaker than expected ISM report, together with a Wednesday report showing initial jobless claims last week rose to their highest in two years, slightly increase the odds that the Federal Reserve may lower its target rate later this year after maintaining it at 23-year highs since last year in an effort to stem inflation. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Mexico economy showing 'timid growth': IMEF
Mexico economy showing 'timid growth': IMEF
Mexico City, 3 July (Argus) — Indicators of Mexico's non-manufacturing and manufacturing sectors suggested the economy recovered "some dynamism" in June, while maintaining the slow pace of growth of the second quarter, according to domestic financial association IMEF. "The trend suggested by the IMEF indicators suggest a moderate growth for the second quarter of the year," IMEF said. "The economy finds itself in an evident pause compared with the solid dynamism observed during 2022 and a large part of 2023." Manufacturing "stagnated" in the second quarter, it said. "It is very probable that economic activity will undergo additional slowdown in the second half of the year that will extend into 2025." IMEF's June manufacturing purchasing managers index (PMI) increased by 0.4 points to 49.5 points, still beneath the 50-point breakeven that shows contraction. This has been the third consecutive month of contraction. PMI adjusted to compensate for variations in company size was more positive, growing by 0.8 points to 51.2 in June, the group said. Manufacturing accounts for about a fifth of the Mexican economy. The non-manufacturing PMI, which covers the lion's share of the economy, rose by 0.6 points to 51 in June, marking a 29th month of expansion, IMEF said. Adjusted for company size, the headline services PMI rose by 0.9 to 5.18. Economic activity in Mexico continues to surprise downwards. After growth came in at an annual 1.6pc in the first quarter from a year earlier, the first data for April showed a monthly contraction of 0.6pc, IMEF said. Headwinds and tailwinds IMEF representatives highlighted growing market uncertainty following the Mexican election and ahead of the US presidential election in November. On the upside, said IMEF, Mexico should benefit from continued strength in the US economy, adding the incoming administration looks to bring down the current fiscal deficit, which is equal to 5.9pc of GDP. For which, it will not reach the government's 3pc target for the budget coming out in November, but progress is expected with next year's budget and moving forward. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU’s centre-right EPP mulls Green Deal tweaks
EU’s centre-right EPP mulls Green Deal tweaks
Brussels, 3 July (Argus) — The European Parliament's largest group, the centre-right EPP, is working to complete the bulk of its strategy programme on 4 July at a meeting in Portugal. Key elements in the party's 2024-29 policy agenda include significant changes to the bloc's climate and energy policy for 2030. A draft of the five-point policy plan lists revising CO2 standards for new cars and vans to "allow for the use of alternative zero-emission fuels beyond 2035". The EPP also calls for a new e-fuel, biofuel and low-carbon fuel strategy "with targeted incentives and funding to accompany the EU hydrogen strategy". Additionally, the EPP wants the incoming European Commission to create a "single market for CO2" with a market-based framework for carbon capture and storage (CCS) and carbon capture and utilisation (CCU), through an accompanying legislative package similar to that adopted for the EU's gas and hydrogen markets. The strategy document discusses a "Green Growth Deal" aiming to achieve the EU's 55pc emission reduction target by 2030 — from 1990 levels — and climate neutrality by 2050, while boosting the EU's competitiveness and ensuring technological neutrality. The draft document emphasises the need to transition "away from fossil fuels towards clean energy", also by ramping up international hydrogen production. And the draft advocates for a "simple, technology-neutral, and pragmatic definition for low-carbon hydrogen" in upcoming technical legislation from the commission. More controversial points include postponing application of the EU's deforestation regulation and addressing problems related to its implementation. The EPP also wants to split the EU's industrial emissions directive into "industrial and agricultural parts", conduct a "full-scale" inquiry into why farmers are not receiving fair prices for their products, and require robust impact assessments for the economic viability of farms for any new animal welfare proposals. The group's members of parliament are meeting until 5 July. Commission president Ursula von der Leyen is also attending. She was [recently nominated](https://direct.argusmedia.com/newsandanalysis/article/25825320 by EU leaders for re-election. The EPP programme will significantly influence policy priorities that von der Leyen would support, if she is approved by an absolute majority of 361 votes at a session in Strasbourg on 15-18 July. But von der Leyen may need to drop more controversial points to secure a majority with liberal, centre-left and green support. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Oman's Duqm refinery on track to run above capacity
Oman's Duqm refinery on track to run above capacity
Dubai, 3 July (Argus) — Oman's 230,000 b/d Duqm refinery is looking to operate at 10pc above nameplate capacity and is considering diversifying its product portfolio, according to its operator. Omani-Kuwaiti joint venture OQ8's chief executive David Bird told Argus the capacity expansion would be pursued in the near term, with some already opening up in coking and hydrocracker units. The 10pc crude capacity increase is "my COO's [key performance indicator] for this year and I think we all have very high confidence that we'll be able to sweat the assets further," Bird said. "We may even look at intermediate feedstocks and bring in VGOs and residues in order to load up these two conversion units." The $9bn refinery, which hit capacity in February, uses feedstock comprised of 65pc Kuwaiti crude and 35pc Omani crude. Bird said Duqm may add new products to its existing, middle distillates-focused, output of jet fuel, gasoil, naphtha and LPG. "We are looking at structuring, doing something with naphtha," he said. "We are evaluating either reformate or gasoline, which have already gone through feasibility and are now under stage-gate review to decide if we should pursue those investment decisions." Bird also pointed to possibilities in base oils, which he said will be needed "as long as things are moving." "The Middle East has a unique opportunity to capitalize on Group I and Group III base oils," he said, noting Duqm's proximity to growing demand markets in Africa. "If Duqm was to look at expanding capacity, which definitely would still be in middle-distillate oriented space, we would talk about another hydrocracker that might be orientated towards base oil," Bird said. Oman is also developing a petrochemical complex with Saudi Arabia's Sabic and Kuwaiti state-owned KPI, which will use some of the Duqm refinery's production as feedstock. Feasibility for the project has concluded and has been "intimately evaluated" along with a naphtha upgrade, and Bird described them as "very complimentary." Close eye on Europe Bird said that while there is a "huge thirst of our products right at our doorstep", Duqm cargoes are finding their way to destinations that were not previously envisaged. Around 45pc of Duqm's diesel goes to east Africa, but loadings for Europe have begun more recently. Duqm can make European grade winter-specification diesel and is on track to capitalise on demand during the switch from summer grade this year. "When it comes to winter-spec diesel, if the arbitrage opens we can supply that competitively versus anyone else," Bird said. "So we always have an eye on Europe but we're also going to make sure that we are active in markets that are closer to home." By Rithika Krishna Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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