Latest Market News

S Korea unveils biogas strategy, eyes 1mn t/yr GHG cut

  • Spanish Market: Emissions, Hydrogen, Natural gas
  • 24/06/24

South Korea has released a national biogas strategy that aims to produce up to 500mn Nm³/yr of biogas by 2026, which will cut greenhouse gas (GHG) emissions by 1mn t/yr.

The plan aims to treat 5.57mn t/yr of organic waste resources and substitute fossil fuels such as LNG that are worth 230bn won/yr ($166mn/yr), the environment ministry (ME) said last week. South Korea relies almost entirely on imports to meet its oil and gas needs, with the US' EIA estimating its fossil fuel import dependence at almost 98pc. South Korea's most expensive LNG imports in April were $14.69/mn Btu from Qatar, with the cheapest supplies from Indonesia at $7.31/mn Btu.

The strategy comes as the amount of organic waste produced climbed by 12pc in the past decade, with 80pc of this going into making feed and compost, while only 6pc is used for biogas. About 370mn Nm³ of gas is produced across 110 facilities nationwide as of 2022 and is used for city gas and power generation, although about 15pc of capacity remains unused.

South Korea aims to promote its biogas production targets, in line with its legislation. This comes after the Act on the Promotion of the Production and Use of Biogas Using Organic Waste Resources was implemented in December last year. The biogas act legislates that mandatory public-sector producers must convert 50pc of collected waste resources into biogas by 2034 and 80pc by 2050. Mandatory private-sector producers only need to hit 10pc by 2034 and 80pc in 2050. These targets will be expanded in stages in the future, with fines imposed should producers fail to achieve them.

The law applies to large-scale producers of waste and includes farms with over 25,000 pigs, livestock waste treatment facilities that process over 200m³/d or more and facilities that produce over 1,000 t/yr of food waste, according to ME in December 2023. There are 235 local governments nationwide responsible for processing organic waste and 52 large-scale private waste producers as of 2022, ME said last week.

South Korea also plans to expand its integrated biogasification production base from a total of three locations in 2022 and seven locations in 2023 to 15 locations this year. ME in March announced the selection of eight additional local governments for the installation of biogasification facilities — Incheon, Gwangju, Gwacheon, Chuncheon, Hoengseong, Buyeo, Mokpo and Suncheon. If these eight projects are completed by 2030 they can produce about 90,000 Nm³/d of biogas from 1,660 t/d of organic waste.

The country is also pursuing a demonstration project to produce biogas from unused organic waste, such as animal and vegetable residues. South Korea will also offer more support to projects that simultaneously use two or more types of organic waste to raise biogas production efficiency.

South Korea will additionally revise its Urban Gas Business Act so that the biogas producers can directly supply more to consumers, from 10,000 Nm³/month previously to 300,000 Nm³/month.

Hydrogen pursuit

South Korea also plans to continue installing hydrogen production facilities that use biogas, with two additional facilities installed this year, which will total four such facilities. Domestic firm Hyundai E&C earlier this month announced it is pursuing opportunities in producing high-purity hydrogen from biogas sourced from organic waste.

The country also hopes to use biogas to produce clean methanol, which can be used as bunker fuel and for which demand has been rising given stricter regulations on vessel carbon emissions.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

17/07/24

Climate finance goal is top priority: Cop 29 president

Climate finance goal is top priority: Cop 29 president

London, 17 July (Argus) — Addressing and aiming to finalise a new climate finance goal will be the "centrepiece" of the UN Cop 29 climate summit, the event's president, Mukhtar Babayev said today. Cop 29 is scheduled to take place in Baku, Azerbaijan, on 11-22 November. Babayev — officially Cop president-designate until the summit begins — is the country's ecology and natural resources minister. The Cop 29 presidency's "top negotiating priority is agreeing a fair and ambitious" new climate finance goal — known as the new collective quantified goal (NCQG) — Babayev wrote in a letter to countries and other stakeholders. He had previously been clear that finance will be a key topic at Cop 29. The NCQG represents the next stage of the $100bn/yr of climate finance that developed countries agreed to deliver to developing countries over 2020-25. But much is still up for discussion and must be finalised at Cop 29, including the amounts involved and timeframe. Babayev noted "disagreements", flagging that "the politically complex issues will not be solved by negotiators alone". The Cop 29 presidency has appointed Egyptian environment minister Yasmine Fouad and Danish climate minister Dan Jorgensen to lead consultations on the NCQG, Babayev said today. Announcements on ministerial pairs for other issues are expected in September, he said. "Adopting the NCQG will be a pivotal moment for whether parties can make progress on the means of implementation and support, and the Paris Agreement more broadly", Babayev said. Climate finance needs a "substantial increase", and the presidency "will spare no efforts to act as a bridge between the developed and developing nations", he added. Babayev also called for more financial pledges to the loss and damage fund , which countries agreed at Cop 27 to establish, to address the unavoidable effects of climate change in vulnerable countries. He encouraged all countries to submit national climate plans — known as nationally determined contributions (NDCs) — aligned with the Paris agreement, which seeks to limit the rise in global temperature to "well below" 2°C above pre-industrial levels, and preferably to 1.5°C. "The Cop 29 presidency will lead by example", Babayev said. Azerbaijan and its "Troika" partners, Cop 28 host the UAE and Cop 30 host Brazil, are working on 1.5°C-aligned NDCs, he said. The Article 6 mechanism of the Paris agreement, which relates to international carbon trading, will also be a priority at Cop 29, Babayev said. The presidency "is committed to finalising the operationalisation of Article 6 this year", he added. Cop 28 ended without a deal on Article 6, but "in recent months… there was clear will to advance work" on the topic, Babayev said. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

TotalEnergies agrees to sell stake in Nigeria SPDC JV


17/07/24
17/07/24

TotalEnergies agrees to sell stake in Nigeria SPDC JV

London, 17 July (Argus) — TotalEnergies has agreed to sell its 10pc stake in Nigeria's SPDC onshore oil and gas joint venture to Africa-focused independent Chappal Energies for $860mn. Other partners in the SPDC joint venture comprise operator Shell with a 30pc interest, state-owned NNPC with 55pc and Italy's Eni with 5pc. Shell agreed to sell its stake in the joint venture to a consortium of five companies for up to $2.4bn in January. That deal remains subject to a due diligence process by regulators. The joint venture's assets include around 50 producing oil and gas fields across 18 licences. TotalEnergies will transfer its 10pc interest and all its rights and obligations in 15 of the licences to Chappal. These licences mainly produce oil and netted TotalEnergies around 14,000 b/d of oil equivalent last year. The other three licences — OML 23, OML 28 and OML 77 — mainly produce gas and account for 40pc of supply to the Nigeria LNG (NLNG) joint venture, in which TotalEnergies has a 15pc stake. TotalEnergies will also transfer its 10pc stake in these licences to Chappal but it will retain "full economic interest" in them, it said. The divestment "allows us to focus our onshore Nigeria presence solely on the integrated gas value chain and is designed to ensure the continuity of feed gas supply to Nigeria LNG in the future", said TotalEnergies' exploration and production president Nicolas Terraz. Chappal specialises in taking over and operating mature fields. It agreed a deal in November last year to acquire Norwegian firm Equinor's stake in Nigeria's OML 128 block, a transaction that was finally approved earlier this month . The company said last month that it is contemplating issuing a bond to raise up to $450mn to help it finance acquisitions. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

China’s CNOOC gets record gas results from Bohai well


17/07/24
17/07/24

China’s CNOOC gets record gas results from Bohai well

Singapore, 17 July (Argus) — Chinese state-controlled oil firm CNOOC has achieved what it described as record gas production results from a test well at its Longkou 7-1 (LK7-1) oil and gas field in the eastern region of China's Bohai Sea. The LK7-1-1 exploration well could produce almost 1mn m³/d of natural gas and about 210m³/d (1,320 b/d) of crude oil, the company said on 15 July. The former set a record for natural gas tested productivity in the Bohai Sea, according to CNOOC. China produced 123.6bn m³ of natural gas in January-June, up by 6pc from a year earlier, according to the National Bureau of Statistics of China (NBS). The country produced 4.15mn b/d of crude in 2023, NBS data showed. The potential output adds to CNOOC's reserves and production in the Bohai Sea, which stood at 1.97mn b/d of oil equivalent (boe/d) and 599,847 boe/d as of the end of 2023, according to CNOOC. The region represents 29pc of the company's total reserves and approximately 32pc of its production. CNOOC, along with other state-controlled firms like PetroChina and Sinopec, dominates China's domestic oil and gas production. CNOOC has also separately started production at an oilfield offshore China. The Wushi 23-5 oilfield development project — located in the Beibu Gulf of the South China Sea — is expected to produce light crude, and achieve peak production of 18,100 boe/d in 2026. "The project will realise full-process recovery and utilisation of the associated gas through integrated natural gas treatment," the company said on 1 July. CNOOC in November 2023 started production at its Bozhong 19-6 condensate gas field in the Bohai bay. The gas field is currently producing an estimated 37,500 boe/d, exceeding an initial expectation of peak production of about 37,000 boe/d, the company said on 11 July. CNOOC in March 2023 discovered the Bozhong 26-6 field with over 100mn t of oil equivalent reserves, also in the Bohai Sea. By Joey Chan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU must review 'overly ambitious' H2 targets: Audit


17/07/24
17/07/24

EU must review 'overly ambitious' H2 targets: Audit

Hamburg, 17 July (Argus) — The EU needs a "reality check" on "overly ambitious targets" for renewable hydrogen production and imports, the European Court of Auditors (ECA) has said. The European Commission's RePowerEU targets of producing 10mn t/yr renewable hydrogen by 2030 and importing the same amount were based on "political will" rather than "a robust analysis," the ECA said in a report on EU renewable hydrogen policy. The bloc is "unlikely to meet" the targets "based on available information from member states and industry". Some industry participants have for a long time criticised the EU goals as unrealistic . In a response to the ECA's report, the commission said it "acknowledges the challenges" associated with reaching these "aspirational targets". The commission said it will "assess whether the aspirational targets can be reached," but noted it "cannot commit to any update at this stage". It said the underlying objectives "are still valid" and that "a downward review of the targets" could increase uncertainties for investors. But earlier this year, an assessment in which the commission set out scenarios for the energy sector anticipated much lower domestic renewable hydrogen production of around 3mn t/yr by 2030 . The commission told Argus at the time that the RePowerEU projections for 2030 would be reviewed once member states have submitted updated national and energy climate plans (NECPs). These were due by the end of June, but only a few member states submitted them on time . Responding to the ECA report, the commission said it would accept a recommendation to review its hydrogen strategy more broadly — including incentive mechanisms, the prioritisation of funds and the role of imports compared with domestic production — noting it would take the NECPs into account for this. EU funding could amount to €18.8bn in 2021-27, based on the ECA's estimates. But the commission itself "does not have a full overview of needs or of the public funding available," the ECA said. Funding opportunities are "scattered between several programmes," which makes it "difficult for companies to determine the type of funding best suited for a given project," it said. The ECA acknowledged that progress has been made on key regulatory areas, including a definition of renewable hydrogen. But the body notes that this took a long time, leading to investment decisions for projects being delayed. By Stefan Krumpelmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

New Zealand, Australia carbon brokerage rivalry builds


17/07/24
17/07/24

New Zealand, Australia carbon brokerage rivalry builds

Sydney, 17 July (Argus) — Commodities broker Marex announced today it opened an office in New Zealand and launched a new carbon trading platform for local emissions units, days after New Zealand competitor Jarden rolled out its own trading platform in Australia. Marex will initially focus on execution and clearing services across carbon, electricity and dairy sectors in New Zealand, in both listed and over-the-counter products. Its New Zealand-based and global clients will also be able to trade New Zealand emissions units (NZUs) in a newly launched platform called Neon Carbon. New Zealand clients will have access to clearing directly through Marex on the Singapore Exchange and Australian Securities Exchange, with the latter planning to soon launch physically settled futures contracts for Australian Carbon Credit Units (ACCUs), large-scale generation certificates (LGCs) and NZUs . The new Marex team will be led by Nigel Brunel, formerly Jarden's head of commodities in New Zealand. Jarden is considered to have the biggest share of the brokered NZU market through its CommTrade spot trading platform, followed by domestic trading platforms CarbonMatch and emsTradepoint, which is operated by state-owned electricity transmission system operator Transpower New Zealand's Energy Market Services. CommTrade expansion Marex has hired several other former Jarden brokers in recent months in New Zealand and Australia, as it looks to expand its environmental products business across Asia-Pacific . But the increasing brokerage competition in Australia with growing trading volumes for ACCUs in recent years prompted Jarden to roll out CommTrade in the Australian market. Jarden's clients in Australia had until now only a price display mechanism for ACCUs. But they are now able to directly input bids and offers through CommTrade, with real-time matching capabilities displayed on screen. "Transactions remain anonymous until matched, after which clients receive a contract note from Jarden detailing settlement terms," Jarden announced late last week. All transactions are settled directly through the company, with clients also able to trade other products such as LGCs. Marex told Argus it would not be able to share any product details on Neon Carbon at this stage. UK-based broker Icap entered the New Zealand carbon trading market earlier this year with the acquisition of domestic brokerage firm Aotearoa Energy, while several other brokers have entered the ACCU market in recent years. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more