Asset manager LGIM divests from Glencore over coal
Asset manager Legal and General Investment Management (LGIM) will divest from trading firm Glencore, it said today.
LGIM is "concerned that Glencore does not meet our red line asking mining companies to disclose whether they plan to increase thermal coal capacity", it said. It filed a shareholder resolution last year requesting that Glencore disclosed how its projected thermal coal output aligns with the Paris climate agreement.
The asset manager takes the approach of "engagement with consequences" on climate-related issues. As a result of this, it will vote against 37 companies and divesting from 16 firms "that failed to meet our red lines", it said. It is able to apply exclusions in funds representing nearly £176bn ($222bn) of assets. LGIM had assets under management of £1.16 trillion ($1.46 trillion) at the end of 2023. LGIM did not move any companies off its divestment list, which includes oil major ExxonMobil, shipping firm Cosco and utilities Kepco and PPL.
LGIM supports limiting global emissions to net zero by 2050, and uses its Climate Impact Pledge — with annual reports — to help companies reach the objective. It assessed more than 5,000 companies across 20 "climate-critical" sectors for this year's report. The assessments focus on key recommendations from the Task Force on Climate-related Financial Disclosures, which is now incorporated into the International Sustainability Standards Board framework. LGIM informs companies of its assessment, to allow them to improve on any areas necessary.
The asset manager expects companies to measure and report Scope 1 and 2 greenhouse gas (GHG) emissions and expects "banks to restrict financing related to unabated thermal coal, new oil and gas fields and commodity-driven deforestation."
It also introduced new baseline expectations for the oil and gas, mining and utility sectors. Oil and gas firms must disclose methane emissions, while mining companies must not expand thermal coal mining capacity. Utilities must not expand thermal coal power generation, LGIM said. It identified 455 companies "as subject to voting sanctions" in the 2024 proxy season, it said. Of these, 106 were firms in emissions-intensive sectors — such as oil and gas and utilities — that did not meet expectations.
LGIM highlighted recent improvements, including on climate disclosure, Scope 3 reporting and "net zero ambition". But "more policy change is required" for the world to reach net zero. And "carbon intensive assets are often being phased out, according to their end-of-life timelines, as opposed to in line with decarbonisation needs", it noted.
Finance will be the dominant theme at the UN Cop 29 climate summit in November, and the focus on the private sector is likely to intensify. Countries must finalise details of a new climate finance goal, and many developed countries have called for a broader donor base, nodding to the private sector.
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New Zealand, Australia carbon brokerage rivalry builds
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.
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.
India, SE Asia demand lift Indonesian May coal exports
India, SE Asia demand lift Indonesian May coal exports
Singapore, 15 July (Argus) — Indonesian coal exports rose in May from a year earlier, led by higher demand from India and southeast Asia. The country exported 46.27mn t of coal in May, up by 6.6pc from a year earlier and by 3.9pc from April , customs data show. The data include all types of coal, such as thermal and coking coal. Indonesia exported about 222mn t of coal in January-May, up from 212mn t a year earlier. The country could export 532.59mn t this year if the current production run rate of 44.37mn t/month is maintained over the next seven months, according to Argus calculations based on customs data. Indonesia exported 521.10mn t last year. The year-on-year increase in May exports was supported mainly by higher demand from India, the world's second-largest coal importer, as utilities lifted their import purchases to replenish stocks for the summer season. Shipments to India in May rose by about 19pc on the year to 10.1mn t, according to the data, although exports slipped from 11.34mn t in April. The steady growth in Indian coal-fired generation, which hit an all-time high in May, continued to support demand for imported coal. The country's overall coal-fired generation, which meets most of the country's power requirements, rose to 119.53TWh, from 106.03TWh a year earlier, according to data from the Central Electricity Authority. Coal-fired generation in May was also higher than 116.5TWh in April, supported by increased power consumption caused by higher air-conditioning usage during the summer heatwaves. Indonesian exports also rose to cater for greater demand from southeast Asia. Exports to the region in May rose by 15.5pc on the year and by 1.5pc from April to 11.19mn t. This was led by a steady rise in exports to Vietnam, where shipments grew by 47pc on the year and by about 17pc on the month to 3.34mn t in May. Demand was led by utilities as coal-fired generation reached a probable record high of 17.08TWh in May, as per Argus calculations based on data from state-owned utility EVN. Vietnamese coal imports reached 6.50mn t in May , up from 4.97mn t a year earlier and from 5.90mn t in April, provisional customs data show. Shipments to China, the world's largest coal importer, accounted for nearly 40pc of Indonesian exports at 18.44mn t, down from 18.82mn t a year earlier but up from 15.57mn t in April. The year-on-year decline was caused by Chinese utilities being less aggressive this year in purchasing seaborne cargoes because of subdued thermal power generation. China's thermal power generation, which mainly uses coal, fell to 454TWh in May from 471TWh a year earlier and 459TWh in April, according to the latest data from the National Bureau of Statistics. China's imports of thermal coal — including non-coking bituminous coal, sub-bituminous coal and lignite — totalled 32.7mn t, down from 31.4mn t a year earlier and from 32.9mn t in April, Chinese customs data show. Output rises A rise in Indonesian coal production supported higher exports in January-May. Output during the period rose to 334mn t, from 314mn t a year earlier, according to data from the country's energy ministry, ESDM. But output in June may have eased on the year to 54mn t, taking the year-to-date tally to about 388mn t, up by 2.1pc from a year earlier. The data will probably be revised, as output is frequently reviewed in Indonesia because of a lag in some producers' reporting. Indonesian output could face pressure from heavy rains in parts of the key coal-producing Kalimantan region, while production cutbacks could also affect overall production. Some coal producers could trim output in response to ongoing low prices in the international market. Argus on 12 July assessed Indonesian GAR 4,200 kcal/kg coal at $52.07/t fob Kalimantan, the lowest level since mid-September 2023. The price is down sharply from the 2023 peak of $90.41/t in January last year. Lower output could dent the export trajectory. Coal exports in June were estimated at 39.82mn t, according to data from trade analytics firm Kpler. Exports in June last year stood at 39.02mn t, according to customs data, and at 38.72mn t, per Kpler's estimates. By Saurabh Chaturvedi Indonesian coal exports mn t Indonesia coal exports by destination, Jan-May mn t 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.
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