EU’s centre-right EPP mulls Green Deal tweaks
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.
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California voluntary offset bill stranded
California voluntary offset bill stranded
Houston, 2 July (Argus) — A California bill targeting sellers of questionable or false voluntary offsets credits in the state has died after its author pulled it from a committee hearing on Monday, leaving no way to advance the bill in this session. SB 1036, introduced by state senator Monique Limón (D), would have made it unlawful for anyone to issue, market, certify or sell voluntary carbon offsets, or maintain a registry, if they have knowledge that the credit-generating projects are not actually reducing or removing greenhouse (GHG) emissions as claimed. The bill spent just over a month in limbo ahead of a Monday hearing before the state Assembly Natural Resources Committee, after passing out of the Senate by a 31-15 vote in May. But Limón withdrew the bill just before the hearing, which represented its final chance to meet Wednesday's deadline for advancing out of the policy committee. Limón cited difficulties gaining support from market participants as the reason for withdrawing the bill, which would add claims around carbon offsets purchased from the voluntary market to the state code on false or misleading advertising. "Despite the deep deficiencies within voluntary carbon markets, it became clear that market participants are unwilling to accept legally enforceable standards to address the magnitude of junk offsets being marketed and sold in California," she said. This is Limón's second attempt to pass a bill regulating claims in the voluntary carbon offset sphere, following SB 390, which passed largely unopposed in the legislature last year before governor Gavin Newsom (D) vetoed the bill. The governor rejected the bill on concerns that it might affect well-meaning sellers and verifiers, hurting the in-state and wider voluntary carbon markets. While the predecessor bill smoothly moved through the legislature last session before the governor's veto, the same was not true for SB 1036, which faced opposition from environmental market participants and industry groups such as Anew Climate, Western States Petroleum Alliance (WSPA), the Securities Industry and Financial Markets Association (SIFMA) during this session. Critics of the bill said the requirements would be unworkable, discourage project development and investments and increase the role of the courts in reviewing the intricacies of GHG accounting. It is unclear if Limón will again revive this specific approach to regulate the voluntary carbon offset market in the next legislative session. But the senator has no plans to stop, her office said, and she intends to decide early next year her next steps to address the voluntary carbon market. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Washington advances carbon market linkage plans
Washington advances carbon market linkage plans
Houston, 2 July (Argus) — Washington regulators are moving forward with plans to further align the state's cap-and-trade program with the California-Quebec carbon market. The state Department of Ecology has released for public comment two draft rules related to holding limits, biofuel emissions and electricity imports that are intended to smooth the way for linkage ahead of formal discussions with California and Quebec regulators that could kick-off next year. The first draft rule, issued on Monday, would revise general cap-and-trade program mechanics, such as raising the holding limit for allowances issued each year for general market participants to 25pc from 10pc should the programs link. It would also revise emissions exemption for biofuels, recently authorized by state lawmakers, of 30pc lower greenhouse gas (GHG) emissions than comparable petroleum fuels and allow Ecology to add an exemption standard used by a linked program, for a two-part standard. Washington set the ball rolling on its ambition to link with the Western Climate Initiative (WCI) partners California and Quebec last year in hopes that creating a larger North American carbon market will help reduce compliance costs. The state legislature authorized Ecology to make the changes in legislation adopted earlier this year . The program costs became a significant issue last year, when Washington Carbon Allowances (WCAs) rose as high as $70/metric tonne (t) in the secondary market. California and Quebec agreed in March to explore adding Washington to the WCI, but progress is unlikely to happen this year as California regulators first focus on updating the state's cap-and-trade program. In the interim, Ecology said it is still considering other amendments that could help with linkage, including moving the state's compliance periods, which run on a four-year cycle, to the three-year cycle used in the linked market. But California and Quebec are considering shifting their compliance periods to either four years or two years for 2026-2030, and then to either five years or alternating between three-year and two-year periods after 2030 to align with their respective statutory targets, which Ecology will have to take into account. Washington has set a target to cut GHG emissions by 45pc by 2030 compared with 1990 levels, and reach net-zero emissions by 2050. The program cap-and-trade program covers industrial facilities, power plants, natural gas suppliers, and other fuel suppliers with emissions of at least 25,000 t/yr. Ecology is accepting feedback on its linkage rulemaking through 27 September, with a public meeting set for 10 July. Imports and reports In a separate rulemaking announced last week, the state is considering expanding reporting requirements and covered emissions under the program to included imported electricity from centralized electricity markets (CEM). The state is required under its Climate Commitment Act to adopt a methodology for imported electricity by 1 October 2026. The proposed amendments would come into play in 2027, allowing regulators to assign GHG emissions to imports of electricity from CEM and for the state to better understand how the imports may affect its climate goals. Under the proposed amendments, regulators would increase allocations of no-cost allowances to electric utilities. The state issues no-cost allowances to electric and natural gas utilities, and industrial entities, to mitigate the cost of decarbonization. Electric utilities must consign an increasing portion of these allowances to state auction starting in 2027 and must use this revenue for projects to benefit customers through projects like energy transition billing credits. Regulators estimate that bringing CEM importers under the cap-and-trade program will result in an aggregated annual compliance cost of around $7mn-$119mn, depending on allowance prices, which regulators expect will fall as emissions declines outweigh imports over time, according to a preliminary regulatory analysis released last month. The proposed changes reflect estimates last year by the state Department of Commerce that 43pc of the state's electricity supply by 2050 will come from imports, driven by Washington moving its electricity away from fossil fuels to renewables sourced from within and outside the state to meet the goal of decarbonizing the state's grid by 2045. Ecology will accept feedback on its proposed rules for imported electricity through 20 August, with final adoption planned in December. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LPG industry urged to invest to build EU credibility
LPG industry urged to invest to build EU credibility
Tapping into funding for renewable fuels is seen as key for the industry, but investment decisions must not be made in haste, writes Matt Scotland London, 2 July (Argus) — The LPG industry has been urged to work more closely with the sustainable aviation fuel (SAF) and other nascent renewable fuel sectors to establish bioLPG and renewable LPG and DME production plants as soon as possible. "It would be great if the LPG industry could embrace other renewable liquid fuels" as these often already have governmental backing and financing, Vertimass board adviser Neil Murphy told delegates at European LPG association Liquid Gas Europe's Congress in Lyon, France, over 18-20 June. US-based Vertimass aims to commercialise the conversion of ethanol into SAF, renewable diesel and renewable gasoline components. The LPG sector, in its efforts to develop renewable forms of LPG and DME, needs to move from "great intent" to the "earthiness of investment and putting plants down in the ground", Murphy said. Doing so will build credibility among policy makers, he said. But the sector was also warned about making hasty investments that turn out to be "mistakes", hurting the prospects for renewable LPG in the medium to long term. "The US saw huge failures in its early solar panel manufacturing efforts — billions of dollars were wasted. So, we can't advocate for things just to get steel in the ground, we need the steel in the ground to be successful," US start-up BioLPG LLC's chairman Kimbal Chen said. BioLPG LLC and Chicago-based research institute GTI Energy have jointly developed the "Cool LPG" process to convert biogas into bioLPG. Italian consortium Green LG Energy is adopting the technology to develop a pilot plant in Chicago and later a larger demonstration facility in Italy, chief executive Francesco Franchi told delegates. The Chicago facility could open before the end of this year and the Italian plant within the next two years. Once operational, the latter will "show policy makers and stakeholders that we can produce bioLPG, allowing us to secure funding and support to develop an industrial-scale plant", he said. Credibility was a core theme of the conference in Lyon as the industry continues to work to enshrine LPG and renewable alternatives in EU and national legislation. The question the sector needs to ask itself is how to make its proposals and voice credible to EU policy makers after the recent European Parliament elections, LGE president Audrey Galland said. France could play a vital role, as despite having a 10pc share of the European LPG market, it has a strong voice in Brussels, according to French LPG association FGL president Julie de Fazio. A growing recognition that electrification of heating will not be suitable in most rural areas, and that rural customers want to decarbonise, should benefit the LPG sector, she said. But it still needs "financial incentives and mandates" that encourage investment in renewable liquid gases, she said. Hearing the possibility for mandates in a positive rather than restrictive sense was "music to my ears", renewable DME company Dimeta's advocacy director Sophia Haywood said. Combining supportive mandates for renewable liquid gases at the same time as financial incentivisation could be key to unlocking growth, she said. Pragmatic shift? The recent parliamentary election could be a boon for the LPG industry, according to former EU MEP and UK member of the regulatory policy committee Daniel Dalton. The shift in power from centre-left to centre-right should result in "more pragmatic energy policy" that benefits the LPG sector, he told delegates. And the ascent of the cost-of-living and energy security issues up the EU's agenda should also lead to a "watering down of the hard edges" when it comes to the paths to meeting the EU's bold targets under its Green Deal. "You as an industry are well placed" in assisting the EU in its efforts to enhance energy security and lower energy costs, while also moving towards decarbonised renewable liquid gases, he said. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Italy’s NECP eyes 11pc of power demand from nuclear
Italy’s NECP eyes 11pc of power demand from nuclear
London, 2 July (Argus) — Italy aims to generate at least 11pc of its power demand from nuclear energy by 2050 and could double that amount if necessary as part of efforts to meet its climate goals. In its new national energy and climate plan (NECP) sent to Brussels yesterday, Rome said its "conservative" scenario envisioned installing 8GW of nuclear power capacity using mainly small modular reactors but also fusion plants. Italy could build as much as 16GW of nuclear capacity depending on developments across the energy system, according to the document. The ‘with-nuclear' option would provide savings of around €17bn ($18.3bn) compared with not using it. It would also mean less gas consumption tied to carbon capture and storage (CCS) technology. Italy banned nuclear power in a referendum in 1987 after the Chernobyl disaster, but the current right-wing government of Giorgia Meloni has voiced its support for the technology. Last year it set up the national platform for sustainable nuclear power to map out a timeline for a possible return to nuclear power. In confirmation of targets set last year , Rome said it aimed to install a total of 131GW of renewable energy capacity by 2030, compared to 58GW in 2021, with a view to meeting 63pc of power demand and 39.4pc of total energy consumption. Most of the new capacity will be solar photovoltaic (PV), with 79GW expected to be installed driven by new subsidies and easier permitting. Wind capacity is expected to contribute 28GW, with offshore wind providing just 2.1GW. The plan envisages the development of contracts for difference (CfDs) through auctions for larger plants, as well as a framework to boost power-purchasing agreements (PPAs). Italy's NECP also maps out the development of electricity grids and cross-border interconnections. "The long-term risk is that the tight renewables penetration targets and the CfD mechanism established by the EU to deliver incentives could lead to a negative impact on spot prices, currently driven in Italy by the price of natural gas and carbon allowances," Italian broker Equita said. The current final revision of Italy's NECP comes after a cross-sector and public consultation. It was submitted to the European Commission for approval on 1 July, a day after the deadline required by EU law. By Steven Jewkes and Timothy Santonastaso Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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