New Mexico statute could make LCFS tricky

Spanish Market: Biofuels, Emissions, Oil products
12/07/24

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

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21/11/24

Brazil's Bndes approves $1.2bn in Climate Fund spending

Sao Paulo, 21 November (Argus) — Brazil's Bndes development bank approved spending $1.2bn of the Climate Fund in the second and third quarters to finance climate change mitigation projects. The projects that received funding — equal to about 70pc of the fund's total — will prevent 3.3mn metric tonnes (t) of CO2 equivalent/yr, according to Bndes. That would be 16 times more CO2 avoided than the 204,000 t from projects approved in the same period last year. In 2023 the fund released $176mn to 27 projects, most of them being renewable energy projects. The funds will go toward wind energy and biogas projects, urban mobility, bus fleet electrification and light rail transportation, as well as to finance green industries and native forest projects. Interest in developing Brazil's sustainable fuels market is growing, Bndes president Aloizio Mercadante said. "For this reason, we must at least double the resources of the Climate Fund as it is outlined in next year's federal budget," he said. One of several instruments of Brazil's climate change policy, the Climate Fund is linked to the environment ministry and is administered by Bndes. It was created in 2009 and uses resources from oil and natural gas exploration to mitigate and combat climate change. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Developing countries reject new finance draft

21/11/24

Cop: Developing countries reject new finance draft

Baku, 21 November (Argus) — Developing countries have expressed discontent with the climate finance draft text released today and continue to stick to their initial positions in negotiations at the UN Cop 29 climate summit, in Baku, Azerbaijan. The Cop 29 presidency earlier today released a new draft text on the key issue of climate finance for developing countries , but entrenched positions remain with no progress on an amount. Countries must agree on a new collective quantified goal (NCQG) — a new climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. Parties such as the group of 77 (G77) and China, Pakistan and Kenya — on behalf of the African Group of Negotiators — today responded with disappointment at the lack of an amount for finance. They are calling for a figure close to 1.3 trillion/yr in provided and mobilised finance, an amount that has long been pushed forward by developing countries. Developed countries have not indicated a number . "We cannot talk about a lower or higher number because there is no number," said Colombia's environment minister Susana Muhamad. The country seeks to end the country's dependence on fossil fuels , while promoting a transition to clean and renewable energy, but has long said that it is lacking the financial means to do so. The finance goal "is not an investment goal, but there remains text on investment flows," complained the G77 and China group. China's representative emphasised that the text should not "cherry-pick single paragraphs" from the Cop 28 deal, as developed countries seek to add language on fossil fuels agreed in Dubai last year. The finance text should duplicate accurately and fully the wording of the Paris Agreement, they said. China also reiterated that the finance goal is for developed countries to honour their obligations. The country pointed out that although it has provided 177bn yuan ($24.5mn) since 2016 in support of developing countries, "the voluntary support" of the global south is not part of the goal. It is different in nature from the obligation of developed countries to provide financial resources, the Chinese negotiator said. UN secretary general Antonio Guterres today urged parties to "soften hard lines" and focus on the bigger picture. "Finance is not a hand-out… it's a downpayment on a safer, more prosperous future for every nation on earth." "The time to repeat initial positions has come to an end, and parties should find areas of possible compromise," he said. The summit is scheduled to end on 22 November, but many participants said it is likely to overrun. By Prethika Nair and Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: EU, four countries commit to 1.5°C climate plans

21/11/24

Cop: EU, four countries commit to 1.5°C climate plans

Baku, 21 November (Argus) — The EU, Canada, Mexico, Norway and Switzerland have committed to submit new national climate plans setting out "steep emission cuts", that are consistent with the global 1.5°C temperature increase limit sought by the Paris Agreement. The EU and four countries made the pledge at the UN Cop 29 climate summit in Baku, Azerbaijan today, and called on other nations to follow suit — particularly major economies. Countries are due to submit new climate plans — known as nationally determined contributions (NDCs) — covering 2035 goals to the UN climate body the UNFCCC by early next year. The EU, Canada, Mexico, Norway and Switzerland have not yet submitted their plans, but they will be aligned with a 1.5°C pathway, EU climate commissioner Wopke Hoekstra said today. The Paris climate agreement seeks to limit the global rise in temperature to "well below" 2°C and preferably to 1.5°C. Canada's NDC is being considered by the country's cabinet and will be submitted by the 10 February deadline, Canadian ambassador for climate change Catherine Stewart said today. Switzerland's new NDC will also be submitted by the deadline, the country's representative confirmed. Pamana's special representative for climate change Juan Carlos Monterrey Gomez also joined the press conference today. Panama, which is designated as carbon negative, submitted an updated NDC in June. It is planning to submit a nature pledge, Monterrey Gomez said. "It is time to streamline processes to get to real action", he added. The UK also backed the pledge. The UK announced an ambitious emissions reduction target last week. The UAE — which hosted Cop 28 last year — released a new NDC just ahead of Cop 29, while Brazil, host of next year's Cop 30, released its new NDC on 13 November during the summit. Thailand yesterday at Cop 29 communicated a new emissions reduction target . Indonesia last week said that it intends to submit its updated NDC ahead of the February deadline, with a plan placing a ceiling on emissions and covering all greenhouse gases as well as including the oil and gas sector. Colombia also indicated that its new climate plan will seek to address fossil fuels, but it will submit its NDC by June next year . By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: EU says finance draft text not acceptable

21/11/24

Cop: EU says finance draft text not acceptable

Baku, 21 November (Argus) — The latest draft of the text on climate financing presented at the UN Cop 29 climate summit is not ambitious enough on mitigation — reducing emissions — and "clearly unacceptable," EU energy commissioner Wopke Hoekstra said today. Parties must agree at Cop 29, in Baku, Azerbaijan, on a new collective quantified goal (NCQG) — a new climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. The text is the main outcome for the summit. "What we had on our agenda was not just to restate the [Cop 28] consensus but actually to enhance that and to operationalise that," but the text goes in the opposite direction, Hoekstra said. Parties to last year's Cop 28 summit in Dubai made an historic pledge to "transition away" from all fossil fuels. The EU has warned against any backsliding on this pledge . "We cannot accept the view that the previous Cop did not happen," Hoekstra said. A draft text on the mitigation work programme — a process that focuses on emissions reduction — was released by the Cop 29 presidency in the early hours of this morning. It does not mention phasing out or reducing fossil fuels in energy systems, or reference the agreement reached on the latter point at Cop 28 last year. Hoekstra indicated today's text does not provide enough clarity to allow the EU to put a concrete number on the amount of climate finance that should be available. The bloc has insisted the final number for climate financing can come only when other elements, including the structure and contributor base, are settled. But recipient country groups such as the G77 and Like-Minded Developing Countries (LMDC) groups have expressed impatience at the lack of a concrete number. Minor bright spots in the numerous draft texts released overnight include those on Article 6, which governs international carbon credits, Hoekstra said. But the commissioner is "sure there is not a single ambitious country who thinks this is nearly good enough." By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Talks on Article 6 near final agreement

21/11/24

Cop: Talks on Article 6 near final agreement

Washington, 21 November (Argus) — Negotiators at the UN Cop 29 climate summit in Baku, Azerbaijan, appear close to a final agreement on the details of an international carbon market under the Paris Agreement. The ministers leading the final discussions on 21 November released updated texts for Article 6.2 and Article 6.4 of the accord that attempt to bridge the gap on remaining issues. It is not yet clear if these are the final texts, but any work left may only involve some "small tweaks", International Emissions Trading Association (Ieta) international policy director Andrea Bonzanni said. Those two sections of the Paris Agreement govern how countries can use carbon credits to meet their greenhouse gas (GHG) emissions-reduction pledges, known as nationally determined contributions (NDCs). Article 6 aims to help set rules on global carbon trade. EU energy commissioner Wopke Hoekstra called Article 6 one area of the talks "where at least the text is a bit encouraging." "We've always been pleading for more progress on Article 6," he said. "We've stressed the tremendous importance of transparency, predictability, credibility of these items." On the key issue of the Article 6 credit registry, the text reflects the idea of a "dual layer" approach that Singapore environment minister Grace Fu suggested on 20 November . The text calls for the creation of a registry to issue and trade credits that would be run by the UN and would be separate from the Article 6 registry, which would only serve an accounting function. "It looks like they managed to make both sides happy," Bonzanni said. The text also says that the inclusion of any emissions credits — known as internationally transferable mitigation outcome (Itmo) units — in the UN registry does not represent any sort of validation of their environmental integrity, in response to concerns raised by the US and others. "There was a concern that if the Itmos are in a UN registry, they may be seen as automatically having legitimacy or UN endorsement," Bonzanni said. The US should be happy with that language, he added. But the EU got only some of what it has sought over the past year. Most notably, the latest text does not include a definition of a "cooperative approach," essentially what it means for countries to buy and sell emissions units under Article 6. An earlier draft of the text included a definition, but there were concerns that it "could have restrained the markets significantly" and created confusion around certain requirements for when countries authorise Itmos, Bonzanni said. "I believe the presidency did a good job by making tough calls." Ieta is not happy with everything in the text, but at the same time "there is nothing harmful" to trading in it, Bonzanni said. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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