Firms’ short-term climate plans not Paris-aligned: TPI
Only a low proportion of the world's highest-emitting companies analysed by the Transition Pathway Initiative (TPI) have 2025 and 2035 climate targets that align with the Paris climate agreement's temperature goals, although longer-term commitments are increasing.
About 30pc of the 409 companies in 11 sectors assessed by TPI — which is based at the London School of Economics — now have climate targets out to the middle of the century that are aligned with limiting global warming to 1.5°C above pre-industrial levels, compared with 7pc in 2020.
And another 14pc have 2050 plans aligned with limiting global warming to below 2°C. The Paris deal seeks to limit the temperature increase to "well below" 2°C above the pre-industrial average and preferably to 1.5°C.
But shorter-term plans for 2025 and 2035 remain largely unaligned with the temperature goals, TPI analysis published today found. "This indicates both that historical rates of emissions reduction have been inadequate, and that, on average, company targets imply plans to postpone deep emissions cuts until the 2040s," TPI said.
The analysis indicates that the world's highest-emitting companies will cumulatively overshoot the emissions intensity budget for 2020-50 required to keep to the 1.5°C goal by 61pc, based on a calculation that weights firms and sectors by market capitalisation.
"Oil and gas companies are a major driver of the exceedance," TPI said. Only 6pc of those analysed have plans aligned with the 2°C goal in the medium and long term — 2035 and 2050. Food producers are also one of the least-aligned sectors, at just 8pc.
The sector with the most companies aligned to the goal is diversified mining at 50pc, followed by the steel sector at 46pc and electricity at 41pc.
Regionally, European firms have the highest rate of alignment at 66pc, followed by 64pc of Australasian companies and 56pc of Japanese groups.
Only 18pc of Chinese companies are either aligned with the temperature goals or disclosed the information needed for analysis, and only 30pc of those headquartered in other Asian countries.
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EU needs to shake up energy markets: Draghi report
EU needs to shake up energy markets: Draghi report
Brussels, 9 September (Argus) — The EU should take measures in energy markets that are "dominated by vested interests", including antitrust investigations, a report from former European Central Bank president Mario Draghi found today. The call came as part of Draghi's report into the EU's future competitiveness, which was requested last year by European Commission president Ursula von der Leyen. It identified cost-efficient decarbonisation as a major challenge, and said the bloc must focus on accelerated innovation and growth and overcome geopolitical dependence and vulnerability. The report, which runs to more than 300 pages, says the EU should carry out antitrust investigation into electricity and gas markets, and into energy imports, to deter "anti-competitive behaviour and tacit collusion" among companies, it said. There should be a common maximum level of energy surcharges in the EU covering all energy taxes, levies and network charges, the report found. Draghi — a former Italian prime minister — put forward specific proposals for energy markets including the development of an EU-level gas strategy, progressively moving away from spot-linked sourcing and increasing EU bargaining power, and reinforcing long-term contracts. He argues for decoupling inframarginal generation from natural gas prices through long-term power purchasing agreements (PPAs) and contracts for difference (CfDs). Draghi wants compensation mechanisms for offering flexibility on markets as well as joint purchasing of energy in addition to demand aggregation. Other ideas tackle speculative behaviour via position limits and dynamic caps as well as an EU trading rule book with "an obligation to trade in the EU". A further proposal is a review of a so-called "ancillary activities" exemption, under EU financial regulation, whereby non-financials, typically energy, firms can trade energy derivatives more freely without being authorised as investment companies. Speaking alongside Draghi today, von der Leyen noted the need to shift away from fossil fuels and support industry through decarbonisation, also by bringing down energy prices. Draghi's report noted the difficulty of cutting emissions in hard-to-abate industries, as well as in the transport sector. Planning is crucial, the report noted. For industry, it recommended "a mixed strategy that combines different policy tools and approaches for different industries", importing some "necessary technology" while ensuring the bloc retains some manufacturing capacity. It called for "a joint decarbonisation and competitiveness plan where all policies are aligned behind the EU's objectives." Von der Leyen did not react to specific proposals put forward by Draghi, and she is not obligated to act on the report's proposals. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil to build on G20 for climate leadership role
Brazil to build on G20 for climate leadership role
Sao Paulo, 9 September (Argus) — Brazil to build on G20 for climate leadership role Brazil is looking to use its G20 presidency to advance agreement on energy transition finance — also a central topic at the UN Cop 29 talks this year — consolidating itself as a climate leader as it prepares to host Cop 30 next year. The country has set fighting climate change as one of its G20 presidency priorities. It called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and foreasier access to climate funds.Brazil is also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. Progressing the painstakingly slow reform of multilateral development banks (MDBs) is important for Brazil. The G20 finance ministers noted in July an MDB roadmap, to be released in October, is a "key deliverable under the Brazilian presidency". MDB reforms, including aligning funding with climate goals and improving access, are also at the heart of finance discussions ahead of November's Cop 29 in Azerbaijan, and with the G20 conclusions overlapping with the climate talks, decisions made in Brazil could help shape outcomes in Baku. At G20 meetings, Brazil also proposed developing climate disaster prevention tools, reached climate pacts with the US, the UK and France, and began plans to launch a new Amazon fund. The country hopes to consolidate its climate leadership ahead of Cop 30, which it is hosting in Belem in 2025. It will capitalise on steady reductions in deforestation in the Amazon rainforest over the past two years and increased adoption of renewable energy to foster higher global climate ambitions. The government is already working on an update of its nationally determined contribution (NDC) climate plan, due early next year. Non-governmental organisations have called on Brazil to slash CO2 emissions by 92pc from 2005 levels by 2035 to 200mn t of CO2 equivalent (CO2e)/yr. NGOs also want a more ambitious 2030 target of 400mn t of CO2e/yr — the NDC currently requires emissions to fall to 1.2bn t CO2e/yr. Preliminary data from Brazil's national institute of space research indicate deforestation fell by nearly 46pc over August 2023-July 2024. Environment minister Marina Silva estimates this cut 250mn t of CO2e emissions in 2023 alone. The final overall 2023emissions data should show another sharp decline, bolstering Brazil's position as a global leader in forest conservation. The country recently launched its national policy for energy transition, establishing guidelines involving wind, solar, hydro, biomass, biodiesel, ethanol, green diesel, carbon capture and storage, sustainable aviation fuel and green hydrogen, with energy minister Alexandre Silveira saying it is "an opportunity to boost local production" on all those fronts. Brazil also launched a programme to support production of electric vehicles (EVs), although it failed to set a definitive plan to phase out internal combustion engines. EV sales reached more than 94,000 units sold in January-July — surpassing the 93,930 units sold in all of 2023. The oil producer's challenge But emissions from Brazil's energy sector rose last year, to 427.8mn t of CO2e from 424.3mn t of CO2e in 2022, with transportation remaining the largest contributor and highlighting the need for more aggressive measures to reduce fossil fuel reliance in transportation. And Brazil is steadily increasing oil production, hoping to increase it further in the south and the country's environmentally sensitive equatorial margin. Output could hit 5.3mn-5.4mn b/d by 2029-30, according to government energy research firm Epe. Brazil still wants to start laying the groundwork for Cop parties to transition away from fossil fuels at Cop 30. But Silva insists developed countries must work on eliminating fossil fuel demand first and provide financial support to help developing nations transition do so. By Lucas Parolin Brazil emissions by sector, 2022 % Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop 29 boost key to setting much-awaited 2035 targets
Cop 29 boost key to setting much-awaited 2035 targets
London, 9 September (Argus) — As focus shifts to setting new emissions-reduction targets for 2035 against a backdrop of under-promised and undelivered 2030 goals, November's UN Cop 29 climate talks in Baku, Azerbaijan, will need to provide the much lacking fuel to power the previous summit's ideals. Countries will be expected to submit their next nationally determined contributions (NDCs) to the Paris climate agreement — emissions cut targets, this time for 2035 — in November-February, as part of a cycle that requires countries to "ratchet up" their commitments every five years. Denmark's climate minister Dan Jorgensen said this year forthcoming NDCs "have to be informed by the decisions [at Cop 28] in Dubai and will be measured on their meaning". The global stocktake signed there last year included an energy section calling for "transitioning away from fossil fuels in energy systems", a tripling of renewable capacity by 2030 and for "accelerating action in this critical decade", giving the direction countries need to take in the energy transition. But the agreement has little momentum. Although some countries, including the UK, have signalled they have made a start on their 2035 plans, work remains very much in progress. The UAE, Azerbaijan and Brazil — the so-called Cop presidencies troika — in July encouraged parties to "step up the work" ahead of Cop 29, calling on "early movers" to signal their commitments as early as this month. Among major emitters, the EU has yet to set its 2035 targets, although the European Commission has proposed a goal to reduce greenhouse gas emissions by 90pc by 2040 from a 1990 baseline. The US said it would develop an "ambitious" new plan within the UN deadline. But any developments will hinge on the results of the country's election taking place just days before Cop 29 starts. And China recently unveiled new guidelines, but stopped short of issuing new targets. Shaky foundations Countries will need to increase previous ambition levels significantly for the new targets to be sufficient. Even if all 2030 plans submitted up to 25 September last year were implemented, emissions reductions would still be at least 11bn t of CO2 equivalent (CO2e) short of what is needed to limit global warming to 2°C above pre-industrial levels, and 19bn t of CO2e short for 1.5°C — the temperature goals set out in the Paris Agreement — according to the UN. Australia was the sole G20 member on track to meet its 2030 target for outright emissions reductions as of last October, according to IEA analysis. And only Australia, Canada, Japan, Russia, South Korea, the US, EU, UK and Brazil have outright emissions-reduction targets. Other G20 members are either measuring their emissions against business-as-usual scenarios or capping them at a specified level, which leaves space for further increases. Room for manoeuvre grows ever smaller, with an 80pc likelihood that the average global temperature across one of the next five years will breach the 1.5°C target, according to the World Meteorological Organisation. Last year was the warmest on record, averaging 1.45°C above pre-industrial levels. Cop 29 could be the catalyst needed to step up action, particularly for countries that would struggle financially to implement stricter measures. Parties will agree a new climate finance goal at the summit and resume talks on the outstanding elements of carbon market mechanisms under Article 6 of the Paris deal, another way in which mitigation outcomes and finance can be transferred between regions. But success hinges, as ever, on high levels of co-operation between countries with conflicting interests, something that has already seen Article 6 disagreements rumble on for years. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore’s SP to launch 240MW solar project in China
Singapore’s SP to launch 240MW solar project in China
Singapore, 6 September (Argus) — Singapore's state-owned utility SP plans to start up a 240MW peak (MWp) agrivoltaic project in Guangdong province's Huizhou city, which will be fully operational by the end of this year. MWp refers to the maximum power output potential a solar farm has when reaching ideal conditions. SP expects the project to generate 7.5bn kWh of green electricity over the next 25 years, reduce coal use by 920,000t and avoid 4.46mn t/yr of carbon emissions. The project's solar installation capacity is 240MW, and marks SP's largest solar investment in China, the company said on 5 September. SP has secured 1.45GW of solar projects in China to date, spanning 18 provinces and municipalities. SP in May also partnered with China environmental technology solutions provider Qingdao Daneng Environmental Protection Equipment to invest and build a 90MW aquavoltaic farm in Qingdao city. This will power a green hydrogen facility in Qingdao, likely referring to Chinese refiner Sinopec's 4,500 t/yr facility . The solar project has an investment value of over 76mn Singapore dollars ($58.5mn) and is on track to connect to the grid by the end of the year. SP expects it to produce 162mn kWh/yr of green electricity and reduce carbon emissions by 160,000 t/yr. The operational model will incorporate renewable energy generation, grid integration, demand-side management, and energy storage. SP's first investment in solar assets was in June 2023, for 78MWp of agrivoltaics assets across four agricultural sites in the Dabu county of Meizhou city in Guangdong province. The project will generate 91.3GWh/yr of clean electricity, and reduce coal usage by almost 30,000t, which amounts to cutting more than 91,000 t/yr of carbon emissions. The operational date of this project was not disclosed. SP in May entered a strategic alliance with Shanghai-based CMB Financial Leasing to obtain financing services, which is expected to reach up to 8bn yuan ($1.13bn) over the next three years, to support the firm's deployment of renewable energy solutions in China. The projects will span utility-scale solar farms, distributed solar photovoltaic, energy storage, and district cooling and heating. By Joey Chan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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