Carbon markets need frameworks, Article 6 progress
International carbon markets need better frameworks both at domestic and international level, and consistent guidance on the role of carbon credits and their legal nature, a report by the World Bank has found.
The report, presented at the World Bank's Innovate4Climate conference in Berlin today, calls for better harmonisation at several levels, including governance structures but also extending to frameworks such as integrity initiatives, independent standards, verification bodies, registers, transaction registries or exchanges.
The World Bank also urges progress on the framework for a new UN-supervised carbon market under Article 6 of the Paris climate agreement at the UN Cop 29 climate conference in November in Baku, Azerbaijan.
Article 6.4 additionally provides for so-called mitigation contribution units, which could be used in the voluntary carbon market for "appropriate claims", the World Bank said.
Greg Murray, founder of the KoKo networks which sell carbon units from projects providing efficient cookstoves to African households, called at the conference today for Europe to show "more leadership" on carbon markets at Cop 29. Article 6 negotiations failed last year to a large degree because of the EU's fears of insufficient environmental safeguards for the more regulated Article 6.4 mechanism.
There was "big enthusiasm" at Cop 28 in Dubai last year about the work carried out by the Integrity Council for the Voluntary Carbon Market (ICVCM) and the Science Based Target Initiative (SBTI) to raise standards, Hania Dawood, contributor to the report and World Bank practice manager for climate finance and economics, said at the conference today. But this enthusiasm has had no impact on the market, Dawood said.
Agreement is still lacking in ongoing Article 6 discussions on key operational issues related to transparency, environmental integrity and the avoidance of double counting of mitigation outcomes.
But the long debates over Article 6 are precisely to ensure the mechanism does not suffer the same fate as the voluntary carbon market, said Swiss climate negotiator Simon Fellermeyer, who has also been a member of the Article 6.4 supervisory body.
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2024 RD production outlook up, 2025 down: EIA
2024 RD production outlook up, 2025 down: EIA
New York, 10 September (Argus) — The US Energy Information Administration (EIA) today upped its forecast for 2024 domestic renewable diesel (RD) production but continued to trim its projections for 2025 as challenging economics for refiners persist. The US is expected to produce on average 208,000 b/d of renewable diesel this year, EIA said Tuesday in its latest Short-Term Energy Outlook (STEO), up by around 1pc from August's forecast. Renewable diesel consumption is expected to hit 237,000 b/d this year, an increase of 1.3pc from the prior month's STEO. But next year, EIA now expects 236,000 b/d of renewable diesel production, down by 3.2pc from the prior forecast and down by 19.7pc from the agency's initial projection in January this year of 294,000 b/d. The agency is also forecasting renewable diesel consumption to reach 255,000 b/d in 2025, a 2.3pc decrease from its estimate last month. Renewable diesel producers have struggled over the last year, as ample supply of fuels used for compliance with government clean fuel programs has helped depress the prices of environmental credits and hurt production margins. More capacity has come online this year — with EIA recently pegging production of renewable diesel and related biofuels like sustainable aviation fuel at an all-time high of 4.9bn USG/yr in June — but uncertainty persists about whether future capacity additions will come on line as planned. EIA also upped its projection for US net imports of renewable diesel, raising its 2024 forecast by 7.1pc to 30,000 b/d and its 2025 forecast by 5.6pc to 19,000 b/d. While a federal tax credit starting next year is expected to discourage biofuel imports, since the incentive can only be claimed for fuel produced in the US, EIA's projections have inched upwards over the course of this year. Biodiesel output target up US biodiesel production this year is expected to average 105,000 b/d, up by around 1pc from August's STEO. US Biodiesel consumption should reach 121,000 b/d this year according to the EIA, down by 0.8pc from the prior forecast. For 2025, EIA raised its outlook for biodiesel production by 5.3pc to 100,000 b/d and for biodiesel consumption by 4.4pc to 94,000 b/d. Today's outlook also includes for the first time more granular data about biodiesel and renewable diesel "that better capture how biofuels are being consumed and the share of total distillate fuel they account for," EIA said. While the agency expects total distillate fuel oil consumption to fall slightly this year, biofuels will account for 9pc of that consumption, up from 8pc last year and 5pc in 2022. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Firms’ short-term climate plans not Paris-aligned: TPI
Firms’ short-term climate plans not Paris-aligned: TPI
London, 10 September (Argus) — 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. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK oil, gas 2030 emissions target 'within reach': NSTA
UK oil, gas 2030 emissions target 'within reach': NSTA
London, 10 September (Argus) — The UK oil and gas sector cut upstream greenhouse gas (GHG) emissions again in 2023 and its 2030 target "appears within reach", the government's North Sea Transition Authority (NSTA) said today. But this is "just one step… and does not diminish the urgency of further abatement", the NSTA said. The UK oil and gas industry in 2021 signed the government's North Sea transition deal, which set offshore production emission reduction targets of 10pc by 2025, 25pc by 2027 and 50pc by 2030, all from a 2018 baseline. The UK upstream oil and gas industry emitted 12.9mn t/CO2 equivalent (CO2e) in 2023, a 3.7pc drop on the year, and 29pc lower than 2018 levels, the NSTA said. Of the decrease in GHG emissions, half came from "actively producing assets" and the other half from assets that had ceased or were approaching the end of production. Absolute emissions fell, but emissions intensity increased on the year in 2023, "as expected in a basin with declining production", the NSTA said. It projected the average emissions intensity for offshore assets at 24kg of CO2e/bl of oil equivalent (boe) in 2023 — up from 22kg of CO2e/boe in 2022. The majority of emissions, at 79pc, were from hydrocarbon combustion for offshore power generation. Flaring and venting accounted for 17pc and 3pc of GHGs, respectively. "Electrification or low-carbon power must play a significant role" in further reducing emissions, the NSTA said. It warned that if electrification is considered "reasonable" for existing developments but has not been implemented, "there should be no expectation that the NSTA will approve field development plans and similar decisions that give access to future hydrocarbon resources on that asset." The organisation also promised "increased scrutiny of assets with high emissions intensity" and said it will publish later this year a list of assets that flare routinely. The amount of gas flared in 2023 was the lowest on record, at 691mn m³, although it dropped only incrementally from the previous year, the NSTA found. The upstream industry's "total production emissions" make up just over 3pc of overall UK emissions, according to the NSTA. The North Sea industry has committed to reducing GHG emissions by 90pc by 2040, from 2018 levels, and to net zero by 2050. The UK has a legally binding goal of net zero GHG emissions by 2050. Overall, upstream emissions make up a relatively small proportion of total GHG emissions from the fossil fuel industry. The UK government in August said it would develop new environmental guidance for oil and gas firms, in light of a recent Supreme Court decision that ruled consent for an oil development was unlawful, as the scope 3 emissions — those from burning the oil produced — were not considered. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Coal loses ground in Brazil's energy mix
Coal loses ground in Brazil's energy mix
Rio de Janeiro, 9 September (Argus) — Brazil's recently launched national energy transition policy barely mentions coal, highlighting the steady decrease of its usage in the country, slipping to just 4.4pc of Brazil's energy mix in 2023, according to energy research firm EPE. Since 2014, Brazilian coal usage has declined steadily, losing 5.7 percentage points of its share of the energy mix. From 2022 to 2023 coal usage fell by 5pc, according to the latest national energy balance report. Brazil's total energy consumption in 2023 grew by 3.5pc from the previous year, reaching 282.5mn metric tonnes of oil equivalent (mtoe). The industrial sector was responsible for 31.8pc of all energy consumption in 2023. Sugarcane bagasse is the sector's main energy source, with a more than a 20pc share. But 11.6pc of Brazil's steel sector still uses coking coal as a feedstock, although that fell by 5pc from the previous year. Natural gas has averaged a 10.4pc share of industrial energy demand over the past 20 years, oscillating between 8.8-11.4pc, according to EPE data, and reached 9.5 in 2023. Overall, renewable energy sources account for 49pc of the Brazilian energy mix, against a worldwide average of 15pc, according to the International Energy Agency data. Brazil's new energy transition policy will involve a flurry of renewable sources, such as wind, solar, hydro, biomass, biodiesel, ethanol, green diesel, carbon capture and storage, sustainable aviation fuel and green hydrogen, mines and energy minister Alexandre Silveira said. By Betina Moura Brazilian industrial energy sources, 2023 pc Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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