Cop 29 president calls for progress on finance

Spanish Market: Crude oil, Emissions, Oil products
10/10/24

The president-designate of the upcoming UN Cop 29 climate summit, Mukhtar Babayev, has urged parties to progress on a timeframe and an amount for the new climate finance goal to be decided at the conference in Baku next month.

At a pre-Cop meeting today, Babayev stressed the need to "take seriously the responsibility for identifying a number over a timeframe and come forward with solutions".

"We cannot afford to leave too much to be decided at the summit," he added.

Cop parties must agree in November on the new collective quantified goal (NCQG) — building on the current $100bn/yr target that developed countries agreed to deliver to developing countries over 2020-25. But there remains a huge divide to bridge between developed and developing nations ahead of Cop 29.

Developed countries have yet to commit to a number for climate finance, while developing nations have for some time called for a floor of at least $1 trillion/yr.

The Cop 29 presidency is seeking to build on "possible convergence on certain elements" to provide a solid foundation to discussions on other parts of the goal, Babayev said. Elements for the formulation of the goal include an amount for the NCGQ, timeframes, scope, sources, as well as accessibility and transparency.

Babayev did not provide details on potential convergence, but some common ground was found during technical discussions on elements such as access and transparency. "Qualitative elements of the goal such as transparency and accessibility are also essential to ensuring that the goal is both fair and ambitious," he said. "The substantive framework for the draft negotiation text" on the NCGQ will be released in the next few days, according to Babayev.

The NCQG is Cop 29's "top negotiating priority", Babayev said, but he also urged parties to turn pledges made last year for the loss and damage fund — which will support vulnerable countries with the irreversible and unavoidable effects of climate change — into contributions.

He said that countries need to "respond to the goal of the UAE consensus [Cop 28 agreement] to transition away from fossil fuels in a just and orderly manner taking into account different national circumstances".

There is "no time for us to allow for anyone to try and backpedal on what we have collectively committed to in Dubai," Cop 28 president Sultan al-Jaber said at the meeting today.

Cop 28 last year ended with an agreement that included transitioning away from fossil fuels and tripling renewable energy capacity globally by 2030. Al-Jaber said that the next NDCs must be aligned with the Paris agreement and the Cop 28 deal to keep 1.5°C — the Paris accord's most ambitious temperature limit — within reach. NDCs "must be economy-wide, cover all greenhouse gases and seize the opportunity of climate action as a driver for sustainable growth", he said.

He recognised the efforts of G7 countries in including references to the Cop 28 agreement in their final communique and that he "was very hopeful that the same would happen at G20" later this year.

G7 countries in May committed to phasing out "unabated coal power generation" by 2035 — putting a timeframe on a coal phase-out for the first time. They also pledged "to transition away from fossil fuels" in energy systems in a just, orderly and equitable manner, accelerating actions in this critical decade, to achieve net-zero by 2050 in keeping with the best available science", which is the language used in the Cop 28 text.

Heads of states and governments in September adopted a pact that also included this wording ahead of the UN general assembly.

By Caroline Varin

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10/10/24

Mexico’s Sep inflation slows with energy prices

Mexico City, 10 October (Argus) — Lower energy prices supported an easing in Mexico's consumer price index (CPI) in September for a second consecutive month. The CPI slowed to an annual 4.58pc in September, down from 4.99pc in August, Mexico's statistics agency Inegi said on 9 October. This was lower than both Mexican bank Banorte's own 4.59pc estimate and its analysts' consensus estimate of 4.61pc. Energy inflation eased for a second month, dropping to 6.9pc from 7.9pc in August and 9.2pc in July, with LPG prices — the largest component — slowing to 14.7pc in September from 16.8pc in August and 25.6pc in July. Seasonal rains, now ending, have largely reversed the price spikes in farm goods caused by extreme drought earlier this year, with fruit and vegetable inflation slowing to 7.65pc in September from 12.6pc in August, making it the first single-digit rate since November 2023. "Despite the positive performance of agricultural items since August, lingering risks could turn them negative again," Banorte said in a note, emphasizing that above-normal rainfall will be needed in the coming months to avoid a return to drought and price spikes next year. For now, Mexican weather agency Conagua still estimates relatively heavy rains in October, but "more adverse" conditions for November and December, with no state forecast to exceed the upper range of historical rainfall. Core inflation, which strips out volatile food and energy, eased in September to 3.9pc from 4pc, moving within the central bank's 2pc to 4pc target range for the first time since February 2021. Inside core, said Banorte, packaged and manufactured goods continue to improve, standing at 2.9pc from 3pc in August. Services also moderated, adjusting to 5.1pc from 5.2pc. "A downward trend in the latter is needed to corroborate additional gains for the core," Banorte said. "This will still take some time, especially given that the margin for additional declines in goods may be running out." The Mexican bank added that within this context, it maintains its estimate for full-year 2024 core inflation to hold to 3.9pc. Though less weighted than core inflation, the bulk of September's easing in the headline was due to non-core inflation, including prices on more volatile items such as fuels and farm goods. Inegi reported non-core moving to 6.5pc in September from 8pc in August. Despite two months of better-than-expected price improvements, Banorte warned that "risks remain," with energy prices susceptible to gains amid "geopolitical tensions in the Middle East and economic stimulus in China." Still, there is "room to adjust gasoline subsidies" to cushion these effects, it added. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Port Tampa Bay begins hurricane recovery: Update

10/10/24

Port Tampa Bay begins hurricane recovery: Update

Adds comments from Florida governor, information on fuel supplies. Houston, 10 October (Argus) — Port Tampa Bay, Florida, docks did not sustain significant damage from Hurricane Milton, the port authority said early today, a positive sign for resuming fuel imports into the storm ravaged state. Some port buildings were damaged and power remains out, according to preliminary assessments, but the port docks appear to have escaped major damage, according to the port authority. Many roads leading to the port remain flooded, but the port's main gates are accessible. Florida governor Ron DeSantis said Thursday that Port Tampa avoided the worst-case scenario in terms of storm surge and that eastern Florida ports on the opposite side of the state from where Milton made landfall appear largely undamaged. The state has 1.5mn USG of diesel and about 1.1mn USG of gasoline available to deploy in its emergency response, DeSantis said. Florida's highway patrol continues to escort fuel tankers making deliveries to gas stations and has completed about 130 escorts after some stations ran dry earlier this week as Floridians stocked up on fuel and evacuated coastal regions. DeSantis said today he expects gas stations to reopen "very quickly, at least that's our hope." Port Tampa Bay officials are working with the US Army Corps of Engineers, US Coast Guard and others to assess landside and seaside operations. There is no currrent timeline for the port's re-opening. More than 3mn Floridians are without power today after Hurricane Milton came ashore south of Tampa Bay late last night as a category 3 storm. Utility crews are assessing the damage from high winds, tornadoes and flooding, and starting to restore power. Nearly half of Florida's supply of petroleum and refined products passes through Port Tampa Bay, the majority via waterborne cargo from the US Gulf coast. Tampa Bay is also the site of major fertilizer operations, including Mosaic's Riverview phosphate plant. Chevron's Tampa refined products terminal remains closed and damage assessments will begin once crews can safely access the facility, a company spokesperson said just after 11am ET today. The company's terminals in Panama City and Port Everglades are operational. Fuel terminal operators at Port Tampa Bay such as Citgo, Kinder Morgan, Global Partners and Buckeye Partners told Argus they are currently evaluating their facilities to determine when they can resume operations. Individual port tenants will decide independently when to restart their own activities. By Cooper Sukaly and Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UN carbon market regulator takes 'agile' approach

10/10/24

UN carbon market regulator takes 'agile' approach

Berlin, 10 October (Argus) — The regulator of the new UN carbon crediting mechanism under Article 6 of the Paris climate agreement decided on key rules this week, adopting an "agile" approach to difficult issues to allow the rules to adapt to "ever-evolving developments in addressing climate change". The Article 6.4 supervisory body decided at its meeting this week in Baku, Azerbaijan, to adopt standards on methodologies and greenhouse gas (GHG) removals open to additional guidance by parties at the UN Cop 29 climate conference in Baku next month. This will allow the supervisory body to review and further improve the standards "whenever necessary" and to "keep up with market developments", it said. The body has requested that the parties meeting at Cop 29 to endorse this approach. The standards will help project developers create and submit methodologies for their projects, to allow them to be registered under the new Paris Agreement Crediting Mechanism (PACM), the group said. Article 6 takes a bottom-up approach to methodologies, allowing project developers to draw up their own methodologies provided they comply with the standard. The standard includes principles such as the downward adjustment of GHG mitigation paths to "encourage ambition over time" and the selection of a baseline against which the mitigation is measured that is below business-as-usual levels. It also includes provisions for equitably sharing the mitigation benefits between the participating countries. This could also be achieved through applying the so-called Sustainable Development Tool adopted at the meeting. The tool, a key objective of which is to set apart the PACM from its predecessor the clean development mechanism's indifference towards environmental and human rights, will require all participants to assess, demonstrate and monitor the environmental and human rights impacts of their projects. Activity participants must also notify the supervisory body of any potential reversal of the achieved mitigation within 30 days of becoming aware of the event. The supervisory body will establish a Reversal Risk Buffer Pool Account in the mechanism registry to compensate fully for avoidable and unavoidable reversals, by cancelling an equivalent amount of buffer Article 6.4 emissions reductions. The supervisory body has tasked experts on the so-called Methodological Expert Panel with continuing their work on various unresolved principles, such as developing a tool for assessing the reversal risk of removals, including the possible application of upper limits and specific risk factors. The supervisory body did not look into the issue of registries at this week's meeting, considered another tricky issue among several outlined by UK department for energy security and net zero head of carbon markets negotiations Dexter Lee at a conference in London this week. But speakers at the event noted a renewed willingness to agree on Article 6 rules this year. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Port Tampa Bay begins hurricane recovery

10/10/24

Port Tampa Bay begins hurricane recovery

Houston, 10 October (Argus) — Port Tampa Bay, Florida, docks did not sustain significant damage from Hurricane Milton, the port authority said early today, a positive sign for resuming fuel imports into the storm ravaged state. Some port buildings were damaged and power remains out, according to preliminary assessments, but the port docks appear to have escaped major damage, according to the port authority. Many roads leading to the port remain flooded, but the port's main gates are accessible. Port Tampa Bay officials are working with the US Army Corps of Engineers, US Coast Guard and others to assess landside and seaside operations. There is no currrent timeline for the port's re-opening. Nearly half of Florida's supply of petroleum and refined products passes through Port Tampa Bay, the majority via waterborne cargo from the US Gulf coast. Tampa Bay is also the site of major fertilizer operations, including Mosaic's Riverview phosphate plant. Chevron's Tampa refined products terminal remains closed and damage assessments will begin once crews can safely access the facility, a company spokesperson said just after 11am ET today. The company's terminals in Panama City and Port Everglades are operational. Fuel terminal operators at Port Tampa Bay such as Citgo, Kinder Morgan, Global Partners and Buckeye Partners told Argus they are currently evaluating their facilities to determine when they can resume operations. Individual port tenants will decide independently when to restart their own activities. By Cooper Sukaly and Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU CBAM application to UK would be ‘political failure’

10/10/24

EU CBAM application to UK would be ‘political failure’

London, 10 October (Argus) — Failing to avoid the application of the EU's carbon border adjustment mechanism (CBAM) to the UK would constitute a dereliction of UK climate policy, delegates at a conference this week heard. The application of the EU's CBAM would be "politically toxic" in the UK, Alistair McGirr, group head of policy and advocacy at utility SSE, told the Carbon Forward conference in London. It would risk trade friction, political issues concerning Ireland and lead to UK exporters effectively paying into the EU budget. "If the EU CBAM applies to the UK we have failed in climate politics," he said. CBAM can therefore be a "useful stick" to encourage the UK to link its emissions trading scheme (ETS) back to the EU's system, McGirr said, which would exempt the country from the mechanism. McGirr is "hopeful" a linking agreement could take place ahead of the EU CBAM's implementation in 2026, with the linkage itself operational by 2028. While the recently-elected Labour government has not yet confirmed it intends to link the systems, they already appear more comfortable working with the EU than the preceding Conservative leadership, McGirr said. They may not have acted yet because they do not want to appear too close to the bloc too quickly, he said, and trust between the jurisdictions will also need to be rebuilt. The obligatory review of the EU-UK trade and co-operation agreement could present an opportunity to restart the conversation, said Beth Barker, senior policy officer at UK sustainable business alliance the Aldersgate Group. But while the risk of trade complications is the "one thing that might really drive linkage" it remains politically very difficult, warned Trevor Sikorski, head of natural gas and emissions at consultancy Energy Aspects. He pointed to the lack of trust between the two sides, the potential for differing levels of climate ambition, and the risk the move could be perceived as giving control back to Brussels. The limited size and liquidity in the UK ETS offers a "vision of the future" for the EU's system, McGirr said, and a link to the UK ETS offers one way of expanding the EU carbon market. Under current rules, the EU ETS supply cap is expected to fall to zero by 2039, effectively allowing no emissions from covered sectors. But this legislation "cannot stand" unless the EU wishes to decarbonise through deindustrialisation, head of climate research at fund manager Andurand Capital Mark Lewis told delegates. Lewis "takes it for granted" the UK ETS will be linked back to the EU ETS "way before 2030", he said, agreeing that the application of the EU CBAM to the UK would constitute a "terrible failure of UK climate policy". The EU carbon market should also expand to include credits issued under Article 6 of the Paris climate agreement, he said. The article sets out the framework for two global carbon trading mechanisms, the rules for which are yet to be finalised . But the EU ETS supply cap will not necessarily actually fall to zero as quickly as feared, European Commission advisor Damien Meadows pointed out, because as other sectors are added to the system the cap will be revised upwards accordingly. "We don't need to panic," he said. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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