Cop: Sweden pledges GCF, loss and damage finance

Spanish Market: Emissions
14/11/24

Sweden has committed to provide 8bn Swedish kronor ($763mn) for the UN's Green Climate Fund (GCF) and a further SEK200mn ($18.1mn) to the UN loss and damage fund.

The loss and damage fund seeks to address the irreversible and unavoidable effects of climate change in developing countries. The fund is now ready to receive contributions — all of which are voluntary — after the World Bank and the Philippines officially became its secretariat and host country, respectively, on 12 November.

Sweden's contribution takes the total finance pledged to more than $720mn. The fund is expected to start financing projects next year.

And the country's commitment to the GCF takes that fund's latest replenishment to more than $13.5bn. The GCF is the world's largest climate fund, with a portfolio of almost 300 projects across 133 developing countries.

The UN Cop 29 climate conference started on 11 November and runs to 22 November. Governments and banks typically use the summit's themed ‘finance day' — today — to make concrete pledges of funding. But these are so far largely absent this year, although a group of ten multilateral development banks yesterday estimated an increase in their climate financing to $170bn/yr by 2030.

Most countries are focused on reaching agreement on the new overarching climate goal, known as the new quantified collective goal (NCQG).

By Georgia Gratton

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14/11/24

Cop: EU ETS volatility problem for corporate CCS case

Baku, 14 November (Argus) — Price fluctuations in the EU emissions trading system (ETS) make it difficult for carbon capture and storage (CCS) projects to attract finance, delegates at a UN Cop 29 climate conference side event in Baku, Azerbaijan, heard today. Fluctuations in the EU ETS price make it more difficult to model the support provided to CCS projects through avoided compliance costs, law firm Latham & Watkins partner Jean-Philippe Brisson said. These ups and downs are "very difficult for corporates", Japanese bank MUFG director Yukimi Shimura said. The benchmark front-year EU ETS contract has closed at an average of €66.20/t ($69.82/t) of CO2 equivalent (CO2e) so far this year in Argus assessments, compared with €85.30/t CO2e last year. While carbon pricing is an "absolute must" for CCS, if ETS cost avoidance is your only revenue stream it is very difficult to convince financials or board members to support projects, Swiss cement major Holcim vice president Pavan Chilukuri said, as the long-term viability of projects is not guaranteed. Additional funding is therefore needed to accelerate project implementation, Chilukuri said. This could be in the form of revenues from carbon dioxide removal credits — generated when plants run on biogenic energy and the carbon captured — or carbon contracts for difference. The CCS hub concept — where a number of sites capturing CO2 are located near each other to make use of the same transportation and storage infrastructure — can also help to limit costs, he said. But hubs come with their own cross-chain risks, Shimura said, including uncertainty surrounding liability for issues such as delays. The UK government — which is developing two CCS clusters — is doing an "excellent job" to minimise such risks, Shimura said. But more needs to be done in the US and Asia, with a role to be played by governments, she said. Most CCS activity remains concentrated in the US because incentives there are very strong and fixed for 12 years, Brisson said, referring to the $85/t tax credit for CCS offered under the country's Inflation Reduction Act. But even this is now "not good enough", Shimura said, as inflation has pushed costs up since the figure was set. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: ADB, Kazakhstan tie up on early coal retirement

14/11/24

Cop: ADB, Kazakhstan tie up on early coal retirement

Singapore, 14 November (Argus) — The Asian Development Bank (ADB) and Kazakhstan signed an agreement at the UN Cop 29 summit in Baku, Azerbaijan on 13 November to collaborate on the possible early retirement of a coal plant in Kazakhstan. The ADB and Kazakhstan's Ministry of Energy signed the agreement to work on a pilot transaction to reduce the country's greenhouse gas (GHG) emissions, possibly through decommissioning or repurposing a pilot coal plant for renewables or other low-carbon energy technologies. The partners will conduct a feasibility study to identify which plant among a selection of coal-fired power generation, combined heat and power plants, and heat-only boilers could be viable for early retirement. The parties also agreed to analyse the impact that the early decommissioning of the plant could have on Kazakhstan's power and heat supply, and will work together on developing the country's renewable energy generation capacity, and promote regional energy trade. The agreement comes under the ADB's Energy Transition Mechanism, which aims to support the shift away from coal-fired power plants. Kazakhstan is estimated to be the eighth-largest consumer of coal worldwide, with some 25bn t of reserves, said the ADB. About 70pc of the country's electricity is produced from coal, according to the IEA. The country earlier this year projected that it will use 8.6mn t of thermal coal for its heating season this year. State-run Kazakh Invest announced in October that Chinese companies plan to invest billions of dollars in Kazakhstan's coal sector, including the construction of a power plant, even as the country plans to develop new gas fields with a total production capacity of 1bn m³/yr, to switch away from coal for power generation and domestic consumption. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: French energy minister cancels visit to Baku

13/11/24

Cop: French energy minister cancels visit to Baku

London, 13 November (Argus) — French energy minister Agnes Pannier-Runacher on Wednesday cancelled her planned visit to the UN Cop 29 climate summit in Baku, over what she called host Azerbaijan's "unacceptable remarks" on France and Europe. The minister had planned to arrive in Baku on 20 November, to take part in negotiations in the second week of the conference. The French president was not represented in high-level meetings this week, for the first time since the Cop 21 conference in Paris in 2015. "The direct attacks against our country, its institutions and its territories are unjustifiable," Pannier-Runacher told the French senate this afternoon. Azeri president Ilham Aliyev today raised "the so-called overseas territories of France and the Netherlands," while addressing a summit of leaders of small island states. The voice of the populations of the two countries' overseas territories are "often brutally suppressed by the regimes in the metropolis," he said. Aliyev criticised France's response to unrest and protests in the French overseas territory of New Caledonia earlier this year. He called the European parliament and Parliamentary assembly of the council of Europe "symbols of political corruption," and said they shared responsibility with French president Emmanuel Macron for deaths during the events. "Azerbaijan is instrumentalising the fight against climate change for an unworthy personal agenda," Pannier-Runacher said. "It is ironic that Azerbaijan, a repressive and liberticidal regime, is giving lessons in human rights," she said. And the minister criticised Azerbaijan's statements on fossil fuels. President Aliyev yesterday called oil and gas a "gift of god," and said producer countries should not be blamed for supplying market demand. French negotiating teams will work as usual at the conference, with her support from France, Pannier-Runacher said. "We will continue to advocate for the highest level of ambition in the implementation of the Paris Agreement, of which we are the guardians, ten years after its achievement," she said. France had hoped to keep its long-running diplomatic dispute with Azerbaijan under wraps during this Cop. Pannier-Runacher's visit was planned in a climate optic, rather than a bilateral one, with the intention of keeping the two countries' link to the side, a member of the minister's cabinet told Argus last week. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

No sign of peak in CO2 from fossil fuels: Report

13/11/24

No sign of peak in CO2 from fossil fuels: Report

London, 13 November (Argus) — Carbon emissions from fossil fuels are projected to hit a fresh record high of 37.4bn t in 2024, with "no sign" that these have peaked, a team of scientists said today in the 2024 Global Carbon Budget report. Total CO2 emissions are projected to reach 41.6bn t in 2024, up from 40.6bn t in 2023, which includes emissions of around 4.2bn t from land-use change, the report found. It also estimates the global carbon budget remaining before the 1.5°C temperature limit set out in the Paris climate agreement is "breached consistently over multiple years". The remaining carbon budget "has almost run out", the report found. There is a 50pc chance that warming will exceed 1.5°C above pre-industrial levels "consistently in about six years", the report found. There is uncertainty around the estimates, largely owed to the effects of other greenhouse gases (GHGs) such as methane and nitrous oxide, it noted. The Paris accord seeks to limit a rise in global temperature to "well below" 2°C above a pre-industrial average, and preferably to 1.5°C. This year is on track to be the hottest on record , the World Meteorological Organisation said on 11 November — the opening day of the UN Cop 29 climate summit in Baku, Azerbaijan. And drought conditions have helped to reverse a recent downward trend in CO2 emissions from land-use change — such as deforestation — in 2024. Those emissions are set to rise in 2024, after falling by 20pc in the past decade, the report found. Permanent CO2 removals from reforestation and planting new trees is "offsetting about half of the permanent deforestation emissions", it added. And the report authors noted that technology-based carbon removals — typically engineered, rather than nature-based — are at current levels only able to account for one-millionth of the CO2 emissions from fossil fuels. Projections for the highest-emitting countries — China, the US and India — are mixed. China's emissions are projected to increase by 0.2pc in 2024, although the report noted that the range means they could decrease. US emissions are set to drop by 0.6pc, while India's are projected to rise by 4.6pc this year. The Global Carbon Budget report — which will be peer-reviewed — is produced annually by an international team of more than 120 scientists. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Brazil aims for 67pc GHG reduction goal by 2035

13/11/24

Cop: Brazil aims for 67pc GHG reduction goal by 2035

Baku, 13 November (Argus) — Brazil energy minister Marina Silva said that the country is aiming to reduce greenhouse gas emissions by 67pc by 2035, compared with 2005 levels, but has failed to explain how oil exploration and production fits in the new ambition. Silva explained today that the country is aiming to reach the top end of its 59-67pc range by 2035, which was shared last week before the UN Cop 29 climate summit in Baku, Azerbaijan. The announcement had raised some doubts from climate experts about Brazil's ambition under its Nationally Determined Contribution (NDC) — climate plan. Silva said today that the range is to account for potential elements that could impact the country's climate plan, such as inflation. "We are focused on having absolute emissions of 850mn CO2e [by 2035]," she said today. "We encourage other countries to having equally ambitious goals." Brazil's new NDC is much more than a figure, Silva said. She described it as a "new paradigm for the social and economic development" of the country. She failed to explain what the new climate goal would mean for oil exploration and production in the country, and Brazil's vice-president Geraldo Ackmin highlighted the potential of Brazil's biofuels industry instead. "Around 85pc of Brazil's fleet is running on flexible engine cars using ethanol," he said. He pointed out to Brazil's potential to lead in sustainable aviation fuels and green hydrogen production thanks to its abundant feedstocks. Responding to Azerbaijan President Ilham Aliyev comments that oil and gas is a "gift of god", Silva said that "gods does give us gifts and we should take them with moderation." "If we have too much sugar we will be diabetic," she said. Some non-governmental organizations (NGOs) said that the new NDC is not in line with limiting global warming to 1.5°C above pre-industrial levels. Brazilian climate think tank Observatorio do Clima criticised the government for not increasing its targets for 2030 and for its failure to announce a plan to end the expansion of fossil fuel production. Oil Change International reiterated that Brazil's goal of being on the "forefront of the global energy transition" is incompatible with its plants to increase oil production over the next decade. Money in trillions Commenting on climate finance negotiations, Silva said that developed economies need to increase their efforts towards delivering financing support to developing countries, and that money needs to be "in trillions". "It is not happening at the speed needed," she added. Cop parties must agree at Cop 29 on a new collective quantified goal (NCQG) — the new finance goal — building on the current $100bn/yr target that developed countries agreed to deliver to developing countries over 2020-25. Brazil's secretary for climate, energy and environment Andre Correa said that developing countries are already frustrated by the fact that the $100bn/yr target was missed. Developed nations surpassed the goal by $15.9bn in 2022, but it was missed in 2020 and 2021, according to the OECD. Some developing countries say it has never been met. Developed countries are calling for a broadening of the contributor base, to include nations whose economic circumstances have changed since the UNFCCC was established in 1992. But Correa said that it would not be fair for rich nations to expect that developing economies contribute in the next finance goal as it is not under the rules of the Paris Agreement. "The discussion has been deviated," he said. "Taking into account that developed countries did not achieve the first attempt, it is reasonable to not ask developing economies to pay." By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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