Cop: Korea’s Plagen plans Azeri green methanol plant

Spanish Market: Biomass, Emissions, Petrochemicals
15/11/24

South Korean clean energy firm Plagen has signed an initial agreement to develop a green methanol production plant near the port of Baku, Azerbaijan.

Plagen expects that the plant, which it described as Azerbaijan's first green methanol facility, will produce 10,000 t/yr of the fuel by 2028. It will use Plagen's technology, the firm said at a side event at the UN Cop 29 climate summit today.

The methanol will be produced from agricultural waste and wood waste, including hazelnuts shells and almond shells, which will be sourced from Azerbaijan, Plagen chief executive officer John Kyung said. The production process yields 96t of methanol from 300t of biomass.

The produced methanol will be used as bunker fuel, and contribute Baku port's goal to reach "carbon neutrality" by 2035 amid increased traffic through the Trans-Caspian International Transport Route, as ships seek alternatives to the fraught Suez Canal route.

Kyung said today that the firm also has plans to produce green methanol at Indonesia's Batam to supply as bunker fuel to Singapore, the biggest bunkering port in the world.

Plagen also expects 32,000 t/yr of green methanol production by 2027 at a plant in Taebaek, South Korea. This is up from 10,000 t/yr as previously planned.

By Tng Yong Li

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26/12/24

Viewpoint: Unified CO2 market remains in distance

Houston, 26 December (Argus) — Washington state's carbon market enters 2025 on steadier ground than it stood on for much of the past year, but still faces hurdles before it is part of a larger North American market. Washington's cap-and-invest program has weathered a year of highs and lows between advancing its ambitions to link with the Western Climate Initiative and operating through much of the year under threat of repeal in the November state elections. The state Department of Ecology director Laura Watson began the state's quest to link with the WCI last year , as regulators looked to the larger, more liquid market to potentially temper the higher-than-expected prices over the first year of the market in 2023. Washington Carbon Allowances (WCAs) for December 2023 delivery surged as high as $70/t last year, according to Argus assessments. But the state has clinched several wins for its program this year. State lawmakers were able to pass a bill to smooth out several areas of potential incompatibility with the WCI earlier this year, along with California and Quebec agreeing to move forward into formal linkage talks in March . But a repeal effort, initiative 2117, seeking to remove the state's cap-and-invest program dampened prices and forward movement on linkage since January. WCAs for December 2024 delivery fell to the lowest price to date for the program at $30.25/t on 4 March, according to Argus assessments, as uncertainty over the future of the program quieted market participation. State voters backed the cap-and-invest program in November with 62pc against the repeal effort, but months of uncertainty has cost the state time and linkage progress as the WCI awaited the November results. Additionally, while Washington started its own linkage rulemaking in April to align the program with changes planned for the WCI, finishing it requires the joint market first finalize its own changes. The linkage logjam has left market participants feeling that the state's momentum is stalled for the moment, even as perception of the state's eventual joining remains a question of "when" not "if." Ecology says it remains in communication with the WCI members and is evaluating the impact of California's new rulemaking timeline. California has indicated over this year that it does not intend to focus fully on linkage until its current rulemaking is complete. Ecology estimates it will adopt its new rules in fall 2025, with the earliest the state could expect a linkage agreement in late 2025. Washington must still complete further steps required by state law before any linkage agreement can proceed, including an environmental justice assessment and a final evaluation of a potential joint market under criteria set by its Climate Commitment Act, along with public comment. California and Quebec must also conduct their own evaluations to comply with respective state and provincial laws. If this timing works out, Ecology would be part of joint auctions starting in 2026. Compounding the process is the potential threat posed by incoming president-elect Donald Trump, who is likely to try to reverse major environmental regulations and commitments. Trump sought ultimately unsuccessful litigation in his first administration to sever the link between Quebec and California in 2019. The administration pursued the case on the grounds that California's participation violated federal authority to establish trade and other agreements with foreign entities under Article I of the US Constitution, which sets out the role of the federal and state powers in commerce and agreements with foreign powers. Both California and Washington have undergone preparations in recent months to gird themselves for a legal fight with the incoming administration, and that may add further scrutiny to linkage for both states going forward, said Justin Johnson, a market expert with the International Emissions Trading Association. "I think that it will require them to be more vigilant about the process they use and making sure they dot their i's and cross their t's because I think that there will be some folks in the federal administration who would like to see that not happen," Johnson said. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: US PGP prices set to rise in 2025

26/12/24

Viewpoint: US PGP prices set to rise in 2025

Houston, 26 December (Argus) — US spot polymer-grade propylene (PGP) prices are likely to increase into 2025, driven largely by several planned limitations on supply. By mid-December, the US PGP market had the sharpest contango structure between the prompt month and the forward month since Argus began tracking data over 10 years ago. A contango is when the next month's price is higher than the current month's price. On 12 December, December-delivery PGP at the Enterprise Products Partners (EPC) system at Mont Belvieu, Texas, traded at 35.75¢/lb, while January-delivery PGP traded twice at 38.75¢/lb. Argus ' PGP forward curve shows prices rising to over 40¢/lb by the second quarter of next year. Many factors are behind this record 3¢/lb premium for January PGP and the continued increase into mid-year. The first is that spot prices have dipped to their lowest levels since August 2023 on a rare period of no major supply disruption at propane dehydrogenation (PDH) units, which produce on-purpose propylene. Most propylene production in the US comes as a byproduct from refineries or as a co-product from steam crackers. All four US Gulf coast PDH units have been operating without major incident or extended shutdown since the late summer. Since mid-August, only Enterprise's PDH-1 was shut, for two weeks in mid-October, but this was not enough to stop the downtrend in PGP's spot price. US spot PGP prices declined by 40pc from a 12 August near-term peak of 58¢/lb to a low of 35¢/lb on 9 December. A second major factor behind the market's sharp contango is that PGP supply is set to tighten in 2025. Propylene supply will have a structural reduction when LyondellBasell's 264,000 b/d refinery in Houston begins shutting down units in January and completed closes by the end of the first quarter. The company sought to exit the refining business but could not find a buyer for the refinery, which produces 136,000 metric tonnes (t)/yr of propylene. There are no planned additions to US propylene capacity in 2025, and several US crackers that produce propylene as a co-product are set for turnarounds in the first quarter. Meanwhile, propylene demand is set to structurally rise in the second half of 2025, when Formosa's new 250,000 t/yr polypropylene plant in Point Comfort, Texas, is scheduled to come online. A third major factor indicating that US spot PGP prices in December are the lowest they will be for at least several months is seasonality. One market participant said that spot activity to end 2024 is largely characterized by sellers destocking inventory ahead of the state of Texas' ad valorem taxes on inventories. This tends to cause seasonally lower prices in December and then a rise in prices in January as the market restocks inventory. This trend has persisted for the last four straight years. These three major factors — uninterrupted supply to end 2024, supply tightening in 2025, and seasonal buying patterns — all stand behind the sharpest contango into the next year for propylene in 10 years of record keeping. The forward curve for PGP indicates a rise of 5¢/lb between now and the middle of next year. The forward curve, though, does not account for any unplanned shutdowns of PDH units, which happen frequently as PDH units are operationally less reliable than propylene-producing crackers and refineries. In July, the US had three of its four PDH units shut down, taking 2.9mn t/yr of on-purpose propylene capacity offline. Such incidents could spike prices for PGP above the uptrend expected into next year. By Michael Camarda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: California dairy fight spills into 2025

24/12/24

Viewpoint: California dairy fight spills into 2025

Houston, 24 December (Argus) — California must begin crafting dairy methane limits next year as pressure grows for regulators to change course. The California Air Resources Board (CARB) has committed to begin crafting regulations that could mandate the reduction of dairy methane as it locked in incentives for harvesting gas to fuel vehicles in the state. The combination has frustrated environmental groups and other opponents of a methane capture strategy they accuse of collateral damage. Now, tough new targets pitched to help balance the program's incentives could become the fall-out in a new lawsuit. State regulators have repeatedly said that the Low Carbon Fuel Standard (LCFS) is ill-suited to consider mostly off-road emissions from a sector that could pack up and move to another state to escape regulation. California's LCFS requires yearly reductions of transportation fuel carbon intensity. Higher-carbon fuels that exceed the annual limits incur deficits that suppliers must offset with credits generated from the distribution to the state of approved, lower-carbon alternatives. Regulators extended participation in the program to dairy methane in 2017. Dairies may register to use manure digesters to capture methane that suppliers may process into pipeline-quality natural gas. This gas may then be attributed to compressed natural gas vehicles in California, so long as participants can show a path for approved supplies between the dairy and the customer. California only issues credits for methane cuts beyond other existing requirements. Regulators began mandating methane reductions from landfills more than a decade ago and in 2016 set similar requirements for wastewater treatment plants. But while lawmakers set a goal for in-state dairies to reduce methane emissions by 40pc from 2030 levels, regulators could not even consider rulemakings mandating such reductions until 2024. CARB made no move to directly regulate those emissions at their first opportunity, as staff grappled with amendments to the agency's LCFS and cap-and-trade programs. That has meant that dairies continue to receive credit for all of the methane they capture, generating deep, carbon-reducing scores under the LCFS and outsized credit production relative to the fuel they replace. Dairy methane harvesting generated 16pc of all new credits generated in 2023, compared with biodiesel's 6pc. Dairy methane replaced just 38pc of the diesel equivalent gallons that biodiesel did over the same period. The incentive has exasperated environmental and community groups, who see LCFS credits as encouraging larger operations with more consequences for local air and water quality. Dairies warn that costly methane capture systems could not be affordable otherwise. Adding to the expense of operating in California would cause more operations to leave the state. California dairies make up about two thirds of suppliers registered under the program. Dairy supporters successfully delayed proposed legislative requirements in 2023. CARB staff in May 2024 declined a petition seeking a faster approach to dairy regulation . Staff committed to take up a rulemaking considering the best way to address dairy methane reduction in 2025. Before that, final revisions to the LCFS approved in November included guarantees for dairy methane crediting. Projects that break ground by the end of this decade would remain eligible for up to 30 years of LCFS credit generation, compared with just 10 years for projects after 2029. Limits on the scope of book-and-claim participation for out-of-state projects would wait until well into the next decade. Staff said it was necessary to ensure continued investment in methane reduction. The inclusion immediately frustrated critics of the renewable natural gas policy, including board member Diane Tarkvarian, who sought to have the changes struck and was one of two votes ultimately against the LCFS revisions. Environmental groups have now sued , invoking violations that effectively froze the LCFS for years of court review. Regulators and lawmakers working to transition the state to cleaner air and lower-emissions vehicles will have to tread carefully in 2025. By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: US BD demand awaits 1Q rebound as risks loom

24/12/24

Viewpoint: US BD demand awaits 1Q rebound as risks loom

Houston, 24 December (Argus) — US demand for butadiene (BD) is expected to increase in January, but buyer sentiment for the remainder of the first quarter remains uncertain. Inventory restocking in January is expected to draw down excess supply and provide near-term price support, according to market participants. Derivative manufacturers aim to rebuild inventories following earlier-than-normal destocking initiatives this year. Many buyers employ standard inventory control management strategies to avoid paying higher end-of-year inventory taxes, particularly in Texas. Others cut costs to improve year-end financial statements. Domestic demand in February and March is less clear, as market participants question whether the market will rebound from persistently low demand at the end of 2024. US BD prices on a contract basis fell by 12pc during the fourth quarter , owing to weak demand and oversupply. Demand was depressed by BD consumer turnarounds in October, seasonal slowdowns between November-December and trade pressures tied to derivative imports. US tire shipments this year are expected to rise by 2.1pc to 338.9mn units, surpassing the record set in 2021, according to the US Tire Manufacturers Association. However, market participants along with US trade data reference a jump in tire imports from Asia-Pacific. Both Bridgestone and Goodyear have said low-cost tire imports and structural changes in segment profitability across the Americas are eroding their market share, fueling capacity rationalization, asset sell-offs and plant closures in the region. Acrylonitrile butadiene styrene (ABS) is another segment at risk of stronger competition from low-cost, Asia-origin imports. Ineos Styrolution plans to permanently shut down its ABS plant in Addyston, Ohio, in 2025 because the facility cannot compete with imported material. "Over the past few years, we have seen the ABS market become increasingly competitive, particularly with growing competition from overseas imports," Ineos Styrolution chief executive Steve Harrington said in late October. Protectionist trade policies are likely to be a feature of president-elect Donald Trump's second administration, potentially altering business investment decisions and durable goods trade flows. Even if demand does not improve, planned maintenance in the first half of 2025 is expected to tighten BD supplies. A heavy turnaround cycle for steam crackers will concentrate in the first and second quarters, constraining availability of feedstock crude C4. One integrated US Gulf coast producer plans to enforce BD allocations while its assets are offline for planned maintenance. A separate, non-integrated producer has not announced BD sales controls, based on feedback from its customers. This same BD supplier was short on feedstock supplies for parts of this year, with the crude C4 merchant market illiquid in North America. A third producer has scheduled a cracker turnaround starting in January, but no indications emerged that would limit term volumes from its BD unit. Reduced BD supply during cracker maintenance is likely to pull volumes away from the export market until the second half of 2025. Export spot cargoes in the fourth quarter more than doubled from the third quarter, serving as a critical outlet to clear the domestic market of surplus BD supplies, even as lower export prices pressured US margins. By Joshua Himelfarb Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

South Korea to invest $309bn in green finance by 2030

24/12/24

South Korea to invest $309bn in green finance by 2030

Singapore, 24 December (Argus) — South Korea plans to invest 450 trillion won ($309bn) in green finance by 2030, acting president and prime minister Han Duck-soo said on 23 December. The country is also "actively encouraging private investment by upgrading the Korean Green Taxonomy system", Han added. The taxonomy is technical legislation that classifies the industrial carbon and environmental footprint for investors. It aims to promote green finance and prevent ‘greenwashing', with the aim of achieving a sustainable circular economy. The most important issue for the industrial sector, which accounts for about 36pc of domestic emissions, is to transition to carbon neutrality, Han said. South Korea has an "export-driven economic structure with high external dependence", he said, which means international carbon barriers will significantly affect South Korea. This makes decarbonisation key to maintaining competitiveness, he added. South Korea is also responding to the climate crisis through technological innovation. The country's science ministry last week unveiled plans to invest almost W2.75 trillion to develop technology to respond to climate change in 2025. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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