Trump to impose escalating tariffs on Mexican imports
The US will impose a 5pc tariff on "all goods" from Mexico starting on 10 June and ratchet the duties up to 25pc by October unless Mexico reduces substantially the number of migrants crossing into the US illegally, President Donald Trump said yesterday.
The decision would impose tariffs on energy imports that last year were worth $13bn, included 665,000 b/d of crude and 53,500 b/d of products, according to government data. Trump announced the tariffs last night on Twitter, shifting his longstanding complaints over illegal immigration into a new trade dispute with Mexico that would slap tariffs on imports that reached $346.5bn in 2018.
Trump warned that if Mexico fails to take action to "dramatically reduce or eliminate" illegal border crossings by immigrants, he will raise the tariff to 10pc on 1 July, 15pc on 1 August and a final rate of 25pc on 1 October. The levies would be imposed using the 1977 International Emergency Economic Powers Act, which grants the president broad powers to regulate commerce after declaring a national emergency.
If Mexico retaliates, it could impose countervailing duties on US goods exports that reached $265bn last year, including $34bn of crude and petroleum products and $18bn worth of plastics. US exports of crude and products to Mexico last year averaged 1.2mn b/d, while natural gas exports averaged 5.7 Bcf/d through pipelines and LNG, according to US Energy Information Administration data.
Trump's tariffs could create new hurdles to ratification of the US-Mexico-Canada trade agreement, which would replace the existing North American Free Trade Agreement. Mexican president Andrés Manuel López Obrador, who before the tariffs were announced said he would call a special legislative session to ratify the trade deal, told Trump that issues with immigration would not be solved with "duties or coercive measures."
"Please, remember that I do not lack valor, that I am not a coward nor timorous but rather act according to principles," Lopez Obrador, known as AMLO, said.
Trump less than two weeks removed a 25pc duty on imported Mexican and Canadian steel. That allowed a coordinated push this week by US, Mexico and Canada to ratify the agreement. Trump's administration yesterday sent a trade deal notice to Congress, starting a 30-day clock before the White House can ask lawmakers to approve the deal.
But even before yesterday's announcement, it was unclear if Trump could garner enough support in the Democratic-controlled US House of Representatives to ratify the trade deal. US House speaker Nancy Pelosi (D-California) said the administration's decision to send the trade deal before Democrats finished work on it was "not a positive step." Pelosi wants new enforcement mechanisms that could require renegotiating the deal.
The trade agreement was expected to boost US GPD and employment but have little effect on the energy sector, aside from reducing duties on some commodity imports such as heavy oil from Canada, according to an analysis the US International Trade Commission published last month.
Trump has taken an optimistic tone on prospects for ratification. The trade deal is something that "everybody wants, I think. It is all done," Trump said on 27 May. US vice president Mike Pence yesterday said the administration would make "energetic efforts" to move the agreement through Congress this summer.
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South Korea to require use of SAF for flights from 2027
South Korea to require use of SAF for flights from 2027
Singapore, 30 August (Argus) — South Korea said it plans to require all international flights departing from its airports to use a mix of 1pc sustainable aviation fuel (SAF) from 2027. This comes as more countries are adopting SAF mandates in accordance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Singapore earlier this year announced a 1pc SAF blending mandate from 2026 , with plans to increase to 3-5pc by 2030, subject to global developments and wider SAF availability and adoption. The Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport announced the 'SAF Expansion Strategy' on 30 August, which includes a target for South Korea to capture 30pc of the global blended SAF export market. While not explicitly stated in the statement, some South Korean refineries expect co-processed SAF to be allowed to meet the country's mandate, sources said. This is important as the country already produces small quantities of SAF via co-processing at existing refining facilities, with three of South Korea's four domestic refineries planning to produce SAF through co-processing by the end of this year . Key strategies The ministries outlined three key strategies to achieve the SAF consumption target — gradual expansion of domestic SAF demand, ensuring a stable domestic supply capacity, and establishing a SAF-friendly legal and institutional environment. Airlines can already refuel with SAF at Korean airports, making South Korea the 20th country to do so as part of their plan to increase domestic SAF demand. The country had tested six flights using 2-4pc imported blended SAF between South Korea and Los Angeles since August 2023. An incentive system is being developed to encourage public and private adoption of SAF, with benefits such as preferential allocation of transport rights, reduced airport facility usage fees and the introduction of airline carbon mileage system for passengers and other benefits. A mid- to long-term roadmap for the gradual expansion of domestic SAF demand will be prepared in early 2025, the ministries said. The country's strategy to secure stable domestic supply capabilities includes considering investment support for domestic SAF production such as tax credits. South Korea's four domestic refineries already plan to invest 4 trillion won ($3bn) in renewable fuels, including SAF by 2030, the ministries said. The government estimates a Hydrotreated Esters and Fatty Acids (HEFA) SAF plant with a production capacity of up to 250,000 t/yr will require an investment of approximately W1 trillion. The supply-side strategy also aims to ease regulations on waste recycling to increase the availability of domestic feedstocks for SAF production. Another strategy is to diversify feedstock and SAF production technology options, with pre-testing expected later this year. The government plans to explore alternative feedstock like microalgae and production pathways such as e-SAF, with a view to developing supply chains. South Korea plans to establish a national standard, certification and testing method for SAF with preparation planned for December 2024. By Deborah Sun Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Libyan crude production slips below 600,000 b/d
Libyan crude production slips below 600,000 b/d
Dubai, 30 August (Argus) — Libya's crude output has fallen to below 600,000 b/d, less than half what the country was producing just a month ago, according to figures reported by state-owned oil company NOC. Production has plummeted in recent days after Libya's eastern-based administration announced a blockade on oil output and exports in response to moves by its rival, the Tripoli-based Presidential Council, to replace the central bank governor. Libya produced 591,024 bl on 28 August, NOC said, down from 783,422 bl on 27 August and 958,979 bl on 26 August, NOC said. Production is almost certain to have fallen further on 29-30 August. It represents a more than halving of output in the space of just a month. Production stood at 1.28mn bl on 20 July, NOC said, while Argus assessed the July average at 1.2mn b/d. Total losses over 26-28 August amounted to around 1.5mn bl, worth just over $120mn. NOC said. All of Libya's eastern oil terminals — Es Sider, Ras Lanuf, Zueitina, Marsa el Hariga and Marsa el Brega — received instructions to stop operations at 15:00 local time on 29 August, according to port agents in the country. Some tankers have managed to load crude since the blockade was announced at the start of the week. The New Amorgos and Ohio loaded at Zueitina and Es Sider, respectively, and have since sailed from the country. Five more tankers were scheduled to load crude in the country from today, according to Kpler tracking, four of them in the east. The clash between the rival east and west political factions in Libya had been brewing for over week before the blockade announcement. The eastern-based Libyan National Army (LNA) has imposed several politically motivated oil blockades in the past few years. The LNA ordered the shutdown of the El Sharara field earlier this month, resulting in the loss of around 250,000 b/d of output. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia's Qantas records higher fuel costs in 2023-24
Australia's Qantas records higher fuel costs in 2023-24
Singapore, 30 August (Argus) — Australian airline Qantas Airways recorded a higher fuel bill in the 2023-24 fiscal year to 30 June, as more flights, sustainable aviation fuel (SAF) expenses and carbon offset programmes weighed on costs. Qantas saw its fuel costs rise by 17pc from a year earlier to A$5.32bn ($3.62bn) in 2023-24, according to the company's full-year financial results released on 29 August. The airline group's passenger carrying capacity was up by 21pc on the previous year, with growth in domestic and international capaicty. This saw the group's overall fuel consumption grow to 29mn bl (79,000 b/d), or 18pc up on the previous year. Qantas expects fuel costs in the first half of 2024-25 to remain stable from a year earlier at about A$2.7bn, including hedging and gross carbon costs, with the group forecasting to consume 15.6mn bl of fuel, including SAF. Qantas forecasts domestic group capacity to rise to 104pc of pre-Covid 19 pandemic capacity in the first half of 2024-25. Its international capacity guidance, excluding Jetstar Asia, is expected to rise by about 16pc from the previous year to achieve 102pc of pre-Covid levels in the first half. The group's passenger carrying capacity, measured by available seat kilometres (ASKs), was up on a year earlier by 21pc to 141mn ASK by 2023-24, although this was still about 93pc of pre-Covid levels. Qantas has agreements to offtake SAF, renewing its agreement to buy SAF for flights out of London Heathrow and doubling the size of its corporate customer SAF programme in 2023-24. But the group saw its 2023-24 profit fall, with underlying profit before tax down by 16pc on the previous year to A$2.08bn. By Cara Wong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India lifts curbs on use of sugarcane juice for ethanol
India lifts curbs on use of sugarcane juice for ethanol
Mumbai, 30 August (Argus) — The Indian government is allowing sugar mills and distilleries to use sugarcane juice and sugar syrup to produce ethanol during the November 2024-October 2025 supply year. The government in December last year halted the use of sugarcane juice and sugar syrup for ethanol production in the 2023-24 supply year, as insufficient rainfall in key growing regions led to a surge in domestic sugar prices and a shortage of the sweetener. Sugar mills and distilleries can also produce ethanol from B-heavy and C-heavy molasses. The food ministry's order added that it will, in co-ordination with the oil ministry, periodically review the diversion of sugar to ethanol production in relation to the production of sugar in the country to ensure the availability of sugar for domestic consumption throughout the year. The government also allowed the Food Corporation of India to sell rice to distilleries for ethanol production during August-October but capped the limit at 2.3mn t of rice. India had suspended supplies of excess rice to distilleries for ethanol production in July 2023 because of food availability and concerns about rising prices. Distilleries will be allowed to load rice during August-October subject to allocation of ethanol to the distilleries by oil marketing companies, the government order said. Of the total ethanol used for blending in gasoline in India, around 61pc comes from B-heavy molasses, 20pc from sugar syrup, 11pc from surplus rice, 6pc from damaged food grains and maize and 2pc from C-heavy molasses. India has a set a goal to increase ethanol blending in gasoline to 20pc by 2025, as part of efforts to reduce its dependence on crude imports. Ethanol blending in gasoline was 13.3pc during November 2023-July 2024 and 15.8pc during July 2024, oil ministry data show. Oil marketing companies buy ethanol from ethanol producers like sugar mills and distilleries to blend with gasoline. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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