Japan maintains coal export support policy
Japan has tightened some conditions but is maintaining its policy to back infrastructure exports for overseas coal-fired power developments.
Japan's environment, trade and industry (Meti), foreign affairs and finance ministries completed the policy review yesterday. The revised infrastructure export policy specifies technology subject to government funding. It also mandates Japan to set decarbonaisation strategies for importing countries.
The new policy enables the government to only finance firms' projects involving cutting-edge technology such as ultra-supercritical (USC) with more than 43pc generating efficiency, integrated coal gasification combined cycle (IGCC), biomass or ammonia co-firing, carbon dioxide capture and storage (CCUS) and carbon recycling that can contain CO2 emissions as much as IGCC.
The new policy also mandates Japan and importing countries to set long-term strategies towards decarbonaisation. But the policy does not specify details of such strategies.
Japan aims to maintain its competitiveness against China and South Korea by fulfilling the coal-fired technology demand of importing countries until they eventually decarbonise their power generation. But the environment ministry does not clarify whether the decarbonaisation goal indicates a complete shift to other fuels such as LNG and renewables, or continuous use of coal-fired units with CCUS or carbon recycling technologies.
The policy continues to limit funding for exports to countries, whose financial situation requires Japanese coal-fired power generation for stable energy supplies.
The old policy enabled Japanese firms to receive government funds for exporting USC or unspecified, more advanced coal technology to countries in dire need of it. It also required Japan to suggest methods to lower CO2 emissions and provide necessary support based on choices of importing countries.
Premier Shinzo Abe's government has been backing overseas investment in coal-fired power projects under an energy policy to tap growth potential in emerging economies.
But Japan has been moving away from coal-fired power generation amid rising global and domestic criticism including environment minister Shinjiro Koizumi's opposition. Japanese banks Mizuho and Sumitomo Mitsui Banking have toughened coal financing policies. Meti announced on 3 July moves to scrap inefficient coal-fired power units in Japan.
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Von der Leyen faces new Green Deal challenges
Von der Leyen faces new Green Deal challenges
The president promises a ‘clean industrial deal', but will need to make compromises over climate policy, writes Dafydd ab Iago Brussels, 19 July (Argus) — Ursula von der Leyen's re-election by the European Parliament as president of the European Commission on 18 July promises to see a doubling down on climate and energy policy, with her 2024-29 mandate stipulating greenhouse gas (GHG) emissions cuts of at least 90pc by 2040 compared with 1990. "I have not forgotten how [Russian president Vladimir] Putin blackmailed us by cutting us off from Russian fossil fuels. We invested massively in homegrown cheap renewables and this enabled us to break free from dirty Russian fossil fuels," von der Leyen says, promising to end the "era of dependency on Russian fossil fuels". She has not given an end date for this, nor specified if this includes a commitment to ending Russian LNG imports. Von der Leyen went on to detail political guidelines for 2024-29. She has pledged to propose a "clean industrial deal" in the first 100 days of her new mandate, albeit without giving concrete figures about how much investment this would channel to infrastructure and industry, particularly for energy-intensive sectors. The clean industrial deal will help bring down energy bills, she says. Von der Leyen told parliament that the commission would propose legislation, under the European Climate Law, establishing a 90pc emissions-reduction target for 2040. Her political guidelines also call for scaling up and prioritising investment in clean technologies, including grid infrastructure, storage capacity, transport for captured CO2, energy efficiency, power digitalisation and a hydrogen network. She plans to extend aggregate demand mechanisms beyond gas to include hydrogen and critical raw materials, and notes the dangers of dependencies and fraying supply chains — from Putin's energy blackmail to China's monopoly on battery and chip raw materials. Majority report Passing the necessary legislation to implement her stated policies will now require approval from EU states and parliament. Unless amplified by Germany's election next year, election victories by far-right parties in France and elsewhere appear not to threaten EU state majorities for specific legislation. Parliament's political centre-left S&D and liberal Renew groups, as well as von der Leyen's own centre-right European People's Party (EPP), have elaborated key policy requests. These broadly call for the continuation of the European Green Deal — a set of legislation and policy measures aimed at 55pc GHG emissions reductions by 2030 compared with 1990. A symbolic issue for von der Leyen to decide on — or compromise on — is that of internal combustion engine (ICE) vehicles. EPP wants to stick to technological neutrality and revise the current mandate for sales of new ICE cars to be phased out by 2035, if they cannot run exclusively on carbon-neutral fuels. The EPP wants an e-fuel, biofuel and low-carbon fuel strategy. Von der Leyen's guidelines reflect the need to gain support from centre-right, centre-left and greens. She says the 2035 climate neutrality target for new cars creates investor and manufacturer "predictability" but requires a "technology-neutral approach, in which e-fuels have a role to play". She has not mentioned carbon-neutral biofuels. It will be impossible for von der Leyen to satisfy all demands in her second mandate. This includes policy requests put forward by the EPP, ranging from a "pragmatic" definition of low-carbon hydrogen and market rules for carbon capture and storage, to postponing the EU's deforestation regulation. EU member states are expected to propose their candidates for commissioners in August, including for energy, climate and trade policy, with von der Leyen's new commission subject to a final vote in parliament in late October. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Trump vows to target 'green' spending, EV rules
Trump vows to target 'green' spending, EV rules
Washington, 19 July (Argus) — Former president Donald Trump promised to redirect US green energy spending to other projects, throw out electric vehicle (EV) rules and increase drilling, in a speech Thursday night formally accepting the Republican presidential nomination. Trump's acceptance speech, delivered at the Republican National Convention, offered the clearest hints yet at his potential plans for dismantling the Inflation Reduction Act and the 2021 bipartisan infrastructure law. Without explicitly naming the two laws, Trump said he would claw back unspent funds for the "Green New Scam," a shorthand he has used in the past to criticize spending on wind, solar, EVs, energy infrastructure and climate resilience. "All of the trillions of dollars that are sitting there not yet spent, we will redirect that money for important projects like roads, bridges, dams, and we will not allow it to be spent on the meaningless Green New Scam ideas," Trump said during the final night of the convention in Milwaukee, Wisconsin. Trump and his campaign have yet to clearly detail their plans for the two laws, which collectively provide hundreds of billions of dollars worth of federal tax credits and direct spending for renewable energy, EVs, clean hydrogen, carbon capture, sustainable aviation fuel, biofuels, nuclear and advanced manufacturing. Repealing those programs outright could be politically difficult because a majority of spending from the two laws have flowed to districts represented by Republican lawmakers. The speech was Trump's first public remarks since he was grazed by a bullet in an assassination attempt on 13 July. Trump used the shooting to call for the country to unite, but he repeatedly slipped back into the divisive rhetoric of his campaign and his grievances against President Joe Biden, who he claimed was the worst president in US history. Trump vowed to "end the electric vehicle mandate" on the first day of his administration, in an apparent reference to tailpipe rules that are expected to result in about 54pc of new cars and trucks sales being battery-only EVs by model year 2032. Trump also said that unless automakers put their manufacturing facilities in the US, he would put tariffs of 100-200pc on imported vehicles. To tackle inflation, Trump said he would bring down interest rates, which are controlled by the US Federal Reserve, an agency that historically acts independently from the White House. Trump also said he would bring down prices for energy through a policy of "drill, baby, drill" and cutting regulations. Trump also vowed to pursue tax cuts, tariffs and the "largest deportation in history," all of which independent economists say would add to inflation. The Republican convention unfolded as Biden, who is isolating after testing positive for Covid-19, faces a growing chorus of top Democratic lawmakers pressuring him to drop out of the presidential race. Democrats plan to select their presidential nominee during an early virtual roll-call vote or at the Democratic National Convention on 19-22 August. By Chris Knigh t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Whitehaven hits 2023-24 coal guidance
Australia’s Whitehaven hits 2023-24 coal guidance
Sydney, 19 July (Argus) — Australian coal producer Whitehaven met its production guidance for its New South Wales (NSW) mines in the 2023-24 fiscal year to 30 June, with managed run-of-mine (ROM) output from its newly acquired Queensland mines also meeting their guidance. Saleable coal production at Whitehaven's NSW-based assets totalled 16.7mn t for 2023-24, up by 6pc on the 15.7mn t recorded last fiscal year and within its guidance for 2023-24 of 16mn-17.5mn t. Saleable output from NSW for April-June was 4.3mn t, 11pc higher than January-March's 3.87mn t and above the year earlier figure of 3.83mn t. Saleable production from Queensland totalled 4mn t, Whitehaven's first quarter since acquiring Australian-Japanese joint venture BHP Mitsubishi Alliance's 12mn t/yr Blackwater and 4mn t/yr Daunia coking and thermal coal mines on 2 April. Queensland coal sales of 3.2mn t for the quarter reflected slippage into July-September because of now resolved, transition-related rail constraints from Daunia, Whitehaven said. A selldown of around 20pc of Blackwater to global steel producers is progressing, the firm reported, without providing further details. The first production and sales have been achieved at the 10mn t/yr Vickery mine , while operations ceased during April at the 2.5mn t/yr ROM capacity Werris Creek mine. Whitehaven's overall unaudited unit cost guidance, excluding royalties, for NSW in 2023-24 was A$114/t ($76/t), above the guidance range of A$103-113/t because of lower production at Narrabri and underlying inflation. Capital expenditure was A$380mn, below the 2023-24 guidance of A$400-480mn. The Argus high-grade 6,000 kcal/kg NAR price averaged $133.46/t fob Newcastle and the 5,500 kcal/kg NAR coal price $88.47/t during April-June compared with $126.74/t and $93.85/t respectively for January-March. Whitehaven's full-year results will be published on 22 August. By Tom Major Whitehaven results Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 Volumes (mn t) Managed coal production 8.3 3.9 3.8 Managed coal sales 7.3 3.8 3.9 Managed coal stocks 2.7 1.0 1.5 Coal sales revenue mix (%) Metallurgical coal 59 13 5 Thermal coal 41 87 95 Prices achieved ($/t) NSW average 137 136 177 Queensland average 180 Source: Whitehaven Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US gas producers may struggle to meet LNG demand
US gas producers may struggle to meet LNG demand
New York, 18 July (Argus) — US natural gas producers looking to become the primary suppliers to increasingly dependent overseas markets may still need to overcome tight pipeline capacity, volatility in oil markets and even growing competition from the US power sector. Large producers such as EQT and Chesapeake Energy are banking that the rapid buildout of LNG export capacity will connect the US to higher-priced markets and provide an outlet for a glut of US supply. At the same time, European buyers are depending on US gas to help wean the continent off Russian supplies since the Russia-Ukraine war broke out in 2022. But questions remain about the ability of US producers to feed the rapid expansion. The US already leads the world in LNG exports and is on pace to double that capacity later this decade. US baseload LNG export capacity was forecast to increase to 21.1 Bcf/d by the end of 2027, about one fifth of today's total lower-48 US gas production, according to the US Energy Information Administration (EIA). By 2030, Shell expects US LNG production will meet about 5pc of global gas demand and 30pc of global LNG demand. But to satisfy a world that much more reliant on US shipments of gas, US producers have to significantly grow output and build the pipelines needed to connect subterranean shale basins to the US Gulf coast, where almost all the US liquefaction capacity will be located. East Daley Analytics director Jack Weixel said regulatory challenges to permitting those pipelines threaten the US' ability to rapidly boost its LNG exports regardless of who is elected president in November. Growing pains There are unique challenges to raising production in all three of the US' biggest gas-producing formations — the Appalachian basins, the Permian basin of west Texas and southeast New Mexico, and the Haynesville shale of east Texas and northern Louisiana. In Appalachia, developers have almost entirely lost faith in their ability to secure the permits necessary to build new interstate pipelines, so incremental LNG demand will probably not be met by Appalachian gas. The Permian is the US' most prolific oil field, making it an unreliable associated gas producer; a dim outlook for crude prices would mechanically slash gas output. And in the less mature Haynesville, there are "a lot of open questions on how deep that inventory is and how much (it) can actually grow," Citi equity analyst Paul Diamond said. The threat to building new pipelines is not solely the domain of regulators, either, but can even come from within the industry itself, as US midstream giant Energy Transfer has shown over the past year by trying to block several new pipelines out of the Haynesville. Some of Energy Transfer's opponents have warned the legal dispute could hamper the gas production growth needed in the Haynesville to meet the US' coming LNG boom. Permitting aside, some analysts consulted by Argus expressed concern about the integrity of the US gas pipeline network itself, whether due to accidents or ransomware attacks, such as that which targeted the Colonial oil products pipeline in May 2021, disrupting fuel deliveries into the eastern US. Powerful competition Meeting booming LNG demand could be even harder if domestic gas needs exceed expectations. Gas producers and power generators eager to serve data centers running emergent artificial intelligence software have indicated that might be the case. EQT, the largest US gas producer by volume, in its most aggressive data center build-out scenario envisioned an 18 Bcf/d (510mn m³/d) increase in gas demand to generate electricity through 2030, while US gas pipeline operator Kinder Morgan forecast an increase between 7-10 Bcf/d. Goldman Sachs and consultancy Enverus forecast more modest increases of 3.3 Bcf/d and 2 Bcf/d, respectively. The US power sector consumed a record-high 35.4 Bcf/d of gas in 2023, the EIA said. About 43pc of US utility-scale electricity was generated by gas. EQT may be biased. But if its forecast is accurate, US gas producers may not be able to meet all that new demand while also exporting double what the US is exporting today, FactSet analyst Connor McLean said. In that case, a high-demand scenario like EQT's could leave the US gas market undersupplied, boosting US gas prices and closing the spot price arbitrage between US pipeline gas and global LNG, which has mostly been wide open for years. In response to elevated prices at the US gas benchmark, Henry Hub, overseas buyers might find themselves canceling US cargoes — if their supply contracts allow for it — eating the requisite liquefaction fee and taking delivery of a cargo from Qatar or Russia instead. Not so fast The caveat to risks of an undersupplied US gas market is that official timelines of when LNG export terminals are expected to enter service on the US Gulf coast may be overly optimistic. Texas' planned 18.1mn t/yr Golden Pass LNG delaying first LNG on the heels of its lead contractor going bankrupt is just one recent example of this. "All that does is give producers a little bit more time to get production to where it needs to be," Weixel said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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