China aims to start national emissions trading by June

: Coal, Emissions, Metals, Oil products, Petrochemicals
21/03/01

China plans to kick off trading in its first national emissions-trading scheme (ETS) by the end of June, the ecology and environment ministry (MEE) said.

"The construction of the national ETS has come to the most critical stage", MEE minister Huang Runqiu said today. He urged officials involved in the ETS to accelerate testing to ensure the trading system could start running before the end of June.

The national ETS is one of the "core policy tools" to implement China's goals to peak emissions by 2030 and achieve carbon neutrality by 2060, Huang said.

The regulations for the ETS took effect on 1 February. All entities that emitted more than 26,000t of CO2 equivalent (CO2e) in any single year from 2013-19 will be included.

The national ETS centre will be located in Shanghai while the registration system will be in Wuhan, Hubei province. China already operates emissions-trading programmes on a pilot basis in seven cities and provinces. These programmes typically cover eight emissions-intensive industrial sectors — power plants, cement and construction materials, steel, petrochemical, chemical, non-ferrous metal, paper and aviation.

The pilot programmes will initially transfer 5pc of quotas into the national ETS, in the hope that trading volumes will hit 2mn t, Lai Xiaoming, chairman of the Shanghai Environment and Energy Exchange said in January.

"We expect that the eight key emission industries will be included in the national carbon market, and total emissions quotas will reach 5bn t in the 14th five-year-plan period" that runs from 2021-25, Lai said. "China will be the largest carbon emission market in the world", he said. The Shanghai exchange operates one of the ETS pilot projects and is heavily involved in work on the national scheme.

The ETS, which will include all greenhouse gas emissions measured by CO2e, will initially apply mainly to power plants this year. MEE has published guidelines on how emission quotas will be distributed to a total of 2,225 coal- and gas-fired power plants, including manufacturing facilities that have captive power plants. They will receive free carbon emissions quotas covering 70pc the electricity and heat produced in 2018, with actual quotas to be allocated by provincial governments after final adjustments based on actual production levels in 2019-20.

Several refineries are covered, including state-controlled Sinopec's 320,000 b/d Shanghai, 470,000 b/d Maoming Petrochemical and 280,000 b/d Yangzi plants, state-run PetroChina's 200,000 b/d Wepec and 180,000 b/d Jinzhou Petrochemical, state-owned Sinochem's 114,000 b/d Hongrun Petrochemical and the 400,000 b/d private-sector Hengli Petrochemical.

Hengli Petrochemical operates eight 50MW coal-fired power units for its refinery at Changxing in Dalian. The emissions benchmark for single coal-fired units with capacity below 300MW is 0.979 t of CO2/MWh, according to MEE's guidance.

The Shanghai, Yangzi and Maoming refineries have coal-fired capacity of 424MW, 360MW and 200MW respectively.

Ten steelmakers are included in the list, including Baotou Steel, Anshan Steel and Pangang.

China's pilot emissions-trading schemes
	Total volume (t)	Average price (Yn/t)

Guangdong	156	17.8
Shenzhen	58	23.7
Tianjin	14	19.5
Beijing	42	42.2
Shanghai	43	22.3
Hubei	88	22.0
Chongqing	12	6.9
Fujian	11	19.5
Total	424	22.1
Source: Guangdong emissions exchange
Note: Figures up to 22 January, excluding CCER

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24/11/21

Cop: EU, four countries commit to 1.5°C climate plans

Baku, 21 November (Argus) — The EU, Canada, Mexico, Norway and Switzerland have committed to submit new national climate plans setting out "steep emission cuts", that are consistent with the global 1.5°C temperature increase limit sought by the Paris Agreement. The EU and four countries made the pledge at the UN Cop 29 climate summit in Baku, Azerbaijan today, and called on other nations to follow suit — particularly major economies. Countries are due to submit new climate plans — known as nationally determined contributions (NDCs) — covering 2035 goals to the UN climate body the UNFCCC by early next year. The EU, Canada, Mexico, Norway and Switzerland have not yet submitted their plans, but they will be aligned with a 1.5°C pathway, EU climate commissioner Wopke Hoekstra said today. The Paris climate agreement seeks to limit the global rise in temperature to "well below" 2°C and preferably to 1.5°C. Canada's NDC is being considered by the country's cabinet and will be submitted by the 10 February deadline, Canadian ambassador for climate change Catherine Stewart said today. Switzerland's new NDC will also be submitted by the deadline, the country's representative confirmed. Pamana's special representative for climate change Juan Carlos Monterrey Gomez also joined the press conference today. Panama, which is designated as carbon negative, submitted an updated NDC in June. It is planning to submit a nature pledge, Monterrey Gomez said. "It is time to streamline processes to get to real action", he added. The UK also backed the pledge. The UK announced an ambitious emissions reduction target last week. The UAE — which hosted Cop 28 last year — released a new NDC just ahead of Cop 29, while Brazil, host of next year's Cop 30, released its new NDC on 13 November during the summit. Thailand yesterday at Cop 29 communicated a new emissions reduction target . Indonesia last week said that it intends to submit its updated NDC ahead of the February deadline, with a plan placing a ceiling on emissions and covering all greenhouse gases as well as including the oil and gas sector. Colombia also indicated that its new climate plan will seek to address fossil fuels, but it will submit its NDC by June next year . By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: EU says finance draft text not acceptable

24/11/21

Cop: EU says finance draft text not acceptable

Baku, 21 November (Argus) — The latest draft of the text on climate financing presented at the UN Cop 29 climate summit is not ambitious enough on mitigation — reducing emissions — and "clearly unacceptable," EU energy commissioner Wopke Hoekstra said today. Parties must agree at Cop 29, in Baku, Azerbaijan, on a new collective quantified goal (NCQG) — a new climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. The text is the main outcome for the summit. "What we had on our agenda was not just to restate the [Cop 28] consensus but actually to enhance that and to operationalise that," but the text goes in the opposite direction, Hoekstra said. Parties to last year's Cop 28 summit in Dubai made an historic pledge to "transition away" from all fossil fuels. The EU has warned against any backsliding on this pledge . "We cannot accept the view that the previous Cop did not happen," Hoekstra said. A draft text on the mitigation work programme — a process that focuses on emissions reduction — was released by the Cop 29 presidency in the early hours of this morning. It does not mention phasing out or reducing fossil fuels in energy systems, or reference the agreement reached on the latter point at Cop 28 last year. Hoekstra indicated today's text does not provide enough clarity to allow the EU to put a concrete number on the amount of climate finance that should be available. The bloc has insisted the final number for climate financing can come only when other elements, including the structure and contributor base, are settled. But recipient country groups such as the G77 and Like-Minded Developing Countries (LMDC) groups have expressed impatience at the lack of a concrete number. Minor bright spots in the numerous draft texts released overnight include those on Article 6, which governs international carbon credits, Hoekstra said. But the commissioner is "sure there is not a single ambitious country who thinks this is nearly good enough." By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Talks on Article 6 near final agreement

24/11/21

Cop: Talks on Article 6 near final agreement

Washington, 21 November (Argus) — Negotiators at the UN Cop 29 climate summit in Baku, Azerbaijan, appear close to a final agreement on the details of an international carbon market under the Paris Agreement. The ministers leading the final discussions on 21 November released updated texts for Article 6.2 and Article 6.4 of the accord that attempt to bridge the gap on remaining issues. It is not yet clear if these are the final texts, but any work left may only involve some "small tweaks", International Emissions Trading Association (Ieta) international policy director Andrea Bonzanni said. Those two sections of the Paris Agreement govern how countries can use carbon credits to meet their greenhouse gas (GHG) emissions-reduction pledges, known as nationally determined contributions (NDCs). Article 6 aims to help set rules on global carbon trade. EU energy commissioner Wopke Hoekstra called Article 6 one area of the talks "where at least the text is a bit encouraging." "We've always been pleading for more progress on Article 6," he said. "We've stressed the tremendous importance of transparency, predictability, credibility of these items." On the key issue of the Article 6 credit registry, the text reflects the idea of a "dual layer" approach that Singapore environment minister Grace Fu suggested on 20 November . The text calls for the creation of a registry to issue and trade credits that would be run by the UN and would be separate from the Article 6 registry, which would only serve an accounting function. "It looks like they managed to make both sides happy," Bonzanni said. The text also says that the inclusion of any emissions credits — known as internationally transferable mitigation outcome (Itmo) units — in the UN registry does not represent any sort of validation of their environmental integrity, in response to concerns raised by the US and others. "There was a concern that if the Itmos are in a UN registry, they may be seen as automatically having legitimacy or UN endorsement," Bonzanni said. The US should be happy with that language, he added. But the EU got only some of what it has sought over the past year. Most notably, the latest text does not include a definition of a "cooperative approach," essentially what it means for countries to buy and sell emissions units under Article 6. An earlier draft of the text included a definition, but there were concerns that it "could have restrained the markets significantly" and created confusion around certain requirements for when countries authorise Itmos, Bonzanni said. "I believe the presidency did a good job by making tough calls." Ieta is not happy with everything in the text, but at the same time "there is nothing harmful" to trading in it, Bonzanni said. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: New climate finance draft does not bridge divide

24/11/21

Cop: New climate finance draft does not bridge divide

Baku, 21 November (Argus) — The UN Cop 29 presidency has released a new draft text on the key issue of climate finance, but entrenched positions remain with no agreement on an amount, and no explicit reference to reducing fossil fuels in energy systems. The outcome of the finance discussions are inextricably linked to progress on mitigation, or cutting emissions. Developing countries have long said they cannot decarbonise or implement an energy transition without adequate finance. Developed countries are calling for substantially stronger global action on emissions reduction. Countries are working at Cop 29 to decide the next stage of a climate finance goal. Developed countries agreed to deliver $100bn/yr in climate finance to developing nations over 2020-25. The draft, released in the early hours today, streamlines previous iterations. But countries' views on details such as the amount beyond 2025 are set out in separate 'options', illustrating a lack of common ground. The text does not overtly reference phasing out or reducing fossil fuels, although it does call on the fossil fuel industry to align itself with the Paris Agreement and for phasing out inefficient fossil fuel subsidies. It is unclear if there was wide agreement on these points. Countries agreed at Cop 28 last year to "transition away" from fossil fuels. The first option, which roughly covers developing country views, sets out a climate finance goal of upwards of $1 trillion over 2025-35, broken down into provision and mobilisation. The provision element — which developed countries would be called on to provide — is in the billions of dollars, from a $100bn/yr floor, and should be grant or grant-equivalent, according to the draft. Mobilised finance, which could be private finance or even from carbon markets, would make up the rest — although no specific figures are in this part of the draft text. The second option, broadly covering developed countries' position, focuses on the Paris climate agreement that seeks to limit the global rise in temperature to 1.5°C above pre-industrial levels. This option sets a floor of $100bn/yr by 2035 for "collectively mobilising" finance "from a wide range of sources". It outlines a goal of $1 trillion or more for "global finance in climate action… from all sources of finance". The contributor base has long been a point of contention. UN climate body the UNFCCC delineated developed and developing countries in 1992, and the former group has consistently argued that economic circumstances have since changed, requesting a wider contributor base for climate finance. But positions on this appear not to have changed. The first option "invites developing country parties willing to contribute" to do so voluntarily, but says this will not be counted in the official finance goal. The second option notes that developed countries take the lead, but contributions from "countries with the economic capacity to contribute" will be counted. "This is not a text that aims to bridge", non-profit WRI director of international climate action David Waskow said today. He sees "a lot of work to be done". Cop 29 is scheduled to finish on 22 November, but many participants said it is likely to overrun. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Mexico to keep some energy regulator independence

24/11/20

Mexico to keep some energy regulator independence

Mexico City, 20 November (Argus) — Mexico's lower house constitutional affairs commission changed its draft bill on eliminating independent regulators to keep the energy regulatory commission (CRE) independent on technical issues even after the energy ministry absorbs it. In an earlier draft, respective ministries would take over the functions of previously independent regulators. With the change, CRE will become a "decentralized body," said President Claudia Sheinbaum. It will retain technical independence but will no longer be an autonomous regulator able to set its budget, the president added. Sheinbaum did not mention hydrocarbons regulator CNH, which could take up a similar position as CRE. Antitrust watchdog Cofece and telecommunications regulator IFT would become similarly decentralized bodies with technical independence from the economy ministry. Transparency watchdog Inai will disappear but a new anticorruption ministry will take over its functions. Inai in recent years has forced state-owned oil company Pemex to release more detailed data about harmful emissions and fuel theft, among other issues. Mexico's independent regulators and watchdogs still formed part of the 2025 budget proposal the government revealed this week. The actual independence of Mexico's energy regulators has been questioned since the previous government, as the number of permits granted by CRE to private companies has dropped in favor of state-owned companies . Critics have raised concerns regarding the bill, arguing it will destabilize Mexico's balance of power and undermine investor confidence. The proposal also fueled concerns that this change could weaken Mexico's standing in the 2026 review of the US-Mexico-Canada free trade agreement (USMCA), as the US and Canada may see the exit of independent regulators as a risk to their business interests in Mexico. Sheinbaum said she met with US president Joe Biden and Canadian president Justin Trudeau during the G20 summit and discussed the importance of the USMCA. She did not mention any concerns the trade partners had regarding the bill. Morena previously tried to absorb the independent regulators early on during the previous administration. The ruling party saw its efforts strained because it lacked the two-thirds supermajority required to pass constitutional changes. Morena and its allies are now expected to secure the votes swiftly, as they have passed other constitutional reforms in the previous weeks. By Cas Biekmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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