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Cop 26 profile: Europe sets climate bar high

  • : Crude oil, Emissions, Natural gas, Oil products
  • 21/10/22

The bloc hopes the summit will see other major emitters deliver concrete plans for net zero, writes Dafydd ab Iago

The EU has dominated global climate talks since the first UN Conference of the Parties (Cop) summit in Berlin, in addition to holding the UN Framework Convention on Climate Change secretariat in the former German capital Bonn. On top of hosting more than half of the Cops since 1995, Europe has become the first major economic region to lay out in detail a policy path towards net zero carbon emissions in 2050.

"Europe needs to lead, so the rest of the world understands where we need to go," EU climate action commissioner Frans Timmermans told EU environment ministers signing off this month on the bloc's negotiating mandate for Cop 26. That self-image of a bloc leading with ambitious headline targets, and detailed EU and national legislation, is key to the EU's negotiating position in Glasgow.

Having surpassed its previous 20pc reduction target set for 2020, the EU submitted confirmation, this May, to the UN of EU-level emission cuts of 3.8pc in 2019 compared with 2018. That is a full 24pc lower than 1990 levels, even before Covid-19 restrictions cut greenhouse gas (GHG) emissions last year. The bloc also updated its nationally determined contribution (NDC) and legally bound itself to carbon neutrality by 2050 and cutting GHG emissions in 2030 by at least 55pc compared with 1990, up from a previous 40pc target (see table).

For Brussels then, Glasgow must force other major emitters, such as China and the US, to deliver with concrete plans rather than vague commitments towards net zero. European Commission president Ursula von der Leyen only sees China's announcement at the UN that it will stop building coal-fired generation abroad or US president Joe Biden's promise to double US international climate finance as "steps in the right direction". While repeating a promise to commit an additional €4bn ($4.7bn) in climate finance in 2021-27, von der Leyen wants "concrete" plans from international partners. The EU brings to Glasgow the highest level of ambition. "We do it for our planet. And we do it for Europe," she told the European Parliament this month.

If altruism does not push other Cop parties into action, the EU is fine-tuning a carbon border mechanism to protect its carbon-intensive industries. The mechanism starts in 2026 with a duty on cement, iron and steel, aluminium, fertiliser and electricity imported to the EU from countries not subject to carbon pricing.

Concrete carbon phase-outs

Polishing the money aspects of the bloc's negotiating position for Glasgow, finance ministers from the EU's 27 member states stress that the "ambitious" updated NDC is being implemented by a package of legislative proposals adopted by the commission in July. And Timmermans warned environment ministers this month against using the energy price shocks that EU members are facing as an excuse to back down on proposals that are effectively phase-out schedules for CO2-intensive sectors. Timmermans said that if Europe leaves the climate crisis untackled, the resulting social unrest will be far worse than France's 2018 gilets jaunes protests over fuel and climate taxes.

More climate sceptical — and coal dependent — Poland is, for the moment, relatively isolated in arguing for postponing or lowering various climate and energy goals because of the energy price spikes. The majority of EU politicians seem to accept calls by Timmermans and von der Leyen to double down on decarbonisation policies such as an increased GHG cut — of 61pc, rather than 43pc, by 2030, compared with 2005 levels — for industries under the bloc's emissions trading system (ETS). Distributors of road and heating fuels will have to purchase allowances, from 2026, to cover their emissions under a separate ETS with a carbon price that may well float above €100/t. In aviation, allowances for intra-European flights will be slowly reduced, with operators losing free allowances from 2026.

The EU's commitment to delivery is evidenced by over 3,000 pages of dense legal proposals and explanatory texts that aim to set GHG fuel intensity cuts for maritime fuels, oblige flight operators to take up 5pc sustainable aviation fuels by 2030, rising to 20pc by 2035 and 63pc by 2050, and for renewables to reach 40pc, rather than 32pc previously, of EU gross final consumption of energy by 2030.

Tougher CO2 emissions standards for new passenger cars and vans require average emissions to come down by 55pc from 2030 and by 100pc from 2035, compared with a 2020-21 target of 95g CO2/km​. That effectively sets a 2035 phase-out date for sales of unabated internal combustion engines. There is also a 13pc GHG intensity reduction target for transport fuels by 2030, effectively doubling to 28pc the share of renewable fuels in road transport.

Ships calling at EU ports will have to reduce the average GHG intensity of their fuels by 6pc by 2030, 13pc by 2035 and 75pc by 2050, all from 2020 levels. And the commission wants member states to push zero-emission car sales by equipping major highways with electric charging every 60km and hydrogen refuelling every 150km.

Article 6 integrity

Signing off on a negotiating mandate for Timmermans and the commission in Glasgow, EU environment ministers have called for article 6 of the Paris climate agreement to set rules for international carbon trading that are "consistent with the necessary increased global ambition and the achievement of climate neutrality, and that avoid double counting and lock in to high-emissions pathways". Ministers specifically want article 6 provisions that promote sustainable development, ensure environmental integrity and ambition, and address risks such as "non-permanence" of carbon cuts or sequestration and "leakage" from projects.

Off the record, EU officials involved in the nitty-gritty of climate negotiations are openly sceptical about international carbon trading, flagging an increasing number of complaints about the credibility of voluntary offsets with "different controversies in different countries". Officials fear double counting and the need for "corresponding" adjustments of their own emission figures when countries sell reductions to others. "Fostering global ambition, ensuring environmental integrity and avoiding double accounting are at the core of the Paris agreement and of the EU position on market mechanisms," European environment commissioner Virginijus Sinkevicius says.

The EU's non-governmental organisations have called the bloc's negotiating position "good enough", especially as EU ministers now back a five-year timeframe for countries' NDCs to the Paris agreement to be implemented from 2031. But campaigners say the EU27 have intentionally left their negotiators room to manoeuvre, including on how the EU and member states will help reach the €100bn goal for international climate finance for developing countries. And non-governmental organisation Carbon Market Watch wants the EU to do more to ensure international carbon market negotiations move beyond just compensating emissions and zero-sum offsetting to deliver real GHG reductions. It calls for tough offsetting and carbon trading rules at Cop 26, and will this month present critical analysis of claims by companies including Shell, Total, BP, Russian state-controlled Gazprom and Chinese state-controlled PetroChina of carbon-neutral natural gas and crude shipments.

EU GHG reduction targets
NDC target % Baseline yearTarget year
2016 — 40pc19902030
2020 — 55pc 19902030
2016 — 80-95pc19902050
2020 — 100pc19902050

EU GHG emissions by source

Net EU electricity generation, 2019

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25/01/15

Opec sees 1.4mn b/d oil demand growth in 2026

Opec sees 1.4mn b/d oil demand growth in 2026

London, 15 January (Argus) — Opec's first global oil demand projections for 2026 see consumption growth of just over 1.4mn b/d, roughly the same as its forecast for this year. In its Monthly Oil Market Report (MOMR) today, Opec forecast oil demand growing by 1.43mn b/d to 106.63mn b/d, underpinned by continued "solid economic activity in Asia and other non-OECD countries." Opec sees consumption growing by 1.45mn b/d this year, unchanged from its previous estimate. But it trimmed its 2024 demand growth estimate by 70,000 b/d to 1.54mn b/d, a sixth consecutive monthly downward revision. This brings Opec further in line with forecasters such as the IEA and EIA, but the gap between them remains large, particularly given 2024 has ended. Opec's oil demand growth estimate for 2024 is 600,000 b/d above that of the IEA's 940,000 b/d. And there is now an 850,000 b/d gap between Opec's 2024 total oil demand estimate of 103.75mn b/d and the IEA's 102.9mn b/d. Opec's oil demand growth estimate for 2025 is 400,000 b/d above the IEA's forecast for 1.05mn b/d. China, which has long driven global oil demand growth but whose economy is now slowing, is projected to add 270,000 b/d in 2026, compared with 310,000 b/d in 2025, around 300,000 b/d in 2024 and about 1.4mn b/d in 2023. In terms of supply, the producer group sees non-Opec+ liquids supply growth at 1.1mn b/d, the same as 2025 and again driven by gains from the US, Brazil and Canada. It said non-Opec+ liquids supply increased by 1.3mn b/d in 2024. Opec+ crude production — including Mexico — fell by 14,000 b/d to 40.65mn in December, according to an average of secondary sources that includes Argus . Opec put the call on Opec+ crude at 42.5mn b/d for this year and 42.7mn b/d for next. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Inpex wins Norwegian offshore exploration licences


25/01/15
25/01/15

Inpex wins Norwegian offshore exploration licences

Tokyo, 15 January (Argus) — Japanese upstream firm Inpex has won eight oil and gas exploration permits offshore Norway, expanding its operations in the country, Inpex said today. Inpex was awarded exploration licences PL1263, PL318D, PL1264, PL1257, and PL636D located between the northern North Sea and the southern Norwegian Sea, along with PL 1276, PL1274 and PL1194C in the northern Norwegian Sea through its local subsidiary Inpex Idemitsu Norge (IIN). The successful bid was part of the awards in the pre-defined areas (APA) 2024 licensing round . IIN secured five licenses in the 2023 APA round . The APA rounds are held every year and focus on mature areas of the Norwegian continental shelf. The aim is to facilitate the discovery and production of remaining oil and gas resources in these areas before existing infrastructure is shut down. In the latest round, 33 of the licences are in the North Sea, 19 in the Norwegian Sea and one in the Barents Sea. The latest licences will contribute to expanding its Norwegian business portfolio, Inpex said, given the potential of jointly developing the new assets with existing assets in the surrounding area. The company has continued stable production at the Snorre and Fram oil fields in the northern North Sea. The Japanese firm aims to strengthen its upstream business as part of its long-term strategy, while it invests in renewable energy such as green ammonia. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

IEA warns of supply squeeze from Russia, Iran sanctions


25/01/15
25/01/15

IEA warns of supply squeeze from Russia, Iran sanctions

London, 15 January (Argus) — The IEA sees a slightly tighter oil market this year than it previously forecast and said new US sanctions on Russia and Iran could further squeeze balances. The outgoing administration of US President Joe Biden announced additional sanctions on Russia's energy exports earlier this month, and moved to tighten sanctions on Iran's oil exports in December. "We maintain our supply forecasts for both countries until the full impact of sanctions becomes more apparent, but the new measures could result in a tightening of crude and product balances," the IEA said today in its latest monthly Oil Market Report (OMR). But the effect of incoming US President Donald Trump on Russian and Iranian supply remains a key variable. As things stand, the IEA projects a 720,000 b/d supply surplus this year — showing a well cushioned oil market. This is around 230,000 b/d less than its previous forecast. For 2024, the IEA's balances show a small supply surplus of 20,000 b/d. The Paris-based agency sees global oil supply growing by 1.8mn b/d to 104.7mn b/d in 2025, compared to growth of 1.9mn b/d in its December report. Almost all of the 2025 growth — 1.5mn b/d — will come from non-Opec+ countries such as US, Brazil, Guyana, Canada and Argentina. The IEA continues to assume all current Opec+ cuts will remain in place this year, although the alliance plans to start increasing output from April. The IEA said global oil supply grew by 650,000 b/d in 2024. The agency sees global oil demand growing by 1.05mn b/d in 2025, down by 30,000 b/d from its December forecast. This should see oil demand reach 104.0mn b/d, with most of the gains driven by "a gradually improving economic outlook for developed economies, while lower oil prices will also incentivise consumption." China, which has long driven global oil demand growth but whose economy is now slowing, will add 220,000 b/d in 2025, compared with 180,000 b/d in 2024 and 1.35mn b/d in 2023. But the IEA revised up its oil demand growth estimates for 2024 by 90,000 b/d to 940,000 b/d. This was mostly due to better-than-expected growth in the fourth quarter, which at 1.5mn b/d was highest since the same period in 2023 and 260,000 b/d above than its previous forecast. This increase was mostly due to lower fuel prices, colder weather and abundant petrochemical feedstocks, the IEA said. The IEA said global observed oil stocks increased by 12.2mn bl in November, with higher crude stocks on land and water offsetting refined product draws. It said preliminary data show a further stock build in December. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Colonial shuts Line 1 due to Georgia spill: Update


25/01/14
25/01/14

Colonial shuts Line 1 due to Georgia spill: Update

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New York to propose GHG market rules in 'coming months’


25/01/14
25/01/14

New York to propose GHG market rules in 'coming months’

Houston, 14 January (Argus) — Draft rules for New York's carbon market will be ready in the "coming months," governor Kathy Hochul (D) said today. Regulators from the Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) "will take steps forward on" establishing a cap-and-invest program and propose new emissions reporting requirements for sources while also creating "a robust investment planning process," Hochul said during her state of the state message. But the governor did not provide a timeline for the process beyond saying the agency's work do this work "over the coming months." Hochul's remarks come after regulators in September delayed plans to begin implementing New York's cap-and-invest program (NYCI) to 2026. At the time, DEC deputy commissioner Jon Binder said that draft regulations would be released "in the next few months." DEC, NYSERDA and Hochul's office each did not respond to requests for comment. Some environmental groups applauded Hochul's remarks, while also expressing concern about the state's next steps. Evergreen Action noted that the timeline for NYCI "appears uncertain" and called on lawmakers to "commit to this program in the 2025 budget." "For New York's economy, environment and legacy, we hope the governor commits to finalizing a cap-and-invest program this year," the group said. State law from 2019 requires New York to achieve a 40pc reduction in greenhouse gas (GHG) emissions from 1990 levels by 2030 and an 85pc reduction by 2050. A state advisory group in 2022 issued a scoping plan that recommended the creation of an economy-wide carbon market to help the state reach those goals. By Ida Balakrishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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