Malaysia unveils details of energy transition roadmap

: Coal, Emissions, Hydrogen
23/08/30

Malaysia on 29 August launched a detailed national energy transition roadmap (NETR), which sets out initiatives the government will undertake to achieve its 2050 net zero target.

The government launched the first phase of the NETR on 27 July comprising six energy transition levers — renewable energy, hydrogen, bioenergy, green mobility, energy efficiency and carbon capture, utilisation and storage (CCUS).

The latest version of the roadmap states that the government will also launch a national energy transition facility (NETF), with 2bn ringgit ($431mn) allocated as the initial seed fund. Projects under the NETR are expected to attract investments of more than 25bn ringgit and reduce emissions by more than 10mn t/yr of CO2 equivalent (CO2e). The NETR also aims to set up a national committee on energy transition to strengthen cross-sector collaboration in energy policy planning.

The NETR sees Malaysia achieving 70pc installed renewable energy capacity by 2050, mainly made up of solar photovoltaic (PV) capacity. The share of coal-fired power generation is targeted to fall to zero in 2050 from around 26pc currently, and no new coal-fired power generation will be developed.

Transportation is a significant greenhouse gas (GHG) emission contributor in Malaysia, with the land transport sector accounting for 55mn t/yr of CO2e. The government hence intends to adopt more green mobility practices and technologies across various transport sectors such as light and heavy land vehicles, aviation and marine transport. It aims for electric vehicles (EVs) to make up 80pc of the vehicle fleet by 2040, and targets local EV manufacturing capabilities to make up 90pc of local EV manufacturing. It also intends to introduce a blending mandate of up to 47pc sustainable aviation fuel (SAF) by 2050.

The government aims to enhance overall energy efficiency to lower energy intensity and reduce CO2 emissions, to improve "all dimensions of the energy trilemma by reducing demand to improve energy security, lowering costs for users to enhance energy equity and minimising emissions from energy production to elevate environment sustainability", the roadmap states.

Malaysia is also considering the potential of green hydrogen. The NETR aims to establish one low-carbon hydrogen hub by 2030, and an additional two hubs by 2050. It also aims to produce up to 2.5mn t/yr of green hydrogen by 2050 from renewable energy sources such as hydroelectric and solar.

Malaysia is additionally targeting the development of three CCUS hubs by 2030, with two in peninsular Malaysia and one in Sarawak, with a total storage capacity of up to 15mn t/yr. It also aims to add a further three carbon capture hubs by 2050, with a total storage capacity between 40mn-80mn t/yr.

The NETR estimates that Malaysia will require an investment of 1.2 trillion-1.3 trillion ringgit by 2050 to achieve its energy transition goals.

By Prethika Nair

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24/11/21

Brazil congress approves carbon market legislation

Sao Paulo, 21 November (Argus) — Brazil's lower house approved the creation of a regulated carbon market, which is seen as an essential tool for the country to meet its emissions reduction targets. The senate approved the bill earlier this month . It now awaits the president's signature to become law. The legislation, which has been the subject of legislative debates for more than three years, creates the Brazilian emissions trading system (SBCE) and stipulates that companies with emissions greater than 25,000 metric tons of CO2 equivalent (tCO2e)/yr will be subject to the cap-and-trade system. Companies with emissions from 10,000-25,000 tCO2e/yr will need to report their emissions but will not be required to offset them. The market will help Brazil reach its new nationally determined contribution (NDC), according to vice president Geraldo Alckmin. The new NDC , released earlier this month, stipulates that Brazil will reduce greenhouse gas emissions by up to 67pc from 2005 levels by 2035. Roughly 5,000 companies will be subject to the cap-and-trade system, covering about 15pc of Brazil's emissions, according to finance ministry estimates. The new market will go into effect over a six-year period in five phases. The first phase involves defining the rules that will govern the market, which can take up to two years. In the second phase, companies will be required to measure their emissions, and in the third phase report emissions and present a plan to monitor and reduce them. In the fourth phase, the trading market will begin operating and the first carbon allocation plan will go into effect. In the fifth and final phase, the market will be fully operational. As expected, the agriculture sector was excluded from the regulated market and will not have emissions-reductions targets. The law also exempts waste treatment companies, including sewage treatment and landfill operators if they can demonstrate the use of technologies that neutralize greenhouse gas emissions. The legislation also addresses regulations for the voluntary market, helping finance decarbonization projects in the agriculture and forestry sectors. Brazil has the potential to generate up to $100bn in revenues from the carbon market by 2030, according to a study by think tank ICC Brasil. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cost of government support for fossil fuels still high

24/11/21

Cost of government support for fossil fuels still high

London, 21 November (Argus) — The cost of government measures to support the consumption and production of fossil fuels dropped by almost third last year as energy prices declined from record highs in 2022, according to a new report published today by the OECD. But the level of fiscal support remained higher than the historical average despite government pledges to reduce carbon emissions. In an analysis of 82 economies, data from the OECD and the IEA found that government support for fossil fuels fell to an estimated $1.1 trillion in 2023 from $1.6 trillion a year earlier. Although energy prices were lower last year than in 2022, countries maintained various fiscal measures to both stimulate fossil fuel production and reduce the burden of high energy costs for consumers, the OECD said. The measures are in the form of direct payments by governments to individual recipients, tax concessions and price support. The latter includes "direct price regulation, pricing formulas, border controls or taxes, and domestic purchase or supply mandates", the OECD said. These government interventions come at a large financial cost and increase carbon emissions, undermining the net-zero transition, the report said. Of the estimated $1.1 trillion of support, direct transfers and tax concessions accounted for $514.1bn, up from $503.7bn in 2022. Transfers amounted to $269.8bn, making them more costly than tax concessions of $244.3bn. Some 90pc of the transfers were to support consumption by households and companies, the rest was to support producers. The residential sector benefited from a 22pc increase from a year earlier, and support to manufacturers and industry increased by 14pc. But the majority of fuel consumption measures are untargeted, and support largely does not land where it is needed, the OECD said. The "under-pricing" of fossil fuels amounted to $616.4bn last year, around half of the 2022 level, the report said. "Benchmark prices (based on energy supply costs) eased, particularly for natural gas, thereby decreasing the difference between the subsidised end-user prices and the benchmark prices," it said. In terms of individual fossil fuels, the fiscal cost of support for coal fell the most, to $27.7bn in 2023 from $43.5bn a year earlier. The cost of support for natural gas has grown steadily in recent years, amounting to $343bn last year compared with $144bn in 2018. The upward trend is explained by its characterisation as a transition fuel and the disruption of Russian pipeline supplies to Europe, the report said. By Alejandro Moreano and Tim van Gardingen Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Talks in Baku torn between mitigation and finance

24/11/21

Cop: Talks in Baku torn between mitigation and finance

Edinburgh, 21 November (Argus) — Developing and developed nations remain at loggerheads on what progress on climate finance and mitigation — actions to cut greenhouse gas emissions — should look like at the UN Cop 29 climate summit. But Cop 30 host Brazil has reminded parties that they need to stick to the brief, which is finance for developing countries. Concluding a plenary where parties, developed and developing, listed grievances, environment minister Marina Silva recognised "the excellent progress achieved" on mitigation at Cop 28. She listed paragraphs of the Cop 28 deal, including the energy package and its historic call to transition away from fossil fuels in energy systems. "We are on the right track," she said, talking about mitigation, but "our greatest obligation at this moment is to make progress with regard to financing". "This is the core of financing that will pave our collective path in ambition and implementation at Cop 30," Silva said, adding that $1.3 trillion for developing countries should be "the guiding star of this Cop". Parties are negotiating 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. But developed countries insist that a precise number for a goal can only be produced if there is progress on mitigation and financing structure for the NCQG. "Otherwise you have a shopping basket but you don't know what's in there," EU energy commissioner Wopke Hoekstra said. Some developing nations said they need the "headline number first". Some developing countries, including Latin American and African nations as well as island states, have also complained about the lack of mitigation ambition. Cop is facing one of the "weakest mitigation texts we have ever seen," Panama said. But they also indicated that financial support was missing to implement action. Developed countries at Cop 29 seek the implementation of the energy pledges made last year. "What we had on our agenda was not just to restate the [Cop 28] consensus but actually to enhance and to operationalise that," but the text goes in the opposite direction, Hoekstra said, talking about the latest draft on finance. Whether hints that Brazil has mitigation in focus for next year's summit will be enough to assuage concerns from developed countries at Cop 29 on fossil fuel ambitions remains to be seen. The communique of the G20, which the country hosted, does not explicitly mention the goal to transition away from fossil fuels either. The developed countries' mitigation stance grew firmer after talks on a work programme dedicated to mitigation, the obvious channel for fossil fuel language, was rescued from the brink of collapse last week. Discussions have stalled, but another text — the UAE dialogue which is meant to track progress on the outcomes of Cop 28 — still has options referring to fossil fuels. But in these negotiations too, divisions remain. "The UAE dialogue contains some positive optional language on deep, rapid and sustained emissions reductions and the [Cop 28] energy package, E3G said. But Saudi Arabia has made clear that this was unacceptable, while India, which worked to water down a coal deal at Cop 26, is pushing back on the 1.5°C temperature limit of the Paris Agreement. Negotiators are starting to run out of time. Draft after draft, the divide fails to be breached with no agreement on an amount for the finance deal. "We cannot talk about a lower or higher number because there is no number," noted Colombia's environment minister Susana Muhamad. The next iteration should have numbers based on the Cop 29 presidency's "view of possible landing zones". The fact that the draft text on finance has no bridging proposal is a concern, non-profit WRI director of international climate action David Waskow said. Finance was always meant to be the centrepiece of Cop 29. Parties have not formally discussed the goal in more than 15 years, and have been trying to prepare for a new deal through technical meetings for the past two years. But the discussion needs to end in Baku. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil's Bndes approves $1.2bn in Climate Fund spending

24/11/21

Brazil's Bndes approves $1.2bn in Climate Fund spending

Sao Paulo, 21 November (Argus) — Brazil's Bndes development bank approved spending $1.2bn of the Climate Fund in the second and third quarters to finance climate change mitigation projects. The projects that received funding — equal to about 70pc of the fund's total — will prevent 3.3mn metric tonnes (t) of CO2 equivalent/yr, according to Bndes. That would be 16 times more CO2 avoided than the 204,000 t from projects approved in the same period last year. In 2023 the fund released $176mn to 27 projects, most of them being renewable energy projects. The funds will go toward wind energy and biogas projects, urban mobility, bus fleet electrification and light rail transportation, as well as to finance green industries and native forest projects. Interest in developing Brazil's sustainable fuels market is growing, Bndes president Aloizio Mercadante said. "For this reason, we must at least double the resources of the Climate Fund as it is outlined in next year's federal budget," he said. One of several instruments of Brazil's climate change policy, the Climate Fund is linked to the environment ministry and is administered by Bndes. It was created in 2009 and uses resources from oil and natural gas exploration to mitigate and combat climate change. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Developing countries reject new finance draft

24/11/21

Cop: Developing countries reject new finance draft

Baku, 21 November (Argus) — Developing countries have expressed discontent with the climate finance draft text released today and continue to stick to their initial positions in negotiations at the UN Cop 29 climate summit, in Baku, Azerbaijan. The Cop 29 presidency earlier today released a new draft text on the key issue of climate finance for developing countries , but entrenched positions remain with no progress on an amount. Countries must agree 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. Parties such as the group of 77 (G77) and China, Pakistan and Kenya — on behalf of the African Group of Negotiators — today responded with disappointment at the lack of an amount for finance. They are calling for a figure close to 1.3 trillion/yr in provided and mobilised finance, an amount that has long been pushed forward by developing countries. Developed countries have not indicated a number . "We cannot talk about a lower or higher number because there is no number," said Colombia's environment minister Susana Muhamad. The country seeks to end the country's dependence on fossil fuels , while promoting a transition to clean and renewable energy, but has long said that it is lacking the financial means to do so. The finance goal "is not an investment goal, but there remains text on investment flows," complained the G77 and China group. China's representative emphasised that the text should not "cherry-pick single paragraphs" from the Cop 28 deal, as developed countries seek to add language on fossil fuels agreed in Dubai last year. The finance text should duplicate accurately and fully the wording of the Paris Agreement, they said. China also reiterated that the finance goal is for developed countries to honour their obligations. The country pointed out that although it has provided 177bn yuan ($24.5mn) since 2016 in support of developing countries, "the voluntary support" of the global south is not part of the goal. It is different in nature from the obligation of developed countries to provide financial resources, the Chinese negotiator said. UN secretary general Antonio Guterres today urged parties to "soften hard lines" and focus on the bigger picture. "Finance is not a hand-out… it's a downpayment on a safer, more prosperous future for every nation on earth." "The time to repeat initial positions has come to an end, and parties should find areas of possible compromise," he said. The summit is scheduled to end on 22 November, but many participants said it is likely to overrun. By Prethika Nair and Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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