EU warns of 2030 climate ambition gap

: Emissions, Natural gas
24/06/19

The European Commission has warned of an ambition gap on the way to member states achieving the bloc's 2030 renewables and energy efficiency goals, although it noted "some" progress. And European industry still faces comparatively high energy prices, the commission said in its twice-yearly report on countries' economies and finances.

Increasing energy efficiency and switching to less costly renewable energy is "essential" to improve the competitiveness of European industry, but most EU states lack solid and sufficiently detailed investment estimations, as well as concrete measures to attract private clean energy finance, the commission said.

And countries need to strengthen their carbon sinks from the land use, land-use change and forestry sectors. For Germany, the commission noted that the transport sector has failed to reach annual sector-specific emission targets, including in 2023, when the sector increased final energy consumption by 6.3pc compared with 2022.

EU states also need to strengthen policies to phase out fossil fuel subsidies so as to align with the EU goal of becoming a climate neutral economy, the commission said. For France, the commission estimated a net budgetary cost of emergency energy support measures at 0.9pc of GDP in 2023 and a projected 0.2pc in 2024, falling to 0pc in 2025. And for Italy the commission forecast a net budgetary cost of emergency energy support measures of 1pc of GDP in 2023, reaching 0pc in 2024. For Germany, the estimations are 1.2pc of GDP going to energy support measures in 2023, 0.1pc in 2024, and 0pc in 2025.

Another of the commission's key recommendations is to cut the share of Russian imports in total EU gas imports beyond the 15pc seen in 2023, even if the share historically stood at around 40pc. Further efforts are needed from "certain" countries to phase out imports of LNG from Russia, the commission said.

EU states have struggled to agree a further round of sanctions against Russia, which would include restricting the reloading of Russian LNG for export outside the EU at terminals in Europe. EU foreign ministers are expected to discuss the matter at a meeting on 24 June.

By Dafydd ab Iago

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25/01/13

AI may boom on gas power, then turn to nuclear

New York, 13 January (Argus) — The first tranche of new US data centers coming on line this decade to run electricity-intensive artificial intelligence (AI) software will probably rely mostly on power generated by natural gas, while the nuclear renaissance hoped for by Big Tech comes later in the 2030s. Microsoft, Amazon, Facebook-parent Meta and Google-parent Alphabet want clean, reliable power as quickly as possible so they can be early movers in the development of AI, which is rapidly advancing and finding new user bases around the world. While these companies do not relish the optics of powering AI development with fossil fuels, gas-fired power is widely expected to fulfill most of the gap between current supply and future demand through at least 2030. Unlike wind and solar, gas can be relied upon for steady, baseload power, a necessary ingredient for always-on data centers. And crucially, unlike nuclear, gas-related infrastructure can be built out quickly. The most recent additions to the US nuclear fleet, Vogtle units 3 and 4 in Georgia, took 15 years to build and cost $30bn, double the expected time and cost. A few decommissioned nuclear reactors can be restarted, as Microsoft is paying to do with a unit of Three Mile Island in Pennsylvania. But this low-hanging fruit will be quickly exhausted. Questions around the meter While there is broad agreement that gas will power the AI data center boom through at least 2030, questions remain about what this rapid gas-fired power build-out will look like. Data center operators can secure power in two ways: wade through the long, arduous interconnection process through which new customers connect to the grid, or bypass the grid altogether and secure their own personal electricity supply through so-called "behind-the-meter" agreements. Many in the gas industry are betting tech companies' need for speed will force them to opt for the latter. "The data centers are not going to wait," Alan Armstrong, chief executive of Williams, the largest US gas pipeline company, told Argus in an interview. "They are going to go to states that allow you to go behind the meter." In this scenario, construction of an AI data center in a state like Louisiana, for instance, might accompany construction of a new intrastate pipeline connecting the state's prolific Haynesville gas field with a new gas-fired power plant. Intrastate pipelines bypass the federal oversight triggered by interstate pipeline construction, and new gas power plants only take 2-3 years to build, East Daley Analytics analyst Zachary Krause told Argus . Most of the incremental power needed to run AI data centers this decade will be generated by new gas plants, Krause said. Even ExxonMobil in December said it was in talks to provide "fully islanded" gas-fired power to AI data centers. It claimed it could even capture 90pc of the CO2 emissions from power generation, appeasing tech companies' climate ambitions. ExxonMobil's non-grid gas generation fleet is "independent of utility timelines, so they can be installed at a pace that other alternatives — including US nuclear — just can't match," ExxonMobil chief financial officer Kathy Mikells said. But connecting to the grid may offer better reliability and economics than behind-the-meter gas power. If an off-grid gas generator trips off line, for instance, an always-on data center without back-up generation depending on that facility would be in trouble. Grid connection also allows generators to sell excess power into the grid. For those reasons, most new data centers this decade will rely on the grid as their primary power source, Adam Robinson, research associate at consultancy Enverus, told Argus . Small modular future But if the 2020s become the decade of gas-powered AI, the 2030s may be when nuclear-powered AI gets its due. The long-awaited nuclear renaissance may come not from conventional reactors, but from next-generation small modular reactors (SMRs), which can theoretically be built much faster and cheaper. No US SMRs yet exist, but given the number of SMR start-ups with expected start dates before 2030, and money pouring into the sector from the likes of Google and Microsoft, at least one of these next-generation reactors should be operating by 2030, Adam Stein, director of nuclear energy innovation at research center Breakthrough Institute, told Argus . SMRs' smaller price tag relative to conventional 1 GW nuclear reactors may also accelerate their adoption, Stein said. "Not every utility needs a GW-scale plant of any kind, but they might need a 300 or 600MW plant," he said. "So the total addressable market is larger for SMRs." By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

California governor eyes carbon market extension

25/01/10

California governor eyes carbon market extension

Houston, 10 January (Argus) — California governor Gavin Newsom (D) is planning to start discussions with lawmakers to enact a formal extension of the state's cap-and-trade program. Newsom included the idea in the 2025-26 budget proposal he released on Friday. "The administration, in partnership with the legislature, will need to consider extending the cap-and-trade program beyond 2030 to achieve carbon neutrality," the governor's budget overview says. The California Air Resources Board (CARB) believes it has the authority to operate the program beyond 2030, but a legislative extension would put it on much firmer footing. The cap-and-trade program, which covers major sources of the state's greenhouse gas (GHG) emissions, including power plants and transportation fuels, requires a 40pc cut from 1990 levels by 2030. CARB is eyeing tightening that target to 48pc as part of a rulemaking that could take effect next year to help keep the state on a path to carbon neutrality by 2045. Newsom's budget proposal highlighted the need to weigh the revenue received from the program carbon allowance auctions. That money goes to the Greenhouse Gas Reduction Fund (GGRF), which supports the state's clean economy transition through programs targeting GHG emissions reductions, such as subsidizing purchases for zero-emission vehicles (ZEVs). The budget plan added few new climate commitments, instead prioritizing funding agreed to last year. The governor's $322.3bn 2025-26 budget proposal would continue cost-saving measures the state enacted in its 2024-25 budget to deal with a multi-billion-dollar deficit. These included shifting portions of expenditures from the state general fund to the GGRF over multiple budget years, such as $900mn for the state's Clean Energy Reliability Investment Plan. The state's $10bn Climate Bond, passed by voters in November 2024, would cover the majority of new climate-related spending, including taking on $32mn of the reliability plan spending. The change in funding source would allow the state Department of Motor Vehicles to utilize $81mn in GGRF funds to cover expenditures from CARB's Mobile Source Emissions Research Program. The governor's budget would also advance his proposal from October for CARB to evaluate allowing fuel blends with 15pc ethanol (E15) in the state, as a measure to lower gas prices. CARB would receive $2.3mn from Newsom's proposal to finish the multi-tier study it began in 2018 and implement the necessary regulatory changes to allow E15 at the pump. Currently, California allows only fuel blends with up to E10 because of environmental concerns, such as the potential for increased emissions of NOx, which contributes to smog, by allowing more ethanol. With the administration predicting a modest surplus of $363mn from higher state revenues, it is unlikely that California will return to the belt tightening of the past two state budgets. But the state cautions that tension with the incoming president-elect Donald Trump, potential import tariffs and ongoing state revenue volatility should leave California on guard for any potential future fiscal pitfalls. The state's legislature's non-partisan adviser cautioned in November that government spending continues to outpace revenues, with future deficits likely. The administration is keeping an eye on the issue, which could result in changes through the governor's May budget revision, state director of finance Joe Stephenshaw said. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US issues 45Z tax guidance for low-carbon fuels

25/01/10

US issues 45Z tax guidance for low-carbon fuels

Washington, 10 January (Argus) — US producers of low-carbon fuels can start claiming the "45Z" tax credit providing up to $1/USG for road use and $1.75/USG for aviation, following the US Treasury Department's release today of proposed guidance for the credit. The guidance includes proposed regulations and other tools to determine the eligibility of fuels for the 45Z tax credit, which was created by the Inflation Reduction Act to replace a suite of incentives for biofuels that expired at the end of last year. Biofuel producers have been clamoring for guidance from the US Treasury Department so they can start claiming the tax credit, which is available for fuels produced from 1 January 2025 through the end of 2027. "This guidance will help put America on the cutting-edge of future innovation in aviation and renewable fuel while also lowering transportation costs for consumers," US deputy treasury secretary Wally Adeymo said. "Decarbonizing transportation and lowering costs is a win-win for America." The creation of the 45Z tax credit has already prompted a change in US biofuels markets by shifting federal subsidies from blenders to producers. Because the value of tax credit increases for fuels with the lowest lifecycle greenhouse gas (GHG) emissions, it could encourage refiners to source more waste feedstocks such as used cooking oil, rather than conventional crop-based feedstocks. While the guidance is still just a proposal, taxpayers are able to "immediately" use the guidance to claim the 45Z tax credit, until Treasury issues additional guidance, an administration official said. The guidance on 45Z released today affirms that only the producer for the fuel is eligible to claim the credit, not blenders. To be eligible for the tax credit, the fuel must have a "practical or commercial fitness for use in a highway vehicle or aircraft" by itself or when blended into a mixture, Treasury said. Marine diesel and methanol suitable for highway or aircraft use are also eligible for 45Z, as is renewable natural gas that can be used as a transportation fuel. Treasury also released an "annual emissions rate table" offering providers a methodology for determining the lifecycle GHG of fuel. Treasury said a key emissions model from the US Department of Energy, called 45ZCF-GREET, used to calculate the value of the 45Z tax credit is anticipated to be released today, although industry officials said it may be delayed until next week. Treasury said it intends to propose regulations at "a future date" for calculating the GHG emissions benefits of "climate smart agriculture" practices for "cultivating domestic corn, soybeans, and sorghum as feedstocks" for fuel. Those regulations could lower the calculated lifecycle emissions of fuel from those crop-based feedstocks and increase the relative 45Z tax credit. US biofuel producers said they are still awaiting key details on the 45Z tax credit, including the update to the GREET model. Among the outstanding questions is if the guidance released today provides "enough certainty to negotiate feedstock and fuel offtake agreements going forward", said the Clean Fuels America Alliance, an industry group that represents the biodiesel, renewable diesel and sustainable aviation fuel industries. It is unclear how president-elect Donald Trump intends to approach this proposed approach for the 45Z credit, which will be subject to a 90-day public comment period. Trump has promised to "rescind all unspent funds" from the Inflation Reduction Act. But outright repealing 45Z would leave biofuels producers and farmers without a subsidy they say is needed to sustain growth, after the expiration last year of a $1/USG blender tax credit and a tax credit of up to $1.75/USG for sustainable aviation fuel. Biofuel and soybean groups were unsuccessful in a push last year to extend the expiring biofuel tax credits. The 45Z credit is likely to be debated in Congress this year, as Republicans consider repealing parts of the Inflation Reduction Act. House Republicans have already asked for input on revisions to the 45Z credit, signaling they could modify the incentive. In a tightly divided Congress, farm-state lawmakers may hold enough leverage to ensure some type of biofuel incentive — and potentially one friendlier to agricultural producers than 45Z — survives. By Chris Knight and Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Finnish and Baltic gas consumption up by 9pc in 2024

25/01/10

Finnish and Baltic gas consumption up by 9pc in 2024

London, 10 January (Argus) — Combined Finnish and Baltic gas consumption rose by 9pc on the year in 2024, with demand higher in all four countries and Lithuania leading the increase. Consumption across Lithuania, Latvia, Estonia and Finland totalled roughly 43.6TWh in 2024, up from 40TWh in both 2022 and 2023 but still well below the 2019-21 average of 67.2 TWh/yr ( see combined consumption graph, data and download ). Demand increased across all four countries, but Lithuanian consumption rose the most in both absolute and percentage terms, jumping by 14pc on the year to nearly 17.1TWh. This was mostly driven by higher demand from fertiliser producer Achema and gas-fired power generators, transmission system operator Amber Grid's commercial director, Justas Cerniauskas, said. Achema, the region's single largest gas user, increased its consumption by roughly 1TWh on the year, while power-sector gas demand rose by around 600GWh, Cerniauskas said. Large consumers with direct connections to the grid consumed 9.8TWh last year, according to Amber Grid data, up from 8.4TWh a year earlier, while demand from the local distribution zone increased by a more moderate 600GWh. Lithuanian gas-fired power generation totalled around 820GWh, compared with 640GWh in 2023, data from Fraunhofer ISE show. In Finland, gas-fired power production fell to 1.2TWh from 1.8TWh in 2023, as much stronger renewable output reduced gas' share of the generation mix. Renewable generation rose to 40.8TWh from 34.6TWh, with onshore wind accounting for almost the entire increase. Total Finnish gas demand rose by nearly 5pc on the year to just over 14TWh, despite the fall in gas-fired generation. Given that household demand accounts for a small part of overall consumption owing to the predominance of electric and district heating in Finland, this suggests that industrial demand continued its recovery. The paper and paper products sector is Finland's most gas-intensive, and appears to have performed better than in 2023 — output on a 2021 basis of 100 averaged 87.5 in January-October compared with 82.6 in all of 2023, data from Eurostat show. In Latvia, the main demand driver is the power sector, particularly state-owned utility Latvenergo's large combined heat and power plants. Latvian gas-fired power generation rose by nearly 19pc on the year to 1.6TWh, as weaker hydro generation left more room in the mix for gas. In Estonia, the region's smallest consumer, gas demand rose by more than 8pc on the year to 3.7TWh. Total gas-fired power generation across the four countries fell to 3.68TWh from 3.84TWh in 2023 ( see table ). Combined sendout from the Inkoo, Hamina and Klaipeda LNG terminals totalled 43.4TWh last year, compared with 47TWh in 2023 and 32.4TWh in 2022 ( see data and download ). A six week dry-docking period for the Klaipeda floating storage and regasification unit (FSRU) weighed on sendout in Lithuania, which was down by around 8TWh. Conversely, a long shutdown on the Balticconnector increased the call on Finland's Inkoo terminal to fill the supply shortfall in the first quarter. Sendout from Inkoo rose to 19.3TWh last year from 14.3TWh in 2023. This pattern is likely to flip in 2025, with Inkoo's Exemplar FSRU due to undergo its own six week dry-docking, which in combination with extensive maintenance on the Balticconnector has left only slightly more than half the year's slots booked . This is likely to increase the usage of Klaipeda, where slots for 2025 are nearly fully booked . There were net withdrawals from Latvia's Incukalns storage facility of 1.54TWh in the 2024 calendar year, flipped from net injections of 6.6TWh in 2023, and compared with 776GWh of withdrawals in 2022. Nearly 4.4TWh of gas was rolled over from the 2023-24 storage year into the next. By Brendan A'Hearn Total annual gas-fired power generation GWh 2021 2022 2023 2024 Finland 4,170 1,790 1,810 1,230 Lithuania 1,110 500 640 820 Latvia 1,820 1,100 1,350 1,600 Estonia 20 30 40 30 Total 7,120 3,420 3,840 3,680 — Fraunhofer ISE Numbers rounded to nearest 10 Annual gas demand by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Global agencies agree 2024 was hottest year recorded

25/01/10

Global agencies agree 2024 was hottest year recorded

London, 10 January (Argus) — Six international science and weather institutions have separately found that 2024 was the hottest year on record, the World Meteorological Organisation (WMO) said today. The organisations co-ordinated to release their 2024 average temperature data on the same day, "to underline the exceptional conditions experienced during 2024," the WMO said. The WMO uses data from the six agencies — the UK's Met Office, Japan's Meteorological Agency (JMA), US non-profit Berkeley Earth, the EU's Copernicus and the US' National Oceanic and Atmospheric Administration (NOAA) and National Aeronautics and Space Administration (Nasa). The global average surface temperature in 2024 was 1.55°C above the pre-industrial average, with a margin of uncertainty of 0.13°C either above or below that figure, WMO found in its analysis of the six datasets. This makes it "likely" that the world has experienced the first calendar year breaching the 1.5°C limit pursued by the Paris climate accord. Climate scientists use a timeframe of 1850-1900 for the pre-industrial average temperature. The Paris agreement seeks to limit global heating to "well below" 2°C above pre-industrial levels, and preferably to 1.5°C. All six datasets put 2024 as the hottest year on record and flag up the recent rate of warming, but "not all show the temperature anomaly above 1.5°C due to differing methodologies," WMO said. Copernicus found the global average temperature in 2024 was 1.6°C above pre-industrial levels. "Individual years pushing past the 1.5°C limit do not mean the long-term goal is shot," UN secretary-general Antonio Guterres said. "There's still time to avoid the worst of climate catastrophe. But leaders must act — now." He urged governments to submit new national climate action plans this year. The temperature limits sought by the Paris agreement work on a timeframe of 20 years or longer, Copernicus said. Long-term global warming is currently about 1.3°C above the pre-industrial baseline, a team of experts established by WMO found. "We've had not just one or two record-breaking years, but a full 10-year series," said WMO secretary-general Celeste Saulo. "This has been accompanied by devastating and extreme weather, rising sea levels and melting ice, all powered by record-breaking greenhouse gas levels due to human activities." The UK Met Office outlook finds that 2025 is likely to be one of the three warmest years, in terms of global average temperature, "falling in line just behind 2024 and 2023", it said today. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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