Oregon CFP credit bank continues to grow
The surplus of Oregon Clean Fuels Program (CFP) credits grew to a record volume in the first quarter of the year with renewable diesel continuing to increase its share of the state's diesel pool.
The pace of credit generation slowed in the quarter but still exceeded deficits by about 105,000 metric tonnes (t), bringing the total volume of credits available for future use to nearly 1.3mn t, according to state data published on Thursday.
The growth in the surplus came largely as the result of a continued surge in renewable diesel use in Oregon, with totaled more than 55.6mn USG in the quarter. The fuel accounted for more than 60pc of all new credits in the first quarter with more than 444,000, a more than 10pc increase from the previous quarter and a more than 210pc jump from 1Q 2023. It also represented more than 29pc of the liquid diesel pool.
Biodiesel generated about 13pc of new credits or about 92,400t during the quarter, as total use fell by more than 26pc from the previous quarter and about 14pc from a year prior.
Deficit generation increased by about 3.6pc from the previous quarter to about 611,000 t as the new year brought with it an increase in the overall carbon intensity target for the program. Gasoline deficits jumped by more than 10pc compared with the fourth quarter of 2023 and 18pc from the first quarter last year. Petroleum diesel deficits also increased by more than 9pc even as consumption declined by more than 7pc from the prior quarter and 17pc from a year ago.
LCFS programs require yearly reductions in the carbon intensity of transportation fuels. Fuels that exceed the annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives.
Oregon requires a 20pc reduction by 2030 and 37pc by 2035. This year's target is 8pc, up from 6.5pc last year. An ongoing rulemaking process this year will consider changes to how the state calculates the carbon intensity of fuels and verifies the activity of participants, but it will not touch the annual targets.
Spot Oregon credits have fallen by nearly 60pc since the previous data release in May and about 88pc since late September, when state data offered the first indications that renewable diesel that was already inundating the California market had found its way to the smaller Oregon pool. Argus assessed Oregon credits at $20/t on Thursday.
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California CARB ULSD prices hit multi-year lows
California CARB ULSD prices hit multi-year lows
Houston, 5 August (Argus) — Outright California CARB diesel prices are at nearly 31-month lows following a narrowing in Los Angeles differentials and the underlying Nymex ultra-low sulphur diesel (ULSD) contract last week. Front-month outright prices in Los Angeles closed at $2.20/USG on 2 August, the lowest level since December 2021, after a 4pc downturn in the Nymex ULSD contract and a 2¢/USG weekly dip in differentials as August volume was heard traded lower. Overall ULSD liquidity remained muted in San Francisco, but Friday's Nymex loss pressured outright cash prices to $2.14/USG, also the lowest level since December 2021. California refiners had nearly doubled CARB diesel production in the week ended 26 July and averaged 193,000 b/d, according to latest data from the California Energy Commission (CEC) released on 1 August. The uptick fueled a 1.6pc increase in the state's total diesel inventory, to 2.9mn bl, despite a concurrent 38pc drop in output of other diesel fuels — a category including high-sulphr, non-California EPA and renewable diesel. By Jasmine Davis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Guyana seeking to market carbon credits to airlines
Guyana seeking to market carbon credits to airlines
Kingston, 5 August (Argus) — Growing oil producer Guyana has started discussions with several airlines for the sale of its carbon credits, saying other efforts to transact its forest carbon are progressing slowly. The heavily forested country in northern South America will use a compliance market in Singapore to trade its certified carbon credits with airlines, vice president Bharrat Jagdeo said. The country faced the prospect of not being able to sell its credits after being proactive in establishing a low carbon development strategy and getting its credits certified, he said. "We have been fighting to get our carbon sold into a compliance market, and there is a Singapore-based market that allows trading in forest carbon for airlines," Jagdeo said. "We have started discussions to see whether we can sell our certified carbon to some of the airlines and hopefully the prices will be good." The government did not identify the potential buyers. Guyana aims to monetize its forests' climate and ecosystem services while promoting low-carbon economic development that is guided by its low carbon development strategy, the government said. Guyana's low-carbon development strategy is aimed at combating climate change globally, it said. "Guyana has set out a vision for monetizing the climate and ecosystem services provided by our standing forest, while accelerating the country's economic development along a low carbon trajectory," it said. Guyana has secured 7.14mn carbon units from Architecture for REDD+ Transaction (ART) for its low deforestation rate along with sustaining high levels of forest coverage. ART is a global initiative that encourages governments to reduce forest degradation and to restore forests. "This achievement made Guyana the first country to be issued carbon credits eligible for use by airline operators in their efforts to reduce carbon emissions," the government said. The credits were issued "in recognition of Guyana's successful efforts to reduce emissions from forest loss and degradation and maintain one of the world's most intact tropical forests," ART said. Heavily forested Guyana has a population of 750,000. It is a carbon sink with forests covering an area the size of England and stor ing 19.5 gigatons of carbo n , the government said. Guyana's deforestation rate is less than 0.05pc, it said. Airlines have been working towards their targets in the 2024-2026 phase of the International Civil Aviation Organization's carbon offsetting and reduction scheme. "There are some new standards required for the aviation sector and in those new standards there will have to be carbon credit offtake," Guyana's president Irfaan Ali said. ART issued 33.47mn TREES credits in December 2022 to Guyana for 2016-2020. The credits are ART's standard for measuring and quantifying greenhouse gas emission reductions. Guyana has had some success in transacting its carbon credits. It negotiated an agreement with Hess Corporation to sell carbon credits for $750mn. It received the first $150mn in 2023. Hess is part of an ExxonMobil-led consortium that started producing crude offshore Guyana in 2019. US major Chevron's planned takeover of Hess will not affect the agreement, Jagdeo said. Norway had earlier committed to providing Guyana up to $250mn for avoided deforestation once certain performance indicators were met. Guyana started negotiating with airlines after failing to get the United Nations Framework Convention on Climate Change (UNfccc) and some non-governmental organizations to add forest carbon to a compliance market, the government said. But it made "no significant" progress" in the discussions, Jagdeo said. "The UNfccc is treating the tropical countries badly," he said. "If we didn't branch out on our own since 2009, and set up our low carbon development strategy that gave us the $250mn deal with Norway, then the $750mn agreement with Hess, we would be left back like some other countries." By Canute James Guyana forest credit payments $ Credit years Payment $/ton 2016-2020 187.5 15 2021-2025 250.0 20 2026-2030 312.5 25 — Guyana Payment by Hess, for approximately 30pc or 37.5mn of Guyana's ART TREES credits Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore’s middle distillate stocks hit 13-week high
Singapore’s middle distillate stocks hit 13-week high
Mumbai, 5 August (Argus) — Singapore's middle distillate stocks rose to a 13-week high of 11.35mn bl for the week ended 31 July, Enterprise Singapore data show. Light distillates fell for the first time since 10 July and fuel oil inventories dropped to a three-week low. Singapore middle distillate stocks rose with more gasoil imports from swing suppliers India and the Mideast Gulf. The influx in middle distillate stocks was led by the latest stock build with Bahrain, Saudi Arabia and India, the top suppliers to Singapore after South Korea. Singapore's light distillate stocks eased because of a sharp fall in naphtha and gasoline imports. Naphtha imports fell by a third as supplies from Malaysia, India and Bahrain dried up. Exports surged to 19.2mn t from 3.7 mn t a week ago. Gasoline imports fell by 25pc with no supplies from Brunei in the reporting week. Fuel oil inventories continued to decline and fell to a three-week low on the back of lower imports. Oman, Brazil and the US were the top origin for arrivals into Singapore, while exports to China held steady on the week at around 880,000 bl. By Roshni Devi Singapore onshore stocks week to 31 July 2024 (mn bl) Volume ± w-o-w ± w-o-w (%) Light distillates Stocks 14.39 -1.33 -8.51 Naphtha imports 0.72 -1.49 -67.28 Naphtha exports 0.17 0.13 412.96 Gasoline imports 1.99 -0.68 -25.61 Gasoline exports 4.73 -0.11 -2.38 Middle distillates Stocks 11.35 0.30 2.72 Gasoil imports 1.63 -0.50 -23.54 Gasoil exports 3.29 1.76 115.71 Jet fuel imports 0.50 0.33 195.27 Jet fuel exports 0.71 0.68 208.97 Light distillates Stocks 19.56 -0.30 -1.51 Fuel oil imports 5.27 -2.50 -32.39 Fuel oil exports 1.59 -1.38 -46.58 Source: Enterprise Singapore Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US-China power rivalry mars super pollutant goal
US-China power rivalry mars super pollutant goal
San Francisco, 5 August (Argus) — The US wants China to play a greater role in mitigating what it says is the other half of global warming — climate super pollutants — and talks are picking up ahead of the Cop 29 UN climate conference later this year. But trade friction is growing, and Beijing has other priorities. The US' chief climate adviser, John Podesta, and deputy special envoy for climate, Rick Duke, will visit China for talks with their Chinese counterpart Liu Zhenmin later this year. This follows discussions in May that focused on curbing methane emissions. The US unveiled a plan on 23 July to reduce the environmental impact of methane, hydrofluorocarbons and nitrous oxide (N2O) — greenhouse gases (GHGs) considered far more potent than CO2 — and Podesta, who is expected to focus on N2O when he next meets Liu, has stressed the importance of engaging China. "The world is looking to us to find ways where we can work together… like in these non-CO2 spaces," Podesta says. Methane is over 80 times more potent than CO2 over the first two decades after its release. N2O is 270 times more potent than CO2 and takes more than 100 years to break down. Almost two-thirds of global adipic acid — an intermediary for nylon 66 and polyurethane — production occurs in China and the US. China accounts for about 94pc of global annual N2O emissions or 134mn t/yr of CO2 equivalent (CO2e) — owing to a lack of abatement — mainly from adipic acid production. The rest of the world accounts for just 8.5mn t/yr of CO2e. China has had the largest increase in N2O emissions between 1980 and 2020, while emissions from Europe have declined and those from the US have remained relatively stable, according to Oceanic and Atmospheric Research. China's energy sector, dominated by coal mining, contributes about 45pc of its total methane emissions, while agriculture accounts for another 40pc share. But Chinese coal mines employ more than 1.5mn workers, and output accounts for half of global production, San Francisco-based Global Energy Monitor estimates. Chinese president Xi Jinping might prefer to keep unemployment low in an economic downturn. China's second-quarter GDP grew by 4.7pc, lower than a 5pc forecast for the year. In agriculture, the state council's action plan aims to boost grain output by 50mn t to nearly 750mn t by 2030, from a record 695mn t last year. The country's first food security law, which requires provinces to incorporate food security into development plans, came into effect in May. Walking the talk Ultimately, Beijing needs to assimilate reliable pollution data to tackle global warming, but it stopped publishing methane emissions data in 2014, and has no credible N2O emissions data, although it hopes to better regulate carbon emissions reporting through a new plan. China also has no firm target for methane or N2O emissions reductions. It released its first methane plan in November but is not part of the Global Methane Pledge and its current nationally determined contributions do not cover non-GHGs. Then there is the familiar US-China rivalry, although Podesta is optimistic. "We are obviously in a period of competition across a range of issues… particularly in the clean energy space but we also need to find ways we can at least understand where each side is going," Podesta says. Whether Donald Trump or Kamala Harris becomes the next US president, China's green industrial policy is likely to provoke more protectionist measures. And its new subsidy-backed stimulus policy to propel electric vehicle (EV) sales could exacerbate this. Xi said he wants the country to focus on boosting consumption growth in the second half of the year and EVs feature strongly in this agenda. China's heat-trapping emissions by gas (2020) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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