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US-China power rivalry mars super pollutant goal

  • : Emissions, Petrochemicals
  • 24/08/05

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)

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24/08/06

Renewable energy carbon credits not eligible for CCP

Renewable energy carbon credits not eligible for CCP

London, 6 August (Argus) — The integrity council for the voluntary carbon market (ICVCM), a non-profit governance body, said carbon credits from renewable energy projects will not be eligible for its core carbon principles (CCPs). Renewable energy credits issued under eight current carbon methodologies "fail to meet the CCP Assessment Framework requirements on additionality because they are insufficiently rigorous in assessing whether the projects would have gone ahead without the incentive of carbon credit revenues," the ICVCM said. This move automatically excludes 236mn unretired credits or around a third of the supply within the voluntary carbon market. The ICVCM also rejected a methodology for projects reducing the release of sulphur hexafluoride (SF6), also because of weak additionality components. This refers to the methodology AM0065 under Verra's carbon crediting programme, which currently only covers one project in the US for a total of 2.64mn credits issued, of which just 185,000 are unretired. ICVCM's decision only covers current renewable energy methodologies and does not exclude the possibility of reviewing more rigorous approaches. "Renewable energy projects financed by carbon credits still have a role to play in the decarbonisation of energy grids... more robust methodologies would unlock finance for a new wave of renewable energy projects in places where they are most needed ," ICVCM chair Annette Nazareth said. This refers to renewable energy projects set up in countries with financial and legislative barriers, probably including most of the UN least developed countries (LDCs). The ICVCM has also approved a new methodology — Verra's AM0023 — covering methane leaks, mainly in Bangladesh and Uzbekistan, which accounts for 19mn unretired credits, taking the total of unretired credits eligible for CCPs to 27mn or 3.6pc of the supply in the voluntary carbon market. Assessments of key carbon methodologies such as improved forest management (IFM) or afforestation, reforestation and revegetation (ARR) are now concluded and the council's board is expected to make final decisions "soon", the ICVCM said. Assessments of other popular credits such as reducing emissions from deforestation and forest degradation (REDD+) or clean cookstoves are due within the coming months. By Nicola De Sanctis 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


24/08/05
24/08/05

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.

China to set hard targets for curbing CO2 emissions


24/08/02
24/08/02

China to set hard targets for curbing CO2 emissions

San Francisco, 2 August (Argus) — China is planning a shift in the way it controls greenhouse gases, specifically carbon dioxide (CO2) emissions, in a move that could support progress in its national emissions trading scheme (ETS), although it is unclear what emissions levels will be targeted. The country currently measures CO2 against economic growth, or emissions per unit of GDP in what is known as carbon intensity. This allows it to tout progress despite rising emissions so long as these do not rise faster than GDP. But it plans to change this. Beijing aims to incorporate CO2 indicators and related requirements into national plans and establish and improve local carbon assessments in a goal to improve CO2 statistical accounting. This will affect sectors including the power, steel, building materials, non-ferrous metals, and petrochemicals sectors, according to a state council work plan issued on 2 August. It will evaluate CO2 emissions of fixed asset investments and conduct product carbon footprint assessments while local governments will implement provincial carbon budgets that could enter trials in 2025. The latter will involve a wide range of industries including oil, petrochemicals, coal-to-gas, steel, cement, aluminium, solar panels manufacturing and electric vehicles, among others. Beijing is hoping such measures will allow it to set hard targets for CO2 emissions from 2026-2030, although the government will still prioritise intensity control in the meantime in what it calls a ‘dual-control mechanism' — switching from controlling intensity to actual emissions of CO2. Provinces are expected to be allowed to further refine this dual control mechanism, suggesting it will may give localities some leeway to adjust. China's ETS currently includes only the power sector due in large part to challenges collating accurate CO2 emissions data from other sectors, although it is expected to include other sectors like aluminium into the scheme soon. China unveiled new regulations for its ETS earlier this year, aiming to crack down on falsification of data. It sees the ETS as a tool to help it meet a goal to peak carbon emissions before 2030 and reach carbon neutrality before 2060. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Chemical markets prepare for Canadian rail strike


24/08/02
24/08/02

Chemical markets prepare for Canadian rail strike

Houston, 2 August (Argus) — Chemical industries in North America are bracing for a potential rail strike in Canada, but some markets expect greater impacts than others. Participants across a variety of industries have expressed greater certainty that a rail strike is now likely after momentum for a strike several months prior had fizzled out. The Canadian Industrial Relations Board (CIRB) is making considerations that are due to be posted no later than 9 August, with some market participants expecting a strike to be called somewhere within 72 hours thereafter. The CIRB is evaluating what, if any, materials would be constituted as essential to move even during a strike. Chlorine The chlor-alkali market has raised concerns about a potential strike, with some suppliers of chlorine and hydrochloric acid (HCl) in Canada pushing for a strike to be delayed or for its products to be considered essential. Chlorine and HCl are both used in water treatment, and suppliers have said a prolonged stoppage in rail service without proper considerations for such products could endanger some municipal water supplies. In the lead up to a potential strike, Canadian chlor-alkali producers and their US counterparts positioned close to the Canadian border have been trying to build up buyers' on-site inventories as a precaution. Producers have warned, however, that such contingency plans only work if the strike is not prolonged, as stoppages lasting longer than a few weeks could be problematic. Wildfires across central Canada have been complicating the efforts to ensure downstream inventories, as the fires have encroached on crucial rail lines and delayed or rerouted supply. Polymers In the polymers markets, polyethylene (PE) and polypropylene (PP) producers in Canada, including Nova Chemicals and Heartland Polymers, made advanced preparations for a rail strike back in May. Both companies had moved some inventories in advance to storage warehouses in the US to limit supply disruptions to US customers. In addition to storage on the US side, sources said the Canadian producers were also making plans for storage on the Canadian side so they could continue to operate, even if railcars were no longer moving. As long as a strike would not last more than a few weeks, most market participants said they believed there would be minimal disruption to the overall market. An extended strike would likely result in some shipping delays, but producers on the US side could raise operating rates and potentially help to fill in any supply gaps. Polyvinyl chloride (PVC) customers in Canada had stocked up on supply back in May as well, with minimal concerns of disruption so long as any stoppage did not drag on. Some pipe producers with plants in Canada have also said the need to stock up on inventory has been lessened due to Canada's weaker economy and construction sector. Polystyrene (PS) distributors have been positioning resin supply in the northeast and Midwest to quickly move across the border if need be, but warehouses in Canada were reportedly oversupplied on PS and turning away extra railcars. Recycled polymers market participants indicated that with current low demand and low volume trades, the rail strike will likely lead to more truck usage rather than completely halting trades altogether. Chemicals The butadiene (BD) market reported that a Canadian rail strike would impact cross-border trade flows of feedstock crude C4 and BD into the US. A BD producer in Sarnia, Ontario, primarily delivers BD to US customers in the Midwest — a fact that has prompted some concern from US customers about the impacts of a potential rail strike. Some BD buyers have worried that prolonged disruptions to Canadian volumes could add tightness to the domestic US market, especially in cases where consumers are unable to source volumes from the US Gulf coast. Concerns from the ethylene and aromatics markets were muted, and the isocyanate and polyurethane (PU) markets expressed little concern as most buyers were able to bring supply in by truck. Moreover, the vast majority of supply for the isocyanate chain comes from production in the US Gulf, meaning the majority of any transit would be conducted on lines not impacted by the strike. Methanol market participants also did not express significant concerns. By Aaron May, Michelle Klump, Joshua Himelfarb, Zach Kluver, and Catherine Rabe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Aemetis optimistic about LCFS update, tax credit


24/08/02
24/08/02

Aemetis optimistic about LCFS update, tax credit

New York, 2 August (Argus) — US biofuels producer Aemetis expects supportive regulatory changes to boost profits, which have struggled recently on lower prices. Chief executive Eric McAfee said Thursday that expected policy changes in the next year will "significantly increase the value of our products," which include ethanol and renewable natural gas. He cited the California Air Resources Board's (CARB) upcoming meeting in November in which regulators will consider updates to the state's low-carbon fuel standard (LCFS), as well as an Inflation Reduction Act federal tax credit for clean fuels kicking off in January and Environmental Protection Agency action to approve higher E15 ethanol blends in more of the country next year. In California, regulators are weighing tougher targets for the LCFS program, where sagging credit prices over the last year could deter investments in decarbonizing transportation. They have floated an initial step down in carbon intensity limits in 2025 of 7pc or more. McAfee predicted that CARB would ultimately determine that a 9pc stepdown "basically is the minimum required, not the maximum, but the minimum required to move major oil companies forward on buying more credits now". He said that in discussions with CARB officials, it was "pretty clear" that the growth in unused credits available for compliance in future years had exceeded expectations. The bank of credits, which do not expire, hit a record high at the end of the first quarter, according to data released this week. The Inflation Reduction Act's 45Z tax credit, which will tie incentives to a fuel's lifecycle greenhouse gas emissions, could also benefit the company's expanding biogas business. McAfee said there is a "wide range" of potential outcomes, since it is unclear how federal regulators will account for fuels with negative carbon intensity. But he expects a worst-case scenario would still be a subsidy of around $7.20/mmBTU. That credit will also be more generous to sustainable aviation fuel (SAF), although it is unclear when Aemetis' planned SAF and renewable diesel production facility in Riverbank, California, will come on line. The company received key air permits from local regulators in the first quarter this year and that it was "discussing the use of innovative pricing structures with our airline customers to accelerate the financing, construction, and operation of the SAF plant", McAfee said. Aemetis has signed offtake agreements with companies such as Delta Air Lines and Alaska Airlines. The company did not immediately respond to a request for comment on its timeline for starting up the plant, which could produce 90mn USG/yr of SAF and renewable diesel. Aemetis this week reported a net loss of $29.2mn in the second quarter this year, up from a net loss of $25.3mn during the same period last year. The company sold more ethanol and renewable natural gas in the US and less biodiesel in India but received lower prices for many of its products. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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