Cop: Carbon credit standards key step, work continues

: Crude oil, Emissions, Oil products
24/11/12

The adoption of new standards for creating carbon credits under the Paris Agreement on the first day of the UN Cop 29 climate summit yesterday is a key step, but work continues on Article 6.

Cop parties agreed yesterday on standards that will cover credits for greenhouse gas (GHG) emissions removals under Article 6.4 of the Paris accord. The new standards set requirements for developing and assessing projects and establish rules covering carbon removal projects. Article 6 of the Paris accord aims to help set rules on global carbon trade.

Cop 29 lead negotiator Yalchin Rafiyev said the decision is a critical step towards concluding Article 6 negotiations. "This will be a game-changing tool to direct resources to the developing world and help us save up to $250bn/yr when implementing our climate plans," Rafiyev reiterated.

"[The] centralised UN mechanism for markets looks at the projects that are not financially feasible currently and how it can help in providing some stream of revenue," chair for the supervisory body Maria al-Jishi said.

UN climate body UNFCCC chief Simon Stiell said that yesterday's breakthrough was a good start but pointed out that this was "the product of over 10 years of work within the process" and that more work remains to be done.

Cop parties must reach a deal on other aspects of implementing 6.4 and 6.2, which together govern how countries can use carbon credits to meet their GHG emissions-reduction pledges, known as nationally determined contributions (NDCs). Remaining issues include the nature of credit registries, the guidance for inclusion of removals and a solution for dealing with reporting inconsistencies and credit authorisations.

Overlapping articles 6.4 and 6.2 elements are still under discussion and will require a decision at Cop 29, including on how governments and host parties choose to interact with 6.4 on credit authorisation and how national credit registries can interact with the 6.4 registry, al-Jishi said.

By Bachar Halabi

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24/11/12

California RD plant signals later start up

New York, 12 November (Argus) — An long-delayed project to convert a Bakersfield, California, oil refinery to produce renewable diesel (RD) has been given another extension for start up. Global Clean Energy Holdings, working to open a 15,000 b/d RD refinery, and trading house Vitol agreed last week to adjust the terms of a supply and offtake deal singed in June. The initial agreement said that Vitol could exit the agreement if the refinery was not producing at least 5,000 b/d of renewable diesel by the end of October, but that deadline has now been moved to 15 December. Global Clean Energy told Argus last month that it still has "plans in place to complete the remaining work and start up the facility" despite recently cancelling an agreement with its principal contractor. Vitol, after an initial three-year term, can now request up to three one-year extensions of the contract, up from two in the initial deal. The agreement, which cleared the way for former business partner ExxonMobil to exit, stipulates that Vitol will be the exclusive supplier of feedstocks to the plant and exclusive marketer of all fuel and environmental attributes. The revised agreement also says that if Global Clean Energy modifies its credit agreement to allow for more than $330mn in debt financing, then the renewable fuels producer will have to pay Vitol an additional fee that increases as more funds are borrowed. Global Clean Energy declined to clarify whether it had already triggered the obligation to pay Vitol the excess fee, saying that it could not provide more information ahead of filing its quarterly investor report "in the near future." If the plant begins operations as planned, it will have to contend with a challenging investment environment for biorefineries given recently low environmental credit prices and uncertainty around how president-elect Donald Trump will enforce a new federal clean fuels tax credit. At the same time, California regulators agreed last week to update the state low-carbon fuel standard, including by setting stricter carbon intensity targets that start next year. The regulatory updates lifted the prices of credits used for program compliance, which are a crucial source of revenue for companies bringing lower-carbon fuels like renewable diesel into the state. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: MDBs to up climate financing to $170bn/yr by 2030

24/11/12

Cop: MDBs to up climate financing to $170bn/yr by 2030

London, 12 November (Argus) — A group of leading Multilateral Development Banks (MDBs) estimated they could increase climate financing to $170bn/yr by 2030, they said today at the UN's Cop 29 climate conference in Baku, Azerbaijan. The group, made up of the World Bank and nine other MDBs including the European Investment Bank (EIB), today estimated their annual financing for low- and middle-income countries at $120bn/yr by 2030, of which $42bn for adaptation. For high income countries the group plans to reach financing of $50bn/yr, including $7bn for adaptation. The ten MDBs provided a total of $125bn of financing in 2023 , up on $100bn/yr in 2022. Of last year's funding $75bn went to low- and middle-income countries and $50bn to high-income countries. The MDBs hope to leverage an additional $130bn/yr of financing from the private sector, split equally between high-income countries on the one hand and middle- and low-income ones on the other. The split between private and MDB finance implies that the organisations are hoping to increase the efficiency with which they mobilise private finance, according to Melanie Robinson, Global Climate, Economics and Finance Director at NGO World Resources Institute. Financing from MDBs will be one of the main layers of climate financing contributing towards the New Collective Quantified Goal (NCGQ), a new goal on international climate financing for developing countries. Negotiations on the NCQG began today in Baku, with countries' positions "far apart," Robinson said. Participants' stances still differ on the amount of money which should be aimed for, and on which countries should contribute, which is to be expected at this stage of the negotiations, she said. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Brazil to release detailed 2035 climate plan

24/11/12

Cop: Brazil to release detailed 2035 climate plan

Baku, 12 November (Argus) — Brazil will release a detailed climate plan for 2035, covering all sectors of the economy, on 13 November, the country's environment minister Marina Silva said on the sidelines of the UN's Cop 29 climate summit in Baku, Azerbaijan. Brazil had already announced that it will reduce greenhouse gas (GHG) emissions by between 59-67pc by 2035, compared with 2005 levels , but had not released its new nationally determined contribution (NDC) — climate plan to be submitted to the UN Framework Convention on Climate Change (UNFCCC). The new NDC will include emissions reduction targets for the agriculture, transport and industrial sectors and will also reiterate the country's commitment to eliminating deforestation across all biomes, environment minister Marina Silva said. Brazil will seek to increase its agricultural output through productivity gains, rather than expansion into new areas. "We have the potential to double agricultural output without destroying the forest," she added. "We want to lead by example," Silva said. Brazil will host Cop 30 next year in Belem. Regarding the election of Donald Trump as US president, she pointed out that global efforts to protect the environment are not going to be diminished because of political cycles. "The US is an important country and the second largest CO2 emitter globally," Silva said, adding that many US states have "their own independent climate policies, which will not be suspended." Alongside Brazil, two countries have also announced new emissions reduction goals under their updated NDCs: the UAE and the UK . All Cop parties have to submit their 2035 NDCs by February next year. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Algerian bitumen importers eye resumed Spain flows

24/11/12

Algerian bitumen importers eye resumed Spain flows

London, 12 November (Argus) — Algerian bitumen importers are getting ready to resume cargo imports from Spain after the Algerian government signalled last week that trade can restart for the first time in more than two years. The government's decision in June 2022 to suspend a friendship and co-operation treaty with Spain, linked to Madrid's public recognition of Morocco's autonomy plan for Western Sahara, led to the immediate cancellation of previously agreed bitumen cargo movements from Spain to Algeria. In a notice issued by the Bank of Algeria on 6 November, Algerian firms were told they could resume trade with their Spanish counterparts under the usual transaction rules, and both state-owned and private Algerian bitumen importers say they are now free to discuss deals to buy and bring Spanish cargoes to their facilities for supply into the domestic market. No such deals are understood to have been concluded yet, but private importers into western Algerian import terminals like Ghazaouet, Oran and Arzew are well placed because of their relative proximity to Spanish export terminals at Tarragona, Huelva and Cadiz compared with existing supply sources in Italy and even more so when compared with cargoes shipped from Greece or Turkey. Ship brokers said freight rates for standard 5,000t bitumen tanker cargo movements from Tarragona — site of a 1.2mn t/yr Asesa bitumen refinery held in a 50-50 joint venture by Repsol and Moeve, formerly Cepsa, — to Ghazaouet are around $35/t, compared with around $50/t for the Augusta, Italy, to Ghazaouet route. Spanish and international bitumen trading and supply firms are still examining the Algerian developments and seeking clearance "on all sides", as one said today, before resuming bitumen cargo discussions with their Algerian counterparts. That could mean the actual restart of Spain-Algeria flows takes until early 2025. Demand for now may be hindered by a pre-winter slowdown in Algerian road construction and bitumen-consuming activity as weather conditions gradually worsen. Algerian state-owned Sonatrach, which imports cargoes into a raft of bitumen terminals along the country's Mediterranean coast, is largely dependent on substantial term flows from Sonatrach Raffineria Italiana's (SRI) 170,000 b/d refinery and export terminal at Augusta, Sicily, and occasionally takes Greek cargoes from Motor Oil Hellas' Agioi Theodoroi refinery and export terminal at Corinth. Sonatrach is less likely than private Algerian buyers to seek Spanish cargoes, on which it had been highly reliant until 2020 before it switched in a big way to Augusta after it bought the refinery there from ExxonMobil in 2018. Algerian market participants said the recent slippage in bitumen cargo prices linked to Mediterranean high-sulphur fuel oil (HSFO) declines and seasonally weakening bitumen cargo differentials to the regional HSFO cargo prices — coupled with a late season slippage in cross-Mediterranean freight rates over the past few weeks — are all factors conducive to resumed imports from Spain. Spanish fob cargo premiums to Mediterranean HSFO cargoes have dropped from around $10/t in mid-October to $2-3/t last week, while outright prices for Spanish bitumen exports have slipped from $498-499/t fob to $458/t over the same period. By Keyvan Hedvat Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Negotiators positive on remaining Article 6 talks

24/11/12

Cop: Negotiators positive on remaining Article 6 talks

Baku, 12 November (Argus) — Negotiators have a "positive attitude" towards outstanding talks on Article 6 of the Paris Agreement taking place at the UN Cop 29 climate conference in Baku, Azerbaijan, bolstered by the finalisation of crediting mechanism standards yesterday. The adoption of two key Article 6.4 standards on Monday night kicks off remaining talks on a very positive note, Switzerland's lead negotiator on international carbon markets under Article 6, Simon Fellermeyer, said. The approval has set the mood for remaining negotiations, lead Article 6 negotiator for New Zealand Jacqui Ruesga added. Article 6 of the Paris accord aims to help set rules on global carbon trade. Negotiators have already seen a more constructive attitude to discussions since the failed talks at Cop 28 in Dubai last December, Ruesga said. This was spurred on by disappointment at the lack of outcome last year, and supported by a number of informal meetings organised in the lead-up to June's Bonn climate conference, as well as increasing direction from heads of delegation on the subject. Divergence persists on some issues, but negotiators still have this positive attitude, Ruesga said. Different sides have also begun communicating the reasons behind their positions more clearly, Article 6 negotiator for Colombia Adriana Gutierrez added, which she hopes will help bring a result this year. Outstanding questions include how to deal with reporting inconsistencies and credit authorisations. Countries also still disagree on the question of whether Article 6.2's international registry should be capable of holding internationally transferable mitigation outcome (Itmo) units, or simply provide an accounting function. But talks on this point are progressing along the lines of deciding which potential functions of the registry could be integrated or dropped in the view of opposing sides, Ruesga said. The first ever Itmo transfer, which took place between Switzerland and Thailand earlier this year , would have been much easier through such a registry, Fellermeyer said. Gutierrez expects most remaining topics to be concluded ahead of Cop 30 in Belem, Brazil, next year. But some smaller, more technical elements are "bound to stick through" to the next summit, Ruesga said. There is not much appetite to reopen most elements for discussion next year, Fellermeyer said, meaning it could be that they are either concluded in Baku or left in a state of "constructive ambiguity". Agreement in Baku on the remaining Article 6 elements is important to give confidence to potential participants, Fellermeyer said, having encountered parties who declined to cooperate through the mechanism owing to a lack of visibility on the rules. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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