Indonesia’s Pertamina seeks UCO for SAF output

: Biofuels, Electricity, Emissions
24/12/19

Indonesia's state-owned refiner Pertamina is seeking around 500t of used cooking oil (UCO) for trial production of co-processed sustainable aviation fuel (SAF) at its Cilacap refinery in the first quarter of 2025, sources close to the company said.

The refiner is seeking UCO with better specifications from domestic Indonesian suppliers, said traders and sellers. The UCO will likely have a maximum of 2pc free fatty acid (FFA) content — compared with Argus-assessed maximum 5pc FFA Indonesian UCO — as well as low metals and chlorides content, said a trader, although this could not be confirmed with Pertamina.

Earlier in December, Pertamina's refining and petrochemical subholding company, Kilang Pertamina Internasional (KPI), signed an initial agreement with Indonesian UCO supplier, PT Gapura Mas Lestari. Gapura will be supplying UCO to Pertamina in 2027, sources from both companies said.

Indonesia's co-ordinating Ministry for Maritime Affairs and Investment had announced in September that international flights departing the country will be required to use 1pc SAF in their fuel mix in 2027. This will rise to 2.5pc by 2030, 12.5pc by 2040, 30pc by 2050, and 50pc by 2060.

Pertamina's "green refinery" at its 348,000 b/d Cilacap plant aims to process 6,000 b/d of UCO to produce hydrotreated vegetable oil (HVO) and SAF, when its second phase comes on line, targeted to be in 2026. Cilacap is eventually expected to produce around 300,000 kilolitres of HVO and SAF annually.

Pertamina said Cilacap's HVO will be used as a blending component in diesel fuel with better quality, compared with traditional fatty acid methyl ester biodiesel. The firm added that its HVO is also designed to meet stringent market standards in countries like those in Europe and North America. Its SAF will meet Indonesia's demand, which is likely to rise after the country released its national roadmap for SAF development in September.

Cilacap currently produces HVO, but from refined, bleached and deodorized palm oil, and SAF from refined, bleached and deodorized palm kernel oil, a product of palm kernel oil processing.

By Sarah Giam

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25/04/02

Australia’s gas leaders hit out at market intervention

Sydney, 2 April (Argus) — Senior figures in Australia's upstream gas sector have hit out at plans for intervention in the heavily regulated industry, as debate continues on how to best address domestic supply shortfalls later this decade. The federal Coalition in March announced National Gas Plan including a 50-100 PJ/yr (1.34bn-2.68bn m³/yr) domestic reservation system aimed at forcing the three LNG exporters based in Queensland's Gladstone to direct more supply to the eastern states' market. But oversupplying the market to drive down prices would destroy the viability of smaller gas projects, Australian independent Beach Energy's chief executive Brett Woods said at a conference in Sydney on 1 April. The domestic-focused firm, which will export some LNG volumes via its Waitsia project in 2025, warns that such a move by the Peter Dutton-led opposition would reduce export incomes while harming Australia's international reputation. The volumes impacted by the policy could reach around 900,000-1.8mn t/yr. Expropriation of developed reserves is equivalent to breaking contracts with LNG buyers and with the foreign and local investors that the country needs for ongoing economic security, Woods said on 1 April. Domestic gas reservation systems put in place by the state governments of Western Australia (WA) and Queensland, designed to keep local markets well supplied, were "clearly supportable", Woods said, but only future supply should be subject to the regulations. LNG terminals, which represent about 70pc of eastern Australia's total gas consumption and shipped 24mn t in 2024 , should not be blamed for the failure of governments to expedite new supply and plan for Australia's gas future, head of Shell Australia Cecile Wake said in response to the Coalition's proposal. Shell's QGC business supplied 15pc of its volumes to the local grid, with the remainder shipped from its 8.5mn t/yr Queensland Curtis LNG project, Wake added. Canberra has moved to promote gas use as a transition fuel to firm renewable energy in line with its 2030 emissions reduction targets, but progress has been slow as reforming laws appear to be hampering development . The state governments, particularly in gas-poor Victoria and New South Wales (NSW), must recognise the need for locally-produced supply and streamline the approvals processes, especially environmental permits, executives said. But despite pleas for an end to years of interventionist policy — including the governing Labor party's measures to cap the price of domestic gas at A$12/GJ , Australia's fractured political environment and rising cost of living has sparked largely populist responses from its leaders. A so-called "hung" parliament is likely to result from the 3 May poll , with a variety of mainly left-leaning independents representing an anti-fossil fuel agenda expected to control the balance of power in Australia's parliament. LNG debate sharpens Debate on the causes of southern Australia's gas deficit has persisted, and the ironic outcome of underinvestment in gas supply could be LNG re-imports from Gladstone to NSW, Victoria and South Australia, making fracked coal-bed methane — liquefied in Queensland and regasified — a likely higher-emissions alternative to pipeline supply. Several developers are readying for this possibility , which is considered inevitable without action to increase supply in Victoria or NSW, increase winter storages or raise north-south pipeline capacity. Australian pipeline operator APA appears to have the most to lose out of the active firms in the gas sector. APA chief executive Adam Watson this week criticised plans for imports, because relying on LNG will set the price of domestic gas at a detrimental level, raise emissions and decrease reliability of supply, Watson said. The firm is planning to increase its eastern pipeline capacity by 25pc to bring new supplies from the Bass, Surat and Beetaloo basins to market. But investment certainty is needed or Australia will risk needing to subsidise coal-fired power for longer if sufficient gas is unavailable to back up wind and solar generators with peaking power, Watson said. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US oil, farm groups push EPA for steep biofuel mandate

25/04/01

US oil, farm groups push EPA for steep biofuel mandate

New York, 1 April (Argus) — The American Petroleum Institute and biofuel-supporting groups told Environmental Protection Agency (EPA) officials at a meeting today that the agency should sharply raise advanced biofuel blend mandates for 2026. The coalition told EPA that it supported a biomass-based diesel mandate next year of 5.25bn USG, up from 3.35bn USG this year, and a broader advanced biofuel mandate, including the cellulosic category, at 10bn Renewable Identification Number (RIN) credits, up from 7.33bn RINs this year, according to three different groups that attended the meeting. Both mandates would be record highs for the Renewable Fuel Standard (RFS) program. Soybean oil futures and RIN credit prices have risen sharply over the past week on optimism that oil and biofuel interests were working to coordinate volume mandate requests for consideration by President Donald Trump's administration. The coalition is also pushing the agency to set a total conventional volume requirement at 25bn RINs, which would keep an implied mandate for corn ethanol flat at 15bn USG. Ethanol groups had previously eyed a mandate even higher, but limits on the amount of ethanol that can be blended into gasoline make much more-stringent requirements a tough sell to oil refiners. The coalition provided no specific request for the cellulosic biofuel subcategory, where most credit generation comes from biogas. Credits in that category are more expensive, but price concerns have been less potent recently given an EPA proposal to lower previously set cellulosic obligations, signaling that future volume requirements can be cut, too. EPA is aiming to finalize new RFS volume mandates by the end of the year if not earlier, people familiar with the administration's thinking have said. EPA officials signaled at the meeting they were working urgently on the rulemaking. "The agency is intent on getting the RFS program back on the statutory timeline for issuing renewable volume obligation rules," EPA said, declining to comment further on its plans for the rule. The RFS program requires oil refiners and importers to blend biofuels into the conventional fuel supply or buy credits from those who do. Under the program's unique nesting structure, credits from blending lower-carbon biofuels can be used to meet obligations for other program categories. One gallon of corn ethanol generates 1 RIN, but more energy-dense fuels earn more RIN credits per gallon. Some disagreements persist While groups at the meeting were aligned around high-level mandates, how administration officials and courts treat small refinery requests for exemptions from RFS requirements could undercut those targets. Groups present were broadly aligned on asking EPA not to grant widespread exemptions, though there is still disagreement in the industry about how best to account for exempted volumes when deciding requirements for other refiners. Groups present at the meeting today included the American Petroleum Institute and representatives of biofuel producers and crop feedstock suppliers. Some groups that previously engaged with the coalition's efforts to project unity to the Trump administration were not present. And some groups more historically skeptical of the RFS and more supportive of small refinery exemptions — including the American Fuel and Petrochemical Manufacturers — have not been closely involved. Fuel marketer groups notably did not attend the meeting after a representative sparred with others in the coalition at an American Petroleum Institute meeting last month. Some retail groups, including the National Association of Convenience Stores and the National Association of Truck Stop Operators, instead sent a letter to EPA today arguing that the groups pushing steep volumes are discounting potential headwinds to the sector from new tax credit policy. Some of the groups advocating for higher biofuel volumes have pointed to high production capacity and feedstock availability, but have preferred to ignore thornier issues like tax credits, lobbyists say. "An overly aggressive increase in advanced biofuel blending mandates under the RFS will be punitive for American consumers" without extending a long-running $1/USG tax credit for biomass-based diesel blenders, the retailers' letter said. That incentive expired last year and was replaced by the Inflation Reduction Act's "45Z" credit, which offers subsidies to producers instead of blenders and throttles benefits based on carbon intensity. Generally lower credit values for biomass-based diesel — coupled with the US government's delays setting final regulations on qualifying for the credit — have spurred a sharp drop in biofuel production to start the year. Without a blenders credit, the RFS volume mandates pushed by some groups could increase retail diesel prices by 30¢/USG, the fuel marketers estimate, a potential political headache for a president that ran on curbing consumer costs. Other biofuel groups say that extending the credit would be an uphill battle this year, with some lawmakers and lobbyists instead focused on legislatively tweaking the 45Z incentive's rules to benefit crop feedstocks instead of reverting wholesale to the prior tax policy. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

French nuclear modulation to step up this summer

25/04/01

French nuclear modulation to step up this summer

London, 1 April (Argus) — Modulation in the French nuclear fleet, and the consequent gap between nuclear availability and output, is set to grow in the coming weeks as consumption falls in summer and solar output picks up. But the fleet's ability to modulate, touted as one of its great strengths, could be put to the test by growing amounts of intermittent renewable capacity, without any accompanying rise in consumption or in flexible storage capacity. France's flexible nuclear plants are unusual in being able to modulate their output downwards, with each reactor capable of dropping twice a day to 20pc of rated output. Nuclear reactors by their nature have high fixed costs and low variable costs. But operator EdF still reduces production in hours in which prices fall below these low variable costs, widening the gap between the theoretical available capacity and actual production. And low-priced hours became more common last year, particularly in the summer, in the middle of the day and on weekends, as low demand coincided with high nuclear and renewable production. The gap between availability and output across the fleet typically has held at 1-2GW on a monthly basis in recent years. But last summer, it jumped to 4GW on average in each month from April-August ( see availability-output gap graph ). And so far this year it has averaged 2GW, compared with 1.8GW in the same period last year. Modulation has held higher too, with the difference between maximum and minimum daily nuclear output averaging 4.6GW, up from 3.2GW last year ( see modulation graph ). Solar output so far this year has averaged 2.4GW, up by 35pc on 1.8GW in the same period in 2024, after France's solar fleet grew by 5GW, or roughly a quarter, over 2024. As output increases with longer days, this will begin translating into increasingly more output centred around midday, driving stronger modulation. Modulation becomes political Modulation has this year become a political football, with the government promoting the parallel growth of nuclear and intermittent renewables, while an insurgent faction, typically on the political right, claims that more renewables are at best wasteful and at worst actively damage the nuclear fleet. France's nuclear fleet has always modulated, as its large size means residual demand is lower than capacity in low consumption periods. But the extent of this modulation grew sharply last year. Lower consumption contributed to this, as did the growth of renewables. Much of France's renewable capacity is not exposed to market prices, as it is remunerated by feed-in tariffs, and has no incentive to shut down when prices fall below zero. Even the minority of capacity that is required to halt production when prices fall below zero in order to retain subsidy still can produce at prices only slightly above zero, or below the marginal cost that drives EdF to modulate down nuclear output. Operator EdF defends its ability to modulate. The firm's nuclear chief, Etienne Dutheil, last year told a senate commission that the fleet's ability to modulate was the "envy" of other operators. And modulation has "very few effects" as long as it is partial and does not require a total shutdown that makes the plant cool down, he said. The firm told the senate enquiry that thus far, there is "no proven statistical link between modulation and a possible loss of production or increased failures of plants". But modulation could increase wear on reactors' secondary circuits and consequently increase maintenance needs, it said. Proponents of a combined nuclear and renewables approach say that meeting France's goals for electrifying end-uses will require a large volume of extra electricity in the coming years, which potential new nuclear plants — planned for the second half of the next decade at the earliest — will not be able to deliver in time. But opponents decry the combination of nuclear and renewables as wasteful, given that EdF does not save on any of its hefty fixed costs when modulating down nuclear plants to make way for zero-marginal cost renewable output, essentially putting a double burden on consumers that have to pay twice for two separate generating fleets. And others put forward the damage that they say modulation does to the nuclear fleet. Rassemblement National (RN) leader Marine Le Pen raised the topic in a written question to the government last month, asserting that modulation "prematurely ages pipes and welds of reactors". And even some internal EdF documents present modulation in a less benign light than the firm's chiefs. The combination of renewables and nuclear leads to power output fluctuations that are "never insignificant in terms of safety, especially of the control of the reactor core, and the maintainability, longevity and operating costs of our facilities", according to a 2024 report by the company's chief nuclear safety inspector. The PPE3 energy plan, which the government hopes to finalise in law imminently, commits France to rapid increases in renewables deployment. If the plan's objectives are followed, intermittent output will grow in the coming years. The plan also aims for a rapid increase in consumption to soak up the extra power produced. But potential drivers of electrification such as heat pumps and electric vehicles had their subsidies slashed in the 2025 budget. Increased storage capacity could be a way to integrate more intermittent renewables. France already has pumped-storage sites that can add up to 3.8GW of flexible demand during peak output periods. But battery storage is little developed in France, thanks partly to these pumped-storage sites and to nuclear modulation, both of which limit intra-day spreads. As battery capacity grows, it typically quickly saturates the ancillary services market and these wholesale spreads will become increasingly important for making battery projects profitable. By Rhys Talbot Nuclear availability-output gap GW Daily nuclear modulation (max-min output) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Singapore, Peru sign Article 6 carbon deal

25/04/01

Singapore, Peru sign Article 6 carbon deal

London, 1 April (Argus) — Singapore and Peru have signed an agreement to trade carbon credits under Article 6 of the Paris Agreement. The deal will provide the foundation for Singapore to hit its climate targets by buying carbon credits from Peru, while channelling finance to the latter for scaling its climate projects. Carbon credits traded under Article 6 are called Internationally Transferred Mitigation Outcomes (Itmos). They count towards the buyer's nationally determined contribution and must meet several criteria, such as featuring a letter of authorisation from the host country. Market sources have suggested that "logistical barriers" have complicated the issuance of letters of authorisation, heavily limiting the pool of credits that can be traded as Itmos. Towards the end of last month, the UN Framework Convention on Climate Change issued a template for letters of authorisation establishing precisely what information a host country must receive from project developers in order to authorise their credits for trade credits under Article 6. The deal is Singapore's first with a Latin American country, which host some of the largest nature-based projects in the world in reducing emissions from deforestation and degradation and afforestation, reforestation and revegetation project areas. Singapore has signed similar Article 6 agreements with Papua New Guinea, Ghana and Bhutan. By Felix Todd Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU publishes CO2 car standard tweak proposal

25/04/01

EU publishes CO2 car standard tweak proposal

Brussels, 1 April (Argus) — The European Commission has published the long-awaited proposal to give automobile manufacturers more flexibility in complying with the bloc's CO2 reduction targets for cars and passenger vehicles in 2025, 2026 and 2027. Those three years would be assessed jointly, rather than annually, averaging out fleet emission performance. EU climate commissioner Wopke Hoekstra said the additional compliance flexibility shows that the commission has "listened" but the EU is still maintaining its zero-emission targets [for new vehicles from 2035]. "Predictability in the sector is crucial for long-term investments," said Hoekstra. The commission urged the European Parliament and EU member states to reach agreement on the targeted amendment "without delay". German centre-right member Jens Gieseke said there is a "broad majority" in parliament to fast-track approval for May. He noted that the car industry faces over €15bn ($16bn) in penalties for non-compliance with the CO2 standards. A member of parliament's largest EPP group, Gieseke also called for the commission to go further towards technological neutrality. "We need different kinds of fuels, e-fuels, biofuels, every fuel which could help to reduce CO2 should be recognized," he added. This second step, withdrawing the phase-out of internal combustion engines (ICE) from 2035 onwards, Gieseke noted, should come in the last quarter of 2025. German Green MEP Michael Bloss disputed the figure of €15bn in potential fines put forward by automotive industry association ACEA. "Even in the worst-case scenario, the total fines for all car manufacturers would not exceed €1bn," said Bloss. "Car manufacturers have had enough time to adjust their production planning. Many have done so," Bloss said, pointing to Automaker Volvo. Under the current 2019 regulation, fines should be imposed on manufacturers for each year in 2025–2029 when they do not reach their specific fleet-wide target CO2 reductions, compared to 2021 values. But manufacturers have the option to form compliance pools with other firms. "European car manufacturers are already talking to Tesla or Chinese manufacturers about so-called pooling, which must be stopped quickly," said EPP climate and environment spokesman Peter Liese. "We want to maintain climate targets, but not make Elon Musk richer through European legislation," said Liese. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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