Brazil expects R2 trillion in energy transition
Brazil launched its national policy for energy transition, expecting to attract R2 trillion ($364.2bn) in investments in the area over the next 10 years, according to energy minister Alexandre Silveira.
The policy establishes guidelines for the country's energy transition, Silveira said, adding that Brazil will be a leader of the green economy. "[The policy] involves wind, solar, hydro, biomass, biodiesel, ethanol, green diesel, carbon capture and storage, sustainable aviation fuel, green hydrogen," he said. "It is an opportunity to boost local production."
The two-pronged policy includes the national energy transition plan, which will work alongside other government initiatives, such as the growth acceleration program, the climate plan, new industry Brazil and the pact for ecological transformation. It will also count with the support of the International Energy Agency, Brazil's development bank Bndes, energy research firm Epe and the Getulio Vargas Foundation research institute.
The national energy transition plan will focus on getting support from industry participants in the transportation, electrical, mineral and oil and natural gas sectors, and creating legal and regulatory frameworks, to "combat energy poverty and inequalities and create an attractive environment for investments."
The second prong is the national energy transition forum, in which public and private sector participants will get a chance to debate and contribute to the policy.
Brazil's national energy policy council CNPE approved the plan in a meeting on Monday with President Luiz Inacio Lula da Silva and ministers such as Silveira, environmental minister Marina Silva and finance minister Fernando Haddad.
"We are looking to the future," Silveira said. "The energy transition must be fair, inclusive and balanced."
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Judge blocks federal flaring rule in 5 states
Judge blocks federal flaring rule in 5 states
Washington, 13 September (Argus) — A federal judge has blocked the US Bureau of Land Management (BLM) from enforcing restrictions on the volume of natural gas that can be lost to flaring on federal lands in North Dakota, Montana, Texas, Wyoming and Utah. Those states were likely to prevail in a lawsuit that said BLM was "arbitrary and capricious" in finalizing a rule that limited the amount of natural gas that producers could flare on federal land, US District Court for the District of North Dakota judge Daniel Traynor in North Dakota wrote in an order on Thursday. The judge issued a preliminary injunction blocking the rule in those states while the litigation is pending. BLM said it was reviewing the court's ruling. The ruling deals another blow to BLM's efforts to stop operators from flaring vast amounts of natural gas on federal land without paying any royalties. The agency tried to limit the practice through a rule in 2016, but a federal judge blocked those limits in 2020 for veering too far into climate policy, rather than focusing on a mandate to prevent waste of natural resources. BLM's latest attempt at the rule sought to limit leaks from oilfield equipment, in addition to imposing strict limits on "royalty-free" flaring that would have started to apply in December. The agency expected the rule would capture an additional 1.2mn cf/d of natural gas and generate an additional $51mn/yr in royalties. Traynor, in his ruling, said the flaring restrictions and other parts of the rule "add nothing more than a layer of federal regulation on top of existing federal regulation" and was not "reasonably explained". The judge faulted BLM for differences in the regulatory treatment of flaring and venting — releasing gas directly into the atmosphere — even though the two practices would result in the same volumes of natural gas lost to waste. Oil and gas producers largely opposed BLM's regulations, which they argued were duplicative of other regulations and would raise operating costs. US senator John Hoeven (R-North Dakota) said the court ruling was welcome for stopping "overregulation that is handcuffing our domestic energy producers". Routine flaring is set to be largely prohibited under a separate methane rule from the US Environmental Protection Agency, but that rule will not fully take effect until 2029 at the earliest. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Fulcrum Bioenergy files for Chapter 11 relief
Fulcrum Bioenergy files for Chapter 11 relief
New York, 13 September (Argus) — A US company that had set ambitious plans to convert garbage into sustainable aviation fuel (SAF) and attracted investments from major airlines and energy companies filed for Chapter 11 bankruptcy protection this week. Fulcrum Bioenergy and subsidiaries filed for relief before the US Bankruptcy Court for the District of Delaware on Monday, estimating outstanding obligations to over 200 creditors at more than $456mn. A lawyer representing Fulcrum, Robert Dehney, said at a Thursday hearing that the company was on the verge of declaring Chapter 7 bankruptcy, which typically involves liquidation of assets, before a late-breaking bid from an interested company prompted a change in plans. Fulcrum chief restructuring officer Mark Smith said in a declaration to the court that the company wants to initiate the sales process and move through the chapter 11 process on an "expeditious timeline." Judge Thomas Horan on Thursday preliminarily approved various first-day motions, including a request to continue paying Fulcrum's handful of remaining employees. Fulcrum began initial operations at its flagship Nevada facility in 2022, becoming the first company to commercialize a clean fuels pathway based on gasifying garbage and signing offtake agreements with BP, United Airlines, and others. The process at the Nevada site involved receiving and sorting landfill waste, converting that to a synthetic crude oil through a gasification process, and then sending that feedstock to a Marathon Petroleum refinery to be processed into a usable low-carbon fuel. Fulcrum eventually wanted to be able to upgrade the synthetic crude into SAF on site. An archived version of the Fulcrum website, which is no longer online, also set plans for eventual biorefineries and feedstock processing facilities in Indiana, along the US Gulf coast, and in the UK and said its suite of facilities could ultimately support 400mn USG/yr of production capacity. But Fulcrum has reported few updates on its progress more recently, and there were signs of financial struggles. Multiple contractors have filed lawsuits alleging missed payments, while UMB Bank indicated in October last year that Fulcrum had defaulted on debt obligations. The Nevada site ceased operations in May and plans for other US facilities are apparently on hold, though filings indicate that Fulcrum has not yet determined whether to begin restructuring proceedings for any subsidiaries outside the US. Fulcrum's business "represents a revolutionary idea," Smith said in his declaration, but "as with all cutting-edge businesses, the cost of innovation has been born through delays in operations and the inability to anticipate issues based on prior ventures and experiences." There were necessary equipment changes after initial operations begun, but these were expensive and affected by supply chain delays, he said. It is unclear how much feedstock was successfully delivered to Marathon, which declined to comment. The Hong Kong-based airline Cathay Pacific, which had signed an offtake agreement with Fulcrum, told Argus that it never received any SAF. Other companies that had signed offtake agreements did not immediately respond to requests for comment or declined to comment. Fulcrum had been soliciting interest from potential buyers for months and finalized an agreement with a company called Switch LTD, which agreed this month to offer a "stalking horse" bid to purchase Fulcrum's assets for $15mn and issue a loan of up to $5mn to fund Fulcrum's bankruptcy cases. A stalking horse bidding method is a way to arrive at a minimum bid price that other prospective buyers then must exceed. Filings before the court this week did not elaborate on the nature of Switch's business or its reasons for wanting to acquire Fulcrum's assets. Dehney described Switch as a "disinterested third party" and said that Fulcrum has received other interest from prospective buyers, some eyeing all of Fulcrum's assets and some just looking at physical property, intellectual property, or the UK subsidiary specifically. Failure to launch The idea of gasifying waste to produce fuel has long been attractive, since feedstock costs would be low and the Fischer-Tropsch chemical process to convert synthetic gas to liquids has been known for decades. Demand for low-carbon alternatives to jet fuel is high among major airlines, some of which have government mandates to meet or voluntary goals to rapidly scale up SAF consumption by 2030. While Fulcrum's Chapter 11 filing "was not really a surprise" given its recent financial troubles, it could give investors pause about future projects aiming to use similar technology, according to BloombergNEF renewable fuels senior associate Jade Patterson. The large majority of SAF capacity currently and the bulk of planned capacity additions through 2030 come from the more established method of hydroprocessing non-petroleum feedstocks like fats, oils, and greases, Patterson said. Efforts to build gas-to-liquids facilities, by comparison, have faced delays and financial challenges. Red Rock Biofuels had aimed for a refinery converting forest waste to begin operations in 2020 , but the company that later acquired the Oregon site at auction is now targeting a 2026 launch for its clean fuels facility. And Fulcrum's plans for converting waste into fuel go back more than a decade, having inked its first deal with a municipal solid waste supplier in 2008. Kickstarting a market for a novel fuel pathway has also not been helped by a dip over the last year for prices of US federal and state environmental credits, which function as a crucial source of revenue for biofuel producers. There is also uncertainty about how much federal subsidy certain fuels will earn when an Inflation Reduction Act tax credit for low-carbon fuels kicks off next year. But other gas-to-liquids companies are marching on — including DG Fuels, whose president told Argus last month that the company plans to reach a final investment decision by the first quarter next year on a potentially 178mn USG/yr SAF plant in Louisiana that will gasify biomass. The company has earlier-stage plans for similar facilities in Maine and Nebraska. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK High Court rules Cumbria coal mine permit unlawful
UK High Court rules Cumbria coal mine permit unlawful
London, 13 September (Argus) — The UK's High Court has quashed planning permission granted in 2022 for a coal mine in Cumbria, northwest England, ruling the approval was unlawful. The court judgment found the greenhouse gas (GHG) emissions that would result if the coal was burned — known as scope 3 emissions — were not properly considered during the planning process. The proposed mine's developer, West Cumbria Mining, said it would produce a "net zero coal product", using methane capture and abatement, renewable power, "tree planting… and offset of minor residual emissions". But the judgment found the secretary of state at the time, Michael Gove, acted unlawfully in accepting that claim. The UK's Climate Change Act does not allow reliance on international offsets to meet the country's legally-binding carbon budgets. The then-Conservative UK government granted permission for the mine — set to produce metallurgical coal, used in steel production — in December 2022 to West Cumbria Mining. Environmental groups Friends of the Earth and South Lakes Action on Climate Change sought a judicial review, a challenge to the way in which a decision has been made by a public body, focusing on the procedures followed rather than the conclusion reached. The UK's Labour government, elected in July, said it would not defend the planning decision in court. The government will now have to reconsider the planning application, taking into account the "full climate impact", Friends of the Earth said. "West Cumbria Mining will consider the implications of the High Court judgement and has no comment to make at this time", the company told Argus . Today's ruling referenced a landmark June judgment from the UK's Supreme Court, which found that Surrey County Council's decision to permit an oil development was "unlawful because the end use atmospheric emissions from burning the extracted oil were not assessed as part of the environmental impact assessment". The outcome has prompted the UK government to develop new environmental guidance for oil and gas firms . By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil's Bndes unveils line of credit for reforestation
Brazil's Bndes unveils line of credit for reforestation
Sao Paulo, 12 September (Argus) — Brazil's Bndes development bank launched a new reforestation program that has earmarked R1bn ($180mn) in credit for companies to plant native tree species. The new line of credit can be used for a broad range of forestry-related industries and is not limited to projects in the Amazon basin. The program will also fund agro-forestry projects for the production of fruit, nuts, coffee and other products. Of the total funding available for the program, R456mn will come from the Bndes' Climate Fund and the remainder from a line of credit targeting environmental protection. Interest rates for the loans will be capped at 2.5pc/yr for a maximum of 300 months. The bank will not lend more than R100mn to a single project. The new line of credit is in line with the government's goal of replanting 12mn hectares of native vegetation by 2030. Climate authority President Luiz Inacio Lula da Silva said the country will create a climate authority and technical-scientific committee to "support and coordinate the federal government's actions to combat climate change." "Our focus needs to be on adapting and preparing to face weather phenomena," Lula said, without adding details on the authority nor the committee. The announcement comes as Brazil is facing droughts and fires in several regions. The drought throughout the country is the worst in 75 years, according to the national center for monitoring and alerts for natural disasters Cemaden. The drought in the Amazon basin specifically is the worst in 45 years. Southern Rio Grande do Sul state was also ravaged by floods in late April-early May. "We are experiencing a perverse combination of factors that are creating this situation," environment minister Marina Silva said. "Climate change is changing the rainfall pattern, the dry and flood periods, as you are seeing. Sometimes it rains too much, sometimes it rains too little." Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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