UN Cop 29
Overview
Argus provides key insights into the developments and discussions at Cop. We shine a light on how they will affect the global energy and commodity markets.
Decisions made at Cop meetings have far-reaching effects on the markets we serve. Almost 200 countries agreed on "transitioning away from fossil fuels in energy systems" and tripling renewable power capacity at the UN Cop 28 summit in Dubai last year.
Progress at the next two meetings will be crucial in transforming ambitions into actions aligned with the Paris Agreement. Countries must get new plans ready for 2025.
This year, Cop 29 will focus on climate finance. It will cover funding energy transition in developing countries, and increasing private sector involvement and sectorial investment. Article 6 and voluntary carbon markets discussions will also take centre stage.
Follow the key developments in energy transition field with our Net zero page and keep up to date with ongoing coverage of these issues by following Argus Media on LinkedIn and on X.
News
Cop: EU says finance draft text not acceptable
Cop: EU says finance draft text not acceptable
Baku, 21 November (Argus) — The latest draft of the text on climate financing presented at the UN Cop 29 climate summit is not ambitious enough on mitigation — reducing emissions — and "clearly unacceptable," EU energy commissioner Wopke Hoekstra said today. Parties must agree at Cop 29, in Baku, Azerbaijan, on a new collective quantified goal (NCQG) — a new climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. The text is the main outcome for the summit. "What we had on our agenda was not just to restate the [Cop 28] consensus but actually to enhance that and to operationalise that," but the text goes in the opposite direction, Hoekstra said. Parties to last year's Cop 28 summit in Dubai made an historic pledge to "transition away" from all fossil fuels. The EU has warned against any backsliding on this pledge . "We cannot accept the view that the previous Cop did not happen," Hoekstra said. A draft text on the mitigation work programme — a process that focuses on emissions reduction — was released by the Cop 29 presidency in the early hours of this morning. It does not mention phasing out or reducing fossil fuels in energy systems, or reference the agreement reached on the latter point at Cop 28 last year. Hoekstra indicated today's text does not provide enough clarity to allow the EU to put a concrete number on the amount of climate finance that should be available. The bloc has insisted the final number for climate financing can come only when other elements, including the structure and contributor base, are settled. But recipient country groups such as the G77 and Like-Minded Developing Countries (LMDC) groups have expressed impatience at the lack of a concrete number. Minor bright spots in the numerous draft texts released overnight include those on Article 6, which governs international carbon credits, Hoekstra said. But the commissioner is "sure there is not a single ambitious country who thinks this is nearly good enough." By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop: Talks on Article 6 near final agreement
Cop: Talks on Article 6 near final agreement
Washington, 21 November (Argus) — Negotiators at the UN Cop 29 climate summit in Baku, Azerbaijan, appear close to a final agreement on the details of an international carbon market under the Paris Agreement. The ministers leading the final discussions on 21 November released updated texts for Article 6.2 and Article 6.4 of the accord that attempt to bridge the gap on remaining issues. It is not yet clear if these are the final texts, but any work left may only involve some "small tweaks", International Emissions Trading Association (Ieta) international policy director Andrea Bonzanni said. Those two sections of the Paris Agreement govern how countries can use carbon credits to meet their greenhouse gas (GHG) emissions-reduction pledges, known as nationally determined contributions (NDCs). Article 6 aims to help set rules on global carbon trade. EU energy commissioner Wopke Hoekstra called Article 6 one area of the talks "where at least the text is a bit encouraging." "We've always been pleading for more progress on Article 6," he said. "We've stressed the tremendous importance of transparency, predictability, credibility of these items." On the key issue of the Article 6 credit registry, the text reflects the idea of a "dual layer" approach that Singapore environment minister Grace Fu suggested on 20 November . The text calls for the creation of a registry to issue and trade credits that would be run by the UN and would be separate from the Article 6 registry, which would only serve an accounting function. "It looks like they managed to make both sides happy," Bonzanni said. The text also says that the inclusion of any emissions credits — known as internationally transferable mitigation outcome (Itmo) units — in the UN registry does not represent any sort of validation of their environmental integrity, in response to concerns raised by the US and others. "There was a concern that if the Itmos are in a UN registry, they may be seen as automatically having legitimacy or UN endorsement," Bonzanni said. The US should be happy with that language, he added. But the EU got only some of what it has sought over the past year. Most notably, the latest text does not include a definition of a "cooperative approach," essentially what it means for countries to buy and sell emissions units under Article 6. An earlier draft of the text included a definition, but there were concerns that it "could have restrained the markets significantly" and created confusion around certain requirements for when countries authorise Itmos, Bonzanni said. "I believe the presidency did a good job by making tough calls." Ieta is not happy with everything in the text, but at the same time "there is nothing harmful" to trading in it, Bonzanni said. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop: New climate finance draft does not bridge divide
Cop: New climate finance draft does not bridge divide
Baku, 21 November (Argus) — The UN Cop 29 presidency has released a new draft text on the key issue of climate finance, but entrenched positions remain with no agreement on an amount, and no explicit reference to reducing fossil fuels in energy systems. The outcome of the finance discussions are inextricably linked to progress on mitigation, or cutting emissions. Developing countries have long said they cannot decarbonise or implement an energy transition without adequate finance. Developed countries are calling for substantially stronger global action on emissions reduction. Countries are working at Cop 29 to decide the next stage of a climate finance goal. Developed countries agreed to deliver $100bn/yr in climate finance to developing nations over 2020-25. The draft, released in the early hours today, streamlines previous iterations. But countries' views on details such as the amount beyond 2025 are set out in separate 'options', illustrating a lack of common ground. The text does not overtly reference phasing out or reducing fossil fuels, although it does call on the fossil fuel industry to align itself with the Paris Agreement and for phasing out inefficient fossil fuel subsidies. It is unclear if there was wide agreement on these points. Countries agreed at Cop 28 last year to "transition away" from fossil fuels. The first option, which roughly covers developing country views, sets out a climate finance goal of upwards of $1 trillion over 2025-35, broken down into provision and mobilisation. The provision element — which developed countries would be called on to provide — is in the billions of dollars, from a $100bn/yr floor, and should be grant or grant-equivalent, according to the draft. Mobilised finance, which could be private finance or even from carbon markets, would make up the rest — although no specific figures are in this part of the draft text. The second option, broadly covering developed countries' position, focuses on the Paris climate agreement that seeks to limit the global rise in temperature to 1.5°C above pre-industrial levels. This option sets a floor of $100bn/yr by 2035 for "collectively mobilising" finance "from a wide range of sources". It outlines a goal of $1 trillion or more for "global finance in climate action… from all sources of finance". The contributor base has long been a point of contention. UN climate body the UNFCCC delineated developed and developing countries in 1992, and the former group has consistently argued that economic circumstances have since changed, requesting a wider contributor base for climate finance. But positions on this appear not to have changed. The first option "invites developing country parties willing to contribute" to do so voluntarily, but says this will not be counted in the official finance goal. The second option notes that developed countries take the lead, but contributions from "countries with the economic capacity to contribute" will be counted. "This is not a text that aims to bridge", non-profit WRI director of international climate action David Waskow said today. He sees "a lot of work to be done". Cop 29 is scheduled to finish on 22 November, but many participants said it is likely to overrun. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop: Australia backs no new coal power call: Correction
Cop: Australia backs no new coal power call: Correction
Corrects missing word in headline London, 20 November (Argus) — Major coal producers Australia and Colombia, along with the EU and 23 other countries including the UK, have pledged not to allow any new unabated coal-fired power generation in their energy systems at the UN Cop 29 climate summit in Baku, Azerbaijan. This comes a day after Colombia, New Zealand and the UK joined a Netherlands-led international coalition focused on phasing out incentives and subsidies for fossil fuels. Most of the coal pact signatories are members of the Powering Past Coal Alliance, under which some countries have committed to phasing out existing unabated coal power generation. Australia is not listed as a member of the alliance, but the cities of Sydney, Melbourne and Canberra are. Unsurprisingly, the list of signatories did not include China or India, the two world's largest coal importers. It also does not include the US, although the country is part of the Powering Past Coal Alliance. "There is no space for new unabated coal in a 1.5°C or even 2°C aligned pathway, yet coal capacity rose by 2pc last year," the pact signatories said today. The pledge focuses on coal-fired generation and does not mention the phasing out of exports or imports. Australia, is the world's second-largest seaborne coal exporter. The country is looking to host Cop 31 in 2026 by outbidding Turkey for the spot. But no realistic policy changes in coal exports is expected from Australia, which will have a federal parliamentary election by May 2025 and winning votes from key coal mining regions in New South Wales and Queensland has proven to be crucial in recent elections. Turkey is on track to overtake Germany as Europe's largest coal-fired generator this year and was not among the signatories of today's coal pledge. Amid calls for a faster phase-down of unabated coal-fired power generation, global coal trade is set to reach a record high of more than 1.5bn t this year , surpassing last year's 1.38bn t, according to IEA data. Coal consumption will probably remain resilient, supported by higher electricity demand growth in China and India. China has not set a new climate plan since 2021, but it is expected to ramp up its ambitions in a new plan due by February 2025. India and Indonesia are strongly encouraging higher coal production to ensure energy security. The US Energy Information Administration (EIA) in September lowered its forecast for US coal-fired generation in this year but raised its expectation for 2025 . By Shreyashi Sanyal Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Analysis and explainers
Cop: Finance deal remains on the cards, despite Trump
Cop: Finance deal remains on the cards, despite Trump
Edinburgh, 11 November (Argus) — Donald Trump's victory in the US election could influence the tone of discussions at the UN Cop 29 climate talks that get under way in Baku, Azerbaijan, today. But world leaders can still agree on a new finance goal for developing countries that has the potential to shape the energy transition for years to come. Parties to the Paris deal this year need to decide on a new finance goal for developing nations — funded by developed nations — 15 years after the current $100bn/yr target was agreed. But negotiations could be "severely undermined" by Trump's victory, according to non-profit IISD's policy adviser, Natalie Jones. Trump pulled the US out of the Paris accords during his previous term in office and has said he will do so again. His election is "a blow in the fight against the climate crisis", admits France's former climate change envoy, Laurence Tubiana, although he insists that "a positive outcome is possible". Unlike in 2016, at Cop 22 in Marrakesh, Morocco, when the election of Trump came as a shock, parties have had time to plan, many observers noted. And the US could still play a role, while other countries take the lead. Developed and developing nations have grasped the urgency of agreeing on a new goal, observers say. "All parties have an interest in reaching an outcome," non-profit World Resources Institute director of international climate action David Waskow says. Technical talks earlier this year failed to progress on key issues, including the amount of finance to be provided and who will contribute. Developing countries called for a floor of at least $1 trillion/yr, but developed countries have yet to put a number forward. The idea of a layered goal with a public finance core gathered support at ministerial meetings last month. China, in June, refused to be drawn into discussions to broaden the contributor base. In October, it reiterated that the goal is an obligation for developed countries, but said other countries can provide support voluntarily, as stipulated in the Paris agreement. Baku is a pivotal summit since new finance will help support more ambitious climate plans in developing countries, which are to be submitted by 2025. And Cop 30 host Brazil could emerge as a broker to pave the way for a successful gathering next year. Brazil is also heading the G20 this year, with finance for developing nations and the reform of multilateral development banks a priority. All about the money In 2021, the IEA projected that emerging and developing economies' emissions would grow by 5 gigatonnes over the next two decades under current policies. "The NCQG [new collective quantified goal] will be a key enabler of the energy transition," civil society organisation Oil Change International's global policy lead, Romain Ioualalen, says, adding that commitments in Dubai last year — including transitioning away from fossil fuels — will not materialise without a finance deal. Also key for Cop 29 will be whether parties can agree rules to unlock carbon markets under article 6 of the Paris accord. There has been progress this year — including the article 6.4 supervisory body adopting standards on methodologies and greenhouse gas removal — even though discussions are moving too slowly. In Baku, the focus will largely remain on environmental integrity, double counting and the role of registries, with US and EU views differing here. And for article 6 talks, too, there is a risk that Trump's victory could slow the pace of progress, although International Emissions Trading Association president Dirk Forrister says he hopes that the Biden administration's negotiators will use what is left of their time "wisely" to advance work on carbon markets. "Progress this year on article 6 can help unleash more private investment to help countries strive for stronger NDCs," he said. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Private sector needs countries to up climate ambitions
Private sector needs countries to up climate ambitions
Edinburgh, 28 October (Argus) — As developed nations look to rope in the private sector to the new finance goal at the UN Cop 29 climate summit, investors in turn are calling on governments to raise policy ambitions to unlock financial flows for the energy transition. Parties must agree at Cop 29 on the new collective quantified goal (NCQG). And developed nations are pushing to include private finance as part of a "multi-layered goal". Around $1.9 trillion/yr is invested in clean energy, but this needs to more than double by 2030 to reach net zero emissions by 2050, according to the IEA. The Institute of International Finance (IFF) says it is for governments to create the conditions to mobilise private capital. This was echoed in two open letters by more than 500 institutional investors — holding a combined $29 trillion in assets — and 100 chief executives, representing $4 trillion in revenues. They called on governments to upgrade their nationally determined contributions — climate plans — to provide "the transparency businesses need for investment". And they called for policies to be economy-wide and sectoral, with derisking mechanisms, and obstacles such as lengthy permitting processes for renewables removed. To ensure private finance flows into green industrial technologies, "governments need to do what has been done for renewables 20 years ago, that is prime the pump", pension fund CDPQ's head of sustainability Bertrand Millot says. "We are prepared to finance but we need a stable policy environment for that." In the US and the EU, the Inflation Reduction Act and REPowerEU have been critical in unlocking private flows — even though some investors find navigating EU regulation cumbersome. "It is not just about policies setting limits on carbon emissions or incentives, but an industrial policy that is designed to create good jobs," non-profit group Ceres' vice-president Kirsten Spalding says. Derisking business But some debt-laden developing economies lack the budget to implement these policies, and can be perceived as too risky. "That's where we have to have developed nations and multilateral development banks [MDBs] step up with blended finance," Macquarie Asset Management Group head Ben Way says. At least $1 trillion/yr of private capital will be needed in developing countries excluding China by 2030 to meet climate and development goals, according to the high-level expert group on climate finance mandated by the UN. MDBs have a crucial role to play to derisk investments and leverage private finance. The reform of global governance institutions is one of the priorities of Brazil's G20. But it is progressing too slowly. Although the World Bank and IMF have taken some steps, they still need to do much more, UN climate body UNFCCC chief Simon Stiell said ahead of the bank's annual meetings in Washington taking place this week. He also called for more honesty on the role of the private sector. One of the main barriers to scaling up private investments is making sure that public finance is being used effectively to derisk new areas, according to think-tank E3G's sustainable finance senior policy adviser Heather McKay. National transition planning and country platforms building on the Just Energy Transition Partnerships, whereby governments will strive to offer long-term policy clarity, could gain traction at G20 or Cop 29. This could help increase confidence, she says. Another obstacle is that a lot of projects in developing nations are not yet at the investment stage. MDBs can work with countries to unlock these and support investment in energy transition sectors, think-tank ODI managing director Hans Peter Lankes says. But institutional investors do not tend to invest in developing economies because of regulations, such as Basel III, and "long-standing habits", so there are huge gaps still to be bridged, he says. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Africa pushes domestic gas role in transition
Africa pushes domestic gas role in transition
Gas could complement renewable power build-out, but guaranteeing supply will require risky investment in infrastructure, writes Elaine Mills Cape Town, 25 October (Argus) — Natural gas has the potential to play a pivotal role in Africa's energy transition, enabling greater energy security for the continent as well as decarbonising its economy — but ensuring domestic demand prospects can compete with regional LNG export opportunities still presents a major challenge. The African Union and African governments have stressed the importance of gas as a bridging fuel for Africa on its journey to achieving equal energy access and net zero emissions. Africa accounts for 40pc of new gas discoveries made globally in the past decade, mainly in Mozambique, Senegal, Mauritania, Tanzania and more recently Namibia. "Its significant natural gas reserves could turn Africa into a key player in the global gas market, while improving energy access for its rapidly growing population," the IEA says. "Africa has a very timely and good opportunity right now," agrees Norwegian state-controlled Equinor's senior vice-president, Nina Koch. "Gas is becoming increasingly important, not only as a transition fuel but as a long-term solution for the energy security challenges that we are facing." Leading African producers Algeria, Egypt, Nigeria and Libya together accounted for over 80pc of Africa's total production of 265bn m³ in 2023. Of this volume, about 115bn m³ was exported, 60pc of it in the form of LNG, according to the IEA. However, governments in sub-Saharan Africa want increasingly to support gas infrastructure investments for domestic consumption to meet their own rapidly rising electricity demand and support industrialisation objectives. According to the IEA, between 2020 and 2023 natural gas consumption in Africa almost tripled to 172bn m³, but still represented only 4pc of global demand. Until now, the role of natural gas in sub-Saharan Africa has been limited, with an estimated share of only 15pc in the energy mix. Nigeria is the largest natural gas market in the region, with an estimated 21bn m³ consumed in 2022, of which 40pc was used for power generation. But Africa's gas demand is projected to increase rapidly, especially in sub-Saharan Africa, where the IEA estimates that it will grow at 3pc/yr and could reach 187bn-246bn m³ by 2030 and up to 437bn m³ by 2050. Complement not compete "Gas as a bridging fuel is particularly important in the sub-Saharan Africa region, where energy demand is growing quickly and renewables cannot yet meet all the needs," Italian firm Eni's regional head, Mario Bello, says. As a lower-carbon base-load power generation fuel than coal or oil, proponents argue that gas can complement the growth of interruptible renewables rather than compete with it. Domestic pricing presents an immediate challenge — widespread subsidised gas retail prices currently mean that 58pc of Africa's natural gas consumed is priced below the cost of supply, according to the International Gas Union. And the rapid rise in sub-Saharan Africa's gas consumption could result in domestic demand outstripping supply in the next 10-15 years, leaving a gap that smaller gas projects could fill, with the growing help of African lenders. The African Export-Import Bank (Afreximbank) has provided financing to support Nigeria's first indigenous FLNG project, with capacity of 1.2mn t/yr to supply the local market. Policy makers in several African gas-producing countries will increasingly support these domestic-oriented schemes in the coming years. In Nigeria, Angola and Senegal, governments are already demanding that gas is used to support electrification and industry rather than for export. New natural gas markets are emerging in Ghana and South Africa, supported by the development of domestic production as well as new import infrastructure, to meet growing electricity generation needs and replace coal and oil use in the power sector. The case of South Africa, the continent's largest economy, shows the kind of challenges that will face Africa's ambitions to develop its gas sector. Gas accounts for less than 3pc of the country's energy mix, but this is growing and the Industrial Gas Users Association (IGUA) of South Africa estimates that gas demand in 2033 could more than quadruple to as high as 800 PJ/yr. South Africa's only primary supplier of gas, Sasol, supplies 185 PJ/yr, of which 160 PJ/yr is imported from Mozambique through the Rompco pipeline. But Sasol's Pande and Temane fields in Mozambique are fast depleting, and the firm has warned that by mid-2028 at the latest it may no longer be able to supply gas to South African industry. Sasol's "unilateral decision" to cut off gas supply "poses an existential risk to large industrial gas users and is likely to lead to the deindustrialisation of the South African economy", IGUA warns. Given long lead times for alternative gas supply solutions, "the governments of South Africa and Mozambique have six months to come up with a new plan and start executing it", energy advisory SLR Consulting's Steve Husbands says. Currently, Mozambique has the most advanced LNG import terminal being developed at Matola, and over the short term, South Africa will be reliant on this facility to meet its gas demand needs, according to IGUA. In the medium term, LNG import terminals are planned at Richards Bay, Coega, and Saldanha Bay. Longer term, upstream gas exploration opportunities exist offshore South Africa and especially on its side of the Orange basin. But the country's domestic ambitions suffered a major setback recently when TotalEnergies decided to quit block 11B/12B, which contains the Brulpadda and Luiperd discoveries that hold a combined estimated 3.4 trillion ft³ (96.3bn m³) of natural gas. Meanwhile, Namibia is due to become a global oil and gas supply hub over the next 10 to 15 years. "South Africa needs to understand that the bargaining position of Namibia and Mozambique is different and it's strong," Husbands says. These countries will be guided by self-interest and they will price according to alternatives, such as exporting LNG. Credit risk IGUA has also focused on facilitating gas energy demand aggregation, whereby industries collaborate to secure cost-efficient gas supply through volume aggregation, the enablement of infrastructure and the dilution of commercial risks. South Africa's industrial development depends on gas, state-owned Central Energy Fund (CEF) chief operating officer Tshepo Mokoka says. To enable this, gas-to-power projects are needed to anchor the development of a large-scale, capital-intensive gas industry, he says. The CEF is working to locate gas-to-power plants of at least 1,000MW at the ports of Richards Bay, Coega and Saldanha Bay. Gas-to-power projects need three to five years of government support to get off the ground, he says. "Without it, the critical LNG infrastructure that is required at the different ports will be sterilised," Mokoka says. For Africa more broadly, a lack of creditworthy utilities as gas offtakers, combined with small-scale and fragmented markets, makes it more difficult to aggregate demand for large developments. These challenges have led to underinvestment in gas processing facilities and transportation infrastructure, which makes developing gas reserves for domestic use a tough sell for investors across the continent. "You need feedstock as well as guaranteed offtake to ensure the economic viability of gas projects," Lekoil chief technical officer Sam Olutu says. "It is important to secure midstream offtake even before an upstream project is commissioned, as it gives you more control over pricing, so that you are not forced to flare the gas." Some governments are increasingly keen on developing industrial capacity in areas that require intensive energy use such as fertilisers or cement manufacturing that will provide enough reliable gas demand to make a project economic. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Oil, gas methane emissions not a Cop 29 focus
Oil, gas methane emissions not a Cop 29 focus
The most powerful short-term contributor to greenhouse gas emissions might get short shrift in Baku, writes Rhys Talbot Edinburgh, 11 October (Argus) — Momentum on methane emissions reductions from the oil, gas and coal sectors might be dwindling as Azerbaijan, which holds the presidency of the UN Cop 29 summit in Baku next month, turns its focus on waste. The Cop 28 talks in Dubai last year could have been a turning point for methane emissions. The conference saw the launch of the Oil and Gas Decarbonisation Charter, which was signed by more than 50 oil and gas companies. They represent 43pc of world oil output and aim at near-zero methane emissions from operations and zero routine flaring by 2030. The summit's final text called on countries to accelerate and cut "non-carbon dioxide emissions globally, including in particular methane emissions by 2030". Methane emissions have long been an underexamined contributor to global warming because of difficulties in detecting and measuring often trace amounts of the powerful greenhouse gas (GHG). But Cop 26 put methane under the spotlight. The Global Methane Pledge (GMP) saw signatories, including the US, the UAE and Saudi Arabia, commit to reducing their overall methane emissions by 30pc by 2030. New countries joined in Dubai and more followed, including Azerbaijan, with the pledge counting 158 participants in March this year. Individual states unveiled unilateral efforts, as the US and Canada presented regulations that could cut methane emissions from hydrocarbons by 75-80pc by the end of the decade. Egypt and Brazil — Cop 27 and 30 hosts, respectively — promised national action plans. But while the energy sector accounts for 36pc of man-made methane emissions, oil and gas producer Azerbaijan has turned its focus on waste, calling on parties to join its Declaration on Reducing Methane from Organic Waste in November. The programme will supplement the GMP, it says. Countries signing the commitment must agree to reduce methane emissions from organic waste in future nationally determined contributions (NDCs) — but it is unclear if this will include the next iteration of them. And, unlike the GMP, the new commitment does not include any concrete emissions-reduction goal. Top trumps The initiative could be seen as an attempt to skirt the biggest issues, and the most controversial ones. The waste sector accounted for only 20pc of human-generated methane emissions last year. Methane emissions from sectors other than hydrocarbons are undoubtedly a problem. Livestock account for 31pc of man-made methane emissions, a larger contribution than oil and gas combined, according to NGO Greenpeace. Agriculture accounted for 40pc of methane emissions last year. The pollutant's warming potential is most acute in the short term, so proven reduction techniques could be an effective win. Countries such as the UK have cut methane emissions from waste by 75pc since the 1990s, by reducing landfill waste and installing landfill methane capturing equipment. Progress at Cop 29 might be iterative, with more countries joining the GMP and announcing cuts including methane in NDCs. But there is little scope for improvement on the latter, with 91pc of countries already including the gas in their plans. And some major emitters of methane remain outside the GMP. China, which on its own accounts for more than 15pc of global methane emissions, is not a member. Neither are the second and fourth-largest emitters India and Russia. China's recent guidelines to accelerate its energy transition did not provide any details on methane cuts. The country has yet to set firm methane-reduction targets, although it agreed in November 2023 to set goals to cover all GHGs. And in the US, regulations to restrict methane emissions are likely to be at risk if Donald Trump wins the presidential election next month. Global methane emissions Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop party profiles
UK ramps up climate action under new leadership
UK ramps up climate action under new leadership
London, 28 October (Argus) — The UK's Labour government, elected in July, has taken the country's climate policy in a new direction, restoring pledges the previous administration scrapped and seeking to funnel investment to renewables. The UN Cop 29 climate summit presents an opportunity for it to follow this up on an international stage. Hosting Cop 26 in 2021 allowed the UK to burnish its climate leadership credentials, but subsequent changes in the Conservative government saw policy reversals. Labour sought to differentiate its position on climate during the election campaign — possibly noting an increase in support for the UK's Green and Liberal Democrat parties, both of which hold firm pro-environment stances. Labour promised to issue no new oil, gas or coal licences — although it said it would not revoke existing permits — and is aiming for zero-emissions power by 2030. Energy minister Ed Miliband in his first week in office lifted the de facto ban on onshore wind, and set up a taskforce to speed the country's path to a decarbonised power grid. The UK has in recent weeks pulled in around £24bn ($31bn) of investment for renewables, including from utilities Orsted and Iberdrola, and announced "up to" £21.7bn in funding over 25 years for carbon capture, use and storage (CCUS) — although it is unclear how the money will be deployed. The government moved swiftly to raise the windfall tax on oil and gas profits, lifting it to an effective rate of 78pc and scrapping one of the investment allowances — although the decarbonisation investment allowance remains in place. And, spurred by a landmark ruling made by the UK's Supreme Court in June, the government pledged new environmental guidance for oil and gas fields by spring 2025. The judgment ruled that consent for an oil development was unlawful, as the Scope 3 emissions — those from burning the oil produced — were not considered. The government has in the meantime halted assessment of any environmental statements for oil and gas extraction, including those already being processed, until the new guidance is in place. The Labour government has declined to defend in court decisions taken by various iterations of the Conservative administration, including the permission granted for a proposed coal mine in northwest England. The High Court quashed that planning permission in September. International stage Miliband has sought guidance from independent advisory the Climate Change Committee (CCC) on the country's new climate plan, known as a nationally determined contribution (NDC). The CCC assessed the previous government as off track to hit legally binding emissions-reduction targets. The UK has cut emissions by half since 1990 and is in line with all carbon budgets to date. But much of this progress was made from a baseline of a high rate of coal-fired power generation, all of which is now shut down. The next stage of the country's decarbonisation will be more fragmented and is likely to pose more of a challenge. The UK has bucked the trend set by some European neighbours by shifting further left with Labour, although the new government has promoted fiscal caution. Climate finance will dominate the talks in Azerbaijan, and the UK has been clear it will continue to contribute. Labour pledged in its manifesto to "return to the forefront of climate action", noting that the previous administration had "squandered [the UK's] climate leadership". Foreign minister David Lammy has embedded climate and nature issues into his foreign policy brief and the government has appointed special representatives for climate and nature. But Cop 29 will prove the first real test of the pledges made, with a global audience watching. UK greenhouse gas emissions Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Southeast Asia's coal phase-out faces slow progress
Southeast Asia's coal phase-out faces slow progress
Singapore, 22 October (Argus) — Southeast Asia remains heavily reliant on coal to meet its energy needs, and although some countries have embarked on initiatives to phase out coal-fired power, they will have to overcome considerable obstacles. Coal is still projected to be the region's second-largest source of energy by 2030 after oil, according to the Asean Centre for Energy's 8th Asean Energy Outlook , released last month. The IEA expects southeast Asia's power demand to rise by 5pc/yr through 2026, with most of that additional demand to be met by fossil fuels. It sees coal's share of the regional power mix edging down in the coming year, but absolute coal-fired generation rising by 4pc/yr through 2025. Regional coal dependency rose to 33pc in 2023 from 31pc in 2022, according to energy think-tank Ember. Coal's share of the mix in Indonesia hit a record 61.8pc in 2023, while its share in the Philippines rose to 61.9pc, making them the region's two most coal-reliant countries. Vietnamese demand is also growing fast, with coal accounting for 57pc of generation in the first half of 2024. But Indonesia and the Philippines have also begun to take steps to reduce their coal dependence, in line with decarbonisation targets. The Monetary Authority of Singapore (MAS) last year launched the Transition Credits Coalition, to use carbon credits for the early retirement of coal-fired plants. Philippine energy firm Acen aims to use the transition credits to accelerate the retirement of the 246MW South Luzon coal-fired facility, and replace it with a clean energy dispatch facility. Indonesia joined the Just Energy Transition Partnership (JETP) in 2022, putting it in line to receive $20bn from international financing partners. Under the JETP, a bank provides a loan to buy the coal-fired plant from the current operator, which receives compensation for debt equity and profits foregone for selling the asset for its early retirement, energy finance specialist at the Institute for Energy Economics and Financial Analysis, Mutya Yustika, told Argus . But the JETP has not been successful because policy makers want a higher proportion of grants than loans, Mutya added. Efforts to retire regional coal-fired plants early have yet to scale up because of a "heavy reliance on concessional capital", which is not enough to mobilise the necessary private capital to finance Asia's large and young fleet of coal-fired plants, a joint report by MAS and consultancy McKinsey said. Locked in and loaded Private sector financiers are also more interested in investing in renewable energy assets that generate returns, Mutya said, rather than taking on a polluting asset until it shuts. The JETP has motivated Indonesia to develop a comprehensive investment and policy plan, but the plan remains aspirational and lacks a clear strategy for implementing investment, Mutya said. Coal plants in southeast Asia are on average less than 14 years old, according to a 2023 report by Climate Analytics. Phasing out young plants is challenging because of recent investments and unpaid debt, so this could lock in their emissions for decades. About 60pc of coal plants in south and southeast Asia are financed by state-owned utilities or based on a single-buyer model, which "shields them from market competition", Climate Analytics said. Most power purchase agreements with state utilitiesin Indonesia and Thailand extend beyond 2030. And Jakarta has yet to signal a move away from coal reliance, while public ownership and state officials' shareholdings in mining operations might complicate this, Mutya said. China, Japan and South Korea dominate financing of regional coal plants, and their support checks renewables' expansion, Climate Analytics said. Unless governments and private-sector investors can reduce risk and raise concessionary funds, new coal-fired generation could stay in the region's energy mix until 2030. By Prethika Nair and Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Africa seeks trillions in climate finance at Cop 29
Africa seeks trillions in climate finance at Cop 29
Africa faces the heaviest economic burden from climate change, and the most uncertainty over funding, writes Elaine Mills Cape Town, 7 October (Argus) — A key priority for African countries at the UN Cop 29 climate talks in Baku next month is to secure a new climate finance goal for developing countries. But as well as serious commitments on an amount, the continent wants increased accessibility and cheaper funding. Regional alliance the African Group of Negotiators (AGN) is seeking a climate finance commitment from developed countries of $1.3 trillion/yr by 2030, under a new climate finance goal currently being negotiated — the so-called new collective and quantified goal (NCQG). The NCQG is the next stage of the $100bn/yr target that developed countries agreed to deliver to developing countries over 2020-25. It was met for the first time in 2022, according to the OECD, but some countries in Africa have complained that the money never reached them. The AGN wants to steer clear of the old target, contesting whether it has even been met. The group says it wants lessons to be learned, especially regarding the quality of the finance and the difficulties countries have had in accessing it. Uganda asks that the new goal avoids "political statements that are not implemented", referring to uncertainties over how the finance was counted and accessed. African states want the funding to come mostly from public sources, largely in the form of grants and highly concessional loans. This should improve borrowing costs and ease debt burdens, which are forcing countries to make trade-offs with critical development needs. The group does not want market-based loans to be counted as climatefinance — the majority of multilateral climate loans were market-based in 2016-22. Most African countries face an unsustainable debt situation that has been worsened by higher global interest rates, AGN chair Ali Mohamed says. "Our focus is on agreed obligations within the multilateral climate process and the need to improve investments to unlock the continent's potential to tackle the climate crisis, which is paralysing most economies," he says. Africa receives only 2pc of total global climate finance, according to think-tank Climate Policy Initiative. The new NCQG must create the right conditions to push that share to at least 30pc, "otherwise it is a failed process", a South Africa negotiator said last month. The heaviest price The first global stocktake at Cop 28 in Dubai last year acknowledged the world is off track in meeting the Paris Agreement's goals, with significant ambition and implementation gaps in mitigation and adaptation, as well as loss and damage, Mohamed says. African countries submitted ambitious nationally determined contributions, but there has not been corresponding financial and technical support for their implementation. "We lack clarity on the amount of current and future funding, capacity building and technical support," Kenya's cabinet secretary for environment, climate change and forestry, Aden Bare Duale, says. This vagueness undermines transparency of support under the Paris accord, and addressing it should be prioritised in the forthcoming negotiations, he says. African countries lose 2-5pc of their GDPs annually and many divert up to 9pc of their budgets responding to climate extremes, according to the State of the Climate in Africa 2023 report by the World Meteorological Organisation. The report serves as a stark reminder of the urgent need for climate action in Africa, where extreme weather events disproportionately impact the continent's socio-economic development, Zambian environment minister Mike Mposha says. "It is African nations who pay the heaviest price," Simon Stiell, head of UN climate body the UNFCCC, says. "But it would be incorrect for any world leader — especially in the G20 — to think ‘It's not my problem'. The economic and political reality — in an interdependent world — is we are all in this crisis together." Climate finance flows and needs in Africa Bilateral climate finance loans in 2016-2022 Multilateral climate finance loans 2016-2022 Multilateral climate finance loans 2016-2022 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canada to push for more climate cash as oil sands grow
Canada to push for more climate cash as oil sands grow
Calgary, 30 September (Argus) — Canada plans to advocate for more cash and accountability at the UN Cop 29 climate talks in Baku, but its record-high oil production and the threat of a general election might complicate its own climate ambitions. The resource-rich country will be pushing for greater financial commitments from Cop countries in November as they look to replace the current, but broadly recognised as inadequate, $100bn/yr target with a new finance goal for developing countries. Canada, like all developed countries, would not say how much it is willing to commit itself. But it favours broadening the goal's contributor base. "Public finance from a relatively small group of developed countries will not be sufficient to meet current needs," federal agency Environment and Climate Change Canada (EEEC) told Argus . The new goal will require "honest reflection". The country in negotiations mentioned the phase-out of fossil fuel subsidies and fossil fuel sector public financing as a mean to increase investments in energy transition sectors, but other key oil-producing countries disagree. Canada's government says it remains focused on the oil and gas industry and expects to see progress on Cop 28's commitment to transition away from fossil fuels. It became the first G20 country to release a framework targeting "inefficient" fossil fuel subsidies last year, accelerating a 2009 commitment to phase out support for its largest source of emissions. This has not stopped investment in Alberta's oil sands from growing, but the federal government is looking to steer more cash towards clean initiatives such as clean hydrogen, clean electricity and carbon capture. The latter could represent a big business for Alberta's producers if subsidised generously. But it could also be a licence to push Canada's crude production beyond its 4.9mn b/d record set last year. Greenhouse gas (GHG) emissions from Canada's oil and gas sector accounted for 33pc, or 217mn t, of the country's total in 2022, according to the National Inventory Report. Cutting them is critical to meet an overall goal of 403mn-439mn t by 2030, but the Office of the Auditor General of Canada says the country is only on track to lower them to 470mn t by that date. Domestic politics And Canada's climate ambitions might be at risk, with the Liberal minority government facing a general election no later than October 2025. Prime minister Justin Trudeau's popularity has dropped to the benefit of Conservative opposition leader Pierre Poilievre. Trudeau has resisted calls from within his party to step down, while Conservatives prepare for what they call a "carbon tax election". They want to axe the federal carbon tax, tanker bans and regulatory burdens. They promote pipelines and energy independence using a mix of energy sources, including fossil fuels, as part of a "gradual transition" to a low-carbon future, and say "the provinces should be free to develop their own climate change policies". Canada's 10 provinces hold jurisdiction over natural resources and that has posed a serious dilemma for the Liberals as they make climate promises on the international stage. Leading oil province Alberta will be sending a delegation to Cop to promote its own emissions-reduction strategies, and counter those of federal environment minister Steven Guilbeault, as the provincial government slams Ottawa's "punitive regulations" and says its climate policies are unrealistic. Trudeau's pursuit of winding down the oil sands was already tricky considering a state-owned pipeline is effectively subsidising the industry by C$8.7bn ($6.45bn), according to non-profit International Institute for Sustainable Development. Export capacity to the Pacific coast tripled to 890,000 b/d when the Trans Mountain Pipeline Expansion opened this year, underpinning growth plans for Canadian oil. By Brett Holmes Canada GHG emissions by sector Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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