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
Brazil advances energy transition legislation
Brazil advances energy transition legislation
New York, 20 December (Argus) — Brazil approved a series of new laws in 2024 that aim to accelerate the energy transition and attract investment as the country prepares to host the UN's Cop 30 climate summit in Belem, Para state, next year. These measures aim to cut emissions in the transport and industrial sectors and curb deforestation, historically the country's largest emissions zone. The transport sector, responsible for nearly 10pc of Brazil's total emissions last year, has become a key target of new government policies. The government's Green Mobility and Innovation program (Mover) offers tax breaks for automakers that invest in decarbonization. Over 100 companies have agreed to invest roughly R130bn ($20.7bn) to produce low-emissions vehicles and auto parts domestically, boosting domestic production of EVs. Additionally, the fuels of the futures law promotes consumption of both first and second-generation biofuels. The law clears the way to increase the mandatory ethanol blend in gasoline to as much as 35pc, up from the current maximum of 27.5pc, while paves the way for higher mandatory biodiesel blends, which are slated to reach 20pc in 2030 from 14pc currently and can potentially rise by 25pc in the future. The law supports domestic production and consumption of sustainable aviation fuel (SAF) and hydro-treated vegetable oil (HVO). The government is estimating that the approval of the legislation will result in roughly R17.5bn in investments in new biorefineries over the next decade. The government is forecasting that the use of biofuels and electricity in the transport sector will increase by 27pc from current levels by the end of 2026 and by 50pc by the end of 2033. Brazil also approved long-awaited low-carbon hydrogen legislation, establishing a regulatory framework and a tax-credit scheme for investment in low-carbon hydrogen. With the regulatory framework in place, several green hydrogen projects are expected to move forward in 2025 and 2026, including three in the Port of Pecem in Ceara state and one green fertilizer project in Minas Gerais. The government sees green hydrogen as a way to reduce emissions in its steel, cement and aluminum industries. Legislation for a regulated carbon market was another milestone, providing another source of revenue for the decarbonization of the economy. The legislation creates the Brazilian emissions trading system (SBCE) and stipulates that companies with over 25,000 t/yr of emissions will be subject to the cap-and-trade system, which is around 5,000 companies covering about 15pc of Brazil's emissions, according to finance ministry estimates. The carbon market is seen as an important tool to help Brazil finance the protection of its tropical forests and to reduce deforestation, which was responsible for nearly half of the country's emissions last year. Final steps Two other bills are awaiting presidential sanction, including one that will clear the way for investments in offshore wind, allowing companies to conduct assessments of areas for future developments. The law will allow the government to hold its first auctions for offshore wind concessions in 2026. The legislature also approved the energy transition acceleration program (Paten) this week to facilitate access to low-cost financing for the country's decarbonization process. The bill creates incentives for companies to substitute fossil fuels with renewable energy. The law will create a new fund, which will be managed by Brazil's Bndes development bank and can finance projects in a wide range of sectors related to the energy transition and decarbonization. With the new legal framework in place, Brazil is hoping to use its position as the host of the Cop 30 climate summit to showcase its potential as a leader in the global fight against climate change. Brazil GHG emissions mn t CO2e Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Power supply crisis to lift Ecuador’s GHG emissions
Power supply crisis to lift Ecuador’s GHG emissions
Quito, 19 December (Argus) — Ecuador's greenhouse gas emissions have likely risen in 2024 as the country grappled with an ongoing power supply crisis because of severe droughts, interim energy minister Ines Manzano told Argus . Although the government has yet to calculate the exact percentage increase in GHG emissions, Manzano confirmed the increase after six months of droughts that led to a significant decline in hydropower output and extensive daily power outages of 3-14 hours from 23 September-20 December. Thermoelectric plants consumed an average of 26,560 b/d of diesel, fuel oil, natural gas and crude residue from January-October 2024, a 35pc year-on-year increase, Petroecuador data show. This trend is expected to continue through the end of the year as Ecuador will have installed and rented an additional 400 MW of thermoelectric capacity, including land-based plants and power barges by December. This expansion represents a 5pc increase in the country's total installed power capacity. In 2023, thermoelectric power plants emitted 3.7mn t of CO2 equivalent (CO2e), marking a year-on-year increase of 48pc, data from the energy ministry show. Drought-related challenges also led to 35 days of blackouts from October-December 2023, increasing reliance on thermoelectric power. That year, emissions from thermoelectric plants accounted for 9pc of the 43mn t of CO2e emitted by the energy sector, up from 6pc in 2022. The outlook for 2025 suggests little relief from the current trend. By April 2025 the government plans to bring online an additional 1.3GW of thermoelectric capacity, compared with April 2024, while adding only one new hydroelectric plant — the 204MW Toachi-Pilaton. By Alberto Araujo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK government underlines its commitment to net zero
UK government underlines its commitment to net zero
London, 18 December (Argus) — The UK government has re-emphasised its commitment to the country's legally binding target of net zero emissions by 2050, and says it is acting either fully or partially on all recent recommendations from the independent advisory Climate Change Committee (CCC). The CCC in July found that "urgent action" was needed if the UK was to hit its climate goals — but it was based on the previous Conservative administration's policy. The current Labour government had taken power just two weeks previously. "The inheritance of this government was that we were not on course to rise to the climate challenge or seize the opportunities of action", the government said this week. It set out in detail its action so far on a variety of issues — including renewable power, sustainable transport, domestic heating and biodiversity — as well as future plans. The government will in 2025 publish an update on its plans for "fully delivering" the fourth, fifth and sixth carbon budgets, it said. Carbon budgets are legally binding and place a restriction on UK greenhouse gas (GHG) emissions over a five-year period. Carbon budgets 4-6 cover the timeframe 2023-37. It will also set the seventh carbon budget — which covers the period 2038-42 — by June 2026, alongside a strategy "setting out the next phase of our pathway to net zero". The UK has cut GHG emissions by 53pc between 1990 and 2023, provisional data show. It met its first three carbon budgets, which collectively covered 2008-2022. The government has taken several steps since winning the July election, including lifting the de facto onshore wind ban, approving renewables projects and awarding the first permit for carbon transport and storage . It has also slightly watered down its pledge of "clean power" by 2030, to 95pc from 100pc, although it also provided clarity around reaching the target in an action plan released last week. And UK prime minister Keir Starmer last month unveiled an ambitious GHG reduction goal at the UN Cop 29 climate summit. The UK has a headline goal of cutting GHGs by 81pc by 2035, from 1990 levels, and will set out its plan to achieve that "in the coming months", the government said this week. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK government weighs ETS, Corsia interaction
UK government weighs ETS, Corsia interaction
London, 16 December (Argus) — The UK government has launched a consultation on how to balance coverage of aviation emissions between its emissions trading scheme (ETS) and the UN's Carbon Offsetting and Reduction Scheme for International Aviation (Corsia). One option being considered by the government is to apply solely the UK ETS to flights leaving the UK to the European Economic Area (EEA) and Switzerland. Corsia would apply to all other international flights from the UK. This would entail no changes to the UK ETS as it is currently structured, and would be "administratively simple to deliver and comply with", the government said. But it would mean not fully implementing Corsia as intended. And as Corsia administration obligations lie with an operator's state, any exemptions to the scheme set by the UK government would only apply to those operators attributed to the UK. The other option under consideration is to apply both the UK ETS and Corsia to these flights, and then compensate operators for the cost of their Corsia compliance, to avoid double-charging for the same emissions. Airlines would be compensated retrospectively following the three-yearly Corsia compliance deadline. This compensation could be financial, or in the form of either UK ETS allowances or reduced UK ETS obligations. The latter would require consideration of UK ETS supply adjustments to account for lower demand from the aviation sector, the government said. Applying both schemes would keep the covered flights fully compliant with Corsia, but could impact supply and prices in the UK ETS depending on how compensation is delivered, the government said. And the need to determine the costs incurred by operators under Corsia could also increase administrative burdens. The consultation is open until 10 February 2025. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Analysis and explainers
Cop: Baku mitigation outcomes disappoint
Cop: Baku mitigation outcomes disappoint
London, 29 November (Argus) — Parties hoping for higher ambition on mitigation — reducing emissions of greenhouse gases — left the UN Cop 29 climate summit in Baku, Azerbaijan, last week disappointed, after their attempts to reach an ambitious outcome were thwarted. Eyes now turn to next year's summit in Belem, Brazil, where an uncertain geopolitical context and US unwillingness to engage could make mitigation commitments all the more difficult to achieve. The conference achieved the operationalisation of article 6 of the Paris agreement , which allows for international trading of carbon credits. A new climate financing goal to follow on from the $100bn/yr promise for 2020-25 was agreed, although the amount on offer and terms left recipient countries deeply disappointed. Developed countries had pushed for the conference's outcomes to recommit to and build on the historic pledge made at last year's Cop in Dubai to transition away from fossil fuels. But the declaration of host Azerbaijan's president Ilham Aliyev that fossil fuels are a "gift from god" may have set the tone for the following two weeks of negotiations. Hopes alighted on two texts to have Dubai outcomes reflected at Baku — the UAE dialogue on the global stocktake and the mitigation work programme (MWP). But parties fundamentally disagreed on what these texts should include. An "agenda fight" on the first day of the conference caused the opening plenary to be interrupted, with parties disagreeing on whether the global stocktake should be classed under matters related to finance. A fudge was agreed, leaving the text under finance, but with a footnote. This would "provide reassurance that the placement does not prejudge the outcome," Cop president Azerbaijan's Mukhtar Babayev said. The first draft text, which came out near the beginning of the second week, still contained diametrically opposed visions on what the dialogue could consist of. Reciprocal accusations of cherry-picking flew. Saudi Arabia insisted that "the scope of the dialogue is on finance, and [the draft text] is advancing mitigation-centric cherry-picking." The Arab Group would "never accept" a text centred around positions which attempt to draw mitigation into the UAE dialogue, Saudi Arabia said. New Zealand claimed that the UAE dialogue was advancing on all elements except mitigation, and said such cherry-picking was unacceptable. Parties could not reach agreement, rejecting the final draft presented in the early hours of 24 November, two days after the official end of the summit. Developed countries criticised what they called a lack of ambition, with Switzerland saying the text contained "attempts to backtrack on the commitments taken last year", and Australia saying "some bodies have sought to slow or stymie discussions." Vulnerable developing states opposed the text too, with Fiji calling the result an "affront" to the Paris agreement. The mitigation work programme (MWP) text — the result of a workstream set up at Cop 27 in Egypt to provide a forum for discussing means to reduce emissions — was gavelled through without objections, but significantly watered down from drafts. The final text excised references in the preamble to temperature targets and net-zero carbon emissions, did not refer to fossil fuels, and mentioned emissions reductions only in specific contexts. The MWP final text did not provide guidance or encouragement for high ambition on the upcoming round of nationally determined contributions (NDCs) — the documents in which states set out their climate goals for the coming decade. States have until February 2025 to publish the new versions of these documents, which will set out their plans for emissions reductions to 2035. Instead the text highlighted their "nationally determined" nature, a warning against attempts to impose top-down targets on emissions reductions on other states. Other initiatives on mitigation appeared to fall by the wayside. Azerbaijan in July announced its plans for a $1bn "climate finance action fund" to be provided by fossil fuel-producing states and firms. But the plan received no more mention at Baku. Another presidency pledge, to increase global power-sector energy storage and build or refurbish 25mn km of grid infrastructure made an appearance in a draft UAE dialogue text, but was cut for the final, non-adopted version. The outcome of Cop 29 leaves a " mountain of work " to be done at the next Cop in Belem in 2025, according to UNFCCC executive secretary Simon Stiell. Countries will have published their latest NDCs by then, but without the spur of a strong outcome from Baku pushing towards high ambition. Developed countries had already set their sights on an ambitious outcome on mitigation in Brazil, and the lack of reinforcement of the Dubai outcome this year will make that all the more difficult to achieve. The likely role of the US in next year's talks offers little consolation. The election of Donald Trump in the weeks before this Cop opened threw a spanner in the works. Trump withdrew the US from the Paris agreement during his last term, and has indicated his intention to do so again. But with the withdrawal process taking one year from notification, and Trump not due to be inaugurated until January, the US will once again be present next year, but probably as an unwilling partner. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop 29 climate finance deal settled but work remains
Cop 29 climate finance deal settled but work remains
London, 28 November (Argus) — The UN Cop 29 climate summit technically achieved its aim of settling the details of a new climate finance goal, but it represents a huge compromise for poorer developing countries and the finance may take some time to reach them. Almost 200 countries agreed — although this was later disputed by some — on a goal that will see developed countries "take the lead" on providing "at least" $300bn/yr in climate finance to developing nations by 2035, to support the latter to decarbonise and implement their energy transitions. It is the new iteration of the current climate finance goal, under which developed countries agreed to provide $100bn/yr to developing nations over 2020-25. The new goal trebles the previous target, but falls short of what developing countries were pushing in Baku — $1.3 trillion/yr, including $440bn-600bn/yr in public finance mostly in grants and concessional finance. Other key aspects of the goal — the contributor base and the structure — remain largely unchanged. It only "acknowledges the need for public and grant-based resources and highly concessional finance", stopping short of calling for grants rather than loans. Developing nations have long emphasised the need for grants and concessional loans, to avoid increasing their debt burdens. The deal does not take inflation into account, and does not define climate finance. Civil society and non-governmental organisations largely dismissed it as weak. Several developing nations and groups have decried the amount, saying it does not meet the minimum requirement to support their energy transition and adapt to the effect of climate change, and that it could further hinder their economic development. For the least developed countries and small island developing states, in particular, the pill is hard to swallow. The goal does not include the sub-targets that they had called for . Some developed parties said that these nations needed more support. But specific targets proved a step too far, with a delegate from Somalia telling Argus that "rich" developing countries did not support such carve-outs. Some ground may have shifted slightly on the contributor base — also a long-running bone of contention. UN climate body the UNFCCC works from a 1992 list of developed and developing countries, but the former group argues that economic circumstances have changed for many countries since then. The Cop 29 finance text "encourages developing country parties to make contributions… on a voluntary basis", much like the Paris Agreement. But it clarifies that any provision of finance would not change a country's status. There was a notable focus during Cop 29 on China's climate finance contributions — which is likely to have supported developed countries' argument for a wider donor base. From billions to trillions The Cop 29 finance text acknowledged the need for trillions of dollars, calling on "all actors… to enable the scaling up of financing to developing country parties for climate action from all public and private sources to at least $1.3 trillion per year by 2035". There was also reference to a "roadmap" for reaching that level, but the wording avoids calling for finance from any particular source. EU climate commissioner Wopke Hoekstra said that, with the help of the multilateral development banks (MDBs) and with the deal's structure, the bloc is confident that $1.3 trillion/yr of climate finance could be reached. But he also pointed to a challenging global context. "This is a significant leap forward in exceptionally difficult geopolitical times," Hoekstra said. The EU is the largest provider of bilateral climate finance, contributing €28.6bn ($30.1bn) in 2023. In the end a "bad" deal proved better than no deal for the least developed and most vulnerable countries. The election of Donald Trump as president of the US will add a new layer of uncertainty to the climate talks next year, and the geopolitical context shows no sign of easing. But some developing countries worry that the finance may take a long time to reach them, if at all. Developed countries have a contested track record for the $100bn/yr goal, which they only met for the first time in 2022 . The new deal has a 10-year timeframe, for the $300bn/yr from developed countries, and for the larger $1.3 trillion/yr aspiration. How much money will flow to developing nations in 2025-2035 is anyone's guess, but work on improving access to funds will be crucial in the meantime. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop: Talks leave ‘mountain of work’ for Brazil in 2025
Cop: Talks leave ‘mountain of work’ for Brazil in 2025
Baku, 24 November (Argus) — The UN Cop 30 climate talks in Brazil next year may take on a new level of importance after countries at the now-completed Cop 29 in Baku, Azerbaijan, left some significant issues on the table, most notably now to keep the world on track to meet the goals of the Paris Agreement. Negotiators in Baku completed their work just after 05:30 local time (01:30 GMT) on Sunday — nearly a day and a half after the scheduled end of the Cop — with a deal on climate finance that has left developing countries furious. The Indian negotiator called the finance agreement, which the country opposed after it was gavelled, "nothing more than an optical illusion". She complained that the text was adopted even though they had informed the secretariat they wanted to make a statement before its adoption. Nigeria and Bolivia came out in support to India to say were rejecting the deal, with the latter calling the agreement "an insult". Known as the new collective quantified goal (NCQG), the deal sets a target of "at least" $300bn/yr for developing countries by 2035, with developed countries "taking the lead". The goal is meant to build on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. The finance will come from "a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". This is more than the $250bn/yr first proposed by developed countries. But this is well below the $1.3 trillion, including $440bn-600bn/yr in public finance mostly in grants and concessional finance, sought by developing economies. The delegations salvaged what for a time appeared to be talks headed for collapse, with two groups temporarily walking out of the negotiations. But developing countries indicated that the Baku deals falls far short of what they need to deal with climate change and support their energy transition. "They were never going to be enough," special envoy for climate change and environment for Vanuatu Ralph Regenvanu said. "And even then, based on our experience with such pledges in the past, we know they will not be fulfilled," he said. India's negotiator pointed to the "unwillingness from developed countries to fulfill their responsibilities". This will severely impact growth in developing nations, she added. EU climate commissioner Wopke Hoekstra, the only developed party to take the floor just after the finance deal was agreed, said that increasing the goal three-fold, from $100bn/yr, "is ambitious, needed, realistic and achievable". He said that with the help of the multilateral development banks (MDBs), the bloc is confident $1.3 trillion/yr of climate finance for developing economies could be reached. Baku to Belem The finance deal agreed in Baku calls on all actors "to enable the scaling up of financing" from all public and private sources to at least $1.3 trillion per year by 2035. A "Baku to Belem Roadmap to $1.3 trillion", was launched to that effect. The only other major decision to come out of Baku was the adoption of the rules that will operationalise the international carbon market under Article 6 of the Paris Agreement. Progress on the implementation of the first global stocktake — the main outcome document from Cop 28, which included the historic call to transition away from fossil fuels — was left for next year. The talks failed to overcome a broad north-south divide and were hampered by the finance talks and efforts by some delegations to undo past decisions. Developed countries called for stronger global action on emissions reductions, but developing nations responded that they cannot implement an energy transition without adequate finance. Many Latin American and African nations, as well as island states, also complained during the talks about the lack of mitigation ambition. But countries including Saudi Arabia opposed including language on fossil fuels, or any mention that countries should undertake deep emissions cuts. India even pushed back on the 1.5°C temperature limit of the Paris Agreement, which was reinforced in Dubai last year. The rejected draft text for the stocktake reaffirms "the need for deep, rapid and sustained reductions in greenhouse gas emissions in line with 1.5 °C pathways". It refers to the energy package without going into details, and keeps the door open to "transitional fuels". Parties will revisit mitigation next year in Belem, leaving Baku "with a mountain of work to do," according to UN climate body UNFCCC executive secretary Simon Stiell. Mitigation was always going to be the focus of Cop 30, particularly with countries due to submit their new emissions-reduction pledges, or nationally determined contributions (NDCs), to the UNFCCC by February. But the struggle in Baku could bring new pressure to the Brazilian government. The country's environment minister Maria Silva on Saturday warned that failure in Baku would likely damage the UN process, especially with the US, one of the world's leading emitters, expected to exit the Paris Agreement again after former president Donald Trump takes office in January. By Michael Ball and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop 29 goes into overtime on finance deadlock
Cop 29 goes into overtime on finance deadlock
Developing countries' discontent over the climate finance offer is meeting a muted response, writes Caroline Varin Baku, 22 November (Argus) — As the UN Cop 29 climate conference went into overtime, early reactions of consternation towards a new climate finance draft quickly gave way to studious silence, and some new numbers floated by developing nations. Parties are negotiating a new collective quantified goal — or climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. The updated draft of the new finance goal text — the centrepiece of this Cop — proposes a figure of $250bn/yr by 2035, "from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". This is the developed country parties' submission, the Cop 29 presidency acknowledged. Developing nations have been waiting for this number for months, and calling on developed economies to come up with one throughout this summit. They rejected the offer instantly. "The [$250bn/yr] offered by developed countries is a spit in the face of vulnerable nations like mine," Panama's lead climate negotiator, Juan Carlos Monterrey Gomez, said. Negotiating group the Alliance of Small Island States called it "a cap that will severely stagnate climate action efforts". The African Group of Negotiators and Colombia called it "unacceptable". This is far off the mark for developing economies, which earlier this week floated numbers of $440bn-600bn/yr for a public finance layer. They also called for $1.3 trillion/yr in total climate finance from developed countries, a sum which the new text instead calls for "all actors" to work toward. China reiterated on 21 November that "the voluntary support" of the global south was not to be counted towards the goal. A UN-mandated expert group indicated that the figure put forward by developed countries "is too low" and not consistent with the Paris Agreement goals. The new finance goal for developing countries, based on components that it covers, should commit developed countries to provide at least $300bn/yr by 2030 and $390bn/yr by 2035, it said. Brazil indicated that it is now pushing for these targets. The final amount for the new finance goal could potentially be around $300bn-350bn/yr, a Somalian delegate told Argus . A goal of $300bn/yr by 2035 is achievable with projected finance, further reforms and shareholder support at multilateral development banks (MDBs), and some growth in bilateral funding, climate think-tank WRI's finance programme director, Melanie Robinson, said. "Going beyond [$300bn/yr] would even be possible if a high proportion of developing countries' share of MDB finance is included," she added. All eyes turn to the EU Unsurprisingly, developed nations offered more muted responses. "It has been a significant lift over the past decade to meet the prior goal [of $100bn/yr]," a senior US official said, and the new goal will require even more ambition and "extraordinary reach". The US has just achieved its target to provide $11bn/yr in climate finance under the Paris climate agreement by 2024. But US climate funding is likely to dry up once president-elect Donald Trump, a climate sceptic who withdrew the US from the Paris accord during his first term, takes office. Norway simply told Argus that the delegation was "happier" with the text. The EU has stayed silent, with all eyes on the bloc as the US' influence wanes. The EU contributed €28.6bn ($29.8bn) in climate finance from public budgets in 2023. Developed nations expressed frustration towards the lack of progress on mitigation — actions to cut greenhouse gas emissions. Mentions of fossil fuels have been removed from new draft texts, including "transitioning away" from fossil fuels. This could still represent a potential red line for them. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop party profiles
Lula, Biden reach new energy transition deal
Lula, Biden reach new energy transition deal
Rio de Janeiro, 19 November (Argus) — The US and Brazil have sealed a new partnership to advance the energy transition, despite looming uncertainty over the future of US climate policies under the incoming Donald Trump administration. The partnership was announced following a meeting today between US President Joe Biden and Brazil's Luiz Inacio Lula da Silva on the sidelines of the G20 summit in Rio de Janeiro. Energy transition was one of Brazil's three goals for its G20 presidency, which it handed over to South Africa today. The two countries have agreed to focus on three pillars, the US embassy in Brazil said, as they pursue the dual objective of fostering economic growth and job creation while meeting climate targets like emissions reduction and keeping average global temperatures from rising by more than 1.5°C. These pillars are the acceleration and expansion of clean energy production and deployment, the development of the clean energy supply chain and green industrialization. The partnership intends to mobilize financing from public, private and multilateral development institutions to pursue the decarbonization of the power, transportation, industrial and manufacturing sectors in both countries. This joint effort between the US and Brazil is aligned with their domestic policies, the embassy noted, notably Brazil's new industrial policy and the US' bipartisan infrastructure law and the 2022 Inflation Reduction Act. A commitment to fighting climate change and developing the green economy is a key aspect of Lula and Biden's shared agenda. But both this cooperation and the future of Biden-era clean energy incentives are in question following Trump's victory in the US election. Trump has tapped oil executive and energy transition critic Chris Wright to lead the US Department of Energy (DOE). By Constance Malleret Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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.
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