China and US sign new climate pledge
The prospect of an ambitious deal at the UN Cop 26 climate conference moved a step closer to reality today, with China and the US jointly promising to increase climate action this decade and Beijing indicating it may accelerate efforts to reduce methane and phase out unabated coal-fired generation.
China's lead climate negotiator Xie Zhenhua and US special envoy on climate John Kerry this evening signed the "China-US joint Glasgow declaration on enhancing climate action in the 2020s".
The world's two largest carbon emitters said they are "committed" to meeting the goal of the Paris climate accord to limit global warming to well below 2°C higher than pre-industrial levels and to pursue efforts to prevent temperatures from rising more than 1.5°C. They also pledged to take "enhanced climate actions that raise ambition in the 2020s" to achieve this goal.
"We are working together to limit methane," Kerry said. China has not signed up to the US-led global methane pledge announced last week.
China has committed to develop "a comprehensive and ambitious national plan on methane" by the Cop 27 summit in a year, Kerry said.
China and the US also agree to "make best efforts to phase down unabated coal by the end of this decade", Kerry said. The countries will co-operate on technology, including renewable power generation and carbon capture and storage, to help speed up the coal phase-out, Kerry said.
"I hope in the course of our work it will become clear that they can do it much faster," Kerry said on the coal phase out. This could help other countries see they, too, can reduce coal usage faster than now planned.
"We both see that the challenge of climate change is an existential and severe one," Xie said. "As the two major powers, China and the US must take their due responsibility."
On Article 6, where negotiators are stuck on long-running issues, Xie said: "We hope to finalise all outstanding issues on Article 6 and establish a global carbon market." It must "avoid double counting" of emissions cuts and avoid any carbon leakage.
China and the US say they will announce national determined contributions for 2035 by 2025, providing clarity of pathway. They will establish a working group that will meet regularly throughout the 2020s and will announce concrete plans on issues such as electricity and methane in the first half of next year, Xie said.
Kerry said it was "not his lane" to comment on allegations of forced labour in the Chinese solar industry, noting that he is "the climate guy".
Asked if the US can be sure it will deliver on its own climate plans, Kerry said: "Yes, we will." A $1 trillion infrastructure bill that Congress passed on 5 November contains many of the provisions needed for the US to meet its climate goals, he said.
Congressional Democrats are hoping to pass a budget bill in coming weeks that contains other measures to reduce US greenhouse gas emissions. "I believe they will get there, I believe it is very important for the United States of America, for Republican and Democrat alike," Kerry said.
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Milei's bid to open Argentina's economy passes
Milei's bid to open Argentina's economy passes
Montevideo, 30 April (Argus) — Argentina's congress today approved the government's sweeping economic legislation that could open the door to more private-sector investment in energy and commodities. The bill passed on a 142-106 vote, with five abstentions, after a marathon 20-hour debate. Changes include privatizing some state-owned companies, controversial labor reforms and measures to promote LNG development. The omnibus legislation, which includes 279 articles, is an important victory for President Javier Milei's administration and will change the way many sectors, including energy, operate in the country. Lawmakers aligned with Milei's Liberty Advances party swiftly moved to the second stage of the process, which requires approval of individual articles. The omnibus bill was initially approved in February, but the administration withdrew it after congress failed to approve several key individual articles. That original version included 664 articles. Several of the more controversial articles were brought up immediately after the blanket approval and easily passed. They included an article allowing for privatization of state-run enterprises — national power company Enarsa is on the list — and another delegating to the administration the power to eliminate state agencies without having to consult with congress. Also approved was the article on labor reform. The country's oilseed industry and port workers' unions called a strike the previous day to pressure congress to modify the labor reform. That did not happen. It passed in a separate 136-113 vote. The strike started to fizzle with approval of the legislation. Approval of the package includes several articles the administration says will open the door to major investments in the energy sector. Chapter II specifically covers natural gas, and introduces new regulations for LNG. The chapter includes five articles that allow for 30-year contracts for LNG export projects and guarantees that gas supply cannot be interrupted for any reason. The energy secretariat has six months to design the implementing rules for LNG. The government wants to speed up monetization of the Vaca Muerta unconventional play, which has an estimated 308 trillion cf of natural gas reserves. It is pushing for Malaysia's Petronas to fully commit to a large-scale LNG facility that would start with a $10bn investment. Chapter IX of the legislation creates a new framework, known as the Rigi, for investments above $200mn. It offers tax, fiscal and customs benefits. Companies have two years from implementation of the legislation to take advantage of the Rigi. The chapter on this framework is one of the most complex in the bill, including 56 articles. It includes specific references to energy projects, from power generation to unconventional oil and gas development. The administration claims the legislation will help tame inflation and stabilize the economy. Inflation was 276pc annualized through February, but is declining, and Milei announced that monthly inflation would be in single digits when the March numbers are announced. The country recorded a 0.2pc quarterly fiscal surplus in the first quarter of this year, something not achieved since 2008. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
G7 countries put timeframe on 'unabated' coal phase-out
G7 countries put timeframe on 'unabated' coal phase-out
London, 30 April (Argus) — G7 countries today committed to phasing out "unabated coal power generation" by 2035 — putting a timeframe on a coal phase-out for the first time. The communique, from a meeting of G7 climate, energy and environment ministers in Turin, northern Italy, represents "an historic agreement" on coal, Canadian environment minister Steven Guilbeault said. Although most G7 nations have set a deadline for phasing out coal-fired power, the agreement marks a step forward for Japan in particular, which had previously not made the commitment, and is a "milestone moment", senior policy advisor at think-tank E3G Katrine Petersen said. The G7 countries are Italy — this year's host — Canada, France, Germany, Japan, the UK and the US. The EU is a non-enumerated member. But the pledge contains a caveat in its reference to "unabated" coal-fired power — suggesting that abatement technologies such as carbon capture and storage could justify its use, while some of the wording around a deadline is less clear. The communique sets a timeframe of "the first half of [the] 2030s or in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with countries' net-zero pathways". OECD countries should end coal use by 2030 and the rest of the world by 2040, in order to align with the global warming limit of 1.5°C above pre-industrial levels set out in the Paris Agreement, according to research institute Climate Analytics. The countries welcomed the outcomes of the UN Cop 28 climate summit , pledging to "accelerate the phase out of unabated fossil fuels so as to achieve net zero in energy systems by 2050". It backed the Cop 28 goal to triple renewable energy capacity by 2030 and added support for a global target for energy storage in the power sector of 1.5TW by 2030. The group committed to submit climate plans — known as nationally determined contributions (NDCs) — with "the highest possible ambition" from late this year or in early 2025. And it also called on the IEA to "provide recommendations" next year on how to implement a transition away from fossil fuels. The G7 also reiterated its commitment to a "fully or predominantly decarbonised power sector by 2035" — first made in May 2022 and highlighted roles for carbon management, carbon markets, hydrogen and biofuels. Simon Stiell, head of UN climate body the UNFCCC, urged the G7 and G20 countries to lead on climate action, in a recent speech . The group noted in today's outcome that "further actions from all countries, especially major economies, are required". The communique broadly reaffirmed existing positions on climate finance, although any concrete steps are not likely to be taken ahead of Cop 29 in November. The group underlined its pledge to end "inefficient fossil fuel subsidies" by 2025 or earlier, but added a new promise to "promote a common definition" of the term, which is likely to increase countries' accountability. The group will report on its progress towards ending those subsidies next year, it added. Fostering energy security The communique placed a strong focus on the need for "diverse, resilient, and responsible energy technology supply chains, including manufacturing and critical minerals". It noted the important of "guarding against possible weaponisation of economic dependencies on critical minerals and critical raw materials" — many of which are mined and processed outside the G7 group. Energy security held sway on the group's take on natural gas. It reiterated its stance that gas investments "can be appropriate… if implemented in a manner consistent with our climate objectives" and noted that increased LNG deliveries could play a key role. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UN eyes policy crediting for carbon markets
UN eyes policy crediting for carbon markets
Berlin, 30 April (Argus) — The UN is considering extending the scope of carbon mitigation credit generation under the Paris climate agreement to policy implementation. The UN's climate arm has tasked research institute Perspectives Climate Group senior founding partner Axel Michaelowa with drawing up a paper on how to incorporate policy crediting into the new carbon market being developed under Article 6.4 of the Paris deal. This is expected to be finalised by the UN Cop 29 climate conference in Azerbaijan in November following persistent disagreements between countries at previous summits. Policy crediting is increasingly viewed as crucial amid the rising urgency to scale up mitigation activities, Michaelowa said at an industry event in Zurich yesterday. But policy crediting presents challenges, such as how to determine the additionality of the instruments for mitigation efforts. The World Bank, which developed the first ever policy crediting activity — the Transformative Carbon Asset Facility — in 2016, determines additionality indirectly as the difference between the facility's baseline and actual emissions. Michaelowa believes this is insufficient, urging separate additionality tests to prove the policy instrument mobilises mitigation. An eligible policy instrument typically closes the cost gap between mitigation and business-as-usual technologies, Michaelowa said. "Creditable" policy instruments are mandates, or financial incentives, for deploying low-carbon technologies or behaviours. Policies that reverse previous bad governance by eliminating obstacles to mitigation activities also qualify, Michaelowa said, for example a grid operator enforcing a stop on renewable power growth to ensure grid stability, as investments in the grid would be too costly. Uzbekistan signed an agreement under the World Bank's facility in June 2023 under which it can sell carbon credits issued for the emissions reductions resulting from its cuts to high fossil fuel subsidies. The resulting funds are used to mitigate the impact of rising energy prices on the lowest income consumers, and fund awareness campaigns on the need for cost-covering energy tariffs. Uzbekistan expects to reduce its emissions by 60mn t of CO2 equivalent (CO2e) between 2022-27 as a result of the cuts, of which 2mn-2.5mn t CO2e are attributed directly to the facility's intervention, funded with $46.25mn by donor countries to result in a carbon price of between $18.50-23.12/t CO2e. The World Bank is looking at other countries and sectors to apply the lessons learned from the Uzbekistan pilot, its senior climate finance specialist Nuyi Tao said. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Gas-fired units win Japan's clean power auction
Gas-fired units win Japan's clean power auction
Osaka, 30 April (Argus) — A planned 10 gas-fired generation units have won Japan's first long-term zero emissions power capacity auction, with the awarded capacity totalling nearly 6GW, or auction volumes sought for the first three years of the programme. Japan launched the clean power auction system from the April 2023-March 2024 fiscal year, aiming to spur investment in clean power sources by securing funding in advance to drive the country's decarbonisation towards 2050. The auction generally targets clean power sources — such as renewables, nuclear, storage battery, biomass, hydrogen and ammonia. But the scheme also applies to a new power plants burning regasified LNG as an immediate measure to ensure stable power supplies, subject to a gradual switch from gas to cleaner energy sources. The first auction held in January saw 10 new gas-fired units with a combined capacity of 5.76GW secure the funding of ¥176.6bn/yr ($1.12bn), the nationwide transmission system operator Organisation for Cross-regional Co-ordination of Transmission Operator (Occto), which manages the auction, said on 26 April. All winners can receive the money for 20 years through Occto, which collect money from the country's power retailers, although they need to refund 90pc of other revenue. Winners with a new gas-fired project should start commissioning their plants within six years and then begin refurbishment work to introduce clean fuels and technology within 10 years after commissioning. This means all the projects selected in the 2023-24 auction need to start operations by the end of 2030-31. Hokkaido Electric Power previously planned to begin operations of its Ishikariwan-Shinko No.2 gas-fired unit in December 2034 but it has advanced the start-up to 2030-31. Japan has secured a total of 9.77GW net zero capacity through the 2023-24 auction. Contract volumes include 1.3GW of nuclear, 1.1GW of storage batteries, 770MW for ammonia co-firing, 55.3MW hydrogen co-firing, 199MW biomass and 577MW of hydroelectric power projects, along with the 5.76GW of gas-fired projects. By Motoko Hasegawa Japan 2023-24 decarbonisation power capacity auction result Winner Power plant MW* Planned start-up Hokkaido Electric Power Ishikariwan-Shinko No.2 551 FY2030 Tohoku Electric Power Higashi Niigata No.6 616 FY2030 Kansai Electric Power Nanko No.1 592 FY2029 Kansai Electric Power Nanko No.2 592 FY2030 Kansai Electric Power Nanko No.3 592 FY2030 Chugoku Electric Power Yanai new No.2 464 Mar '2030 Tokyo Gas Chiba Sodegaura Power Station 605 FY2029 Osaka Gas Himeji No.3 566 FY2030 Jera Chita No.7 590 FY2029 Jera Chita No.8 590 FY2029 Total gas-fired capacity 5,756.3 Source: Occto, Argus * Sending end capacity Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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