Daily Briefing |
TODAY'S CLIMATE AND ENERGY HEADLINES
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Every weekday morning, in time for your morning coffee, Carbon Brief sends out a free email known as the “Daily Briefing” to thousands of subscribers around the world. The email is a digest of the past 24 hours of media coverage related to climate change and energy, as well as our pick of the key studies published in peer-reviewed journals.
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Today's climate and energy headlines:
- Omicron threatens oil demand recovery, already hit by Europe's rising Covid cases
- Landowners who own a third of England make 'climate-friendly' carbon pledge
- Germany’s energy plan to have limited impact on EU carbon prices, analysts say
- UN shipping talks fail to speed up faster carbon exit
- European gas shortage will push up fertiliser costs and food prices
- Countries with sustained greenhouse gas emissions reductions: an analysis of trends and progress by sector
Reuters reports that “Asian oil refiners’ margins have slumped to the lowest in nearly five months amid worries that the Omicron coronavirus variant could deal another blow to oil demand recovery, already hit by rising Covid-19 cases in Europe”. It adds: “The double-whammy risks derailing the global economic recovery and by extension oil demand, which the International Energy Agency expects to grow by 5.5m barrels per day (bpd) to 96.3m bpd in 2021.” However, another Reuters article says that “oil prices rebounded on Monday as investors looked for bargains after Friday’s slump and on speculation that OPEC+ may pause an output increase in response to the spread of Omicron, but the mood remained cautious with little known about the new variant”. The newswire continues: “Prices jumped over 4%, recovering some ground after plunging more than 10% in the previous trading session. On Friday, oil prices posted their biggest one-day drop since April 2020 as the new variant spooked investors across financial markets.”
Meanwhile, Reuters also reports that Russia’s Gazprom has today reported its highest ever quarterly net profit at 581.8bn roubles ($7.8bn) for the third quarter, reflecting high natural gas prices. It adds: “The Kremlin-controlled company, which a year ago suffered a loss of 251bn roubles, benefited from record-high natural gas prices in Europe, its key source of revenue. Gazprom shares were up by around 3% in early trade in Moscow. Gas prices have surged on tight supply amid a broad economic recovery. Some politicians and experts have blamed Gazprom for not supplying enough gas to alleviate the crisis. The company has said it meets all its obligations on supply.” In related news, Reuters separately reports that “Russia’s deputy prime minister Alexander Novak expects Chinese banks to sign financing deals for Novatek’s Arctic LNG 2 project, the Interfax news agency reported on Monday, as the company seeks to raise funds for its huge future plant”. It adds: “Shareholders in Russia’s Novatek this year approved external financing of $11bn for Arctic LNG 2, which is expected to start production in 2023.”
Elsewhere, in other global energy news, Petrobras of Brazil, Latin America’s biggest oil producer, is to “boost its capital expenditure to $68bn over the next five years, as the state-controlled group bets on its role as a low-cost hydrocarbon supplier in the energy transition”, reports the Financial Times. The newspaper adds: “The company…announced the spending plan for 2022 to 2026…with an almost one-quarter increase compared to its previous budget of $55bn for the period starting this year. The largest part will be spent on oil exploration and production, with the greatest share going towards its lucrative ‘pre-salt’ deep sea reserves. Among the biggest offshore discoveries this century, the company says its fields are cheaper to exploit and have lower carbon emissions per barrel.” Joaquim Silva e Luna, Petrobras’s chief executive, tells the FT: “[Our focus is] to gain time in this race looking towards the 2050 horizon, when the use of fossil fuels could decrease in the world. We want to be an option. As long as there is a need, Petrobras will be [there] because of its efficiency and low-carbon content.”
Finally, Reuters also reports that “China’s thermal coal futures dropped 5.6% on Monday after the state economic planner signalled further regulations for prices of the dirty power-generation fuel”.
A group of organisations who, between them, own and manage a third of England’s land have signed a pact to “make their grounds more climate-friendly by boosting peat bogs, woodlands and rivers”, reports the i newspaper. Signatories to the pledge include the National Trust, RSPB, the National Association for Areas of Outstanding Natural Beauty (NAAONBs), Church Commissioners for England, the Duchy of Cornwall, National Parks England, Soil Association, Wildlife Trusts and Woodland Trust. The newspaper adds: “Managing more than 10.5m acres of countryside, these groups have pledged to cut emissions, create and restore habitats for wildlife and carbon storage, and work with local communities to care for landscapes and deliver benefits for people. The pact also stresses the importance of actively cutting emissions through shifting towards renewable energy, using electric vehicles, cutting agricultural pollution and making buildings more energy-efficient.” Separately, the Independent says that “ministers have been accused of lacking a ‘joined up strategy’ on woodlands, as one government department spends six times more on a timber-burning power station [Drax in North Yorkshire] than another spends on tree planting”. The Daily Telegraph adds that “a minister has vowed to look at where trees burnt for energy in the UK are coming from in the wake of a Telegraph investigation”.
In other UK news, the Press Association says that Our Scottish Future, a thinktank set up by former prime minister Gordon Brown, is calling for a “CopUK” conference to set targets across the UK to cut carbon emissions. The proposed summit, which would feature devolved nations and regional mayors, has been backed by Steve Rotheram, the mayor of the Liverpool city region, and Dan Jarvis, mayor of South Yorkshire. The Independent says that “climate agreements reached in Glasgow this month could come under legal attack from polluting multinationals unless the UK takes urgent action to reform global trade rules, ministers have been warned”. It adds: “A coalition of environmental campaign groups, development charities and unions are urging the government to use its clout as [COP26 president] to drive through change at [this] week’s crucial World Trade Organisation meeting”. The Guardian reports that “homeless people and those in poor housing are at increasing risk from the climate crisis, while suffering the consequences of our dependence on costly fossil fuels, housing charities have warned”.
The Times reports that new research by PwC has shown that “some parts of the country are already doing better than others in the push to create green jobs, potentially exacerbating regional inequalities”, adding: “Yorkshire and the Humber, Northern Ireland and Wales were the lowest ranking regions in a new jobs barometer created by PwC.” The Times also reports that BP plans to build the UK’s biggest “green hydrogen” facility on Teesside to “produce the clean fuel for use in new hydrogen-powered lorries and other transport”. The newspaper continues: “The oil giant said its HyGreen Teesside project aimed initially to develop 60 megawatts of electrolyser capacity to produce zero-carbon hydrogen by 2025 at an estimated cost of about £100m. This would produce enough hydrogen for 1,300 new lorries to run on the green fuel, replacing ones that burn polluting diesel. BP then aims to expand the electrolyser capacity to as much as 500 megawatts by 2030 under plans to turn Teesside into the ‘UK’s first major hydrogen transport hub’.”
Finally, the Guardian says that “there is a new front in Britain’s planning wars…rows over obstructed views and architectural style are being elbowed aside by concerns about the carbon footprint of new buildings”. And the Mail on Sunday promotes an attack on “eco aid” by the Taxpayers’ Alliance, a lobby group which claims to represent “taxpayers” but has long refused to reveal its funders.
Germany’s new energy transition plan, which aims to introduce a minimum carbon price domestically, is “unlikely to have a big impact” on prices in Europe’s carbon market, according to analysts cited by Reuters. The incoming coalition government said last week it could introduce a minimum domestic carbon price of 60 euros/tonne, if a floor price cannot be implemented at an EU wide level. The newswire adds: “The benchmark EU carbon allowance (EUA) price rocketed to a record high above 75 euros a tonne on Thursday, which some market participants attributed to bullish sentiment surrounding the German announcement. However, Florian Rothenberg, EU power and carbon markets analyst at ICIS, said he thought the rally was overdone, with Germany’s push to set a minimum price in the wider EU carbon market likely to fail as previous attempts by countries such as France have done.”
Meanwhile, in other European news, the Guardian reports on an initiative in the Netherlands called More Trees Now which “aims to give away 1m unwanted saplings to farmers and councils with hope idea will spread across Europe”. It continues: “The idea behind it is simple: every day unwanted tree saplings were being cleared and thrown away when those young trees could be carefully collected and transplanted to where they are wanted. Volunteers have already collected thousands of saplings cleared from woodland paths and those unlikely to survive in the forest shade.”
Separately, Bloomberg says that “Iceland’s governing coalition, which spans the entire political spectrum, settled on ruling together for a second consecutive term after tough talks including on energy and climate issues”. It adds: “The new government [has] decided to stop granting oil exploration licenses around Iceland and upgraded its climate target to a 55% reduction in greenhouse-gas emissions by 2030, compared with 2005. It already aimed for carbon neutrality by 2040 and had joined the European Union and Norway in seeking an overall 55% reduction of greenhouse gases by 2030 from the 1990 level, where its share would likely have implied a cut of around 40%.”
Reuters reports that a meeting in London of the UN’s International Maritime Organization (IMO), which had been seeking to speed up decarbonisation of the sector, failed to make progress. The newswire adds: “The sector, which transports about 90% of world trade and accounts for nearly 3% of the world’s CO2 emissions, is under pressure to deliver concrete action including a carbon levy. Earlier this month countries including the US at the COP26 climate summit pushed for…the IMO to adopt a zero emissions target by 2050. So far, its goal is to reduce overall greenhouse gas (GHG) emissions from ships by 50% from 2008 levels by 2050.” Further talks on the issue are scheduled for next year. BusinessGreen says the talks delivered “mixed results, offering progress on black carbon while a resolution for a 2050 zero emission target was quashed”. It continues: “[The IMO] urged member states and shipping operators to reduce the black carbon emissions produced by shipping in the Arctic, in a move that campaigners said would send a strong message to regional and state policymakers to take action to tackle the pollutant.”
John Dizard, the FT columnist, observes perceptively that “freezing in the dark while hungry does not make happy voters”. This is why “Europe’s natural gas shortage is nearly certain to have…serious social and political impacts”. He continues: “Natural gas accounts for about 80% of the variable costs of essential nitrogen fertiliser components such as ammonia. The ammonia price in Europe roughly tripled between January and March. Expensive fertiliser pressures food supplies…At best, over the next year or two European farmers will have to absorb large increases in the price of fertiliser, perhaps skimping on applications of it. That leads to lower crop yields and so higher food prices.” He concludes: “Of course fertiliser prices have surged in the past, only to decline again as producers increased capacity and farmers cut back on their fertiliser use. Spikes similar to what we are seeing now came in early 2008, peaking a few months before the global financial crisis. The difference this time, particularly in Europe, is that climate policy means there is no finance available for natural gas production expansion. Farmers can skimp on potash and phosphate applications for a season or two, but yields will decline quickly without nitrogen fertilisers. The conundrum of cutting carbon emissions while maintaining food production has not been solved.”
In other comment, the Times of India carries a blog post by Gayatri Ghosh in which she says that, as a “young Indian”, she was disappointed to see headlines which “demonised India for derailing” COP26. She cites Carbon Brief analysis showing how small India’s per capital cumulative historic emissions compared to many developed nations: “It seems deeply unfair and irresponsible of Western countries to demand developing countries such as India to commit to large-scale climate action based on their own specific timelines. These countries have already reaped the benefits of industrialisation for their economies while not having to face any of the climate restrictions that currently developing countries have to contend with.”
Finally, the Sunday Telegraph gives space to right-wing commentator Douglas Murray to remark that “today’s climate extremists have terrified a generation”.
A new study finds that 24 countries have achieved “sustained” reductions in annual CO2 and greenhouse gas emissions over 1970-2018. The authors group countries into three types, including “six former Eastern Bloc countries, where emissions declined rapidly in the 1990s and have continued on a downward trajectory since; six Long-term decline countries, which have sustained reductions since the 1970s; and 12 Recent peak countries, whose emissions decline began in the 2000s”. The study finds that emissions reductions were mainly driven by electricity and heat generation – which are the largest source of emissions in most countries – while transport sector emissions have remained stable or continued to grow. “The annual emissions reductions of some countries are within the range of those needed to limit global warming to 2C, but not consistently, nor across all underlying sectors,” the authors add.