Instead of cutting passenger journeys, the mentioned efficiency measures would be far more effective in ensuring an immediate 11% reduction in carbon footprint by using the most efficient aircraft that airlines already have more strategically on routes they already fly, rather than providing lip service to terms like sustainable fuels or carbon offsets.

The researchers analysed over 27 million commercial flights in 2023, covering 26,000 city pairs and nearly 3.5 billion passengers. The methodology revealed enormous variability in emissions efficiency, with some routes producing nearly 900 grams of CO₂ per kilometre for each paying passenger, almost 30 times higher than the most efficient, at around 30 grams of CO₂ per kilometre. Published in Nature Communications Earth & Environment, the study claims to be the first to assess the variation in flights’ operational efficiency around the world.

As aircraft become increasingly fuel-efficient, the amount of carbon dioxide per kilometre flown has been decreasing, but the increase in the number of flights has far outpaced this, leading to higher emissions that are contributing to the climate crisis. Aviation experts predict that by 2050, carbon dioxide emissions from aviation could double or even triple. The new analysis also revealed that more polluting flights were common from smaller airports in the United States and Australia, as well as in parts of Africa and the Middle East. In contrast, airports in India, Brazil, and Southeast Asia were dominated by less polluting flights.

Flights out of airports like Atlanta and New York were among the least efficient, nearly 50% worse than those at the most efficient airports, such as Abu Dhabi and Madrid. The UN aviation body, the International Civil Aviation Organisation (ICAO), is pinning its hopes on an “unambitious and problematic” offsetting scheme, known as CORSIA, to reduce emissions, but has not yet made any airline purchase a carbon credit.

In fact, Khaled Diab, the communications director at Carbon Market Watch, remarked, “No airline has yet been obliged to use a single carbon credit under the UN’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). And when they are, CMW research reveals the European Union’s Emissions Trading System (EU ETS) imposes a carbon price on aviation emissions that is 25 times higher. This clearly demonstrates that cap-and-trade systems are better for the climate and should be expanded.”

Prof Stefan Gössling at Linnaeus University in Sweden, who led the research, said, “We are currently stuck with a global situation where there is no hope that aviation will reduce its emissions.”

According to him, all-economy-seat planes, 95% flight occupancy, and using today’s most efficient aircraft could cut fuel use and therefore emissions by 50%-75%. It would also mean far less sustainable fuel would be needed to make flying nearly emissions-free in the future.

“I always thought air transport was already very efficient, and that is also what airlines like to tell people. But, in reality, it’s very inefficient because of three factors: using old aircraft, transporting people [in premium seats] with lots of space, and often having aircraft that are not fully loaded. In 2023, the average ‘load factor’, seat occupancy, was almost 80%,” Gössling added.

Crunching the details

The study also analysed the efficiency of 26,000 pairs of cities based on the amount of CO₂ emitted per kilometre per passenger, using data from 3.5 billion passengers who flew a total distance of 6.8 trillion km (145 trips to the sun, 577 million tonnes of CO₂ emissions, equivalent to the annual emissions of Germany).

The study found that US flights were 14% more polluting than the global average, China had efficiencies slightly above average, and the UK, the third-largest aviation polluter in the world, had efficiencies slightly below the 84.4g of CO₂ per passenger kilometre average.

The most efficient route was Milan, Italy, to Incheon Airport near Seoul, South Korea (31.6g CO₂/pkm). The least efficient route was in Papua New Guinea, with the second-worst from Ironwood Airport to Minneapolis/St Paul in the US (805g CO₂/pkm).

“While airlines often claim that fuel savings are in their own economic interest, the reality is that many airlines continue to fly with old aircraft, low load factors, or growing shares of premium-class seating,” the researchers noted.

“The most important factor was replacing premium seats with denser economy seating: First- and business-class passengers are responsible for more than three times the emissions of economy passengers, and up to 13 times more in the biggest premium cabins. Other policies that might encourage greater efficiency include softer policies like requiring airlines to disclose an efficiency rating for each route. You wouldn’t want to fly with an airline that is rated F. Market-based policies might include airports charging higher landing fees for more polluting aircraft, which also makes local communities’ air dirtier,” Gössling claimed.

While the efficiency gains that the study identified, such as replacing older, more polluting planes, would bring improvements, they would also confront the reality of an industry operating on low margins. However, Gössling argued that the sector was stuck in a business model that maximised passenger numbers to boost profit and that it could operate fewer, fuller flights with higher ticket prices.

He said that many flights are taken because they are so cheap, commenting, “We know that a lot of air transport demand is induced. If you increase the cost, people will just choose a different type of holiday.”

Facing the reality

The senior vice-president of sustainability at the International Air Transport Association, the trade association for the world’s airlines, Marie Owens Thomsen, told Reuters, “Airlines have a vested interest in reducing fuel burn and maximising load factors, but the order backlog for aircraft exceeds 5,000 planes due to supply-chain failures.”

She further added that real progress in reducing aviation emissions would come from the use of SAF, CORSIA, and the modernisation of air routes.

Aviation accounts for 3% of global greenhouse gas emissions. Still, flying is concentrated among wealthy passengers, with 1% of the world’s population responsible for 50% of aviation emissions, while only 10% of people fly at all in any one year, and 4% fly abroad.

An ICAO spokesperson said its analysis showed that operational improvements could account for 4%-11% of the carbon emission reductions required to achieve net zero, while factors such as cleaner fuel and innovative technologies will do the remainder.

Meanwhile, with the aviation sector racing to decarbonise, how much might the cost of a passenger ticket increase by 2050? Naomi Allen, Head of Research at RAeS (Royal Aeronautical Society), crunched the numbers to find out the reality.

Decarbonising aviation will make the sector more expensive and, therefore, ticket prices will rise, making flights less accessible to passengers. Assuming that 25% of the ticket cost is for fuel, by 2050, the industry will face another dilemma, like fuel cost, including the real value (CAF or SAF), along with the penalties due to non-compliance with the mandate and the cost of GGR (Greenhouse Gas Removal) for any remaining carbon emissions.

On the other hand, the University of Oxford report assumes that fuel (kerosene and SAF) costs and GGR costs are evenly distributed across tickets and are agnostic as to which flights use SAF or not. While the United Kingdom’s SAF mandate does not yet specify requirements for 2050, according to Allen, the industry has assumed that the requirement will be 70% of fuel being SAF, the same as the ReFuelEU mandate requirement.

“The average ERF of the SAF used is assumed to be 70%; this may be an underestimate for PtL SAF by 2050, but it is higher than the ERF typically seen for many other types of SAF at the current time. Assuming Net Zero for the sector in 2050, all net carbon emissions resulting from the fuel outside the mandate and the ERF of the SAF will have to be offset by GGR,” Allen told The Guardian.

The study also ignores inflation between now and 2050, assuming that the price of fossil-fuel-derived kerosene in 2050 will be $700/ton, although the actual price will depend on the pace of decarbonisation in other sectors. The report assumes that the supply of SAF is sufficient to meet demand up to the level of the SAF mandate and that the supply of GGR is unlimited. In reality, SAF and GGR may not be available to the aviation sector in the necessary quantities, as there will be competition for resources between other sectors and scaling constraints.

Greenhouse gas removals by 2050 are expected to be permanent. However, the estimated costs for these removals vary significantly. The World Economic Forum has stated that achieving a Direct Air Capture (DAC) cost of $150 per ton of CO₂ by 2050 is both necessary and feasible. In contrast, the recently published Independent Review of Greenhouse Gas Removals for the British government predicts that the costs for permanent removals in 2050 will be much higher. For the study, GGR prices of $100/ton and $600/ton are used; a midpoint of $350/ton CO₂ is used to capture the probable range due to alternative GGR methods and processes, and significant uncertainty. A midpoint of $350/ton CO₂ is used for some calculations.

It is anticipated that all decarbonisation will come from SAF and GGR, and that other decarbonisation options, such as electrification and hydrogen, will not have a significant impact on aviation emissions (either due to scalability or technology/infrastructure maturity) by 2050. Costs will be affected differently by other decarbonisation strategies. Moreover, the research found that, provided the price of SAF is about as expected or lower, and the cost of GGR is high, then meeting the SAF mandate will, on average, result in lower ticket prices than if Net Zero is achieved entirely through GGR.

On the other hand, if lower GGR costs are achieved, then meeting the SAF mandate is likely to raise ticket prices by 10%-15%. Note that this assumes that enough SAF will be available to meet the mandate, but it was also calculated that if the SAF mandate is not met, then non-compliance penalties could raise ticket prices by as much as 15% more, depending on the extent of the excess demand. The scenario is plausible, given doubts about the ability to scale up the supply of SAF.

The post Is cleaner aviation within reach? appeared first on International Finance.

Bruce Huber, a Professor of Law at the University of Notre Dame, has studied the fossil fuel sector extensively. His work reveals the deep-rooted complexities that underpin these subsidies and the formidable challenges that governments face when attempting to reduce or eliminate them. Let’s explore the mechanisms of fossil fuel subsidies, why they persist, and what the world is trying to do to reform them.

What is a subsidy?

A subsidy is essentially a financial benefit provided by a government to a particular entity or industry. Subsidies come in many forms and can range from obvious direct cash payments or tax incentives to more nuanced mechanisms like tariff protection or relaxed regulations that favour certain industries. These benefits are provided for various reasons: to stimulate economic activity, protect nascent industries, or assist established ones during times of crisis.

While some subsidies are explicit and easy to recognise, such as publicly funded crop insurance or grants for research, others are less visible. For instance, when a government fails to charge industries for the environmental damage they cause, such as air or water pollution, this is also a form of subsidy. By not requiring companies to pay for the full cost of their environmental impact, governments indirectly subsidise their activities.

Subsidies are a widespread feature of the global economy, benefiting many industries beyond fossil fuels. However, the subsidies granted to the fossil fuel sector are uniquely impactful, not only because of their economic scale but also due to their significant consequences for the planet’s climate and environment.

How are fossil fuels subsidised?

Fossil fuel subsidies can take a wide variety of forms, from consumer price support to tax incentives for producers. In many countries, fuel prices are set by the government rather than allowing market forces to dictate them.

For instance, Saudi Arabia caps gasoline prices to make energy more affordable for its citizens. To offset the cost, the government uses revenues from oil exports, which far exceed domestic energy consumption. In the United States, oil companies are allowed to deduct a significant portion of their drilling costs from their taxes. This kind of tax break makes fossil fuel production more attractive by effectively lowering the cost of doing business. In countries like Indonesia, the government sets energy prices below market levels and then compensates state-owned energy companies for the losses they incur.

This form of support ensures that energy remains affordable, particularly for low-income citizens. Some subsidies are less direct. For example, governments often underprice permits for extracting fossil fuels or fail to collect all the taxes owed by producers. The complexity of these subsidies makes it challenging to provide a precise estimate of their total value.

According to a 2022 report by the Organisation for Economic Cooperation and Development (OECD), the annual value of global fossil fuel subsidies was estimated to be around $1.5 trillion. However, the International Monetary Fund (IMF) provided a much higher estimate, placing the value closer to $7 trillion. The discrepancy between these numbers arises from different definitions of what constitutes a subsidy.

The IMF’s definition is broader, including not only direct financial support but also the environmental and social costs that are not reflected in the price of fossil fuels. For instance, the damage caused by greenhouse gas emissions, the health impacts of local air pollution, and even the economic costs associated with traffic congestion are considered implicit subsidies. In contrast, the OECD’s narrower definition includes only direct financial support, which results in a lower estimate.

Regardless of the specific figure, it is clear that subsidies for fossil fuels have a dramatic effect on the prices paid by consumers. By artificially lowering the cost of fossil fuels, these subsidies encourage their continued use and, by extension, the emissions that contribute to climate change.

Why are these subsidies hard to eliminate?

Despite the widespread recognition that fossil fuel subsidies undermine efforts to combat climate change, eliminating them has proven exceedingly difficult. Several reasons contribute to this challenge. Subsidies are politically popular. By keeping energy prices low, governments can avoid public discontent and gain support from voters.

For instance, when energy prices rise, governments often face protests and unrest. In Nigeria, for example, the removal of gasoline subsidies in 2024 led to widespread protests and even clashes with police. Such public backlash makes policymakers reluctant to cut subsidies, even when they acknowledge the environmental benefits of doing so.

Fossil fuel subsidies have a direct impact on the cost of living. Because fossil fuels are integral to nearly every sector of the economy, reducing subsidies tends to increase prices across the board. This can lead to inflationary pressure, making goods and services more expensive. For lower-income populations, these price increases can be especially painful, as they spend a larger proportion of their income on necessities like transportation and heating. The fossil fuel industry is a powerful lobby with significant influence over government policy. Many fossil fuel companies have strong financial and political connections, making it difficult for governments to reduce or eliminate subsidies.

These companies argue that subsidies are necessary for maintaining energy security, preserving jobs, and ensuring economic stability. Energy security is another key factor that complicates subsidy reform. Governments are wary of being overly dependent on foreign energy sources, particularly in times of geopolitical tension.

By subsidising domestic fossil fuel production, countries can reduce their reliance on imported energy, thereby improving their energy security. This consideration often outweighs environmental concerns when governments make policy decisions.

The cost of inaction

The persistence of fossil fuel subsidies has serious implications for the environment and human health. Fossil fuels are the leading source of greenhouse gas emissions, which are the primary driver of global warming. By keeping fossil fuel prices artificially low, subsidies encourage overconsumption and wasteful use, which in turn exacerbates climate change.

The cost of inaction is too great to be overlooked by the global community. In addition to their climate impact, fossil fuel subsidies have significant economic costs. By diverting public funds to support fossil fuel industries, governments have less money to invest in other areas, such as education, healthcare, and renewable energy. This opportunity cost is particularly problematic in developing countries, where resources are limited and the need for public investment is high.

Redirecting funds from fossil fuel subsidies to education and health could dramatically improve the quality of life in developing countries. Currently, vast public resources are spent maintaining artificially low fuel prices, which primarily benefit wealthier consumers and industries.

By redirecting these funds to education, governments could improve literacy, increase school attendance, and equip the next generation with the skills necessary for economic growth. Investment in healthcare could ensure better access to medical services, reduce child mortality, and increase life expectancy.

These changes would create a healthier, more educated population capable of contributing to a diversified and resilient economy. Such investments would break the cycle of poverty, empowering individuals to pursue opportunities beyond survival. By addressing basic human needs, countries can move toward a more sustainable and equitable development path, improving overall well-being and prospects for millions of people.

Global efforts to reform subsidies

Recognising the need to address fossil fuel subsidies, global leaders have made several commitments to reform them. In 2009, the G20, which includes many of the world’s largest economies, pledged to “rationalise and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.” The Asia-Pacific Economic Cooperation (APEC) forum made a similar commitment later that year.

In 2010, the Friends of Fossil Fuel Subsidy Reform group was formed by 10 countries, including the Netherlands and New Zealand. The group’s goal is to build political consensus on the importance of fossil fuel subsidy reform. Despite these pledges, progress has been limited. A major study of 157 countries found that between 2003 and 2015, governments made little or no progress toward reducing subsidies.

The recent spike in fossil fuel subsidies in 2021 and 2022 highlights the challenges of reform. Following Russia’s invasion of Ukraine, energy prices surged throughout Europe. In response, European governments provided substantial financial support to offset the impact on consumers. This led to the largest fossil fuel subsidies in Europe’s history, as leaders prioritised affordable energy over climate goals.

Economists argue that increasing the price of fossil fuels can lower demand, thereby reducing emissions and mitigating the impacts of climate change. This principle was evident during the recent energy price surge: higher prices led to reduced consumption and a temporary decline in emissions.

The IMF has suggested that periods of high energy prices provide an ideal opportunity for reform. When energy prices are already elevated, governments can phase out subsidies without causing additional price shocks for consumers. By locking in higher prices, governments can encourage the adoption of cleaner energy sources and reduce their reliance on fossil fuels.

Another potential avenue for reform is the use of targeted subsidies to support low-income households during the transition. By providing direct financial assistance to those who are most affected by rising energy prices, governments can mitigate the regressive impacts of subsidy reform. This approach can help build public support for reform while ensuring that vulnerable populations are protected.

There is no doubt that by continuing to subsidise fossil fuels, governments are not only undermining efforts to combat climate change but also missing out on opportunities to invest in cleaner, more sustainable energy sources.

While the path to reform is challenging, it is not impossible. With the right combination of political will, public support, and targeted assistance, it is possible to phase out fossil fuel subsidies and pave the way for a cleaner, more sustainable future.

The recent surge in energy prices offers a unique opportunity to make meaningful progress on subsidy reform. By taking advantage of this moment, governments can reduce their reliance on fossil fuels, support the transition to renewable energy, and help mitigate the impacts of climate change. The stakes are high, but the potential rewards—for the environment, the economy, and future generations—are even higher.

The post Why do countries still subsidise fossil fuels? appeared first on International Finance.

Amazon supports creating a new standard that might help the cloud computing company and online retailer overcome a shortage of quality-labelled offset suppliers and reach its goal of having no net greenhouse gas emissions by 2040. Opponents fear that the change may cause confusion in the market and compromise carbon offset standards.

Companies that are under pressure to reduce their carbon footprints can purchase credits from companies that are involved in carbon-absorbing projects, like reforestation. Due to the small number of projects that can substantiate the offsets’ positive climate impact, the market for them has remained small.

Amazon informed Reuters that it has finished developing Abacus, a system for confirming the calibre of carbon offsets obtained through agroforestry and reforestation. As an alternative to the standard created by the Integrity Council for the Voluntary Carbon Market (ICVCM), the largest coalition of environmental and private sector organisations worldwide tasked with certifying carbon offsets, Amazon created its own using the carbon registry Verra. In 2022, Verra declared that it was working with Amazon and its Abacus working group to develop the label.

Jeff Bezos is one of the largest contributors to ICVCM, having contributed at least USD 11 million to the organisation and its sister organisation Voluntary Carbon Markets Integrity Initiative since its founding in 2021 through his USD 10 billion Earth Fund, which he established to address climate change.

In an interview, Jamey Mulligan, Amazon’s head of carbon neutralisation, stated that while the company assessed and approved ICVCM’s work, it was looking for a more stringent standard.

“We want to ensure that every credit investment has a real, conservatively quantified and verified impact on emissions,” Mulligan said.

The post Amazon sidesteps ‘Carbon Offset’ Jeff Bezos helped fund appeared first on International Finance.

Global trade is being impacted by climate change as well. A vital canal’s capacity has been cut in half due to the drought at the Panama Canal. As per the reports, the Panama Canal will need at least the rest of 2024 to fully recover from the 2023 drought that depleted water levels, choked vessel traffic and cost shippers millions of dollars.

Argelis Moreno Lopez, senior forecast and market analysis specialist in the Panama Canal Authority’s strategic planning division, told Bloomberg recently that La Nina (the periodic cooling of ocean surface temperatures in the central and east-central equatorial Pacific) was expected to usher in rains during April 2024, providing relief after record dryness afflicted the key transit channel in 2023.

Since trade accounts for around one-third of greenhouse gas emissions worldwide, trade is only beginning to feel the effects of its own medicine. In actuality, greening commerce is not only necessary to ensure that everyone has a sustainable future. For international trade, it is also an existential requirement.

Green Shipping: A Must

Every year, over 11 billion tons of commodities, or 85% of all trade, are transported by sea. By 2050, this number is expected to quadruple. Even while the maritime industry presently contributes only 3% of greenhouse gas emissions worldwide, if nothing is done now, this percentage might rise to 17% by the middle of the century. Given the recent Red Sea interruptions that pushed for longer routes, the share could be considerably greater shortly. In actuality, the maritime sector has contributed to a +42% increase in worldwide CO2 emissions since 2000.

According to C40 Cities Climate Leadership Group, a green shipping corridor is a maritime commerce route on which zero-carbon emissions ships and other emissions reduction programmes are deployed, and emissions reductions are measured and enabled through actions and policies.

Green shipping corridors first came to prominence in Glasgow at 2021’s COP26 Climate Summit, as 19 countries joined the first-ever framework to create zero-emission ocean shipping corridors, with the signing of the Clydebank Declaration for clean shipping corridors.

As per Aylin Somersan Coqui, CEO of Allianz Trade, decarbonising maritime transportation will thus be crucial to making international trade more environmentally friendly. It’s also a pressing race against the clock: In the maritime shipping industry, emissions must stabilise by about 2025 despite projected increases in activity, and then decline until 2030 to reach net-zero emissions by 2050.

“Greening fleets have emerged as the industry’s top concern. Thirteen of the top 30 shipping corporations globally have already established a net-zero aim for the years 2040 to 2060. Naturally, there is a cost associated with these lofty objectives: our projections indicate that the industry must invest a minimum of USD23 billion per year to meet its climate ambitions,” Coqui remarked in her opinion piece for the Global Banking and Finance Review.

And it seems that “Green Shipping Corridors” are actually mushrooming around the world now, after the much-needed consensus at the London headquarters of the International Maritime Organisation (IMO), as industry leaders pitched for the need of turbocharging commercial shipping’s green targets.

As per the latest data from the classification society DNV, the number of green shipping corridor initiatives doubled in 2023 and, as of February 2024, stands at 57 with Los Angeles, Singapore, Antwerp, Rotterdam, the Baltic Sea and southern Japan leading the tally, in terms of fostering dedicated green fuel shipping channels.

More Green Goods Commerce

Only if green products and technologies—from biofuels and mercury-free batteries to vehicle catalytic converters and septic tanks—are created, implemented, and dispersed at a never-before-seen rate will the shift to a low-carbon economy be feasible. The trend is really good in this regard. The percentage of green goods exported worldwide increased by around +5% between 2000 and 2022, Coqui noted.

Europe is leading the way in the trading of green commodities. The United States is now the largest importer of green products and technologies outside of the EU27 as a whole, while Germany alone leads the US in green exports.

The competitive advantage of 19 out of 27 European Union economies in low-carbon economies has been preserved or even increased. Green products made up over 15% of Germany’s total exports in 2022. The nation has also had the most increase in exports of environmental goods as a percentage of GDP (+6.9pps) between 2000 and 2022, trailed only by South Korea and China.

By concentrating on the manufacturing and export of environmentally friendly products, Europe can further penetrate the expanding worldwide markets for clean technology. This has the potential to spur economic expansion and more funding for the green transition. Eliminating tariffs on these products may have a significant impact.

Trade barriers for environmental items remain high, with tariffs standing at a hefty 5.4%, while the overall tariff rate is 8.6%. Lowering the cost of importing green products would increase their accessibility and affordability for both businesses and consumers.

It would also encourage producer rivalry, which would spur innovation both locally and internationally. According to the Allianz Trade’s estimates, the removal of tariffs on environmentally friendly products might increase export volumes by more than 10% annually, or USD 184 billion.

Make The Overall Economy Green

To expand the supply and decrease the price of green technologies, we must first pull on five major levers to make commerce more environmentally friendly. First, the world’s most powerful economies should re-engage in promoting and supporting green trade. The second requirement is consensus among all parties regarding what constitutes a green product. Third, through proper labelling and public price subsidies, governments should establish clear norms and standards for sustainable production and consumption. Fourth, to lower the cost of green products for consumers, customs tariffs should be further cut or eliminated. Lastly, governments should establish extra tax advantages for green enterprises and reroute excess savings into supporting those companies.

Nonetheless, to lower the carbon footprint of every produced commodity that is traded internationally, we also need to step up our efforts to green every industry. Businesses will therefore require incentives from the government and other sources in several areas. Regarding borrowing and lowering investment uncertainty through instruments such as contracts of difference; utilising subsidies to make environmentally friendly investments profitable and scalable; tackling climate-related issues through creative jobless plans; transferring to safe and secure supply chains through comprehensive risk management; and advancing a truly circular economy by instituting quotas to allay financial worries.

“We must employ all available technologies and policy alternatives to promote green commerce since it is no longer a choice. Global commerce has significantly aided in the development and decrease of poverty over the past few decades, and it is our responsibility to encourage businesses and pressure policymakers to make it more sustainable going forward,” Coqui concluded.

The post IF Insights: Challenge for global trade to go green or crumble appeared first on International Finance.

“Many climate-related issues are wreaking havoc on the industry, with recent examples including severe water level drops in the Mississippi River and supply chain interruptions in the Panama Canal,” the North Carolina-based non-profit organisation noted in its study.

“The change in climate impacts the overall productivity of a vessel; the routes are affected, resulting in changes in plans and cargo losses,” it stated further, as it predicted another loss figure of up to USD 25 billion a year by 2100 due to the damage and disruption caused by ports alone.

The shipping sector has reportedly been sluggish of late, when it comes to cutting carbon emissions. Although Danish shipping and logistics company Maersk has been using Green methanol to power its container ships, the fuel’s high price and restricted supply have hampered the transformation process.

Worldwide Greenhouse gas emissions from the shipping sector, as of November 2023, are around 3%. The RTI International’s findings come at a time when the sector has committed to acquiring net-zero emissions by 2050, with experts asking for the implementation of vigorous measures to meet the targets set forth in the Paris Agreement.

The agreement was adopted at the 80th meeting of the International Maritime Organization’s Marine Environmental Protection Committee (MEPC), conducted in the earlier half of 2023. The pact united all 175 member states in a common objective, which was to ensure “a just and equitable transition to a 20-30% reduction in shipping emissions by 2030, progressing to a 70-80% reduction by 2040.”

The roadmap involves setting robust interim emission reduction targets for 2030 and 2040, apart from committing to a lifecycle approach for assessing emissions to avoid shifting emissions from sea to land, specifying a clear and rapid timeline for adopting and applying binding regulatory measures and last but not the least, making a commitment that shipping industry’s green transition will be just and equitable, and leave no one behind.

“Over the next seven years, the 2030 target will be met by transitioning 5-10% of marine fuels to zero-emission alternatives, in alignment with the Climate Champions 2030 Shipping Breakthrough. Additionally, all ships being ordered from now on must be capable of running on zero-emission fuels by 2040 if they are to be useful for their full lifespan. Global mandatory measures and regulations will enter into force in 2027, consisting of a global GHG fuel standard and an economic measure that sets a price on GHG emissions based on the full lifecycle emissions,” the pact read.

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International Renewable Energy Agency (IRENA) recently released the second edition of the ‘Renewable Energy Outlook for ASEAN: Towards a Regional Energy Transition’ during the ASEAN Energy Ministerial, and the report shows that almost doubling renewable power by 2030 creates significant regional business and investment opportunities for the region.

ASEAN is home to some of the youngest coal power plants in the world. Despite that, the region has taken a lead, in terms of setting net-zero emissions targets by around mid-century. IRENA’s outlook identifies ASEAN’s energy transition pathways through renewables, electrification, and emerging technologies such as hydrogen and batteries.

Amid the backdrop of this outlook, CK Power Public Company Limited (CKPower), which is a leading renewable energy producer in the ASEAN region, becomes a crucial player in realising the net-zero emissions targets.

The Thailand-based company has committed itself to the usage of solar, hydro and wind power for almost all of its electricity production by 2024. Presently, the company invests in electricity production and distribution in Thailand and the Lao PDR, with 88% from hydroelectric power plants, 1% from solar power plants and 11% from cogeneration power plants.

CKPower, which was founded by CH. Karnchang Public Company Limited Group (“CH. Karnchang Group”), registered its market incorporation on June 8, 2011. It came up with a prime goal of becoming the centre of CH. Karnchang Group’s focus on investment in the business of electricity production and distribution.

The company registered its conversion into a public entity in 2013, and its ordinary shares were listed as listed securities, and started trading on the Stock Exchange of Thailand in July of that year. In 2015, the Company registered its capital increase to Baht 9,240 Million. At present, the Company’s registered and paid-up capital amounts to Baht 8,129 Million.

The installed capacities of hydropower, cogeneration power and solar power under the belt of CKPower currently stand at 1900 MW, 238 MW and 29 MW respectively.

The major shareholders of the company include CH. Karnchang Public Company Limited (30%), TTW Public Company Limited (24.98%) and Bangkok Expressway and Metro Public Company Limited (16.82%).

The company is planning to increase the proportion of renewables-based electricity to 95% in the coming days, as part of its commitment to contribute to the global goal of achieving Net Zero GHG Emissions by 2050 through the development of clean energy innovations. In 2022, CKPower’s renewables-based power plants produced almost 10,000 GWh of clean electricity, reducing greenhouse gas emissions by approximately five million CO2-equivalent tonnes per year.

CKPower believes in and practices the model called the ‘Sustainability Management Process’. It fosters a culture of environmental consciousness, encouraging employee participation in energy conservation and greenhouse gas reduction projects.

“CKPower recognizes the importance of operating a sustainable electricity-producing business without creating impacts on the environment, natural resources, and communities or seeking ways to minimize such impacts. As such, it focuses on investing in clean and renewable energy-based power projects that cause minimal pollution and utilize resources efficiently in production, such as hydroelectric, solar, and combined cycle power plants. CKPower also selects cutting-edge, eco-friendly technology to achieve balance between business and environmental protection in accordance with sustainable development guidelines,” the company stated on its website.

CKPower’s environmental management guidelines focus on investing in clean and renewable energy projects, managing resources to maximize benefits without causing environmental impact, developing knowledge, innovation, and technologies to monitor environmental quality in compliance with legal requirements in pursuit of international standards and co-developing resource management know-how with stakeholders for sustainable development and conservation in communities.

The company also believes in having a strong commitment to social and community care, leveraging its expertise in electrical engineering to create sustainable value for society while improving the quality of life in Thailand and the Lao PDR, thus upholding its vision of “Renewable Electricity for a Sustainable Future”.

CKPower’s associate, Xayaburi Power Co., Ltd., was recognized with the prestigious global ‘Best Green Bond Hydropower Plant Framework’ at the International Finance Awards 2022, for the highly successful launch of Thailand’s first-ever hydro green bond.

In 2022, while generating clean electricity, the Xayaburi Hydroelectric Power Plant played a significant role in environmental conservation by reducing greenhouse gas emissions by approximately 4.1 million tonnes, thereby contributing towards a cleaner and more sustainable future.

The post CKPower: Leading Thailand’s drive towards clean energy appeared first on International Finance.

Adnoc is already among the top five lowest greenhouse gas emitters in the oil and gas industry with methane emissions as low as 0.01 percent.

Dr Sultan Al Jaber, Adnoc group chief executive and Minister of State told the media, “We are taking a comprehensive and holistic approach to our sustainability strategy in terms of our contribution to the economy, the environment and our most important asset, our people. We are strengthening our environmental performance as we expand our operations to ensure we can deliver more energy with fewer emissions for decades to come.”

He further revealed that Adnoc will continue to work in partnerships to prioritise sustainability and will continue to make investments in new and innovative technologies to improve environmental performance.

Besides announcing its plan to reduce greenhouse gas emissions, Adnoc also announced a range of other green initiatives such as limiting its freshwater consumption ratio below 0.5 percent of total water use and achieving an in-country value (ICV) of 50 percent across its full value chain by 2050.

Adnoc’s shipping unit, Adnoc Logistics and Services also announced that it will carry out tests to use biofuel in its vessels to cut sulphur emissions and comply with the 2020 sulphur cap.

According to local media reports, the company is exploring other alternatives such as LNG, LPG and blended biofuel to reduce fuel consumption as well as cut emissions.

Last month, Adnoc also signed an agreement with Italy’s ENI to explore collaboration on carbon capture, utilisation and storage as a part of its goal to cut emissions.

The post 2030: Adnoc to cut greenhouse gas emissions by 25% appeared first on International Finance.

Adnoc has raised more than $19 billion from foreign investors in the last three years, the local media reported.

Adnoc has adopted new reforms and modernisation plans to lure foreign investors. For example, Sultan Ahmad Al Jaber, Minister of State, was appointed as Adnoc CEO as part of its many reforms. 

New foreign investors can help the company sustain and diversify its current financing capabilities. Adnoc supplies nearly 3 percent of global oil demand, Reuters reported. 

Adnoc plans to invest $45 billion to expand its refining and petrochemical business. 

Al Jaber told the media that, “The company looks to increase its share of the international market for crude oil and fuel. We don’t want cooperation to be limited to known or traditional partners, as we want to explore and seize all opportunities.”

The company plans to reduce its greenhouse gas emissions by 25 percent by 2030. To that end, it is making further investments to expand the commercial carbon capture, utilisation and storage facility’s capacity in the region. Adnoc ranks in the top five lowest greenhouse gas emitters in the oil and gas industry. 

The company sold a stake in its pipeline infrastructure and refining business to BlackRock. It has signed deals with other major financial institutions as well. BlackRock is the world’s largest fund manager. 

More recently, Adnoc signed an agreement with  Indonesia’s Pertamina and Chandra Asri to develop a crude to petrochemicals complex.  Pertamina is a state-owned oil and gas company, while Chandra Asri is an integrated petrochemical producer. 

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Globally averaged concentrations of CO₂ reached 403.3 parts per million in 2016, up from 400.00 ppm in 2015 because of a combination of human activities and a strong El Niño event. Concentrations of CO₂ are now 145% of pre-industrial (before 1750) levels, according to the Greenhouse Gas Bulletin.

Rapidly increasing atmospheric levels of CO₂ and other greenhouse gases have the potential to initiate unprecedented changes in climate systems, leading to “severe ecological and economic disruptions,” said the report.

The annual bulletin is based on observations from the WMO Global Atmosphere Watch Programme. These observations help to track the changing levels of greenhouse gases and serve as an early warning system for changes in these key atmospheric drivers of climate change.

Population growth, intensified agricultural practices, increases in land use and deforestation, industrialization and associated energy use from fossil fuel sources have all contributed to increases in concentrations of greenhouse gases in the atmosphere since the industrial era, beginning in 1750.

Since 1990, there has been a 40% increase in total radiative forcing – the warming effect on our climate – by all long-lived greenhouse gases, and a 2.5% increase from 2015 to 2016 alone, according to figures from the US National Oceanic and Atmospheric Administration quoted in the bulletin.

“Without rapid cuts in CO₂ and other greenhouse gas emissions, we will be heading for dangerous temperature increases by the end of this century, well above the target set by the Paris climate change agreement,” said WMO Secretary-General Petteri Taalas. “Future generations will inherit a much more inhospitable planet, “ he said.

“CO₂ remains in the atmosphere for hundreds of years and in the oceans for even longer. The laws of physics mean that we face a much hotter, more extreme climate in the future. There is currently no magic wand to remove this CO₂ from the atmosphere,” said Mr Taalas.

The last time the Earth experienced a comparable concentration of CO₂ was 3-5 million years ago, the temperature was 2-3°C warmer and sea level was 10-20 meters higher than now.

The WMO Greenhouse Gas Bulletin reports on atmospheric concentrations  of greenhouse gases. Emissions represent what goes into the atmosphere. Concentrations represent what remains in the atmosphere after the complex system of interactions between the atmosphere, biosphere, cryosphere and the oceans. About a quarter of the total emissions is taken up by the oceans and another quarter by the biosphere, reducing in this way the amount of CO2 in the atmosphere.

A separate Emissions Gap Report by UN Environment, to be released on 31 October, tracks the policy commitments made by countries to reduce greenhouse gas emissions and analyses how these policies will translate into emissions reductions through 2030, clearly outlining the emissions gap and what it would take to bridge it.

“The numbers don’t lie. We are still emitting far too much and this needs to be reversed. The last few years have seen enormous uptake of renewable energy, but we must now redouble our efforts to ensure these new low-carbon technologies are able to thrive. We have many of the solutions already to address this challenge. What we need now is global political will and a new sense of urgency,” said Erik Solheim, head of UN Environment.

Together, the Greenhouse Gas Bulletin and Emissions Gap Report provide a  scientific base for decision-making at the UN climate change negotiations, which will be held from 7-17 November in Bonn, Germany.

WMO, UN Environment and other partners are working towards an Integrated Global Greenhouse Gas Information System to provide information that can help nations to track the progress toward implementation of their national emission pledges, improve national emission reporting and inform additional mitigation actions. This system builds on the long-term experience of WMO in greenhouse gas instrumental measurements and atmospheric modelling.

WMO is also striving to improve weather and climate services for the renewable energy sector and to support the Green Economy and sustainable development. To optimize the use of solar, wind and hydropower production, new types of weather, climate and hydrological services are needed.

Key findings of the Greenhouse Gas Bulletin

Carbon dioxide

CO₂  is by far the most important anthropogenic long-lived greenhouse gas. Globally averaged concentrations for CO₂ reached 403.3 parts per million in 2016, up from 400.00 ppm in 2015. This record annual increase of 3.3 ppm was partly due to the strong 2015/2016 El Niño, which triggered droughts in tropical regions and reduced the capacity of “sinks” like forests, vegetation and the oceans to absorb CO₂.   Concentrations of CO₂ are now 145% of pre-industrial (before 1750) levels.

The rate of increase of atmospheric CO₂ over the past 70 years is nearly 100 times larger than that at the end of the last ice age. As far as direct and proxy observations can tell, such abrupt changes in the atmospheric levels of CO₂have never before been seen.

Over the last 800 000 years, pre-industrial atmospheric CO₂ content remained below 280 ppm, but it has now risen to the 2016 global average of 403.3 ppm.

From the most-recent high-resolution reconstructions from ice cores, it is possible to observe that changes in CO₂have never been as fast as in the past 150 years. The natural ice-age changes in CO₂ have always preceded corresponding temperature changes. Geological records show that the current levels of CO₂ correspond to an “equilibrium” climate last observed in the mid-Pliocene (3–5 million years ago), a climate that was 2–3 °C warmer, where the Greenland and West Antarctic ice sheets melted and even some of the East Antarctic ice was lost, leading to sea levels that were 10–20 m higher than those today.

Methane

Methane (CH4) is the second most important long-lived greenhouse gas and contributes about 17% of radiative forcing. Approximately 40% of methane is emitted into the atmosphere by natural sources (e.g., wetlands and termites), and about 60% comes from human activities like cattle breeding, rice agriculture, fossil fuel exploitation, landfills and biomass burning.

Atmospheric methane reached a new high of about 1 853 parts per billion (ppb) in 2016 and is now 257% of the pre-industrial level.

Nitrous Oxide

Nitrous oxide (N2O) is emitted into the atmosphere from both natural (about 60%) and anthropogenic sources (approximately 40%), including oceans, soil, biomass burning, fertilizer use, and various industrial processes.

Its atmospheric concentration in 2016 was 328.9 parts per billion. This is 122% of pre-industrial levels. It also plays an important role in the destruction of the stratospheric ozone layer which protects us from the harmful ultraviolet rays of the sun. It accounts for about 6% of radiative forcing by long-lived greenhouse gases.

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