Green Markets - December 26, 2024

Dec 26, 2024

Green Markets is a daily series dedicated to highlighting events of interest that could impact investments within environmental markets.

The U.S. Department of Energy (DOE) and Environmental Protection Agency (EPA) have selected 43 methane reduction projects for potential funding totaling $850 million. The projects include three initiatives to help small operators reduce methane emissions, 31 projects to deploy early-commercial technology solutions, four projects to improve community emissions data access, and five projects to enhance methane emissions detection at a regional scale. These efforts are part of a broader $1.36 billion program under the Inflation Reduction Act aimed at reducing methane emissions from the oil and gas sector.

The Science Based Targets initiative (SBTi) has released updated plans for sectoral emission reduction standards targeting the oil and gas, chemicals, and power industries - three of the largest global emitters. Key developments include:
1. An Oil and Gas Standard to guide companies on decarbonizing their business models, with a draft expected for public consultation in early 2025.
2. A Chemicals Sector Criteria open for pilot testing and public consultation until January 2025, with final criteria to be released in Q3 2025.
3. A Power Sector Standard, with the first draft to be released for consultation in Q2 2025.

The UK is implementing the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) alongside its domestic Emissions Trading Scheme (UK ETS) to reduce carbon emissions from aviation. As part of this effort, the UK government has proposed fines of £100 ($127) per tonne of CO2 for non-compliance with CORSIA, indexed for inflation. This measure aims to encourage airlines to meet their emissions reduction obligations while balancing the need to avoid excessive costs that could increase ticket prices.

The U.S. Department of Energy (DOE) has released an updated Hydrogen Program Plan, a comprehensive strategy to advance clean hydrogen technologies across multiple sectors. It serves as a coordinated framework for research, development, demonstration, and deployment of hydrogen technologies, involving multiple DOE offices and addressing production, transport, storage, and use of hydrogen across the economy.
China Petroleum and Chemical Corp. (Sinopec) has completed its first factory-based seawater hydrogen production research project at the Qingdao Refinery in Shandong province. The innovative project uses green electricity from a floating photovoltaic power station to produce 20 cubic meters of green hydrogen per hour through direct seawater electrolysis. The produced hydrogen is integrated into the refinery's pipeline network for use in refining operations or hydrogen-powered vehicles.
Petrobras and Companhia Siderúrgica Nacional (CSN) have signed a Protocol of Intent to establish a low-carbon hydrogen plant in Paraná. The plant will produce low-carbon hydrogen through water electrolysis using renewable electricity sources, aligning with Petrobras' Strategic Plan 2050 and Brazil's national hydrogen development goals.

Related Stock List(s): Hydrogen Stocks

QatarEnergy's uncontracted LNG volumes, estimated at around 60 million mt/year, could lead to increased activity in spot and short-term LNG trading. This strategy may be a response to changing market dynamics, including increased competition from US exporters and a shrinking market for long-term contracts. QatarEnergy is expected to ramp up its LNG supply from 77 million mt/year to 152 million mt/year by 2030, but the pace of new long-term contract signings has slowed. As a result, the company may shift towards more flexible trading strategies, potentially increasing its spot market involvement from the current 10-11% of exports.

Related Stock List(s): LNG Stocks

Argentina has announced plans to expand its nuclear energy sector using small modular reactor (SMR) technology and private US investment. The project, led by President Javier Milei's adviser Demian Reidel, aims to construct a 1.2 GW plant designed by Argentine research facility Invap, with the goal of having the first plant online by 2030. The government envisions creating a "Nuclear City" in Patagonia to support these projects, potentially leveraging the country's growing shale gas production in the interim.

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