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Document reveals EU plans to add Carbon Credits to New Climate Goal
A document from the European Commission, seen by, revealed that the Commission will propose to count carbon credits purchased from other countries toward the European Union’s 2040 climate goal. On July 2, the Commission will propose a legally-binding EU climate target 2040. In the beginning, the EU executive planned to reduce net emissions by 90% compared to 1990. However, it has been more flexible in recent months, as a result of pushback from countries such as Italy, Poland, and the Czech Republic who were concerned about costs. A summary of the internal proposal by the Commission, which was seen by, stated that the EU could use "high quality international credits" to achieve 3% of its emissions reductions towards the 2040 target. The document stated that credits would be phased-in from 2036 and that EU legislation will later specify the quality and origin criteria for the credits, as well as details on how they will be purchased. This would reduce the amount of emissions reductions and investments needed from European industries to reach the 90% target. The EU would purchase "credits" for the part of the target that is met by credits from projects abroad, such as forest restoration in Brazil, rather than reducing CO2 emissions in Europe. These credits, say their supporters, are an important way to raise money for projects that reduce CO2 emissions in developing countries. Recent scandals revealed that some projects that generated credits did not achieve the claimed climate benefits. In the document, the Commission said it would add additional flexibility to the 90% goal, as Brussels tries to contain the resistance of governments who are struggling to finance the green transition along with other priorities, such as defence, and from industries that say ambitious environmental regulations harm their competitiveness. The document stated that these include the integration of credits from projects that remove carbon dioxide from the atmosphere in the EU's market for carbon credits so that European industry can purchase these credits to offset a portion of their emissions. The draft also gives countries more flexibility in which sectors of their economy will do the heavy lifting in order to reach the 2040 target, "to help achieve targets in an efficient way". Un spokesperson for the Commission declined to comment on upcoming proposals, which may still be altered before they are published next week. The EU countries, the European Parliament and the European Commission must negotiate on the final target. They could also amend what the Commission suggests. (Reporting and editing by Timothy Heritage, Kate Abnett)
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China's flood-hit Guizhou is hit by heavy rain for the second time this week
On Saturday, heavy rains again hit China's southwest Guizhou Province. The city of Rongjiang was half submerged in floodwaters for the second time this past week. Residents were forced to evacuate higher ground. Rongjiang, a city of 300,000 people located at the confluences of three rivers, was inundated by torrential rains earlier this week, which caused six deaths and forced over 80,000 residents to flee. The city average rainfall for June was twice as much rain in 72 hours. The city's flood emergency level was raised to its highest level by authorities on Saturday in response to a new round of flooding. State broadcaster CCTV reported that the benchmark hydrological station at one of the rivers predicted the maximum water level to reach 253.50 meters (832 ft), surpassing the safety threshold by two metres. The Guizhou Provincial Government said that the floods began earlier this week when the water reached a peak of 256.7 meters, which was the highest level since 1954. They blamed "the extreme weather" for the flooding. Floods in Southwest China will have a major impact on local economies. Rongjiang has been removed from the national list of poverty in 2020. The unexpected boom in tourism began after the local soccer league, nicknamed "Village Super League", became a sensation on social media and attracted thousands of tourists and fans. The soccer pitch was submerged up to 7 metres on Tuesday. China has been fighting summer flooding for millennia. But some scientists claim climate change is leading to heavier rains and more frequent floods. Chinese officials warn that massive flooding could trigger "black swans" with devastating consequences such as dam collapses. CCTV, citing Saturday's report by the Ministry of Water Resources, reported that 13 major rivers were affected by storms in southern China during the past two weeks and rose above their warning level. (Reporting and editing by Shanghai & Beijing Newsroom)
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Senate Republicans want to end the EV tax credit before September 30
The U.S. Senate Republicans released a revised budget and tax bill late Friday that would eliminate the $7,500 credit for new electric vehicles and leases as well as $4,000 credit for used EVs by September 30. Prior to the new version, the credit would have been terminated 180 days after it was signed into law for new vehicles, 90 days after that for used vehicles. It would also have been terminated immediately for vehicles that were not assembled in North America or those that met other requirements. The Republicans have targeted EVs in a variety of ways, reversing former president Joe Biden's policies that encouraged the use of electric vehicles and renewable energies to combat climate change and reduce emission. The House of Representatives' version would extend the $7,500 tax credit for new-EVs through 2025 and 2026, respectively, for automakers who have not sold 200,000 electric vehicles before it is eliminated. The Senate bill includes a provision that eliminates fines for failure to comply with the requirements. Corporate Average Fuel Economy rules In a move designed to make it easier for automakers build gas-powered cars. The Republican bill exempts auto loan interest from tax for new cars manufactured in the U.S. until 2028. However, it phases out for individuals making more than $100,000 per year. Senate Republicans Dropped a bid to make the U.S. Postal The bill will scrap thousands of electric cars and charging equipment after a decision by the Senate Parliamentarian. The U.S. The U.S. President Donald Trump This month, a resolution was signed Congress has approved a bill to block California's historic plan to stop selling gasoline-only cars by 2035. This plan was adopted by 11 states, representing one third of the U.S. automobile market. (Reporting and editing by David Shepardson)
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China's flood-hit social security network expands as extreme rainfall takes its toll
China has increased the financial protections offered to segments of the population who are affected by flood control measures during extreme rain, including direct compensation and payment for livestock losses. Diverting floodwaters into areas adjacent to rivers in China is an important step to manage downstream flooding. China, as extreme rainfall increases, is using these areas more and more. Some of them were unused and populated with farms, crops and even residential structures, which has exacerbated social tensions. According to the revised rules for compensation related to flooding diversions, released late Friday, the central governments will now be responsible for 70% of the compensation funds. Local governments are responsible the remainder. The ratio used to be determined based on the actual economic losses of the local governments and their fiscal condition. For the first time, compensation will be paid for livestock and poultry that are unable to be relocated before floodwaters arrive. Prior to this, compensation was only available for the loss of working animal. The summer of 2023 saw almost 1,000,000 people relocated from Hebei, the province that borders Beijing. Record rains forced the authorities to divert water to populated areas to store it. This angered many who were angry about the loss of their homes and farms to save Beijing. China has designated 98 flood diversion zones spanning major rivers basins, including the Yangtze River Basin which is home to one-third of the population. Eight flood storage areas have been used during the Hebei floods of 2023. China Meterological Administration officials told reporters that since the East Asia Monsoon began in early June, the precipitation on the middle and lower Yangtze River has been two to three times greater than normal. They said that in other parts of China the daily rainfall measured at 30 meteorological stations, including Hubei and Guizhou, broke records during June. Guizhou, China, was at the center of China's flood relief efforts this week. One of its cities had been hit by flooding of a magnitude that only happens once every 50 years and with a speed that stunned its 300,000 inhabitants. This prompted Beijing on Thursday to pledge to relocate vulnerable populations and industries into low-flood zones and to allocate more space to flood diversion. (Reporting and editing by Kim Coghill; Ryan Woo)
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Denmark Extends Operating Life of Two Offshore Wind Farms
The Danish Energy Agency (DEA) has extended the production permits for the Nysted and Middelgrunden offshore wind farms, enabling the projects to continue producing electricity for 10 and 25 more years, respectively.These are two of the oldest offshore wind farms in Denmark, now granted an extended lifespan.Middelgrunden was originally granted a production permit in 2000, followed by Nysted three years later.To support its decisions, DEA required, among other things, an independent analysis of the remaining lifespan of the installations. In addition, the owners must perform extended annual maintenance inspections.Nysted Offshore Wind Farm is owned by Ørsted, PensionDanmark, and Stadtwerke Lübeck. It consists of 70 turbines with a production capacity of 161 MW, enough to cover the electricity needs of more than 130,000 households.Middelgrunden, owned by HOFOR and the Middelgrunden Wind Cooperative, is located just 3.5 km off Copenhagen near the Trekroner Fort and has become a familiar part of the cityscape for residents of Copenhagen and North Zealand. Its 20 turbines can supply approximately 20,000 households with green electricity annually.“It’s positive that wind turbines over 20 years old are getting the opportunity to continue producing green electricity for many more years. This primarily benefits the green transition, but it's also a sustainable use of resources that the facilities can continue operating safely and responsibly for a longer period,” said Stig Uffe Pedersen, Deputy Director of the Danish Energy Agency.Earlier in June, DEA also approved a 10-year extension for the Samsø offshore wind farm’s electricity production permit.
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California regulator: California should increase fuel imports and halt margin cap
California's Energy Regulator on Friday suggested new rules that would encourage private investment in fuel imports, and put a hold on the refiner profit limit. The regulator hoped to prevent gasoline prices in California from soaring as the state prepares for the closing of two major refineries. California Energy Commission's recommendations came as a response to Governor Gavin Newsom's letter requesting changes in the state energy transition effort by July 1. California will face higher fuel prices due to the planned closures of Phillips 66's and Valero Energy's refineries. CEC Vice-Chair Siva Gunda admitted that the closure of refineries could increase fuel prices in California. The state already has the highest gasoline prices in the U.S. Gunda said, however, the sticker shock will only be temporary. CEC estimated that gasoline prices would increase 15-30 cents per gallon immediately after the closure of refineries. According to AAA, retail gasoline prices in California averaged $4.61 a gallon on Friday. This is higher than the national $3.21 average. Gunda, CEC's Director, said that the CEC is looking at ways to increase capacity of third-party import terminals, bringing in and distributing more gasoline and jetfuel, while keeping existing refineries operational. In order to help with these efforts, the CEC has recommended that the program which capped the maximum profits refiners could earn from gasoline sales in the State be halted. The CEC said that additional analysis is required to ensure the program works as intended for protecting consumers. The statement said that the pause would last for "a reasonable length of time", but did not specify exactly how long it would be. The CEC asked Newsom to also take steps to stabilise crude oil production within the state. California's crude output has steadily declined from its peak of more than 1 million barrels a day in the middle 1980s to less that 300,000 bpd in last year. This is according to U.S. Government data dating back to 1981.
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Canada's steel manufacturers tell the government that its tariff protection measures for steel are not enough
Two of the Canadian steel industry representatives present at the meeting said that the measures taken by the government to protect the industry against the effects of U.S. Tariffs were insufficient. Steel producers met Patrick Haley, Assistant Deputy Minister for Trade and Finance, and other ministry officials on Thursday. They told them that the measures announced earlier in the month did not protect the steel industry from steel dumping, and could lead to mass layoffs. U.S. president Donald Trump raised import duties on aluminum and steel to 50%, up from 25% in the beginning of this month. Canada is the largest metals seller to the United States. Canada responded by announcing a series of measures including new tariff-rate quotes of 100% of the 2024 levels for imports of steel from non-free-trade agreement partners. At the meeting, representatives of the industry asked the government to extend the tariff quotas for unfair trade practices to all countries that have free trade agreements. They said that Europe and Asia are diverting their goods to Canada in order to avoid U.S. Tariffs, which makes domestic steel uncompetitive. Catherine Cobden is the President and CEO of Canadian Steel Producers Association. She said, "We do not think that the measures announced will meet our needs in this difficult time." Cobden was present at the meeting on Thursday with officials from the finance ministry. In a separate press release on Thursday, the Canadian Steel Producers Association stated that in its current format, the tariff-rate quota would do little to help its industry. The Canadian Steel Producers Association said that since March's first U.S. Tariffs, Canada's steel sector has lost 1,000 workers. More layoffs are possible, according to the association. Keanin Looomis, President of the Canadian Institute of Steel Construction (which includes steel fabricators and constructors), said that Thursday's meeting of the government was heavily focused on steel producers, pointing out that finished steel imported into Canada has no tariff protection. Loomis was also present at the meeting. The Canadian Finance Ministry responded to in a text message that its measures were a comprehensive, strategic package for the protection of producers and workers and a first step. Mark Carney, the Prime Minister of Canada, has threatened to increase the counter-tariffs for U.S. steel and aluminum in case Canada fails to reach a wider trade agreement with Trump by 21 July. Trump abruptly ended trade talks with Canada on Friday over its new tax that targets U.S. tech firms. These are temporary, calibrated measures which could be extended depending on the results of the ongoing talks with the United States. A spokesperson for the Finance Minister said that we are ready to adapt our response as necessary.
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China's rare Earths are flowing freely again, but at a price
Chinese rare earth magnets are now flowing into the automotive supply chain, reducing the threat of mass closures. However, automakers and suppliers still say that production plans face uncertainty and there is a risk of shortages. Nils Poel is the head of market affairs for supplier association CLEPA. He said that European suppliers received enough licenses to prevent widespread disruptions earlier this month. However, hundreds of permits are still pending. He said that the rate of issuance has "accelerated" from 25% to 60%, but in cases where end users are located in the United States or products are transported through a third country like India, it takes longer or is not given priority. He said that he felt that production would probably continue in July, and the impact of the shutdown will be manageable. "We have managed to avoid that at the moment. Ford CEO Jim Farley stated on Friday during an event in Colorado that, due to magnet shortages over the last three weeks, the company had been forced to close factories. He did not elaborate. Volkswagen stated in a press release that its supply of rare-earth components is stable, while Stellantis claimed to have addressed immediate production concerns. In April, China restricted the export of magnets and rare earths as a form of retaliation against U.S. Tariffs. There is still a lot of uncertainty three months after the U.S. tariffs about how China intends to enforce its complex and opaque export licensing system. Since the restrictions, exports of rare earth magnets from China are down by about 75%. This has forced some automakers to stop production in Asia, Europe, and the United States. From 'Full Panic' to 'Bare Minimum': The White House announced on Thursday that it had signed an agreement with China for the speeding up of rare earth approvals, without giving any details. Beijing announced that both parties confirmed the details of the agreement struck in London in early this month to resolve the issue with rare earths. It would then process export licenses according to the law. The existing system of export licenses was not altered by either party. In an interview with Fox Business Network, U.S. Treasury secretary Scott Bessent stated that under the agreement announced Thursday, rare earths shipments from China to the United States would be banned. еание All companies who have received them regularly in the past. Bessent stated, "I'm confident that the magnets are going to flow." "This is de-escalation." According to a senior executive from a major U.S. auto supplier and an expert in the supply chain of a major European carmaker, the situation is less tense now than it was two weeks ago. The two declined to be identified due to the sensitive nature of the matter. Unnamed European official said that China approves the "bare minimal" of licenses critical to European firms in order to prevent production stops. Kash Mishra, CEO of Dexter Magnetic Technologies in the U.S., said that only five licenses have been issued to this magnet manufacturer since April. These were for sectors other than defence. He said, "It is a long delay." It takes 45 days to complete the paperwork for the supplier and another 45 days before the licence is granted. (Reporting from Christina Amann, Giulio Pieovaccari, Laurie Chen, Beijing, and Vidyarajagopal, with additional reporting by Kalea, Hall, Guillaume, Nick Carey, London, and Kalea in Ann Arbor; editing by Jason Neely).
Oil prices rebound after OPEC+ maintains same production increase in July versus the previous month
Monday, oil prices rose by more than $1 a barrel after OPEC+ announced that it would increase production in July in the same proportion as in the two previous months. This was in line with expectations on the market.
Brent crude futures rose $1.19 or 1.9% to $63.97 per barrel at 0044 GMT, after closing 0.9% lower Friday. U.S. West Texas Intermediate Crude was $62.09 per barrel, up $1.30 or 2.14% after a 0.3% drop in the previous session. Both contracts were lower than 1% over the past week.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies have decided to increase output by 411,000 barges per day for July. This is the third time the group, known as OPEC+, has increased production by the same amount.
The group was expected to discuss an increase in production.
Harry Tchilinguirian, an analyst at Onyx Capital Group, wrote on LinkedIn that if they had gone with a larger surprise amount then Monday's opening price would have been very ugly.
Brent and WTI oil futures already reflect the increase of 411,000 bpd in production.
Analysts said that low fuel stock levels in the United States have caused supply concerns ahead of an expected hurricane season above average.
In a recent note, ANZ analysts noted that the surge in implied demand for gasoline was "more encouraging" as it coincided with the beginning of what is considered the U.S. summer driving season. They added that the increase of almost 1 million bpd marked the third highest weekly gain in the past three years.
The impact of the lower crude oil prices in the United States, which have hit production levels, is also being closely monitored by traders.
all-time high
13 49 Mbpd was produced in March.
Baker Hughes' weekly report said that the number of oil rigs operating in the U.S. dropped for the fifth consecutive week. It fell four to 461 - the lowest level since November 2021.
(source: Reuters)