Friday, December 24, 2021
Global shipping being strangled by Greenie requirements
Ocean freight costs are likely to remain high in 2022 as investors and regulators scramble to accelerate decarbonisation of the shipping industry and companies grapple with green financing, sources say.
Shipping, which transports about 90% of world trade and accounts for nearly 3% of the world's CO2 emissions, is under growing pressure from environmentalists to deliver more concrete action including a carbon levy.
The International Maritime Organization (IMO), the UN's specialist shipping agency, has said it has made progress on short-term greenhouse gas (GHG) reduction measures.
But that timeline is not seen as fast enough by environmentalists and a number of the IMO's 175 member countries.
"At the MEPC (IMO committee) meeting in June next year there will be a lot of heat and pressure on regulators to ensure that they come prepared to negotiate a solution rather than kicking the can down the road because of misalignment or negotiation tactics. It is really not acceptable," said Christian Michael Ingerslev, chief executive of Maersk Tankers.
Last month countries including the United States at the COP 26 climate summit pushed for the IMO to adopt a zero emissions target by 2050.
So far, its goal is to reduce overall GHG emissions from ships by 50% from 2008 levels by 2050.
"As far as the IMO is concerned, the negotiations process in 2022 will likely be very slow and onerous," said Faig Abbasov with green group Transport & Environment.
"The problem is in the very belief that a U.N. organisation with 175 members can come together and take tough decisions to decarbonise an entire economic sector."
The IMO said concrete progress was made in 2021 on combating climate change including new regulations to improve the energy efficiency of the world fleet, adding that it would "work very hard" next year on the development of a revised GHG strategy, which will be finalised in 2023.
"Where this is willingness to act, then processes can move faster," said Roel Hoenders, head, air pollution and energy efficiency with the IMO.
A proposal submitted at the IMO to create a $5 billion research and development fund to find the right technology to meet the targets is still under discussion with further talks kicked forward to next year.
Underscoring the challenges ahead will be the impact on poorer countries such as Pakistan.
While the country was a small carbon emitter, climate change had "directly impacted us hard", Pakistan's Federal Minister of Maritime Affairs Ali Haider Zaidi said.
"Developing countries cannot afford to spend on the type of infrastructure needed and therefore, developed countries must support the process at the IMO," he told Reuters referring to the R&D fund.
FINANCING STRAIN
Financing the path ahead is another hurdle. Shipping will need $2.4 trillion to achieve net-zero emissions by 2050, with around $500 billion required by 2030, according analyst estimates.
"Certainly, the European banks at least and not far behind the American banks will have to meet criteria that satisfy sustainable finance," said Tony Foster, chief executive of specialist asset manager Marine Capital.
"When it comes to new assets it is going to be increasingly difficult to fund anything that does not quite qualify and the same will be true, perhaps even more so, with existing assets."
Darren Maupin, founder of leading fund manager Pilgrim Global, said companies in the shipping sector were grappling with how to secure finance with more ESG pressure.
"Capital is afraid - how do you invest in a 25-year asset when you have no idea what the IMO is going to do in five years," Maupin said.
"The industry has a far reduced ability to build ships and limited capital available to do so. Simple supply-demand suggests rates are going to be higher and the industry is going to have to generate more capital to fund itself."
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Germany is closing down half of its nuclear power plants in the midst of energy crisis
Germany is set to close almost half of its nuclear power capacity before the end of the year, putting further strain on European grids already coping with one of the worst energy crunches in the region’s history.
The shutdowns of Grohnde, Gundremmingen C and Brokdorf -- part of the country’s nuclear phaseout -- will leave just three atomic plants, which will be taken offline by the end of 2022. Beyond the squeeze on supply, the closures remove a key source of low-carbon power in a nation where emissions are on the rise.
After the 2011 Fukushima disaster, Germany vowed to ditch all of its reactors. At the time, the country was a leader in renewables, but the phaseout has left it more reliant on coal and lignite for electricity generation. The nation fell behind in the net-zero race after making major concessions to the coal lobby, to protesters against wind farms and to manufacturers, particularly carmakers.
“From a pure emissions perspective, it was always a questionable idea to shut down German nuclear before the plants have reached the end of their lifetime,” said Hanns Koenig, head of commissioned projects at Aurora Energy Research. “It was always clear that the nuclear phaseout would need coal and gas plants to run more and therefore cause substantial extra emissions.”
Atomic plants are designed to generate power around the clock, providing valuable backup when the wind doesn’t blow or the sun doesn’t shine. While the shutdowns have been known about for years and are unlikely to cause a spike in prices, the removal of 4 gigawatts of baseload output highlights a dwindling reserve of buffer capacity in Germany. It’s one reason why prices are higher next year: electricity for delivery in 2022 has jumped more than fivefold this year.
The timing could hardly be worse. Power prices are near record levels across Europe, and Germany will need to rely on generation from costly gas and coal for another 20 years or so -- before they too are phased out. Keeping the nuclear stations open any longer isn’t an option since that would require hundreds of millions of euros of investment, Koenig said.
Increased reliance on fossil fuels will boost emissions further, and Germany is not alone. A number of countries in Europe have ramped up coal-fired power production in recent months as gas supplies failed to meet rebounding demand and wind generation fell short.
Germany intends to take all coal-fired generation offline by 2038, with the lignite power-plant fleet reduced almost 16% by 2024. By that year, high carbon prices and an expansion of renewable power will have cut Germany’s coal production “strongly,” according to the International Energy Agency.
And that trend is set to be replicated, with much of Europe deciding to “get out of coal,” leading to a likely increase in renewable-power assets in the long term, said Sabrina Kernbichler, an analyst at S&P Global Platts.
Yet in the short term, coal is helping to bridge the supply gap. One German utility, Uniper SE, has postponed the planned decommissioning of its Scholven-B coal plant beyond the end of 2022 following delays in building a replacement gas unit at the site.
That’ll provide some relief as market tightness persists. But it won’t help Germany meet net-zero goals.
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Coal instead of gas? How the EU is frustrating Germany's energy transition
Renewable energy production is weakening. And now Brussels is forging a gas plan that will put coal back on the table. Otherwise there is a risk of a power shortage. A coal exit would be a long way off. German municipalities are now making a counter-proposal.
The new federal government would like to "ideally" bring the coal phase-out in Germany forward from 2038 to 2030. But the traffic light coalition partners are encounting immense problems right at the beginning of their plan. In addition to the declining generation of renewable energy, new specifications from Brussels threaten to make it more difficult to achieve the targets.
The starting position for the planned energy transition of the new federal government deteriorated considerably on Wednesday: According to the latest figures from the German Association of Energy and Water Management (BDEW), the goal of achieving 80 percent renewable electricity in Germany by 2030 has become more unrealistic. Accordingly, the share of renewable energies in gross electricity consumption has even shrunk from 46 percent to 42 percent this year. The main reason for this was poor wind conditions.
According to experts renewable energy cannot therefore replace the capacities of coal and nuclear power that will be lost in the near future. Almost every study on the achievement of the German energy transition targets assumes that gas-fired power plants will have to be built to a considerable extent by 2030 in order to be able to temporarily close the electricity gap.
It is a huge order of magnitude. Depending on the assessment, energy institutes consider the need for new gas power of over 15 gigawatts (German Energy Agency), 30 to 40 gigawatts (EPICO think tank) or even 43 gigawatts (Boston Consulting Group) to be necessary to secure the electricity supply by 2030.
Within just eight years, Germany would have to build at least 50, maybe even 140 new gas-fired power plants of the 300-megawatt class from scratch. With planning and construction times of at least six years, this can only succeed if it is started immediately.
But at the moment when Germany is desperately looking for investors for new gas-fired power plants, the EU Commission is making the conditions for this much more difficult. According to a proposal by France, Brussels only wants to award the rating "sustainable" in the so-called taxonomy regulation to those gas-fired power plants that produce less than 100 grams of CO₂ per kilowatt hour. However, such gas-fired power plants are not even on the market yet. The most modern gas-fired power plants today emit three times as much, around 300 grams of CO₂ per kilowatt hour.
No investor would be prepared to invest in gas-fired power plants if they do not receive the EU seal of approval for "sustainable" electricity generation. Because the risk would be too great that climate policy pressure would soon lead to an early shutdown of the expensive systems.
The roughly 900 municipal electricity suppliers in Germany in particular are facing a dilemma: "If the limit of 100 grams of CO₂ becomes part of the EU taxonomy, no one in Germany will probably build gas-fired power plants for years," says Ingbert Liebing, General Manager of the Association of Municipal Enterprises (VKU ). The result: "For reasons of security of supply, there would then be no other choice than to let coal-fired power plants run longer or to import nuclear power from France." Moving forward the coal phase-out to 2030 under such conditions would, according to Liebing, be "illusory".
As a municipal supplier with particularly close customer loyalty, the municipal utilities, which operate a considerable part of the gas-fired power plants in Germany, do not want to let things get that far. A compromise proposal that the VKU is now feeding into the Brussels taxonomy negotiations is intended to keep investors in line and at the same time reduce emissions from gas-fired power plants over time.
The Stadtwerke-Verband advocates a change from a rigid limit to a budget. New gas-fired power plants are to be allocated 820 kilograms of CO₂ per kilowatt and year of installed capacity, which they can use flexibly over the term. "This budget is also extremely ambitious and acts like a CO2 brake that has an increasingly strong effect over time," Liebing promotes the proposal: "The budget approach ensures that the operator of the power plant pursues a decarbonisation strategy at an early stage by switched to hydrogen, for example. "
Brussels could not find out whether the compromise formula still has a chance of being taken into account in the taxonomy decision. There is not much time left: the EU Commission wants to reach a final decision on the so-called delegated legal acts on this topic by the end of the year.
Die Welt, 17 December 2021
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Climate, the far-Left and the devilish problem facing the Australian Green Party
Rachel Griffiths, the Golden Globe-winning Australian actress, is no stranger to prompting public debate through outrageous stunts.
In 1997 the Muriel’s Wedding star famously paraded semi-naked outside Melbourne’s Crown Casino in protest of a state government she claimed was “raping” the city of its dignity, compassion and sense of community. When asked by a journalist why she felt the need to be topless, Griffiths replied: “If I didn’t flash my tits, you wouldn’t have put me in the paper.”
It’s what makes Griffiths’ most recent political commentary all the more interesting.
When the Australian Greens party announced a proposal to ban horse racing and impose a 1 per cent levy on all bets to fund a transition, Griffiths was outraged.
“When the planet is melting this will not help you save it. Focus on carbon emissions/boosting infrastructure and you might make a difference,” she wrote on Instagram this week.
She said a ban on the nags would only alienate any Greens voter who was over 40 living outside all but six inner-city postcodes and “help re-elect a government you won’t have a voice in”. Griffiths, who coincidentally now plays a crossbench MP in ABC political drama Total Control, neatly highlights the challenge the Greens have in the coming months.
It is an increasingly contested space for minor parties to find relevance, cut-through and, importantly, air-time. It will be even harder as the election looms with several climate-focused, progressive, independent candidates stealing their limelight as they fight for seats that not so long ago the Greens had hoped they might one day win.
In Melbourne the Greens vote in both Higgins and Kooyong leapfrogged Labor in recent years and put them both firmly in the targets of Adam Bandt’s party. But the independent push is now costing them members, donors and likely volunteers at voting booths on election day.
And so once again chances of winning any of the 10 or so lower house seats identified on the party’s regular triennial hit list are already looking bleak.
The Greens vote has for more than 15 years now been highly influenced by the wider context of the public debate and the issues which voters perceive the election to be about. Loyalty levels of its voters are well below those of the major parties, but if issues which are strongly associated with the Greens are front-and-centre then they can be assured of some success. If not, things go backwards.
While the Greens have often targeted “soft” Labor voters, they’ve found there are equally a lot of “soft” Greens voters that they can - and often do - lose at each election.
Which begs the question, what is the relevance of the Greens at the next federal election? Can they ever again match the almost 12 per cent of the vote achieved under Bob Brown in 2010 or has their influence peaked?
On Sunday this masthead reported that businessman Graeme Wood, who has poured more than $2 million into their campaigns over the past decade, had grown frustrated with the party. The founder of online travel company Wotif said they needed a “shot in the arm” because the party’s support had not increased in the past decade.
Wood isn’t the only big donor over the Greens. David Rothfield, an environmental campaigner and philanthropist who donated half a million dollars to the Greens, Labor, and activist group Get Up, has quit the party. He’s joined the “Voices of” movement to oust incumbent Liberal MP Tim Wilson in the seat of Goldstein.
Former Wallaby [Rugby footballer] David Pocock, who is tight with a number of Greens figures, is standing as an independent for the Senate in the ACT. Those close with him say he stands a better chance of being elected without the baggage of the party and is assured of their preferences in a jurisdiction where the Greens vote is north of 17 per cent.
Pocock, outspoken on social justice issues and was once arrested after chaining himself to a digger at a NSW coal mine protest in Leard State Forest, says he is open to receiving money from businessman Simon Holmes a Court’s Climate 200 fund, a war chest of as much as $20 million to bankroll candidates who are cutting the Greens lunch.
The party can take credit for consolidating its 10 per cent of the vote over a decade but has all but dealt itself out of negotiations by regularly ruling out deals with the Coalition. The handful of times it was prepared to reach deals with a conservative government it was torn apart with bitter internal feuding.
So, why would Anthony Albanese agree to a power-sharing deal if he can’t win a majority at the next election? He knows Bandt would always back a Labor government on supply.
Bandt hopes to make the Greens the biggest third party in the Senate’s history by adding two seats at the next election. But when he promises he’ll win extra lower house seats and influence government policy, that’s what he will be judged on.
The Greens’ long-term issue is that they’ve become the natural home of anyone who is concerned about climate, but also of the far left. And when their broader policies alienate those who care about the climate but aren’t of the far left, that’s when a Climate 200-backed independent might be a more appealing choice.
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My other blogs. Main ones below
http://dissectleft.blogspot.com (DISSECTING LEFTISM )
http://edwatch.blogspot.com (EDUCATION WATCH)
http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)
http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)
http://snorphty.blogspot.com/ (TONGUE-TIED)
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Jim Hansen and his twin
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