Newsletter - July 22, 2020
The implications of the escalation in border tensions between India and China last month were never going to be limited to security. Soon after the Indian Ministry of Power declared intentions to ban all power equipment imports from China, Indian power producers latched on to the recent clamour to boycott Chinese goods to angle for extensions in the implementation of environmental norms in thermal power plants, particularly with regards to the installation of Flue-gas desulfurization (FGD) technology to control toxic sulphur dioxide emissions.
In a letter written to the Prime Minister’s Office (PMO) on July 1 the Association of Power Producers (APP) sought an extension of three years from the 2022 deadline to install the emission reducing technology. Their reasons? “The disruptions caused by the pandemic and a growing clamour for the boycott of Chinese goods in the aftermath of the recent clash between Indian and Chinese troops,” elaborates the letter. On July 7, the Federation of Indian Chambers of Commerce & Industry (FICCI) followed suit and wrote to the PMO seeking intervention for the immediate deadline for installation of emission control equipment at captive power plants for which the deadline was June 30, 2020.
An ongoing saga of excuses
These requests from industry did not come out of the blue. In fact, just weeks before the APP letter to the PMO, the Supreme Court summarily dismissed a petition by the body seeking extensions to the deadlines for meeting pollution norms for thermal power plants. The government notification mandating FGD technology issued to all TPPs in the country was issued in 2015 with the deadline set in 2017. Since then, the deadline has been extended to December 2022 in a staggered manner. Yet, we find that only 1% of the total coal power plant capacity has commissioned FGD technology till July 2020, casting serious doubts on whether the rest of the plants can meet the 2022 deadline. In the Delhi-NCR region, where TPPs were required to install the technology by the end of 2019, only one in 11 plants had managed to meet the deadline. So, are the latest requests for extensions justified?
According to Sunil Dahiya, analyst at CREA, these latest explanations by industry fall flat upon scrutiny. “It’s a ridiculous and an unjustifiable argument to make,” Dahiya said. “For the majority of the capacity, the bids are yet to be awarded. If bids haven’t been awarded yet, then there cannot be any question of delay.” Bids have been awarded only for 46,300 MW (27%) capacity, and are still to be awarded for 1,22,857 MW (72%) capacity.
CEA’s figures on the status of FGD installation give Dahiya’s arguments further credence, especially considering that FGD installation typically takes at least two years after being bid out. Despite industry’s persistence that recent disruptions would force non-compliance of emission norms, it can clearly be seen that until July 2020, less than 20% of the required FGD installations had been bid out. For state units, the proportion of bid out projects is even more abysmal at just 5% with installations complete at none of the 53,225MW of thermal power plants.
“Since 2015, there have been several arguments that have been put forth by the APP, from a lack of space for the installations, to funding requirements and now a lack or scarcity of technology providers for FGD,” Dahiya said. Most of these have been debunked by the Ministry of Environment, Forest and Climate Change, the courts and the CPCB, Dahiya said.
While setting the China argument straight, Dahiya said, “Companies like BHEL have the technology and can adapt them to our needs. China is not the only supplier. Besides, Aatmanirbhar Bharat initiative is all about producing locally. The only thing stopping pollution control technology installation is not funds or lack of tech supply, but lack of willingness”.
This sentiment was echoed by environmental lawyer Ritwick Dutta. “Recently, the MoEFCC exempted the requirement of trucks carrying coal to be covered in tarpaulin. This order was struck down by the NGT. But just a few days ago, the NTPC challenged the NGT order in the Supreme Court. Today, we have power companies who are not even willing to cover their trucks with tarpaulin because they say it will lead to a delay in loading and unloading of coal. There is no intention to comply.”
The burden of apathy
While the contribution of thermal power plants to air pollution has been beyond doubt, source-based attributions of specific elemental loads have only recently begun giving us a more granular picture. Professor SN Tripathi, a member of the Steering Committee of the National Clean Air Plan, and Head of Civil Engineering at IIT Kanpur, conducted a recent study to determine their contribution to overall pollution. His study selected sulphur, lead, selenium and arsenic to analyse sulphate composition in Delhi in the lockdown phase and before that.
“These 4 elements give a fair idea about source contribution from power plants to total PM2.5. This concentration of power plants to total PM2.5 has been in the range of 8pc, in Delhi’s air. After a significant drop, it came close to levels towards the end of the lockdown.”
According to a paper published in 2017 on the costs and benefits of FGD installation in Indian power plants, over 15,500 deaths annually are attributable to SO2 emissions from TPPs. The paper further elaborates that full coverage of FGDs in Indian power plants would reduce this burden by about 90%.
Is it all about the money?
While power producers continue spending several lakhs of rupees in legal fees, they simultaneously continue to complain about the high cost of retrofitting FGD technology. Power producers, in the past, have even petitioned the government to exempt producers with power purchase agreements (PPAs) signed before 2015 to be exempt from the additional costs of installing emission control technology under the “change in law” clause of their PPAs. This contention was put to rest by the Central Electricity Regulatory Commission (CERC) in 2018 when it dismissed a petition by Adani power against DISCOMs in Gujarat and Haryana. The CERC stated that since environmental norms that are sought to be implemented by the 2015 government notification had been specified in the Environment (Protection) Act of 1986, there is no question of any exemptions.
Studies though have suggested that concerns surrounding these costs may also be overblown. According to CEEW’s revised estimates based on new tenders issued, if all plants, including those identified for retirement in Central Electricity Authority’s National Electricity Plan, 2018, were to be retrofitted with PCT, it would cost ₹94,267 crore. If only eligible plants were included, the cost would fall to ₹80,587 crore. The more the retrofitting is delayed, however, the higher the costs will be as seen in the CEEW’s revised cost estimates, which have increased by 10% compared to their 2018 cost projections due to implementation delays.
The penalties charged for non-compliance on their own seem significant – ₹18 lakh per month in some cases. But in comparison to the magnitude of power generated, the penalties actually range between 0.12% – 3.28% of the energy cost. “There is no significant penalty being charged for non-compliance. The penalty is notional at best. Until a clear policy directive comes from the Centre, it’s difficult to get power producers to take compliance seriously,” said Karthik Ganesan, Fellow at Council on Energy Environment and Water (CEEW).
The David versus Goliath argument fits perfectly in this scenario as those who are ultimately suffering are citizens, especially those living around these coal plants. “There is a study by the Health Effects Institute, which estimated that in India, around 1.3 million deaths are likely to be recorded annually by 2050 because of the failure of thermal power plants to comply with pollution control norms,” said Vibhuti Garg, Energy Economist, IEEFA.
A comparative analysis by CEEW Urban Emissions between the cost of pollution control technology and social costs revealed that the capital cost of FGD installation translates to 30-72 paise/ KWh, depending on the capacity at which the plant is operating, plant load factor and life of the plant. The health and social costs drop from ₹8.58/KWh to 0.73 paise/KWh if the coal plants meet the standards.
Close to 20% of India’s installed coal capacity has already outlived their lives. With the Indian government making no secret of their desire for coal to feature prominently in India’s energy mix for the foreseeable future, one can only hope that this hunger is not satiated at the cost of public health and environmental considerations. Even the Supreme Court, which is often the last hurdle for industrial impudence regarding environmental regulations has been less than dependable when it comes to strict enforcement of norms, as is seen by the recent dilution of NOx emission norms for thermal power plants.
“The bottomline is this. How much do you actually pay for human life that has directly been lost? This is where we are losing the plot. Economics has its own place, but the health and fundamental rights of people has to also be given importance. No civilised society can allow such blatant disregard of the law,” reflects Dutta.
Severe flooding because of monsoon rain has led to the displacement of around 4 million people in India’s northeastern state of Assam and Nepal. The death toll has now reached at least 189, according to government data. The main reason for the flooding is an overflowing Brahmaputra river.
In Assam, 85 people were killed as a result of flooding with 70 lakh people affected. Assam is battling floods for the third time in two months with over 54 lakh people affected so far. The floods have affected Assam’s wildlife. More than 100 animals, including at least eight rhinos have been killed.
The MET department has issued a red alert warning in Assam and its surrounding states, such as West Bengal, Meghalaya, Arunachal Pradesh, Nagaland. This warning is an indication for disaster control authorities to prepare for flooding or landslides.
Neighbouring Bangladesh is also grappling with floods, which have killed at least 21 people and affected 26 lakh people. The UN has estimated that half of the country will be affected by incessant flooding in the days to come.
China has also upped its flood level alert in the Huai River region after several days of incessant rain. Areas around the Yangtze river and Lake Tai have also declared flood alerts. Authorities blasted a dam on a Yangtze river tributary using explosives to ease the flooding. Flash floods in Sulawesi, Indonesia. have displaced more than 14,000 people and 67 people have been reported missing.
World inching closer towards 1.5°C warming limit
There is a 24% chance that one of the next five years will be at least 1.5°C warmer than pre-industrial levels, according to the World Meteorological Department’s Global Annual to Decadal Climate Update. Although the chances seem slim now, the percentage is only going to rise. In other words, while we are not there yet, we are getting quite close to the limit set in the Paris Agreement.
Globally, surface air temperatures for the month of June this year were 0.53°C warmer than the average June from 1981-2010. The Siberian Arctic recorded the most above-average temperatures.
Oil & gas drilling in US, agriculture across world pushing up methane emissions: Studies
Two recent studies have shown there are two reasons why global methane levels are rising exponentially – oil and gas drilling along with agricultural production across the globe. This is significant because up until the 2000s, methane output from human activity was mainly attributed to coal mines. The studies – published in the journals Earth System Science Data and Environmental Research Letter – measured the emissions using ground and satellite images as well as following consumption and production trends. Between 2000 and 2017, the only region where methane emissions reported a drop was Europe.
The European Union, this week, concluded a prolonged round of negotiations to decide the budget of the bloc for the next seven years running up to 2027, including €750 billion for post-COVID recovery stimulus. The mammoth stimulus and the €1.82 trillion in total expenses approved by EU heads of states and governments until 2027 shall come attached with riders ensuring the reservation of 25% of spending for climate-friendly expenditure. While the move has been seen as aiding international efforts towards limiting climate change and its impacts, environmentalists have noted that specific allocations have been diluted in order to reach an agreement. Prominently, the Just Transition Fund, which has been created to facilitate a shift to cleaner energy sources was slashed to just €10 billion over the next seven years from the initial proposal of €40 billion.
Publicise EIA 2020 in local languages, give time for feedback to avoid stay on law: K’taka HC to Centre
In a major boost for environmentalists, the Karnataka high court has warned the central government that if it does not widely publicise the draft Environment Impact Assessment (EIA) 2020 in local languages and give affected parties time to offer their feedback, the court will consider staying the proposed law. The court gave the warning in response to a petition filed by an environment non-profit seeking an extension in deadline for feedback to December 31, 2020.
The Modi government, meanwhile, blocked a website that criticized the EIA 2020. LetIndiabreathe.in was blocked by the National Internet Exchange of India (NiXi) just weeks after the critical sample letter was emailed over a thousand times to the Union environment ministry. The NiXi also blocked the website for the India chapter of Greta Thunberg’s international movement, FridaysforFuture.in, along with ThereisnoEarthB.com.
Globally, economic recovery packages aiming to save businesses, ignoring climate change: Studies
Studies have shown that despite enormous pressure on governments to include climate change initiatives in their economic recovery packages, most have chosen to save business over our planet. According to an Energy Policy Tracker database launched this week by a group of research institutes and campaigners, G20 countries have pledged $151 billion to support sectors that rely on fossil fuels, such as airlines, oil and gas, roadbuilding and coal. In contrast, these governments have committed just $89 billion on green energy, according to the data.
Another study by consultancy Vivid Economics found that the recovery packages of 17 significant countries will spend around $3.5 trillion on sectors that will have a significant environmental impact and will largely ignore the green sector.
A third study by Bloomberg New Energy Finance found that Europe has been a leader as far as green recovery policies are concerned, committing 0.31% of its GDP to green spending, which is much more than the average of 0.01% pledged by North America and Asia.
Saudi Arabia seeks to censor discussion on fossil fuel subsidies at G20 summit
The host of this year’s G20, Saudi Arabia, is moving to remove the words ‘fossil fuel subsidies’ from expert briefings and replacing it with ‘fossil fuel incentives’, angering environmental activists. This change comes despite the fact the G20 countries made a commitment in 2009 to phase out fossil fuels. Saudi Arabia is the world’s largest oil exporter because it has been able to sell its oil much below the international price benchmarks as a result of low production costs.
Half a million FRA claims rejected by states in suo motu review
Over half a million (543,432) claims under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, in suo motu reviews have been rejected by 14 states till February 24 of this year – this information was shared by state governments with the Union Ministry of Tribal Affairs (MoTA) in a meeting held on February 24. West Bengal rejected around 92% of all reviewed claims. Not all the claims that have been rejected will lead to the eviction of the claimants because several were rejected because of double entries.
Climate laws are effective, but lot more needs to be done: Study
A new study published in the journal Nature has observed the impact that climate laws in 133 countries between 1996 and 2016 have had on the reduction of greenhouse gas emissions (GHGs). The results are encouraging, in that legislative activity – in the form of parliamentary acts, executive orders and policies, have had an impact – both short term and long term. But there is room for much more initiative.
According to the study, each new law reduces annual carbon dioxide (CO2) emissions per unit of gross domestic product by 0.78% nationally in the short term (during the first three years). In the long term (more than three years), the percentage goes up to 1.79%.
Australia set for net-zero emissions target by 2050
Australia’s Northern Territory became the last jurisdiction in the country to commit to net-zero by 2050. This means that the country now has a de facto national net-zero target.
Meanwhile, the country’s Great Barrier Reef, which has become a cause for concern after regular bleaching events were observed in the past few years, is now getting the help it needs. A government-backed research programme is set to spend $4.7 million to develop technologies that could shade the corals and make clouds more reflective during marine heatwaves.
In boost to US infra projects, Trump weakens environmental law
US President Donald Trump announced plans to alter the National Environment Protection Act (NEPA), to make things easier for infrastructure projects. The original law, established in 1970, required federal agencies to remain transparent and take feedback from the public before starting work on infrastructure projects that could have an impact on the environment. The Trump administration, however, wants the time limit for the review process to be shortened – a move that could have a direct impact on the approval for projects related to coal mines, power plants, pipelines and roads.
India’s Supreme Court has allowed the government to relax emission norms for coal power plants set up between December 2003 and 2016. Such plants can now emit 450 milligram / normal cubic metre (mg / Nm3 ) oxides of nitrogen (NOx), up from 300 earlier.
Experts said cleaning up the polluting sector is “absolutely non-negotiable” because it accounts for 60% of total PM emissions from all industry, 45% of sulphur dioxide (SO2) and 30% of NOx emissions. The Centre recommended watering down emission limits claiming that meeting 300 mg / Nm3 and below was not possible at varying load.
To verify the claim, the Central Pollution Control Board (CPCB), in collaboration with National Thermal Power Corporation Ltd (NTPC), monitored emissions at seven units of four thermal power plants between February 13 and April 2, 2019. Five of them complied with NOx emission standards of 300 mg / Nm3 at full load. Some units didn’t during partial load operations.
Even after getting a five-year extension, most of the total installed coal-fired capacity will not be compliant with the crucial SO2 and NOx standards by 2022.
After 4 ash dyke breaches in one year, NTPC to pay Rs10 crore interim compensation
India’s green court National Green Tribunal (NGT) has ordered state-owned power company National Thermal Power Corporation (NTPC) to pay interim compensation of Rs10 crore for the breach of its fly ash dyke into Rihand reservoir, which took place on August 7, 2019, and October 6, 2019, respectively, at its facilities in Singrauli and Sonbhadra districts of Madhya Pradesh and Uttar Pradesh. NGT also ordered NTPC to build a wall to strengthen the ash dyke.
NTPC’s nine major thermal power stations operate out of Singrauli and Sonebhadra, with a total installed power generation capacity of around 21,270 megawatt (MW). Over half of this capacity was added in the past 10 years, leading to the generation of excessive amounts of fly ash, which has polluted a large part of the region. Over the past one year, four breaches of ash dyke have taken place.
The NGT had directed the Central Pollution Control Board (CPCB) to prepare an action plan for de-silting of the reservoir. In Punjab, the NGT has asked for a restoration plan and assessment of compensation for the damage caused by fly ash generated by Talwandi Sabo Power Limited (TSPL) in Mansa district. The residents and farmers in the region have complained about the air pollution and damage caused to the soil by radioactive and heavy metals in coal and fly ash. Indian coal has a higher percentage of ash (30-45%) compared to other countries, experts said.
Carbon tax works, CO2 emissions fall by 2% annually, says ‘largest-ever’ study
If the industry is charged for burning fossil fuels, emissions fall — that’s the conclusion of the “largest-ever” study on impact of tax on burning fuels. Scientists found that average carbon dioxide (CO2) emissions fell by 2% annually over 2007–2017 in countries with a carbon price in 2007 and increased by 3% annually in the others.
Scientists analysed over 20 years of data from 142 countries, 43 of which had a carbon price of some form by the end of the study period. The emissions grew at an average rate of 2% annually, the study said.
Researchers pointed out that the difference between an annual increase of 3% and an annual decrease of 2% is five percentage points. About two percentage points of that are due to the carbon price, the rest due to other factors such as improving technologies, population and economic growth, economic shocks, renewable energy and differences in fuel tax rates, analysts said.
Green court raps Uttar Pradesh top officer over violating brick kiln ban in NCR
India’s green court The National Green Tribunal (NGT) has declared Uttar Pradesh government order allowing brick kilns to operate in the National Capital Region null and void, as it violated the tribunal’s directives. The NGT had banned operation of brick kilns in the NCR until the Central Pollution Control Board (CPCB) reported on impacts of industry’s waste on the environment.
The CPCB submitted its findings on July 6, but the UP government allowed kilns to operate from March 29, a week after lockdown was imposed. The CPCB recommended a ban on brick kilns during the winter (October-February) as the atmosphere had no assimilative capacity, but allowed only a restricted number of kilns to operate during the summer (March-June).
The NGT was approached by an applicant who cited media reports of alleged 40% increase in cancer and asthma cases in Baghpat district and sought action against 600 allegedly illegal brick kilns operating in the area.
Expanding cleaner CNG fleet, no logic in making diesel cars: Maruti sales director
Maruti, India’s largest selling carmaker, said it finds diesel cars economically unviable. Shashank Srivastava, executive director (sales and marketing) at Maruti Suzuki India, said there was “no logic” in developing a small diesel engine, sedans and entry-level SUV segment, “as now economics does not support it.”
The diesel prices are as high as petrol now and the new BS-VI emission norms have increased the cost of diesel cars, leaving them with very few buyers. Maruti is expanding its CNG fleet. The company has set an ambitious target of selling 10 lakh cars with green technology over the next few years. The CNG segment grew last fiscal by 7%, while the overall passenger vehicle industry declined by 18%.
India plans to extend safeguard duty by another year on solar imports from China, Vietnam and Thailand at a rate of around 15%, to boost domestic manufacturing, but manufacturers want it to be levied for 4 years, PV magazine reported.
The duty is not enough to compete with cheaper Chinese imports as a state study shows solar imports are forcing Indian manufacturers to operate factories at reduced production capacities. Solar cell and module import volumes massively spiked to 9.79 GW in 2017-18, from 6,375 MW in 2016-17.
The figure fell to 8.01 GW in 2018-19 after the duties were introduced. The government has also proposed to impose a 20-25% basic Customs duty on solar modules that will gradually go up to 40%.
Pandemic can’t stop RE? ReNew hikes salaries, plans to double projects to 20GW by 2025
Undeterred by the COVID-19 pandemic, India’s largest renewables energy company, Renew Power, plans to invest between ₹40,000 crore and ₹50,000 crore (nearly $266.7 million) to set up a 2GW solar cell and module manufacturing by 2025.
Experts pointed out there is growing interest among companies to aggressively expand in RE. Gautam Adani’s Adani Green is also contesting to become a global leader with a capacity of 25,000 MW. Renew Power chairman and managing director Sumant Sinha told ET that despite COVID-19, the government has announced new bids keeping the companies enthused.
Throughout the lockdown, ReNew Power managed to maintain its RE supply, which is also why it could give out salary increments ranging from 5% to 12% to its over 1,100 employees.
Adani Green liable to pay damages: Karnataka regulator cuts tariff, rejects Force Majeure claims over delayed solar project
Karnataka Electricity Regulatory Commission (KERC) has said Adani Green is liable to pay damages In the case of delay in delivery of solar project. The attempt by the renewable energy company to get relief under the ‘Force Majeure’ clause has been rejected by the KERC.
Adani defaulted on a 20MW solar power project, at a tariff of ₹4.92 (~$0.066)/kWh, for which it had signed a Power Purchase Agreement with Karnataka discom Chamundeswari Electricity Supply Company Limited (CESCL). Adani cited imposition of the Goods and Services Tax (GST), the demonetization, and delays in releasing imported modules by port authorities as the force majeure events.
It further sought extension of time. The regulator rejected all claims, including the request about the tariff and reduced the tariff to ₹4.36 (~$0.058)/kWh over the delay in the commissioning of the project.
Rajasthan ups solar energy target; Tamil Nadu inks solar MoUs; Delhi, K’taka govt roofs await solar installations
Rajasthan is set to get over 1,070MW of grid-connected solar PV energy projects through Solar Energy Corporation of India (SECI). The state has set a target of meeting 21% of its total energy needs from solar sources by 2023-24. The government expects the new capacity to further reduce the cost of power.
The Tamil Nadu inked a memorandum of understanding (MoU) for a ₹10,000 crore investment, including in solar power. This will create 13,507 jobs in the state in solar cells, data centres and industrial parks, state release said.
Karnataka’s Tumakuru Smart City released a tender for 1.2MW of rooftop solar projects on government buildings in the city against an earnest money deposit (EMD) of ₹6,00,000 (~$8,040) for the proposed capacity.
Delhi discom Indraprastha Power Generation Company Limited has issued a 98-day extension for the completion of its 21.5MW of rooftop solar projects to be developed on government buildings in Delhi.
Tata Power Green was offered a 225MW solar-wind hybrid project from its Mumbai-based distribution company (DISCOM) – TataPower Mumbai Distribution. Tata will supply power to the DISCOM under a power purchase agreement (PPA) for 25 years.
Ukraine’s new law drastically cuts RE tariffs to clear massive debt to energy companies
To get rid of mounting unpaid bills and pacify angry renewable energy power developers, Ukraine has passed a law that significantly reduces high tariffs set up years ago. With the slowdown worsening because of the pandemic, the high tariffs have become a burden for the state.
The government has decided to reduce tariffs by 15% for solar generation and by 7.5% for wind generation. The government expects the new law will help reduce prices for solar and wind energy, as well as achieve green goals and protect international investors. The state’s debt to green energy companies from January to June 2020 amounts to $526 million.
Germany’s doubling of its EV subsidies has made some EVs so cheap that the Autohaus Konig chain of dealerships is now offering a free lease on the Renault Zoe electric car. Earlier, the car used to cost €125 per month for two years. But under new rules, the initial purchase cost of the car is covered under a €3,000 environmental subsidy, and the €125 monthly lease expense is covered by a new “innovation bonus” subsidy of an additional €3,000.
In essence, owning the car is now cheaper than paying for a cellphone plan in the country. The dealership has been flooded with as many as 3,000 inquiries, 300 of which eventually leased the car.
Berkeley lab claims major breakthrough in li-ion battery chemistry
A major new breakthrough in preventing the growth of dendrites in lithium-ion batteries has been reported by the Lawrence Berkeley National Laboratory (Berkeley) in the US, which could significantly extend the batteries’ life and their range of applications. Li-ion batteries so far have struggled with using lithium metal in their anodes (instead of graphite) — to power them for hundreds of miles on a single charge — as it forms dendrites (tiny tree-like structures) that lower the batteries’ useful life over several charging and discharging structures.
However, Berkeley claimed that the use of new, soft electrolytes (that are a mixture of ceramics and polymers) can stop the formation of dendrites at a very early stage. If commercially viable, the technology could boost present-day li-ion batteries’ range by as much as 30-50%, which would even make them suitable for medium-range aircraft.
Biden, Cuomo chalk up big plans for electric cars
US presidential candidate Joe Biden and New York state governor Andrew Cuomo have announced big plans to get American voters to switch to electric cars. Biden has announced financial incentives for customers to buy electric cars and trucks — including, possibly, used ones — as long as they are “manufactured in the United States”. While this would greatly benefit Tesla, worthy competitors like Hyundai and Kia are likely to miss out. Biden’s plan also includes installing 500,000 EV chargers all across the US as an “investment” towards future mobility and job creation.
In New York, governor Cuomo has unveiled his plan to slash the state’s carbon emissions by 85% by 2050 under the ‘EV Make Ready’ program, under which the government will help accelerate the sale of electric vehicles. It has also tied up with 14 other states in the region, including Washington DC, to ‘electrify’ diesel buses and trucks by 2050.
Reliance Industries’ much-discussed sale of 20% of its oil-to-chemicals (O2C) business to Saudi Aramco may have stalled over Aramco’s insistence that Reliance re-evaluate the asking price of US$75 billion post Covid’s battering of the oil market. The potential deal was first announced last year and the sale would include the firm’s twin refineries at Jamnagar (Gujarat), its petrochemical plants and 51% of its fuel retailing business.
Aramco, however, is no longer certain of the returns from the businesses as they would need substantial capital investment to be turned into facilities that only focus on O2C, as demand for petrol, diesel and aviation fuel has fallen after the Covid-19 pandemic. But Reliance Industries chairman Mukesh Ambani has announced that after a successful rights issue of US$7 billion last month, its net debt has fallen to zero and it’s therefore not keen on the Aramco deal going through.
$20 billion LNG project okayed in Mozambique by seven financiers, including Japan
A $20 billion LNG project in Mozambique by French oil giant Total to extract, liquify and export the fuel — Africa’s biggest energy project ever — has been okayed for funding by seven countries: the US, Japan, Netherlands, UK, Italy, Vietnam and South Africa. The project has secured funding in the hopes of future profits expected from a global shift towards natural gas as a cleaner alternative to coal, with the US export-import bank making $5 billion available. Even the African Development Bank is financing the project, despite criticism by environmentalists on what it would mean for a continent already vulnerable to climate change.
The Japan Bank for International Cooperation, too, will shell out $3 billion, even as Japan has vowed to slash funding for coal in the developing world after mounting criticism.
Also, according to the 2019 Production Gap Report, governments investing in natural gas plan to extract 47% more of the fuel than can be burned under the 2°C global warming limit. The deal exposes the double standards of some of the funders’ climate policies as well, such as the UK’s, which is rapidly progressing towards a zero carbon economy within its borders but continues to finance fossil fuel projects around the world.
Big Oil announces cleverly crafted joint carbon reduction target
The world’s biggest oil and gas drillers have together released a joint target to reduce their operations’ carbon intensity to 20-21 kg of CO2 equivalent per barrel of oil equivalent by 2025 — as a proportion of their output. This is down from 23kg of CO2e/boe in 2017. However, the target means that the sector’s absolute emissions can go on rising, since steady expansion of oil and gas operations is still being planned.
The target is borne out of an agreed methodology that’s common to all, and could be extended to LNG and refining operations in the future. A significant member amongst the signatories in ExxonMobil, which has so far resisted shareholders’ calls to increase ambition on climate action, and is yet to release its carbon emission figures for 2019.