2024-07-01 20:17

LONDON, July 1 (Reuters) - Ships sailing through Arctic waters will no longer be able to use or carry heavy bunker fuel oil under a United Nations shipping agency regulation which took effect on Monday. Yet environmental groups say the ban does not go far enough in geographic scope or addressing dirty black carbon emissions from ships, which can darken white ice and speed up the melting wrought by climate change. The ban, adopted in 2021 by the UN's International Maritime Organization (IMO), aims to prevent heavy fuel oil (HFO) spills which could have a devastating impact on the Arctic's sensitive environment and species, including walrus, polar bears, and beluga whales. "Shipping in the Arctic continues to increase - both in terms of numbers of ships and also the length of time ships are sailing in the Arctic," said Sian Prior, lead advisor of the Clean Arctic Alliance which comprises 20 environmental groups. As climate change opens up the region, the Arctic is at heightened risk of a spill. Although the ban begins on July 1, it will only come into full force in 2029 after a number of exemptions expire. But some Arctic coastal countries told Reuters they intend to take more immediate action. Heavy fuel oil is a tar-like residual waste from the oil refining process that is about 30% cheaper than alternatives. It is thicker than other fuels, making it difficult to clean up in the event of a spill. WAIVERS AND ADOPTION The regulation will result in the prohibition of nearly a third of HFO carried and 16 percent of HFO used in Arctic waters as of July 1, 2024, compared with the 2019 Arctic fleet, according to a 2020 analysis by the non-profit International Council on Clean Transportation. That is because it grants a temporary exemption to ships built since 2017 that have protected fuel tanks which lessen the likelihood of a spill. LNG tankers, bulk carriers and cargo vessels generally use the most HFO in operations. The regulation also allows Arctic coastal nations to grant waivers to ships flying the flag of the nation while operating in sovereign waters, until 2029. More than half of the 2019 Arctic fleet would meet the standards to receive a waiver, the analysis found. Five Arctic coastal nations are able to issue waivers due to their geography. Canada's transportation ministry told Reuters it would issue waivers to domestically flagged vessels involved in providing food and fuel supplies to Arctic communities until July 1, 2026. Any waiver decision would be made public, a government spokesperson said, noting Canada had not yet received any applications. Norway already has the Svalbard Environmental Protection Act which bans HFO. Earlier this month, an Irish shipping company was fined 1 million NOK ($94,000) for sailing through Svalbard's waters with HFO on board. Denmark's Ministry of the Environment did not respond to a request for comment on whether it would issue waivers for the waters around Greenland. The United States did not immediately respond to a request for comment. Finland has also not yet adopted the regulation, but a government spokesperson told Reuters it aimed to do so later this year. RUSSIA'S POSITION UNCLEAR It remains unclear when Russia, responsible for more than half of the Arctic coastline, will implement the ban. Russia would need to approve amendments to a maritime convention on pollution before the regulations could enter into force, Russia's mission to the IMO said in an October 2022 submission. The country's transport ministry did not respond to a request for comment. Russia's state-owned shipping group Sovcomflot "will be guided by the decisions of both international and national maritime authorities and comply with them", the company said. The impact of Western sanctions is also likely to weigh on compliance with the new HFO regulations, shipping industry sources said. Enforcement of the IMO's stringent use of high sulphur fuel oil globally, introduced in 2020, has been impacted by delayed implementation of the same regulations in Russia, as well as increasing non-compliance by the so-called shadow fleet of tankers transporting oil from countries hit by sanctions including Russia, Iran and Venezuela. Sign up here. https://www.reuters.com/sustainability/climate-energy/new-fuel-restrictions-ships-arctic-fall-short-green-groups-say-2024-07-01/

2024-07-01 20:16

BRUSSELS, July 1 (Reuters) - European manufacturers of hydrogen equipment have urged the European Union to step in to help the industry compete with cheaper Chinese producers, in a letter seen by Reuters on Monday. The companies, among them Thyssenkrupp Nucera (NCH2.DE) New Tab, opens new tab, Siemens Energy (ENR1n.DE) New Tab, opens new tab, and Nel Hydrogen (NEL.OL) New Tab, opens new tab, want Brussels to do more to ensure Europe-made equipment powers the EU's plan by 2030 to produce 10 million tonnes of renewable hydrogen using electrolysers, machines that use electricity to split water to produce the green fuel. China is rapidly expanding its production of hydrogen equipment and is now home to 40% of the world's electrolyser manufacturing capacity, up from 10% last year, the letter said, adding that state subsidies were giving Chinese firms an edge. "This skewed playing-field creates unfair competition and puts European electrolyser manufacturers at a significant disadvantage," said the letter to European Commission President Ursula von der Leyen. "Once a technology or its supply chain is lost, it is impossible to bring it back," said the letter, which was dated on Monday and first reported by the Financial Times. Siemens Energy declined to comment beyond the contents of the letter. The European firms asked Brussels to introduce "resilience criteria" that would favour local firms in upcoming auctions from the bloc's Hydrogen Bank funding scheme, and ensure certain parts of the production process are located in Europe. "It is not about closing the European market, it is about ensuring fair competition in the European market and building up resilient value chains," Christoph Noeres, the head of green hydrogen at Thyssenkrupp Nucera, told Reuters. The EU hydrogen bank awarded 720 million euros to seven EU projects in April. Industry sources have said the low-priced bids from some successful projects indicated that they would be using cheaper Chinese equipment. The EU is toughening its stance against China on green technologies, to attempt to ensure European industries can compete globally and avoid deepening Europe's reliance on Beijing for key building blocks of the clean energy transition. Brussels last month announced tariffs on imported Chinese electric cars, and is investigating Chinese subsidies for wind and solar suppliers. Sign up here. https://www.reuters.com/sustainability/hydrogen-sector-asks-eu-help-local-firms-compete-with-china-2024-07-01/

2024-07-01 19:01

BRASILIA, July 1 (Reuters) - A director of Brazil's central bank said on Monday that if fiscal policy is always expansionary, it puts a lot of pressure on the floating exchange rate or monetary policy, making disinflation more costly. Speaking on the 30th anniversary of the Plano Real, the new currency that tamed hyperinflation in Latin America's largest economy, Renato Gomes, financial system director, said Brazil still lacks credible consolidation of its public accounts. "I am absolutely certain that the (rate-setting board) Copom is fully committed to delivering inflation to the target. However, when fiscal policy does not help, the cost of disinflation becomes very high. And then the real economy suffers," he said in a live session organized by the bank. Gomes was part of the nine-member board that unanimously decided to pause the monetary easing cycle in June. Following a 325 basis-point reduction, the benchmark interest rate was held at 10.5%. His comments come amid a sharp weakening of the Brazilian real and a rise in interest rate futures in recent weeks, reacting to fiscal and monetary fears fueled by constant attacks from President Luiz Inacio Lula da Silva on the central bank and his reluctance to cut spending, in addition to an external scenario marked by prolonged high interest rates. Gomes also said it is essential to advance the proposal for financial autonomy for the monetary authority. The proposal is currently under consideration in Congress but facing opposition from Lula's government. Sign up here. https://www.reuters.com/markets/brazils-central-bank-director-says-expansionary-fiscal-policy-harms-disinflation-2024-07-01/

2024-07-01 13:06

French markets rally on Monday but far from recovery Focus turns to policy instability with hung parliament in sight France could face another election in a year - investors July 1 (Reuters) - Investors are sceptical that the relief rally after France's first-round parliamentary election can last, wary that the outlook for the country's creaking public finances will remain in focus with several political hurdles ahead. The closely-watched spread French government bonds pay over Germany's retreated from a 12-year high on Monday and bank shares surged as Marine Le Pen's National Rally (RN) scored a win smaller than some polls had expected on Sunday. The results lessen the chance of an absolute majority for the RN, or a win for the left-wing alliance that came second, and were a relief for markets rattled since the surprise election was called last month. But investors remained cautious with uncertainty high ahead of a second-round vote on July 7 and beyond, seeing little scope for improvement in France's weak fiscal position as both the far-right and left have pledged big spending increases. "It would be too premature to say the battle is over," said Nicolas Forest, CIO at asset manager Candriam. "We are at the beginning of a new political era in France and the situation will stay very uncertain and very complicated." Even after Monday's bounce, French assets have barely recovered. France's 10-year yield rose to its highest since November on Monday. The French/German bond spread is still over 25 basis points wider than before President Emmanuel Macron called the election on June 9 and not expected to recover any time soon. Shares in France's three biggest lenders are still down 7-12%%. Underweight French debt, Forest saw scope for the French-German spread to widen to 100 bps even with a hung parliament, where no one party has an outright majority. The first hurdle is Sunday's second round election. Leaders of the left-wing alliance and Macron's centrist grouping have indicated they would withdraw their own candidates in districts where another candidate was better placed to beat the RN. But it was unclear if the pact would always apply if the left-wing candidates were from Jean-Luc Melenchon's far-left France Unbowed party. Candidates through to the run-off have until Tuesday to decide whether to run or stand down. High turnout on Sunday means France is heading for a record number of three-way run-offs, which are expected to benefit the RN. "Anything that would increase support for the far-right parties would be the biggest risk from here," said Colin Finlayson, co-manager of the Aegon Strategic Bond Fund. TURMOIL AHEAD An uncertain political environment adds to worries about the long-term challenges for France's stretched finances that saw its credit rating downgraded in May. With a budget deficit rising to 5.5% of output last year, far higher than European Union rules permit, France faces disciplinary measures from the EU executive. Given big spending pledges from the RN as well as the left-wing alliance, "it's difficult to see how you're going to get much through parliament that says reduce spending," said David Zahn, head of European fixed income at Franklin Templeton, who remains underweight French debt. "This is a sea change for France, (the spread) will now have to trade wider because of its fiscal dynamics, its political dynamics." The RN has toned down some of its more radical plans and said it would respect the EU's fiscal rules, but it's unclear how much of its plans are funded. Investors were considering scenarios including ones where legislation is passed on a bill-by-bill basis or Macron tries building a broad majority that would still face instability. RN leader Jordan Bardella has said he only wants to be Prime Minister if it won an absolute majority. "If no one gets an absolute majority, you always end up in a situation where you have a government which will have to cobble up together all the time, very complex arrangements across political families which don't have a habit of working together," said AXA's chief economist Gilles Moec. That raises the risk of another election after 12 months, when they are permitted again, investors said, meaning uncertainty persisting. "It will be really uncharted territory for France," said Candriam's Forest. "It will stay unstable, this government cannot stay for more than one year." Sign up here. https://www.reuters.com/markets/europe/investors-already-look-beyond-first-round-french-election-relief-2024-07-01/

2024-07-01 12:45

MOSCOW, July 1 (Reuters) - Russia's Rosneft (ROSN.MM) New Tab, opens new tab has appointed a new head of its flagship Vostok Oil project that is expected to produce up to 2 million barrels per day (bpd) by 2030, mostly for export to Asia. Rosneft, Russia's biggest oil producer, named Andrei Lazeyev, former boss of Rosneft refining unit Bashneft (BANE.MM) New Tab, opens new tab, to lead Vostok Oil, according to the state registry. He will replace Vladimir Chernov as they swap places. Chernov was appointed to lead Bashneft last month. The change in management is aimed at spurring faster development at the oilfields, the Kommersant newspaper reported last month. Some analysts, including from BCS brokerage New Tab, opens new tab in Moscow, have expressed doubts that the project can meet a goal to start production this year. They have predicted a delay of at least a year, citing the OPEC+ oil supply cuts deal to support prices. Rosneft did not immediately reply to a request for comment on the management reshuffle and the implementation of the project. Lazeyev, who worked at Russo-British oil producer TNK-BP, moved to Rosneft as chief geologist in 2013 following its acquisition of TNK-BP. He joined the management board of Rosneft in 2022 and took the top job at Bashneft, the Kommersant reported. Global commodity traders Trafigura Vitol and Mercantile joined the project in 2020-2021, but left it after Moscow sent its troops into Ukraine in 2022. Rosneft had held talks with Chinese, Indian and Japanese companies about them joining the project, but the talks have yet to produce an outcome. If realised, the output expected from Vostok Oil would roughly equate to the entire North Sea oil market of between 1.8 million and 2 million bpd. It would also be on a par with production realised at the Samotlor West Siberian oilfield in the 1970s and 1980s. Vostok Oil's loading terminal, the Bukhta Sever, in the Yenisei Bay on the Taymyr Peninsula is expected to handle 600,000 bpd when finished this year, or around 15% of Russia's total and equal to current loadings from Primorsk, Russia's largest Baltic sea port. Rosneft said in March it started construction of the country's largest oil loading pier at Bukhta Sever, where harsh Arctic weather is one of the many challenges to the project. The company is also constructing a 770-km long (479 miles) oil pipeline to the terminal. Rosneft said in its financial report, that, as of the end of March, more than 250 kilometres of the pipeline has been welded. Sign up here. https://www.reuters.com/business/energy/russias-rosneft-appoints-new-boss-flagship-vostok-oil-project-2024-07-01/

2024-07-01 12:31

MILAN, July 1 (Reuters) - Italy's Saipem (SPMI.MI) New Tab, opens new tab has started work at the Courseulles-sur-Mer offshore wind project in Normandy, the energy group's CEO Alessandro Puliti said on Monday, adding that the wind farm should be completed in 2025. Some big offshore wind projects around the world have recently been cancelled or delayed due to cost increases, and financial analysts were monitoring Courseulles-sur-Mer to exclude any issues in the delivery of the works. Saipem was awarded the contract in 2021 by Eoliennes Offshore du Calvados SAS (EODC), which is sponsored by a consortium led by France's EDF Renewables. It should be worth nearly 500 million euros ($537.4 million) for Saipem. "Today we are starting to drill to lay the foundations for the monopiles," said Puliti, speaking with journalists on the sidelines of the Global Energy Transition conference in Milan. The project entails the design, construction and installation works for 64 foundations bearing an equivalent number of turbines. Puliti said that Saipem's offshore expertise in fossil fuel projects can easily be extended to the wind offshore sector. The Italian group has already delivered eight offshore wind projects, Saipem's CEO said, asking for an increase in government incentives for such projects to avoid issues caused by cost inflation. ($1 = 0.9304 euros) Sign up here. https://www.reuters.com/business/energy/saipem-has-started-works-french-offshore-wind-project-ceo-says-2024-07-01/