Mexican Supreme Court rules against higher ethanol blends

▪ Mexican Supreme Court rules against higher ethanol blends

The Supreme Court removed permission for Pemex or any other company to increase the percentage of ethanol in its gasolines (from 5.8% to 10%), in a case brought forth by environmental groups. By four votes to one, the second chamber granted an amparo, or legal protection, against changes applied by the Energy Regulatory Commission (CRE) to the Official Mexican Standard 016-CRE-2016 on the quality of petroleum products back in 2017.

These changes, in force since June 2017, allowed hydrocarbons companies to increase the ethanol in gasolines from 5.8 to 10 percent, except in the metropolitan areas of Mexico City, Guadalajara and Monterrey, where ethanol is banned. CRE had reformed the fuel regulation on the grounds that, following the liberalization of the gasoline price in January 2017, gas stations in border states were at a disadvantage with those in the United States, where higher ethanol content allows for cheaper fuel.

The amparo was granted to former Presidential candidate and environmentalist Gabriel Quadri, but it will have general effects in annulling these aforementioned 2017 changes to fuel regulation NOM 016 in a way that allows the regulation to be revised and submitted to public consultation. The court has agreed to a 180 day adjustment period before this new limit is enforced, to avoid harming third parties.

▪ BP boss Looney sets out to 'reinvent' oil giant with zero carbon goal

BP set one of the oil sector's most ambitious targets for curbing carbon emissions on Wednesday 12-February as new chief executive Bernard Looney began the biggest revamp in its 111-year history. While investor groups welcomed the 2050 targets set out by Looney, which put BP ahead of rivals Royal Dutch Shell, Total, Equinor and all of the U.S. oil majors, environmental campaigners criticised a lack of detail.

"We have got to change and change profoundly because the world is changing fast and so are society's expectations of us," Looney said in his first major speech as CEO, after earlier highlighting a need to "reinvent BP". "It is aiming to reduce and neutralise the carbon in the oil and gas that we dig out of the ground," Looney added. BP did not say how it intends to get emissions from its operations and barrels produced to net zero and halve the intensity of emissions by all products it sells, including diesel and petrol, a measure known as Scope 3. The company has tried, and failed, to reinvent itself before, with a pioneering plan to build a large renewables business in the early 2000s which ended with huge losses.

One possible way to hit greenhouse gas reduction targets is to buy offset certificates and bet on carbon capture and storage technology, which is not yet used on a commercial scale. But Charlie Kronick, Oil Advisor from Greenpeace UK, was sceptical about how BP can deliver. "How will they reach net zero ... When will they stop wasting billions on drilling for new oil and gas we can't burn?"

RAPID TRANSITION

The world's top oil and gas companies are under heavy pressure from investors and climate activists to meet the 2015 Paris climate goal of limiting global warming to below 2 degrees Celsius from preindustrial levels. U.S. groups such as Exxon, Chevron and ConocoPhillips are far less ambitious with their greenhouse gas reduction targets than their European rivals. Stephanie Pfeifer, a member of the global Climate Action 100+ Steering Committee and CEO of the Institutional Investors Group on Climate Change welcomed BP's plan. "Building on the positive engagement with BP ... investors will continue to look for progress from the company in addressing climate change. This includes how it will invest more in non-oil and gas businesses," she said in a statement.

BP's absolute net zero carbon target relates to every barrel it produces, based on its equity stake in oil and gas fields, from the well to the petrol station. It does not encompass oil products which BP markets, but does not produce itself. BP, which produced around 2.64 million barrels of oil equivalent per day in 2019, said it would cut emissions to net zero from some 415 million tonnes of carbon dioxide equivalent a year. Near term plans will be published by a September investor day, Looney said, adding BP is likely to produce fewer barrels by 2050.

"We welcome BP’s recognition of the reality we now live in but 2050 is too late," a spokeswoman for climate change activist group Extinction Rebellion said. Anglo-Dutch group Shell has set Scope 3 targets based on intensity rather than on absolute reduction terms. Intensity-based targets measure the amount of greenhouse gas (GHG) emissions per unit of energy or barrel of oil and gas produced. That means that absolute emissions can rise with growing production, even if the headline intensity metric falls. Scope 3 emissions vastly exceed greenhouse gases caused by the production of crude oil, natural gas and refined products, including electricity generation, typically by a factor of about six among oil majors, according to Reuters calculations.

'NEW EXPECTATIONS'

BP will also set "new expectations" for relationships with trade organisations and be ready to quit if they are not aligned. Last year, BP invested around $500 million in low-carbon technologies including wind power, electric vehicle battery charging systems and solar power firm Lightsource BP. That compared to an overall budget of $15.2 billion in 2019. In perhaps its biggest-ever corporate shake-up, BP will dismantle the traditional model of an oil and gas production, or upstream, unit and a refining, trading and marketing, or downstream, unit to "become more integrated and more focused". A new production and operations unit, which includes oil and gas production as well as refining and chemicals, will be led by Gordon Birrell. Meanwhile, customers and products will be led by Emma Delaney, gas and low carbon energy by Dev Sanyal and innovation and engineering by David Eyton.

▪ BP to quit main U.S. refining lobby over carbon policy

BP will leave the main U.S. refining lobby and two other trade groups as new Chief Executive Bernard Looney spurs some of the oil sector's most ambitious targets for curbing carbon emissions. The decision follows a review of its membership in over 30 associations around the world, which Looney said in a post on Instagram was aimed at boosting people's trust in the oil and gas company. "BP will pursue opportunities to work with organisations who share our ambitious and progressive approach to the energy transition," Looney said in a statement.

BP said its view on carbon pricing, which it says is key in the energy transition, were "at odds" with those of the American Fuel & Petrochemical Manufacturers (AFPM), which has around 300 members. "Currently we have no areas of full alignment," BP said. It will also not renew its membership in the Western States Petroleum Association (WSPA) and Western Energy Alliance (WEA). "AFPM is and has been committed to supporting policies that address climate change," said AFPM Chief Executive Chet Thompson.

"Because of that, it leads us to assume that this decision was made based on factors other than our actual positions on the issues." Bruce Duguid, head of stewardship at Federated Hermes, which has led talks with BP on shareholder climate resolutions in recent years, welcomed the move. "Supportive public policy is vital to achieving BP’s bold vision to become a net zero company by 2050 or sooner," Duguid said in a statement. BP has called for placing a price on carbon emissions in order to push out the most polluting fossil fuel production including coal and encourage investment in renewable energy.

Royal Dutch Shell and Total last year both said they would not renew their memberships in the AFPM. BP, one of the largest U.S. refiners and petrochemical producers and fuel retailers, will remain a member of the American Petroleum Institute, the country's largest energy association, drawing criticism from climate campaigners. "The industry’s response to climate change is the key question that will define their performance and viability," Ben Ratner, senior director at Environmental Defence Fund (EDF) told Reuters. BP, Shell and others that in recent years have been investing in cleaner fuel technology have also opposed AFPM's efforts to oppose standards requiring refiners to blend or subsidise the blending of biofuels into the gasoline pool, saying it hurts independent refiners.

The AFPM has around 300 U.S. and international members including Exxon Mobil Corp and Chevron Corp which operate 110 refineries and 229 petrochemical plants, its 2018 annual report showed. Exxon said it routinely evaluates trade group memberships on an annual basis. Chevron did not immediately respond to a request for comment. BP operates three U.S. refineries including the 430,000 barrels per day Whiting, Indiana plant, its largest.

▪ Two-Thirds of the World’s Most Polluted Cities Are in India

Several Chinese cities, including Beijing, have dramatically improved their air quality in recent years, while Indian metropolises remain some of the world’s worst polluted, according to a new report.

Beijing -- once infamous for its toxic haze -- has reduced smog levels and dropped down a list of the world’s most polluted cities, falling to 199 from 84 three years before, according to the 2019 World Air Quality Report published by IQAir AirVisual. In contrast, India still dominated its list of the smoggiest urban areas, accounting for 14 of the top 20.

Despite new government policies meant to address the issue, New Delhi’s air quality has fallen from where it was five years ago, rising to the fifth-worst spot globally and making it by far the world’s most polluted major city, the report said. The worst-ranked city -- Ghaziabad -- is a Delhi suburb, as are a number of others ranked separately in the top 20.

India, China and other Asian countries remain disproportionately affected by toxic air as a result of factors ranging from crowded cities, vehicular exhaust, coal-fired power plants, agricultural burning and industrial emissions. The issue is hardly tangential. The World Health Organization estimates that dirty air kills around 7 million people each year, while the World Bank says it drains the global economy of $5 trillion annually.

Even before the coronavirus outbreak and trade war slowed China’s smog-producing industries, Chinese officials had mobilized the country’s top-down, authoritarian state to implement -- and enforce -- sweeping measures, as well as shifting production away from its biggest cities. A recent report from the Centre for Research on Energy and Clean Air separately found that Beijing and Shanghai had seen “major progress,” while levels of fine particular called PM 2.5 increased in other parts of the country.

India faces a starkly different situation. Across much of northern India, air quality remains catastrophic as politicians prioritize economic growth and spar over responsibility. Many citizens are still unaware of health concerns and resource-starved agencies struggle to carry out new -- or even existing -- measures designed to curb the smog.

“In Beijing, it’s a priority -- in China, when they say something, they do it, they put the resources in,” said Yann Boquillod, AirVisual’s director of air quality monitoring. “In India, it’s just starting. People need to put more pressure on government.”

Indian Prime Minister Narendra Modi’s government has won praise for promoting solar power and improving emission standards. It has handed out millions of gas canisters to reduce the number of families using smoky household cooking fires. In January of last year, the government also launched the National Clean Air Programme.

But these measures haven’t had a serious impact on increased coal power plant usage, dust left by the thousands of under-regulated construction sites and exhaust from millions of new cars and motorcycles. Air quality experts have also criticized the national program for lacking strong enforcement and funding.

Although many Indian cities saw progress between 2018 and 2019, “unfortunately these improvements are not representative of the very recent, but promising National Clean Air Programme” and cleaner fuel standards, according to the AirVisual report.

Instead, the authors said, they signal a lagging economy, which grew at about 5% -- the slowest expansion since 2009 -- compared with 8.3% in 2017. The deadly air also kills roughly 1.2 million Indians each year, according to a recent study in the Lancet.

While President Donald Trump visited the Indian capital and met with Modi on Tuesday, New Delhi was ranked by AirVisual as the world’s most polluted city. PM 2.5 levels soared as high as 199 -- more than double the local annual average last year.

India was far from the only country that remained deeply challenged by smog. Although several Chinese cities -- including Shanghai -- saw improvement in air quality, Kashgar and Hotan in the restive, western Xinjiang region were among the world’s worst.

Cities across Asia -- including Chiang Mai, Hanoi, Jakarta and Seoul -- saw sharp increases in PM 2.5 levels. Since 2017, Jakarta saw pollution increase by 66%, making it the worst in Southeast Asia. In Thailand, Chiang Mai and Bangkok both saw a number of extremely smoggy days -- some of which led authorities in the capital to close schools -- resulting from construction, diesel fuel and crop fires in surrounding regions.

The problem is particularly challenging for South Asian countries. Using a weighted population average, Bangladesh was actually ranked the world’s most polluted country, while its capital Dhaka was the second worst after Delhi. Pakistan was the second-most-polluted country, while Afghanistan, India and Nepal were all in the top 10.

For our readers’ reference the full “IQAir AirVisual 2019 World Air Quality Report” in pdf-format can be downloaded online.

▪ India’s IOCL Mathura refinery starts 100% Bharat Stage-VI fuels production

Indian Oil Corporation's Mathura refinery completed the revamp of its all units to produce BS-VI grade fuels ahead of the deadline for roll out of newer emission norms from April 2020, a company official confirmed in early February. The refinery had undertaken projects to upgrade its diesel and gasoline units for bringing down Sulphur level by nearly 80%.

With the commissioning of these facilities, Mathura Refinery is now supplying 100% of its MS (Petrol) and HSD (diesel), meeting BS-VI norms. IOCL Mathura Refinery has achieved the distinction of becoming first refinery in the country to supply BS-VI compliant fuels, containing less than 10 ppm Sulphur with existing units, well ahead of deadline set by the government.  

A deadline was also set for rolling out cleaner (BS-VI compliant) fuel across the National Capital Territory (NCT) by April 18 and National capital region (NCR) by April 19, however Mathura Refinery completed the task, ahead of stipulated time. It started supply of BS-VI compliant fuels to NCT and NCR from January 18, he disclosed.

The government in January 2016 had decided to shift to BS-VI fuel emission norms from BS-IV from April 2020, skipping altogether BS-V norms. All the new vehicles to be sold after April 2020 would be BS-VI compliant, as per the government direction.

▪ Volvo Cars India announces entire product range is now BS-VI compliant

In early February Volvo Cars India stated that its entire range in the country now conforms to BS-VI emission norms. All cars assembled at the company's plant or imported are now BS-VI certified, Volvo Cars India said in a statement. "The transition from BS-IV to BS-VI has been challenging, especially keeping in mind the industry's performance in 2019. I am extremely proud of my team and our partners who have been relentless in making sure a smooth shift to BS-VI well before the deadline," Volvo Cars India MD Charles Frump said.

He further said, "as a gesture to its customers owning an environment friendly BS-VI Volvo Car this financial year, we do not have any price increase for our BS-VI certified cars till March 31, 2020."

▪ Air Pollution Vanishes Across China’s Industrial Heartland

China’s lockdown measures to minimize further coronavirus infections have created one unexpected benefit -- a dramatic improvement to the nation’s air quality.

Satellites operated by NASA and the European Space Agency have detected significant drops of major airborne pollutants above vast swathes of the country. Before-and-after images show how nitrogen dioxide levels plummeted in February compared to pre-lockdown January of this year. Nitrogen dioxide is a noxious gas emitted by factories, motor vehicles and fossil fuel-powered electricity generation stations. The data were collected by ESA’s Sentinel-5 satellite. Ozone measurements from NASA’s Aura spacecraft showed similar results.

NASA scientists first detected the decline of pollutants near Wuhan in Hubei province. A food market in the city is believed to be the epicentre of the novel coronavirus outbreak, which has since spread to more than 50 countries.

“This is the first time I have seen such a dramatic drop-off over such a wide area for a specific event,” said Fei Liu, an air quality researcher at NASA’s Goddard Space Flight Center. Scientists have previously observed drops in nitrogen dioxide levels during the global financial crisis, and more regionally, during 2008’s Beijing Olympics.

Researchers say China’s pollutant levels normally decline in February as factories pause for Lunar New Year celebrations, when the world’s largest annual mass migration occurs. But the usual rebound in pollutant levels did not occur last month, helping to illustrate the vast scale of shutdowns in the world’s second biggest economy. “This year, the reduction rate is more significant than in past years and it has lasted longer,” Liu said. “I am not surprised because many cities nationwide have taken measures to minimize spread of the virus.”

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