Australian carbon lobby urges government program reform

Market: Emissions
19/05/25

Australia's lobby group Carbon Market Institute (CMI) urged the federal government to reform its Climate Active voluntary program, after utility Energy Australia admitted to flaws in its carbon offsetting strategy in a key legal case.

The CMI said the Australian government must push reforms to the Climate Active program, and that carbon credits should not substitute decarbonisation efforts. Most of the voluntary demand for Australian Carbon Credit Units (ACCUs) comes from the federal government-backed Climate Active, which awards certification to businesses that measure, reduce and offset their carbon emissions to achieve carbon neutrality.

"Offsets do not prevent or undo the harms caused by burning fossil fuels for a customer's energy use," Energy Australia said on 19 May. The utility admitted that carbon offsetting is not the best way to help customers reduce their emissions, as a legal action launched by advocacy organisation Parents for Climate in the Federal Court of Australia in 2023 reached its conclusion. The two parties have settled, with the utility saying it has now shifted its focus to direct emissions reductions.

Energy Australia in 2016 launched the ‘Go Neutral' carbon offset product, which is certified by Climate Active and provided residential customers with a way to offset emissions generated by their electricity or gas consumption. But the utility admitted their electricity or gas use was still sourced predominantly from fossil fuels. It withdrew the ‘Go Neutral' product from the market in July last year and is phasing it out for existing customers during 2025.

The government has been delaying key decisions on the future of the Climate Active voluntary program, including whether to change the existing list of eligible international units or setting a minimum percentage use of ACCUs.

There are currently 528 active certified brands under the Climate Active program, down from almost 590 in the end of 2024. The number of brands that stopped using the certification increased to 240, from around 180 over that same period.

By susannah Cornford

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19/05/25

EU, UK to ‘work towards’ linking carbon markets

London, 19 May (Argus) — The EU and UK agreed to work towards linking their respective emissions trading systems (ETS), as part of their common understanding agreement concluded at a summit in London today. "The European Commission and the United Kingdom share the view that a functioning link between carbon markets would address many of the issues raised in respect of trade and a level playing field," the agreement states. A linking agreement should exempt both jurisdictions from their respective carbon border adjustment mechanisms, according to the common understanding, and the linked systems should cover power and industrial heat generation, and domestic and international maritime and aviation emissions. The statement specifically states that any link "should not constrain the European Union and the United Kingdom from pursuing higher environmental ambition". It also underlines that the UK ETS's supply cap and its emissions reduction pathway are "guided by" the country's Climate Change Act and nationally determined contributions to the Paris climate agreement, and that these should be "at least as ambitious" as the EU's. The UK has legally binding targets to cut its greenhouse gas (GHG) emissions by at least 68pc by 2030 and 81pc by 2035, both compared with 1990 levels. The EU aims to cut its net GHG emissions by 55pc by 2030, and is yet to set a 2035 target. Both jurisdictions are targeting net zero emissions by 2050, while they share the "same interests" in addressing climate change, commission president Ursula von der Leyen said today. Linking the systems would "save British businesses £800mn in EU carbon taxes", UK prime minister Keir Starmer said today, without specifying a timeframe for the savings. A study commissioned by a range of utilities and published last week found that linking the two systems would save up to €1.2bn on lower hedging costs resulting from improved market liquidity and lower bid-offer spreads. Today's agreement provides no timeline for linking the systems. The process to negotiate and link the Swiss ETS to the EU's scheme took almost 10 years. Alongside plans to work towards linking the EU and UK ETS, the jurisdictions also alluded in the agreement to continuing "technical regulatory exchanges" on energy technologies including hydrogen, carbon capture and storage and biomethane. And they will "explore in detail the necessary parameters" for the UK's potential participation in the EU's internal power market. By Victoria Hatherick and Georgia Gratton Send comments and request more information at [email protected] Copyright © 2025. Argus Media group . All rights reserved.

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US House panel votes down Republican megabill

16/05/25

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16/05/25

US House panel votes down Republican megabill

Washington, 16 May (Argus) — A key committee in the US House of Representatives voted today to reject a massive budget bill backed by President Donald Trump, as far-right conservatives demanded deeper cuts to clean energy tax credits and social spending programs. The House Budget Committee failed to pass the budget reconciliation bill in a 16-21 vote, with four House Freedom Caucus members — Ralph Norman (R-South Carolina), Chip Roy (R-Texas), Josh Brecheen (R-Oklahoma) and Andrew Clyde (R-Georgia) — voting no alongside Democrats. A fifth Republican voted no for procedural reasons. The failed vote will force Republicans to consider major changes to the bill before it comes up for a vote on the House floor as early as next week. Republican holdouts say the bill would fall short of their party's promises to cut the deficit, particularly because it would front-load increased spending and back-load cuts. The bill is set to add $3.3 trillion to the deficit, or $5.2 trillion if temporary provisions were permanent, according to estimates from the nonpartisan Committee for a Responsible Federal Budget. Some critics of the bill said the proposed cut of $560bn in clean energy tax credits is not enough, because the bill would retain some tax credits for new wind and solar projects. "A lot of these credits have been in existence for 30 or 40 years, and you talk about giveaways, we want to help those who really need help," Norman said ahead of his no vote. "That's the heart of this. Sadly, I'm a no until we get this ironed out." Negotiations will fall to House speaker Mike Johnson (R-Louisiana), who can only lose three votes when the bill comes up for a vote by the full House. But stripping away more of the energy tax credits enacted in the Inflation Reduction Act could end up costing Johnson votes among moderates. More than a dozen Republicans on 14 May asked to pare back newly proposed restrictions on the remaining clean energy tax credits. Ahead of the failed vote, Trump had pushed Republicans to support what he calls the "Big Beautiful Bill". In a social media post, he said "Republicans MUST UNITE" in support of the bill and said the party did not need "GRANDSTANDERS". The failed vote has parallels to the struggles that Democrats had in 2021 before the implosion of their push to pass their sprawling "Build Back Better" bill, which was later revived as the Inflation Reduction Act. Republicans say they will work over the weekend on a compromise. The House Budget Committee has scheduled another hearing at 10pm on 18 May to attempt to vote again on the budget package, but any changes to the measure would occur later, through an amendment released before the bill comes up for a vote on the House floor. By Chris Knight Send comments and request more information at [email protected] Copyright © 2025. Argus Media group . All rights reserved.

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US clean energy groups decry House budget bill

13/05/25

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13/05/25

US clean energy groups decry House budget bill

Houston, 13 May (Argus) — Renewable sector advocates are warning that changes to federal incentives for clean energy proposed by Republicans will undercut the growth of new generation as demand on the power grid escalates. Industry groups representing wind and solar companies were quick to critique the House Ways and Means Committee's portion of Republicans' budget bill for its potential to undercut President Donald Trump's objective of "energy dominance" by reducing the viability of resources on which the US will depend in the coming years. The Ways and Means proposal "simply goes too far too fast", according to Jason Grumet, chief executive of the trade group American Clean Power Association. "With energy demand surging, this is not the time for disruption," Grumet said. "It is possible to phase out incentives for clean energy investment, production and manufacturing without harming American consumers or businesses." The Ways and Means bill would begin to sunset the 45Y production tax credit (PTC) and 48E investment tax credit (ITC) after 2028, with incentive values decreasing by 20 percentage points/yr from 2029 to 2031 before disappearing entirely in 2032. Moreover, the bill moves a key goalpost by pinning eligibility for both the PTC and ITC to a project's in-service date, rather than when it begins construction, which is currently the relevant deadline. At present, the PTC and ITC will remain at current levels until the end of 2032 or when regulators determine that annual US electricity sector emissions are equal to or less than 25pc of their 2022 level, whichever comes later. Democrats who passed the law in 2022 intended the minimum 10-year window to give developers certainty when investing in projects, shifting from past practice when Congress often waited until the last minute to extend earlier versions of the incentives. In addition, the Ways and Means bill would cancel the advanced manufacturing production credit, also known as the 45X credit, after 2031, rather than 2032, while completely disqualifying wind components after 2027. At present, wind turbine blades, nacelles and towers receive credits of 2¢, 5¢ and 3¢, respectively, multiplied by the total capacity, on a per watt basis, of the completed turbine in which those components are used. Offshore wind foundations receive similar incentives. The legislation would also remove the ITC for residential clean energy installations after this year, up from 2034. The bill also would repeal credit " transferability " two years after the law takes effect for the PTC and ITC, and at the end of 2027 for the 45X credits, and restrict projects' eligibility for all three credits if its construction includes "material assistance from a prohibited foreign entity". Republican lawmakers wrote their proposed changes with an eye on saving billions of dollars that they could use to partially offset over $5 trillion in expected tax cuts. But the updates would be particularly harmful for "local, red-state economies", according to Solar Energy Industries Association chief executive Abigail Ross Hopper. Over three-fourths of factories and investments threatened by the changes are located in regions represented by Republicans, and the changes will force "hundreds" of factories to close, raise electricity bills and damage grid reliability, she said. The loss of the manufacturing credits could be particularly harmful to the offshore wind industry's supply chain, "threatening billions of dollars of investments in the Midwest, Mid-Atlantic and American South", according to Stephanie Francoeur, senior vice president of marketing and communications at offshore wind business group the Oceantic Network. By Patrick Zemanek Send comments and request more information at [email protected] Copyright © 2025. Argus Media group . All rights reserved.

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US budget bill would prolong 45Z, boost crops

13/05/25

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13/05/25

US budget bill would prolong 45Z, boost crops

New York, 13 May (Argus) — A proposal from House Republican tax-writers would extend for four additional years a new tax credit for low-carbon fuels and adjust the incentive to be more lenient to crops used for biofuels. Republicans on the House Ways and Means Committee on Monday introduced their draft portion of a far-reaching budget bill, which included various changes to Inflation Reduction Act clean energy subsidies. But the "45Z" Clean Fuel Production Credit, which requires fuels to meet an initial carbon intensity threshold and then ups the subsidy as emissions fall, would be the only incentive from the 2022 climate law to last even longer than Democrats planned under the current draft. The proposal represents an early signal of Republicans' plans for major legislation through the Senate's reconciliation process, which allows budget-related bills to pass with a simple majority vote. The full Ways and Means Committee will consider amendments at a markup this afternoon, and House leaders want the full chamber to vote on the larger budget bill before the US Memorial Day holiday on 26 May. Afterwards, the proposal would head to the Republican-controlled Senate, where lawmakers could float further changes. But the early draft, in a chamber with multiple deficit hawks and climate change skeptics that have pushed for a full repeal of the Inflation Reduction Act, is remarkable for not just keeping but expanding 45Z. The basics of the incentive — offering benefits to producers instead of blenders, throttling benefits based on carbon intensity, and offering more credit to sustainable aviation fuel (SAF) — would remain intact. Various changes would help fuels derived from US crops. The most notable would prevent regulators measuring carbon intensity from considering "indirect land use change" emissions that attempt to quantify the risks of using agricultural land for fuel instead of food. Under current emissions modeling, the typical dry mill corn ethanol plant does not meet the 45Z credit's initial carbon intensity requirement — but substantially more gallons produced today would have a chance at qualifying without any new investments in carbon capture if this bill were to pass. The indirect land use change would also create the possibility for canola-based fuels, which are just slightly too carbon-intensive to qualify for 45Z today, to start claiming some subsidy. Fuels from soybean oil currently qualify but would similarly benefit from larger potential credits. Still, credit values would depend on final regulations and updated carbon accounting from President Donald Trump's administration. Since the House proposal does not address the current law's blunt system for rounding emissions values up and down, relatively higher-carbon corn and canola fuels still face the risk of falling just below 45Z's required carbon intensity threshold but then being rounded up to a level where they receive zero subsidy. The House bill would also restrict eligibility to fuels derived from feedstocks sourced in the US, Canada, and Mexico — an attempt at a middle ground between refiners that have increasingly looked abroad for biofuel inputs and domestic farm groups that have lobbied for 45Z to prioritize US crops. That language would make more durable current restrictions on foreign used cooking oil and significantly reduce the incentive to import tallow from South America and Australia, a loss for major renewable diesel producers Diamond Green Diesel, Phillips 66, and Marathon Petroleum. The provision would also hurt US biofuel producer LanzaJet, which has imported lower-carbon Brazilian sugarcane ethanol as a SAF feedstock to the chagrin of domestic corn ethanol producers. The bill would also require regulators to set more granular carbon intensity calculations for different types of animal manure biogas projects, all of which are treated the same under current rules. Other lifecycle emissions models treat some dairy projects at deeply negative carbon intensities. Those changes to carbon intensity calculations and feedstock eligibility would kick in starting next year, meaning current rules would remain intact for now. The proposal would however phase out the ability of clean energy companies without enough tax liability to claim the full value of Inflation Reduction Act subsidies to sell those tax credits to other businesses. That pathway, known as transferability, would end for clean fuel producers after 2027, hurting small biodiesel producers that operate under thin margins in the best of times as well as SAF startups that were planning to start producing fuel later this decade. Markets unresponsive, but prepare for new possibilities There was little immediate reaction across biofuel, feedstock, and renewable identification number (RIN) credit markets, since the bill could be modified and most of the changes would only take force in the future. But markets may shift down the road. Limiting eligibility to feedstocks originating in North America for instance could continue recent strength in US soybean oil futures markets. July CBOT Soybean oil futures closed 3pc higher on Monday at 49.92¢/lb on the news and have traded even higher today. The spread between soybean oil and heating oil futures is then highly influential for the cost of D4 biomass-based diesel RIN credits, which are crucial for biofuel margins and have recently surged in value to their highest prices in over a year. The more lenient carbon accounting will also help farmers eyeing a long-term future in renewable fuel markets and will support margins for ethanol and biodiesel producers reliant on crops. Corn and soy groups have pushed the government for less punitive emissions tracking, worried that crop demand could wane if refiners could only turn a profit by using lower-carbon waste feedstocks instead. The House bill, if passed, would still run up against contradictory incentives from other governments, including SAF mandates in Europe that restrict fuels from crops and California's efforts to soon limit state low-carbon fuel standard credits for fuels derived from vegetable oils. By Cole Martin and Matthew Cope Send comments and request more information at [email protected] Copyright © 2025. Argus Media group . All rights reserved.

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Australia’s Macquarie unwinds coking coal funding ban

13/05/25

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13/05/25

Australia’s Macquarie unwinds coking coal funding ban

Sydney, 13 May (Argus) — Australian investment bank Macquarie has changed its investment rules to fund coking coal mines, in a partial reversal of its 2021 coal financing ban. The bank made the change in November 2024, it said in its annual report for the year ended 31 March, released last week. It will now make short-term funding deals lasting less than 12 months for coking coal developments, to help producers buy, expand, or run coking coal mines. Macquarie's rule change still bans long-term investments in coking coal projects. There are few viable alternatives to coking coal for the steel and industrial sectors, Macquarie said. The company has maintained its ban on thermal coal financing, apart from specific emissions reduction projects. It is also working on supporting emissions reduction projects in the Australian oil and gas sectors, although it did not disclose which projects. Macquarie is not the only bank moving away from fossil fuel financing. Australian bank ANZ will stop lending capital to companies heavily involved in the thermal coal sector by 2030. It reduced its lending to thermal coal mining firms by 85pc between 2015 and July 2024,it said in July last year. It also stopped [funding new upstream oil and gas projects](https://direct.argusmedia.com/newsandanalysis/article/2566501), with limited exceptions, in May 2024. Macquarie has expanded its climate finance role over recent years. The bank set up a renewable energy business to fund utility-scale projects in Australia and New Zealand in November 2023. Macquarie is also involved in carbon markets. The company is continuing to help clients with compliance and voluntary carbon markets, including in newer locations like China, the company said, without disclosing further details. It has also purchased and retired 59,164t of CO2 equivalent of Australian Carbon Credit Units and other voluntary offsets to cover business travel in its 2024-25 financial year ended 31 March. By Avinash Govind Send comments and request more information at [email protected] Copyright © 2025. Argus Media group . All rights reserved.

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