Energy News Beat

Ahead of a big green meeting at the International Maritime Organization next week, John Maggs from the Clean Shipping Coalition writes on how getting a global fuel standard and levy over the line will set us up for the future.

The international shipping sector provides an outsized and growing contribution to the climate crisis. Slower, more efficient ships can help slash climate emissions, but this will not happen without ambitious regulation.

Fortunately, the International Maritime Organization’s (IMO) current revision of the rules around its Carbon Intensity Indicator, a metric for measuring and regulating ships’ carbon emissions provides such an opportunity. Governments are consulting and reviewing evidence on barriers to efficiency and potential solutions, with a final decision on improving the indicator due by January 1 2026. 

If properly designed, these new rules could address almost half of shipping’s climate impacts and deliver massive ocean health co-benefits. But the outcome is far from certain.

The scope of the problem

The vast majority of internationally traded goods travel by ship, and these massive ships burn a lot of fuel. As a result, the shipping industry generates around three per cent of all climate emissions globally—a contribution equivalent to that of the whole economy of a country like Germany or Japan. 

Ships also undermine ocean health. I am not just talking about the environmental harm caused by oil spills when a tanker runs aground or sinks. As we have seen recently in the Black Sea this remains a very serious problem, but ships are also responsible for a myriad of other routine yet damaging operational practices—some legal, some not—that threaten ocean wildlife: oil and chemical discharges, toxic paint coatings, underwater noise pollution, sewage and grey water discharges, and the dumping of plastics, to name just a few.

Human health is also threatened, with an estimated 250,000 deaths and millions of childhood asthma cases annually caused by toxic air pollution from fossil-fuel powered shipping.

In all these areas, regulation has failed to keep up with the growth of the industry. Sporadic and weak measures mean the problem keeps getting worse.

Turning the page?

The Carbon Intensity Indicator revision provides the IMO with an important opportunity to address both the climate and ocean health impacts of global shipping and turn the tide on some of these problems.

By far the most effective way to reduce ship climate impacts is to slow ships down. A ten per cent speed reduction can lower the emissions of an individual ship’s journey by almost 20%. Even though this will mean, in some cases, using additional ships, there are still large net emission reduction benefits. What’s more, slowing ships down can happen immediately—we don’t need new technology just to take our foot off the gas pedal. 

We must also look at wind power. In a case of “back to the future,” new high-tech sails can dramatically reduce fuel burn (and thus emissions) on existing ships, and can go even further when new ships are designed from scratch to use wind as their primary means of propulsion. No other transport mode can harness wind power directly in this way – it is shipping’s climate crisis superpower. 

Most underwater noise pollution is caused by ship propellers, compromising the ability of whales and other marine life to forage and reproduce. Using sails and slowing ships down has a dramatic effect on noise levels, and slower ships are also less likely to strike and kill whales and other marine wildlife. 

Any action that reduces the amount of fuel burned not only reduces climate emissions, but also cuts emissions of everything connected to burning fuel, including the particulates that are harmful to human health. The oily sludge that ship fuels generate, which sadly still often ends up being discharged illegally at sea, is also reduced. 

Reducing fuel burn also decreases the volume of toxic waste produced by the exhaust gas cleaning systems, known as scrubbers, that shipowners are installing to avoid using cleaner fuels. This shocking new waste stream is largely unregulated and dwarfs other shipping pollution in terms of volume.

An outsider looking in could easily assume that ship owners would operate their vessels more efficiently purely out of self-interest and a desire to minimise costs, but there are a number of factors working against this.

For instance, there’s industry’s “split incentive” – whereby the entity responsible for the technical efficiency of a ship and its equipment isn’t always the one paying for the fuel. 

Inefficient ship operation is also often written into long-established conventions and contractual arrangements—the most famous one being the instruction in charter agreements to travel at “utmost dispatch” (quickly) and then wait at the destination if you get there too early. Slowing down and arriving on time would make more sense, and have a massive impact on climate emissions, but would also be a breach of the agreement.

And in a booming market when few ships are without work, an individual owner acting from a business perspective might prefer to speed up and squeeze in an extra trip. Unfortunately, this is the worst approach from a climate, environment and ocean health point of view.

It is rare that a single measure or regulation holds the potential to have such wide-ranging positive impacts on the climate and environmental footprint of an industry. The revision of the IMO’s Carbon Intensity Indicator truly holds the possibility to set the shipping industry on a much more sustainable course. 

Next week’s IMO meeting, which is set to discuss the shipping sector’s impact on the global climate (Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships – ISWG-GHG 18) must agree on an ambitious set of new climate measures, including a global zero- and near-zero GHG fuel standard, along with a levy on ship emissions to drive emission reductions and ensure a just climate transition for international shipping. 

However, to keep the cost of the shipping energy transition down and see to it that emission cuts happen quickly enough to meet the IMO GHG strategy’s 2030 and 2040 goals, these measures must be aligned with an ambitious, transparent and enforceable energy efficiency measure. To build a more ocean-friendly shipping industry, governments must close their ears to “special pleading” from industry and make sure both the fuel standard and levy align with the concurrent IMO’s Carbon Intensity Indicator revision, ahead of April’s Intersessional Working Group on Air Pollution and Energy Efficiency.

The post How the IMO’s Carbon Intensity Indicator could half shipping’s climate emissions appeared first on Energy News Beat.

Energy News Beat

By Wolf Richter for WOLF STREET.

The summary could go something like this in terms of the past three years: More workers (employment +7.79 million, or +5.0%, BLS data), earning more money (average hourly earnings +13.4%), boosted total disposable income (+20%, BEA data). And over these three years, these workers added to their debts but at a slower pace (+13.8%) than their income grew (+20%). So the overall burden of their debts in terms of their income declined even further. This is not to say that subprime – a small subset that is always in trouble, which is why it’s called “subprime” – isn’t, as always, in trouble.

Total household debt outstanding inched up by $93 billion in Q4, or by 0.5%, from Q3, to $18.0 trillion, according to the Household Debt and Credit Report from the New York Fed today. Year-over-year, total household debt grew by 3.0%:

Each category of household debt – mortgages, HELOCs, auto loans, credit cards, other revolving credit (including BNPL), and student loans – increased in Q4, some of it barely. We’ll get into the weeds of each category in separate articles over the next few days. Today, we look at the overall debt, its burden, delinquencies, collections, foreclosures, and bankruptcies.

The burden of household debt: Debt-to-income ratio.

To view the overall burden of debt on households, while accounting for more workers and higher incomes, we use the debt-to-disposable-income ratio.

Disposable income, released by the Bureau of Economic Analysis, is household income from all sources except capital gains, minus payroll taxes: So income from after-tax wages, plus income from interest, dividends, rentals, farm income, small business income, transfer payments from the government, etc. This is essentially the cash that consumers have available to spend on housing, food, toys, debt payments, etc. And what they don’t spend, they save.

• From Q3 to Q4, disposable income +1.3%, total debts +0.5%.
• Year-over-year, disposable income +5.1%, total debts +3.0%.

So quarter-over-quarter and year-over-year, disposable income rose at a faster pace than household debts, and the burden of the debt on households declined further. We wish that were true for the federal government’s finances.

The resulting debt-to-income ratio of 82.0% in Q4 was the lowest ratio in the data going back to 2003, except for a few quarters during the free-money-stimulus era that had briefly inflated disposable income beyond recognition.

So the aggregate balance sheet of consumers is in good shape. The heavily leveraged economic entities in the US are the federal government and businesses, not consumers. This balance-sheet strength of consumers — 65% own their own homes, over 60% hold equities, and their debt burden is relatively low — explains in part why consumer spending has been so strong, despite the higher interest rates.

This wasn’t always so. In the early 2000s, households piled on huge debts in relationship to their incomes, and their debt-to-disposable-income ratio spiked in five years from 88% in 2003 to 117% in 2007. That this wasn’t going to work out should have been clear. And it didn’t work out, and it contributed to blowing up the financial system that had provided this debt.

But our Drunken Sailors, as we lovingly and facetiously have come to call them, have learned a lesson and have become a sober bunch, most of them, not all.

Free-Money is over.

Subprime means bad credit, not low income. A small subset of our Drunken Sailors has subprime credit scores because they’ve been behind with their payments, have defaulted on their debts and other obligations, etc. But low-income people cannot borrow at all or only very little. It’s the people with higher incomes that have access to lots of credit that get into it over their heads and fall behind. People with good incomes early on in their careers fall into this trap easily, and eventually get out of it again.

Subprime isn’t a permanent condition, but a phase that consumers move into and out of: Some people get into trouble, and fall behind on their payments, and their credit scores drop to subprime, while others are curing their credit problems and are working their way out of a subprime credit rating. It’s in constant flux.

Serious delinquencies after Free-Money: Household debts that were 90 days or more delinquent by the end of Q4 inched up to 2.0%. Beyond the Free-Money era (gold box), we have to look back nearly 20 years to see a similarly low rate.

In the Good Times of 2018-2019, before Free-Money, the serious delinquency rate was about 3%.

The foreclosures frying-pan pattern. The number of consumers with foreclosures in Q4 dipped to 41,220, the second months in a row of declines and at ultra-low levels, compared to 65,000 to 90,000 in the Good Times of 2018-2019.

During the Free-Money era, which included government-sponsored mortgage-forbearance programs under which foreclosures were essentially impossible, the number of foreclosures fell to near zero.

What is keeping foreclosures so low currently is that, after years of ballooning home prices, most strung-out homeowners can sell their home for more than they owe on it, pay off the mortgage, and walk away with some cash, and their credit intact.

It’s only when home prices spiral down for years that foreclosures can become a problem, if it coincides with big job losses.

Third-party collections still at rock bottom. A third-party collection entry is made into a consumer’s credit history when the lender reports to the credit bureaus, such as Equifax, that it sold the delinquent loan (for cents on the dollar) to a collection agency.  The New York Fed obtained this data on third-party collections in anonymized form through its partnership with Equifax.

The percentage of consumers with third-party collections has been at the record low level of around 4.6% for nearly two years:

The consumer bankruptcies frying-pan pattern. The number of consumers with bankruptcy filings dipped to 122,660 in Q4, the second quarter in a row of declines, and lower than any time before Free-Money. During the Good Times before the pandemic, the number of consumers with bankruptcy filings ranged from 186,000 to 234,000, which had also been historically low.

An odd-looking frying-pan pattern with a short handle.

We’re going to get into the weeds of housing debt, credit card debt, and auto debt in separate articles over the next few days. Next one up is housing debt. So stay tuned.

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The post Household Debts, Debt-to-Income Ratio, Serious Delinquencies, Collections, Foreclosures, Bankruptcies: Our Drunken Sailors’ Debts in Q4 2024 appeared first on Energy News Beat.

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Assisting Kiev’s war effort without US support will be a blow to the bloc’s budget, Bloomberg economists have warned

The post Trump’s plan for Ukraine would cost EU $3 trillion – Bloomberg appeared first on Energy News Beat.

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By Wolf Richter for WOLF STREET.

As has been the case for many months, today’s Producer Price Index for January included big up-revisions of the prior month, driven by a whopper up-revision for services which account for two-thirds of the overall PPI. On top of these upwardly revised December figures, the PPI rose further in January.

In January, the overall PPI accelerated to an increase of 3.51% year-over-year, the worst increase since February 2023, following a persistent zigzag line higher from the low point of near 0% in June 2023, driven largely by the services PPI.

And December was revised up to an increase of 3.48%, from 3.31% as reported a month ago. This up-revision was powered by a massive up-revision in services.

The PPI tracks inflation in goods and services that companies buy and whose higher costs they ultimately try to pass on to their customers.

On a month-to-month basis, the PPI for final demand jumped by 0.40% (4.9% annualized) in January from December, seasonally adjusted.

And December’s increase was revised up to +0.50% (+6.2% annualized) from the previously reported +0.22% (+2.7% annualized). The up-revision more than doubled the increase! This was driven by the whopper up-revision of the Services PPI.

The up-revision for December plus January’s increase caused the 6-month PPI to surge to +4.0% annualized, the worst increase since October 2022 (red).

The plunge in energy prices from mid-2022 through September 2024 had cooled the overall PPI increases into the pre-pandemic range, and papered over the inflationary forces in services. But since October, energy prices stopped dropping and flipped to increases. In January, energy prices jumped by 1.7% from December, which wiped out the remainder of the year-over-year drop, and the index was unchanged year-over-year.

Food prices jumped by 1.1% in January from December and by 5.5% year-over-year. The avian flu’s impact on egg production had some impact here.

Without food, energy, and eggs: “Core” PPI, which excludes food and energy, was revised up massively for December.

The month-to-month increase for December had originally been reported as +0.04% (0.5% annualized). Today it was revised up by 36 basis points to an increase of +0.40% (4.9% annualized). All seasonally adjusted.

On top of the up-revised December rates came January’s increase of 0.28% (3.4% annualized), which accelerated the 6-month PPI to 3.8% annualized, the worst since September.

Year-over-year, core PPI for December was revised up by 20 basis points, from the previously reported +3.55% to today’s December figure of +3.75%.

Year-over-year data are not seasonally adjusted since they cover 12 months and wash out any seasonal effects. Not seasonally adjusted, the January core PPI jumped by 0.49% (not annualized). But the January 2023 increase of +0.63% fell out of the 12-month window. So year-over-year in January 2025, the index rose by 3.61%, a notch slower than the upwardly revised increase of 3.75% in December (originally reported at 3.55%).

The services PPI, which accounts for two-thirds of the overall PPI but excludes energy services, had the whopper 47-basis-point up-revision for December, from the originally reported month-to-month increase of 0.04% (not annualized), so from nearly no change, to +0.51% as revised today.

On top of this upwardly revised 0.51% surge in December (+6.2% annualized), the services PPI rose another 0.32% in January (3.9% annualized).

This pushed the six-month services PPI to +4.5% annualized, the worst since September.

The year-over-year December increase was revised up by 25 basis points, to +4.28%, from the previously reported +4.03%.

With the January 2023 reading of +0.71% (not seasonally adjusted) dropping out of the 12-month window, and the January 2025 reading of +0.54% (not seasonally adjusted) moving into the 12-month window, the year-over-year increase in January cooled a hair to +4.14% from December’s up-revised 4.28% (originally reported as 4.03%).

These up-revisions have the effect that the entire zigzag line keeps shifting higher:

The “core goods” PPI was only minimally revised up. In January, it rose by 0.13% (+.5% annualized) from December.

Year-over-year, it rose by 2.0%, in the same 2%-plus range of increases for the seventh month in a row. The goods sector is not where inflation is a big issue at the moment. The issue with inflation is in services.

The PPI for “core goods” covers goods that companies buy but excludes food and energy products.

With these underlying trends, as shown by the PPI, it’s no surprise that consumer price inflation, as tracked by CPI, continues to accelerate, and that there too, inflation is festering in services, and in January it was non-housing services where inflation accelerated sharply.

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Despite soaring solar and wind power installations, China launched construction of as many as 94.5 gigawatts (GW) of new coal power projects in 2024, the highest level since 2015, new research showed on Thursday.

China also approved 66.7 GW of new coal-fired power capacity in 2024, as approvals picked up in the second half after a slower start to the year, found the report by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM).

Apart from the new coal power construction starts, China last year resumed construction of 3.3 GW of suspended projects.

All these approvals and construction start to signal that “a substantial number of new plants will come online in the next 2-3 years, further solidifying coal’s role in the power system,” the report says.

China added 356 GW of wind and solar capacity in 2024 alone – 4.5 times the EU’s additions and nearly equivalent to the total installed wind and solar capacity in the U.S. by the end of the year, according to the research.

“This record-breaking expansion highlights China’s leadership in renewables, yet instead of replacing coal, clean energy is being layered on top of an entrenched reliance on fossil fuels,” CREA said.

Despite a pledge to phase down coal by the end of the decade, China continues to be committed to coal power, which overshadows clean energy progress and exposes fundamental challenges in China’s energy transition, the authors of the report wrote.

Globally, China is the leader in renewable energy capacity installations, but it is also a leader in coal-fired power and continues to be the key driver of record-high global coal demand.

The persistent growth in Chinese coal demand, including for power generation, goes to show that coal remains the baseload of China’s power system to back up the surge in renewables and will stay such for years to come as power demand jumps with the increasing electrification of homes and transport.

By Tsvetana Paraskova for Oilprice.com

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Golar announced the sale of the 2003-built steam turbine LNG carrier, Golar Arctic, in a statement on Thursday, but the firm did not reveal the buyer.

The sale price for the vessel is $24 million before transaction-related expenses.

Golar said the LNG carrier is unencumbered.

Moreover, the transaction is expected to close, and the vessel is to be handed over to its new owner, within the first quarter of 2025.

Following the vessel sale, Golar will have fully exited its legacy shipping business.

Golar said the LNG carrier Fuji LNG discharged its final cargo as an LNG carrier in January 2025, and has now arrived in China preparing to enter CIMC shipyard for conversion into a MKII FLNG later this month.

“The sale of the Golar Arctic marks the conclusion of Golar’s planned exit from the LNG shipping segment, 50 years after taking delivery of our first LNG carrier in 1975,” Golar CEO Karl Fredrik Staubo said.

“Over the last 50 years LNG shipping has been the foundation for Golar’s pioneering maritime LNG infrastructure advances, including FSRUs and FLNGs. Golar’s transition into a focused FLNG infrastructure company is now complete. We look forward to expanding our market-leading FLNG position,” Staubo said.

In addition to this sale, Golar recently sold its stake in small-scale LNG player Avenir LNG to Stolt-Nielsen and took full ownership of the 2.4 mtpa FLNG Hilli after completing deals worth $90.2 million with Seatrium and Black & Veatch.

Hilli is currently contracted to Perenco in Cameroon, until contract expiry in July 2026.

Following the completion of its contract in Cameroon, the FLNG will relocate to Argentina to start a 20-year contract for Southern Energy, a consortium of natural gas producers in Argentina.

Golar LNG’s 2,5 mtpa FLNG Gimi also just started producing LNG for the BP-operated Greater Tortue Ahmeyim FLNG project, located offshore Mauritania and Senegal.

In February last year, the 2.5 mtpa FLNG, which was converted from a 1975-built Moss LNG carrier with a storage capacity of 125,000 cbm, arrived at the GTA hub.

As per the third FLNG, Golar signed an EPC agreement with China’s CIMC Raffles in September 2024 to convert its 148,000-cbm Moss-type carrier, Fuji LNG, into an MKII FLNG with a capacity of 3.5 mtpa.

Black & Veatch will supply the topside LNG process plant.

Golar said the total EPC price is $1.6 billion, but the total budget for the MK II FLNG conversion is $2.2 billion.

The Golar MK II design is an evolution of the MK I design of FLNG Hilli and FLNG Gimi.

Source: Lngprime.com

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The post Golar sells its last LNG carrier appeared first on Energy News Beat.

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Trump froze billions in renewable energy funding, sparking opposition in rural districts and legal battles over local control of renewable projects.

​President Donald Trump last month froze billions of dollars the Biden-Harris administration was pouring out to renewable energy projects. [emphasis, links added]

Despite the widespread claim that wind and solar power are the cheapest forms of energy, the legacy media screamed that the funding freeze put renewable energy development in jeopardy.

While a federal judge temporarily blocked the order before the Trump administration rescinded it, some reports such as the one in the New York Times argued that Republican districts will be hit the hardest by Trump’s move.

This is based on data from the “Clean Economy Tracker,” which shows most of the money pouring into rural districts.

It’s not surprising that rural areas would be the location for many renewable energy projects, as wind and solar are some of the most land-intensive forms of energy.

This makes acreage-rich rural districts, whose residents tend to be conservative, attractive for renewable projects.

However, the people living in those districts have not been welcoming of the rapid industrialization of their neighborhoods.

The Renewable Rejection Database, a project of energy expert Robert Bryce, has been tracking the rejection of wind and solar projects since 2015. After a decade, the database has tallied 775 renewable energy projects shot down as a result of community opposition.

A study by Columbia University’s Sabin Center for Climate Change Law published in June concluded that local opposition is becoming the primary impediment to the renewable energy industry’s ability to build wind and solar farms across the country.

Central Control

Some states have sought to limit local control to push through projects without local ordinances and zoning restrictions blocking them.

Among the strictest is a Michigan law passed as part of its goal of reaching 100% renewable electricity generation by 2040.

Opponents have been striking at the law ever since it passed. Kevon Martis, a Michigan resident, helped organize an initiative to overturn the law, which didn’t get enough signatures to get on the ballot. …

In November, seven counties and 72 townships filed a lawsuit, arguing the Michigan Public Service Commission exceeded its authority with the rules.

Renewable energy proponents are not happy about the litigation. Heatmap, a publication that advocates for the wind and solar industry, warned that the lawsuit “threatens Michigan’s permitting reform law.”

In the November election, Michigan’s House flipped Republican, and GOP legislators filed two bills seeking to return more authority to the local governments. …

Nationwide Effort

New York and Illinois, as well as other states with 100% carbon-free energy goals, have limited local control to block community opposition from getting in the way of net-zero plans.

During its session this year, the Virginia legislature considered two bills limiting local control. The state’s lawmakers let one of the bills die before deadlines, but one more remains.

That bill, according to the Farmville Herald, removes language from state statutes that allow solar projects to be permitted by local governments.

This would effectively work like Michigan’s law, requiring local ordinances to be in line with state regulations.

Indiana has a voluntary law that provides general information about renewable development. Communities that implement policies friendly to renewable energy development receive incentive payments for projects that come online.

Some state lawmakers, however, are seeking legislation that would limit renewable energy development.

A bill in the Oklahoma legislature restricts how close wind farms can be to airports, schools, and hospitals.

A bill in Arizona would limit how close a wind farm can be to someone’s property without their consent. …

Martis said that renewable energy projects will face this kind of opposition wherever they are built, and writing laws that force “highly objectionable land uses” on communities that don’t want them is “sociopathy.”

Read full post at Just The News

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Trump may try to reclaim $4.3B in unspent federal funds for California’s high-speed rail, following delays and disputes with Newsom and Biden.

​President Donald Trump could claw back $4.3 billion in unspent federal funds for California’s high-speed rail project, just as he froze $1 billion for the perpetually delayed and derailed project during his first term as president. [emphasis, links added]

The high-speed rail project was originally approved by California voters in a 2008 referendum, and championed by Gov. Jerry Brown (D), who took office after 2010, as a way of boosting the economy and fighting climate change.

As Breitbart News reported at the time, Trump stopped nearly $1 billion from going to California for the project after Gov. Gavin Newsom (D) canceled the original plan for the bullet train to link San Francisco and Los Angeles.

Newsom had told the legislature at the time that the project “would cost too much and, respectfully, would take too long.”

But he wanted to keep construction going between small towns in the rural Central Valley, despite the lack of demand.

Newsom was furious when Trump held back the $1 billion — and the president also tried to reclaim billions more that had been wasted on the project.

Trump reasoned that the federal taxpayer had invested in a high-speed rail link that would connect California’s two biggest cities; if that project was stopped, the federal taxpayer was owed the money.

Newsom appeared to believe that California should be able to claim the money regardless of the success of the project.

President Joe Biden restored the funding in 2021 and also added federal funding to a separate, private high-speed rail project that intends to link the Los Angeles area with Las Vegas (with a higher likelihood of commercial success).

On taking office, however, President Trump renewed his suspicions of California’s original high-speed rail project and vowed to investigate it, including into whether there had been corruption in public spending.

Now, the Fresno Bee reported Tuesday, Trump and Elon Musk’s Department of Government Efficiency (DOGE) could have the ailing project in their sights:

[W]hile the first $2.5 billion in federal grants awarded by the Obama administration in 2009 under the American Recovery and Reinvestment Act has been fully spent — matched by an equal amount of state money — almost $4.3 billion remains unspent as of November 2024. Most of that was awarded by the Department of Transportation under the Biden administration. The unspent federal funds conceivably could be subject to cancellation by a hostile Trump administration.

…

The authority’s goal is to build out 171 miles of route and tracks between downtown Bakersfield to downtown Merced with trains operational and carrying passengers between 2030 and 2033.

Musk once had plans for high-speed travel in California: the so-called hyperloop, which would have connected San Francisco and Los Angeles either underground or along the existing right-of-way corresponding to Interstate 5.

The idea never proceeded beyond the conceptual stage.

Read more at Breitbart

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BP has halted renewable investments, refocusing on oil and gas with asset sales and major projects after profits fell and investor pressure rose.

​BP has halted all investments in renewable energy as part of a “fundamental reset” of its strategy. [emphasis, links added]

As part of a bid to refocus on fossil fuels, the UK oil giant has said it will sell off 10 of its US onshore wind farms and hive off its offshore wind assets into a separate venture with Japan’s Jera Co.

The shift in strategy comes after profits at the company fell from $13.4bn (£10.9bn) in 2023 to $8.2bn last year, which has led to BP cutting its performance-related bonuses for its senior leaders to 45pc.

“We have completely decapitalized renewables,” said chief executive Murray Auchincloss, who added that BP increased oil and gas production by 2pc last year.

It comes after the company was recently targeted by Elliott Management, a US hedge fund with a reputation for taking stakes in companies and demanding they break themselves up or sell assets.

Mr. Auchincloss has said he will provide further details of BP’s reset at a capital markets day later this month.

He said: “We have been reshaping our portfolio – sanctioning new major projects and focusing our low-carbon investment – and have made strong progress in reducing costs.

“Building on the actions taken in the last 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns.”

This means the company has halted investment in around 30 projects that were set to generate uncertain profits, instead targeting 10 of its most lucrative.

That includes Kaskida in the Gulf of Mexico where BP is drilling more than 35,000ft into the seabed to access one of the region’s largest new oil fields.

Another is the $7bn Tangguh project in Papua Barat, Indonesia. Major investments are also planned in Iraq with the redevelopment of oil fields around Kirkuk, and in India where BP will help develop the country’s largest offshore oil field.

The shake-up has also led to BP scaling back its investment in low-carbon energy and biofuel projects.

It marks an end to the legacy left by Bernard Looney, the former BP boss who was forced out in 2023 after failing to disclose relationships with his colleagues.

Mr. Looney admitted that following his exit, he had not been “fully transparent” about his past relationships.

Under Mr. Looney, BP shifted aggressively toward green energy by ramping up investment in solar and wind, while also pledging to reduce oil and gas production significantly.

This has led to BP falling out of favor with investors in recent years, with its share price falling by more than 9pc over the past year. That is compared to a 6.5pc rise for rival Shell.

Mr. Auchincloss said the restructuring would “be a new direction for BP”, although analysts are already predicting how Elliott could seek to influence strategy.

Read rest at Telegraph

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Industry is at loggerheads over whether to scrap the EU’s strict green hydrogen rules in the face of a flagging market ramp-up.

Last year, Europe fell significantly short of its target to produce 6 million tonnes of green hydrogen. Industry holds out little hope of meeting a lofty EU target of producing 10 million tonnes by 2030.

At the same time, the EU has the world’s strictest ruleset for producing the clean-burning fuel. To be considered renewable, hydrogen production must occur at the same time as when newly installed and nearby solar panels and wind turbines are generating electricity.

The rules, put in place to prevent electrolysers running on coal power producing ‘green’ hydrogen, are increasingly coming under fire.

A coalition of fuel lobby groups called for a “more pragmatic” approach to hydrogen rules, which one insider frankly put as “getting rid” of the bloc’s restrictive renewable hydrogen framework, last week.

Striking a similar tone, Berlin pushed for a rule relaxation late last year. “The requirements often do not allow the economic realisation of electrolysis projects in Germany,” said Vice-Chancellor Robert Habeck in a letter sent to Brussels.

On the other side, the pro-renewables hydrogen coalition, featuring industry players and renewable equipment producers, says guaranteed demand for the cleanest hydrogen is needed, not changing the rules, according to a letter from today seen by Euractiv sent by three industry associations.

They are being tentatively supported by many of the bloc’s bureaucrats. The rules were created “to ensure that the development of electrolysers goes hand in hand with the expansion of renewable energies” the Commission said in its response to Berlin, seen by Euractiv.

“Let’s see how long they can hold the line,” mused a source familiar with the issue.

The Commission has until July 2028 to decide on whether its stringent rules hamper the market ramp-up, but has said “reliable indicators” may change its mind before then.

A first flashpoint for both sides will be the final adoption of the EU’s legal definition of what Brussels calls ‘low-carbon’ hydrogen, which will be cheaper than green hydrogen, but not as clean.

After an initial draft was slammed by the nuclear lobby for being too restrictive on nuclear-made hydrogen, other voices are now making themselves heard.

“We see a very ideological and prescriptive approach here,” said German MEP Christian Ehler, who negotiates energy laws for the centre-right European People’s Party.

It’s time to make some changes, he suggests. “That is not going to work in the face of the lacking ramp-up of the hydrogen market in Europe,” Ehler said.

The Commission has until 6 August to make its final proposal.

One thing both sides of the argument can agree on, however: Brussels must force manufacturers to take hydrogen, be it green or clean, off their hands, and potentially subsidise large-scale purchases, as part of its expected ‘lead market‘ policy to help get them off the ground.

[DC/OM]

Source: Euractiv.com

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The post Missed EU goals put Green Deal hydrogen rules under pressure appeared first on Energy News Beat.