Tag Archives: surplus
USDA FSA Solicits Bids For Feedstock Flexibility Program
By Erin Voegele | August 20, 2013 USDA Surplus sugar is one step closer to entering the U.S. biofuels industry as feedstock. The USDA Farm Service Agency recently published a notice soliciting bids under the Feedstock Flexibility Program for Bioenergy Producers. The program encourages domestic production of biofuels from surplus sugar. Information published by the USDA explains that the program was created by Congress in the 2008 Farm Bill. It essentially requires the USDA to purchase sugar and sell it as feedstock to bioenergy producers in order to avoid forfeiture of sugar pledged as collateral by processors when securing nonrecourse community loans from the Commodity Credit Corp. The USDA further explains that federal law allows sugar producers to obtain loans from the CCC with maturities of up to nine months at the beginning of the crop year. When the loan matures, the sugar processor may repay the loan or forfeit the sugar used as collateral. According to the USDA, the last time forfeitures occurred was in 2004, but atypical market conditions have caused it to take action this year to avoid forfeitures. Within the announcement , the USDA FSA specifies that any sugar purchased by the CCC under the Feedstock Flexibility Program will be sold on a competitive basis to bioenergy producers. That sugar must be used to produce biofuel. A fact sheet published by the USDA FSA in August specifies that bioenergy producers buying sugar under the program must take possession of the sugar no more than 30 days from the date of the CCC’s purchase. According to the notice, quantify offers are due by 1:30 p.m. CT on Aug. 21. By 6:30 p.m. that same day, a catalog listing with all offered quantities will be available on the FSA website here . Price offers will be due on Aug. 28, and the CCC will notify those with successful offers the following day. Additional information on the Feedstock Flexibility Program final rule, which was published in July, is available here . Continue reading
EU Carbon Market Surplus Squeezing Climate Goals
June 12, 2013 click to enlarge A surplus of Emissions Trading Scheme (ETS) carbon permits will require the European Union to cut emissions by an extra 7 percentage points to meet its 2030 climate goals, according to a report by environmental research company Ecofys. The report, the Next Step in Europe’s Climate Action: Setting Targets for 2030 , finds any future emissions reduction goals will have to take into account the effects of the current carbon permit surplus in the ETS, the largest global carbon market. The EU’s emissions reductions should be around 49 percent compared to 1990 levels, Ecofys says in the report. The EU has a binding target to cut greenhouse gas emissions by 20 percent in 2020 from 1990 levels. The European Commission, the EU’s regulatory arm, said in a paper published in March the 27-nation bloc should cut emissions 40 percent in 2030. Greenpeace has called on the EU to cut carbon emissions by at least 55 percent in 2030, a goal which takes into account Ecofys’ 49 percent figure plus the additional 7 percentage points required to deal with the glut of carbon permits. The ETS has struggled to maintain the value of carbon permits . The ETS saw the estimated carbon price drop 49 percent to €5.82 ($7.73) per metric ton in 2012, down from €11.45 ($15.21) per metric ton in 2011. The glut of permits pushed carbon prices to a record low of €2.46 ($3.25) per metric ton in April. Analysts have cautioned about carbon prices in Europe inching closer to zero unless policymakers take action, either through backloading or some form of long-term structural change. Last month, European carbon prices rebounded after German Chancellor Angela Merkel said the EU should take action on a plan to postpone the supply of permits. The European Commission is scheduled to hold a new vote June 19 on the temporary carbon market fix. Continue reading
Commission Repeats Calls For Carbon Market Reform As Surplus Allowances Double
The number of surplus carbon permits under the European Union’s Emissions Trading System (EU ETS) doubled to two billion last year, the European Commission has announced. 21 May 2013 Topics Climate Action Commissioner Connie Hedegaard said that the figures for 2012 underlined the need for urgent action to address the “supply-demand imbalance” under the struggling scheme. “The good news is that emissions declined again in 2012,” she said. “The bad news is that the supply-demand imbalance has further worsened in large part due to a record use of international credits.” “At the start of phase 3, we see a surplus of almost two billion allowances. These facts underline the need for the European Parliament and Council to act swiftly on back-loading,” she said. The European Parliament rejected a proposal by the European Commission to ‘backload’ a number of allowances under the scheme , as a temporary measure to address falling prices and lack of demand, last month. The proposal will be refined by the Parliament’s Environmental Committee, before returning to Parliament for a new vote next month. The EU ETS was established in 2005 and was the first major emissions trading scheme in the world. Phase 3 began on 1 January 2013, and runs until 2020. Under the scheme there is a cap on greenhouse gas (GHG) emissions from prescribed energy intensive installations. Installations must purchase GHG emissions allowances, called European Union Allowances (EUAs), which represent the right to emit or discharge a specific volume of emissions in line with national allocation plans. Operators of installations must hold EUAs equal to, or more than, total emissions at the end of the EU ETS year and those with excess allowances can ‘bank’ them or trade with those who need to buy more allowances to comply with emissions limits. The European Commission’s proposals would see 900 million allowances that would otherwise have been made available for auction between 2013 and 2015 transferred to later in the third phase of the EU ETS. By doing this, the Commission hopes to address the build-up in allowances caused by reduced industrial activity during the economic downturn. The price of allowances is currently below €4 per tonne according to Thomson Reuters Point Carbon – well below a historical average of €30 per tonne. According to the Commission’s figures, the number of surplus allowances rose from around 950 million at the end of 2011 to almost two billion by the end of 2012. This was due to a “combination” of the use of international credits, auctioned allowances from earlier phases of the scheme and remaining free allowances granted to new entrants to the scheme. Since 2008, the EU ETS has allowed installations to use international emissions reduction credits generated under the Kyoto Protocol to offset part of their emissions. Compliance with the rules of the scheme was “high” in 2012, according to the Commission. Less than 1% of participating installations did not surrender allowances to cover their 2012 emissions by the deadline of 30 April 2013, while aircraft operators responsible for over 98% of 2012’s aviation emissions had also fulfilled their responsibilities under the scheme. This year, aviation emissions fell under the EU ETS for the first time; however aircraft operators were given the option to limit reporting to only those flights within Europe. Environmental law expert Eluned Watson of Pinsent Masons said previously that backloading was merely a “quick fix” for the EU ETS, but that more time would be needed to put together a longer term reform package. ” Urgent action is required, backed by clear legislative support, to structurally reform the EU ETS and to rebalance the supply and demand of allowances in the EU ETS market, ” she said, as prices fell to a record low of €2.81 a tonne at the start of this year. “Although the backloading proposal is very much a ‘quick fix’, reactionary measure, it is clear that longer term structural reform will take time, with changes unlikely to be in place until 2017 at the earliest,” she said. Continue reading
