HFC SMUGGLING: Smugglers are continuing to illegally move hydrofluorocarbons across European borders, according to a new report by the Environmental Investigation Agency – and are getting smarter at evading detection.
The details: In a follow-up report to its 2021 study, the London-based EIA has looked further into the smuggling of HFCs – a super pollutant that’s commonly used in air conditioning and as refrigerants – across the United Kingdom, and found that smugglers are becoming more sophisticated in their methods, while seizure enforcement has shown a decline in recent years.
Why does this matter? Countries have tried to phase down HFCs through the Kigali Amendment to the Montreal Protocol, but the newly released report underlines the difficulty of enforcing such regulations.
“As 2024 signals another reduction in HFC supply to EU markets, this risks fueling demand for illegal HFCs,” EIA Senior Climate Campaigner Fin Walravens said in a written statement. “There is an urgent need for coordinated, proactive enforcement efforts across the EU to combat HFC climate crime.”
The devil’s in the details: According to the report, non-quota HFCs, or those that have not been approved to be sold, continue to enter the EU through border countries such as Bulgaria and Poland, and transported across the bloc to countries such as Italy, Greece, France, Portugal and Spain. Smugglers are increasingly improving their methods through mislabeling HFC cylinders as HFOs (hydrofluoroolefins, which are marketed as alternatives to HFCs), invoice fraud, anonymous ads on online marketplaces, shipping the HFCs in smaller batches to avoid scrutiny, transferring the gas into refillable cylinders that are less likely to be perceived as illegal, and concealing the HFC containers when moving the materials across borders to avoid detection by customs officials.
The illegal trading has links to financial crime, corruption, and organized crime, according to the report. But even still, there has been a drop in seizures of the chemicals since 2020 – which could be attributed to lower levels of illegal activity or lower levels of enforcement activity. The report notes, however, that EU fluorinated greenhouse gas industry initiatives to combat illegal trade appear to have declined since 2020.
What they’re suggesting: The EIA is calling on European authorities and governments to prioritize regulation enforcement under the bloc’s new F-gas law – which has been enacted as of March 11. The new policy aims to reduce the amount of HFCs on the market, and enacts stricter enforcement to regulate and monitor illegal trading. The report also encourages environmental crime units to carry out both financial and F-gas related investigations, and to revise Great Britain’s regulation to align with stricter measures introduced by the EU. The report also calls for governments and businesses to integrate HFC exit plans into their net-zero strategies, and to strengthen the Montreal Protocol to “ensure it is fit to meet the challenges posed by the global HFC phasedown.”
Sound familiar? A California man was arrested and charged last month with smuggling greenhouse gasses into the U.S. – the first case of its kind in the country. But as regulations across the globe become more stringent to assist in the phase-out of HFCS, expect the number of these cases to rise.
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ECLIPSE TO CUT SOLAR POWER BY 30 GW: The U.S. will lose more than 30 GW of solar capacity during today’s solar eclipse, which will block out the sun for several minutes in some parts of the country during prime hours of solar power generation.
Texas’s power grid is expected to be the most affected, losing about 17 GW, given the path of the eclipse and the power that its grid receives from solar generation, according to an estimate from Schneider Capital Group.
PJM, which supplies power to 13 states and D.C., will see the second biggest impact—losing an estimated 4.8 GW of solar generation. MISO stands to lose up to 4 GW.
But don’t expect power prices to rise as a result: Schneider’s CEO, Timm Schneider, told Bloomberg that providers have had ample time to ramp up alternative energy sources, so consumers—and their wallets— should be just fine.
“The eclipse has been pretty well-telegraphed, so utilities should be ready,” Schneider told the outlet. Read more on the eclipse and solar generation here.
GUYANESE GAS-TO-POWER PROJECT FACES DELAYS: A $1.9 billion, 300MW planned gas-to-power project in Guyana is running six months behind its originally envisioned construction schedule, Reuters reports, with operations there now expected to begin in the last quarter of 2025.
That could be bad news for Exxon, which said it is still on track to complete construction of its 140-mile gas pipeline linking its offshore operation to Guyana’s planned power plant plant by the end of the year.
Based on current prices, the disparity in expected start dates could mean roughly $1 million or more in deferred oil revenue for Exxon, Reuters notes. It’s also bad news for Guyana, as President Mohamed Irfaan Ali looks to deliver on a 2020 election promise to reduce power costs “significantly.”
Officials have estimated that the new plant will slash consumer power costs in half—which would have given residents major relief just months ahead of next year’s presidential and parliamentary elections.
Exxon’s Guyana country manager, Alistair Routledge, acknowledged that “it’s hard to have all the facilities ready at the same time,” but said the company is not worried about the prospect of shutting in production while they wait for the facility to come online.
As soon as Guyana is ready with its onshore facilities, he said, “the whole thing will start up and all those benefits will flow to the country.” Read more here.
E&C COMMITTEE TO TALK LNG PAUSE IN PORT ARTHUR TODAY: House Energy and Commerce Committee Chairwoman Cathy McMorris Rodgers and Energy, Climate, and Grid Security Subcommittee Chairman Jeff Duncan will travel today to Port Arthur, Texas, to host a field hearing examining the implications of Biden’s LNG pause—and highlighting risks to local economies along the Gulf Coast.
While in Port Arthur, Republicans will hear from local officials, the executive of Port Arthur’s port, and a college president from a nearby branch of Lamar State College as they look to advance their argument that Biden’s pause on approving new LNG export terminals is hurting local communities, risking job opportunities, and threatening U.S. energy security. Read more on that here.
ODDS OF $100 OIL INCREASE THANKS TO SUPPLY SHOCKS: The odds of oil prices reaching $100 per barrel this year are increasing further on the back of new geopolitical tensions and tighter supplies.
OPEC+ supply cuts and heightened military tensions between Israel and Iran prompted oil benchmarks to rise above $90 per barrel last week for the first time since October, as we wrote last week. Now, analysts are concerned that markets could be squeezed further in the coming weeks due to current sanctions and Mexico’s recent decision to halt some crude exports – and if the U.S. moves to reimpose sanctions on Venezuela’s oil industry. Ahead of this month’s elections, Venezuelan President Nicolas Maduro has shown few signs of following through on his pledge to hold “free and fair” presidential elections—one of the requirements outlined by the U.S. as a requirement for easing the harsh penalties against its oil exports.
For oil, “the bigger driver right now is on the supply side,” Energy Aspects founder and director of oil research Amrita Sen told Bloomberg in an interview yesterday. “You have seen quite a few pockets of supply weakness, and demand overall on a global basis is healthy,” Sen added. Read more here.
RUSSIA ACCUSES UKRAINE OF STRIKING ZAPORIZHZHIA NUCLEAR PLANT WITH DRONES: Russian officials accused Ukraine of using drones to strike the Zaporizhzhia nuclear power plant three times yesterday, asking Western officials to intervene and protect the facility that Russia wrested from Ukrainian control almost immediately following the start of the war.
The plant is the largest nuclear energy plant in Europe, and was seized by Russian soldiers in March 2022. Russia’s occupancy of the facility has raised serious safety concerns, however, with International Atomic Energy Agency Director General Rafael Grossi warning that the near-constant shelling and nearby fighting from Russian and Ukrainian forces has put the plant in a state of “constant jeopardy,” exacerbated by the lack of skilled workers. Grossi led a team of IAEA experts to inspect the Russian-held plant on four separate occasions since the start of the war and push for new safeguards at the facility.
Several IAEA officials who remain stationed at the plant confirmed the drone strikes, Reuters reports, but stopped short of assigning blame on either country for the attack. “Russian troops engaged what appeared to be an approaching drone,” IAEA officials said. “This was followed by an explosion near the reactor building.”
“While the team so far has not observed any structural damage to systems, structures, and components important to nuclear safety or security of the plant, they reported observing minor superficial scorching to the top of the reactor dome roof of Unit 6 and scoring of a concrete slab supporting the primary make-up water storage tanks,” they added.
Ukraine has denied responsibility for the attack. Read more here.
RUNDOWN
E&E News Tensions at home and abroad pose growing threat to US grid
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