We highlight here a few of the most interesting flaring-related developments this week:
- The EU launches its climate plan and brings carbon border price closer. Whilst not yet on fossil fuels, the direction is clear, with current ETS being extended to aviation and shipping and a new ETS for buildings and road transport. Plus there is a revision of energy taxation directive with a tax on motor fuels above 10 euro per MJ. See our article on this topic.
- Russia publishes law on limitation of greenhouse gas emissions. This news is actually from July 2, 2021, but interestingly requires regulated organisations to submit (starting from 2023) annual reports on greenhouse gas emissions to the competent body and projects that reduce emissions may be offered a voluntary carbon credit. Given that Russia is global flarer #1, this is a key development.
- Nigeria’s Petroleum Industry Bill, which was passed into law 2 weeks ago now has a clause that directs penalties received from flaring fines towards midstream gas infrastructure in community (see article from 15/7/2021). If Nigeria were to collect the flaring penalties as per the stated law, it could capture fines of up to $510 million per year – although this is only 0.1% of GDP.
- A senior Equinor leader confirms that “reducing upstream emissions [incluing gas flaring] is not rocket science” and highlights that blue hydrogen (created from fossil gas with CCS) without solving upstream emissions is far from optimal and may “otherwise upstream emissions will kill the concept [of blue hydrogen]“. Whilst Equinor’s flaring in Norway and for operated assets are low, it has exposure to very high flaring assets internationally, especially in Libya – see below from FlareIntel Pro.