Articles in Category: Green

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Just as there is a circle of life for, well, living things, there is also a circle of life for inorganic waste.

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Perhaps not as majestic as the “circle of life,” but the “circular economy” is the goal being sought by E.U. institutions and member states with a recently announced raft of waste rules reform, a subject that has been in the discussion phase among European institutions and member states for two years.

The agreement, announced Dec. 18, reached between European institutions and member states includes a target recycling rate of 65% by 2035 (55% by 2025 and 60% by 2030). In addition, the agreement also features a 10% cap on landfill.

Materials are used and, eventually, might be headed toward landfills or incineration — or, in a more environmentally friendly fate, they can be recycled and thus repurposed for additional uses.

According to the European Steel Association (EUROFER): “Measuring recycling at the waste collection stage, which is how it has been done until now, generates significant losses later on in the recycling value chain. This means there has been a need for targets for ‘real’ recycling that correctly measure how much material is really recovered from waste and actually reprocessed.”

Steel is one example of a metal that is widely used and capable of being recycled for reuse.

“Steel recycling is essential to the creation of a European circular economy; the establishment of this circular economy requires harmonised and coherent waste legislation,” the EUROFER release states.

Axel Eggert, director general of EUROFER, said the agreement represents a “step forward.”

“The agreement reached by the European Parliament and Council is a step forward because it proposes a methodology measuring recycling rates when waste materials are reprocessed into new products – we cannot accept that recyclable material is lost on the way to final recycling in steel production facilities,” Eggert said.

Even so, he admitted there’s still work left to do.

“However, the proposal only goes part of the way towards accurate, harmonised measurement of real recycling because a derogation allows member states to declare material as ‘recycled’ even after an early waste sorting stage,” Eggert said in the EUROFER release. “This will give vastly different results than measuring recycling at the stage of reprocessing into new products.

“This outcome means that, despite the welcome ambition shown by the member states, the legislation will remain incomplete and will allow for disparate recycling rates between the member states. The role of the Commission will be even more important during the implementation phase in ensuring greater harmonisation and reducing data gaps, tasks which are in the interest of all the member states.”

Meanwhile, the European Environmental Bureau (EEB) used the word “timid” to describe the steps taken toward the s0-called circular economy.

“This is not the outcome we all hoped for, but it is nonetheless a significant improvement compared with the laws that are currently in place,” said Piotr Barczak, waste policy officer at EEB, in a release. “We are happy the discussions are now over. Now member states and EU institutions need to build on this decision to fully transition to a circular economy.”

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According to the EEB, less than 50% of E.U. waste is recycled. It remains to be seen whether E.U. member states will hit the recycling goals included in this latest batch of reforms and if the concerns Eggert raised become an issue.

India’s solar energy plans seem to have run into a spot of a bother.

The Indian government’s target is to boost installed solar power capacity more than five-fold to 100 gigawatt (GW) by 2022.

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The problem, though, is India meets about 85% of its solar cell demand through imports from China, and photovoltaic modules account for over half the costs of a solar project.

Now, the Indian government is left contemplating whether the domestic industry of solar cells and modules manufacturers should be “protected” from cheap imports. In that vein, the government is actively thinking of imposing an anti-dumping duty.

In a related development over last week, the Ministry of New and Renewable Energy has come out with a “concept note” for offering “direct financial support” of approximately U.S. $1.7 billion (Rs 11,000 crore), as well as a tech upgrade fund for solar manufacture. At the same time, it has said cell and module manufacturing capacity in the country is “obsolete.”

The concept note pointed India had installed capacity for producing 3.1 GW of cells and 8.8 GW of modules, but even this capacity was not being fully exploited because of obsolete technology. The Ministry of New and Renewable Energy believes only 1.5 GW of cell manufacture and 3 GW of module manufacture is being used.

Now, as per the concept note, the Indian government aims to provide a 30% subsidy for setting up new plants, while also expanding existing ones. Heavy equipment required to set up projects shall also be exempt from customs duty, according to the scheme to be operated by the Indian Renewable Energy Development Agency.

According to a news report, the Ministry’s note targets creation of solar cell manufacturing capacity of 10 GW over five years and includes interest subvention of 3% to manufacturers, setting up new capacity for loans taken through state-managed banks.

Cheap imports from China have brought down solar power tariffs to record lows, according to the Indian Solar Manufacturers Association. The latter has now petitioned the government to impose an anti-dumping duty on inbound shipments from China.

The concessions that the concept note speaks of are expected to bring down reliance on imports from China.

Already, there is a slowdown in fresh investments in this sector.

In November, tenders for new projects declined by 25% to 300 mega watt (MW) and auction of new offerings dropping by 98% to just 5 MW from levels of activity seen in October. According to the latest solar market update for the third quarter published by renewable energy market tracker Mercom Capital, a total of 1,456 MW of solar power projects was tendered and 1,232 MW auctioned in the period. The figures represented a marked reduction from the activity seen in the second quarter that saw 3,408 MW of solar projects tendered and 2,505 MW auctioned.

Meanwhile, the Directorate General of Safeguards and Anti-Dumping held the first oral hearing last Tuesday to investigate allegations of dumping imported solar cells and modules.

The domestic solar panel manufacturing industry, in a petition, had submitted that around 80% of the market had been taken away by imports. The domestic industry has taken the position that as imports harm the indigenous sector, a retrospective duty should be imposed on the importers. But this was challenged by some solar power project developers, who used the argument that silicon wafers required to make solar cells were also being imported, mainly from China, hence the domestic sector had no choice but to be dependent on imports.

The prices of panels have crashed to $0.32 per kWh from $0.50 per kWh in three years, owing to global over-capacity and “dumping” by China. The tariff for solar power projects has fallen by 80% in six years.

Free Download: The December 2017 MMI Report

All of the above could be music to the ears of the consumers … but not to the domestic manufacturers.

Michael Flippo/Adobe Stock

Before we head into the holiday weekend, let’s take one last look at the week that was:

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India represents one of the biggest automobile markets in the world, with about 3 million petrol and diesel vehicles having been sold last fiscal year.

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That pie is just too lucrative for the world to ignore.

The Players

It’s not only “regulars” such as Honda, Suzuki and Hyundai are planning launches and tie-ups for the Indian market; domestic players like Mahindra and Tata Motors are also around. With the Indian government having announced earlier that the country would move to an all-electric fleet of passenger vehicles by 2030, the timeline is more or less clear.

The most unlikeliest of the pack is Chinese smartphone brand Xiaomi. Indian media reports Xiaomi has “adopted an expansion roadmap revolving largely around plans to sell electric vehicles (EVs) in the country.”

While there was no immediate confirmation from the company itself, The Economic Times report pointed to a recent regulatory filing made with the Registrar of Companies that talked of Xiaomi potentially selling “all types of vehicles for transport, conveyance and other transport equipment, whether based on electricity or any other motive or mechanical power, including the components, spare parts.”

Next on this list is Swedish company Volvo. It announced plans to only sell hybrid, electric and battery-powered cars in India after 2019. Volvo is aiming to sell over 1 million electric vehicles worldwide by 2025, with India being a major target market.

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Electric Takes to the Skies

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We are used to the idea of electric cars, electric bikes, electric buses and electric trains. Most are in their early stages, but are economically viable with varying degrees of subsidy and the technology is developing rapidly to improve efficiency and further bring down costs.

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But electric planes?

Well, there has been plenty of media attention on single-person transports, essentially beefed-up drones with four corner fans capable of carrying one, possibly even two, people. However, both technologically and economically, they are some way from being a viable product, without even beginning to consider the approval and regulatory process.

But two factors are driving the development of electric passenger aircraft that is encouraging the investment of considerable sums of money and fast-tracking potential roll-out of a viable product.

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The Renewables MMI dropped 2.5% for the month of December, ending at a value of 78.

Here’s What Happened

  • Since our recalibration of this index back in May 2017 to better take into account cobalt price fluctuations, the Renewables MMI has been slowly but surely gaining ground the latter half of 2017, hitting a high of 84 in September.
  • Within this basket of metals and materials used in the renewable energy industry, the Big Heavy is the U.S. steel plate price. Yet from November to December, that price point only dropped a single dollar per short ton.
  • The China steel plate price, however, did move much more – increasing 4.3% on the month.

What’s Going On in the Background?

  • The biggest news for the renewables industry has been the controversial tax plan put forth by legislators and still awaiting final House/Senate reconciliation – mainly, the fact that the Base Erosion Anti-Abuse Tax (BEAT) has been kept intact in the latest version of the Senate bill.
  • As Sydney Lazarus wrote in MetalMiner last week, currently, “many companies have large multinational corporations finance wind or solar energy projects, and in return, give the latter the renewable energy credit that the government provides.” But the BEAT tax, which is meant to discourage multinationals from moving profits abroad — and which the Senate bill kept intact — would make the crucial solar investment tax credit (ITC) and wind production tax credit (PTC) “unusable for multinational banks and other corporations who have low tax rates,” according to this article.
  • It’s unclear if this move was intentional or not, but regardless, it injects huge uncertainty into the renewable energy industry as the bill hurtles toward law. (Some, such as American Wind Energy Association’s Peter L. Kelley, say it “could put an end to more than half of the country’s wind projects,” as reported by Lazarus.

What Metal Buyers Should Look Out For

  • Keep an eye out on steel plate’s raw material inputs — iron ore prices increased over the past month, as we reported in our December Monthly Buying Outlook, while coal prices decreased. Although steel plate prices appear a bit sluggish at the moment, China’s demand is something worthy of paying attention.

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An article in the Financial Times this week reporting on recent research done by the Trancik Lab at MIT and the Norwegian University of Science and Technology last year suggests that the future for low-emissions vehicles might simply be smaller vehicles.

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Both pieces of solid research support the fact that larger, electric-powered vehicles have a higher life cycle carbon footprint than smaller combustion engine autos.

Let us first define what the research is saying about life cycle emissions. To capture an electric car’s full environmental impact, the research says regulators need to embrace life cycle analysis that considers car production, including the sourcing of rare earth metals that are part of the battery, plus the electricity that powers it and the recycling of its components. The most crucial elements appear to be the source of the electricity used to charge the batteries and the size (and therefore quantity of lithium and cobalt) of the batteries.

Early early vehicles (EVs) were small vehicles with limited batteries and limited ranges, but Tesla changed all that with the model S. With the marker they laid down to the market, vehicle sizes and the range they can offer on a single charge have risen. As a result, so has the size of the batteries, to the point where a model S can weigh up to 2,250 kilograms, but a significant part of that is the massive battery that powers its impressive range.

Source: Financial Times

According to data from the Trancik Lab quoted by the Financial Times, a Tesla Model S P100D saloon driven in the U.S. Midwest produces 226 grams of carbon dioxide (or equivalent) per kilometer over its life cycle. That numbers comes in less than an equivalent large luxury internal combustion engine (ICE) saloon, but much more than a smaller ICE vehicle that may produce less than 200g/km over its life cycle.

Note the reference to the location, as part of the calculation takes account of the electricity-generating capacity — in a solar- or wind-rich environment like Spain or Nevada, it will have a lower carbon footprint than in a coal-rich area, like Poland.

And therein lies part of the problem for legislators, keen to drive our migration to a “zero emission” transport future.

Of course, that is a fiction — all power, even renewables, has a carbon footprint. Power sources, however, vary considerably. To guide both automotive policy and power generation, legislators need to start looking at this more holistically than simply just, in the case of cars, what comes out the tailpipe.

Source: Financial Times

Size for size, EV has some 50% lower life cycle emission signature than an equivalent size ICE. The MIT research acknowledges that fact, but the drive for ever longer ranges (required in only a tiny fraction of real life journeys) will reduce the benefit a switch to EV could deliver. The irony is that by the time legislators get around to working out how to incentivize and/or penalize better car choices, the market will be evolving to negate the benefits. The rise of sharing services will mean journeys will be completed less in our own vehicles and more in hired services, so that we do not make purchase choices based on range and where transport providers could coordinate vehicles for longer distances. Battery technology will also improve in the next decade, increasing power density per kilogram of lithium and potentially reducing, or even removing, the need to cobalt altogether.

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While legislators fumble forward trying to accommodate the fact they are encouraging poor buying choices and the development of technologies in the wrong direction, be prepared for the fact that we see about turns in EV incentives from the current “all EVs are good” to “some EVs are good —  but some are going to be taxed.”

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Much like governments encouraged millions to switch to diesels, only for them to heavily penalize diesel cars less than 10 years later, we could see an equally ham-fisted about change on EV tax legislation down the road.

The Renewables MMI dropped a few points this month, falling from 83 for a November reading of 80.

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The sub-index dropped for the second consecutive month after hitting a 2017 high of 84 for the September reading.

Within the basket of metals, Japanese steel plate, Korean steel plate, U.S. steel plate and U.S. grain-oriented electrical steel (GOES) coil all posted price drops. Chinese steel plate, however, posted a slight price increase.

Cobalt in Cobalt

As demand for electric vehicles (EVs) increases, so, too, will demand for that rare but vital metal: cobalt.

Most of the world’s cobalt is mined in the Democratic Republic of Congo — political instability there this year has led to production slowdowns and skyrocketing prices, leading some batterymakers to recalibrate their battery formulas to make their batteries less dependent on cobalt.

Speaking of cobalt, one aptly named town is experiencing a boom related to the metal.

Bloomberg earlier this week reported on the town of Cobalt in Canada’s Ontario province.

Ironically, the town was built on another metal — silver — but a recent “cobalt rush,” in line with growing global demand for cobalt, has breathed new life into the small town, Bloomberg reported.

While the DRC produces a majority of the world’s cobalt, Canada sits at third in cobalt production behind China, contributing about 6% of global supply. As the Bloomberg report indicates, political instability in the DRC could lead to growing demand from other sources, like Canada, where the business climate is more predictable.

“This area’s seen more airborne surveys in the last year than in the last hundred,” said Gino Chitaroni, a local prospector and geologist, to Bloomberg. “Two years ago, if you had a cobalt property you couldn’t give it away. All of a sudden, within six months, everything changed.”

Cobalt, Ontario, is just one example of a town experiencing such a boom. As EVs become more and more prevalent, there’s no doubt others will follow in its footsteps.

The Kobe Steel Saga

Kobe Steel, Japan’s third-largest steelmaker, has been in the news in recent weeks because of the firm’s quality data falsification scandal.

Of relevance here, as reported by Reuters, is the fact that steel plate is included in the scope of the problems for Kobe.

According to Reuters on Oct. 19, Kobe Steel Executive Vice President Naoto Umehara said the company had found a new case of falsification of data at a unit that cuts and processes steel plate.

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An interesting article in The Telegraph this week explores the challenge facing the U.K.’s industrial sector in terms of power costs and the government’s competing priority of decarburizing the U.K.’s economy.

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The U.K. is not alone in this.

Much of Europe and the U.S. face a similar challenge of rising energy costs and concerns that industry is disadvantaged relative to competitors due to high energy costs and that retail consumers are being forced to pick up much of the bill for the government’s green agenda.

According to the article, British industry already pays well above the average for Europe, and Europe itself is a high-power-cost region relative to many other parts of the world.

Source: Telegraph

Only Denmark has higher industrial power costs than the U.K. Denmark generates much of its electricity from wind turbines, for which the technology is only just becoming economically viable, without subsidy and without costing in the backup generating capacity the variability of wind demands.

Decarburization and social policies, which includes subsidies for renewables but also programs to improve energy efficiency, add 20% to U.K. bills at present. But — and it’s a big “but” — they are rising fast.

Levies for such programs are estimated by Andrew Buckley, a director at the Major Energy Users Council (MEUC), to reach 40% by 2020, according to The Telegraph. Some major users, such as the steel industry, have been made a special case and the government has reluctantly granted an 85% rebate of green taxes for steelmakers. However, that makes the problem worse for firms that do not qualify; every subsidy for one is pressure to increase costs on another.

Some firms are moving off grid, investing in their own turbines, solar parks or micro gas plants, sometimes backed up by battery storage if based on renewables.

Rather than ease the problem for those left on the grid, it makes the situation worse. Funding a network with fewer consumers spreads the fixed costs over those that are left.

Of course, the U.K. is not alone in this, but policymakers create different policies in different countries depending on their priorities. Consumers, even in common markets like the EU, can therefore find themselves paying substantially more than their neighbours.

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For the top ten highest energy users, the annual energy bills stands at around £120 million ($155 million). If they are paying 20% or more than their neighbor, that could equate to a £24 million disadvantage before they produce a single ton of product.

No wonder energy is becoming such a hot topic despite low oil and coal prices.

If there’s one success story being written in India, it’s that of renewable energy.

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By the government’s own reckoning, despite India’s energy needs likely to double over the next seven years (going by the current rate of economic growth), the nation is likely to meet two-fifths of its electricity needs with renewable sources by 2030.

Power and Renewable Energy Minister R K Singh told reporters recently that the efficiency of solar panels itself had already reached 30%, and prices were likely to reduce due to an increase in usage.

The government’s stipulated target is of 175 Gigawatt (GW) of renewable generation by 2022, which includes 100 GW of solar and 60 GW of wind generation, up from the current total renewable energy generation capacity of about 59 GW (with wind already now at about 33 GW).

What’s more, a report this month by the International Energy Agency (IEA) said India’s renewable energy capacity would more than double by 2022, which would be enough to overtake renewable expansion in the European Union for the first time.

India’s present-day renewable energy installed capacity is about 59 GW. “By 2022, India’s renewable capacity will more than double. This growth is enough to overtake renewable expansion in the European Union for the first time,” IEA said in its latest renewables market analysis and forecast.

The IEA added that the solar photovoltaic (PV) and wind together represented 90% of India’s capacity growth, as auctions yielded some of the world’s lowest prices for both technologies.

India needs an investment of around U.S. $100 billion to meet the target of 175 GW of renewable energy capacity by 2022.

As of now, China was the undisputed leader of renewable electricity capacity expansion over the forecast period, with over 360 GW of capacity coming online. China, as per the IEA, had already exceeded its 2020 solar PV target three years ahead of time and is set to achieve its onshore wind target in 2019.

China, India and the U.S. will account for two-thirds of global renewable expansion by 2022, according to the IEA report. The total solar PV capacity by then would exceed the combined total power capacities of India and Japan today, it added.

The power consumption of electric vehicles — including cars, two- and three-wheelers, and buses — was expected to double over the next five years. Renewable electricity is estimated to represent almost 30% of their consumption by 2022, up from 26% today.

This year’s renewable forecast was 12% higher than last year, mostly because of solar PV traction in China and India.