Articles in Category: Green

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Before we head into the weekend, let’s take a look back at the week that was and some of the headlines here on MetalMiner:

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India’s trying to do an OPEC in solar energy, screamed some headlines in Indian newspapers after the founding ceremony of the International Solar Alliance (ISA) was held here recently, witnessed by Indian Prime Minister Narendra Modi and French President Emmanuel Macron.

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It was during former French President Francois Hollande’s visit to India in January 2016 that Hollande and Modi laid the foundation stone for the ISA headquarters in Gurugram district in northern India, adjacent to the National Institute of Solar Energy (NISE).

For the uninitiated, the ISA is a treaty-based alliance of over 120 countries, most of them being “sunshine countries,” which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn. Its primary objective is to work for efficient exploitation of solar energy to reduce dependence on fossil fuels.

In addition to land, India has also contributed U.S. $27 million to build the ISA campus and has committed to meeting the operational expenditure of this body for the first five years.

Now comes the news that the French government will be committing €700 million in investment to this alliance.

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The Renewables MMI (Monthly Metals Index), after a significant surge last month, sat at 100 for the second consecutive month.

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Within this basket of metals, the Japanese steel plate price rose, as did the price of Chinese and American steel plate. U.S. steel plate, in fact, rose 5.5% month over month.

U.S. grain-oriented electrical steel (GOES) coil also jumped in price.

As for the trio of rare and minor metals in this MMI, cobalt cathodes fell 1.1%, while silicon dropped slightly and neodymium made a small gain.

Cobalt Costs

According to a report by the Financial Times, changes to the mining code in the Democratic Republic of Congo will lead to higher costs for consumers of the metal.

According to the report, President Joseph Kabila on Wednesday said he would sign a new order after meeting with representatives from some of the big miners with business in the country, including Glencore, Molybdenum and Ivanhoe Mines. 

Cobalt is used in batteries for electric vehicles (EVs), among other things, making it an especially prized material as EVs gain popularity. As such, with a majority of the world’s cobalt being mined in the DRC, political machinations in the country have a significant impact on the metal’s price.

According to the Financial Times, the code could see royalties on cobalt — plus other metals, like copper and gold — rise from 2% to 10%.

Senators Lobby for Electrical Steel Protection in 232

The Journal-News reported on a trio of U.S. senators who lobbied Trump to prioritize electrical steel in the Section 232 trade remedy process.

The only remaining maker of electrical steel in the country, AK Steel, was unlikely to benefit from the Section 232 trade remedy proposal, according to Sen. Rob Portman (R-OH).

“We write you today to share our concerns that your proposed section 232 remedy is incomplete when it comes to electrical steel,” Portman and two other senators said in their letter to Trump, according to the Journal-News. “We write on behalf of a constituent company, AK Steel, which is the last domestic producer of grain-oriented electrical steel (GOES). Since the remedy, as currently constructed, does not include electrical cores and core parts, the remedy will not be effective for the domestic electrical steel market.”

In the senators’ letter, they requested the president add a trio of HTS codes to the duty order.

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New research has shown that India achieved an operational solar power capacity of 20 gigawatts (GW) by the end of 2017.

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Mercom India Research has claimed a record 9.5 GW of solar power capacity was likely added in 2017, taking the total solar power capacity operational in India to over 20 GWs. While there’s no official word from the Indian government yet, media reports said the figure did not match those released by the Ministry of New & Renewable Energy, but Mercom attributed the figures to its India Solar Project tracker.

If the new research is spot on, it shows, at least on paper, that the Indian government was well on its path of meeting revised capacity targets of 100 GW of installed solar power capacity by March 2022.

India has made a major push in the renewable energy sector, but ,according to some experts, it faces an uphill task vis-à-vis funding, since the plan will require U.S. $125 billion. The plan seeks to achieve an ambitious 175 GW renewable energy target by 2022.

For the solar projects alone, India will set up a U.S. $350 million fund, according to India’s Power Minister RK Singh.

The country, which receives twice as much sunshine as European nations, wants to make solar central to its renewable expansion. It expects renewable energy to make up 40% of installed power capacity by 2030, compared with 18.2% at the end of 2017.

The Power Minister told a gathering at an event organized recently by the International Solar Alliance in Abu Dhabi that India would achieve its target of 175 GW of installed renewable energy capacity well before 2020. The installed renewable power capacity was currently about 60 GW, and India planned to complete the bidding process by the end of 2019-20 to add a further 115 GW of installed renewable energy capacity by 2022, he added.

But a major hurdle that stands in the way of solar power expansion is the policy around the manufacturing of solar panels and their import.

While the Modi government has often emphasized the need to do away with protectionism in order to push solar power, one of the government’s ministries has proposed a 70% import duty on imported solar panels. While this was subsequently stayed by an order of a high court, sector experts have decried this kind of protectionism.

This lot points to the U.S., for example, saying that the country levies a safeguard tariff on imported solar modules and cells, starting at 30% in the first year, 25% in the second, 20% in the third, ending at 15% in the fourth.  They want the Indian government, too, to follow suit.

The government, on its part, does not seem averse to this, it would seem.

A news report said it was “weighing the option” of lowering the proposed 70% safeguard duty on imported solar modules and panels from China and Malaysia recommended by the Directorate-General of Safeguards.

The Standing Board on Safeguards, headed by the Commerce Secretary, which is currently examining the proposal, is yet to make its recommendation to the Finance Ministry as it is deliberating upon the appropriateness of the high duty proposed by DG Safeguards, a government official told the BusinessLine newspaper.

The government has to walk a tightrope, on this issue. While domestic manufacturers of solar panels would definitely benefit from a high safeguard duty. On the other hand, it would increase the cost of production for local power producers.

Overall, on the renewable energy front, India expects foreign capital to make up for the bulk of its investments to meet its target. But the lack of a concrete policy coupled with the fact that at least three ministries involved never seem to be on the same page vis-à-vis renewable energy, has ensured that only local banks and financial institutions have invested in these type of projects so far.

Just a couple of days ago, though, there was some cheer on the foreign investment front.

One of China’s biggest solar panel makers, LONGi Solar, announced it would invest nearly U.S. $309 million in India in the wake of U.S. protectionism and India’s anti-dumping measures threat. The company’s total investment will include $240 million in construction investment and $68 million in working capital, to double the capacity in Andhra Pradesh from 500 MW to 1 GW.

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This could be the start of a new wave of investments, some experts hope. In 2017, India imported 24.1% solar products from China. China produced a total of 76 GW of solar modules and 68 GW of solar photovoltaic cells, up over 33% from the previous year. LONGi’s investment is expected to lower costs.

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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.

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

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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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Environment, Green

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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