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Factbox: COP26 declarations abound but commitments still falling short of Paris Agreement

Highlights

New commitments of 4.8 billion mt CO2e

12.5 billion mt of cuts needed by 2030

Positive direction of travel on coal, methane, EVs

  • Author
  • Henry Edwardes-Evans
  • Editor
  • Haripriya Banerjee
  • Commodity
  • Coal Electric Power Energy Transition Natural Gas Oil Petrochemicals Shipping
  • Tags
  • United States Western Europe
  • Topic
  • COP26 Energy Transition Environment and Sustainability

As the UN's Conference of the Parties climate conference enters its final 24 hours of negotiations, S&P Global Platts reporters summarize what the two-week talks have achieved to date.

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National commitments

A massive increase in 2030 climate action is needed to limit global warming to below 2 degrees Celsius this century, the UN's environment program said Nov. 9.

  • New Nationally Determined Contributions and other pledges made in the run up to COP26 would result in a reduction in 2030 emissions of 4.8 billion mt CO2e versus prior pledges.
  • Annual global emissions need to fall by 12.5 billion mt in 2030 to get on track with a 2 C goal, and 27 billion mt CO2e to get on track with 1.5 C, the UN said.
  • S&P Global Platts Analytics' Reference Case sees global emissions from combustion of fossil fuels at 34.74 billion mt CO2e in 2030, up 2.89 billion mt CO2e on 2020.
  • Voluntary carbon markets can help close the gap, with a crucial set of rules being negotiated in Glasgow. The value of CORSIA-eligible carbon (CEC) credits have risen sharply since S&P Global Platts launched daily assessments in January.

Coal phase-outs

On Nov. 4, COP26 President Alok Sharma announced 77 signatories, including 46 countries, had pledged to phase out coal-fired generation in the 2030s for major economies and the 2040s for the rest of the world.

  • Of 23 new national phase out pledges, major Asian coal powers South Korea, Indonesia and Vietnam signed the accord. Global coal emission leaders China, India and the US did not.
  • Coal makes up 65% of China's power generation and 71% of India's. "Phasing out coal in China and India even over the next two decades is simply not feasible," said Dan Klein, Head of Future Energy Pathways, Platts Analytics.
  • In May the International Energy Agency said global coal phase-out was needed "in the coming decade" to deliver carbon neutrality in 2050.
  • CIF ARA 6,000 kcal/kg NAR thermal coal prices assessed by Platts on a 15-60 day basis have risen 115% this year to $146.35/mt Nov. 10, albeit down from a record high of $295.05/mt on Oct. 5.

LARGEST EMITTERS FROM COAL POWER, 2020 (million mtCO2)

2020
Net Zero target
China
4,565.0
2060
India
1,053.0
2070
US
770.6
2050
Japan
260.2
2050
South Africa
204.6
2050
South Korea
186.0
2050
Indonesia
164.2
2050
Russia
157.4
2060
Australia
144.1
2050
Vietnam
85.3
2050
Rest of world
1,288.6
Global total
8,879.0

Source: S&P Global Platts Analytics

Methane emissions

Over 100 COP countries representing 70% of the global economy agreed to reduce methane emissions at the talks.

  • Methane emissions account for about half of the 1 C net rise in global average temperature since the pre-industrial era, according to the Intergovernmental Panel on Climate Change.
  • Countries joining the pledge have committed to cut methane emissions by at least 30% from 2020 levels by 2030.
  • Countries joining the pledge included 15 of the world's top 30 methane emitters, but China, Russia, India and Australia were absent.

A major component of the US-China Climate Declaration Nov. 10 to enhance climate action in the 2020s involved reductions in methane emissions, which are over 80 times more potent that CO2 emissions in terms of warming potential.

  • Fossil fuel operations globally emitted close to 120 million mt of methane in 2020, nearly a third of all methane emissions from human activity.
  • S&P Global Platts launched its methane performance certificate assessment Oct. 4, and assessed prices on Nov. 1 at 4.4 cents/MPC. This converts to $7.097/mtCO2e.
  • The certificates represent avoided methane emissions from the production of a specific volume of natural gas in the contiguous US and Canada.

Transport pledge

A pledge to accelerate the transition to zero-emission cars and vans was signed by 33 states and 11 carmakers during COP26, committing participants to "work towards" 100% zero-emission sales by 2035 in leading markets, and 2040 globally.

  • China, the US and Germany did not sign the accord, neither did major manufacturers BMW, Honda, Daimler, Toyota, Volkswagen and SAIC Motor.
  • Plug-in WC sales in Western Europe alone will make up 37% of the global total by 2025, displacing around 173,000 b/d of the region's gasoline and diesel demand, according to Platts Analytics.
  • Platts Analytics also forecasts 21 million EVs on US roads by 2030, requiring between 1.4 million to 2.1 million charging ports in the next eight years – up from just 120,000 ports today.

The global maritime shipping sector accounts for 3% of global CO2 combustion emissions. Deepsea vessels contribute around 85% of total maritime emissions and are the most difficult to decarbonize due to high energy-density-fuel usage and long fleet lifespan.

  • Over 20 countries including the US, Japan, Australia and Canada signed the Clydebank Declaration during COP26 to develop at least six green shipping corridors between two or more ports by 2025 and "many more" by 2030.
  • Amazon, Ikea, Michelin, Unilever, Patagonia were among demand side players to commit to buying only zero carbon freight from 2040.
  • With electrification not seen as feasible, the choices for alternative shipping fuels are green methanol, liquid hydrogen and ammonia.
  • Platts assessed the price of ammonia (CFR Far East Asia) at $725/mt Nov. 10, up from $575/mt Oct. 12 when the price assessment was launched.