At night, the Lázaro Cárdenas refinery – Mexico‘s oldest, built in 1906 – lights up the city of Minatitlán, in the southern oil-producing state of Veracruz. Gas flaring turns night into day, inhabitants say, while a mix of industrial smells in the air reminds visitors they have arrived in Mexico’s oil and gas heartland.
“It is like Mordor,” said one resident, referring to the volcanic realm in the fantasy novel “The Lord of the Rings” with a tone between humour and resignation. “There are no more dark nights in Minatitlán,” said another local interviewed by Climate Home.
The refinery is a key pillar of Mexico’s state-owned oil company, Petróleos Mexicano (Pemex), and a testament to the firm’s problems with climate-heating methane gas. Pemex has struggled for years to control its rocketing methane emissions despite promises to the contrary and has failed to find an efficient way to use the gas – instead venting or flaring it, which releases methane into the atmosphere.
While its oil production went down in the decade from 2013 to 2023, Pemex now has one of the highest methane footprints per barrel of oil in the world, about eight times that of ExxonMobil and 83 times Saudi Aramco’s, according to local think-tank Mexico Evalúa.
Methane is a greenhouse gas that is around 80 times more potent than carbon dioxide in the first 20 years after it is emitted. Experts say cutting methane emissions is “low-hanging fruit” in tackling climate change.
To that end, a coalition of 160 countries – among them Mexico – have signed a global methane pledge, aiming to reduce emissions by 30% globally by 2030 with respect to 2020 levels. The initiative was first launched in 2021 at the COP26 climate summit in Glasgow.
Pemex has also joined voluntary initiatives like the Oil and Gas Methane Partnership (OGMP) in 2014, under which ten oil and gas giants – including BP, Shell and TotalEnergies – promised to track and evaluate ways to reduce their emissions. Pemex left the partnership when it was ratcheted up in scope and relaunched in 2020. Meanwhile, the company’s emissions have continued to go up.
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Pemex’s rising methane emissions, even as its oil and gas production fell, could put Mexico’s ambitious climate goals at risk, analysts warned. The government recently announced at COP29 it will set a net zero greenhouse gas emissions target for 2050, making it the last G20 country to adopt a net zero pledge.
“This new ambition from the Mexican state to reach net zero by 2050 needs to consider the country’s energy policy and Pemex in particular,” said Fernanda Ballesteros, Mexico country manager at the Natural Resource Governance Institute (NRGI).
Like many of the world’s largest economies, Mexico is still due to submit a new nationally determined contribution (NDC) – a climate plan with a 2035 target to cut emissions of all greenhouse gases including methane. Countries are expected to file their new NDCs before September.
Mexican environment secretary Alicia Bárcena has called this round of climate plans “our last hope” to keep global warming to 1.5C above pre-industrial times.
But the country’s new NDC will need to address Pemex’s emissions and show a clear plan for change, Ballesteros said. “[Pemex] is a very relevant actor for Mexico to achieve this [net zero] goal,” she added.
Fugitive methane
Minatitlán is a small city of just over 144,000 inhabitants, including a large floating population from neighbouring states like Oaxaca and Tabasco. Mexico’s southern region made headlines in 2021 when a pipeline rupture caused a gas leak that set fire to the ocean in the Gulf of Mexico.
Around the time of that incident, Pemex promised to reduce flaring (where gas is burned off), as well as venting (where it is released directly) and other types of fugitive emissions such as leaks, as outlined in its 2021-2025 business plan.
A Climate Home analysis of the company’s last four sustainability reports shows that Pemex did manage to reduce flaring, but gas venting and leaks kept growing. And over the past decade, methane emissions still followed an upward trend.
Many methane leaks from Pemex-run facilities – some major – have occurred in recent years, with one in the Deer Park refinery, located in Texas, leaving two dead in 2024.
Climate Home has identified another large leak of methane emissions from a Pemex plant in Minatitlán.
On April 28, 2024, methane monitoring platform Carbon Mapper detected one of the largest methane plumes in the Americas coming from a Pemex plant located right in the heart of the city. Climate Home confirmed that a second satellite data provider, Kayrros, also recorded this plume.
The plume released more than 16 tonnes of methane per hour into the atmosphere, a rate higher than any other single plume detected in oil-producing countries on the continent such as the US or Venezuela over that same year.
Both Kayrros and Carbon Mapper recorded the plume only once, meaning it is not possible to know how long it was active and thus the amount of greenhouse gases emitted into the atmosphere.
The plume was detected over Pemex’s Cosoleacaque petrochemical complex, located 5km from the centre of Minatitlán, near a university and a hospital. The complex contains four ammonia plants, of which only one is currently operational, according to six Pemex workers interviewed.
Cosoleacaque produces ammonia from gas, which is then sold to make fertilisers. This is a business Pemex has recently resuscitated with support from President Claudia Sheinbaum, a climate scientist, in a bid to boost the domestic agriculture sector.
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Pemex plans to invest almost $400 million in reactivating petrochemical plants that were dormant for more than two decades. Cosoleacaque is one of the plants that was restarted in 2023 after operating at minimum levels for years. Workers said there are plans for all four ammonia plants in the complex to come back online, with a second one due to restart around March.
When asked about the leak there, workers suggested it could have gone undetected, because it was active on a Sunday. “If the leak happened on the weekend, there is no way we could have known, because we just work from Monday to Friday,” said one Pemex worker who requested anonymity.
Climate Home contacted Pemex for comment on its growing methane emissions and the plume detected over the Cosoleacaque complex, but did not receive a response.
Soaring emissions
Pemex received a boost from the government of Andrés Manuel López Obrador in 2018, as he vowed to “rescue the national oil industry again”. Up to then, the company had struggled through years of high debt and plummeting production. Nonetheless, Mexico’s former president described oil as “the best business in the world”.
As the company started to drill more oil under the new mandate to increase production, it found itself with a lot of excess gas it could not take advantage of, mostly due to a lack of suitable infrastructure, analysts said. It resorted to flaring and venting the gas instead.
“Deliberate gas flaring and venting was a problem in the past, but it really worsened during the previous government’s six-year term,” said Adrián Duhalt, a Minatitlán-born energy researcher at US-based think-tank the Texas-Mexico Center.
As deliberate methane releases soared and accidental leaks continued, Pemex’s methane emissions rocketed, almost doubling between 2018 – when López Obrador was elected – and 2022, according to Pemex statistics.
The country’s current president, Sheinbaum, has doubled down on the previous administration’s spending on new oil and gas projects, with the goal of making Mexico self-sufficient in gasoline consumption.
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Health impacts unknown
While flaring is the most obvious source of emissions, leaks are frequent in Minatitlán, according to residents – but most are only perceptible when ammonia is emitted, because of its distinct smell. The oil and gas industry’s toll on the public health in the area remains largely unknown, analysts said.
Neighbours of the plant interviewed by Climate Home – most of whom have worked in the oil and gas industry themselves – raised concerns over ammonia leaks from the Cosoleacaque complex, which they said caused headaches, dizziness and allergies.
The city was ranked among the top 30 industrial cities in Mexico with worsening health indicators due to air pollution and other types of contamination, according to a 2023 multidisciplinary study sponsored by the Mexican government. Researchers reported rising cases of cancer, kidney failures, birth defects and spontaneous abortions.
In La Oaxaqueña, a neighbourhood immediately adjacent to the ammonia plants, people have learned to live with the chemical smell in the air, which they describe as “that of a public restroom” or “hair dye”.
“Coughing and sneezing is nothing – sometimes you want to run away. I once had to carry my daughter in the middle of the night to the hospital because she was vomiting,” said one woman, describing the effects of an ammonia leak incident. She wished to remain anonymous.
While experts say there is a research gap on the health impacts of oil and gas infrastructure in southern Mexico, a group of NGOs reported similar symptoms last year in the neighbouring state of Tabasco, where they found headaches, nausea and nosebleeds to be common among people living near Pemex plants.
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On the other side of Minatitlán, flaring at the Lázaro Cárdenas refinery adds to the air pollution, locals said. As the city relies on northern winds to blow away air pollutants from the refinery, the situation worsens when those winds shift or stop.
“Whenever the North [wind] is not blowing, you can really see the cloud of gases on the horizon, and sometimes also perceive the smell,” explained Ramón García, a lawyer who has worked on cases of health complications blamed on the local oil industry.
García said such legal cases are common in the region, especially those related to environmental damage and health impacts – but they almost never reach local administrative courts, as Pemex often settles early in the process, he added.
The details of the cases are also kept secret, García said. In one, involving an oil spill in the region of Papantla, north of Veracruz, the National Agency for Safety, Energy and Environment (ASEA) ordered Pemex to implement an 11-point plan to clean up the spill. When García asked for details of the case in January, he was told they were confidential.
Researcher Duhalt said such issues haven’t “affected the loyalty from the community to the company”.
From an academic standpoint, the Minatitlán-Coatzacoalcos corridor might be considered a sacrifice zone, “but from the standpoint of the head of family, it is just your source of employment,” he added.
Aging infrastructure
Pemex has struggled to control its methane emissions partly due to aging infrastructure and a lack of political will, analysts told Climate Home.
“There are already corporate procedures and technological changes for Pemex to [be able to] emit much less methane. It has been in their plans for years,” said Viviana Patiño Alcala, an energy researcher at think-tank México Evalúa. “But this has not translated into meaningful (emissions) reductions,” she added.
Ballesteros from NRGI noted that the company has focused most of its investments on new projects rather than maintaining existing ones.
In Minatitlán, one worker interviewed near the Cosoleacaque complex said, “it’s all messed up inside, but we are working to fix it”, while a neighbour said it was common to see fires and hear ambulances heading to the plant.
Ballesteros noted that the poor state of Pemex’s infrastructure is reflected in the number of leakage and spill events, which have increased since 2018, rising from 912 recorded events in 2018 to 1,211 incidents in 2023, according to the company’s annual statistics.
It may also be contributing to the high number of worker accidents. In 2023, Pemex reported 129 injuries and 11 fatalities. Its index for accident frequency in that same year was 57% above the industry standard set by the International Association of Oil and Gas Producers (IOGP).
A 2024 report by Reuters showed that the company put off urgent repairs to two of its offshore platforms, causing key components to fail and forcing it to flare large amounts of gas as a result.
“It’s very difficult for this trend [of rising methane emissions] to change soon,” said Patiño Alcala. “If this current administration has been clear in something it is that the environment is important, but it’s more important to provide Pemex with a market.”
Meanwhile, in Minatitlán, residents seem resigned to living with the clouds of gas and the light of the refinery’s flares painting the sky orange.
“With the leaks, even if we don’t see clearly, we know what is in the breeze,” said Irving, a 27-year-old oil worker who lives near the Cosoleacaque plant. “We know how this is, but that’s life for us.”
The post Oil giant Pemex fails to control methane emissions, threatening Mexico’s net zero goal appeared first on Climate Home News.
Oil giant Pemex fails to control methane emissions, threatening Mexico’s net zero goal
Climate Change
DeBriefed 27 February 2026: Trump’s fossil-fuel talk | Modi-Lula rare-earth pact | Is there a UK ‘greenlash’?
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Absolute State of the Union
‘DRILL, BABY’: US president Donald Trump “doubled down on his ‘drill, baby, drill’ agenda” in his State of the Union (SOTU) address, said the Los Angeles Times. He “tout[ed] his support of the fossil-fuel industry and renew[ed] his focus on electricity affordability”, reported the Financial Times. Trump also attacked the “green new scam”, noted Carbon Brief’s SOTU tracker.
COAL REPRIEVE: Earlier in the week, the Trump administration had watered down limits on mercury pollution from coal-fired power plants, reported the Financial Times. It remains “unclear” if this will be enough to prevent the decline of coal power, said Bloomberg, in the face of lower-cost gas and renewables. Reuters noted that US coal plants are “ageing”.
OIL STAY: The US Supreme Court agreed to hear arguments brought by the oil industry in a “major lawsuit”, reported the New York Times. The newspaper said the firms are attempting to head off dozens of other lawsuits at state level, relating to their role in global warming.
SHIP-SHILLING: The Trump administration is working to “kill” a global carbon levy on shipping “permanently”, reported Politico, after succeeding in delaying the measure late last year. The Guardian said US “bullying” could be “paying off”, after Panama signalled it was reversing its support for the levy in a proposal submitted to the UN shipping body.
Around the world
- RARE EARTHS: The governments of Brazil and India signed a deal on rare earths, said the Times of India, as well as agreeing to collaborate on renewable energy.
- HEAT ROLLBACK: German homes will be allowed to continue installing gas and oil heating, under watered-down government plans covered by Clean Energy Wire.
- BRAZIL FLOODS: At least 53 people died in floods in the state of Minas Gerais, after some areas saw 170mm of rain in a few hours, reported CNN Brasil.
- ITALY’S ATTACK: Italy is calling for the EU to “suspend” its emissions trading system (ETS) ahead of a review later this year, said Politico.
- COOKSTOVE CREDITS: The first-ever carbon credits under the Paris Agreement have been issued to a cookstove project in Myanmar, said Climate Home News.
- SAUDI SOLAR: Turkey has signed a “major” solar deal that will see Saudi firm ACWA building 2 gigawatts in the country, according to Agence France-Presse.
$467 billion
The profits made by five major oil firms since prices spiked following Russia’s invasion of Ukraine four years ago, according to a report by Global Witness covered by BusinessGreen.
Latest climate research
- Claims about the “fingerprint” of human-caused climate change, made in a recent US Department of Energy report, are “factually incorrect” | AGU Advances
- Large lakes in the Congo Basin are releasing carbon dioxide into the atmosphere from “immense ancient stores” | Nature Geoscience
- Shared Socioeconomic Pathways – scenarios used regularly in climate modelling – underrepresent “narratives explicitly centring on democratic principles such as participation, accountability and justice” | npj Climate Action
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
The constituency of Richard Tice MP, the climate-sceptic deputy leader of Reform UK, is the second-largest recipient of flood defence spending in England, according to new Carbon Brief analysis. Overall, the funding is disproportionately targeted at coastal and urban areas, many of which have Conservative or Liberal Democrat MPs.
Spotlight
Is there really a UK ‘greenlash’?
This week, after a historic Green Party byelection win, Carbon Brief looks at whether there really is a “greenlash” against climate policy in the UK.
Over the past year, the UK’s political consensus on climate change has been shattered.
Yet despite a sharp turn against climate action among right-wing politicians and right-leaning media outlets, UK public support for climate action remains strong.
Prof Federica Genovese, who studies climate politics at the University of Oxford, told Carbon Brief:
“The current ‘war’ on green policy is mostly driven by media and political elites, not by the public.”
Indeed, there is still a greater than two-to-one majority among the UK public in favour of the country’s legally binding target to reach net-zero emissions by 2050, as shown below.
Steve Akehurst, director of public-opinion research initiative Persuasion UK, also noted the growing divide between the public and “elites”. He told Carbon Brief:
“The biggest movement is, without doubt, in media and elite opinion. There is a bit more polarisation and opposition [to climate action] among voters, but it’s typically no more than 20-25% and mostly confined within core Reform voters.”
Conservative gear shift
For decades, the UK had enjoyed strong, cross-party political support for climate action.
Lord Deben, the Conservative peer and former chair of the Climate Change Committee, told Carbon Brief that the UK’s landmark 2008 Climate Change Act had been born of this cross-party consensus, saying “all parties supported it”.
Since their landslide loss at the 2024 election, however, the Conservatives have turned against the UK’s target of net-zero emissions by 2050, which they legislated for in 2019.
Curiously, while opposition to net-zero has surged among Conservative MPs, there is majority support for the target among those that plan to vote for the party, as shown below.
Dr Adam Corner, advisor to the Climate Barometer initiative that tracks public opinion on climate change, told Carbon Brief that those who currently plan to vote Reform are the only segment who “tend to be more opposed to net-zero goals”. He said:
“Despite the rise in hostile media coverage and the collapse of the political consensus, we find that public support for the net-zero by 2050 target is plateauing – not plummeting.”
Reform, which rejects the scientific evidence on global warming and campaigns against net-zero, has been leading the polls for a year. (However, it was comfortably beaten by the Greens in yesterday’s Gorton and Denton byelection.)
Corner acknowledged that “some of the anti-net zero noise…[is] showing up in our data”, adding:
“We see rising concerns about the near-term costs of policies and an uptick in people [falsely] attributing high energy bills to climate initiatives.”
But Akehurst said that, rather than a big fall in public support, there had been a drop in the “salience” of climate action:
“So many other issues [are] competing for their attention.”
UK newspapers published more editorials opposing climate action than supporting it for the first time on record in 2025, according to Carbon Brief analysis.
Global ‘greenlash’?
All of this sits against a challenging global backdrop, in which US president Donald Trump has been repeating climate-sceptic talking points and rolling back related policy.
At the same time, prominent figures have been calling for a change in climate strategy, sold variously as a “reset”, a “pivot”, as “realism”, or as “pragmatism”.
Genovese said that “far-right leaders have succeeded in the past 10 years in capturing net-zero as a poster child of things they are ‘fighting against’”.
She added that “much of this is fodder for conservative media and this whole ecosystem is essentially driving what we call the ‘greenlash’”.
Corner said the “disconnect” between elite views and the wider public “can create problems” – for example, “MPs consistently underestimate support for renewables”. He added:
“There is clearly a risk that the public starts to disengage too, if not enough positive voices are countering the negative ones.”
Watch, read, listen
TRUMP’S ‘PETROSTATE’: The US is becoming a “petrostate” that will be “sicker and poorer”, wrote Financial Times associate editor Rana Forohaar.
RHETORIC VS REALITY: Despite a “political mood [that] has darkened”, there is “more green stuff being installed than ever”, said New York Times columnist David Wallace-Wells.
CHINA’S ‘REVOLUTION’: The BBC’s Climate Question podcast reported from China on the “green energy revolution” taking place in the country.
Coming up
- 2-6 March: UN Food and Agriculture Organization regional conference for Latin America and Caribbean, Brasília
- 3 March: UK spring statement
- 4-11 March: China’s “two sessions”
- 5 March: Nepal elections
Pick of the jobs
- The Guardian, senior reporter, climate justice | Salary: $123,000-$135,000. Location: New York or Washington DC
- China-Global South Project, non-resident fellow, climate change | Salary: Up to $1,000 a month. Location: Remote
- University of East Anglia, PhD in mobilising community-based climate action through co-designed sports and wellbeing interventions | Salary: Stipend (unknown amount). Location: Norwich, UK
- TABLE and the University of São Paulo, Brazil, postdoctoral researcher in food system narratives | Salary: Unknown. Location: Pirassununga, Brazil
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 27 February 2026: Trump’s fossil-fuel talk | Modi-Lula rare-earth pact | Is there a UK ‘greenlash’? appeared first on Carbon Brief.
Seven Pacific island nations say they will demand heftier levies on global shipping emissions if opponents of a green deal for the industry succeed in reopening negotiations on the stalled accord.
The United States and Saudi Arabia persuaded countries not to grant final approval to the International Maritime Organization’s Net-Zero Framework (NZF) in October and they are now leading a drive for changes to the deal.
In a joint submission seen by Climate Home News, the seven climate-vulnerable Pacific countries said the framework was already a “fragile compromise”, and vowed to push for a universal levy on all ship emissions, as well as higher fees . The deal currently stipulates that fees will be charged when a vessel’s emissions exceed a certain level.
“For many countries, the NZF represents the absolute limit of what they can accept,” said the unpublished submission by Fiji, Kiribati, Vanuatu, Nauru, Palau, Tuvalu and the Solomon Islands.
The countries said a universal levy and higher charges on shipping would raise more funds to enable a “just and equitable transition leaving no country behind”. They added, however, that “despite its many shortcomings”, the framework should be adopted later this year.
US allies want exemption for ‘transition fuels’
The previous attempt to adopt the framework failed after governments narrowly voted to postpone it by a year. Ahead of the vote, the US threatened governments and their officials with sanctions, tariffs and visa restrictions – and President Donald Trump called the framework a “Green New Scam Tax on Shipping”.
Since then, Liberia – an African nation with a major low-tax shipping registry headquartered in the US state of Virginia – has proposed a new measure under which, rather than staying fixed under the NZF, ships’ emissions intensity targets change depending on “demonstrated uptake” of both “low-carbon and zero-carbon fuels”.
The proposal places stringent conditions on what fuels are taken into consideration when setting these targets, stressing that the low- and zero-carbon fuels should be “scalable”, not cost more than 15% more than standard marine fuels and should be available at “sufficient ports worldwide”.
This proposal would not “penalise transitional fuels” like natural gas and biofuels, they said. In the last decade, the US has built a host of large liquefied natural gas (LNG) export terminals, which the Trump administration is lobbying other countries to purchase from.
The draft motion, seen by Climate Home News, was co-sponsored by US ally Argentina and also by Panama, a shipping hub whose canal the US has threatened to annex. Both countries voted with the US to postpone the last vote on adopting the framework.
-
IMO head: Shipping decarbonisation “has started” despite green deal delay
Arsenio Dominguez said the shipping industry’s net zero emissions goal is not in dispute although countries have stalled on adopting a framework to reach it -
US-led alliance wins a year’s delay in adoption of green shipping deal
The IMO’s Net-Zero Framework will be up for approval again in October 2026, after the US and Saudi Arabia persuaded countries not to vote on it as planned
The IMO’s Panamanian head Arsenio Dominguez told reporters in January that changes to the framework were now possible.
“It is clear from what happened last year that we need to look into the concerns that have been expressed [and] … make sure that they are somehow addressed within the framework,” he said.
Patchwork of levies
While the European Union pushed firmly for the framework’s adoption, two of its shipping-reliant member states – Greece and Cyprus – abstained in October’s vote.
After a meeting between the Greek shipping minister and Saudi Arabia’s energy minister in January, Greece said a “common position” united Greece, Saudi Arabia and the US on the framework.
If the NZF or a similar instrument is not adopted, the IMO has warned that there will be a patchwork of differing regional levies on pollution – like the EU’s emissions trading system for ships visiting its ports – which will be complicated and expensive to comply with.
This would mean that only countries with their own levies and with lots of ships visiting their ports would raise funds, making it harder for other nations to fund green investments in their ports, seafarers and shipping companies. In contrast, under the NZF, revenues would be disbursed by the IMO to all nations based on set criteria.
Anais Rios, shipping policy officer from green campaign group Seas At Risk, told Climate Home News the proposal by the Pacific nations for a levy on all shipping emissions – not just those above a certain threshold – was “the most credible way to meet the IMO’s climate goals”.
“With geopolitics reframing climate policy, asking the IMO to reopen the discussion on the universal levy is the only way to decarbonise shipping whilst bringing revenue to manage impacts fairly,” Rios said.
“It is […] far stronger than the Net-Zero Framework that is currently on offer.”
The post Pacific nations want higher emissions charges if shipping talks reopen appeared first on Climate Home News.
Pacific nations want higher emissions charges if shipping talks reopen
Doubts over whether governments will maintain ambitious targets on boosting the use of sustainable aviation fuel (SAF) are a threat to the industry’s growth and play into the hands of fossil fuel companies, investors warned this week.
Several executives from airlines and oil firms have forecast recently that SAF requirements in the European Union, United Kingdom and elsewhere will be eased or scrapped altogether, potentially upending the aviation industry’s main policy to shrink air travel’s growing carbon footprint.
Such speculation poses a “fundamental threat” to the SAF industry, which mainly produces an alternative to traditional kerosene jet fuel using organic feedstocks such as used cooking oil (UCO), Thomas Engelmann, head of energy transition at German investment manager KGAL, told the Sustainable Aviation Fuel Investor conference in London.
He said fossil fuel firms would be the only winners from questions about compulsory SAF blending requirements.
The EU and the UK introduced the world’s first SAF mandates in January 2025, requiring fuel suppliers to blend at least 2% SAF with fossil fuel kerosene. The blending requirement will gradually increase to reach 32% in the EU and 22% in the UK by 2040.
Another case of diluted green rules?
Speaking at the World Economic Forum in Davos in January, CEO of French oil and gas company TotalEnergies Patrick Pouyanné said he would bet “that what happened to the car regulation will happen to the SAF regulation in Europe”.
The EU watered down green rules for car-makers in March 2025 after lobbying from car companies, Germany and Italy.
“You will see. Today all the airline companies are fighting [against the EU’s 2030 SAF target of 6%],” Pouyanne said, even though it’s “easy to reach to be honest”.
While most European airline lobbies publicly support the mandates, Ryanair Group CEO Michael O’Leary said last year that the SAF is “nonsense” and is “gradually dying a death, which is what it deserves to do”.
EU and UK stand by SAF targets
But the EU and the British government have disputed that. EU transport commissioner Apostolos Tzitzikostas said in November that the EU’s targets are “stable”, warning that “investment decisions and construction must start by 2027, or we will miss the 2030 targets”.
UK aviation minister Keir Mather told this week’s investor event that meeting the country’s SAF blending requirement of 10% by 2030 was “ambitious but, with the right investment, the right innovation and the right outlook, it is absolutely within our reach”.
“We need to go further and we need to go faster,” Mather said.
SAF investors and developers said such certainty on SAF mandates from policymakers was key to drawing the necessary investment to ramp up production of the greener fuel, which needs to scale up in order to bring down high production costs. Currently, SAF is between two and seven times more expensive than traditional jet fuel.
Urbano Perez, global clean molecules lead at Spanish bank Santander, said banks will not invest if there is a perceived regulatory risk.
David Scott, chair of Australian SAF producer Jet Zero Australia, said developing SAF was already challenging due to the risks of “pretty new” technology requiring high capital expenditure.
“That’s a scary model with a volatile political environment, so mandate questioning creates this problem on steroids”, Scott said.
Others played down the risk. Glenn Morgan, partner at investment and advisory firm SkiesFifty, said “policy is always a risk”, adding that traditional oil-based jet fuel could also lose subsidies.
Asian countries join SAF mandate adopters
In Asia, Singapore, South Korea, Thailand and Japan have recently adopted SAF mandates, and Matti Lievonen, CEO of Asia-based SAF producer EcoCeres, predicted that China, Indonesia and Hong Kong would follow suit.
David Fisken, investment director at the Australian Trade and Investment Commission, said the Australian government, which does not have a mandate, was watching to see how the EU and UK’s requirements played out.
The US does not have a SAF mandate and under President Donald Trump the government has slashed tax credits available for SAF producers from $1.75 a gallon to $1.
Is the world’s big idea for greener air travel a flight of fancy?
SAF and energy security
SAF’s potential role in boosting energy security was a major theme of this week’s discussions as geopolitical tensions push the issue to the fore.
Marcella Franchi, chief commercial officer for SAF at France’s Haffner Energy, said the Canadian government, which has “very unsettling neighbours at the moment”, was looking to produce SAF to protect its energy security, especially as it has ample supplies of biomass to use as potential feedstock.
Similarly, German weapons manufacturer Rheinmetall said last year it was working on plans that would enable European armed forces to produce their own synthetic, carbon-neutral fuel “locally and independently of global fossil fuel supply chain”.
Scott said Australia needs SAF to improve its fuel security, as it imports almost 99% of its liquid fuels.
He added that support for Australian SAF production is bipartisan, in part because it appeals to those more concerned about energy security than tackling climate change.
The post Doubts over European SAF rules threaten cleaner aviation hopes, investors warn appeared first on Climate Home News.
Doubts over European SAF rules threaten cleaner aviation hopes, investors warn
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