Global alternative marine fuel markets have been a hot topic at Oslo's Nor Shipping Trade Fair, with Greek shipowner Angelicoussis Group teaming up with Chevron to explore ammonia as marine fuel, and Fortescue Metals Group planning to promote a worldwide carbon tax on shipping. SHIPPING Member states of the International Maritime Organization are aiming to finalize new greenhouse gas emissions targets and regulations in early July, which are meant to provide market signals to industry stakeholders to invest in sustainable fuels, Secretary-General Kitack Lim said June 5 at the Nor Shipping event in Oslo. The UN's shipping agency will hold the 80th session of Marine Environment Protection Committee July 3-7, where some 170 countries are expected to conclude a Revised Greenhouse Gas Strategy for the coming decades. The IMO has set targets to reduce the carbon intensity of international shipping by 40% by 2030 and to halve emissions by 2050 from 2008 levels, but environmentalists and shipping industry participants said those do not align with the Paris Agreement's climate goal to avoid climate disaster. METHANOL Methanol's application as a marine fuel continued to grow. Stena Line ordered two hybrid propulsion ships capable of running on methanol as part of its efforts in shifting to renewable fuels to meet future decarbonization targets. Trafigura suggested hydrogen has a low volumetric energy density and needs to be processed into e-methanol to be feasible for the shipping industry. Platts, part of S&P Global Commodity Insights, will launch daily production cost-based renewable methanol prices for North America, Europe and Asia, in response to market feedback and maritime industry's need for price valuations for sustainable methanol, effective June 19, Platts announced on May 31. LNG LNG bunker prices in Europe fell in line with European LNG values. The Rotterdam LNG bunker fuel price was assessed at $11.805/MMBtu June 6, down $2.405/MMBtu compared to May 5. It also hit a two-year low since June 4, 2021, when it was assessed at $11.707/MMBtu. Looking ahead, 19 vessels with alternative fuel propulsion were ordered in May, according to data from DNV's Alternative Fuels Insight (AFI). Seven LNG-fueled vessels and 12 methanol vessels were ordered in May. Platts launched one assessment for LNG bunker fuel at Port Sines on May 1, to complement its price assessments at Rotterdam, Singapore, and Jacksonville. AMMONIA Low-carbon ammonia market activity continued to be heard in May and early June, with producers bidding $400/mt for Northwest Europe renewable-power derived ammonia (green ammonia), but offering at $700/mt. This was lower than April's offers heard at around $800-1200/mt while April's bid was almost unchanged at $400-500/mt, reflecting an ongoing weaker ammonia market. Conventional ammonia for Northwest Europe spot deliveries averaged $368.60/mt in May down from April's average of $407.50/mt. Prices continue to weaken with S&P Commodity Insights assessing CFR spot for Northwest Europe at $360/mt June 7. Fortescue Metals Group plans to promote "green ammonia" as marine fuel globally and wants a worldwide carbon tax on shipping to make the zero-emission fuel commercially competitive, Executive Chairman Andrew Forrest said June 6. Many shipping professionals said ammonia generated from renewable hydrogen is a strong candidate for a future fuel, but ammonia-fueled marine engines are not expected to be technically ready until 2024-2025. "We are developing ammonia fuel, and ammonia bunkering around the world," Forrest said at the Ocean Leadership Conference in Lillestrom, part of the Nor-Shipping event. BIOFUELS In European biodiesel, the market continues to respond to allegations of fraudulently-certified imports from Asia that have put downward pressure on prices in recent months. Prices have seen some recent recovery, but buyers report lower confidence in advanced biodiesel and feedstocks. There have been reports of slowing production amid low prices and high supply, but crop-based production margins have seen some support from lower rapeseed prices. In its Transport in Transition report published last month, DNV expects the shipping energy mix to compromise 50% low- and zero-carbon fuels mainly based on renewable hydrogen. Based on DNV's study, global production capacity of sustainable biofuels could grow from 11 million mt of oil equivalent currently to 23 million mtoe by 2026 before a further increase to somewhere between 500 million mtoe and 1.3 billion mtoe by 2050. However, the shipping industry would need to consume 250 million mtoe/year by 2050 if it was to fully decarbonize primarily using biofuels, according to DNV. Platts, part of S&P Global Commodity Insights, launched a new blended bio-bunkers assessment in Singapore called Platts Bio-Bunkers B24 Singapore (ABUNA00), effective May 8, 2023. The new Singapore delivered B24 bio-bunkers calculated assessment reflects a ratio of 76% fuel oil based on Platts benchmark Marine Fuel 0.5% Bunker Dlvd Spore $/mt assesses. Platts also launched four assessments for biofuel B35 in Indonesia.

The paraxylene market will be counting on a much awaited return of Chinese downstream demand in the second half of the year, as sentiment remains sluggish on the back of capped buying interest, growing supplies and a weaker-than-expected draw of aromatics from Asia to the US for blending into gasoline. Chinese downstream demand has done little to stoke any optimism in the market despite high expectations at the start of the year. A much anticipated pull of aromatics from the US for blending into gasoline also fizzled out leading to PX prices moving lower in the run-up to the summer driving season while stuttering consumption trends in the US did little to bolster sentiment. With the driving season nearing commencement and despite a recent improvement in consumption trends in the US, there is limited scope for a last minute pull of PX and other aromatics cargoes from Asia given longer shipping times involved. Currently, margins for PX producers have remained stable with the spread between CFR Taiwan/China PX and C+F Japan naphtha holding above $350/mt though down from a record high of $483.83/mt on March 20, 2023. Market participants suggest that the spread could continue to stay perched above $350/mt for the next few months which could provide some incentive to PX producers to maintain operating rates in the second half of the year. However, growing supplies remain a concern as plant turnaround season ends and current capacities come back online though no new PX plants are expected in China for the second half of the year. So far in 2023, PetroChina's Guangdong Jieyang plant commenced operation with a capacity of 2.6 million mt/year along with CNOOC Daxie having a capacity of 1.5 million mt/year. The operating rates for these plants was fairly limited which helped cap supplies but are expected to rise steadily over the next few months. Meanwhile, CNOOC's new plant in Huizhou is expected to commence operations in June for its 1.5 million mt/year plant. The only likely support emerging so far for PX prices is the growing capacity of PTA plants in China and the fairly high operating rates for polyester manufacturers. Polyester producers in the country have raised operating rates back up to around 92% as more PTA plants come online and steadfast optimism that Chinese demand recovery is not too far away. "I think China is currently supported by intention of PTA makers to run [so] that could support PX for now," a trader in China said. Post China's re-opening after the COVID-19 induced lockdowns, market players were expecting strong demand growth especially from Q2 2023 onward. But with little of that materializing so far, the focus has now shifted to Q3 2023 though some market participants have even written off 2023. "I am actually looking at 2024 [since] 2023 is almost done," a PTA producer in China said. The early promise of China's reopening was reflected in the sharp rise in PX prices at the start of the year and vigorous buying trends visible in the market. But as reality of lackluster Chinese demand became increasingly evident, the enthusiasm began to wane. The global economic situation will also be watched, as fears of a recession continue to loom large on the horizon. Struggling economies in both US and Europe have dampened Chinese polyester exports further, weighing on sentiment. Chinese domestic consumption has shown marginal improvement but remains low for polyester finished goods so far. Furthermore, the weakness in key Chinese export markets such as the US and Europe spurred by the ongoing economic downturn have also crushed demand for polyester finished goods. Even China's economy is being cautiously watched with eyes on employment rates, domestic consumption trends and thirst for travel within the country. Market participants remain hopeful of a turnaround in the Asian giant's fortunes by Q3 while domestic gasoline consumption could surge during the upcoming long holidays in October. Weak eurozone In Europe, demand in the PX spot market is expected to remain weak, coupled with weak downstream demand from PTA and PET markets which is likely to weigh on the latter's consumption. Due to cooler-than-expected weather in May, alongside inflation eating into end-consumer purchasing power, consumption of PET bottles has remained lower than normal in the region. With PET consumption remaining sluggish within the continent, the impact will also be felt on demand for PX and PTA. Production of PX for spot consumption is also touted to remain low within Europe amid poor economics given the stiff competition faced from comparatively better priced Asian product. "Big producers won't produce until 2024" a distributor said. US' gasoline bet On the US front, PX imports found some support in the early part of 2023 on expectations of healthy blending demand in the run-up to the summer driving season. Paraxylene imports rose 80% on the year in the first quarter of 2023, according to US International Trade Commission data. PX imports totaled 270,048 mt in January-March, higher than 149,904 mt in 2022. However, the initial euphoria seemed to quickly fizzle out as weak consumption trends in the US amid bearish macroeconomic fundamentals. Furthermore, refiners in the US were also much better prepared this year compared to the previous year with a gush of imports seen last year unlikely to repeat itself. PX exports fell 24% on the year to 191,776 mt.

Observers and market participants in Mexico are concerned about possible damage from recent changes to guidelines on how the country defines clean energy. The modified guidelines allow energy generated with natural gas to be considered clean and enable some of state utility CFE's plants to compete for a market of certificates with private wind or solar plants. Mexico's Energy Regulatory Commission, the midstream regulator, issued new guidelines on what energy can be considered clean in order to allow the energy produced with steam from gas-fired combined cycle power plants to fit the description. Days later, the Energy Secretariat, or SENER, published its short-term planning document, known as PRODESEN. In it, SENER incorporated the new guidelines and added roughly 7 GW of "clean" energy generation without any new real capacity being added in Mexico. Energy certificates Although the modifications to the guidelines have been broadly seen as a way to meet the international commitments of generating at least 35% of its total energy matrix with renewable source, the changes allow combined cycle power plants to compete with solar and wind power plants for energy certificates that can be sold to companies to meet their decarbonization goals. The certificates were introduced as a way to incentivize the construction of new clean energy generation capacity and therefore excluded all facilities built previous to their introduction in 2014. Upon taking control of the government, the current administration looked to undo this regulation and tried to allow CFE to issue clean energy certificates with its hydropower plants and its nuclear plant, but the changes were blocked. These modifications are seen as a move in the same direction. "The move undermines the nature of the certificates and hurts those who already issue them as it is impossible to determine their future price or the flows," independent energy consultant Carlos Flores said. International companies with global commitments will not be able to justify these new instruments, but there is a risk that some other companies could accept the new certificates to meet their local obligations, creating a parallel market, Flores said. "This is clearly a way to benefit one company, and one company only: CFE," said Alberto Campos, senior adviser at consultancy Edison Energy. This reduces the incentives for private companies to invest in renewable energy plants as wind and solar plants will not only have to compete with each other, but also with combined cycles, Campos said. "It's just another reason for international companies not to consider Mexico," Campos said. Most observers told S&P Global they believe that just like all the modifications the country has seen in the five years of the current administration, these changes will end up in court and be suspended. International commitments The changes may end up in court, and the market for energy certificates may be unchanged, but some observers worry Mexico's reputation may be at stake, as the country is using the metrics to claim the country is meeting its international commitments. "Many people are angry and are already working to fight it in court" said Angie Soto, CEO of Nexus Energy, a power supplier for industrial users. The complaints will come from power generators and industry associations as well as environmental organizations like Greenpeace, Soto said. "It is most worrisome that Mexico will meet its goals, with a lie, by cheating," she said. "The question is: Will Mexico get away with it?"

Saif Humaid al Falasi joined the Emirates National Oil Co. Group as general manager in 2008 after 25 years with the Abu Dhabi National Oil Co. He became ENOC Group CEO in March 2015. He also serves as a member of several entities developing the UAE's energy policies, including the Dubai Supreme Council of Energy, the Fuel Price Committee in Abu Dhabi and the Dubai Future Council of Energy. Under Falasi's leadership, ENOC Group grew its refinery capacity by 50% to 213,000 b/d through an expansion project worth over $1 billion completed in 2019. The expanded Jebel Ali facility produces LPG, gasoline blendstock, jet fuel, diesel and fuel oil that meet Euro 5 specifications. ENOC currently supplies jet fuel to more than 200 airports across 22 countries. It operates 185 service stations in the UAE and more than 20 in Saudi Arabia. It also has a storage capacity of 6.68 million cu m to hold petroleum, chemicals and natural gas in the UAE, Morocco, Saudi Arabia, Singapore and Djibouti. Falasi spoke to S&P Global Commodity Insights Editorial Lead Claudia Carpenter about several projects that are underway as he steers ENOC to help the UAE reach net zero by 2050. What are some of the key projects ENOC is working on to help the UAE achieve its 2050 net-zero target? Saif Humaid al Falasi Most recently, ENOC signed a memorandum of understanding with DEWA (Dubai Electricity and Water Authority) to develop and operate a joint integrated pilot project for the use of hydrogen in mobility. Green hydrogen is an environmentally friendly energy source, which represents one of the pillars of a sustainable future. We also participated in an Emirates flight demonstration powered by 100% sustainable aviation fuel (SAF) by securing, blending and loading it. Furthermore, we invested significantly in the Service Station of the Future, which incorporates multiple sources of energy and harnesses the power of renewables. Inspired by the ghaf tree, a carbon fiber canopy running on wind energy and sporting the deployment of various smart technologies, the first-of-its-kind in the world service station — which is now open to the public at Expo City Dubai — symbolizes the strength of innovation and indicates how sustainability and technology are intrinsic to the future of energy and a greener world. The group has also prioritized sustainability within its own operations. In 2022 alone, ENOC Group achieved Dirham 8.6 million ($2.34 million) in savings from energy and resource management (E&RM) projects. The group's E&RM projects include solar photovoltaic panel implementation across its retail sites and various operations, in addition to LED retrofits, and the utilization of innovative sustainable solutions such as evaporative cooling, vapor and heat recovery systems. ENOC Group has also banned single-use plastics across its operations as well as in its head office. What is next after the Emirates flight demonstration using SAF in January? We participated in this achievement by securing and blending SAF, which will help to secure this type of fuel in the UAE and the rest of the world in the future. Investment in SAF in the years ahead will be key to supporting the global aviation industry to meet its energy transition goals. The use of SAF can result in up to an 80% reduction in the life cycle of carbon dioxide emissions and is widely considered in the global aviation industry as the most significant contributor to reaching its net-zero goal by 2050. What is the status of the jet fuel pipeline to Dubai's Al Maktoum International Airport? In 2022, we completed the construction of a 16.2 km jet fuel pipeline linking the Horizon Emirates Jebel Ali Petroleum storage terminal in Jebel Ali to Al Maktoum International Airport. The pipeline, which was safely and successfully commissioned in July 2022, will carry 2,000 cu m/hour of jet fuel to Al Maktoum and will meet the demand for jet fuel at Dubai airports up until 2050. Do you expect ENOC to be a part of Dubai's plans to sell shares in some government holdings? At the moment we are not exploring any potential initial public offering but are open to the idea of exploring it in the future. Has ENOC had to change the way it does business because of the energy transition? Over the years, ENOC Group has supported the UAE's strategy to diversify its energy mix by combining renewable and clean energy sources that are visible across numerous service stations that are powered by solar energy today. What is your outlook on fuel demand considering the growth in electric cars? In the short term, the impact on fuel demand may be relatively small, as electric cars still represent a small portion of the overall vehicle market. However, as electric cars become more affordable and more widely available, their market share is expected to increase, leading to a considerable decline in demand for gasoline and diesel. This does not come as a surprise as we are witnessing a global shift from traditional fossil fuel-based energy sources such as coal, oil and gas toward cleaner and more sustainable energy sources. These changes are expected to create significant opportunities for businesses and investors, as well as promote greater energy security and help to reduce energy poverty in developing countries. The energy transition is not without challenges. However, it presents significant opportunities for energy providers, such as ENOC, to diversify their portfolios, innovate and collaborate with other stakeholders to create a more sustainable energy future. This interview was first published in the May 2023 edition of Commodity Insights Magazine . Click here to download the magazine.

The Ministry of Power (MoP) released a draft on the Carbon Credit Trading Scheme (CCTS) on March 27, 2023, with the aim to establish a framework for the Indian carbon market (ICM). The ICM derives its legislative foundation from the Amendments to the 2001 Energy Conservation Act, adopted by the Indian legislature in December 2022. Prior to this, a more comprehensive draft carbon market policy document was formulated by the Bureau of Energy Efficiency (BEE) in October 2022. This aimed at define the scope design and other operational details of the proposed hybrid (compliance cum voluntary) carbon market [1] . The framework document goes a long way in clarifying the roles and relationships of various actors envisaged, such as the governing body, administrator, regulator, registry, verifiers, exchanges, and technical committees. It proposes to set up a governing body, named the ICM Governing Board (ICMGB) which will be co-chaired by secretaries of the Ministry of Environment, Forests and Climate Change (MoEFCC) and the Ministry of Power (MoP) and include members of several other key ministries that are linked to greenhouse gas (GHG) mitigation aiming to achieve India's nationally determined contributions (NDCs). The ICMGB will play a key role in giving direction to the ICM, framing norms, and providing oversight. BEE will be the ICM administrator and will accredit carbon verifiers (ACVs) responsible for measuring, reporting and verification, and induct technical committees who will provide sectoral guidance on abatement potentials and costs. The registry function will be handled by the Grid Controller of India which will coordinate with market players and exchanges, receiving periodic guidance from the ICM administrator. The regulatory duties will be fulfilled by the Central Electricity Regulatory Commission (CERC), which will be responsible for balancing market power and protecting market integrity. It will also select and govern the carbon trading exchanges. Our assessment of the framework document reveals certain areas where further enhancements, guidance, and transparency will strengthen the emerging domestic carbon market ecosystem: Increasing participation within the governing body and through experienced knowledge council(s): In its present form, the governing body has some notable exceptions such as Agriculture, Industries and Commerce, and Small and Medium Enterprises. Others such as mining, housing and urban affairs and transport will also be useful to include in its deliberations. Similarly, the scope of technical committees could be broadened to include a knowledge council consisting of market practitioners and advisory agencies already established in this space. Improving coordination with nationally determined contributions and between the federal and state governments: The CCTS framework omits the relationship between the ICM governance board and the Apex Committee for the Implementation of Paris Agreement (AIPA), as well as the Nationally Designated Authority for the Implementation of Article VI of the Paris Agreement (NDAIAPA) which replaces the erstwhile National CDM Authority of India [2] . While center-state coordination is critical for the ICM, the role of State Designated Agencies (SDAs) is also missing in the draft. Clarifying norms across and among compliance and voluntary schemes: The framework does not discuss the shape and form, the Perform, Achieve and Trade (PAT) and Renewable Energy Certificates (RECs)— the two existing compliance systems— will take after the establishment of the ICM. The norms and agencies responsible to facilitate interactions between the voluntary and compliance segment are also not clarified. Incentivizing foreign purchases for domestic carbon credits: There is but one mention of the role of ICMGB to specify the guidance for sale of carbon credits to international entities. However, any hints or specifics around timelines or phase for registration, criteria for foreign project developers, mandates or incentives for Indian projects registered on international voluntary platforms, and coordination mechanisms with such platforms and exchanges are missing. Foreign participation is key for enhancing liquidity on domestic exchanges and generating demand for Indian credits. Therefore, such norms and responsible agencies must be specified sooner rather than later. Customers can read the full report here or log on to our Connect platform to view our full range of offerings on India's carbon market and related topics. Past reports in this series include: India finalizes list of Paris Agreement Article 6.2-eligible projects, revises implementation plan for national emissions trading scheme India prepares national carbon market under Energy Conservation (Amendment) Act to deliver on NDC goal; future carbon price rise limited by plans to increase supply Impact of carbon credit export restrictions on India's global carbon trading revenues Webinar: Navigating the trade-offs and implementing the learnings for India's future carbon market In the race to global net zero, what are the lessons for India's carbon market? For more information on this research and its related service offering, please visit the Asia Pacific Regional Integrated Service page.

In this report, S&P Global Commodity Insights and S&P Dow Jones Indices examine the recent growth in iron ore derivatives trading, increasing market transparency and their interface with spot price assessments for the physical market. Iron ore as an investment tool from a financial perspective is also considered. LAUNCH REPORT

With the Russia-Ukraine war still ongoing, resulting in a host of sanctions on Russia has taken its toll on the shipping industry. Modified several times over the period of last 15 months, the sanctions have caused the global tankers to splinter into a two-tier market. READ MORE

The plastics recycling industry in the Middle East is slowly taking form, with the spotlight bring on circular economy which seems to be driving the conversation around sustainability within the chemicals industry. Unravel what the government and government affiliated agencies are centering their efforts in in order to eliminate landfill usage and accelerate the process of waste management. FIND OUT MORE

The Middle East is witnessing a wave of low-carbon projects. The chemical and energy companies in the region, are making a hard drive to meet their government-prescribed net-zero targets by 2050. Learn more about the petrodollar funded projects - including ammonia, green and blue hydrogen and their initiatives towards energy transition in this S&P Global Commodity Insights piece here. READ MORE

Putting a price on CO2 is the surest way to drive the energy transition, with a growing number of countries adopting emissions trading systems, carbon taxes or a combination of both. Now global carbon markets are moving beyond national and regional compliance arenas, with significant volumes being traded in voluntary carbon credits. LEARN MORE

Net-zero targets in the energy-rich Persian Gulf region. While five countries of the region including Saudi Arabia and the UAE look towards hitting net-zero goals by 2050, they have not deterred from ramping up their oil and gas capacities. Could this be a potential hindrance preventing the regional energy transition leaders from achieving their green credentials? FIND OUT MORE

An abundant fuel, with disruptive potential Low-carbon hydrogen is poised to play a key role in hard-to-abate energy applications. For global hydrogen markets to emerge, however, massive scale-up is needed across production pathways using both renewable and fossil-based feedstocks, and transport costs need to come down. LEARN MORE

From humble beginnings, the Middle East's refining industry has grown into a global player, strategically located between major international markets in Asia, Africa and Europe. At a time when refineries in Europe and the US are starved of investment, Middle East operators are going through a dynamic period of expansion to corner new opportunities opening up from changing flows in global trade. LAUNCH REPORT

Europe is experiencing a wave of investment in battery recycling capacity as automakers and battery manufacturers seek to offset the anticipated global shortfall in critical metals such as lithium, nickel, cobalt and copper. With around 50 new battery production plants set to enter production by 2030, many European battery manufacturers are adopting a holistic approach across the entire battery technology chain to ensure they have the materials required to meet an anticipated surge in demand. In addition to securing offtake agreements and reducing the material intensity of their battery chemistries, many European battery producers and automakers are seeking to cut resource consumption and establish a closed-loop recycling of battery raw materials. When batteries are manufactured or reach their end of life, production offcuts or used batteries can be collected, dismantled, shredded and processed to produce black mass, from which critical metals including lithium, nickel, cobalt and manganese can be extracted. The production of black mass has become increasingly important as a supplement to virgin material supply and is critical to strengthening Europe's battery supply chains. Commissioned in May 2022, the Hydrovolt battery recycling facility, a joint venture between Norway-based aluminum producer Norsk Hydro and Sweden-based battery manufacturer Northvolt, in Fredrikstad, Norway is currently Europe's largest, capable of processing can process 12,000 mt/year of EV battery packs equivalent to around 25,000 electric vehicle batteries. Hydrovolt said it is considering expanding its European recycling capacity, with a long-term target to recycle approximately 70,000 tons of battery packs by 2025 and 300,000 tons of battery packs by 2030, equivalent to approximately 150,000 EV batteries in 2025 and 500,000 in 2030. "The metals used in battery production are finite, but by substituting raw materials mined from the Earth with recycled materials, we can not only cut the carbon footprint of batteries but enable the sustainable long-term use of li-ion battery technology," Northvolt Chief Environmental Officer Emma Nehrenheim said. Europe's other major recycling facilities include Umicore's battery recycling plant in Hoboken, Belgium, capable of processing 7,000 mt/year of lithium-ion batteries and battery production scrap, equivalent to approximately 35,000 electric vehicle batteries. Building upon this capacity, Umicore recently announced plans to construct a 150,000 mt/year battery recycling plant in Europe by 2026. "This will be the biggest battery recycling plant in Europe and will incorporate proprietary metal extraction technologies developed by Umicore's research and engineering teams," it said. In addition, Fortum Battery Recycling, a subsidiary of European energy company Fortum, announced on April 27 that it had started commercial operations at its new 3,000 mt/year battery metal recycling facility in Harjavalta, Finland. Harjavalta is the location of a Norilsk refinery, from where it supplies BASF's gigafactory and the two companies have signed a letter of intent with Fortum to create a battery recycling cluster. Europe's battery recycling industry is set to expand further with more than a dozen additional projects earmarked for completion before the end of 2026. Most notably, on May 9 Glencore and Li-Cycle announced plans to build a battery recycling plant in Sardinia, Italy capable of processing approximately 50,000-70,000 mt/year of black mass with commissioning expected to commence around late 2026 or early 2027. Li-Cycle is developing three additional recycling facilities in Europe as the company seeks to replicate its successful North American model with a strategically located pre-processing spoke network supplying a centralized post-processing hub. In support of this strategy, the company plans to commission a 30,000 mt/year lithium-ion battery recycling spoke in Germany's Magdeburg region by mid-2023 with a 10,000 mt/year lithium-ion battery recycling facility in Harnes, France due to start operations in 2024. "Li-Cycle's expansion in Europe aligns with our modular rollout strategy, as we replicate our successful North American model, which mirrors customer demand and commercial contracting," said Li-Cycle co-founder and Executive Chair, Tim Johnston. In total, the current pipeline of European battery recycling projects suggests approximately 67,000 mt/year of new capacity set to join the market by the end of 2023, equivalent to the processing and recycling of more than 300,000 EV batteries/year. The accelerating rate of expansion in European battery recycling capacity comes amid supply concerns and soaring demand projections. The global lithium market alone could see a deficit of up to 220,000mt by 2030 even if all projects in development are executed on time, according to forecasts released by S&P Global Market Intelligence in January 2022. While the black mass market is also growing exponentially it remains unclear exactly how much is going to be open on the free market for trading, although large raw materials traders have already entered in to the trading space. Platts, part of S&P Global Commodity Insights, launched nine daily Black Mass price assessments on April 17 aimed at bringing greater transparency to pricing of the battery raw materials market. The initial assessment on the black mass payables for Ni-Co black mass EXW Europe, cobalt payables were assessed at 60% basis European cobalt metal 99.8% on May 16 unchanged from the previous week. Nickel payables were assessed at 65% basis LME nickel on May 16 unchanged on the week. The EXW lithium payables were assessed flat at 0% on May 16 and have been at this level since the price was launched on April 17. Any value for the lithium has been added on to either the cobalt or nickel price and not yet price on its own value. The reason for this is because pyrometallurgical plants do not have the capabilities to recover lithium and therefore it essentially treated as a waste and has no value. Hydrometallurgical plants have the capabilities to recover the lithium component and therefore black mass sellers charge for its content. While much of the scrap and end of life batteries in the European market will be high-nickel cathodes much of the investments are focused on the hydrometallurgy methods, so the value of recovering the lithium could be exponential for recyclers. Amid a looming global deficit for critical raw materials like lithium, cobalt, nickel and copper, the expansion of the black mass market is set to accelerate as battery manufactures seek to strengthening their critical minerals supply and reducing the carbon footprint of their supply chains.

The S&P Global Commodity Insights India CEO Series is a compilation of exclusive interviews by Asia Energy Editor Sambit Mohanty with top government and industry leaders in India's oil and gas sector. Get insights on how those companies are planning to strike a balance between traditional and new businesses at a time when energy transition is changing the industry's landscape, while geopolitical turbulence is throwing up new challenges. India's promising growth outlook for oil and gas demand in coming years is increasingly opening up opportunities for private and foreign players in the upstream sector, but they will need support through a more investor-friendly policy framework, Cairn Oil & Gas CEO Nick Walker told S&P Global Commodity Insights in an exclusive interview. He said that India, which imports 85% of its oil requirements, had rich hydrocarbon potential, and oil and gas would continue to play a critical role in meeting the country's energy needs and supporting economic growth despite the increased talk of energy transition altering the energy landscape. "In the near term, India's oil and gas demand will get a boost due to population growth as well as urbanization and economic development. To cater to this demand, investment in exploration and production of new resources, as well as in the infrastructure required to support transportation and distribution, will be necessary," Walker said. "But in the longer term, while India is likely to see a shift towards a more diversified energy mix, oil and gas will continue to play an important role in meeting the country's energy self-dependency push," he added. Cairn, part of Vedanta Resources, currently contributes about 25% to India's domestic oil and gas production. It has set a target to raise its share to 50% as the upstream investment climate has improved, with many procedural complexities having been sorted in the upstream oil & gas sector by the government. But more on the policy front still needs to be done if New Delhi wants to achieve its ambitions to reduce energy imports to 50% of its energy basket by 2030. "For this journey to be successful, attracting correct investments and foreign players will be important. And for that, the ease of doing business in the oil and gas sector will be crucial," Walker said. He added that in addition to exploration, even production processes need further simplification, while levies and taxes on the upstream sectors need to come down. "It ultimately boils down to creating a more conducive policy environment that prioritizes hydrocarbon expansion. The government has done well to reduce tax burdens, introduce production-linked incentive schemes and more. I strongly believe similar initiatives for the oil and gas sector could play a vital role in attracting large-scale foreign investments," Walker said. Sky is the limit Walker said that India had huge untapped oil and gas resource potential; in existing basins yet-to-find resources are estimated at 30 billion barrels of oil equivalent and including frontier un-explored areas, this figure could be significantly greater. "In moving towards actualizing this, a crucial component will be to incentivize current producing blocks for ramping up production through the deployment of enhanced recovery techniques," Walker said. Cairn has interest in a total of 62 blocks in India. In 2004, Cairn made the largest onshore discovery in more than two decades in Mangala, Rajasthan. In its 20 years of operations, Cairn has opened four frontier basins with numerous discoveries and 38 in Rajasthan alone, which is its largest producing onshore oil block. The company's current total production capacity stands at 147,000 boe/d, with the Rajasthan block contributing 120,000 boe/d, or nearly 82% of total production. Cumulatively, the block has produced over 700 million boe in the last decade. Cairn said in October 2022 that it signed a 10-year production sharing contract for its oil and gas block exploration works in the western state of Rajasthan with the Indian petroleum and natural gas ministry. The contract extension would be applicable from May 2020. According to S&P Global, the Rajasthan assets are the company's main cash cow and positions the company to remain highly liquids-weighted as compared to a general E&P-wide push toward gas-weighted assets. Cairn's portfolio is an attractive dollar hedge for the government. "Although the Rajasthan block has been producing for 14 years, we have until now produced 12% of hydrocarbons in place. And that's because a lot of the untapped resources are in more difficult reservoirs and unconventional shale targets," Walker said, adding that new technologies would help to unlock the opportunities in a profitable way. Realistic carbon goals Walker said that there was a need to fully support the transition to lower carbon sources of energy and produce fossil fuels in a more responsible manner, but the country must be realistic about the pace at which this can unfold. "For India especially, fossil fuels will remain important. Cairn's skill and focus is as an oil and gas explorer and producer and that is what we will continue to focus on to meet India's energy needs, but it is important that we do that in a responsible way," Walker said. He added that Carin had set a target to become net carbon zero by 2050 in the production of its barrels. "We are taking real action to achieve this -- for example, meeting our energy needs though investment in renewables. It is our aim to accelerate these initiatives as much as possible." Cairn not only operates the world's longest continuously heated and insulated pipeline and the biggest enhanced oil recovery polymer flood project, it is also working on the longest horizontal well in India, as well as some of the biggest jet-pump operations, Walker said. "We are constantly on the lookout for innovative technologies, great ideas that will help us find and develop new resources as well as state-of-the-art innovations that will improve efficiency and make our operations more cost-effective," Walker said. More from the series: Essar says for upstream investments to flow, it's now or never Oil India sees time ripe for upstream sector to bask in glow of high oil prices IOC's refining expansion landscape will reflect a shade of green India's crude strategy a cushion for both global, domestic prices, says Puri