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Govt plans blending of Methanol with LPG to cut subsidy bill by 30% PDF Print E-mail

The government is considering a plan to sell LPG blended with methanol, which could help reduce its cooking gas subsidy by around a third at current prices. 

Mixing 20 per cent methanol with LPG, as is done in several countries, is estimated to bring down the cost of cooking gas for household consumption by Rs 100 a cylinder. 

The portion of methanol in the mix could be scaled up further as India enhances production of methane from coal. The financial benefits could be substantial, considering the country’s LPG subsidy bill that is estimated at more than Rs 20,000 crore in the fiscal 2019 budget. 

The government has allocated dedicated coal mines for production of methane —methanol is its liquid form — after the NITI Aayog laid out a roadmap for a methanol 
economy for the country, both in the automotive and household sectors to bring down India’s rising fuel import bill. 

A senior government official told ET that the project would be piloted by the NITI Aayog. The contours of the plan were discussed between the members of think tank and union minister Nitin Gadkari, who has been tasked to promote alternative fuels in the country. 

Currently, all LPG consumers have to buy the fuel at market price. The government, however, subsidises 12 cylinders of 14.2-kg each per household a year, transferring the subsidy amount directly to the bank account of the user. 

This subsidy amount varies from month to month depending on the changes in average international benchmark LPG rate and foreign exchange rate. When international rates move up, the government provides a higher subsidy. The subsidy per cylinder in August was Rs 291.48 per cylinder, compared with Rs 257.74 in July. 

India’s LPG consumption stands at nearly 2 mt a month, growing consistently in past 56 months on the back of the government’s push towards increasing access of LPG under Pradhan Mantri Ujjwala Yojana (PMUY). More than half the country’s demand is met with imports. 

As per the NITI Aayog’s ‘methanol economy’ roadmap, there can be an annual reduction of $100 billion in crude imports by 2030 if the country moves to 15 per cent blended fuel, both for transportation and cooking. The plan is to produce methanol from abundantly available low-quality coal and other bio resources, and also manufacture it synthetically. 

This will ensure that the rising demand for methanol could be met locally, going forward. 

 
Govt plans blending of Methanol with LPG to cut subsidy bill by 30% PDF Print E-mail

The government is considering a plan to sell LPG blended with methanol, which could help reduce its cooking gas subsidy by around a third at current prices. 

Mixing 20 per cent methanol with LPG, as is done in several countries, is estimated to bring down the cost of cooking gas for household consumption by Rs 100 a cylinder. 

The portion of methanol in the mix could be scaled up further as India enhances production of methane from coal. The financial benefits could be substantial, considering the country’s LPG subsidy bill that is estimated at more than Rs 20,000 crore in the fiscal 2019 budget. 

The government has allocated dedicated coal mines for production of methane —methanol is its liquid form — after the NITI Aayog laid out a roadmap for a methanol 
economy for the country, both in the automotive and household sectors to bring down India’s rising fuel import bill. 

A senior government official told ET that the project would be piloted by the NITI Aayog. The contours of the plan were discussed between the members of think tank and union minister Nitin Gadkari, who has been tasked to promote alternative fuels in the country. 

Currently, all LPG consumers have to buy the fuel at market price. The government, however, subsidises 12 cylinders of 14.2-kg each per household a year, transferring the subsidy amount directly to the bank account of the user. 

This subsidy amount varies from month to month depending on the changes in average international benchmark LPG rate and foreign exchange rate. When international rates move up, the government provides a higher subsidy. The subsidy per cylinder in August was Rs 291.48 per cylinder, compared with Rs 257.74 in July. 

India’s LPG consumption stands at nearly 2 mt a month, growing consistently in past 56 months on the back of the government’s push towards increasing access of LPG under Pradhan Mantri Ujjwala Yojana (PMUY). More than half the country’s demand is met with imports. 

As per the NITI Aayog’s ‘methanol economy’ roadmap, there can be an annual reduction of $100 billion in crude imports by 2030 if the country moves to 15 per cent blended fuel, both for transportation and cooking. The plan is to produce methanol from abundantly available low-quality coal and other bio resources, and also manufacture it synthetically. 

This will ensure that the rising demand for methanol could be met locally, going forward. 

 
Clean Energy Claims to Get More Scrutiny PDF Print E-mail
August 20, 2018

By Bloomberg News Editors

  Chris Martin and Emily Chasan, Bloomberg

In late May, Warren Buffett’s MidAmerican Energy Co. claimed it was about to become the first U.S. utility with 100 percent renewable energy. It was a little premature and perhaps a bit misleading.

When challenged a few weeks later, Greg Abel, a vice chairman of Berkshire Hathaway, which controls MidAmerican, admitted "Maybe we tried to simplify it too much." The claim hinged on a 2,000-megawatt wind farm that would give the utility all the power its customers consume over a year… but only while the wind is blowing. It will still operate coal plants when the winds doesn’t cooperate.

MidAmerican said its commitment to 100 percent renewable energy is real, but would not deny it would still deliver fossil-based power.

He’s not the only executive owning up to a far-fetched claim. More and more companies are being forced to admit to greenwashing—the disparaging term for gushing corporate sustainability claims with a tenuous grip on reality. 

Volkswagen AG touted “clean diesel” cars while its engineers tricked emissions tests. Walmart and Amazon settled lawsuits with California after they were accused of illegally selling plastic products that the state said were falsely labeled as biodegradable.

Amazon said it was now in compliance with state regulations. Walmart declined to comment. Volkswagen did not respond to a request for comment.

 Corporate sustainability reporting has risen dramatically over the last few years, with 85 percent of the S&P 500 index producing annual corporate responsibility documents in 2018, up from just 20 percent in 2011, according to the Governance & Accountability Institute. That’s partially due to investor demand. Assets in sustainable investment funds grew 37 percent last year, according to data tracked by Bloomberg.

Fewer than 10 percent of large companies have third-parties (such as auditors) sign off on their sustainability data, according to a report released Wednesday by the environmental advocacy group Ceres. And just a handful of the 500 companies surveyed analyze the data to determine what might be material to investors. 

But a lack of standardized sustainability data are becoming more of an issue for portfolio managers who want to use the information to build strategies. Investors such as BlackRock Inc., California State Teachers’ Retirement System, Neuberger Berman and Eaton Vance’s Calvert Research and Management, made it a priority to press companies to use standard sustainability reporting frameworks in their annual meetings with corporate boards this year.

“Companies don’t say ‘let me get right on it’ but we get wins here and there,” said John Streur, CEO of Calvert.

Frustrated investors are increasingly making their own sustainability assessments. Deutsche Bank AG’s asset-management arm, DWS Group, is using a natural disaster mapping tool to forecast the impact of climate change risks on its investment portfolios. UBS Asset Management worked with university researchers to come up with scientific methods to build comparable measures it could use to evaluate companies on climate change, air quality, water and public health.

As investors develop more sophisticated tools to measure corporate environmental stewardship, even just a slightly misleading ad campaign can stir up activists.

It’s an important distinction retailers frequently rely on claims that may be more nuanced than they initially appear. Anheuser-Busch InBev SA

, for instance, claims its beer is made 100 percent from renewable energy. That is, Budweiser, the king of beers, is fully fossil-free. Other beverage from the company, like Corona, Stella Artois, Beck’s and even Bud Light, can’t make that claim.

 

Tony Milikin, AB Inbev’s chief sustainability officer, defended the company’s labeling, pointing out they only put the label on Budweiser bottles and cans, not the other brands. “We’re working to spread clean energy to all of our brands by 2025,” he said.

The brewer last year became one of the 140 corporations to join the RE100 coalition, a coalition of companies committed to cutting out fossil fuel power.

“The 100 percent renewables [commitment] is for our energy use worldwide,” Milikin said in an July 30 interview. “That’s just the way we communicate with our customers.”

 
Crude oil prices rebound as market tensions ease PDF Print E-mail

Concerns about a broader slowdown in the global economy may have been overblown, a market analyst in Chicago said Friday.

Crude oil prices staging a comeback in early Friday trading as investors breath a sigh of relief after Turkish and other economic concerns fade. File Photo by John Angelillo/UPI | License Photo

Aug. 17 (UPI) -- Fading global trade and geopolitical concerns brought the price of crude oil back into positive territory on Friday, but look to finish the week lower.

Brent crude oil prices lost more than 2 percent on Wednesday after the U.S. government reported a build in domestic crude oil inventories. Broader economic concerns were triggered earlier in the week when U.S. President Donald Trump turned his trade ire on NATO ally Turkey.

 
Walmart wants to be environmentally friendly — and discovers just how difficult ‘sustainability’ is PDF Print E-mail

Walmart has switched its environmental focus to its suppliers, rather than appealing to customerBy

ANDREWSPICEDAVIDGRAHAM HYATT

What a difference the birth of a granddaughter can make.

For Lee Scott, who ran Walmart WMT, +1.47% from 2000 to 2009, the arrival of his granddaughter not only convinced him the threat of global warming was realbut set him on a course that altered the very DNA of the world’s largest retailer. He decided he wanted to use its size and resources to make the world an “even better place for all of us,” changing the way millions shop in the process.

In 2005, midway through his tenure, he challenged his employees: “What would it take for Walmart to be that company, at our best, all the time?”

The answer became Walmart’s sustainability program, an ambitious effort to figure out how to get its budget-conscious customers to buy more sustainable products. Of course, it was more than Scott’s granddaughter that pushed the retailer in this direction. A dismal perception among the public as well as a stagnant stock price also played roles in prodding Scott and other Walmart officials to take the company in a more environmentally aware direction.

We spent five years studying the program — speaking with Walmart’s sustainability leaders, its suppliers and others who have a stake in the company’s activities such as environmental groups and farmers. Our findings highlight both the promises and perils of what one Walmart executive optimistically termed the “democratization of sustainability.”

 

Glaciers, landfills and shopping bags

During our extensive research into the implementation of Walmart’s sustainability program, we found many executives from the CEO on down who were passionate about making the company more environmentally friendly. Before the retailer even began its program, corporate executives traversed the globe to better understand what was at stake.

We were told stories of Scott’s summer 2005 trip to the top of Mount Washington in New Hampshire, where scientists take measurements of the ice and the wind to measure the effects of climate change and air pollution. There he met with Environmental Defense Fund President Fred Krupp and some of the scientists to discuss the company’s environmental impact and what it could be doing differently. On that same trip, he also met with maple syrup farmers who explained how climate change was affecting their harvests.

Other company leaders made trips to parched cotton fields, landfills covered with Walmart shopping bags and melting Arctic glaciers, all with the aim of gaining a deeper understanding of sustainability and engaging with environmental groups, journalists and critics.

But it still wasn’t clear where all this was going until August of that year, when Hurricane Katrina hit New Orleans, causing extensive human suffering and property damage along the coast.

Walmart, in an unusual move, gave local managers wide discretion in helping communities respond and, along with a few other large retailers, worked hard to get needed supplies to the area. In the context of widely reported government failures during the crisisWalmart received praise for its actions — a far cry from the usual criticism Scott received from social and political activists.

After Katrina, Scott had an epiphany, which culminated in that speech he made in October 2005 near Walmart’s headquarters in Bentonville, Ark., during which he announced the project:

“What if we used our size and resources to make this country and this earth an even better place for all of us: customers, associates, our children and generations unborn?”

Seeking sustainability

In the speech, Scott laid out Walmart’s sustainability vision to Walmart employees and suppliers. He called for reducing waste, using more renewable energy and selling products that “sustained people and the environment.”

In a way, these goals sounded easy. Simply cut down on waste, become more efficient, convince its legions of suppliers to make more sustainable products and sell them at its “low, low prices.” Sustainability goes up, costs go down, everybody wins. But as Scott and his successors learned, this was easier said than done.

 

Some aspects were relatively straightforward. The company’s efforts to operate more efficiently produced significant environmental value — and helped its bottom line. The efficiency of its fleet of trucks doubled within a decade. Walmart has now converted 28% of the energy sources powering its stores and operations globally to renewables.

And last year, the company diverted 78% of its global waste from landfills, instead finding ways to recycle, reuse or even sell the garbage. Its goal is to eventually get to 50% renewables and zero waste in Canada, Japan, the U.K. and U.S. by 2025.

Selling products that “sustained people and the environment” was harder. By 2008, its was clear that progress was not being made as fast as the company had expected.

Walmart had a challenging job. While the market for sustainable products is large and growing, it has primarily catered to people with a lot of disposable income who can afford to pay the “goodness” premium for things like ToyotaPriuses and organic foods.

What about the majority of consumers who usually see the high price of sustainability as a barrier? Are sustainable products a luxury good only attainable by the well off?

Read: Walmart earnings: E-commerce investments could offset earnings growth

The questions and challenges of selling sustainable products escalated over time. What is a sustainable product? How could it be measured effectively and efficiently? And how could this information create value for the company and customers? Would people be willing to pay for it if it was impossible to keep the costs down?

Two interconnected challenges it faced are particularly illuminating: the lack of a sustainability standard and how to convince suppliers and customers to go along.

What’s ‘sustainable’ anyway?

Walmart leaders quickly learned that the absence of a credible sustainability standard hampered their ability to market new products.

Back then, marketing products as “sustainable” was anything goes. While a few marketing attributes, like “organic,” are verified by the U.S. Department of Agriculture, for the most part companies were free to call their products “sustainable,” “natural” or “good for you,” regardless of whether it was true or not.

The need for a standard crystallized when Walmart asked suppliers for proposals for a 2008 Earth Day promotion. It wanted to specifically promote products that were sustainable. Suppliers responded with such a vast range of claims that Walmart managers could not figure out which products to include. Examples of traits that made a product “sustainable” ranged from having “reduced” packaging material — though there was no gauge as to what it was reduced from — to the use of non-toxic ingredients or the product’s overall recyclability.

A subsequent promotion of Campbell’s soup with a green “Earth Day” label (instead of its customary red one) generated external criticism and accusations of “greenwashing.” That is, some bloggers claimed sustainability at Walmart simply meant taking existing products and putting green labels on them.

Lessons like these led Walmart to seek a way of defining what sustainable means for all its products — a mammoth scale given that the company had over 60,000 direct suppliers and a single store could sell about 142,000 products. So, in 2009, the company helped establish the Sustainability Consortium, a collaboration of retailers, suppliers, universities, environmental groups and others to create a data-driven index of sustainability.

The consortium would eventually produce a sustainability “toolkit” with key performance indicators and guidance for achieving sustainability at the product category level whether these be laundry care products, computers or beer.

Read: BlackRock is stripping Walmart, Dick’s from some of its funds over guns

Such indicators could then be used by consortium members in communications with their suppliers, typically in a sustainability scorecard that the supplier would complete. For instance, a manufacturer might be asked if it had plans for reducing harmful emissions — and if it didn’t, the thinking initially went, this type of information could eventually be passed on to consumers who could then make their own judgments.

The problem was, relying on customers didn’t work.

Focusing on suppliers, not consumers

 
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