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Two north of England sites selected for multibillion-pound carbon capture plan

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Two north of England sites selected for multibillion-pound carbon capture plan

The UK government has selected two sites in the north of England to develop multibillion-pound carbon capture projects by the middle of the decade as part of its fast-track scheme to cut 20-30m tonnes of CO2 a year from heavy industry by 2030.

Ministers gave the green light to the East Coast Cluster, which plans to capture and store emissions produced across the Humber and Teesside, and the HyNet North West project in Liverpool Bay, which will also produce low carbon hydrogen from fossil gas.

The East Coast Cluster is backed by the oil companies BP and Equinor, together with the energy firms Drax and SSE, and hopes to cut up to 27m tonnes of CO2 a year by 2030. The HyNet project, backed by the Italian oil company Eni and Progressive Energy, plans to reduce CO2 emissions by 10m tonnes a year by the end of the decade.

The projects, which saw off competition from three rivals, are the first to move ahead with the government’s support since ministers scrapped a £1bn programme six years ago. If they can prove they offer energy billpayers good value for money then they will qualify for support through the new £1bn carbon capture fund.

Greg Hands, the energy minister, told parliament on Tuesday that carbon capture would be “essential to meeting our net zero ambitions” and would be “an exciting new industry to capture the carbon we continue to emit and revitalise the birthplaces of the first Industrial Revolution”.

He said the “new major infrastructure projects for a new sector of the economy” would be a “significant undertaking”, and that there were “significant risks” to delivering them by the mid-2020s.

The government has also earmarked a carbon capture cluster on the east coast of Scotland – that includes the Acorn carbon capture and storage project based north of Aberdeen – as a “reserve cluster” that will be eligible for the funds if one of the other projects fails.

The government vowed to bring forward two industrial carbon capture clusters by the mid-2020s, and four by 2030, to help capture the emissions produced by factories and chemical plants before storing the carbon away permanently where it cannot contribute to the heating of the Earth’s atmosphere.

Carbon capture is also expected to play a key role in producing “clean-burning” hydrogen from fossil gas. Hydrogen can be extracted from gas and burned without emissions by gas power plants, heavy industry or even in homes. But the process of producing hydrogen releases carbon emissions into the air unless it is captured at the source and stored.

The plans are part of a flurry of long-awaited green commitments from the government in the run-up to the Cop26 climate talks in Glasgow in the next two weeks. It has also put forward plans to help cut emissions from home heating alongside a wide-ranging plan to reach net zero across the economy.

Ruth Herbert, the chief executive of the Carbon Capture and Storage Association, said the two frontrunner projects would “showcase the breadth of applications” for carbon capture, but urged the government to set out a clear plan for how the technology would be scaled up in coming decades to meet carbon targets.

“Ahead of next week’s spending review, we are calling for the government to introduce a delivery plan for carbon capture, utilisation and storage – setting annual spending budgets over the next decade to give the industry certainty to invest in projects now,” she said.

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Naira depreciates further to N614/$ at parallel market

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Naira depreciates further to N614/$ at parallel market

The Nigerian naira has dropped to N614 against the dollar at the parallel section of the foreign exchange market.

The figure signifies a depreciation of N7 or 1.2 percent compared to the N607 it traded last two weeks.

Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke to TheCable in Lagos on Tuesday, said they purchase the greenback at N608/$, make a gain of N6, and then sell at N614.

At the official market, the naira also depreciated by 0.21 percent to close at N421/$ on Monday, according to information obtained from FMDQ OTC Securities Exchange — a platform that oversees official foreign-exchange trading.

Nigeria operates multiple exchange rate windows ranging from the importers and exporters window (I&E) window, where forex is traded between exporters, investors, and purchasers of forex, the SMEIS window where forex is sold to importers, and others.

International organisations such as the World Bank and the International Monetary Fund (IMF) have constantly advised the Central Bank of Nigeria (CBN) to unify the official and parallel market exchange rates.

But Godwin Emefiele, the CBN governor, had said that despite advice offered by IMF and the World Bank, developing economies such as Nigeria had the liberty of adopting “homegrown solutions to their economic problems.

According to him, the managed floating exchange rate, which allows the CBN to intervene in the market when there is a supply shock, would be in place as long as supply exceeds demand.

“They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself,” he had said.

“When you allow that to happen, you will have an uncontrollable spiral on the naira.

“But what managed float means is that we have some measures in place to help control the spiral.”

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

These are challenging times for the federal and state governments as one major source of income to the federation account seems to be totally cut off.

On Monday, The National Petroleum Company Limited (NNPC) revealed it failed to remit monies to the federation account in May 2022 despite making N470.61 billion.

This is the fifth straight month NNPC has failed to credit the federal account while exporting crude at an average price of $100 per barrel.

Details of the June FAAC report obtained by The Harmattan News showed NNPC since the start of the year made N1.897 trillion, over N234.1 billion more than the expected revenue.

Sadly, however, NNPC said all the revenue had gone into various expenditure which includes petrol subsidy, oil search, Pipeline Security & Maintenance cost, National Domestic Gas Development and Nigeria Morocco Pipeline cost among others.

As expected, the bulk of the expenditure, N1.27 trillion, went toward recovery (also known as petrol subsidy).

In fact, NNPC said it has budgeted another N617 billion for petrol subsidy in June.

The report reads: “The Value Shortfall on the importation of PMS recovered from May 2022 proceeds is N327,065,907,048.06 while the outstanding balance carried forward is N617bn .”

“The estimated Value Shortfall of N845,152,863,012.97bn (consisting of arrears of N617bn plus estimated May 2022

Value Short Fall of N227,721,200,478.23) is to be recovered from June 2022 proceed due for sharing at the July 2022 FAAC Meeting,” it added.

The development means states have a tough road ahead and will have to look inwards to cover for the drop in federal allocations.

Already, some states have announced plans to slash workers’ salaries over dwindling income.

Kano Sate has already announced plans to slash workers’ salaries, following in the foot steps of the Ekiti State government that announced civil servants’ and political appointees’ salaries will be slashed in response to the present economic reality in the country.

Ekiti went further to suspend minimum wage implementation with no date of resumptions.

The Harmattan News had recently reported that pension contribution from governments dropped to a 16-year low in the first quarter of 2022.

From recent developments, it is more likely the figure will tank further.

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Nigerian govt to auction N225bn bond as search for funds continues

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Nigerian govt to auction N225bn bond as search for funds continues

Federal government bonds worth N225 billion would be auctioned today, Monday, June 20, 2022, by the Debt Management Office (DMO) at the primary market.

The debt instrument is being sold by the central government to raise funds to finance the 2022 budget deficit and in today’s exercise, the DMO is offering the notes in three tenors.

The debt office is anticipated to sell the FGN bonds at double digits to make the asset class more attractive to investors.

In a circular published on its website and obtained by The Harmattan News, all three maturities are re-opening, meaning they are from the previously sold bonds.

The circular noted that N75 billion worth of a 10-year bond with maturity in 2025 would be offered for sale at the auction. Another N75 billion worth of a 10-year note maturing in 2032 is up for grabs and N75 billion worth of a 20-year instrument with maturity in 2042 would be sold.

Intending subscribers would be expected to reach out to primary dealer market makers to buy the bonds for N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

The interest would be paid by the government semi-annually, while the bullet repayment will be done on the maturity date.

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