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THE INDIA WORKAROUND? The European Union has ramped up its diesel imports and purchases of refined petroleum products from India in 2023— raising the concern that the bloc is undermining its sanctions efforts against Russia and propping up the Kremlin through third-country purchases.
What’s happening: Europe’s imports of refined petroleum products from India have soared in the past year, as the bloc seeks to find new suppliers and divest from Russian fossil fuels.
India has emerged to fill this void, and surpassed Saudi Arabia this year to become the EU’s largest supplier of refined petroleum products.
This is concerning, because India’s refining boom is due almost entirely to its increase of Russian crude supplies: India has purchased Russian crude at a deep discount in the months since Western bans on Russian fossil fuels and the G-7-backed price cap came into force. Russia is now India’s largest crude supplier, with its sales to the country jumping tenfold last year alone.
Following Russia’s invasion of Ukraine, India seized on the rerouting of global oil and refined oil markets to purchase Russian crude, refine it, and sell back to the EU at a premium.
EU leaders have urged member states to crack down on these so-called “deceptive practices,” including third countries that sell refined Russian products back to the bloc, though no formal actions have been taken.
In the meantime, EU imports are only increasing: The EU imported roughly 333,000 barrels per day of diesel from Indian refiners in September, according to shipping data published this week by Vortexa.That’s a 47% spike from the previous month, and a whopping 57% jump compared to its imports from India last September.
…And Russia could be profiting directly from some of these sales: Russian state-owned oil giant Rosneft owns a 49% minority stake in the Indian refining company Nayara Energy—a setup that allows it to claw back at least some of the profits for the refined product sales as well.
In fact, one could make the argument that the EU has not so much reduced its use of Russian oil so much as it has redrawn the map to secure supplies from outside buyers reliant on Russian crude.
This was largely the conclusion of a recent Transport & Environment report, which found that bloc’s imports of refined products from India and China have increased by 70% and 13% year-on-year, respectively.
Critics say that purchasing diesel or gas refined from Russian oil still fills Vladimir Putin’s war chest, and EU foreign policy chief Josep Borrell has described the transactions as a potential sanctions violation.
While it’s “understandable” India wants to buy more discounted Russian crude, he told the Financial Times, the EU must also act to stop its third-country purchases propping up the Kremlin, including by targeting buyers of Indian refined fuels believed to be derived from Russian crude.
“If diesel or gasoline is entering Europe … coming from India and being produced with Russian oil, that is certainly a circumvention of sanctions and member states have to take measures,” Borrell told the outlet.
Bigger picture: This is not the first time the EU has sparked criticism for purchasing Russian fossil fuels (either directly or indirectly) in recent months.
The EU has ramped up its purchases of Russian liquified natural gas, in part to make up for the lost piped gas supplies from Nord Stream 1, which Russia throttled (and then cut off completely) last summer. The bloc imported roughly $5.78 billion in Russian LNG in the first seven months of this year, with purchases climbing by a whopping 40% compared to the same period in 2021.
The trend shows no signs of slowing, despite the long-term nature of most LNG contracts (which are often struck for 10- to 20-year periods), and the EU’s looming ban on Russian LNG, which will come into force in 2027.
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INTERIOR DEPUTY SEC DEPARTS FROM ROLE: Interior Deputy Secretary Tommy Beaudreau is stepping down from his post after serving more than two years in his position.
The agency’s press release did not disclose why Beaudreau was leaving, but stated that the official will depart from his role at the end of October.
Beaudreau said he will “always cherish the opportunities I’ve had to work with the best career staff in federal service and diverse communities across the United States to help figure out solutions to some of the most challenging problems facing our country.”
Beaudreau has been considered a longtime Interior Department and Washington insider who has been integral to implementing President Joe Biden’s agenda, working on issues that span from protecting the Colorado River system to standing up clean energy infrastructure.
Beaudreau previously served at Interior during the Obama administration as the first director of the Bureau of Ocean Energy Management, responsible for regulations of oil and gas development in the Arctic Ocean. From 2014 until the end of the Obama administration in 2016, he served as the acting assistant secretary for land and minerals management, and as chief of staff to then-Interior Secretary Sally Jewell.
OHIO LAWMAKERS LOOK TO THWART STATE ELECTRIC VEHICLE MANDATES: Lawmakers in Ohio are considering legislation that could bar the state EPA from blocking or restricting the sale of ICE-powered vehicles amid the nation’s broader push for EV adoption.
The Republican-led House Bill 201 was introduced in committee this week, and lawmakers voted yesterday to send it to the floor for a full vote.
One of the bill’s co-sponsors, Rep. Brett Hudson Hillyer, told lawmakers that the legislation would function similar to a recently passed bill in the state that blocks local governments from banning natural gas hookups in new construction.
State Republicans have sought to push back against the Biden administration’s clean energy push, including efforts to phase out certain fossil-fueled household appliances and slash transportation and vehicle emissions—including calling on the administration yesterday to back off its emissions standards and encourage “consumer choice” rather than “government-preferred vehicle technology mandates.” Read more from The Plain Dealer here.
LG ENERGY AND TOYOTA SIGN BATTERY AGREEMENT: South Korean Battery Company LG Energy Solution and Toyota Motor North America announced yesterday that they signed a long-term supply agreement for lithium-ion battery modules that will be used to assemble Toyota battery electric vehicles in the U.S.
According to a press statement, LG energy Solution will supply automotive battery modules to Toyota starting from 2025 under the recently signed contract, with an annual capacity of 20 gigawatt hours. The battery modules will be manufactured in LG Energy Solution’s Michigan facility.
The contract will help support Toyota’s expanding line of Battery Electric Vehicles – and will also aim to further Toyota’s vehicle electrification initiatives, as it looks to offer 30 BEV models globally across Toyota and Lexus brand nameplates and produce up to 3.5 billion BEVS annually by 2030.
Ted Ogawa, president and CEO of Toyota Motor North America, said that having “secure supplies of lithium-ion batteries at scale with a long-term relationship to support Toyota’s multi-pathway approach and growth plans for BEVs in North America is critical to achieve our manufacturing and carbon reduction plans.”
EPA PROBES ALABAMA FOR RACIAL DISCRIMINATION IN SEWAGE FUNDS: The Environmental Protection Agency will investigate possible racial discrimination in Alabama’s management of funds for bolstering sewage infrastructure.
As reported by The Hill, the Biden administration said Wednesday it will look into whether the state excludes residents from participating in its water infrastructure program or denies them benefits on the basis of race. Civil rights and environmental groups allege that Alabama discriminates against black residents through the management of clean water funds.
Their complaint states that Alabama makes it “impossible for people who need help with onsite sanitation to access this money” — a problem that “disproportionately harm[s] Alabama’s Black residents.”
Specifically, they say that Alabama’s Department of Environmental Management prohibits access to the funds through various methods, including not considering financial need of the applicant, conducting “inadequate” outreach to disadvantaged communities and giving few points in its scoring system to people who use at-home sewer systems rather than public systems. In doing so, the groups argue that the state perpetuates harm caused by sewage exposure and denies “Black residents an equal opportunity to compete for federal funding.” More about that here.
GOLDEN STATE WEIGHS USE OF CATASTROPHE MODELS: California is signaling the state will allow insurance companies to consider climate change when calculating premiums, marking a significant shift in state policy as underwriters reduce their coverage following natural disasters that fueled major economic losses.
As E&E reports, State Insurance Commissioner Ricardo Lara plans to rewrite insurance rules to allow wider use of catastrophe models in California for the first time in 35 years. The change is meant to incentivize insurers to expand their coverage to homeowners in areas that are facing extreme weather.
This move comes as major insurers, such as State Farm, have stopped issuing new policies in California and other states that have faced an increasing amount of natural disasters.
California law mostly bars the use of catastrophe models in setting insurance rates under Proposition 103, a state ballot measure passed in 1988 that required insurers to set premiums based on the last 20 years of losses. But in recent years, seven out of the top 12 insurance companies operating in California have either stopped writing new policies or restricted them because of natural disaster damage. Several insurers have agreed to expand coverage if the state allows them to use catastrophe models to estimate economic losses from future disasters. Read more on that here.
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