House Energy and Commerce Committee Chairman Henry Waxman (D., CA) and Representative Edward Markey (D., MA) have released a draft of climate legislation that is widely expected to form the basis of the climate debate in Congress. The American Clean Energy and Security Act of 2009 (ACES) would establish a mandatory cap-and-trade program that the lawmakers say is closely modeled on recommendations by the U.S. Climate Action Partnership (USCAP; Washington), a coalition including Dow Chemical and DuPont as well as environmental groups (CW, Jan. 19, p. 6).
The Waxman-Markey bill would require reductions in greenhouse gas (GHG) emissions of 3% below 2005 levels by 2012, 20%
by 2020, 42% by 2030, and 83% by 2050. Electric utilities would be required to derive some output from renewable sources, beginning with 6% in 2012 and gradually rising to 25% in 2025. Waxman says he plans to move the bill out of committee by May 30.
The bill does not define how emission allowances would be allocated, however.
That issue, which is expected to be among the most controversial, is key to determining how costly the climate mandate is to U.S. companies, advocacy groups say.
“USCAP recommends that a significant portion of allowances be initially distributed free to entities covered by the cap, in order to mitigate costs to consumers and particularly vulnerable sectors of the economy,” the group says. “This free distribution should
then be phased out over time.”
The legislation also would provide incentives for carbon capture and sequestration (CCS) technology development, including a CCS early demonstration program; incentives for the wide-scale commercial deployment of CCS; and performance standards for new coal-fired power plants.
Meanwhile, Dow Chemical and Air Products announced separate CCS demonstration projects last week. Dow has partnered with power services firm Alstom to develop a CCS demonstration to capture carbon dioxide from the flue gas of a coal-
fired boiler at Dow’s South Charleston, WV facility. Air Products says it has signed an agreement with energy firm Vattenfall (Stockholm) to build a CCS pilot plant at Vattenfall’s Schwarze Pumpe, Germany demonstration facility. —KARA SISSELL
Monsanto reported second-quarter net income of $1.1 billion ($1.97/ share), 3% lower than the same year-ago quarter. Sales increased 8%, to $4 billion. Increased revenues from the U.S. corn and soybean seeds and traits business were partly offset by lower sales of Roundup herbicides, Monsanto says. Monsanto reported earnings of $2.16/share, excluding acquisition-related charges, and beat analysts consensus of $2.06/share as reported by Thomson Reuters (New York).
Monsanto’s seeds and genomics unit’s gross profits rose 21%, to $1.98 billion, on sales up 20%, to $3 billion. Gross profits for the company’s agricultural productivity segment, which includes Roundup and other glyphosate herbicides, fell 6%, to $544 million, on sales down 16%, to $993 million. Lower volumes of Roundup and other glyphosate-based herbicides were “largely a timing effect” as year-ago results were aided by buying in advance of a price increase, Monsanto says. Glyphosate volumes were also affected by drought conditions in Latin America, it says.
The company reaffirmed its guidance for full-year 2009 at $4.40-$4.50/share and says it is expecting 2009 to be its fifth consecutive year of greater than 20% earnings growth. —REBECCA COONS
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