Net Zero

1. The transition’s Trump test
2. Shadow over climate talks
3. Climate leaders’ reactions
4. OPEC’s waning influence
5. BYD hits the gas

Bees, beef, and green hydrogen.

Trump puts the transition to the test

Donald Trump’s reelection as US president threatens to upend Washington’s role in the global business and politics of climate change, setting up a high-stakes test of whether the energy transition will grind to a halt.

Trump has a long history of disparaging climate science, bashing clean energy, and embracing fossil fuels. The last time he was in office, he withdrew the US from the Paris Agreement, gutted more than 100 environmental protection regulations, muzzled and defunded federal climate scientists, and placed former fossil fuel lobbyists in charge of key agencies. Trump’s allies have planned an extensive repeat performance of those strategies, and will be in a position to unwind much of the Biden administration’s work on climate policy, especially if Republicans take control of both houses of Congress, as seems possible.

When I speak to people working in the energy transition, I often experience a kind of strange cognitive dissonance on the subject of Trump. Most believe that the eventual replacement of most fossil fuels by low-carbon alternatives is inevitable, and that the growth of US clean energy industries is driven by fundamental economics that are to some extent insulated from the occupant of the White House. A full repeal of the IRA is very unlikely.

Yet there is a deep sense of anxiety that Trump will prove the transition to be much more fragile than anyone wants to admit.

Shadow over climate talks

Trump’s victory comes less than a week before the start of COP29, and will certainly put a grim mood on the summit. “This feels like the end,” said the lead climate negotiator from one highly vulnerable middle-income country, who requested anonymity to speak candidly. “With Trump back, any hope for real progress on climate finance is shattered. His administration will almost certainly abandon the Paris Agreement again, wrecking any chance of global unity. For vulnerable countries, it’s nothing less than a disaster — our future feels as if it’s been voted away by the very nation most responsible for this crisis.”

Any deal on climate finance that emerges from Baku this month will have to come with a major caveat, given the overwhelming likelihood that the incoming Trump administration will drop out of it. That leaves an opening for China to move into a dominant role in the negotiations, and for sub-national and business leaders from the US to build a coalition capable of keeping momentum going in the probable absence of federal climate leadership.

Reactions from climate leaders

Climate leaders expressed a mix of trepidation and cautious optimism about Trump’s reelection.

Oil’s Trump trade

International benchmark price for a barrel of crude oil following Trump’s victory, down a dollar from the day before. Analysts see Trump as being generally bearish for oil prices; he plans to ramp up US production despite tepid global demand, and his push for more tariffs on China and other major oil consumers would also curb their oil consumption. That puts OPEC countries in a bind: The group already punted, again, this week on a decision to increase production, a sign that it is struggling to maintain its once-powerful influence on the dynamics of the global oil market. And as an interesting new paper in the National Bureau of Economic Research argues, OPEC’s waning influence may actually lead to significantly higher global emissions.

BYD buoyant, others downbeat

Chinese electric vehicle giant BYD said it would ramp up production and hiring on the back of rising sales, a sharp contrast with legacy automakers who reported disappointing results. BYD’s announcement came after its latest results showed its revenues for the first time outpaced those of Tesla. Yet even as it and other major Chinese carmakers have expanded both their output and their ambitions, increasingly targeting overseas markets, historically powerful automotive companies BMW, Honda, and Toyota all posted sharp declines in quarterly profit, in large part because of sagging demand in China. The dueling narratives came as Reuters reported that Beijing directed its automakers to halt investments in European Union countries that supported tariffs on China-made EVs.

— This item was originally published in Flagship, Semafor’s global news briefing. Sign up here.

New Energy

• Shares of wind turbine maker Vestas hit their lowest point in years after the company cut its profit expectations for the year.
• Sweden blocked plans for the construction of 13 wind farms in the Baltic Sea, over concerns from defense officials there that would slow the country’s response time to a missile attack, presumably from Russia.
• General Atlantic’s sustainable infrastructure arm Actis and its partner Fortescue could begin construction of their first green hydrogen project in Oman within 18 months and ship initial cargo by 2030, a top Actis executive told Semafor.

Fossil Fuels

• Trump’s election victory is good news for oil and gas shareholders, analysts said.
• Coal CEOs are the newest addition to the ranks of crypto bros.
• Despite pledges from nearly 200 companies and countries, methane emissions are still near record highs.

Finance

• Small island states will face a total of $75 billion in climate damages by 2050.

Tech

• US regulators rejected a request by Amazon to site a new data center with an existing nuclear power plant. Meta’s nuclear power plans, meanwhile, were derailed by a rare species of bee.

EVs

• Ethiopia banned the import of gas-engine cars, but frustrated drivers say the infrastructure for widespread EV adoption just doesn’t exist yet.

Food & Agriculture

• Meat companies in Brazil were fined $64 million for buying cattle raised on deforested land in the Amazon.

Elon Musk’s internet service provider Starlink is halting new sign-ups in Africa, citing a demand surge in the continent’s biggest cities, Semafor’s Alexander Onukwue reported. Starlink’s Africa rollout has also been met with some resistance from local telecoms companies and concerned regulators, Alexander wrote.