Net Zero

1. Post-COP calculus
2. Northvolt drained
3. EV battle looms
4. LNG ‘golden era’
5. Plastic talks rigid

Bathing in crude oil outside Baku, and broadcast news tunes out COP29.

Post-COP calculus

The disappointing fundraising target adopted at COP29 will change how developing countries plan their climate projects — and could leave the poorest even further behind than they already are. Most observers agree that $300 billion is far too little for rich countries to raise by 2035. The only way the figure makes sense is if it’s used as a launching pad to reach the more aspirational voluntary goal described in the Baku agreement, $1.3 trillion. That means climate finance isn’t just about identifying needed projects anymore, Juan Pablo Hoffmaister of the Environmental Defense Fund said in an interview.

The whole game now is about reaching a one-to-four leverage ratio — that is, making sure every dollar from rich governments is matched by at least another four from private investors, development banks, middle-income countries like China, or other sources. “It’s a seismic shift,” Hoffmaister said, that will require low-income countries to study up on obscure financial instruments and do anything they can to lower barriers to private investment in their countries. The $300 billion target won’t be revisited anytime soon, he said.

Northvolt shows a new China strategy is needed

The bankruptcy of one of Europe’s most promising and high-valued climate tech companies is forcing a rethink of how best to compete with China in the EV supply chain — and whether trade barriers work.

Sweden-based battery maker Northvolt was the great hope both for Europe’s clean tech manufacturing renaissance, and the bedrock of European automakers’ EV aspirations. It was also a high-profile rebuttal to the US Inflation Reduction Act, meant to show that Europe could compete with the US for investment while competing with China on battery technology. The company, Europe’s first home-grown EV battery maker, drew nearly $15 billion in investments, had more than $50 billion in battery orders on its books, and was working toward a $20 billion stock listing.

Then things began to fall apart. Following a string of safety incidents, gaping production shortfalls, and missed delivery deadlines, the company was last week down to its final $30 million in cash — about a week’s worth of operating expenses — and nearly $6 billion in debt. Northvolt filed for Chapter 11 bankruptcy protection, and co-founder and CEO Peter Carlsson, who previously oversaw Tesla’s supply chain, stepped down. Left holding the bag were backers like Volkswagen, which said on Monday that its €1.4 billion stake in Northvolt is now worth less than half of that, and Goldman Sachs, which will reportedly take a $900 million loss.

Northvolt’s collapse is proof that even lavish public subsidies — the company pocketed nearly $1 billion from Germany — and booming customer demand aren’t enough to break China’s vise-grip on EV tech, and evidence that a new strategy is needed in order for Northvolt and peers in Europe and the US to survive.

Carlyle Co-Chairman David Rubenstein, Citadel founder and CEO Ken Griffin, former US Commerce Secretary Penny Pritzker, and KKR Co-Chairman Henry Kravis will serve as co-chairs of Semafor’s World Economy Summit on April 23-25, 2025, in Washington, D.C.

The third annual event will bring together US cabinet officials, global finance ministers, central bankers, and Fortune 500 CEOs for conversations that cut through the political noise to dive into the most pressing issues facing the world economy.

Join the waitlist for more information and access to priority registration.

EV battle looms

A showdown is looming between Donald Trump and Elon Musk on one side, against California Gov. Gavin Newsom and US automakers on the other, over EVs.

Newsom promised on Monday that California will continue to pay EV buyers a tax rebate of up to $7,500 if Trump and his allies in Congress axe the existing federal EV tax credit. That would risk escalating the state’s antagonistic relationship with the president-elect at a time when it will need Trump’s sign-off to continue setting fuel efficiency standards that are more stringent than federal ones.

Newsom’s plan has also already sparked a feud with Tesla CEO and Trump-whisperer Musk, whose companies would be excluded from the rebate offering because of its already-dominant market share in California. Musk could retaliate by moving manufacturing facilities out of the state. Meanwhile, automakers are urging Trump’s transition team not to scrap Biden-era fuel standards that are pushing them toward EVs, saying they’ve already invested too much in the EV transition to throw it into reverse now.

LNG ‘golden era’

Cubic feet per day of liquefied natural gas export capacity the US will likely achieve by 2030, double the current volume. Donald Trump’s reelection “could prime LNG markets for a golden era,” Rystad Energy analysts wrote, as his administration rushes to approve long-stalled terminals in Texas and Louisiana in a bid to appease backers in the oil and gas industry and gain a new bargaining chip in geopolitical negotiations with China, Europe, and Russia. But with the global gas market already fairly well-supplied, there’s a considerable risk that a major LNG export push will drive down prices and ultimately hurt US suppliers, Rystad warned.

Plastic talks rigid

Talks on a global treaty to cut plastic pollution are stalled as major oil-exporting countries and companies block agreement on measures to curb the production of virgin plastic. Saudi Arabia, Iran, and Russia led a group of delegates arguing that the treaty should only support demand-side measures like recycling, even though the UN official leading the negotiation warned that tactic could “lower the bar so that the treaty becomes meaningless.” If the COP29 summit in Baku showed just how endangered multilateral cooperation on climate has become, the plastics talks — which are relatively obscure to the public and even more penetrated by powerful industry groups — show even less promise for a useful outcome. They are scheduled to conclude this weekend, but could easily fall apart before then.

New Energy

• International Airlines Group, which operates British Airways, became the latest airline to sign a major supply contract for sustainable aviation fuel, from the Brookfield-backed producer Infinium.
• One corner of climate tech that could thrive under Donald Trump is geothermal, which borrows much of its technology and workforce from oil and gas.
• A promising US startup in floating offshore wind says it sees no future at home under Trump, and is looking to overseas markets instead.

Fossil Fuels

• BP is working on a new deepwater oil drilling operation with the same floating rig company it partnered with on the disastrous Deepwater Horizon spill 15 years ago.
• Guyana’s plans to tap its vast natural gas reserves are stalled half a year after the country picked an obscure US startup to lead the drilling effort.
• US oil and gas trade groups are warning Trump not to push too hard on tariffs with Mexico and Canada, which could cause a major spike in energy prices, they warned.

Finance

• Trump’s reelection is forcing some ostensibly green corners of Wall Street to rethink how they talk about ESG and the energy transition.

Tech

• ArcelorMittal is pushing off a final investment decision on green steel projects in Europe, citing an uncertain policy environment and high energy prices.

COP29

• COP29 President Mukhtar Babayev said that unspecified “western countries” pressured him to hold off on releasing any draft finance agreements that specified a fundraising target until the conference was almost over, a negotiating tactic that he said was designed to make the disappointing final figure “look like a fait accompli.”
• US national TV news outlets mostly ignored COP, according to a Media Matters analysis, broadcasting just 57 minutes of coverage compared to nearly six hours covering last year’s COP.

Anton Troianovski, Moscow bureau chief for The New York Times, visited Azerbaijan’s famed crude oil spa.

Senate Democrats don’t sound like they’re gearing up for the “hell no” approach to Donald Trump’s Cabinet picks that they adopted during his first term, Semafor’s Burgess Everett reported. Trump nominees like Robert F. Kennedy Jr., Pete Hegseth, and Tulsi Gabbard probably won’t get many Democratic votes, but a repeat of the rage the party channeled in public eight years ago looks unlikely, Everett wrote.