Net Zero

1. Climate cash ‘supernova’
2. Clean energy tit-for-tat
3. Climate debt swap
4. Siemens Energy stock comeback
5. Climate litigation claims

The US should move faster to support Africa’s critical mineral boom.

Biden’s race to dole out clean energy cash

The Biden administration is racing to disburse financing from the government’s biggest clean energy bank to get ahead of possible cuts once President-elect Donald Trump takes office.

On Monday the US Department Of Energy agreed to lend a project backed by automaker Stellantis up to $7.5 billion for two electric-vehicle battery factories in Indiana. The deal follows nearly $12 billion in other clean energy loans and guarantees announced in the last week, adding up to $41 billion in conditional commitments to about 20 projects the office is now racing to finalize before Trump’s inauguration on Jan. 20.

Realistically, most of those deals won’t close before Trump takes office, creating a risk that the new administration could pause or rescind them. Current and former DOE staff told Semafor they worry that the Loan Programs Office (LPO), a bastion of outgoing President Joe Biden’s climate agenda, could be drastically scaled back under Trump. They fear the incoming president may decide to leave roughly $340 billion in remaining loan authority either untouched or directed to projects favored by the fossil fuel industry.

“Any deal that remains conditional on January 20 is at real risk,” said John Miller, managing director for ESG policy at the investment bank TD Cowen. “Broadly speaking, we expect Trump’s DOE to mothball LPO for 2025.”

Clean energy tit-for-tat

Clean energy trade wars between Asian and Western countries are escalating.

• The US announced a new round of tariffs on solar panels imported from China-backed manufacturers in four Southeast Asian countries that US officials had accused of unfairly cutting prices. The move will drive up costs for US solar installers, but should be an added boost for US solar manufacturing, which according to an industry report this week has now quintupled its production capacity since 2022.
• Europe is taking new steps to block Chinese suppliers from accessing subsidies for EV batteries and hydrogen production hardware, even as it negotiates with Beijing to reduce tariffs Brussels has slapped on China-made EVs.
• China banned exports to the US of germanium, a mineral used in solar cells, and restricted exports of graphite, critical for EV batteries.

An escalating trade war is damaging to both sides — and the lesson of the recent bankruptcy of European battery producer Northvolt is that the only long-term solution for disentangling China from the clean energy supply chain is to find a more productive short-term trade detente.

Climate debt swap

Barbados completed a world-first debt swap that will allow it to finance climate adaptation projects without forcing it to take on unaffordable loans.

Under the deal, led by the Canadian Imperial Bank of Commerce, Barbados was able to replace some of its most expensive sovereign debt with a lower-cost loan, freeing up $125 million that it will invest in upgrading its water infrastructure to be more resistant to climate change impacts. It’s the first such deal to allocate money directly to climate adaptation, and could be a model for other low-income countries that were frustrated by the paltry climate fundraising targets adopted at COP29. Ecuador, meanwhile, is starting work on its second debt swap targeting rainforest conservation, again facilitated by Bank of America.

Siemens Energy stock comeback

Year-to-date increase in Siemens Energy’s share price, making it one of the best-performing energy stocks of 2024. Last year, the company needed a €15 billion German government bailout to keep its flailing wind power division afloat. The wind division is still operating at a loss. But the rest of the company, which makes gas turbines and grid hardware, has been buoyed by the global power demand boom fueled by data centers and EVs. The company’s share price has outperformed Nvidia’s this year, a sign that the electrons behind AI could be an even better investment than AI itself.

Climate litigation claims

Pogust Goodhead — the law firm behind an ambitious, transatlantic class-action lawsuit over a mining disaster — is cutting around 100 jobs and is reportedly months behind in filing its accounts. The firm was among the most prominent to utilize litigation finance to power lawsuits against companies alleged to have damaged the environment, notably relying on a $552.5 million secured loan from the US hedge fund Gramercy in order to fund lawsuits against mining giants BHP and Vale over the 2015 Marina dam collapse as well as against a dozen carmakers over the Dieselgate scandal.

The former case in particular made headlines when it opened in October for both its scale and its global scope, involving Brazilian claimants suing an Anglo-Australian mining company in a London court. The lawsuit — which is expected to conclude in March — is also unusual in that class-actions of its kind are rare in Britain, and for its funding mechanism of litigation finance, which has mostly only been used in patent or international arbitration disputes. Yet The Law Society Gazette noted that “the nature of large group claims… is that there is no regular income stream during litigation.” Law.com, meanwhile, reported that the firm’s annual accounts for the most recent financial year were eight months overdue at the UK’s Companies House registry.

In a statement, Pogust Goodhead appeared to blame slow-walking by the companies it is targeting, saying: “We were established with the ambitious goal of providing justice for millions of people who have been wronged by multinational companies. It is well known these companies have infinite resources.”

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 Apr. 23-25, 2025, in Washington, DC.

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.

New Energy

• The Biden administration will miss a deadline to finalize tax credit rules for biofuels, leaving the possibility that they could be held to a weaker climate standard once Trump takes office.
• The UK will pay at least a record £1 billion this year in costs related to curtailing excess wind power on the grid, a sign that transmission hasn’t kept pace with the renewables buildout.
• TotalEnergies is closing in on a $2 billion deal to acquire the renewables developer VSB Group, the latest sign that the French oil major is more willing to push into clean energy than its peers.

Fossil Fuels

• OPEC’s push to keep oil prices high by restricting its own production has reached the point where it is now effectively subsidizing its Western rivals and causing a widening rift between the cartel’s members.
• The US hit Russia’s Gazprombank with new sanctions, which will make it harder for other countries to buy Russian gas.
• QatarEnergy signed a new deal with Shell to deliver LNG to China, the latest signal that China is looking for new fossil energy sources to supplement and offset its coal consumption.

Finance

• Quibbling among financial regulators over what counts as “transition finance” is a waste of time and could be counterproductive, a top JPMorgan executive said.
• Texas and 10 other Republican-led states sued BlackRock and two other top asset managers, accusing them of conspiring to hold back coal production as part of their environmental agenda. BlackRock responded that the allegation “defies common sense.”

Politics & Policy

• Countries failed to reach any agreement to curtail plastic pollution at a major international summit, the result of steadfast opposition by Saudi Arabia and other oil-producing countries to accept any caps on plastic production.
• Republicans will come to regret letting Elon Musk slash the budget and staff of federal weather forecasting agencies if they let him do so, according to the top weather official in the first Trump administration.

Minerals & Mining

• As gold prices near an all-time high, one of Australia’s biggest gold mining firms agreed to buy one of its rivals for $3.3 billion.

EVs

• Indian steelmaker JSW plans to launch its own EV brand.
• General Motors will sell its stake in a Michigan EV battery factory that was built with more than $2 billion in federal subsidies.

Personnel

• Brooke Rollins, Trump’s nominee to lead the US Department of Agriculture, is a climate change skeptic and has farmers concerned he may strip away incentives for climate-smart farming.

Josh Goldman, president of KoBold Metals, joined Biden on his trip to Angola this week.

Riyadh, a city known for its worsening gridlock, has finally launched its 85-station metro system, Semafor’s Sarah Dadouch reported. A construction boom over the last six years has transformed traffic jams into “endless nightmares,” she wrote, but Riyadh’s drivers are less than hopeful that the opening of the metro will solve the problem in the long term.