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EU faces tougher path to climate legislation

  • Market: Electricity, Emissions, Hydrogen, Natural gas, Oil products
  • 14/06/24

Right-wing parties' strong showing in the European Parliament elections are likely to mean a looser embrace of the Green Deal, writes Dafydd ab Iago

The European Parliament elections have resulted in a workable majority for parties that supported the EU's 2030 climate and energy strategy. But political uncertainty in the EU's two largest countries, Germany and France, could add to the difficulties the bloc faces in legislating for its2040 target of cutting net greenhouse gas (GHG) emissions by at least 90pc, compared with 1990 levels.

Outgoing member of the European Parliament Markus Pieper sees the majority paving the way for a more pragmatic approach in 2024-29, with internal combustion engine vehicles staying on the roads beyond 2035, and more flexible rules for CO2-neutral fuels such as low-carbon hydrogen, e-fuels, and biofuels.

The newly constituted parliament's first plenary session is scheduled to take place in Strasbourg on 16-19 July, when members will choose the parliament's next president and vice-presidents and decide on committee memberships. Awaiting legislation for 2040 climate goals, members from the influential environment and energy committees have a range of technical legislation to approve related to the bloc's 2030 climate goals.

This begins with the approval of legislation defining vehicles running "exclusively" on CO2-neutral fuels. A little further down the line, the environment committee will weigh in on legislation setting methane intensity classes for producers and companies selling oil, gas and coal in the EU by 2030.

Passing legislation for the 2040 GHG targets will depend on parliamentary and member state approval. Overseeing the legal proposals will be the European Commission president, with Ursula von der Leyen eyeing re-election to this post after her centre-right EPP won 189 seats in parliament. Together with centre-left and liberal parties, von der Leyen's EPP group could form a comfortable majority for climate and energy legislation, with over 400 of the 720 seats. This does not include the Greens, who lost 19 seats and are now down to 53, nor the 135 centre-left socialists.

The election results have undoubtably strengthened von der Leyen's bid to be re-elected as commission president, and EU leaders are due to meet on 17 June for their first formal discussions on the matter. The parliament as a whole must approve the EU leaders' choice of commission president, along with the 27 commissioners, including those responsible for energy and climate, that are to take office by the end of the year.

Green knights

Von der Leyen oversaw the implementation of the Green Deal — the overarching set of policies aimed at cutting EU GHG emissions by 55pc by 2030 compared with 1990 levels. Environment committee member Michael Bloss says it is "absurd" that the Greens now appear to have to come to von der Leyen's aid to rescue her Green Deal, and that he fears the prospect of von der Leyen's EPP group forming majorities in parliament with the conservative ECR and far-right groups. "The Green Deal is not dead," Bloss says.

If reappointed, von der Leyen will find herself contending with national capitals more willing to oppose ambitious climate and energy targets. In response to strong gains by the far-right, eurosceptic National Rally party in the EU elections, French president Emmanuel Macron dissolved parliament and called snap National Assembly elections for 30 June and 7 July. And Germany's far-right opposition AfD party outperformed chancellor Olaf Scholz's centre-left SPD, altering Berlin's coalition politics. With Germany's Bundestag election on the horizon in September or October 2025, sensitive coalition politics could well hinder approval of more ambitious, and costly, EU climate legislation.


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21/05/25

Mexican GDP outlook dims on tariffs: IMEF

Mexican GDP outlook dims on tariffs: IMEF

Mexico City, 21 May (Argus) — Mexico's association of finance executives IMEF lowered its 2025 growth forecast for a fourth consecutive month, citing the growing impact of US tariffs on the economy. GDP is now expected to grow just 0.1pc in 2025, according to IMEF's May survey, down from 0.2pc estimates in April, 0.6pc in March and 1pc in February. The number of respondents forecasting a contraction in GDP rose to 16, or 37pc of the sample, from nine in April. While the US has granted some exemptions and discounts for Mexican goods meeting regional content rules, IMEF said the effective tariff rate on Mexican exports remains higher than that for Canada, Brazil, India, Vietnam and others. "We're already seeing the [tariffs'] impacts," said IMEF economic studies director Victor Herrera, adding that May trade data will likely show a sharp drop in Mexican exports to the US. Trade is also being hit by a screwworm outbreak in cattle that led to port closures last week and curtailed beef exports, which account for $1.3bn in annual exports. More automakers could relocate or scale back production in Mexico, Herrera said, after Stellantis confirmed plans to shift some operations to the US and recent reports Nissan may close one or both of its Mexican plants. In response, Mexico this week sent deputy economy minister Luis Rosendo Gutierrez to Tokyo to meet with Mazda, Nissan, Toyota and Honda executives. IMEF cut its 2025 job creation forecast to 200,000 in May from 220,000 in April. Mexico's social security administration IMSS reported only 43,500 new jobs over the past 12 months as of 5 May. Beyond trade, IMEF flagged uncertainty from recent constitutional reforms and the potential for a US tax on remittances as additional risks to growth. The group held its 2025 inflation forecast steady at 3.8pc, despite Mexico's consumer price index rising to 3.93pc in April from 3.80pc in March . IMEF noted concerns about a potential rebound in inflation later this year after the central bank cut its benchmark interest rate by 50 basis points to 9pc on 8 May — the third such cut in 2025. The group now sees the end-2025 rate at 7.75pc, down from 8pc previously. IMEF expects the peso to end the year at Ps20.80/$1, slightly lower than the Ps20.90/$1 forecast in April. The peso recently strengthened to Ps19.34/$1, though Herrera said this reflected dollar weakness more than peso strength. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Nations eye new climate ties including China without US


21/05/25
News
21/05/25

Nations eye new climate ties including China without US

London, 21 May (Argus) — The world's politicians are still working out how to deal with US president Donald Trump, but climate leaders will forge new, diversified relationships, with China likely to play a growing part, delegates heard today at the Financial Times Climate and Impact Summit Europe . Trump's move to rapidly roll back US climate and environment-related regulation was a shock, but in Latin America, "underneath, so far, things have not really yet shifted", Colombia's former environment minister Susana Muhamad said today. Latin American countries are likely to further diversify relationships, she added, noting co-operation agreements signed in Beijing between Colombia and China. Colombia joined China's belt and road initiative earlier this month. "The world is still grasping what Trump is doing", and countries are still forming new relationships, EU member of parliament and vice-chair of the parliament's environment committee Bas Eickhout said today. And the UN Cop 30 climate summit — set for November in Belem, Brazil — is happening early in the day in terms of those new relationships being formed in the climate space, he added. China will be in "the driver's seat in some way… or at least a co-pilot", founding director at Chinese NGO the Institute of Public & Environmental Affairs Ma Jun said. The world's biggest economies "need to play a role in the governance", he added. China and Europe have experienced many of the same pressures on climate policy, delegates heard. Although the "backlash" against some "green" policies started around two years ago, those pushing against such policy have been emboldened by Trump's election, Eickhout said. "Energy security has been elevated to the top priority in China", Ma said — although China has already reached some of its 2030 renewable energy targets. In Europe, "I think the entire decarbonisation agenda will continue", but it will be framed as a competitiveness and security agenda, Eickhout said. He also noted some softening from industry previously pushing back on "green" policy, given that Europe's relative predictability has been thrown sharply into focus by drastic changes set out by the US government. Muhamad pointed to the global need for a just energy transition. "If the transition does not bring higher equality, the transition will not happen", she said. Given that finance is crucial, "the influence of the US in the multilateral banks' decisions… will be critical", she added. By Georgia Gratton and Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EPA to set biofuel mandate 'very soon': Zeldin


21/05/25
News
21/05/25

EPA to set biofuel mandate 'very soon': Zeldin

New York, 21 May (Argus) — Environmental Protection Agency (EPA) administrator Lee Zeldin stressed Wednesday that the US is working quickly to propose and finalize new biofuel blend mandates. EPA last week sent proposed Renewable Fuel Standard volumes for 2026 — and likely at least one future year — to the White House Office of Management and Budget for review, the final step before a draft rule can be released. Zeldin referenced that process at a Senate hearing Wednesday and said "we expect the proposed rule to be finalized and released very soon." Asked by US senator Pete Ricketts (R-Nebraska) whether the agency was planning on releasing something by summer or fall, Zeldin said he was eyeing a "much, much faster" timeline. "We'll finalize this as quickly as we possibly can," he said. Zeldin has stressed at recent House and Senate hearings that the agency is expediting the months-delayed rulemaking. Under the Renewable Fuel Standard, EPA requires oil refiners and importers to blend annual amounts of different types of biofuels into the conventional fuel supply. EPA decisions on volume mandates — and on requests for exemptions from small refiners — are highly influential for crop feedstock demand, biofuel production margins and retail fuel prices. Zeldin said last week at a House subcommittee hearing that EPA was also weighing what to do with a backlog of requests from small refiners for exemptions from program requirements. "None of these were getting approved at all in the last administration," Zeldin said. "We want to get caught up as quickly as we can." EPA has not commented more recently on its specific timeline and plans, but the agency said earlier this year that it wanted to get the frequently delayed biofuel program back on its statutory timeline. The Clean Air Act requires new volumes to be finalized 14 months in advance of a compliance year, which in this case would require proposed volumes for 2027 to be released soon for public comment and then finalized before November this year. A coalition of industry groups, including the American Petroleum Institute and Clean Fuels Alliance America, have pushed the agency to hike the biomass-based diesel mandate from 3.35bn USG this year to a record-high 5.25bn USG next year. Other groups, including fuel marketers, have urged more caution given a sharp drop in biofuel production to start 2025 and uncertainty about the future of a federal clean fuel tax credit being renegotiated in Congress. As part of the White House process, outside groups can seek meetings with the Trump administration to present their views on a pending regulation. Meetings are scheduled through 4 June on the proposed volumes — and through 9 June on a related rule to cut last year's cellulosic biofuel quota — though the US has expedited the process before. Last year, President Joe Biden's administration cancelled previously scheduled meetings on the initial proposal to cut cellulosic targets as a way to more speedily exit the review process. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Phillips 66 shareholders split board vote


21/05/25
News
21/05/25

Phillips 66 shareholders split board vote

Houston, 21 May (Argus) — Activist hedge fund Elliott Investment Management is set to win two seats on Phillips 66's board of directors, short of its goal of four seats, according to preliminary results. Two Phillips 66 nominees were also elected in the vote, a positive result for the US refiner and midstream operator. Elliott, which has amassed a $2.5bn stake in Phillips 66, had put forth four nominees for the board in a proxy fight which culminated today at an annual meeting of shareholders. Both sides declared victory after the split vote on the four open seats. Phillips 66 said the vote reflects a belief in its integrated strategy of holding assets in different sectors, while Elliott said the vote "sends a clear message" that shareholders demand meaningful change at Phillips 66. The two Elliott nominees elected to the 14-member Phillips 66 board are Sigmund Cornelius, former chief financial officer of ConocoPhillips and Michael Heim, former chief operating officer of Targa Resources, according to preliminary voting results. The two Phillips 66 nominees elected to the board are Nigel Hearne, a 35-year veteran of Chevron, and Robert Pease, a former Motiva and Cenovus downstream executive who was appointed to the board in 2024 to address Elliott's concerns about a shift in focus from refining to midstream. Phillips 66 also said today that shareholders "overwhelmingly" rejected an Elliott proposal requiring annual director resignations, according to the preliminary results. The voting tally will be tabulated and certified by an independent inspector and final results will be reported to the US Securities and Exchange Commission. The two Elliott nominees for the Phillips 66 board who were not elected are Brian Coffman, former chief executive at Motiva, and Stacy Nieuwoudt, former energy analyst at Citadel. The two Phillips 66 nominees to the board that were not elected are current director John Lowe, who was up for re-election, and Howard Ungerleider, a former Dow president and chief financial officer. Long-running battle over direction Elliott contends that Phillips 66 has consistently trailed its industry peers and needs to streamline operations, including spinning off or selling its midstream business, selling its 50pc stake in Chevron Phillips Chemical (CPChem), and possibly other assets. Elliott has waged an aggressive campaign, launching a website dubbed "Streamline 66" with power point presentations, podcasts, biographies of its dissident board nominees, press releases and information on how shareholders can vote. Phillips 66 has told shareholders that its board and management team are implementing a transformative strategy that has delivered results. The company has expanded its NGL business, improved its refining cost structure and continues to position CPChem as the lowest cost producer of ethylene, Phillips 66 said. Phillips 66 told shareholders that Elliott was pushing "an aggressive short-term agenda" that would cause disruption, slow momentum and jeopardize shareholders' investment capital. Phillips 66 has made some adjustments since Elliot started to agitate for change. In addition to adding Pease to the board, the company recently agreed to sell off some of its European retail business , and expects about $1.6bn in pre-tax cash proceeds from the sale that it will use toward debt reduction and shareholder returns. But the refiner has resisted the other major Elliott recommendations to divest its midstream business and sell its 50pc share of CPChem, saying earlier this month that the Phillips board has evaluated them and "came to the conclusion that neither action is in the best interest of long-term shareholders at this time". Meanwhile, Chevron has advised Phillips 66 of its interest in acquiring the other half of CPChem "at a reasonable value for both parties", Chevron chief executive Mike Wirth said on 2 May. Three top shareholder advisory firms [backed the Elliott nominees] (https://direct.argusmedia.com/newsandanalysis/article/2687988) in the proxy fight. Institutional Shareholder Services (ISS) and Egan-Jones recommending all four of Elliot's dissident nominees, while Glass Lewis backed three of the four. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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India's air passenger traffic rises on year in April


21/05/25
News
21/05/25

India's air passenger traffic rises on year in April

Mumbai, 21 May (Argus) — India's domestic air passenger traffic rose by 8pc on the year but fell by 1pc on the month to 14.3mn in April, data from the Civil Aviation Ministry show. Domestic air passenger traffic rose by nearly 10pc on the year to 57.5mn during January-April. Domestic air travel serves as an indicator of jet fuel demand. Jet fuel demand in April rose by 4pc on the year to 202,000 b/d, oil ministry data show. Indian state-controlled refiners cut jet fuel prices by 6pc from a month earlier in April. Prices in capital New Delhi, Kolkata, Mumbai and Chennai dropped to 89,441.18 rupees/kilolitre ($1,044/kl), Rs91,921.00/kl, Rs83,575.42/kl and Rs92,503.80/kl respectively. Fuel costs typically account for 30-40pc of airlines' expenses. Military confrontations between India and Pakistan in May disrupted flights from and within India. Almost 32 airports in parts of northern and western India were briefly closed because of security concerns and border threats. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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