The days of promoting liquefied natural gas as “freedom gas” or “molecules of freedom” have ended at the U.S. Department of Energy.

During a Friday visit to Houston, U.S. Secretary of Energy Jennifer Granholm said the Biden administration would rather promote and sell a cleaner version of the superchilled power plant fuel. The statement marks a policy shift from the Trump administration, which rolled back environmental regulations and heavily promoted U.S. LNG around the world.

The Biden administration, Granholm said, is looking closely at carbon capture and sequestration technology, which would take emissions from LNG plants and other facilities, move them by pipeline and then inject them underground.

“We want to be able to promote and sell clean technologies,” Granholm said following a tour at an Air Liquide SA hydrogen plant in La Porte, Texas. “That could be natural gas that has been decarbonized, or that could be natural gas where the methane flaring has been eliminated.”

Arlington, Virginia-based Venture Global LNG announced Thursday that it plans to implement carbon capture and sequestration at three export terminals in Louisiana, where one is already under construction and expected to produce its first drops of the fuel later this year.

Still seeking to sell enough contracts to support its proposed Rio Grande LNG export terminal in South Texas, Houston-based LNG developer NextDecade Corp. has also pledged to add carbon capture and storage to its plant.

Spain will spend 1.5 billion euros ($1.8 billion) from a European Union recovery fund to develop green hydrogen production over the next three years, Prime Minister Pedro Sanchez said Monday.

Spain will spend 1.5 billion euros ($1.8 billion) from a European Union recovery fund to develop green hydrogen production over the next three years, Prime Minister Pedro Sanchez said Monday.

The goal is for Spain to become Europe’s leading hydrogen producer using renewable sources instead of fossil fuels to curb greenhouse gas emissions and create jobs, he said.

“The Spanish government is firmly committed to green hydrogen,” the Socialist premier said at a ceremony in Toledo, just south of Madrid.

His government expects the outlay will stimulate 8.9 billion euros of mainly private-sector investment to develop the technology by 2030.

Madrid has already received over 500 “green hydrogen” project proposals from energy firms, a government statement said.

Creating “green” or emissions-free hydrogen is seen as a key step towards developing sustainable energy sources and slashing carbon emissions.

One reason for the strong interest in hydrogen technology is when used to fuel motors, the only emission is water vapour.

But it is expensive to produce and the electricity needed generates a lot of carbon dioxide emissions or other pollutants.

Green hydrogen is produced via electrolysis — an electrical current passing through water — with wind, solar or hydro-electric power providing the electricity.

Europe in particular is anxious to get a handle on the new and still costly fuel, having missed the boat on solar and battery technology, which is dominated by China.

Experts predict green hydrogen using renewable energy will soon plunge in cost and become cheaper than natural gas in many areas.

US engine maker Cummins announced Monday it would spend 50 million euros to build one of the world’s biggest electrolyser plants for the production of green hydrogen in Spain.

The plant, which will be built in the central region of Castilla-La Mancha, is expected to open in 2023.

“Spain offers a strong and dynamic local environment for hydrogen production, and we are excited to invest,” said Cummins chairman Tom Linebarger.

Spain is set to receive 140 billion euros — half in direct payments, half in loans — from the 750 billion-euro recovery plan adopted by EU leaders last year as the economy reeled under virus lockdown restrictions. (AFP)

Last week a raft of oil majors released their first-quarter results, with companies like Royal Dutch Shell Plc showing a return to pre-pandemic profit levels. At the same time, some of the majors increased their energy transition commitments: as my Bloomberg Intelligence colleagues Salih Yilmaz and Will Hares noted on Twitter, Spanish firm Repsol SA devoted 40% of its capital expenditure to low-carbon projects, and France’s Total SE stated plans to increase its renewable energy capacity five-fold over the next four years.

There are energy-transition commitments, though, and then there are energy-transition results. And on the latter side, one company shines: Norway’s state-owned oil producer, Equinor ASA. It posted more than $2.6 billion of earnings in the first quarter of 2021, 49% of which was from renewable energy. Last quarter, Equinor earned more from renewables than it did from oil and gas exploration and production.

But Equinor’s results are more than evidence of a successful renewable-energy strategy. They’re also a sign of the challenge ahead for other oil majors with similar ambitions.

More interesting than the farming down itself is who Equinor is farming down to: two other European oil majors! BP Plc is buying into the U.S. projects, and Italy’s Eni SpA is buying into the U.K. projects—or in other words, BP and Eni are paying Equinor for the privilege of taking on the earlier stages of developing offshore wind.

Therein lies the challenge for Big Oil’s energy transition plans. Equinor’s way to benefit from renewable-energy assets is, essentially, to put in the early work of developing them—and then reap the cash benefits of selling them to others.

Importantly, early wind development is more time-dependent and expertise-dependent than it is capital-dependent. Equinor’s U.S. wind assets are the result of its success in the country’s 2018 offshore-lease auction, when it won stakes with a bid of $135 million. In its latest earnings statement, the company says BP paid $1.2 billion for those same assets, netting the Norwegian company $1 billion on the deal.

Equinor is a special creature in a few ways. First, one of the reasons it could be an early developer of U.S. offshore wind is that it has decades of experience developing and operating offshore oil and gas assets. Other oil majors (in particular BP) can claim the same expertise, but Equinor seems particularly adept at it.

Second, the company is two-thirds owned by the Kingdom of Norway, with Norway’s Government Pension Fund Global, also known as Norges Bank, owning another 3.59% of the company via Folketrygdfondet, which is authorized to invest 85% of its funds in Norwegian companies. Not only is the government a particularly patient and committed shareholder, it also has a hand in its portfolio companies’ strategies. The Folketrygdfondet “has an interest in an orderly transition in line with the Paris Agreement” and expects that its portfolio companies “integrate climate change considerations into policies and strategy.”

So to recap: Norway reinvests its state-oil company’s revenues back into said oil company, while also helping drive said oil company’s energy transition strategy. As Equinor’s first-quarter results show, all of this effort and coordination has made it possible for an oil company to get half its revenues from renewable energy, at least for now. Other oil majors reaching for that same brass ring will have their work cut out for them, certainly—and may continue to resort to buying assets from each other in their quest to get there.

Nathaniel Bullard is BloombergNEF’s Chief Content Officer.

Amazon deforestation in Brazil reached a 12-year high in 2020, and over 95 per cent of it is illegal. Governments and markets must radically revalue the rainforest’s natural services and stimulate a green economy to avoid a nightmare scenario.

The Amazon Basin is fast approaching an irreversible tipping point. That should concern everyone, because what happens in the Amazon has planetary implications.

Spanning eight South American countries and French Guiana, the Amazon contains over 60 per cent of the world’s tropical forests, 20 per cent of its fresh water, and about 10 per cent of biodiversity.

As a result of land speculation and insatiable global demand for meat, soy, gold, and other commodities, roughly 20 per cent of the world’s largest tropical forest has already been razed.

A further 5 per cent rise in deforestation levels could trigger catastrophic dieback, essentially dooming the 2015 Paris climate agreement.

Some fear this process may already have started. The current prognosis is not good: Amazon deforestation in Brazil reached a 12-year high in 2020, and over 95 per cent of it is illegal.

Unless governments and markets radically revalue the rainforest’s natural services, this nightmare scenario may be unavoidable.

Dieback in the Amazon Basin could release the equivalent of a decade’s worth of global greenhouse-gas emissions. The forest would also lose its ability to absorb billions of tons of carbon dioxide, disrupting hydrological cycles, evapotranspiration, and ocean currents.

The agro-industrial sector could collapse, and the loss of biodiversity could be staggering. Hydroelectric facilities would be shuttered, declining water tables would make cities unlivable, and fisheries would become unviable.

Preventing this outcome requires achieving zero deforestation in the Amazon by 2030. And that, in turn, requires a clearheaded scientific assessment and science-based targets.

The Science Panel for the Amazon, a coalition of about 200 leading scientists from the region, should become permanent. And, given the extraordinary wealth potential of preserving the forest’s biodiversity, the best way to protect this resource is by stimulating the emergence of a green economy.

For starters, this will require a crackdown on illegal deforestation and the networks that sustain it. Brazil’s environmental enforcement agency, Ibama, handed out 20 per cent fewer fines in 2020 than in 2019, owing to funding cuts and reduced sanctions – and less than 3 per cent of fines are paid.

Reinforcing Ibama, a federal agency, is essential, as is bolstering state-level institutions on the frontlines of environmental crime, such as police, firefighters, and land registration offices.

Illegal deforestation occurs in several ways, but typically involves unlawful land invasions, followed by forest clearance for commercial agriculture and ranching.

Another encroachment, wildcat mining, mostly for gold, undermines local ecosystems and human health, while wildlife trafficking, fueled by unrelenting global demand for rare birds, reptiles, and mammals, also affects forest health.

Currently, two-thirds of global supply chains have no policies on illegal deforestation. Massive investment in high-resolution remote sensing and artificial intelligence-based alert systems is essential, as is tracking illegally extracted commodities in global supply chains and strengthening investigation and prosecution.

One of the most important priorities in the Amazon is developing a transparent and accountable system that allows property titles and land demarcations to be registered and monitored properly over time.

Given the considerable fraud and corruption in most Amazonian countries’ land registries, creating a digitised, accessible, and up-to-date ledger is critical to enforcing existing laws and stimulating legal markets.

Developing an online dispute-resolution process to address outstanding legacy litigation related to competing land claims is no less vital. And establishing a blockchain verification system for land registries to demonstrate a clear chain of ownership and custody, while difficult, would greatly improve the prospects for a green economy.

Another priority is accelerating reforestation and land regeneration. In Brazil, home to 60 per cent of the Amazon, the state of Pará is an obvious location for such efforts. In Colombia, Peru, and Ecuador, which together contain roughly 23 per cent of the Amazon, the states of Amazonas, Loreto, and Pastaza, respectively, stand out.

The key is to build a predictable pipeline of reforestation, biodiversity conservation, and sustainable forest management projects that can scale rapidly.

The Reducing Emissions from Deforestation and Forest Degradation initiative could accelerate funding for such efforts. International financing from the Amazon Fund, US President Joe Biden’s administration, and tools such as green bonds would help, while local financing also could play a significant role.

So, too, could initiatives such as the Global Commons Alliance and 1t.org, along with investor activism, including from sovereign wealth and pension funds. In 2019, some 230 global investors, managing a total of more than $16 trillion in assets, called on companies to meet their deforestation commitments or risk adverse economic consequences.

Most important are innovations to bolster the green economy and support the communities that are the custodians of the Amazon Basin. Such initiatives could be accelerated by a Brazilian equivalent to the US government’s Defense Advanced Research Projects Agency to ramp up research and development, as well as related regulatory frameworks to enable an inclusive bioeconomy in the Amazon.

This approach would include applied research to collect and map Amazon biodiversity – with scientists studying fruits, nuts, plant extracts, and fibers, and using drones to sample biodiversity in hard-to-reach areas – along with digital platforms to secure biological assets for the public good.

To ensure that indigenous and local populations are included and benefit, clear and enforceable data-sharing rules and safeguards to promote local value creation and retention must accompany these efforts. In addition, establishing low- and high-tech innovation hubs in selected countries can stimulate local innovation, harness traditional knowledge, and ensure local ownership.

Advancing the green economy and achieving zero deforestation in the Amazon will depend on the combined efforts of governments, the private sector, and civil society. In Brazil, several groups – including the Concert for the Amazon and the Brazilian Coalition on Climate, Forests, and Agriculture – are playing a pivotal role in shaping the agenda and connecting stakeholders. And with the country’s federal government missing in action on this issue, local governments also are stepping up.

Concerted international and regional efforts – such as the Leticia Pact – combined with national and subnational interventions could create a brighter future for the Amazon. The health of the planet depends on it.

Robert Muggah, Juan Carlos Castilla-Rubio, and Julia Sekula contributed to this commentary.

Ilona Szabó, Co-Founder and President of the Igarapé Institute, is an affiliate scholar at Princeton University’s Brazil LAB and a public policy fellow at Columbia University

Copyright: Project Syndicate, 2021.

As global society keeps pursuing a zero-carbon energy system, hydrogen’s role is becoming more notable. Updates and progress around the topic are now being broadcasted at an increasing pace, extending to areas that promise a significant role for hydrogen. Just a couple of years ago, everyone had agreed that hydrogen would gain a meaningful share by around 2050. However, these days, due to sanctioned projects and the advancement of the related technologies with a set of adopted strategies, it is believed that the hydrogen era will materialise much earlier.

Hydrogen is not the only piece of the puzzle to achieve carbon neutrality, but it is the one that promises a feasible pathway towards net zero-emission through complementing other routes such as electrification and natural gas coupled with CCUS (carbon capture, utilisation and storage). The supremacy of hydrogen is based on the possibility that it can be employed to decarbonise the so-called hard-to-abate sectors or in sectors in which other decarbonisation pathways, such as electrification, are challenged. These sectors include but are not limited to steel, iron and cement, as well as heavy long-haul vehicles, aviation, and maritime and railways transportation. The GECF Hydrogen Scenario encompasses some of these recent developments in its latest update, which was published in February 2021. The Scenario has taken into consideration the latest updates and strategies adopted by countries and groups and assessed their impacts.

Currently, several countries have officially published their hydrogen strategies or hydrogen roadmaps. In some of the roadmaps and strategies such as the EU Hydrogen Strategy, the main priority has been attached to renewable hydrogen. While in some others, such as for Japan, Russia, and South Korea, blue hydrogen is envisaged to take a meaningful role. In certain strategies, definite and clear targets are set, like for the EU Hydrogen Strategy that considers a minimum of 40 GW installed renewable hydrogen electrolyser or 10mn tonnes (mt) of renewable hydrogen by 2030. Within the EU Hydrogen Strategy, another 40 GW is also defined as a target to install in the neighbouring countries and import to the EU. According to the latest results from the updated GECF Hydrogen Scenario which assumes a practical penetration of hydrogen into the future of the energy system, the demand for hydrogen by 2050 will increase by more than four times. However, the carbon saving through this hydrogen penetration is forecasted to be less than six (6) GtCO2 – far below the amount needed to achieve the Paris Agreement goals.

This result emphasises that, firstly, the hydrogen production supply chain needs to advance in all parts, and the cost should be reduced to gain more share in the future of the energy system. Secondly, the result highlights that hydrogen could not be the only solution in the carbon neutrality pathway, and other clean and decarbonised options, such as the application of natural gas coupled with CCUS has to be seriously taken into consideration by all stakeholders. Henceforth, let’s take a look at some results and forecasts from the Reference Case Scenario (RCS) of the latest GECF Global Gas Outlook 2050 (GGO 2050), as it will enable a clear view of the potential needs to fully decarbonise the hard-to-abate energy sectors when hydrogen is hypothetically assumed to take a sole role. According to the RCS results, the total EU transport demand in so-called hard-to-abate sectors will be reduced from 217mn tonnes of oil equivalent (mtoe); in 2019 and pre-Covid-19 pandemic situation, to around 150 mtoe by 2050. This reduction is primarily due to the energy efficiency enhancement of the fleets. In order to produce 150 mtoe of energy, around 52mt of hydrogen is needed, requiring more than 500 GW of electrolyser. This should be added to the demand from the iron, steel, and cement industry (other assumed hard-to-abate sectors.) The fossil fuel demand (coal, natural gas and oil products) from these sectors in the EU is forecasted to stand at 24 mtoe by 2050. To meet this level of demand only with green hydrogen, around 70 GW of the electrolyser must be installed. Based on the forecasted demand levels, the EU will need around 570 GW of electrolyser capacity to decarbonise the aforementioned hard-to-abate sectors in case that the green hydrogen is assumed to be the only solution. Based on technical circumstances and the policy, in the EU Hydrogen Strategy, the target was set to 2 x 40 GW renewable hydrogen by 2030. Therefore, the needed electrolyser capacity for 2050 seems to be challenging but feasible in the EU. However, we still need to bear in mind some other salient points. The first point is that these results are based on assuming a successful effort in enhancing energy efficiency, and the level is subject to uncertainty. The second is that this is the volume needed only to decarbonise the referenced hard-to-abate sectors. Several other consuming sectors are supposed to be decarbonised through other pathways such as electrification.

They also create a massive volume of renewable electricity demand. A big question mark here is to gauge if there is a sufficient potential of renewable energies within the EU to accommodate all renewable electricity demand in the sectors and meet the electricity demand of electrolysers to produce green hydrogen. By looking into this subject from a global perspective, it can be observed that much more hydrogen is needed to decarbonise even these so-called hard-to-abate sectors. According to the latest modelling results published in GGO 2050, the global energy demand from hard-to-abate subsectors within transportation will stand at around 1800 mtoe per annum by 2050. In a hypothetical assumption, to provide this amount of energy only through green hydrogen production, more than 6,000 GW of electrolyser will be needed. This level is around five times more than the total current wind and solar installed capacity.

With similar calculations again on the imaginary only-green hydrogen assumption, 1,500 GW of electrolyser should be installed for the decarbonisation of iron, steel, and cement sectors. While numerous sectors are still not included in these calculations, other measures are assumed for the purpose of decarbonisation as well. In conclusion, the undeniable fact is that that there is no sole solution for carbon neutrality. Indeed, a combination of measures needs to be applied to achieve a net-zero emission. Apart from the energy conservation and energy efficiency enhancement that results in a reduction in final energy demand, clean energy supply should be diversely sourced from all clean available potentials. Renewables, natural gas, and CCUS will take greater roles in their original form, and all of them should contribute to the hydrogen production. In closing, renewables, natural gas, CCUS, and hydrogen are inevitable parts of a fully decarbonised energy system.

China overtook the US to lead a boom in global green-bond issuance in the first quarter, but analysts said it needs to do more to draw investors to help fund President Xi Jinping’s estimated $21tn carbon neutrality pledge.
Pending tasks include raising investor awareness of the environment, harmonising fragmented rules and tackling ‘greenwashing’, or issuers’ efforts to inflate their green credentials, they said.
At stake is Beijing’s goal of net zero carbon emissions by 2060.
Chinese issuers including banks, property developers, power generators and railway operators sold $15.7bn of bonds during January-March period to fund ‘green’ projects such as clean and renewable energy, according to Refinitiv data.
The volume of such bonds, mostly yuan-denominated, almost quadrupled from a year earlier, the data showed.
That exceeds the roughly $15bn of such bonds sold by US issuers in the first quarter, and helped drive a tripling of green bond issuance globally.
Green bonds blossomed “largely thanks to China’s recovery from the coronavirus,” said Nathan Chow, strategist at DBS. “In addition, the Chinese government is going all out to develop this market this year.”
China, the world’s biggest emitter of carbon dioxide, needs 140tn yuan ($21.33tn) of debt financing over the next 40 years to meet its net-zero emissions target, investment bank China International Capital Corp (CICC) estimates.
With roughly 800bn yuan of green bonds outstanding, China is already the world’s second-biggest green bond market after the US.
However, green bonds account for less than 1% of China’s $18tn bond market.
At this stage, “companies have no cost advantages issuing green bonds…and there’s not enough market support for many green projects which take a long time to complete and are seen as risky,” said CICC economist Zhou Zipeng.
Highlighting such headwinds, China’s first batch of “carbon neutral” bonds, launched in February, met tepid demand.
Several fund managers said green bonds are not yet on their investment radar.
“The only thing Chinese investors currently look at is yield. So obviously if green bonds cannot offer the extra returns, they ask the government, ‘what can you do to help me?’,” said Ricco Zhang, Asia-Pacific director of the International Capital Market Association (ICMA).
A brokerage source said state-owned companies were motivated to issue green bonds to align with government priorities, but investors lacked incentives to buy them.
Authorities are aware of the problems.
Earlier this month, Chinese central bank governor Yi Gang called for incentives to boost private participation in meeting Beijing’s carbon goals.
Moving closer to international standards by excluding coal from the green market would widen the potential foreign investor base, Chow of DBS said.
ICMA’s Zhang said regulators also need to harmonise different domestic standards.
Currently, China’s central bank, securities regulator and the state planner have separate rules for green bonds issued under their supervision.
“Sometimes it’s hard for international investors to have a granular understanding of different (Chinese) green bonds. This brings challenges for green investors to identify the right target for investment,” he said.

Europe’s largest oil and gas companies are leaving U.S. rivals further and further behind in the race to cut their reliance on fossil-fuel sales.

Total SE, Galp Energia SGPS SA, Equinor ASA, Royal Dutch Shell Plc and Eni SpA are leading the pack, while Exxon Mobil Corp. and Chevron Corp. are among the laggards, according to newly released climate-transition scores from BloombergNEF and Bloomberg Intelligence.

A big reason for this state of affairs is that Europeans are investing far more in renewable energy, battery storage, electric-vehicle charging points, carbon-capture technology and other decarbonization efforts, said Jonas Rooze, head of sustainability research at BNEF. For example, five European companies account for 51% of all renewable energy assets held by the world’s 39 largest oil and gas producers. However, it’s worth noting that this is all relative—these companies still devote most of their capital expenditures on climate-changing fossil fuels, he said.

WASHINGTON (Reuters) – The World Bank is working with the International Monetary Fund (IMF) on ways to factor climate change into the negotiations about reducing the debt burdens of some poor countries, World Bank President David Malpass told Reuters in a Friday interview.

Three countries – Ethiopia, Chad and Zambia – have already initiated negotiations with creditors under a new Common Framework supported by the Group of 20 major economies, a process that may lead to debt reductions in some cases.

Malpass said he expected additional countries to request restructuring of their debts, but declined to give any details.

The coronavirus pandemic has worsened the outlook for many countries that were already heavily indebted before the outbreak, with revenues down, spending up and vaccination rates lagging far behind advanced economies.

China, the United States and other G20 countries initially offered the world’s poorest countries temporary payment relief on debt owed to official creditors under the Debt Service Suspension Initiative (DSSI). In November, the G20 also launched a new framework designed to tackle unsustainable debt stocks.

Malpass said the Bank and the IMF were studying how to twin two global problems – the need to reduce or restructure the heavy debt burden of many poorer countries, and the need to reduce fossil fuel emissions that contribute to climate change.

“There’s a way to put together … the need for debt reduction with the need for climate action by countries around the world, including the poorer countries,” he said, adding that initial efforts could happen under the G20 common framework.

Factoring climate change into the debt restructuring process could help motivate sovereign lenders and even private creditors to write off a certain percentage of the debt of heavily-indebted poorer countries, in exchange for progress toward their sustainable development and climate goals, experts say.

The World Bank and the IMF play an important advisory and consultative role in debt restructuring negotiations since they assess the sustainability of each country’s debt burden.

Many developing countries require huge outlays to shore up their food supplies and infrastructure as a result of climate change. Governments must also spend a large amount on alternative energy projects, but lack the resources to pay for those needed investments.

“There needs to be a moral recognition by the world that the activities in the advanced economies have an impact on the people in the poorer economies,” Malpass said.

“The poorer countries are not really emitting very much in terms of greenhouse gases, but they’re bearing the brunt of the impact from the rest of the world,” he added.

IMF Managing Director Kristalina Georgieva earlier this month told reporters about early-stage discussions underway about linking debt relief to climate resilience and investment in low-carbon energy sources.

Doing so, she said, could help private sector creditors achieve their sustainable development targets, she said.

“You give the country breathing space, and in exchange, you as the creditor can demonstrate that it translates into a commitment in the country that leads to a global public good,” she said.

A key House lawmaker unveiled plans to pursue tax breaks for renewable energy as a way to ease the shift away from fossil fuels in President Joe Biden’s upcoming infrastructure bill.

“Transitioning away from fossil fuels is going to require some tax incentives,” House Ways and Means Chairman Richard Neal, a Massachusetts Democrat, said Friday at a virtual tax policy event.

The administration has already started engaging with top lawmakers on Biden’s economic rebuilding program — his longer-term follow-up to the Covid-19 relief package. The $1.9 trillion aid bill is currently moving through the House, and Biden is expected to unveil his second initiative later this month; some economists see it weighing in at $2 trillion.

Neal said he’s looking at tax incentives for clean energy and renewable technologies, an approach that dovetails with Biden’s campaign promises to boost subsidies for green investments, energy efficiency and electric vehicles. Biden has also directed federal agencies to stop subsidizing fossil fuels and plans to ask Congress to zero-out oil and gas industry incentives.

“I don’t think the federal government should give handouts to Big Oil to the tune of $40 billion in fossil-fuel subsidies,” Biden said Jan. 27.

A likely Democratic objective is expanding a tax credit currently valued at as much as $7,500 for the purchase of an electric vehicle, such as those made by Tesla Inc. and Ford Motor Co. Automakers have encouraged lawmakers to expand the incentive by lifting a per-manufacturer cap on available credits.

Lawmakers also may restructure the credit to better target it to lower-income motorists and ensure its benefits don’t flow mostly to wealthy Americans; that could come in the form of a phase-out for higher-income taxpayers.

Existing tax credits help support construction of energy-efficient commercial buildings, wind farms and solar arrays, as well as the capture of carbon dioxide. But some clean-energy advocates have asked Congress for tax incentives to better support the development of large, grid-scale power-storage systems that can help bolster intermittent renewable energy production.

Neal said he believes that an infrastructure bill could get bipartisan support. That’s a view shared by Republican Senator Shelley Moore Capito of West Virginia, who was one of several lawmakers to meet with Biden about infrastructure on Thursday.

Bipartisan Outreach

“The president listens. He’s interested in a give and take,” Capito, the top GOP member of the Senate Committee on Environment and Public Works, told reporters after the meeting. “It’s been very sincere and very clear. No promises made, but he knows that our committee could work.“

Capito said the lawmakers are still discussing how to pay for such a plan, a challenge that’s halted infrastructure talks in the past. Lawmakers have resisted increasing the tax on gasoline, which since 1993 flows to the Highway Trust Fund, and the scope of the plan will likely require other tax hikes, including on U.S. businesses and their foreign profits.

Neal signaled that any tax increases wouldn’t immediately go into effect, citing the continuing Covid-19 crisis.

“We need to put the pandemic and the recession behind us before we have this conversation,” he said.

— With assistance by Erik Wasson

US President Joe Biden’s push to slash carbon emissions may inadvertently give a short-term boost to energy companies in one of the world’s biggest polluters.
Investors are betting that Russian oil giants such as Lukoil PJSC, Rosneft PJSC and Tatneft PJSC will rally as they mop up market share from rivals in the US and other countries seeking to switch to clean energy. An index of Russian energy stocks has returned 8% in dollar terms so far this year as crude prices rallied, compared with 2% for European oil and gas companies.
“Governments will likely limit global companies’ capacities to drill and extract resources,” said Eduard Kharin, who helps oversee $1bn of assets at Alfa Capital Asset Management in Moscow. “The global majors are entering a new market, a new industry where there are a lot of unknowns, and the return on capital is unclear.”
Russia is the world’s fourth-biggest carbon emitter, but unlike other major polluters, the government doesn’t have a plan to transition away from fossil fuels. Instead, its state-owned energy companies benefit from some of the world’s lowest production costs and tax breaks, making them well placed to gain in the short term.
Global oil companies will stop investing in exploration and shift to clean energy, “but somebody still needs to produce oil,” said Ekaterina Iliouchenko, a money manager at Union Investment Privatfonds GmbH in Frankfurt, who increased exposure to Russian oil stocks last year. “That’ll be the Russians and Saudi Aramco”.
Rosneft and Lukoil have been among the best performers in Russia’s benchmark equity index so far this year, handing investors total returns of 15% and 12% in dollar terms. They’ve also outperformed an index of global energy stocks.
Of course, any benefits will be short lived if major economies are serious about speeding up the shift to clean energy to limit global warming. Biden is planning to set a net-zero target for the US for 2050, meaning that 70% of the world economy will soon have made commitments to be carbon neutral by the middle of the century.
Many international funds are also coming under increasing pressure to cut companies that contribute to global warming from their portfolios. President Vladimir Putin was quizzed at an online investment forum late last year over how his country plans to cut emissions, and Swedbank Robur subsequently excluded oil and gas companies from its Russia and Eastern Europe funds.
Rosneft this month signed an agreement with BP Plc to co-operate to produce “low-carbon solutions,” but critics pointed out that the plan is at odds with the Russian company’s focus on expanding hydrocarbon production.
Biden signed an executive order late last month suspending new oil and gas leases on public lands, directing federal agencies to purchase electric cars by the thousands and seeking to end fossil-fuel subsidies.
The move could hurt US shale producers, whose output helped put a cap on gains in global oil prices in recent years.
A raft of European oil companies have recently set climate targets, with BP stunning investors by promising to eliminate emissions from its operations by 2050.