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Good morning and welcome to Energy Source from London and Brussels.
First, I want to point you to Amanda Chu's excellent research on the delays faced by some of the largest U.S. manufacturing investments announced in the first year of Joe Biden's flagship industrial and climate policies.
The President's Inflation Control Act and Semiconductor and Science Act provided more than $400 billion in tax credits, loans and grants to encourage the development of America's clean technology and semiconductor supply chains. This has spurred a wave of investment, but of the 114 large projects tracked by the FT (each worth more than $100 million), a total of $84 billion, or 40%, have been delayed by anything from two months to several years, or put on hold indefinitely.
Among the largest projects on hold are Enel's $1 billion solar panel factory in Oklahoma, LG Energy Solutions' $2.3 billion battery storage facility in Arizona and Albemarle's $1.3 billion lithium refinery in South Carolina.
Amanda and her team conducted over 100 interviews with companies and state and local officials to understand the status of the project. If you missed the news yesterday, be sure to check it out.
Businesses blamed weak market conditions, slowing demand and policy uncertainty in a crucial election year. Additionally, some pointed to overcapacity of certain products in China, a theme also covered in a major report in Energy Source today by EU correspondent Alice Hancock.
Thanks for reading – Tom Dec 23 '13 at 14:43
Chinese biofuel imports raise concerns in Europe
European energy companies have seen prices fall due to cheap imports from China, hitting the industry hard and leading to plant closures.
Sound like the solar industry? No. This time it's Europe's biofuels sector that's sounding the alarm.
Biofuels are liquid fuels made from easily replenished resources such as used cooking oil, waste materials, and algae. Biofuels generally burn cleaner than fossil fuels, but as an alternative fuel, they are still in short supply.
Despite the pent-up demand, energy companies have been shutting down plants and laying off workers over the past two months. Chevron, which laid off workers at its German biofuel plant in July, blamed a “flood of the market” with allegedly illegally imported biofuels, biofuels made from uncertified feedstocks and dumped biodiesel from China.
Around the same time, Shell suspended construction of a large biofuel plant in Rotterdam, and Argent Energy announced plans in March to end production at its Scottish biodiesel plant.
In Germany, one of Europe's largest biofuel markets, prices have halved over the past year, according to the European Biodiesel Council.
“Chinese biodiesel industry has developed over the past few years almost exclusively targeting the EU market,” the EBB said in a letter to the European Commission, calling for urgent anti-dumping measures.
“The EU receives more than 90 percent of all Chinese biodiesel exports,” the trade group added, saying “the EU must act before it is too late.”
The European Commission finally acted last month, announcing tariffs of 12% to 36% on biofuel imports from China that went into provisional effect on Friday and require approval by member states to become permanent.
But Brussels has excluded sustainable aviation fuel from the measure, in part because it is seen as a key way to decarbonise jet aircraft and because it currently accounts for only a small part of China's imports.
The UK announced its own anti-dumping investigation in June and is considering whether to include the SAF.
Kian Delaney, biofuels campaigner at Transport and Environment, warned that excluding SAF could pave the way for tax avoidance, saying: “Now that they've excluded SAF, there's been a turnaround and we'll probably see more SAF (coming from China) than before.”
The EBB agreed, saying it was “seriously concerned by the EU's unexpected exemption of dumped Chinese sustainable aviation fuel.” Chinese sustainable aviation fuel producers plan to increase production in response to the exemption, Argus Media reported.
Delaney said another big issue was fraudulent biofuel imports, which he added were likely to increase as airlines and other energy-intensive industries rush to meet more sustainable fuel targets.
“The current situation regarding imports of used cooking oil and increased demand due to the SAF mandate will create an urgent need to purchase this product and will result in limited supply,” he said.
T&E warns that a significant proportion of imported biofuels may be mislabelled to disguise palm oil-based fuel – a feedstock the EU wants to avoid because it is a major driver of deforestation.
Germany, the Netherlands and France in June urged the European Commission to impose tougher checks on biofuel importers to prevent them from circumventing tough EU standards, but no action has been taken yet.
And there was some good news in Europe.
Although temperatures are hitting record highs in Brussels, there is some good news when it comes to green energy.
Despite rising electricity demand, wind and solar power will surpass fossil fuel generation for the first time in the EU in the first half of 2024.
According to energy think tank Enver, the two sources account for a record 30 percent of the EU's electricity mix, signaling some success in efforts to reform the EU's energy system away from fossil fuels.
Fossil fuels accounted for 27% of electricity generation in the first half of this year, down 17% from 2018, as coal use plummeted by about a quarter. Greenhouse gas emissions were 31% lower than in the first half of 2022, a drop that Enver described as “unprecedented.”
Analysts have previously blamed the decline in fossil fuel use on record energy prices following Russia's decision to cut gas supplies to the EU in 2022, which led industry to close factories and production lines, causing a sharp drop in demand across the EU.
But for the first time, Ember said the growth of wind and solar power was “the largest driver of the decline of fossil fuels.”
“This isn't just a case of a mild winter and good weather,” said Sarah Brown, European program director at Ember. “We show that the main driver is structural change and capacity growth,” said Alice Hancock.
power point
Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT's global team of journalists. For enquiries contact [email protected] and follow us on X: @FTEnergy. Past newsletters can be found here.
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