Tausi Insider

If you had to distill the theme of almost every UN climate summit into one word, it would be “coal.” Coal is the perennial bogeyman of the Conference of the Parties, as it is at the event’s latest edition, COP27, now under way in Egypt. By now there is essentially zero debate among governments, climate scientists and even the coal industry itself that holding global average temperature increases to 1.5 degrees Celsius above pre-industrial levels is impossible as long as coal remains the single-biggest source of power generation. It is the most carbon-intensive fossil fuel. Last year, coal emissions accounted for at least a quarter of all planet-warming carbon dioxide output, according to the International Energy Agency (IEA). The good news is that 75 countries, representing 95 per cent of total coal consumption, have pledged to reach net-zero emissions by 2050 or 2060, which means coal will have to be extracted from their energy mix fairly rapidly, at least in theory. The bad news is...

European refiners have found themselves oversupplied with crude as an expected shortage owing to the looming EU ban on Russian oil has yet to materialize. The front-month Brent crude futures spread narrowed sharply this week, reflecting better supply in the physical oil market as fears over the EU embargo on Russian crude begin to subside. Premiums on prompt prices to future prices – known as a backwardated market structure – usually indicate supply tightness. Traders cited Europe’s ability to replace Russian oil with grades from the Middle East, the United States and Latin America while Asia is asking for less crude because of an economic slowdown and increased use of Russian barrels. Brent futures prices have also slumped by about 7 per cent this week, weakening for a second week in a row. “There’s too much oil around,” one European crude trader said. “(European] refiners seem to have overbought in November and December, probably because of fears around Urals,” he said, adding that...

EU energy ministers meet in Brussels on Thursday to approve the latest set of emergency measures to mitigate an energy crisis, but the plans risk being eclipsed by disagreements over whether and how to cap gas prices. On the table are new draft laws to speed up permitting procedures for renewable energy sources, and to launch joint gas purchases for the 27 EU countries. Poland, Belgium, Italy and Greece threatened to block these if the package does not contain a gas price cap as well. A small but powerful camp led by Germany is opposed to a cap, however, saying that would prompt suppliers to sell elsewhere. Europex, the association of European energy exchanges, was among market participants to criticize plans for such an intervention. As temperatures drop on the continent ahead of the winter, the ministers will have another go at the matter that has divided the bloc for many months. The European Commission, the EU executive, has so far proposed applying the cap to month-ahead derivat...

Belgian Minister of Energy Tinne Van der Straeten attends an EU energy ministers meeting, in Brussels, on Nov. 24. JOHANNA GERON/Reuters On winter’s doorstep, European Union nations again failed to bridge bitter disagreements over a natural gas price cap Thursday as they struggle to effectively shield 450 million citizens from massive increases in their utility bills. An emergency meeting of energy ministers only showed how the energy crisis tied to Russia’s war in Ukraine has divided the 27-nation bloc into almost irreconcilable blocs. “The discussion was quite heated, and you all know that there are very divergent views,” said Czech Industry Minister Jozef Sikela, who chaired the meeting where ministers could not agree on when and how a price cap on gas purchases should kick in. A massive August spike in natural gas prices stunned all but the wealthiest in Europe, forcing the bloc to look for a cap to contain volatile prices that are fuelling inflation. But the EU is deadlocked bet...

A pedestrian walks past a shop in Paris, on Nov. 25. EMMANUEL DUNAND/AFP/Getty Images Europe’s retailers are hoping Black Friday discount day will get shoppers spending, though it is taking place against a backdrop of a worsening cost-of-living crisis and the distraction of the soccer World Cup. Retailers across Europe fear the overall Christmas trading season could be the worst in at least a decade as shoppers cut back, while the costs of doing business show no sign of abating, squeezing profit margins. Double-digit inflation has dented consumers’ purchasing power and their confidence is also at or close to the gloomiest on record as soaring energy bills add to the spiralling cost of living. But to help budget their finances, consumers have begun their Christmas shopping early this year and many are still shopping on Black Friday. Some consumers may, however, have other priorities, with Wales, England, the Netherlands and Poland all in action on Friday at the World Cup. Britons will...

People walk past the Europa-Center shopping mall, in Berlin, on Dec. 14, 2020. MICHELE TANTUSSI/Reuters The German economy grew slightly more in the third quarter than suggested by preliminary figures on the back of consumer spending, adding to signs that a coming recession will not hit as hard as initially feared, data showed on Friday. Europe’s largest economy expanded by 0.4 per cent quarter on quarter and by 1.3 per cent on the year, adjusted for price and calendar effects, the federal statistics office said. Analysts polled by Reuters had expected the economy to grow by 0.3 per cent on the previous three months and by 1.2 per cent annually. Household spending was the main reason for the increase, as consumers travelled and went out more after nearly all pandemic restrictions had been lifted. “It’s by no means a foregone conclusion that the third quarter’s GDP growth marks the end of positive growth rates for the time being,” said VP Bank chief economist Thomas Gitzel, who added ...

Christine Lagarde, President of the European Central Bank listens during a news conference in Frankfurt, Germany, on July 21. Michael Probst/The Associated Press The head of the European Central Bank said Monday she does not believe inflation has peaked after reaching the highest levels on record. ECB President Christine Lagarde also told European lawmakers that the bank isn’t through raising interest rates to combat those price spikes. There is too much uncertainty to know whether inflation, which hit 10.6% in October, would come down soon in the 19 countries that use the euro currency, Lagarde said. When looking at what is driving inflation, “whether it is food and commodities at large, or whether it is energy, we do not see the components or the direction that would lead me to believe that we have reached peak inflation and that it is going to decline in short order,” she said. That means the central bank will “continue to tame inflation with all the tools that we have,” primarily...

The French and U.S. flags adorn the Eisenhower Executive Office Building next to the White House for the state visit of French President Emmanuel Macron in Washington on Nov. 29. LUDOVIC MARIN/AFP/Getty Images The City of Light is looking somewhat less brilliant this holiday season as Parisian streets and monuments lower the wattage on Christmas bulbs and switch them off earlier than usual to conserve energy and set an example for French consumers. Historically a net exporter of electricity to its European neighbours, France has become a net importer of power this year as a record number of its nuclear reactors simultaneously undergo shutdowns for maintenance. The timing could not be worse, with European energy prices skyrocketing since Russia’s invasion of Ukraine. The French government, which caps electricity rates for consumers, is hence shelling out tens of billions of euros this year and next to subsidize power imports. This is just one of the gripes French President Emmanuel Ma...

European Commissioner for Energy Kadri Simson speaks to reporters at the EU headquarters, in Brussels, on Nov. 24. KENZO TRIBOUILLARD/AFP/Getty Images The European Union’s energy chief on Wednesday defended the bloc’s proposal to cap gas prices and said countries will negotiate possible changes to the proposal, after a backlash from EU member states. After months of infighting among EU countries who disagree on whether to cap energy costs, the European Commission last week proposed a price cap that would kick in if the front-month Title Transfer Facility gas price exceeded 275 euros per megawatt-hour for two weeks and was 58 euros higher than a liquefied natural gas reference price for 10 days. The EU proposal came under fire from countries in favour of a gas price cap to reduce citizens’ high energy bills – with Poland’s energy minister calling the proposal “a joke” and analysts suggesting it was designed with such strict criteria that it would never be used. “This was not our aim, ...

International Monetary Fund managing director Kristalina Georgieva said on Thursday the chance of global growth falling below 2 per cent next year was increasing due to continued effects of the war in Ukraine and simultaneous slowdowns in Europe, China and the United States. Georgieva told the Reuters NEXT conference that she was particularly concerned about the slowdown in China because the world’s second-largest economy has been a strong engine of global growth. The IMF will update its economic outlook in January and the picture “has darkened recently on the basis of what we see in consumer sentiment, in investor sentiment,” she said. https://www.tausiinsider.com/imf-chief-sees-higher-chance-of-global-growth-below-2-in-2023/?feed_id=331508&_unique_id=64554966d557c

Volkswagen VWAGY has begun searching for a site for the German carmaker’s first battery-cell factory in North America, its CEO announced on Thursday. Confirming an earlier Reuters story, Volkswagen CEO Oliver Blume and Canadian industry minister Francois-Philippe Champagne signed an addendum to their existing memorandum of understanding from August, agreeing to identify suitable sites for the planned cell plant. Blume said that battery technology was key for the company’s strategy and that it was committed to investing in North America. “Canada is one logical option for the construction of a gigafactory in the region of North America,” he said, adding it offered ideal economic conditions and high sustainability standards. Such a plant would be Volkswagen’s first gigafactory outside Europe. Volkswagen’s battery subsidiary Powerco also announced it was extending a deal to co-operate with Belgium’s Umicore on shipping cathode material to Canada. The German auto giant said it was a long-...

The Vladimir Arsenyev tanker at the crude oil terminal Kozmino in Russia, on Aug. 12. TATIANA MEEL/Reuters The Kremlin’s ability to pay for its war in Ukraine depends largely on the sale of hydrocarbons. Oil and natural gas represent 20 per cent of Russia’s GDP and haul in almost half of its budget income. Cut that Volga-River-sized flow of cash into the Russian money vaults and President Vladimir Putin will be forced to sue for peace. Or so the theory goes. Since the start of the war in February, the West, especially the European Union, has imposed wave after wave of sanctions, embargoes and trade measures against Russia, ranging from ejecting Russian banks from the Swift global financial messaging system to virtually eliminating Russian coal from the European electricity-generation mix. The Western assault has pushed Russia into recession (though not one as deep as expected). But oil exports, the lifeblood of its economy, continues to prop up Mr. Putin’s war machine. In the first h...

Passengers queue for the check in desk at Heathrow airport, in London, on June 1. HANNAH MCKAY/Reuters Global airlines are predicting their first industry-wide profit since 2019 next year as air travel rebounds from COVID-19 restrictions, while a new war of words erupted with airports on Tuesday over rising air fares and ground charges. Airlines lost tens of billions of dollars in 2020 and 2021 due to the pandemic, but air travel has partially recovered and some airports have struggled to cope. The International Air Transport Association (IATA) now expects a net profit of $4.7-billion for the industry next year, with more than 4 billion passengers set to fly. It had previously said only that profits were “within reach” in 2023. For 2022, IATA narrowed its forecast for industry-wide losses to $6.9-billion from $9.7-billion. “That is a great achievement considering the scale of the financial and economic damage caused by government-imposed pandemic restrictions,” IATA Director General ...

Alphabet GOOGL-Q unit Google must remove data from online search results if users can prove it is inaccurate, Europe’s top court said on Thursday. Free speech advocates and supporters of privacy rights have clashed in recent years over people’s “right to be forgotten” online, meaning that they should be able to remove their digital traces from the internet. The case before the Court of Justice of the European Union (CJEU) concerned two executives from a group of investment companies who had asked Google to remove search results linking their names to certain articles criticizing the group’s investment model. They also wanted Google to remove thumbnail photos of them from search results. The company rejected the requests, saying it did not know whether the information in the articles was accurate or not. A German court subsequently sought advice from the CJEU on the balance between the right to be forgotten and the right to freedom of expression and information. “The operator of a sea...

Airfares on key corporate travel routes are expected to rise by as much as 25 per cent in 2023 amid high fuel prices, a stronger U.S. dollar and labour and aircraft shortages, a forecast from American Express Global Business Travel (Amex GBT) showed. The biggest gains are expected in economy class on routes between Australia and Asia, in business class on Australian domestic flights and those to New Zealand, as well as in economy class on Asia-Europe flights. The cost of economy class flights within North America will rise by a more muted 3 per cent and within Europe by 5.5 per cent as capacity cuts during the pandemic are restored. “Following significant price increases in 2022, fare rises in the competitive North America air sector are likely to be of a smaller degree than those forecast for Europe and Asia Pacific,” Amex GBT said on Thursday. Flights from Asia to Europe are being forced to take longer routes in many cases as airlines avoid Russian airspace because of its war with ...

French energy giant TotalEnergies said Friday that it will walk away from its stake in Russian natural gas producer Novatek and take a $3.7 billion loss. TotalEnergies, which has come under criticism for pursuing some of its projects in Russia amid the war in Ukraine, said Western sanctions prevent it from selling its 19.4% stake to the Russian company. It said it was withdrawing its representatives from the Novatek board, who have been abstaining from voting because of sanctions, with “immediate effect.” As a result, TotalEnergies will no longer account for its ownership interest in Novatek, which will lead it “to record an impairment of approximately $3.7 billion in the accounts for the 4th quarter of 2022,” the French company said in a statement. In line with its “principles of conduct” published on March 22, TotalEnergies “has gradually started to withdraw from its Russian assets while ensuring that it continues to supply gas to Europe.” It comes amid an energy crisis in Europe p...

Officials speak ahead of an extraordinary meeting of EU energy ministers at the European Council building, in Brussels, on Dec. 13. Virginia Mayo/The Associated Press European Union energy ministers meeting in Brussels on Tuesday failed to strike a final deal on a bloc-wide cap on natural gas prices, after months of infighting over whether the measure can ease Europe’s energy crisis. Responding to repeated requests from some countries, the European Commission proposed a price cap last month as the latest EU response to the economic upheaval caused by Russia cutting natural gas deliveries to Europe this year, leading to energy price spikes. But with countries deeply divided over the details of the proposed cap, Tuesday’s meeting did not yield a final decision – leaving EU energy ministers to try again for an agreement at another meeting on Dec. 19. “We have made progress, but we are not done yet. Not all questions could be answered today,” German Economy Minister Robert Habeck said af...

European Union countries intend next year to push for more gas deals – including long-term contracts – to replace Russian supplies, draft conclusions for an EU leaders’ summit on Thursday showed. The draft, seen by Reuters, said the EU should move quickly to start jointly buying gas – an idea suggested by the EU last year to use the bloc’s heft as the world’s biggest gas market to negotiate lower prices, but which it has yet to put into practice. At the same time, countries should also accelerate talks with reliable suppliers “to secure the supply of gas in view of winter 2023/2024 with a view to concluding long-term contracts,” said the draft, which could change before it is adopted by leaders. Russia was Europe’s top gas supplier but has cut off the majority of European deliveries since its invasion of Ukraine in February, sending energy prices soaring and driving EU countries to secure extra supplies from Algeria, Norway and the United States. Brussels has said the majority of Rus...