Green Markets - April 5, 2025

Apr 05, 2025

Green Markets is a weekly series dedicated to highlighting events of interest that could impact investments within environmental markets.

President Trump announced sweeping new tariffs invoking emergency powers, imposing a 10% baseline tax on all imports and much higher rates on major trading partners like China (34%) and the EU (20%) aimed at promoting U.S. manufacturing and achieving trade "reciprocity." This significant tax increase, bypassing Congress, risks triggering broad trade wars, disrupting global supply chains, and causing substantial inflation for American consumers and businesses, potentially leading to an economic slowdown.
The European Parliament voted decisively on April 3rd, 2025, to approve delays in the implementation of key EU sustainability rules, namely the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). This proposal postpones the CSRD application by two years for companies not yet reporting and the implementation of CSDDD by one year. The delays are part of a wider push, known as the Omnibus I package, aimed at significantly reducing the regulatory and reporting burden on companies, especially smaller ones, potentially shrinking the scope of required disclosures considerably.
The US Department of Energy is proposing to dismantle its Office of Clean Energy Demonstrations, cutting approximately $9 billion in awards for projects focused on carbon capture, direct air capture, solar, battery storage, and several regional hydrogen hubs. A final decision on the proposal could be made as early as next week.

Russia and the United States have initiated discussions regarding potential joint projects focused on rare earth metals and other resources within Russia. Some American companies have already expressed interest in these potential Russian projects. Further discussions on this cooperation might take place during the next round of Russia-U.S. talks, potentially scheduled for mid-April in Saudi Arabia.
Responding to new U.S. tariffs, China implemented export controls on several key rare earth elements and related products like magnets starting April 4th, 2025. The country is set on tightening its grip on minerals crucial for Western defense, electronics, and EV industries. While stopping short of a full ban, the controls allow Beijing to restrict shipments via licensing and are seen as a significant escalation in the U.S. - China trade dispute.

The US Department of Agriculture announced the release of $537 million in federal grants for 543 biofuel infrastructure projects across 29 states, combining nearly $260 million in new Trump administration commitments with previously obligated funds. Distributed through the Higher Blends Infrastructure Incentive Program (HBIIP), the funding aims to boost sales and consumption of ethanol and biodiesel by helping companies install or upgrade pumps, storage tanks, and blending equipment for higher biofuel blends.

Singapore's first government tender seeking high-quality, nature-based carbon credits garnered significant market response, attracting nearly $1 billion (S$1.3 billion) in total bids from 17 different submissions. Commodity trading giants Trafigura and Mercuria Asia Resources placed the largest bids for the credits, which must be delivered by February 2031 and meet criteria including alignment with Article 6 of the Paris Agreement. Following the strong interest in this initial round, the government intends to launch a second tender for at least 500,000 additional nature-based credits later in 2025.

A new analysis from Westwood Global Energy Group suggests Europe is unlikely to meet its 2030 hydrogen production targets, projecting that only 17% of the planned EU project pipeline will materialize by then without significant market intervention due to regulatory delays, high costs, and weak demand. The report indicates a similar challenge for the UK, estimating only up to 24% of its pipeline might be realized.
Major oil companies, including BP dissolving its mobility team and Shell closing its California stations, are significantly scaling back or exiting hydrogen initiatives for transportation. The author contends this retreat isn't due to market immaturity but stems from the fundamental economic and practical challenges hydrogen faces against battery-electric solutions for both light-duty vehicles and heavy trucking. While some firms like TotalEnergies continue building subsidized infrastructure and others like ExxonMobil focus purely on industrial hydrogen production… the broader trend suggests the oil majors see little future for hydrogen as a widespread transportation fuel. The piece concludes that hydrogen's realistic application lies primarily in replacing existing industrial feedstocks, not in powering the movement of people and goods.

The U.S. government is set to rescind a Biden-era policy that mandated new LNG projects begin exporting within seven years of receiving regulatory approval. This policy, implemented in April 2023, faced opposition from the LNG industry, which argued that many projects require longer development times. Under the new approach, the Department of Energy will revert to its previous practice, considering requests to extend the export commencement deadline on a case-by-case basis for good cause.
The United Nations’ International Maritime Organization (IMO) is meeting in London over the next two weeks to discuss a potential levy on greenhouse gas emissions.
- Shipping giant Maersk is warning that a proposed global emissions trading scheme (ETS) could promote the use of LNG over greener alternatives. The Danish company contends that the plan fails to adequately penalize LNG emissions, potentially making it a cheaper option for shipowners compared to truly low-carbon fuels like green methanol.

The North American uranium market is experiencing a significant slowdown as U.S. nuclear power companies pause purchases and delay new contracts due to the uncertainty surrounding potential tariffs on Canadian imports threatened by President Trump. Heavily reliant on Canada for fuel, US utilities are hesitant to commit while awaiting clarity on the scope and timing of the levies.
A Texas state representative has introduced legislation proposing $2 billion in taxpayer-funded incentives to revitalize the state's long-dormant nuclear power industry by offsetting costs and encouraging the construction of new plants. The bill (HB 14), aims to establish a dedicated state office and provide grants to new nuclear developments.

Japan's Government Pension Investment Fund (GPIF) has introduced a comprehensive new policy prioritizing sustainability-focused investments, incorporating ESG and impact factors across its extensive portfolio. As a "universal owner," GPIF believes reducing sustainability risks and fostering sustainable corporate growth are crucial for overall market stability and its investment performance.

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