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RTÉ News
5 days ago
- Business
- RTÉ News
Hopes of EU-US trade deal ahead of August deadline
It was Ursula von der Leyen's late afternoon social media post that confirmed a deal is on. All the hard work has been done by trade negotiators. But US President Donald Trump likes to seal the deal himself with a high-level figure - that is why his own press office likes to call him "the closer". Of course it is not done till it is done. But there is no way Ms von der Leyen is getting on a plane tomorrow morning in hope: there is a deal to be sealed - though she will probably have to sweeten it a little in the end to get the closer to close. During the week he personally closed deals with the prime ministers of Indonesia and the Philippines (Ferdinand Marcos Junior) and with Japan's senior trade negotiator (Prime Minister Ishiba's LDP party had lost its parliamentary majority in elections last Sunday, and he is expected to resign). Taoiseach Micheál Martin is hopeful the deal can be signed - though he says it will be an outline deal, leaving much detail to be filled in later. But it should give some certainty to businesses to enable them to get on with planning. (The US President will meet UK Prime Minister Keir Starmer to "flesh out" the outline deal he made with the British in May - the headline in that is a 10% tariff on British imports to the US). Mr Trump was certainly talking up prospects of an EU deal as he left the White House yesterday. "I would say that we have a 50:50 chance of making a deal with the EU, and it will be a deal where they have to buy down their tariffs, because they are right now at 30% and they'll have to buy them down maybe, or they could leave them the way they are," Mr Trump said. "But they want to make a deal very badly. I would have said we have a 25% chance with Japan. And they kept coming back, and we made a deal. "The biggest part of the Japan deal, and maybe we get this with the EU, maybe we don't, is that we have the right to go in and trade. We have the right - they've totally opened Japan to the US," he added. Note the phrase "buy down their tariffs". What is Europe offering the US that Mr Trump thinks is worth reducing the tariff rate from 30% to 15%? Big purchase agreement on energy expected Part of the deal is expected to be a big purchase agreement on energy. The day after the Presidential election last November, Ms von der Leyen offered to negotiate a massive gas contract with America, knowing that Mr Trump was coming gunning for the EU on trade. That deal, she said, could more or less close the annual trade gap between the EU and US. And besides a new gas supplier was needed, after Russia put itself beyond the pale by invading Ukraine. This will be Liquified Natural Gas (LNG), which is why the Irish Government has stamped on the accelerator of getting a long talked about LNG terminal built in Limerick. The gas plays into Mr Trump's campaign rhetoric of "drill baby drill" and energy dominance. But there will be many more elements, as even a deal to supply 450 million Europeans with gas will not be big enough. Mr Trump complains a lot about market access, particularly in relation to cars and food. In general the EU market is very open to US products and services. Look around your own home, shops, businesses - what American stuff do you not have? (genuine, made in USA stuff, not made in China with US marketing hype). Mr Trump is wrong about the car market being closed to US producers - Ford dominates the light commercial market on both sides of the Atlantic, while in left-hand drive mainland Europe, pretty much any American car is available to consumers - if they can afford the running costs. It is not the huge bulk of the vehicles that is the chief problem (though it is a problem): it is the huge cost of feeding the massive and inefficient engines they use. On food, there is a bigger problem, and it is the extra chemicals and hormones that go into the US food chain that are banned in Europe (a ban strongly supported by consumers). Mr Trump's own Health Secretary, Robert F Kennedy Jr frequently mentions the thousand food ingredients that are banned in Europe but allowed in the US as a bad thing - for the US consumer and the health of the nation. His mission statement is MAHA - Make America Healthy Again, and he is trying to ban or force the discontinuance of these additives. Europe does have a quota for US beef - but only if it has been grown without artificial growth hormones. Chicken is washed in chlorine in the US, to kill off health threatening bacteria. The practice is banned in Europe, but the EU has a higher rate of food poisoning from chicken. In trade talks in 2012, Eurocrats said they had an alternative method that would satisfy both EU and US health norms, but those talks went nowhere. Critics of the US use of chlorine washing say it covers up lower animal welfare standards. None of this is likely to feature in talks in Scotland. But yesterday there was an unexpected development when Australia announced it would take imports of US beef. It has been quite a closed, protected market - but producers there also doubted the US could supply much beef to Australia anyway, as its own beef industry, they claimed, could not satisfy local demand for beef and needed to import. But Irish and French farmers will be wary of any agricultural sweeteners in this deal. Defence is another element in the trade balance between the EU and US. The EU defence commissioner Andrius Kubilius spent a few days in the US, setting out some big numbers that have sprung out of another "Trump Win" - getting European NATO to raise its defence spending to 5% of GDP. This consists of 3.5% of GDP going on "real" defence spending, and 1.5% going on enabling infrastructure, such as roads, bridges, railways, communications satellites and other things that can be called "military mobility". About 40% of the EU's defence equipment spending goes on US made products. In cash terms that figure has risen sharply in the past three years as the EU supplies weapons systems and "consumables" to Ukraine. With the big increase in European NATO spending, and the EU's own €150 billion defence loans scheme (applications close on Tuesday), there is an awful lot of money sloshing around, and inevitably a big chunk of it is going to go to American industries, particularly in the highest end of high tech defence. According to Mr Kubilius, EU states are going to spend around €2.2 trillion on defence equipment over the next seven years of the EU "Financial Framework" budget cycle. If America gets 40% of that, then it could be looking at the thick end of a trillion bucks. It is hard to see more concessions here, especially as the French and some others have argued that if the Europeans are going to spend these kinds of colossal sums, they should spend as much as possible on developing home industries, not acting as employment support for the Americans. Trump planning regime of pharmaceutical tariffs As for pharmaceuticals, that seems likely to be left out of this outline deal, at least for the moment. Mr Trump is planning a special regime of pharmaceutical tariffs - medicines have not been tariffed by tradition - in order to force the relocation of manufacturing for the US market back to the US. That is a more complex business, as "patent cliff" effects come into play, as well as investment decisions. It seems the US plans on this one are not yet ready for rollout. That will be the big one hanging over the Irish after tomorrow's outline deal (if it is done), because of what we might call the 'Reverse-Leprechaun' economic effects of a sudden disappearance of a large lump of GDP, and with it associated corporation tax returns. Ireland's trade in goods surplus with the US is about $80 billion, according to the Americans - it vies with Germany for the biggest trade surplus of any EU state, a position it has been driven to almost entirely by the pharmaceutical industry in Ireland, which is mostly US owned. According to US trade statistics, Ireland has the fourth or fifth biggest trade surplus of any country doing business with the US: only Vietnam, Mexico and China have bigger surpluses. And China's trade surplus is only three times bigger than Ireland's. So the Emerald Isle does stick out on the charts - worldwide as well as European. And most of that is because of the strange world of pharmaceutical manufacturing, internal pricing and tax regime arbitrage that US pharma companies are so good at. On landing in Scotland, Mr Trump was asked what areas are outstanding to be negotiated with the EU. He said about twenty areas, but said he was not going to list them off. It felt like a deflection, not an answer. Trump says US-EU agreement would be 'biggest of them all' The uncertainty of the past six months has been paralysing for many investment decisions on both sides of the Atlantic. And that is important, because as Mr Trump said yesterday evening, getting an agreement with the EU would be "the biggest of them all". Because the EU-US trade in goods, services and investment is by far the biggest and most important in the world. The US President has decided to charge an entry fee to the US market. He believes - correctly - that the market is so valuable to outsiders that they will pay more to do business here. The art of this particular deal is finding out the realistic limits of bearable pain. For Japan it was 15% - down from the 25% they were told to expect. Once that news broke on Tuesday night, it was the tipping point for the EU, which had been hoping for a 10% tariff, but had been told 15% would be more like it. It is pretty much what the EU has been charged for the past three months - a 10% general baseline tariff on top of the 4.8% pre-existing average tariff rate on EU goods coming into the US. The impacts of that have yet to play out. And if the 'closer' and his visitor from Brussels cannot close the deal tomorrow? The US is set to impose a 30% tariff rate on the EU on 1 August. But according to US Treasury Secretary Scott Bessent, talks on a final deal would continue, and the rate could still come down. But the 30% would act as a spur to the talks. The EU also made moves to show it was reaching the end of the rope as far as talks with the US are concerned. On Thursday, member state governments approved a retaliatory package on $70 billion of US exports, on top of an earlier $23 billion of tariffs on US steel and aluminium products. A third package of levies on US services exports has also been floated in the Brussels ether. The EU tariffs on $90 billion of US imports will go into effect on 7 August - if there is no deal this weekend. Mr Trump is one of those people who always has to feel he has gotten one over whoever he is doing a deal with; the sort who always tries to chip a little extra in the end. Ms von der Leyen ought to be prepared to give a little sweetener. Will it be in some aspect of trade or taxation, or will it be old fashioned cash?. Last Tuesday, Mr Trump spent 75 minutes talking in person with Japan's trade envoy Ryosei Akazawa, screwing an extra $150 billion out of the Japanese for an investment fund that the US government will direct. It helped to "buy" them a tariff cut, according to US Commerce Secretary Howard Lutnick, who claimed credit for the idea of the "tariff buy down". Market access will affect trade deal with Japan, says Lutnick Mr Lutnick said in an interview for Bloomberg that market access was always going to be a big issue in any trade deal with Japan. He did not see the Japanese opening their market to the extent the US wanted, so looked for another way. His solution was a fund of $400 billion, which the Japanese would put at the disposal of the US. Mr Trump, the 'closer', bumped that up to $550 billion before he said "deal" and shook hands. So what is this $550 billion for? It is not an investment by Japanese companies, according to Mr Lutnick. He told Bloomberg on Wednesday the Japanese will be bankers, supplying the money to pay for American projects. The Japanese cut will be 10% of the profits: "The Japanese are going to give America the ability to choose the projects, decide the projects and execute the projects. Suppose we want to build a generic antibiotics plant - America doesn't make antibiotics anymore - the Japanese will finance the project and we will give it to an operator, and the profits will be split 90% to the United States, and ten percent to the Japanese," he said. "So the Japanese have basically brought down their tariff rate due to this commitment that 'we will back what you Mr President want to build in America that are key to national security concerns, we will back that'," he added. He said the money can be equity, loans or loan guarantees. "They are the banker, not the operator - this is not a Japanese company like Toyota coming in and building a factory - this is America saying we want generic pharmaceuticals, microchips etc". Mr Lutnick - who claims to talk to Mr Trump daily at 1am by phone - said he came up with the idea in January to get the equivalent of market access for the US and a tariff rate at which the Japanese car makers - who account for the vast bulk of Japan's trade surplus with the US, can live with. "15% is right on the line where they can still build cars in Japan - huge amounts here as well - but $550 billion bought that," he said. "For the Europeans it is 25%, for South Korea it is 25% - the Japanese have bought 15% by giving Donald Trump the means to invest. We'll see what happens in the EU and South Korea talks, but let's be clear: Donald Trump has put pressure on them," he added. Peter Navarro, a senior trade advisor in the Trump administration and ideologue of a hard line on foreigners, especially China, said of the $550 billion : "its a blank cheque to invest in America: it's going to used to cure our supply chain vulnerabilities - this is really important: we've seen in the pandemic we were exposed on pharmaceuticals, we have a chip problem with too many of the chips made offshore: we've seen Chinese export restrictions on gallium, rare earth magnets, critical minerals. "Howard Lutnick is going to be the symphony orchestra guy on this - we are going to figure out every vulnerability we have in our economy with the help of the Japanese," he added. Medical devises may be excluded from tariffs The EU is of course the home of the car, specifically Germany where the internal combustion engine was invented. A deal on cars is huge for Germany as well. So is a deal on spirits - especially for the Irish whiskey industry and French and Italian liquor makers. Medical devices are another really important area for Ireland that may be excluded altogether from tariffs, according to some of the chatter reported late last week. For the Irish Government, which has become so dependent on corporation tax revenues - far more than is the case in most countries - the potential hit to revenues from Mr Trump's tariffs are what causes it sleepless nights. But it is not just tariffs that are making life more difficult for Irish and European exporters to the US. The dollar has weakened against the Euro since Mr Trump took power, making foreign imports more expensive for Americans to buy. The tariff comes on top of that. On leaving the White House yesterday, Mr Trump extolled the virtues of a weaker dollar. "The weak dollar makes you a hell of a lot more money. So when we have a strong dollar, one thing happens, it sounds good, but you don't do any tourism. "You can't sell factories, you can't sell trucks, you can't sell anything. It is good for inflation, that's about it. And we have no inflation. We've wiped out inflation. So when I see it (the dollar) down there, I don't lose sleep over it, put it that way," he added. As for other countries, Mr Trump said "We have the outlines of a deal with China" (Mr Bessent is meeting his opposite number in Stockholm on Monday and Tuesday for more trade talks). But he did not hold out much hope for Canada, the US' number three trade partner: "We haven't really had a lot of luck with Canada. I think Canada could be one where they'll just pay tariffs, not really a negotiation." Next Friday is the closing deadline for this round of tariff related deals, as far as the US President is concerned. He plans to send letters out to close to 200 countries over the next week "I'm not looking to hurt countries", he said yesterday morning. "I could - I could do that too, but I'm not looking to do that. But when that letter goes out, that's a deal. "Now, we sent one to Japan, we sent one to the EU, and they came back and negotiated a deal. I think the EU has got a pretty good chance of making a deal," he added.
Japan Forward
22-07-2025
- Business
- Japan Forward
Can Alaska LNG Tip the Scales in Japan–US Tariff Talks?
As negotiations between Japan and the United States over President Donald Trump's tariffs intensify, a US liquefied natural gas (LNG) project is viewed as Tokyo's trump card. The project involves a 1,300-kilometer pipeline running from the North Slope gas field in northern Alaska down through the state to a newly constructed liquefaction plant. Once completed, it could supply 20 million tons of LNG annually to Japan and other East Asian countries. The concept itself has existed for a long time, but the primary obstacle has been the enormous cost. Estimated at $44 billion USD (over ¥6 trillion JPY), the project is more than twice as expensive as another LNG project currently underway in Texas. With rising material prices, the cost is expected to increase even further as the project undergoes additional review. If the project's costs are passed on to LNG prices, it could lead to "high prices" for the consumers. Scheduled to begin operations in 2030, after Trump's tenure, the project faces uncertainties. Takafumi Yanagisawa, senior researcher at The Institute of Energy Economics, Japan, points out that "the risk of policy changes following a change in administration must be carefully considered." There are clear advantages for Japan. Currently, most US-produced LNG is shipped from Gulf Coast terminals, taking roughly 30 days via the Panama Canal and about 40 days via the Cape of Good Hope. In contrast, LNG shipped from Alaska can reach Japan in under 10 days. US-produced LNG, including but not limited to that from Alaska, has another advantage: it does not contain a "destination clause" restricting resale to third parties. A tanker loaded with liquefied natural gas (LNG) arrives at a pier. (©Sankei) Japan's LNG procurement is based on long-term contracts that ensure a stable supply of a fixed volume over an extended period. But even if demand falls, such as during a warm winter, the contracted amount must still be purchased. Since US LNG contracts lack a destination clause, any surplus can be resold to other countries, helping Japan mitigate the risk of excess supply. JERA company of Japan signs Liquified Natural Gas (LNG) agreement at the U.S. Department of Energy headquarters in Washington, D.C. on June 11, 2025. (©US Department of Interior) Private companies are already expanding their procurement of US LNG. JERA, Japan's largest thermal power producer, has signed contracts with four American companies to purchase up to 5.5 million tons of LNG annually. While diversifying supply sources is the primary goal, another important factor is that "the contracts offer greater flexibility" compared to LNG imports from the Middle East, says Mineko Hida, general manager of JERA's LNG Division. JERA has also expressed interest in the Alaska LNG project. At a press conference in late June, Chairman Yukio Kani praised the concept as "very good." He emphasized the short transport time to Japan and the absence of geopolitical risks along the route, such as those linked to the Strait of Hormuz in the Middle East. JERA is reportedly closely monitoring the ongoing review of the project plan. US LNG currently accounts for about 10% of Japan's total LNG imports. With global demand for LNG expected to continue rising, increasing imports from the US will also help strengthen the country's energy security. Prime Minister Shigeru Ishiba and US President Donald Trump meet in the Oval Office, the White House, on February 7. (©Prime Minister's Office) In the Japan-US tariff negotiations, differences persist over issues such as automobile tariffs. President Trump has repeatedly labeled trade with Japan in automobiles as "unfair." However, increasing imports of American cars, which are unpopular among Japanese consumers, or reducing Japan's automobile exports, is unrealistic. If Japan concedes too easily, it risks encouraging repeated unreasonable demands. The Japanese government should therefore approach the negotiations with firmness and persistence. On the other hand, if Washington remains focused on correcting the trade imbalance, no argument about the contributions of Japanese companies to the American economy is likely to sway President Trump. The only way to break the deadlock is by expanding imports of US products that also benefit Japan. While the Alaska LNG project won't immediately reduce the US trade deficit, advancing this initiative with Japan's involvement — one of Trump's pet projects — could have a positive impact. President Donald J. Trump participates in a walking tour of Cameron LNG Export Terminal Tuesday, May 14, 2019, in Hackberry, La. (©White House/Shealah Craighead) In early June, the Ministry of Economy, Trade and Industry sent Takehiko Matsuo, the Vice Minister for International Affairs, to a US government briefing on the Alaska LNG project. While it's clear the government is considering the project as a bargaining chip, another senior Ministry official expressed caution, stating, "LNG prices are directly linked to electricity and gas rates. If the price is high, we simply won't buy it. It all depends on economic viability." So how should Japan engage with the risky Alaska LNG project? Yanagisawa stresses that if Japan decides to participate, "government involvement is essential." He suggests that development support through the Japan Oil, Gas and Metals National Corporation (JOGMEC) could be considered to help keep LNG prices affordable. Should it prove difficult for Japan to take on the project alone, another option would be to share the investment burden with other Asian LNG-importing countries and regions, such as South Korea and Taiwan. "If it's economically viable, then we should do it," the senior METI official said, without ruling out the possibility. Can we leverage the few cards we hold as negotiation tools to break the deadlock? Now is the time to apply wisdom and safeguard Japan's national interests. Author: Shunichi Takahashi, The Sankei Shimbun ( Read this in Japanese )
Euronews
17-06-2025
- Business
- Euronews
EU proposes new measures to phase out Russian oil and gas
The European Commission published a new legislative proposal on Tuesday on how the bloc must phase out Russian oil and gas by 2027. The proposal outlines the deadlines and strategies for EU countries to progressively reduce, and ultimately end, their reliance on Russia as a fuel supplier, as part of the REpowerEU Plan. The proposal does not address nuclear energy, with a senior European Commission official telling journalists that that would be addressed separately. Since the beginning of Russia's full-scale invasion of Ukraine in February 2022, the EU has progressively reduced the trade of oil, gas and nuclear material from Russia. As of 2024, the EU still relied on Russian imports for 19% of its gas and 3% of its crude oil supply. "Russia has repeatedly attempted to blackmail us by weaponising its energy supplies. We have taken clear steps to turn off the tap and end the era of Russian fossil fuels in Europe for good," European Commission president Ursula von der Leyen said. Under the draft rules, new contracts for Russian gas will be banned starting 1 January 2026. Existing short-term contracts must end by 17 June 2026, with limited exceptions for landlocked countries tied to long-term agreements, which will be allowed until the end of 2027. Long-term contracts for Liquified Natural Gas (LNG) terminal services involving Russian companies will also be prohibited, freeing up infrastructure for alternative suppliers. EU countries will be required to submit detailed diversification plans outlining specific steps and milestones to replace Russian energy imports. In a meeting between EU ministers for energy on Monday, Hungary and Slovakia expressed their disagreements with the plan. "Energy policy is a national competence and this endangers our sovereignty and energy security. Given the Middle East escalation, we proposed no such plan be tabled at all," Hungary's Foreign Minister Péter Szijjártó wrote in a post on X. Despite this opposition, the European Commission decided to move forward with the text. The Danish government, which will take over the presidency of the Council of the EU on 1 July, wants to reach a political agreement on the text as soon as possible. Lars Aagaard, Danish Minister for Climate and Energy, told journalists on Monday that the Danish presidency will make an effort to "reach [political approval] as fast as possible," adding: "If we succeed in concluding [the legislation] before New Year, I think that we have done a tremendous job." The legislation will follow the standard procedure. The co-legislators, namely the European Parliament and the Council of the EU, will negotiate their own position on the file. Afterwards, the text will enter inter-institutional negotiations, the so-called trilogue, to find a political agreement. EU member states in the Council will need a qualified majority to approve the proposal on their side. This reinforced majority requires the support of at least 15 of the 27 member states, representing at least 65% of the EU population. The European Parliament will vote on the proposal by a simple majority vote. A life goal for some, a new beginning for others. Perception and attitude to retirement change widely across the European Union, with, in some cases, staggering rates of pensioners who decide to remain active even after qualifying for an old-age pension. The average across the bloc between entrepreneurs and employees is 40%, according to Eurostat data published in June. The vast majority of pensioners who continue to work are self-employed (56%), with a smaller, though still relevant, rate among employees (24%). Estonia and Iceland stand out as the countries with the highest proportion of working pensioners. Sweden has by far the most industrious retired entrepreneurs. Almost all of them (98.4%) keep working after receiving their old-age pension. Huge rates in Finland and Ireland too, close to 90%. On the contrary, in Spain and Greece, the vast majority prefer to enjoy retirement, and only about one in five entrepreneurs remain active (18% in Spain and 20% in Greece). In some countries, employed pensioners clock in as many as, or more, hours than common workers. Nearly 39 in Bulgaria, 38.5 in Greece, 35.8 in Lithuania and 35.7 in Cyprus, the highest rates in the EU. But most pensioners who keep working prefer part-time options (57%). Which workers are most likely to continue working after receiving an old-age pension? The rate is highest among managers (40.1%) and skilled agriculture, forestry and fishery workers (40.1%). Salesmen (32.2%) and technicians (30.3%) also have significant proportions.
National Observer
25-04-2025
- Politics
- National Observer
Can we really reduce carbon emissions by sending LNG to India?
This article is part of the Reality Check series by Canada's National Observer. Have a question for us? Reach out at [email protected]. Claim: By sending our LNG to India, Canada could reduce emissions by 2.5 billion tonnes. This is a talking point that Pierre Poilievre has brought up several times over the campaign. His party's platform pledges a 'one and done' rule for new resource projects, and he's talked about approving 10 long-standing energy projects, including Liquified Natural Gas (LNG) expansion in British Columbia, uranium mining in Saskatchewan, and a nickel-cobalt mine in Ontario. During the English-language leaders debate last week, Poilievre was asked how he balances the priorities of fighting climate change and expanding energy projects. Poilievre said his government would 'bring home' jobs while also 'bringing down emissions around the world.' He explained that by approving natural gas liquefaction and export, and then sending Canadian gas to India, 'to displace half of their demand for electricity, we could reduce emissions by 2.5 billion tonnes, which is three times the total emissions of Canada.' The official party platform also mentions exporting LNG by utilizing Article 6 of the Paris Agreement. The party would 'Use Article 6 of the Paris Agreement to dramatically reduce global emissions and fight climate change by exporting cleaner Canadian resources and technologies' and 'Use Article 6 of the Paris Agreement to bring home jobs while exporting cleaner resources like Canadian liquified natural gas (LNG) and technologies to help lower global emissions.' Verdict: False Pierre Poilievre has made the claim several times during the campaign, so we looked into it in our latest fact check. There are a few aspects of this to debunk here. Let's start with Poilievre's promise to fast-track approvals on energy projects, like the LNG terminal in BC. As The Tyee reports, there's one major issue with that: It's already approved. It got the provincial permits stamped in 2015 and federal approval in 2016. What we're now waiting on is LNG Canada Phase 2. As we have reported, that would be an expansion to the already existing terminal. According to John Young, LNG senior strategist with Climate Action Network Canada, it's not federal approvals standing in the way of the terminal moving forward. It's money. 'It just doesn't add up very well for somebody who wants to be prime minister to be so factually incorrect,' Young said. Public funds were used to get the project past the first round of approvals. But in order to move forward, Young told The Tyee that further funds are needed from investors like Shell, Mitsubishi, and PetroChina. And they might need new assurances since the market is in a very different state than it was in 2016. (Girl, the tariffs.) After Poilievre announced he would approve the LNG terminal at a campaign stop in Terrace, B.C., Sven Biggs, oil and gas program director for an environmental group, released a statement, saying 'The fact is, Phase Two of LNG Canada has all the permits it needs. It isn't being built yet because Shell and the other big oil companies that own it need another handout from Ottawa to make this project viable.' But what about his claims that by shipping gas off to India, we could lower global emissions — and use the Paris Agreement to do it? That's not how any of that works. First, Poilievre is claiming that LNG is a better fuel to use over coal because it 'burns cleaner,' which is the ' bridge fuel ' argument put forward by the fossil fuel industry. But we now know better. It seems previous studies had not factored in the emissions produced during the liquefaction process. Rather than being better for the environment, LNG is actually significantly worse than coal. In 2023, 170 climate scientists signed a letter urging then-US President Joe Biden to reject plans for more LNG terminals. So, it's not true that if India swapped half of its coal for Canadian natural gas, global emissions would drop. But where does the Paris Agreement come into this? Article 6 of the Paris Agreement lays out how countries can cooperate with each other and transfer carbon credits, ostensibly in the name of meeting targets. For example, if Indonesia puts mechanisms in place that protect national forests, which absorb carbon emissions, they might be credited for those emissions. They could then sell those credits to Japan to meet its reduction targets. But to avoid double dipping, Indonesia would no longer be credited for those reductions if it sold the credit to another country. As Canada's National Observer's Natasha Bulowski reported this week, the Conservative goal seems to be to change the international framework for counting greenhouse gas emissions so that Canada can get credit for India reducing emissions by burning Canadian LNG instead of coal. That's not how the carbon credit system works. The country that makes the fuel swap — in this case, India — gets credit for lowering emissions, regardless of where that fuel was produced. And at the end of the day, carbon emissions are carbon emissions, no matter where they are released. India has committed to reach net-zero by 2070 and it's not going to achieve that goal if it gives other countries credit for its emission reductions. Using Article 6 in this way has been a dream of other Canadian politicians. In 2023, Canada's National Observer reported that Alberta Premier Danielle Smith was advocating for the same goal in meetings with then-Prime Minister Justin Trudeau. At the time, one expert said that if Canada brought the idea up with other United Nations countries, they would be 'laughed out of the room.'
Daily Mail
25-04-2025
- Business
- Daily Mail
Energy price cap will fall in July, expert forecaster predicts - is it still worth fixing your tariff now?
The energy price cap is expected to fall by £166 in July, according to expert forecasters. Energy consultancy Cornwall Insight said the price cap will drop from £1,849 to £1,683 in July, an almost 9 per cent fall. It means households would pay 25.01p/kWh for electricity and 6.01p for gas. Further ahead, it expects another small fall in October's price cap, before dropping again in January 2026. It comes after a decline in wholesale prices, in part driven by geopolitical events and market developments, including the implementation of US tariffs, as well as a fall in demand due to the hotter temperatures. Cornwall Insight warns that while falling prices are good in the short term, they show how volatile the wholesale market is. Any reductions priced in now could be out of date by the time the July price cap is finalised. The impact of US tariffs could discourage Liquified Natural Gas (LNG) exports, which could push down US LNG prices, although there is no guarantee this would filter through to the UK. The conflict in Ukraine could also push prices back, so Cornwall Insight warns that there will continue to be volatility in prices. Dr Craig Lowrey , Principal Consultant at Cornwall Insight says: "While a fall in bills will always be welcomed by households, we mustn't get ahead of ourselves. We have all seen markets go up as fast as they go down, and the very fact the market dropped so quickly shows how vulnerable it to geopolitical and market shifts. 'There is unfortunately no guarantee that any fall in prices will be sustained, and there is always the risk of the market rebounding. 'The only real way to protect households from this constant cycle of instability and insecurity is to reduce our dependence on international wholesale markets. That means continuing to focus on growing low carbon energy generation here in Great Britain and building a more secure, more sustainable energy future.' Is it a good time to fix your energy bill? Many households chose to fix their energy bill ahead of the April price cap increase to save money on their bills. Suppliers are still offering competitive fixed deals that undercut April's price cap, but with prices set to fall in July, will households still save money> The best deal on the market currently is Outfox the Market's 12-month deal, which offers a saving of £300 a year. This means that if you chose to fix now with an average annual bill of £1,549, you'd still be saving money once the cap falls in July. Its 18-month deal offers a saving of £290 while its 24-month offer saves £285.
