Net Zero

1. Climate aid freeze
2. Record transition investment
3. Wall St. vs. DeepSeek
4. Tesla profits dip
5. Shell snaps up offsets

Choosing favorites from a massive new pile of energy transition charts.

Climate aid freeze

The Trump administration’s freeze on foreign aid funding has brought lifesaving work on climate adaptation and clean energy in dozens of countries to a “screeching halt,” humanitarian officials told Semafor. Trump ordered a 90-day halt to all foreign aid programs last week, which has upended a wide range of humanitarian and development programs backed by agencies like USAID. Among the programs affected are Power Africa, which supports energy access across the continent (USAID was absent from a major summit on African energy issues in Tanzania this week), aid for rebuilding Ukraine’s devastated energy system, and basic humanitarian support in most of the world’s most climate-vulnerable countries. USAID’s most recent climate mission statement says the agency aims to eliminate 6 billion tons of CO2 by 2030, and to improve the climate resilience of 500 million people, goals that are unlikely to survive under Trump.

Because the US is almost always the top funder of humanitarian aid in the countries where it works, the freeze puts hundreds of thousands of lives at risk, said two senior NGO officials, who requested anonymity to avoid becoming targets of the administration. Moreover, it eliminates opportunities for US energy companies, clean and fossil, who worked through federal aid agencies to find investment opportunities in challenging locations. And it creates an opening for China, with plenty of its own energy aims, to step into the soft power vacuum.

“The devastating short-term impacts will be bad enough,” said Katie Auth, policy director of the Energy for Growth Hub and a former senior USAID official. “But the chaos and uncertainty this freeze has created will do lasting damage. They undermine US credibility as a dependable partner at the very same moment we’re gearing up to use our development finance agencies to go big on risky investments in supply chains and infrastructure.”

Record transition investment

Global investment in the energy transition hit a record $2.08 trillion in 2024, but is still far below the level needed for the economy to reach net zero by 2050.

China is leading the growth, accounting for two-thirds of the increase between 2023 and 2024, according to a report from BloombergNEF. Grids, electric transport, battery storage, and renewable energy all hit new records. But overall, the rate of growth is slowing, and in some nascent sectors like nuclear, carbon capture, and hydrogen, investment declined. The total level of investment remains at only 37% of the level required for net zero.

This fossil fuel billionaire thinks Wall Street is wrong about DeepSeek

The breakout success of Chinese AI platform DeepSeek doesn’t mean a dimmer future for the US electric grid, despite what Wall Street seems to think, the billionaire CEO of a company racing to produce low-carbon power from natural gas told Semafor.

NET Power was among the energy companies whose share price plunged this week alongside chipmaker Nvidia’s, when DeepSeek claimed to be able to function as a far cheaper and less energy-intensive alternative to ChatGPT. But CEO Danny Rice — who made a fortune drilling for natural gas in Pennsylvania and whose brother Toby is CEO of the country’s top gas producer, EQT — is still bullish about the opportunity AI presents for energy companies.

Rice sees the pivot by oil majors ExxonMobil and, as of this week, Chevron into the data center power game not as competition, but as a lucrative new batch of customers for NET’s technology capturing CO2 from gas-fired power plants. But he thinks the Trump administration should reconsider how tax credits for CO2 capture are doled out.

Tesla profits dip

Tesla’s automotive revenue in the fourth quarter, down 8% from the same period last year. Tesla blamed price cuts on its most popular models in North America and China for the decline, which it has had to make to defend its market share from a growing host of rivals. Of that automotive revenue, about 4% came from the sale of regulatory emissions credits to other automakers. Tesla’s share price dipped a bit after the earnings report, but since rebounded, and has remained buoyed ever since Trump’s reelection because of his close relationship with CEO Elon Musk.

Shell snaps up offsets

Shell was the top player in the global carbon market in 2024. Several of the top buyers of voluntary carbon offsets last year were oil and gas companies, and overall the fossil fuel industry accounted for about 40% of the global carbon market, according to MSCI, a slightly higher share than the previous year. Shell in particular has been leaning more heavily on carbon offsets, in spite of mounting evidence of widespread greenwashing and accounting problems in the carbon market, as it pulls back on its clean energy activities. Shell’s profit for the fourth quarter fell below analysts’ expectations, thanks in large part to weak oil prices. But the company boosted its dividend payment for shareholders — a move that most Big Oil companies have adopted to keep investors engaged in a sector that has underperformed in the stock market and is facing the prospect of oversupplied global markets for years to come.

New Energy

• Wind turbine manufacturers in China are poised to grab an even larger share of the global market this year, Wood Mackenzie predicts.

Fossil Fuels

• The International Energy Agency needs to return to its roots as an oil market analyst and drop its focus on the energy transition, one of the agency’s former top officials said.
• Ukraine stepped up its drone attacks against energy infrastructure in Russia, striking a major oil refinery and targeting, for the first time, a nuclear power plant.

Finance

• Banks are still investing far too little in the energy transition. According to BloombergNEF a net zero trajectory requires banks to invest $4 in low-carbon infrastructure for every dollar they invest in fossil fuels by 2030, but by the end of 2023 the ratio was just 0.89 to 1.
• A new UN-administered carbon market is off to a shaky start, with the sale of credits from Indonesia linked to natural gas power plants instead of renewables.

Politics & Policy

• One of the first moves of the new US Transportation Secretary Sean Duffy was to roll back fuel efficiency standards set by the Biden administration.

EVs

• General Motors reported that in the fourth quarter, its revenue from selling EVs exceeded the cost of their components for the first time — but the company still loses money on EVs if you count the costs of labor and assembly lines.
• China is planning to shut 20,000 gas stations in the next five years as its gasoline consumption plateaus.

Personnel

• Lee Zeldin was confirmed as administrator of the Environmental Protection Agency. One of his first moves was to dismiss all the members of an outside advisory board to EPA on science and clean air.

Nat Bullard, co-founder of Halcyon, an AI-assisted research and information platform focused on energy transition and decarbonization. Bullard released his much-anticipated annual roundup of two hundred charts about the state of the energy transition today.

A gathering of House Republicans in Florida solidified the state’s status as the GOP’s center of gravity, Semafor’s Kadia Goba reported. After Donald Trump’s decision in 2019 to shift his court from New York to Mar-a-Lago, Floridians are increasingly vying for the party’s top-most roles. Whoever rises from a deep Republican bench to succeed the term-limited Ron DeSantis in the state governor’s office is likely to capture national prominence almost immediately, Goba wrote.