Net Zero

1. What’s eating Jigar Shah
2. New cheap EV
3. LNG trade strategy
4. BP’s ‘fundamental reset’
5. Pension problems

Europe’s gas prices rise, and Russia’s power exports fall.

Trump’s unpredictability scares energy investors, Biden’s green banker says

US President Donald Trump’s unpredictable approach to policymaking undermines his goal of energy “dominance,” the former senior official who managed Joe Biden’s biggest energy bank told Semafor.

Jigar Shah, a former solar executive who headed the Department of Energy’s Loan Programs Office, said he expects his successor under Trump, John Sneed, will veto many of the roughly 200 applications from companies still in line for a piece of the LPO’s $400 billion war chest, funding meant to support cutting-edge energy projects considered too risky by Wall Street. That’s no surprise and could happen in any new administration, Shah said. But Sneed has also threatened to claw back funds that were already approved under Biden. Shah thinks that effort won’t ultimately succeed — but that it could scare companies away from one of the country’s most important sources of capital for improving the reliability and affordability, not to mention sustainability, of the US energy system.

Climate tech needs to find a new way to grow without government support in general, and the LPO in particular. The office has been on a roller coaster for the last 15 years: It was effectively closed under former US President Barack Obama after the high-profile bankruptcy of Solyndra, and moribund under Trump. But it saw explosive growth during Biden’s term: Shah signed off on about $100 billion in finalized and conditional loans and guarantees for renewable energy, batteries, advanced nuclear, and other technologies. This money was largely aimed at helping companies cross the “valley of death” between the lab and full-scale commercialization. Under Trump, LPO is likely to narrow its focus to technologies that are more favored by Republicans, such as carbon capture and blue hydrogen. Everyone else needs to find a new path across the valley. In the meantime, Shah warned that Trump’s fixation on fossil fuels is likely to encounter some inconvenient obstacles from economics and physics.

BYD’s new EV

Tesla’s Chinese rival BYD unveiled an electric vehicle priced under $10,000 Monday, potentially triggering a new price war in China. BYD, China’s biggest EV maker, also announced that an advanced self-driving system called God’s Eye will be installed in most of its models. BYD’s CEO said driver assistance is “no longer an unattainable luxury, but an essential tool” like seatbelts and airbags. The company has fueled a domestic price war in the last few years, and its new rollouts could further challenge Tesla, which is already hamstrung by China’s regulatory hurdles. One local expert compared BYD’s moves to Chinese AI startup DeepSeek, which upended global markets with its claims of building advanced technology at a fraction of the cost.

LNG trade strategy

A growing number of countries are lining up to buy liquified natural gas from the US, in large part to avoid becoming a target for tariffs by Trump. Japanese Prime Minister Shigeru Ishiba announced a deal with Trump to collaborate on a $44 billion LNG export terminal in Alaska, specifically citing the country’s trade deficit with the US as a main motivation for the deal. But given Alaska’s difficult logistics and the project’s steep costs, it’s unlikely any gas will be exported from there until the early 2030s. In the meantime, Taiwan, India, Egypt, and Ukraine are also looking to buy more US LNG — but China’s retaliatory tariffs on US gas will cut exporters off from what had been one of the most promising markets.

BP’s ‘fundamental reset’

BP’s profit in 2024, its worst year since the pandemic. The company’s early adventures with renewable energy underperformed and have already been scaled back. But in the last year its biggest headache was its oil refining business, which earned a profit of nearly $4 billion in 2023 but lost $67 million last year as tepid global demand for gasoline squashed most oil companies’ refining margins. CEO Murray Auchincloss promised to “fundamentally reset” the company’s strategy. He may have little choice, as activist hedge fund Elliott Management is building up a bigger stake in the company.

Pension problems

Pension funds in Republican-majority US states continue to face a wave of anti-ESG legislation, but even more ostensibly climate-conscious states are doing little to protect workers’ retirement savings against climate-related risks, a Sierra Club and Stand.earth report warned.

States including California and New York still employ loose guidelines for their public pensions’ proxy voting policies, the report found, which weakens their ability to leverage their combined trillions of dollars in stock investments to pressure companies to cut emissions. As a result, those pensions remain at risk from the impacts of climate change to the economy. While the ESG backlash is partly to blame, pension officials across the board aren’t taking sufficient steps to mitigate climate risk, Allie Lindstrom from the Sierra Club’s Sustainable Finance Campaign said: “At many of these pensions, there isn’t a leader in place who is championing the issue internally, or there isn’t organizing on the ground that is doing the work.”

Funds are also hesitant to hold company directors who fail to address climate-related risks accountable, voting records showed, with each voting against just 10% of the recommended directors on average. “I’ve been told by various [pension] staff that they consider director votes to be too escalatory or not precise enough,” Lindstrom said. “[Escalation] is the point.”

New Energy

• Solar and batteries were the top energy sources added to the booming electric grid in Texas last year.
• In spite of a rising wave of tariffs and other trade barriers, global clean energy prices are expected to continue falling this year, BloombergNEF projects.
• Indonesia is ramping up its clean energy targets, as it moves to shut down parts of its enormous coal power fleet.

Fossil Fuels

• Europe’s natural gas prices hit their highest point in two years thanks to cold weather and the cutoff of Russian pipeline gas through Ukraine. That has made oil more attractive as an industrial energy source, so oil prices could be the next to jump.
• Activist hedge fund Elliott Investment Management is pushing for changes at major oil refiner Phillips 66, including possibly spinning off its midstream business.
• Even though coal is no longer economic in most of the US power sector, it still holds enough powerful political sway to stay on life support.
• Chevron and the state of California broke up over text.

Finance

• European banks said they have no plans to follow their US counterparts out of the industry’s net zero alliance.
• Investors in Africa are plowing more money into climate tech startups, Semafor Africa reported; in the last two years, climate and energy accounted for a third of total investment in African startups.

Politics & Policy

• Estonia, Latvia, and Lithuania unplugged from Russia’s electric grid, a long-planned move that EU leader Ursula von der Leyen said would result in “freedom from blackmail.”
• Two dozen states sued to block a New York law requiring fossil fuel companies to pay for climate pollution, saying it overreaches the state’s legal authority.

EVs

• BMW said it plans to double down on gas-engine vehicles because the Trump presidency will likely mean a “roller coaster” for the EV market in the coming years.

Personnel

• Trump nominated Neil Jacobs to lead the National Oceanic and Atmospheric Administration. Jacobs held the post in Trump’s first term during the “Sharpiegate” scandal, when NOAA allegedly manipulated weather data to support false statements by Trump about a hurricane.

The South African government is considering ways for Elon Musk’s companies to invest in the country without complying with the nation’s Black empowerment rules, three people familiar with the matter told Semafor.

South African officials are discussing how Musk’s companies could sidestep rules that would require at least 30% of any South African operation to be owned by Black locals.