Net Zero

1. Tariffs drive prices up
2. Gas catches up to nuclear
3. Wind gathers speed
4. Coal supply squeeze
5. Winning with wood chips

Aid cuts threaten climate adaptation, and Germany eyes Russian gas.

Trade wars, tepid oil prices, lackluster renewables earnings, LNG-fueled geopolitics, Wall Street’s anti-ESG backlash: There will be plenty of news for energy executives to digest when they gather in Houston next week for their biggest annual meeting.

At last year’s CERAWeek, I mainly heard frustration with the Biden administration’s freeze on LNG permitting and excitement about the AI- and EV-driven surge in electricity demand. To some extent, those concerns have now flipped: US President Donald Trump is eager to open the taps on LNG exports, and the sudden success of China’s low-cost DeepSeek AI platform has raised doubts about how much more power is really needed.

But in general, the global energy market today is far more turbulent than it was last year. As much as Trump touts himself as a friend to the oil industry, many of his actions in office so far — including today’s new tariffs on Mexico and Canada — do the industry more harm than good. Conversely, while Trump is no friend to renewables, analysts expect clean energy investment to continue growing, and huge investors like Brookfield Asset Management have billions of dollars on standby for wind and solar. I’ll also be very keen to hear what the industry thinks of Trump’s decision to cozy up to Russian President Vladimir Putin and throw Ukraine under the bus — if you’re at CERAWeek and think there’s a viable path for new US energy investment in Russia, come find me.

I’m especially excited for this year’s conference because Semafor is bringing its outstanding live journalism series there for the first time. On the evening of Monday, Mar. 10, over cocktails, I’ll grill NextEra Energy CEO John Ketchum and Jeff Gustavson, vice president of lower carbon energies at Chevron. We’ll also hear from Lauren Riley, chief sustainability officer at United Airlines, and my esteemed colleague Justin Worland, senior climate correspondent at TIME. It will be really fun and seats are almost full, so please RSVP here to join us! See you in Houston soon.

Tariffs drive prices up

Energy prices in the US are poised to spike because of new tariffs US President Donald Trump imposed on Canada and Mexico.

Starting Tuesday, imports to the US of energy products from Canada will face a 10% tariff, while all other goods from both countries will face a 25% tariff. Analysts expect gasoline and home heating prices in the US to quickly rise, since the US market relies on Canadian crude oil and hydropower.

The situation could escalate if Canadian officials decide to take retaliatory trade measures, as they have threatened to do. Companies engaged in oil and gas drilling, wind and solar manufacturing, and assembling EVs will also be impacted by tariffs on steel and other commodities. Antoine Vagneur-Jones, head of trade and supply chains at BloombergNEF, said half of planned US clean tech factories are now at risk of cancellation. Separate tariffs on China, he added, will likely drive EV exporters there to accelerate their shift in focus away from high-income markets in North America and Europe toward emerging markets in Africa and Asia.

Gas wins in data center boom

Wall Street is starting to see natural gas companies and gas-reliant electric utilities as bigger winners in the data center boom than their nuclear-powered competitors.

Share prices of nuclear energy companies surged over the last year as Constellation and others signed deals with Big Tech companies to provide zero-carbon data center electricity. But as the AI race heats up, tech companies are under pressure to scale as quickly as possible, and building new nuclear plants remains highly expensive and time-consuming. Gas, by comparison, is able to scale more quickly. NRG, a top gas company, last week announced several finalized and tentative deals to buy gas-fired turbines and provide power for data centers, The Wall Street Journal reported, while nuclear leader Vistra said that regulatory hurdles have prevented it from finalizing contracts with data center clients. As a result, nuclear stocks are falling while gas continues an upward march.

Wind gathers speed

Global offshore wind construction is set to rebound in 2025, largely dominated by China, according to research from Rystad Energy.

Nineteen gigawatts of new capacity will become operational, assuming construction goes ahead as planned. But lingering uncertainty over lease agreements — aggravated by US President Donald Trump’s executive order halting all new federal offshore wind leasing — could jeopardize the pace of progress going forward, the energy consultancy warned. Last year saw record levels of capacity offered in lease auctions outside of China, but not all of this has yet been awarded, partly because developers need subsidies to advance projects amid still-high costs, Petra Manuel, senior offshore wind analyst at Rystad, told Semafor.

Coal supply squeeze

Price per ton of coal on the Asia market, the lowest in four years. A relatively mild winter across the northern hemisphere this year pushed down coal demand. But much as climate activists would love to see the price continue to crater, analysts are instead anticipating a rebound, as investment flows into coal-fired power plants in China and India, but away from coal mining globally, creating a looming supply squeeze. Investors who want to pull out of coal entirely should think twice, Gary Nagle, CEO of mining giant Glencore, recently told his shareholders: “It seems in today’s world, coal is no longer a four-letter word.”

Winning with wood chips

The CEO of the UK’s top renewable energy company wants to move “more quickly” on the energy transition in spite of political headwinds and pushback on his company from some environmental groups.

Will Gardiner, chief executive of Drax, set a 2030 deadline for the company, which makes power by burning wood pellets in converted coal plants, to become carbon negative. That made the company a pioneer in its industry, and its overhaul has been accompanied by a transformation in earnings, which topped £1 billion on an adjusted basis in 2024, Drax announced this week. But its stock has not seen a similar boost, and Drax still depends on billions in UK government subsidies, which remain contentious even after they were extended this month to 2031. The company also agreed to pay a £25 million penalty last year after a regulator faulted its collection of data on the wood it imported.

“The problem and the challenge” in the carbon removal market “is that the whole thing seems to be slowing down,” he said in an interview. But Gardiner doesn’t think companies need to be popular to be successful. “CEOs have decarbonization plans and believe in this stuff anyway,” he observed. His task is to convince big corporate energy buyers that Drax’s carbon removal solution can work at the right price.

New Energy

• Shell is exploring a potential sale of its chemical assets in Europe and the US, a side of its business that has suffered losses in recent years.
• The amount of renewable electricity sold to companies under long-term power purchase agreements (PPAs) rose 35% last year and is expected to rise as data center demand increases and governments come under pressure to cut subsidies for renewables developers.
• In spite of opposition from the Trump administration, Iberdrola’s massive offshore wind farm in Massachusetts is on track to be completed this year.
• Russia is working to restart the occupied Zaporizhzhia nuclear power plant, the head of Moscow’s state-owned nuclear company said.

Fossil Fuels

• Oil prices fell to their lowest point of the year after OPEC agreed to increase production starting next month.
• Some industrial companies in Germany are already planning for the return of Russian pipeline gas, in the event of a ceasefire deal in Ukraine.
• Mexican state oil giant Pemex has failed to cut its methane emissions as promised, putting the country’s ambitious climate goals at risk.
• The US Department of Energy will no longer regulate LNG bunkering under export laws unless transfers take place in foreign waters.

Finance

• Wells Fargo dropped its 2030 and 2050 decarbonization targets, becoming the first major bank to do so.

Tech

• China thinks it can have nuclear fusion technology ready for zero-carbon power production at scale by 2050.
• Italy, meanwhile, is weighing whether to overturn a decades-long ban on nuclear fission energy.

Politics & Policy

• The EU will extend its lenient approach to policing state subsidies until the end of the decade, sparking fears among smaller members that less stringent rules will trigger a subsidy war.

EVs

• Protesters descended on Tesla’s service center in New York City, US, part of the third straight week of “Tesla Takedown” demonstrations at stores and repair centers around the world.
• Used EV prices have stabilised after a period of dramatic decreases amid growing consumer demand.

Ken Sofer, director for policy communications at the International Rescue Committee. The group published a full-page ad in the New York Times on Monday warning of the impacts of cuts to US humanitarian aid.

A 12-hour journey in a Cadillac Escalade, equipped with General Motors’ hands-free driving technology, changes what it means to go on a long family road trip, and puts transportation in a long-promised and long-delayed new era, Semafor’s Reed Albergotti writes.

There are a lot of autonomous driving systems on the road today, but only a small handful allow hands-free operation. Even Teslas require drivers to hold onto the wheel. That small difference is, surprisingly, a game changer on a long drive, leaving you able to relax in comfortable positions — and creating the potential for an entirely new road trip experience, Reed notes.