Net Zero

1. Not betting on gas, yet
2. Oil prices rise, for now
3. €100 billion in spending
4. The costs of inaction
5. Major climate cases

A rejected debt-for-nature swap, and carbon markets growth.

Turbine makers aren’t betting on an AI boom

Some of the world’s largest makers of gas-fired electricity turbines are holding back on a full-scale push to ramp up manufacturing in response to surging demand from data centers and other big power customers, executives told Semafor.

Tech leaders are desperate for electrons to power their AI ambitions. But the existing grid is already overwhelmed, renewables can be intermittent, and nuclear is both slow and expensive to build. And so gas turbines are experiencing a “gold rush,” Bill Newsom, CEO of Mitsubishi Power Americas, said on the sidelines of the CERAWeek conference in Houston last week.

Turbine manufacturers are now completely sold out for years to come. Between 2023 and 2024, orders in North and South America increased five-fold: If there had been sufficient manufacturing capacity, they could easily have expanded seven-fold, Newsom said. Delivery times have doubled in the last year or so; a turbine order placed now won’t be delivered until at least 2028, and the line is getting longer every day. Prices are also spiking and poised to rise further because of US President Donald Trump’s new tariffs on steel and aluminum imports.

That all sounds like a lucrative opportunity for turbine manufacturers — which can be counted on one hand — to scale up and capture new customers. Yet the industry is dragging its feet, out of concern that the boom in power demand, driven by AI and the broader electrification across the economy, could go bust sooner than expected.

There’s a widely held view within the Trump administration and the oil and gas industry that more gas-fired power generation is key to addressing US electricity shortfalls. Domestic gas is cheap and plentiful.

Whether or not the White House’s fossil fuel policies play out as the administration hopes — and the strategy is at times at odds with itself — all of that new gas production is of little use without turbines to convert it to electricity. Big Tech is quickly discovering that the backlog for turbines is among the biggest bottlenecks the industry’s power ambitions face.

Forecasts for oil prices slashed

Oil prices rose early this week on renewed tensions in the Middle East and hopes that China’s economy may be gathering pace — but analysts and investors increasingly see them headed in the opposite direction. The US launched airstrikes against Yemen’s Houthi fighters, intensifying fears of disruptions to supply from the region, while new data showed stronger-than-expected retail sales in China.

Still, longer-term issues persist. US President Donald Trump’s tariff policy is likely to slow global trade and lower economic growth, economists warn, while OPEC+ will soon open the taps and up production, driving analysts at Barclays and Goldman Sachs to slash their forecasts for oil prices this year. Oil traders, too, are turning bearish: Hedge funds and other asset managers have aggressively sold off positions in oil contracts. “The industry is over-drilling now, that is clear,” the CEO of the commodities trader Gunvor said.

Germany ramps up spending

Germany’s incoming coalition government agreed to bolster climate spending in order to reach a deal on a huge fiscal expansion, boosting clean-tech hardware stocks. Chancellor-to-be Friedrich Merz had sought to loosen Berlin’s strict debt rules to fund €500 billion in additional infrastructure spending as well as hefty extra defense expenditure, but needed the backing of the Green Party — a member of the outgoing administration, but not of Merz’s government — in order to do so. The Greens’ price was the earmarking of €100 billion from the infrastructure fund for climate, a deal Merz ultimately agreed to.

Details of what the money would be used for were not immediately clear, though the parties’ deal stipulates that it contribute to Germany’s goal of reaching net-zero carbon emissions by 2045, while Tagesspiegel cited one Green lawmaker as saying the funds would help finance reductions in carbon emissions in heavy industry or heating. Major wind-power equipment makers such as Nordex and Vestas saw their share prices rise on the deal’s announcement, while Siemens, which makes grid equipment as well as turbines, also saw a boost.

The costs of inaction

Minimizing the damage from climate change requires investments in mitigation and adaptation to increase ninefold and thirteenfold, respectively, by 2050 — equivalent to around 1% to 2% of cumulative global GDP, new research showed.

The cost, though hefty, pales in comparison to the price of inaction: Climate change could reduce cumulative global GDP by up to 34% by the end of the century if the planet’s current 3°C warming trajectory continues unabated, according to the Boston Consulting Group and University of Cambridge analysis. But there are various challenges to progress, the report said, from short-termism among leaders “who must be prepared to accept payback periods measured in decades” to lack of consensus over whether richer nations should foot more of the bill given their greater resources and historic responsibility for greenhouse gas emissions.

Still, these barriers look set to lower as climate change intensifies, the authors noted: Financial institutions and credit-rating agencies are “making the costs of tomorrow felt today” by increasingly factoring in climate-related risks, for example, and wealthier countries are waking up to the greater absolute GDP losses their economies face.

Major climate court cases

Two major lawsuits connecting South America to Europe point to the rapid international growth of climate and environmental litigation. A German court this week began hearing a case brought by a Peruvian farmer against the energy giant RWE alleging that the company’s historic greenhouse gas emissions, by driving climate change, had accelerated the melt of glaciers that ultimately posed a risk to his home. RWE denies the charges. The case has potentially huge ramifications, linking individual companies to climate change worldwide, including in countries where they have never operated — as is the case with RWE in Peru.

And hearings concluded in a London case over the global mining behemoth BHP’s liability in a 2015 mining disaster in Brazil that killed 19 people and destroyed entire villages. The case is unusual in that it is being heard by a British court applying Brazilian law against a UK-listed company, with the victims’ law firm being financed by a Connecticut hedge fund. BHP has said it is committed to addressing the fallout of the disaster, but argued the London case duplicates efforts already underway in Brazil.

The World Economy Summit 2025 will bring together US Cabinet officials, global finance ministers, central bankers, and over 200 CEOs of the world’s largest companies. The three-day summit will take place April 23–25, 2025, in Washington, DC, and will be the first of its kind since the new US administration took office.

Featuring on-the-record conversations with top executives such as Robert Bradway, Chairman and CEO, Amgen; Aiman Ezzat, CEO, Capgemini Group; Adena Friedman, Chair and CEO, Nasdaq; Jenny Johnson, President and CEO, Franklin Templetonl Paul Knopp, Chair and CEO, KPMG LLP; and Nandan Nilekani, Co-Founder and Chairman, Infosys, the summit will advance dialogues that catalyze global growth and fortify resilience in an uncertain, shifting global economy.

April 23-25 | Washington, DC | Learn More

Fossil Fuels

• US President Donald Trump is due to meet with oil and gas executives this week amid fears of falling prices and his own calls for ramped up output.
• The US approved a nearly $5 billion loan for a long-delayed LNG project in Mozambique, halted four years ago amid security concerns.
• Russian President Vladimir Putin is looking to revive energy exports in the event of a peace deal with Ukraine.

Finance

• Denmark-based investment firm Copenhagen Infrastructure Partners is concluding fundraising for its energy transition fund, having exceeded its $13 billion target.
• Colombia has been rejecting offers to do a debt-for-nature swap over fears such a deal would impact its sovereign credit rating, the country’s former environment minister said.
• Indonesia will resume allowing its forestry sector to sell carbon credits after a three-year moratorium in an effort to accelerate carbon markets.

Politics & Policy

• Canadian Prime Minister Mark Carney said his government would immediately eliminate the consumer carbon price, which he described as “divisive” during the Liberal leadership race.
• China published new guidelines for managing special funds for clean energy from 2025 to 2029, with a possible extension.

Personnel

• The Trump administration’s sweeping personnel and funding cuts risk slowing the pipeline of US-grown science talent, and ultimately undermining the country’s status as a world-leading research hub.
• The US Department of Energy, Environmental Protection Agency, and National Oceanic and Administrative Agency hired back many of the probationary employees who had been laid off during cuts last month.

A sense of responsibility weighs heavily these days on Breitbart News, Semafor’s Ben Smith wrote.

“We are trying to be the historical record of the Trump administration,” editor-in-chief Alex Marlow told Smith, citing the “massive hole, in conservative media in particular, for people who are covering things with an eye on being comprehensive and entirely accurate.” But is Breitbart really just the MAGA New York Times? “We’re the same people we’re always been,” said Washington Bureau Chief Matt Boyle. “Washington’s changed.”