LONDON — The U.K. government is not moving fast enough to slash planet-destroying emissions from aviation, former Prime Minister Tony Blair has warned.  Governments in Westminster and elsewhere must step up progress in developing cleaner alternatives to traditional jet fuel, according to a report today from Blair’s think tank, seen by POLITICO.  “Aviation is and will continue to be one of the world’s most hard-to-abate sectors. Sustainable aviation fuel (SAF) mandates in Europe and the U.K. are ramping up, but the new fuels needed are not developing fast enough to sufficiently reduce airline emissions,” the Tony Blair Institute (TBI) said, referring to policies designed to force faster production of cleaner fuel.  The U.K. has made the rollout of SAF central to hitting climate targets while expanding airport capacity.  It is the third intervention on U.K. net-zero policy from the former prime minister this year.  Earlier this month, the TBI urged Energy Secretary Ed Miliband to drop his pursuit of a clean power system by 2030 and focus instead on reducing domestic bills. This followed a report in April claiming the government’s approach to net zero was “doomed to fail” — something which caused annoyance at the top of the government and “pissed off” Labour campaigners then door-knocking ahead of local elections.  Aviation contributed seven percent of the U.K.’s annual greenhouse gas emissions in 2022, equivalent to around 29.6 million tons of CO2. The Climate Change Committee estimates that will rise to 11 percent by the end of the decade and 16 percent by 2035.  SAFs can be produced from oil and feedstocks and blended with traditional fuels to reduce emissions. The U.K. government’s SAF mandate targets its use in 40 percent of jet fuels by 2040 — up from two percent in 2025.  Chancellor Rachel Reeves said in January that U.K. investment in SAF production will help ensure planned airport expansion at Heathrow —  announced as the government desperately pursues economic growth — does not break legally-binding limits on emissions.  The TBI urged Energy Secretary Ed Miliband to drop his pursuit of a clean power system by 2030 and focus instead on reducing domestic bills. | Wiktor Szymanowicz/Getty Images The TBI said that, while it expects efficiency gains and initial SAF usage will have an impact on emissions, a “large share of flights, both in Europe and globally, will continue to run on conventional kerosene.” A spokesperson for the Department for Transport said the government was “seeing encouraging early signs towards meeting the SAF mandate.” They added: “Not backing SAF is not an option. It is a core part of the global drive to decarbonise aviation. SAF is already being produced and supplied at scale in the U.K., and we recently allocated a further £63 million of funding to further grow domestic production.” The TBI said carbon dioxide removal plans should be integrated into both jet fuel sales and sustainable aviation fuel mandates, placing “the financial responsibility of removals at the feet of those most able to pay it.” 

BRUSSELS — An “aviation industry declaration” on sustainable fuel, due to be given to the EU’s transport chief next week, was actually drafted by European Commission officials and sent to aviation lobbies for endorsement, several lobbyists told POLITICO. The so-called Le Bourget Declaration backs the Commission’s targets for increasing the use of sustainable aviation fuel, which are included in the ReFuelEU legislation, starkly contrasting with the recent request from major European airlines to delay. It is set to be presented to Transport Commissioner Apostolos Tzitzikostas during the Paris Air Show at Le Bourget Airport, which starts on Monday. “This didn’t come from us; this came from DG MOVE,” a lobby representative told POLITICO, speaking on condition of anonymity. DG MOVE is the Commission’s department for mobility and transport. “A couple of weeks ago, DG MOVE contacted us and said, ‘We want you to sign this and give it to the Commissioner,’” the lobbyist said. “Officially, it’s our initiative, but unofficially it came from the Commission, which is highly unusual.” The Commission did not respond to a request for comment. Other lobbyists confirmed they received the document from DG MOVE weeks ago. They responded by asking that the draft be integrated with actual industry requests, such as introducing a tradability system for SAF called book-and-claim, which the Commission has so far opposed. A draft of the document, seen by POLITICO, includes this request. “Now it’s basically a Frankenstein that carries all sorts of different messages,” said another lobbyist. “In the end, it’s probably not going to achieve anything because the main message has been diluted,” the sector representative added. The industry paper of dubious origin recommends various “calls for immediate action” to be included in the upcoming Sustainable Transport Investment Plan, which Tzitzikostas will announce later this year. According to an airline representative, the Commission’s efforts to influence the message of the aviation industry are an attempt to repair the communication damage inflicted on ReFuelEU — the EU’s flagship legislation to decarbonize aviation — at the Airlines for Europe summit in late March. It is set to be presented to Transport Commissioner Apostolos Tzitzikostas during the Paris Air Show at Le Bourget Airport. | Ronald Wittek/EPA On that occasion, the CEOs of major airlines, including Lufthansa, Air France-KLM, Ryanair and British Airways’ parent company, IAG, called for a delay in what they called “not realistic” mandates aimed at increasing the role of SAF — which is currently mainly made from used cooking oil — in the jet fuel mix. The first SAF mandate to include at least 2 percent SAF in the jet fuel mix sold to airlines took effect on Jan. 1. But airlines are complaining that they are paying twice the expected price as suppliers are charging them additional “compliance fees” in addition to SAF, which already costs three times the price of fossil kerosene. In 2030, fuel suppliers will be requested to provide jet fuel that is at least 6 percent SAF, including 1.2 percent of synthetic e-SAF made from renewable hydrogen and captured CO2. No final investment decisions have been made on any e-SAF projects in Europe. “The Commissioner doesn’t want to replicate the disaster of the automotive sector,” said the carrier lobbyist, referring to the ban on selling new gas and diesel vehicles from 2035, a measure openly opposed by many in the car industry. “He wants to ensure that airlines continue to support the measures adopted” with regard to aviation. The declaration proposes several actions, including the joint creation of a revenue certainty instrument by the Commission and member countries to overcome the mismatch between the long-term production and short-term use of e-SAF. This mechanism could take the form of contracts for difference, demand aggregation mechanisms, or double-sided auctions, and it should be operational by the end of 2026 to reduce the risk of investing in e-SAF. Another recommendation is to introduce targeted simplification measures for early movers and small-to-medium businesses investing in SAF to reduce the administrative burden. Representatives from the lobby groups who received the document told POLITICO they intend to sign it. Martina Sapio contributed reporting.

LONDON — Opening a third runway at Heathrow Airport could result in pollution equivalent to an additional 2.4 million tons of carbon dioxide being released into the atmosphere each year by 2050, according to government estimates seen by POLITICO. The data, obtained through a Freedom of Information request, sets out for the first time Whitehall’s forecasts for the additional environmental damage caused if a controversial third runway is opened at Heathrow in 2039. The figure, from analysis conducted in January this year, is based on modeling applying ministers’ current “policy ambition” to cut aviation emissions. Chancellor Rachel Reeves announced in January that the government would back a third runway at Heathrow, the U.K.’s biggest airport. Her support is part of the Treasury’s bid to boost sluggish economic growth and generate jobs.  But the government has come under pressure from green groups and MPs concerned that airport expansion would make it harder for the U.K. to hit its climate goals. Energy Secretary Ed Miliband, who voted against Heathrow expansion in 2018, said it would take place only if legally-binding carbon budget targets can still be met, which in practice means emissions from the third runway would need to be offset by reducing pollution elsewhere in the economy. Miliband’s Department for Energy Security and Net Zero declined to answer how it would achieve these offsets, referring the query to the Department for Transport. It is now up to Heathrow bosses to submit expansion plans by the summer. The airport is aiming to get a green light before the end of this parliament. JET ZERO The data, released by the Department for Transport (DfT), is based on a scenario where a third runway at Heathrow becomes fully operational in 2039. Under that scenario, sustainable aviation fuel (SAF) — a lower-carbon jet fuel still in the initial stages of development — would make up 22 percent of fuels by 2050.  New legislation requiring airlines to ensure two percent of the jet fuel they use is sustainable, known as a SAF mandate, was laid before parliament this week. Ministers hope the industry could hit 22 percent as early as 2040, where the requirement will be fixed “until there is greater certainty regarding SAF supply.” Separate government calculations released by the DfT, based on a “high ambition” scenario where SAF makes up 50 percent of jet fuel by 2050, found additional emissions from Heathrow would be equivalent to 1.4 million tons of CO2. That scenario, modeled on a “jet zero” strategy published by the previous government, would also see the roll out of zero-emissions flights and greater fuel efficiency. Energy Secretary Ed Miliband, who voted against Heathrow expansion in 2018, said it would take place only if legally-binding carbon budget targets can still be met. | Pool photo by Chris J. Ratcliffe/EFE via EPA Some emissions created from a third runway could be offset by passengers opting to fly from Heathrow who could otherwise have flown from a different U.K. airport, according to an accompanying DfT document. “A third runway at Heathrow doesn’t make sense for the economy or the environment. It would undermine regional growth and the U.K.’s domestic tourism industry,” said Nick Davies, head of climate policy at the Green Alliance think tank. “We’ve got a long way to go to zero-emissions flights — so the reality is that allowing airport expansion to go ahead will fly in the face of the U.K.’s climate targets.” Experts warned that overall emissions could still be higher than the DfT estimate, since government modeling looked at expansion at other airports and excluded any additional emissions produced in the construction of new infrastructure and other airport operations.  “The environmental damage created by an expanded Heathrow is a danger to us all, especially when factors missing from this calculation are considered. Counting other greenhouse gases and inbound flights could quadruple the DfT’s estimate,” warned Alex Chapman, a senior economist at the New Economics Foundation think tank.  The government risks “tarnishing the U.K.’s climate credentials” for “minimal economic benefit,” Chapman added. “We estimate around two-thirds of new flights created are taken by a tiny minority of wealthy, U.K.-based, frequent flyers travelling for leisure.” A DfT spokesperson said: “Expanding Heathrow could drive growth, trade and tourism and unlock over 100,000 jobs, cementing our position as a world leader in aviation. We are committed to reaching net zero by 2050 and any expansion plans would be assessed against the government’s legal, carbon and environmental obligations.”

BRUSSELS — The EU’s effort to slash CO2 emissions from flying is running into serious trouble and Brussels needs to force airlines to use more sustainable aviation fuel and even slap tariffs on imports, the head of the bloc’s largest sustainable fuel producer told POLITICO. The situation for sustainable aviation fuels (SAFs) is so dire that Finland’s Neste will complete an existing refinery in Rotterdam and then halt all of its other planned projects. “We will have to hold on other investments, simply because … the amount of debt of the company has reached a level where we simply cannot continue,” Heikki Malinen, CEO of Neste, said in an interview with POLITICO. “The issue is simply the lack of demand.” That creates the danger the EU won’t hit its target of cutting greenhouse gases from flying — a key part of its Green Deal project to make the bloc climate neutral by 2050. Aviation is responsible for about 2.5 percent of global CO2 emissions, and that is expected to rise as demand for flying grows. SAFs are seen as the easiest way to make flying greener. The fuels are made with plant and animal materials like cooking oil and agricultural residues and emit up to 80 percent less CO2 than fossil kerosene. SAFs can be mixed with conventional fuel and burned current jet engines. The problem is that SAFs are about 2.5 times more expensive than fossil kerosene. That makes airlines unwilling to buy the fuel, and producers are wary of investing in new refineries without assured demand. The result is there is too little production and costs remain high. The EU aims to fix that with its ReFuelEU Aviation law, which mandates that airlines and fuel suppliers use at least 2 percent of SAF for flights in Europe as of this year, rising to 6 percent by 2030 and 70 percent by 2050. That’s supposed to set a baseline for demand. On top of that, several airlines pledged to use more sustainable fuel than required by EU legislation, either by setting their own targets or by offering passengers the option to pay more to offset the extra cost of flying with SAF. But Neste says that’s not happening. “This voluntary demand for SAF basically has not materialized,” said Malinen. When the Finnish company started investing in SAF, “We made estimates of what the demand could be, both mandated and voluntary,” Malinen said. But the only demand comes from the EU mandate; airlines aren’t buying any extra. SAFs are seen as the easiest way to make flying greener. | Arthur Gekiere and Belga Mag/Getty Images “The market for SAF last year was less than 1 million tons, and the kerosene jet fuel market over 350 million tons, so it’s a drop in the bucket,” Malinen said. The company — which says it has invested about €10 billion in SAF, biodiesel and other types of renewable fuels — is completing a refinery expansion in Rotterdam. “Neste’s capacity alone in 2027 [will be] 2.2 million tons,” Malinen said, adding his company could satisfy “double” the current European demand for SAF. But without voluntary buying, that’s unlikely to be required. And waiting in the wings is yet another EU mandate, this one for synthetic eSAF which is made with renewable energy and CO2 captured from the air to make a truly green fuel. By 2030, 1.2 percent of aviation fuel will have to be eSAF, but the price is “at least double the cost of SAF,” Malinen said — more than four times the cost of fossil kerosene. CALLING ON EUROCRATS The CEO wants Brussels to help. First, he wants to tweak the ReFuelEU mandate to avoid jumping from 2 percent to 6 percent only in 2030. Instead, the mandate should be increased smoothly. “It kind of goes hand-in-hand with the increase in supply,” Malinen said. He also wants Brussels to protect domestic producers. There is massive uncertainty in the global market thanks to U.S. President Donald Trump, who is scrapping his predecessor’s green mandates. Former President Joe Biden’s Build Back Better program aimed to meet 100 percent of aviation fuel demand with SAFs by 2050. But Trump’s “drill baby drill” pledge to expand oil and gas projects could mean U.S. airlines buy less SAF than foreseen — affecting global demand. A possible introduction of SAF mandates by Beijing could also reduce imports of used cooking oil and other feedstocks from China to Europe — making SAF production even more difficult. “We’re not saying that the imports shouldn’t happen. Europe has always been open to global markets … there are tariffs now for renewable diesel, but nothing for SAF and I think this is something that we really ask the regulators to seriously consider,” Malinen said. “The challenge we face is that in this world, which is geopolitically now getting quite complicated, you have a lot of divergence in terms of how different regions of the world address subsidies, how they address tariffs. And Neste, as a European company, is trying to find that balance,” he added.

LONDON — U.K. Energy Secretary Ed Miliband is in another fight with the Treasury. And, as the government desperately pursues good news on economic growth, he looks destined to lose again. Chancellor Rachel Reeves is on course to approve a new runway at Heathrow Airport, green light the opening of London Gatwick’s second runway and back Luton Airport’s expansion plans, two officials told POLITICO. The decisions, first reported by Bloomberg, would fit with Reeves’ desperate attempts to pull any lever she can to get the economy firing, after the most recent figures showed growth continuing to flatline. Labour has made growth its central “mission” in government. It has also pledged to hit ambitious green targets for stripping carbon out of the economy — another Whitehall mission, this time spearheaded by Miliband, who insists he will not resign if the government does go ahead with airport expansion. “Don’t be ridiculous, no,” he replied Thursday afternoon when the PA News agency put that suggestion to him. Still, at a time when global aviation accounts for 2.5 percent of the world’s planet-destroying carbon emissions, expanding the hubs would undermine those climate goals and undoubtedly leaves Miliband in a deeply uncomfortable position. One person at Miliband’s Department for Energy Security and Net Zero (DESNZ) said the ministry is not pleased about the expected announcements. OPPOSITION YEARS Miliband is a long-time opponent of airport expansion. When leader of the Labour Party in opposition, he reversed his party’s support for a third runway at Heathrow and voted against the plans when they came before parliament in 2018. One of Miliband’s first moves on returning to government last summer was to appoint Chris Stark as the most senior official overseeing that drive to climate goals, praising the “expertise and experience” of his new right-hand man. Stark was the boss of the Climate Change Committee, the government’s independent advisers on climate policy, when it recommended in 2023 that, to limit carbon emissions from aviation, “there should be no net airport expansion across the U.K.” unless steps were first taken to control emissions. Prime Minister Keir Starmer also voted against Heathrow expansion while an opposition MP in 2018. On Wednesday his official spokesperson declined to comment on that vote or the specific details of Reeves’ decision, but made it clear that the economy remained the priority. “We are absolutely determined to get our economy growing and secure the long-term future of the U.K. aviation sector,” the spokesperson said. “Any airport expansion proposals must demonstrate their contribution to economic growth … [while showing] compatibility with legally-binding climate obligations.” That could involve greater use of sustainable aviation fuel (SAF), a lower-emitting form of jet fuel. Virgin Atlantic boss Shai Weiss said in 2023 that the industry is still “early in the adoption curve” in the U.K. Chancellor Rachel Reeves is on course to approve a new runway at Heathrow Airport. | Alan Crowhurst/Getty Images Reeves is expected to make her decision official in a major speech on growth next week.  Asked about the proposals during her trip to Davos, Reeves said: “When we say that growth is the number one mission of this government, we mean it. That means it trumps other things.” GROWTH VS GREEN Miliband’s allies point to an increase in DESNZ’s capital budget when the government announced spending allocations in October as evidence of how seriously its priorities are taken. But the call on airports is not the first time Miliband’s goals have been defeated by Reeves and the all-powerful Treasury. Labour U-turned on its pre-election pledge to hand Miliband £28 billion a year to spend on getting the U.K. to net zero, slashing the commitment by 75 percent after coming under pressure from the then Conservative government.   Then once in power, DESNZ secured some — but not yet all — of the £6.6 billion Labour had promised during the election campaign for fixing up the U.K.’s drafty and inefficient housing stock with insulation and cleaner heating. In the meantime, the expansion decisions will appall green campaigners. “It should be an easy decision for politicians to prioritize the health of local communities over the profits of the aviation industry. If they consider what’s in the interest of the whole country, the government’s independent advisers, the CCC, say airports mustn’t grow unless we have a plan for curbing their contribution to runaway climate change,” said Johann Beckford, senior policy adviser at the environmental think tank Green Alliance. On Thursday, Miliband sought to pre-empt that criticism. “We believe that we can meet our growth mission – our number one priority – and keep within carbon budgets and indeed that our clean energy mission is crucial and a central part of meeting our growth mission,” he insisted. “Far from them being in contradiction, they are absolutely complimentary.” Additional reporting by Sam Blewett, Emilio Casalicchio and Abby Wallace. This story has been updated.

One of President Joe Biden’s signature climate initiatives is on the clock. The Department of Energy is racing to close $25 billion in pending loans to businesses building major clean energy projects across the country. The push is one of Biden’s last chances to cement his climate legacy before President-elect Donald Trump takes office next year under the promise of shredding Democratic spending programs. The department’s Loan Programs Office emerged as one of Biden’s most potentially powerful tools for greening the economy, making billion-dollar deals to restart a nuclear power plant in Michigan, fund lithium mining in Nevada, and build factories for churning out electric vehicle components in Ohio and Tennessee. But it faces an uncertain future under Trump, who as president backed only one project under the program and proposed slashing the office’s budget. And Trump’s recent pick to lead DOE, Chris Wright, is a fracking executive who has criticized the use of “large government subsidies and mandates.” That sets up a high-wire act in the closing weeks of Biden’s presidency — both for DOE and for energy companies seeking a financial lifeline from Washington. Of the 29 loans and loan guarantees the administration has announced, 16 have yet to be completed. They include $9.2 billion for an EV battery project in Kentucky and Tennessee, a $1.5 billion guarantee for sustainable aviation fuel production in South Dakota, and $1 billion for electric vehicle charging infrastructure nationwide. “There’s nothing like seeing your own coffin to get you moving faster,” said Andy Marsh, president and CEO of the hydrogen company Plug Power, which hopes to close a $1.7 billion loan from DOE. Plug Power produces electrolyzers and other components needed to make hydrogen from electricity, a zero-emissions source of energy that could take a hit under Trump. The DOE loan would provide funding to help the company build up to six “green hydrogen” plants. Marsh said he’s aiming to lock in the loan guarantee “before Jan. 20th” — when Trump will be inaugurated. “We know that it’s in our best interest to have that resolved by then,” he said. The pending loans, some of which were announced almost two years ago, preview a potential fight under Trump: pitting efforts to reduce U.S. dependence on Chinese imports against Republicans’ desire to cut spending. The loans stem from Biden’s wider effort to spur a green building boom to erode China’s clean energy dominance and slash planet-warming pollution. Twelve pending loans and loan guarantees worth a combined $21 billion are in Republican congressional districts, according to a POLITICO review. The department also has a pile of 210 active applications, totaling $303.5 billion, as of October. The office recently adjusted its estimated remaining loan authority to nearly $400 billion across several programs — leaving hundreds of billions of dollars available for the incoming Trump administration should it seek to use the office. “First question you ask, what’s obligated, what’s not obligated,” said Mark Menezes, who served as deputy Energy secretary during Trump’s first term, referring to committed financing that would be harder for the future president to cancel. He anticipates that the Biden team will try to close the loans in the coming weeks. “It’s easier to explain a finalized loan and what it is being used for, as opposed to a conditional loan,” Menezes said. “What’s holding it up? Why isn’t it getting across the finish line? Those are fair questions.” Other former staffers of the lending office expect the administration to expedite the completion of loans in the waning weeks of Biden’s presidency. “For the projects that are ready, it would probably do them well to prioritize the projects that they want to move forward that they don’t think a Trump administration would,” said Kennedy Nickerson, a former policy adviser at the loan office who is now a vice president of energy at Capstone, an investment research firm. Brendan Bell, chief operating officer at Aligned Climate Capital and former director of strategic initiatives at the loans office under former President Barack Obama, predicted that the Biden administration will “work to the wire” to close its conditional commitments. “I don’t expect their work to stop. But then the real question is, what happens after that?” he said. ‘WE ARE SCARED ABOUT IT’ The Loan Programs Office was established in 2005 to provide funding for emerging energy technologies that have difficulty attracting private capital. It had some notable successes. The office awarded $465 million to Tesla Motors in 2010, helping to turn Elon Musk’s electric vehicle company into an industry giant. Musk, a prominent Trump supporter during the campaign, will have a role in the new administration giving him authority to propose deep cuts to federal spending and the government workforce. But the program is perhaps best known for a loan guarantee that failed. In 2009, the office backed a $535 million loan guarantee to Solyndra, a solar manufacturer that later went bankrupt. Republicans lambasted the program as an example of wasteful liberal spending. Loans slowed to a trickle. Later, the first Trump administration closed one deal through the office, guaranteeing $3.7 billion in financing for the construction of a nuclear reactor in Georgia. Menezes, who was deputy Energy secretary at the time, said the Trump administration tried to advance several other loans, only to be met by internal resistance from career staffers who were unsettled by the Solyndra experience. The loan office has been anything but sleepy under Biden. He tapped Jigar Shah, a prominent clean energy entrepreneur who co-hosted a popular energy podcast, to lead the office. Shah quickly became a leading voice for the administration on energy issues, talking up the department’s ability to confront the so-called valley of death that prevented cutting-edge companies from obtaining private financing. Earlier this year, Time magazine named Shah one of the 100 most influential people of 2024. “The Biden administration had a completely different view of the LPO, and when they came in they took some structural moves that made the office more responsive to loan applications,” Menezes said. “The department has changed significantly since the time we were over there.” Shah, in a tweet this week, highlighted how DOE has transformed under Biden to become “a commercialization engine.” Altogether, the office has announced roughly $37 billion in loans or loan guarantees for 29 projects during Biden’s tenure. It has finalized financing for 12 of them, worth roughly $12 billion. Two of them were completed after the election. Another 16 projects have received conditional commitments for loans or guarantees worth just over $25 billion — an amount the administration is racing to finish before Biden leaves office. An additional project that received a conditional award is listed as inactive. The incoming Trump administration could rip up unfinished loans or put a moratorium on further action, some proponents of the office fear. “We are scared about it,” said Nalin Gupta, founder and CEO of Wabash Valley Resources, which received a conditional commitment for a nearly $1.6 billion loan guarantee in September to install a carbon capture and sequestration system on an ammonia facility at the site of a former coal plant in Indiana. The project — which supports a technology long embraced by Republicans — underwent initial review during Trump’s first term, giving the company some confidence the loan would be approved under the future White House. But Gupta added: “We have been on this journey for eight years, and we just got our conditional approval. We were almost celebrating, but I’ve learned each time I celebrate it lasts for this long before something comes up.” ‘WITHIN OUR CONTROL’ The first Trump administration sought to slash the office’s budget. And Project 2025 — the conservative road map that Trump tried to distance himself from before the election — has called for halting new loans and eventually eliminating the office. Analysts said it is unclear how Trump would approach the office. His administration could take a favorable view of loans for long-standing Republican priorities such as carbon capture, as well as projects that reduce dependency on China, they said. But Trump has vowed to make deep cuts to federal spending through the so-called Department of Government Efficiency to be led by Musk and Vivek Ramaswamy, a former Republican presidential candidate and pharmaceutical entrepreneur. “Too much bureaucracy = less innovation & higher costs,” Ramaswamy said Friday on X, pointing to “countless 3-letter agencies.” “They are utterly agnostic to how their daily decisions stifle new inventions & impose costs that deter growth,” he added. Wright, Trump’s pick to lead DOE, has argued there is “no energy transition happening now,” and his company published a 180-page report this year asserting that tax credits and expenditures under the Democrats’ climate law would reduce investment in other areas. “We cannot let the Inflation Reduction Act enfeeble our energy system,” the paper said. Wright has backed low-carbon technologies like geothermal and nuclear. His company, Liberty Energy, is partnering on a geothermal project with Fervo Energy and a next-generation nuclear project with Oklo, which designs small modular reactors. Shah highlighted how the loan office and other DOE programs would finance geothermal and nuclear energy. “At the end of the day, the secretary of Energy signs off on these loans,” said Bell, who worked in the loan office under Obama. In a note to clients, the consultancy Capstone said deals under the office that have attracted Republican criticism or that have ties to Chinese companies are most at risk of not succeeding. It listed the $1.7 billion loan to Plug Power, a $1 billion loan to EVgo for EV charging infrastructure and an $850 million loan to KORE Power for battery manufacturing in Arizona as being in jeopardy. Plug Power has attracted criticism from Sen. John Barrasso, a Wyoming Republican, for its relationship with Shah. Shah was working at Generate Capital in 2019 when the clean energy investment firm lent $100 million to Plug Power. Karoline Leavitt, a spokesperson for the Trump transition team, said in a statement that Trump was elected with a mandate to deliver on his campaign promises. Trump repeatedly called for cutting Biden’s climate and energy policies, including rescinding unspent funds from the Inflation Reduction Act. The law created a new program under the LPO and provided it with about $11.7 billion in funding. The Biden administration signaled that it won’t let the loans die without a fight. A DOE spokesperson pointed to the office’s efforts to advance projects on nuclear energy, carbon capture and critical minerals, noting that they have bipartisan appeal. “There is steel in the ground and job openings at new or expanded facilities around the country,” Jeremy Ortiz said in a statement. “It would be irresponsible for any government to turn its back on private sector partners, states, and communities that are benefiting from lower energy costs and new economic opportunities spurred by LPO’s investments.” Many business executives have sought to project confidence that their projects will be completed before Trump arrives. EVgo CEO Badar Khan told investors he doesn’t expect “a lengthy process to close the loan.” “The conditions are at this point largely within our control,” Khan added. Mallory Cooke, a spokesperson for BlueOval SK, which received a $9.2 billion conditional loan commitment to help build battery factories in Kentucky and Tennessee, said the consortium is “working with our partners at the Department of Energy on final loan approval and will share details upon conclusion of that process.” The project is expected to start producing EV batteries in 2025, Cooke said. Eos Energy Enterprises, meanwhile, has made “significant progress” toward closing a $398 million loan for a battery factory outside Pittsburgh, CEO Joe Mastrangelo told investors recently. The loans office has picked up the pace in recent months. Of the 12 loans finalized by the office under Biden, seven have been completed since September. The office has continued to announce new conditional commitments. In October alone, it announced conditional deals for the sustainable aviation producer Gevo ($1.46 billion), the low-carbon fuels maker Montana Renewables ($1.44 billion) and the battery component maker Aspen Aerogels ($671 million), as well as the $1.05 billion for EVgo. The Loan Programs Office has shown it can move fast. The first loan closed by the Biden administration, a $504 million deal for a hydrogen production and storage facility in Utah, was completed 43 days after the conditional deal was announced. But the average loan took 221 days between the conditional and final announcements. Some of the pending deals have lingered for years. Monolith Nebraska has been waiting for nearly three years on a $1.04 billion loan guarantee for a clean hydrogen production facility in Nebraska. Redwood Materials has waited almost two years on a $2 billion loan for a battery recycling and production facility in Nevada. The developers of Rhyolite Ridge have been waiting for almost two years for a $700 million loan for a lithium and boron mine in Nevada. All three companies declined to comment or didn’t respond to inquiries. But in October, Bernard Rowe, managing partner of Ioneer, the company behind Rhyolite Ridge, told POLITICO that he’s “not concerned about whether or not we’ll get there.” The loan was contingent on the company receiving an environmental permit for the mine, he said. The project received its permit shortly thereafter. Developers of projects in the pipeline hope Trump will take a different approach than he did during his first term — particularly because most of the projects are in GOP districts. “It’d be really hard for them to just sit on 200 applications worth $300-plus billion and not have anybody with really good ties to the Republican Party make a stink about it,” said Nickerson, the Capstone analyst. Geography is likely to be an important factor in the Trump administration’s considerations, said Heather Reams, executive director of Citizens for Responsible Energy Solutions, a center-right nonprofit that advocates for clean energy. “These are states that are important to the Republican demographics,” she said. “I think the members of Congress representing those states can make the case that it’s important to their districts, and those members are also likely important to the president-elect.” But others said geographic considerations only go so far, particularly when Republicans will be looking for ways to pay for a multitrillion-dollar extension of the tax cuts enacted in Trump’s first term. Lobbying from Republican lawmakers might save some projects, but “I expect the number to be few,” said Mary Anne Sullivan, senior counsel at Hogan Lovells who served as DOE general counsel during the Clinton administration. The loans office has not been particularly popular with the GOP in the past, she noted. “I expect them to be better at executing their objectives this time round,” Sullivan said of the Republicans. “If their objective is to let this program die a natural death, that would not be hard to accomplish.”

Well, the Trump show’s just been rebooted. And Europe can’t look away. European policymakers have spent months preparing for Donald Trump’s potential return to the White House. But let’s be honest, they don’t really know how this will all unfold. For instance, Trump has promised to slap tariffs on every single European good entering the U.S. So the EU has preemptively locked and loaded some retaliatory measures. Seems logical — but that only works in a world where Trump is not erratic and impulsive. Also, remember Trump’s boast that he could instantly “end” Russia’s war in Ukraine? Whatever his bluster means, it has ramifications in Europe. And that’s just what’s consuming the headlines. Trump’s victory will inevitably affect every area of EU policy, from drug pricing to green technologies to artificial intelligence standards. So buckle up while POLITICO futurecasts what this all means for the EU. The remake will be unmissable, if nothing else. Energy Climate Trade Central banking Sustainability Financial services Health Mobility Defense Tech Competition Cybersecurity ENERGY Trump has boiled his energy policy down to three words: “drill, baby, drill.” His vow to boost oil and gas extraction, and ship more fossil fuels abroad, has raised eyebrows among environmentalists but has industry eyeing big profits. Despite American exports of natural gas hitting a record high last year, Trump wants to ax a Biden administration freeze on permits for new liquified natural gas (LNG) projects, a restriction that creates uncertainty for the European market. His crusade against the green transition could be less crowd pleasing. Some in Trump’s camp want him to scrap the Inflation Reduction Act (IRA), which allocates more than half a trillion dollars for projects like clean tech, hydrogen and renewable energy. That program, however, has created jobs in key states and drawn business away from Europe, giving the U.S. a head start over the EU in industries such as wind, solar, alternative fuels and electric vehicles. Its repeal could be a boon for Brussels as it sets its sights on competition with Washington. Back to the top CLIMATE Donald Trump’s victory spells environmental disaster. To avert catastrophic levels of global warming, the world has very little time to dramatically slash emissions. Yet under Trump — who plans to pull the U.S. out of the Paris Agreement once again and double down on fossil fuels — the pace of the green transition is projected to slow down rather than speed up.  With the U.S. responsible for more than a tenth of planet-warming pollution, any shift in American climate policy has global consequences. A hotter planet means more disasters, including within the EU, which has to prepare accordingly for worse climate impacts. And some fear Trump’s win may reduce momentum for climate action worldwide, putting the Paris Agreement goals even further out of reach.  Funding for climate action in poorer countries is the hot topic at this year’s global climate summit starting Nov. 11, and Trump’s victory may plunge the conference into uncertainty — with many looking toward the EU to step up and fill the leadership vacuum. Yet without U.S. backing for much-needed reforms of the global financial architecture to cope with the climate challenge, debt-distressed developing countries will struggle to raise the necessary funds to switch away from fossil fuels.  Back to the top Donald Trump’s victory spells environmental disaster. | Chip Somodevilla/Getty Images TRADE “America First” will again sum up Trump’s approach to trade policy.  He’s vowed to bring back jobs to the U.S. and punish friends and foes with across-the-board tariffs of 10 or 20 percent (and up to 60 percent on goods coming from China), despite economists’ warnings of a detrimental impact on U.S. economic growth and higher costs for consumers. Trump’s trade policy is focused more on reducing the sizable U.S. trade deficit than on opening up new market opportunities. Trade policy will mainly be seen through the national security and geopolitical lens.  The EU failed to capitalize on the détente with the Biden administration to fix lingering trade disputes on steel and aluminum tariffs, green subsidies on electric cars, and reviving the highest court of the World Trade Organization. These rifts are expected to worsen under Trump.  The most immediate stress tests for Brussels and Washington will be to find a solution to the EU’s paused retaliatory tariffs against Washington (the truce elapses in March 2025), as well as its aircraft dispute over subsidies for Airbus and Boeing by 2026.  Back to the top CENTRAL BANKING Call it Trumpageddon.  If the president-elect goes ahead with even half the ideas he’s floated on the campaign trail, expect serious pain for the European economy. Analysts at Goldman Sachs said the euro could drop as much as 10 percent against the dollar if the new administration enacts its across-the-board tariff plan, while earnings among a group of Europe’s largest companies could fall by more than 5 percent next year.  Trump has explicitly called for more White House interference into the working of the U.S. Federal Reserve — America’s central bank — which has made its independence from politicians into a calling card. That could have huge implications for the stability of the global financial system, as well as the continued dominance of the dollar as the world’s reserve currency. Less direct, but no less impactful, are plans to deport undocumented migrants by the millions. It’s not yet clear who will be in the crosshairs of the mass deportation program, but given the importance of migrant labor, even the undocumented kind, for key sections of the American economy, there will be an unavoidable upwards pressure on prices. That could translate to higher U.S. interest rates, and put pressure on the European Central Bank to follow, screwing with an already shaky economic recovery. Back to the top SUSTAINABILITY It’ll come as no surprise to Brussels that the president-elect is not a fan of green policymaking. While the Trump administration probably won’t impact Brussels’ own rule-setting on green issues, Trump’s animosity for environmental policy will widen the gap between the two blocs on the international stage and harm the EU’s ambitions to promote multilateral cooperation. Under Biden, efforts to mandate American businesses to report on their environmental footprint were already stalling, frustrating Brussels’ hopes of creating global standards so companies operating in Europe don’t feel unfairly burdened. Under Trump, Brussels can kiss that dream goodbye.  Waltzing into the Oval office for a second time, Trump could also start backtracking on international commitments made by the U.S. The Republican Party is strongly against the U.S.-backed proposal to limit plastic production as part of the ongoing negotiations for a global plastics treaty. This could crush the EU’s hopes of American support in the final round of talks later this month. Back to the top Domald Trump’s animosity for environmental policy will harm the EU’s ambitions to promote multilateral cooperation. | Chip Somodevilla/Getty Images FINANCIAL SERVICES Trump’s victory will set the teeth of the world’s finance regulators on edge. Many global rules aimed at preventing another global financial crisis are drawn up in international bodies like the Financial Stability Board, IOSCO and the Basel Committee on Banking Supervision – all of which could be under threat from an uncooperative U.S.  In the short term, the Trump win looks like bad news for the global rollout of bank capital rules known as Basel III, drawn up after the 2007-2008 crisis to make sure lenders have enough reserves to cope with economic shocks. The U.S. has already changed its plans and postponed its rollout of the global rules after massive lobbying from the banking industry, and now could well scrap the rules altogether, prompting fears of financial instability.  But Wall Street is likely to be happy with Trump’s “America First” economic policies which boost manufacturing and loosen regulations, particularly on competition. Trump didn’t rock the boat on financial services policy the first time around, stacking regulators with Wall Street grandees. But while campaigning this time he launched a crypto venture. So the jury’s out on that one.  Back to the top HEALTH In his previous stint as president, Trump attempted to curb drug prices with little impact. Since then, the Biden administration has used the IRA to push through far-reaching drug price restrictions for people on Medicare, the health insurance for older Americans. Trump is unlikely to roll this back, meaning Big Pharma in the U.S. and Europe will be considering their investment options as both regions push to limit pharma profits. Global health advocates might also be fearing that Trump will once again withdraw from the World Health Organization (Biden overturned Trump’s previous withdrawal on his first day in office). The U.S. is the largest funder of the U.N. body, so its disengagement would have a huge impact on global health projects. Abortion has been one of the top voter concerns this election campaign. Trump, who claimed victory for overturning women’s right to abortion via Roe v. Wade, has since said he would veto a federal ban, leaving power with the states on the extent to which abortion is or isn’t allowed. Back to the top MOBILITY Donald Trump’s victory is likely to hurt European carmakers. “I want German car companies to become American car companies,” Trump recently told his supporters, promising “the lowest taxes, the lowest energy costs and the lowest regulatory burden” for automakers that choose to move production to the U.S. and “a very substantial tariff” on the others. Republicans also promised to cancel Biden’s electric vehicle mandate, which aims to ensure that half of all new cars and trucks sold in 2030 are zero-emission. Trump’s reelection could also spell bad news for Airbus and the rest of the European aircraft sector, with a possible wave of aerospace protectionism aimed at rescuing Boeing from troubled waters. It also remains to be seen if Trump will maintain his skepticism of green tech policies or continue to subsidize sustainable aviation fuels, which benefited massively from the Biden administration’s tax cuts under the IRA. As for shipping, which is most exposed to the negative effects of tariffs, the sector will be closely watching any type of trade war that a second Trump administration might launch. Back to the top DEFENSE A Trump win means Europe can no longer — or at least much less — rely on the U.S. for its defense and security. Donald Trump threatened during his first term to leave NATO and has repeatedly said on the campaign trail that Washington wouldn’t come to the rescue of allies who don’t invest enough in their military in case of a Russian aggression.  In a way, this may be a blessing in disguise for the EU, forcing European governments to work more closely together and make bold decisions — such as agreeing to joint borrowing to boost the bloc’s defense industry. France could revive discussions on the European aspect of its nuclear doctrine, while Brussels and London could accelerate talks for a defense and security agreement. Most countries would likely raise defense spending as much as possible.  On the other hand, we may see European capitals bilaterally try to curry favor with a Trump administration to ensure Washington remains interested in their security, namely by increasing even more purchases of U.S.-made weapons when the European Commission is trying to incentivize EU countries to buy local.  A Trump win means Europe can no longer — or at least much less — rely on the U.S. for its defense and security. | Chip Somodevilla/Getty Images The Trump win could mean the end of U.S. military aid to Ukraine and pressure on Kyiv to negotiate a peace deal with Russian President Vladimir Putin, even if the terms are more favorable for Moscow.  Back to the top TECH Under Biden, the EU was on speaking terms with the U.S. on tech. The Trump win could change that by spelling the end of the U.S.-EU Trade and Technology Council, the biannual transatlantic political gathering founded in 2021 as a place for the U.S. and the EU to discuss tech policy and coordinate on topics such as semiconductors and artificial intelligence standards. The collapse of such a diplomatic backchannel could come when international alignment on AI governance is needed the most.  Another liability is Trump’s proximity to Elon Musk, the owner of X, who has become a big Trump supporter. If the EU fines X for breaches of the bloc’s content-moderation rulebook, the relationship between Trump and the European Commission could sour very quickly and reinvigorate a well-known narrative that the EU is only trying to “take U.S. Big Tech companies down.”  Back to the top COMPETITION A Trump win opens up an uncertain era, as he hasn’t expressed clear lines on industrial policy or antitrust regulation, beyond an “America First” approach. While no fan of Big Tech, he has expressed frustration over European efforts to rein in American companies. He told a podcast in October that Apple Chief Executive Officer Tim Cook had called him to complain about an EU antitrust fine and losing a court ruling that required it to hand over billions of euros in back tax. He appears to oppose U.S. and EU antitrust efforts to split off parts of Google’s business, saying that “China is afraid of Google.” Trump has been backed by tycoon Elon Musk who has run into several digital regulation battles with the European Commission. Ultimately, Trump’s win may speed up European efforts to rely less on the U.S. as a partner, pushing on with an economic security strategy that emphasizes European production and a wide range of international suppliers and markets. That could see more pressure within Europe for EU merger reviews to allow bigger European companies and for more government help to boost European champions. Back to the top CYBERSECURITY The biggest cybersecurity impact of a Trump win is that his administration could remove Israeli spyware firms from the U.S. entity list of companies deemed a national security concern. Some of them, like NSO Group, have already been lobbying Republicans. The U.S. could also abandon American-led international efforts to clamp down on the proliferation and misuse of commercial spyware, which would have a ricochet effect on global efforts to rein in the surveillance tool.  Any distancing of the U.S. from NATO under Trump could also affect the Western alliance’s cyber capabilities.  Back to the top Gabriel Gavin, Zia Weise, Camille Gijs, Marianne Gros, Kathryn Carlson, Helen Collis, Tommaso Lecca, Laura Kayali, Pieter Haeck, Aude Van Den Hove, Antoaneta Roussi and Cory Bennett contributed to this report.

This article is the product of a POLITICO Working Group presented by GE Aerospace. BRUSSELS — After years of legislation and target-setting to reduce aviation emissions, the sector has a message for the EU: Give us a break! Unlike carmakers, aviation representatives are not asking for green targets to be watered down. They are simply fed up with decades-long roadmaps to slash emissions from aviation, which account for about 4 percent of the bloc’s CO2 pollution. They’re asking for an end to reform and lots more cash. Instead of new green regulations, “what I would rather expect is to see new programs, new projects that would support the development of the sector and help bring the price down,” said Piotr Dziubak, head of the international affairs unit of the aviation department at the Polish ministry of infrastructure. Brussels is aware of the issue. But aviation has a problem going green: It’s far more difficult to switch fuels or technology than in cars, for safety reasons. After all, a car with a faulty engine simply rolls to a stop, while an airplane falls from the sky. The industry says a flood of investment is needed to make experimental technologies viable — from sustainable aviation fuel (SAF) to rethinking air-traffic control to allow better routes, battery-powered aircraft, and radical redesigns of engines and airframes to squeeze out further efficiency gains. The immediate focus is an effort to switch from fossil kerosene to SAF, an alternative made from non-petroleum feedstocks that emits about 20 percent as much CO2 as traditional fuels. ReFuelEU — legislation passed last year — requires airline fuel suppliers to incorporate 2 percent SAF by 2025, 6 percent by 2030 and 70 percent by 2050. But SAFs are currently expensive and aren’t made in sufficiently large quantities to hit the EU’s targets. “If you want to produce SAF on an industrial scale, you’re not talking about investments of  hundreds of millions of euros, you’re talking about billions,” said Alexander Kueper, vice president for renewable aviation at Finnish fuel producer Neste. “Where will this money come from? That’s really where I see a big challenge,” Kueper said. Even a green NGO like Transport & Environment (T&E), not exactly a friend of the airline industry, agrees on the need to increase investment in things like e-fuels — SAFs produced by using renewable electricity, water and CO2 pulled from the atmosphere — to make the sector more sustainable. “Certain types of SAF like e-fuels need a market boost, because the market is nascent. This is where investment — both private and public — can fill the first-mover risk gap,” said Jo Dardenne, aviation director at T&E. Pressure on Brussels is growing from the industry and from governments. All of which want Brussels to get involved to leverage money for research and development for green aviation tech. “For sure every member state, including Poland, will have some money for that kind of investment, but it will be rather small, fragmented money and it will not bring the result that we expect,” said Dziubak. European Commission President Ursula von der Leyen, recently reelected to another term, has announced that a Clean Industrial Deal will be proposed in the first 100 days of the new mandate. WHERE TO START? Not all aviation is equally responsible for climate change. Eurocontrol, the European air-traffic management body, estimates that long-haul routes of more than 3,000 kilometers, which account for just 10 percent of European flights, are responsible for more than half of CO2 emissions from European aviation. In a yet-to-be-published study, Eurocontrol calculated the amount of energy needed to produce enough SAF to power all long-haul flights to hit the 70 percent target by 2050. “It’s a lot. It’s 73 nuclear reactors” of energy output, said Marylin Bastin, acting director of European green sky at Eurocontrol. “The issue is also the price,” said Dziubak, as “at the moment SAF is three to four times more expensive than jet kerosene.”  SAF is not the only effort to decarbonize aviation. Optimizing air traffic management (ATM) could also reduce emissions. For operational and economic reasons, airlines often zig-zag across Europe. Flight paths could instead be optimized to make routes shorter, less polluting and cheaper. “If you consume less fuel, you are just emitting less,” Bastin said. Tweaking ATM is part of a broader push to make existing technologies more efficient. “The current generation of aircraft engines is 40 percent better in efficiency than the ones we developed in the 1980s,” said Luca Bedon, head of research and technology at Avio Aero, a GE Aerospace company. Each new generation of airplanes, he added, is “10-15 percent better than the previous” in terms of fuel efficiency. “The plan is to really invest in technology that will deliver the next-generation propulsion system to be even more efficient than today,” Bedon said. It’s part of a broader rethink of aviation. T&E has a three-part mantra: “Avoid, shift, decarbonize,” Dardenne said. “Reduce the demand that you know you can reduce. Shift it to other modes of transportation where you can, and then decarbonize.” GLOBAL VIEW But all of those efforts cost money, and the European aviation sector worries the regulations it faces could make it uncompetitive. While EU airlines are under pressure to cut emissions, in other — fast-growing — parts of the world, aviation is exploding. Last year, the Indian airline IndiGo set a new record for the largest single purchase in commercial aviation history with an order for 500 Airbus A320s. Dubai International Airport — already the world’s busiest by international passenger traffic and second-busiest by total passengers — recently unveiled a $35 billion expansion plan for the next decade. This article is the product of a POLITICO Working Group presented by GE Aerospace and was produced with full editorial independence by POLITICO reporters and editors. Learn more about editorial content presented by outside advertisers.