Europe’s chemical industry has reached a breaking point. The warning lights are no longer blinking — they are blazing. Unless Europe changes course immediately, we risk watching an entire industrial backbone, with the countless jobs it supports, slowly hollow out before our eyes. Consider the energy situation: this year European gas prices have stood at 2.9 times higher than in the United States. What began as a temporary shock is now a structural disadvantage. High energy costs are becoming Europe’s new normal, with no sign of relief. This is not sustainable for an energy-intensive sector that competes globally every day. Without effective infrastructure and targeted energy-cost relief — including direct support, tax credits and compensation for indirect costs from the EU Emissions Trading System (ETS) — we are effectively asking European companies and their workers to compete with their hands tied behind their backs. > Unless Europe changes course immediately, we risk watching an entire > industrial backbone, with the countless jobs it supports, slowly hollow out > before our eyes. The impact is already visible. This year, EU27 chemical production fell by a further 2.5 percent, and the sector is now operating 9.5 percent below pre-crisis capacity. These are not just numbers, they are factories scaling down, investments postponed and skilled workers leaving sites. This is what industrial decline looks like in real time. We are losing track of the number of closures and job losses across Europe, and this is accelerating at an alarming pace. And the world is not standing still. In the first eight months of 2025, EU27 chemicals exports dropped by €3.5 billion, while imports rose by €3.2 billion. The volume trends mirror this: exports are down, imports are up. Our trade surplus shrank to €25 billion, losing €6.6 billion in just one year. Meanwhile, global distortions are intensifying. Imports, especially from China, continue to increase, and new tariff policies from the United States are likely to divert even more products toward Europe, while making EU exports less competitive. Yet again, in 2025, most EU trade defense cases involved chemical products. In this challenging environment, EU trade policy needs to step up: we need fast, decisive action against unfair practices to protect European production against international trade distortions. And we need more free trade agreements to access growth market and secure input materials. “Open but not naïve” must become more than a slogan. It must shape policy. > Our producers comply with the strictest safety and environmental standards in > the world. Yet resource-constrained authorities cannot ensure that imported > products meet those same standards. Europe is also struggling to enforce its own rules at the borders and online. Our producers comply with the strictest safety and environmental standards in the world. Yet resource-constrained authorities cannot ensure that imported products meet those same standards. This weak enforcement undermines competitiveness and safety, while allowing products that would fail EU scrutiny to enter the single market unchecked. If Europe wants global leadership on climate, biodiversity and international chemicals management, credibility starts at home. Regulatory uncertainty adds to the pressure. The Chemical Industry Action Plan recognizes what industry has long stressed: clarity, coherence and predictability are essential for investment. Clear, harmonized rules are not a luxury — they are prerequisites for maintaining any industrial presence in Europe. This is where REACH must be seen for what it is: the world’s most comprehensive piece of legislation governing chemicals. Yet the real issues lie in implementation. We therefore call on policymakers to focus on smarter, more efficient implementation without reopening the legal text. Industry is facing too many headwinds already. Simplification can be achieved without weakening standards, but this requires a clear political choice. We call on European policymakers to restore the investment and profitability of our industry for Europe. Only then will the transition to climate neutrality, circularity, and safe and sustainable chemicals be possible, while keeping our industrial base in Europe. > Our industry is an enabler of the transition to a climate-neutral and circular > future, but we need support for technologies that will define that future. In this context, the ETS must urgently evolve. With enabling conditions still missing, like a market for low-carbon products, energy and carbon infrastructures, access to cost-competitive low-carbon energy sources, ETS costs risk incentivizing closures rather than investment in decarbonization. This may reduce emissions inside the EU, but it does not decarbonize European consumption because production shifts abroad. This is what is known as carbon leakage, and this is not how EU climate policy intends to reach climate neutrality. The system needs urgent repair to avoid serious consequences for Europe’s industrial fabric and strategic autonomy, with no climate benefit. These shortcomings must be addressed well before 2030, including a way to neutralize ETS costs while industry works toward decarbonization. Our industry is an enabler of the transition to a climate-neutral and circular future, but we need support for technologies that will define that future. Europe must ensure that chemical recycling, carbon capture and utilization, and bio-based feedstocks are not only invented here, but also fully scaled here. Complex permitting, fragmented rules and insufficient funding are slowing us down while other regions race ahead. Decarbonization cannot be built on imported technology — it must be built on a strong EU industrial presence. Critically, we must stimulate markets for sustainable products that come with an unavoidable ‘green premium’. If Europe wants low-carbon and circular materials, then fiscal, financial and regulatory policy recipes must support their uptake — with minimum recycled or bio-based content, new value chain mobilizing schemes and the right dose of ‘European preference’. If we create these markets but fail to ensure that European producers capture a fair share, we will simply create new opportunities for imports rather than European jobs. > If Europe wants a strong, innovative resilient chemical industry in 2030 and > beyond, the decisions must be made today. The window is closing fast. The Critical Chemicals Alliance offers a path forward. Its primary goal will be to tackle key issues facing the chemical sector, such as risks of closures and trade challenges, and to support modernization and investments in critical productions. It will ultimately enable the chemical industry to remain resilient in the face of geopolitical threats, reinforcing Europe’s strategic autonomy. But let us be honest: time is no longer on our side. Europe’s chemical industry is the foundation of countless supply chains — from clean energy to semiconductors, from health to mobility. If we allow this foundation to erode, every other strategic ambition becomes more fragile. If you weren’t already alarmed — you should be. This is a wake-up call. Not for tomorrow, for now. Energy support, enforceable rules, smart regulation, strategic trade policies and demand-driven sustainability are not optional. They are the conditions for survival. If Europe wants a strong, innovative resilient chemical industry in 2030 and beyond, the decisions must be made today. The window is closing fast. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is CEFIC- The European Chemical Industry Council  * The ultimate controlling entity is CEFIC- The European Chemical Industry Council  More information here.

The energy landscape is always evolving, and another challenge is rapidly coming into view: data. The rise of artificial intelligence (AI), cloud computing and machine learning is driving unprecedented demand for electricity. This trend is only set to accelerate as the UK seeks to establish itself as a global leader in AI. The UK government has rightly committed to being an ‘AI maker, not taker’. But that ambition comes with consequences. According to the National Grid’s Future Energy Scenarios 2024, data centers could become one of the UK’s fastest-growing sources of demand by the 2030s. AI data centers are used to train the most advanced AI, including frontier models such as ChatGPT, and require vast amounts of energy due to their continuous utilization. We cannot meet this surge in demand simply by layering data center load on top of an already stretched energy system. COORDINATION WILL BE CRITICAL Last month, a report from Aurora Energy Research highlighted that an uncoordinated approach to power sourcing could see power sector emissions increasing by 14 percent, which would directly undermine the UK’s decarbonization goals and drive up wholesale electricity prices. > Without change, we risk slowing down both the deployment of AI infrastructure > and our energy transition. Instead, we need a coordinated way to unlock the potential of the AI sector. The current approach, where most data centers cluster around areas like London and the Thames Valley, driven by proximity to demand, is unsustainable. These regions are often far from large-scale sources of generation and already face grid constraints such as network connection bottlenecks. Different thinking is viable for data centers geared toward AI workloads, which are less sensitive to latency — the delay of data transfer — and therefore do not need to be sited close to major cities. Without change, we risk slowing down both the deployment of AI infrastructure and our energy transition. To help mitigate this risk, we should align our energy and digital strategies more closely. That starts with a national framework to strategically site new data centers in areas with available grid capacity, preferably close to power generation sources. Drax Power Station could be one of those locations. via Drax CO-LOCATING DATA CENTRES AND POWER GENERATION In 2024 Drax Power Station was the UK’s single largest source of renewable power by output. Our site in Selby, North Yorkshire, provides approximately 2.6 GW of dispatchable power capacity, enough power for five million homes. Unlike intermittent renewables, Drax generates power whether or not the wind is blowing or the sun is shining. But the site’s potential reaches beyond what it delivers today. We already benefit from planning consents, which — alongside the right policy support and regulatory framework — could allow us to transform Drax into the world’s largest engineered carbon removals facility by installing bioenergy with carbon capture and storage (BECCS) on two of our generating units. BECCS is unique. It is the only technology that can simultaneously generate renewable power and remove carbon dioxide from the atmosphere. And, significantly, co-locating a data center with the power station could help enable the delivery of this world leading technology. > Building data centers next to power stations brings multiple advantages. It > enhances system resilience and reduces the risk of plant curtailment. It > minimizes energy lost in transmission, something that becomes more pronounced > the further electricity has to travel. Large power stations like Drax Power Station were designed to support industrial-scale generation. They have substantial grid connections, large surrounding estates and access to cooling water. These attributes make Drax Power Station uniquely suited for the possibility of hosting a hyperscale data center. Building data centers next to power stations brings multiple advantages. It enhances system resilience and reduces the risk of plant curtailment. It minimizes energy lost in transmission, something that becomes more pronounced the further electricity has to travel. It also supports the connection of new energy capacity by relieving congestion on the grid queue. Unlocking this potential, however, will require a rethink of current regulations. SEIZING THE OPPORTUNITY At present, power stations are restricted from supplying electricity simultaneously to both the grid and a private off-taker such as a data center. These rules were written for a different era, one that did not anticipate intense energy consumers such as AI clusters emerging as a major player in the energy ecosystem. By unpicking these constraints, we can free up untapped capacity, provide flexible solutions for energy security and support the digital infrastructure needed to drive economic growth. The government’s recent announcement of AI Growth Zones is a welcome step. If designed properly, this initiative could be the catalyst for a strategic rollout of AI infrastructure across the UK. Rather than clustering growth in already congested urban areas, Growth Zones can enable us to locate data centers where power is plentiful, where local communities stand to benefit from investment and where the grid can accommodate growth. This is about more than just plugging in servers. It’s about creating a coherent and forward-looking strategy that links where we generate power to where we use it — and recognizes that AI and energy are now inextricably linked. Subject to clear government policy support and milestones, combining BECCS with a large-scale data center at Drax Power Station could align with this industrial strategy. Together, these developments could create the option for a globally unique proposition: a carbon negative data center — delivering world-leading innovation for the UK and directly countering the perspective that AI growth will mean more carbon emissions.   These projects could protect and create thousands of high-quality jobs in a region that has historically powered the UK but that now faces the risk of deindustrialization as a result of declining heavy industry. A joined-up plan for energy and digital growth can offer lasting economic resilience to communities that need it the most. > It’s time to think smarter about how we build, power and place the critical > infrastructure of the 21st century. At Drax, we are ready to be part of that future. We are already a leading renewable energy generator in the UK and we have the infrastructure and ambition to implement a cutting-edge data center solution at Drax Power Station, helping the country secure its place as a digital leader while keeping the lights on. It’s time to think smarter about how we build, power and place the critical infrastructure of the 21st century. We must ensure new data capacity is integrated in ways that enhance grid stability without compromising the transition to clean energy or negatively affecting the needs and rights of local communities. With the right strategy, the UK doesn’t have to choose between energy security and digital growth. We can achieve both.

LONDON — Harbour Energy plans to slash hundreds of jobs in the U.K. and will review its investment in a major carbon capture and storage project, the firm announced Wednesday. The giant North Sea oil and gas producer blamed the row-backs on the government’s tax regime, as it revealed it has launched a review of U.K. operations. Two hundred and fifty jobs are expected to go across its Aberdeen offices, Harbour said in a statement. “The review is unfortunately necessary to align staffing levels with lower levels of investment, due mainly to the government’s ongoing punitive fiscal position and a challenging regulatory environment,” said Scott Barr, managing director of Harbour’s U.K. business. The company also said it was “reviewing the resourcing required” to support the Viking carbon capture and storage project. Progress on Viking had been “hindered by repeated delays to the government’s track 2 process,” Harbour said. Harbour’s latest financial results, published in March, showed a swing from earnings of $45 million (£33 million) in 2023 to losses of $93 million (£70 million) in 2024. Shadow Energy Secretary Andrew Bowie described the developments as “devastating” for north-east Scotland. “This must be seen as a pivotal moment for the future of British oil and gas. The utter insanity of Labour’s policies on the North Sea. Jobs lost, imports doubled, our country less secure. Urgent change of course required,” he wrote on social media platform X. A Downing Street spokesperson said: “It’s a commercial decision for that individual company, and I think they’ve made clear that there have been significant pressures from global inflation and supply chain issues in relation to [the] industry. We are committed to working with them to get that project back on track.”

LONDON — The U.K. government is in talks with its French counterparts about purchasing back three nuclear sites from state-owned energy giant EDF, as Whitehall looks to take control of the upcoming expansion of nuclear power. U.K. ministers are discussing buying up Bradwell B, Heysham and Hartlepool, a French government official confirmed to POLITICO. “There have been discussions. For the moment, no decision has been taken and discussions are continuing,” the official said. Two senior industry figures based in the U.K., familiar with government planning and granted anonymity to discuss sensitive plans, also said negotiations over the purchase of the three sites were ongoing. Energy Secretary Ed Miliband and French Minister for Industry and Energy Marc Ferracci discussed the negotiations on the margins of the International Energy Agency Summit in London earlier this week, the official added. Neither the Department for Energy Security and Net Zero nor the U.K. Treasury responded to a request for comment ahead of publication. The next key moment could come in July as part of a proposed French-U.K. summit. Any move to bring the sites into state ownership would come as the U.K. mulls the most ambitious revival of nuclear power in a generation. At a conference last December, Miliband insisted nuclear was essential for an an “all of the above approach” to energy security and low-carbon power, and told investors “my door is open” for future nuclear projects, as the U.K. bids to hit its legally-binding target of net zero carbon emissions by 2050. “We need nuclear, we need wind, we need solar, we need batteries … we need hydrogen, we need carbon capture. And nuclear has a particular role to play in finding clean, stable and reliable power,” he said. THE ‘OBVIOUS’ SITES All three sites are owned by French firm EDF, a company in which the French state is the sole shareholder, handed over in a deal struck in 2023. An EDF spokesperson declined to comment on any discussions but said: “EDF would welcome developments that enable ongoing employment opportunities at our sites, once existing stations close. “Our sites have numerous benefits, including a skilled workforce, grid connections and supportive communities that are used to nuclear power and the economic benefits the existing stations bring.”  The U.K. has not built a new nuclear power plant since Sizewell B was opened in 1995. The much-delayed Hinkley Point C is at risk of not being completed until 2031, and the government is still weighing up a final investment decision for sister plant Sizewell C. Meanwhile Great British Nuclear (GBN), the arms-length body set up under the last Conservative government, is overseeing the final stages of the late-running competition to build mini-nukes in the U.K., known as small modular reactors (SMRs). GBN owns two sites — Oldbury and Wylfa — which were brought into state ownership by former Chancellor Jeremy Hunt last year.  A decision on awarding SMR contracts is now expected this summer. If the government goes ahead with its plans to boost nuclear capacity and award SMR contracts to multiple bidding companies, it will need more than two sites to host the work. “If the government are going to expand gigawatts [capacity] as well as SMRs, they’ll need more sites, and those [three sites] are the obvious ones left over from EN-6 [the U.K.’s shortlist for projects],” a third industry figure said. Heysham and Hartlepool both include operating nuclear power plants, which are set for decommissioning in stages across 2027 and 2030 respectively. By contrast, Bradwell B, once earmarked for new nuclear, is a now vacant plot of land. The site is still owned by EDF but is currently being leased by China General Nuclear (CGN) Power, which stopped advancing their mooted project in 2022. This means any takeover of the site could include a payout to the Chinese state-backed company, in line with £100 million-plus buyout of CGN’s stake in Sizewell C in 2022. The developments could also pave the way for Wylfa to be reserved for a third gigawatt scale power plant, alongside Hinkley Point C and Sizewell C.

Europe cannot lose the global competition or become a continent of naive people and ideas. If we go bankrupt, no one will care about the natural environment globally …  — Prime Minister Donald Tusk’s speech in the European Parliament  Look around while reading this, and you will probably notice a lot of goods manufactured by European companies. Not all of them bear the ‘made in EU’ mark, however — industries compete on a global scale. For Politico readers, it’s hard to miss the discussion around how to keep Europe’s economy competitive given the pledge to become climate neutral by 2050.   As an association of industries in one of the largest member states, where industry accounts for one-fifth of GDP, we see the need to speak up on the risk of deindustrialization — and ways to prevent it.  Climate policy and competitiveness   EU industrial policy has two characteristics. First, it is generally anti-protectionist, as it originally aimed at establishing a single market covering the entire continent. Hence its focus on leveling the playing field between states. Second, the EU’s ambition in climate policy reaches the furthest among large international actors. Industries in the region are therefore under a uniquely strong pressure to reduce emissions and become energy efficient. Competitors in the globalized, increasingly interdependent world economy usually have it easier — both the costs imposed on emissions and energy prices for industries are not globally harmonized. The former generally depend on policy, while the latter are largely determined by a mix of fuel prices and policy. > Industries in the region are therefore under a uniquely strong pressure to > reduce emissions and become energy efficient. As shown in the Draghi report, both carbon and energy prices paid by EU industry are the world’s highest. Those differences are likely to deepen if, for example, the new US federal administration delivers on its electoral promises. The sectors most affected by the above are energy-intensive industries, especially those identified as hard-to-abate — where production processes are not easily decarbonized.  EU law includes measures to counteract relocation, chiefly carbon leakage, which is when industries keep emitting the same amounts of greenhouse gases but simply move it elsewhere. Those compensation measures — e.g. free emission allowances (EUAs) under Emissions Trading Scheme (ETS)  the markup in energy costs caused by carbon prices — are, however, designed to ultimately decrease in scope and depth over time. To stay eligible for support, industries must increase their efficiency and reduce emissions in an almost linear way, while the actual support often depends on each member state’s capabilities. On top of that, new mechanisms are added, increasing regulatory pressure — especially the Carbon Border Adjustment Mechanism (CBAM). We don’t know if that so-called carbon border tax will strengthen the EU industry globally, but we know that, as the law stands, its introduction is coupled with the withdrawal of free EUAs. This is bound to have a measurable effect on the costs of industrial production.  What do the treaties say?  Under the Treaty on the Functioning of the EU, intra-union competition and climate protection are not independent goals to be achieved at all costs. In fact, Article 173 requires the industrial policy to “ensure that the conditions necessary for the competitiveness of the Union’s industry exist”, and other policies should contribute to that. The union is, as per Title IX, also committed to “a high level of employment, which should be taken into consideration in … Union policies”. Carbon leakage also means jobs leakage, and certain social movements have recently highlighted a crisis of trust toward the EU and member states in this respect.  rotecting the union’s security  In light of serious disturbances in the global economy first caused by the Covid-19 pandemic and then the Russian aggression against Ukraine, EU citizens are also concerned about security. Although we often pay less for EU brands’ goods produced outside of EU, in the long term, cost is not everything. Many industrial products are so important for how our societies function that we should think twice about letting them relocate — the pandemic showed the importance of where pharmaceutical supply chains are located and the Russian invasion of Ukraine reminded us of the grim reality that the EU needs weapons to protect its existence. The same applies to fertilizers and chemical compounds many of us have not even heard of until supply chains were disrupted and prices skyrocketed.  > Many industrial products are so important for how our societies function that > we should think twice about letting them relocate. These contexts go beyond strict economic considerations. But policymaking is not accountancy. In the medium and long term, the EU will be better off keeping factories within its borders.   Our letter to the new commission  We welcome the lively discussion on industrial competitiveness and its reconciliation with the EU’s climate ambitions. We also note and welcome the deregulation drive, as simplifying compliance could also reduce costs.  In that context, the European Commission is working on streamlining multiple EU funds into the European Competitiveness Fund (ECF). We consider that the ECF may be a significant tool to counter Europe’s deindustrialization, but other aspects must be addressed too.  In our view, the new commission’s industrial policy should:  1. focus on the global picture rather than the internal market — inter alia by giving EU funding precedence over state aid and progressively harmonizing compensation measures;  2. ensure adequate funding not just for research and development in abatement technologies, but also investment and operating costs for innovative solutions — low-emission production processes are likely to always be more costly than those applied in continents without ambitions to become climate neutral;   3. be technology neutral instead of favoring solutions that are not feasible for all sectors or areas in the EU (such as carbon capture and storage); and  4. revisit the regulatory toolkit — abolish measures with the highest administrative burden but questionable effectiveness.  Last, but not least, we ask the commission to act quickly. Industries make investment decisions based on the applicable regulatory framework — but there remain a number of challenges like CBAM, the linear reduction of free EUAs, decreasing scope of eligibility for compensation and ever-tightening benchmarks. A strong signal from the Berlaymont on the drive toward global competitiveness can brighten their perspectives.  20241223_European-Competitiveness-FundDownload

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.”

BAKU, Azerbaijan — Republican lawmakers on Saturday foreshadowed America’s global climate message for the world under President-elect Donald Trump: Buy more U.S. natural gas. The assertions by five GOP Congress members at the COP29 climate talks contrasted sharply with global pledges to phase down fossil fuels, an overriding theme of the international summit. “American natural gas has helped us reduce emissions more than any other nation, and we have the capacity to continue to helping our allies reduce their emissions by exporting clean, reliable sources like LNG and nuclear,” Texas Rep. August Pfluger told reporters Saturday. The visit by Republican members of the House Energy and Commerce Committee came as Biden administration officials and allies sought to assure other nations that U.S. climate action will continue at the state level and in corporate boardrooms. But Trump has pledged to dismember the climate law signed by President Joe Biden in 2022, roll back environmental regulations and encourage additional production of U.S. oil and gas, which is already at record-high levels. The Republicans called for a “diverse” energy portfolio that includes nuclear power, liquefied natural gas, fusion energy and carbon capture technologies. They argued that using U.S. gas results in less climate pollution than if it came from Russia or other countries, and they expressed concern that China would benefit from an expansion of clean energy such as solar because it dominates manufacturing of panels and other parts. “With technology, we can solve a lot of these problems without just banning fossil fuels,” said Republican Rep. Morgan Griffith, who represents Virginia coal country. Pfluger, who is leading the delegation, said Americans elected Trump on his pledge to lower the costs of goods like energy, and the incoming Congress would scrutinize the Inflation Reduction Act to identify provisions that go against Trump’s priorities. “If there are pieces of the IRA that help support lowering American energy costs, helping Americans, helping our partners and allies have access to affordable, reliable energy, then I bet that those will stay in place,” Pfluger said. Biden administration officials have also worked to highlight the durability of the Inflation Reduction Act and its hundreds of billions of dollars in tax credits and clean energy incentives. But the outgoing government has little time to lock in what funding it can. Energy Secretary Jennifer Granholm told reporters Friday that it would be up to the Trump administration to determine whether to restart the permitting process for new liquefied natural gas export terminals that had been halted under Biden. Trump has pressed for it to resume. “The U.S. election will have a negative climate impact. I think that’s not only easy to say, it’s obvious,” Sen. Sheldon Whitehouse (D-R.I.) told reporters Saturday. He’s at COP29 with Sen. Edward Markey (D-Mass.) to highlight his support for methane reductions and carbon border taxes. Negotiators at the climate conference are focused on establishing a new and much larger global goal for climate finance, finalizing guidelines for a worldwide carbon market that countries can use to meet their climate targets, and reaffirming a commitment made at last year’s summit to phase down fossil fuels. The International Energy Agency has said no new oil and gas projects are compatible with the goals of the Paris Agreement, which aims to limit global temperature rise to 1.5 degrees Celsius. Trump has promised to withdraw the U.S. from the agreement when he takes office, just as he did during his first term. Ahead of their trip to Baku, several Republican lawmakers said U.S. negotiators should avoid agreeing to any outcome at COP29 that might go against Trump’s priorities. Pfluger said that would be “disrespectful” to the incoming government. “We need to do what’s best for us,” said Rep. Troy Balderson (R-Ohio).

Exxon Mobil Chair and CEO Darren Woods urged the incoming Trump administration to avoid making turbulent climate policy swings — and he pushed the president-elect to reject carbon border taxes favored by some GOP lawmakers. In an interview with POLITICO, Woods signaled that one of the most powerful players in the energy industry might serve as a moderating influence in Washington, even as Republicans seek to dismantle Biden-era climate policies. The future of the Inflation Reduction Act and other clean-energy programs is one of the most important questions hanging over the incoming administration. “I don’t think the challenge or the need to address global emissions is going to go away,” Woods said. “Anything that happens in the short term would just make the longer term that much more challenging.” Woods made the comments via telephone from the COP29 climate negotiations in Baku, Azerbaijan, just days after President-elect Donald Trump won the White House with a vow to turbocharge United States’ fossil fuel production and roll back Biden policies aimed at reducing greenhouse gas pollution and speeding the growth of clean energy. Trump is widely expected to withdraw the U.S. from the 2015 Paris climate agreement, and his election has scrambled climate diplomacy at the annual talks. Despite the forecasts that the world is on pace to set a new annual high temperature for the second year in a row, Trump has repeatedly called climate change a “hoax,” demonized policies promoting electric vehicles and castigated wind and solar energy. But some members of his party, including a sizable number of Republicans in Congress, have spoken out against wholesale repeal of the IRA, citing the economic benefits it has delivered to their districts. Woods, who took the top job at Exxon after his predecessor Rex Tillerson became Trump’s first secretary of State, said he opposed carbon border tariffs, which would impose fees on imports that are produced through processes with higher carbon emissions than in the U.S. That type of tariff has been touted by Robert Lighthizer, who was Trump’s first-term trade representative, as well as some Republicans in Congress who said it would benefit U.S. companies whose products are cleaner than their foreign competitors. It is widely viewed as a response to the European Union’s carbon border adjustment mechanism, which would tax imported raw materials from countries that do not have a price on carbon emissions. “I think it’s a bad idea. It’s a really bad idea,” Woods said. “I think carbon border adjustment is going to introduce a whole new level of complexity and bureaucratic red tape. I don’t think it’s going to be very effective.” Instead, he said, a regulatory system based on the carbon intensity of products would be a better solution. That would still require the government to enforce some basic accounting standards and a framework assessing the carbon dioxide footprint across a range of products. “Regulation will play a really important part of that,” Woods said. The EU’s carbon border adjustment mechanism has emerged as a COP29 flash point. China, Brazil, India and South Africa lodged a formal complaint against governments using trade measures to curb emissions, arguing it raised the costs of deploying green technology in low- and middle-income countries. Several countries initially raised similar objections to Biden’s IRA, contending it subsidized U.S.-based companies while shutting out foreign competitors. Trump has vowed to scrap many of those incentives. Woods said Exxon would adapt to whatever happens with IRA provisions that benefit the oil and gas industry, such as tax incentives for carbon capture, utilization and storage technology. “I’ve been advising that we have some level of consistency,” Woods said. “One of the challenges with this polarized political environment we find ourselves in is the impact of policy switching back and forth as political cycles occur and elections happen and administrations change. That’s not good for the economy.” Woods said Biden’s energy policies had amounted to “limiting the supply of traditional sources of energy and trying to force through expensive alternatives,” though he cautioned against complete about-face on climate change. He warned American industries that fail to address environmental performance during Trump’s second term risk worsening the problem. “We all have a responsibility to figure out, given our capabilities and ability to contribute, how can we best do that,” Woods said. “How the Trump administration can contribute in this space is to help establish the right, thoughtful, rational, logical framework for how the world starts to try to reduce the emissions.” Woods’ preferred approach on carbon intensity echoes several legislative proposals floating around Congress. Those are similar to other models that effectively reduced sulfur content in marine fuel oil and automotive diesel. “Once we can specify carbon intensity, you can then unlock the capability of industry to meet those carbon intensity specifications, and every government can set that level based on their set of circumstances in their country,” Woods said. Exxon has also launched a carbon capture business that aims to collect emissions of the greenhouse emitted from petroleum operations and store them in underground reservoirs in Louisiana and Texas as well as the seabed below the Gulf of Mexico. That technology has been embraced by the oil sector and received lucrative tax incentives in the Inflation Reduction Act, though it has been criticized by environmental groups. Despite Biden’s focus on green policies, the U.S. still became the world’s top oil and gas producer during his term and hit production levels unequaled by any other country in history. The U.S., the world’s largest economy and second-largest emitter of planet-heating gases, remains off track of Biden’s goal to cut emissions in half this decade, relative to 2005 levels.