EU promises flexibility for car CO2 standards: Update

Market: Battery materials, Biofuels, E-fuels, Emissions, LPG
03/03/25

Adds reaction quote from E-Mobility in new paragraph 5.

European Commission president Ursula von der Leyen today promised "more flexibility" on CO2 targets, balancing "predictability and fairness" for firms that have already introduced low or zero emission vehicles.

Von der Leyen said the commission will stick to agreed CO2 emission reduction targets for fleets. But the commission will show "more pragmatism in these difficult times" and technology neutrality. She specifically promised a "focused" amendment to the bloc's CO2 standards regulation this month, to introduce "pragmatism" with respect to possible penalties for not complying with 2025 targets.

The EU's CO2 standards for manufacturers lay down an EU-wide fleet greenhouse gas target for light passenger vehicles and vans of 93.6 g/km until 2029. That represents a 15pc reduction compared with a 2021 baseline for cars. This falls to 49.5 g/km for 2030-34, a 55pc reduction, and 0g/km from 2035.

"Instead of annual compliance, companies will get three years," von der Leyen said, noting the principle of "banking and borrowing". "The targets stay the same; they have to fulfil the targets. It means more breathing space for industry and more clarity, and without changing the agreed targets," she said.

The proposal for flexibility on CO2 standards will "significantly delay" Europe's electric vehicle roll-out over the next two years, industry association E-Mobility Europe secretary-general Chris Heron said. He estimated that half a million fewer electric cars could enter the EU market in 2025. "That uncertainty is bad news for investors in EU charging infrastructure, battery production, and e-mobility overall," Heron said, noting legal and competitive issues from changing the rules midway.

The amendment would need to be agreed quickly by the European parliament and a qualified majority of EU member states. The EU biofuels and hydrogen industry last week expressed disappointment at a draft outline of the commission's forthcoming automotive industrial action plan, for not mentioning low and carbon neutral biofuels and hydrogen.

By Dafydd ab Iago

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04/04/25

EU sees no credibility issue in 2040 GHG target delay

Brussels, 4 April (Argus) — The lack of a proposal for a 2040 greenhouse gas (GHG) reduction target is not a credibility issue for the European Commission, officials said. The commission will have an "ambitious" 2040 GHG proposal in time to derive a 2035 climate plan for the EU "well in time" for the UN Cop 30 climate talks in Belem, Brazil, over 10-21 November. The commission was expected to make a legislative proposal for a 2040 EU climate target no later than six months after the conclusion of the first global stocktake under the Paris climate agreement, which concluded at Cop 28 in December 2023, as per the bloc's European Climate Law. The process is "quite late nationally and also globally", the commission acknowledged. But officials insist that the update to the climate law, setting a 2040 GHG target, will come "well in time" for the Cop process. The EU will then derive its nationally determined contribution (NDC) to the Paris deal for 2035 from 2040. The official deadline for parties to submit their updated NDC was 10 February, but only 12 countries made timely submissions. "The credibility issue is much less to do with the agenda now," climate spokesperson Anna-Kaisa Itkonen said. EU climate commissioner Wopke Hoekstra has made "very, very clear" that the commission is preparing for an "ambitious climate law". "Ninety per cent is currently in the political guidelines," Itkonen said. "It is the starting point for these discussions," she added, underlining the extreme importance of presenting a 2040 proposal that has a "substantial majority". Another EU source noted that the commission is discussing various options and scenarios with EU member states and the European Parliament. "We want to keep the ambition as high as possible. So our starting point of discussion is 90pc," the source said. Discussion of 2040 flexibility — such as following a weaker trajectory toward climate neutrality, or using international credits — would have "severely negative" implications for the EU's standing in international climate action, NGO Bellona Europa's senior manager for carbon accounting, Mark Preston Aragones, said. "The commission should not come with an already watered-down proposal even before negotiations formally begin with the European Parliament and EU member states," he said. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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New tariffs could upend US tallow imports

03/04/25

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03/04/25

New tariffs could upend US tallow imports

New York, 3 April (Argus) — New US tariffs on nearly all foreign products could deter further imports of beef tallow, a fast-rising biofuel feedstock and food ingredient that had until now largely evaded President Donald Trump's efforts to reshape global trade. Tallow was the most used feedstock for US biomass-based diesel production in January for the first month ever, with consumption by pound rising month to month despite sharp declines in actual biorefining and in use of competing feedstocks. The beef byproduct benefits from US policies, including a new federal tax credit known as "45Z", that offer greater subsidies to fuel derived from waste than fuel derived from first-generation crops. Much of that tallow is sourced domestically, but the US also imported more than 880,000t of tallow last year, up 29pc from just two years earlier. The majority of those imports last year came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff, and from Australia, which was exempt from any tallow-specific tariffs under a free trade agreement with US. But starting on 5 April, both countries will be subject to at least the new 10pc charge on foreign imports. There are some carveouts from tariffs for certain energy products, but animal fats are not included. Some other major suppliers — like Argentina, Uruguay, and New Zealand — will soon have new tariffs in place too, although tallow from Canada is for now unaffected because it is covered by the US-Mexico-Canada free trade agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024, marking an all-time high, but tallow shipments during the fourth quarter of 2024 fell under the 2023 levels as uncertainty about future tax policy slowed buying interest. Feedstock demand in general in the US has remained muted to start this year because of poor biofuel production margins, and that has extended to global tallow flows. Tallow suppliers in Brazil for instance were already experiencing decreased interest from US producers before tariffs. Brazil tallow prices for export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid support from the 45Z guidance and aid from Brazil's growing biodiesel industry, which is paying a hefty premium for tallow compared to exports. While the large majority of Brazilian tallow exports end up in the US, Australian suppliers have more flexibility and could send more volume to Singapore instead if tariffs deter US buyers. Export prices out of Australia peaked this year at $1,185/t on 4 March but have since trended lower to last close at $1,050/t on 1 April. In general, market participants say international tallow suppliers would have to drop offers to keep trade flows intact. Other policy shifts affect flows Even as US farm groups clamored for more muscular foreign feedstock limits over much of the last year, tallow had until now largely dodged any significant restrictions. Recent US guidance around 45Z treats all tallow, whether produced in the US or shipped long distances to reach the US, the same. Other foreign feedstocks were treated more harshly, with the same guidance providing no pathway at all for road fuels from foreign used cooking oil and also pinning the carbon intensity of canola oil — largely from Canada — as generally too high to claim any subsidy. But tariffs on major suppliers of tallow to the US, and the threat of additional charges if countries retaliate, could give refiners pause. Demand could rise for domestic animal fats or alternatively for domestic vegetable oils that can also be refined into fuel, especially if retaliatory tariffs cut off global markets for US farm products like soybean oil. There is also risk if Republicans in the Trump administration or Congress reshape rules around 45Z to penalize foreign feedstocks. At the same time, a minimum 10pc charge for tallow outside North America is a more manageable price to pay compared to other feedstocks — including a collection of charges amounting to a possible 69.5pc tax on Chinese used cooking oil. And if the US sets biofuel blend mandates as high as some oil and farm groups are pushing , strong demand could leave producers with little choice but to continue importing at least some feedstock from abroad to continue making fuel. Not all US renewable diesel producers will be equally impacted by tariffs either. Diamond Green Diesel operates Gulf Coast biorefineries in foreign-trade zones, which allow companies to avoid tariffs on foreign inputs for products that are ultimately exported. Biofuel producers in these zones could theoretically refine foreign tallow, claim a 45Z subsidy, and avoid feedstock tariffs as long as they ship the fuel abroad. Jurisdictions like the EU and UK, where sustainable aviation fuel mandates took effect this year, are attractive destinations. And there is still strong demand from the US food sector, with edible tallow prices in Chicago up 18pc so far this year. Trump allies, including his top health official, have pushed tallow as an alternative to seed oils. By Cole Martin and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Funding cuts could delay US river lock renovations

03/04/25

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03/04/25

Funding cuts could delay US river lock renovations

Houston, 3 April (Argus) — The US Army Corps of Engineers (Corps) will have to choose between various lock reconstruction and waterway projects for its annual construction plan after its funding was cut earlier this year. Last year Congress allowed the Corps to use $800mn from unspent infrastructure funds for other waterways projects. But when Congress passed a continuing resolutions for this year's budget they effectively removed that $800mn from what was a $2.6bn annual budget for lock reconstruction and waterways projects. This means a construction plan that must be sent to Congress by 14 May can only include $1.8bn in spending. No specific projects were allocated funding by Congress, allowing the Corps the final say on what projects it pursues under the new budget. River industry trade group Waterways Council said its top priority is for the Corps to provide a combined $205mn for work at the Montgomery lock in Pennsylvania on the Ohio River and Chickamauga lock in Tennesee on the Tennessee River since they are the nearest to completion and could become more expensive if further delayed. There are seven active navigation construction projects expected to take precedent, including the following: the Chickamauga and Kentucky Locks on the Tennessee River; Locks 2-4 on the Monongahela River; the Three Rivers project on the Arkansas River; the LaGrange Lock and Lock 25 on the Illinois River; and the Montgomery Lock on the Ohio River. There are three other locks in Texas, Pennsylvania and Illinois that are in the active design phase (see map) . By Meghan Yoyotte Corps active construction projects 2025 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump to 'stand firm' on tariffs as markets crash

03/04/25

News

03/04/25

Trump to 'stand firm' on tariffs as markets crash

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US battery costs face sharp rise on tariffs

03/04/25

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03/04/25

US battery costs face sharp rise on tariffs

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