Japan to speed up investment in energy transition

Market: Coal, Electricity, Emissions, Fertilizers, Hydrogen, Metals, Natural gas, Petrochemicals
01/04/21

The Japanese government is working on domestic guidelines for local financial institutions providing climate transition finance, as part of efforts to create an efficient environment on energy transition investment in the run-up to 2050.

The government's financial services agency, the trade industry (Meti) and environmental ministries, have jointly drafted guidelines on transition finance for Japanese financial institutions as part of the government's effort to accelerate energy transition and achieve its 2050 decarbonisation goal. The draft guidelines are targeted for official release in early May following a month-long public consultation.

Tokyo plans to set up working groups in the April 2021-March 2022 fiscal year and put together a detailed transitional roadmap for each industry that emits heavy greenhouse gases (GHG), including steel, chemical, power, gas and shipping, to decarbonise their operations towards 2050. The steel industry, Japan's biggest GHG emitting industry, has pledged to achieve a decarbonisation by 2050 in line with the government's target.

Japan's domestic guideline has been drafted in accordance with the climate transition finance handbook published in December by the International Capital Market Association (ICMA) to provide clear guidance to capital market participants when raising funds in debt markets for climate transition-related purposes. Heavy GHG-emitting manufacturers are expected to face a difficulty in utilising green financing instruments, including green bonds, which are designed to finance carbon-neutral projects. But these manufacturers can facilitate transitional loans and bonds, for example, when moving to greener operations.

Tokyo is also considering supporting energy transition in the Asian market, particularly developing and Asean nations, upon the completion of its clear guideline on transition financing. Meti plans to back exports of Japan's low-carbon technology in the power sector, including development of renewable power, and ammonia- and hydrogen-fired power capacity, as well as an LNG shift and carbon capture utilisation and storage.

Japanese shipping firm K Line last month signed the country's first transition finance agreement to partially fund the construction of the LNG-fuelled car carrier Century Highway Green. The firm's ¥5.9bn ($54mn), 14-year loan was arranged by Japanese banks Mizuho Bank and Sumitomo Mitsui Trust Bank.

Japanese debt watcher Japan Credit Rating Agency has evaluated the eligibility for transition finance in line with ICMA's guidelines, including whether the project could achieve sufficient CO2 reductions and meet the International Maritime Organization's (IMO) emissions reduction requirement for the global shipping industry. The IMO has set a 2050 target to reduce the global shipping industry's GHG emissions by 50pc and carbon intensity by 70pc from 2008 levels.

By Rieko Suda

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04/04/25

Egyptian rebar clears EU customs as merchant bar

London, 4 April (Argus) — Egyptian rebar has cleared at the Lithuanian port of Klaipeda under a product code that sits under a different EU quota category, a mill test certificate sent to rebar buyers and obtained by Argus shows. The documentation shows a parcel of steel products with the properties and specifications of rebar registered under HS code 722830, which is for hot-rolled bar, not rebar. The material is supplied by an Egyptian steel mill, and the mill test certificate obtained by Argus contains the assertion "HS code for rebar is: 72 28 30 69 00", followed by the signature of a senior quality engineer. The mill's website indicates it produces rebar, rebar in spools and rebar in coil, which fall respectively under the rebar and wire rod EU import quotas. Hot-rolled bar under the HS code 72283069 falls under category 12 for "non-alloy and other alloy merchant bars and light sections", for which there is currently no import restriction on Egyptian material. A trading company is thought to have discharged at least 17,000t of rebar and rebar in coils at Klaipeda on 28 March, after loading at the Egyptian port of Alexandria on 24 February. But it is not clear how much material in total has passed through customs or under which HS codes. As of 1 April, the EU's Egyptian rebar quota is capped at about 27,500t, after previously having had no limitation within the "other countries" allocation of about 138,000t. Some market participants estimated that there were about 80,000t of Egyptian rebar waiting to clear at EU ports on 1 April, but only about 30,000t cleared under the rebar quota on the first day, according to market participants, meaning duties paid by companies clearing material on that day will not be as high as feared. Trade data also show that Bulgaria imported 17,000t of hot-rolled bar from Egypt under HS 72283069 in January 2025, nearly three times as much as the whole EU imported in the full year of 2024 or 2023, a sign that companies are increasingly keen to seek ways around EU safeguards as they tighten. By Brendan Kjellberg-Motton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Tariffs and their impact larger than expected: Powell

04/04/25

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04/04/25

Tariffs and their impact larger than expected: Powell

New York, 4 April (Argus) — Federal Reserve chairman Jerome Powell said today tariff increases unveiled by US president Donald Trump will be "significantly larger" than expected, as will the expected economic fallout. "The same is likely to be true of the economic effects, which will include higher inflation and slower growth," Powell said today at the Society for Advancing Business Editing and Writing's annual conference in Arlington, Virginia. The central bank will continue to carefully monitor incoming data to assess the outlook and the balance of risks, he said. "We're well positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell added. "It is too soon to say what will be the appropriate path for monetary policy." As of 1pm ET today, Fed funds futures markets are pricing in 29pc odds of a quarter point cut by the Federal Reserve at its next meeting in May and 99pc odds of at least a quarter point rate cut in June. Earlier in the day the June odds were at 100pc. The Fed chairman spoke after trillions of dollars in value were wiped off stock markets around the world and crude prices plummeted following Trump's rollout of across-the-board tariffs earlier in the week. Just before his appearance, Trump pressed Powell in a post on his social media platform to "STOP PLAYING POLITICS!" and cut interest rates without delay. A closely-watched government report showed the US added a greater-than-expected 228,000 jobs in March , showing hiring was picking up last month. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Silicon, ferro-silicon hit by US tariffs

04/04/25

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04/04/25

Silicon, ferro-silicon hit by US tariffs

London, 4 April (Argus) — Silicon and ferro-silicon prices in the US are likely to surge because of steep tariffs on imports announced this week, while prices in Europe might fall as countries hit by high tariffs redirect material to the EU. The tariffs announced by President Donald Trump on 2 April exempted a number of minor metals and ferro-alloys, listed in Annex II of the executive order, but ferro-silicon and silicon metal of less than 99.99pc purity were not among the exemptions. The US steel industry is a major consumer of imported silicon products. The tariffs are the second major US trade announcement on ferro-silicon in two weeks after the International Trade Administration (ITA) determined anti-dumping duty rates against ferro-silicon imports from Brazil, Malaysia and Kazakhstan on 25 March. A final decision on anti-dumping duties is due on 12 May, and it remains to be seen how the new tariffs will impact the ITA's decision. Several major silicon and ferro-silicon producing countries are now subject to Trump's adjusted reciprocal tariffs, above the 10pc applied to all imports. Vietnam now has one of the highest tariff burdens at 46pc, Kazakhstan is subject to 27pc and Malaysia to 24pc. The countries have been major suppliers of silicon products to the US. In 2024, the US imported 27,084t of ferro-silicon from Malaysia, 13,119t from Vietnam and 10,262t from Kazakhstan. Silicon and ferro-silicon producer Ferroglobe, which has operations in the US, Canada and Europe, and which petitioned for the anti-dumping duties before the ITA, says it is too early to predict the full impact of the tariffs. "As a vertically integrated local producer in both the US and the EU, we believe that Ferroglobe will benefit from a more level playing field in both markets," the producer said. But sellers of heavily-tariffed material have taken immediate steps to reduce their exposure. "I just cancelled a lot of vessels from Vietnam because you cannot pay a 46pc tariff," a trader said on Thursday. Countries with lower tariffs stand to benefit if prices surge. A producer in one such country told Argus he expects his company's margins and market share in the US to increase. Brazil is subject to only a 10pc tariff, making Brazilian producers now among the most affordable for the US market. The US imported 59,971t of silicon metal and 33,182t of ferro-silicon from Brazil in 2024, comprising 40pc and 21pc of total silicon and ferro-silicon imports, respectively. Iceland is also subject to the base 10pc tariff, although for silicon metal there is a pre-existing anti-dumping duty on PCC BakkiSilicon at 47.54pc, and 37.83pc on all other sales from Iceland. Norway's tariff was set at 16pc, making it more competitive than the EU, which is subject to 20pc. The US imported 9pc of its silicon metal from Norway in 2024. 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US adds 228,000 jobs in March: BLS

04/04/25

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04/04/25

US adds 228,000 jobs in March: BLS

Houston, 4 April (Argus) — The US added a more-than-expected 228,000 jobs in March, showing hiring was picking up last month just as the new US administration began mass federal firings and announced tariffs on trading partners. Economists surveyed by Trading Economics had forecast job gains of 135,000 for March. The unemployment rate ticked up to 4.2pc in March from 4.1pc the prior month, the Bureau of Labor Statistics (BLS) reported today. Job gains in February were revised lower by 34,000 to 117,000 jobs. The unexpectedly strong job report comes amid mounting recession fears on the back of President Donald Trump's volley of trade tariffs unveiled this week and mass federal layoffs begun over the past month, which have yet to appear in the Labor surveys. US and global stocks have tumbled on the tariff news. As of 11am ET today, Fed funds futures markets are pricing in 43pc odds of a quarter point cut by the Federal Reserve at its next meeting in May and 100pc odds of at least a quarter point rate cut in June. Job gains averaged 159,000 over the 12 months prior to March. Federal government employment declined by 4,000 jobs in March following losses of 11,000 jobs in February. Employees on paid leave or receiving severance pay are counted as employed, the BLS said, so most of last month's announced federal job cuts do not show up in the data. Some federal job cuts have been reversed by court orders. Retail trade added 24,000 jobs, while transportation and warehousing added 23,000 jobs. Construction added 13,000 jobs and manufacturing added 1,000 jobs. Leisure and hospitality jobs grew by 43,000 and health care and social assistance added 78,000 jobs. Average hourly earnings rose by an annual 3.8pc, slowing from 4pc the prior month. By Bob Willis 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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