Crypto News: US exits talks on shipping carbon charge

Today's newsletter reports on the latest news from ongoing negotiations at the International Maritime Organization, where the US has abandoned global talks aimed at cutting shipping's carbon emissions. You can also read the story with updates on Bloomberg.com. For unlimited access to climate and energy news, please subscribe.

US exits talks on shipping carbon charge

By Jack Wittels

The US abandoned global talks aimed at cutting shipping's carbon emissions and threatened to reciprocate against any fees that the country's merchant fleet incurs if such an initiative proceeds.

The UN's shipping agency, the International Maritime Organization, is meeting in London this week with a goal of agreeing some sort of carbon charge for the maritime sector. The US stance was conveyed in a message to other governments that was seen by Bloomberg and confirmed as genuine by delegates from two other countries.

It's unclear where this will leave attempts to decarbonize shipping. Speaking before this week's meeting, there was optimism among several people following the talks that the US couldn't unilaterally upend the process. There's a wider question now about whether other countries will follow Washington's lead.

Talks at the IMO in London. Source: International Maritime Organization

"The US rejects any and all efforts to impose economic measures against its ships based on greenhouse gas emissions or fuel choice," the communication said. The US "urges your government to reconsider its support for the GHG emissions measures under consideration."

While the US is economically and diplomatically powerful, the country's fleet of commercial ships is relatively small. That's important because so-called flag-states — the places where vessels are registered — are integral to implementing the IMO's air-pollution rules.

The IMO's Marine Environment Protection Committee, the body that would approve the carbon-reduction measures, normally makes decisions by consensus. While a ballot is a possibility, the US's vote wouldn't carry more weight than that of other nations, but it might be able to influence others into voting in a certain way.

The GHG-cutting regulations being discussed this week would be amendments to MARPOL Annex VI, the main international treaty on preventing air pollution from ships.

While the US has ratified that annex, a country can withdraw from the full convention, or any of the optional annexes, according to Tore Longva, decarbonization director at ship classification society DNV.

"Our government will consider reciprocal measures so as to offset any fees charged to US ships and compensate the American people for any other economic harm from any adopted GHG emissions measures," the message said.

Back in 2023, the IMO set targets for cutting ships' greenhouse gas emissions, including getting the sector to net zero by mid-century.

"We're working on a compromise proposal," the Secretary General of the IMO, Arsenio Dominguez, told journalists on Monday. "There will be a price on emissions."

An email sent late Tuesday to the US State Department wasn't immediately answered.

Read more on this story with updates on Bloomberg.com.

Slow and steady

A new EU rule requires shipping companies to reduce the greenhouse gas intensity of fuel by 2%. If they don't, companies can face a penalty of about $65 a ton.

Doing the transition right

"Unless legally-binding safeguards are introduced, there is a risk that a large amount of fossil fuels will be replaced with unsustainable biofuels."

Hapag-Lloyd AG and Louis Dreyfus Armateurs statement

Companies are putting pressure on the IMO to set rules that won't amount to greenwashing.

Canada's election special

By Danielle Bochove

Last month, in his first speech as Canada's prime minister, Mark Carney vowed to make the nation "a superpower in both conventional and clean energy."

The "conventional" reference could be seen as matter of course in a nation whose energy sector is still dominated by oil and gas.

But it also shows the fine line that Carney, the Liberal Party leader, needs to tread as he squares off against Conservative Pierre Poilievre ahead of Canada's general election on April 28, while simultaneously fighting a brutal trade war initiated by US President Donald Trump.

"I think the political incentives for him align for that kind of compromise," said Jessica Green, a political scientist at the University of Toronto.

Canadian Prime Minister Mark Carney speaks to members of the media. Photographer: James Park/Bloomberg

Voters are focused on issues that seem more immediate and frightening than climate change, she said, from a fraying social safety net, to economic fears, to the rise of authoritarianism. Meanwhile, opposition leader Poilievre has blamed climate policies — especially the consumer carbon tax implemented by former Prime Minister Justin Trudeau — for rising household costs. In an election campaign that has frequently seen the parties in a dead heat, "it makes sense not to talk about climate," Green said.

A spokesperson for the Carney campaign said he had not chosen "to downplay or dial down climate."

"Climate change is very important to many Canadians, but we would also be remiss if we didn't talk about other things Canadians care about, such as affordability, our relationship with the United States, security and so on," she said.

Read the story for a look ahead at this month's election and what it means for the fate of Canada's industrial carbon tax.

More from Green

President Donald Trump's trade war threatens to slow down a fast-growing technology that's key to the clean-power transition and preventing blackouts — big batteries.

Energy storage devices large enough to feed the electric grid have been spreading across the US, with deployments surging 33% last year. Officials in California and Texas credit them with helping prevent blackouts during heat waves, when electricity demand soars, and integrating variable solar and wind power onto the grid.

But despite efforts by former President Joe Biden to build a domestic supply chain, the US still relies heavily on imported lithium-ion batteries — with 69% of the imports made in China, according to the BloombergNEF research provider.

Now, Trump's tariffs are piling costs onto new battery projects. BNEF analysts warn the increased costs will likely lead to cancellations and delays, cutting the industry's torrid growth.

BYD Cube Pro lithium-ion energy storage batteries at the Crimson Battery Energy Storage Project in Blythe, California. Photographer: Bing Guan/Bloomberg

Clean energy becomes a focus for take-private deals. Clean energy dealmakers are anticipating a new wave of take-private opportunities in the sector as US President Donald Trump's tariffs rattle global public markets.

Exxon has a quiet proxy season. For first time in 25 years, the oil giant isn't facing a single shareholder proposal. The company said in a statement late Monday that it received only one proposal this year and the SEC agreed it should be discarded because "it tried to micromanage the company."

Trump signs order to expand coal power. President Donald Trump signed a raft of measures he boasted would expand the mining and use of coal inside the US, a bid to power the boom in energy-hungry data centers and revive a flagging US fossil fuel industry.

Market snapshot

A bond market designed around natural catastrophes is proving remarkably resilient to a man-made market meltdown.

While most markets have seen deep selloffs since Donald Trump's "Liberation Day" tariff announcement, investors in catastrophe bonds have sailed through with hardly a ripple.

Fermat Capital Management, a Connecticut-based hedge fund specialized in insurance-linked securities, says the market for catastrophe bonds "has been trading in an orderly fashion" and investors who bought them "are seeing the benefit."