Macroeconomics

Trump Likely to Postpone July Tariff Deadline Amid Trade Negotiations

US Treasury Secretary Scott Bessent has suggested that President Trump is likely to postpone the 8 July deadline for implementing reciprocal tariffs, thereby allowing ongoing discussions with key trading partners to proceed. Initially announced in April, the suspension of tariffs prompted international dialogue; however, progress has remained limited. Despite earlier assurances of swift agreements, the negotiations have proven to be protracted and complex, sustaining uncertainty in global markets.

Europe Reaffirms Resolve to Pressure Russia Despite US Delays

European leaders have reiterated their commitment to intensifying sanctions against Russia, independent of any reluctance on the part of the United States. France, Germany, Italy, Poland, Spain, the United Kingdom, and the European Union intend to enhance existing punitive measures and strengthen Ukraine’s defence capabilities. This approach reflects Europe’s growing geopolitical autonomy in light of President Trump’s inconsistent involvement.

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Carbon Markets

Vietnam Commences First Phase of Emissions Trading Scheme

Vietnam has officially initiated its inaugural emissions trading scheme (ETS), initially focusing on the steel, cement, and thermal power industries. The pilot phase, which will continue until 2029, is set to cover around half of the nation’s total CO₂ emissions. Enterprises that exceed their emission caps must obtain supplementary allowances. Nevertheless, the majority of initial allowances will be distributed without charge to facilitate industry adaptation. The ETS plays a pivotal role in Vietnam’s strategy to attain net-zero emissions by 2050.

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Renewables and Biofuels

Germany Urged to Utilise PPAs to Drive Renewable Expansion

Germany’s national energy agency (dena) has highlighted the significance of power purchase agreements (PPAs) in expediting the expansion of renewable energy. Proponents argue that PPAs offer businesses long-term financial stability, reduce public expenditure, and support industrial efforts to meet climate goals. The agency has called for improved market transparency and incentivisation to encourage broader adoption of PPAs.

Renewable Sector Welcomes Draft of Germany’s €500 Billion Climate Fund

The German renewable energy sector has responded positively to the preliminary draft of a €500 billion special infrastructure and climate fund. However, industry stakeholders are urging the government to establish clearer criteria for allocation to ensure effective and targeted investment. Particular attention has been given to municipal heating transformation, grid expansion, and well-defined investment strategies to maximise both environmental and economic benefits in the long term.

EU Contemplates Relaxing Methane Rules for Gas Imports

EU member states are considering easing stringent regulations on methane emissions from imported gas, particularly liquefied natural gas (LNG) from the United States, due to concerns about potential disruptions to energy supplies. Feedback from importers and US suppliers has prompted a reassessment, with the possibility of integrating methane rules into broader trade accords. Environmental groups, however, continue to assert the importance of such regulations for achieving climate objectives.

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Environmental and Sustainability Regulation

EU Proposes Flexible 90% Greenhouse Gas Reduction Target for 2040

The European Commission has indicated that its forthcoming proposal for a 2040 greenhouse gas reduction target may include increased flexibility. Kurt Vandenberghe, Director-General for Climate Action, stressed the need to balance ambitious climate targets with practical implementation strategies. This could involve greater use of international carbon credits and carbon removals. The aim is to maintain the EU’s position as a climate leader while addressing economic and political constraints.