Petrostates and Oil Lobbies Could Derail Global Plastics Treaty

By Tsvetana Paraskova - 

As delegates from 184 countries begin talks in Geneva on a global treaty to curb plastic waste and pollution, the negotiations that began in 2022 are nowhere close to an agreement.

Geneva hosts the second part of the fifth session of the Intergovernmental Negotiating Committee to develop an international legally binding instrument on plastic pollution, after the first part failed to reach a deal in South Korea late last year.

This year, chances of a comprehensive global treaty are not high, either. Major petrostates and oil and petrochemical lobbies are looking to water down a final text and limit it to recycling plastics, instead of capping plastics production.

Petrochemicals, made of fossil fuels, are the key building blocks of plastics production. And the biggest oil-producing countries bet on boosting petrochemicals output, which will drive global oil demand growth in the coming years, while demand for road transportation fuels is set to level off.

In fact, China, the world’s top crude oil importer, has seen its oil demand growth slow as electric vehicle (EV) sales surge and gasoline and diesel consumption decline.

That’s why the biggest petrostates are expanding petrochemicals ventures in demand markets to capture a share of the growing petrochemicals market.

These petrostates don’t want a cap on plastics production.

The Geneva session is set to discuss targets on reducing the production of single-use plastics and a universal guidance on the design of plastic products.

However, major oil-producing countries, including Saudi Arabia and Russia, will likely challenge the provisions that include caps on production and would push for voluntary measures, delegates have told Reuters.

The Trump Administration isn’t keen on production caps, either. The U.S. Department of State will send a delegation to support a treaty that doesn’t impose restrictions on producers that could affect U.S. companies, the State Department told Reuters.

While the U.S. and the petrostates will not endorse restrictions on plastics production, the EU and the small island nations most affected by plastic pollution will be leading efforts to cap plastics output and address the beginning of the supply chain that ultimately leads to plastic pollution.

These fundamental disagreements could lead to a failure in talks once again, and the world won’t have an international, legally binding instrument on plastic pollution for who knows how long.

Many analysts expect a watered-down treaty without binding targets and a lot of “voluntary” adjectives in the text.

The UN has expressed hope that the Geneva talks could result in a treaty.

“Over the coming days, we have an opportunity to make a real difference — by negotiating an effective Plastics Treaty and identifying comprehensive solutions and measures that address the full life cycle of plastic,” said Katrin Schneeberger, Director of the Swiss Federal Office for the Environment.

The Center for International Environmental Law (CIEL), a non-profit organization providing legal counsel to some countries attending the Geneva talks, says that the petrochemical industry is poised to invest billions of U.S. dollars to expand plastic production by 40% in the next few decades.

“If they succeed, plastic will outweigh fish in our oceans by 2050,” CIEL notes.

Plastic production is set to triple by 2050, and “If left unchecked, plastics could burn through one-third of the Earth’s remaining carbon budget, derailing efforts to limit global warming,” CIEL’s attorneys and campaign specialists say.

The non-profit calls for a cap on plastic production, but warned last month that the second part of the “final” talks might not be the last.

“The current draft text now stands at 22 pages with more than 370 brackets, indicating areas where there is no agreement,” CIEL said.

The next two weeks will show whether the gap between proponents of production caps and petrostates can be bridged.

By Tsvetana Paraskova for Oilprice.com

 

The Global Struggle to Meet Renewable Energy Goals

By Felicity Bradstock - Aug 10, 2025

• A new report by Ember reveals that global national renewable energy targets are far below the COP28 goal of 11 TW by 2030.
• 
  
• Major emitters including the U.S., China, and Russia have not updated their national targets, while political shifts—especially in the U.S.—are stalling climate progress.
• 
  
• The first UN global stocktake warns that current efforts are insufficient to meet the Paris Agreement’s 1.5°C target, calling for greater ambition and accountability worldwide.
• 
  

Year after year, studies are showing that many countries around the world are falling short on their renewable energy targets by not accelerating away from fossil fuels to green alternatives fast enough. By the beginning of 2025, all 197 countries of the United Nations had endorsed the 2015 Climate Agreement, although United States President Donald Trump has since announced the withdrawal of the U.S. from the agreement. Most of the countries that signed the agreement have made tangible targets to reduce greenhouse gas emissions and take other action to limit global warming. However, stating these targets and actually meeting them are two very different things.

The energy think tank Ember published a report at the end of July assessing the progress with climate action across countries worldwide. It opens by saying that while 133 countries agreed to triple global renewable energy capacity at the 2023 COP28 climate summit, the policy action by many of these states has not aligned with the pledge. Ember’s study assesses the national 2030 renewable capacity targets of 96 countries and the EU, which together account for 97 percent of the global renewable capacity, 96 percent of electricity sector demand, and 96 percent of power sector emissions, as of 2024.

Almost two years ago, at COP28, 133 countries agreed to reach 11,000 GW of renewables globally by 2030. However, by July this year, only seven non-EU countries had updated their 2030 national targets, with five increasing targets and two lowering them. This was supported by several countries in the EU finalising their National Energy and Climate Plans (NCEP) in line with the bloc’s deadline. Within the EU, France and Spain increased their targets by 5 GW and 19 GW, respectively, while Germany and Italy made no changes. EU countries are not expected to update national targets between now and the next NECP deadline in 2029, which will focus on 2040.

Ember’s report shows that the global sum of national targets is just 2 percent higher than at COP28, at 7.4 TW, compared to a 7.2 TW target in 2022. While this target is double the 2022 global renewable energy capacity, it is far off the 11 TW 2030 goal needed to limit global warming to 1.5 degrees Celsius. Meanwhile, nine of the top 20 of the world’s largest power sectors have not yet updated their targets, including China, South Africa, Canada, Russia, Turkey, and the U.S.

Ember says that raising national targets is critical for advancing climate goals, enhancing energy security, and promoting economic growth. The think tank says that up-to-date targets help guide supporting policies, incentives and planning, and reduce risks like overcapacity or grid congestion. Going into COP30 in Brazil in November, participant states will likely face criticism for their lack of action in line with the aims stated in COP28 and 29, which could encourage countries to update their targets.

One of the biggest concerns at the international level of late is U.S. President Donald Trump’s backtracking on the country’s climate action. Trump called former President Biden’s Inflation Reduction Act climate policy a “Green New Scam. Greatest scam in history, probably.” Since coming into office in January, he has waged a war on green energy, moving to undo much of the former administration’s climate progress by cutting funds for green energy and electric vehicles, weakening regulations on air pollution and other climate issues, and pulling the U.S. out of the Paris Agreement.

The U.S. was rapidly becoming one of the world leaders in terms of the green transition under Biden, with other countries following in its footsteps, as seen in the EU and the U.K. However, Trump’s commitment to fossil fuels and disdain for wind and solar energy are expected to hinder progress at a time when the country’s power demand is set to grow significantly, as tech companies construct giant data centres, which will likely lead to higher greenhouse gas emissions in the coming years.

In terms of international progress, every five years, UN member states are expected to assess their progress toward implementing the Paris Agreement through a “global stocktake” process. The first report, which was published in September 2023, warned governments that “the world is not on track to meet the long-term goals of the Paris Agreement.” Most climate scientists agree that national pledges are, on average, not ambitious enough and will not take place fast enough to limit the global temperature increase to 1.5°C. Many suggest that greater international action must be taken, beyond the Paris Agreement, to make a meaningful impact on climate change.

“The Paris Agreement is not enough. Even at the time of negotiation, it was recognised as not being enough,” stated Council on Foreign Relations’ Senior Fellow for Energy and the Environment, Alice Hill. “It was only a first step, and the expectation was that as time went on, countries would return with greater ambition to cut their emissions.” This suggests that even if countries were to keep up with the aims of the Paris Agreement, more needs to be done on an international level to encourage a global green transition and hold states accountable for their action – or inaction. 

By Felicity Bradstock for Oilprice.com

 

EV Batteries Get Second Life in Energy Storage Revolution

By Haley Zaremba - Aug 10, 2025

• Used electric vehicle batteries are being repurposed for energy storage systems, providing a second life for lithium-ion batteries and contributing to domestic energy capacity.
• 
  
• This repurposing helps conserve critical minerals like lithium, nickel, and cobalt, reducing reliance on new mining and mitigating environmental impacts.
• 
  
• The growing market for energy storage offers a crucial safety net for EV battery manufacturers amidst a cooling EV market and increasing strain on power grids from AI and electrification.

Used and recycled electric vehicle batteries are getting a second chance at life through energy storage systems across the country. Lithium-ion batteries are retired from their role powering EVs when they still have a lot of life left in them, and repurposing them for one of the fastest-growing energy industry sectors is a no-brainer.

Diverting lithium-ion batteries away from landfill and into storage projects yields multiple overlapping benefits. First, it helps build up domestic energy storage capacity in a cost-effective and efficient manner. According to Dimension Market Research, the global Energy Storage Market is on track to reach USD $204.8 billion by 2033, up from USD 58.9 billion in 2024. This represents a massive compound annual growth rate (CAGR) of 14.8%. 

As renewable energy sources become more prevalent in the national energy mix, energy prices become more volatile and can even dip into the negatives when supply outpaces demand. This is because wind and solar energy are variable, meaning that they produce energy when the sun is shining and the wind is blowing, irrespective of demand. As a result, utilities need to ramp up energy storage installation to stabilize inflows and outflows of energy to maintain profitability and to keep the lights on. 

The second benefit is that reusing EV batteries for energy storage avoids throwing away critical minerals including lithium, nickel and cobalt at a time when supplies for those elements are growing increasingly tight. Currently, China has a chokehold on a huge number of critical mineral supply chains, and reusing batteries helps avoid tariffs and geopolitical complications. Plus, reclaiming critical minerals instead of purchasing new supplies avoids negative environmental impacts associated with mining and refining those minerals.

Third, battery storage provides a safety net for EV battery makers at a time when the market is cooling down in the face of major and unprecedented political pressures. BloombergNEF has lowered both its near- and long-term outlooks for EV sales in the United States for the first time ever as the Trump administration walks back Biden-era policies designed to boost electric vehicle adoption. The new numbers paint a grim picture for battery makers, but energy storage projects could provide a game-saving strategy. 

Already, major automotive companies are taking notice and beginning to pivot. Last month, GM signed a “non-binding memorandum of understanding” with Redwood Energy to begin a used-battery powered storage venture intended to serve as an external power bank for data centers. 

Related: China’s Oil Imports Jumped in July From a Year Earlier

“The market for grid-scale batteries and backup power isn’t just expanding, it’s becoming essential infrastructure,” said Kurt Kelty, General Motors’ vice president of batteries, propulsion, and sustainability, in a recent statement. “Electricity demand is climbing, and it’s only going to accelerate. To meet that challenge, the U.S. needs energy storage solutions that can be deployed quickly, economically, and made right here at home. GM batteries can play an integral role. We’re not just making better cars — we’re shaping the future of energy resilience.” 

The use of batteries as power banks for data centers could also prove to be a critical solution to another major energy issue of the moment. As artificial intelligence places unprecedented strain on power grids and raises the United States’ energy demands after decades of stasis, alternative energy solutions are critical for energy security as well as decarbonization efforts. 

“Electricity demand is accelerating at an unprecedented pace, driven by AI and the rapid electrification of everything from transportation to industry,” said Redwood founder and CEO JB Straubel. “Both GM’s second-life EV batteries and new batteries can be deployed in Redwood’s energy storage systems, delivering fast, flexible power solutions and strengthening America’s energy and manufacturing independence.” 

As a result, energy storage centers powered by EV batteries are popping up across the nation, and particularly in the Lone Star State. While the sector is relatively small now, it’s going to grow at a breakneck pace. And the timing could not be better, as first-generation EVs begin to proffer a steady stream of retired batteries. 

By Haley Zaremba for Oilprice.com

 

Lithium prices and stocks jump after CATL halts major China mine

Bloomberg News | August 10, 2025 | 

Image: Tianqi Lithium

Lithium prices and stocks surged after Contemporary Amperex Technology Co. Ltd. suspended activity at a major mine, spurring hopes of wider output curbs as Beijing cracks down on overcapacity across the economy.

Tianqi Lithium Corp. spiked as much as 19% in Hong Kong, while Ganfeng Lithium Group Co. jumped 14% after CATL — the world’s biggest battery producer — confirmed it had shut a major lithium mine in China. Prices of the metal on the Guangzhou Futures Exchange surged by their daily limit at Monday’s open.

The lithium industry has been struggling with a global supply glut and slower-than-expected electric-vehicle demand growth, and the potential halt of CATL’s mine was seen as important for reining in output. Lithium prices hit a record high in 2022 but have collapsed nearly 90% since then, forcing companies worldwide to rein in spending and delay expansions.

CATL has suspended production at its Jianxiawo mine in China’s Jiangxi province for at least three months, people familiar with the matter said at the weekend, after its mining license expired on Aug. 9.

The EV battery giant confirmed on Monday that it had halted operations, but didn’t give any timeline for the restart. It said it was applying to renew its mining license, after which production would resume “as soon as possible,” and the stoppage would have little impact on CATL’s overall operations. Its shares rose as much as 2.8% in Hong Kong.

The most-active lithium carbonate futures contract on the Guangzhou Futures Exchange jumped by the daily limit of 8% at the open on Monday, according to traders who have access to live pricing. They asked not to be named as they aren’t authorized to speak publicly. The contract due in November traded at 81,000 yuan a ton, up from a settlement of 75,000 yuan on Friday, they said.

Shares of Australian lithium producers also spiked. PLS Ltd., formerly Pilbara Minerals Ltd., jumped as much as 19% in Sydney, while Liontown Resources Ltd. surged as much as 25%. Mineral Resources Ltd. was up as much as 14%.

Traders and industry executives are now watching for other mining curbs around China’s Yichun city, which has emerged as a battery-metals hub. A local government department has asked eight miners to submit reserves reports by the end of September, according to notes from brokers and analysts, following an audit that found non-compliance in the registration and approvals process.

“Prices may deviate from reasonable levels in the short term, but CATL’s situation does not change the oversupply structure in the market,” said Zhang Weixin, an analyst at China Futures Co. “However, if production disruption is expanded to other mines in Yichun after Sept. 30, the lithium price level could go even higher.”

Citigroup Inc. analysts said in a note that they also did not expect the suspension of production at the mine to result in a firm deficit, but it would “bolster sentiment in the short term.”

(By Paul-Alain Hunt and Annie Lee)

 

CATL suspends output at China lithium mine for three months

Bloomberg News | August 10, 2025 

Jiangxi, China. Stock image.

Battery giant Contemporary Amperex Technology Co. Ltd. has suspended production at a major lithium mine in China’s Jiangxi province for at least three months, according to people familiar with the matter.

CATL, the world’s largest manufacturer of electric-vehicle batteries, has announced internally that the Jianxiawo mine would be temporarily halting operations, they said. One of the people said the suspension came after the company failed to extend a key mining permit which expired on Aug. 9.

CATL didn’t immediately respond to questions from Bloomberg outside business hours.

The lithium industry has been buffeted in recent weeks by extreme volatility in the spot, futures and equity markets, and the Jianxiawo operation has been in particular focus, given questions over its permit renewal. Last week traders flew drones over the mine, forecast to account for about 3% of the world’s mined production, in the hope of gauging the current state of output.

A second person briefed on the matter said affiliated refineries in nearby Yichun had been informed of the closure. The first person added the company was still in talks with government agencies to secure a renewal but was preparing for the halt to last months. The people asked not to be named as they are not authorized to speak publicly.

CATL’s permit trouble and suspension come as Beijing cracks down on overcapacity across a host of industries and increases scrutiny of mining operations. For an industry that has been plagued by a glut for more than two years, however, the pause in output from a significant link in the supply chain will be a boon.

CATL saw revenue from its battery mineral resources business plummet 29% in 2024, a drop that underscores challenges facing the Chinese company’s upstream investments including a precipitous decline in lithium prices. These were originally intended as a way of securing supply and managing costs, and CATL had aggressively pursued mining stakes, even overseas.

The most-active lithium carbonate futures contract touched more than 80,000 yuan ($11,128) in July on the Guangzhou Futures Exchange, which moved to rein in speculative trades afterward. The material surged around 9% last week to change hands at 75,000 yuan on Friday.

(By Annie Lee and Alfred Cang)

 

Critical mineral boron the best supporting actor of US magnet supply chain – 5E CEO

Amanda Stutt | August 8, 2025 | 

Facilities at Fort Cady in California. Image from 5E Advanced Materials.

5E Advanced Materials (NASDAQ: FEAM) (ASX: 5EA), the only publicly traded pure play on critical mineral boron, has released an SK-1300 preliminary feasibility study on its Fort Cady project in California.

The PFS reports a $724.8 million pre-tax net present value (at 7% discount), a 19.2% internal rate of return and an initial 39.5-year mine life. Total mineral reserves are about 5.4 million tons in boric acid with a grade of 8.03% B2O3 (boron trioxide).

Boron is designated as a critical mineral by the US Homeland Security. Although a smaller market and not as near the mainstream radar as rare earths, boron is crucial to onshore US defense supply chains, decarbonization and food security

Turkey’s state-owned Eti Maden and Australian mining giant Rio Tinto (ASX: RIO) control roughly 85% of the 4.5-million-ton annual supply globally. China holds a near monopoly on downstream processing.

As with many other critical minerals, efforts are underway to re-shore supply to the US.

While Rio Tinto, through its subsidiary US Borax, mines and refines boron in the namesake town in California, the refined borates are shipped to various locations, including Asian markets.

Fort Cady, located in the Mojave Desert near the town of Newberry Springs, represents one of the world’s largest new conventional (colemanite) boron deposits globally outside of Turkey.

E3’s initial facility, the 5E Boron Americas (Fort Cady) complex, is fully commissioned and is currently producing boric acid. The initial production plans are for 2,000 tons of boric acid per annum, with the ability to scale with minimal investment.

When 5E Advanced Materials CEO Paul Weibel first started at the company as CFO, he researched the deposit, ultimately finding a USGS report in the Library of Congress on the property.

“There’s been exploration going back to the 30s, you’re really starting to get back into that gold rush era and it’s a really cool history. This deposit was discovered in the 60s by Duval and Pennzoil – they were drilling for oil and gas up in the high desert and at 1,300 to 1,500 feet they ended up hitting an interesting layer of mineralization, not oil and gas, and that ended up being really a very multi-generational large deposit of colemanite,” Weibel told MINING.com in an interview.

“Four different types of minerals in which boron is found, you have tincal (borax), colemanite, kernite and ulexite colemanites. Colemanite is like the Mercedes-Benz of mineralization for boron.”

“The boron market is every bit an oligopoly. We get asked so often, what is boron? It’s the fifth element on the periodic table. It’s light, heat resistant, energy dense, microbial, and has great thermal properties. And I use the analogy that if Tony Stark were to build an Iron Man suit, it’s a boron-based suit,” Weibel said.

“Every TV, high-end display device, iPhone, Tesla, the screens all require boron to make,” Weibel said.

Boron – “the best supporting actor”

Boron is also used in US space and military industries, specifically to make Kevlar and tank armor. In 2022, 5E entered an agreement with aerospace engineering firm Estes Energetics to collaborate in producing boron advanced materials for solid rocket motors.

While rare earths are most reported for its use in powerful magnets that power EVs, NdFeB – the type made from an alloy of neodymium, iron and boron – have the highest magnetic strength.

Weibel believes boron to be an unsung hero of the magnet supply chain.

“You cannot make those magnets without the boron,” he said. “Rare earths won the Oscar – we are the best supporting actor on the magnet supply chain.”

Fort Cady development

With US President Donald Trump’s tariffs roiling global markets, Weibel sees an opportunity to disrupt the boron market by ramping up production at Fort Cady to supply the US at lower costs.

“Costs are going up. And what has been in this market has been a classic prisoner’s dilemma, where on one side of the world, you have Turkey. And then on the other side of the world, you have Rio,” he said.

“Turkey’s boron goes to Europe, Middle East, Africa, and then they’ll hit the Eastern seaboard of the United States. Pricing has been driven off of cost to serve and logistics. And so now what is happening is that Rio has actually gone out and they’ve increased prices and their revenue has gone up every year.”

“We know that our biggest competitor and the number two player in the market has to go sell at higher prices in Asian markets – that’s where Rio’s competing.”

Uncle Sam’s land

An historic deposit, Fort Cady has permits going back to the 1990s. Weibel said the company has secured three major permits for 400 acres of real property.

“We got a mining and reclamation permit, and conditional use permit in 1994,” Wiebel said.

“What was in that permit is really how we operate today. All around us is Uncle Sam’s land – BLM. We got a record decision in 1994. And then given we’re going to inject a very dilute 5% hydrochloric acid solution underground, we needed an underground injection control permit with the United States EPA.

“Having those permits is really hard to do. But we have them.”

Weibel said the plan, as production ramps up, is to build a much bigger plant.

“We built a small scale facility that’s been operating for 14 months, and we’ve been mining for 18 months. And all that data has been incorporated into our PFS and design for the bigger plant,” he said.

“We probably have the second largest deposit in the world. We just did our reserve statement, and we’ll produce 130,000 tons a year of boric acid. This market’s not all that big – so that has an upstream impact on CAGR. We see this market growing at about five and a half to six percent on average.”

 

Codelco gets approval from labor inspector to restart El Teniente copper operations

Reuters | August 10, 2025 | 

El Teniente is the world’s biggest underground copper mine and the sixth largest by reserve size. (Image courtesy of Codelco | Flickr)

Copper miner Codelco received authorization from Chile’s labor inspector office to begin resuming certain operations at its flagship El Teniente copper mine, it said on Saturday, after more than a week of suspended operations following a deadly collapse that killed six workers.

In a statement, Codelco said operations can resume in areas not affected by the July 31 collapse, including Pilar Norte, Panel Esmeralda, Pacifico Superior, Diablo Regimiento, and others, while sections such as Recursos Norte and Andesita remain suspended, pending further inspections.

The decision allows Codelco, the world’s largest copper producer, to partially restart activities at one of its key divisions, potentially easing operational disruptions.

Chile’s mining regulator had given the green light for a partial restart on Friday evening, but the company needed the labor inspection office to sign off on the plan before resuming mining activity at a time when the miner grapples with production challenges.

The El Teniente division is expected to announce its detailed plan for restarting operations along with safety measures to ensure compliance with labor authority requirements. Inspections in suspended areas will continue before a full restart can be authorized.

El Teniente, which is more than a century old, spans more than 4,500 km (2,800 miles) of tunnels and underground galleries deep within the Andes mountains.

(By Fabian Cambero; Editing by Andrea Ricci)

 

New Shipbuilding Rules Could Derail U.S. LNG Export Boom

By Tsvetana Paraskova - Aug 09, 2025,

• The Trump Administration’s proposed trade rules would require U.S. LNG exports to be increasingly shipped on U.S.-built and U.S.-flagged vessels.
• 
  
• Industry groups warn compliance is impossible due to the absence of U.S.-built LNG carriers, limited shipyard capacity, supply chain gaps, and a shortage of skilled crews.
• 
  
• Experts underline that the last U.S.-built LNG carrier was completed in 1980.
• 
  

The U.S. LNG export boom, strongly supported by the Trump Administration, could be undermined by separate trade rules proposed by the very same administration, which looks to revive America’s shipbuilding to counter China’s dominance.

Under new mandates proposed by the U.S. Trade Representative (USTR), beginning in 2028, a total of 1% of America’s LNG exports must be carried via U.S.-flagged vessels. From 2029 onwards, 1% of U.S. LNG exports should be shipped on U.S.-flagged and U.S.-built vessels.

This number will gradually rise over the decades, and by 2047, a total of 15% of all U.S. LNG exports should be carried on U.S.-built U.S.-flagged LNG tankers.

Just 1% of exports may look like a negligible figure if one doesn’t consider that the United States is the world’s largest LNG exporter, the current operational global LNG fleet has just one U.S.-flagged vessel (but built in France), and that building an LNG tanker in the United States will take years and probably cost two to four times the price of building a vessel in South Korea or China.

It is countering China’s dominance and reviving America’s shipbuilding that’s the key goal of the proposed USTR rules.

However, energy industry groups and analysts say the mandate would harm U.S. LNG exports more than it would crimp China’s dominance.

The oil and LNG lobby groups are calling on the USTR to scrap the provision for LNG tankers, as compliance with the mandate is impossible.

The Center for Liquefied Natural Gas (CLNG), the U.S. trade association promoting LNG exports and including LNG exporters and project developers, says that compliance with the USTR mandate is impossible as “There are currently no U.S.-made or enough U.S.- flagged vessels capable of exporting the quantity of LNG necessary to support current or increased U.S. LNG exports.”

The U.S. does not have the shipyard capacity, technical capability, or supply chains to significantly ramp up shipbuilding of U.S. LNG carriers to meet the USTR requirements. In addition, the U.S. currently lacks the highly specialized and skilled crews for the operation and maintenance of LNG ships, CLNG said.

The U.S. exported a total of 1,396 LNG cargoes last year. At the same time, the global LNG vessel fleet has 792 operating tankers, per data cited by the CLNG trade association. Of these, only one is a U.S.-flagged ship, but it is half the capacity of a modern LNG carrier and primarily serves to deliver LNG to Puerto Rico.

CLNG and the American Petroleum Institute (API) last month jointly filed comments on the proposed USTR mandates, saying that the restrictions on LNG shipping do not directly address China’s unfair practices and “instead penalize U.S. LNG exporters.”

The requirement “is unrealistic and will continue to disproportionately impact the U.S. LNG industry and not Chinese entities,” API and CLNG said.

Last year, about 1,400 cargoes of U.S. LNG were delivered to buyers around the world, and that number is slated to nearly double by the end of the decade as terminals that are currently under construction enter service, the associations said.

Under USTR’s requirements for 1% of U.S. LNG exports starting in 2029 to be transported on U.S.-built vessels, as many as six U.S.-built LNG vessels would be required by the end of the decade, which is not feasible.

The U.S. built its last LNG carrier in 1980.

Moreover, the groups note that there is a limited ability to access key shipbuilding components and build LNG vessels in the U.S., while the United States lacks the skilled labor necessary to build LNG carriers and probably a more daunting challenge of crewing and manning these vessels, API and CLNG said.

Analysts say the industry needs clarity on what would constitute a U.S.-built vessel.

“Could the majority of the vessel be manufactured overseas and completed in the U.S.? Is it a U.S.-made engine?” Jason Feer, global head of business intelligence for Poten & Partners, told CNBC.

Other experts say that the mandate, if it stays, will require flexibility in interpretation of what constitutes a U.S.-built ship and waivers for the industry if the Trump Administration wants its American LNG export dominance to succeed.

“Without some common-sense flexibility or a phased-in approach, the math just doesn’t add up,” Louis Sola, a former commissioner at the Federal Maritime Commission appointed by President Trump, and now a partner at lobbying firm Thorn Run Partners, told CNBC.

“We risk bottling up our own LNG exports and opening the market to the competition right when our allies need American energy the most.”  

By Tsvetana Paraskova for Oilprice.com