Citi Banker Says Clients Consider Climate Investments Outside US
Renewable energy and climate technology companies that flocked to the US to profit from the subsidies provided by the Biden administration's Inflation Reduction Act are reassessing whether the US remains the optimal place to run a low-carbon business, according to a senior Citigroup Inc. banker.
While there's yet to be a noticeable exodus from the US, companies are weighing their options to see if there are more accommodating locations for investing in decarbonization, said Cathy Shepherd, Citigroup's global head of corporate banking for the clean energy transition. Speaking on a panel at the BloombergNEF Summit in New York on Wednesday, Shepherd said Citigroup's clients are exploring options in Europe and Asia.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Miami Herald
an hour ago
- Miami Herald
Senate Moves to End Fuel Economy Fines That Hit Automakers Hardest
Senate Republicans have proposed ending fines for automakers not meeting Corporate Average Fuel Economy (CAFE) rules as part of President Trump's "Big Beautiful Bill." CAFE fuel economy standards have been active since 1975, with the initial penalty at a $5 fine per 0.1 mpg below the standard, multiplied by the number of vehicles sold in the US market. In 1997, this fine increased to $5.50, and today, the penalty is $14 per 0.1 mpg below the standard, with some automakers significantly more affected than others. Stellantis has paid the highest amount of recent fines, including $156.6 million for the 2016 and 2017 model years, a record $235.5 million for the 2018 to 2019 period, and $190.7 million for the 2019 and 2020 periods. General Motors (GM) paid $128.2 million in penalties for 2016 and 2017. In 2001, BMW paid a $27 million CAFE fine. If Congress doesn't change CAFE rules, GM, Ford, and Stellantis are projected to pay over $10 billion in penalties from 2027 to 2032 under stricter regulations set by the Biden administration, according to Transport Topics. Senate Republicans also proposed lowering emissions requirements, ending the $7,500 electric vehicle (EV) tax credit, imposing a $250 annual EV registration fee, and phasing out EV battery production tax credits in 2028. Tesla earned almost $2.8 billion last year by selling regulatory credits to other automakers, helping competitors meet government-established car emissions rules, many of which are in California. Competitors who don't manufacture enough zero-emission vehicles face steep fines if they don't purchase regulatory credits from Tesla. If rolled back, new emissions requirements would save automakers $200 million, Reuters reports. The Transportation Department also declared that former President Biden's administration exceeded its authority by assuming a high EV adoption rate in calculating fuel economy rates, increasing the likelihood of looser CAFE standards. Under President Biden, 2027 to 2031 model-year passenger cars faced a 2% annual fuel economy increase requirement, with trucks subject to a 4% increase. However, new final rules would keep the 2027 to 2031 passenger car fuel economy at 2% while lowering the annual increase for trucks from 4% to 2% for 2029 to 2031 models. However, separate legislation may eliminate CAFE fines altogether. Automakers could still face tailpipe emissions rules established by the Environmental Protection Agency (EPA), even if Congress eliminates CAFE fines. While Congress can overturn EPA rules, its most recent CAFE proposal doesn't impact EPA penalties. As of 2025, automakers are subject to EPA penalties up to $45,268 per non-compliant vehicle or engine, $4,527 per tampering event or sale of defeat device, and $45,268 per day for reporting and record-keeping violations. If passed, Congress's proposal could significantly shape the U.S. EV adoption rate in favor of lowering immediate costs for legacy automakers. "We are making vehicles more affordable and easier to manufacture in the United States. The previous administration illegally used CAFE standards as an electric vehicle mandate, raising new car prices and reducing safety. Resetting CAFE standards as Congress intended will lower vehicle costs and ensure the American people can purchase the cars they want," said current Department of Transportation Secretary Sean Duffy regarding Congress's proposal to end CAFE fines. Copyright 2025 The Arena Group, Inc. All Rights Reserved.
Yahoo
2 hours ago
- Yahoo
This food bank saved big with solar. GOP cuts could crush similar efforts.
When the team at Second Harvest Food Bank of Northwest North Carolina first started planning construction of a new headquarters in Winston-Salem in 2019, they seriously considered solar panels. 'Food banking at its core has always been about sustainability,' said Beth Bealle, Second Harvest's director of philanthropy, stewardship, and engagement. The organization rescues food that would have ended up in landfills to feed those in need, and Bealle and her colleagues wanted to push the sustainability concept 'in other aspects of our work — like our facility.' But at the time, they were advised that a rooftop array would be too expensive. Second Harvest shelved the idea and moved into its gleaming new 140,000-square-foot building in a former R.J. Reynolds Tobacco industrial park. 'Fast forward to the Piedmont Environmental Alliance Earth Day Fair of April 2023,' Bealle said. That's where she met the alliance's new green jobs program manager, Will Eley, who asked, 'Did y'all know about the Inflation Reduction Act?' Eley and Bealle 'hit it off fabulously,' she said. Together, they took the food bank's solar plan off the shelf and worked through the details of complying with the federal law's clean energy incentives. Two years later, on Earth Day 2025, Second Harvest and the alliance flipped the switch on a 1-megawatt array, one of the largest rooftop solar projects in the state. Assuming promised refunds from the federal government materialize, the project is expected to save Second Harvest $143,000 each year, funds the group says will be reinvested directly into programs that provide food, nutrition education, and workforce development across 18 counties of Northwest North Carolina. But with the tax rebates now on the chopping block in Congress, other organizations considering new facilities may not have the chance to follow Second Harvest's footsteps. 'We've already talked to several food banks who are in that process about our project, because they're interested in putting solar on the rooftops of their new buildings,' Bealle said. 'And that's not going to be within reach for some people if these tax credits aren't available.' The federal government has long offered tax credits to incentivize renewable energy projects, from solar farms to rooftop arrays. But before the Inflation Reduction Act, those enticements were of little use to food banks and other entities that don't pay an income tax. The 2022 landmark climate law allowed organizations like Second Harvest to access the 30% tax credit on their solar investment by essentially transforming it to a rebate. 'The process by which they were able to fully monetize the tax credits was quite the game changer,' Eley said. In North Carolina, the provision known as 'direct pay' serves as a vital sequel to an expired rebate program from utility Duke Energy, which helped dozens of houses of worship and other nonprofits go solar during its five years of existence. 'Duke Energy had the nonprofit solar rebate, and that was a tremendous tool that was very helpful,' said Laura Combs, a one-time solar salesperson who worked with tax-exempt groups around the state to access the cash back from the utility. 'When the direct payment came into play,' she said, 'that took up that slack.' The federal climate law also offers other inducements. It provides a 10% bonus to tax credits for projects deployed in government-defined 'energy communities,' including those on former industrial sites or brownfields. At least another 10% is available for clean-electricity projects that are located in or benefit low-income communities. As an organization that serves food-insecure households and that is headquartered in a poor census tract on a brownfield, Second Harvest qualified for both of these extra incentives. 'We really maximized the clean-energy layer cake,' Eley said. Altogether, the tax credits cut the $1.5 million price tag for the solar rooftop installation in half, Eley said. While the food bank had to pay the full amount up front and won't recoup those savings until it files its tax return for the year, the extra incentives mean the 1,702 solar panels will pay for themselves more quickly in the form of lower energy bills. Second Harvest and Piedmont Environmental Alliance hoped the project would serve as a beacon to other nonprofits looking to go solar. And in and around Winston-Salem, that's starting to come true, Eley says. 'It's opened up several doors there,' he said, mentioning that a local credit union and groups like Goodwill have expressed interest in installing panels. 'We're presently working with six faith communities that are navigating [direct pay] and going through their feasibility and contracting processes for solar specifically.' That tracks with a nationwide trend of houses of worship going solar thanks to the Inflation Reduction Act. There's also been an uptick in nonprofit installations statewide, according to data compiled by the North Carolina Sustainable Energy Association. The association doesn't monitor whether institutions access the direct-pay feature, and some recent arrays may be holdovers from the Duke rebate program, which ended in 2022. But the numbers are striking nonetheless: Since 2011, almost 150 houses of worship, local governments, and other entities that don't pay taxes have erected solar arrays, nearly all on rooftops. Sixty-three, or 42%, did so in 2023 and 2024. Now, Eley said, the groups he's working with are especially motivated to act quickly. 'The idea of going solar has been something they have tossed around for a number of years,' he said. 'We're certainly reiterating to them if you're going to make that investment, do so now.' That's because the massive budget bill passed last month by the House — dubbed the One Big Beautiful Bill Act in an homage to President Donald Trump — would make tax credits for solar and other renewable energy projects nearly unusable. The Senate is now considering whether to pass the measure as is or to make changes. As the legislation stands now, projects would have to begin construction within 60 days of the bill's passage to access the 30% tax credit. That's an easier feat for a rooftop installation than a larger, ground-mounted affair, but still incredibly difficult for nonprofits, religious institutions, or local governments that tend to have lengthy decision-making processes and aren't already planning to go solar. Even more unworkable is a provision that requires documentation that no component of a project, no matter how small, is linked to a 'foreign entity of concern' such as China. While House lawmakers voted to make the underlying 30% tax credit virtually useless, they didn't explicitly target the three related adjustments that helped enable the Second Harvest project: direct pay, the low-income community benefit, and the brownfield benefit. 'These cross-cutting provisions are part of the tax credit structure, but they are their own mechanisms,' said Rachel McCleery, the former senior adviser at the U.S. Department of the Treasury who led stakeholder engagement for the climate law's implementation. The survival of direct pay in the House measure stands in contrast to the elimination of its twin in the private sector, transferability, which allows smaller energy companies better access to incentives. But direct pay means little if the baseline 30% tax credit is still hamstrung by the 60-day start-work requirement and the foreign-entity provision. 'This is backdoor repeal of the IRA,' said McCleery, who now advises clients on defending clean energy tax credits, 'and it's backdoor repeal of direct pay — because you can't use direct pay if you don't have an underlying tax credit.' The same applies to the bonus incentives for low-income and brownfield communities. 'These cross-cutting mechanisms can still be used,' McCleery said, 'but if the underlying credit is moot, that essentially repeals the mechanisms.' On the flipside, if the Senate restores the viability of the underlying 30% tax credit in its version of the bill, the mechanisms that aid nonprofits like food banks and houses of worship will also be accessible. But advocates say that remains a big 'if.' And there are other challenges: Slashes to the Internal Revenue Service workforce could delay payments to Second Harvest and others. And the group is bracing for the impact of the other budget cuts in the House bill as written, such as to food assistance and Medicaid. 'It's just going to put pressure on people who are already under-resourced,' Bealle said. 'And that has a ripple effect to every organization that supports under-resourced people, including us.' Combs, the former solar sales professional who also volunteers with climate advocacy group North Carolina Interfaith Power and Light, called it a 'tragic snowball.' She then brought up U.S. Sen. Thom Tillis, the North Carolina Republican who has consistently voiced disapproval of a full-scale repeal of the tax credits. 'Thank goodness Sen. Tillis has spoken out and been a leader on the importance of the Inflation Reduction Act incentives,' Combs said. 'I am anxious to see how this plays out in the Senate.'
Yahoo
2 hours ago
- Yahoo
Citigroup drops July rate cut bets for US, trims forecast to 75 bps
(Reuters) - Citigroup has pushed back its U.S. rate cut forecast to September from July and now expects three cuts this year instead of four, after a stronger-than-expected May jobs report in an otherwise cooling labor market. The Wall Street brokerage anticipates 75 basis points (bps) of cuts this year in three equal tranches in September, October and December, revising its earlier forecast of 100 bps of cuts. The brokerage also forecast two rate cuts of 25 bps each in January and March of 2026. The Federal Reserve's last rate cut was in December 2024, when it reduced the key lending rate by 25 bps. U.S. non-farm payrolls increased by 139,000 jobs last month after a downwardly revised rise of 147,000 in April, data showed. Economists polled by Reuters had estimated May payrolls to rise by 130,000 jobs. The U.S. central bank is expected to keep interest rates unchanged at its meeting next week, while traders have priced in close to two 25-bps cuts by December. On Friday, Citi lifted its S&P 500 year-end target to 6,300 from 5,800 earlier, expressing renewed optimism in corporate earnings resilience and the accelerating momentum of artificial intelligence-driven growth. The benchmark S&P 500 index closed above 6,000 for the first time since late February on Friday. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
