RIYADH: Despite the global pressure to move away from fossil fuels, South Africa and India are relying on coal to help fill gaps in the energy supply. On the other hand, the Commodity Hedge Fund index is seen benefiting from the energy transition.
Looking at the bigger picture:
- Japan’s 2 trillion yen ($17.5 billion) green innovation fund created back in 2020, as well as the potential carbon tax, are not enough to bring the country to its carbon neutrality goals by 2050, Bloomberg reported. One possible solution is for the Asian country to consider a new form of sovereign debt as a source of funding in an attempt to pursue net zero goals.
Through a micro lens:
- South African electricity public utility Eskom Holdings SOC Ltd. is to burn more coal than expected over the next year amid delays in a government program that aims to draw energy supply from private producers, Bloomberg reported. That said, the state owned firm anticipates 2 percent more energy generation from coal over the next year.
- Indian state owned statutory corporation NTPC Ltd. sought bids for an accumulative amount of over 10 million tons of foreign coal to curb power shortages amid expected strong summer power demand, Bloomberg reported. As a result, coal imports will jump in spite of the policies in favor of local production.
- Germany’s electric utility company E.ON gained hundreds of thousands of customers across Europe as the rallying energy prices forced smaller competitors in the region to shut, Reuters reported. Despite the fact that this is just a small share of the firm’s 50 million customer base, it emphasizes how the surging costs are severely affecting retailers across the continent.
- The Bridge Alternatives Commodity Hedge Fund Index jumped over 19 percent in 2021 as the energy transition unlocked several trading opportunities from crude oils to base metals, Bloomberg reported. The surge in trading opportunities is mainly attributed to the global shift towards renewable energy which increased demand for battery metals required for electric vehicle production.