AFP

Greece’s government said Thursday it plans to double production of lignite, or brown coal, in the coming two years despite the pollution it causes as Athens aims to reduce its dependence upon Russian gas.

Greece depends upon Russia for 40 percent of its natural gas and since Moscow invaded Ukraine in February it has been searching for alternatives to ensure normal supplies.

“Lignite is polluting and in normal circumstances, natural gas is cheaper,” government spokesman Giannis Ekonomou said.

But given the conflict in Ukraine and the needed to diversify energy supplies, Ekonomou said increased brown coal production would be “necessary” for the next two years.

European countries have been seeking to reduce their use of brown coal to meet their climate pledges. Natural gas produces less emissions and has often been a relatively inexpensive alternative.

However, gas prices have surged this heating season as Russia reduced its sales on the European spot market, and deliveries under long-term contracts could be impacted by Western sanctions over Ukraine or Russian counter-sanctions.

Prime Minister Kyriakos Mitsotakis said Wednesday at the inauguration of a solar panel park that Greece’s energy policy needs to be flexible given the current circumstances.

But he also said that “in no case” would it affect the government’s objectives to reduce carbon emissions by 55 percent by 2030 and reach carbon neutrality by 2050.

Yet the increased coal production is a tacit abandonment of the goal to close the coal power plants by next year.

“It is an admission of failure,” said the Kinal socialist party.

Britain insisted Thursday it was sticking to its climate change goals despite announcing plans to drill for more North Sea fossil fuels as a way of preventing energy “blackmail” by Russia.

After weeks of cabinet infighting, the government finally released a long-promised energy strategy as Britons struggle with soaring prices, following Western sanctions against Russia over Ukraine.

The plan envisions eight new nuclear stations, a five-fold increase in solar generation and enough electricity from offshore wind to power every UK home by 2030.

But to the dismay of environmentalists, the politically charged issue of onshore wind turbines — cheaper and quicker to build than offshore — was left on the back burner. 

And campaign groups said plans to offer new licences to drill for North Sea oil and gas made a mockery of Prime Minister Boris Johnson’s legally enshrined commitment to make Britain carbon net zero by 2050.

Johnson, however, said he was taking a “sensible and pragmatic view” on hydrocarbons “in the interim to the transition to net zero” — a goal that he had proclaimed at November’s COP26 climate summit in Scotland.

“This is about tackling the mistakes of the past and making sure that we are set well for the future,” he told reporters.

“And we are never again subject to the vagaries of the global oil and gas prices and we can’t be subject to blackmail, as it were, from people such as Vladimir Putin, we have energy security here in the UK.”

The prime minister was speaking on a visit to a giant nuclear plant under construction at Hinkley Point in southwest England — which is years overdue and billions over budget.

Johnson vowed that “instead of a new reactor every decade, we will have a new reactor every year” — including both large plants and smaller “modular” ones, although these have yet to be tested at industrial scale.

If all the bets come off, according to the strategy, Britain could derive 95 percent of its electricity from low-carbon sources by 2030.

The government acknowledges that the strategy will do little to curb household energy bills in the near term, which Johnson said had “absolutely soared” after the Russian president’s invasion of Ukraine.

Rebecca Newsom, head of politics at Greenpeace UK, said: “This strategy comprehensively fails to stand up to Putin’s violence, to take the sting out of soaring energy bills, or take control of the spiralling climate crisis.”

– ‘Madness’ –

The government plan flagged a new competition to find UK manufacturers of electric heat pumps — which are much more efficient than gas-fired household boilers, but also much more expensive.

Otherwise, as critics noted, it had nothing to say about cutting down on energy wastage and improving efficiency in homes, after the finance ministry reportedly vetoed new spending on that front.

“The first line of any new energy policy in the UK should read ‘insulate, insulate, insulate’,” commented Jon Gluyas, director of the Durham Energy Institute.

Instead, he said, the strategy was “an uninspiring mix of more of the same and … does very little to meet the nation’s zero-carbon mantra shouted so loudly at COP26”.

United Nations secretary-general Antonio Guterres, marking the launch Monday of the latest UN report on climate change, said it was “moral and economic madness” to invest any more in fossil fuels.

The 3,000-page report warned that countries risk ending up with trillions in worthless assets such as offshore platforms and pipelines when demand for fossil fuels wanes in coming decades.

For the UK government, however, political pressure to tackle the energy crisis has been heating up ahead of nationwide local elections on May 5.

Ed Miliband, climate spokesman for the opposition Labour party, said Conservative backbenchers opposed to onshore turbines in rural England were “holding the government’s energy policy to ransom”.

“And people are paying higher bills as a result,” he told BBC radio.

Eurozone stocks rose Thursday but London drooped as investors digested news that the Federal Reserve held off from a bigger interest rate hike last month owing to Ukraine turmoil, dealers said.

Asian equities closed lower as investors examined minutes from the US central bank’s March monetary policy gathering.

Oil prices recovered some of the previous day’s heavy losses that had been triggered by concerns about weaker demand because of economic slowdown.

The Fed in March opted to raise US borrowing costs rates by a quarter percentage point, mindful of “greater near-term uncertainty associated with Russia’s invasion of Ukraine”.

Some policymakers had been in favour of lifting rates half a percentage point.

“As suspected, the war in Ukraine did temper the Federal Reserve’s decision to hike rates at its meeting in March,” said CMC Markets chief analyst Michael Hewson.

“However, an abundance of caution prompted them to stay their hand until events became clearer knowing that they had the option to go harder and faster later on.”

– Inflation fight –

The prospect of rates rising at a quicker pace over the coming months has added to a wave of uncertainty across trading floors.

Central banks across the world are under fierce pressure to tackle runaway inflation, which has soared further on a Ukraine-driven spike in commodities like gas, oil and wheat.

March was the first Fed hike since it slashed US rates to zero when the Covid-19 pandemic broke out two years ago.

While current US data points to a healthy economy, commentators warn of possible hard times ahead.

Wall Street tumbled for the second day in a row on Wednesday, with the Nasdaq again losing more than two percent, as tech firms are more susceptible to higher rates.

In London on Thursday, shares in gambling group 888 surged 21 percent on the British capital’s second-tier FTSE 250 index after the company won a discount on its planned purchase of the non-US operations belonging to rival William Hill.

– Key figures around 1115 GMT –

London – FTSE 100: DOWN 0.1 percent at 7,581.52 points

Frankfurt – DAX: UP 0.7 percent at 14,250.18

Paris – CAC 40: UP 0.9 percent at 6,554.65

EURO STOXX 50: UP 0.9 percent at 3,859.29

Tokyo – Nikkei 225: DOWN 1.7 percent at 26,888.57 (close)

Hong Kong – Hang Seng Index: DOWN 1.2 percent at 21,808.98 (close)

Shanghai – Composite: DOWN 1.4 percent at 3,236.70 (close)

New York – Dow: DOWN 0.4 percent at 34,496.51 (close)

Brent North Sea crude: UP 1.2 percent at $102.27 per barrel

West Texas Intermediate: UP 1.1 percent at $97.26 per barrel

Euro/dollar: DOWN at $1.0889 from $1.0896 late Wednesday

Pound/dollar: UP at $1.3072 from $1.3069

Euro/pound: DOWN at 83.30 pence from 83.37 pence

Dollar/yen: DOWN at 123.73 yen from 123.80 yen

burs-rfj/bcp/lth

The Pakistan rupee dropped to a historic low of 191 rupees to the dollar Thursday as an ongoing political crisis rocked confidence in the currency.

The rupee has been declining for months, but the fall became precipitous in March when opposition parties tabled a no-confidence motion against Prime Minister Imran Khan that led to the dissolution of the national assembly last week.

The rupee has lost over six percent in a month, and on the open market Thursday was at 191 — and 189 at the interbank rate.

“The political mess has ensued from uncertainty and this badly reflects on the rupee,” said Mohammad Sohail, chief of Topline Securities, a Karachi based brokerage and economic research house.

Pakistan’s supreme court was sitting Thursday to rule on the legality of political manoeuvres that led Khan to dissolve the national assembly.

Pakistan’s foreign exchange reserves, which rely on remittances from the diaspora, have failed to stop a growing trade deficit.

Reserves have fallen to $12 billion from $16 billion since March as the deficit hit 70 percent for the nine months of the fiscal year spanning 2021-22.

Since July 2021, the rupee has lost 18 percent of its value against the dollar.

Relations with the United States and International Monetary Fund (IMF) are also critical factors.

The IMF has approved a $6 billion bailout package for Pakistan to support its balance of payment issue in 2019.

Half was disbursed, but the rest is being renegotiated.

Shell on Thursday warned that its exit from Russia over the Ukraine war would cost the British energy giant up to $5 billion, but it would fulfil pre-conflict contracts to buy fuel from Moscow.

Despite the massive financial hit, energy majors are generally enjoying soaring revenues as oil and gas prices remain high on tight supply worries caused by the war and as economies reopen from pandemic lockdowns.

Shell, which is gradually withdrawing from Russia owing to the war, said impairment from assets — or loss in their value — and extra charges relating to activities in the country would be between $4 billion and $5 billion (3.7 billion and 4.6 billion euros) in the first quarter just ended.

The London-listed company in late February announced that it would sell its stakes in all joint ventures with Russian state energy giant Gazprom after the Kremlin launched its assault on Ukraine.

At the end of last year, Shell valued these Russian ventures at $3 billion.

– ‘Legally obliged’ –

Shell is withdrawing from Russian gas and oil in line with UK government policy.

However, the company on Thursday revealed it is “legally obliged to take delivery of crude bought under contracts that were signed before the invasion”.

Shell previously apologised for buying a cargo of Russian oil at a vast discount following the invasion.

Britain, which is far less dependent than the rest of Europe on Russian energy, plans to wean itself off oil imports by the end of the year and eventually stop importing its gas.

A UK government energy strategy update Thursday called for more renewable power from nuclear, offshore wind and solar.

Nations around the globe and their companies have axed business ties with Russia since President Vladimir Putin ordered the invasion of Ukraine on February 24.

Shell’s rival BP is pulling its near 20-percent stake in state energy giant Rosneft.

– Oil prices jump –

The Ukraine crisis has sent shockwaves across the global oil and gas markets because Russia is a major producer of fossil fuels.

Oil prices, which rocketed close to $140 per barrel in early March, have since fallen back to around $100 on peace talk hopes.

Shell, which on Thursday cautioned that the crude market remains “volatile”, saw its share price slide 1.4 percent in morning deals on London’s benchmark FTSE 100 index, which was steady.

“Shell has put an even higher figure of the costs of its write-down… which appears to have unnerved investors,” noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

“But despite the eye watering costs, the share price should continue to stay reasonably resilient given the divestment far outweighs the reputational damage which could be caused had it not pulled out.”

Its first-quarter earnings are due on May 5.

Shell had swung back into massive profit last year, as oil and gas prices jumped on recovering demand and geopolitical unrest.

Net profit stood at $20.1 billion after a loss after tax of $21.7 billion in 2020 at the height of the pandemic.

At the start of 2022, Shell switched headquarters from the Netherlands to Britain after a century and dropped Royal Dutch from its name.

Shell said the move was designed to strengthen its competitiveness, while accelerating shareholder distributions and its transition to a net-zero emissions business.

Britain insisted Thursday it was sticking to its climate change goals despite unveiling a new energy strategy that foresees new drilling for North Sea fossil fuels.

After weeks of cabinet infighting, the government finally released its strategy as Britons struggle with soaring energy prices following Russia’s invasion of Ukraine.

The plan envisions eight new nuclear power stations, a five-fold increase in solar and enough electricity from offshore wind to power every UK home by 2030.

But to the dismay of environmentalists, the politically charged problem of onshore wind turbines — cheaper and quicker to build than offshore — was left on the backburner. 

And campaign groups said plans to offer new licences to drill for North Sea oil and gas made a mockery of Prime Minister Boris Johnson’s legally enshrined commitment to make Britain carbon net zero by 2050.

“This isn’t an energy security strategy and will do nothing to bring down energy bills,” argued Ed Matthew, campaigns director at climate change think tank E3G. 

“It is a national security threat and the person who will be happiest with it is (Russian President) Vladimir Putin,” he said.

But the government says the market shock from sanctions on Russia has forced a temporary reappraisal of fossil fuels, as Britons confront the worst cost-of-living crisis since the 1950s.

Business and Energy Secretary Kwasi Kwarteng denied the government had turned its back on net zero.

“Not at all,” he told Sky News. “It’s still in the law of the land, we’re focused on that.

“But of course given what’s happening around the world, given the pressure on energy prices, we’re also doing lots of other things to make sure we get energy independence back into the UK,” he said.

The government acknowledges that the strategy will do little to curb household energy bills in the near term, which Johnson said had “absolutely soared” after Putin’s invasion of Ukraine.

– ‘Madness’ –

But in a social media video promoting the new strategy, the prime minister stressed: “We just can’t carry on like this.”

The plan would make British energy “cleaner, more affordable and more secure”, he said.

Johnson vowed that “instead of a new reactor every decade, we will have a new reactor every year”.

He went on to visit a new nuclear plant under construction at Hinkley Point in southwest England — which is years overdue and billions over budget.

The plan flagged a new competition to find UK manufacturers of electric heat pumps — which are much more efficient than gas-fired household boilers, but also much more expensive.

Otherwise, as critics noted, it had nothing to say about cutting down on energy wastage and improving efficiency in homes, after the finance ministry reportedly vetoed new spending on that front.

“This strategy comprehensively fails to stand up to Putin’s violence, to take the sting out of soaring energy bills, or take control of the spiralling climate crisis,” said Rebecca Newsom, head of politics at Greenpeace UK.

United Nations secretary-general Antonio Guterres, marking the launch Monday of the latest UN report on climate change, said it was “moral and economic madness” to invest any more in fossil fuels.

The 3,000-page report warned that countries risk ending up with trillions in worthless assets such as offshore platforms and pipelines when demand for fossil fuels wanes in coming decades.

For the UK government, however, political pressure to tackle the energy crisis has been heating up ahead of nationwide local elections on May 5.

Ed Miliband, climate spokesman for the opposition Labour party, said Conservative backbenchers opposed to onshore turbines in rural England were “holding the government’s energy policy to ransom”.

“And people are paying higher bills as a result,” he told BBC radio.

Asian equity markets fell Thursday after minutes from the Federal Reserve’s latest policy meeting indicated it is preparing to aggressively wind back its monetary policy, while oil prices pared another big drop.

The eagerly awaited summary dealt another blow to traders, who have grown increasingly concerned that officials will not be able to rein in 40-year-high inflation while also preventing the world’s top economy from tipping into recession.

According to the minutes, several policymakers were in favour of lifting interest rates half a percentage point while they also talked about offloading their bond holdings at a rate of $95 million per month — a process known as quantitative tightening.

The Fed’s balance sheet runs to about $9 trillion. 

News that such measures were being considered comes after several members of the policy board made hawkish comments about lifting rates. The next meeting takes place May 3-4.

The prospect of borrowing costs rising at a quicker pace and to a higher level over the coming months has added to a wave of uncertainty across trading floors caused by the war in Ukraine.

And while data at the moment points to a healthy economy, commentators warn of possible hard times ahead.

“This job of orchestrating a soft landing (for the economy) is going to be difficult,” Tracie McMillion, at Wells Fargo Investment Institute, told Bloomberg Television.

“We’ve only seen quantitative tightening once before and it was to a lesser degree than it will be this time, and it ended shortly after it started.”

Wall Street tumbled for the second day in a row, with the Nasdaq again losing more than two percent, as tech firms are more susceptible to higher rates.

“The minutes… show that Fed officials are becoming increasingly alarmed at how inflationary pressures are increasing and are determined to send a message to markets that they will act decisively to keep it in check,” said CMC markets analyst Michael Hewson.

Investors are now awaiting the release of minutes from the European Central Bank’s most recent meeting, looking for signs that officials there are preparing to change from their more dovish approach to policy.

Asia broadly followed New York down, with Tokyo, Sydney, Seoul, Taipei, Singapore, Mumbai, Wellington, Bangkok and Manila all in the red.

Hong Kong and Shanghai were also sharply lower, having given up early gains fuelled by hopes that China will ease monetary policy as its giant economy struggles under the weight of lockdowns in various parts of the country.

Authorities will step in to use tools at an “appropriate time”, according to the readout of a State Council meeting chaired by Premier Li Keqiang, adding they would also look at other ways to increase consumption. 

London fell in the morning but Paris and Frankfurt rose.

On oil markets, both main contracts enjoyed gains a day after tanking more than five percent on concerns about demand caused by a possible economic slowdown.

The commodity had also been hit by an announcement from the International Energy Agency that it will release tens of millions of barrels to offset those lost through sanctions on Russia, and owing to China’s Covid lockdowns.

“With the IEA release and the US (reserves) releases now priced in, Asia has walked in and bought the dips in both contracts,” said OANDA’s Jeffrey Halley.

“That is consistent with the usual behaviour of buyers from the energy-hungry region, with plenty of Asian interest to buy on any and all pullbacks.”

– Key figures around 0810 GMT –

Tokyo – Nikkei 225: DOWN 1.7 percent at 26,888.57 (close)

Hong Kong – Hang Seng Index: DOWN 1.2 percent at 21,808.98 (close)

Shanghai – Composite: DOWN 1.4 percent at 3,236.70 (close)

London – FTSE 100: DOWN 0.3 percent at 7,562.36

Brent North Sea crude: UP 0.4 percent at $101.44 per barrel

West Texas Intermediate: UP 0.4 percent at $96.62 per barrel

Euro/dollar: UP at $1.0900 from $1.0900 late Wednesday

Pound/dollar: UP at $1.3087 from $1.3071

Euro/pound: UP at 83.67 pence from 83.38 pence

Dollar/yen: DOWN at 123.72 yen from 123.79 yen

New York – Dow: DOWN 0.4 percent at 34,496.51 (close)