[Top News] from [REUTERS]
[Green Business]
EU, U.S. eye green goods tax pact in climate fight
Mon Sep 28, 2009 3:43pm EDT
By Darren Ennis
NEW YORK (Reuters) - The European Union and the United States are holding talks on forging a pact with OECD countries and China to eliminate duties on green goods as part of incentives to Beijing in a potential global climate deal.
EU diplomats told Reuters that under a plan being discussed by Brussels and Washington, the 30 nations in the Organization for Economic Cooperation and Development and China would agree a global pact to phase out import tariffs on goods such as wind turbines, renewables and green technologies.
But any deal is unlikely to include environmentally friendly hybrid cars, the diplomats said.
"The talks are entering an advanced stage. Brussels and Washington hope this could be one of the incentives needed to get China on board in the lead up to the Copenhagen climate change talks," one EU diplomat told Reuters.
A spokeswoman for the U.S. Trade Representative's office said the United States and the EU had been pushing within the Doha round of world trade talks since November 2007 for a deal to cut tariffs on environmental goods "and continue to work closely in pushing for concrete progress."
"We remain eager to move ahead with negotiations to eliminate tariff barriers on climate-friendly technologies and spur momentum on a larger WTO Doha package on environmental goods and services," said USTR spokeswoman Carol Guthrie.
U.S. businesses such as United Technologies Corp and General Electric Co, that are frustrated with the slow pace of the Doha round, have urged the Obama administration to consider alternative paths to reach a deal to boost trade in environmental goods and services.
"It's a chance to jump-start U.S. trade policy and aid global climate negotiations at the same time," said Jake Colvin, vice president for global trade policy at the National Foreign Trade Council, a U.S. business group.
China is on course to become the world's largest producer of wind turbines in the world this year and is a major manufacturer of solar products.
CHINA UNDER PRESSURE
The Asian powerhouse -- the world's biggest polluter -- is under pressure from Europe and the United States to cut its carbon dioxide (CO2) emissions as part of negotiations on a new global climate treaty to succeed the Kyoto Protocol, which lapses at the end of 2012.
In return Beijing wants billions of dollars in cash from the EU and the United States to help it harness new greener technologies for its export-driven economy.
"This deal would save Chinese exporters billions of euros and dollars and could form a large part of the overall package offered to Beijing to cut emissions," another diplomat said.
India and Brazil are also being wooed by the EU and Washington before global climate talks in Copenhagen in December, but are considered unlikely to take part in the initiative.
"Brazil and India are not seen as part of the deal since reducing their import tariffs would not benefit them. They can opt in, but it is expected they will opt out," the first diplomat said.
EU trade ministers gave the green light earlier this month to EU president Sweden and the European Commission -- which oversees trade policy for the 27-nation bloc -- to pursue the negotiations with Washington.
"Member states will get a complete update on October 6 in Sweden and if approved, formal negotiations could start with the OECD and China before Copenhagen," the second diplomat said.
Any negotiations would take place between ambassadors at the World Trade Organization in Geneva, but any deal would be formally agreed outside the global trade watchdog, the diplomats said.
"It would be similar to an agreement in the pharmaceutical sector and would not contravene WTO rules," one envoy said.
Pharmaceutical-producing countries accounting for approximately 90 percent of global production, including the United States, EU and China, have agreed to "zero-for-zero" tariffs for pharmaceutical products and for chemicals used in the production of pharmaceuticals.
(Additional reporting by Doug Palmer in Washington; Editing by Timothy Heritage and Chris Wilson)
[Green Business]
U.S. solar stocks knocked by German demand fears
Mon Sep 28, 2009 2:48pm EDT
By Laura Isensee
LOS ANGELES (Reuters) - U.S.-listed solar shares sank on Monday, cutting into gains earlier this month as investors feared Germany's new coalition government could trim support for the industry.
Shares of First Solar Inc, Suntech Power, Yingli Green Energy and LDK Solar Co Ltd all slipped 2 to 3.5 percent as Germany, the world's largest renewable energy market, prepared for the Free Democrats to join Chancellor Angela Merkel's conservatives in a governing coalition.
The Free Democrats (FDP), who have called for reduced solar supports, are expected to replace the Social Democrats (SPD).
"The elections are likely to be a negative for the sector," said Gordon Johnson, analyst with Hapoalim Securities.
Solar companies have struggled with an oversupply of cells and modules this year as a cutback in Spanish subsidies and the global financial crisis knocked demand for the systems that turn sunlight into electricity.
Still, the shares had rebounded in September on hopes that demand growth was returning to the nascent companies. First Solar shares have jumped 22 percent since the end of August, to $148.51 at mid-afternoon on Monday. U.S.-based SunPower Corp and China's Suntech Power Holdings Co Ltd have gained 19 percent and 7 percent, respectively, since the end of August while Trina Solar Ltd hit a high for the year at $35.90 last week.
Prices for solar modules have fallen by as much as 40 percent since the fourth quarter of 2008, eroding margins for many companies and raising worries that smaller companies may lack the resources to withstand the downturn.
Cowen & Co analyst Rob Stone said solar stocks were "somewhat oversold" in August as companies expected price erosion to continue, putting pressure all the way down to their bottom line.
"The bear argument was that you had this pricing spiral going on with no bottom in sight," Stone said.
"The thought (in August) was that, yes, Q3 might be OK, but then you've got six months of unknown territory to cross with lower volume, falling prices and margin pressures. So it's probably better to sell them and come back in the springtime," Stone added.
Since August, however, companies have been shipping strong enough orders so that bookings have stretched into December, shedding some light on how the fourth quarter might look, Stone said.
The solar power industry's busiest season tends to be the third quarter.
An uptick in demand, the stock market gains on Wall Street and firmer oil and natural gas prices also helped lift the solar sector this month.
"The idea being if energy prices are higher, companies are more willing to invest and there will be more capital to build solar projects," Pavel Molchanov, analyst with Raymond James.
Some analysts warned that the rally might be premature if the rise in demand turns out to be only seasonal. Hapoalim's Johnson said expectations that Germany could reduce its supports for solar in 2010 or 2011 was driving demand for equipment higher this year at the expense of future sales.
German demand was forecast to be about 1.5 gigawatts in 2009, but may reach as much as 2.0 to 2.2 GW as customers speed up orders, he said.
And with the price for solar modules sharply below year-ago levels, new sales will not necessarily equal rising profits.
"In a muted pricing environment, you really need to have this unit growth continue throughout the next year. Right now it's a bit early," said Oppenheimer and Co analyst Sam Dubinsky.
(Reporting by Laura Isensee and Matt Daily; Editing by Richard Chang)
[Green Business]
EU, U.S. eye green goods tax pact in climate fight
Mon Sep 28, 2009 3:43pm EDT
By Darren Ennis
NEW YORK (Reuters) - The European Union and the United States are holding talks on forging a pact with OECD countries and China to eliminate duties on green goods as part of incentives to Beijing in a potential global climate deal.
EU diplomats told Reuters that under a plan being discussed by Brussels and Washington, the 30 nations in the Organization for Economic Cooperation and Development and China would agree a global pact to phase out import tariffs on goods such as wind turbines, renewables and green technologies.
But any deal is unlikely to include environmentally friendly hybrid cars, the diplomats said.
"The talks are entering an advanced stage. Brussels and Washington hope this could be one of the incentives needed to get China on board in the lead up to the Copenhagen climate change talks," one EU diplomat told Reuters.
A spokeswoman for the U.S. Trade Representative's office said the United States and the EU had been pushing within the Doha round of world trade talks since November 2007 for a deal to cut tariffs on environmental goods "and continue to work closely in pushing for concrete progress."
"We remain eager to move ahead with negotiations to eliminate tariff barriers on climate-friendly technologies and spur momentum on a larger WTO Doha package on environmental goods and services," said USTR spokeswoman Carol Guthrie.
U.S. businesses such as United Technologies Corp and General Electric Co, that are frustrated with the slow pace of the Doha round, have urged the Obama administration to consider alternative paths to reach a deal to boost trade in environmental goods and services.
"It's a chance to jump-start U.S. trade policy and aid global climate negotiations at the same time," said Jake Colvin, vice president for global trade policy at the National Foreign Trade Council, a U.S. business group.
China is on course to become the world's largest producer of wind turbines in the world this year and is a major manufacturer of solar products.
CHINA UNDER PRESSURE
The Asian powerhouse -- the world's biggest polluter -- is under pressure from Europe and the United States to cut its carbon dioxide (CO2) emissions as part of negotiations on a new global climate treaty to succeed the Kyoto Protocol, which lapses at the end of 2012.
In return Beijing wants billions of dollars in cash from the EU and the United States to help it harness new greener technologies for its export-driven economy.
"This deal would save Chinese exporters billions of euros and dollars and could form a large part of the overall package offered to Beijing to cut emissions," another diplomat said.
India and Brazil are also being wooed by the EU and Washington before global climate talks in Copenhagen in December, but are considered unlikely to take part in the initiative.
"Brazil and India are not seen as part of the deal since reducing their import tariffs would not benefit them. They can opt in, but it is expected they will opt out," the first diplomat said.
EU trade ministers gave the green light earlier this month to EU president Sweden and the European Commission -- which oversees trade policy for the 27-nation bloc -- to pursue the negotiations with Washington.
"Member states will get a complete update on October 6 in Sweden and if approved, formal negotiations could start with the OECD and China before Copenhagen," the second diplomat said.
Any negotiations would take place between ambassadors at the World Trade Organization in Geneva, but any deal would be formally agreed outside the global trade watchdog, the diplomats said.
"It would be similar to an agreement in the pharmaceutical sector and would not contravene WTO rules," one envoy said.
Pharmaceutical-producing countries accounting for approximately 90 percent of global production, including the United States, EU and China, have agreed to "zero-for-zero" tariffs for pharmaceutical products and for chemicals used in the production of pharmaceuticals.
(Additional reporting by Doug Palmer in Washington; Editing by Timothy Heritage and Chris Wilson)
[Green Business]
U.S. solar stocks knocked by German demand fears
Mon Sep 28, 2009 2:48pm EDT
By Laura Isensee
LOS ANGELES (Reuters) - U.S.-listed solar shares sank on Monday, cutting into gains earlier this month as investors feared Germany's new coalition government could trim support for the industry.
Shares of First Solar Inc, Suntech Power, Yingli Green Energy and LDK Solar Co Ltd all slipped 2 to 3.5 percent as Germany, the world's largest renewable energy market, prepared for the Free Democrats to join Chancellor Angela Merkel's conservatives in a governing coalition.
The Free Democrats (FDP), who have called for reduced solar supports, are expected to replace the Social Democrats (SPD).
"The elections are likely to be a negative for the sector," said Gordon Johnson, analyst with Hapoalim Securities.
Solar companies have struggled with an oversupply of cells and modules this year as a cutback in Spanish subsidies and the global financial crisis knocked demand for the systems that turn sunlight into electricity.
Still, the shares had rebounded in September on hopes that demand growth was returning to the nascent companies. First Solar shares have jumped 22 percent since the end of August, to $148.51 at mid-afternoon on Monday. U.S.-based SunPower Corp and China's Suntech Power Holdings Co Ltd have gained 19 percent and 7 percent, respectively, since the end of August while Trina Solar Ltd hit a high for the year at $35.90 last week.
Prices for solar modules have fallen by as much as 40 percent since the fourth quarter of 2008, eroding margins for many companies and raising worries that smaller companies may lack the resources to withstand the downturn.
Cowen & Co analyst Rob Stone said solar stocks were "somewhat oversold" in August as companies expected price erosion to continue, putting pressure all the way down to their bottom line.
"The bear argument was that you had this pricing spiral going on with no bottom in sight," Stone said.
"The thought (in August) was that, yes, Q3 might be OK, but then you've got six months of unknown territory to cross with lower volume, falling prices and margin pressures. So it's probably better to sell them and come back in the springtime," Stone added.
Since August, however, companies have been shipping strong enough orders so that bookings have stretched into December, shedding some light on how the fourth quarter might look, Stone said.
The solar power industry's busiest season tends to be the third quarter.
An uptick in demand, the stock market gains on Wall Street and firmer oil and natural gas prices also helped lift the solar sector this month.
"The idea being if energy prices are higher, companies are more willing to invest and there will be more capital to build solar projects," Pavel Molchanov, analyst with Raymond James.
Some analysts warned that the rally might be premature if the rise in demand turns out to be only seasonal. Hapoalim's Johnson said expectations that Germany could reduce its supports for solar in 2010 or 2011 was driving demand for equipment higher this year at the expense of future sales.
German demand was forecast to be about 1.5 gigawatts in 2009, but may reach as much as 2.0 to 2.2 GW as customers speed up orders, he said.
And with the price for solar modules sharply below year-ago levels, new sales will not necessarily equal rising profits.
"In a muted pricing environment, you really need to have this unit growth continue throughout the next year. Right now it's a bit early," said Oppenheimer and Co analyst Sam Dubinsky.
(Reporting by Laura Isensee and Matt Daily; Editing by Richard Chang)
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