Asia leads renewable capacity growth in 2024, but gaps widen

IRENA

Capacity milestones and technology mix

Asia leads renewable capacity growth in 2024 and shapes global additions. Asia leads renewable capacity growth with 71% of 582GW installed. Total renewable capacity rose 15% to 4.4TW. Solar added 453GW, while wind added 114GW. Renewables now hold 46.2% of global capacity, near fossil’s 47.3%.

Tripling target, regional gaps, and investment

Asia leads renewable capacity growth, yet the world lags the 2030 tripling goal. At today’s pace, capacity reaches only 10.3TW by 2030. Growth must accelerate to 16.6% yearly. Africa, Eurasia, Central America, and the Caribbean added just 2.8%. Closing gaps needs policy, finance, and technology transfer. Global energy investment will hit $3.3tn in 2025, with two-thirds “clean.” China remains the largest clean-energy investor.

Strong Asian momentum lifts solar, wind, and grid component demand. However, uneven access to capital limits broader adoption. Therefore, stable frameworks and concessional funding remain critical. Developers must also expand storage and transmission to absorb growth.

The Metalnomist Commentary

Asia’s surge is real, but global equity still lags. Expect supply-chain tightness in inverters, transformers, and HV equipment. Watch policy pipelines and grid upgrades to sustain installation velocity.

DRC-Rwanda minerals pact aims to stabilise 3T supply chains

DRC-Rwanda minerals

The DRC-Rwanda minerals pact follows a US-brokered peace deal. Both governments pledged to respect borders and stop supporting armed groups. The DRC-Rwanda minerals pact launches a regional integration framework for investment. It targets transparent supply chains for tantalum, tungsten and tin. The agreement aims to restore stability after 18 months of disruption.

Supply risks and market impact

Conflict shut key monitored mine sites across eastern DRC. M23 seized Rubaya and advanced on Goma and Bukavu earlier this year. As a result, 3T concentrate flows tightened and logistics stalled. Traders face uncertainty until export channels clear under the pact.

US bilateral minerals deals may follow the peace agreement. Therefore, buyers could gain clearer access and improved traceability. Producers may restart shipments once security improves in North and South Kivu. However, timelines depend on enforcement and local compliance.

What changes for responsible sourcing

The pact prioritises investment and transparency across critical mineral supply chains. Meanwhile, miners expect oversight to separate legal output from illicit material. This could reduce price volatility for tantalum, tungsten and tin. The DRC-Rwanda minerals pact, if implemented, strengthens ethical sourcing claims.

The Metalnomist Commentary

The peace framework creates a pathway, but execution remains decisive. Investors should watch border security, export procedures, and on-site audits. If governance holds, premiums for verified 3T units may compress.

Brazil Allocates R5bn to Boost Critical Minerals Development

Bndes

Funding Expands Rare Earths, Lithium, and Graphite Projects

Brazil has awarded R5bn ($908mn) to support 56 critical mineral and research projects, signaling stronger investment in strategic resources. The funding, provided by the state development bank BNDES and federal agency Finep, will support mining and innovation initiatives tied to the energy transition.

Over 30% of the funds are directed toward rare earths and lithium, while graphite, copper, and silicon also feature prominently. The selection process included 53 companies, with major recipients such as Stellantis and Weg advancing energy and mobility-related projects.

High Demand Outpaces Available Financing

Brazil received requests for R45.8bn ($8.2bn), but only a fraction was financed. This underscores the strong demand for critical mineral project funding, with only R5bn allocated in the initial round. Applicants now must decide by 25 July whether to pursue loans, equity, grants, or subsidies.

Projects targeting platinum group metals, nickel, niobium, and titanium also received backing, highlighting Brazil’s broad resource base. The program prioritizes projects with research and development plans that support decarbonization and clean energy technologies.

Brazil’s Strategic Position in Global Supply Chains

Brazil holds leading reserves of niobium, graphite, nickel, rare earths, silicon, and lithium. This positions the country as a critical supplier in global energy transition supply chains. According to BNDES, Brazil is the world’s top niobium producer and ranks among the top five globally for several other strategic minerals.

The allocation of funds aims to accelerate local processing, innovation, and integration into global supply chains. As energy security and geopolitical pressures reshape markets, Brazil’s role in critical minerals is likely to grow in importance.

The Metalnomist Commentary

Brazil’s R5bn critical minerals funding demonstrates strategic prioritization of resources essential to the energy transition. While financing demand far exceeded available capital, the program highlights Brazil’s ambition to move beyond raw exports toward innovation-driven value chains. Long-term success will hinge on ensuring that projects deliver both economic returns and sustainability outcomes.

Eurofer Warns of Fourth Consecutive Year of EU Steel Demand Recession

Eurofer

Steel Market Weakness Deepens Amid Tariff Pressure and Global Overcapacity

The European Steel Association (Eurofer) forecasts that EU apparent steel consumption will contract by 0.9% in 2025, marking the fourth consecutive year of decline. This represents a sharp reversal from its earlier prediction of 2.2% growth. Steel-using sectors are also projected to shrink by 0.5%, instead of the 1.6% recovery previously expected.

Eurofer cites the new U.S. 50% tariffs on steel as a significant additional burden on an already fragile market. Global overcapacity, high energy costs, and geopolitical tensions continue to erode the competitiveness of EU steelmakers. As a result, producers may face capacity closures, job losses, and delays in decarbonisation investments.

The association now expects any demand recovery to be postponed until the first quarter of 2026, contingent on improvements in global economic conditions. If no resolution is reached between the EU and U.S. over tariffs, Eurofer urges the European Commission to enact emergency trade measures under its Steel and Metals Action Plan.

In 2024, EU apparent steel consumption declined by 1.1%, while domestic deliveries fell 2%. Steel-using industries, particularly automotive and construction, contracted by 3.7%, intensifying the sector’s challenges.

The Metalnomist Commentary

Eurofer’s outlook underscores the compounding impact of trade disputes, structural overcapacity, and energy costs on Europe’s steel industry. Without swift trade safeguards and competitive energy pricing, EU steelmakers risk losing ground to global rivals, jeopardising both jobs and decarbonisation goals.

Brazil Sues BYD for Human Trafficking and Slave-Like Labor Practices

Brazil BYD

$45 Million Lawsuit Targets BYD and Chinese Contractors Over Factory Construction Abuse

Brazil sues BYD for human trafficking and slavery, filing a R$257 million ($45 million) lawsuit against the Chinese EV giant and two of its service providers. The legal action, led by Brazil’s Labor Prosecution Office (MPT), alleges that BYD, along with JinJiang Construction and Tecmonta (formerly Tonghe), subjected 220 Chinese workers to slave-like labor conditions during the construction of BYD’s electric vehicle factory in Brazil.

Investigators found workers living in overcrowded dorms with no basic hygiene, armed security, and confiscated passports. Employment contracts contained illegal clauses, retaining 70% of wages and penalizing workers for early departure. Workers were forced to pay for their airfare back to China and lost all unpaid wages if they quit before six months. MPT is seeking both collective and individual compensation, plus a court-enforced compliance order against all three companies to uphold Brazilian labor laws.

Factory Opening Delayed as BYD Responds to Allegations

The abuses were first uncovered in December 2024, prompting an immediate halt to construction at the BYD site. Authorities described the conditions as consistent with modern-day slavery, with workers denied rest days and assigned just one bathroom for every 31 people. The MPT also confirmed all 220 workers entered Brazil on improper visas, classifying the case as human trafficking.

In response, BYD stated it has been cooperating with Brazilian authorities and intends to issue a formal statement. The company has already delayed the factory’s launch to late 2026. However, reputational damage may deepen as the Brazil sues BYD for human trafficking and slavery case draws global attention, particularly amid rising scrutiny of labor practices in critical mineral and green tech supply chains.

The Metalnomist Commentary

The BYD labor abuse case in Brazil underscores the hidden risks embedded in global clean energy supply chains. For a company at the forefront of the EV revolution, such allegations raise serious ESG and compliance concerns—especially as nations tighten enforcement on labor-linked due diligence in sourcing and industrial partnerships.

GM to Invest $888M in NY Engine Plant for Sixth-Generation V-8 Production

General Motors

Tonawanda Facility to Support Internal Combustion and EV Manufacturing

GM to invest $888M in NY engine plant to produce its sixth-generation V-8 engines, reaffirming its commitment to high-performance internal combustion powertrains even amid its EV transition. The investment, directed to the Tonawanda Propulsion Plant in Buffalo, New York, is GM’s largest-ever commitment to an engine facility. Production of the new V-8 engines will begin in 2027, while the plant will continue assembling fifth-generation models in the interim.

This investment will fund the installation of new machinery, tools, and production equipment to support GM’s latest truck and SUV engine architecture. The sixth-generation V-8s are expected to power future full-size pickups and sport utility vehicles, key revenue drivers for the automaker. As GM invests $888M in NY engine plant, it underscores a dual-track strategy to sustain its internal combustion portfolio alongside electrification.

Prior EV Commitment Enhances Tonawanda's Strategic Role

The Tonawanda plant is already part of GM’s EV supply chain strategy. In 2023, GM committed $300 million to produce electric drive units at the facility through a deal with the United Auto Workers (UAW). With the new V-8 investment, Tonawanda becomes a hybrid production site, supporting both traditional and electric powertrain technologies. This dual-capability model reflects GM’s effort to balance market demand during a gradual transition from ICE to EV platforms.

As GM invests $888M in NY engine plant, it signals that the company sees continued demand for gasoline-powered vehicles—particularly in North America—while maintaining flexibility to scale EV output.

The Metalnomist Commentary

GM’s record-setting investment at Tonawanda highlights a pragmatic approach to powertrain diversification. By enhancing its ICE engine capabilities while scaling EV drive unit output, GM is hedging against market volatility and regulatory shifts in the U.S. automotive sector.

Mexican GDP Outlook Dims as US Tariffs Impact Economic Growth Forecasts

Mexico

Mexican GDP outlook deteriorated significantly as the Institute of Finance Executives (IMEF) lowered 2025 growth forecasts for the fourth consecutive month due to escalating US tariff impacts. The Mexican GDP outlook now projects just 0.1% growth in 2025, down from 0.2% in April, 0.6% in March, and 1% in February, while 37% of survey respondents forecast economic contraction as trade restrictions increasingly affect Mexico's export-dependent economy.

Trade Disruptions Compound Economic Headwinds

Mexican GDP outlook reflects mounting challenges as effective tariff rates on Mexican exports exceed those imposed on Canada, Brazil, India, Vietnam, and other trading partners despite some US exemptions for goods meeting regional content requirements. IMEF economic studies director Victor Herrera warned that May trade data will likely reveal sharp declines in Mexican exports to the United States. Additional disruptions from screwworm outbreaks in cattle led to port closures and curtailed beef exports worth $1.3 billion annually.

Meanwhile, automotive sector concerns intensify as major manufacturers consider production relocations or scale-backs following Stellantis's confirmed plans to shift operations to the US. Reports suggest Nissan may close one or both Mexican plants, prompting Mexico to dispatch deputy economy minister Luis Rosendo Gutierrez to Tokyo for discussions with Mazda, Nissan, Toyota, and Honda executives. These developments threaten a cornerstone industry of Mexico's manufacturing economy.

Employment and Investment Climate Face Structural Pressures

However, employment forecasts reflect broader economic pessimism as IMEF reduced 2025 job creation projections to 200,000 from 220,000 in April. Mexico's social security administration reported only 43,500 new jobs over the past 12 months ending May 5th, highlighting labor market weakness. Constitutional reform uncertainty and potential US taxes on remittances create additional investment climate risks beyond trade policy challenges.

Therefore, monetary policy adjustments attempt to support economic activity despite inflation concerns. Mexico's central bank cut benchmark interest rates by 50 basis points to 9% on May 8th, marking the third reduction in 2025. IMEF projects year-end rates at 7.75%, down from previous 8% forecasts, while maintaining 2025 inflation expectations at 3.8% despite April's 3.93% consumer price index reading.

Currency Stability Masks Underlying Economic Vulnerabilities

Furthermore, peso exchange rate projections indicate modest weakening to Ps20.80/$1 by year-end compared to April's Ps20.90/$1 forecast. The peso recently strengthened to Ps19.34/$1, though Herrera attributed this movement to dollar weakness rather than peso strength. Currency stability provides limited comfort given underlying economic fundamentals deterioration across trade, employment, and investment indicators.

As a result, Mexico faces a challenging economic environment where tariff policies increasingly outweigh traditional competitive advantages in manufacturing and proximity to US markets. The confluence of trade restrictions, sectoral disruptions, and political uncertainties creates headwinds that monetary policy accommodation may struggle to offset entirely through 2025.

The Metalnomist Commentary

Mexico's rapidly deteriorating GDP outlook exemplifies how trade policy shifts can fundamentally reshape economic trajectories for manufacturing-dependent economies, particularly those integrated into North American supply chains. The automotive sector's potential restructuring represents a critical inflection point for Mexico's industrial base, while the increasing tariff burden highlights the vulnerability of export-oriented economies to protectionist policy changes in major destination markets.

Russia EU CBAM Dispute Challenges Carbon Border Mechanism at WTO

Russia, EU CBAM

Russia EU CBAM dispute escalated to formal World Trade Organisation proceedings as Moscow challenges the European Union's carbon border adjustment mechanism. The Russia EU CBAM dispute claims the carbon pricing system violates multiple WTO agreements including the General Agreement on Tariffs and Trade 1994, potentially disrupting global metals trade and climate policy implementation across aluminum, steel, and iron sectors.

WTO Challenge Targets Multiple Trade Agreement Violations

Russia EU CBAM dispute allegations encompass comprehensive trade agreement breaches affecting critical industrial sectors. Moscow claims the carbon border mechanism violates the Agreement on Import Licensing Procedures and the Agreement on Subsidies and Countervailing Measures. Additionally, Russia targets specific WTO accession protocols for Bulgaria, Croatia, Estonia, Latvia, and Lithuania, broadening the dispute's scope beyond core EU institutions.

Meanwhile, the CBAM implementation schedule spans 2026-34 with carbon pricing applied to goods imported from aluminum, cement, iron, steel, electricity, fertilizers, ammonia, and hydrogen sectors. This phased approach affects major Russian export commodities, particularly metals and fertilizers that constitute significant portions of bilateral trade with European markets.

Export Subsidy Claims Challenge Free Allocation Calculations

However, Russia's primary objection centers on alleged "prohibited subsidies contingent upon export performance" within CBAM's design framework. Although the mechanism lacks specific provisions for EU export sectors, Russia considers free allocation calculations that include export values as discriminatory trade practices. This interpretation challenges fundamental CBAM architecture and carbon pricing methodologies.

Therefore, the dispute highlights tensions between climate policy implementation and international trade law compliance. Russia argues that EU domestic industry receives preferential treatment through free allocation systems while foreign competitors face carbon pricing burdens. This asymmetry allegedly creates unfair competitive advantages violating WTO non-discrimination principles.

Consultation Process Shapes Future Climate Trade Policy

Furthermore, mandatory 60-day consultations between Russia, the EU, and member states will determine dispute resolution pathways. If negotiations fail, Russia can request WTO panel adjudication, potentially creating precedent-setting rulings on carbon border mechanisms. The outcome influences global climate policy implementation and international trade law interpretation.

As a result, the Russia EU CBAM dispute represents broader conflicts between environmental regulations and trade liberalization principles. Major economies worldwide monitor these proceedings as they develop similar carbon border mechanisms. The WTO ruling could significantly impact future climate policy design and international carbon pricing coordination.

The Metalnomist Commentary

The Russia-EU CBAM dispute represents a critical test case for international trade law's intersection with climate policy, potentially establishing precedents that influence global carbon border mechanism development. While Russia's challenge primarily reflects economic interests in preserving metals and fertilizer export competitiveness, the dispute's resolution will significantly shape how nations balance environmental objectives with WTO compliance requirements.

CBAM to Add 15-25% Surcharge to EU Steel Import Costs Starting January 2026

EU Steel

The European Union's Carbon Border Adjustment Mechanism (CBAM) will impose 15-25% surcharges on CBAM steel import costs when full implementation begins January 1, 2026, according to Euranimi analysis. The European Association of Non-Integrated Metal Importers & Distributors warned that these additional costs will vary significantly depending on product type and country of origin. Steel importers face substantial cost increases as CBAM steel import costs rise through carbon pricing mechanisms designed to protect EU domestic steel producers from unfair competition.

CBAM Calculation Formula Creates Variable Cost Impact Across Origins

The CBAM surcharge calculation uses a specific formula measuring the difference between embedded emissions and 97.5% of EU benchmark standards multiplied by emissions trading system (ETS) pricing. This methodology ensures that steel imports face carbon costs comparable to EU domestic production under the emissions trading system. Meanwhile, Euranimi recommends that suppliers introduce separate CBAM surcharge lines in commercial offers, similar to existing alloy surcharge practices in steel trading.

Market participants anticipate significant import pattern changes as CBAM implementation approaches, with potential steel import surges in the fourth quarter of 2025. Importers may accelerate purchases before January 2026 to avoid initial CBAM steel import costs and associated compliance complexities. However, steel imports could decline sharply after January as buyers adjust to higher costs and new administrative requirements.

Implementation Timeline Creates Uncertainty for Steel Trade

Euranimi collaborates with the European Commission to develop "manageable" CBAM implementation procedures that minimize trade disruption while achieving environmental objectives. The association requests June publication of temporary benchmarks and default values for 2026 imports to provide market clarity. As a result, transitional benchmarks should be less strict initially while default values require reasonable levels to manage compliance costs.

Steel importers face significant uncertainty because verified emission data from non-EU suppliers won't be available until late 2026 at the earliest. Default values will play crucial roles in managing CBAM steel import costs during this transition period without verified supplier data. Therefore, appropriate default value settings prevent excessive financial exposure from unforeseen corrections and compliance adjustments.

The CBAM implementation represents a fundamental shift in global steel trade dynamics, creating competitive advantages for low-carbon steel producers while penalizing high-emission suppliers. European steel importers must adapt business models to incorporate carbon costs into pricing strategies and supplier selection processes. Consequently, CBAM steel import costs will reshape trade flows and encourage global steel industry decarbonization efforts through market mechanisms.

The Metalnomist Commentary

The 15-25% CBAM surcharge on steel imports marks a pivotal moment in global trade policy, potentially reshaping steel supply chains as importers seek lower-carbon suppliers to minimize carbon border costs. This mechanism could accelerate global steel industry decarbonization by creating economic incentives for cleaner production technologies, though it also risks disrupting established trade relationships and creating competitive disadvantages for developing country steel producers lacking access to clean technology.

US Launches Section 232 Probe Into Aircraft and Engine Imports

U.S. Aircraft

Trade Investigation Targets National Security and Import Reliance

The U.S. government has launched a Section 232 investigation into imports of commercial aircraft and engines, citing national security concerns. The Focus Keyphrase "aircraft and engine imports" lies at the heart of this probe, which could lead to heightened tariffs on critical aerospace products and disrupt long-standing free trade norms.

The Commerce Department’s Bureau of Industry and Security (BIS) is evaluating the impact of foreign government subsidies and predatory trade practices on U.S. aerospace competitiveness. It is also reviewing whether increased domestic capacity could reduce the nation’s dependence on imports. The investigation, quietly initiated on May 1 and made public on May 9, grants stakeholders a three-week comment period to respond.

Tariff Tensions Add Pressure to Global Aerospace Supply Chains

This probe adds to growing friction in the global aviation industry, which had largely operated under the 1979 Agreement on Trade in Civil Aircraft. That agreement enabled decades of tariff-free trade in commercial aviation components. However, the Trump administration’s push for reciprocal tariffs disrupted this regime, and although some duties have been delayed until July, a 10% tariff remains on most aircraft imports.

In parallel, the U.S. and UK recently reached a trade agreement allowing Rolls-Royce’s Trent 1000 engines—used in Boeing’s 787 Dreamliner—to enter the U.S. duty-free. Still, U.S. firms like Boeing, GE Aerospace, and RTX are urging a return to “zero-for-zero” tariffs, emphasizing America’s $75 billion aerospace trade surplus.

EU Considers Retaliatory Measures Against US Aerospace Exports

In response to the escalating tensions, the European Union is preparing countermeasures. On May 7, the European Commission opened public consultations on potential tariffs targeting €95 billion in U.S. goods, including large commercial aircraft. If enacted, these measures would directly impact Boeing deliveries to EU-based carriers and leasing firms.

The inclusion of aircraft under CN code 88024 signals the EU’s intent to mirror U.S. trade policy shifts. While Boeing has not commented publicly, industry leaders are watching closely, as retaliatory tariffs could disrupt delivery schedules, inflame transatlantic relations, and reshape global supply chains.

The Metalnomist Commentary

The Section 232 investigation into aircraft and engine imports marks a pivotal moment in U.S. aerospace trade policy. As governments reassess industrial self-sufficiency, the balance between national security and global cooperation becomes increasingly fragile. This shift may signal a new era of strategic protectionism in advanced manufacturing sectors.

Norwegian Sovereign Wealth Fund Pressures Miners on Environmental Performance

Norwegian fund

Norges Bank to engage Rio Tinto and South32 over Amazon bauxite mine

Norwegian wealth fund mining engagement is intensifying as the world’s largest sovereign wealth fund targets environmental risks tied to major mining firms. Norges Bank Investment Management (NBIM), which oversees Norway’s $1.8 trillion fund, announced it will engage Rio Tinto and South32 over serious environmental concerns related to their joint bauxite mining operations in the Amazon.

Environmental concerns prompt active ownership, not exclusion

While the fund’s ethics council recommended exclusion, NBIM chose instead to pursue active ownership over the next 5–10 years. The companies’ involvement in environmentally sensitive mining areas poses “an unacceptable risk” of severe damage, the fund noted. This shift signals a more interventionist strategy focused on influencing corporate behavior rather than immediate divestment.

Meanwhile, the fund reversed its 2020 exclusion of German utility RWE, citing credible progress on coal phase-out and renewable energy expansion. RWE will now remain under observation rather than full exclusion.

Climate alignment remains a key investment mandate

Norway’s finance ministry mandates that all fund investments align with the Paris Agreement’s net-zero goals. The fund reported a 30% reduction in financed emissions from 2017 to 2024 and has excluded or monitored nearly 200 companies, many tied to coal-related activities. The ongoing Norwegian wealth fund mining engagement reflects a broader climate-risk approach to portfolio stewardship.

The Metalnomist Commentary

Norway’s sovereign fund is signaling that climate accountability is no longer optional for global miners. By leveraging shareholder engagement instead of divestment, the fund aims to enforce ESG performance in high-impact sectors without relinquishing influence over corporate governance.

Indonesia Solar Energy Transition Gains Momentum with $60mn JETP Support

PLN Indonesia Power

Floating Solar Project in Java Advances Despite U.S. JETP Withdrawal

Indonesia’s solar energy transition has taken a significant step forward, with $60 million in new funding for the Saguling floating solar project. The support comes under the Just Energy Transition Partnership (JETP) and involves joint development by PLN Indonesia Power and Saudi-listed Acwa Power. Despite U.S. withdrawal from the JETP earlier in 2025, international backing continues, reinforcing Indonesia’s commitment to phasing out coal.

Multilateral Support Drives Renewable Investment

The Saguling solar project will receive financing from DEG (Germany), Proparco (France), and Standard Chartered, as announced by GFANZ. This adds to the $1.2 billion Indonesia has already secured under the $20 billion JETP framework. France has played a major role, contributing over €450 million ($511 million) in energy transition funding. According to GFANZ, this investment shows strong appetite among both public and private actors to support Indonesia’s solar energy transition.

Coal Dominates, But Solar Begins to Scale

Indonesia still relies on coal for over 61% of electricity, while solar and wind contribute only 0.2%. However, Indonesia holds solar potential of 3,295GW, and projects like Saguling are vital for unlocking that capacity. The Saguling floating solar farm will add 92MWp and reduce carbon emissions by 63,100 t/year. It will increase Indonesia’s solar share by 13%, with renewables projected to rise to 21% of the energy mix by 2030, and 41% by 2040, according to Ember.

The Metalnomist Commentary

Indonesia’s solar energy transition is proving resilient, even amid shifting geopolitical support. The latest JETP-backed investment reaffirms that international climate finance remains a critical pillar in Asia’s coal phase-out.

India Proposes GEI Targets Under Carbon Credit Trading Scheme

India

India’s environment ministry has launched consultations on new emission rules tied to its carbon credit trading scheme. The draft, titled Greenhouse Gases Emission Intensity Target Rules, 2025, sets GEI targets for 282 companies across four sectors. The move is aimed at helping India meet its nationally determined contribution (NDC) under the Paris Agreement.

The India carbon credit trading scheme allows companies to meet targets by reducing emissions or purchasing carbon credit certificates. Companies that outperform can bank or sell excess credits, while underperformers must buy credits at double the average traded carbon price. The Bureau of Energy Efficiency, under the power ministry, will calculate pricing based on trading activity.

Cement and Aluminium Sectors Face Highest Compliance Pressure

The draft rules impact companies from the cement, aluminium, chlor-alkali, and pulp and paper sectors. Cement dominates the list, with 186 of the 282 entities covered. The aluminium industry also features prominently, with 13 firms required to report emissions under the proposed rules. These targets apply for two compliance periods—2025–26 and 2026–27.

Companies have until mid-June 2025 to comment on the proposed GEI framework. They must either cut emissions or offset them through credits within India’s regulated carbon market. Failure to comply will result in financial penalties tied to average carbon credit prices. This mechanism could drive new investment in low-carbon technology and sustainable manufacturing practices.

India’s Domestic Carbon Market Gains Policy Momentum

The India carbon credit trading scheme has evolved rapidly since its introduction in the Energy Conservation Bill of 2022. In 2023, the government rolled out a formal Carbon Credits Trading Scheme (CCTS), followed by the Detailed Procedure for Compliance Mechanism in 2024. The new GEI targets represent a significant step toward operationalizing India’s voluntary-to-compliance carbon market transition.

By linking emission reduction to a monetized credit system, India aims to create financial incentives for industrial decarbonization. This initiative positions India as a leader among emerging markets developing domestic carbon pricing frameworks.

The Metalnomist Commentary

India’s carbon market now enters a pivotal stage with enforceable GEI targets and structured credit penalties. For energy-intensive sectors like aluminium and cement, this could reshape investment flows and ESG compliance strategies. Market participants should monitor evolving credit pricing mechanisms and sector-specific caps.

Israel-Iran Escalation Raises Fears for Oil Supply Disruption

Israel-Iran War

Missile Strikes Spark Fears of Regional Energy Crisis

Israel has launched multiple strikes on Iran's nuclear sites, prompting immediate retaliation from Tehran. Iran responded with missile barrages targeting Tel Aviv, marking the most severe escalation in the region in years. While oil infrastructure remains untouched for now, market analysts are alarmed by the potential spread of conflict across oil-producing territories.

Meanwhile, Israel has suspended production at two major natural gas fields and halted pipeline exports to Egypt. Oil traders reacted swiftly to the escalation, pushing Nymex WTI crude prices up 8% to $73/bl. Market participants fear that further Israeli action may extend beyond nuclear sites and into Iran's oil fields, significantly destabilizing the global oil market.

Iran’s Islamic Revolutionary Guards Corps vowed a "crushing response" after Israel's attacks decimated sections of Iran's air defenses and military command. Reports indicate damage to facilities near Isfahan. The use of ballistic missiles by Iran, which are harder to intercept than drones, has heightened global military and energy market concerns.

U.S. and Allies Brace for Broader Conflict Spillover

The U.S. National Security Council, led by President Donald Trump, convened to discuss possible measures in response to the oil price surge. U.S. forces in the Middle East are now on high alert. Former officials worry that a lack of diplomatic infrastructure could limit Washington’s ability to contain the crisis.

According to former U.S. assistant secretary of state Barbara Leaf, the conflict could spread to Iraq, the Gulf, and Egypt. She also expressed concern that Israel might pursue regime change in Iran, a move that could further destabilize the region.

The immediate leadership losses in Iran, including top military commanders, suggest the Israeli strikes were highly strategic. However, the long-term implications remain uncertain. As tensions intensify, energy markets will likely remain volatile, with risk premiums baked into every barrel traded.

The Metalnomist Commentary

The strikes between Israel and Iran mark a turning point in geopolitical risk for energy markets. The fact that oil infrastructure has been spared — for now — is cold comfort to traders and governments bracing for wider escalation. A prolonged conflict could drastically alter global oil flows, supply chains, and defense-related industrial materials.

EU Parliament Approves Delay to Climate Policy Directives

EU Climate

Delays to CSRD and CSDDD Gain Parliamentary Backing

The European Parliament voted to delay the enforcement of two key sustainability frameworks: the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD). These rules were designed to strengthen corporate accountability for environmental and human rights impacts across global supply chains. However, pushback from industry groups and some member states prompted a reassessment. 

The CSRD, which took effect in 2024, required extensive emissions and energy data disclosures. The CSDDD would mandate climate risk assessments and mitigation plans for companies operating in the EU, particularly in high-impact sectors like manufacturing and resource extraction. This week's vote supports the European Commission’s proposal—part of a broader “omnibus” legislative package—to delay these mandates, providing companies with more time to prepare for compliance. Final approval is still required from the European Council, which already signaled agreement in a position adopted on March 26.

Revised Timeline Shifts Climate Compliance to Late 2020s

Under the revised plan, EU member states will have until July 2027 to incorporate CSDDD provisions into their national laws. From 2028 onward, large companies with more than 1,000 employees and €450 million in turnover will begin reporting, with smaller businesses following in 2029. The CSRD timeline is also affected. Originally requiring companies with over 250 employees to start reporting in 2026, the new proposal shifts this to 2028 for large firms and 2029 for small and medium-sized enterprises (SMEs). This staggered approach is intended to reduce administrative burdens and align reporting cycles across jurisdictions, especially as firms navigate post-pandemic financial recovery and ongoing supply chain volatility.

Scope of Reporting Narrowed as Policymakers Weigh Burden

Alongside the delay, the European Commission proposed trimming the scope of both directives to avoid over-regulation. If approved, the CSRD would apply to just 20% of companies initially targeted, dramatically reducing the volume of required disclosures. Additionally, only verified mechanisms—such as Guarantees of Origin (GoOs) and long-term Power Purchase Agreements (PPAs)—will count toward companies’ renewable energy usage.

Critics argue this weakens the policy’s original ambition. However, supporters believe it makes the directive more realistic and less disruptive to European industry, especially SMEs and manufacturers already facing high energy costs.

The Metalnomist Commentary

The EU’s decision reflects a growing tension between climate ambition and economic pragmatism. While regulatory delays may help companies stabilize after recent economic shocks, they also risk slowing investment in clean technologies. For sectors like metals and industrial materials—where long-term capital planning is essential—clarity and consistency in ESG policy timelines remain critical.

EU Defence Spending to Drive Demand for Specialty Metals

Metals

Rising military investments in Europe are set to reshape demand for critical metals like titanium, niobium, and cobalt.

Defence Sector Targets Strategic Metals

European defence spending is surging under the EU’s Readiness 2030 plan, aiming to boost military capabilities. The plan, also known as ReArm Europe, will mobilise up to €800bn ($865bn), targeting air defence and military mobility. As a result, this initiative will significantly increase demand for key metals used in advanced defence systems. NATO’s critical materials list includes gallium, tungsten, aluminium, graphite, and cobalt, all vital to weapons, drones, and aircraft. Meanwhile, demand for germanium and columbite is already rising due to increased procurement for infrared and missile applications.

Supply Chain Constraints and Geopolitical Risks Loom

However, meeting demand will require navigating complex global supply chains and market disruptions. China’s export restrictions on metals like antimony and bismuth have sent prices soaring, causing volatility across EU markets. At the same time, titanium supply gaps highlight Europe’s industrial weaknesses in strategic stockpiling and processing capacity. Despite these hurdles, market sentiment is shifting, and banks are more open to financing metals tied to defence priorities. Germany is exploring ways to adapt automotive manufacturing for defence needs, showcasing flexibility amid rising urgency.

Overreliance and Strategic Vulnerability

Europe remains dependent on military imports from the US, Israel, and South Korea despite its funding increase. Titanium stands out as a weak link, with Europe lacking sponge production and relying on external sources for critical parts. As defence needs rise, nations are seeking ways to reduce dependence and reinforce self-sufficiency in essential metal supply chains.

The Metalnomist Commentary

Europe's shift toward a militarised industrial policy places specialty metals at the core of security. For suppliers and investors, understanding these structural shifts is vital. Strategic metal supply is no longer just economic—it’s geopolitical.

EU Selects 47 Strategic Raw Materials Projects Under CRMA

EU

New Projects Aim to Boost European Raw Material Independence

The European Commission has announced 47 strategic raw materials projects across 13 EU countries under the Critical Raw Materials Act. These initiatives are part of the EU’s push to reduce foreign dependence and strengthen domestic supply chains by 2030.

The selected projects span extraction, processing, recycling, and substitution of key metals like lithium, nickel, and graphite. In total, they are expected to require €22.5 billion ($24.3 billion) in capital investment, with an accelerated permitting timeline.

Lithium and Nickel Dominate Strategic Focus

Among the 47 projects, 22 are focused on lithium, 12 on nickel, and 10 on cobalt—metals vital for green energy transitions. Projects also cover graphite, manganese, tungsten, and magnesium, all critical for battery, defense, and digital industries. The EU has set targets to meet 10% of its raw material extraction and 40% of processing needs internally by 2030. Savannah Resources’ Barroso lithium project in Portugal is among the featured initiatives with strategic classification status.

Stockpiling and Geopolitical Implications

The Commission is now gathering data on national stockpiles to assess safe storage levels for critical materials across the bloc. An EU raw materials center may coordinate stockpiling efforts starting next year, aligning with global practices in the US and China.

Given global geopolitical shifts, including US leadership changes, the EU is intensifying its focus on material security strategies. Officials stress that European clean tech independence should not lead to new forms of dependency—especially on China.

The Metalnomist Commentary

The EU's selection of 47 strategic raw materials projects signals a shift toward regional autonomy in critical mineral supply chains. If executed on time, the CRMA framework could reshape Europe's role in the global energy and defense materials landscape. However, execution speed and political cohesion across member states will ultimately determine the strategy’s success.

China’s Cobalt Prices Surge Amid DRC Feedstock Supply Suspension

DRC Cobalt

Extended Supply Halt from DRC Fuels Price Rally in Chinese Cobalt Market

Cobalt prices in China are set to continue their upward trend as supply disruptions from the Democratic Republic of the Congo (DRC) persist. Market participants anticipate that the rally will hold until the DRC government lifts its suspension on cobalt feedstock exports.

DRC Suspension Puts Pressure on Global Supply

Most traders expect Chinese cobalt metal prices to climb toward ¥300/kg under current supply conditions. “We may hit the ¥300/kg level soon,” said a Chinese trader. “But whether prices move beyond that will depend entirely on how long the DRC suspension continues.”

Despite stable production at DRC mines, the export restriction has reduced global feedstock availability. “If the suspension continues for four months, inventories outside the DRC could be exhausted,” warned a second source. Companies with lower inventory buffers may face serious operational risks.

China Relies Heavily on DRC for Cobalt Imports

China imported approximately 188,560 tonnes of cobalt metal equivalent in intermediate forms in 2024 — a 65% increase from 2023. Notably, 99% of these imports originated from the DRC. Key suppliers include CMOC and Glencore, which operate major copper-cobalt mines in the African nation.

As China remains the world’s largest cobalt refining hub, any prolonged supply disruption from the DRC could have far-reaching effects on the battery and electronics industries.

Brazil’s Cop 30 Climate Agenda Faces Criticism Over Silence on Fossil Fuel Phase-Out

Ibama

Activists praise climate finance ambition but question Brazil’s commitment as oil exploration persists.

Brazil’s ambitions to make UN Cop 30 a landmark event for climate action received mixed reactions this week after summit president Andre Correa do Lago released a letter outlining the summit’s goals. While the letter emphasizes a dramatic increase in climate financing—from $300 billion to $1.3 trillion per year by 2035, critics argue it fails to address fossil fuels, the leading driver of global warming.

Activists Applaud Climate Finance Push, Slam Fossil Fuel Omission

Climate scientist Karin Bruning, affiliated with the University of Heidelberg and MIT, welcomed the focus on cooperation but warned that “Brazil must pull its own weight.” She criticized the government’s ongoing support for fossil fuel exploration, especially in Brazil’s equatorial margin, a sensitive region near a freshwater barrier reef.

Bruning noted that Brazil, rich in renewable energy, should avoid returning to “past solutions” such as oil drilling. The Foz do Amazonas basin, holding an estimated 10 billion barrels of crude, has been at the center of controversy. State-run Petrobras has repeatedly sought to explore the area but faced consistent licensing blocks from Ibama, Brazil’s environmental agency.

Think Tanks Raise Red Flags Over Fossil Fuel Silence

While Brazil’s Observatorio do Clima praised the letter for giving Paris Agreement negotiations to credible experts, it criticized the lack of a clear fossil fuel phase-out strategy. The organization warned that ignoring “the elephant in the room” undercuts Brazil’s global credibility.

Think tank E3G’s Kaysie Brown acknowledged that the letter does recognize the urgency of climate action, especially regarding funding for developing countries. However, Brazil’s resistance to align fully with the first global stocktake (GST) and its implementation roadmap, as agreed at Cop 29 in Baku, leaves open questions about true commitment.

As Cop 30 nears, pressure will grow on Brazil to clarify its stance on fossil fuels and prove that its climate diplomacy matches its domestic policy direction.

Japan’s Imports of Russian Palladium Rise for First Time Since Ukraine Invasion

Russian Palladium

2024 Sees 22% Year-on-Year Growth Despite Lingering Uncertainty

Japan’s palladium imports from Russia increased in 2024 for the first time since the start of the Russia-Ukraine war in 2022, signaling a potential shift in trade dynamics. According to Japan’s Finance Ministry, total imports reached 12 tonnes, up 22% from the previous year, breaking a six-year streak of decline.

Despite this rebound, it remains uncertain whether Russian deliveries will return to pre-invasion levels of 17–20 tonnes per year. The modest growth comes amid ongoing geopolitical tensions and evolving global trade strategies.

Import Diversification Efforts Appear Short-Lived

Following the 2022 invasion of Ukraine, Japan dramatically cut Russian palladium imports, which fell to 14.5t in 2022 (−19%) and then further to 9.9t in 2023 (−32%). Although palladium was not subject to direct sanctions, Japanese firms voluntarily reduced purchases over stakeholder concerns.

In response, Japan diversified supply in 2022, doubling imports from the U.S. (6.4t) and Italy (1t), while Taiwan and South Korea also saw sharp increases. However, these gains proved short-lived: in 2023, U.S. imports fell by over 50% to 2.8t, Taiwan’s dropped to 56kg, and South Korea’s dropped to 256kg, down 75% from 2022.

Since June 2024, Russian palladium shipments to Japan have exceeded 1 tonne monthly for seven consecutive months, suggesting tentative signs of recovery—but not yet a strong trend.

South Africa Remains Japan’s Dominant Supplier

While Russian supply fluctuates, Japan continues to lean heavily on South Africa, which delivered 23 tonnes in 2024—up 1.7% year-on-year. South Africa now accounts for 58% of Japan’s total palladium imports, marking the third consecutive year above 50%.

Analysts caution that despite recent increases, Japanese imports of Russian palladium are still well below historical averages. Whether a long-term recovery is underway will depend on market signals, policy sentiment, and the global palladium trade environment in 2025 and beyond.