LONDON (ICIS)–The Netherlands court ruling mandating that Shell cut its total carbon emissions by 45% by 2030 has been thrown out, the oil and gas major said on Tuesday. The original 2021 verdict had mandated that Shell’s emissions reduction targets also apply to its scope 3 emissions, which relate to the CO2 generated by customers downstream of a business from the use of its products. At the time of the original case, Shell has pledged to cut emissions by 50% compared to 2016 levels by 2030, but that target only referred to scope 1 and 2 emissions. Th company shifted its tax base to the UK and dropped the “Royal Dutch” from its name shortly after the original verdict. The Netherlands’ Court of Appeal in the Hague overturned the ruling on Tuesday. In a written statement on the verdict, the court stated that the decision to overturn the original verdict due to “insufficient consensus in climate science on a specific reduction percentage to which an individual company like Shell should adhere.” “The court was unable to establish that the social standard of care entails an obligation for Shell to reduce its CO2 emissions by 45%, or some other percentage,” the court added. The original case was brought by Dutch environmental group Milieudefensie. The push for Shell to cut scope 3 emissions by 2030 would be unlikely to have a substantial impact on overall national emissions-reduction, the court added. “Shell could meet that obligation by ceasing to trade in the fuels it purchases from third parties. Other companies would then take over that trade. This would consequently not result in a reduction in CO2 emissions,” the court said. Shell estimates that by 2023 it had achieved 60% of its target to cut scope 1 and 2 emissions in half by 2030. Thumbnail image: The Hague Court of Appeal rules on the Shell emissions-reduction case on 12 November (Source: Hollandse Hoogte/Shutterstock)

LONDON (ICIS)–Germany’s economic outlook grew more pessimistic in November following the collapse of the country’s coalition government and Donald Trump’s victory in the US election. An assessment of the current economic situation in Europe’s largest chemicals producer was also bleaker, economic research group ZEW said on Tuesday. Its November, economic sentiment indicator fell by 5.7 points from the previous month to 7.4 points. ZEW’s indicator for the current situation was also down, by 4.5 points to -91.4 points. “Economic expectations for Germany have been overshadowed by Trump’s victory and the collapse of the German government coalition,” ZEW president Achim Wambach said in a statement. “Economic sentiment has declined – and the outcome of the US presidential election is likely to be the main reason for this. The fact that economic expectations for the USA are clearly rising, while economic sentiment for China and the eurozone is falling, supports this view,” Wambach added. The ZEW president also pointed to some optimism with expectations of improving economic prospects for Germany due to upcoming snap elections after the collapse of its coalition government on 7 November. For the eurozone, the group’s economic sentiment indicator fell by 7.6 points to 12.5 points, while the current situation index remained in negative territory at -43.8 points, down by 3.0 points from the previous month.

SINGAPORE (ICIS)–Japan’s Prime Minister Shigeru Ishiba will remain in his post following a snap election, despite the setback suffered by his Liberal Democratic Party, which lost majority control of parliament in October. Support for semiconductors meant to capitalize on demand, provide cushion against geopolitical shocks Japan Oct consumer prices up 1.8% year on year Central bank may hike interest rate to meet inflation target Ishiba secured 221 votes of the 465-seat lower house, winning the 11 November elections to remain as Japan’s head of government. He won against former Prime Minister Yoshihiko Noda who is the leader of the opposition Constitutional Democratic Party. Upon winning, Ishiba pledged more than yen (Y) 10 trillion ($65 billion) in support of Japan’s semiconductor and artificial intelligence (AI) sector by fiscal year 2030 amid geopolitical risks and trade shocks, notably between the US and China. Having a strong domestic semiconductor industry would loosen Japan’s reliance on imports and meet rising demand overseas. The plan includes proposed legislations to support mass production of next-generation chips, with beneficiaries including Japanese semiconductor company Rapidus, headquartered in the northern Japanese city of Hokkaido, according to Reuters. In 2023, Japan had unveiled a Y2 trillion plan to support its domestic chip industry as the AI boom was fueling demand. POLICY INTEREST RATE HIKE POSSIBLE Meanwhile, Ishiba also unveiled cash handouts to help low-income households with disaster preparedness and deal with higher prices. Household spending in October dropped by 1.1% year on year, according to data from the Ministry of Internal Affairs. Core consumer prices for the month increased by 1.8% over the same period, official data showed. Eyes will be on the Bank of Japan (BoJ) meeting on 18 and 19 December, with an interest rate hike possible amid strong downward pressure on the Japanese yen. At 08:00 GMT, the yen was trading at Y153.83 against the US dollar on Tuesday. The recent strength of the US dollar followed the re-election of Donald Trump as US president. Trump is pushing for imposition of more tariffs on foreign goods entering the world’s biggest economy. A weaker yen supports exports but discourages imports. The BoJ is expected to hike its policy rates from 0.25%, in line with its target to keep inflation at 2% for 2024, Japan securities firm Nomura in a research note on 8 November. “We believe… events will pave the way to a virtuous cycle between wages and prices, leading to the BoJ hiking the policy rate in December 2024,” Nomura said. Focus article by Jonathan Yee ($1 = Y153.83)

MUMBAI (ICIS)–A fire that erupted at Indian Oil Corp’s (IOC) Gujarat refinery in western India on 11 November has killed two people as of Tuesday morning, according to media reports. The blaze occurred at around 3:30pm local time (10:00 GMT) on 11 November at a benzene storage tank at the refinery, the company said in a statement. A blast at the tank caused the fire, which spread to two adjoining storage tanks, according to local police inspector A B Mori. A person injured in the fire died at the hospital, bringing the death toll to two, news daily Economic Times reported quoting police officials. A third injured person is currently undergoing treatment at a local hospital and is stable, they said. The fire raged overnight before being completely extinguished early Tuesday morning, a company source said. Following the fire, the refinery’s fluid circulation was halted and other storage tanks were being cooled down to prevent the blaze from spreading further, Vadodara police commissioner Narasimha Komar said during a media interaction on 11 November. Indian Oil is currently investigating the cause of the incident and will continue to monitor the situation, the company official said. (add details throughout) Initial reporting by Fanny Zhang

HOUSTON (ICIS)–Under US President Donald Trump, US chemical companies will unlikely see the full-blown tariffs that he has proposed during his campaign, but they will operate under a faster growing economy with higher inflation and interest rates that will settle at an elevated rate, economists at Oxford Economics said on Monday. Oxford is forecasting what it calls a limited Trump scenario, under which his administration will not fully adopt the policies he proposed during his campaign. Tariffs will be limited, targeted and phased in, while Congress will limit growth in the government deficit by restraining some of his tax cuts and spending measures. Oxford’s baseline scenario for 2025 does not change much because it is assuming that Trump will focus most of his first year in office on extending the tax cuts of his earlier administration, said Ryan Sweet, chief US economist for Oxford Economics. He made his comments during a presentation. The consultancy’s forecast for 2025 GDP is a tenth of a point higher versus its estimate in October, he said. Inflation will rise by a tenth of a point in 2025. Trump is inheriting a strong economy, so there is little risk of recession. In these initial years, the biggest effect on the US economy will be tax cuts, and these should increase growth in GDP, said Bernard Yaros, lead US economist for Oxford. After 2026, Oxford assumes Trump will adopt some of his immigration restrictions, and it is expecting GDP growth to fall below its earlier forecast. Stricter immigration policies will reduce the supply of labor and slow down the consumption of goods and services. LIMITED TARIFFSOxford expects the Trump administration will not impose the widespread tariffs it proposed during its campaign, which included 60% duties on Chinese imports and baseline tariffs of 10-20% on all imports. Yaros said these campaign proposals were likely negotiating tactics. Sweet expects that Trump will require Congress to pass some of his tariffs, and legislators will not pass such high rates, Sweet said. In other cases, advisors and trade representatives will restrain Trump. For China, Trump will likely impose tariffs of 25% on major categories, such as machinery, electronics and chemicals, Yaros said. For the EU, Canada and Mexico, Trump will likely impose very targeted tariffs on steel, aluminum, base metals and motor vehicles, Yaros said. For Canada and Mexico in particular, Trump will unlikely adopt measures that will threaten the United States-Mexico-Canada Agreement (USMCA), the trade agreement that his administration signed during his first term. That trade deal was one of the signature achievements of Trump’s administration, so he will not want to pursue policies that will threaten the upcoming renewal of that agreement, Yaros said. While the tariffs will be limited, they will still be a drag on the economy by nudging inflation higher, reducing real consumer income, tempering consumer spending and encouraging the misallocation of resources, Yaros said. LIMITED TARIFFS REDUCE RETALIATION RISK FOR CHEMSOxford’s scenario will limit the risk of countries imposing retaliatory tariffs on US exports. US chemical producers were vulnerable to such tariffs because they purposely added capacity for export over the years, particularly for polyethylene (PE) and polyvinyl chloride (PVC). The magnitude of these exports and the existence of a global glut in plastics and chemicals would make US chemical exports a likely target for retaliatory tariffs. On the import side, the US does have deficits in key commodity chemicals, such as benzene. Targeted tariffs could carve out exceptions for benzene was well as other chemicals in which the US has a trade deficit, such as methyl ethyl ketone (MEK) and melamine. Targeted tariffs will likely rule out duties on imports of oil. US refineries rely on imports of heavier grades of oil to optimize the operations of some of their units. US shale oil makes up nearly all of the growth in the nation’s crude production, and that oil is made up of light grades. Meanwhile, tariffs could shield some chemicals from competition, such as epoxy resins. CONGRESS MAY LIMIT GROWTH IN DEFICITOxford pointed out that some moderate Republicans could restrain some of Trump’s tax and spending proposals to limit growth in the government deficit, Yaros said. Other economists have expressed concerns that the US will issue larger amounts of government debt to fund the growing deficit. That would lead to a cascade effect that could ultimately increase rates for US mortgages, which would slow down the housing market and the plastics and chemicals connected to that market. Still, all of Oxford’s scenarios forecast a rise in the government deficit. SLOWER RATE CUTS BY FEDOxford expects Trump’s policies will be inflationary, which will prompt the Federal Reserve to slow down the pace of cuts on their benchmark federal funds rate. It expects the federal funds rate will settle at 3.125%, versus its forecast of 2.75% that was made in October. TRUMP WILL PRESERVE MOST RENEWABLE TAX CREDITSTrump will likely preserve most of the tax credits in the Inflation Reduction Act (IRA) because most of them benefitted states controlled by his party, the Republicans, Yaros said. These include tax credits on renewable fuels, renewable power, hydrogen and carbon capture. The exception will include incentives for electric vehicles (EV), which Trump had singled out during his campaign, Yaros said. OXFORD’S FORECASTThe following chart shows Oxford’s new baseline forecast and compares it with a scenario under which the policies of the previous administration are maintained. The following chart shows Oxford’s forecast that assumes Trump will fully adopt all of his campaign proposals. This is not the consultancy’s baseline forecast because it does not expect such a full-blown Trump scenario will happen. Thumbnail shows the US Capitol. Image by  photo by Lucky-photographer.

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 8 November. Braskem’s US sales could benefit from higher tariffs on automotive – CFOBraskem’s operations in the US could benefit if president-elect Donald Trump hikes import tariffs related to the automotive sector, the CFO at the Brazilian polymers major said this week. Brazil’s Braskem lobbying for ADDs on Chinese PVC to be extended – CFOBraskem is lobbying the Brazilian government to extend antidumping duties (ADDs) on China-produced polyvinyl chloride (PVC), the CFO at the Brazilian polymers major said on Thursday. INSIGHT: Braskem’s tariffs-infused optimism risks turning into complacencyManagement at Brazil’s polymers major Braskem sounded on Thursday the most optimistic in many quarters after the Brazilian government – which indirectly has a stake on the company – sharply increased import tariffs to protect, in large part, Braskem’s market share. Mexico’s Braskem Idesa completes 87% of ethane terminalConstruction of Braskem Idesa’s ethane import terminal in Mexico had reached around 87% of physical completion as of September, the Brazilian petrochemicals major said during its Q3 earnings release and conference call on Thursday. Brazil central bank hikes rates 50 bps to 11.25%, seeks ‘credible’ fiscal policyBrazil’s central bank monetary policy committee (Copom) voted unanimously late on Wednesday to hike the main interest rate benchmark, the Selic, by 50 basis points to 11.25%, to fend off rising inflation and a depreciating Brazilian real. Chile’s manufacturing output falls in September, overall activity flatChile’s manufacturing output fell in September by 1.1%, month on month, the central bank’s monthly report about economic activity said this week. Brazilian police indict 20 in Braskem mining disaster caseBrazil’s Federal Police (PF) have closed their probe into Braskem’s rock salt mining operations in Maceió, state of Alagoas, naming 20 individuals as suspects. MOVES: Braskem appoints Roberto Ramos as CEOBraskem is to appoint Roberto Ramos CEO, effective 1 December, the Brazilian petrochemicals major said on Monday. PRICINGLatAm PE international prices stable to soft on competitive US exportsInternational polyethylene (PE) prices were assessed as stable to soft across Latin American (LatAm) countries on the back of competitive US export offers. LatAm PP domestic prices fall in Chile, Colombia, Mexico tracking lower feedstock costs, weak demandDomestic polypropylene (PP) prices fell in Chile, Colombia and Mexico, tracking lower feedstock costs and weak demand. In other Latin American (LatAm) countries, prices were unchanged this week.

HOUSTON (ICIS)–Recently released data from the US International Trade Commission shows imports of polyethylene terephthalate (PET) scrap have reached record highs, following a slight dip the previous quarter. This is in spite of recent efforts from the US Customs and Border Patrol (CBP) to shift imports of recycled polyethylene terephthalate (R-PET) flake material away from the plastic scrap harmonized schedule (HS) code and towards the PET HS code. Imports and exports of other types of plastic scrap remain relatively steady quarter on quarter (QoQ), though Canada and Mexico continue to fade as trade partners for plastic scrap. US remains a net importer of plastic scrap, largely on PET scrap imports PET scrap imported into US increased 22% QoQ YTD PET scrap exports to Mexico surpass 2023 volumes IMPORTS SURGE, LARGELY DRIVEN BY PETQ3 2024 trade data from the US Census Bureau shows US imports of plastic scrap – noted by the HS code 3915 – have increased 12% QoQ quarter on quarter, and 11% year on year when comparing with Q3 2023. Plastic scrap imports include items such as used bottles, but also other forms of recycled feedstock such as purge, leftover pairings and also flake material. Imports totalled 129,137 tonnes in Q3, with PET making up 54% of that volume at 70,094 tonnes. This is the highest volume of PET scrap ever imported in a single quarter. Year to date (YTD) volume at 191,738 tonnes remains just shy of the 2023 total amount, 204,278. Demand for R-PET flake was solid throughout Q3, especially as ocean freight rates began to normalize from late spring highs. Moreover, the Q3 typically is the peak in bottled beverage demand, the largest end market for US R-PET resin. At this same time, market players noted that domestic PET bottle bale feedstocks were surprisingly limited in availability, adding to the increased interest in supplementary imported flake feedstocks for recyclers. Though this data could be impacted in the near future due to recent efforts from US Customs who have directed several market players to use the virgin PET HS code, 3907, when importing flake. Market players have traditionally used the plastic scrap code as it is a duty free item, whereas the PET code carries a 6.5% duty, unless the country of origin has a free trade agreement with the US. The top countries who have sent PET scrap to the US include Canada, Thailand and Japan, respectively. While Canada makes up 24% of PET scrap imports alone, of the top 10 origin countries, those based in Asia make up 44% of all PET scrap import volumes, followed by those in the Latin American region at 15%. Market participants confirm they have seen a notable rise in imported R-PET activity from Asia and Latin America, particularly due to their cost-competitive position when it comes to feedstock, labor and facility costs related to R-PET. As more imports from Asian and Latin American countries continue to increase, Canada and Mexico could both see a reversal of their previous growth trend on total scrap exports to the US. Imports of all other subcategories of plastic scrap, including polyethylene (PE), polystyrene (PS), and polyvinylchloride (PVC) were relatively steady. PE scrap imports made up 12% of Q3 plastic scrap imports, driven by shipments from Canada at 68% of the YTD volume, followed by Mexico at 17% of the YTD volume. Germany surprisingly has increased PE scrap exports to the US fourfold, though the total volume remains small, at 1,210 tonnes YTD. YTD, the US remains a net importer of plastic scrap. MEXICO REMAINS KEY BUYER OF US PET BALES Though exports of PET scrap, largely in the form of bales, fell QoQ tonnes, YTD volumes have already surpassed that of 2023. Mexico in particular continues to be a key end market for US bale material, making up 59% of the 18,362 tonnes of PET scrap exports. While the US has always exported a portion of domestic PET bale material to other countries, exports to Mexico have surged over the last year. This growing trade relationship is largely attributed to new capacity in Mexico, paired with strong local demand which has elevated local bale prices. As a result, Mexican recyclers have been purchasing US PET bales as a lower cost option with higher availability. YTD exports of PET scrap to Mexico are already 3,333 tonnes above 2023 total PET scrap volumes. Exports of US bales to Mexico, particularly from the Southern areas of the US such as Texas and parts of California, continue to challenge domestic recyclers, who struggle to secure adequate volumes of bale feedstock. Furthermore, as export demand continues put upwards pressure on bale pricing, local recyclers find themselves stuck between rising feedstock costs and very competitive import virgin and recycled pricing, thus unable to pass along those increased costs. PET scrap exports to Malaysia have also surpassed 2023 volumes, at present by over 2,400 tonnes. On the other hand, volumes to Germany are now 2,966 tonnes short of 2023, showing the shift from European demand to Asian and Mexican demand. Overall, exports of other types of plastic scrap continue to slow, following the Chinese National Sword and Basel Convention adoption several years ago. Total plastic scrap exports down QoQ but similar to levels seen this time last year. Canada and Mexico receive 56% of US plastic scrap exports, followed by several Asian countries including Malaysia, India, Vietnam and Indonesia which in total 28% of exports. PE continues to be a leading polymer type for US plastic scrap exports, coming in at 32,519 tonnes this quarter, roughly 32%. Insight by Emily Friedman

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 8 November. INSIGHT: Pile of chemical assets under strategic review grows. Who’s buying? Dow’s announcement that it will put its European polyurethanes (PU) business under strategic review adds to the growing pile of assets being evaluated for sale, restructuring or shutdown – mostly in Europe. A key question then becomes: Who, if anyone, could buy these assets? US Celanese to slash dividend, idle plants after big Q3 earnings miss Celanese plans to cut its quarterly dividend by 95% in Q1 2025 and idle plants in every region after third-quarter adjusted earnings fell well below guidance, the US-based acetyls and engineered materials producer said on Monday. Sharp auto decline drives massive Celanese earnings and outlook shortfalls; Acetyls plants idled A rapid decline in the automotive market, along with weak industrial demand – particularly in Europe – led to a major earnings shortfall for Celanese in Q3. Continued weakness and customer inventory destocking will drive an even bigger shortfall in Q4. INSIGHT: Trump to bring US chems more tariffs, fewer taxes, regulations US President-Elect Donald Trump has pledged to impose more tariffs, lower corporate taxes and lighten companies’ regulatory burden, a continuation of what US chemical producers saw during his first term of office in 2016-2020. INSIGHT: Trump to pursue friendlier energy policies at expense of renewables Oil and gas production, the main source of the feedstock and energy used by the petrochemical industry, should benefit from policies proposed by President-Elect Donald Trump, while hydrogen and renewable fuels could lose some of the support they receive from the federal government. Labor disruptions at Canada West and East coast ports continue The labor disruptions at Canada’s West and East coast ports continued on Friday while the chemical, fertilizer and other industries keep warning about impacts on manufacturers and the country’s overall economy.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at how chemical companies need to respond to demographic destiny. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author and do not necessarily represent those of ICIS. Paul Hodges is the chairman of consultants New Normal Consulting.