Trump's Submission to the EU
Trump Capitulated; EU & MSM Protected Him
The media presented the tariff agreement between the EU and Trump administration as a unilateral victory for Trump.
On the contrary: the Trump administration most subtly capitulated to the European climate program, a key protective barrier to European markets.
The EU, wisely, gave Trump nominal bragging rights, because Trump needs as much political capital as he can muster when he effectively imposes a Carbon Tax on American industries.
Tariffs By Other Means - Foreign Pollution Fee Act
The Foreign Pollution Fee act, mentioned in this post, applies a tariff to energy-intensive materials and chemicals imported to the United States. Notably, China and Russia feature strongly in the bill's language.
The "pollution" measured and tariffed in the FPFA("Foreign Pollution Fee Act") is carbon emissions.
Between the FPFA and the "market forces" from the EU(explained below) forcing America's carbon-intensive industries to harmonize with the EU's carbon imperatives, America effectively synthesizes a "carbon tax" in everything but name.
EU Energy Imports Mean EU Energy Rules
The EU has a CBAM("Carbon Border Adjustment Mechanism") which applies a carbon surtax on energy and materials from countries whose industries don't comply with the EU carbon regulations.
If the EU promised hundreds of billions of dollars worth of energy imports from the United States, it would prove delusional that it would undermine its entire carbon tariff policy, the foremost protectionist barrier for the bloc, and secondly which underwrites all of the considerable investment into the renewable industry and its associated tax incentives.
For high-volume commodity exports like LNG, a CBAM tariff would prove catastrophic. Thus, the US oil & gas industry must deeply harmonize with the European carbon scheme to make American exports to Europe profitable. For example, Cheniere Energy already publicly plans to comply with European methane regulations for Natural Gas production and distribution:
Jennifer L
Trump Admin Outsourcing Carbon Regulation: Let the "Market" Regulate US Industry
Instead of the EPA or Congress imposing policy decisions on US exporters, in particular natural gas, which have to contend with their methane emissions, Trump allowed the EU to dictate their terms to the industry: in exchange for the massive purchase order from the EU for American natural gas, the American natural gas industry will have to submit to EU regulations on methane emissions and other carbon-related metrics.
While Trump winds-down ecological bureaucracies within the United States and various incentives for economically and ecologically dubious renewable power programs, he facilitates the integration of the American energy market with Europe's carbon scheme.
Unclear How Much American O&G Must Invest in the EU
As yet another example of an unstated concession by the US to the EU, to achieve "compliance", American LNG exporters may be requested by their European buyers to invest in and even acquire European companies, in addition to patronizing European companies providing goods and services required for compliance with the European methane regulations.
Furthermore, European investors will expect priority in investment opportunities within American O&G markets - to the exclusion of domestic capital.
A Carbon Tax By Any Other Name
American oil & gas companies will have to satisfy EU demands for carbon-related investment across their supply-chain: that means capital investment, board appointments, and executive hiring must entail European needs for American compliance with the European carbon scheme to avoid catastrophic CBAM tariffs for the high-volume LNG trade with the EU.
The Good News - American Nuclear Hydrogen Exports Will Technically Be Allowed to the EU
The EU makes no secret about its ambition to replace diesel fuel with hydrogen: of course, the US' eventual hydrogen export industry to the EU would likewise need to work under European carbon imperatives.
While the EU will allow nuclear-generated hydrogen to qualify as "green", the distribution of market share for nuclear-generated hydrogen proves complex: it remains unclear how much American nuclear-generated hydrogen the EU allows into her market, given that the existing European nuclear fleet and future plants seek to likewise participate in supplying the domestic hydrogen fuel market.