2024-04-05 20:45

WASHINGTON, April 5 (Reuters) - The Biden administration will release a preliminary climate model for its sustainable aviation fuel (SAF) subsidy program in the coming weeks that is more restrictive than what the corn-based ethanol industry had expected, two sources familiar with the matter told Reuters. Under the preliminary model, which could be released by May 15, ethanol is not expected to automatically qualify as a feedstock in the SAF subsidy program unless the corn involved is sourced from farmers using one of just three sustainable agriculture techniques, the sources said. Those techniques include efficient tilling, use of cover crops and efficient fertilizer application, the sources said. White House officials, the final arbiter of the model, had considered forcing producers to use all three techniques in a none-or-all approach, but have backed off that plan, the sources said. The ethanol industry had expected a broader range of agriculture techniques to be included in the model to help the fuel qualify. The sources said the model could be expanded to include a broader range of options when the administration considers a rule establishing the Clean Fuel Production Credit, or 45Z, later this year. The White House had been reluctant to immediately expand the options amid intense debate over how to verify that farms are actually doing the practices and whether they deliver the carbon reduction as promised. The issue has thrust the White House into the complicated politics of ethanol and biofuels in an election year. Subsidies for such products are hugely popular in some Midwestern swing states, but converting farm land to help generate fuel, not food, angers environmentalists. The White House declined to comment. To access SAF subsidies, producers must demonstrate their feedstock is 50% lower in emissions than jet fuel. Ethanol is expected to miss the 50% threshold after environmental penalties for converting land for fuel, something that would force the industry to rely on smart agriculture practices to get back above the credit threshold. Environmentalists are skeptical of the carbon reduction benefits of the smart agriculture practices and have been pushing the White House to limit their value in the model. The Biden administration wants SAF to play a key role in decarbonizing the transportation sector, and included a $1.25 per gallon tax credit for its production in the 2022 Inflation Reduction Act. The administration hopes the tax credit will generate 3 billion gallons of production of sustainable aviation fuels by 2030. Ethanol producers see the nascent SAF industry and its subsidies as the corn-based fuel's top chance for market growth, amid stagnant demand for gasoline. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/sustainability/climate-energy/biden-administrations-initial-saf-subsidy-model-raise-climate-hurdle-ethanol-2024-04-05/

2024-04-05 20:22

WASHINGTON, April 5 (Reuters) - President Joe Biden took an aerial tour on Friday of the collapsed Baltimore bridge that is blocking a key East Coast shipping lane, and he pledged federal help in rebuilding the span, an idea some Republican lawmakers in the U.S. Congress have resisted. A cargo ship crashed into the Francis Scott Key Bridge on March 26, sending it splashing into the harbor and killing six people. Work to clear the wreckage and restore traffic through the Mid-Atlantic state's shipping channel is ongoing. Aboard his Marine One helicopter, Biden flew over the scene of the disaster to get an aerial view. He met local officials for a briefing on the economic impact to the Baltimore port, an important shipping destination for ships to offload automobiles. Speaking with the fallen bridge behind him as an imposing backdrop, Biden vowed, "We will not rest" until the bridge is rebuilt and the area is back to normal. He called on Congress to approve funding for the new bridge as soon as possible. "I'm here to say your nation has your back and I mean it," Biden said. "We're going to get this paid for." He also vowed that the parties responsible for the bridge collapse will help pay to repair the damage and "be held accountable to the fullest extent the law will allow." Biden later met the families of the six people killed in the accident. The victims were all immigrants from Mexico and Central America, who were fixing potholes on the road surface of the bridge when it collapsed. Shortly before the president's flyover, dive teams recovered the body of one of the missing highway repair workers, Maynor Yasir Suazo-Sandoval, 38, of Honduras, officials said. Three other bodies remain trapped beneath the underwater debris. Two others were previously recovered. Biden's meeting with the families of these immigrant workers came as his rival Republican presidential nominee Donald Trump has ramped up anti-immigrant rhetoric and cast migrants as dangerous criminals "poisoning the blood" of America. State and federal officials have raised alarms over the hardships the port's closure could impose on the regional economy with thousands of port workers already idled. The Port of Baltimore ranks first in the U.S. for volume of autos and light trucks and farm and construction machinery handled, according to the state of Maryland. Most of that traffic has been suspended since the accident, though some terminal operations outside the affected area have resumed. The White House's Office of Management & Budget (OMB), in a letter to Congress on Friday, asked the federal government to cover the bridge replacement, which federal officials say could cost at least $2 billion. Some Republican hardliners in the U.S. House of Representatives oppose using new federal dollars to fund the bridge's reconstruction. Such a request could probably pass the Senate, controlled by Biden's fellow Democrats, but may run into trouble in the narrowly divided House. The House Freedom Caucus, a bloc of roughly three dozen hardline Republicans who can wield outsized influence over House Speaker Mike Johnson, on Friday issued a series of demands in exchange for their cooperation. FUNDING FOR THE BRIDGE Hours after the bridge collapse, Biden said the U.S. government would "pay the entire cost" of reconstruction and his administration announced $60 million in emergency relief last week. The administration will pursue all avenues to recover costs and "ensure that any compensation for damages or insurance proceeds collected will reduce costs for the American people," Office of Management and Budget Director Shalanda Young wrote on Friday. White House officials have held talks in recent weeks with Johnson's office over billions in aid for Ukraine and Israel as well as money for the collapsed bridge, according to two officials familiar with conversations who asked not to be named. The spending measures separately have bipartisan support, but the White House is aware that Johnson must satisfy his hardline colleagues, which means many spending proposals will be tethered together in order to pass, the officials said. The Freedom Caucus, whose members helped oust Johnson's predecessor last year, said Congress should seek "maximum liability" from foreign shipping companies. It also demanded that any aid be fully offset with spending cuts and that the Endangered Species Act and other regulations are waived to avoid delays. Get weekly news and analysis on the U.S. elections and how it matters to the world with the newsletter On the Campaign Trail. Sign up here. https://www.reuters.com/world/us/biden-survey-collapsed-baltimore-bridge-meet-families-workers-who-died-2024-04-05/

2024-04-05 19:45

Canadian dollar weakens 0.3% against the greenback Touches its weakest since Nov. 27 at 1.3647 Canada sheds 2,200 jobs in March Canada-U.S. 2-year spread widens to 53 basis points TORONTO, April 5 (Reuters) - The Canadian dollar weakened to a four-month low against its U.S. counterpart on Friday before clawing back some losses as investors raised bets the Bank of Canada would begin cutting interest rates in June following weaker-than-expected jobs data. Canada's economy shed 2,200 jobs in March, missing estimates for a gain of 25,000, while the jobless rate increased to a new 26-month high of 6.1%. "Today's data confirms that the Canadian economy isn't as strong as official GDP data and the BoC are making out, and that substantial rate cuts are needed," said Simon Harvey, head of FX analysis for Monex Europe and Monex Canada. "As markets come around to this inevitability and start to price increasingly diverging paths for the BoC and Fed, it should lead USD-CAD up to our 3-month forecast of 1.38." Investors see a 75% chance the Canadian central bank would begin cutting rates in June, up from 68% before the data. A June start to rate cuts was also the view of the majority of economists in a Reuters poll, with the BoC expected to leave rates on hold at a policy decision next Wednesday. The Canadian dollar was trading 0.3% lower at 1.3585 to the U.S. dollar, or 73.61 U.S. cents, after touching its weakest since Nov. 27 at 1.3647. For the week, the currency was down 0.4%. Separate data showed U.S. job growth beating expectations, boosting the U.S. dollar (.DXY) , opens new tab against a basket of major currencies. The price of oil, one of Canada's major exports, settled 0.4% higher at $86.91 a barrel, adding to its recent gains as geopolitical tensions rose in the Middle East. The gap between Canada's 2-year yield and the U.S. equivalent widened by about 7 basis points to 53 basis points in favor of the U.S. note, its widest since Feb. 26. Keep up with the latest medical breakthroughs and healthcare trends with the Reuters Health Rounds newsletter. Sign up here. https://www.reuters.com/markets/currencies/c-hits-4-month-low-jobs-decline-fuels-rate-cut-bets-2024-04-05/

2024-04-05 19:38

April 5 (Reuters) - Revisions to a key emissions model for sustainable aviation fuel feedstocks will be ready "in the very near future," said U.S. Environmental Protection Agency Administrator Michael Regan in Philadelphia on Friday. The Biden administration pledged last year to update how the Department of Energy's Greenhouse Gases, Regulated Emissions and Energy Use in Technologies (GREET) model measures emissions from agricultural practices used by farmers producing biofuel feedstocks. The revisions were delayed from an initial March 1 timeline after disputes among agencies about the changes, sources told Reuters at the time. "In the very near future, we will have that model up and running," Regan told the Society for Environmental Journalists conference. The model is favored by the biofuels industry for measuring ethanol emissions to determine whether the fuel qualifies for a $1.25 per gallon sustainable aviation fuel tax credit passed in the Inflation Reduction Act. The passage of the tax credit set off a lobbying battle between biofuel and farm groups and environmental organizations who argue producing fuel from crops is counterproductive to combating climate change. The EPA, DOE, Department of Agriculture, Federal Aviation Administration, and White House have all been involved in discussions about implementing the credit. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/sustainability/climate-energy/emissions-model-aviation-fuel-will-be-ready-in-very-near-future-says-epa-2024-04-05/

2024-04-05 19:17

NEW YORK, April 5 (Reuters) - A federal appeals court on Friday revived a lawsuit by Coinbase (COIN.O) , opens new tab customers who accused the largest U.S. cryptocurrency exchange of illegally selling unregistered securities and failing to register as a broker-dealer. The 2nd U.S. Circuit Court of Appeals in Manhattan said a lower court judge should not have relied on a December 2021 user agreement to find that Coinbase did not hold title to, and was not the seller of, 79 tokens that the customers traded. In its 3-0 decision, the appeals court said Coinbase had over time materially changed its user agreements, and the December 2021 version was not "conclusive" when evaluating the customers' legal claims. Customers in the proposed class action also argued that they never accepted that version, making it irrelevant in deciding to dismiss their case. Friday's decision also upheld the dismissal of claims under the federal Securities Exchange Act seeking to rescind some customer transactions. The case was returned to U.S. District Judge Paul Engelmayer in Manhattan, who had dismissed it in February 2023. In a post on social media platform X, Coinbase's chief legal officer Paul Grewal said the exchange welcomed the dismissal of some claims. "There's no private liability for the secondary trading of digital assets on exchanges like Coinbase," he wrote. "Why? Because contracts matter." Jordan Goldstein, a lawyer for the customers, said they were grateful with the decision and plan to resume their case against Coinbase and its Chief Executive Brian Armstrong. In finding that Coinbase wasn't a seller, Engelmayer had said the exchange had no direct role in transactions, despite having allegedly promoted tokens' "purported value proposition" and distributed free tokens to boost trading volume. On March 27, U.S. District Judge Katherine Polk Failla in Manhattan denied Coinbase's bid to dismiss a Securities and Exchange Commission lawsuit claiming it illegally facilitated the trading of tokens that should have been registered as securities. The case is Oberlander et al v Coinbase Global Inc et al, 2nd U.S. Circuit Court of Appeals, No. 23-184. Jumpstart your morning with the latest legal news delivered straight to your inbox from The Daily Docket newsletter. Sign up here. https://www.reuters.com/legal/coinbase-face-revived-lawsuit-by-customers-2024-04-05/

2024-04-05 16:59

NEW YORK, April 5 (Reuters) - U.S. bond giant PIMCO has trimmed its expectations for interest rate cuts by the Federal Reserve this year to two after data on Friday showing the U.S. economy created more jobs than expected last month, said a portfolio manager. "We did have two to three cuts this year and our base case now is most likely two cuts this year," Mike Cudzil, a managing director and generalist portfolio manager at the asset management firm, told Reuters. U.S. nonfarm payrolls grew by 303,000 jobs in March compared with expectations for an increase of 200,000, data showed on Friday. The figures come on the heels of a series of reports showing U.S. economic activity is proving more resilient to high interest rates than many had predicted. "Directionally this means a little bit less out of the Fed, and that's a good thing, the economy is proving for now that it can handle higher rates," Cudzil said. U.S. Treasury yields jumped after Friday's jobs data as the market continued to trim back expectations of rate cuts this year. Expectations for a first 25 basis point rate cut in June stood at 51% on Friday, down from 59% on Thursday, CME Group data showed. PIMCO has been underweight duration in portfolios over the past few months as it deemed the market was too optimistic on rate cuts this year, Cudzil said. Duration is a measure of a bond portfolio sensitivity to changes in interest rates. Earlier this year traders expected a total of 150 basis points of cuts in 2024, and that is now down to 67 basis points, which is more in line with the asset manager's expectations on the path of interest rates, Cudzil said. "I think it makes sense to get closer to neutral and if anything we're looking potentially at when we should get overweight on duration," he said. Fed officials projected last month three 25 basis point rate cuts this year, even if only by a small margin. Others in the market on Friday continued to stick to previous calls of three rate cuts this year because they anticipate inflation will moderate despite strong job growth. "While exceptionally strong, the employment report is consistent with the Fed starting to ease this year in June," analysts at BofA Securities said in a note. "A jump in labor supply can allow for stronger growth without overheating effects," they said. Rick Rieder, BlackRock’s chief investment officer of global fixed income, said an expansion of the workforce was positive for the economy as long as it kept wages contained. Still, he said, Friday's jobs report put more emphasis on inflation readings over the next few months to assess the path of interest rates this year. "Expectations have got to be somewhere between two to three cuts, and I think that today's data moves the needle ever so slightly towards two," he said. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/markets/rates-bonds/pimco-trims-2024-fed-rate-cut-expectations-2-after-jobs-report-2024-04-05/