INSIGHT: Biden’s environmental policies mark sharp break from Trump’s
HOUSTON (ICIS)–Joe Biden’s environmental policies represent one of the biggest breaks from the past four years of the administration of President Donald Trump.
Those policies are far-reaching and they would directly affect the chemical industry.
Biden wants the US to achieve net-zero emissions of greenhouse gases by 2050; to adopt an unspecified enforcement mechanism to make that happen; to speed up the adoption of electric vehicles (EVs); and to make buildings more energy efficient.
Other policies would limit the growth of oil and gas production. Regulators could pursue pollution cases with more rigour.
If enacted, these policies would raise costs for petrochemical companies. They would also increase demand for plastics and chemicals needed for electric vehicles and efficient buildings.
This marks a break from the past four years under Trump. His policies were aimed at lowering costs for companies and to make it easier for them to do business. They encouraged oil and gas production, which increased supplies of feedstock used by the chemical industry.
At the root of Biden’s break from Trump is his 2050 timeline for the US to achieve net-zero emissions. Several policies cascade from that goal.
OIL AND GAS
Biden calls for banning new oil and gas permits on public lands and waters. He would seek a global moratorium on offshore drilling in the Arctic.
In addition to restrictions on land available to energy development, Biden’s administration would modify royalties to account for climate costs.
It would adopt what it called aggressive methane pollution limits for new and existing oil and gas wells. Biden’s platform did not specify how strict these limits would be or if they covered methane leaks, flaring or both.
Biden would direct the Environmental Protection Agency (EPA) and the Justice Department to pursue criminal investigations into allegations of pollution.
The platform highlights water pollution and noted plastic waste, oil spills and per- and poly-fluoroalkyl substances (PFAS).
Biden’s policies would extend its reach overseas through carbon-adjustment fees. These would be imposed on imports from countries that fail to meet climate and environmental obligations. Bidden also wants to impose quotas on imports that are especially carbon intensive.
A Biden administration could recruit trade agreements to reduce carbon emissions. Future trade deals could include conditions based on the Paris Climate Accord.
To achieve its goal of net-zero emissions by 2050, Biden would introduce an unspecified enforcement mechanism. Biden didn’t specify whether this mechanism would be carbon taxes, fines or a combination of the two.
Biden wants to encourage carbon capture, use and storage (CCUS). These would receive more federal dollars and tax incentives.
Carbon capture would give the chemical industry an alternative to paying fines and taxes, but it would likely come with storage fees.
Biden wants to set a fuel-efficiency standard of 54.5 miles/gal (23.2 km/litres) for cars and light-weight trucks by the 2025 model year. The goal is to ensure that all new sales for automobiles would be electrified.
To promote more electric vehicles, Biden wants the country to add more than 500,000 public charging stations by 2030. Other policies include tax credits for consumers who buy electric vehicles.
The federal government would use its procurement system to push its fleet of automobiles towards 100% zero-emission vehicles.
A rise in production for electric vehicles could increase demand for plastics and other materials that lighten the weight of the automobiles. It would also raise demand for plastics used to insulate electrical wiring.
Because electric vehicles lack engines, they would cause a decline in motor oils demand. Demand for some niche lubricants could rise.
Biden’s platform was a bit vague for medium- and heavy-duty vehicles. It calls for the introduction of fuel efficiency standards.
For buildings, Biden wants to reduce the carbon footprint of the nation’s building stock by 50% by 2035. To reach such a goal, Biden’s administration would rely on retrofits, stricter energy efficiency standards and on-site clean power generation.
Such a policy could increase demand for rigid polyurethane foam, since the material is such a powerful insulator.
Such foam is made with methylene diphenyl diisocycanate (MDI) and polyols.
It is still too soon to know whether the chemical industry would face such a sharp break from the policies of the past four years.
States are still counting votes, and potential challenges could make it unclear whether Trump would win re-election or if Biden would become president.
Biden will likely need a united government to pass such far-reaching policies. His party is expected to maintain its majority in the House of Representatives, the lower legislative chamber in the US.
However, Trump’s party holds a majority in the Senate, the upper chamber.
With a divided government, Biden would lean heavily on enforcing existing laws and adopting new administrative policies that do not require new legislation. Such constraints would limit Biden’s ambitions. And a new president could reverse them once he leaves office.
Votes are still being counted for key Senate races and for the president.
The chemical industry will have to wait before it knows what the next four years could hold.
By Al Greenwood
Thumbnail image by Shutterstock
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