Chinese electric vehicle giant BYD is open to acquiring a competing manufacturer and setting up shop to produce cars in Canada—but not if it means entering a joint venture with another company.

“The Shenzhen-based automaker is studying the Canadian market for a potential manufacturing facility, although no decision has been made,” Bloomberg News reports, citing an interview with BYD Executive Vice President Stella Li.

“Perhaps more striking than the Canada factory talk is Li’s candid acknowledgment that BYD is evaluating potential acquisitions of established automakers,” Electrek writes. “Several American, European, and Japanese manufacturers are struggling under the financial strain of maintaining both combustion and electric vehicle product lines simultaneously.”

But while “we’re open to every opportunity we have,” Li said, “I don’t think a JV [joint venture] will work.”

In mid-January, Prime Minister Mark Carney agreed to sharply reduce tariffs on electric vehicle imports from China, while China offered up tariff relief for Canadian canola, peas, pork, and seafood. At the time, Canadian observers predicted lower EV prices and possible long-term advantages for the country’s automotive industrial base.

Canada agreed to slash duties on up to 49,000 Chinese EVs per year to a “most-favoured-nation tariff rate” of 6.1 per cent, Carney’s office said in a release. The imports will amount to less than 3 per cent of annual new vehicle sales in Canada, but “will drive considerable new Chinese joint-venture investment in Canada with trusted partners to protect and create new auto manufacturing careers for Canadian workers, and ensure a robust buildout of Canada’s EV supply chain,” the PMO said.

Days later, Carney said he saw the deal as an opportunity for Ontario’s automaking heartland. “We’ve had direct conversations directly from the Chinese companies… with explicit interest and intention to partner with Canadian companies,” he told media during a stopover in Doha, Qatar. “We’ll see what comes to pass. This is an opportunity for Ontario. It’s an opportunity for Ontario workers, opportunity for Canada, done in a controlled way with a modest start.”

Now, Bloomberg says BYD is looking at expanding its reach in overseas markets where it can repeat the “Brazil model”, a marketing and sales approach that has worked well for it in South America and Europe. “Buying existing production capacity with trained work forces is faster and cheaper than building greenfield—and BYD appears to be applying the same logic globally,” Electrek explains.

One place the company isn’t considering an expansion is the United States, a “complicated environment” where tariffs on Chinese-made vehicles exceed 100 per cent and connected car technology is banned.

BYD’s sales fell 36 per cent, to 400,241 vehicles, in the first two months of this year, both news outlets say. “But exports gained momentum, and the company is targeting 1.3 million overseas vehicle sales for the full year,” Electrek reports. “Li said BYD’s recently launched next-generation Blade Battery and ultra-fast flash charging architecture, capable of delivering up to 1,500 kW, will help reverse the domestic sales dip.”

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By Mitchell Beer

On the heels of a new strategic partnership with China, and with Prime Minister Mark Carney planning a trip to India later this year, the plan to reduce Canada’s trade dependence on the United States is beginning to yield closer connections with the world’s first two electrostates.

As Trump threatened a 100% tariff against Canadian products in response to a deal with China that he initially praised, at least one Chinese electric vehicle manufacturer looked to be preparing for an expansion into Canada, while a federal official said Canada wanted to be the first country in North America to build an EV with Chinese know-how.

Meanwhile, just as China is receiving wide recognition as the world’s first electrostate, a small flurry of news and analysis had India rapidly emerging as the second, advancing farther and faster than China did when it had achieved the same degree of economic development.

‘Foreign Troubles’ for U.S. Automakers

In their strategic partnership announced Jan. 16, Canada agreed to sharply reduce tariffs on electric vehicle imports from China, while China offered up tariff relief for Canadian canola, peas, pork, and seafood. Canada will slash duties on up to 49,000 Chinese EVs per year, rising to 70,000 by 2031, to a “most-favoured-nation tariff rate” of 6.1%. Within five years, as well, more than half of those vehicles are meant to be affordable EVs with an import price of less than $35,000.

At the time, CBC said Ottawa would soon release a strategy to expand the auto sector and “leapfrog” the U.S., with “preferential access to foreign automakers that manufacture vehicles in Canada.”

Scarcely a week later, the New York Times reported that the U.S. industry’s “foreign troubles” now extend to Canada, after U.S. trade policy “devastated the Canadian auto industry and pushed the country to reach an agreement that will make it easier for Chinese companies to sell cars there.” That could make the Canada-China agreement “an ominous development for U.S. automakers that are already struggling to stay relevant outside North America,” the Times wrote.

“General Motors and Ford Motor—the two largest U.S.-based car manufacturers—have been steadily losing customers in Asia, Europe, and Latin America, as Chinese carmakers have gained ground,” the news story stated. “If they lose significant ground to Chinese companies in Canada, Mexico, and other countries where they once dominated, Ford and GM could gradually become niche manufacturers.”

“There’s a real danger that the market for U.S. carmakers is going to largely be the U.S., and only that part of the U.S. market that wants big SUVs and trucks,” Erik Gordon, a professor at the University of Michigan’s Ross School of Business, told Times auto industry reporter Jack Ewing.

“Historically, U.S. trade policy regarding automotive has been mirrored in Canada,” added George Washington University engineering professor John Helveston, in an interview with the South China Morning Post. But now, “Canada is realizing that the U.S. industry is perhaps not the only one to be tied to,” a measure of both the impact of Trump’s tariff wars and the wider decline of U.S. leadership.

In Canada, the partnership has analysts arguing that lower costs will help consumers, although concerns about supply chains, industrial strategy, environmental impacts, and “strategic dependence” have yet to be resolved.

“The quota is too small to translate into a cheap-car bonanza for Canadian car shoppers,” the Globe and Mail writes. “But it is likely to increase competition among automakers, in China and elsewhere, to make $35,000 EVs fit for the Canadian market.”

The first imports will likely come from western automakers with Chinese production lines, notably Chinese-owned Volvo, Buick, and Elon Musk’s Tesla, the Globe says. But “China’s own brands won’t take long to show up in Canada,” the news story states, citing Canadian Black Book senior manager Daniel Ross, and they’ll want to build their profile “by focusing on models that meet North American expectations in terms of features, style, and size.” That will put them in competition “with compact and subcompact SUV segments, which, together, currently make up about half of the Canadian market.”

Late last week, the Globe reported that China’s Chery Automobile Co. Ltd. was laying the groundwork for a Canadian sales network, with at least three auto industry veterans saying they’d been contacted by recruiters who indicated they were working for Chery. The company is also considering building cars in a UK plant owned by Jaguar Land Rover, the Financial Times writes.

The Globe also reports on the difficulties that Chinese manufacturer BYD ran into when it tried to set up manufacturing operations in Ontario a few years ago.

The Two Electrostates

The trade deal earlier this month is just one part of an economic diversification strategy that had Carney concluding deals with the United Arab Emirates and Qatar over the last month. With International Trade Minister Maninder Sidhu now calling for closer trade ties between Canada and India, Carney is planning a visit as soon as March, Reuters reported in an exclusive this week, with indications of trade talks in Brazil and Australia later this year.

For a few years, China has been seen as the world’s first electrostate, with renewable energy and energy storage investments that far exceed the activity in any other country. Earlier this month, Carbon Brief talked to nearly a dozen leading experts in Chinese energy and climate policy to get a sense of what to expect in 2026—the year when the country will publish a set of five-year targets that “could boost—or moderate –the pace of its energy transition.”

For more than 18 months, analysis by Carbon Brief and others has shown China’s carbon dioxide emissions either flat or falling. This year, new non-binding emission targets and an expanded carbon market are expected to take effect, even as extreme weather increases the importance of climate adaptation “while also adding to the challenge of advancing clean energy.”

Already, though, renewable energy has already replaced natural gas as “the leading replacement for coal demand in China, with growth in solar and wind generation largely keeping emissions growth from China’s power sector flat,” Carbon Brief reports. Nikkei Asia says China installed three times more battery storage capacity than the U.S. in 2025.

Now India is “electrifying faster and using fewer fossil fuels per capita than China did when it was at similar levels of economic development,” Bloomberg says, citing analysis by the UK’s Ember energy think tank. “It’s a sign that clean electricity could be the most direct way to boost growth for other developing economies, too.”

The government of Prime Minister Narendra Modi “is considering new plans that would double India’s coal power capacity by 2047, and the country’s oil consumption growth was set to outpace China’s last year,” Bloomberg writes. “But the South Asian economy’s coal and oil consumption per capita is a fraction of what China’s was at similar income levels. In absolute terms, India’s fossil fuel consumption is growing at slower rates than China’s today.”

No More Engine for Oil and Gas Growth

Energi Media publisher Markham Hislop says the Ember analysis has wider implications.

“It suggests that India, the country long assumed to be the last great engine of global oil and gas demand growth, may already be bending away from fossil fuels faster than China did at a comparable stage of development,” Hislop writes. “That version of India’s energy future undermines the strategic assumptions underpinning energy policy in exporting nations from the Middle East to North America, including Canada.”

The driving force behind that shift is “simple and structural,” he adds, citing Ember. “China had to pioneer modern electric technologies at scale. India does not. It is industrializing at a moment when solar panels, batteries, and electric vehicles are abundant, cheap, and improving every year. India is not taking a fossil detour because it no longer makes economic sense to do so.”

Which in turn leads Hislop to the implications for fossil fuel exporters. “If India’s oil and gas demand really is nearing a peak, or never reaches the levels long assumed, the implications ripple outward.,” Hislop says. “For global markets. For geopolitics. And for countries like Canada that have built their long-term energy ambitions on the idea that someone, somewhere, will always need more hydrocarbons.”

In his Electrotech Revolution newsletter, Ember strategist and report co-author Kingsmill Bond cites faster solar deployment, much lower per capita coal use, rapid growth of electric vehicles, much lower oil demand in transport, and a “similar rapid electrification pathway” as factors that could make India’s “electrotech fast-track” more effective than China’s “fossil detour” en route to electrostate status.

“This energy path avoids deep fossil fuel dependency while positioning the country to supply electrotech to the world,” he writes, in what amounts to a “new path for emerging economies. India is showing other countries how to take a cheaper, faster, cleaner pathway to the electrotech future.”

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By Gaye Taylor

Senior Chinese officials arrived in Davos, Switzerland this week speaking the language of multilateralism. They ended the week correcting the United States president after he dismissed wind power and doubled down on oil and gas.

During his keynote address at the World Economic Forum, Donald Trump ranted that China has no working domestic wind farms, or more specifically, that he hadn’t “been able to find any” beyond a handful that he claimed were marketing backdrops used to sell wind turbines to “stupid people.”

China was swift to bat away Trump’s disinformation, noting at a press briefing that it has been the global leader in installed wind capacity for 15 consecutive years, reports Reuters.

“China’s efforts to tackle climate change and promote the development and application of renewable energy in the world are obvious to all,” foreign ministry spokesperson Guo Jiakun said, adding that the country’s exports of technologies like solar and wind have helped other countries reduce their carbon emissions by over four billion tonnes.

“As a responsible developing country, China is willing to work with all parties to continue to promote the global green and low-carbon transformation,” Jiakun said.

Vice-Premier He Lifeng had spoken at some length on this theme during his own main stage address, some 24 hours before the American president arrived.

“China will work with all other parties to fully and effectively implement the United Nations Framework Convention on Climate Change and the Paris Agreement, uphold the multilateral process on climate change, and actively promote global green and low-carbon development,” he said, just a couple of weeks after Trump withdrew the U.S. from the UNFCCC and five dozen other international fora. Earlier in his address, the vice-premier had pledged that “we are committed to building bridges, not walls,” vowing to “work with all parties to foster closer partnerships for green development.”

For his part Trump “pronounced last rites on American leadership of the liberal democratic order” in his address, as the New York Times put it. He prompted multiple analysts to compare his speech to mob boss language, declaring that “Canada lives because of the United States,” and that “after the [Second World War], we gave Greenland back to Denmark. How stupid were we to do that?”

He derided the energy transition as “the green new scam,” belittling Europe for its continuing efforts to decarbonize.

“Natural gas production is at an all-time high by far and oil production is up by 730,000 barrels a day, and last week, we picked up 50 million barrels from Venezuela alone,” Trump said.

Trump followed a pronouncement about America’s global lead in artificial intelligence with the claim that all AI facilities built on U.S. soil will be powered by brand-new oil and gas plants. “They’re even going coal, in some cases.”

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By Christopher Bonasia

Chinese electric vehicle maker BYD was set earlier this year to release a model that will be able to drive up to 400 kilometres after just five minutes of charging, though experts warn of infrastructure challenges.

The company reported a record annual revenue of US$170 billion in 2024, overtaking Tesla’s $155.5 billion. These developments highlight the widening gap between the two companies as BYD’s technology continues to surpass Tesla’s, writes ABC News.

Riding on its success, BYD is looking to expand its production facilities in Europe by building a third manufacturing plant in Germany, which will help it reach European customers without the extra cost of import tariffs.

BYD’s new charging capacity is made possible by an “all liquid-cooled megawatt flash charging terminal system.” The charging system is matched with a 1500-volt next-generation silicon carbide power chip and a flash-charging battery with ultra-fast ion channels, which halves the battery’s internal resistance.

Those innovations enable drivers to recharge their vehicles at a rate of about two kilometres per second, faster than any other passenger EV. The next closest competitor—Li Auto, also based in China—can reach a 500-kilometre range in 12 minutes, while Tesla superchargers can charge to a 275-kilometre range in 15 minutes, Bloomberg writes.

Two vehicles with this capacity will be launched in April—the Han L and the Tang L sport utility vehicle. Starting prices for these options are C$53,224 (270,000 yuan) and $55,196 (280,000 yuan). In comparison, the extended range option for BYD’s Han EV costs $45,300 (229,800 yuan). Prices for a Tesla Model Y start at $64,990 in Canada.

The fast charging time will help some buyers move past anxiety over EV wait times, InsideEVs Plugged-In Podcast co-hosts Patrick George and Tim Levin said. But they added that the really important point about BYD’s progress isn’t just that its technology is better than that of other companies, but that it is available in vehicles that are accessible for average consumers. BYD’s cars are sold for a good value in China even though they are more expensive or unavailable in other countries because of high tariffs. George said BYD EVs are unassuming and normal, instead of looking like “high-tech spaceships.”

“It’s so crazy how they’ve normalized this stuff,” he added.

BYD has plans to install 4,000 of its chargers across China, but has not provided specifics on how that will unfold. Some experts say that while the charging systems can work on their own, it may be difficult to integrate them into the grid because they have large power needs that could demand costly grid connection updates. The advanced liquid-cooled system itself is likely to be more expensive than other chargers, which could mean higher charging prices for drivers, reports Wired.

Others question exactly how useful the new system will be, given that most EV drivers are able to charge their vehicles at night when charging times are less relevant. The super-fast charging could also pose some safety concerns and might affect the long-term durability of the battery, writes Bloomberg.

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The International Energy Agency has always built its authority on policy. Its World Energy Outlook models are maps of intent: what governments say they will do, not necessarily what markets or industries are already doing. That worked when energy transitions moved at a bureaucrat’s pace. But today, the engine of change is industrial, not political. China — through sheer manufacturing scale and global electrification reach — is driving a transformation that the IEA’s scenarios struggle to capture.

The agency dropped APS from the World Energy Outlook 2025, saying that national commitments are too uneven to model reliably. Instead, it focused on the Current Policies and Stated Policies Scenarios. In effect, the IEA narrowed its gaze to a future far more friendly to oil and gas. A world that changes, but only as fast as formal policy permits. Yet the real world is moving faster, driven not by pledges but by production lines and industrial policy.

China: The Electrifier-in-Chief

Over the past decade, China has fused state planning, industrial finance, and scale to build the world’s most powerful clean-energy ecosystem. In 2024 alone, it sold 12.8 million New Energy Vehicles and exported 1.3 million more. It now accounts for roughly 60 percent of all new renewable capacity installed globally each year. Its solar panel manufacturing capacity will soon exceed the United States’ total electricity demand.

This is not just an energy story; it is an industrial one. Chinese automakers — BYD, SAIC, Geely, Changan — are flooding the Global South with affordable sub-$20,000 EVs, the ubiquitous two- and three-wheelers, bundled with charging networks, battery-recycling plants, and joint-venture factories. Beijing’s “industrial diplomacy” is electrifying emerging markets in the way Western aid once sought to wire them for fossil fuels.

The IEA sees policy diffusion as the main driver of energy transitions. China shows us something else: industrial diffusion. What the IEA calls “infrastructure limitation” in Africa, Southeast Asia, and Latin America is being dismantled by Chinese capital, logistics, and engineering. Electrification is becoming an export commodity.

The Physics of Scale

The story that the IEA’s model misses is not ideological; it’s arithmetic. Every doubling of cumulative solar production cuts costs by about twenty percent; every doubling of battery output by roughly eighteen percent. Those learning curves compound faster than politics can keep up. In 2010, a battery pack cost over $1,000 USD per kilowatt-hour; by 2023, $130. By 2030, it may hit $60. Solar module prices have fallen by over ninety percent since 2010.

Once parity arrives, substitution accelerates. Each ten million EVs on the road displaces around half a million barrels of oil demand daily. At projected adoption rates, that’s the equivalent of erasing an entire Saudi Arabia of oil demand within a decade.

This is the industrial feedback loop that OPEC, ExxonMobil, and the U.S. Energy Information Administration have consistently failed to model. Their scenarios assume hydrocarbons’ dominance and treat innovation as exogenous, a polite way of saying “someone else’s problem.” The IEA broke from that orthodoxy with the APS, which embedded learning curves and cost feedback. Yet by retreating from APS in 2025, the agency risks losing sight of the very dynamics that once made it the gold standard.

The Global South’s Leapfrog

Look beyond Beijing. Across the Global South, Chinese-financed solar farms, grid-stabilization projects, and electric-mobility programs are rewriting development logic. In Kenya, rooftop solar is offsetting diesel generation. In Brazil and Indonesia, low-cost Chinese EVs are scaling faster than policy incentives can track. In the Middle East, Chinese firms are co-building battery-storage complexes once thought decades away.

This diffusion matters because it shifts the geometry of the transition. For decades, energy modernization flowed North to South. Today, it runs in reverse. China’s overcapacity — derided in Western policy circles — is accelerating global deployment by forcing prices down. The IEA’s models, calibrated to declared policies rather than industrial momentum, under-represent this structural feedback.

Capital Flows Tell the Truth

Follow the money. Global clean-energy investment surpassed $2 trillion USD in 2024 and continues rising about 6–7 percent annually. Fossil-fuel investment, meanwhile, has plateaued or declined. Capital allocation now looks more like APS than like the new CPS (Current Policies Scenario), or even the still conservative Stated Policies Scenarios (STEPS). Markets are already betting that electrification, not hydrocarbons, defines the mid-century energy mix.

If the IEA’s CPS and STEPS project fossil demand growth into the 2040s, they describe a world that capital markets have already abandoned. APS aligns more closely with where investors are placing real money — grids, storage, batteries, renewables, and electrified transport.

The Model and the Machine

What’s unfolding is a divergence between two kinds of forecasting: the model built on policy, and the machine built on production. The model counts regulations; the machine multiplies learning. The IEA’s WEO 2025 treats electrification as an outcome of government intent. But China’s industrial ecosystem shows it is increasingly a self-propelling system — feedback, not fiat.

This is not to diminish policy. Without it, China’s ecosystem would not exist. But policy there functions as scaffolding for industry, not a ceiling. The IEA’s omission of APS makes sense within its institutional DNA; it reflects what can be officially promised. Yet it leaves unmodelled the real-world force now shaping the transition: manufacturing momentum.

The Consequences for Analysts and Policymakers

For analysts, the lesson is simple: the energy transition is being built, not legislated. The baseline for understanding it is no longer the pace of policy but the speed of industrial learning. For policymakers, particularly in countries like Canada still investing billions in hydrocarbon expansion, the implication is brutal. The world is electrifying faster than you can permit a pipeline.

The APS still fits the facts because it embeds the physics of feedback. The IEA may have stopped publishing it, but China is still proving it — one gigafactory, one grid, one EV fleet at a time.

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By Jonathan Church

• According to data released by the U.S. Census Bureau in September, the United States exported 46.8 million short tons (MMst) of coal in the first half of 2025 (1H25), an 11 per cent decline from 1H24.
• Steam coal exports totalled 22.5 MMst, a 10 per cent decline from 1H24. Metallurgical coal exports totalled 24.2 MMst, a 13 per cent decline from 1H24.
• Reduced coal exports to China (4.4 MMst) accounted for 73 per cent of the decline in total U.S. net coal exports. China accounted for 76 per cent of the decline in metallurgical coal exports and 68 per cent of the decline in steam coal exports.
• U.S. exports to China decreased after China imposed a 15 per cent additional tariff on imports of U.S. coal in February and a 34 per cent reciprocal tariff on imports from the United States in April.
• The reduction in total coal exports also reflects a global market characterized by declining coal prices caused by ample supply and soft demand. Meanwhile, coal consumption in the U.S. electric power sector has risen due to more demand and higher natural gas prices.

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By The Energy Mix Staff

The global price of oil went into a small tailspin this week, just as Prime Minister Mark Carney dangled the controversial Keystone XL pipeline as a bargaining chip in trade negotiations with Donald Trump, and Alberta Premier Danielle Smith demanded extraordinary concessions for new export pipelines that no investor seems willing to touch.

Oil prices hit a five-month low in Europe after the International Energy Agency reported a “large surplus” in global supplies, The Financial Times reports. The European price benchmark, known as Brent crude, fell to US$61.50 on Tuesday, its lowest since May, before bouncing back somewhat in Wednesday trading.

“The decline came after the agency said preliminary data indicated a ‘massive’ build-up in oil shipments in September following a surge in exports by oil producers, suggesting that output is now more than consumers need,” the Times writes. That’s partly because the projection shows global demand falling by 700,000 barrels per day.

All told, the Paris-based IEA is projecting an oil surplus of 3.2 million barrels per day through June, 2026—a small amount in the scheme of things, with countries producing more than 100 million barrels per day, but enough to drive down prices and potentially shift the economics of new oil infrastructure projects. The agency previously predicted a daily surplus of two million barrels, while other analysis has pointed to a likely multi-year run of low prices.

Bloomberg cites “escalating trade tensions” between the Trump White House and China as another factor driving down oil prices. The North American price benchmark, known as West Texas Intermediate (WTI), was down 1.3% to about $59 per barrel on Tuesday.

Prices took a hit from the IEA’s projection that daily oil demand will fall—and, in a macabre but not unexpected twist, the expectation that a fragile peace deal in the Middle East could help stabilize the market, Daniel Takieddine, co-founder and CEO of Sky Links Capital Group, told industry newsletter Rigzone.

“The agency has lowered its demand growth estimates to approximately 700,000 barrels per day for both years [2025 and 2026], reinforcing expectations of a significant surplus,” Takieddine said. “The market was further affected by a reduced geopolitical risk premium as hopes for stability in the Middle East grew.”

UBS commodity analyst Giovanni Staunovo said the price drop would have been sharper if traders had taken the IEA’s estimate seriously. “Either the market is pricing it completely wrongly or the [estimated] surplus is too elevated,” he told the Times. “I will believe it is a bit on the elevated side.”

But major oil speculators are already bracing for lower profits, after “lower volatility in energy prices… left little opportunity for the outsized returns that commodities traders had enjoyed in recent years,” the Times writes in a separate dispatch. Those factors made 2025 a “tough year, with lots of nitty gritty required,” Vitol CEO Russell Hardy told an industry forum this week in London. Gunvor CEO Törbjorn Törnqvist complained it had been a time of “hard work, for little…or a little less.”

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By Josh Eiermann

U.S. ethane exports are poised for significant growth through 2026, driven by robust global demand for ethane as a petrochemical feedstock, substantial U.S. export capacity expansions, and larger vessels to carry ethane exports. In our October Short-Term Energy Outlook, we forecast U.S. ethane net exports will grow 14% in 2025, followed by a 16% rise in 2026. The United States does not import ethane.

Ethane, a natural gas liquid primarily extracted from raw natural gas during processing, is a critical component in the petrochemical sector. It’s mainly used as a feedstock to produce ethylene, which is used to make a wide range of products including plastics, resins, and synthetic rubber.

The expansion of U.S. ethane export infrastructure supports export growth. Energy Transfer commissioned its Nederland facility in Texas in the second quarter of 2025 (2Q25), with capacity to export 250,000 barrels per day (b/d) of either ethane or propane. Energy Transfer will also expand its Marcus Hook, Pennsylvania, terminal by 20,000 b/d at the end of 2025. In July, Enterprise commissioned the Neches River ethane terminal in Texas, which has a capacity of 120,000 b/d. The second phase of the Neches River terminal is expected to come online in early 2026, adding 180,000 b/d of capacity. The addition of the Nederland flexport facility and first phase of the Neches River terminal increased U.S. ethane export capacity 16%; the second phase of Neches River terminal will expand it a further 21%.

Developers in the United States are expanding ethane export capacity to meet increasing global demand for ethane as a petrochemical feedstock, particularly in China. China has historically been the largest destination for U.S. ethane, accounting for 47% of exports in 2024. However, demand growth in China is expected to slow in 2026 amid tightening product margins and oversupply of ethylene derivatives in East Asia.

New and reconfigured crackers in China have contributed to the country’s growing demand for ethane. Wanhua Chemical recently completed a second cracker in Yantai, China, in 1Q25, which takes ethane and naphtha as feedstock. According to Argus, Wanhua Chemical shut down its first cracker in Yantai, China, in June to begin a five-month conversion switch to ethane as a feedstock instead of the propane that it currently consumes.

Although new facilities and conversions are boosting U.S. ethane exports, potential slowdowns in demand growth and regulatory changes introduce some uncertainties beyond 2026. Two Chinese ethylene cracker projects have been delayed and may take naphtha as feedstock instead of ethane, following a notice issued by the U.S. Department of Commerce’s Bureau of Industry and Security in May requiring U.S. ethane exporters to obtain a special license to export ethane to China. The requirement ended on July 2. Although naphtha can be sourced from countries around the world, the United States is the only country capable of exporting waterborne ethane.

In Europe, the INEOS Project One cracker in Antwerp, Belgium, with a capacity of about 80,000 b/d of ethane, is slated to come online in 3Q26. This cracker will be the largest in Europe and one of the largest in the world, adding more petrochemical production in Northwest Europe.

Not only is export capacity growing, but the vessels that carry ethane are getting bigger, with more capacity to support growing ethane demand. Tankers that can carry ethane range from handysize, which can carry ethane over short distances, to Ultra Large Ethane Carriers (ULECs), which are designed to carry up to 1.5 million barrels on intercontinental routes.

Eastern Pacific Shipping ordered six ULECs in 2024 to be delivered in 2027, which will be built in Chinese shipyards. Ten Very Large Ethane Carriers (VLECs) were also built in China, amounting to about 25% of the VLEC fleet. The U.S. Trade Representative plans to start implementing fees on Chinese built vessels in October (around $2 million per voyage), adding more uncertainty in U.S.-China ethane trade.

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By Sean Hill, Jonathan Russo

We estimate crude oil inventories in China increased by about 900,000 barrels per day (b/d) between January and August this year, essentially acting as a source of demand by removing barrels from the global markets. The stock builds in China limited the downward price pressure we would otherwise expect to see with growing inventories, keeping the Brent crude oil spot prices in a relatively tight range around $68 per barrel (b) in the second and third quarters of 2025.

We estimate global petroleum inventories rose by an average of 1.8 million b/d in the second and third quarters in our October Short-Term Energy Outlook (STEO). Global oil inventories have been growing in 2025 as crude oil production from OPEC+ members and non-OPEC+ producers in North and South America has outpaced global demand growth. Between April and August (the latest estimates we have), growth in China alone averaged 1.1 million b/d. Similar levels of global inventory growth would typically put downward pressure on crude oil prices; however, the price of Brent increased slightly during this period, averaging $68/b in the second quarter (2Q25) and $69/b in 3Q25.

We estimate total liquid fuels inventories in non-OECD countries, including China, grew by an average of 0.9 million b/d from January through August 2025. We estimate that on average, 0.9 million b/d of crude oil and condensate was added to oil inventories in China, making up most of our estimated global inventory builds of 1.4 million b/d over the same period.

China does not report data on its oil inventories, so we assessed China’s stock growth based on imports, exports, refining, and oil inventory data from third-party and official sources. We estimate the additions to oil inventories in China by balancing crude oil and condensate production, reported by the China National Bureau of Statistics, along with imports, refinery runs, and export data from a collection of ship-tracking and third-party sources. Depending on the source used and assumptions made, the range between different stock build estimates is 0.5 million b/d on average and can be as large as 1.1 million b/d, so we take an average for this comparison. Although we know some portion of China’s refinery capacity can utilize heavy fuel oil, we assume refinery run numbers are strictly crude oil for our estimates. In addition, since public reports that China directed its National Oil Companies to add barrels of oil to inventories, we assume both commercial and official government storage facilities can be considered as part of their strategic inventory stockpile.

Although our estimates are based on limited information, they support the idea that inventory growth in China was not available for trade on the global market, supporting crude oil prices.

The numerous geopolitical risks, along with shifting global oil trade flows and increased use of shadow tanker fleets due to sanctions, increase the uncertainty around estimating global oil balances in our STEO. Although we estimate global oil inventory builds to accelerate in our STEO, averaging 2.2 million b/d on from the fourth quarter of 2025 through 2026, the portion of this estimate that will show up in visible oil inventories and influence oil prices remains uncertain.

We currently forecast that Brent crude oil prices will fall from an average of $68/b in September to an average of $52/b in the first quarter of 2026, when global oil inventory builds are estimated to be at their peak in our STEO. If China continues to add to oil inventories over the forecast at a rate similar to the 0.9 million b/d from January through August of this year, crude oil prices could remain higher than our forecast. Conversely, a slowdown in China’s oil inventory builds would likely put downward pressure on oil prices as more oil shows up in visible oil inventory data.

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by Mitchell Beer

The United States’ carbon emissions increased while China’s declined in the first half of this year compared to the same period in 2024, pointing to a massive shift in roles between the world’s two biggest climate polluters if the trend continues.

Between January 1 and June 30 this year, U.S. emissions rose 4.2 per cent while China’s fell 2.7 per cent, reports Carbon Monitor, a global emissions tracker led by Tsinghua University, France’s Laboratory of Climate and Environmental Sciences, the University of California, Irvine, and China’s Institute of Geographic Sciences and Natural Resources Institute.

In China, emissions were down 1.4 per cent across the power sector and industry, and held statistically even across all other economic sectors. The United States was one of just three countries, along with Japan and Brazil, that saw emissions rise across their entire economies—including increases of 2 per cent in ground transport and 1.3 per cent in the power sector.

Across all the individual countries in the Carbon Monitor database, Spain recorded the highest emissions increase, at 6 per cent, followed by Brazil at 5.6 per cent, Germany at 5.2 per cent, the European Union plus the United Kingdom at 4.6 per cent, and the U.S. at 4.2 per cent.

Between the world’s two leading emitters, the data show “a reversal of the usual trend over the past decade, when global heat-trapping emissions inched higher in large part because U.S. reductions have been offset by higher CO2 output from China,” Politico writes. “It also comes after decades of American politicians of both parties complaining about China failing to clean up its act.”

The numbers could still be shifted by factors like weather, short-term economic trends, and natural gas prices, Politico writes. “But there are also signs of structural changes in the global economy.” International Energy Agency (IEA) figures show Chinese coal consumption falling 2.6 per cent in the first half of the year, largely due to a boom in solar that saw the country add 92 gigawatts of capacity—that’s 92 billion watts—in a single month in May, compared to all-time U.S. installations of 134 GW.

That reflects a fundamental shift in the way China consumes energy, climate scientist Glen Peters of the Oslo-based Center for International Climate Research (CICERO) told Politico, though it’s still early to declare a permanent change. “Even if Chinese emissions decline this year, I would not start saying they have peaked,” he said. “I would want to see emissions trending down for a few years.”

But U.S. per capita emissions are still well above China’s, according to the latest IEA data. And with Donald Trump moving on all fronts to increase fossil fuel production and revoke renewable energy incentives and confirmed contracts, Stanford University earth systems scientist Rob Jackson said the broader trends are clear—even if it’s too soon to say where the 2025 data will land.

“It’s fair to say that China and the U.S. are on different trajectories now,” he told Politico, with clean technology adoption likely to drive down emissions over the next five years. The U.S., by contrast, is “heading in the opposite direction.”

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