Ceasefires, tariff-talks, hydrogen, facebook - Issue #133

May 12, 2025

De-escalations

It was the worst of weeks and the best of weekends.

The battle between India and Pakistan, which had slipped into “uncharted waters” with both countries lobbing missiles and drones into civilian areas, finally saw a ceasefire after the US administration stepped in after getting “alarming intelligence” about further escalation.

Things could have gotten much worse. As the FT wrote in a report about Narendra Modi and Asim Munir, “South Asia’s fate is now largely in the hands of these two devoutly religious strongmen, who both believe they are fighting a just war against a sworn enemy. It is a zero-sum calculation in a region bristling with armaments, including nuclear bombs, and both men’s reputation hangs on emerging with their honour intact.”

The off-ramp, a phrase bandied about quite a lot last week, now means both can claim victory before their people and, along the way, avoid questions on why the subcontinent, home to some of the poorest people in the world, again teetered at the edge of war with all its social, economic and ecological costs.

On another battlefield, too, the world saw a climbdown.

The US and China announced their first trade talks since Trump’s tariff shocks. “Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will meet their Chinese counterparts in Geneva this week,” reported the FT. These discussions, said Bessent, were an effort to lower tensions rather than negotiations about a broader trade deal itself. “We’ve got to de-escalate before we can move forward,” he told the paper.

As this newsletter said last week, the US will soon see shortages as the tariff shock starts to bite. China is starting to get worried, too. It needs external markets to absorb products from its vast factories. And yet, as countries not only start trade talks with the US, but also try to ward off Chinese dumping in domestic markets (China has trade surpluses with 172 countries), the country has a problem.

“Behind closed doors, Chinese officials have grown increasingly alarmed about tariffs' impact on the economy and the risk of isolation as China's trading partners have started negotiating deals with Washington,” reported Reuters. Sectors like furniture, toys and textiles, said the newswire, were already starting to struggle. “Many analysts have downgraded their 2025 economic growth forecasts for China, and investment bank Nomura has warned the trade war could cost it up to 16 million jobs. China's central bank this week announced a fresh monetary stimulus," it wrote.

The trade war has disrupted supply chains, unsettled financial markets and stoked fears of a sharp downturn in global growth. One hopes this gets resolved swiftly as well.

News of the week

Moving on from economic and military warfare, here are other signal events from last week.

Rameshwar Prasad Gupta, the chairman of Solar Energy Corporation of India (SECI), was sacked a month before his retirement. “During Gupta's tenure, SECI had barred India's Reliance Power from participating in competitive tenders for renewable energy projects,” wrote ET. “SECI also came under fire last year for a solar deal involving SECI and billionaire Gautam Adani, which was signed before Gupta became chairman.” One wonders what happened.

In yet other news, the NGT has told powerplants to get fresh environment clearances if they want to switch to cheaper coal. Over the past five years, as Newsclick reported, “thermal power plants were allowed to change their “source of coal”, irrespective of ash content, calorific values or potential environmental hazards”.

In its order, the NGT observed that “permission to change fuel source without amendment of environmental clearance would tantamount to “submission of false information or suppression of information since the character of pollution as well as quantum of pollution load varies with the source of coal and combination of domestic and imported coal”. The tribunal further noted that “shifting to domestic coal will result in higher loads of fly ash generation which can impact both air and water quality” while in case of imported coal (which has higher quantities of sulphur), emission of toxic sulphurous oxides “will increase which can affect the air quality and could also result in acid rains which can in turn impact water and soil qualities.”

It also cracked down on the environment ministry for using office memorandums to effect legislative changes.

The Adani Group has deployed India’s first hydrogen-powered truck for its operations in Chhattisgarh. Leaving aside the firm’s rhetoric about moving towards clean transportation — the truck will be used to transport coal from the Gare Pelma III Block to an Adani power plant — the stats are interesting. With three hydrogen tanks, the truck can lug 40 tonnes of cargo over 200 kilometres. Is that a compelling proposition for long-haul truckers?

In related news, India’s hydrogen manufacturers are seeking a purchase obligation to save assets from stranding. “Without HPOs and adequate off-take and demand creation, NGHM 2030 targets and combined hydrogen-related investments worth $ 80 billion are at risk,” said the Indian Hydrogen Alliance. In another report, the body proposed 10 per cent hydrogen purchase obligations for existing plants and 100 percent HPO for new refineries and ammonia plants by 2030, to achieve the NGHM 2030 target of 1.5 MT green hydrogen for domestic use in India, as ET reported.

These are very interesting developments. Firms wouldn’t seek such support if they weren’t facing headwinds. Is the Green Hydrogen dream running into headwinds? If so, why are Coal India and Greenko still so bullish?

In the electric two-wheeler market, Bajaj and TVS are catching up with the newcomers. Their combined market share has climbed from 31% last year to nearly 40% now. Once Honda comes in, expect this to climb even higher. In other news, India has slapped an anti-dumping duty on some varieties of solar glass from China and Vietnam. This follows similar action from the government last December. With this, “achche din” have come for firms like Borosil Renewables.

In other news, the scramble by Indian power companies to set up hydel projects elsewhere in the subcontinent continues. The latest announcement came from Adani, which has signed MoUs to build 5 GW of dams in Bhutan.

What made headlines elsewhere in the world?

Indonesia’s coal exports are falling. The FT has been told by Donald Wuebbles, an expert in atmospheric physics and chemistry who serves as a paid adviser to Neom, that he has repeatedly raised the question of how the project’s linear city, ski fields and islands could change local environments and weather systems. Nothing surprising here and yet, construction continues.

The environment is on the defensive everywhere. In America, as the FT reported, top officials at US financial watchdogs are seeking to weaken the power of a high-level task force set up in 2020 to examine climate change risks to the financial system by the Basel Committee on Banking Supervision, the standard-setter for global financial regulation. In the UK, it’s suddenly unclear if Labour will persist with Net Zero. The global SMR pipeline — which includes all announced projects — has now swelled to 47 GW. “The power generation segment continues to be the largest end-use category with a 51 per cent share, while data centres have grown to represent 39 per cent of the pipeline,” reported ET.

On the Spanish blackout

El País has a very scathing op-ed from the former head of the Spanish Grid on the blackout two weeks ago. Read these bits:

“The Spanish electricity system, in line with the European one, has undergone a total revolution in just a few years by closing coal power plants, limiting gas plants and betting, with a lot of public subsidies behind it, especially on wind and photovoltaics. This has had two impacts on the operation of the system and its operation: the generation points connected to the transport network have multiplied, as well as its geographical distribution and, secondly, a system designed to manage synchronous energies has had to adapt to integrate, in a short time, a very important volume of non-synchronous energies whose physical characteristics (voltage and frequency) are very different from the point of view of the balance of the network. I am not discovering anything new, nothing that was not known from the beginning and who has the responsibility of approving the energy policy.”

And

“No one can say that they did not know that the massive integration of renewables (a laudable objective and supported by almost everyone) forced major changes in regulations, investment in networks and system and operator procedures if we wanted to continue to guarantee supply and reduce the risks of a blackout. I attest that, at least, the REE technicians have been insistent in that regard from the beginning. The most recent known report points out that "the massive inflow of renewable generation, mostly based on power electronics, has meant a change when it comes to establishing equipment requirements for the protection system." And we can already say that, in all this, in this essential accompaniment to the growth of renewables, the slowness of action by the appropriate person has been excessive. I'm not saying that if everything required had been done, the blackout of the 28th wouldn't have occurred. I don't know. We are waiting for the official report that, I hope, will not take long. But I am sure that the chances of having instabilities, voltage fluctuations and blackouts, as we have had, would have been greatly reduced.”

Climate Change story of the week

“Nepal will mark the rapid melting of a crucial glacier with a “funeral” next week as scientists warn that climate change threatens thousands of other ice sheets across the world. Buddhist monks, scientists, government officials and community figures will take part in a ceremony on Monday at the Yala glacier, one of the most studied and measured ice bodies in the Hindu Kush Himalaya region, which is now considered critically endangered.” From: Glacier gets Himalayan funeral as thousands of ice sheets ‘die’, Financial Times.

Video of the week

The military showdown last week was revelatory on many counts. Amongst them, the scale of misinformation peddled in news and social media was higher than ever before. A video:

Climate long-reads of the week

Book of the week

Over the last week, we have been reading an insider account from Facebook. This is Sarah Wynn-Williams’ Careless People: A story of where I used to work.

Books on Facebook can, by now, fill a shelf. These range from the firm’s rise to its hacks to make Facebook addictive to the larger costs of this commandeering and manipulation of our attention. On the third set, we have Maria Ressa on Rodrigo Duterte’s weaponisation of Facebook for disinformation. We also have Carole Cadwalladr and activists like Christopher Wylie on how Facebook was used to push misinformation during Brexit, Myanmar's attack on the Rohingyas, in India, within the USA itself, where it actually took credit for Trump trouncing Hillary Clinton, and so on.

In effect, societies used to hold conversations within themselves through mass media. Newspapers, for instance, worked as gatekeepers and fact-checkers within the public discourse. At their best, they cut through the noise to create a proportionate snapshot of the previous day. Facebook — and other social media companies — supplanted mass media but made no efforts to vet the quality of the information being posted. In this book, Wynn-Williams, who was Facebook’s former director of Global Public Policy, shows how Facebook’s pursuit of growth has seen it cut deals — from takedown requests to sharing user information to even censoring on behalf of China — with strongmen leaders in return for market access.

A very enlightening read. Here is a review.