… Citi Says Trump Can’t Stop The Energy Transition
By Olusola Bello
Cash cash-starved energy sector in Nigeria may have some respite as some American banks that have hitherto stopped making available financial support to investors in the fossil fuel sector, because of the Net Zero 2050, are quitting the Net-Zero Banking Alliance (NZBA).
This action may make them deploy more funds into the energy sector globally, especially hydrocarbon exploration and production.
The banks are pulling out of the Net-Zero Banking Alliance (NZBA because of the new policy of President Donald Trump which is exiting America from the climate change program.
It means the banks would deploy more financial resources to the energy sector thereby increasing investment in the sector.
The Net-Zero Banking Alliance (NZBA) has made European and American banks abandon investment in oil and gas. Because of this, investment flow into the Nigerian oil and gas industry has been very slim in recent years. This situation has also led to many projects being abandoned or put on hold by investors.
However, analysts, say reversing and axing most climate policies of the Biden administration, U.S. President Donald Trump will not be able to reverse progress in the energy transition as there is still a “compelling case” in favor of clean energy solutions, according to Citigroup’s analysts.
After years of scrutiny and blacklisting from Republican states in the U.S. and lawsuits from Republican attorney generals, North American banks and asset managers began quitting net-zero alliances en masse following President Trump’s election victory.
“Clean energy is cheaper, more widely available, and more efficient,” Citigroup ESG analysts wrote in a note carried by Bloomberg.
“For advocates of clean energy transition, the power of economics will prevail,” said the Citigroup ESG analysts led by Anita McBain.
President Trump reversed most of Biden’s energy and climate policies on Day 1, signing last week a slew of executive orders to boost oil and gas production, expand areas for drilling, withdraw from the Paris Agreement (again), halt offshore wind permits until a review into the economics is made, and eliminate the so-called “electric vehicle (EV) mandate” and the promotion of true consumer choice.
Despite all these measures the Trump Administration introduced on Day one, there remains a “compelling case” for the energy transition, Citi analysts said.
The energy transition has progressed and is now more advanced compared to when President Trump entered the White House for the first time in 2017, according to analysts.
Citi also said that the U.S. banks quitting the Net-Zero Banking Alliance (NZBA), including Citi itself, “neither impede progress nor dilute efforts” to advance the energy transition.