Biden Green New Deal Opponent American Petroleum Institute Supports Carbon Emission Pricing

Carbon Emission Price Increase Expected... Preparing for Carbon Tax Imposition
Considering $50~100 per Ton... $1~7 During Trump Administration

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] As the Biden administration in the United States moves to set carbon emission prices, a key regulation in its green policies, even the American Petroleum Institute (API), which had opposed green policies until now, has come out in support. API had fiercely opposed green policies before the Biden administration, but it is interpreted that they finally surrendered due to the departure of key member companies such as France's Total. The Biden administration is reportedly setting the carbon emission price at over $50 per ton (t), which is 50 times higher than during the Trump administration, and the oil and chemical industries are expected to be hit hard.

According to the Wall Street Journal (WSJ) on the 1st (local time), API is preparing a statement to express support for the Biden administration's carbon emission pricing. The draft statement obtained by WSJ reads, "API supports economy-wide carbon pricing as a key climate policy tool of the Biden administration and will strive to reduce carbon emissions while keeping energy affordable."

Earlier, on the 25th of last month, immediately after the inauguration of new Energy Secretary Jennifer Granholm, API issued a statement congratulating her, saying, "We welcome the Secretary's recognition of the importance of developing energy generation, advancing technology to develop climate solutions, and the significance of U.S. natural gas exports to achieve the goals of the U.S. rejoining the Paris Climate Agreement."

As the largest oil industry lobbying group in the U.S., API had resisted the Biden administration's green policies until just after the presidential election in November last year. When President Biden pledged to introduce a carbon tax by 2025 and achieve net-zero carbon emissions by 2050, API strongly opposed, stating in a statement that "the Biden administration's green policies could threaten 19 million jobs in the U.S. oil and gas industry."

API's change of heart is interpreted to have begun with the departure of key member company France's Total. According to CNN, on January 16, four days before President Biden's inauguration, Patrick Pouyann?, CEO of Total, issued a statement withdrawing from API, citing reasons such as "API opposed subsidies for electric vehicles and influenced the Trump administration to relax methane emission regulations on oil and natural gas production facilities." Subsequently, news emerged that global major oil companies such as BP and Royal Dutch Shell are also considering withdrawal, raising concerns about API's very existence.

With API, once the last obstacle to Biden's green policies, now bowing, the Biden administration's carbon emission pricing is expected to proceed in earnest. According to MarketWatch, the Biden administration is reportedly considering setting the carbon emission price between $50 and $100 per ton, aiming to impose a carbon tax.

Carbon emission pricing in the U.S. has been under review since the Obama administration, with a price around $50 per ton considered, but the Trump administration drastically lowered it to about $1 to $7 per ton. Former President Trump and the Republican Party, supported strongly by the oil and chemical industries and pledging deregulation, not only relaxed carbon emission pricing regulations but also issued many oil and gas drilling permits, drawing much criticism from environmental groups in the U.S.

The oil and chemical industries, already facing a crisis due to the European Union's (EU) carbon border tax discussions, are expected to face worsening management crises if the U.S. carbon emission price rises sharply. According to CNBC, the EU plans to introduce a carbon border tax starting in 2023, which will impose additional tariffs on imports from regions with weaker carbon emission regulations than the EU's.