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Analysis-Doomed to fail? How carmakers’ climate vows fall short – and who’s to blame

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October 26, 2021

By Victoria Waldersee

BERLIN (Reuters) – Car and truck makers from Volkswagen to Nissan and Ford have embraced the narrative that reducing carbon emissions in line with the Paris Agreement should be a key tenet of their business agenda.

Are they doing enough? Research shows their goals are still a far cry from what is needed, but the jury is out on whether automakers alone are responsible for the shortfall.

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While some say carmakers should plan to make their fleets carbon-neutral whatever the circumstances, companies argue that their ability to transition to electric vehicles (EV) is dependent on conditions outside their direct control.

Consultancy firm Boston Consulting Group said in a report released last week that at least 90% of new passenger vehicles and 70% of trucks must be electric by 2030 in order to meet climate targets, echoing environmental groups like Greenpeace.

But among major auto brands, very few – among them Geely’s Volvo and VW’s Bentley – have set goals for 100% EV production by then, with most arguing that they cannot take full accountability for a transition to electric vehicles without the market conditions to remain profitable in the process.

German luxury carmaker Daimler, for example, has refrained from stating it will produce only electric vehicles by 2030 no matter what – instead it has emphasised it will be “ready to go all electric … where market conditions allow.”

“We will lead from the front. Is it realistic to turn 100% of the market by 2030? It would be a stretch,” Daimler’s CEO Ola Kaellenius told Reuters in an interview, adding he hoped to see countries and economic regions do their bit at the COP26 summit by synchronising their plans for electric vehicle rollouts.

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Charging infrastructure is just one of many challenges standing between the auto industry, estimated by the International Energy Agency to be responsible for around 18% of all carbon emissions worldwide, and climate neutrality.

Others include getting rid of dirty fossil-fuel powered cars still on the roads, reducing emissions in battery production, and building storage systems for renewable energy to ensure the electricity used to charge electric cars is from renewable sources.

TOO LITTLE, TOO LATE?

Under carbon reduction policies already agreed by governments and automakers, global CO2 emissions from vehicles are still set to rise over time, research by the International Council on Clean Transportation shows.

If policies under discussion are implemented, the growth trajectory stabilises but still does not fall, it said, highlighting growing demand for cars, buses and trucks in coming years due to population growth and increased economic activity in emerging markets.

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While one in five vehicles sold in Europe last quarter were electrified, the share is much lower in the United States at around 2%. EVs are an even tinier slice of sales in less rich markets such as Latin America or Southeast Asia.

Automakers and governments must also find answers for labour unions who are worried that a rapid shift to EVs will put thousands of workers out of their jobs.

This includes German unions demanding clarity from Stellantis on its plans for Opel plants, and U.S. President Joe Biden facing pressure from the U.S. United Auto Workers’ union to provide more state support during the EV transition.

“There are a lot of factors involved … we try to project a realistic picture,” a spokesperson for Germany’s BMW said. “But if certain conditions change fundamentally, we will of course have to re-examine our climate goals.”

CARBON EMITTER

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The majority of a vehicle’s emissions do not come from the manufacturing process, but from the fuel used to power it – be it electricity, petrol, or diesel.

In the case of electric vehicles, the process of making batteries is also a significant carbon emitter, with a Volkswagen ID.3 for example generating nearly twice the emissions of a diesel equivalent in the production phase, according to company calculations.

While carmakers are increasingly investing in producing batteries in a more environmentally friendly way, controlling the source of energy flowing into electric cars is much harder.

Automakers like VW and Tesla are growing their offering of residential storage systems for clients to power vehicles through mechanisms like solar panels on their roofs – but the question of who is responsible for sourcing and distributing energy in public spaces is more contentious.

Even if automakers invest in public charging stations, ongoing problems with storage of renewable energy could force energy providers to rely on coal and natural gas to meet short-term demand, as recent volatility in energy markets has shown.

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Lobby groups such as the European Automobile Manufacturers’ Association and the U.S.-based Alliance for Automotive Innovation have urged states to invest in renewable-based charging infrastructure, from public-private investments to fully state-funded projects.

But some environmental groups argue that relying on taxpayer funds is unfair as the networks would disproportionately benefit car companies and owners, as opposed to spending on public transport.

Another lingering problem is the diesel and gas cars still driving on roads beyond 2030, which will bump up the industry’s emissions well beyond the limit necessary to stay within the Paris Agreements’ bounds, researchers have said.

Even if half of all new cars sold in 2035 were zero emission – which climate goals set by BMW, General Motors and Nissan would account for – some 70% of vehicles on roads would still be burning fossil fuels, Boston Consulting has said.

“Even economies in the vanguard of the climate-change fight are therefore likely to fall short of decarbonisation targets.”

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(Reporting by Victoria Waldersee; Additional reporting by Joe White in Detroit and Christoph Steitz in Frankfurt; Editing by David Holmes)

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Amazon asks India antitrust body to revoke Reliance-Future deal approval

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November 28, 2021

By Aditya Kalra and Abhirup Roy

NEW DELHI (Reuters) – Amazon has asked India’s antitrust regulator to revoke its approval for Future Retail’s $3.4 billion sale of retail assets to Reliance, saying it was “illegally obtained”, violating an order suspending the deal, a letter seen by Reuters shows.

The approval for the deal was a “nullity in the eyes of law” as an arbitrator’s order was still in force, according to the letter sent by Amazon.com Inc to the Competition Commission of India (CCI) last week.

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The battle between two of the world’s richest men, Amazon founder Jeff Bezos and Reliance Industries Ltd boss Mukesh Ambani, marks a contest for preeminence in India’s booming, nearly trillion-dollar retail market.

The winner in the fight for Future Retail Ltd, India’s second-largest retailer and Amazon’s estranged local partner, will get pole position in the race to meet the daily needs of more than a billion people.

The CCI, Amazon, Future Group and Reliance did not respond to requests for comment.

Future has said the arbitrator’s suspension order was invalid but Indian courts have declined to overturn it.

If the regulator agrees with the previously unreported letter, it would be a major setback for oil-to-telecom conglomerate Reliance.

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Amazon won an injunction against the deal from a Singapore arbitrator last year, alleging Future had violated contracts that prevented it from selling the assets to entities including Reliance.

But the CCI later cleared the deal.

Future misled the CCI and continued to seek approval for the deal, Amazon said in the letter dated Wednesday, calling the injunction a “brazen attempt to subvert the rule of law”.

Amazon asked for a personal hearing from the CCI to make its case.

The letter comes as Amazon is also battling allegations that it misrepresented facts and concealed information while seeking antitrust clearance for a 2019 deal with Future Group.

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Amazon has so far successfully used this deal’s contracts to block Future’s deal with Reliance.

(Reporting by Aditya Kalra and Abhirup Roy in New Delhi; Additional reporting by Zeba Siddiqui; Editing by William Mallard)

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Exclusive-Visa complains to U.S. govt about India backing for local rival RuPay

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November 28, 2021

By Aditya Kalra

NEW DELHI (Reuters) – Visa Inc has complained to the U.S. government that India’s “informal and formal” promotion of domestic payments rival RuPay hurts the U.S. giant in a key market, memos seen by Reuters show.

In public Visa has downplayed concerns about the rise of RuPay, which has been supported by public lobbying from Prime Minister Narendra Modi that has included likening the use of local cards to national service.

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But U.S. government memos show Visa raised concerns about a “level playing field” in India during an Aug. 9 meeting between U.S. Trade Representative (USTR) Katherine Tai and company executives, including CEO Alfred Kelly.

Mastercard Inc has raised similar concerns privately with the USTR. Reuters reported in 2018 that the company had lodged a protest https://reut.rs/3cQA2La with the USTR that Modi was using nationalism to promote the local network.

“Visa remains concerned about India’s informal and formal policies that appear to favour the business of National Payments Corporation of India” (NPCI), the non-profit that runs RuPay, “over other domestic and foreign electronic payments companies,” said a USTR memo prepared for Tai ahead of the meeting.

Visa, USTR, Modi’s office and the NPCI did not respond to requests for comment.

Modi has promoted homegrown RuPay for years, posing a challenge to Visa and Mastercard in the fast-growing payments market. RuPay accounted for 63% of India’s 952 million debit and credit cards as of November 2020, according to the most recent regulatory data on the company, up from just 15% in 2017.

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Publicly, Kelly said in May that for years there was “a lot of concern” that the likes of RuPay could be “potentially problematic” for Visa, but he stressed that his company remained India’s market leader.

“That’s going to be something we’re going to continually deal with and have dealt with for years. So there’s nothing new there,” he told an industry event.

‘NOT SO SUBTLE PRESSURE’

Modi, in a 2018 speech, portrayed the use of RuPay as patriotic, saying that since “everyone cannot go to the border to protect the country, we can use RuPay card to serve the nation.”

When Visa raised its concerns during the USTR gathering on Aug. 9, it cited the Indian leader’s “speech where he basically called on India to use RuPay as a show of service to the country,” according to an email U.S. officials exchanged on the meeting’s readout.

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Finance Minister Nirmala Sitharaman said last year that “RuPay is the only card” banks should promote. The government has also promoted a RuPay-based card for public transportation payments.

While RuPay dominates the number of cards in India, most transactions still go through Visa and Mastercard as most RuPay cards were simply issued by banks under Modi’s financial inclusion programme, industry sources say.

Visa told the U.S. government it was concerned India’s “push to use transit cards linked to RuPay” and “the not so subtle pressure on banks to issue” RuPay cards, the USTR email showed.

Mastercard and Visa count India as a key growth market, but have been jolted by a 2018 central bank directive for them to store payments data “only in India” for “unfettered supervisory access”.

Mastercard faces an indefinite ban on issuing new cards in India after the central bank said it was not complying with the 2018 rules. A USTR official privately called the Mastercard ban “draconian”, Reuters reported in September.

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(Reporting by Aditya Kalra in New Delhi; Editing by William Mallard)

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‘Flash mob’ thieves target U.S. retail stores on Black Friday

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November 28, 2021

By Steve Gorman

LOS ANGELES (Reuters) – Black Friday shoppers weren’t the only ones out hunting for bargains on the day after Thanksgiving. Thieves were busy as well.

Police in Los Angeles and cities elsewhere across the country spent much of their holiday weekend patrols looking for suspects in a spate of “flash mob” robberies on Friday, part of a surging U.S. crime trend in which groups of thieves swarm a store, ransack the shelves and flee.

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Authorities also have used the term “smash-and-grab” to describe the trend.

At least two such robberies were reported on Saturday by the Los Angeles Police Department (LAPD) and the Los Angeles County Sheriff’s Department. A local television station, KCAL-TV, counted a total of six smash-and-grab heists on the city’s west side alone on Friday.

In one incident, a group of eight men entered a Home Depot outlet at a shopping mall in Lakewood, south of downtown Los Angeles, walked directly to the tool aisle and snatched a bunch of hammers, sledgehammers and crowbars valued at about $400 before making their getaway, the sheriff’s office said.

According to L.A. television station KTTV, the Home Depot robbery on Friday night involved up to 20 suspects who pulled up to the store in as many as 10 cars and donned ski masks before raiding the tool aisle.

“We tried to stop them,” store employee Luis Romo told KTTV. “We closed the front entrance, and they put their sledgehammers up and whoever got in the way, they were going to hurt them.”

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The Los Angeles City News Service said four suspects in that robbery were arrested on Saturday by Beverly Hills police.

In a similar incident Friday afternoon, a group of 10 men or more invaded a store in the city’s Fairfax district and started grabbing merchandise without paying for it, pushing employees out of the way before fleeing the scene, according to LAPD.

Police are investigating possible ties between that incident and a flurry of other robberies and retail thefts on Friday and earlier in the week, including two smash-and-grabs reported on Wednesday, an LAPD spokesperson said.

The rash of retail crime prompted the LAPD to place its officers on a citywide tactical alert on Friday afternoon.

Mass robberies also were reported on Friday at two Best Buy electronics stores in the Minneapolis-St. Paul area, one of them involving as many as 30 suspects, while a spree of pre-dawn retail burglaries were under investigation in Chicago.

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In one of the biggest flash-mob robberies reported on the West Coast in recent days, police in the San Francisco suburb of Walnut Creek were seeking about 80 suspects who swarmed and ransacked a department store last Saturday.

(Reporting by Steve Gorman in Los Angeles; Editing by Paul Simao)

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