Business

TOKYO — Hundreds of multinational corporations on Tuesday urged Japan to triple its capacity to generate renewable power by 2035, as the heavily coal-dependent country updates its energy policy.

Dubbed RE100, the group of more than 400 large companies that have committed to work towards using all-renewable electricity includes 87 Japanese firms such as Sony and Panasonic.

"By increasing its domestic renewables capacity, Japan can significantly improve its energy security, safeguard its international competitiveness and increase private investment in more renewables projects," the group said.

It called for Japan to use its Strategic Energy Plan — set to be unveiled later this year — to triple installed renewables capacity from 121 gigawatts in 2022 to 363 gigawatts before 2035. 

At the COP28 climate talks in December, nearly 120 nations including Japan pledged to triple the world's renewable energy within seven years — a global effort in which each country's contribution may vary.

Japan, at 22.6 per cent, and the United States are the Group of Seven countries with the lowest share of renewables in their current power generation, according to International Energy Agency figures from 2022.

The Japanese government is targeting carbon neutrality by 2050 but was reluctant to set a date to phase out coal-fired power plants at this year's G7 climate meeting, where ministers agreed to a goal of the mid-2030s.

They also preserved a place for coal power if it is "abated", meaning its emissions are captured or limited by technology — something panned by many as unproven and a distraction from cutting fossil fuel use.

RE100 was founded 10 years ago by the international non-profit Climate Group in partnership with global NGO Carbon Disclosure Project (CDP), which tracks and rates companies' climate pledges.

Ahead of Japan's revised energy strategy, it has set out six policy recommendations to improve "the availability, accessibility and affordability of renewables in Japan".

The world's fourth-largest economy is heavily reliant on fossil fuels, partly because many nuclear reactors remain offline after the 2011 Fukushima meltdown.

NEW YORK — The US Department of Justice (DoJ)  is considering a deal with Boeing that would avoid criminal prosecution of the aerospace giant but may appoint a federal supervisor to oversee company progress on safety improvements, The New York Times reported recently.

People familiar with the discussions told the daily that the terms of the possible alternative settlement, known as a deferred prosecution agreement, or DPA, are still subject to change.

A DOJ official involved in the case, Glenn Leon, chief of the fraud section criminal division, said in an email to a civil party lawyer seen by AFP that the department "has not made a decision" on the path it will take with respect to Boeing.

The DOJ is determining its next steps after concluding in May that Boeing could be prosecuted for violating a criminal settlement following two fatal 737 MAX crashes in 2018 and 2019 which claimed 346 lives.

But the Times, citing sources familiar with the discussions, reported that after substantial internal debate, Justice officials "appear to have concluded that prosecuting Boeing would be too legally risky". 

Officials also reportedly believe that the appointment of a watchdog would be "a quicker, more efficient way" to ensure safety and quality control improvements are made, the newspaper said.

Last month, the DOJ told the judge in the case it would give its decision no later than July 7.

The DOJ's Leon emailed Paul Cassell, a lawyer for families in the criminal case against Boeing, saying the Times reporting "was simply not correct". 

Boeing did not respond to AFP requests for reaction.

No decision 

The troubled planemaker had contested the department's conclusions in mid-June, but has recognised the gravity of the safety crisis and CEO Dave Calhoun told Congress that Boeing is "taking action and making progress".

In January 2021, Justice announced an initial DPA in which Boeing agreed to pay $2.5 billion to settle fraud charges over certification of the 737 MAX. 

But since early 2023, the manufacturer has experienced multiple production and quality control problems on its commercial aircraft, as well as mid-flight incidents including in January when a door plug panel flew off an Alaska Airlines 737 Max 9.

The DOJ says Boeing's violation of several provisions of the initial agreement, including measures requiring it to bolster its internal controls to detect and deter fraud, opened the company to prosecution.

Victims' families have called for the criminal prosecution of Boeing and its executives, and are seeking a nearly $25 billion fine.

A new DPA would allow the US government to resolve Boeing's violations without a trial. 

That could serve as a victory of sorts for Boeing, a company seen as critical to the US aviation industry as well as national security.

Cassell, the families' lawyer, warned against sealing an agreement avoiding trial.

"We hope that the Department is not using its claim to have not yet made a 'final decision' as a ploy to gain additional time to hammer out a DPA deal with Boeing," Cassell said in a statement.

"The first DPA deal failed. There is no reason to think a second one would be any better," he said, adding it's time for "moving forward with a trial and obtaining a guilty verdict against Boeing".

Such lawsuits in the past have forced companies into filing for bankruptcy, the Times reported, and a conviction could potentially prevent Boeing from receiving government contracts.

Boeing's defence, space and security segment generated $25 billion in 2023, nearly a third of the company's sales.

BRUSSELS, Belgium — The growth of business activity in the eurozone slowed down in June after the manufacturing sector posted its biggest decline in six months, a key survey said recently.

The HCOB Flash Eurozone purchasing managers' index (PMI) published by S&P Global recorded a figure of 50.8, down from 52.2 in May and its lowest level in three months.

Any reading above 50 indicates growth, while a figure below 50 shows contraction.

Manufacturing activity slid to 46 in June from 49.3 a month earlier.

The data however "suggested that GDP will continue to expand in the second quarter", S&P Global said. But the lower PMI in June showed growth "may be slower than initially expected", said Bert Colijn, senior eurozone economist at ING Bank.

Economists agreed it was unlikely that the European Central Bank (ECB) would cut interest rates again in July, although there could be further cuts later in the year.

"The HCOB PMI do not provide ammunition for another rate cut in July by the ECB," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank (HCOB).

The situation in France, the EU's second biggest economy, is however weighing on the single currency area's economic performance, according to the economist.

"It is evident that France's poor economic performance has significantly contributed to the deteriorating economic conditions in the Eurozone," de la Rubia said.

The survey showed both services and manufacturing output falling.

De la Rubia said it could be tied to the far right's drubbing of the party of President Emmanuel Macron in EU elections this month and his call for a snap vote on June 30.

"This unexpected turn of events has likely stirred up a lot of uncertainty about future economic policies, causing many companies to hit the brakes on new investments and orders," he added.

Capital economics' Senior Europe Economist Franziska Palmas however warned not to "overemphasise" the point since "the French PMI started falling in May before the political turmoil started".

In contrast, Germany, the EU's biggest economy, recorded a third successive monthly increase in business activity, the survey showed.

BEIJING — China said on Thursday it "reserves the right" to file a suit with the World Trade Organisation over planned new EU (WTO) tariffs on imports of its electric vehicles. 

"China reserves the right to file a suit to the WTO and take all necessary measures to resolutely defend the rights and interests of Chinese companies," Beijing's Commerce Ministry spokesman He Yadong told a briefing. 

The European Union warned on Wednesday it would slap additional tariffs of up to 38 per cent on Chinese electric car imports from next month after an anti-subsidy probe, a move that risks provoking a bitter trade war. 

The European Commission has proposed a provisional hike of tariffs on Chinese manufacturers: 17.4 per cent for market major BYD, 20 per cent for Geely and 38.1 per cent for SAIC. 

The EU said the amount depended on the level of state subsidies received by the firms. 

Beijing condemned the move on Thursday as lacking a "factual and legal basis". 

"This action not only harms the legal rights and interests of the Chinese electric vehicle industry... but will also distort auto production and supply chains around the world, including in the European Union," He said. 

"The actions by the European side are suspected of violating WTO rules and are naked protectionist behaviour," he said. 

AMMAN — Deputising for HRH Crown Prince Hussein, Deputy Prime Minister for Economic Affairs and Minister of State for Public Sector Modernisation Nasser Shraideh on Tuesday inaugurated the first European Union-Jordan Business Forum.

The forum, organised by the European Union Delegation to the Kingdom in collaboration with the Ministry of Investment, aims to open and explore investment and trade opportunities as well as economic partnerships and cooperation between the Kingdom and EU.

The one-day forum, under the theme of "Digital and Green Jordan: Pioneering the Future of Business", saw significant participation from Jordanian and European businesspeople and entrepreneurs in the fields of green energy, the digital economy, and industry, was attended by Vice President of the European Investment Bank Gelsomina Vigliotti, and government officials, investors, representatives of public and private banks, and industry experts. 

Participants engaged in bilateral meetings to discuss key issues hindering bilateral trade and investment between the Kingdom and EU countries and explored tangible ways to overcome these challenges.

The forum also addressed investment opportunities for European companies in Jordanian and regional markets, highlighted success stories of European and Jordanian companies operating in the Kingdom, and went over sustainable initiatives and opportunities in green industries, the digital economy, and trade.

Minister of Investment Khuloud Saqqaf emphasised the importance of holding the forum, noting that it is a pivotal event reaffirming Jordan’s commitment to fostering a business-friendly environment and attracting foreign investment.

She added that despite external shocks and challenges faced by the Kingdom, and the geopolitical uncertainty in the region, the Jordanian economy has continued to demonstrate resilience against these challenges, achieving numerous positive economic indicators such as satisfactory economic growth rates and the lowest inflation rates compared to other countries in the region and the world, along with "comfortable" foreign currency reserves.

Saqqaf pointed out that while many countries in the region and the world have faced credit rating downgrades, Moody's Investor Service upgraded Jordan's sovereign credit rating for the first time in 21 years. 

This upgrade reflects the effective and prudent management of the Kingdom’s fiscal and monetary policies, the minister said, adding that the successful completion of the seventh review of the International Monetary Fund’s programme for 2023 reflects the government's commitment to adopting stable and secure economic, fiscal and monetary policies.

She noted that Jordan is heading towards diversifying energy resources through big investments in the renewable energy sector, pointing out that the Kingdom ranks first in the Middle East and North Africa in terms of the contribution of renewable energy to the overall energy supplies.

Ambassadors of the EU to Jordan Pierre-Christophe Chatzisavas said that the forum is a "testimony" of the "solid" relations between Jordan and the EU, which are based on a joint vision for economic prosperity and sustainable development.

Chatzisavas noted that the forum will open opportunities to Jordanian and EU companies to display their products and services, and provide a platform to develop dialogue among commercial facilities. 

On the sideline of the forum, thematic dialogue sessions were held to focus on three crucial sectors with outstanding growth potential which are green growth and renewable energy specifically Hydrogen and clean technologies, as well as digital and technology, as well as Exports and scaling up industrial operations in the fields of textile, pharmaceutical and agro-processing. 

AMMAN — The Association of Banks in Jordan (ABJ) on Tuesday hosted the second edition of the "Green Finance Forum (GREEFIN): A Strategic Necessity for the Banking Future", which focuses on taking a holistic approach to accelerating green finance practices.

The GREEFIN forum is an annual event aimed at promoting dialogue and cooperation within the banking sector and relevant stakeholders, to advance green finance initiatives, according to an ABJ statement sent to The Jordan Times.

In its second edition, GREEFIN saw several sessions which mainly discussed the importance of green finance, and the current market trends, thereby sharing regional and global experiences with the greening of the banking sector.

The forum was attended by banking sector representatives, CEOs and senior executives, sustainability officers, risk management specialists, environment economists, NGOs, regulators and government officials.

Governor of the Central Bank of Jordan (CBJ) Adel Sharkas said, “Green finance is a strategic imperative for the future of the banking sector.” 

According to Sharkas, climate change has become among the top issues at the world level, due to its social, environmental and economic implications and dangers.

The CBJ launched its (2023-2028) Green Finance Strategy in late 2023, which was prepared with the World Bank Group, in partnership with the ABJ and other relevant stakeholders. The strategy is considered the roadmap to enable the local banking sector to strengthen green finance and reduce the risks of climate change.

Director General of ABJ Maher Mahrouq said that the forum spotlights the reality and future of green finance in Jordan, and is part of ongoing efforts of ABJ to strengthen orientation towards green finance.

AMMAN — The Consumer Price Index (CPI), a measure of inflation, went up to 110.29 points in the first five months of 2024, compared with 108.50 in the same period of 2023, marking an increase of 1.65 per cent, the Department of Statistics (DoS) announced on Tuesday.

In its monthly bulletin, the DoS noted that the personal belongings sub-group was responsible for 8 per cent of the index increase, water and sanitation contributing 7.34 per cent, unions by 5.86 per cent, tobacco and cigarettes by 4.24 per cent, and rents by 4.12 per cent, the Jordan News Agency, Petra, reported.

In May, the inflation rose to 110.58 points, compared with 108.62 points for the same month in 2023, recording an increase of 1.81 per cent.

The department also noted that the personal belongings sub-group was responsible for 10.75 per cent of the May 2024 increase, water and sanitation by 7.34 per cent, meat and poultry by 6.46 per cent, unions by 5.86 per cent, and rents by 4.12 per cent.

The oil sub-group contributed to reducing the rise in May by 2.44 per cent, clothes by 1.63 per cent, furniture and carpets by 1.24 per cent, and home textile by 1.20 per cent, the department added.

AMMAN — Minister of Planning and International Cooperation Zeina Toukan and Vice President of the European Investment Bank (EIB) Gelsomina Vigliotti discussed opportunities and areas of cooperation aimed at supporting development priorities in line with the Economic Modernisation Vision (EMV).

During the meeting, the two sides discussed supporting the implementation of several priorities within the EMV and its executive programme for 2023-2025, as well as capital projects and public-private partnership projects, the Jordan News Agency, Petra, reported.

The minister praised the assistance provided by the bank through loans, investment and technical grants, which contributed to funding projects in key sectors such as water, sanitation, energy, transport, healthcare, industry, mining, education, private sector development and infrastructure. 

The EIB assistance also included financing Jordanian banks to provide intermediary lending support to small- and medium-sized enterprises and preparing technical studies and economic feasibility for projects in these sectors.

The bank has financed a range of vital projects in the Kingdom, such as the Disi Water Conveyance Project, the Wadi Arab Water Project for the northern governorates, supporting water sources in the Jordan Valley, water supply and sanitation for the Deir Alla and Al Karamah areas and the purchase of vaccines as part of the response to the COVID-19 pandemic. 

Also, the EIB has pledged support to the Aqaba-Amman Water Desalination and Conveyance Project — the National Water Carrier.

Vigliotti stressed the bank's understanding of the Kingdom's development needs and its aspiration for further cooperation and partnership with the Kingdom to support areas and sectors of mutual interest, such as digitalisation, energy, the environment, and climate change, in line with the priorities and projects included in the executive programme of the EMV.

On the sidelines of the meeting, Tiukan signed an agreement to establish and manage the bank’s representation in Jordan, indicating that this would enhance the "longstanding cooperation relations" between the two sides, which were enhanced by signing a framework agreement in 1997. 

The bank announced providing a grant to enhance the resilience of the public health sector in Jordan and support the purchase of 12 ambulances worth 990,000 euros, which will enhance the Ministry of Health’s emergency response capabilities.

The ambulances are expected to be deployed in Amman and northern regions, including areas hosting Syrian refugees, to enhance emergency medical services, ensure better access to healthcare, and improve response times for medical teams.

Vigliotti expressed EIB's pleasure to provide new support for healthcare in Jordan and support the purchase of 12 new ambulances from the bank's Economic Resilience Initiative Fund. 

The bank's portfolio in the Kingdom grew during the 2014-2024 period to nearly 1.8 billion euros, focused on sectors such as water, health, transport, energy, urban and municipal development, and lending to local companies and commercial banks to support micro-, small-, and medium-sized enterprises.

Separately, Toukan discussed with Canadian Minister of Development Ahmed Hussen the importance of continuing and enhancing the development cooperation programme directed towards Jordan to support priorities stemming from the EMV and its executive programme for 2023-2025.

The two sides, during their meeting on Monday evening, stressed the importance of Jordan benefitting from future Canadian international development cooperation programmes in sectors such as health, vocational and technical education and climate change, including the potential networking opportunities with international, UN, and multilateral institutions to support new projects.

Hussen reiterated Jordan’s priority for his country due to its effective implementation of "purposeful" development programmes and Canada’s intention to continue supporting the Kingdom’s development priorities and increasing support opportunities for capacity-building projects in targeted sectors. 

He praised the Kingdom's role in hosting large numbers of Syrian refugees.

AMMAN — The ongoing Israeli war against Gaza has impacted the Kingdom’s economy, notably the tourism sector.

An International Monetary Fund (IMF) report said that the current impact of the war on Gaza is concentrated on the tourism sector as a result of the cancellations by tourists from advanced economies, which account for a third of tourism revenues.

Bookings cancelled in the last quarter of the previous year reached at least 65 per cent, largely due to the Israeli war on the Gaza Strip, according to official estimates. 

The number of tourists arriving in the Kingdom in the first four months of 2024 dropped by 8.8 per cent compared to the same period of 2023, according to figures by the Ministry of Tourism and Antiquities.

In 2023, the Kingdom’s income from tourism increased by 27.4 per cent, according to the data issued by the Central Bank of Jordan (CBJ) in January.

The Ministry of Tourism and Antiquities’ first-quarter report for 2024, providing a detailed overview of income, visitor statistics and strategic objectives for the upcoming year, showed a 9.7 per cent decrease in tourist arrivals compared with the same period in 2023, with the total number of visitors reaching 1.334 million.

The report attributed the decline in numbers to regional events that have impacted the sector’s performance, leading to a 5.6 per cent drop over the same period, adding that despite these challenges, the tourism sector has shown resilience.

The Central Bank of Jordan has reported that tourism revenues in the first four months of the year totalled $2.1 billion, marking a decrease of 4.9 per cent compared with the corresponding period of 2023. Tourism revenues in April also went down by 2.6 per cent to $529 million, compared with the same period of last year.

Tourism revenues exceeded projections for the first three quarters of 2023, showing a 27.4 per cent increase and setting a "historical" precedent at JD5.2 billion, according to the CBJ.

According to the IMF's first review under the IMF Extended Fund Facility (EFF) last month, despite the ongoing war in Gaza, Jordan should be able to navigate the associated challenges well, provided there is no significant regional escalation.

This resilience is attributed to the authorities’ strong commitment to sound macroeconomic policies and advancing structural reforms. Growth is expected to moderate to 2.4 per cent in 2024 and rebound in 2025.

The IMF also noted that strong and timely international support remains crucial for helping Jordan cope with external pressures and the financial burden of hosting a large number of Syrian refugees.