EU AT1 debt reform to bolster bank resilience
An ECB-rooted reform proposal aims to repurpose AT1 CoCo debt into a credible bank recovery tool with higher equity content and a supervisor-driven conversion mechanism.
A CEPR analysis argues that current AT1 instruments have not delivered the ex-post resilience they were meant to provide, instead functioning largely as debt. The authors contend that making CoCo bonds a genuine buffer requires both binding changes to the trigger and a supervisory mandate to activate conversion when a bank is viable but undercapitalised. They draw on historical episodes to illustrate how late or ambiguous conversions have backfired, amplifying instability and policy costs.
The piece stresses that a higher equity content would align AT1 with its foundational objective of supporting bank recovery, not merely absorbing losses after a default. It proposes triggers calibrated to ensure conversion occurs before a bank teeters, with a supervisory decision central to activation rather than a purely market-driven event. The authors caution that credibility hinges on transparent thresholds, predictable timeliness, and a framework that separates going-concern risk absorption from resolution planning.
Questions of investor rights and due process are central. The authors argue for a legal protocol that legitimises supervisory discretion while setting proportionality standards, preventing forbearance and avoiding policy missteps. They emphasise combining private, public, and professional signals to form a robust trigger basis, rather than relying on single indicators. The overall thrust is that reform could strengthen a critical, contingent tool at a moment when markets question the resilience of EU banks to large shocks.
This framing positions reform not as a retreat from stability but as a recalibration of the balance between ex-ante buffers and ex-post capabilities. If credibly implemented, the reform could reduce the expected burden of taxpayer support and improve confidence in the European banking system during periods of high systemic risk. Yet the authors acknowledge political and legal complexities, making the timing and design of any mandated reform a decisive factor for its success.
Low Prices, Strong Demand, and the Cracks in the Oil Glut Story
A convergence of demand strength and supply discipline challenges the glut narrative, with evolving forecasts shaping near-term price dynamics.
The IEA is projected to show global oil demand rising by about 930,000 barrels per day in 2026, a step up from 2025’s estimated growth. This stands in contrast to a December 2025 report that showed a decline in supply, with production dipping to around 107.4 million barrels per day and a sizeable stock build over 2025. The narrative emphasises that a robust demand outlook and a softer price environment can coexist with limited spare capacity, complicating the conventional glut story.
Analysts note that the divergence between demand signals and supply responses matters for policy and margins. If spare capacity remains constrained while demand accelerates, price volatility could rise despite a superficially well-supplied market. The analyst community remains divided between IEA projections and OPEC+ forecasts, with leaders in both camps arguing their frameworks better reflect evolving market fundamentals.
The report highlights the need to monitor shifts in spare capacity as capacity additions and demand signals evolve. An upward shift in demand or tighter spare capacity could reintroduce price upside risk, even as current forecasts suggest a moderation in the glut narrative. Traders and policymakers will be watching how capacity discipline and demand momentum interact in the coming months and how different forecasts converge or diverge.
Observers also flag potential misalignments between forecasts and real-world price pathways. If forecasting accuracy deteriorates, it could prompt shifts in hedging, inventory management, and policy actions. The complexity of balancing competing forecasts underscores the fragility of the “glut” premise and suggests a more nuanced price outlook in 2026.
Frankfurt Region Grid, Storage and Hydrogen-Ready Capacity
Uniper and TenneT outline a cross-border transmission and storage expansion designed to support data-centre growth and future hydrogen-ready generation.
Plans for a new 380-kV switchyard at Grokrotzenburg to support expanding data-centre demand, hydrogen-ready CCGT, and battery storage form the backbone of a regional resilience push. The project includes a nine-kilometre upgrade to replace part of a 380-kV line and is positioned to expand transmission capacity in the Frankfurt region by more than half when commissioned around 2030.
Regulatory approvals and milestone dates will determine the pace of the project. The venture underscores Europe's emphasis on transmission expansion, flexible generation, and storage to accommodate a growing demand base and the energy transition. Observers will watch for siting decisions, grid integration studies, and the sequencing of planning consents, all of which could shape the timeline.
The initiative is framed as a critical node in European energy security, linking industrial growth with decarbonisation objectives. If regulatory hurdles are cleared on schedule, the project could anchor a more resilient transmission backbone while enabling larger, more agile capacity to respond to fluctuating demand and renewable output.
The plan also signals the importance of cross-border cooperation in ensuring grid reliability and market integration. Its success will depend on timely regulatory sign-offs, cost-control measures, and alignment with broader European grid strategies that prioritise decarbonisation and resilience.
Deep-Sea Mining Permits Under New Licensing Framework
A streamlined NOAA framework accelerates licensing for the Clarion-Clipperton Zone, with potential access to hundreds of millions of tonnes of polymetallic nodules.
The Metals Co seeks a permit to operate in the CCZ under the revised NOAA framework, which aims to accelerate licensing and bring new sources of critical minerals into play. Two zones in the CCZ are thought to hold about 800 million metric tonnes of nodules, with Glencore already signalling intent to purchase metals from seabed sources. The prospect offers the potential to unlock large supplies of minerals crucial to the energy transition, albeit amid longstanding environmental and governance debates.
Watchers emphasise environmental safeguards and governance as central to sustaining social license to operate. Licensing decisions by NOAA and the International Seabed Authority will be pivotal, with year-end milestones closely tracked for potential approvals or constraints. The developments could shift capex and supply chain dynamics for critical minerals, even as public scrutiny and political economy concerns persist.
Industry participants warn that threats to permit timing or scope could stall projects or complicate investment plans. Should licensing proceed, suppliers and downstream users will weigh the economics of seabed minerals against environmental, social, and governance considerations that influence policy and public sentiment.
The broader implication is a potential reconfiguration of the minerals landscape for the energy transition, with seabed resources offering a new frontier for supply security. Yet the ultimate realisation depends on regulatory clarity, credible environmental safeguards, and investor confidence in governance mechanisms.
Nigeria CVFF Disbursing for Local Shipowners
The cabotage vessel financing fund portal opens access to loans designed to grow Nigerian tonnage and regional trade capacity.
The Nigerian government has launched the CVFF portal, enabling qualified applicants to access loans up to $25 million, with 70 percent of the loan funded by the facility and the remainder requiring equity and bank involvement. Loan terms span eight years at 6.5 percent interest, with a minimum equity contribution of 15 percent and 15 percent sourced from partner banks. The fund is framed as a lever to expand coastwise shipping capacity and bolster local employment as cross-border trade grows.
Uptake of CVFF loans will be a key near-term indicator of the programme’s effectiveness. If demand is robust, the programme could accelerate the growth of Nigerian tonnage and strengthen domestic shipping capacity, with spillovers into logistics and regional connectivity.
The policy line reflects broader diversification aims for Nigeria’s energy and trade profile, tying financing to national objectives around local content and shipbuilding capabilities. Observers will watch for deployment patterns across different vessel types and regional hubs as the programme matures.
The initiative comes within a wider dialogue about financing mechanisms for local industry. If uptake proves sustainable, it could influence policy design for similar programmes elsewhere, and contribute to a more balanced financing ecosystem for transport and trade infrastructure.
CMA CGM Puts 400th Owned Ship in Service
The CMA CGM Monte Cristo enters service as part of a fleet strategy that blends growth with a tilt toward lower-carbon fuels.
CMA CGM announces its 400th owned vessel, the Monte Cristo, a methanol dual-fuel ship, within a fleet that exceeds 650 vessels and aims for roughly 200 dual-fuel LNG/methanol ships by 2031. The milestone underlines continued fleet expansion and a strategic push into low-carbon propulsion as liner markets seek to balance growth with decarbonisation.
Industry observers will monitor the maiden voyage and subsequent deployment as the fleet evolves. The shift toward methanol and other alternative fuels reflects broader sector dynamics around fuel choices, regulatory pressures, and the economics of achieving greener operations at scale.
The development signals competitive pressure for traditional carriers and a broader transition in fleet technology. Tracking progress of the dual-fuel programme will be important for assessing how quickly the sector can scale low-carbon technology and how this reshapes competition in global trade routes.
Solar Longevity Beyond 25 Years
Long-running solar arrays continue to produce the majority of their original output, supporting a re-assessment of lifecycle economics and recycling needs.
A recent thread highlights studies suggesting that solar panels from the late 1980s remain capable of delivering well over 80 percent of initial output, challenging the conventional assumption that efficiency collapses after 25 years. The long-horizon economics appear more favourable when warranty and lifecycle data are weighed against ongoing performance and potential repowering cycles.
Polls and technical discussions emphasise that warranties may not capture the full picture of longevity or future value recovery. Observers stress the importance of updated performance data and clear warranties or disclosures on degradation rates as more systems reach midlife.
The discussion also touches on recycling economics and end-of-life considerations, arguing that the environmental and economic calculus evolves as panels age and recycling technologies mature. As markets price long-term resilience and capital costs, solar longevity data could influence investment timing and repowering decisions.
US DOE Clean Energy Loan Cancellations
The department withdraws $30 billion in clean energy loans, signalling a shift in energy transition financing and project timing.
The DOE’s decision to cancel or reprogramme roughly $30 billion in clean energy loans represents a material policy shift with potential implications for project pipelines and private capital mobilization. The move raises questions about the balance between policy objectives and budgetary constraints, and what it means for near-term energy transition financing in the United States.
Observers will watch for subsequent DOE statements, changes in loan programme allocations, and how project timing could be affected as a result. The decision may influence investor sentiment and the pace of adoption for certain technologies or deployment strategies within the U.S. energy landscape.
The broader context involves how policymakers manage the funding environment for ambitious transition plans, including potential reallocation toward different instruments or regions. The policy shift could alter the risk appetites of developers and financiers, with ripple effects across the energy infrastructure sector.
Iran risk & oil markets
Geopolitical risk around Iran remains a calibration point for oil balances and shipping routes, with Hormuz a critical choke point.
Iran exports an estimated 2-3 million barrels per day, and Hormuz remains a potential break-glass scenario for global flows. Disruptions would alter balances and could shift price trajectories, with around 15 million barrels per day of flows moving through Hormuz and LNG markets accounting for a significant share of global energy trade. Brent forecasts in 2026 sit in a band that could be affected by these dynamics.
Sanctions developments, tanker routing, and price moves will be key indicators to watch on the geopolitical front. Increases in risk premia or disruptions to routes could lead to increased volatility in oil and LNG markets, impacting prices and supplier strategies.
Observers stress that policies and diplomacy will directly shape how these risks unfold. The intersection of geopolitics and energy markets remains a central determinant of near-term price behaviour and risk management for global energy consumers and producers.
Note
The remaining stories include broader 2026-oriented market signals and micro-level industry discussions drawn from the web ecosystem. Each piece adds a distinct lens on energy, metals, and macro markets, reinforcing the importance of credible signals, governance, and timely policy actions in shaping near-term outcomes.