Category: 3. Business

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The boss of one of Europe’s largest grid operators has warned that too many speculative and unprepared projects are holding up grid connections for critical energy projects and causing years-long queues.

Bernard Gustin, chief executive of Elia Group, which operates the Belgian and parts of the German grid, said that operators of network infrastructure should be able to allocate connections to projects that are ready, rather than those that applied first.

‘‘I think in Belgium we have 10 times more projects [than] needed until 2030,” he said, referring to battery storage projects. “If you change from first come, first served to first ready, first served, then you will focus on the ones who are really serious because they have everything [ready].”

Grid connections have become a huge issue for European countries. Many are trying to manage a rapid increase in demand for grid access as more industrial plants and households install wind and solar power that can go into the grid, as well as an increasing number of applications from data centres to use energy from it.

In some countries, such as the Netherlands, queues to be connected to the grid stretch more than seven years. In Slovakia, about 50 per cent of capacity reserved for connection remains unused, according to commission figures. In Germany, there are twice as many requests to add battery storage to the grid as is planned in the country’s grid development plan, an Elia Group report found.

The rollout of renewables in the EU has outpaced the infrastructure needed to support it, as countries race to meet renewable energy targets set by Brussels and move away from imported fossil fuels. The European Commission has estimated that €1.2tn needs to be spent on the EU’s grids by 2040 in order to support the transition.

Gustin said that grid operators are competing for funding to rapidly build out networks and upgrade infrastructure to balance the volatility of wind and solar energy.

After years of stagnant investment levels, “we all have huge capex plans, so big that you need to be able to finance them, which is a challenge”, he said.

Costs from grid congestion — where cheap electricity cannot flow to where demand is so people have to pay for higher cost sources — are rising. Acer, the EU energy regulator, has said that they reached €5.2bn in 2022 and could rise to €26bn by 2030.

In a document published in December, Brussels set out recommendations to prioritise connections to the grid. The commission also said that it would take a more top-down approach to energy infrastructure planning in order to accelerate the build-out and ensure costs were shared between EU countries.

“In Europe it’s a huge problem and we lose billions every year in lost value because of curtailment and bottlenecks,” EU energy commissioner Dan Jørgensen told the Financial Times.

In a report on energy storage, Elia Group found that the first 100GW of installed batteries in Europe would reduce the curtailment of renewable power by 13 per cent, meaning that 13 per cent more power would be available.

Elia plans to spend €31.6bn on grid upgrades until 2028, split roughly one-third to Belgium and two-thirds to its German arm. To deal with connection demands from batteries, data centres and renewable energy installations could cost an additional €10bn, Gustin estimated.

“These are not small amounts . . . you have a lot of people saying we don’t want tariffs to go up on energy, electricity is not competitive. And so we have a first challenge [which] is how do we make sure, given the amounts we need to raise, that we have a competitive return on equity?”

Gustin, who was formerly chief executive of Brussels Airlines, oversaw a €2.2bn capital raise earlier this year, bringing in investors such as BlackRock and the Canadian pension fund CPP.

Often the length of time it takes to grant permits for infrastructure projects is seen as a risk factor by investors, he said, with permitting times in Belgium running up to eight years.

“By [that] time inflation and the price have increased and some investors are telling you these were not the conditions we had at the start, we cannot continue,” he said.

The EU’s recent legislation aims to speed up permitting times by setting time limits for permit deliberations and proposing that energy projects should be seen as having an overriding interest.

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Chinese authorities are raking in more tax from online vendors as part of a crackdown triggered by Beijing’s desire to bolster revenues to compensate for slowing economic growth.

Since a new law came into effect in October, platforms such as Alibaba, Shein and Amazon have been submitting data that indicates merchants’ profits, including names, orders, sales and virtual gifts or digital tokens, according to documents released by local tax bureaus.

More than 7,000 ecommerce platforms had reported tax-related information by the end of the third quarter, said Lian Qifeng, a director of tax for the State Taxation Administration, at a briefing in December.

This had contributed to a 12.7 per cent rise in tax revenues from ecommerce platforms in the third quarter from a year earlier, he said. He did not provide an overall figure.

With China’s economy expanding at its slowest pace in a year in the third quarter, authorities are keen to counter the effects of the US trade war and a lingering property downturn. The collapse of land sales and slowing economic growth have also increased pressure on Beijing to find new sources of fiscal revenue, including from merchants and live streamers on online platforms.

The State Taxation Administration has launched several campaigns to boost collection, including pressing mainland investors to pay taxes of 20 per cent on their global capital gains. It has also curtailed incentives in regions blamed for fuelling industrial overcapacity and launched a nationwide crackdown on evaders who inflated invoices to claim fraudulent rebates.

Online sales of physical goods were Rmb12.8tn ($1.8tn) in 2024, almost 27 per cent of China’s total retail sales, according to data from the national statistics bureau, but analysts say their share of the tax take is often lower. While the submission of sales data has been mandatory since 2019, implementation was lax and the new law sets clear deadlines for submission.

Lian said tax authorities had issued repeated reminders to vendors whose self-declared income was substantially lower than the amounts reported by platforms. That had “significantly narrowed the gap of tax burden between online and offline merchants”, he said.

“Data-driven taxation has become the ultimate weapon in the authorities’ toolbox,” said Quan Kaiming, Shanghai-based partner at Allbright Law Offices, adding that the rise of the platform economy had shaken up traditional tax governance.

The new tax reporting rules helped close the gap, promoting fair competition but also raising compliance costs and data security risks, Quan said. “The tax risks are particularly high for influencers and livestreaming platforms,” he added.

For merchants whose current margins are thin, a higher value added tax — 13 per cent for companies whose sales exceed Rmb5mn — could be devastating.

“This will kill us, everyone. We were not paying any tax before and that’s the biggest benefit of selling online,” said a Quanzhou-based Amazon exporter surnamed Huang, whose online sales of household goods and toys to overseas clients can be as much as Rmb200mn a year.

“Profit margins on Amazon for sellers average around 8 per cent and rarely does anyone exceed 20 per cent,” Huang told the Financial Times. “It is not reasonable at all for cross-border merchants like us to pay a tax as high as 13 per cent.” 

Zeng Jianwei, a Guangzhou-based merchant who sells pet merchandise on Amazon, also voiced concern. “The business is already bad . . . . My sales declined by 20 to 30 per cent [in 2025], and now it’s likely to get even worse.”

Zeng said his strategy was to wait and see. “Maybe after the tax bureau hits its collection quota from larger sellers, they will go easier on us.”

Amy Lin, sales manager at a footwear supplier to Shein, expects most sellers to increase prices. “The ecommerce industry has not been doing too well.” 

Alibaba, Shein and Amazon did not reply to requests for comment.

Additional contribution by Cheng Leng and Tina Hu in Beijing, William Langley in Guangzhou and Rafe Rosner-Uddin in San Francisco

Staff Writer

Jan 3, 2026 10:15pm

Delta began cancelling flights early Saturday morning in compliance with FAA airspace closures in the Caribbean.

As cancellations are processed, customers will receive notifications via the Fly Delta app and contact information listed in their reservation.

Editor’s note: This article originally appeared on Morningstar’s US site and has been amended for an Australian audience. The insights in this piece are globally focused, but we have determined that the findings are still relevant for Australian audiences.

Key takeaways

• Private credit quality looks likely to deteriorate in 2026.
• Despite stronger sales growth, EBITDA margins remain stressed for many borrowers.
• Increasing debt balances signal a pickup in acquisition activity.

The Morningstar DBRS outlook for private borrower credit quality trends remains negative as we head into 2026. Fundamental operating results show an increase in borrowers experiencing margin compression from a year ago. Leverage has also increased materially for many borrowers, spurred by lower base rates and an uptick in acquisition activity among higher-rated borrowers. Meanwhile, the weakest borrowers in our portfolio will remain pressured by weak top-line performance, shrinking margins, and the erosion of already-constrained liquid resources.

We view more restrictive and rapidly changing global trade policy as a key threat in 2026. As the full impact of tariffs and other policy changes during 2025 flow through results, we may see an acceleration in the margin compression trends we are already observing.

Other key highlights:

• The trend in credit metrics is weaker at both ends of the ratings spectrum.
• Increasing debt balances signal a pickup in acquisition activity.
• Private borrowers remain proactive in managing loan maturities.

The weakest borrowers continue to face weak top-line performance, shrinking margins, and erosion of already-constrained liquid resources. In our September 2025 commentary highlighting private borrower reliance on capital support, we reported that borrowers operating under covenant relief expanded from 9% to 10% of active borrowers over the past year. We also noted that roughly 40% of these borrowers face significantly weakened liquidity positions relative to capital needs over the next year. We expect this group to continue to lead downgrades and defaults next year.

The distribution of EBITDA margin remains skewed toward a net contraction, with 61% of borrowers indicating weaker margins over the past year. The largest proportion of borrowers (35%) experienced margin contraction between zero and negative 250 basis points.

A deeper look into financial results for borrowers active for more than one year reveals more broad-based weakness. Approximately 12% now have cash flow below zero, while 13% have IC ratios less than 1 time (x). For comparison, 7%-8% of comparable borrowers a year ago had cash flow below zero or an IC ratio below 1x.

Much of the expansion in these proportions appears to be in the B rating range. In the CCC and lower range, we note only modest expansion in the higher risk proportions: 55.6% of borrowers with cash flow below zero compared to 54% a year ago and 57% with IC ratios below 1x compared with 55.6% a year ago.

Despite an acceleration in debt growth among European borrowers, we still view credit quality among borrowers in the region as better positioned relative to U.S. borrowers. Compared with Europe, the U.S. group continues to face a greater degree of margin compression, mitigating the positive effect from recent base interest rate reductions.

Meanwhile, European borrower results reflect relatively stable cash flow metrics and improved interest coverage ratios, indicating a greater degree of cash flow flexibility relative to the United States.

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WASHINGTON:

President Donald Trump on Friday blocked US photonics firm HieFo Corp’s $3 million acquisition of assets in New Jersey-based aerospace and defence specialist Emcore, citing national security and China-related concerns.

In an order released by the White House, Trump said HieFo was “controlled by a citizen of the People’s Republic of China” and that its 2024 acquisition of Emcore’s businesses led the president to believe that it may “take action that threatens to impair the national security of the United States.”

The order did not name the individual or detail Trump’s concerns. “The Transaction is hereby prohibited,” Trump said, ordering HieFo to “divest all interests and rights in the Emcore Assets, wherever located,” within 180 days.

The Committee on Foreign Investment in the United States identified a national security risk in its investigation of the deal, the Treasury Department said after Trump’s order. The statement did not specify the national security risk.

HieFo and Emcore could not immediately be reached for comment.

Emcore, publicly traded at the time of the deal and later taken private, has said HieFo bought its chips business and indium-phosphide wafer-fabrication operations for $2.92 million. HieFo said at the time that it was co-founded by Genzao Zhang, a former Emcore vice president of engineering, and Harry Moore, whose LinkedIn profile describes him as a former senior sales director at Emcore.

Many small businesses in Colorado have taken a significant hit due to tariffs. While some of those businesses are passing along the increased costs to customers, a local liquor store is doing the opposite and reducing its prices for wines and spirits.

At Mr. B’s Wine & Spirits, they’re in the spirit of helping customers.

“We’re just trying to think put ourselves in the shoes of the consumer, and if they continue to see prices go up, they’re going to not shop with us,” said General Manager Ryan Corey.

They bring in products from all over the world, including Europe, Canada and Mexico, all hit with tariffs.

Corey said around 65% of their wine selection has been impacted by tariffs, and more than half of their products have increased in cost in the past year.

“They’ve all been affected some way, somehow, by tariff increases upwards of 20% at some points. These prices have been absorbed by either us or the importers,” said Corey.

Instead of bottling up the tariff costs and passing them along to customers, they’re reducing prices instead.

“We’ve taken a different approach and taken a look at basically every single product in the store, bottle by bottle, and looked at it, looked at our margins, strategize how we could get those prices lower, and still be able to be a sustainable and successful business,” said Corey, who added some bottles of wine have gone down $1 up to $10.

Meanwhile, at Blue Spruce Chocolates in Kittredge, owner Mark Joyce imports the beans from Ecuador, Peru and Bolivia. What is not so sweet, he says, are soaring cocoa prices and tariff impacts.

“When I buy a bag of beans now from our distributor, there’s a line item on the invoice for the tariff that’s been applied to the beans. A bag of beans is now 15% more than what it was in January,” said Joyce.

Joyce added that the ingredients to make the chocolates have also been impacted by tariffs. He said they import their cocoa butter, vanilla, and even the packaging, all of which have been affected. Joyce said due to the increased costs, the chocolate shop had no choice but to raise its prices.

“We just can’t absorb that, 15% is just too much for a small business to try to absorb. So, we’ve had to pass on the cost of the tariffs to our customers,” said Joyce. “We’re quite transparent with our customers too that the prices have increased.”

While the liquor store is looking at its margins and losing a little bit of profit with its price reductions, it’s gaining support and hopes to bring in more customers with the change.

“We can survive the pressures and competitions with the grocery stores and the big box stores, so small stores like us can find consumers to come shop with us over and over again,” said Corey. “We’re going to lower our prices and hopefully make you feel more comfortable with what we have on the shelves.”

Corey said they began rolling out the price reductions in early November, right before the holidays, and will continue the price reductions indefinitely. He added that in December 2025, the store did better than it did the year before.

Passenger advocacy group, Campaign for Better Transport, wants those cheaper prices expanded beyond the app.

“It’s fantastic to see innovative schemes like this that make use of the latest technology for smart phones,” says policy and campaigns chief Silviya Barrett.

“But not everyone has access to this. So what we would like to see is schemes like that extended to other platforms, so that everyone can access the best prices, regardless of how they buy their train tickets.”

In November, the government announced rail fares in England would be frozen next year for the first time in 30 years.

The freeze until March 2027 will apply to regulated fares, which includes season tickets and off-peak returns.