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By Timothy Gardner

WASHINGTON (Reuters) -U.S. oil majors Exxon Mobil Corp and Chevron Corp have failed to meet a core transparency standard set by the Extractive Industries Transparency Initiative, a global anti-corruption body on which the companies have board seats, EITI said on Wednesday.

Exxon and Chevron have declined to publicly disclose taxes and other payments they have made to governments in the countries where they operate that are not EITI members, the group said in a spreadsheet detailing member company adherence to its standards.

Norway-based EITI, founded two decades ago, has about 55 country members. It implements voluntary global standards to promote open and accountable management of oil, gas and mineral resources to prevent corruption in all resource-rich countries.

Countries that Exxon has operated in that are not EITI members include Qatar, Pakistan and India, according to its company website. Non-EITI countries that Chevron has operated in include China and Angola.

ConocoPhillips, which is not on the EITI board, is another member that does not disclose payments to countries not in EITI, the group said. It has had operations in countries including Libya, Malaysia and China.

Exxon spokesperson Casey Norton said Exxon complies with all laws that are in effect today.

Chevron “supports efforts to promote revenue transparency that do not competitively disadvantage impacted companies and their shareholders,” spokesperson Sean Comey said.

Conoco spokesperson Dennis Nuss said the company had no comment.

EITI’s release, based on publicly available information, could add pressure to the companies, already under fire from shareholders, activists and lawmakers for greenhouse gas emissions driving climate change.

It also highlights a widening governance rift between U.S.-based oil majors and those in Europe, which are widely seen to be doing better on climate and transparency.

European-based companies BP, Shell and Total all publicly disclose their taxes and payments to non-EITI countries, the group said.

EITI published the data for the first time since the standards were introduced in 2018, after pressure from civil society groups including Publish What You Pay-US (PWYP-US) and Oxfam America.

It is not mandatory that the companies, which as EITI members make annual payments to help fund the group’s management, follow the group’s standards.

But EITI Board Chair Helen Clark said in July, without elaborating, that the board’s oversight committee would consider consequences for companies not meeting the group’s expectations, possibly in October.

Clark said on Wednesday that publication of the companies not following expectations will help EITI members “engage in dialogue to improve corporate accountability and transparency.” She said work remains to clarify the expectations, “but our hope is that it will encourage a ‘race to the top’ to meet or exceed them.”

The U.S. Securities and Exchange Commission is set to consider in April implementing a measure of the 2010 Wall Street reform law known as Dodd Frank that would require disclosures from energy and mining companies on payments to all foreign governments.

PWYP-US said the U.S. companies supporting EITI were getting the reputational benefit of EITI participation without meeting the basic expectations for membership.

EITI’s company members and particularly those on its board must ensure that group’s credibility is not weakened by companies that are not being transparent, said Carly Oboth, PWYP-US interim director.

“Otherwise, it will be clear that this global transparency initiative has become a victim of corporate capture,” Oboth said.

(Reporting by Timothy GardnerEditing by Marguerita Choy, Steve Orlofsky, David Gregorio and Cynthia Osterman)

By Hilary Russ

(Reuters) -McDonald’s Corp said on Tuesday it will drastically cut the use of plastic in the more than 1 billion children’s toys it sells globally each year by the end of 2025.

The change involves swapping out a plastic figurine of Batman, for example, for one made with a dozen cardboard pieces that kids can put together themselves.

More toys will also be made from recycled or plant-based plastics, McDonald’s said. The changes will allow the Chicago-based company to cut its use of virgin fossil fuel-based plastic for Happy Meals by 90% compared with 2018.

McDonald’s is one of many restaurant chains aiming to reduce environmental harm from packaging and other products.

Burger King, a unit of Restaurant Brands International Inc, said in 2019 that it would stop giving out free plastic toys and that customers could return existing ones to be melted down and used as trays and other items.

Stephanie Feldstein, population and sustainability director at the Center for Biological Diversity, said in a statement that if McDonald’s really wanted to be more sustainable it should reduce the amount of beef it serves and “stop nibbling around the edges of sustainability.”

McDonald’s, which started selling Happy Meals in 1979, shifted to more sustainable toys in the UK, Ireland and France in 2018.

Some similar toys will soon make their way to the more than 100 other countries where Happy Meals are sold.

In the United States, McDonald’s is already using some sustainable toys, including books and Pokemon collectible cards.

More such toys will hit the U.S. market in January, said Amy Murray, vice president of global marketing enablement. The revamped Happy Meals will not cost franchisees more money, she said.

(Reporting by Hilary Russ; editing by Richard Pullin and Bill Berkrot)

By Tim Hepher

TOULOUSE, France (Reuters) – Airbus <AIR.Pa> is in talks with several potential customers for a new A350 freighter while seeing signs of demand for smaller A320 passenger jets in Europe, its sales chief said on Tuesday.

With e-commerce booming, Airbus formally began marketing a proposed freight variant of its A350 passenger jet in July, taking aim at Boeing’s tight grip on the global cargo market.

“We are in a number of very encouraging discussions,” Chief Commercial Officer Christian Scherer told reporters in Toulouse, where the European planemaker is based.

“It is available for sale and is selling,” he added.

Boeing has for years dominated the market for purpose-built freighters, even as its European rival grabbed the crown as the world’s largest maker of passenger jets.

Boeing is preparing to launch its own new freighter, a cargo version of its upcoming 777X jetliner, industry sources say.

Freighters can sell for higher prices than passenger planes and help to prop up depressed production for wide-body models at a time when long-haul travel is weak, industry experts say.

While demand for wide-body passenger jets remains stagnant, demand for smaller planes used in regional and domestic markets is rising.

“Demand is coming back,” Scherer said. “We need to be very careful – we are not out of the woods and we are still in a very fragile environment – but Europe is rallying quite nicely at this moment.”

Airbus plans to increase production of the medium-haul A320neo family, which competes with Boeing’s 737 MAX, to a record 63 a month from 40 now, surpassing pre-crisis levels.

It has said it is also looking at pushing output as high as 75 a month, but such levels have drawn concerns about supply chains from engine makers like France’s Safran.

Scherer defended the existing production commitments, which he said were justified by contracts with airlines even after an industry shakeout brought about by the coronavirusus crisis.

“If anything in my world I am challenging them to be steeper,” he said.

Airbus is talking to Hungary’s Wizz Air over a sale of at least 100 more narrowbody jets, Reuters reported earlier this month.

Among other European prospects, British Airways parent IAG has reopened a fresh competition between Airbus and Boeing for narrowbody jets, revisiting a large provisional order for 200 MAX jets that was never finalised, the sources said.

Finnair is looking at a narrowbody purchase but a formal tender has yet to be launched.

Air France-KLM in July said it had launched a tender to extend the medium-haul fleets of Dutch unit KLM and the French and Dutch arms of low-cost subsidiary Transavia.

(Reporting By Tim Hepher in Toulouse; Editing by David Gregorio)

(Reuters) -Hong Kong’s Cathay Pacific Airways Ltd said on Monday it had lowered its passenger capacity forecast for the remainder of the year to 13% of pre-COVID levels, down from an earlier 30% target for the fourth quarter as travel restrictions linger.

The airline said it continued to target cash burn of less than HK$1 billion ($130 million) a month for the rest of the year.

Hong Kong lacks a domestic aviation market and has some of the world’s toughest pandemic-related travel restrictions.

The city requires fully vaccinated travellers from destinations considered “high-risk”, including the United States and Britain, to spend three weeks in hotel quarantine.

Cathay last month said its target of reaching 30% of pre-COVID passenger capacity in the fourth quarter hinged on quarantine rules for passengers and crew being relaxed.

Passenger numbers in August were better than in previous months because of strong student traffic from China to the United States and Britain but were 95.3% below the same month in 2019, the airline said.

Cathay said the cargo market strengthened in August, with freighter demand ramping up to peak season levels.

Air cargo accounted for 80% of the airline’s revenue in the first half of the year due to the pandemic-related hit to passenger demand.

($1 = 7.7875 Hong Kong dollars)

(Reporting by Jamie Freed in Sydney; Editing by Tom Hogue and Gerry Doyle)

By Ron Bousso

LONDON (Reuters) – Royal Dutch Shell plans to start producing low-carbon jet fuel at scale by 2025, in an attempt to encourage the world’s airlines to reduce greenhouse gas emissions.

Aviation, accounting for 3% of the world’s carbon emissions, is considered one of the toughest sectors to tackle due to a lack of alternative technologies to jet fueled-engines.

Shell, one of the world’s largest oil traders, said it aims to produce 2 million tonnes of sustainable aviation fuel (SAF) by 2025, a ten-fold increase from today’s total global output.

Produced from waste cooking oil, plants and animal fats, SAF could cut up to 80% of aviation emissions, Shell said.

Shell, which at present only supplies SAF produced by others, including Finnish refiner Neste, said on Monday it wants green jet fuel, which can be blended with regular aviation fuel with little need to change plane engines, to make up 10% of its global aviation fuel sales by 2030.

SAF accounts for less than 0.1% of today’s global aviation fuel demand, which reached around 330 million tonnes in 2019, investment bank Jefferies said.

Growing the market faces several hurdles, primarily due to the cost of SAF, which is currently up to 8 times higher than regular jet fuel, and the limited availability of feedstock.

Shell said it wants others to follow its lead.

“We also expect other companies to add to it with their own production plants,” Anna Mascolo, head of Shell Aviation, told Reuters.

The United States said last week it wants to cut aircraft greenhouse-gas emissions by 20% by the end of the decade by significantly boosting SAF usage.

Graphic – Global aviation emissions: https://graphics.reuters.com/SHELL-AVIATION/dwvkrdawmpm/chart.png

NEW PRODUCTION

Anglo-Dutch shell, which aims to reduce emissions from fuels it sells to net zero by 2050, is in the midst of a large overhaul aimed at producing more low-carbon fuels such as biodiesel and SAF, as well as hydrogen.

Shell plans to build a biofuels processing plant at its Rotterdam refinery with an annual capacity of 820,000 tonnes, with SAF set to make up more than half of the output. The plant is expected to start production in 2024.

In a new report on the decarbonisation of aviation published together with Deloitte, Shell called for the sector to cut its emissions to net zero by 2050.

The International Air Transport Association, representing most of the world’s airlines, aims to halve emissions by then.

Reducing emissions to net zero can be achieved by using more low-carbon fuel and offsetting the remaining emissions through carbon credits.

Shell is also developing synthetic aviation fuel made from hydrogen and recycled carbon.

“Sustainable aviation fuel, whether bio SAF or synthetic SAF, remains the single biggest solution,” Mascolo said.

(Reporting by Ron Bousso; Editing by Alexander Smith)

By Clare Jim and Farah Master

HONG KONG (Reuters) – As Beijing seeks to tighten its grip over Hong Kong, it has a new mandate for the city’s powerful property tycoons: pour resources and influence into backing Beijing’s interests, and help solve a potentially destabilising housing shortage.

Chinese officials delivered the message in closed meetings this year amid broader efforts to bring the city to heel under a sweeping national security law and make it more “patriotic,” according to three major developers and a Hong Kong government adviser familiar with the talks.

“The rules of the game have changed,” they were told, according to a source close to mainland officials, who declined to be named because of the sensitivity of the matter. Beijing is no longer willing to tolerate “monopoly behaviour,” the source added.

For Hong Kong’s biggest property firms, that would be a big shift. The companies have long exerted outsized power under the city’s hybrid political system, helping choose its leaders, shaping government policies, and reaping the benefits of a land auction system that kept supply tight and property prices among the world’s highest.

The sprawling businesses of the four major developers, CK Asset, Henderson Land Development, Sun Hung Kai Properties and New World Development, extend their influence even further into society. For example, the empire of Hong Kong’s richest man, Li Ka-shing of CK Assets, includes property, supermarkets, pharmacies and utilities.

Because the tycoons are so deeply intertwined with the city’s economy and politics, it would be difficult for Beijing to sideline them completely, said CY Leung, former Hong Kong leader and now a vice-chairman of China’s top advisory body.

“They are a major component of our political and economic ecosystem, so we need to be careful,” Leung told Reuters. “I think we need to be judicious with what we do and not throw the baby out with the bathwater.”

INFLECTION POINT Some Chinese officials and state media have blamed tycoons for failing to prevent anti-government protests in 2019 that they say were rooted in sky-high property prices.

The protests, joined by millions of all ages and social strata, demanded greater democracy and less meddling by Beijing in Hong Kong, which had been promised wide-ranging freedoms until 2047.

The new directives mark an inflection point in the power play between Beijing and the tycoons, who once held kingmaking sway in Hong Kong’s political leadership race.

“Now the focus is on contribution to the country; this is not what the traditional business sector in Hong Kong is used to,” said Raymond Tsoi, chairman of Asia Property Holdings (HK) and a member of the advisory group Chinese People’s Political Consultative Conference Shanxi Committee.

In March, Beijing made sweeping electoral changes. In a new election committee, responsible for choosing the next leader of Hong Kong and some of its lawmakers, a greater “patriotic” force has emerged, while many of the prominent tycoons, including Li, 93, will be absent for the first time since Hong Kong returned to Chinese rule in 1997.

Hong Kong’s Constitutional and Mainland Affairs Bureau said the new election committee would be more broadly representative of Hong Kong, going beyond the vested interests of specific sectors, specific districts and specific groups, which it called “inadequacies” in the system.

The source close to Chinese government officials told Reuters a team in the Hong Kong and Macau Affairs Office and the Liaison Office (HKMAO) had sought to curtail the influence of groups perceived to have done little for Beijing’s interests in the city.

HKMAO and the Liaison Office did not respond to requests for comment.

Sun Hung Kai said it was confident about the future of Hong Kong and would continue to invest there and in mainland cities. Henderson Land and New World Development declined to comment, while CK Holdings did not respond to request for comment. Li did not respond to a request for comment.

‘GIVE BACK MORE’

Developers have already taken measures to show the message was received.

New World and Henderson Land have donated rural land as reserves for social housing. In recent weeks, Nan Fung Group, Sun Hung Kai, Henderson Land and Wheelock applied for a public-private partnership scheme, the first applications since the programme was launched in May 2020.

The programme offers developers an opportunity to build on a higher percentage of open land, but they must use at least 70% of the extra floor area for public housing. Several told Reuters last year that the programme was unattractive because there were many restrictions and a risk of higher costs.

“Beijing is not telling us what to do, but saying you need to solve this problem,” Hopewell Holdings’ Gordon Wu told Reuters, adding that “it won’t be impatient but it will give you pressure.”

Another developer source, who declined to be named because of the sensitivity of the issue, said Chinese officials had laid out expectations, but no strategy or deadline.

“We can continue our businesses as long as we give back more to society,” said the source, a senior official at a top developer in Hong Kong. The sector needs to step up efforts to ease the housing shortage, he added.

Most of the developers have published statements and newspaper advertisements, along with other Chinese corporations, to support the national security legislation and electoral changes.

Critics of the moves said they crushed democratic dreams, while authorities said they were necessary to restore stability after the 2019 demonstrations.

Adrian Cheng, 41, who took over as chief executive of New World, founded by his grandfather, told Reuters late last year the company needs to become more relevant to society, especially in a new environment where firms have to carefully balance the interests of various parties.

“It’s not easy. I have a lot of grey hair you can’t see,” Cheng said.

(Additional reporting by James Pomfret; Editing by Anne Marie Roantree and Gerry Doyle)

By Liz Lee

KUALA LUMPUR (Reuters) – Malaysia’s AirAsia X Bhd (AAX) has made “substantial progress” in its months-long talks with creditors as it aims to convene meetings with them to vote on a restructuring scheme by the end of October, its chief executive said.

CEO Benyamin Ismail told Reuters in a phone interview that negotiations and discussions with lessors, planemaker Airbus SE and service providers have progressed, but declined to detail what have been agreed on.

The airline, an affiliate of AirAsia Group, has also been talking to potential investors for its recapitalisation, and hopes to complete discussions by the end of the year.

“We plan to raise funding in December and get that completed as soon as possible. We’re talking to everybody, we’ll get more colour towards the year-end,” Benyamin said, declining to reveal details about the potential investors but adding that there were more than a handful of them.

Benyamin said talks with creditors are in the final stages and all have indicated they want to see the airline proceed with its restructuring.

“We’re quite confident that we’ll get this through. The main commercial terms are already out of the way,” he said, referring to negotiations with lessors. There were no objections to a proposal to move engine maker Rolls-Royce Group into the same classification as most other creditors, he added.

In a court document filed on Monday, AAX said negotiations are still afoot but “various letters of undertaking have been secured” from creditors.

Many lessors have already struck other agreements with Southeast Asian airlines to take back planes early or reduce rates, at least temporarily, to help them survive the plunge in air travel caused by coronavirus pandemic.

“Drafts of the lock up agreements and term sheets were sent to the lessors on (May 18). The lessors are presently in the process of reviewing them,” AAX said.

The airline told the court that it has received signed letters of undertaking from three large creditors to support and vote for the scheme, namely Honeywell International, Bridgestone Aircraft Tire Company and Sky High I Leasing Company.

AAX proposed last October to restructure 64.15 billion ringgit ($15.43 billion) of debt, a plan that drew objections from more than a dozen of creditors, many of whom are lessors.

Airbus,the airline’s biggest creditor, filed a suit in December https://www.reuters.com/article/us-airasia-x-lawsuit-airbus-exclusive-idUSKBN28W0JK saying it stands to lose more than $5 billion worth of orders if the scheme goes through. It declined to comment on the restructuring process.

This week, the court granted AAX an extension https://www.reuters.com/business/aerospace-defense/court-grants-malaysias-airasia-x-extension-hold-creditors-meeting-by-march-2021-09-15 to hold its creditors meetings by March next year, when a restraining order https://www.reuters.com/article/airasia-x-restructuring-idCNL2N2O00AA preventing creditors from filing fresh lawsuits against the airline expires too.

($1 = 4.1570 ringgit)

(Reporting by Liz Lee; Editing by Lincoln Feast.)

BERLIN (Reuters) – European car registrations dropped in July and August after four months of growth, industry data showed on Thursday, suggesting that a global semiconductor shortage is hitting sales in car dealerships across Europe.

New passenger car registrations fell by 23.6% and 18.1% year-on-year in July and August, respectively, in the European Union, Britain and the countries of the European Free Trade Association (EFTA), figures from the European Automobile Manufacturers’ Association (ACEA) showed.

(Reporting by Riham Alkousaa, editing by Maria Sheahan)