CS33: Supply Chains, Regional Cooperation and Critical Minerals

The acceleration of decarbonization policies has increased financial risks for the oil and gas industry, particularly by raising the likelihood of early project termination and potential insolvency. In this context, ensuring that decommissioning obligations are properly funded has become a central regulatory challenge. This article examines the following research question: how does the new 2024 U.S. regulatory framework on financial assurance for offshore oil and gas decommissioning address identified weaknesses in prior rules, and what lessons can be drawn for strengthening emerging regulatory regimes, such as the Brazilian?
The study adopts a qualitative, exploratory, and analytical-descriptive methodology. First, it develops a theoretical framework grounded in the literature on externality internalization and intertemporal risk mitigation, highlighting the role of financial guarantees in preventing the transfer of environmental liabilities to the public sector. Second, it conducts a structured analysis of the 2024 regulation issued by the Bureau of Ocean Energy Management (BOEM), comparing it with the previous regime and identifying key institutional innovations.
The findings indicate that the new U.S. rule simplifies the previous five-factor test used to require supplemental bonds, replacing it with a more objective two-parameter assessment. The regulation also enhances flexibility by allowing third-party guarantors to cover limited liabilities or specific operators, thereby promoting diversification of financial instruments. Additionally, it strengthens safeguards in asset transfers by conditioning approval on full compliance with financial assurance requirements.
The article concludes that the U.S. reform offers important guidance for emerging producer countries. In Brazil, regulatory gaps persist, particularly regarding the acceptance of low-liquidity instruments and the absence of stricter minimum guarantee thresholds. Incorporating selected elements of the U.S. model could reduce fiscal exposure, enhance environmental protection, and support a more just energy transition.

Russia's invasion of Ukraine in 2022 generated an energy shock that laid bare the vulnerabilities of import-dependent regions and forced rapid policy responses across the European Union. REPowerEU was introduced as the central framework for addressing these pressures, combining emergency measures with elements associated with longer-term transition objectives, while remaining embedded in existing EU competence arrangements. This paper uses REPowerEU to explore how crisis governance operates in integrated energy markets and why a broadly symmetric external shock resulted in divergent national outcomes rather than deeper market integration. Based on an analysis of EU policy instruments and member-state implementation practices, it shows that crisis responses prioritised coordination and speed over institutional change. New short- and medium-term instruments were layered onto existing governance structures, leaving core authority at the national level. As a result, pre-existing differences in fiscal capacity, infrastructure, and exposure to Russian gas shaped national responses, contributing to uneven support measures and fragmented investment signals. Rather than transforming the foundations of energy market governance, REPowerEU functioned primarily as a stabilisation framework under conditions of acute uncertainty. Read in a broader comparative perspective, the EU case illustrates how energy-importing regions tend to manage supply shocks through flexible, nationally mediated interventions, with longer-term integration goals postponed in favour of immediate stabilisation.

Rare earths (REEs) are small but critical inputs in the production of key goods in the supply chain. The global supply of REEs is, however, challenged by the concentration of their production. Using detailed information on rare earths and magnets demand from the USGS, plus detailed cross-country input-output data, we measure the exposure of different sectors, in different countries, to a sudden shock in the supply of REEs. Using a small open economy general equilibrium model with sectoral linkages, we study the macroeconomic effects of a 80% decline in the availability of REEs globally. Our results emphasise the role of sectoral linkages and REEs substitutability with other inputs. The macroeconomic effects can be as large as 4%, when there is no substitution available in the very short-run, or as small as 0.006% when REEs are substitutable to a reasonable degree (medium term). We perform different counterfactual exercises to showcase what type of network structures make countries more resilient to the shock and what sectors are more vulnerable. We finalise by discussing the policy implications of the shock. 

Amidst the accelerating global energy transition and rising geopolitical fragmentation, the oil cooperation between China and Latin America is undergoing a fundamental paradigm shift. This paper moves beyond the traditional narrative of China merely as a resource consumer and Latin America as a raw material supplier. 
Based on the practical experience of Chinese NOCs operating in 10 Latin American countries, including Brazil, Argentina, Guyana etc., this study identifies three emerging trends reshaping the bilateral energy landscape. Firstly, cooperation has shifted from simple spot trading to deep-water ultra-deep production sharing, where Chinese capital is increasingly bundled with proprietary engineering technologies. Secondly, the resurgence of resource nationalism, e.g., local content requirements in Brazil and price controls in Argentina, compels Chinese NOCs to evolve from passive price-takers to active policy-adaptors, utilizing green investment commitments as bargaining chips. Thirdly, the US-China strategic competition, especially recent US pivot to the Western Hemisphere in its national strategy, has turned Latin American oil and gas into a critical asset for global energy security, prompting innovative financial settlements such as local currency trade mechanisms.
This paper proposes the concept of a "Resilience Partnership" -a dynamic equilibrium balancing fiscal returns, energy sovereignty, and just transition. The findings demonstrate that regional energy dynamics are actively reshaping global governance architectures, offering both theoretical and policy-relevant innovations.

Strategic Interactions in the Solar PV Module Supply Chain: An Equilibrium Problem with Equilibrium Constraints Framework for Economic and Geopolitical Analysis


Alexander Csekoe1, Sebastian Zwickl-Bernhard1,2, Hans Auer1,2,*


1 Energy Economics Group (EEG), Technische Universität Wien,
Gusshausstrasse 25-29/E370-3, 1040 Wien, Austria
* Corresponding Author, Presenter: auer@eeg.tuwien.ac.at 


2 Department of Industrial Economics and Technology Management
The Norwegian University of Science and Technology, Trondheim, Norway




Abstract


Solar PV deployment is critical for net-zero pathways, yet global manufacturing remains heavily concentrated in a single low-cost region. This structural asymmetry implies that future prices will be determined by strategic trade leverage rather than simple production economics. Consequently, the energy transition depends on how dominant exporters exercise market power. Current literature largely fails to capture the endogenous formation of prices within this multi-region trade environment. By treating trade barriers as fixed inputs, existing studies systematically overlook the ability of governments to actively manipulate market terms for national gain. To address this, we formulate the global PV market as an Equilibrium Problem with Equilibrium Constraints (EPEC). We model regional governments as strategic "State-Firms" that simultaneously optimize trade wedges and capacity offers against a shared market-clearing mechanism. The resulting Nash equilibrium is computed via Gauss–Seidel diagonalization to quantify consistent price and flow patterns. Results indicate that while strategic trade bounds shift equilibrium prices, the underlying geography of manufacturing remains remarkably persistent. Dominant exporters leverage capacity withholding and high export wedges to maximize domestic welfare while retaining their commanding position in the global supply chain. Consequently, trade policy acts principally as a mechanism for extracting economic rents rather than driving the physical relocation of manufacturing.


Keywords - Solar PV module supply chain, Strategic interactions, EPEC, Trade Policy