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I am honored to publish  a report written by my Canadian cousin GEORGE MAHMOURIDES, PH.D., MBA. The report is focused mostly on Canadian issues but it also includes information related to international markets and can be used as guide for other countries including Greece.  

COVID-19: PANDEMIC PANDEMONIUM AS A DARWINIAN WINNOWING OF THE WEAK UNFOLDS. HOLD ON TO YOUR HATS! BY GEORGE MAHMOURIDES, PH.D., MBA

(KAPTA CAPITAL NEWSLETTER. VOLUME 20, ISSUE 03), A Gauthier Investments Service

PREAMBLE:
In less than 3 months, COVID-19 has become a global, deadly, highly contagious form of viral pneumonia. COVID-19 has killed more than 6,600 people and sickened over 167,000 in more than 150 countries. The outbreaks are elusive and require extreme measures. It is notorious. Even though there is no pharmaceutical backup or vaccine available, in less than 2 months, scientists worldwide have combined forces to identify and sequence the virus responsible and suggest medical procedures to limit the rate of infection. This is an amazing achievement1. Several homebrew diagnostic tests are in place, but their numbers are limited. Cooperation is further witnessed by the fact that Chinese medical teams and supplies are onsite in Italy helping Italian authorities deal with their COVID-19 challenges.
Experts, analyzing China’s and Italy’s efforts to stymie the spread of COVID-19, however foresee that the pandemic is going to get worse before it gets better. Containment has not worked. All sorts of collateral damage are expected; the Darwinian winnowing of the weak is in full force. This winnowing factor is not only impounding health infrastructure but also the economy. Unfortunately, it is too early to ascertain what the long-term impact will be. We all have been caught off guard by the severity of government measures to limit social contact; e.g., stay home whenever possible, keep a minimum space of 2 meters with others and to consistently wash our hands after using items of repeated use, especially at work. As would be expected, public anxiety levels are at all time highs as we witness the paring back of daily social activities, being quarantined, being rerouted or being urged to return back to Canada before borders close. We can not escape from being bombarded daily by coronavirus stats. Canada is under siege and is being transformed; we are not alone as we see other countries around the world marshal the same restrictions. The average citizen cannot fully grasp the magnitude and near-inevitability of the national and global systemic burden beyond the current imposed 2-week quarantine period. If we succeed in defeating this threat, this virus episode will become an important punctuation mark in our global history, in much the same way that we view the 1918 Spanish Flu pandemic.
The financial markets are swinging wildly in response to worrisome daily stats on the spread of the disease, projected economic slow-downs, and anticipated recession scenarios. On March 12, 2020, the Dow Jones Industrial Average crashed – its biggest plunge since the Black Monday crash of 1987. Global financial markets have lost nearly $20 trillion in wealth during the course of a brutal selloff; this is certainly more than the estimated $40 billion loss of global economic activity from SARS. Almost a trillion dollars has been wiped off Canadian stocks in a month. It is pure madness: the COVIDS-19 market crash is doing the unspeakable by turning major stocks into pennies2. Even the recently announced C$82 billion fiscal stimulus package unveiled by Canadian Prime Minister Justin Trudeau on March 18 did little to comfort investors. When everyone wants to sell and almost nobody wants to buy, stock prices suddenly stop having much to do with
the underlying value of the company. Both companies and households, holding record amounts of debt, are devastated by this dramatic economic downturn and are grinding their teeth as enormous uncertainty looms large and long. The governments are exhausting their fiscal and monetary aid measures to resuscitate economies; billions of dollars are being poured in the system. The US Federal Reserve has slashed rates to near zero using up all of its ammo to head off the financial crisis. To add to the worries, the market reaction has left many citizens feeling uneasy about their long-term employment and retirement prospects. At a minimum, economic activity in the second quarter of 2020 is likely to fall. If the downturn continues for two more quarters, by definition, the world will be in a recession. Whatever the economic scenario, the recovery from a coronavirus-triggered pandemic will usher in a new era in which how we live, do business and invest will fundamentally change.
This pandemic has also introduced new terms into the layman’s vocabulary: ‘community transmission, social distancing, flattening the curve, reproduction number’. While these terms describe the non-pharmaceutical strategies to protect healthcare institutions and the more vulnerable, the same terms provide a glimpse into a new world that will sustain a prolonged period of uncertainty and why any return to normality may be delayed indefinitely. Behemoths like Google, Microsoft, Manulife, IBM, Ernst &Young, Novartis, BASF and Amazon, etc. have all announced that they are closing offices and/or asking employees to work from home in affected areas. Countries are closing down borders to thwart incoming flights from infected areas of the world. As a consequence, countries are trying to isolate themselves and temporarily undo all globalization accomplishments.
We are viewing the repeat of history. Viruses are killers, not just of humans, but of powerful civilizations. It appears the Athenian Empire fell during the Peloponnesian Wars not only because of the powerful Spartans, but possibly because of a pandemic which killed more than half its population. Both the Western Roman Empire, Eastern Roman Empire, and their rivals like the Huns, were severely ravaged by plagues. Feudalism, the Vikings and the Aztec Empire were devastated respectively by the bubonic plague, smallpox and the measles.
The coronavirus episode will not only test our leadership but also our values about what is important going forward. Is it about either ensuring our own survival or collectively working together to help ensure the entire global is safe? The light at the end of the tunnel is that many countries, especially their scientific communities, are overlooking national differences and cooperating. Cooperation, rather than divisiveness,is helping us wrestle with this pandemic. Unlike previous pandemics, the world today has a fast-modern communication network in place, the teamwork of a well-educated global scientific community and advanced health care technologies. We are on the right road as it took only two weeks for the scientific community to identify and sequence the virus (SARS-CoV-2). There is hope as there is strength in numbers.

  1. Community mitigation is especially important tactic to tackle community transmission before a vaccine or drug becomes widely available. When a novel virus with pandemic potential emerges, nonpharmaceutical interventions, (which are also known community mitigation strategies) are a set of actions that persons and communities can understand to help slow the spread of respiratory virus infections.

  2. Social distancing is a term that epidemiologists are using to refer to a conscious effort to reduce close contact between people and hopefully reduce community transmission of the virus. Social distancing includes at the individual level, such tactics as self-isolation and self-monitoring, and at the community level, such measures as the closure of schools, community centres, bars/ restaurant and public transit, according to the Public Health Agency of Canada.

  3. In epidemiology, the idea of slowing a virus’ spread so that fewer people need to seek treatment at any given time is known as «flattening the curve.» It explains why so many countries are implementing «social distancing» guidelines

    The speed of an epidemic depends on two things — how many people each case infects and how long it takes for infection between people to spread. The first quantity is called the reproduction number; the second is the serial interval. The short serial interval of COVID-19 means emerging outbreaks will grow quickly and could be difficult to stop, the researchers said.

NOMENCLATURE
The world medical authorities have recently established a collective terminology for this new disease. This disease is identified as ‘coronavirus disease 2019’, abbreviated as COVID-19. On 11 February 2020, the International Committee on Taxonomy of Viruses (ICTV) named the virus responsible for this disease as ‘severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)’. This name was chosen because the virus is genetically related to the coronavirus responsible for the SARS outbreak of 2003. While related, the two viruses are different. At this point in time, there is no specific pharmaceutical treatment or vaccine available for COVID-19.

EPIDEMIOLOGY OF CORONAVIRUSES
Coronaviruses (CoV) are a large family of viruses that are common in people and many different species of animals (including camels, swine, cattle, cats, and bats). Animal coronaviruses rarely infect people or visa versa. Nonetheless, coronaviruses are considered zoonotic, meaning they can be transmitted between animals and people. Animal-to-person spread does occur. Several known coronaviruses circulate in animals that have not yet infected humans. CoV cause illnesses ranging from the common cold to more severe diseases, such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV). Human coronaviruses that cause common colds usually have mean illness-incubation periods of about three days before symptoms appear.
SARS-CoV-2 spreads primarily through contact with an infected person when they cough or sneeze, or through droplets of saliva or discharge from the nose. Each infected person can infect two – three individuals on average. It spreads more easily than flu but less than measles, tuberculosis or some other respiratory diseases. COVID-19 infection takes longer, and some asymptomatic carriers may never show any symptoms. Tests have found high amounts of virus in the throats and noses of infected people a couple days before they show symptoms.
Flu viruses also mutate quickly, requiring new vaccines to be made each year. A few reports from China say some people had COVID-19, recovered and then fell ill again. It’s unclear if that’s a relapse, a new infection, or a case where the person never fully recovered in the first place. Scientists at the Fred Hutchinson Cancer Research Center in Seattle say the 30,000-letter genetic code of the virus changes by one letter every 15 days. It’s not known how many of these changes would be needed for the virus to seem different enough to the immune system of someone who had a previous version of it for it to cause a fresh infection.
SARS-CoV-2 is a new strain that was discovered in 2019 and has not been previously identified in humans. As such, unlike the flu, there is no latent immunity for this virus in the global population. Because there is little to no pre-existing immunity against the new virus, it is quickly spreading worldwide. Widespread transmission of SARS-CoV-2 is being translated into large numbers of people being infected and needing medical care at the same time. The percentage of people who die from this illness is currently estimated at upwards of 3.4 per cent, according to the World Health Organization, which is significantly higher than the seasonal flu at less than one per cent. In China, slightly more males have been diagnosed with COVID-19 than females, which might be because roughly half of Chinese men smoke but only 5% of females do. It is understood that the overall mortality rate is always going to depend on the demographics of a population. In patients aged 70 to 79, that fatality rate increases to eight per cent, and for those above 80 years old, it rises to almost 15 per cent. With more morbidity and mortality statistics, epidemiologists will eventually be able to assess the impact on different segments of the population.
There are 3 routes of infection for SARS-CoV-2:
• Hand to mouth / face
• Aerosol transmission
• Fecal oral route
The virus can live in the air for several hours, up to 24 hours on cardboard and up to two to three days on plastic and stainless steel. The virus can be killed with common anti-bacterial cleaning agents: bleach, hydrogen peroxide, alcohol-based soaps and gels. Health authorities have recommended that all citizens wash their hands frequently, self-isolate when they’re sick or suspect they might be, and start «social distancing” right away.
The clinical picture with regard to COVID-19 is evolving. Reported illnesses have ranged from very mild (including some with no reported symptoms) to severe, including illness resulting in death. There is an increased risk of more severe outcomes for individuals:
• aged 65 and over
• with compromised immune systems
• with underlying medical conditions
According to John Hopkins University’s Bloomberg School of Medicine, the COVID-19 symptoms begin approximately 5 days after exposure. Researchers believe that a 14-day quarantine period is a reasonable amount of time to monitor individuals for development of the disease. The analysis suggests that about 97.5% of people who develop symptoms of infection will do so within 11.5 days of exposure. The researchers estimated that for every 10,000 individuals quarantined for 14 days, only about 101 would develop symptoms after being released from quarantine. Authorities found that time between cases in a chain of transmission is less than a week and that more than 10% of patients are infected by somebody who has the virus but does not yet have symptoms.
Current methods to detect infections of SARS-CoV-2 rely on identifying unique genetic sequences found in the virus. WHO lists seven different approaches — including that of China, the United States, Japan, Hong Kong, Thailand, France and Germany — each country targeted different parts of the SARS-CoV-2 genetic profile. The German prototype became the approach that WHO circulated as its preferred model for a diagnostic test. Germany released its protocol on Jan. 17.
• The U.S. decided to have the Centers for Disease Control (CDC) and Prevention develop its own diagnostic test. The CDC protocol was published Jan. 28. The CDC’s test was different and more complicated than the German test. It worked in the CDC lab, but when the materials went out to state labs, results were inconsistent. The CDC had to resend packages with new chemical reagents.
• In Wisconsin, Promega Corporation and Utah-based Co-Diagnostics, Inc. partnered in the rapid development and launch of the new Logix Smart COVID-19 Test. Co-Diagnostics’s coronavirus test received CE mark approval and is now available in Europe as an in-vitro diagnostic (IVD
• Roche and ThermoFisher have recently received approvals from the US Food and Drug Administration to produce their own tests.
Several epidemiological studies suggest that a doubling of cases will occur every six days. The rate at which a population becomes infected makes all the difference in whether there are enough hospital beds (and doctors, and resources) to treat the sick. Even though the impact of community transmission by asymptomatic patients can not be assessed, it should not be summarily dismissed. Nonetheless, an avalanche of uncharacteristically severe respiratory viral illness cases is expected to overwhelm healthcare system capacity of most infected countries, unless drastic measures are taken to slow down the community transmission rate (reducing the infection rate = flattening the curve). The growing number of travel restrictions around the globe have done little to stem containment. At this point, the world has moved beyond the containment effort.
We are witnessing governments transitioning from a strategy of containment to ‘care’ and more emphasis on ‘social distancing’ as a means of interrupting locally-acquired community transmission to lower the peak care demand that will hit healthcare providers. These mitigation strategies to minimize morbidity and mortality will hopefully ensure that sufficient medical resources remain available for those with severe cases of COVID-19. Even though the WHO estimates that 80% of those infected with COVID-19 will have mild symptoms and not require hospitalization, medical authorities are desperately trying to save and protect:
(1.) those individuals at increased risk for severe illness (including older adults and persons of any age with underlying health conditions) and
(2.) the healthcare and critical infrastructure workforces. A slower infection rate would result in a less stressed health care system, fewer hospital visits on any given day and fewer sick people being turned away.
Horror stories emerging from disease-stricken areas, e.g., Italy, are highlighting just how difficult it has become to care for those more severely afflicted patients and the ethical challenges being faced by healthcare practitioners in deciding who can be spared when hospital resources are finite. This rapid infection rate in Italy has already filled some hospitals to capacity, forcing emergency rooms to close their doors to new patients, hire hundreds of new doctors and request emergency supplies of basic medical
equipment, like respirator masks, from abroad. This lack of resources contributes, in part, to the outsize COVID-19 death rate in Italy, which is roughly 7% — double the global average.

BACKGROUND HISTORY:
Word of this new infection in China erupted in mid-December 2019. The first reported death was a worker from the wholesale Huanan Seafood Market in Wuhan, a city of 11 million people in central China. On December 31, 2019, the World Health Organization was alerted to several more cases of pneumonia in Wuhan. On January 6, 2020, the Wuhan health authorities confirmed that unexplained viral pneumonia that had infected 59 people was not due to severe acute respiratory syndrome (SARS) and Middle East Respiratory Syndrome (MERS). The spread of this novel virus infection did not match any other known virus. The Wuhan Municipal Health Commission subsequently linked the pneumonia cases to the wholesale Huanan Seafood Market, suggesting that infection was due animal-to-person exposure. There afterwards, it became apparent that the growing number of infected patients did not result from any contact with animal food markets, indicating person-to-person spread (locally-acquired community transmission). Chinese authorities subsequently discovered that I in 10 infections were from people who had the virus but did not yet feel sick or showed any symptoms. The fact that people without symptoms were transmitting the virus (known as pre-symptomatic transmission) complicated containment matters. This asymptomatic aspect explains why that COVID-19 outbreaks are elusive and why extreme measures are required.
On March 11, 2020, the World Health Organization (WHO) declared COVID-19, a pandemic. As of March 16, 2020, WHO reported 167,515 confirmed cases in 150 countries, raising the total number of reported deaths to 6,606.
The global spread of coronavirus continues to be fluid and evolving rapidly; no country seems fully prepared to address the impact of this virus, even though countries are sharing information and best practices.
CANADA
On Dec. 30, artificial intelligence platform BlueDot, based in Toronto, picked up on a cluster of “unusual pneumonia” cases happening around a market in Wuhan, China, and flagged it. BlueDot had spotted COVID-19, nine days before the World Health Organization released its statement alerting people to the emergence of a novel coronavirus. It was exactly the type of situation that Dr. Kamran Khan, founder and CEO of BlueDot and professor of medicine and public health at the University of Toronto imagined when he had the idea for his company BlueDot: “Spread knowledge faster than the diseases spread themselves,” he says. In February 20, 2020, Canada confirmed its first case related to travel outside mainland China. On March 10, 2020, B.C. health officials confirmed that a man in his 80s with underlying health conditions, died after becoming infected with the illness at the Lynn Valley Care Centre in North Vancouver. As of March 15, 2020, the official Canadian tally of confirmed cases is 300. Two days later, the number of confirmed cases is double, approximately 6007 and the number of deaths is 10. OThe number of confirmed cases is like just the tip of the iceberg; the statistic does not indicate how many Canadians are currently infected. That infection rate, scary as it sounds, hides just how much the out-of-control virus has spread, especially when it is not known how many asymptomatic carriers there are.
Initially, Canada did not have cause to worry about COVID-19 as there were no locally acquired viral outbreaks within Canada borders. The first COVID-19 cases were introduced by infected Canadian returning from China, Iran and Italy, where the disease had taken hold. Authorities are now worried about the local community transmission of the disease among Canadians who had not travelled abroad. To complicate matters, there is not enough testing capacity to be broadly useful in identifying which Canadians are already infected from those that are not. Diagnosis is hampered by the number of testing sites, the PCR testing methods and the time required to conduct each test. Self-quarantining, although valuable, does not eliminate infection but only slows down the probability of spread. As the healthcare system scrambles to deal with the surge in confirmed cases, it will become increasingly difficult to detect, track, and contain new transmission chains. In the absence of extreme interventions like those implemented in China, the Canadian Federal Health Minister, Ms. Patty Hajdu said, based on the new cases that have been identified, that she ‘expects between 30 to 70% of the Canadian population could become infected’. Assuming the lower estimate of 30%, this statistic suggests that at least 11 M Canadians may be infected in short time. Moreover, if the mortality rate is truly 1%, then 110,000 Canadians may die from COVID-19 in a short time. (This is a conservative mortality statistic, which will only increase if patients are unable to access health care services.) The fatality rate for COVID-19 is 10 times the rate for flu.
In response to the growing emergency, the federal government has rolled out a $1-billion package to help the country’s healthcare system and economy cope with the outbreak. Approximately half of that amount, or $500 million, will be transferred to the provinces and territories so they can prepare for and react to the spreading virus. There is no accepted treatment for COVID-19. Hospitals may only supply supportive care (e.g., IV fluids, oxygen, ventilators, …) to help keep patients alive in order that their own immune systems can overcome the virus. Foreign Affairs Minister François-Philippe Champagne has urgently advised Canadians overseas to return home before travel routes become further disrupted due to the COVID-19 pandemic. On March 16, 2020, the Canadian government closed its borders to noncitizens. The ban does not apply to U.S. citizens “for the moment.”

Seventeen years ago, by the end of the SARS outbreak, there were 438 probable and confirmed cases of the virus, most contained within Toronto and the GTA. SARS resulted in 44 deaths in Toronto alone
The healthcare situation in Canada has become more dire when the current hospital infrastructure is examined. On March 6, 2020, the national advocacy group for health care organizations and hospitals warned the federal government that the national health system is already stretched thin and that it may not be able to cope if the novel coronavirus outbreak continues to worsen. The hospitals said they need help now to “dramatically scale up” respiratory virus testing, to collaborate on laboratory analysis to quickly share data with other hospitals, and to protect staff from COVID-19. Physicians still have concerns about supplies and their ability to keep themselves healthy and able for when the peak really hits.
In terms of preparedness,
• The Public Health Agency of Canada has also sent out a job posting for additional nurses needed to handle the COVID-19 outbreak.
• Canada has a National Emergency Strategic Stockpile with equipment including ventilators, medicine and social-service supplies, such as beds and blankets. The stockpile has been used to respond to health emergencies such as the H1N1 outbreak in 2009, as well as during major natural disasters including the Fort McMurray wildfires in 2016. The Public Health Agency of Canada declined to provide details on the stockpile’s inventory, citing national security concerns.
• A large study published in 2015 after the 2009 H1N1 pandemic put the number of Canada-wide ventilators as 5,000. The study found 14.9 ventilators for every 100,000 people; the number was as low as 10.1 per 100,000 people in Alberta and as high as 24.4 in Newfoundland and Labrador.
• Thirteen years ago, Ontario stockpiled some 55 million N95 masks and other medical equipment after the province bore the brunt of the SARS epidemic in Canada in 2002 and 2003. Even though Canadian hospitals have been told by provincial officials to maintain a four-week supply as standard policy, provincial officials now confirmed that the masks in the stockpile have passed their expiration date. The spread of the coronavirus has triggered a global shortage of N95 respirator masks.
• The number of hospital beds (per 1,000 people) in Canada was reported at 2.7 in 2012, according to the World Bank collection of development indicators. With a Canadian population of 37.6 million, it is estimated that there are about 90.5 thousand hospital beds. Authorities report that hospitals are operating at 105%, leaving little or no beds available to redirect to COVID-19 patients. More recent data from the Organization for Economic Co-operation and Development indicate Canada ranks near the bottom of OECD countries when it comes to availability of acute-care beds, which includes intensive care. Canada had 1.95 acute-care beds for every 1,000 people in 2018, and that number has been decreasing steadily since the early 1980s.
• Doctors are also using telehealth and virtual medicine to assess people remotely so they don’t flood clinics and hospitals.

• Paul-Émile Cloutier, president and chief executive officer of HealthCareCan, which represents hospitals and other medical facilities across the country proposes that there should be designated hospitals for coronavirus patients and registries of healthcare workers who have had the virus and recovered who can now work safely with patients.
• The Jewish General is one of two designated response hospitals in Montreal. A portion of one floor was renovated in 2016 to handle pandemic diseases following an outbreak of Swine Flu. Twenty-four rooms in the hospital’s K Pavillion are equipped with specialized ventilation systems designed to ensure virulent diseases cannot spread.
Asymptomatic locally-acquired community transmission is justifying the implementation of extensive and aggressive control measures including isolation, quarantine, school closures, travel restrictions and cancellation of mass gatherings. On March 13, 2020, the Quebec Ministry of Education made the decision to close all school [elementary and high schools, CÉGEPs, and universities] across the entire province for two weeks starting Monday, March 16, in an attempt to minimize the spread of COVID-19. Quebec, Manitoba and New Brunswick have become the latest provinces that will temporarily keep children out of class in a bid to limit the spread of COVID-19, following Ontario’s lead. Unfortunately, the provinces have not harmonized their efforts to tackle COVID-19, and this failure may prove to be a liability in minimizing the impact of COVID-19 across

Canada.
In addition, provincial governments have recommended banning visitors from hospitals, long-term and senior care facilities.
COVID-19 has significantly disrupted markets around the world; the aviation, energy and cleantech sectors have been adversely affected.

AVIATION
With the number of global travel bans / advisories growing and suspension of non-essential travel, all means of travel have been affected. Travellers who decide that they still need to travel abroad are reminded of the increased risks of doing so. That includes the risk that they may not be able to get home, if travel restrictions are put in place and if they get sick abroad. Governments are urging their citizens to return home quickly before return flights are cancelled at short notice or other travel restrictions by foreign governments strand citizens.
Aside from the obvious cruise ship hardships, air travel has also suffered. In response to government decrees and mandatory public health measures, cash reserves are running down quickly as air passengers are asking for refunds and flights are operating much less than half full. Carriers around the world are freezing recruitment, implementing voluntary leave options, temporarily suspending employment contracts and reducing working hours, reducing executive pay, and slashing the number of flights, including those of lucrative transatlantic routes. Forward bookings are far outweighed by cancellations and each time there is a new government recommendation it is to discourage flying. It is expected that only the biggest and best-government supported airlines will survive this crisis. According to the U.S. Bureau of Transportation Statistics, it took almost three years for the airline industry to fully recover from the demand shock created by 9/11. The prospect of losing spring and summer bookings is another blow. Far smaller shocks have caused weak airlines to go under; but even the big players are likely to have their wings clipped by the coronavirus. Action on climate change may have restricted aviation; higher fares from reduced competition might yet do more. Now, societies forced to do without flying may also start to question whether the habit was worth it.

Few sectors of the travel industry have been more upended than the cruise industry. Lines have canceled or significantly altered more than 100 sailings in Asia, with some lines entirely leaving the market until at least next year.

Starting early February 2020, 59 airline companies suspended or limited flights to Mainland China and several countries including USA, Russia, Australia, and Italy have also imposed government issued travel restrictions. The International Air Transport Association warned on Thursday that airlines could lose up to $113 billion in 2020 because of the coronavirus outbreak. IATA now sees 2020 global revenue losses for the passenger business of between $63 billion (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113 billion (in a scenario with a broader spreading of COVID-19). Data published Thursday by analytics firm ForwardKeys showed international flight bookings to Europe were down 79% year-on-year in the final week of February. No estimates are yet available for the impact on cargo operations. Coronavirus-related cancellations and route suspensions could tip already struggling airlines over the edge into insolvency. The global aviation consultancy firm, CAPA, predicts that airlines in the world will be technically bankrupt, (or at least substantially in breach of debt covenants) by the end of May unless coordinated government and industry action is marshaled to avoid the catastrophe. U.S. airlines are requesting upwards of $60 billion in bailouts and direct assistance from the government.
• Air Canada says it will “gradually suspend” the majority of its international flights by the end of March amid Canada’s and other countries’ moves to close their borders over the coronavirus pandemic. The airline said Wednesday that they will still serve a “small number of international and trans-border destinations” from select Canadian cities after April 1. Employees of Air Canada, the country’s largest airline, have said the company is not doing enough to inform customers and staff of their exposure to passengers infected with Covid-19. An Air Canada flight attendant tested positive for the coronavirus in Hawaii, and was the first of that state’s 16 current COVID-19 patients.
• Travel company Transat AT Inc. has seen daily bookings drop off since late February, with a steep year-over-year decline this month as travel fears spread with COVID-19. Daily bookings fell 50 per cent year-over-year in the last few days.

• On March 15, Atlanta-based Delta Air Lines stated that it would be grounding 300 aircraft in its fleet and reduce flights by 40 per cent.
• American Airlines said it would reduce all international capacity by 75 per cent, while competitors Delta and Southwest Airlines plan to strip back flights.
• By March 16, IAG, owner of British Airways and Spanish carrier Iberia, announced it would slash flight capacity by 75 per cent during April and May owing to the COVID-19 outbreak.
• Britain’s Virgin Atlantic added that it has decided to park 75 per cent of its total fleet — and in April this will rise as high as 85 per cent.
• In Germany, Lufthansa has been forced to scrap around two thirds of its flights in coming weeks as several countries including the United States ban travellers from Europe.
• Air France will meanwhile slash flight capacity by 70-90 per cent over the next two months, while Austrian Airlines will suspend all flights from Thursday, and Finnair is cutting 90 percent of capacity until the situation improves.
• United Airlines said it would announce a cut in capacity of around 50 per cent for April and May, as the United States ramps up restrictions to try and contain the spread of the coronavirus.
In response to these changes, airline share prices have fallen nearly 25% since the outbreak started, far more than during the same period of the 2003 SARS epidemic, reports the IATA. By March 16, The London-based carrier, iAG’s share price crashed nearly 27 per cent in mid-afternoon deals. Other airlines tumbled, with Germany’s Lufthansa erasing almost 11 per cent in value and Air France wiping out 17 per cent on similar announcements.
The global coronavirus outbreak has triggered one of the most uncertain times ever in the airline industry. Airlines have such high fixed costs for planes and staffing that even a small loss in business causes a much bigger gap in profitability. Debt is not a problem for most major U.S. carriers, especially with low interest rates. Most U.S. airlines have about $3 billion in cash on their balance sheets, with the smaller Spirit and JetBlue having $1.1 billion and $1.3 billion respectively, as of Dec. 31. The average airline has 15 times the cash flow it needs to cover interest payments. Indeed, American was able to sell $500 million in debt at full value as recently as Feb. 20. Debts, empty planes and no idea as to when air travel will return to normal levels is small consolation for the shareholders of airline carriers.
Demand for new aircraft is inevitably drying up as customers wary of the coronavirus shun air travel. COVID-19 will may result in an increase defaulting on existing airplane payments. Other airlines were also seeking a temporary holiday from lease payments. Cathay Pacific Airways is among the growing number of airlines (Delta Air Lines Inc., United Airline Holdings, Norwegian Air Shuttle ASA) asking manufacturers to put its deliveries on hold. Analysts suggested that the impact of deferrals on Boeing could be mitigated by the year-long grounding of the 737 Max after two fatal crashes. In a month, the tumult has clipped about $175 billion in market value from the U.S. aerospace industry, a critical source of American exports. As a result, the plane maker is putting hiring on hold and planning to tap all of a $13.8 billion loan. Airbus has not decided to cut its delivery target but one person with knowledge of the situation said “there are several airlines trying to defer deliveries. It is probable that guidance will have to be reassessed before the end of March.” Airbus declined to comment. Boeing and Airbus were rolling in cash while airlines went on a $1.15 trillion buying binge stretching back to 2008. They’re now intently focused on preserving capital and avoiding making “white tails,” the industry term for buyer-less aircraft.
At a large annual conference for airplane financiers and lessors in 2020 (Dublin), speakers outlined the tremendous hit already dealt to airlines in Asia, and attendees expressed growing concern for the likely impact ahead in Europe and the U.S. All agreed that although the air travel business will recover in the long-term, this year looks set for a significant downturn.

ENERGY
OIL
As major economies go into lockdown, oil demand continues to fall off a cliff. The coronavirus crisis is affecting a wide range of energy markets – including coal, gas9 and renewables – but its impact on oil markets is particularly severe. As community transmission mitigation strategies are applied to stop the travel of people and goods, they deal a heavy blow to demand for transport fuels.
China’s need for oil remains subdued as a result of the COVID-19 driven economic contraction. China is the world’s top oil importer; it bought 41.24 million tonnes of crude in 2019, equivalent to 10.04 million barrels per day (bpd). It accounted for more than 80% of global oil demand growth in 2019. But just two months after the outbreak of the virus, Chinese oil demand is down sharply because of dwindling air travel, road transportation and manufacturing. In response to the oversupply, the Organization of the Petroleum Exporting Countries (OPEC) recently cut supply by 400,000 barrels a day, but it is a question of whether this is enough to make an impact on global prices.
As the virus spread globally, oil demand is expected to decline in 2020 further as a result. Pierre Andurand, who runs oil hedge fund Andurand Capital Management, said that oil demand could fall by 10 million barrels per day (mb/d) for a period of time, a contraction with no historical precedent. By April 2020, crude oil supply could reach record high levels, according to Goldman Sachs. Travel restrictions that limit the use of jet fuel, that slow down supply chains / industrial activity and that send workers home—mean less oil and oil-based products are being used and produced. The pandemic is expected also to cause extensive staffing and supply shortages in the oil and gas industry, as well as a fall in investment of around $30 billion (£23.4bn) in 2020. These trends have very direct effects on oil consumption patterns and inform near-term calculations of real oil demand.
The benchmark price for oil has fallen by its fastest rate since the 1991 Gulf war to lows not seen in four years, wiping billions from the market value of companies across the energy sector. The slump in the price of crude put a downward pressure on the stock prices of almost every company related to the oil sector. That will make it even tougher for the sector’s financially weakest players to stay afloat, which is why so many are selling off today. An emergency rate cut by the US Federal Reserve also failed to calm global financial markets as a price war rages on between the top oil producers.
As broader market sentiment about the health of the global economy declines, so do projections about the future oil demand curve, prompting flight away from oil and energy stocks and further drawing down prices.

(Natural gas prices recently tumbled to historical lows and are down nearly 15% since the start of 2020 with excess supply and inventory build up pressuring prices. The coronavirus outbreak is not helping the situation, either. The global LNG leader Royal Dutch Shell has warned that the coronavirus outbreak is already hurting LNG demand and forcing it to reroute supplies previously earmarked for mainland China.)

Normally, drops in the price of oil were largely viewed as positive because it lowered the price of importing oil and reduced costs for the manufacturing and transport sectors. The coronavirus epidemic has eradicated such positive prospects as the economy has been placed on-hold to contain the spread of a super virus.
Oil could fall below $20 a barrel and stock markets could easily shed another 30-40% of their values after April 1 2020, when Saudi Arabia and Russia ramp up their crude production after a previously-agreed Organization of the Petroleum Exporting Countries (OPEC)+ alliance deal expires. Saudi Arabia has slashed its oil prices to buyers and will be maxing out its production, as will Russia, as the two major producers engage in an all-out price war to fight for greater market share. Saudi Arabia has announced plans to increase its daily production to 12.3 million bpd in April, compared to roughly 9.7 million bpd in February. The global market oversupply is driving lower prices for consumers at the pump. Although the coronavirus is not responsible for the oil wars, but it plays into a perfect scenario to collectively collapse the world economy.
The price crash hurts oil-exporting countries and is a particular blow for U.S. shale producers who are already deeply in debt. Market analysts are predicting defaults on billions of dollars worth of debt, and a major risk for up to a million people employed directly and indirectly by the shale industry. If U.S. shale was struggling at $50, drilling at sub-$30 makes sense for no one. White House officials are alarmed at the prospect that numerous shale companies could be driven out of business if the downturn in oil prices turns into a prolonged crisis for the industry. Oil prices bounced back a bit after President Trump tried to throw a lifeline to oil prices last week when he announced that the Department of Energy would buy up oil for the Strategic Petroleum Reserve (SPR) and “fill it right to the top.” It is predicted that if there is less drilling, there will be less associated gas, which means natural gas prices will increase.
The story is much worse for Canadian oil producers10. Canada’s oil and natural gas sectors contributed more than $100 billion to Canada’s gross domestic product (10 % of GDP) in 2018, according to the Canadian Association of Petroleum Producers (CAPP). It sustained 530,000 jobs across Canada in 2017 and provided $8 billion in tax revenue. Alberta Premier Jason Kenny initially prepared a new provincial budget which pegged oil prices at US$58 per barrel. Unfortunately, the price of Western Canadian Select fell from US$38 a barrel in February to US$16.33 a barrel on March 16, a 43% decline in value. Low-priced oil means there’s much less incentive for producers to ship crude by rail. The premier is heading to Ottawa with a list of demands as he is worried about layoffs as the oil and gas sector struggles with coronavirus. In the past two days, Canadian oil and gas producers MEG Energy Corp., Seven Generations Energy Ltd., and Cenovus Energy Inc. announced ($3B) cuts to 2020 spending. Mr. Kenney said he expects other companies to follow suit, and also cut jobs in the next two to three weeks. He will be pressing the need for emergency support for those workers with the federal government. Teck Resources, B.C.’s largest publicly traded mining and energy company, took a 21 per cent hit to its share price.

(Globally, Canada is the fourth-largest producer and fourth-largest exporter of oil and the energy sector accounts for more than 11 per cent of its gross domestic product)

According to Deloitte Canada, 2020 was expected to be a lot more constructive for oil and gas producers in Canada than it was in 2019. This has not been the case. Aside from the fact Canada’s oil patch has been already struggling with pipeline shortages that prompted the province to impose production limits on its largest producers at the start of last year, the global oil price war is taking an even heavier toll on the Canadian energy industry. The oil patch still hasn’t fully recovered from the last crash that started in 2014. “At these commodity prices, nobody is making money and everybody is going to be free cash flow negative,” said Laura Lau, chief investment officer at Brompton Corp. in Toronto. “It’s going to be tough.” Alberta’s government could mandate further cuts to oil production if rising crude supplies and falling prices threaten the survival of drillers in the province. Alberta’s government has pledged to do what’s necessary to shore up its oil-dependent economy after world crude prices fell the most since 1991 this week amid a price war between Saudi Arabia and Russia. Premier Kenney said he’s also considering payroll tax relief and using the province’s balance sheet to help companies with their current liquidity crisis. Every $1-a-barrel drop in the average price over the entire year costs the Alberta treasury $355 million in lost revenue.
The oil price decline has hammered Canadian energy stocks. Most large producers, including Suncor Energy Inc. and Canadian Natural Resources Ltd. also experienced double-digit declines in their share prices as did junior and intermediate producers’ such as Schmidt’s Tamarack, which lost hundreds of millions of dollars in value as its share price declined 30 per cent on Monday. Among the biggest decliners were Cenovus Energy Inc., which dropped as much as 49 per cent, and MEG Energy Corp., which tumbled as much as 47 per cent. The largest producers, including Cenovus, Suncor and Canadian Natural, are actually well-positioned to withstand the downturn, because of the lack of pipeline access, they have spent the past few years paying down debt and buying back shares. Equity markets that were once a lifeline for oil firms in times of distress have started to dry up as investment giants such as BlackRock Inc. pull back from the sector, forcing producers to rely on debt instead. Although Canadian energy companies are considered to be better equipped today than their U.S. counterparts, any severe, prolonged downturn in prices would hurt Canada. Collectively, the industry is holding its breath to see what actions the Federal government will take.
Canadian oilsands producers will rarely shut in operations amid depressed prices because many of their costs are fixed and shutdowns can damage reservoirs. The low oil prices make the economics of oil sands mining projects however more difficult to work, and this situation may provide the rationale for Teck Resources’ decision to withdrawn

Warren Buffett has pulled out of a liquefied natural gas project in Quebec last week — and left the smallest companies on precarious financial footing.

CLEANTECH
The pivotal target of the Paris Agreement is to keep temperature rise well below 2 °C above the pre-industrial level and pursue efforts to limit temperature rise to 1.5 °C. According to an alarming 2018 study by the Intergovernmental Panel on Climate Change, in order to prevent global temperatures from rising more than 1.5 degrees Celsius over pre-industrial averages within this century, worldwide carbon emissions need to decrease by 45 percent by 2030 and be slashed all the way down to zero by the middle of the century—this is no easy feat.
COVID-19 is indirectly, via its effect on slowing down the global economy, reducing air pollution and carbon emissions. Lockdown has an unintended benefit — blue skies. Satellite images released by NASA and the European Space Agency show a dramatic reduction in nitrogen dioxide emissions — those released by vehicles, power plants and industrial facilities — in major Chinese cities between January and February. A fall in oil and steel production, and a 70% reduction in domestic flights, contributed to the fall in emissions, according to the CREA. But the biggest driver was the sharp decline in China’s coal usage. Pollution levels have similarly decreased over Italy. Analysts believe this could be the first fall in global emissions since the 2008 financial crisis However, experts warn that these reductions may only be short-term, and that as countries and economies bounce back, so too will emissions — unless major infrastructure or societal changes are adopted. «There is nothing to celebrate in a likely decline in emissions driven by economic crisis because in the absence of the right policies and structural measures this decline will not be sustainable,» warned IEA executive director Fatih Birol, adding that governments should «not allow today’s crisis to compromise the clean energy transition.»
Currently, response to the COVID-19 outbreak has been at the top of all political agendas – and rightly so. As such, the momentum and awareness generated by the climate strikes movement over the past year has subsided and tackling climate change is seemingly slipping down the priority list for global leaders. It will be interesting to see if the climate change agenda is supported after the COVID-19 episode is over and whether the 26th UN Climate Change Conference of the Parties (COP26) goes forward with its scheduled meeting in Glasgow this November. At COP26, countries are expected to draw up with more stringent plans to curb greenhouse gas emissions, as the current plans under the Paris agreement are inadequate. The UK was hoping to bring many countries to the table with pledges to hit net zero carbon by 2050, a target that the UK has already enshrined in law. This summit is central to advancing the climate agenda after COP25 talks in Madrid failed.
The International Energy Agency, or IEA, has warned the virus outbreak will likely undermine clean energy investment and is urging governments to offer economic stimulus packages that invest in clean energy technologies. There is an opportunity to invest the stimulus money in well-designed structural changes leading to reduced emissions after economic growth returns, such as further development of clean technologies.

The maintenance of a carbon tax makes no sense if the economy is in a recession; it may be rolled back.

WIND & SOLAR
The coronavirus has highlighted the dangers of complex and highly fragmented value chains. Analysts report that factories in China are all at differing stages of restarting production and manufacturing which may well ease supply pressures on key renewables components. After a wild few days of escalating infection numbers and increasingly frantic government responses in Europe and the U.S., the focus is quickly shifting to demand, as the reality dawns that a global economic slowdown may be inevitable. An economic slowdown could dent the demand for energy or reduce the amount of finance available. Industry conferences are being canceled or postponed, hampering networking and deal-making. Workforce shortages could knock project timelines off course.
Many manufacturers of wind turbines and their critical components (Goldwind) as well as producers of photovoltaic panels and batteries (particularly lithium) are based in China. Production delays for both wind turbines and solar panels will be felt throughout the year, as COVID-19-driven production delays impact supply chains and order fulfilment. Eight provinces in China announced work stoppages as a result of the outbreak, which has negatively impacted multiple solar manufacturing campuses.
• The top solar manufacturers in the world are in China, with some of the stocks to watch; JinkoSolar Holding Co (NYSE: JKS), and Canadian Solar (NASDAQ: CSIQ).
• Solar demand could fall by as much as 16% due to a reliance on production in China, which has imposed limits on movements and trade activity to halt the spread of COVID-19.
• Wind generation is set to cope better due to a more harmonised rental, construction and delivery systems. However, BNEF has warned that it’s previous estimate that wind capacity could surpass 75GW this year could now be at risk.
In addition, it is anticipated that the impact on China’s residential renewable market will be significantly reduced, with Wood Mackenzie anticipating a decrease of as much as 50% in turbines. It is further anticipated that as much as 6GW of wind power capacity in the US could be impacted by the virus this year.
According to a report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie Power & Renewables, solar represented almost 40% of new electricity generating capacity added in the U.S. last year. The U.S. solar market installed 13.3 gigawatts (GW) of capacity in 2019, a 23% rise compared to the year before, new figures show. The cumulative operating photovoltaic capacity – the running total – in the U.S. now stands at more than 76 GW. The full impacts of the coronavirus outbreak on the US solar industry are still developing. Late last week, Bloomberg New Energy Finance lowered its 2020 global solar demand forecast to a range of 108 to 143 gigawatts — a drop of 9 percent at the low end compared to the market research firm’s prior estimate. That could mean the first down year for global solar installations since the 1980s.
Global wind turbine manufacturer, Vestas, have reported that the impact on their business is still being assessed. Manufacturing of blades and other components for Vestas wind turbines is undertaken in China.

Some alternative energy stocks have taken a beating. In late February, SolarEdge Technologies (SEDG) was at $143. Recently it fetched $78. Similarly, Vestas Wind Systems (VWS.Denmark), the world’s largest wind turbine manufacturer, was at 734 Danish kroner ($110). Today it’s at 522 kroner.
BATTERY & ENERGY STORAGE
Cleantech Icon, Tesla’s (NASDAQ: TSLA) CEO, Elon Musk @elonmusk tweeted Friday, «The coronavirus panic is dumb.»
Insiders have warned that battery manufacturing will be impacted as Hubei province, where the virus originated and has struck hardest, and surrounding provinces are responsible for manufacturing almost 60% of China’s batteries. China also happens to be home to most of the world’s lithium-ion battery manufacturing. Utility Dive has warned that the country’s battery storage production capacity could contract by 10%–or 26 GWh–compared to earlier forecasts.
The China Photovoltaic Industry Association reported that overseas plants could be hurt as they will be unable to receive components from China due to flight restrictions. Should the epidemic of the virus continue beyond the first trimester and extend to a larger number of regions, as is currently the case in Korea and Italy, then the world’s use of renewable energy could very well be slowed down.
Electricity remains a minor fuel for the world’s transportation energy use, although its importance in passenger rail transportation remains high: in 2040, electricity will account for 40% of total passenger rail energy consumption. BloombergNEF (BNEF) analysis suggests that the ramifications of the Coronavirus (COVID-19) will lead to downgrades in forecasts for renewables deployment and electric vehicle (EV) development, with solar capacity set to fall 16% compared to previous estimates.
Overall, the coronavirus crisis and resulting economic impacts, particularly on China, focus on the need to diversify supply chains and strengthen the case to localize manufacturing in Asia, Europe and the U.S., especially for batteries.
RENEWABLE BIOFUELS
Biofuels have been considered as an option to supplement fossil fuels for transportation since the oil crises of 1973 and 1979. Interest in biofuels resurged in the early 2000s because of concerns about climate change, long-term oil supply security and oil price volatility, and a political desire to subsidize farmers. But the growth of the biofuel sector is being tested both by COVID-19 and the dramatic drop in oil prices.
• Global biofuels production grew by approximately 20% per year between 2000 and 2010, owing to a combination of supportive policies and increasing oil prices. By 2010, biofuels were providing around 3% of global transportation energy use. In 2019, it was reported that over 92% of the energy for transport is provided by oil, 3% by natural gas (NG), 1% by electricity, and other fuels contribute 4%.

The production of biofuels has contributed to food price increases, including the 2007–2008 global food crisis, and was increasingly seen as a threat to food security. The potential contribution of biofuels to climate change mitigation has also been challenged. These concerns have caused many countries to reduce their policy support for biofuels, particularly those derived from crops. Many biofuel programs have been redesigned to avoid negative impacts on food supply, and there has been an increased focus on second-generation or advanced biofuels.
• Technological breakthroughs with second-generation biofuels however have been slow to emerge, and it may be some time before they become competitive against their petroleum counterparts.
• Worldwide, petroleum and other liquid fuels remain the dominant source of transportation energy, although their share of total transportation energy is predicted to decline.
The implementation of renewable biofuels to replace petroleum-based fuels was based on the premise that they would be carbon neutral and reduce greenhouse gas emissions. They also would be instrumental in promoting and increasing the use of clean, abundant, affordable, domestically- and sustainably-produced biofuels to diversify Canada’s energy sources and reduce its dependence on oil. Biofuels can be easily substituted for traditional fossil fuels without the cumbersome necessity of revamping the energy systems we already have in place.
• According to the U.S. Energy Information Agency, approximately 28% of all energy used in the United States is currently in the transportation sector. Of that used, approximately 96% is in the form of petroleum, 2.6% is natural gas, and less than 1% is biomass, electricity, or other fuels.
• Transportation accounts for about 27% of anthropogenic emissions of CO2, according to the draft Inventory of the U.S. Greenhouse Gas Emissions and Sinks: 1990–2006, which the EPA put out for public comment on 7 March 2008.
• The biofuels industry faces challenges, though. One is the need to make production economically viable without heavy government subsidies. Another is to produce biofuels from crops that wouldn’t otherwise feed people and on land that isn’t needed to grow food.
Biofuels worldwide are supported by governments in multiple ways including blending mandates or targets, subsidies, tax exemptions/credits, reduced import duties, support for research and development and direct involvement in biofuel production, as well as other incentives to encourage the local production and use of biofuels.
The growth of the renewable biofuels market in Canada has been be supported by three pieces of federal legislations:

 (2019. Global Transportation Demand Development with Impacts on the Energy Demand and Greenhouse Gas Emissions in a Climate-Constrained World. Siavash Khalili *, Eetu Rantanen,Dmitrii Bogdanov and Christian Breyer.* Energies 2019, 12(20), 3870; https://doi.org/10.3390/en12203870)

1. In 2010, the Canadian government introduced the Renewable Fuel Regulations12,13.
2. In 2016, the Canadian government developed a Clean Fuel Standard to reduce Canada’s greenhouse gas emissions (GHG) through the increased use of lower carbon fuels, energy sources and technologies. The objective of the Clean Fuel Standard is to achieve 30 million tonnes of annual reductions in greenhouse gas emissions by 2030, making it an important contribution to the achievement of Canada’s target of reducing national emissions by 30% below 2005 levels by 2030.
3. In 2018, the Greenhouse Gas Pollution Pricing Act[a] (French: Loi sur la tarification de la pollution causée par les gaz à effet de serre) is a Canadian federal law establishing a set of minimum national standards for greenhouse gas pricing in Canada to meet emission reduction targets under the Paris Agreement. The carbon pricing in Canada is implemented either as a regulatory fee or tax levied on the carbon content of fuels at the Canadian provincial, territorial or federal level. The Canadian government levied a carbon tax14, a levy applied to fossil fuels based on how much carbon dioxide they release when burned. The federal and provincial governments (with the exception of Saskatchewan) previously agreed to establish a consistent Canada-wide price on carbon pollution. The agreement gave provinces flexibility to devise their own policies, as long as they covered the same sources at the same carbon price. If they didn’t, the federal government would step in. In 2018, all provinces satisfied the federal government’s conditions except for Saskatchewan, Manitoba, Ontario and New Brunswick, where the federal “backstop” carbon tax is being applied. In 2019, the carbon price starts at $20 per tonne of carbon dioxide released. That translates to an additional 4.4 cents per liter of gasoline. The tax will increase annually, reaching $50 per tonne in 2022. By then the gasoline tax will be 11 cents per liter. The federal government has committed to returning all carbon tax revenues to the province from which it is collected. The carbon tax is not punishment for bad behaviour. Rather, it’s a price signal to encourage people to lower their fossil fuel consumption.
Aside from Canada’s legislative incentives, the production costs for biofuel remain high and are dependent on both the price of oil (and feedstocks15) for long-term sustainability. This is true also for biofuel production in other parts of the world. Initially, pundits liked the World Economic Forum (in 2015) argued that biofuels would only be economical if and only if the price of oil was over $140 per barrel, without any subsidies or mandates. Alternatively, the Renewable Energy World (2015) proposed making biofuels at a competitive price at $60-$70/barrel. The efforts to decrease the production costs for biofuels will be greatly threatened if current oil prices remain low.

(These regulations require fuel producers and importers to have an average renewable fuel content of at least 5% based on the volume of gasoline that they produce or import into Canada and of at least 2% based on the volume of diesel fuel and heating distillate oil that they produce or import into Canada. The regulations include provisions that govern the creation of compliance units, allow trading of these units among participants and also require record-keeping and reporting to ensure compliance.
13 Unfortunately, these regulations did not oblige petroleum producers and importers to buy and supplement their fuels either bioethanol or biodiesel sourced from Canadian biofuel producers.
14 The carbon tax doesn’t apply to hydroelectricity and other energy sources that don’t release any carbon pollution.
15 The latter generally account for 60–90% of the total production costs of first-generation biofuels [23,24]; thus, the costs of biofuels are closely tied to the prices of feedstock commodities, whereas the available price depends on crude oil prices)

Unfortunately, the price of oil has dropped significantly during this month, and this spells doom to the growth of renewable biofuels both here in Canada and the United States. With falling gasoline prices and lower expected gasoline demand, some market participants said it’s only a matter of time before ethanol / biodiesel producers decide to cut rates or shut down. Equipment auctioneers will be shortly lining up a lot of distressed assets. The investment landscape for advanced biofuels is expected to become increasingly challenging, with few new projects moving into construction or implementation, especially without the significant backing by large multinational players (hopefully by petroleum producers in the pursuit of renewable diesel production). With the current crisis of COVID-19, it is likely that most environmental concerns, especially those linked to mitigating climate change will be either indefinitely postponed or cancelled.
Renewable energy companies are distressed that nobody in the Trump administration has called to offer them a share of Coronavirus economic stimulus cash. Meanwhile, Democrats on both sides of Capitol Hill are pushing to add climate change provisions to the third aid package for people and industries affected by the novel coronavirus pandemic. House Democrats, meanwhile, are looking at clean-tech tax credits. Those include incentives for electric vehicles, battery storage, offshore wind and solar energy that were left out of a December tax extenders package.