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Daily Update — June 2, 2026

Rise of Environmental Commodities; AI-related Risks for Asia Insurers; and Battery Recycling Challenges

Today is Tuesday, June 2, 2026, and here’s your curated selection of Essential Intelligence on global markets from S&P Global. Subscribe to be notified of each new Daily Update.

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Energy Expansion

Beyond molecules: The rise of environmental commodities

 

In this episode of the "Energy Evolution" podcast, Marijn van Diessen, CEO of environmental commodity trader STX Group, joined host Eklavya Gupte to discuss Europe's shift toward domestic energy sources, the rapid expansion of biomethane as a gas alternative, and the soaring demand for renewable certificates driven by AI data centers. Their conversation also explored the complexities of developing liquid markets for products that exist solely as digital attestations.

 

During the discussion, van Diessen compared environmental and traditional energy trading. While both require robust logistics, storage and infrastructure, environmental commodities are more vulnerable to regulatory changes, where a single policy decision can spark volatility as intense as any geopolitical event.

Artificial Intelligence

AI-related risks for Asia insurers expected to grow, evolve

 

The rapid expansion of AI in Asia is creating new and complex risks for the insurance industry, prompting insurers to develop stand-alone AI liability coverage and explore whether existing products, such as errors and omissions liability insurance, can address AI-related risks. Axa XL, for example, launched cyber insurance in 2024 for businesses building generative AI models. Sam Bye, Axa XL's head of cyber for Asia and the Middle East, warned that AI could become an "enabler" or a "multiplier" of cyber threats, accelerating attack timelines and lowering barriers to entry for hackers.

 

Another factor impacting the insurance landscape is data centers’ substantial capital requirements, with annual investment projected to exceed $300 billion by 2027. These projects involve a diverse ecosystem of stakeholders, each with unique insurance needs, creating significant growth opportunities for commercial and specialist (re)insurers. However, industry capacity may be stretched, as total insurable values for hyperscale data centers can reach $20 billion to $30 billion per location.

 

PARIMA's general secretary, Steve Tunstall, emphasized the need for greater transparency from insurers regarding AI-related claims, noting that mature discussions around these emerging risks remain limited.

Energy & Commodities

Balancing the battery loop: Why recyclers must manage ambitious growth with strategic caution

 

As electric vehicle sales growth slows, battery recyclers face a mismatch between capacity and limited near-term supply. Many recyclers expanded on the assumption that large volumes of end-of-life (EOL) batteries would arrive quickly. However, these volumes are now expected to grow gradually, raising the risk of overcapacity and underused plants, similar to current trends in battery manufacturing.

 

The coming years will be crucial for miners, cell makers, automakers, recyclers and policymakers in determining whether battery EOL becomes a bottleneck or a strategic advantage for a resilient, localized EV ecosystem. While concerns about shortages of lithium, cobalt and nickel remain, battery recycling is increasingly seen as a way to build supply buffers and support regional industrial strategies.

 

Despite policy support and rising formal recycling volumes, growth will be slower than previously forecast due to weaker EV markets, ongoing collection and processing challenges, and the expansion of second-life applications. S&P Global Mobility projects global EOL lithium-ion battery availability will rise from 45.5 gigawatt-hours in 2025 to about 330 GWh by 2030, and about 1,430 GWh by 2037, reflecting the average EV lifespan of 7 to 12 years.

In case you missed it

  • Robust earnings, intensifying competition and the evolving role of AI emerged as central themes during US property and casualty insurers' first-quarter earnings calls.
  • In response to concerns over new technical standards potentially restricting imports and competition, the Honduran government reached an agreement with cement producers CENOSA, Argos and Duracem to freeze cement prices for six months.
  • Kevin Warsh — US President Donald Trump's pick to lead the Federal Reserve and advance interest rate cuts — will face the challenge of rising inflation and a fragile jobs market when navigating policy changes.

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