FT : LNG demand set to surge 50% by 2040 in clean-fuel transition, says Shell

LNG demand set to surge 50% by 2040 in clean-fuel transition, says Shell
Switch from coal by China and other Asian countries will drive increase, says report

Global liquefied natural gas demand is forecast to surge 50 per cent by 2040 as the world transitions to cleaner fuel, Shell said in its latest annual LNG outlook.

Demand for natural gas globally will then peak after 2040, although appetite for LNG will continue growing as China and developing Asian nations switch from dirtier coal to the comparatively cleaner fuel.

The growth forecast is slightly lower than predictions last year, but energy majors still expect a strong rise in LNG demand as the world’s economies target net zero carbon emissions by 2050.

LNG has grown in importance since Russia’s invasion of Ukraine as the Kremlin slashed its pipeline gas supplies to Europe, prompting the region to secure the supercooled fuel to replace the lost volumes.

“The global LNG market will continue growing into the 2040s, mostly driven by China’s industrial decarbonisation and strengthening demand in other Asian countries,” Shell said on Wednesday.

The oil major added that demand for natural gas “has peaked in some regions and globally is set to peak after 2040”.

LNG is natural gas liquefied by cooling it to minus 162C. Shell, the world’s largest private LNG trader, like many other energy majors, is keen to position natural gas as a transition fuel as the world aims to decarbonise.

Although natural gas is cleaner than other fossil fuel alternatives, it still releases substantial amounts of carbon dioxide when burnt.

Natural gas is also mostly composed of methane, which generates more warming than carbon dioxide but is shorter-lived.

Cutting methane emissions is regarded by scientists as among the cheapest and quickest ways to tackle global climate change.

Shell said LNG demand was expected to reach 625mn to 685mn tonnes in 2040, from 404mn tonnes in 2023. This is lower than its forecast a year ago, when it predicted LNG demand to reach 650mn to 700mn tonnes.

China was likely to dominate LNG demand growth this decade, while over the following decade, south Asia and south-east Asia would drive sales as they increasingly needed fuel to power their gas-fired power plants, Shell said.

The company added that LNG continued to play a “vital role” in Europe’s energy security last year, with imports remaining at similar levels to the record highs in 2022 following Russia’s invasion of Ukraine, despite an overall decline for gas demand in the region.

The global gas market remained structurally tight, owing to the lack of Russian pipeline gas supply to Europe, Shell said.

>>> US Research Calls

Research Calls
  • Upgrades:
    • Bruker (BRKR) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $90
    • Citigroup (C) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $63
    • HP Inc. (HPQ) upgraded to Buy from Hold at HSBC Securities; tgt raised to $33
    • Lyft (LYFT) upgraded to Neutral from Sell at MoffettNathanson
    • MGM China (MCHVF) upgraded to Buy from Hold at Jefferies
    • SentinelOne (S) upgraded to Buy from Neutral at BofA Securities; tgt raised to $35
  • Downgrades:
    • Biogen (BIIB) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $240
    • BlackLine (BL) downgraded to Mkt Perform from Outperform at William Blair
    • Ecolab (ECL) downgraded to Neutral from Overweight at JP Morgan; tgt raised to $220
    • GlobalFoundries (GFS) downgraded to Neutral from Buy at Citigroup; tgt lowered to $56
    • GoDaddy (GDDY) downgraded to In-line from Outperform at Evercore ISI; tgt raised to $110
    • Incyte (INCY) downgraded to Mkt Perform from Mkt Outperform at JMP Securities
    • MacroGenics (MGNX) downgraded to Neutral from Buy at H.C. Wainwright; tgt raised to $14
    • Palantir Technologies (PLTR) downgraded to Hold from Buy at HSBC Securities; tgt $22
    • Pure Storage (PSTG) downgraded to Hold from Buy at Stifel; tgt $41
    • QuidelOrtho (QDEL) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $37
    • Tecnoglass (TGLS) downgraded to Hold from Buy at Stifel; tgt lowered to $45
    • Twilio (TWLO) downgraded to Reduce from Hold at HSBC Securities; tgt lowered to $61
    • Ulta Beauty (ULTA) downgraded to Hold from Buy at Loop Capital; tgt $530
    • Waste Mgmt (WM) downgraded to Neutral from Buy at UBS; tgt raised to $205
  • Others:
    • CG Oncology (CGON) initiated with a Buy at H.C. Wainwright; tgt $75
    • Enphase Energy (ENPH) initiated with an Outperform at RBC Capital Mkts; tgt $140
    • First Solar (FSLR) initiated with an Outperform at RBC Capital Mkts; tgt $195
    • Shoals Technologies (SHLS) initiated with an Outperform at RBC Capital Mkts; tgt $20
    • SolarEdge Technologies (SEDG) initiated with a Sector Perform at RBC Capital Mkts; tgt $85
    • Steven Madden (SHOO) initiated with a Neutral at Piper Sandler; tgt $45
    • TKO Group Holdings (TKO) initiated with an Equal-Weight at Morgan Stanley; tgt $95
    • Wingstop (WING) initiated with an Outperform at Bernstein; tgt $340

>>> US Early premarket gappers

Early premarket gappers
  • Gapping up:
    • ALSN +20.3%, LYFT +19.6%, LRMR +12.1%, HOOD +11.1%, MCY +8.4%, REZI +8.3%, FLYX +8.2%, STTK +8.2%, CDXS +6.8%, ZG +6.7%, KTOS +6.6%, MRC +6.2%, IAC +5.5%, MRCY +4.8%, DVA +3.9%, MIR +3.5%, SONY +3.5%, IMUX +3.4%, CGAU +3.1%, ANGI +2.9%, WIRE +2.4%, UBER +2.3%, DASH +2.1%, GOLD +2.1%, RUSHA +1.9%, VGR +1.8%, ENTG +1.7%, OC +1.5%, SOVO +1.4%, GLSI +1.4%, SSNC +1.4%, ADC +1.4%, CPB +1.1%, ES +1.1%, EXPE +0.9%, DENN +0.9%, AMZN +0.8%, GOOG +0.7%
  • Gapping down:
    • QDEL -39.7%, UPST -19%, BL -13.7%, CC -6.7%, ABNB -5.3%, CRSR -5.2%, GNRC -4.4%, MGM -3.6%, AKAM -3.5%, CART -3.1%, MODG -3.1%, NAMS -2.5%, INVH -2.4%, GDDY -2%, IMNM -1.9%, SITM -1.7%, GRFS -1.5%, SCVL -1.3%, GXO -1.2%, LAD -1%, LPX -0.9%, MACK -0.8%, UNP -0.7%

>>> Europe : Brokers Upgrades & Downgrades - 14th of February 2024 V2(+)

>>> Up
* Acast Raised to Overweight at Barclays; PT 15 kronor
* BASF Raised to Buy at SocGen; PT 54 euros
* Broadpeak Cut to Hold at TP ICAP Midcap; PT 3 euros (+)
* GSK Raised to Buy at Intron Health; PT 1,900 pence
* HP Inc Raised to Buy at HSBC; PT $33
* KBC Raised to Buy at Kepler Cheuvreux; PT 76 euros (+)
* Mandatum Raised to Buy at SEB Equities; PT 4.40 euros (+)
* Merus Power Raised to Accumulate at Inderes; PT 5 euros
* Novo Raised to Add at AlphaValue/Baader
* NX Filtration Raised to Hold at KBC Securities (+)
* Orsted Raised to Buy at Kepler Cheuvreux; PT 480 kroner (+)
* Peab Raised to Buy at ABG; PT 70 kronor
* Raisio Raised to Buy at Inderes; PT 2.30 euros
* Sats Raised to Buy at DNB Markets; PT 21 kroner
* Wihlborgs Raised to Buy at Handelsbanken (+)
* Wizz Air Raised to Hold at Deutsche Bank; PT 2,300 pence

>>> Down
* BAE Cut to Hold at Jefferies; PT 1,210 pence
* Biogen Cut to Equal-Weight at Wells Fargo; PT $240
* Bytes Technology Cut to Hold at Jefferies; PT 670 pence
* Comet Cut to Hold at Bank Vontobel; PT 320 Swiss francs (+)
* CompuGroup Cut to Neutral at BNPP Exane; PT 36 euros
* Elica Cut to Neutral at Mediobanca SpA; PT 2.20 euros (+)
* Incyte Cut to Market Perform at JMP
* Orion Cut to Hold at Nordea
* Signify Cut to Hold at Kepler Cheuvreux; PT 28 euros (+)
* SII Cut to Hold at Stifel; PT 70 euros (+)
*
* WithSecure Cut to Reduce at Inderes; PT 1.30 euros

>>> Initiation
* Crest Nicholson Rated New Buy at Panmure Gordon; PT 1,260 pence
* DiscoverIE Rated New Sector Perform at RBC; PT 760 pence
* Enphase Energy Rated New Outperform at RBC
* First Solar Rated New Outperform at RBC; PT $195
* Hostelworld Rated New Buy at Canaccord; PT 247 pence (+)
* Kindred GDRs Cut to Hold at Carnegie; PT 130 kronor (+)
* Nichols Rated New Buy at Panmure Gordon; PT 1,260 pence (+)
* SolarEdge Rated New Sector Perform at RBC
* Technogym Reinstated Buy at William O'Neil
* Tikehau Capital Rated New Neutral at Goldman; PT 22.80 euros

>>> Call
* BAE Downgraded to Hold at Jefferies, MTU Aero Top Sector Pick
* Barclays’ Cau Sees Boost for Economy-Linked Stocks in Europe (+)
* Bytes Technology Cut at Jefferies, at Risk of Profit Taking
* Comet Cut to Hold at Vontobel as Uncertainties Persist (+)
* GSK Outlook Appears Robust, Raised to Buy at Intron Health
* Viaplay Tumbles Before Share Issue as Handelsbanken Cuts to Sell (+)

>>> Stoxx 600 Pre-Market Indications

  • Ahold Delhaize (AHOG TH) +3.4%
    • Ahold Delhaize 4Q Adjusted Operating Margin Beats Estimates
  • Delivery Hero (DHER TH) +2.9%
    • Delivery Hero Sees 2024 Adjusted Ebitda/GMV Margin About 1.6%
  • Equinor (DNQ TH) +2.4%
  • ABN Amro (AB2 TH) +2%
    • ABN ROE-Target Cut, Costs Slip Dim €500 Million Buybacks: React
  • Vodafone (VODI TH) +1.8%
  • Fresenius Medical Care A (FME TH) +1.7%
    • BioSpace: PatenSee and Fresenius Medical Care Sign Clinical Collaboration Agreement
  • Kongsberg (KOZ TH) +1.1%
  • Rheinmetall (RHM TH) +0.9%
  • Thales (CSF TH) +0.8%
    • BAE Downgraded to Hold at Jefferies, MTU Aero Top Sector Pick
  • Kion (KGX TH) -1.2%
  • Evotec SE (EVT TH) -1.3%
  • Puma (PUM TH) -1.4%
  • Rational (RAA TH) -1.8%
  • Heineken (HNK1 TH) -4%
    • Heineken FY Organic Revenue Misses Estimates
  • Thyssenkrupp (TKA TH) -4.2%
    • Thyssenkrupp 1Q Net Loss EU314M, Cuts FY Net Forecast

>>> TradeGate Pre-Market Indications

DAX:
  • BASF (BAS TH) +0.6%
    • BASF Raised to Buy at SocGen; PT 54 euros
MDAX:
  • Delivery Hero (DHER TH) +3.4%
    • Delivery Hero Sees 2024 Adjusted Ebitda/GMV Margin About 1.6%
  • Hensoldt (HAG TH) +2.7%
  • Fresenius Medical Care A (FME TH) +2%
  • Evotec SE (EVT TH) -1.3%
  • Redcare Pharmacy NV (RDC TH) -1.8%
  • Thyssenkrupp (TKA TH) -4.4%
    • Thyssenkrupp 1Q Net Loss EU314M, Cuts FY Net Forecast
SDAX:
  • ProSieben (PSM TH) +5.4%
    • ProSieben Prelim 4Q Adjusted Ebitda About EU335M, Est. EU311.8M
  • Bilfinger (GBF TH) +3.3%
    • Bilfinger Sees 2024 Ebita Margin 4.9% to 5.2%
  • SFC Energy (F3C TH) +2.4%
  • CompuGroup (COP TH) -1.7%
    • CompuGroup Cut to Neutral at BNPP Exane; PT 36 euros
  • Heidelberger Druck (HDD TH) -2%
  • Amadeus Fire (AAD TH) -3.7%
    • Amadeus Fire Prelim FY Operating Ebita EU70.4M

>>> What to look at today - 14th of February 2024

Asian stocks tracked a decline on Wall Street following hotter-than-expected US inflation data, while the yen rose after its slump on Tuesday triggered a warning from Japan. Shares fell in South Korea, Japan and Australia. Hong Kong stocks reversed an early drop as trading resumed after the Lunar New Year holiday, with investors focusing on what more Beijing can do stem the rout. The yen gained as much as 0.2% to 150.50 per dollar after Masato Kanda, Japan’s top currency official, cautioned that recent movements have been rapid, and authorities stand ready to take steps if needed. Treasury yields steadied after soaring Tuesday as traders trimmed bets for an early Federal Reserve interest-rate cut. Japan’s 10-year government bond yield climbed to the highest level since December, while a gauge of the dollar traded near a three-month high. Yields on Australian and New Zealand debt also advanced. The Golden Dragon index of US-traded Chinese companies fell 2.7% on Tuesday, its biggest decline in almost a month, while China remains closed for Lunar New Year holidays. Swap traders ratcheted down their expectations for a Fed cut before July while the stock market’s “fear gauge” — the VIX — closed above 15 for the first time since November. Contracts for European stocks slipped, while US equity futures were little changed.
The American CPI data came as a disappointment for investors after a recent downdraft in price pressures that helped build expectations for rate cuts this year. The numbers also gave credence to the wait-and-see approach highlighted by Jerome Powell and a chorus of Fed speakers. Swap contracts referencing Fed policy meetings — which as recently as mid-January fully priced in a rate cut in May and 175 basis points of easing by the end of the year — were roiled. The odds of a May cut dropped to about 32% from about 64% before the inflation data, with fewer than 90 basis points anticipated this year. In other markets, oil was steady after the highest close in two weeks, following a industry report which flagged a substantial build in US crude stockpiles. Gold steadied after plunging below $2,000 an ounce for the first time in two months while Bitcoin traded near the $50,000 mark.  US After Hours ALSN +19.8%, LYFT +18.7%, HOOD +9.3%, ZG +6.9% higher on earnings; QDEL -32%, UPST -19.2%, CART -5%, ABNB -4.7%, MGM -4% lower on earnings.

Nikkei -0.61% Hang Seng +0.20% CSI Close Shanghai Close Shenzen Close

Eur$ 1.0714 CNH 7.2269 CNY 7.1936 JPY 150.51 GBP 1.2602 CHF 0.8862 RUB 91.2949 TRY 30.7366 WTI$ 77.84 -0.04% Gold 1,993 -0.01% BTC 49,585 +0.05% ETH 2,640 +0.27%

S&P +0.07% Nasdaq +0.14% EuroStoxx -0.12% FTSE -0.16% Dax -0.10% SMI -0.03%

Macro :
- GERMANY TO CUT 2024 ECONOMIC GROWTH FORECAST TO 0.2%: REUTERS
- VIX Call Selling Jumps as ‘Fear Gauge’ Soars Ahead of Expiration
- Oaktree Capital Management Exits Vistra Corp, Cuts Star Bulk
- Italian Banks' NII Growth, Capital Return Outshine Spanish Peers

Keep an eye on :
- ABN NA : ABN Amro 4Q Profit Beats Estimates
- ABN NA : Dutch State to Sell Part of Its Stake in ABN Amro via Buyback
- AH NA : Ahold Delhaize 4Q Adjusted Operating Margin Beats Estimates
- AIR FP : Thai Airways Signs Deal With Boeing to Procure 45 Aircraft
- AKBM NO : Aker BioMarine Starts Strategic Review of Feed Ingredients Unit
- AAD GY : Amadeus Fire Prelim FY Operating Ebita EU70.4M (1)
- AMZN US : Jeff Bezos Unloads $2.1 Billion of Shares in Second Amazon Sale
- AUTO NO : Autostore 4Q Adjusted Ebitda Beats Estimates
- CAR US : Avis Sinks as 4Q Revenue Misses, Inflation Data Disappoints
- BDT GY : Bertrandt 1Q Ebit EU13.5M Vs. EU11.5M Y/y
- GBF GY : Bilfinger Sees 2024 Ebita Margin 4.9% to 5.2%
- CAP FP : Capgemini Sees 2024 Operating Margin 13.3% to 13.6%, Est. 13.4%
- CAPSL NO : Capsol Technologies Offers Up to 8m Shares at NOK12.60/Share
- CARM FP : Carmila FY Ebitda Misses Estimates
- CWC GY : Cewe Stiftung Prelim FY Sales Beats Estimates
- DHER GY : Delivery Hero 4Q Gross Merchandise Value Misses Estimates
- DIS US : ESPN, College Football Playoff Agree 6-Yr, $7.8b Deal: Athletic
- HEIA NA : Heineken FY Organic Revenue Misses Estimates
- HEIA NA : Heineken Forecasts Single Digit Operating Profit Growth in 2024
- IBE SM : Mexico Regulator Decides Iberdrola Case by Feb. 14, Linea Says
- IPN FP : Ipsen Gets FDA Approval for Onivyde for Pancreatic Cancer
- MMT FP : M6 FY Ebita Misses Estimates
- MMT FP : M6 Chairman Nicolas de Tavernost to Resign in April
- MSFT US : OpenAI Researcher Andrej Karpathy Has Left the Co.: Information
- BMPS IM : Paschi CEO Calls Future Consolidation ‘Inevitable’: Corriere
- MOWI NO : Mowi 1Q Harvest Forecast Misses Estimates
- NEXI IM : Nexi Rejects F2i’s Initial EU800m Bank Network Offer: Corriere
- NHY NO : Norsk Hydro 4Q Adjusted Ebit Misses Estimates
- OCI NA : OCI FY Adjusted Ebitda Beats Estimates
- ORRON SS : Orron Energy 4Q Revenue EU8.4M Vs. EU11.3M Y/y
- PIHLIS FH : Pihlajalinna 4Q Revenue Meets Estimates
- PSM GY : ProSieben Prelim 4Q Adjusted Ebitda About EU335M, Est. EU311.8M
- SCHP SW : Schindler FY Ebit Matches Estimates (1)
- SHEL LN : Shell Exits Talks on Petchem Plant in Iraq, Ministry Says
- SRAIL SW : Stadler Rail to Deliver Five Giruno Trains to SBB
- TKA AV : Telekom Austria Sees 2024 Capex About EU800M, Est. EU1.05B
- TKA GY : Thyssenkrupp 1Q Net Loss EU314M, Cuts FY Net Income Forecast
- TUI1 GY : TUI Exit Set to Further Dent UK’s Appeal as a Global Host
- UNO GY : Early German Exit Possible as Uniper's Outlook Recovers: React
- VAR1 GY : Varta Falls After Cyberattack Shuts Production, IT Systems
- VER AV : Verbund Prelim FY Dividend per Share Beats Estimates
- VCT FP : Vicat FY Revenue Meets Estimates
- VZIO US : Vizio Soars on WSJ Report Walmart in Talks to Buy TV Maker
- VPK NA : Vopak 2024 Adjusted Ebitda Forecast Beats Estimates
- VOW GY : Ex-VW CEO Winterkorn Faces Scrutiny Over Role in Diesel Scandal

>>> Europe : Brokers Upgrades & Downgrades - 14th of February 2024

>>> Up
* Acast Raised to Overweight at Barclays; PT 15 kronor
* BASF Raised to Buy at SocGen; PT 54 euros
* GSK Raised to Buy at Intron Health; PT 1,900 pence
* HP Inc Raised to Buy at HSBC; PT $33
* Merus Power Raised to Accumulate at Inderes; PT 5 euros
* Novo Raised to Add at AlphaValue/Baader
* Peab Raised to Buy at ABG; PT 70 kronor
* Raisio Raised to Buy at Inderes; PT 2.30 euros
* Sats Raised to Buy at DNB Markets; PT 21 kroner
* Wizz Air Raised to Hold at Deutsche Bank; PT 2,300 pence

>>> Down
* BAE Cut to Hold at Jefferies; PT 1,210 pence
* Biogen Cut to Equal-Weight at Wells Fargo; PT $240
* Bytes Technology Cut to Hold at Jefferies; PT 670 pence
* CompuGroup Cut to Neutral at BNPP Exane; PT 36 euros
* Incyte Cut to Market Perform at JMP
* Orion Cut to Hold at Nordea
* WithSecure Cut to Reduce at Inderes; PT 1.30 euros

>>> Initiation
* Crest Nicholson Rated New Buy at Panmure Gordon; PT 1,260 pence
* DiscoverIE Rated New Sector Perform at RBC; PT 760 pence
* Enphase Energy Rated New Outperform at RBC
* First Solar Rated New Outperform at RBC; PT $195
* SolarEdge Rated New Sector Perform at RBC
* Technogym Reinstated Buy at William O'Neil
* Tikehau Capital Rated New Neutral at Goldman; PT 22.80 euros

>>> Call
* BAE Downgraded to Hold at Jefferies, MTU Aero Top Sector Pick
* Bytes Technology Cut at Jefferies, at Risk of Profit Taking
* GSK Outlook Appears Robust, Raised to Buy at Intron Health

FT : Epicurean escapes: Alain Ducasse and Daniel Humm’s transatlantic adventure

Epicurean escapes: Alain Ducasse and Daniel Humm’s transatlantic adventure
Two of the world’s leading chefs have joined forces to craft a plant-based feast for their respective restaurants in Paris and New York

Old habits die hard, especially in French gastronomy. Stray too far from the usual hunks of chicken, beef and fish, and you are deemed to have entered the realm of “peasant food” or perhaps of no food at all.

So changing the record takes someone special — or two of them. In Paris a fortnight ago, Alain Ducasse and Daniel Humm, chefs with many Michelin stars between them, teamed up to serve four nights of a plant-based menu that would convince even traditionally minded diners. Their collaboration travels to New York later this month. 

The experience is a window into the possible future of fine dining. The menu comprises four amuse bouches and nine courses, with the option of five matching wines. From delicate sage leaves to radish clarified in coconut, it proves just how many flavours and textures can be summoned up from plants.

Mostly the secret is an incredible amount of sweat and tears (no blood, obviously). Even a humble tangerine can, when it is sourced from “the best citrus man in France”, de-pithed with a jeweller’s precision and served on silver, demand new appreciation.

Humm’s journey to this point is the product of the pandemic. Born in Switzerland and brought up by hippie parents, he transformed New York’s Eleven Madison Park into one of the world’s top restaurants. Then, during Covid-19, he had a crisis of purpose. Cooking the same sauces for the same cuts of meat seemed tired and unsustainable. So he turned Eleven Madison Park vegan (with a few exceptions for the private rooms).

The reinvention started badly: “certain dishes are as subtle as a dirty martini,” moaned a New York Times reviewer in 2021, unhappy at the attempt to replicate meat dishes. But redemption quickly followed, via three Michelin stars. 

Ducasse’s story has been a slower burn. One of the world’s very top chefs (his restaurants have been awarded a combined 21 Michelin stars), he has not thrown the meat from the kitchen: his menu for a gala dinner celebrating the 400th anniversary of the Palace of Versailles last year included poultry and fish. But he has for decades championed vegetables. He was one of the first to go to the new Eleven Madison Park. There is a 20-year age gap between him and Humm, but even for innovative chefs, there is safety in numbers at times — or at least they welcome the company.

The palace hotel Le Meurice, set on the Rue de Rivoli, modelled on the Salon de la Paix at Versailles and now part of the Dorchester Collection, is not a natural place for experimentation. The dining room is imposing, with chandeliers, marble and frescoes. 

But modernity impinges: the wood fire has been substituted for a TV screen with flames in order to protect the culinary aromas. And the lull in visitors after Paris Fashion Week gave some leeway for change. If the Rue de Rivoli can be turned over largely to cyclists and pedestrians, so Le Meurice can make way temporarily for vegetables.

The menu is an assortment of dishes by Eleven Madison Park and Le Meurice Alain Ducasse, which have exchanged a handful of front- and back-of-house staff while the collaboration takes place. A beetroot is rendered chewy, gooey even, accompanied by chilli. A potato is poached and served with slices of black truffle. Instead of butter, we had vegan butter, infused with squash and shaped like a butternut. The tonburi, seeds from Japan, softened and wrapped in collard greens, were a delight of their own, to the extent that the label “vegan caviar” seemed superfluous. The oyster mushroom, with ginger and lemongrass, hinted at the crispiness of chicken skin and the softness of flesh.

My dining partner suggested that the clientele at Le Meurice were not the one per cent — but the “0.01 per cent and they had a meal like this in Singapore on Tuesday”. Even so, some diners will no doubt choke on the €440 per head bill for what are, after all, just vegetables. But in the remarkably well mannered kitchen below us, the chefs have to work that bit harder with vegetables than they do with meat. That is perhaps especially true of Eleven Madison Park’s approach. Amaury Bouhours, Ducasse’s executive chef, called this “very geometric”, adding with a smile that, for him: “When it’s good, it’s beautiful, but when it’s beautiful, it’s not always good.”

Tasting menus are not for everyone; our dinner lasted the better part of four hours. And there were off-notes, including the barbecued green cabbage. A chestnut and quince tartlet with shaved bergamot lacked excitement. But the sense of experimentation was exciting and clear, and by the end of the meal it would have been hard to feel that one craved cream or meat. 

As the dinner wound down, Humm toured the tables. He had the beaming, exhausted air of a victorious Olympian. “If I’d known how hard it would have been, there’s no way I would have done it,” he grinned about turning Eleven Madison Park vegan. He admits that he was initially too tied to replicating the previous menu: “Today we’re totally liberated.”

In the streets not far from central Paris, French farmers had been protesting. They are unlikely to be receptive to any efforts to steer away from meat production. (France is Europe’s largest producer of beef and second-biggest producer of poultry.) But change is happening, and this collaboration had at least convinced the 35-year old Bouhours, himself a star in the making. “I am young. The young chefs want to change the vision,” he told me. “A lot of the time, people say, ‘We are French, we are the best.’ No, not for me. If you stay with the same proposition all the time, gastronomy is finished.”

Henry Mance was a guest of Le Meurice Alain Ducasse

Alain Ducasse and Daniel Humm’s vegan dinner series will be at Eleven Madison Park, New York, from February 20 to 23 ($475 a head; $950 with wine pairings)

FT : Will Germany deliver on its grand military ambitions?

Will Germany deliver on its grand military ambitions?
Berlin is taking a more muscular approach to national security, but concern is growing over how it will maintain the necessary spending

Holzdorf military base was once the pride of Communist East Germany, a strategic linchpin for the Warsaw Pact countries who opposed Nato. Now it is being remade as one of the west’s biggest bulwarks against Russia.

The base’s runway is being expanded, so any plane in the Nato arsenal can land there. Soon it will take possession of 60 new Chinook heavy-lift helicopters and the Arrow air-defence system from Israel, capable of shooting down intercontinental ballistic missiles before they enter the Earth’s atmosphere.

“Over €500mn will be spent on new infrastructure here — hangars, maintenance bays and new flight operations areas,” says Colonel Christian Guntsch, the German military staff officer in charge of the expansion plan.

But the arrival of the Chinooks will be the “crowning glory” of the transformation, he says. They will replace Germany’s lumbering Sikorsky CH-53 choppers that have been in use since 1972, and are so old that the army has struggled to find spare parts when they break down.

The Chinooks and Arrow interceptors are being paid for out of a new €100bn debt-financed fund for the Bundeswehr, the German armed forces, that has become the centrepiece of Berlin’s new, more muscular approach to national security.

The investment fund highlights Germany’s goal of becoming Europe’s biggest military spender and providing its largest conventional army — a power capable of deploying huge resources at short notice to fight a potentially brutal land war on its doorstep.


Chancellor Olaf Scholz unveiled the cash injection just three days after Russia embarked on its full-scale invasion of Ukraine, in a speech to the Bundestag that described the war as a “Zeitenwende” — a watershed moment — in Germany’s modern history.

The commitment allowed Scholz to fulfil one of his key pledges: that Germany would dedicate 2 per cent of its gross domestic product to defence, a Nato goal it signed up to in 2014 and had, until this year, never achieved.

Germany will spend nearly €72bn on defence this year, more than it has ever done in the history of the Bundeswehr. Some €52bn will come from the regular budget and €19.8bn from the investment fund.

“The transformation we’ve seen since January 2022 has been revolutionary, compared to the policies Germany pursued in the past,” says Claudia Major, a defence analyst at the German Institute for International and Security Affairs.

But concern is growing about what will happen after 2027, when the fund has dried up.

Experts believe the country will then have to stump up an additional €25bn-€30bn a year out of the general budget to meet the 2 per cent goal — an eye-watering sum that could require swingeing cuts in welfare spending if the country is to balance the books.

“We need a broader discussion about where the additional €30bn are going to come from,” says Christoph Heusgen, the longtime foreign policy adviser to former chancellor Angela Merkel and now head of the Munich Security Conference, the “Davos of defence”, which opens this week.

“There is going to have to be a big debate about resources, and how they’re allocated,” he says. “And my impression is that the government is scared to have this discussion, and is just delaying it.”

There is one person in the government who has openly addressed the problem — Boris Pistorius, the popular defence minister.

He has argued that the absence of a long-term perspective makes it next to impossible for the Bundeswehr — and the arms manufacturers that supply it — to plan for the future.


Speaking to the Bundestag in late January, he said that defence required “a reliable, sustainable, and yes, a rising [military] budget”.

“The €100bn fund was an important first step,” he told MPs. “But we must start thinking today about how we want to adequately equip the Bundeswehr even after the fund has been fully spent.”

The appeals for more money have been backed up by an escalation in rhetoric that Pistorius himself admits is designed to “shake the Germans awake”. He said last month, for example, that Putin could attack a Nato member state “within five to eight years”. “We have a threat level in Europe the likes of which we haven’t seen in 30 years,” he told the newspaper Tagesspiegel.

Such fears are now being compounded by the spectre of a second Donald Trump presidency — and a new era of American isolationism that could presage. Last Saturday, Trump declared that his administration would “encourage” Russia to attack any Nato member that failed to spend enough on defence — a comment widely condemned in Germany. Scholz said any attack on Nato’s principle of collective defence was “irresponsible and dangerous and solely in Russia’s interests”.

In the past few years, Europe has committed to taking on a greater share of the burden of collective defence. But that commitment is predicated on German military spending remaining at its current record levels — and that might be a pious hope.

MPs from the three parties in Scholz’s coalition government dismiss the growing fears about the army’s long-term financing. They quote finance minister Christian Lindner, who assured the Bundestag’s defence committee in late January that the 2 per cent goal was safe.

“He said the finance ministry is starting to prepare for this in its medium-term financial planning,” says Marie-Agnes Strack-Zimmermann, chair of the Bundestag’s defence committee.

And anyway, she adds, all three parties in the government, as well as the opposition Christian Democrats (CDU) and their Bavarian sister party, the CSU, were committed to the 2 per cent goal.

“The chancellor stands by it, as do the finance, foreign and defence ministers . . . and the CDU/CSU tell us they do too,” she says. “So regardless of who’s in power after the next election, everyone should feel responsible for implementing it.”

But privately, no one in power seems to know how the target can be reached — especially considering the tight constraints on the German budget. Germany is one of the few countries to have a curb on new borrowing inscribed in its constitution, the so-called debt brake.

With such a straitjacket, plugging the Bundeswehr’s funding gap could prove difficult. “Will we have to cut the welfare budget? Abolish the debt brake? Raise taxes?” asks one minister. “We’re putting off the decision — but something is going to have to give. The sums just don’t add up.”

Scholz’s Zeitenwende speech finally recognised a truth that had long been evident to Germany’s generals — that the country’s military capabilities were dangerously depleted.

At the end of the cold war, the Bundeswehr had a troop strength of half a million, making it one of Europe’s most formidable fighting forces. But between 1990 and 2019, manpower fell by 60 per cent.

The army became a kind of orphaned child, starved of funds. Military hardware was either mothballed, sold off or scrapped. One study by the German Economic Institute (IW) found the army had been underfunded relative to Nato standards by at least €394bn between 1990 and the early 2020s.

Scholz called time on this era of parsimony. In late 2022, he boasted that Germany would soon have “the biggest conventional army” of all the European member states in Nato.

Pistorius has gone even further, saying in an interview last November that Germany must become “kriegstüchtig” — a word that means “ready to wage war and capable of doing so”. It drew howls of protest from the pacifist wing of his Social Democrat party.

The shift in rhetoric has been astonishing to some. “Five years ago, people would have called Pistorius crazy for using that word,” says Heusgen. “Now he’s Germany’s most popular politician.”

But some are still disappointed. “It’s the tragedy of the Zeitenwende transformation,” says Major, the defence analyst. “Despite all our efforts, it’s just not enough.”

Part of the problem is that despite all the new money, the Bundeswehr is in many ways even less well equipped than it was before the Russian invasion of Ukraine. Germany has given a lot of its best kit to Kyiv. And it is still not clear how and when the gaps will be filled again.

For example, Germany donated 14 armoured howitzer 2000s, one of the most advanced systems of its kind in the world. But, under current contracts, only 10 of them will be replaced. A defence ministry spokesman said there was an option to buy 18 more for the army — “funding permitting”.

Meanwhile, plans to swap the five Mars II rocket artillery systems supplied to Ukraine for five Israeli-made “Puls” multiple rocket launchers are moving at a snail’s pace, with the Bundestag still to approve the purchase. It could also take years before the Bundeswehr gets replacements for the 18 Leopard 2 A6 battle tanks it gave to Kyiv.

A potentially larger problem, though, is the long-term funding issue. “We are starting a lot of procurement projects that won’t be completed by the time the €100bn has been used up,” says Johann Wadephul, the CDU’s spokesman on defence and foreign policy. “We’ll have paid for part of the F-35 fighter jets, part of the infantry fighting vehicles, part of the new ships, but not all. That’s why the financing must be continued.”

The lack of clarity on financing is a big drawback for arms manufacturers, who are reluctant to invest in new production capacity without an assurance of future orders. “Industry needs to know it has buyers — say a five or 10-year plan with guaranteed offtake,” says Strack-Zimmermann.

“That’s especially important for the Mittelstand [small and medium-sized enterprises] who need certainty when they’re hiring more people or increasing capacity,” she adds. “But right now there’s no long-term offtake capacity in the system.”

Military procurement also remains a problem. Scholz’s government has pushed through new measures to speed up and simplify procedures, for example by restricting the right of losing bidders to legally challenge the results of tenders. Pistorius boasts that 55 orders for military equipment priced at €25mn and above — a record number — were presented to the Bundestag defence committee last year. This year, he predicts, it will be even more.

“We’re really stepping on the gas,” he told German TV last month.

But critics say the system is still too slow. “Don’t forget that a year after the Zeitenwende [speech], industry was saying that virtually no additional contracts had been signed,” says Ulrike Franke, senior policy fellow at the European Council on Foreign Relations. “Somehow, even now, we are still caught in this bureaucratic procurement nightmare.”

Meanwhile, Pistorius — who so far has the strong backing of the chancellor — is still encountering resistance in the system.

“Sometimes it seems like he’s tilting at windmills,” says Franke. “He asked for €10bn extra for the 2024 defence budget and got €1.7bn. The reality does not match the rhetoric.”

There is also a question mark over one of Germany’s most ambitious plans — the stationing of a 5,000-man brigade in Lithuania that will be the country’s first permanent foreign deployment since the second world war.

Experts say it is still unclear how it will be formed. Potential recruits have no sense yet of where their families will be accommodated, where their children will go to school or where their partners can work.

“You can’t fulfil your promise of sending an operational armoured brigade . . . to Lithuania without additional personnel and material,” Markus Grübel, a CDU MP, told Pistorius in a parliamentary debate last month. “The brigade is so far not backed up with sufficient money. This promise, too, risks being broken.”

That goes to the heart of one of Pistorius’ biggest challenges — personnel. Germany’s defence ministry plans to expand the army from 183,000 active servicemen and women to 203,000 by 2031. But that will be a gargantuan task, especially considering Germany’s ageing population and deepening shortage of skilled workers.

Even now, 20,000 vacancies must be filled every year as professional soldiers and voluntary conscripts leave the service or long-serving officers retire. Statistics show the number of applicants for jobs in the armed forces is declining.

Yet calls on the Bundeswehr are only expected to grow. Last year, Germany offered to provide Nato with 30,000 troops and 85 aircraft and naval vessels within 30 days of any major conflict, under the alliance’s New Force Model. But finding enough people to fulfil that pledge will, according to Wadephul, be “extraordinarily difficult”. Meanwhile, Russia has shown throughout the Ukraine war that it can draw on vast — though not infinite — resources of manpower.

“We have to be honest: in terms of materiel and personnel, we are lagging behind,” he says.

Holzdorf provides a striking visual metaphor of the personnel shortage, and the scale of the task facing Germany’s military.

At one end of the 2.5km airstrip, a single construction worker, clad in bright orange overalls that mark him out against the dark-grey Brandenburg sky, toils with a shovel shifting hard earth into a pile.

Holzdorf’s commandant, Lieutenant Colonel Sascha Bleibohm, has no illusions about the challenges the federal government faces in reshaping Germany’s armed forces. But he is confident Berlin will stay the course.

“We see from the political side how much will there is to make this a success, I have to say,” he says. “That’s one thing the troops also all recognise.”

For Col Guntsch, the Zeitenwende means that “we are finally being put in a position to fulfil our mission — now but also in the future”. But his optimism is tinged with a warning: “Security does not come for free.”