Nestlé and Fonterra to Develop NZ’s First Net Zero Dairy Farm

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Nestle and New Zealand’s largest milk processor, Fonterra have partnered to develop the country’s first net zero carbon emissions dairy farm.

The net zero milk project will assess the dairy farm’s total carbon emissions and will run for 5 years with co-partner Dairy Trust Taranaki.

It aims to reduce emissions by 30% by mid-2027 and achieve net zero emissions in 10 years.

The pilot project will be on a 290-hectare property, and any insights and activities will be shared with other farmers to increase adoption. Farmers can then adopt techniques and technologies most suitable for their own farms.

Reducing New Zealand’s Dairy Emissions

The agricultural industry makes up 48% of New Zealand’s overall emissions. Methane, nitrous oxide (N2O), and CO2 are the key components of the livestock industry’s total emissions.

The Institute for Agriculture and Trade Policy (IATP) says 15 of the largest dairy companies in the world (including Fonterra) are responsible for 3.4% of global methane emissions and 11% of total global livestock emissions.

Last month, New Zealand sought to levy farmers for the emissions of their cows. But apart from the cows’ own emissions, the dairy ingredients they provide also emit pollution.

The country has the lowest carbon footprint for milk in the world. Still, dairy contributes about 50% of the country’s agricultural livestock emissions. And about a quarter comes from dairy biological emissions (N2O and methane).

Commenting on the partnership, Fonterra chief executive Miles Hurrell said in a statement:

“New Zealand already provides some of the most sustainable nutrition in the world through its pasture-based dairy system. This new partnership will look at ways to further reduce emissions, increasing the country’s low-emissions advantage over the rest of the world…”

Fonterra is one of the largest dairy producers in the world, and this net zero milk project will help lower emissions with its pasture-based farming systems, ideal climate, and efficient producers.

The announcement comes after Fonterra told dairy farmers earlier this month that it’s planning to set a target for Scope 3 emissions. This source includes farm emissions which are critical in meeting sustainability expectations from customers and export markets.

This New Zealand pilot scheme will hopefully be the first of many global projects. The dairy farm project will help both Nestle and Fonterra in achieving their climate goals. Both aim to achieve net zero emissions by 2050.

On their Way to Net Zero

Nestle New Zealand CEO Jennifer Chappell said that the project would build on the food giant’s work worldwide to help transform the dairy industry.

Nestle has over 100 pilot projects globally, with 20 farms working out their net zero targets. She also added that:

“Dairy is our single biggest ingredient, and our vision is that the future for dairy can be net zero… To reduce our Scope 3 emissions, it’s critical we work with dairy farmers and their communities. Working towards a net zero farm means looking at all aspects of the farm, from cow nutrition to sequestering carbon.”

She hopes that this top-down approach of reaching their broader climate goals will only work by closely looking at the details of dairy farming.

Every farm is different so there’s a need to look for specific levers that might work within each farm to keep monitoring and adapting for the conditions on that farm. They will share any lessons learned along the line to mainstream on-farm practices that can slash emissions from dairy production.

Dairy and livestock farming account for around 33% of Nestle total emissions. So to meet their climate goals, the company must support dairy farming to change its means of production.

The dairy farm project with Fonterra will help Nestle meet its goals to reduce emissions by 20% by 2025, 50% by 2030, and net zero by 2050.

Aiming to decarbonize by the same period, Fonterra echoes the food company’s outlook. Miles Hurrell noted that their partnership will enable their customers to also reduce their footprint.

The CEO further said that working with Nestlé will help their farmer-owners discover solutions to the industry challenges.

“Working with partners like Nestlé is our best opportunity to create innovative solutions to local and global industry challenges.”

Cutting On-farm Dairy Emissions

The partnership also involves launching a support program for dairy farmers. Farms enrolled in the project will get additional support from Fonterra to allow reductions in on-farm emissions.

Solutions may include improved management of feed and pasture and enhanced milk production efficiency. The pilot will begin with about 50 farms and be scaled up over the next 3 years.

In the U.S., Neutral Foods is a company that tracks and buys carbon credits to neutralize emissions from dairy farms. It’s also partnering with farmers to help them cut their own emissions at the source.

Neutral Foods measures the emissions of its dairy products’ entire lifecycle. Then the company buys carbon credits for the emissions it wanted to offset.

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TPG-Backed Carbon Credit Firm Rubicon to Raise $1B

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A TPG-backed carbon credit firm Rubicon Carbon announced it would raise $1 billion in capital and be run as a separate entity.

Rubicon Carbon was initially backed by a leading alternative asset manager TPG Rise Climate with $300 million. The carbon credit firm seeks to source and fund projects that remove carbon and sell the credits to other companies.

Rubicon was developed by TPG’s impact investing strategy to deliver innovation and greater scale in the carbon market. It is also to meet the growing demand for high-integrity emissions reduction solutions.

Bank of America, JetBlue Ventures, and NGP ETP will be among the major co-investors in Rubicon’s initial equity financing. With their funds and TPG Rise contributions, the carbon credit firm targets a total capital raise of $1 billion.

TPG will remain the majority owner of Rubicon after the funding but there’s no disclosure on how much is the stake.

Making Access to the VCM Easier

The voluntary carbon market (VCM) is an important mechanism for ramping climate actions. Trading in this market reached around $2 billion in 2021, according to Ecosystem Marketplace. And that could hit $50 billion by 2030, as per McKinsey estimations.

But despite the addition of new carbon credit marketplaces, rating agencies, brokers, and exchanges, some issues remain persistent.

In particular, insufficient project financing, limited supply, and lack of accessibility cause problems in the VCM. To help fix this, Rubicon aims to provide easier access to the carbon market by vetting projects and their credits.

More importantly, the firm will provide a technology-driven method of analyzing, monitoring, and reporting that lowers costs for companies.

Rubicon’s initial product, the Rubicon Carbon Tonne (RCT), provides enterprise customers access to proprietary sets of both nature-based and industrial-based carbon credits. RCTs will be backed by an initial inventory of verified carbon credits amounting to 20 million tonnes of CO2 removed from the air.

All RCTs will include a suite of services, offering a unique end-to-end solution that reduces costs of producing credits.

Moreover, the carbon credit company is developing a financing solution called Rubicon Carbon Capital. This will enable the firm to work with developers and help fund new projects. A portion of the $1 billion will be for establishing this initiative.

According to the firm’s Chairwoman, Anne Finucane, former Bank of America Vice Chair:

“Rubicon is designed to be the market-based solution that allows both the supply and demand side of the global carbon market to scale responsibly. We look forward to working in cooperation with a growing consortium of businesses, governments, and foundations to accelerate the flow of capital to real emissions reduction solutions.”

Rubicon will be partnering with Anew Climate, Pixxel, Planet Labs PBC, and Rialto Markets.

Leading the Carbon Credit Team

Chief Executive Tom Montag, the former chief operating officer of Bank of America, will led Rubicon’s management team.

Remarking on the announcement, Montag said:

“To deliver on net zero and… to balance any remaining emissions that cannot otherwise be eliminated right now, we must scale high-quality carbon credits in parallel. Rubicon addresses several market pain points and offers exceptional ease-of-access to vetted, high-integrity credits to further accelerate emissions reduction globally…”

Dr. Jennifer Jenkins, who won a Nobel Peace Prize on climate change, will be the Chief Sustainability Officer. She noted that as demand for carbon credits grows, “so too should the size and quality of the projects that underpin the carbon market.”

Rubicon joins TPG Rise’s diverse portfolio of climate solutions focused on carbon credit reductions and removals. These include collaboration with Anew, the leading developer and marketer of carbon credits in North America. Anew is Rubicon’s supply partner and manages sourcing and procurement for the firm’s carbon credit inventory.

The company also formed a coalition of corporate sustainability leaders to help guide its platform and product development. They include Aon, Bain & Company, Cushman & Wakefield, Dow Inc., J.P. Morgan, Kirkland & Ellis LLP, McKinsey & Company, SMBC, among many others.

Rubicon Carbon is not a replacement for aggressive carbon emissions reduction, according to the founding partner of TPG Jim Coulter. Instead, it’s an end-to-end solution for entities that choose to include high-quality carbon credits as part of their net zero strategy.

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Saudi Power Firm Inks $7B Green Hydrogen Thailand Deal

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Saudi Arabian renewables developer ACWA Power signed a $7 billion agreement with two Thai state-owned companies to develop green hydrogen in Thailand.

ACWA Power is a leading Saudi developer, operator, and investor of power generation worldwide. It signed a Memorandum of Understanding (MoU) with these state-owned firms in Thailand:

PTT Public Company Limited (PTT), Thailand’s national integrated energy company
Electricity Generating Authority of Thailand (EGAT), an electric power-related state-owned enterprise

The landmark MoU will help meet Thailand’s domestic energy needs while enabling export opportunities with the goal is to establish large-scale renewable-powered green hydrogen plants.

Developing Green Hydrogen in Thailand

Thailand pledged to become carbon neutral by 2050 and reach net zero emissions by 2065. Other Southeast Asian countries have earlier net zero pledges, like Indonesia by 2060.

The Kingdom said it will have a six-point plan to ensure progress towards carbon neutrality and net zero emissions. Part of this plan is to promote eco-friendly or green businesses and boost carbon credit trading in the private sector. Then the government will connect clean energy trading platforms with the carbon credit market.

Thailand sees green hydrogen as clean energy and an alternative renewable energy source. So, it will play a major role in bringing the country to net zero while building a low-carbon circular economy.

According to PTT president and CEO, Auttapol Rerkpiboon:

“The collaboration with international leading companies such as ACWA Power and EGAT to explore and study the opportunity to invest in green hydrogen is a significant milestone for PTT… to promote Thailand’s low-carbon society along with improving the quality of life of Thai people, developing societies, communities, the environment, and strengthen Thailand’s economy to grow together sustainably.”

The signed deal has an investment value worth US$7 billion. It aims to produce around 225,000 tons of green hydrogen each year. That’s equal to about 1.2 million tons of green ammonia.

The three firms will focus first on doing an investment feasibility study for the proposed green H2 and derivatives projects in Thailand.

Expanding Green H2 Worldwide

Paddy Padmanathan, CEO of ACWA Power, commented:

“We are excited at the prospect of supporting green hydrogen and derivatives exploration and advancement in Thailand, a nation that shares our vision for reliably and responsibly delivering clean energy that drives the sustainability agenda and complements essential climate action worldwide…”

The Saudi Arabian developer continues to ramp up its commitment to green H2.

In the first half of this year, the power company also signed a multi-billion dollar joint deal in Oman for a green ammonia production facility.

Also, the developer tapped the Indonesian market with its floating solar PV projects earlier this month. The firm said that these landmark projects will help Indonesia meet its renewable energy target of 23% by 2025.

And in the previous week, ACWA Power also sealed another MoU with an Indonesian state-owned power company PT Perusahaan Listrik Negara or PLN. They will develop potential battery storage and green hydrogen projects in the country.

Same with Thailand, the partnerships with Indonesia will be for the joint development of green H2 and green ammonia facilities.

In the recent debate on clean energy transitions, green hydrogen has been the leading topic. Hydrogen itself is available at an industrial scale. It also offers a lot of uses, especially in powering things.

As per industry estimations, hydrogen demand has tripled since the 1970s. And that volume grew to ~70 million tonnes in 2018 – an increase of 300%.

And since producing green hydrogen uses a renewable energy or low-carbon source, many speculate it would be the energy of the future.

Meeting this forecast calls for trillions of dollars by 2050 – around $15 trillion, which is $800 billion of investments per year.

Major oil companies also have plans to pump huge investments to make green H2 a serious business. Examples are Shell, Adani, and TotalEnergies, who will be deploying billions of dollars in developing green hydrogen.

The parties to the green hydrogen deal in Thailand will now be commencing the feasibility study for the project.

The post Saudi Power Firm Inks $7B Green Hydrogen Thailand Deal appeared first on Carbon Credits.

How Do I Buy Carbon Credits?

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Companies and individuals alike have been investing in carbon credits to offset their carbon emissions. But not everyone is familiar with how to buy carbon credits.

While buyers of the credits don’t have to be expert in all the rules and procedures of carbon offsetting, at least they should have a basic understanding of how the credits are generated, issued, and bought.

So if you’re asking the same question “how do I buy carbon credits” or how do you get carbon credits, this guide will help you through it.

How Do I Buy Carbon Credits?

The annual carbon footprint of an average American is 16 tons. It’s one of the highest globally. So, personally taking action as an individual or company to reduce emissions will make a big difference for the planet.

But only when you know how.

Your buying options largely depend on one thing – where in the lifecycle of the credit you should buy.

Broadly speaking, the earlier in the cycle, the better the price and terms will be. But the delivery risk could be greater. Plus, it may be longer to actually receive the credits.

So, how do you buy carbon credits in the best way possible?

Understanding how carbon credit works, its value, and when in its lifecycle to purchase.

What is the Value of a Carbon Credit?

Carbon credits are the currency of the global carbon market. They represent tonnes of carbon emissions.

Simply put, one carbon credit offsets or permits one tonne of carbon emissions.

The price of a carbon credit varies widely, affected by these things:

Supply and demand
Market sentiment
Project costs/variables
Carbon quality control or standards

Here’s the current prices for carbon credits available in the market.

Under the compliance or regulated carbon market, carbon credits serve as permits to pollute. Within this market, the government has the final say as to how much carbon companies can emit. It’s then up to them to stay under their allowed levels of carbon.

If they went over their limits, they’re going to pay a fee for each tonne of carbon above the permitted amount.

Carbon credits work differently in the voluntary carbon market (VCM). That’s primarily because buying carbon credits is entirely voluntary as the name says.

Entities purchase the credits simply because they want to. Not because the government tells them to do so.

In the VCM, carbon credits are known as carbon offsets. And it’s not only companies but also individuals and other entities that can buy offsets.

So, it means that carbon offsets are handy to both you, as an individual emitter and your company.

Our focus is on the carbon credits in the VCM and how to acquire them.

Going back to your question how to buy carbon credits, let’s walk you through as a company or corporate buyer.

How Can A Company Acquire Carbon Credits?

Buying carbon credits can erase a company’s carbon footprint. But there are some things you need to do first.

Calculate the carbon emissions of your company. Remember that each credit represents one tonne of carbon dioxide or its equivalent.

So, if your company emitted a total of 1 thousand tons of GHG in one year, you need to buy 1,000 carbon credits to offset all of them.

This carbon accounting is to make sure that your firm doesn’t emit more than it can absorb. It will also help provide financing to carbon mitigation projects.

After calculating your company’s total carbon footprint, it’s time to decide how much of it is for offsetting. Then you can determine the amount of carbon credits to buy.

But before you draw out a check for the payment, take a break. And then consider when in a credit or an offset’s lifecycle to make the purchase.

The Carbon Offset Lifecycle and When to Buy the Credits

Stage 1. Methodology development

Before any carbon reductions are certified to be carbon offset credits, they have to show that they meet the criteria. This needs a certain methodology or protocol that’s meant for a specific type of a project that generates the credits.

But project developers can also propose new protocols for the project. This is where a carbon credit buyer can financially support the development of a methodology for the new project.

Stage 2. Project development & registration

The next stage is when developers design the project and develop it with financial support from investors. The design will then be validated by an independent verifier before it gets verified and approved by a carbon offset program.

Only by then that the project can be registered and generate carbon offset credits. This is the point as to when and how a company can acquire carbon credits – by directly investing in a project in return for rights to the credits the project will deliver.

Acquiring carbon credits at this stage can be advantageous for your company as a buyer. That’s because you’ll be able to lock in a price for the credits that’s lower than market price. An option contract is an example of this.

Stage 3. Project verification and carbon credit issuance

A carbon offset project is implemented, then monitored, and verified to determine the quantity of emission reductions it generated. The length of time to verify varies but it’s usually one year.

Once the carbon program approves the reports, it then issues the corresponding number of carbon credits. That’s equal to the amount of verified CO2e carbon reductions. Carbon credits are often deposited into the developer’s account in a registry system by the carbon offset program.

Project developers may have unsold credits for which they’re seeking buyers. If your company buys directly from them, you may avoid some transaction costs. You just have to deal with any quality concerns.

Stage 4. Carbon credit transfer
After they’re issued, carbon credits can be transferred into different accounts in an offset program’s registry. Transfers are made as a result of a trade, and credits can move among multiple accounts.

As a buyer, your company can then use those credits to offset your business’ footprint and then retire them.

Stage 5. Carbon credit retirement

Holders of carbon credits must retire the offsets after they’ve used them and claim their reductions.

After retirement, the offsets cannot be transferred or used. In other words, the credits must be removed from circulation.

If you have a small company and wonder how to acquire carbon credits at this time, one way is through retailers. They can provide access to credits from a wide range of projects and maintain accounts on carbon program registries. They can also retire those offsets on your behalf.

Apparently, whether you own a large firm or just a small one that’s not part of the compliance market, you can still opt to offset your emissions by purchasing carbon credits.

But how do you get carbon credits successfully? What should you have to consider for a successful transaction? Let’s turn to these vital queries next.

How Do You Get Carbon Credits?

Generally speaking, for each metric ton of CO2 captured, reduced, or avoided, you can get one carbon credit for it.

Projects that do a good, verifiable job of sequestering CO2 can earn a large number of credits and then sell them. This offers a great way to fund those projects, or even earn a big profit.

Meanwhile, entities that emit GHGs can purchase credits to offset their emissions. Buying gives them the chance to still become carbon neutral even if they don’t operate the projects or don’t have direct access to them.

In other words, you can still get the credits for pollution you can’t avoid.

Getting the best carbon credits you need, either as an individual or a company, requires a couple of things. Four of the most important ones are:

The right timing: how quickly you need to get the credits and when you need them delivered)
How many carbon credits you need to acquire
The price you can afford
The level of engagement you can put for the transaction: can you go directly with the developers or do you prefer more hands-off buying options?

Factoring in all these variables is crucial so you don’t end up in a mess.

It’s the same when you’re thinking of hosting a party in your place. You have to decide when it will be held, how many people to invite, how much is your budget, and how much effort you can put into it.

Options to Buy Carbon Credits

Once you have slept on those criteria for a successful purchase, you can now proceed choosing from among these many ways to buy carbon credits to offset your footprint.

Buying directly from project developers

The most direct way to get the offsets is at the source. That’s from the project developer you want to support. Here are the top five developers that get the highest ranks.

This option involves three subways to get your hands on the carbon credits.

The first two may not be for you if you need the offsets sooner. But the third one may do.

Direct investment in an offset project.

That money is in exchange for rights to the carbon credits the project will generate. Getting involved at this 2nd stage of project development will give you a full understanding of the project’s weaknesses and strengths.

Not to mention that you can access the credits at a lower cost.

But going for this option also means you have to be willing to wait for around 3 – 5 years before the credits can be delivered. It will be a long-term purchase agreement.

2. Contract for delivery

Many offset buyers opt to contract directly with the developer for delivery of the credits as they’re issued. The contract is often called the “Emission Reduction Purchase Agreements” (or ERPAs). Option contracts are a common form of ERPAs.

Opting for this means brings you the benefit to get the offsets at a cost that’s often lower than market prices. But then again, you’ve to commit to a long-term agreement (2-3 years).

3. One-off transaction.

This purchasing option still involves the project developer who may have unsold carbon credits left on their account. Buying directly from them means you’ll get the credits immediately. It also prevents you from committing in a long-term agreement.

The catch, however, is that the available volumes might be low as the credits are somehow left-over.

Buying from a broker

Just like other commodities, there are brokers for carbon credits. Some developers work with them to deal with the sale of their credits.

Brokers can make it easier for you or your company to locate the credits you’re looking for (project, price, location, etc). They may also give you an analysis of the projects where the credits are from.

This option seems to be practical, especially if you need a lot of carbon offsets. The broker handles all the transactions involved on your behalf. And the acquisition process doesn’t involve long-term contracts.

That sounds cool, not getting you busy looking around. But that comes with a price.

Expect to pay more for all the services the broker did for you. It also may not be a good option if you need low volume of credits only.

Here’s an example of how it looks when you transact on a broker’s website like Nori.

As an individual, you can simply enter the number of credits you want to buy on Nori’s website as shown below. The marketplace also shows on the left panel what project is currently selling offsets.

If you’re a corporate buyer looking for bigger volume, you may opt to subscribe and use various tools available to calculate your footprint. Then based on your total emissions, you can select the corresponding subscription of credits for each month.

Buying from a retailer

If you’re still bothered how do you buy carbon credits and you only need a small amount, then searching for an online retailer could help. This may also be the fastest way to get the offsets.

Retailers can give you at least basic information about the projects from which they get the carbon credits they’re selling. Most often, they hold an account on a carbon registry and retire the offsets on your behalf.

But see to it that after you paid a retailer, you become the official user or holder of the credits.

Buying from an exchange

This last option gives you the opportunity not just to buy carbon offset credits. You can also sell them and earn profits.

There are a number of carbon exchanges or trading platforms that sell offset credits. They often work with registries to enable the trading transactions. We’ll mention the top ones in the next section of the guide.

Getting the credits from an exchange can be quick and easy, and with a lower cost than brokers. But it may also be harder to have enough information to assess the offsets’ quality.

Nonetheless, these exchanges allow you to buy and sell carbon credits. So, how do you do that?

How To Buy And Sell Carbon Credits

Buying and selling carbon credits is a fairly simple process. It’s all about buying low and selling high.

Yet like other markets, the price and value of a carbon credit may fluctuate wildly based on key factors identified earlier.

And though the process is pretty straightforward, the hardest part is knowing which company to pick. But before pondering on some names, here’s a quick 3-step guide to follow.

#1. Select an exchange to trade on. Carbon exchanges work the same way as various stock and commodity exchanges. Here are the top 4 carbon exchanges you’ll find worthy to bet your money.

AirCarbon Exchange (ACX): The most streamlined platform

ACX uses distributed ledger technology (DLT) while leveraging blockchain to create securitized carbon credits. It uses a digital warehouse that lets you, as investors, easily manage assets within your portfolios. This exchange has 6 different tradable carbon asset classes, which includes:

Carbon Trade Exchange (CTX): The most cost-effective spot exchange

Unlike other exchanges, CTX is a member-based spot exchange with various participants, ranging from individual brokers and project developers to big corporations. It allows you to trade credits certified by different standards such as Gold Standard and Verra’s Verified Carbon Standard. The credits that are tradable on CTX include:

Voluntary Emission Reduction (VER)
Certified Emission Reduction (CER)
Verified Carbon Units (VCU)
EUA (EU Allowance)
EUAA (EU Aviation Allowance)

Toucan Protocol: Creator of the most liquid carbon-to-crypto market

Toucan turns Verified Carbon Units or VCUs into crypto via its own proprietary Toucan Bridge. Verification is straightforward all the way down to the offset’s source registry like Verra and Gold Standard.

Plus, “retiring” an on-chain credit on the parent registry prevents double-counting. It means this is done by “burning”, locking it away in a blockchain address that no one has access to.

Xpansiv CBL: The most intelligent exchange for ESG-inclusive commodities

Xpansiv CBL is the global marketplace to trade data-driven, ESG-inclusive commodities like carbon. And the platform does this in an intuitive, user-friendly environment based on deeper data. On the platform, you can trade various carbon offsets from major registries around the world.

By hosting around 90% of all voluntary carbon credit transactions worldwide, Xpansiv is the dominant player in the market. Here’s a quick glance at the Xpansiv CBL’s instructions on how to join its trading platform.

#2. Know the rules of the trading platform. Most exchanges have regulations for who can participate in the trading process. This is why smaller landowners sometimes “pool” their credits together to trade on exchanges. So, carefully read the rules first before you join the trading craze.

#3. Keep your account intact and active. After joining the exchange and starting your first trade, make sure that you understand how to keep your account active.

By keeping in mind those easy steps, you may begin earning money from trading carbon credits.

To wrap things up, here’s the summary of the different options you have when purchasing carbon credits.

Buying Carbon Credits

Purchasing carbon credits or offsets is important. It offers a way to neutralize the emissions you or your company can’t control.

Also, knowing how to buy offset credits is simple as long as you follow this comprehensive guide on how to do it.

Best of all, you even have the option to join an exchange after learning how to buy and sell carbon credits. Carbon offsetting and earning at the same time is a win-win for you and the planet.

It may not be a no-brainer to address your question on how to buy carbon credits, still you have to do more when it comes to which specific type of credit to buy.

But don’t worry, we also got you covered through this informative guide on what’s the best carbon credit to buy. Just go over it and learn more.

The post How Do I Buy Carbon Credits? appeared first on Carbon Credits.

The Great Nuclear Race

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Of the nuclear reactors that have started construction since 2017, 87 percent were designed by either China or Russia.

It’s part of a long-term, calculated effort to steal the nuclear export market from the United States.

From the 1960s through the 1990s, the United States had a booming nuclear export business. It financed and provided the technology for dozens of reactors around the world.

But the market has changed. And the two countries capable of massive government-to-government deals—Russia and China—have skillfully taken over.

Though the nuclear export market has primarily been dominated by Russia in the past decade, China is starting to step up in a big way. 67 percent of all reactors to be completed worldwide by 2030 will be from one of the two countries.

Russia’s state-owned Rosatom has $133 billion in reactor export orders—more than fifty reactors in nineteen countries.

China is planning to export thirty of its Hualong One reactors by 2030, netting it $390 billion.

The U.S.? Zero.

Yet the U.S. Department of Commerce predicts the market will be worth between $500 billion and $740 billion over the next decade.

By 2050, the total nuclear export opportunity is expected to be as high as $1.9 trillion.

But for Russia and China, this isn’t just about money…

It’s about the century-long, unbreakable geopolitical bond created by building a nuclear plant in another country.

That’s why Russia is strategically exporting to surrounding countries.

The death of American nuclear expertise and the associated exports is having other terrifying consequences, too:

It’s losing its influence on foreign policy…
It’s losing its access to nuclear-powered aircraft carriers and submarines…
And it’s losing the ability to set safety standards for nuclear around the world.

In other words, the war for global nuclear reactor dominance has nothing to do with energy security.

It’s about national and global security.

And that’s something the entire U.S. government takes seriously.

“The U.S. Government will move into markets currently dominated by Russian and Chinese State Owned Enterprises (SOE) and recover our position as the world leader in exporting best-in-class nuclear energy technology.”

– United States Department of Energy

Nuclear Comes Home

Restoring the United States to a position of nuclear supremacy is one of the strongest bipartisan issues in the government today.

In fact, for the first time since Richard Nixon was president, both Democrats and Republicans have nuclear energy development in their platform.

And in the past four years, a flurry of laws have been quietly passed to support American and global nuclear energy development.

The legislation is intended to promote four primary areas:

Existing Infrastructure
Innovation
Exports
Fuel

Redeveloping American capacity for each of those will rapidly bring it back as a massive force on the world stage.

In April 2022, the implemented a $6 billion Civil Nuclear Credit Program to prevent reactors from shutting down prematurely.

It’s a deliberate move to force the U.S. to restore its nuclear infrastructure and rebuild its nuclear supply chain and workforce.

Four months later, the Inflation Reduction Act of 2022 (IRA) included several key provisions that made it clear that the United States is throwing its full weight behind nuclear energy.

There’s $150 million for the Office of Nuclear Energy to build out R&D.

And there’s $250 billion that can be used to update, repurpose, and revitalize nuclear infrastructure.

But the most significant is a first-ever production tax credit of up to $15 per MWh.

Not only does the credit make nuclear energy far more attractive to investors . . .

It makes the cost of nuclear $33/kWh lower than offshore wind.

As the subsidies enjoyed by wind and solar are winding down, they’re ramping up for nuclear.

Next, Congress is turning toward developing the next generation of reactors—and the generation after that.

A Different Kind of 5G

Every year, new laws are granting significant funding to nuclear:

Nuclear Energy Innovation Capabilities Act of 2017 – Authorized the creation of the National Reactor Innovation Center.
Consolidated Appropriations Act of 2018 – More than $2.1 billion for Department of Energy and NRC nuclear programs, plus tax credits for new reactors.
Nuclear Energy Innovation and Modernization Act of 2019 – Forced the NRC to streamline the licensing process for advanced reactors.
Bipartisan Infrastructure Law of 2021 – Funding for the Advanced Reactor Demonstration Program.

These laws are all designed to stimulate billions in investment to “help domestic private industry demonstrate advanced nuclear reactors in the United States.”

They even created an “Office of Clean Energy Demonstrations” for that purpose.

The office has already funded an advanced nuclear research group that is building a direct competitor to China’s Fourth-Generation nuclear reactor.

All of this is the exact same template as the ‘60s: quietly fund lots of different types of experimental reactors to see what works.

Then, move full-bore ahead on the ones that do.

Bill Gates says that it’s the only way to optimize new nuclear technology and get “Green Premiums” down.

And it’s working.

More than fifty companies in the U.S. are working to bring advanced nuclear reactor technologies to market.

The first small modular reactor (SMR)—ostensibly the future of nuclear—is targeted to be operational in 2030.

The company running it expects a cost of $58/MWh (compared to ~$70MWh+ for natural gas). And that’s before the new production incentives.

These new reactors will be unlike anything any other country can offer:

“Advanced reactors in development are nothing like the existing technology
prevalent at nuclear plants . . .”
– Director of New Reactors for the Nuclear Energy Institute Marcus Nichol

The Alternative Is Darkness

In April 2022, it was time for step three: financing exports.

You see, the most unassailable edge that China and Russia have isn’t nuclear technology.

It’s state money.

China knows how powerful it can be to force a country into debt.

When the U.S. exported four AP1000 reactors to China—the only U.S. reactor export since 2000—it offered $5 billion in financial assistance. China refused.

And China doesn’t just extend debt financing at favorable terms; it actively takes equity investment in international nuclear projects.

Eventually, China will be able to fund global nuclear solely from its profits from offshore nuclear energy . . . enabling it to offer better financing terms than any other country in the world.

In addition to financing, Russia offers turnkey nuclear plant packages—construction, training, and even operations.

It’s a proposition that the United States is completely unequipped to match.

And it’s why, in early 2022, two senators brought back a secret U.S. weapon in the bipartisan International Nuclear Energy Act.

The Act establishes an Executive Office for Nuclear Energy Policy to develop a civil nuclear export strategy.

“This bill … seeks to ensure we can provide nuclear energy solutions to countries that might otherwise pursue Russian or Chinese nuclear plants.”– Senator James Risch

More importantly, it reopens the floodgates of U.S. nuclear financing.

The U.S. Export-Import Bank (EXIM) is designed to make exports financially available to other countries. Between 1955 and 1965, the bank enabled the U.S. to capture 100 percent of global nuclear exports.

During the ‘70s, EXIM gave out $4.2 billion in grants and $2 billion in guarantees for international nuclear (1975 dollars).

In 1974 alone, the U.S. EXIM bank financed thirty-seven reactors in eleven countries.

And the bank has a sizeable war chest—$135 billion—completely available for spending.

EXIM has already begun funding nuclear exports.

It agreed to finance up to $7 billion for nuclear projects in Romania, including SMRs, after Romania cancelled a reactor order from Russia. . . and it has signed an agreement with Poland to provide financing for their nuclear program.

It’s all part of a master plan toward renewing American supremacy in nuclear energy, and ensuring no one else catches up.

Now that the infrastructure is being restored, innovation is being accelerated, and financing is available, it’s time for the United States to dominate the final chokepoint of nuclear:

Uranium.

The post The Great Nuclear Race appeared first on Carbon Credits.

U.S. to Sanction Brazil’s Amazon Deforestation Criminals

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In a bid to better address climate change, the United States aims to sanction environmental criminals who contributed to the worsening deforestation in Brazil’s Amazon rainforest.

The U.S. has been imposing various strategies, such as tax incentives and multilateral agreements to combat the climate crisis.

But this recent crackdown on Amazon’s deforesters is a major shift in the second largest emitter’s climate strategy.

U.S.’ Sanction Against Amazon Deforestation

Deforestation in Brazil hit a 15-year record high under outgoing President Jair Bolsonaro. Amazon’s deforestation started to surge in 2019 after Bolsanaro took office and loosened environmental protection.

He pushed for more farming and mining the rainforest, arguing it will reduce poverty in the region.

Deforestation in the Amazon soared to record levels in April this year. It hit a record for the first 4 months of 754 sq. miles, up 69% from the same period last year

What that number means is the clearing of the forest area is more than double the size of New York City.

Environmentalists blamed Bolsonaro. They accuse him of “crimes against humanity” at the International Criminal Court (ICC) for his alleged role in destroying the rainforest.

In June, during the Summit of the Americas, the U.S. and Brazil announced a bilateral effort to end illegal deforestation in the Amazon and sanction offenders.

The formed working group aims to contribute to a major and quantifiable reduction in illegal deforestation in the Amazon each year. That’s part of the larger goal of reaching zero illegal deforestation in 2028.

The joint task force will pay special attention to the fight against domestic and international crime on:

Wildlife trafficking,
Illegal mining,
Illegal timber trade, and
Disincentivizing the use of financial system related to illegal activities with forest products

Any major perpetrators of Amazon’s deforestation and other key environmental crimes will be penalized.

Amazon’s Role in Climate Change

Preservation of the Amazon is vital to reversing the catastrophic effects of global warming. That’s because of the huge amount of carbon dioxide the rainforest sequesters.

It has been dubbed as the “lungs of the planet” and absorbs ¼ of the CO2 absorbed by all the land on Earth. That is 2 billion tons of CO2 yearly (or 5% of annual emissions), making it a vital means to prevent global warming.

But that amount is 30% less today than in the 1990s due to deforestation.

Here’s the annual rate of deforestation in the Amazon rainforest until 2021.

A team of experts estimated the Bolsonaro administration’s contribution to rampant deforestation in the region since 2019. They said that the emissions resulting to it will cause over 180,000 excess heat-related deaths globally this century.

According to the leader of a group fighting environmental destruction:

“What’s happening in Brazil — mass deforestation — we want to understand the causal link to the global climate. It is exactly what the Rome Statute defines as a crime against humanity: the intentional destruction of the environment and environmental defenders…”

Ending Deforestation in the Amazon

Brazil’s incoming president-elect Luiz Inacio Lula de Silva pledged to curb deforestation during the COP27 summit last week. He emphasized to the U.S. officials his focus on abating climate change.

Lula promised to end deforestation in the Amazon by 2030, saying:

“There is no climate security for the world without a protected Amazon.”

Brazil’s environment and justice ministries said in a joint statement that the government was working to fight environmental crimes. And that the authorities in the country were cooperating to combat deforestation.

The joint task force between the two countries seeks to achieve these deforestation reduction goals:

15% per year below previous-year levels from 2022 to 2024,
40% below previous-year levels in 2025 and 2026,
50% below previous-year levels in 2027, and
zero in 2028.

Meanwhile, Washington plans to impose “Magnitsky” Sanctions against deforesters.

The Magnitsky Sanctions represent the implementation of multiple legal authorities. Some are in the form of executive orders from the President, while others are public laws by Congress.

The sanctions will punish anybody accused of enabling human rights abuses. They would freeze any U.S. assets and bar all American citizens and firms from dealing with any sanctioned person or entity.

Officials in the U.S. and Brazil have already started identifying and investigating specific targets. Once convicted, their potential punishments range from visa blacklists to Magnitsky sanctions.

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Seafields Unveils 1 Billion Carbon Removal Project Off West Africa

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Seafields revealed its plan to tokenize one billion carbon removal credits from a seaweed farm off West Africa in partnership with the blockchain-based carbon company JustCarbon.

Seafields is a UK carbon removal firm that aims to remove billions of tonnes of carbon dioxide from the atmosphere through its seaweed farm. JustCarbon is Seafields’ sister company aiming to create an accountable, transparent, blockchain-based carbon marketplace for Seafields’ credits to be sold.

Seafields director and co-founder, John Auckland remarked that:

“Stopping ongoing carbon emissions isn’t enough. We also need to scrub existing pre-industrial CO2 fast… By sustainably growing sargassum, we will use the vast space available in the ocean to remove billions of tonnes of CO2 from our atmosphere while also meeting the increasing demand for carbon offsets over the next two decades.”

Seafields Carbon Removal Credits

Seafields’ compressed Sargassum bales are natural ‘carbon batteries’. They’re ocean-grown seaweed sunk to the sea floor to lock away the CO2 for hundreds of years.

Another partner of Seafields, Carbonwave, is making Sargassum into sustainable, high-value products. This, in turn, produces carbon credits.

The carbon removal company plans to build a seaweed farm the size of Portugal – 94,000 sq. km. – off the West African coast. Seafields will grow, harvest, bail, and sink sargassum in the South Atlantic gyre to remove 1 gigatonne of carbon yearly.

This carbon removal project, if fully operational in 2031, will be significant in removing CO2 from the air. The scientists and impact investors supporting it are confident of that.

The certified carbon removal that Seafields will achieve via this project will produce tradable carbon credits called offsets.

The price for each carbon credit varies depending on its co-benefits.

Co-benefits refer to the extra benefits that the project delivers apart from emission reduction like biodiversity conservation and job security.

Most often marketing the co-benefits of CO2 removal projects is left in the hands of intermediaries. If brokers and retailers get a hefty margin from the sale of carbon removal credits, project developers like Seafields end up with a smaller share.

On this note, Auckland said that the project is not viable if they “hand over too much of the margin to retailers and other intermediaries”. He further added:

“If hyper-scale projects like Seafields do not get the funding and investment needed, we will not meet the targets for the decarbonisation of the globe and limiting global warming to 1.5⁰C…”

If the price of a carbon credit goes over $75, as predicted by the IMF, Seafields will receive an income of $74.25 billion from generating 1 gigatonne of carbon removal. While JustCarbon can get as much as $750 million or 1% of the total sales as its minting fees.

The 1 billion tonnes that Seafields and JustCarbon will be removing will help boost the carbon removal market.

As per estimates, the value for this market will grow to over $500 billion by 2050.

Source: BNEF Projections

Blockchain-Based Carbon Removal Credits Platform

The JustCarbon platform uses blockchain technology in minting carbon removal credits from Seafields. It directly connects sellers with buyers by removing brokers from the sales process.

Doing so ensures that 99% of the carbon credits value goes back to the developer to support more projects that remove CO2. This allows Seafields to deal with buyers and sell the carbon credits for a fair price.

Co-founder of JustCarbon, Chad Williams, remarked in the announcement that:

“…and we aim to maximize the funding received by these projects. That’s why we take such a small minting fee rather than the typical intermediary fees of retailing carbon credits, which can be as high as 80% of the credit value.”

The firm’s blockchain-powered system will facilitate the direct sale of Seafields’ carbon removal credits to a global market. It enables everyone from individual consumers to large organizations to offset their unavoidable emissions.

The UK company seeks to supply carbon credits early in 2024 after getting a certification from a carbon standards body. Seafields then hopes to scale up its carbon removal capacity to gigatonnes by 2031.

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Carbon Credits From Drip Irrigation

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An Israeli company Netafim introduced its landmark carbon credits initiative for global rice farmers with its pioneering drip irrigation technology at the COP27 summit.

Netafim is part of the global conglomerate Orbia and was the first to introduce drip irrigation in the ‘60s. The company says its precision agriculture technology can save water, boost crop yields, and reduce carbon emissions.

Netafim said it’s bringing its drip irrigation to Italy, Turkey, India, and other parts of Southeast Asia tod help farmers earn extra income from carbon credits.

Netafim President Gaby Miodownik said:

“This program marks the first time a carbon credit is being generated based on the application of irrigation technology. In the face of climate change, the only surefire route to sustainable agriculture is to grow more with less — less land, less water and significantly less greenhouse emissions.”

Netafim and Its Drip Irrigation Method

Traditionally, growing rice uses up to 40% of the world’s freshwater. It’s also responsible for 10% to 15% of all methane emissions from human activities.

When the world has to reach net zero emissions by 2050, there’ll be 20% less arable land per person to grow enough calories. The demand for rice will also increase by 28% by that period to feed 10 billion people living on earth, according to Netafim.

Add to that the increasing water scarcity, and so it’s clear why efficient agricultural practice is a must.

This is where Netafim and its drip irrigation fits in, championing a precision agriculture technique.

Drip irrigation is one the most efficient water and nutrient delivery systems for growing crops. That’s because it delivers water and nutrients across the rice field in pipes called ‘dripperlines’. They have smaller units known as ‘drippers’.

Each dripper emits drops containing water and nutrients directly to each plant’s root zone, in the right amounts and at the right time. Each crop gets exactly what it needs and when to grow optimally.

By introducing its pioneering drip irrigation system for rice production, Netafim said it can save 70% of the water used in producing rice.

According to the company, the traditional method of rice irrigation requires about 5,000 liters or 1,320 gallons of water per kilo of rice produced. But with drip irrigation technique, only 1,500 liters or 396 gallons of water is needed.

Plus, Netafim’s method uses 36% less energy and 30% less fertilizer. It also cuts methane emissions to almost zero and arsenic uptake by 90%.

But there’s a catch – the drip equipment will be costly for poor farmers. And it may not be an option if water is cheap and abundant.

But that could change with Netafim’s novel carbon credit program.

Carbon Credits from Drip Irrigation

The firm’s new initiative can enable rice farmers to afford the system. And that’s through the cash from carbon credits its drip irrigation generates.

Carbon credits are tradable permits produced from reducing or removing gasses like CO2 and methane. These credits allow companies to offset and lower their emissions which are hard to fully avoid.

Netafim works with researchers who put flux chambers into the rice fields. These devices measure emissions from the ground to the atmosphere in real-time.

The company also has verifiers to validate that the measurement is done properly. The data is further validated by Verra, one of the top carbon credit verifiers. It checks that the method used to sequester carbon follows international standards.

Miodownik noted that:

“If just 10% of paddy rice farmers switch to drip, the drop in emissions will be equal to taking 40 million cars off the road.”

Rice growers using Netafim’s drip lines can earn 10 carbon credits per hectare of land each year.

Given the current prices for each tonne of carbon or its equivalent, running between $20 – $30, it will be another income for many small farmers.

Pre-selling of Carbon Credits

Netafim will see that rice growers adhere to its drip irrigation procedures. Then it will submit the data for verification to Verra, who will issue the carbon credits.

Once those credits are bought, the firm will pay the farmers what is due to them.

But there’s one big problem, especially in developing countries. Farmers have to buy the drip equipment upfront, but the carbon credits will be paid later at the end of the rice season.

So Netafim is looking for those willing to pre-purchase the credits to help farmers access the capital they need. It’s also exploring other models for managing carbon credits and payments.

The cash incentive that the credits represent is a game changer. It’s a “win-win for the farmers, the buyers of carbon credits, and the environment.”

Netafim’s carbon credits program and drip irrigation system will be available to farmers worldwide in 2023.

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Key Highlights of COP27 Climate Summit

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The progress in advancing the global climate change agenda wasn’t only represented in the headlines of this year’s annual UN climate change summit known as COP27. It’s also represented in the efforts of the world leaders behind the scenes.

There were no big decisions due to land at the COP27 conference. But due to multiple crises in 2022, several breakthroughs were reached. Here are some of the key highlights concluded within the two-week summit in Sharm El-Sheikh, Egypt.

COP27 Climate Summit Delivers Several Breakthroughs

The biggest breakthrough came in support for climate victims.

Nations closed the COP27 climate summit with a hard-fought deal to provide financial support from developed countries to poorer ones suffering from climate disasters. They call it compensation for “loss and damage” of the climate crisis. It can be worth up to $1.7 trillion by 2050 according to a study.

This conclusion was seen as a triumph in responding to the disastrous effects of global warming on vulnerable countries. But many nations said this brought a lot of pressure on them to give up tougher pledges to tackle warming for the loss and damage fund to push through.

Developing countries, especially the small islands and other vulnerable nations got the loss and damage fund they have long fought for. The deal is a win for them over the EU and the US, the countries who had long resisted the idea of setting up this fund. But who pays and who benefits remains a battle for COP28.

However, there was little to stop polluters that caused more damage. A proposal to phase out all fossil fuels discussed at last year’s COP26 went nowhere.

And while India decided to turn the heat onto other fossil fuels, along with 80 other countries, Egypt opted out and openly struck gas deals on the sidelines.

Another breakthrough is the US’ revelation of a new voluntary carbon trading market scheme.

Under this new framework, the country will use the proceeds from carbon credits to fund new clean energy projects and help developing nations end their use of fossil fuels. It allows state bodies to earn carbon credits by cutting their power sector’s emissions if they stop using fossil fuels and go for renewable sources instead.

International Trading for Carbon Credits

Carbon credits or offsets allow countries or firms to pay others to cut carbon emissions to make up for their own.

COP negotiators have been discussing how to make international trading of carbon credits work since the 2015 Paris Agreement. In Glasgow’s COP26, they outlined the broad framework for a new global carbon trading scheme. In Egypt’s COP27 climate summit, they filled in some details in a draft text.

By the end of the first week of COP27, negotiators agreed to put off decisions on which projects should be eligible to generate carbon credits. In the second week, they made progress on determining how country-to-country trading would go about.

They also clarified how nations could authorize a project within their jurisdictions to sell those credits outside their borders.

Their agreement creates a two-tier carbon market, specifying the rules on who buys the credits and for what purposes. And though they had finalized most of the guidelines for how the credits under the old trading system can be tied with the new rules, its launch is off as the debate continues into COP28 next year.

The decisions yet to be agreed upon include whether the avoided emissions from deforestation and other projects do quality for carbon credits.

According to Dirk Forrister, the chief executive of the International Emissions Trading Association (IETA) said that:

“The texts provide key elements to implement high-integrity carbon markets that can help deliver net-zero ambitions for all countries. We expect further decisions at COP28 and beyond.”

In the new second-tier market, carbon credits are called “mitigation contributions”. An entity can buy credit from another country, and the host doesn’t have to tweak its emissions inventory.

On the Sidelines of COP27 Climate Summit

Some nations have approved at the COP27 climate summit the first-ever voluntary cooperation known as the Internationally Transferred Mitigation Outcome (ITMO). It’s a carbon emissions trading system where nations can buy or trade carbon credits from other countries. This opens doors to creating new carbon markets and more emissions reductions.

Also, India revealed for the first-time its long-term strategy to reach net zero emissions by 2070. While Canada launched its carbon pricing initiative called the Global Carbon Challenge at the summit.

Meanwhile, Cambodia agreed to sign deals with international corporate buyers for about 15 million tonnes of carbon credits from the country’s landmark REDD+ projects.

REDD+ is a kind of climate change mitigation strategy. It allows communities and governments to gain payments for emissions reductions achieved through forest protection projects.

COP’s Old-Time Favorites and Late-Comers

The most vulnerable nations hit by climate disasters say the annual COPs focus too much on ways to cut emissions. But they don’t pay enough attention to climate adaptation. Early warning systems for climate disasters are some of the adaptation measures.

This concern has been on the table since the Paris Accord started. COP delegates agreed to double the amount of adaptation financing by $40 billion by 2025 in Glasgow.

And though there is some progress in defining a global goal on adaptation, the decisions still fall short of the funding goal. For the director of the Red Cross Red Crescent Climate Center:

“Too little, too late’ is what developing countries are arguing, as climate change is already exacerbating flood events, drought and sea level rise…”

Instead of reaching a final agreement, nations at COP27 adopted a framework that laid out the questions that need answers at a future COP.

The late-comers to the debate are agriculture and food, which accounted for ⅓ of global GHG emissions. Yet talks on reducing these emissions are quite new in the COP agenda.

At the COP27 climate summit, countries authorized a group’s workshops on how to deal with climate-related agricultural issues for 4 more years. These include best practices in livestock, water use, and soil management, as well as food security.

But apart from conducting workshops, nations must translate them into measures that can be done in practice. Over 100 organizations signed a letter urging COP27 delegates to expand the scope of emissions to waste and food consumption. However, the debate kept its focus on agriculture.

Emissions from the food system have to go down, too, for the world to limit global warming. And as the head of advocacy at World Wildlife Fund (WWF) U.K. said, “you can just phase out fossil fuels, you can’t phase out food”.

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