BP’s 2023 Outlook for Global Energy Transition: Key Takeaways

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BP Energy Outlook 2023 unlocks the key trends and insights surrounding the global energy transition out to 2050. 

The 2023 Energy Outlook’s three main scenarios – Net Zero, Accelerated, and New Momentum – are meant to explore possible outcomes for the energy system over the next 3 decades. This will help the oil and gas supermajor to devise a strategy that’s resilient to various ways in which the energy system transitions.

It includes major developments from last year such as the U.S. Inflation Reduction Act and the war between Russia and Ukraine. bp’s chief economist, Spencer Dale, noted: 

“Global energy policy and discussions in recent years have been focused on the importance of decarbonising the energy system and the transition to net zero. The events of the past year have served as a reminder to us all that the transition also needs to take account of the security and affordability of energy. Any successful and enduring energy transition needs to address all three elements of the so-called energy trilemma: secure, affordable and lower carbon.”

2023 Outlook of the Energy Transition

3 Scenarios Exploring the Uncertainties of Energy Transition

The three scenarios are not predictions of what is likely to happen nor what bp would like to happen. Instead, they only capture a wide range of the outcomes possible for global energy transition out until the mid-century. 

Accelerated and Net Zero explore how different elements of the energy system may change to achieve large carbon emissions reductions by 2050, by 75% (relative to 2019 levels) in Accelerated and 95% in Net Zero. Both scenarios assume that there’s a significant tightening in climate policies. 

New Momentum reflects the broad trajectory of the global energy system. It emphasizes substantial increases in climate pledges in recent years. Under this scenario, carbon emissions peak in the 2020s and are around 30% below 2019 levels by 2050.

Net Zero also shows a shift in societal behavior and preferences to support gains in energy efficiency and the adoption of low-carbon energy. The CO2 emissions left in this scenario can be eliminated by either additional changes to the energy system or by deploying carbon dioxide removal (CDR). 

Scenarios in Line with “Paris Consistent” IPCC Scenarios

The pace and extent of decarbonization in Accelerated and Net Zero are broadly in line with IPCC scenarios that are consistent with 2ºC and 1.5ºC.

As seen in the chart above, the fall in fossil fuels and industrial emissions in the IPCC scenario is largely due to a 75% decrease in global coal consumption by 2030. 

The fall in coal consumption in Net Zero by 2030 is smaller compared to the decline in oil and natural gas. This goes to say that coal remains an important fuel in emerging economies where demand for energy is expanding. 

4 Trends Dominating the Future of Energy 

bp’s energy transition outlook for 2023 further reveals the key trends that will dominate future energy demand, including:

A declining role for hydrocarbons
Rapid expansion in renewables 
Increasing electrification
The growing use of low-carbon hydrogen

Key Trends Impacting Future Energy Demand

Consumption of fossil fuels falls down in all three energy transition scenarios in the 2023 Outlook. Their share in primary energy declines from 80% in 2019 to around 55% to 20% by 2050. This is the first in modern history that there’s a continued decrease in any fossil fuel demand. 

Meanwhile, all other three trends show sustained increases in demand. 

Renewable energy includes wind, solar power, bioenergy, and also includes geothermal power. The rise in renewables offsets the falling role of fossil fuels. Their share will go up as much as 65% by 2050 because of stronger policy support for low-carbon energy. 

The big importance of renewables is also driven by the growing electrification of the energy system. The share of electricity in energy use goes up from only 20% to between 35% and 50% by 2050. 

Lastly, the growing use of low-carbon hydrogen in hard-to-abate processes that are difficult or costly to electrify supports the decarbonization of the global energy system. This is particularly true in both Accelerated and Net Zero scenarios. The energy used producing low-carbon hydrogen rises to between 13-21% by 2050 in both scenarios.

CCUS and CDR in Decarbonization Pathways

CCUS Role in Enabling Deep Decarbonization Pathways

Carbon capture, use and storage (CCUS) plays a central role in supporting the transition to a low-carbon energy system by:

Capturing industrial process emissions
Acting as a source of carbon dioxide removal
Abating emissions from the use of fossil fuels

In all 3 scenarios, around 15% of the CCUS operating in 2050 is used to capture and store non-energy process emissions from cement production. CCUS achieves 4 to 6 GtCO2 by 2050 under Accelerated and Net Zero, with only 1 GtCO2 in New Momentum.

By region, the greatest use of CCUS with natural gas is in the US, followed by the Middle East, Russia, and China. In Accelerated and Net Zero, over 70% of the global deployment of CCUS in 2050 is in emerging economies, led by China and India. 

This requires a very rapid scale-up of CCUS in these countries relative to their historical levels of oil and gas production, which can be used as an indicator of the geological suitability and engineering capability to develop industrial-scale CCUS facilities.

CDR is Necessary to Reach the Paris Climate Goals

Climate scientists at IPCC stated that carbon dioxide removal (CDR) is necessary to achieve the Paris climate goals. CDR includes bioenergy combined with CCUS (BECCS), natural climate solutions (NCS), and direct air carbon capture with storage (DACCS). 

BECCS offers the benefit of creating useful energy and negative carbon emissions. But what limits its full potential is the sustainability of the biomass used and its other uses.

NCS conserve, restore or manage forests, wetlands, grasslands and agricultural lands to increase carbon storage or avoid GHG emissions. They can have co-benefits, such as promoting biodiversity, but it can be hard to ensure and monitor their permanence.

DACCS is a process of capturing CO2 directly from ambient air and then storing it. This CDR tech is scalable and offers certainty on additionality and permanence. But their costs are high relative to other forms of CDR. 

The IPCC 1.5ºC scenario includes a rapid scale-up of both NCS and BECCS. Together, they will reach over 7 GtCO2 per year by 2050. 

The 2023 Energy Outlook is to inform bp’s strategy and to contribute to the wider debate about what shapes the energy transition to net zero. But it’s only one source among many when considering the future of global energy markets. And the oil and gas giant is also using other external analysis and information when deciding on its long-term strategy. 

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ArcelorMittal and Microsoft Back MIT Green Steel Firm With $120M

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The green steel technology firm that spun out of Massachusetts Institute of Technology (MIT), Boston Metal, raised $120 million in its latest funding round led by steel giant ArcelorMittal and participated by Microsoft.

The steel industry is raking in about $1.6 trillion in annual revenue. But that’s in exchange for 7% to 9% of the global carbon footprint, says the World Steel Association. 

The industry is, in fact, the largest emitting manufacturing sector because it’s very reliant on coal to produce steel. And bringing it to net zero emissions by 2050 isn’t cheap – costing the industry between $215 to $278 billion. 

But using green solutions to make clean steel can help reduce the cost. This is exactly what the MIT spinout company Boston Metal proposes through its unique electrolysis process. Its technology attracted large companies wanting to decarbonize the industry.

Ramping Up Boston Metal Green Steel 

To meet the Paris Agreement, emissions from steel and other heavy industries have to fall by 93% by 2050. Hence, steel manufacturers need to reduce their emissions in large amounts.  

Good thing MIT technology experts were able to show that it’s possible to make steel without emitting CO2. And that’s when they created a new company to scale the technology in 2013. Four years later, a steel industry veteran with four decades of experience, Tadeu Carneiro, became Boston Metal’s CEO. 

In the next year, the tech company raised a $20 million Series A round led by Bill Gates’ climate investing firm Breakthrough Energy Ventures. In its latest funding, Boston Metal secured $120 million in a round led by steel giant ArcelorMittal. To date, it has raised a total of $220 million to support tech development.

ArcelorMittal’s VP Irina Gorbounova noted the EU Emissions Trading System (ETS) already puts a price on carbon emissions and that they expect other regions to follow. She said that:

“Zero or near-zero carbon emissions steel will become a reality. The only question is how quickly we can make that journey happen. If steel companies don’t decarbonize, they will not stand the test of time.”

Microsoft’s $1 billion investment arm Climate Innovation Fund also took part in the funding round. The fund supports ramping up the development of carbon reduction and removal technologies. The tech giant aims to be carbon negative by 2030 and hit net zero by 2050.

With its Series C funding, Boston Metal seeks to ramp up green steel production at its pilot Woburn, Massachusetts facility. The firm will also use the money in support of building its Brazilian subsidiary where it will manufacture various metals. 

Making Steel Without Carbon Dioxide

In a traditional blast furnace steelmaking process, iron ore is combined with coal that’s baked and converted into coke. This process releases significant CO2 emissions via these ways: 

carbon in coke and limestone creates CO2 as a byproduct
fossil fuels used to heat the blast furnace
coal used to power plants and ovens releases CO2

Approximately 70% of the world’s steel is made that way, which generates 2 tons of CO2 for each ton of steel produced.

Boston Metal will change that with its patented “Molten Oxide Electrolysis” (MOE) process. It takes advantage of clean electricity to transform low-grade iron ore into high-purity molten iron. 

This single-step method eliminates the need for secondary steel processing that emits CO2. So, there’s no CO2 involved but only includes common oxides such as silica, alumina, calcium, and magnesium. These “soup of other oxides” mix with the iron oxide where electricity passes to make iron and oxygen without producing waste. 

But the availability of clean electricity will largely impact how fast the MOE process can be implemented by steelmakers. Otherwise, its purpose of “greening” steel production will be to no avail. 

There are other alternative processes present to make green steel. 

One is the green pig iron production processed using low emission technologies and inputs. It uses renewable input of biomass called biochar. Like MOE, it also eliminates the need for secondary processing like sintering and coking. 

Another steelmaker is greening production by replacing coal with green hydrogen. This process will reduce CO2 emissions by over 90% compared to traditional steelmaking.

The Boston Metal’s CEO remarked:

“We believe in the future, we will have abundant and reliable and green and cheap electricity in order to use this process and manufacture green steel.”

Boston Metal will not be a steel manufacturer itself but will license its green technology to steel companies. Its MOE process has the potential to help steelmakers and the industry reach net zero emissions. 

The company will start building its demonstration steel plant in 2024 and a commercial facility in 2026.

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Wildfires Cost Over $148B and 30% of Emissions

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A new report by Dryad Networks unveiled the hidden costs and impacts of wildfires, its carbon emissions, and how early detection can prevent huge economic losses and save lives. 

Wildfires endanger people’s health and nature, affecting 6.2 million people and causing decades’ worth of damage to biodiversity. They also cost the global economy hundreds of billions of dollars each year. 

More remarkably, the report estimates that wildfires can be a major source of global carbon emissions (30%) by the end of the century. 

Carsten Brinkschulte, CEO of Dryad Networks commented: 

“It is clear from the report findings that the world needs to wake up to the full impact of wildfires and it is time for governments to shift the focus of investment onto detection and prevention – not just suppression.

The Underestimated Impacts of Wildfires

Within just one decade, 8 of the worst wildfires on record have happened. And they’ve become even more widespread, burning about 2x more tree cover today as they did two decades ago. 

Still, the full impact of wildfires is largely underestimated. 

The new report by ultra-early detection IoT firm Dryad, “What lies beneath – the hidden truth about wildfire” – looks closely at the unseen impacts of wildfires. It focuses on these key areas:

full environmental impact 
human health hazards 
financial costs to governments and 
what could be avoided with early wildfire detection.

Hidden Costs: Emissions & Biodiversity

Wildfires account for about 6 to 8 billion tons of carbon emissions, according to estimates. That means it contributes 20% to the total global GHG emissions. It equates to how much the transport sector also emits. 

But more alarmingly, wildfires’ impact on climate change can get worse. They can be the source of 30% of emissions by 2100, the report says.

Wildfires also damage biodiversity significantly. 

In fact, the fires killed or displaced around 3 billion animals in Australia in 2020 alone. While in Europe, wildfires destroyed ⅔ of the Plaine des Maures Nature Reserve during the Gonfaron Fire in France last 2021. 

Unfortunately, it takes decades for fauna and flora to recover from the damages of wildfire.

At the UN COP15 biodiversity conference last year, nations agreed to protect nature and biodiversity hotspots 30% of land by 2030. 

Impacts on Health and Economy

According to the World Health Organization (WHO), “wildfires and volcanic activities affected 6.2 million people between 1998-2017”. This resulted in 2,400 attributable deaths worldwide from suffocation, injuries and burns. 

WHO also says that, since that period, the “size and frequency of wildfires are growing due to climate change”. That means hotter and drier conditions are further increasing the risk of spreading wildfires.

On top of environmental and health damages, the financial impact of wildfires is also very high, worth billions of dollars. 

For instance, a study by University College London stated in the report showed that California’s 2018 wildfires alone cost the U.S. a whopping $148.5 billion. Capital losses and health costs within the state amounted to $59.9 billion. 

The report noted that employing traditional wildfire detection methods fail to reduce the risks of the disaster. Detecting fires through human sight may take up to 6 hours or more. 

Within those hours, a wildfire may have already spread and cost the state or country billions in firefighting. In the U.S., for example, the cost of fighting wildfires is around $3.7 billion in 2022. 

Companies that use carbon credits from forests created a buffer pool in case of wildfires. But the buffer pool is far from being enough to cover the losses. 10-20% of the total credits from forests fill the buffer pool.

California, in particular, has a huge forest carbon offset program that credits carbon stored in forests. These carbon credits are sold for those who seek to offset their emissions. As well, a study suggested that California’s buffer pool also severely lacks capital to keep up with the increasing wildfire events.

Interestingly, insurance giant Swiss Re pointed out how the cost of global insured claims due to wildfires has risen to around $10 billion per year. The insurance giant also projected that figure to go up, from 6% in 2020 to over 13% by 2030 as seen in the chart.

Dryad Early Wildfire Detection Tech

For Dryad’s CEO Carsten: 

“There should be no hidden costs for wildfires. All countries must work together to share data communicating the full impacts of wildfires to ensure the extent of damage caused is fully understood. This will unlock the critical level of investment and attention needed on detection and prevention to address the issue of wildfire once and for all.”

In this regard, the Iot company created an effective technology that can detect a wildfire very early – within the first 60 minutes. That’s before the open fire has even developed. 

Dryad’s early fire detection system “Silvanet” is pending patent. It uses low-cost solar-powered sensors and IoT mesh gateways. It also offers cloud-based big data platform for analytics, monitoring and alerting.

The tech can be placed even in the most remote locations but still transmit the first signs of fire to firefighters. It can detect the exact location of the fire, which substantially enhances response times.

In terms of cost, Dryad’s detection tech can be less than $50. It can help get rid of almost all the impacts of wildfire if deployed on a commercial scale.

Take for example the case of Camp Fire in California in 2018. The company estimates that if early detection happens, their technology could have saved 5.5 million hectares of land, 2,500 homes and 26 lives from harm. Not to mention the expensive firefighting cost of $150 million or more. 

Only with an early detection system in place, billions of tonnes of emissions, billions of dollars of financial losses, millions of hectares burnt, millions of animals, and thousands of lives could have been spared from wildfires. Billions of carbon credits could also be created.

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Tesla Carbon Credit Sales Reach Record $1.78 Billion in 2022

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Tesla’s carbon credit sales are making headlines again as it reached a new record in 2022. The company reported that Q4 carbon credit sales jumped 47% year over year.

Tesla has been generating revenue from the sale of carbon credits for at least 8 consecutive quarters.

These credits, also known as carbon offset credits or carbon allowances, are a way for companies to offset their carbon emissions by investing in renewable energy and other carbon reduction projects. 

Tesla has been selling carbon credits to other automakers. In 2019, the company made headlines when it reportedly earned $357 million from the sale of carbon credits to other car companies that did not meet emissions standards set by the California Air Resources Board (CARB).

This allowed these companies to comply with regulations without having to make significant changes to their own operations.

Tesla has seized the net zero market through many revenue streams including vehicles, solar installations and carbon credits. But the rise of Tesla’s carbon credits sales over the years has proven a steady contribution to revenues and profits.

Rising High: Annual Tesla Carbon Credit Sales

In 2018 Tesla sold $419 million in carbon credits. The big move came in 2020 with $1.58 billion in revenues from the sale of credits. Tesla then stunned the carbon markets with its landmark $679 million credit sales in Q1 of 2022. 

This represents a significant portion of Tesla’s overall revenue and highlights the value of the company’s clean energy operations. Tesla’s carbon credits are generated through its clean energy business.

The company operates a solar panel installation business and also sells energy storage systems. These operations generate carbon offset credits through the reduction of greenhouse gas emissions (GHG’s).

Not Just Carbon Credits, Tesla is a Net Zero Leader 

Tesla has been a leader in the electric vehicle market since its founding in 2003. The company’s mission is to accelerate the world’s transition to sustainable energy.

In addition to producing electric vehicles, Tesla also operates a solar panel installation business and sells energy storage systems. These operations generate carbon offset credits through the reduction of greenhouse gas emissions. These credits can be sold to other firms, such as automakers, that struggle to meet emissions standards set by regulatory bodies like CARB. 

Tesla has sold carbon credits to a number of car manufacturers, including Chrysler, as a way for them to comply with the standards. It’s reported that Chrysler bought US$2.4 billion worth of Tesla’s Carbon Credits, accounting for the majority of the company’s sales in years past. It’s unclear who the major buyers were in 2022.

Credits Help Offset Scope 1, 2 and 3 Emissions

Reducing greenhouse gas emissions requires addressing both energy generation and consumption. This is what the transportation and energy sectors have been prioritizing to directly reduce their emissions.

Companies like Audi, Porsche and Daimler-Chrysler are accelerating their net zero and electrification plans. Audi, for example, aims to have 30 electric vehicle models by 2025 and aims to have 40% volume share of the EV market by the same year.

Tesla designs and manufactures a complete energy and transportation ecosystem, focusing on affordability through research and development, software development and advanced manufacturing capabilities. 

Tesla itself has an emissions footprint that it addresses. Here’s how Tesla’s own Scope 1, 2 and 3 emissions looked from their 2021 Climate Impact Report:

You can read about Tesla’s net zero commitments in their 2021 climate impact report.

Tesla’s Role in the Carbon Credit Market

The carbon credit market is a way for companies to offset their carbon emissions by investing in renewable energy and other carbon reduction projects.

Companies that exceed emissions standards set by regulatory bodies can purchase carbon credits from companies like Tesla that are generating carbon offset credits through the reduction of greenhouse gas emissions. By doing so, they can comply with regulations without having to make significant changes to their own operations.

The sale of carbon credits has been a significant source of revenue for Tesla and highlights the value of the company’s clean energy operations. As the world continues to focus on reducing carbon emissions and fighting climate change, the market for carbon credits is likely to grow. 

Tesla’s leadership in the electric vehicle market and its commitment to sustainable energy position the company well to continue to generate revenue from the sale of carbon credits in the future.

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Clean Energy Transition Investment Hits New Record – $1.1 Trillion

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Global low-carbon or clean energy transition investment jumped 31% in 2022 with a total of $1.1 trillion, drawing level with capital for fossil fuels, according to BloombergNEF report. 

Both figures broke new records in global investment in the clean energy transition. These “firsts” are driven by the energy crisis that hit the world last year as well as policy actions that enable the deployment of clean energy technologies much faster.

The research firm accounts each year how much money companies, financial firms, governments, and individuals invest in low-carbon energy transition. BNEF reports the results in its Energy Transition Investment Trends.

Setting New Record: Investment by Sector 

There are 8 sectors covered in the report including:

Renewable energy
Energy storage
Electrified transport
Electrified heat
Carbon capture and storage (CCS)
Hydrogen 
Nuclear power
Sustainable materials

Out of those eight, only investment in the nuclear power sector didn’t set a new record as it stays almost flat. While the rest reached a new record investment level. 

The sector that got the highest investment share is renewable energy – wind, solar, biofuels, and others. It set a record of $495 billion committed in 2022, up 17% from 2021. 

Remarkably, the electrified transport sector (investment in electric vehicles) is almost at par with renewables. The sector received a 54% increase from prior year – $466 billion.

The least achiever is the hydrogen sector, getting only $1.1 billion which represents 0.1% of the total investment. Yet, given the growing interest and strong policy support in the sector, hydrogen is the fastest-growing. It attracted an investment of more than 3x in 2022.

In fact, government subsidy programs this year will help ensure that the global green hydrogen industry will turn into a large-scale renewable power source.

In the U.S., the Inflation Reduction Act offers tax credits to clean hydrogen producers. The second largest emitter has an $8-billion program that will fund regional clean hydrogen hubs in the country.

Other similar programs also exist in the EU, UK, Germany, Canada, India, and China. Their common goal is to promote clean hydrogen industry.

When it comes to clean energy investment share by country, China takes the lead. The largest emitter got almost half of the global total investment in low-carbon energy transition, bagging $546 billion. 

The U.S. took the second slot with $141 billion while Germany secured the 3rd place, again. France took over the UK’s previous 4th slot as the latter fell down to 5th place. 

Closing the Investment Gap: Clean Energy vs. Fossil Fuels

BNEF also reported estimates on global investment in fossil fuels. The figures include every aspect, from top to bottom, of fossil power generation. 

For the first time, the total estimated amount poured into fossil fuels exactly matches that of the clean energy transition – $1.1 trillion. 

Last year, large banks favored fossil fuel financing over decarbonization goals. Three of them have invested a total of $789 billion into fossil fuels from 2016 to 2021, and $199 billion was for 2021 alone.

The new report stirs attention as it seems to turn the tide in global investments. And despite the energy crisis last year, the transition to clean energy appears to catch more eyes. 

According to the Head of Global Analysis at BNEF, Albert Cheung, instead of slowing down, “energy transition investment has surged to a new record as countries and businesses continue to execute on transition plans.” He added that:

“Investment in clean energy technologies is on the brink of overtaking fossil fuel investments, and won’t look back. These investments will drive short-term job creation and help to address medium-term energy security objectives. But much more investment is needed to get on track for net zero in the long term.”

Indeed, under BNEF’s 2050 Net Zero Scenario, the world needs an annual investment on energy transition of $4.55 trillion in this decade. It means the 2022 achievement must triple and more to tackle climate change. 

One notable area that’s part of the $1.1 trillion investment is climate-tech corporate finance. It involves new equity financing raised by climate-tech companies, which is down 29% from 2021.

2022 was not a good year for global equity markets as the report noted. Still, venture capital and private equity funding went up 3%.

Clean Energy Factory Investment

BloombergNEF’s report also shows how much goes to manufacturing facilities for clean energy. The amount went up from $52.6 billion in 2021 to $78.7 billion in 2022. 

As the chart below indicates, facilities for batteries got the biggest share worth $45.4 billion. Solar factories came next with $23.9 billion investment.  

BNEF’s figures only account for successfully commissioned factory projects.

By geography, China remained at the top in manufacturing investments last year – 91%! And that’s despite huge efforts from other nations to attract low-carbon energy investors.

In the US, for instance, there were a series of commitments for new or expanded clean energy factories in the past months. They’re not, however, included in the report.

Looking forward, the research firm said that between 2023 and 2026, clean energy factory investment only needs an annual average of $35 billion to meet the Net Zero Scenario. 

In other words, “manufacturing capacity for clean energy technologies is unlikely to be the major bottleneck to achieving net zero”, said BNEF’s Head of Trade and Supply Chains research. 

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Global Green and DevvStream Partner to Launch Inaugural U.S. Carbon Program to Advance Technological Solutions to Climate Change

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DevvStream Holdings Inc. (“DevvStream” or the “Company”) (NEO:DESG), a leading carbon credit investment firm specializing in technology solutions, and Global Green, the American affiliate of Green Cross International (GCI), a global non-governmental organization founded by President Mikhail Gorbachev in 1993, are pleased to announce the launch of a U.S. Carbon Program (the “Program”).

The Program is designed to introduce advanced emissions-reducing technologies to Global Green’s extensive network of local and federal government organizations, Fortune 100 companies, academic institutions, and private foundations, while providing funding for sustainability initiatives, programs and projects through the use of carbon offset credits.

Carbon market investments have become a vital component of forward-thinking climate plans for both the public and private sector.

The global voluntary carbon market was valued at ~US $2B, in 2021 and is expected to grow 50x by 2030, while the compliance market grew from $305B in 2020 to $806B in 2021.

Carbon credits created via nature-based solutions (e.g., tree planting, agricultural projects, forestry protection) can only provide up to 20% of carbon emission reductions necessary to meet the world’s goals, while the other 80% will need to come from technology-based solutions (e.g., carbon removal, artificial carbon sequestration, and the replacement of current inefficient technologies).

As such, the Program relies exclusively on the generation of technology-based carbon credits, leveraging DevvStream’s expertise in compliance and voluntary markets, its advanced blockchain-based digital asset platform, and its curated ecosystem of technology partners.

Sunny Trinh, CEO of DevvStream stated:

“Federal and local governments, organizations in the private sector, and educational institutions can now leverage the financial power of global carbon markets as they work with Global Green to achieve their broader sustainability goals,”

“Our partnership with Global Green broadens our reach, while providing our affiliate network with new deployment opportunities for their world-changing technologies.”

CEO of Global Green, William Bridge stated:

“As the CEO of Global Green and the hopes for a brighter and greener future, I am thrilled to announce our partnership with DevvStream—a leading carbon credit investment firm specializing in technology solutions,”

“With the climate crisis at its breaking point and the need for a crucial and profound impact to change the direction in which it’s heading, partnering with DevvStream, who provides upfront capital for organizations such as ours in exchange for carbon credit rights, this couldn’t be more exciting. As a non-profit organization approaching our 30-year anniversary, Global Green are honored to be partnering with a groundbreaking organization like DevvStream, and we look forward to our future collaboration.”

Global Green is the American affiliate of Green Cross International (GCI), an international non- governmental organization founded by President Gorbachev in 1993 to foster a global value shift toward a sustainable and secure future. Green Cross International operates in over 30 countries and enjoys consultative status with the United Nations Economic and Social Council, and United Nations Educational, Scientific and Cultural Organization. GCI is an NGO, holding observer status with the United Nations Framework Convention on Climate Change and the Conference of the Parties to the UN Convention to Combat Desertification. It also cooperates directly with the UNEP/OCHA Environmental Emergencies Section, UN-HABITAT and other international organizations.

For nearly 30 years, Global Green has served as a recognized national leader in advancing smart solutions to climate change that improve lives and protect the planet. Programmatically, Global Green works to create green cities, neighborhoods, affordable housing, and schools to protect environmental health, improve livability, create sustainable communities, and support the planet’s natural systems. In service of its mission, Global Green has partnered with over 50 organizations including local and federal governments, Fortune 100 companies, academic institutions, international groups and private foundations. The Program will be an integral component of Global Green’s suite of offerings to its partners.

About Global Green

Global Green is the American affiliate of Green Cross International (GCI), an international non- governmental organization founded by President Gorbachev in 1993.

For nearly 30 years, Global Green has served as a recognized national leader in advancing smart solutions to climate change that improve lives and protect the planet, with the mission to foster a global value shift toward a sustainable and secure future.

Programmatically, Global Green works to create green cities, neighborhoods, affordable housing, and schools to protect environmental health, improve livability, create sustainable communities, and support the planet’s natural systems.

In service of its mission, Global Green has partnered with over 50 organizations including local and federal governments, Fortune 100 companies, academic institutions, international groups and private foundations.

About DevvStream

DevvStream is a technology-based ESG company that advances the development and monetization of environmental assets, with an initial focus on carbon markets.

We work with governments and corporations worldwide to achieve their sustainability goals through the implementation of curated green technology projects that generate renewable energy, improve energy efficiencies, eliminate or reduce emissions, and sequester carbon directly from the air—creating carbon credits in the process.

This enables us to provide non-dilutive capital directly to our clients while empowering them with field-proven, technology-based solutions to improve their climate impact quickly and simply.

To address common issues such as greenwashing and double-counting, all environmental assets created through our projects are managed via a proprietary blockchain-based ESG software platform, designed explicitly to ensure transparency and auditability, with full data provenance, which significantly increases asset value.

DevvStream’s business model includes mutual collaboration and partnership with Devvio, a leading ESG-focused blockchain company, and United Cities North America, an affiliate of the United Nations with a focus on building sustainable and net-zero smart cities and communities.

Click here to Get DevvStream’s Latest Investor Deck

 

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Do Deforestation Projects Really Reduce Carbon?

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An investigation claimed that over 90% of its forest carbon credits likely don’t represent real emission reductions, but Verra said that this is incorrect because the studies miscalculate the impact of its REDD+ projects. 

Verra is the world’s leading carbon standard for carbon credits that support global climate action. To date, it has issued over 1 billion carbon credits since 2009.

The credits enabled billions of dollars invested into urgent climate action, sustainable development, and the protection and restoration of ecosystems, Verra stated. 

Findings on Verra’s REDD+ Projects

An analysis of some forest projects, also called REDD+, that Verra verifies says that the carbon credits those projects generate are “largely worthless” and are “phantom credits”.

The 9-month investigation was done by the Guardian, the German weekly Die Zeit, and SourceMaterial, a non-profit investigative journalism organization. 

Their findings are based on an analysis of scientific studies of Verra’s rainforest schemes. These studies used satellite images to check the results of the REDD+ projects under investigation.

REDD+ means “reducing emissions from deforestation and forest degradation, plus the conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries”.

Example of a Verra REDD+ Project

Guardian graphic. Source: High-Resolution Global Maps of 21st-Century Forest Cover Change by Hansen et al. 2013. Referenced area sourced from project documents

A team of journalists that performed the investigation concluded these key findings:

No climate benefit:

According to two studies, only a handful of Verra’s rainforest projects showed evidence of deforestation reductions. Further analysis also shows that 94% of the carbon credits bring no benefit to the climate. 

Overstatement of forest threats:

A study by the University of Cambridge in 2022 revealed that the threat to forests was overstated by about 400% on average for Verra REDD+ projects. 

Carbon credits buyers:

Big corporations are the major buyers of carbon offset credits approved by Verra for climate and environmental benefits. They include Shell, BHP, EasyJet, Pearl Jam, Salesforce, Gucci, and Disney among many others.

Human rights issues:

At least one of the projects involves a serious concern with human rights issues. Residents in a project site (in Peru) said that they were forced to leave their homes that were cut down by park authorities. 

The studies that journalists based their analysis on used different methods and time periods. They also looked at various ranges of Verra REDD+ projects.

The researchers noted that their studies have limitations and that no modelling approach is ever perfect. Still, the data spoke of broad agreement on the lack of effectiveness of the projects compared with the Verra-approved predictions, the analysts said. 

Verra strongly disputed the findings, saying the methods the studies use cannot capture the projects’ real impact on the ground. This is where the difference in calculating the carbon credits Verra approves and the reductions the scientists estimate lies. 

Verra’s Response: Incorrect Conclusions

Verra worked closely with the publication to explain why their findings are not true. The carbon standard responded that it is:

“…disappointed to see the publication of an article in the Guardian, developed with Die Zeit and SourceMaterial, incorrectly claiming that REDD+ projects are consistently and substantively over-issuing carbon credits.”

Verra further said that the claims in the article are based on studies using “synthetic controls” that don’t account for project-specific factors that cause deforestation. Thus, they greatly miscalculated the impact of Verra’s REDD+ projects.

The carbon credits verifier develops and improves its methodologies through rigorous consultations with academics and experts.

This is to make sure that project baselines used to calculate carbon credits are robust. Only then that they can serve as a credible benchmark against which to assess the impact of the projects.

Verra certifies projects that avoid, reduce, or remove emissions measured in tonnes of CO2 or its equivalent (CO2e). 

The Claims are Not True – Verra

Verra welcomes scrutiny of methodologies and contributions from other experts through public consultations. 

Though the studies provide data that contribute to the broader work on optimizing methodologies for rainforest projects, they have limited utility for assessing the impact of REDD+ projects, Verra stated. That’s because, again, they don’t take into account site-specific drivers of deforestation. 

In particular, the studies have incorrect findings as they rely on synthetic controls that don’t accurately represent the pre-project conditions in the area. The authors themselves acknowledge this.

Synthetic controls compare a project to a control scenario based on a set of variables that impact deforestation. On the other hand, Verra’s approach for REDD+ projects compares them to real areas. 

The verifier is also using synthetic controls for certain project types, i.e. Improved Forest Management in North America. But this approach is not suitable for REDD+ projects due to the difficulty in finding points that match inside and outside the project area.

Verra also noted that their REDD+ projects are not randomly located. There are local factors at play to know that a specific area is at acute risk of deforestation. And that’s crucial in deciding which project area to select. 

Verra REDD+ methodologies are designed to address the variability between the project area and surrounding areas, whereas the synthetic controls used in studies do not effectively do this.

Therefore, the studies calculated emission reductions different from the number of carbon credits that Verra issued to the projects.

The post Do Deforestation Projects Really Reduce Carbon? appeared first on Carbon Credits.

From Plants to Plastics and Carbon Credits

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Plastic pollution has become one of the most pressing environmental concerns but scientists discovered a new alternative – PET-like recyclable plastics made from plants.

A lot of studies are shedding light on the impact of plastics on human health and marine ecosystems. But discussions around plastics’ impact on climate change have been scarce so far. 

The recent COP27 high level event changes that, bringing more awareness to plastic pollution and its contribution to global warming.

A 2050 net zero emissions scenario requires plastic alternatives that are biodegradable, affordable, scalable, and have lower energy use and carbon footprint. 

Researchers have created a plastic from biomass with PET-like properties and meets the criteria as an eco-friendly alternative to the existing plastics. 

Plastics and Their Carbon Footprint

Plastics are made from fossil fuel and produce greenhouse gases throughout their lifecycle. They are also projected to represent 20% of oil consumption and 15% of the global annual carbon budget by 2050. 

Single-use plastics, in particular, have a high carbon footprint and loss of energy resources as they’re discarded after only a short, one-time use.

Unfortunately, only 9% of plastic has ever been recycled. And according to the International Union for Conservation of Nature (IUCN), at least 14 million tons of plastic go to the ocean every year. Without action, plastic in the oceans could triple by 2040.

Thus, new materials made from other sources than oil are emerging to address emissions across segments in the plastics industry. Bioplastics or biopolymers are from natural, biological sources. Both alternatives are meeting the demand for plastic substitutes.

But one critical factor that’s often overlooked when it comes to plastic alternatives is their carbon footprint. And so, scientists and companies around the world are finding ways how to address this. 

Carbon capture and utilization (CCU) companies are developing technologies to make plastics from carbon emissions.

For instance, the US-based company LanzaTech is using microbes to convert captured carbon into polymer precursors like ethanol. This is part of their ESG strategy to make business operations become sustainable.

Meanwhile, some scientists are working on degradable or recyclable polymers made from non-edible plant material called “lignocellulosic biomass”. However, the research surrounding this natural plastic source is complex. 

Plastics Made From Plants

But teams of scientists from Switzerland and Austria, led by Jeremy Luterbacher at Federal Institute of Technology Lausanne or EPFL and the University of Natural Resources and Life Sciences in Vienna believe they offer an ideal solution.

They have created a new PET-like recyclable plastics that can be easily made from the non-edible parts of plants. This plastic alternative offers a promising tough and heat-resistant plastic ideal for food packaging. 

Here’s a quick overview about this new discovery.

Jeremy Luterbacher noted:

“We essentially just ‘cook’ wood or other non-edible plant material, such as agricultural wastes, in inexpensive chemicals to produce the plastic precursor in one step… By keeping the sugar structure intact within the molecular structure of the plastic, the chemistry is much simpler than current alternatives.”

Such a technique is after Luterbacher’s and his colleagues’ discovery in a previous study in 2016. The team discovered that adding an aldehyde, an organic compound, stabilized certain parts of plant material and prevented their destruction.

The scientists use a different aldehyde – glyoxylic acid instead of formaldehyde. This chemical allows the sugar molecules from biomass waste to act as plastic building blocks. 

Using that technique, the team was able to convert about 25% of the weight of plant waste (95% of purified sugar) into plastic. 

The new plastic material can have various uses, the researchers said. It works for packaging, making textiles, and creating electronics and medicinal items. 

In fact, the team has made some of them already as shown in the picture below. E.g. packaging films (H), fibers for clothing and other textiles (E), and filaments for 3D-printing (G, J).  

Luterbacher says that the plastic has very exciting properties, making it great for food packaging. He also added that:

“And what makes the plastic unique is the presence of the intact sugar structure. This makes it incredibly easy to make because you don’t have to modify what nature gives you, and simple to degrade because it can go back to a molecule that is already abundant in nature.”

If businesses opted to use the plastics from plants for packaging or other purposes, they may enjoy a potential revenue stream from carbon credits. They can earn the corresponding credits from the amount of carbon saved from not using fossil fuel. 

The post From Plants to Plastics and Carbon Credits appeared first on Carbon Credits.

JBS “Green Bonds” and GHG Emissions Under Investigation

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Brazilian meat giant JBS is under investigation by a watchdog group that questions the company’s GHG emissions disclosure and the integrity of its “green bonds”.

The world’s biggest meat company, JBS, was founded in 1953 in Western Brazil. It expanded into Argentina, to the U.S. and beyond.

It has made plenty of acquisitions, too, including the beef business of Smithfield Foods, pork business of Cargill, and most of Pilgrim’s Pride chicken production. 

The food-processing firm has sold ~$3 billion worth of green bonds tied to its sustainability goals in 2021. It said that should it fail to achieve its GHG emissions targets, it will pay bondholders a “premium or step up amount”. 

But according to an activist group, Mighty Earth, JBS is already missing out on meeting its climate goals. 

JBS Green Bonds Issue

The group said that the meat giant contributed to or ignored deforestation done by its suppliers, and filed a complaint about it with the Securities and Exchange Commission (SEC). 

Mighty Earth calls for the agency to impose appropriate penalties and injunctions on JBS. the organization’s CEO and founder Glenn Hurowitz remarked:

“We see JBS as one of the three linchpin companies for changing the whole meat industry… It has by far the highest emissions of any company in agriculture.” 

The group noted that JBS methane emissions are far more than the total sum of four large countries – Germany, France, Canada, and New Zealand. And so, they’re taking on the company over whether its “green” bonds deserve to be called as such.

JBS disagrees with the group’s accusations, saying that it will channel $7 billion to sustainability efforts. For instance, it aims to adopt solar power for all of its Swift & Company stores. It also works with European health and nutrition company DSM to cut its cattle methane emissions. 

Moreover, the food giant is also planning to invest another $1 billion over the next decade to slash its emissions intensity by 30%. 

ESG Disclosure: Scope 3 Emissions

Specifically, JBS said the firm seeks to reduce its Scope 3 emissions. This refers to the indirect emissions from sources that an entity doesn’t own or control, e.g., suppliers. 

The company stated in a filing:  

“While we acknowledge the importance of measuring and ultimately reducing scope 3 emissions, a widely-accepted method for measuring scope 3 emissions does not currently exist for our industry.”

Investors are becoming more concerned about the environmental impact of the firms they invest in. Thus, many demand more transparency and disclosure. 

The complaint against JBS comes as the SEC will be revealing its new rules on GHG emissions disclosures. Climate activist groups believe that this will improve transparency in disclosure if businesses report them.  

The SEC had dealt with this concern in some cases. For example, the agency prompted Goldman Sachs Asset Management to pay the penalty amounting to $4 million last November. It’s a charge for misrepresenting its mutual funds and ESG investment accounts. 

Still, the regulator has to deal with how entities measure emissions coming from sources they don’t control. The bulk of JBS’ emissions (90%) comes from its supply chain or Scope 3. 

The company doesn’t argue against corporations’ role to mitigate climate change. In fact, it pledges to reach net zero emissions by 2040. 

In a framework it published for bond investors, JBS acknowledges that climate change “poses significant risks to our business, our producer partners, customers, and consumers.”

JBS GHG Emissions Disclosure

Regardless, Mighty Earth still seeks more disclosure. The group claimed that JBS is not disclosing correctly the total number of animal slaughter it has had since 2017. That figure is a significant part of the firm’s total GHG emissions as a meat processor.  

According to a study, JBS annual GHG emissions jumped 51% more in 2021 with 421 million metric tonnes, up from 280 million in 2016.

That’s a larger footprint than all of Italy and almost as large as that of the UK.

The food company, however, responded that it hasn’t misled its investors. That’s why its green bonds are not tied to Scope 3, only to Scope 1 and 2 emissions. 

JBS spokesperson said the bonds were not for “funding its entire decarbonization process”. Rather, they were “clearly designed and structured” to address the facilities under the firm’s control.

The company also stated that it will eliminate illegal Amazon deforestation from its supply chain by 2025. But it will not completely stop deforestation globally across its supply chains until 2035.

Behind that pledges are a series of investigations into JBS operations. 

In November last year, the meat processor claimed it was a victim of fraud in buying thousands of cattle from illegal farms in the Amazon.

Before that, the firm was the subject of various financing and bribery investigations. And for the past five years, it has paid millions for violating the Foreign Corrupt Practices Act and settling price-fixing cases. 

Mighty Earth thinks that JBS has the freedom in disclosing its GHG emissions, as to what and to whom. 

The group also said that the meat giant is considering getting into capital markets in the U.S. for a public offering. However, without addressing the dispute over its GHG emissions disclosure, it might be hard for JBS to achieve that, says Mighty Earth.

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