UK Considers £300M Climate Bailout of British Steel

The UK government is considering a plan to channel a £300 million ($372 million) climate package to help British Steel reduce its carbon emissions and save it from collapsing. 

Once a giant UK steel manufacturer, British Steel has been hit hard in recent years. Three years ago, the Chinese Jingye Group bought the steelmaker, making it the 3rd owner in four years. 

A final decision has not been made to date and is set to be announced in the coming days.

Saving UK British Steel

The investment deal will help the Chinese-owned steelmaker to become more eco-friendly by transitioning from blast furnaces to electric arc furnaces. The company’s site is in Scunthorpe, northern England.  

The government aid will also help protect jobs at the Chinese-owned steelmaker, employing about 4,000 people directly. 

The Department for Business, Energy, and Industrial Strategy said in a statement:

“The government recognizes the vital role that steel plays within the UK economy, supporting local jobs and economic growth and is committed to securing a sustainable and competitive future for the UK steel sector…”

Negotiations about the deal are ongoing so the business secretary can’t comment yet about it. But the official considers “the success of the steel sector a priority and continues to work closely with industry to achieve this.” 

British Steel has been seeking urgent financial support after it was heavily affected by soaring energy and carbon prices. UK public officials have been urging the Chancellor to come into rescue. 

They’re saying that the fall of the steelmaker will also impact the government. It can lead to alarming decommissioning liabilities and may undermine steel production in the UK. 

The decision comes after the UK steel industry’s struggles were revealed. Another steelmaker, Liberty Steel, decided to cut its production in Britain and stop operations in some sites. All that’s due to the high energy costs threatening lay-offs. 

Add to that the decrease in demand last year over the fear of recession taking on the region. Consumption from major customers such as construction companies and manufacturers also fell. 

And so the need for intervention from the government. 

Shifting Away from Coal to Electric

But there are some strings attached to the British Steel package deal. 

One is to protect jobs at the company. Another condition is that Jingye Group has to invest at least £1 billion in British Steel by the start of the next decade. 

But the general goal is to help the company reduce its carbon emissions by shifting away from coal.

The traditional way of producing steel using coal represents about 70% of the world’s steel production. This produces about 2 tons of carbon for every ton of steel produced

Electric arc furnaces (EAFs) produce the remaining 30% of the steel. EAFs emit lower levels of carbon than blast furnaces as they can run on renewable power. They are best used on recycled steel. 

Report shows the need to act now to bring the steel industry to net zero emissions. And according to the analysis, the biggest factor for the industry to be successful in its climate goals is to switch to EAFs.

Another option is producing steel using green pig iron. It’s iron ore that’s processed using low emission technologies and inputs such as biomass called biochar.

Using biochar for green pig iron eliminates the need for sintering and coking. The technology is also 10% – 15% less cost-intensive than traditional blast furnace systems.

But these alternatives call for about over one trillion investment opportunities in the industry. And the UK steel industry must shift away from coal and embrace low carbon alternatives to stay competitive. 

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Amazon to Start Trading Renewable Energy in India

Amazon received the green light from Indian authorities to start trading renewable energy sources in the country.

After securing a category-III energy trading license, the e-commerce giant is building up a series of wind and solar energy projects in India. A category III license allows the company to trade electricity of up to 4,000 million units annually. 

Amazon has signed a total of 720 MW worth of energy purchasing agreements in India. It has also signed agreements with partners such as Vibrant Energy, ReNew Power Global, Amp Energy India and Brookfield Renewable. Amazon will handle all its energy trading through its new subsidiary, AEI New Energy Trading Pvt. Ltd. 

In September last year, ReNew Power signed a deal with Amazon to supply 210 MW of solar power. The 210 MW solar farm will be located in the northern state of Rajasthan. By operational capacity, ReNew Energy is one of India’s largest renewable energy companies.

The solar farm is one of Amazon’s three solar renewable energy projects in India. The second one is a 100 MW project in partnership with Amp Energy. The third project is a 110 MW project with Brookfield Renewable. 

These three solar farms can produce a total of 1,076,000 megawatt hours (MWh) of clean energy annually. This would be enough to cover the electricity consumption for around 360,000 medium homes in Delhi. 

Additionally, at the end of last year Amazon announced two more utility-scale renewable energy projects. Partnering with Vibrant Energy, Amazon will develop two hybrid solar-wind projects in Karnataka and Madhya Pradesh.

These projects have a total capacity of 300 MW. The company now has a total of five utility-scale renewable energy projects in progress in India. 

India’s Net Zero Goals

In recent years, India has set ambitious net zero goals and ramped up efforts to decarbonize different sectors. In November 2022, India submitted its Long-Term Low Emission Development Strategy to the United Nations Framework Convention on Climate Change (UNFCCC) at COP27. 

India has committed to reaching net zero carbon emissions by 2070 and increase its renewable energy capacity to 500 MW by 2030. In addition to developing renewable energy projects

Amazon’s Renewable Projects Across Asia

As the largest corporate purchaser of renewable energy in the world, Amazon has a strong commitment towards decarbonizing the planet. Besides India, Amazon has also invested in green and renewable energy projects in Indonesia, Japan, Singapore and Australia. 

In the Asia-Pacific region, the company has over 50 renewable energy projects in the works. Amazon’s portfolio of renewable energy projects across Asia have a total capacity of 1.6 GW. 

In 2021, Amazon launched its first renewable energy project in Singapore. It is a 62 MW solar plant that would have the potential to generate 80,000 megawatt hours (MWh) of clean energy annually. This would be enough to cover the electricity consumption of over 10,000 homes in Singapore. 

Last year, Amazon also announced its first renewable energy projects in China. They are a wind and solar farm that have a total energy capacity of 200 MW, and can generate 496,000 MWh annually. This would cover the energy needs of over 250,000 homes in China.

Amazon’s Decarbonization Strategies

Beyond developing renewable energy projects, Amazon Web Services (AWS) has also invested in massive climate-based data collection efforts around the world. AWS set up the Amazon Sustainability Data Initiative (ASDI), providing greater access to large climate-based datasets to help researchers and scientists. 

The company also partnered with Verra to introduce a new carbon credit label called ABAQUS. The new label aims improves on additionality and durability considerations of long-term decarbonizing initiatives.

Verra is a non-profit company that has been a leader in creating and upholding environmental standards, especially with regards to carbon emissions.

This is in the midst of reports that Amazon’s carbon footprint grew in 2021, with a 40% increase since 2019. In 2021, the retailer had emitted a total of 71 million metric tons of carbon emissions.

In 2019, the company founded The Climate Pledge, to lay out its net zero commitments. The goal is to reach net zero by 2040, 10 years ahead of the 2050 goal set by the Paris Agreement. 

The pledge, signed by over 300 businesses, covers three key aspects of decarbonizing:

Eliminating carbon using decarbonizing projects (e.g. renewable energy)
Carbon emissions reporting, with better regularity and accuracy (e.g. via initiatives like ASDI)
Using credible carbon offsets (e.g. ABAQUS)

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Abandoned Oil Wells and Carbon Credits

You’ve probably seen dozens of pictures before that look exactly like the one above.

An active oil field littered with pumpjacks, all churning out oil by the barrels…

But have you ever stopped to think of what happens to these oil wells when the oil is gone? When the oil and gas companies pack up and leave for greener pastures?

If you haven’t… then you’re not alone.

Because as it turns out, most oil companies haven’t, either.

Abandoned oil wells have rapidly become one of the major headline issues in the world’s fight against climate change.

The Original Pump and Dump

When oil wells on land are drilled, holes are bored into the ground that often go miles down. These holes are cased in cement to prevent leakage, all the way down to the bottom of the well where the oil is.

As you can probably imagine, oil wells can be pretty expensive to drill.

However, it’s even more expensive to clean up afterward when they’re no longer profitable.

Here’s the thing: oil wells don’t produce a constant amount of oil. It’s not like a faucet you can turn on and off.

Oil well flow rates vary depending on a number of factors, including how much oil is left in the reservoir.

Generally speaking, an oil well produces the most oil when it’s first drilled.

The Lucas Gusher in Texas. Taken by John Trost in 1901

If you’ve seen any old photos like the one above…

Pictures like these were usually taken when a new oil well had just breached a new oil reservoir under high pressure.

Over time, however, as more and more oil and gas is pumped away, flow rates will continuously decrease.

At some point, there won’t be enough oil coming out anymore to offset the costs of keeping the well running. This is known as a well’s “economic limit”.

Now, this oil well isn’t empty. There’s still plenty of oil and gas left down there. It’s just not coming up fast enough for the oil company to make any money off it. So, at this point the well is usually shut down – or “plugged”.

Quite often, oil companies will do this simply when oil prices are unfavorable, as opposed to only when flow rates have fallen too low. Temporary plugs are placed in these wells so that they can be reactivated at a later date.

However, sometimes these wells are forgotten afterwards. The owners may have gone bankrupt, lost their drilling rights… Or they may simply have walked away from the well, leaving them neglected. Abandoned.

But just because they’ve been abandoned doesn’t mean they’re out of sight, out of mind. Many of these abandoned wells leak, potentially contaminating the surrounding groundwater or soil.

And one of the most concerning things these wells leak is methane – a deadly greenhouse gas that’s the second-largest contributor to climate change, right behind carbon dioxide.

Methane gas is up to 86 times better than CO2 at trapping heat in the atmosphere in the first 20 years after it’s been released. So, targeting methane emissions is an important part of the fight against climate change.

There are over 3 million abandoned oil and gas wells in the U.S. They collectively emit the equivalent amount of putting an extra 1.5 million cars on the road every day.

Reuters estimates that, when taking into account major oil-producing nations with a poor track record like Russia or Saudi Arabia, there may be as many as 29 million oil wells abandoned internationally.

That’s why these abandoned oil wells – also known as orphan wells – have turned into a major problem in the fight against climate change.

One Man’s Trash…

Now you’re probably thinking: why do these oil companies get to just walk away from oil wells like that? Why even do it in the first place?

Well, as it turns out…

Cleaning up an oil well is expensive. Potentially more expensive, in fact, than drilling the well in the first place.

The process of plugging a well begins with dismantling the pumpjack, alongside any other equipment that may still be left on the surface.

Then – and this is the hard part – they have to inspect the casing of the well for leaks and other defects.

A casing is a series of hollow steel pipes surrounded by a cement shell. It supports the well hole and protects against leakage. It keeps the oil that’s being pumped up from getting out and contaminating the surroundings.

So, as you might guess, the casing needs to go all the way down to the bottom of the well.

In the years that a well has been abandoned, the casing will have been deteriorating, as cement will over time. Especially since the impurities found in crude oil are often corrosive.

Any defects in the casing need to be repaired first, to ensure that no more oil or gas leaks out. This is generally accomplished by cleaning out any oil or gas that could cause corrosion, and then pouring more cement.

When the condition of the casing is deemed satisfactory, the well is then filled with water or another non-corrosive liquid. The well casing is then cut, typically one meter below the surface, and then topped with a vented cap.

The cost of plugging an abandoned oil well can run anywhere from $20,000-$40,000 all the way up to $1,000,000. That depends on how deep the well goes and what condition it’s in.

Oil wells for fracking, for instance, are expected to run closer to $300,000 on average to plug. That’s because their long horizontal nature makes them harder to deal with than traditional oil wells. 

The problem is, while oil and gas companies are required by law to set aside a chunk of money for each well they drill to plug it later, this amount of money is based on the cost to plug a traditional oil well. This required amount is as low as $10,000 per well in some areas. But on federal land, caps at a maximum of $150,000 for all wells drilled nationwide.

And for many of these abandoned oil and gas wells, the owners lack enough money to cover the actual costs of plugging each well… or worse, there’s no more owners left to chase down for the money.

Which is why the government’s been stuck with the bill.

… Is Another Man’s Treasure

They’re a major environmental disaster… but at the same time, they’re also an opportunity for some.

In November of 2021, the Biden administration launched a $4.7 billion program to plug abandoned wells as part of the Infrastructure, Investment and Jobs Act.

Through this program, qualifying states can receive federal grant money to find and plug abandoned wells, as well as reclaim the land surrounding them.

Phase one of the program is already under way. $560 million was awarded last August to 24 different states, with more on the way.

In addition to this, since plugging abandoned wells eliminates methane emissions, any abandoned wells not already covered under a government program are a potential source of carbon credits for companies willing to take on the burden of plugging them.

The Biden administration may be willing to take the fight to abandoned oil wells in the U.S., but what about the other 29 million scattered around the world? Some of them are even very close to home, such as right across the border in Alberta, Canada.

There’s a big opportunity here for the right companies in the right places to make a ton of money.

Canadian-based DevvStream (DESG) last year announced an agreement with TS-Nano to plug abandoned wells and generate a stream of carbon credits.

Disclosure: Owners, members, directors and employees of carboncredits.com have/may have stock or option position in any of the companies mentioned: DESG

Carboncredits.com receives compensation for this publication and has a business relationship with any company whose stock(s) is/are mentioned in this article

Additional disclosure: This communication serves the sole purpose of adding value to the research process and is for information only. Please do your own due diligence. Every investment in securities mentioned in publications of carboncredits.com involve risks which could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

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Voluntary Carbon Credits Market Can Be Worth $1 Trillion in 2037

The total value of carbon credits traded in the market to help entities achieve their net zero goals can be worth $1 trillion as early as 2037, according to a recent report by BloombergNEF.

Verified emission reduction credits or carbon credits are traded in the voluntary carbon market (VCM), equivalent to 1 ton of carbon reduced or removed. Under its current structure, the VCM is “not built for success”, BloombergNEF said. But the research provider also noted that:

“More rigorous definitions of quality and greater emphasis on carbon removal could solidify market confidence, lift prices and drive demand.”

The VCM Growth (2021 – 2022)

Investments in VCM projects grew to $10 billion in 2022, up from $7 billion in 2021, a new report has found. Yet the market failed to grow last year as BNEF reported in its Long-Term Carbon Offsets Outlook. 

Firms bought only 155 million carbon credits as offsets, down 4% from 2021. The major reason being is the fear of reputational risk from buying low-quality credits. 

But carbon credits supply jumped by 2%, with a total of 255 million carbon offsets generated globally. Remarkably, the supply of credits from “avoided deforestation” fell by a third from 2021 to 2022

There were accusations of greenwashing in buying carbon credits from nature-based projects that had questionable environmental impact. REDD+ projects, in particular, are still under criticism after analysis claiming they produce “ghost credits”.

In a different market analysis by AlliedOffsets, the lack of growth in the VCM is due to a slowdown in retirements of carbon credits. 2022 has seen slowing growth in retirements after last year’s explosion as seen in the chart below.

Voluntary Carbon Credits Retirement

Source: AlliedOffsets

In particular, retirements of renewable energy and forestry credits declined in two consecutive quarters as shown below. This is the first time that it has happened in VCM history.

 

BNEF VCM Projections Under 3 Scenarios

The Voluntary Credit Market Scenario

The BNEF modeled supply, demand, and prices for carbon offset credits under three different scenarios by 2050. Under each scenario, demand grows at various rates, and so do the prices. 

In the first scenario, entities can buy any type of carbon credits to meet their decarbonization goals. In this case, they’ll need about 5.4 billion credits each year in 2050. There’s oversupply of credits and 8 billion of them will be produced annually, mostly from avoided deforestation. 

As shown in the graph above, carbon prices in the VCM scenario will go up to only $12/ton in 2030 and $35/ton in 2050. The total market value would only be $15 billion each year in 2030. Still, that’s a 650% increase from the $2 billion valuation in 2022.

2. The Removal Scenario

Under this second scenario, carbon credits from projects that actually remove carbon from the air only count. Those from avoided deforestation or clean energy projects are not part of the supply. 

As such, supplies will be short in 2037 as carbon removal technologies, e.g. direct air capture (DAC), are still expensive to scale up. Carbon prices for removals are far way higher than in the VCM scenario at ~ $250/ton. Annual market value will be as high as $1 trillion

But as DAC and other carbon removal tech receive more investments, costs will go down below $100/ton by 2050

Yet, high prices may prompt some firms to put their money in other net zero strategies over carbon offsetting. Or worse, it may force them to neglect their climate goals entirely if carbon removal credits remain too costly for them to offset emissions.

3. The Bifurcation (Two Market Branches) Scenario

The debate on what makes a carbon credit high-quality continues to this day. Stakeholders – investors, companies, and non-profits – believe that defining quality involves a set of criteria. The major ones include additionality, permanence, and co-benefits (benefits apart from reducing emissions).

In effect, the third BNEF’s scenario emerges from this debate – the bifurcation or splitting of the market into two branches. 

In a smaller branch lies the less liquid market for high-quality carbon credits. These include credits from carbon removal technology projects and nature-based solutions in Oceania, Africa, and North America.  

Demand for high-quality carbon credits peaks at 433 million only in 2030 and 1.3 billion in 2050. And buyers will also have a smaller supply compared to other scenarios, at 1.4 billion and 3.2 billion in the same periods. Carbon prices reach $38/ton in 2039 before falling to $32/ton in 2050.

In another branch is the larger market for low-quality credits from energy generation and nature-based solutions in Latin America and Asia. Prices will be at only $12/ton in 2025 and peak at only $22/ton in 2050

Entities relying in this market for offsetting their emissions may have to deal with greater reputational risks. 

Overall, the outcomes of this third market scenario may change depending on what constitutes low- and high-quality offset credits. What will help clarify quality tiers are simplifying and standardizing carbon credit buying.

Standardization in Carbon Credits Market 

Standardization can drive more market liquidity and help stakeholders better decide on their offsetting strategies. Carbon exchanges, technology providers, and private sector initiatives are working hard to achieve this. 

But buyers may become more confused if many groups are addressing the issue separately. 

Kyle Harrison, Head of Sustainability Research at BNEF and the report’s lead author remarked:

“Buyers need transparency, clear definitions around quality and easy access to premium supply, or future years will resemble what we saw in 2022. These changes will send demand signals to the projects making the greatest decarbonization impact and in need of the most investment.”

He further added that standardization is the carbon credit market’s space race. Only by resolving this matter can the carbon market grow by several orders of magnitude.

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DevvStream Files Provisional Patents to Improve Efficiencies in Carbon Credit Generation

DevvStream Holdings Inc. (“DevvStream” or the “Company”) (NEO:DESG), a leading carbon credit investment firm specializing in technology solutions, today announced the filing of provisional patent applications surrounding its innovative programmatic approach to green project management and carbon credit generation.

These initial filings establish concrete definitions for, and stake boundaries around, the Company’s exclusive processes and methodologies.

The provisional patents are primarily focused on the establishment of a proprietary umbrella approach to program implementation across the scope of the Company’s operations.

This umbrella approach will allow the Company to aggregate multiple green technology projects together under a single designated program, resulting in several anticipated efficiency improvements.

Implementation costs are expected to be reduced, current barriers to participation are expected to be eliminated, and the process for generating carbon credits is expected to accelerate.

Sunny Trinh, CEO of DevvStream stated:

“The current rate of greenhouse gas emissions underscores the importance of creating carbon credit programs that are robust and far-reaching, yet nimble and efficiently operated,” 

“By combining relevant green technology projects under the auspices of a common program, we can, for example, plug and seal a greater number of leaky wellbores more quickly under our methane abatement programs, including oil wells that might otherwise fail to qualify due to size or location. We anticipate that our proprietary approach will broaden our client reach, and by extension, broaden our overall environmental impact as a company.”

Click here to Get DevvStream’s Latest Investor Deck

 

Disclosure: Owners, members, directors and employees of carboncredits.com have/may have stock or option position in any of the companies mentioned: DESG

Carboncredits.com receives compensation for this publication and has a business relationship with any company whose stock(s) is/are mentioned in this article

Additional disclosure: This communication serves the sole purpose of adding value to the research process and is for information only. Please do your own due diligence. Every investment in securities mentioned in publications of carboncredits.com involve risks which could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

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Lenovo Unveils 2050 Net Zero Goal, Enters Carbon Credits Deal

Lenovo has revealed its goal to reach net zero greenhouse gas (GHG) emissions by 2050, which the Science Based Targets initiative (SBTi) approves, and entered a carbon credits deal with K+N. 

With this commitment, Lenovo becomes the first PC and smartphone maker with an SBTi-approved net zero target. The tech firm is also one of only 139 companies in the world that has a climate goal validated by the Net Zero Standard

Lenovo’s emissions reduction measurements will contribute to a wider body of data to better understand and tackle climate change.

The SBTi Net Zero Standard

Lenovo Chairman Yuanqing Yang remarked:

“In the fight against climate change, we believe collaboration and accountability are the two critical elements needed for collective success. We remain dedicated to following climate science, standardizing our measurements, and seeking ongoing validation for our targets and progress.” 

Aligning net zero goals to the SBTi helps Lenovo to take a scientific, collaborative, and accountable means to cut emissions. Without doing so will make it hard to know when a net zero target is met. 

SBTi is the first international body to standardize net zero and what it means as it relates to limiting global warming to 1.5°C. This net zero standard is also dynamic and responsive to firms’ collective efforts to decarbonize. 

More importantly, SBTi holds companies accountable for their emissions reduction targets. 

More than 4,000 companies worldwide are in the process of aligning their emissions reduction goals to SBTi’s methodology and validation processes. 

CEO of the SBTi Luiz Amaral noted that the world needs rapid and deep emissions cuts to meet global net zero targets to avoid the most damaging effects of climate change. He further said:

“Lenovo’s net zero targets match the urgency of the climate crisis and set a clear example that their peers must follow.” 

How Lenovo Will Hit Its 2050 Net Zero Goal

Lenovo commits to reaching net zero emissions across its value chain by 2050. Its long-term target is to cut absolute GHG emissions across all three scopes – 1, 2, and 3 – by 90% by 2050 from a 2019 base year

Hitting such an ambitious decarbonization goal requires the tech company to achieve the following reduction goals.

SBTi-Validated Near-Term Targets

Reduce scope 1 and scope 2 GHG emissions by 50% by 2030, compared to 2019 levels
Reduce emissions from the use of sold products by 35% on average for comparable products by 2030
Cut scope 3 emissions from purchased goods and services by 66.5% per million US$ gross profit by 2030
Cut scope 3 emissions from upstream transportation and distribution by 25% per tonne-km of transported product by 2030

The key strategies that Lenovo will adopt to reduce its GHG emissions are:

Slashing the environmental impact of its products
Applying innovation to increase the sustainability of its manufacturing
Reducing emissions across its operations and value chain

These plans are outlined in Lenovo’s Journey to Net-Zero video series. It shows how the company’s experts are modifying business processes to hit net zero targets. 

In addition to those emission reduction strategies, Lenovo is also working with other firms to further cut its carbon footprint. Its recent carbon credits collaboration with Kuehne+Nagel (K+N) perfectly shows this. 

Lenovo and K+N Carbon Credits Deal

Lenovo works with Kuehne+Nagel to develop a green logistics service that allows its customers to buy carbon credits that fund the use of Sustainable Aviation Fuel (SAF).

SAF is a fuel from sustainable inputs that reduces carbon emissions.

Via a purchase add-on service, customers can buy credits to cut the footprint of shipping the IT equipment and devices they purchase. They can then use those credits to fund the use of SAF that K+N provides.

There’s a specific amount of liters of SAF assigned to a purchased device. That figure equals the amount of reduction that the customer can claim under Scope 3.1. – emissions for purchased goods and services. 

If this service is chosen, Kuehne+Nagel will issue the carbon credit or certificate to Lenovo and its customers. This certificate indicates the amount of SAF liters per purchased device for any logistics company.

Through K+N’s SAF concept, Lenovo finds a way to address carbon emissions across supply chains, which is in line with its SBTi targets. This further allows Lenovo customers to avoid emissions in product shipment regardless of the lane or airline. 

This forged carbon credit deal with K+N enables Lenovo to pursue its net zero commitment – by “delivering sustainable products and solutions”, the head of global logistics at Lenovo, Gareth Davies said.

Lenovo is an early adopter of the science-based emissions reduction approach. It has received SBTi approval for its near-term 2030 goals in 2020. This has allowed the firm to road-test the first-of-its-kind Net Zero Standard. 

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DESG.NE

DESG.NE Stock Predictions, Articles, and News

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Temasek Funds Biotech Firm Living Carbon for GMO Super Trees

Temasek, Singapore’s sovereign wealth fund, along with Toyota, led the $21 million Series A funding round for climate biotech company Living Carbon that seeks to improve the ability of trees to absorb carbon.

Living Carbon is a public benefit company aiming to balance the earth’s carbon cycle using plants, particularly photosynthesis-enhanced trees. It engineers super trees that grow much faster and sequesters more CO2 than regular trees.

Founded in 2019, the climate tech company said its first product, a hybrid poplar tree, can capture up to 27% more carbon. Maddie Hall, CEO and Co-Founder of Living Carbon said: 

“We’re excited to close our Series A and continue to make progress on large scale carbon removal using plant biotechnology…Photosynthesis enhancement increases biomass rather than yield so is better suited to carbon markets, where success is measured by how much carbon is locked away…”

Living Carbon $21M Series A Round

The San Francisco-based firm has raised $21M in a Series A funding round led by Temasek and backed by largest automaker Toyota. The round also has participation from Lowercarbon Capital, Felicis Ventures, and other strategic angels. This makes the total funding raised to $36 million

The biotech firm said it will use the money to grow its team and expand its work on bio-engineered climate solutions. It will also spend the funds to produce up to 5 million super trees saplings and fund research of new products. And that’s despite criticism over possible unintended consequences of genetically tweaking trees.

Non-profit campaigners like “The Campaign to Stop Genetically Modified Trees” oppose the idea. They said in a report that doing so may have an impact with “unpredictable, uncontrollable and irreversible nature”. Tree pollen and seeds cannot be contained.

But earlier this year, Living Carbon released a paper showing the huge potential of biotechnology in helping stabilize the climate. 

Living Carbon Biotech: Photosynthesis Enhancement 

The carbon sucking abilities of trees are critical to the world’s efforts to limit global warming. But the rate of deforestation continues to increase, hitting record high in the Amazon last year.

There are many ways to enhance carbon capture in plants. These include increasing resistance to disease and drought, salt tolerance, decomposition resistance, and photosynthesis enhancement.

While most efforts focus on protecting forests or regrowing them, Living Carbon is tweaking the genetic code of trees so that they grow quicker while locking away more CO2. 

Photosynthesis-Enhanced Sapling

Left: hybrid poplar seedling with photosynthesis enhancement trait. Right: control hybrid poplar seedling. Source: Living Carbon

As shown in the image above, a photosynthesis-enhanced seedling (left) is taller than its controlled counterpart (right). 

The firm’s initial focus is two-fold:

Improve carbon capture in trees via more efficient photosynthesis
Improve carbon storage through decay-resistant wood, slowing the release of carbon through decomposition

Boosting Carbon Capture in Engineered Super Trees

The biotech firm’s research shows that enhancing photosynthesis can boost biomass accumulation in trees by 53% more than control plants. 

Biomass accumulation is a strong indicator of carbon assimilation, with about half of biomass being stored carbon. 

As shown below, event A (hybrid poplar in green bar) has significantly higher biomass production in all plant tissue types, at both fresh weight and dry weight levels. 

Biomass Production in Hybrid Poplar Vs. Controlled Plants

The study also revealed, in a world first, the potential to capture about 27% more carbon.

More biomass and faster growth means more carbon capture.

Living Carbon’s biotechnology is an example of how engineering can work together with nature’s ability to capture and store carbon. The company’s use of biotech in trees shows how this can be a scalable and viable solution to the climate crisis.

The biotech firm’s photosynthesis-enhanced trees offer opportunities for nature-based carbon removal. By planting these trees and locking away more carbon, landowners can generate carbon credits that they can sell to entities seeking to offset their CO2 footprint.

Lisa Coca, Climate Fund Partner at Toyota Ventures, commented: 

“The voluntary carbon credit market is on track to exceed $50 billion by 2030… Living Carbon’s synthetic biology platform has the potential to fill the gap between supply and demand by leveraging the powerful combination of proven nature-based solutions as a carbon sink and genetic engineering to deliver high-quality carbon credits to the market.”

Living Carbon is ramping up production of its biotech hybrid trees. It’s on track to produce 4-5 million seedlings throughout the U.S. in 2023-2024. The seedlings will be available for companies to buy to reduce their emissions.

The firm is partnering with landowners to develop carbon projects in Pennsylvania and Georgia. With a focus on the U.S. market first, they aim to double annual acreage. 

Living Carbon will plant 60,000 seedlings in February and has sold out the carbon credits for them for 2023. But they’re also doing pre-sales for the next two years. 

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DevvStream (DESG) Goes Public

Don’t be misled by the low carbon prices on our dashboard over the last few months…

Carbon has drawn a LOT of capital over the last 18 months.

Recently one of the largest carbon exchangesXpansiv – announced a major investment from Blackstone Group. To the tune of $400 million. They also raised an additional $125M with participation from Bank of America and Goldman Sachs.

What Xpansiv does is closely watched by a tight-knit industry group. Because the majority of voluntary carbon market credits go through their platform.

They see what’s moving, how and at what price. 

Which is why a lot of companies want to team up with them and get on their rolodex, fast.

So, when the Executive Chairman of Xpansiv (still a private company) becomes a shareholder and Director of a small, private carbon company…

You want to pay attention!

DevvStream (DESG:NEO) is NOW LIVE

DevvStream (DESG: NEO) is one of the best ways to capitalize on two of the hottest sectors of the moment…

Blockchain Technology and Carbon.

If these sound like two completely different things, don’t worry. 

One’s a global market estimated to be worth $5.92 billion already…
And the other is already over $820B in 2021 and forecasted to be worth $1.9 trillion by 2040.

Combine them and you have something that could be very interesting.

People are taking notice of the carbon markets, including big-time investors like Google, HSBC and Meta.

The company we’re talking about, DevvStream, runs on a solid business model that has delivered 10x returns in other sectors, such as precious metals mining…

DevvStream (DESG:NEO) has an incredible business model that follows in the footsteps of the early days of many successful precious metal royalty and streaming companies. 

These companies grew to an 8, 9, and 10-figure market cap over the years.

We have been following the story for over a year now, and when we met with the company in early January and couldn’t believe the progress they had made since our last update. 

The company achieved revenue in the 3rd quarter of 2022
They have 9 signed LOIs & Termsheets and 3 contracts already with 4 more in the works.
It intends to retain 90-100% of the carbon credits generated by DevvStream investments. 
Target paybacks of 2 years for each investment project with a 10+ year stream

The IRR numbers they’ve published are truly eye-popping for some of their projects. Take a look at their near-term pipeline…

DevvStream Tech-Based Projects

DESG is not your typical nature play or decarbonization stock.

They’re attracting partners in the massive technology and energy sectors.

Project Profile: LED Retrofit

DevvStream has an opportunity to replace old and inefficient 100W light bulbs with 7W LED bulbs in Sub-Sahara Africa.

It costs $900,000 for 100k bulbs, and they’re eyeing a project term of 10 years. All told this could deliver 30,000 carbon credits yearly for Devvstream, per container. With multiple countries in Africa wanting to participate, there is a big demand for these LED bulbs.

At the prices the company believes it can sell, they forecast an IR of 60-90% on this deal.

Project Profile: Plugging Abandoned and Orphaned Oil Wells in North America

It’s no secret that environmentalists hate oil wells. And legions of groups spend big money to stop them.

So DevvStream is going to help oil companies and environmentalists at the same time, by plugging abandoned oil wells.

There is an opportunity to eliminate methane leakage from abandoned oil wells. Methane, if you don’t know, is terrible for emissions.

Some estimates have it as 32x more potent at trapping heat than CO2 when it comes to gas in the atmosphere. This means that every ton of avoided methane can generate 32 carbon credits.

So, how many oil wells are in this shape, you ask? 

There are about 4 million abandoned and orphaned oil wells in the USA alone. And a further 370,000 in Canada.

But get this, 96% of leakage comes from about 10% of the wells. The top 10% could generate 2,000 credits per year or more.

DevvStream has invested US$1.25M into a company with an advanced and patented nanopolymer sealant that is 10x more effective at plugging wells than current solutions. This investment gives DevvStream worldwide exclusivity and pays for the first 24 wells.

And this is no science project, three pilot wells have already been successfully plugged with this new technology. The company is also in talks with an oil and gas company to get access to approximately 800 abandoned oil wells.

All told, this project could bring in 125,000 carbon credits per year just from the first initial set of wells. And the first credits could come in 2023.

But Wait, There’s More…

This is only 2 of the main projects DevvStream has running.

One of their emissions reduction projects involves improving road construction technologies and methods. Sounds archaic. 

But guess what, road construction and maintenance is something that every city needs, and DevvStream is already talking to several cities.

As a result, DevvStream estimates the credits generated to be up to 5 million carbon credits every year… for 20 years.

And this is an inherent advantage of most of DevvStream’s technology-based projects. Once proven, they can be replicated over and over again.

DevvStream’s pipeline of projects is spread around the globe, reducing geopolitical risk and regulations from any 1 area. Much like a standard investment portfolio in different sectors.

This is a high-risk, high-reward, high-margin business model ready to leverage and scale with the incredible growth trajectory of the voluntary and compliance carbon market.

DevvStream is now publicly trading – and we imagine things will start happening quickly in 2023. 

We’re following the story, and we’ll bring you all the important developments.

Click here to Get their Investor Deck

 

Disclosure: Owners, members, directors and employees of carboncredits.com have/may have stock or option position in any of the companies mentioned: DESG

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