Lithium-Ion Wars: US Battery Imports Soar by 66%, Setting New Record as Domestic Production Ramps Up

According to S&P Global, in the first quarter of 2023, US imports of lithium-ion batteries surged by nearly 66% from the previous year, reaching a staggering 235,386 metric tons.

The first quarter of 2023 marked the 11th consecutive quarter of rising battery imports and set a new record, approximately 24% higher than the previous record set in the last quarter of 2022.

The leading shippers in the first quarter were China’s Contemporary Amperex Technology Co. Ltd., the world’s largest lithium-ion battery manufacturer; LG Energy Solution Ltd., with significant factories in South Korea, China, and Poland; and US-based Tesla Inc., which supplements its domestic battery production with imports from China.

In 2023, the United States has seen a remarkable increase in the construction of lithium-ion battery factories, supported by substantial manufacturing tax incentives provided by the Inflation Reduction Act of 2022. This development intends to localize the production of this critical energy transition technology.

However, the US continues to depend heavily on international trade for its lithium-ion batteries, especially from China, to meet the escalating demand for electric vehicles and electrochemical energy storage as part of its effort to reduce emissions. The imports of these batteries have soared to unprecedented levels.

The largest recipients of these shipments were Tesla and Samsung SDS America Inc., a subsidiary of South Korean battery maker Samsung SDI Co. Ltd. Other significant recipients included Fluence Energy Inc., a battery storage system integrator, and a battery construction affiliate of NextEra Energy Inc.

Companies like Fluence, Samsung, Tesla, and LG Energy Solution are among those that have pledged to construct or expand US lithium-ion battery manufacturing following the enactment of the Inflation Reduction Act. Additionally, Contemporary Amperex Technology is collaborating with Ford Motor Co. on its domestic battery production.

In the first quarter of 2023, China was the largest contributor to US battery imports, with an overwhelming share of 87.9%, up from 77.5% a year ago. South Korea contributed 3.2%, down from 4.7% in the same period in 2022. Poland increased its share to 3.1% from 1.4%, and Japan’s contribution dropped dramatically from 11% to just 1.2%.

The increasing demand for lithium-ion batteries in the U.S., which resulted in a record-breaking import in Q1 2023, is a clear indication of the ongoing energy transition and the heightened emphasis on electric vehicles (EVs) and electrochemical energy storage. It also underscores the significant role of international trade, particularly with China, in meeting this demand.

The data underscores the urgency of increasing domestic production capabilities to meet the escalating demand. It also suggests that despite the rapid build-out of domestic lithium-ion battery factories, reliance on imports, particularly from China, is likely to persist in the near term due to the sheer volume of demand.

Consequently, while the U.S. continues to bolster its domestic production, maintaining healthy international trade relationships will be crucial to meeting the nation’s energy transition goals.


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Carbon Removal Startup CUR8 Closes $6.5M Pre-Seed Funding

London-based climate tech startup CUR8 raised $6.5 million in pre-seed funding round led by Google Ventures (GV) to scale up and further develop its carbon removal credit platform.

CUR8 said that the funds will help grow its team, increase capacity, and serve more clients and suppliers. 

Google Ventures supports startups operating in the sectors of emerging technologies, enterprise, life sciences, consumers, climate, among others. To date, it has more than $8 billion in assets under management, backing 400 companies in Europe and North America. 

Apart from GV, another investor joining the round is CapitaIT. It’s a (pre)seed fund investing in climate tech and the future of work. 

Reaching Net Zero with Carbon Removals

The world is under pressure to decarbonize by 2050 and industries are striving to achieve their net zero pledges. And a key part of that is to offset their unavoidable emissions through carbon removals. 

Asserting the important role of carbon removals in net zero goals, Dr. Gabrielle Walker says:

“I’ve been working in climate science for 30 years and it can be easy to feel overwhelmed and pessimistic about the 2050 net-zero deadlines. Carbon removal, along with decarbonisation at scale, has the potential to help us reach these goals, but only if we have the right tools to scale this market to 10 billion tonnes a year by 2050.”

Required Carbon Removals by 2050

Source: CUR8 website

There are different types of carbon removal technologies available today. These include methods like planting more trees, increasing soil’s CO2 absorbing capacity, turning agri wastes into biochar (carbon-rich charcoal), enhanced rock weathering, and direct air capture. 

The carbon removal industry has a lot of potential to grow as more companies commit to net zero targets. But it’s still in its infancy and has to deal with challenges such as high prices and lack of supply.

All these prevented companies from investing in carbon removals as an option for reducing and offsetting their footprint. 

And this is where CUR8 can help fill in the gap between high-quality carbon removal credit suppliers and buyers. 

CUR8’s Unique Carbon Credit Platform  

CUR8 focuses on accelerating the carbon removal industry by building a platform for removals portfolios of the highest quality.

The startup was founded very recently in 2022 by a team of expert executives: serial fintech entrepreneur and former lead of Google for Startups UK Marta Krupinska, removals expert and climate scientist Dr. Gabrielle Walker, and net zero expert and former UK Ministry of Defense advisor Mark Stevenson. Other team members were former workers at the World Bank and Microsoft. 

The carbon removal startup aims to facilitate 1 billion tonnes of carbon removals annually by 2050. The company is building the tools to professionalize the industry through its innovative platform. 

CUR8 buys carbon credits from trusted removals suppliers and creates high-quality CO2 removals portfolios through trusted methods and strategies. 

Buyers can trust CUR8 carbon removal credits that have these features:

CUR8 hopes to lower the carbon credit price over time to make it affordable as the sector grows and develops. Currently, the industry set price for each carbon removal credit is at about £150 or $180 per unit. 

The climate tech’s platform has been selling carbon removal credits to royal events such as The Queen’s Platinum Jubilee Pageant and The State Funeral of HM Queen Elizabeth II. It also does the same for big public events like the British Summer Time and All Points East. 

CUR8 platform’s removals are from these portfolio:

1PointFive’s direct air capture 
UNDO’s enhanced rock weathering
Loam Bio’s durable soil carbon

The 10% Mission  

It has been clearly determined by scientists that the world has to remove 10 billion tonnes of CO2 by 2050. 

CUR8 seeks to enable 10% (1 billion) of all global carbon removals over the next two decades and more. The climate startup will do that by developing critical CO2 removal infrastructure. 

In 2022, the UK government has invested £54 million into various projects that develop CO2 removal technologies. In the U.S., the Department of Energy has been pouring billions of dollars into supporting different carbon removal initiatives.

CUR8’s scientific experts track over 100 data points across impact, integrity, and scalability in performing in-house supplier due diligence. This is crucial to reduce buyers’ risk and help companies understand the quality of their carbon credit investments.

The company is also tracking the progress of carbon sequestration of their partners so buyers can invest in carbon credit contracts over several years. They can then use it to inform their net zero goals and their ESG (environmental, social and governance) plans. 

CUR8 plans to create financial tools that ramp up the sector and allow new carbon removal technologies to develop, ensuring that the sector will have a key part in fighting the climate crisis.

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How Big is the CO2 Footprint of AI Models? ChatGPT’s Emissions

Generative artificial intelligence (AI) like ChatGPT is the tech industry’s hottest tool expected to revolutionize trillion-dollar businesses, but what does its carbon footprint mean for the planet?

Generative refers to the ability of an AI algorithm or model to produce complex data. These include creating a sentence or a paragraph, generating an image or a short video. 

While generative AI has long been used in applications, it only recently improved to produce human-like language and realistic images. It is booming, and so too its carbon emissions. 

Generative AI’s Carbon Footprint

Though it’s hard to measure the exact energy cost of AI models, their carbon footprint is growing alarmingly. They use more energy than other types of computing.

In fact, training a single AI model can consume more electricity than one hundred American homes use in one year. And the sector is growing so rapidly and their models are not cheap to train. 

Their emissions vary a lot, depending on the type of source that powers the technology. For instance, a data center that is run by a coal or gas-fired power plant will have more CO2 emissions than one that gets power from renewable energy sources. 

Greater Power Means Greater Energy

While the specific energy use for an AI model remains unknown, generally it includes the footprint used in making the computing equipment, creating the AI model, and using it. 

Some estimations, however, exist in an attempt to grasp how huge the technology’s CO2 footprint is. 

As reported by the MIT Technology Review, training a single AI model can emit 626,000+ pounds of CO2 equivalent. Putting that in context, it’s about 5x the lifetime carbon emissions of an average passenger car. 

And the more powerful the AI model, the more energy it needs. 

In a 2019 study, researchers found that making BERT, a generative AI with 110 million parameters, used the same energy as 1 person consumed in a roundtrip transcontinental flight. 

AI model’s number of parameters refers to their size. The larger the model’s size, the bigger its footprint. 

Indeed, making the much bigger model, the GPT-3 with 175 billion parameters, emitted over 550 tons of CO2e while consuming 1,287 MW hours of electricity, per computer scientist Kate Saenko. It’s the same amount of emissions as a single person taking 550 roundtrip flights between New York and San Francisco.

And that doesn’t even include other sources of emissions, only getting the AI ready to use. 

AI Query like ChatGPT Emits More CO2

While generative AI models used to be available only for researchers, OpenAI’s release of ChatGPT alters that. Along with the sector’s carbon footprint. 

There’s a lack of information on the CO2 emissions of a single generative AI query. But industry estimates show it is 4x to 5x bigger than that of a search engine query. One Google search emits about 0.2g of CO2

ChatGPT had seen more than 1.5 billion visits in March 2023 alone. 

Saenko asserts the exponential growth of this AI tool as tech giants integrate them into their search engines saying:

“As chatbots and image generators become more popular, and as Google and Microsoft incorporate AI language models into their search engines, the number of queries they receive each day could grow exponentially.”

The Chinese search company Baidu has also announced plans to do the same.

ChatGPT and other AI assistants have many other uses than search. They can also write, solve math problems, and create marketing campaigns. 

The carbon emissions of building ChatGPT is not known publicly, but it’s more likely higher than GPT-3’s footprint, per Saenko. And since ChatGPT has to be updated, it can process data only until 2021, its emissions will increase even more. 

Yet, generative AI’s carbon footprint can be reduced. 

A “Greener” Chatbot

A study by Google found that using a more efficient AI model architecture, processor and a greener data center can reduce the tech’s carbon footprint by 100x to 1,000x.

Greener data center means using power from renewable energy sources like solar or wind farms. 

AI developers can also schedule computation at times when renewable sources are more available. This can cut AI’s carbon footprint by as much as 30% to 40%, compared to using a fossil fuel powered-grid.  

But the more pressing concern to address is to make data on generative AI model’s carbon footprint more publicly available. This is crucial to know the sector’s real impact on the environment and base emission reduction efforts from there. 

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Klarna Funds Carbon Removals with $5M from Internal Carbon Tax

Klarna reveals climate commitment worth a total of $2.35 million that will support more than 20 carbon removal organizations this year. 

Klarna, the global payments network and shopping solution provider, gets the contribution from its internal carbon tax income. It’s the third time the company is doing this act since 2021, which now totals to over $5 million.  

Remarking on the announcement, Klarna’s Head of Sustainability Salah Said noted that:

“Klarna is committed to supporting impactful organizations long-term as a catalyst for change, to help them grow and maximize their impact… driving the removal of CO2 from the atmosphere while also contributing to nature protection and restoration, decarbonization, and advocacy.”

Klarna’s Approach to Sustainability

Klarna is a Swedish fintech company that provides online financial services. It’s the first fintech to join The Climate Pledge and Race to Zero campaign. 

With funds from its internal carbon tax program, Klarna is putting its money in carbon removal solutions that mitigate climate change. The goal is to achieve long-term climate impact by supporting various climate projects to make an impact by 2030. 

This climate initiative is part of Klarna’s Climate Transformation Fund in partnership with Milkywire. The Fund selects the companies to support.

What’s The Climate Transformation Fund?

The Climate Transformation Fund is a “beyond-offsetting” charitable fund arranged by planet health platform Milkywire. It particularly supports various projects that tackle the climate crisis within these areas – biomass, rock, ocean, and direct air capture. 

To help achieve the global net zero goal, the global retail bank implemented an internal carbon tax to make money for the Climate Transformation Fund. The company charges its own emissions with this breakdown:

$100/metric ton for Scope 1 and Scope 2 emissions, plus travel emissions 
$10/metric ton for the rest of Scope 3 emissions

Klarna and its Carbon Removal Partners

Last year, Klarna’s internal carbon tax income supported 16 climate projects. By the end of this year, the company will fund over 20 initiatives ranging from nature-based solutions to carbon removals. These include the following companies:

Carbon Capture Scotland 

This is a UK-based CO2 capture and storage firm focusing on capturing waste biogenic CO2 from whisky distilleries and storing it via geological storage. Their technology lowers the cost and footprint of sequestering CO2 from fermentation sources. Klarna plans to make a pre-purchase from this company this year. 

Takachar – biochar 

This Kenya-based company is producing biochar, a carbon-rich fertilizer, from crop and forest wastes. Takachar partners with local farmers to make good use of waste biomass to reduce carbon pollution with soil carbon removal. Klarna also plans to make a pre-purchase from Takachar. 

TerraFixing – DAC

This Canadian company has developed an adsorption based direct air capture (DAC) technology. The DAC is designed to work in cold remote locations where capturing and extracting CO2 is easier and cheaper. Klarna intends to make a pre-purchase from TerraFixing also this year.

Inplanet – Enhanced Rock Weathering (ERW) 

This ERW startup works in Brazilian agriculture and focuses on removing carbon by spreading silicate rock powders on farms. Inplanet does it under optimal soil and climate conditions for effective weathering and carbon removal. The company is set to make a pre-purchase deal with Klarna. 

SeaO2 – ocean CO2 capture

SeaO2 is a Dutch company that uses electrochemical oceanic carbon capture tech to capture CO2 from seawater and store it. It then returns the treated water back to the ocean for more carbon sequestration. 

Other CO2 removal companies that the Fund supports include existing ones such as Husk, InterEarth, and Silicate. Other new companies that Klarna will fund this year include the Kenya-based Octavia Carbon, Parallel Carbon, and Mission Zero Technologies.

Klarna had pre-purchased carbon removal credits from Heirloom and Climeworks in 2021 and 2022.

Klarna’s Net Zero Goals and Progress

Apart from funding carbon removal and other climate projects, Klarna also manages to further reduce its own CO2 footprint. The payment network cut its carbon emissions by almost 4% in 2022 compared to 2021.

The carbon reductions were due to continued improvements Klarna makes in cutting footprint from Scope 1 and 2 emissions. The company also managed to run all its offices on 100% renewable energy last year, 2 years earlier than targeted.

Klarna aims to cut 50% of its carbon-intensity-based emissions in line with the Paris Agreement by 2030. It seeks to reach net zero operations by 2040, 10 years ahead than the global target.

To date, here is Klarna’s climate targets and progress in a glance:

Going forward, Klarna will continue to support and select more projects as it works toward achieving its net zero target. By making those pre-purchase agreements, Klarna and its partners help scale the emerging carbon removal industry with new climate solutions.

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India’s Tiger Protection Avoids Over 1M Tonnes of CO2 Emissions

India’s efforts in protecting its endangered tigers have resulted in avoiding over 1 million tonnes of carbon emissions by preventing deforestation, according to a study. 

A study published in the journal Nature Ecology and Evolution has found a significant link between tiger protection and reduced carbon emissions, suggesting the potential for integration into carbon credit schemes.

India’s Tiger Protection Program 

India is home to most of the planet’s wild tigers. However, deforestation has destroyed their natural habitat, leading to a drop in their population.

The number of tigers roaming the country’s forests declined to a mere 1,500 in 2006. However, India’s innovative tiger protection program, Project Tiger, has saved these big cats from extinction. 

This year marks the project’s 50th anniversary, and last April, the Prime Minister announced that the tiger population in the country has risen above 3,000, representing over 70% of the wild tigers worldwide. 

India’s Project Tiger began with only nine dedicated reserves five decades ago. However, the country now protects tigers across 54 reserves spread throughout the nation. The total protected area spans more than 75,000 square kilometers, equivalent to 2% of India’s total land area.

Tiger Reserves Spreading Across India 

Source: India National Tiger Conservation Authority

Apart from saving the tigers, the wildlife protection program also achieved another critical saving – carbon emissions. 

Saving Tigers Saves Carbon Emissions

Researchers compared the rate of deforestation deforestation in the reserves to that in areas where tigers also reside but receive less protection.

Their study found that over ¾ of the forest loss happened outside the protected reserves. Moreover, between 2001 and 2020, 61,000+ hectares of forest were lost across 160+ different areas.  

According to the lead author, Aakash Lamba, tigers are an umbrella species, meaning conserving them is also protecting their habitat. And forests are a natural carbon sink that sucks in CO2 more than they release. 

Therefore, preventing deforestation also contributes to reducing CO2 emissions. The study found that approximately 6,000 hectares of forests within the tiger-protected areas were preserved between 2007 and 2020.

The substantial reduction in deforestation equates to a savings of over 1 million tonnes of carbon emissions. While this amount might seem small compared to India’s annual carbon footprint of approximately 2.7 billion tonnes, it still represents a significant achievement

The country has been snagging the carbon market spotlight with its various climate plans last year. It’s hastening efforts in transitioning to clean energy and reach net zero emissions by 2070.

Yet, the emissions avoided are substantial when monetized through carbon offset credits. 

The authors suggested that the third-largest emitter could have earned more than $6 million from carbon credit sales had the project qualified for such crediting. They also estimated that the project helped the country avoid as much as $92 million in other ecosystem service costs.

Highlighting the carbon emissions savings and cost benefits of protecting tigers, the authors noted that “biodiversity conservation and climate change mitigation are intimately linked“.

In another study, protecting other wild animals can help capture over 6 billion tonnes of CO2 each year. 

However, India’s Project Tiger does not qualify for generating carbon credits as it does not meet the additionality criterion. The 1 million carbon emissions savings took place on already protected areas. 

Closing the Funding Gap with Carbon Credits 

However, the authors asserted that insufficient funding for biodiversity conservation projects like these reduces their impact.

Their findings suggest that Project Tiger could be a game changer for protecting wildlife and biodiversity as it can be funded through carbon credit schemes. 

They specifically stated that:

“Revenues from the trade of fungible carbon offsets, which represent standardized and internationally tradable reductions in emissions, arising from the recognition of the climate change mitigation benefits associated with biodiversity conservation can serve as a means of closing this funding gap.”

The financial savings from avoided carbon emissions account for about a quarter of India’s annual expenses on tiger protection. The country’s budget for the program in 2021 was almost $27 million. 

Modifying the current crediting system could benefit not only tiger and wildlife protection in India but also in other regions. 

However, the authors noted that incorporating tiger protection into carbon credit markets necessitates thorough consideration of local communities. Their participation is “crucial in equitable and effective conservation”.

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6 Key Takeaways from World Bank’s 2023 Carbon Pricing Report

Amid the global energy crisis and economic issues, revenues from carbon credits traded in emissions trading systems (ETS) and carbon taxes hit record high in 2022 reaching almost $100 billion, per the World Bank carbon pricing report. 

Carbon pricing is an essential policy tool useful in decarbonizing global economies. Through various instruments, carbon prices bring economic incentives to make climate-friendly changes in consumption, production, and investment. 

The World Bank’s State and Trends in Carbon Pricing 2023 report provides an updated overview of the existing and emerging carbon pricing instruments worldwide. It also explores the trends and drivers of those instruments, including carbon taxes, carbon crediting mechanisms, and emissions trading systems. 

As highlighted in the report, carbon pricing has to continue growing, in price and coverage, to drive climate action and meet the Paris goals. Here are the six key takeaways from the World Bank carbon pricing report. 

#1. Carbon prices growth slowed but showed resilience

After years of high growth, carbon prices in ETSs and carbon taxes had slowed but showed resilience. They have made it through the global energy crisis last year, and even half of the instruments’ prices have increased. About a third have the same prices while fewer than 15% decline. 

The European Union ETS recorded the largest increases, with price surging 100 Euros for the first time. It is linked with the Switzerland ETSs. 

But in other ETS, carbon prices were down by up to 35% like the case of Republic of Korea ETS.

While some countries or jurisdictions toned down their plans to increase carbon prices, many didn’t. In fact, several of them decided to strengthen their existing ETSs and carbon taxes in the coming years. 

For instance, Singapore made changes in its carbon pricing bill that will increase the nation’s carbon tax beginning in 2026, from USD 4-34 to USD 38-60. Likewise, Canada is pursuing its plan to increase its federal baseline to go over USD 127 by 2030

Apart from policy changes, energy markets and drought were some of the biggest factors affecting carbon prices in most ETSs. In many European nations, the combined effects were enough to halt the declining trend in coal use while higher power sector CO2 emissions caused EU ETS to rise. 

Overall, carbon prices have to grow in the long term to drive investments at the scale and pace needed. To keep global warming below 2°C, prices need to reach $50/tCO2 to $100/tCO2 by 2030. Factoring in inflation, that price range would be at $61 to $122 by 2030 in 2023 USD. 

As of April 2023, under 5% of global GHG emissions are covered by a direct carbon price at or above the range suggested by 2030 (in 2023 US dollar value). Most of these high-price carbon pricing instruments are found in European countries as seen in the chart below. Blue shades refer to ETS prices while the pink ones represent carbon taxes. 

#2. Number of ETSs and carbon taxes implemented slightly grew

The number of ETS and carbon taxes adopted has gone up slightly to 73 as of April 2023. The increase is mostly in countries that are already pricing carbon, referring to the map below. 

In 2022, several jurisdictions delivered on their existing plans for new ETSs or carbon taxes or increased their ambition. Some of them also revealed more proposals to develop new carbon pricing initiatives. 

Emerging economies are showing growing interest in adopting carbon credit instruments but high-income nations still dominate the global market. 

Overall, the little increase in the carbon instruments in operation cover about 23% of global carbon emissions. This rise represents a below 1% increase relative to the previous year. 

Carbon pricing mechanisms today are mainly focused on energy and industrial emissions. Most carbon taxes cover certain fossil fuels used in different sectors, while ETSs often focus on big industrial facilities. 

New Zealand will be the first country in the world to put a price on agricultural emissions in 2025. This is separate from the country’s existing ETS and will be applied at the farm level. 

While other countries are also considering the creation of future ETS such as Malaysia, Vietnam, and Thailand, for instance. Meanwhile, Taiwan and China early this year passed a law to introduce a carbon tax on heavy emitters.

#3. Record high carbon revenues almost at $100 billion 

This is perhaps the highlight of the report. Total carbon revenues from ETSs and taxes jump by over 10% in 2022, hitting about $95 billion. Compared to last year, the increase is worth $10 billion

Carbon revenues are the product of the carbon price, specific emissions covered, and other pricing design factors like rebates and allocation methods. 

Revenue in the EU ETS alone has grown 7x from 2017 amounts, generating a total of $42 billion in 2022. The $7.8 billion increase accounts for over 76% of the total increase in global carbon pricing revenues. This is partly because of higher prices, but also due to the shift from free carbon allowance allocation to auctioning.

In 2022, ETSs represented about 69% of government income from direct carbon prices, while carbon taxes took the remaining 31%.

As to where the governments spend the carbon revenues, the following figure shows the percent share of different uses.  

#4. Carbon credit markets slowed, and demand is mostly voluntary 

After 2 years of steep growth, carbon credit markets slowed last year, with a +1% drop in retirements from 2021. A total of 196 million carbon credits were retired in 2022. 

The supply of new carbon credits and demand from end users decreased a little bit, reversing the previous year’s increase.

As seen below, independent crediting mechanisms or voluntary carbon markets supply most of the credits. But credit issuances from international mechanisms like the Clean Development Mechanism (CDM) grew in 2022, representing 30% of total issuance. 

Voluntary corporate use of carbon credits remains to be the major source of demand in the market. 

Also, more and more nations are thinking about establishing their own carbon credit mechanisms. This plan is often in conjunction with an ETS or carbon tax policy. 

For example, both Indonesia and Vietnam made some preparations to establish domestic carbon credit schemes while South Africa assessed their internal standards to produce credits.

#5. Nature-Based carbon credits may overtake Renewable Energy

Renewable energy still dominates carbon markets. The share of carbon credits generated by renewable energy activities has been rising since 2018. They represent about 45% of registered projects and account for 55% of credit issuances in 2022. 

In terms of carbon credits retired last year, 52% came from renewable energy projects, up from 44% in 2021. Renewable energy credits (RECs) are still widely available and among the cheapest credit types.

But as the cost of renewable energy fell significantly over the last 10 years, RE projects may no longer need the extra revenues from carbon credits. This signals that the value of RECs will eventually go down.  

Thus, the supply of carbon credits from large RE projects will most likely decline over time. Some voluntary carbon crediting schemes have restricted eligibility, particularly for projects in the least developed nations. 

Meanwhile, there has been a growing focus on nature-based activities. These include projects involving emissions reductions from agriculture and forestry and land use. The credits they produce often deliver co-benefits – other socio-economic benefits aside from carbon reduction – valued by many buyers.

Though credit issuances from forestry and land use activities drop in 2022, this may change soon, according to industry experts. Last year, 54% of new projects registered were for nature-based solutions, indicating a potential for supply expansion in the future.  

#6. Exchange-traded credits from removal projects trade at a premium 

Carbon credit prices and trends vary across market segments and project types. Nature-based credits saw the highest price drop, from as much as $16 to below $5.

The rising use of standardized contracts is considered one factor of a downward trend in prices as seen below. 

The price gap across most credit types or categories has narrowed, with exchange-traded credits from removal projects trading at a premium. Compared to carbon allowances traded in an ETS, carbon credits are heterogeneous. 

Carbon credit prices vary due to several factors such as project type, credit issuer, credit vintage, and co-benefits. Hence, prices of different credit types vary a lot, reflecting project costs as well as buyer preferences. Newer credits sell at higher prices, according to Xpansiv CBL’s 2022 trading data.

Lastly, the carbon credit market continues to grow in diversity and sophistication, per World Bank’s report. More service providers, advanced technological platforms, improved products, and new investors will further drive market growth.

And as more countries sign deals to produce credits from emissions reductions and new integrity initiatives develop, standardization and transparency in the carbon credit market will follow soon. 

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France Bans Short-Haul Flights to Slash Aviation CO2 Footprint

France has formally banned domestic flights on short routes that can be covered by train to cut the aviation’s carbon footprint. 

The ban was proposed two years ago and finally came into effect via a decree. It applies to public flights between destinations where a train travel of less than two-and-a-half hours is available. 

The change will rule out air travels between Paris and cities such as Nantes, Lyon and Bordeaux. The ban doesn’t cover connecting flights. 

Reducing Aviation Carbon Footprint

The aviation sector is one of the fastest-growing sources of carbon emissions that drive global climate change. Airlines emit more than 900 million tonnes of CO2 annually, accounting for 2% of the global CO2 emissions.

The International Air Transport Association (IATA) thinks that the present airline emissions goals are not ambitious enough. To bring the industry to a net zero emission, airlines must show bold commitments. Some major airline companies opt to invest in scaling up hydrogen-electric aviation solutions while others promote SAF (sustainable aviation fuel). 

But when COVID-19 pandemic hit, airlines were largely affected as the number of flights declined to over 40% from 2019. France decided to employ bolder rules.

Some airlines had requested the European Commission to assess if the French government’s decision was legal. While critics called the measure “symbolic bans”.

Laurent Donceel from the industry group Airlines for Europe (A4E) pointed out that governments should support “real and significant solutions” to aviation emissions, instead of “symbolic bans”. He added that “banning these trips will only have minimal effects” on the industry’s carbon footprint. 

A4E asserted its own net zero by 2050 plan, which includes shifting to clean fuel sources and flying battery- or hydrogen-powered airplanes. 

Symbolic Ban or Essential Step?

France is home to a large high-speed rail network. The law specifies that train services on the banned routes must be satisfactory, meaning frequent, timely and well-connected. 

The alternative train travel must be able to meet the passenger’s needs who would otherwise fly. The rail network must also absorb the surge in passengers. 

People on affected flights must be able to travel back and forth via train on the same day after spending 8 hours on their destination. 

According to a French consumer group UFC-Que Choisir, a “plane emits 77x more CO2 per passenger than a train” on those short-haul routes. But train travel costs less though it takes forty minutes more.

The group also called on assurance that the railway won’t increase ticket prices or lower their service quality. 

French transport minister, Clément Beaune, hailed the move as an “essential step in reducing GHG emissions”. He also said that it was in line with the government’s policy of promoting the use of transport modes that pollute less. 

CO2 Footprint Per Mode of Transport (per passenger per km)

Emissions per passenger per km from different modes of transport. Source: UK Department for Business, Energy and Industrial Strategy 2019 Government Greenhouse Gas Conversion Factors

The move comes as France has also been debating how to slash aviation footprint from private jets. The use of these jets by rich people prompts a big concern for the climate. 

Earlier this year, Greenpeace revealed that the number of flights by private jets in Europe in 2022 increased by 64%. It hit a record high of 572,000+ flights. It was more than doubled last year, surpassing the annual per capita carbon emissions of 550,000 EU citizens.

While Green MPs have been calling to ban small private air travels, Beaune decided to impose a higher climate charge for private flyers from next year.

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What are the Effects of Methane Emissions and Why Should We Care?

What are the effects of methane emissions? That’s the multi-million dollar question in the world’s battle over global warming as methane was often overlooked in the climate change conversation for decades. 

And this could be dangerous because the gas is so much more powerful than carbon dioxide in warming the planet. 

Methane is a “short-lived climate forcer” (SLCF), meaning its effect is short-lived, about 12 years, but is particularly destructive. In fact, one ton of methane has about 80x the warming potential heat-trapping ability of a tonne of CO2.

Experts further say that methane emissions are responsible for about 30% of today’s climate change. The gas also poses health hazards to people, which can be deadly. 

Yet, the trends of methane emissions in the U.S. and worldwide are heading in the wrong direction.

The good news is that there’s a growing recognition among the scientific and political communities that reducing methane is critical in fighting climate change. 

Cutting methane emissions is the fastest option we have to slow the pace of global warming right away, even as we decarbonize the world’s energy systems.

It’s an opportunity we shouldn’t miss.

So, how can we address the methane problem and mitigate or reduce its emissions? This article will explain how focusing on the major sources of methane and providing some key players in the space. 

But before that, let’s first get to the basics by tackling what methane emissions do, why it’s bad for the environment, where it comes from, what sectors produce the most methane, plus some projections. 

Why Methane and What Does Its Emissions Do?

Why is methane bad for the environment?

Methane (CH4) is the second most abundant anthropogenic or human-related greenhouse gas (GHG) after CO2. As already explained, methane is a potentially destructive gas that has a more powerful near-term warming effect than CO2.

As a result, methane emissions contributed to about of the increase in today’s GHG warming since pre-industrial times. And it’s growing faster than at any other time ever since record-keeping started in the 1980s.

Global Methane Emissions Trend Since the 1980s

Apart from driving climate change, methane also poses acute and chronic hazards to human health. 

The gas is explosive within certain ranges, presenting a safety hazard for people living in places with high methane concentrations. These particularly include areas around oil and gas facilities, coal mines, and some agricultural settings. 

Methane is also the primary contributor to ground-level ozone, a.k.a. smog formation, another GHG and harmful air pollutant. It’s often linked to various public health impacts such as asthma, weakened lung function, and cardiovascular diseases. 

Alarmingly, exposure to smog causes 1 million premature deaths each year. 

A study found that reducing 1 million tons of methane emissions may lead to a reduction of 240 to 590 premature deaths worldwide.

With these facts, it’s no surprise that individuals living near areas of high methane production have poorer health conditions and poorer quality of life. 

So, what, or we’d rather say, who do we blame for all the planet-warming effects and health dangers of methane? We’ll know by discovering where methane comes from and what sectors in the U.S. emit most of the gas. 

What Produces the Most Methane Emissions?

Over the past 200 years, methane concentrations in the air have more than doubled mainly because of human activities. These emissions have gone up alarmingly, which scientists think may be the biggest threat to keep global temperatures below 1.5°C.

There are two main culprits for releasing CH4 into the atmosphere – natural and anthropogenic sources. 

Natural sources are:

wetlands that are poorly managed are the biggest natural source, releasing methane from microbial decomposing activities 
reservoirs and ponds with high organic matter and low oxygen levels

Other small natural sources of CH4 emissions include oceans, sediments, wildfires, volcanoes, and termites.

Anthropogenic sources are:

Agriculture – livestock raising
Energy – oil and gas systems, coal mining
Waste management activities – landfills and wastewater treatment

The International Energy Agency estimated methane emissions from both sources as shown in the chart from its Global Methane Tracker.

Sources of Methane Emissions, Natural, and Anthropogenic

Source: International Energy Agency (IEA CC BY 4.0)

The largest anthropogenic source is agriculture, responsible for about a quarter of total CH4 emissions. The energy sector follows closely, which includes emissions from coal, oil, natural gas, and biofuels. Emissions from waste are the third biggest anthropogenic source. 

According to the U.S. Environmental Protection Agency (EPA), about 50-65% of total methane emissions come from anthropogenic or human activities. The agency also reported that CH4 accounted for 12% of all anthropogenic emissions in the U.S.

The following pie shows the US CH4 emissions per source, per EPA data.

U.S. Methane Emissions, By Source

Same with global emissions, the largest anthropogenic source of methane emissions in the US are agriculture (33%), combining enteric fermentation and manure management emissions. 

Natural gas and petroleum systems (29%) are the second biggest source of CH4 emissions in the country.

The gas is emitted during the production, processing, storage, transmission, distribution, and use of natural gas; while the production, refinement, transportation, and storage of crude oil releases the gas. Coal mining is also another significant source (6%). 

Methane is generated in landfills as waste decays and in the treatment of wastewater. Landfills are the third largest source of CH4 emissions (15%) in the US from decaying wastes. Domestic and industrial wastewater treatment also emits methane. 

Though CH4 emissions from oil and gas systems come second overall, they’re the largest industrial source of methane. That’s why President Joe Biden directed the EPA to issue regulations under the Clean Air Act to reduce the oil and gas industry’s methane emissions.

Plugging the Super-Emitters

The Biden administration has supercharged existing efforts by pouring billions to address the methane problem. 

The big effort, thus far, is to plug over 4 million abandoned and orphaned oil and gas (AOOG) wells spread across the 26 states. This well-plugging program is worth almost $5 billion under the Infrastructure Investment and Jobs Act 2022.

Most of the abandoned wells, about 22%, are found in Texas, while in Canada, 67% are in Alberta province

These abandoned, unplugged wells are leaking methane, estimated to be equal to burning over 16 million barrels of oil. But several studies reported that these emissions are likely underestimated due to uncertainties in the total number of the wells and their associated CH4 emissions. 

Good thing advanced technologies are now around to help track and detect methane emissions. Satellites, in particular, have helped scientists in detecting and measuring methane releases from leaks in pipes, venting, and other sources. 

These recent technological innovations have discovered sources that may go undetected for years. The recent case of Turkmenistan is a perfect example. 

Before this discovery, the Central Asian country wasn’t part of the countries that are known for being super-emitters of methane. Russia, the US, China, Brazil, India, Indonesia, and Mexico are the most popular super-emitters. No mention of Turkmenistan.

But satellite data analysis by Kayrros, a satellite-based tech company, showed that Turkmenistan has the most CH4 super-emitter events worldwide. The source is the two major leaking oil and gas systems in the country detected by NASA’s satellite monitoring device.

Similarly, in the US, NASA’s satellite program is partnering with a non-profit organization to track methane emissions at individual facilities. Their work produces high-resolution images that can locate sources of CH4 through their plumes. 

Here’s an example of a leaking gas line in an oil field in California detected by NASA’s AVIRIS-NG in 2020. 

Caption: A methane plume detected by NASA’s AVIRIS-NG. Source: NASA/JPL-Caltech

Right after the discovery, the operator confirmed the leak and repaired it right away. Who knows how much methane would continue leaking from the facility should it remain unknown.

And what about the rest of the leaking facilities from all over the world? They’re too many to handle all at once. 

Kayrros detected over 2,400 large CH4 leaks from fossil fuel extraction and landfills since 2019 as shown below.

Where Will the Growing Footprint Take Us?

With more satellite data becoming open to the public, it guides emissions reduction strategies and drives more investments. In most cases, it creates economic incentives for operators to repair leaking systems or plug the inactive ones.

But how about the future CH4 footprint that is projected to even grow bigger? 

Data from the Global Methane Initiative (GMI) shows that emissions from human activities by sector will rise by 2030.

As you can see above, emissions from each sector will grow until 2030. The biggest increase is from coal mine releases (17%) from 2020 to 2030. But the footprint from oil and gas systems is forecasted to also grow by 11% for the same period.

Methane, Can We Plug It In?

The good news? Yes, we can.

In fact, the IEA estimates that the oil and gas sector alone can reduce its methane emissions by 75% using technologies already available today. The better news is that of it the reduction is possible with no net cost. 

The best part? All methane emissions caused by humans can be reduced by as much as 45% within the decade.

So how about literally plugging in those oil and gas wells that were left behind?

The federal government has both its feet on the gas. Its $4.7 billion well-plugging program is on the go in identifying the super-emitters and plugging them in. $30 million of which was used for the research team to develop technologies and best practices for locating the wells.

The team has used drones, field detectors and other remote sensors to look for orphan wells from Pennsylvania to Oklahoma. They have looked on old photos and maps, hiked through creeks, and hacked through brush trying to find the wells. After locating a well, the researchers measure the amount of methane leaking from it and record its GPS coordinates. 

Just to be clear – the idea is not to hunt down each and every well in the country, but to develop tools and methods for states to use in finding the wells and which ones to plug first. 

Government funding programs can also be stretched to allow entities to monetize their methane capture and destruction efforts. And one of those companies that come to government aid in this quest is Zefiro Methane Corporation.

Zefiro, founded in 2018, is a private methane offsets originator that answers the problem of unfunded well-plugging liabilities, turning them into opportunities while moving the upstream energy sector to Net Zero.

The Vancouver-based company is expanding the supply of carbon credits serving as offsets critical for reaching net zero targets. The company’s goal is to reduce methane emissions which aligns with the industry’s objective for a greener future. Zefiro does that in two main ways:

Well decommissioning: Zefiro will cap abandoned wells for a service fee paid by the well owner (up to $150,000). 

Creating offsets: After decommissioning, Zefiro will claim carbon offsets from the programs used by various industries – ex. energy, manufacturing, etc.

To ensure the high quality of their carbon offsets, Zefiro enlists a third-party verifying body to audit and certify each project. This is important to ensure that the project meets all criteria for carbon credit issuance and that it delivers real and actual methane emission reductions.

Investing in the company brings these benefits: 

How About the Cows?

Enteric fermentation, as shown earlier, is one of the largest sources of CH4 emissions – 25%. It’s a natural part of the digestive process in ruminant animals like cattle, sheep, goats, and buffalo. 

To help the livestock or the animal agriculture industry manage its methane pollution, Mootral comes to its rescue. Mootral is a British-Swiss agritech company that developed the world’s first methodology under Verra’s VCS program for quantifying and monitoring methane reductions from ruminants.

Mootral’s methodology is based on a detailed understanding of the biochemical processes in the rumen and of methanogens – the microorganisms within the rumen that produce methane. The company then produces Mootral Ruminant, a natural feed supplement made up of garlic powder and citrus extracts that restricts methanogenic activity and thus reduces methane emissions. 

The company’s mission is to save the climate, one cow at a time through its CowCredit program. Under the program, farmers can convert reductions in methane by feeding Mootral to their raised animals into carbon credits.  

Several scientific studies conducted in the countries of the UK, US, Germany, and the Netherlands have shown significant methane reductions in Mootral’s CowCredit projects. Up to 30% reduction in methane emissions was achieved by dairy cattle on a commercial farm in the UK. As much as 25% reduction has been seen in the studies in the U.S.

CH4 Emission Reduction in UK Dairy Farm

So, what does all this mean for investors? 

Supporting Mootral or buying carbon credits from its projects bring these benefits:

For other major sources of CH4, mitigating emissions is possible through the technologies provided in the GMI report.


To bring the world to net zero, reducing methane along with carbon emissions is a must. Though mitigating the footprint in the agriculture sector is crucial, addressing emissions caused by oil and gas systems is equally important.

Plugging abandoned oil wells is one of the significant mitigation opportunities available today while other reduction means in other sectors are also feasible. And despite differences in their approach to the problem, they all have one common goal – to prevent methane from escaping into the air.

The post What are the Effects of Methane Emissions and Why Should We Care? appeared first on Carbon Credits.

JPMorgan to Buy $200 Million Carbon Removal Credits

JPMorgan Chase made one of the largest investments ever on carbon removal credits, agreeing to pay over $200 million on different removal technologies. 

The biggest American bank’s commitment will remove a total of 800,000 metric tons of CO2 as part of its decarbonization goal. 

Betting on the importance of the carbon removal industry, JPMorgan’s head of operational sustainability, Brian DiMarino, stated: 

“We’re jumping in the pool all in. This is us putting our weight and our capital behind something we believe is truly important to bring to market now.” 

Jumping in the Carbon Removal Bandwagon

Carbon dioxide removal (CDR) is getting traction lately as it’s clear that the pace of reducing emissions to stay within the 1.5°C limit remains too slow. Scientists say that the world has to remove 10 billion tons yearly to prevent the worst impact of climate change. 

So while the market for carbon removal is still small right now, estimates suggest that it will be huge. 

Key players in the industry, particularly the startups, are gaining billions of dollars from the government. The U.S. Department of Energy set aside $3.7 billion to help scale up the carbon removal industry. That’s part of the $12 billion funding support from President Biden’s Bipartisan Infrastructure Law.

But critics say that CDR will only allow fossil fuel companies to continue to pollute. As the largest bank in the US, JPMorgan is also among the biggest financiers of both fossil fuels and clean energy. Its close ties with oil and gas firms has raised concerns from climate activists.

Along with other large American banks, JPMorgan financed fossil fuel a total of $382 billion within a 5-year period (2016-2021). But as pressure from climate groups and banks’ shareholders gets stronger, the finance sector is taking a head turn in their financing deals. Climate commitments from major banks, including JPMorgan, by the end of 2022  amounted to $5.5 trillion.

JPMorgan’s Climate Commitment

JPMorgan President and COO, Daniel Pinto noted that:

“We’re working to drive scalable development of carbon removal and storage as commercial solutions and aim to send a strong market signal.”

The chart shows the projected volume and contribution of carbon removal credits up to 2050 as reported by Ernst & Young (EY). The left chart plots the increase in credit volumes needed to meet the emissions reduction commitments, while the right one shows the share of total reductions met through carbon credits.

Carbon removal credits can cost 100x more than conventional carbon credits. The bank will still use some traditional carbon credits as long as they are high quality while the financier grows its removal purchases.

The $200+ million pledge to buy carbon credits is one way for the lender to help fight climate change. It will offset the bank’s carbon footprint. 

JPMorgan will buy carbon removal credits tied to removing 800,000 metric tons of CO2 from various startups. The first $75 million was revealed last month when the bank joined Frontier, a Stripe-owned carbon removal alliance. It makes advance purchases for its members which includes large corporations including Meta, Alphabet, Shopify, and McKinsey. 

JPMorgan’s climate commitment also includes a payment to Climeworks of over $20 million to remove 25,000 metric tons over 9 years. Climeworks is a Swiss CDR company that captures CO2 directly from the air (direct air capture) using giant fans. 

Last year, JPMorgan helped Climeworks raise $650 million from investors to scale its DAC efforts.  

The bank is also buying about 30,000 carbon removal credits from Charm Industrial over 5 years. Charm is a CDR startup that turns biomass (plant waste) into bio-oil and pumps it underground. 

Last week, Frontier separately closed a $53 million carbon removal deal with Charm to capture 112,000 tons of CO2. 

JPMorgan’s Decarbonization with Removal Credits

Large companies are using a mix of emissions reduction and carbon removal means to meet their climate goals. JPMorgan aims to lower its carbon emissions 40% by 2030 from 2017 levels. 

The bank also seeks to match its operational emissions from fuel consumption with carbon removals by 2030. Such a move is one of the first pledges by a large company. 

JPMorgan’s pledge of 800k removal is the 2nd-largest purchase in history, which is equal to removing annual CO2 footprint of about 160,000 passenger cars. The biggest deal so far is made by Microsoft with energy giant Ørsted, which involves removing 2.8 million tons

The majority of the bank’s commitment involves a 15-year deal with CO280, another CO2 removal startup. The company captures CO2 absorbed by plants when they’re used in industrial processes. 

The rest of the 800k tons of removal will come through Frontier wherein JPMorgan will give clients access to $25 million in carbon removal credits while pledging $50 million in purchases to offset its own carbon footprint. 

By willing to pay years in advance, big firms like JPMorgan seek to boost the CDR industry’s growth. They agree to pay hundreds of dollars for every carbon credit that can deliver a ton of removal to help reverse global warming while betting on the credits they need to achieve decarbonization goals. 

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