Lafarge Canada to Use Captured Carbon to Make Wax

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Lafarge, Canada’s largest cement and building solutions provider, inked a tri-party deal with Dimensional Energy and Svante to produce synthetic wax from captured carbon dioxide. 

The agreement will bring a demonstration of Dimensional Energy’s carbon utilization technology to Lafarge’s cement facility in Richmond, British Columbia. 

The deal is part of Lafarge’ 3-phased carbon capture project. Noting on the project, Stephanie Voysey from Lafarge Canada said:

“Carbon capture is an important lever in our net zero roadmap… If this pilot can be scaled to capture and use all facility emissions, it would be a first of its kind project for Lafarge and advance export and global adoption of this technology.”

Lafarge and Its 3-Phased Carbon Capture Project 

Cement production releases a lot of CO2. Studies say that about 621 kg of CO2 is produced for each metric ton of cement manufactured. 

Emissions from making cement stood at 1.7 billion metric tons of CO2 in 2021. Here’s how the sector’s CO2 emissions grow over the years.

Decarbonizing its cement production in Richmond is a major part of Lafarge’s commitment to sustainable development. By nature, producing cement is an energy-intensive process that leaves few areas for carbon reduction. 

But Lafarge is always finding ways to help decarbonize the sector and reach a net zero future. Capturing carbon and storing or using it is one of those ways.  

In 2019, Lafarge entered into a joint industry deal with Total and Svante that started its CO2MENT Project. It’s a demonstration of a carbon project that aims to capture 1 tonne per day (1TPD) of carbon emissions from Richmond’s cement plant.

The project involves 3 phases: 

Pre-treatment
Carbon Capture
Carbon Utilization  

Lafarge’s major project contribution is in kind-support via the provision of land, operational support, as well as utilities needed for the demonstration.

It also provides a use case for Svante’s patented carbon capture technology with its advanced adsorbent nanomaterial. The novel capture material acts as a sponge with a high CO2 absorbing ability

All throughout the project’s lifeline, the cement producer directed efforts to find an applicable end use for the captured gas. 

Since there’s no carbon sequestration and transport infrastructure available in southern BC, learning how to put the captured carbon into good use is crucial in Lafarge’s net zero journey in the region. 

Some key updates of the CO2MENT project are as follows:

Over 2,400 hours with 90%; 
CO2 recovery and a CO2 purity of 95%; and 
On-stream factor of more than 75%;

The data will be used in designing a study that will assess the project’s commercial feasibility to capture 1.5 million tonnes of CO2 per year. This initiative is part of Holcim circular economy efforts in the U.S. 

The new tri-party agreement brings the CO2MENT project into its phase 3.

Phase 3: Turning CO2 into Wax

Using CO2 to make products that have commercial value is a choice that Lafarge took in starting Phase 3. 

At this last stage of the project, Lafarge will turn the daily captured carbon to make about 1.5 barrels of synthetic wax every day. This goal would put the carbon utilization expertise of Dimensional Energy into action.

Dimensional Energy Carbon Utilization Process

As seen above, Dimensional Energy’s patented technology converts the captured CO2 with green hydrogen to syngas. This syngas will go through more processes to become liquid hydrocarbons – a premium grade wax. 

Aside from carbon neutral fuels, the waxes can also be used in making other products people use every day. Common examples include cosmetics, plastics, and lubricants, among others. 

Lafarge’s CO2 capture and utilization project will take advantage of Dimensional Energy technology. Once successful, the project will cement the common goal of the three companies involved – reduce carbon emissions. 

Commenting on their ground-breaking initiative, Dimensional Energy’s CEO, Jason Salfi noted that:

“Together, we will transform carbon emissions from one of the world’s most persistent problems of our time to one of our greatest assets to grow a circular economy in better harmony with nature.”

Salfi also said that as tech providers, they’re leveraging existing infrastructure in hard-to-abate sectors like cement to reduce CO2 emissions. 

Other industry players, like Rick Fox’s startup Partanna, for instance, are cutting their carbon footprint by replacing the use of Portland cement with a mixture of natural and recycled ingredients.

Lafarge Canada has pledged a monetary commitment to Dimensional Energy to promote the project’s success for the industry.

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Frontier Fund Closes $53M Carbon Removal Deal With Charm

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Frontier, a carbon removal fund backed by Google, Stripe, and other large companies, has closed one of the biggest carbon removal deals in history worth $53 million with Charm Industrial. 

Charm Industrial is a San Francisco-based carbon removal startup that takes waste biomass and transforms it into bio-oil, and then injects it deep underground to store permanently.

Frontier is a coalition backed by the tech giants aiming to spend about $1 billion on advanced buying of carbon removals. Its main goal is to speed up the development of carbon removal technologies and build strong future demand for them.

The $53 million that Charm will receive is in exchange for removing 112,000 tons of CO2 between 2024 and 2030.

Enabling Carbon Removal Startups to Scale

Legally, Frontier is a public benefit LLC wholly owned by Stripe, but is co-founded by other big tech companies including Meta, Shopify, McKinsey, Alphabet, and more. 

The coalition represents the growing interests of major corporations to ramp up the growth of the carbon removal industry. Its offtake deal with Charm is a legal agreement to buy future tons of CO2 removals at a set price.

Though the price per metric ton wasn’t disclosed, a rough estimation would make it into $473/t. Three years ago, Stripe paid Charm $600/t by removing and storing 416 mt of carbon.

Up until the Charm agreement, Frontier had committed only half a million dollars in pre-purchase deals with early-stage startups. But despite the small amount, the funding support helps carbon removal companies to speed up technological development. 

Frontier head, Nan Ransohoff, pointed out that some of these early companies will deliver tons of removals while others won’t. But that’s fine. Most of the carbon removals will come from Frontier’s offtake funding track, which will see more deals coming. 

Ransohoff further said that:

“Over the past three years, Charm has gone from concept to delivering thousands of tons in a relatively short period of time, which is a demonstration of great execution. This team is moving very quickly.”

How Does Charm Remove CO2?

Since it started operating in 2018, Charm managed to remove over 6,000 tons of carbon. The deal with Frontier will prompt Charm to rapidly ramp up its CO2 removal capacity. 

The carbon removal startup pioneers a novel way of removing and storing CO2 underground for good. It takes waste biomass like corn stalks, transforms it into boi-oil, and pumps it underground in EPA-regulated wells. 

What makes Charm’s process unique is how its removal works shown below. That’s through the process that the company’s CEO, Peter Reinhardt, describes as “half-assed gasification”. The gasification process involves pyrolysis – the heating of an organic material like in the absence of oxygen. 

Source: Charm Industrial website

The process produces bio-oil using a pyrolyzer machine that can fit into the back of a semi-trailer. This allows Charm to pull right up to farms and perform the process right at the edge of the fields. 

Reinhardt said that most of their sequestered bio-oil so far has been bought and not created by their own technology. But he believes that with the Frontier deal, they can scale up the process and build more pyrolyzers and mobile facilities. 

Frontier’s team of scientists and technical people will also help Charm and other carbon removal startups gain more traction. The $53M will cover the costs of Charm’s removal projects and the measuring, reporting and verifying (MRV) to ensure quality. 

Commercializing Carbon Removal

The race to net zero requires removing billions of tons of carbon each year by 2050. The carbon removal industry removes only a few thousand tons right now. And this makes offtake deals like Frontier very important to ensure the industry has the runway to take off.

Frontier is not alone in this race of commercializing the industry. A growing number of companies are willing to pay the high cost of removing and storing carbon to balance out their emissions.

Another group formed by Alphabet, Microsoft and Salesforce, called the First Movers Coalition, committed $500 million to removing CO2. The tech coalition aims to decarbonize industry and transport.

Other corporations are also supporting carbon removal initiatives to help the world reach net zero emissions by mid-century. 

Their carbon removal purchases are a part of the voluntary carbon market, where each metric ton of carbon removed earns one credit. 

Charm Industrial said it expects carbon removal prices to go down to $100/ton by 2040 from $600/ton today. The expected price is what many experts believe the industry needs to reach to commercialize and attract more buyers.                  

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US DOE Reveals 1st Winners of $2.25B Carbon Storage Program

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The U.S. Department of Energy (DOE) has opened a $2.25 billion funding program for carbon sequestration or CO2 capture and storage projects to more applicants after selecting the first batch of 9 winners with a $242 million funding round.

The $4.9B Funding from Bipartisan Infrastructure Law

In November 2021, President Joe Biden signed the Bipartisan Infrastructure Law, a once-in-a-generation investment to tackle the climate crisis. The law earmarked about $12 billion to carbon management, specifically to carbon capture, storage, and transportation of CO2. 

Under this law, the DOE revealed its $4.9 billion funding for 3 carbon management demonstration and deployment programs. These funding opportunities seek to slash emissions from power generation and sectors that are difficult to decarbonize like steel and cement. 

According to the Energy Secretary, Jennifer Granholm, the series of funding initiatives are crucial in meeting Biden’s goal to reach a net zero economy by 2050. 

The Department also launched four programs with $3.7 billion funding to help scale up the carbon dioxide removal industry. These include the $115 million prize awards to Direct Air Capture technologies to bolster different approaches to DAC. The program also includes building regional DAC hubs in the country. 

DOE’s $2.25B Program for Carbon Capture and Storage

One of the Department’s new funding opportunities is the $2.25 billion for the validation and testing of large-scale, commercial carbon storage projects. Qualifying projects should be capable of storing 50 million tonnes of CO2 and the Department just revealed the winning applicants. 

The agency picked 9 commercial carbon storage projects qualified for federal funding. These winning projects are found in the Midwest, West and on the Gulf Coast. 

The recipients include 4 higher education institutions, BP PLC subsidiary BP Corporation North America, and the Southern States Energy Board.

Pointing out that the funding wisely focuses on carbon storage projects, an executive from the Carbon Capture Coalition stated:

“The US has abundant, well-characterized carbon storage capacity that can safely and permanently store billions of tons of carbon dioxide emissions, but currently lacks the necessary infrastructure and capture facilities to fully utilize this potential”.

Indeed, the recent funding announcement will help address that infrastructure gap. 

Earlier this year, the DOE also rolled out $2.52 billion to fund 2 carbon capture initiatives. These are the “Carbon Capture Large-Scale Pilots” and “Carbon Capture Demonstration Projects Program” seeking to cut emissions from hard-to-abate industries. The main goal is to speed up and boost investment in technologies that capture, transport and store carbon.

All these funds for carbon capture and removal projects are part of the total of $62 billion dedicated by the bipartisan infrastructure law for DOE’s research, development, demonstration, and deployment of clean energy technologies. 

Expanding Carbon Capture and Storage 

Complementing the Bipartisan Infrastructure Law, the Congress expanded the tax credits for carbon capture in the 2022 Inflation Reduction Act. It awards polluters up to $85 for every metric ton of carbon captured and stored safely underground. 

As per DOE’s estimates, actions under the two laws will result in 40% emissions reduction against 2005 levels economy-wide.

The agency further said that the remaining funds for carbon storage are available under a broader scope. The funding program now includes early-stage development projects while expanding the definition of carbon storage to support more offshore projects. Project developers can apply under the program until July 6. 

The Department also selected 3 carbon transportation projects in Texas and Wyoming to receive funding from another program. Together, they’ll get a total of $9 million for engineering and design activities. 

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3M and Svante Join Forces to Produce Carbon Removal Products

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3M, a leading manufacturer and science company, has partnered with Svante Technologies, a carbon capture and removal firm known for its expertise in carbon capture and removal. Together, they aim to create Direct Air Capture (DAC) products, designed to capture carbon dioxide directly from the air and permanently remove it

The deal reaffirms the companies’ commitment to providing materials science-based solutions to reach net zero emissions and fight global warming. 

Scaling Up Supply of Carbon Capture and Removal Materials

3M has 120+ years of expertise in producing and supplying materials science-based solutions at unmatched scale. It manufactures a broad range of products, from building materials and adhesives to medical and cleaning supplies. 

The company brings that massive experience and expertise in the carbon dioxide removal (CDR) industry by working with Svante. An executive from 3M, Ray Eby, asserts the company’s commitment to scaling up climate tech solutions, saying that: 

“3M is committed to helping build a low-carbon economy… We are driven by a need to solve the world’s most pressing challenges. and our partnership with Svante to create innovative climate solutions is an exciting prospect for us.” 

Just like how the company tripled the supply of N95 respirators during the early days of COVID-19, 3M is as eager to scale the production of carbon removal materials over the next decade. Through its 51 tech platforms, 3M innovates and creates new technology capabilities to meet the growing needs of the industry.

This is important in meeting the demand for CDR, which climate scientists believe critical in achieving the Paris goal. CDR solutions include bioenergy combined with CCUS (BECCS) and direct air carbon capture with storage (DACCS or DAC). 

That said, the market for carbon removal is expanding rapidly. Investments came pouring in from large companies wanting to help early-stage CDR tech startups scale up and bring costs down. In fact, the industry has its own dedicated venture capital fund called Counteract, while government support reached billions of dollars. 

Joining the CDR supporters and investors, the venture capital arm of 3M, 3M Ventures, participated in Svante’s Series E fundraising. The said round raised $318 million to accelerate the manufacturing of Svante’s carbon capture and removal technology.

Capturing Millions of Tons of CO2

Svante manufactures solid sorbent-based filters and rotary contactor machines that capture large-scale carbon emissions for storage or further industrial use. Its filters are available for point-source capture from hydrogen, cement, steel, aluminum, pulp & paper plants, and refineries, and DAC applications.

Because of the broad range of markets Svante serves, the company’s CEO Claude Letourneau says Svante’s tech is applicable to 85% of the total carbon capture and removal market. By adding 3M into their global partners, it will further help Svante in capturing millions of tons of CO2 worldwide. 

In order to help meet that goal, 3M has to scale the production of DAC materials over the next few years. It will be the company’s first CDR products in the U.S. for Svante’s DAC applications. 

The joint development agreement between the companies focuses on developing and manufacturing carbon adsorbent technology for the carbon removal industry. This venture is part of 3M’s plans to invest about $1 billion to accelerate new environmental goals and one of them is to be carbon neutral by 2050.

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Methane Offsets Originator, Zefiro, Buys Plants and Goodwin

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Zefiro Methane Corporation, a private methane offsets originator, acquired a majority ownership stake in Plants & Goodwin (P&G), an oil well plugging company.

Led by executives from the former carbon market team at J.P. Morgan, Zefiro seeks to reduce methane emissions by plugging orphaned and abandoned oil and gas wells. This then enables the company to produce methane emission offsets, also known as carbon offset credits. 

P&G is a Pennsylvania-based provider of services to plug orphaned oil and gas wells for over 50 years.

Methane Emissions from Abandoned Wells 

Methane (CH4) is the second most abundant greenhouse gas (GHG) after carbon dioxide that’s responsible for about 20% of global emissions. This gas is at least 25x to over 80x more potent as CO2 at trapping heat in the atmosphere. 

Methane concentrations in the air have increased alarmingly since 2007. Scientists said that this rising CH4 emissions may be the biggest threat to keep global temperatures below 1.5C.

Recently, a NASA satellite revealed that Turkmenistan is one of the worst methane ‘super-emitters’ in the world.

The increasing methane pollution is largely because of human-related activities. And one such activity is abandoning oil and gas wells that are causing serious problems to the U.S. 

According to recent estimates, there are more than 4 million orphaned oil and gas wells in the U.S., spreading out across 26 states. Here’s the percentage share of orphaned oil and gas wells in Canada and the US, according to a study published in the American Chemical Society.

These abandoned, unplugged wells spew out methane that can greatly pollute the air that people breathe. The leaking methane is equal to burning over 16 million barrels of oil, per government estimates.

As such, the inactive wells pose as one of the country’s most pressing concerns in advancing a sustainable economic growth. In response, the Infrastructure Investment and Jobs Act 2022 specifically set aside almost $5 billion to help states plug abandoned wells. To date, all 26 states have applied for funding. 

Zefiro comes to the government’s aid by addressing the methane pollution from unplugged oil and gas wells. Its acquisition of P&G shows that commitment. 

In translating that commitment to reality, Zefiro’s Founder & Chairman, Talal Debs, remarked that: 

“Zefiro’s strategy is to integrate real (physical process) innovation with new forms of capital, through the ‘environmental’ credit markets; the result will be a new kind of enterprise. By enlisting veteran operators like Plants & Goodwin, we are taking the first big step to making our unique vision a reality.”

Zefiro’s Methane Emission Reductions and Carbon Credits

Acquiring Plants and Goodwin will position Zefiro as the leader in fixing the environmental and health problems left behind by the oil and gas companies that abandoned the wells, allowing them to emit methane for decades. 

P&G is a family-owned company that has been plugging wells for more than 5 decades. It is focusing on idle wells in shale and sandstone formations across the Appalachian Basin.

They said that their partnership with Zefiro is “a game-changer for finally bringing about a large-scale, nationwide solution to methane emissions from abandoned wells.”

Luke Plants, assuming the CEO role for P&G, further pointed out that with Zefiro, they’ll be among the first to tackle the problem and be a model for other basins across the U.S. 

Zefiro’s methane emission reductions efforts not only align with the industry’s goal of a greener future. The Vancouver-based company is also expanding the supply of carbon credits working as offsets crucial for achieving net zero targets. 

The company primarily trades in the voluntary carbon markets, believing that firms that go “above and beyond” mandated emission reductions bring a higher environmental benefit that aligns with their ESG policy.

How Does Zefiro Generate Carbon Credits?

Every project is unique because of the many variables of an abandoned oil well. But Zefiro’s projects generally follow the six major steps below as described in their website. 

Project Setup. Zefiro measures pre-plugging emissions and prepares the project document outlining emission baselines, project boundaries and activities. 
Engage Third-Party Verifying/Validating Body (VVB). Zefiro enlists a 3rd-party VVB to audit and certify each project, ensuring it meets all criteria for carbon credit issuance. The independent body needs to confirm that the project will indeed achieve the methane emission reductions it claims. 
Undertake Well Decommissioning. Zefiro will plug each well, ensuring that no emissions can escape by using advanced technologies and adhering to applicable standards and regulations. 
Final Emission Assessment. Once decommissioning is over, Zefiro will do the final assessment to make sure that all project deliverables are met. 
Issue Offsets. The applicable standards organization (e.g., Verra, American Carbon Registry, Gold Standard) issues the appropriate number of offsets. 
Retire Offsets. Offsets are retired or removed from circulation for GHG reductions claim toward a net zero goal or other use. Retirement happens in accordance with the program’s registry processes. Once retired, offsets are not transferable and can’t be used again for other environmental claims.

Zefiro will roll-out to different states, deploying staff to decommission wells nationwide. 

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Carbon Credits and the Future of Sustainable Business: Exploring Best Practices

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The trading of carbon credits can help entities and the world meet their climate goals by cutting carbon emissions and practicing sustainable business. While some companies have various means to get rid of their footprint, many simply don’t have any at their disposal. And so using carbon credits is a necessity for them.

But how can carbon credits help promote the best practices that ensure the future of sustainable business? How can they be instrumental in advancing both corporate sustainability and global sustainable development? 

This article will explain how by looking into best practices that can scale up the voluntary carbon market and help businesses achieve their climate change goals.

Companies Ally in Conquering Climate Change

The number of businesses pledging to help put an end to climate change by slashing their own GHG emissions continues to grow. Yet many of them find that they cannot fully get rid of their emissions, or even reduce them as fast as they may like. 

The challenge is particularly tough for entities with net zero emissions targets, meaning removing as much carbon as they emit. For them, it helps to use carbon credits to offset emissions they can’t eliminate by other means. 

Voluntary carbon credits, also known as carbon offsets, are bought by companies for reasons other than compliance. These market instruments help direct private financing to climate-related projects and initiatives that won’t otherwise be developed or take off. More importantly, these projects also offer added benefits beyond just carbon reduction like job creation and biodiversity conservation.

Carbon credits also have the potential to bring down the cost of emerging climate technologies by providing startups enough capital. And most importantly, this market tool can help drive investments to places where nature-based emissions reduction projects are most viable. 

How Can Carbon Credits Help Companies Reach Their Climate Goals?

Achieving climate goals seems to be the finish line among organizations these days. But what does it really mean?

Collectively, that means limiting the rise in global temperatures to 2.0°C above pre-industrial levels, and ideally 1.5°C. Putting that in context, it means cutting global GHG emissions by 50% of current levels by 2030 and bringing them to net zero by 2050. 

More and more businesses are aligning themselves with this global sustainable development agenda. In fact, the number of companies with net zero climate commitments doubled in less than a year – from 500 (2019) to 1,000 (2020).

Among those businesses, reducing carbon emissions to be carbon neutral or net zero has major limitations. For instance, a big part of the pollution of companies operating in the cement industry comes from processes they simply can’t just stop. 

So, how can they reduce their emissions without stopping their business operations? By buying carbon credits. 

Carbon credits work like permissions allowing holders the right to emit a certain amount of carbon under the compliance market. Within the VCM, carbon credits represent the corresponding quantity of carbon that has been reduced or removed by an initiative. 

Remember that each carbon credit is equal to one tonne of carbon removed or prevented from entering the atmosphere.

Carbon credits have been in use for years now, but their voluntary use has grown immensely only in recent years. As seen in the chart from Katusa Research, buyers have retired (claimed the impact of the credit) over 90 million tonnes of CO2 equivalents in 2020. 

And as global efforts to transition to low-carbon and sustainable practices intensify, demand for carbon credits will also grow. Based on industry estimates, annual global demand for carbon credits can go up to 1.5 to 2.0 gigatons of CO2 by 2030 and up to 7 to 13 GtCO2 by 2050.

That also means the VCM size can be between $30 billion and $50 billion by the end the decade, depending on various factors such as price. 

Source: McKinsey & Company

Per McKinsey analysis, the supply of carbon credits to meet such projected demand will come from these categories:

avoided nature loss (including deforestation); 
nature-based sequestration, such as reforestation; 
avoidance or reduction of emissions such as methane from landfills; and 
technology-based removal of carbon dioxide from the atmosphere.

While the future of sustainable business becomes possible through carbon credits, some challenges exist that may prevent VCM’s scale up. If not addressed fully, these roadblocks can bring down supply from 8-12 GtCO2 per year to 1-5 GtCO2.

Key challenges include:

Most nature-based supply of carbon credits is concentrated in few countries
Difficulty in attracting enough financing
Long lag times between capital raising and selling carbon credits
Carbon accounting and verification methods vary, making supply of high-quality carbon credits
Some confusions in the definition of the credits’ co-benefits (benefits beyond carbon reductions) 
Long lead times in verifying carbon credits quality, which is crucial to achieve market integrity
Other problems include unpredictable demand, low liquidity and limited data availability

Though these challenges are indeed daunting, they are not invincible. By adopting best practices in using and integrating carbon credits into climate change mitigation measures, the VCM can help secure the future of sustainable business. 

Best Practices to Scale Up the VCM

As we have demonstrated, carbon credits can help promote corporate sustainability by helping companies reach their climate goals. And as most of us know, large companies are the most guilty in dumping carbon into the air. 

As long as they are making efforts in cutting their carbon footprint and bringing it to net zero, they can still continue doing business sustainably. But what can these big businesses and other market players do to ensure that the market doesn’t wither but grow? 

Here are the top four ways that could further develop the VCM and scale it up for more carbon reductions.

Having Uniform Principles for Carbon Credit Definition and Verification

The market for voluntary carbon credits still lacks ample liquidity to transact efficient trading. What causes this is the fact that the credit attributes vary a lot, affected mostly by the project generating it. The carbon credit price depends on the specific project type and/or its location.

Each project also delivers a different set of benefits and added values, which value varies as well. This attribute makes the process of matching the buyer and seller quite difficult and time-consuming. 

But with uniform features that define or describe the credits, the match-making process would be easier. One of these features would be the quality of the credit. 

The recent release of the International Council for the VCM of its “Core Carbon Principles” is a good starting point for both suppliers and buyers to refer to. The principles provided offer a good reference in verifying the carbon reductions claim of the credits. 

This is also important when developing reference contracts of carbon credit deals and their corresponding trading prices on the exchanges. In this case, it would make it more efficient for the market to aggregate smaller supplies to match the larger bids of corporate buyers. 

Developing Flexible Trading and After-Trade Infrastructure

A well-functioning VCM requires a flexible trading infrastructure. That function is to facilitate high-volume listing and trading of contracts. In effect, this enables the establishment of structured financing for project developers.  

The top carbon exchanges often have this infrastructure in place, enabling them to support and help scape up the market. 

The same goes for post-trade infrastructure, such as registries and clearinghouses. They must support the creation of futures markets and provide the necessary counterparty default protection. 

Carbon registries, in particular, should be providing necessary services and facilitating the issuance of identification numbers for each project. 

These infrastructures can help promote transparency of data and information in the market, and so, increase trust among buyers and sellers alike. This is currently not the case in the VCM as access is limited, making tracking difficult. Issues in transparency are plaguing the market, putting some projects under query and further investigation. 

Analytics and reports that put together accessible reference data from various registries, like how APIs do, can help advance transparency. This startup that developed the first API for carbon credits seeks to address this task, aiming to improve transparency. 

Building Guidelines for the Correct Use of Credits

Though many companies use carbon credits to offset their emissions, they’re not the automatic option in reducing emissions. Some skeptics said that they deter businesses to offset their footprint instead of reducing them directly. Others argued that they become a tool for greenwashing – claiming to be eco-friendly though the business continue to emit more.

This is why there must be clear and robust principles governing the use of carbon credits to eliminate doubts. 

Specifically, offsetting should be an option for emissions that are too difficult to abate. They should not overtake other climate mitigation measures while ensuring more carbon reductions actually happen.

This best practice requires a business to disclose its carbon emissions first and create a baseline for it. From there, carbon reductions targets and strategies will follow. Only by doing so can the company know how much emissions it needs to offset and buy the corresponding credits. 

Safeguarding Integrity of the VCM

Same with transparency, the VCM is also facing the issue of integrity. The main culprit is the wide differences in the carbon credits’ nature, making them plausible for fraudulent transactions. 

One solution is to have a digital system in place that registers and verifies the credits authenticity before issuance. Verifiers must be able to monitor the project’s impact regularly to confirm their carbon reduction claims.  

That won’t just safeguard the integrity of the carbon credits but can also help developers in cutting down associated costs. Digitization translates to standardization that lowers issuance costs while improving offset credibility in corporate climate commitments. 

Ultimately, a governing body is critical to enhancing integrity by overseeing market players’ behavior and the overall market functions.  

In sum, businesses and other organizations can reduce their carbon footprint by employing clean energy technologies and sources. Still, many need carbon credits to complement their climate change mitigation efforts while aligning them with their corporate sustainability goals. 

By following the four best practices identified, a scaled up voluntary carbon credit market can help secure the future of sustainable business. 

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China’s CO2 Emissions Up 4% in Q1 2023, Hit a Record High

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China’s carbon dioxide (CO2) emissions grew 4% in the first quarter of 2023, hitting a record high and is projected to reach an all-time high this year. But the continued expansion of low-carbon energy will bring down the country’s emissions eventually.

The new analysis according to Carbon Brief shows that the rapid expansion in low-carbon energy can make the emissions to peak and decline if the post-Covid recovery plan works out. 

With China focusing on economic growth, the biggest CO2 emitter in the world’s footprint will likely to hit an all-time high in 2023. The country emitted over 10,000 million tonnes of CO2 in 2020, representing about 30% of the world’s carbon emissions. 

China’s Quarterly Carbon Emissions

Compared with a year earlier, China’s carbon emissions jump 4% in this year’s 1st quarter, according to the analysis. It exceeded the previous peak in emissions in the same quarter in 2021. 

Emissions are estimates from China’s National Bureau of Statistics data on production of fossil fuels and cement, China Customs data on imports and exports, and WIND Information data on changes in inventories.

As seen in the chart above, the red bar represents China’s carbon emissions for the first quarter of each year. The rise was due to the growing demand for fossil fuels, with increases in oil consumption (over 5%), coal (more than 3%), gas (over 4%), and cement production (4%). 

What Causes China’s Emissions to Rise?

The key reasons for the super-emitter’s increase in carbon emissions are the following, the analysis reveals:

Economic rebound post-Covid recovery
Financial stimulus measures
Weak hydropower generation 

Breaking down the emissions per sector, the biggest contributor to the increase was power generation, where coal-generated electricity grew by 2%. The coal-power output rose by 3.6% relative to the previous year’s quarter. 

Source: Carbon Brief

The poor hydropower production in China resulted in increased coal power use. Low rainfall and droughts caused the weak hydro output. 

The world’s second largest economy by GDP has been boosting its domestic coal power production since 2021 for energy security. It rose by 11% in 2022 but despite more domestic supply, coal import almost doubled in Q1 2023.

The reason for that is the lower quality of coal produced in the country – each tonne containing less energy.

In terms of electricity, demand grew by over 4% which accounts for about 80% of China’s total carbon emissions increase. This was largely due to the end of the country’s zero-Covid policy, meaning businesses and commercial operations resumed. 

For the same reason, transportation activities got back to normal, increasing the consumption of fossil fuels by more than 6%. Air travel rebounded intensely, in particular.

China Achieves Significant Energy Milestone

Despite increases in CO2 emissions, China managed to hit a meaningful milestone in generating power from clean or non-fossil sources. These include renewables and nuclear which exceeded 50% of the country’s installed power capacity in history. They overtook coal production capacity and other dirty sources of power. 

In particular, solar and wind power installation increased significantly both hitting a record high.

Solar installations grew by almost 3x the previous high of 13GW in the same quarter of 2022 – 34 GW. New wind power installations – 10.4GW – increased by 32%, another record for Q1 2023. The country beats its new wind and solar capacity 120GW target in 2022, achieving 125GW. 

A key element in China’s strategy to ramp up its wind and solar power generation is developing massive clean energy bases in its deserts, abandoned coal mines, and other unused lands. 

Those bases are being built in batches, the first two with 97GW and 200GW capacity will be completed by 2025. If installations in 2023 hit the country’s 160GW goal, 240GW annual capacity will be added in the next two years. 

China’s nuclear capacity also improved. 

Based on its current nuclear capacity (57GW) and ongoing construction (27GW), the super-emitter is on track to achieve its targets. That’s to have 30GW under construction and 70GW in operation by 2025. Two nuclear reactors have already begun construction and one started producing power this year. 

Demand for electricity is likely to increase this year in China, which will also push coal power production higher. However, the growing low-carbon supplies or energy from clean sources will try to match the demand growth in coal. 

Ultimately, when clean energy surpasses the annual increase in electricity demand, the power sector’s carbon emissions will peak. 

What Do China’s Emissions Look Like in 2023?

The current trends in the 1st quarter and industry estimates suggest that the largest  emitter’s footprint will rise this year. It will likely top the previous peak in 2021 as shown in the chart.

Source: Carbon Brief

The major reason for this outlook is the Chinese government’s pursuit of financial stimulus measures to bolster manufacturing capacity, energy production, and transport infrastructure. 

While increases in emissions vary per sector, overall energy demand will be up 3% in 2023. Taking into account the projected increase in low-carbon energy production, a 1% to 4% increase in China’s CO2 emissions will follow as fossil fuels make up the difference. 

A report from the World Bank said that China would need $17 trillion in investments to achieve its climate goals. These investments are in the power and transport sectors alone.

The super-emitter had rebooted its carbon scheme, the China Certified Emissions Reduction, early this year to reduce its carbon emissions. If the post-Covid recovery works as planned, a sustained expansion in clean energy production will drive emissions to peak and then eventually decline in the coming years. 

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Revolutionizing Textile Recycling with HTC

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A Virginia-based startup, Circ, has developed a unique hydrothermal processing technology for recycling blended textiles, like polyester-cotton blends. With fast fashion’s emissions and environmental impact becoming a significant concern, this innovation could play a crucial role in establishing a circular economy in the textile sector.

Fashion’s Emissions and Environmental Impact

The fashion industry is responsible for about 10% of annual global GHG emissions, and projections show that will increase over 50% by 2030.

Fashion’s environmental impact has increased considerably due to the rise of so-called “fast fashion”. This refers to the clothes mass produced at low cost with high-speed turnaround times to go with latest fashion trends. 

With fast fashion, trending clothes styles and designs are replicable and become available on retail and online stores quickly. This brings the perception that clothes are disposable and drives over consumption, especially by consumers in rich countries. 

Fast fashion is growing rapidly as people buy more clothes more often, and production has doubled within two decades. About 50 billion new items were made in 2000 and 20 years later, that number doubled to 100 billion.

On average, a person buys 60% more clothes than they did before and everybody in Europe is throwing 15 kg or 33 lb. of textiles every year. 

Unfortunately, less than a fifth of the discarded items get recycled. As a result, waste textiles from disposed garments are filling up landfills. Yet, demand for fast fashion clothes continues to grow, along with the sector’s harmful carbon emissions and water consumption.

Manufacturing clothes uses about 100 billion cubic meters of water every year. That’s equal to 4% of the global total freshwater withdrawal. 

These concerns are being addressed with the industry players showing interests in more sustainable practices. The European Union, in particular, is pushing for mandated textile waste collection by 2025. 

Circ’s Unique Textile Recycling Technology

More clothes go to recycling facilities; recycled polyester comprises 15% of the textile market in 2020, from 11% in 2010. The biggest challenge of recycling textile waste is the difficulty in doing it with blended fabrics. But Circ’s innovative recycling technology fixes this concern. 

The startup’s unique hydrothermal carbonization (HTC) processing technology offers a technical solution. It can separate blended textiles to recover the majority of the raw materials from waste to produce as-good-as-virgin materials that manufacturers can reuse to make new clothes.

This groundbreaking technology attracted €38 million in two funding rounds from large investors such as Bill Gates’s Breakthrough Energy Ventures, Zara’s Indite, and Patagonia’s Tin Shed Ventures. 

Recycling Poly-Cotton Blends with Circ’s System

Circ’s HCT process is a repurpose from biofuel production to textiles recycling. The firm is running a pilot recycling facility that can recycle several tonnes of waste textile daily. 

Right now, there’s no recycling method available that can recycle poly-cotton blended fabrics at commercial scale. While there’s an established process to break down pure polyester or PET for recycling purposes, working with poly-cotton blends is very difficult. 

But Circ’s system successfully separates polyester and cotton without damaging the materials, recovering about 90% from the waste textile. It uses hot water, pressure, and chemical solvents to recover both materials – called the hydrothermal process. 

By increasing the pH of hot water used in the HTC process, the polyester breaks down into two main monomers – terephthalic acid (PTA) and ethylene glycol (EG). As seen in the picture, cotton separates as a solid stream from the liquified polyester containing the PTA and EG. 

Then those monomers recombine to produce new material for making PET plastic. On the other end, Circ uses a solvent to dissolve the cotton and make cotton-like fibers.

The system’s major goal is to recover the cotton fibers without damaging them by depolymerizing the polyester.

Other Uses of HTC Processing 

Apart from fashion and textile recycling, the HTC process is also useful in other clean technology applications that further cut emissions. 

For instance, Mura Technology, is about to complete its first commercial-scale plastic recycling facility in Teesside, UK. The company is also using a hydrothermal process to recycle all types of plastic wastes to recover reusable monomers.

Research further shows that HTC processes are also applied in converting cotton textile waste into energy sources like clean solid fuel. 

Circ’s Next Steps

Circ is set to launch its first full-scale factory in 2025 that can process more than a thousand tonnes of waste textiles a week. The company aims to bring that capability to 10 billion pieces of clothes, representing 10% of the world’s apparel market.

The company faces market-based challenges, such as finding industrial buyers for its recycled materials. Its major investor fashion brands haven’t agreed yet to be the company’s customers. 

Circ also needs to form partnerships and collaborations with other players to create a circular economy for textiles. This is critical not just to curb emissions of fast fashion clothes but also the entire industry.

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First API for Carbon Credits, Cloverly, Raises $19M Series A Round

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Cloverly, an advanced digital infrastructure that launched the first API for carbon credits, raised $19 million in its Series A funding round led by Grotech Ventures.

With the aim to scale climate action, Cloverly serves 200+ enterprises worldwide across sectors that leverage its platform to manage their carbon credit operations. The Series A financing is for further development of the company’s infrastructure.

Participating in the round were leading investors such as Mission One Capital, New Climate Ventures, and CreativeCo Capital. Existing investors include Tech Square Ventures, Circadian Ventures, Knoll Ventures, SaaS Ventures, and Panoramic Ventures.  

Driving Impact at Scale in a Critical Industry 

To meet global emissions targets, the world has to remove an additional 10 billion tonnes of CO2 yearly by 2050. Carbon dioxide removal is crucial to address hard-to-abate emissions to reach net zero emissions. 

The voluntary carbon market (VCM) provides a critical means to drive urgent action by targeting unavoidable emissions today, along with the required emissions reductions to mitigate climate change.

The urgency to deal with climate change fuels the massive growth of the VCM. Expert industry estimates suggest that the market can reach $50 billion by 2030. Despite this, however, the VCM still lacks enough innovations necessary to drive impact at scale in this critical industry. 

Cloverly steps in to address concerns on market access, ease, trust, and transparency by launching the first API (Application Programming Interface) in the world for carbon credits. 

Sharing his insights on the role of the VCM in promoting critical climate action, Cloverly CEO Jason Rubottom said:

“We cannot wait – we need to act now. The importance of the voluntary carbon market demonstrates an unprecedented demand for solutions that allow both businesses and consumers to actively contribute to critical climate action. Cloverly is uniquely positioned to facilitate that engagement and this funding round represents that.”

The Atlanta-based startup, founded in 2018, grew to be one of the leading digital infrastructure powering the VCM. Its platform is used by global companies such as Salesforce, Visa, and American Express to power their climate action goals.

Cloverly Carbon Credit API Platform

Both corporate buyers of carbon credits and project suppliers can use Cloverly platform to scale their climate action and businesses. 

Buyers can directly buy quality carbon removal credits through the platform or embed the Cloverly technology into their own products, services, or supply chains. Purchasing carbon credits in the platform comes in three options:

Purchase offsets towards a specific carbon removal project
Invest in a custom carbon offset portfolio
Flexibility to purchase spot, forward, and offtake credits

Similarly, project suppliers can also leverage the Cloverly Marketplace and the supplier software that enables them to manage commercial operations such as inventory management and tracking of carbon credit sales.  

The new supplier platform offers credits from innovative suppliers such as Therm, KOKO Networks, and CarbonCure.

How Cloverly Platform Works in 3 Steps

1. Flexible Integrations

Cloverly offers flexible integration solutions to fit user product experience from fully integrated to plug-and-play options. Users can procure carbon credits as one-time purchases from the marketplace or as fractional credits to match the carbon emissions of any transaction. Full flexibility also means users can make Cloverly’s powerful climate action features feel like an inherent part of their solution.

2. Purchase High-quality Carbon Credits

Cloverly purchases and retires verified carbon removals and offsets in the amount needed to cover user’s carbon emissions. So whether it is one customer’s transaction or the entire business’s footprint, Cloverly can make any activity carbon neutral.

3. Reporting and Visibility

With each purchase, Cloverly produces a unique transaction receipt and certificate with the carbon credits purchased and the impact created. This helps the customer intuitively understand the real-world effects of their climate action.

On the Dashboard, Cloverly aggregates transactions and enables custom reporting to help users track their progress toward becoming climate-positive.

Addressing the Growing Market Demand

The $19 million financing brings Cloverly’s total fundraising to $21.1 million. 

The Series A financing will fund more development of Cloverly’s digital infrastructure for the voluntary carbon markets. These include the new supplier platform to help buyers, suppliers, and any other company to easily scale their climate impact. 

The new funds will also support growing Cloverly’s team and opening another headquarters in London to address global customer demand. 

One of the original lead investors in the company remarked that the tech startup’s growth is a “testament to their continued innovation to meet this critical market need.”

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