Warming Causes Significant Loss in Carbon Stored in Deep Soils

/in /by

A study by scientists at Lawrence Berkeley National Laboratory (Berkeley Lab) and the University of Zurich found that the decomposition of organic matters responsible for carbon sequestration in deep soil is significantly accelerated by global warming. 

The alarming results have serious impacts on carbon projects that rely on forests and soil as nature-based solutions to mitigate climate change. 

What is Soil Carbon Sequestration?

Soils are the largest natural sink for carbon. Soil carbon is a key component of the planet’s carbon cycle that maintains soil health and productivity. It comes in many forms such as decomposing organic matters. 

Soil carbon sequestration is a process by which carbon dioxide is removed from the atmosphere and stored in the soil. It involves the conversion of CO2 into organic matter that stays in the soil for decades or even centuries, which is crucial to mitigate climate change. 

During photosynthesis, plants store carbon in their cell walls and the soil, notably contributing to carbon sequestration. About 25% of the global carbon emissions are captured by forests, grasslands, and pasture land. 

This natural carbon sequestration has been going around for decades. So the amount of carbon in the soil may now have doubled. 50% of this soil carbon content resides at the deeper layer in subsoils – over 8 inches or 20 cm deep. 

But because of human activities such as deforestation and agriculture, global temperatures are heating up. CO2 emissions from these activities are increasing and account for about a fifth of global GHG emissions. 

In effect, even the deeper layers of soil are now warming up, too. The researchers confirmed this. Their finding shows that climate change will impact all areas of soil carbon and nutrient cycling.

Margaret Torn, the study’s senior author and a senior scientist in Berkeley Lab pointed out that:

“It also shows that in terms of carbon sequestration, there’s no silver bullet. If we want soil to sustain carbon sequestration in a warming world, we will need better soil management practices, which can mean minimal disturbance of soils during forest management and agriculture.”

The Alarming Finding: Major Loss of Carbon Sinks

In a previous study in 2021, Torn and her team discovered that warmer temperatures result in a huge drop in carbon stocks stored in deep soils. Their results show a 33% loss over 5 years. 

In this present study, researchers provided more evidence that higher temperatures cause a major drop in the soil organic carbon compounds produced by photosynthesis in plants. 

The team at the University of California’s Blodgett Forest Research Station did an experiment in Sierra Nevada mountains. They used vertical heating rods to warm one-meter-deep plots of soil by 4°C (7°F). This is the projected warming level by year 2100 under a high GHG emissions scenario. 

The scientists found that only 4.5 years of warming at this temperature resulted in major changes in carbon stocks at over 30 cm depth (12 inches) below the ground.  

The researchers also did a spectroscopic analysis at the University of Zurich to know which organic compounds are affected. Here are their shocking findings:

17% loss in lignin – a compound that gives plants their rigid structure
About 30% loss in cutin and suberin – waxy compounds in leaves, stems, and roots of the plants

Lastly, the team surprisingly found that there’s also a significant change in the amount of “pyrogenic carbon” in soil samples. This is one type of soil carbon from charred vegetation and other organic matters left by wildfires. 

Pyrogenic carbon is the most stable form of sequestered carbon in soils. It can remain in the soil for up to centuries. And the researchers found much less of it in the artificially heated deep soils. 

More remarkably, their results suggested that pyrogenic carbon can decompose as fast as other materials because of warming soil. This means that “when you put material deep into soil where it’s in contact with minerals and microbes, those natural systems will decompose the material over time,” Torn highlighted.

What All These Mean for Soil Carbon and Nature-Based Climate Solutions? 

While further research is necessary to solidify the findings of the study, they do have significant implications in using soil carbon sequestration to tackle climate change.

Nature-based climate solutions largely involve forest conservation or restoration projects that sequester carbon in trees and soil. They also include agricultural practices that reduce carbon emissions or improve soil carbon storage. 

Large companies and governments are investing heavily in this kind of natural carbon sequestration projects. 

Given the findings, initiatives involving forests and soil carbon capture may have to reconsider how they approach these mitigation efforts. More sustainable farming and soil management practices like cover cropping would be critical.  

Even the UN group tasked to finalize the international carbon trading systems may find the results relevant. They tend to consider nature-based solutions more reliable than technology in capturing CO2.

The researchers plan to resample the studied soil to know how nine years of heating affect the soil. They’ll be having a grassland warming experiment in Northern California and the whole-soil or deep-soil warming experiments for more knowledge.  

The post Warming Causes Significant Loss in Carbon Stored in Deep Soils appeared first on Carbon Credits.

Xpansiv Forms New Company Fiutur for Energy Transition Finance

/in /by

Xpansiv, the largest spot exchange for environmental commodities, revealed that it will spin out its finance data subsidiary, Fiutur, to deal with specific challenges and give better services to its energy transition participants.

Xpansiv runs the market infrastructure to rapidly scale the global energy transition. The environmental commodities it trades include carbon credits, renewable energy credits, and digital fuels. 

The company’s CEO, John Melby, asserted the role of environmental markets in the transition, saying that: 

“Environmental markets are a critical tool in accelerating the global energy transition and Xpansiv is focused on providing and operating the core registry and market infrastructure for these global markets to evolve.” 

The New Fiutur 

Xpansiv’s decision will allow its capital markets participants like banks as well as data providers to include environmental markets for more integrity across the capital lifecycle. 

The newly formed company, Fiutur, is a powerful financial data platform. It will have its own governance and capitalization, separate from Xpansiv and will run with more independence over time. 

Fiutur will have the following board of directors and executives:

Directors: Jamila Piracci, Tom Lewis, and Roseann Palmieri
Executive Chair – Will Stewart
CEO – Joe Madden
COO – Sam Teplitsky

The key reason that prompted the spin off of Fiutur is to help Xpansiv’s stakeholders to face specific challenges related to energy transition finance. 

The decision comes after Xpansiv’s move to license its global environmental numeric reference system called the Universal Project Numbers (UPN). This system has been tracking millions of environmental assets, together with its digital dMRV (measurement, reporting, and verification) technology. 

The referencing system links environmental market and sustainable finance data. It was licensed by T-REX, a financial infrastructure provider for fixed income investments, in April this year.

Fiùtur will further take advantage of Xpansiv’s UPN by incorporating roles-based data governance and ownership across multiple parties. This will result in certain and conclusive outcomes in finance, markets, and insurance. 

As the world transitions to clean energy in the coming years, trillions of dollars are necessary to fund it. 

In effect, market participants are requesting scalable solutions to emerging risks and opportunities. And so, the new company “is purpose built to help them do that”, says Fiutur CEO.

The post Xpansiv Forms New Company Fiutur for Energy Transition Finance appeared first on Carbon Credits.

Carbon Dioxide Removal (CDR) and Carbon Capture and Storage (CCS): A Primer

/in /by

If you’ve been keeping up with the net zero trend, then you’ve probably heard the terms Carbon Dioxide Removal (CDR) and Carbon Capture and Storage (CCS) thrown around before.

Both are important tools in the ongoing fight against climate change. What you might not know, however, is that they actually refer to two different processes.

Generally speaking, CDR refers to processes and technologies that remove carbon dioxide from the atmosphere. Some examples of this include afforestation and reforestation.

On the other hand, CCS differentiates itself from CDR with the term “capture”. This refers to the fact CCS methods generally capture CO2 from specific points of emission, also known as “point sources”. An example of CCS would be capturing the carbon dioxide emitted by a specific industrial factory.

With that said, CDR and CCS are two sides of the same coin – they simply differ in where they remove the CO2 from. For both processes, the end goal is the same: to remove carbon dioxide that would otherwise end up in the environment, and to get rid of it by storing or using it up.

Various Types of CDR and CCS

Both CDR and CCS are expected to scale up significantly from where they are now in the IEA’s Net Zero Emissions by 2050 Scenario. 

There are already a number of differing options for both. And we’ll go over some of the major ones in detail below.

For CDR, one of the most common types of projects is planting trees, which falls under either afforestation (planting trees where there weren’t trees before) or reforestation (planting trees where there used to be trees).

Trees and other types of vegetation store carbon through photosynthesis as they grow, making them fantastic natural carbon sinks.

Many of these forestation type projects qualify under the UNFCCC’s REDD+ framework. If you haven’t heard the acronym before, REDD+ stands for “Reducing Emissions from Deforestation and forest Degradation in developing countries”. The “+” includes activities that don’t directly involve planting trees such as forest management.

In a similar vein, some projects also aim to store carbon in the soil through special farming practices, or in certain types of ecosystems that work as excellent carbon sinks. Coastal wetlands and peat marshes are examples of such ecosystems that are particularly suited to sequestering carbon. As such, conserving and restoring these kinds of ecosystems also serves as a method of CDR.

Another offshoot of this type of CDR are blue carbon projects, named so for how they focus on ocean-based ecosystems. Coastal biomes such as tidal marshes and mangroves are thought to be more effective at removing carbon when compared to a forest of similar size on land.

Blue carbon ecosystems aren’t as well understood as traditional land-based ones though. But this is an exciting CDR field with lots of ongoing research.

Storing carbon in the above manners is collectively known as “biological sequestration”, where the carbon is stored in natural ecosystems.

Geological Carbon Sequestration

On the flip side of biological sequestration, we have “geological sequestration”, where the carbon is stored in deep rock formations. Much like how oil and gas deposits are usually found deep underground trapped between layers of impermeable rock, carbon can be stored the same way.

Types of CDR that allow for geological sequestration include technology-based solutions like Direct Air Capture (DAC) and Bioenergy with Carbon Capture and Storage (BECCS).

DAC involves directly removing CO2 from the air. BECCS involves capturing the carbon emissions from biological sources such as bioethanol or pulp and paper production. Both are critical to achieve the IPCC’s 1.5C scenario as shown above. 

Example of DAC process by Climeworks

While BECCS technically involves removing carbon from a point source and has CCS in its name, it blurs the line between CDR and CCS. The biomass used in BECCS processes absorbed CO2 from the atmosphere while it grew. In effect, BECCS technically removes carbon from the atmosphere as a net result.

For instance, the process of fermenting corn to turn it into bioethanol releases carbon dioxide as a by-product. However, that corn also absorbed CO2 from the atmosphere as it was growing.

As a result, any CO2 captured from the fermentation process was actually effectively removed from the atmosphere.

On the subject of CCS and net zero, the technologies involved are much more straightforward than with CDR.

As mentioned, CCS is mostly often performed on point sources as that’s where it’s most easy and cost-effective to do. Large industrial plants, fossil-fuel-based energy plants, and other such facilities with significant carbon emissions are all viable targets for CCS.

The different types of CCS technologies differ in exactly how they capture carbon from emissions streams. Examples include absorption through carbon dioxide scrubbers, chemical looping combustion, and oxyfuel combustion, to name a few.

The Role of CDR and CCS in the Push to Net Zero

Though the world continues on the path to net zero, the transition will take time – decades worth of it.

In the meantime, there will continue to be plenty of ongoing essential processes worldwide that are difficult to make net zero with current technology. Steelmaking and cement manufacturing are two such examples of industrial processes that are hard to completely eliminate carbon emissions from.

For these industries, CCS will serve as a perfect solution for abatement.

On top of this, CDR will help to reduce carbon either already in the atmosphere, or already emitted by sources that are difficult to capture emissions from.

CDR and CCS are both key parts of our efforts to mitigate climate change. But they can’t fully replace the net zero transition.

Geological analysis has estimated that the world had a tremendous amount of CO2 storage capacity through geological sequestration. Yet, not all of this capacity is in accessible locations, or even cost-effective enough to use.

And the fact that there exist industries where it’s difficult to completely eliminate carbon emissions, as previously discussed, means that it’s even more important to remove other sources of carbon dioxide wherever possible.

Still, both CDR and CCS will play major roles globally as we continue on our 2050 net zero pathway. Expect to see heightened focus on both in the years to come as the fight against climate change progresses.

The post Carbon Dioxide Removal (CDR) and Carbon Capture and Storage (CCS): A Primer appeared first on Carbon Credits.

Shell’s Strategic Shift: Balancing Carbon Reduction and Investor Confidence

/in /by

In a strategic shift that startled the energy sector, Royal Dutch Shell PLC announced plans to maintain its current level of oil production until the end of the decade. It’s a major shift from its previous commitment to reduce oil production by 1-2% annually until 2030. 

The announcement came as part of a larger suite of decisions aimed at increasing investor confidence, making the business more efficient, and aligning operations with Shell’s long-term carbon reduction goals.

Shell’s new CEO, Wael Sawan, justified this unexpected change by pointing to the company’s significant reduction in oil production over the past three years. 

In a rapid operational pivot, Shell managed to reduce oil production from 1.9 million barrels per day in 2019 to 1.5 million in 2022. This achievement effectively met its 2030 reduction target eight years ahead of schedule. 

This impressive reduction was due to selling oil fields to others who continue to extract fossil fuels from these sites.

Despite the shift, Sawan has taken steps to reassure investors about the financial health and growth potential of the company. Shell plans to reduce capital spending in 2024 and 2025 to $22-$25 billion a year. It’s down from a planned $23bn-$27bn in 2023. 

Additionally, the company intends to cut group-wide annual operating costs by $2bn-$3bn by the end of 2025. These cuts come as part of a larger plan to simplify operations and close the valuation gap that separates Shell from its US rivals.

Shell Investor Appetite and Satisfaction: Dividend Hike

Investors, it seems, have more than just cost reductions to look forward to. 

The company has announced a 15% rise in its dividend per share from the second quarter of 2023. Dividends are set to increase to 30-40% of cash flow from operations. Moreover, the company also plans to return at least $5bn to shareholders by buying back their shares in the second half of this year. 

This announcement comes on the heels of Shell’s nearly $1.7bn profit increase in 2022, driven by rising energy prices.

Net Zero Goals Remain Firm 

Despite the move to maintain oil production levels, Shell maintains a firm commitment to its net zero emissions target. The energy giant intends to grow its gas business and allocate about 20% of its group spending toward clean energy technologies, including hydrogen, biofuels, and vehicle charging.

Sawan emphasized the need to develop scalable and profitable models that can drive the decarbonization of the global energy system.

In its 2023 press release, Shell clarified that its operating plans, which are updated yearly, currently reflect a 10-year forecast. These plans take into account the current economic environment and reasonable projections for the next decade. 

However, they do not yet incorporate the company’s 2050 net zero emissions target and 2035 Net Carbon Intensity (NCI) target. That’s because these goals are outside of the current planning period. Shell expressed a readiness to adapt its operating plans as society moves towards net zero emissions. At the same time, acknowledges the significant risk if society fails to achieve net zero emissions by 2050.

Shell’s strategy of balancing carbon reduction, production goals, and shareholder satisfaction marks an important turning point in the company’s approach to navigating the energy transition.

Despite the unexpected change in its oil production strategy, Shell has shown that it remains committed to addressing climate change while simultaneously maintaining investor confidence. By prioritizing both environmental responsibility and shareholder value, Shell is setting a precedent for the energy industry. 

The strategic shift emphasizes that the transition to a low-carbon future need not come at the expense of investor confidence.

Leading by Example

Wael Sawan, in his statement, expressed Shell’s commitment to the energy transition, saying,

“We are investing to provide the secure energy customers need today and for a long time to come, while transforming Shell to win in a low-carbon future“.

He further emphasized the need for “performance, discipline, and simplification” as the guiding principles for Shell’s capital allocation strategies.

Shell’s ambitious plans include continued investment in profitable business models, including carbon reductions, that are scalable to impact energy decarbonization. This strategic approach showcases the company’s commitment to taking part in the global transition to sustainable and environmentally responsible energy sources.

The energy giant’s ability to balance investor interests with environmental commitments could serve as a template for the industry. Its recent strategy to commit both to sustainability and shareholders signals a possible path forward for the energy sector.

The post Shell’s Strategic Shift: Balancing Carbon Reduction and Investor Confidence appeared first on Carbon Credits.

Global Team Develops World’s First “Coal-to-Clean” Carbon Credit Program

/in /by

A consortium of global experts, Coal to Clean Credit Initiative (CCCI), is developing a world-first “coal-to-clean” carbon credit program that incentivizes the transition away from coal-fired power plants to renewable energy in emerging economies. 

The group includes the Rockefeller Foundation, Global Energy Alliance for People and Planet (GEAPP), with support from South Pole, Climate Policy Initiative (CPI), and Rocky Mountain Institute (RMI).

The new carbon credits under development will be called coal-to-clean credits.

What are Coal-to-Clean Credits?

As of July 2022, the total number of coal power plants operating globally is around 2,195, according to Statista. They accounted for over a third of total electricity generation.

China, which accounts for over 50% of global coal electricity generation, has the most coal-fired power stations worldwide – 1,118. That number is about 4x the total power plants in India, which came second in ranking. 

Many of those plants have no financial incentives to retire early, allowing them to emit more CO2. In fact, coal-fired power generation reached an all-time high in 2021, also pushing emissions to record levels. 

Power stations in China alone reached a record high of 8 billion metric tons of CO2 in the same year. These trends don’t align with the Net Zero Emissions by 2050 scenario shown below. It calls for about 9% annual reduction in unabated coal-fired generation between 2022 and 2030. 

Annual change in CO2 emissions and generation from unabated coal-fired power plants in the Net Zero Scenario, 2015-2030

Source: International Energy Agency website

Unfortunately, more than 90% of the coal power plants today are protected from competition either because of regulation or long-term contracts. Also, 40 countries pledged to phase out their coal-fired power plants during the climate conference, COP26, in 2021. 

But the 3 giant economies owning the most operational stations didn’t agree to the terms of phase-out.

To address these concerns, the CCCI is working on a methodology to develop a world-first approach to speed up the phase-out of coal power plants. The goal is also to provide financial incentives for the owners to partially or fully replace those with clean power. 

The revenue from selling the CCCI’s “coal-to-clean” carbon credits will incentivize plant owners to invest in renewable energy. The funds will also help the affected workers and communities during the transition.

The consortium devised a detailed concept for its new carbon credits. They sought technical input from industry experts and identified real-world examples most suited for generating the credits.

The ultimate goal of creating the coal-to-clean credits is to avoid tens of millions of tons of CO2 emissions from coal. 

And that’s possible for just one plant if it’s “retired and replaced by cleaner power decades ahead of its planned closure”, says Joseph Curtin, Managing Director at The Rockefeller Foundation. He further points out that:

‘’If we are to avoid the threat of over 2 degrees Celsius of global warming, we must provide a credible pathway for coal plants in emerging economies to transition sooner.”

CCCI’s Approach to Coal Phase-out

The CCCI’s approach to early coal phase-out follows a just transition as it will be in partnership with local communities for every project. The initiative will ensure that affected communities have a crucial role to play during the transition.

The aim is that CCCI will set a new benchmark for carbon-financed projects while ramping up the global coal-to-clean transition. To do that, the group will provide a nearer-term opportunity at the project level while aligning with jurisdictional methods and systems of decarbonization. 

The team is aware that coal plants are national assets integrated within a country’s power system. So, retiring them earlier than planned needs careful consideration and talks with the authorities. 

In this case, CCCI explores a unique way in mobilizing finance via carbon credits to achieve its goal. The alliance will also consider integration of their credits with existing and future compliance and voluntary carbon markets. 

Doing so allows them to complement other carbon market and climate finance initiatives. They also support broader carbon market improvement by growing the supply of high-integrity carbon credits with clear standards for buyers.  

Who Leads the CCCI? 

The Global Energy Alliance for People and Planet (GEAPP) leads the CCCI. GEAPP is an alliance of philanthropy, governments in emerging and developed economies, and technology, policy, and financing partners. Their mission is to enable emerging economies to shift to clean energy.

The Rockefeller Foundation, which also focuses on scaling renewable energy for all, joins GEAPP, along with their implementing partner South Pole. The group is further supported by technical experts from CPI and RMI. 

Altogether, the team ensures that CCCI’s methodology meets the highest level of environmental integrity and technical best practice. 

Currently, they’re able to close a high-level deal with the government of Indonesia and have started scoping work in Vietnam and South Africa. In these regions, the cost of renewable power undercutting fossil fuels in 2030 will bring over 20 million jobs. 

The CCCI will start its consultative process to develop its coal-to-clean carbon credit methodology this month. In the coming months, the group will continue to work with industry experts in developing its unique approach to coal-to-renewable projects. 

Carbon standards, international finance institutions, and other organizations dealing with financial mechanisms are welcome to engage with the team.

The CCCI aims to start making deals earliest in 2024 and use the program for many plants this decade. The team will present its program at this year’s United Nations Climate Change Conference (COP28) in Dubai in November.

The post Global Team Develops World’s First “Coal-to-Clean” Carbon Credit Program appeared first on Carbon Credits.

Rivian Aims to Generate Carbon Credits from Home EV Charging

/in /by

California-based EV startup Rivian hoped to earn carbon credits for the chargers powering its electric trucks and SUVs, including those found in the homes of its customers, which raised questions about who should own the credits. 

The popular EV maker claiming carbon credits for home chargers received big disagreements from market experts, MIT reports. It particularly raises concerns on who has the right to claim the climate impact of using clean technologies like EVs. Should it be the manufacturing company or the buyer?

Speeding Up the Move to Carbon-Free Transport

Rivian has received outstanding reviews both from customers and automotive critics for its high-end electric pickups (R1T) and SUVs (R1S). They’re praising the EV’s power, design, and luxury features. 

Last year, Rivian applied to Verra to earn carbon credits for the carbon emission reductions through the use of its chargers. The EV startup stated that it “retains all environmental attributes” (or carbon credits) from the use of its EV chargers. These credits are tradable in carbon markets and bought by entities looking to offset their own carbon footprint. 

Rivian’s project proposal with Verra specifically includes these items:

Adventure Networks
Waypoint chargers (bought by 3rd-party site hosts)
Residential or home chargers located in the U.S.

The EV carmaker clearly said in the documents that they have the “sole and exclusive” rights to the carbon credits generated by their charging network. That means they have absolute discretion to transfer, sell, or hold those credits as they see fit. 

Rivian’s electric cars come with portable wall chargers that are compatible with standard outlets. By displacing fossil fueled vehicles, the company’s charging network can cut carbon emissions. 

They said that their charging infrastructure can cut CO2 emissions by 200,000 tonnes yearly all throughout the project’s 7-year period. Each tonne of reduced emission produces one carbon credit. 

Andrew Peterman, Rivian’s director of renewable energy, noted that this program is crucial in transitioning to clean transportation, saying that:

“Alternative revenue sources from programs like this not only make the scaled transition to clean electric transportation possible (and at the necessary speed) but enable companies like Rivian to do so while generating a greater positive impact for communities, conservation, and the climate.”

In a separate study, researchers found that charging 1 million EVs at an optimized time delivers carbon emissions savings equal to taking up to 80,000 fossil fuel-powered vehicles off the road.

However, Rivian’s claim was met with critics – especially on “additionality” concerns. 

Meeting the Criteria for Reliable Carbon Credits 

Not all carbon credits are made equal. The best and credible carbon credits must meet a set of criteria and one of them is additionality. 

A carbon credit becomes additional if it delivers climate impact that wouldn’t happen without the revenue from selling the credit. But if the carbon reductions are going to happen anyway, even without the revenue from the credits, then they’re not additional. 

Now, applying that additionality to Rivian’s EV charging network, do they deserve to earn carbon credits for it?

Some say they don’t because of the factors that are driving the growth of EVs and their charging infrastructure. In particular, these include more policy support and the current rising trends for EVs. 

As per market estimates, EVs will make up over 50% of new passenger car sales in the US by 2030. And it’s not just in the US because historic EV sales are also soaring globally as shown in the chart below.

Others are also skeptical of Rivian’s claim to cover residential chargers in their Verra carbon credit proposal. 

In that case, the company is assuming that the EV chargers won’t be installed without the funds from carbon credits. Not to mention the fact that it’s the customers who pay for the chargers themselves and they can decide to either charge at their homes or not, regardless of the credit revenue.  

So for critics, it seems not right that Rivian takes ownership of the credits that customers can independently produce. As one skeptic puts it, customers buy the EV, pay for the charger, and pay for the power to charge it. But then others take the credits?

Commenting on these questions, Peterman said that the additional revenues from selling carbon credits will help speed up the deployment of clean renewable EV charging solutions. He further added that the extra funds also help promote more access to and more affordable home charging solutions. And that’s even more important in states or locations where there are limited utility incentives. 

Peterman also stressed that Rivian is not using carbon offset credits to meet its own climate goals. 

According to 3Degrees, the climate firm that made Rivian’s proposal to Verra, the additional revenue will enable the carmaker to pass on cost reductions to EV owners through lower costs of EV chargers. The climate solution provider also said that “successful project validation and verification is not guaranteed” so the critics come too early.

Rivian’s Carbon Credits from EV Chargers Under Review

Verra, the world’s largest carbon credits certifier and issuer, is still in the process of reviewing Rivian’s project proposal. So there are no carbon credits issued or sold yet. 

In 2018, Verra published a methodology on how entities become eligible to generate carbon credits for reducing emissions through EV charging systems. Since then, the nonprofit organization has approved projects and issued the corresponding credits. But some proposals remain under review, including Rivian’s.

Verra emphasized that for a project to be approved, it has to meet safeguards to be additional, including:

Below 5% of the maximum adoption potential for EV charging system’s penetration level
Expansion of EV chargers is not mandated by government regulations

With that, Rivian’s proposal does not cover EV chargers in states where existing government crediting programs are in place. So the EV maker didn’t include Oregon and California, for instance. 

From the point of view of a Rivian SUV owner, the issuance of carbon credits seems to be questionable if it doesn’t incentivize people (to use EVs and install home chargers). He said that he will charge his car at home, whether or not he buys a charger from Rivian. 

But he also stressed that EVs are a good alternative to gas-powered cars. They emit less pollution and cost much less to drive – $30 for electric power vs. $100 for gas. So, he is for carbon credits that make the shift to electric cars more possible. 

The post Rivian Aims to Generate Carbon Credits from Home EV Charging appeared first on Carbon Credits.

Meta to Buy Almost 7 Million Carbon Credits from Aspiration

/in /by

Tech giant Meta inked a 6.75 million carbon credits deal with a global climate finance firm Aspiration Partners to ramp up nature-based carbon removal solutions.

Meta has been investing into carbon removal initiatives as part of its goal to reach net zero emissions in 2030. That goal covers the company’s entire value chain which aligns with the Science-Based Targets initiative (SBTi) standards. 

For over a decade, Aspiration has been developing innovative carbon removal solutions to provide high-quality nature-based carbon credits for companies.

Removing 7 Million Tonnes of Carbon

Under their deal, Meta agreed to purchase in advance almost 7 million (6.75m) tonnes of CDR credits from Aspiration. The delivery of the credits will be within the 8-year period from 2027 to 2035.

The credits will be from various carbon projects managed by Aspiration involving nature-based climate solutions. These include all sorts of ecosystem restoration such as native reforestation, agroforestry, and sustainable agriculture practices. 

For Meta’s head of carbon removal program, Tracy Johns, carbon credits are one of the ways for the company to achieve its ambitious net zero goals. She particularly highlighted that:

“Through our carefully selected partnerships and projects like this carbon credit purchase with Aspiration, we aim to manage and minimize our environmental impact while accelerating our path to net zero in a responsible and scalable manner.”

Meta picked Aspiration for this particular deal because of the latter’s high standard in evaluating natural carbon removal solutions. Aspiration ensures that the carbon projects it supports are high-quality with verifiable carbon removal credits. 

To achieve that, the California-based sustainability firm requires projects to have environmental and social benefits. The company follows strict criteria for quality, legitimacy, and accountability by partnering with top-tier project developers and independent verifiers. 

At a glance, here’s Aspiration’s approach to delivering carbon credits:

Source: Aspiration Partners

At the end of the process, the carbon removal credits created by the projects are transparent, verifiable, real, and lasting, Aspiration says. 

Strategic Deals for Bigger Climate Actions

Pointing out the importance of their strategic carbon credit partnership, Olivia Albrecht, CEO at Aspiration, remarked:

“Many of these projects wouldn’t be able to get off the ground without this type of corporate commitment, which illustrates how companies can amplify their efforts and make a more significant impact on global climate goals.”

The deal with Aspiration is just one of the many climate commitments of Meta. 

Apart from backing up nature-based carbon removal projects, Meta is also helping expand other removal capabilities globally. Last year, it collectively committed around $1 billion for developing technology-based carbon removals alongside Stripe, Shopify, McKinsey, and Google. 

Both natural and technological carbon removal solutions are crucial in meeting the world’s net zero emissions by 2050 target. The IPCC has been sure of that. But the recent intention of the United Nations hinted that they find nature-based carbon removals more favorable. 

In a note, the UN panel stated that technology-based carbon removals “do not contribute to sustainable development, and do not contribute to reducing the global mitigation costs.” This shocked the early rising carbon removal industry, but this has yet to be finally decided by the UN body. 

The recent partnership between Meta and Aspiration shows the scale at which companies consider nature-based carbon credits as part of their climate and sustainability roadmaps. 

 

The post Meta to Buy Almost 7 Million Carbon Credits from Aspiration appeared first on Carbon Credits.

Will Canadian Wildfires Break the World’s Carbon Budget?

/in /by

Hotter, drier conditions due to increasing greenhouse gas pollution or climate change, make wildfires like the current Canadian ones more common in forests and other temperate zones in the planet. 

Wildfires are common but the fires raging in Canada are not. What’s more concerning is that the series of Canadian wildfires happened very early in the year and the burned area is almost what one can expect by the end of the fire season. Most of the wildfires often occur in late July or August, and even early September. 

Over 100 million Americans from the Canadian border down to South Carolina are facing air quality alerts. 

Canadian Wildfires Breaking Records

Starting the fire season on record, Canadian wildfires have burned over 9 million acres so far this year. That’s about the size of Connecticut and Massachusetts combined. 

Over 400 fires are currently spewing smoke into the atmosphere across the country. And more than 200 of them are getting out of control of the firefighters’ hands. 

Hot and dry weather conditions made forests across Canada fire-hungry. The fires started out west in Alberta and British Columbia, which got worse by a major heat increase in May. Then they crawled farther east in Nova Scotia and Quebec where many people were ordered by authorities to evacuate.

According to a fire analyst with Natural Resources Canada, the record-setting wildfires are getting close to about halfway to the country’s largest fire year in 1989 that destroyed Manitoba. The researcher further said that Canadians still have a few months of fire season left to watch out. 

Canada’s Natural Resources is forecasting potential behavior of fires using various standard metrics. The map below shows the estimations by fire managers of how hard it would be to control the fire. Red means highest fire intensity while blue represents lowest.

Head Fire Intensity (HFI) is the predicted intensity, or energy output, of the fire at the front or head of the fire. It is measured in kilowatts per meter of fire front and is based on the Rate of Spread and the Total Fuel Consumption.

Air Quality Suffers

Analysis of the never-before seen Canadian wildfires found that smoke billowing from the blazes caused not only Canadians but also Americans to suffer the worst day ever of exposure to toxic air pollution since 2006. 

The orange smoke blankets New York, exposing residents to levels of pollution over 5x above the national air quality standard. The smoky haze could last for several more days as smoke continues to pour from widespread blazes in Quebec.

Researchers said that Americans were exposed to 27.5 micrograms per cubic meter of small particulate matter found in plumes of smoke. If inhaled, the very tiny debris called PM2.5 can cause various health problems and worse, deaths. 

Canadian cities are also suffering from air quality health issues.

People in the cities of Saskatoon and Edmonton are particularly at high risk of inhaling unhealthy air polluted by wildfire smokes. Six cities are at moderate risk including Toronto and Regina, while the rest are under safe air quality levels. 

What Do Wildfires Mean for Net Zero?

The hazy smokes from Canadian wildfires are sending a clear message that the world has to take climate action seriously. And that should be in many more ways than one. 

Science has also made it clear that there’s a direct link between climate change and intensifying wildfires. That’s because weather conditions affect fire behavior. When temperature goes up, the relative humidity goes down which is an ideal condition for fire to flare up.

Thus, hotter temperatures impact how long, how huge, and how damaging fire seasons are.

But what role do wildfires have in the planet’s quest to net zero? Huge. 

Reducing carbon emissions to zero or switching to an electric car won’t stop a wildfire from burning. But the alarming wildfires burning Canadian forests offer strong evidence that companies and organizations need to intensify efforts in curbing carbon emissions. 

In general, corporations with net zero pledges use various means to reduce their air-polluting footprint. Most levers must be designed to actual carbon emission reductions. Any remaining or unavoidable emissions are compensated through carbon credits, also known as carbon offsets. 

Majority of the nature-based carbon credits bought by companies to count toward their net zero targets come from forest projects. Forest carbon credits are popular among large companies looking to offset their hard-to-abate pollution. Each credit represents one tonne of carbon captured by standing trees in the forests. 

Canada’s boreal forests store a big amount of carbon – about 208 billion tons of CO2, or 11% of the world’s total. Unfortunately, trees do burn, releasing the stored carbon into the atmosphere. 

Estimates suggest that wildfires in Canadian boreal forests will increase by 150% by 2050. In the U.S. forests, that would be 169%.

Source: Union of Concerned Scientists website

The record-breaking 2021 boreal wildfires emitted almost 2 billion tonnes of CO2, or a whopping 23% of all the carbon emissions by wildfires worldwide. 

These fires will further impact global warming as GHG emissions have reached an all-time high, and the super tight “carbon budget”. This budget refers to the amount of CO2 that the world can still release if it has to stay within the critical 1.5C warming threshold. 

To date, the planet only has about 250 billion tonnes of CO2 left to burn. Few years back, that’s 500 billion and if the current frequency and intensity of wildfires continue, that budget will run out well before this decade ends. 

That means efforts and solutions are a must to limit or control fires from breaking out in carbon-rich forests.  

While nobody can prevent all wildfires from breaking out, managing forests either by paying landowners or a team of people to avoid future fires like the Canadian ones is crucial to stay within the carbon budget and reach net zero by mid-century. 

The post Will Canadian Wildfires Break the World’s Carbon Budget? appeared first on Carbon Credits.

The Collapse of NGEO Carbon Prices: An In-depth Analysis

/in /by

The voluntary carbon market (VCM) has been a significant tool for companies to achieve net zero, with carbon credits playing a key role.

To fully appreciate the implications of the sudden downturn in prices, particularly in NGEO (Nature-Based Global Emissions Offsets) prices, it’s essential to understand the differences between the various types of carbon offsets available in the voluntary market.

In this market, three primary types of offsets are traded – NGEO, GEO (General Emissions Offsets), and CGEO (Certified Global Emissions Offsets).

NGEOs are carbon credits generated by projects that reduce, remove, or prevent carbon emissions through nature-based solutions. Examples include forest conservation or restoration projects that sequester carbon in trees and soil, or agricultural practices that reduce emissions or enhance carbon storage.
GEOs, on the other hand, represent a broader category of offsets that might include nature-based solutions. But they also include renewable energy projects, methane capture from landfills, or energy efficiency initiatives.
Lastly, CGEOs are a type of carbon offset that is third-party verified to certain standards. This verification offers an extra layer of assurance to buyers about the quality and legitimacy of the emission reductions.

Note: You can find up-to-date carbon prices right here.

The Never-Ending Cliff: Voluntary Market Carbon Prices in 2023

In the voluntary carbon market, nature-based solutions such as those represented by NGEOs have been highly valued. They often trade at a premium due to the additional co-benefits they bring, like biodiversity protection and local community development.

While the prices of all voluntary market carbon offsets – NGEO, GEO, and CGEO – have taken a beating, the decline in NGEO prices stands out due to the premium they were trading at over the other offsets last year.

Nature-based carbon and biodiversity credits offer significant benefits that technology-based or other carbon credits can’t provide.

There’s a reason why nature-based solutions are the largest segment of the voluntary carbon markets, accounting for 45% of all credits last year.

Reasons Behind Carbon Price Drops This Year

There were several reasons behind this sudden drop in carbon offset prices.

One of the main catalysts behind this downward trend was the tough macroeconomic environment, which led to stagnation on the demand side in late 2022.

According to the latest Google Sustainability Survey of 1,476 top-level executives at global organizations, 33% of executives reported cuts in their sustainability initiatives due to economic conditions.

As a result, credit retirements were flat for the first time in five years:

Another source of downward pressure on carbon prices was the poor outcome for the voluntary carbon markets at COP27.

While there’s some progress on Article 6, the conference failed to fully iron out the details of the intergovernmental carbon credit trading system that the Paris Agreement sets out.

This lack of progress has led to some uncertainty from corporations regarding the quality and integrity of credits on the markets. It also brought doubts on the acceptable proportion of carbon offset credits in their net zero plans.

Finally, increased public and media scrutiny – particularly, claims of “greenwashing” and the growing countertrend of “greenhushing” – continue to discourage corporations from decisive action on their decarbonization initiatives.

Combined, all these factors together have led to sustained downward price pressure on carbon credit prices well into 2023. 

How Carbon Pricing Affected Stocks and Companies

This unexpected downturn has sent ripples throughout the carbon market, affecting companies such as Carbon Streaming and Base Carbon.

Carbon Streaming Corporation, an early mover in the carbon credit space, was hit particularly hard. Its stock prices were declining in the wake of the NGEO price drop.

The firm’s diverse portfolio of 21 projects in 12 different countries. These include the Rimba Raya Biodiversity Project in Indonesia, couldn’t shield it from the market-wide effects.

Similarly, Base Carbon, a firm involved in financing carbon projects, has experienced setbacks due to the price collapse.

The company had committed USD $29.6 million for projects in Rwanda and Vietnam. They, too, now face uncertainty in the wake of falling carbon prices.

On the other hand, DevvStream, a more recently listed company providing funds for green projects in exchange for carbon credit rights, hasn’t felt the repercussions as hard.

Its innovative use of a blockchain-based ESG platform and ambitious plans to manage and track carbon credits has allowed it to combat falling carbon credit prices on a better footing.

This unforeseen collapse in NGEO prices underscores the volatility of the carbon market and the inherent risks involved. However, it also highlights the need for sustainable practices in carbon credit production to prevent future oversupply.

As the world grapples with the urgent need to reduce GHG emissions, the role of the VCM remains crucial.

Yet, this market upheaval reminds us that achieving a sustainable, low-carbon economy involves navigating a complex landscape.

Moving forward, much more work needs to be done to fully scale up the VCMs. This is a crucial topic for the upcoming COP28 conference in Dubai in November.

Some organizations such as SBTI, ICVCM, and VCI are all helping to shore up the foundation for the voluntary markets. Yet, reconciling the current VCMs with the Paris Agreement will go a long way towards stabilizing the market for carbon offset credits.

In the meantime, it’s likely that we’ll continue to see headwinds for NGEO prices.

The post The Collapse of NGEO Carbon Prices: An In-depth Analysis appeared first on Carbon Credits.