Saudi’s $2.6B Bet on Critical Metals for Clean Energy Transition

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In a strategic move to diversify its economy away from oil, Saudi Arabia has entered the global mining industry with a $2.6 billion deal to buy a 10% stake in Vale SA’s base metals division. 

The Saudi investment is a joint venture between the country’s sovereign wealth fund and state mining company, Ma’aden. The deal with Brazil’s largest miner will close in early 2024, pending regulatory approval. 

A Huge Bet on the Mining Industry 

The funding gives the Gulf kingdom access to various mining sites that produce critical minerals and metals. These industrial materials are necessary for the energy transition, particularly in meeting the surging demand for electric vehicles. 

Crown Prince Mohammed bin Salman focuses on the mining industry as part of diversifying the economy under Saudi Arabia’s Vision 2030. Initial investments will focus on minority equity positions in iron ore, copper, nickel, lithium, and other minerals.

Betting on these alternative energy sources, Saudi’s $170 billion mining plan will continue to attract global miners. Owning 17% of the world’s petroleum reserves, the Arab country believes that it sits on over $1 trillion worth of untapped minerals. 

The kingdom seeks to explore those deposits and ramp up production to realize its decarbonization goals. Its $2.6 billion stake at Brazil’s largest miner provides the country interests in copper, nickel, and other critical minerals. 

The funding represents Saudi’s first major investment into the global mining industry, according to the JV’s executive director Robert Wilt.

Critical Metals Powering the Energy Transition

Vale aims to expand mining for copper and nickel, which are both in demand for manufacturing electric cars. In line with this, the mining giant with a market cap of $67 billion, plans to invest up to $30 billion on new projects in its home country, as well as Canada and Indonesia. 

The miner claimed that the new funds from Saudi raised their base metals division’s implied value to $26 billion. 

Vale’s chief executive asserted that the company is “positioned to meet the growing demand for green metals essential for the global energy transition.” 

And one of these critical metals is lithium, which Saudi aims to build processing facilities for as part of its plan to establish a battery supply chain. Last year, Ma’aden expressed intention to spend big in exploring battery metals over the next two decades.

In fact, the country is planning to develop a $2 billion EV battery metals plant in partnership with EV Metals Group. EVM Arabia is set to set up a $905 million battery chemicals complex in the Arab country later this year. The kingdom has also pledged to buy over a 10-year period up to 100,000 EVs.

With these plans, Saudi is joining the global movement of securing lithium, which is the key element in making EVs. Leading automakers are scrambling to get enough of this critical metal, a.k.a white gold. 

For instance, Tesla has started building its own $1 billion lithium refinery in Texas. The EV pioneer also said that it needs to invest about $374 billion to mine and refine the metal. 

Luxury carmaker Mercedes-Benz also aims to directly source high-quality lithium to scale up its full EV battery production. Other carmakers have the same plans as part of the global transport electrification to drive the clean energy transition.

As demand for EVs continues to grow, lithium companies are also ramping up their efforts to supply the critical metal. American Lithium Corporation, for example, provides safe and stable supply of this metal with its two large lithium deposits. 

With Saudi Arabia’s goal to become a global leader in the minerals and metals market, the world can expect billions of dollars of more investment into the sector, driving the transition to a global clean energy system.

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Walmart Looks at Innovative Carbon Capture to Turn CO2 Into Clothes

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Walmart Inc. teamed up with a California startup Rubi Laboratories to test technology that can turn carbon dioxide into clothes. The CO2 is captured from the retail giant’s supply chain. 

The partnership between Walmart and Rubi will explore the innovative carbon capture technology that transforms CO2 from manufacturing waste streams into textiles. This initiative perfectly aligns with Walmart’s sustainability goals while presenting opportunities for eco-friendly and affordable apparel made from captured CO2. 

Rubi is a symbiotic manufacturing company aiming to reinvent fashion supply chains through a proprietary biomanufacturing technology that works in harmony with the planet.

A Greener Way to Make Clothes 

Climate experts believe that carbon capture technology can help prevent billions of tons of carbon emissions from entering the atmosphere. There are various technologies emerging today that capture CO2 from industrial plants and store the gas deep underground. 

The carbon capture sector is in its early stages but projections show promising growth. For instance, BloombergNEF estimates that direct air capture, directly capturing ambient air from the atmosphere, alone can be a $1-trillion market in the next decade. Scalability remains the key challenge. 

Other companies prefer to reuse the captured carbon instead of burying it to make other products that people use daily. This is known as the carbon capture, usage, and storage (CCUS) technology. 

Rubi’s patent-pending carbon capture and transformation technology uses biochemical processes to convert CO2 to cellulose. This technology, which follows the idea of how trees use carbon dioxide to grow, is powered by enzymes that “eat” CO2 and produce lyocell yarn, a main component in making textiles. 

Here’s how Rubi’s carbon transformation process works in three steps:

The carbon captured is from the waste streams of manufacturing facilities under Walmart’s supply chain. According to Rubi’s CEO Neeka Mashouf, their system can capture up to 90% of a factory’s CO2 emissions. And this is what the world’s largest retailer will test on this pilot project that will run until 2024.

The goal is to look for a greener way to make clothes, says Walmart’s EVP of Sourcing, Andrea Albright. She further asserted the importance of the project in addressing their climate and sustainability goals, saying that: 

“Walmart’s collaboration with Rubi could reimagine the apparel supply chain by leveraging technology to create textiles from carbon emissions. This technology could play an important role in our journey towards zero waste and zero emissions.”

The retail company company aims to reach zero emissions by 2040, ten years ahead of the Paris Agreement target. Part of this goal is to cut absolute Scopes 1 and 2 GHG emissions 35% by 2025 and 65% by 2030 from 2015 base year.

The retailer reported to achieve the following progress in its net zero targets. Between 2015 baseline and 2021, Walmart cut Scopes 1 and 2 emissions by 23% and also decreased carbon intensity by almost 41%, as measured by metric ton CO2e per $M revenue.

Walmart’s Progress on Operational Emissions (Scopes 1 & 2)

Walmart’s Giant Moves for Climate Goals 

Walmart is the first company to work with Rubi Labs both for manufacturing and brand pilot projects. Their deal involves two major parts:

1st pilot: focuses on integrating the Rubi system into manufacturing facilities within Walmart’s supply chain to capture and convert carbon.
2nd pilot: performance testing of CO2-converted cellulose in a prototype apparel, focusing on accessibility and affordability for the mass market. After testing, the partners plan to have a sample apparel collection.

Walmart is among many Fortune 500 companies committed to reduce carbon emissions to achieve climate goals. The giant retailer has been serious in reaching sustainability goals by working with climate action leaders, suppliers, and customers to cut its emissions since 2005. 

Walmart aims that its own operations – Scope 1 and 2 emissions – will be run 50% by renewable energy by 2025 and 100% by 2035. The company is also addressing its Scope 3 emissions (supply chain emissions) by launching the Project Gigaton in 2017. 

The project’s goal is to avoid or reduce 1 billion metric tons of carbon emissions by 2030. As of 2022, over 5,200 suppliers are participating in the project and reported to achieve a total of 750 million Mt of CO2.

Scaling up these goals and achievements are critical as the world continues to experience record-breaking heat levels. 

According to the United Nations estimates, the current emissions-cutting policies by governments worldwide are still not enough to limit global warming and would still likely increase global average temperature by about 2.8ºC by 2100. Recent reports of deadly heat-related events show how grave the effects of rising heat could be. 

What that means for companies is to take on massive and rapid efforts to reduce their planet-warming emissions. 

Joining Walmart in the fight against this climate crisis are major fashion brands Lululemon and Nike. 

Last month, the Canadian athletic brand Lululemon also partnered with a startup that uses enzymes to recycle plastics to recover nylon and polyester and use it to make new apparel. Undergoing the same carbon-cutting and sustainability initiatives, Nike has been using recycled materials in making its apparel and shoe collection.

Walmart’s move to address its supply chain emissions with Rubi’s help is a giant step towards its climate goals. Capturing emissions from its suppliers’ manufacturing facilities and using it to make new clothes can be both profitable and climate-friendly.

If successful, the innovative carbon capture system could revolutionize Walmart’s supply chain, making affordable clothing while mitigating carbon emissions.

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US Steelmaker Applies Surcharges for Lower Carbon Emissions, Eyes Hydrogen for More Reductions

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Cleveland-Cliffs, a major U.S. iron and steel maker, is putting extra charges on their steel
made from gas-fired hot-briquetted iron. The cool bit? They’re planning to use hydrogen to turn their whole operation green.

HBI is one kind of reduced iron used in making steel and producing it often involves coal used to separate oxygen from iron ore, making the industry carbon-intensive.  

A Cleaner Steel Production

The steel industry is the largest emitting sector responsible for ~7% of all man-made emissions. Most crude steel production heavily relies on blast furnaces that are mostly fueled by coal.

And despite increasing focus on decarbonizing steelmaking, the global steel industry’s emissions/ton have increased steadily over the last years.

World Carbon Emissions of the Iron and Steel Industry

Source: Shao, Y. et al. (2022). Environmental Science and Pollution Research.

According to the most recent data available from the International Energy Agency (IEA), 70% of global steel production is using traditional coal-powered blast furnaces. The remaining 30% is made through electric arc furnaces (EAFs), which emit fewer CO2 than blast furnaces.

The industry’s situation in the US is quite the opposite. 70% of steel is produced using EAFs that rely on high-current electric arcs to heat metals.

The North American steel industry pledges to shrink their carbon emissions by using more EAFs and cleaning up power supply. That means replacing coal-powered furnaces with low-carbon alternatives and sourcing power from renewable sources like wind and solar. 

Cleveland-Cliffs is using natural gas to make hot-briquetted iron at its Ohio site. This makes their steel production emit lower carbon emissions compared to the traditional process that uses coal and is why the American steelmaker said that its steel products deserve the surcharge. 

Lourenco Goncalves, Cleveland-Cliffs CEO, said that they’ve recently applied a surcharge they call “Cliffs H” into their clients’ invoices. The additional fee charges customers with a $40/ton applied to every short ton of steel made with HBI. Commenting on the surcharge, Goncalves further noted that:

“We deserve to be paid for a characteristic of our steel that truly differentiates us, particularly when compared to other major suppliers of steel to the automotive industry in the United States.”

Passing along this cost to end consumers would be minimal, increasing the retail price of a car by ~0.1%, the CEO also said. 

Away From Coal to Gas 

Opting for natural gas over coal helps Cleveland-Cliffs to not only slash CO2 emissions but also cut down production costs. With the current price for natural gas, the company was able to produce HBI for less than $200/metric ton. 

Still, reducing energy emissions won’t make steelmaking a low-carbon process; producers should also decrease the carbon intensity of raw materials. 

Electric arc furnaces, like what Cleveland-Cliffs is using, don’t process raw iron ore. Instead, EAFs process scrap steel, pig iron, and direct reduced iron (DRI). Among these materials, pig iron made with coal emits the most CO2, while DRI made with hydrogen has the lowest emissions. 

Data from S&P Global reveal the greenhouse gas emissions both from iron ore and coal production sites by region. The charts show that emissions from both productions increase from 2020 to 2021 in most regions, highest in North America.  

Steel made from DRI and produced in EAFs is viewed as the most technologically mature green steel production today. Using hydrogen instead of natural gas in making DRI is the most carbon-neutral production. 

And as for Cleveland-Cliffs’ CEO, the next avenue in decarbonizing steel production is through hydrogen. 

But according to the IEA, there’s no significant portion of 2021 global steel production done using hydrogen-based DRI via electric arc furnaces. And that just 7% of it opted for DRI powered with either coal or natural gas. 

The biggest barrier to using hydrogen in steelmaking would be the cost. Equivalent units of hydrogen are around 10x more costly than natural gas, says Goncalves. But he added that as this carbon-neutral gas becomes more economical, Cleveland-Cliffs can use it to decarbonize their operations.

Is Green Hydrogen the Future of Steel?

The full adoption of hydrogen in steelmaking depends on the economic availability of the gas itself. 

Hydrogen production remains limited and demand for the most abundant gas in 2021 was at only 94 million metric tons, the IEA reported. But the energy expert estimated that demand for hydrogen will almost double to 180 million metric tons by 2030. 

Recently, a Denver-based startup raised $91 million from Bill Gates and other investors to ramp up its natural hydrogen production in the Midwestern U.S.

Meanwhile, a German multinational company Thyssenkrupp AG got the European Union’s approval for a 2 billion euros, or about $2.3 billion, state subsidies for its proposed green steel production, particularly for its hydrogen-powered DRI plant at Duisburg site.

These recent developments tally with the announced clean hydrogen production capacity globally for 2030 as reported by McKinsey & Company. Companies disclosed 38 metric tons per annum in hydrogen production for the period. 

Source: McKinsey & Company Hydrogen Insights

In North America alone, companies announced up to 9.3 Mt p.a. of clean hydrogen capacity by 2030, with $46 billion announced investments for 170 projects. 

If these announcements and commitments materialize, green steel production with hydrogen seems to become viable for Cleveland-Cliffs and the industry.

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Danish Company Turns Poop Into Profit via Biochar and Carbon Credits

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To bring its groundbreaking biomass treatment technology to the global market, AquaGreen, a Danish engineering company, received $4.4 million from Nordic Alpha Partners and Swedish FMG Circular Invest.

FMG Circular Invest is a joint investment initiative between Feralco Group and its owner Mellby Gård. The Danish Workers Pension Fund (ATP) also supports AquaGreen.

The company’s revolutionary technology helps in the fight to reduce emissions while paving the way for a circular economy. 

AquaGreen: Pioneering the Circular Economy with Innovative Technology

AquaGreen is at the forefront of the circular economy through its patented technology that transforms biowastes into resources. This innovative technology enables industries to turn biomass and waste like sewage sludge into renewable energy, biochar, and activated carbon. 

The company’s engineers are working closely with scientists and professors from renowned universities, and dedicated partners. Its state-of-the-art technology is patented with the Technical University of Denmark (DTU) and earned the company various innovation awards. 

Noting AquaGreen’s unique solution, co-CEO of Feralco Group Ludovic Huitorel, remarked that:

“The trends related to the circular economy within wastewater treatment are strong… AquaGreen is well-positioned to meet the market’s demand for the elimination of microplastics and medical residues, in wet biomasses.”

An average person discharges around 2 tons of biowaste (or poop) a year. Wastewater treatment facilities either spread the waste on farmlands, store it, or burn it. These options are expensive and are bad for the environment and the climate. 

Carbon Footprint of WWTPs

Source: Wu, Ziping et al. (2022). A comprehensive carbon footprint analysis of different wastewater treatment plant configurations. https://doi.org/10.1016/j.envres.2022.113818.

During their operations, wastewater treatment plants (WWTPs) generate greenhouse gasses like carbon dioxide, methane, and nitrous oxide, including CO2 emissions from the energy production required to run these plants. These gasses are known to exacerbate climate change.

AquaGreen offers a solution to this escalating issue. Its innovative technology eliminates harmful substances in biomass and lowers greenhouse gas emissions.

How Does AquaGreen Biomass Technology Work?

AquaGreen’s biomass treatment technology is a game-changer in waste management. Their continuous, fully automated process (integrated steam-drying and pyrolysis) uses the calorific content of waste to fuel its own system. 

This software-controlled system reduces waste management costs by up to 90% as it requires little manpower for operation. Plus, monitoring the system is possible remotely.

The process not only turns wastes into valuable resources but also eliminates harmful pollutants, cuts GHG emissions, and stores CO₂ in biochar. This significantly contributes to environmental sustainability and climate change mitigation efforts, while generating revenue from waste. 

Here’s how AquaGreen’s technology works, explained in the video.

Impact on Climate and the Environment

AquaGreen’s innovative HECLA® technology runs with an integrated steam dryer and pyrolysis system. Sewage sludge is steam-dried and the remaining biomass is then pyrolyzed in the absence of oxygen at 650°C. 

The technology converts biomass into biochar, which reduces or eliminates the environmentally harmful substances. During this process, essential nutrients and minerals for plants and animals like phosphorus are preserved. 

The process also significantly reduces CO₂ emissions. First, it prevents the sludge from dissolving and releasing planet-warming greenhouse gasses. Second, it binds CO₂ into the biochar.

The system is self-sufficient and circular because the gasses produced during pyrolysis fuels both the steam drying and pyrolysis processes. The excess steam, condensed into hot water, is applicable for district heating grids and other applications. 

With just one AquaGreen HECLA® Setores 1,000 Plant, it can handle the waste from up to 75,000 individuals. More remarkably, the plant is capable of achieving these climate-friendly results:

Reduce GHG emissions by 1,800 tons of CO₂ equivalent
Produce 2,000 MWh of energy
Store 500 tons of carbon in biochar

The resulting biochar is odorless and contains up to 6% plant-accessible phosphorus and other valuable nutrients. 

From Sludge to Biochar to Carbon Credits

Through AquaGreen’s HECLA® technology, sewage sludge can be converted into biochar, which is a stable and effective carbon sequestration method. Biochar produced at temperatures above 600°C has a high stable carbon content of above 90%. 

Studies also show that biochar can sequester up to 2-3 tons of carbon per ton of biochar applied. 

This method offers a long-term mitigation as it can sequester carbon up to thousands of years when added to soil. Plus, it can also improve soil quality by enhancing water retention, nutrient availability, and microbial activity.

Companies or projects that sequester carbon and reduce GHG emissions through biochar are eligible to earn carbon credits. These credits are tradable in the carbon markets and represent certain amounts of carbon removed from the atmosphere. Each credit corresponds to a tonne of atmospheric carbon removed or reduced. 

AquaGreen’s HECLA® technology has shown its capability in providing sustainable wastewater management as well as reducing GHG emissions. 

The EU alone would need around 5,000 HECLA® plants to address its wastewater treatment requirements. This fact, plus the climate benefits of its technology, is the reason for AquaGreen’s new investment.

With AquaGreen’s innovative biomass treatment technology, waste management takes a leap towards sustainability and climate action. By converting biowastes into valuable resources while sequestering carbon through biochar, the company contributes to climate change mitigation.

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Abu Dhabi Asset Management Firm to Build $250M Carbon Fund

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Offset8 Capital, an Abu Dhabi asset management company, plans to raise $250 million for a carbon investment fund as demand goes up for better-regulated carbon credits.

The company aims to close the initial capital for the carbon fund in the third quarter of this year. The firm decided to establish the fund in the Abu Dhabi Global Market (ADGM) to take advantage of its framework that regulates carbon credits. 

Once closed, the carbon investment fund will be the first of its kind in the Middle East.

Offset8’s Carbon Investment Fund 

Offset8 Capital seeks to provide funding to projects and companies that actively engage in reducing global carbon emissions. Its primary goal is to finance carbon removal projects that don’t just cut emissions but also benefit the local communities.

The Abu Dhabi firm believes that the voluntary carbon market needs to become easier to understand to attract more stakeholders to further accelerate the fight against global warming.

With those in mind, the company plans to close a $250 million carbon fund. Proposed investments will target carbon reduction projects in the Middle East, Africa, and Southeast Asia. Its current pipeline of carbon removal projects includes reforestation, mangrove, water purification, biodiversity, and biochar. 

To date, Offset8 identified over 50 projects in 29 countries that it expects will form the fund’s investment pipeline. In evaluating these projects, the firm will depend on the Integrity Council on the Voluntary Carbon Markets’ Core Carbon Principles for high-quality carbon credits.

Offset8’s plans for raising the carbon fund follow the emirate’s launch of its own carbon credit exchange last year. 

Abu Dhabi sovereign fund Mubadala acquired a strategic stake in AirCarbon Exchange (ACX), which established the carbon credits trading exchange and trading house in the UAE capital. This move supports the plan of the oil-rich emirate to allow companies to fund and trade carbon credits. It is part of UAE’s net zero strategies and efforts to offset its emissions. 

According to Offset8 Capital’s co-founder, Abu Dhabi’s regulatory framework considers carbon credits as both a financial instrument and a spot commodity that improves compliance and capital requirements.

These actions are in line with the UAE’s preparation for hosting this year’s premier climate change summit COP28. The climate conference’s president is the CEO of the Abu Dhabi National Oil Company (ADNOC). This, and the fact that the country has been pumping huge amounts of oil and gas, stir criticisms from environmentalists. 

More Demand Comes More Scrutiny

Not only does the major oil-producing country scrutinize climate-related issues. The voluntary carbon markets (VCMs) are also receiving their share of criticisms. These markets have been seeing a swift increase in trading transactions and growing demand from corporate offsetting goals. 

The rapid market growth leads to the creation of new guidelines and calls for stricter regulations. Serious accusations arise pertaining to the swamp of worthless credits. Highlighting this matter, another Offset8’s co-founders, Jules Maitrepierre, said: 

“When demand grows there’s naturally more scrutiny and a lot of projects have not been of a quality standard…Now corporates understand the need for high-quality credits and the projects understand that in order to attract capital they need to follow strict guidelines.”

Indeed, addressing this concern, international carbon standards published better principles and rulebooks governing carbon markets. And despite challenges on limited high-quality supply, corporate demand for carbon offset credits remains strong. 

The overall outlook for the VCM is positive, with more buyers joining the ‘flight to quality’. It means buyers are becoming more involved earlier in projects and focusing more on contribution over mere offsetting.

Currently, Offset8 Capital is a team of 12 individuals bringing in diverse expertise in the areas of carbon markets, commodity trading, investment, and asset management in emerging markets. All of which are relevant to sourcing high-quality carbon projects and generating the corresponding carbon credits. 

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Xpansiv and Puro.earth Partner to Scale Carbon Removal Credits Market

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Puro.earth and Xpansiv to partner to expand the market for carbon removal credits and strengthen net zero programs. 

Nasdaq-backed Puro.earth is the world’s leading carbon crediting platform for engineered carbon removals (CDR) while Xpansiv is the dominant market infrastructure for the global energy transition. 

A Giant Merge to Scale Carbon Removals 

Efforts have been made in ramping up the carbon removals credit market. This very recent tandem between the two leading market platforms marks a significant development in the space. 

The partnership makes Puro.earth CO2 Removal Certificates (CORCs) added to the list for trading on Xpansiv spot marketplace CBL. The market is the largest spot exchange for trading voluntary carbon credits, renewable energy certificates (REC), and other environmental commodities.

Puro.earth’s robust, diverse supplier base provides buyers with a great source of quality carbon removal credits. Its platform currently delivers carbon removal services to some of the world’s giant corporations, such as Shopify and Microsoft.

Puro.earth launched Puro Registry, a public registry dedicated to CORCs last year.

Xpansiv’s CBL offers hundreds of market participants transacting on its centralized and transparent spot exchange and post-trade platform. Xpansiv is the leading provider of registry infrastructure for energy, power, and environmental markets.

Remarking on their partnership, Xpansiv said that participants are eager to include carbon removal credits in their portfolios. 

Highlighting the importance of their collaboration with Xpansiv, Puro.earth’s CEO Antti Vihavainen said that scaling up the market for carbon removal credits is essential in the private sector’s net zero programs. Vihavainen further noted that 

“CBL’s central position in the carbon markets will be critical in enhancing transparent price discovery and liquidity formation, enabling participants to engage with greater certainty and confidence.”

Carbon removals are becoming more important in companies’ decarbonization strategies, particularly for the hard-to-abate sectors of steel and cement.

Credits for Removing Carbon for Good

Puro.earth’s guiding principle is to create undisputable methodologies for engineered carbon removals. The platform’s ecosystem consists of more than 110 suppliers of carbon CORCs with 600 firms in preparation for getting certified.  

Engineered carbon removals are also known as negative emissions technologies. They refer to a set of technologies and methods designed to actively remove CO2 from the atmosphere. Unlike natural carbon removal processes, engineered carbon removals are man-made processes to mitigate the impacts of climate change.

Last year, Nasdaq launched three carbon removal price indexes based on Puro.earth CORCs.

Puro.earth Standard establishes carbon credit methodologies for processes that remove CO2 from the atmosphere for at least 100 years. The company then certifies suppliers that run those processes and issues digital, tradable carbon removal credits into Puro Registry.

The company has recently updated its Terrestrial Storage of Biomass methodology and is reopened for more comments or insights. Initiatives that may certify under this program prevent the escape of carbon from the stored biomass back into the atmosphere. 

The partnership between Xpansiv and Puro.earth plays a crucial role in enhancing transparent price discovery and liquidity formation, enabling a more sustainable and confident engagement with carbon removal efforts and credits.

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Turning CO2 Into SAF Via “Industrial Photosynthesis”

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Breaking new ground in the aviation industry, the startup Twelve is set to revolutionize sustainable aviation fuel (SAF) production in the U.S. It recently broke ground on a commercial-scale facility in Washington state, which it claims will be the country’s first to create SAF from carbon dioxide.

The groundbreaking event, attended by Washington Gov. Jay Inslee, marks a historical milestone for an aviation industry under pressure to decarbonize.

Twelve began producing jet fuel in a Berkeley, California lab in 2021 using electricity, water, and CO2. The company refers to this product as E-Jet, a potential replacement for fossil-based fuel that could significantly reduce airlines’ carbon emissions.

Now, the California-based startup is scaling up efforts to produce more of this cleaner fuel at its commercial-scale facility in Moses Lake, Washington. If operations begin in 2024, the facility will be the first of its kind to convert CO2 into SAF.

Major corporations such as Alaska Airlines, Microsoft, and Shopify have recently signed deals to buy millions of dollars of SAF from Twelve’s new facility. 

Cutting Emissions By 90% 

Last year, aviation was responsible for 2% of global GHG emissions and is growing faster than any other transport modes. This emission will continue rising as more people and airplanes fly. 

In 2022, major U.S. airlines have burned over 17 billion gallons of jet fuel. Only a very small fraction of this consumption, below 0.1% or almost 16 million gallons was SAF.

So cutting further down the sector’s pollution is crucial in the fight against climate change. But substituting the planet-warming kerosene with SAF poses significant challenges. 

Global fuel companies and startups have been finding solutions to make it possible to fully replace fossil-based kerosene. And they are supported by the Biden administration through the Inflation Reduction Act. 

The climate law offers tax credits to producers of clean alternative fuels like SAF with $300 million in grants. The goal is to grow the supply of these fuels to 3 billion gallons annually by 2030.  

Twelve aims to produce 40,000 gallons of E-Jet per year before scaling up production by as much as 10x within the first 5 years of operation, said the chief officer Ram Ramprasad. The startup also plans to construct much larger facilities.

The company said that SAF can reduce the carbon emissions of airplanes by up to 90% versus fossil-based kerosene. Though using E-Jet still emits carbon, it’s much less than petroleum-based fuels. That’s because it recycles CO2 from the wastes of refineries and mills, or captured directly from the air. 

Twelve’s E-Jet From “Industrial Photosynthesis”

Twelve is using a unique method to transform CO2 into juice for jet engines in a process called “industrial photosynthesis”.

The process is pretty much the same as what plants do during photosynthesis. The difference is that Twelve’s electrochemical reactor named Opus performs photosynthesis.  

Opus takes water and CO2 and changes them into new chemicals, materials, or fuels using renewable energy. It splits CO2 molecules into carbon monoxide while in a separate electrolyzer, water molecules break down into hydrogen and oxygen. The result of these processes is called ​“syngas.”

The team is using a multistep reaction process called the Fischer-Tropsch to transform the gas into alternative jet fuel.

The company sources ​“waste” CO2 from industrial facilities. Its modular reactor can be installed in any industrial system, with a “plug-n-play” design.

According to Twelve, they can cut up to 10% of global emissions through Opus. And that’s possible by transforming supply chains from running on fossil fuels to running on waste or captured CO2.

Twelve Carbon Transformation Technology

Other startups are also using carbon to make synthetic jet fuel. For instance, LanzaJet, a spinoff of LanzaTech, is recycling municipal solid wastes, agricultural biomass and residues to make SAF. 

The company, which turned public this year, is constructing what it claims is the first ​“ethanol-based alcohol-to-jet” SAF production. The facility, which is due to finish this year, will make 10 million gallons of sustainable aviation fuel each year.

Air Company, another startup based in New York, is also working in the same space. Its innovative carbon conversion technology combines CO2 and hydrogen to make oily liquids suitable for making SAF. 

The company also makes carbon-negative alcohols and consumer products out of thin air. With its pioneer carbon technology, Air Company made the world’s first alcoholic beverage directly from CO2, Air Vodka.

The Key Challenge to Scaling SAF 

Right now, almost all of the country’s SAF supply is from used cooking oil and animal fats, and scarce feedstocks. This is why Twelve’s carbon transformation technology needs to scale up rapidly to supply the much-needed SAF.

In 2022, SAF production tripled to about 300 million liters or 240,000 tonnes, according to the International Air Transport Association. If renewable energy production hits 69 billion liters by 2028 as projected, the forecast to 100 billion liters (80 million tonnes) by 2030 is possible. If only 30% of that production is achieved, the industry can still have 30 billion liters (24 million tonnes) of SAF by the same year.

To produce E-Jet at its commercial plant, Twelve will first source CO2 from an ethanol refinery in neighboring Oregon. Then it will later get more CO2 supply from pulp and paper mills in Washington. 

The biggest challenge the company has in ramping up its SAF plants is the availability of power. They’re aiming to build their next facility in the American Corn Belt where ethanol facilities and wind farms abound. 

Finding sites where they can source CO2 and access renewable power is critical to scaling up sustainable aviation fuel production. 

Still, by leading the charge in developing cleaner and greener solutions through its innovative industrial photosynthesis, Twelve’s method is showing immense potential in cutting aviation’s carbon emissions. With the growing demand for cleaner fuels, plus government support, flying will be more sustainable in the future.

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Alibaba Cuts Carbon Emissions By 13%, Reveals So-Called Scope 3+

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In a bold stride towards a greener future, Chinese e-commerce titan Alibaba has successfully slashed its net carbon emissions from direct operations by an impressive 13% in the past financial year. This significant reduction is a part of Alibaba’s ambitious goal to achieve carbon neutrality by 2030.

The retail behemoth unveiled this remarkable achievement in its 2023 Environmental, Social, and Governance (ESG) report. The report also highlighted Alibaba’s groundbreaking progress towards its ambitious Scope 3+ goal, which aims to eliminate a whopping 1.5 gigatons of carbon emissions across its digital ecosystem by 2035. This marks the first time the company has reported on this pioneering sustainability effort.

Highlighting this milestone, Alibaba’s outgoing CEO and Chairman, Daniel Zhang Yong noted in the report:

“Despite challenges in the macro environment, geopolitical uncertainties in the post-pandemic era, and new trade-offs between sustainable development and economic growth, we achieved notable progress in our ESG initiatives.”

And one of these achievements is the CO2 emission reduction of almost 23 million metric tons throughout the value chain. This includes Scope 3 emissions. 

Alibaba’s Carbon Emissions and Reductions

In 2021, the Hangzhou-based company made three climate pledges as follows: 

Decarbonize operations (Scopes 1 and 2): achieve carbon neutrality in own operations by 2030.
Green the value chain (Scope 3): cut emission intensity by 50% from 2020 levels in collaboration with value chain partners. Alibaba Cloud will reach Scope 3 carbon neutrality by the same year. 
Enable a low-carbon circular digital ecosystem (Scope 3+): to achieve 1.5 gigatons of carbon reduction over 15 years across the digital ecosystem. Alibaba will leverage its digital platforms to attract more participation from stakeholders in reducing emissions. 

In its 2023 financial year, Alibaba took huge steps toward meeting these targets. 

As shown in the charts, the e-commerce giant emitted around 4.7 million metric tons (Mt) of CO2 equivalent, down 13% from the previous year. By cutting 1.4 million Mt of CO2e with clean energy and smart energy management, carbon reduction increased 129%. 

Alibaba Net Carbon Emissions and Reductions

Alibaba was also able to decrease its Scope 3 emissions by 400,000 MtCO2e through various measures. These include digital optimization, energy transition in logistics, more energy-efficient data centers, and adoption of low-carbon business traveling.

For instance, logistics subsidiary Cainiao has reduced packaging materials by 184,000 tons in 2023 by recycling used packages. Cainiao urged consumers to reuse cardboard boxes at pick-up points resulting in 23 million boxes recycled at Cainiao Posts.

Alibaba teamed up with Nike to do door-to-door recycling across thirty Cainiao campus stations nationwide in China.  

Combining these efforts with the company’s projects on carbon removal and carbon credits, its Scope 3 carbon intensity dropped by almost 6%. Alibaba focuses on supporting nature-based climate solutions.

The So-called Scope 3+

What makes 2023 a groundbreaking year for the Chinese company is the introduction of its initiative called Scope 3+ results. This new effort goes beyond Scopes 1, 2, and 3, which reduced a total of around 23 million MtCO2e.

Under its so-called Scope 3+, Alibaba introduced a group-level carbon ledger, Carbon88, which encourages consumers to adopt low-carbon behaviors on the company’s platforms. More than 187 million users took part in CO2 emission reduction efforts through the carbon ledger program.  

Carbon88 allows users to show the actions they’re taking to reduce their carbon footprint. These include everything from bringing their own cups to using reusable bags.

Similarly, Amap, Alibaba’s navigation platform, has seen over 30 million people opting for low-carbon travel options like walking. This led to a reduction of 215,000 MtCO2e. Moreover, the company’s food delivery platform, Ele.me, helped save resources by allowing users to opt out of cutlery on over 1.4 billion orders. 

Scope 3+ basically refers to a low-carbon circular digital ecosystem with broader cooperation from stakeholders.

A Green Cloud

Alibaba’s cloud computing subsidiary also significantly contributes to its climate goals. The report said that the proportion of clean electricity used in its self-built data centers in China increased from 21% in 2022 to an impressive 54% in 2023.

This remarkable achievement is due to the improved implementation of energy-saving technologies such as liquid-cooling server technology and power management optimization. As a result, total power usage was down to 1.215 in the period from 1.247 a year earlier. 

Alibaba Cloud’s efforts to replace traditional IT with cleaner and greener cloud computing have boosted corporate users’ efficiency. It also reduced its emissions, avoiding a significant 85% of CO2 emissions, as Carbon Trust reported.

Moreover, the cloud’s AI-driven sustainability platform has assisted thousands of enterprises worldwide in monitoring, analyzing, and optimizing their CO2 emissions. 

Overall, Alibaba Cloud realized over 1 million MtCO2e of emission reduction in the company’s own operations (Scopes 1 & 2) and 0.4 million MtCO2e throughout its value chain (Scope 3).

These results stated in its ESG report emphasize Alibaba’s commitment to environmental responsibility. It sets a shining example for other companies to follow in their quest for a greener future. 

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Germany Multination Thyssenkrupp Wins EU Nod for $2.2B Green Steel Subsidy

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Thyssenkrupp AG got the European Union’s approval for a 2 billion euros, or about $2.3 billion, package of state subsidies from the German government for its proposed green steel production.

Currently, Thyssenkrupp Steel division is responsible for 2.5% of Germany’s total carbon emissions. The leading German metals, engineering, and manufacturing company aims to reduce such footprint by producing climate-friendly steel at their Duisburg site. 

Green Deal is Green Steel 

Big businesses across Europe are turning to governments for large subsidies to construct green production facilities. This is in line with the EU’s “Green Deal” that seeks to take a lead in the clean technology sector. 

The bloc hopes to keep pace with the massive aid by other countries to companies to make their businesses green. And green steel is a key driver of a Net Zero industry in the region. 

The steel industry is raking in hundreds of billions of dollars in revenue annually but at the cost of the planet. The industry accounts for up to 9% of global carbon emissions due to its high reliance on coal to make steel. 

The industry is, in fact, the largest emitting manufacturing sector. Cutting its huge footprint is very expensive but using clean technology to make green steel can help lower the cost. 

Green steel production usually involves hydrogen to purify iron ore pellets and melts it to make steel in electric furnaces. This clean technology basically replaces coal used in powering blast furnaces that releases over one ton of CO2 for every ton of steel. 

ThyssenKrupp Steel has tested the viability of this green steel technology as part of its climate strategy. The German industrial company’s goal is to make steel production carbon-neutral by 2045.  

The firm aims to reduce carbon emissions of steel production across three sources – Scope 1, 2, and 3 – by at least 90% by 2050. In the short term, Thyssenkrupp Steel plans to cut Scope 1 and 2 emissions by 30% by 2030 versus 2018 levels. 

Hydrogen for Green Steel Production

A big part of achieving those goals is the construction of a hydrogen-powered direct reduction (DR) plant at Thyssenkrupp’s Duisburg site. It’s a revolutionary concept with a capacity of 2.5 million metric tons of directly reduced iron (DRI). The company calls it “tkH2Steel”, which can reduce over 3.5 million metric tons of CO2. 

Contrary to conventional blast furnaces, DR plants don’t produce hot metal but solid sponge iron, aka “direct reduced iron”. DRI needs further melting to make high-quality steel. 

Thyssenkrupp Steel has been working on this technology to produce green steel. In March this year, the company awarded a contract worth billions of euros to SMS group, a company from North Rhine-Westphalia, for a direct reduction plant. The project marks one of the world’s largest industrial decarbonization initiatives in the industry. 

The project is a groundbreaking initiative for Germany’s largest steelmaker – replacing carbon-intensive steel production with clean technology using hydrogen. The company can continue to boil steel like in the past using proven processes but use hydrogen instead of coal.

To date, the company’s Duisburg production site emits about 20 million metric tons of CO2 a year with its coal-based hot iron production using blast furnaces. With hydrogen-powered direct reduction plants, Thyssenkrupp Steel can significantly slash its emissions and produce carbon-neutral steel. The giant steelmaker plans to avoid as much as 6 million metric tons of CO2 by 2030.

The 2 billion euros subsidy approved by the EU will help Thyssenkrupp achieve its green steel production targets. 

Funding Steel Decarbonization in Europe

The subsidy package is a combination of direct grants and a conditional payment to support the steelmaker’s decarbonization plan and ramp up its hydrogen uptake. 

The EU and Germany have agreed to give Thyssenkrupp financial aid in June. The funding includes around 1.3 billion euros from the federal government and 700 euros from North Rhine-Westphalia’s state government.

The bloc also approved a separate 850 million euros subsidy in France to help fund ArcelorMittal SA‘s steel decarbonization plans.

In Sweden, a green steel startup secured 190 million euros from private investors to start building its green hydrogen-powered steel plant in Boden.

The target date of Thyssenkrupp’s green steel production at its hydrogen-powered DRI plant is the end of 2026. This groundbreaking project winning over European government support shows a business case for the Green Deal’s investment in clean technology.

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