Climate Disclosure: New Corporate Standards for a Net Zero World

As part of the world’s continued efforts to combat climate change and transition towards net zero, one important piece of the puzzle is new regulations and government policies.

Government regulation covers just about every sector, both public and private, and has been related to some of the most important shifts in industry.

The oldest of the U.S. government’s various consumer protection agencies, for instance, is the Food and Drug Administration, or FDA.

Its origins begin with the U.S. Department of Agriculture’s Division of Chemistry, a research wing with no regulatory powers that existed in the late 19th century.

After a number of food- and drug-related scandals such as Upton Sinclair’s The Jungle exposé on working conditions in animal feeding operations or the diphtheria antitoxin contamination incident in 1901 that resulted in the deaths of a dozen children, new laws were implemented that would lead to President Roosevelt signing the Food and Drug Act in 1906.

Since its inception, the FDA has given rise to countless regulations that benefit the general public. Some examples include:

Banning radioactive drinks and harmful “drugs” like Elixir of Sulfanilamide
Establishing canning and packaging standards
Allowing for the prosecution of responsible officials of a corporation, as well as the corporation itself, for violations
Authorizing the inspection of factories
Regulating drugs before they hit the market

You can thank the FDA for the fact that this isn’t available for sale anymore.

The FDA has by no means exhausted the list of changes it has brought to an industry that state laws previously only protected in a patchwork manner.

Today, it’s very unlikely for someone to go out to a grocery store or restaurant and get sick from something relating to the ingredients. This wasn’t always the case a century ago. And we have the extensive protections put in place by the FDA to thank for that.

In the modern day, the fight against climate change is the next place where government intervention has to force compliance in a timely manner.

After all, oil and gas companies like Exxon already knew about climate change back in the ‘70s. They spent millions on research, hiring top scientists and building their own climate models. All to cover it all up when it turned out that the truth could hurt their bottom line.

(Exxon is famous for being one of the leaders behind the Global Climate Coalition. It was established in 1989 to question the science behind climate change and raise skepticism.)

Climate disclosure rules are merely one small piece required to put the world onto a net zero pathway. Climate disclosure will enable informed investor decisions and compel companies to reveal their true operations, similar to FDA-imposed nutrition labels.

What is Climate Disclosure?

Simply put, climate disclosure standards are legislation put in place to make it mandatory for companies to disclose how much their business operations impact climate change – and even how climate change impacts them.

Currently, corporations already adhere to a number of different reporting standards. Financial reporting is one of the most well-known, as quarterly earnings reports and such often impact share prices and market valuations.

Non-financial reporting metrics such as ESG (Environmental, Social and Governance)-related reporting have risen greatly in the past few years. Simply because investors have started viewing corporate responsibility as a key component of an attractive investment.

Climate disclosure certainly falls under the “E” in ESG. Many major companies are already voluntarily disclosing their emissions and other related information. But many use different metrics for reporting, while others may straight up leave out important details.

Proper climate disclosure regulation would require a standard framework that companies would be forced to follow when reporting their emissions and other climate-change-related details of their operations. It would work similarly to how the U.S. SEC mandates annual 10-K and quarterly 10-Q reports to be filed by listed companies according to U.S. GAAP accounting standards.

As an aside, something often used in emissions reporting are the terms “Scope 1”, “Scope 2”, and “Scope 3” emissions, also known as S1, S2, and S3.

These terms come from the Greenhouse Gas Protocol, a third-party emissions reporting standard that many companies use for calculating their emissions.

S1 emissions covers the emissions directly resulting from a company’s operations. It’s from sources they own and control, such as any buildings they occupy or vehicles they have.

S2 emissions are indirect emissions that include the emissions produced from the energy the company uses. Examples of this would be the emissions generated by the electricity used to power the company’s offices. Or it can be the emissions produced when extracting the oil used by their employees to drive to said offices.

Lastly, S3 emissions are indirect emissions that cover the entire rest of a company’s value chain, both upwards and downwards. What this means is that all emissions from any products or services used or produced by the company would be covered.

This would include the emissions required to produce any parts or supplies the company uses in its business operations. The emissions the company’s products would produce down the line are also part of S3. 

Let’s take an auto manufacturer as an example here. Their S1 emissions would include the emissions produced by the company’s offices, manufacturing plants, and fleet of delivery/service vehicles. Their S2 emissions would include the emissions generated by the electricity required to power said plants, and the oil to run their fleet of vehicles.

Finally, their S3 emissions would include the emissions involved in mining and producing all the materials and parts the company needs to actually make their cars, as well as all of the emissions produced by their cars in the future when their customers drive them.

As you can see, S3 emissions can be a big deal when compared to a company’s “operational” S1+S2 emissions! This is part of the reason why proper climate disclosure regulations are needed.

Why is Climate Disclosure Important?

Right now, in the U.S. and many other countries, there’s no single unifying standard for climate disclosure. Again, while many companies voluntarily do so, some may be trying to report their emissions in such a way as to make themselves look better.

One example of this comes from the oil and gas industry, where all of the biggest companies like Shell, Chevron, Exxon, and even Saudi Aramco only report S1+S2 emissions in their disclosures.

After all, it hardly matters how cleanly a company can extract oil and gas from the ground. What really matters is how all that oil and gas ends up getting burned as fuel, releasing significant carbon emissions that would fall under the company’s S3 emissions… which simply go unreported.

Currently, it’s estimated that S3 emissions account for 80-95% of the total carbon emissions from oil and gas companies, as shown above. So, by ignoring them, oil and gas companies can make themselves look better.

Another potentially surprising example comes in the form of Tesla, the electric vehicle (EV) company.

Prior to 2023, Tesla also refused to report its S3 emissions related to the various suppliers and vendors who produce parts for its cars.

In its most recent impact report, however, Tesla finally reported its S3 emissions alongside its operational S1+S2 emissions. To no surprise: its S3 emissions accounted for 98% of the company’s total emissions footprint.

One thing you might not know is that currently, the process of making an EV is actually more carbon intensive than making a gas-powered vehicle. This is due to a number of factors, such as the complicated process of making an EV battery as well as the relative lack of economies of scale when comparing EV manufacturing with traditional car manufacturing.

Of course, the lifetime emissions of an EV still wind up being significantly lower than that of a gas car. That’s because a gas car will continue to produce carbon while in use over its lifespan.

Still, Tesla may have wanted to hide the fact that right now, making an EV produces more emissions than making a regular car by hiding their S3 emissions.

You can think of proper climate disclosure like the nutrition labels on food packaging. It provides additional information regarding each product and allows extra transparency and metrics for the consumer to choose based on their preferences.

For instance, when grocery shopping, some people always choose the cheapest option, whereas others are happy to pay the premium for locally sourced organic produce. Some might prioritize fresher products, while others may have a preferred brand they go for.

Climate disclosure will allow for investors to do the same thing with companies they choose to invest their money in.

Let’s say you do your research on two different companies offering similar products or services. If the pros and cons of each respective company balance each other out, the fact that one company emits twice as much greenhouse gas (GHG) as the other might just be the factor that tips the scales in the other company’s favor.

This extra climate data transparency will also allow for governments to better meet their country-level climate change targets. Also known as their Nationally Determined Contributions (NDCs) as per the Paris Agreement.

And on the subject of GHG emissions, don’t forget – we’re already entering an era where climate disclosure may actually have significant material impact on a company’s operations.

In Europe, for example, the Emissions Trading System (ETS) covers roughly 40% of total GHG emissions in its member states. This includes a number of important sectors such as power generation, transportation, and the manufacturing industry.

Companies covered under the ETS have their emissions capped. Any excess emissions over a company’s annual limit must be offset through the purchase of allowances from other operators in the ETS who are under their own limits. If companies can’t come up with enough allowances to fully offset their own emissions, they face heavy fines.

Since the emissions of these companies can directly impact their financial results, emissions reporting is very important for companies that operate under the EU’s ETS framework.

While not every country and sector in the world has an emissions regulation framework like the ETS, it’s only a matter of time before governments serious about climate change adopt similar strategies.

Even without taking such considerations into account, climate disclosure already has the potential to seriously impact corporate valuations. More and more investors decide they would rather put their money into climate-friendly businesses.

ESG funds have grown significantly over the past five years. Despite last year’s hit with global markets, ESG investing remains highly popular.

Many investors seek ESG-friendly deals; it’s time to implement climate disclosure rules.

Now, while we’ve mostly discussed the emissions reporting aspect of climate disclosure, there are other parts to it as well. In particular, how a business’s operations might be impacted by the effects of climate change.

In recent years, extreme weather events have become far more commonplace. And they can have significant adverse effects on both individuals and corporations alike.

Climate change can negatively impact agriculture and crop yield, for instance. Extreme weather events can also cause widespread damage from flooding, storms, and the like. Sustained periods of high temperatures can stress electrical grids and equipment, and even cause health issues and force business closures.

Some businesses are naturally more impacted by climate change than others. Whether it’s due to their physical location or the nature of their operations. Risks related to these factors would be very handy for investors to know as they do their due diligence.

Climate Disclosure Around the World

Right now, the EU and the UK are largely driving the push for more stringent climate regulation.

Every year, operators covered by the EU ETS must submit an emissions report that complies with the EU’s Monitoring and Reporting Regulation, subject for verification by a third-party verifier by March 31st of the following year.

The U.K. implemented their Climate-related Financial Disclosure Regulations in 2022. It became one of the first to make it mandatory for listed companies to report climate disclosures.

The EU and UK have definitely led the way in this area. Yet, many other countries have proposals in place to make climate disclosures mandatory for companies, including:

Hong Kong,
New Zealand,
Switzerland, and
The U.S.

The U.S. SEC, in particular, is currently in the process of finalizing their climate disclosure rules for public companies.

What Are the New SEC Climate Disclosure Requirements?

In March of 2022, the SEC proposed a set of climate disclosure requirements that would potentially apply to all SEC-registered domestic and foreign public companies.

The proposal would require companies to, in their registration statements and period reports (such as 10-K annual reports):

Discuss the potential material impacts of climate-related risks on their business and how they’re being addressed. These include governance structure, strategy, risk management, metrics, and outlook.
Disclose S1 and S2 emissions (for certain filers), eventually with “reasonable” independent third-party assurance same with financial statements. Certain companies, but not all, would also need to disclose their S3 emissions.
Incorporate climate-related financial metrics and disclosures into their audited financial statements.
Discuss any climate-change-related targets as well as transition plans, if applicable.

The authorities planned to finalize these proposed changes in April of 2023, but controversy surrounding the new rules delayed them to fall of the same year.

Many have pushed back against what they perceive as an overreach by the SEC with its new climate disclosure requirements.

Some question whether or not the SEC actually has the authority to force businesses to comply with this proposal that would significantly affect management processes for many businesses.

Predictably, many Republican lawmakers and business groups aren’t happy with these aggressive new rules. They believe it will add administrative burdens and costs to companies without providing comparable tangible benefits.

The U.S. Chamber of Commerce, for instance, has threatened to file a lawsuit if the rules are finalized. And Republican House Representatives like Ann Wagner of Missouri and Bill Huizenga of Michigan have expressed their concern about the legal authority of the SEC’s “radical regulatory agenda”.

Just recently, SEC Chair Gary Gensler highlighted the grave concern regarding Scope 3 emissions. He said that “Scope 3 disclosure is not as well developed, there’s not as many companies putting it out, and its frankly not yet as reliable“.

If the SEC enacts the proposed rules, they could require U.S. public companies to start reporting climate disclosures by 2025.

While no current guarantee exists that the SEC’s SEC’s proposal will pass in its current form – and it will almost certainly face legal challenges even if it does – other parts of the country have decided to act independently.

For instance, in California, Governor Newsom will soon sign Senate Bills 253 and 261 into law. Not only that, but these bills also have even more stringent requirements than what’s in the SEC’s proposal.

Combined, these rules – the first of their kind in the U.S. – would make climate disclosure mandatory for all businesses with over $1 billion in annual revenue operating in the state of California. Affecting both public and private corporations, these bills would apply to an estimated 5,344 companies. In addition, the bills would also require not only S1+S2 emissions reporting by 2026, but also S3 reporting by 2027.

Companies with an annual revenue over $500 million must start disclosing climate-related financial risks by the end of 2024.

Over in New York, Senate Bill 2023-S897A would roughly do the same thing as California’s SB253. It applies to U.S.-based companies doing business in New York with annual revenues exceeding $1 billion.

S897A is currently sitting with New York’s Senate Finance Committee. So it won’t come into effect until well after California’s SB253 does.

At the end of the day, other arms of the government will simply enact the same requirements. Companies operating in Europe already have to comply with climate disclosure regulations. And those who want to operate in California will soon have to follow suit.

New York and other blue states are likely to enforce climate disclosure reporting soon, forcing companies to either comply or risk losing access to large potential markets across the U.S. and the rest of the world.

As a partner at U.S. law firm Ropes & Gray LLP, one of the largest law firms in the world, put it:

“The horse has already left the barn on climate risk disclosure.”

And despite the best efforts of business lobbyists and attorneys, there’ll be no getting the horse back in.

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Zimbabwe Allows Developers to Keep More Profits from Carbon Credits

Zimbabwe has amended its new carbon law governing carbon credit projects, dropping the initial plan to give 25% of the revenue to local communities to allow developers to keep a greater share of the profits. 

Project developers no longer have to give up a quarter of their 70% share of profit as previously mandated. But the Southern African nation will still keep its 30% share and hand it over to state stakeholders.  

Attracting the Right Investors

Explaining the big amendment, the environment and climate minister Mangaliso Ndlovu said:

“We are doing this to be competitive in attracting the right investors, as every project is an investment in communities. They will still benefit from the 30% that goes to the government.” 

In May, Zimbabwe announced that it will take 50% of total revenue from carbon credit projects operating in the country. This leaves foreign investors limited to 30% while the remaining 20% will go to host communities. 

Closely regulating voluntary carbon credit trading will help curb greenwashing and ensure benefits for local communities. 

Zimbabwe is the 12th largest carbon offsets producer in the world. It delivered over 4 million carbon credits from various projects in 2022. The nation’s largest project is managed by the South Pole, involving hundreds of thousands hectares of forest in Kariba. 

While on the African continent, the country ranks top 3 among carbon credit producers, representing about of total production. 

Just last month, Zimbabwe said that at least 25% of the developer’s 70% share will go to local authorities. But this time around, the South African government announced that it will let developers take all its profit share.

The 30% Environmental Levy includes various lines: climate change adaptation and low carbon initiatives, loss and damage relief, local authority levies, admin costs, and the Treasury. 

The most recent amendment was welcomed by project developers wanting to take a bigger share of the $2 billion global voluntary carbon credit market. The Zimbabwe Carbon Association, in particular, remarked that the change removes the burden from developers, enabling them to focus on project activities.  

With Market-Based Climate Action

However, for some consultants, the amendment represents the failure of the government to have control over its own resources. 

One consultant remarked that “the world is moving towards market-based climate action”, and this made Zimbabwe a part of that scenario. 

Zimbabwe improved its climate ambition by setting a 40% emissions reduction target by 2030, up from the 33% initial target.


The country has since then adopted the voluntary carbon market scheme rather than opt for a compliance market. Overall, the global carbon market, including both voluntary and compliance, could reach $22 trillion by 2050

Each credit represents one tonne of CO2 avoided or removed from the atmosphere. The credits are bought and used by companies and other entities looking to offset their carbon emissions. 

Under the voluntary mechanism, the government doesn’t have full control of the carbon market. Still, it’s gaining momentum in Africa.

Zambia, the 5th biggest producer of carbon credits in the continent, also has plans to follow Zimbabwe’s scheme. 

In July this year, Tanzania revealed that it will be a recipient of more than $20bln carbon credit investment. Meanwhile, Kenya, the region’s largest supplier of carbon credits, is currently regulating its own carbon market.

African governments are taking actions to position themselves strategically in the growing carbon market. They’re developing schemes and making changes to ensure that their carbon projects are catching investors’ eyes for developing climate solutions.

Zimbabwe’s decision to amend its carbon law reflects a shifting landscape in carbon markets. The move underscores the importance of balancing economic interests with environmental and community benefits.

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Suriname Takes the Lead in Selling Carbon Credits Under Paris Agreement

One of the few carbon-negative countries, Suriname, aims to be the first nation to sell carbon credits created by the Paris Agreement also known as the “Internationally Transferable Mitigation Outcomes” or ITMOs.

Suriname’s carbon credits use a baseline of carbon stock its rainforest stores as it registers with the United Nations. Any increase in the carbon stock represents corresponding emission reductions, which generates the equivalent carbon credits.

The Paris Agreement suggests that nations can sell those emission reductions in the form of ITMOs to other entities seeking to use them toward their own climate targets.

Government-Backed Carbon Credits

Forests cover around 95% of the South American nation, serving as significant carbon sinks benefiting the entire planet. The deforestation rate in the country stands at only 0.05% to 0.07%, making the country carbon-negative. Its forests capture carbon more than the nation emits. 

As per the U.N. REDD+ program, Suriname has registered an emission reduction of 4.8 million metric tons of CO2 for 2021. This gives the country the same amount of carbon credits, 4.8 million because each tonne equals one credit.

These credits, also called ITMOs, are integral to Suriname’s economic and environmental policies, said President Chan Santokhi. He further noted that it will be the “beginning of the long-awaited access to climate finance.”

Suriname can use the ITMOs toward its Paris Agreement targets, but companies can also buy them to offset their own climate goals. The heavily forested nation can issue the ITMO credits within weeks. 

According to the country’s advisor for the sale, thirty companies were evaluating if they were going to buy the ITMO credits. But there’s no mention of the credit price and the volume of the issuance.

The planned sale is a bid to draw in investors with government-supported carbon credits that adhere to the UN guidelines. Some market players find this relevant as businesses relying on voluntary carbon markets for offsets grow wary of some private projects found to fail in delivering their promised emission reductions. 

ITMOs for Net Zero

At COP27, Ghana presented the landmark bilateral authorized project under a ITMO deal with Switzerland. Governments can use ITMOs for their net zero targets. 

If Suriname’s first ITMO credits sale proves to be a success, it will snowball, attracting other countries to follow suit. 

Honduras and Belize will take Suriname’s lead and will issue their own ITMOs, too. They will issue 10 million credits each by 2024. If that happens, it can help increase demand signals for ITMOs. 

This could have never been more timely as nations attending this year’s global climate summit, COP28, in Dubai in November to December are required to report on the progress of their climate targets.

Governments have set their carbon emissions caps. Those that go beyond the limit can sell the credits to those that weren’t able to do so. As the cap decreases, carbon levels also fall. 

It works the same as how companies use carbon offsets toward their net zero targets. And while developed nations also have to prioritize intensive carbon reduction efforts, chances are they will still need carbon credits.

For instance, the United States aims to achieve reductions of 25% by 2025 versus 2005 CO2 emissions levels. But experts believe that a realistic goal would be 17%. Any emissions left unabated can be compensated by buying ITMOs from carbon-negative nations like Suriname. 

The System is Still Lacking, But Sales are Good to Go

A lead policy analyst at Carbon Market Watch, Giles Dufrasne, warned that the REDD+ emissions reductions backing the ITMOs didn’t go through robust verification standards. It will be up to the buyer to assess the credits and request for further information as needed. 

Dufrasne further noted that there are still some technical details being worked at, but current rules are enough to facilitate the sales. This is supported by another carbon market negotiator saying that though the system wasn’t fully established, the sale can push through and be registered later when the system is up and running.

Commenting on this, a REDD+ expert Gustavo Silva-Chavez, said: 

“It may not be a perfect system, but it’s better than nothing… By the time it gets perfect, it’s going to be in 20 years and the forests are gone.”

Prior to Suriname’s news, Gabon had announced that it would issue ITMO credits back in 2022. However, the African nation faced criticisms that its forests actually didn’t reduce emissions. The country held up the plan until a military coup further caused problems, making the plan unclear. 

Suriname’s President Santokhi recently led a ground-breaking ceremony for the country’s mangrove carbon credit and agroforestry projects. This is in partnership with Klimat X, a provider of high-quality carbon credits from afforestation and reforestation projects.

Klimat X had signed an agreement with Suriname’s national government to develop mangrove and agroforestry carbon credit projects. The company has built a presence in the country and actively conducts fieldwork to establish project size and feasibility.

Leveraging its extensive rainforests as carbon sinks, Suriname stands to generate revenue from internationally transferable mitigation outcomes (ITMOs) while contributing to global climate goals. This initiative could set a precedent and provide a lifeline for countries struggling to meet their net zero targets.

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IEA’s 2023 Net Zero Roadmap: Tripling Renewables and Electrifying the Energy Transition

The International Energy Agency’s (IEA) latest Net Zero Roadmap suggests that tripling renewables capacity to 11,000 GW by 2030 is one way to reach global climate goals. 

The IEA’s 2023 Net Zero Roadmap outlines a global pathway to be on track with the 1.5 ̊C goal. It was first published in 2021, from which the energy sector has seen pivotal shifts. 

IEA’s Updated Roadmap to Net Zero by 2050

The updated version also calls for unified efforts to help reduce global warming as world leaders coming together at the upcoming COP28 in Dubai in November. 

Ramping Up Renewables Capacity

The agency said that ramping up renewables, alongside improving energy efficiency, reducing methane emissions, and increasing electrification will bring over 80% of emissions reductions needed by 2030. 

The roadmap indicates that tripling global installed renewable energy capacity to 11,000 gigawatts by 2030 will achieve the largest emissions reductions.

Source: IEA. Licence: CC BY 4.0

Under the NZE Scenario, the ramping up of clean energy is the key factor leading to a drop in fossil fuel demand of more than 25% this decade. This, plus supportive policies like repurposing of coal-fired plants are crucial to give more room for clean energy to grow. 

Renewable power sources, such as solar PV and wind, are now widely accessible and cost effective. They are also well understood and deployed rapidly. In fact, policy systems have now placed advanced economies, and China, on track to contribute significantly (85%) to this goal. 

However, developing economies and emerging markets still need more international support and stronger policies.

For all nations, hastening permitting lead time, modernizing the grids, fixing supply chain issues, and adopting variable renewables are essential. 

Earlier this month, the G20 countries heed to support the tripling of renewables. With that, they agreed that a $4 trillion/year needs to accelerate investment in the clean energy transition.

In June, the IEA reported that global additions of renewable power capacity will grow by a third this year. The agency said that it will increase to over 440 GW, the largest growth ever reported. Next year, global renewable electricity capacity is projected to rise to 4,500 GW. 

RELATED: Renewable Energy to Break Records in 2023 IEA Says

IEA Executive Director Fatih Birol remarked that despite oil price concerns impacting energy security for countries, this year is more optimistic than 2 years ago. He particularly noted that:

“We see legitimate reasons to be hopeful because a new clean energy economy is emerging. While we see the path to 1.5 C narrowing, a spectacular increase in clean techs is keeping the door open.”

Tripling of renewable energy, plus doubling the annual rate of energy intensity improvement are key to ending new coal plants. Energy improvements stem from three crucial measures: improvement in technical efficiency of equipment, more efficient use of energy and materials, and switch to more efficient fuels, particularly electricity. 

Electricity is the “New Oil” 

Under IEA’s NZE Scenario, rapidly advancing electrification technologies like electric vehicles and heat pumps would be responsible for a fifth of the emissions reductions by 2030. 

In particular, EV sales will account for ⅔ of new car sales by the same year. EV production goals from major automakers indicate that achieving such an ambitious goal is possible. 

Likewise, heat pumps are also growing globally by 11% last year, with China being still the top market. But others are keeping up such as the EU, which is ahead of the annual growth needed to 2030.

The agency said that as electricity is emerging as the “new oil” of the world’s energy system, funding for power networks must ramp up. This entails ensuring massive growth of battery energy storage and other low-emissions technologies. These include carbon capture, utilization and storage (CCUS), hydrogen, and hydrogen-based fuels, the IEA said.

COP28 Action Plan Shares The Same Goal

Those clean energy technologies, particularly renewables and hydrogen production, are among the major agenda at the upcoming COP28

COP28 President-Designate Dr. Sultan Al Jaber lays out an action plan heavily focused on fast-tracking the energy transition.

One key aspect of the plan is to “triple renewable energy capacity, double energy efficiency and double hydrogen production to 180 M tons/year by 2030.”

But with rising oil prices and demand hitting record levels, energy security concerns are also heating up in the lead-up to COP28. The tension gets even higher with the UAE, a major oil nation expanding its production, as the climate summit host. 

The energy sector is changing faster than most people expect but much more needs to be done urgently. 

The IEA’s 2023 Net Zero Roadmap emphasizes the critical role of renewable energy in achieving global climate goals, alongside energy efficiency improvements, and increased electrification. As world leaders prepare to converge at COP28 in Dubai, the roadmap sets a clear path for addressing climate change and accelerating the transition to a clean energy future.

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Battery Startups Attract Mega-Investments and American Lithium’s Discovery

Here’s a Key Summary:

Battery Boom: Discover how battery startups are securing record-breaking investments, reflecting the burgeoning potential of the sector.
A Lithium Gamechanger: Delve into American Lithium Corp’s groundbreaking lithium discovery near Quelcaya, positioning the region as a potential lithium hub.

In the recent surge of venture capital, battery startups are making waves with some substantial financing rounds.

According to data from Crunchbase in just the past month, three notable financings exceeded $1 billion:

Verkor, a French endeavor concentrating on eco-friendly battery production, secured $2.1 billion, including a whopping $900 million in its Series C. They’re gearing up to launch their first gigafactory by 2025.
Redwood Materials, a Nevada brainchild of ex-Tesla CTO JB Straubel, specialized in battery recycling, amassed $1 billion in its Series D, propelling their total financing past $3.8 billion. They’ve also recently integrated Redux Recycling, a German counterpart.
Northvolt, championing environmentally-conscious lithium-ion batteries, procured a substantial $1.2 billion convertible note. The Stockholm-based titan is amidst expanding its Polish manufacturing operations.

While 2023’s global venture funding threatens to surpass the records set in the last two years, the US market inches close to its 2021 peak.

Given the global venture drop this year, these numbers in the battery sector are a significant anomaly. The urgency couldn’t be clearer with recent climate change projections painting a bleak picture, emphasizing the importance of advanced battery technology and sustainable production.

Charging Up: 3 Pillars of Investor Focus

Investor focus appears to revolve around three axes:

eco-friendly battery production,
augmented EV battery manufacturing, and
optimizing renewable energy’s grid storage.

Highlighting the sustainability angle, prominent investments in battery recycling are evident.

Redwood Materials isn’t alone; Ascend Elements from Massachusetts, crafting sustainable battery materials from discarded counterparts, landed a hefty $460 million Series D. Meanwhile, China’s Zhejiang Tianneng New Material, centered on lithium-ion battery recycling, received a fresh $137 million boost.

Such investments are critical for an eco-friendlier EV supply chain, which reduces dependency on scarce mineral mining.

Grid energy storage is also in the limelight. Our Next Energy from Michigan, focusing on storage for EVs and grids, has accumulated $390 million so far. Germany’s Stabl Energy recently secured $16 million for its energy storage solutions.

The EV boom is undoubtedly a primary force propelling these investments. Key players like Verkor and Northvolt have automotive giants backing them, emphasizing the industry’s battery dependency. Moreover, innovations in electric bikes and motorcycles are gaining traction, evidenced by India’s Battery Smart raising $33 million recently for battery-swapping solutions.

Lithium-ion Battery Demand 

The demand for lithium-powered EV batteries is also projected to grow annually between 2022 and 2030 at over 22% rate. The EV transport segment will also snag a market share of 93% in 2030, standing at 3.7 TWh. 

Despite the substantial funds funneled into battery startups, the journey to a comprehensive shift to EVs might require more capital. What’s clear, though, is that investment momentum is building, setting the stage for the next era of scalable battery innovation.

Amid this trend, a breakthrough has emerged on the lithium front.

American Lithium’s Fresh Find Bolsters the Market

American Lithium Corp recently unveiled a significant lithium discovery near Quelcaya, 6km west of Falchani, revealing assays up to 2,668 ppm lithium over an impressive 222 meters of mineralization. 

This positions the region as an emerging lithium district.

Located near the village of Quelcaya in Puno, southeastern Peru, the Quelcaya exploration project showcases three lithium mineralization areas situated 5.5 to 11 kilometers west of the company’s Falchani deposit. The discovery, characterized by different mineralization from Falchani, holds promise for pre-concentration, as evidenced by initial metallurgical analyses.

Simon Clarke, CEO of American Lithium, enthusiastically shared, 

This discovery underscores our belief that the Macusani Plateau, beyond just housing the Falchani lithium deposit, has the makings of a significant lithium district under our control.”

Furthermore, the inaugural drill hole in Quelcaya’s area intersected lithium mineralization in certain granitic rocks beneath weakly mineralized cover rocks. These findings point towards the possibility of enhancing lithium concentrations through pre-concentration techniques, with ongoing lab trials exploring this avenue.

The core of the report underscores the crystalline nature of the new lithium-rich granitoid, indicating the potential to separate non-lithium-bearing phases. Leaching test work has been initiated on whole rock samples to gauge compatibility with Falchani’s existing processes.

The program features rigorous analytical quality assurance, including systematic insertion of company standards, blanks, and duplicate samples.

Investments in battery startups and the breakthroughs in lithium discovery signal a dynamic shift in the green energy space. With ventures like American Lithium pushing the envelope, the future seems electrifying.

Disclosure: Owners, members, directors and employees of have/may have stock or option position in any of the companies mentioned: AMLI receives compensation for this publication and has a business relationship with any company whose stock(s) is/are mentioned in this article

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

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The post Battery Startups Attract Mega-Investments and American Lithium’s Discovery appeared first on Carbon Credits.

Your Ticket to the Capitol: Hydrogen Americas 2023 Summit & Exhibition

When the U.S. Department of Energy speaks, investors and corporations listen.

As the popularity of the Hydrogen sector continues to attract attention in 2023 and grow, CarbonCredits has been working behind the scenes to bring more value.

One of the largest Hydrogen summits is coming up, and we’ve arranged a VIP ticket for anyone wanting to go. 

Hydrogen Americas October 2-3, 2023 in Washington DC

After the rousing success of the sold-out 2022 summit, the Sustainable Energy Council (SEC) in collaboration with the U.S. Department of Energy (DOE) is thrilled to extend an invitation to our readers for the much-anticipated Hydrogen Americas Summit & Exhibition

It’s all happening on the 2nd and 3rd of October 2023 in the heart of Washington D.C.

The Global Hydrogen Landscape in 2023 

This year is set to reshape the hydrogen sector. With global powerhouses like the EU, Canada, and Australia unveiling their funding plans in response to the U.S.’s Inflation Reduction Act, we’re witnessing the dawn of an unprecedented hydrogen race.

And guess what? You have the chance to be at its epicenter.

Connect, Collaborate & Conquer: Dive into a sea of opportunities, rubbing shoulders with over 3000 industry forerunners

U.S. Secretary of Energy: Hon. Jennifer Granholm
Brazil’s Minister of Mines and Energy: Hon Alexandre Silveira
Director of Hydrogen & Fuel Cell Technologies: Dr. Sunita Satyapal
President of Air Liquide: Katie Ellet
Chairman, Air Products: Seifi Ghasemi
BP VP of Hydrogen, U.S.: Tomeka McLeod
Lind VP Clean Energy: David Burns
BMW North America: Thiemo Schalk
CEO of Powertech Labs: Pierre Poulain
Siemens, N.A. President: Richard Voorberg
Co-Founder and VP, Svante: Brett Henkel
Chevron, VP Hydrogen: Austin Knight

And many, many more high ranking government and corporate attendees are lining up.

Why Should You Attend?

Networking: Forge new business partnerships that could redefine the trajectory of your hydrogen projects.
Insight: Gain access to unparalleled industry knowledge and intelligence, straight from the world’s leading experts.
Exhibition: Marvel at the world’s latest technological innovations and new hydrogen solutions.

The Hydrogen Americas 2022 summit was a sell-out. And we expect nothing less this year.

Secure one of the 100 discount spots using the code “CACR10HAS” – Click Here to Register Now

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Indonesia Launches Carbon Credit Market In A Leap Toward Net Zero

Indonesia launched a carbon credit trading market as part of its goal to reduce carbon emissions and achieve net zero by 2060.

Southeast Asia’s largest emitter selected the Indonesia Stock Exchange (IDX) as the exchange for trading carbon credits. The carbon exchange will also promote energy transition and mitigate the climate impact of the country’s coal-dominated power sector. 

More importantly, the world’s 3rd-largest rainforest nation aims to contribute faster to achieving the global Net Zero goal. 

Carbon Market is Key For Indonesia’s Net Zero Push

President Joko Widodo is confident that Indonesia has a huge potential in advancing nature-based carbon reduction efforts, saying that:

“I am very optimistic that Indonesia can become the world’s carbon (market) axis as long as concrete steps are taken consistently and jointly by all stakeholders.”

The president further noted that their carbon credit market would reach the value of over $194 billion. The country’s leader has been clear about its faith in the carbon market and carbon pricing as “part of the efforts to address climate change”, he said at the COP26 in 2021.

Two years later, the market was launched under the oversight of the Financial Services Authority (OJK). OJK’s Head Mahendra Siregar said that they hope coal power plants will join the carbon trading exchange immediately this year. 

More than 99 coal-fired power plants will participate in trading carbon credits, representing 86% of Indonesia’s total active coal plants. The country has been intensely focusing on finding funds to decarbonize its power sector. It has seen the highest ever growth in coal emissions last year.

RELATED: Indonesia’s Coal Emissions at Record High, Up 33%

After consistently negotiating the details of the climate finance package inked last year by President Jokowi and U.S. President Joe Biden, a final plan for the nation’s $20 billion climate deal could be up by next month.

A draft of the plan has been circulated to partner groups and will be open for public consultation.

However, the first batch of carbon credits traded during the launch were from carbon offset projects by PT Pertamina Geothermal Energy’s Lahendong power plant in Sulawesi island. They include nearly 460,000 metric tonnes of CO2

Carbon prices started at $4.51/credit.

Buyers included the nation’s largest banks, Bank Central Asia and Bank Mandiri, mining firms, and state energy firm Pertamina. 

Carbon Credit Projects Must Meet Regulations

Users of carbon exchange services include emissions trading companies, non-emission trading companies, project owners, and other entities approved by the OJK. 

The Southeast Asian country has been strict in implementing its rules governing carbon projects. The Indonesian government has suspended the validation of its major carbon projects. These include the following projects:

Rimba Raya Biodiversity Reserve: a project in Central Kalimantan that protects 91,215 hectares of rich, tropical peat swamp forests, preserves ecosystem diversity and endangered species.
Sebangau National Park: protects 5,500 km2 of tropical peat forest home to >5800 critically endangered Bornean orangutans.
Riau Ecosystem Restoration (RER): a private sector-led project that restore and conserve high conservation areas on Kampar Peninsula and Padang Island in Sumatra. 

Validating these projects was suspended in April 2022 but in December, Rimba Raya was validated by Indonesia’s carbon registry, SNR. 

Carbon projects in the country have to meet Presidential Regulation No. 98/2021 and other relevant laws first to start generating carbon credits. The Presidential Decree regulates carbon trading using emissions trading and offsets.

Other Plans to Back Up Carbon Trading

Initially, trading carbon credits in IDX can be voluntary. But the Indonesian government is also working on a plan for another regulation on carbon emissions. A senior government official said at the launch that it would include a carbon tax

The carbon credit market was originally to incentivize the power sector emitters to limit their emissions. Some of the country’s largest coal power plants started trading emissions allowances earlier this year.

But apart from the power sector, the government will also place a cap on carbon emissions for other sectors. These include forestry, agriculture, waste management, and industrial processes and product use. 

The rainforest nation also has plans to apply international standards for carbon trading and be recognized by other markets abroad. This is to bring its carbon credits to foreign buyers looking to offset their emissions at home. 

The new emission trading system is using blockchain technology to record its carbon credit transactions. 

Indonesia’s bold move to launch an emissions trading system is a significant step in its journey towards reaching its 2060 net zero goal. By encouraging emissions reductions across various sectors and promoting nature-based solutions, the country aims to play a pivotal role in the global carbon market.

The post Indonesia Launches Carbon Credit Market In A Leap Toward Net Zero appeared first on Carbon Credits.

Deep Sky & Mission Zero Partner to Turn Canada into A Carbon Removal Hub

Deep Sky, a Canadian carbon removal project developer, and Mission Zero Technologies (MZT), a UK-based Direct Air Capture (DAC) company worked together to deploy DAC facilities in Canada. 

The deal marks a significant milestone for the emerging carbon removal industry in Canada. Deep Sky aims to turn the country into a world-leading hub for carbon removal.

First-of-a-Kind DAC Demonstration

The Montreal-based carbon removal company is building the world’s first gigaton-scale carbon capture. They seek to remove billions of tons of CO2 from the atmosphere and permanently store it underground.

Deep Sky’s partnership with Mission Zero starts with a first-of-a-kind (FOAK) demonstration of the latter’s DAC technology that captures 250 tons of CO₂ each year. The ultimate goal is to develop commercial facilities that capture 100,000 to 1 million tons of CO2 annually.

The FOAK facility follows successful demonstrations of Mission Zero’s DAC technology in London. The same tech will also be used later this 2023 to produce synthetic aviation fuels and building materials at 2 sites in the UK. 

The FOAK demonstration plant will tap into Quebec’s massive source of renewable hydroelectric energy. It will be up next year. 

Speaking for their agreement, Deep Sky CEO Damien Steel noted that:

“Mission Zero is a pioneer, establishing a modularized DAC technology that is projected to reduce both energy consumption and cost. With the addition of Mission Zero’s tech,… commercialized carbon removal at scale is within reach.”

Deep Sky will leverage Mission Zero’s DAC system as part of its Alpha Lab test facility. 

DAC is a carbon removal technology recognized globally and identified by the Intergovernmental Panel on Climate Change (IPCC) as critical for meeting global climate targets. By replacing fossil fuels as a source of carbon, it generates both environmental and economic benefits.

RELATED: Occidental to Buy DAC Innovator for $1.1B

How Does Mission Zero’s DAC Tech Work?

Mission Zero Technologies has rapidly grown from lab to pilot by getting support from the world’s renowned climate VC Breakthrough Energy Ventures and the famous XPRIZE Foundation. Other large companies like Stripe and Anglo American, as well as the UK Government, are also backing up the DAC company. 

Mission Zero’s DAC system is also easy to integrate with renewable power sources. It produces high-grade CO2 via its dynamic electrochemical separation technology. 

A study revealed that electrochemical methods are a more efficient way of capturing CO2. They use special liquids that can hold more carbon at once, making it even more efficient.

Mission Zero’s DAC process also leverages existing, scaled and mature technologies, including electrochemical water purification and cooling towers. It also doesn’t need heat, further reducing total energy consumption and uses 3x less energy than other approaches. 

Mission Zero’s DAC process is:

Optimized for deployability: it’s compact, modular, electrically-powered, and works under ambient conditions. 

Energy-efficient: the process units consume less than 800 kWh/tCO2.

Off-the-shelf: components are off-the-shelf, made in large volumes already. 

These properties make Mission Zero’s DAC technology an ideal choice for Deep Sky’s Lab test facility. 

By utilizing mature, off-the-shelf units in a heat-free system, the company’s technology eliminates supply chain uncertainties while delivering the necessary energy efficiency to rapidly scale this kind of carbon removal after demonstration. 

Mission Zero Technologies believe that permanently locking CO₂ away into rock through mineralization is the gold standard for carbon removal. 

Combining their energy-efficient electrochemical DAC technology with mineralization at scale offers one of the most effective ways to tackle historic carbon emissions. What it needs is to pair it with existing carbon removal systems strategically positioned in the right places. 

Deep Sky fits into that requirement. 

Per Mission Zero CEO Dr. Nicholas Chadwick, their partnership with the Canadian carbon removal company enriches their “own industry’s understanding of operating DAC in diverse climates and geographies.”

It will also help them expand the application of this crucial carbon removal technology to maximize positive climate impact. 

RELATED: U.S. to Invest $1.2B in DAC Projects

Just last month, Deep Sky announced collaboration with Svante Technologies to study carbon sequestration in Quebec. It’s the company’s first venture to assess carbon capture and storage (CCS) technologies as a technological climate solution. 

Deep Sky’s collaboration with Mission Zero underscores the growing importance of carbon removal technology in combating climate change. Their joint efforts seek to establish Canada as a significant player in carbon removal, showcasing the potential of DAC for a cleaner, more sustainable future.

The post Deep Sky & Mission Zero Partner to Turn Canada into A Carbon Removal Hub appeared first on Carbon Credits.

Behind Closed NYSE Doors at ICE’s Climate & Capital Summit

Last week, ensconced behind the ornate wood trim molding of the New York Stock Exchange’s 7th floor, luminaries in the realm of climate finance convened for the ICE Climate and Capital Conference, which was sponsored by FinTech.TV and Gitterman Asset Management.

The “AIR” We Should Breathe

This year’s agenda was woven around three pillars aptly acronymed “AIR”: Adaptation, Innovation, and Regulation. 

These are the cornerstones that will define the response to the multifaceted challenges ahead: the tangible threats of climate change, impending biodiversity losses, mounting human migrations, and the maelstrom of ever-shifting regulatory edicts.

Jeff Gitterman of Gitterman Asset Management set the stage, unveiling a series of insightful panels and dialogues with leading figures. 

The objective was singular and urgent: furnishing attendees with strategies not only to mitigate risk but also to spur innovations. Innovations geared toward reducing emissions and buttressing the world’s most vulnerable against the advancing climate menace.

From the array of expert speakers, three stood out, each illuminating a facet of the way forward.

Lisa Larroque Alexander of SEMPRA weighed in on the financing aspect.

As one of the most prodigious issuers of sustainable debt, SEMPRA feels the pulse of capital costs. Alexander anticipates methane mitigation to be a cornerstone discussion at the upcoming COP28 conference.

She evocatively quoted Churchill, “We’ve run out of money, now it’s time to think.” This crystallizes the drive to strategize when resources dwindle. 

She also expressed keen interest and foreshadowing in how carbon credits might be used post the Inflation Reduction Act (IRA) – a critical juncture that will mold our financial strategies. 

With the International Energy Agency forecasting a staggering $10 trillion for essential grid enhancements in the forthcoming years, the roadmap is unmistakable: innovate or stagnate.

Hanh Nguyen of OCI Global articulated her vision for a recalibrated carbon economy. She envisions the Carbon Model Adjustment Mechanism emerging as a pivotal catalyst, much like the EU’s carbon tax. 

Her firm belief in the hydrogen economy’s potential resonated. 

According to OCI, green methanol will surge until 2030, post which e-ammonia, with its pristine zero-emission credentials, will likely reign supreme by 2050.

Lastly, Lesley Biddle, a senior advisor at the U.S. Department of Energy, gave a primer on the tools at the U.S. DoE’s disposal to drive decarbonization.

The Infrastructure Bill, with its potent mix of debt and equity, alongside the Inflation Reduction Act’s provisions of credits and grants, earmarks an impressive $90 billion for deployment by summer 2024. Biddle hinted at a brisker rollout of “Hydrogen Hubs” and underscored the need to augment storage for hydrogen and capture.

The Triad For Fighting Climate Change

As the curtain fell on this year’s ICE Climate and Capital Conference, the takeaway was unequivocal. The triad of Adaptation, Innovation, and Regulation will not only guide but also drive our responses toward encroaching climate adversities. And there is A LOT of money available to companies and entrepreneurs willing to take on and solve these challenges.

It’s not just about grappling with known demons but also about anticipating the unknown, sculpting strategies in real-time, and ensuring a world where vulnerabilities are minimized and resilience is the watchword.

To watch the conference, click here:

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