Aviation is one of the most carbon-intensive sectors and is tough to decarbonize. It contributes approximately 2-3% of global CO2 emissions. With the sector projected to grow, addressing its environmental impact is more crucial than ever. Airlines and manufacturers increasingly invest in sustainable aviation fuels, electric and hybrid aircraft technology, and improved operational efficiencies. In this mission, Boeing has immensely supported commercial aviation’s path toward net zero carbon emissions. Notably, initiatives like Boeing’s “Cascade” underscore a collective commitment to a greener, more sustainable future for air travel.

The Latest Advances in Aviation Decarbonization

Global aviation, including passenger and freight flights, emits around 1BT of CO2 annually.

The aviation sector faces significant challenges in reducing emissions due to specific parameters like the weight and size of the aircraft, long innovation cycles, and safety issues. Key technologies like Sustainable Aviation Fuels (SAFs) remain costly and are not yet widely adopted. According to last year’s McKinsey analysis, many stakeholders across the aviation value chain have committed to sustainability goals, including emission reductions, SAF adoption targets, and membership in coalitions. Furthermore, The Science Based Targets initiative (SBTi) has emerged as a leading standard, with 25 airlines and aerospace companies setting science-based targets as of April 2023.

RELATED: Click this link to understand SBTi

Last year’s press release describes that Boeing Airbus formally committed to the Science Based Targets initiative (SBTi) by defining science-based targets for its entire emissions portfolio in 2022. These near-term targets have been independently assessed and approved by the SBTi.

Airbus aims to reduce its Scope 1 and Scope 2 industrial emissions by up to 63% by 2030, aligning with a 1.5°C pathway consistent with the Paris Agreement.

Additionally, the company plans to decrease GHG emissions intensity from its commercial aircraft in service (Scope 3 – Use of Sold Product) by 46% by 2035, relative to a 2015 baseline. These goals underscore Airbus’s proactive stance in mitigating climate impact across its operations and product lifecycle.

Image: CO2 emissions in aviation in the Net Zero Scenario, 2000-2030

source: IEA

Boeing Takes on Climate Change Challenges

Last year Boeing disclosed its Scope 3 emissions, which arise when customers use their products. This move is in response to investor and climate activist demands for transparency regarding companies’ efforts to minimize their environmental footprint.

Remarkably for the third time in 2022, Boeing achieved net-zero carbon emissions at manufacturing sites and in business travel. David L. Calhoun, CEO of Boeing envisions that in the era of more sustainable aerospace, there is anticipation to achieve it together.

The key highlights from the 2023 Sustainability report are: The strategy for Scope 1 and Scope 2 emissions supports a 1.5 degrees Celsius global warming scenario and global climate goals. Subsequently, aligning with the goals of the Paris Agreement.

Detailed Picture of Boeing’s operational target progress:

source: Boeing

MUST READ: Manta Ray-Inspired Plane Could be the Next “SpaceX of Aviation

Harnessing Sustainable Aviation Fuel

The International Air Transport Association (IATA) projects that Sustainable Aviation Fuel (SAF) could provide approximately 65% of the emissions reduction necessary for aviation to achieve net zero CO2 emissions by 2050.

What is Sustainable Aviation Fuel?

Sustainable Aviation Fuel (SAF) is a liquid fuel used in commercial aviation that reduces CO2 emissions by up to 80%. It is derived from various sources including waste oil, fats, green and municipal waste, and non-food crops. SAF can also be produced synthetically by capturing carbon directly from the air. It uses feedstocks that do not compete with food crops, or water supplies, or contribute to forest degradation.

Unlike fossil fuels that release previously stored carbon into the atmosphere, SAF recycles CO2 absorbed by biomass during its lifecycle, reducing overall emissions.

Renewable energy, including SAF, green hydrogen, and batteries, plays a crucial role in reducing carbon emissions throughout Boeing’s operations and products. Boeing believes SAF is vital for decarbonizing aviation and advocates for a strategy that integrates multiple renewable energy solutions. This approach includes advancing the viability and safe implementation of various renewable energy carriers on aircraft.

It is collaborating with suppliers to ensure all commercial airplanes delivered by 2030 are compatible with 100% sustainable aviation fuel (SAF).
In 2022, the airliner purchased 5.6 million gallons (21.2 million liters) of blended SAF to support commercial operations.

Strategic Partnerships

Boeing and NASA continued their partnership to test SAF emissions, conducting tests on the 2022 Boeing ecoDemonstrator, which included a 777-200ER with Rolls-Royce Trent 800 engines and a 787-10 with GEnx-1B engines.

It launched the Cascade Climate Impact Model (Cascade) two years back. This web application utilizes global digital technical data to illustrate the environmental impact of different sustainable aviation options. It also offers stakeholders a data-driven tool to navigate decisions towards achieving the industry’s net-zero 2050 goal.

Ted Colbert, president and CEO of Boeing Defense, Space & Security

“We believe that operational effectiveness and sustainability are two sides of the same coin. A more sustainable, lower-cost, energy-efficient defense enterprise is more operationally effective. That’s why we have a history of partnering with our customers to pioneer the use of sustainable aviation fuels and are leveraging digital design and production to reduce our carbon footprint throughout the life cycle of our products.”

The air company aims to achieve 100% renewable energy in operations by 2030, reaching 35% renewable electricity in 2022 through increased usage and the purchase of renewable energy credits.

Is Boeing Facing the Turbulence Right Now?

However, lately, the top-notch airliner has been making news for the infamous, Boeing Scandal. The families of victims in two Boeing 737 Max crashes accused the company of the “deadliest corporate crime in US history”. They have urged the Justice Department to impose the maximum $24 billion fine in a potential criminal trial. As per the latest reports, Prosecutors have not yet finalized the proceedings. The Justice Department may require the aircraft maker to install an independent federal monitor for safety and quality oversight.

FURTHER READING: Google Signs Up Shell’s SAF Program to Cut Business Travel Emissions

The post Flying Green: Boeing’s Plan to Propel Aviation Towards Net Zero appeared first on Carbon Credits.

In 2024, Europe’s market for renewable power purchase agreements (PPAs) is poised for substantial growth. Moreover, major mergers and acquisitions (M&A) also happened in the region, targeting energy companies. These key developments indicate renewed investor interest in renewable energy after a slow first quarter. 

The Surge of High-Value European Green Energy Deals 

The year 2023 was the busiest and most dynamic period in Europe’s renewable energy power purchase agreement history. Yet, the market is now entering what experts dubbed its ‘Golden Era’.

Corporate buyers secured 21 TWh/year of green electricity from 10 GW of new projects in the first five months of 2024, maintaining a pace similar to 2023, according to S&P Global Commodity Insights. 

The number of deals increased to 145, compared to 94 in the same period of 2023, indicating more players entering the market. The growth was primarily driven by 10.2 TWh/year of wind PPAs in northern Europe and 7.5 TWh/year of solar PPAs, mainly in Spain.

For the same period, there were three major European M&As targeting energy companies. The largest deal involved US-based Energy Capital Partners acquiring British renewable energy firm Atlantica Sustainable Infrastructure, with a transaction value of €7.25 billion.

Energy Capital will purchase all Atlantica shares with Atlantica’s largest shareholder, Algonquin Power & Utilities, supporting the deal. The transaction is expected to close by early 2025, after which Atlantica will become privately held, delisting from public markets. 

The second-largest deal saw Canadian investor Brookfield Asset Management and co-investor Temasek proposing to acquire a majority stake in Neoen SA, an independent renewable energy producer. Neoen has about 8 GW in operation and under construction, plus 20 GW in development. 

After Brookfield’s Neoen bid announcement, JP Morgan analysts noted that investors appeared to be willing again to invest their money in green energy development pipelines. 

These high-value deals highlight a robust interest in renewable energy, underscoring the sector’s importance not just in Europe but in global energy strategies and investor portfolios.

Market Dynamics, Price Trends, and Regional Challenges

However, deal prices have declined due to lower electricity spot and forward prices, as S&P Global reported. 

Iberian capture prices reached record lows this spring, influenced by bearish fundamentals and increasing solar capacity. In Germany, May’s solar capture price dropped to its lowest since summer 2020, although forward contracts recovered, with the benchmark German year-ahead power contract rising almost 50% from its February lows.

Spain and Italy face unique challenges. In Spain, despite strong corporate interest, volatile market conditions and high interest rates hindered PPA contracting. 

Insufficient grid capacity also posed challenges, a problem shared with Italy and Germany. In Italy, central permitting delays have slowed down project authorization, and restrictive auction systems further complicate the market.

Germany is expected to compete closely with Spain for PPA leadership in Europe. In the first five months of 2024, Germany signed 21 deals for 2 GW of capacity, focusing on utility-scale solar and offshore wind projects. 

Despite regulatory uncertainties, Germany’s large industrial base and tech sector drive PPA demand. New corporate sustainable reporting rules and mandatory datacenter requirements are additional demand drivers.

In the UK, the government-run contract for difference (CFD) auctions are highly attractive, potentially crowding out private sector deals. However, the ongoing Review of Electricity Market Arrangements (REMA) adds uncertainty, causing some market participants to pause activities.

Sectoral Shifts and New Opportunities

While Brookfield has the financial capacity for large-scale deals, few investors can match such substantial investments. Initially, oil majors were expected to be significant players in the renewable energy sector. 

However, the focus on energy security since Russia’s invasion of Ukraine has shifted their priorities. Recently, Norwegian state-owned power producer Statkraft AS completed a €1.8 billion acquisition of Spanish group Enerfín SA.

Additionally, several privately owned developers are anticipated to enter the market this year.

RELEVANT: Private Equity Buys In Renewable Energy Big Time, Almost $15B

Market analysts project that this trend will continue as the cost for deploying renewables are falling significantly. As seen below, RMI data shows that costs drop by around 20% for every doubling of deployment.

Though tech companies remain the leading buyers of PPAs, but the consumer goods, industrial, chemicals, and utility sectors are also emerging as significant offtakers. The rise of artificial intelligence computing power creates new opportunities, with countries like the Nordics and Iberia seeing increased activity. 

Spain, in particular, is becoming a key hub for data centers due to favorable conditions like low prices, low taxes, and renewables access.

The reform of the EU’s electricity market aims to broaden access to PPAs, with government support crucial to make these PPAs financeable.

Overall, 2024 is shaping up to be a pivotal year for Europe’s green power deals, driven by increased corporate commitment to renewable energy, the same trend happening in the U.S., despite facing significant regional and market-specific challenges. 

READ MORE: US Corporations Ramp Up Renewable Energy, Amazon Leads the Pack

The post 2024 is The Golden Era For Europe’s Renewable Energy: Here’s Why appeared first on Carbon Credits.

Bloomberg Outlook 2024

According to the Bloomberg EV Outlook Report, the global electric vehicle (EV) market in 2024 shows varied progress across different regions and segments. Most notably, while overall EV sales are increasing, some markets are slowing, and many automakers have delayed their EV targets. 

We crunched the report and have the following key takeaways, crucial for everyone interested in the industry to know.

Which Regions Are Charging Ahead in EV Sales?

The EV sales growth slowdown varies globally. China, India, and France continue to see healthy growth, while Germany, Italy, and the US face challenges. Meanwhile, Japan’s market is hampered by a lack of EV commitment from major carmakers and no new mini-car models. 

Despite the slowdown, global growth in 2024 aligns with BNEF’s forecasts. Some automakers have reduced their electrification targets, citing high production costs, while others, like Kia and Volvo, show strong results.

Kia aims for 1.6 million EV sales by 2030 and plans to launch an affordable EV3 SUV. Remarkably, Volvo’s EV sales surged 53% in April 2024, driven by the EX30 model.

BNEF projects that global passenger EV sales will grow, though at a slower pace, rising from 13.9 million in 2023 to over 30 million by 2027. The annual growth rate will average 21%, down from 61% between 2020 and 2023. 

By 2027, EVs will comprise 33% of global new passenger vehicle sales, with China and Europe leading at 60% and 41%, respectively. 

The Nordics will reach 90%, while Germany, the UK, and France exceed 40%. The US will see 29% EV sales, slowed by election-related uncertainties. Japan lags behind, but emerging economies like Brazil and India will experience rapid growth. 

Overall, the global EV fleet will expand to over 132 million by 2027, up from 41 million in 2023.

The long-term market outlook for electric vehicles is positive despite near-term challenges. 

Economic improvements are expected to drive continued growth, with EVs reaching 45% of global passenger vehicle sales by 2030 and 73% by 2040. However, Southeast Asia, India, and Brazil will lag behind the global average and require stronger regulatory support.

RELATED: New Monthly EV Sales Record to Kickstart 2024

Decarbonizing Commercial Vehicles

When it comes to decarbonizing commercial vehicles, including vans, trucks, and buses, electrification is also accelerating. 

Electric light-duty delivery vans and trucks are quickly gaining market share in China, South Korea, and parts of Europe, while the US still lags. As seen below, the global e-van market will near one-third of sales by 2030, reaching two-thirds by 2040. 

Electric heavy trucks will become economically viable for most uses by 2030, with initial adoption in urban areas and later expansion to long-haul routes. 

On the other hand, fuel cell trucks will remain viable for some applications, though their future is less certain. Zero-emission trucks will make up 18% of global sales by 2030 and 43% by 2040.

Who Will Drive the Future of Electric Trucks?

New environmental policies in Europe and the US will drive the adoption of electric and fuel-cell trucks. EU CO2 targets suggest high electrification rates by 2030. For instance, municipal buses are rapidly electrifying, expected to exceed 60% of sales by 2030 and 83% by 2040. 

However, global road transport is not yet on a net zero trajectory, and protectionist policies could hinder progress. To achieve zero emissions by 2050, combustion vehicle sales must end by around 2038, with leading markets phasing out earlier, per BNEF analysis. 

The Nordic countries are the only ones projected to fully phase out combustion vehicles before 2038 in the Economic Transition Scenario (ETS). Therefore, governments need to balance industrial strategies with maintaining competition and affordability in the EV market. Stronger regulatory pushes are necessary to bridge the gap between the Economic Transition Scenario and the Net Zero Scenario.

Significant spending is required for both scenarios. 

The cumulative value of EV sales across all segments will reach $9 trillion by 2030 and $63 trillion by 2050 in the Economic Transition Scenario. In the Net Zero Scenario, this value jumps to over $98 trillion by 2050. 

Governments are fiercely competing to develop local supply chains, with EVs and batteries remaining central to industrial policies for decades.

How Lithium Batteries Are Revolutionizing the EV Market

Lithium-iron-phosphate (LFP) batteries are dominating the EV market, reducing the need for metals like nickel and manganese. Competitive pricing is driving improvements in LFP technology, including super-fast charging, cold temperature performance, and higher energy densities. 

LFP is projected to capture over 50% of the global passenger EV market within two years, particularly in China, where many LFP cell manufacturers are based. This shift results in lower-than-expected consumption of nickel and manganese, with 2025 estimates for nickel at 517,000 metric tons and manganese at 131,000 metric tons.

Plug-in hybrids (PHEVs) are experiencing a resurgence, driven mainly by China, which became the largest PHEV market in 2022. The average electric range of PHEVs reached 80 km in 2023, with some models in China exceeding 100 km. 

Chinese PHEV battery packs are nearly twice the size of those in the US and Europe, often designed to meet fuel economy regulations. While PHEVs are seen as a bridge to a zero-emission future, their effectiveness is questionable. If they replace BEVs and aren’t fully utilized in electric mode, they could increase oil demand, undermining their environmental benefits.

READ MORE: Lithium Prices and The Insights into the EV Market’s Pulse

Charging into the Future: What Does a Fully Electric Fleet Mean?

A fully electric vehicle global fleet could consume twice the electricity the US did in 2023, per BNEF market outlook. By 2050, in the Net Zero Scenario, an all-electric vehicle fleet will require about 8,313 TWh of electricity, double the US’s 2023 consumption. 

Despite the increase, EVs can support energy system electrification through smart charging and flexible pricing. The EV charging industry must rapidly mature, requiring $1.6 to $2.5 trillion in infrastructure, installation, and maintenance investment by 2050. 

The adoption of EVs and electrification of commercial vehicles are on the rise, driven by new policies and technological advancements in battery technology. However, significant investments in infrastructure and regulatory support are crucial to sustain this momentum and achieve long-term environmental goals.

The post Is the EV Market’s Momentum Slowing? appeared first on Carbon Credits.

Microsoft has entered into a groundbreaking agreement with BTG Pactual Timberland Investment Group (TIG), committing to provide 8 million carbon removal credits, marking the largest carbon dioxide removal transaction on record. 

In a separate deal, Microsoft also agreed to buy 40,000 agricultural soil carbon credits from Indigo Ag. It’s also the largest-ever purchase of an individual buyer from the ag company.

A Landmark Carbon Offset Agreement

Carbon offsets allow companies to compensate for some of their greenhouse gas emissions by funding projects that reduce emissions elsewhere. Each carbon offset credit corresponds to reducing one tonne of CO2 emissions and can be applied toward reaching corporate climate targets.

Last year, companies retired or used almost 180 million metric tonnes of CO2 equivalent in their climate commitments. 

The agreement between TIG and Microsoft involves the provision of up to 8 million nature-based carbon removal credits by 2043. Data from MSCI Carbon Markets confirms this as the largest transaction of its kind. 

The credits are part of TIG’s extensive reforestation and restoration strategy in Latin America. It involves a $1 billion initiative designed to conserve and restore deforested areas, including the crucial Cerrado biome in Brazil. 

The strategy aims to restore 135,000 hectares of natural forests and develop sustainable commercial tree farms on an additional 135,000 hectares.

TIG has already made significant progress, investing in 37,000 hectares, planting over 7 million seedlings, and beginning the restoration of 2,600 hectares of natural forest. 

Gerrity Lansing, Head of TIG, highlighted the importance of this groundbreaking carbon offset deal, saying:

“Institutional investors have a critical role to play in delivering nature-based solutions at a scale that matters for climate and biodiversity. The scale of the native forest restoration and sustainable timber production that TIG seeks to deliver with our reforestation strategy is what enables a carbon removal credit transaction of this size.”

Microsoft’s Unwavering Support for Carbon Removal

Dr. M. Sanjayan, Conservation International CEO, emphasized that Microsoft’s commitment demonstrates the possibility of balancing ecological restoration with economic productivity. 

The transaction aligns with Microsoft’s ambitious goal to be carbon-negative by 2030 and to remove all historical emissions by 2050. The tech giant aims to eliminate its Scope 1 and 2 emissions through various means, including:

Increasing energy efficiency, 
Decarbonizing its operations, and 
Achieving 100% renewable energy by 2025. 

The company achieved a 6% reduction in its Scope 1 and 2 emissions from the 2020 baseline year. 

Source: Microsoft website

However, the Scope 3 (value chain emissions) sources account for over 96% of Microsoft’s total emissions. The majority of these emissions come from purchased goods and services, capital goods, downstream, and the use of sold products. Reducing value chain emissions involves investing in large-scale, high-quality carbon removal projects. 

Brian Marrs, Senior Director for Energy & Carbon Removal at Microsoft, noted that achieving these goals requires innovative projects that can scale carbon removal swiftly and sustainably. He highlighted that this nature-based project exemplifies how such efforts can deliver significant carbon removal while restoring vital ecosystems.

In a related effort, Microsoft recently purchased 970,000 forest carbon removal credits from Anew Climate, further demonstrating its commitment to large-scale carbon removal projects.

The carbon credits under Anew agreement will come from improved forest management (IFM) projects across forestlands owned by Aurora Sustainable Lands, Acadian Timber Corp., and Baskahegan Company. IFM projects offer benefits such as avoiding net carbon emissions and removing carbon from the atmosphere. 

The Anew projects will create registry-recognized carbon removal credits generated from tree growth within its forestry portfolio.

Additionally, Microsoft, alongside Google, Meta, and Salesforce, has launched a 20-million-ton advance market commitment (AMC) collaboration to support the development and expansion of the nature-based carbon removal market.

READ MORE: Google, Meta, Microsoft, and Salesforce Launch “Symbiosis”, Pledging for 20M Tons of Nature-Based CDR Credits

Advancing Soil Carbon Removals

Most recently, Microsoft has agreed to purchase 40,000 agricultural soil-based carbon credits from Indigo Ag’s third carbon crop. This transaction marks the largest number of credits ever delivered by Indigo Ag to a single buyer.

These soil-based credits are verified and issued by the Soil Enrichment Protocol of the Climate Action Reserve, one of the world’s most trusted independent carbon registries.

Microsoft has chosen Indigo Ag’s carbon program to introduce soil carbon removals into its climate action portfolio. This agreement highlights the demand for robust, science-backed agriculture soil-based credits and their critical role in climate action, reflecting the increasing maturity of the voluntary carbon market.

Indigo Ag’s Carbon program is supported by the company’s scientifically peer-reviewed measurement, reporting, and verification (MRV) capabilities, ensuring the robustness, integrity, and durability of credits. This enables growers to realize the value of adopting and sustaining new practices that generate these credits.

Indigo Ag Carbon Program

Beyond its carbon program, Indigo Ag deploys its MRV capabilities to help companies in the agri-food value chain reduce their Scope 3 emissions. It can also help them produce low carbon intensity crop feedstocks for biofuels.

To date, Indigo’s Sustainability Solutions have reduced and removed over 340,000 tons of GHG emissions and saved over 19 billion gallons of water used in agriculture.

YOU MIGHT ALSO LIKE: Indigo Ag Sets Record with Third Carbon Crop, Sequestering Over 163K Tons of CO2

Dean Banks, CEO of Indigo Ag, remarked:

“Today’s announcement is a major milestone for Indigo’s Carbon program and our increasing range of ag-based sustainability solutions. Microsoft is a leader in corporate climate action, a highly influential player in carbon removals and shares our commitment to support the transition to a more resilient and sustainable agriculture system.”

The landmark transactions between Microsoft and TIG as well as Indigo Ag underscore the potential for significant climate action through nature-based solutions. By advancing carbon removal at scale, Microsoft is paving the way for a more sustainable and low-carbon future.

The post Microsoft Strikes 2 Record-Breaking Carbon Credit Deals appeared first on Carbon Credits.