Microsoft’s Financial Success

Microsoft’s 2030 Carbon Negative Goal

Microsoft has set an ambitious goal to become carbon negative by 2030, meaning the company aims to remove more carbon dioxide from the atmosphere than it emits. By 2050, Microsoft plans to offset all carbon dioxide emissions since its inception in 1975. Achieving this involves significant innovation and collaboration, particularly in the face of complex emission challenges.

Since setting its sustainability targets 4 years ago, Microsoft has been at the forefront of efforts to address climate change. Thousands of other companies have also committed to achieving net zero emissions, driven by advancements in technologies such as AI, which enhance measurement, datacenter efficiency, and energy transmission. 

Amid financial success, the key environmental challenge of reducing Scope 1, 2, and 3 emissions remains substantial. 

In FY23, Microsoft’s total emissions rose by 29.1% compared to the 2020 baseline. This increase is attributed to ongoing investments in technology and infrastructure to support future innovations. 

Chart from Microsoft 2024 Environmental Sustainability Report

Notably, Scope 3 emissions account for more than 96% of Microsoft’s total emissions. These emissions primarily come from two upstream categories: Purchased Goods and Services (Category 1) and Capital Goods (Category 2), as well as one downstream category: Use of Sold Products (Category 11).

Chart from Microsoft 2024 Environmental Sustainability Report

Although Microsoft has reduced Scope 1 and 2 emissions by 6% since 2020 through efforts such as clean energy procurement and green tariff programs, Scope 3 emissions remain the biggest challenge. Addressing these requires extensive collaboration across industries. 

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

What’s Microsoft Doing About Its Increasing Carbon Footprint?

Microsoft’s goal of becoming carbon-negative is deeply connected to global decarbonization efforts. Essential to this goal is supporting the development of carbon-free electricity infrastructure through procurement and investment. Recognizing the scale of this challenge, Microsoft has adopted a pioneering approach by investing in carbon-free electricity to enhance the grids where it operates. 

The company is also working to diversify and expand the supply of impactful renewable energy and improve access for all.

Scaling Up Clean Energy

Microsoft’s partnership objectives are to meet its own operational needs, accelerate the development of technologies for its customers and partners, and significantly increase the global sustainability market. 

By 2023, Microsoft had expanded its renewable energy portfolio to over 19.8 gigawatts (GW) across 21 countries. 

New power purchase agreements (PPAs) were signed with AES in Brazil, Constellation Energy in Virginia, Powerex in Washington, Contact Energy in New Zealand, and Lightsource bp in Poland. 

Notably, Microsoft became the first major commercial entity to use Powerex’s 24×7 Clean Load Service for a datacenter in Washington. This service matches Microsoft’s hourly datacenter energy demand with direct deliveries of carbon-free hydro, solar, and wind power year-round, supporting the company’s 100/100/0 goal. 

Datacenter Efficiency

Microsoft is optimizing datacenter efficiency using Power Usage Effectiveness (PUE) with a current design rating of 1.12, aiming for even lower values. Transitioning servers to low-power states reduced energy use by up to 25%, cutting Scope 2 emissions. 

The company also enhances resource utilization by minimizing peak power needs and improving server density, leading to a 7% reduction in datacenter power infrastructure. Additionally, server utilization improvements resulted in a 1.5% reduction in hardware needs for Azure, significantly reducing embodied carbon.

Fleet Electrification

Microsoft is advancing its fleet electrification efforts across global campuses, aiming to eliminate reliance on fuel-burning vehicles. To achieve a 100% electric fleet by 2030, Microsoft is building an Electric Vehicle Fleet Facility at its Redmond headquarters. This facility, currently in the design phase, will support the electric fleet by providing housing, charging, and maintenance services. 

Boosting Carbon Dioxide Removal (CDR) Solutions

To address its unavoidable emissions, particularly Scope 3, Microsoft is committed to advancing carbon removal technologies. 

In FY23, the company accelerated procurement across various CDR pathways, leveraging a long-term agreement framework to enhance the impact of large-scale projects. These multi-year agreements are designed to help projects secure external financing and ensure the purchase of additional, durable, measurable, and net-negative carbon credits. 

Microsoft’s goal is to build a portfolio of over 5 million metric tons per year starting in 2030, while also exploring novel solutions such as enhanced rock weathering.

In FY23, Microsoft bought 5.015 million metric tons of carbon removal to support its carbon neutral and negative targets.

Chart from Microsoft 2024 Environmental Sustainability Report

Microsoft contracted 5,015,019 metric tons of carbon removal to be retired over the next 15 years. By December 2023, contracts are expected to contribute 875,000 metric tons towards the 2030 target of over 5 million metric tons. Notable projects signed in 2023 include:

Reforestation in the Amazon
Landmark bioenergy with carbon capture and storage (BECCS) in partnership with Orsted 

Additionally, Microsoft expanded its renewable energy portfolio to over 19.8 gigawatts, reinforcing its commitment to sustainable energy infrastructure.

And just last month, Microsoft signed two separate CDR deals. One is with BTG Pactual Timberland Investment Group for 8 million carbon removal credits, the biggest CDR transaction on record. The other agreement is with Indigo Ag for 40,000 agricultural soil carbon credits, also the biggest-ever purchase of an individual buyer from the ag company.

READ MORE: Microsoft Strikes 2 Record-Breaking Carbon Credit Deals

With record earnings and significant investments in carbon emission reductions, Microsoft continues to lead in both innovation and sustainability, setting a benchmark for the industry.

The post Microsoft Reported Q2 Record Earnings, How About Its Carbon Negative Goals? appeared first on Carbon Credits.

McDonald’s reported a drop in US and global sales in Q2 2024, contrasting sharply with the previous year’s growth. Amid these challenges, the fast-food giant is doubling down on value deals and ambitious sustainability initiatives.

McDonald’s Sales Dip Amid Rising Costs

McDonald’s experienced a decline in US and global sales during the second quarter ending June 30, with decreases of 0.7% and 1.1%, respectively. This contrasts sharply with a 10% increase in US sales and a 12% increase in international sales during the same period last year. 

The Chicago-based fast-food giant reported a net income of $2.02 billion, or $2.80 per share, down 12% from $2.31 billion, or $3.15 per share, in Q2 2023. Revenues remained flat at $6.49 billion, while systemwide sales decreased by 1%.

Higher prices have led consumers to seek value and lower-priced options, reducing traffic to McDonald’s. Despite these challenges, McDonald’s stock rose by more than 4% following the earnings release. 

The increase is attributed to the company’s emphasis on its “$5 Meal Deal,” launched in late June, which targets budget-conscious customers. This strategy aims to attract customers increasingly focused on affordability, especially as prices of popular menu items like the Big Mac and Quarter Pounder have risen by over 20% in recent years.

McDonald’s focuses on value deals to retain and attract customers while addressing its massive carbon footprint at the same time. 

McDonald’s Net Zero Strategy

In 2018, McDonald’s set ambitious targets to cut greenhouse gas (GHG) emissions from its restaurants and offices by 36%, and reduce emissions intensity across its supply chain by 31% by 2030 compared to 2015.

These targets, approved by the Science Based Targets initiative (SBTi), were supported by collaboration with industries, governments, Franchisees, suppliers, consumers, and local communities. In 2021, McDonald’s committed to aligning its climate goals with keeping global temperature rises below 1.5°C and achieving net-zero emissions by 2050.

McDonald’s Carbon Footprint

Last year, McDonald’s set a fresh target for 2030 with 2018 baseline:  

Reduce absolute scope 1 and 2 GHG emissions from restaurants and offices by 50.4% 
Cut absolute scope 3 GHG emissions related to facility, logistics, and plastic packaging by 50.4%, 
Achieve a 16% reduction in scope 3 GHG emissions from beef and chicken farming (forests, land, and agriculture) by 2030

“We believe we have both a privilege and a responsibility to help lead on issues that matter most in communities – and there is no issue more urgent globally and of impact locally than protecting our planet for generations to come,” said Chris Kempczinski, McDonald’s President and Chief Executive Officer. He added that:

“By committing to net zero through the SBTi’s Business Ambition for 1.5°C campaign, we are helping every community we serve mitigate the impacts of climate change and adapt for the future.”

CHECK OUT: Sustainability Supersized: McDonald’s and UBQ Materials Set New Standards

What McDonald’s Does to Cut Its Supersized Carbon Footprint

The fast-food giant’s net zero strategy revolves around transforming its food system, and supply chain and using renewable energy across its operations. All these targets align with SBTi’s 2023 guidance and the Greenhouse Gas Protocol, the global emissions accounting standard. 

McDonald’s emphasizes that evolving climate accounting standards, especially for nature-based solutions like soil carbon sequestration and renewable energy, are crucial for meeting its targets. Balancing climate goals with company performance, including financial growth and innovation in menu offerings and sourcing, remains essential.

Expansion strategies might increase GHG emissions if decarbonization lags business growth. Navigating these challenges will be key to advancing McDonald’s climate targets while driving business forward.

Renewable Energy Impact

The company uses climate tracking data points to measure its energy impact. They have added two major U.S. virtual power purchase agreements (VPPAs) to boost renewable energy on the grid. They expect that their renewable energy projects once 100% operational can cut emissions by 33% from their 2015 baseline. Furthermore, their restaurants are run on renewable energy that meets Global Restaurant Standards (GRS).

Regenerative Agriculture 

McDonald’s began regenerative agriculture with supply chain partners to combat deforestation and advocate for climate-positive policies globally. It had partnered with AgMission and FAI Farms, to promote sustainable farming. 

McDonald’s targets key commodities—beef, soy (for chicken feed), palm oil, coffee, and fiber (for guest packaging)—to address deforestation risks. The strategy is reviewed with Proforest and WWF. McDonald’s also seeks to make a positive impact in other priority commodities.

Accelerating Circularity

A packaging and waste strategy aims to reduce waste and emissions throughout operations and the supply chain. more than 85.1% of restaurants in markets with advanced infrastructure offered guests the opportunity to recycle packaging items.

While McDonald’s faces declining sales, its commitment to ambitious carbon footprint reduction and sustainability goals shows its dedication to long-term growth and environmental responsibility.

The post McDonald’s Balances Sales Decline with Bold Sustainability Goals appeared first on Carbon Credits.

Long-term uranium contract prices have reached over 16-year highs due to supply uncertainty and increased demand from utilities expanding capacity for AI data centers. Current term prices are around $79 per pound, the highest since 2008, with expectations of further increases.

Cameco, a leading uranium miner, reported securing contract prices with ceilings of $125-130 per pound and floors of $70-75 per pound, the best prices seen in over a decade. Spot uranium prices, which hit a 14-year high in February 2024, are now around $82 per pound.

Uranium Market is Heating Up

Uranium is the primary fuel for nuclear energy. The International Energy Agency predicts that global nuclear generation could double by 2050, calling for a corresponding increase in supply. 

However, Plenisfer Investments estimates that prices must exceed the marginal cost of production, currently $90-$100 per pound, by at least 30% to incentivize new projects. This projection suggests a continued market deficit over the next decade.

Chart from Reuters

Goldman Sachs estimated that global data center power demand, currently 1-2% of power use, could grow by 160% by 2030. Nuclear energy companies such as Constellation and Vistra are poised to benefit from the US push for Big Tech to invest in climate-friendly energy to meet the growing needs of AI.

Experts said that rising demand from utilities is narrowing the gap between term and spot prices. They further noted that utilities with ample inventory but those with shortages will be compelled to buy. 

Companies like Uranium Energy Corp and Ur-Energy have limited volumes but face high demand. This prompts them to seek higher prices or opt for spot sales, according to Robert Crayfourd, co-fund manager of Geiger Counter.

RELATED NEWS: Uranium Prices Take a Dip at $89 Per Pound

Major Deals and Mergers Reflect Strong Market Interest

In late June, Australian miner Paladin Energy launched a $1.1-billion bid for Fission Uranium and its high-grade Patterson Lake South project in Saskatchewan. This move aims to address the global nuclear power push amid a decade-long underinvestment in uranium supply. 

Paladin CEO Ian Purdy highlighted the shortage of primary uranium production and the strong demand for their Langer Heinrich product. The merger could make Paladin the third largest listed uranium miner globally. The miner has a production potential of 15 million pounds of uranium oxide (U3O8) annually by the decade’s end.

READ MORE: Paladin Energy Offers C$1.14 B to Canada’s Fission Uranium. What does it mean for Uranium Mining?

In another significant market development, Uranium Royalty Corp. (NASDAQ: UROY) has entered into a binding royalty purchase agreement to acquire an additional royalty on the Churchrock uranium project in New Mexico, USA, owned indirectly by Laramide Resources. The Churchrock Project, an advanced In-Situ Recovery (ISR) project, is one of the largest undeveloped uranium projects in the U.S.

Uranium Royalty is the world’s only uranium-focused royalty and streaming company and the only pure-play uranium listed company on NASDAQ. UROY offers investors exposure to uranium prices through strategic acquisitions in uranium interests. These include royalties, streams, debt, and equity in uranium companies, as well as holdings of physical uranium. 

The royalty company aims to support the uranium industry, which requires significant investment to meet the increasing demand for uranium as fuel for carbon-free nuclear energy.

Project Overview and Royalty Details

The Churchrock Project, located in the Grants Mineral Belt of New Mexico, is owned by Laramide’s subsidiary NuFuels. It’s at a development stage with significant ISR uranium resources, which could play a critical role in the U.S. uranium production landscape.

Preproduction wellfield development is expected to take four years, with all other necessary infrastructure already in place. Laramide holds most of the permits and licenses required to start production. The Life of Mine unit operating cost is estimated at US$27.70/lb. U3O8, with a static uranium price assumption of US$75/lb. U3O8.

Boosting U.S. Domestic Uranium Production

The transaction aligns with recent U.S. legislative efforts to eliminate reliance on Russian uranium imports and boost domestic uranium production. These initiatives provide funding to expand uranium, conversion, and enrichment capacity in the U.S., targeting complete phase-out of Russian imports by 2028.

Scott Melbye, CEO of UROY, remarked on this development saying that:

“Our enlarging footprints in the uranium royalty sector in the United States as evidenced by the acquisition of the additional royalty on Churchrock fit squarely in support of those initiatives.”

UROY’s acquisition of an additional royalty on the Churchrock Project is a strategic move to support U.S. uranium production. This is crucial for the country’s energy security and transition to a low-carbon economy. The transaction is subject to customary closing conditions and is expected to close by the end of July 2024.

Disclosure: Owners, members, directors and employees of carboncredits.com have/may have stock or option position in any of the companies mentioned: UROY

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 carboncredits.com involve risks which could lead to a total loss of the invested capital.

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The post Uranium Contract Prices Hit 16-Year Highs, Plus Major Market Development appeared first on Carbon Credits.

Copper prices fell below $9,000 a ton for the first time since early April due to a global stock market selloff and rising pessimism about demand in China and elsewhere. The industrial metal has dropped by about 20% since its mid-May record high, driven by concerns over increasing inventories and weak conditions in the Chinese spot market.

What Causes the Market Downturn?

Copper is hailed as the economic bellwether because it rises and falls in tandem with industrial production. The metal is also popular as “Doctor Copper”, a slang word for copper’s price to foresee the economy’s overall health.

As seen below, copper price at London Metal Exchange (LME) has been dropping since it hit record high in May.

The falling copper prices is further worsened by a significant selloff in global technology stocks and doubts about the growth of the artificial intelligence industry. The AI industry had previously boosted copper prices due to anticipated surges in data center use and power infrastructure.

Gong Ming, an analyst at Jinrui Futures Co., noted that global growth concerns could drive copper prices lower, although prices might find support around $8,900 due to potential supply risks. Copper dropped 2.2% to $8,900 a ton and was trading at $9,010 at the time of writing. Nearly all metals were lower on the LME, with tin declining 2.6% and zinc losing 1.5%.

Iron ore also declined by 0.9% to trade below $100 a ton in Singapore, with signs of robust supply continuing. According to Liz Gao, a senior iron ore analyst at CRU, weak steel demand and negative steel margins in China are causing mills to reduce production and avoid building raw material stocks.

Despite recent rate cuts by China’s central bank to revive the economy, copper price continued to fall. It marks the worst weekly slump in almost two years, as a modest rate cut in China failed to alleviate concerns about demand in the world’s largest commodities consumer. 

SEE MORE: Copper and the Need to Meet the World’s Rewiring Demand for Energy Transition

China’s Copper Exports Hit Record High

The red metal dropped for the 6th consecutive day despite China’s efforts to support its economy through unexpected interest-rate cuts. The lack of short-term stimulus from a recent major Communist Party meeting added to investor disappointment.

Ewa Manthey, commodities strategist at ING Bank NV, noted:

“We expect copper and other industrial metals to decline further in the near term. That trend would reflect “a softer demand outlook in China.

China’s refined copper exports reached a record high in June, driven by weak domestic demand, prompting smelters to seek overseas markets. Exports more than doubled to 157,751 tons from May, surpassing the previous all-time high of 102,000 tons set in 2012, according to customs data.

Asia’s largest economy experienced its slowest growth in five quarters in the three months through June. This leads to a 14% drop in global copper prices since mid-May. 

The surge in exports is also reflected in the increased copper inventories at LME warehouses, which have more than doubled since mid-May, reaching their highest levels since September 2021. This increase is largely due to the lack of domestic demand. 

Benchmark Minerals Intelligence believes that despite spot treatment and refining charges (TC/RCs) at record lows, Chinese smelters are maintaining strong output. Benchmark estimates most smelters in China are loss-making, despite improved by-product credits. 

Interestingly, copper prices peaking in May increases scrap copper supply by 20% year-on-year. Most incremental supply went to Chinese smelters, boosting refined copper production. 

Copper Demand for Clean Energy is Positive

With prices now below the $9,000 threshold, scrap merchants are less willing to supply, and inventories are low. As scrap supply fades in Q3, raw material supply will tighten. Benchmark projects a refined copper production growth rate of 2.3% in H2.

Moreover, though China’s refined copper supply was strong in Q2, consumption growth was weak. High copper prices led to reduced restocking and plant utilization, causing a counter-seasonal stock-build and record exports in May. 

Despite short-term pressures, end-use demand indicators are positive: electric vehicle sales are up 32%, and solar installations and grid investments increased 29% and 22%, respectively. 

READ MORE: The World Needs 194 New Large Copper Mines to Reach Net Zero

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