July 2024 – Page 5 – The Global Carbon Fund

Shell’s Polaris Project Fuels Canada’s Carbon Capture Revolution

July 9, 2024/in Uncategorized /by

Shell Canada’s recent approval of the Polaris carbon capture project marks the beginning of significant investment in emissions-reducing technology, according to federal Natural Resources Minister Jonathan Wilkinson.

The Minister predicts 20 to 25 carbon capture and storage (CCS) projects will start in Canada within the next decade. This is spurred by a new federal investment tax credit, covering up to 50% of CCS project capital costs.

Wilkinson further noted that the tax credit is crucial for heavy industry companies to make final investment decisions. The Shell Polaris project is a direct result of this incentive.

Pioneering Investment in Emissions Reduction

The CCS project will capture 650,000 tonnes of CO2 annually from the Scotford refinery near Edmonton, Alberta.

Shell’s Polaris carbon capture project will mitigate about 40% of direct CO2 emissions from the Scotford refinery and 22% from its chemicals complex. Although the project’s cost remains undisclosed, it is expected to start operations by the end of 2028.

Additionally, Shell announced the development of the Atlas Carbon Storage Hub in partnership with ATCO EnPower. The first phase of Atlas will be connected to Polaris via a 22-kilometer pipeline, providing permanent underground storage for CO2 captured by Polaris. This CCS project just received a green light.

Polaris is Shell’s second carbon capture and storage (CCS) project in Canada. The first project, Quest, completed in late 2015 at the Scotford complex, cost $1.3 billion. It has captured and stored about 1 million tonnes of CO2 annually since its inception.

All these are part of the energy giant to achieve its 2050 net zero emissions target outlined in the chart.

SHELL NET ZERO GOAL. Chart from Shell’s Report

CCS technology, which captures and compresses CO2 emissions from industrial processes for safe underground storage, is considered one of the most effective ways to decarbonize heavy-polluting industries like oil, gas, and cement production.

Canada considers this carbon management essential for reaching its net zero emissions target.

MUST READ: Canada Reveals $2.6B Carbon Capture Tax Credit, The Biggest Climate Item

How Carbon Capture And Storage Can Support Canada’s Path to Net Zero

Currently, Canada has a few CCS projects operational, storing about 44 million tonnes of CO2 since 2000. The federal plan to cut emissions by 40-45% below 2005 levels by 2030 and reach net zero by 2050 requires tripling national CCS capacity by 2030. This involves adding facilities capable of capturing at least 15 million tonnes of CO2 annually.

The International CCS Knowledge Centre in Regina states that achieving this goal calls for implementing CCS across various heavy industries. These include power generation, cement, steel, fertilizer manufacturing, mining, and petrochemicals.

Apparently, Shell’s industry heavily needs this carbon capture technology to decarbonize.

Canada aims to achieve significant reductions in the oil and gas sector as outlined in its Emissions Reduction Plan. The goal is to cut emissions from 191 million tonnes in 2019 to 110 million tonnes by 2030.

Under the International Energy Agency’s Updated Roadmap to Net-Zero Emissions by 2050, carbon capture and storage technologies need rapid scaling to capture 1.2 gigatonnes (Gt) globally by 2030 and 6.2 Gt by 2050, accounting for about 15% of total required GHG reductions.

Recognizing this challenge and opportunity, Canada’s G7 peers like the United States, the United Kingdom, Germany, and the European Union prioritize carbon management technologies through national strategies and significant investments.

According to the Canada Energy Regulator’s (CER) “Canada’s Energy Futures 2023” report, carbon management is crucial for domestic emissions reductions. In the CER’s Global Net-Zero Scenario, CCUS sequesters nearly 60 million tonnes (Mt) annually in Canada by 2050, with 25 Mt from heavy industry.

In a slower global transition (Canada Net-Zero Scenario), CCUS costs fall more slowly, capturing 80 Mt annually due to greater global fossil fuel demand.

Decarbonizing Heavy Industries

Canada boasts vast geological storage resources, presenting opportunities to store both domestic and international CO2, potentially generating revenue and investment from abroad.

Key storage areas include:

Western Canadian Sedimentary Basin (WCSB): Spanning from British Columbia to Manitoba. It includes regions that could store about 4.2 gigatonnes of CO2, equivalent to over 66 years of British Columbia’s emissions.
Williston Basin: Primarily in southern Saskatchewan, offering additional significant storage capacity.
Southern Ontario and Quebec: Contain several sedimentary basins that may also be suitable for CO2 storage.

The estimated capacity of Canada’s saline aquifers within these sedimentary basins exceeds 100 billion tonnes. That would be sufficient for hundreds of years of CO2 storage.

Offshore Storage Potential:

Nova Scotia and Newfoundland and Labrador: These regions have suitable seabed geology for conventional subseabed CO2 storage.

These extensive storage capacities and geological resources position Canada as a potential leader in global carbon capture and storage. There are over 40 proposed CCS projects in Canada, according to the IEA.

The most prominent CCS proposal comes from the Pathways Alliance, a group of oilsands companies planning a CA$16.5 billion pipeline to transport captured carbon from 14 sites to a storage location near Cold Lake. Although a final investment decision is pending, Minister Wilkinson believes the project will proceed.

Mayor Rod Frank welcomed the news, stating that the addition of Polaris to Alberta’s Industrial Heartland aligns with the county’s economic development and environmental sustainability goals.

“These carbon capture projects will create new jobs, support our economy and enhance investment attractiveness while capturing emissions that would otherwise be released into the atmosphere.”

SEE MORE: Deep Sky and Carbfix Make History with CO2 Mineralization Storage in Canada

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Why Shell Hit the Brakes on New Rotterdam’s Biofuel Plant

July 8, 2024/in Uncategorized /by

Shell Nederland Raffinaderij B.V., a subsidiary of Shell, is pausing construction at its massive biofuel facility in Rotterdam. The 820,000tpa capacity site at Shell Energy and Chemicals Park will halt work temporarily to focus on other vital aspects of the company. So, what is the exact reason behind Shell’s massive decision? Will this impact its operations, global market value, and employees by large? Read and discover more…

Why did Shell take this Bold Decision?

Explaining straightway, Wael Sawan, CEO of Shell wants to prioritize the company’s most profitable ventures, particularly in oil and gas. This approach has resulted in the company pulling out of less profitable renewable and hydrogen projects. The outcome of this decision is the temporary halt of the Rotterdam biofuels project. Shell is also conducting a thorough valuation review of this unit. The 820,000t unit was also set to produce sustainable aviation fuel (SAF), apart from renewable diesel. According to media reports, they aimed to start operations in 2025, but now it has been postponed to the end of the decade.

Another key reason for ceasing the unit is to slow down activities and reduce contractor strength for better cost control. They believe this will help optimize and streamline project sequencing. With this new amendment, Shell aims to reevaluate project delivery and maintain competitiveness in the current economic scenario.

Huibert Vigevano, Shell’s downstream head confirmed that,

“Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project. We are committed to our target of achieving net-zero emissions by 2050, with low-carbon fuels as a key part of Shell’s strategy.”

UBS analyst Joshua Stone remarked,

“The pause was consistent with Shell’s strategy to focus on returns. The delays further highlight that the advanced biofuels market is not an easy one. The oil majors have dipped their toes and found it challenging.”

Shell Canada Greenlights Major Carbon Emission Cut

As this news came as a shock to many, there is a silver lining for our news readers. Meanwhile, Shell Canada recently achieved the final investment decision (FID) for CCS projects, including the Polaris project and the Atlas Carbon Storage Hub, in partnership with ATCO EnPower. The media release notes that Polaris (100% Shell-owned) can reduce Scope 1 CO2 emissions at Shell’s Scotford refinery by capturing and storing up to 40% and by up to 22% at the chemicals complex. The operations are slated to begin by the end of 2028.

Moving on, Shell Eastern Trading has acquired Pavilion Energy from Carne Investments, gaining 100% control. This is another significant milestone that happened last month. Pavilion Energy, based in Singapore, operates a global LNG trading business with 6.5 mtpa of contracted supply, alongside shipping, and gas supply activities in Asia and Europe. This acquisition manifests Shell’s LNG portfolio. It also provides strategic access to key markets, increasing flexibility to meet energy security needs in Asia and Europe.

Even though it might seem uncanny for companies to halt projects in progress, Shell is not the first company to announce it. Energy giant BP recently announced a pause on two biofuel projects in Germany and the U.S.

Media agencies like the Financial Times have reported that Biofuel prices have been under downward pressure recently. This is because of reduced demand in Europe following Sweden’s biofuel mandate cut, alongside increased supplies from the U.S. However, Shell shares increased by 1.3% at 1106 GMT, showing a rise of over 12.5% this year.

Shell has a market cap or net worth of $235.01 billion. The enterprise value is $277.77 billion. As of the most recent data, Shell’s stock price in the last 5 days was $73.25 per share, as shown in the image below.

source: stockanalysis

NYSE: SHEL · IEX Real-Time Price · USD 73.25

How Shell Uses Carbon Credits to Shape the Future

Shell’s carbon credits play a crucial role in their goal to become a net-zero emissions energy business. These credits help Shell and its customers offset emissions, adhering to the mitigation hierarchy: avoid, reduce, and compensate. Notably, Shell selects projects certified by the Verified Carbon Standard, Gold Standard, and the American Carbon Registry. In the ESG sphere, the company helps generate carbon credits from nature-based projects and technologies. In 2023, Shell’s net carbon intensity (NCI) included 20 m carbon credits, with 4 m linked to energy product sales.

Shell’s Net-zero emissions by 2050 (Scope 1, 2, and 3), reported by Shell’s Energy Transition Strategy, 2024

Emissions from internal operations (Scope 1 and 2)

Halve Scope 1 and 2 emissions by 2030 (2016 baseline).
Eliminate routine flaring from Upstream operations by 2025.
Maintain methane emissions intensity below 0.2% and achieve near-zero methane emissions by 2030.

Emissions from sold products (Scope 3):

Reduce the net carbon intensity (NCI) of the energy products we sell by 9–12% by 2024, 9–13% by 2025, 15–20% by 2030, and 100% by 2050 (2016 baseline).
Ambition to reduce customer emissions from the use of our oil products by 15–20% by 2030 (Scope 3, Category 11) (2021 baseline)

Global Market Insights reports that the European biofuel market size exceeded USD 26.5 B in 2023 and is likely to register a 6.7% CAGR from 2024 to 2032, owing to the rising concerns about climate change and demand for sustainable energy sources. The European government aims to boost renewable fuels to approximately 14% of transport energy by 2030, with substantial demand. With this prediction, we can hope the future of energy giants like Shell is promising, amid the biofuel boom.

MUST READ: Shell to Buy 22,500 Biochar Removal Credits from The Next 150

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EV Wars and Breakthroughs: BYD to Overtake Tesla, CATL’s New Battery With 1.5M KM Range

July 6, 2024/in Uncategorized /by

Chinese electric vehicle maker BYD is poised to surpass Tesla in battery electric vehicle (BEV) sales this year, according to a Counterpoint Research report. This marks a significant shift in the global EV market.

In related news, another Chinese battery maker shocked the industry with its new lithium battery pack that has 1.5 million km range.

BYD Surges Ahead in Global BEV Sales

In the second quarter, BYD’s BEV sales surged nearly 21% year-on-year to 426,039 units. Meanwhile, Tesla’s deliveries dropped 4.8% to 443,956 vehicles, according to CNBC’s calculations.

Last year, BYD’s total production, including both battery-only and hybrid cars, exceeded 3 million units. As such, the Chinese EV manufacturer outpaced Tesla’s 1.84 million cars for the second consecutive year.

BYD produced 1.6 million battery-only cars and 1.4 million hybrids, leaving Tesla as the leader in BEV production. But BYD had already overtaken Tesla in Q4 2023 performance as seen below.

Despite losing the top EV vendor spot to Tesla in the first quarter, BYD continues to lead in China, which remains a dominant force in the BEV market.

Global BEV sales are expected to reach 10 million at the end of 2024. This is supported by efforts to enhance cost-efficiency and affordability of EVs and EV batteries, as the decline of internal combustion engine (ICE) vehicles continues.

By 2030, Chinese BEV sales are projected to surpass the combined sales of North America and Europe.

Counterpoint estimates China’s BEV sales to be 4x that of North America’s in 2024. The report further predicts China will maintain more than 50% of the global BEV market share until 2027.

However, the European Union recently announced additional tariffs on EVs imported from China to address the potential threat to the EU industry.

Geopolitical Moves Shaping the Future of EVs

This EU decision follows an extensive 8-month investigation revealing that Chinese EV manufacturers benefit significantly from government subsidies, enabling them to undercut European competitors on pricing and capture a substantial market share within Europe.

BYD and other Chinese EV companies will be heavily impacted by the tariffs.

BYD will face a 17.4% tariff, Geely an extra 20%, and SAIC the highest at 38.1%. This is on top of the standard 10% duty on imported EVs. These provisional tariffs will take effect from July 4 if negotiations with Chinese authorities do not yield a resolution.

An expert noted that these tariffs aim to level the playing field for European EV manufacturers. They might push Chinese automakers toward emerging markets such as the Middle East, Africa, Latin America, Southeast Asia, and Australia.

In contrast to the US approach of imposing 100% tariffs to block Chinese EV imports entirely, the EU seeks a balanced approach that maintains EV affordability while addressing subsidy-driven market distortions.

Looking forward, Chinese automakers may explore local production in Europe to mitigate tariff impacts, reflecting efforts to adapt to evolving trade dynamics in the global automotive sector.

Amid these geopolitical tensions among major EV-producing regions, the world’s largest EV battery maker, Contemporary Amperex Technology Co. (CATL) continues to innovate and produce the most advanced battery for sustainable mobility.

Beating Range Anxiety for Zero-Emission Vehicles

Chinese battery makers, led by CATL and BYD, expanded rapidly last year, capturing over two-thirds of the global EV battery capacity. Their batteries are already integrated into EVs produced by Tesla, Ford, BMW, Toyota, Mercedes-Benz, Kia, and several other major automakers.

Source: Counterpoint Research report

Most notably, CATL has introduced a revolutionary electric vehicle (EV) battery capable of powering cars for 1.5 million kilometers (over 930,000 miles) with zero degradation.

CATL’s new lithium battery technology marks a significant milestone in EV innovation. It promises a minimal decrease in range over its lifespan, offering high-quality and reliable performance that mitigates range anxiety.

The battery is covered by a warranty ensuring less than 10% degradation over the first 1.5 million kilometers or 15 years, whichever comes first, utilizing CATL’s patented M3P chemistry. This achievement positions CATL as a leader in extending EV autonomy and durability.

SEE MORE: CATL Unveils Ambitious 2,000 km Electric Plane Vision

The lithium-metal phosphate battery can endure over 3,000 cycles, supported by advancements in molecule stability, heat management, and battery management systems. Manufactured with modern techniques, these batteries could transform the sustainability and cost-effectiveness of long-distance EV driving.

CATL new battery breakthrough that could last 1.5 million km range

CATL’s new lithium-ion battery technology offers several key advantages over traditional batteries, most notably extending lifespan potentially for centuries. This breakthrough is expected to fuel the continued growth of EVs due to its exceptional performance.

Looking ahead, EVs equipped with these batteries could feasibly travel over 1 million miles without needing a battery replacement. This capability represents a significant advancement in EV durability and reliability, promising to reshape long-term vehicle ownership and sustainability.

The rise of BYD and the challenges faced by Tesla reflect a dynamic shift in the global electric vehicle market. As geopolitical tensions influence trade policies, innovations in lithium battery technology continue to redefine the future of sustainable mobility.

Lithium Company Spotlight: The Fastest Developing North American Lithium Junior

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Will This Be The End of Carbon Offsets?

July 5, 2024/in Uncategorized /by

The market for carbon offset credits is currently facing a resurgence of criticism as more than 80 nonprofit organizations come together to oppose their use in climate strategies. These activists argue that carbon offsets undermine genuine efforts to reduce greenhouse gas emissions and call for their complete exclusion from climate regulations and guidelines.

Carbon credits, also called offsets, have been used as a tool to mitigate carbon dioxide emissions by allowing companies and governments to invest in projects that purportedly reduce or remove emissions elsewhere. This practice gained traction as part of efforts to achieve net zero emissions targets.

Under this mechanism, entities could compensate for their emissions by funding projects like reforestation or renewable energy initiatives.

In 2023, the total volume of carbon offsets used (retired) by entities to negate their carbon emissions reached around 180 millions MtCO2e.

However, critics argue that carbon offsets do not contribute to real emission reductions. Instead, they allege that offsets allow high-emission industries and countries to continue polluting while outsourcing the responsibility for emissions reductions to other regions or sectors.

This approach, they contend, undermines the urgency and effectiveness of direct emission reductions needed to fight climate change.

Joint Statement Against Carbon Offsets

In a significant collective effort, prominent organizations including ClientEarth, ShareAction, Oxfam, Amnesty International, and Greenpeace have issued a joint statement condemning carbon offsets. They argue that relying on offsets deflects attention from the critical need to curb emissions at the source. They further claimed that it fails to mobilize adequate financial resources for climate action, especially in developing countries.

The statement emphasizes that voluntary and regulatory frameworks for climate transition planning should exclude offsetting. It challenges the notion that offsets can serve as a substitute for genuine emission reductions.

Controversies and Challenges

The debate over carbon offsets has intensified amid efforts to revive and normalize their use within climate finance frameworks.

Recently, a contentious move by the Science Based Targets initiative (SBTi) to endorse the use of credits for offsetting supply chain emissions has sparked criticism. Critics argue that such endorsements undermine the credibility of emission reduction targets by allowing companies to offset their most substantial emissions sources rather than eliminating them.

Moreover, concerns persist about the reliability and accountability of carbon credits. Some studies have highlighted significant quality issues, including inflated claims about the environmental benefits of offset projects.

Government and Institutional Responses

Despite the criticism, some governments, including the United States, have supported the integration of carbon credits into climate finance strategies. The federal government recently endorsed the use of these credits as a legitimate tool for achieving climate goals. This move signals a divergence in global perspectives on their role in emissions reduction strategies.

Additionally, prominent environmental organizations such as Conservation International, the Environmental Defense Fund, and the Nature Conservancy have backed the SBTi’s proposal to expand the use of carbon credits.

These organizations argue that well-regulated and transparent carbon markets can play a complementary role in financing emission reduction projects, particularly in sectors and regions where direct reductions are challenging or costly to achieve.

Critique of Carbon Credit Effectiveness

Critics maintain that carbon offset credits send misleading signals about the true costs and efforts required for effective climate action. Moreover, there are concerns that reliance on carbon credits could disincentivize investments in transformative technologies and infrastructure necessary for sustainable development.

They specifically noted that:

“Carbon credits send a misleading signal about the efforts required to pursue climate action, and they undermine carbon prices by providing a false sense of the existence of ultra-cheap abatement options around the world.”

What The Data Shows About Using Carbon Offsets

On the other side of the debate, industry reports show that companies, particularly large businesses, that use carbon credits to offset their environmental footprint are more likely to achieve more in slashing their emissions.

As shown below, data from the research by Ecosystem Marketplace, the use of voluntary carbon credits (offsets) brought these results:

Companies in the voluntary carbon market are 1.8x more likely to be actively decarbonizing year-over-year.
They are 1.3x more likely to have supplier engagement strategies, involving employees and customers in climate action.
The median voluntary credit buyer invests 3x more in emission reduction efforts within their value chain, including renewable energy consumption and RECs.

Voluntary carbon buyers are 3.4x more likely to have approved science-based climate targets.
They are 1.2x more likely to have board oversight of their climate transition plans.
Companies in this market are 3x more likely to include Scope 3 emissions in their climate targets, despite the challenges of controlling these emissions.

The debate surrounding carbon offset credits underscores broader challenges in global climate policy and finance.

While critics maintain that offsetting mechanisms divert attention and resources away from essential emission reduction efforts, proponents argue that well-regulated carbon markets can mobilize capital for climate projects and facilitate emissions reductions.

The post Will This Be The End of Carbon Offsets? appeared first on Carbon Credits.

What The USD$91Billion In Nuclear Weapons Spending Could Have Bought Instead

July 5, 2024/in Uncategorized /by

In 2023, the nine nuclear-armed states collectively spent a staggering $91.4 billion on their nuclear arsenals, according to ICAN’s latest report titled “Surge: 2023 Global Nuclear Weapons Spending”.

That amount translates to an astonishing $2,898 per second, underscoring the immense financial commitment to maintaining and modernizing nuclear weapons.

The Billion-Dollar Nuclear Breakdown

Here’s how the spending breaks down among the top four nuclear-armed nations:

United States: The largest spender by far, allocating $51.5 billion, which accounted for 56% of the total expenditures among all nine nations. This spending also represented 80% of the overall increase in nuclear weapons spending compared to the previous year.
China: Followed with expenditures totaling $11.8 billion, emphasizing its significant investments in its nuclear capabilities.
Russia: Spent $8.3 billion, marking its ongoing commitment to maintaining a robust nuclear arsenal.
United Kingdom: Saw a notable 17% increase in spending, reaching $8.1 billion, reflecting its continued investment in nuclear deterrence capabilities.

The report highlights a troubling trend of escalating spending on nuclear weapons over the past five years, totaling $387 billion. This period has seen a 34% increase in annual expenditures, illustrating a global push by these nations to modernize and expand their nuclear capabilities despite international efforts towards disarmament and non-proliferation.

The financial windfall from nuclear weapons production also extends to private entities involved in their manufacture. Companies engaged in producing these weapons secured contracts worth at least $387 billion, some extending through 2040.

In 2023 alone, new contracts added up to nearly $7.9 billion, further fueling profits and incentivizing lobbying efforts. In the US and France alone, firms spent $118 million on lobbying activities aimed at influencing policy and public perception related to nuclear weapons.

Source: ICAN Report

The Price of Nuclear Power: What $91B Could Buy Instead

ICAN’s report underscores the opportunity costs associated with such sky-high spending. For instance, the $91.4 billion annual expenditure on nuclear weapons could alternatively provide significant benefits to address pressing global challenges.

This sum could fund renewable energy initiatives to power 12+ million homes with wind energy, cover a substantial portion of the funding gap (27%) needed to combat climate change, or even plant 1 million trees every minute.

Or that money could have been spent on purchasing uranium to fuel one of the cleanest energy sources – nuclear power. Industry reports show that investments in nuclear energy for the clean energy transition have not increased at the same pace as other energy sources like renewables.

Nuclear capacity additions also show the same trend, with nuclear remaining flat over the years and in the coming years.

However, US utilities significantly increased their uranium purchases by 27% in 2023 compared to the previous year, according to the latest annual report from the US Energy Information Administration (EIA).

US civilian nuclear power reactors purchased a total of 51.6 million pounds of U3O8 (uranium oxide), equivalent to 19,838 metric tonnes of uranium (tU). The majority of uranium deliveries to the US came from international sources, including Canada, Australia, Kazakhstan, Russia, and Uzbekistan.

Uranium and The Quest for Securing Power Supplies

About 85% of the uranium purchases were made under long-term contracts, with a weighted average price of $42.42 per pound U3O8. The remaining 15% was acquired through spot contracts, at a higher weighted-average price of $51.64 per pound U3O8.

Commercial US inventories of uranium saw a year-on-year increase. It reached 152 million pounds U3O8 by the end of 2023, marking a 6% rise from the previous year.

These inventories include uranium in various stages of the nuclear fuel cycle, including material owned by brokers, converters, enrichers, fabricators, producers, traders, as well as plant owners and operators.

Looking ahead, the EIA forecasts a potential maximum demand of 433 million pounds of U3O8 over the next decade. This is based on existing contracts and unfilled market requirements from 2024 to 2033.

These findings highlight the US nuclear industry’s ongoing reliance on global uranium markets, with significant implications for energy security and international trade dynamics in the nuclear sector.

Kazatomprom, the world’s leading uranium producer, accounting for 40% of U3O8 supply, has not announced further production downgrades. But the company warns of limited sulphuric acid supplies affecting its targets.

Major producers like Cameco also predict supply deficits. Kazatomprom forecasts a shortfall of 21 million pounds by 2030, rising to 147 million pounds by 2040. Data from the World Nuclear Association shows a growing demand with limited supply, creating a significant gap.

Geopolitical factors complicate the outlook, such as the U.S. Senate reviewing a bill to ban enriched Russian uranium imports.

In response to the uncertain nuclear fuel future, countries are securing power supplies. Sweden plans to lift its uranium mining ban, holding 80% of the EU’s uranium deposits, and the Australian Chamber of Commerce and Industry urges reconsideration of its uranium ban.

As the demand for nuclear power remains stable, ensuring a diversified supply chain will be crucial for meeting future energy needs while navigating geopolitical uncertainties.

SEE MORE: The Atomic Awakening… Fueled by Uranium

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Google Invests in BlackRock’s New Green Power to Boost Taiwan’s Solar Capacity

July 4, 2024/in Uncategorized /by

Google has partnered strategically with BlackRock to develop a 1GW solar energy pipeline in Taiwan. In this collaboration, Google will make a significant capital investment in New Green Power, a leading solar developer in Taiwan, owned 100 % by a fund managed by BlackRock’s Climate Infrastructure business. This move aims to boost energy capacity and cut carbon emissions, especially as the demand for AI continues to rise.

A Cool Deal for Hot Energy in Data Centers

The press release notes that Taiwan is the prime hub for Google’s cloud technology with data centers and offices. Certainly, the energy demand is insane for these data centers. However, the country still relies on fossil fuels for ~ 85% of its power generation. Thus, this deal promises to meet the electricity needs of Google’s operations in Taiwan. It further aligns with its 24*7 carbon-free electricity (CFE) demand round the clock in all regions it operates.

Subsequently, Amanda Peterson Corio, Google’s Global Head of Data Center Energy highlighted,

“We’re aiming to reach net-zero emissions across our operations and value chain, supported by a goal to run on 24/7 carbon-free energy everywhere we operate. The path to reach these goals is challenging, and requires both commercial efforts and broader energy systems change. We’re excited to partner with BlackRock and New Green Power to advance the build out of clean energy on Taiwan’s electricity grid.”

source: Google

In this deal, Google has taken a stake in New Green Power to buy nearly 300 megawatts of renewable energy from BlackRock. It will be purchased through power purchase agreements (PPAs) and Taiwan Renewable Energy Certificates (T-RECS). Google and BlackRock did not disclose the size of their equity stake in NGP.

However, Amanda mentioned that the investment is expected to drive both equity and debt financing for the development of NGP’s 1-gigawatt solar pipeline.

David Giordano, Global Head of Climate Infrastructure of BlackRock noted,

“As we witness growth in demand for digital services, powered by AI and data-centric technologies, it becomes imperative to invest in the infrastructure that not only supports this growth but also aligns with our strategy to invest in clean energy. This partnership is a testament to our shared commitment to driving the transition to a low-carbon economy.”

MUST READ: Google and NV Energy: Powering Nevada’s Future with 115 MW of Geothermal Energy

Mutual Gains with Robust Solar Capacity

Google plans to extend this clean energy capacity to its semiconductor suppliers and manufacturers. The semiconductor industry is a significant emissions hotspot due to energy-intensive chip manufacturing and operation. This deal directly supports Google’s clean energy objectives and would reduce Scope 3 supply chain emissions. The new solar capacity will directly power Google’s data centers and cloud region in Taiwan. It will also offer clean energy choices to nearby chip suppliers and manufacturers.

In 2023, Google’s Scope 3 emissions totaled ~10.8 mtCO2e, accounting for 75% of its overall carbon footprint. Some of these emissions significantly come from upgrading data center infrastructure and AI initiatives. Google has emphasized that reducing Scope 3 emissions depends on diverse suppliers across countries with varying clean energy access, posing greater challenges in the Asia-Pacific region.

Since last year Google has been investing continuously in their prime manufacturing hubs to achieve their goal of 5 GW of CFE. The tech giant aims to secure clean energy availability across its supply chain through this energy target.

New Green Power (NGP), headquartered in Taipei, is a prominent solar developer and EPC firm. It finances, builds, owns, and operates solar projects in Taiwan and Japan. It has efficiently built and managed more than 500 MW of domestic projects. These include the largest inland floating project (approximately 35 MW) and rooftop projects (around 15 MW) in Taiwan, alongside multiple utility-scale ground-mounted projects in southern Taiwan. With its strong local and international experience, NGP is taking charge of the renewable energy transformation in the region.

Speaking of the investment, it would foster Taiwan’s renewable energy grid and assist Google in achieving net-zero emissions throughout its operations and value chain by 2030.

BlackRock’s Role in Taiwan’s Energy Revolution

BlackRock’s Infrastructure Equity platform oversees over US$39B in client assets as of March 31, 2024, spanning its Climate and Diversified Infrastructure franchises. The largest asset manager company offers global investment opportunities and tailored solutions across energy sectors and asset classes. Furthermore, it leverages the significant investment potential of the energy transition valued at over US$100 trillion.

Ross Mackey, Portfolio Manager, Climate Infrastructure of BlackRock said:

“This is a pivotal moment for energy infrastructure in Taiwan. BlackRock’s Climate Infrastructure business is a leading investor in Taiwan’s solar industry and we are delighted to partner with Google to provide a scalable and sustainable energy solution for their operations in Taiwan.”

Similarly, Singapore is advocating for green data centers to manage the increasing energy demands of AI. It aims to provide at least 300 MW of additional capacity through green energy initiatives in the coming years.

This partnership represents a significant step towards sustainable energy solutions in the tech industry, promising a greener future for data centers and digital services in Taiwan.

MUST READ: BlackRock’s Insights on 2024 Low-Carbon Transition Investment Trends

Addressing Taiwan’s Energy Challenge

Taiwan leads global semiconductor production, producing nearly 60% of the world’s chips and a significant portion of advanced AI processors. However, the country heavily depends on non-renewable energy sources to sustain its industrial output.

About 97% of Taiwan’s energy comes from coal and natural gas, underscoring the urgency to shift towards renewable sources. This is the reason behind the country’s strive towards sustainable digital growth.

Taiwan aims to reach 20GW of solar capacity by 2025 and up to 80GW by 2050 to achieve its net zero goals.

Taiwan’s renewable energy future looks sunny with rapidly expanding solar developers like NGP, supported by strong partners such as BlackRock and Google. Undoubtedly, it’s a significant step towards sustainable energy solutions in data centers, digital services, and the entire tech industry.

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What EV Demise? Tesla Stock Hit Highest Levels

July 4, 2024/in Uncategorized /by

Tesla shares surged Tuesday, reaching their highest levels since January, following the release of Q2 2024 production and delivery numbers that beat analysts’ expectations. This is amid the growing sentiment that the EV market is slumping.

Tesla reported delivering 443,956 vehicles in the second quarter and producing 410,831 vehicles. While deliveries were down 5% compared to the second quarter of 2023, they surpassed analysts’ consensus of around 438,019.

For the second consecutive day, Tesla was the biggest gainer on the S&P 500, with shares rising 10.2% to close at $231.26. The stock has gained 17% over the past two sessions, although it remains down about 7% since the start of the year.

Source: Reutuers

After a challenging first half of 2024, Tesla stock began to rebound last week amid optimism for its quarterly numbers. This is further boosted on Monday by positive delivery figures from several of Tesla’s Chinese rivals.

Tesla further announced it will release its Q2 financial results after the bell on July 23.

The EV leader’s positive results despite low market sentiment cement its uncontested place place in the EV industry. Its peers rather show a losing stance in their EV plans.

Navigating EV Challenges

Polestar has faced slow sales and significant cash burn, losing nearly 95% of its value since spinning out of Volvo Car AB. Amid rising tariffs on Chinese-made EVs, Polestar is adapting its business plan.

The US now imposes a 100% import levy, and the EU is set to formalize tariffs up to 48%.

To mitigate these impacts, Polestar plans to reduce supply chain costs and shift some production to South Carolina this summer, aiming to reach break-even cash flow by 2025.

Mercedes-Benz has also revised its plan to become an all-EV brand by 2030, now investing millions into further developing internal combustion engines (ICE). Mercedes CEO Ola Källenius stated that combustion engines will last “well into the 2030s,” necessitating massive investments to meet stricter carbon emissions rules.

The company admitted it was overly ambitious with its electrification goals – a common issue among automakers facing setbacks in EV transitions due to insufficient charging infrastructure and low demand.

Just 3 years ago, Mercedes’ parent company, Daimler, announced plans to switch from “EV first to EV only”. The company initially aimed for a lineup without diesel and gasoline engines by the decade’s end.

General Motors faced similar challenges with its Chevy Bolt, which suffered from battery issues leading to costly recalls. This reality check has prompted many automakers to revise their electrification timelines, realizing that the transition to EVs is more complex than initially anticipated.

What Slump? Breaking Sales Records for EVs

Interestingly, South Korea seems undaunted by the decline in global electric vehicle sales. Both Kia and Hyundai are bucking the trend of declining EV sales with their record-breaking numbers in 2024.

Kia set a new EV sales record, selling 29,392 units in the first half of the year. This marked the best half-year for EVs in the company’s history. The EV6 is Kia’s leading electric model, with 10,941 units sold, an increase of 31.3%.

Hyundai also reported impressive figures, with the Ioniq 5 having its best June ever and the Ioniq 6 sales up 113% compared to last year.

Hyundai’s overall vehicle sales rose 2.2%, but June sales fell by 2.5%. Kia experienced a 2.0% drop in overall sales for the first half of 2024, with June sales down 6.5%.

Despite these declines, strong EV sales have significantly bolstered both brands, highlighting the growing importance of EVs in their portfolios.

Notably, Tesla has been approved by South Korea’s Ministry of Environment to sell regulatory automotive emission credits, also known as carbon credits, within the country in May. This marks a significant milestone for the EV giant, showcasing a stronger presence of EVs in the South Korean market.

Confirmation Amid EV Optimism

Another major news dampening the EV sentiment was the rumor that Northvolt will not pursue its $7-billion battery factory in Canada. The truth, however, is that Europe’s major EV battery maker confirmed it will proceed with the construction of such a factory on Montreal’s South Shore as planned.

Northvolt specializes in lithium-ion batteries for EVs and energy storage.

The Swedish battery manufacturer is behind schedule on its Scandinavian mega-factory and is conducting a strategic review to determine project timelines. The Montreal plant could start manufacturing electric battery cells and cathode active material by 2026.

This massive EV battery plant construction and Tesla’s undeniable EV push are both bullish for the very element that powers the EV revolution – lithium.

In March, lithium prices saw a slight increase, but they declined by June 2024 due to expected reductions in downstream battery production. A seasonal rebound in plug-in electric vehicle (PEV) sales is anticipated from September onward, which could help reduce market surpluses and stabilize prices.

Despite uncertainties such as potential supply cuts and project delays in the lithium market, the long-term outlook for PEV adoption remains promising, driven by the launch of more affordable vehicles, which could further support prices.

Amid challenges in the global EV market, Tesla’s stock price surge shows it remains the undisputed champ in the industry. While competitors like Polestar and Mercedes-Benz navigate setbacks, Kia and Hyundai set records, highlighting the evolving landscape of EVs and its main fuel lithium.

INTERESTING READ: Is the EV Market’s Momentum Slowing?

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Amazon’s Own Carbon Offset Standard Sparks Concerns Over Market Confusion

July 4, 2024/in Uncategorized /by

Amazon has taken a bold step by becoming the first company to sidestep the global standard for verifying carbon offsets, a standard developed by a non-profit heavily funded by Amazon’s founder, Jeff Bezos. This move is part of Amazon’s strategy to establish a new standard, enabling it to overcome the shortage of quality-labeled offsets and meet its ambitious goal of net zero greenhouse gas emissions by 2040.

However, this decision has raised concerns about potential market confusion and the dilution of carbon offset standards.

Redefining Carbon Offset Standards

Companies, including Amazon, purchase carbon offset credits from projects that absorb carbon, such as reforestation, to offset their emissions. Each carbon offset corresponds to a tonne of carbon dioxide reduced or removed from the atmosphere.

Since the critic of the carbon offsets’ integrity began to scrutinize the market in 2021, the volume of these credits issued decreased.

Despite the demand, the market for these offsets remains small due to a limited number of verifiable projects.

To address this, Amazon has completed work on Abacus, a new framework for verifying carbon offsets, developed in partnership with carbon registry Verra. They started developing this carbon offset standard in 2022.

This alternative standard is positioned as more ambitious than the one developed by the Integrity Council for the Voluntary Carbon Market (ICVCM). ICVCM is the largest organization dedicated to validating carbon offsets.

Amazon’s head of carbon neutralization, Jamey Mulligan, who is also the architect of Abacus, stated that while the company supports ICVCM’s work, it seeks a higher standard to ensure real and verified impacts on emissions. He did not comment on whether Jeff Bezos was directly involved in this decision.

Other major tech companies like Alphabet, Meta, Microsoft, and Salesforce have already committed to purchasing up to 20 million metric tons of Abacus-certified credits.

However, the ICVCM has expressed concerns about the development of an alternative standard. Pedro Martins Barata, co-chair of ICVCM’s panel of experts, worries that multiple standards could lead to confusion in the market.

Kelley Kizzier, a member of ICVCM’s board and director of corporate action at the Bezos Earth Fund, views Abacus as complementary rather than competitive to ICVCM, emphasizing the need for generating high-integrity offsets.

Meet Amazon’s “ABACUS”

The market for voluntary carbon offsets, valued at $2 billion, remains constrained by skepticism over the effectiveness of the underlying projects. According to an Environmental Defense Fund analysis, the market currently offsets 300 million metric tons of emissions annually, but only a fraction of these offsets are verified. ICVCM’s primary quality label, CCP, covers only 27 million tons.

Last month, the organization revealed the first carbon-crediting methodologies approved for its Core Carbon Principles (CCPs) label.

Amazon reported 71.3 million tons of carbon emissions in 2022, with the majority stemming from its supply chain. The company plans to become a significant buyer of carbon credits without substituting these credits for its broader decarbonization efforts. Amazon is evaluating over 70 proposals and aims to restore tens of thousands of hectares of degraded land.

Any developer meeting Verra’s methodology can apply for the Abacus label, which was developed with input from scientists, NGOs, and industry experts. Eron Bloomgarden, founder of Emergent, believes that while ICVCM’s work is crucial, it is insufficient for the market’s growth. He supports Abacus as it could help address major challenges like climate change and biodiversity extinction.

What Makes Abacus Different?

The new carbon credit label, Abacus, focuses on agroforestry and reforestation projects due to challenges with additionality, leakage, and durability. These projects have significant potential for climate, social, and environmental benefits.

Additionality: Abacus differs from traditional carbon credits by requiring developers to account for additionality from the project’s inception. They must track changes in carbon stock over time using a dynamic baseline, ensuring projects outcompete control plots in the surrounding landscape. This shifts the risk of non-additionality to project investors.

Leakage: Abacus aims to reduce leakage, which occurs when agricultural projects indirectly cause land-use changes and carbon loss. By supporting projects that make degraded land or nearby regions equally productive, Abacus helps maintain agricultural production rates, ensuring that carbon removal efforts do not compromise food security.

Durability: To address the issue of durability, Abacus continues using pooled buffer accounts to cover potential losses due to events like wildfires or harvests. However, it shortens the crediting period from 50 years to 30, which has minimal impact on investors’ financial outlooks. This change creates unaccredited removals that can compensate for partial losses, acting as an additional buffer pool.

In summary, Amazon’s development of the Abacus standard represents a pivotal move in the carbon offset market, aiming to enhance the supply of high-quality offsets while stirring debate about the implications for market coherence and the integrity of carbon offsetting practices.

SEE MORE: US Government Releases New Voluntary Carbon Credit Market Policy Guidelines

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World Bank Fuels India’s Carbon Market and Green Hydrogen with US$1.5B Boost

July 3, 2024/in Uncategorized /by

The World Bank approved $1.5B to boost India’s low-carbon energy. This operation aims to spark India’s green hydrogen market, expand renewable energy, and drive funding for low-carbon projects. The funding, announced on June 29 represents the second phase of the Low-Carbon Energy Programmatic Development Policy Operation.

Transforming India’s Renewable Energy Market with a US$1.5B Investment Plan

India, the fastest-growing enormous economy globally, is set to maintain its rapid expansion. To decouple this growth from emissions, scaling up renewable energy, particularly in hard-to-abate industrial sectors, is essential. This strategy aims to ramp up green hydrogen production and consumption, alongside accelerating climate finance to support low-carbon investments. Elaborating further, the second phase of US$1.5B is meant to transform India’s RE market by:

Producing ~ 450,000 MT of green hydrogen and 1,500 MW of electrolyzers annually from the financial year 2025-2026. It will cover the costs of the latest technology required for green hydrogen production.
Boosting renewable energy capacity by incentivizing battery energy storage solutions Additionally, it promotes renewable energy integration through incentives for battery energy storage and amendments to the Indian Electricity Grid Code. This is poised to reduce emissions by 50MTS annually.
Advancing the development of a national carbon credit market.

source: Energy Statistics India 2024

Auguste Tano Kouame, World Bank Country Director for India noted,

“The World Bank is pleased to continue supporting India’s low-carbon development strategy which will help achieve the country’s net-zero target while creating clean energy jobs in the private sector. Indeed, both the first and second operations have a strong focus on boosting private investment in green hydrogen and renewable energy.”

First Low-Carbon Energy Program Achievements

Last year (2023) in June, the World Bank approved the $1.5 B First Low-Carbon Energy Programmatic Development Policy Operation. According to the World Bank, this initiative facilitated transmission charge waivers for renewable energy in green hydrogen projects in India. It also outlined a clear strategy to launch 50 GW of renewable energy tenders annually and established a legal framework for a national carbon credit market.

Aurélien Kruse, Xiaodong Wang, and Surbhi Goyal, Team Leaders for the operation, jointly said,

“The operation is helping in scaling up investments in green hydrogen and in renewable energy infrastructure. This will contribute towards India’s journey for achieving its Nationally Determined Contributions targets.”

The executives also praised India’s efforts to establish a robust domestic market for green hydrogen, supported by a fast-growing renewable energy capacity. They noted that the first tenders under the National Green Hydrogen Mission’s incentive scheme have attracted significant private sector interest.

India’s Renewable Energy Landscape through IEA Lens

IEA’s 2024 release talks about the connection between India’s economy and renewable energy demand. India’s GDP grew by 7.8% in 2023, making it the world’s fastest-growing major economy and the fifth largest globally. Energy demand in India is expected to outpace all regions by 2050 due to urbanization and increased demand for electricity, cement, and steel. This reliance on imported fossil fuels could increase carbon emissions significantly. Hence, an urgency to curb emissions and become net zero by 2070.

India has scaled up solar and wind investments and promoted domestic clean energy manufacturing through the Production Linked Incentives scheme. The country also boasts of strong energy efficiency programs and a new hydrogen policy.

Latest media reports say that India entered the sovereign green bond market in January 2023, issuing bonds worth $1B. This has spurred clean energy investments, reaching $68B in 2023. Fossil fuel investment also rose to $33 billion. To meet the energy and climate goals, India needs to double clean energy investment by 2030. However, this would suffice with an extra 20% boost. Lowering capital costs is key to making this happen.

As of March 2024, India’s thermal power accounts for 56% of installed capacity, while renewable energy sources contribute 32%, hydroelectric power 11%, and nuclear power 2%. The World Bank has supported this transition with this huge loan.

India’s goal is to build 47 GW/236 GWh of battery storage and produce 5 MMT of clean hydrogen by 2030.
India also plans to achieve 40 GW of electrolyzer manufacturing capacity, 30 MMT of carbon capture, and 2 MMT of sustainable aviation fuels by 2030.

Overall, the World Bank funding can accelerate India’s commitment to surpassing 500 GW of renewable energy capacity by 2030. Further aiming to lead in advanced energy solutions. With energy giants like Tata, Adani, and Reliance, the country is close to achieving its energy transition goals.

MUST READ: Adani Reaches India’s First 10,000 MW Renewable Energy Capacity

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