August 2024 – The Global Carbon Fund

Verra Rejects 37 Rice Cultivation Projects in China Amid Quality Concerns

August 30, 2024/0 Comments/in Uncategorized /by

Verra, the leading nonprofit organization in the voluntary carbon credit market, has taken a significant and unprecedented step by rejecting 37 rice cultivation projects in China. Alongside this rejection, Verra has imposed substantial sanctions on the project proponents and the validation/verification bodies (VVBs) involved.

These actions are a result of an extensive quality control review, showing Verra’s commitment to improving transparency, integrity, and quality within voluntary carbon markets.

Cracking Down on Compliance

The projects in question employed the AMS-III.AU methodology, part of the UNFCCC Clean Development Mechanism. It was permanently inactivated by Verra in March 2023. This methodology was designed to reduce methane emissions through adjusted water management practices in rice cultivation.

However, the quality control review revealed serious issues, namely:

insufficient demonstration of additionality,
overstated project areas, and
a lack of credible evidence to support baseline and project scenario implementation.

The review was bolstered by an analysis of remote sensing data, further validating the concerns raised.

Verra’s decision to impose sanctions on these projects marks a watershed moment in the voluntary carbon market. As part of the sanctions, Verra has issued non-conformity reports to four VVBs:

China Classification Society Certification Company,
China Quality Certification Center,
Shenzhen CTI International Certification Co., Ltd, and
TÜV Nord Cert GmbH.

These VVBs are required to present strong corrective action plans within 15 days to prevent similar issues from happening again. Failure to do so could result in their temporary suspension from doing audits of other projects under Verra’s Agriculture, Forestry, and Other Land Use (AFOLU) sector.

Verra’s Sanctions Send Shockwaves Through Carbon Markets

One of the most critical aspects of Verra’s action is the decision to seek compensation from the project proponents for the over issued Verified Carbon Units (VCUs). This move reinforces the importance of accountability in the carbon market, ensuring that projects adhere to the rigorous standards set by Verra. By holding project proponents accountable, Verra aims to maintain the integrity of the market and ensure that carbon credits represent genuine emission reductions.

About a year ago, Verra was criticized for the quality of carbon offset credits the certifier approves. The standard setter has been accused of approving “worthless” carbon offsets that could harm corporate climate goals.

Verra’s response to these issues reflects its broader mission to tackle global environmental and social challenges. The organization works with both the private and public sectors to support climate action and sustainable development, providing standards, tools, and programs that credibly assess environmental and social impacts.

As a mission-driven nonprofit, Verra is committed to reducing greenhouse gas emissions, improving livelihoods, and protecting natural resources.

In line with its commitment to continuous improvement, Verra is also developing a new rice cultivation methodology under the Verified Carbon Standard (VCS) Program. This new methodology will incorporate more robust provisions, including:

guidance for field stratification,
consideration of nitrous oxide emissions, and
soil organic carbon stocks, and standardized protocols for methane measurements.

The goal is to enable project proponents to achieve credible emission reductions and generate high-quality VCUs. The consultation for this new methodology recently closed, and its official launch is anticipated later this year.

Reimagining Carbon Credits: A New Era for Rice Cultivation Projects Begins

The suspension and sanctions against the 37 rice cultivation projects conclude a process that began in March 2023. At that time, Verra inactivated the AMS-III.AU methodology following a thorough review.

SEE MORE: Verra Holds Crediting for CDM Rice Cultivation Methodology

The new methodology aims to address the shortcomings identified in the previous approach. This includes providing clearer guidance and more efficient processes for:

determining additionality,
quantifying emission reductions, and
ensuring transparent data measurement, reporting, and verification (MRV) procedures.

As of now, Verra has registered 37 projects applying the AMS-III.AU methodology, with 25 of these projects having issued VCUs totaling 4.56 million units, which represents 0.43% of all VCUs.

Verra’s decisive action in this matter serves as a strong signal to the market that inclusion in the Verra Registry is a mark of quality and integrity of carbon credits. It also highlights the organization’s commitment to ensuring that all projects meet the high standards necessary to deliver meaningful environmental and social benefits.

Janice O’Brien, Director, Auditing and Accreditation, Verra, noted on this announcement saying that:

“Our quality control review identified serious failures that required a serious response. What we have learned in this process will also support the development of a more effective and credible rice cultivation methodology for future projects.”

By taking these unprecedented steps, Verra not only addresses the immediate issues with the rejected projects but also sets a precedent for how similar issues will be handled in the future. The organization’s actions are expected to contribute to a more robust and credible voluntary carbon market. This is particularly important in supporting global efforts to combat climate change and promote sustainable development.

The post Verra Rejects 37 Rice Cultivation Projects in China Amid Quality Concerns appeared first on Carbon Credits.

U.S. DOE Calls for Clean Energy Proposals at Savannah River Site

August 30, 2024/0 Comments/in Uncategorized /by

The U.S. Department of Energy (DOE) is moving forward with an ambitious plan to transform the Savannah River Site (SRS) in Aiken, South Carolina, into a sprawling renewable energy complex. Through the “Cleanup to Clean Energy” initiative, the DOE is leveraging this vast 310-square-mile area, once used for nuclear materials, to support large-scale renewable energy projects.

This move aligns with the Biden-Harris Administration’s push to utilize federal properties for expanding clean power generation across the country.

Savannah River Site: A New Hub for Clean Energy and Data Center

The DOE issued a Request for Qualifications (RFQ) on August 21, inviting developers to propose carbon-free power projects with at least 200 MW of capacity at the SRS. They explained that these projects would directly use the electricity generated on-site. This initiative is part of the DOE’s broader “Cleanup to Clean Energy” effort, which aims to repurpose former nuclear sites for renewable energy production.

Advancing National Clean Energy Goals

Furthermore, the press release mentions that this initiative is a key part of President Biden’s agenda of “100% clean electricity across federal agencies by 2030”. The Cleanup to Clean Energy initiative has already seen progress, with the DOE securing agreements for solar projects at SRS and other federal sites. Other locations include the Hanford Site in Washington, the Waste Isolation Pilot Plant in New Mexico, the Nevada National Security Site, and the Idaho National Laboratory.

Some groundbreaking advancements in this field that followed a timeline and series of events are:

On June 20, the DOE’s Office of Environmental Management announced that Stellar Renewable Power LLC was selected to begin negotiations for a commercial solar energy project at SRS.
A month later July 18, Ameresco Inc. was chosen as the second developer for a solar project at the same site 75-MW solar farm at the site.
By August 20, Stellar Renewable Power signed the agreement under the Cleanup to Clean Energy initiative at SRS for a 75-MW solar project, with plans to add a battery storage system.

The DOE is working closely with industry partners and local communities to develop these clean energy projects. These efforts are essential for meeting America’s rising energy demands. At the same time, they help reduce greenhouse gas emissions. With robust collaborations, the DOE can create sustainable energy solutions that benefit both the environment and the economy.

Can the DOE Quench Data Centers’ Thirst for Power?

The DOE’s push to integrate data centers into the SRS clean energy plan also reflects the growing demand for power from such facilities. A recent DOE report highlighted the immense energy needs of hyperscale data centers, which can require 300 MW to 1,000 MW of power.

The Role of AI in Increasing Energy Demands

As we have read and can now comprehended how the rise in AI applications is causing a major energy demand, concerns about them are rising too. Recent advancements in both hardware and software have enabled the development of LLMs that mimic human abilities in various tasks. These models, while powerful, require significant energy to train and deploy. This further poses challenges to energy supply and grid stability.

DOE is certainly addressing these challenges with its expertise in energy efficiency, clean energy deployment, innovative grid technologies, and AI-related energy research.

In addition, technologists and scientists involved tried finding better ways to predict power needs. They also addressed supply chain issues. However, the prime goal is to speed up the use of new technologies at the same time focus on reducing greenhouse gas emissions. Additionally, maintaining grid stability remains also remains a top priority.

However, predicting future energy demands from data centers is difficult. DOE’s report also highlighted uncertainties in private sector planning and potential energy efficiency breakthroughs that could change current projections.

Tips for a Sustainable Energy Future

Moving on, the DOE made several recommendations to address the challenges posed by the rising power demand from data centers. Notably, they are:

Creating a data center-scale AI testbed within the DOE could help researchers develop energy-efficient and flexible AI models.
Conducting a rapid assessment of available generation and storage technologies, particularly for backup power, which is typically supplied by diesel generators.

As AI continues to evolve, so will the challenges associated with powering it. However, with strategic planning and innovative solutions, the DOE can ensure that these demands are met sustainably and reliably. All in all, DOE will continue working on clean energy projects at the SRS and several other former nuclear sites.

FURTHER READING: U.S. DOE Injects $54.4M to Boost Carbon Management Tech and Cut Carbon Emissions

The post U.S. DOE Calls for Clean Energy Proposals at Savannah River Site appeared first on Carbon Credits.

EU Regulations Poised to Catalyze Global Carbon Market Convergence, Says Trafigura’s Hauman

August 30, 2024/in Uncategorized /by

In a recent episode of SmarterMarkets, David Greely interviews Hannah Hauman, the Global Head of Carbon Trading at Trafigura.

Trafigura is a leading global commodity trading company founded in 1993 that sources, stores, transports and delivers raw materials including oil, metals and minerals. With over 12,000 employees across 150 countries, Trafigura connects producers and consumers through efficient supply chains.

Greely and Hauman talk about the significant impact of new EU regulations on corporate sustainability reporting, carbon removal certification, and green claims.

These regulations are not only redefining what it means for companies to be “net zero” but are also driving a new era of corporate climate action.

The Carbon Market Conversation Delves into Several Highlights:

The EU Corporate Sustainability Reporting Directive (CSRD) is a game-changer, requiring around 49,000 companies across Europe to disclose detailed information on their emissions, business model, strategy, policies, risks, and targets in their management reports. This mandatory reporting covers scopes 1, 2, and 3, effectively putting sustainability reporting on par with financial reporting. Hannah emphasizes that this brings sustainability to the core of business decision-making and competitiveness.
The EU Carbon Removals and Carbon Farming (CRCF) regulation is crucial in defining what qualifies as a verified carbon removal. This regulation is pivotal in determining the “net” in net zero, as it sets the standards for what can be counted as a legitimate offset. Hannah highlights how this regulation is fostering advancements in carbon removal technologies and practices, which are essential for achieving net-zero emissions.
The EU Green Claims Directive adds another layer of accountability by regulating how companies can make carbon neutral and low carbon claims. Companies must back up their claims with objective measures, preventing greenwashing and ensuring transparency.

Source: Smarter Markets Podcast

Hannah also stresses the following key points:

The convergence of these regulations is creating a new framework where corporate climate commitments and progress are not only regulated and verified but also factored into financial reporting. This represents a significant shift from purely voluntary corporate action to a regulated corporate carbon market that will increasingly converge with compliance markets over time.
The EU is effectively exporting these regulations globally through supply chain reporting requirements and carbon border adjustments. This is catalyzing the development of domestic carbon pricing schemes in other countries, as they seek to remain competitive and avoid potential trade barriers.
Investing in high-quality carbon removal projects that benefit from scale and strong governance is crucial. Robust verification and certification mechanisms are needed to ensure the integrity of carbon removals.

Corporates face challenges in developing future-proof strategies to achieve their net-zero targets. A holistic approach that encompasses emissions reductions, carbon removals, and transparent reporting is necessary.

By creating a new definition of net zero and driving regulated corporate climate action, these regulations are set to have a profound impact on the global fight against climate change.

Find out how Trafigura is investing in carbon removal projects to help in this fight here.

The post EU Regulations Poised to Catalyze Global Carbon Market Convergence, Says Trafigura’s Hauman appeared first on Carbon Credits.

Microsoft’s Solar Power Move: Lighting Up Singapore and India’s Future

August 30, 2024/in Uncategorized /by

Microsoft is doubling down on its renewable energy commitments with groundbreaking deals in both Singapore and India. The company securred a 20-year agreement with Singapore’s largest SolarNova project and a significant green energy purchase from India’s ReNew Energy Global.

Shining Bright with Singapore’s SolarNova 8

The long-term contract will see Microsoft buying 100% of the renewable energy exported to the grid from the project, which is managed by EDP Renewables (EDPR).

The SolarNova 8 project is recognized as the largest solar initiative under Singapore’s SolarNova program. It aims to install solar panels on over 1,000 public housing blocks and more than 100 government-owned buildings. Together, they’ll collectively generate up to 200 megawatts (MW) of capacity.

The agreement is part of Microsoft’s broader strategy to meet its ambitious goal of using 100% renewable energy for its operations by 2030. The company has faced challenges in reducing its carbon footprint, particularly with rising emissions due to increased investments in artificial intelligence.

However, by securing a steady supply of renewable energy from projects like SolarNova 8, Microsoft is reinforcing its commitment to sustainability.

The SolarNova program, launched by Singapore’s Housing and Development Board (HDB) and the Economic Development Board (EDB), is a central component of the country’s plan to achieve a solar capacity of at least 2 gigawatts (GW) by 2030. The program has seen several phases, with SolarNova 8 being the most extensive to date. The energy generated from this phase alone is expected to contribute about 420 gigawatt-hours (GWh) of power annually, covering about 5% of Singapore’s total energy consumption.

Remarking on their Singapore renewables deal, Adrian Anderson, GM, Renewables, Carbon Free Energy, Microsoft, stated that:

“Building our renewable energy portfolio with EDPR ensures that we can continue to secure renewable energy supply to meet our Microsoft’s ambitious renewable energy and decarbonization goals.”

For Singapore, the success of the SolarNova program reflects the nation’s commitment to integrating sustainable energy solutions into its urban infrastructure, making it a model for other cities worldwide.

As the largest solar project in Singapore, SolarNova 8 not only boosts the nation’s clean energy capacity but also demonstrates how corporate partnerships can accelerate the shift towards a more sustainable future.

Tech Giants’ Solar Power Strategy

This partnership between Microsoft and EDPR is not their first collaboration. The two companies had previously worked together on a smaller solar project in Singapore in 2018, further cementing their relationship in advancing renewable energy initiatives.

Through these efforts, Microsoft is not only progressing towards its own sustainability goals but also supporting Singapore’s broader objectives under the Green Plan 2030, which targets significant reductions in carbon emissions and increased reliance on clean energy.

The deal highlights the growing trend of major corporations like Microsoft leveraging long-term power purchase agreements (PPAs) to secure renewable energy sources, thus driving the global energy transition.

Other tech giants are also using Renewable Energy Certificates (RECs) or renewable energy carbon credits, to tackle their carbon footprint.

In 2022, Amazon heavily relied on unbundled RECs for 52% of its renewable energy needs, making it the most dependent on these instruments among major tech companies. Amazon has acknowledged this reliance and stated plans to reduce it as more of its directly contracted renewable energy projects come online.

Likewise, Meta used unbundled RECs for 18% of its renewable energy in 2022. These approaches highlight different strategies of the big tech to achieve renewable energy goals.

It’s the same for Microsoft, which also aims to cut dependence on RECs in the future. Its acquisition of solar power from Singapore’s public buildings is a critical development in both the company’s and the country’s efforts to combat climate change.

Microsoft Expands Renewable Energy Push in India

Separately, in India, Microsoft has entered into an agreement to purchase 437.6 MW of green attributes from ReNew Energy Global. This contract is expected to generate over 1 million units of green electricity attributes annually, contributing significantly to Microsoft’s sustainability goals in the region.

This partnership is a substantial step forward for both companies, aligning with Microsoft’s ambitious renewable energy and decarbonization goals. Puneet Chandok, President of Microsoft India and South Asia, highlighted the importance of this agreement in accelerating Microsoft’s progress towards its sustainability objectives. He further said that:

“We are taking a holistic approach that includes progressing our climate goals and empowering the ecosystem with the technology that is needed to build a more resilient future.”

In addition to the energy supply contract, ReNew has committed to allocating $15 million of revenue from the Microsoft contract towards a community fund. This fund will focus on environmental justice initiatives, particularly those aimed at improving women’s livelihoods, economic empowerment, rural electrification, environmental remediation, and water quality. The ReNew Foundation, the philanthropic arm of ReNew, will collaborate on these initiatives, aligning with Microsoft’s environmental justice priorities.

Furthermore, in August 2024, Microsoft also entered into a five-year framework agreement with Pivot Energy to develop up to 500MW of community-scale solar projects across the United States from 2025 to 2029. This agreement further underscores Microsoft’s commitment to expanding its renewable energy footprint globally.

These agreements reflect Microsoft’s strategy to diversify its energy sources and support the global transition to renewable energy. These efforts are part of the company’s broader initiative to make renewable energy more accessible and widespread.

FURTHER READING: Microsoft Reported Q2 Record Earnings, How About Its Carbon Negative Goals?

The post Microsoft’s Solar Power Move: Lighting Up Singapore and India’s Future appeared first on Carbon Credits.

NVIDIA Crushes Q2 and Cuts Emissions but Shares Still Slide

August 29, 2024/in Uncategorized /by

NVIDIA had an impressive second quarter, surpassing market expectations with strong revenue growth and solid earnings. Despite these achievements, the company’s shares unexpectedly dipped. On the positive side, the chip giant successfully reduced its emissions and is aiming to incorporate sustainable solutions throughout its operations.

NVIDIA’s Impressive Q2 Results Indicate 360 Degree Growth

NVIDIA reported a remarkable $30.0 billion in revenue for the second quarter ending July 28, 2024. This marked a 15% increase from the previous quarter and a staggering 122% jump from last year.

The company gave back $15.4 billion to shareholders in the first half of fiscal 2025 through buying back shares and paying dividends. The company still has $7.5 billion available for more share buybacks. Recently, they approved an additional $50.0 billion for future buybacks. On June 7, 2024, NVIDIA also completed a ten-for-one stock split. This means they adjusted all share and per-share amounts accordingly.

source: MSN

Furthermore, it also revealed that its GAAP earnings per share increased to $0.67. This was a 12% rise from the previous quarter and 168% higher than a year ago. Non-GAAP earnings reached $0.68 per share, showing an 11% rise from last quarter and a 152% jump from last year. However, there is a paradox, despite making strong revenue, NVIDIA’s stock price dipped 2% after announcing the earnings.

source: MSN

The Key Drivers: Data Centers and AI Innovations

NVIDIA’s Data Center segment delivered record revenue of $26.3 billion, up 16% from the previous quarter and 154% year-over-year. The company’s new H200 Tensor Core and Blackwell architecture processors excelled in industry benchmarks, while cloud service providers like CoreWeave began offering H200-powered systems.

Notably, the chip magnate expanded its AI offerings, including launching the NIM microservices platform and collaborating with Hugging Face for large language model deployment. The company also advanced quantum computing through its CUDA-Q platform at global supercomputing centers.

Jensen Huang, founder, and CEO of NVIDIA.

“Hopper demand remains strong, and the anticipation for Blackwell is incredible. NVIDIA achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”

MUST READ: Nvidia Is the World’s Most Valuable Company, Giving Nuclear Power A Big Lift

Gaming and Professional Visualization Revenue Climbs

Gaming revenue reached $2.9 billion, a 9% increase from the prior quarter and a 16% rise from last year. NVIDIA introduced Project G-Assist, showcasing AI’s potential in gaming, and announced new RTX titles, bringing the total to over 600 games and apps.

The Professional Visualization segment earned $454 million, up 6% quarter-over-quarter and 20% year-over-year. NVIDIA introduced AI models and microservices for OpenUSD, enhancing workflows in digital twin and robotics development.

Automotive and Robotics Jumps

Automotive revenue grew to $346 million, a 5% increase from the last quarter and a 37% jump from the previous year. NVIDIA’s Isaac robotics platform gained adoption from leaders like BYD Electronics, Siemens, and Teradyne Robotics.

NVIDIA launched Omniverse Cloud Sensor RTX microservices to accelerate the development of autonomous machines, while its advancements in generative AI helped win the Autonomous Grand Challenge at a major computer vision conference.

How NVIDIA’s Sustainability Plan Combats Emissions

Climate Targets: Scope 1,2 and 3 emissions

The chip giant minimizes greenhouse gas (GHG) emissions throughout its product lifecycle. The company evaluates its carbon footprint and considers climate risks, including evolving regulations and market shifts.

By the end of FY25, NVIDIA plans to achieve 100% renewable electricity for all offices and data centers across the globe. This goal is expected to reduce the company’s Scope 1 and 2 emissions based on climate science standards.

NVIDIA also targets its supply chain, responsible for scope 3 emissions. By 2026, the company aims to engage with suppliers responsible for at least 67% of its Scope 3 Category 1 GHG emissions. The goal is to encourage these suppliers to adopt science-based emission reduction targets.

In 2023, NVIDIA’s greenhouse gas emissions were 73,017 metric tons of CO2 equivalent, down from 82,822 metric tons in 2022.
NVIDIA’s energy use in 2023 was 496,901 megawatt hours, an increase from the previous year.

NVIDIA’s Blackwell: Leading in Energy Savings

Training AI models takes a lot of energy. As models get smarter, they need more power. But new tech, like NVIDIA’s Blackwell platform, is making AI training more energy-efficient.

Yes, you heard it right, Blackwell is a breakthrough. It powers advanced AI while using ten times less energy than older models. This reduces AI’s environmental impact and boosts its benefits. Moreover, the Blackwell GPUs offer a massive leap in energy efficiency, delivering up to 20 times better performance than traditional CPUs for AI and high-performance computing (HPC) tasks.

AI drives significant energy savings across industries. Another cutting-edge technology in this space is NVIDIA’s Earth-2 platform. It can predict climate changes 1,000 times faster and uses 3,000 times less energy than traditional models.

Jensen Huang also elaborated that Blackwell samples are now being shipped to partners and customers. Additionally, Spectrum-X Ethernet for AI and NVIDIA AI Enterprise software are two new product categories that have achieved significant scale. This demonstrates NVIDIA’s capability as a full-stack and data center-scale platform. Furthermore, Across the entire stack and ecosystem, NVIDIA is supporting everyone from frontier model makers to consumer internet services and enterprises. Moreover, generative AI is poised to revolutionize every industry.

As NVIDIA calls it their “Omniverse,” allows companies to create digital copies of their physical operations. This helps businesses cut waste and lower energy use. This digital shift is ushering in a sustainable industrial era by giving technology the utmost significance.

Going Water and Waste Smart

NVIDIA focuses on efficient water use, especially in cooling towers, landscaping, and sanitation, with extra care in drought-prone areas. The company’s LEED Gold-certified buildings in Santa Clara, set the perfect example for water-efficient designs, including low-flow fixtures and recycled water systems. Reclaimed water is used in cooling towers and irrigation, while rainwater is captured in bioswales.

Notably, this year the U.S. DoE awarded NVIDIA a grant to develop an advanced liquid-cooling system that would enhance energy efficiency and reduce environmental impact. The company aims to use this system mostly in its data centers.

Similarly, they take waste management very seriously. The three pillars are reduction, reuse, and recycling. For example, from equipment testing to R&D and production, everything is repurposed. Even their IT assets are refurbished which goes to the NVIDIA Foundation. Unusable items are recycled through certified e-waste vendors, ensuring safe disposal.

Looking ahead, NVIDIA expects Q3 revenue to hit $32.5 billion, with gross margins around 74-75%. They estimate their operating expenses to be about $4.3 billion on a GAAP basis and $3.0 billion non-GAAP. Additionally, we expect NVIDIA’s shares to perform better.

FURTHER READING: Nvidia AI Tech Ramps Up Carbon Capture & Storage Predictions 700,000x

The post NVIDIA Crushes Q2 and Cuts Emissions but Shares Still Slide appeared first on Carbon Credits.

Cobalt Crash: Why Prices Hit a 7-Year Low and What’s Next

August 29, 2024/in Uncategorized /by

Cobalt, a key ingredient in the batteries powering our electric vehicles (EVs) and devices, is facing turbulent times. Once a high-flying commodity, cobalt prices have now plummeted to levels not seen in years.

Cobalt prices have experienced a steeper decline than lithium. The European cobalt metal price hit a seven-year low of $12.75 per pound on August 19, 2024—a level not seen since October 2016. This price drop is largely attributed to weak demand for cobalt sulfate used in traction batteries, leading producers to shift focus to metal production for better profitability.

The increase in China-made cobalt metal exports to Europe has further pressured prices, with a 295.8% year-over-year rise in unwrought cobalt exports during the first half of the year.

Supply Glut: Why Cobalt Prices Are Plummeting

Glencore PLC, one of the top cobalt producers, has led the way in production cuts. The company reduced first-half output by 26.7% year-over-year. These cuts have been driven by lowered run rates at Mutanda and decreased grades and throughput at Kamoto.

Despite these reductions, the overall impact on the market surplus has been minimal, as companies like CMOC Group. continue to ramp up production, leveraging strong copper prices even if cobalt stocks need to be held until demand improves.

In light of these developments, S&P Global has downgraded its 2024 price forecasts for European cobalt metal by 4.4% to $13.69 per pound. Despite these downward revisions, there are some positive indicators for near-term demand.

Market players are anticipating a potential interest rate cut by the US Federal Reserve in September, which could lower financing costs for plug-in electric vehicles (PEVs) and improve economic conditions.

Additionally, China is expected to see a boost in PEV sales due to recently increased subsidies for vehicle trade-ins, offering 20,000 yuan for scrapping internal combustion engine cars in favor of new PEVs.

However, a broader recovery in the PEV market will require more than just these short-term measures. A sustained recovery will depend on improvements in consumer confidence, affordability, policy certainty, and continued investment in new models and infrastructure.

Glencore’s Gambit: Can Production Cuts Stabilize the Market?

The lithium and cobalt markets could also see divergent paths in the near future. While lithium producers are scaling back output in response to low prices, which may eventually balance supply with demand, cobalt production remains buoyed by high copper prices. This could prolong the market surplus and keep cobalt prices under pressure for a longer period.

Glencore CEO Gary Nagle has acknowledged the current oversupply in the cobalt market, predicting that it could persist for at least the next two years. This oversupply has been compounded by expanded production in Indonesia and the Democratic Republic of Congo (DRC), where cobalt is extracted as a by-product of nickel and copper mining, respectively. This dynamic limits the impact of low cobalt prices on overall production decisions.

Cobalt’s recent price trajectory has followed a classic pattern of boom and bust, while underscoring the volatility that has come to define the battery metals market.

Following a dramatic surge in 2017-2018, the market experienced a severe downturn, falling to $26,000 per ton by 2019. A similar pattern emerged this decade: cobalt prices soared to $82,000 per ton in March 2022, only to plummet to the current level of $24,900 per ton.

Chart from Reuters

China’s CMOC Group overtook Glencore as the world’s largest cobalt producer in 2023, with an output of 55,000 tons. CMOC’s expansion plans, particularly at its Tenke Fungurume copper mine in Congo, are expected to drive cobalt production to 100,000 tons by 2028.

How China and Indonesia Are Shaping Cobalt’s Future

Meanwhile, Indonesia has emerged as the second-largest cobalt producer globally, with production surging by 86% to 17,000 tons last year. This rapid increase is attributed to Indonesia’s extensive development of nickel mining and processing facilities. The country boasts a number of nickel-cobalt processing plants rising from 10 in 2023 to nearly 60 in 2024.

Historically, cobalt was primarily used in super-alloys for the aerospace industry, but demand has shifted towards EV batteries, which accounted for 73% of the 200,000 tons of cobalt consumed in 2023. Despite strong growth in lithium-iron-phosphate battery technology, which reduces the need for cobalt, the metal’s usage in EVs continues to grow, with a 12% year-on-year increase in May 2024.

However, demand growth has not kept pace with the surge in supply from the Congo and Indonesia. The market was oversupplied by 18,300 tons in 2023, following a surplus of 10,700 tons in 2022. Analysts from Macquarie Bank forecast that this surplus will persist until at least 2027, indicating continued downward pressure on prices.

The price decline has created opportunities for strategic buyers. China’s state reserves manager purchased 8,700 tons of cobalt in 2023 and plans to buy an additional 15,000 tons this year.

Boom and Bust: Cobalt’s Volatile Journey in the Battery Market

The Chicago Mercantile Exchange (CME) cobalt curve is currently in a pronounced contango, meaning that forward prices are higher than spot prices. This situation allows for profitable stock financing trades, though banks prefer to store financed inventory in locations where it can be easily sold, such as terminal markets.

Whether this marks the beginning of a larger trend remains to be seen. Still, the current market dynamics suggest that there will be a significant amount of cobalt looking for storage and trading opportunities in the coming months.

The International Energy Agency (IEA) forecasts a substantial increase in cobalt demand over the coming decades. Under its Sustainable Development Scenario, cobalt demand is expected to grow fivefold between 2020 and 2040.

The demand for cobalt, particularly driven by its critical role in electric vehicle batteries, is projected to triple by 2030. This anticipated surge underscores the need for new cobalt mines and deposits to meet the growing demand and support global sustainability goals.

As the market adjusts to these changes, participants will continue to monitor the interplay between supply, evolving battery technologies, and the pace of EV adoption, which will ultimately shape the future trajectory of cobalt prices.

The post Cobalt Crash: Why Prices Hit a 7-Year Low and What’s Next appeared first on Carbon Credits.

A Bold Plan: Tata to Transform Green Steel with Nuclear Power

August 28, 2024/in Uncategorized /by

The TATAs! Who doesn’t know them? Well, this time their plan is bigger and bolder. They are marching into the nuclear space. Tata Steel, one of the world’s largest steel producers, is exploring nuclear energy to produce green steel.

Small Reactors, Big Ambitions: Tata Reinvents Green Steel

Currently, the steel giant is assessing many factors that would play a pivotal role in green steel production. They aim to install around 200 BSRs, within the atomic energy sector. One unit will have a capacity of 220 MW, which would collectively provide about 45 GW of power.

Although Tata Steel has not officially commented, sources indicate that the company is keen on transitioning to green steel production. This move comes even though Tata Steel does not export significant quantities to Europe, where the ‘carbon border adjustment mechanism‘ (CBAM) is set to begin on January 1, 2026. The CBAM will impose a duty on certain imported goods, including steel, based on their greenhouse gas (GHG) emissions during production. This measure aims to protect European producers from being undercut by imports with higher carbon footprints.

Media reports also reveal that other steel companies are considering BSRs, but Tata Steel appears particularly interested. If the plan proceeds, Tata Steel intends to use the electricity generated by these BSRs to power electrolyzers for green hydrogen production. This hydrogen would then replace coking coal, which is used in steelmaking, significantly reducing carbon emissions. Thus, Tata has etched a clear pathway to decarbonize one of the hardest sectors.

The Curious Case of BSRs…

Bharat Small Reactors (BSRs) are nothing but SMRs that the US, Canada, and Russia have huge success. They can address many challenges related to design and innovation that India’s energy sector is currently facing.

BSRs can be installed in remote areas, extending energy access to such regions, and ensuring reliable power for isolated locations. Additionally, BSRs feature faster construction timelines. Their modular design helps in easy construction compared to traditional reactors.

Another significant feature is, they are cost-effective due to their smaller size and modular construction. They lower costs across their entire life cycle—from construction to decommissioning—making nuclear energy more affordable and sustainable for India.

In summary, Bharat Small Reactors are set to transform India’s energy landscape by offering a versatile, cost-effective, and timely solution to the country’s growing energy demand.

source: insightsonindia, BSR

Indian Finance Minister Nirmala Sitharaman elaborated on the government’s plan to partner with the private sector to establish BSRs. She hailed India for being the leader in this area, citing that the Nuclear Power Corporation of India (NPCIL) has operated 15 pressurized heavy water reactors (PHWRs) of 220 MW each for years.

Recently, R.B. Grover, a member of the Atomic Energy Commission, informed the media that these 220-MW PHWRs are being upgraded. The modified versions, known as BSRs, are expected to be licensed to the private sector.

Union Minister Dr. Jitendra Singh also announced that India’s Nuclear Power generation capacity is to increase by around 70 % in the next 5 years. Currently, its installed capacity is 7.48 GWe, which is expected to be 13.08 GWe by 2029.

Tata Steel Pioneering Sustainability in Netherlands

Green steel is steel produced with zero CO2 emissions. By 2030, Tata aims to cut their CO2 emissions by 40% and become 100% CO2-neutral by 2045. Their production process focuses on minimizing environmental impact and boosting circularity. They believe that increasing steel recycling and raising the use of scrap from 17% to 30% by 2030 will significantly enhance sustainability.

Tata Steel’s plant in Ijmuiden, Netherlands has become one of the most CO2-efficient steel facilities globally, ranking among the top three in the Worldsteel Association’s benchmark. The plant’s emissions per tonne of steel are 7% below the European average. Despite this achievement, Tata Steel remains responsible for 8% of all CO2 emissions in the Netherlands. The company is committed to reducing this percentage by all possible means to support the country’s climate goals.

source: Tata Steel sustainability report

To use nuclear power for green steel production, Tata Steel must first see amendments to the Atomic Energy Act. These changes are needed to permit private ownership and operation of nuclear power plants in India. The government is reportedly considering these legislative changes to initiate the project. We will keep you posted with further developments in this buzzing space.

FURTHER READING: India and Japan Strike a Green Ammonia Offtake Deal

The post A Bold Plan: Tata to Transform Green Steel with Nuclear Power appeared first on Carbon Credits.

Walmart Sees Revenue Boost in Q2, Emissions Nudge Higher

August 28, 2024/in Uncategorized /by

America’s favorite retail outlet, Walmart, released its earnings on August 15, indicating a fantastic revenue and sales surge. However, its emissions slightly increased from the 2015 baseline. Nevertheless, the company is balancing its profits and sustainability in a commendable way.

Walmart’s Q2 2025: Revenue Up, eCommerce Soars!

Walmart Inc. reported a solid 4.8% increase in revenue for Q2 2025, reaching $169.3 billion. eCommerce sales saw a remarkable 21% growth worldwide, reflecting Walmart’s expanding digital reach. The company’s operating income rose by 8.5%, with adjusted operating income up 7.2%. This growth was driven by improved gross margins, higher membership income, and reduced e-commerce losses.

The press release further mentions, Walmart’s GAAP EPS came in at $0.56. Adjusted EPS, which excludes a net loss on equity and other investments, was $0.67. This exceeded analysts’ expectations of $0.65, marking a notable 3.08% surprise.

source: Walmart

Key Performance Metrics

U.S. Comparable Store Sales: Walmart U.S. saw a 4.2% increase, outperforming the 3.5% average estimate.
Walmart International Sales Growth: Increased by 7.1%, slightly below the 7.7% estimate.
Sam’s Club Comparable Store Sales: Up 5.2%, surpassing the 4% estimate.
Total U.S. Comparable Store Sales: Grew by 4.3%, exceeding the 3.7% estimate.

source: Walmart

Looking ahead, Walmart expects Q3 net sales to grow between 3.25% and 4.25%, with operating income rising by 3.0% to 4.5% in constant currency. For the full fiscal year 2025, net sales are projected to increase by 3.75% to 4.75%, with adjusted operating income growing by 6.5% to 8.0%.

Overall, Walmart’s strong performance across various segments, including eCommerce and membership, highlights its robust business model and positive outlook.

Emissions Elevate Slightly Despite Bold Net Zero Ambitions

Walmart aims for zero emissions in global operations (Scopes 1 & 2) by 2040. The company targets a 1.5-degree Celsius trajectory for climate action, with interim goals to cut Scope 1 and 2 emissions by 35% by 2025 and 65% by 2030 from 2015 levels.

source: Walmart

Since 2015, Walmart has reduced Scope 1 and 2 emissions by 21.2% and carbon intensity by 43.5%. However, in 2022, Scope 1 emissions rose by 7.6% and Scope 2 emissions rose by 0.3% (market-based), totaling to emission spike of 4.1%. Emissions rose slightly due to increased use of onsite fuels, shifts in transportation, and slower renewable energy expansion. So how Walmart is planning to cut down its emissions? Discover below.

Renewable Energy and Energy Efficiency

By the end of 2022, Walmart had over 600 renewable energy projects across 10+ countries and plans to expand its solar generation in the coming years. It has secured PPAs for over 2 GW of renewable energy and has become the top retailer in terms of green power. It focuses on community solar projects for low-to-moderate-income areas and supports various renewable energy projects through coalitions.

Speaking of efficiency, they optimize energy use through real-time monitoring and upgrade old equipment with energy-efficient systems. Additionally, they aim to install energy meters in all stores across the U.S.

Electrification of its Transport

In 2022, Walmart’s fleet accounted for 24% of Scope 1 emissions. Thus, 100% electrification of its fleet including class 8 trucks became crucial to achieve the net zero goals. Although the company is not expecting to curb emissions massively, they are adopting zero-emissions technologies, scalable solutions, and implementing supportive policies.

Tackling Stationary Fuel Emissions

In 2022, stationary fuels made up 23% of Walmart’s Scope 1 emissions, rising 21% from 2021. Cold weather in the U.S., droughts in China, and power outages in South Africa increased their reliance on heating and backup generators. These challenges highlight the need for greater energy efficiency and cleaner power. Walmart is responding by adding electrical connections for refrigerated trailers to cut diesel use.

Mitigating Onsite Refrigerants

In 2022, onsite refrigerants made up 53% of Walmart’s Scope 1 emissions. Walmart reduced global refrigerant emissions by 2% through leak management using low-GWP (Global Warming Potential) systems. They took serious steps to maintain equipment to minimize leaks and replaced old systems with low-GWP alternatives like CO2 and ammonia.

Slashing Emissions through Project Gigaton

Through Project Gigaton, Walmart helps suppliers set and achieve their emissions reduction goals. Launched in 2017, the initiative offers guidance, workshops, and resources to support these efforts. Moreover, the company aims to reduce or avoid 1 billion metric tons of CO2e in product value chains by 2030. This is why they are working with groups like the World Wildlife Fund and Environmental Defense Fund. Notably, last year they avoided more than 175 MMT of CO2e through Project Gigaton.

source: Walmart

KNOW MORE: Walmart Issues $2 Billion Green Bonds

In conclusion, Walmart President and CEO Doug McMillon applauded the efforts by remarking,

“Our team delivered another strong quarter. They work hard every day to help our customers and members save time and money. Each part of our business is growing – store and club sales are up, eCommerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves. Our newer businesses like marketplace, advertising, and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model.”

FURTHER READING: Is Amazon’s Carbon Goal Enough to Offset Its Financial Hiccups?

The post Walmart Sees Revenue Boost in Q2, Emissions Nudge Higher appeared first on Carbon Credits.

Meta’s Bold Bet on Geothermal Energy and Carbon Footprint Reduction

August 28, 2024/in Uncategorized /by

Meta Platforms, the company behind Facebook, Instagram, and WhatsApp, isn’t just about connecting people online anymore. It’s taking real, concrete steps to protect the planet, too.

In a recent move that caught many by surprise, Meta announced a partnership with Sage Geosystems to power its U.S. data centers with geothermal energy.

This is a calculated part of Meta’s larger plan to hit net zero emissions by 2030. And with the increasing energy demands from artificial intelligence (AI) and data centers, this partnership is more crucial than ever.

Geothermal energy makes perfect sense for Meta. While solar and wind energy depend on the weather, geothermal taps into the Earth’s natural heat and provides a constant, reliable power source.

Sage Geosystems, a Houston-based startup, is bringing some serious innovation to the table with their Geopressured Geothermal System (GGS). This tech is different—it can generate clean energy in places where traditional geothermal methods just couldn’t reach.

The project kicks off in 2027 with the first phase delivering 150 megawatts of power. That might sound technical, but it means enough clean energy to power around 38,000 homes.

For Meta, it’s a big step toward reducing the carbon footprint of their data centers. Those data centers are energy hogs, and as Meta continues to grow its AI capabilities, the need for energy will only rise. Geothermal energy helps ensure that this growth doesn’t come with a side of increased emissions.

Geothermal Energy: The Secret Sauce Powering Meta’s Data Centers

Meta’s move to geothermal energy isn’t just about reducing its carbon footprint—it’s also about showing what’s possible.

Data centers are the beating heart of Meta’s digital empire, supporting everything from your latest Facebook post to the newest Instagram Story. But they’re also energy guzzlers. That’s where geothermal comes in as a savior, providing constant, clean energy to keep those centers running without burning more fossil fuels.

Sage Geosystems’ Geopressured Geothermal System (GGS) is the star here. Traditional geothermal energy is limited by geography—you need naturally occurring underground reservoirs of hot water, which limits its use to places like Nevada or California. But Sage’s technology breaks through those barriers.

It can tap into geothermal energy in more places, including areas east of the Rocky Mountains where Meta plans to set up the new facility. This opens up new possibilities not just for Meta but for the broader adoption of geothermal power across the U.S.

The 150-megawatt project is just the start. As technology evolves, Meta could roll out more geothermal projects, cementing its place as a leader in the renewable energy space. Meta is pushing the envelope and setting a new standard for how tech companies approach sustainability.

Meta’s Net Zero Journey: A Comprehensive Carbon Offset Strategy

Meta’s geothermal energy initiative is more than just a green headline—it’s a vital piece of a much bigger puzzle. Since 2020, Meta’s operations have run on 100% renewable energy. But the company’s ambitions are even higher: net zero emissions across its entire value chain by 2030.

That’s a tall order, especially when you consider that it includes everything from suppliers to employee commutes.

The shift to geothermal energy is a big step in that journey. With AI technologies and data centers consuming more power, Meta must find ways to meet those demands without adding to its carbon footprint. Geothermal energy provides a reliable, scalable solution that fits perfectly with Meta’s goals.

By integrating this clean energy source, Meta can continue growing while keeping its commitment to sustainability intact.

Meta has also invested in over 12,000 megawatts of renewable energy projects, including solar and wind.

These efforts are all part of a comprehensive strategy to reduce reliance on fossil fuels and minimize the company’s environmental impact.

On top of that, Meta is investing in carbon removal projects—initiatives designed to suck carbon dioxide out of the atmosphere, whether through reforestation or cutting-edge technologies like direct air capture. These projects are essential for tackling the emissions that are harder to eliminate.

Beyond Energy: Meta’s Broader Vision for Emissions Reductions

Meta’s commitment to sustainability isn’t just about energy. It’s rethinking the entire way the company operates, from the materials used in its products to how it manages its supply chain. The company is taking a holistic approach, addressing everything from water use to waste reduction and even biodiversity.

Take water, for example. Meta is on a mission to become water positive by 2030. That means the company will restore more water to the environment than it consumes in its operations. And it’s not just talk—Meta is investing in real projects that aim to make this goal a reality.

The same goes for waste. Meta is pushing for circular practices across its operations, focusing on reducing waste and reusing materials whenever possible. By extending the lifespan of products and reducing the need for new materials, Meta is cutting costs and reducing its environmental impact at the same time.

And let’s not forget the supply chain. Meta’s responsible supply chain program is all about collaboration. The company is working closely with its suppliers to help them set and meet their own sustainability goals. It’s a win-win situation: suppliers become more sustainable, and Meta reduces its overall carbon footprint.

Meta’s leadership in sustainability is making waves across the tech industry. The company’s commitment to clean energy, water stewardship, and waste reduction sets a new standard for what corporate sustainability can look like.

In the end, Meta’s partnership with Sage Geosystems is a bold step forward. It’s about more than just powering data centers—it’s about shaping a sustainable future for all.

As Meta continues to innovate and expand, its commitment to the planet remains at the core of everything it does. This is the kind of leadership that’s needed to reduce emissions, and Meta is proving that it’s up to the challenge, one geothermal project at a time.

The post Meta’s Bold Bet on Geothermal Energy and Carbon Footprint Reduction appeared first on Carbon Credits.