October 2024 – Page 5 – The Global Carbon Fund

BloombergNEF Reveals Mining Needs $2.1 Trillion by 2050 to Fuel Net-Zero Raw Material Demand. Where Does Silver Stand?

October 12, 2024/in Uncategorized /by

The mining industry faces a critical supply shortage of key metals, despite growth in supply over the past decade. According to BloombergNEF’s Transition Metals Outlook, the world needs $2.1 trillion in new mining investments by 2050 to meet the demand for clean energy technologies. It further illustrates that essential metals like aluminum, copper, and lithium could face deficits as early as this year, which might make EVs, wind turbines, and other low-carbon technologies more expensive.

Kwasi Ampofo, head of metals and mining at BNEF and lead author of the report said,

“The prolonged deficit of these metals will lead to higher prices for raw materials, which increases the cost of clean energy technologies. High costs could slow their adoption, and the energy transition at large”

Interestingly, BloombergNEF’s Economic Transition Scenario (ETS) highlights, that between 2024 and 2050, the world will need about 3 billion metric tons of metals to drive the global energy transition. It further estimates that achieving net zero emissions by 2050 could push that demand to 6 billion metric tons. This means this can spike metal prices and slow the progress of green technologies.

Recycling Metals, A Viable Solution for Supply and Emissions

However, BNEF says recycling metals can ease supply pressures. Sooner, recycled materials will play a crucial role in the supply chain, which will also reduce overall emissions from production.

According to Allan Ray Restauro, a metals and mining associate at BNEF,

“Good government policies are crucial to the industry’s success. For batteries and stationary storage, governments need to establish collection networks, set the requirements for recovery rates, develop the frameworks to trace individual cells and provide the principles on second-life battery management. These actions can build a robust system that oversees the full lifecycle of battery metals.”

Decarbonizing Mining for a Low-Carbon Future

As the world moves toward a low-emissions economy, resource-rich countries face a tough challenge: reducing emissions while developing their mining sectors. This is because the mining industry is significant for supplying minerals needed for clean energy technologies. Sadly, mining still contributes to global emissions, especially in coal extraction.

Minerals used in selected clean energy technologies

Source: IEA, 2022, p. 6. CC BY 4.0

Countries like Chile are showing progress by using renewable energy in mining operations, but many developing nations struggle to balance growth, sustainability, and emissions goals. In this regard, governments must adopt policies that decarbonize mining while ensuring economic growth and meeting Paris Agreement targets. Countries that implement strong climate policies along with robust financing are the ones to succeed in their global commitments.

Southeast Asia Set to Lead in Metal Demand Growth

Certainly, the demand for energy transition metals will vary by region. The research indicated that Southeast Asia is poised to become the fastest-growing market for these materials in the 2030s. The region’s vast mining industry could benefit from this demand surge, helping to accelerate industrialization while contributing to global emissions reductions. Conversely, China’s consumption outpaced the global average between 2020 and 2023. The country’s consumption of transition metals is expected to peak by 2030.

In summary, a $2.1 trillion investment in mining is crucial to meet the global push for clean energy. As metal supplies tighten and prices rise, recycling and supportive policies will be essential to keeping the energy transition on track.

MUST READ: Alaska Energy Metals Pioneers A Model of Carbon-Neutral Mining

Silver Surges as Coeur Mining Acquires SilverCrest

Coeur Mining is making a strategic move to strengthen silver in the industry. In a $1.7 billion all-share deal, Coeur is set to acquire Canadian silver producer SilverCrest, adding the high-grade, low-cost Las Chispas mine in Mexico to its portfolio.

With this acquisition, Coeur has all the potential to become a major global silver producer, aiming to produce 21 million ounces of silver and 432,000 ounces of gold annually. The Las Chispas mine, which began production in late 2022, has over 10.25 million silver equivalent ounces produced in its first full year of operations. Coeur’s CEO Mitchell J. Krebs highlighted the mine’s strong operational performance and low cash costs of $7.73 per ounce.

The press release reported, that in this partnership Coeur will have a 63% share, and SilverCrest will hold 37%. The acquisition price of $11.34 per share offers an 18% premium to SilverCrest’s recent trading levels. Both companies’ boards have endorsed the deal, which is expected to close in Q1 2025 as regulatory and shareholder approval is pending.

Rising Silver Demand and Market Consolidation

According to the United States Geological Survey (USGS), Mexico led global silver production in 2022, producing an estimated 6,300 metric tons of silver. This output far surpassed China, the second-largest producer, with 3,600 metric tons.

While Mexico dominates in production, Peru holds the largest silver reserves globally, with 98,000 metric tons. Australia follows closely, with reserves totaling 92,000 metric tons. Peru’s stable silver output is supported by its vast reserves and advanced mining infrastructure.

In 2023, silver prices jumped nearly 35% due to heightened demand for solar energy and electronics. This surge has triggered significant mergers in the silver mining sector, including Coeur Mining’s $1.7 billion acquisition of SilverCrest and First Majestic’s $970 million purchase of Gatos Silver. Despite these moves, the market grapples with supply shortages, intensifying the race for reserves. On a positive note, Coeur’s acquisition should be a ray of hope for the global silver industry.

The post BloombergNEF Reveals Mining Needs $2.1 Trillion by 2050 to Fuel Net-Zero Raw Material Demand. Where Does Silver Stand? appeared first on Carbon Credits.

Supreme Court to Rule on Nuclear Waste Storage in Texas: Could Carbon-Free Energy Hang in the Balance?

October 11, 2024/in Uncategorized /by

The U.S. Supreme Court has agreed to review a case concerning a proposed nuclear waste storage facility in Texas. The project was meant to be a temporary site for storing spent nuclear fuel, but Texas state officials, along with landowners and energy groups, opposed it. They argued that the U.S. Nuclear Regulatory Commission (NRC) didn’t have the authority to approve such a facility away from nuclear reactors. The Fifth Circuit Court agreed and blocked the project.

Now, the Supreme Court is being asked to weigh in on two key issues:

Can third parties challenge an agency’s decision when they believe it oversteps its authority?
Does the NRC have the legal power to approve private companies to store nuclear waste far from the reactors where it was generated?

In a nutshell, here are the second-order effects of the Supreme Court’s final decision:

Nuclear Waste Management Stalemate: If the Supreme Court upholds the lower court’s ruling, it could delay or complicate efforts to find new storage sites for nuclear waste, a longstanding problem for the U.S.
Energy Sector Impact: Delays in resolving nuclear waste storage could discourage further investments in nuclear energy, just as demand for clean energy is growing. Nuclear power is seen as a critical part of reducing carbon emissions. Thus, this legal battle may slow the nuclear industry’s growth.
Shift in Federal Policy: A decision against the NRC could push the government to revamp nuclear waste policies and create new legal frameworks to address the issue. The fight over where to put this waste could escalate, particularly in Western states like Nevada, where past efforts were blocked.

Waste Not, Want Not: How Delays Can Hurt U.S. Nuclear Energy

If the Supreme Court sides with the NRC, it could pave the way for more interim storage sites. This could offer a temporary fix to the nation’s nuclear waste problem. However, the challenge of finding a permanent solution would remain.

This case is significant for the future of U.S. nuclear energy. This particularly applies to how the country manages nuclear waste—a longstanding challenge in the nuclear industry.

SEE MORE: What Does the U.S. Need to Triple Its Nuclear Capacity by 2050? DOE Explains…

The U.S. produces around 2,000 metric tons of spent nuclear fuel annually. Despite this, the total volume is small—less than half an Olympic pool. Since the 1950s, the spent fuel could fit on a single football field stacked less than 10 yards high. The energy produced from this fuel powers over 70 million homes, avoiding 400 million metric tons of CO2 emissions.

Spent nuclear fuel is stored at over 70 sites in 35 U.S. states. A quarter of these sites no longer have operational reactors. The Department of Energy is considering consolidating the fuel at interim storage facilities.

The Supreme Court’s decision to review the cancellation of a permit for a temporary nuclear waste storage site in Texas could have major implications for the U.S. nuclear program.

The Growing Problem of Spent Fuel Storage

The U.S. relies on nuclear power for about 20% of its electricity. As the country pushes for clean energy and net-zero emissions goals, nuclear energy is becoming more critical due to its low-carbon emissions.

However, one of the biggest unresolved issues is the storage of spent nuclear fuel. Currently, there is no permanent solution in place for long-term nuclear waste disposal. Moreover, many reactors store waste on-site, which is not sustainable long-term.

The U.S. Nuclear Regulatory Commission (NRC) has been trying to establish temporary storage sites to manage this waste. The proposed site in Texas, which this case revolves around, was meant to be a step toward addressing the nuclear waste problem, especially as the original plan to store waste at Yucca Mountain in Nevada has been abandoned due to political opposition.

Potential Impact of Supreme Court’s Decision: Is It Good or Bad?

If the Supreme Court sides with the NRC and allows the Texas site to move forward, it could be seen as a positive step for the nuclear energy sector. Temporary storage facilities like the one proposed are essential for managing the growing amount of nuclear waste from the U.S.’s aging nuclear fleet and for any future expansion of nuclear power to meet clean energy goals. Allowing these sites would enable the industry to continue operating without being hindered by the lack of long-term waste solutions.

On the other hand, if the Court upholds the lower court’s ruling and blocks the site, it would complicate the future of U.S. nuclear energy. The industry already faces significant challenges from environmental and political opposition, and this would add another obstacle.

Without a clear path for storing waste, it may become harder to justify building new nuclear reactors or even keeping older ones running. This could undermine U.S. energy independence and clean energy targets, as nuclear energy plays a key role in reducing greenhouse gas emissions.

Ultimately, the outcome of this case will shape the future direction of U.S. nuclear energy. It highlights a key issue in the country’s energy transition—how to handle nuclear waste responsibly while increasing reliance on nuclear power to meet clean energy goals.

The post Supreme Court to Rule on Nuclear Waste Storage in Texas: Could Carbon-Free Energy Hang in the Balance? appeared first on Carbon Credits.

Fortescue’s “Real Zero” Ambition Could Yield Up To $150M in Carbon Credits by 2030

October 11, 2024/in Uncategorized /by

Fortescue Metals Group is forging ahead with its bold plan to achieve “real zero” emissions by 2030, a move that could generate substantial financial rewards under the Australian government’s new carbon credit scheme. This initiative, known as Safeguard Mechanism Credits (SMCs), is part of the Albanese government’s broader strategy to incentivize businesses to cut emissions and meet the country’s climate targets.

If Fortescue succeeds in meeting its ambitious emissions goals, it could earn between $50 million and $150 million annually from selling the carbon credits.

Fortescue’s Bold “Real Zero” Ambition

Chairman Andrew Forrest has made it clear that Fortescue’s ultimate goal is to achieve “real zero” by eliminating all Scope 1 and Scope 2 emissions from its iron ore mining operations by 2030. This is distinct from “net zero,” where companies can rely on carbon offsets to balance out hard-to-abate or unavoidable emissions.

Forrest is a long-time critic of carbon offsets and suggests they do little to drive actual reductions in emissions. Instead, Fortescue’s focus is on achieving genuine emissions reductions through the transformation of its operations.

The mining giant’s commitment to decarbonization includes an extensive plan to overhaul its energy sources, transitioning from fossil fuels to renewable energy to power its operations. Fortescue estimated in 2022 that achieving “real zero” in its Pilbara mining district would require an investment of $US6+ billion.

The company’s strategy also involves the electrification of its mining fleet, investments in green hydrogen, and innovative technology solutions to reduce its carbon footprint.

Despite Forrest’s aversion to carbon offsets, Fortescue’s progress toward “real zero” could lead to the company becoming a major beneficiary of the Safeguard Mechanism Credits program.

RELEVANT: ASX Debuts Environmental Futures Contracts for Carbon Markets

The Clean Energy Regulator will allow companies to earn carbon credits if they exceed their mandated emissions reduction targets. For Fortescue, this could mean generating around 1.4 million SMCs by 2030. This is because its projected emissions could be significantly lower than the regulatory allowance for its iron ore production.

What is The Safeguard Mechanism Credits Scheme?

The Safeguard Mechanism, set to begin in 2024, is a key component of the Albanese government’s strategy to reduce national greenhouse gas emissions. The program rewards companies that cut their emissions beyond the required levels by granting them SMCs. These credits can then be sold to other companies that fail to meet their emissions reduction targets, creating a market-based approach to driving climate action.

Analysts project that the value of these credits could be substantial, with a government-imposed ceiling price of $75 per tonne.

If Fortescue succeeds in its decarbonization plans, it could generate tens of millions of dollars by selling SMCs to companies struggling to meet their own emissions reduction targets. According to projections, the miner will be permitted to emit around 1.4 million tonnes of carbon dioxide by 2030.

However, if the company manages to achieve its “real zero” goal, it will have cut all emissions. And thus, it could earn 1.4 million credits in that year alone. Given the price of $75/tonne, that could total about $105 million worth of carbon credits.

While the financial windfall from selling SMCs is attractive, Fortescue hasn’t yet decided whether to participate in this carbon market.

Andrew Forrest said that Fortescue is still finalizing its position on the Safeguard Mechanism, noting that:

“We will do this consistent with our broader approach to voluntary and compliance carbon markets, which is that the core focus must always be the delivery of real reductions in emissions.”

He reiterated that Fortescue’s core focus remains on achieving genuine emissions reductions, not on offsets or carbon capture technologies.

Decarbonization Challenges Amid Rising Emissions

Fortescue’s path to achieving “real zero” is fraught with challenges. While the company is making strides in decarbonizing its operations, it still has a long way to go.

In the year to June 2024, Fortescue’s Scope 1 and Scope 2 emissions—the direct emissions from its mining activities and those associated with its energy use—rose by about 7%. This increase in emissions led to the company exceeding its government-mandated emissions cap by about 120,000 tonnes. Therefore, the iron miner was forced to purchase $4.2 million worth of Australian Carbon Credit Units (ACCUs) to comply with the law.

Visual from Fortescue Climate Transition Plan report

Despite the setbacks, Fortescue has reaffirmed its commitment to decarbonization and has emphasized that it will only purchase carbon offsets when legally required. The company insists that it will not rely on carbon credits to achieve its 2030 target. It will remain focused on reducing emissions at the source.

The company has also pledged not to rely on carbon capture and storage (CCS) technologies, which it views as an insufficient solution for addressing the climate crisis.

Rival Approaches in the Mining Industry

Fortescue’s aggressive push toward “real zero” stands in contrast to some of its competitors in the mining industry. Rival miner Rio Tinto, for instance, has set a target to halve its carbon emissions by 2030, at an estimated cost of $US6 billion.

Rio Tinto has been in major partnerships recently with its lithium expansion. Still, though Rio Tinto’s plans are substantial, they do not match the level of ambition shown by Fortescue, which is aiming for complete decarbonization in the same time frame.

Fortescue Metals Group’s “real zero” target is a landmark initiative that could set a new standard for the mining industry. It can also generate significant financial benefits through Australia’s Safeguard Mechanism Credits program. The company’s commitment to genuine emissions reductions, combined with its potential to earn millions from selling carbon credits, makes Fortescue a key player in the global transition to a low-carbon economy.

The post Fortescue’s “Real Zero” Ambition Could Yield Up To $150M in Carbon Credits by 2030 appeared first on Carbon Credits.

Can Apple Win The Race to Net Zero With Its Bold Clean Energy Plan?

October 11, 2024/in Uncategorized /by

Apple’s ambitious clean energy plan has positioned the company as a leader in the tech industry’s fight against climate change. With a clear goal of becoming carbon neutral across its entire supply chain by 2030, Apple is accelerating its data centers’ transformation while aligning with its broader net-zero emissions strategy.

Will the company make it and reach its bold carbon neutrality goals? Let’s take a closer look at how the iPhone maker plans to achieve its ambitious climate targets.

Apple’s Bold Path to a Cleaner, Greener Future

Apple’s journey to 2030 revolves around reducing its emissions across Scope 1, 2, and 3 categories by 75%. The tech giant will then offset the remaining emissions with carbon removal initiatives.

Apple has already achieved significant milestones in reducing its emissions, cutting them by over 55% since 2015. The company’s approach involves decarbonizing its three main emission sources: materials, electricity, and transportation. By addressing these three areas, Apple aims to achieve a balance between reducing its footprint and supporting renewable energy solutions.

Chart from Apple 2024 Environmental Report

A critical component of Apple’s clean energy strategy is its shift toward 100% clean energy across its facilities. The company reached a significant milestone in 2018 by sourcing 100% renewable energy for its offices, retail stores, and data centers. This progress laid the foundation for Apple’s broader commitment to become carbon neutral throughout its supply chain, setting an example for other companies to follow.

Quenching Data Center’s Thirst for Power

Data centers are among the most energy-intensive operations for tech companies. Apple’s data centers require substantial resources to cool the servers and IT equipment, making them a key focus for the company’s clean energy initiatives.

One of Apple’s key efforts is optimizing its server designs for improved energy efficiency, saving over 36 million kilowatt-hours annually in 2023 alone. The tech giant’s data centers consumed 2.344 billion kWh of electricity in the same year, up from the previous year’s 2.14 billion.

Despite the massive energy use, 100% of this electricity came from renewable sources, including solar, wind, biogas, and low-impact hydropower. Additionally, its colocation data center energy use dropped slightly to 483 million kWh, though overall colocation power consumption increased.

Chart from Apple 2024 Environmental Report

To sustain its clean energy goals, Apple is building its own renewable power projects and collaborating with utilities. The company’s data centers have been powered by renewable energy since 2014, leading to a 54% reduction in greenhouse gas emissions. Supporting services like iCloud and Siri, Apple serves one billion users globally.

The company’s energy-efficient cooling systems also play a significant role in minimizing energy usage, further boosting the overall efficiency of its data centers.

Apple’s data center acceleration plays a crucial role in the company’s overall net-zero emissions plan. By maintaining 100% clean energy at its data centers, Apple reduces the carbon footprint associated with its digital infrastructure. This combination of clean energy and energy efficiency is essential to Apple’s broader goal of achieving carbon neutrality by 2030.

SEE MORE: Is Apple Leading the Way in Tech and Sustainability? Q3 Results Beat Expectations

Green Inside and Out: Recycled Materials and Product Energy Efficiency

A key part of Apple’s clean energy plan involves the transition to using 100% recycled and renewable materials in its products. The iPhone maker has made significant progress in this area.

In 2023, 22% of materials in shipped products were from recycled or renewable sources. By 2025, Apple plans to use 100% recycled cobalt in all Apple-designed batteries and 100% recycled gold plating in its circuit boards. It also aims to use recycled rare earth elements in magnets.

The company has prioritized 15 key materials, including aluminum, cobalt, gold, and lithium, based on environmental, social, and supply chain impacts. These materials represented 87% of the total product mass shipped in 2023, advancing Apple’s sustainability goals.

Chart from Apple 2024 Environmental Report

Product energy efficiency is another critical element of Apple’s carbon emissions reduction. As the use of Apple products accounts for 29% of its gross carbon footprint, the company continues to innovate in product design to enhance energy efficiency. Since 2008, Apple has cut overall energy use across its product lines by more than 70%.

The transition to Apple Silicon chips, particularly in its Mac devices, has driven significant energy efficiency improvements. For instance, the M2 Mac mini reduced energy use while enhancing performance, and the A15 Bionic chip eliminated the need for internal fans, further reducing energy consumption.

Apple’s efforts have led to all eligible products receiving ENERGY STAR ratings, reinforcing their superior energy efficiency.

How Apple’s Supply Chain Partners Are Going Green

Apple’s net-zero emissions plan goes beyond its internal operations, extending to its supply chain. The Supplier Clean Energy Program, launched in 2015, is a cornerstone of Apple’s decarbonization efforts. This initiative encourages suppliers to transition to 100% renewable electricity in the production of Apple products.

As of March 2024, over 320 suppliers, representing 95% of Apple’s direct manufacturing spend, have committed to using 100% renewable electricity.

To further accelerate progress, Apple has integrated renewable energy requirements into its Supplier Code of Conduct, requiring all direct suppliers to adopt clean energy practices. This shift is not only a critical step toward achieving Apple’s 2030 carbon neutrality goal but also serves as a blueprint for other companies aiming to reduce their carbon footprints.

Apple’s commitment to driving industry-wide change makes its supply chain decarbonization a model for global corporate sustainability efforts.

Carbon Removal Credits: The Final Piece in Apple’s Climate Puzzle

While Apple’s primary focus is on reducing emissions, some emissions remain unavoidable with current technologies. For those emissions, Apple is investing in carbon offset projects, including nature-based solutions like forest restoration and mangrove planting. These projects aim to sequester carbon, with an emphasis on transparency, permanence, and measurable impacts.

In March 2024, Apple’s initial $200 million investment in carbon removals through its Restore Fund has grown to $280 million. The fund focuses on supporting nature-based carbon removal projects.

The company’s roadmap includes a clear vision for achieving long-term sustainability goals, including a 90% reduction in emissions by 2050. Though challenges remain, Apple’s leadership in clean energy, data center acceleration, and net-zero emissions serves as a powerful example of how corporations can drive meaningful change in the fight against climate change.

The post Can Apple Win The Race to Net Zero With Its Bold Clean Energy Plan? appeared first on Carbon Credits.

Malaysia’s First Industrial Biochar Facility, Carbon Plus Partners with CrystalTrade for Carbon Removal Optimization

October 11, 2024/in Uncategorized /by

Carbon Plus has launched Malaysia’s first industrial biochar facility, the Bukit Selar Carbon Station, located in Bukit Selar, Kelantan. This pioneering facility, which will produce 500 tonnes of high-quality biochar annually, utilizes advanced gasification technology provided by Renewables Plus. The feedstock for biochar production includes wild, mature bamboo and Palm Kernel Shell (PKS), a byproduct of palm oil production.

To enhance the efficiency and transparency of its operations, Carbon Plus has integrated CrystalTrade’s digital Monitoring, Reporting, and Verification (dMRV) solution. This technology allows Carbon Plus to track and optimize its carbon removal processes while generating CO2 Removal Certificates (CORCs) under the Puro.earth methodology.

dMRV Integration: Boosting Efficiency and Transparency

By employing the CrystalTrade dMRV system, Carbon Plus can monitor each stage of biochar production with precision. This ensures accurate, real-time calculations of the carbon removed and enables detailed tracking of the entire process—from biomass sourcing to emissions monitoring and carbon storage. The data-driven insights provided by dMRV offer full traceability, allowing Carbon Plus to continually optimize its operations and guarantee the integrity of its carbon removal projects.

Source: CrystalTrade Press Release

Who is Carbon Plus?

Carbon Plus is a pioneer in biochar project development and implementation across Malaysia and the surrounding region. Their innovative approach centers on converting biomass into biochar through gasification at temperatures exceeding 850˚C. This process produces highly stable biochar, which ensures long-term carbon storage and makes their carbon credits especially appealing to buyers.

The Bukit Selar Carbon Station, a demonstration project implemented by Carbon Plus’s subsidiary Carbon Zero, is just the beginning. With the facility’s current capacity to remove 1,200 tonnes of CO2e annually, Carbon Plus plans to scale up operations, establishing larger biochar facilities next year. This expansion is set to position the company as a key player in carbon removal across Southeast Asia.

Carbon Plus Biochar Facility

CrystalTrade’s dMRV: Unlocking Value for Carbon Credits

The integration of CrystalTrade’s dMRV system highlights the value of Carbon Plus’s high-quality carbon credits by ensuring they are backed by precise data. As the demand for carbon removal solutions grows, this technology will enable Carbon Plus to monitor and scale its projects efficiently.

Project developers interested in enhancing their carbon removal initiatives can adopt their unique solution. They offer all the necessary tools to optimize performance, ensure transparency, and remain competitive in an evolving carbon market.

The Unique dMRV Carbon Management Software for Carbon Removal Technologies

They manage the entire lifecycle of a biochar project, from feasibility studies to the sale of carbon credits. The entire process is backed by their hallmark dMRV for biochar platform. It typically has 5 stages:

1. Pre-feasibility studies

Technical analysis (pyrolysis technology, credits estimations…)
Carbon crediting comparison (Puro.earth, CSI, Verra)
Analysis of needed parameters for verification

2. Life Cycle Analysis

Collection of data (Upstream, core and downstream processes)
Production of the LCA model aligned with Puro.earth requirements and ISO 14040/44 standard

3. Project Registration

Carbon documentation (Environmental permits, Final use…)
Support in the submission of the documentation to the Standard

4. Pre-sale / sale of carbon credits

Offtake agreement on the future deliveries of credits
Sale of the credits to buyers through our client’s base, RFPs…
Portfolio constitution of credits for buyers

dMRV for biochar project

Traceability of the biochar at a batch level. Use of QR-Code, and bar code scanning to track bags from the factory to the final use.
Real-time LCA monitoring of the emissions on the Biomass, production, and use of the biochar.

Disclaimer: Information disseminated for CrystalTrade

FURTHER READING: PETRONAS, ADNOC, and Storegga Forge Deal to Explore CCS in Malaysia

The post Malaysia’s First Industrial Biochar Facility, Carbon Plus Partners with CrystalTrade for Carbon Removal Optimization appeared first on Carbon Credits.

Seizing the Lithium Boom: Rio Tinto’s $6.7 Billion Deal for Arcadium Lithium

October 10, 2024/in Uncategorized /by

In a major strategic move, Rio Tinto has agreed to acquire U.S.-based Arcadium Lithium for $6.7 billion, marking a significant step in transforming it into a global leader in the lithium market. The all-cash deal, offering a 90% premium to Arcadium’s share price, positions Rio Tinto as the world’s third-largest producer of lithium which is a critical component in electric vehicle (EV) batteries and energy storage solutions.

Significantly, this acquisition, announced on October 9, underscores Rio Tinto’s commitment to the energy transition by expanding its footprint in low-carbon, high-demand raw materials.

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Why Rio Tinto’s Moment for Lithium is Now?

Lithium prices have recently dipped due to oversupply and slowed EV sales in China, but Rio Tinto’s CEO Jakob Stausholm remains confident about lithium’s long-term trend. The company expects lithium demand to grow by over 10% annually through 2040, driven by the global push toward electrification.

Jakob Stausholm, CEO of Rio Tinto CEO explained,

“Acquiring Arcadium Lithium is a significant step forward in Rio Tinto’s long-term strategy, creating a world-class lithium business alongside our leading aluminum and copper operations to supply materials needed for the energy transition. Arcadium Lithium is an outstanding business today and we will bring our scale, development capabilities, and financial strength to realize the full potential of its Tier 1 portfolio. This is a counter-cyclical expansion aligned with our disciplined capital allocation framework, increasing our exposure to a high-growth, attractive market at the right point in the cycle.”

The mining giant has been facing challenges in the lithium market, notably with its Jadar project in Serbia, which has encountered local opposition and regulatory delays. Thus, the acquisition of Arcadium is an instant boost to Rio Tinto’s lithium production capacity, giving the company access to resources that are already operational or nearing completion.

This acquisition not only strengthens Rio Tinto’s position in the rapidly growing EV market but also provides access to major automakers like Tesla, BMW, and General Motors.

LATEST: Driving Decarbonization: Rio Tinto and Green Lithium to Boost EU Lithium Supply

Arcadium’s Role in Expanding Rio Tinto’s Lithium Capacity

Arcadium Lithium has quickly become a global leader in sustainable lithium production. It has operating resources in Argentina and Australia and downstream conversion assets in the U.S., China, Japan, and the U.K. Notably, In the U.S. the company has an exclusive integrated mine-to-metal production facility in the Western Hemisphere for high-purity lithium metal.

The company leads the industry in lithium extraction, excelling in hard-rock mining, brine extraction, and direct lithium extraction (DLE). It also specializes in manufacturing lithium chemicals for high-performance applications.

Arcadium Lithium’s CEO Paul Graves expressed his sentiment,

“We are confident that this is a compelling cash offer that reflects a full and fair long-term value for our business and de-risks our shareholders’ exposure to the execution of our development portfolio and market volatility. This agreement with Rio Tinto demonstrates the value in what we have built over many years at Arcadium Lithium and its predecessor companies, and we are excited that this transaction will give us the opportunity to accelerate and expand our strategy, for the benefit of our customers, our employees, and the communities in which we operate.”

Paul praised the company for its broad range of lithium products and world-class manufacturing network, backed by advanced technology and expertise. Its diverse customer base, including Tesla, BMW, and General Motors, enhances Rio Tinto’s focus on sustainable industries.

Harnessing Quebec’s Hydropower

Furthermore, Arcadium’s operations, particularly in Quebec, are well-aligned with Rio Tinto’s focus on low-carbon solutions. Both companies utilize Quebec’s hydropower resources, which are critical for sustainable lithium production. This would help Rio produce lithium with a lower carbon footprint, thereby showcasing its sustainable mining practices.

With Arcadium’s plans to have 2X production capacity by 2028, Rio Tinto is poised to play a major role in the global supply of lithium in the future. As demand for clean energy materials continues to rise, the company’s ability to supply high-quality, sustainably produced lithium will be a key factor in its success.

Strategic and Financial Win: A Summary

Rio Tinto’s acquisition of Arcadium will leverage its scale, development skills, and financial strength to maximize Arcadium’s portfolio. The press release has summarized it somewhat this way:

Complementary Strengths

Rio Tinto’s financial strength and proven project management will help speed up the development of Arcadium’s top assets. Both companies have a strong presence in Argentina and Quebec, where Rio Tinto plans to create world-class lithium hubs.

On the other hand, Arcadium’s Tier 1 assets have consistently delivered high profits. With these resources, the company expects to increase its capacity by 130% by 2028. They envision to control the largest lithium resource base in the world in the future.

Solid Financial Gains

This acquisition promises substantial financial gains. Expected production growth will boost profits and cash flow in the future. It follows Rio Tinto’s disciplined capital strategy and will unlock great value for shareholders. Arcadium’s capital spending will make up about 5% of Rio Tinto’s projected $10 billion group expenditure for 2025 and 2026. Even with this, Rio Tinto will maintain its strong balance sheet and credit rating.

Closing the Deal

The acquisition is expected to close by mid-2025 and is pending for regulatory approvals and shareholders’ consent. Both companies’ boards have unanimously approved the deal, and early indications suggest a smooth path to completion.

Once the deal closes, Rio Tinto plans to integrate Arcadium’s operations with its existing lithium assets. Subsequently it would create a new business unit focused on lithium production and processing. The company has also expressed its commitment to retaining Arcadium’s workforce with the new beginning.

Jakob Stausholm assured further saying,

“We look forward to building on Arcadium Lithium’s contributions to the countries and communities where it operates, drawing on the strong presence we already have in these regions. Our team has deep conviction in the long-term value that combining our offerings will deliver to all stakeholders.”

Projections from the International Energy Agency (IEA) indicate that lithium demand will significantly increase, with the EVs and grid battery storage sectors—currently responsible for about 60% of total demand. This is expected to rise to approximately 90% by 2050 under both the Stated Policies (STEPS) and Net Zero Emissions (NZE) scenarios.

Source: Procured from Arcadium’s sustainability report, originally from IEA.

Thus, we hope by the time the market rebounds, Rio Tinto will be well-positioned to meet soaring demand with an expanded and diversified lithium portfolio.

The post Seizing the Lithium Boom: Rio Tinto’s $6.7 Billion Deal for Arcadium Lithium appeared first on Carbon Credits.

Volvo Gives Carbon Pricing a Go While Audi, BMW, Mercedes-Benz Also Lead the Green Charge

October 10, 2024/in Uncategorized /by

Electrification is rapidly transforming the automotive industry, with leading companies like Volvo, Mercedes-Benz, Audi, and BMW innovating to tackle their carbon emissions, paving the way toward cleaner transportation.

At the IAA Transportation show in Hannover, Germany, Volvo Trucks president Roger Alm discussed the company’s leadership in the electric truck market and its plans for the future. Volvo Trucks currently dominates the sector, holding a 51% market share in Europe and 40% in the US.

In the first half of 2024 alone, the company delivered over 2,500 electric trucks in Europe, with more than half coming from Volvo Trucks. The company’s early investment in electric vehicles (EVs), which began 5 years ago, has positioned it as a key player, with over 4,200 battery-electric trucks now operating in 48 countries.

Volvo’s Decarbonization and The Role of Carbon Pricing

The European EV maker is actively working to reduce fuel consumption by up to 10% in conventional trucks and by 5-8% in cab-over models, a dual approach to sustainability. Volvo Trucks is also expanding its electric truck lineup from 6 to 8 models, aiming to offer more options to customers across different segments.

However, scaling up electric truck production comes with challenges, especially as government subsidies for electric trucks have ended in countries like Germany. Despite these challenges, Alm remains optimistic. He recognizes the need for collaboration across sectors to build the necessary infrastructure, including a robust grid and charging network.

Notably, the EV maker’s president highlighted the role of carbon pricing in accelerating the transition to electric trucks. While subsidies have been helpful, he believes that carbon pricing will be crucial in leveling the playing field and driving competition in the industry. By putting a price on carbon emissions, companies will be incentivized to reduce their carbon footprint, making the shift to low-emission vehicles more economically viable.

By internalizing these costs through taxes on carbon emissions, companies are encouraged to reduce pollution and create more sustainable products. Alm sees this as a necessary step for the EV revolution to succeed.

Volvo Group has committed to achieving net-zero greenhouse gas (GHG) emissions across its entire value chain by 2040. This target is ten years earlier than the Science Based Targets Initiative (SBTi) goal.

Volvo’s targets focus on cutting carbon emissions by 40% per vehicle kilometer for trucks and buses by 2030.

Chart from the company website

Around 95% of Volvo’s emissions come from the use of sold products, and their plan prioritizes indirect emissions reductions. The company’s strategy emphasizes decarbonization through energy-efficient technologies, increasing renewable energy use, and circular business models.

Volvo’s Electrifying Lead

The German carmaker is focusing on key areas like battery-electric and hydrogen-powered trucks while advancing sustainable energy sources throughout its supply chain. The company works closely with partners to ensure sustainability is embedded into every stage of the production and operational process, from sourcing materials to end-of-life vehicle recycling.

Alm stressed the importance of offering a wide range of solutions to meet the diverse needs of the transportation industry. For example, long-haul transport has traditionally posed challenges for electric vehicles due to range limitations. This is where Volvo comes in with a new model designed for long-distance routes, offering a 600-kilometer range. This innovation includes the integration of a new e-axle technology, marking a significant step forward for long-distance electric transport.

Alm hinted at further developments in the future, yet he remains confident that Volvo will continue leading the industry forward. Volvo’s major rivals in the EV sector are also innovating to cut carbon emissions from their operations and supply chains.

From Luxury to Sustainability: Mercedes-Benz’s Carbon-Neutral Ambitions

Mercedes-Benz is targeting carbon neutrality for its entire new vehicle fleet by 2039, driven by its “Ambition 2039” plan. The company has been carbon-neutral at all production sites since 2022, relying on renewables and sustainable practices to reduce emissions.

Image from the company website

The German luxury carmaker is expanding its EV offerings, aiming for electric cars to account for 50% of its 2030 sales. Additionally, the company is working to minimize emissions throughout its value chain. Major decarbonization strategies include collaborating with suppliers and embracing circular economy principles to reduce waste and resource consumption.

Mercedes-Benz is a founding member of the “Transform to Net Zero” (TONZ) initiative, which brings together global companies to accelerate climate action and achieve net-zero emissions across industries. The carmaker focuses on sustainable solutions and customer demand for making climate-friendly luxury vehicles, promoting the automotive industry’s transition to a low-carbon future.

Audi’s Road to 100% Electric

Audi is committed to achieving net-zero carbon emissions by 2050 and reducing its environmental impact. Its latest decarbonization efforts focus on reducing CO₂ emissions across its entire value chain.

By 2025, Audi aims to cut emissions by 40% per vehicle compared to 2015 levels. The brand plans to offer only fully electric cars by 2033, contributing to its transition towards cleaner energy.

Image from the company website

Audi’s e-mobility strategy plays a pivotal role, with the company expanding its lineup of EVs and incorporating sustainable energy sources at all production sites. Their “Mission” program focuses on making global manufacturing operations carbon-neutral by 2025, including the Brussels and Győr sites that are already carbon-neutral.

Additionally, Audi promotes recycling materials like aluminum to reduce resource consumption and help minimize the environmental impact of raw material extraction.

BMW’s Circular Strategy

Another German brand, BMW aims to achieve a 40% reduction in CO₂ emissions across its vehicle lifecycle by 2030, compared to 2019. The company focuses on reducing carbon footprints from raw material extraction to end-of-life recycling. To support this, BMW sources 100% renewable energy for its production sites and has reduced production-related emissions by over 70% since 2006.

Moreover, BMW aims to reduce Scope 1 and 2 emissions by 80% between 2019 and 2030. Circular economy principles are integral to BMW’s strategy, with a focus on recycling materials like high-voltage batteries, aluminum, and steel.

Despite best efforts to reduce emissions, some are inevitable. To reach its ambitious climate targets, BMW is committed to offsetting these unavoidable emissions. This approach ensures that even as the company strives to reduce emissions throughout its operations, any remaining carbon output is balanced by supporting verified carbon offset projects.

These initiatives include investing in renewable energy, reforestation, and other carbon removal solutions. BMW’s vision is not only to deliver premium electric vehicles but to lead in reducing emissions throughout the automotive sector.

As electric mobility accelerates, these major electric automakers are setting the pace for sustainable, carbon-free transportation. If other carmakers like Volvo would embrace carbon pricing, accelerating to full electrification may not be a far possibility.

SEE MORE: Is the EV Market’s Momentum Slowing? Bloomberg Outlook

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AI-Powered Mineral Exploration: Billionaires-Backed Kobold Metals Raised $491 Million

October 10, 2024/in Uncategorized /by

Kobold Metals, a Berkeley, California-based startup, has raised $491 million out of its targeted $527 million funding round, as revealed in a recent regulatory filing. The company specializes in using artificial intelligence (AI) to discover new deposits of critical minerals like lithium and copper, which are essential for the global energy transition.

Kobold Metals is supported by a roster of high-profile backers, including billionaire investors Bill Gates, Jack Ma, and Jeff Bezos. In addition, prominent venture capital firms Andreessen Horowitz and T. Rowe Price co-led its previous funding round.

How Kobold Metals is Revolutionizing Mineral Exploration

Founded in 2018, Kobold Metals reached a valuation of $1 billion last year. According to The Wall Street Journal, the company aims to increase its valuation to $2 billion with the completion of the current funding round.

Once finalized, this will be one of the largest climate-tech capital raises of 2024, trailing only the $621 million Series E round by Ascend Elements, a company focused on renewable battery production, based on data from PitchBook.

The company has gained attention for its innovative use of machine learning and computer vision technologies to locate rare earth minerals. These minerals, particularly copper and lithium, are crucial for developing electric vehicles (EVs), renewable energy storage, and other technologies that are key to the global shift toward greener energy systems.

By deploying AI, Kobold Metals aims to expedite the discovery of these resources, reducing the time and financial costs traditionally associated with mineral exploration.

Kobold Metals’ pursuit of battery metals started 3 years ago in northern Quebec, Canada, where the company detected lithium near Glencore’s Raglan nickel mine. Since then, Kobold has expanded its exploration to about a dozen properties across Zambia, Quebec, Saskatchewan, Ontario, and Western Australia.

These ventures are often formed through joint partnerships, including collaborations with BHP and BlueJay Mining to explore critical minerals in Greenland.

Kobold’s AI Maps the Future of Critical Minerals

The mining startup aims to build what it describes as a “Google Maps” of the planet’s underground mineral deposits. By leveraging AI, Kobold can collect and analyze various data streams — including historical drilling data, satellite images, and geological surveys — to identify areas with a high potential for new mineral discoveries. The AI applies algorithms to this data, identifying geological patterns that suggest the presence of minerals.

Visual from the company website. Machine Prospector – a continually evolving system nade up of a growing repository of proprietary machine learning, data processing, and artificial intelligence modules, used to assess prospects and guide decisions at a global scale.

Kobold’s technology gives it a distinct edge, enabling it to locate resources that traditional geological methods might miss. This AI-driven approach helps the company pinpoint where mineral deposits are most likely to be found. It also aids miners in deciding which land to acquire and where to drill.

Despite the technological advances and strategic partnerships, the broader battery metals market has seen some turbulence. Lithium, a key component in electric vehicle batteries, experienced a two-year rally that peaked in 2022.

LITHIUM COMPANY SPOTLIGHT: The Fastest Developing North American Lithium Junior

However, the market has since collapsed due to an oversupply and slower-than-anticipated growth in battery demand. Rising interest rates have further dampened global EV sales, leading some automakers to scale back their production targets. According to Benchmark Mineral Intelligence, a consultancy firm, the lithium market is expected to remain in surplus until 2028.

One of the Silicon Valley firm’s primary goals is addressing this supply gap necessary to electrify transportation. The company projects that this gap, particularly for lithium, will reach a staggering $5 trillion.

Chart from Kobold Metals

Meeting this demand is critical to supporting the global shift toward electric vehicles and sustainable energy, as lithium is a key component in battery production. This underscores the urgent need for scaling up lithium mining and refining capabilities to accelerate the transition to a greener future.

In December last year, Kobold revealed intent to discover lithium in the U.S., Canada, Australia, Canada, and Africa.

From Lithium to Copper: The Race to Power the Global Energy Transition

Apart from lithium, a significant driver of Kobold’s growth has been its July 2024 announcement that its AI technology had successfully discovered a massive copper deposit in Zambia. This finding marks the largest copper discovery in over a decade. It then positioned the company as a pioneering force in modern mineral exploration.

Copper, in particular, is in high demand due to its critical role in electrical wiring and renewable energy infrastructure, such as wind turbines and solar panels.

With an estimated global demand for copper projected to reach 30 million metric tons by 2030, Kobold aims to efficiently locate high-potential copper deposits through advanced machine-learning techniques. As the EV market grows, the demand for copper is expected to increase significantly. Each electric vehicle requires about 80 kg of copper for wiring and components.

The timing of Kobold’s funding round comes amid increasing demand for raw materials essential for the energy transition. As governments and corporations worldwide push for decarbonization and renewable energy adoption, the need for materials like lithium and copper has soared.

According to industry experts, securing access to these resources is paramount to achieving climate goals, and companies like Kobold Metals are uniquely positioned to meet that demand.

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The Net Zero Game: Are Hotels and Restaurants Truly Committed to Reducing Carbon Emissions?

October 8, 2024/in Uncategorized /by

With their substantial energy consumption and carbon emissions, hotel and restaurant chains are becoming key targets for reducing greenhouse gas (GHG) emissions through improved sustainability practices. Major companies like Chipotle, Marriott, Hilton, and others are presenting two conflicting faces.

On one side, these companies boast about their efforts to reduce carbon emissions and take strong climate action. Chipotle, for instance, offers an app that lets customers track the carbon footprint of their meals.

On the other side, these companies are involved in trade associations that are actively opposing local and state climate regulations, often filing lawsuits that could hamper environmental progress.

How Far Do Hotels And Restaurants Are in Lowering Their Emissions?

Chipotle aims to cut its GHG emissions by 50% by 2030. The restaurant managed to reduce Scope 1 (direct) and 2 (indirect from purchased energy) emissions by 13% in 2023 but Scope 3 (other indirect) emissions rose by the same percentage due to new restaurant openings.

The restaurant chain reduced carbon emissions by 20% (vs. 2019 baseline) while growing its business by 80% as shown in the chart.

Chipotle’s strategy focuses on energy efficiency, reducing demand for traditional energy resources, and increasing the use of low-carbon and renewable energy. They commit to designing restaurants that rely less on fossil fuels like natural gas and aim for 100% renewable energy use.

Marriott and Hilton have made similar commitments, pledging to slash their emissions by nearly 50% by the same year.

Marriott aims to cut absolute Scope 1 and 2 GHG emissions by 46.2% by 2030, using 2019 as a baseline. It also targets a 27.5% reduction in Scope 3 emissions, covering energy use, waste, and employee commuting. However, despite carbon reduction efforts, the hotel’s emissions (Scope 1+2) rose (7%) alongside its revenue (14%) in 2023 compared with 2022.

Moreover, the hotel plans for 22% of its suppliers to adopt science-based carbon emissions reduction targets by 2028.

By 2050, the company aims to achieve a 90% reduction in Scope 1, 2, and 3 emissions, including emissions removal through bioenergy feedstocks. Marriott focuses on 3 distinct levers to reach its net zero target:

Energy reduction,
Getting energy from renewable sources, and
Buying goods with lower carbon footprints

Hilton Worldwide aims for net zero by 2030, with clear targets for reducing Scope 1, Scope 2, and Scope 3 emissions. In 2023, Hilton reported Scope 1 and 2 emissions of 2,570,111 MT CO2e, reflecting a 9% increase from 2022. Meanwhile, revenue also increased by 17% for the same period.

For Scope 3, the company reduced emissions from franchises by 5.50%, down to 4,020,579 MT CO2e. Hilton aims to cut Scope 1 and 2 emissions intensity by 75% from managed hotels and reduce Scope 3 emissions intensity from franchised hotels by 56%, both by 2030, using a 2008 baseline. The hospitality company was able to cut emissions intensity for managed hotels by 45% in 2023.

The problem of the climate policy split among hotels and restaurants is significant as their climate impact is substantial. Buildings, in particular, play a significant role in carbon emissions. The heating, cooling, and electricity consumed by commercial and residential structures account for about 35% of GHG emissions in the U.S., with large hotels and restaurants contributing a significant portion.

Climate Promises vs. Reality

In cities like Denver, lawmakers have passed ambitious climate regulations aimed at reducing the carbon footprint of buildings. The rules require large buildings, including hotels, to improve their energy efficiency by implementing measures like installing LED lighting, using heat pumps, and adding solar panels.

For example, Denver’s building performance standards mandate that around 3,000 buildings cut their energy use by 30% by 2030.

While some buildings, like a quarter of those in Denver, already meet the 2030 goals, others, such as the Sheraton Denver Downtown Hotel (part of Marriott), may need to reduce their energy consumption by more than one-third.

However, despite the public climate commitments of companies like Marriott and Hilton, their trade associations have opposed these building efficiency rules. In April, groups such as the Colorado Hotel & Lodging Association (where Marriott executives hold key board positions) filed lawsuits to block both state and city climate mandates. These legal actions argue that the regulations are preempted by federal energy law and claim that complying with the rules would cost billions of dollars.

The inconsistency between hotel climate pledges and trade group actions creates confusion among consumers and policymakers. Companies like Chipotle, which promote their sustainability efforts, are also key members of the Restaurant Law Center, a trade association leading lawsuits against climate regulations in multiple cities, including Denver.

Marriott, too, distances itself from the actions of the Colorado Hotel & Lodging Association, stating that it does not control the group’s decisions, even though its representatives hold influential board positions. These contradictions make it difficult for cities and states to advance meaningful climate legislation.

The Dilemma in Driving Climate Policy

Buildings are major contributors to climate change, accounting for significant carbon emissions, particularly in urban areas. In cities like Denver, buildings are responsible for roughly half of all climate emissions due to their reliance on methane gas for heating and electricity consumption, much of which is sourced from fossil fuels.

To combat this, many cities and states have implemented building performance standards aimed at improving energy efficiency, primarily targeting large commercial buildings like hotels and offices. These regulations offer flexibility in how building operators achieve energy reductions, allowing options such as lighting upgrades or solar installations.

The conflicts between the corporate climate commitments of major hotels and restaurant chains and trade association actions could have far-reaching implications. If industry groups succeed in rolling back city and state climate regulations, it could undermine hospitality companies’ efforts to reduce their carbon emissions.

At the same time, these legal battles send mixed messages to consumers, who increasingly expect these companies to take a stand on environmental issues.

As cities and states take on an increasingly important role in driving climate policy, the need for corporate transparency and accountability on climate issues has never been more urgent.

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

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