Canadian Gov’t Sets out $83B for Clean Investment Tax Credits

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Canadian industries seeking to slash their carbon footprint can expect $83 billion in clean investment tax credits after the federal government of Canada unveiled its 2023 budget. 

The 2023 federal budget includes tax credits for these three investments – clean electricity, clean-tech manufacturing, and hydrogen. Adding investment credits in carbon capture and storage brings the total tax incentives to about $83 billion through to 2034-35. 

Canada’s Clean Investment Tax Credits

The Canadian government said the spending is crucial to bolster the clean energy transition. It is also in response to other countries’ subsidies, particularly the U.S. Inflation Reduction Act passed in August 2022. IRA unlocked $369 billion to help heavy industries decarbonize through production tax credits. 

Deputy Prime Minister Chrystia Freeland, who introduced the federal budget, noted that:

“In what is the most significant economic transformation since the Industrial Revolution, our friends and partners around the world, chief among them the United States, are investing heavily to build clean economies.”

The largest focus of the tax credits is on clean electricity, which costs more than $6 billion over the first 5 years beginning in 2024. That amount will go up to over $25 billion until 2034-35. 

Indigenous-owned companies and provincial utilities can benefit from the clean tax credits.

Cleantech manufacturing will get about $11 billion in credits while carbon capture will take over $12 billion through to 2034-35.  

The clean hydrogen credit is worth about $5.6 billion over 5 years. Higher rebates go to projects that produce the cleanest hydrogen. 

Some industry players believe that the credit package for clean electricity is the most significant for meeting Canada’s climate goals. 

Canada adopted construction-focused project support, while the US opted for operational incentives depending on production volumes. In a sense, Canada has to offer more to compete with the US which rolled hundreds of billions of tax incentives. 

Canada’s Version of CCfDs 

Still, the federal budget wins praises for advancing the country’s transition to clean energy. But because it’s not covering operations, Canada has to have carbon pricing backstop up its sleeve. This is where its promised carbon contracts for difference (CCfDs) becomes important. 

CCfDs are a kind of insurance that enable investors to hedge against the possibility that the carbon tax will be eliminated by the future government. Tax scrapping in the future is the major reason why the oil and gas industry leaves carbon capture technology on the shelf. 

The industry didn’t have much from the budget, apart from minor changes in last year’s carbon capture incentives. It will receive a 50% tax credits. 

The CCfD will offer certainty to industry on future carbon pricing and credits. The policy will ensure that the carbon tax in the country remains relevant for years to come. 

In other words, companies can enter into contracts with the government trusting that they can recoup their investments in carbon capture even if the carbon tax is scrapped later on. 

But just like other policies, these contracts are still under consultation. 

The $15 Billion Canada Growth Fund

The CCfD will be implemented through a $15 billion Canada Growth Fund. The Fund was part of last year’s budget announcement. 

Though key details about CCfD are still lacking, the largest oilsands producers via its group, Pathway Alliance, praised the budget. The group is looking forward to having a “better understanding of the government’s intentions for CCfDs”.

However, some analysts think that the federal gov’t needs to pump in more money to incentivize investments in clean energy and reach its climate change targets. 

A Fixed Price for Carbon Credits, not Carbon Tax

Other industry experts believe that the proposed CCfDs program is too generous. That’s largely because they think that the Liberals seem to put a fixed price for carbon credits, not carbon tax. 

Climate campaigners find that weaker than the opposite – a fixed carbon tax is a stronger means to compel polluters to cut their emissions. They said that the CCfD program may cost the Canadian government more money than expected. 

But the proponents may find it more limiting to allow heavy emitters to pay for their pollution through carbon tax. It’s because they will pay only for a certain percentage of their total carbon footprint. 

On the contrary, allowing them to gain carbon credits for the carbon they captured will prompt them to abate their entire footprint. That’s because such credits won’t be subject to the carbon tax. 

Other industry leaders argue that the spending will be a bigger burden to the taxpayers, not the industry. The cost of the transition will shift too much onto those who pay the taxes. 

But overall, many find the budget praiseworthy by prioritizing investments on the clean energy transition. 

The 2023 federal budget, which includes 268 pages, will be up for intense debate and scrutiny in the coming months. 

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EU to Auction €8 Billion Carbon Credits Earlier this 2023

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The European Union (EU) seeks to carry out early auctions of its carbon credits or allowances this year, starting from July.

The goal of this decision is to raise extra funds to help EU nations reduce emissions and end reliance on Russian gas, says the European Commission (EC).

€8 Billion from Carbon Credit Sales

Established in 2005, the EU Emissions Trading System (ETS) is the world’s biggest carbon market, covering about 40% of total EU emissions.

The bloc aims to secure 20 billion euros ($21.62 billion) in grants from its carbon market. And €8 billion of that will come from the sales of EU carbon credits or permits happening earlier than scheduled.

According to the EC, there are about 16.5 million additional carbon credits for auction early in 2023. 

The remaining €12 billion will be from a carbon market fund intended to support green technological innovations. But this will only begin until the EU makes some changes in its law on carbon market auctions to verify the new volumes.   

In December last year, the EU made a new deal to reform its carbon market. The agreement is to make three major changes to the market:

To accelerate emissions cuts,
Phase out free allowances (carbon credits) to industries, and
Targets fuel emissions from the building and road transport sectors.

With the new deal, the original target of reducing the bloc’s emissions 55% by 2030 relative to 1990 levels increases to 62% from 2005 levels. Industries covered by the EU ETS must cut their emissions by that amount.

The Commission further said that selling 27 million carbon credits from a reserve into the market will replenish the EU carbon fund.

Decarbonizing Heavy Industries

EU member states are allowed to use the grants in renewable energy and energy-saving renovations to substitute Russian gas. They can also spend the money to help heavy industries decarbonize. 

After all, the EU’s core policy for reducing emissions is to force power plants and factories to pay for their pollution by buying carbon credits. 

For the first time in history, EU carbon prices hit over 100 euros per ton in February. That’s a significant increase from just a few years ago when the price was only 10 euros/ton. 

The price surge increases costs for industries but also improves the chance to invest in green technologies. 

Happened in the same month, the EC also set out $270 billion to support the bloc’s race to green transition and boost its net zero industry. This refers to the EU Green Deal Industrial Plan. The Plan will help ensure that the EU has access to various green technologies and solutions that are key to its net zero transition while bringing more quality jobs.

As part of the Plan, the EC proposed the Net-Zero Industry Act to ramp up manufacturing of clean technologies. The Act will establish a simpler and more predictable legal framework for net zero industries in the region. It will also make the bloc’s energy system more secure and sustainable during transition. 

The Commission said that the carbon credits for auction will be sold in the same volumes by August 2026. 

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What are Blue Carbon Credits? Everything You Need to Know

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Carbon credits from offset projects such as reforestation and direct air capture have become popular, but a new crediting method still in its infancy is quickly gaining attention globally – blue carbon. 

The role of marine ecosystems in removing carbon emissions has been in the spotlight lately, and the idea of a market to finance their protection.

Coastal ecosystems such as mangroves, tidal marshes and seagrass meadows can protect coastlines from disasters like storms, rising sea-levels and shoreline erosion. They regulate water quality and provide habitat for fish, ensuring food security and livelihoods for local communities.

But these ecosystems have been gaining more popularity for their role in fighting climate change by capturing and storing carbon from the atmosphere. Thus, giving them new fame as “blue carbon” ecosystems along with the credits they create – blue carbon credits.

As this fame is gaining momentum, many are asking what is a blue carbon credit? What are the possible ways to invest in it and how to buy it? This guide will help you learn everything you need to know about blue carbon credits and what to do to join this growing market.

What are Blue Carbon Credits?

Coastal habitats cover 2% of the ocean’s surface but store 50% of the carbon in their sediment. They’re a 75-gigaton carbon sink, which is equal to 8 years of carbon emissions from fossil fuel. 

The bad news is that these ecosystems are under threat – between 25% and 50% of marine habitats have gone in the past 100 years, according to the UN panel.

So, unlocking investments for this field through blue carbon can be the solution to saving these ecosystems. 

Blue carbon is a new concept which refers to carbon that’s stored in marine ecosystems mentioned earlier. Those ecosystems are providing a couple of ecological services like shoreline protection and water quality maintenance.

Source: NOAA Climate.gov, graphic adapted from original by Sarah Battle, NOAA Pacific Marine Environmental Laboratory.

More remarkably, blue carbon gains more attention as a potential source of carbon credits as they can capture and store huge amounts of carbon for long periods of time. In fact, research found that coastal wetlands and seagrass beds suck in carbon up to 40x faster than tropical rainforests. This makes them a valuable resource for mitigating climate change. 

But as it’s still in its early stage, there are many challenges that have to be fixed before it can be fully integrated into the global carbon market. 

Fortunately, as there’s growing interest and momentum around the world to develop blue carbon projects. And many of these organizations continue to develop standards and methodologies to measure and verify the CO2 stored in coastal ecosystems. 

How is a blue carbon credit generated?

When an ecosystem like a seagrass meadow is protected or restored, it can capture CO2. If this carbon capture is quantified and verified, it generates blue carbon credits. These credits are tradable on carbon markets for entities wanting to offset their GHG emissions. 

The revenue from the sales of blue carbon credits can then help fund the conservation and restoration of those ecosystems. 

To ensure that blue carbon credits are verifiable, they must meet established standards for carbon accounting and verification, such as the Verified Carbon Standard or the Gold Standard. The standards help make sure that the credits are indeed real, measurable, and verifiable carbon reductions and the projects that produce them meet the criteria. 

So far, the most popular projects are on restoring mangroves around the world. Mangroves have been estimated to prevent ~$65 billion in property damages and lower flood risk to millions of people each year.

Factor in their ecosystem service benefits projected to be at the range of $462 to $798 billion every year, and you get the picture how crucial their role is.

In 2021, Apple and Conservation International partnered to turn 11 thousands acres of mangroves to be the first to have its carbon sequestration potential converted into blue carbon credits verified by Verra.

Conservation International also worked with Procter & Gamble in a project that protected over a hundred thousand acres of mangroves in Palawan, Philippines. 

While mangroves are the most common sort of blue carbon projects, other initiatives also exist that produce blue carbon credits. Restoring and protecting marshes, seagrass, and kelp forests are also gaining interests from investors. 

Even more emerging is the concept of carbon sinking through seaweeds. Instead of letting the seaweeds decompose on shorelines, carbon sequestration companies take them to the ocean floor to capture carbon.

All these promising carbon sequestration abilities capture both investors and environmentalists. But there’s still a big gap in investment to support blue carbon projects. 

An estimate said that only 3% of the total climate investments goes to nature-based solutions and blue carbon efforts receive a small chunk of the funds. 

But the nascent sector is starting to get a lot of questions about how to invest in blue carbon projects via the credits they generate. If you have the same query in mind, let’s help you know your options.

How To Invest In Blue Carbon Credits

Blue carbon markets are relatively new compared with terrestrial carbon sequestration markets like tree planting. But they are seen to be a big part of the global demand for carbon credits.

The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) estimated that the carbon credit market will grow 15x its 2020 levels. It can be worth as much as $50bn by 2030.

In 2021, the value of the voluntary carbon market (VCM) is only $1 billion with some estimates to go up to $1.7bn in 2022.

The percentage of blue carbon credits trading in the VCM remains to be seen. But the trends say that they’re here to stay and grow.

When it comes to investing in blue carbon credits, it might be a bit more challenging than investing in other forms of credits. But for only one reason – the market is quite new and not yet established.

But that means you can’t invest in the market and support its growth. 

With that said, here are the three ways on how to invest in blue carbon credits:

1. Investing directly in blue carbon projects

While we can’t tell the exact number of companies developing blue carbon projects, there are many companies and organizations that are currently involved in this field.

Many companies are also interested in investing in these projects as a means to mitigate their carbon footprint and contribute to the conservation of coastal ecosystems. Some big names include Microsoft, Airbnb, and Shell. 

There are also many non-profit organizations and government agencies that are taking part in blue carbon conservation and restoration efforts.

Some blue carbon project developers may offer investment opportunities for you. These investments can be in the form of equity or debt financing. And the returns you get can vary depending on the project’s success.

2. Investing in blue carbon funds

If you prefer a more liquid investment opportunity, then you may want to invest in blue carbon funds. Some investment funds are focusing on blue carbon. 

This investment scheme can give you exposure to a diversified portfolio of blue carbon projects. Plus, the funds can also give you a more accessible way to invest in blue carbon credits than the first option above.

3. Buying blue carbon credits on the VCM

One last way for you to make your money grow with blue carbon is to purchase the credits on the VCM.

There are now a lot of platforms that allow you to buy carbon credits from blue carbon projects. You can use these credits to offset emissions or you can have them as a form of investment. 

But just remember to do your research to ensure that the credits you buy are from legitimate blue carbon projects.

So there you have it. The ways how to put your money into the market and grow it. 

A quick reminder though… investing in blue carbon credits has some risks, just like any other investment opportunities out there.

The major risks are natural – erosion, floods, and storms. Other risks may have something to do with regulations when developing and implementing the projects.

So, don’t forget to do your due diligence to know what investment option works best for you.

The same goes if you’re planning to buy blue carbon credits and want to know how. 

How To Buy Blue Carbon Credits

One big question you would want to know first is how much a blue carbon credit is worth? Just like other types of carbon credits, a blue carbon credit’s price is influenced by several factors. 

Location of the project is one factor. In Asia and Central America, each credit for blue carbon projects costs the range between $13 – $35. 

You can also buy blue carbon credits in many ways. Here are your few options, which are basically the same as the ways how to invest in blue carbon projects:

1. Purchase credits on the VCM

Blue carbon credits are traded on the VCM as one among the different types of credits available. Though not all of the companies selling carbon credits may have blue carbon credits in particular. 

You will know by visiting their website to see what projects those credits are from. 

The voluntary market is rich with different platforms trading blue carbon credits. But then again, see to it that the credits you buy are real and verifiable.  

2. Buy through investment funds 

You can also get the credits specifically from investment funds or ETFs (exchange-traded funds). These funds also come in different types so pick the one that’s into blue carbon projects. 

They offer investors the opportunity to earn returns while also financing the development and deployment of coastal and marine ecosystems. So, if you decide to buy through these funds, you’ll expose yourself to diversified funds with different risks.  

Just select the right fund that meets your offsetting needs. 

3. Direct investment

Lastly, you can also get the credits through direct investment in the project of your choice. You can buy them either in the form of equity or debt financing. The latter may offer higher returns for investors but they also come with bigger risk. 

If you decide to pick this last option, you may need to make sure that the project satisfies the established criteria and standards for blue carbon accounting and verification. 

You may also want to consider any co-benefits that the project provides such as local job creation and biodiversity conservation. The important thing is that your purchase aligns with your goals. 

Investing In Blue Carbon Credits

If you are interested in investing in blue carbon credits, it would be a great way to have another income stream while supporting the protection of marine ecosystems. 

But before you do, here are some things to keep in mind first:

Understanding the market: this means knowing the various types of projects that produce blue carbon credits, the specific type of credits available, and the demand for those credits. 

Assessing the investment opportunities: as mentioned earlier, there are many ways to invest in blue carbon credits. Carefully assess each of the options to know which one fits your investment goals and purpose. 

Weighing returns vs. risks: though investing in blue carbon credits offer attractive returns, there are also some risks that come with it.  As the demand for carbon credits grows in the long run, the value of blue carbon credits may also grow.

Doing your due diligence: before you invest in blue carbon projects or funds, perform a thorough research about it first. Just ensure that the project is capable of achieving the goals it claims it will do.   

So, overall, investing in blue carbon credits is a great means to contribute to climate action while getting a chance to earn. These credits are becoming more popular as the projects they support are very capable of keeping carbon away from causing more temperature rise. 

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Land Dispute Casts Doubt on Carbon Credits from Brazil’s Amazon

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The Jari Pará REDD+ Project, a corporate conservation initiative in Brazil’s Amazon rainforest, has come under scrutiny for selling carbon credits from publicly-owned land without state authorization. 

The project covers around 497,000 hectares, which Verra approved to issue carbon credits. Verra is a leading organization that certifies offsets.

However, a Thomson Reuters Foundation’s company (Context News)  investigation found that the project operated on disputed land ownership. This spurs a legal battle and raises concerns about the credibility of offsets from areas with contested land ownership.

The Disputed Jari Pará Project’s Land Ownership

Most of the forestry project area is registered as public land. Yet, the Jari Pará REDD+ project continued to operate on disputed land ownership, according to a Context investigation. 

The project began in 2014 with the aim to reduce emissions from deforestation and forest degradation while protecting biodiversity. But a 2012 state court ruling found that the company claiming to own the land, Jari Celulose, did not have the right to do so. This resulted in the cancellation of the land title in 2016.

In 2018, the state registered Fazenda Saracura, a 386,000-hectare land parcel, as public property, renaming it Gleba Arraiolos. 

Despite this, the 2019 Jari Pará REDD+ Project description and validation documents listed on Verra’s website link to the land parcel registered under Jari Celulose in Brazil’s Land Management System (SIGEF). It states that the land title was canceled in 2016 and is invalid. 

In particular, here is the project’s land parcels according to Context.

Map: Diana Baptista, André Cabette Fábio Source: Verra’s project 1811 registry, Report “Action against land-grabbing in register offices in the state of Pará”, Pará State Prosecution, Brazilian System of Land Management (SIGEF), Monte Alegre Real Estate Register Office

Brazilian law requires private businesses to have state permission to operate in public forests. But Jari Celulose claimed to be the “legitimate owner” of the estate in registration documents submitted to Verra in 2019.

Impact on the Credibility of Carbon Credits from Brazil’s Amazon

The REDD+ project’s sale of carbon credits based on invalid land ownership has raised doubts about the offsets’ credibility. Verra launched a review of the project and suspended the issuance of new carbon credits in response to the investigation. 

International firms and domestic companies bought credits from the Jari Pará project to offset their climate-heating emissions while protecting forests. Big names include Janssen, 3M, CNN, and BWM, as well as Globo and Bradesco.

State officials and researchers argue that the registration of Fazenda Saracura as public property questions the REDD+ project’s credibility. The cancellations and blockages against Jari Celulose’s land claims ensure that carbon credits from Brazil’s Amazon cannot be traded, according to Herena Melo, the agrarian prosecutor who led the investigation. 

While Jari Celulose claims to have the right to operate a carbon project on the land due to a 2021 Pará state lower court ruling, the case remains undecided.

The Brazil project’s sale of carbon credits from disputed land ownership highlights the unresolved issue of land-grabbing in the Amazon, with carbon credits making the situation more complex. 

Verra has launched a review of the project. Still, state officials and researchers argue that land-grabbing remains a significant problem in the region. 

The credibility of carbon credits from the Jari Pará REDD+ project in Brazil’s Amazon has come into question. This ultimately casts doubts about the validity of carbon offsets from areas with contested land ownership.

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Carbon Credits Funder CNR Raises $25 Million CAD

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Carbon Neutral Royalty (CNR), a permanent capital vehicle that finances and supports carbon credits generating projects, raised $25 Million CAD ($18M USD) from Beedie Investments.

Founded in 2021, the Vancouver-based firm finances projects in the Voluntary Carbon Market (VCM). CNR aims to build a high-quality, long-life portfolio of projects that generate carbon credits around the world to help companies achieve their climate or net zero pledges.

Beedie Capital is a multi-strategy direct investment platform that manages alternative investments for Beedie, one of the largest private companies in Western Canada. It combines the capabilities of an institutional investment platform with the flexibility and entrepreneurial mindset of a privately owned business.

The Raise

The $25 million raised will be for financing commitments with CNR’s existing partners and upcoming projects. These projects satisfy the company’s investment intentions of mitigating climate change and supporting local communities. 

CEO of CNR, Luke Leslie said:

“We’re delighted to have successfully closed this latest round of financing with a partner of Beedie Capital’s calibre. By allocating investment based on our own analysis of the VCM and using innovative structures, CNR seeks to encourage the flow of much needed funding to high impact projects.”

Its agreements and partnerships enable CNR to have access to high-quality carbon credits. 

CNR’s long-term partnership agreements ensure that it has secure and enduring access to high-quality carbon credits. 

The company has rapidly scaled its impact in the VCM by partnering with the best project developers working with carbon solutions they prefer. 

Source: CNR website

They believe that the market has an important role to play in the world’s race to net zero.

According to a report by BloombergNEF, the total value of carbon credits traded in the VCM to help meet corporate net zero goals can be worth $1 trillion as early as 2037. The analysts also said that more rigorous definitions of quality can help drive demand and solidify confidence in the VCM. 

Funding High-Quality Carbon Credits

CNR is working closely with its partners to fund and develop robust and high-integrity projects. They not only contribute to global decarbonization but also deliver benefits to local communities, economies and natural ecosystems. 

The company is committed to project and carbon credit integrity. It follows the recommendations of the Integrity Council for the Voluntary Carbon Market (ICVCM) for high-quality carbon credits. 

CNR further promotes the responsible use of voluntary carbon credits according to the mitigation hierarchy. 

The investing firm also adheres to the guidance of the claim by the Voluntary Carbon Markets Integrity Initiative (VCMI). The Claims Code aimed at standardizing definitions and reducing greenwashing in the VCM.

CNR’s portfolio also contributes directly to the advancement of 12 of the 17 UN’s Sustainable Development Goals (SDGs). To date, the company has the following portfolio impact:

The mangroves planted are in Asia while the cookstoves distributed are across 8 countries in Africa.

Meeting Climate Pledges

Managing Director at Beedie Capital, David Bell, said that CNR has a robust pipeline of projects that got their attention. He further added that CNR is capable of providing entities solutions to reach their climate pledges.

CNR has a pipeline of 160 million cookstove credits by 2037 in partnership with Burn. It also has a pipeline of 60 million blue carbon credits by 2047 through Worldview projects.

Entities can either buy or pre-buy carbon credits from CNR’s projects or seek the firm’s assistance in building their own portfolio to meet net zero goals. 

Another option is co-investing directly in CNR’s projects and getting a share of the carbon credits they generate. This allows co-investors to take direct action for climate and sustainable development.

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GE and Svante Join Hands to Develop Carbon Capture Tech

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GE Gas Power and Svante agreed to develop a carbon capture technology for natural gas power generation applications. 

Apart from the joint development agreement, GE had also invested in Svante as part of the latter’s fundraising round in December last year. Chevron led the round, capping the biggest carbon capture fundraising deal in the region.

The Carbon Capture Deal

The partnership between GE and Svante will focus on further development and commercialization of one specific kind of carbon capture technology – solid sorbent. This tech can capture carbon right at the source of the emission, also known as point-source carbon capture. It is also applicable in sucking in carbon directly from the air, otherwise called the direct air capture (DAC) system.  

Scott Strazik, CEO of GE Vernova, commented on the deal saying that working with a tech innovator like Svante will advance the development of carbon capture solutions for the energy industry, and “deliver more sustainable, affordable, and reliable electricity for more people”.

Claude Letourneau, President and CEO of Svante said that their carbon capture tech will decarbonize gas-fired turbines cost-effectively. Letourneau added that they have the potential to:

“…open up an entirely new array of opportunities, aiming to provide carbon-free electricity in the future through the deployment of projects across gas-fired power generation facilities.”

GE’s expertise in energy applications is important for Svante as the company scales up to capture millions of tonnes of carbon from various industrial sites worldwide. 

Just last month, the U.S. Department of Energy rolled out $2.52 billion to fund carbon capture initiatives that seek to boost investment in technologies that capture, transport and store carbon.

Svante’s Carbon Capture Tech

Svante offers a novel approach to carbon capture. It is using unique solid sorbents to coat its CO2 capture filters. 

In particular, Svante uses metal-organic frameworks (MOFs) which capture carbon from diluted flue gas streams with high capacity and selectivity. These filters can capture 95% of the total carbon emitted from industrial sources. They adsorbed CO2 using direct low-pressure steam injection for regeneration.

Source: Svante website

The MOFs are thin sheet laminates, stacked together, and made to form Svante’s nano-engineered CO2 capture filters. They have a high porosity and resistance to degradation.

The carbon capture filters have multiple applications for capturing carbon. Heavy industries such as cement, steel, refineries, boilers, aluminum, and more will find the tech useful in abating their emissions. 

How Svante’s Point-Source Carbon Capture Works

Source: Svante

Svante’s modular carbon capture machines can be delivered to industrial sites without requiring any hazardous material or chemical plants. The machines work in three steps.

Step One:

The filters are placed inside the rotary adsorption machine or “RAM”. The RAM then captures diluted CO2 from industrial flue gas using Svante’s patented temperature swing adsorption process, VeloxoThermTM.

Step Two:

As the MOF filters rotate inside the machine, they adsorb diluted CO2 and turn it into pipeline-grade CO2.

Step Three:

The compressed CO2 product can be moved into a pipeline where it can safely be transported and injected deep underground. Or it can also be recycled and used to make new products as what other companies do. 

GE Vernova Spin Off and DAC 

Supporting Svante’s technology is one of the many efforts GE makes to scale up carbon capture and drive energy transition. 

GE believes that the climate crisis calls for investments that can bring significant emissions reductions such as CO2 capture technologies. Driven by that belief, the energy giant decided to make GE Vernova a separate business entity by 2024. 

The spin off company will focus on speeding up the transition to renewable energy sources and cutting carbon emissions. To date, GE provides about 30% of the world’s electricity.

One more unit of GE, the Climate Action@GE or CAGE Lab, also revealed that they’re currently working on another technology that can reduce emissions – direct air capture (DAC).

This DAC system uses a unique technical approach, bringing together GE’s competencies in heat exchangers, thermal management, and innovative materials. It works similar to the Defense Advanced Research Projects Agency (DARPA) in capturing clean, potable water from extremely arid, desert-like air.  

GE was able to show that its DAC system is effective in removing carbon while hoping that it has the potential for commercialization by next year. 

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Microsoft to Buy Carbon Removal Credits from CarbonCapture

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Microsoft has agreed to buy carbon removal credits from California-based startup CarbonCapture, the owner of Project Bison, a direct air capture (DAC) plant in Wyoming.

The DAC facility uses a technology that sucks in carbon from the air and stores it underground, thereby preventing the gas from contributing to global warming. It is projected to start its carbon capture activity in late 2023. 

The negotiations for the deal had begun 6 months ago when CarbonCapture announced the project to the public.

Director of Microsoft’s Carbon Removal unit, Phillip Goodman, stated that “purchasing DAC carbon removal credits is important… for Microsoft’s carbon-negative goal” and will help boost the growth of the direct air capture industry.

What does CarbonCapture do? 

CarbonCapture is a DAC startup company that makes modular DAC machines that can be connected in large arrays to remove huge amounts of CO2 directly from the atmosphere. Its first modules in Wyoming will capture and store around 10,000 metric tons (Mt) of CO2 each year. 

CarbonCapture aims to remove 5 million Mt of CO2 annually by 2030 through its phased approach to CO2 removal. It consists of four phases:

1st Phase – 10,000 tons/year in 2023-2024 with GEN-1 technology
2nd Phase – 200,000 tons/year in 2025-2026 with GEN-2 technology
3rd Phase – 1 megaton/year in 2027-2028 with GEN-3 technology
4th Phase – 5 megatons/year in 2029-2030 with GEN-4 technology

If go as planned, this carbon removal goal would be significant because the current annual global capacity for CO2 removal is still only 0.01 million Mt of CO2. 

The DAC modules appear like vented shipping containers. They are capable of filtering out 75% of carbon in the air passing through them. The captured CO2 would then be injected 12,000 feet underground into saline aquifers, storing the gas forever. 

Source: CarbonCapture website

CarbonCapture’s DAC project is called Project Bison, the first-of-its-kind for the following reasons. 

First massively scalable deployment of DAC. It has no practical limits to scaling up to megaton levels. It can develop extensive new renewable energy sources, wind and solar, in the area.
First to use Class VI wells for DAC CO2 storage. The project would be the first to use Class VI injection wells for permanent storage, once approved. Class VI wells is a regulatory designation established by the EPA and managed by the Wyoming Department of Environmental Quality.
Largest single DAC project in the world. If the goal to achieve 5 megatons of annual carbon capture and storage becomes reality by 2030.  

How Project Bison Creates Carbon Removal Credits

To date, Project Bison is the largest planned carbon removal project in the U.S. But as the technology begins to mature, more DAC companies will join the competition in the coming years.  

CarbonCapture project will generate carbon removal credits by permanently keeping the CO2 away from the atmosphere. Frontier Carbon Solutions will inject that CO2 into deep saline aquifers underground. 

Source: CarbonCapture

Once certified and verified, Project Bison generates carbon credits that are sold to organizations with net zero goals. They can use the credits to offset their own unavoidable emissions.

They can either finance carbon capture and storage projects like Project Bison or purchase the credits from the project. The market for CO2 removal credits is growing as more entities look for ways to slash their carbon emissions.  

Carbon removal technologies like DAC are still in their early stages, making the cost high. But as more and more investors are putting their trust and money in the sector, it’s poised to grow. Even governments are pouring billions of dollars into the industry to help scale it up. 

Last month, the US Department of Energy rolled out $2.52 billion to fund carbon capture initiatives while the UK government also invested £54 ($58) million into carbon removal projects.

Large companies are also showing strong support for the sector, pumping capital to startups with innovative carbon removal technologies. 

Microsoft’s Support for CO2 Removal 

One of those companies committed to advancing carbon removal is Microsoft. 

As of 2021, Microsoft’s carbon footprint was 16 million Mt of CO2 equivalent (CO2e). This includes both its operational emissions from data centers, offices, and business travel, and emissions from its supply chain, e.g. manufacturing and product transport.

The tech giant targets to be carbon negative – removing more CO2 than it emits – by 2030. It also aims to remove all its historical emissions since its founding in 1975 by 2050. To achieve that, it’s employing various measures and one of them is investing in carbon removal tech. 

Microsoft has scrutinized the CarbonCapture’ plans over the last months.

The DAC company CEO, Adrian Corless, believes that Microsoft buys in the idea that everything is present to make Project Bison a success in Wyoming. Geology, energy strategy, and openness of the public for this kind of projects are some key factors. 

The tech company has been investing in various carbon removal projects as part of its $1 billion sector pledge. Last year, Microsoft signed a 10-year carbon removal deal with Climeworks to suck in 10,000 Mt CO2 using DAC.

Bill Gates, a co-founder of Microsoft, also personally supports DAC projects as he trusts the technology and seeks to offset his own carbon footprint. Gates’ other company, TerraPower, will develop an advanced nuclear reactor which supporters consider crucial for reducing the country’s carbon emissions. 

Neither Microsoft nor CarbonCapture disclosed any details about their deal such as how much the tech giant agreed to pay for credits or how many tons it will buy.

CarbonCapture attracted other smaller carbon removal credit buyers before closing its deal with Microsoft. The CEO said they’re also talking with other large companies and so more big names will be announced soon. 

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TikTok Dances toward Net Zero Emissions by 2030

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ByteDance, the company that owns the popular app TikTok, has made an exciting announcement about their efforts to combat climate change.

The Chinese-owned company has set a goal to reach net zero in their business operations by 2030. This means they want to reduce their carbon footprint as much as possible.

To achieve this goal, ByteDance plans to reduce their operational emissions by 90% and use 100% renewable energy sources. They will also use carbon credits to offset any remaining emissions.

TikTok’s Emissions and Climate Commitments

TikTok is a social media platform released as an international version of a video sharing app Douyin.

The internet company ranked #6 among most popular social media networks globally by number of monthly active users as of January 2023. According to Statista, it has over 1 billion (1,051 million) users as of that period, with Facebook still in the lead with almost 3 billion users.  

When it comes to carbon emissions, TikTok emits more CO2e per minute of use, 2.63g CO2e, than Facebook (0.79g of CO2e). TikTok’s has an average daily use of 45.8 minutes.

If we count a third of its monthly users as daily users, then the social media app will generate over 40 thousand tonnes of CO2e each day.  

In comparison, a Facebook (FB) user spends about 30 minutes daily on the platform. Since FB has many more users, FB emits more CO2e per day. 

Source: Bankless Times

To put both the social media networks’ emissions together in context, a seat on a flight from London to New York and back needs about 1.7 tCO2e. So, their CO2e emissions per year are more than what it takes to fly the whole population of London to NY and back. 

Electricity use by data centers represents much of ByteDance’s carbon emissions. Its current decarbonization priority is to use renewable energy for those data centers.

For instance, ByteDance said last week that its new data center in Norway will run on 100% renewable energy.

Greenpeace East Asia, which ranks China’s cloud tech providers, reported last year that ByteDance was among the firms that got the lowest score for its climate commitments and use of renewable energy. 

As seen below, the social media firm lags behind other Chinese cloud providers in climate disclosures. ByteDance hasn’t yet publicly revealed data on its carbon emissions and energy usage.

The TikTok owner got 7th place among the 9 Chinese companies ranked in terms of climate commitments. The ranking criteria include data transparency, carbon reduction efforts, renewable energy procurement, and government and industry influence. 

For many years now, Greenpeace has called for the TikTok owner to commit to 100% renewable energy by 2030. With the company’s recent net zero announcement, Greenpeace East Asia Climate and Energy Project Manager, Ruiqi Ye commented: 

“Finally, ByteDance is catching up with peers like Meta and Tencent, and we are thrilled to see a major internet company taking the reins in becoming sustainable. But to come through on this commitment, ByteDance needs to quickly scale up its renewable energy procurement. How ByteDance scales up renewable energy procurement around Asia will be key to its success.” 

The previous commitments of ByteDance from last year as seen in the picture above only cover its own operations. It didn’t include its value chain emissions which most likely account for most of its total carbon footprint. It also didn’t fully disclose its emissions data.  

So, its recent announcement is a welcome to Greenpeace and other climate campaign organizations. 

TikTok Aims Net Zero by 2030

ByteDance will also work on cutting emissions within its value chain. The social networking app owner aims to reveal more on its net zero approach by the end of this year. 

It is the latest Chinese tech giant to reveal a net zero pledge in support of China’s national goals of peaking GHG emissions by 2030 and hitting net zero by 2060.

Alibaba, Tencent and Baidu have all pledged to be carbon neutral by 2030.

Apart from TikTok and its Chinese version Douyin, ByteDance also owns various online platforms such as Toutiao and Lark. It also provides cloud services and operates data centers worldwide. The company stated:

“We are mindful of our impact both on and offline. A meaningful sustainability approach is good for business, our communities and the world around us.”

The company is also considering carbon offset credits, not as replacement for direct emissions cuts but for offsetting unavoidable footprint. It’s part of TikTok’s strategy to reach its net zero goals by 2030.

The post TikTok Dances toward Net Zero Emissions by 2030 appeared first on Carbon Credits.

Big Tobacco is Poisoning the Planet and the People Says WHO

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Apart from killing millions of people each year, Big Tobacco’s carbon footprint is destroying the earth in a way not many people know about.

A report released by the World Health Organization (WHO) detailed the damaging impact of the tobacco industry on the planet and people’s health in its report “Tobacco: Poisoning our planet”.  

The industry’s actions have a domino effect. Growing, manufacturing, shipping, selling, using, and disposing of tobacco products all degrade the environment and harm health.

Big Tobacco Carbon Footprint

Big Tobacco refers to the four largest companies in the tobacco industry. They include Philip Morris International, British American Tobacco, Imperial Brands, and Japan Tobacco International.

The industry’s main product, tobacco, causes far-reaching damage to the environment.

Each year, the tobacco industry takes more than 8 million human lives, cuts 600 million trees, 200,000 hectares of land, 22 billion tonnes of water, and emits 84 million tonnes of CO2.  

It also creates the world’s most littered item – cigarette butts.

Big tobacco’s carbon emissions alone are equal to ⅕ of what is released by the aviation industry. CO2 comes from producing, processing and shipping tobacco products.

Estimates further say that every cigarette emits about 14 grams of CO2 while tobacco production releases 84 million tonnes of CO2e according to a study by Zafeiridou et al.:

Despite these facts, tobacco companies are still claiming that they’re becoming sustainable.

A lead author in WHO’s report, Andrew Rowell, said that the industry is never held accountable for the environmental effects of its products and their global supply chain.

“In fact, the industry’s ecological impact is roughly equivalent to one of the large oil companies. We need to talk about big tobacco the same way we talk about big oil as a cause of climate change.”

The process of curing tobacco leaves to produce dry tobacco is very energy intensive. The procedure burns wood or uses coal, contributing to GHG emissions as well as deforestation. 

Deforestation is another major driver of global warming by being a significant source of carbon emissions. Cutting down trees releases the CO2 they store into the atmosphere. 

Studies also show that big tobacco companies together are cutting down 600 million trees each year to make cigarettes. Estimates say that it takes about 1 tree to produce around 15 packets of cigarettes.

Most tobacco crops are cultivated in low or middle-income regions where water and farm are critical to produce food. Yet, they are used to grow the damaging tobacco plants, WHO said. This leads to clearing more and more forests.

Plastic and Chemical Wastes of Cigarettes

Growing tobacco crops to produce cigarettes is not the only concern. Tobacco products are also creating mountains of waste that damage the environment and human health. 

A director from WHO noted that:

“Tobacco products are the most littered item on the planet, containing over 7000 toxic chemicals, which leech into our environment when discarded…”

He added that about 4.5 trillion cigarette filters pollute the oceans, rivers, city sidewalks, parks, soil and beaches each year.

Cigarettes contain filters which are made of plastic. Filtered cigarette butts are a part of the plastic pollution problem. And these filters are among the top 10 most common plastics in the world’s oceans.

Worldwide, they are the 2nd largest source of plastic pollution.

Each filter that is littered can pollute up to 100 liters of water.

Adding to this plastic littering issue are other products like e-cigarettes and smokeless tobacco.

The worst case – who pays for the cleanup of tobacco litters?

It’s not the big tobacco companies themselves but the taxpayers.

Every year, cleaning up the litter costs Germany and Brazil over US$ 200 million each; while China spends about US$ 2.6 billion and India US$ 766 million to do the same. 

Who Must Pay? 

Though it wasn’t in the case of cleaning up the litter, the US Justice Department sought to recover billions of dollars paid for by the government health programs to treat smokers in 1999. 

This civil lawsuit was the largest ever brought by the DoJ. It claims that smoking cigarettes causes lung cancer and other diseases, resulting in $25 billion annual health claims. 

The case also alleged that the big tobacco companies conspired to hide their products’ health risks and deceive the public. 

The lawsuits ended up in the largest settlement in US history at US$ 206 billion. But this amount only ended up being paid for by smokers through higher tobacco prices. 

An industry watchdog claimed that alternative cigar products were nothing more than greenwashing. They said that the industry’s public relations messages mislead consumers. 

When it comes to reducing tobacco’s carbon footprint, some countries have made a decision. 

For instance, the Polluter Pays Principle that some European countries follow seek to make the tobacco industry responsible for paying the cost of their pollution. 

Britain also warned big tobacco companies to pay the $55 million annual cost of cleaning up discarded cigarette butts. 

The WHO calls for strong tobacco taxes, which may include carbon tax, and more support services to help smokers quit. The health organization even called out to farmers to grow other sustainable crops than tobacco. 

Imposing carbon tax on cigarettes will further increase the price while cutting the industry emissions. But it seems that there’s no estimations yet as to how much it can be exactly. 

Today, the big oil companies are also in the same position as the big tobacco companies in 1999. Both industries lied about the dangers of their products to the people and the planet.

And like the tobacco industry and its huge carbon emissions, the fossil fuel industry, which is the biggest polluter, is now facing multiple climate lawsuits. 

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