Tesla’s $739 Million Carbon Credit Revenue Fuels Q3 Earnings Surge

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Tesla delivered better-than-expected 3rd-quarter earnings and profits, bringing relief to investors while reversing a trend of declining earnings. The electric vehicle (EV) maker saw its first year-over-year profit growth in 2024, beating expectations in its 2024 Q3 report.

More remarkably, Tesla shows an impressive $739 million carbon credit, also called regulatory credits, revenue for the said quarter. The company reaffirmed its plans to make its EVs more affordable, which added to investor enthusiasm.

Tesla Recharges Earnings with Cash Flow from Carbon

The EV giant’s revenue rose 7.8% year-over-year to $25.18 billion, although this fell short of analyst forecasts. However, the company outperformed on its bottom line. 

It reported adjusted earnings of $0.72 per share versus the $0.60 expected, up from $0.66 a year ago, with a net income of $2.5 billion. This beat analyst expectations, which had an estimated $0.59 per share and $2.01 billion in net income. 

Tesla’s operating margin climbed to 10.8% of sales, up from 6.3% in the previous quarter and 7.6% in Q3 of last year. The company’s net income grew by 8% compared to last year, breaking a streak of four consecutive quarters of declining profits. 

Tesla noted that it is currently between “two major growth waves,” suggesting optimism for the future. It also shared an upbeat outlook on vehicle deliveries, predicting “slight growth” this year. This came as a surprise since market forecasts had expected deliveries to dip from 1.81 million in 2023 to 1.78 million. 

Following this announcement, Tesla’s stock jumped about 12% in after-hours trading, adding about $81 billion to the company’s market value.

Another big standout from the earnings report is Tesla’s carbon credit revenue totaling $739 million. The figure is well above the $539 million analysts had predicted and an increase of 33% year-over-year. 

How Carbon Credit Sales Boosted Tesla’s Profits

More notably, these credits bring full profits to the company and account for almost 34% of its net income ($2,183 million). This Q3 carbon credit sale is the second-highest since Tesla started selling them in 2009. The highest was during the previous quarter. 

READ MORE: Tesla’s Profit Sees a 5-Year Low But Carbon Credit Sales Hit Record High

These credits, which Tesla sells to traditional carmakers to help them meet emissions obligations, provide significant profits as they can be sold at 100% full margins. Thus, carbon credits have played a pivotal role in Tesla’s overall financial performance. 

Since the EV maker began selling carbon credits to other companies, this revenue stream has turned into a billion-dollar opportunity. In the past year, Tesla earned $1.79 billion from carbon credits, marking its highest-ever annual income from automotive regulatory credit sales.

While details about Tesla’s carbon credit buyers are often undisclosed, Chrysler is known to have purchased $2.4 billion worth of credits by 2022. Stellantis, a major auto group, has also been involved, buying significant credits to offset emissions as it targets zero emissions by 2038. This highlights the challenges automakers face in reducing carbon footprints, given the high emissions associated with key EV components like batteries, steel, and aluminum.

China remains another vital market for Tesla’s carbon credit sales. Reports indicate that a joint venture between Volkswagen and FAW Group in China might have purchased credits from Tesla, potentially earning Tesla around $390 million in 2021. However, details about specific buyers in China remain unclear.

Driving Forward: Tesla Eyes 25-30% Delivery Growth 

The positive momentum continued as CEO Elon Musk addressed investors during the earnings call. Musk forecasted a 25% to 30% increase in Tesla deliveries for next year and announced plans to roll out a self-driving taxi, Robotaxi, service in California and Texas by 2025.

Tesla had previously announced that it delivered 462,890 vehicles in Q3, with production totaling 469,796 units. About 3% of these deliveries were under operating lease accounting. 

This figure compares to 443,956 vehicles delivered in Q2 of this year and 435,059 in Q3 of last year. Tesla’s all-time delivery record remains at 484,507 units, achieved in Q4 2023. 

Looking forward, Tesla emphasized that its plans to produce new, more affordable vehicle models remain on track, with production expected to begin in the first half of 2025.

Beyond EVs: Energy Storage Sets New Records

Tesla’s energy storage business also showed strong performance. Although energy storage deployments decreased sequentially in Q3, they hit a record 6.9 GWh, up 75% year-over-year. 

Tesla highlighted that energy services and other segments are increasingly contributing to the company’s profitability. It anticipates continued profit growth from these segments as energy storage products scale up and its vehicle fleet expands. 

Additionally, Tesla advanced its efforts at Gigafactory Texas, where it is building a high-performance 29,000 H100 cluster, aiming for 50,000 H100 capacity by the end of October.

The energy storage market significantly influences Tesla’s strategy, especially as it diversifies into energy solutions beyond EV manufacturing. This shift is evident in Tesla’s growth in energy storage deployments, with key products like the Powerwall and Megapack battery systems. 

In 2023 alone, Tesla deployed 14.7 GWh of energy storage, generating $6.035 billion in revenue—a 3x increase since 2020.

Tesla’s energy storage segment’s growth aligns with the broader clean energy transition, especially as demand for storage solutions rises to balance renewable energy production. 

SEE MORE: Tesla Signs A Landmark Multi-Billion Dollar 15 GWh Megapack Deal

Tesla’s Q3 2024 earnings report reaffirms that carbon credit revenue remains a crucial part of its financial performance. It allows the carmaker to boost earnings while continuing its push toward more affordable EVs and expanded energy solutions. 

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Coal to Stay in India’s Energy Mix: Can Sustainable Mining Control Emissions?

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India’s energy demand is growing in leaps and bounds. The country is progressing ahead and investing heavily in renewables. However, with this rising energy demand, coal is once again holding its ground stronger in the nation. The recent World Energy Outlook report revealed that,

“Coal is set to retain a strong position in the energy mix in India over the next decades.”

The Stated Policies Scenario (STEPS) assessed that approximately 60 GW of coal-fired capacity will be added to the net of retirements by 2030. This will surge electricity generation from coal by more than 15%.

The Coal Scenario of India

India is the world’s second-largest producer of coal, so coal is abundantly available in India. It holds a major 55% share of the country’s energy demand. The reality is, that replacing coal with 100% renewables is not happening anytime soon. The most significant factor that’s fueling coal demand is the rising population.

This manifests energy usage at homes, buildings, factories, and offices directly. Only Renewables like solar, wind, and hydro might not fulfill such a massive energy demand in a heavily populated country. This is why India’s indigenous sector – coal is so important.

World Energy Outlook has figured out:

“Generation from coal remains over 30% higher than that from solar PV even in a decade in which solar PV accounts for twice as much capacity, owing to the lower capacity factor of solar installations.”

READ MORE: Coal Power is Accelerating Despite the Energy Transition

2035 Coal Consumption Forecast

Some of the most energy-consuming sectors are going to experience a massive demand uptick. They are:

The iron and steel sector can grow by 70%
Cement output is expected to surge by 55%
The stock of air conditioners can become 4-5X

Thus, the consumption of coal in industry can grow by 50% by 2035.

Source: World Energy Outlook

Will Rising Demand Ignite a Carbon Emission Surge?

This is the most inevitable question, and IEA has come up with an interesting analysis:

India’s GDP growth rate is currently 7.8%. Subsequently, the government has ambitiously set a target to have the third largest economy in the world by 2030, after the U.S. and China.

Any form of economic growth involves expanding infrastructure. Development in spaces and structures, new constructions, and increased transportation will require cement, steel, concrete, iron, fuel, power, etc. This can cause a sharp rise in energy demand and use of fossil fuels.

So, the answer is eventually becoming clear- and carbon emissions can substantially rise in the future as India strives to have a more powerful economy.

The US EPA quoted,

“India’s coal emissions are estimated to be 22 MtCO2e in 2020 and are expected to reach 45 MtCO2e in 2050.”

If Coal has a Future; India is Sustainably Mining It

However, the coal and lignite undertakings are responsibly handling the environmental impact of the coal mining process. The most widely used mitigation measures include recycling mined-out areas and carrying out extensive plantations in coal-rich regions.

The Ministry of Coal has been seriously taking steps to restore the land disrupted by mining. They have stabilized such lands and put them into useful purposes. The process is precisely known as, “ecological reclamation of mined land”. Some such measures are:

reforestation of overburden dumps
afforestation around mines
restoring local flora and fauna

Notably these activities are planned in advance and the closure plans are approved by the ministry. They conduct them sidewise to minimize the carbon footprint post-closure of coal mines.

Improving the Air Quality

The Ministry highlighted innovative techniques like seed ball plantation, drone-based seed casting, and Miyawaki plantation that have been introduced in several mines. These techniques combat air pollution by “trapping” the enormous volume of dust particles blown off during mining. The entire process is monitored through remote sensing technology to ensure maximum efficiency.

Additionally, the latest technologies like surface miners, wheel washing, fog cannons, mist sprayers, mechanized road sweepers, CAAQMS, wet drilling, and dust suppression systems are also deployed to minimize dust generation. This improves the air quality of the surrounding areas of a coal mine.

Image: Surface Miner with water jets, Gevra OCP, SECL

Source: Ministry of Coal

India’s coal companies are also implementing several energy-efficient measures to reduce their carbon footprint. The Ministry of Coal said,

“By implementing various energy efficiency measures, Coal/lignite PSUs have envisaged to create additional carbon offset potential of 1 Lakh Ton/annum.”

Source: World Energy Outlook

The Bureau of Energy Efficiency (BEE) Announces Offset Mechanism to Combat Emissions

As we discuss sustainability in the Indian coal mining sector, another important piece of news that made headlines is India’s national carbon market and trading carbon credits. We discovered from S&P Global what the Bureau of Energy Efficiency (BEE) said recently.

BEE’s Director, Saurabh Diddi, stated that by March 2025, they will unveil the methodologies for sectors included in phase 1 of the domestic voluntary market under India’s Carbon Credit Trading Scheme.

S&P Global noted that India has immense opportunities in the domestic voluntary market and is the largest supplier of carbon credits in the existing international voluntary carbon markets.

The methodologies can encourage industries and corporations to commit to “voluntary” emission reduction targets. Diddi added that such pledges would help boost demand for carbon credits. Simply put, the whole purpose is to generate demand in the domestic offset market.

This diverse range of decarbonization strategies including sustainability in Indian coal mining are meant to achieve net zero emissions by 2070. Additionally, these offset mechanisms can reduce 45% of its GHG emissions by 2030.

LATEST: India’s Cleantech Boom: Can It Challenge China’s Reign? 

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$7.1 Billion Investment Fuels Fusion Commercialization. Is Fusion the Future Energy?

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Fusion is the future of energy, and that’s becoming increasingly evident. How? Well, recently tech giant Microsoft invested generously in Helion Energy as it recognized fusion’s potential to revolutionize the energy transition.

Andrew Holland, CEO of the Fusion Industry Association explained this very nicely by stating,

“The fusion industry is poised to help the world achieve the energy transition to net zero carbon emissions. Commercialization of fusion energy will create new jobs and a new industry addressing a trillion-dollar market.”

Recently they published the Global Fusion Industry Report that highlights how the race to commercialize fusion energy is speeding up. We discovered that forty-five companies are putting in various technological efforts and have raised over $7 billion in investments till now. Notably, with public-private partnerships the funding has seen a 50% jump.

President Biden and his climate agenda are one of the propellers for addressing the climate crisis. The US DOE says fusion energy has immense potential to meet carbon reduction targets, ensure energy security, and promote economic growth.

Moving on, let’s understand what is fusion.

Fusion and Its Fuel

In Chemistry,

“Nuclear fusion is the process by which two light atomic nuclei combine to form a single heavier one while releasing massive amounts of energy. The sun, along with all other stars, is powered by this reaction.”

IAEA says, Fusion could generate 4X more energy per kilogram of fuel than fission (used in nuclear power plants) and nearly four million times more energy than burning oil or coal.

From this estimate, we can fathom the impact of fusion in the future once it’s fully deployed. Secondly, there are particular fuels that trigger fusion. The deuterium-tritium (D-T) fuel is the most efficient for fusion devices.

As fusion produces safe, clean, and infinite energy, it’s crucial to find a viable fuel source to power the process. Top fusion companies are working on several other alternatives along with D-T. A few examples are proton–boron (pB11), deuterium–helium3 (DHe3), and lithium.

However, turning this into reality involves rigorous R&D and investments. And this is why public-private partnerships have become inevitably important for the fusion industry.

Public-Private Partnerships Drive Fusion Commercialization

One cannot overlook the role of public-private partnerships as they are the driving factor behind the commercialization of fusion energy. Government funding to support private companies has jumped by over 50%. This indicates a keen interest from national governments. The investment figures are shown below: 

While private companies will take charge of the commercialization, public partnerships will drive scientific research and emerging technologies. The Fusion Industry Association has consistently pushed for such collaborations to ensure that private companies can leverage maximum knowledge from public research programs.

Several notable public-private partnerships have gained momentum in the past year. In June 2024, the U.S. DOE signed contracts with eight companies under the Milestone-Based Fusion Development Program to deliver pilot plant designs. Even ITER, the global leader in fusion research, is embracing public-private partnerships by offering its expertise to private companies.

Germany launched its “Fusion 2040” initiative, directly investing in private companies, while Japan’s “Moonshot” program and the UK’s “Fusion Futures” are backing key technology providers. Meanwhile, the EU plans to establish a fusion investment consortium by 2026.

READ MORE: Why the Nuclear Energy Market Is Poised for a Major Comeback

Potential Markets for Fusion Energy

The demand for fusion commercialization can be met only with international cooperation. This is because such partnerships can overcome research challenges, boost supply chains, and train workforces.

Thus, building a global fusion energy market requires turning rigorous R&D efforts into commercial technologies. Fusion developers aim to export facilities worldwide. This can help us understand the diverse commercial landscapes essential for global collaboration.

The DOE has outlined a pathway of how international partners can support fusion’s entry into these markets. The steps are:

Identifying necessary technologies, manufacturing, and infrastructure for fusion development, while mapping global supply chains to target high-value markets.
Exploring common benchmarks and standards.
Engaging with industry groups, consortia, and NGOs to address commercial and community needs.
Helping multinational companies benefit from technologies developed outside their home countries.

Additionally, coordinating early on regulatory frameworks and policies will also ensure a smooth market entry for fusion energy. This will also involve scaling from prototypes to real-world solutions. However, with major advancements, protecting intellectual property will also become crucial for R&D, commercialization, and global partnerships.

Take a peek at the following chart to discover the industries where fusion energy will be useful.

Commonwealth Fusion Systems: Leading the Pack

Located in Devens, Massachusetts, Commonwealth Fusion Systems is the world’s largest commercial fusion energy company. To date, it has secured around $2 billion in funding having a primary market for electricity generation.

The company aims to deploy fusion power plants quickly to meet rising global energy demands and achieve decarbonization goals. It specializes in making tokamaks (a magnetic confinement device to generate thermonuclear fusion) with innovative high-temperature superconducting (HTS) magnet technology. The company is currently building SPARC, a Q~10 demonstration plant that uses actual fusion fuels based on peer-reviewed science. Catch a glimpse of the reactor here.

Source: CFS

Recently the power giant produced two advanced superconducting magnets for the University of Wisconsin’s WHAM experiment, which is exploring magnetic mirror fusion. These are the first products shipped under CFS’s plan to supply magnets for both its power plants and other innovative uses.

While CFS’s main focus is building its own fusion devices, including the SPARC tokamak, its cutting-edge magnet technology has broader potential. Several companies have already approached CFS for its expertise in developing high-temperature superconducting magnets for various markets.

The top fusion companies are charted in the image below:

“Recreating the conditions in the center of the Sun on Earth is a huge challenge”

The above statement was said by Dr. Aneeqa Khan, lecturer in nuclear materials at the University of Manchester to BBC. Building a fusion power plant involves complex engineering and material challenges. It also requires trained and a large workforce with precision and skills to work in this field.

Understand the diverse challenges of the fusion sector from this figure:

Commercial fusion power will still take time to develop. However, investment in fusion is surging and the companies are making steady progress to bring this technology to the world sooner in the future.

Disclaimer: Data and Visuals Collected from 2024 Global Fusion Industry Report

FURTHER READING: Google and Kairos Power Unveil Groundbreaking 550 MW Nuclear Energy Initiative 

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How Toyota’s Hydrogen Cartridges Will Change EVs Forever

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Toyota is redefining the future of clean energy with its portable hydrogen cartridges showcased recently at the Japan Mobility Bizweek 2024. This cutting-edge technology could change how we power vehicles and appliances simultaneously offering a quick and sustainable alternative to time-consuming electric vehicle (EV) charging. Let’s explore it.

In March, Primearth EV Energy (PEVE) became fully owned by Toyota. On October 1, the company celebrated its new name, Toyota Battery, with a ceremony. President Masamichi Okada expressed his gratitude and promised to lead Toyota Group’s push toward electrification. He said,

“It goes without saying that we will contribute to the multi-pathway strategy with batteries for HEVs (hybrid electric vehicles), PHEVs (plug-in hybrid electric vehicles), and BEVs (battery electric vehicles), as well as secondary batteries for fuel cell vehicles. In addition, we want to explore all possible ways of supporting Toyota’s commitment to developing hydrogen-engine vehicles, including the potential for batteries to extend the cruising range or reduce fuel tank size.”

Portable Hydrogen Cartridges: A Game-Changing Innovation

Originally developed by Toyota’s mobility subsidiary, Woven, the hydrogen cartridge concept has come a long way since its initial prototype in 2022. Today, the cartridges are lighter, more compact, and easier to transport. In a way, they resemble giant AA batteries.

The press release says, that with these portable fuel sources, Toyota aims to solve one of the biggest challenges for hydrogen fuel cell electric vehicles (FCEVs): the need for refueling infrastructure with costly hydrogen pipelines.

Unlike conventional EVs that rely on electricity and can take hours to charge, Toyota’s hydrogen cartridges offer a swappable, portable power source.

Drivers can easily and quickly replace a depleted cartridge with a full one.
Enhances the driving experience and drivers can get back on the road faster.
Gives a major boost to hydrogen-powered mobility and is a potential game-changer for reducing EV downtime.

Source: Toyota

Multiple Uses Beyond Vehicles

But Toyota’s vision for these hydrogen cartridges goes beyond just fueling cars. The company imagines them powering everything from motorcycles to home appliances. They could even be used for cooking, as Toyota and Rinnai Corporation demonstrated at the event with a hydrogen-powered stove. We can say, that this technology brings renewable energy directly to consumers without disrupting existing systems.

In emergencies, these cartridges could be removed from vehicles and used to power devices during blackouts. Toyota envisions a world where hydrogen cartridges can be delivered to homes alongside groceries and other essentials. Spent cartridges would be collected, refilled, and redistributed—creating a seamless system for hydrogen distribution.

Moreover, hydrogen is produced using renewable energy sources which is a great way to meet net-zero goals without relying on fossil fuels. Hydrogen can generate electricity, store energy, and burn for heat. But it emits only water and not carbon dioxide.

The new-age fuel has gained good momentum as BMW, Hyundai, and Honda are also exploring hydrogen potential. Worth mentioning, that it goes beyond the automotive sector. It could be used to power airplanes, heavy machinery, and industrial processes.

READ MORE: Hydrogen Fuel Cell Is Revving Up: BMW and Toyota Lead The Way to Zero-Emission Vehicles

Toyota Envisions a Hydrogen-Powered Future

Toyota’s hydrogen cartridges could certainly build a more sustainable, efficient energy network. They are just bringing its vision of a hydrogen-powered future closer to reality.

The company has already well established itself in the hydrogen space. Its hydrogen-powered Corolla has been on the road since 2021. However, Toyota’s sustainability vision isn’t limited to hydrogen. The company is also investing heavily in battery technology, as we read before.

The Sweep Energy Storage System

One of the key exhibits at Japan Mobility Bizweek is Toyota’s Sweep Energy Storage System, which recycles used batteries from hybrid and electric vehicles. This system maximizes the remaining energy capacity of used batteries, supporting the wider adoption of renewable energy sources like solar and wind.

Toyota is building a circular economy with the Sweep System. The company’s focus on reducing waste and reusing materials is central to its sustainability strategy. Toyota’s innovations in both hydrogen and battery technology demonstrate its commitment to a greener future

The Road to Carbon Neutrality

Toyota aims to reach carbon neutrality across its entire vehicle life cycle by 2050. This goal involves reducing and offsetting greenhouse gas (GHG) emissions to achieve net zero across operations, manufacturing, logistics, and the full product cycle, from use to recycling. Furthermore, their science-based targets streamline their efforts to reduce emissions from every stage of the vehicle lifecycle.

Source: Toyota

The Japanese automaker firmly believes battery electric vehicles (BEVs) and hydrogen fuel cell electric vehicles (FCEVs) will rule the future. As these sustainability technologies develop, hybrids (HEVs), plug-in hybrids (PHEVs), and vehicles running on lower-carbon fuels will play a crucial role in their transition strategy.

Additionally, Toyota is collaborating with startups and other businesses to push hydrogen and renewable energy technologies further. These partnerships will advance its hydrogen cartridge concept and make the fuel cells commercially viable.

FURTHER READING: Toyota to Sell 200,000 Hydrogen-Powered Vehicles, Targets China & Europe Market

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CDR and Carbon Credits: NASDAQ Surveys the Key Trends Shaping Corporate Sustainability

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Corporate buyers continue to rely on traditional carbon credit purchasing methods. Meanwhile, potential buyers of carbon removal credits need more education before committing to these newer options. This year’s NASDAQ survey revealed that even though companies are interested in CDR credits, a major proportion is unaware of the latest technologies like enhanced rock and coastal weathering, enhanced coastal weathering, ocean alkalinity enhancement, etc.

The survey revealed:

Support for maximizing the impact of carbon credit purchases increased from 25% in 2023 to 27% in 2024.
Support for offsetting emissions with carbon removal credits decreased from 24% in 2023 to 22% in 2024.

CDR: A Vital Tool for Achieving Net Zero

Carbon dioxide removal (CDR) is crucial for companies striving for net zero. Since Nasdaq’s first Global Net Zero Pulse survey, the voluntary carbon market (VCM) has evolved with new corporate feedback, updated SBTi guidelines, and U.S. government advice. The VCM allows companies to voluntarily buy credits that fund projects reducing emissions.

It is a well-known fact that limiting global warming to 1.5°C still requires removing massive amounts of CO2. Another proof is the palpable rising heat that emphasizes the urgency.

However, with growing concerns about greenwashing, companies are being more careful. This creates an opportunity to explore new CDR credit options with better risk protection. Companies must also closely examine their buying preferences for both traditional and new carbon removal efforts.

Companies need to evaluate the importance of the following criteria before buying carbon removal credits.

From June to July 2024, Nasdaq ESG Advisory conducted a survey focused on corporate buyers to explore market demand. The survey covered three key themes to help scale the VCM and drive CDR adoption.

1. Corporate Net Zero Alignment

Companies are increasingly adopting alternative strategies to reduce their emissions, but some emissions remain beyond their control. This is where they need carbon dioxide removal (CDR).

Currently, 40% of corporate buyers understand their company’s path to reducing emissions between 2024 and 2030. They also give importance to CDR.
About 30% expect to cut emissions by up to 40% without using CDR credits, while 31% plan to reduce emissions by up to 60% by 2030 before turning to CDR.

By 2050, the number of companies aiming for 80% or greater will become 3X. This indicates that CDR credits play a vital role in these efforts, with 87% of corporate buyers recognizing their importance in their net-zero strategies.

Moreover, B2C companies are more involved and use CDR as a key part of their strategy. This also shows the growing consumer demand for sustainable tools.

2. Carbon Credits Purchase Strategies

More companies, including those that haven’t been active in carbon markets before, are now planning to buy carbon credits. In the past, some companies have purchased carbon credits to offset emissions, but now even more are showing interest. This highlights rise in corporate demand for carbon credits.

Survey findings reveal a growing trend toward purchasing carbon reduction, avoidance, and removal credits. The energy and materials sectors, especially industries like cement, steel, and chemicals, are leading this shift. These sectors are hard-to-able and face considerable challenges to reducing their emissions. Thus, making carbon removal credits a key part of their mitigation strategy.

Additionally, corporate sectors are now aligning their carbon credit buying plans with their overall sustainability goals with a robust strategy in place. Another interesting factor is- corporate buyers tend to prefer locally sourced carbon credits. The report showed that this trend is especially strong in Canada and Asia-Pacific, where about two-thirds of respondents prefer to purchase local credits.

NASDAQ revealed,

While in 2024, less than 10% of respondents expect to abate 80% or more of their emissions with CDR, this increases by 1.5x in 2030 and 2x in 2050.

This upward trend is particularly noticeable among sectors like information technology, financial services, consumer staples, and utilities.

RELATED: Study: Fortune 500 Companies Using Carbon Credits Are Reducing Their Emissions Faster

Understanding the Scope of Emissions

Many companies are uncertain about how carbon dioxide removal will fit into their plans for reducing current emissions and in the future. A significant number of respondents in recent surveys expressed doubts about their understanding of how much of their Scope 1 and 2 emissions can be reduced through CDR.

This is the reason why they hesitate to use carbon dioxide removal (CDR) until they have significantly cut their emissions. Companies not including CDR in their strategy often focus on cutting emissions first.

Another complex scenario is reducing Scope 3 emissions, which encompass the largest portion of a company’s total emissions but are often the hardest to tackle. Consequently, companies having solid knowledge of this platform are using CDR to address these challenging Scope 3 emissions.

However, even though companies are facing uncertainties in their emissions profiles, CDR will be crucial to meet their sustainability goals.

The following figure indicates the expected percentage of a company’s emissions to be abated using high-quality carbon removal credits.

3. Carbon Market Dynamics

The report has thrown light on how companies’ decarbonization and carbon credit strategies are influenced by changing policies and regulations. While carbon removals were mostly unregulated, rising concerns from stakeholders have caught the attention of regulators. As a result, the voluntary carbon markets are now under more scrutiny.

Since last year’s survey, several major policies were introduced by the SEC, California Air Resources Board (CARB), Federal Trade Commission (FTC), and European Commission (EC). These climate-related policies are putting pressure on both public and private companies.

In fact, 72% of respondents reported feeling the impact, especially from the SEC’s Climate Disclosure Rules and California’s AB-1305.

Interestingly, a deeper look reveals regional differences. Canadian respondents said these policies directly affect their carbon credit strategies. On the contrary, fewer U.S. (72%) and European (60%) respondents felt the same impact. U.S. and Canadian companies are primarily focused on the SEC’s Climate Disclosure Rules and California’s AB-1305.

In Europe, 33% of companies are more focused on EU regulations, which ban greenwashing and require companies to verify environmental claims before promoting them.

Clearer regulatory standards will increase transparency for U.S. and EU companies regarding their decarbonization and carbon credit plans. Without these guidelines, companies may hesitate to use carbon removals to offset residual emissions due to concerns over potential anti-greenwashing lawsuits.

Growing Interest in Carbon Credits Education

Corporate buyers are showing increased interest in learning more about carbon removals. The recent survey of NASDAQ revealed that 80% of respondents want more education on the topic. Many companies are turning to external experts to help them make informed decisions about carbon credit purchases.

Carbon credit registries like Puro.earth set standardized protocols and track credits to ensure market credibility. For 62% of corporate buyers, these registries and standards play a key role in their purchasing decisions.

Subsequently, this is becoming important as they navigate the complexities of different carbon removal methods, such as terrestrial, technological, and ocean-based options. Additionally, corporate buyers are increasingly expecting carbon credits to offer long-term CO2 storage. This shows a clear shift towards prioritizing permanent solutions for carbon removal.

From CDR to carbon credits to carbon offsets, understanding all these factors is critical for building effective decarbonization strategies for the corporate sector. And NASDAQ’s report is a perfect guide to that.

Source: Data and Visuals collected from 2024 NASDAQ Global Net Zero Pulse.

FURTHER READING: Xpansiv and Puro.earth Partner to Scale Carbon Removal Credits Market

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Fashion Meets Climate Action: Levi’s Net Zero in First Climate Transition Plan

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Levi Strauss & Co. (Levi’s), a global leader in denim and lifestyle apparel, has released its first climate transition plan, aiming to achieve net zero emissions by 2050. It lays a roadmap to reach near-term greenhouse gas (GHG) reduction targets by 2030 and achieve longer-term climate goals. 

Levi’s plan follows similar commitments made by brands like the H&M Group and Reformation, reflecting a growing trend in the fashion industry towards sustainable practices.

How Levi’s Plans to Achieve Net Zero

Levi’s 2050 net zero emissions goal involves both direct and indirect emissions throughout its entire value chain. This includes emissions from manufacturing processes, transportation, product usage, and end-of-life disposal. 

In 2023, the fashion firm’s total GHG emissions were over 3.7 million tons of CO2e. Of this, only 12 thousand tons of CO2e were Scope 1 and 2 emissions. 

Source: Levi’s Climate Transition Plan report

The company’s strategy is guided by the Science-Based Targets initiative (SBTi), ensuring that its climate action aligns with the Paris Agreement’s objective of limiting global warming to 1.5°C. It focuses on three areas to guide its climate actions.

Internal Operations and Scope 1 & 2 Emissions: 

To reach its long-term goal, Levi Strauss has set specific interim targets for 2025. 

The apparel giant is prioritizing a reduction in direct (scope 1) and energy-related (scope 2) emissions. This involves investing in energy-efficient technologies, and renewable energy, and implementing a global energy management system to guide strategic decisions. 

By 2025, the company aims for a 90% reduction in these emissions, compared to its 2016 baseline as shown below. For Scope 3 emissions, which include the supply chain’s carbon footprint and product life cycle, the company targets a 40% reduction per product by 2025.

Source: Levi’s Climate Transition Plan report

Engaging the Supply Chain to Tackle Scope 3 Emissions: 

The second part of the strategy focuses on the broader value chain, tackling the significant impact of scope 3 emissions from global suppliers. Levi Strauss is working towards Science-Based Targets (SBT) by promoting sustainable materials, offering supplier financing for energy reduction efforts, and supporting circularity initiatives. 

A key goal is to reduce scope 3 emissions related to apparel production by 42% by 2030, using a 2022 baseline. This target addresses 72% of the company’s total Scope 3 emissions, emphasizing a substantial focus on reducing indirect emissions across the value chain. These efforts include encouraging sustainable farming practices and enhancing transparency in supply chains.

Source: Levi’s Climate Transition Plan report

Focusing on Scope 3 or value chain emissions is critical as they account for over 99% of the company’s total carbon footprint. The company’s goal is for 100% of its key suppliers to adopt renewable electricity by 2025.

Governance and Advocacy: 

Levi’s aims to embed climate risks and opportunities into its overall business strategy to ensure strong governance throughout the transition. This includes regular updates on their progress through sustainability reports, ensuring accountability and alignment with international frameworks like the TCFD (Task Force on Climate-Related Financial Disclosures) and CDP (Carbon Disclosure Project).

According to Jeffrey Hogue, Chief Sustainability Officer at Levi’s, the climate transition plan is part of the company’s longstanding commitment to addressing climate change. He also noted that:

“These steps will not only move us toward our Net Zero climate ambition by 2050 but also strengthen our own business’s resilience to the effects of climate change.”

Renewables at the Core: Levi’s Push for 100% Green Energy by 2025

To reduce its Scope 1 and 2 emissions, Levi Strauss has committed to using renewable energy in its own operations. The company has already transitioned many of its facilities to renewable electricity and is actively investing in solar and wind power for its global offices and retail outlets. 

Notably, it seeks to achieve 100% renewable electricity in all company-operated facilities by 2025. It also aims to reduce freshwater usage in water-stressed areas by 50% from a 2018 baseline by 2025. These targets align with global climate science and further the company’s broader sustainability goals.

Levi Strauss also recognizes the role of sustainable product design in achieving its net zero ambitions. The company focuses on extending the life of its products through durable design, using organic cotton, and reducing the use of water-intensive processes. Levi’s® WellThread collection, for example, incorporates circular design principles, making garments that are easier to recycle.

Leading the Industry Shift Towards Sustainability

Achieving net zero requires collective action, and Levi Strauss emphasizes engaging with stakeholders across its value chain. This includes not only suppliers but also consumers, employees, and investors. The denim company encourages consumers to adopt more sustainable behaviors, such as washing jeans less frequently and opting for cold water washes.

Levi Strauss has also joined industry coalitions like the Fashion Industry Charter for Climate Action, which unites fashion brands in taking bold actions to reduce carbon emissions. Through these partnerships, Levi’s aims to drive industry-wide changes and influence policies that support a transition to a low-carbon economy.

Since 2000, global fiber production has nearly doubled, rising from 58 million tonnes to 116 million tonnes in 2022. It is projected to reach 147 million tonnes by 2030 if current non-sustainable practices continue. 

This industry growth comes with significant environmental costs. The fashion sector is the 2nd-largest water consumer and contributes 2%-8% of global carbon emissions. Without changing current practices, the industry’s share of the carbon budget will increase to 26% by 2050. 

Additionally, 85% of textiles are dumped annually, and less than 1% is recycled. 

The fashion company’s climate transition plan offers a promising path forward. By setting science-backed targets and engaging both internal and external partners, Levi Strauss. is taking concrete steps to reduce its environmental impact while inspiring others to help the fashion industry become more sustainable.

SEE MORE: Lululemon and Samsara Eco Reveal World’s First Recycled Textile Using Enzymes

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More Power per Punch: Nuclear Energy Outshines Fossil Fuels

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Power density is essential for evaluating how efficiently a system works. It is a measurement of the power it can handle or produce compared to its size or volume. 

The infographic compares the power density of different energy sources—wood, oil, coal, and uranium—based on how much energy each can generate in megawatt hours (MWh). The comparison uses a baseline of 11 MWh, which is the average annual electricity consumption of an American household.

As you can see, nuclear energy is by far more efficient. This is because just a small amount of uranium can generate as much power as large quantities of fossil fuels or wood. Here’s the breakdown:

Wood: You need about 2.5 tons of wood to generate 11 MWh of electricity. This hefty amount shows how low wood’s energy density is compared to other fuel sources.
Oil: It takes 7.4 barrels of oil to produce the same 11 MWh. While oil is more energy-dense than wood, it still requires a significant amount to reach this energy target.
Coal: Producing 11 MWh takes about 1.5 tons of coal. This makes coal more efficient than wood and oil in terms of energy density.
Uranium: Amazingly, just 100 grams of uranium can generate 11 MWh. This emphasizes the incredible energy density of nuclear fuel compared to traditional fossil fuels or biomass.

The Heavyweight Champ of Low Emissions

The infographic clearly shows that uranium has a much higher energy density than traditional energy sources. While renewables and biomass are important for combating carbon emissions, nuclear energy is much more efficient. It can meet large-scale energy demands with very little fuel. 

Right now, nuclear power provides 10% of the world’s electricity. 

According to the US Energy Information Administration (EIA), nuclear power is projected to increase by 22% between 2022 and 2050.

However, as overall electricity generation grows, nuclear’s share is set to decline, dropping from around 10% of global electricity generation to about 8% by 2050.

With its high power density, nuclear energy is crucial for reducing emissions and meeting global energy needs in this era of clean energy transition.

Notably, energy-related emissions make up about 80% of all human-related greenhouse gas emissions in the U.S. and EU. Despite electricity accounting for only 20% of total energy consumption, it generates over 40% of energy-related emissions. 

Burning fossil fuels like coal, oil, and gas releases around 34 billion tonnes of CO2 annually, with coal contributing 45%, oil 35%, and gas 20%. In contrast, nuclear power produces significantly lower carbon emissions. 

According to the UN IPCC, nuclear energy emits about 12 grams of CO2 equivalent per kWh. This is closely the same as wind and much lower than solar, making it a cleaner electricity source.

Talking about environmental impact, nuclear energy is superior and a cleaner resource. 

It can significantly lower emissions by using less material making it a better sustainable alternative to fossil fuels and biomass.

Learn More >> The Atomic Awakening: Unplugging The Energy Crisis | Fueled by Uranium

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Solar Power to Grow 400% by 2030, Beating Down Coal

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The International Energy Agency (IEA) recently released its World Energy Outlook 2024, highlighting big shifts in global energy trends. Solar power is at the forefront of this transformation, with projections showing that global solar electricity generation could grow fourfold by 2030. This growth is set to accelerate the decline of coal and reshape the global energy mix. 

Solar’s Big Moment: The Future of Power Generation

According to the report, global energy markets stabilized in 2023, with natural gas prices dropping after a spike in 2022 and energy demand growing by 2.1%, aligning with the pre-2020 average. However, under the Stated Policies Scenario (STEPS), demand growth is expected to slow to 0.7% annually until 2030. Most of this growth will be in emerging markets and developing economies. 

Efficiency improvements and increased electrification are key factors, with the Announced Pledges Scenario (APS) showing a slight decline in energy demand, and the Net Zero Emissions (NZE) Scenario indicating a more significant drop.

Source: IEA Energy Outlook 2024 Report

Electricity demand is set to grow across all scenarios, driven by economic progress, electrification of transport (such as electric vehicles), and the rising need for data centers. 

By 2033, solar is expected to surpass nuclear, wind, hydro, and natural gas as a major electricity source. Eventually, it could even overtake coal to become the largest source of electricity worldwide. This marks the beginning of what the IEA calls the “age of electricity,” where clean energy growth and efficiency gains gradually reduce our reliance on fossil fuels.

By 2035, electricity’s share of global consumption will reach 26% in STEPS, 29% in APS, and 36% in the NZE Scenario. In particular, China’s electricity demand is expected to surpass the combined demand of advanced economies by 2030.

Source: IEA Energy Outlook 2024 Report

How Renewables Are Reshaping Energy Markets

The rise of solar power is part of a larger shift toward cleaner energy sources. The IEA predicts that as more renewable energy like solar and wind comes online, global carbon dioxide (CO2) emissions from energy will reach their peak around 2025. This could be a major step forward in reducing the impact of climate change. 

RELATED: Will Record-Breaking Solar Imports Reshape U.S. Industry Amid Tariff Uncertainty?

However, the IEA warns that these changes alone aren’t enough to meet the goals of the Paris Agreement, which aims to limit global warming to well below 2°C, preferably to 1.5°C, above pre-industrial levels. Even with the growth of renewables, CO2 emissions are expected to fall only 4% below 2023 levels by 2030. This would still result in a global temperature increase of about 2.4°C—higher than the desired target.

To reach the 1.5°C target, the IEA outlines a path that it calls “increasingly narrow, but achievable.” This path requires three things:

a rapid shift to clean energy technologies,
faster adoption of electric systems, and
a big reduction in emissions—around 33%—by 2030.

Achieving these goals will demand new policies and large investments in renewable energy, especially in regions that still rely heavily on fossil fuels. 

The IEA suggests that along with expanding clean energy, improving energy efficiency is crucial to keeping global energy demand in check, even as economies and populations grow.

Electricity’s Rise For Cleaner Power 

The World Energy Outlook 2024 also explores various possibilities, including the growth of electric vehicles, energy demand from data centers, and the rising need for air conditioning due to more frequent heat waves. 

No matter the scenario, the IEA expects that demand for coal, oil, and natural gas will peak soon. This shift represents a turning point as the world moves from fossil fuels to renewable energy. 

Coal, which has been a major energy source, could start its decline by 2025, particularly as renewables like solar and wind gain ground in Asia, where coal has traditionally been dominant. Moving away from coal is crucial for reducing the carbon footprint of electricity production and for improving air quality in growing urban areas.

For oil and gas, demand is expected to peak around 2030 before gradually decreasing. The transition away from these fuels will be slower because of their key roles in transportation, petrochemicals, and manufacturing. 

The adoption of clean technologies, such as renewables and EVs, is driving a peak in demand for oil, natural gas, and coal by 2030. Yet, additional investment in clean energy is necessary to make more carbon emissions reductions.

However, as EVs become more popular and cleaner alternatives become available, the reliance on oil is expected to drop. The demand for natural gas is also projected to decline as options like green hydrogen and advanced battery storage become more viable. These alternatives are vital for hitting climate goals and ensuring energy security.

Achieving Net-Zero 2050 with Renewables

The report emphasizes that the growth of renewable energy is central to reshaping the world’s energy system. By 2030, renewable energy capacity could grow to nearly 3x of its current size. 

While this progress is significant, it’s still not enough to reach the ambitious goals to triple renewable capacity. To meet these goals, the IEA stresses the need for more policy support, innovation, and investment in renewables. 

Remarkably, solar and wind could provide nearly 60% of global electricity by 2050. However, fossil fuels still met 80% of global energy needs in 2023, though their demand could peak by 2030. 

One major factor driving the rise of clean energy is the falling cost of solar and wind power, which has made them competitive with traditional fossil fuels. The IEA estimates that solar capacity could exceed 16,000 gigawatts (GW) by 2050, a huge jump from current levels. 

This growth is supported by advancements in battery technology, which help balance the fluctuations of renewable energy sources like solar. In its latest forecasts, the IEA has increased its estimates for battery storage, showing more optimism about the role of these technologies in making renewable energy systems work smoothly.

Despite these promising trends, the IEA stresses that more action is needed to reach climate goals. To stay on track for net-zero emissions by 2050, the world needs more investments in renewable energy and policies that support the shift away from fossil fuels. This could include carbon pricing, subsidies for renewable projects, and regulations that push industries to be more energy efficient. 

According to the IEA, the world has the tools to move to a cleaner energy future, but it will take a lot of effort to make the transition happen quickly enough.

READ MORE: Are U.S. Utilities Falling Short of Biden’s 2035 Clean Energy Goals?

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A $1.46 Billion Boost for First-of-Its-Kind Carbon Capture and Clean Fuels

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Carbon capture and storage (CCS) is gaining momentum as an important solution for reducing global carbon emissions. With significant projects like Gevo’s $1.46 billion Net-Zero 1 plant in South Dakota and a surge in CCS developments worldwide, the industry is expanding rapidly. 

Gevo’s Groundbreaking SAF Plant

Gevo Inc., a Colorado-based alternative fuels company, has been offered a $1.46 billion loan by the U.S. Department of Energy (DOE) to build a “clean” fuels plant in eastern South Dakota that captures carbon emissions. 

The facility, named Net-Zero 1, aims to produce sustainable aviation fuel (SAF), renewable diesel, and renewable naphtha using corn feedstock in Lake Preston. The plant aims to produce SAF while incorporating carbon-negative production processes to offset tailpipe emissions. 

SAF refers to a broad category of biofuels and synthetic fuels intended to replace conventional jet fuel. These fuels still produce tailpipe emissions, but they are counterbalanced by a carbon-negative production process.

Gevo has taken a significant step towards expanding its carbon capture and storage capabilities by acquiring Red Trail Energy LLC’s ethanol plant and associated carbon capture and storage (CCS) assets in North Dakota last month. Valued at $210 million, this acquisition supports Gevo’s ambitious plans to establish Net Zero-1. 

The Richardton, North Dakota facility, brings critical assets to Gevo’s strategy, especially its permitted CO2 storage infrastructure. This site is capable of storing up to 1 million metric tons of CO2 annually, though Red Trail has only used less than 20% of this capacity so far. 

Net-Zero 1 would be the first SAF facility of its kind in the U.S., as noted by the DOE. The conditional loan was one of two announced on the same day; the other, worth $1.44 billion, was offered to Montana Renewables for expanding a renewable fuels plant in Great Falls.

Gevo expects to close the deal in 2025, with third-party project equity making up most of the project’s funding. 

The company has partnered with Summit Carbon Solutions, which is developing a pipeline to transport the captured CO2 to a storage site in North Dakota, to manage its carbon emissions. 

With capitalized interest during construction, the loan guarantee could provide Gevo with a borrowing capacity of $1.63 billion. The said financing is subject to specific conditions and an environmental review by the DOE.

Global Growth and Trends in Carbon Capture Projects

Globally, the CCS landscape is seeing a significant expansion, according to the Global CCS Institute report. The think tank’s 2024 annual status update highlights a notable increase in projects worldwide, with 291 CCS projects in advanced development or under construction as of mid-2024. 

Chart from Global CCS Institute report

This figure represents a substantial growth from 147 projects in mid-2023. It shows the rising momentum of CCS technology as governments across the globe implement policies to combat climate change. There are now 50 operational CCS projects worldwide, but the majority remain in the design and permitting stages.

The total CO2 capture capacity of these projects has also increased, growing from 177 million metric tons annually in 2023 to 231 million metric tons by mid-2024. However, this growth comes despite setbacks, including several high-profile cancellations. 

For instance, Navigator CO2 Ventures recently scrapped plans for a 1,300-mile CO2 pipeline in the U.S. Midwest. The reason for this is the challenges faced in securing state permits. 

Still, government incentives, such as federal tax credits for CCS, have been instrumental in driving new projects in the US. Currently, 13 CCS projects are under construction, primarily associated with hydrogen, ammonia, and ethanol production facilities, which are often easier to retrofit with CCS technology. 

Moreover, a growing number of direct air capture (DAC) projects are in development, catering to the increasing demand for carbon credits. These credits are seen as more easily verifiable than those from traditional carbon capture methods. 

Government subsidies and supportive regulations have played a crucial role in boosting CCS deployment. 

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

The Global CCS Institute’s report emphasizes the need for continued public funding. Without a price on CO2 or mandatory capture regulations, many CCS projects may struggle to remain financially viable. The case of Alcoa Corporation is an example of this.

A Push for CO2 Compensation 

Alcoa Corporation is pursuing $80 million in CO2 compensation from the Spanish government, seeking reimbursement for carbon-related costs incurred between 2018 and 2021 at its San Ciprian aluminum and alumina production complex. 

The compensation is critical for Alcoa as it faces increasing competitive pressure in the European market. Its neighboring countries like France offer significant carbon credits and subsidies to support smelters. These subsidies make French operations more viable compared to those in Spain. 

CEO William Oplinger echoed the need for equal support to ensure the competitiveness of Alcoa’s operations in Spain.

The Pittsburgh-based company’s challenges in Spain extend beyond the lack of CO2 compensation. It is also working on a strategic cooperation agreement with Ignis Equity Holdings to secure the future of the San Ciprian complex. Under this agreement, Ignis will invest €25 million for a 25% stake in the facility, while Alcoa commits €75 million to ongoing operations. 

Additionally, Alcoa seeks access to around $85 million in restricted cash controlled by unions at the site to help cover operating expenses.

These ongoing developments in carbon capture across companies and countries underscore both the opportunities and challenges facing the sector. As more projects move from planning to execution, the potential of CCS to play a critical role in achieving climate targets becomes increasingly clear. 

READ MORE: The “Northern Lights” Shines: Shell, Equinor, and TotalEnergies JV Powers the Norway CCS Project

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