Nestlé Unveils New Initiatives to Cut Cocoa Supply Emissions

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Moving towards sustainable sourcing, Nestlé has recently announced groundbreaking initiatives aimed at curbing cocoa supply emissions. Already a global leader in food and beverage, its commitment to the environment has grabbed a significant spotlight. 

Nestlé has unveiled its transformative projects spanning five years in collaboration with suppliers Cargill and Export Trading Group’s (ETG) Beyond Beans. These initiatives involve advancements in agroforestry practices and a shift towards sustainable farming of cocoa.

Let’s deep dive into the details of Nestlé’s ambitious efforts to revolutionize the cocoa industry towards emission reductions.

Fostering Partnership with Cargill and ETG | Beyond Beans for Sustainable Projects

Nestlé’s partnership with its suppliers Cargill and ETG | Beyond Beans aligns with its objective to achieve net zero by 2050. They will primarily target carbon reduction and removal with Nestle’s cocoa supply chain. 

The key objectives of the projects are:  

Cocoa & Forest Initiative (CFI)

It envisions planting over 2 million shade trees, managed by 20,000 farmers in Ghana and Côte d’Ivoire. These projects are projected to cut down over 500,000 MTs of carbon dioxide over twenty years. 

The shade trees mitigate exposure to sunlight and preserve moisture for the cocoa crops in dry seasons. They optimize water resources and boost biodiversity on farms. Most importantly, they are highly efficient in absorbing CO2 from the atmosphere. 

Under CFI, Nestlé also plans to cut cocoa supply emissions by encouraging farmers to shift towards regenerative agriculture. The core focus would be to support reforestation in degraded cocoa farming lands. 

To support this program, Darrell High, global cocoa manager at Nestlé has said: 

“We’re working to address our emissions all the way to the farms we source from. Long-lasting forest protection can only happen when collaborating with fully committed suppliers, just like Cargill and ETG | Beyond Beans. We also depend on the participation of local communities, who have an impact on the forests and can help find land-use solutions that are best suited for the local reality.”

Read More: Carbon Credits Farming (Everything You Need To Know)

Involving Locals and Community Engagement Activities

Community engagement and social inclusions of the locals come under Nestlé’s Income Accelerator Program. It’s specifically designed to support cocoa-farming families. The projects would ensure that farmers receive their due rewards and incentives for the labor they put into planting and nurturing the cocoa crops.

Ursule Gatta, Cargill’s sustainability partnership officer in Côte d’IvoireOur said,

 “Our ambition is to scale up the project to cover 18 cooperatives over five years, aligned with the Nestlé Income Accelerator program.”

Cargill and ETG | Beyond Bean projects strive to engage the local communities whose agricultural lands have not been cultivated for a long time. These two firms will take over those lands for reforestation and redevelopment purposes. 

They aim to plant tree nurseries for cocoa seed cultivation. Apart from financial aid, the companies will offer technical assistance and consultations to the farmers to carry out sustainable agricultural practices. 

Both the supplier chains play crucial roles in facilitating the implementation of Nestlé’s Income Accelerator Program within these projects. 

Unlocking Global Reforestation Program (GRP) to Mitigate Cocoa Emissions by 2030

As mentioned on Nestlé’s official website, it has set an ambitious reforestation goal aka the Global Reforestation Program (GRP). The company pledges to grow 200 million trees by 2030 in and around farms where it sources its key ingredients. 

Nestle’s primary focus will be on deforested land. They will also work to establish conservation and restoration as standard practices across their supply chains. 

Why Nestlé’s GRP is crucial for climate change? Well, reforestation and restoration of degraded landscapes actively aid in long-term carbon removal and storage. These efforts are part of Natural Climate Solutions (NCS), essential for combating climate change.

Therefore, Nestlé with its land-use footprint must urgently invest in conservation and restoration to reach the 1.5°C target set by the International Panel on Climate Change (IPCC) in the COP21 Paris agreement.

The company’s Net Zero Roadmap incorporates carbon removals, primarily from sourcing ingredients. They believe that natural climate remedies in their supply chain can potentially eliminate GHGs from the atmosphere. This is expected to further boost their decarbonization goal of achieving 2.0 million tCO2e removals by 2030.

The chart examines Nestlé’s sustainability performance in 2021

source: www.nestle.com/sustainability

The main points highlighted in this chart are:

By 2025, reduce absolute emissions by 20%
from 2018 levels

By 2030, reduce absolute emissions by 50% from 2018 levels

Simultaneously, it is also important to track the viability of the projects to enjoy long-term benefits. One such way is monitoring the number of trees planted and the volume of CO2 removed. 

As per reports, Nestlé anticipates installing high-resolution satellite imaging technology to ensure the smooth running of its cocoa supply emission control strategy. With this tool, they can track the sustainability of the cultivated trees and evaluate the overall outcome of the reforestation projects. 

One can foresee that Nestlé aims to revolutionize the cocoa industry’s approach to mitigating emissions with innovative strategies and partnerships. They are investing at the landscape level to achieve both environmental and socio-economic benefits.

Further Reading: Nestlé and Fonterra to Develop NZ’s First Net Zero Dairy Farm (carboncredits.com)

 

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The Swiss-Thai Carbon Credit Deal Ignites EV Revolution in Bangkok

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Switzerland and Thailand recently cracked a groundbreaking carbon credit deal under Article 6.2 of the Paris Agreement on 9 January 2024.

Both countries have made their first transaction of Internationally Transferred Mitigation Outcomes (ITMOs), in which Swiss-based KliK Foundation purchased 1916 ITMOs from Thailand’s Energy Absolute Public Co. Ltd company for the Bangkok E-Bus Program.

Switzerland is the first sovereign country to purchase units to meet its national determined contributions (NDCs). On June 24, 2022, the endorsement of this deal occurred, and credits were allocated to the KliK Foundation in the Swiss Emissions Trading Registry on December 15, 2023

For a few years, the KliK Foundation has been supporting CO2 mitigation activities in countries that have signed a bilateral climate agreement with Switzerland under Article 6.2 of the Paris Agreement.

Apart from Thailand, the Swizz country has also signed similar agreements with Dominica, Ukraine, Ghana, Chile, Georgia, Morocco, Malawi, Peru, Senegal, Tunisia, Uruguay, and Vanuatu.

Read More: Thai-Swiss Deal Sets Paris Agreement Carbon Offsets in Action (carboncredits.com)

Relevance of Article 6.2 of the Paris Agreement to the Swiss-Thai Carbon Credit Deal  

Article 6.2 of the Paris Agreement provides “a decentralized framework for countries that are parties to the Paris Agreement to enter into bilateral or multilateral arrangements, known as “cooperative approaches.” 

It enables the transfer of one country’s GHG carbon credits to other countries to fulfill their net zero pledge to the Paris Agreement, as outlined in their NDCs. These specific carbon credits are known as Internationally Transferred Mitigation Outcomes (ITMOs).

The country obtaining ITMOs under Article 6.2 is termed the “host country,” as it hosts several types of GHG reduction projects. The “recipient” country is involved in ITMO transactions. It fortifies its NDCs by financing projects located at sustainable and cost-effective GHG mitigation sites.

This is how Article 6.2 of the Paris Agreement facilitates the utilization of cross-border carbon credit exchange to achieve their net zero targets under the Paris Agreement.

Both the companies have given a joint statement:

“The ITMOs will be used by the Klik Foundation to fulfill its compensation obligation under the Swiss CO₂ Act. Switzerland intends to use these ITMOs towards its target under the Paris Agreement. To avoid double counting, Thailand has committed to adjust its greenhouse gas inventory by the amount of mitigation outcomes transferred to Switzerland.”

This leads to an inference that the Swiss-Thai carbon credit deal is a mutual commitment towards their NDCs and immensely significant for the global carbon credit market.

Let’s read about the program included in the deal…

Bangkok E-Bus Program Ignites EV Revolution

The Bangkok E-Bus Programme is the crown jewel of this deal. Financed by the KliK Foundation, it has authorized a climate protection plan for the private-public transport sector to introduce EVs on the road.

Marco Berg, the managing director of KliK Foundation has confirmed that the organization commits to purchasing offsets for a maximum of 1.5 million metric tons of CO2 emissions from Energy Absolute until 2030. This acquisition constitutes only a fraction of the 20 million credits it anticipates acquiring by the end of the decade.

Energy Absolute Public Company Limited overseeing the manufacturing of EVs has contracted South Pole to develop the Bangkok E-Bus Programme. Initially, it would target all oil-operated vehicles in the Bangkok Metropolitan area and replace them with EVs.

As per reports, Energy Absolute will generate carbon credits with the launch of about 4000 electric buses in Bangkok. It will eventually stop petrol and diesel use. With this action plan, the government aims to curb a huge amount of greenhouse gas load and air pollution in the city.

Simultaneously, it will establish the groundwork for a comprehensive charging infrastructure network throughout the city. This climate protection initiative is anticipated to play a crucial role in enhancing air quality in Bangkok. This makes the program a pioneer in driving the electrification of Thailand’s mobility sector.

Furthermore, Chatrapon Sripratum, VP of Strategy Development & Investment Planning of Energy Absolute PCL strongly believes that the deal would be successful. He expects a huge bloom in the coming years.

Promising Sustainable Electrical Mobility in Bangkok

With concrete efforts and robust financing to ramp up EV manufacturing, Bangkok is setting its sights on a decarbonized future. The Bangkok E-Bus is a pilot program based on a highly efficient and sustainable strategy.

Some of the key features of this massive project highlighted by the Klik Foundation are:

The current total ownership costs (TCO) for electric buses are notably higher than those for internal combustion engine (ICE) buses. Further, The KliK Foundation intends to use carbon finance obtained through the acquisition of at least 500,000 ITMOs until 2030. The goal is to compensate the cost of total ownership between conventional buses and electric buses included in this project.

Between 2021 and 2022, the team conducted a test run, putting only 120 EVs on the road. However, privately operated bus lines in the Bangkok Metropolitan Region are currently introducing electric buses in phases. It aims to replace all internal combustion engine (ICE) buses from private operators and mitigate fossil fuel combustion.

The KliK financing mitigation initiative will offer valuable perspectives on digitalized MRV systems for GHG reduction activities and establishing EV-friendly infrastructure in Bangkok. This, in turn, will enhance Thailand’s NDC mitigation ambitions.

Value of electric vehicles (EVs) market in Thailand from 2016 to 2022, with forecasts through 2025 (in million U.S. dollars)

Source: Statista

The Bangkok E-Bus program will offer cheaper tickets, the best quality travel experience, increased frequency, and convenient travel routes for general citizens. It would give a huge boost to Bangkok’s economy and Thailand’s climate mitigation goals.

We believe that the success of this Swiss-Thai carbon credit deal should foster confidence and trust in similar agreements. It could be setting a great example for ethical carbon trading in the future.

More insights: Thailand’s Biggest Companies Plan Carbon Credit Exchange • Carbon Credits

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Iberdrola Announces $45 Billion Investment Plan in US Power Grids

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Spain’s leading power company Iberdrola has announced a staggering $45 billion investment in US power grids, bolstering energy infrastructure in the country for the next three years. Iberdrola’s main aim is to upgrade and expand US power grids.

The decision is a huge shift towards global energy investments. It signifies the company’s expansion efforts and commitment to renewable energy projects across the Atlantic.

Iberdrola’s Ambitious Investment Strategy for US Power Grids

The new investment plan is an extension of what Iberdrola had announced in 2022. The company said it would adopt a more meticulous approach to the renewable energy sector.

The company aims to divulge 15.5 billion euros to projects already under construction or about to begin construction. Consequently, it would expand its portfolio by ~ 9,000 MW. It would be a huge stride to achieve the target of 52 GW of renewable infrastructural capacity by the end of 2025.

Iberdrola has a market cap of approximately $77 billion, making it the largest European electricity company. It will render 34% of global net investments to the US and 24% to the UK by 2026. Most of the funds will be used in offshore wind projects in the United States, United Kingdom, France, and Germany.

First Achievement: Launching Vineyard Wind 1 Project

Avangrid, Inc. a leading sustainable energy company and member of the Iberdrola Group, along with Copenhagen Infrastructure Partners (CIP), a global leader in green energy investment, has successfully installed the first GE Haliade-X Wind Turbine Generator (WTG) for the Vineyard Wind 1 project. This will be the first large-scale offshore wind farm in the United States with 13 MW capacity.

Avangrid CEO Pedro Azagra, supporting this move has said,

“This is a monumental achievement and a proud day for offshore wind in the United States that proves this industry is real and demonstrates Avangrid’s steadfast commitment to helping the Northeast region meet its clean energy and climate goals.”

This is Iberdrola’s first achievement on the commencement of a $45 billion investment plan in US power grids. As reported in a press release from Vineyard Wind, the key features of the completed GE Haliade-X Wind Turbine Generator will be:

It will contain 62 wind turbines of 806 MW capacity.
It can power more than 400,000 homes and companies in Massachusetts.
It is expected to reduce 1.6 MMT carbon emissions per year which is equivalent to offloading 325,000 cars from roads.
Read more: Iberdrola Launches New Carbon Credit Unit to Sequester 61M Tons of CO2 (carboncredits.com)

Advancements in Grid Infrastructure Through Substantial Investments

Iberdrola’s commitment to net zero transcends Vineyard Wind, with significant investments directed toward grid infrastructure and the introduction of renewable energies. Ignacio Sanchez Galan, CEO of Iberdrola has confirmed that,

“The investments made in grids have also resulted in a new asset record: EUR 42,000 million spent on 1,300,000 km of lines and thousands of substations in the United States, the United Kingdom, Brazil and Spain.”

The image demonstrates Iberdrola’s global presence sustainability report in 2023:

source: Iberdrola

Additionally, Iberdrola’s annual report elaborates on its significant achievements in the last year. They are:

Investments in 2023 propelled company assets beyond EUR 150,000 million, resulting in a net profit of EUR 4,803 million. This marked an 11% increase from the prior year.
The company achieved growth while fortifying its financial stability. It secured over EUR 13,300 million in green and sustainable financing, reaffirming its leadership in the energy sector.

Smart Microgrids: Empowering Small Communities with Sustainable Energy Solutions

Another interesting attribute of Iberdrola’s investment strategy is installing smart microgrids in specific areas outside the proximity of the main grid. In a solar-powered microgrid system, the panels harness electricity from sunlight during the day and simultaneously store excess energy in batteries for use during periods of low light. The battery storage integrated into microgrids ensures uninterrupted power supply during outages or maintenance, forming what is referred to as “electricity islands”.

It’s a sustainable and energy-efficient energy solution to fulfill the renewable energy demands of small, remote communities that have no access to the conventional electricity grid.

Here’s an infographic demonstrating smart microgrid technology:

Source: Iberdrola

Decoding Iberdrola’s Decision to Invest in Grid Expansion and Renewable Energy 

Why Iberdrola has majorly directed a huge investment to precisely expand grids and renewable sources? The reason the company strongly believes that investing in grids will bolster the electrification drive, pivotal for decarbonization efforts.

They also envision that the electrical sector is poised for exponential growth in the future. Therefore, upgrading the grid infrastructure is crucial for ensuring a more reliable, stable, and secure energy supply.

With a robust and integrated grid network, Iberdrola aims to diminish dependence on fossil fuels as they are highly volatile and leave behind a huge carbon footprint. Thus, the decision to invest in grids aligns with global climate goals.

Study the image below to understand Iberdrola’s Climate Action Plan:

source: Iberdrola

Noteworthy, The International Energy Agency (IEA) states that the world needs to add or replace approximately 80 million km of power lines by 2040 to meet the Paris Agreement’s goal of restricting temperature rise to 1.5°C.

After evaluating all these crucial factors, one can infer that Iberdrola’s $45 billion investment plan in US power grids is certainly going to be a game changer in the renewable energy sector.

Further Reading: Tesla’s $413M Power Move: Megapacks to Revolutionize Massachusetts’ Energy Grid (carboncredits.com)

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World Bank Pays Vietnam Over $51 Million in Carbon Credits

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Vietnam has achieved a significant milestone in its efforts to combat climate change, receiving a payment of over $51 million for verified emissions reductions, also known as carbon credits.

The payment is from the World Bank’s Forest Carbon Partnership Facility (FCPF). It is attributed to Vietnam’s successful initiatives in reducing deforestation and forest degradation (REDD) and enhancing carbon storage through reforestation and afforestation.

Rewarding Climate Action via Carbon Credits

Notably, Vietnam is the first country in the East Asia Pacific region to receive a results-based payment (RBP) from the FCPF. 

Results-based payment is a dynamic strategy within the space of sustainable development. It is designed to incentivize climate action, foster the growth of carbon markets, and spur innovation. 

Under this payment framework, investors provide financial compensation to an entity—be it a sovereign nation, a private enterprise, or a local community—to accomplish, document, and independently verify a set of performance objectives. 

These objectives are typically linked to outcomes of climate change mitigation or adaptation efforts. They include activities such as cutting greenhouse gas emissions, deploying nature-based solutions, or responsibly managing natural resources.

The WB’s payment acknowledges Vietnam’s achievement in reducing 10.3 million tonnes of carbon emissions between February 2018, and December 2019. This marks the largest single payment for verified and high-integrity carbon credits made by the FCPF to date.

The benefits of the payment are extensive, reaching 70,055 forest owners and 1,356 neighboring communities. These benefits are allocated according to a robust benefit-sharing plan developed through a consultative, participatory, and transparent process.

Vietnam’s Emission Reductions Triumph Paves the Way to Net Zero

Vietnamese Minister of Agriculture and Rural Development, Le Minh Hoan, emphasized the significance of this achievement. He stated that: 

“The success of this REDD programme brings Vietnam closer to delivering on our ambitious Nationally Determined Contributions under the Paris Agreement, while protecting areas of vital importance to biodiversity conservation.”

Furthermore, Vietnam has exceeded its emission reduction targets of 10.3 million stated in the Emission Reduction Payment Agreement. The Asian country achieved a total of 16.2 million tonnes of verified emission reductions. It can then sell the corresponding carbon credits to buyers via bilateral deals or carbon markets.

RELATED: Cambodia to Sell 15 Million Tonnes of REDD+ Carbon Credits

Vietnam can also decide to count the credits towards its Nationally Determined Contributions or retire them.

This success has prompted the World Bank to issue a call option notice to acquire an additional 1 million tonne emission reductions beyond the agreed contract volume.

Vietnam’s emission reduction program focuses on protecting its tropical forests, covering 3.1 million hectares of land. These forests are vital for biodiversity conservation, forming the backbone of internationally recognized conservation corridors and supporting various ethnic minority groups and forest-dependent communities.

In 2016, Vietnam’s net carbon sink capacity was 39 metric tonnes of CO2 equivalent (MtCO2e). The Southeast Asian nation pledged to achieve net zero emissions by 2050 during the COP26 World Leaders’ Summit in 2021.

The country’s National Climate Change Strategy underscores its determination to reach net zero, but dependent on international financial support. The strategy aims to:

Reduce 70% of remaining emissions by 2030,
Increase carbon absorption by 20%, and
Achieve a total sink capacity of 95 MtCO2e.

On top of it all, maintaining 43% national forest coverage is crucial for reaching net zero emissions.

As per McKinsey & Company analysis, Vietnam can achieve 2050 net zero through a concerted decarbonization effort across all seven sectors. The country’s REDD+ program falls under LULUCF (land use, land-use change, and forestry) sector.

Through a multifaceted approach involving enhanced forest management practices, strategic investments in the forestry sector, and agricultural policy refinements, Vietnam’s program aims to expand both the coverage and quality of forested areas while engaging local communities.

Unlocking Climate Finance Potential 

The Forest Carbon Partnership Facility is a global partnership aiming to reduce emissions from deforestation and forest degradation, conserve forest carbon stocks, and enhance forest carbon stocks in developing countries. 

Launched in 2008, the FCPF has worked with 47 developing countries across Africa, Asia and Latin America, and the Caribbean. It has contributions and commitments totaling $1.3 billion from 17 donors.

The FCPF plays a pivotal role in supporting REDD+ efforts through its two distinct yet complementary funds.

The FCPF Readiness Fund, operational from 2008 to 2022, has been instrumental in assisting developing countries in their preparations to engage in a comprehensive system of positive incentives for REDD+. Over its operational period, the Readiness Fund has disbursed a total of $472 million to support these critical readiness activities.
In parallel, the FCPF Carbon Fund serves as a mechanism for piloting results-based payments to countries that have demonstrated tangible emission reductions in their forest and broader land-use sectors. With a current funding envelope of $900 million, this Fund incentivizes emission reductions and promotes sustainable forest management practices.

Together, these funds under the FCPF framework provide a comprehensive and flexible platform for supporting REDD+ initiatives across the globe. The FCPF is advancing the goals of REDD+ while fostering sustainable development and environmental stewardship in forested regions worldwide.

READ MORE: What is REDD+? Development, Issues, and Solutions

Vietnam’s success underscores the transformative potential of rewarding climate action, offering a blueprint for sustainable development and environmental stewardship.

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Texas Withdraws $8.5 Billion from BlackRock Over ESG Investing

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The decision by the Texas State Board of Education to terminate its investment partnership with BlackRock has reignited the debate surrounding Environmental, Social, and Governance (ESG) investing in the United States. With $8.5 billion withdrawn from the investment giant, the move underscores the deepening divide between political and investment strategies.

At the center of this controversy is BlackRock, the world’s largest asset manager and a vocal advocate for ESG principles.

While BlackRock’s leadership in promoting sustainability and climate action has garnered praise from many investors and stakeholders, it has also drawn sharp criticism from some Republican politicians in states like Texas. These politicians accuse BlackRock of advancing a left-wing agenda and undermining traditional energy sectors.

The Rise of ESG Investing

ESG investing, short for Environmental, Social, and Governance investing, evaluates companies based on their performance across various responsibility metrics and standards to assess their suitability for investment.

By using these standards, investors can identify businesses that show strong environmental stewardship, social impact, and effective governance practices. ESG investing is also called sustainable investing, impact investing, and socially responsible investing.

Many ESG investors put a higher value on the environmental factor and remove environmental polluters from their portfolios. They instead decide to invest in companies that opt to reduce dependence on fossil fuels. 

READ MORE: ESG Investing with Carbon Credits – What Investors Need To Know

The state of Texas has been a battleground in the anti-ESG movement. State officials are taking decisive actions against companies and investors perceived to be prioritizing social and environmental concerns over economic interests.

For instance, Texas recently banned UK bank Barclays from participating in the municipal bond market due to its ESG policies. The state has also considered divesting from asset managers accused of boycotting energy companies.

Texas isn’t alone in rallying against ESG investing. In 2023, states with Republican-controlled legislatures saw the enactment of at least 25 anti-ESG bills.

Utah, in particular, passed 5 of these bills, contributing significantly to the overall count. Despite these legislative successes, a few bills are still pending approval. These developments were reported on a website maintained by Lichtenstein’s team, dedicated to tracking such bills.

Texas’s anti-ESG stance may appeal to some constituents. However, it could come at a significant cost to investors and the state’s economy. 

A study conducted by the Texas County & District Retirement System estimated potential losses of over $6 billion in ten years from prohibiting ESG investing in public retirement systems. This underscores the complex trade-offs involved in balancing financial returns with social and environmental objectives.

Moreover, MSCI’s report showed that the top 20 ESG funds saw increasing return contributions because of better ESG performance.

Chart from MSCI

Texas Takes a Stand

In defending its decision to terminate the partnership with BlackRock, the Texas State Board of Education cited legislation prohibiting investment in companies that boycott certain energy firms.

Board Chairman Aaron Kinsey expressed concern about BlackRock’s impact on Texas’s oil and gas industry. The Texas Permanent School Fund (PSF) gets its money from the industry’s revenue. 

In a statement posted on X, Aaron Kinsey, PSF Chair, noted that:

“BlackRock’s dominant and persistent leadership in the ESG movement immeasurably damages our state’s oil and gas economy and the very companies that generate revenues for our PSF… The PSF will not stand idle as our financial future is attacked by Wall Street.”

The statement reflects growing concerns among certain stakeholders in Texas regarding the influence of ESG considerations on investment decisions. And that it may also have potential impacts on the state’s energy sector. According to the state BOE’s website, Kinsey is the CEO of American Patrols, an aviation oilfield services company in Midland.

Critics argue that this may undermine the long-term financial health of PSF and limit its ability to achieve investment objectives. 

BlackRock Defends its Position

BlackRock has faced mounting scrutiny from Republican politicians and activists who accuse the company of promoting a leftist agenda. Last year, the asset manager inked a deal to invest $550 million in Occidental Petroleum’s Direct Air Capture (DAC) plant in Ector County, Texas. 

In response to the state’s decision, BlackRock’s CEO Larry Fink has defended the company’s engagement with the energy industry. He stated in an email that:

“The decision ignores our $120 billion investment in Texas public energy companies and defies expert advice. As a fiduciary, politics should never outweigh performance, especially for taxpayers.”

Despite these criticisms, BlackRock emphasized its significant investments in U.S. energy companies. Moreover, the company noted that it’s instrumental in assisting millions of Texans in investing and saving for retirement. They’ve also channeled over $300 billion into Texas-based companies, infrastructure, and municipalities, with a significant portion, totaling $125 billion, directed toward the energy sector.

Last week, the investment giant published a report identifying key developments that will impact low-carbon transition investment opportunities and risks in 2024.

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

As the debate over ESG investing continues to evolve, investors and policymakers must carefully weigh the potential benefits and drawbacks of incorporating environmental, social, and governance considerations into investment decisions.

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Taiwan Sets Massive Target of 700K-Ton Blue Carbon Reserve by 2030

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Coastal ecosystems primarily the mangroves, seagrass meadows, and tidal marshes offer sustainable ecosystem services like protecting the coastal areas and nursery of marine species and offering water purification. These oceanic ecosystems and coastal areas are huge reservoirs of carbon which is termed blue carbon and the ecosystem formed by it is called Blue Carbon Ecosystem (BCE).

Blue carbon plays a crucial role in absorbing atmospheric CO2 and significantly impacts climate change and the net global distribution of carbon wealth.

Many research reports show that Australia, Indonesia, and Cuba are the largest contributors of blue-carbon net wealth to the rest of the world. However, only a few countries can entirely offset their carbon footprint through blue carbon.

In recent years, Taiwan has emerged as a pioneer in the development of a vibrant and sustainable blue carbon market. Its government is proactive in recognizing the values of blue carbon and has implemented policies and initiatives to promote its sustainable utilization.

Taiwan’s primary focus is to enhance the carbon sequestration capacity of its coastal ecosystems and foster economic growth and ecological resilience.
The government aims to expand its eco-conservation efforts by establishing maritime protected areas and diversifying afforestation projects.
The sale of carbon credits generated from blue carbon projects would enable the upscaling of restoration, conservation, and development of these ecosystems

Taiwan Targets a 700K-Ton Blue Carbon Oasis by 2030.

Taiwan holds a substantial blue carbon reserve of 350,000 tons, surpassing its terrestrial forest (green carbon) counterpart. The mangrove-based blue carbon ecosystem is believed to offer a 2.5x greater carbon offsetting effect compared to a similar-sized green carbon ecosystem. This is because its geography offers a huge advantage to its vast stretch of blue carbon reserves. The island is in the western Pacific Ocean lying roughly 100 miles (160 km) off the coast of southeastern China.

Researchers and industry experts have also vouched for blue carbon as it is more resilient and stable with higher carbon sequestration and carbon sediment retention potential. Unlike forest lands that could be vulnerable to several risks like illegal deforestation and wildfires, blue carbon reserves have more endurance capacity which makes it a hotspot for investment opportunities.

Foreseeing the growth in this domain, the Taiwan government is aiming to double its current reserves to 700K tons by 2030 with intensified developmental efforts.

Figure: Comparison of potential for sequestering carbon between coastal and terrestrial forests

Source: Blue Carbon Initiative

Taiwan Opens a New Window to Blue Carbon Opportunities

Dating back to 2022, The Taiwan Ocean Union was formed with the United Nations Decade of Ocean Science for Sustainable Development (2021-2030), to foster collaboration among academic institutions, government, and other stakeholders to develop and conserve Taiwan’s marine ecosystems. The Ocean Union focuses on 5 key domains:

blue carbon ecosystem
marine environmental sustainability
marine observation technology
laws and policies for the ocean, marine databases, and research vessels
ocean engineering technology

The chairperson of the Taiwan Ocean Union, Professor Chiang Kuoping, (also a faculty of the National Taiwan Ocean University), further fortified the Union’s objective by stating,

“The union aims at establishing a database for all sorts of marine research, providing systematic data for the experts of law and policymakers to propose effective proposals, thereby improving the government’s policy implementation. The second target is to establish and grow ocean industries.”

With this step, Taiwan is looking ahead to increase its offset methodologies for blue carbon and align with the global mission to achieve net zero by 2050.

Taiwan’s Algae Cultivation Strategy to Secure Carbon Credits

Taiwan is actively investigating the prospects of blue carbon via a pilot initiative supported by the government. One such technology is – microalgae cultivation and carbon sequestration. Given the vastness of oceans, highly efficient ocean-based carbon dioxide removal (CDR) solutions can potentially eliminate billions of tons of CO₂.

The technology involves using algae to capture carbon dioxide from its surrounding atmosphere. The algae perform photosynthesis and convert it into biomass and oxygen. The microalgae are sourced from farming, detaches, and sinks loaded with sequestered carbon.

Also, the macroalgal biomass is compressed and retained in the ocean for carbon sequestration.

For industrial applications, microalgae can generate carbon credit through multiple mechanisms. To name a few, microalgal biomass production, biofuel production, wastewater treatment, and various research and development activities related to optimizing microalgae strains and cultivation techniques.

Partnerships between the Taiwan Ocean Research Institute and National Dong Hwa University can establish a top-notch monitoring system for Taiwan’s marine species and blue carbon ecosystem.

Taiwan Opens a New Window to Blue Carbon Opportunities

Dating back to 2022, The Taiwan Ocean Union was formed with the United Nations Decade of Ocean Science for Sustainable Development (2021-2030), to foster collaboration among academic institutions, government, and other stakeholders for the development and conservation of Taiwan’s marine ecosystems.

Since then, the Ocean Union has put serious efforts to conserve Taiwan’s marine ecosystem. It focuses on 5 key domains:

blue carbon ecosystem
marine environmental sustainability
marine observation technology
laws and policies for the ocean, marine databases, and research vessels
ocean engineering technology

With this step, Taiwan is looking ahead to increase its offset methodologies for blue carbon and align with the global mission to achieve net zero by 2050.

A Greener Bliss: Blue Carbon for Carbon Credits

Climate Mitigation: The project aligns with global climate goals by actively reducing carbon dioxide levels by incorporating ocean-based carbon dioxide removal technologies.
Renewable Energy Source: Microalgae-derived biofuels provide a sustainable and renewable energy source, reducing dependence on fossil fuels and contributing to a cleaner energy landscape.
Environmental Stewardship: Taiwan’s initiative underscores its commitment to environmental stewardship, demonstrating responsible and innovative approaches to address climate challenges.

As per reports, Taiwan’s Ocean Affairs Council has finalized the revision of the “Blue Carbon Methodology” for native mangroves and seagrass beds. This initiative, currently under review by the Ministry of Environment, aims to “standardize measurement procedures for blue carbon sequestration and greenhouse gas reduction.”

In March 2022, Taiwan officially published “Taiwan’s Pathway to Net-Zero Emissions in 2050”, which provides the action plan to achieve 2050 Net-Zero Emissions and develop its blue carbon.

From this analysis, we can conclude that Taiwan’s blue carbon reserve initiative towards achieving the ambitious target of 700 K-ton by 2030 has considerable ground to cover.

Read more: Blue Carbon from Floating Farms Seaweed • Carbon Credits

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Microsoft to Purchase 95,000 Biochar Carbon Removal Credits from The Next 150

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The Next 150, a carbon removal company, has entered into a 6-year purchase agreement with Microsoft to provide 95,000 tons of high-quality Carbon Dioxide Removal (CDR) credits produced by its General Biochar Systems (GBS) business unit’s biochar plant in Guanajuato, Mexico. This agreement marks a significant milestone for the company, aiming to become a leading supplier in the emerging biochar industry.

Patrick Atanasije Pineda, Managing Partner at The Next 150, highlighted the importance of this deal, saying that:

“Securing multi-year commitments like the one with Microsoft allows The Next 150 to mobilize large-scale biochar projects across Latin America, attracting institutional finance for project-level lending supported by creditworthy offtakes.”

Unlocking Carbon Removal Potential

Biochar Carbon Removal, or BCR, relies on pyrolysis – a process that uses high heat in a controlled oxygen-deprived environment to convert biomass into biochar. Biochar is a highly porous, stable, and durable form of carbon that can efficiently store CO2 for long periods.

The World Economic Forum hails biochar as the carbon removal’s jack of all trades. The biochar industry has vast potential, but its growth has been hindered by limited awareness and high production costs. 

Enter biochar carbon removal credits. They offer a solution to these challenges, making BCR projects more economically viable. By addressing awareness and funding gaps, these credits unlock the full potential of biochar.

BCR provides a wide range of economic, environmental, and social advantages. In areas hardest hit by climate change, BCR can promote climate justice by directing mitigation benefits to where they are most needed, a concept underscored by the Intergovernmental Panel on Climate Change (IPCC) 2022 report.

The Next 150’s Biochar Journey

The Next 150 strongly believes in the power of biochar to help address climate change through BCR credits. 

Founded in late 2022, The Next 150 is a Swiss climate-forward venture developer and operator. Within less than a year, its first biochar production facility, General Biochar Systems in Mexico, started operations. 

GBS’ Guanajuato plant signifies the first step in their waste-valorization and climate-tech efforts in Mexico. Employing GBS’s sophisticated pyrolysis technique, biochar is produced by exposing biomass to elevated temperatures in a carefully controlled oxygen-deprived setting, leading to the mineralization of its carbon content.

By October 2023, the project began integrating its biochar into state-run quarry rehabilitation efforts to restore degraded landscapes and enhance biodiversity.

The company’s ongoing initiatives with local governments and civil society organizations aim to provide biochar to up to 23,000 local farmers as a sustainable soil amendment. Biochar offers additional benefits such as improved crop yields, reduced reliance on chemical fertilizers, and decreased plant stress during droughts. 

Over the next decade, the project would capture 150,000 tons of CO2 equivalent. If achieved, it would constitute the largest biochar initiative in Mexico.

The carbon removal company will deliver high-quality BCR credits by mid-2024 on the Puro.Earth registry. It has two more plants expected to be operational in Latin America by 2025.

Days ago, The Next 150 closed a similar deal with Shell Environmental Products for five years. Shell will buy 22,500 biochar carbon removal credits from the company. 

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

Microsoft’s Carbon Commitment 

This time with Microsoft, the tech giant agreed to purchase 95,000 BCR credits from GBS. Microsoft has been pouring millions of dollars into carbon removal solutions. Last month, the giant bought carbon removal credits from regeneratively managed grasslands. And in 2023, Microsoft partnered with direct air capture companies to remove carbon from the atmosphere. 

RELATED: Microsoft’s $200M Carbon Removal Deal Advances Heirloom’s DAC Solution

Under this current deal, Brian Marrs, Senior Director for Energy and Carbon Removal at Microsoft, commented: 

“Our 6-year purchase agreement and ongoing collaboration with The Next 150 is a step forward towards our ambition to realize our carbon-negative goal by 2030 through a diversified portfolio of carbon removal.”

Globally, the biochar market size is projected to expand to around $633 million by 2032 as shown below. 

As the climate crisis intensifies, The Next 150’s Biochar Carbon Removal (BCR) emerges as a versatile solution for carbon removal. Beyond sequestering carbon, its advantages extend to agriculture, construction, ecosystem health, and community well-being. For businesses seeking effective strategies to combat the climate emergency and meet climate targets, BCR offers a scalable technology.

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Africa Clean Sweeps into $900B Global Carbon Credit Economy

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The value of the global carbon credit market is growing exponentially and has reached a record-breaking high of $909 billion in the last year. Africa is a continent with vast green energy reserves is looking ahead to amplify their share in worldwide carbon trading to fund their development projects.

Nonetheless, Africa is facing several challenges to combat climate change and adapt to green energy transition. The global participants in the United Nations Framework Convention on Climate Change (UNFCCC) have pledged to support developing nations like Africa by providing financial aid, infrastructure support, and technological assistance to enhance climate actions.

The graph shows the projected growth of the African carbon market.

Source: The Rockefeller Foundation

The African continent aims to maximize its carbon credit economy with the of launch the African Carbon Markets Initiative (ACMI). The key objectives are:

boost carbon credit potential,
increase access to clean energy
promote sustainable development
create job opportunities in the country

ACMI has etched a roadmap to dramatically expand Africa’s participation in the voluntary carbon credit market. Each initiative defined above has a budget outline, carbon credit value, and revenue target.

Read more: Unleashing Africa’s Climate Finance with Billions of Carbon Credit Potential (carboncredits.com)

ACMI’s Bold Action Plan for Africa’s Carbon Market

The existing funding for Africa’s energy transition falls significantly short of the necessary amount. Thus, ACMI’s goals are essential to transform the financing landscape of the continent.

ACMI’s prime target is to generate 300 million carbon credits and unlock 6 billion annual revenues by 2030. By 2050, ACMI is targeting over 1.5 billion annual credits, leveraging over $120 billion and supporting over 110 million jobs.

ACMI has collaborated with the Integrity Council for the Voluntary Carbon Market (IC-VCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI) and is exploring the local carbon markets to produce high-integrity carbon credits. Not only this, it’s actively working with some of the leading carbon credit buyers like Standard Chartered, Nando’s, and Exchange Trading Group.

The ACMI also believes that the voluntary carbon market can succeed with people’s trust in carbon credit policies and its purpose to bring a positive impact on the environment and livelihood of Africans.

Several African nations, including Kenya, Malawi, Gabon, Nigeria, and Togo, have volunteered to partner with ACMI to expand carbon credit generation. According to a market survey, these 7 countries collectively have the potential to produce < 300 million metric tons of CO2 equivalents.

To support this move, H.E Yemi Osinbajo, Vice President of Nigeria and ACMI said,

“Carbon markets can deliver tremendous benefits for Nigeria and Africa—creating jobs, driving green investment, and reducing emissions. Nigeria is putting the groundwork in place today so that in subsequent years, carbon credits become a major industry that will benefit our people.” 

Africa’s Path to Prosperity: Harnessing the Green Opportunities 

As discussed before, improving global collaboration on climate change, increasing Africa’s resilience to climate shocks, and employing locals are the pathways to Africa’s prosperity. Its vast renewable energy resources, both solar and wind, and the carbon sinks form the backbone of its economy.

The ACMI focuses on climate projects needed for Africa’s green energy transition. Some of them are reforestation, forest conservation, renewable energy investments, carbon-storing agricultural practices, and direct air capture. Investors receive carbon credits as offsets for their ongoing emissions by funding climate initiatives.

The International Renewable Energy Agency (IRENA) has estimated Africa’s solar photovoltaic (PV) technical potential is at 7,900 GW.

This makes the continent one of the world’s highest generators of solar power. Noteworthy, North Africa receives more than 2,000 hours of sunshine per year.

From reports, we found out that U.S.-based Husk Power has raised $103 million to build at least 1,400 mini-solar grids in rural Africa and Asia. The firm has captured the solar market in Nigeria, hitting the petrol and diesel industry hard.

This move clearly shows that fostering renewable energy in Africa could diminish dependence on fossil fuels and cut CO2 emissions. It could open avenues for economic growth, job opportunities, and poverty alleviation.

Here’s an interesting graph depicting Africa’s dominance in solar power over the rest of the world.

Source: Global Solar Atlas/ The World Bank

It is expected that by 2030, Africa could cut over 2 billion tonnes of carbon dioxide equivalent annually by reducing deforestation, preventing forest degradation, and expanding sustainable forest management. These efforts could further scale up tradable carbon credits.

The continent’s expansive forests- the Congo Basin rainforest, the Guinea-Congo Forest, the East African Coastal Forest, the woodlands, and the Savanna are enormous carbon sinks that have very high carbon credit potential.

In brief, the revenue potential of these green reserves can be realized only if Africa successfully addresses the obstacles hindering its socio-economic development. Green industrialization would thrive with the nation’s strong grip over sustainable financing mechanisms, promising a robust and equitable future.

Last but not least, industrial growth and job boosts are pivotal for Africa’s prosperity. The leaders of the country must ensure access to clean energy and essential services for its people. However, the outcome of these investments and the surge of the African carbon credit market to bring meaningful climate benefits are yet to be witnessed…

Let’s wait and watch!

Must Read: Seafields Unveils 1 Billion Carbon Removal Project Off West Africa (carboncredits.com)

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Shell Retired 20 Million Carbon Offsets in 2023, Weakens 2030 Climate Goal

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Shell retired 20 million tonnes of carbon offsets in 2023, compared with 4.1 million tonnes that were included in its 2022 net carbon intensity. The oil giant will continue its efforts to halve emissions from its operations by 2030, compared with 2016 levels. 

Shell’s Energy Transition Strategy

Carbon dioxide emissions from the energy system comprised almost three-quarters of global greenhouse gas emissions in 2023, per Shell’s report. 

The implementation of stricter government policies could facilitate a reduction in carbon emissions at a pace aligning with the temperature objectives outlined in the Paris Agreement. Even without such policies, estimates say that global demand for fossil fuels would decrease from the current level of about 80% to below 70% by 2040.

Should the world adopt a trajectory towards achieving net zero emissions by 2050, this figure could drop to 50%. This shift will be primarily driven by the increased adoption of electrification and the expansion of renewable energy generation.

In its recently released first Energy Transition Strategy 2024 update, Shell revealed a new ambition to decrease customer emissions resulting from the use of its oil products by 15-20% by 2030 compared to 2021 levels. 

The report also underscores the company’s commitment to achieving net zero emissions across all operations and energy products by 2050 as seen below. 

Shell Net Zero Target

Source: Shell report

Wael Sawan, Shell’s Chief Executive Officer, highlighted the pivotal role of energy in development and emphasized Shell’s dedication to providing both present energy needs and building a low-carbon energy system for the future. The strategy focuses on performance, discipline, and simplification to maximize impact throughout the energy transition while creating value for investors and customers. Sawan further noted that:

“By providing the different kinds of energy the world needs, we believe we are the investment case and the partner of choice through the energy transition.”

Progress in Action

The update outlines Shell’s progress in various areas:

Reduction in Emissions: By the end of 2023, Shell had achieved over 60% of its target to halve emissions from its operations, also known as Scope 1 and 2 emissions, by 2030 compared to 2016 levels. Notably, the company exceeded targets set by signatories to the Oil and Gas Decarbonization Charter agreed at COP28.

RELATED: Oil & Gas Firms to Emit 150B Metric Tons of Carbon Pollution

Methane Emissions Reduction: Shell achieved 0.05% methane emissions intensity in 2023, significantly below its target of 0.2%.
Carbon Intensity Reduction: Shell achieved a 6.3% reduction in the net carbon intensity of energy products sold in 2023 compared to 2016. This is the third consecutive year of hitting this target.

The oil major aims to focus on markets and segments where it can add the most value. These include the expansion of renewable power in key regions such as Australia, Europe, India, and the USA.

Consequently, there will be a lower total growth of power sales by 2030, leading to an update in the net carbon intensity target, now targeting a 15-20% reduction.

To support its transition to a net zero emissions energy business, Shell plans to invest $10-15 billion between 2023 and the end of 2025 in low-carbon energy solutions. 

Last year, Shell invested over $5 billion on these solutions, which is over 23% of its total capital spending. These investments include electric vehicle charging infrastructure, biofuels, renewable power, hydrogen, and carbon capture and storage technologies. 

Shell aims to scale up these technologies to make them more affordable for customers. The energy company also advocates for policies supporting national net zero goals, including carbon pricing.

Shell’s Strategic Shifts and Sustainable Practices

Chart from Reuters

In 2023, Shell’s net carbon intensity accounted for 20 million carbon credits, of which 4 million were linked to energy products. Of the 20 million retired carbon credits, 85% were certified by Verra, 9% by the American Carbon registry, 6% by Gold Standard, and less than 1% via Australian Carbon Credit Units.

Europe’s largest oil major discreetly abandoned its plan to allocate $100 million annually to carbon credits last year. Shell’s plan, by far, is the largest carbon offset program among corporations, announced 6 months after Wael Sawan became the CEO. 

READ MORE: Shell Scraps Its $100M Carbon Offset Plan

Sawan unveiled a significant strategy shift for Shell, indicating the company’s intention to sustain its current level of oil production until 2030. The revised strategy prioritizes cost reduction and enhancing shareholder profits.

Oil majors have faced growing investor pressure to prioritize their most profitable ventures, particularly following periods of robust profits alongside declining returns from renewable energy ventures. 

As the world’s largest liquefied natural gas (LNG) trader, Shell emphasized its belief in gas and LNG’s pivotal role within the energy transition. It remarked that these energy resources are vital alternatives to harmful carbon sources in power plants. 

The oil giant earned a net profit of $28 billion in 2023 amid strong LNG and oil sales.

In conclusion, Shell’s energy transition update reflects its commitment to reducing emissions, investing in low-carbon solutions, and driving sustainable energy practices to achieve its net zero emissions target by 2050.

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