With the global energy transition looming large, many have been setting their sights on materials critical to the energy transition, such as copper, lithium, or uranium.

Nickel is yet another mineral on that list, albeit one that seems to have largely flown under most investors’ radars thus far.

It’s understandable why that’s been the case – after all, the primary use for mined nickel has long been industrial, with over three-quarters of global nickel demand being for things like alloy production or electroplating.

However, there’s one avenue of “green” demand for nickel that’s been slowly yet steadily driving up consumption – and that’s electric vehicle (EV) batteries.

Last year, the average battery EV sold contained 25.3 kilograms of nickel – and that number has been going up year over year

Nickel is one of the key components of the lithium-ion batteries that power EVs worldwide, thanks to its unique physical and chemical properties.

In order to be used in an electric vehicle, nickel must first be refined to extremely high purities, creating what’s known as “battery grade” nickel. Following this, it then needs to be dissolved in sulphuric acid to create nickel sulphate, which can then be used to produce battery cathodes.

Nickel’s high energy density, which allows it to hold more charge for less weight, makes high-nickel battery chemistries more desirable in EV batteries. While the first iterations of the lithium-ion battery used equal proportions of nickel with manganese and cobalt, modern ones use as much nickel as manganese and cobalt combined.

And as technology continues to progress, it’s expected that the ratio will rise to as much as 80% nickel, or even more.

That’s why nickel is now on the critical minerals list of several countries including the US, the EU, and Japan.

RELATED: Top 3 Nickel Stocks for 2024

The Lights Are Green for Nickel.

EV manufacturers are adding more and more nickel to their batteries each year in order to increase the efficiency and range of their vehicles.

EVs sold in 2023 contained 8% more nickel, on average, than those sold a year previous

Combine that with the fact that EV sales are expected to continue growing at a breakneck pace, and what you end up with is very healthy outlook for long-term nickel demand.

Below you can see two charts created by the International Energy Agency. The one on the left forecasts nickel demand growth out to 2050 based on currently existing climate pledges, while the one on the right shows the same but in a more aggressive net zero scenario:

You can see that, regardless of which scenario we consider, nickel demand is expected to more than double over the next decade – the only question is how fast we get there.

Even in the conservative case where no more climate pledges are made in the coming years, as in the chart on the left, EV and cleantech demand for nickel is still expected to massively drive nickel’s demand growth.

Last year, total nickel demand amounted to 3.1 million tonnes, of which 478,000 came from EVs and cleantech. This latter portion is expected to grow to 2 million tonnes of nickel demand by 2030 and 3.4 million tonnes by 2040 in the base case – and it could easily be more, if governments around the world pursue additional climate targets

While all scenarios do see nickel consumption plateauing and falling off slightly towards the tail end of 2050 due to forecast lower demand for nickel-rich battery chemistries, there’s still a 9x increase in nickel demand for EV batteries and other cleantech even in the conservative case.

Simply put, the future for nickel looks tremendous.

However, the recent price performance of nickel seems to tell a different story:

And that’s because of the other half of the picture: nickel supply.

But There’s a Supply Jam . . .

Despite how strong the demand outlook for nickel looks, there’s no escaping the fact that right now, supply far outstrips demand.

And there’s exactly one factor we can point to for this: Indonesia.

In the past ten years, Indonesia has accelerated the pace of nickel mine development domestically, thanks to heavy Chinese investment.

In 2014, Indonesia produced just 7% of the world’s nickel, with just two nickel smelters. 10 years later in 2023, Indonesia now accounts for just over 50% of global production, with 43 operational smelters and another 52 on the way

Indonesia received $7.3 billion in foreign investment from China’s Belt and Road Initiative in 2023, the largest of any participating country. 90% of the nickel smelters in Indonesia were built by Chinese companies, and most of the mines are Chinese owned as well.

Thanks to the extensive Chinese involvement, the lower labor costs and environmental standards for nickel mines in Indonesia have also led to lower production costs. Nickel from Indonesian mines is cheaper to produce than it is on other countries like Australia or Canada.

This breakneck growth of Indonesian production, during a weak price environment where other producers have scaled back, has contributed to Indonesia’s rise to prominence as the top global nickel producer.

It’s expected that the nickel market will see a surplus of 36,000 tonnes this year, according to a recent report from Macquarie. And it’s unlikely that the nickel market will balance out until after 2025.

Further Down the Road, the Outlook Looks Rosy

Despite how the supply and demand balance looks right now, however, it’s not expected to stay that way as we near the end of the decade.

As the chart above shows, based on current announced mine supply, the nickel market is expected to enter a supply deficit shortly after 2025 – and this shortfall is expected to widen considerably in the decade following, even in the conservative scenario (the solid line).

In other words, even though the current low nickel price environment is discouraging investment, it’ll also create more opportunities down the road thanks to the eventual supply-demand gap that will widen due to the current lack of interest in nickel mining.

Furthermore, as you might recall, in order to be used in EV batteries nickel needs to be further processed into nickel sulphate, which is something not all raw nickel refineries are built to do.

The supply shortfall for nickel sulphate is expected to see an even wider gap than for mined nickel. That said, processing facilities for nickel sulphate can be built on the order of 18-24 months – much quicker than a mine, which is often a years-long process that can get bogged down in studies and permitting.

Even so, the sheer amount of additional nickel sulphate supply required represents yet another opportunity in the nickel markets.

In the near term, it’s likely that nickel prices will continue to stay weak as supply continues to outpace demand. As we near the end of the decade and the push towards net zero continues to accelerate, however, the projected supply-demand gap might just leave the nickel market in significantly different shape than how it looks now.

The post The Ultimate Guide to Nickel appeared first on Carbon Credits.

President Joe Biden’s decision to withdraw presidential election this Sunday marks a significant turn in American politics. During his tenure, the country has seen the introduction, establishment, and amendment of numerous climate policies involving massive investments. The past four years under the Biden administration have been eventful from a climate change perspective. Let’s refresh our memory on the climate agendas rolled out by this government.

Key Highlights of Biden’s Climate Change Plan

“That’s why, when people talk about climate, I think jobs.  Within our climate response lies an extraordinary engine of job creation and economic opportunity ready to be fired up.  That’s why I’ve proposed a huge investment in American infrastructure and American innovation to tap the economic opportunity that climate change presents our workers and our communities, especially those too often that have — left out and left behind.”

-Remarks by President Biden at the Virtual Leaders Summit on Climate Opening Session (source: The White House)

Rejoined the Paris Agreement

From day one, Biden initiated the process for the U.S. to rejoin the Paris Agreement. The U.S. officially re-entered the agreement shortly after. Biden issued an executive order on tackling the “Climate Crisis at Home and Abroad”, creating the position of Special Presidential Envoy for Climate and announcing several high-level climate summits. Later, he set a target to reduce carbon emissions by at least 50% below 2005 levels by 2030. That was a historic announcement!

LATEST: Is Biden’s $8 Billion American Climate Corps Budget Worth It?

Signed the Inflation Reduction Act

He signed the Inflation Reduction Act in August 2022. Notably, it’s one of the most critical climate agendas of America. It includes significant investments in climate protection, such as tax credits for households to reduce energy costs, funding for clean energy production, and incentives to lower carbon emissions. The administration concentrated on creating tax credit guidelines and initiating programs to execute its various clean energy measures. To achieve excellence in climate action, they needed to maintain prompt and fair implementation of the legislation while also filling policy gaps.

 Climate-Smart Stimulus Package to Revive from COVID-19.

Biden proposed a $2 trillion climate-smart stimulus package to boost the domestic economy, create jobs, and expand America’s clean energy sector. It surpassed the investments made in the 2009 economic recovery package. He prioritized modernizing the electricity grid, electrifying schools, and transit buses, enhancing the transportation system, upgrading public schools, boosting industrial innovation, and restoring trees to the landscape.

Biden committed to ensuring that at least 40% of the funding benefits go to the less-privileged communities. These investments targeted both short-term and long-term emissions-reduction goals. They installed solar, wind, heat pumps, and electric vehicles to cut costs. At the same time, they invested in future technologies which included the heavy emission sectors like steel, geothermal systems, and clean hydrogen.

READ MORE: US EPA to Invest $20B in Climate and Clean Energy Projects for Underserved Communities

Curb Hydrofluorocarbons (HFCs) and Methane Action Plan

The President ratified the Kigali Amendment to reduce hydrofluorocarbons (HFCs) in September 2022. The EPA issued regulations to phase down HFCs under the American Innovation and Manufacturing Act of 2020.

In November 2022, the Biden administration updated the Methane Action Plan with 50 measures supported by $20 billion from various laws. The Inflation Reduction Act introduced a methane emissions fee for oil and gas facilities, starting in 2024 and increasing to $1,500 per metric ton by 2026. At the 2023 UN climate summit (COP28), the administration announced strict standards to reduce methane emissions from the oil and gas sector. On January 12, 2024, the EPA proposed rules to enforce this fee.

Biden helped launch the Global Methane Pledge at the 2021 UN Climate Summit (COP26). By December 2023, 155 countries had committed to cutting their methane emissions by at least 30% by 2030.

source: World Resources Institute

Biden’s Milestones for the Energy Sector

Offshore wind was a crucial part of Biden’s promise to combat climate change that would generate jobs and enhance the economy. Biden approved the first U.S. offshore wind project and set new standards to cut methane emissions, which will prevent the equivalent of 1.5 billion tons of CO2. The American Clean Power Association (ACP) projected around 14 GW of offshore wind capacity along U.S. coastlines by 2030. This fell short of the 30 GW goal set by President Joe Biden’s administration in 2021 to boost the domestic energy industry.

MORE DETAILS: Transforming the American Clean Energy Landscape Under Biden’s Era

Biden and the EPA introduced national carbon pollution standards, mandating a 90% reduction in emissions from coal and new gas plants. They also modernized the federal environmental review process under the National Environmental Policy Act (NEPA). The rule introduces a new permit for efficiencies from the Fiscal Responsibility Act of 2023.

Biden also transformed the energy-efficiency standards for residential water heaters. These standards cut energy waste and carbon pollution. He envisioned that this would save nearly $1 trillion over 30 years and reduce utility bills by $100 or more per year for the average family.

Image: EIA projects renewables share of the U.S. electricity generation mix will double by 2050

Finally, Biden signed the ADVANCE Act in July this year to support advanced nuclear technologies and the continued operation of existing nuclear plants. Recently, President Biden signed The Prohibiting Russian Uranium Imports Act to strengthen America’s energy and economic security, and eventually eliminate reliance on Russia for nuclear power.

 MUST READ: U.S. DOE Aims to Expand Domestic Uranium Supply with US$2.7B RFP

Investments in CDR projects

On May 19, 2022, the U.S. Department of Energy (DOE) announced a $3.5 billion funding opportunity from the Bipartisan Infrastructure Law to capture and store CO2 directly from the air. The Regional Direct Air Capture Hubs program supported four large-scale hubs with carbon dioxide removal (CDR) projects. These hubs created jobs, engaged communities, and advanced environmental justice. Alongside other decarbonization efforts, this technology played a key role in achieving President Biden’s net-zero economy goal by 2050.

KNOW HOW: $100B Carbon Market Could Drive $700B Annual Investments in Projects

Curbing Transport Emissions

During his early tenure in 2021, Biden signed the bipartisan Infrastructure Act, allocating over $100 billion for rail, mass transit, charging stations, and zero-emission ferries and buses.

On March 29, 2024, the Biden-Harris Administration finalized the historic greenhouse gas standards ever for heavy-duty vehicles. This action protects public health, addresses the climate crisis, and keeps the American economy moving. The EPA adopted new emission rules for cars, aiming to cut 50% of CO2 emissions by 2032 and mitigate 7 billion tons of CO2 in the next 30 years. This rule can eliminate more GHG emissions than any other climate rule in U.S. history.

This year EPA also issued carbon emissions limits for heavy trucks, estimating a prevention of 1 billion tons of CO2 emissions. It introduced 3,400 electric school buses, and Biden released $1.7 billion for electric vehicle manufacturing. Additionally, the government released new standards for biofuels.

LATEST: New EPA GHG Standards for Trucks to Cut 60% Emissions by 2032

Despite global challenges, the U.S. has set strong examples in tackling climate change. President Joe Biden’s groundbreaking initiatives have significantly transformed the climate landscape. As America approaches a new presidential term, we hope the new leader continues to take responsible actions and drive further progress in combating climate change.

FURTHER READING: Multi-Billion Dollar U.S. Clean Energy Tax Credits Are Here

The post Top Achievements in Joe Biden’s Climate Agenda for America appeared first on Carbon Credits.

For more than two decades, Nestlé through its “Sustainable Agriculture Initiative” (SAIN) has empowered farmers to adopt sustainable practices in coffee production. This time, the company is enhancing its Arabica variety supply chain to mitigate the carbon footprint of coffee production. So, what’s brewing in here? Let’s find out.

Introducing Arabica Star 4: Nestlé’s Sustainable and High-Yielding Coffee Variety

Nestlé has developed a new high-yielding Arabica coffee variety called Star 4 to strengthen its coffee supply chain. As global coffee demand is growing significantly, irrespective of climate changes, Nestlé has innovated its coffee variety with a reduced carbon footprint. The news release highlighted that the company was very concerned about the shrinking of Arabica cultivation areas due to climate change. Thus, this prompted Nestlé to leverage its agricultural expertise to overcome environmental concerns while ensuring a steady supply chain.

Nestlé’s team of scientists, technologists, and agronomists hail that the Star 4 is a “novel high-yielding Arabica variety” selected in Brazil. It is highly resilient and has a unique Brazilian coffee flavor.

Jeroen Dijkman, Head of Nestlé’s Institute of Agricultural Sciences remarked,

 “Ensuring resilient coffee supply chains is crucial for future generations to enjoy exceptional coffee. Star 4, with its larger bean size and resistance to coffee leaf rust, demonstrates significantly higher yields compared to Brazil’s predominant local varieties, thereby reducing its environmental footprint.”

Notably, Marcelo Burity, Nestlé’s Head of Green Coffee Development has emphasized the importance of optimizing farming practices to minimize greenhouse gas (GHG) emissions associated with coffee cultivation. He added,

“Optimizing cultivation practices remains vital as they are the primary factor contributing to the environmental impact of a cup of coffee.”

MUST READ: Nestlé Unveils New Initiatives to Cut Cocoa Supply Emissions 

Planting More Shade Trees

Various initiatives focus on integrating shade trees within farming systems. This approach particularly benefits crops like cocoa and coffee, which thrive under shaded conditions. By encouraging farmers to plant more shade trees, the initiative aims to shield these crops from heat stress and other environmental threats such as heavy rainfall. Moreover, shade trees play a pivotal role in improving water management, enhancing biodiversity, and sequestering carbon dioxide from the atmosphere, thus contributing significantly to emission reduction efforts.

Boosting Soil Health

A critical component of sustainable agriculture involves improving soil health to maximize land productivity. Nestlé has adopted many eco-friendly practices such as no-tillage, cover cropping, crop rotation, and organic fertilizers. Additionally, composting agricultural waste essentially fosters a robust carbon cycle for sustainable farming practices.

Agroforestry in Border Areas

Another important criterion is optimizing the surrounding areas of the main farmland. Some such practices involve restoring forests and peatlands and implementing strategic projects like windbreaks. These efforts mitigate carbon emissions and protect the biodiversity of that agricultural land.

Some other significant technological advancements to enhance cocoa and coffee supply chains and restore carbon sinks involve:

farm-level assessments
sustainability certifications
satellite monitoring systems
100% renewable energy

Nestlé’s Emission Reduction Strategies

According to its current sustainability report, Nestlé achieved a 13.58% GHG emissions reduction in 2023 as compared to its 2018 baseline.

source: Nestlé

Nestlé has pledged to curb their emissions by 20% by 2025. By 2050, the organization aims to achieve net zero emissions by implementing regenerative agricultural practices. Furthermore, it is transitioning its logistics and operations to zero emissions. This ensures all facets of the organization contribute to environmental sustainability.

It will use high-quality natural climate solutions, benefiting communities and ecosystems to offset residual emissions. This approach balances environmental impact with societal well-being, supporting a sustainable future for all.

source: Nestlé

DID YOU KNOW?

Here’s a cool fact! Nestlé clinched the top spot for “coffee sustainability” in the 2023 Coffee Brew Index, as highlighted in the latest Coffee Barometer report. The accolade reflects Nestlé’s robust coffee sourcing strategy, which integrates social, environmental, and economic dimensions.

David Rennie, Head of Coffee Brands at Nestlé, emphasized,

“This recognition underscores our ongoing dedication to responsible coffee sourcing. Through initiatives like the Nescafé Plan and Nespresso AAA Sustainable Quality Program, we collaborate closely with coffee farmers to promote sustainable and inclusive farming practices. Our commitment remains steadfast in innovating and advancing coffee farming for the better.”

With these science-backed coffee varieties and a strategic focus on sustainability, Nestlé is sure to achieve its net zero goals. Until then, let’s wait for the moment to savor a fresh cuppa as it hits the stores.

KNOW MORE: Nestlé and Fonterra to Develop NZ’s First Net Zero Dairy Farm 

The post Brew Green: Nestlé Boosts Arabica Supply Chain to Lower Carbon Footprint appeared first on Carbon Credits.

In recent developments within the global nickel market, the trajectory of prices has undergone a significant downturn. Consequently, nickel prices have plummeted from the highs recorded in recent years, primarily driven by a global oversupply. 

This has led BHP Group to suspend its operations in Western Australia, reflecting the economic challenges within the industry.

BHP’s Bold Move

BHP Group Ltd., one of the largest mining companies, announced the suspension of its Nickel West operations and West Musgrave nickel project in Western Australia. This decision was attributed to the inability to overcome economic challenges posed by the global oversupply of nickel. 

From October, BHP will halt mining and processing operations at several key sites, including the Kwinana refinery, Kalgoorlie smelter, and Mt. Keith and Leinster mines. The development of West Musgrave will also be suspended as the company begins its care and maintenance program.

Geraldine Slattery, BHP’s Australia president, cited substantial economic challenges driven by the oversupply of nickel as the reason for the suspension. BHP has flagged an underlying EBITDA loss of approximately $300 million for its Australian nickel operations for the financial year ending June 30, 2024.

Despite the suspension, BHP plans to continue supporting its workforce and local communities during the transition. The company will invest about $300 million annually in its Western Australian nickel facilities, enabling a potential restart of operations. BHP will review its decision to halt operations by February 2027.

INTERESTING NEWS: Carbon Emissions Averted? BHP and Anglo-American Deal Off the Table

Australia’s resources minister, Madeleine King, expressed disappointment over BHP’s decision, highlighting its substantial impact on the workers and communities of Kwinana, Kambalda, and Kalgoorlie. Western Australian Premier Roger Cook echoed these sentiments, noting that the move would affect thousands of workers. Cook emphasized the importance of diversifying the economy to build resilience in the resources sector.

The Rapid Growth Shaking Up the Nickel Market

The rapid expansion of Indonesia’s nickel industry has led to a market oversupply, resulting in significant price declines from the highs of 2022 and 2023. As of July 10, the London Metal Exchange (LME) cash price for nickel was $16,606.41 per metric ton, a 46.4% drop from the 2023 high of $30,958/t on January 3, according to S&P Global Market Intelligence data.

In 2022, nickel prices peaked at $48,241/t on March 10 due to a historic short squeeze and remained volatile, often exceeding $30,000/t. The current price is down 65.6% from the 2022 high.

The primary nickel surplus limits the potential for price increases, with LME stocks reaching a two-year high on May 29 as supply growth, particularly from Indonesia and China, continues to outpace demand, according to S&P Global Commodity Insights analyst Anna Duquiatan. While nickel prices rose earlier this year due to protests in New Caledonia and US and UK sanctions on Russian metal, they have since decreased but remain higher than at the start of the year.

Seizing Opportunity in a Challenging Market

While expected, BHP’s decision to suspend operations at its nickel assets in Western Australia is a significant blow to the local mining industry. This suspension will result in 1,600 employees being either redeployed or offered redundancies. Although nickel exploration and development will continue, Australia’s nickel mining industry is effectively coming to a halt.

While the market remains in oversupply, some industry players see opportunities amid the challenges. 

The adversity presents an opportunity for Lunnon Metals, which is eyeing the mothballed Kambalda nickel concentrator.

With BHP’s suspension of Nickel West operations and the West Musgrave project amid the global nickel downturn, Lunnon is now exploring other processing options for its Baker and Foster nickel deposits. The company is considering a larger role in the district.

Lunnon sees potential in capitalizing on the mothballed Kambalda nickel concentrator by “either purchasing, leasing or otherwise making use of” the plant and its associated infrastructure and utilities. Additionally, the company envisions the possibility of jointly or solely building a new concentrator in the future to “meet the needs of various local stakeholders in Kambalda or further afield.”

Despite the challenging sentiment surrounding nickel, Lunnon Metals remains optimistic about the future of the commodity in Australia and is charting a path forward. Market analysts also share the same sentiment.

The post Nickel Market in Turmoil: BHP to Halt Operations Due to Price Plunge appeared first on Carbon Credits.