The Environmental Protection Agency (EPA) recently finalized stringent greenhouse gas (GHG) standards for medium and heavy-duty trucks from model years 2027 to 2032. Despite constituting less than 6% of vehicles on the road, these trucks emit 25% of the transportation sector’s greenhouse gases. They release significant levels of air pollutants linked to various health issues. 

The finalized standards, “Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles – Phase 3”, aim to reduce GHG emissions by up to 60% by 2032. This target would prevent 1 billion metric tons of carbon pollution and 55,000 tons of smog pollution. 

The standards are technology-neutral, allowing manufacturers to meet targets through various means such as electric powertrains, and hydrogen fuel cells. 

The finalization of the truck rule follows closely on the heels of the EPA’s recent completion of tailpipe emission standards for light- and medium-duty vehicles covering the same model years. Additionally, the agency had previously strengthened emission limits for nitrogen and particulate matter from trucks in 2023.

EPA’s Push for Cleaner Transportation

Trucks and other heavy-duty vehicles play a crucial role in the United States economy, facilitating the transportation of goods, freight, and providing essential services across various sectors such as industry and transit. However, they also contribute substantially to the nation’s GHG emissions. 

According to the EPA, the transportation sector is the largest contributor to climate-warming pollution in the United States. In 2021, it accounted for 28% of the nation’s carbon footprint. Addressing emissions from this sector is pivotal for the country to fulfill its Paris Agreement commitments. 

These commitments include halving GHG emissions from 2005 levels by 2030 and achieving net zero emissions by 2050. Therefore, efforts to curb transportation emissions play a crucial role in advancing national and global climate goals.

Moreover, the finalized standards will also bring significant societal benefits, including health improvements and fuel cost savings. These savings are estimated to amount to $300 billion by 2055. 

Moreover, the regulations will notably benefit poorer urban communities, which often bear the brunt of pollution from older diesel trucks concentrated around ports and industrial areas.

Industry support for cleaner standards is strong, with major players like Ford, Cummins, BorgWarner, and Eaton endorsing them. Leading manufacturers such as Daimler have ambitious goals for carbon-neutral vehicles, with projections of a significant market share for zero-emission trucks by 2030.

The federal agency said that the implementation of the new standards can significantly increase the adoption of zero-emissions trucks. Thus, there would be a substantial reduction in the industry’s reliance on fossil fuels. 

Electric Revolution: Market Growth and Industry Shifts

Market demand for electric heavy-duty vehicles is growing rapidly, driven by investments from major fleet operators like PepsiCo and Walmart. Currently, there are nearly 13,000 electric medium and heavy-duty trucks on the road, which could increase substantially in the coming years.

The declining costs of electric trucks, coupled with fuel and maintenance savings, make them increasingly attractive economically. By 2030, electric heavy-duty trucks are projected to be cheaper than their diesel counterparts, even without incentives. Additionally, drivers appreciate their quieter and cleaner operation compared to diesel trucks.

According to the EPA, diesel demand within the industry will decrease by 120 billion gallons by 2055. It will also be accompanied by a corresponding decline of 15 billion gallons in gasoline demand. This shift underscores the standards’ pivotal role in driving the transition towards cleaner transportation technologies and reducing GHG emissions.

Truck manufacturers are making significant investments in transitioning to zero-emission vehicles, signaling a shift away from diesel. 

RELATED: The Death of Diesel Gives Birth to ZEVs

Daimler, the largest heavy-duty vehicle manufacturer in the U.S., aims to sell entirely carbon-neutral vehicles by 2039. In July, Daimler projected that zero-emission vehicle sales would make up 40% of their North American market share by 2030. 

Similarly, Navistar and Volvo Trucks have set ambitious goals to sell 50% zero-emission trucks by 2030.

These investments align with the increasing demand for electric heavy-duty vehicles. The four largest private tractor fleets in the nation—PepsiCo, Walmart, Sysco, and US Foods—are heavily investing in electric trucks. Republic Services, a large waste disposal fleet, anticipates that EVs will make up half of its new truck purchases by 2028.

Road Ahead: Impact, Challenges, and Outlook

While electric passenger cars and light trucks initially led the growth in electric vehicles, commercial trucks are rapidly catching up. 

Research from BloombergNEF forecasts another record year for commercial electric truck sales in 2024, and the global electric truck market is expected to nearly quadruple from $17.8 billion in 2022 to $65 billion in 2032.

Overall, The EPA’s final rule provides market certainty, enabling companies to set long-term goals and investment strategies. These regulations align with the Biden administration’s broader climate goals, complementing initiatives like the Clean Car program. By reducing transportation emissions, they contribute to cleaner air, protect public health, and advance sustainability for future generations.

However, the projected additional costs for the heavy-duty industry weren’t welcomed by some US oil majors. Trade groups like The American Petroleum Institute and the American Fuel and Petrochemical Manufacturers hailed the new rule “unlawful EV mandate for heavy trucks”. 

But for President Biden’s National Climate Advisor Ali Zaidi, the finalized GHG standards are a great policy initiative, noting that:

“By tackling pollution from heavy-duty vehicles, we can unlock extraordinary public health, climate, and economic gains.”

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In the dynamic landscape of energy transition, US corporations have embarked on a remarkable journey, ramping up renewable energy initiatives. Since March 2023, corporate initiatives have actively pursued renewables procurement, adding 17 GW of carbon-free generation capacity, per S&P Global Commodity Insights.  

The Rise of Renewable Giants

Renewable capacity additions accounted for 9.1 GW of the total added capacity since March 2023. Texas led the market, representing 43% of the added capacity. Solar energy dominated the signed capacity, comprising 81% of the capacity added in the US.

RELATED: Harnessing the Sun: America’s Solar Snapshot in April 2024

Domestic renewable capacity contracted by US-based corporations reached 67.8 GW by February 2024, with Amazon leading the pack. The tech giant accounts for a quarter of the contracted renewable capacity. 

On a global scale, US corporations continued to make deals across five continents, with Europe leading in deal activity. Spain emerged as the most popular destination, adding over 2.1 GW of additional corporate capacity in the past 12 months. Half of this is attributed to Amazon, primarily in solar energy projects. 

The trend continues to favor utility-scale solar growth, supported by low-cost solar equipment and federal tax credits. Utility-scale solar capacity in development surged by 24% since March 2023, reaching 286 GW, and solar now comprises over 62% of US capacity contracted to American corporations.

Moreover, grid-scale battery storage capacity in development doubled over the last year, reaching nearly 140 GW. Of that, over 50 GW is colocated with wind or solar projects. This integration of battery storage enhances grid flexibility and revenue streams, particularly for intermittent generation sources like solar. 

Over 6 GW of battery capacity is currently paired with wind and solar projects that have contracted with non-utility off-takers.

Fueling Renewables Growth Worldwide

Corporate procurement initiatives expanded to encompass 43 US states, with Texas maintaining its dominance as the leading market, constituting 57% of the aggregate corporate renewable capacity tracked by S&P Global Commodity Insights. 

Notably, six deals of 200 MW or more were inked with Texas projects since March 2023. Among these, Amazon’s 250-MW agreement with Hecate Energy for the 514-MW Outpost Solar Project stands out. The partnership will potentially include 508 MW of paired battery storage capacity. 

California ranked second to Texas in corporate renewable capacity added. Again, this is primarily driven by Amazon’s contracts with AES Corp. for two 500-MW solar projects, totaling 1 GW. 

According to a White House report, there’s an announcements of >100 gigawatts (GW) of solar module manufacturing capacity. This can potentially generate enough solar panels to power about 10% of homes in the U.S., representing over $13 billion in investments.

Solar Capacity Projections Over Time

Outside the US, the technology breakout between wind and solar splits more evenly. Solar accounts for over 50% of the clean energy deals signed internationally.

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

About three-quarters of the tracked corporate renewable capacity contracted internationally by US businesses was concentrated in Europe. Northern Europe particularly stands out due to its top offshore wind speeds, per S&P Global analysis. 

In this region, spanning from the British Isles to the Nordics, US companies accumulated 7.8 GW of corporate-tied renewable energy capacity, with wind accounting for 76% of this total.

Meanwhile, the African continent experienced the second largest year-over-year jump, increasing by 180%. This is primarily driven by an additional 18 MW of tracked capacity subscribed to by US commercial entities in South Africa. 

Australasia, boasting abundant solar and wind resources, rounded out the top three in terms of year-over-year growth, expanding by almost 125%. Despite the substantial growth, the region’s cumulative capacity approached the 2-GW mark as of February 2024.

Amazon’s Renewable Energy Leadership

Among the renewable contracts signed worldwide, Amazon takes the top spot. The tech giant is the world’s largest corporate purchaser of renewable energy for the 4th year in a row.

In 2023, Amazon made significant strides in its commitment to renewable energy by investing in over 100 new solar and wind energy projects. 

With over 500 wind and solar projects globally, Amazon could generate more than 77,000 gigawatt-hours (GWh) of clean energy annually once these projects become operational. This translates to enough clean energy to power around 7.2 million U.S. homes every year.

These projects are propelling Amazon closer to its goal of sourcing 100% of the electricity for its operations from renewable energy sources by 2025. The renewable energy generated by these projects is already being utilized to power various Amazon facilities, including data centers, fulfillment centers, physical stores, and corporate offices. Moreover, these projects contribute to providing clean power to local communities where they operate.

The impact of Amazon’s solar and wind farms extends beyond environmental benefits. They have also catalyzed over $12 billion in estimated economic investment globally from 2014 through 2022. 

Amazon Net Zero Roadmap

Source: Amazon 2022 Sustainability Report

All these renewables initiatives are part of the retailer’s decarbonization strategy. The company also founded the The Climate Pledge in 2019, which lays out its net zero commitments. Amazon aims to reach net zero by 2040, 10 years ahead of the 2050 goal set by the Paris Agreement.

As the world marches towards a sustainable future, US corporations stand at the forefront, driving change through ambitious renewable energy procurement initiatives. Under Amazon’s renewable leadership, they continue to shape the energy landscape and inspire a global shift towards a sustainable future.

READ MORE: Amazon’s Carbon Emissions Take a Green Turn with Renewables

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As investors and environmental enthusiasts scout for tangible opportunities in the green revolution, silver emerges not merely as a precious metal but as a pivotal element in the quest for a net-zero future. 

With its price on a notable ascent touching $27 per ounce, silver’s inherent value is being redefined, transcending its traditional allure to become a cornerstone in sustainable technology.

Chart from Trading View

Silver, with its dual role as an industrial workhorse and a financial asset, deserves a closer look from investors, policymakers, and industry stakeholders

Silver’s Ascending Value in the Green Era

Silver’s price trajectory is more than a market anomaly; it’s a reflection of its significant role in modern technology and sustainable initiatives. As industries pivot towards eco-friendly solutions, silver’s conductive and reflective properties are in unprecedented demand, especially in sectors crucial for reducing carbon footprints. 

This metal, once confined to jewelry and currency, is now a linchpin in solar panels and electric vehicles, illustrating a direct correlation between its market value and its environmental significance.

Over 50% of silver serves industrial needs, powering sectors from electronics to metalworking.

More than half of silver’s demand is driven by sectors critical to the low-carbon transition. It’s a testament to silver’s versatility and indispensability, echoing its historical role as a currency foundation but now reimagined as a cornerstone of modern technology.

The legacy of silver, from ancient empires to contemporary economies, underscores a metal that has continually adapted and thrived.

The Metal Driving Us Toward Net Zero

The surge in solar installations and electric vehicle production is not just a trend; it’s also a strong call for increased silver demand. The metal’s unmatched conductivity and application in photovoltaic cells position it as a key player in the transition to renewable energy. 

Solar panels that harness the sun’s power heavily rely on silver’s conductivity, making it a key player in renewable energy’s expansion. Silver holds a unique position in the realm of metals due to its exceptionally low electrical resistance at standard temperatures. This characteristic makes it unrivaled by substitutes, as they cannot match its energy output per panel.

Similarly, as the automotive industry accelerates toward electric vehicles, silver’s role in electrical contacts and conductors becomes increasingly critical.

RELATED: New Monthly EV Sales Record to Kickstart 2024

This intrinsic link between silver and green technology underscores not just an environmental imperative but a burgeoning market trend. Others consider silver to be the new oil, only if the world has enough of it. 

Supply Chain Scrutiny: The Geopolitical Dance of Silver Production

The spotlight on Latin America’s Silver CAMP—Chile, Argentina, Mexico, and Peru—reveals a narrative rich in opportunity and fraught with challenges. These nations, pivotal to silver’s global supply, explore a complex geopolitical landscape where policy shifts and operational risks are huge.

The impending start-up of Guatemala’s Escobal mine adds another layer to this intricate story. It promises to reshape the supply dynamics and spotlight the importance of sustainable mining practices.

According to Katusa Research, Mexico is the largest producer of silver in the world by a comfortable margin, thanks to its generous healthy reserves and low costs of production.

China is also a major player in this space, having maintained steady production of roughly 3,500 tonnes a year for the past decade.

University College London (UCL) researchers are exploring the use of silver in carbon capture and storage (CCS) technologies, aiming to make CCS more cost-effective by utilizing silver’s high-temperature stability in innovative membranes that separate carbon dioxide from other gases. This approach could be crucial for industries like steel and cement, which are slower to transition to renewable energy.

However, the reliance on CCS and its potential to delay immediate emission reduction efforts raises concerns, with some experts cautioning against viewing CCS as a definitive solution to climate change. UCL’s commitment to net-zero targets by 2030 highlights the urgency of reducing emissions alongside developing removal technologies.

Mining for a Greener Tomorrow

While we champion silver’s role in sustainability, it’s crucial to scrutinize its source. 

Silver mining, like any extractive industry, poses environmental challenges. However, the industry is on a transformative journey, adopting more sustainable and less invasive mining techniques. 

Understanding where and how silver is extracted is vital, as responsible sourcing becomes synonymous with environmental stewardship. 

Latin American silver miners are advancing in decarbonizing their operations, aligning with net zero commitments by 2050. However, emissions per ounce are increasing due to lower ore grades. 

For example, despite a temporary rise in emissions in 2020, attributed to COVID-19 impacts, the industry is adopting automation and alternative energy to reduce its carbon pollution.

Political factors and energy reforms, particularly in Mexico, pose challenges to these efforts. While larger firms lead in emission reductions, smaller silver miners are also making significant strides, adapting to their unique operational scales and contexts.

A Sterling Opportunity?

Investors are increasingly aligning their portfolios with their values, and silver could offer a compelling narrative that marries financial growth with ecological responsibility. 

By investing in silver, one is not just betting on a metal’s value but could be supporting the infrastructural backbone of the net zero movement. 

Silver’s story is evolving, from a symbol of wealth to a beacon of sustainability. Its rising demand and price are representative of a broader narrative, where financial markets and environmental goals are increasingly intertwined.

For investors, industry stakeholders, and environmental advocates, silver represents a multifaceted opportunity: a chance to drive and benefit from the monumental shift towards a cleaner, greener, and more sustainable world. 

Silver’s journey from a symbol of wealth to a driver of sustainability underscores its evolving role in shaping our net zero future. 

The post Silver’s Crucial Role in Achieving a Net Zero World appeared first on Carbon Credits.

The global demand for lithium metal batteries is surging, yet production falls short of meeting the need, hindering industry growth. According to Benchmark’s Solid-State and Lithium Metal Forecast, the sector faces challenges in sourcing adequate lithium metal for battery production, despite its high capacity potential.

In 2024, if all suitable lithium metal produced were used for batteries, it could support 5 to 10 gigawatt-hours (GWh) of cell production. However, much of the lithium metal is diverted to other industries, leading to a supply deficit this year. From almost 10 GWh in deficit in 2024, jumping to around 60 GWh by 2026.

Chinese Dominance and Global Ambitions

China dominates global lithium metal production, accounting for over 90% of capacity in 2023. This dominance is poised to continue, with China aiming to double its capacity within the next 3 to 5 years.

Currently, some companies worldwide are scaling back output and spending due to improved supply prospects and slowing demand from EVs. Yet, Chinese firms are taking a different approach. 

RELATED: Lithium Prices and The Insights into the EV Market’s Pulse

China’s leading lithium companies, Tianqi Lithium Corp. and Ganfeng Lithium Group Co., are undeterred by recent profit declines and aim to expand their market presence. Despite sharp drops in net income in 2023 due to plummeting prices, both companies are focused on acquiring global lithium reserves and increasing production capacity. They believe in the long-term potential of rising demand for lithium, looking beyond current challenges.

Tianqi seeks partners to explore high-quality lithium sources, accelerating work at its Yajiang mining project in Sichuan province. Meanwhile, Ganfeng plans to develop low-cost resources like lithium derived from brine and expand processing facilities in China and Argentina.

These companies’ optimism aligns with other Chinese miners like CMOC Group Ltd. and Zijin Mining Group Co. They are also eyeing opportunities in battery materials amid signs of a potential price recovery.

However, this total capacity may not meet the requirements of next-generation battery technologies.

Growing Demand Amid Technical Hurdles

The deficit arises as demand for lithium metal batteries grows rapidly, exceeding 10 GWh by 2026. Developers are transitioning from cell development to pilot production, driving up demand for lithium metal.

RELEVANT: Lithium’s Dynamic Future: Accelerating Demand and Construction Surge in US and Canada

The precursor to lithium metal, lithium chloride, is sourced directly from brine or converted from lithium carbonate. However, most brine resources have unsuitable impurity profiles, and converting lithium carbonate incurs significant capital expense.

Next-generation lithium metal batteries require thinner lithium metal foils for the anode, challenging traditional production processes. Overcoming this technical barrier is crucial for industry growth, with companies exploring novel approaches to address this challenge.

Nevertheless, trading of the metal in CME Group Inc. is experiencing a significant surge, drawing increased attention from funds amid declining battery metal prices.

The contract has seen open interest reach a record high of 24,328 contracts in the first quarter, extending to September 2025. This uptick in open interest indicates a notable increase in liquidity within the contract. This further suggests a maturing market for the lithium industry.

Trading Surge Reveals Market Resilience

The growth in open interest follows a robust year in 2023, primarily driven by arbitrage trading between China and the US. Notably, China introduced its lithium carbonate contract on the Guangzhou Futures Exchange in July last year. In turn, this further contributes to the trading activity. 

This development underscores the growing importance of lithium derivatives markets as key tools for industry participants to manage price risks.

The rise in liquidity in CME’s lithium hydroxide contract is a positive sign for an industry grappling with challenges. Prices of lithium have declined by over 80% from their record high in November 2022. This drastic drop in prices has been attributed to shifting market dynamics, swaying between fears of shortages and the emergence of surplus inventories.

 

Despite the challenges facing the industry, the surge in open interest offers assurance to funds and financial participants. It provides them with the confidence that they can easily trade the contract, enabling them to enter and exit positions as needed, even in the face of adverse price movements. 

Additionally, more Asia-based funds are showing interest in trading the CME contract this year, reflecting the growing appeal of lithium as an investment opportunity.

Moreover, the current market conditions, with lithium prices in contango (futures prices higher than spot prices), present lucrative opportunities for funds. 

READ MORE: Why Lithium Prices are Plunging and What to Expect

The contango structure allows traders to profit by buying futures contracts and selling them at a higher price in the future. This has attracted the attention of funds looking to diversify their portfolios and capitalize on the volatility in commodity markets.

The increasing liquidity and trading activity in CME’s lithium hydroxide futures contract signal a growing interest in lithium derivatives. With trading volume on pace to surpass last year’s record, lithium futures are attracting the attention of investors seeking exposure to the rapidly evolving battery materials sector. 

The post Key Challenges and Opportunities in Global Lithium Metal Market appeared first on Carbon Credits.