Copper Prices: Key Factors, Trends, and Outlook

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Copper’s recent price surge reflects a complex interplay of market forces, from supply disruptions to the push for renewable energy. We explore the factors pushing copper prices to near-record highs and the implications for investors amid the evolving economic landscape.

In recent times, the copper market has witnessed significant shifts, largely influenced by key events. The Cobre Panama mine closure, a major global copper producer, impacted expectations from surplus to deficit. This resulted in an upward trajectory of copper prices. 

In March, Chinese smelters decreased output amid a concentrate shortage, which pushed prices even higher.

Additionally, declining inventories of copper in major stockpiles, such as the Shanghai Futures Exchange (ShFE) and London Metal Exchange (LME), have contributed to upward pressure on copper prices. This trend stimulates demand for scrap copper as an alternative secondary source.

These factors, alongside speculative buying and supply constraints, have propelled copper prices to near-record highs, instilling investor confidence in the sector’s future.

Currently, copper prices remain above $4 per pound, reaching near a 15-month high last month. This indicates investor confidence in the copper market’s prospects.

China’s dominance in copper consumption further amplifies its role in shaping global demand dynamics and influencing copper prices. In 2022, China consumed about 55% of the world’s refined copper, highlighting its significant impact on copper market trends.

Copper’s Role in the Energy Transition

Beyond its pricing dynamics, copper’s significance extends to its role as a vital indicator of global economic health and catalyst of decarbonization efforts. 

Copper’s crucial role in the transition to net zero emissions is increasingly recognized, particularly in renewable energy technologies and electric vehicles. However, projections indicate a potential supply-demand gap, calling for substantial investments in production and recycling to meet growing demand and achieve sustainability goals.

Key industries driving copper consumption include equipment manufacturing, construction, infrastructure, and emerging sectors such as EVs and green technologies. With the growing adoption of EVs, solar panels, and other clean energy technologies, copper demand is projected to increase substantially in the coming years. It could double by 2035.

In light of ambitious net zero targets set for 2035, industry estimates suggest that annual copper demand may need to escalate twofold to reach 50 million metric tons. Even more conservative projections anticipate a 1/3 surge in demand over the coming decade, propelled by significant investments in decarbonization initiatives from both public and private entities.

Challenges and Opportunities Ahead

Meeting the escalating demand for copper poses challenges, including declining ore grades and environmental concerns surrounding mining activities. Addressing these challenges requires significant investments, potentially driving copper prices to new highs. Analysts foresee continued price growth in the coming years, fueled by supply-demand imbalances and increasing demand from the green energy sector.

Uncertainties surrounding China’s economic recovery and the US Federal Reserve’s monetary policy decisions add complexity to future copper price trajectories. However, analysts remain optimistic about copper’s long-term prospects, driven by the energy transition and increasing demand from sectors such as electric vehicles and renewable power.

As nations vie for access to limited future copper supplies, securing domestic or friendly sourcing and refining capabilities emerges as a strategic imperative. Strategic investments in copper production and recycling are deemed crucial to meet growing demand and achieve net zero emissions goals amidst the expanding renewable energy infrastructure and electric vehicle adoption.

In conclusion, copper’s price trends, supply chain dynamics, and demand drivers underscore its significance as an essential commodity in various industries. Understanding these intricate market dynamics is crucial for informed decision-making and navigating the complexities of the copper market.

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Who Leads the Data Center Surge in the US? S&P Global Report

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As the demand for data centers surges, several regions in the U.S. are emerging as significant markets, alongside a notable increase in renewable energy projects supporting this growth, according to S&P Global Market Intelligence data.

Northern Virginia remains the leading data center market in the US and is second only to Beijing globally. It is set to retain its top position in North America, with 280 data centers in development, adding to the more than 300 already operational in the state. 

The region’s data center power consumption is expected to exceed 10 GW by 2028. Dallas and Phoenix are ranked second and third in projected data center demand by 2028. Each of them anticipate to add over 3 GW of capacity in the next five years.

Several other regions are becoming hot spots for data center development, with ten markets projected to surpass 1 GW of demand by 2028. Thanks to the growing presence of tech giants like Google and Meta, Omaha, Nebraska, currently ranks second in operating data center power demand.

In Texas, data centers will benefit from an extensive array of renewable energy projects. The state has nearly 150 GW of wind, solar, and battery storage capacity in development—the largest pipeline in the US.

Over 63 GW of renewables are being developed in California. Thus, the state’s interconnection queue has expanded to 395 GW of renewable capacity.

The Power Play Among Hyperscalers

Hyperscalers, the large-scale cloud service providers using data centers at the heart of their operations, rank among the top corporate buyers of renewable energy worldwide. As of March 2024, Amazon, Meta Platforms, Google, and Microsoft hold the first 4 spots in contracted renewable energy capacity. 

RELATED: US Corporations Ramp Up Renewable Energy, Amazon Leads the Pack

However, these rankings are expected to shift following several major deals announced by Microsoft in April and May 2024. Together, these four companies have contracted over 33 GW of wind, solar, and battery storage capacity in the US. Amazon accounted for about half of this total and Meta adding another 9 GW.

Power projects in 26 states have agreements with these cloud service providers. And their geographic reach is continuously expanding as they develop new data centers. 

Currently, Amazon, Google, Meta, and Microsoft collectively own or lease about 9 GW of data center capacity in the US. Based on current development plans, this capacity could nearly triple to just under 26 GW by the end of 2028.

All four companies have set ambitious goals to source 100% of their power from clean energy. With the expanding pipeline of clean energy contracts, the 2028 data center power demand projections may even be conservative.

Data Center Demand by Utility: VEPCO Leads the Charge

Dominion Energy Inc. subsidiary Virginia Electric and Power Co. (VEPCO), which services Northern Virginia, home to the largest data center fleet in the country, leads all US utilities in energy demand from data centers with 4.6 GW. This demand could surge to 15.9 GW by 2028, nearly 5x that of second-place Oncor Electric Delivery Co. 

VEPCO currently has 5.5 GW of operating renewable capacity and an additional 8.7 GW in development. State law requires VEPCO to source 100% of its energy sales from clean energy sources by 2040, alongside meeting the rapidly rising data center demand.

By 2028, the top 10 utilities by data center load could have a combined capacity demand of 35.7 GW. These utilities operate 54.4 GW of wind, solar, and battery storage capacity, with another 52.3 GW in development. 

Several have created dedicated green tariff programs for data center companies to purchase carbon-free electricity. The increasing data center load projections are driving these utilities to expand their renewable portfolios.

Oncor, covering large parts of Texas, including the Dallas-Fort Worth area, is expected to see 3.3 GW of data center demand by 2030, though this may be a conservative estimate. Oncor has 40.6 GW of renewable capacity either operating or in development across Texas. 

Ohio Power Co., serving the Columbus area where Amazon leads data center development, is projected to have 2.8 GW of data center power demand by 2028. However, Ohio Power currently has just 1.6 GW of combined operating and planned renewable capacity.

Data Center Power Demand on the Rise

The energy needs and power demands of data centers are expected to grow impressively over the next 5 years. As the data center segment evolves rapidly, upward revisions to demand are likely as the power needs of AI become better understood. 

SEE MORE: US Data Center Power Use Will Double by 2030 Because of AI

The critical question is whether data centers will have access to sufficient green energy supply during this rapid growth.

S&P Global Research estimates that firm data center commitments through 2028 will drive an 85% increase in data center demand. This reached an aggregate demand of 60.6 GW and 530.6 TWh of electricity use. This translates to an added demand of 27.9 GW and a usage growth of 244.1 TWh, constituting 10%-12% of US electricity usage.

Baseline estimates suggest that green energy expansion (solar, wind, and battery storage) will keep pace with data center growth rate. Declining costs for green energy and durable federal subsidies will drive significant expansion. 

Federal tax credits are fully transferable, allowing data center stakeholders to easily contract with new renewable power facilities. Additionally, renewable mandates enforced by Renewable Energy Certificate markets in many states further support project returns.

The US data center market is experiencing robust growth, driven by technological advancements and the increasing power demands of hyperscalers. As data centers continue to proliferate, the integration of clean energy solutions remains vital to sustain their expansion and environmental impact.

READ MORE: Could Merchant Nuclear Plants be the Savior of Power-Hungry Data Centers?

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Gold Royalty Corp Joins the Charge in Sustainable Mining

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Gold Royalty Corp. (GROY:NYSE) has rapidly positioned itself as a leader in sustainable and responsible mining practices. Since its inception, Gold Royalty Corp. or GROY has expanded its portfolio from 18 to 240 royalties, including five producing projects. This remarkable growth is anchored in a steadfast commitment to sustainability, partnering only with operators who share their values.

GROY is joining other resource companies like Fortescue Metals Group, BHP, and Rio Tinto in leading the charge towards sustainable mining. Fortescue has committed to achieving real zero emissions by 2030 with a $6.2 billion investment in decarbonization projects.

Meanwhile, BHP aims to reduce its operational emissions by 30% by 2030 and achieve net zero by 2050 through renewable energy projects and electrifying operations. One of the world’s largest copper and iron ore miners, it also has a plan to use carbon credits to offset emissions. Furthermore, Rio Tinto has set a goal to reduce its emissions by 15% by 2025 and 30% by 2030, with a long-term aim of net zero by 2050, focusing on renewable energy and innovative technologies.

Gold Royalty’s Key Achievements in Sustainability for 2023

In their recent published report, the company executed several strategic acquisitions, significantly enhancing its portfolio:

Strategic Acquisitions: The addition of Borborema and Cozamin royalties supplements organic revenue growth from assets like Côté and Odyssey.
Sustainability-Linked Contributions: GROY’s first sustainability-linked contribution with Aura Minerals aims to enhance social and environmental impact at the Borborema mine in Brazil.
Low Carbon Footprint: With a portfolio carbon intensity of just 0.25 tons of CO2 equivalent per gold equivalent ounce, GROY leads the royalty and streaming sector in minimizing environmental impact.

 

 

 

 

 

 

 

 

Source: From Gold Royalty Corp 2023 Sustainability Report

GROY’s robust corporate governance framework is the cornerstone of its sustainability efforts. In 2023, the company enhanced its enterprise risk management (ERM) process, aligning with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. This includes their first disclosure on climate-related risks and opportunities.

David Garofalo, Chairman and CEO, emphasizes, “Our commitment to transparency and responsible business practices ensures that we remain at the forefront of sustainable mining.”

Investing in High-Quality, Sustainable Projects

GROY prioritizes investments in mining-friendly jurisdictions such as Quebec and Ontario, Canada, known for their mature climate policies and cleaner energy grids.

This strategy has resulted in lower carbon footprints for GROY’s assets compared to industry peers. Their portfolio includes royalties on some of North America’s largest gold mines, operated by leaders in sustainable practices.

Community and Environmental Stewardship

GROY’s dedication to community and environmental initiatives is evident in their 2023 accomplishments:

Community Contributions: Over $20,000 donated to diverse community organizations and the launch of a company-wide volunteer program.
Environmental Initiatives: At the Cozamin mine, operated by Capstone Copper, strong water management practices and energy efficiency measures are in place, contributing to significant reductions in greenhouse gas emissions.

Cozamin’s initiatives include a dry stack tailings facility that reduces water usage by 15% and achieving 98% energy efficiency. Additionally, Cozamin has committed to reducing GHG emissions from fuel and power by 30% by 2030.

Karri Howlett, ESG Committee Chair, states, “Our partnerships with leading operators ensure that we drive positive social and environmental outcomes.”

Sustainability Goals and Future Plans

GROY’s long-term vision includes decarbonizing their operations and portfolio, conducting business with integrity, and making positive contributions to their communities. Key progress in 2023 includes:

ERM Program: Effective oversight of corporate and sustainability-related risks.
Climate Risk Assessment: Aligned with TCFD recommendations and calculated material financed emissions.
Volunteer Program: Employees given the opportunity to support their communities through paid time off.

Their strategy includes investing in jurisdictions with mature climate policies, like Quebec and Ontario, and partnering with operators committed to reducing their greenhouse gas emissions.

Their focus on electrifying fleets, enhancing site energy efficiency, and adopting renewable energy sources reflects their dedication to sustainable mining. Additionally, GROY’s sustainability-linked contributions, such as those with Aura Minerals, support social and environmental initiatives at mining sites.

Looking Ahead to 2024

GROY anticipates 2024 to be a transformative year. They plan to continue their strategy of sustainable acquisitions while supporting their mining partners’ decarbonization efforts and expanding community investment initiatives.

Major Takeaways:

GROY’s commitment to sustainability and responsible mining sets them apart in the industry.
Their low carbon footprint is a benchmark in the royalty and streaming sector.
Community and environmental initiatives are core to GROY’s business model, driving positive social impact.

By maintaining their focus on sustainable growth and responsible mining, Gold Royalty Corp. is poised to deliver unparalleled value to shareholders while positively impacting the environment and communities they operate in.

 

 

 

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Copper Prices Are Plunging at Over 2% After Hitting Near 52-Week High

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The copper market has experienced a notable uptrend in 2024, witnessing a surge of over 20% from mid-February until late May. But a few days after, copper prices dipped below $10,000 per metric ton amid growing global inventories and sluggish U.S. job openings data.

This fuels expectations of potential interest rate cuts by the Federal Reserve this year, while adversely impacting major copper stocks.

Inventories on the Shanghai Futures Exchange surged to levels not seen since 2020, at 321,695 tons, alongside steady inflows into Asian depots monitored by the London Metal Exchange in recent weeks, hitting 118,950 tons, the highest since April 24.

This inventory buildup, typically during declining inventories, has exerted downward pressure on prices following copper’s recent record high above $11,100 (almost $5/pound).

This is driven partly by speculation from funds anticipating increased use of the metal in green energy sectors and concerns over potential supply shortages. However, the steep and erratic price movements deterred some physical copper consumers.

Copper Crunch: A Market in Turmoil

This year, base metals experienced a surge in expectations of reduced U.S. interest rates and indications of China’s economic recovery from the pandemic’s aftermath. However, the persistent increase in exchange inventories suggests that current buyer demand is adequately met, challenging bullish forecasts of a price uptrend.

Carsten Menke, head of next-generation research at Julius Baer, remarked that the copper market appears adequately supplied, dampening hopes for a rapid price rebound. He anticipates consolidation in the market during the summer.

Copper mining stocks, such as Freeport-McMoRan Inc. and BHP, also experienced declines, with the former down by as much as 4.8% while the latter saw a 2.0% drop. 

Freeport-McMoRan Stocks Tumbling Down

Freeport-McMoRan (NYSE: FCX) holds a prominent position in the global natural resources sector, primarily focusing on copper mining alongside gold and molybdenum exploration and production. 

With copper as its primary revenue driver, Freeport has witnessed significant stock performance over the past year. It outpaced the S&P 500 Index with a 52-week return of 50.5%, compared to the index’s 24.4% gain. Year-to-date, the copper miner has surged around 23%, aligning closely with analysts’ mean target price of $52.20.

In the first quarter of 2024, Freeport-McMoRan reported robust financial results, exceeding Wall Street expectations. The company recorded a revenue of $6.32 billion, marking a 17% increase from the same period in 2023. 

Despite a 29% decline in net income to $473 million due to higher expenses, the earnings per share (EPS) surpassed analysts’ estimates at $0.32. Freeport’s copper production for the quarter reached 1.1 billion pounds, up from 965 million pounds a year earlier, primarily driven by a significant output increase from its Indonesian operations. But with the recent plunge in copper prices, Freeport stocks also fall by up to 4.8%.

While Freeport’s valuation metrics suggest a premium valuation compared to historical averages and some industry peers, the strong demand outlook for copper amidst the green energy transition could potentially justify this premium.

BHP Copper Shares Dropping

The BHP Group Ltd (ASX: BHP) share price also witnesses a decline, reflecting a broader downturn in the mining sector.

Shares in the S&P/ASX 200 Index mining giant closed 1.2% lower at AUD$44.28. As of Wednesday morning, shares are trading at AUD$43.71 each, marking a further decrease of 1.3%. Meanwhile, the ASX 200 has seen a modest increase of 0.2% during the same period.

The decline in BHP’s share price on the ASX mirrors a similar trend in the miner’s international listings. In the United States, where BHP is listed on the New York Stock Exchange (NYSE), shares closed down 2.2% overnight.

The primary reason behind the downward pressure appears to be a notable retreat in metal prices. 

Copper, which serves as BHP’s second-largest revenue generator after iron ore, experienced a 2.0% decline overnight, settling at US$9,945 per tonne on June 4. Despite still hovering near historic highs, the copper price has retraced about 9% since May 20.

Similarly, the iron ore price recorded a 2.1% drop overnight, reaching US$107.65 per tonne. Notably, on May 7, this vital steel-making metal was priced just below US$120 per tonne, having declined from its peak of US$143 per tonne in early January.

BHP’s merge proposal with Anglo American, which was put off, aims to cement its position as the world’s leading copper producer. If otherwise, the merged entity would have hold substantial copper assets, including key mines in South America, further solidifying BHP’s dominance in the copper market.

What’s The Future of Copper?

Despite this falling trend in copper prices and stocks, analysts remain optimistic. Hedge fund manager Pierre Andurand has made a bold prediction, suggesting that copper prices might increase to $40,000 per tonne in four years or more. This projection stems from the increasing electrification of various global industries, notably electric vehicles (EVs), solar panels, wind farms, and data centers. 

READ MORE: Why Copper Prices are Surging and What to Expect

Similarly recognizing copper’s pivotal role in facilitating the transition toward green energy, analysts advocate for investing in mining stocks poised to capitalize on these emerging trends.

The demand for copper in the transport sector alone is forecasted to surge by 11x by 2050, compared to levels observed in 2022. Notably, EVs, which incorporate extensive copper wiring, are a significant contributor to this demand increase.

Furthermore, the requirement for copper to expand the global electricity grid is anticipated to grow by 4.8x by 2050, compared to 2022 figures. And according to BloombergNEF estimates, the projected copper supply deficit is expected to reach nearly 10 million tonnes by 2030.

Despite the recent downturn in copper prices and mining stocks, analysts remain optimistic about the long-term prospects of the copper market. With projections of soaring demand driven by the electrification of global industries, particularly in the transport and energy sectors, copper continues to play a crucial role in the transition towards green and sustainable technologies.

SEE MORE: The World Needs 194 New Large Copper Mines to Reach Net Zero

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US Data Center Power Use Will Double by 2030 Because of AI

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Amid the energy transition, data centers play a pivotal role as greedy consumers of electricity, driving demand and shaping the future of power generation and distribution.

Data centers could consume between 4.6% and 9.1% of US electricity by 2030, according to an analysis by the Electric Power Research Institute (EPRI). 

The EPRI white paper “Powering Intelligence: Analyzing Artificial Intelligence and Data Center Energy Consumption” outlines four data center electricity consumption growth scenarios from 2023 to 2030. 

Continuous Operation and Rising Demand

Data centers operate continuously, requiring substantial power to support their systems and equipment. The power consumption in data centers is typically divided between IT equipment and infrastructure resources like cooling and power conditioning systems. 

In 2023, global data centers consumed 7.4 GW of power, marking a 55% increase from 4.9 GW in 2022, according to a separate report by Cushman & Wakefield. This significant rise underscores the substantial environmental impact associated with the energy demands of data centers.

U.S. data center load could grow to nearly 21 GW this year, up from 19 GW in 2023, according to a Federal Energy Regulatory Commission (FERC) report. By the end of the decade, this electricity demand will climb to 35 GW, according to the FERC.

Currently, data centers account for over 4% of the total US electricity load but could rise to 9% by 2030. This growth is due to increasing computing power needed by artificial intelligence (AI).

AI queries needs about 10x the power use of traditional internet searches, while generating AI-made music, photos, and videos requires much more.

A traditional Google search uses about 0.3 watt-hours (Wh), while a query using ChatGPT, the chatbot developed by OpenAI, requires around 2.9 Wh, EPRI reported.

The International Energy Agency predicts US data center electricity consumption will rise from 200 TWh in 2022 to about 260 TWh by 2026, making up 6% of total power demand. Boston Consulting Group projects this could reach 7.5% by 2030. 

EPRI’s Four Datacenter Energy Consumption Scenarios

The EPRI report analyzes the future energy consumption of power-hungry data centers under four scenarios.  

In a low-growth scenario, data centers’ electricity consumption would grow by 3.7% annually, reaching 4.6% by 2030. This is primarily driven by limited AI tool adoption and significant efficiency gains. 

A moderate-growth scenario predicts a 5% annual growth rate, resulting in data centers consuming 5% of US electricity. Meanwhile, high-growth scenarios foresee annual growth rates of 10% and 15%, with data centers consuming 6.8% to 9.1% of the nation’s electricity by 2030. The highest growth scenario is based on rapid AI adoption and limited efficiency improvements.

EPRI U.S. Data Center Load Projections

EPRI emphasizes three key strategies to manage this growth, which are: 

Enhancing data center efficiency and flexibility, 
Improving coordination between data center developers and electricity providers, and
Developing stronger modeling tools to plan long-term grid investments. 

These measures aim to support technological advancements while ensuring grid reliability and minimizing impacts on customers.

Regional Power Challenges and Strategic Planning

As of March, the Electric Power Research Institute reported 10,655 data centers worldwide, with approximately half located in the US. In 2023, about 80% of US data center load was concentrated in 15 states, led by Virginia and Texas. 

EPRI highlighted the challenges posed by data centers’ demands for highly reliable power, requests for new non-emitting generation sources, and short lead times for connection (two years or less), which can strain local and regional electricity supplies.

Data centers consumed roughly a quarter of Virginia’s electricity in 2023, the highest in the US, followed by North Dakota at over 15%, and Iowa, Nebraska, and Oregon each exceeding 11%. 

EPRI projected that with evenly distributed growth, Virginia’s data center load share could rise to nearly 50% in a high-growth scenario and average 36% across four scenarios. In other states, the data center load share could approach 20% or more, although actual growth could be unevenly distributed.

Hyperscalers and colocation centers dominate the US datacenter landscape, with significant growth projected in regions like Dallas-Fort Worth, Silicon Valley, Chicago, New York Tri-State, and Atlanta, potentially increasing power demands by 50% or more.

Data Center Capacities by Metropolitan Area

Utilities across the US are recognizing both the opportunities and challenges posed by data center development, especially regarding load growth and generation investments. 

Indeed, analysts anticipated that data center power demand fuels U.S. utility Q1 2024 earnings discussions. 

READ MORE: Data Centers Power Demand Fuel U.S. Utility Q1 Earnings Discussions

EPRI findings underscore the critical need for strategic planning and infrastructure development to accommodate the increasing energy demands of data centers while ensuring grid reliability and meeting environmental goals. EPRI Vice President of Electrification and Sustainable Energy Strategy David Porter remarked that:

“The data center boom requires closer collaboration between large data center owners and developers, utilities, government, and other stakeholders to ensure that we can power the needs of AI while maintaining reliable, affordable power to all customers.”

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How EKI Energy-FARI Solutions Partnership will Revolutionize Carbon Credits in Azerbaijan

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EKI Energy Services Ltd., a trailblazer in sustainable energy and carbon credits, has announced a groundbreaking collaboration with FARI Solutions, a leader in blockchain R&D operating across North America, Europe, and Eurasia, including Azerbaijan. This Memorandum of Understanding (MoU) marks a significant milestone in EKI’s mission to lead carbon credit initiatives and boost sustainable development in the region.

EKI Takes Charge of Carbon Credit Lifecycle

Under this agreement, EKI will act as the strategic partner of FARI Solutions, managing all aspects of carbon credit processes. It will include conceptualizing, documenting, verifying, issuing, and trading. This strategic alliance aims to enhance the competitiveness of both companies while fostering business growth in Azerbaijan.

The press release states that,

“The MoU delineates the areas, institutional arrangements, and general conditions governing the cooperation between EKI Energy Services Ltd. and FARI Solutions. It serves as a comprehensive framework that embodies the mutual commitment towards achieving shared objectives in sustainable energy and environmental stewardship.”

Some other significant attributes of this partnership are defined below:

1. Exclusivity and Innovation in Azerbaijan

The MoU grants FARI Solutions exclusive rights to activities within Azerbaijan, reinforcing EKI’s commitment to impactful strategic collaborations.

Shafiq Amiri, Chief Operating Officer of FARI Solutions, highlighted the innovative potential:

“Our partnership with EKI’s renowned energy solutions expertise promises groundbreaking advancements in tokenizing the carbon credit landscape. Together, we will lead the charge towards a greener future for Azerbaijan and global carbon markets.”

2. Positioned for Global Impact at COP29

This MoU coincides with the upcoming COP29 climate conference in Baku, Azerbaijan, positioning EKI and FARI Solutions to showcase innovative carbon credit management solutions. As Azerbaijan takes the global stage for climate discussions, this collaboration is a model for other nations transitioning to greener futures.

This partnership can inspire significant progress globally by boosting carbon credit initiatives and sustainable practices in Azerbaijan. Thereby contributing to the goals of COP29.

3. Leadership Statements: Driving Sustainable Change

Manish Dabkara, Chairman and Managing Director of EKI Energy Services Ltd., expressed his enthusiasm,

“We are thrilled to embark on this journey with FARI Solutions, leveraging our combined expertise to advance sustainable energy initiatives in Azerbaijan. This partnership highlights our dedication to driving meaningful environmental change globally.”

Siddhant Gupta, Vice President of Business Development at EKI Energy Services Ltd., echoed this sentiment:

“Partnering with FARI Solutions is a strategic move that aligns with our mission to pioneer sustainable solutions worldwide. Together, we are set to catalyze transformative change in Azerbaijan’s carbon credit sector, setting a new standard for sustainability in the region.”

EKI Energy’s Global Impact: Pioneering Carbon Offsets and Blockchain Innovations

Founded in 2008, EKI Energy Services Ltd. is a global leader in carbon credit development and supply. As the first company to list a Plastic Project from India with Verra, EKI is committed to achieving net-zero carbon emissions by 2030.

Listed in the Bombay Stock Exchange (BSE), it offers a range of sustainable solutions for climate change and carbon offsets, adhering to global standards.

With operations in over 16 countries and a customer base spanning more than 40 countries, EKI has supplied over 200 million offsets.

Some other remarkable achievements include: 

They successfully listed the first Plastic Project from India with Verra, maintaining compliance with international standards such as CDM, VCS, and Gold Standard.
The company conducted comprehensive sustainability audits for over 3,500 clients, assisting businesses in mitigating their carbon footprints.
It has formed strategic partnerships to advance blockchain-based carbon credit solutions and launched initiatives to achieve carbon neutrality and climate positivity. 

source: EKI

RELATED: EKI Energy to Create 1 Billion Carbon Credits by 2027 & Net-Zero 2030

FARI Solutions: Leading the Path Towards Net-Zero Emissions

FARI Solutions, a diverse team of professionals spanning North America, Europe, and Asia, specializes in blockchain investments and drives innovation across industries. The company aims to:

Develop and implement innovative technologies for carbon tracking and trading.
Enhance transparency and efficiency in carbon credit markets.
Bring digital transformation initiatives in finance, supply chain, healthcare, and government sectors.
Create scalable solutions that contribute significantly to global carbon reduction targets.
Partner with industry leaders and engage in cutting-edge research.

Their commitment to net zero goals propels their efforts to lead in environmental stewardship. It sets new standards for digital transformation in the carbon credit sector.

EKI Energy Hails U.S. Support for VCMs, Praises India’s Bold Actions

According to their latest press report, the company has applauded the Biden-Harris Administration’s new principles for high-integrity voluntary carbon markets. This announcement, supported by a Joint Statement of Policy, marks a significant step towards credible and ambitious climate action.

The endorsed principles highlight the U.S. government’s commitment to responsible participation in VCMs. These principles set clear incentives and safeguards to ensure carbon markets drive substantial climate action and economic growth.

Notably, EKI Energy has also praised the Indian government’s proactive measures to combat climate change. In June 2022, it enacted the Energy Conservation (Amendment) Act, empowering regulators to develop policies for a national emission trading system. In 2023, India launched the Carbon Credit Trading Scheme (CCTS), covering compliance and voluntary sectors. It included the offset market, allowing non-obligated entities to participate and create new opportunities for decarbonization projects. While the specifics for Voluntary Carbon Market (VCM) credits are still being defined, India’s progress is commendable.

FURTHER READING: Shell & EKI Energy to Invest $1.6 Billion in Carbon Credits • Carbon Credits

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The World Needs 194 New Large Copper Mines to Reach Net Zero

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A recent study by researchers from the University of Michigan and Cornell University, published by the International Energy Forum, highlights a critical challenge in the transition to renewable energy in the United States: the insufficient availability of copper to meet the demands of renewable energy infrastructure and electric vehicles (EVs).

Recent copper price trends show a near 15-month high, which analysts attribute to speculative buying and genuine supply constraints.

Amid this surging copper prices is an alarming revelation by the researchers from the two universities mentioned.

A Century of Data Reveals a Looming Shortfall

The study examines 120 years of global copper mining data, revealing that current copper production rates cannot keep pace with the copper requirements outlined in US policy guidelines for transitioning to renewable energy.

Particularly concerning is the Inflation Reduction Act’s mandate for 100% electric vehicle production by 2035. EVs require significantly more copper than traditional internal combustion engine vehicles, along with additional copper needed for grid upgrades.

RELEVANT: Copper and the Need to Meet the World’s Rewiring Demand for Energy Transition

According to Adam Simon, co-author of the study, the disparity is stark, saying that: 

“A normal Honda Accord needs about 40 pounds of copper. The same battery electric Honda Accord needs almost 200 pounds of copper. Onshore wind turbines require about 10 tons of copper, and in offshore wind turbines, that amount can more than double.”

The paper shows that the required copper is significantly impossible for miners to generate.

Source: International Energy Forum

One key factor contributing to the shortfall is the lengthy permitting process for mining companies. It averages about 20 years from discovery to mine construction approval. 

With over 100 companies mining copper across six continents, the study’s modeling suggests that global copper production may fall short of future demand. This poses significant challenges to achieving renewable energy goals in the US and beyond.

Renewable energy technologies, including solar photovoltaics and wind turbines, depend heavily on copper for efficient electricity transmission and distribution. EVs also require substantial copper for motors, inverters, and wiring.

The 115% Increase Dilemma

The research underscores the immense challenge of meeting future copper demands, particularly in the context of the global energy transition. To illustrate, the study indicates that between 2018 and 2050, humanity will need to mine 115% more copper than has been mined throughout history until 2018 just to sustain current needs and support developing regions, excluding green energy efforts.

The table below provided details of the masses of copper to be supplied by new mines, the corresponding production rates necessary in 2050, and the estimated number of new mines required.

For instance, to fulfill the demand for 260 million tons of mined copper under a business-as-usual scenario, an average mine output of 8.13 million tons per year (Mtpy) over 32 years is required. Consequently, new mines would need to produce 16.3 Mtpy by 2050. 

The study suggests that mines with an average production rate of 0.472 Mtpy, akin to the top 10 existing mines, would need to be operational by 2050. This necessitates the discovery, permitting, and establishment of a significant number of new mines annually between 2018 and 2050.

The analysis underscores that the bulk of new copper supply will come from large-scale mines due to their substantial production capacity. It highlights the need for the establishment of between 35 and 194 large new mines over the next three decades. That’s equal to an annual rate of 1.1 to 6 new mines to sustain the green transition and meet exploding demand.

Balancing Act: Electrification vs. Essential Infrastructure

For the global vehicle fleet to electrify successfully, the study suggests the need to establish up to 6 new large copper mines annually over the coming decades. Moreover, around 40% of the output from these mines will be crucial for electric vehicle-related grid enhancements.

In another estimates by the Copper Development Association, below is what the EV industry requires for copper.

Adam Simon emphasizes the importance of adopting pragmatic approaches to the energy transition. Rather than solely focusing on fully electrifying vehicle fleets, he proposes exploring hybrid vehicle manufacturing as a more feasible alternative.

Furthermore, Simon emphasizes the indispensable role of copper in developing countries for critical infrastructure projects like electrification, clean water facilities, and sanitation systems. Balancing these diverse needs highlights the complexity of the copper allocation dilemma amidst the global energy transition.

“Our study highlights that significant progress can be made to reduce emissions in the United States. However, the current — almost singular — emphasis on downstream manufacture of renewable energy technologies cannot be met by upstream mine production of copper and other metals without a complete mindset change about mining among environmental groups and policymakers.”

Ultimately, the study urges a nuanced approach that acknowledges the critical role of copper in enabling sustainable development.

READ MORE: Copper’s Price Breakout and Big Role in a Net Zero World

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Chinese EV Maker, Zeekr’s Shares Skyrocket 35% in Blockbuster US Market Debut

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On May 10, Zeekr’s shares soared almost 35% above their initial public offering price, marking a robust debut for the electric vehicle (EV) manufacturer. This is the first significant U.S. market debut by a China-based company since 2021. Zeekr’s successful U.S. flotation aims to distinguish it from the competition of Chinese EV makers vying for a larger European market share.

Zeekr, a high-end EV brand under Geely, the parent company of Volvo and Lotus, has been gaining attention for its luxury electric sedans and SUVs. The company’s flagship model, the Zeekr 001, boasts features like rapid acceleration, advanced driving assistance systems, and a fast-charging battery, making it a strong contender in the premium segment.

High Stakes: Chinese EV Giants Eye Premium Market to Navigate US Tariffs

 US Tariffs and Market Strategy

In the past year, Chinese electric car manufacturers have shifted their focus from producing small, inexpensive vehicles to targeting the premium market. This transition coincides with a new 100% import duty imposed by the US on Chinese EVs, posing a significant challenge as these companies begin their global expansion with high-end cars.

Zeekr’s debut comes as the Biden administration plans to increase tariffs on Chinese vehicle imports.

ZEEKR’s CEO, Conghui “Andy” An, has said that,

“ZEEKR plans to enter six European countries in 2024, including Germany, Sweden, and the Netherlands, and is targeting another 38 markets across Southeast Asia and the Middle East.”

Consequently, some companies might halt US expansion plans due to increased costs, while others may establish production facilities in Mexico to bypass tariffs.

Zeekr’s Strategic Leap: Strong IPO and Global Ambitions Amid EV Competition

CATL Partnership

 A key factor behind Zeekr’s appeal is its cutting-edge technology. The company benefits from a close relationship with CATL, China’s largest battery manufacturer, providing early access to the latest battery advancements. This partnership ensures that Zeekr vehicles have a competitive range and performance, crucial for success in the high-end market.

Expansion Plans Beyond China

Zeekr was established to meet the growing demand for premium models in China. While the high-end EV brand has seen strong sales growth at home, the company now aims to expand internationally. The US debut marks a key step in Zeekr’s strategy to capture a share of the lucrative North American EV market. This entry coincides with rising consumer demand for electric vehicles, driven by growing environmental awareness and supportive government policies.

Intense competition in China among domestic EV makers and with Tesla has squeezed profits, pushing companies to explore international markets.

As highlighted by Zeekr, the IPO debut achieved a fully diluted valuation of $6.8 billion, about half of the $13 billion valuation from a funding round last year.

In the competitive market, Chinese automakers like BYD, SAIC, and Great Wall Motor are also targeting Europe. They are launching electric models to compete with established European manufacturers. This is why Chinese EV sales in Europe have grown significantly in recent years.

source: Stock analysis

Zeekr’s Stock Soars: Stellar Market Performance Amidst EV Boom

Latest market reports state that Zeekr’s shares peaked at $29.36 after opening at $26, well above the IPO price of $21, closing at $28.26, up 34.6%.

In 2023, Zeekr Intelligent Technology Holding achieved impressive financial results. Here are the key highlights:

Annual Revenue:

Zeekr’s annual revenue in 2023 reached $7.29 billion.
This represents a remarkable 59.24% growth compared to the previous year.

source: Stock Analysis

Quarterly Performance:

For the quarter ending December 31, 2023, Zeekr reported revenue of $2.31 billion.
The year-over-year growth rate for this quarter was an impressive 75.69%.

EV Sales:

Zeekrs is renowned for focusing on electric mobility. By the end of 2023, Zeekr had delivered over 100,000 electric vehicles. The brand unveiled its third model, the Zeekr X, and began delivering vehicles to users in Europe.

Significantly, this year Zeekr aims to 2x its annual sales with a target of over 200,000 units.

Zeekr has outpaced its competitors in deliveries since the beginning of the year. By April 30, Zeekr delivered 49,148 vehicles, surpassing Xpeng’s 31,214 units and Nio’s 45,673 cars during the same period.

The company’s IPO comes amid rising geopolitical tensions between the U.S. and China, involving trade, intellectual property, Taiwan, and China’s stance on the Russia-Ukraine war.

In April Zeekr witnessed a remarkable achievement by surpassing Tesla in car sales.

This strongly indicated potential competition for the American EV giant. The achievement further highlights Zeekr’s strong domestic presence and its ability to challenge established industry leaders.

On this stellar performance, Zeekr CEO Andy An commented:

“Our sales gap with Tesla keeps on narrowing,”

Despite the impressive sales performance, Zeekr faces fierce competition from Tesla and others in the EV market, amid geopolitical tensions and trade uncertainties. Yet, its focus on luxury features, innovative tech, and a successful IPO signals optimism and strong investor interest amidst broader market losses.

The company said in its SEC filing:

“Through developing and offering next-generation premium BEVs and technology-driven solutions, we aspire to lead the electrification, intelligentization, and innovation of the automobile industry.”

Looking forward, Zeekr’s ~ 35% surge in its US market debut marks a promising start for the Chinese EV maker. Zeekr is committed to delivering high-quality, technologically advanced EVs as it navigates the competitive landscape and expands its international footprint Investors and consumers alike will be watching closely to see how Zeekr leverages this momentum in the coming months.

FURTHER READING: Tesla Profits Dip But Carbon Credits Revenue Up, 38% of Net Income

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Why The Voluntary Carbon Market Took a Hit in 2023

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Ecosystem Marketplace (EM) releases the 2023 State of the Voluntary Carbon Market (SOVCM) report, thoroughly analyzing global voluntary carbon credit supply and demand. The report combines interviews and disclosures from key market players with registry data from major carbon credit standards. While retrospective, the report also provides insights into future market trends.

2023 marked a significant year for the market, characterized by more scrutiny due to media coverage of unethical carbon projects. Despite this, the market’s value rose for the fourth consecutive year since 2020, reaching $723 million in 2023. This trend, which began in 2020 and peaked in 2021 with over $2 billion in carbon credits traded, has partially offset declining transaction volumes. 

Overall, 49% of the total VCM value reported to EM since 2005 occurred between 2020 and 2023, signaling significant market growth and resilience. We crunch the EM report, with the following highlights. 

The Big Picture: Volume, Value, and Price Dynamics

In 2023, the voluntary carbon market (VCM) experienced a significant downturn, with total transactions plummeting by 56% to 111 million tons CO2e compared to the previous year. Despite this steep decline in volume, the average price per ton of CO2e only saw a moderate decrease of 11%, reaching $6.53. 

Consequently, the total market value also took a hit, dropping by 61% year-over-year to $723 million. This decline in market activity was primarily attributed to both a reduction in volume and a retreat from the peak carbon prices observed in 2022.

The decrease in the number of market respondents further contributed to the downturn, with some entities merging and others temporarily halting credit sales as they awaited the establishment of stronger integrity and quality norms within the VCM. As a result, the number of respondents providing transaction data decreased from the previous year.

Qualitative feedback from market participants revealed divergent trends among different segments of the market. Remarkably, there was a notable preference among buyers for credits sourced from nature-based and community-focused projects, which offer additional environmental and social co-benefits alongside emissions reductions.

This shift in preference away from carbon removal projects contributed to the decline in overall market volume. However, the impact on market value was less pronounced.

Buyer Behavior: Premiums and Preferences

The EM report further highlighted notable variations in credit prices depending on the buyer type. End users, who directly use carbon credits for emission reduction purposes, paid a premium of 33% over intermediaries, consistent with the previous year. This premium reflects the value end users place on credits for achieving their sustainability goals. 

Notably, transactions involving Energy Efficiency/Fuel Switching and Renewable Energy credits saw the largest premium for end users. This indicates a reliance on intermediaries for project quality assessment.

Among different credit standards, Gold Standard credits commanded the highest premium for end-user sales, amounting to 140%, up from 83% in 2022. This suggests a growing preference among buyers for trusted intermediaries to vet project quality. 

Similarly, Clean Development Mechanism (CDM) and Verified Carbon Standard (VCS) credits also saw substantial increases in premiums for end-user sales. The shift towards intermediaries for project quality assessment is particularly pronounced in CDM transactions, with 73% of sales going to intermediaries in 2023.

These trends may reflect market uncertainty surrounding the transition of CDM projects to future mechanisms under the Paris Agreement. This prompted buyers to rely more on intermediaries for quality assurance. 

Registry Round-Up: Project Registrations and Trends

Analysis of registry data from credit standard registries provides insights into the dynamics of project registrations, issuances, and retirements in the VCM.

Despite challenges, the total number of newly registered projects increased to 694 in 2023, with Household/Community Devices projects leading the growth. Registrations in Forestry and Land Use, Renewable Energy, Agriculture, and Waste Disposal categories also saw year-on-year increases.

In terms of credit issuances, it decreased by 93 MtCO2 e in 2023 compared to 2022. Meanwhile, retirements increased by 2.6 MtCO2 e, indicating a tightening surplus supply of carbon credits. 

Declines in issuances were observed in Chemical Processes/Industrial Manufacturing and Energy Efficiency/Fuel Switching categories, while Household/Community Devices and Transportation projects experienced increases.

Forestry and Land Use, and Chemical Processes/Industrial Manufacturing categories saw the greatest growth in retirements, suggesting a preference for projects with clear carbon removals and emissions reductions. Conversely, retirements of Renewable Energy, Waste Disposal, and Transportation credits decreased.

Total annual credit retirements have remained around 170 MtCO2 e for the past three years, indicating steady fundamental demand. However, there’s potential for increased retirements if corporate buyers can claim credits as offsets against their Scope 3 emissions targets. These trends reflect shifting preferences towards projects with stronger additionality and clear carbon impact within the VCM.

Evolving Project Preferences

The decline in total market value for all categories of VCM credits in 2023 was accompanied by various factors affecting each category. While some categories experienced increases in volume and/or average transaction price, others faced declines. 

Energy Efficiency/Fuel Switching, Agriculture, and Household/Community Devices categories saw volume growth, indicating increased activity. However, Forestry and Land Use and Renewable Energy credits witnessed the largest declines in volume, despite being popular project types.

However, Blue Carbon credit volume plummeted, with prices driven down, particularly for Wetland Restoration/Management projects without ARR activities.

Notably, North American industrial process efficiency credits were transacted at lower prices, contributing to the price decline in the Chemical Processes/Industrial Manufacturing category. These trends illustrate shifting dynamics within different segments of the VCM, reflecting evolving market preferences and supply factors.

Access full copy of the report here.

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