CORSIA Carbon Credit Demand To Be 14x Larger Than Supply

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The surplus of CORSIA-eligible carbon credits is projected to turn negative by 2030 unless new supplies become available, according to an analysis by Abatable.

Currently, the aviation sector contributes about 3% of global emissions. As a sector that’s difficult to decarbonize, it’s exploring direct low-carbon technological solutions like sustainable aviation fuel (SAF) and electrification. However, these solutions face cost and technological hurdles and will take time to become widespread.

The Challenge of Decarbonizing Aviation

To mitigate emissions in the meantime, the International Civil Aviation Organization (ICAO) launched the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) in 2016. CORSIA aims to offset any growth in aviation emissions above 85% of 2019 levels.

CORSIA entered its first phase in January this year, after a pilot period from 2021 to 2023. Phase 1, which runs from 2024 to 2026, is voluntary for participating states, while Phase 2 will be mandatory starting in 2027.

To comply, airlines can purchase SAF, enhance fleet efficiency, or buy CORSIA-eligible carbon credits.

However, the rollout has been challenging. In March, major carbon credit issuers Verra, Gold Standard, and Climate Action Reserve (CAR) were only conditionally approved by ICAO’s Technical Advisory Body. This status will be reconsidered in September following a resubmission process completed in April 2024.

Currently, CORSIA Phase 1 credits can only be acquired through the American Carbon Registry (ACR) and ART TREES standards. Additionally, CORSIA credits require Letters of Authorization from host countries, further limiting the supply.

As of now, the only recent issuance eligible for the scheme is 7.1 million Guyana ART credits. The ICAO Technical Advisory Body’s decision suggests that this limited supply situation may persist throughout 2024.

Demand to Outpace Supply by 2030

Abatable’s analysis indicates that, under current market conditions and without new supplies, demand for CORSIA credits will exceed supply by 2030. In Phase 2 of the scheme, demand is projected to outpace supply between 2029 and 2030.

In a conservative scenario, CORSIA demand does not exceed 100 million credits until after 2034. However, supply peaks in 2025 and can only meet demand until 2029. Without new projects, demand in Phase 2 could be 14x  larger than supply.

In an optimistic scenario, aviation emissions return to 85% of 2019 levels this year, with CORSIA demand surpassing 100 million carbon credits in 2027. Supply, bolstered by projects likely to receive corresponding adjustments, meets demand until 2030. Without new projects, demand in Phase 2 could be 7x larger than supply.

Abatable’s projections include existing projects expected to meet the Integrity Council for the Voluntary Carbon Market’s Core Carbon Principles and likely to receive corresponding adjustments. Supply from Verra, Gold Standard, and CAR is expected from 2025.

CORSIA’s design interfaces with the Paris Agreement’s Article 6, allowing countries to trade emissions reductions to meet Nationally Determined Contributions (NDCs). Corresponding adjustments ensure accurate progress toward NDCs and prevent double counting. These adjustments are required for CORSIA credits, allowing them to be transferred internationally.

RELEVANT: Base Carbon Receives First-Ever Article 6 Authorized Carbon Credits

However, delays in implementing Article 6 mechanisms could affect CORSIA. While details are being developed, projects receiving Letters of Authorization can list on voluntary market registries as Article 6 compliant. Biennial UN reports will confirm national accounting and the application of corresponding adjustments.

A significant challenge is the liability for the revocation of authorized credits. ICAO’s Technical Advisory Body suggests that standards or project proponents should assume liability, while standards argue it should lie with the revoking country. COP29 decisions may influence this issue, potentially causing even more delays.

Market Response and Developments

The market is reacting to these developments. New commercial structures and carbon insurance products are under conception to mitigate risks and encourage trading activity. These products aim to provide confidence to market participants and enhance liquidity, especially given the current market uncertainties.

RELATED: Carbon Credit Insurance Market to Hit $1B in 2030, $30B by 2050

So, what’s next for this development in CORSIA carbon credits?

Verra, Gold Standard, and CAR have re-submitted their applications, and the Technical Advisory Board will reassess these in September 2024. If they fail, new supply sources will be delayed until 2025, extending beyond current projections.

To mitigate supply issues, standards should work toward approval while also building capacity to help countries develop market infrastructure and governance for authorizing credits with corresponding adjustments. Large CORSIA participants might invest in upstream projects, although this would require market understanding and time to generate a credit stream and gain necessary adjustments.

Airlines are not required to purchase credits until Phase 1 concludes in January 2028. However, some may buy and retire credits in advance, based on projected obligations from historical emissions data. Final emissions reports and audits will be completed in 2027, indicating that the total credits needed, leading to an increase in credit retirements.

The availability of credits post-2027 will depend on decisions by ICAO, Article 6 negotiators, and governments, as well as the emergence of new supply sources. The actions taken in the interim will be crucial for ensuring there are enough carbon credits to meet future demand.

The future of the CORSIA carbon credit market hinges on increasing the supply of eligible credits. Abatable’s analysis underscores the need for new projects and corresponding adjustments to meet the rising demand by 2030. While pursuing low-carbon technologies, the aviation sector must rely on carbon offsets in the interim. 

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Wired for Change: AI, Energy, and the Decarbonization Dilemma

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AI is a powerful force driving innovation across industries in today’s rapidly evolving technological landscape. However, as AI capabilities expand, so does its appetite for energy. This phenomenon has brought the intersection of AI and energy into sharp focus, particularly in the context of global decarbonization efforts.

The Interplay of AI and Renewable Energy

The rise of AI has spurred an unprecedented demand for computing power, much of which is supplied by data centers. 

These data giants consume vast amounts of electricity, prompting concerns about their environmental impact and contribution to carbon emissions. Some argue that these companies have the resources and the motivation to invest in cleaner energy technologies. They can also advocate for policy changes to support decarbonization efforts. However, others raise concerns about the environmental impact and the need for greater transparency and accountability in their sustainability initiatives.

Amidst the urgency to transition to renewable energy sources, the energy consumed by AI presents a significant challenge to decarbonization efforts.

On one side, the influx of demand from tech giants could provide a financial boost to investments in renewables, potentially accelerating the transition to cleaner energy sources. However, there remains a tangible risk that the energy demands of AI will be met using conventional, fossil fuel-based methods, such as natural gas or coal. This scenario would undermine progress toward decarbonization goals and perpetuate reliance on non-renewable resources.

Thus, navigating this decarbonization dilemma requires balancing the transformative potential of AI and mitigating its environmental impact. 

It calls for strategic investments in renewable energy infrastructure with AI technology innovation to optimize energy efficiency. 
Collaborative efforts between tech companies, energy providers, policymakers, and environmental advocates are essential to charting a sustainable path forward.

A Bloomberg analysis reported, that traditional energy corporations like PPL Corp., Alliant Energy Corp., WEC Energy Group Inc., Entergy Corp., Duke Energy Corp., NextEra Energy Inc., DTE Energy Co., CenterPoint Energy Inc., and Vistra Corp., are also deeply involved in navigating the challenges and opportunities presented by AI and data centers.

These companies face pressure to optimize their operations for efficiency, reliability, and sustainability. AI technologies offer opportunities to enhance grid management, predict demand more accurately, optimize energy distribution, and improve maintenance scheduling. Moreover, these corporations will likely explore AI-driven solutions to meet regulatory requirements and customer demands for cleaner energy sources.

As AI becomes increasingly integral to various industries, including energy, investors will evaluate companies based on their AI capabilities and ability to adapt to technological advancements.

The automation era in the energy sector

This futuristic vision is swiftly materializing – the AI in energy and power market is forecasted to surge at a CAGR of 24.68%, from a value of US$3.103 billion in 2021 to US$14.527 billion by 2028.

AI-Growth Drivers Transforming the Energy Companies

From predictive maintenance to demand forecast, AI-powered solutions are revolutionizing traditional practices and reshaping the industry.

1. Predictive Maintenance: Preventing Downtime, Maximizing Efficiency

By analyzing vast amounts of data from sensors and equipment, AI algorithms can detect anomalies and predict potential failures before they occur. This approach not only minimizes downtime but also maximizes the lifespan of critical assets. It further leads to substantial cost savings for energy companies.

2. Optimized Asset Management: Maximizing Returns on Investments

AI-driven asset management solutions enable energy companies to optimize the performance of their infrastructure. Through real-time monitoring and analysis, AI algorithms can identify opportunities for efficiency improvements and asset optimization. AI empowers companies to make data-driven decisions that enhance profitability and sustainability.

3. Dynamic Demand Forecasting: Balancing Supply and Demand

Accurate demand forecasting is essential for energy companies to manage supply and avoid costly overproduction or shortages. AI-powered demand forecasting models leverage historical data, weather patterns, market trends, and other variables to predict future demand with precision. By optimizing resource allocation and scheduling, energy companies can minimize waste and maximize revenue, ultimately improving cost efficiency.

4. Enhanced Customer Engagement: Personalized Services and Solutions

AI technologies also enable energy companies to enhance customer engagement by offering personalized services and solutions. Data analytics and machine learning empower companies to customize offerings based on individual customer preferences and behavior.

MUST READ: The Carbon Countdown: AI and Its 10 Billion Rise in Power Use (carboncredits.com)

source: Data Dynamics

Moving on, we can see the top energy giants using AI in their operations  

Top Energy Giants using AI in their Operations  

These energy companies exemplify the strategic adoption of AI to enhance their operational capabilities, driving efficiency gains and ultimately contributing to their bottom line.

Exxon Mobil

Exxon Mobil integrates AI to enhance operational efficiency and reliability across its operations. It collaborates with IBM to use quantum computing in advancing AI-driven simulations. Additionally, they use AI for critical calculations to optimize CCS methods. 

Enhances its operational efficiency, minimizes downtime, and reduces maintenance costs with AI-driven predictive maintenance and process optimization. 
The AI-powered analytics enable the company to optimize supply chain management.
Subsequently, it ensures timely delivery of products to customers while minimizing transportation costs and environmental impact.

ABB

The Swiss technology leader in electrification and automation is a pioneer in AI usage. The company

Utilizes AI to identify faults like pipeline and machinery cracks through image analysis. 
Manages distributed energy resources for reliable green power.
Employs AI to analyze seismic data for optimizing oil extraction.

Schneider Electric

It uses Microsoft’s machine learning to remotely monitor and configure pumps in oil and gas fields. AI can detect pump failures, prevent weeks of downtime, and repair costs of up to $1 million.

BP

The London-based gas and oil giant leverages AI to enhance decision-making processes, optimize resource allocation, and improve safety standards. AI boosts the oil extraction and recovery process with high-end sensors. It further lowers the cost/ barrel, reduces risk, and ensures compliance. 

Notably, BP is one of Amazon’s most trusted cloud computing clients.  It has used its technology to enhance the performance of its lubricants ERP system with 40% faster response times.

Royal Dutch Shell

Shell implements AI technologies to streamline operations, drive innovation, and enhance overall performance. It utilizes Microsoft’s cloud-centric platform, Azure. By leveraging AI technologies, Shell aims to boost revenue, cut costs, and enhance operational safety, such as monitoring data from drill sensors deep underground.

Gretchen Watkins, President of Shell Oil Company, revealed at the CERAWeek energy conference that,

Shell employs AI algorithms for drilling in wells in the Permian Basin. These algorithms, driven by machine learning, facilitate safe, reliable, and cost-effective operations.

The Top 10 AI-powered solutions in the Energy and Power Sector and their Stocks to Watch Out

The U.S. Department of Energy established the Artificial Intelligence and Technology Office (AITO) to elevate it into a global leader in AI

AITO is responsible for reliable AI governance and capabilities in energy infrastructure, advising on trustworthy AI/ML strategies. It fosters partnerships, policies, and innovations in AI and energy across public, private, and international sectors. AITO further supports Department of Energy program offices to implement AI/ML strategies. 

Overall, the relationship between AI, energy, and decarbonization efforts is complex and multifaceted, and addressing the challenges it presents will require collaboration across industries and disciplines.

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U.S. Raises Tariffs on $8B China Imports: EVs, Batteries, and Solar Cells Included

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The Biden-Harris Administration’s Investing in America agenda has successfully spurred more than $860 billion in business investments. In line with this, the White House has officially announced its intent to increase tariffs on Chinese imports. 

President Biden has emphasized that American workers and businesses can outcompete their global counterparts if they have fair competition. However, China’s government has been criticized for engaging in unfair, non-market practices such as forced technology transfers and intellectual property theft.

According to the White House, these practices have enabled China to dominate the global production of essential inputs for various technologies, infrastructure, energy, and healthcare, posing substantial risks to American supply chains and economic security. 

The Biden Administration’s policies aim to counter these challenges by fostering fair competition, reducing dependence on foreign supply chains, and strengthening domestic production capabilities.

To address issues related to technology transfer, intellectual property, and innovation, the President is directing an increase in tariffs on $18 billion worth of imports from China. These sectors include steel and aluminum, semiconductors, electric vehicles (EVs) and batteries, critical minerals, solar cells, and medical products. 

Below, we focus on the key takeaways from three crucial sectors of US clean energy manufacturing:

Boosting the Domestic EV Industry

The Biden administration is significantly increasing tariffs on EVs from China to protect and promote American manufacturing. Here are the key details and implications:

Tariff Increase: The tariff rate on electric vehicles under Section 301 will increase from 25% to 100% in 2024.
Rationale: This dramatic increase responds to extensive subsidies and non-market practices in China, which have led to a 70% growth in Chinese EV exports from 2022 to 2023. This surge threatens productive investments in other regions.

Objective: By imposing a 100% tariff, the administration aims to shield American manufacturers from these unfair trade practices, fostering a domestic EV industry built by American workers.
Supportive Measures: the administration is incentivizing the development of a robust EV market through:

Business tax credits for battery manufacturing and critical minerals production.
Consumer tax credits for EV adoption.
Federal investments in EV charging infrastructure.
Grants supporting EV and battery manufacturing.

The U.S. isn’t alone in expressing concerns over China’s strides in “new energy vehicles.” The European Commission had initiated an inquiry into subsidized electric cars from China, probing whether Chinese battery EV value chains benefit from “illegal subsidization,” potentially harming EU BEV producers.

EU trade commissioner Valdis Dombrovskis recently noted that the investigation is progressing, hinting at possible tariffs before the summer break.

China has risen as the globe’s largest electric car market, buoyed by government policies and incentives to spur EV adoption. These include subsidies, tax incentives, and a credit system mandating car manufacturers to meet specified quotas, resembling a carbon credit trading scheme.

Strengthening the Battery Supply Chain

The administration is also increasing tariffs on various battery-related products and critical minerals to strengthen the domestic supply chain:

Tariff Increases:

Lithium-ion EV batteries: From 7.5% to 25% in 2024.
Lithium-ion non-EV batteries: From 7.5% to 25% in 2026.
Battery parts: From 7.5% to 25% in 2024.
Natural graphite and permanent magnets: From 0% to 25% in 2026.
Certain other critical minerals: From 0% to 25% in 2024.

Rationale: China controls over 80% of certain segments of the EV battery supply chain, particularly upstream nodes like critical minerals mining, processing, and refining. This concentration poses risks to U.S. supply chains, national security, and clean energy goals.

Source: Bloomberg

Supportive Measures:

Nearly $20 billion invested in grants and loans to expand domestic production capacity for advanced batteries and battery materials.
Manufacturing tax credits under the Inflation Reduction Act to incentivize investment in U.S. battery production.
The American Battery Materials Initiative mobilizes government resources to secure a robust supply chain for batteries and their inputs.

RELEVANT: US Imports of Lithium and Critical Minerals Drop Amidst Shifting EV Market

Energizing the U.S. Solar Industry

Tariffs on solar cells will also be increased, with the following changes:

Tariff Increase: The tariff rate on solar cells (whether or not assembled into modules) will increase from 25% to 50% in 2024.
Rationale: China’s policy-driven overcapacity depresses prices and inhibits solar capacity development outside China. The country dominates 80-90% of certain parts of the global solar supply chain through nonmarket practices.
Objective: The tariff increase aims to protect and foster the U.S. solar industry, encouraging investment in solar manufacturing and reducing dependency on Chinese imports.
Supportive Measures:

Supply-side tax incentives for solar components, such as polysilicon, wafers, cells, modules, and backsheet material.
Tax credits, grants, and loan programs to support utility-scale and residential solar energy projects.
Nearly $17 billion in planned investment in the U.S. solar supply chain announced under the Biden administration, an eight-fold increase in U.S. manufacturing capacity.

The US government’s strategic investments and policy measures aim to revolutionize the American manufacturing landscape, particularly in clean energy technologies. All these measures are designed to promote fair competition, protect American industries, and ensure a secure and resilient supply chain for critical technologies and clean energy.

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Yara Clean Ammonia Signs Historic Deal with India’s Greenko ZeroC to Ramp Up Green Ammonia Supply

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Yara Clean Ammonia, the world’s largest trader and distributor of ammonia, has forged a long-term deal with India-based Greenko ZeroC (formerly known as AM Green), the green ammonia production arm of the India-based AM Green.

This historic deal majorly boosts the green ammonia industry and propels the net zero goals of both economies.

Unlocking the Key Features of the Green Ammonia Deal

The agreement and the term sheet ensure the supply of 50% renewable ammonia from Phase 1 of AM Green’s ammonia production plant located in Kakinada, Andhra Pradesh.

The document further states that Greenko’s plant will produce, and export renewable ammonia derived from round-the-clock carbon-free energy by 2027.

The press release from Yara Ammonia highlights two important aspects of this deal:

AM Green’s platform will ensure compliance with EU RFNBO and Renewable Energy Directive requirements for renewable ammonia and other sustainable fuels.
Yara Clean Ammonia will utilize the renewable ammonia supply to manufacture low-emission fertilizer and to decarbonize industries such as shipping, power, and energy-intensive sectors.

Mr. Mahesh Kolli, President of AM Green has expressed himself with a note,

“We are delighted to partner with Yara Clean Ammonia to propel the transformation of various industries and several OECD economies. Continuous focus on innovation combined with execution reinforces AM Green’s leadership position as a global clean energy transition solutions platform for low-cost green molecules such as hydrogen, ammonia, fuels, and other chemicals.”

READ MORE: Indian Government Announces Massive New Green Hydrogen Project • Carbon Credits

Clean Ammonia: Fuelling the Future  

Ammonia, with no CO2 emissions upon combustion, is poised to be a key fuel in the future, aligning well with the hydrogen economy. Unlike liquid hydrogen, ammonia doesn’t require extreme cooling and boasts superior energy density. This renders it more practical for transportation and storage.

Moreover, ammonia production utilizing renewable energy sources leads to negligible or zero GHG emissions.

Scaling Up: AM Green’s Bold Plan for a Mega-Scale Green Ammonia Platform

Founded by the creators of Greenko Group, the company is building production capacity for green molecules, including:

green hydrogen
ammonia,
biofuels and e-methanol
sustainable aviation fuels,
high-value downstream chemicals

Its main goal is to decarbonize the tough industries. Additionally, Greenko plans to establish an international renewables and storage business by collaborating with John Cockerill of Belgium. Together they would manufacture electrolyzers to produce green ammonia.

Uniper and Greenko signed exclusivity for Green Ammonia offtake to the EU from India’s first Green Ammonia Project in Kakinada. Their press release states that they have collaborated to negotiate innovative pricing and supply. Together they would “build a tenure structure for a unique supply and purchase agreement for 250,000 T per annum of Green Ammonia (GASPA) based on the Heads of Terms.” 

Greenko’s Kakinada project is a multi-phase green ammonia production and export facility. It would be one of the world’s largest green ammonia platforms.

Furthermore, the company’s annual report reveals that:

Greenko is building a 2 GW per year Alkaline Electrolyser manufacturing capacity. It can produce 1 Lakh TPA Green Ammonia that will be operational by 2024.
Further, 1 MTPA Green Ammonia manufacturing capacity will be supplemented in the next two consecutive years summing up to 3.1 MTPA capacity by the end of 2026.
Additionally, there are plans to increase the capacity to 5 MT per annum by 2030.

Greenko’s Green H2 and Energy Carrier Architecture

source: Greenko

Yara’s Ambitious Decarbonization Goals for its Ammonia Plant

Yara Clean Ammonia headquartered in Oslo, Norway operates the largest global ammonia network with 15 ships. Through Yara, it has access to 18 ammonia terminals and multiple ammonia production and consumption sites worldwide.

In 2021, Yara received NOK 283.25 million from Enova to develop a green ammonia initiative. It marked the first step towards fully decarbonizing the Herøya ammonia plant in Porsgrunn, Norway.

The Herøya fertilizer factory ranks among Norway’s top CO2 emitters outside the oil and gas sector, releasing 800,000 tonnes of CO2 annually. Hydrogen, vital in fertilizer production, is currently derived from liquefied fossil gas, but Yara aims to shift to renewable energy sources, enabling emission-free ammonia production.

CEO Svein Tore Holsether emphasizes Norway’s unique opportunity to lead the green transition. He highlighted green ammonia’s versatility and its role in reducing emissions in global food production and long-distance shipping. Yara’s corporate board commits to investing in a 24 MW demonstration plant, making it one of the world’s largest green ammonia production projects.

Yara reports that this shift to renewable energy will cut CO2 emissions by about 41,000 tons yearly. It would also produce enough hydrogen to yield 60,000 – 80,000 tonnes of green, fossil-free mineral fertilizer annually.

Another landmark deal is the Yara Clean Ammonia and Cepsa partnership. This initiative aims to decarbonize the European industry and maritime transport by creating a secure and cost-effective supply chain for low-emission ammonia and hydrogen.

Strategy scorecard of Yara Ammonia

source: Yara’s report

Considering the AM Green collaboration, Hans Olav Raen, CEO, of Yara Clean Ammonia commented,

“The AM Green Kakinada project expands our portfolio of ammonia produced with renewable energy and consolidates Yara Clean Ammonia’s position as a reliable supplier of low-emission ammonia to established and emerging markets like fertilizer production, cracking of clean ammonia to hydrogen, shipping fuel, power generation, and other industrial applications.”

We can conclude from this report that the Yara Ammonia-Greenko deal could revolutionize sustainable energy architecture by ambitiously ramping up green ammonia production and supply. Notably, it indicates a substantial potential!

FURTHER READING: Woodside Energy Collaborates with Yara Pilbara to Explore CCS in Australia • Carbon Credits

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Nikola Unveils HYLA Refueling Station in California Amid China’s Hydrogen Breakthrough

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Nikola Corporation proudly announces the opening of its latest HYLA high-pressure modular refueling station and facility in Southern California. Located near the Port of Long Beach at 2267 W. Gaylord St., this new station commenced operations on May 4, 2024. 

This launch is a pivotal milestone in Nikola’s strategic plan, aiming to establish a network of up to 9 refueling solutions by mid-2024. It has also a total of 14 operational sites slated for completion by year-end. These include a combination of HYLA modular fuelers and partner stations such as FirstElement Fuels’ in the Port of Oakland.

Nikola Corporation is driven by a clear mission: pioneering solutions for a zero-emissions world. As an integrated truck and energy company, Nikola is leading the transformation of commercial transportation. The company’s Class 8 vehicles, which include battery-electric and hydrogen fuel cell electric trucks, along with its energy brand, HYLA, are driving the advancement of the complete hydrogen refueling ecosystem.

RELATED: Nikola’s HYLA Stations Are Supercharging the Hydrogen Revolution

Headquartered in Phoenix, Arizona, Nikola operates from its manufacturing facility in Coolidge, Arizona. With a focus on innovation and sustainability, Nikola is committed to shaping the future of transportation and energy.

Fueling the Future in Southern California

Nikola focuses on providing an exceptional customer experience, offering round-the-clock assistance, ensuring seamless and efficient fueling.

Unlike battery-powered trucks, hydrogen fueling stations require more complex infrastructure and logistics. To address this, the HYLA refueling station is designed as a temporary setup, featuring large liquid hydrogen tanks on trailers capable of storing over 800 kilograms of hydrogen each.

Nikola’s refueling concept aims to facilitate the rapid deployment of hydrogen refueling stations to meet the rising demand for zero-emission trucks. This approach is especially crucial in areas experiencing a significant uptick in the use of hydrogen fuel cell vehicles (FCEVs).

Below is the projection for hydrogen deployment globally by 2030. FCEVs got the biggest market share for hydrogen.

President of Energy Ole Hoefelmann expressed excitement about inaugurating the second HYLA hydrogen refueling station in Southern California. This marks a significant stride toward sustainable transportation. 

He extended appreciation to the City of Long Beach and the Long Beach Fire Department for their instrumental role in realizing this vision, saying:

“With multiple stations in the pipeline this year, we are steadfast in our mission to pioneer zero-emission trucking solutions and drive positive environmental impact.”

Nikola is actively securing its hydrogen supply chain and expanding its HYLA refueling infrastructure to support increased demand. This ongoing development underscores Nikola’s commitment to accelerating the adoption of hydrogen fuel cell trucks and advancing transportation’s decarbonization agenda.

As shown below, the United States stands fifth in terms of the number of hydrogen fuel stations in 2022. But as demand for FCEVs continue to rise, so is Nikola’s HYLA deployment.

The HYLA network will offer a diverse portfolio of refueling solutions to Nikola’s hydrogen FCEVs and other Class 8 customers. These include modular and permanent HYLA stations, “behind-the-fence,” and partnerships with public truck stops. 

RELEVANT: Truck Companies Are Shifting to Hydrogen Fuel for Long-Haul Trips

Revolutionizing Hydrogen Fuel Systems

In related news, the Chinese state-owned company China Aerospace and Technology Corporation (CASC) has introduced a breakthrough liquid-hydrogen fueling system for trucks, featuring a 100kg fuel tank.

This development follows German automaker Daimler’s successful road test of a fully-loaded truck with 80kg of liquid hydrogen stored onboard. This hydrogen innovation covers a distance of 1,047km without refueling.

Known as Track 1000, this domestically produced system is a core component of liquid hydrogen heavy trucks. Moreover, it’s designed to extend the range of hydrogen-powered vehicles to over 1,000km with a single charge.

The new Track 1000 system maintains the same overall dimensions as its predecessor while offering a 20% increase in hydrogen volume and reducing costs by over 30%. CASC emphasized that the system meets international standards in terms of quality, hydrogen storage density, and refueling time.

Liquid hydrogen storage presents challenges due to its requirement of extremely low temperatures. Daimler’s Gen H2 truck, equipped with 40kg fuel tanks, demonstrates effective insulation to maintain hydrogen temperature without active cooling for an extended period. These advancements mark significant progress in making liquid hydrogen a viable and efficient fuel option for heavy trucks.

Nikola’s latest HYLA high-pressure modular refueling station in Southern California and China’s groundbreaking liquid hydrogen system are a crucial step in advancing zero-emission trucking solutions. Committed on expanding their hydrogen refueling infrastructure, Nikola is driving positive environmental impact and accelerating the adoption of hydrogen fuel cell electric trucks.

READ MORE: DOE Sets Eyes on Cutting Clean Hydrogen Cost, $1/Kilo by 2031

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Xpansiv’s CBL VCM Saw Significant Block Trades, Xpansiv Connect™ Launched

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Xpansiv’s CBL voluntary carbon market (VCM) activity saw significant block trades at both the beginning and end of the week. The week started with a block trade of 175,000 N-GEO Trailing contracts settling at $0.35, marking the largest trade of the week at the lowest unit price. 

The data presented in the report is from the Xpansiv Data and Analytics database. It offers a comprehensive collection of spot firm, indicative bids/offers, and transaction data.

Xpansiv provides extensive market data sourced from CBL, recognized as the world’s largest spot environmental commodity exchange. This includes daily and historical information on bids, offers, and transactions for various environmental assets:

Voluntary carbon credits,
Compliance carbon, and
Voluntary renewable energy certificates. 

On Friday, block trades of 1.2 million metric tons of CBL N-GEO and CBL GEO December futures occurred at $0.99 and $0.44, respectively, driving weekly price gains of 7% and 16% in the contracts.

Trades and Trends from the CBL’s VCM Report

Blocks of N-GEO-eligible carbon credits were settled at prices up to $5.50. This is consistent with the $5.40 monthly average for recent-vintage, spot AFOLU credit transactions on the exchange. Pilot-phase CORSIA GEO-eligible credit blocks traded up to $1.35, slightly below CBL’s $1.98 monthly average price for technology credits. Additionally, 111 OTC-matched ACCU credits were settled via the trading platform.

On-screen matched trades included 500-ton lots of GS 11134 vintage 2022 Rwandan energy efficiency credits traded at $6.50. And VCS 1477 vintage 2016 Cambodian Mai Ndombe AFOLU credits traded at $1.25.

A total of 275,167 tons were traded via the CBL spot exchange. Plus, an additional 1,810,000 tons were traded via CME Group’s CBL GEO Emissions futures complex.

New offers in the voluntary carbon trading platform included VCS REDD, ARR, and cookstove carbon credits at prices up to $11.00. A request-for-quote (RFQ) seeking bids for 30,000 MWh of South African solar I-RECs generated in 1H 2024 was also circulated at an indicated offer price of $1.00/MWh.

In the North American Compliance Market, there was significant activity with over 70,000 PJM credits exchanged via CBL. This activity was primarily due to counterparties settling bilateral transactions through CBL’s post-trade infrastructure. 

Specifically, 25,000 vintage 2023 Virginia credits were settled, along with 3,574 vintage 2024 DC solar credits and 14,643 vintage 2023 Maryland solar credits.

Screen trading was concentrated in tier 1 PJM markets, where Pennsylvania vintage 2024 credits saw a rise to $35.00 on 9,551 credits traded. Similarly, vintage 2023 Maryland credits experienced a $0.25 increase to $28.00. Finally, there were 6,851 vintage 2024 Virginia credits traded on the CBL at $35.00.

RELATED: Emissions Futures Rally by Over 25%: Insights from Xpansiv’s CBL Platform

Xpansiv Connect to Revolutionize Market Infrastructure

Following their report, Xpansiv® has introduced Xpansiv Connect, an open-access infrastructure designed to facilitate the scaling of the global energy transition. This initiative includes integration with leading multi-registry environmental asset management and automated settlement systems.

Xpansiv Connect offers all stakeholders seamless access to the company’s sophisticated trading, post-trade settlement, meta-registry, and portfolio management platforms. These include end users, brokers, banks, exchanges, and other service and platform providers. 

The platform comes fully integrated with 13 leading global registries. Moreover, Xpansiv Connect supports 5 voluntary carbon credit marketplaces and a vast network of hundreds of direct market participants.

Xpansiv is collaborating with prominent market participants globally to develop and enhance solutions and services using the platform. These collaborators include Trafigura, MSCI Carbon Markets, GoNetZero, and Patch.

John Melby, Chief Executive Officer of Xpansiv®, emphasized the importance of launching this new system, saying that: 

“We believe opening access to our proven, institutional-grade technology infrastructure will best support the ecosystem of interoperable technology and market solutions needed to achieve a timely and equitable global energy transition.” 

Partnerships and Collaborations for a Sustainable Energy Transition

The launch of Xpansiv Connect marks a significant milestone as it opens up Xpansiv’s automated settlement and multi-asset, multi-registry portfolio management system to external trading platforms and exchanges for the first time.

This move extends the accessibility of Xpansiv’s advanced infrastructure, which processes over 1 billion asset transfers annually, to a broader ecosystem of stakeholders.

Among the partners exploring opportunities to leverage Xpansiv Connect are the Mercantile Exchange of Vietnam and insurers Oka and Kita. Additionally, existing partners such as BeZero Carbon, Sylvera, and the Commonwealth Bank of Australia are also supporting Xpansiv Connect.

Remarkably, the carbon marketplace developed by the Regional Voluntary Carbon Market Company (RVCMC) in the Kingdom of Saudi Arabia will implement Xpansiv Connect comprehensively. 

READ MORE: Xpansiv Chosen To Open Carbon Credit Exchange in Saudi Arabia

Leveraging this infrastructure, RVCMC aims to integrate its independent exchange matching engine with post-trade settlement and portfolio management system capabilities. The voluntary carbon credit market aims to become operational by the final quarter of 2024, facilitated by the implementation of Xpansiv Connect.

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Lithium Priced at Over $20,000 Per Ton Signals Market Optimism

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Arcadium Lithium PLC announced impressive first-quarter earnings, revealing an average realized pricing of over $20,000 per metric ton for its global lithium carbonate and hydroxide sales. 

CEO Paul Graves noted this exceeded seaborne lithium prices for the period, indicating positive market trends. Platts assessed the lithium carbonate CIF North Asia price at $14,600/t on May 7, the highest level since January 11. 

The company remains optimistic, with Graves highlighting encouraging signs in the lithium market and strong underlying demand fundamentals. He specifically noted that:

“Prices have increased from the cycle bottom and appear to have stabilized at levels that are notably higher than what we saw in the last downturn.”

Lithium Lift-Off: Arcadium’s Record-Breaking 1st Qtr

Arcadium’s performance is particularly noteworthy given its recent formation from the merger of Livent Corp. and Allkem Ltd. in January. However, it saw a decline in sales volumes due to production cuts at the Mt Cattline mine in Western Australia. 

Still, the company reported a net income of almost $20 million on sales of over $261 million in the first quarter, compared to $115 million income on sales of $253 million in the same period last year.

Arcadium is poised for significant expansion, with plans to complete new capacity constructions and expansions by 2025 and 2026. This effort aims to achieve a total production capacity of 170,000 metric tons annually across its global operations by 2026. 

Arcadium Lithium global operations

The expansions will increase nameplate production capability by around 95,000 metric tons per year on a lithium carbonate equivalent basis. This includes additions in Argentina, with 25,000 metric tons across the Fénix and Sal de Vida projects, and in Canada, with 70,000 metric tons across the Nemaska and James Bay projects. 

Recent milestones include commissioning a 10,000-metric-ton carbonate expansion at Fénix and a 25,000-metric-ton carbonate expansion at Salar de Olaroz in Argentina. 

Additionally, expansions are underway for hydroxide production. The company has a 5,000-metric-ton expansion at the Bessemer City plant in the US and a 15,000-metric-ton unit at the Zhejiang plant in China undergoing qualification. 

CEO Paul Graves expressed confidence in the company’s growth trajectory, emphasizing their strategic investments in attractive assets across market cycles.

Arcadium’s enthusiasm for lithium, which experts project more expansion in this electric metal’s production, is mirrored broadly in the industry. Statista report estimates the global lithium supply will rise to over 2 million metric tons by 2030. 

RELEVANT: Global Lithium Reserves and Resources Surge 52% in Q1 2024

Resolving Rifts, Reviving Production

In Australia, mining company Leo Lithium has finalized the sale of its remaining stake in the Goulamina lithium property in Mali to China’s Ganfeng Lithium Group, resolving a prolonged dispute with the local government and paving the way for the project to resume production this year. 

This agreement marks the second instance in May of an Australian miner resolving disputes with African governments. It resolved AVZ Minerals’ imminent delisting due to a property ownership dispute with the Democratic Republic of the Congo.

Under the deal, Ganfeng will acquire Leo Lithium’s 40% stake in the Goulamina project for US$342.7 million, pending approval from Leo Lithium shareholders and Chinese regulators. This equates to 43 Australian cents per Leo Lithium share. The company’s shares were suspended at 51 Australian cents in September 2023 amid the dispute. 

Additionally, Leo Lithium reached a US$60 million settlement with Mali’s junta government. This gives away its offtake right but securing a 1.5% gross revenue fee over 20 years from Ganfeng.

With the Goulamina project set to begin spodumene concentrate production in the 3rd quarter, Leo Lithium emphasizes adherence to Mali’s new mining code. This increases potential government project interest to 30%.

Optimism Amidst Market Challenges

While acknowledging shareholder concerns, industry analysts see the deal as the best outcome amid challenging sovereign and security risks. 

For instance, they suggest that despite current caution, the allure of potential returns may eventually prompt investors to reconsider African investments, especially if assets are priced attractively relative to cash flow.  

They also underscore the value for Leo Lithium shareholders and Ganfeng’s strategic investment in securing a substantial resource base for future industry growth. More remarkably, they remain optimistic about Australia’s position in lithium asset development, expecting renewed interest as lithium prices recover in the coming quarters and years ahead.

As Arcadium Lithium celebrates unprecedented earnings and Leo Lithium resolves disputes, the lithium market shows signs of robust growth. Analysts remain optimistic, foreseeing a positive trajectory for both lithium companies amidst evolving market conditions.

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

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BP Grabs The Opportunity to Take Over Tesla’s Supercharging Sites

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BP’s electric vehicle (EV) charging arm is seizing the opportunity presented by Tesla’s scaling back of its Supercharger team, pledging to invest US$1 billion to expand its network across the US.

With plans to install over 3,000 charging points, including large-scale hubs termed Gigahubs, BP aims to address the growing demand for EV charging infrastructure.

BP’s Billion-Dollar Investment in EV Charging

Sujay Sharma, CEO of bp pulse Americas, emphasizes the company’s readiness to acquire real estate and talent, inviting stranded partners to reach out for collaboration opportunities. Tesla’s recent downsizing of its Supercharger team has created an opening for competitors to bolster their presence in the market. The company said that it:

“is aggressively looking to acquire real estate to scale our network, which is a heightened focus following the recent Tesla announcement.”

Last year, the company entered into an agreement to procure around $100 million worth of Tesla Supercharger hardware, with deployment set to commence later this year and in early 2025.

BP has downsized its electric vehicle charging business by more than 10% and exited several markets due to unsuccessful growth expectations in commercial EV fleets. The 250-kilowatt chargers under the BP Pulse brand will be adaptable to both Tesla’s North American Charging Standard (NACS) and Combined Charging System (CCS) connectors, facilitating the charging of EVs from various manufacturers.

As automakers increasingly adopt Tesla’s NACS, it poses a challenge to the rival CCS, potentially positioning Tesla’s superchargers as the industry standard.

BP pulse is a crucial part of bp’s strategy to become a net zero company by 2050 or sooner.

RELEVANT: BP’s 2023 Outlook for Global Energy Transition: Key Takeaways

Filling the Gap Left by Tesla’s Downsizing

Elon Musk recently made the decision to reduce Tesla’s Supercharger team, signaling a slower pace of growth for the EV charging network. This move raises concerns about the progress of charging infrastructure and EV adoption in North America. 

BloombergNEF estimates that the region will require 400,000 ultra-fast chargers by 2030 to accommodate 40 million EVs. Presently, Tesla holds a significant share, accounting for 74% of all high-speed chargers in North America.

Two years ago, Musk said that Tesla aimed for a 10% profit margin from its network. Recently, BNEF estimated that the company could potentially reach $740 million in annual earnings from charging by 2030, representing around 8% of the company’s overall profit last year.

Despite Tesla’s dominance in the high-speed charging sector, competitors like BP see an opportunity to fill the gap and gain market share. BP’s proactive approach includes procuring Tesla supercharger hardware and seeking to onboard former Tesla employees to support its expansion plans.

Other companies, such as EVgo, also view Tesla’s slowdown as a chance to increase their market footprint. CEO Badar Khan sees this shift in the competitive landscape as favorable for companies like EVgo to step up and fulfill the growing demand for EV charging infrastructure.

Bp’s move aligns with the broader industry plan of the Biden administration. 

Accelerating EV Infrastructure in the US

The United States government is allocating an impressive $623 million to accelerate the expansion of EVs as part of its efforts to transform the transportation sector. These grants, made available through the 2021 Bipartisan Infrastructure Law, are intended to facilitate the widespread adoption of EVs across the country.

Despite there being over 4 million electric vehicles currently on American roads, progress in developing the EV charging infrastructure has been sluggish. Only New York and Ohio have operational charging stations, with Pennsylvania and Maine expected to launch their own stations this year.

READ MORE: Charging Ahead: USA’s $623 Million Boost for EV Infrastructure & Ireland’s Lithium Quest

Globally, around 11 million EV units were sold last year, and the EV market is projected to reach a remarkable $623 billion in sales in 2024, encompassing both battery electric vehicles and plug-in hybrids. This growth trajectory is expected to continue, with the market volume reaching $906 billion by 2028, accommodating 17 million vehicle units.

The grant aims to enhance the accessibility, reliability, and convenience of EV chargers for American drivers, while also fostering job creation in charger manufacturing, installation, and maintenance sectors.

With Tesla’s Supercharger downsizing creating an opening in the market, BP is stepping up its EV charging expansion efforts in the US, backed by a substantial investment. The move aims to address the growing demand for EV charging infrastructure. And it also aligns with broader government initiatives to accelerate EV adoption and infrastructure development.

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Why Copper Prices are Surging and What to Expect

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The surge in copper demand is driven by its pivotal role in renewable energy generation, electric vehicles, and grid infrastructure crucial for achieving net zero emissions. Market dynamics and global supply concerns have propelled copper prices upward, with top companies witnessing significant growth.

Copper Surge and Market Dynamics

One key event that influenced copper market dynamics was the closure of the Cobre Panama mine, a substantial global copper source. This closure shifted market expectations from surplus to deficit, contributing to the upward trajectory of copper prices. 

Additionally, in March, Chinese smelters decided to reduce output amid a concentrate shortage, further boosting prices.

Market analysts attribute this trend to a combination of speculative buying and genuine supply constraints, suggesting the potential for a sustained bullish market for copper. Many copper-focused equities are currently trading at or near their 52-week highs, indicating investor confidence in the sector’s future prospects.

While the rally in copper prices is encouraging for investors, analysts caution that the market needs to validate this trend beyond short-term momentum. The sector’s performance could significantly impact earnings, particularly if copper maintains its price above $4 per pound.

Copper’s significance in the transition to net zero emissions cannot be overstated. Its indispensable properties, including high electrical conductivity, thermal efficiency, and recyclability, make it vital for renewable energy systems, electric vehicles, and infrastructure development.

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

Renewable energy technologies, such as solar photovoltaics and wind turbines, require significant amounts of copper for efficient transmission and distribution of electricity. Electric vehicles also rely heavily on copper for components like motors, inverters, and electrical wiring.

Despite its critical role, the demand for copper is projected to outpace supply growth, leading to concerns about potential shortages. Addressing these challenges requires strategic investments in copper production and recycling to support the global shift toward sustainable energy sources and achieve net zero emissions goals.

Driving Decarbonization Efforts

Despite the availability of more cost-effective alternatives like aluminum, copper remains unparalleled in its efficiency and effectiveness for various applications critical for decarbonization efforts.

From household appliances to EVs and renewable energy infrastructure, copper is everywhere. The average car contains about 65 pounds (29 kilograms) of copper, while a typical household boasts over 400 pounds. 

However, it’s in the construction of advanced grid systems capable of managing electricity from decentralized renewable sources where copper truly shines. Solar and wind farms, covering vast areas, require more copper per unit of power generated compared to traditional power stations.

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

To meet ambitious net zero targets by 2035, annual copper demand may need to double to 50 million metric tons, according to industry estimates. Even conservative projections anticipate a one-third increase in demand over the next decade, driven by substantial investments in decarbonization initiatives by both public and private sectors.

However, meeting this escalating demand poses significant challenges. While copper recycling is increasing, it’s unlikely to suffice, leaving primary mining as the primary source. Yet, expanding copper mining faces obstacles. 

Ore grades are declining, necessitating more extensive mining operations to yield the same output. Moreover, environmental concerns surrounding mining activities dampen investment enthusiasm.

Still, the surge in copper prices has heightened speculation about a potential supply crunch. Addressing an expected annual supply shortfall of 8 million tons over the next decade could require a staggering $150 billion investment, according to estimates. However, reaching such investment levels would likely necessitate copper prices to reach record highs.

Market experts further observed that while global demand for copper will rise, growth rates vary significantly across different regions. They underscored that regional macroeconomic conditions typically influence copper demand, as shown in the map below. 

Factors Affecting Copper Prices in 2024 and Beyond

The uncertainties surrounding China’s economic recovery, particularly the challenges in the property sector evidenced by the liquidation order against China Evergrande Group, pose a significant headwind for copper prices in 2024. 

Despite expectations for additional stimulus, the Chinese government opted for a growth target of 5%, emphasizing “high-quality development.” The International Monetary Fund (IMF) projects China’s economic growth to slow to 4.6% in 2024.

Chinese copper smelters have initiated production cuts to address raw material shortages, indicating potential supply constraints. Meanwhile, the US Federal Reserve’s monetary policy decisions are closely monitored, with expectations of rate cuts potentially impacting copper prices.

Analysts forecast an upward trajectory for copper prices in 2024 and beyond, driven by supply-demand imbalances, the US rate-cutting cycle, and increasing demand from the green energy sector.

BMI projects copper to average $8,800 per ton in 2024, while ANZ Research expects $8,950 per ton.

Looking ahead to 2025, analysts anticipate continued price growth, with BMI projecting $9,300 per ton, while ING forecasts around $9,050 per ton. Long-term copper price forecasts are uncertain but are expected to remain high due to increasing demand driven by the energy transition, particularly in EVs and renewable power.

As copper increasingly shapes global economic dynamics, nations are vying for access to limited future supplies, particularly considering that a significant portion of copper ore is mined in Latin America and Africa. This underscores the strategic importance of securing domestic or friendly sourcing and refining capabilities for essential metals like copper.

As renewable energy infrastructure and electric vehicle adoption continues to expand, strategic investments in copper production and recycling are crucial to meet growing demand and achieve net zero emissions goals.

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