Stellantis Secures $7.5B Loan from U.S. Gov’t for EV Battery Plants: A Push For Its Net Zero Drive

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Stellantis Secures $7.5B Loan from U.S. Gov't for EV Battery Plants: A Boost For Its Net Zero Push

Stellantis and Samsung SDI’s joint venture, StarPlus Energy LLC, has received a U.S. government commitment of up to $7.54 billion to build two electric vehicle (EV) battery plants in Kokomo, Indiana. If finalized, the project will significantly expand North America’s EV battery manufacturing capacity while creating thousands of jobs.

Massive EV Battery Plant to Power North America

Stellantis‘ proposed plants will produce battery cells and modules for North American EVs. Their combined capacity will support around 670,000 vehicles annually. This joint initiative aligns with efforts to bolster domestic production and reduce reliance on foreign suppliers, especially from adversarial nations like China.

In addition to the manufacturing facilities, the project could generate at least 2,800 direct jobs and hundreds more through a nearby supplier park.

Loan Details and Conditions

The U.S. Department of Energy’s (DOE) commitment includes $6.85 billion in principal and $688 million in interest. However, finalization is subject to several conditions, including:

  • Developing a plan for meaningful engagement with community and labor leaders to ensure good-paying jobs.
  • Meeting technical, legal, environmental, and financial requirements.

The DOE emphasized the importance of continuing support for projects like this, despite potential policy shifts under the incoming administration. President-elect Donald Trump has previously criticized such initiatives, labeling them part of the “green new scam.”

It remains uncertain, however, if the loan will be finalized before Trump’s inauguration on January 20. The DOE refrained from confirming a timeline but stressed the economic and environmental benefits of funding such projects.

A Broader Context in EV Manufacturing

The loan commitment follows a similar $6.6 billion loan granted to Rivian Automotive for a stalled EV factory in Georgia. These investments reflect the Biden administration’s push to strengthen domestic EV supply chains.

The announcement comes amid a leadership shakeup at Stellantis. CEO Carlos Tavares resigned abruptly, with the company announcing an interim executive committee led by Chairman John Elkann until a permanent successor is appointed.

If the loan is finalized, the Kokomo project will mark a significant milestone in North America’s transition to clean energy. It will provide a vital boost to EV infrastructure while fostering job creation and reducing reliance on foreign suppliers.

For Stellantis, it means a highly significant boost for its Net Zero ambitions. 

A Roadmap to Net Zero: Stellantis’ Electrification Revolution

Stellantis is taking bold steps to lead the global transition toward a sustainable future through its Dare Forward 2030 plan, a pathway aligned with science-based recommendations to combat climate change. Recognizing transportation’s heavy reliance on fossil fuels—responsible for over 90% of the sector’s energy needs and more than 7 gigatonnes of CO₂ emissions in 2020—the automaker aims to make transformative changes.

The EV giant aims to achieve the following goals and targets:

  • 50% CO₂ Reduction by 2030: Benchmarking against 2021 levels, Stellantis is targeting a 50% cut in greenhouse gas emissions.
  • Net Zero by 2038: Committed to achieving carbon neutrality, with less than 10% of emissions offset through compensation.

These goals align with the Paris Agreement’s mission to limit global temperature rise to 1.5°C above pre-industrial levels.

A Holistic, ‘Daring for Zero’ Approach

To achieve carbon net zero by 2038, Stellantis has adopted a threefold strategy addressing emissions across its value chain.

Stellantis net zero 2038 strategy

For vehicles, it has set an aggressive electrification roadmap, integrating advanced technologies and batteries, offering innovative mobility solutions, and emphasizing circular economy practices to reduce waste. 

Stellantis is aggressively advancing its electrification strategy, aiming for a 100% battery electric vehicle (BEV) sales mix in Europe and a 50% BEV sales mix for passenger cars and light-duty trucks in the U.S. by the end of 2030. 

Across its 14 iconic brands, Stellantis plans to introduce 75 BEV models by 2030, targeting sales of 5 million units annually by then. Starting in 2025, all new luxury and premium segment launches will exclusively feature BEVs, with this approach extending to all segments in Europe by 2026.

Stellantis Roll Out of Battery Electric Vehicles (BEVs)

Stellantis BEV roll out 2030

To achieve these ambitious goals, Stellantis is investing €30 billion by 2025 in electrification and software development. This will ensure its EV portfolio aligns with evolving market demands and solidifies its leadership in sustainable mobility.

In the supply chain, the company is optimizing logistics and collaborating with suppliers to ensure sustainability. Lastly, in industrial operations and sites, Stellantis employs responsible energy management and innovative real estate solutions to minimize its carbon footprint.

This holistic strategy tackles Scopes 1, 2, and 3 emissions, including direct emissions from its operations, indirect emissions from purchased energy, and emissions from upstream and downstream activities. in doing so, Stellantis focuses on real reductions, minimizing reliance on carbon offsets. 

However, achieving these goals depends on external enablers like a decarbonized energy supply and supportive public policies for BEV infrastructure, including charging stations and purchasing incentives.

Stellantis’ initiatives, part of its Daring for Zero series, highlight its commitment to achieving sustainability milestones. The automaker is driving innovation and collaboration across the industry, reaffirming its crucial role in tackling climate change. And the committed loan from the U.S. government can rev up the automaker’s drive toward net zero. 

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ArcelorMittal Delays €1.7B Net Zero Plan: Is The EU Policy to Blame?

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ArcelorMittal, the world’s second-largest steelmaker, announced a delay in its planned green steel investments in the European Union (EU), citing challenges posed by regulatory uncertainty. This decision underscores the tension between net zero commitments and economic pressures that ArcelorMittal and others face in the industry.

Major Decarbonization Plans in Limbo

The steelmaking industry is responsible for around 7% of global carbon emissions. This substantial carbon footprint prompts steelmakers to look for ways to cut their emissions.

In January, ArcelorMittal secured €850 million ($885 million) in subsidies from the French government to support its €1.7 billion decarbonization program at its Dunkirk and Fos-sur-Mer sites in France. A key component of this plan involves replacing 2 of 3 blast furnaces in Dunkirk with green hydrogen-powered facilities.

Despite the substantial funding, the company has yet to finalize these investments.  ArcelorMittal stated in an email:

“We are operating in a difficult market, and there are a number of policy uncertainties that are impacting the industry… We need an effective carbon border adjustment mechanism, as well as more robust trade defense measures, to strengthen the business case.”

The steelmaker emphasized the need for robust EU policies to support such initiatives.

EU Policy Uncertainty Hampers Progress

A significant factor in the delay is the lack of clarity regarding the European Commission’s Steel and Metals Action Plan. It is expected to address emissions reduction targets and competitive challenges. 

Industry analysts, like Philip Gibbs from KeyBanc, note that ArcelorMittal has been clear about its stance: it will not commit to substantial decarbonization investments unless supportive EU policies are in place.

Eurofer, the European Steel Association, echoed similar concerns. It highlighted that steelmakers face mounting pressure to cut emissions while maintaining profitability in a fiercely competitive global market. 

The production of green steel hinges on emerging technologies like green hydrogen, which is produced by splitting water into hydrogen and oxygen using renewable energy sources. It is considered a cleaner alternative with green electrical energy used to producing green steel as shown below. 

green steel production
Image from Pangea-si

However, green hydrogen remains expensive and technologically nascent, adding to the challenges faced by steelmakers.

ArcelorMittal is not alone in grappling with these issues. German steel giant Thyssenkrupp announced in October that it is reviewing its €3 billion plan for green steel production, further highlighting the economic and policy hurdles in achieving emissions targets.

How the EU’s Green Deal and CBAM Impact the Steel Industry’s Transition

European steelmakers, among the largest global CO2 emitters, are under intense scrutiny to decarbonize. At the same time, they face fierce competition, particularly from China, where lower production costs allow for cheaper steel exports.

The European Commission’s Green New Deal, introduced in 2020, aimed to replace coal-fired blast furnaces with hydrogen-powered facilities. The initiative included a Carbon Border Adjustment Mechanism (CBAM), intended to level the playing field by imposing tariffs on imported goods with high carbon footprints.

However, delays in its implementation and uncertainty over its effectiveness have added to the hesitation among companies like ArcelorMittal. The company pointed out critical weaknesses in the CBAM. 

They have seen green steelmakers remain uncompetitive in the face of imports from coal-fired steelmakers in China. These flaws have allowed cheaper, high-emission imports to undercut European green steel producers, undermining efforts to make decarbonized steel cost-competitive.

ArcelorMittal’s Commitment to Net Zero: A Path Forward or a Stalled Dream?

Despite these challenges, ArcelorMittal reaffirmed its dedication to sustainability. The company had initially outlined plans to achieve net zero by 2050 through innovative technologies, including hydrogen-powered furnaces.

CEO Aditya Mittal remarked on the company’s commitment to reaching net zero emissions, saying that:

“ArcelorMittal remains absolutely committed to decarbonization. It is the right thing to do, both for the company and the planet. I remain confident that we can still achieve our net-zero by 2050 target, but the shape of how we will achieve this could differ from what was previously announced.”

ArcelorMittal Net Zero Roadmap

ArcelorMittal net zero or decarbonization roadmap
Image from company website

The world’s leading steel producer has outlined 5 key levers to achieve its net-zero emissions target by 2050, which include:

  1. Steelmaking Transformation: Using innovative technologies such as Smart Carbon and direct reduced iron (DRI) processes to significantly reduce carbon emissions.
  2. Energy Transformation: Shifting to clean energy like green hydrogen, Carbon Capture and Storage (CCS), and circular carbon solutions from sustainable sources.
  3. Increased Scrap Usage: Enhancing recycling methods to integrate more scrap metal into steel production.
  4. Sourcing Clean Electricity: Transitioning to renewable energy sources to meet operational energy needs and partnering with clean energy providers to ensure sustainable electricity supply. 
  5. Offsetting Residual Emissions: Purchasing high-quality carbon offsets or developing carbon credit projects that rely on its direct intervention.

The steel giant’s decarbonization strategy unveiled in 2020, relied on favorable policies, technological advancements, and supportive market conditions to offset the high capital and operating costs of transitioning from coal to green hydrogen-powered steel production. However, significant challenges put a break in its decarbonization efforts. 

The slow progress of green hydrogen adoption and inadequate policy support have made large-scale investments risky. This forced the company to reconsider its roadmap.

The Path Forward

While ArcelorMittal remains committed to decarbonization, its delays reflect a broader challenge for the steel industry: achieving ambitious climate goals without undermining competitiveness. Clearer EU policies will be critical to unlocking investments in green steel technologies.

For now, the industry’s ability to transition to greener operations hangs in the balance. Companies like ArcelorMittal are waiting for the right combination of market conditions and policy support to move forward toward their net zero goal.

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Experts Say China’s Emissions Peak Is Near: How EVs and Renewables are Playing a Big Part

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Experts Say China’s Emissions Peak Is Near: How EVs and Renewables are Playing a Big Part

China, the world’s largest carbon emitter, is making notable strides in its fight against climate change by stabilizing carbon emissions. Driven by the rapid adoption of renewable energy and electric vehicles (EVs), experts are cautiously optimistic about the nation’s progress toward its climate goals. 

However, challenges remain as Beijing balances economic growth with its ambitions for net zero.

Electric Vehicles Surge as China Leads Global Market

China’s green transition is advancing faster than expected. A new report from the Centre for Research on Energy and Clean Air (Crea) highlights a remarkable shift in optimism. 

  • In a survey of 44 experts, 44% believe China’s carbon emissions have already peaked or will peak by 2025, a sharp increase from just 15% in 2022.

The country’s renewable energy and EV sectors have seen explosive growth. For three consecutive months in 2024, more than half of all new cars sold in China were electric. 

According to S&P Global Commodity Insights, China continues to lead the global EV market, with October PEV (plug-in electric vehicle) sales reaching a record 1.2 million units. From July to October, PEVs in China consistently outperformed internal combustion engine (ICE) vehicles, achieving an average of 53% market share. 

plug in EV sales, China leads

Pure battery electric vehicles (BEVs) remain dominant, though their share has fallen to 58% in 2024, down from 66% in 2023, as range-extended electric vehicles (REEVs) gain traction. REEVs, featuring smaller batteries and a small ICE for recharging, highlight evolving consumer preferences.

China-made BEVs are also expanding in Europe despite a 27% EU tariff on Chinese imports. Negotiations between the EU and China are underway to address tariffs and stabilize EV pricing, underscoring China’s growing influence on the global EV landscape.

This surge underscores China’s commitment to transitioning away from fossil fuels. Meanwhile, hydropower generation, which had previously declined due to droughts, has recovered, contributing to a slight drop in emissions since early 2024.

However, emissions remain “stabilized” in Q3 2024 rather than in a structural decline as shown by Carbon Brief’s analysis below. This is despite increased coal power usage, largely offset by a surge in renewable energy.

China carbon emissions Q3 2024

Heavily polluting industries, such as construction, continue to pose significant challenges. The sector’s slowdown has helped offset emissions in the short term, but long-term solutions will require a comprehensive overhaul of China’s industrial landscape.

China falling emissions from oil and construction

Global Leadership Amid Challenges: China at COP29

China’s leadership on climate action has become even more critical amid shifting global dynamics. The United States, under Donald Trump’s re-election, has retreated from climate leadership, with plans to exit the Paris Agreement once again. 

At COP29 in Baku, China’s delegation, led by climate envoy Liu Zhenmin, took center stage as other nations sought its support for ambitious climate action.

During a side event at COP29, Liu Zhenmin received applause for reaffirming the country’s commitment to global climate efforts, calling climate change “a pressing global challenge that demands a collective response.” The event also marked the continuation of a methane-tracking agreement initially forged under Joe Biden’s administration.

China’s growing role on the international stage is encouraging. However, domestic challenges could undermine its ability to meet global expectations.

Economic Growth Versus Decarbonization

China’s dual targets of peaking carbon emissions by 2030 and achieving net zero by 2060 are ambitious but achievable with the right strategies. Yet, meeting these goals will require navigating significant economic and policy challenges.

The world’s largest carbon polluter pledged to reduce its carbon intensity—the amount of carbon emitted per unit of GDP—by 18% between 2020 and 2025.

However, current trends suggest it may fall short. High-tech manufacturing, a key driver of economic growth, is more energy-intensive than sectors like household consumption and services.

Lauri Myllyvirta, lead analyst at Crea, points out that even if China’s GDP grows by 5% in 2025, the country would need an unprecedented 9.7% reduction in emissions to meet its carbon intensity target. She particularly noted that: 

“This scenario would make meeting global climate targets all but impossible.”

Such a dramatic shift will require accelerated deployment of renewable energy and a strategic reorientation of economic development, Myllyvirta added.

Renewables Boom: A Climate Balancing Act

Despite these challenges, China’s renewable energy boom offers hope. The country has been a global leader in solar and wind energy installations, and its investments in clean energy infrastructure are unparalleled. 

In 2023, China installed more solar capacity than the rest of the world combined.

More notably, clean energy sources accounted for a record 44% of China’s electricity generation in May 2024. Solar power saw the largest increase, with a 78% year-on-year rise, followed by significant recoveries in hydropower and modest gains in wind energy.

China renewable growth, wind and solar Q3 2024

This growth outpaced the rise in electricity demand, leading to a decline in coal’s share to a historic low of 53%. These trends contributed to a 3.6% reduction in CO2 emissions from China’s power sector and kept overall emissions flat.

This emissions stability reflects China’s energy transition and highlights the potential for renewables to curb emissions growth as economic activity increases.

Electric vehicle adoption has also been transformative. Government subsidies and supportive policies have made China the world’s largest EV market. This trend, coupled with advancements in battery technology and charging infrastructure, positions the nation as a leader in sustainable transportation.

However, policy clarity remains crucial. Experts emphasize the need for a detailed roadmap outlining how China will meet its 2030 and 2060 climate targets. A revised emissions trajectory under the Paris Agreement, expected by February 2025, will be a critical indicator of Beijing’s climate ambitions.

China’s success or failure in reducing emissions will have far-reaching implications for global climate targets. As the largest emitter of greenhouse gases, the country’s actions are pivotal in limiting global warming to 1.5°C. With COP29 setting the stage for deeper international collaboration, China’s next moves will be crucial in shaping the path toward a more sustainable future.

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Cobalt at Crossroads: How Will Oversupply, Price Drops, and LFP Boom Impact Its Future?

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cobalt

According to industry experts, the cobalt market is currently under pressure due to an oversupply and slow demand. The heat is palpable more on cobalt sulfate prices, which are gradually declining, indicating weaker demand. One reason is China’s passenger electric vehicle (PEV) sector, which strongly prefers lithium-iron-phosphate (LFP) batteries that do not rely on cobalt.

However, as revealed by S&P Global Commodity Insights, the Platts-assessed European cobalt price has held steady at approximately $11.00/lb since October 11, but with suppressed trading activity.

Let’s see what the report reveals further about the current and future cobalt market.

China’s Move to LFP Batteries Weakens Cobalt Market

The report revolved around the cobalt market in China. It highlighted that China’s cobalt metal price stabilized after hitting a low in late September. From September 25 to November 21, the price rose by 5.6% and increased another 2.0% month to November 21, despite some fluctuations.

This recovery was driven by stronger feedstock costs, as cobalt hydroxide prices remained more stable compared to refined cobalt products.

China Cobalt

However, according to Shanghai Metals Market, margins for cobalt sulfate production using imported cobalt hydroxide turned negative in Q3 2023. This strained margin significantly impacted China’s cobalt sulfate output.

  • From January to October 2023, combined production dropped by 28.1% compared to the same period last year.

The reason for the decline remains the same- a slowdown in the PEV sector. The other significant reason is automakers shifting to lithium-iron-phosphate (LFP) batteries as they are cost-effective and avoid using critical minerals like cobalt and nickel. This transition has reduced the demand for cobalt-containing batteries in China.

Additionally, S&P Global noted, that in October 2024, cobalt-containing batteries accounted for only 20.6% of vehicle installations in China. This figure is a steep drop from nearly 50% in 2021.

Unlocking Cobalt’s Role in Battery Chemistry

Cobalt remains a vital component in many battery chemistries, offering stability and safety benefits. In 2023, demand for cobalt-containing chemistries grew by 15% year-over-year (y/y) to approximately 500 GWh, accounting for 55% of total battery demand.

While this represents a decline from 63% in 2022, cobalt chemistries are expected to maintain a significant market share in the medium to long term as demand continues to grow. Let’s study how experts explain this evolving landscape…

A Shifting Landscape

Cobalt Institute’s latest report revealed that demand for cobalt was mainly driven by high and mid-nickel chemistries driving this growth in 2023. High-nickel chemistries saw a 32% increase, while mid-nickel grew by 15%. Meanwhile, low-nickel and lithium cobalt oxide (LCO) chemistries experienced declines of 11% and 13% y/y, respectively.

It further highlighted,

  • Demand for cobalt-containing chemistries rose 15% y/y in 2023, to ~ 500
    GWh. This equated to around 55% of battery demand in 2023, down from 63% in 2022.

High-nickel chemistries also increased their market share to 11%, while low-nickel chemistries fell behind nickel-cobalt aluminum oxide (NCA) chemistries for the first time.

These cobalt-free chemistries now make up 45% of global cathode demand, driven largely by lithium iron phosphate (LFP) batteries. For the first time, LFP overtook nickel cobalt manganese (NCM) cathodes, claiming a 45% market share compared to NCM’s 43%. While manganese-based chemistries also contributed, their impact was minor.

Beyond batteries, cobalt is needed in aviation, energy storage, and electronics and its recyclability makes it sustainable.

Image: LFP vs. NCM: the share of NCM battery cells declines

cobalt battery

Source: Cobalt Institute report

Pressures Facing Cobalt

Cobalt, despite its critical role in batteries, faces significant challenges in the supply chain related to cost, composition, and sourcing. Cobalt is costly, but falling prices have improved battery cell cost competitiveness.

The report highlighted that in 2023, NCM and LFP chemistries dominated the global lithium-ion battery market, making up 88% of cathode demand. Automakers in North America and Europe preferred NCM batteries for their higher energy density and longer range and they were mainly used in high-performance EVs.

On the other hand, LFP batteries have gained market share globally, particularly in China, where their lower cost and reduced reliance on critical minerals like cobalt make them a popular choice. This also means that although NCM chemistries have high energy density they are globally less widely adopted.

Image: 2023 Cathode active materials (CAM) product mix from the major ex. China CAM suppliers, %cobalt cathode anode mix

Additionally, ethical and environmental concerns regarding cobalt sourcing, particularly from the DRC and Indonesia are extensively scrutinized over its sustainability and responsible extraction practices.

Cobalt Forecast 2024: Price and Production

As cobalt demand continues to face challenges with automakers favoring lithium-iron-phosphate (LFP) batteries, cobalt-containing batteries are considerably losing market share. CMOC expects cobalt-containing batteries to eventually make up less than 10% of the total battery mix.

This declining demand is further reflected in price forecasts as rolled out by S&P Global Commodity Insights noted below:

  • Analysts now estimate the cobalt market surplus will widen significantly in 2024, reaching 53,000 metric tons, which is more than 2X of its earlier predictions.
  • The growing surplus has also led to a downward revision of cobalt price estimates, with prices now expected to fall to $12.72/lb by 2028.

Batteries now drive three-quarters of global cobalt demand, making the market highly sensitive to changes in cathode chemistries and technologies. As demand for EVs grows, cobalt’s role remains crucial, but the rise of alternatives like LFP will reshape the landscape.

The EV sector’s trajectory in key regions, including the US, China, and the EU, will play a critical role in shaping cobalt’s future. However, with battery technology shifting rapidly and economic policies uncertain, the path ahead remains unpredictable.

Supply Surge from CMOC, DRC, Australia, and Indonesia

The Democratic Republic of the Congo (DRC), Australia, and Indonesia are the three major countries that control about 73% of the world’s cobalt reserves. Last year, DRC topped the list, accounting for more than 70% of global production.

cobalt supplySource: Cobalt Institute

S&P Global forecasts that cobalt production is expected to soar in 2024. It will be significantly driven by Indonesia’s high-pressure acid leaching (HPAL) projects and surge in output from the DRC. Additionally, China’s CMOC, a major producer, has already surpassed its 2023 full-year cobalt production guidance by 21% within the first nine months.

In H1 2024, the company secured the position of the world’s largest cobalt producer with an impressive output of 54,024 tons, marking a staggering 178.22% year-over-year (YoY) growth. This surge not only reflects the company’s pivotal role in the global cobalt supply chain but also signifies a contribution to meet rising demand for battery-grade cobalt.

Notably, CMOC’s production surge is primarily linked to its copper-focused strategy that resulted in increased cobalt inventories.cmoc cobalt

From this report, we can fairly infer that cobalt can still hold its ground as a key material in high-performance batteries, particularly in Western markets. However, its future will depend on balancing cost, sustainability, and evolving technology trends.

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Trafigura Bets Big, $600M, on Carbon Credits Market Revival

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Trafigura Bets Big, $600M, on Carbon Credits Market Revival

Trafigura Group, a global leader in commodities trading, is making a bold bet on the recovery of the carbon credits market. Despite its recent struggles, the company views emerging regulatory frameworks and international agreements as pivotal for mainstreaming carbon credits in emissions accounting. 

With new policies creating clearer pathways for businesses to meet climate targets, Trafigura expects a surge in demand for record growth.

The Carbon Market Makeover: Regulations Reshape Voluntary Credits

The voluntary carbon market (VCM) allows companies and individuals to buy carbon credits to offset emissions voluntarily, rather than as part of regulatory compliance. These credits fund projects that reduce or avoid greenhouse gas emissions, such as renewable energy, reforestation, or community-based initiatives. 

Unlike mandatory carbon markets governed by laws, VCM operates through independent standards and registries, providing flexibility for participants. As the VCM evolves, efforts to enhance quality and credibility are shaping its role in global climate action.

Hannah Hauman, Trafigura’s global head of carbon trading, highlighted the impact of increased regulations in Europe, the US, and Asia. These frameworks are designed to help companies achieve net-zero emissions, reinforcing the importance of a robust carbon credits market. 

At the recent COP29 summit in Baku, negotiators finalized rules under Articles 6.2 and 6.4 of the Paris Agreement, laying the groundwork for a global carbon trading system.

Article 6.4 introduces a UN-backed mechanism with standardized guidelines for carbon credit quality. It offers a more transparent and structured approach. In contrast, Article 6.2 allows countries to set their own criteria for carbon credit exchanges, which some critics fear could weaken the market. 

Danny Cullenward, senior fellow at the Kleinman Center for Energy Policy, warned that Article 6.2 could create an “anything goes” market. This can potentially undermine both Article 6.4 and broader climate efforts.

Industry Challenges and Corporate Retreats

The voluntary carbon market has faced criticism over greenwashing and the issuance of low-quality credits. In 2023, the market’s value dropped by 23% as shown in the graph below. This declining trend started in 2021 when critics began to shake the market. Moreover, key players like HSBC Holdings, Shell Plc, Delta Air Lines, Google, and EasyJet have scaled back their involvement. 

voluntary carbon credit retired and issued 2023

Just recently, HSBC abandoned plans to build a carbon credits trading desk, while Shell began selling off a majority stake in its nature-based credit portfolio.

Despite these challenges, regulatory advancements have led to optimism. Hauman remarked that countries now have a “regulatory line of sight” to guide them through 2030, providing clarity for companies on expectations, investment strategies, and emissions reductions.

According to BloombergNEF’s data, Europe is leading the UN-backed carbon credit investment while Ghana gets the most funding for Article 6 projects.

carbon credits signed by countries under new Paris Agreement mechanism

Trafigura’s Sustainability Strategy: Restoring Forests, Reviving Markets

Trafigura is capitalizing on this evolving landscape. As the world’s largest trader of carbon-removal credits, the company is expanding its portfolio to meet rising demand. 

In November 2024, Trafigura announced a $500 million investment in a carbon credits project to restore Africa’s Miombo woodlands. The project aligns with Article 6.4 guidelines, emphasizing quality and environmental impact.

In the same month, the giant commodity trader, alongside Temasek-owned GenZero, has pledged $100 million to Colombia’s largest nature-based carbon removal project. The project seeks to restore degraded land in the South American nation while generating carbon credits. 

Hauman noted that carbon credits are evolving from experimental tools to investment-grade assets, thanks to regulatory shifts. This transformation is expected to enable companies to incorporate credits into their long-term sustainability strategies confidently.

The company itself is pursuing ambitious carbon reduction goals, aiming to:

  1. cut Scope 1 and 2 emissions by 50% by 2032, and
  2. achieve net zero by 2050.

Trafigura net zero pathway

In addition to reducing its direct emissions, Trafigura is focused on lowering Scope 3 emissions intensity. This includes the impact of its traded products. To accelerate its energy transition, the company does these measures:

  • Invest heavily in renewable energy, including solar and wind projects.
  • Develop low-carbon fuels like green hydrogen and ammonia.
  • Launched a $2 billion fund in 2023 to support energy transition projects.

The fund is also for advancing its emissions trading activities, helping clients offset their carbon footprints with high-quality carbon credits.

A New Era of Investment-Grade Carbon Assets

While the carbon market faces hurdles such as inconsistent legal definitions and price volatility, companies like Trafigura, Cummins, Bosch, Daimler, Toyota, and Volvo see potential for growth. Regulators across regions recognize the role of carbon credits, especially removal-based units, in helping businesses achieve net-zero emissions by mid-century.

COP29 also marked a turning point for reforestation and afforestation projects under the UN’s Clean Development Mechanism (CDM). These projects, previously stalled, have been transferred to the revamped Article 6.4 framework, benefiting countries like India and Colombia, which host 27 eligible projects.

The carbon market is moving away from being policy-driven to becoming a dynamic investment arena. Trafigura’s strategic partnerships and investments position it to lead this transition. The company aims to drive both market growth and meaningful climate action, by addressing regulatory requirements and maintaining high-quality standards.

As the industry adapts to new rules, Trafigura’s efforts show the shift toward a more structured and credible carbon credits market. It underscores the company’s readiness to thrive in the evolving carbon market landscape.

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Westinghouse and CORE POWER Partner to Revolutionize Floating Nuclear Power Plants with eVinci™ Microreactors

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Westinghouse CORE POWER

Westinghouse Electric Company and CORE POWER have collaborated together to design and develop a floating nuclear power plant (FNPP) using the former’s blueprint eVinci™ microreactor and its heat pipe technology Both the companies have formalized a cooperative agreement to advance the design of the FNPP. This innovation is ideal for maritime and coastal applications where traditional energy sources may have less potential.

Jon Ball, President of eVinci Technologies at Westinghouse commented,

“With this groundbreaking agreement, we will demonstrate the viability of the eVinci technology for innovative use cases where power is needed in remote locations or in areas with land limitations. We look forward to our partnership with CORE POWER, bringing the unique advantages of eVinci microreactors to maritime and coastal applications, potentially even paving the way for future disaster relief efforts.”

Mikal Bøe, CEO of CORE POWER noted,

“There’s no net-zero without nuclear. A long series of identical turnkey power plants using multiple installations of the Westinghouse eVinci microreactor delivered by sea, creates a real opportunity to scale nuclear as the perfect solution to meet the rapidly growing demand for clean, flexible and reliable electricity delivered on time and on budget. Our unique partnership with Westinghouse is a game changer for how customers buy nuclear energy.”

Unlocking the Power of Floating Nuclear Power Plants

Floating nuclear power plants (FNPPs) are an innovative solution for delivering energy to remote coastal areas, islands, and offshore locations. Their compact size and mobility make them ideal for providing electricity at the need of an hour. They can be moved or towed to remote regions, where they dock with coastal facilities to supply power and heat to the local grid.

Floating nuclear power plants are gaining attention as a versatile clean energy option. They use small modular reactors (SMRs) to generate electricity and heat. These reactors, which are compact and efficient, can serve various applications:

  • Electricity for remote regions like islands and coastal communities.
  • Decarbonizing industries such as offshore oil, gas, and mining.
  • Supporting hydrogen production, desalination, and district heating.

The International Symposium on the Deployment of Floating Nuclear Power Plants (FNPPs) held in Vienna last November explored the potential of FNPPs. Delegates weighed if FNPPs could be a reliable energy solution for remote locations. They highlighted that these innovative power stations could replace fossil-fueled generators, advancing global decarbonization efforts.

IAEA Director General Rafael Mariano Grossi highlighted the growing interest in FNPPs during the symposium. He noted that many countries are actively considering these plants but emphasized the importance of addressing safeguards, and legal, and regulatory frameworks before large-scale deployment.

The same IAEA report revealed that several countries, including Canada, China, Denmark, South Korea, Russia, and the USA, are developing marine SMR designs. Russia leads with the Akademik Lomonosov, the world’s first operational FNPP. Since 2020, it has supplied electricity and district heating in Russia’s far east.

However, floating nuclear power plants do not compete with land-based SMRs. They rather expand the potential of nuclear technology to achieve net zero goals.

Distribution of nuclear power consumption worldwide in 2023, by leading countrynuclear energy Source: Statista

Moving on we will explore the companies and the kind of nuclear technologies they are deploying.

Westinghouse’s One-of-a-Kind eVinci™ Microreactor

Westinghouse is pioneering the next generation of nuclear technology with its eVinci™ Microreactor. It is typically designed for decentralized and remote applications. The micro-modular reactor is a product of 60 years of nuclear expertise and technical knowledge. They successfully created this unique microreactor to deliver a resilient, cost-effective energy solution.

The key attributes of this reactor are:

Heat Pipe Technology

The eVinci™ Microreactor has an inbuilt heat pipe technology that enables passive heat transfer without the need for complex coolant systems. Heat pipes efficiently transfer heat at high temperatures without relying on high-pressure systems or moving parts. Recently, the company successfully manufactured the first-ever 12-foot nuclear-grade heat pipe. See the pic below: 

westinghouse heatpipe nuclearSource: Westinghouse

The inbuilt design ensures reliability, reduces maintenance needs, and eliminates risks associated with coolant loss or high system pressures.

Compact Design for Rapid Deployment

Unlike traditional nuclear plants that require extensive construction, the eVinci reactor is fully factory-built, assembled, and shipped in a container for easy deployment. It operates just like a battery with minimal moving parts.

  • eVinci can produce 5MWe with a 15MWth core design. The reactor core can run for eight or more full-power years 24/7 before refueling.

Westinghouse eVinci nuclear reactorSource: Westinghouse

Beyond Maritime Applications

The reactor’s compact design and minimal maintenance requirements make it ideal for maritime and coastal use. Significantly, it offers efficient, reliable power for ports, coastal communities, and offshore operations where traditional energy sources fall short.

However, its versatility extends to the following areas:

  • Reliable power to remote communities.
  • Mining operations and industrial facilities.
  • District heating and hydrogen production for cleaner energy solutions.
  • Research reactors, critical infrastructure, and military installations.
  • Data centers seeking uninterrupted power.

The eVinci microreactor integrates easily with wind, solar, and hydro. It stabilizes grids by quickly adjusting to demand, ensuring reliable power in any condition.

Net Zero Goals and Safety Standards

The eVinci microreactor delivers carbon-free energy without requiring water cooling, making it an eco-friendly power solution. This partnership shows how the companies are helping countries meet their net-zero targets.

  • Each reactor prevents up to 55,000 tons of CO2 emissions annually, significantly reducing carbon footprints.

After its operational life, spent fuel is either returned to the manufacturer or stored in deep geological repositories (DGR) for long-term safety. Additionally, Westinghouse ensures high safety standards even in unexpected scenarios. This is because of the advanced features that minimize failure risks and make it a reliable and environmentally responsible energy source.

       Check out the more details of the eVinci Microreactor

CORE POWER: Driving Maritime Nuclear Innovation

According to the press release, CORE POWER is advancing a Maritime Civil Nuclear Program across the OECD (Organisation for Economic Co-operation and Development), providing scalable nuclear solutions for maritime and heavy industries. The company has offices in London, Washington, D.C., and Tokyo.

At present, they are aiming to enhance energy efficiency and local energy security by delivering reliable floating nuclear energy systems built in shipyards, on time and within budget.

Some notable achievements of CORE POWER in this field are:

Its next-generation reactors or advanced nuclear technologies, like molten salt reactors (MSRs), offer improved safety and efficiency compared to earlier models. These floating plants deliver dependable and sustainable electricity while addressing modern energy needs.

         CORE POWER’s FNPPcore powerSource: CORE POWER

Fueling Offshore Green Industry

Floating nuclear power plants (FNPPs) are more than electricity generators; they enable sustainable industrial processes. One key application is green hydrogen production, which uses seawater and provides an eco-friendly alternative to fossil fuels.

These FNPPs offer efficient cooling and unlimited water access, making them ideal for scalable hydrogen production. This green hydrogen can power zero-emission transport and support green steel manufacturing, transforming industries with clean energy and industrial heat.Source: CORE POWER

Sustainable Water Solutions

Floating nuclear desalination plants provide a continuous supply of fresh water without relying on fossil fuels. Operating 24/7, these plants are mobile, allowing relocation along coastlines to address water scarcity in different regions.

Significantly desalination plants are safe from tsunamis and earthquakes as they are harbored offshore. This makes them a reliable and sustainable solution to growing water challenges.

core power NUCLEARSource: CORE POWER

This groundbreaking partnership of Westinghouse and CORE POWER can potentially revolutionize the energy landscape energy with their floating nuclear power plants (FNPPs) and innovative eVinci microreactor. All in all, these innovations mitigate carbon emissions and support countries in their net zero goals.

Source: Westinghouse and CORE POWER Partner for Floating Nuclear Power Plants Using eVinci™ Microreactors

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Hydrogen Energy Revolution: Nikola’s Innovations and PureWave’s Game-Changer

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The hydrogen sector is seeing transformative developments from two key players. Nikola Corporation is advancing hydrogen fuel cell technology for zero-emission transportation, setting a new standard in sustainable mobility. Meanwhile, PureWave is revolutionizing hydrogen production with innovative, cost-efficient solutions to meet the growing demand for clean energy.

Together, these breakthroughs underscore hydrogen’s pivotal role in decarbonizing industries and powering a greener future.

Nikola and FEF: Setting A New Standard for Hydrogen Transportation

The world’s first hydrogen fuel station for commercial trucks has opened near the Port of Oakland. Built by FirstElement Fuel (FEF), a California-based company, this station boasts a fueling capacity over 10x greater than any existing hydrogen station. 

Among its early adopters are Nikola’s hydrogen fuel cell electric trucks, which will refuel at this state-of-the-art facility under a 10-year agreement with FEF.

In December 2023, Nikola Corporation formalized its partnership with FEF, naming the latter an authorized Nikola Fueling Solutions Partner. The collaboration ensures Nikola customers have access to FEF’s cutting-edge hydrogen refueling services, including the new multi-use heavy-duty truck station strategically located near Oakland’s port.

FirstElement Fuel Oakland port hydrogen refueling station
FEF hydrogen station at Oakland Port

The station is equipped with the world’s first H70 fast-fill lane for heavy-duty trucks. It enables rapid hydrogen refueling in just 10 minutes. This technology allows the station to serve up to 200 trucks daily, supporting the growing fleet of hydrogen-powered vehicles. 

The project also received funding from the California Energy Commission under the NorCal Zero Project.

FEF’s founder and executive chairman, Joel Ewanick, highlighted the significance of the partnership, stating:

“This collaboration is a testament to our commitment to transform the transportation industry and we are proud to play a role in powering Nikola’s innovative hydrogen fuel cell electric trucks.” 

Nikola’s Role in the Hydrogen Transition

Nikola’s hydrogen fuel cell electric trucks represent a pivotal step in decarbonizing the trucking industry. With access to FEF’s advanced refueling infrastructure, these trucks can efficiently refuel and support long-haul operations, making hydrogen a practical alternative to diesel.

Hydrogen technology has gained interest from other industry leaders, including Hyundai, Daimler, and Volvo. But Nikola’s agreement with FEF positions it as a front-runner in the U.S. hydrogen economy.

The Oakland station is part of a broader push to establish a robust hydrogen infrastructure in the U.S. Tyson Eckerle, clean transportation advisor for California’s Governor, noted that federal funding of $8 billion aims to jump-start the hydrogen economy, with plans for up to 60 more truck stations statewide.

However, industry critics said that the shift remains slow, as most hydrogen today is still produced from natural gas without carbon capture as shown below. This underscores the challenges in transitioning to sustainable hydrogen sources quickly.

US hydrogen supply by production method

This is where an innovative hydrogen solution of an emerging player comes in – PureWave Hydrogen.

PureWave and the University of Wyoming: Redefining Hydrogen Production

PureWave Hydrogen Corporation has signed a letter of commitment with the University of Wyoming’s Hydrogen Energy Research Center (H2ERC) to advance groundbreaking geologic hydrogen containment technology. This collaboration marks a pivotal step in developing innovative solutions for safely and efficiently storing naturally occurring hydrogen.

PureWave Hydrogen is a pioneering company in the green energy transition, dedicated to discovering and developing naturally occurring hydrogen resources. The company focuses on unlocking the potential of ‘white’ hydrogen to revolutionize the global hydrogen economy.

  • White hydrogen is a clean form of hydrogen that eliminates energy-intensive processes to produce.

The company’s partnership with the University of Wyoming provides PureWave access to the institution’s patent-pending synthetic clay suspension technology. This innovative solution, developed by Dr. Saman Aryana’s research group, aims to enhance hydrogen containment by reducing hydrogen diffusivity. 

The agreement is part of a proposal submitted to the U.S. Department of Energy’s Advanced Research Projects Agency – Energy (ARPA-E) and is subject to the project’s approval.

Driving Innovation in the Natural Hydrogen Sector

This development underscores PureWave’s commitment to leveraging advanced research to lead the natural hydrogen sector. As global demand for sustainable energy grows, the company is focused on solutions that make hydrogen a secure and viable energy option. 

The collaboration with the University of Wyoming’s School of Energy Resources and Chemical and Biomedical Engineering Department highlights a shared mission to advance hydrogen technology and contribute to the green energy transition.

Hydrogen, especially naturally occurring ‘white’ hydrogen, is gaining attention as a clean energy source. With Wyoming’s abundant natural resources and established energy infrastructure, the state could become a hub for hydrogen production. 

The Hydrogen Energy Research Center aims to support this transition by exploring innovative hydrogen production methods, including geologic storage, and collaborating with industry leaders like PureWave.

Breakthrough in Hydrogen Containment Technology

At the heart of this collaboration is the synthetic smectite clay, Laponite, a material engineered to significantly improve hydrogen containment. This technology creates a suspension designed to reduce H₂ diffusivity, enabling better storage in geological formations.

Key features of the technology include:

  • Synthetic Smectite Clay (Laponite): Reduces the rate at which hydrogen molecules escape, ensuring higher containment efficiency.
  • Enhanced Containment: Provides a stable environment for hydrogen production and storage by forming a soft solid upon injection.
  • Flexible Application: Suitable for use in vertical and horizontal wells, making it adaptable to various geological conditions.
  • Environmental Safety: Minimizes environmental impact while ensuring the secure containment of hydrogen.

Cat Campbell, Head of Geoscience at PureWave, highlighted the importance of this agreement, noting that: 

“This agreement represents a significant leap forward in PureWave’s commitment to developing safe and sustainable methods for capturing and storing naturally occurring hydrogen. By partnering with H2ERC, we are now equipped with groundbreaking technology that enhances containment and minimizes the environmental impact of our operations.”

Ultimately, hydrogen’s potential as a clean energy solution is coming to life through advancements by Nikola and PureWave. Nikola’s fuel cell innovations promise zero-emission transportation, while PureWave’s efficient production methods drive accessible, scalable hydrogen energy. Together, these efforts highlight hydrogen’s growing role in global decarbonization and the transition to a sustainable future.

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KlimaDAO JAPAN Launches Blockchain-Powered Carbon Credits Market

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KlimaDAO carbon credits blockchain japan

KlimaDAO (Decentralized Autonomous Organization), a global leader in blockchain-powered climate finance, is transforming the carbon credit market. Established in 2021, KlimaDAO leverages blockchain technology to enhance transparency, liquidity, and efficiency in carbon credits trading. With over 25 million tons of Verified Carbon Standard (VCS) credits migrated onto its blockchain platform and 600,000 tonnes retired on-chain, KlimaDAO is accelerating climate action worldwide.

Now, its Japan-based subsidiary, KlimaDAO JAPAN Co., Ltd., is pioneering an innovative project named KlimaDAO JAPAN MARKET. This platform aims to tokenize Japan’s J-Credits on the blockchain, enhancing accessibility and trust in the carbon credit ecosystem.

Blockchain Meets Carbon Credits: A Game-Changing Demonstration

According to the latest news, KlimaDAO JAPAN has initiated a beta test for its blockchain-based carbon credit marketplace. The KlimaDAO JAPAN MARKET is set to revolutionize the market by addressing key challenges such as low liquidity, opaque transactions, and complex processes.

KlimaDAO will use a globally recognized Carbonmark API smart contract to demonstrate how blockchain technology can enhance the transparency, reliability, and efficiency of carbon credit markets.

Moving on, the beta phase will focus on Japan’s J-Credit system which is a government-certified program for promoting carbon reduction initiatives.

KlimaDAO JAPAN Co., Ltd. Representative noted,

“We are very pleased to be collaborating with Mizuho Financial Group, Optage, and other advanced partner companies to launch the world’s first demonstration experiment of J-Credit blockchain transactions. The current carbon credit market faces a variety of challenges, including transaction opacity and complex procedures. KlimaDAO JAPAN MARKET aims to solve these issues and realize a more transparent and efficient market by utilizing blockchain technology.

Through this platform, we hope to create an environment where more people, from companies to individuals, can participate in carbon credit transactions and contribute to the decarbonization of Japan. Furthermore, by collaborating with the global KlimaDAO network, we will promote the globalization of Japan’s carbon credit market.

Toward the realization of a sustainable society, we will open up new possibilities through the power of technology. That is the mission of KlimaDAO JAPAN. We look forward to your participation and support.”

How the Demonstration Works

Now let’s understand how the demonstration will work:

First, the trial involves tokenizing J-Credits, making them tradeable as ERC-20 standard tokens called “J-Credit Tokens” on the Polygon blockchain. Each token will represent one metric ton of CO2 (1 t-CO2).

Trading will initially be limited to participating companies and local governments in a controlled environment. Eventually, they plan to open the platform to the public by spring 2025.

KlimaDAO JAPAN is partnering with the following organizations to ensure the project is successful:

  • OPTAGE Co., Ltd. provides corporate wallet solutions.
  • Mizuho Financial Group offers practical project support.
  • PBADAO oversees project management and development.

These collaborations bring expertise and credibility to the platform and foster trust among participants. Some notable companies that have agreed to participate include Blue Lab, Electric Power Development, ENERES, SoftBank, Uhuru, JPYC, Decarbonization Support, etc. Get the complete list here: press release.

KlimaDAO JAPAN Co., Ltd. blockchain carbon credits

Source: KlimaDAO JAPAN Co., Ltd.

Steps to Follow for the Demonstration

For Sellers:

  • Convert J-Credits into tokens called J-Kure Tokens using smart contracts.
  • List these tokens for sale on the KlimaDAO JAPAN MARKET.

For Buyers:

Buy J-Kure Tokens and carry out these actions:

  • Store the tokens in a digital wallet.
  • Use a smart contract to make the tokens invalid.
  • Receive and save the invalidation certificate in the wallet.
  • Transfer the tokens to the J-Credit Management Account.
  • Resell the tokens in a secondary market.

Notably, the demonstration period will last until the end of February 2025.

KlimaDAO JAPAN blockchain carbon credits

source: Medium.com

Innovative Use of Blockchain for Carbon Credits

The integration of blockchain technology with J-Credits introduces several advanced features. These carbon credits bring new possibilities through programmability and enable innovative services that may have been unattainable previously in traditional markets. Some attributes are:

  1. Tokenization of Credits: Converts traditional carbon credits into secure, tradeable digital tokens.
  2. Blockchain-Based MRV System: Links with a measurement, reporting, and verification (MRV) system for greater accountability.
  3. Programmable Functionality: Automates transactions, supports credit splitting, and integrates with stablecoins and financial products.

These features promise to revitalize the carbon credit market while promoting and supporting more adaptable climate change solutions.

Tackling Existing Carbon Credits Market Challenges

KlimaDAO aims to solve major problems in the carbon credit market, such as low trading options, ambiguous transactions, and complicated processes. These issues limit participation, reduce trust, and make the system difficult to navigate.

Using blockchain technology, KlimaDAO is simplifying the entire process and offering viable solutions. From this perspective, it will ensure real-time verification, cut out middlemen, and make credit issuance and trading faster and more reliable.

Looking ahead, the broader goal is to democratize carbon credit trading by creating a platform where both individuals and companies can easily buy and sell credits. This approach not only fosters broader involvement but also enhances Japan’s contribution to the global decarbonization goal.

Additionally, KlimaDAO will connect its global marketplace, Carbonmark, to this service. This will allow trading of international credits certified by EcoRegistry and the International Carbon Registry (ICR)

All in all, KlimaDAO’s innovative approach is paving the way for sustainable carbon markets in Japan as well as internationally. And by combining blockchain with carbon credits the market looks more transparent and efficient.

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Nickel Prices Fall to a 4-Year Low: What Causes The Plunge?

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Nickel Prices Fall to a 4-Year Low, What Causes The Plunge

Demand for battery-grade nickel is projected to grow significantly by the end of the decade due to rising electric vehicle (EV) adoption. However, the nickel market faced more volatility and uncertainty in November 2024, according to S&P Commodity Insights data. It is largely due to macroeconomic and political developments following Donald Trump’s U.S. presidential election victory. 

Trump’s Victory Fuels Nickel Market Volatility

Nickel is vital for producing stainless steel and alloys used in equipment, transport, buildings, and power generation. Major nickel producers include Indonesia, the Philippines, Russia, and Australia, with Indonesia having the highest nickel reserves while Australia has the most active mining projects. 

Global nickel reserves and active mining projects
Source: S&P Global

Nickel futures are traded on the London Metal Exchange (LME), reflecting its global industrial importance. The LME three-month nickel price dropped to a four-year low of $15,540 per metric ton on November 15. 

nickel prices drop 4-year low LME

Concerns over Trump’s potential economic policies, particularly their implications for China, the industrial metals’ top consumer, have fueled investor caution. A stronger U.S. dollar and increased LME nickel inventories further worsen the downward pressure on prices as shown above. This highlights a risk-off sentiment across metals markets.

  • Nickel prices initially saw an uptick after Trump’s election win, rising from $16,007 per metric ton on November 4 to $16,587 per metric ton on November 7. 

This temporary boost mirrored gains in U.S. equity markets. However, optimism quickly faded as the trade-weighted U.S. dollar index climbed to a one-year high, fueled by market expectations that Trump’s policies—such as higher tariffs on Chinese imports—could revive U.S. inflation. 

The prospect of prolonged high interest rates from the Federal Reserve further strengthened the dollar. This makes nickel and other commodities more expensive for non-dollar investors.

Investor sentiment in the nickel market took another hit following China’s unveiling of a 10 trillion yuan fiscal stimulus package on November 8. The measures failed to meet market expectations for more aggressive economic support. This disappointment, coupled with rising nickel inventories and a nearly 4x increase in net short positions on LME nickel, accelerated the price decline. 

By mid-November, the LME three-month nickel price had plunged to levels not seen since November 2020, underscoring the market’s vulnerability to both economic and geopolitical developments. 

nickel futures prices Trading Economics

In late November, nickel rebounded to $16,040 per tonne amid Indonesia’s tighter mining policies. Approved quotas could drop 27% by 2026, while license fees for low-grade ore may be reduced.

According to the Indonesian mining minister, nickel ore imports surged 50-fold, as officials prioritized domestic reserves and warned of dwindling stocks to stabilize prices.

IRA Under Threat: What Trump’s Plans Mean for Nickel and EVs

The implications of Trump’s election for the U.S. Inflation Reduction Act (IRA) add another layer of uncertainty to the global nickel market. 

Signed into law by President Joe Biden in 2022, the IRA has been a key driver of clean energy initiatives. This includes a $7,500 consumer tax credit for electric vehicles. 

However, Trump’s transition team is reportedly considering repealing this tax credit as part of broader tax reform efforts. Such a move could slow the adoption of EVs in the U.S. This could undermine a major driver of global primary nickel demand over the next five years.

Additionally, Trump’s administration may tighten the IRA’s foreign entity of concern (FEOC) guidelines, which currently disqualify companies with significant Chinese ownership from benefiting from the EV tax credit. For instance, Indonesia—a leading producer of nickel—has been working to reduce China’s influence to qualify for IRA incentives. 

In a recent deal between PT Vale Indonesia and China’s GEM Co., GEM’s stake in a $1.42 billion nickel plant was capped at 25% to comply with the guidelines. However, stricter FEOC rules could make it even harder for such projects to qualify for U.S. tax incentives. This can potentially limit Indonesia’s ability to expand its nickel exports to the U.S.

China remains a dominant player in Indonesia’s nickel sector. Between January and September 2024, Indonesia exported 129,860 metric tons of nickel sulfate exclusively to China. 

Indonesia nickel export to China

If Indonesia faces challenges in accessing U.S. markets due to stricter IRA policies, its reliance on China is likely to deepen. This dynamic could reshape global nickel supply chains, with potential long-term implications for battery manufacturing and EV production.

Short-Term Pain, Long-Term Gain? Nickel’s Future Outlook

Beyond U.S. policy developments, other global factors are contributing to nickel market uncertainty. Escalations in the Russia-Ukraine war have dampened investor confidence, while concerns about slowing economic growth in China continue to weigh on demand projections. 

The interplay of these factors has led to reduced risk appetite among investors, as evidenced by the sharp rise in short positions on LME nickel.

Despite these challenges, S&P Global’s fundamental outlook for primary nickel supply and demand remains broadly unchanged from previous forecasts. However, the near-term trading environment is expected to remain difficult. 

Amid all these challenging market conditions, an emerging player is targeting U.S. nickel independence. Alaska Energy Metals Corporation (AEMC) is leading efforts to support the U.S. energy transition through its flagship Nikolai project in Alaska. The site holds a significant resource of nickel, copper, cobalt, and platinum group metals essential for renewable energy and electric vehicles.

The Canadian nickel junior’s dual focus on sustainability and critical mineral supply underscores its commitment to reducing U.S. reliance on imports.

With the nickel prices already at a multi-year low, the market’s recovery will depend on clearer policy signals and stronger demand drivers, particularly from the EV and clean energy sectors. 

Disclosure: Owners, members, directors, and employees of carboncredits.com have/may have stock or option positions in any of the companies mentioned: AEMC.

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