Abatable VCM Report Reveals Developer CCP Approval Rates for First Time

According to a recent report by Abatable, a market intelligence and carbon procurement platform, the voluntary carbon market (VCM) stands at a pivotal moment with flourishing activity in the primary market and notable expansion in issuance and projects among the top 25 developers. The market underwent a period of significant change in 2023, marking a transition towards a new era of growth and investment.

Abatable’s VCM Developer Overview

Abatable’s Voluntary Carbon Market Developer Overview | 2023-2024 report highlights the developers that have leveraged the capital influx of 2024 to expand their portfolios. 

RELATED: Abatable Receives $13.5M from Azora and Acquires Ecosphere+

The report draws on aggregated data from over 3,000 project developers contributing to the major carbon credit registries. These include Verra’s Verified Carbon Standard (VCS), Gold Standard (GS), Climate Action Reserve (CAR), and American Carbon Registry (ACR).

The report further identifies key market themes to monitor in 2024 and clarifies supply- and demand-side trends. It highlights several crucial factors shaping the market:

Divergence among developers regarding quality standards, 
Merging of carbon and biodiversity efforts, and 
Heightened collaboration on corresponding adjustments. 

These dynamics are poised to exert a substantial influence on the market throughout the year.

Moreover, following the highly anticipated release of the Core Carbon Principles (CCPs) by the Integrity Council for the Voluntary Carbon Market (ICVCM) last year, the report provides the inaugural comprehensive evaluation of potential alignment with this groundbreaking quality standard.

For the first time, it reports on the percentage of issuances by developers currently undergoing ICVCM review for CCP approval

Commenting on the findings, Maria Eugenia Filmanovic, Co-Founder of Abatable said,

“While we have seen significant growth and interest in carbon credit initiatives and early indications show a move towards greater market integrity, challenges remain as we navigate the implications of the forthcoming Core Carbon Principles. It is essential for stakeholders to stay informed and proactive in addressing these challenges to ensure the continued effectiveness of the VCM.”

Supply, Demand, & Surplus: Analyzing Key Metrics Shaping the VCM

According to the report, the rise in market surplus resulted in price softening and increased price variability, especially among avoidance credits. Conversely, nature-based removal credits experienced a price increase due to limited supply and robust demand.

Despite ongoing challenges in the REDD+ (Reducing Emissions from Deforestation and Forest Degradation) market, the study highlights the continued dominance of REDD+ in the nature-based VCM sector. Seven of the top 10 largest nature-based VCM project developers are actively involved in REDD+ projects.

RELEVANT: What is REDD+? Development, Issues, and Solutions

The market would face growing oversupply in the coming years, the report noted. This trend is due to the substantial projected supply from verified projects or those in the verification pipeline. This is also likely to continue to exert downward pressure on prices unless there’s a significant surge in demand.  

On the supply side, there was a noticeable decrease in the proportion of credits issued by the top 10 developers in terms of issuances, reflecting the entry of new, smaller players into the market.

Additionally, for the 4th consecutive year, over 100 new project developers started issuing credits in 2023. This market development bolsters the existing supply with fresh vintages, as seen below.

There exists a notable opportunity for developers to pivot towards methodologies undergoing approval under the CCPs. Currently, a significant portion of the market comprises credits that are not eligible under CCP criteria.

About 54% of the market’s surplus credits were issued using methodologies currently under CCP review. However, not all of these methodologies are expected to be approved, which will increase the stock of credits that do not meet the market’s new quality baseline.

Buyer Trends and Market Concentration

The Abatable report also spotlights major trends on the buyer side.

In 2023, a record number of unique buyers entered the market and retired credits for the first time. Meanwhile, newcomers are starting cautiously by retiring smaller batches of credits. This influx of new participants reflects a growing interest and engagement in the carbon credit market.

More notably, increased scrutiny of the market in 2023 prompted more buyers to disclose their credit purchasing activities. This resulted in a reduction in the share of non-disclosing parties, from 56% in 2020 down to 44% in 2023.  

However, the market remains largely concentrated among the top 100 buyers. These top carbon credit buyers in 2023 were primarily (60%) from emission-intensive sectors such as energy, surface transport, and aviation. These companies prioritize the mitigation of their existing and future carbon liabilities, driving their active involvement in the market.

As the voluntary carbon market continues to evolve, stakeholders must remain vigilant in addressing challenges while capitalizing on emerging opportunities. With increased scrutiny and growing interest from diverse sectors, the path towards greater market integrity and sustainability is paved with informed decision-making and proactive engagement.

READ MORE: Carbon Prices and Voluntary Carbon Markets Faced Major Declines in 2023, What’s Next for 2024?

The post Abatable VCM Report Reveals Developer CCP Approval Rates for First Time appeared first on Carbon Credits.

India Challenges EU’s Carbon Border Adjustment Mechanism (CBAM)

As a major player in the global economy, India stands as an integral point of economic development and environmental responsibility. However, India is also the world’s third-largest emitter of CO2, after China and the US.

Studies show emissions could rise to 50% by the year 2030 in India. To counter this effect, a carbon tax has been implemented primarily aimed at reducing emissions and curbing the use of fossil fuels like coal, gas, oil, etc.

India’s proactive engagement in the G20, a response to the challenges posed by carbon emissions, and its collaboration with the EU underscore its commitment to global climate action. However, the overall picture is slightly different that what it seems at the outset.

In a recent development, the EU has decided to impose a carbon tax known as the Carbon Border Adjustment Mechanism (CBAM), effective from January 1, 2026, on the import of 7 carbon-intensive sectors including:

Steel products
Iron and iron ore concentrates
Cement
Aluminum products
Fertiliser
Hydrogen
Electrical energy

The CBAM roll out is planned in 4 phases as show in the following figure:

Source: indiabriefing.com

The tariff is as high as 20-35% on imports of these high-carbon goods. And now, India along with other Asian nations, have not taken this decision favourably. Rather, the bloc has strongly objected to the EU’s new, unfair tax policy.

Impact of EU’s Carbon Border Tax (CBT) on India 

Many government officials in India have considered the proposed CBAM as “discriminatory” and a “trade barrier” that would hit not only Indian exports but also those of many other developing nations. The World Trade Organization (WTO) has also raised concerns about the fairness of the EU’s taxation policy when India is already adherent to the Paris climate agreement protocols of becoming carbon neutral by 2070.

In 2022, 27% of India’s exports of iron, steel, and aluminum products worth USD$8.2 billion went to the EU. With this high tax value, the EU’s income is expected to surge by leaps and bounds while disrupting earnings for major Indian conglomerates like Tata Steel, Steel Authority of India, JSW Steel Group and Essar Steel India Limited.

In order to fully grasp the new CBAM tax implications, one only need to examine India’s exports to the EU in a single year (2022) as shown in the chart below.

Source: indiabriefing.com

India’s carbon tax rate is currently among the lowest in the world at just USD$1.6 per tonne of CO2 emissions. But The EU’s CBAM is poised to cripple India’s exports of energy-intensive items, including key trade items like steel, aluminum, cement, and fertilizers. The Indian export market is most likely to encounter increased production costs with a drop in demand and competition for their products within the European economy.

[PRESS RELEASE: India’s Green Actions – From Carbon Subsidy to Carbon Tax]

Among all these sectors, the steel industry is the toughest to decarbonize and has the highest carbon intensity, responsible for ~ 8% of global emissions.

It could be stated that the impact of the EU’s CBT on India will depend on the carbon intensity of exported products and their substitutes in the EU market. Products with high carbon intensity will face increased charges and low competition. However, if low-carbon alternatives for Indian products are unavailable in the EU market, the outcome of CBAM on Indian exports might be constrained.

Mr. Piyush Goyal, Commerce and Industry Minister of India has retaliated with his stern statement:

“India will address the problem of CBAM with confidence, and we will find solutions. We will see how we can convert CBAM to our advantage if it comes in. Of course, I will retaliate.”

The Indian government is seeking to file a complaint to the WTO against the EU’s tax policy to protect its domestic exporters and MSMEs. But the war of words doesn’t end there, with EU’s trade chief Valdis Dombrovskis stating:

“The European Commission had designed CBAM carefully so that it was compatible with WTO rules, applying the same carbon price on imported goods as on domestic EU producers”.

Yet, an amicable resolution of the conflict is still ongoing. India and the EU are in talks and are looking for solutions to minimize the impact of CBAM on the Indian carbon market.

READ MORE: Why India’s Path to Net-Zero is Different From Other Super-Emitters

India to Take Proactive Steps to Mitigate EU’s CBAM Fallout

While further developments are expected as this sage continues, the Indian government is already exploring various steps to tackle the potential consequences of the EU’s CBAM.

Developing a robust domestic carbon pricing system to incentivize emission reduction by companies and harmonize with the EU’s carbon goals. Encourage Indian businesses to analyze customs data, purchase and cost records, carbon footprints, transactional models, logistic flows, and overall global value chain. Evaluate the potential effect of CBAM on their operations and call for strategic changes to make Indian businesses more competitive.
Encouraging investment in renewable energy sources like solar and wind power, green hydrogen, and resilient agriculture to diminish carbon emissions. Most importantly, Mr. Piyush Goyal has also asked the automobile industry to boost electric vehicle (EVs) production to promote sustainable growth.
Ramping up domestic capacity and boost investment in carbon capture and storage technologies and mitigate the carbon footprint of heavy industries.

And while the EU’s carbon tax could be challenging for Indian industries, it might also spark a positive change in the Indian carbon market.

As we have seen, the Indian economy is highly resilient and can embrace the “challenge” as an opportunity for a smoother, green energy transition. The leaders of both parties are looking ahead to address the CBAM crisis diplomatically and fulfill their commitment to the Paris Agreement.

FURTHER READING: India Revises Its Carbon Credit Trading Scheme for Voluntary Players

The post India Challenges EU’s Carbon Border Adjustment Mechanism (CBAM) appeared first on Carbon Credits.

First Ethanol Facility to Issue Carbon Removal Credits

Red Trail Energy, (RTE), in collaboration with Puro.earth, has announced the issuance of carbon dioxide (CO2) removal credits on the Puro Registry. This marks a significant milestone as the first ethanol production facility to generate CO2 Removal Certificates (CORCs) in the voluntary carbon market (VCM)

The initiative also represents the largest durable carbon removal project registered to date. Red Trail Energy will make its CORCs available through its marketing arm, RPMG.

Ethanol’s Environmental Impact: A Corn-Based Revolution

Most of the biofuel produced in the United States is ethanol, derived from corn starch and commonly blended into gasoline. About 98% of gasoline sold in the U.S. contains a 10% ethanol blend.

During the early 2000s, energy policy initiatives aimed to enhance energy independence spurred a significant uptick in domestic ethanol production. From 2000 to 2018, U.S. corn ethanol output surged from 1.5 billion gallons to 16 billion gallons. 

Initial life cycle assessments (LCAs) estimated that U.S. corn ethanol would yield 20% lower GHG emissions compared to gasoline.

Image from RFA website

The most recent study commissioned by the Department of Energy (DOE), conducted by Argonne National Laboratory in 2021, revealed that U.S. corn ethanol exhibits 44%–52% lower GHG emissions than gasoline. Gasoline has a carbon intensity of about 89.5 grams of CO2e per megajoule (MJ) of energy delivered. 

Argonne’s analysis demonstrated a 20% reduction in carbon emissions from U.S. corn ethanol between 2005 and 2019. This decline can be attributed to advancements in agricultural practices. These include increased corn yields per acre, reduced fertilizer usage, and enhancements in ethanol production processes.

Red Trail Energy’s Pioneering Carbon Capture Efforts

RTE operates a corn ethanol production facility with an annual capacity of 64 million gallons. The CO2 generated during the ethanol fermentation process is captured and stored to prevent its release into the atmosphere. 

RTE’s facility is the first of its kind permitted under state regulations to capture and store CO2 in a Class VI well. It can capture and store approximately 180,000 tons of CO2 annually.

The captured biogenic CO2 is injected into an underground Class VI well located beneath the facility for permanent storage. RTE has implemented continuous efforts to minimize the fossil footprint associated with its main product, biofuel, through energy efficiency measures and sustainable agricultural practices.

RELATED: Tax Incentives and Carbon Credits for Biofuels

Red Trail Energy’s project was in partnership with the clean energy advisory firm EcoEngineers and was registered under the Puro Standard. The standard is the leading crediting platform for engineered carbon removal. 

The carbon removal credits are generated through bioenergy with carbon capture and storage (BECCS) from ethanol production. They adhere to Puro’s Geologically Stored Carbon Methodology. 

Before CORCs issuance, RTE underwent independent verification and met all requirements related to feedstock sustainability, carbon sequestration permanence, and financial additionality.

RTE captures CO2 emitted during the fermentation process at its ethanol plant. Then it sequesters it into a permitted underground Class VI well located approximately 6,500 feet beneath the facility. 

The resulting carbon removal credits will be available as CORCs to support buyers in complementing their emission reduction efforts towards achieving net zero targets.

Jodi Johnson, Chief Executive Officer of Red Trail Energy, expressed pride in achieving this milestone, emphasizing the significance of being among the first bioenergy facilities with BECCS and pioneering the provision of verified CDR credits to the market. 

Antti Vihavainen, Chief Executive Officer of Puro.earth, said:

“The significance of RTE’s CCS project cannot be overstated, as it serves as a compelling demonstration that through stringent methodologies for carbon removal and the financial incentives from CORCs, the vital infrastructure required for large-scale carbon sequestration will materialize.”

Driving Carbon Removal Forward

With guidance from EcoEngineers and through Puro.earth, RTE received over 150,000 CO2 Removal Certificates from the initial 14 months of operation of its bioenergy with carbon capture and storage (BECCS) project.

David LaGreca, Managing Director of VCM Services at EcoEngineers, emphasized the importance of supporting high-quality removal programs. This is even crucial in the context of global carbon budgets and the imperative to reduce emissions. 

The Puro.earth’s CORCs indicate durability of carbon sequestration for over 1,000 years, meeting key environmental criteria for permanence. These CORCs are listed in the International Carbon Reduction and Offset Alliance (ICROA)-endorsed Puro Registry. As such, their traceability and transparency throughout their lifecycle, from issuance to retirement, are high.

Sales of CORCs in voluntary markets are crucial for supporting the development of carbon capture and storage (CCS) projects. They also help mitigate financial risks associated with carbon removal initiatives.

The CORCs generated by RTE comply with rigorous scientific and market requirements, including criteria for additionality and permanence. These CORCs can complement other incentives aimed at reducing carbon emissions. 

READ MORE: Xpansiv and Puro.earth Partner to Scale Carbon Removal Credits Market

Red Trail Energy’s collaboration with Puro.earth marks a pivotal moment in ethanol production, pioneering the issuance of carbon removal credits. By capturing and storing biogenic CO2 emissions, Red Trail Energy sets a precedent for sustainable practices, showcasing the vital role of innovative technologies in combating climate change.

The post First Ethanol Facility to Issue Carbon Removal Credits appeared first on Carbon Credits.

SEC Finalizes New Climate Disclosure Rule: Here’s What’s New

The Securities and Exchange Commission (SEC) approved a new rule mandating publicly traded companies to disclose their direct greenhouse gas emissions. The proposal received backing with 3 votes to 2 at a recent SEC meeting. 

The newly passed legislation titled “The Enhancement and Standardization of Climate-Related Disclosures for Investors” also requires US-based companies to disclose details on their use of carbon offsets, including the associated costs if the credits contribute to their emissions reduction targets. They also need to describe how climate change impacts their operations, financial condition, and strategies. 

Moreover, companies must explain the risks and how they’re managing them, such as the impact on revenue and expenses. 

RELEVANT: A Deep Dive into SEC’s Proposed Climate Disclosure Rule for Sustainability

What Emission Scopes Are Mandated?

The original SEC proposal initially required companies to disclose their Scope 1, 2, and 3 emissions. But Scope 3, which garnered controversy, was ultimately excluded in the final rule. 

Scope 1 refers to emissions directly emitted by the company while Scope 2 covers emissions from the fuel and energy purchased by the company. Whereas Scope 3 pertains to emissions generated by customers and suppliers. 

Scope 1 and 2 emissions are mandatory to report on, provided the company considers the information “material” to investors. Having this vital climate-related information will give investors insights to come up with informed decision-making. 

Scope 3 emissions were the subject of significant controversy due to the challenges associated with calculating indirect emissions, which impose the highest compliance costs on companies. Big companies, particularly those in the fossil energy sector, opposed this reporting requirement.

Thus, following an extensive public comment period, which garnered 4,500 letters and 24,000 comments, the requirement to disclose Scope 3 emissions was ultimately dropped.

For the past 2 years, the SEC has been deliberating on formulating standardized requirements for corporate climate disclosure. The goal is to establish a minimum standard for transparency in boardrooms. 

Now, the increased transparency required on the use of offsets would influence future purchases of carbon credits.

According to the final rule, companies will now be obligated to provide a detailed breakdown of the costs associated with carbon credits. Specifically, the approved proposal mandated that:

“The capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates (RECs) if used as a material component of a registrant’s plans to achieve its disclosed climate-related targets or goals, disclosed in a note to the financial statements…”

This disclosure requirement is one of 3 main categories of information mandated in the amendments to the SEC’s final rule. 

Unpacking SEC New Rule’s Key Provisions

While it’s essential for every company to thoroughly understand the SEC’s official rule, spanning almost 900 pages, 3 key provisions stand out:

“Accelerated filers,” which are companies with publicly traded shares valued at $75 million or more, are mandated to disclose Scope 1 and 2 emissions.
Costs stemming from severe weather events and other natural disasters must be disclosed on financial statements.
Companies are obligated to disclose both the actual and potential material impacts of climate-related risks on their strategy, business model, and outlook.

The SEC made a significant revision to its earlier draft by removing a requirement to disclose expenditures related to “general energy transition activities” in financial statements. 

Instead, the final rule focuses specifically on disclosing expenditures related to carbon offsets and RECs, as confirmed by SEC officials.

Go over to SEC’s fact sheet that summarizes the specific rules that a registrant has to disclose.

The Commission estimates that around 2,800 companies have to prepare to report on their climate-related financial risks. That’s 40% of the 7,000 US public companies registered with the SEC.

Meanwhile, about 60% of the 900 SEC-registered foreign private issuers may also be subject to the new rule.

Accelerated filers, in particular, need to start disclosing their Scope 1 and Scope 2 emissions in 2026. Below are the compliance dates companies have to keep in mind based on their filer status:

LAF=Large Accelerated Filers, Non-Accelerated Filer (NAF), Smaller Reporting Company (SRC), or Emerging Growth Company (EGC).

Mixed Reactions: The Impact of SEC’s Climate Disclosure Rule

The new climate disclosure rule received both praise and criticism. Former SEC commissioner Allison Herren Lee commented that:

“The new rule, unfortunately, does little to prevent companies from making vague, untested and, most significantly, unsubstantiated, statements about their carbon footprints.”

On the other hand, supporters of the new rule noted that it’s a great milestone. For Lane Jost, head of ESG advisory at Edelman Smithfield, 

“There is ample room to argue the validity of this rule on all sides, but regardless, this is a historic day for enhancing common, comparable, and credible disclosure rules on climate risks for investors and issuers.”

The SEC rule marks a significant addition to the expanding global regulatory landscape for corporate climate disclosures. International companies gear up to comply with Europe’s Corporate Sustainability Reporting Directive, which mandates climate disclosures. And with California’s carbon emissions disclosure requirements introduced last year, the SEC’s rule further underscores the increasing importance of climate-related transparency in corporate reporting.

READ MORE: California Sets Precedent with New Corporate Climate Disclosure Laws

The post SEC Finalizes New Climate Disclosure Rule: Here’s What’s New appeared first on Carbon Credits.

Carbon Offset ETF, KSET, to Stop Trading by March 14

The KraneShares Global Carbon Offset Strategy ETF (KSET) will halt trading this month due to a lack of investor interest following a significant decline in carbon prices within the voluntary carbon market (VCM). The trading of KSET will be halted along with 3 other ETFs dedicated to China.

Exchange-traded funds, ETFs, serve as vehicles for retail investors to access various asset classes, including equities and commodities. ETFs offer investors exposure to companies involved in carbon markets, renewable energy, and climate-related initiatives. 

By investing in ETFs focused on carbon markets, investors can support the transition to a low-carbon economy while potentially generating financial returns. These ETFs provide diversification benefits by offering exposure to a range of companies across sectors involved in addressing climate change. 

The Rise and Fall of KSET

With the growing importance of carbon markets in mitigating greenhouse gas emissions, ETFs serve as an accessible and efficient investment vehicle for investors seeking to incorporate sustainability into their portfolios.

Launched less than two years ago on the New York Stock Exchange amid high anticipation for VCMs, KSET aimed to provide retail investors with access to carbon markets. 

RELATED: KraneShares Debuts US-Listed Global Carbon Offset ETF “KSET”

Known for its diverse range of ETFs, KraneShares has been introducing innovative investment solutions to the market. KraneShares has expanded its portfolio to include the KEUA (European Carbon Allowance ETF) and KCCA (California Carbon Allowance ETF) introduced in October 2021.

The asset management firm builds on the success of its previous ventures, such as the KRBN Global Carbon ETF launched in 2020, which offers exposure to carbon credits from the EU ETS, California’s CCA carbon credits, and the RGGI of the northeastern United States.

KraneShares’ commitment to providing investors with unique and forward-thinking investment strategies was evident through the launch of KSET. However, economic turmoil soon after its inception led to a decline in the ETF’s value.

Krane announced that KSET, along with three other ETFs focused on China, will cease trading on the NYSE on March 14, 2024. The decision comes as the ETF struggled to maintain interest from investors. 

As seen in the chart from Trading View, KSET trading price has sharply dipped. From trading over $6 in March 7 last year, current price plummeted to below $1. That represents an 85% decrease in trading price.

Investor Sentiment: Challenges and Opportunities in VCM

While KSET was the pioneer ETF dedicated to voluntary carbon offsets, other similar funds have emerged since its launch. Krane emphasized that its ETFs tracking compliance carbon markets, including KRBN, KCCA, and KEUA, will continue to operate.

Luke Oliver, Krane’s head of climate investing, expressed optimism about the long-term prospects of VCMs but acknowledged investors’ current reluctance to engage with VCMs through ETFs. He remarked that:

“Investors are just not ready to allocate to the VCM in this format at this time and fine-tuning our ETF offering is a constant process. We will continue to monitor the market closely.”

The voluntary carbon market has been scrutinized for questionable offsets delivered by some projects. Last year has been a trying time for the VCM when prices were plummeting, particularly nature-based carbon offsets. 

However, this year is seen to be the turning point for the market as reports show notable results. Viridos AI report saw January 2024 having more carbon credit retirements in comparison to the same month last year. And companies are not just after buying carbon offsets; they’re more into prioritizing credibility and real impact. 

RELEVANT: Carbon Prices and Voluntary Carbon Markets Faced Major Declines in 2023, What’s Next for 2024?

ETFs are just one option to invest in carbon market assets and there are other investment vehicles in place. Go over this guide to learn more about how to invest in the market.

While the halt of KSET highlights current investor apprehension, it also signals the evolving nature of VCM investments. As the market matures and regulatory standards strengthen, opportunities for sustainable investing in carbon markets may become more robust.

The post Carbon Offset ETF, KSET, to Stop Trading by March 14 appeared first on Carbon Credits.

Funding Bill Grants $2.7B to American-Made Nuclear Reactor Fuel

The nuclear energy landscape in North America is undergoing a significant transformation, with both the US and Canada making strides to bolster their nuclear capabilities. From reviving uranium enrichment in the US to Canada’s embrace of nuclear financing, the region is on the road to a nuclear energy resurgence.

Breaking U.S. Nuclear Dependence

The US uranium enrichment sector stands to receive a substantial $2.7 billion injection as part of a government funding bill. This initiative reflects a strategic move to reduce reliance on nuclear fuel imported from Russia. 

Proposed by the White House, the funding is integral to President Joe Biden’s broader plan to procure enriched uranium directly from domestic sources. The goal is to revitalize nearly dormant US capabilities by establishing a guaranteed buyer for American-made nuclear reactor fuel.

The move coincides with potential legislative measures to restrict imports of enriched uranium from Russia. The NO RUSSIA bill, National Opportunity to Restore Uranium Supply Services In America Act of 2022, expels Russia’s influence from the U.S. uranium market. 

READ MORE: The US House Passed a Bill that Just Repatriated the Nuclear Cycle from Russia’s Control

The provision of enrichment funding is based upon implementing limitations on the importation of enriched Russian uranium. The fund is from a credit program for domestic nuclear reactors established in the bipartisan infrastructure law of 2022. 

The allocated funding is specially dedicated to cultivating a market for domestically produced enriched uranium. This uranium serves as fuel for the US fleet of over 90 nuclear reactors, as well as for highly enriched uranium used in emerging advanced reactor technologies, currently monopolized by Russia.

In December 2023, after over 50 years, the U.S. issued approval for a groundbreaking nuclear reactor developed by Kairos Power.

The California-based startup has been granted a construction permit by the Nuclear Regulatory Commission (NRC) for its Hermes demonstration reactor in Tennessee. The novel reactor uses molten fluoride salt as a coolant, a more efficient technology than conventional water-cooled nuclear reactors. 

The NRC has also granted certifications to other innovative nuclear developers, e.g. NuScale Power and Centrus Energy Corporation, in collaboration with the Energy Department. Most initiatives involved small nuclear reactors (SMR), generating under 300 MWe capacity.

READ MORE: How Nuclear Energy in the U.S. Got Its Groove Back, Poised to Soar in 2024 

These developments indicate a shifting regulatory stance toward innovative approaches to nuclear power generation in the U.S.

Financing the Canadian Nuclear Renaissance

Over in Canada, the federal government amended its green bond programs. They now permit the financing of nuclear projects and navigated an initial test of investor support for this energy source. 

Notably, about 15% of the country’s electricity comes from nuclear power. Most of the 19 reactors are in Ontario which provides 13.6 GWe of power capacity. 

The sovereign and the province of Ontario issued a combined C$5.5 billion or US$4.1 billion in securities. This marked the first two offerings under the revised Green Bond Framework for green debt that allow funding for nuclear initiatives. Previously, the framework didn’t include nuclear energy from getting financial support.

The recent $4 billion issuance by the Canadian sovereign did not explicitly earmark proceeds for nuclear power projects. Still, the federal government emphasized its commitment to nuclear development. Also, investors have eagerly subscribed to the 10-year debt offering, with orders surpassing $7.4 billion, nearly double the final amount.

Powering Ahead: Canada’s Ambitious Nuclear Expansion Plans

Canada aims to develop both new large-scale nuclear capacity and SMRs. In 2018, Natural Resources Canada (NRCan) unveiled its SMR Roadmap, outlining a strategic plan for the advancement of nuclear technology centered around SMRs. 

In February 2023, the Canadian government initiated the Enabling Small Modular Reactors Program. It allocates about US$22 million to facilitate the advancement and implementation of SMRs. 

Another notable nuclear development in Canada is Ontario’s 2015 decision to greenlight the refurbishment or lifetime extension of 4 nuclear units at Darlington and the remaining 6 units at Bruce (with the initial 2 units already refurbished). This ambitious C$26 billion 15-year program stands as one of the most significant clean energy endeavors in North America.

Bruce Power, an Ontario-based company aiming to construct the world’s largest nuclear power plant, announced that all its future bonds will adhere to green financing principles. The nuclear power developer also introduced at COP28 last year the first carbon offset protocol for nuclear generation. 

James Scongack, Bruce Power’s Chief Development Officer, noted that investor appetite for green securities is shaping their future fundraising strategies. He further noted that:

“With the demand we see for green bonds, we have no doubt all future bonds funding nuclear projects will be green bonds.”

The inclusion of nuclear projects reflects a growing acceptance of nuclear power to decarbonize and enhance energy security. This development signifies a significant shift in green finance and underscores the evolving role of nuclear energy in Canada’s sustainability efforts.

By embracing nuclear power, the US and Canada are paving the way for a sustainable energy landscape while enhancing energy security.

READ MORE: Nuclear Power to Break Global Records in 2025, IEA Predicts

The post Funding Bill Grants $2.7B to American-Made Nuclear Reactor Fuel appeared first on Carbon Credits.

Hot Funds for Cool Tech: Geothermal Company Fervo Energy Raises $244M

Geothermal startup Fervo Energy Co. secured a substantial $244 million round, led by shale oil and gas giant Devon Energy Corp. The Houston-based geothermal developer’s fundraising topped this week’s Crunchbase biggest funding rounds. 

The raised funds exceeded what Fervo Energy disclosed in its recent SEC filing, aiming for $221.5M funding. The capital infusion will bolster Fervo’s drilling endeavors in Utah. The project could start supplying clean electricity to the grid by 2026. 

Founded in 2017, Fervo has amassed $431 million in funding, according to Crunchbase records.

Tapping Earth’s Heat: Fervo Energy’s Geothermal Breakthrough 

Fervo Energy focuses on leveraging horizontal drilling technology, originally pioneered by the oil and gas sector, to harness geothermal resources for power generation. 

In collaboration with Google LLC, the company completed an enhanced geothermal system (EGS) pilot project in Nevada in November 2023. This initiative caters to some Google data centers in the state.

READ MORE: Fervo Energy’s Breakthrough in Enhanced Geothermal Systems: A Game-Changer for Renewable Energy

Fervo’s successful demonstration is the first instance of an enhanced geothermal system implemented on a commercial scale.

Geothermal energy, often dubbed the “heat beneath our feet,” currently contributes 3.7 gigawatts of electricity in the U.S. That amount could power over 2.7 million homes, but this constitutes only a fraction of its immense potential.

A considerable portion of geothermal energy remains untapped due to technological limitations, leaving vast energy reservoirs unexploited.

This is where the EGS holds promise in unlocking these resources and introducing clean, and dispatchable electricity to the grid. This geothermal system employs man-made reservoirs to facilitate fluid flow, enabling the extraction of hot water for electricity generation. 

Drilling for Tomorrow

The technical potential of EGS in the US alone could meet global electricity demands.

Even harnessing a fraction of this resource through widespread deployment could feasibly power 40+ million American homes and businesses affordably. Moreover, investments in EGS will promote the proliferation of geothermal heating and cooling solutions nationwide. This, in turn, will provide exponential opportunities for sustainable energy utilization.

Currently, Fervo Energy is engaged in a drilling campaign at its 400-MW Cape Station project in southwestern Utah. Early results from this endeavor have surpassed the expectations set by the US Energy Department for enhanced geothermal systems. 

The company has received a grant from the DOE for the Utah project to showcase the potential of EGS in delivering reliable and cost-effective electricity.

Before this offering, Fervo Energy had secured a combined $176.63 million across three disclosed funding rounds, according to data from S&P Global Market Intelligence. Investors in the company include oil and gas firms Devon Energy Corp., Liberty Energy Inc., and Helmerich & Payne Inc., as well as Breakthrough Energy LLC, a venture capital firm backed by Bill Gates.

DOE’s Green Push for America’s Clean Energy Future

The U.S. DOE announced a plan to allocate up to $60 million to 3 geothermal pilot projects as part of the enhanced geothermal systems pilot demonstrations funding opportunity. Fervo Energy’s project is one of them, aiming to generate at least 8 MW of power from each of 3 wells. 

The initiative is spearheaded by the DOE’s Geothermal Technologies Office, a component of the Office of Energy Efficiency and Renewable Energy.

The other two selected projects include Chevron New Energies’ pilot endeavor. It will use drilling and stimulation techniques to access geothermal energy in Sonoma County, California.

Additionally, Mazama Energy LLC’s demonstration on an enhanced geothermal system near a volcano in Oregon was chosen.

US Secretary of Energy Jennifer Granholm expressed enthusiasm for the projects, noting their potential to expand geothermal power into previously untapped regions. She also noted that:

“…these pilot demonstrations will help us realize the full potential of the heat beneath our feet to reduce carbon emissions, create domestic jobs, and deliver clean, cost-effective, reliable energy to American[s] nationwide.”

The DOE plans to support further demonstrations in the eastern US in the second round of funding. With a goal to slash the cost of enhanced geothermal systems by 90% by 2035, the Biden administration aims for 100% clean electricity by that year. 

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

Geothermal resources currently contribute around 4 GW of electricity in the US. Still, advancing enhanced geothermal systems could potentially yield 90 GW of power by 2050, which power over 65 million households. That projection is according to a January 2023 analysis by the DOE’s National Renewable Energy Laboratory.

Fervo Energy’s groundbreaking geothermal system, fueled by a $244 million funding round, signify a pivotal shift towards sustainable energy solutions. With ambitious projects and support from industry giants, Fervo is poised to lead the charge towards a cleaner, greener future.

The post Hot Funds for Cool Tech: Geothermal Company Fervo Energy Raises $244M appeared first on Carbon Credits.

China’s Grip On Rare Earth Elements Loosens

Friction from the West is Loosening China’s Grip on Rare Earths Elements 

As the world grapples with the urgent need for decarbonization to combat climate change, China’s top position in the production of rare earth elements (REEs) and its growing influence in the carbon credit market have had profound implications for the global energy transition

China currently dominates the market supplying over 80% of the world’s rare earth elements. Considered a monopoly in most political circles, its prominent position has raised concerns among many nations about the vulnerability of their supply chains and the geopolitical implications. But is this tension a sign of possibile future supply limitations that pose a threat to the decarbonized future?

REEs are a set of 17 metallic elements with unique electrical and magnetic properties, playing a crucial role in the mineral supply chain market. Their applications range from magnets powering electric vehicles (EVs) and wind turbines to defense systems using precision missiles, fighter jets, and submarines, energy-efficient lighting systems etc.

All these factors come down to one thing: green energy transition, because:

China leads the production of key materials for EV batteries, refining 68% of the world’s cobalt, 65% of nickel, and 60% of lithium meeting the required grade. Additionally, it holds a significant share of ~ 75% of EV batteries, and the majority of them are manufactured in China.

China maintains its position in the rare earth industry due to its comprehensive control over the entire production chain and a substantial scale in the world economies. China’s advantages extend from mining raw materials to producing high-purity rare earths, facilitated by a cost-effective labor force.

Is this enough to sustain China’s dominance in the long run? It’s indeed a matter of concern and the answer is that there are numerous loopholes in marketing strategies, political scenarios, and supply chain management.

Interdependence of global decarbonization goals and China’s REEs

The concentration of REEs in China raise concerns worldwide. Although, the US Department of Energy once said:

“the US decarbonization goals are reliant on both Chinese firms and the Chinese government”

Yet the current geopolitical scenario is slightly different. The prime issue is that no matter where the REEs are mined, they need to undergo processing in China. This grants China substantial influence over various supply chains. But in this ESG-conscious era, investors, suppliers, and consumers must be more aware of the environmental effects of their purchases.

The extraction of rare earth minerals is a complex process and has raised serious climatic concerns. A study from the Harvard International Review stated,

“Mining to produce one ton of rare earth elements results in nearly 30 pounds of dust, 9,600-12,000 cubic meters of waste gas including substances such as hydrofluoric acid and sulfur dioxide, 75 cubic meters of wastewater, and one ton of radioactive residue—2,000 tons of toxic waste altogether.”

The report also mentioned that the world’s largest rare earth element mine, Bayan-Obo in China, produced over 70,000 tons of radioactive thorium waste which is stored in a tailing pond that has leaked into groundwater.

China, being the prime market for REEs must adopt ways to make large-scale mining more sustainable and greener. Some latest technologies include:

Electrokinetic method is used by many Chinese companies to improve the leaching process and quantity of the extracted minerals. It’s mostly suitable for heavy REE with high atomic numbers like dysprosium and terbium.
Biomining is a highly sustainable process that incorporates microbes to do the leaching process. One such species is the cyanobacteria- it produces organic acid to extract the REE from recycled e-waste, ores, and wastewater.
Agromining – the process incorporates plants that have hyperaccumulation and rapid-growth capacity on REE-rich soil. Researchers say agromining works most efficiently for nickel.

However, all the sustainable alternatives mentioned above are yet to be examined deeply considering their practical values and cost effectiveness.

We can infer that China to remain in the top position in the carbon market and REEs, must operate in socially and environmentally responsible ways. The country further needs to ensure transparent supply chains free from human rights infringement and environmental damage.

READ MORE : China’s CO2 Emissions Up 4% in Q1 2023, Hit a Record High 

On the other hand, the West is putting serious efforts to decrease dependence on China for rare earth mineral supply. They are exploring technologies to replace REEs or use fewer REEs.

For example, Tesla recently announced plans for next-generation motors using rare earths-free magnets. There’s a mixed review of this move. While some industry pundits say it would have minimal effect on the market because they believe EVs without rare earth will have a very low success rate. While others consider this to be a revolutionary move. It is further predicted that production of EVs in the coming years won’t experience a slump if they become independent of rare earth minerals. This in turn will directly push the carbon market and mitigate carbon dioxide emissions.

These are just some of the factors responsible for REE’s geopolitical conundrum and have given rise to an important question – does a fair trade agreement exist between China and the West over rare earth elements?

Will Friction from the West Loosen China’s Grip on REEs? 

The US and Europe have shaken hands and signed deals without China. President Biden and his allies prioritize technology and green energy, while Global South nations, like India, push for EV adoption to boost energy independence.

One notable collaboration involves US and European rare earth companies processing monazite sands in Utah, followed by shipping rare earth carbonates to Estonia for further refinement.

In recent news, the United States Department of Defense (DoD) granted a $120 million contract to Australia’s Lynas Rare Earths to construct a heavy rare earths separation facility in Texas. Lynas USA LLC, a subsidiary of Lynas Rare Earths Ltd, will own and operate this facility. The objective of the contract is to bolster domestic industrial capacities for heavy rare earth elements (HREEs), involving metals like gadolinium, dysprosium, and ytterbium.

Japan has also fortified its rare earth supply chain by increasing investments in Lynas, securing a steady supply of heavy rare earths. According to UN Comtrade data, Japan has succeeded in this strategic move to decrease its rare earth dependence on China from over 90% to 58% within a decade.

Source: elements.visualcapitalist.com

The graph above showcases China’s share of global production of REE market is expected to go down from 92% in 2010 to 58% in 2020.

Despite the solid efforts put in by the US, Europe, and Japan, China continues to defend its monopoly. It has aggressively expanded its international market by acquiring stakes in some of the largest mining companies like MP Materials (US) and Vital’s Metals (Australia).

China’s tax system and production quota are highly meticulous. It has imposed 13% VAT on magnets, metals, and oxides. Simply put, domestic rare earth product manufacturers have a 13 % cost advantage in the supply chain over foreign competitors. Thus, if countries decide to diversify their rare earth supply chains away from China, it could result in increased costs for those nations.

Will this Geopolitical Tension be a Roadblock to the Green Energy Transition? 

A survey conducted by The Oregon Group, explains that 2024 is expected to witness persistent volatility and surged prices in major commodities and rare earth minerals. Contributing factors are:

supply constraints
geopolitical tensions
long-term underinvestment

This economic contraction particularly in the US and China can potentially supress demand and supply, especially in the critical mineral sector. It’s foreseeable that in the current year and beyond, a distinct divergence in critical mineral prices between Western nations and China may not manifest. And this leads one to the conclusion that if geopolitical tensions and inefficient strategic planning persist between the leading economies of the world, then energy transition goals for sustainable low-carbon future are most likely to get hindered.

The post China’s Grip On Rare Earth Elements Loosens appeared first on Carbon Credits.

Flying High: How Does Taylor Swift’s Eras Tour Impact the Environment?

Taylor Swift’s global stardom is undeniable, captivating millions of fans worldwide with her music and performances. However, behind the glitz and glamour of her Eras Tour lies a less glamorous reality: the environmental impact of her frequent air travel, particularly her flights’ carbon emissions.

Swift’s Eras Tour takes her to various destinations globally, requiring extensive air travel for herself, her crew, and equipment. This constant jet-setting contributes significantly to carbon emissions, intensifying climate change and environmental degradation.

Flying High: The Environmental Toll of Celebrity Air Travel

The aviation industry is a major emitter of greenhouse gases, particularly carbon dioxide (CO2), which is released during the burning of jet fuel. It’s one of the fastest-growing sources of CO2 emission, responsible for about 2% of the global carbon emissions. Airlines emit over 900 million tonnes of CO2 annually.

According to the International Council on Clean Transportation, a round-trip flight from New York to London emits around 1.6 metric tons of CO2 per passenger. But that emission is based on data from commercial flights, which have a much lower footprint than private jet flights.

Private jets stand out as the most environmentally harmful travel option. According to Transport & Environment, an individual flying on a private plane emits 10 to 20 times more CO2 than a passenger on a commercial airline.

Moreover, air travel’s impact extends beyond CO2 emissions. Aircraft emit other pollutants, such as nitrogen oxides, particulate matter, and water vapor, which all contribute to air pollution. 

To address such environmental concerns and reduce harmful emissions, some airlines have made operational improvements and technological advancements. Examples are using low-carbon jet fuels and more energy-efficient aircraft components and technologies. 

Still, the sheer volume of air travel associated with large-scale tours like Swift’s Eras Tour presents a significant environmental challenge.

Additionally, Swift’s tour involves transporting equipment, stage props, and merchandise across continents, further increasing carbon emissions through transportation logistics.

How Big is Swift’s February Tour Flight Carbon Footprint?

Focusing on the pop star’s frequent flying since her Eras Tour started in March last year, the emissions are sky-high. Let’s consider her previously completed February tour, consisting of 11 total shows in three different cities: Tokyo, Sydney, and Melbourne. 

Carbon emissions data for specific flights can vary depending on factors such as route efficiency and passenger load. However, using figures based on estimated emissions data will provide a general idea of the CO2 footprint associated with Swift’s air travel between those cities.

From her home base in New York City to Tokyo, Japan, the estimated CO2 emission is around 48 metric tons (Mt) of CO2 per the Paramount Business Jets carbon footprint calculator. The company’s private jet carbon offset calculator is a tool that helps in calculating the CO2 emissions of trip using various private aircraft types and categories.

After her last show in Tokyo on February 10, Swift flew to Las Vegas to support her boyfriend Kansas City Chiefs Travis Kelce at the Super Bowl LVIII. That known flight made the singer emit 40 Mt of CO2. 

READ MORE: Carbon Footprint Controversy For Taylor Swift Ahead of Super Bowl LVIII

Assuming that Swift went back to her Manhattan abode, her flight emitted another 17 Mt of CO2. 

Then on February 16, Swift had flown to Melbourne, Australia to perform her 3-day Eras Tour show. Using the same calculator, flying on her jet to take that route emitted 147 Mt for a roundtrip back home. 

Lastly, Swift went back to Australia on February 23, this time in the capital city to complete her February schedule. She performed for four days straight in Sydney until February 26. This part of Swift’s Eras Tour flight released 141 Mt of carbon emission, from New York to Sydney and back. 

The Sky’s the Limit for Taylor Swift’s Eras Tour Carbon Emission 

Overall, flying in her private jet to attend the 11 Eras Tour shows for February alone made Taylor Swift responsible for emitting a total of 393 Mt of CO2. Putting that into perspective, an average person in the U.S. emits around 16 tons or 14 metric tons yearly. 

That’s how huge Swift’s air travel emissions are – 28x more than an average person emits in a year. That didn’t even include the emissions of the shows themselves and the fans who have traveled from various destinations, too.

Factor in the rest of her Eras Tour shows, starting from March 2023 until December 2024 and the figure explodes.

While Swift herself may not be solely responsible for the environmental impact of her tour, her high-profile status and influence could be harnessed to promote sustainability within the entertainment industry

Artists like her could take some steps to mitigate their environmental footprint. These can be investing in renewable energy initiatives, advocating for eco-friendly touring practices, and implementing carbon offset programs. Swift’s spokesperson confirmed that she’s into carbon offsetting and has bought offsets to cover her tour travel. 

READ MORE: Taylor Swift Turns to Carbon Offsets for Her Sky-High Footprint

In conclusion, while Taylor Swift’s Eras Tour undoubtedly entertains millions of fans worldwide, it also underscores the environmental costs associated with extensive air travel. As society increasingly grapples with the urgency of climate change, it becomes imperative for both artists and fans to consider the environmental consequences of large-scale tours and work towards more sustainable alternatives.

The post Flying High: How Does Taylor Swift’s Eras Tour Impact the Environment? appeared first on Carbon Credits.