Northern Trust Reveals Digital Carbon Credit Platform

Northern Trust revealed that it has completed the first stage toward a broad voluntary carbon credit ecosystem that will enable institutional buyers to digitally access carbon credits from major project developers.

Northern Trust is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent individuals. 

The Chicago-based company had assets under custody of $14.5 trillion, and assets under management of $1.4 trillion. Apart from its US offices, it also has a global presence across Canada, Europe, Asia-Pacific, and the Middle East.

Connecting Institutional Buyers and Carbon Credit Suppliers

Northern Trust’s announcement follows its significant achievement in successfully accomplishing automated transactions on its first minimum viable product (MVP) digital carbon credit platform. The institutional buyers of these transactions include the UK consultancy Mycarbon, tech company White Star Capital, and Northern Trust itself. 

This initiative is part of the company’s Digital Assets and Financial Markets group which supports the fast-growing digital asset markets. Their work also helps those seeking to provide market access and insights across the traditional securities services markets. 

The group’s global head, Justin Chapman, asserted the importance of this project saying that:

“The use of digital technology to manage the lifecycle of carbon credits gives both the buyer and project developers confidence and transparency through the lifecycle of their voluntary carbon credit transactions.”

A typical carbon credit goes through the following lifecycle process:

Source: Morgan Stanley Research

The global financial services company created the platform with major project developers, which include a direct air capture (DAC) company. This digital carbon credit ecosystem uses private ledger blockchain technology in connecting institutional buyers with carbon credit suppliers. Their goal is to provide solutions to reduce greenhouse gas emissions through carbon credits. 

Carbon credits are certificates that allow the holder the right to emit a certain amount of CO2 or other GHG. Each credit is equal to one tonne of carbon reduction or removal. 

The fully digital platform empowers buyers to get tokenized carbon credits directly from project developers and use them for offsetting. Retiring carbon credits means claiming their associated environmental impact (e.g. carbon reduction). 

How Does Northern Trust Carbon Credit Platform Work?

The platform gives sustainability project managers a workflow to track, manage, and transact with tokenized carbon credits. 

Project developers transact with purchasers of voluntary carbon credits, also known as carbon offsets, through the private blockchain. 

The platform is using smart legal contracts via the Avvoka tool to generate legal agreements. These agreements serve as proofs of the transaction that transparently documents the transfer and settlement of the tokenized credits. 

Northern Trust has been partnering with diverse project developers on its MVP platform. These include the following:

Go Balance Limited: a REDD+ project developer that supports the Trocano Araretama REDD+ Project in the Municipality of Borba in Brazil; 
ReGen III: a clean-tech firm recycling used motor oil into high-grade synthetic lubricants. The company is developing a recycling facility that can prevent the emissions of 900,000 metric tonnes of carbon annually; and 
A DAC company.

According to Go Balance Limited CEO, Northern Trust’s digital platform helps them “avoid deforestation by streamlining time consuming administration tasks”. It provides them the solution to deal with their carbon credits transactions easier and with full transparency.

Tokenizing carbon credits has been considered as one of the means to bring more integrity and trust in carbon markets. The blockchain-powered carbon credit platforms come in various forms. 

Revolutionizing Carbon Markets with Blockchain

Northern Trust’s ecosystem offers an end-to-end solution by providing access for both developers and buyers. Other initiatives like that of CarbonPlace seek to deliver beyond transactions to post-trade solutions. The trading platform connects sellers and buyers of carbon credits through the global banks that founded it with $45m investment. 

More recently, the United Nations Development Programme (UNDP) unveiled its open source carbon registry software that uses QLDB. The goal is to enable countries to manage their national data and carbon credit trading needs.

Likewise, the United Arab Emirates (UAE) also aims to launch its own blockchain-based registration system for carbon credits. The Middle East nation has closed a deal to create the platform using the Venom public blockchain infrastructure.

In a groundbreaking deal last month, a trio partnered to launch Asia’s first digital native carbon registry – Carbonbase, HBAR Foundation, and ImpactX.  

Northern Trust’s digital carbon credit platform still needs more development and its first official live transaction will be up later this year. By leveraging blockchain technology and smart legal contracts, this initiative provides a place for institutional buyers and carbon credit suppliers to meet, streamlining the process and promoting trust in carbon markets.

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Microsoft’s $200M Carbon Removal Deal Advances Heirloom’s DAC Solution

Microsoft has inked one of the largest carbon dioxide removal (CDR) deals to date with Direct Air Capture (DAC) startup Heirloom, which involves 315,000 metric tons of carbon removal estimated to be worth $200 million. 

Heirloom focuses on building a DAC technology that speeds up the natural process of limestone absorbing CO2 from the air. The company enhances this carbon capture process from years to merely days, attracting large buyers of CDR credits. These include Stripe, Klarna, Shopify, and Microsoft. 

The tech giant had previously invested in Heirloom through its $1 billion Climate Innovation Fund. But this recent CDR deal is at magnitude the startup needed in project financing to rapidly scale-up its DAC technology

Microsoft Senior Director of Energy and Carbon Brian Marrs noted why they’re investing such amount in Heirloom:

“…we believe that Heirloom’s technical approach and plan are designed for rapid iteration to help drive down the cost of large-scale Direct Air Capture at the urgent pace needed to meet the goals of the Paris Agreement.”

Advancing Early Markets for CDR and DAC

Large companies have been showing strong support for the sector, pumping funds to startups with innovative CDR technologies like DAC. Microsoft has been at the forefront of carbon removal aiming to be carbon negative, removing more than it emits, by 2050.

Its recent financial support for Heirloom is one of the first “bankable” CDR agreements. It unlocks a critical funding mechanism for the DAC company to finance future carbon removal facilities. It works similar to how other large-scale infrastructure projects have been financed to scale up.

Speaking for Heirloom, CEO Shashank Samala remarked that this deal allows them to raise project finance that can help fuel the company’s rapid growth like what happened in the renewable energy industry. 

Their agreement follows the U.S. Department of Energy’s DAC Hub award selection which included Heirloom as one of the winners. The subsidy is worth up to $600 million for the startup’s Project Cypress in Louisiana in collaboration with Climeworks. 

It’s one of the 2 hubs to win the highest level of public funding. The other is the Oxy DAC plant in Texas which will employ Carbon Engineering’s (CE) DAC technology. 

Heirloom’s DAC Technology Explained

Heirloom provides a DAC solution that’s basically speeding up a process that happens naturally. The climate tech company uses a powder made from crushed limestone, a rock that forms using CO2. 

In nature, this carbon mineralization process takes millions of years, but Heirloom does it in only 3 days. How? By mixing the powder with water, which then acts like a sponge that absorbs CO2 very quickly.

The captured CO2 can then be safely and permanently stored for good, providing a low-cost, durable carbon removal with limestone. 

Microsoft believes that funding Heirloom will result in building an early market for high-quality carbon removal, on top of helping the tech giant achieve its carbon neutrality goal. 

Their CDR deal will provide guaranteed cash flow needed to construct Heirloom’s next 2 commercial DAC facilities. 

Advancing America’s Climate Leadership Globally

The agreement between Microsoft and Heirloom won’t only scale up CDR and DAC, but it will also advance the country’s leadership in climate actions. 

At the 2021 COP26, the US launched the First Movers Coalition – a program for carbon removal and reduction initiatives. It aims to bring together large private companies to commercialize innovative clean technologies through advanced purchase agreements. The program sends the strongest demand signal in history for clean tech crucial in achieving net zero emissions targets. 

Since its launch, the coalition forwarded massive public and private sector commitments in carbon removals.

Last year, three tech giants which included Microsoft, along with Alphabet and Salesforce, together committed $500 million to a CDR program as members of the First Movers Coalition.

Other large companies are also pouring millions of dollars into advanced CDR credits purchase deals. 

For example, JP Morgan announced earlier this year intent to buy carbon removal credits that are worth the same – $200M. Apple also invested the same amount on CDR credits as an expansion of its Restore Fund, but it focuses on nature-based CDR, not technological.

Microsoft, by far, is the largest buyer of carbon removal credits, according to The platform also reported that CDR purchases went up 437% in the first half of 2023 vs. full-year 2022.

Microsoft made its first long-term purchase last year in an agreement with Climeworks to remove 10,000 tons of CO2. Climeworks launched the world’s first commercial DAC facility in Iceland, which uses giant fans to capture CO2 and bury it underground. 

Earlier this year, Microsoft also agreed to buy carbon removal credits from another California-based DAC startup CarbonCapture. The amount of the agreement wasn’t disclosed though.

Its current deal with Heirloom reinforces the leading role of the US in its massive efforts to fight climate change. One focus area of such efforts is scaling up carbon removal and other clean technologies for net zero

This partnership not only accelerates Heirloom’s DAC innovation but also showcases how big players like Microsoft are driving the urgent pace needed to meet climate goals. As corporate support for CDR technologies grows, the world inches closer to achieving climate targets.

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Electrochemical: A More Efficient Way of Capturing CO2 than DAC?

As the fight against climate change intensifies, technologies for capturing carbon dioxide (CO2) are gaining traction. These technologies are critical not just for reducing greenhouse gasses but also for generating carbon credits. 

Among those technologies, Direct Air Capture (DAC) has been the go-to option for some time. However, new electrochemical methods are showing promise, offering a more energy-efficient way to capture CO2. This article compares these two methods in layman’s terms.

Direct Air Capture: The Tried and True Method

Direct Air Capture is like a massive vacuum cleaner for the atmosphere. It sucks in the air and filters out CO2. It’s versatile because you can place it almost anywhere.

However, there are some caveats in using DAC.

First, DAC operates best when there’s a lot of heat available. This heat helps to attract and then release the trapped CO2. Think of it as needing a hot stove to cook your food. Without heat, the process slows down or becomes inefficient.

Second, DAC targets CO2 in the open air, where it’s quite diluted. It’s like fishing in an ocean for just a few specific fish. You’ll need to sift through a lot of water to find what you’re looking for. This makes the process energy-intensive and often expensive.

Lastly, while you can power DAC systems with renewable energy, they are not inherently designed to work best with it. It’s like having a gas car that you’re trying to run on electricity; it works but not optimally.

Electrochemical Methods: A More Efficient Way of Capturing CO2

Enter the electrochemical methods. These methods are more like fishing in a stocked pond rather than an ocean. They are designed for environments where CO2 is abundant, such as industrial factories with heavy emissions like concrete and steel.

Because of this, they can capture CO2 more efficiently. One of the biggest advantages is that these methods use electricity instead of heat. Electricity is easier to source from renewable options like solar or wind power. It’s like having an electric car that’s designed to run on clean energy; it’s a better match.

Another plus is that these methods work well at room temperature. No need for the “hot stove” that DAC requires. This feature makes the process more energy-efficient and potentially cheaper in the long run.

Lastly, the electrochemical methods use special liquids that can hold more CO2. Imagine a fishing net that can catch and hold more fish at once. This makes the process even more efficient.

A team of researchers reporting in ACS Central Science have designed a carbon capture system using an electrochemical method. The device they develop uses electrochemical cells that can easily grab and release carbon dioxide. It operates at room temperature and needs less energy than conventional DAC systems.

The “Swinging” Electrochemical Process 

The researchers first developed an electrochemical cell that catches and releases CO2 by “swinging” positively charged cations across a liquid mixture. 

Source: Kuo et al. 2023.

The process is like a seesaw wherein if the cell is discharged (or “up”), it releases the CO2 and forms a compound (carbamate amine). If the cell is charged (or “down”), it captures CO2 and reforms the chemical compound (carbamic acid).

The scientists then optimized the ion-swinging process to make their electrochemical device work better. They used a mix of special ingredients (potassium and zinc ions) to power the device. This made their device perform competitively with other electrochemical cells in previous studies and use less energy than heat-based cells. 

They tested the prototype cell many times, and it still worked well after many tries with a 95% sustained capacity rate. This shows that their electrochemical method is feasible and can offer a more practical carbon capture solution for industrial applications. 

Carbon Capture and Carbon Credits

Companies operating in the heavy-emitting industries can leverage the newly developed electrochemical carbon capture technology. 

If it’s tested to work efficiently in real-world applications as demonstrated during the study, the technology can help heavy emitters abate their carbon emissions. In return, they can generate carbon credits for removing certain amounts of CO2 directly captured from their facilities.   

Currently, carbon capture companies like Climeworks and Carbon Engineering are attracting big corporate buyers of carbon credits. Each credit represents a tonne of carbon removed from the atmosphere via DAC technologies. 

The same applies to any innovative methods so long that they can show their carbon capture capacity and scalability.  

While DAC remains versatile but energy-intensive, electrochemical methods offer a promising, energy-efficient alternative with the potential to revolutionize carbon capture and drive the generation of carbon credits.

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Sustainability Supersized: McDonald’s and UBQ Materials Set New Standards

People are generating ever-increasing waste, producing ever-increasing plastic, and releasing ever-increasing carbon emissions. Addressing these three problems is what a climate tech developer UBQ Materials focuses on in partnership with large companies like McDonald’s.

Israeli-based UBQ Materials employs advanced conversion technology to turn residual waste, including organics and hard-to-recycle materials, into a renewable resource. Subsequently, it announced the recent expansion of its partnership with Arcos Dorados, the world’s largest independent McDonald’s franchisee.

Arcos Dorados runs the largest quick service restaurant chain in Latin America and the Caribbean and has the right to own, operate, and grant franchises of McDonald’s restaurants. It’s the first to create building components “Made with UBQ” in its São Paulo McDonald’s restaurant. 

A New Standard for Sustainability in the Restaurant Sector

Since 2019, the biggest McDonald’s franchisee has been partnering with UBQ Materials as an integral part of its sustainable materials strategy. Together, they’re able to integrate UBQ into serving McTrays in McDonald’s restaurants across Brazil and the Caribbean in 2021. These sustainable trays achieved climate positivity for their estimated climate impact for over 20 years. 

Building on this initial collaboration, Arcos Dorados is now expanding the use of UBQ materials into building components, including electrical conduits, connection boxes, and modular wooden boards.

Highlighting the importance of their deal, Arcos Dorados Head of Social Impact and Sustainability in Brazil, Marie Tarrisse, remarked that:

“…Our collaboration has been an important part of our approach to building sustainable operations and is setting a new standard for environmental responsibility in the restaurant sector.”

Moreover, this project aligns with the McDonald’s franchisee’s overarching plan to replace carbon-intensive materials and significantly reduce emissions to meet ambitious sustainability goals. Investing in a circular economy, the initiative can reduce carbon emissions by 36% in McDonald’s restaurants and offices by 2030. It can also lower its footprint by 31% across the company’s supply chain by the same year.   

A Sustainable Material Substitute for Oil-based Plastic

Waste: The global municipal solid waste generation is over 2 billion tons a year and it will double by 2050. 

Plastic: The current global annual production and consumption of plastics is 350 million tons, which will quadruple to more than 1.35 billion tons by 2050.

GHG emissions: The world generates greenhouse gas emissions at around 50 billion tons a year. Landfill waste emits huge amounts of methane, 11% of global methane emissions, and will increase about 70% by 2050. 

In response to these alarming statistics, UBQ Materials is proactively addressing these triple concerns through its breakthrough conversion technology. The Israeli-based climate tech company closes the loop between the ecosystems of waste and materials by producing UBQ. It is the first bio-based thermoplastic made from 100% unsorted household waste including all organics and unrecyclable materials. 

The recycled material has been implemented to replace oil-based plastic resins in use across industries. 

1 kilogram of UBQ replaces 1 kg of fossil fuel-based plastic. It also diverts 1.3 kg of waste from landfills while avoiding around 11.7 kg of carbon emissions. Calculations are based on a 20-year timeline. 

UBQ Breakthrough Close-Loop Technology 

One of the key benefits of using UBQ is the significant reduction in carbon emissions coming from landfills. Producing sustainable materials uses unsorted, residual solid waste that’s converted into a new resource through an energy-efficient process. 

Therefore, the UBQ solution offers substantial environmental net benefit in the form of avoided GHG emissions of >14 kg/CO2eq.

Not only does the company contribute to reducing landfill emissions, but it also plays a pivotal role in accelerating the transition to a circular economy. Through waste diversion, conversion, and resource efficiency, the UBQ process upcycles municipal waste into a valuable resource.

Its innovative waste conversion process replaces the linear cradle-to-grave system with a closed-loop ecosystem. 

As a testament to its versatility, various companies have demonstrated that mixing UBQ with existing composites can indeed produce eco-friendly alternatives to everyday materials and products. And McDonald’s is the first to use UBQ materials into building components thereby avoiding carbon emissions significantly.  

The McDonald’s franchisee is working with a Latin American pipe manufacturer to make electrical parts using UBQ. UBQ Materials has partnered with Brazilian manufacturer Madeplast to integrate UBQ into modular wood boards in McDonald’s bench structures.

Emphasizing the significance of these partnerships in reducing carbon emissions and tackling climate change, UBQ Materials Chairman Albert Douer noted:

“Collaborations like these are driving meaningful change, showing that sustainability does not have to come at the cost of performance or companies’ bottom lines…Arcos Dorados and McDonald’s are taking on this responsibility within their industry.”

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A $542M Raise Revolutionizes Lithium EV Battery Production

As the world rapidly transitions to clean energy, solutions for clean technologies such as lithium batteries for electric vehicles are ramping up. Fueling this growth is the announcement of one of the largest cleantech private placements in the U.S. – a $542 million raise by Ascend Elements. 

Ascend Elements is a leading provider of sustainable, closed-loop, engineered battery materials solutions for electric vehicles (EVs).

The Massachusetts-based company’s Series D round was led by Decarbonization Partners, Temasek, and Qatar Investment Authority. Other global investors joined the round, including BHP Ventures, Hitachi Ventures, Tenaska, Agave Partners, Fifth Wall, and more.

Goldman Sachs & Co. acted as the sole placement agent on this financing round.

Investing in America’s Lithium Battery Materials

The total raised equity investments include the $460 million Series D financing and another $82 million from previous investments. To date, it’s one of the top ten equity private placements in the U.S. this 2023. 

Ascend Elements CEO Mike O’Kronley expressed gratitude for achieving this great milestone for the company. He also emphasized the importance of this massive investment in commercializing the production of their sustainable lithium-ion battery materials. 

This, in turn, is critical to support growing demand for EV batteries and ramp up journey to net zero emissions. O’Kronley further noted that together with their existing and new investing partners, they are:

“…investing in North America’s critical EV battery infrastructure and bringing good manufacturing jobs back to the United States.”

The huge investment will be used for building North America’s first sustainable cathode precursor (pCAM) and cathode active material (CAM) facility in Kentucky, which the firm calls Apex 1. Construction started in October last year. 

Once completed, the 1-million-sq.ft. facility will manufacture sustainable pCAM sufficient to power 750,000 EVs each year.

CAM and pCAM are engineered materials created through precise microstructure specifications for use in making EV batteries. Majority of these materials are made in China, primarily from mined metals. 

Ascend Elements commercializes a method that produces pCAM and CAM from black mass – output of recycling lithium-ion batteries. Black mass usually contains high amounts of lithium and other critical metals that are recyclable in making new batteries. 

A number of scientific studies showed that the manufacturer’s recycled battery materials from black mass share similar performance as critical metals from mined or virgin materials. Better yet, they can further reduce carbon emissions of the lithium battery production process by up to 93%.

The company’s patented Hydro-to-Cathode® direct precursor synthesis process doesn’t require intermediary steps typical in conventional cathode manufacturing as seen below. Thus, it offers substantial economic and carbon emissions savings, which is crucial for achieving net zero targets. 

Developing Domestic EV Supply Chain

Ascend Elements gained strong momentum just within a year, achieving big support from major industry players. 

In addition to getting strong backing from the private sector investors, the company is also winning government support. It won 2 grants from the Department of Energy amounting to $480 million coming from the Bipartisan Infrastructure Law.

All these public subsidies and private investments are geared at scaling up the domestic EV supply chain in the country. 

Lithium supply, in particular, is crucial for companies operating in the sector. Being the key material in making batteries for EVs, the U.S. lacks enough supply of this critical metal and imported 66% more lithium-ion batteries in Q1 2023 compared to previous year. 

This data underlines the need to ramp up domestic lithium production to meet growing demand from leading EV makers like Tesla, Rivian, Lucid Motors, Fisker, and Nikola. And globally, the race is on to secure this so-called white gold that fuels the EV revolution.

Projections show demand will surge to over 2 million metric tons by 2030

Source: Statista

One rare lithium company that strives to fill in the domestic supply gap is the American Lithium Corp. (AMLI), which has 2 of the largest lithium deposits in the Americas – TLC in Nevada and Falchani in Peru. The company recently published its first-ever Environmental, Social, and Governance (ESG) report.

The maiden ESG report highlighted American Lithium’s environmental stewardship, ethics and integrity, human rights and diversity policy, and social risk management aspects in running its lithium projects.

As demand for lithium-ion EV batteries continues to soar, every potential solution counts in bridging the supply gap. This is even more essential towards the U.S. 2050 net zero goal.

By reclaiming and recycling materials from spent lithium-ion batteries for new productions, Ascend Elements helps close the loop. Its innovative and sustainable pCAM and CAM process transforms waste into critical materials for future EV batteries, which is a giant step up in advancing sustainability in the industry. 

Disclosure: Owners, members, directors and employees of have/may have stock or option position in any of the companies mentioned: AMLI receives compensation for this publication and has a business relationship with any company whose stock(s) is/are mentioned in this article

Additional disclosure: This communication serves the sole purpose of adding value to the research process and is for information only. Please do your own due diligence. Every investment in securities mentioned in publications of involve risks which could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

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Oman’s Hydrom Opens for 2nd Auction, Driving Green Hydrogen Production for Net Zero

Oman Energy Development subsidiary, Hydrom, invites global energy companies interested in sustainable energy to take part in the second round public auction for green hydrogen development in Dhofar Governorate.

Hydrom (Hydrogen Oman) was launched in 2022 to lead and manage Oman’s hydrogen strategy. In this auction, Hydrom will provide participating firms 3 prime blocks from 340km2 – 400km2 especially allotted to green hydrogen production. 

The goal is to take advantage of the largest Governorate’s renewable energy resources to establish a strong green hydrogen industry in the sultanate.

Driving Oman’s Green Hydrogen Growth 

Interested companies will go through a 3-stage evaluation process to find suitable applicants with robust financial, development, and operational capabilities: 

1st stage – Minimum Qualification Criteria for financial and expertise
2nd stage – Minimum Bid Criteria for project proposals aligning with Oman’s green hydrogen goals
3rd stage – Evaluation Framework

This process is to ensure a transparent and fair auction where qualified bidders with the right expertise and alignment are necessary for driving Oman’s green hydrogen growth. 

The next phase of the auction will begin this month, with a bid submission due in January next year. Companies wanting to join can find detailed information for the green H2 auction on Hydrom’s website

Hydrom was officially formed last June when the minister of energy and minerals, Salim bin Nasser Al Aufi, also chairman of Hydrom, signed 6 green hydrogen contracts worth $20 billion from various partners. These include large oil and gas companies such as BP and Shell. These first auction deals aim to produce 500,000 tonnes of green hydrogen each year in Oman. 

Now, the overall production target moves up to 1 million tonnes of green H2 by 2030, 3.75 million by 2040, and 8.5 million by 2050, which is more than Europe’s total current H2 demand. If met, Oman will become the world’s 6th biggest exporter of hydrogen by 2030. 

Oman’s 2040 hydrogen target is equivalent to 80% of its current LNG exports, while its 2050 goal doubles the volume. 

In July, Hydrom revealed that commitments from their green H2 deals increased to $30 billion. In December last year, Oman and the International Energy Agency (IEA) partnered on green hydrogen projects. 

Why Hydrogen? 

According to the World Bank, the global hydrogen market was valued at $130 billion in 2022. Industry estimates project it to grow by over 9% each year until 2030. 

First Hydrogen (FHYD) brings hydrogen vehicles to North America, Europe, and the UK

Currently, the hydrogen energy sector is still in its early stages of growth. Producing clean H2 or green hydrogen cheaply remains the biggest challenge for the industry to scale rapidly and globally. Fortunately, hydrogen is highly in demand in some industries and there are incentives in producing green H2.

Mckinsey & Company estimated that the total hydrogen production capacity announced by companies by 2030 increased by over 40% to 38 metric tons per year. This capacity is about half the volume needed to be on track to net zero (75 Mt p.a.).

Source: McKinsey & Company

Total announced direct investments in hydrogen also jumped from $240 billion to $320 billion to date.

While there are plenty of different hydrogen in rainbow colors, green hydrogen is the most desirable in terms of emissions. Green hydrogen refers to H2 produced entirely from renewable sources and in a process using water electrolysis. Other types are blue, gray, yellow, red, pick, and violet, depending on how the gas is produced. 

Oman’s hydrogen projects will use electrolysers powered by renewable energy to extract hydrogen from desalinated sea water. 

With the country’s bountiful solar and onshore wind resources, plus its huge land sizes for large-scale H2 projects, it can be the largest producer of H2 in the Middle East by 2030, as per IEA analysis

Additionally, Oman is situated along significant market routes between Europe and Asia, with existing fossil fuel pipelines that transport fuels. This available infrastructure and the country’s expertise in exporting LNG and ammonia benefit Oman in producing and transporting green hydrogen.  

Hydrogen is Key for Oman’s Net Zero Goal

Oman’s huge green hydrogen potential plays a crucial role in its net zero target it seeks to reach by 2050. 

The sultanate dedicates an area the size of Slovakia to solar power projects to produce green hydrogen. To date, 1,500km2 of land has been earmarked by Oman for green H2 development by 2030. Up to 40x more land has been identified for long-term potential production. 

Other Gulf nations are taking a different path by leaning towards a more private sector approach. Qatar outsources H2 production while Bahrain focuses on carbon capture and storage more than hydrogen. 

While Saudi is also developing hydrogen, it will not export the gas but use it mostly for steel production. Kuwait, on the other hand, doesn’t have a hydrogen strategy yet in place. 

Source: IEA Report

Achieving 2030 production target of renewable or green hydrogen in Oman requires a total investment of around $33 billion. As seen above, this goal also needs 50 TWh of renewable electricity generation, which is more than today’s total capacity. 

That needed capacity calls for a massive investment in renewable power in the Sultanate. Yet, it will also bring the benefits of reducing domestic use of natural gas by 3 billion m3 and avoiding 7 million tonnes of CO2 emissions each year. 

Reaching its green hydrogen targets would significantly contribute to Oman’s clean energy transition and net zero emissions goal. The Gulf nation’s ambitious initiative signifies that major fossil fuel producers can also make key changes to their energy mix and embrace a more sustainable and greener strategy. 

Disclosure: Owners, members, directors and employees of have/may have stock or option position in any of the companies mentioned: receives compensation for this publication and has a business relationship with any company whose stock(s) is/are mentioned in this article

Additional disclosure: This communication serves the sole purpose of adding value to the research process and is for information only. Please do your own due diligence. Every investment in securities mentioned in publications of involve risks which could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

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Petrobras Buys First-Ever Carbon Credits, Commits $120M in Brazil’s Carbon Market

Brazil’s state-owned oil giant Petrobras made history in the voluntary carbon market by buying carbon credits for the first time to offset its emissions. 

The carbon offsets Petrobras landmark purchased are from the Envira Amazonia project that protects the Amazon rainforest. The project, which began in 2012, aims to protect 39,000 hectares of rainforest in Acre’s western state.  

Petrobras’ $120M Carbon Offset Plan 

The Brazilian oil major’s credit purchase is worth 175,000 tons of avoided carbon emissions. An expert noted that this is worth below $1 million. That amount corresponds to 570 hectares (1,408 acres) of conserved rainforest, or equal to 800 soccer fields, Petrobras said.  

This first carbon credit purchase is part of the company’s broader push for more sustainability efforts and net zero target. Petrobras aims to reach net zero emissions by 2050.

In the short-term, the oil major plans to reduce greenhouse gas or carbon emissions by 30% by 2030. The company managed to cut operational emissions by 39% from 2015 to 2022 and a 67% drop in methane emissions for the same period. 

For its detailed climate commitments, here are Petrobras specific goals. 

Petrobras 2050 Net Zero Targets 

Petrobras was also able to lower emissions intensity both for its exploration and production (50%) and refining (12%) activities. 

The Brazilian energy company has also relied on Carbon Capture, Utilization, and Storage (CCUS) solutions. To date, it has reinjected 10.6 million tons of CO2 in 2022, equivalent to about 25% of the industry’s reinjection capacity.

Originally, Petrobras unveiled intent to invest up to $120 million in carbon credits as one solution to decarbonize operations. However, that figure will now be the minimum, not maximum, as per energy transition chief Mauricio Tolmasquim. The revision is in line with the oil giant’s recent 2024-2028 business plan. 

The company will prioritize buying high-quality, nature-based carbon credits produced domestically, particularly through Amazon reforestation projects. It plans to purchase at least $120M in carbon credits by 2027. 

These credits are certified by the world’s biggest certifier, Verra’s Verified Carbon Standard (VCS).

Brazil’s Leading the Nature-Based Carbon Market

Petrobras move to spend $120 million in nature-based carbon credits perfectly aligns with Brazil’s recent decision to cap GHG emissions. Earlier last month, Latin America’s biggest economy finalized a bill to create a cap-and-trade carbon market to curb harmful emissions. 

The bill will soon be forwarded to the Congress for further deliberation. It would design the new carbon credit market that will regulate or put a cap on companies releasing over 25,000 tons of CO2 a year. 

The regulation would hit oil and gas companies, along with other heavy emitters such as cement, steel and aluminum manufacturers. These affected businesses represent only 0.1% of companies operating in Brazil but generate almost half of its total emissions. 

Firms that cut emissions faster than mandated can earn carbon credits tradable on exchanges with companies struggling to keep pace. 

Carbon credits are tradable permits that allow the holder the right to emit a certain amount of CO2. Each credit represents one metric ton of CO2 or its equivalent GHG reduced or removed from the atmosphere. 

Businesses can also offset their emissions with credits produced by reforestation and conservation projects, which have been offering large companies a means to voluntarily offset their carbon footprint. 

The Latin American nation can be a global leader in the nature-based carbon credits market through its forestry projects. Bestowed with very rich natural ecosystems, such as the Amazon, Caatinga, and Atlantic Forests, Brazil can lead the market. 

But the heavily forested nation doesn’t only must face criticisms over the quality of forest carbon offsets in the VCM; Brazil must also deal with the lack of private capital crucial in driving carbon markets in the country. 

Years ago, carbon credits mostly came from renewable energy projects but this year onward, they’ll be from forest carbon projects.

Petrobras’ intent to invest $120 million in carbon credits created through Brazil’s nationwide reforestation initiatives appears to open investment opportunities. In 2022, the company leveraged the green financing market with over $1 billion sustainability funds as it attracts eco-conscious investors.

Entering the carbon market with a $120 million pledge, Petrobras is supporting the conservation of hundreds of hectares of Brazil’s rainforest. This move is part of the oil giant’s broader sustainability and net zero efforts that align the country’s move to creating its own carbon market to tackle climate change.

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UAE to Power Up African Carbon Credit Market with $450M Pledge

The United Arab Emirates Carbon Alliance has committed to buy $450 million carbon credits from the African Carbon Markets Initiative (ACMI) by 2030. 

The deal occurred at the first Africa Climate Summit where Sheikha Shamma bint Sultan, president and chief executive of the UAE Independent Climate Change Accelerators (UICCA) signed a letter of intent with ACMI

It’s one of the highly-anticipated announcements at the 3-day event currently taking place in Kenya this week. Participating country leaders and delegates come together to ramp up climate action on the continent. 

First African Carbon Credit Mega Deal 

UICCA launched the UAE Carbon Alliance in June to help companies transition to a green economy. This is part of the country’s Net Zero by 2050 Strategic Initiative.

The Emirati coalition includes members such as Mubadala Investment Company, First Abu Dhabi Bank, Masdar, and AirCarbon Exchange.

Fueling Africa’s push for carbon credits is the ACMI, launched at COP27 last year. The initiative brings together African countries and large climate investors including Bezos Earth Fund and Rockefeller Foundation. 

Their goal is to reduce emissions and bring transparency to voluntary carbon markets in the region through trading carbon offsets.

Run by McKinsey & Company, ACMI seeks to increase the stocks of African carbon credits to 300 million by 2030. Achieving this ambitious target needs great interest from large buyers and supporters of carbon markets.

African leaders particularly advocate for the use of market-driven financial mechanisms, such as carbon credits, also called offsets. These credits are created through projects that reduce emissions such as reforestation and shifting to renewable or cleaner energy sources.

Companies looking to compensate for their carbon emissions against their set targets can buy carbon credits. Each credit equals to preventing the release of one tonne of CO2. 

The ACMI founders believe that to get enough carbon credits for their goal, they must secure early commitment from investors. And the UAE Carbon Alliance is their biggest backer so far. 

The Emirati group aims to become “a leading hub for high integrity, high-quality carbon markets”, for trading carbon offsets. They seek to bridge the high-integrity supply of African carbon credits to high demand from the Middle East.

Globally, the demand for carbon credits is expected to grow exponentially despite criticisms thrown at the market. Industry estimates project that carbon offsets market size will surge to $250 billion by 2050.

Fostering Efficient Carbon Markets

Under UAE’s latest climate plan, the Gulf nation highlighted that while it focuses on meeting climate targets through domestic reduction efforts, it also “reserves the right” to tap into carbon offsets markets as specified in Article 6 of the Paris Agreement.

Reflecting the Middle East nation’s commitment, the Chairperson of the UAE Carbon Alliance, Khalifa Al Nahyan, said during the announcement:

“As we navigate the climate crisis, carbon markets stand as a pivotal tool in our decarbonisation journey… Through this pledge, we hope to foster more integrated and efficient carbon market mechanisms between our two regions.”

She also noted that their collaboration with ACMI provides buyers in the UAE and the wider region access to high-quality African carbon credits. As such, their mega deal will unlock the region’s carbon credit potential while supporting sustainable investment with long-term climate impact. 

On their end, the ACMI CEO, Paul Muthaura commented that the UICCA’s $450M pledge shows the potential of international cooperation to tackle climate change. 

He further noted that together, they “aim to create a sustainable, transparent, and equitable carbon market ecosystem in Africa”. This, in turn, can help drive a significant positive impact for the region and the world. 

The Emirati government also announced plans to invest $54 billion by 2030 in renewables to meet the rising energy demand and achieve its 2050 net zero goal.

The UAE alliance is not the only buyer with a keen interest in African carbon credits. 

Another company created by a royal family member of Dubai, Blue Carbon, also has inked agreements with African nations to manage a vast span of forests to produce carbon credits from their conservation and protection activities. The company will sell those offsets to countries looking to use carbon credits as a solution for their climate targets. 

Turning Africa As Hub for Climate Investments, Not Disasters

African nations find carbon credits and similar market-driven financial mechanisms are crucial tools to attract funding from richer countries. 

Currently, the ACMI’s Advance Market Signal manages to collect around $200 million for buying African carbon credits by 2030. Major signatories under the initiative are Vertree, Standard Chartered, ETG, and Nando’s, among others. 

Nigeria alone can generate over 30 million tons of carbon credit each year by the end of the decade. That means the African nation can produce over $500 million a year through the sales of carbon offsets. 

Organizers of the Africa Climate Summit aim to reposition the continent as a hub for climate-related funding and actions, instead of being known as a region plagued by climate disasters like droughts and floods. 

In summary, the UAE Carbon Alliance’s monumental $450 million pledge to purchase carbon credits from the ACMI signifies a powerful stride in the global fight against climate change. This landmark commitment bridges nations and regions, fostering international cooperation to create a sustainable and efficient carbon market ecosystem.

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Seafood Giant Sealord Invests $6M in NZ Forest Carbon Offset Project

One of New Zealand’s largest seafood companies, Sealord, is going to invest almost US$6M in a forest carbon offset project involving Māori landowners.

Sealord partners with Te Arawa for over the next 10 years to transform underutilized land in Rotorua to native forest. The forest carbon offset program is courtesy of the partnership between Te Arawa Fisheries and New Zealand Carbon Farming (NZCF). 

The project will help offset some of Sealord’s carbon emissions, maximize the potential of marginal land, and create jobs. They also expect to see improved local environment conditions through the program, including water quality in Te Arawa lakes. 

A $9.5B Carbon Trading Opportunity for NZ

According to Te Arawa Fisheries CEO Chris Karamea Insley, the offset project showcases the potential opportunities that carbon trading provides. It also highlights the role of the country’s major companies to support the nation’s climate goals.  

New Zealand aims to reach net zero emissions by 2050, same as most countries seek.

Insley continues to say that:

“The Emissions Trading Scheme represents a $16 [NZD] billion economic opportunity for Māori – one which will be transformative for generations… to generate better economic, cultural, social and environmental outcomes…”

The agreement is Aotearoa’s (referring to NZ) leading climate change strategy, respecting the Māori principles, customs, and protocols. Māori are the second-largest ethnic group in New Zealand.

The fisheries organization further believes that the new initiative will help Sealord address its carbon pollution while driving financial benefits for the (Māori) clan. And by creating new jobs and improving water quality, it’s a win-win-win deal for everybody, Insley further noted.

Speaking for Sealord, their CEO Doug Paulin remarked that the carbon offset project supports the company’s sustainability efforts. It also helps them in meeting their carbon reduction goals. 

Sealord Carbon Emissions and Reduction Efforts

According to Paulin, Sealord has already lowered its total carbon emissions by around 24% since 2019. This reduction was achieved through various means, including fuel optimization, investing in new vessels, and cutting use of fossil fuels in land-based operations. 

Sealord New Zealand Operations Carbon Footprint

Vessel fuel is responsible for almost 94% of the Sealord’s carbon emissions. And since its baseline year (2019), the company was able to remove only over 25,200 tonnes of CO2e (equivalent) from its NZ business operations. That effort translates to removing >5,000 cars off the road.

NZ’s seafood giant aims to reach net zero emissions by 2050. Apart from its NZ business, the company is also managing its carbon emissions from its aquaculture farms in Australia. Factoring its Australian operations footprint, Sealord’s total carbon emissions per scope is as follows:

Sealord Group Total Carbon Footprint

Majority of this footprint, 95%, is from NZ business operations. Fossil fuels burned by their fishing vessels account for more than 90% of the company’s scope 1 emissions. 

Sealord acknowledges that reaching their carbon emissions targets remains a challenge given the limited options available within their operations. This is where carbon offsets serve as the company’s final option in mitigating their climate impact, the CEO further noted. 

Specifically, Paulin said that while they’re waiting for new engine technology and fuel sources to be developed and viable:

“…we have made the decision that we must invest now to enable Sealord to have options in the future so we can meet our carbon commitments.”

They find that investing about $6 million in Māori-managed forests in New Zealand offers them a way to offset emissions. 

Forest Offsets Create Local Investment and Development

The New Zealand Carbon Farming will manage the forestry offset project and the physical planting of trees. As per the organization’s director, the carbon offset deal offers opportunities for tackling climate change and biodiversity loss issues collaboratively.  

It also raises the chance to manage a forestry project that aligns with Mātauranga Māori or Māori knowledge in establishing best-practice for forest management. 

The Māori people have extensive experience in nurturing exotic or native crops and transitioning them to a biodiverse native environment. So, enlisting their help and support would be important in the project.

The forest carbon sequestration will also unlock new doors for local development and investment, NZCF further noted. 

The carbon offsets, also known as carbon credits, will provide revenue streams for the developer and the local community involved. In this case, the Māori tribe. Each carbon offset credit represents a tonne of carbon removed or sequestered through trees, or any other element.

Despite current criticisms thrown at nature-based carbon offsets, the partnership between Sealord and Te Arawa shows that large companies continue to find these offsets a sound and reliable option for their climate pledges. It further demonstrates that it’s possible for large businesses and local tribe landowners to work together to bring positive impact for the people and the planet. 

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