The US Environmental Protection Agency (EPA) has released a report highlighting a significant milestone: a 7% decrease in carbon dioxide emissions from the country’s power sector in 2023, marking the most substantial annual drop since 2020. This achievement reflects shifts in fossil fuel-based electricity generation and underscores ongoing efforts to mitigate climate impact.

The agency’s data showed that all four quarters of 2023 saw significant reductions in measured pollutants compared to 2022. The decline in emissions is mainly due to shifts in the mix of fossil fuel-based electricity generation.   

Key Driver of Emission Reductions

Power plants, including coal, natural gas, and oil facilities, significantly contribute to CO2 emissions, demanding urgent action for environmental preservation. The United States, a major emitter, has been implementing various measures to address these planet-warming emissions to mitigate climate impact. 

The EPA publishes quarterly and annual updates on power plant emissions data, including sulfur dioxide (SO2), nitrogen oxides (NOx), carbon dioxide (CO2), and mercury (Hg). The following is the breakdown of the change in annual emissions, 2023 versus 2022, per pollutant:  

15% decrease for NOX
24% decrease for SO2
17% decrease for Hg
7% decrease for CO2

In the long-term, between 1990 and 2023, power plant emissions also saw significant reductions: SO2 emissions dropped by 96%, NOx emissions by 90%. In 2023, Cross-State Air Pollution Rule and Acid Rain Program sources emitted 0.65 million tons of SO2, down by 11.2 million tons from 1995. 

Similarly, NOx emissions were reduced by 5.2 million tons. Additionally, power plants cut CO2 emissions by 28% from 1995 to 2023 while complying with emission reduction programs.

Natural Gas Role and Future Regulations

Coal generation dropped by 18%, leading to notable emission reductions compared to the previous year. Meanwhile, power production from natural gas plants increased by 8%. 

Despite the rise in natural gas plant output, carbon pollution from these facilities rose by 6.4% in 2023. The agency discovered that the country’s 2,000+ natural gas-powered plants emitted 697 million metric tons of CO2 last year, up from 655 million metric tons in the previous year. 

However, because natural gas-fired plants emit less CO2 than coal-fired ones, they have contributed to an overall reduction in US greenhouse gas emissions. 

Nevertheless, efforts to expand natural gas-fired fleets have faced opposition in some communities concerned about environmental impact. Currently, natural gas-fired power plants account for about 35% of the sector’s emissions, per the US Energy Information Administration report.

The Edison Electric Institute (EEI), a trade group representing US investor-owned utilities, has consistently advocated for the importance of natural gas-fired power plants in facilitating the integration of renewables into the electric grid. They emphasized the evolving US energy mix, noting that 40% of electricity now comes from clean, carbon-free resources. 

In May 2023, the Biden administration proposed new rules aimed at reducing climate-warming emissions from large gas-fired power plants. 

These rules would mandate that such plants co-fire with 96% clean hydrogen by 2038. Additionally, the proposed regulations would require nearly all coal-fired plants lacking carbon capture and sequestration technology to cease operations by 2035.

READ MORE: EPA to Regulate Gas-Fired Power Plants with Carbon Capture

EPA’s Call for Continued Action

The EPA further reported that overall fossil fuel generation decreased by 2% in 2023 compared to 2022. Total CO2 emissions from the power sector decreased from about 1.5 billion metric tons in 2022 to 1.4 billion metric tons in 2023.

Furthermore, the retirement of coal-fired power plants in 2023 led to significant reductions in other pollutants detrimental to public health. Joseph Goffman, Assistant Administrator for EPA’s Office of Air and Radiation acknowledged the progress made but emphasized the need for further advancements. He particularly noted that:

“This snapshot of progress over the past year shows we are moving in the right direction, but more progress is needed… President Biden is committed to building a clean energy future, and EPA will continue to work with state, Tribal and local leaders, in addition to major players in the power sector, to build on our progress and protect public health.”

The post US Power Sector Sees Largest CO2 Emission Drop Since 2020 appeared first on Carbon Credits.

Lithium producers are facing challenges due to the low prices of lithium, prompting them to take measures to cut costs and protect profits. The drop in lithium prices has been significant, driven by increased supply and a slowdown in electric vehicle (EV) sales. 

Source: Trading Economics

In response to these market conditions, lithium producers are reducing production, scaling back expansion plans, and focusing on cost-saving initiatives. The world’s biggest provider of lithium for EV batteries, Albemarle, announced additional cost-saving measures, reducing capex by delaying planned lithium investments. 

Albemarle’s Cost-Cutting Measures 

Albemarle outlined plans to cut capital expenditures for 2024 by $300 million to $500 million compared to 2023. 

Moreover, the company aims to slash costs by about $100 million, with over $50 million targeted for the current year. They’ll be implementing measures such as reducing headcount and decreasing spending on contracted services.

The leading lithium producer’s Q4 2023 financial report showed a significant decline in adjusted EBITDA. It has a net loss of $315 million, representing a 125.3% decrease year-over-year. Net sales totalled $2.36 billion, down 10.1% compared to the previous year.

Looking ahead to 2024, Albemarle has identified strategic investments and projects for slow down in response to current market dynamics. 

Albemarle’s Chairman and CEO Jerry Masters noted that new greenfield projects, particularly in the West, are not economically feasible at current lithium prices. 

Construction and engineering work at the Richburg, SC, MegaFlex conversion facility has been halted until prices improve. But permitting activities will continue at the company’s Kings Mountain site in North Carolina.

READ MORE: Albemarle Shifts Focus in Lithium Strategy Amid Market Softening

In terms of future initiatives, Albemarle will prioritize large, high-return projects that are nearing completion or in startup stages. Meanwhile, they’ll be limiting mergers and acquisitions activity.

Projects that will continue development include the commissioning of the Maison lithium conversion facility and the expansion of the Kemerton lithium conversion facility in Western Australia.

The Rise and Fall of Lithium: From EV Boom to Market Downturn

During 2020 and 2021, the electric vehicle (EV) market experienced significant growth, leading to a surge in demand for lithium, a key component in EV batteries. EV sales saw remarkable increases, with a 45.9% jump in 2020 and a further 100% increase in 2021. This led to a total of EVs sold at 9.78 million units. 

This surge in demand created a deficit in lithium supplies in 2021, quickly turning into a surplus of 40,000 metric tons of lithium carbonate equivalent by 2022. Despite the surplus, market expectations continued to drive lithium prices upwards.

However, the boom in the lithium market was short-lived as the global economy weakened and EV sales slowed down, particularly in Mainland China, due to the repeal of EV subsidies. This led to a significant downturn in the lithium market in 2023. 

As more lithium production capacity comes online, the surplus of lithium is expected to widen further, reaching 100,000 Mt of LCE in 2024.

Australia remains the largest producer of lithium, followed by Chile and China. The U.S. lagged far behind, at the 8th spot after Canada.

Production of lithium is forecasted to increase by 35.7% in 2024 compared to the previous year. Analysts anticipate that lithium prices will stabilize and reach a cyclical bottom in 2024 as inventory build ups are relieved.

The current market conditions are particularly challenging for lower-grade spodumene concentrate and lepidolite producers. These producers are feeling the brunt of the downturn, as they are more susceptible to price changes and are typically the first to reduce output when prices drop too low. 

For instance, Pilbara Minerals, an Australian spodumene producer, announced that it’s unlikely to pay an interim dividend for the first half of fiscal year 2024 to preserve its balance sheet. 

Similarly, some spodumene producers have been considering changes to pricing settlement terms to prevent buyers from relying on inventories. For example, IGO Ltd. modified the offtake pricing model for spodumene from the Greenbushes deposit, the world’s largest lithium spodumene deposit. The company also announced a reduction in production for the second half of 2024. 

Core Lithium Ltd., another Australian producer, halted mining operations at the Grants open pit to slow output and alleviate oversupply. Analysts anticipate that Australian lithium miners will continue to curtail supply in the near term due to uncertain prices. 

What Lithium Producers and Investors Can Expect

As some lithium miners reduce production, investors in lithium projects are grappling with whether to proceed or postpone project development. Analysts anticipate that projects may face delays, with a particular impact on unfunded greenfield projects. They also foresee more higher-cost and pure-play lithium producers exiting the market or postponing their projects due to the current challenging conditions. 

RELATED: Top Lithium Stocks Making Waves in 2024

With lithium projects facing financial challenges, analysts also expect an increase in merger and acquisition (M&A) activity. Major producers with positive cash flow may seek deals in the market, while junior companies may attempt to sell projects, especially given the scarcity of private capital compared to previous years. But this isn’t the case with Li-FT Power (LIFT; LIFFF), the fastest developing North American lithium junior. 

Li-FT Power‘s strategy centers on consolidating and advancing hard rock lithium pegmatite projects in Canada, focusing on established lithium districts. The company is well-financed to advance its projects, underscoring its dedication to exploring and developing top-tier lithium assets in Canada.

The tumultuous journey of lithium producers reflects the cyclical nature of commodity markets, where booms are often followed by busts. As Albemarle and other key players in the industry adapt to the challenges posed by plummeting lithium prices, their resilience and strategic responses will shape the future landscape of the lithium market.

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

Carboncredits.com 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 carboncredits.com involve risks which could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

The post Lithium Producers Adapt to Price Plummet, Cut Costs and Delay Investments appeared first on Carbon Credits.

The Canadian Parliament is introducing a new drastic, and highly controversial move against false fossil fuel advertising.

With more and more countries implementing stricter greenhouse gas emissions controls, such as banning future sales of gas-powered vehicles, it could soon no longer matter what pro-fossil fuel supporters advocate for.

The fight against climate change and emissions reductions is being taken up by regulatory bodies and organizations with the power to enforce these new laws and take action against those who break them.

But it didn’t always used to be this way. In fact, big oil fought for a very long time to conceal, downplay, and outright deny the evidence of the impact that fossil fuels were having on our planet.

Take the picture above, for instance. This newspaper ad ran all the way back in 1991 and was paid for by an organization named “Informed Citizens for the Environment”.

Despite the name, this organization was created by a coalition of the National Coal Association, the Western Fuels Association (another coal supplier), and the Edison Electrical Institute (an association that includes all publicly traded U.S. electric companies).

Also known as the “Information Council for the Environment” or ICE, this group had one simple goal: to “reposition global warming as theory (not fact).”

And that’s not just an assumption either. That’s taken verbatim from one of their own internal documents, seen below:

Source: ICE campaign plan enclosures

This was only the start of what would become a lengthy and drawn-out fight over an inconvenient truth… all for the sake of oil money.

Putting the Gas in Gaslighting

One of the most prominent examples of big oil’s attempt to keep climate change under wraps comes from oil supermajor ExxonMobil.

Mobil led a campaign in the mid-90s prior to their merger with Exxon, spending money on an aggressive ad campaign that produced over 50 ads in the ‘90s and 2000s that all questioned the scientific validity of climate change.

Of course, it wasn’t just Exxon and Mobil. One major group lobbying for climate change denial was the Global Climate Coalition (GCC for short).

With members comprised of Phillips, Exxon (later ExxonMobil), the American Petroleum Institute, National Coal Association, Edison Electric Institute, and more, the GCC was one of the loudest voices at the table when it came to climate change, actively lobbying key government officials as well as running vicious ad campaigns and smear attack against climate scientists.

The defeat of former President Clinton’s early 1993 carbon energy tax proposal, part of his plan to reduce U.S. greenhouse gas emissions, is largely attributed to lobbying by the GCC.

Later on, GCC efforts to have the U.S. withdraw from the Kyoto Protocol under President Bush Jr. were successful, with the decision having said to be “… in part based on input from [the GCC]”, according to White House briefing notes.

While the GCC would later disband in 2001 following the United States’ withdrawal from the Kyoto Protocol, big oil’s efforts to detract and downplay climate change would continue well past the turn of the millennium. Their strategy gradually shifted from outright denial, to doubt, to shifting the blame, and finally to greenwashing.

Better Late than Never: The Government Steps In

Remember what was said earlier about how the fight against climate change is now being taken up by regulatory bodies with the power to enforce laws?

Well, it may be a few decades late and much of the damage may already be done, but at least one government is finally taking action: the Canadian one.

In bill C-372 brought to Canada’s House of Commons on February 5th, known as the Fossil Fuel Advertising Act, the government is looking to make it illegal to falsely promote the burning of fossil fuels as a benefit to the public – much as the Canadian parliament did back in 1989 with tobacco.

Those of you reading this who aren’t Canadian may not be aware, but thanks to the efforts of the Canadian government, there are very strict laws regarding tobacco advertising and packaging in Canada.

Take a look at some of these:

Is it enough to keep away the kids who really want to try smoking? Probably not. But peeling away the glamourization and “cool” factor of tobacco and speaking plainly about its health impacts can go a long way towards keeping it out of the hands of the young and impressionable.

In the same way, the Fossil Fuel Advertising Act has a similar aim, which was directly referenced by MP Charlie Angus who developed the bill.

“To claim that there are clean fossil fuels is like saying there are safe cigarettes. We know that is simply not true.”

– Charlie Angus

In the terms of the language of the Bill:

It is prohibited for a person to promote a fossil fuel or the production of a fossil fuel in a manner that is false, misleading or deceptive with respect to or that is likely to create an erroneous impression about the characteristics, health or environmental effects or health or environmental hazards of the fossil fuel, its production or the emissions that result from its production or use.

In simpler terms: no more lying about the health and environmental impacts of fossil fuels.

Failure to do so could result in a fine of up to $1.5 million dollars and potentially even a two-year jail term.

Though this bill hasn’t passed yet and won’t come up for vote until later this fall at the earliest, it’s a strong (if overdue) move from the Canadian government that will hopefully spur other countries to take similar courses of action.

In the meantime, you can check out the bill for yourself here – it’s a short read.

The post Ending the Big Lie: No More Fake News for Fossil Fuels appeared first on Carbon Credits.

The European Union’s carbon market has recently experienced a significant downturn, with carbon prices hitting a 28-month low. This decline is due to various factors including macroeconomic uncertainties and decreased volatility in global gas and power markets. 

Amidst this market turmoil, the EU has unveiled a bold new climate target, aiming to slash greenhouse gas (GHG) emissions by 90% by 2040. Despite initial optimism, analysts predict further bearish trends as economic headwinds persist.

Carbon Crunch: EU’s Carbon Market Saga

The EU carbon prices recently hit a 28-month low, trading at Euros 56.5 per mtCO2e ($60.5/mtCO2e) on Feb. 14, according to data from the Intercontinental Exchange. Comparatively, EU Allowances (EUAs) were at a record high of over Euros 100/mtCO2e around the same time last year. 

READ MORE: EU Carbon Prices Surge to 100 Euros

However, since the 4th quarter of 2023, prices have been on a notable downward trajectory. Analysts attributed that trend to macroeconomic uncertainties, political challenges, and decreased volatility in the global gas and power markets.

The recent weakness in the European carbon market was evident in the EU daily carbon auction, where both prices and demand experienced sharp declines. As shown below, the cleared price for the EUA auction at 56.24 Euros or US$58.45/mtCO2e was the lowest price since Q3 2021. 

Traders and analysts anticipate the bearish trend in the EU carbon complex to persist as the region anticipates further economic headwinds in the coming months. 

Moreover, a veteran hedge fund investor sees a further slump in European Union carbon permits on the horizon as energy supplies soar and demand remains subdued. Per Lekander, CEO of London-based Clean Energy Transition, said that a flood of renewable power, alongside falling gas prices and a recovery in nuclear and hydro plants will keep the pressure on carbon prices. 

Prices have already slumped 30% this year as that combination curbs pollution that’s the basis for demand to buy emissions permits in Europe.

Analysis by S&P Global expects average prices for 2024 to plummet to Eur 63.90/mtCO2e, compared to Eur 85.30/mtCO2e in 2023 and Eur 81.50/mtCO2e in 2022.

Thus, many have revised down their EUA 2024 price forecasts. They attribute the decline to recession concerns and reduced emissions from power and industrial sectors. 

EU’s Bold Climate Agenda for 2040

The European Commission unveiled a bold new climate target, setting its sights on slashing the bloc’s GHG emissions by 90% by 2040, relative to 1990 levels.

This ambitious target closely aligns with the recommendations put forth by the European Scientific Advisory Board on Climate Change. The organization advises a reduction of emissions by 90% to 95%. 

More notably, this intermediary step serves as a crucial bridge between the EU’s current objectives:

Cutting net emissions by 55% by 2030 and achieving net zero emissions by 2050.

The analysis conducted in the impact assessment of the new proposal indicates that the remaining EU GHG emissions in 2040 should not exceed 850 million metric tons of CO2-equivalent (MtCO2-eq). Meanwhile, carbon removals, facilitated through land-based and industrial carbon removal methods, should aim to reach up to 400 MtCO2.

Achieving this new climate agenda requires a couple of initiatives, including:

a significant shift towards renewable energy systems, 
phasing out coal-fueled power generation and reducing overall fossil fuel usage by 80%, 
and a substantial reduction in gas dependency within the EU’s energy infrastructure. 

It also calls for major transformations in various sectors such as transportation, agriculture, construction, manufacturing, and waste management.

RELATED: Top 1% of Polluting Companies Cause 50% of EU ETS Emissions

This ambitious target is essential to ensure the EU remains aligned with the objectives outlined in the 2015 Paris Agreement. The agreement aims to limit the planet’s long-term average temperature increase to well below 2°C and preferably below 1.5°C.

From Downturn to Turnaround

Moreover, the proposal underscores the economic imperative of addressing climate change, highlighting the potential costs of inaction. Failure to limit global warming to 1.5 degrees Celsius above pre-industrial levels could result in additional costs of 2.4 trillion euros in the EU by 2050, primarily due to the heightened risk of more severe and destructive extreme weather events.

In 2022, the EU made significant strides in reducing GHG emissions, achieving a 33% reduction compared to 1990 levels. 

EU CO2 Emissions, 1965-2022

Source: Statista

Additionally, a separate EU document outlines plans to capture and store hundreds of millions of tons of CO2 emissions by 2050, emphasizing the substantial investment required in new technologies to address climate challenges effectively.

However, it’s important to note that the 2040 ambition is currently a non-binding recommendation from the European Commission, intended to initiate political discussions. A formal proposal will only be presented after the elections to the European Parliament.

It remains uncertain how the final decision would impact the European carbon market and prices. Regardless, the EC’s ambitious 2040 climate target underscores the EU’s commitment to addressing climate change and ensuring a sustainable future.

However, it remains imperative for policymakers to translate these goals into concrete actions to mitigate the potential costs of inaction.

The post EU Carbon Prices at 28-Month Low Amid New 2040 Climate Goal appeared first on Carbon Credits.