Uncategorized – Page 47 – The Global Carbon Fund

How Effective Are Carbon Credits in Corporate Net Zero? SBTi Speaks

August 1, 2024/in Uncategorized /by

The Science Based Targets initiative (SBTi), the leading authority on corporate climate goals, has released new research that suggests carbon credits may not be effective for offsetting value chain emissions. This marks a significant shift from earlier plans, which had proposed a broader role for carbon credits.

The SBTi’s review, based on various third-party studies, finds that many carbon credits fall short of delivering the intended environmental benefits. This revelation suggests that reliance on carbon credits might hinder decarbonization efforts and limit the flow of climate finance.

The report’s findings could significantly impact the carbon offset market, which has been scrutinized for its effectiveness in delivering promised emissions reduction.

SBTi’s New Findings Challenge Carbon Credit Market

Founded in 2015, SBTi’s mission is to establish science-based target setting as a standard for corporate climate action. It provides guidelines and validation for companies aiming to meet net zero targets, initially requiring 90-95% decarbonization by 2050 and neutralizing remaining emissions.

Earlier this year, SBTi proposed revising its Corporate Net-Zero Standard to include carbon credits for managing Scope 3 emissions, which are the most challenging to control and often represent the majority of a company’s emissions. This proposal led to controversy within SBTi, resulting in staff concerns and calls for leadership changes.

The SBTi board later clarified that any changes regarding carbon credits would be evidence-based and that a discussion paper would be published before finalizing the new standard.

Recent research by SBTi indicates that many carbon credits are “ineffective” in achieving meaningful climate impact and could potentially hinder net-zero progress and reduce climate finance. The research acknowledges the limitations of existing studies but calls for more evidence to better assess the effectiveness of carbon credits.

INTERESTING READ: Is The Voluntary Carbon Market Moving Toward Version 2.0?

The SBTi report highlights that 84% of evidence submissions argue against treating carbon credits as interchangeable with other emission reduction methods, deeming it illogical or counterproductive to global mitigation goals.

Around half of the submissions support contribution claims over offsetting or compensation claims. The SBTi received 111 unique evidence pieces, including research studies and white papers, which will inform updates to its Corporate Net-Zero Standard—a framework guiding corporate decarbonization.

SBTi’s Game Plan: Revising Corporate Net-Zero Standard

The report’s findings are expected to reinforce SBTi’s credibility within the industry, according to experts. They praised the review’s focus on the science of carbon credits, suggesting it restores the SBTi’s relevance in guiding corporate climate action amidst significant external pressures.

Sue Jenny Ehr, the interim CEO of SBTi, stressed that the findings should be viewed within the context of the reviewed evidence, without making broad generalizations. Ehr also said that:

“Targets are the first step to decarbonization and it is important that the SBTi conducts a comprehensive process to revise the Standard to help companies take the lead on climate action and drive down emissions.”

Interim CEO Sue Jenny Ehr stressed the importance of a thorough revision process to support effective climate action and emission reductions.

Alberto Carrillo Pineda, SBTi’s Chief Technical Officer, stated that the review aims to provide a nuanced understanding of the carbon credits debate, which has become highly polarized. Pineda further remarked that the standard-setter stresses the importance of prioritizing direct decarbonization for climate action.

The SBTi plans to release a draft of the revised Corporate Net-Zero Standard for public consultation in late 2024.

A Carbon Credit Market Shake-Up: A Call for Rethinking Emissions Strategies

Ideally, a carbon credit represents a ton of carbon dioxide emissions that have been either removed from or prevented from entering the atmosphere, often through projects like reforestation or renewable energy. It’s also called carbon offsets in voluntary carbon markets.

The carbon credit market, estimated by BloombergNEF to potentially expand from $2 billion to $1 trillion with right rules, is driven by the recognition that companies will struggle to achieve the required emissions reductions to meet the 1.5°C target set by the Paris Agreement.

These market instruments can be valuable if used correctly and if they incentivize the right outcomes, according to Pineda.

Efforts are underway to address the risks associated with carbon credit trading. For instance, new US guidelines aim to restore trust in the voluntary carbon market (VCM), with Treasury Secretary Janet Yellen noting its potential as a powerful tool against climate change if properly regulated. The US Commodity Futures Trading Commission is also preparing to finalize its carbon credit guidance by the end of the year.

In conclusion, the SBTi’s report calls for a more stringent evaluation and application of carbon credits. The initiative’s renewed emphasis on science and rigorous standards aims to ensure that carbon credits contribute meaningfully to climate goals and do not undermine broader decarbonization efforts.

The post How Effective Are Carbon Credits in Corporate Net Zero? SBTi Speaks appeared first on Carbon Credits.

Microsoft Reported Q2 Record Earnings, How About Its Carbon Negative Goals?

July 31, 2024/in Uncategorized /by

Microsoft has reported impressive financial results for Q2 2024, showcasing strong revenue growth and earnings. But how does the tech giant perform when it comes to its environmental and carbon emission reduction commitment?

Microsoft’s Financial Success

For the quarter ended June 2024, Microsoft reported revenue of $64.73 billion, marking a 15.2% increase year-over-year. Earnings per share (EPS) were $2.95, up from $2.69 in the same period last year. This revenue exceeded the Zacks Consensus Estimate of $64.19 billion by 0.84%, while the EPS surpassed the consensus estimate of $2.90 by 1.72%.

The company forecasts Q1 revenue between $63.8 billion and $64.8 billion. The Intelligent Cloud segment, including Azure, generated $28.52 billion, up 19%, but below the $28.68 billion consensus. Azure and other cloud services grew 29%, with AI services contributing 8 percentage points.

Last week, Google parent Alphabet reported that revenue from its cloud business, which includes Workspace productivity software and Google Cloud Platform infrastructure, increased by approximately 29%.

Microsoft’s 2030 Carbon Negative Goal

Microsoft has set an ambitious goal to become carbon negative by 2030, meaning the company aims to remove more carbon dioxide from the atmosphere than it emits. By 2050, Microsoft plans to offset all carbon dioxide emissions since its inception in 1975. Achieving this involves significant innovation and collaboration, particularly in the face of complex emission challenges.

Since setting its sustainability targets 4 years ago, Microsoft has been at the forefront of efforts to address climate change. Thousands of other companies have also committed to achieving net zero emissions, driven by advancements in technologies such as AI, which enhance measurement, datacenter efficiency, and energy transmission.

Amid financial success, the key environmental challenge of reducing Scope 1, 2, and 3 emissions remains substantial.

In FY23, Microsoft’s total emissions rose by 29.1% compared to the 2020 baseline. This increase is attributed to ongoing investments in technology and infrastructure to support future innovations.

Chart from Microsoft 2024 Environmental Sustainability Report

Notably, Scope 3 emissions account for more than 96% of Microsoft’s total emissions. These emissions primarily come from two upstream categories: Purchased Goods and Services (Category 1) and Capital Goods (Category 2), as well as one downstream category: Use of Sold Products (Category 11).

Chart from Microsoft 2024 Environmental Sustainability Report

Although Microsoft has reduced Scope 1 and 2 emissions by 6% since 2020 through efforts such as clean energy procurement and green tariff programs, Scope 3 emissions remain the biggest challenge. Addressing these requires extensive collaboration across industries.

SEE MORE: Google, Meta, Microsoft, and Salesforce Launch “Symbiosis”, Pledging for 20M Tons of Nature-Based CDR Credits

What’s Microsoft Doing About Its Increasing Carbon Footprint?

Microsoft’s goal of becoming carbon-negative is deeply connected to global decarbonization efforts. Essential to this goal is supporting the development of carbon-free electricity infrastructure through procurement and investment. Recognizing the scale of this challenge, Microsoft has adopted a pioneering approach by investing in carbon-free electricity to enhance the grids where it operates.

The company is also working to diversify and expand the supply of impactful renewable energy and improve access for all.

Scaling Up Clean Energy

Microsoft’s partnership objectives are to meet its own operational needs, accelerate the development of technologies for its customers and partners, and significantly increase the global sustainability market.

By 2023, Microsoft had expanded its renewable energy portfolio to over 19.8 gigawatts (GW) across 21 countries.

New power purchase agreements (PPAs) were signed with AES in Brazil, Constellation Energy in Virginia, Powerex in Washington, Contact Energy in New Zealand, and Lightsource bp in Poland.

Notably, Microsoft became the first major commercial entity to use Powerex’s 24×7 Clean Load Service for a datacenter in Washington. This service matches Microsoft’s hourly datacenter energy demand with direct deliveries of carbon-free hydro, solar, and wind power year-round, supporting the company’s 100/100/0 goal.

Datacenter Efficiency

Microsoft is optimizing datacenter efficiency using Power Usage Effectiveness (PUE) with a current design rating of 1.12, aiming for even lower values. Transitioning servers to low-power states reduced energy use by up to 25%, cutting Scope 2 emissions.

The company also enhances resource utilization by minimizing peak power needs and improving server density, leading to a 7% reduction in datacenter power infrastructure. Additionally, server utilization improvements resulted in a 1.5% reduction in hardware needs for Azure, significantly reducing embodied carbon.

Fleet Electrification

Microsoft is advancing its fleet electrification efforts across global campuses, aiming to eliminate reliance on fuel-burning vehicles. To achieve a 100% electric fleet by 2030, Microsoft is building an Electric Vehicle Fleet Facility at its Redmond headquarters. This facility, currently in the design phase, will support the electric fleet by providing housing, charging, and maintenance services.

Boosting Carbon Dioxide Removal (CDR) Solutions

To address its unavoidable emissions, particularly Scope 3, Microsoft is committed to advancing carbon removal technologies.

In FY23, the company accelerated procurement across various CDR pathways, leveraging a long-term agreement framework to enhance the impact of large-scale projects. These multi-year agreements are designed to help projects secure external financing and ensure the purchase of additional, durable, measurable, and net-negative carbon credits.

Microsoft’s goal is to build a portfolio of over 5 million metric tons per year starting in 2030, while also exploring novel solutions such as enhanced rock weathering.

In FY23, Microsoft bought 5.015 million metric tons of carbon removal to support its carbon neutral and negative targets.

Chart from Microsoft 2024 Environmental Sustainability Report

Microsoft contracted 5,015,019 metric tons of carbon removal to be retired over the next 15 years. By December 2023, contracts are expected to contribute 875,000 metric tons towards the 2030 target of over 5 million metric tons. Notable projects signed in 2023 include:

Reforestation in the Amazon
Landmark bioenergy with carbon capture and storage (BECCS) in partnership with Orsted

Additionally, Microsoft expanded its renewable energy portfolio to over 19.8 gigawatts, reinforcing its commitment to sustainable energy infrastructure.

And just last month, Microsoft signed two separate CDR deals. One is with BTG Pactual Timberland Investment Group for 8 million carbon removal credits, the biggest CDR transaction on record. The other agreement is with Indigo Ag for 40,000 agricultural soil carbon credits, also the biggest-ever purchase of an individual buyer from the ag company.

With record earnings and significant investments in carbon emission reductions, Microsoft continues to lead in both innovation and sustainability, setting a benchmark for the industry.

The post Microsoft Reported Q2 Record Earnings, How About Its Carbon Negative Goals? appeared first on Carbon Credits.

McDonald’s Balances Sales Decline with Bold Sustainability Goals

July 31, 2024/in Uncategorized /by

McDonald’s reported a drop in US and global sales in Q2 2024, contrasting sharply with the previous year’s growth. Amid these challenges, the fast-food giant is doubling down on value deals and ambitious sustainability initiatives.

McDonald’s Sales Dip Amid Rising Costs

McDonald’s experienced a decline in US and global sales during the second quarter ending June 30, with decreases of 0.7% and 1.1%, respectively. This contrasts sharply with a 10% increase in US sales and a 12% increase in international sales during the same period last year.

The Chicago-based fast-food giant reported a net income of $2.02 billion, or $2.80 per share, down 12% from $2.31 billion, or $3.15 per share, in Q2 2023. Revenues remained flat at $6.49 billion, while systemwide sales decreased by 1%.

Higher prices have led consumers to seek value and lower-priced options, reducing traffic to McDonald’s. Despite these challenges, McDonald’s stock rose by more than 4% following the earnings release.

The increase is attributed to the company’s emphasis on its “$5 Meal Deal,” launched in late June, which targets budget-conscious customers. This strategy aims to attract customers increasingly focused on affordability, especially as prices of popular menu items like the Big Mac and Quarter Pounder have risen by over 20% in recent years.

McDonald’s focuses on value deals to retain and attract customers while addressing its massive carbon footprint at the same time.

McDonald’s Net Zero Strategy

In 2018, McDonald’s set ambitious targets to cut greenhouse gas (GHG) emissions from its restaurants and offices by 36%, and reduce emissions intensity across its supply chain by 31% by 2030 compared to 2015.

These targets, approved by the Science Based Targets initiative (SBTi), were supported by collaboration with industries, governments, Franchisees, suppliers, consumers, and local communities. In 2021, McDonald’s committed to aligning its climate goals with keeping global temperature rises below 1.5°C and achieving net-zero emissions by 2050.

McDonald’s Carbon Footprint

Last year, McDonald’s set a fresh target for 2030 with 2018 baseline:

Reduce absolute scope 1 and 2 GHG emissions from restaurants and offices by 50.4%
Cut absolute scope 3 GHG emissions related to facility, logistics, and plastic packaging by 50.4%,
Achieve a 16% reduction in scope 3 GHG emissions from beef and chicken farming (forests, land, and agriculture) by 2030

“We believe we have both a privilege and a responsibility to help lead on issues that matter most in communities – and there is no issue more urgent globally and of impact locally than protecting our planet for generations to come,” said Chris Kempczinski, McDonald’s President and Chief Executive Officer. He added that:

“By committing to net zero through the SBTi’s Business Ambition for 1.5°C campaign, we are helping every community we serve mitigate the impacts of climate change and adapt for the future.”

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

What McDonald’s Does to Cut Its Supersized Carbon Footprint

The fast-food giant’s net zero strategy revolves around transforming its food system, and supply chain and using renewable energy across its operations. All these targets align with SBTi’s 2023 guidance and the Greenhouse Gas Protocol, the global emissions accounting standard.

McDonald’s emphasizes that evolving climate accounting standards, especially for nature-based solutions like soil carbon sequestration and renewable energy, are crucial for meeting its targets. Balancing climate goals with company performance, including financial growth and innovation in menu offerings and sourcing, remains essential.

Expansion strategies might increase GHG emissions if decarbonization lags business growth. Navigating these challenges will be key to advancing McDonald’s climate targets while driving business forward.

Renewable Energy Impact

The company uses climate tracking data points to measure its energy impact. They have added two major U.S. virtual power purchase agreements (VPPAs) to boost renewable energy on the grid. They expect that their renewable energy projects once 100% operational can cut emissions by 33% from their 2015 baseline. Furthermore, their restaurants are run on renewable energy that meets Global Restaurant Standards (GRS).

Regenerative Agriculture

McDonald’s began regenerative agriculture with supply chain partners to combat deforestation and advocate for climate-positive policies globally. It had partnered with AgMission and FAI Farms, to promote sustainable farming.

McDonald’s targets key commodities—beef, soy (for chicken feed), palm oil, coffee, and fiber (for guest packaging)—to address deforestation risks. The strategy is reviewed with Proforest and WWF. McDonald’s also seeks to make a positive impact in other priority commodities.

Accelerating Circularity

A packaging and waste strategy aims to reduce waste and emissions throughout operations and the supply chain. more than 85.1% of restaurants in markets with advanced infrastructure offered guests the opportunity to recycle packaging items.

While McDonald’s faces declining sales, its commitment to ambitious carbon footprint reduction and sustainability goals shows its dedication to long-term growth and environmental responsibility.

The post McDonald’s Balances Sales Decline with Bold Sustainability Goals appeared first on Carbon Credits.

ASX Debuts Environmental Futures Contracts for Carbon Markets

July 31, 2024/in Uncategorized /by

ASX has launched three Environmental Futures contracts, marking a significant development for carbon and renewable energy markets in Australia and New Zealand. These new contracts enable participants to price and hedge emissions reduction risk as the economy transitions to a lower carbon footprint. These contracts are the first carbon futures contracts to debut in Australia and New Zealand.

Fee-Free Launch Boosts Carbon Market Liquidity

To foster growth, ASX is offering a temporary fee waiver on all Environmental Futures transactions to build liquidity and encourage early engagement from diverse market participants.

The three futures contracts available for trading on the ASX 24 Market include the following physically delivered:

Large Generation Certificate (LGC) Futures,
Australian Carbon Credit Unit (ACCU) Futures, and
New Zealand Unit (NZU) Futures.

These contracts aim to provide a liquid, transparent forward pricing curve on an annual basis for up to five years. Registered participants can make or take delivery of underlying Certificates or Units at settlement. These instruments can then be surrendered to the government to offset emissions or meet compliance obligations.

Each contract is standardized, with each equaling 1,000 underlying LGCs, ACCUs, or NZUs.

ASX designed its suite of Environmental Futures to meet the growing demand for liquid and transparent carbon credit and renewables trading markets. There has been significant interest in these products from a diverse customer base, including the energy sector, carbon project developers, compliance entities, financial institutions, trade houses, and corporates.

Future-Proofing Australia’s Carbon Market

Daniel Sinclair, ASX Head of Commodities, emphasized the importance of derivatives markets as Australia transitions from a voluntary to compliance carbon market, aligning with other global jurisdictions.

“The transition to clean energy, by definition, is uncertain, and ASX-hosted Environmental Futures will be a key instrument in managing risk and supporting the net zero targets of organisations and policymakers.”

Australia’s carbon market is set for significant growth and is poised to become one of the world’s largest producers of carbon credits. Carbon credits, or offsets, represent quantities of abated emissions that fund renewable energy projects and decarbonization efforts. Companies can purchase these credits instead of directly reducing their emissions.

Recent data from the Clean Energy Regulator indicates that about 51% of all ACCUs are now in the registry accounts of safeguard or safeguard-related entities, a volume that could benefit from moving onto the exchange.

Chart from Clean Energy Regulator website

At the end of Q1 2024, the Australian National Registry of Emissions Units (ANREU) reported holdings of 38.6 million ACCUs. This marks an increase of 2.4 million ACCUs over the quarter. In Q1 2024, ANREU issued 3.8 million ACCUs, signaling a strong start towards an anticipated record issuance of at least 20 million ACCUs for the year.

Chart from Clean Energy Regulator website

For the same period, the number of Safeguard (excluding Safeguard-related) accounts holding ACCUs increased by 11, reaching a total of 54. ACCUs held in these accounts rose to 12 million, an increase of 4.6 million over the quarter.

The volume held by Safeguard entities is likely higher, as other accounts, such as intermediaries and project proponents, may hold ACCUs on their behalf.

Catalyzing Climate Action and Carbon Market Innovation

Established in 2016, Australia’s Safeguard Mechanism requires regulated emitters to either adopt cleaner technologies or buy carbon credits to offset their emissions. This policy allows pollution caps to tighten over time, giving companies a window to adjust their operations to meet emission reduction targets. Additionally, it enables firms to offset emissions by purchasing credits from other polluters with surplus credits.

Back in 2022, Australia’s climate policy advisory has recommended establishing a fully transparent national carbon market. This development could facilitate global carbon trade and potentially merge voluntary and compliance markets.

The federal government has committed to reducing carbon emissions by 43% below 2005 levels by 2030. This new target underscores a stronger commitment to climate action, which could drive significant changes in regulatory and market landscapes.

ASX’s Environmental Futures becomes a key element to that climate commitment. It is also part of a broader ecosystem of current and planned futures and options contracts across electricity, gas, and environmental markets. The new contracts will support Australia and New Zealand’s net zero efforts and clean energy transition.

Environmental Futures could attract new market participants due to their liquidity, enhanced price discovery, and reduced credit risk through central clearing. These futures will provide a standardized price around which liquidity can concentrate, which is particularly important in supporting the ACCU market where certain methods and co-benefits are valued differently.

The introduction of these futures contracts underscores ASX’s commitment to supporting the net zero ambitions of businesses and policymakers by providing the necessary tools to manage emissions reduction risks effectively.

The post ASX Debuts Environmental Futures Contracts for Carbon Markets appeared first on Carbon Credits.

Uranium Contract Prices Hit 16-Year Highs, Plus Major Market Development

July 30, 2024/in Uncategorized /by

Long-term uranium contract prices have reached over 16-year highs due to supply uncertainty and increased demand from utilities expanding capacity for AI data centers. Current term prices are around $79 per pound, the highest since 2008, with expectations of further increases.

Cameco, a leading uranium miner, reported securing contract prices with ceilings of $125-130 per pound and floors of $70-75 per pound, the best prices seen in over a decade. Spot uranium prices, which hit a 14-year high in February 2024, are now around $82 per pound.

Uranium Market is Heating Up

Uranium is the primary fuel for nuclear energy. The International Energy Agency predicts that global nuclear generation could double by 2050, calling for a corresponding increase in supply.

However, Plenisfer Investments estimates that prices must exceed the marginal cost of production, currently $90-$100 per pound, by at least 30% to incentivize new projects. This projection suggests a continued market deficit over the next decade.

Chart from Reuters

Goldman Sachs estimated that global data center power demand, currently 1-2% of power use, could grow by 160% by 2030. Nuclear energy companies such as Constellation and Vistra are poised to benefit from the US push for Big Tech to invest in climate-friendly energy to meet the growing needs of AI.

Experts said that rising demand from utilities is narrowing the gap between term and spot prices. They further noted that utilities with ample inventory but those with shortages will be compelled to buy.

Companies like Uranium Energy Corp and Ur-Energy have limited volumes but face high demand. This prompts them to seek higher prices or opt for spot sales, according to Robert Crayfourd, co-fund manager of Geiger Counter.

Major Deals and Mergers Reflect Strong Market Interest

In late June, Australian miner Paladin Energy launched a $1.1-billion bid for Fission Uranium and its high-grade Patterson Lake South project in Saskatchewan. This move aims to address the global nuclear power push amid a decade-long underinvestment in uranium supply.

Paladin CEO Ian Purdy highlighted the shortage of primary uranium production and the strong demand for their Langer Heinrich product. The merger could make Paladin the third largest listed uranium miner globally. The miner has a production potential of 15 million pounds of uranium oxide (U3O8) annually by the decade’s end.

In another significant market development, Uranium Royalty Corp. (NASDAQ: UROY) has entered into a binding royalty purchase agreement to acquire an additional royalty on the Churchrock uranium project in New Mexico, USA, owned indirectly by Laramide Resources. The Churchrock Project, an advanced In-Situ Recovery (ISR) project, is one of the largest undeveloped uranium projects in the U.S.

Uranium Royalty is the world’s only uranium-focused royalty and streaming company and the only pure-play uranium listed company on NASDAQ. UROY offers investors exposure to uranium prices through strategic acquisitions in uranium interests. These include royalties, streams, debt, and equity in uranium companies, as well as holdings of physical uranium.

The royalty company aims to support the uranium industry, which requires significant investment to meet the increasing demand for uranium as fuel for carbon-free nuclear energy.

Project Overview and Royalty Details

The Churchrock Project, located in the Grants Mineral Belt of New Mexico, is owned by Laramide’s subsidiary NuFuels. It’s at a development stage with significant ISR uranium resources, which could play a critical role in the U.S. uranium production landscape.

Preproduction wellfield development is expected to take four years, with all other necessary infrastructure already in place. Laramide holds most of the permits and licenses required to start production. The Life of Mine unit operating cost is estimated at US$27.70/lb. U3O8, with a static uranium price assumption of US$75/lb. U3O8.

Boosting U.S. Domestic Uranium Production

The transaction aligns with recent U.S. legislative efforts to eliminate reliance on Russian uranium imports and boost domestic uranium production. These initiatives provide funding to expand uranium, conversion, and enrichment capacity in the U.S., targeting complete phase-out of Russian imports by 2028.

Scott Melbye, CEO of UROY, remarked on this development saying that:

“Our enlarging footprints in the uranium royalty sector in the United States as evidenced by the acquisition of the additional royalty on Churchrock fit squarely in support of those initiatives.”

UROY’s acquisition of an additional royalty on the Churchrock Project is a strategic move to support U.S. uranium production. This is crucial for the country’s energy security and transition to a low-carbon economy. The transaction is subject to customary closing conditions and is expected to close by the end of July 2024.

The surge in uranium contract prices to 16-year highs underscores the increasing demand due to nuclear energy push. Significant market developments like mergers and acquisitions highlight the industry’s response to supply challenges and future growth potential.

According to the World Nuclear Association’s Report, the projected supply of uranium by 2040 is shown below. The chart shows supply into current mine capacity, idled capacity, and mines that are under development, planned, or prospective.

Source: The Nuclear Fuel Report, World Nuclear Association

To meet the projected demand from the next decade, idled mines need to restart and mines under development and planning must come online. Moreover, new projects will also need to be developed. Significant exploration, innovative techniques, and timely investments are essential to convert these resources into refined uranium for nuclear fuel production within the required timeframe.

As the uranium market evolves, the focus remains on securing high prices and boosting domestic production to meet the rising demand and ensure energy security.

SEE MORE: U.S. DOE Aims to Expand Domestic Uranium Supply with US$2.7B RFP

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

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Bursa Malaysia Debuts Malaysia’s First Nature-Based Carbon Credits

July 30, 2024/in Uncategorized /by

Bursa Carbon Exchange (BCX), a 100% owned subsidiary of Bursa Malaysia, debuted the Malaysian carbon credits auction on July 25. It is BCX’s first offering of Malaysia Nature-based Carbon Credits Plus (MNC+) from its Kuamut Rainforest Conservation Project. This is indeed a huge achievement for Malaysia as it features domestic carbon credits.

Bursa Malaysia Drives Carbon Credits Market with Kuamut Project

Bursa Malaysia is proactive in engaging with stakeholders, carbon experts, and local developers to boost the carbon credit market in Malaysia.

Notably, in March 2024, the Kuamut project achieved its first Verified Carbon Units (VCUs) under Verra’s Verified Carbon Standard (VCS), cutting annual emissions nearly by 800,000 tCO2e.

It also provides significant climate, community, and biodiversity benefits, earning Gold Level status for Climate under the Climate, Community, and Biodiversity (CCB) Standards. Furthermore, it has accolades from BeZero Carbon for being one of the most advanced forest management projects.

Leading news agencies revealed that units and organizations committed to reducing their environmental impact had joined the auction. Essentially, they focused on offsetting tough GHG emissions through carbon credits. The auction for the forest protection and regeneration project was cleared at RM50 per contract.

Bursa Malaysia CEO Datuk Muhamad Umar Swift has emphasized,

“It has been a long wait for Malaysia to finally witness the auction of the country’s first domestically produced quality carbon credits. A critical step to accelerate the development of domestic carbon projects is to adopt some form of compliance carbon market.”

He has critically assessed the situation, pointing out that the voluntary renewable energy certificates (RECs) market took five years to expand. Given the complexities of implementing carbon projects, especially nature-based ones, he believes Malaysia’s voluntary carbon market will need ongoing improvements to reach its full potential.

Kuamut Project: The Ultimate Carbon Sink

Earlier in May, Bursa Malaysia released a press statement glorifying the geography, ecology, and biodiversity of the Kuamut Project. Located in Sabah’s Tongod and Kinabatangan districts of Malaysian Borneo, it protects and preserves 83,381 hectares of tropical forest.

It is a public-private partnership between the Sabah Forestry Department, Rakyat Berjaya Sdn Bhd, Yayasan Sabah, and Permian Malaysia. Describing further, the project also receives operational support from PACOS Trust and the Southeast Asia Rainforest Research Partnership (SEARRP).

The Kuamut Project is hugely significant for the South Asian nation and is handled by Permian Malaysia, the leading environmental & ecological services for businesses headquartered in London. The project addresses the climate crisis by preventing emissions from deforestation and forest degradation. Safeguarding the forest ensures that carbon remains stored in the biomass. Moreover, as the forest regenerates, it will strengthen its function as a carbon sink.

Bursa Malaysia through this conservation project also aims to improve the livelihood of the locals by creating ample sustainable economic opportunities. They are equally responsible for preserving the rich biodiversity, flora and fauna of the forest.

Image: The Kuamut Forest Conservation Project

source: Permian Global

Permian Global: In a Mission to Secure Tropical Forests

Permian Global operates across Brazil, Colombia, Indonesia, Malaysia, and Peru. It uses private-sector carbon finance to protect, and regenerate threatened tropical forests. The company halts deforestation, prevents species loss, and empowers local communities through large-scale projects in collaboration with locals.

By generating verified carbon units, these projects help corporations meet their climate goals. They believe that protecting forests keeps biomass carbon locked in vegetation, thereby mitigating climate change. Furthermore, local involvement ensures sustainable economic alternatives are carried out in those specific regions.

Most importantly, tropical forests, rich in biodiversity, benefit from these projects, which also include species research and monitoring.

Stephen Rumsey, founder and Chairman of Permian Global said,

“We are incredibly grateful to Bursa Malaysia for their vision and leadership in developing the Carbon Exchange and especially for their support of the Kuamut Project.”

He further added,

“Climate action requires system-wide transformation. This means the rapid development of high-integrity, high-impact actions on the ground, like the Kuamut Project, but it also means building the financial infrastructure that drives investment in these vital activities. BCX is an enormously important piece in the climate puzzle.”

Bursa Malaysia Ensures to Carbon Market Transparency

Last year, BCX auctioned credits from the Linshu Biogas Project in China and Cambodia’s Southern Cardamom Project. However, the Southern Cardamom Project faced backlash for lacking free, prior informed consent from the local community, prompting Verra to investigate in June 2023. So, this time Bursa Malaysia does not want any discrepancy in information. It is rather completely focused on sustained improvement in Malaysia’s voluntary carbon market.

All in all, as Malaysia’s carbon market grows, Bursa Malaysia aims to position the country as a prime spot for nature-based carbon projects, attracting local and international investment. Consequently, the successful launch of the Kuamut project is expected to boost funding for forest conservation and community development. We hope these efforts will solidify Malaysia’s role in global sustainability initiatives.

FURTHER READING: Singapore’s CRX Partners with Malaysian University for Carbon Projects

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Xpansiv Launches First ICVCM CCP-Approved Carbon Credits

July 27, 2024/in Uncategorized /by

Xpansiv, a leader in market infrastructure for the global energy transition, has launched trading of the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles (CCP) standardized carbon credits on its CBL spot exchange.

This significant launch marks an important step towards enhancing the transparency and accessibility of the voluntary carbon market (VCM).

The first-day trading saw participation from major entities such as Mercuria Energy America, ClimeCo, ElectroRoute, Valitera, South Pole, and Cross Stone Capital. A total of 37,606 metric tons of carbon credits were traded via the new CCP GEO contracts, indicating strong interest from global market participants.

The trades included the following, traded through their respective CBL CCP Global Emissions Offset (GEO®) registry-specific contracts:

10,000 tons of ACR,
15,606 tons of CAR, and
12,000 tons of VCS credits.

Additionally, there were 73,778 tons of bids and offers for the new contracts posted during the trading day.

Promoting High-Integrity Carbon Credits

CCP-labelled carbon credits are issued under programs and methodologies independently assessed through the ICVCM’s rigorous process. This ensures they meet high-integrity standards for additionality, accurate quantification of emission reductions and removals, permanence, and positive social and environmental impacts.

The introduction of these standardized contracts in Xpansiv platform aims to provide transparent price discovery and streamlined market access for buyers and sellers of ICVCM CCP-approved credits. Industry leaders have expressed strong support for this initiative.

Adam Raphaely, Managing Director of Mercuria Energy America, remarked that:

“The launch of Xpansiv CBL’s standardized contracts is an important step to provide transparent price discovery and streamlined market access to buyers and sellers of ICVCM CCP-approved credits.”

Alex Bryson, Head of Green and Carbon at ElectroRoute, noted that standardization efforts are likely to have a positive impact on the market and expressed enthusiasm about participating at an early stage.

The experts see these standardized contracts’ launch as a critical step towards enabling market participants to differentiate high-quality carbon credits within the VCM.

Market Response and Future Outlook

The new registry-specific GEO® standardized contracts from Xpansiv allow buyers to take delivery of CCP-approved credits from the American Carbon Registry (ACR), Climate Action Reserve (CAR), and Verra registries. These contracts are settled daily to Platts price assessments from S&P Global Commodity Insights, a leading price reporting agency in the carbon markets.

On the launch day, the CCP ACR contract closed at $2.25, the CCP CAR contract at $9.13, and the CCP VCS contract at $2.50. Russell Karas, Senior Vice President of Xpansiv, expressed gratitude for the participation of leading market stakeholders and highlighted the importance of high-integrity CCPs in revamping the VCM.

The ICVCM developed its Core Carbon Principles to establish a threshold for high-integrity project credits. The first set of seven qualifying CCP methodologies was announced by the ICVCM in June, with additional methodologies expected to be approved in the coming months.

Corresponding credits will immediately be deliverable into the respective CCP GEO contract when they are labeled as CCP eligible in their designated registry. As new programs are approved, additional CCP contracts will be introduced, further expanding the range of available credits for trading.

The market response to the new contracts has been positive, with significant trading activity and strong interest from market participants.

The standardized contracts are expected to play a crucial role in the development of the VCM by providing a transparent and efficient mechanism for trading high-quality carbon credits. This initiative is seen as a significant step in ensuring the integrity and effectiveness of carbon offset projects.

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Copper Prices Slump Below $9,000: What Does It Mean for Global Growth?

July 26, 2024/in Uncategorized /by

Copper prices fell below $9,000 a ton for the first time since early April due to a global stock market selloff and rising pessimism about demand in China and elsewhere. The industrial metal has dropped by about 20% since its mid-May record high, driven by concerns over increasing inventories and weak conditions in the Chinese spot market.

What Causes the Market Downturn?

Copper is hailed as the economic bellwether because it rises and falls in tandem with industrial production. The metal is also popular as “Doctor Copper”, a slang word for copper’s price to foresee the economy’s overall health.

As seen below, copper price at London Metal Exchange (LME) has been dropping since it hit record high in May.

The falling copper prices is further worsened by a significant selloff in global technology stocks and doubts about the growth of the artificial intelligence industry. The AI industry had previously boosted copper prices due to anticipated surges in data center use and power infrastructure.

Gong Ming, an analyst at Jinrui Futures Co., noted that global growth concerns could drive copper prices lower, although prices might find support around $8,900 due to potential supply risks. Copper dropped 2.2% to $8,900 a ton and was trading at $9,010 at the time of writing. Nearly all metals were lower on the LME, with tin declining 2.6% and zinc losing 1.5%.

Iron ore also declined by 0.9% to trade below $100 a ton in Singapore, with signs of robust supply continuing. According to Liz Gao, a senior iron ore analyst at CRU, weak steel demand and negative steel margins in China are causing mills to reduce production and avoid building raw material stocks.

Despite recent rate cuts by China’s central bank to revive the economy, copper price continued to fall. It marks the worst weekly slump in almost two years, as a modest rate cut in China failed to alleviate concerns about demand in the world’s largest commodities consumer.

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

China’s Copper Exports Hit Record High

The red metal dropped for the 6th consecutive day despite China’s efforts to support its economy through unexpected interest-rate cuts. The lack of short-term stimulus from a recent major Communist Party meeting added to investor disappointment.

Ewa Manthey, commodities strategist at ING Bank NV, noted:

“We expect copper and other industrial metals to decline further in the near term. That trend would reflect “a softer demand outlook in China.

China’s refined copper exports reached a record high in June, driven by weak domestic demand, prompting smelters to seek overseas markets. Exports more than doubled to 157,751 tons from May, surpassing the previous all-time high of 102,000 tons set in 2012, according to customs data.

Asia’s largest economy experienced its slowest growth in five quarters in the three months through June. This leads to a 14% drop in global copper prices since mid-May.

The surge in exports is also reflected in the increased copper inventories at LME warehouses, which have more than doubled since mid-May, reaching their highest levels since September 2021. This increase is largely due to the lack of domestic demand.

Benchmark Minerals Intelligence believes that despite spot treatment and refining charges (TC/RCs) at record lows, Chinese smelters are maintaining strong output. Benchmark estimates most smelters in China are loss-making, despite improved by-product credits.

Interestingly, copper prices peaking in May increases scrap copper supply by 20% year-on-year. Most incremental supply went to Chinese smelters, boosting refined copper production.

Copper Demand for Clean Energy is Positive

With prices now below the $9,000 threshold, scrap merchants are less willing to supply, and inventories are low. As scrap supply fades in Q3, raw material supply will tighten. Benchmark projects a refined copper production growth rate of 2.3% in H2.

Moreover, though China’s refined copper supply was strong in Q2, consumption growth was weak. High copper prices led to reduced restocking and plant utilization, causing a counter-seasonal stock-build and record exports in May.

Despite short-term pressures, end-use demand indicators are positive: electric vehicle sales are up 32%, and solar installations and grid investments increased 29% and 22%, respectively.

Copper demand in traditional uses will grow by just 0.5%, but substantial increases could come from green energy sectors, per the International Copper Association. Demand from EVs and chargers will rise by 11%, grid expansion will boost demand by 19%, and renewable energy technologies will see a 7% increase in copper use.

Moreover, meeting net zero carbon emission targets by 2035 may require doubling annual copper demand to 50 million metric tons, according to an industry-backed S&P Global research. Even conservative projections suggest a one-third increase in demand over the next decade due to investments in decarbonization by governments and businesses.

These trends underscore copper’s major role in the transition to clean energy. Miners must embrace this shift and increase production of this essential metal to meet the growing demand. With copper price falling down, this remains to be seen.

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How India’s Budget 2024 Sets a Global Standard for its Critical Minerals

July 26, 2024/in Uncategorized /by

In a groundbreaking move, India’s Finance Minister Nirmala Sitharaman has given utmost significance to critical minerals in the Union Budget for 2024-25. The Critical Minerals Mission aims to bolster India globally by ramping up domestic production of critical minerals for electric vehicles (EVs) and renewable energy technologies.

What is India’s Critical Mineral Mission?

Critical and rare earth elements (REE) are crucial for advancing clean energy and electric mobility, as the Economic Survey 2023-24 emphasized. The survey highlighted issues at mineral deposit sites and trade policies that are affecting India’s renewable energy and EV targets.

The government aims to launch this mission to eliminate these challenges and establish a smooth policy for domestic mineral exploration. The mission has outlined a comprehensive strategy that includes the recycling of lithium, copper, cobalt, and other REEs.

Furthermore, India will actively collaborate with REE-dominant nations like Australia and engage in initiatives like the Mineral Security Partnership (MSP). This will be a key component of the critical mineral mission. These partnerships are essential for securing overseas mineral resources and advancing India’s strategic objectives in exploration science.

Mrs. Sitharaman in her Budget speech, said,

“We will set up a Critical Mineral Mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets. Its mandate will include technology development, a skilled workforce, an extended producer responsibility framework, and a suitable financing mechanism.”

She proposed that,

“25 critical minerals will be exempted from Basic Custom Duties (BCD). This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors.”

How will the Budget 2024 Impact EVs and REEs?

Lithium, the key element for manufacturing batteries in EVs, just got a boost from the Budget 2024. The elimination of custom duty on lithium is set to drive down prices, making EV batteries more affordable in India. The same policy applies to ferrous scrap and nickel cathode while offering a concessional rate for copper scrap. These measures are aimed at fostering local manufacturing and recycling capabilities.

Currently, high lithium-ion battery costs are making EVs costlier. The Union Ministry of Mines reported that last year India imported over 2,000 tons of lithium, priced at Rs 700 crore. However, this waiver on customs duties, paired with declining global lithium prices, promises to reduce EV manufacturing costs. Additionally, the discovery of new lithium reserves in India could further slash prices, making EVs more accessible and affordable.

Pratik Kamdar, CEO & co-founder of EV batteries supplier Neuron Energy said,

“This pivotal move will substantially lower the production costs of battery cells, directly translating into more affordable electric vehicles (EVs) for consumers. By reducing manufacturing expenses, the overall cost of EV batteries will decrease, making electric vehicles a more economically viable option.”

Bhavish Aggarwal, Founder of Ola remarked,

“Exciting to see the Union Budget 2024-25 prioritizing DPI, critical minerals, and job creation. The focus on developing DPI applications in agriculture and other areas lays the data foundation for making India the AI hub of the world.”

He further added that the Critical Mineral Mission could be a game changer for India’s energy transition journey and would create ample job opportunities.

Why Mixed Response from Some EV Enthusiasts?

The EMPS (Electric Mobility Promotion Scheme) 2024 will end on July 31, 2024, and with this, the government needs to roll out a fresh long-term strategy to support the EV ecosystem. However, nothing has been clearly explained on the budget about the renewal of EMPS. Hence the response is mixed! EV makers expect that the new plan should focus on supply-side initiatives to boost domestic manufacturing and innovation.

Many startup founders and industry pandits have assessed the situation differently. They perceive that EV startups need robust support for R&D, easy capital access, and production-linked incentives. These measures will spur rapid innovation, scale operations, and increase contributions to India’s EV manufacturing. They believe that boosting India’s EV charging infrastructure is crucial to winning customer confidence. This demand is directly tied to ramping up the production of Indian EVs, including batteries and other components.

From media reports, we discovered that there’s strong anticipation for a reduction in GST rates on EV components and batteries from 18% to 5%. This tax cut would offset potential price hikes following the end of subsidies, keeping EVs affordable.

source: Grand View Research

After speculation and analysis, we can conclude that the current budget with its focus on critical minerals can position India as a global leader in clean mobility and innovation. We expect significant impacts on EV batteries, nuclear technology, AI, telecommunications, and advanced electronics. However, clear guidelines for EVs are still needed, which we hope to see in the coming months.

FURTHER READING: Adani Reaches India’s First 10,000 MW Renewable Energy Capacity

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