China Ready to Reboot Carbon Scheme

China has revealed its plans to relaunch the China Certified Emissions Reduction scheme (CCER). The plan to reboot the CCER has been in the works as early as last year. However, it is now ready for operations to start.

In 2017, China had suspended the CCER scheme due to low trading volumes. The country now plans to reboot its voluntary carbon market through CCER. 

China Beijing Green Exchange (CBGE) manages the relaunching project. On February 4th, the CBGE revealed that the registration and trading schemes for CCER were complete. The systems are ready for inspection before operations commence. 

There is a lot of focus on China’s carbon emissions policies as the country is one of the largest economies in the world. It is also the number one carbon emitter in the world, with more than 10,000 million tonnes of CO2 emitted in 2020. It is responsible for almost 30% of the world’s carbon emissions. 

This means that if the world wants to meet its net zero goals, China must successfully manage its CO2 emissions.

A World Bank report revealed last year that China would require $17 trillion in investments to achieve their net zero targets. These investments are in the power and transport sectors alone.

CCER will supplement China’s ETS in reducing carbon emissions

The CCER and China’s ETS (Emissions Trading Scheme) are crucial to China’s goals to reduce carbon emissions. The ETS began trading in 2021 and has completed its first compliance period. 

The ETS is a scheme to limit or reduce carbon emissions. It is particularly prominent within the country’s power generation sector. It allocates emissions allowances to coal and gas-fired power plants but it will expand to other industrial sectors over time. The Shanghai Environment and Energy Exchange oversees the ETS.

In terms of capacity, ETS is currently the largest carbon market in the world. It is three times the size of the EU carbon market. Its capacity is close to an annual 4.5 billion tonnes of CO2. This represents 40% of the country’s total carbon emissions per year.

The way China allocates the allowances differs from the EU. In the EU, allowances are capped and decided upfront. China determines allowances based on emissions intensity.

One allowance for a company means that it can emit 1 tonne of carbon. 

In the first year of operation, the ETS was off to a slow start, which is not unusual for these schemes. In 2021, it traded 412 million tonnes worth of carbon allowances. For comparison, the EU’s ETS traded 321 million tonnes of CO2 allowances in its first year.

The current ETS only allows fossil-fuel based Independent Power Producers (IPPs) to benefit by trading credits. It leaves no room for renewables-based IPPs to benefit. This is the issue the CCER hopes to address. The current ETS will expand beyond the power sector into other industries.

China’s CCER scheme broken down

CCER was a scheme where the Chinese government certified voluntary carbon emissions reduction activities by companies. These include projects such as renewable energy, waste-to-power generation and forestry. These projects generated carbon credits which can be sold and traded. 

CCERs could be used to offset carbon deficits or China Emissions Allowances (CEAs) deficits. Hence, companies with high emissions will pay entities like renewable power companies for credits.

However, there is a cap on CCER credits. It can offset 5% of emissions that exceed the ETS targets.

The CCER was first established in 2012. The country’s central economic planner, the National Development and Reform Commission (NDRC) introduced measures to encourage voluntary carbon emissions reduction activities. 

With this scheme, both foreign and domestic entities were able to carry out transactions for different greenhouse gasses. These included carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. 

Why the CCER was suspended

According to the NDRC, the CCER had some issues that caused its suspension. Firstly, there were low trading volumes on the CCER. Secondly, there was little standardization when it came to carbon audits. As a result, CCER registrations were temporarily suspended.

What to expect with the relaunch

It was announced at the end of 2021 that the Beijing Green Exchange will oversee the CCER trading. The exchange will also be open to foreign investors. 

Once launched, analysts predict that CCERs worth 300 million tonnes will be traded. The previous issue of low trading volumes in the CCER is also expected to be resolved. As the ETS expands to include more energy-intensive sectors, the CCER’s trading volume will increase.

However, the CCER relaunch does pose some challenges. How the ETS will incorporate the CCER scheme is not entirely clear yet. Currently, only wind and solar projects with an internal rate of return (IRR) of lower than 8% can apply for the CCER. 

This requirement leaves out a lot of renewable energy projects. It means that only new renewable projects with low IRRs can truly benefit from the CCER relaunch.

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Carbon Credit Platform Carbonplace Gets $45M From Large Banks

Nine global banks have invested a sum of $45 million in a new carbon credit platform to help ramp up transactions in the voluntary carbon market (VCM) and give the banks’ clients easier access to the market.

Banks’ $45M Climate Commitment

Demand for carbon offset credits is estimated to grow significantly as businesses are using them to achieve their net zero emissions targets

Right now, carbon credits change hands bilaterally on a project-by-project basis as well as through exchanges. 

Each of the nine banks entrusted $5 million into the carbon credit trading platform Carbonplace. The trading platform will connect buyers and sellers of carbon credits through the banks, namely.

BBVA
BNP Paribas
CIBC
Itaú Unibanco
National Australia Bank
NatWest
Standard Chartered
SMBC 
UBS 

Their $45 million capital injection shows a commitment to help tackle climate change. Those nine world’s largest bankers represent about $9 trillion in total assets. With their investment, each bank shares equal equity ownership in Carbonplace.

With this technological solution, each bank can now offer its customers committed to decarbonize direct access to carbon credits to offset their footprint. 

Carbonplace stated in its statement:

“The capital injection represents a commitment from some of the world’s largest financial institutions… to achieve Carbonplace’s vision of accelerating corporate climate action by providing transparent, secure and accessible carbon markets.”

The Carbonplace Platform  

Carbonplace is a trading platform launched in 2021 to connect buyers and sellers of carbon credits through their respective banks. The company received its seed funding from its founding institutions that developed its technology.

Carbonplace’ headquarters is in London under the leadership of its new CEO, Scott Eaton. He’s a financial tech veteran who chaired Nivaura, a capital markets fintech. Eaton described Carbonplace as transforming the way carbon credits are bought, distributed, and held. 

The trading network will use the $45m investment to scale up its platform’s infrastructure and grow its team. It will also seek more partnerships with other major market players such as stock exchanges and carbon registries worldwide.

The carbon tech firm said the carbon credits available would be from existing carbon offset standards bodies like Gold Standard and Verra.

Hailed as the “SWIFT of carbon markets”, Carbonplace has done pilot transactions with several buyers, sellers, exchanges, and registries. Some names include the global payments tech giant Visa and Climate Impact X, a carbon marketplace based in Singapore.

In summary, here’s what Carbonplace is all about. 

The network is seen as Xpansiv’s new carbon credit rival. It will facilitate the simple, secure, and transparent transfer of certified carbon credits. And that happens in real time.

Digital wallets allow the ownership of a credit to be reliably proven to the market, which lowers the risk of double counting and simplifies transparency.

Driving Corporate Climate Action

Large companies have been setting lofty net zero pledges such as these major airlines, T-Mobile, Disney, Stellantis, Lenovo, and more. Most of them follow the world’s goal to hit net zero emissions by 2050 while others have targets 10 years ahead. 

As the number of companies pledging to cut their emissions grows and investor pressure for clear plans intensifies, the importance of voluntary carbon market becomes even more obvious.

A representative from BBVA, Ingo Ramming, commented:

“Carbon markets are a fundamental pillar of our sustainability strategy and an enormous business opportunity… Carbonplace strengthens our value chain. Its modern, flexible, and secure technology will enable carbon markets to realize their full potential to drive large-scale climate action.”

The VCM has a key role in driving corporate climate action and helping companies achieve their net zero goals. Firms buy carbon credits to offset emissions they can’t avoid or reduce. 

As per BloombergNEF’ projection, demand for carbon offset credits can grow 40x to 5.2 billion tons of CO2 in 2050. That represents 10% of current global carbon emissions.

Investments in VCM projects grew to $10 billion last year, up from $7 billion in 2021, according to a report. While the volume of carbon credits bought as offsets (155 million) went down 4% from 2021, global supply jumped 2% (255 million). 

Carbonplace’ carbon credit platform will be available to the banks’ corporate customers later this year. It can also be open to retail customers in the future, the firm’s chief technology officer says. 

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Carbon Credit Rating Firms Seek to Boost Buyers Confidence

Carbon credit rating firms seek to help companies have a better sense of carbon offset credits, from which many have turned their backs on due to the reputational risk of greenwashing. 

The notion of greenwashing refers to projects that don’t follow standards and have inaccurate measurements. It weakens the confidence of carbon credit buyers, especially businesses wanting to decarbonize their operations. 

Rating Carbon Credit Projects

Corporations, online carbon marketplaces, and traders are the common clients of carbon credit ratings. But recently, intermediaries that sell carbon credits also now have the scores along with them. 

Each carbon credit represents one metric ton of carbon dioxide avoided or removed from the atmosphere. 

Carbon credit rating agencies grade projects by considering social and economic data, academic research, and satellite imagery. They flag risks using various criteria. For instance, if a project issues too many credits or it’s financially reliant on income from carbon credits.

The rating firms have been flagging projects like anti-deforestation for issuing more credits than they should be. In fact, they already provided early warnings way before the media claims that projects don’t deliver the carbon reductions they promise.

For example, one of the carbon credit rating agencies, Sylvera, reported that below a third of REDD+ projects (preventing deforestation) are high quality. The rater’s CEO Allister Furey noted: 

“There is a historic problem with carbon markets lacking transparency and a big spread in quality has undermined [their] legitimacy.”

How grading or scoring is done

The market for voluntary carbon credits (VCM) reached $2 billion in 2022, according to Ecosystem Marketplace. Different estimates say it will hit $50 billion by 2030.

The carbon credit ratings industry primarily earns through subscriptions. The 4 most well-known companies in the sector are Sylvera, BeZero Carbon, Calyx Global, and Renoster Systems.

The recent carbon credit marketplace launched by Salesforce includes ratings from Sylvera and Calyx. The tech giant has also added BeZero to its rating partners.

Nina Schoen, head of product for Salesforce’s Net-Zero Marketplace said:

“A third-party rating for us is almost like education for buyers. It’s one piece of critical information alongside all sorts of critical information that buyers need.”

Each carbon credit rating firm has its own unique system. 

Sylvera scored projects using an 8-point scale with AAA as highest to D as lowest. BeZero uses a 7-point letter scale from a high of AAA+ to a low of A. 

Calyx Global opted to use a 5-point scale from A to E while Renoster rates projects in two stages and assigns a numeric score beginning at zero. The numbering represents how many tons of CO2 or equivalent emissions each credit abates. 

Rating agencies say that not every credit represents an actual ton of carbon avoidance or removal. Not all credits are made equal; some don’t deliver on their claims while others could be doing more than what they promise. 

Apart from the scores that carbon credit rating firms have, there are other grades that companies and investors use in measuring sustainability such as ESG scores and green bond assessment of a project. 

Discrepancies in Ratings

Scores from raters often vary. In fact, 26 out of 40 projects reviewed by the Wall Street Journal agree in broad terms but significant differences exist in rating large forestry projects. 

For example, a forestry project in Brazil got the lowest score from BeZero and Calyx but Sylvera gave it a better grade. 

In BeZero’s assessment, the project won’t likely need funding support from carbon credits as it is exporting lucrative wood products like mahogany. The rating agency also noted that Brazilian laws would protect the trees from getting harvested. 

Meanwhile, Calyx has three significant risk factors for the project. Potential over-crediting is one of them. 

Agrocortex, the project developer, said revenue from carbon credits accounts for about 60% of its income in 2021 and 2022. The developer said it will earn a gross profit of $17 million at the most during a three-decade period of producing timber sustainably while also allowing it to sell carbon credits. 

The developer also said that despite selling high-value timber, the return on investments is very low as it competes with illegal loggers that offer products at lower prices. 

More remarkably, carbon credits prompt the company not to harvest economically viable wood. This keeps deforestation rates in line with Sylvera’s expectations. 

Among the carbon credit rating agencies, BeZero rates more conservatively than others. 20% of projects got the highest rating from Sylvera, 10% of them were reviewed by Calyx, and 8% earned the top ratings from BeZero.

For instance, 40 projects rated by Sylvera and BeZero compared on a standardized scale showed the following differences on 5-point rating scales. 

Overall, there are thousands of projects in place that generate carbon credits. But only a fraction of them has been scored and rated, including the largest projects by credit volume. BeZero rated the most projects (280), followed by Calyx (260), Sylvera (115), and Renoster (9). 

BeZero and Calyx cover a broader range of projects, from capturing methane leaks from landfills to energy-efficient cookstoves. Sylvera and Renoster focus on rating nature-based projects.  

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Transparency in Intermediaries’ VCM Transactions is Critical

Voluntary carbon credit markets (VCM) have a big role to play in financing climate actions but the actual amount of money that intermediaries earn and goes to climate projects remains unknown. 

According to a study commissioned by the Carbon Market Watch, 9 out of 10 intermediaries don’t reveal the fees they charge or profits they earn. Their role in the VCM has been increasingly scrutinized.    

Opaque Financial Transactions Involving Carbon Credits 

Intermediaries – brokers, retailers, or exchanges of carbon credits – have been under interrogation. 

Last year, an investigation noted that several brokers in the VCM are buying carbon credits from forestry projects in poorer nations and selling them at big margins. Likewise, an inquiry on SouthPole showed that the company was earning millions of dollars from brokering low-quality carbon credits.  

In a similar finding, Carbon Market Watch released a report saying that 90% of the intermediaries under investigation don’t reveal the exact fees or profits earned from selling carbon credits on the VCM. 

This lack of transparency in the financial transactions involving carbon credits is alarming. It doesn’t give the market players the true insight whether the VCMs are indeed successful in financing climate actions. 

Plus, it also makes it impossible to measure the real amount of earnings and speculation on the part of the intermediaries. These include the emerging craze among carbon crypto companies.

This opacity has to change. 

Checklist in Buying Carbon Credits

Being transparent about the information on the middlemen’s earnings per credit will allow buyers to support projects where the gap between how much they pay and what the project owner gets is the smallest. This will greatly benefit the project owners or developers, with more bargaining power with intermediaries.

So, carbon credit buyers should not be lenient anymore on demanding transparency from intermediaries. They must know what questions to ask to make informed decisions.

According to Carbon Market Watch, here are the questions that buyers must ask to channel their money to the right projects.

Carbon markets are a tool to channel finance to climate related projects. Yet, there’s limited data available to quantify it. 

There is not enough data on how much finance is going to climate action through the VCM.

The value of market size is determined by multiplying the number of trades by the estimated price.

Apart from carbon credit price transparency concerns, where the money paid by the final buyers goes is also unclear. This includes the amount of money that stays in the hands of the intermediaries and the cash that project developers make as profits.

In a best-case scenario, project developers sell directly to end buyers without the need for an intermediary. In this case, as much as 60% of revenues goes back to the climate project or local communities.

Under a worst-case scenario, brokers can take as much as 78% of the revenues of the carbon credit sales.

So why do project developers still work with brokers? Some think that they help connect with buyers and it’s convenient for price discovery.

The Role of Intermediaries in the VCM

Intermediaries have a big role to play in the VCM. They help connect project developers and carbon credit buyers.

Speculative intermediaries, in particular, are investing to buy carbon credits at a time when demand is extremely low at cheap prices. In effect, they’re still providing a lifeline to projects. But that was the case before.

Today, those speculative intermediaries are now cashing in, by reselling the credits at several times more the price they bought them. Though nothing is wrong in earning a profit, it would be if most of the money paid supposedly to finance climate action get stuck on intermediaries’ wallets. 

In a report by Thallo on scaling up the VCM, $650 million went to the pockets of investors and brokers – not project developers – out of the 500 million carbon credits traded in 2021, 

That accounts for 1/3 of the revenues the VCM generated in 2021.

This is where the concept of “fair deals” comes in. It offers a floor price to project developers and includes a means to ensure that they will benefit as well if market prices rise before the credit is used.

This calls for a discussion defining “fairness” in the carbon market, which has a positive societal and environmental impact. 

But if intermediaries still won’t disclose their fees and mark-ups, the real path that a carbon credit takes and the number of times it changes hands will remain secret. Keeping this information hidden will raise suspicions about who really benefits. 

Thus, intermediaries must improve transparency in their transactions to also improve trust in the VCM.

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Verra Holds Crediting for CDM Rice Cultivation Methodology

World’s largest carbon registry Verra has paused all crediting activities surrounding the use of UNFCCC Clean Development Mechanism (CDM) on rice cultivation methodology. 

Verra conducted a review of the use of the CDM methodology AMS-III.AU in its Verified Carbon Standard (VCS) Program. It’s otherwise known as methane emission reduction by adjusted water management practice in rice cultivation. 

CDM Rice Cultivation Methodology

The CDM AMS-III.AU applies to reduced anaerobic decomposition of organic matter in rice cropping soils. This includes projects or activities such as the following:

rice farms that change the water regime during the cultivation period from continuous to intermittent flooded conditions and/or a shortened period of flooded conditions; 
alternate wetting and drying method and aerobic rice cultivation methods; and 
rice farms that change their rice cultivation practice from transplanted to direct seeded rice.

The specific type of climate mitigation action the methodology represents is GHG emission avoidance.  

Projects that generate carbon credits under this methodology must meet important conditions. The major one is that rice cultivation in the project area must be characterized by irrigated, flooded fields for an extended period of time during the growing season. 

With the project implemented, the rice fields must have a controlled irrigation and drainage system in place. But any activity under the project should not lower rice yield. 

Moreover, the project must provide training and technical support to farmers during the cropping season. However, any rice cultivation practice the project introduces should not be subject to local regulation restrictions. 

Here’s how it looks like, from baseline scenario to project scenario. 

Why Verra Reviews the Methodology

Verra paused the carbon crediting of projects covered by the CDM rice cultivation methodology and placed it under review for these concerns:

Project categorization as small-scale. This is an important criteria for a project to benefit from UNFCCC CDM rules. Only qualified as such a project can use common practice analysis as part of the additionality tool.
Potentially not satisfying regulatory surplus requirements or going beyond what the government requires.
Concerns with project monitoring data quality. 

With that said, Verra will immediately inactivate the use of UNFCCC CDM rice cultivation methodology in its VCS Program. And that means suspending all requests involving projects that are using the methodology. These include:

Pipeline listings
Registrations
Verification approvals
Issuances 

The VCS Program allows projects to apply a methodology under other GHG programs such as the UNFCCC CDM. But such an application is still subject to the rules of Verra’s VCS Program.

Rule for Methodology Dev’t and Review Process

The top carbon registry may review methodologies approved under its VCS Program. That is to ensure that they still reflect best practices, scientific consensus, changing market conditions, and technical development in a sector. 

Verra is doing a periodic review of each methodology, module, and tool within 5 years after its last review or update. Depending on the result of a review, Verra may revise the methodology.

As per the VCS Program’s rules in Section 5 on methodology development and review process, Verra will conduct the review if a project developer, a VVB, or the registry itself find an issue such as:

Material inconsistency with a new VCS Program rule (causing material difference in the quantification of GHG emission reductions or removals by projects applying the methodology);
General scientific or technical developments in a specific sector; or
Any other well-founded concerns about a methodology.

To date, Verra has registered 37 projects using the CDM rice cultivation methodology. 25 of them have issued verified carbon units or carbon credits amounting to 4.56 million. That figure accounts for only 0.43% of all carbon credits issued and verified by Verra.

The review follows Verra’s initial assessment of concerns raised relating to the methodology. Results will be published as they become available.

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Exxon Picks Technip to Design its $7B Low-Carbon Hydrogen Plant

ExxonMobil announced the major step of its plan to develop the world’s largest low-carbon hydrogen production facility, with a contract for front-end engineering and design (FEED) awarded to Technip Energies. 

The oil giant will build the largest low-carbon hydrogen production plant in the world in Baytown Refinery near Houston, Texas. ExxonMobil awarded its FEED contract to French-headquartered Technip Energies.

Technip Energies is an engineering and technology company for the energy transition that has long had a strong presence in the area. 

Exxon says it plans to come to a final investment decision in the Baytown hydrogen plant in 2024. Stakeholder’s support, permits, and market conditions will dictate how the project goes. 

World’s Biggest Low-Carbon Hydrogen Plant

The proposed facility will cost Exxon $7 billion to develop. The plant can produce 1 billion cubic feet (bcf) of low-carbon hydrogen daily, making it the world’s largest facility. 

It will also produce an undisclosed volume of ammonia, a key fertilizer ingredient. 

The oil and gas corporation also adds that it will capture and permanently store over 98% of the facility’s carbon emissions. That amounts to around 7 million metric tons (Mt) of carbon dioxide each year. 

Such goal is in coordination with its major carbon capture and storage (CCS) project it’s currently developing in the Houston and Gulf Coast area. It has the capacity to store up to 10 million Mt of CO2 each year.

The current global CCS capacity is 63 million tonnes per year (Mtpa).

The planned pipeline is 14x that amount – 1 billion tonnes. The bulk of capacity as of Q2 2022 resides in the U.S. and Canada as seen in the chart below. But by 2030, capacity in Asia and Europe will be higher, according to energy intelligence firm Woodmac.

The CCS network for Exxon’s project will be made available for use by 3rd-party CO2 emitters in the area. The firm has offtake agreements under discussion with these third party customers. 

According to Dan Ammann, President of ExxonMobil Low Carbon Solutions, the project allows them to offer “significant volumes of low-carbon hydrogen and ammonia to third party customers in support of their decarbonization efforts”. He further said that:

“In addition, the project is expected to enable up to a 30% reduction in Scope 1 and 2 emissions from our Baytown integrated complex, by switching from natural gas as a fuel source to low-carbon hydrogen…”

The announcement comes after Exxon unveiled last week that it has stopped routine flaring of natural gas in its Permian Basin operations. It’s also part of the company’s advocacy for stronger regulations to reduce flaring in the industry overall.

Exxon’s Carbon Reduction Plans

Exxon aims to reduce its Scope 1 and Scope 2 GHG emissions from its operated facilities. The end goal is to reach net zero emissions in those categories by 2050. 

“It levels the playing field. We need strong regulations so it doesn’t matter who owns the facility,” says Exxon’s chief environmental scientist Matt Kolesar.

In 2021, the company revealed its carbon emissions reduction plans for 2030 compared to 2016 levels.

The plan is to achieve these targets:

20-30% reduction in corporate-wide greenhouse gas intensity;  
40-50% reduction in greenhouse gas intensity of upstream operations; 
70-80% reduction in corporate-wide methane intensity; and 
60-70% reduction in corporate-wide flaring intensity. 

Moreover, Exxon also announced last year that it expects to capture as much as 50 million Mt of CO2 by 2030. And with various CCS projects worldwide, that capacity will increase to 100 million Mt by 2040

In its Houston Ship Channel, the company said that it’s working with 14 other firms to boost their CCS efforts.

The CCS network is worth $100 billion initially. It will capture CO2 from the tailgates of those plants and store it in underground formations. Storage options would be below the Gulf of Mexico or the nearby coastal areas.

Exxon’s next move is to launch a satellite later in 2023 to help it track its GHG emissions in the Permian Basin and to cut them. It will pair the world’s largest low-carbon hydrogen facility with the biggest olefins plant in the country to make more sustainable, lower-emissions products.

Hydrogen is a hot topic on clean energy transitions. Green hydrogen, in particular, gets a lot of traction and is hailed as the energy of the future. Subsidy programs this year will help ensure that this low-carbon hydrogen becomes a large-scale source of renewable energy.

The Baytown low-carbon hydrogen plant will be commissioned between 2022 and 2027. Its initial startup is sometime in the 2027- 2028 timeline, says Exxon.

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Carbon Negative Building Materials

Perhaps you’re wondering if carbon negative building materials can indeed absorb more carbon than their production emits. If you do, then you’re not alone, many of us do.

In fact, a lot of people have the same question in mind… And it’s not surprising because carbon negative building systems are quite recent but it’s here to stay. Why? 

Over a third of worldwide greenhouse gas (GHG) emissions are courtesy of the building sector. And the world is at the critical point when it has to reduce GHG emissions. That’s why.

What is Carbon Sink Building Material Emissions?

First up, it helps to differentiate between carbon neutral and carbon negative. 

Being carbon neutral means the amount of CO2 the material emits is the same as the amount it removes from the atmosphere. Being carbon negative means the amount of CO2 the product sucks in is more than it releases. 

Carbon negative building systems involve the use of construction materials and technology that can slash the carbon emissions of the building sector with effective removal of CO2 from the air. This is possible with the application of a combination of these:

Sustainable energy sources 
Energy-efficient engineering
Carbon capture technology

Building Sector: A Major Source of Carbon 

Carbon emissions from the building industry and its impact on the environment are getting traction recently. The building sector accounts for a large amount of energy use and carbon emissions. 

The building industry is responsible for about 39% of the global GHG emissions. 

There are simply a lot of sources of GHG when building a structure, such as from sulfur dioxide, carbon monoxide, carbon, particulate matter, and other pollutants. Other major sources include the energy needed for the production and transportation of building materials, treatment, dumping of wastes, and demand for construction equipment. 

Materials and products used in a building like steel and aluminum are created through various processes. These include raw material extraction, raw material process, melting, manufacture of final products, and transportation to building sites. Each of those processes uses energy expressed in carbon emissions. 

Total emissions of all building materials and products and the construction involved in putting them together refer to the building’s embodied carbon. Embodied carbon accounts for about 20% of the total GHG emissions from the building sector.

Cutting embodied carbon is one of the practical mitigation measures for the sector. And it can do that by opting for carbon sink and carbon negative building materials and products.

Unfortunately, the traditional building systems don’t use carbon sink building material. 

Traditional construction technologies largely rely on fossil fuels for their energy needs, which results in huge carbon emissions. Add to this the fact that these traditional systems often lack energy efficient approaches. This then led to more energy use and higher costs. 

Plus, traditional building systems don’t have the ability to remove carbon from the environment. Even if emissions are cut during construction, the carbon emitted by the building itself will remain positive.   

Importance of Carbon Negative Building Materials

Keeping the global temperatures at bay is no longer a choice; it’s a must. Otherwise the planet will have to experience worse effects of climate change. 

This is where the significance of shifting to carbon negative building materials kicks in. Aside from their sustainability, they also offer massive financial advantages. 

For instance, using renewable power sources and energy-efficient engineering may result in lower energy expenses both for builders and tenants. More remarkably but effortlessly, the carbon sequestration ability of the modern carbon negative building materials can generate carbon credits. 

Carbon credits are units earned by reducing or removing carbon from the atmosphere. Each credit represents one tonne of carbon prevented or removed. 

Generating carbon credits gave the holders additional income by selling the credits. 

Now you might be asking what building material has the lowest carbon footprint to get the most credits?

It actually depends on how the material or product is processed, what’s the technology behind it, energy use, raw materials used, and so on. Remember the embodied carbon. 

Concrete is cheap and easy to make, making it a favorite material in the building sector around the world. But that comes at the expense of the earth’s health – 7% of global carbon emissions.

At least 30 billion metric tons of concrete are used every year to erect buildings. 

That fact spurs a race among scientists and engineers to design more sustainable building materials. Apart from carbon negative or green concrete, what are other examples of low carbon building materials?

Let’s get to know them all.

Types of Carbon Negative Building Materials 

Research and development in low carbon building materials resulted in innovative products using recycled products. Here are some examples of recently developed carbon negative building materials. 

Recycled metals:

Processes involved in producing metals are very carbon intensive. But taking their entire life cycle performance can cut their total energy use. That’s because repeated use of recycled metals doesn’t affect their properties.

Also, reusing existing metal structural parts like steel columns and beams is possible, even without the full recycling process. It’s even more interesting to know that builders can use metal products that are not meant for building. For instance, shipping containers can also be reused in building new structures. 

Low-carbon bricks: 

Using 40% fly ash – fine glass powder made primarily of iron, silica, and alumina – helps cut embodied carbon in conventional bricks. It’s a byproduct of burning coal for electricity generation. The use of this low carbon building material has been since 2009.

Green tiles:

What makes tiles green is the use of ceramics from ~50% recycled glass and other minerals. The waste glass turned into tiles are then used in internal and external flooring and cladding. The sparkling glass components add more aesthetic quality to the tiles.  

Structural timber: 

Wood is made of ~50% carbon by dry weight. Considering the embodied carbon and the stored carbon in wood, many timber building materials are carbon negative. 

Thanks to its carbon negative properties, timber is making a great comeback as a popular construction material. Unlike concrete and metal made from carbon-intensive fossil fuels, timber is a renewable material that helps remove CO2 from the atmosphere.

Hempcrete:

Another carbon negative construction material is hempcrete, which is rather unpopular. It’s a composite of hemp fibers and is a glue-like binder. Hemp can suck up twice as much carbon as a typical forest. 

Green or carbon negative concrete: 

Byproducts of industrial processes and recycled materials used to replace raw materials to make traditional concrete. For example, fly ash and granulated blast-furnace slag are substituted for carbon intensive cement. 

Likewise, washed copper slag can be used in place of aggregate or sand. Using recycled granite from demolished debris also helps reduce emissions of concrete. 

How is carbon negative concrete made?

There are several ways to make low-carbon or even carbon negative concrete blocks. 

One way is by adding a biogenic limestone, a carbon neutral material, which can pull CO2 from the air, making it carbon negative. 

Another way is to replace traditional mix of cement with a magnesium-based cement using seawater. It can soak up carbon instead of emitting it like conventional cement do. 

The manufacture of cement, concrete’s key ingredient, accounts for a whopping 8% of the world’s total emissions. But it’s not possible to stop using concrete blocks to build structures. 

So, innovative ways emerge to make concrete not only a carbon neutral building material but is carbon negative, too. After all, we need stronger houses to withstand much stronger storms and hurricanes. 

With all those options, what would be the best carbon neutral building materials? To help you decide or just start your selection process, we’re giving you the top products in the sector. 

The Best Carbon Negative Building Materials 

While there are quite a few pioneering companies trying to make a name in the space, here are the best ones that stand out. 

Plantd Structural Panels

At the top of our list for the best carbon negative construction materials is the products by Plantd. Plantd is a revolutionary sustainable building materials company that transforms fast-growing perennial grass into durable, carbon negative building materials. 

Plantd’s patented low-carbon emissions production technology recently attracted $10 million in Series A funding round recently. The American Family Ventures led the round.

Both the firm’s co-founders and engineers – Huade Tan and Nathan Silvernail, worked together and honed their skills at SpaceX. While there, they’ve been designing and building key systems and components of the crew spacecraft for years. Completing their pioneering team is serial entrepreneur Josh Dorfman, co-founder and CEO. 

With its highly capable team, Plantd is redefining the value chain for sustainable, carbon negative building materials. 

Starting with structural panel products for walls and roofs like in the picture above, Plantd will make building materials that are a direct substitute for traditional home building products. They also don’t need any alternative installation techniques. 

The company grows fast-growing perennial grass instead of cutting down trees and pioneers novel production technology to reduce carbon emissions. The resulting product called Plantd Structural Panels is capable of retaining 80% of CO2 captured in the field.

That CO2 is then locked away inside the walls and roofs of new homes. 

CarbiCrete CMUs

Same with Plantd’s carbon negative building materials, CarbiCrete develops innovative, low-cost building products that help reduce emissions. Its patented technology enables the production of cement-free, carbon negative concrete using mineral waste and CO2 as raw materials.  

The company offers high-quality precast concrete at a lower-cost and in a way that reduces their carbon footprint. This attracts attention from investors, allowing the firm to raise a total of ~$28M to date. Led investors include NGen, Canada’s Advanced Manufacturing Supercluster. 

With cement-based concrete, the first step of the process involves mixing cement with aggregate and water. With CarbiCrete, cement is out of the equation. Steel slag is used instead and is mixed with the other building materials.

It’s also worth noting that creating CarbiCrete’s CMUs (concrete masonry units) involves a specialized absorption chamber into which CO2 is injected. Within 24 hours, the concrete will reach its full-strength.

In comparison with cement-based CMUs, CarbiCrete CMUs show equivalent or better mechanical and durability properties. They also have the same water absorption properties, but have higher compressive strength by up to 30% and display better freeze/thaw resistance.

CarbiCrete’s 3rd-party Lifecycle Analysis (LCA) shows a 100% reduction of the CO2 emissions from eliminating cement use. 

The result?

3kg of CO2 removed per CMU 2kg avoided by not using cement + 1kg captured during curing. In other words, net negative emissions with the permanent sequestration of carbon mineralized in the product curing.

GreenJams Agrocrete 

If cement were considered a country, it would be the world’s 3rd-largest carbon emitter. It even surpassed a big country like India.

But a social enterprise, GreenJams, based in Roorkee and Visakhapatnam offers a solution. The startup gets financial support through grants by various institutions, including universities. It has completed its angel round in an undisclosed amount.

GreenJams creates carbon negative building materials from agriculture biomass and hemp blocks. Their early prototype products look like below. 

Its product called Agrocrete is made from up-cycled material. Its founders said the product can:

cut construction costs by 50%,
increase thermal insulation by 50%, and 
reduce the time needed to construct buildings.

The agricultural residues such as paddy straw, cotton stalks, bagasse, etc. used to make Agrocrete gets mixed with the firm’s innovative product BINDR. It’s a 100% up-cycled low carbon alternative to Portland cement made from industrial by-products of steel, paper and power industries. Here’s how Agrocrete’s life goes about.

Agrocrete has the strength the same to that of a conventional red brick from the kiln. Yet, it offers less water absorption tendency, captures tonnes of CO2 emissions and can stay for at least 75 years. 

To top it all, Agrocrete blocks are 30% lighter so it also cuts labor cost and is more convenient for masons to work on. 

Carbon negative building materials like the top ones above actually reduce GHG emissions as they are used. Over the course of their entire life cycle, they will remove more carbon from the air than they will release. They can help offset the environmental impact of your construction project or help make your home more sustainable. 

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EU Unlocks $270B for Green Deal Industrial Plan to Boost Net Zero

The European Commission (EC) set out its $270 billion Green Deal Industrial Plan to support Europe’s race to green transition and boost its net zero industry. 

EC President Ursula Von der Leyen announced the plan at the World Economic Forum in Davos, saying it’s a response to the U.S. Inflation Reduction Act. IRA is the leading climate law revealed last year with $369 billion funds to decarbonize industry and transportation in the U.S.

Von der Leyen said in a news conference that:

“Major economies are rightly stepping up investment in net zero industries. What we are looking at is that we have a global playing field… We know that in the next years, the shape of the economy, the net-zero economy, and where it is located will be decided. And we want to be an important part of this net-zero industry that we need globally.

So to keep its competitive edge in the green tech space and net zero, the EU Green Deal is revitalized. The proposed plan will set aside €250 billion ($272 billion) from the existing EU funds aimed at decarbonizing the bloc’s economy. 

EU Green Deal Industrial Plan: What’s New? 

The original European Green Deal was presented in 2019. It’s a set of policy initiatives by the EC that are fit for cutting net GHG emissions of the union by at least 55% by 2030, compared to 1990 levels.

What’s new with the Green Deal Industrial Plan is that it will ramp up the net zero transformation of the EU industry. The Plan will also ensure that the bloc has access to various technologies and solutions that are key to its net zero transition while bringing more quality jobs.

Moreover, it will help fuel competitiveness, attract investments into net zero and in green industrial innovation. 

Overall, the new Green Deal Industrial Plan will create the right conditions for net zero industries to thrive in the EU. 

The Four Pillars of the Plan

The Green Deal Industrial Plan has the following key elements:

Fast-tracking permits for clean tech

The first pillar will make regulatory frameworks simpler and permitting faster for clean tech firms. 

A major part of that is the creation of a Net-Zero Industry Act that will provide faster permits to technology manufacturers. Examples of these technologies include renewables, carbon capture and storage (CCS), hydrogen production facilities, and batteries. 

The EU will also establish the Critical Raw Materials Act to ensure access to materials that are critical for making those green tech. The bloc plans to expand certain technologies by 2030 and specify criteria for strategic clean tech projects. 

Faster access to subsidies

Faster access to funding means loosening state aid rules until 2025. This is to enable the EU’s 27 Member States to help with investments in net zero. 

Also, the Green Deal Industrial Plan considers allowing countries to draw on existing EU funds so as not to disrupt the internal market’s level playing field. With this plan, a total of 245 billion euros worth of loans and grants will be made available for the green transition. 

In the long run, the EC intends to propose a “European Sovereignty Fund” to invest in emerging technologies.

Up-skilling and re-skilling workforce

Transitioning to net zero also requires enough skills in green industries. For example, the battery sector alone projects it needs 800,000 more workers by 2025.

Thus, the EU plans to establish Net-Zero Industry Academies or up-skilling and re-skilling programs in strategic industries. The bloc, in fact, has made several industry partnerships in the automotive, agri-food and other sectors to promote education and vocational training.  

The EC is also working to boost recognition of qualifications not just in the EU but also from third countries. The Commission will also support the alignment of public and private funding for skills development, and drive more investment in training.

Open and fair trade

The last pillar is on promoting global, open and fair trade – a vital part of keeping the region’s leadership in net zero technologies. This is important to improve access to raw materials and secure access to new export markets.

The EC, which is responsible for the EU’s trade policy, will continue the development of the bloc’s network of Free Trade Agreements. It also considers making alliances with like-minded partners on raw materials and clean tech. Take for instance its Trade and Technology Council with the U.S.

Part of this plan is dealing with what the Commissions says unfair trading practices common in non-market economies like China. 

Other EU Green Initiatives

The Green Deal Industrial Plan complements other green initiatives of the EU that help speed up the transition such as REPowerEU. 

REPowerEU is the bloc’s plan to rapidly reduce dependence on Russian fossil fuels and fast-track the green transition. This Plan contains measures that can make such a goal possible by rolling out renewables quickly. At its heart is the Recovery and Resilience Facility (RRF), which supports planning and financing of energy projects and reforms. 

Working alongside REPowerEU, the Green Deal Industrial Plan gives guidance on policies to simplify procedures. This is to help unlock more access to funding for clean tech, especially from the private sector.

That should help the industry build more confidence in the future of the EU’s net zero transition.

The EC hopes member states will back its plan at a Feb 9-10 summit. But it faces resistance from some EU members that oppose parts of the plan. They say the plan is “too late, too little”, while others think it “lacks focus” on certain technologies.

Other members, however, welcomed the proposals.

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Etihad And SATAVIA Optimize Vapor Trails

UAE’s Etihad Airways signed a multi-year deal with UK-based SATAVIA to use advanced data analytics for vapor trail prevention in its daily flight operations.

Etihad will use SATAVIA’s specialized software to optimize flight paths and minimize vapor trails. Etihad had previously run a pilot project to reduce vapor trails on transatlantic flights. The latest partnership with SATAVIA will expand this beyond the demonstration stage.

This could also lead to more partnerships around generating carbon credits from vapor trail management. The generation of the vapor trail avoidance credits will be based on SATAVIA’s climate impact analysis.

What are Vapor Trails?

When flying at high altitudes, aircrafts form white, cloud-like trails behind the body of the plane. 

These trails are actually made up of tiny ice crystals that occur due to condensation. These form under specific atmospheric conditions and like CO2, contribute to the earth’s greenhouse effect.

In addition to CO2 emissions, jet engines also emit water vapor from fuel combustion. At very high cruising altitudes (around 8000 m or 26,000 ft), the air outside is quite cold. 

This means that the water vapor will condense quickly when they encounter this cold external air. The water vapor could be from the engine’s exhaust gases or from the ambient air when the relative humidity is high.

This condensation occurs on dust or sulfur particles that are also emitted from the aircraft. The end result is tiny ice crystals that form cirrus clouds.

The duration of the vapor trail has a huge impact on its global warming effect. Some vapor trails disperse quickly and are not problematic for the climate. However, if the relative humidity is over 100%, the vapor trails are more persistent and last for hours. These will trap heat and contribute to the greenhouse effect.

Vapor Trail Management in Aviation

In recent years, vapor trails have become a huge issue for the aviation industry. Some research has shown that they can contribute even more towards global warming than CO2. 

One 2018 study looked at the contribution of the aviation sector towards climate change between 2000 and 2018. It found that vapor trails were responsible for almost 60% of aviation’s effect on climate change.

Vapor Trails management in aviation requires a multi-aspect approach. Firstly, engine efficiencies would need to be improved, so that they emit fewer sulfur or dust particles. This leaves less room for condensation.

The other strategy is to optimize flight paths so that the flights do not encounter the atmospheric conditions that form vapor trails. For example, minimizing flight paths encountering high relative humidity or avoiding areas that have lots of dust particles in the air.

SATAVIA’s Vapor Trail Management System

SATAVIA is a UK-based data analytics startup founded by volcanologist Adam Durant. Durant has extensive experience studying the links between atmospheric conditions and aircraft function. 

After seeing the aviation industry disrupted by a volcanic eruption in Iceland in 2010, it motivated Durant started his company in 2013. According to Durant, only 5-10% of flights are responsible for 80-90% of vapor trails. Hence, optimizing only a few flight paths could significantly reduce climate impact.

SATAVIA provides a specialized management program to predict vapor trail formation. It uses real-time satellite imagery and atmospheric conditions like temperature and humidity to make accurate predictions. The prediction model could be used up to 36 hours in advance. 

SATAVIA vapor trail prevention deal with Etihad will allow the latter to leverage those technologies.

Etihad’s Commitment to Greener Aviation

This is one of Etihad’s many projects to tackle climate change in the aviation industry. In 2022, the company marked Earth Day by carrying out 42 EcoFlights in five days. This included 22 vapor trail management flights.

Based on the results from the EcoFlights, the company said they saved 40 minutes of flight time and reduced six tonnes of carbon emissions. And for each ton of CO2 reduced, Etihad gets one carbon credit. The airline is trading its vapor trail avoidance credits on a carbon exchange platform.

The flights tested a number of optimization strategies. These included:

Optimized flight paths to reduce fuel consumption and carbon emissions
Vapor Trails prevention to reduce water vapor emissions
Variable cruising speed using specialized software. Etihad claims this translated to 15% fuel savings.
Reduced flaps for landing, which reduces drag and fuel consumption. Etihad claims this saves 30 kgs of fuel for every approach.
Using a single-engine to taxi. Shutting down one engine during taxiing resulted in a 20%-40% saving in carbon emissions, according to the company.

The data collected from these flights would be valuable to optimize future flight paths and other green aviation initiatives. Apart from its Satavia vapor trail deal, Etihad also has established the Greenliner and Sustainable50 programs to achieve its decarbonization goals. These programs were in collaboration with Boeing, GE and Rolls Royce.

The aviation industry has multiple programs in place to bring down emissions. Initiatives such as carbon-offsetting CORSIA, are a major step towards reaching net zero by 2050. However, some major airlines like EasyJet and JetBlue are moving away from carbon offsetting and towards using Sustainable Aviation Fuels (SAFs).

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