French carbon removal company NetZero has secured €18 million ($19.5 million) in new funding from government-backed impact investor STOA Infra & Energy. The capital infusion aims to support NetZero’s expansion by establishing new biochar plants in Brazil and other tropical regions. 

The announcement coincides with French President Emmanuel Macron’s state visit to Brazil and follows NetZero’s previous €11 million Series A funding round. The transaction marks the first investment of STOA’s carbon strategy and is significant as one of the largest deals in the biochar sector. It also represents the first major initiative aimed at scaling carbon removal efforts in emerging countries.

NetZero’s Vision for Climate, Agriculture, and Society

NetZero focuses on scaling up biochar in tropical regions, aiming to benefit both the climate and local communities.

Biochar, derived from plant residues and stored in soil, serves as an effective method for permanently removing carbon from the atmosphere while simultaneously enhancing soil quality. This results in increased agricultural productivity, reduced fertilizer usage, and higher crop yields.

NetZero’s innovative biochar technology addresses 3 significant challenges simultaneously:

Climate change: By producing biochar, NetZero removes atmospheric carbon for millennia, contributing to long-term carbon sequestration.
Sustainable agriculture: The use of biochar as a soil amendment improves soil quality and crop productivity, promoting sustainable farming practices.
Social impact: NetZero’s initiatives enhance farmers’ livelihoods and create well-paid industrial jobs in rural areas of developing countries, thereby fostering economic development and social equity.

 

NetZero’s unique approach to leveraging biochar allows for high-permanence carbon removal from the atmosphere. The company’s model aligns with the Intergovernmental Panel on Climate Change (IPCC) and the European Union’s recognition of atmospheric carbon removal as crucial for achieving net zero emissions globally. 

Among the IPCC’s validated technical solutions, biochar stands out for its proven ability to remove carbon from the atmosphere and store it in soils for extended periods.

What is Biochar? Harnessing Nature’s Power

The carbon removal company uses agricultural residues exclusively as feedstock for producing biochar. These residues include coffee or cocoa husks and shells, sugarcane bagasse, coconut shells and fibers, peanut/cashew shells, and more.

Through a process called pyrolysis, these organic materials undergo intense heating in the absence of oxygen. This results in the breakdown of complex molecular chains and the formation of a solid, stable product known as biochar.

While biochar can serve various purposes, NetZero’s primary focus lies in its agricultural application, where it is mixed with topsoil to enhance soil quality and fertility.

During the production process, substantial amounts of renewable energy in the form of gases and heat are generated. The startup then harnesses this energy, using a portion for its own operations while supplying the rest to local partners as electricity or heat. 

Biochar has gained attention for its ability to sequester carbon dioxide when introduced into the soil. 

The biochar carbon credit market, although still in its early stages, is rapidly expanding, with prices showing a bullish trend. Over the past year, deals for smaller volumes of credits have closed above $500/mt, per DGB Group report. Other deals have begun to clear below $100/mt. 

Recent bids for biochar credits ranged from $134/mt to $145/mt, indicating growing interest and potential in this sector, with matching offers between $152/mt to $167/mt.

RELEVANT: Shell to Buy 22,500 Biochar Removal Credits from The Next 150

Scaling Up for Impact

The $19.5 million capital raise will enable NetZero to scale up its technology and deploy production sites at a larger scale in tropical regions. The company aims to remove over 5 million tonnes of CO2 from the atmosphere by 2030.

STOA’s investment in NetZero represents a significant milestone in the biochar space. STOA, established in 2017, focuses on infrastructure and energy investments in developing countries. 

Currently, NetZero operates two commercial-scale biochar plants in Cameroon and Brazil. Last month, it partnered with Swiss commodities trader Ecom Agroindustrial Corp. to produce biochar from coffee husks in Brazil, with an expected annual production of over 4,000 metric tons.

In Mexico, another biochar startup, The Next 150, is ramping up its production, aiming to capture 150,000 tons of CO2 equivalent. If that happens, it would be the largest biochar initiative in Mexico.

Global biochar production reaches at least 350,000 metric tonnes annually, representing a remarkable 91% growth rate over 2021 production levels. 

From an economic standpoint, revenues generated by biochar and equipment manufacturers surpassed $600 million in 2023. This shows a substantial growth rate of 97% between 2021 and 2023. More notably, projections indicate further revenue growth, expected to reach over $3 billion by 2025.

In terms of market size, a research shows that biochar could reach over $1,540 million in 2031 as seen below.

NetZero has been recognized for its achievements. For instance, it won the Milestone Award in the XPRIZE Carbon Removal competition sponsored by the Musk Foundation. The startup was also certified as a carbon-removal project under the Puro Standard. 

The company’s biochar plants contribute to carbon removal efforts and have already supplied carbon removal credits to companies like Boston Consulting Group, though specific volumes and prices were not disclosed.

RELATED: North America’s Largest Biochar Plant Announced In Canada

With Brazil being one of the world’s largest agricultural countries and committed to decarbonization, it represents a strategic market for NetZero and the company’s goal of leading the biochar carbon removal revolution. 

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In a move with significant developments, Illinois’ governing board overseeing building standards has declined to adopt the all-electric code. The “all-voluntary electrical code” in Illinois refers to a code or set of regulations governing electrical systems and installations in buildings that is optional or voluntary for compliance.

This decision comes amidst a growing trend in northern Illinois, mainly the Chicago communities to curb natural gas use in new construction projects.

The Legal Tussle Between Illinois International Code Council (ICC) and Federal Court

Illinois International Code Council (ICC) discarded an optional all-electric construction code in its 2024 International Energy Conservation Code. It is the standard model for building codes nationwide. The decision to reverse the code echoed a landmark ruling by the US Court.

However, it has received significant repercussions from the ICC board of directors.

Painting a clearer picture, the advisory council of experts, tasked with updating the state’s building codes over time, initially incorporated the all-electric option into the Illinois stretch energy code.

However, on March 20, the Illinois Capital Development Board (CDB), appointed by the governor, countered this decision by removing the all-electric appendix from the stretch code. This action stemmed from apprehensions regarding potential legal liabilities for communities.

Consequently, Illinois communities will find themselves without a standardized, readily available method for enforcing all-electric new construction.

The insights of this ruling, fetched from S&P Global Market Intelligence are noted below:

The ICC cautioned cities and states that embracing the 2024 international code’s draft all-electric provision could lead to a “significant risk” of federal law conflicts.
This decision was influenced by the US Court of Appeals for the 9th Circuit, which held that the federal Energy Policy and Conservation Act (EPCA) preempted Berkeley, Calif.’s pioneering building gas ban.
The conflict between ICC and CDB highlights the larger impact of obstructing building decarbonization efforts.
This ruling can affect Western US states and territories. It can also go beyond the regions of the 9th Circuit’s jurisdiction, where courts have not yet addressed EPCA’s compatibility with local electrification codes.

Although the new rule marks a fallout from a nationwide decision, it has established a precedent that challenges local electrification mandates across the country.

Illinois Seeking Sustainable Solutions through CEJA 

Illinois located in the heart of the United States, is the nation’s third-largest consumer of gas in both residential and commercial sectors.

While Illinois aims for emission reductions through its Climate and Equitable Jobs Act (CEJA), the clash between state aspirations and federal preemption poses a formidable challenge. The recent decisions highlight the complexity of balancing environmental objectives with legal compliance.

Amidst all the conundrum, Illinois seeks to navigate through the legal and environmental challenges with some sustainable solutions.

Stretch Code Development by CDB

CDB’s Energy Conservation Advisory Council has developed a stretch code in Illinois aimed to align with CEJA’s goals. The climate bill required the CDB to create an optional code exceeding Illinois Energy Conservation Code standards. It would also adhere to international code standards.

It is expected to offer additional measures to enhance building efficiency and reduce emissions. The removal of the all-electric appendix raises doubts about the state’s ability to offer a unified sustainable construction approach.

The stretch code further gives a boost to the rising movement in Chicago and neighboring regions to curb gas and fossil fuel usage in new construction projects.

READ MORE: Billionaire Tom Steyer to Invest in Net Zero Buildings (carboncredits.com)

During the March 20 meeting, numerous local government representatives emphasized to the CDB the importance of efficiency and decarbonization measures in the stretch code. They highlighted that local governments frequently lack the resources to independently develop such policies.

Evanston Mayor Daniel Biss said,

“We rely on the expertise of the state to give us these model ordinances that will be feasible to allow us to achieve our objectives. We are willing to take that risk and prove out the concepts so that other communities can follow.”

Striking a Balance on the Electrification Debate

Differences in opinion and demand among individuals and groups have given rise to the need to balance out the situation. While some from the industry group support 100% electrification others argue for flexibility and affordability. They argue against provisions like the electric-ready requirement, citing potential high costs for homes and threats to energy affordability.

On the contrary, proponents of electrification, like RMI’s Chiu, dispute these claims. He stresses the importance of efficiency measures, such as incentivizing the installation of heat pumps.

However, whatever the outcome is, it must be economically and environmentally viable.

Climate experts emphasize the importance of prioritizing energy efficiency and sustainability. They favor promoting heat pumps and other innovative approaches to achieve climate objectives.

Noteworthy, this strategy aims to mitigate GHG emissions within the community by 60% before 2030. And finally, become net zero by 2050. This aligns closely with recommendations from leading climate scientists worldwide, intending to combat climate change.

The graph shows the total natural gas consumed in Illinois through 2022.

source: US Energy Information Administration

Despite these debates, the Illinois stretch code maintains the all-electric provision, pointing to a continued focus on promoting energy-efficient solutions. Stakeholders will be responsible for reconciling divergent interests while advancing towards a common goal of sustainable development.

Robert Coslow, administrator of professional services at the CDB and chair of the Illinois Energy Conservation Advisory Council has noted,

“The Illinois stretch code pushes builders to install heat pumps through incentives because they are proven to be the most efficient heating source on the market.”

Illinois has set an ambitious goal of achieving 100% clean energy by 2050. To address this, the state utility regulator is examining the future of the gas industry in light of CEJA. However, amidst this transition, there are divergent views on the best path forward.

The next update in 2025 mandated by CEJA will offer an opportunity to reassess contentious issues regarding the all-electric move. Let’s hope the decision paves the way toward a greener future for Illinois and the entire nation.

Disclaimer: The data is fetched from primary source S&P Global Market Intelligence.

FURTHER READING: Harnessing the Sun: America’s Solar Snapshot in April 2024 • Carbon Credits

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By 2050, Japan intends to develop innovative strategies poised to reduce atmospheric CO2 globally to “Beyond Zero”. The country’s sustainable growth roadmap contains an effective nature-positive strategy aimed at achieving economic growth and environmental protection. 

In December 2022, at the 15th Conference of Parties to the Convention on Biological Diversity (COP15), delegates adopted the Kunming-Montreal Global Biodiversity Framework, outlining global targets for 2030. 

The Cabinet under the government of Japan approved the National Biodiversity Strategy 2023-2030 in March 2023 to fulfill its new international commitment. The Transition Strategies toward Nature-Positive Economy were subsequently outlined with the collective decision of the following ministries:

Ministry of the Environment
Ministry of Agriculture, Forestry and Fisheries
Ministry of Economy, Trade, and Industry
Ministry of Land, Infrastructure, Transport and Tourism

Unleashing Japan’s Nature-Positive Strategy

Japan aims to prioritize nature conservation and uplift its economic policies to transition to a decarbonized future smoothly. Here, we have summarized and explained the significant points from the strategy plan proposed by the Ministry of Environment, Japan. 

1. Nature Positive Management

The strategy emphasizes the need for companies to shift towards nature-positive management. The plan focuses on integrating nature preservation methods into their value creation processes. This in turn is expected to open avenues for fostering new economic growth from natural capital. 

Conservation and Restoration Efforts: Implementing measures to conserve and restore ecosystems, such as forests, wetlands, and marine environments, to enhance biodiversity and ecosystem services.

Sustainable Resource Management: Promoting sustainable practices in resource extraction, agriculture, fisheries, and other sectors to minimize negative impacts on nature.

The press release from the Ministry of the Environment, under the Government of Japan has elucidated the significance of nature capital to achieve the desired results. 

The image shows forest restoration work in Japan.

The report explains that individual companies must consider natural capital as materiality in terms of both risks and opportunities for business activities to shift to nature-positive management. Subsequently, investors will analyze the market to evaluate the performance of the companies handling the natural capital. Based on this performance, further value creation process will be determined. 

Simply put, the transition extends to a society where consumers and markets assess companies’ efforts. In NP management, cash flow reform involves collaborative efforts among government, citizens, and integrated nature valuations.

2. Maximizing Business Opportunities

The plan seeks to boost corporate value by disclosing TNFD (The Taskforce on Nature-related Financial Disclosures) and other information, responding to risks with the intent of disclosure. This approach aims to enhance the firm’s resilience and sustainability, which the market and society will evaluate. Consequently, this will attract private capital and elevate corporate value. 

The Ministry of the Environment (MoE) has weighed various business opportunities and their market sizes. They plan to create opportunities through sustainable approaches, such as decarbonization, resource recycling, and leveraging natural capital.

One example is adopting environment-friendly aquaculture technology. It would help implement compound and efficient feeding techniques. The market size for this business is estimated to be around 86.4 billion yen annually. 

3. Support from the Government 

The ministries emphasized the significance of businesses integrating natural capital conservation into their operations. The Japanese government has outlined the following initiatives: 

Going beyond corporate social responsibility (CSR) initiatives. It involves preserving natural capital for both societal and economic sustainability.
Promote assessing the value of initiatives through the Biodiversity Promotion Activities Promotion Act. Upgrading technologies related to alternative materials, biomimicry, etc.
Implementing governmental initiatives to facilitate the shift towards a nature-positive economy. Focusing on biodiversity conservation and carbon credit initiatives
Motivate companies to minimize their carbon footprint and maximize their efforts on nature.

4. Green Infrastructure Development 

Japan’s nature-positive strategy also focuses on investing in green infrastructure projects that enhance natural habitats, such as urban parks, green roofs, and permeable pavements.  

Identifying and developing OCEMs- Under the green infrastructure development strategy, some specific private lands undergo certification as Other Effective area-based Conservation Measures (OECM) sites. In Japan, diverse locations include the satochi-satoyama, biotopes, conserved forests, and green spaces in cities and factories. OCEMs incentivize efforts by companies and others, extending beyond protected areas.

Developing green infrastructure assures resilience to climate change and numerous benefits to society. Most importantly, it would help generate robust carbon credit. 

Japan’s Green Finance Drive: Strengthening Sustainability Investment

The MoE has outlined guidelines for green finance to promote disclosure based on international standards such as TCFD (Task Force on Climate-Related Financial Disclosures) and ISSB (International Sustainability Standards Board), and has promoted regional financial investments for local decarbonization.

Graph: Data released by the Ministry of Environment reveals domestic funds for sustainable growth in Japan.

Japan has estimated 150 trillion yen decarbonization investment over the next 10 years to fortify its domestic green finance. This decision would further abridge domestic and foreign funds directed to Japan’s decarbonization goals. 

The dramatic increase in green bond issuance strengthens the financing of a sustainable society. Although the use of funds has been diversifying over the years, renewable energy and energy conservation still dominate most allocations.

However, recently, financing for sectors beyond climate change mitigation, such as biodiversity conservation and resource recycling has just begun.

RELATED: Over $420M North American Forest Fund from Japanese Investors Kicks Off (carboncredits.com)

Boosting J-Credits through the nature-positive economy 

According to media reports, Japan envisions, 

“A transition to a “nature-positive” economy which covers areas such as carbon and biodiversity credits could create for Japan 47 trillion yen ($309.7 billion) in new business opportunities annually by 2030.”

Like other countries committed to net zero and engaging in carbon credit trading, Japan also participates actively. The government issues carbon credit certificates, known as J-credits. They can be purchased in Japan for carbon offsetting. Boosting J-credits is one way to foster a nature-positive economy. 

The strategy aims to promote the use and creation of forestry J-Credits. It primarily involves the agricultural sector and its role in preserving the biodiversity of Japan. 
J-Credits offer domestic GHG reduction or removals, usable for various purposes including the voluntary emissions trading scheme GX-League
They promote the J-Blue Credit system about blue carbon projects that sequester carbon within oceanic ecosystems.

J-Credits demand rises in 2024

Reported from offsel.net:

According to the J-Credit System data for 2024, the number of registered J-Credit projects hit a record high of 1,081. Additionally, the certified amount of CO2 emission reductions was 9.36 million t-CO2.

Source: OFFSEL.net

Japan also intends to engage in international biodiversity credit systems to meet the demand from global industries handling resources outside its national domain. 

Furthermore, it has actively engaged with the UK and France in the International Advisory Panel on Biodiversity Credits to discuss future goals for biodiversity credit and offset policies for the country. 

From the elaborate information and reports, it seems that Japan has a bright future toward creating a nature-positive economy.

The post Japan’s Nature-Positive Economic Strategy: A Sustainable Growth Roadmap appeared first on Carbon Credits.

The Environmental Protection Agency (EPA) recently finalized stringent greenhouse gas (GHG) standards for medium and heavy-duty trucks from model years 2027 to 2032. Despite constituting less than 6% of vehicles on the road, these trucks emit 25% of the transportation sector’s greenhouse gases. They release significant levels of air pollutants linked to various health issues. 

The finalized standards, “Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles – Phase 3”, aim to reduce GHG emissions by up to 60% by 2032. This target would prevent 1 billion metric tons of carbon pollution and 55,000 tons of smog pollution. 

The standards are technology-neutral, allowing manufacturers to meet targets through various means such as electric powertrains, and hydrogen fuel cells. 

The finalization of the truck rule follows closely on the heels of the EPA’s recent completion of tailpipe emission standards for light- and medium-duty vehicles covering the same model years. Additionally, the agency had previously strengthened emission limits for nitrogen and particulate matter from trucks in 2023.

EPA’s Push for Cleaner Transportation

Trucks and other heavy-duty vehicles play a crucial role in the United States economy, facilitating the transportation of goods, freight, and providing essential services across various sectors such as industry and transit. However, they also contribute substantially to the nation’s GHG emissions. 

According to the EPA, the transportation sector is the largest contributor to climate-warming pollution in the United States. In 2021, it accounted for 28% of the nation’s carbon footprint. Addressing emissions from this sector is pivotal for the country to fulfill its Paris Agreement commitments. 

These commitments include halving GHG emissions from 2005 levels by 2030 and achieving net zero emissions by 2050. Therefore, efforts to curb transportation emissions play a crucial role in advancing national and global climate goals.

Moreover, the finalized standards will also bring significant societal benefits, including health improvements and fuel cost savings. These savings are estimated to amount to $300 billion by 2055. 

Moreover, the regulations will notably benefit poorer urban communities, which often bear the brunt of pollution from older diesel trucks concentrated around ports and industrial areas.

Industry support for cleaner standards is strong, with major players like Ford, Cummins, BorgWarner, and Eaton endorsing them. Leading manufacturers such as Daimler have ambitious goals for carbon-neutral vehicles, with projections of a significant market share for zero-emission trucks by 2030.

The federal agency said that the implementation of the new standards can significantly increase the adoption of zero-emissions trucks. Thus, there would be a substantial reduction in the industry’s reliance on fossil fuels. 

Electric Revolution: Market Growth and Industry Shifts

Market demand for electric heavy-duty vehicles is growing rapidly, driven by investments from major fleet operators like PepsiCo and Walmart. Currently, there are nearly 13,000 electric medium and heavy-duty trucks on the road, which could increase substantially in the coming years.

The declining costs of electric trucks, coupled with fuel and maintenance savings, make them increasingly attractive economically. By 2030, electric heavy-duty trucks are projected to be cheaper than their diesel counterparts, even without incentives. Additionally, drivers appreciate their quieter and cleaner operation compared to diesel trucks.

According to the EPA, diesel demand within the industry will decrease by 120 billion gallons by 2055. It will also be accompanied by a corresponding decline of 15 billion gallons in gasoline demand. This shift underscores the standards’ pivotal role in driving the transition towards cleaner transportation technologies and reducing GHG emissions.

Truck manufacturers are making significant investments in transitioning to zero-emission vehicles, signaling a shift away from diesel. 

RELATED: The Death of Diesel Gives Birth to ZEVs

Daimler, the largest heavy-duty vehicle manufacturer in the U.S., aims to sell entirely carbon-neutral vehicles by 2039. In July, Daimler projected that zero-emission vehicle sales would make up 40% of their North American market share by 2030. 

Similarly, Navistar and Volvo Trucks have set ambitious goals to sell 50% zero-emission trucks by 2030.

These investments align with the increasing demand for electric heavy-duty vehicles. The four largest private tractor fleets in the nation—PepsiCo, Walmart, Sysco, and US Foods—are heavily investing in electric trucks. Republic Services, a large waste disposal fleet, anticipates that EVs will make up half of its new truck purchases by 2028.

Road Ahead: Impact, Challenges, and Outlook

While electric passenger cars and light trucks initially led the growth in electric vehicles, commercial trucks are rapidly catching up. 

Research from BloombergNEF forecasts another record year for commercial electric truck sales in 2024, and the global electric truck market is expected to nearly quadruple from $17.8 billion in 2022 to $65 billion in 2032.

Overall, The EPA’s final rule provides market certainty, enabling companies to set long-term goals and investment strategies. These regulations align with the Biden administration’s broader climate goals, complementing initiatives like the Clean Car program. By reducing transportation emissions, they contribute to cleaner air, protect public health, and advance sustainability for future generations.

However, the projected additional costs for the heavy-duty industry weren’t welcomed by some US oil majors. Trade groups like The American Petroleum Institute and the American Fuel and Petrochemical Manufacturers hailed the new rule “unlawful EV mandate for heavy trucks”. 

But for President Biden’s National Climate Advisor Ali Zaidi, the finalized GHG standards are a great policy initiative, noting that:

“By tackling pollution from heavy-duty vehicles, we can unlock extraordinary public health, climate, and economic gains.”

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