The Biochar Gold Rush: Why Companies Are Scrambling to Lock in Carbon Credits

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The Biochar Gold Rush: Why Companies Are Scrambling to Lock in Carbon Credits

Companies worldwide are under pressure to meet their 2030 net-zero targets, and high-quality carbon removal solutions are becoming scarce. Biochar offers a promising solution. It’s a carbon-rich material made by heating organic waste in low oxygen. This process is called pyrolysis.

Biochar lasts long and captures carbon. It also boosts soil health and helps crops grow better. However, new research from Supercritical shows that access to high-quality biochar carbon credits is getting tighter. Early adopters are securing their supply with long-term agreements.

Supercritical CEO, Michelle You, remarked: 

“This isn’t just about buying carbon removal—it’s about securing future access in an increasingly competitive market. Companies signing offtakes today are gaining supply security and cost stability, while those waiting on the sidelines or relying on spot purchases will face shrinking availability and escalating prices.”

The Biochar Land Grab: Why Supply is Disappearing

Biochar turns agricultural waste into stable carbon. When buried in soil, it can stay there for centuries. This makes biochar one of the most effective carbon dioxide removal (CDR) methods available today. 

Biochar is popular with 80% of CDR buyers as it is affordable and scalable. This makes it a smart choice for cutting emissions and boosting environmental health.

Despite these benefits, biochar production faces significant supply constraints. The latest Supercritical report, Locked in or Left Behind? Biochar Offtakes in 2025, highlights that 62% of the 2025 high-quality biochar supply is already locked into offtake agreements, with nearly 30% secured through 2026. 

biochar carbon credits in offtakes
Source: Supercritical Report

Companies must act now in this tight market. If they don’t, they risk missing out on affordable carbon removal credits.

Offtake Agreements: The Smartest Play in Carbon Removal

An offtake agreement is a long-term purchase contract that allows companies to secure future carbon removal credits before they are issued. These agreements help biochar suppliers feel secure financially. They can scale up production. Buyers benefit, too, as they get stable prices and a guaranteed supply.

Companies with multi-year offtake agreements save up to 31% compared to those buying credits on the spot market. People who depend on one-time purchases are seeing costs go up. They also face a shrinking supply of good-quality credits.

With biochar prices increasing 18% in 2024, securing long-term agreements has become the most strategic way to manage carbon removal costs.

Biochar Market Trends and Future Outlook

The demand for high-quality CDR solutions is expected to skyrocket in the coming years. According to Supercritical’s research:

  • Global demand for durable carbon removal is expected to hit 40–200 MtCO₂ each year by 2030. However, the current supply falls far short of this need.
  • Biochar accounted for 86% of all CDR deliveries in 2024, proving its reliability in the market.
  • If just 10% of companies with Science Based Targets initiative (SBTi) commitments began buying carbon removal credits today, the market would need to grow 25 times its current size.
biochar purchased and delivered 2024
Source: Supercritical Report

The biochar carbon credits market has experienced notable growth in recent years. This reflects an increasing corporate focus on sustainable practices and carbon removal strategies.

Pricing Trends

Biochar carbon credits command significantly higher prices compared to the broader voluntary carbon market. 

In 2023, transaction prices ranged between $100 and $200 per metric ton of CO₂ equivalent, with an average price of around $150. This contrasts with the overall voluntary carbon market average of $5.80 per metric ton in the same year.

Future Outlook

Forecasts by MSCI Carbon Markets suggest that demand for biochar carbon credits could increase 20-fold over the next decade. However, this anticipated growth may lead to short-term price compression due to rising supply and competition, with prices potentially softening before strengthening again up to 2035.

As net-zero deadlines near, organizations that wait to get carbon credits will face tougher competition. Prices may rise, and they might not get any supply at all. This is very important. Updated SBTi guidelines will likely add interim carbon removal targets. This will increase demand even more.

Who is Leading the Biochar Offtake Movement?

Large corporations are already securing multi-year offtakes to future-proof their carbon removal strategies. Microsoft, Google, and Stripe have bought a lot of biochar credits. This ensures they get high-quality supplies at steady prices.

biochar offtake agreements 2024-2025
Source: Supercritical Report

Other companies have followed suit, recognizing that offtakes are the key to maintaining cost-effective and reliable carbon removal solutions.

A few notable biochar offtake deals include:

  • Google & Varaha (India): The largest biochar offtake agreement to date.
  • Charm Industrial (USA): A 100,000-tonne multi-year biochar removal contract.
  • Exomad Green (Bolivia): 70,000 tonnes secured over a seven-year contract.

These deals show that big buyers are eager to secure supply. They want to act before the market tightens further.

Waiting Could Cost Big: Spot Market vs. Offtakes

While some companies may prefer to buy carbon credits on the spot market, this approach comes with significant risks. The biochar market is splitting. Early movers are getting the best supply, but latecomers must fight for what’s left.

Key risks of relying on spot purchases include:

  • Higher Prices: Biochar prices have increased at a 29.2% compound annual growth rate (CAGR) over the past four years, and price volatility is expected to continue.
  • Limited Supply: As of 2025, more than 60% of available high-quality biochar is already locked into offtakes, leaving little room for new buyers.
  • Lower-Quality Projects: Companies waiting to purchase on the spot market may be forced to accept lower-quality credits, which may not meet the highest standards for durability and effectiveness.

In contrast, companies with offtake agreements today are protecting their net-zero goals. They ensure a steady supply of high-quality biochar credits at clear prices.

biochar pricing spot vs offtake
Source: Supercritical Report

The Urgency to Act Now

Biochar is becoming a top choice for large-scale carbon removal. However, its supply is quickly vanishing due to long-term contracts.

As prices rise and demand exceeds supply, companies must act now. If they don’t, they might be priced out or miss out on quality removals.

For organizations serious about meeting their net-zero commitments, securing biochar carbon credits via offtake agreements now is not just a smart move—it’s essential. As the market continues to evolve, those who take action today will shape the future of carbon removal, while those who hesitate risk being left behind.

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SolarBank Moves Forward with 7.2 MW North Main Community Solar Project in New York

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SolarBank Moves Forward with 7.2 MW North Main Community Solar Project in New York

Disseminated on behalf of SolarBank Corporation.

SolarBank Corporation (NASDAQ: SUUN; Cboe CA: SUNN, FSE: GY2) has announced a major step forward in the development of its 7.2 MW DC ground-mount solar power project, known as the North Main Project, in Wyoming County, New York. The project has finished the Coordinated Electric System Interconnection Review (CESIR). This important step allows the company to move forward with the permitting process.

SolarBank Corporation is an independent renewable and clean energy project developer and owner. It specializes in distributed and community solar projects across Canada and the United States. 

The company develops solar, Battery Energy Storage System (BESS), and EV Charging projects. These facilities supply electricity to utilities, commercial, industrial, municipal, and residential off-takers. 

SolarBank has a development pipeline exceeding one gigawatt. It has successfully developed renewable energy projects with a combined capacity of over 100 megawatts. 

After securing the needed permits and funding for North Main, SolarBank plans to start building the community solar project. This project will provide clean energy to around 850 homes. The project should also qualify for incentives from the NYSERDA NY-Sun Program. This will help its financial and operational success.

Bringing Affordable Clean Energy to Communities

Community solar projects like North Main play a crucial role in the transition to renewable energy. Community solar is different from traditional rooftop solar. It lets both renters and homeowners enjoy solar power benefits. They don’t need to install panels on their properties. 

Moreover, participants can subscribe to the project. They will receive credits on their electricity bills. This lowers their energy costs and supports renewable energy growth.

Current Market Landscape and Growth Projections

As of June 2024, the United States has about 7.87 gigawatts (GW) of community solar capacity. This capacity is spread across 44 states and the District of Columbia.

In the third quarter of 2024, the community solar segment installed 291 megawatts direct current (MWdc). This is a 12% increase compared to the same period in the previous year. This growth underscores the sector’s resilience and expanding appeal.

community solar installations and forecast

Looking ahead, the U.S. Department of Energy has set an ambitious target to achieve 25 GW of community solar capacity by 2025. This was a target of the prior Federal administration but most community solar projects are developed with the support of state and local governments. The Coalition for Community Solar Access expects the U.S. to exceed 30 GW of community solar by 2030. This shows strong growth potential for the sector.

Wood Mackenzie forecasts that the national community solar market will grow at an average rate of 5% annually through 2026. However, a subsequent average annual contraction of 11% is anticipated through 2029. This shows that near-term growth is strong. Yet, long-term sustainability may need strategic actions and policy support. 

SolarBank is focusing on community solar, aiming to provide clean, affordable energy to thousands of homes. This initiative supports the company’s mission to speed up renewable energy use in North America.

A Strong Partnership with Solar Simplified

SolarBank has teamed up with Solar Simplified. They are a leading provider of services for community solar programs. They focus on customer acquisition, enrollment, and management.

Solar Simplified works with SolarBank to make sure community solar projects are fully signed up. This way, they can boost revenue right from the start.

Solar Simplified takes care of all customer operations. This lets SolarBank focus on growing its renewable energy portfolio and launching more projects each year. 

Overcoming Challenges in Solar Development

The North Main Project is a big step forward, but challenges still exist for large-scale solar projects. The project depends on three key steps:

  • getting a community solar contract,
  • obtaining permits, and
  • securing third-party financing.

Also, changing government incentives and policies about solar power can affect how financially sound future projects will be.

Navigating the US-China Solar Trade Landscape

The solar industry has been heavily affected by U.S.-China trade tensions, with President Donald Trump issuing an executive order on February 1, 2025 imposing a 10% tariff on imports from China, which has since doubled to 20%. This move builds on former President Joe Biden’s tariff hikes from 25% to 50%, effective January 1, 2025, bringing total duties on Chinese solar polysilicon, wafers, and cells to 70%.

China dominates the global solar panel supply chain, producing over 80% of the world’s photovoltaic (PV) modules. Dependence on Chinese imports has led to increased costs and supply chain challenges for many U.S. solar developers.

Source: IEA

However, SolarBank has positioned itself to mitigate the effects of these trade disputes. By prioritizing domestic manufacturing, SolarBank not only avoids tariff-related cost fluctuations but also contributes to strengthening the U.S. solar supply chain.

In an exclusive interview, SolarBank’s CEO Dr. Richard Lu emphasized the company’s edge on this matter, stating: 

“We want to do our part to “Make America Great Again”. Solar energy is the power that we can deliver at a low cost in a timely manner, and we want to use “Made in the USA” solar panels to achieve our strategic goal. The Made in the USA panels demonstrate our commitment to supporting domestic production for the clean and renewable energy industry. For the sector, it will enable the industry to meet its demand with domestic supplies.”

SolarBank is dedicated to growing renewable energy in North America with the following project pipeline. It uses its skills in solar, battery storage, and EV charging projects to meet this goal.

SolarBank projects
Source: SolarBank

Innovative Projects and Market Expansion

SolarBank is committed to innovation. It has teamed up with Viridi to turn a landfill in Buffalo, New York, into a solar farm. This project will have a capacity of 3.06 MW and include a 1.2 MWh battery energy storage system.

This project shows the company’s commitment to turning unused sites into renewable energy sources. It provides clean energy to the community and helps tackle environmental issues. 

SolarBank is also planning a move into the growing data center market. This market is expected to hit $395 billion by 2030. Using its renewable energy expertise, the company plans to create and partner on data centers. This will help meet the industry’s huge energy needs with scalable and eco-friendly solutions.

SolarBank’s commitment to renewable energy continues to drive meaningful progress in the community solar sector. The North Main Project and other new developments are helping the company expand clean energy access and support sustainable infrastructure across North America. SolarBank leads the way to a cleaner energy future through partnerships, expanding markets, and tackling industry challenges.

This report contains forward-looking information. Please refer to the SolarBank press releases entitled “SolarBank Provides Update on 7.2 MW North Main Project in Wyoming County, New York.”; “SolarBank Partners with Viridi on Combined 3.06 MW Solar and 1.2 MWH Battery Energy Storage Project Located in Buffalo, New York.”; and “SolarBank Announces 2024 Highlights”.

Disclosure: Owners, members, directors, and employees of carboncredits.com have/may have stock or option positions in any of the companies mentioned: None.

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

Please read our Full RISKS and DISCLOSURE here.

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Trump’s Tariffs on Canada, China, and Mexico: A Risky Bet for U.S. Critical Minerals and Aluminum?

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trump tariff

Tariffs can encourage companies to invest in domestic production and create jobs. At the same time, they can also spark trade wars, leading to job losses in affected industries. Their economic impact is certainly complicated. At present, the U.S. is in a major tariff conflict with Canada, Mexico, and China after President Trump raised tariffs significantly.

He imposed a 25% duty on imports from Mexico and Canada and doubled tariffs on Chinese goods to 20%. This led to new trade disputes with important partners. Industry experts say these tariffs could affect $2.2 trillion in annual trade, impacting many industries.

But Trump firmly believes these tariffs aim to reduce the trade deficit. By making imported goods costlier, they are pushing Americans to buy local products.

  • As per nbcnews, in 2024, Mexico, China, and Canada account for 42% of U.S. imports, making them key players in any trade conflict.

US. trade China Cananda Mexico

How Canada, China, and Mexico Fired Back

Canada reacted quickly. Prime Minister Justin Trudeau announced 25% tariffs on $20.7 billion worth of U.S. goods. He plans to expand these tariffs if the current ones remain. This mainly affects energy and minerals.

Similarly, China responded with 15% tariffs on some U.S. farm products like cotton, wheat, corn, and chicken. They added a 10% tariff on other goods, including dairy, fruits, vegetables, pork, beef, and soybeans. These tariffs will start on March 10. As per credible news sources, China’s commerce ministry also limited exports to 15 U.S. companies and added 10 U.S. firms to its “unreliable entity list.”

These trade barriers follow a pattern from earlier administrations. Last year, the White House decided to raise tariffs on Chinese semiconductors to 50%, while duties on Chinese electric vehicles quadrupled to over 100%. A new set of 25% tariffs on aluminum and steel will take effect soon, escalating tensions further.

Mexico’s President Claudia Sheinbaum stated the country has backup plans to handle U.S. tariffs.

u.s imports

U.S. Dependence on Imported Critical Minerals

A  report from the Center for Strategic and International Studies highlights the U.S.’s reliance on imports for critical minerals. The U.S. relies entirely on imports for 12 of the 50 identified critical minerals and for over 50% of another 29.

Consequently, tariffs on Canada, Mexico, and China could raise costs for the U.S. These nations supplied 41% of U.S. metal and mineral imports in 2023. China leads the global production of 29 critical minerals and controls processing for rare earths, graphite, lithium, cobalt, and copper and is a major supplier for the U.S.

U.S. CHINA critical minerals

Doug Ford Warns of Nickel Cutoff Over U.S. Tariffs

Ontario Premier Doug Ford ripped off Trump’s exorbitant tariff rates on Canada. He threatened to halt nickel and electricity exports to the U.S. in response to the 25% tariffs on Canadian goods set to take effect tomorrow.

In an interview with NBC News NOW on Monday, Ford called the tariffs an “absolute disaster” for both nations, warning they would create “massive problems” for residents on both sides of the border.

Ford said,

“We will respond strongly and we don’t want to. “On the critical minerals I will stop shipments going into the U.S. for nickel. I will shut down manufacturing because 50 per cent of the nickel you use is coming from Ontario.”

He further opined,

”You need our uranium, you need our potash, you need our high-grade nickel. I will stockpile our high-grade nickel, that 50 percent of your military and manufacture needs. Your aluminum, your steel, your lumber. It will be an absolute disaster and this is all due to one person. That is President Trump.”

U.S. Aluminum Imports and Tariffs: Impact on Costs and Supply Chains

Domestic production of aluminum is just one third of its needs. According to Statista, the United States imported about 4.8 million metric tons of aluminum for consumption in 2024.

Mexico and Canada supply around 90% of U.S. aluminum scrap imports. The U.S. heavily relies on aluminum and steel imports, with Canada providing 58% of aluminum and 23% of steel imports.

Meanwhile, the apparent consumption of aluminum totaled about 4.3 million metric tons. Canada is a top aluminum supplier to the U.S., sending most of its primary aluminum for use in American manufacturing.

Imports of aluminum for consumption in the United States from 2010 to 2024 (in 1,000 metric tons)

Aluminum import U.S.

Disrupting these supply chains will raise costs for industries such as automotive manufacturing. In this industry, parts often cross borders several times before the final assembly.

Tariff History Repeats Itself

The U.S. aluminum sector has faced trade measures before. In 2018, then-President Donald Trump imposed a 10% tariff on imported aluminum and 25% on steel to boost domestic production. These tariffs later extended to the EU, Canada, and Mexico.

In August 2024, under President Joe Biden, aluminum tariffs rose to 25%, increasing the U.S. Midwest premium by over 30%. Trump’s potential re-election could lead to further tariff hikes, creating market uncertainty.

Increased Aluminum Prices

The U.S. Midwest premium, a key indicator of aluminum tariff risk, has risen since Trump’s election win. S&P Global revealed the current price (as of February 25, 2024) for the US Aluminum P1020 Midwest Transaction Premium is 41.75 cents per pound.

If the government adds new tariffs, aluminum prices in the U.S. are likely to go up. This will increase costs for both manufacturers and consumers.

Midwest Transaction Premium (MWP) Price Historyaluminum U.S. TRUMP TARIFF

The U.S. and Canada both want to secure critical mineral supply chains, even with trade tensions. This is because collaborating in mineral exploration, processing, and production boosts long-term stability and economic security.

However, building new domestic processing facilities and securing alternative mineral sources will take years. Thus, short-term reliance on Canadian and Mexican metals is unavoidable.

Winners and Losers: The Effects of New Tariffs on U.S. Industries

The latest tariffs will have mixed effects across industries. Some domestic producers will benefit from less foreign competition, while others will face rising production costs. Goldman Sachs has recently rolled out an evaluation report that highlights the potential winners and losers of Trump tariffs.

Winners: Industries producing aluminum, steel, and oil and gas extraction will likely benefit the most. Higher tariffs on imports in these sectors will protect domestic producers. As these industries compete with imports, new tariffs will make foreign goods pricier, boosting demand for U.S.-made products.

trump tariff

Losers: The biggest losers will be secondary steel and aluminum producers and petroleum product manufacturers. These sectors rely heavily on imported raw materials. Higher tariffs on steel, aluminum, and oil will significantly raise their production costs. Midstream manufacturers of products like auto parts, beverage cans, and window frames will also feel the pressure.

trump tariff

Tariffs on Canadian and Chinese aluminum could disrupt global supply chains, raising costs for U.S. manufacturers. Supply shortages may arise as producers redirect exports to other markets. The long-term fix is to boost North American supply chains. We need to invest in local processing. Also, the U.S. and Canada must work together for steady access to key materials.

Can the U.S. Really Be Self-Reliant with Trump’s Tariffs?

Trade tensions are shaking up industries and slowing investments. Tariffs on key imports like steel, semiconductors, oil, gas, and medicine could hurt U.S. businesses more than those on Chinese goods.

Many American companies rely on these imports to stay competitive. If tariffs keep changing, businesses may hold back on investing due to rising costs and supply issues.

Industry experts speculate higher tariffs on critical imports could do more damage than those targeting China. The last trade war (2018-2019) showed how foreign retaliation can hit U.S. exports hard. More significantly the U.S. National security could also at risk—China has already cut off supplies of key minerals like gallium and germanium, which are essential for defense.

However, a possible solution lies in stronger U.S.-Canada ties with favourable tariffs. A stable North American supply chain for critical minerals can reduce reliance on foreign sources and protect both the economy and national security.

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RBC, BMO, TD: Who Wins the Canadian Big Five Banks’ Financial Face Off and Net-Zero Race?

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Canadian Banks Financial Face Off and Net Zero Race: Who's Leading the Charge?

The Canadian banking sector is under pressure to balance financial growth with sustainability. The Big Five banks of the country – Royal Bank of Canada (RBC), Bank of Montreal (BMO), Bank of Nova Scotia (Scotiabank), TD Bank, and Canadian Imperial Bank of Commerce (CIBC) – have all reported their latest earnings while advancing their climate commitments.

The Big Five banks’ financial results reflect the strength of the Canadian economy, while their sustainability and net-zero initiatives show how committed they’re to reducing carbon emissions.

But how do these Canadian banks compare? Let’s dive into their latest earnings and see who is leading the charge toward a greener future.

Financial Performance: A Competitive Landscape

Royal Bank of Canada (RBC): Record Earnings with Strong Performance

RBC reported a net income of CAD 5.13 billion in Q1 2025, up from CAD 3.52 billion in Q1 2024. Adjusted earnings per share (EPS) stood at CAD 3.62, surpassing analyst expectations of CAD 3.24.

  • Revenue: CAD 16.74 billion (up from 13.49 billion year-over-year)
  • Net Interest Margin (NIM): Not explicitly stated in available reports
  • Provision for Credit Losses (PCL): CAD 1.05 billion (up from 815 million)

RBC’s financial performance was bolstered by a strong wealth management division, which saw a 48% increase in income, and robust capital markets earnings. The acquisition of HSBC Bank Canada contributed an additional CAD 214 million to net income. 

Bank of Montreal (BMO): Solid Growth Amid Economic Challenges

BMO reported a net income of CAD 2.14 billion in Q1 2025, up from CAD 1.29 billion in Q1 2024. Adjusted earnings per share (EPS) stood at CAD 3.04, surpassing analyst expectations of CAD 2.41.

  • Revenue: CAD 7.28 billion (up from 6.22 billion year-over-year)
  • Net Interest Margin (NIM): Not explicitly stated in available reports
  • Provision for Credit Losses (PCL): CAD 573 million (slightly down from 585 million a year ago)

BMO’s financial performance was strong despite higher credit provisions. Its capital markets division contributed significantly, with a 45% increase in adjusted net income, reaching CAD 591 million.

Bank of Nova Scotia (Scotiabank): Facing Margin Pressure

Scotiabank’s Q1 2025 net income stood at CAD 2.02 billion, slightly lower than CAD 2.12 billion in Q1 2024. Adjusted EPS was CAD 1.68, missing expectations of CAD 1.70.

  • Revenue: CAD 8.16 billion (down slightly from 8.23 billion)
  • Net Interest Margin: Not explicitly stated in available reports
  • Provision for Credit Losses: CAD 955 million (up from 910 million)

While Scotiabank saw modest revenue growth, higher loan loss provisions and lower NIMs affected profitability. The bank’s Latin American operations performed well, helping offset domestic weakness.

TD Bank: Strong Performance Despite Loan Losses

TD Bank announced a net income of CAD 2.79 billion in Q1 2025, a slight decline from CAD 2.82 billion in Q1 2024. Adjusted EPS was CAD 1.55, remaining flat year-over-year.

  • Revenue: CAD 14.05 billion (up from 13.71 billion)
  • Net Interest Margin: Not explicitly stated in available reports
  • Provision for Credit Losses: CAD 1.21 billion (up from 1.02 billion)

TD’s performance was driven by strong deposit growth and capital markets revenue. However, increased provisions for credit losses reflect potential economic headwinds.

CIBC: Higher Earnings But Growing Risks

CIBC posted a Q1 2025 net income of CAD 2.18 billion, up from CAD 1.73 billion in Q1 2024. Adjusted EPS was CAD 2.20, above the consensus estimate of CAD 1.81.

  • Revenue: CAD 7.3 billion (up from 6.14 billion)
  • Net Interest Margin (NIM): Not explicitly stated in available reports
  • Provision for Credit Losses (PCL): CAD 573 million (down from 585 million)

CIBC’s earnings growth was supported by strong loan and deposit growth. Its capital markets unit saw a 19% increase in net income, reaching CAD 619 million. However, rising provisions for bad loans signal caution.

Carbon Emission Reductions and Sustainability Race: Who’s Leading?

As these Big Five Canadian banks are going after profits, they, too, are under pressure to go after their sustainable and net-zero goals. Let’s see what they’re doing to hit their climate goals.

Royal Bank of Canada (RBC): Advancing Towards Net Zero

RBC has pledged to achieve net-zero emissions in its operations and financed emissions by 2050. The bank is aligning its lending and investment activities with global climate targets, focusing on energy efficiency, sustainable finance, and emissions reductions.

RBC’s GHG emissions totaled 119,802 metric tons of CO₂e in 2023, reflecting a steady decline from previous years. The bank has committed CAD 500 billion in sustainable finance by 2025.

RBC GHG emissions 2023
Source: RBC Climate Report

As of 2023, RBC has allocated CAD 393 billion in sustainable finance, making progress toward its CAD 500 billion target by 2025.

RBC sustainable finance
Source: RBC Climate Report

The most valuable bank in Canada also used carbon offsets as part of its strategy to neutralize its operational footprint. 

Key emission reduction initiatives are:

  • Expanding financing for renewable energy and clean technology projects.
  • Increasing investments in green buildings and energy-efficient operations.
  • Strengthening partnerships in climate finance and transition investments.
  • Supporting industries in their transition to a low-carbon economy.

RBC remains committed to climate risk management and improving transparency in its sustainability disclosures. The bank continues to refine its financed emissions tracking and collaborates with businesses to meet shared net-zero goals.

Bank of Montreal (BMO): Charging its Net-Zero Ambitions

BMO has committed to achieving net-zero emissions in its operations by 2050. The bank has been carbon-neutral in its operations since 2010 and aims to cut its Scope 1 and 2 emissions by 30% by 2030 (from a 2019 baseline). The bank has achieved this by:

  • Upgrading heating and cooling infrastructure across its buildings.
  • Purchasing renewable energy certificates (RECs) to match 100% of its global electricity consumption.
  • Offsetting residual emissions through high-quality carbon credits, including projects like the Great Bear Rainforest conservation initiative..

In 2023, the bank’s total greenhouse gas (GHG) emissions stood at 101,960 metric tons CO₂e, down 12% from 2022 levels. The bank retired 45,918 tCO₂e of carbon credits in the same year as part of its emission reduction strategies. 

BMO carbon or GHG emissions 2023
Source: BMO Climate Report

Major climate actions include:

  • Issued CAD 10 billion in sustainability bonds.
  • Financed CAD 70 billion in sustainable lending projects.
  • Pledged to provide CAD 150 billion in green financing by 2025.
  • BMO’s Asset Management division offers multiple sustainable investment options, focusing on ESG-oriented portfolios.

BMO has pledged CAD 300 billion in sustainable financing and has surpassed this with CAD 330 billion issued as of 2023. 

The giant financier aims to support businesses transitioning to a low-carbon economy. In 2023, the bank expanded its emissions tracking for lending portfolios, including commercial real estate, and continues to refine its sustainability-linked lending framework.

Bank of Nova Scotia (Scotiabank): Carbon Intensity Reduction

Scotiabank aims for net-zero financed emissions by 2050 and a 40% reduction in operational emissions by 2030. In 2023, its operational carbon emissions were 110,000 metric tons CO₂e, down 9% year-over-year.

Scotiabank carbon emissions 2023
Source: Scotiabank Report

“font-weight: 400;”>>The Canadian bank has reduced energy consumption in branches and offices by 25% as part of its net-zero efforts. It has also financed low-carbon initiatives in Latin America

Scotiabank has set a target of providing CAD 350 billion in climate-related financing by 2030. In 2023, the bank provided CAD 36 billion toward this goal, bringing its cumulative total to CAD 132 billion since 2018.

Key climate initiatives include:

  • Developing an internal net-zero scoring system to assess client transition plans.
  • Setting interim emissions intensity reduction targets for the automotive manufacturing sector.
  • Intending to increase internal carbon price to further emission reductions.
  • Expanding financing solutions for renewable energy projects and electric vehicle adoption.

The bank also continues to reduce its own operational emissions by securing emissions-free electricity, implementing energy efficiency programs, and integrating climate risk assessments into its lending strategy.

TD Bank: Leading in Sustainable Finance and Decarbonization

TD Bank has the most aggressive green finance strategy among the four banks. It has pledged CAD 500 billion in sustainable and decarbonization finance by 2030, with nearly CAD 70 billion allocated in 2023 alone. 

TD has emitted a total of 117,317 metric tons of CO₂e in 2023, down 14% from 2022. The bank has already achieved a 28% reduction in operational Scope 1 and 2 emissions, surpassing its 2025 target of 25%.

TB bank carbon emissions 2023
Source: TD Bank climate report

The bank has retired 85,176 verified carbon reduction and removal credits, equal to the bank’s market-based Scope 1 and 2 emissions and Scope 3 category 6 (business travel) emissions.

More notably, the bank has one of the largest direct air capture (DAC) carbon credit purchases in the financial sector. It agreed to buy 27,500 metric tons of carbon removal credits over four years.

Also, TD Bank has expanded its financial emissions tracking across nine high-emission sectors, including energy, automotive, and agriculture. The financier has also improved climate risk assessment tools and developed a central data repository to track emissions reduction progress across its operations and client portfolio.

TD Bank financed emissions
Source: TD Bank climate report

Other Sustainability Highlights:

  • Launched the first net-zero branch in Canada, 
  • Invested CAD 20 million in community-based climate projects, and
  • 60% of power is sourced from renewable energy.

CIBC: Balancing Growth and Sustainability

CIBC is committed to reducing its Scope 1 and 2 emissions and achieving net zero. In 2023, its operational emissions stood at 71,031 metric tons CO₂e, a 5% increase from 2022.

CIBC carbon GHG emissions 2023
Source: CIBC Sustainability Report

Per CIBC’s sustainability report, the bank has set a 30% operational GHG reduction target by 2028 (compared to 2018 levels). It also aims to achieve carbon neutrality in operations by 2024. The bank is on track to meet this target through:

  • Increasing investments in renewable energy.
  • Expanding sustainable finance offerings, including carbon capture, hydrogen, and e-mobility financing.
  • Implementing energy-efficient technologies in offices.
  • Partnering with carbon capture firms for carbon offset projects.
  • Enhancing transparency in climate risk reporting and engaging with industry groups 

The bank has issued over CAD 157 billion in sustainable finance investments as of 2023. It has a target of 300 billion by 2030. 

CIBC helped finance sustainable infrastructure projects. This includes battery energy storage systems in the UK and big renewable energy deals.

Who’s Winning the Net Zero Race?

With all the sustainability initiatives and financing solutions provided by each bank, who wins the net-zero race? The chart below shows the comparison of the banks’ GHG emissions and sustainable finance progress as of 2023. 

Source: Companies’ Data

Overall, TD Bank and RBC lead with the highest sustainable finance commitment, while BMO has surpassed its financing goal. RBC is also making significant strides in sustainable finance and net-zero initiatives, leveraging its market leadership.

CIBC has made strong progress in both emissions reductions and sustainable investments. Meanwhile, Scotiabank continues expanding its climate financing but has the third-highest operational emissions among the five banks.

Conclusion: Balancing Profitability with Climate Commitments

The five major Canadian banks continue to navigate economic headwinds while strengthening their sustainability and net-zero initiatives. While financial results varied, all banks have made progress in decarbonization efforts, sustainable finance, and emissions reductions.

  • RBC leads in net income and is expanding climate finance and net-zero initiatives.
  • BMO remains a leader in carbon-neutral operations and financed emissions tracking.
  • Scotiabank is aggressively expanding climate-related finance and client net-zero assessments.
  • TD Bank is surpassing emissions reduction targets and making innovative carbon credit investments.
  • CIBC is strengthening its renewable energy financing and operational net-zero transition.

As regulatory pressure and investor expectations increase, these Big Five Canadian banks will need to accelerate their climate and net-zero strategies while maintaining profitability. Future progress will depend on expanding sustainable finance, improving emissions tracking, and supporting client transitions to a low-carbon economy.

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Lithium Prices Crash Below $10K, Hitting a 4-Year Low: Will the Market Rebound?

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Lithium Prices Crash Below $10K, Hitting a 4-Year Low: Will the Market Rebound?

The lithium market is experiencing a major price decline due to rising supply and weaker demand. In February 2025, the lithium carbonate CIF North Asia price fell below $10,000 per metric ton, dropping 4.5% to $9,550/t. This is the lowest level since February 2021. Analysts expect further cuts in production throughout 2025 to balance the market.

The price drop is mainly due to strong production in Chile and a post-holiday demand slowdown in China. Also, new lithium projects in Mali and Argentina boost global supply. This adds to the downward pressure on prices.

Why Are Lithium Prices Falling?

Several key factors contribute to the ongoing decline in lithium prices, ranging from oversupply to shifting market dynamics and policy changes.

Oversupply Floods the Market

Lithium production has been growing rapidly. In January 2025, Chile’s lithium exports increased by 22.8% month over month, flooding the market with additional supply.

Mali’s new lithium mines, Bougouni and Goulamina, will boost lithium output to 40,528 metric tons of lithium carbonate equivalent (LCE) in 2025. This accounts for 2.7% of the global supply.

Additionally, Argentina’s Ganfeng Lithium Group has started production at the Mariana brine project, adding another 17,420 metric tons of LCE annually. Argentina is now the top producer in the Lithium Triangle. This area includes Bolivia and Chile, which hold some of the richest lithium reserves in the world.

Benchmark Mineral Intelligence shows that the global weighted average price for lithium is dropping, as seen in the chart. This change reflects the increase in supply.

Lithium prices global weighted average
Source: Benchmark Mineral Intelligence

China’s Demand Woes

China, the world’s biggest buyer of lithium, saw a sharp decline in demand in early 2025. The Lunar New Year holidays slowed down industrial work. Many battery makers also postponed their purchases. This contributed to a 1.6% price drop for lithium carbonate in China, bringing it down to 76,100 yuan per metric ton by mid-February.

Additionally, the shift to lithium iron phosphate (LFP) batteries—which require less lithium than traditional nickel-based batteries—is reducing lithium demand. Companies such as Tianqi Lithium and IGO Ltd. have already halted expansion at their lithium hydroxide refineries due to weaker market conditions.

Benchmark Mineral Intelligence said lithium prices soared to $81,375 per tonne in China by December 2022. This spike pushed consumers to look for alternatives, such as LFP batteries.

Policy Uncertainty in the U.S.

The future of North America’s lithium supply chain is unclear, adding to the market pressure. The US Inflation Reduction Act (IRA) of 2022 gave tax credits for lithium from Canada and other allied countries.

Now, it is being reconsidered. The Trump administration also suggested a 10% tariff on energy exports from Canada, like lithium. If enacted, these tariffs could make lithium imports more expensive, limiting investment in the sector.

Currently, only 44.7% of US lithium demand is met by domestic production, rising to 76.4% when including Canadian supply. Any policy changes could significantly impact lithium prices and availability in North America.

Cheaper Lithium Sparks a New EV Price War

The decline in lithium prices has had a notable impact on battery manufacturing costs. The falling prices are closely linked to trends in the plug-in electric vehicle (PEV) and battery electric vehicle (BEV) markets.

Slower-than-expected EV adoption in key regions, driven by reduced government incentives and economic uncertainty, has weakened lithium demand. Automakers are adjusting production forecasts, leading to fluctuations in battery material purchases.

PEV sales
Source: S&P Global

Benchmark Mineral Intelligence reports that cell prices have dropped 73% since 2014. This decline comes from higher production volumes, new technology, and lower raw material costs. These factors let battery makers cut prices.

However, lower costs have made EVs cheaper. This could increase demand over time as forecasted below. Yet, the current oversupply of lithium makes it hard for producers to stay profitable.

global lithium carbonate equivalent demand 2017-2027

How the Industry Is Reacting to the Lithium Slump

The prolonged decline in lithium prices has led to significant industry reactions. The industry is responding to the ongoing slump with various strategies aimed at stabilizing the market. Big producers like Albemarle and SQM plan to cut back production. This move aims to stop further price drops. 

Some mining companies are delaying new projects, while others are cutting costs to remain profitable in the face of lower revenues. Smaller lithium miners are having a tough time. Those without strong financial support are struggling the most. Some have had to stop operations or look for mergers to survive.

In December 2024, Rio Tinto acquired Arcadium Lithium for €6.2 billion, consolidating its position in the global lithium market. This acquisition occurred amid an excess supply and significantly lower prices since their peak in 2022.

Despite these challenges, major mining companies expect lithium demand to rise in the next decade. This growth will be fueled by the shift toward electric transportation and renewable energy storage.

However, the oversupply is causing problems for smaller companies. Some have cut back or stopped their operations. Cutting subsidies in key countries has slowed EV sales growth. This means that only a production cut may raise lithium prices in the medium term.

Looking Ahead – When Will Lithium Prices Recover?

Despite the current challenges, there is optimism about the future of the lithium market. Industry analysts foresee a future increase in lithium demand, potentially leading to a market shift by the early 2030s, driven by infrastructure projects and the growth of green technology. Notable investments include Exxon Mobil and Tesla, seeking to capitalize on future lithium needs.

Goldman Sachs Research estimates the overall increase in data center power consumption from AI to be 200 terawatt-hours per year between 2023 and 2030. As AI use and high-performance computing grow, the need for lithium-ion batteries will rise. These batteries are key for backup power in big computing facilities.

Notably, S&P Global Commodity Insights predicts that the oversupply will make it hard for lithium prices to go up until the next decade.

lithium price forecast
Source: S&P Global

The lithium market is facing oversupply and falling prices. This is due to higher global production, reduced demand from key markets like China, and uncertainties in major economies.

While these factors present challenges in the short term, the anticipated growth in electric vehicle adoption and renewable energy storage solutions offers a positive outlook for lithium demand in the long run. Industry stakeholders must navigate these complexities carefully, balancing current market realities with future opportunities.

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Wells Fargo Abandons Net Zero Promise: What It Means for the Future of Green Finance

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Wells Fargo’s Net Zero U-Turn: What It Means for the Future of Green Finance?

Wells Fargo, one of the largest financial institutions in the United States, has made a significant shift in its climate strategy by abandoning its commitment to achieving net-zero financed emissions by 2050. It is the first major U.S. bank to do so. 

The bank has also dropped its interim 2030 targets for financed emissions. This is a big step back from its earlier climate goals. This decision fits a larger trend: Major financial institutions are changing their sustainability strategies, responding to outside pressures like political challenges and economic facts.

Why Wells Fargo Abandoned Its 2050 Net Zero Pledge

In a formal statement, Wells Fargo announced that it was discontinuing its sector-specific 2030 interim financed emissions targets and withdrawing its 2050 net zero commitment.

wells fargo 2030 targets
Source: Wells Fargo Climate Report

The bank mentioned several outside factors. These include changes in public policies, shifts in consumer behavior, and new technology. These reasons led to its strategic shift.

The bank stated:

“When we set our financed emissions goal and targets, we said that achieving them was dependent on many factors outside our control…Many of the conditions necessary to facilitate our clients’ transitions have not occurred.”

This change happens as the political backlash against net-zero policies in the U.S. grows. This trend follows President Donald Trump’s re-election. The administration is rolling back climate rules, which gives banks less reason to stick to strict decarbonization goals.

Wells Fargo’s choice reflects a wider trend in banking. For example, HSBC is also easing rules on fossil fuel financing.

Wells Fargo’s Emissions Reduction Strategy

Before Wells Fargo stepped back from net-zero promises, it was working hard to cut its operational emissions. The bank aims to cut its greenhouse gas (GHG) emissions by 50% by 2030. This target is based on its 2019 levels.

The bank is working to reduce its Scope 1 and 2 emissions, which totaled 641,026 metric tons (location-based emissions) in 2023. These emissions include direct emissions from its own operations and indirect emissions from the electricity it buys.

wells fargo GHG carbon emissions 2023
Source: Wells Fargo Climate Report

Key components of Wells Fargo’s emissions reduction strategy include:

  • 100% Renewable Energy Usage: Wells Fargo has been operating on 100% renewable energy since 2017 to power its global operations.
  • Energy Efficiency Measures: The bank invested in high-efficiency HVAC systems, LED lights, and smart energy management systems. These upgrades are in branches and offices to cut energy use.
  • Sustainable Building Initiatives: The company is investing more in LEED-certified buildings. They want all new corporate offices to meet high environmental standards.

Wells Fargo uses carbon credits to offset its emissions. The bank offsets its residual Scope 1 and Scope 2 emissions through the purchase of voluntary carbon credits registered under the Verra Registry’s Verified Carbon Standard (VCS) Program and the Climate Action Reserve Registry (CAR). These credits are used to compensate for emissions that remain after reduction efforts.

In 2023, Wells Fargo retired about 86,044 metric tons of carbon credits to offset its residual Scope 1 and 2 emissions.

Wells Fargo not only aims for operational sustainability but also works to cut financed emissions. These emissions come from the businesses and industries it lends to. While it has now scrapped its sector-specific financed emissions goals, the bank had targeted emission reductions in high-impact industries, such as oil and gas, power generation, and automotive manufacturing.

A Changing Approach to Sustainability Financing 

Wells Fargo says it still cares about sustainability financing, even after rolling back its net-zero commitments. The bank promises to keep funding both traditional and low-carbon energy options. It will continue to support clients’ efforts related to climate change.

As of December 2023, Wells Fargo has about $55 billion in commitments. This amount goes to oil, gas, pipeline companies, and utilities. The bank has given more than $20 billion in renewable tax equity since 2006.

Wells Fargo sustainable finance progress 2023
Source: Wells Fargo Climate Report

Also, it has invested $178 billion in sustainable finance in the last three years. These investments include $16 billion in renewable energy projects and over $15 billion in clean transportation finance.

In 2021, Wells Fargo set a goal to provide $500 billion in sustainable financing by 2030. The bank confirmed that it will maintain this target despite scrapping its net-zero goals. It will also keep working on its goals to reduce Scope 1 and 2 emissions for better operational sustainability.

Impact on the Financial Sector

Wells Fargo’s move raises questions about the financial sector’s role in addressing climate change. Many banks promised to follow the Paris Agreement’s climate goals. However, making these goals happen has been tough.

High energy prices, economic worries, and investor demands for profit have changed priorities.

The bank’s withdrawal from the Net-Zero Banking Alliance (NZBA), a global coalition committed to financing emissions reductions, further signals a shift in strategy. Other big U.S. banks, like Goldman Sachs, have left the alliance. This shows a wider trend in the industry of stepping back from strict climate commitments.

Criticism from Climate Advocates

Wells Fargo’s choice has faced harsh backlash from climate activists and sustainability supporters. The Sierra Club has criticized the bank for breaking its climate promises. They say financial institutions are key to funding the shift to a low-carbon economy.

Greenpeace UK and other environmental groups agree. They say that financial institutions play a major role in shaping global climate efforts. When banks invest in fossil fuels instead of renewable energy, they hurt the climate crisis rather than help it.

Investor Reactions: Profit Pressures Take Priority

Wells Fargo’s strategic shift aims to keep investors confident and ensure profits. The bank’s leaders stress that they focus on meeting client needs. They also aim to ensure financial stability in a fast-changing economy.

Wells Fargo feels pressure from activist investors. One major player is Elliott Investment Management. They want the bank to deliver better returns. The bank’s share price has lagged behind rivals like JPMorgan Chase and Goldman Sachs. So, leaders are now shifting their focus back to core banking functions instead of ambitious climate goals.

The bank’s revised strategy includes:

  • Reducing operational costs and divesting $20 billion in assets by 2027.
  • Increasing fossil fuel financing, maintaining significant lending to oil and gas projects.
  • Shifting its renewable investments to a more selective and capital-light model.

What’s Next? Will Other Banks Follow Suit?

Although Wells Fargo has abandoned its financed emissions reduction targets, it continues to position itself as a key player in sustainable finance. The bank says it will still help clients with decarbonization strategies. It will keep investing in renewable energy where there are good opportunities.

However, the broader implications of this decision remain uncertain. The move might encourage other banks to rethink their net-zero pledges. This is especially true in areas where political pushback against climate policies is rising. But pressure from institutional investors and global stakeholders may lead to new commitments later.

As the global energy transition unfolds, Wells Fargo’s evolving strategy reflects the complexities financial institutions face in balancing profitability, regulatory landscapes, and climate goals. The bank still supports sustainable finance, but its move away from net zero shows that aligning finances with climate goals is a tall order.

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Amazon Expands Renewable Energy with 17 New Projects in Spain & First in Portugal

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Amazon

Amazon is ramping up its renewable energy push in Spain with 17 new solar and wind projects. This brings its total investment in the country to 94 renewable projects, generating over 3.7 gigawatts (GW) of clean energy—enough to power more than 2.3 million Spanish homes annually.

A major part of this effort includes 63 large-scale wind and solar farms, which play a key role in reducing Spain’s reliance on fossil fuels. At the same time, Amazon took a big step toward its clean energy goals by launching its first renewable project in Portugal.

These efforts reinforce Amazon’s sustainability commitment and net-zero emissions by 2040—ten years ahead of the Paris Agreement’s deadline.

Mega Solar and Wind Farms Boost Spain’s Clean Energy Goals

Lindsay McQuade, Amazon’s Chief Energy Officer in EMEA said,

“At Amazon, we are committed to providing the necessary infrastructure and services to our customers, while continuing to work to power our operations more sustainably. We are aware that the electrification of our society, together with digitalization, requires investment in energy sources and networks on which we depend, if we want to take advantage of the full potential of new technologies. For this reason, at Amazon we have promoted more than 230 solar and wind projects in Europe, which has made us the largest corporate buyer of renewable energy in Europe and the world in 2024.”

Spain’s latest projects include solar and wind farms in five regions: Aragon, Andalusia, Castilla y León, Catalonia, and Extremadura.

  • These initiatives will add over 870 megawatts (MW) of clean energy to the grid.

One major project is a solar farm in Ciudad Rodrigo (Salamanca). It will be one of Amazon’s largest renewable projects in Spain. Set to finish in 2025, this plant will have a capacity of 212 MW.

Iberdrola is leading the project and has invested nearly €200 million. It could create 800 jobs and boost the local economy.

Last May, Amazon announced 12 new off-site renewable energy projects in Spain, adding 596 MW of capacity. This included 49 off-site installations: 9 wind farms, 40 solar plants, and 30 solar rooftops. These agreements raised Amazon’s total renewable capacity in Spain to over 2.9 GW.

amazon solar
Source: Amazon

Environmental Benefits of Amazon’s Renewable Energy Projects in Spain

  • Lower Carbon Emissions: Amazon’s 3.7 GW of clean energy cuts greenhouse gas emissions, creating a healthier environment.
  • Increased Renewable Energy Supply: These projects add capacity to Spain’s energy grid, helping the country reduce its dependence on fossil fuel.
  • Job Creation: Building and running these solar and wind farms creates thousands of jobs, boosting local employment.
  • Technological Innovation: Amazon applies AI and cloud computing to improve energy production and storage efficiency.
  • Better Air Quality: These projects lower fossil fuel use, resulting in cleaner air for people and wildlife.

Share of electricity generation from renewable sources in Spain in 2023, by type

Spain renewable

Amazon’s First Renewable Energy Deal in Portugal Set to Make History

Amazon is all set to transform Portugal’s renewable energy market with the Tâmega Wind Complex. This project will be the biggest wind farm in the country, aiming to blend wind and hydro energy for better storage and supply. It will be located near the Tâmega hydroelectric complex.

Explaining further, the wind farm will pump water into the Tâmega reservoir. Later, this water can generate electricity when demand is high. Once again, Iberdrola leads this €350 million investment, adding 219 MW of clean energy. They expect more than 700 jobs from this project and a significant employment boost for the locals.

Amazon Achieved 100% Renewable Energy Goal Years Ahead of Schedule

Amazon has met its global goal of using 100% renewable energy. This achievement came seven years early. Their clean energy projects can now power around 24.3 million homes in Europe.

These projects help Amazon run smoothly and provide clean energy to local grids. They create jobs, strengthen local economies, and contribute to sustainability efforts globally.

Globally, it has launched over 500 solar and wind projects in 19 countries. These projects produce over 77,000 gigawatt-hours (GWh) each year.

In Europe, Amazon has invested in more than 230 renewable projects. This makes it the largest corporate buyer of clean energy there. These projects reduce carbon emissions and support local economies by creating jobs and helping businesses.

amazon renewable energy
Source: Amazon

The Climate Pledge: A Decarbonization Commitment

Amazon’s Climate Pledge aims for net-zero carbon emissions by 2040. It has over 375 signatories worldwide, including major Spanish companies like Telefónica and Glovo.

The company has committed $2 billion through the Climate Pledge Fund to boost decarbonization and develop innovative sustainability solutions.

Commitment to Carbon Neutrality

Amazon remains focused on sustainability. Its sustainability report revealed that in 2023, the company cut its carbon emissions by 3%. It cut its carbon footprint to 68.82 MMT CO2e from 70.74 MMT CO2e in 2022. This change came from an 11% drop in Scope 2 emissions and a 5% decrease in Scope 3 emissions. However, Scope 1 emissions rose by 7% due to increased transportation fuel use.

amazon carbon emissions
Source: Amazon

Amazon also reduced its carbon intensity for the fifth year in a row, reflecting a 13% drop from 2022 levels. This progress shows its commitment to minimizing environmental impact.

Amazon’s recent investments in solar and wind in Spain and Portugal reaffirm its commitment to sustainability. Once fully operational, these projects will significantly impact both countries’ economies and environments.

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Can Verra’s New Carbon Standard Make Rice Farming More Sustainable?

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rice emission

Verra recently introduced the Verified Carbon Standard (VCS) Methodology VM0051 to reduce greenhouse gas emissions from rice farming. Under this guideline, farmers will practice improved water and crop management practices in flooded rice systems.

Verra began developing this methodology in late 2023. They held a public consultation in 2024 with ATOA Carbon and external reviewers to refine VM0051. The new standard, “Improved Management in Rice Production Systems, v1.0, replaces the old Clean Development Mechanism (CDM) method AMS-III.AU. The previous method ended in March 2023.

Verra’s VM0051: A New Approach to Reducing Rice Emissions

Rice is a staple for over half the world’s population. Rice fields cover around 168 million hectares. But they also release a lot of methane, which is a potent environmental pollutant.

As mentioned before, VM0051 promotes sustainable farming techniques. These methods reduce methane emissions from rice farming and improve water and fertilizer use. The standard also provides social benefits by raising farmers’ income and helping women get training and financial services in agriculture.

Generate High-Quality Credits 

Verra’s VM0051 also aims to measure or quantify emission reductions more accurately. This method promotes actions such as enhancing rice varieties and using methanotrophic bacteria to cut down methane. By using VM0051, project developers can earn high-quality Verified Carbon Units (VCUs).

Subsequently, buyers or stakeholders will want these credits to help improve rice farming, boost food security, and meet their climate goals.

rice emissions
Sourced from ricenewstoday.com

Key Features 

Verra highlighted that farming practices must reduce emissions by at least 5% to qualify as a significant change. Projects must show additionality. They can achieve this by proving a regulatory surplus, overcoming barriers, or showing that these practices are uncommon in the area.

This new standard targets agricultural land management (ALM) projects. However, VM0051 prohibits practices that significantly reduce soil organic carbon. So, projects that want to increase or decrease SOC storage must use the VCS Method VM0042 instead.

Some major improvements over the previous CDM methodology include:

  • Stronger Additionality Criteria: The methodology introduces stricter guidelines for proving additionality, including the use of remote sensing data.
  • Expanded Project Eligibility: Eligible activities now include using methanotrophic bacteria, shortening cultivation periods, avoiding residue burning, planting low-emission rice varieties, and optimizing nitrogen fertilizer use.
  • Soil Protection Measures: Safeguards prevent soil organic carbon (SOC) loss due to new farming methods.
  • Comprehensive Emission Tracking: Monitor and quantify nitrous oxide (N2O) emissions, along with CO2 from fossil fuels and energy use.
  • Dynamic Baseline Setting: The methodology adjusts baseline emissions based on actual weather conditions.
  • Improved Guidance: It provides clear instructions for project area classification and emission reduction calculations.
  • Flexible Measurement Methods: Project developers can choose from different quantification approaches, including biogeochemical models.
  • Digital Monitoring and Verification: Promotes advanced tools like remote sensing, artificial intelligence, and machine learning to streamline project validation and verification.

Quantifying Emission Reductions

VM0051 provides three methods for measuring emissions:

  1. Biogeochemical Process-Based Models: These simulate how farming practices impact emissions.

  2. Direct Measurement: Field studies gather data on actual methane emissions.

  3. Default Equations and Emission Factors: Use standard emission factors for easy calculations. These are available for projects that emit less than 60,000 t CO2e per year.

How VCS Projects Can Transition

To switch from the discontinued AMS-III.AU method to VM0051, one can follow these steps. First, use the VCS Methodology Change and Requantification Procedure for past verification periods. Next, update the methodology through a Project Description Deviation for future monitoring.

Finally, ensure the project description aligns with VM0051 before applying for a new project registration.

Each project selects a method based on its size and emission sources. Table 4 in the methodology document lists all eligible quantification options.

Future Developments

Verra is creating a digital version of VM0051. You can find it on the Verra Project Hub. This tool will streamline project submissions with structured templates for data collection. Verra is also looking to integrate VM0051 into its upcoming Scope 3 Standard Program.

In conclusion, we can say that Verra’s new VM0051 helps cut greenhouse gas emissions from rice farming. As a result, it makes the industry more sustainable and, ultimately, supports climate goals.

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U.S. Data Centers’ Power Demand Surges to 46,000 MW: What’s Driving the Growth?

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US Data Centers' Power Demand Surges to 46,000 MW: What's Driving the Growth?

United States data centers are consuming more electricity than ever before. In the third quarter of 2024, their power demand reached 46,000 megawatts (MW), a huge increase driven by artificial intelligence (AI) and cryptocurrency mining.

According to forecasts, this demand will grow to 59,000 MW by 2029. Digital services, cloud computing, and AI apps make data centers grow quickly.

Texas leads in data center power consumption, supplying 8,796 MW to these facilities. Virginia follows closely with 6,967 MW, mainly powering cloud providers like Amazon, Microsoft, and Google. These states host the biggest hyperscale data centers. They need a lot of energy to run servers and cooling systems.

US utility power demand from data centers 2029
Source: S&P Global Commodity Insights

The Power-Hungry Digital Boom: What Fuels the Surge?

Three main culprits drive the energy demand of data centers in the U.S.

AI’s Insatiable Energy Appetite

The rapid development of AI is a major factor behind the increasing energy use. AI models require vast computing power for training and operations. OpenAI, Meta, and Google use powerful GPUs and servers, which require constant electricity. AI’s energy use will likely rise as more companies embrace machine learning and automation.

Training large AI models like GPT-4 requires thousands of GPUs, consuming up to 1 gigawatt-hour (GWh) per model. AI chatbots, image generators, and automation tools are increasing electricity demand.

Goldman Sachs Research projects that AI-driven data centers will consume an additional 200 terawatt-hours of electricity annually from 2023 to 2030.

data center power demand by GS

  • By 2030, AI-driven data centers could account for 30% of all global data center power consumption.

RELATED: The Carbon Countdown: AI and Its 10 Billion Rise in Power Use

Cryptocurrency Mining’s Energy Drain 

Bitcoin and other cryptocurrencies require massive computational power to validate transactions through mining. In Texas alone, crypto miners contribute heavily to electricity demand. Despite price fluctuations, mining operations continue to expand, pushing energy grids to their limits.

Bitcoin mining uses over 120 terawatt-hours (TWh) of electricity each year. This amount is more than what entire countries, like Argentina, consume.

cryptocurrency environmental cost and energy consumption
Image from GREENMATCH

The U.S. accounts for 37% of the world’s Bitcoin mining operations. Texas is emerging as a key hub due to its deregulated electricity market and lower energy costs.

Also, as crypto mining hardware gets better, miners are using liquid-cooled servers. This needs an extra cooling setup, which raises energy use even more. While some mining operations are adopting renewable energy, the majority still rely on traditional electricity sources.

Cloud Computing’s Growing Footprint

Businesses and individuals store massive amounts of data online. Cloud computing providers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud operate huge data centers that run 24/7. The rising demand for remote storage, streaming services, and real-time apps means these facilities must use more power.

By 2026, cloud computing workloads are expected to triple. This growth comes from enterprise applications, video streaming, and online gaming. 5G networks and edge computing are increasing the number of smaller data centers. These distributed centers add to the overall electricity demand.

Streaming platforms alone—such as Netflix, YouTube, and Disney+—consume over 200 TWh annually, with a large portion of this electricity coming from data centers. As demand for high-resolution video content, including 8K streaming, grows, the energy needs of these platforms will continue to rise.

Can the Grid Keep Up?

With data center energy needs skyrocketing, utility companies are adjusting their infrastructure and investments. Dominion Energy Virginia, for example, has 40.2 gigawatts (GW) of contracted capacity waiting for connection to the grid—almost double its 21.4 GW in July 2024. This reflects the growing interest in expanding data center operations in key states.

Southern Co., a major utility provider, raised its five-year capital plan by $14 billion. The new total is $63 billion. This increase will help enhance electricity generation and transmission. The company expects over 50,000 MW of additional power demand by the mid-2030s, with data centers accounting for 80% of this increase.

While energy companies prepare for rising demand, some experts warn of potential grid instability. The PJM Interconnection is the biggest electricity market in the US, serving 65 million customers. It expects data center power demand to rise to 26.7 GW by 2029. That’s a fourfold increase. Meeting this demand will require major infrastructure upgrades.

Despite concerns, industry leaders do not see an immediate energy crisis. Some experts argue that increased efficiency in AI and computing could balance demand. However, if data center growth continues at this pace, power shortages could become a real challenge in the coming years.

The Renewable Energy Race

To meet sustainability goals, many tech companies are investing in renewable energy sources. Microsoft and Google have committed to operating 100% carbon-free data centers by 2030. However, the speed at which renewables can replace traditional power sources remains uncertain.

renewable energy capacity additions, retirements in US
Source: S&P Global Commodity Insights

Energy providers are also stepping up. Exelon Corp. plans to invest $38 billion over four years in grid enhancements, including renewable energy projects. However, some experts believe renewables alone cannot sustain the rapid growth of data center power needs.

Hyperscale data centers are increasingly signing long-term power purchase agreements (PPAs) with wind and solar farms. Google, for example, signed a 1.6-gigawatt PPA in 2023 to power its new AI-driven cloud regions. Amazon and Microsoft are also investing heavily in wind and solar projects to offset their growing data center footprints.

The surge in U.S. data center power demand is driven by AI, cloud computing, and cryptocurrency mining. AI training models, high-res video streaming, and global Bitcoin mining are stressing the power grid like never before. Utility companies are spending a lot on expanding the grid. However, it’s unclear if this growth will be sustainable in the long run.

Renewable energy solutions are in development. However, it’s unclear if they can fully meet the growing demand. In the next few years, we’ll see if upgrades to infrastructure and clean energy can meet the rising demand for digital services. If not, power shortages and environmental concerns could reshape the future of data center expansion in the U.S.

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