Truck Companies Are Shifting to Hydrogen Fuel for Long-Haul Trips

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In the realm of long-haul trucking, a technological crossroads has emerged: the divide between hydrogen-powered and battery-electric trucks. As the industry grapples with stringent emissions regulations, particularly in California, truckers are starting to embrace hydrogen for zero-emission technology.

Companies like Nikola and traditional manufacturers are investing in hydrogen technology, aiming to overcome infrastructure challenges and meet growing demand.

The Shift to Hydrogen-Powered Trucks

Many truckers are shifting focus towards electric technology adapted for 18-wheelers. But there’s a clear divide between those favouring battery-cell rigs commonly used in electric cars and those considering hydrogen as the best solution for zero-emission technology, particularly for long-haul trips.

Supporters of hydrogen believe it offers advantages for long trips and quicker refuelling compared to battery technology. Hydrogen trucks can carry heavier loads since they don’t require large batteries.

However, hydrogen fuel cell vehicle, also called FCEV, and infrastructure are not as developed as battery-electric trucks, and strict regulations are pressuring truck operators.

Starting January 1, California will mandate that trucks visiting the state’s seaports be zero-emission vehicles. The state also plans to increase the use of clean fuels, aiming to phase out diesel over the next decades. 

These stringent rules on diesel trucks are among the toughest in the country, and other states might adopt similar regulations based on California’s lead.

The upcoming regulations have caused a surge in diesel truck purchases as carriers seek to expand their fleets before the restrictions come into effect. Truckers are also investing in zero-emission vehicles, although they come at a high cost, almost triple a diesel truck’s price. 

These purchases are supported by grants from California and local agencies but hinge on the promise of future infrastructure development.

Battery-electric trucks are already in operation in California, with over a dozen companies transporting freight using these vehicles. However, hydrogen-powered trucks are just starting to enter the market in the state, and hydrogen-fueling stations are lagging behind battery-electric infrastructure.

Globally, China has the most hydrogen fuel network at around 250 while the U.S. only has a little over 50 stations, mostly in California.

Truckers find battery-electric trucks suitable for short trips between ports, rail yards, and warehouses. Yet, for longer journeys of 100 miles or more, they consider these trucks less practical due to limited battery range and lengthy recharging times.

Currently, battery-electric heavy-duty trucks can travel around 300 miles and take hours to recharge. Some truckers report getting just over 150 miles between charges. 

In contrast, hydrogen trucks boast a range of up to 500 miles and refuel in about 30 minutes. They are also lighter than battery-electric rigs, enabling heavier loads.

While Nikola leads in hydrogen-truck technology, traditional manufacturers like Kenworth, Hyundai Motor, and Volvo Trucks are also working on developing hydrogen fuel-cell big rigs.

RELATED: Roadway Revolution: Nikola Accelerates Hydrogen Truck Production

In July, Nikola received a $41.9 million grant under the Trade Corridor Enhancement Program (TCEP) to build 6 heavy-duty hydrogen refueling stations across Southern California through its HYLA brand. 

Each hydrogen refueling station is designed to support and scale up the growth of heavy-duty commercial hydrogen refueling needs. Nikola also reached a milestone of sales orders for its hydrogen fuel cell electric trucks, reflecting a growing industry trend.

Hydrogen Holds The Promise of a Sustainable Energy

Napa-based trucking firm Biagi Bros recently trialed a hydrogen-powered Nikola truck for two months. Gregg Stumbaugh, their corporate equipment director, noted that due to the truck’s extended range and rapid refueling, their drivers accomplished twice the work compared to battery-electric trucks. 

California’s regulations mandate that 10% of Biagi Bros’ 230-truck fleet must be emission-free by 2027. Stumbaugh expects most of their zero-emission trucks bought before then, including the upcoming 10 Nikola trucks to be run by hydrogen fuel. 

He emphasized the quick refueling time as a significant advantage over battery-electric options.

Nikola’s CEO, Steve Girsky, aims to establish nine public fueling sites in California by mid-2024, a combination of the company’s HYLA brand and third-party providers. 

They’re collaborating with Voltera to set up 50 Hyla hydrogen-fueling stations across key trucking routes in the next five years. Their goal is to “make sure there’s a supply of hydrogen everywhere there’s customers”, said Nikola’s CEO Steve Girsky.

While hydrogen refueling is faster, it remains expensive due to the limited fuel market. 

Hyzon Motors‘ CEO, Parker Meeks, mentioned hydrogen’s cost being 2-4x higher per gallon than diesel. But as hydrogen becomes more prevalent, its price would decline in the next 3 years. 

Meanwhile, McKinsey & Company estimated that the total hydrogen production capacity announced by companies by 2030 rose by 40% as shown below.

For Tennessee-based IMC, investing in hydrogen trucks is a necessity. The company operates regular round trips of about 300 miles between ports and warehouses. These are areas where battery-electric vehicles fall short due to range limitations. 

The adoption of hydrogen-powered trucks in California is still in its initial stages. And hydrogen-fueling stations lag significantly behind those supporting battery-electric vehicles. 

However, as the recent developments in the hydrogen market show, a revolution is unfolding where hydrogen seems to hold the promise of a sustainable energy transition. 

READ MORE: 3 Important Things Happening in Hydrogen Right Now

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Bluesource’s Carbon Credit Strategy: An Easement Debate Shaping New Hampshire’s Forests

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The Attorney General’s office in New Hampshire is examining a plan proposed by Bluesource Sustainable Forest Company regarding the reduction of logging activities on a significant portion of the state’s forests as policymakers are working on bills associated with the use of carbon credits. 

The area, covering 146,000 acres, was initially safeguarded for logging and recreational purposes through a conservation easement. The plan did not anticipate revenue generation through carbon credit markets, a recent development in the industry.

Bluesource, the new owner, aims to curtail logging by around 50% on this massive tract of land in 2024. That area represents about 3% of the state’s landmass.

Though the plan’s intent is to increase forest carbon sequestration, it affects local mills, loggers, the region’s economy, and potentially taxpayers. 

The Value of Keeping Trees Standing 

The shift towards less logging is due to the increasing value of preserving trees for carbon credits. It is a market-driven initiative aimed at reducing carbon emissions.

According to Energy Transitions Commission (ETC)’s report, the current price of carbon credits for avoiding deforestation isn’t enough to cover the marginal cost of avoiding commodity-driven deforestation.

The Attorney General’s office is assessing whether Bluesource’ planned reduction aligns with the original agreement established to protect the land.

The plan outlines the company’s goals, which are subject to the easement.

The easement acts as a safeguard, ensuring that the land remains protected from development. It also dictates how it should be utilized while outlining the responsibilities of both the state and the landowner.

From the original 171,500 acres, 25,100 acres were allocated to the state. Out of this, 25,000 acres were set aside for wildlife habitat management, while an additional 100 acres were allocated to expand the Deer Mountain Campground.

The easement guarantees public access for various traditional recreational activities such as hiking, hunting, fishing, trapping, snowmobiling along designated trails. However, it limits “non-forest activities” to a maximum of 10% of the property.

In addition to preserving open spaces, protecting natural resources, and nurturing wildlife habitats, the primary objective of the easement is to maintain the property as a financially sustainable land area for timber, plywood, and other forest product production. It explicitly permits “forest management activities,” including various methods of cultivating, harvesting, and removing forest products.

Bluesource’s move to participate in the carbon credit market wasn’t foreseen when the conservation easement was formulated two decades ago.

Promoting Forest Carbon Credits in the US

For ages, forests have been valued mainly for the timber they provide. However, efforts to combat climate change have given them an additional value by recognizing their ability to absorb and hold carbon. 

Forests can trap nearly double the amount of carbon they release, acting as significant carbon storage. 

In 2020, the U.S. Forest Service calculated that per acre in New Hampshire, forests held around 87 tons of carbon by 2018. Approximately 42% of this was in above-ground growth, with 38% stored in the forest soils. 

When trees are cut down, processed, and used to create solid wood products like furniture or building materials such as plywood, their carbon remains stored within these products for potentially hundreds of years.

In 2003, there was no established carbon market in the US. Hence, the easement related to the Connecticut Lakes forest didn’t address managing the forest for carbon sequestration, storage, or carbon credit trading.

In 2022, Bluesource Sustainable Forest Company (BFSC) acquired the Connecticut Lakes Headwaters Working Forest, totaling a million acres managed. Thus, BFSC positions itself as “the largest private forestland owner entirely focused on addressing climate change.”

In 2021, Bluesource partnered with Oak Hill Advisors, a subsidiary of T.Rowe Price managing $500 billion in assets, to acquire forest lands, including those in New Hampshire. 

READ MORE: $1.8 Billion Bet on the Carbon Markets

BFSC’s president, Roger Williams, said that the collaboration would transition the company from developing projects generating carbon credits to becoming a forest land asset manager.

Additionally, last year, BFSC merged with Element Markets, a majority-owned entity of TPG Inc., an alternative investment manager. Element Markets describes itself as the primary creator and promoter of carbon and environmental credits across North America.

Companies that want to reduce their carbon emissions can buy the credits to offset their footprint. Each credit corresponds to one tonne of reduced or removed carbon from the air. 

The Debate Goes On

Bluesource intends to reduce timber harvests by over half of what has been cut in recent years, particularly between 12,000 and 14,000 cords for the year ending April 2024.

Meetings, discussions, and proposed legislative actions are underway to address the broader consequences of the plan on the local economy. The potential outcomes could have a profound impact on the logging industry, the local community, and the area’s fiscal landscape.

In response to concerns, Bluesource is engaging with legislators and stakeholders, offering expertise and collaboration to deal with the situation. 

According to Patrick D. Hackley, director of the state Division of Forests & Lands, Bluesource had submitted its revised Annual Operating Plan, noting that:

“We are now in the review process… to ensure the new harvesting plan, based on the company’s participation in California’s Air Resource Board Compliance (Carbon) Offset Program, complies with the purpose and all provisions of the conservation easement.”

Bluesource’s initiative to reduce logging for carbon credit generation within a preserved land area is raising debate in New Hampshire. The company’s move intersects with the long-standing conservation easement, provoking discussions on economic impact and forest carbon credit strategies.

RELATED: Urban Forest Carbon Credits: Potential Market for Climate Investors

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CCUS Capacity Grows 50% in BNEF 2023 Market Outlook

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This year has seen the rapid growth of the carbon capture, utilization, and storage (CCUS) industry, owing to strong global policy support for projects and initiatives increasing capture capacity. 

According to research company BloombergNEF (BNEF), the industry will see a 50% increase by 2025. It will reach 420 million metric tons a year by 2035. 

Investments in CCUS infrastructure amounted to $6.4 billion in 2022, while funding this year will reach $5 billion. 

CCUS Growth and Expansion 

The CCUS market has initially focused on natural gas processing. But as decarbonization efforts intensify, it is expanding into carbon-intensive sectors, including power, cement, iron and steel. 

BNEF reported that the industry captured over 140 million metric tons per annum (mtpa) from 2022. It is forecasted to grow at a 18% compound annual growth rate and capture 420 mtpa by 2035. This represents 1.1% of current global annual emissions. 

The major sectors that will drive CCUS expansion include ammonia or hydrogen production and power generation. Together, they will account for 33% of announced carbon capture capacity. 

It is interesting to note that the cement sector has experienced a massive increase in proposed carbon capture capacity – 175%.

Startups are also developing innovative technologies that can capture CO2 from the atmosphere and lock it away for good by injecting it into the cement.

The BNEF market outlook further noted that the US will remain the leader in deploying carbon capture. It will keep 40% in market share in 2035, followed by the UK at 16% share.

RELATED: US DOE to Grant $500M to New Carbon Transport Infrastructure

Canada ranks third at 12% while other large country emitters, including Australia, the Netherlands, and China will take 3-4% share. 

The Setbacks

While the future of CCUS looks promising, some challenges are just around the corner. 

The major hurdle is the lack of transport and storage capacity in deploying carbon capture projects. One solution to this challenge is commercialization as what some national governments and companies are promoting. 

Yet, the high costs in constructing storage are not acknowledged by policies such as the EU’s Net Zero Industry Act. 

In the US, permits for transport and storage were denied. Recently, the Environmental Protection Agency (EPA) called on states to have their own regulatory frameworks for CCUS. This followed when policymakers questioned the agency’s limited permit issuances. 

In the private sector, oil majors aiming to be first movers in advancing carbon capture and storage turn to mergers and acquisitions. For instance, ExxonMobil acquired Denbury, a small-scale oil business running an extensive CO2 pipeline transport network across the Gulf Coast. 

In a similar move, Occidental Petroleum also bought Carbon Engineering, a Canadian Direct Air Capture (DAC) supplier for >$1 billion. 

Remarkably, the BNEF highlights that DAC is far more costly than previously thought. This carbon capture technology costs up to $1,100 per ton but can potentially drop to $400/ton by 2030. This decrease would be possible if the industry can develop enough supply chains to scale the technology. 

The cost of capturing carbon differs across industries. In facilities where CO2 concentration is high, the cost ranges from $20-$28 per ton while for industrial sources, it can go up to $80 a ton of CO2. 

Total costs for CCUS can increase to $92-$130 per ton of CO2, and it can swell 2-4x more for transporting liquid CO2. 

Industries like cement, iron and steel, and power, which emit a lot of CO2, are using carbon capture methods more. This is driven by the incentives provided by the government in the US and EU, making CCUS more practical. 

For instance, building new gas power plants with carbon capture may be less expensive than making power without capturing carbon in Germany by 2024, especially when factoring in carbon price. 

READ MORE: Carbon Capture to Urgently Scale to 7B Tonnes/Year 

The CCUS industry is experiencing rapid growth and diversification across sectors due to strong global policy support. Although promising, challenges such as transport and storage capacity constraints, high construction costs, and regulatory hurdles pose significant barriers. Addressing these challenges will be crucial for CCUS to play a substantial role in global emissions reduction.

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Decoding the Climate Giants: Top Carbon Emitters Race to Net Zero and Renewable Future

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With the worsening impacts of climate change, countries around the world are up to their heels to find solutions that can significantly reduce carbon emissions. 

The top three major emitters – China, United States, and India – are responsible for emitting over 50% of global carbon emissions. 

How Much CO2 Does Each Country Emit?

Burning too much fossil fuels intensifies the greenhouse effect, which is essential for keeping the Earth’s temperature suitable for life. This change is causing major shifts in the planet’s climate system that also led to worsening natural disasters. 

As this year’s UN climate summit, COP28, is approaching, it’s important to know how much each country contributes to global carbon footprint. The COP28 in Dubai also represents a great opportunity to assess the progress of countries toward achieving their climate goals.

As per the Global Carbon Atlas data, interpreted by Visual Capitalist, 52% of the world’s carbon dioxide emissions in 2021 was caused only by three countries: China, U.S. and India. Apart from contributing the most to global emissions, they also have the highest number of population. 

Source: Visual Capitalist

As shown above, China is the top carbon polluter (almost 31%) compared to the rest of the world (around 22%).

When it comes to carbon emissions per capita, the US tops the rank with around 15 (metric tons). China comes second with 7 Mt CO2 per capita while India has only around 2 Mt CO2. 

All these three top carbon emitters have pledged to cut their footprint and reach net zero emissions. But they don’t share the same net zero target.

China targets to achieve net zero by 2060 while India plans to reach it ten years later, by 2070. Only the US’ net zero target is in line with the Paris Agreement objective of hitting net zero by 2050. 

According to a World Bank Group Report, China needs as much as $17 trillion in investments to meet its net zero targets and transition to a low-carbon economy. This  particularly involves investments in the power and transport sectors for green technologies and infrastructure.

READ MORE: China’s Net Zero Pathway Needs $17 Trillion in Investments

As the biggest emitter focuses on economic growth, its carbon footprint will most likely hit an all-time high in 2023. Its CO2 emissions increased 4% in the Q1 this year, hitting a record high, according to the Carbon Brief report. 

Meanwhile, the US has seen a significant increase in clean energy investments, showing its commitment to decarbonization. The country has been pouring billions of dollars into clean technologies and infrastructure to lower its carbon footprint.

According to the Clean Investment Monitor database, clean energy is becoming one of the biggest industries in the U.S. In 2022, investments made in the sector reached a total of $213 billion.

Unlike China, India aims to hit net zero by 2070. To reach this, the third emitter will focus on the use of electric vehicles and achieve 3x more nuclear capacity by 2032. 

However, as India becomes more developed, its carbon emissions may also continue to grow more. According to the International Energy Agency (IEA), its share of global emissions would go up to 10% by 2030.

How Much Renewables Must Be Achieved by 2030?

The IEA also projected that to reach global net zero target, renewable energy capacity installed must be 3x more the current level by the decade’s end. 

As per the agency’s updated Net Zero Roadmap, renewables capacity should be at 11,000 GW by 2030. Reaching that capacity will achieve the largest emissions reductions.

READ MORE: IEA’s 2023 Net Zero Roadmap – Tripling Renewables

The major polluters have also set ambitious targets for increasing their renewables by 2030, focusing on solar and wind power generation. The UK and the EU also have done the same. 

Unfortunately, reports show that most of the countries are facing major hurdles to achieve their annual capacity targets.

Data from Visual Capitalist illustrates how each of the nations are progressing towards their 2030 renewables targets. The chart also shows how much they performed in 2022. 

Of the major carbon emission contributors, China is the only country on track to achieving its 2030 renewables goal. In fact, the top CO2 polluter exceeded its required renewable capacity for new installations, adding 168% more (101 GW).

In contrast, the US and India were the furthest off the track from reaching their 2022 targets. They were able to add only 46% and 57% of what is required, respectively. Other countries in Europe successfully made some progress but still have to add more installations to hit their 2030 goals. 

Together, China, US, India, EU, and the UK accounted for >60% of the world’s total electricity consumption. This underlines their big responsibility in decarbonizing the power sector.

As the global community grapples with the escalating impacts of climate change, attention turns to the top carbon emitters. The challenge extends beyond emissions, with hurdles evident in meeting renewable energy goals by 2030, emphasizing the critical role these major emitters play in the urgent shift toward greener and more sustainable practices.

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What Is COP28? Key Issues to Watch Out at 2023 Climate Summit

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After a record-breaking year of devastating effects of climate change, from record wildfires in Greece and Canada to floods in Libya, the United Nations COP28 conference comes at a decisive moment for international climate action to put us on a safer path.

Temperature records are being beaten and climate effects are felt worldwide. As climate scientist Zeke Hausfather described global temperature data for September, it’s “absolutely gobsmackingly bananas”.

Source: Zeke Hausfather

As seen in Hausfather’s chart, last month’s temperature beat the prior monthly record by over 0.5°C, and was around 1.8°C warmer than pre-industrial levels.

So, what is the world doing about it? How do national governments tackle the climate crisis? The UN COP28 summit will show humanity’s progress in meeting the climate goals first set at the landmark Paris Agreement. Representatives from around 200 countries will come together to talk about it and agree on crucial climate actions. 

In case you’ve never heard of COP28 or you most likely have if you’re following the climate change conversation but need a fresher, this comprehensive article will tell you the things you need to know about this defining climate summit. 

First, let’s talk about the COP.

What is COP? 

The Conference of the Parties to the Convention or COP is the product of the Rio Summit and the launch of the United Nations Framework Convention on Climate Change (UNFCCC). 

Every year since the creation of the COP, member countries meet to agree how to deal with climate change. Tens of thousands of delegates from around the world gather together at the climate conference. Head of states, government officials, and representatives from international organizations, private sector, civil society, nonprofits, and the media are attending. 

RELATED: Climate Change History & COP27: Here’s the Scoop

The COP’s 21st session led to the birth of the Paris Agreement, a global consensus to collectively achieve three important goals:

Limit global temperature rise to 1.5°C above pre-industrial levels by 2100,
Act upon climate change, adapt to its impact, and develop resilience, and
Align financing with a “pathway towards low greenhouse gas emissions and climate-resilient development”.

Here’s the COP in a timeline, alongside global carbon emissions record.

This year’s UN climate convention is the 28th session of the parties or simply COP28.

How Important is COP28?

So what makes this COP session significant and different from the previous climate talks? The Global Stocktake. 

The GST is the first ever report card on the world’s climate progress. It shows exactly how far we are in achieving the Paris Agreement goals set in 2015. Are we on or off track?   

Though the details won’t be in until COP28 takes place in November 30 – December 12 in  Dubai, United Arab Emirates (UAE), there’s a hunch that we need rapid climate actions and have to act now. COP28 is our chance to do that. 

Plus the fact that UAE is a major oil producing country makes COP28 quite different and controversial. Many are raising concerns that the agenda doesn’t match well with the host country’s plan to increase oil production. 

Some environmental groups noted that it could result in weak results leading to a point where curbing fossil fuels has to be ratcheted up rapidly to make the 1.5°C achievable. Their point is valid. About 100+ years ago, there was far less carbon released into the atmosphere than there is today.

The designation of Sultan al-Jaber as COP28 president-designate incited a furious backlash from climate activists and civil society groups. They warned that there could be a conflict of interest and that protesters would be restricted. 

Dr. Sultan al-Jaber is a managing director and CEO of the Abu Dhabi National Oil Company (ADNOC). As appointed president, he would lead the talks, consult with stakeholders, provide leadership roles, and broker any agreements produced. 

Given his position within the fossil fuel industry, it raised concerns about impartiality in the climate talks.

But putting aside these controversies, it’s more important to know what would be the specific talking points for this year’s climate summit. 

What Are the Focus Issues to Watch at COP28?

Similar to previous sessions, the host nation sets the tone and direction of discussion for the conference. For this year’s COP28, here are the major areas to be deliberated.

Money Matters

As the case with the rest of the COPs, climate finance is one of the key issues. More so, if the money involved is worth $100 billion annually which was pledged by developed nations to developing countries. 

Climate finance is critical because developing nations need resources, financial and technological, to enable them to adapt to climate change. 

It was back in 2009 when rich countries promised to provide $100 billion from 2020 onwards to help poor nations in dealing with the impacts of climate change. However, until now that pledge has never been met, stirring frustrations for many developing countries. 

The potential consequences of failing to meet the promised target in a timely manner could extend to the broader negotiations. It heavily affects the trustworthiness of governments to fulfill their commitments.

At COP28, governments will persist in their discussions on a fresh climate finance objective, aiming to supplant the existing $100 billion commitment. Though the deadline for reaching an agreement is 2024, substantial progress in Dubai remains pivotal to establishing a foundation for next year’s COP. 

Moreover, financial matters will prominently feature in talks on the Green Climate Fund and on loss and damage. 

Ultimately, deliberations and pledges related to the amplification and execution of climate finance may impact various other areas of negotiation. It may also help propel more climate actions or impede progress. 

Where’s the ‘Loss and Damage’ Fund?

The concept of ‘loss and damage’ compensation isn’t new; it has been around for some time. It’s an arrangement wherein rich nations should pay the poorer ones that have suffered the brunt of climate change. 

It differs from the funds to help poor nations adapt to the effects of climate change. While it gives hope for low-income countries heavily impacted by the climate-related disasters, it left several unanswered questions. 

Unsurprisingly, one big question is:

Who’s going to pay into the fund and who deserves to get it? 

This issue has been unresolved for some time and was also discussed in COP27 at Egypt last year. Different organizations have different suggestions as to how much the fund needed to pay for the loss and damage.

For one study, the funding can be as high as $580 billion each year by 2030, going up to $1.7 trillion by 2050. 

Matter experts noted that the fund has been the “underlying climate finance discussions for a long time”. But after years of stalemate, the question hasn’t been resolved still. 

Governments decided and agreed to form a ‘transitional committee’ at COP27. At COP28, they expect to come up with the recommendations on how to operationalize the fund. 

RELATED: Carbon Credits Take Center Stage at COP27

Putting Food on the Table

Leading up to COP28, there’s been growing attention on food systems and agriculture in global discussions.

The current food systems are failing us; over 800 million people face hunger right now. Climate-related droughts and floods are destroying farmers’ crops and livelihoods. At COP28, world leaders must devise a plan that changes the ways the world produces and consumes food.

The COP28 presidency and the UN Food Systems Coordination Hub launched the COP28 Food Systems and Agriculture Agenda in July. It urges nations to align their national food systems and agricultural policies with their climate plans. 

The agenda emphasizes the inclusion of targets for food system decarbonization in national biodiversity strategies and action plans.

Like the other issues above, food systems were also part of the COP27 summit. But there was also still some resistance to fully adopting a holistic approach to them. 

Sultan al-Jaber is encouraging both private and public sectors to contribute funds and technology to transform food systems and agriculture. He also emphasized that food systems contribute to a significant portion of human-generated emissions. In line with this, the UAE and the US team up to promote their Agriculture Innovation Mission for Climate (AIM4C).

The increased focus on food at COP28 has been well-received. The GST synthesis report even stresses the need to address interconnected challenges, including demand-side measures, land use changes, and deforestation. 

It’s important that actions to change food systems work together with efforts to speed up the transition to cleaner energy. Transformations in both sectors are crucial to meeting climate goals.

Moving Cities At the Front 

For many years, UN climate summits have historically concentrated solely on national-level climate action, overlooking a crucial aspect. 

Urban centers, responsible for around 70% of global CO2 emissions, face heightened vulnerability to climate change impacts, too. To restrict warming to 1.5C, all cities must achieve net zero emissions by 2050. 

Research indicates that existing technologies and policies can cut urban emissions by 90% by 2050. But cities alone can realize only 28% of this potential. 

Full decarbonization requires robust partnerships between local and national governments, along with engagement in international climate initiatives.

At COP28, it’s crucial for national, regional, and local governments to intensify partnerships, accelerating progress toward climate goals.

Moreover, national governments should also integrate urban areas more effectively into their climate plans. This includes reinforcing city-centric targets in their NDCs and National Adaptation Plans, expanding public transit, enhancing building energy efficiency, and ensuring that subnational actors have easy access to climate finance. 

COP28: The Deciding Moment for Climate Action 

Leaders at the national, corporate, and municipal levels must not only showcase progress in fulfilling previous commitments but also unveil new, ambitious plans. These plans are vital to curbing the worsening impacts of climate change, safeguarding both people and the environment.

The Global Stocktake was established to reach the objectives of the Paris Agreement. It also particularly highlighted the need to phase out unabated fossil fuels, which are the major culprit in releasing carbon. It will face its inaugural evaluation at COP28, presenting a crucial assessment of decision-makers’ commitment to its goal. 

READ MORE: Net Zero Pledges 2022 – Climate Targets are “Unacceptably Low”

The report card of the world’s collective climate action was out. And the data isn’t good. COP28 is our best chance to make a critical course correction. It isn’t just a conference; it’s a decisive moment for leaders to demonstrate commitment to curbing harmful emissions. 

The post What Is COP28? Key Issues to Watch Out at 2023 Climate Summit appeared first on Carbon Credits.

6 Carbon Credit Standards Approved Under CORSIA’s Phase 1 Updates

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CORSIA, managed by the International Civil Aviation Organization (ICAO), requires airlines to monitor and report their emissions, allowing them to purchase emission reduction units, also called carbon credits, if they exceed a set baseline. 

The program updates impact both airlines and the carbon market, signalling which credits are eligible and influencing future market purchases.

What Are the New CORSIA Updates?

Recently, CORSIA reviewed and approved six carbon credit standards for its first phase. These include Winrock International’s American Carbon Registry and Architecture for REDD+ Transactions, which were approved without exclusions. 

The Climate Action Reserve (CAR), Global Carbon Council (GCC), the Gold Standard, and Verra’s VCS program, were conditionally approved while CDM didn’t qualify for Phase I.

CORSIA allows credits from 2021 onwards with a corresponding adjustment to avoid double counting. This adjustment ensures that credits used for CORSIA don’t overlap with a country’s emission reduction goals under the Paris Agreement.

The mechanism ensures that the allocation of the credits represents real carbon reduction activity and sales, boosting carbon market integrity. 

The CORSIA’s Technical Advisory Body (TAB) recommendations from the review influence the market by increasing demand for approved credits. This doesn’t only cover the airlines but also signals other buyers to consider the credits “best-in-class”. 

This will affect credits currently available and the future ones, driving up demand in both cases. However, some high-quality credits endorsed by ICROA are not accepted under CORSIA, affecting their eligibility.

RELATED: What is CORSIA? All the Important Things You Must Know

Apart from the reassessment, the TAB will also assess any new applications for standards that hadn’t already been approved. The ICAO Council will officially take into account TAB’s recommendations this fall after assessing new credit standard applications.

How Should Airlines Take The Changes? 

For airlines preparing for CORSIA’s upcoming phases, it’s important to align their credit strategy with the TAB recommendations for compliance. They need to ensure they make CORSIA-compliant purchases before the true-up deadlines.

For the pilot phase (2021-2023), airlines don’t need to show compliance until January 31, 2025. For phase I (2024-2026), the deadline is January 31, 2028. To meet these deadlines, airlines should plan credit purchases well ahead to avoid any risks.

Due to CORSIA’s multi-year requirements, airlines might consider multi-year purchasing agreements to secure their credits. These agreements should align with both the pilot phase and phase I standards.

While some standards are conditionally approved for phase I, like VCS and Gold Standard, they’re likely to receive full approval.

It’s important to note that credits meeting post-2021 criteria are not yet available. Airlines can fulfill pilot phase purchasing requirements under the existing standards but need to wait for phase I eligible credits. Any long-term deals should consider these factors and specify the qualifying years.

To effectively implement a credit purchasing strategy, clear communication and internal education within airlines are crucial. Airlines should anticipate delays in the availability of Phase I credits, likely not until 2024 at the earliest. 

Additionally, CORSIA eligibility rules may increase demand and prices for these credits, so airlines should budget accordingly.

The ICAO estimated the costs from CORSIA offsetting for airline operators as shown in the following chart. This is under the assumption that carbon prices range from a low of $6 – $12 to a high of $20 – $40 per tonne of CO2.

What Are the Effects on Non-Airline Credit Buyers?

Airlines aren’t the only ones affected by CORSIA – the program also impacts those buying carbon credits beyond airlines. 

As airlines rush to buy these credits, the limited market will see growing demand, leading to higher prices. Non-airline buyers might also view TAB recommendations as a sign of credit quality, increasing demand for CORSIA-eligible credits and their prices.

For those using CORSIA-approved credits in their carbon strategy, it’s smart to watch these market changes. Adjusting budgets, keeping stakeholders informed, and buying credits well ahead of deadlines can help prepare for these shifts.

While some high-quality credits aren’t eligible under CORSIA, they might meet other standards like the ICVCM’s Core Carbon Principles. These principles are still new but more information will be available on this framework and how the CORSIA credits will be aligned under it. 

READ MORE: ICVCM’s New Framework: Raising the Bar for Carbon Credits

Balancing CORSIA-eligible credits with quality non-CORSIA ones (like Plan Vivo or Puro.earth credits) can help manage budget and availability issues caused by CORSIA. This mix allows better predictions of availability and less impact from price changes.

Stakeholders who value CORSIA credits might face increased demand and prices. To manage this, they might buy CORSIA credits being assessed by the ICVCM early. This way, they can avoid potential demand impacts caused by meeting the Core Carbon Principles’ criteria.

It’s important for credit buyers to discuss how they see CORSIA’s impact on credit quality with stakeholders.

Some might follow CORSIA’s lead strictly, so it’s wise to avoid buying CDM credits to match their preferences. Others might be more flexible, choosing more non-CORSIA credits to reduce risk when buying.

CORSIA’s latest review of carbon credit standards signifies a pivotal moment for airlines and non-airline buyers alike. Credit buyers should adapt their strategies to account for increased demand, pricing shifts, and explore a balanced mix of CORSIA-eligible and other high-quality credits to show commitment to real carbon reduction. 

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The Race to Sustainability: Formula 1’s Carbon Footprint and Net Zero Pledge

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Famous for its luxurious fun and glitz, Formula One, also called F1, has been notorious in single-seater motorsports. But as the conversation around climate change has intensified, Formula 1 is in the spotlight with concerns about its carbon footprint and what the sports company is doing to reduce it.

As Formula 1 goes to Las Vegas for the first time this Friday, more eyes are prying into the company’s sustainability efforts. 

How Much Does F1 Contribute to Global Warming?

Given how much carbon dioxide cars emit each year, it’s not surprising that F1 has been heavily scrutinized by environmentalists. 

So, how much carbon dioxide does the car racing company release to the atmosphere? 

According to F1’s 2019 sustainability report, when it first announced its 2030 net zero emissions target, the company emitted 256,551 tonnes of CO2. This carbon footprint is emitted by 10 teams, 20 car units, and 23 racing events in various locations. 

Interestingly, a very small amount of its total carbon emissions, less than 1%, came from the use of F1 cars. It refers to the emissions associated with the fuel usage of F1’s power units (racing cars). 

As seen above, the bulk of the footprint (45%) came from logistics or emissions from air, sea, and road transportation. This is the same with other popular sports where the majority of the pollution is from players and fans traveling. 

Similarly, up to 85% of emissions by professional sports events come from the travel and accommodation of fans.

RELATED: First NFL Team to Buy Carbon Credits

Another major contributor to F1’s emissions is the energy needed to power its race tracks, particularly for events at night. Add to this the emissions associated with car production and track maintenance, which have been increasing over the years. 

Formula 1’s environmental impact is undeniable. As F1 race cars’ engines burn massive amounts of fossil fuels, the company is keen to lower its emissions.   

To address its huge CO2 footprint, Formula 1 pledged to reach net zero emissions by 2030. The company also aims to make each race sustainable by 2025. 

What is F1 Doing to Hit Its Net Zero Destination?

Same as Formula 1, the International Automobile Federation (FIA) also aims to be net zero by 2030. But compared to F1, its carbon footprint of 18,910 tonnes of CO2e in 2019, is far way lesser. 

Still, motor car racing doesn’t bode well for the planet and the sport company knows this for sure. For years, F1 has been looking for ways to reduce its carbon emissions through using different means.

Ross Brawn, the company’s Managing Director of Motorsports, said that:

“As always, there is never one silver bullet to these challenges. There are a whole array of changes we have to make, from on the track to where we work.”

The company was able to reduce its footprint by 17% over the first 2 full years since 2019. Such reduction is achieved through a combination of various initiatives.

Use of sustainable fuels 

Formula 1 has successfully introduced E10 fuel, composed of 10% ethanol, to its power units, reducing total carbon emissions. With that, the sports company intends to run its cars on 100% sustainable fuels in partnership with Saudi Arabian Aramco and other major fuel companies. 

The new engine formula will be available by 2026. It’s a drop-in fuel as it is ready for use in the same formula in internal combustion engines (ICE). Formula 1 plans to partner with F2 and F3 to test the cleaner fuel. 

The sustainable fuels will use a carbon capture technology or municipal wastes to further reduce CO2 emissions. These alternative fuels can offer up to 96% carbon emission reductions.

READ MORE: Formula 1 is Going Net Zero

Use of renewable energy

F1 garnered the topnotch sustainability management accreditation awarded by the motorsport governing body FIA for using 100% renewable energy in its offices. 

Also under this means, the company turns to solar panels for powering up some venues. Other circuits are 100% renewable powered, too. 

Other sustainability measures

Standardizing cars using V6 engines: The V6 engines are much smaller, designed for fuel efficiency and promoting environmentally-friendly car motor racing. 
Single-use plastics
Incentives for fans to use greener ways to go to events
Re-using and recycling wastes in events
Recycling tires as fuel for cement manufacturing

The Race to Sustainability is On

Some F1 drivers are also contributing individually to the company’s sustainability and climate actions. For instance, world champ Sebastian Vettel has been opting out of air travel going to racing events. Instead, he drove to races to reduce his travel emissions. 

The professional motorsport company is also supporting carbon projects that generate carbon credits, including Rimba Raya Biodiversity Reserve in Indonesia and renewable energy generation projects in Zambia and India. However, the company didn’t disclose how much credits it’s buying from the projects to offset a part of its emissions.

Looking ahead, Formula 1 is planning to further improve logistics to the Grand Prix to cut the sport’s CO2 footprint. As the Las Vegas Grand Prix is around the corner, fans (and critics) are on the move to witness F1’s biggest best ever. 

F1 Las Vegas GP ticket prices are going down significantly. Friday prices dropped by 62% (from $825 to $312) while Saturday prices decreased 34% (from $1,645 to $1,087).

The sport’s sustainability efforts are promising, but they’re just the beginning of the race. With seven more years to go until 2030, Formula 1 is racing towards its net zero goal. 

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Manulife’s Forest Carbon Credit Fund Closes $224 Million

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Manulife Investment Management, the world’s largest manager of natural capital, overseeing almost $15 billion in assets involving timberland and agriculture, has revealed the initial close of its Forest Climate Fund or FCF. 

Manulife’s FCF, launched last year, is a strategy that involves producing carbon credits through natural carbon sequestration. It is a closed-end fund intended to provide U.S. investors and select institutional investors an opportunity to champion climate change mitigation through the stewardship of sustainably managed forests.

Around 70% of the fund will be invested in carbon projects.

The goal is to prioritize carbon sequestration over timber harvesting. Alongside its affiliated offshore entities, the fund has garnered commitments amounting to around $224.5 million. The fund aims to reach its targeted offering of $500 million. 

Generating High-Quality Carbon Credits

The strategy’s investment goal centers on enabling investors to engage in timberlands managed to produce high-quality carbon credits through enhanced sustainable forest management practices.

By increasing the amount of carbon stored in forests, the projects not only generate credits but also mitigate global warming. The strategy also includes establishment of new forests through afforestation or reforestation, generating high-quality credits while securing sustainable timber value. 

By leveraging carbon credits, conservation easements, and limited timber harvests, the fund aims to capture potential climate benefits while ensuring competitive financial returns for investors. 

The financial success of carbon projects like these hinges on future predictions of carbon prices. And estimations often show an optimistic outlook in this regard. 

Historically, forest carbon credits have faced notable pricing fluctuations, particularly within voluntary carbon markets, often characterized by relatively low prices. However, the scenario has been shifting due to the surge in net zero commitments made by both companies and investors. 

Forestry projects accounted for 30% of the total carbon offset credits issued by voluntary registries in 2022. These projects come in various types including improved forest management (IFM) and afforestation/reforestation.

According to an analysis by Haya et al. (2023), IFM projects have produced 193 million carbon offset credits since 2008. That amount accounts for 28% of the total credits from forest projects and 11% of all credits generated in voluntary markets.

Moreover, there’s also a growing perception of natural climate solutions as having high value. These factors contribute positively to the upward momentum in carbon pricing. 

RELATED: Carbon Pricing: Understanding The Economics and Trends of Fighting Climate Change

FCF and the Voluntary Carbon Market

Despite a number of investigations revealing the weakness of forest carbon sequestration, investors are still interested in natural climate solutions. In fact, projections show that carbon reductions initiatives involving forests and other natural environments will continue to expand. 

Highlighting their expertise and experience in sustainable forest management, Eric Cooperstrom noted that: 

“The Manulife Forest Climate Fund expands on our decades of sustainable timberland management experience and is one of the natural climate solutions we have developed to sequester carbon more intensively and drive broader impact.” 

Manulife plans to allocate the carbon credits to investors via direct in-kind transfers. This will allow them to use the credits to fulfill their individual climate objectives or potentially monetize them in voluntary carbon markets through offset sales to attain financial value.

Carbon offsets are sold through various exchanges, online marketplaces, and directly via carbon projects that reduce or remove emissions. 

Manulife’s current portfolio of sustainably managed forestry assets cover the U.S., Canada, Australia, New Zealand, and South America. Overall, it oversees around 5.5 million acres of timberland, with majority in the U.S., representing over 95% of improved forest management carbon credits issued and retired. 

Forestlands are one of the most valuable nature-based solutions to fight climate change. Climate investors find that protecting forests (REDD+) is important to win the fight against the climate crisis. 

Manulife’s Forest Climate Fund is a carbon-focused impact investment strategy. It’s the company’s first natural capital fund recognized under Article 9 of the European Commission’s Sustainable Finance Disclosure Regulation (SFDR). 

Natural capital strategies that produce carbon credits have expanded recently. But the way they distribute the credits differ. 

Stafford Capital Partners also launched its own forest carbon credit fund early this year, the Carbon Offset Opportunity Fund. The fund raised $242 million in investor commitments from three UK local government pensions schemes.

READ MORE: Stafford Capital’s Forest Carbon Credit Fund Secures $242M

By prioritizing carbon sequestration over timber harvesting, Manulife IM’s Forest Climate Fund exemplifies a commitment to carbon reduction and sustainable forest stewardship. Manulife’s innovative approach aims to generate high-quality carbon credits while ensuring both environmental impact and financial returns for investors, bolstering the fight against climate change.

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Manta Ray-Inspired Plane Could be the Next “SpaceX of Aviation”

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JetZero Inc., a pioneering aviation startup, is boldly redefining the blueprint of commercial passenger aircraft by introducing a revolutionary low carbon, triangle-shaped design, resembling an enormous manta ray soaring through the skies.

JetZero‘s groundbreaking aircraft departs from the century-old norm of elongated tubes with wings and tail stabilizers. Instead, it boasts a shorter fuselage with more width, contributing substantially to its lift capabilities. 

The elimination of the traditional tail is compensated by two engines mounted on the rear. This new design provides both power and stability to this innovative flying machine. 

Introducing JetZero’s Flying Manta Ray

The distinct advantages of JetZero’s design, Blended Wing, become apparent when considering its notable features. It shows no clear dividing line between the plane’s wings and fuselage. 

The aircraft’s triangular cabin accommodates three aisles, streamlining the boarding process and optimizing use of interior space. The aircraft also boasts a quieter fly, more stable flight, and a lighter overall structure. 

The Southern California company said that its blended wing design could transport up to 250 passengers, equivalent to the capacity of current widebody jets like Boeing’s 767, while consuming only half the fuel.

With its more aerodynamic shape, it reduces drag and increases lift, which further burns less fuel.  

This concept traces its roots back over a century when Germany’s Hugo Junkers conceptualized a flying wing. The designer recognized that traditional fuselages and tail fins don’t contribute to lift. Similar designs were explored during World War II but aviation industry leaders have been cautious in adopting such innovations.

Boeing and Airbus have explored futuristic designs embedding the cabin into the wings, but neither plans to implement it yet. JetZero, however, is willing to challenge the status quo. 

The startup aims to initiate test flights of one-eighth-scale prototype in December. Then it will develop a full-scale version within four years. 

JetZero’s innovation received a rejection from major airliners, saying that it’s not yet the right time for that. But the company believes that the time is now, with their CEO Tom O’Leary noting that they’re “happy to pave the way”. 

Clearing the Path to Zero

The airliner market has been getting used to having just Boeing and Airbus in its wings. Plus, changing how planes fly and how things work on the ground is both time-consuming and expensive. Some companies attempted doing so, including Brazil’s Embraer, China’s Comac C919, Russia’s Sukhoi Superjet, and Bombardier Inc. 

But they all failed. 

Still, the aviation industry has to change its old ways to reach net zero emissions by 2050. More so that the industry emits increasing amounts of carbon dioxide annually. In 2022, aviation is responsible for emitting about 900 million tons of CO2.

RELATED: The Race Among 6 Major Airlines to Net Zero Carbon Footprint

Without changing the course with today’s aircraft, aviation will release more CO2 than Germany, U.K., and South Korea combined by 2040, at 1.8 billion tons. 

JetZero aims to make the first move in changing that course with its Blended Wing aircraft. It can potentially cut planet-warming fuel consumption by half. It also reduces the cost barrier to entry for new propulsion technology, accelerating adoption while clearing the part to zero emissions. 

Source: JetZero website

The aviation company has formed partnerships to advance its mission of creating jets with low carbon emissions. It works with a renowned maker of B-2 bomber Northrop Grumman Corp. and Virgin Galactic’s WhiteKnightTwo. They will provide designing and constructing assistance in creating JetZero’s prototype.

Reshaping the Future of Flying

The startup’s ambitious initiative received a significant boost from the US Air Force with a commitment of $235 million. 

If the roadmap unfolds as planned, JetZero will engage with regulatory bodies to secure certification for a midsize airliner by the early 2030s. Its passenger plane may pave the way for versions fit for military cargo transport and aerial refueling. 

With that, Pentagon leaders find JetZero’s design concept to offer a potential to outpace China in technological advancements. Its low noise profile and extended range would be an advantage in future battles. Air Force Assistant Secretary Ravi Chaudhary emphasized the importance of supporting this innovation swiftly today.

Other aviation startups are also seeking to reshape commercial passenger jetliners to reduce emissions, including Archer Aviation and Joby Aviation. They are innovating small electric aircraft called “air taxis” that are in trials. 

Other industry players are promoting the use of hydrogen for low carbon emission and sustainable aviation like the case of ZeroAvia. While major airlines are supporting sustainable aviation fuel to slash the industry’s emissions.

READ MORE: ZeroAvia Raises $30 Million Funding to Scale Hydrogen Aviation

These innovative startups, including JetZero are facing a couple of challenges. These include limited government funding, unconvinced airlines and flyers, airport infrastructure’s conventional design, and changing passengers’ taste. 

But the California-based startup believes that once their jets are flying up in the air, people will change their minds. O’Leary particularly said that: 

“They need to see it at full scale, proving that there is this incredible reduction in fuel burn and emissions that can come from this airframe. To us, that’s everything.”

For one of JetZero’s investors and a strategic advisor, Build Collective, the triangle-shaped airplane is the “SpaceX of aviation”.

JetZero’s visionary approach underscores a commitment to reshape the future of air travel. It offers not just a novel design but a paradigm shift that could lead the aviation industry into a new era of efficiency, sustainability, and low carbon emissions.

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