BlueLayer has secured $10 million in funding to support carbon project developers worldwide in bringing high-quality carbon credits to market. 

The end-to-end software platform, operating in stealth mode since late 2022, raised the funds through seed and pre-seed investment rounds. The seed round is led by Point Nine, a prominent European B2B software-focused VC firm. 

With head office in Berlin and teams in London and Athens, BlueLayer aims to help carbon project developers manage their carbon credits at scale. The company will use the funds to expand its platform features to address the emerging and complex needs of developers. 

Targeting Quality Carbon Credits at Scale

The pathway towards Net Zero begins with companies with Science Based Targets and commitments. And thus, addressing their value chain emissions through decarbonization efforts is crucial. This is where BlueLayer’s mission comes into play. 

The European startup focuses on assisting developers involved in various carbon projects, such as reforestation, forest conservation, peatland restoration, direct air capture, and enhanced rock weathering. 

The platform aims to facilitate the connection between corporate leaders committed to Science Based Targets and project developers working on the ground to remove or avoid carbon emissions. 

Experts predict that carbon markets need to scale significantly, reaching at least 20% of current global emissions or around 10 gigatons by 2050, representing a 40x increase from their current size. 

McKinsey & Company projected an increase in global demand for voluntary carbon credits of up to 100x compared to 2020 levels, as seen below. BlueLayer seeks to contribute to this expansion by supporting developers in scaling carbon projects beyond value chain mitigation efforts.

On the demand side, buyers are willing to pay a premium for high-quality carbon credits, supported by reliable data. 

A report by Ecosystem Marketplace in December last year shows a revealing trend within the voluntary carbon market. It highlighted that despite their higher price, demand concentrates toward high-integrity and high-quality carbon credits. These credits often offer other benefits that go beyond curbing carbon emissions. 

READ MORE: Voluntary Carbon Credit Buyers Willing to Pay More For Quality

Transforming Carbon Project Development

To date, there are over 177 million carbon tonnes managed on BlueLayer’s platform.

The startup, co-founded by Vivian Bertseka, who has a decade-long background as a climate investor, has secured $10 million to address the challenges faced by carbon project developers. Highlighting the important role of their technology in raising quality of carbon credit market, Bertseka remarked that:

“BlueLayer empowers project developers to centralize and display data from different sources into one single set of information, which facilitates following well-established methodologies and understanding the requirements of rating agencies and standards…We also enable them to report and communicate their impact with ease, accuracy and detail.”

The team includes Alexander Argyros and Gerardo Bonilla who have experience in building global software businesses. They have identified the limitations project developers face in scaling high-quality projects due to inadequate resources and tools. 

BlueLayer is engaging with over 200 carbon project developers and ecosystem players. The company discovered that despite increased attention and billions of dollars of funding, developers still struggle with hefty manual processes. They are also relying on outdated systems like spreadsheets.

According to an industry report, project developers may even lose $2.6 billion by 2030 due to verification delays. This can also cost the VCM 4.8 gigatons of carbon credits.

READ MORE: Verification Delays Can Cost Carbon Project Developers $2.6B

Recognizing such challenges, BlueLayer developed an all-in-one platform tailored to support developers across the entire project lifecycle. This includes the pre-feasibility stage, credit issuance, inventory tracking, and order management. 

The platform caters to developers at all stages, while offering essential tools for project development, data management, and stakeholder communication. 

BlueLayer’s enterprise-grade software aims to unlock growth, enhance transparency, and improve carbon project quality. Moreover, it provides immediate value to customers by optimizing revenues, reducing time to market, managing portfolio complexity, and improving data accessibility and auditability. 

The company works with ecosystem leaders and seamlessly integrates with various third parties, including data providers and registries.

BlueLayer’s $10 million funding propels the European startup into the spotlight. With a mission to enhance carbon credit market quality, BlueLayer aims to revolutionize project development, contributing to the significant scaling of carbon markets predicted by experts.

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Companies wanting to offset their harmful emissions have used a type of carbon credit known as “cookstove credits” to compensate for their pollution. But a new study suggests that the clean cookstove projects may be overstating their impact by about 1,000%. 

The cookstove projects aim to address issues related to household air pollution and deforestation caused by traditional cooking methods. These projects are seen as a way to achieve UN sustainable development goals (SDGs) and have gained popularity. 

Within 6 months in 2023, a report showed cookstove projects issued the most new credits in the market, taking 15% of the total, while also registering the most new projects.

However, the study published in Nature Sustainability suggests that these projects are exaggerating their climate benefits. It reveals that 9 out of 10 of the 96 million certified cookstove credits don’t avoid the emissions they claim. 

Burning Questions: The Climate Impact of Cookstove Carbon Credits

Around 3.2 million premature deaths occur annually due to household air pollution, according to the Clean Cooking Alliance (CCA). Burning wood for cooking also contributes to about 2% of global greenhouse gas emissions.

The CCA, backed by governments including the Netherlands, Canada, and the United States, is working on an improved methodology for cookstove credits. The CCA aims to address the challenges associated with accurately measuring emissions reductions from cookstove projects. This is due to the complexity and resource-intensive nature of the task. 

The alliance believes that the carbon market can play a significant role in addressing this issue with carbon credits. 

Carbon credits represent one tonne of carbon emissions in theory. Companies buy them to offset their emissions, allowing them to neutralize their carbon footprint. These market instruments are facing increased scrutiny as concerns grow about the effectiveness of carbon offset schemes.

Cookstove credits, a type of carbon credit, have become one of the fastest-growing project types on the voluntary carbon market. These credits are issued when cleaner or less energy-intensive cookstoves are distributed to communities that traditionally rely on dirty fuels like wood or kerosene.

They typically cost much more than the other types of carbon credits available today, given the multiple SDGs they address. For instance, the carbon pricing from Gold Standard below shows that cookstove credits are priced higher than forestry credits. 

Monetary Value of Gold Standard Project Impacts/Ton of CO2 Emissions Reductions

As of May 2023, cookstove projects represented 1,213 out of the 7,933 project activities on the VCM. They also generated ~78.9 million total issued credits in the market.

Moreover, cookstove offset projects can progress several SDGs such as climate, energy, health, gender, poverty and deforestation. 

But the study, conducted by researchers at the University of California, Berkeley, challenges the projects’ claim. The researchers indicate that many offsetting schemes claiming to support “clean” cookstoves often fail to meet World Health Organization standards. 

Their results raise concerns about the accuracy of the claimed climate benefits of such projects. They’re calling for a closer examination of their impact on air quality, deforestation, and overall environmental and social benefits.

Carbon Cookout: The Environmental Benefits of Cookstove Projects

The research indicates that the rules allow projects to exaggerate stove usage and the resulting benefits for nearby forests. In turn, they significantly inflate the claimed benefits for climate and biodiversity, the study noted. 

Issued Cookstove Credits Across the VCM vs Study Sample

The above images map out the credits issued so far on the VCM across the five methodologies covered as of 9 November 2022 (top panel). The study sample (bottom panel) includes the 51 cookstove project activities. It covers the GS-TPDDTEC, GS-simplified, CDM-AMS-II-G, CDM-AMS-I-E and GS-metered. Source: Gill-Wiehl, A. et al. 2024

While acknowledging the issues, the researchers propose that reforms to the rules governing carbon credits could still make them a meaningful source of climate finance if properly implemented. They also offer a method for clean cookstove projects to avoid overstating their impact.

Some companies have reportedly adopted those practices during the paper’s peer-review process. 

The lead author of the study, Annelise Gill-Wiehl, highlighted the potential impact of over-crediting. She stated that it “replaces direct emission reduction and other more effective climate mitigation activities”. 

The study contributes to the ongoing scrutiny of the unregulated voluntary carbon market. Major concerns center on the generation of potentially questionable carbon offsets. 

RELATED: Is it the End of Nature Based Carbon Offsets?

Barbara Haya, the director of the Berkeley Carbon Trading Project and a co-author of the study, expressed hope that the recommendations provided could contribute to improving the quality of carbon credits.

Clearing the Air: The Controversy

In response to the study, an open letter from carbon project developers and researchers highlighted concerns about the research. They argued that the academics focused on larger cookstove projects, which usually issued more credits distributed than smaller initiatives. 

Carbon credit registries Verra and Gold Standard disputed the findings.

The Gold Standard, a major carbon credit certifier, has disputed the findings. Gold Standard stated that the study’s conclusions weren’t supported by the evidence and were at odds with wider academic literature. The researchers acknowledged that Gold Standard produced the best-quality method for producing offsets, with only a 1.5 times over-crediting. 

Verra, the world’s largest carbon standard, also expressed disappointment in the continued attention on the study. The certifier emphasized that the findings did not directly relate to its current methods. 

Verra is developing a new methodology for cookstoves that reflects best practices and includes measuring techniques to verify stove usage. 

The cookstove company ATEC, working with UC Berkeley to measure benefits more accurately, supported the research’s goal of ensuring accurate emission reductions.

The study challenging the accuracy of cookstove carbon credits raises critical concerns about the claimed climate benefits. The industry disputed the findings, but the call for improved regulations and accurate measurements remain to ensure transparency and effectiveness of carbon offset markets.

READ MORE: How to Find High-Quality Carbon Offsets

The post Up in Smoke? Study Questions Accuracy of Cookstove Carbon Credits appeared first on Carbon Credits.

Lithium, a vital elemental metal, also dubbed as “white gold”, has gained significant attention as a sought-after commodity. This is particularly due to its crucial role in battery manufacturing for electric vehicles (EVs). 

The surge in EV sales has fueled optimism among investors regarding companies involved in lithium production and refinement. Despite being a common substance, lithium prices experienced an astounding 1,000% increase from 2021 to the end of 2022. This exceeds the previous highs set in 2017.

However, the landscape changed in 2023.

An increasing supply of lithium from mines in Africa and Australia is putting downward pressure on prices. Plus, reports of lower consumer demand for EVs in the U.S. and China may further contribute to a decline in lithium prices.

Lithium Carbonate (CNY) Price

Source: Trading Economics

Following the unprecedented boom of 2021/2022, stocks of lithium producers have faced significant declines due to a continued plunge in lithium prices. 

As with all commodity stocks, lithium stocks are intricately tied to supply and demand dynamics in the underlying materials they deal with. The future trajectory of lithium prices and associated stock values will likely be influenced by the continued demand for EVs. 

Investing in top lithium stocks follows a similar process to investing in any other type of stock.

Here are our top picks for lithium stocks that are worth each penny of consideration. 

Albemarle Corporation (ALB)

Market cap: US$15.1 billion

Enterprise value: US$17.1 billion

Albemarle Corp. stands prominently among the largest lithium stocks and is a key player in lithium mining. With a market value comparable to other major commodities such as Barrick Gold Corporation (GOLD).

The company’s substantial scale and the optimistic long-term forecasts for EV demand position Albemarle as one of the top lithium stocks in the current market. Albemarle has embarked on a significant production expansion initiative in South Carolina, projecting an annual capacity of about 225,000 metric tons of lithium. 

The American lithium giant anticipates this capacity to triple by the 2030, aligning its growth plans and expectations for the growing EV sector. 

But recently, it redirected efforts towards its Kings Mountain lithium-spodumene mine resource in North Carolina, in response to softer market conditions.

Albemarle had warned of potential market share loss to Chinese producers after its unsuccessful takeover bid for Australian lithium producer Liontown Resources. The $4.2 billion merger was abandoned.

The largest producer of lithium for EV batteries has also revised its annual forecast downwards at the end of last year. They further reported a lower-than-expected quarterly profit due to declining prices for lithium. 

Still, Albemarle now anticipates a 30% increase in lithium sales volume for the year. But with prices expected to rise only 15%, falling short of market expectations for robust growth.

The reduction in demand from consumers has led major EV manufacturers like Tesla, Ford Motor, General Motors, and Rivian to scale back production. Additionally, Toyota Motor has cut its EV sales forecast by 40% in 2024 due to lower demand in China. This reduced demand is impacting the lithium market and related stocks.

Albemarle’s peers have experienced similar declines. For instance, shares of Sociedad Química y Minera de Chile S.A. are down -39.4% YTD. 

Sociedad Química y Minera S.A. (SQM)

Market cap: US$15.1 billion

Enterprise value: US$16.1 billion

Chile, globally recognized for its mineral wealth, features Sociedad Química y Minera de Chile (SQM) at the core of its mining industry. While SQM engages in the production of various minerals, its significance in lithium extraction is paramount. 

Alongside diversified mining counterparts like Albemarle and Ganfeng, SQM maintains robust double-digit operating profit margins, substantial cash reserves for expansion, and minimal debt.

In 2022, SQM achieved its highest-ever corporate revenues, surpassing $10.7 billion in sales. A substantial 76% of this revenue was derived from lithium and related products.

SQM’s pivotal role goes beyond its economic contributions, as it stands as the largest taxpayer in Chile. Recent discussions about the government potentially increasing its stake in the company have emerged and raised eyebrows. 

Such a move introduces the inherent risks associated with government ownership, including the possibility of political interference. Some investors don’t find it a favorable development.

The trajectory of SQM’s shares showed positive momentum until late 2022, when a decline followed. This is largely due to weakened lithium prices and concerns about the company receiving a fair valuation for the anticipated increased government stake.

The impending nationalization raises uncertainties about state control of lithium. Once this pushes through, it may impact SQM’s profitability. 

Looking forward to a long-term demand for lithium to exceed supply, SQM has strategically invested in expanding its production capacity. These developments position the company to augment its market share in the lithium supply chain, particularly for EV batteries. 

Li-FT Power (LIFT; LIFFF)

Market cap: US$168.5 million

Enterprise value: US$163.4 million

Given the insufficient domestic lithium reserves to meet demand, the U.S. is in a challenging position. With the need for a domestic supply, Canada is positioned to contribute to meeting U.S. lithium requirements. This is where a junior lithium company, Li-FT Power (LIFT: LIFFF), based in Vancouver, British Columbia, perfectly comes into the picture. 

Li-FT has acquired promising lithium assets in Canada, starting drilling on their flagship project in June last year. The company’s investment thesis revolves around the aggressive exploration and expansion of high-grade lithium pegmatites to define world-scale resources in a proven mining jurisdiction. 

The company’s strategy focuses on consolidating and advancing hard rock lithium pegmatite projects in Canada, particularly in known lithium districts. Li-FT Power aims to apply modern systematic exploration techniques to unveil value in these projects that historical work hasn’t fully realized.

The project portfolio includes assets in the Northwest Territories and Quebec, with flagship projects like the Yellowknife Lithium Project and the Pontax Project, which has revealed an 8km long lithium anomaly. 

The company is well-financed to progress its projects, cementing its commitment to advancing the exploration and development of high-quality lithium assets in Canada.

LIFT strategically positions itself to take advantage of weak industry sentiment, allowing for the acquisition of shares at discounted valuations. 

The Lithium Deficit Looms 

While those top lithium stocks are making waves in 2024, projections indicate that lithium prices will further decline due to: 

increasing supplies of the battery metal, and 
subdued demand from China. 

In China, lithium carbonate prices have plummeted from an all-time high of $81,360 per tonne in November 2022. This is the lowest level in two years at $20,782 per tonne in the current month. As lithium carbonate prices have fallen by 67% year-on-year, Chinese refining companies are responding by cutting production or suspending operations.

This represents a nearly 75% correction due to a series of negative catalysts that have suppressed lithium prices. The situation is even more challenging for lithium hydroxide markets, primarily due to the sluggish performance of the nickel cobalt manganese battery sector compared to the lithium iron phosphate battery sector.

Australia, which contributes 40% of global lithium production, expects a decline in the spot price of spodumene from around $3,840 per tonne in 2022 to $2,200 per tonne in 2025. 

Lithium miners are adjusting to the sharp drop in demand for EVs in China by reducing costs and scaling back production expansion plans. 

This response aligns with the challenges faced by lithium producers globally as the market grapples with oversupply and weakening demand for EVs.

The inability of China to meet its own demand for lithium, despite being the world’s 3rd-largest producer, has significant implications for other countries that rely on Chinese lithium. This is why the US aims to develop its own lithium supply chain that doesn’t depend on China.

RELATED: Lithium-Ion Wars: US Battery Imports Soar by 66%, Setting New Record as Domestic Production Ramps Up

The Inflation Reduction Act, in particular, specifically promotes onshoring of clean energy manufacturing, including EVs, within the U.S. And that also means to reduce or cut off import of lithium from China.

Corinne Blanchard, Deutsche Bank’s director of lithium and clean tech equity research, is among the analysts predicting a future shortage in the lithium industry. Despite forecasting supply growth, she believes that demand will outpace it at a much faster pace. 

Blanchard anticipates a “modest deficit” of around 40,000 to 60,000 tonnes of lithium carbonate equivalent by the end of 2025, but she foresees a much larger deficit of 768,000 tonnes by the end of 2030. This forecast aligns with the broader industry expectations of increasing demand for lithium, particularly driven by the growing EV market.

2024 unfolds with challenges for the lithium market, witnessing stock declines post 2023’s meteoric rise. Despite the setback, top players like Albemarle, SQM, and Li-FT Power strategically position themselves. As global trends hint at a Chinese lithium market decline, industry experts see a future lithium deficit, driven by the relentless growth in the EV market.

The post Top Lithium Stocks Making Waves in 2024 appeared first on Carbon Credits.

January 2024 has witnessed more retirements compared to the same month last year, and it is projected to exceed 2022 retirements, according to Viridios AI report, a voluntary carbon credit market pricing and data provider.

Viridios is a climate tech platform providing carbon credit prices, valuations and project data to boost voluntary carbon market transparency. 

Overall, trading in the Voluntary Carbon Market (VCM) was relatively light in the past week. 

Renewable energy credits (RECs), particularly from India, have experienced price increases, leading to a shift in demand from Chinese to Indian credits. In the native species removals market, activity is slow, but a premium is emerging for projects in this category.

However, the REDD+ segment is facing minimal activity, both in the market and over-the-counter, indicating subdued interest in this nature-based category. 

RELATED: Is REDD+ Dead? A Deep Dive into the Flaws and Recommendations for REDD+ Project Methodologies

Some sources indicate that political risks may not immediately impact pricing due to low credit supply. In contrast, others report current impacts on the Corresponding Adjustment market, with fluctuating premiums for cookstove credits. 

For instance, the Rwandan Cookstove project saw a significant jump from $5.85 to $14 for vintage 2021. Cambodia released its Article 6 operations manual, though not yet published, for a water purifier project and an improved cookstoves project.

Riding the Wave: January Retirements Soar

The projects in Viridios analysis come under three major categories: Pre-registration (Development, Review), Registered (Registered, Operational, Verified, Completed, Renewal, Paused), and Issuing.

As seen below, India has the most new projects in the pipeline while household devices got the most count. 

Per category, the REDD/REDD+ projects include efforts that avoid both planned and unplanned deforestation and degradation. Meanwhile, the ARR projects, which has the most count, involve various activities, including Afforestation, Reforestation, and Revegetation initiatives.

REDD+ Projects

ARR Projects

Most REDD+ projects, priced highest at $16.17, are in Brazil while ARR, with a $24.66 highest price, are most dominant in China. 

Technology projects (TECH) are related to Renewable Energy which include Biomass, Biofuels, Hydro, Solar, Wind, and Geothermal. While it has the largest number of projects, >7,500, its highest price at $7.11 is much lower than nature-based.

The report also provides insights on credit issuances and retirements in metric tonnes per month. The chart below shows a comprehensive view of cumulative credits issued by month over the past 3 years. Highest issuances are in December, both for 2022 and 2023. 

The same trend can be observed in terms of credit retirements. Most credits are retired in December for both years, with more than 150 metric tonnes. 

When it comes to issuances by recognized standards, Verra has the biggest share, followed by Gold Standard (GS). The same is true for the number of credits retired by standard. 

Revealing a Dynamic Carbon Credit Market 

For market activity, the majority of the credit volume based on quotations ranges from 0-50,000 credits. This trend applies to all weeks covered from November 2023 to January 2024 as shown below. 

Breaking down the market volume per category, Nature-Based versus Technology, the latter has the largest share. This could perhaps be due to the intensifying scrutiny over nature-based carbon credit offsets, which faced high-profile investigations last year. 

RELATED: Investments in Nature-based Solutions Need $674B a Year by 2050

On the other hand, carbon removal technologies (direct air capture) received great interest from investors and government support globally. 

Additionally, Viridios report also looked at the VCM activity by major registries, including Verra’s VCS, GS, ACR, CAR, and CDM. ACR refers to American Carbon Registry, CAR means Climate Action Reserve, and CDM stands for Clean Development Mechanism.

Weekly data reveal that VCS and ACR almost have the same footing when it comes to carbon credit volume. 

Lastly, the report presents a geographical analysis on volume by continental regions. The North American region snags the largest market volume per week, followed by Asia. Notably, in the recent week, the Asian region got the most volume with Africa coming second. 

In the opening month of 2024, Viridios AI’s insightful report reveals a dynamic carbon credit landscape marked by a significant upswing in retirements and a distinct shift towards Indian RECs. The analysis delves into various project categories, painting a vivid picture of the evolving trends shaping the voluntary carbon market.

READ MORE: Carbon Prices and Voluntary Carbon Markets Faced Major Declines in 2023, What’s Next for 2024?

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