Nikola’s HYLA Stations Are Supercharging the Hydrogen Revolution

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In a transformative move towards sustainable transportation, Alberta marks a significant milestone with the launch of its inaugural commercial hydrogen fueling station with Nikola Corporation’s HYLA brand. It marks a pivotal moment in the 5,000 Hydrogen Vehicle Challenge to get 5,000 hydrogen or dual-fuel hydrogen vehicles on Western Canada’s roads within 5 years.  

The project exemplifies the concerted efforts across the Edmonton region and beyond to propel the hydrogen economy forward. The Edmonton region is steadfastly embracing the hydrogen opportunity for Canada. This major initiative was made feasible through collaboration with key stakeholders, including Nikola Motor Canada, Alberta Motor Transport Association, Suncor, Leduc County, Emissions Reduction Alberta, and Blackjacks Roadhouse.

Alberta’s Hydrogen Leap

Amidst the urgent global imperative to reduce carbon emissions, the quest for innovative alternative energy sources has intensified. Among these alternatives, hydrogen emerges as a promising solution, particularly in offering a cleaner option for the transportation industry.

And Nikola’s refueling station – its HYLA brand – has been spreading in the region to support the hydrogen revolution. 

Situated along Highway 2 in Leduc County, Alberta, Nikola’s HYLA fueling station strategically positions itself along a vital transportation corridor. It links Alberta’s two largest urban centers—the Edmonton region and Calgary. 

Positioned amidst about 96,000 passing vehicles daily, this station will significantly contribute to decarbonizing one of Western Canada’s busiest highways. It will also aid in meeting the fueling requirements of Nikola hydrogen fuel cell electric vehicles (FCEV) destined for the Canadian market.

RELATED: Roadway Revolution: Nikola Accelerates Hydrogen Truck Production

At the core of the 5,000 Hydrogen Vehicle Challenge is the objective to deploy 5,000 hydrogen-powered or dual-fuel-hydrogen vehicles on Western Canada’s roads by 2028. Investments in fueling infrastructure and supporting technology are pivotal to realizing this goal. The funding will help attain the critical mass of vehicles necessary to transition the transportation sector to hydrogen sustainably.

Using a 700-bar pressure-fill system, the HYLA modular fueler compresses hydrogen fuel supplied by Suncor into smaller volumes. This setup helps facilitate its dispensation into onboard storage for long-range vehicles such as trucks, buses, and cars. 

As demand for hydrogen surges, the aim is to replace the modular fueler with a permanent facility and expand the HYLA fueling network across Alberta.

Brian Jean, Minister of Energy and Minerals highlighted the role of hydrogen in the fight against climate change, noting that:

“Hydrogen is the next step in our commitment to reducing emissions… This fueling station will kickstart the build-out of hydrogen fueling infrastructure in Alberta and support the development of a hydrogen economy in this region.” 

Nikola’s HYLA: Redefining Hydrogen Infrastructure

Nikola Corporation is renowned for its production of fuel cell and battery electric semi-trucks. It has inaugurated the first of its HYLA refueling stations in California where the company received a total of $58.2 million in grant support last year. 

RELEVANT: Nikola Wins $58M Total Grant for Hydrogen Stations

The HYLA concept aims to swiftly deploy temporary refueling stations in targeted areas, streamlining the permitting and construction processes. These stations serve as a pivotal solution, particularly in regions where there’s a surge in demand for zero-emission trucks.

Unlike battery-powered trucks, hydrogen fueling stations require more complex infrastructure and logistics. To address this, the HYLA refueling station is designed as a makeshift setup, comprising large liquid hydrogen tanks on trailers capable of storing over 800 kilograms of hydrogen each.

Filling up at the station takes about 20 minutes, facilitated by technicians managing the process. Despite some challenges such as noise and hydrogen loss during pumping, Nikola aims to scale up operations to accommodate 50-70 trucks daily, necessitating daily deliveries of liquid hydrogen.

Although the current station is temporary, Nikola plans to enhance it into a permanent facility for a broader hydrogen rollout. The company’s ambitious goal includes establishing nine stations in California by the end of Q2 and 14 by the year’s end.

Accelerating Hydrogen Adoption Globally

Apart from Nikola, other companies are also ramping up hydrogen production and infrastructure. In other parts of Canada, AtkinsRealis has secured the engineering contract for the Projet Mauricie green hydrogen hub in Quebec. This deal is a significant milestone for the $4-billion initiative led by TESCanada H2 Inc.

Project Mauricie aims to establish a “green hydrogen” production plant in the Mauricie region of Quebec, strategically located between Montreal and Quebec City. Notably, the plant will be powered entirely by renewable electricity. 

Once operational, the Mauricie project could produce up to 70,000 tonnes per year of green hydrogen. As such, it could be one of the Canadian largest clean hydrogen projects and a significant contributor to decarbonization initiatives.

Green hydrogen, characterized by its low-carbon footprint, holds promise as a clean energy source capable of driving decarbonization efforts across sectors.

Over in China, Sinopec’s green hydrogen plant in Xinjiang has ramped up its utilization rates to 50%. It’s touted as the world’s largest, marking a significant improvement from previous challenges encountered late last year.

Located in Kuqa, the facility can produce 20,000 tons of hydrogen annually from renewable energy sources. It serves as a crucial test case for large-scale production of carbon-free hydrogen, a fuel with immense potential. To achieve full capacity, the plant awaits completion of upgrade works at an oil refinery that will use the gas.

Global green hydrogen output would experience a substantial surge, climbing from around 100,000 tons in the previous year to an estimated 51.2 million tons by 2030, as per data from BloombergNEF. The analyst also expects green hydrogen to be cheaper by 2030, even those with cheap gas (e.g. US) and those with pricy renewable power (like Japan and South Korea)as shown below.

With Nikola’s HYLA refueling stations leading the charge, Alberta paves the way for greener roads and underscores its commitment to reducing carbon emissions. As other projects across Canada and globally follow suit, the hydrogen revolution promises a cleaner, sustainable future.

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

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How Will Canada’s Carbon Price Increase Affect You?

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Canada’s carbon price increase officially goes into effect today (April 1st 2024). A “cornerstone policy” of Prime Minister Justin Trudeau’s minority Liberal government, its also wrapped up in a controversy with provincial leaders across the country calling for a halt over affordability concerns.

The increase will be a hard hit at the gas station and on energy bills in provinces and territories where the federal backstop plan applies. 

Starting today, a litre of gasoline will cost an extra 3.3 cents across Canada. A recent study on the carbon tax fuel costs for Canada’s top five vehicles showed that the federal carbon price between now and 2030 will have a significant impact on gasoline prices – that these higher carbon taxes could make prices jump as much as 350% !

Source:Canadian Energy Centre

What Else Will Today’s Increase Adversely Affect?

While it’s April Fools’ Day, things won’t be so funny for Canadians and their wallets. In an ironically cruel hoax, several things are going to cost Canadians more than every.

Beer and alcohol: everyone’s favorite wine, beer and spirit will see the federal excise tax rise two per cent on April 1st with a max cap at two per cent through 2026.
Food, clothing and other consumer goods: indirectly, or directly the new higher costs of carbon pricing will increase the basic cost of manufacturing goods and services, and companies that make your favorite brands will need to keep pace. On average, expect food and consumer goods to see bumps of 0.5 to 2% across the country.
Electricity and power: natural gas, propane and other home operating fuels will see the carbon price increase add upwards of 3 to 5% per cubic meter of natural gas, and 2 to 3% for propane. The increases will also have major implications for Canada’s electricity sector and for jurisdictions that rely heavily on emitting forms of electricity.

Where Does The Carbon Tax Apply In Canada?

As of April 1st, 2024, the carbon tax applies to residents in Alberta, Saskatchewan, Manitoba, Ontario, Newfoundland and Labrador, New Brunswick, Nova Scotia, Prince Edward Island, Yukon and the Nunavut. And British Columbia, Quebec and the Northwest Territories have their own carbon-pricing mechanisms in line with federal standards.

Provinces and territories did have the option to adopt the federal pricing system voluntarily. For jurisdictions that didn’t price carbon or don’t have a similar system in place that meets the minimum national stringency standards, they were subject to the federal pricing system.

RELATED: Canada Faces 2 Carbon Issues: Shaky Carbon Tax and Missed Emissions Goal

Provincial Leaders Speak Out Against Increases 

While the government aims to strike a balance between environmental sustainability and economic affordability, there are is a group of provinces that have demanded the carbon price increase be paused including Alberta, Saskatchewan, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.

And many local leaders are calling on Prime Minister Trudeau to call an emergency meeting of leaders from across the country to further discuss potential alternatives to the federal carbon price increases.

Premier Andrew Furey, of Liberal Newfoundland and Labrador, voiced concerns on the behalf of Canadians and their mounting fears of financial strain on households. Still, Trudeau’s administration remains steadfast, emphasizing the role of carbon pricing in incentivizing emission reduction. It also serves as a signal to investors on the importance of transitioning to a low-carbon economy. 

Read More: Canada’s $5 Billion Carbon Pricing Revenue Sparks Debate

The government’s commitment to addressing climate change is evident in its long-term vision, which includes steadily increasing the carbon price to achieve emission reduction targets.

The current carbon pricing stands at C$65 per tonne, slated to rise to C$80 per tonne on April 1. Then it will increase annually thereafter by C$15 until reaching C$170 per tonne by 2030. Price in Canadian dollars. 

Source: RBN Energy LLC website

Will The Rebate Help Soften the Blow?

The Canadian government is offering the Canada Carbon Rebate, formerly known as the climate action incentive payment, to eligible Canadians impacted by the federal carbon price. This rebate aims to mitigate the financial burden and ensure that the transition to a low-carbon economy is fair.

Approximately 80% of Canadians receive more from the rebates than they pay in carbon pricing, according to the government’s data. 

To receive a rebate, Canadians will need to file an income tax return and payments will come every three months with the first one scheduled to arrive as early as April 15th. Listed below are the rebate amounts most Canadians can expect to receive quarterly:

Single Adult Person:
$225 in Alberta
$150 in Manitoba
$140 in Ontario
$188 in Saskatchewan
$95 in New Brunswick
$103 in Nova Scotia
$110 in Prince Edward Island
$149 in Newfoundland and Labrador

Family of Four or More:
$450 in Alberta
$300 in Manitoba
$280 in Ontario
$376 in Saskatchewan
$190 in New Brunswick
$206 in Nova Scotia
$220 in Prince Edward Island
$298 in Newfoundland and Labrador

While research studies have shown that carbon taxes can play a role in reducing emissions, this increase is just another burden Canadians will deal with in the coming years. This along with unrealistic home ownership costs, rising inflation, sky rocketing interest rates and an economy that can be reasonably described, as stagnant. Oh! Canada.

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Cathay Pacific’s Net Zero Flight Plan: 12% Reduction Target by 2030

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Cathay Pacific has reaffirmed its commitment to environmental sustainability by setting a new target to reduce carbon intensity by 12% from the 2019 level by 2030. This ambitious goal aligns with the airline’s ultimate climate goal of achieving net zero carbon emissions by 2050.

What is Sustainable Aviation Fuel?

Central to achieving this target is the accelerated adoption of Sustainable Aviation Fuel (SAF). Cathay aims to scale up SAF usage across all aspects of its operations, including employee duty travel. 

SAF is a clean alternative to fossil jet fuel that is produced from sustainable and renewable sources. These include agricultural residue, waste oils, municipal solid waste, industrial waste gases, or other non-fossil carbon sources. 

This cleaner fuel has the potential to reduce lifecycle carbon emissions by over 80% based on the total carbon output created from every stage of production, distribution and usage. Starting from 2024, Cathay will use SAF to offset 10% of the carbon emissions from employee duty travel on its flights. This initiative builds upon Cathay’s existing efforts, such as its voluntary carbon offset program, Fly Greener, which has been offsetting all emissions from employee duty travel since 2007.

Carbon offsets represent a certain amount of compensated carbon emissions generated from the flights. Each offset, also known as carbon credit, is equivalent to a tonne of carbon emissions. 

Since 2007, Cathay has been offsetting all emissions from employee duty travel on flights with the airline using carbon credits through Fly Greener. This initiative is in line with its pioneering position in accelerating the development and deployment of SAF in the region. And more importantly, contributing to its broader goal of reaching 10% SAF usage by 2030. 

The airline is using SAF via the following process:

Through SAF, Cathay aims to play a significant role in accelerating the development and deployment of sustainable aviation solutions in the region while thriving to achieve its net zero targets. 

Cathay Pacific’s Flight to Net Zero

Cathay Group generated over 5 million tonnes of CO2 in 2022, down 11% from 2021, per its latest Sustainability Report.

The new target focuses on improving carbon intensity by reducing carbon emissions from Cathay’s jet fuel use per revenue tonne kilometer (RTK) from 761 gCO2/RTK to 670 gCO2/RTK. To achieve this, Cathay plans to introduce more than 70 new passenger and freighter aircraft. These units are expected to be up to 25% more fuel-efficient compared to previous generations.

As seen in the chart below, Cathay was able to drive down its emissions since the onset of the COVID-19 pandemic. The trend continues for three consecutive years and the airline plans to further cutting down emissions. 

Cathay Pacific is one of the first Asian airlines to commit to achieving net zero carbon emissions by 2050. The company is using various means to get there, including:

With the use of Sustainable Aviation Fuel, 
Investing in new technology and fuel-efficient aircraft, and
Using carbon offsets.

Investing in Sustainable Aviation Fuel: 

Cathay Pacific is actively increasing its use of SAF to make it a mainstream option in aviation. As a pioneer in this area, Cathay Pacific became the first airline investor in Fulcrum BioEnergy in 2014. This partnership aims to convert household waste into SAF. The Group has committed to purchasing 1.1 million tonnes of SAF over the next decade, covering around 2% of its total fuel requirements starting from 2023.

Emissions Reduction through Efficiency Enhancements:

This includes transitioning to a new fleet of fuel-efficient aircraft and implementing practices to minimize engine use on the ground. Moreover, the Group commits to reducing ground emissions by 32% from the 2018 baseline by the end of 2030. 

Offsetting Carbon Emissions: 

Through its carbon offset program, Fly Greener, Cathay Pacific provides passengers with the opportunity to offset the CO2 emissions generated by their flights. Contributions made through this program directly support Gold Standard-accredited third-party projects focused on actively reducing emissions. Since its inception in 2007, the program has offset over 300,000 tonnes of carbon emissions.

Cathay’s Sky-High Commitment to Climate Action

Cathay Pacific’s CEO Ronald Lam emphasized the airline’s commitment to further enhancing its climate performance, saying that:

“…we are determined to improve our climate performance even further via accelerating the use of sustainable aviation fuel (SAF), modernising our fleet and driving operational improvements. This new carbon intensity target will provide necessary drive for actions in the immediate future towards achieving our long-term goals.”

As one of the pioneers in Asia to set a target of 10% SAF for its total fuel consumption by 2030, Cathay Pacific acknowledges the challenges involved in transitioning to more sustainable energy sources in aviation. 

The airline has taken proactive steps to forge strategic partnerships with like-minded organizations and stakeholders across the SAF value chain. This includes initiatives such as Asia’s first major Corporate SAF Programme, enabling corporate customers to leverage SAF to reduce their aviation-related emissions. 

Cathay also played a key role in establishing the Hong Kong Sustainable Aviation Fuel Coalition earlier this year.

Cathay Pacific’s ambitious commitment to reducing emissions is crucial for its ultimate goal of achieving net zero by 2050. With strategic partnerships and a dedication to operational improvements, Cathay is setting a high standard for the industry.

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Uranium Prices Take a Dip at $89 Per Pound

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Uranium prices have experienced a decline to $89 per pound, marking the 6th consecutive week of decreases since reaching a 16-year high of $106 in early February. This drop comes as market participants continue to evaluate the evolving dynamics following the recent surge in prices. 

RELEVANT: Uranium Prices at 16-Year Highs, Breaking $100 Per Pound

Uranium’s Rollercoaster: From Heights to Pullbacks

Uranium, a dense metal found in most rocks, primarily serves as fuel in nuclear power plants. The standard contract unit for uranium is 250 pounds of U3O8 and is traded on the New York Mercantile Exchange. Key uranium-producing countries include Kazakhstan, Canada, and Australia.

Following a strong bullish trend that propelled uranium prices to levels unseen since the Fukushima disaster in 2011, the metal has encountered a 22% pullback over the past six weeks. 

Chart from Numerco

The elevated U3O8 prices have led utilities to abstain from spot market purchases, instead relying on previously established long-term contracts. Moreover, speculative physical uranium holders have capitalized on the recent rally to secure profits. 

Additionally, the anticipation of a sustained increase in demand, signaled by major economies, has prompted mines to resume uranium projects in US mountain states, further contributing to the moderation of prices.

Despite the decrease in futures trading prices to $88.50 per pound in New York, current prices still surpass last year’s average. This resilience in the market reflects ongoing bullish sentiment towards uranium. 

Source: Trading Economics

The uranium prices reported by Trading Economics are based on over-the-counter (OTC) and contract-for-difference (CFD) financial instruments. 

Despite this correction, analysts and experts remain optimistic about the long-term prospects of nuclear fuel. Industry insiders suggest that the market has likely established a new baseline, supported by robust demand forecasts and supply constraints.

Jonathan Hinze, president of the nuclear industry research firm UxC, expressed confidence in uranium’s fundamentals, stating, “We have reached a bottom”. 

He emphasized the enduring demand for uranium and noted that supply has yet to catch up with this demand.

Recent global annual production of uranium has ranged from 55,000 – 65,000 tons of uranium metal, roughly matching fuel demand, according to the International Atomic Energy Agency. As per the Nuclear Energy Agency, an estimated 60,000 tons of uranium are required annually to fuel the world’s 436 operating nuclear reactors.

Uranium Market Resilience and Geopolitical Complexities

In recent developments, Kazatomprom, the world’s leading uranium producer responsible for 40% of U3O8 supply, refrained from announcing further production downgrades in its latest earnings report. However, the company continues to caution about limited sulphuric acid supplies, which could pose additional challenges in meeting its guidance.

Projections from major producers like Cameco indicate impending supply deficits in the uranium market. The International Energy Agency forecasts a demand of 200 million pounds by 2040, while Kazatomprom predicts a global shortfall of 21 million pounds by 2030, rising to 147 million pounds by 2040.

According to the World Nuclear Associations data as shown in the chart below, demand would continuously increase by 2040 while supply would be limited. This leaves a huge gap between the metal’s supply and demand requirements worldwide by that period.

Chart from IRIS France website

Geopolitical factors add complexity to the supply outlook. For instance, the U.S. is considering a bill to ban imports of enriched Russian uranium, which is currently under review in the Senate.

Given the increasingly uncertain future of nuclear fuel, countries worldwide are moving to secure their power generation supply. 

Sweden’s Climate Minister Romina Pourmokhtari has announced plans to lift the uranium mining ban as early as May. This is a good development for the EU market, as Sweden holds 80% of the EU’s uranium deposits.

Meanwhile, the Australian Chamber of Commerce and Industry (CCI) has urged the state government to reconsider the uranium ban. According to The West Australian, the CCI’s analysis suggests that uranium mining could generate over $650 million in exports and create 9,000 jobs.

Despite holding around one-third of global uranium resources, BHP’s Olympic Dam remains Australia’s sole active nuclear fuel producer.

As uranium prices experience a notable decline, the market witnesses a shift from recent highs, prompting a reassessment of supply-demand dynamics and geopolitical factors. Despite the pullback, optimism persists in the industry, fueled by projections of impending supply deficits and increasing global interest in nuclear power as a climate change solution. 

READ MORE: No Net Zero Without Uranium: Here’s Why

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Lithium Prices and The Insights into the EV Market’s Pulse

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As the electric vehicle (EV) market evolves, understanding the dynamics of lithium becomes important. With shifting consumer preferences, changing regulations, and fluctuating prices, this article highlights the trends and targets significantly impacting the industry. 

The EV Landscape: PHEVs, BEVs, and Regulatory Adjustments

Plug-in electric vehicles (PEVs) are vehicles that use rechargeable batteries as their primary source of power and can be charged by plugging into an electrical outlet or charging station. PEVs offer reduced emissions compared to traditional internal combustion engine (ICE) vehicles and can contribute to lowering dependence on fossil fuels.

PEVs include both plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs), as both types are rechargeable using external electricity sources. 

In response to slowing income growth, reduced government subsidies, and ongoing concerns about limited charging infrastructure in certain regions, consumers and automakers are increasingly turning to PHEVs as a more affordable interim solution on the path toward full electrification.

RELATED: New Monthly EV Sales Record to Kickstart 2024

In China, the share of BEVs within the PEV market decreased by 10% points to 57.0% in February compared to the same period last year. This declining trend is also evident in the United States and Germany, according to S&P Global Commodity Insights report. 

Both the United States and the European Union (EU) are adjusting their PEV targets in response to industry feedback.

Chart from S&P Global Commodity Insights

The Biden administration’s final tailpipe rule, which sets ambitious targets for BEV penetration, has been revised lower compared to the initial proposal. The finalized rule places greater emphasis on the role of PHEVs, aiming for BEVs to represent 56% of new car sales by 2032. PHEVs account for a 13% share, resulting in a total PEV share of 69%.

Similarly, the EU is undergoing the legislative process to enact its Euro 7 vehicle emissions rule. Following resistance from automakers and member states, the EU has adjusted its approach to BEV adoption in the short term. Still, the bloc continues to push for its long-term goal of phasing out new ICE vehicles by 2035.

Since 2014 until 2023, BEVs got the most sales globally as per EV Volumes tracking report, as illustrated below.

As subsidies for PEVs diminish, the momentum of PEV sales will depend on factors such as consumer income, vehicle pricing, model selection, performance, and regulatory pressures on emissions reduction from manufacturers. 

Looser emissions standards may slow the adoption of BEVs in favor of PHEVs, which utilize smaller batteries and fewer metals.

Lithium: Gearing Up the World of EVs 

What powers each of these electric vehicles is a critical mineral they call the “white gold” or lithium. It’s one of the key materials used to make batteries for EVs. 

RELATED: Lithium: The White Gold Powering up the EV Revolution

Per S&P Global report, lithium prices experienced a slight increase in March. This is driven by various factors including production cuts, auction results, and improved sentiment regarding demand for traction batteries.  

Prices rose by 5.1% and 2.1%, respectively, for lithium carbonate CIF Asia and delivered duty-paid basis, during the month up to March 22.

Some lithium producers have resumed auctions to ascertain a perceived “true” price for their products. While the spodumene price has been climbing since February, it remains deep in the cost curve despite numerous production cuts. 

The lithium carbonate CIF Asia price ranged between $13,500/ton and $15,000/ton up to March 21. That’s more than double the range observed from April to December 2020, which was between $6,300/ton and $7,250/ton, as shown above. 

Many lithium producers have highlighted in their fourth-quarter 2023 earnings calls the challenge of accurately forecasting the price they will receive for their lithium products. The world’s largest lithium producer, Albemarle, shifted its investment strategy in response to evolving market conditions. 

READ MORE: Albemarle Shifts Focus in Lithium Strategy Amid Market Softening

Notably, lithium auction price suggests that lithium prices are expected to rise by the end of the year. Albemarle is planning a series of upcoming auctions, starting with 10,000 metric tons of spodumene. 

Lithium prices have stabilized since the beginning of 2024 and are now higher than the bottom of the previous cycle. This reflects the current higher cost structure. 

What Lies Ahead for Lithium?

Lithium prices have fallen to levels not seen in over 2 years. While supply cuts suggest an upward trajectory for prices, the extent of the price recovery has been relatively modest thus far, particularly for lithium, despite recent production cuts. 

RELATED: Lithium Producers Adapt to Price Plummet, Cut Costs and Delay Investments

Prices in April may receive further support if stronger March sales and traction battery production data confirm optimistic demand trends.

Investors continue to show interest in lithium projects, despite short-term challenges, recognizing the long-term potential they offer. 

On average, it takes almost 17 years for lithium projects to progress from discovery to commissioning, based on recent updates on mine lead times. This underscores the long-term perspective required for investors in the lithium sector, despite short-term fluctuations in prices and demand.

At the back of all these, the current low-price environment allows for a focus on efficiency and the elimination of high-cost production. Positioning the market for an eventual increase in demand and prices.

Navigating the electric vehicle landscape requires a complete understanding of trends, targets, and lithium prices. As the industry evolves, stakeholders must remain agile, leveraging insights to drive sustainable growth and innovation in the transition to electrification.

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Chile Unveils Latest Business Model to Double Lithium Production

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Chile is the world’s second largest lithium producer accounting for nearly one quarter of global lithium production. As per the latest reports, the country is leveraging a multi-faced approach to maximize its lithium production capacity and ensure sustainable growth catering to the dynamic market demands.

Chile’s business plan has been confirmed by Finance Minister Mario Marcel who said,

“Chile will use three different business models to expand its lithium production that it estimates could increase by 70pc by 2030 and 100pc over the next decade”

Moving on, let’s explore and understand the newly launched business model.

Unravelling Chile’s 3-Way Business Model to Ramp Up Lithium Production 

According to US Geological Survey data, Chile’s estimated lithium output was 234,000 T of lithium carbonate equivalent (LCE) in the last year. The government plans to ramp up lithium supply to 70% by 2030 with 100% projected growth.

Here’s a breakdown of the 3-way business model:

1. Public-Private Alliances in Strategic Salt Lakes

Chile will establish public-private alliances in two salt lakes deemed strategic: Atacama in the Antofagasta region and Maricunga in the Atacama region. In these alliances, the state will hold a majority share.

2. Promotion of Public-Private Alliances in Other Salt Lakes

Five additional salt lakes, including Alto Andino and Pedernales, will also see public-private alliances. The state will seek the “best agreement” with private partners, either as a majority or minority participant.

3. Private Sector Leadership in 26 Salt Lakes

In 26 other salt lakes, the private sector will take the lead in development. While associations with state companies are possible, they won’t be mandatory.

Consequently, private investors will express interest in these salt lakes through Requests for Information (RFI) in April 2024 and the results will be announced in July.

The selected application will acquire special lithium operating contracts (CEOL). Notably, around 38 salt lakes will be designated as protected areas, adhering to Chile’s commitments under the Convention of Biological Diversity.

Nicolas Grau economy minister, Chile has further commented,

“During this government, we will sign a group of CEOLs in which the private sector will lead production in which the state will not be a major partner,” 

Picture: The Lithium Triangle comprising Chile, Argentina, and Bolivia

source: US Geological Survey

Chile acknowledges the significance of empowering local businesses and communities to engage in the lithium value chain actively. Small and medium-sized enterprises (SMEs) are encouraged to participate in exploration, extraction, and value-added processes, promoting economic diversification and regional growth.

Moreover, programs focused on skills enhancement, technology transfer, and entrepreneurship empower local stakeholders to seize opportunities in the expanding lithium market.

Chile’s Bold Move to Nationalize its Domestic Lithium Industry 

Chile’s President Gabriel Boric had announced a bold move: the nationalization of Chile’s lithium industry in the last year. The newly launched business model thus fortifies his aim to take control of its massive lithium industry.

President Boric further believes that the nationalization of Chile’s domestic lithium industry is the best way to progress to a developed economy that affirms prosperity, social equity, and sustainability.

Graph: Major countries in worldwide lithium mine production in 2023

source: statistica

SQM and Albemarle to come under state ownership?

Chilean SQM (Sociedad Química y Minera) and US-based Albemarle, the sole producers in the country, conduct their operations in the Salar de Atacama under leases granted by Chile’s state development agency, Corfo. Both these industry giants drive Chile’s economic growth and hold its position as a key global lithium supplier.

With this nationalization move, separate state-owned companies will take control of Chile’s lithium operations from SQMandAlbemarle, without terminating their current contracts. As per reports, SQM’s contract will expire in 2030, while Albemarle’s contract extends until 2043.

Read More: Why Lithium Prices are Plunging and What to Expect • Carbon Credits

Impact on EV manufacturers…

It’s speculative that this economic shift in Chile’s lithium production would be a challenge for EV manufacturers like Tesla Inc. and LG Energy Solution Ltd. This is because they are reliant on SQM and Albemarle for their lithium supplies.

On the other hand, some industry experts hail President Gabriel Boric’s 3-pointer business plan to exploit the new lithium reserves in Chile. They consider this project would automatically increase the demand for lithium from EV manufacturers across the world.

If the predictions come true, Chile will certainly receive tons of applause from the global EV industry. Hence, doubling its domestic lithium production would not be a tough job.

However, we understand from reports that this strategy does not 100% nationalize lithium production in Chile. Rather it highlights a shift towards stronger public-private partnerships, with the state holding a majority stake in forthcoming lithium projects.

Nevertheless, Chile’s action to double its lithium production is vital for careful resource management of this critical mineral and promises a sustainable future.

Must Read: Top Lithium Stocks Making Waves in 2024 • Carbon Credits

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US DOE to Shell Out $6B to Decarbonize Heavy Industries

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In the bid to decarbonize energy-intensive industries, particularly steel and aluminum, the US Department of Energy (DOE) revealed a substantial funding allocation of up to $6 billion for 33 projects. The chosen initiatives aim to decarbonize energy-intensive industries, cut industrial greenhouse gas (GHG) emissions, bolster union jobs, revitalize industrial communities, and enhance the nation’s manufacturing competitiveness. 

Powering Progress: DOE’s Decarbonization Push

The funding is supported by President Biden’s Bipartisan Infrastructure Law ($489 million) and Inflation Reduction Act ($5.47 billion). It will help scale up emerging industrial decarbonization technologies crucial for the current administration’s climate and domestic manufacturing objectives. 

RELATED: US Saw $213B Investment in Clean Technologies, Paving the Way for Net Zero

Collectively, the projects could mitigate over 14 million metric tons of carbon dioxide (CO2) emissions annually. That’s equal to the yearly emissions of 3 million gasoline-powered cars. 

The industrial sector accounts for nearly ⅓ of the nation’s overall GHG emissions. Thus, the transformative federal investment will be matched by the selected projects to leverage over $20 billion in total funding. 

The projects could potentially reduce carbon emissions by an average of 77%. Managed by DOE’s Office of Clean Energy Demonstrations (OCED), the projects unveiled today under the Industrial Demonstrations Program aim to fortify America’s manufacturing and industrial competitiveness. 

The chosen projects for award negotiations include a range of difficult-to-decarbonize industries, with representation from various sectors, including the following breakdown:

7 projects in chemicals and refining,
6 projects in cement and concrete,
6 projects in iron and steel,
5 projects in aluminum and metals,
3 projects in food and beverage,
3 projects in glass,
2 projects focused on process heat, and
1 project in pulp and paper.

Forging a Green Steel Sector

The decarbonization funding announced by the US DOE has the potential to catalyze a transformative shift towards “green” steel production in the United States, according to industry leaders and observers.

The US steel sector has made significant strides in producing recycled steel through electric arc furnace (EAF) mills. It accounts for over 70% of the country’s steel output. However, there’s growing recognition of the need to embrace cleaner primary steel production methods. 

Last year, steel giant ArcelorMittal and Microsoft backed MIT spinout company Boston Metal to make clean steel. The startup employs a unique electrolysis process to manufacture green steel and help decarbonize the industry. 

READ MORE: ArcelorMittal and Microsoft Back MIT Green Steel Firm With $120M

Globally, there’s a rapid expansion of EAF production as steelmakers respond to increasing demand for cleaner materials and efforts to mitigate GHG emissions. In this context, countries, especially in Europe, are investing in technologies aimed at reducing emissions in primary steelmaking.

A nonprofit organization focused on decarbonizing steel and other industries highlighted the significance of investing in green ironmaking technologies. These technologies involve transitioning away from coal-based furnaces traditionally used in iron ore processing, thereby lowering emissions and enhancing competitiveness.

Below is a sample process flow in producing green pig iron. It’s from a Nevada-based green pig iron company Magnum.

A sample process flow in producing green pig iron. It’s from a Nevada-based green pig iron company Magnum.

There’s a huge potential for substantial emissions reductions both domestically and globally through the adoption of these technologies. By showing the feasibility of green ironmaking technologies in the US, there is an opportunity to deploy them worldwide, leading to reduced emissions on a global scale.

Ironclad Solutions: Decarbonization Projects in Focus

In the iron and steel sector, 6 projects have been earmarked for potential investment totaling $1.5 billion. They have the potential to prevent around 2.5 million metric tons of CO2 emissions annually. 

One notable project involves Sweden’s SSAB AB, which is in negotiations for up to $500 million to establish the world’s first commercial-scale facility utilizing HYBRIT technology in Mississippi. This innovative technology uses green hydrogen to power ironmaking processes, offering significant emissions reductions.

Cleveland-Cliffs is also in discussions for up to $500 million to transition its Middletown Works facility in Ohio from a coal-based blast furnace to a hydrogen-ready direct reduced iron furnace, accompanied by the installation of electric mantling furnaces.

Furthermore, Vale USA has been selected for potential funding of up to $282.9 million to establish a pioneering production facility for low-emission iron ore briquettes on the US Gulf Coast, providing a sustainable alternative to traditional iron ore pellets.

RELATED: Decarbonizing the Steel Industry Through Green Pig Iron

In the aluminum and nonferrous metals sector, 5 projects are eligible for over $900 million in federal investment. They are aimed at reducing around 4 million metric tons of CO2 annually.

Funding the Future

The potential financial support from DOE’s decarbonization funding serves to mitigate some of the risks associated with the significant investment required for steelmakers to decarbonize. Hilary Lewis, steel director with Industrious Labs noted in an interview the importance of this federal support, saying that:

“The role of government is significant here and it is significant in Europe as well, and it needs to be a partnership with industry that will put forward innovative, ambitious projects that will actually get us to near-zero [emissions].”

The DOE emphasized that the selection for award negotiations doesn’t guarantee the issuance or the provision of its decarbonization funding. The duration of the negotiation phase and the timeline for final decarbonization funding decisions weren’t yet specified.

Here’s the DOE’s IDP website to find the details about each of the chosen projects.

The DOE funding presents a critical opportunity to accelerate the transition towards green steel production in the US. It can position the country as a leader in sustainable steelmaking practices and contribute to broader efforts to combat climate change and reduce environmental impact.

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Nestlé Unveils New Initiatives to Cut Cocoa Supply Emissions

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Moving towards sustainable sourcing, Nestlé has recently announced groundbreaking initiatives aimed at curbing cocoa supply emissions. Already a global leader in food and beverage, its commitment to the environment has grabbed a significant spotlight. 

Nestlé has unveiled its transformative projects spanning five years in collaboration with suppliers Cargill and Export Trading Group’s (ETG) Beyond Beans. These initiatives involve advancements in agroforestry practices and a shift towards sustainable farming of cocoa.

Let’s deep dive into the details of Nestlé’s ambitious efforts to revolutionize the cocoa industry towards emission reductions.

Fostering Partnership with Cargill and ETG | Beyond Beans for Sustainable Projects

Nestlé’s partnership with its suppliers Cargill and ETG | Beyond Beans aligns with its objective to achieve net zero by 2050. They will primarily target carbon reduction and removal with Nestle’s cocoa supply chain. 

The key objectives of the projects are:  

Cocoa & Forest Initiative (CFI)

It envisions planting over 2 million shade trees, managed by 20,000 farmers in Ghana and Côte d’Ivoire. These projects are projected to cut down over 500,000 MTs of carbon dioxide over twenty years. 

The shade trees mitigate exposure to sunlight and preserve moisture for the cocoa crops in dry seasons. They optimize water resources and boost biodiversity on farms. Most importantly, they are highly efficient in absorbing CO2 from the atmosphere. 

Under CFI, Nestlé also plans to cut cocoa supply emissions by encouraging farmers to shift towards regenerative agriculture. The core focus would be to support reforestation in degraded cocoa farming lands. 

To support this program, Darrell High, global cocoa manager at Nestlé has said: 

“We’re working to address our emissions all the way to the farms we source from. Long-lasting forest protection can only happen when collaborating with fully committed suppliers, just like Cargill and ETG | Beyond Beans. We also depend on the participation of local communities, who have an impact on the forests and can help find land-use solutions that are best suited for the local reality.”

Read More: Carbon Credits Farming (Everything You Need To Know)

Involving Locals and Community Engagement Activities

Community engagement and social inclusions of the locals come under Nestlé’s Income Accelerator Program. It’s specifically designed to support cocoa-farming families. The projects would ensure that farmers receive their due rewards and incentives for the labor they put into planting and nurturing the cocoa crops.

Ursule Gatta, Cargill’s sustainability partnership officer in Côte d’IvoireOur said,

 “Our ambition is to scale up the project to cover 18 cooperatives over five years, aligned with the Nestlé Income Accelerator program.”

Cargill and ETG | Beyond Bean projects strive to engage the local communities whose agricultural lands have not been cultivated for a long time. These two firms will take over those lands for reforestation and redevelopment purposes. 

They aim to plant tree nurseries for cocoa seed cultivation. Apart from financial aid, the companies will offer technical assistance and consultations to the farmers to carry out sustainable agricultural practices. 

Both the supplier chains play crucial roles in facilitating the implementation of Nestlé’s Income Accelerator Program within these projects. 

Unlocking Global Reforestation Program (GRP) to Mitigate Cocoa Emissions by 2030

As mentioned on Nestlé’s official website, it has set an ambitious reforestation goal aka the Global Reforestation Program (GRP). The company pledges to grow 200 million trees by 2030 in and around farms where it sources its key ingredients. 

Nestle’s primary focus will be on deforested land. They will also work to establish conservation and restoration as standard practices across their supply chains. 

Why Nestlé’s GRP is crucial for climate change? Well, reforestation and restoration of degraded landscapes actively aid in long-term carbon removal and storage. These efforts are part of Natural Climate Solutions (NCS), essential for combating climate change.

Therefore, Nestlé with its land-use footprint must urgently invest in conservation and restoration to reach the 1.5°C target set by the International Panel on Climate Change (IPCC) in the COP21 Paris agreement.

The company’s Net Zero Roadmap incorporates carbon removals, primarily from sourcing ingredients. They believe that natural climate remedies in their supply chain can potentially eliminate GHGs from the atmosphere. This is expected to further boost their decarbonization goal of achieving 2.0 million tCO2e removals by 2030.

The chart examines Nestlé’s sustainability performance in 2021

source: www.nestle.com/sustainability

The main points highlighted in this chart are:

By 2025, reduce absolute emissions by 20%
from 2018 levels

By 2030, reduce absolute emissions by 50% from 2018 levels

Simultaneously, it is also important to track the viability of the projects to enjoy long-term benefits. One such way is monitoring the number of trees planted and the volume of CO2 removed. 

As per reports, Nestlé anticipates installing high-resolution satellite imaging technology to ensure the smooth running of its cocoa supply emission control strategy. With this tool, they can track the sustainability of the cultivated trees and evaluate the overall outcome of the reforestation projects. 

One can foresee that Nestlé aims to revolutionize the cocoa industry’s approach to mitigating emissions with innovative strategies and partnerships. They are investing at the landscape level to achieve both environmental and socio-economic benefits.

Further Reading: Nestlé and Fonterra to Develop NZ’s First Net Zero Dairy Farm (carboncredits.com)

 

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The Swiss-Thai Carbon Credit Deal Ignites EV Revolution in Bangkok

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Switzerland and Thailand recently cracked a groundbreaking carbon credit deal under Article 6.2 of the Paris Agreement on 9 January 2024.

Both countries have made their first transaction of Internationally Transferred Mitigation Outcomes (ITMOs), in which Swiss-based KliK Foundation purchased 1916 ITMOs from Thailand’s Energy Absolute Public Co. Ltd company for the Bangkok E-Bus Program.

Switzerland is the first sovereign country to purchase units to meet its national determined contributions (NDCs). On June 24, 2022, the endorsement of this deal occurred, and credits were allocated to the KliK Foundation in the Swiss Emissions Trading Registry on December 15, 2023

For a few years, the KliK Foundation has been supporting CO2 mitigation activities in countries that have signed a bilateral climate agreement with Switzerland under Article 6.2 of the Paris Agreement.

Apart from Thailand, the Swizz country has also signed similar agreements with Dominica, Ukraine, Ghana, Chile, Georgia, Morocco, Malawi, Peru, Senegal, Tunisia, Uruguay, and Vanuatu.

Read More: Thai-Swiss Deal Sets Paris Agreement Carbon Offsets in Action (carboncredits.com)

Relevance of Article 6.2 of the Paris Agreement to the Swiss-Thai Carbon Credit Deal  

Article 6.2 of the Paris Agreement provides “a decentralized framework for countries that are parties to the Paris Agreement to enter into bilateral or multilateral arrangements, known as “cooperative approaches.” 

It enables the transfer of one country’s GHG carbon credits to other countries to fulfill their net zero pledge to the Paris Agreement, as outlined in their NDCs. These specific carbon credits are known as Internationally Transferred Mitigation Outcomes (ITMOs).

The country obtaining ITMOs under Article 6.2 is termed the “host country,” as it hosts several types of GHG reduction projects. The “recipient” country is involved in ITMO transactions. It fortifies its NDCs by financing projects located at sustainable and cost-effective GHG mitigation sites.

This is how Article 6.2 of the Paris Agreement facilitates the utilization of cross-border carbon credit exchange to achieve their net zero targets under the Paris Agreement.

Both the companies have given a joint statement:

“The ITMOs will be used by the Klik Foundation to fulfill its compensation obligation under the Swiss CO₂ Act. Switzerland intends to use these ITMOs towards its target under the Paris Agreement. To avoid double counting, Thailand has committed to adjust its greenhouse gas inventory by the amount of mitigation outcomes transferred to Switzerland.”

This leads to an inference that the Swiss-Thai carbon credit deal is a mutual commitment towards their NDCs and immensely significant for the global carbon credit market.

Let’s read about the program included in the deal…

Bangkok E-Bus Program Ignites EV Revolution

The Bangkok E-Bus Programme is the crown jewel of this deal. Financed by the KliK Foundation, it has authorized a climate protection plan for the private-public transport sector to introduce EVs on the road.

Marco Berg, the managing director of KliK Foundation has confirmed that the organization commits to purchasing offsets for a maximum of 1.5 million metric tons of CO2 emissions from Energy Absolute until 2030. This acquisition constitutes only a fraction of the 20 million credits it anticipates acquiring by the end of the decade.

Energy Absolute Public Company Limited overseeing the manufacturing of EVs has contracted South Pole to develop the Bangkok E-Bus Programme. Initially, it would target all oil-operated vehicles in the Bangkok Metropolitan area and replace them with EVs.

As per reports, Energy Absolute will generate carbon credits with the launch of about 4000 electric buses in Bangkok. It will eventually stop petrol and diesel use. With this action plan, the government aims to curb a huge amount of greenhouse gas load and air pollution in the city.

Simultaneously, it will establish the groundwork for a comprehensive charging infrastructure network throughout the city. This climate protection initiative is anticipated to play a crucial role in enhancing air quality in Bangkok. This makes the program a pioneer in driving the electrification of Thailand’s mobility sector.

Furthermore, Chatrapon Sripratum, VP of Strategy Development & Investment Planning of Energy Absolute PCL strongly believes that the deal would be successful. He expects a huge bloom in the coming years.

Promising Sustainable Electrical Mobility in Bangkok

With concrete efforts and robust financing to ramp up EV manufacturing, Bangkok is setting its sights on a decarbonized future. The Bangkok E-Bus is a pilot program based on a highly efficient and sustainable strategy.

Some of the key features of this massive project highlighted by the Klik Foundation are:

The current total ownership costs (TCO) for electric buses are notably higher than those for internal combustion engine (ICE) buses. Further, The KliK Foundation intends to use carbon finance obtained through the acquisition of at least 500,000 ITMOs until 2030. The goal is to compensate the cost of total ownership between conventional buses and electric buses included in this project.

Between 2021 and 2022, the team conducted a test run, putting only 120 EVs on the road. However, privately operated bus lines in the Bangkok Metropolitan Region are currently introducing electric buses in phases. It aims to replace all internal combustion engine (ICE) buses from private operators and mitigate fossil fuel combustion.

The KliK financing mitigation initiative will offer valuable perspectives on digitalized MRV systems for GHG reduction activities and establishing EV-friendly infrastructure in Bangkok. This, in turn, will enhance Thailand’s NDC mitigation ambitions.

Value of electric vehicles (EVs) market in Thailand from 2016 to 2022, with forecasts through 2025 (in million U.S. dollars)

Source: Statista

The Bangkok E-Bus program will offer cheaper tickets, the best quality travel experience, increased frequency, and convenient travel routes for general citizens. It would give a huge boost to Bangkok’s economy and Thailand’s climate mitigation goals.

We believe that the success of this Swiss-Thai carbon credit deal should foster confidence and trust in similar agreements. It could be setting a great example for ethical carbon trading in the future.

More insights: Thailand’s Biggest Companies Plan Carbon Credit Exchange • Carbon Credits

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