Xpansiv’s Key Carbon Market Achievements for 1st Qtr of 2023

For the first quarter of 2023, Xpansiv achieved significant results, particularly on its carbon market performance. Here are the key achievements.

First up, the dominant carbon credit exchange managed to maintain a staggering share of the global voluntary carbon market (VCM) above 85%

Plus, over 50% of carbon volumes were traded on its suite of CBL Global Emissions Offset or GEO standardized contracts. 

As seen below, Xpansiv’s CME Futures contracts performance keeps on growing, both for its GEO and N-GEO contracts.

xpansiv GEO N-GEO

The exchange also demonstrated the diversity of its product portfolio, including REC (renewable energy credit), fuel, and water market transactions. 

Overall, among its diverse market volumes, carbon credit exchange (9 million tonnes) and TX services (9.7 million tonnes, including exchange-traded and over-the-counter volumes) are slow while RECs remain steady. 

Xpansiv REC Carbon

When it comes to power and registry results for the first three months, a slight drop in carbon credit issuances (almost 57 million tonnes) was compensated by the growth in REC offsets (72 million MWh) issued as shown by the chart. 

xpansiv LCFS Renewables

Another milestone that Xpansiv reached is the formation of a spin-out of its tech platform called XHub. It comprises digital monitoring, reporting, and verification capabilities of the leading exchange. 

This move led to the creation of Xpansiv’s new subsidiary, Fiutur Information Exchange Inc. The exchange will hold an equity interest in this new company. 

The company had also launched multiple carbon credit products across the globe. These include ACCUs in Australia, International REC (I-RECs) products, and CBL-enabled trading of EcoRegistry offsets.

Lastly, Xpansiv launched the first exchange-traded California Low Carbon Fuel Standard spot contract, further expanding the company’s already expansive network. 

Which Deserves a Carbon Credit – Nature or Technology?

The United Nations (UN) has drafted a document that will define a new global carbon market for years to come, which seems to favor nature-based solutions over technological or engineered carbon removals.

The UN panel casts doubt on the promise of using machines to remove CO2 and tackle the climate crisis. This is sending shock waves through the rising carbon dioxide removal (CDR) industry, which scientists said is critical to reduce global warming. 

The high-profile group shots a simple yet baffling question: nature vs. technology – which deserves a carbon credit?

Carbon Removals Don’t Serve Paris’ Article 6.4?

The Biden administration has started pumping billions of dollars into carbon removal solutions to help establish the CDR industry in the U.S. Large companies across sectors have also been betting their money in this emerging industry. The likes of Apple, Microsoft, Stripe, and even JPMorgan have invested hundreds of millions in carbon removal credits. 

But the UN panel appears to prefer the natural ways of capturing CO2. The group is questioning the technical and economic viability of startups seeking to remove carbon that’s already in the atmosphere. In their note, the panel wrote:

“Engineering-based removal activities are technologically and economically unproven, especially at scale, and pose unknown environmental and social risks. These activities do not contribute to sustainable development, are not suitable for implementation in the developing countries and do not contribute to reducing the global mitigation costs.”

In short, they believe that CDR solutions are not serving any of the goals of the Article 6.4 provision. 

A Global Carbon Trading System

The Paris Agreement on climate change contains a specific provision calling for the creation of an international carbon trading program. It’s officially referred to as Article 6.4.

The mechanism sets the international carbon trading system wherein companies can offset their emissions by funding a project that reduces or removes CO2. They can then trade the carbon offsets the project generates in voluntary carbon markets and claim their environmental impact. 

  • The market for carbon offset credits is currently valued at around $2 billion. By 2050, it can grow to about $160 billion to over $600 billion annually. In another market analysis, operating on carbon removal alone will bring the market to $1 trillion by 2037.

The UN group is tasked with setting up the worldwide carbon trading system. So, the position it takes on which approach in capturing CO2 is best can significantly affect the CDR industry’s fate.

Carbon Credits from the Trees or Giant Fans?

Basically, there are two ways to remove carbon from the air and the oceans. One is through carbon-hungry trees and sea grasses. The other is to use carbon removal technologies such as direct air capture (DAC) that employs giant fans in sucking the CO2.

Both natural and technological climate solutions can be effective ways to mitigate the worst effects of global warming. 

But the UN experts find nature-based carbon market solutions such as reforestation more beneficial despite studies showing some projects failing to deliver their carbon reduction promises. Questions on their durability and quality abound. 

On the other hand, the price of carbon credits generated by engineered removals isn’t cheap. For instance, DAC is still expensive and can remove only a few thousand tons of CO2 a year. In particular, carbon removal startup Charm Industrial sells its carbon removal credit at around $600/metric ton

If the group considers natural solutions the true way to remove carbon from the air, it can potentially stop a growing sector of the very market it serves.

So, which solution is worthy of a carbon credit certificate?

The carbon removal industry offers a sensible answer, and it’s not one that’s better than the other. 

A Criteria-Based Approach

The UN-backed IPCC believes that CDR is necessary to achieve the Paris climate goals as shown below. CDR includes bioenergy combined with CCUS (BECCS), natural climate solutions (NCS), and direct air carbon capture with storage (DACCS).

Achieving the Paris Goal with Carbon Removal

carbon removal technologies net zero

But the panel broadly defines the concept of carbon removal as “anthropogenic activities removing CO2 from the atmosphere and durably storing it in geological, terrestrial, or ocean reservoirs, or in products.” This definition doesn’t clearly differentiate natural from engineered CO2 removal solutions.

Over 100 supporters of the carbon removal industry call for the UN intergovernmental group to opt for a “method-neutral, criteria-based approach” to the issue. 

Ben Rubin from the Carbon Business Council, a nonprofit representing the carbon removal companies that signed a letter responding to the UN’s draft, asserted that each CDR approach is a combination of nature and engineering. He further said that:

“The lines just start blurring so quickly. Which is why I think having a criteria-based approach has the most clarity rather than artificially saying that one thing is nature and one thing is technological. The [CDR] sector is advancing quickly, and there are a number of approaches ready for eligibility under Article 6.4 now, with more expected to reach that stage of maturity in coming years.”

Rubin cited enhanced rock weathering (ERW) and biochar carbon removals that employ both natural and engineered ways to capture CO2. He also invited the UN to connect with CDR projects worldwide where they contribute to local and regional economic development. 

The UN carbon removal group hasn’t set a deadline for establishing the CO2 emissions trading system but will likely make its final decision at the COP28 climate talks by the end of November in Dubai. While there’s no formal framework in place yet, the note seems to point what direction the final decision may take. 

Brazil’s Bill Will Allow Loggers to Earn $24M from Carbon Credits

Brazil’s Congress passed a bill that will make carbon credits available to private companies with forest concessions, serving a first step in regulating the voluntary carbon market in the country.

The new policy is expected to boost revenue by 43% while generating around $24 million per year from carbon credits.

Brazil’s New Carbon Credit Bill

Though Brazil is home to the largest tropical forest in the world, the country is lagging behind others like Cambodia in generating forest carbon credits. The Amazon country has 20 certified REDD+ projects ongoing but only 2 of them in public forests. 

Forest concessions are leasing programs that lease areas of public forest to the private companies. This is to encourage economic activities such as logging that generate income while still keeping the forest standing.

Under the current legislation, only credits from reforestation projects are permitted in forest concession agreements. Allowing the generation of carbon credits in forest concessions may change this scenario.

The new federal law will enable the development of carbon credit projects and other environmental services through forest concession agreements. It prompts the generation of credits resulting from avoided carbon emissions through conservation of natural forests, the so-called REDD+ credits.

In 2006, Brazil’s Public Forest Management Law (Lei de Gestão de Florestas Públicas – LGFP) set up forest concessions and created the Brazilian Forest Service (Serviço Florestal Brasileiro – SFB). 

SFB manages forest concessions at the federal level. It is responsible for selecting the forest areas that can be awarded for concession and for monitoring the contracts. Some states, mainly in the Amazon, also have their own concession policies covering state public forests. 

  • Among the more than 229 million hectares of federal public forests in Brazil, over 5 million hectares are available for concession in 2022. Currently, only a little over 1 million hectares are under federal concession, all of which are in the Amazon.

Boosting Appeal and Revenue 

The limited success of the forest leasing program in Brazil suggests a little interest from private investors. But the new bill can help boost the appeal of forest concessions by creating more revenue streams. 

According to Jacqueline Ferreira, a manager at Instituto Escolhas, a nonprofit organization that’s party to the bill consultations, the policy will bolster other economic activities involving forestry concessions. 

The environmental nonprofit did a study on the potential for REDD+ carbon credits generation in the Amazon. Their analysis includes 37 forest areas that can be leased in the region. They estimated that the leasing program can generate a total of $24 million each year from carbon credit sales.

Here’s their results as to which state and federal forests have the potential to produce carbon credits. 

Brazil forests carbon credit potential
Source: Instituto Escolhas website

The study also shows that carbon credits can increase Rondônia’s revenue from sustainable timber management in forest concessions by 43%

Noting this finding, Ferreira said that they use “very conservative math, based on carbon credit prices below the market level.” She added that more rules are necessary to explain how carbon credit generation can happen. But she said that at least 1 year is needed for the first leases to be issued with carbon credits. 

The Biggest Stumbling Block

The bill comes as carbon credits from Amazon REDD+ projects have to deal with doubts due to land ownership issues. 

For instance, the Jari Pará REDD+ Project in Brazil’s Amazon rainforest has come under scrutiny for selling carbon credits from publicly-owned land without state authorization. 

Brazil’s voluntary carbon credit market remains unregulated and the introduced bill may help fix that. 

But another nonprofit working on Amazon’s sustainability pointed out that a broader regulation is needed to address issues on the quality of carbon credit projects in the region. 

Other experts on the matter said that the bill should make Brazil’s forest leasing programs become profitable. But one big hurdle to that is the strong competition from illegal logging rampant in the Amazon rainforest. 

President Luiz Inácio Lula da Silva must sign or veto the bill within 15 days. Lula’s reign focuses on reversing the impacts of deforestation that his predecessor, Jair Bolsonaro, created. 

Last week, Lula revealed that the United Nations selected Brazil to host COP30, the global climate meeting, in the Amazonian city of Belém do Pará in 2025. COP is the yearly UN Climate Change Conference wherein nations discuss and agree on measures to deal with the climate. This year’s COP28 will be in Dubai.

Global Renewable Energy to Break Records in 2023, IEA Says


Global additions of renewable power capacity will increase by a third this year, says the International Energy Agency (IEA).

In the IEA’s 2023 Renewable Energy Market Update report, the agency said new global renewable capacity will jump by 107 gigawatts (GW) to over 440 GW. This is the largest increase ever reported.

Yet, the manufacturing capacity for all solar PV productions will further rise to more than double to 1,000 GW by 2024, with China taking the lead.

Leaders of the New Global Energy Economy

The need to decarbonize the global economy calls for a new energy system that does away with fossil fuels. 

Per IEA Executive Director Fatih Birol, solar and wind power dominate the rapid growth of this new global energy economy. She further noted that:

“This year, the world is set to add a record-breaking amount of renewables to electricity systems – more than the total power capacity of Germany and Spain combined.”

Three major things drive strong demand for solar PV and wind power: growing policy concerns, higher fossil fuel prices and energy security issues.

In 2024, global renewable electricity capacity is estimated to rise to 4,500 GW. That’s about the same as the combined power output of China and the U.S.

Solar PVs will account for 2/3 of the increase in renewable energy (RE) capacity this year and they will keep growing in 2024. The chart shows the IEA’s estimates for 2023 and 2024.

Net RE Capacity Additions by Technology, 2017-2024

renewable energy capacity 2023 IEA

This growth is due to continued expansion of large-scale solar PV applications along with smaller distributed systems. The smaller distributed PVs such as rooftop PVs account for half of this year’s total solar PV deployment. Higher electricity costs are pushing the growth of the smaller solar PV applications, the report noted. 

Meanwhile, onshore wind capacity additions are also on track to rise by 70% this year to 107 GW, another record high, after 2 years of decline as seen in the chart above. The major reason for this rebound is the completion of projects previously delayed due to COVID-19 pandemic and supply chain issues.

RE: At the Heart of Europe’s Energy Plan

In Europe, renewables are at the heart of the bloc’s response to the energy crisis caused by the Russia-Ukraine war. Policy actions in many EU nations will bring a 40% uptick in the region’s new renewable capacity forecasts. 

The newly installed renewables in 2021-2023 will bring a whopping energy savings to EU consumers of about 100 billion Euros

European Union Capacity Additions in 2023-2024

EU renewable capacity 2023-2024

Also, the bloc has made more policy and regulatory changes to ease RE permitting in the last 18 months than over the whole past decade. 

New policy actions will also help drive substantial RE increases in India and the US over the next 2 years. 

The Undisputed Leader in RE Deployment

The IEA further said that China will remain as the undisputed leader in global RE deployment. Its new renewable capacity will grow this year and the next.

In 2022, the 3rd-largest polluter took the share of about 50% of all new renewable power capacity globally. In 2024, China’s share will hit a record 55% of global RE capacity deployment. 

China RE lead 2022-2024

Meanwhile, there’s also a growing supply diversification in other parts of the world, particularly the US, Europe, and India.

Meeting Net Zero Emissions Scenario

Based on the upward trends, the report claims that the world will have enough solar PVs in 2030 to meet the annual demand projected in the IEA’s Net Zero Emissions by 2050 Scenario.

In contrast, wind manufacturing capacity will expand more slowly and may struggle to keep up with demand growth through 2030. 

However, despite those record-breaking increases, renewable energy auctions were under-subscribed also by a record 16% last year. of RE auction volume was unallocated due to policy uncertainties and volatile prices as shown below.

renewable energy auction 2019-2022

Governments have to address this challenge to achieve stronger growth of the sector. More investment in upgrading grids to accommodate higher volumes of RE in power systems is also necessary. In the authors’ words, that means:

“Policies need to adapt to changing market conditions, and we need to upgrade and expand power grids to ensure we can take full advantage of solar and wind’s huge potential.”

More growth in 2024 largely relies on how governments’ policy support will turn out, particularly on permitting and auction design. Several countries will see their annual share of solar PV and wind power reach over 40% by 2024, which calls for effective grid management.

Equatic Reveals First-of-a-Kind Ocean CO2 Removal Tech, Inks Deal with Boeing

Ocean carbon removal startup Equatic launches breakthrough low-cost, gigaton-scale climate technology and signs a pre-purchase deal with Boeing.

L.A.-based Equatic is an UCLA Samueli School of Engineering’s Institute for Carbon Management spinoff company. It’s the first to apply a revolutionary electrolytic approach that combines ocean carbon removal and carbon-negative hydrogen production. 

Alongside its tech launch, Equatic also revealed that it signed a CO2 removal (CDR) pre-purchase agreement with aerospace giant Boeing. Boeing will buy 62,000 tonnes of carbon removal and 2,100 tonnes of carbon-negative hydrogen from Equatic.

Equatic’s 2-in-1 Climate Solution

According to Lorenzo Corsini, Equatic’s Principal Advisor, the world is dealing with two utmost climate challenges: the permanent removal of gigatons of CO2 and the shift away from fossil fuels. This is where Equatic’s climate solution comes in to address both problems in one process.

Corsini describes it saying that:

“Equatic’s first-of-its-kind technology solves both. It combines basic principles of chemistry with the natural capabilities of the world’s best carbon removal tool, the ocean, to create the most promising solution for scalable decarbonization — cost-effectively and at a globally-relevant scale.”

The oceans are the world’s largest carbon sink; 30% of the planet’s daily carbon emissions are drawn down by the ocean. 

Equatic’s revolutionary technology speeds up this natural cycle to remove and permanently store CO2. 

At the heart of Equatic’s novel ocean carbon removal tech is a single-process but multi-product solution that allows decarbonization at the speed, scale, and cost required to tackle the climate crisis.

In the words of the startup’s CEO, Lord John Browne, “the costs are low enough to allow unprecedented scaling and adoption globally.”

Equatic aims to achieve 100,000 tonnes of ocean carbon removal yearly by 2026 and millions of removals for less than $100 per tonne by 2028.

Equatic Way of Removing Carbon and Producing Credits

Equatic’s CO2 removal plant uses four items to remove and store CO2 while producing carbon-negative hydrogen at the same time. These include air, seawater, rock, and renewable electricity. 

Equatic ocean carbon removal process

  1. Seawater enters the plant.
  2. The ocean-based removal tech uses electrolysis, a process wherein electric current passes through seawater. Water splits into hydrogen and oxygen gas, with alkalinity promoting carbon removal.
  3. The air then passes through the processed seawater, leading to direct air capture.
  4. Co-produced hydrogen gas for sale as a clean fuel source.
  5. In the last step, Equatic neutralizes the treated seawater using alkaline rock while ensuring that its natural chemistry remains intact. 
  6. Seawater discharges back into the ocean.

These processes trap CO2 in solid minerals and as substances that naturally dissolve in the oceans. Thus, the captured CO2 is stored permanently for over 100,000 years.

This unique ocean-based carbon removal process is the key to achieving scalable, durable, and high-quality carbon removal. It also allows for industry-leading Monitoring, Verification, and Reporting. 

Since the process doesn’t rely on the open ocean but within the boundaries of an industrial plant, Equatic can measure removal with extreme certainty. This enables the startup to sell in-demand, high-quality, and permanent carbon removal credits.

Plus, there’s the added bonus of generating carbon-negative hydrogen fuel. Carbon-negative hydrogen is from processes that reduce CO2 emissions.

Added Bonus: Producing Carbon-Negative Hydrogen

The hydrogen by-product can be used to power Equatic’s process itself. It can also be sold as a carbon-negative or clean energy fuel to decarbonize other processes or sectors. This particularly includes the production of Sustainable Aviation Fuels (SAFs) for the aviation industry.

Sheila Remes, Boeing’s Vice President of Environmental Sustainability remarked on this, pointing out that:

“Reaching aviation’s sustainability goals will require a multi-faceted approach and Boeing sees immense value in Equatic’s technology.”

Equatic spun out from UCLA with $30M+ in initial funding including grants and equity investments from various organizations. These include the Chan Zuckerberg Initiative, the Grantham Foundation for the Protection of the Environment, the National Science Foundation, The Nicholas Endowment, Singapore’s Temasek Foundation, the U.S. Department of Energy’s Office of Fossil Energy and Carbon Management, among many others.

The company is currently running two ocean CO2 removal pilots in Los Angeles and Singapore. All of the carbon removed from these pilots has been pre-sold to Boeing and to the payment solution provider, Stripe. Stripe’ Frontier fund aims to invest $1 billion to help carbon removal startups scale up and lower the cost of sucking CO2 from the air. 

Combining ocean carbon removal and hydrogen production within the same process significantly lowers both their costs. This allows Equatic not to depend on fossil fuels, thereby avoiding a fossil fuel-related footprint.

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

According to S&P Global, in the first quarter of 2023, US imports of lithium-ion batteries surged by nearly 66% from the previous year, reaching a staggering 235,386 metric tons.

The first quarter of 2023 marked the 11th consecutive quarter of rising battery imports and set a new record, approximately 24% higher than the previous record set in the last quarter of 2022.

The leading shippers in the first quarter were China’s Contemporary Amperex Technology Co. Ltd., the world’s largest lithium-ion battery manufacturer; LG Energy Solution Ltd., with significant factories in South Korea, China, and Poland; and US-based Tesla Inc., which supplements its domestic battery production with imports from China.

In 2023, the United States has seen a remarkable increase in the construction of lithium-ion battery factories, supported by substantial manufacturing tax incentives provided by the Inflation Reduction Act of 2022. This development intends to localize the production of this critical energy transition technology.

However, the US continues to depend heavily on international trade for its lithium-ion batteries, especially from China, to meet the escalating demand for electric vehicles and electrochemical energy storage as part of its effort to reduce emissions. The imports of these batteries have soared to unprecedented levels.

The largest recipients of these shipments were Tesla and Samsung SDS America Inc., a subsidiary of South Korean battery maker Samsung SDI Co. Ltd. Other significant recipients included Fluence Energy Inc., a battery storage system integrator, and a battery construction affiliate of NextEra Energy Inc.

Companies like Fluence, Samsung, Tesla, and LG Energy Solution are among those that have pledged to construct or expand US lithium-ion battery manufacturing following the enactment of the Inflation Reduction Act. Additionally, Contemporary Amperex Technology is collaborating with Ford Motor Co. on its domestic battery production.

In the first quarter of 2023, China was the largest contributor to US battery imports, with an overwhelming share of 87.9%, up from 77.5% a year ago. South Korea contributed 3.2%, down from 4.7% in the same period in 2022. Poland increased its share to 3.1% from 1.4%, and Japan’s contribution dropped dramatically from 11% to just 1.2%.

Lithium Ion Q1 2023 USA imports

The increasing demand for lithium-ion batteries in the U.S., which resulted in a record-breaking import in Q1 2023, is a clear indication of the ongoing energy transition and the heightened emphasis on electric vehicles (EVs) and electrochemical energy storage. It also underscores the significant role of international trade, particularly with China, in meeting this demand.

The data underscores the urgency of increasing domestic production capabilities to meet the escalating demand. It also suggests that despite the rapid build-out of domestic lithium-ion battery factories, reliance on imports, particularly from China, is likely to persist in the near term due to the sheer volume of demand.

Consequently, while the U.S. continues to bolster its domestic production, maintaining healthy international trade relationships will be crucial to meeting the nation’s energy transition goals.


Carbon Removal Startup CUR8 Closes $6.5M Pre-Seed Funding

London-based climate tech startup CUR8 raised $6.5 million in pre-seed funding round led by Google Ventures (GV) to scale up and further develop its carbon removal credit platform.

CUR8 said that the funds will help grow its team, increase capacity, and serve more clients and suppliers. 

Google Ventures supports startups operating in the sectors of emerging technologies, enterprise, life sciences, consumers, climate, among others. To date, it has more than $8 billion in assets under management, backing 400 companies in Europe and North America. 

Apart from GV, another investor joining the round is CapitaIT. It’s a (pre)seed fund investing in climate tech and the future of work. 

Reaching Net Zero with Carbon Removals

The world is under pressure to decarbonize by 2050 and industries are striving to achieve their net zero pledges. And a key part of that is to offset their unavoidable emissions through carbon removals. 

Asserting the important role of carbon removals in net zero goals, Dr. Gabrielle Walker says:

“I’ve been working in climate science for 30 years and it can be easy to feel overwhelmed and pessimistic about the 2050 net-zero deadlines. Carbon removal, along with decarbonisation at scale, has the potential to help us reach these goals, but only if we have the right tools to scale this market to 10 billion tonnes a year by 2050.”

Required Carbon Removals by 2050

carbon removals by 2050
Source: CUR8 website

There are different types of carbon removal technologies available today. These include methods like planting more trees, increasing soil’s CO2 absorbing capacity, turning agri wastes into biochar (carbon-rich charcoal), enhanced rock weathering, and direct air capture. 

The carbon removal industry has a lot of potential to grow as more companies commit to net zero targets. But it’s still in its infancy and has to deal with challenges such as high prices and lack of supply.

All these prevented companies from investing in carbon removals as an option for reducing and offsetting their footprint. 

And this is where CUR8 can help fill in the gap between high-quality carbon removal credit suppliers and buyers. 

CUR8’s Unique Carbon Credit Platform  

CUR8 focuses on accelerating the carbon removal industry by building a platform for removals portfolios of the highest quality.

The startup was founded very recently in 2022 by a team of expert executives: serial fintech entrepreneur and former lead of Google for Startups UK Marta Krupinska, removals expert and climate scientist Dr. Gabrielle Walker, and net zero expert and former UK Ministry of Defense advisor Mark Stevenson. Other team members were former workers at the World Bank and Microsoft. 

The carbon removal startup aims to facilitate 1 billion tonnes of carbon removals annually by 2050. The company is building the tools to professionalize the industry through its innovative platform. 

CUR8 buys carbon credits from trusted removals suppliers and creates high-quality CO2 removals portfolios through trusted methods and strategies. 

Buyers can trust CUR8 carbon removal credits that have these features:

CUR8 carbon removal credit features

CUR8 hopes to lower the carbon credit price over time to make it affordable as the sector grows and develops. Currently, the industry set price for each carbon removal credit is at about £150 or $180 per unit. 

The climate tech’s platform has been selling carbon removal credits to royal events such as The Queen’s Platinum Jubilee Pageant and The State Funeral of HM Queen Elizabeth II. It also does the same for big public events like the British Summer Time and All Points East. 

CUR8 platform’s removals are from these portfolio:

  • 1PointFive’s direct air capture 
  • UNDO’s enhanced rock weathering
  • Loam Bio’s durable soil carbon

The 10% Mission  

It has been clearly determined by scientists that the world has to remove 10 billion tonnes of CO2 by 2050. 

CUR8 seeks to enable 10% (1 billion) of all global carbon removals over the next two decades and more. The climate startup will do that by developing critical CO2 removal infrastructure. 

In 2022, the UK government has invested £54 million into various projects that develop CO2 removal technologies. In the U.S., the Department of Energy has been pouring billions of dollars into supporting different carbon removal initiatives.

CUR8’s scientific experts track over 100 data points across impact, integrity, and scalability in performing in-house supplier due diligence. This is crucial to reduce buyers’ risk and help companies understand the quality of their carbon credit investments.

The company is also tracking the progress of carbon sequestration of their partners so buyers can invest in carbon credit contracts over several years. They can then use it to inform their net zero goals and their ESG (environmental, social and governance) plans. 

CUR8 plans to create financial tools that ramp up the sector and allow new carbon removal technologies to develop, ensuring that the sector will have a key part in fighting the climate crisis.

How Big is the CO2 Footprint of AI Models? ChatGPT’s Emissions

Generative artificial intelligence (AI) like ChatGPT is the tech industry’s hottest tool expected to revolutionize trillion-dollar businesses, but what does its carbon footprint mean for the planet?

Generative refers to the ability of an AI algorithm or model to produce complex data. These include creating a sentence or a paragraph, generating an image or a short video. 

While generative AI has long been used in applications, it only recently improved to produce human-like language and realistic images. It is booming, and so too its carbon emissions. 

Generative AI’s Carbon Footprint

Though it’s hard to measure the exact energy cost of AI models, their carbon footprint is growing alarmingly. They use more energy than other types of computing.

In fact, training a single AI model can consume more electricity than one hundred American homes use in one year. And the sector is growing so rapidly and their models are not cheap to train. 

Their emissions vary a lot, depending on the type of source that powers the technology. For instance, a data center that is run by a coal or gas-fired power plant will have more CO2 emissions than one that gets power from renewable energy sources. 

Greater Power Means Greater Energy

While the specific energy use for an AI model remains unknown, generally it includes the footprint used in making the computing equipment, creating the AI model, and using it. 

Some estimations, however, exist in an attempt to grasp how huge the technology’s CO2 footprint is. 

As reported by the MIT Technology Review, training a single AI model can emit 626,000+ pounds of CO2 equivalent. Putting that in context, it’s about 5x the lifetime carbon emissions of an average passenger car. 

And the more powerful the AI model, the more energy it needs. 

In a 2019 study, researchers found that making BERT, a generative AI with 110 million parameters, used the same energy as 1 person consumed in a roundtrip transcontinental flight. 

AI model’s number of parameters refers to their size. The larger the model’s size, the bigger its footprint. 

Indeed, making the much bigger model, the GPT-3 with 175 billion parameters, emitted over 550 tons of CO2e while consuming 1,287 MW hours of electricity, per computer scientist Kate Saenko. It’s the same amount of emissions as a single person taking 550 roundtrip flights between New York and San Francisco.

And that doesn’t even include other sources of emissions, only getting the AI ready to use. 

AI Query like ChatGPT Emits More CO2

While generative AI models used to be available only for researchers, OpenAI’s release of ChatGPT alters that. Along with the sector’s carbon footprint. 

There’s a lack of information on the CO2 emissions of a single generative AI query. But industry estimates show it is 4x to 5x bigger than that of a search engine query. One Google search emits about 0.2g of CO2

ChatGPT had seen more than 1.5 billion visits in March 2023 alone. 

Saenko asserts the exponential growth of this AI tool as tech giants integrate them into their search engines saying:

“As chatbots and image generators become more popular, and as Google and Microsoft incorporate AI language models into their search engines, the number of queries they receive each day could grow exponentially.”

The Chinese search company Baidu has also announced plans to do the same.

ChatGPT and other AI assistants have many other uses than search. They can also write, solve math problems, and create marketing campaigns. 

The carbon emissions of building ChatGPT is not known publicly, but it’s more likely higher than GPT-3’s footprint, per Saenko. And since ChatGPT has to be updated, it can process data only until 2021, its emissions will increase even more. 

Yet, generative AI’s carbon footprint can be reduced. 

A “Greener” Chatbot

A study by Google found that using a more efficient AI model architecture, processor and a greener data center can reduce the tech’s carbon footprint by 100x to 1,000x.

Greener data center means using power from renewable energy sources like solar or wind farms. 

AI developers can also schedule computation at times when renewable sources are more available. This can cut AI’s carbon footprint by as much as 30% to 40%, compared to using a fossil fuel powered-grid.  

But the more pressing concern to address is to make data on generative AI model’s carbon footprint more publicly available. This is crucial to know the sector’s real impact on the environment and base emission reduction efforts from there. 

Klarna Funds Carbon Removals with $5M from Internal Carbon Tax

Klarna reveals climate commitment worth a total of $2.35 million that will support more than 20 carbon removal organizations this year. 

Klarna, the global payments network and shopping solution provider, gets the contribution from its internal carbon tax income. It’s the third time the company is doing this act since 2021, which now totals to over $5 million.  

Remarking on the announcement, Klarna’s Head of Sustainability Salah Said noted that:

“Klarna is committed to supporting impactful organizations long-term as a catalyst for change, to help them grow and maximize their impact… driving the removal of CO2 from the atmosphere while also contributing to nature protection and restoration, decarbonization, and advocacy.”

Klarna’s Approach to Sustainability

Klarna is a Swedish fintech company that provides online financial services. It’s the first fintech to join The Climate Pledge and Race to Zero campaign. 

With funds from its internal carbon tax program, Klarna is putting its money in carbon removal solutions that mitigate climate change. The goal is to achieve long-term climate impact by supporting various climate projects to make an impact by 2030. 

This climate initiative is part of Klarna’s Climate Transformation Fund in partnership with Milkywire. The Fund selects the companies to support.

What’s The Climate Transformation Fund?

The Climate Transformation Fund is a “beyond-offsetting” charitable fund arranged by planet health platform Milkywire. It particularly supports various projects that tackle the climate crisis within these areas – biomass, rock, ocean, and direct air capture. 

To help achieve the global net zero goal, the global retail bank implemented an internal carbon tax to make money for the Climate Transformation Fund. The company charges its own emissions with this breakdown:

  • $100/metric ton for Scope 1 and Scope 2 emissions, plus travel emissions 
  • $10/metric ton for the rest of Scope 3 emissions

Klarna and its Carbon Removal Partners

Last year, Klarna’s internal carbon tax income supported 16 climate projects. By the end of this year, the company will fund over 20 initiatives ranging from nature-based solutions to carbon removals. These include the following companies:

  • Carbon Capture Scotland 

This is a UK-based CO2 capture and storage firm focusing on capturing waste biogenic CO2 from whisky distilleries and storing it via geological storage. Their technology lowers the cost and footprint of sequestering CO2 from fermentation sources. Klarna plans to make a pre-purchase from this company this year. 

  • Takachar – biochar 

This Kenya-based company is producing biochar, a carbon-rich fertilizer, from crop and forest wastes. Takachar partners with local farmers to make good use of waste biomass to reduce carbon pollution with soil carbon removal. Klarna also plans to make a pre-purchase from Takachar. 

  • TerraFixing – DAC

This Canadian company has developed an adsorption based direct air capture (DAC) technology. The DAC is designed to work in cold remote locations where capturing and extracting CO2 is easier and cheaper. Klarna intends to make a pre-purchase from TerraFixing also this year.

  • Inplanet – Enhanced Rock Weathering (ERW) 

This ERW startup works in Brazilian agriculture and focuses on removing carbon by spreading silicate rock powders on farms. Inplanet does it under optimal soil and climate conditions for effective weathering and carbon removal. The company is set to make a pre-purchase deal with Klarna. 

  • SeaO2 – ocean CO2 capture

SeaO2 is a Dutch company that uses electrochemical oceanic carbon capture tech to capture CO2 from seawater and store it. It then returns the treated water back to the ocean for more carbon sequestration. 

Other CO2 removal companies that the Fund supports include existing ones such as Husk, InterEarth, and Silicate. Other new companies that Klarna will fund this year include the Kenya-based Octavia Carbon, Parallel Carbon, and Mission Zero Technologies.

Klarna had pre-purchased carbon removal credits from Heirloom and Climeworks in 2021 and 2022.

Klarna’s Net Zero Goals and Progress

Apart from funding carbon removal and other climate projects, Klarna also manages to further reduce its own CO2 footprint. The payment network cut its carbon emissions by almost 4% in 2022 compared to 2021.

The carbon reductions were due to continued improvements Klarna makes in cutting footprint from Scope 1 and 2 emissions. The company also managed to run all its offices on 100% renewable energy last year, 2 years earlier than targeted.

  • Klarna aims to cut 50% of its carbon-intensity-based emissions in line with the Paris Agreement by 2030. It seeks to reach net zero operations by 2040, 10 years ahead than the global target.

To date, here is Klarna’s climate targets and progress in a glance:

Klarna net zero targets and 2022 progress

Going forward, Klarna will continue to support and select more projects as it works toward achieving its net zero target. By making those pre-purchase agreements, Klarna and its partners help scale the emerging carbon removal industry with new climate solutions.

India’s Tiger Protection Avoids Over 1M Tonnes of CO2 Emissions

India’s efforts in protecting its endangered tigers have resulted in avoiding over 1 million tonnes of carbon emissions by preventing deforestation, according to a study. 

A study published in the journal Nature Ecology and Evolution has found a significant link between tiger protection and reduced carbon emissions, suggesting the potential for integration into carbon credit schemes.

India’s Tiger Protection Program 

India is home to most of the planet’s wild tigers. However, deforestation has destroyed their natural habitat, leading to a drop in their population.

The number of tigers roaming the country’s forests declined to a mere 1,500 in 2006. However, India’s innovative tiger protection program, Project Tiger, has saved these big cats from extinction. 

This year marks the project’s 50th anniversary, and last April, the Prime Minister announced that the tiger population in the country has risen above 3,000, representing over 70% of the wild tigers worldwide. 

India’s Project Tiger began with only nine dedicated reserves five decades ago. However, the country now protects tigers across 54 reserves spread throughout the nation. The total protected area spans more than 75,000 square kilometers, equivalent to 2% of India’s total land area.

Tiger Reserves Spreading Across India 

India tiger protected areas
Source: India National Tiger Conservation Authority

Apart from saving the tigers, the wildlife protection program also achieved another critical saving – carbon emissions. 

Saving Tigers Saves Carbon Emissions

Researchers compared the rate of deforestation deforestation in the reserves to that in areas where tigers also reside but receive less protection.

Their study found that over ¾ of the forest loss happened outside the protected reserves. Moreover, between 2001 and 2020, 61,000+ hectares of forest were lost across 160+ different areas.  

According to the lead author, Aakash Lamba, tigers are an umbrella species, meaning conserving them is also protecting their habitat. And forests are a natural carbon sink that sucks in CO2 more than they release. 

Therefore, preventing deforestation also contributes to reducing CO2 emissions. The study found that approximately 6,000 hectares of forests within the tiger-protected areas were preserved between 2007 and 2020.

The substantial reduction in deforestation equates to a savings of over 1 million tonnes of carbon emissions. While this amount might seem small compared to India’s annual carbon footprint of approximately 2.7 billion tonnes, it still represents a significant achievement

The country has been snagging the carbon market spotlight with its various climate plans last year. It’s hastening efforts in transitioning to clean energy and reach net zero emissions by 2070.

Yet, the emissions avoided are substantial when monetized through carbon offset credits. 

The authors suggested that the third-largest emitter could have earned more than $6 million from carbon credit sales had the project qualified for such crediting. They also estimated that the project helped the country avoid as much as $92 million in other ecosystem service costs.

Highlighting the carbon emissions savings and cost benefits of protecting tigers, the authors noted that “biodiversity conservation and climate change mitigation are intimately linked“.

In another study, protecting other wild animals can help capture over 6 billion tonnes of CO2 each year. 

However, India’s Project Tiger does not qualify for generating carbon credits as it does not meet the additionality criterion. The 1 million carbon emissions savings took place on already protected areas. 

Closing the Funding Gap with Carbon Credits 

However, the authors asserted that insufficient funding for biodiversity conservation projects like these reduces their impact.

Their findings suggest that Project Tiger could be a game changer for protecting wildlife and biodiversity as it can be funded through carbon credit schemes. 

They specifically stated that:

“Revenues from the trade of fungible carbon offsets, which represent standardized and internationally tradable reductions in emissions, arising from the recognition of the climate change mitigation benefits associated with biodiversity conservation can serve as a means of closing this funding gap.”

The financial savings from avoided carbon emissions account for about a quarter of India’s annual expenses on tiger protection. The country’s budget for the program in 2021 was almost $27 million. 

Modifying the current crediting system could benefit not only tiger and wildlife protection in India but also in other regions. 

However, the authors noted that incorporating tiger protection into carbon credit markets necessitates thorough consideration of local communities. Their participation is “crucial in equitable and effective conservation”.