Net-zero carbon beef – coming to a store near you!

Carbon S
-
0
Net-zero carbon beef – coming to a store near you!

Net-zero carbon beef may be coming to a store near you!

According to Silver Fern Farms, cuts will be available in New York and Los Angeles this month. They include Angus rib-eye, New York strip steaks, Ground beef, and other cuts.

This is a part of Silver Fern Farm’s “Net Carbon Zero by Nature” product line. They expect the beef line to be complete by 2030.

To meet its net-zero goal, Silver Fern Farms is using carbon credits.

“Taking care of our emissions is our responsibility, no one else’s,” says Silver Fern Farms CEO Simon Limmer. “We are not outsourcing our emissions.”

“Rather, we are recognizing and incentivizing our farmers for their efforts to create farm environments that are better able to capture carbon, increase biodiversity, and support nature positive food production.”

How do carbon credits work?

One carbon credit is equal to one metric ton of carbon. This metric ton of carbon is then “offset” through an environmental project.

Many different projects qualify for carbon credits. Reforestation, improved agriculture practices, crop rotation, and renewable energy are just a few of the most popular.

In this case, Silver Fern Farms has its farmers capture carbon through vegetation.

Limmer went on to say, “Through our Net Carbon Zero program, we are connecting our hardworking farmers with customers who want to support them to plant, restore, and regenerate vegetation to increase the amount of carbon their farms can naturally remove from the atmosphere. ”

“Down here in New Zealand, we believe we could just have the kinds of farms the world is waiting for,” says Limmer.

“We look forward to sharing Net Carbon Zero by Nature with our customers and taking another step together towards a positive nature future.”

Currently, Silver Fern Farms is New Zealand’s largest red meat producer. They export to 60 countries.

Nature Based Carbon Prices Drop 16% While European Prices Rebound 17%

Carbon Credits
-
0
Nature Based Carbon Prices Drop 16% While European Prices Rebound 17%

The carbon markets are seeing record volatility and swings, up and down, over the past week. The Nature-Based Carbon Price NGEO dropped over 16% to $9.68 – which is lower than it was ahead of the COP26 conference back in November 2021.

That’s is a record decline for the NGEO in its relatively short history.

The CBL Nature-Based Carbon Price had a record drop Tuesday, triggered by the threat of a western economic recession stemming from the Russian invasion and sanctions.

Going the other way, another record was set when the European Carbon price had its largest 1-day price gain in history.

The price spiked up over 17% on Tuesday, this follows a massive 30% decline that started with the Russian invasion of Ukraine.

The modern carbon market is still in its infancy as transactions and volumes continue to break year over year records.

Contributing to the volatility are higher energy costs could lead to less travel, both for work and pleasure. Even some airlines have begun to cancel flights due to fuel cost concerns.

It could be a real bumpy ride for a bit as the global economy has never really had to include carbon into the equation until now.

Carbon Credit Prices in China to Climb?

Carbon S
-
0
Carbon Credit Prices in China to Climb?

Prices on China’s new carbon credit trading system may rise as more industries join in.

Based on a recent survey conducted by consultancy ICF and SinoCarbon Innovation & Investment, new industries will include:

• Cement
• Steel; and
• Electrolytic Aluminum Manufacturers.

By 2024, petrochemicals, paper, chemicals, and aviation will likely join, too.

The survey involved 420 participants from research institutes, financial institutions, and local governments. Most respondents are from firms that are already watching their GHG emissions. Half are already registered within China’s Emissions Trading Scheme (ETC).

Experts believe this could cause the price of carbon credits in China to increase 78% by 2025 – and even more by 2030.

The Carbon Credit Industry in China and Around the World is Booming.

Both Compliance Carbon Markets and Voluntary Carbon Markets (VCM) are still strong in China. Demand for carbon credits and offsets are high (and supply is limited). The demand is mainly due to:

• Increased regulation,
• New global standards; and
• An increased awareness.

Simply put, one carbon credit equals one metric ton of carbon.

China’s ETS is a cap-and-trade model (compliance carbon market). This means that industries are provided with an allotted amount of carbon they can emit.

If they go over that amount, they need to purchase credits for every metric ton they are over. Basically, the credits serve as a fine. This encourages industries to reduce their GHG emissions long-term. Companies can also buy or trade these allowances based on their emissions.

According to the Ministry of Ecology and Environment, transaction volume reached 186.7 million tons in February. The total value was CNY8.1 billion ($1.3 billion).

China’s ETS only just launched last July. Currently, China’s ETS is the largest carbon trading hub globally. It covers 2,200 key power firms and around 4.5 billion tons of carbon emissions.

Carbon Marketplace NCX raises $50M

Carbon S
-
0
Carbon Marketplace NCX raises $50M

To meet net-zero objectives, companies across the globe are investing heavily in carbon offsets.

The carbon offset industry has boomed over the past year. In fact, the Voluntary Carbon Market (VCM) is now valued at over $1 billion. That’s up from just $300 million in 2018. And many experts believe it has the potential to reach $100 billion by 2030.

J.P. Morgan and Marc Benioff’s TIME Ventures seem to agree.

They took part in a Series-B led by Energize Ventures to support NCX – which raised $50 million.

What are carbon offsets, and why are they so popular?

Carbon offsets are tools that companies can use to “neutralize” their carbon emissions. This is done through various environmental projects.

Simply put, one carbon offset equals one metric ton of carbon.

NCX is a carbon marketplace that companies can use to find and purchase these carbon offsets.

First, NCX uses satellite images and machine-learning software to map forest areas. Once mapped, NCX serves as a go-between for companies and landowners to agree.

Suppose the landowners choose to refrain from cutting down their trees (for compensation). In that case, companies can claim those “offsets” against their own carbon emissions. It’s mutually beneficial – landowners are compensated, and companies can meet emissions goals.

So, if a landowner promises to keep trees intact, and a company pays them to do so, the company is doing something beneficial for the environment.

Note that many of these companies are working towards net-zero emissions. However, the technology to drastically reduce emissions or remove them altogether isn’t quite where it needs to be. So, offsets serve a purpose interim.

NCX then takes a percentage of the purchase price.

NCX was formerly known as SilviaTerra. It was founded in 2010 by two students who met studying forestry at Yale.

To date, NCX has raised $75 million.

AIG to Go Net Zero and Exit Coal / Oil Sands

Carbon Credits
-
0
AIG to Go Net Zero and Exit Coal / Oil Sands

American International Group Inc. (NYSE: AIG) is stepping up with its own net-zero pledge.

AIG has committed to reaching Net Zero GHG (Greenhouse Gas) emissions across its underwriting and investments portfolios by 2050.

They’ve announced that they’re not investing directly into or providing insurance for the construction of any new coal-fired power plants, thermal coal mines, or oil sands projects.

They have also taken it a step further and announced they are phasing out investing and insuring companies that get over 30% of their revenue from these industries.

The New York-based insurer is also halting investing and insuring all new Arctic energy exploration activities.

AIG has also committed to having 100% renewable energy for its operations by 2030.

“The data about climate change is unambiguous and we believe that AIG can be a catalyst for positive change as it relates to sustainability advancements and renewable energy expansion.” AIG Chairman and CEO Peter Zaffino said in the statement.

Last year AIG had revenues of over $52 Billion.

Xpansiv Expansion Ahead of IPO

Carbon Credits
-
0
Xpansiv Expansion Ahead of IPO

Xpansiv is planning an IPO on the Australian Stock Exchange later this year. But right now they are in full M&A mode.

They are cashed up and have started making acquisitions in a massive roll-up play in the carbon markets.

Xpansiv’s trading platform currently hosts over 90% of all voluntary carbon credit transactions globally.

In 2021, Xpansiv recorded $305 million in revenue (~300% higher than the prior-year).

Over 120 million tonnes of carbon were traded on its CBL Exchange last year (a 4x increase over 2020.)

Their platform is used by the largest corporations such as Walmart, Tesla, Chevron, Shell, and Goldman Sachs.

The platform matches companies needing to buy credits (to fulfill their net-zero objectives) and speculators/investors with carbon credit providers.

They recently teased a potential vertical integration acquisition called the “Moonraker” project in their latest investor pitch deck. The transaction is expected to be worth over $100 million.

They also recently announced to acquire a leading provider of registry infrastructure for energy and environmental markets – APX Inc.

Xpansiv had two $100 million funding rounds in the past 2 years and also a $40 million pre-IPO deal.

They are expected to raise more than $500 million in the coming weeks – placing them at a ~$2 Billion market cap ahead of them being publicly traded.

As more and more companies make NetZero pledges, the amount of capital being deployed in the carbon sector is growing every quarter.

Xpansiv CEO, Joe Madden has stated that “it was clear that there were trillions of dollars in mismatch there, and somehow that would have to get reconciled. And markets were where it was going to get reconciled.”

The Carbon Collapse in Europe

Carbon Credits
-
0
The Carbon Collapse in Europe

The events unfolding in the Ukraine and sanctions on Russia have created sentiment across the board – even in the carbon sector.

Many are fearful of the potential economic fall-out of the Ukraine invasion and also a decline in overall industrial demand.

Typically, spiking gas and power prices would also increase the price of carbon.

As higher natural gas price encourages some power generators to switch to cheaper and dirtier coal. Coal emits upwards of double the emissions of natural gas, so this should increase the demand for carbon permits – in theory.

Some are speculating that some participants are offloading their EUA positions to cover losses elsewhere.

Before Russia’s invasion of Ukraine, the EU carbon price was near an all-time high of close to 100 Euros, this followed a record 2021.

Analysts at Engie EnergyScan noted that the “fundamentals of the market, i.e., its increasing tightness, are not changed by the crisis and the current prices could be considered as attractive”

Some speculators may be in a holding pattern in regards to entering the market again and are likely waiting for a resolution to the conflict. But the overall macro view of the carbon sector still remains strong.

Could Carbon Markets Be Impacted Due to European Pipeline Freeze?

Carbon S
-
0
Could Carbon Markets Be Impacted Due to European Pipeline Freeze?

Germany has placed a hold on the Nordstream 2 underground natural gas pipeline, which runs between Germany and Russia. The channel is almost complete and operable.

This move by Germany will not impact the immediate supply of natural gas. However, it could affect Europe’s already strained natural gas resources – and impact carbon markets.

Natural gas and oil prices have increased.

Fears that Russia will withhold future natural gas have driven prices up to $90 per megawatt-hour. That’s an increase of 10%.

The price of oil – also a Russian export to Europe – rose 1.5% ($99.50 per barrel). This is the highest level Europe has seen since 2014.

U.S. natural gas prices also increased, though less than in Europe.

Luke Oliver, Managing Director and Head of Strategy at KraneShares, told ETF trends, “Halting certification of the Nordstream2 gas pipeline will put increasing pressure on natural gas prices, which in turn make fuel switching from coal to gas more expensive and increases demand for carbon allowances.”

Simply put, if the price of switching from coal to gas is higher, the demand on carbon markets may increase even more.

Oliver went on to say, “This puts pressure on the entire energy complex. This is no doubt positive for a carbon price, albeit sadly not necessarily positive for emission reductions.”

Per Oliver, “2022 has been an interesting year already for carbon markets. With new proposals around upper price band triggers, we’ve seen some volatility; however, our modeling would suggest that even IF the proposal was adopted, it wouldn’t meaningfully limit upside potential.”

Only time will tell how this will impact the energy sector and carbon markets.

Regardless of what will be, one thing is for sure: we all hope for peace in the region.  

Chevron to Buy Renewable Energy Group for $3B?

Carbon Credits
-
0
Chevron to Buy Renewable Energy Group for $3B?

According to various outlets,  Chevron Corp. (NYSE: CVX) is closing in on buying Renewable Energy Group (NASDAQ: REGI) Inc. for ~ $3 Billion.

Chevron is looking at paying $61.50 per share for Renewable Energy according to the sources close to the deal.

Renewable Energy stock climbed over 36% in after-market trading on the pending news.

The official announcement could be made as early as next week, but the terms and talks could still fall through.

This would be a major push for Chevron’s energy transition into renewable fuels. Renewable energy demand is expected to grow in the coming years as organizations and governments follow through on their decarbonization pledges.

Chevron earlier stated they are tripling their low-carbon investments to $10 Billion through 2028.

ESG Accounting Problems

Carbon Credits
-
0
ESG Accounting Problems

The meteoric rise in ESG related debt is creating some accounting problems. Advocates are now urging for more regulations and rules with the increasing demand for ESG bonds.

Environmental, Social, and Governance (ESG) bonds are debt instrument that has socially-responsible and environmentally-friendly criteria (such as low carbon emissions).

This affects the borrowing rate, the higher the ESG criteria the lower the interest rate.

According to Moody’s, the ESG bond market is poised to hit $1.4 trillion in 2022.

But the accounting rules for determining liabilities and assets are not keeping pace with the booming market.

The ESMA (European Securities and Markets Authority) found that many firms are applying different valuation models to their assets and liability.

This has the potential to “negatively affect the decision-making of financial market participants and thus the efficient functioning of capital markets” ESMA told Bloomberg.

ESMA expressed concerns that existing plans by the International Accounting Standards Board (IASB) to oversee the market are not moving fast enough.

Many are asking for specific guidelines for valuing financial instruments whose interest rates change based on environmental, and social targets.

Most banks want IASB to adopt a standard that’s based on valuing an asset at a so-called “amortized cost”.

They say that using the “fair value” model can put risks making profit and loss statements more volatile.

Bloomberg found that back in September 2021, more than 25% contained no penalty for missing their ESG goals, and only a marginal discount if targets are met.

1...123124125...148Page 124 of 148