Cannabis Company HEXO Achieves Carbon Neutrality

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Cannabis Company HEXO Achieves Carbon Neutrality

Canadian-based HEXO Corp. (TSX: HEXO; NASDAQ: HEXO) announced they have reached carbon neutrality, offsetting 100% of their 2020 operational emissions, plus the emissions of their 1,200 employees.

To achieve their carbon-neutrality goal, HEXO partnered with Offsetters. This Vancouver-based organization supports renewable energy and forest carbon projects across the globe.

“At the start of the summer, we pledged that HEXO would not only become carbon neutral, but that we would also offset the personal carbon emissions generated by every one of our employees. Today we are proud to say we have achieved our goal, setting a new standard in sustainability for our industry,” said HEXO Corp. CEO and Co-founder, Sébastien St-Louis. “Consumers and investors demand greater environmental and social integrity from companies. We are proud to share our commitment to sustainability and support our consumers’ ability to purchase products that align with their values.”

HEXO is a leading cannabis producer in Canada and one of the top three in the world. They wanted to focus on offset projects that would support environmental initiatives taking place in Canada and globally.

In Canada, HEXO is supporting the Create Bear Forest Carbon Project. This is the first carbon project in North America on traditional territory, with unextinguished Aboriginal rights and titles. Globally, HEXO is supporting a large-scale solar energy project in Asia and a forest conservation project in South Africa.

In addition to offsetting carbon emissions, HEXO has partnered with Dymapak and Plastic Bank® to offset 63,000 kilograms of plastic. They are also working towards collecting 8,000 kg of ocean-bound plastic, preventing 3.55 million plastic bottles from entering the world’s oceans.

HEXO set this goal for themselves in June and achieved it by September through carbon offsets. They have offset a total of 25,965 tons of carbon. If other companies across Canada and the world followed suit, it is safe to say many more can achieve carbon neutrality.

The carbon market is expected to reach $22T by 2050. Success stories such as HEXO will only increase interest and growth. And, after seeing these results, there is no doubt that offsetting carbon is, and will continue to be, integral in the fight against climate change.

Carbon Capture Companies are sucking up CO2 and Investor Interest

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Carbon Capture Companies are sucking up CO2 and Investor Interest

Climeworks, a Swiss-based company that currently owns the world’s largest Direct Air Capture plant, are seeing a boost in interest from governments and investors alike. The reason? We are in a “code-red” climate crisis, and these organizations know it.

In early September, Climeworks opened their new plant, Orca, the largest in the world. It is expected to remove 4,000 tons of carbon from the air annually, using giant fans equipped with filters. Once captured, the carbon is then pumped deep underground, where it is turned to stone.

Last month, Climeworks won a $10 million deal to sell carbon credits to Swiss Re to help the reinsurance giant reach net-zero emissions. Other clients include Microsoft, Stripe, and Audi.

According to Co-Founder and Co-CEO Christoph Gebald, “When we started in 2009, many people were against, or recommended not to proceed with direct air capture. It’s a stark contrast with now.”

With interest in direct capture so high, Climeworks plans to build a second, larger plant in Iceland.

Backers of these technologies say that they need governments to support them through subsidies and fast. The price tag for carbon removal projects is high. Demand is only expected to increase after the U.N. Intergovernmental Panel on Climate change (IPCC) constituted a “code-red for humanity.”

U.S. President Joe Biden has proposed spending $3.5 billion on four different direct-air capture hubs. And, in July, Kansas-based engineering firm Black & Veatch won $2.5 million from the U.S. Department of energy for the research and development of a project using Global Thermostat’s technology to capture 100,000 tons of carbon each year.

Canadian-based company Carbon Engineering is working on a facility to capture up to a million tons of carbon annually in the U.S. They are also working alongside British firm Storegga on a plant in Scotland that could capture between 500,000 and one million tons each year as well.

Between direct air capture and carbon offsets – which are expected to hit $22T by 2050, a net-zero future feels within reach.

Millions May Move Due to Climate Change

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Millions May Move Due to Climate Change

The World Bank’s latest Groundswell report found that over 216 million people could move within their countries by 2050, as they seek refuge due to climate change.

If you are wondering why climate change would cause people to move, you are not alone. Many are confused about how climate change and mass migration relate.

Though they hear about climate change daily, they don’t fully understand how it can impact their lives. So, this report and a previous report by Groundswell are important.

You see, climate change doesn’t just affect wildlife and nature. It affects people who live within the environment, too. So, when these changes take place, it upsets the dynamics between populations and their economic development.

Just think, as water becomes less available or crops cannot be produced, people flee. People do not have water for basic needs; farmers do not have water to grow crops. Food becomes scarce, and economic opportunity is limited. Same when an area has rising sea levels or extreme weather – people cannot live where their safety is at risk.

If climate change continues, can you blame people for leaving areas most impacted? Most would have to find somewhere better to live – for the sake of themselves and their families. The trouble is, where will they all go?

According to Groundswell, mass migration patterns will emerge in 2030 and increase in intensity by 2050. Unfortunately, many areas may not have the infrastructure or resources to support these booming populations. This can place existing residents at risk, especially the most vulnerable.

Both Groundswell reports provide policy recommendations that can help regions slow and prepare for migration. However, quick, and targeted action across the globe to combat climate change could reduce these patterns by 80%. And let’s face it – reducing these patterns is really the best option. At the end of the day, people do not want to leave their homes – they just want to have the best lives possible within them.

The report’s lead authors, Kanta Rigaud and Viviane Clement believe there is hope. “Cutting emissions and ensuring that development is green, resilient, and inclusive is at the heart of curbing the human cost of climate change. At the same time, countries can also anticipate and prepare for the drivers of migration…by supporting communities to adapt in place by diversifying livelihoods or by facilitating mobility when needed.”

Carbon offsets may be the best solution. They help reduce carbon within the atmosphere and can boost socio-economic opportunities in areas most at risk.

Based on Groundswell’s latest report, it will be interesting to see how various regions react and prepare. The data is there: climate change is a significant threat to civilization as we know it. We can no longer idly sit by.

The time to act against climate change is now.

1st Carbon Credits Produced by State Run Trees

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1st Carbon Credits Produced by State Run Trees

The Bluesource/DNR Big Wild Forest Carbon Project will be the first forest in the United States to be state-run and produce carbon credits at the same time.

The forest covers 3.9 million hectares of state-run property in Michigan.

DTE Energy (DTE), the largest power supplier in Michigan, and The Department of Natural Resources (DNR) of Michigan came to an agreement regarding the project.

As a result, DTE will severely reduce its carbon footprint. The DNR will also add around $10 million dollars of revenue streams.

Following the announcement, the Governor of Michigan, Gretchen Whitmer said “To meet our long-term commitment to decarbonization, we need to utilize innovative partnerships to increase revenues for land and climate programs.”

Michigan can increase offsets by producing more carbon credits but also produce further revenue from the sale of carbon credits.

Each tree absorbs up to 48 pounds of carbon emissions. A tree that is 40 years old can store 1 ton of carbon. As a result, 3.9 million hectares of land full of trees would make a significant impact on emissions in Michigan.

DTE is aiming to be carbon neutral by 2050. As well, DTE will start receiving carbon credits in 2022 in exchange for payments to the state of Michigan. With the carbon race heating up, every measure is required.

European Central Bank to Examine Banks’ Expose to Climate Risk

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European Central Bank to Examine Banks’ Expose to Climate Risk
The European Central Bank (ECB) will examine large banks’ trading operations as part of its climate stress tests next year.
 
The ECB, which has not yet disclosed the criteria of its tests. It is expected to include a review of the operational & reputational risks that banks face.
This comes after determining that a review of the loan books alone would not provide enough insight into the exposure to climate change.
 
Inquiring into banks’ trading practices is an additional obstacle for an industry that has already warned that it would be unprepared for next year’s climate stress test.
 
Politicians in Europe want banks to play a crucial role in combating climate change by diverting capital away from polluters.
The ECB is requesting more information than other central banks and has increased pressure on the industry to fulfill the deadline.
 
Banks with carbon-intensive balance sheets may face increased capital requirements. This could in turn reducing their ability to pay dividends.
 
The ECB is also asking banks for data on emissions connected with their revenue. This is an approach that the Bank of England omitted for its climate tests this year due to a lack of relevant data.
 
EU banks will have to estimate the carbon footprints of their interest and fee income. The banks will also have to provide data on their biggest clients that they provide loans to.
 
This additional disclosure is another layer of complication to the procedure. But the extra data is expected to allow the ECB to see what would happen to portfolios if they are subject to the losses of carbon-intense companies.
 
Both the Bank of England and the ECB are encouraging lenders to use a 30-year horizon when analyzing their balance sheets and the risks associated with a transition away from polluting industries.
 
The Bank of England is requiring banks to also assess physical risks such as extreme weather or wildfires over a three-decade horizon.

Chevron Triples its Low-Carbon Investment to $10 Billion

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Chevron Triples its Low-Carbon Investment to $10 Billion

Chevron recently announced a $10 billion dollar investment into low carbon business initiatives. Half of that budget will be spent on reducing emissions from fossil fuel initiatives.

Here is the breakdown of the investment:

    • $3 billion for Carbon capture and offsets
    • $2 billion on reducing greenhouse gas
    • $3 billion on renewable fuels
    • $2 billion on hydrogen energy

To achieve this Chevron will increase:

    • Renewable fuels production to 100,000 barrels per day
    • Renewable natural gas output to 40 billion British thermal units (BTUs) per day.
    • Hydrogen production to 150,000 tonnes per year to provide industrial, power, and heavy-duty transportation clients
    • Carbon capture and offsets to 25 million tonnes per year.

This $10 billion investment’s goal is to reduce greenhouse gas emissions from its oil and gas production by 35 percent by 2028.

The company will be releasing its climate report later this year and will revisit its net-zero goal at that time.

Critics have stated that Chevron’s focus is on offsetting emissions from oil and gas production rather than lowering oil output.

European oil companies have set the benchmark for the transition away from fossil fuels by investing more in renewables and meeting 2050 emission objectives.

Chevron CEO, Michael Wirth, said the only a small percentage of the company’s shareholders presently support a European oil company strategy of investing in less lucrative solar and wind power.

US-based Chevron, Exxon, and Occidental Petroleum have also pledged to cut carbon emissions by supporting carbon capture and storage and doubling down on oil.

Commercial Real Estate Investment Firm to Offset Carbon Internally

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Commercial Real Estate Investment Firm to Offset Carbon Internally

The commercial real estate industry contributes between 30% and 40% of global carbon emissions each year.

To combat the amount of carbon being pumped into the atmosphere, a property trust has chosen to make an investment this week that could revolutionize the commercial real estate industry.

Standard Life Investments Property Income Trust (SLI) purchased 1,447 hectares (3,575 acres) of land in Cairngorm National Park in Scotland.

The objective is to plant 1.5 million trees to offset carbon emissions from its property portfolio. Their market cap is currently listed as £275 million.

While commercial real estate companies have been looking into energy-efficient retrofitting, solar installations, and carbon credit purchases, SLI has taken carbon offsetting to the next level by offsetting their own carbon themselves.

They purchased the property for £7.5 million, with the cost of planting trees covered by grants.

SLI is paying approximately £38 per ton of carbon (about $53 US dollars per ton). Since the global carbon market is expected to boom to $22T by 2050, it’s safe to say that SLI sees potential for growth and profits. The project is expected to offset 195,630 tons of carbon until 2060 – representing 73% of the company’s carbon output.

In addition to this land purchase, SLI installed a major Photo Voltaic (PV) solar panel scheme on one of its assets. The panels are expected to save the equivalent of 229 tons of carbon in the first year. SLI is also looking to roll out additional solar panel installations across its portfolio.

With environmental, social, and governance (ESG) issues at the forefront of SLI’s mind, Jason Baggaley – SLI’s Manager – has recently sold several older assets, utilizing funds to invest within more sustainable properties.

Reducing carbon emission continues to be at the top of consumer, company, and government agendas. SLI’s forward-thinking initiatives should present a lucrative opportunity for years to come. If more commercial real estate companies follow suit, carbon emissions will drop, revenues will increase, and the environment will improve.

Could the price of oil hit $200 a barrel because of climate change?

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Could the price of oil hit $200 a barrel because of climate change?

Oman’s energy minister warned conference attendees recently “Recommending that we should no longer invest in new oil… I think that’s extremely dangerous.”

His biggest fear is that if we abruptly stop investing in fossil fuel, “there will be energy starvation, and the price of energy will just shoot (up).”

The United States Energy Information Administration’s long-term projection issued in February anticipates crude oil to hit $89 in the US in 2030 and $185 by 2050.

They admit that several factors could impact these figures, including other supply sources, access to renewable energy, and emissions taxes.

According to S&P Global Platts, OPEC is worried. Their concern is that an increase in oil prices could affect market volatility and threaten oil project investments.

Their concerns haven’t seemed to stop the push for net-zero emissions. Carbon pricing is taking off as global carbon markets continue to expand. In fact, countries that represent 70% of the global gross domestic product are committed to meeting international climate objectives – with all eyes set on eliminating emissions.

The Minister for Industry and Advanced Technology in the United Arab Emirates, Sultan al-Jaber, is not as concerned. “Even in the most ambitious energy transition scenario, oil and as will still be needed for many decades to come.” He went on to say that the Middle East’s reserves account for many of the least carbon-intensive barrels globally.

International Energy Director Fatih Birol said, “It’s an interesting race. Unless everybody finishes the race, nobody wins the race.”

If the oil industry can find ways to utilize its resources to achieve net-zero emissions goals, it may very well flourish — all while helping the world meet its 2050 deadline. With a bit of ingenuity and some unexpected partnerships, concerns of massive increases may become a thing of the past.

Moody’s Warns Carbon Intense Industries Will Be Hit Hardest

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Moody’s Warns Carbon Intense Industries Will Be Hit Hardest

Moody’s report on the economic impacts of carbon pricing confirms what most thought: carbon-heavy producers and carbon-heavy consumers will be negatively impacted. However, those investing in carbon-neutral technologies will be poised for growth.

There are two distinct and practical ways that carbon pricing takes place:

• Tax on emissions put in place by governments; or
• Through carbon markets where carbon credits are bought and sold

The practice of carbon pricing has been endorsed by the International Monetary Fund, the World Bank, and the Organization of Economic Co-operations and Development. Currently, 40 national and 25 sub-national jurisdictions have put a price on carbon, with 21.5% of global carbon emissions covered by carbon pricing instruments. This is up from 15.1% in 2020.

Even China – the largest carbon emitter in the world – created its own carbon market. The global carbon market is expected to reach $22 trillion by 2050.

In a press release, Moody’s Vice President and Senior Analyst Anushka Shah said, “In an indication of growing commitment to decarbonization and mid-century net-zero emissions targets, policymakers globally are increasingly advocating carbon pricing systems.”

Right now, the average price for emissions is $2 per ton of carbon – which is not quite at the $25 per ton required per the Paris climate agreement. But governments and businesses are working on getting there. If anything, this report by Moody’s shows, it is truly in their best interest to do so.

According to the Federal Reserve, the total economic cost of a business-as-usual approach to climate change will be $2 trillion more than meeting the Paris targets by 2050 and $50 trillion more by 2100. So, while carbon pricing may seem costly to governments and industries now, the cost of not doing so is far more expensive in the long run.

No matter the economic impacts of carbon pricing, Moody’s said they are preferable to what will happen if the world fails to combat climate change. “The cost of inaction on controlling emissions will accumulate with much greater social and economic costs in the future.”

World’s Largest Carbon-Removal Machine Makes Debut

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World’s Largest Carbon-Removal Machine Makes Debut

There is no question about it: carbon must be removed from the atmosphere to stop global warming. This can be achieved through carbon offsetting, which, though highly effective, is a longer process, and through “direct air capture” (DAC).

If you are wondering what DAC is, you are not alone. DAC is essentially massive CO2-vacuums that suck carbon out of the air immediately.

The largest DAC plant in the world made its debut in Iceland this week and is operated by the Swiss engineering startup Climeworks. The plant, known as Orca, will draw in a volume of emissions equal to approximately 870 cars annually. It will reach global capacity by about 50%, adding a dozen smaller plants throughout Europe, Canada, and the US.

Each plant is composed of eight container-sized boxes that use fans to pull in air. CO2 is then filtered out, mixed with water, and pumped into underground wells, where after some time, it turns into stone.

The objective is to sell the captured CO2 stones to manufacturers that can use them for raw materials. The price per carbon unit seized and then converted is currently unknown.

Before launching Orca, Climeworks signed a deal with insurance company Swiss Re for an undisclosed volume of carbon offsets. Though the price per ton hasn’t been made public, Swiss Re press release stated it was “several hundred dollars.”

Though DAC provides an excellent alternative to carbon offsetting, critics aren’t so sure. The cost of building and operating these machines can be exponential. Plus, to be truly effective, the DAC industry will need to remove nearly 10 million tons of carbon per year by 2030, which is a long way away.

With more premium offset projects entering the global carbon market, offsets are uniquely positioned to benefit companies and farmers alike.  Still, DAC is an essential aspect of combating climate change. It can remove carbon at a faster rate while providing companies with eco-friendly materials.

Combined, DAC and carbon offsetting have the potential to make a real difference, helping the world achieve net-zero goals.

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