CBL Xpansiv Sees Exponential Growth

Carbon Credits
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CBL Xpansiv Sees Exponential Growth

The global carbon market is expected to reach $22T by 2050 as more companies and investors look for ways to reduce their emissions.

The Paris Agreement is partially responsible for this boom. However, calls for action by world leaders and increased awareness are fueling interest too.

With the UN issuing a ‘code red’ warning and leaders across the globe recommitting to do more for the environment, carbon credits and offsets are a viable solution. The industry combats climate change by reducing greenhouse gases and can help spark economic development around the world.

CBL – Xpansiv is the largest global exchange platform for energy and environmental commodity products, such as carbon, renewable energy, water, and natural gas. And, according to an Ecosystem Marketplace survey that was just released, business is booming.

70.6 million tons of carbon were traded on CBL through August of this year – an increase of 27% from last year. Their market share is currently up 15% from 2020 and 9.4% in 2019.

A record monthly volume of 15,113,044 tons was transacted in August, which is 14% higher than their previous record set in March and 812% higher than transactions in August of 2020. Year-to-date carbon volumes through August totaled 70,623,218 tons (up 291% compared to last year)!

In addition, the adoption of CBL’s GEO and N-GEO VCM benchmarks has grown exponentially, with total volume increasing 29% (2,810,693 tons) in August alone.

Since the beginning of August, both have surged in price, with the GEO rallying from $3.50 to a record high of $7.75 and the N-GEO rising from $5.45 to a record of $8.00.

As carbon markets and projects continue to grow, companies like Xpansiv have shown a dedication to transparent markets, seamless transactions, and high-quality products. With verifications in place and data continuously refined for accuracy, these figures show that the carbon market has real promise and potential.

*Data courtesy of Xpansiv.

Japanese Shipping Giant Invests in Australian Carbon Credits

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Japanese Shipping Giant Invests in Australian Carbon Credits

Japanese shipping firm, Nippon Yusen Kaisha (NYK), announced that it has invested in Australian Integrated Carbon (AIC), an Australian company that offers carbon credits gained from primeval forest restoration initiatives.

The investment is part of NYK’s effort to minimize greenhouse gas (GHG) emissions from ships by utilizing the carbon offset technique.

The investment entails participating in projects that reduce and absorb emissions elsewhere or acquiring carbon credits.

“With this capital participation as a foothold, NYK will acquire knowledge of the carbon credit creation business and aim to expand its business in Australia and also expand the project to other regions such as the United States,” the company said in a statement.

While the financial specifics of the sale were not disclosed, AIC announced earlier this year that Mitsubishi Corp had bought a 40% share.

AIC sells credits gained from CO2-sequestrations achieved in the regrowth of Australia’s native forests via a method known as human-induced regeneration.

It incorporates new land-management strategies to aid in the regeneration of native woods that have been destroyed over the years due to logging and overgrazing.

Through its portfolio, the company hopes to reduce global CO2 emissions by 100 million tons in the future. The carbon credits can subsequently be sold through the Australian government’s Carbon Farming Initiative (CFI).

Since 2015, the Australian government has committed more than A$4.5 billion ($3.25 billion) to the establishment of the country’s carbon credit auction market, the size of which had reached 16 million CO2 tons by 2020 and is now one of the largest in the world.

Global Benchmarks for Voluntary Carbon Markets

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Global Benchmarks for Voluntary Carbon Markets

The ‘Taskforce on Scaling Voluntary Carbon Markets’ is a private sector initiative working to scale the voluntary carbon credit market to help meet the goals of the Paris Agreement.

They recently formed a new, independent governing body to set global carbon credits and offsets benchmarks.

The Taskforce will have 22 Board members from 12 countries – half of which are from the global south. Over 250 organizations will be a part of creating the international standard.

Companies, investors, and individuals see value in the carbon credit and offset industry. However, critics worry about offset project quality and the way carbon is measured and priced. Practices such as greenwashing and double washing are cause for concern as well.

Plus, if different areas have different emissions standards, progress can be affected.

The Taskforce recognizes that these issues could prevent the carbon market’s success. In addition to creating global benchmarks, they are committed to addressing greenwashing, double-washing, and regional differences. Their goal is to make sure the carbon market delivers as promised.

UK Voluntary Markets Forum’s Chair Dame Clara Furse said, “Carbon credits are an important step in securing a path to net-zero. The work of the Taskforce has been essential in setting out a clear pathway towards significantly scaling voluntary carbon markets, whilst ensuring they are transparent, well-governed, verifiable, and robust.”

The threat of climate change is real, and carbon credits and offsets are a viable solution.

Global benchmarks and additional verifications will only help improve the market moving forward. With the global carbon market expected to hit $22T by 2050, these reforms are needed.

Carbon Offset Transactions Continue to Increase

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Carbon Offset Transactions Continue to Increase

Companies across the globe are racing to meet climate change targets. Their solution? Carbon credits, which have topped $748 million this year. If demand continues, carbon credits may even reach $1 billion by the year’s end.

If you aren’t familiar with the carbon credit industry, here’s how it works:

Credits are purchased through the carbon marketplace. One credit equals one ton of carbon offset through an environmental project.

The most active offset buyers are within the energy, consumer goods, finance, and insurance. Investors have increased speculative buying from those looking to profit from trading offsets as well.

Right now, offsets from forestry and land use are the most popular. Renewable energy is at a close second.

Carbon credits are a win for companies, and individuals, who can use these credits to offset their emissions. They also benefit those completing these projects, such as farmers in underdeveloped regions.

Some skeptics feel the carbon market doesn’t deliver what it promises. They are concerned about the lack of regulation and oversight. The former Governor of the Bank of England, Mark Carney, recognizes this and is working on designing new rules that can improve the system.

Other critics say that some offset projects, such as those focused on renewable energy, are unnecessary. Governments and companies worldwide are switching to cleaner forms of power even without the credit industry, which is why two market programs have stopped offering them.

While it is fair to say that some reforms to the system are necessary, renewable energy is still an integral part. The more investments being made into it, the better. Plus, the verification process is not a free-for-all. Procedures are in place to ensure that the market is accurate. And, with interest booming, operations will only get better.

The call to meet ESG demands is loud and clear. With the world seeking to reach carbon neutrality and net-zero emissions, it’s no wonder that interest in carbon offsets continues to grow.

UBC Trust Commits $120M to Reduce Carbon

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UBC Trust Commits $120M to Reduce Carbon

The University of British Columbia’s (UBC) Endowment Fund, the UBC Investment Management Trust (IMANT) has committed $120M to seed a Paris Aligned Reduced Carbon Global Equity fund.

This is in addition to their $110M funding of the Sustainable Global Opportunities Strategy that was announced in March.

UBC IMANT has partnered with Arrowstreet Capital to select MSCI’s Paris Aligned Index as the benchmark for their portfolio construction. Their seed in this investment accounts for about five percent of UBC’s Endowment. Their ‘Responsible Investing Strategy’ is committed to a low carbon, sustainable future, to reduce their carbon portfolio by 45% in 10 years.

As other companies follow UBC’s lead, many hope to achieve net-zero emissions by 2050. Some are finding ways to do so through carbon offsets. This is especially true as regulations from the Paris Agreement get closer – with many just a few short years away. Countless nations have even recommitted their efforts to reduce carbon since they recognize they aren’t where they should be.

“This significant investment demonstrates UBC IMANT’s targeted and ongoing approach to addressing the impacts of climate change,” says Yasir Mallick, Senior Portfolio Manager at UBC IMANT. “We are thankful to our investment partner for working with us to incorporate a carbon risk budget aligned with the 2015 Paris Climate agreement in their portfolio construction and optimization process.”

Dawn Jia, UBC IMANT’s President, and CEO said that “We seek out partners – both our peers and investment managers – that share this mindset and are willing to be innovative in tackling complex problems.”

When describing climate change, “complex” may be an understatement. Combating climate change is quite complex and challenging, to say the least!

The latest Groundswell report from the World Bank shows that mass migration due to climate change could start as early as 2030. And a recent announcement from the UN said that increases in the earth’s temperature would be “catastrophic.” Even top religious leaders have joined together to ask the world to take action.

Announcements, such as UBC’s, are what the world needs. To make an impact, all countries, companies, and individuals have to do their part. Slowly but surely, we are getting there.

Is the U.S. on Track to Decarbonize Economy?

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Is the U.S. on Track to Decarbonize Economy?

The recent budget bill passed by the House Ways and Means Committee provides unprecedented funding to do so, but those funds aren’t a guarantee. Once brought to Congress, the funds could very well be cut in half – or more. Even so, the amount would still be the highest level of support thus far by the U.S. government towards the support of an energy transition.

The Democrats believe this energy plan to be one of the most important pieces of climate legislation that Congress has the chance to pass, and they are focused on ensuring that it goes through. With Republicans, and some Democrats, opposed to additional spending, as well as a large American voter base opposed to climate initiatives at large, there may be a long path ahead.

Still – this is a lucrative step and a positive one at that.

If the House and Senate can work out their differences and determine what would drive clean emissions, we may very well see some progress take place.  Among other things, as part of the bill, the Ways and Means Committee would like to extend the current renewable energy tax credits and expand them to new technologies. This can offer a direct-pay option for several tax breaks and provide higher payments to projects completed by union workers.

There is interest in including carbon pricing by the Senate Finance Committee – though not all are on board.

With U.S. President Joe Biden expressing the need for the U.S. to take more drastic action against climate change, and the countries across the globe recommitting to the Paris Agreement, it will be interesting to see what happens next.

Hopefully, Congress can look back on their vote with pride instead of regret.

Ontario Teacher Pension Plans Pathway to Net-Zero by 2050

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Ontario Teacher Pension Plans Pathway to Net-Zero by 2050

Ontario Teachers’ have taken their decade-long support for the environment a step further.

Their Pension Plan Board has put 2025 and 2030 targets in place to reduce greenhouse gas emissions. The goal? To achieve net-zero investment activity by 2050.

Here are some of the ways they plan on getting there:

  • Increase investments in clean energy companies that reduce demand for fossil fuels and build a sustainable economy.
  • Pivoting towards green investment asset classes
  • Investing in transition assets to secure reductions in carbon emissions
  • Set their portfolio companies on a clear path to implement net-zero plans & reduce emissions
  • Issuing green bonds & invest proceeds into climate solutions and sustainable companies
  • Set clear climate policies and partner with other industry leaders to effect global change
  • Reporting annually on progress against 2025, 2030, and 2050 targets.

President and CEO Jo Taylor said, “As an active, global investor, we play a critical role in helping accelerate the transition to a net-zero economy. Given the scale and complexity of our investment portfolio, we believe this is an ambitious plan that will meaningfully lower emissions and contribute to the plan’s long-term sustainability.”

As of June, Ontario Teachers’ portfolio included more than C$30B in green investments, such as renewable energy, energy storage, electrification, electricity transmission, energy efficiency, and green real estate. They also have C$5B allocated towards climate and transition solutions.

To think that even more funds will be invested in ESG initiatives is a reason for Canadians and the world to celebrate. Maybe other pension plans in Canada and the United States will follow the Ontario Teachers’ lead. If they do, the world may reach its Paris Agreement targets and begin to see the environment improve.

Ontario Teachers’ currently have C$227.7 billion in net assets (as of June), with 80% managed in-house. The annual total fund net return has been 9.6% since the plan started in 1990.

“Climate change permeates the entire investing landscape. Tackling it requires substantial effort and massive amounts of capital,” said Ziad Hindo, Chief Investment Officer. “By significantly growing our portfolio of green investments and working collaboratively with our portfolio companies to transform their businesses, we can make a positive impact by encouraging an inclusive transition that benefits our people, communities and portfolio companies.”

Opportunities and interest in environmental programs are rising, with global carbon markets expected to hit $22T by 2050. If more pension plans choose to set the same ambitious goals, the world will see real progress.

Ontario Teachers’ have not only set an example for their students about supporting causes you care about, but for the world at large.

Shell Sets Sights on Sustainable Aviation Fuel

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Shell Sets Sights on Sustainable Aviation Fuel

Royal Dutch Shell will start producing low-carbon jet fuel by 2025. Currently, aviation accounts for 3% of greenhouse gas emissions across the globe.

Though the aviation industry has wanted to reduce its carbon emissions, it has been a real challenge. There are not many fuel alternatives available that can power jet engines. And, the sustainable aviation fuel (SAF) that is accessible costs about 8x more than standard fuel does. Because of the price and availability, SAF accounts for less than .1% of the fuel being used for planes today.

Regardless, Shell is focused on producing 2 million tons of SAF, which could cut up to 80% of aviation emissions. SAF is made of waste from cooking oil, plants, and animal fats. Shell is working on a synthetic aviation fuel that is made from hydrogen and recycled carbon.

Shell’s announcement couldn’t come soon enough. Just last week, the US announced that their goal is to cut greenhouse-gas emissions from aircraft by 20%.  Since Shell – one of the largest oil traders globally – has committed to SAF, it’s safe to say other producers will follow. The US goal could be a reality.

Anna Mascolo, Head of Shell Aviation, said that “Sustainable aviation fuel, whether bio SAF or synthetic SAF, remains the single biggest solution [to meeting emission reduction goals].” Shell’s refinery expects to produce 820,000 tons of fuel, with SAF making up half of that.

With news of warming temperatures and the need for immediate action, this is a step in the right direction. Interest in carbon markets is increasing, offsets are taking the lead, and technological advances (like SAF) are being pushed ahead. Plus, numerous countries have re-committed themselves to the Paris Agreement – an act of solidarity and action.

It seems that change is happening for the better.

Cue cautious optimism.

The World is on a ‘Catastrophic’ Path

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The World is on a ‘Catastrophic’ Path

The earth’s temperature is on track to increase heat by 2.7 degrees Celsius (or 36.8 degrees Fahrenheit). UN Chief Antonio Guterres warned that such an increase in temperature would be “catastrophic” and called on the world to act.

If the earth were to increase 2.7 degrees Celsius, Paris climate agreement figures aimed for warming below 2C would be destroyed. Guterres went on to say that “Failure to meet [climate goals] will be measured in the massive loss of lives and livelihoods.”

Unfortunately, many nations have been slow in responding to the Paris agreement, failing to slash emissions or aid climate-vulnerable countries. With temperatures rising, the opportunity to make a difference is starting to close.

In response to these findings, US President Joe Biden said that “We have to act, all of us, we have to act now.” He urged the world to bring its highest ambition to the UN Climate Conference taking place in November.

As of now, the earth’s average temperature will be 1.5C higher around 2030, which is a decade earlier than projected just three years ago. The Organization for Economic Co-operation and Development said they were disappointed in the progress made. UN Climate Chief Patricia Espinosa said that “Overall greenhouse gas emission numbers are moving in the wrong direction.”

If you think about it, the world is already seeing extreme weather patterns that have resulted in the loss of life and property. No country or person is unaffected by climate change. All can see the impact climate change has on their own lives and lives worldwide each day. What more do people need to get on board? Without action, these disasters will only continue to increase.

As discouraging as this news is, hope is not lost. 113 countries – including the US and those within the European Union have updated their pledges, expressing their commitment to carbon neutrality and net-zero emissions.

The carbon market is also expanding, which can reduce emissions and support socio-economic issues – providing companies and individuals alike the opportunity to grow.

As interest in the carbon market increases and more offset projects take place, these figures can improve. However, the fight against climate change can no longer be conducted by a brave few. The world needs to get on board by combating climate change together.

Carbon Markets Propel Forward Expected to Reach $1B in 2021

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Carbon Markets Propel Forward Expected to Reach $1B in 2021

According to a new report from Ecosystem Marketplace, carbon markets are on track to reach $1B before the end of the year.

This is a 60% increase from last year, driven by companies focused on achieving net-zero emissions.

To meet the Paris Agreement’s 1.5° target, the world will have to cut pollution levels in half by 2030. The goal is to reach net-zero emissions by 2050.

Stephen Donofrio, the report’s lead author, said, “We’re seeing record market volume and value in 2021. The markets are on track to hit $1 billion in transactions this year if current activity levels and growth continue. It’s not just companies buying carbon credits as a small piece of their net-zero corporate strategy.

There’s an increase in speculators purchasing credits. The combined value of those deals is becoming a serious source of finance for green projects around the world.”

To help ensure carbon credit quality and standardization, the Taskforce on Scaling Voluntary Carbon Markets (TSVCM), led by Mark Carney, UN special envoy for climate action and former Governor of the Bank of England, is forming an independent Governance Body.

Annette Nazareth, the Taskforce’s Operation Lead and former SEC commissioner, said, “The new Governance Body being established by TSVCM will play a key role in ensuring the large volume of carbon credits traded are of high quality and integrity.”

Since the supply of environmental projects is tightening, credit prices have gone up. Patrick Maguire, one of the report’s lead authors and Senior Manager of Ecosystem Marketplace, says that “Whether the higher prices will entice new supply to enter the market quickly enough to meet rising demand is still an open question. Most carbon projects typically take years to develop.”

Regardless, the higher prices are great news for project developers, many in Asia, Latin America, and Africa. These projects are sparking development in regions that need it most.

Michael Jenkins, CEO of the nonprofit group Forest Trends, a parent organization of Ecosystem Marketplace, says that the challenge for the voluntary carbon markets is no longer about finding credit buyers. “Now, we all need to guide the markets to deliver the highest quality possible, with the greatest benefit possible for the planet and communities.”

Some studies have indicated that by 2050, the global carbon market could top $22 trillion. With benefits spanning the environment and socio-economic development, is it any surprise? The carbon market has the potential to combat climate change and support sustainability around the world.

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