Are Direct Air Capture Plants Facing Massive Clean Energy Challenge in the U.S.? A S&P Global Report

Saptakee S
-
0
Are Direct Air Capture Plants Facing Massive Clean Energy Challenge in the U.S.? A S&P Global Report

With Direct Air Capture (DAC) technology gaining momentum, some companies involved are facing the significant challenge of securing enough clean power to sustain their energy-intensive operations in the US. S&P Global has scrutinized the situation and has reported the challenges and potential solutions to overcome the massive clean energy demand of DACs.

As DACs Expand, So Does the Quest for Clean Energy                                                       

Earlier this year, Climeworks launched the world’s largest DAC plant in Hellisheiði, Iceland. The location was ideal, offering abundant geothermal heat and power. But as Climeworks shifted its focus to the U.S., drawn by federal subsidies and opportunities for expansion, the company faced a new hurdle: energy procurement.

Well, Douglas Chan, Chief Operating Officer of Climeworks, emphasized the importance of understanding the U.S. grid, which the company has studied for nearly three years. They pioneer in absorbing CO2 from the atmosphere and sell the carbon offsets to major corporations such as Microsoft. However, without a reliable source of clean power, the entire purpose of this technology i.e. reducing carbon emissions could be compromised.

In another instance, Max Scholten, Head of Commercialization at Heirloom Carbon Technologies, explained the critical need for low-carbon electricity sources. He stressed that what DAC companies sell must be a net removal of CO2, meaning they cannot emit more CO2 than they capture. This need for clean energy has placed added pressure on DAC plants to prove that their electricity sources are zero-emission, new, and “additional” to the grid.

Is Funding Enough to Navigate the U.S. Energy Landscape?

Last year, in August, the DOE announced a whopping $1.2 billion in funding to develop two major DAC facilities led by Climeworks and Occidental (Oxy). The funding was part of President Biden’s Investing in America agenda, marking the beginning of the Bipartisan Infrastructure Law’s Regional DAC Hubs program, designed to create a nationwide network of large-scale carbon removal sites.

Secretary of Energy Jennifer M. Granholm emphasized the importance of these investments by remarking,

“Addressing climate change requires not just reducing emissions but also removing existing CO2 from the atmosphere. This historic investment will help build a crucial industry for combating climate change while supporting local economies.”

For example, the landmark project is led by 1PointFive, a subsidiary of Occidental. This project will initiate the installation of the South Texas Direct Air Capture (DAC) Hub. The hub on King Ranch in Kleberg County aims to become the world’s first DAC plant capable of removing up to 1 million metric tons of CO2 annually.

Clean Power Solutions for DAC Expansion

As the U.S. power consumption continues to rise, DAC companies face long grid connection queues, some stretching over the years. Thus, many DAC companies are choosing to follow strict carbon accounting standards to meet the expectations of buyers and carbon credit exchanges.

Thus, funding is not a problem for DAC plants, but energy procurement is. S&P Global reported that Puro.earth, the carbon removal certifier requires detailed energy emissions analysis for DAC projects listed on its exchange. Such projects must use renewable energy certificates or similar instruments to offset grid emissions, ensuring that the electricity is generated and consumed within the same physical grid and calendar year.

DAC Projects in the U.S.

direct air capture

source: Reuters

The good news is the challenge of securing sufficient clean power has not deterred the sector’s growth. Consequently, Climeworks’ upcoming facility, part of the Battelle-led Project Cypress hub in Louisiana, is set to capture about 1 MMTCO2 annually. This is much more than its current Iceland plant, Mammoth. This project also comes under DOE’s 1.2 billion funding program. Notably, Climeworks is working with renewable energy developers to secure virtual power purchase agreements to achieve this target.

Meanwhile, Heirloom’s initial projects, also part of Project Cypress, will rely on additional wind, solar, and storage facilities. This approach is crucial as DOE has committed around $600 million each to support large-scale DAC hubs on the Gulf Coast.

Furthermore, this level of scrutiny highlights the importance of “additionality”—a concept ensuring that the clean power used by DAC plants is genuinely new and not merely diverted from other uses.

In conclusion, DAC offers great potential in combating climate change. However, as it expands in the U.S., securing clean energy to power operations is a major challenge. S&P Global has scooped this paramount factor and analyzed it focusing on innovative energy solutions and sustainability. With these viable solutions, major carbon capture companies like Climeworks and Heirloom are bound to succeed.

LEGO Bets Bold on Renewable Resin Bricks Amid Massive Revenue Growth

Saptakee S
-
0
LEGO Bets Bold on Renewable Resin Bricks Amid Massive Revenue Growth

Lego is taking significant steps to replace fossil fuels in its iconic bricks with renewable and recycled plastic. Despite the higher costs, the Danish toymaker is determined to phase out oil-based materials by 2032. On top, the company delivered outstanding double-digit top-and-bottom-line growth in H1 2024, which would accelerate its swift transition into 100% sustainable bricks.

CEO Neils Christiansen revealed that,

“The company is on track to ensure that more than half of the resin it needs in 2026 is certified according to the mass balance method, an auditable way to trace sustainable materials through the supply chain, up from 30% in the first half of 2024.”

Lego’s Massive Revenue Jump

LEGO has achieved impressive financial growth in the first half of 2024, setting new records across the board. The company’s growth was driven by strong demand for its diverse product range, particularly in the U.S. and Europe.

Key Financial Highlights

  • Revenue: Increased by 13% to DKK 31.0 billion (from DKK 27.4 billion in H1 2023)
  • Consumer Sales: Grew by 14%, outpacing the overall toy industry
  • Operating Profit: Up by 26% to a record DKK 8.1 billion
  • Net Profit: Up 16% to DKK 6.0 billion (from DKK 5.1 billion in H1 2023)
  • Cash Flow from Operations: Jumped 60% to DKK 7.5 billion (from DKK 4.7 billion in H1 2023)
  • Investments: DKK 4.5 billion spent on new factories, facilities, and offices (up from DKK 3.6 billion in H1 2023)
  • Free Cash Flow: Increased to DKK 3.0 billion (from DKK 1.1 billion in H1 2023)

The company also increased its spending on sustainability, retail, and digital initiatives, ensuring it remains a leader in the toy industry.

Building Each Brick with Sustainable Materials

From media reports, we discovered that Lego has already tested over 600 materials in its quest for sustainable alternatives to plastic. The company plans to reduce the oil content in its bricks by spending 70% more on certified renewable resin. CEO Neils Christiansen has also stated figuratively that this would certainly increase the cost of production.

Sugarcane Based Bio-PE

Since 2018, LEGO has been using bio-polyethylene (bio-PE) for flexible parts like flowers, botanical elements, and minifigure accessories. Made from sugarcane sourced in Brazil, this material is produced in a way that aligns with WWF guidelines, ensuring sustainability without compromising food security. Today, over 200 different LEGO elements are crafted from bio-PE, and nearly half of all LEGO sets include at least one of these eco-friendly pieces.

ArMABS: Recycled Artificial Marble

LEGO’s transparent elements, such as lightsabers, windscreens, and windows, now contain 20% recycled materials from artificial marble kitchen countertops. With more than 500 different arMABS elements available, these sustainable components appear in over 60% of LEGO sets, proving that recycling can lead to crystal-clear results.

Highly Durable ePOM

For robust, rigid components like axles, LEGO is developing a new plastic called ePOM. This innovative material blends renewable energy and CO2 from bio-waste, making it the futuristic choice for LEGO’s most durable parts. Notably, the company plans to start using ePOM by 2025, marking another step forward in sustainability.

A Thing of the Past: Recycled Prototype Brick

In 2021, LEGO created a prototype brick using PET plastic from recycled bottles. However, after two years of development, it became clear that this material did not achieve the carbon reduction goals LEGO aimed for. Despite this, the project provided valuable insights that will guide LEGO as it continues to explore new materials and improve the sustainability of its bricks.

Interestingly, these bricks are permanent. Whether you bought them years ago or will buy them in the future, they all fit together perfectly. The company calls this reliable connection- ‘clutch power’. This means that every brick stacks securely, no matter when it was made.

No wonder these materials meet high standards for safety, quality, durability and now sustainability. Furthermore, the shift to greener plastic comes at a time when global toy sales are sluggish, with major competitors like Hasbro cutting jobs due to declining demand.

However, with high sales volume and strong brand value, LEGO can easily afford the production cost.

Responsible Sourcing and Strategic Partnerships

Lego wants to achieve net-zero greenhouse gas emissions by 2050 and cut emissions by 37% by 2032 based on 2019 levels. Notably, it aims to remove more than 139,000 tons of CO2e this year. One key strategy for reaching this goal is incorporating sustainable and circular materials into all products by 2032.

This involves using responsibly sourced recycled materials to minimize waste while ensuring high safety and quality standards. For instance, it sourced 18% of its resin under mass balance principles in 2023.

Unlocking Lego’s Mass Balance Strategy

Mass balance is a strategy designed to boost the use of renewable and recycled materials in all LEGO products. This model involves blending virgin fossil sources with certified renewable and recycled inputs to create their raw materials.

LEGOSource: LEGO

By doing so, LEGO reduces its dependence on virgin fossil fuels, stimulates the market, and encourages the industry to increase the production of sustainable materials. LEGO aims to achieve International Sustainability and Carbon Certification (ISCC) Plus Certification in the first half of 2024. This global certification system covers all types of sustainable feedstocks, including agricultural and forestry biomass, chemicals, plastics, packaging, bio-based materials, and renewables.

Furthermore, the company is working closely with suppliers, research institutions, and industry partners to innovate new materials. Additionally, LEGO is exploring e-Methanol with partners like European Energy and Novo Nordisk, with prototypes expected soon, which could lead to future commercial use.

By investing in renewable materials, LEGO hopes to lead the toy industry toward a greener future. All in all, it is a smart move as Christiansen confidently says,

“We used our solid financial foundation to further increase spending on strategic initiatives which will support growth now and in the future to enable us to bring learning through play to even more children.”

FURTHER READING: Barbie’s $1.3B Movie and Green Shift: Hollywood Meets Sustainability 

Verra Rejects 37 Rice Cultivation Projects in China Amid Quality Concerns

Jennifer L
-
0
Verra Rejects 37 Rice Cultivation Projects in China Amid Quality Concerns

Verra, the leading nonprofit organization in the voluntary carbon credit market, has taken a significant and unprecedented step by rejecting 37 rice cultivation projects in China. Alongside this rejection, Verra has imposed substantial sanctions on the project proponents and the validation/verification bodies (VVBs) involved. 

These actions are a result of an extensive quality control review, showing Verra’s commitment to improving transparency, integrity, and quality within voluntary carbon markets.

Cracking Down on Compliance

The projects in question employed the AMS-III.AU methodology, part of the UNFCCC Clean Development Mechanism. It was permanently inactivated by Verra in March 2023. This methodology was designed to reduce methane emissions through adjusted water management practices in rice cultivation. 

However, the quality control review revealed serious issues, namely:

  • insufficient demonstration of additionality, 
  • overstated project areas, and 
  • a lack of credible evidence to support baseline and project scenario implementation.

The review was bolstered by an analysis of remote sensing data, further validating the concerns raised.

Verra’s decision to impose sanctions on these projects marks a watershed moment in the voluntary carbon market. As part of the sanctions, Verra has issued non-conformity reports to four VVBs: 

  1. China Classification Society Certification Company, 
  2. China Quality Certification Center, 
  3. Shenzhen CTI International Certification Co., Ltd, and 
  4. TÜV Nord Cert GmbH. 

These VVBs are required to present strong corrective action plans within 15 days to prevent similar issues from happening again. Failure to do so could result in their temporary suspension from doing audits of other projects under Verra’s Agriculture, Forestry, and Other Land Use (AFOLU) sector.

Verra’s Sanctions Send Shockwaves Through Carbon Markets

One of the most critical aspects of Verra’s action is the decision to seek compensation from the project proponents for the over issued Verified Carbon Units (VCUs). This move reinforces the importance of accountability in the carbon market, ensuring that projects adhere to the rigorous standards set by Verra. By holding project proponents accountable, Verra aims to maintain the integrity of the market and ensure that carbon credits represent genuine emission reductions.

About a year ago, Verra was criticized for the quality of carbon offset credits the certifier approves. The standard setter has been accused of approving “worthless” carbon offsets that could harm corporate climate goals. 

Verra’s response to these issues reflects its broader mission to tackle global environmental and social challenges. The organization works with both the private and public sectors to support climate action and sustainable development, providing standards, tools, and programs that credibly assess environmental and social impacts.

As a mission-driven nonprofit, Verra is committed to reducing greenhouse gas emissions, improving livelihoods, and protecting natural resources. 

In line with its commitment to continuous improvement, Verra is also developing a new rice cultivation methodology under the Verified Carbon Standard (VCS) Program. This new methodology will incorporate more robust provisions, including: 

  • guidance for field stratification, 
  • consideration of nitrous oxide emissions, and 
  • soil organic carbon stocks, and standardized protocols for methane measurements. 

The goal is to enable project proponents to achieve credible emission reductions and generate high-quality VCUs. The consultation for this new methodology recently closed, and its official launch is anticipated later this year.

Verra UNFCCC CDM rice <yoastmark class=

Reimagining Carbon Credits: A New Era for Rice Cultivation Projects Begins

The suspension and sanctions against the 37 rice cultivation projects conclude a process that began in March 2023. At that time, Verra inactivated the AMS-III.AU methodology following a thorough review.

The new methodology aims to address the shortcomings identified in the previous approach. This includes providing clearer guidance and more efficient processes for: 

  • determining additionality,
  • quantifying emission reductions, and 
  • ensuring transparent data measurement, reporting, and verification (MRV) procedures.

As of now, Verra has registered 37 projects applying the AMS-III.AU methodology, with 25 of these projects having issued VCUs totaling 4.56 million units, which represents 0.43% of all VCUs.

Verra’s decisive action in this matter serves as a strong signal to the market that inclusion in the Verra Registry is a mark of quality and integrity of carbon credits. It also highlights the organization’s commitment to ensuring that all projects meet the high standards necessary to deliver meaningful environmental and social benefits.

Janice O’Brien, Director, Auditing and Accreditation, Verra, noted on this announcement saying that:

“Our quality control review identified serious failures that required a serious response. What we have learned in this process will also support the development of a more effective and credible rice cultivation methodology for future projects.”

By taking these unprecedented steps, Verra not only addresses the immediate issues with the rejected projects but also sets a precedent for how similar issues will be handled in the future. The organization’s actions are expected to contribute to a more robust and credible voluntary carbon market. This is particularly important in supporting global efforts to combat climate change and promote sustainable development.

U.S. DOE Calls for Clean Energy Proposals at Savannah River Site

Saptakee S
-
0
U.S. DOE Calls for Clean Energy Proposals at Savannah River Site

The U.S. Department of Energy (DOE) is moving forward with an ambitious plan to transform the Savannah River Site (SRS) in Aiken, South Carolina, into a sprawling renewable energy complex. Through the “Cleanup to Clean Energy” initiative, the DOE is leveraging this vast 310-square-mile area, once used for nuclear materials, to support large-scale renewable energy projects.

This move aligns with the Biden-Harris Administration’s push to utilize federal properties for expanding clean power generation across the country.

Savannah River Site: A New Hub for Clean Energy and Data Center

The DOE issued a Request for Qualifications (RFQ) on August 21, inviting developers to propose carbon-free power projects with at least 200 MW of capacity at the SRS. They explained that these projects would directly use the electricity generated on-site. This initiative is part of the DOE’s broader “Cleanup to Clean Energy” effort, which aims to repurpose former nuclear sites for renewable energy production.

Advancing National Clean Energy Goals

Furthermore, the press release mentions that this initiative is a key part of President Biden’s agenda of “100% clean electricity across federal agencies by 2030”. The Cleanup to Clean Energy initiative has already seen progress, with the DOE securing agreements for solar projects at SRS and other federal sites. Other locations include the Hanford Site in Washington, the Waste Isolation Pilot Plant in New Mexico, the Nevada National Security Site, and the Idaho National Laboratory.

Some groundbreaking advancements in this field that followed a timeline and series of events are:

  • On June 20, the DOE’s Office of Environmental Management announced that Stellar Renewable Power LLC was selected to begin negotiations for a commercial solar energy project at SRS.
  • A month later July 18, Ameresco Inc. was chosen as the second developer for a solar project at the same site 75-MW solar farm at the site.
  • By August 20, Stellar Renewable Power signed the agreement under the Cleanup to Clean Energy initiative at SRS for a 75-MW solar project, with plans to add a battery storage system.

The DOE is working closely with industry partners and local communities to develop these clean energy projects. These efforts are essential for meeting America’s rising energy demands. At the same time, they help reduce greenhouse gas emissions. With robust collaborations, the DOE can create sustainable energy solutions that benefit both the environment and the economy.

Can the DOE Quench Data Centers’ Thirst for Power?

The DOE’s push to integrate data centers into the SRS clean energy plan also reflects the growing demand for power from such facilities. A recent DOE report highlighted the immense energy needs of hyperscale data centers, which can require 300 MW to 1,000 MW of power.

doe energy need data center US

The Role of AI in Increasing Energy Demands

As we have read and can now comprehended how the rise in AI applications is causing a major energy demand, concerns about them are rising too. Recent advancements in both hardware and software have enabled the development of LLMs that mimic human abilities in various tasks. These models, while powerful, require significant energy to train and deploy. This further poses challenges to energy supply and grid stability.

DOE is certainly addressing these challenges with its expertise in energy efficiency, clean energy deployment, innovative grid technologies, and AI-related energy research.

In addition, technologists and scientists involved tried finding better ways to predict power needs. They also addressed supply chain issues. However, the prime goal is to speed up the use of new technologies at the same time focus on reducing greenhouse gas emissions. Additionally, maintaining grid stability remains also remains a top priority.

However, predicting future energy demands from data centers is difficult. DOE’s report also highlighted uncertainties in private sector planning and potential energy efficiency breakthroughs that could change current projections.

Tips for a Sustainable Energy Future

Moving on, the DOE made several recommendations to address the challenges posed by the rising power demand from data centers. Notably, they are:

  1. Creating a data center-scale AI testbed within the DOE could help researchers develop energy-efficient and flexible AI models.
  2. Conducting a rapid assessment of available generation and storage technologies, particularly for backup power, which is typically supplied by diesel generators.

As AI continues to evolve, so will the challenges associated with powering it. However, with strategic planning and innovative solutions, the DOE can ensure that these demands are met sustainably and reliably. All in all, DOE will continue working on clean energy projects at the SRS and several other former nuclear sites.

Microsoft’s Solar Power Move: Lighting Up Singapore and India’s Future

Jennifer L
-
0
Microsoft’s Solar Power Move: Lighting Up Singapore and India’s Future

Microsoft is doubling down on its renewable energy commitments with groundbreaking deals in both Singapore and India. The company securred a 20-year agreement with Singapore’s largest SolarNova project and a significant green energy purchase from India’s ReNew Energy Global.

Shining Bright with Singapore’s SolarNova 8

The long-term contract will see Microsoft buying 100% of the renewable energy exported to the grid from the project, which is managed by EDP Renewables (EDPR). 

The SolarNova 8 project is recognized as the largest solar initiative under Singapore’s SolarNova program. It aims to install solar panels on over 1,000 public housing blocks and more than 100 government-owned buildings. Together, they’ll collectively generate up to 200 megawatts (MW) of capacity.

The agreement is part of Microsoft’s broader strategy to meet its ambitious goal of using 100% renewable energy for its operations by 2030. The company has faced challenges in reducing its carbon footprint, particularly with rising emissions due to increased investments in artificial intelligence.

Microsoft 2030 carbon negative target

However, by securing a steady supply of renewable energy from projects like SolarNova 8, Microsoft is reinforcing its commitment to sustainability.

The SolarNova program, launched by Singapore’s Housing and Development Board (HDB) and the Economic Development Board (EDB), is a central component of the country’s plan to achieve a solar capacity of at least 2 gigawatts (GW) by 2030. The program has seen several phases, with SolarNova 8 being the most extensive to date. The energy generated from this phase alone is expected to contribute about 420 gigawatt-hours (GWh) of power annually, covering about 5% of Singapore’s total energy consumption.

Remarking on their Singapore renewables deal, Adrian Anderson, GM, Renewables, Carbon Free Energy, Microsoft, stated that:

“Building our renewable energy portfolio with EDPR ensures that we can continue to secure renewable energy supply to meet our Microsoft’s ambitious renewable energy and decarbonization goals.”

For Singapore, the success of the SolarNova program reflects the nation’s commitment to integrating sustainable energy solutions into its urban infrastructure, making it a model for other cities worldwide.

As the largest solar project in Singapore, SolarNova 8 not only boosts the nation’s clean energy capacity but also demonstrates how corporate partnerships can accelerate the shift towards a more sustainable future.

Tech Giants’ Solar Power Strategy

This partnership between Microsoft and EDPR is not their first collaboration. The two companies had previously worked together on a smaller solar project in Singapore in 2018, further cementing their relationship in advancing renewable energy initiatives. 

Through these efforts, Microsoft is not only progressing towards its own sustainability goals but also supporting Singapore’s broader objectives under the Green Plan 2030, which targets significant reductions in carbon emissions and increased reliance on clean energy.

The deal highlights the growing trend of major corporations like Microsoft leveraging long-term power purchase agreements (PPAs) to secure renewable energy sources, thus driving the global energy transition. 

Other tech giants are also using Renewable Energy Certificates (RECs) or renewable energy carbon credits, to tackle their carbon footprint. 

In 2022, Amazon heavily relied on unbundled RECs for 52% of its renewable energy needs, making it the most dependent on these instruments among major tech companies. Amazon has acknowledged this reliance and stated plans to reduce it as more of its directly contracted renewable energy projects come online.

Likewise, Meta used unbundled RECs for 18% of its renewable energy in 2022. These approaches highlight different strategies of the big tech to achieve renewable energy goals.

renewable energy carbon credits RECs of tech companies

It’s the same for Microsoft, which also aims to cut dependence on RECs in the future. Its acquisition of solar power from Singapore’s public buildings is a critical development in both the company’s and the country’s efforts to combat climate change.

Microsoft Expands Renewable Energy Push in India

Separately, in India, Microsoft has entered into an agreement to purchase 437.6 MW of green attributes from ReNew Energy Global. This contract is expected to generate over 1 million units of green electricity attributes annually, contributing significantly to Microsoft’s sustainability goals in the region.

This partnership is a substantial step forward for both companies, aligning with Microsoft’s ambitious renewable energy and decarbonization goals. Puneet Chandok, President of Microsoft India and South Asia, highlighted the importance of this agreement in accelerating Microsoft’s progress towards its sustainability objectives. He further said that:

“We are taking a holistic approach that includes progressing our climate goals and empowering the ecosystem with the technology that is needed to build a more resilient future.”

In addition to the energy supply contract, ReNew has committed to allocating $15 million of revenue from the Microsoft contract towards a community fund. This fund will focus on environmental justice initiatives, particularly those aimed at improving women’s livelihoods, economic empowerment, rural electrification, environmental remediation, and water quality. The ReNew Foundation, the philanthropic arm of ReNew, will collaborate on these initiatives, aligning with Microsoft’s environmental justice priorities.

Furthermore, in August 2024, Microsoft also entered into a five-year framework agreement with Pivot Energy to develop up to 500MW of community-scale solar projects across the United States from 2025 to 2029. This agreement further underscores Microsoft’s commitment to expanding its renewable energy footprint globally.

These agreements reflect Microsoft’s strategy to diversify its energy sources and support the global transition to renewable energy. These efforts are part of the company’s broader initiative to make renewable energy more accessible and widespread.

EU Regulations Poised to Catalyze Global Carbon Market Convergence, Says Trafigura’s Hauman

Jennifer L
-
0
EU Regulations Poised to Catalyze Global Carbon Market Convergence, Says Trafigura’s Hauman

In a recent episode of SmarterMarkets, David Greely interviews Hannah Hauman, the Global Head of Carbon Trading at Trafigura.

Trafigura is a leading global commodity trading company founded in 1993 that sources, stores, transports and delivers raw materials including oil, metals and minerals. With over 12,000 employees across 150 countries, Trafigura connects producers and consumers through efficient supply chains.

Greely and Hauman talk about the significant impact of new EU regulations on corporate sustainability reporting, carbon removal certification, and green claims. 

These regulations are not only redefining what it means for companies to be “net zero” but are also driving a new era of corporate climate action.

The Carbon Market Conversation Delves into Several Highlights:

  1. The EU Corporate Sustainability Reporting Directive (CSRD) is a game-changer, requiring around 49,000 companies across Europe to disclose detailed information on their emissions, business model, strategy, policies, risks, and targets in their management reports. This mandatory reporting covers scopes 1, 2, and 3, effectively putting sustainability reporting on par with financial reporting. Hannah emphasizes that this brings sustainability to the core of business decision-making and competitiveness.
  2. The EU Carbon Removals and Carbon Farming (CRCF) regulation is crucial in defining what qualifies as a verified carbon removal. This regulation is pivotal in determining the “net” in net zero, as it sets the standards for what can be counted as a legitimate offset. Hannah highlights how this regulation is fostering advancements in carbon removal technologies and practices, which are essential for achieving net-zero emissions.
  3. The EU Green Claims Directive adds another layer of accountability by regulating how companies can make carbon neutral and low carbon claims. Companies must back up their claims with objective measures, preventing greenwashing and ensuring transparency.


Source: Smarter Markets Podcast

Hannah also stresses the following key points:

  • The convergence of these regulations is creating a new framework where corporate climate commitments and progress are not only regulated and verified but also factored into financial reporting. This represents a significant shift from purely voluntary corporate action to a regulated corporate carbon market that will increasingly converge with compliance markets over time.
  • The EU is effectively exporting these regulations globally through supply chain reporting requirements and carbon border adjustments. This is catalyzing the development of domestic carbon pricing schemes in other countries, as they seek to remain competitive and avoid potential trade barriers.
  • Investing in high-quality carbon removal projects that benefit from scale and strong governance is crucial. Robust verification and certification mechanisms are needed to ensure the integrity of carbon removals.

READ MORE: Why Standards Matter: The CRSI’s Role in the Carbon Removal Boom

  • Corporates face challenges in developing future-proof strategies to achieve their net-zero targets. A holistic approach that encompasses emissions reductions, carbon removals, and transparent reporting is necessary.

By creating a new definition of net zero and driving regulated corporate climate action, these regulations are set to have a profound impact on the global fight against climate change. 

Find out how Trafigura is investing in carbon removal projects to help in this fight here. 

Cobalt Crash: Why Prices Hit a 7-Year Low and What’s Next

Jennifer L
-
0
Cobalt Crash: Why Prices Hit a 7-Year Low and What’s Next

Cobalt, a key ingredient in the batteries powering our electric vehicles (EVs) and devices, is facing turbulent times. Once a high-flying commodity, cobalt prices have now plummeted to levels not seen in years. 

Cobalt prices have experienced a steeper decline than lithium. The European cobalt metal price hit a seven-year low of $12.75 per pound on August 19, 2024—a level not seen since October 2016. This price drop is largely attributed to weak demand for cobalt sulfate used in traction batteries, leading producers to shift focus to metal production for better profitability.

European cobalt metal price August 2024

The increase in China-made cobalt metal exports to Europe has further pressured prices, with a 295.8% year-over-year rise in unwrought cobalt exports during the first half of the year.

Supply Glut: Why Cobalt Prices Are Plummeting

Glencore PLC, one of the top cobalt producers, has led the way in production cuts. The company reduced first-half output by 26.7% year-over-year. These cuts have been driven by lowered run rates at Mutanda and decreased grades and throughput at Kamoto. 

Despite these reductions, the overall impact on the market surplus has been minimal, as companies like CMOC Group. continue to ramp up production, leveraging strong copper prices even if cobalt stocks need to be held until demand improves.

In light of these developments, S&P Global has downgraded its 2024 price forecasts for European cobalt metal by 4.4% to $13.69 per pound. Despite these downward revisions, there are some positive indicators for near-term demand. 

Market players are anticipating a potential interest rate cut by the US Federal Reserve in September, which could lower financing costs for plug-in electric vehicles (PEVs) and improve economic conditions. 

Additionally, China is expected to see a boost in PEV sales due to recently increased subsidies for vehicle trade-ins, offering 20,000 yuan for scrapping internal combustion engine cars in favor of new PEVs.

However, a broader recovery in the PEV market will require more than just these short-term measures. A sustained recovery will depend on improvements in consumer confidence, affordability, policy certainty, and continued investment in new models and infrastructure. 

Glencore’s Gambit: Can Production Cuts Stabilize the Market?

The lithium and cobalt markets could also see divergent paths in the near future. While lithium producers are scaling back output in response to low prices, which may eventually balance supply with demand, cobalt production remains buoyed by high copper prices. This could prolong the market surplus and keep cobalt prices under pressure for a longer period.

Glencore CEO Gary Nagle has acknowledged the current oversupply in the cobalt market, predicting that it could persist for at least the next two years. This oversupply has been compounded by expanded production in Indonesia and the Democratic Republic of Congo (DRC), where cobalt is extracted as a by-product of nickel and copper mining, respectively. This dynamic limits the impact of low cobalt prices on overall production decisions.

Cobalt’s recent price trajectory has followed a classic pattern of boom and bust, while underscoring the volatility that has come to define the battery metals market. 

Following a dramatic surge in 2017-2018, the market experienced a severe downturn, falling to $26,000 per ton by 2019. A similar pattern emerged this decade: cobalt prices soared to $82,000 per ton in March 2022, only to plummet to the current level of $24,900 per ton.

Cobalt price boom and bust
Chart from Reuters

China’s CMOC Group overtook Glencore as the world’s largest cobalt producer in 2023, with an output of 55,000 tons. CMOC’s expansion plans, particularly at its Tenke Fungurume copper mine in Congo, are expected to drive cobalt production to 100,000 tons by 2028.

How China and Indonesia Are Shaping Cobalt’s Future

Meanwhile, Indonesia has emerged as the second-largest cobalt producer globally, with production surging by 86% to 17,000 tons last year. This rapid increase is attributed to Indonesia’s extensive development of nickel mining and processing facilities. The country boasts a number of nickel-cobalt processing plants rising from 10 in 2023 to nearly 60 in 2024. 

Historically, cobalt was primarily used in super-alloys for the aerospace industry, but demand has shifted towards EV batteries, which accounted for 73% of the 200,000 tons of cobalt consumed in 2023. Despite strong growth in lithium-iron-phosphate battery technology, which reduces the need for cobalt, the metal’s usage in EVs continues to grow, with a 12% year-on-year increase in May 2024.

However, demand growth has not kept pace with the surge in supply from the Congo and Indonesia. The market was oversupplied by 18,300 tons in 2023, following a surplus of 10,700 tons in 2022. Analysts from Macquarie Bank forecast that this surplus will persist until at least 2027, indicating continued downward pressure on prices.

  • The price decline has created opportunities for strategic buyers. China’s state reserves manager purchased 8,700 tons of cobalt in 2023 and plans to buy an additional 15,000 tons this year. 

Boom and Bust: Cobalt’s Volatile Journey in the Battery Market

The Chicago Mercantile Exchange (CME) cobalt curve is currently in a pronounced contango, meaning that forward prices are higher than spot prices. This situation allows for profitable stock financing trades, though banks prefer to store financed inventory in locations where it can be easily sold, such as terminal markets. 

Whether this marks the beginning of a larger trend remains to be seen. Still, the current market dynamics suggest that there will be a significant amount of cobalt looking for storage and trading opportunities in the coming months. 

The International Energy Agency (IEA) forecasts a substantial increase in cobalt demand over the coming decades. Under its Sustainable Development Scenario, cobalt demand is expected to grow fivefold between 2020 and 2040.

cobalt demand growth 2040

The demand for cobalt, particularly driven by its critical role in electric vehicle batteries, is projected to triple by 2030. This anticipated surge underscores the need for new cobalt mines and deposits to meet the growing demand and support global sustainability goals.

As the market adjusts to these changes, participants will continue to monitor the interplay between supply, evolving battery technologies, and the pace of EV adoption, which will ultimately shape the future trajectory of cobalt prices.

NVIDIA Crushes Q2 and Cuts Emissions but Shares Still Slide

Saptakee S
-
0
NVIDIA Crushes Q2 and Cuts Emissions but Shares Still Slide

NVIDIA had an impressive second quarter, surpassing market expectations with strong revenue growth and solid earnings. Despite these achievements, the company’s shares unexpectedly dipped. On the positive side, the chip giant successfully reduced its emissions and is aiming to incorporate sustainable solutions throughout its operations.

NVIDIA’s Impressive Q2 Results Indicate 360 Degree Growth

NVIDIA reported a remarkable $30.0 billion in revenue for the second quarter ending July 28, 2024. This marked a 15% increase from the previous quarter and a staggering 122% jump from last year.

The company gave back $15.4 billion to shareholders in the first half of fiscal 2025 through buying back shares and paying dividends. The company still has $7.5 billion available for more share buybacks. Recently, they approved an additional $50.0 billion for future buybacks. On June 7, 2024, NVIDIA also completed a ten-for-one stock split. This means they adjusted all share and per-share amounts accordingly.

NVIDIAsource: MSN

Furthermore, it also revealed that its GAAP earnings per share increased to $0.67. This was a 12% rise from the previous quarter and 168% higher than a year ago. Non-GAAP earnings reached $0.68 per share, showing an 11% rise from last quarter and a 152% jump from last year. However, there is a paradox, despite making strong revenue, NVIDIA’s stock price dipped 2% after announcing the earnings.

nvidia

source: MSN

The Key Drivers: Data Centers and AI Innovations

NVIDIA’s Data Center segment delivered record revenue of $26.3 billion, up 16% from the previous quarter and 154% year-over-year. The company’s new H200 Tensor Core and Blackwell architecture processors excelled in industry benchmarks, while cloud service providers like CoreWeave began offering H200-powered systems.

Notably, the chip magnate expanded its AI offerings, including launching the NIM microservices platform and collaborating with Hugging Face for large language model deployment. The company also advanced quantum computing through its CUDA-Q platform at global supercomputing centers.

Jensen Huang, founder, and CEO of NVIDIA.

“Hopper demand remains strong, and the anticipation for Blackwell is incredible. NVIDIA achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”

Gaming and Professional Visualization Revenue Rise

Gaming revenue reached $2.9 billion, a 9% increase from the prior quarter and a 16% rise from last year. NVIDIA introduced Project G-Assist, showcasing AI’s potential in gaming, and announced new RTX titles, bringing the total to over 600 games and apps.

The Professional Visualization segment earned $454 million, up 6% quarter-over-quarter and 20% year-over-year. NVIDIA introduced AI models and microservices for OpenUSD, enhancing workflows in digital twin and robotics development.

Automotive and Robotics Jump

Automotive revenue grew to $346 million, a 5% increase from the last quarter and a 37% jump from the previous year. NVIDIA’s Isaac robotics platform gained adoption from leaders like BYD Electronics, Siemens, and Teradyne Robotics.

NVIDIA launched Omniverse Cloud Sensor RTX™ microservices to accelerate the development of autonomous machines, while its advancements in generative AI helped win the Autonomous Grand Challenge at a major computer vision conference.

How NVIDIA’s Sustainability Plan Combats Emissions

Climate Targets: Scope 1,2 and 3 emissions

The chip giant minimizes greenhouse gas (GHG) emissions throughout its product lifecycle. The company evaluates its carbon footprint and considers climate risks, including evolving regulations and market shifts.

By the end of FY25, NVIDIA plans to achieve 100% renewable electricity for all offices and data centers across the globe. This goal is expected to reduce the company’s Scope 1 and 2 emissions based on climate science standards.

NVIDIA also targets its supply chain, responsible for scope 3 emissions. By 2026, the company aims to engage with suppliers responsible for at least 67% of its Scope 3 Category 1 GHG emissions. The goal is to encourage these suppliers to adopt science-based emission reduction targets.

  • In 2023, NVIDIA’s greenhouse gas emissions were 73,017 metric tons of CO2 equivalent, down from 82,822 metric tons in 2022.
  • NVIDIA’s energy use in 2023 was 496,901 megawatt hours, an increase from the previous year.

NVIDIA EMISSIONS

NVIDIA’s Blackwell: Leading in Energy Savings

Training AI models takes a lot of energy. As models get smarter, they need more power. But new tech, like NVIDIA’s Blackwell platform, is making AI training more energy-efficient.

Yes, you heard it right, Blackwell is a breakthrough. It powers advanced AI while using ten times less energy than older models. This reduces AI’s environmental impact and boosts its benefits. Moreover, the Blackwell GPUs offer a massive leap in energy efficiency, delivering up to 20 times better performance than traditional CPUs for AI and high-performance computing (HPC) tasks.

AI drives significant energy savings across industries. Another cutting-edge technology in this space is NVIDIA’s Earth-2 platform. It can predict climate changes 1,000 times faster and uses 3,000 times less energy than traditional models.

Jensen Huang also elaborated that Blackwell samples are now being shipped to partners and customers. Additionally, Spectrum-X Ethernet for AI and NVIDIA AI Enterprise software are two new product categories that have achieved significant scale. This demonstrates NVIDIA’s capability as a full-stack and data center-scale platform. Furthermore, Across the entire stack and ecosystem, NVIDIA is supporting everyone from frontier model makers to consumer internet services and enterprises. Moreover, generative AI is poised to revolutionize every industry.

As NVIDIA calls it their “Omniverse,” allows companies to create digital copies of their physical operations. This helps businesses cut waste and lower energy use. This digital shift is ushering in a sustainable industrial era by giving technology the utmost significance.

Going Water and Waste Smart

NVIDIA focuses on efficient water use, especially in cooling towers, landscaping, and sanitation, with extra care in drought-prone areas. The company’s LEED Gold-certified buildings in Santa Clara, set the perfect example for water-efficient designs, including low-flow fixtures and recycled water systems. Reclaimed water is used in cooling towers and irrigation, while rainwater is captured in bioswales.

Notably, this year the U.S. DoE awarded NVIDIA a grant to develop an advanced liquid-cooling system that would enhance energy efficiency and reduce environmental impact. The company aims to use this system mostly in its data centers.

Similarly, they take waste management very seriously. The three pillars are reduction, reuse, and recycling. For example, from equipment testing to R&D and production, everything is repurposed. Even their IT assets are refurbished which goes to the NVIDIA Foundation. Unusable items are recycled through certified e-waste vendors, ensuring safe disposal.

Looking ahead, NVIDIA expects Q3 revenue to hit $32.5 billion, with gross margins around 74-75%. They estimate their operating expenses to be about $4.3 billion on a GAAP basis and $3.0 billion non-GAAP. Additionally, we expect NVIDIA’s shares to perform better.

A Bold Plan: Tata to Transform Green Steel with Nuclear Power

Saptakee S
-
0
A Bold Plan: Tata to Transform Green Steel with Nuclear Power

The TATAs! Who doesn’t know them? Well, this time their plan is bigger and bolder. They are marching into the nuclear space. Tata Steel, one of the world’s largest steel producers, is exploring nuclear energy to produce green steel.

Small Reactors, Big Ambitions: Tata Reinvents Green Steel

Currently, the steel giant is assessing many factors that would play a pivotal role in green steel production. They aim to install around 200 BSRs, within the atomic energy sector. One unit will have a capacity of 220 MW, which would collectively provide about 45 GW of power.

Although Tata Steel has not officially commented, sources indicate that the company is keen on transitioning to green steel production. This move comes even though Tata Steel does not export significant quantities to Europe, where the ‘carbon border adjustment mechanism‘ (CBAM) is set to begin on January 1, 2026. The CBAM will impose a duty on certain imported goods, including steel, based on their greenhouse gas (GHG) emissions during production. This measure aims to protect European producers from being undercut by imports with higher carbon footprints.

Media reports also reveal that other steel companies are considering BSRs, but Tata Steel appears particularly interested. If the plan proceeds, Tata Steel intends to use the electricity generated by these BSRs to power electrolyzers for green hydrogen production. This hydrogen would then replace coking coal, which is used in steelmaking, significantly reducing carbon emissions. Thus, Tata has etched a clear pathway to decarbonize one of the hardest sectors.

The Curious Case of BSRs…

Bharat Small Reactors (BSRs) are nothing but SMRs that the US, Canada, and Russia have huge success. They can address many challenges related to design and innovation that India’s energy sector is currently facing.

BSRs can be installed in remote areas, extending energy access to such regions, and ensuring reliable power for isolated locations. Additionally, BSRs feature faster construction timelines. Their modular design helps in easy construction compared to traditional reactors.

Another significant feature is, they are cost-effective due to their smaller size and modular construction. They lower costs across their entire life cycle—from construction to decommissioning—making nuclear energy more affordable and sustainable for India.

In summary, Bharat Small Reactors are set to transform India’s energy landscape by offering a versatile, cost-effective, and timely solution to the country’s growing energy demand.TATA India BSR

source: insightsonindia, BSR

Indian Finance Minister Nirmala Sitharaman elaborated on the government’s plan to partner with the private sector to establish BSRs. She hailed India for being the leader in this area, citing that the Nuclear Power Corporation of India (NPCIL) has operated 15 pressurized heavy water reactors (PHWRs) of 220 MW each for years.

Recently, R.B. Grover, a member of the Atomic Energy Commission, informed the media that these 220-MW PHWRs are being upgraded. The modified versions, known as BSRs, are expected to be licensed to the private sector.

Union Minister Dr. Jitendra Singh also announced that India’s Nuclear Power generation capacity is to increase by around 70 % in the next 5 years. Currently, its installed capacity is 7.48 GWe, which is expected to be 13.08 GWe by 2029.

Tata Steel Pioneering Sustainability in Netherlands

Green steel is steel produced with zero CO2 emissions. By 2030, Tata aims to cut their CO2 emissions by 40% and become 100% CO2-neutral by 2045. Their production process focuses on minimizing environmental impact and boosting circularity. They believe that increasing steel recycling and raising the use of scrap from 17% to 30% by 2030 will significantly enhance sustainability.

Tata Steel’s plant in Ijmuiden, Netherlands has become one of the most CO2-efficient steel facilities globally, ranking among the top three in the Worldsteel Association’s benchmark. The plant’s emissions per tonne of steel are 7% below the European average. Despite this achievement, Tata Steel remains responsible for 8% of all CO2 emissions in the Netherlands. The company is committed to reducing this percentage by all possible means to support the country’s climate goals.

TATA

source: Tata Steel sustainability report

To use nuclear power for green steel production, Tata Steel must first see amendments to the Atomic Energy Act. These changes are needed to permit private ownership and operation of nuclear power plants in India. The government is reportedly considering these legislative changes to initiate the project. We will keep you posted with further developments in this buzzing space.

Walmart Sees Revenue Boost in Q2, Emissions Nudge Higher

Saptakee S
-
0
Walmart Sees Revenue Boost in Q2, Emissions Nudge Higher

America’s favorite retail outlet, Walmart, released its earnings on August 15, indicating a fantastic revenue and sales surge. However, its emissions slightly increased from the 2015 baseline. Nevertheless, the company is balancing its profits and sustainability in a commendable way.

Walmart’s Q2 2025: Revenue Up, eCommerce Soars!

Walmart Inc. reported a solid 4.8% increase in revenue for Q2 2025, reaching $169.3 billion. eCommerce sales saw a remarkable 21% growth worldwide, reflecting Walmart’s expanding digital reach. The company’s operating income rose by 8.5%, with adjusted operating income up 7.2%. This growth was driven by improved gross margins, higher membership income, and reduced e-commerce losses.

The press release further mentions, Walmart’s GAAP EPS came in at $0.56. Adjusted EPS, which excludes a net loss on equity and other investments, was $0.67. This exceeded analysts’ expectations of $0.65, marking a notable 3.08% surprise.

Walmartsource: Walmart

Key Performance Metrics

  • U.S. Comparable Store Sales: Walmart U.S. saw a 4.2% increase, outperforming the 3.5% average estimate.
  • Walmart International Sales Growth: Increased by 7.1%, slightly below the 7.7% estimate.
  • Sam’s Club Comparable Store Sales: Up 5.2%, surpassing the 4% estimate.
  • Total U.S. Comparable Store Sales: Grew by 4.3%, exceeding the 3.7% estimate.

Walmartsource: Walmart

Looking ahead, Walmart expects Q3 net sales to grow between 3.25% and 4.25%, with operating income rising by 3.0% to 4.5% in constant currency. For the full fiscal year 2025, net sales are projected to increase by 3.75% to 4.75%, with adjusted operating income growing by 6.5% to 8.0%.

Overall, Walmart’s strong performance across various segments, including eCommerce and membership, highlights its robust business model and positive outlook.

Emissions Elevate Slightly Despite Bold Net Zero Ambitions

Walmart aims for zero emissions in global operations (Scopes 1 & 2) by 2040. The company targets a 1.5-degree Celsius trajectory for climate action, with interim goals to cut Scope 1 and 2 emissions by 35% by 2025 and 65% by 2030 from 2015 levels.

Walmart

source: Walmart

Since 2015, Walmart has reduced Scope 1 and 2 emissions by 21.2% and carbon intensity by 43.5%. However, in 2022, Scope 1 emissions rose by 7.6% and Scope 2 emissions rose by 0.3% (market-based), totaling to emission spike of 4.1%.  Emissions rose slightly due to increased use of onsite fuels, shifts in transportation, and slower renewable energy expansion. So how Walmart is planning to cut down its emissions? Discover below.

Renewable Energy and Energy Efficiency

By the end of 2022, Walmart had over 600 renewable energy projects across 10+ countries and plans to expand its solar generation in the coming years. It has secured PPAs for over 2 GW of renewable energy and has become the top retailer in terms of green power. It focuses on community solar projects for low-to-moderate-income areas and supports various renewable energy projects through coalitions.

Speaking of efficiency, they optimize energy use through real-time monitoring and upgrade old equipment with energy-efficient systems. Additionally, they aim to install energy meters in all stores across the U.S.

Electrification of its Transport

In 2022, Walmart’s fleet accounted for 24% of Scope 1 emissions. Thus, 100% electrification of its fleet including class 8 trucks became crucial to achieve the net zero goals. Although the company is not expecting to curb emissions massively, they are adopting zero-emissions technologies, scalable solutions, and implementing supportive policies.

Tackling Stationary Fuel Emissions

In 2022, stationary fuels made up 23% of Walmart’s Scope 1 emissions, rising 21% from 2021. Cold weather in the U.S., droughts in China, and power outages in South Africa increased their reliance on heating and backup generators. These challenges highlight the need for greater energy efficiency and cleaner power. Walmart is responding by adding electrical connections for refrigerated trailers to cut diesel use.

Mitigating Onsite Refrigerants

In 2022, onsite refrigerants made up 53% of Walmart’s Scope 1 emissions. Walmart reduced global refrigerant emissions by 2% through leak management using low-GWP (Global Warming Potential) systems. They took serious steps to maintain equipment to minimize leaks and replaced old systems with low-GWP alternatives like CO2 and ammonia.

Slashing Emissions through Project Gigaton

Through Project Gigaton, Walmart helps suppliers set and achieve their emissions reduction goals. Launched in 2017, the initiative offers guidance, workshops, and resources to support these efforts. Moreover, the company aims to reduce or avoid 1 billion metric tons of CO2e in product value chains by 2030. This is why they are working with groups like the World Wildlife Fund and Environmental Defense Fund. Notably, last year they avoided more than 175 MMT of CO2e through Project Gigaton.

Walmartsource: Walmart

In conclusion, Walmart President and CEO Doug McMillon applauded the efforts by remarking,

“Our team delivered another strong quarter. They work hard every day to help our customers and members save time and money. Each part of our business is growing – store and club sales are up, eCommerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves. Our newer businesses like marketplace, advertising, and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model.”

1...161718...150Page 17 of 150