How Gold Standard’s Innovative Certification is Paving the Way for Climate Action

Saptakee S
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How Gold Standard’s Innovative Certification is Paving the Way for Climate Action

In the fight against climate change, effective emission reduction policies are more essential than ever. Gold Standard, the leading Geneva-based nonprofit, drives ambitious climate action through solid standards and verified impacts and is rolling out new norms for government emission reduction policies. This innovative initiative, currently in its pilot phase, will provide governments with a robust framework to certify and validate the impact of their emission reduction efforts.

Unveiling Gold Standard’s Groundbreaking Climate Certification Initiative

The press release states that:

Gold Standard’s Policy Requirements and Procedures allow for the certification and crediting of greenhouse gas reductions or removals achieved as a result of the introduction of new policies or regulations. 

This policy represents a significant advancement in the field of carbon finance, creating a pathway for governments to receive recognition and financial support for their climate policies.

Building Trust in Emission Reduction Policies

Adhering to Gold Standard’s rigorous criteria ensures the credibility and effectiveness of emission reduction policies. Governments can demonstrate the real-world impact of their initiatives, enhancing transparency and building trust among stakeholders, including international organizations, investors, and the general public.

How the Certification Process Works

The certification process under Gold Standard’s new initiative involves several key steps:

1. Policy Assessment

Governments submit their emission reduction policies for evaluation. This includes a detailed analysis of the policy’s design, implementation strategy, and expected outcomes.

2. Impact Evaluation

It conducts a thorough review to assess the actual impact of the policy. This involves measuring the reduction in greenhouse gas emissions and other environmental benefits.

3. Verification and Certification

Once the impact is verified, the company issues a certification along with carbon credits that can be used to attract funding and investment.

Gold Standardsource: Gold Standard

How Governments Benefit from Gold Standard’s Climate Policy

Governments that participate in this certification process stand to gain numerous benefits:

  • Increased Credibility: Certification by a reputed body like Gold Standard enhances the credibility of their climate policies.
  • Financial Incentives: Certified emission reductions can be translated into carbon credits, opening new avenues for carbon finance.
  • International Recognition: Certification provides international recognition, positioning governments as leaders in climate action.

The Broader Impact on Climate Action

Gold Standard’s new certification norms can potentially drive significant progress in global climate action. This initiative encourages governments to implement more ambitious and effective climate policies by providing a reliable framework for evaluating and certifying emission reductions. Furthermore, the financial incentives associated with certification can help mobilize additional resources for climate action.

By pioneering these new norms, the company is helping governments prove the effectiveness of their emission reduction policies and secure the financial support necessary to scale up their efforts. This initiative marks a significant step forward in the global fight against climate change. We can infer, that it sets a new standard for transparency, accountability, and impact in climate policy.

Xpansiv Sees Surge in VCM Activity, Spot N-GEO Price More Than Double

Jennifer L
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Xpansiv Sees Surge in VCM Activity, Spot N-GEO Price More Than Double

Xpansiv’s verified carbon market (VCM) experienced notable dynamics last week, with an increase in buyers and competitive price bids. A participant highlighted this “dynamism in the market,” which was evidenced by a significant number of trades matched on the CBL spot exchange.

The data presented in this report is from Xpansiv Data and Analytics, which provides comprehensive spot firm and indicative bids/offers, as well as transaction data. 

Xpansiv supports the CBL, the world’s largest spot environmental commodity exchange, offering a daily and historical bid, offer, and transaction data for carbon credits, compliance, and voluntary renewable energy certificates, and Australian Carbon Credit Units (ACCUs) traded on the CBL platform. The spot data is enriched by forward prices from top market intermediaries, aggregated registry statistics, and ratings from leading providers.

Key Carbon Credit Transactions and Prices

A noteworthy transaction included a 5,000 metric ton spot N-GEO trade at $1.15, aligning with the prices of over 200,000 tons of N-GEO-eligible credit OTC transactions settled via the exchange. This carbon price level was more than double the contract settlement from the previous week. 

Meanwhile, CME Group’s CBL N-GEO December futures settled at $1.01, showing a rare discount to the spot N-GEO. The CBL N-GEO, CBL GEO, and CBL C-GEO futures all closed the week with minor movements of $0.01 on light trading volume.

CBL GEO Standardized VCM contracts

CME Group CBL GEO futures contracts

Several project-specific credits were also matched on the CBL screen. These included:

  • VCS 2250 vintage 2020 Pakistani Delta Blue carbon credits: 3,678 credits matched at $30.00.
  • VCS 674 vintage 2018 Indonesian Rimba Raya credits: 6,363 credits transacted at $7.80.
  • VCS 595 vintage 2020 United States Anew Elk Forestry Project credits: $18.00.
  • VCS 1477 vintage 2019 Indonesian Katingan credits: $5.50.
  • Vintage 2015 Katingan credits: $5.00.
  • VCS 2886 vintage 2022 Malawi cookstoves credits: $3.99.
  • ACR 556 vintage 2019 United States Industrial Process credits: $2.75.
  • VCS 1115 vintage 2018 Brazilian AFOLU credits: $2.50.
  • ACR 455 vintage 2018 United States Industrial Process units: $2.00.
  • VCS 1753 vintage 2020 Indian bundled solar credits: $1.25.

An additional 200,000-plus tons of OTC transactions were settled via CBL’s automated post-trade settlement infrastructure, bringing the exchange’s total volume to 325,079 tons.

The 20-day moving average price for recent-vintage nature credits stood at $7.03, while technology instruments averaged $1.30.

What’s Happening in North American REC Market?

PJM REC market activity saw significant trading, particularly with Virginia REC trades and larger New Jersey solar REC transactions. Pricing remained stable across PJM, with New Jersey solar RECs closing at $208.00 as energy year 2024 concluded. This showed an uptick at the end of the week. 

North American REC MarketsVirginia markets experienced slight price increases for 2023 and 2024 vintages, closing at $35.40 and $35.75, respectively.

In NEPOOL markets, Massachusetts solar REC II traded at $243.00, up from $230.00 in late May. Meanwhile, Massachusetts solar REC I and Class I markets were relatively quiet. Maine Class I markets saw a 0.8% increase week-over-week, closing at $39.40.

The VCM demonstrated increased activity and competitive trading last week, indicating growing interest and engagement from market participants. Xpansiv continues to provide essential data and analytics, supporting informed trading decisions in the carbon and renewable energy markets.

Occidental Petroleum and BHE Renewables JV to Revolutionize Lithium Extraction

Saptakee S
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Occidental Petroleum and BHE Renewables JV to Revolutionize Lithium Extraction

On June 4 Occidental Petroleum and BHE Renewables announced their joint venture to extract high-purity lithium from Berkshire’s geothermal facility in California. Together, they plan to revolutionize commercial lithium production by installing TerraLithium’s Direct Lithium Extraction (DLE) technology. This partnership marks a significant step in the advancement of sustainable energy solutions.

We shall deep dive into the JV details and explore the technology in the next paragraphs:

Oxy-BHE Synergy Leading the Future of Sustainable Lithium Extraction

 The collaboration aims to leverage the strengths of both companies. Occidental will bring its expertise in chemical engineering and large-scale operations while BHE Renewables will contribute its knowledge of renewable energy and environmental sustainability.

Alicia Knapp, President and CEO of BHE Renewables has further assured that,

“This joint venture with TerraLithium represents a significant advancement in BHE Renewables’ commitment to pursuing commercial lithium production that is environmentally safe, commercially viable, and leads to good outcomes for the Imperial Valley community.”

She further envisions making Imperial Valley a global leader in lithium production.

After successfully demonstrating the technology, BHE Renewables will construct, own, and operate commercial lithium production facilities in California’s Imperial Valley. The joint venture also plans to license the technology and set up commercial lithium production facilities outside the Imperial Valley.

Oxy’s TerraLithium Acquisition Sparks Lithium Revolution

The demand for EVs and consumer electronics propels the lithium market. It is projected to soar from $22.2 billion to $89.9 billion by 2030. Conventional lithium production methods, like evaporation ponds, pose significant environmental concerns. Moreover, production facilities are heavily concentrated in Australia, Chile, and China.

  • From the company’s climate report, we discovered that Oxy’s acquisition of TerraLithium in 2022, now a wholly owned subsidiary, is a game-changer.

formed through a partnership with All-American Lithium in 2019, TerraLithium boasts patented technologies capable of cost-effectively extracting trace lithium from waste brines, ensuring ultra-high-purity lithium while minimizing environmental impacts. By acquiring the remaining interests, Oxy harnesses its expertise in chemical plant operations and brine management, promoting sustainable lithium production and securing strategic domestic lithium sources. TerraLithium’s demonstration plant in Brawley, California, near the Salton Sea, is slated to commence operations in 2024.

Jeff Alvarez, President and General Manager of TerraLithium being extremely optimistic about the merger, commented,

“Creating a secure, reliable, and domestic supply of high-purity lithium products to help meet growing global lithium demand is essential for the energy transition. The partnership with BHE Renewables will enable the joint venture to accelerate the development of our Direct Lithium Extraction and associated technologies and advance them toward commercial lithium production.”

TheTerraLithium Technology Advantage

TerraLithium owns patented Direct Lithium Extraction (DLE) technologies that transform any lithium-containing brine into a superior and responsibly sourced lithium supply. It leverages Oxy’s expertise in subsurface and chemical engineering, coupled with a track record in technology scale-up, pilot project development, and global commercialization.

This lithium extraction process promises higher efficiency and lower environmental impact than traditional methods. It minimizes water usage and reduces carbon emissions.

Notably, BHE operates 10 geothermal power plants in California, processing 50,000 gallons of lithium-rich brine every minute and generating 345 MW of clean energy.

This sustainable technology is set to meet the growing demand for lithium, crucial for EV batteries and renewable energy storage. Thus, aligning with both companies’ commitments to environmental stewardship to a low-carbon future.

Oxy’s Commitment to Net Zero goals

Oxy is committed to being part of the climate change solutions and developed the Net-Zero Strategy in alignment with the Paris Agreement. Being the largest oil and gas producers in the U.S., they have established key operations in the Permian and DJ basins and offshore in the Gulf of Mexico.

Furthermore, their subsidiary, Oxy Low Carbon Ventures, spearheads innovative technologies and business strategies that drive economic growth while curbing emissions. They are committed to global carbon management to propel a transition towards a lower-carbon future.

Additionally, it attracted significant new investments into low-carbon projects like DAC, carbon sequestration hubs, hydrogen, and notably, lithium.

Occidentalsource: Occidental

Warren Buffet’s Bold Lithium Bet

In 2021, Warren Buffett’s Berkshire Hathaway Inc. launched a groundbreaking plan to extract lithium from the superhot geothermal brines beneath California’s Salton Sea. It was believed to be a process that had never been explored before.

Here’s the image of it:

source: BHE

In 2022, they launched a demonstration project with this innovative technology. The strategic JV with Occidental is an extension of this plan. BHE Petroleum notes that if these demo projects succeed then construction of the first commercial plant could start as early as 2024. As already explained before it would essentially provide an environmentally responsible domestic source of lithium. Most significantly, all energy used in this lithium production process would be 100% renewable.

BHE Renewables is making strides in lithium production research in California’s Imperial Valley. Lithium, a crucial mineral for lithium-ion batteries used in cellphones, laptops, and EVs, dominates the brine processed at BHE Renewables’ geothermal facilities.

Will this JV Spark a Lithium Boom in the Future?

The demand for lithium is surging with the rise of EVs and renewable energy storage solutions. Technically the joint venture aims to capture a significant share of this expanding market. Furthermore, TerraLithium’s efficient and eco-friendly extraction process positions it as a competitive player in the industry.

Looking ahead, Occidental and BHE Renewables plan to scale up TerraLithium’s deployment. They are exploring opportunities to implement this technology at various sites. The goal is to enhance the supply chain for lithium, ensuring a stable and sustainable source for future energy needs.

Global oil giants are entering the electrification sector as the US and EU promote higher EV adoption and reduced fossil fuel dependency. Subsequently, Exxon Mobil aims to commence lithium production from sub-surface wells by 2027. Meanwhile, European oil leaders BP and Shell have directed investments toward EV charging stations as integral components of their energy transition strategies.

Last but not least, Richard Jackson, President, of US Onshore Resources and Carbon Management, Operations at Occidental has expressed himself that:

“By leveraging Occidental’s expertise in managing and processing brine in our oil and gas and chemicals businesses, combined with BHE Renewables’ deep knowledge in geothermal operations, we are uniquely positioned to advance a more sustainable form of lithium production. We look forward to working with BHE Renewables to demonstrate how DLE technology can produce a critical mineral that society needs to further net zero goals.”

All said and done, the partnership between Occidental and BHE Renewables signifies a major leap forward in lithium extraction technology and a transition to a greener future.

ICVCM Reveals First CCP-Approved Carbon Credits Worth 27M

Jennifer L
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ICVCM Reveals First CCP-Approved Carbon Credits Worth 27M

The Integrity Council for the Voluntary Carbon Market (ICVCM) has announced its approval of the first carbon-crediting methodologies meeting its stringent Core Carbon Principles (CCPs). 

In the latest round of assessments, seven methodologies were approved, enabling the high-integrity CCP label to be applied to about 27 million carbon credits. These credits are associated with projects that mitigate potent greenhouse gases, such as methane from landfill sites.

Currently, an additional 27 categories of carbon credits, which represent over 50% of the market, are under active assessment. This includes methodologies related to landfill gas and ODS, covering an estimated 76 million and 4 million credits, respectively. Ozone-depleting substances (ODS) are from discarded equipment like refrigerators and air conditioners.

Ongoing assessments also include popular carbon credit types, including:

  • REDD+ (Reducing Emissions from Deforestation and Forest Degradation),
  • Jurisdictional REDD (JREDD), and
  • Clean cookstoves, with results expected in the coming months.

ICVCM’s Continuous Progress in Carbon Credit Integrity

The ICVCM’s announcement of assessment decisions is a continuous process, influenced by factors such as information availability, start times, and expert availability. This staggered approach does not reflect the relative integrity of different methodologies.

ICVCM Carbon Credit Program Assessment Process for CCP label
Note: the page where the application is published: https://icvcm.org/assessment-status/

Annette Nazareth, Chair of the ICVCM, emphasized the importance of the CCP label in helping buyers identify high-integrity carbon credits. She highlighted that the approved credits come from projects capturing potent GHG, which are crucial for immediate climate mitigation. She also particularly noted that:

“This is just the beginning. We will be announcing further categories eligible for CCP-labels that meet our criteria as we continue our careful and thorough evaluation of the submitted crediting methodologies and properly consider complex issues with our expert stakeholders…”

Governments increasingly recognize the role of a high-integrity VCM in scaling up private sector finance for quality emission reduction and carbon removal projects.

The U.S. Government recently published principles for high-integrity carbon credits, aligning closely with the CCPs. Learn more about the major points of the Biden administration’s VCM policy guidelines here. 

Strengthening Trust in the VCM With “Two-Tick” Process

Under the ICVCM’s “two-tick” process, carbon credits receive the CCP label only if both the carbon-crediting program and the methodologies used are CCP-Approved. Programs like ACR, Climate Action Reserve (CAR), Gold Standard, and Verra (VCS) are CCP-Eligible, allowing them to apply the CCP label to credits from approved methodologies.

The CCP-approved status of credits will be displayed in program registries, and marketplaces are expected to bundle CCP-labelled credits for sale within the year. The CCPs set a global benchmark for high-integrity carbon credits, ensuring trust in the voluntary carbon market. They also help the market maximize its potential in combating carbon emissions. 

The CCP label guarantees that credits represent genuine emissions reductions or removals, with robust social and environmental safeguards and positive sustainable development impacts.

The ICVCM’s work is complemented by VCMI’s efforts to ensure integrity in carbon credit use. VCMI’s Claims Code of Practice provides guidance for credible net zero claims supported by CCP-Approved carbon credits.

In a joint statement on the U.S. Government’s principles, climate leaders Michael Bloomberg, Mark Carney, and Mary Schapiro urged governments to adopt common integrity standards, leveraging the ICVCM’s supply-side standards and labeling.

The Approved Carbon Credit Methodologies

The ICVCM has approved versions of three methodologies for ODS projects. This covers an estimated 12 million carbon credits, and four methodologies for landfill gas (LFG) projects, covering around 15 million credits. These methodologies include:

  • ACR’s Destruction of ODS from International Sources version 1.0
  • CAR’s Article 5 Ozone Depleting Substances Project Protocol versions 1-2
  • CAR’s U.S. Ozone Depleting Substances Project Protocol versions 1-2
  • ACM0001 – Flaring or use of Landfill Gas versions 15-19 (used by Verra and Gold Standard)
  • AMS iii G – Landfill Methane Recovery version 10 (used by Verra and Gold Standard)
  • ACR’s Landfill Gas Destruction and Beneficial Use Projects version 1-2
  • CAR’s US Landfill Protocol version 6

Amy Merrill, ICVCM’s Interim COO, stated that many methodologies under assessment might not meet the CCP criteria and could be rejected. The ICVCM’s assessment process allows programs to submit additional information or request hearings if methodologies are at risk of rejection.

Pedro Martins Barata, ICVCM Expert Panel, noted that the initial assessments raised complex issues requiring detailed expert discussions. The ICVCM aims for continuous improvement, helping programs evolve methodologies based on assessment observations.

Carbon credits using CCP-Approved methodologies must ensure genuine emissions impact, permanence, rigorous measurement, and independent verification. Reductions and removals must be additional, support the net zero transition, and avoid locking in fossil fuel emissions.

  • The ICVCM has approved five programs with a 98% market share as CCP-Eligible: ACR, ART, CAR, Gold Standard, and VCS by Verra. 

Other programs like Isometric, Puro.earth, and Social Carbon are still being assessed. The ICVCM’s assessments will continue through the year, with decisions announced monthly.

The ICVCM’s approach is modeled on financial regulators, ensuring programs adhere to rules and correctly tag credits with CCP labels. The ICVCM will audit programs, perform spot checks, and address complaints, with the authority to terminate eligibility if necessary. Continuous improvement work programs will enhance the Assessment Framework, adapting to new scientific and market developments.

Starbucks Carbon Reductions Brewing Up As Stock Price Drops

Jennifer L
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Starbucks Carbon Reductions Brewing Up As Stock Price Drops

Starbucks faced a challenging second quarter with declines across major financial metrics, including traffic, revenue, and income, resulting in its stock price plunging. Despite this, the company remains committed to sustainability, aiming to reduce its climate impact by 50% by 2030 through its ambitious “Greener Stores” initiative.

Starbucks Financials Are Boiling Down

Starbucks holds a premium status in the hearts and habits of many, yet its recent quarter revealed a harsh reality: even major consumer companies face tough times. Indeed, Starbucks’ latest results were undeniably dismal.

Starbucks’ challenging second quarter, which concluded on March 31, delivered disappointing results across the board. Key metrics such as traffic, revenue, and income experienced declines:

  • 4% decrease in comparable-store sales
  • 2% decline in consolidated net revenue
  • 2.4% drop in operating margin
  • 14% decline in earnings per share

Investors have recently taken a pessimistic view, with Starbucks’ stock dropping about 7% following the report of a quarterly decline in comparable-store sales on April 30. The stock subsequently reached a 52-week low shortly after the company announced its fiscal second-quarter results.

Starbucks stock price plunging
Source: The Motley Fool

This marked Starbucks’ first revenue downturn since the onset of the pandemic, a stark departure from the company’s long-term target of high-single-digit growth. Yet, as a brand with a 50-year history, Starbucks remains steadfast in its commitment to champion sustainability in the industry. 

The coffee chain set an ambitious goal of reducing its climate impact by 50% by 2030. This bold target includes both the direct and indirect carbon footprint of Starbucks. And a big part of this goal is the restaurant’s “Greener Stores” initiative. 

The Greener Stores Program

Starbucks designated nearly 16% of its 38,587 cafes as Greener Stores, meeting strict criteria for waste, energy, and water conservation. This marks nearly twofold increase from April 2023, with the aim of certifying 10,000 stores worldwide by the end of 2025. The majority, totaling 5,488 locations, are situated in North America, out of Starbucks’ global network of 38,600 cafes.

Across Latin America and the Caribbean, all new Starbucks stores adhere to Greener Stores standards. Meanwhile, the company’s real estate team is evaluating which markets should follow suit.

To achieve Greener Store status, locations must undergo an independent audit by SCS Global Services, confirming investments and practices across eight environmental impact areas, including:

Starbucks the Greener Stores Framework

The Starbucks location in Williamsburg, Virginia, is among the six sites recently recognized as Greener Stores of the Year. Originally a 100-year-old home, this building was repurposed into a cafe featuring:

  • Renewable energy sourced from the local grid.
  • An on-site rainwater collection system for landscape irrigation.
  • Banquettes crafted from recycled wood.

In the United States, the implementation of Greener Stores practices has slashed energy and water use by 30%. This yielded nearly $60 million in annual operational savings. As part of Starbucks’ broader corporate pledge, the company aims to halve emissions, water consumption, and landfill waste by 2030.

Starbucks GHG Emissions Reduction Goal

The coffee chain giant aims to achieve 50% absolute reduction in scope 1, 2 and 3 greenhouse (GHG) emissions involving all of Starbucks direct operations and value chain. The food company uses 2019 GHG emissions as a baseline and reported an 18% increase in emissions in 2023. 

Starbucks greenhouse gas emissions 2023 update

Starbucks scope 3 emissions 2023

To address this environmental impact, the coffee giant has been busy expanding its Greener Stores program. Slashing waste and energy through this initiative means reducing Starbucks carbon footprint, too. 

According to Michael Kobori, Starbucks’ chief sustainability officer, the long-term goal is for all new stores to be constructed according to Greener Stores guidelines, with existing locations retrofitted as updates become necessary. The standards used in Greener Stores program were developed in partnership with World Wildlife Fund (WWF) and SCS Global Services.

Taking inspiration from the LEED certification program, Starbucks introduced the Greener Stores framework in September 2018. This initiative builds upon Starbucks’ previous investment in the Leadership in Energy and Environmental Design (LEED) certification by the U.S. Green Building Council, which acknowledges environmentally conscious construction practices and design. 

Notably, Starbucks played a role in establishing the LEED for Retail designation. But unlike the LEED program, the Greener framework places a strong emphasis on operational metrics.

The Growing Trend of Green Standards in the Restaurant Industry

The adoption of standard frameworks like Greener Stores is becoming increasingly common within the restaurant industry. This is particularly among chains facing scrutiny from shareholders regarding their carbon emissions and sustainability efforts, noted Alastair MacGregor, national business line executive and green buildings analyst at consulting firm WSP.

Many establishments prioritize passive architectural design strategies aimed at reducing energy consumption. These strategies include maximizing natural lighting in seating areas and selecting appropriately sized food preparation and ventilation equipment for each location.

Last year, the world’s largest McDonald’s franchisee had also revealed a new standard for sustainability in restaurants to reduce its growing carbon emissions. The food chain partnered with UBQ Materials which employs advanced technology that can avoid GHG emissions of >14 kg/CO2 equivalent.

However, smaller retail organizations often struggle to justify the initial costs of implementing technologies that haven’t yet gained widespread acceptance.

Starbucks offers its Global Academy course free of charge to suppliers interested in staying informed about the company’s procurement requirements. It is also free to other retailers aiming to reduce the environmental impact of their real estate.

Starbucks is navigating through financial turbulence while steadfastly committing to slash its carbon footprint for a greener future. The Greener Stores initiative shows how the company is leveraging sustainability to drive long-term growth and operational efficiency. 

Copper Prices: Key Factors, Trends, and Outlook

Jennifer L
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Copper Prices: Key Factors, Trends, and Outlook

Copper’s recent price surge reflects a complex interplay of market forces, from supply disruptions to the push for renewable energy. We explore the factors pushing copper prices to near-record highs and the implications for investors amid the evolving economic landscape.

In recent times, the copper market has witnessed significant shifts, largely influenced by key events. The Cobre Panama mine closure, a major global copper producer, impacted expectations from surplus to deficit. This resulted in an upward trajectory of copper prices. 

In March, Chinese smelters decreased output amid a concentrate shortage, which pushed prices even higher.

Additionally, declining inventories of copper in major stockpiles, such as the Shanghai Futures Exchange (ShFE) and London Metal Exchange (LME), have contributed to upward pressure on copper prices. This trend stimulates demand for scrap copper as an alternative secondary source.

These factors, alongside speculative buying and supply constraints, have propelled copper prices to near-record highs, instilling investor confidence in the sector’s future.

Currently, copper prices remain above $4 per pound, reaching near a 15-month high last month. This indicates investor confidence in the copper market’s prospects.

Copper Prices LME

China’s dominance in copper consumption further amplifies its role in shaping global demand dynamics and influencing copper prices. In 2022, China consumed about 55% of the world’s refined copper, highlighting its significant impact on copper market trends.

Copper’s Role in the Energy Transition

Beyond its pricing dynamics, copper’s significance extends to its role as a vital indicator of global economic health and catalyst of decarbonization efforts. 

Copper’s crucial role in the transition to net zero emissions is increasingly recognized, particularly in renewable energy technologies and electric vehicles. However, projections indicate a potential supply-demand gap, calling for substantial investments in production and recycling to meet growing demand and achieve sustainability goals.

Key industries driving copper consumption include equipment manufacturing, construction, infrastructure, and emerging sectors such as EVs and green technologies. With the growing adoption of EVs, solar panels, and other clean energy technologies, copper demand is projected to increase substantially in the coming years. It could double by 2035.

global copper demand and supply

In light of ambitious net zero targets set for 2035, industry estimates suggest that annual copper demand may need to escalate twofold to reach 50 million metric tons. Even more conservative projections anticipate a 1/3 surge in demand over the coming decade, propelled by significant investments in decarbonization initiatives from both public and private entities.

Challenges and Opportunities Ahead

Meeting the escalating demand for copper poses challenges, including declining ore grades and environmental concerns surrounding mining activities. Addressing these challenges requires significant investments, potentially driving copper prices to new highs. Analysts foresee continued price growth in the coming years, fueled by supply-demand imbalances and increasing demand from the green energy sector.

Uncertainties surrounding China’s economic recovery and the US Federal Reserve’s monetary policy decisions add complexity to future copper price trajectories. However, analysts remain optimistic about copper’s long-term prospects, driven by the energy transition and increasing demand from sectors such as electric vehicles and renewable power.

As nations vie for access to limited future copper supplies, securing domestic or friendly sourcing and refining capabilities emerges as a strategic imperative. Strategic investments in copper production and recycling are deemed crucial to meet growing demand and achieve net zero emissions goals amidst the expanding renewable energy infrastructure and electric vehicle adoption.

In conclusion, copper’s price trends, supply chain dynamics, and demand drivers underscore its significance as an essential commodity in various industries. Understanding these intricate market dynamics is crucial for informed decision-making and navigating the complexities of the copper market.

Who Leads the Data Center Surge in the US? S&P Global Report

Jennifer L
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Who Leads the Data Center Surge in the US? S&P Global Report

As the demand for data centers surges, several regions in the U.S. are emerging as significant markets, alongside a notable increase in renewable energy projects supporting this growth, according to S&P Global Market Intelligence data.

Northern Virginia remains the leading data center market in the US and is second only to Beijing globally. It is set to retain its top position in North America, with 280 data centers in development, adding to the more than 300 already operational in the state. 

The region’s data center power consumption is expected to exceed 10 GW by 2028. Dallas and Phoenix are ranked second and third in projected data center demand by 2028. Each of them anticipate to add over 3 GW of capacity in the next five years.

Several other regions are becoming hot spots for data center development, with ten markets projected to surpass 1 GW of demand by 2028. Thanks to the growing presence of tech giants like Google and Meta, Omaha, Nebraska, currently ranks second in operating data center power demand.

Top 10 US data center markets

In Texas, data centers will benefit from an extensive array of renewable energy projects. The state has nearly 150 GW of wind, solar, and battery storage capacity in development—the largest pipeline in the US.

Over 63 GW of renewables are being developed in California. Thus, the state’s interconnection queue has expanded to 395 GW of renewable capacity.

The Power Play Among Hyperscalers

Hyperscalers, the large-scale cloud service providers using data centers at the heart of their operations, rank among the top corporate buyers of renewable energy worldwide. As of March 2024, Amazon, Meta Platforms, Google, and Microsoft hold the first 4 spots in contracted renewable energy capacity. 

However, these rankings are expected to shift following several major deals announced by Microsoft in April and May 2024. Together, these four companies have contracted over 33 GW of wind, solar, and battery storage capacity in the US. Amazon accounted for about half of this total and Meta adding another 9 GW.

Power projects in 26 states have agreements with these cloud service providers. And their geographic reach is continuously expanding as they develop new data centers. 

corporate renewable and data centers

Currently, Amazon, Google, Meta, and Microsoft collectively own or lease about 9 GW of data center capacity in the US. Based on current development plans, this capacity could nearly triple to just under 26 GW by the end of 2028.

All four companies have set ambitious goals to source 100% of their power from clean energy. With the expanding pipeline of clean energy contracts, the 2028 data center power demand projections may even be conservative.

Data Center Demand by Utility: VEPCO Leads the Charge

Dominion Energy Inc. subsidiary Virginia Electric and Power Co. (VEPCO), which services Northern Virginia, home to the largest data center fleet in the country, leads all US utilities in energy demand from data centers with 4.6 GW. This demand could surge to 15.9 GW by 2028, nearly 5x that of second-place Oncor Electric Delivery Co. 

VEPCO currently has 5.5 GW of operating renewable capacity and an additional 8.7 GW in development. State law requires VEPCO to source 100% of its energy sales from clean energy sources by 2040, alongside meeting the rapidly rising data center demand.

By 2028, the top 10 utilities by data center load could have a combined capacity demand of 35.7 GW. These utilities operate 54.4 GW of wind, solar, and battery storage capacity, with another 52.3 GW in development. 

data center demand by utility subsidiary

Several have created dedicated green tariff programs for data center companies to purchase carbon-free electricity. The increasing data center load projections are driving these utilities to expand their renewable portfolios.

Oncor, covering large parts of Texas, including the Dallas-Fort Worth area, is expected to see 3.3 GW of data center demand by 2030, though this may be a conservative estimate. Oncor has 40.6 GW of renewable capacity either operating or in development across Texas. 

Ohio Power Co., serving the Columbus area where Amazon leads data center development, is projected to have 2.8 GW of data center power demand by 2028. However, Ohio Power currently has just 1.6 GW of combined operating and planned renewable capacity.

Data Center Power Demand on the Rise

The energy needs and power demands of data centers are expected to grow impressively over the next 5 years. As the data center segment evolves rapidly, upward revisions to demand are likely as the power needs of AI become better understood. 

The critical question is whether data centers will have access to sufficient green energy supply during this rapid growth.

S&P Global Research estimates that firm data center commitments through 2028 will drive an 85% increase in data center demand. This reached an aggregate demand of 60.6 GW and 530.6 TWh of electricity use. This translates to an added demand of 27.9 GW and a usage growth of 244.1 TWh, constituting 10%-12% of US electricity usage.

projected data center power demand vs forecast green energy generation

Baseline estimates suggest that green energy expansion (solar, wind, and battery storage) will keep pace with data center growth rate. Declining costs for green energy and durable federal subsidies will drive significant expansion. 

Federal tax credits are fully transferable, allowing data center stakeholders to easily contract with new renewable power facilities. Additionally, renewable mandates enforced by Renewable Energy Certificate markets in many states further support project returns.

The US data center market is experiencing robust growth, driven by technological advancements and the increasing power demands of hyperscalers. As data centers continue to proliferate, the integration of clean energy solutions remains vital to sustain their expansion and environmental impact.

Gold Royalty Corp Joins the Charge in Sustainable Mining

Chris S
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Gold Royalty Corp Joins the Charge in Sustainable Mining

Gold Royalty Corp. (GROY:NYSE) has rapidly positioned itself as a leader in sustainable and responsible mining practices. Since its inception, Gold Royalty Corp. or GROY has expanded its portfolio from 18 to 240 royalties, including five producing projects. This remarkable growth is anchored in a steadfast commitment to sustainability, partnering only with operators who share their values.

GROY is joining other resource companies like Fortescue Metals Group, BHP, and Rio Tinto in leading the charge towards sustainable mining. Fortescue has committed to achieving real zero emissions by 2030 with a $6.2 billion investment in decarbonization projects.

Meanwhile, BHP aims to reduce its operational emissions by 30% by 2030 and achieve net zero by 2050 through renewable energy projects and electrifying operations. One of the world’s largest copper and iron ore miners, it also has a plan to use carbon credits to offset emissions. Furthermore, Rio Tinto has set a goal to reduce its emissions by 15% by 2025 and 30% by 2030, with a long-term aim of net zero by 2050, focusing on renewable energy and innovative technologies.

Gold Royalty’s Key Achievements in Sustainability for 2023

In their recent published report, the company executed several strategic acquisitions, significantly enhancing its portfolio:

  • Strategic Acquisitions: The addition of Borborema and Cozamin royalties supplements organic revenue growth from assets like Côté and Odyssey.
  • Sustainability-Linked Contributions: GROY’s first sustainability-linked contribution with Aura Minerals aims to enhance social and environmental impact at the Borborema mine in Brazil.
  • Low Carbon Footprint: With a portfolio carbon intensity of just 0.25 tons of CO2 equivalent per gold equivalent ounce, GROY leads the royalty and streaming sector in minimizing environmental impact.

Gold Royaly Corp.

 

 

 

 

 

 

 

 

Source: From Gold Royalty Corp 2023 Sustainability Report

GROY’s robust corporate governance framework is the cornerstone of its sustainability efforts. In 2023, the company enhanced its enterprise risk management (ERM) process, aligning with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. This includes their first disclosure on climate-related risks and opportunities.

David Garofalo, Chairman and CEO, emphasizes, “Our commitment to transparency and responsible business practices ensures that we remain at the forefront of sustainable mining.”

Investing in High-Quality, Sustainable Projects

GROY prioritizes investments in mining-friendly jurisdictions such as Quebec and Ontario, Canada, known for their mature climate policies and cleaner energy grids.

This strategy has resulted in lower carbon footprints for GROY’s assets compared to industry peers. Their portfolio includes royalties on some of North America’s largest gold mines, operated by leaders in sustainable practices.

Community and Environmental Stewardship

GROY’s dedication to community and environmental initiatives is evident in their 2023 accomplishments:

  • Community Contributions: Over $20,000 donated to diverse community organizations and the launch of a company-wide volunteer program.
  • Environmental Initiatives: At the Cozamin mine, operated by Capstone Copper, strong water management practices and energy efficiency measures are in place, contributing to significant reductions in greenhouse gas emissions.

Cozamin’s initiatives include a dry stack tailings facility that reduces water usage by 15% and achieving 98% energy efficiency. Additionally, Cozamin has committed to reducing GHG emissions from fuel and power by 30% by 2030.

Karri Howlett, ESG Committee Chair, states, “Our partnerships with leading operators ensure that we drive positive social and environmental outcomes.”

Capstone Copper

Sustainability Goals and Future Plans

GROY’s long-term vision includes decarbonizing their operations and portfolio, conducting business with integrity, and making positive contributions to their communities. Key progress in 2023 includes:

  • ERM Program: Effective oversight of corporate and sustainability-related risks.
  • Climate Risk Assessment: Aligned with TCFD recommendations and calculated material financed emissions.
  • Volunteer Program: Employees given the opportunity to support their communities through paid time off.

Their strategy includes investing in jurisdictions with mature climate policies, like Quebec and Ontario, and partnering with operators committed to reducing their greenhouse gas emissions.

Their focus on electrifying fleets, enhancing site energy efficiency, and adopting renewable energy sources reflects their dedication to sustainable mining. Additionally, GROY’s sustainability-linked contributions, such as those with Aura Minerals, support social and environmental initiatives at mining sites.

Looking Ahead to 2024

GROY anticipates 2024 to be a transformative year. They plan to continue their strategy of sustainable acquisitions while supporting their mining partners’ decarbonization efforts and expanding community investment initiatives.

Major Takeaways:

  • GROY’s commitment to sustainability and responsible mining sets them apart in the industry.
  • Their low carbon footprint is a benchmark in the royalty and streaming sector.
  • Community and environmental initiatives are core to GROY’s business model, driving positive social impact.

Responsible Mining Practices

By maintaining their focus on sustainable growth and responsible mining, Gold Royalty Corp. is poised to deliver unparalleled value to shareholders while positively impacting the environment and communities they operate in.

 

 

 

Copper Prices Are Plunging at Over 2% After Hitting Near 52-Week High

Jennifer L
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Copper Prices Are Plunging at Over 2% After Hitting Near 52-Week High

The copper market has experienced a notable uptrend in 2024, witnessing a surge of over 20% from mid-February until late May. But a few days after, copper prices dipped below $10,000 per metric ton amid growing global inventories and sluggish U.S. job openings data.

This fuels expectations of potential interest rate cuts by the Federal Reserve this year, while adversely impacting major copper stocks.

Inventories on the Shanghai Futures Exchange surged to levels not seen since 2020, at 321,695 tons, alongside steady inflows into Asian depots monitored by the London Metal Exchange in recent weeks, hitting 118,950 tons, the highest since April 24.

This inventory buildup, typically during declining inventories, has exerted downward pressure on prices following copper’s recent record high above $11,100 (almost $5/pound).

Copper Prices LME

This is driven partly by speculation from funds anticipating increased use of the metal in green energy sectors and concerns over potential supply shortages. However, the steep and erratic price movements deterred some physical copper consumers.

Copper Crunch: A Market in Turmoil

This year, base metals experienced a surge in expectations of reduced U.S. interest rates and indications of China’s economic recovery from the pandemic’s aftermath. However, the persistent increase in exchange inventories suggests that current buyer demand is adequately met, challenging bullish forecasts of a price uptrend.

Carsten Menke, head of next-generation research at Julius Baer, remarked that the copper market appears adequately supplied, dampening hopes for a rapid price rebound. He anticipates consolidation in the market during the summer.

Copper mining stocks, such as Freeport-McMoRan Inc. and BHP, also experienced declines, with the former down by as much as 4.8% while the latter saw a 2.0% drop. 

Freeport-McMoRan Stocks Tumbling Down

Freeport-McMoRan (NYSE: FCX) holds a prominent position in the global natural resources sector, primarily focusing on copper mining alongside gold and molybdenum exploration and production. 

With copper as its primary revenue driver, Freeport has witnessed significant stock performance over the past year. It outpaced the S&P 500 Index with a 52-week return of 50.5%, compared to the index’s 24.4% gain. Year-to-date, the copper miner has surged around 23%, aligning closely with analysts’ mean target price of $52.20.

In the first quarter of 2024, Freeport-McMoRan reported robust financial results, exceeding Wall Street expectations. The company recorded a revenue of $6.32 billion, marking a 17% increase from the same period in 2023. 

Despite a 29% decline in net income to $473 million due to higher expenses, the earnings per share (EPS) surpassed analysts’ estimates at $0.32. Freeport’s copper production for the quarter reached 1.1 billion pounds, up from 965 million pounds a year earlier, primarily driven by a significant output increase from its Indonesian operations. But with the recent plunge in copper prices, Freeport stocks also fall by up to 4.8%.

Freeport copper stocks

While Freeport’s valuation metrics suggest a premium valuation compared to historical averages and some industry peers, the strong demand outlook for copper amidst the green energy transition could potentially justify this premium.

BHP Copper Shares Dropping

The BHP Group Ltd (ASX: BHP) share price also witnesses a decline, reflecting a broader downturn in the mining sector.

Shares in the S&P/ASX 200 Index mining giant closed 1.2% lower at AUD$44.28. As of Wednesday morning, shares are trading at AUD$43.71 each, marking a further decrease of 1.3%. Meanwhile, the ASX 200 has seen a modest increase of 0.2% during the same period.

The decline in BHP’s share price on the ASX mirrors a similar trend in the miner’s international listings. In the United States, where BHP is listed on the New York Stock Exchange (NYSE), shares closed down 2.2% overnight.

BHP Group copper stock price

The primary reason behind the downward pressure appears to be a notable retreat in metal prices. 

Copper, which serves as BHP’s second-largest revenue generator after iron ore, experienced a 2.0% decline overnight, settling at US$9,945 per tonne on June 4. Despite still hovering near historic highs, the copper price has retraced about 9% since May 20.

Similarly, the iron ore price recorded a 2.1% drop overnight, reaching US$107.65 per tonne. Notably, on May 7, this vital steel-making metal was priced just below US$120 per tonne, having declined from its peak of US$143 per tonne in early January.

BHP’s merge proposal with Anglo American, which was put off, aims to cement its position as the world’s leading copper producer. If otherwise, the merged entity would have hold substantial copper assets, including key mines in South America, further solidifying BHP’s dominance in the copper market.

What’s The Future of Copper?

Despite this falling trend in copper prices and stocks, analysts remain optimistic. Hedge fund manager Pierre Andurand has made a bold prediction, suggesting that copper prices might increase to $40,000 per tonne in four years or more. This projection stems from the increasing electrification of various global industries, notably electric vehicles (EVs), solar panels, wind farms, and data centers. 

Similarly recognizing copper’s pivotal role in facilitating the transition toward green energy, analysts advocate for investing in mining stocks poised to capitalize on these emerging trends.

The demand for copper in the transport sector alone is forecasted to surge by 11x by 2050, compared to levels observed in 2022. Notably, EVs, which incorporate extensive copper wiring, are a significant contributor to this demand increase.

Furthermore, the requirement for copper to expand the global electricity grid is anticipated to grow by 4.8x by 2050, compared to 2022 figures. And according to BloombergNEF estimates, the projected copper supply deficit is expected to reach nearly 10 million tonnes by 2030.

Despite the recent downturn in copper prices and mining stocks, analysts remain optimistic about the long-term prospects of the copper market. With projections of soaring demand driven by the electrification of global industries, particularly in the transport and energy sectors, copper continues to play a crucial role in the transition towards green and sustainable technologies.

US Data Center Power Use Will Double by 2030 Because of AI

Jennifer L
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US Data Center Power Use Will Double by 2030 Because of AI

Amid the energy transition, data centers play a pivotal role as greedy consumers of electricity, driving demand and shaping the future of power generation and distribution.

Data centers could consume between 4.6% and 9.1% of US electricity by 2030, according to an analysis by the Electric Power Research Institute (EPRI). 

The EPRI white paper “Powering Intelligence: Analyzing Artificial Intelligence and Data Center Energy Consumption” outlines four data center electricity consumption growth scenarios from 2023 to 2030. 

Continuous Operation and Rising Demand

Data centers operate continuously, requiring substantial power to support their systems and equipment. The power consumption in data centers is typically divided between IT equipment and infrastructure resources like cooling and power conditioning systems. 

In 2023, global data centers consumed 7.4 GW of power, marking a 55% increase from 4.9 GW in 2022, according to a separate report by Cushman & Wakefield. This significant rise underscores the substantial environmental impact associated with the energy demands of data centers.

U.S. data center load could grow to nearly 21 GW this year, up from 19 GW in 2023, according to a Federal Energy Regulatory Commission (FERC) report. By the end of the decade, this electricity demand will climb to 35 GW, according to the FERC.

Currently, data centers account for over 4% of the total US electricity load but could rise to 9% by 2030. This growth is due to increasing computing power needed by artificial intelligence (AI).

AI queries needs about 10x the power use of traditional internet searches, while generating AI-made music, photos, and videos requires much more.

  • A traditional Google search uses about 0.3 watt-hours (Wh), while a query using ChatGPT, the chatbot developed by OpenAI, requires around 2.9 Wh, EPRI reported.

The International Energy Agency predicts US data center electricity consumption will rise from 200 TWh in 2022 to about 260 TWh by 2026, making up 6% of total power demand. Boston Consulting Group projects this could reach 7.5% by 2030. 

EPRI’s Four Datacenter Energy Consumption Scenarios

The EPRI report analyzes the future energy consumption of power-hungry data centers under four scenarios.  

In a low-growth scenario, data centers’ electricity consumption would grow by 3.7% annually, reaching 4.6% by 2030. This is primarily driven by limited AI tool adoption and significant efficiency gains. 

A moderate-growth scenario predicts a 5% annual growth rate, resulting in data centers consuming 5% of US electricity. Meanwhile, high-growth scenarios foresee annual growth rates of 10% and 15%, with data centers consuming 6.8% to 9.1% of the nation’s electricity by 2030. The highest growth scenario is based on rapid AI adoption and limited efficiency improvements.

EPRI U.S. Data Center Load Projections

US data centers power use under 4 scenarios EPRI analysisEPRI emphasizes three key strategies to manage this growth, which are: 

  • Enhancing data center efficiency and flexibility, 
  • Improving coordination between data center developers and electricity providers, and
  • Developing stronger modeling tools to plan long-term grid investments. 

These measures aim to support technological advancements while ensuring grid reliability and minimizing impacts on customers.

Regional Power Challenges and Strategic Planning

As of March, the Electric Power Research Institute reported 10,655 data centers worldwide, with approximately half located in the US. In 2023, about 80% of US data center load was concentrated in 15 states, led by Virginia and Texas. 

2030 data centers % of US state electricity use

EPRI highlighted the challenges posed by data centers’ demands for highly reliable power, requests for new non-emitting generation sources, and short lead times for connection (two years or less), which can strain local and regional electricity supplies.

Data centers consumed roughly a quarter of Virginia’s electricity in 2023, the highest in the US, followed by North Dakota at over 15%, and Iowa, Nebraska, and Oregon each exceeding 11%. 

EPRI projected that with evenly distributed growth, Virginia’s data center load share could rise to nearly 50% in a high-growth scenario and average 36% across four scenarios. In other states, the data center load share could approach 20% or more, although actual growth could be unevenly distributed.

Hyperscalers and colocation centers dominate the US datacenter landscape, with significant growth projected in regions like Dallas-Fort Worth, Silicon Valley, Chicago, New York Tri-State, and Atlanta, potentially increasing power demands by 50% or more.

Data Center Capacities by Metropolitan Area

US data center development by region

Utilities across the US are recognizing both the opportunities and challenges posed by data center development, especially regarding load growth and generation investments. 

Indeed, analysts anticipated that data center power demand fuels U.S. utility Q1 2024 earnings discussions. 

EPRI findings underscore the critical need for strategic planning and infrastructure development to accommodate the increasing energy demands of data centers while ensuring grid reliability and meeting environmental goals. EPRI Vice President of Electrification and Sustainable Energy Strategy David Porter remarked that:

“The data center boom requires closer collaboration between large data center owners and developers, utilities, government, and other stakeholders to ensure that we can power the needs of AI while maintaining reliable, affordable power to all customers.”

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