A Green Journey: Key Insights from Nikola’s First Sustainability Report

Saptakee S
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A Green Journey: Key Insights from Nikola’s First Sustainability Report

Nikola, America’s favorite zero-emissions truck brand, released its first Sustainability Impact Report. This report provides a comprehensive picture of Nikola’s environmental and social initiatives and explains their progress toward sustainability goals.

Nikola owns battery-electric vehicles (BEVs) and hydrogen fuel cell (FCEV) Class 8 trucks, designed specifically to make the environment safer and cleaner. Most significantly, HYLA’s hydrogen refueling ecosystem offers a robust hydrogen infrastructure to support the shift to sustainable fuel sources.

Driving Towards a Zero-Emission Future

The Environmental Protection Agency (EPA) reports that transportation generates around 28% of direct U.S. greenhouse gas (GHG) emissions. Medium- and heavy-duty trucks alone account for about 23% of these emissions. However, the EPA also highlighted that with the rise in transportation costs and freight demands, zero-emission vehicles can be a solution for a sustainable future.

EPA NIKOLA

So Nikola’s mission is clear: to lead the transition to zero-emission technology across critical routes. Thereby, supporting a climate-friendly future for commercial transportation.

Steve Girsky, President and CEO of Nikola, stated,

“Our focus is on zero-emission technologies and the infrastructure to support them, decarbonizing what has been known as a very ‘dirty’ market segment, Class 8 trucks. Medium- and heavy-duty trucks produce more emissions than passenger cars and rail combined. Our commitment—our mission, really—to improving air quality, avoiding emissions, and mitigating our contributions to climate change is why most of us work for Nikola. What we are most proud of, besides our dedicated team, is bringing our battery electric truck to market while developing and launching our hydrogen fuel cell electric truck shortly thereafter.”

Nikola’s sustainability report reveals an interesting piece of information. The company was founded to tackle transportation emissions, specifically. In addition to its net-zero goals, it prioritizes drivers’ health, safety, and community well-being where Class 8 trucks operate.

The truck giant strongly believes that zero-emission transportation is achievable, which is why the company aims to expand its impact throughout the nation.

Environmental Impact and Greenhouse Gas Emissions

Nikola recognizes the risks of climate change and the opportunities that proactive measures offer. The company has taken the following actions to address these risks and capitalize on opportunities:

  • Investment in clean technology and innovation
  • Measurement and identification of emission sources
  • Commitment to renewable energy and energy efficiency in operations
  • Installation of EV charging infrastructure for Nikola trucks and employees
  • Adoption of circularity principles and waste diversion strategies for improved sustainability

In 2023, Nikola’s total emissions (Scope 1 and Scope 2) were 5,155.56 MT CO₂e.

Nikola

Hydrogen Trucks Hit the Highway

In Q4 2023, the company introduced hydrogen fuel cell electric trucks on the road in North America. By year-end, 42 trucks were manufactured, with 35 delivered to dealers and seven retained for ongoing testing and fleet demonstrations.

Early in 2024, the first HYLA modular refueling station was launched in Ontario, California, alongside a new partnership with FirstElement Fuel to offer hydrogen fueling solutions in both Northern and Southern California, including Oakland.

Nikola views both battery electric trucks powered by the grid and hydrogen fuel cell electric trucks as essential to reducing emissions in heavy-duty transportation. The company remains dedicated to advancing both vehicle technologies and fueling infrastructure for broad deployment.

The 3-R Approach to Battery Lifecycles

Nikola is committed to a circular economy, where truck and battery components are built to last long. They can be reused and recycled efficiently. The company collaborates with partners to manage materials responsibly at every stage of a vehicle’s life, focusing on durability and resource efficiency.

Regarding battery sustainability, Nikola has a battery circularity policy based on the 3 Rs: remanufacture, reuse, and recycle all pre-consumer and production batteries. Currently, Nikola’s recycling partners recover up to 95% of materials from lithium-ion batteries, aiming to recycle 100% of scrapped batteries. Notably, last year, the truck titan reused 192 metric tons of batteries.

The company also believes in extending battery life as the most sustainable choice. They use advanced vehicle software to receive over-the-air (OTA) updates that improve battery efficiency and extend battery life before recycling.

Waste and Water Management

The report also highlights the company’s dedication to improving manufacturing practices and minimizing environmental impact. A Waste Management Committee meets regularly to measure performance and implement strategies. They prioritize recycling materials such as steel, aluminum, lithium-ion batteries, plastic, and cardboard. Additionally, Nikola is mindful of water usage, primarily using water for vehicle quality testing and recycling.

Nikola’s environmental impact data for the last year is as follows:

nikola

Resource and Energy Efficiency at Nikola Facility

Nikola is committed to maximizing its resource efficiency and minimizing its manufacturing impact. The 670,000-square-foot Coolidge facility uses advanced eco-friendly technologies, including energy-efficient LED lighting, HVAC systems, and daylighting to cut artificial lighting needs.

Additionally, smart-controlled energy systems optimize resource use, while on-site solar panels and EV charging stations support sustainable practices. Nikola has also deployed electric automated guided vehicles (AGVs) and forklifts to further reduce emissions.

The total energy consumption at the facility is 7,491,559 kWh, of which 771,960 kWh is generated through solar.

By embracing these initiatives, Nikola is paving the way for a more sustainable future.

Disclaimer: Data and visuals- Nikola Sustainability Impact Report

U.S. Expands 45X Tax Credits: What Does It Mean For Nickel and Other Miners?

Jennifer L
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U.S. Expands 45X Tax Credits: What Does It Mean For Nickel and Other Miners?

The U.S. recently expanded a manufacturing tax credit to cover extraction and material costs, benefiting metal refiners but excluding pure mining companies. This update was announced in final regulations by the Treasury Department and Internal Revenue Service (IRS).

The credit, known as the Section 45X Advanced Manufacturing Production Credit, is part of the Inflation Reduction Act. It aims to support the domestic production of clean energy products, including renewable components, battery materials, and 50 essential minerals critical to the energy transition. 

What is Section 45X Tax Credit and How Does It Work? 

Since its inception, the Advanced Manufacturing Production Credit has already spurred private-sector investments. It has driven $126 billion in investment announcements, including $6 billion targeted for critical minerals, according to the Treasury Department.

The 45X tax credit offers financial benefits for producing solar and wind components, battery parts, and refining or recycling critical minerals. Manufacturers earn credits based on unit production, electrical capacity, or production costs. Importantly, these credits are transferable, allowing companies to maximize their benefits.

  • Starting in 2023, the credit is available until 2032, with most goods phasing down to 75% of the credit value in 2030, 50% in 2031, and 25% in 2032, though critical minerals are exempt from this reduction. 

This stable, decade-long credit has encouraged long-term investments, with manufacturing investments rising 305%. According to Clean Investment Monitor data, they reached $89 billion in 2023-2024 from $22 billion in 2020-2022.  

actual manufacturing investments by technology

The 45X tax credit works by providing a specific tax credit value for each eligible component under IRS guidelines. To qualify, manufacturers must ensure their products meet the requirements outlined in the 45X regulation. Additionally, for the tax credit to be claimed, the component must be sold to an unrelated third party. 

Alaska Energy Metals

The Expanded Scope of 45X Tax Credit

Initially, the tax credit did not cover extraction or material costs. However, after seeking industry input, the Biden administration decided to broaden the credit’s application.

With this change, the tax credit now includes costs related to materials and extraction for qualifying minerals and electrode materials, provided they meet specific conditions. The Treasury Department stated that this decision is intended to encourage investment in U.S. critical mineral extraction and processing. The broader goal is to enhance U.S. energy security and strengthen clean energy supply chains.

The 10% production cost tax credit applies to highly refined metals. This move is part of a U.S. strategy to build supply chains that support energy transition sectors, like electric vehicles and green energy. Eligible minerals include essential battery metals such as nickel, lithium, and graphite, along with rare earth elements like neodymium.

Treasury Secretary Janet Yellen commented that the final regulations will help companies investing in the U.S. clean energy economy. Additionally, the Treasury confirmed that the tax credit extends to components made with foreign-sourced materials.  This aspect of the rule is intended to ensure flexibility for U.S. manufacturers, particularly in sectors where certain raw materials are difficult to source domestically.

A Boost for Critical Mineral Refiners, But Pure Miners Miss Out

Nickel production, along with other battery metals, would greatly benefit from the tax credits. This comes timely after primary nickel production, which includes ferronickel for steelmaking and intermediates for EV batteries, saw significant growth. 

S&P Global Commodity Insights reported that the top 5 publicly listed nickel producers reached a combined output of 158,937 metric tons. It represents a substantial 35.6% increase from Q2 2023. This boost is largely attributed to the rising demand for refined nickel products, especially for use in EV batteries.

The recent nickel price slump has hit profitability industry-wide, yet companies are hesitant to cut production. They fear that doing so may lead to a loss in market share. 

With the expanded 45X credits, primary nickel producers will have more reasons to accelerate their production. 

However, the final rules of the expanded credit have not gone far enough in the eyes of many in the mining sector. Specifically, pure-play mining companies, which focus solely on extraction without refining, remain ineligible for the credit. 

Stimulus for Clean Energy Goals, Yet Gap Remains

The National Mining Association (NMA) has expressed disappointment, arguing that the regulations do not align with the original intent of Congress to strengthen the entire U.S. mineral supply chain. 

The organization had previously requested that the tax credit apply to all domestic mining companies, regardless of whether they also refine materials. However, the new rules limit credit only to producers who both mine and refine materials. This decision leaves out U.S.-based miners who do not have refining capabilities, and the credit still applies to imported materials.

Rich Nolan, president and CEO of the NMA, criticized this limitation. He stated that the rule does not adequately support efforts to address strategic vulnerabilities in U.S. mineral supplies, especially as it allows credit for foreign-sourced materials.

The NMA argues that this oversight hinders U.S. competitiveness, particularly against countries like China and Russia that dominate global mineral supply chains with cheaper materials.

As the clean energy market grows, balancing interests across the sector will remain challenging. Ensuring that a diverse range of domestic mining companies can benefit from the tax credit will be essential to achieving a resilient, self-sustaining U.S. critical mineral supply chain.

U.S. Retires Over 267 Million Carbon Credits Amid Push for Voluntary and Compliance Market Integration

Jennifer L
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0
U.S. Retires Over 267 Million Carbon Credits Amid Push for Voluntary and Compliance Market Integration

In the lead-up to COP29, several major announcements on carbon markets are anticipated. These will likely include updates on Article 6 cooperation, enhanced compliance mechanisms, and new developments in voluntary carbon markets (VCM).

A report by the Allied Offsets on carbon markets outlines the evolving landscape and its implications for companies and policymakers. Here are our major takeaways from the report. 

What is Article 6 All About?

Article 6 of the Paris Agreement allows countries to meet their climate targets by working together through carbon markets (Articles 6.2 and 6.4) and other non-market approaches (Article 6.8). 

Article 6.2 facilitates international cooperative approaches, with 91 agreements currently in progress. Leading nations like Japan, Singapore, and Switzerland have spearheaded these efforts, with many deals at either the Memorandum of Understanding (MOU) stage (61%) or finalized bilateral agreements (22%).

  • Among host countries, Cambodia is at the forefront, with the highest emission reductions (56.75 million tons of CO2 equivalent) authorized through various initiatives.

Rwanda has taken unique steps. It mandates that 10% of its mitigation outcomes go to domestic use, 2% contribute to global emissions mitigation, and 5% fund adaptation initiatives. Similarly, Malawi reserves 10% of its outcomes for national use.

Article 6 host countries

The compliance market saw new additions to its eligible credit schemes, including Singapore’s carbon tax and Taiwan’s carbon levy. 

The report highlights the eligibility of voluntary carbon credits in the compliance market. Over 829 million unretired voluntary credits can now be used in 12 different compliance schemes worldwide. Colombia stands out for its market liquidity. Meanwhile, Taiwan and Singapore have set stringent criteria for using international carbon credits domestically.

Singapore’s tax, set at S$25 ($18) per ton for 2024-2025, allows corporations to offset up to 5% of taxable emissions with International Carbon Credits (ICCs). However, the credits must adhere to seven key principles to maintain high environmental standards. 

Taiwan’s Ministry of Environment has laid out foundational regulations for a carbon fee system that permits certain industries to offset up to 5% of emissions using internationally recognized credits.

Navigating Convergence of Voluntary and Compliance Carbon Markets

As of the latest update, there are 348,414,639 eligible carbon credits from 3,343 projects across 11 different schemes in the market that are available for domestic carbon pricing instruments. A significant portion of these credits (17%) and projects (36%) comes from Australia’s Safeguard Mechanism, with 2,339 projects participating. 

carbon credits for domestic carbon pricing
Source: Allied Offsets report

Among international market mechanisms, CORSIA-eligible credits have the highest trading activity, involving 119 brokers. In contrast, the highest number of unique brokers for compliance-eligible credits tied to domestic carbon pricing instruments is seen with Taiwan’s carbon levy (57 brokers) and California’s (47 brokers).

The line between voluntary and compliance markets is blurring as an increasing share of voluntary credits are retired for compliance. Presently, 28% of the VCM’s all-time credit retirements have been used for compliance purposes. 

Colombia, South Korea, and South Africa are at the forefront of this shift. More entities turn to VCM credits to meet their national and regional emissions targets.

Of the VCM’s 1.6 billion all-time retirements and cancellations, 23% (367 million tons of CO2 equivalent) have been directed toward compliance under national carbon pricing systems. For example, Colombia, South Africa, and parts of Mexico (like Querétaro) are notable users of offsets under national carbon taxes. 

All-time Retirements vs. Credits Cancelled for Compliance Purposes
Source: Allied Offsets report

Larger markets such as Brazil, China, and India are integrating carbon offsets into emissions trading systems. Plus, many countries are expected to include carbon removals in these systems starting in 2025.

The U.S. leads in carbon credit cancellations, with over 267 million credits retired within California and Washington’s offset programs. Colombia follows closely with 61 million credits canceled.

South Korea and South Africa have also demonstrated significant activity in compliance offset markets. South Korea’s compliance program (KOP) canceled 20.5 million credits, while South Africa’s Carbon Offset Administration System canceled 15.2 million.

VCM Credits Retired for Compliance Purpose per year
Source: Allied Offsets report

Expanding Role of Compliance-VCM Intermediaries

An increasing number of intermediaries are key in bridging the VCM and compliance markets. Since 2019, there’s been a 137% surge in entities actively involved in credit cancellation or retirement for compliance. South Africa, Colombia, and South Korea leading the trend. 

Companies like Primax Colombia, Chevron, and Biomax in Colombia, are prominent participants in compliance-retired credits. Hu Chems Fine Corp in South Korea, and Sasol and AEL Mining Services in South Africa are also part of the top 25 canceling entities.

Top 25 Cancelling or Retiring Entities by Project Country
Source: Allied Offsets report

Compliance Market Gains Momentum For National Commitments

Interest in Article 6-based cooperation has expanded among nations aiming to fulfill their Nationally Determined Contributions (NDCs). These cooperative approaches enable countries to count cross-border carbon credits toward their climate targets. 

Through initiatives under Articles 6.2 and 6.4, countries and companies alike can partake in carbon reduction activities beyond their borders, accelerating global emissions mitigation.

In 2024, other large countries like Brazil and India made strides in integrating avoidance and reduction credits in emissions trading schemes. This highlights a trend toward including more diverse offset types.

By 2025, countries like Japan, the UK, and the EU are anticipated to focus on incorporating removals. The EU is taking steps through regulations like the Carbon Removals and Carbon Farming Regulation (CRCF).

Ultimately, the report shows that the carbon market landscape is evolving rapidly, shaped by new cooperative agreements and compliance mechanisms. Most notably, it reveals the growing role of voluntary carbon market credits for regulatory compliance purposes. 

Gentoo.earth Launches AI-Driven Platform to Simplify Corporate Net Zero

Saptakee S
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0
Gentoo.earth Launches AI-Driven Platform to Simplify Corporate Net Zero

Gentoo.earth, a California-based company has launched an advanced, AI-powered intelligence platform to support carbon removal companies to scale up their operations. The company is founded by Juliet Kirby, an ex-Product Manager at Australian food-tech company Harvest B and former Oliver Wyman Management Consultant.

With powerful insights into market trends, their innovative tool can simplify the complexities of carbon removals and support companies for a lasting impact. This strategy will also help rebuild the VCM from the very beginning to achieve a measurable impact.

Fixing a Market in Crisis: Tackling VCM Challenges with Innovation and Transparency

The company has fairly analyzed the flaws of the traditional Voluntary Carbon Market (VCM). Due to an unstable foundation, it suffers from conflicting incentives, unreliable methodologies, and a few unreliable parties. As a result, the VCM has largely failed to support the global net-zero transition.

According to Gentoo.earth, the key issues include:

  • Shortage of permanent removals as the market lacks a steady supply of long-term carbon removal solutions.
  • Inconsistent standards create confusion and entry barriers.
  • Flawed, untrustworthy methods and opaque practices have damaged market credibility.

Elaborating further, the VCM faces problems due to unclear guidance on how carbon credits support net zero goals. There are also limited options for permanent fossil fuel emissions removal, making it hard for companies to find effective solutions. Another significant issue is the high costs for permanent removals that discourage buyers and reduce market participation.

These challenges contribute to a market that struggles to make a tangible contribution to global net-zero goals. Due to this inconsistency, corporations often find it difficult to track and understand varying net-zero strategies. This makes it hard for carbon removal companies to find suitable buyers.

Unveiling Demand in Carbon Removals

Gentoo.earth addresses a critical question in the market: Where are the buyers? By analyzing thousands of corporate climate reports, the platform has discovered that 19% of evaluated companies are interested in permanent carbon dioxide removal (CDR) solutions, even though they may not be highly visible to suppliers.

This data highlights an untapped demand for durable removals and bridging a significant gap in the market.

So, what are their solutions for carbon removal companies?

Gentoo.earth’s Solution: Empowering Carbon Removers

Gentoo.earth empowers carbon removal suppliers by offering unique, data-driven insights traditionally held by buyers. The platform encompasses detailed data from over a thousand public companies, shedding light on:

  • Corporate Net-Zero Targets: Track goals and commitments.
  • Annual GHG Reduction Progress: Monitor companies’ progress toward emissions goals.
  • Carbon Credit Strategies: Discover carbon credit preferences and usage.
  • Key Climate Priorities: Identify what drives companies’ climate agendas.

By consolidating this data, Gentoo.earth makes it easier for companies to find buyers, saving them up to 80% of the time they would spend analyzing climate strategies manually.

Building a Sustainable VCM for the Future

The VCM must scale rapidly to mitigate the impact of climate change effectively. To achieve this, the company advocates a fundamental reset based on transparency, scientific rigor, and equitable access to data across market participants. Key aspects of this transformation include:

  • Independent standards and exchanges: built with scientific accuracy and impartial oversight.
  • Clear carbon credit pathways: establishing which credit types apply to specific emissions sources.
  • Accessible market data: ensuring all participants have access to transparent, high-quality data.

Gentoo.earth

source: Gentoo.earth

The company draws inspiration from Bloomberg’s transformative approach in financial markets, where increased transparency enabled both buyers and sellers to make informed decisions, drastically increasing transaction volumes. They also envision a similarly transparent VCM, where suppliers gain insight into buyers’ demands, reducing friction and accelerating market growth.

Overall, with this explanation, one can understand how Gentoo.earth’s innovative platform transforms the VCM by enabling suppliers to efficiently meet buyer demands. With these tools, carbon removal companies can succeed and create a more effective and sustainable carbon market together.

Strategic Acquisition: Uranium Royalty Corp. Adds Cameco’s Uranium Projects to its Portfolio

Saptakee S
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0
Strategic Acquisition: Uranium Royalty Corp. Adds Cameco’s Uranium Projects to its Portfolio

Uranium Royalty Corp. (NASDAQ: UROY, TSX: URC) recently announced the acquisition of a royalty on the Millennium and Cree Extension Uranium Projects located in Saskatchewan, Canada. The company purchased this royalty from a third-party industrial gas firm for $6 million in cash.

Scott Melbye, Chief Executive Officer of Uranium Royalty Corp. stated:

“We are very excited to acquire this significant royalty on the Millennium and Cree Extension Projects. Cameco has previously completed substantial development work on the Millennium project and it remains one of the largest undeveloped projects in Cameco’s portfolio. It represents an important potential contributor to the future global production pipeline. The transaction is another example of our ability to leverage the URC team’s experience and networks to source and execute accretive uranium royalty transactions.”

The Millennium Project

The Millennium Project is an advanced-stage conventional uranium project located 36 km northwest of Cameco’s Key Lake Mill in Saskatchewan, Canada. This project is a joint venture between Cameco and Japan Canada Uranium (JCU). Cameco holds a 69.9% equity share and operates the project.

As one of the largest global suppliers of uranium fuel, Cameco plays a vital role in promoting a clean-energy future. JCU, a Canadian exploration company, focuses on Saskatchewan’s Athabasca Basin and is jointly owned by Uranium Energy Corp. and Denison Mines Corp.

Uranium

Figure: Location of the Millennium deposit – Source: Cameco Corporation website

The Cree Extension Project

The Cree Extension Project is currently in the exploration stage and is situated 36 kilometers northwest of Cameco’s Key Lake Mill. This project is a joint venture between Cameco, Orano Canada Inc., and JCU. The land is located to the west of Denison’s Wheeler River project and southwest of Cameco’s McArthur River project.

Cameco’s Uranium Revelation

Cameco Corporation, headquartered in Saskatchewan, Canada is the operator of the Millennium and Cree Extension Uranium Projects. The company submitted an Environmental Impact Statement (EIS) in 2009. The EIS outlined plans for the project to produce between 150,000 and 200,000 tons of ore annually, with a potential mine life of 10 years.

They reported that:

  • The Millennium Project contains an estimated 1.4 million tons of resources at an average grade of 2.39% U3O8. This equates to 75.9 million pounds of U3O8 in the indicated category.
  • Additionally, it has 0.4 million tonnes at an average grade of 3.19% U3O8, totaling 29.0 million pounds in the inferred category.

However, on May 15, 2014, Cameco decided to withdraw the EIS application due to unfavorable market conditions at that time.

The Millennium and Cree Extension Royalty

The press release revealed that the royalty consists of a 10% net profit interest (NPI) based on an approximate 20.6955% participating interest in the projects. This participating interest was transferred to the current owners in 1992.

In this profit-based arrangement, royalties are calculated from the revenue generated, with deductions allowed for certain expenses, including cumulative development costs. Royalties are only payable after all eligible preproduction expenses are recovered.

By securing royalties on these two projects, URC gains rights to about 12,800 hectares in the Athabasca Basin, which has the world’s top mining areas.

Uranium Royalty Corp.: Powering Decarbonization with Nuclear Efficiency

The only pure-play uranium royalty company is focused on capturing value from uranium price shifts through strategic investments. These include royalties, streams, debt, equity in uranium companies, and even physical uranium holdings. Notably, the company is growing with the rising demand for uranium.

  • IEA revealed that in the U.S. alone, nuclear energy supplied roughly 19% of total electricity in 2022 and accounted for 55% of the nation’s carbon-free electricity.
  • This nuclear output mitigated around 482 MMT of CO₂ emissions, which is equivalent to taking 107 million gasoline-powered vehicles off the roads.

More Power per Punch: Nuclear Energy Outshines Fossil Fuels

carbon credits

Nuclear energy is not only one of the safest but also among the most cost-effective and economical ways to achieve the decarbonization target.

The U.S. government is boosting nuclear energy with a $6 billion program from the Bipartisan Infrastructure Bill to support plants shifting to clean energy. The Inflation Reduction Act also offers Production Tax Credits that can drive investments to upgrade the plants.

Moving on and talking about sustainability, Uranium Royalty Corp. will collaborate with its property manager to measure emissions from its corporate office (Scope 1 and 2) for FY 2023. Additionally, the uranium miner will explore opportunities to co-invest with operators to advance shared sustainability priorities.

Disclosure: Owners, members, directors, and employees of carboncredits.com have/may have stock or option positions in any of the companies mentioned: UROY.

Carboncredits.com receives compensation for this publication and has a business relationship with any company whose stock(s) is/are mentioned in this article.

Additional disclosure: This communication serves the sole purpose of adding value to the research process and is for information only. Please do your own due diligence. Every investment in securities mentioned in publications of carboncredits.com involves risks that could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

Copper Prices Swing as China’s Stimulus Sends Mixed Signals—What’s Next for 2025?

Jennifer L
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0
Copper Prices Swing as China’s Stimulus Sends Mixed Signals—What’s Next for 2025?

Copper, the third most used metal, plays a crucial role in the energy transition, particularly in electrification and renewable energy. Recent market movements, particularly China’s stimulus measures, have led to significant volatility in copper prices, making the metal’s future uncertain.

China’s Economic Moves Drive Copper’s Price Rollercoaster

Copper futures are actively traded on major platforms like the London Metal Exchange (LME), COMEX, and the Multi-Commodity Exchange (MCX) in India. Copper is the third most used metal globally, particularly in modern industries. 

Chile is the top producer, contributing over one-third of the world’s supply, followed by Peru, the Democratic Republic of the Congo, China, the United States, and others. The largest copper importers include China, Japan, India, South Korea, and Germany.

Copper prices have shown significant volatility in October 2024, driven primarily by economic developments in China. The country’s central bank introduced a substantial stimulus package in late September to revive its economy, including monetary measures like lowering interest rates and easing mortgage payments. 

These actions briefly boosted copper demand and drove the London Metal Exchange three-month (LME 3M) copper price to a four-month high of $9,995 per metric ton on September 27. 

However, the optimism was short-lived as market participants realized that details about the spending of the stimulus package were unclear. This, combined with a stronger U.S. dollar and weaker demand for copper, led to a price dip. 

By October 17, the LME 3M copper price had fallen to $9,506 per metric ton as reported and shown below by S&P Global Commodity Insights.

copper prices decline by mid-October

On Monday, copper futures fell to around $4.31 per pound after gaining in the prior two sessions. This decline was driven by a stronger dollar and rising U.S. Treasury yields as a resilient US economy dampened hopes for significant interest rate cuts by the Federal Reserve. 

Meanwhile, investors are watching the upcoming National People’s Congress meeting in China (November 4-8) for updates on debt and fiscal measures. 

Production Setbacks Tighten Supply

Global copper supply has faced challenges, particularly from production setbacks in key regions. A significant incident affecting supply was a fire at Freeport-McMoRan Inc.’s Manyar smelter in Indonesia, which delayed the smelter’s production start to early 2025. This event has resulted in adjustments to the concentrate market deficit forecast. 

Other production challenges included reduced output at key smelters in China, including Baiyin and Jinxin, further tightening the concentrate supply.

  • Therefore, the anticipated deficit for 2024 is now at 52,000 metric tons. And a larger deficit of 848,000 metric tons is projected for 2025.

copper forecast production S&P Global

Despite these supply disruptions, treatment charges (TC) for copper concentrates could stay at $35 per dry metric ton in 2025. This suggests that tightness in concentrate supply will persist, potentially causing upward pressure on smelter margins.

Demand Dilemma: EV Boom Bolsters Copper, But Buyers Hold Out for Better Prices

The Chinese market exhibited mixed signals. Following the national holidays in early October, downstream copper buyers anticipated further price drops, leading to a slowdown in new orders. 

As a result, production cuts were reported among wire and cable manufacturers. Some buyers shifted to using copper scrap due to its greater availability, delaying purchases of primary copper.

Not all demand indicators were weak. China’s electric vehicle (EV) sector provided a boost, with EV production rising 48.8% year-over-year in September 2024. This trend supported higher demand for copper components, crucial in EV manufacturing. 

Copper is the best metal for conducting electricity, so it is critical for EVs and batteries, as well as other green energy sources like wind and solar. 

An EV uses about 3x more copper than a regular gas-powered car. As the shift to cleaner energy continues, EVs are expected to increase their share of total copper demand from around 11% in 2021 to over 20% by 2040. 

  • According to BHP’s data, global copper demand will increase by about 70%, reaching over 50 million tonnes annually by 2050. The traded metal will see an average annual growth rate of 2% as shown below.
copper demand projection 2050 BHP
Source: BHP website

Market Outlook: Copper Prices in 2025

Looking ahead, experts expect copper prices to stay under pressure due to the current balance of supply and demand. However, potential boosts in orders at lower prices and seasonal demand could provide support for prices. 

For 2025, the forecast is for a tighter concentrate market, with a predicted shortfall of 848,000 metric tons. This, in turn, could help stabilize prices around $9,825 per metric ton. Despite current challenges, the outlook suggests a mix of cautious optimism and continued volatility in the copper market.

Microsoft Inks Groundbreaking Deal with Ebb Carbon for Ocean CO2 Removal

Saptakee S
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0
Microsoft Inks Groundbreaking Deal with Ebb Carbon for Ocean CO2 Removal

Microsoft added another feather to its cap with this sustainability commitment. It has partnered with Ebb Carbon to remove up to 350,000 tons of CO2 over the next decade using Ebb Carbon’s Electrochemical Ocean Alkalinity Enhancement (OAE) technology. The entire deal focuses on marine carbon dioxide removal (mCDR), and is believed to be the biggest so far in this space.

Understanding Ebb Carbon’s Flagship OAE Technology

Ebb Carbon, a climate tech start-up focused on marine carbon dioxide removal (mCDR), operates on the philosophy that “the ocean is one of the largest carbon sinks on the planet.”

The company is pioneering a new method for capturing atmospheric carbon and combating ocean acidification, known as Electrochemical Ocean Alkalinity Enhancement (OAE).

Inspired by nature, Ebb Carbon’s solution mirrors how plants absorb CO2. Instead of relying on land-based methods, they target the ocean to capture and store vast amounts of carbon dioxide permanently.

The 3-Step Process

Ocean alkalization is a natural process that occurs over millions of years as rain erodes rocks and carries alkaline molecules to the sea. These molecules help balance the ocean’s chemistry and can absorb CO2 from the air. Ebb’s OAE technology extracts alkalinity directly from seawater using bipolar electrodialysis (BPED) technology.

This technique is highly efficient and occurs in a fraction of the time. The company typically follows three steps which are explained in the diagram below:

  1. Ocean deacidification
  2. Permanent CO2 storage
  3. Additional carbon removal

Ebb Carbon

Regarding the deal, Ben Tarbell, CEO of Ebb Carbon, remarked,

“Microsoft is setting a powerful example with its commitment to becoming carbon negative by 2030 and by using its purchasing power to accelerate the most promising climate solutions. This agreement underscores the potential of Ebb Carbon’s technology to contribute meaningfully to gigaton-scale carbon removal in the years ahead.”

Credible media sources revealed that under the agreement, Ebb Carbon will start with an initial delivery of 1,333 tons of CO2 removals. Microsoft will have the option to secure up to an additional 350,000 tons over the next 10 years.

Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft, also highlighted the significant role of the ocean in balancing the carbon cycle and praised Ebb’s OAE technology. He expressed his sentiment by saying,

“Ebb has developed technology to leverage the natural attributes of the ocean—its massive surface area and natural processes that already pull CO2 from the atmosphere—to durably remove and store large volumes of atmospheric carbon. We are pleased to collaborate with Ebb to accelerate the scientific foundation for ocean-based carbon dioxide removal and explore the potential of ocean-based carbon removal solutions at scale.”

Advancing Oceanic Carbon Removal through Partnerships

Significantly, Ebb Carbon runs a 100-ton-per-year ocean carbon removal system at the U.S. Department of Energy’s Pacific Northwest National Laboratory (PNNL) in Sequim, Washington. This project, in partnership with public, private, academic, and philanthropic organizations, aims to advance ocean CDR and promote safe, science-based practices.

The company is also partnering with the National Oceanic and Atmospheric Administration (NOAA) and the University of Washington. They focus on researching various carbon removal models to understand local impacts on carbon and acidification, as well as their effects on marine life such as oysters and eelgrass. Subsequently, they publish their findings to enhance transparency and public understanding.

Leveraging Isometric Protocol for Reliable CO2 Removal

Microsoft and Ebb will use Isometric’s Ocean Alkalinity Enhancement (OAE) protocol to verify carbon removal. Stacy Kauk, P.Eng., Chief Science Officer at Isometric, confirmed this.

She also stated,

“OAE is promising because of the vast surface area of the ocean. This same fact requires careful monitoring, reporting, and verification (MRV). Isometric’s protocol requires measurements and the use of internationally recognized ocean models to quantify carbon removal so buyers and suppliers can be sure one credit equals one tonne of carbon dioxide removed from the atmosphere. This is another step towards creating trust and transparency in carbon markets.”

Notably, Isometric’s OAE protocol is the world’s first protocol for this kind of carbon removal. It outlines how OAE can be carefully monitored, reported, and verified (MRV). This ensures that buyers can confidently purchase OAE carbon credits, knowing they meet high standards.

Microsoft’s Commitment to Carbon Removal Solutions

Apart from reducing direct operational emissions, investing in carbon removal is one of Microsoft’s key sustainability initiatives.

Microsoft’s latest sustainability report revealed that last year the company contracted 5,015,019 metric tons of carbon removal to be retired over the next 15 years.

Microsoft

Source: Microsoft sustainability report

For example, Microsoft recently partnered with UNDO to permanently remove 15,000 tons of CO2 from the atmosphere through enhanced rock weathering. Additionally, Direct Air Capture firm 1PointFive has also teamed up with Microsoft to remove 500,000 metric tons of carbon dioxide from the atmosphere.

In 2023, Scope 1 and 2 emissions decreased by 6.3% from the 2020 baseline. However, indirect emissions (Scope 3) increased by 30.9%, resulting in a 29.1% overall rise in emissions across all scopes since 2020.

Microsoft’s commitment to carbon reduction remains a top priority not only for itself but also for a greener planet at large. This partnership with Ebb Carbon is just another example of utilizing the vast potential of the ocean. No wonder it’s a groundbreaking step in oceanic carbon dioxide removal.

$125 Billion Annual Boost in Nuclear Power Needed to Hit Net Zero, IAEA Says

Jennifer L
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0
$125 Billion Annual Boost in Nuclear Power Needed to Hit Net Zero, IAEA Says

The 2024 edition of the International Atomic Energy Agency’s (IAEA) Climate Change and Nuclear Power report has been released. It emphasizes the need to significantly boost investments in nuclear energy to meet global climate goals. 

The report, launched during the Clean Energy Ministerial (CEM) in Brazil, provides a detailed roadmap for expanding nuclear power and underscores its crucial role in helping countries achieve net-zero emissions by 2050.

How Nuclear Power Could Transform Global Energy 

With climate change and energy security concerns intensifying, countries are increasingly looking toward nuclear power as a viable solution. The report highlights that, to reach net zero emissions by mid-century, a rapid expansion of clean energy technologies is essential. 

The International Energy Agency (IEA) estimates that achieving net zero carbon dioxide (CO₂) emissions by 2050 will demand annual energy sector investments of $4.7–$5 trillion from 2030 to 2050. This represents a significant increase compared to the $2.8 trillion invested in 2023.

The IEA also projects that achieving net zero by 2050 will require more than doubling the installed capacity of nuclear power. This aligns with the IAEA’s high-case scenario, which, while not a direct net zero pathway, shows similar growth. 

In this case, nuclear energy is expected to play a key role, contributing to a diverse and resilient energy mix. According to the IAEA’s high-case scenario, nuclear power capacity needs to increase by 2.5x its current levels by 2050. 

nuclear power capacity additions IAEA projection 2024 to 2050
Source: IAEA Climate Change 2024 Report

This would provide a reliable source of low-carbon energy, complementing other renewable sources like wind and solar.

The IAEA report stresses that nuclear energy can deliver a steady baseload of clean power, which is particularly important as more intermittent renewable sources come online. This stable power generation can help integrate other renewable energies into the grid more effectively. As such, it ensures that energy supplies remain consistent even when wind or solar resources are low. 

Moreover, nuclear power is seen as a critical tool for decarbonizing industrial sectors and supporting advanced energy systems like hydrogen. However, achieving those ambitious nuclear power targets will need substantial investment. 

How Much Investment Nuclear Energy Needs

The IAEA estimates that global investment in nuclear energy needs to increase to $125 billion annually. This is up from the current investment of around $50 billion per year between 2017 and 2023. The funding is necessary to build new reactors, upgrade existing infrastructure, and ensure safe operation. 

Such a shift is deemed essential for meeting the IAEA’s high-case projection for nuclear capacity expansion by 2050.

For a more aspirational goal of tripling nuclear capacity, which over 20 countries pledged to pursue at COP28, annual investment would need to reach upwards of $150 billion. 

nuclear energy annual investment to 2050 comparison under different scenarios
Source: IAEA Climate Change 2024 Report

These funds would support three key actions crucial for achieving nuclear power capacity goals: 

  • the construction of new nuclear power plants, 
  • the development of advanced reactor technologies, and 
  • the deployment of small modular reactors (SMRs). 

SMRs are particularly attractive for emerging markets and developing countries due to their smaller size, lower upfront costs, and potential for use in remote areas.

IAEA Director General Rafael Mariano Grossi highlighted that while nuclear power plants are cost-competitive and affordable over their long operational lifespans, securing the necessary upfront capital remains a challenge. This is especially true in market-driven economies and developing nations, where access to financing can be limited. 

Grossi further noted that:

“The private sector will increasingly need to contribute to financing, but so too will other institutions. The IAEA is engaging multilateral development banks to highlight their potential role in making sure that developing countries have more and better financing options when it comes to investing in nuclear energy.” 

Unlocking Private Sector Financing

The report also explores strategies to unlock private-sector finance, a topic that has gained significant attention worldwide. 

Last month, during New York Climate Week, 14 major financial institutions, including some of the world’s largest banks, expressed their readiness to support nuclear power projects. These institutions recognize the potential of nuclear energy in achieving climate goals and are willing to contribute to financing new-build projects.

The financial community’s growing interest in nuclear energy is partly driven by recent developments in sustainable finance frameworks. The European Union’s (EU) taxonomy for sustainable activities, which includes nuclear power, has opened the door for new funding opportunities. 

  • In 2023, the first green bonds for nuclear projects were issued in Finland and France – a significant milestone in sustainable nuclear financing. 

These developments show a growing recognition that nuclear energy can be a sustainable part of the clean energy transition. By including nuclear power in green finance frameworks, countries can attract more investment to support new projects and refurbish existing reactors.

To bridge the financing gap, the IAEA’s report emphasizes the need for policy reforms and international cooperation. It suggests that countries must develop strong regulatory frameworks and new delivery models to make nuclear projects more attractive to investors. 

Additionally, fostering partnerships between governments, financial institutions, and the private sector is essential for mobilizing the necessary capital.

Addressing the Challenges Ahead

Despite the promising outlook, the IAEA’s 2024 report acknowledges the challenges in expanding nuclear power, including:

  1. the need for skilled labor, 
  2. supply chain development, and 
  3. stakeholder engagement to ensure that new projects are implemented smoothly. 

The report also notes the importance of public acceptance and community engagement in advancing nuclear energy projects. In particular, transparent communication about the safety, environmental benefits, and economic impact of nuclear power is essential to gain public support and overcome misconceptions about nuclear technology.

Ultimately, the report highlights that a successful transition to a global clean energy mix will require unlocking the full potential of nuclear power with the right investments and collaboration. 

Li-FT Power Secures $21 Million Through Strategic Private Placement

Jennifer L
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0
Li-FT Power Secures $21 Million Through Strategic Private Placement

Li-FT Power Ltd. (TSXV: LIFT) has announced a strategic, non-brokered private placement to raise around $21.25 million. The mineral exploration company focuses on the acquisition, exploration, and development of lithium pegmatite projects in Canada. 

Li-FT Power’s flagship project is the Yellowknife Lithium Project (YLP) in the Northwest Territories. Moreover, the company holds 3 early-stage exploration properties in Quebec, and the Cali Project in the Northwest Territories, which is part of the Little Nahanni pegmatite group.

Strategic Investment: A Boost for Canadian Lithium Projects

The lithium company’s newly announced private placement includes:

  • Flow-Through Shares: 2,694,895 shares priced at $5.6575 each.
  • Hard-Dollar Shares: 1,645,000 shares priced at $3.65 each.

This investment will be made by a single purchaser, who already holds 363,918 shares of Li-FT. Upon closing, the purchaser will own a total of 4,703,813 shares, equivalent to a 9.99% stake in the company.

As part of this strategic investment, Li-FT and the purchaser will negotiate an investor rights agreement, including customary terms.

Use of Funds:

  • Proceeds from the hard-dollar shares will support the development of Li-FT’s Canadian projects and general corporate purposes.
  • Funds from the flow-through shares will be allocated to Canadian exploration expenses, specifically for the company’s Northwest Territories projects. These expenditures qualify as flow-through critical-mineral mining expenses under Canadian tax laws, and all such costs will be renounced to subscribers by December 31, 2024.

The transaction is expected to close on or before November 12, 2024, subject to certain conditions. These include the completion of agreements with the purchaser and approval from the TSX Venture Exchange. 

Shares issued will have a hold period of four months and one day, as per Canadian securities regulations. Canaccord Genuity served as a financial advisor to Li-FT in this strategic investment.

Flagship Project and Other Strategic Ventures

In September, Li-FT Power expanded its Cali Project in the Northwest Territories, quadrupling its land position by adding 9,681 hectares. This move follows amendments to the Sahtú Land Use Plan, allowing the company to secure new claims, including spodumene pegmatite deposits that extend the existing Cali dyke swarm. 

The company’s 2023 exploration revealed substantial lithium prospects at Cali. Field visits and surface exploration identified a larger-than-expected dyke system. Out of 163 samples, 124 had lithium grades above 1.0% Li₂O, prompting further drilling plans. 

CEO Francis MacDonald noted that the low-cost acquisition strategy enhances the project’s lithium potential. Moreover, Li-FT terminated its Shorty West claim agreement with Infinity Stone Ventures Corp.

Li-FT is committed to advancing multiple lithium projects in Canada, including the YLP and other early-stage sites in Quebec.

Earlier this month, the lithium company revealed its maiden mineral resource estimate (MRE) for the YLP in the Northwest Territories, Canada. This estimate solidifies the YLP as a significant spodumene resource, ranking it among the top 10 in the Americas and the third-largest hard-rock lithium deposit in Canada. 

Yellowknife lithium project Li-FT Power

The initial MRE reveals 50.4 million tonnes with 1.00% lithium oxide (Li₂O), translating to 1.25 million tonnes of lithium carbonate equivalent (LCE). The estimate covers 8 of the 13 spodumene-bearing dykes on the property. It has the potential for further resource growth as drilling continues. 

The project’s strategic location offers infrastructure advantages, including proximity to highways and railways, enhancing logistics for potential future exports. The company plans a Preliminary Economic Assessment (PEA) by Q2 2025, which will assess the project’s viability. The goal is to establish the Yellowknife Lithium Project as a major player in the North American lithium supply. 

The recent private placement is yet another milestone for Li-FT Power’s growth strategy, enhancing its position in the growing lithium market.

Disclosure: Owners, members, directors, and employees of carboncredits.com have/may have stock or option positions in any of the companies mentioned: LIFT.

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Biden’s IRA Spurs $34 Billion U.S. Solar Boom, But Can It Overcome Industry Risks?

Jennifer L
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0
Biden’s IRA Spurs $34 Billion U.S. Solar Boom, But Can It Overcome Industry Risks?

The U.S. solar industry has seen a rapid expansion since President Joe Biden signed the Inflation Reduction Act (IRA) in August 2022. The act has been instrumental in increasing domestic solar panel production capacity more than fivefold. This is a crucial step in Biden’s goal of building clean energy supply chains within the country. 

Globally, the International Energy Agency (IEA) recently published its World Energy Outlook 2024 which shows that solar power generation could increase fourfold by 2030. The report suggests that solar energy could be a leading source of electricity by 2033, surpassing nuclear, wind, hydro, and natural gas. It could eventually even overtake coal, positioning itself as the largest electricity source globally. 

IRA Fuels Solar Investments but Leaves Gaps

Renewable energy is set to significantly outpace electricity demand growth, per IEA data. In one scenario renewable output is expected to expand by nearly 2,200 TWh by 2035, more than tripling its 2023 level. This increase will boost renewables’ share of electricity generation from 22% to 58%, with solar PV seeing the largest growth. 

solar PV capacity by 2035 IEA

Key factors of this growth include high-quality renewable resources, established markets with low technology costs, and strong federal and state policy support. 

The IRA is a cornerstone of Biden’s clean energy policy. It offers up to $1.2 trillion in tax incentives over 10 years. These incentives aim to boost the production and deployment of clean energy technologies. 

One of the IRA’s key elements is the advanced manufacturing tax credit, which has led to over a dozen new or expanded solar module manufacturing plants across the U.S. 

  • Since the IRA’s passage, solar companies have invested over $34 billion in building new factories.

According to federal data, the U.S. now boasts over 45 gigawatts (GWdc) of solar module manufacturing capacity. At maximum production, these facilities could meet most of the U.S. solar demand expected by 2025 as reported by S&P Global Commodity Insights.

US PV manufacturing capacity

However, the solar industry’s expansion has not been uniform. The bulk of investments has gone into the assembly of modules, trackers, inverters, and other downstream components. In contrast, there’s a lack of domestic production for crystalline-silicon ingots, wafers, and cells—key components of the solar supply chain. 

Navigating Market Risks and Government Support

Industry leaders see these gaps as a significant hurdle to achieving a fully self-reliant solar industry.

Ray Long, the president and CEO of the American Council on Renewable Energy, describes this surge as a “clean energy manufacturing renaissance.” Despite the positive momentum, Long emphasizes that the rapid growth of solar manufacturing in the U.S. comes with challenges.

For instance, the potential threat from cheaper Asian imports is one challenge. Some U.S. manufacturers seek more federal support to level the playing field, believing that additional measures are necessary to ensure their success. 

Moreover, the outcome of the upcoming presidential election could significantly shape future policies. While both political camps support bringing manufacturing back to the U.S., their strategies differ. 

Donald Trump, for example, advocates for broader tariffs on imports, which could raise costs for consumers. Kamala Harris, on the other hand, criticizes such tariffs as a “sales tax” on American buyers.

Experts believe that consistent support from the federal government is crucial to sustain the growth of domestic solar production. 

Notably, the U.S. Treasury Department is working to enhance support for the solar industry. It recently clarified that solar ingot and wafer manufacturing facilities qualify for a 25% investment tax credit under the 2022 CHIPS and Science Act. 

Solar Industry Moves Forward Despite Challenges

Industry leaders are divided on the future direction of U.S. solar manufacturing. Some are optimistic about the role of government support in boosting domestic production.

Steven Zhu, president of Trina Solar (U.S.) Inc., emphasized the importance of diversifying manufacturing locations, including expanding into the U.S., to manage risks from policy changes. Trina Solar is set to open a 5-GW solar module facility in Texas, with plans to expand production in 2025.

Yet, others are skeptical about the sustainability of new U.S. solar plants. T.J. Rodgers, CEO of residential solar company Complete Solar and former chairman of SunPower, argues that most of the new solar factories in the U.S. are unlikely to be profitable without continuous government subsidies. He believes the reliance on taxpayer support to maintain operations could become a long-term challenge for the industry.

These varying perspectives reveal the uncertainty surrounding the U.S. solar manufacturing industry, especially with the presidential election approaching. While both parties agree on the importance of reducing reliance on Chinese solar components, their differing approaches could significantly impact the industry’s trajectory.

Worldwide, the IEA forecast shows that solar and wind energy could transform the global power landscape, potentially contributing nearly 60% of global electricity by 2050. The agency further projects that solar power alone could see a massive expansion. It can go beyond 16,000 gigawatts (GW) by 2050, compared to today’s levels.

In the U.S., renewable energy sources are on track to grow much faster than the electricity demand. Under one scenario, STEPS (Stated Policies), solar power will see the most significant growth. Together with wind energy, together they could provide 50% of electricity by 2035, up from 15% in 2023.  

US electricity demand growth and changes

Ultimately, the U.S. solar manufacturing sector is in a period of rapid growth, driven by strong demand for renewable energy and significant federal incentives. As solar companies push forward with ambitious expansion plans, their success will depend on continued government support and favorable market conditions. 

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