California’s Carbon Auction Raises $950M, But Market Uncertainty Looms

Jennifer L
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California’s Carbon Auction Raises $950M, But Market Uncertainty Looms

The recent carbon credits auction in California raised significant funds for climate action, showing the state’s commitment to reducing greenhouse gas emissions. The auction proceeds will be reinvested into programs aimed at curbing climate change, including initiatives for disadvantaged communities.

California Carbon Credits Are Selling Out, But at What Cost? 

The Western Climate Initiative (WCI) has released the results of its latest cap-and-trade auction, highlighting a mix of achievements and emerging concerns. For the 16th consecutive time, the auction sold out, reflecting continued strong demand for allowances. 

California carbon credit auction August 2024
Data from California Air Resources Board (CARB) website

However, the decline in settlement prices, particularly when compared to previous auctions, has sparked discussions about the future of California’s cap-and-trade program, with potential implications for the broader market.

Auction Details:

  • Current Vintage Allowances: The auction sold all 51,179,715 current vintage allowances. However, the settlement price of $30.24 was significantly lower than the $37.02 seen in May. This drop, while the auction still sold out, indicates that market participants might be cautious about future developments.
  • Future Vintage Allowances: Similarly, all 7,211,000 future vintage allowances were purchased, settling at $29.75, a decline from $38.35 in May. These allowances, which can be used for compliance starting in 2027, also reflect market uncertainty about the program’s long-term prospects.

California carbon credit price model

Market Jitters Highlight Growing Concerns Over California’s Climate Program

The decline in CCA carbon prices suggests that there is growing uncertainty within the market regarding the design and future of California’s cap-and-trade program. The California Air Resources Board (CARB) is expected to play a crucial role in addressing these concerns through upcoming rulemaking processes. 

The market appears to be particularly uncertain about how and when CARB will tighten the program before 2030. Clarity from CARB is urgently needed to ensure that the program continues to function effectively and to provide the necessary confidence to market participants.

Beyond 2030, the uncertainty is even more pronounced. The cap-and-trade program is a key component of California’s strategy to reduce greenhouse gas emissions. Hence, its long-term viability is essential for meeting the state’s ambitious climate goals. 

The CCA auction results, though showing a decline in settlement prices, did not come as a major surprise to many compliance firms. These firms have strategically leveraged the lower futures prices to position themselves for their compliance obligations as the new three-year cycle begins. This strategic positioning may reduce the urgency to purchase carbon credits or allowances immediately, contributing to the softer auction results.

The outlook for California Carbon Allowances remains optimistic in the long term, despite the recent softness in auction prices. There is an expectation that the market for CCAs will stabilize over the next six months and potentially trend higher. This anticipated stabilization mirrors the recent performance of the European carbon market, which saw a significant rebound—over 30%—following February’s lows. 

Lessons from Across the Pond

The European market recovered as initial fears related to the Ukraine gas supply crisis and policy uncertainty began to ease, allowing the fundamental drivers of the cap-and-trade program to regain influence.

In the EU, Emissions Trading System (ETS) is witnessing a stabilization in European Union Allowance (EUA) prices after a volatile period driven by fluctuations in natural gas prices. Currently, prices are supported at around €72.00, higher than the year-to-date average of €66.59. 

Rising gas prices have made coal-fired power generation more competitive, particularly in Germany, leading to increased demand for EUAs from the power sector. As Europe approaches winter, the uncertainty surrounding natural gas supply, especially with the expiration of Ukraine’s gas contract, underscores the need for a steady flow of LNG to meet energy demands. 

Meanwhile, industrial demand for carbon remains weak, keeping the focus on the power sector as a key driver for EUA demand.

Funds for the Future: Auction Yields $950M for Climate Projects

Despite the market’s concerns, the CCA auction is expected to generate around $950 million for California’s Greenhouse Gas Reduction Fund (GGRF). This fund is instrumental in supporting projects aimed at reducing greenhouse gas emissions and strengthening climate resilience across the state. 

California emissions and projected reduction goals

Over the past decade, investments from the GGRF have been credited with cutting emissions by 109.2 million metric tons—the equivalent of removing more than 25 million cars from the road. The fund has supported a wide range of projects, including affordable housing near job centers and zero-emissions transportation options.

The outcome of CCA’s auction underscores the importance of CARB’s upcoming rulemaking. To maximize emission reductions, CARB could consider removing at least 265 million allowances from future auctions, per the Environmental Defense Fund recommendation. Doing so would tighten the supply, increase carbon credit prices, and incentivize covered facilities to invest in emission-reducing technologies.

The auction results also highlight the need for a long-term strategy that ensures the durability of California’s cap-and-trade program, providing the necessary market confidence to drive significant investments in decarbonization.

Ultimately, the success of California’s cap-and-trade program will depend on its ability to reduce greenhouse gas emissions effectively. The recent auction results serve as a reminder of the importance of clear, decisive action from both regulators and legislators to secure the program’s future and to meet the state’s climate goals.

Top 3 US Renewable Energy Deals Q2-2024: Trends and Analysis

Saptakee S
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Top 3 US Renewable Energy Deals Q2-2024: Trends and Analysis

According to The Energy Information Administration (EIA), “the US expects renewable energy to grow by 17% to 42 GW in 2024 and make for a quarter of electricity generation.”

In Q2 2024, the renewable energy sector continued to experience significant investment activity, although it showed mixed results in terms of growth compared to previous quarters. The sector secured $1.3 billion in equity funding, reflecting a slight increase from Q1 2024, which saw $1.2 billion. However, this amount is lower compared to some previous quarters in 2022 and 2023, indicating a potential cooling in the pace of investments.

The overall trend in equity funding has seen fluctuations, with peaks in late 2021 and early 2022 when the sector experienced robust investment interest. The Q2 2024 funding level, while steady, is a reminder of the cyclical nature of investment in the sector.

renewable energy

Renewable Energy Deal Activity 

In the renewable energy sector, the average deal size has seen fluctuations over recent years, with a peak at $38.4 million in 2020, followed by a decline to $31.2 million in 2022. It further dipped to $23.3 million in 2024 year-to-date (YTD). Meanwhile, the median deal size has remained more stable, with figures showing $6.5 million in 2020, a slight drop to $5.0 million in 2022, and rebounding to $5.3 million in 2024 YTD. This data highlights a trend of mixed deal sizes ranging from both bigger and smaller deals in the industry over time.

Number of Deals: In Q2 2024, there were 82 deals, a slight decrease from Q1 2024’s 107 deals. This reduction in deal volume suggests a more cautious approach by investors, possibly due to broader economic conditions or market saturation in certain segments of renewable energy.

While the renewable energy sector remains a key focus for investors, Q2 2024 saw moderate investment levels compared to some previous quarters. The sector’s performance may be influenced by external economic factors and shifts in investor strategies.

RENEWABLE ENERGY

By Global Region

Analyzing the funding on basis of global region, US is the top player having 41% in renewable shares, followed by Europe and Asia. Other regions, including Canada and all other regions, have remained relatively small contributors, with Canada fluctuating around 4% and other regions around 4-8%.

Renewable Energy

According to CB Insights, Who Leads the Pack?

1. MN8 Secures $325 Million for Expansion

MN8, one of the U.S.’s largest independent renewable energy companies, closed its first private placement, raising $325 million in April. The funds will support the Company’s expansion and growth plans.

This $325 million investment includes $200 million from Mercuria Energy Group and $125 million from Ridgewood Infrastructure, a top U.S. infrastructure investor. Stockholders will have the option to convert their preferred stock into common stock in the future.

The news release also revealed that, as part of the deal, Mercuria will gain one board seat and an observer seat on MN8’s board, while Ridgewood will receive an observer seat. The partnership will focus on discovering commercial opportunities to promote more sustainable, affordable, and reliable energy systems. It will merge MN8’s renewable energy expertise with Mercuria’s deep knowledge of energy markets.

In May, First Solar, Inc. the. U.S. solar technology firm announced that MN8 Energy LLC has ordered 457 megawatts (MW) of advanced thin film solar modules. This order includes 170 MW of Series 6 Plus bifacial modules and 287 MW of Series 7 modules. The solar modules will be used to power projects across the northeastern and southern United States.

MN8’s 3.2 (GW) portfolio provides renewable energy solutions to over 40 corporations, 70 government entities, and 20 utilities. In the last 12 months, MN8 Energy had revenue of $326.69 million and earned $191.84 million in profits.

2. Tree Energy Solutions (TES) Raises $152 Million to Power Green Energy Projects

Tree Energy Solutions (TES), a global leader in green energy, concluded its third, series C fundraising round, securing $152 million on April 4. The funds will fuel the development of TES’s global green energy projects, with a focus on e-NG (electric natural gas derived from green hydrogen). This round attracted top investors, including Azimut Group, Fortescue, E.ON, HSBC, O.G. Energy, and Zhero.

TES produces e-NG by combining green hydrogen with biogenic or recycled CO2, creating a green alternative to natural gas that uses existing infrastructure for transport and storage. The company has partnered with major energy firms like TotalEnergies, Osaka Gas, and ADNOC to build large-scale e-NG projects across North America, the Middle East, Australia, and Europe.

Additionally, TES is developing a green energy hub in Wilhelmshaven, Germany. This hub aims to decarbonize the German and neighboring energy markets by importing natural gas and e-NG, exporting CO2, and producing green hydrogen and power.

3. Newcleo’s Strategic Shift: Raising Funds and Expanding in Europe

Newcleo, a British nuclear startup, although new has made an impact in this space. The company recently raised around $528 million across three funding rounds, with the latest being a Series B round that secured $94 million in May 2024. They aim to tap into European Union resources by relocating their holding company from the UK to France. This move is part of their broader strategy to expand their operations within the EU.

While Newcleo shifts its focus to France, it still has big plans for the UK. The company intends to invest in and develop next-generation Small Modular Reactors (SMRs) to contribute to the UK’s electricity grid. However, their UK ambitions faced a setback when the government denied private companies access to the Sellafield site, leading Newcleo to shelve a planned project there. Despite this, Newcleo’s collaboration with France’s CEA to develop a lead-cooled fast reactor marks a significant step in their European expansion.

Here’s the complete list:

renewable energy

From this trend and analysis, it’s clear that 2024 has showcased substantial investment potential for renewable energy leaders. The significant funding, particularly in Asia and the U.S. highlights the demand and opportunity in the renewables. Media reports say, solar remains at the top while nuclear gaining a high momentum in the future.

Disclaimer: Data source CBInsights report

AI’s Hidden Carbon Footprint: How Tech Giants Are Masking Their Emissions

Jennifer L
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0
AI’s Hidden Carbon Footprint: How Tech Giants Are Masking Their Emissions

Tech companies are increasingly adopting artificial intelligence (AI) technologies, but this surge in AI comes at a significant environmental cost, especially carbon footprint, that many of these companies are obscuring, according to a Bloomberg Green analysis. Major players like Amazon, Microsoft, and Meta are using unbundled renewable energy certificates (RECs) to make their operations appear greener than they actually are. 

Smokescreen RECs? How They Distort Big Tech’s Green Claims

Earlier this month, the Integrity Council for the Voluntary Carbon Market (ICVCM) announced that carbon credits issued under existing renewable energy methodologies will no longer qualify for its Core Carbon Principles designation. This ruling impacts about 32% of the voluntary carbon market, translating to about 236 million carbon credits. 

The ICVCM’s decision reflects a shift in focus towards more stringent standards to ensure that carbon credits represent real, additional, and verifiable emission reductions. This move is expected to influence the market significantly, particularly for projects relying on existing renewable energy methodologies.

Per Bloomberg analysis, RECs allow companies to claim that their energy consumption is more environmentally friendly, even if they are still relying on fossil fuels. This practice significantly distorts the true carbon footprint of these tech giants.

Microsoft, for instance, reported that its carbon emissions have increased by 30% since 2020, despite the company’s goal to become carbon negative. Microsoft and other tech firms have attributed this rise in emissions to the carbon-intensive materials used in building data centers, such as cement, steel, and microchips. 

They claim that the energy required for AI is largely sourced from zero-carbon resources like wind and solar power. However, experts argue that these claims are misleading and do not reflect the reality of energy consumption. Some said that there is no physical basis for the claim that AI is powered entirely by clean energy.

The Carbon Accounting Crisis

In 2022, Amazon, Microsoft, and Meta relied heavily on these unbundled RECs to report lower emissions. That is despite the fact that these carbon credits do not result in actual reductions in atmospheric greenhouse gasses.

The use of unbundled RECs is permitted under current carbon accounting rules, but many experts believe these rules are outdated and do not accurately reflect real-world emissions. If companies like Amazon and Microsoft did not use these carbon credits, their reported emissions would be significantly higher.

renewable energy carbon credits RECs of tech companies
Chart from Bloomberg Green

Take this example: Amazon’s 2022 emissions would be 8.5 million metric tons higher than reported, which is three times what the company disclosed. Similarly, Microsoft’s emissions would be 3.3 million tons higher, and Meta’s reported footprint could increase by 740,000 tons.

Some tech companies have recognized the flaws in using unbundled RECs and have moved away from them. Google, for instance, phased out its use of these credits several years ago after acknowledging that they do not lead to real emissions reductions. Instead, Google focuses on purchasing clean energy directly and aims to achieve carbon-free energy consumption on an hourly and location-specific basis.

Amazon, on the other hand, relied on unbundled RECs for 52% of its renewable energy in 2022. This makes the tech giant the most dependent on these instruments among the major tech companies. The company has stated that it plans to reduce its reliance on unbundled RECs as more of its directly contracted renewable energy projects come online. 

Meta, which used unbundled RECs for 18% of its renewable energy in 2022, claims that the majority of its renewable energy efforts are focused on projects that would not have been built otherwise.

Microsoft has also announced plans to phase out the use of unbundled RECs in the future. 

AI vs. Climate Goals

Microsoft’s ambitious goal to become carbon negative by 2030 faces significant challenges as its push for AI has led to a 30% increase in carbon emissions since 2020. The company’s president, Brad Smith, acknowledges the difficulty in meeting these targets, especially with the explosive growth of AI, which requires energy-intensive data centers built with carbon-heavy materials like steel and concrete. Despite this, Smith believes that AI’s benefits will outweigh its environmental costs.

Microsoft’s AI expansion is driving up electricity consumption, with the company’s energy use rivaling that of small European countries. The tech giant plans to spend over $50 billion on expanding its data centers in the coming year, further increasing its carbon footprint. While Microsoft claims to be 100% powered by renewables, this is achieved largely through the purchase of RECs.

Carbon intensive AI tech giants
Chart from Bloomberg Green

Microsoft’s leadership is aware that meeting its climate goals will require significant investment and innovation. If emissions remain high, the company may resort to purchasing carbon removal credits, though this is not seen as the preferred solution. Brad Smith remains optimistic, emphasizing that climate change is a solvable problem, but it will require sustained effort and investment.

The Global Impact of Big Tech’s Reliance on RECs

Tech companies are the largest buyers of unbundled RECs globally, and their continued use of these carbon credits could have far-reaching implications as more corporations seek to reduce their carbon footprints. The current accounting rules, established under the Greenhouse Gas Protocol, allow companies to use unbundled RECs to report lower emissions. However, these standards are due for an update, and experts are working to propose changes that better reflect actual emissions.

Thus, while tech companies are making bold claims about their efforts to power AI with clean energy, the reality is more complex. The use of unbundled RECs allows the tech giants to obscure the true environmental impact of their operations. This, in turn, raises questions about the effectiveness of current carbon accounting practices and the need for greater transparency in corporate climate reporting.

Canada’s Cobalt Cache: Pentagon Invests US$20 Million on Electra Battery Materials

Saptakee S
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0
Canada’s Cobalt Cache: Pentagon Invests US$20 Million on Electra Battery Materials

The U.S. military is ramping up its investment in Canadian mining with a significant new grant. On Tuesday, the Pentagon announced a $20 million U.S. grant to Electra Battery Materials Corporation to set up the cobalt refinery in Temiskaming Shores, Ontario.

Unlocking Pentagon’s Funding Push for Electra Battery Materials

Electra Battery Materials has secured the investment from the U.S. Department of Defense (DoD) under Title III of the Defense Production Act, notes the press release. 

The award uses funds from the Ukraine Supplemental Appropriations Act of 2022. It supports the 2024 National Defense Industrial Strategy goal to boost domestic production of key minerals. Over the top, in June, the Canadian government also gave Electra USD 3.6M to advance a battery materials recycling project at the same refinery.

However, this grant is part of a broader initiative launched during President Joe Biden’s 2022 visit to Ottawa. Notably, the current one is the largest of several U.S. grants for securing critical mineral supplies in Canada. The DoD further added that the Ontario Cobalt Refinery’s construction will help Electra launch North America’s first cobalt sulfate hydrometallurgical plant.

Subsequently, this plant will produce cobalt sulfate which is a crucial component for lithium-ion batteries. These large batteries will consequently, support both defense projects and the growing EV supply chain in the U.S. and Canada.

Electra’s Groundbreaking Cobalt Facility

The project features a hydrometallurgical facility with a proven track record. Notably, it is the only one in North America providing cobalt sulfate for EVs. Its modular design allows it to expand as the EV market grows. Additionally, the site is fully permitted and ready for future expansion. It also boasts 51% lesser greenhouse gas emissions compared to Chinese facilities, thanks to its hydroelectric power source. Ultimately, at full capacity, it could produce enough cobalt sulfate for over 1 million EVs annually.

The company also manages its emissions effectively, we can estimate this in the table acquired from its sustainability report.

Electra Battery Materials cobalt

source: Electra Battery Metals

What’s Driving this Cobalt Investment?

Media pundits have analyzed the investment from a different angle. They have explained that these investments reflect the growing concerns about reliance on China for essential minerals needed for EVs, electronics, and most importantly weapons systems.

Furthermore, with tensions over Taiwan, the U.S. seeks to diversify its supply chain and enhance its national security.

Canada Cobalt

The first two grants earlier this year targeted copper, gold, graphite, and cobalt projects in Quebec and the Northwest Territories, totaling under $15 million. These earlier grants had no repayment obligations or commitments to sell minerals exclusively to the U.S. military. However, in times of crisis, Canadian law allows Ottawa to prioritize raw material sales to NATO allies.

Dr. Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy, said,

“This award will develop North American production of a key precursor material for large capacity batteries, helping to create a more robust industrial base capable of meeting growing demand across both the defense and commercial sectors.”

Canada’s Critical-Mineral Wealth

Global demand for critical minerals is set to rise sharply. IEA predicts a 6X increase in the energy sector’s needs by 2040. Notably, the North American zero-emission vehicle market alone has the potential to hit $174 billion by 2030, as reported by Cananda’s Critical Mineral Strategy. Moreover, Canada is a key player in cobalt, graphite, lithium, and nickel—essential for future batteries and electric vehicles.

Canada Cobalt

Therefore, investing in these minerals is crucial for a green energy transition in Canada and worldwide. This investment builds a sustainable industrial base, supporting emission-reducing supply chains and climate change solutions for future generations.

A Clean Energy Canada report suggests that a Canadian battery supply chain could contribute $5.7 billion to $24 billion to GDP by 2030.

Jonathan Wilkinson, Minister of Energy and Natural Resources Canada has given a long statement in the press release. He remarked,

“From mining responsibly sourced critical minerals, to processing them here in North America, to building batteries for electric vehicles and other key technologies, and eventually to recycling them, there is enormous opportunity for both Canada and the United States from both an economic and a security perspective. Through our continued work with the United States, driven by the Energy Transformation Task Force and the Joint Action Plan on Critical Minerals Collaboration, and other allies, we are developing secure critical minerals value chains that will create good jobs in places like Temiskaming, Ontario and beyond, and will power prosperous economies and a future that works for everyone.”

Overall, the US DoD’s investment would give a significant boost to cobalt production in Canada. With Electra Battery Materials as partner, we expect impressive results in the coming years.

India and Japan Strike a Green Ammonia Offtake Deal

Saptakee S
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0
India and Japan Strike a Green Ammonia Offtake Deal

The Ministry of New & Renewable Energy (MNRE) announced that India and Japan have signed a major offtake agreement for green ammonia exports. The deal, finalized on August 21, 2024, marks India’s first green ammonia export to Japan. This agreement bolsters India’s growing role in the global green energy market and the significance of long-term partnerships in sustainable energy.

The Key Players in This Agreement

The press release mentions, Sembcorp Industries, Sojitz Corporation, Kyushu Electric Power Co., and NYK Line signed a Heads of Terms (HoT) agreement, establishing a cross-border green ammonia supply partnership from India to Japan.

The Singapore-based energy company Sembcorp Industries will spearhead the production of green ammonia in India. Notably, the green ammonia will be produced using renewable energy sources, making it a cleaner alternative to conventional fuels.

Kyushu Electric Power, a renowned Japanese utility company, plans to use green ammonia in its energy mix. The company will partially replace coal with green ammonia at its thermal power plants, aiming to cut carbon emissions. Simply put Kyushu is the off-taker.  This step supports Japan’s larger goal of moving away from fossil fuels and adopting cleaner energy sources.

Sojitz Corporation, the Japanese trading company will mediate the business, playing a significant role in connecting Sembcorp with Kyushu. Sojitz’s involvement ensures that the transaction runs smoothly and efficiently, bridging the gap between production and consumption.

Japanese shipping firm, Nippon Yusen Kaisha (NYK), will handle the transportation of green ammonia from India to Japan. It will ensure the safe and timely delivery of the green ammonia, establishing a reliable supply chain between the two countries.

What Are the Broader Implications of This Deal?

Minister of New & Renewable Energy, Pralhad Joshi commented,

“Today is a historic day as we mark the first-ever agreement for the supply of Green Ammonia from India to Japan. This agreement will help establish a robust supply chain from production in India to consumption in Japan, paving the way for future collaborations in the green energy sector.”

He further disclosed India has already launched a tender for 7.5 lakh tons of green ammonia and a surplus of 4.5 lakh TPA capacity has also been floated.

Mr. Joshi also remarked that these efforts align with India’s larger plan to incentivize the production of over a million tons of green hydrogen annually. It showcases India’s commitment and ability to rapidly expand green energy production.

The Indian government, under the Ministry of New & Renewable Energy (MNRE), has been actively promoting green hydrogen and ammonia. It is quintessential of its broader strategy to reduce carbon emissions and achieve energy independence.

Last year in January, the Union Cabinet approved the National Green Hydrogen Mission with a budget of ₹19,744 crore. The mission aims to establish India as a global leader in the production, use, and export of Green Hydrogen and its derivatives. By 2030, the goal is to produce 5 million metric tons (MMT) of Green Hydrogen annually. As part of the mission, ₹600 crore has been allocated for 2024-25 under various categories. This is a clear testament to India’s commitment to achieving its net-zero goals.

Teaming Up for Green Ammonia Success

This agreement between India and Japan is expected to pave the way for future collaborations in the green energy sector. Both nations are committed to reducing their carbon footprints and transitioning to more sustainable energy sources. By working together, they can leverage each other’s strengths and expertise, creating a robust supply chain for green ammonia.

As India continues to expand its green energy capabilities, more such agreements are likely to follow. It would only bolster its position in the global market. Japan, on the other hand, will benefit from a reliable and sustainable source of green ammonia. This would help Japan mitigate carbon emissions, and reduce its dependence on fossil fuels.

ACME has built India’s first green hydrogen and ammonia plant, marking a significant milestone. They have operated a solar-to-ammonia pilot plant in Bikaner, Rajasthan, since November 2021. The projects in development target both the Indian market and the global ammonia energy market. By 2030, ACME aims to rank among the world’s top three renewable energy producers and produce 10 MTs of renewable ammonia annually from its global plants.

In conclusion, the India-Japan Green Ammonia Agreement is a significant step forward for both countries. Overall, this partnership highlights a shared commitment to sustainability and lays a strong foundation for future collaboration in the fast-growing green energy sector.

The Top 4 Venture Capital Climate Companies: How Are They Shaping the Green Future?

Jennifer L
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0
The Top 4 Venture Capital Climate Companies: How Are They Shaping the Green Future?

As climate change accelerates, venture capital climate companies are stepping up, directing billions into technologies that promise a sustainable future. However, climate tech funding experienced a significant decline in the second quarter of 2024, reaching its lowest quarterly level since Q2 2020, according to CB Insights report.

Funding dropped by 20% quarter-over-quarter (QoQ) to $4.9 billion, continuing a downward trend in the sector. Despite the decline, the number of deals saw a slight rebound, with 397 deals closed in Q2 2024, although this figure remained well below the quarterly totals observed in 2023.

Investors in climate tech are increasingly cautious, favoring smaller mid- and late-stage deals. However, they continue to seek opportunities in the early stages of funding, where strong prospects exist.

climate tech quarterly equity funding and deals

Notably, Q2 2024 marked the second consecutive quarter without any new unicorns (private companies reaching valuations of $1 billion or more) in the climate tech space. This absence of new unicorns coincides with the decline in late-stage deal sizes, further emphasizing the current caution among investors. 

The overall decline in climate tech funding and the shift towards smaller deals reflect broader trends in the market, where investors are becoming more selective and cautious in their approach. Venture capital (VC) remains the largest group (25%) investing in the industry quarterly since 2020. 

percent quarterly deals by investor group

Here are the top four venture capital climate companies according to the CB Insights Report, which are worth noting in boosting green technologies that help in the fight against climate change.

SOSV: The Accelerator Driving Deep Tech and Planetary Health

Location: United States

SOSV is a global venture capital firm known for investing in early-stage deep tech startups with a focus on human and planetary health. Founded in 1995 by Sean O’Sullivan, SOSV has grown its assets under management to over $1.5 billion, supporting more than 500 startups worldwide. The firm operates several accelerator programs, including IndieBio and HAX, which provide startups with access to laboratories, office spaces, and mentorship.

Through these programs, SOSV has backed over 1,000 startups across various sectors, including health, food, and sustainability.

SOSV is deeply committed to environmental sustainability. The firm has made significant strides in supporting companies that are working to reduce carbon emissions and address climate change. For instance, it has invested in companies developing alternative proteins, carbon capture technologies, and other solutions aimed at reducing the carbon footprint of industries. SOSV’s portfolio companies have collectively raised billions in follow-on funding, and several have achieved unicorn status.

SOSV climate tech 100 map
Image from Medium.com

The VC firm created the “Climate Tech 100”, which highlights top climate-focused startups from SOSV’s portfolio. The 2024 edition features 30 new companies, with an aggregate valuation of $11.1 billion and $3.68 billion raised in total, including $151 million from SOSV itself.

SOSV 2024 Climate Tech 100 Portfolio

SOSV climate tech 100 portfolio

SOSV’s commitment and leadership in climate tech investment have been recognized by PitchBook, which ranks SOSV as the most active investor in climate tech, agtech, and carbon emissions technology since 2018.

Sean O’Sullivan, the Managing General Partner of SOSV, emphasizes that despite the recent downturn in climate tech funding, the sector is poised for a resurgence driven by critical global needs and favorable trends in industrial sustainability and reshoring U.S. production capabilities.

The investor is also increasingly focusing on critical minerals, recognizing their essential role in the renewable energy transition. The firm invests across the entire critical minerals value chain, from exploration to extraction and processing. These minerals are vital for the production of batteries, electric vehicles, and other clean energy technologies, making their sustainable sourcing a key priority for SOSV.

Global Brain: Fostering Global Innovation for a Greener Tomorrow

Location: Japan

Global Brain is a leading venture capital firm with a mission to foster innovation by investing in startups worldwide since 1998. With over $1.9 billion in assets under management, Global Brain has backed more than 1,000 startups, covering industries such as technology, sustainability, and critical minerals. 

The firm is particularly focused on supporting the transition to renewable energy, investing in companies that work on eco-friendly technologies and the sustainable sourcing of critical minerals essential for the clean energy sector.

Global Brain Climate Tech Portfolio Companies

Global Brain climate tech portfolio companies

Global Brain operates globally, with a presence in key innovation hubs like Tokyo, Silicon Valley, and London. The firm collaborates closely with large corporations through its corporate partnership programs, facilitating open innovation and helping startups scale more effectively. This collaboration has enabled Global Brain to drive advancements in critical industries, including the sourcing and processing of critical minerals crucial for renewable energy technologies such as batteries and electric vehicles.

The firm’s notable investments include companies Orbital Marine Power, known for its pioneering tidal energy technology that promises to generate clean, renewable energy from ocean currents.

Global Brain has also played a significant role in expanding its portfolio internationally. The firm’s global reach includes investments in high-growth markets such as the U.S., Europe, and Southeast Asia, contributing to its robust track record of successful exits and partnerships.

Global Brain investment by region
Global Brain investment by region

Global Brain is actively involved in supporting technologies that contribute to sustainability and carbon footprint reduction. The firm invests in startups that focus on renewable energy, energy efficiency, and environmental conservation. For example, their investment in TerraCycle, a company dedicated to recycling hard-to-recycle waste, reflects their commitment to tackling environmental challenges and promoting a circular economy.

Lowercarbon Capital: Fast-Tracking the Low-Carbon Revolution

Location: United States

Lowercarbon Capital is a prominent venture capital firm dedicated to accelerating the transition to a low-carbon economy. Founded by Chris Sacca and his team, the firm focuses on investing in innovative technologies and business models that address the climate crisis and reduce global carbon emissions.

Their portfolio includes startups pioneering innovations like zero-carbon cement, methane reduction in computing, fully electric planes, and advanced carbon removal technologies. Lowercarbon Capital is committed to supporting scalable solutions that can significantly reverse climate change while also delivering strong financial returns. This top VC company focuses on these three main areas:

Lowercarbon Capital three areas of investment focus

Since its inception, Lowercarbon Capital has raised over $1 billion to invest in breakthrough climate technologies. The firm’s portfolio includes pioneering companies in sectors such as carbon capture, renewable energy, and sustainable agriculture. Notable investments include companies like Charm Industrial, which is developing direct air capture and bioenergy with carbon capture and storage (BECCS) technologies with the potential to sequester millions of tons of CO2 annually.

Another key investment is in Nori, a platform focused on carbon removal through regenerative agriculture, aiming to sequester 10 million tons of CO2 per year.

Lowercarbon Capital’s strategic approach includes both early-stage and growth-stage investments. The firm’s support has been instrumental in scaling technologies that have the potential to achieve significant emissions reductions. For instance, Lowercarbon Capital has helped fund innovations that could potentially reduce global carbon emissions by up to 5% over the next decade.

The firm’s investment strategy is centered on high-impact climate solutions with a focus on scalability and effectiveness. Lowercarbon Capital targets technologies with the potential to cut carbon emissions across various industries, including energy, transportation, and agriculture. Their portfolio features technologies that aim to reduce carbon footprints by capturing and storing CO2, enhancing renewable energy integration, and promoting sustainable practices, which are crucial for achieving net-zero goals.

Breakthrough Energy Ventures: Billion-Dollar Bets on Net-Zero Technologies

Location: United States

Breakthrough Energy, founded by Bill Gates and a coalition of influential investors, is at the forefront of advancing technologies aimed at reducing global carbon emissions. The firm is dedicated to funding and scaling innovations that drive sustainable development and address climate change.

Breakthrough Energy Ventures (BEV), the firm’s investment arm, has invested over $2 billion in more than 60 high-impact startups. BEV has committed over $3.5 billion in capital to support more than 110 innovative companies, spanning from seed to growth stages.

Key investments include QuantumScape, which has developed a solid-state battery with the potential to increase energy density by 50% compared to conventional lithium-ion batteries, and Twelve, a company turning CO2 into valuable chemicals with a goal to reduce emissions by up to 50 million tons annually.

BEV’s investment strategy is guided by its focus on the Grand Challenges, which aim to:

  1. Develop Scalable Climate Solutions,
  2. Attract Additional Investment, and
  3. Address Critical Gaps in Climate Technology.

Breakthrough Energy Catalyst, another arm of the organization, supports large-scale projects with an investment goal of $15 billion to accelerate the commercialization of clean technologies. Catalyst projects include direct air capture systems and advanced hydrogen electrolyzers, with the potential to remove up to 1 billion tons of CO2 from the atmosphere annually by 2030.


Breakthrough Energy’s portfolio emphasizes substantial carbon footprint reduction. Investments target areas with significant impact potential, such as energy storage and low-carbon fuels. Through strategic partnerships and collaborative efforts, Breakthrough Energy is driving systemic change and working towards a net-zero future.

Climate tech funding experienced a downturn in Q2 2024, with investor caution leading to fewer large deals and no new unicorns. Despite the decline, early-stage opportunities remain promising.

Top venture capital climate companies like SOSV, Global Brain, Lowercarbon Capital, and Breakthrough Energy Ventures continue to invest in innovative technologies that could shape the future of climate solutions. These firms are pivotal in driving progress towards a low-carbon economy through strategic investments and global partnerships.

Ford Hits Brakes on Electric Trucks and SUV for Hybrid and Commercial EVs

Jennifer L
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Ford Hits Brakes on Electric Trucks and SUV for Hybrid and Commercial EVs

Ford Motor Company has announced a significant shift in its electric vehicle strategy, affecting its production plans and financial outlook. The automaker is delaying the launch of a next-generation all-electric pickup truck and scrapping the development of a new three-row electric SUV. Instead, Ford will focus on enhancing its hybrid lineup and expanding its range of commercial electric vehicles (EVs).

Ford Steers Towards Hybrids and Commercial EVs

Ford’s EV sales saw significant growth in July, with a 31% increase compared to the same month last year. This boost was driven by strong performances from the Mustang Mach-E and F-150 Lightning, despite overall vehicle sales experiencing slower growth.

Ford all electric vehicle sales July

Ford’s SUV sales have been a significant drag on its overall performance, with a 7% decline in July. Key models like the Edge (-59%), Bronco (-30%), and Escape (-15%) saw double-digit drops. The company ended production of the Edge earlier this year, while the new Explorer managed to boost sales by 49% last month.

Ford BEV sales July 2024 vs 2023

During Ford’s Q2 earnings call, CEO Jim Farley emphasized the company’s shift towards developing smaller, more affordable EVs. The team in Long Beach, composed of former executives from Tesla, Rivian, Lucid, and Apple, is focused on creating highly efficient electric vehicles. 

Farley highlighted that Tesla and low-cost Chinese OEMs represent the primary competition. He further anticipates many rivals will seek EV platforms from China, similar to Volkswagen’s strategy. Most recently, the US automaker unveiled its changing EV plans. 

The next-generation electric pickup trucks, originally scheduled for production at Ford’s new $5.6 billion plant in Tennessee, will now debut later than planned. The full-size truck will be produced in 2027, while a new midsize truck is being developed in California.

The shift in focus aims to leverage Ford’s strengths in commercial vehicles and SUVs, according to CFO John Lawler.

Ford’s Revamped EV Roadmap and Strategic Shift

The decision to pivot comes as Ford responds to market trends and customer preferences. Lawler emphasized the company’s commitment to aligning with areas where it has a competitive advantage, like commercial trucks and SUVs. This strategy adjustment is expected to result in a special noncash charge of about $400 million for the write-down of certain assets, including the canceled SUV. 

Ford’s future capital expenditure plans will shift focus from investing around 40% of its budget into all-electric vehicles to about 30%. Although a specific timeline for this change was not provided, it reflects the company’s recalibrated approach to EV investments. Production at the Tennessee plant, initially set to begin next year, will now see battery cell production starting in 2025.

The adjustments come amid slower-than-expected adoption of EVs and challenges in achieving profitability with these vehicles. Ford’s new strategy follows a previous decision to delay production of the three-row SUV and the next-generation electric pickup, codenamed “T3.” 

Lawler stated that the company’s agility in responding to customer feedback is crucial, highlighting the need for more diverse electrification options based on market experience over the past two years.

From All-Electric Ambitions to Hybrid Reality

Ford will continue to produce and enhance existing electric models, including the Mustang Mach-E and F-150 Lightning. The company plans to introduce its next generation of EVs with a new commercial van to be assembled at Ford’s Ohio Assembly Plant in 2026.

It will be followed by two new pickup trucks in 2027: a medium-size truck developed by Ford’s California Skunkworks team and the Project T3 truck.

Ford has also announced plans to enhance its battery production capabilities. Starting in 2025, battery production for the Mustang Mach-E will shift from Poland to a new plant in Holland, Michigan. This is to qualify the production for Inflation Reduction Act (IRA) tax credits.

The BlueOval SK Kentucky plant will produce cells for the current E-Transit commercial van. The BlueOval City plant in Tennessee will manufacture cells for the new electric commercial van and the Project T3 truck in 2025.

Additionally, Ford is set to begin lithium iron phosphate (LFP) battery production in 2026 at BlueOval Battery Park Michigan. The carmaker will use technology licensed from China’s CATL. This plant will also benefit from IRA incentives.

The company’s revised approach aligns with its previously announced $12 billion reduction in EV spending. Ford will seek to comply with emissions targets through various means, including purchasing regulatory carbon credits as needed. Tesla, by far, is the largest seller of these carbon credits to its peers failing to meet emissions regulations.

This strategic pivot aligns with Ford’s revised approach to EV profitability, moving away from initially selling EVs at a loss to meet regulatory standards and grow market share. Ford has pledged to provide a detailed update on its electrification strategy, technology advancements, profitability, and capital needs in the first half of 2025 during its “EV Day”.

Tariff Showdown: Harris and Trump’s Battle Over U.S. Critical Minerals

Jennifer L
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Tariff Showdown: Harris and Trump’s Battle Over U.S. Critical Minerals

The debate over U.S. tariff policies on critical minerals from China is gaining attention as the country approaches its November presidential election. Both major candidates—Vice President Kamala Harris and former President Donald Trump—are likely to continue using tariffs as a tool in the ongoing trade tensions with China. 

However, their approaches differ significantly, with each reflecting distinct strategies toward energy transition, industrial policy, and U.S.-China relations.

How Harris and Trump Plan to Use Tariffs in the Energy Race

Under the Biden administration, Section 301 tariffs were imposed on a range of Chinese products, including key components vital to the energy transition. These components, such as lithium-ion batteries and natural graphite, are essential for technologies like electric vehicles and renewable energy storage. These tariffs, which were increased in May 2024, include a 100% tariff on electric vehicles (EVs) and a 25% tariff on critical minerals, excluding lithium. 

This strategy is part of a broader effort to reduce U.S. reliance on Chinese imports for critical minerals essential to the energy transition, especially those used in EVs and renewable energy technologies.

Harris’ Approach

Kamala Harris has been a strong supporter of the Biden administration’s climate policies, including the Inflation Reduction Act. The law provides incentives for domestic production and “friendshoring” of critical minerals supply chains. 

If elected, Harris is expected to maintain the current administration’s approach, using tariffs strategically to further climate goals. This would likely involve continuing to impose targeted tariffs on specific products that are crucial for the energy transition, thereby encouraging domestic production and reducing dependency on China.

China largest source of US EV battery imports

Harris’s potential administration would likely view tariffs as a tool to promote sustainable development and achieve climate objectives, particularly in aligning with international commitments such as the Paris Agreement. By focusing on specific products, her administration could aim to balance the need for critical minerals with the overarching goal of decarbonizing the U.S. economy. This approach is seen by policy experts as a continuation of Biden’s policies, which have been designed to create a level playing field for domestic producers while advancing the country’s climate goals.

Trump’s Approach

In contrast, Donald Trump has indicated that if he were to return to office, his administration would adopt a more aggressive and sweeping approach to tariffs. Trump has previously expressed support for a 60% or higher tariff on all goods imported from China, along with a 10% tariff on all U.S. imports. This broad approach reflects Trump’s longstanding skepticism of trade with China and his administration’s focus on protecting U.S. industries from foreign competition.

A Trump administration would likely implement broad tariffs across a wide range of products, including critical minerals, without the targeted focus seen in the current administration, according to Scot Anderson, energy and natural resources metals and mining subsector head at Womble Bond Dickinson.

Responding on this, Vice President Harris remarked during a speech that Trump’s tariffs:

“…will mean higher prices on just about every one of your daily needs: a Trump tax on gas, a Trump tax on food, a Trump tax on clothing, a Trump tax on over-the-counter medication.”

For policy experts, this would likely result in higher tariffs on all critical minerals imported from China, regardless of their role in the energy transition. Such a policy could be seen as part of a broader strategy to reduce the U.S. trade deficit with China and protect domestic industries. 

Can U.S. Producers Thrive Under New Tariff Policies?

The continuation or strengthening of critical minerals tariffs under either administration could provide some benefits to U.S. producers. 

Companies like Pure Lithium Corp., a Massachusetts-based lithium company, view tariffs as beneficial for attracting investors and promoting domestic production. Tariffs can create market certainty, which is crucial for companies looking to scale up operations in the U.S.

The potential differences in tariff policy between Harris and Trump highlight the broader debate over how the U.S. should approach trade and industrial policy in the context of the energy transition.

Harris’s continuation of targeted tariffs would likely focus on achieving climate goals and reducing dependency on China for critical minerals. On the other hand, Trump’s broad tariffs could prioritize protecting U.S. industries but at the risk of higher costs for clean energy technologies.

The U.S.-China Tug-of-War for Critical Mineral Dominance

As the presidential election approaches, the competition to secure critical minerals essential for clean energy production is intensifying. Regardless of whether Donald Trump or Kamala Harris emerges victorious, the next administration will need to focus on strengthening the U.S.’s position in the global race for these vital resources.

critical minerals share of global production 2022
Chart from Bloomberg

Africa holds more than a 5th of the world’s reserves of crucial minerals like cobalt, copper, nickel, and lithium. However, China has established a more significant presence in Africa, with more operational mines on the continent than the U.S., making America vulnerable to potential supply disruptions and price surges in these critical inputs.

To counter China’s dominance in Africa’s critical mineral space, the U.S. will need to develop strategic partnerships and trade agreements with African nations. One key initiative in this effort is the African Growth and Opportunity Act (AGOA), a flagship U.S. program that provides nearly 40 sub-Saharan African nations with duty-free access to the American market. 

African trade ministers have called for a swift renewal of the AGOA deal, urging that it be extended for at least 16 years with minimal changes to stabilize commerce, promote investment, and preserve regional value chains. The U.S. has a significant opportunity to close the gap with China, especially as greenfield foreign-direct investment into Africa’s extractive industries declines.

As the U.S. moves toward the 2024 election, the future of tariff policy on critical minerals remains a key issue. Both Harris and Trump are likely to use tariffs as a tool to address trade imbalances with China, but their differing approaches reflect broader visions for the U.S. economy and its role in the global energy transition.

Canada Invests CA$6.6M to Boost Bioindustrial Innovation and Cut Carbon Emissions

Jennifer L
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Canada Invests CA$6.6M to Boost Bioindustrial Innovation and Cut Carbon Emissions

Strengthening Canada’s bioindustrial sector through research and innovation is a critical step towards enhancing the nation’s competitiveness and paving the way for a sustainable future. 

On behalf of the Honorable Lawrence MacAulay, Minister of Agriculture and Agri-Food, Peter Fragiskatos, Member of Parliament for London North Centre, announced that Bioindustrial Innovation Canada (BIC) will receive up to CA$6.6 million through the AgriScience Program’s Clusters Component. This is an initiative under the Sustainable Canadian Agricultural Partnership.

BIC is a not-for-profit business accelerator focused on clean, green, and sustainable technologies, providing strategic investment, advice, and services to businesses in the sector.

Unlocking Canada’s Bioeconomy

More than 140 forest bioeconomy companies are actively innovating across Canada, creating a dynamic and promising technology value chain. Despite this, Canada lags behind countries like Finland and the U.S. in having a formal, cohesive government strategy to support the bioeconomy.

For instance, the Biden administration has committed $2 billion to biomanufacturing in the U.S., demonstrating a significant “all-of-government” approach.

canadian bioeconomy

Sue Coueslan, vice-president of strategies and partnerships at Natural Products Canada, highlighted Canada’s key assets in the bioeconomy. These include extensive access to biomass, strong primary sectors with deep expertise, a skilled workforce, and a growing bioeconomy. These strengths position Canada to potentially capture a $1-trillion opportunity in various areas, namely:

  • water and waste treatment, 
  • bioproducts and sustainability, 
  • health and nutrition,
  • animal health, and 
  • value-added agriculture.

However, to fully capitalize on this opportunity, Coueslan emphasized the need for Canada to recognize the bioeconomy as a national priority. This would require a whole-of-government commitment and the establishment of a national framework to overcome jurisdictional silos and drive cohesive, cross-sectoral growth.

This is where the CA$6.6 million BIC funding can help to jumpstart the industry. 

Turning Waste into Wealth

The funding will support the Bioproducts Cluster, led by BIC, in developing advanced technologies that convert renewable resources, such as agricultural residues, into valuable bioenergy, biofuels, and biomaterials. These include products like ethanol and biodegradable plastics. They are essential for supporting the transition to a renewable-based economy and reducing greenhouse gas (GHG) emissions. 

The research will focus on improving biomass production, creating new bioproducts from Canadian crops, and turning by-products into value-added commodities.

The bioeconomy involves using renewable biological resources to produce food, goods, and energy sustainably, driving economic growth. In 2015, Canadian industrial bioproducts producers used about 22 million metric tonnes of biomass, with around 43% sourced from the agricultural sector. 

For the same year, the revenue from Canadian industrial bioproducts was estimated at CA$4.27 billion. By 2030, the global bioeconomy is projected to reach CA$10.5 trillion annually, with Canada’s share expected to rise to CA$240 billion.

Canada’s Push to Compete in Bioindustrial Innovation

Lawrence MacAulay, Minister of Agriculture and Agri-Food that the Bioproducts Cluster is helping to find green solutions that maximize resource use. He further noted that:

“This funding will provide new opportunities for our farmers to profit from agricultural by-products that would otherwise go to waste. It’s a win for farmers and a step toward a more sustainable future for all Canadians.”

Meaghan Seagrave, Executive Director, Bioindustrial Innovation Canada remarked that integrating agricultural feedstocks and bioproducts into various industry value chains will enhance Canada’s agricultural prospects and support industrial decarbonization.

BIC has previously received significant funding, including CA$5.5 million through the Growing Forward 2 framework and CA$11.2 million through the Canadian Agricultural Partnership framework. The AgriScience Program, under the Sustainable Canadian Agricultural Partnership, aims to accelerate innovation by funding pre-commercial science activities and research that benefit Canada’s agriculture and agri-food sector.

The Clusters Component specifically supports projects that mobilize industry, government, and academia through partnerships to address priority national themes and horizontal issues.

Canada’s strategic investment in BIC marks a significant step toward enhancing the nation’s bioindustrial sector. As Canada positions itself to capture a larger share of the global bioeconomy, this initiative underscores the importance of a cohesive national strategy to remain competitive and achieve long-term sustainability goals.

Fortescue Launches Innovative Green Metal Project in Australia, Fueled by Green Hydrogen!

Saptakee S
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Fortescue Launches Innovative Green Metal Project in Australia, Fueled by Green Hydrogen!

Fortescue has launched its Green Metal Project in Pilbara, Western Australia. This US$50 million initiative, situated within the Green Energy Hub at Christmas Creek, aims to produce over 1,500 tons of green metal annually. With the first output expected in 2025, this project marks a significant advancement in the green hydrogen space.

Fortescue’s Hydrogen Plant: A Step Towards Decarbonizing Mining

The iron and steel industry are extremely difficult to decarbonize, but the green mining leader is making groundbreaking efforts to reduce emissions in this sector.

Fortescue Executive Chairman Dr Andrew Forrest said,

“Today is a celebration of innovation, collaboration, and stretch targets, and marks a pivotal moment in Fortescue’s journey to build a green metal supply chain. Iron and steel are the backbone of our infrastructure; however, traditional iron and steel production processes are among the largest sources of greenhouse gas emissions.”

So, what is this green metal?

They have defined green metal as the “end product resulting from processing iron ore into iron, using renewable energy and with near zero carbon emissions.”

Dr. Forrest also elaborated that the company’s current milestone marks the integration of green mining, large-scale renewable power, and green hydrogen to produce green metal. He thinks this is a rare opportunity to create a green supply chain and Fortescue is steading fast to take advantage of it.

The company’s newly installed green hydrogen refueling station received a major boost of a $2 million grant from the Western Australian Government’s Renewable Hydrogen Fund. No wonder it is leading the green revolution, having enormous green hydrogen capacity.

Notably, this plant can produce up to 530 kg of H2 gas daily, equating to 195 tons annually. It is partly powered by solar energy and can serve a fleet of 10 hydrogen-powered coaches. Speaking of their latest advancements, they have completed the largest combined gaseous and liquid hydrogen plant on any Australian mine site.

The Green Energy Hub

Green hydrogen plays a crucial role in reducing mining emissions. It powers everything from buses to heavy equipment like haul trucks and excavators.

The Green Energy Hub features a hydrogen liquefaction facility, liquid hydrogen storage, and a liquid hydrogen refueling station. These are essential components in Fortescue’s broader decarbonization efforts, which also include zero-emission prototypes.

Fortescue Hydrogen Systems (FHS)

The company wants a shift from fossil fuels by using renewable energy to create cutting-edge hydrogen production systems for any application. Their portfolio includes a wide range of electrolyzer products, systems, and services, featuring advanced technologies and membrane innovations. Fortescue’s hallmark PEM Electrolyzers use a High-Pressure Proton Exchange Membrane (HP PEM) as the core technology.

For hydrogen solutions, they have FHS P50 that delivers 24,000 kg/day of high-quality, pressurized hydrogen through a modular but industrial-scale design. The other prototypes are FHS P1 and P5. They offer compact hydrogen solutions of capacity 480 to 2,400 kg/day of high-grade hydrogen.

Fortescue’s Emissions Reduction Targets and Strategy

The company is committed to achieving real zero Scope 1 and 2 emissions across its Australian iron ore operations by 2030. It is working towards having the targets verified by the SBTi for the current financial year. For Scope 3 emissions, Fortescue aims to decarbonize the steelmaking process, shipping, and upstream emissions by 2040.

Fortescue Green Hydrogen emissions

source: Fortescue

  • Scope 1 and 2 Emissions: In FY23, Fortescue’s total gross Scope 1 and 2 emissions from Australian iron ore operations and marine vessels were 2.55 mtCO2e. Scope 1 emissions were 2.2 million tons, while Scope 2 emissions from power purchases were 0.35 million tons.
  • Scope 3 Emissions: Fortescue’s Scope 3 emissions reached 267.61 mtCO2e in FY23, marking a 5% increase from FY22 due to a rise in iron ore shipments.

Since FY19, its RE use in Pilbara has grown from less than 1 gigawatt hour (GWh) to 144 GWh in FY23, with a 58.9 GWh increase since FY22. Today, renewable energy accounts for 20% of the energy purchased for Pilbara operations.

The company’s climate change strategy is focused on three key areas:

  • Implementing in-house and collaborative solutions to reduce emissions within their iron-ore operations.
  • Providing technology solutions to address emissions across their value chains.
  • Driving the development of renewable energy and green hydrogen to support global decarbonization efforts.

Fortescue

source: Fortescue

Fortescue Metals Chief Executive Officer, Dino Otranto

“On decarbonization, we remain firmly committed to our target of Real Zero by 2030, without voluntary carbon offsets. Our hydrogen-powered haul truck prototype also operated on hydrogen for the first time and will soon be transported to our Christmas Creek site to undergo site-based commissioning and testing.”

Western Australia: The Green Hydrogen Hotspot

Australia leads the world in renewable hydrogen projects. We dug into a report in Hydrogen Insight and discovered that last year the Australian Government announced a subsidy of US$1.35bn to ramp up domestic green hydrogen supply.

They named it the “Hydrogen Headstart Program”. It aims to bridge the commercial gap for early-stage projects, positioning Australia as a global leader in hydrogen production and export.

Moreover, Western Australia (WA) is ideally positioned to produce, use, and export renewable hydrogen. It has abundant renewable energy resources, a robust energy industry, and proximity to major international markets. These advantages make it a top choice for hydrogen investors and companies.

Here’s a report from Australia’s National Hydrogen Strategy

Australia green hydrogensource: Australia’s National Hydrogen Strategy

Western Australia’s Premier, Roger Cook, hailed the plant as a crucial step in emerging as a global leader in clean energy and green iron production. Thus, we can conclude that Fortescue’s new plant is truly revolutionary. It produces both gaseous and liquid hydrogen, that can power the company’s mining prototypes and coach fleet at Christmas Creek.

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