As the countdown to Super Bowl LVIII begins, Taylor Swift finds herself soaring not only in the charts but also in environmental debates. In recent weeks, scrutiny has intensified on American singer-songwriter’s footprint from her private jet travels.
An estimation shows that the popstar’s flight to the event, where her love interest Kansas City Chiefs tight end Travis Kelce would be playing, will pollute 14x the average American household emissions in one year.
Swift’s sky-high carbon emissions from her private jets brewed interest at Chiefs games with her frequent travels. The pop culture icon joins a list of celebrities facing criticisms for private jet travel amid growing concerns about planet-warming carbon emissions.
Taylor Swift’s Super Bowl Travel Footprint
The hitmaker, who broke chart records with her Eras Tour grossing over $1 billion, becomes even more popular because of her $40M-private jet’s emissions. This kind of transport is known to be the most polluting, creating a major challenge in global decarbonization efforts.
Compared to other transportation modes, private jet emits 2 metric tons per hour per person. A U.S. domestic commercial flight releases just 0.04 metric tons of CO2.
Source: Beatriz Barros & Richard Wilk (2021). The outsized carbon footprints of the super-rich, Sustainability: Science, Practice and Policy. Graphics by BuzzFeed News.
Swift is the world’s most carbon polluting celebrity in 2022, per digital sustainability consultancy study. Their results show that Swift had flown 170 times since January that year, equivalent to 22,923 minutes in the air.
If the popstar attends the Super Bowl in Las Vegas, she would be coming from Tokyo where she’s on tour. That would mean flying over 19,400 miles in under 2 weeks via her private jet to support Travis Kelce. The Chiefs player is America’s most Googled NFL player in the run up to the big game.
The flights are estimated to emit more than 200,000 pounds of CO2, according to Gregory Keoleian. He’s a co-director of the Center for Sustainable Systems at the University of Michigan.
The controversy underscores the broader issue of the environmental impact disparities between the wealthy and lower-income individuals. And Swift isn’t the only A-lister to be spotlighted for globe-trotting.
In another analysis by The Guardian, 200 rich people, including business tycoons and celebrities, emitted over 415,500 tons of carbon from making over 44,700 flights in 2023. In perspective, that’s equal to the average annual emissions of 40,000 British people.
Included in the study are famous businessmen like Elon Musk and music veterans like The Rolling Stones.
Professional Sports and Carbon Offsets
Taylor Swift’s Super Bowl flight emissions is just a fraction of the event’s massive carbon footprint. Think about the competing teams’ own travel emissions and that of the spectators’. Then add in the emissions of hosting the event, including the arena’s energy use and the accommodations’ emissions.
More remarkably, the carbon footprint of the digital ads linked to the Super Bowl is huge. The 10 most popular ads for the most-watched U.S. sporting event stands at 422 tons of CO2. That’s roughly equivalent to 2,800 flights from Philadelphia to Kansas City. Both cities were part of last year’s Super Bowl LVII.
Other major events, including the Olympic Games and the U.N. climate summit, also face criticisms for their significant footprint. All air travel contributes to climate change, with private jets notably producing much higher emissions per person. They emit at least 10x more carbon per passenger compared to commercial planes.
In an era where a substantial carbon footprint is viewed as a reputational concern for public figures, celebrities and high-profile figures have taken substantial steps to address their carbon emissions and communicate these efforts to the broader public.
Swift opted to use carbon offsets to compensate for her private jet’s huge carbon footprint. Prior to the singer’s move, the Houston Texans of the National Football League (NFL) had also bought carbon credits to offset their air travel’s emissions.
Carbon offsets are designed to help individuals and companies address their carbon emissions by supporting carbon reduction or removal efforts. Examples include tree planting and the use of technologies that capture carbon from the atmosphere.
While the details of Taylor Swift’s air travel emissions to watch Travis Kelce play at the Super Bowl LVIII remain to be seen, it could bring the most anticipated sports event’s environmental impact under more scrutiny. The Super Bowl’s colossal carbon footprint underscores the urgent need for sustainable practices in the arena of sports and entertainment.
In a groundbreaking move towards environmental responsibility, A-Gas, a pioneer in refrigerant lifecycle management, has received approval for Ecology Offset Credits from the Washington State Department of Ecology, a key regulatory authority in the state’s carbon market compliance. Simultaneously, SusGlobal Energy Corp. is making waves with its composting offset project in Ontario, selling Verified Emission Reductions and Removals (VERRs).
These initiatives underscore a commitment to sustainability and innovative solutions to combat climate change.
A-Gas (US) is a trading subsidiary of A-Gas International, the world’s biggest refrigerant recovery and reclamation company. It focuses on providing environmental solutions and lifecycle management services for ozone depleting substances and global warming agents.
Revolutionizing Refrigerant Recovery Through Carbon Credits
Utilizing their Rapid Recovery on-site refrigerant recovery service and Rapid Exchange on-demand cylinder swap service, along with collaboration with distributor partners, A-Gas collected refrigerant gasses from Washington State.
The collected gasses were then treated in A-Gas’ proprietary PyroPlas® plasma arc destruction units. It is the only technology of its kind in the U.S. approved for carbon offset generation.
PyroPlas® ensures the cleanest end-of-life treatment, achieving a remarkable 99.9999% efficiency in destroying Ozone Depleting Substances with minimal emissions. It also has no adverse environmental impacts.
The Department of Ecology has issued 109,180 Ecology Offset Credits to A-Gas. These credits can be used by covered entities in Washington to meet their emission reduction obligations under the state’s program.
American Carbon Standard (ACR) served as the Offset Project Registry, issuing serialized Registry Offset Credits for conversion into Ecology Offset Credits. The project adhered to the California Air Resources Board Compliance Offset Protocol for Ozone Depleting Substance Projects, adopted by the Washington Department of Ecology for generating the Registry Offset Credits.
Brooke Willard, Carbon Program Director for A-Gas, expressed pride in being among the first project developers for Ecology Offset Credits. A-Gas aims to manage refrigerant lifecycles effectively, contributing to environmental protection and enhancement.
Willard further added that:
“With the issuance of these credits, A-Gas is providing Washington organizations with a transparent mechanism to build a more sustainable future.”
A-Gas ambitiously aims to reach net zero emissions by 2035. The company also has a goal of reducing its existing emissions by 50% by 2028.
Over in Canada, a composting offset project has generated carbon credits called Verified Emission Reductions and Removals (VERRs).
Turning Waste into Gold
SusGlobal Energy Corp., an environmental, agricultural and industrial biotechnology company, has sold 3,000 VERRs as part of the SusGlobal Belleville Composting Offset Project in Ontario. The company focuses on acquiring, developing, and monetizing a portfolio of proprietary technologies in the waste to energy and regenerative product applications globally.
This new sale brings the total number of carbon credits sold by the company to an impressive 42,302. Anew Climate, formerly known as Blue Source, developed the project.
A noteworthy achievement of the project is its contribution to the increased diversion of organic waste from landfills. This significantly helps in mitigating methane generation.
Methane, a potent greenhouse gas, is 28x more effective at trapping heat energy in the atmosphere than carbon dioxide. By diverting waste from landfills, the composting offset project addresses this environmental concern, benefitting both the community and the climate.
In 2021, Canada’s waste-sector methane emissions were 21 metric tons of CO2e or 0.96 metric tons of methane. It accounts for nearly 22% of the total methane emissions in the country in 2020, as seen below.
Source: Library of Parliament
The demand from municipalities to divert organic waste from landfills remains strong. Composting facilities with sustainable management practices are crucial in this waste redistribution process.
Ontario is planning to ban food and organic waste in conventional waste sites under the Environmental Protection Act. This regulation helps unlock opportunities for waste reduction and innovative resource recovery throughout the value chain. This change is advantageous for SusGlobal, enhancing its infrastructure, assets, licenses, and capacity to produce lower-carbon options at existing facilities.
Fueling Composting for Cleaner Environment
SusGlobal Belleville operates as an aerobic composting facility, specializing in the processing of residential source-separated organic waste and industrial, commercial, and institutional organic waste into high-quality compost.
The facility collaborates with local municipalities, including the City of Belleville, County of Northumberland, the Municipality of Port Hope, the Township of Cavan Monaghan, and Prince Edward County, for waste collection.
Verified Emission Reductions and Removals (VERRs) associated with the composting offset project are validated by an independent third party.
Marc Hazout, Executive Chairman, President, and CEO of SusGlobal Energy Corp., expressed appreciation of this sale, saying that:
“We are pleased with the continued amounts that Anew has marketed and sold as part of our Company’s carbon credits monetization initiative, allowing us to generate additional revenues.”
The anticipated revenue from carbon credits would drive technological advancements, boosting the expansion of composting efforts not just at the SusGlobal Belleville facility but in other municipalities across North America. This underscores the company’s commitment to continuous innovation and environmental stewardship.
A-Gas secures Ecology Offset Credits from its refrigerant recovery and SusGlobal continues to thrive in carbon credit sales. Both companies show the transformative power of corporate responsibility in reducing carbon emissions and building a sustainable future.
The Integrity Council for the Voluntary Carbon Market (ICVCM) has achieved a new milestone, announcing its plan to assess over 100 active carbon credit methodologies for adherence to the high-integrity Core Carbon Principles (CCPs).
The first decisions on these assessments are due by the end of March.
An expert group, including members of the Integrity Council’s Governing Board, its Expert Panel, and external stakeholders, has categorized similar carbon credit methodologies into 36 different groups. The groups will undergo three types of assessments based on their complexity and issues.
It was in August last year when ICVCM released its long-awaited Assessment Framework.
Types of Assessments for Carbon Credit Categories
The Core Carbon Principles (CCPs), comprising 10 fundamental tenets for high-integrity carbon credits, are supported by detailed criteria outlined in the CCP rulebook.
The issuance of high-integrity CCP-labeled credits could facilitate the flow of climate finance to Global South countries. This is essential in helping them achieve their national climate objectives.
These credits will enable buyers to identify and support top-notch projects that effectively reduce and remove emissions. Projects range from initiatives to safeguard and restore forests to the expansion of challenging-to-commercialize innovative clean technologies.
The Categories Working Group (CWG) has sorted carbon credits categories into one of three types of assessment:
Internal assessment:
Categories covering 8% of carbon credits in the market will be assessed internally by the Integrity Council secretariat and members of its Expert Panel. This includes methodologies such as:
capturing methane from mines and landfill sites,
detecting and repairing leaks in gas systems,
destroying ozone-depleting chemicals, and
reducing emissions of sulfur hexafluoride.
Multi-stakeholder assessment:
Categories covering 47% of carbon credits in the market will be assessed by Multi-Stakeholder Working Groups. These categories, including renewable energy, efficient cookstoves, improved forest management, and REDD+ (Reducing Emissions from Deforestation and Degradation in Developing Countries), raise complex issues in specific areas.
Considered by the CWG to be very unlikely to meet the criteria:
Categories covering 1% of carbon credits in the market, considered unlikely to meet CCP criteria, will be assessed once other evaluations are complete. These include new natural gas power, waste heat recovery, and industrial energy efficiency.
Major Programs Under Assessment
Programs have the discretion to exclude certain carbon credit methodologies from the assessment process.
Verra, for instance, introduced its new REDD+ methodology for evaluation while omitting its prior REDD+ methodologies, constituting 27% of the market credits. The organization has put forth only the latest versions of methodologies for specific project types. They’re developing a pathway to facilitate projects transitioning to these updated versions.
Here’s the status of the major programs under assessment:
An additional 6% of methodologies have either been excluded by other programs or represent older methodologies covering a limited number of credits in the market. Unallocated credits in the market would be due to various reasons. These include data inconsistencies, projects utilizing multiple methodologies, inactivity of some methodologies, and the pending categorization of certain small methodologies.
Carbon-crediting programs commanding a 98% market share have sought approval to use the CCP label. The secretariat is concurrently evaluating these programs alongside the assessment of categories.
Approved programs meeting the criteria will be authorized to display the CCP label on both existing and new credits from approved categories.
Annette Nazareth, Integrity Council Chair, said:
“The Core Carbon Principles establish a global benchmark for high integrity. We know buyers are eagerly awaiting CCP-labelled carbon credits. We are keen to ensure the labels reach the market as soon as possible while ensuring that we properly consider complex issues and make the right decisions.”
Marching Towards Integrity
The Integrity Council anticipates revealing the outcomes of its assessments by March. The organization has dedicated web pages on its site tracking the progress of all categories and programs undergoing assessment.
The Governing Board’s decisions, along with rationale, will be made public, accompanied by transparent explanations for any negative determinations.
It’s important to note that not all methodologies within a specific category may receive approval.
In cases where remedial action is necessary before program or category approval, or if approval is unlikely, affected programs will be notified. They will have the right to submit their input and participate in a hearing before any final decisions are made.
The Integrity Council’s efforts to instill integrity in carbon credits align with the Voluntary Carbon Markets Integrity Initiative (VCMI). VCMI focuses on ensuring integrity in credit use with the following claims type.
VCMI Carbon integrity claims
The VCMI’s Claims Code of Practice provides guidance to companies on using credits to make credible claims regarding their progress towards net zero commitments, emphasizing the need to purchase credits meeting the CCP quality threshold.
More notably, governments and regulators are increasingly considering the ICVCM’s CCPs as an international standard for incorporation into their frameworks. In particular, the UK has expressed intent to endorse the CCPs and explore their integration into policies, regulations, and guidance.
The Monetary Authority of Singapore is also actively exploring how to align its transition credits with the CCPs. In the US, the Commodity Futures Trading Commission has published draft guidance aligning carbon credit derivatives listings with the CCPs.
ICVCM reached a significant milestone geared to enhance the credibility of carbon credits, supporting climate finance in Global South countries and aiding buyers in identifying top-notch projects. The process involves internal and multi-stakeholder assessments, with approved programs displaying the coveted CCP label on their credits.
CarbonPool, a pioneering Carbon Credit Insurance Firm, positioning itself as the world’s first insurance company with a carbon credit balance sheet, has successfully concluded a $12 million funding round.
The climate-focused startup is co-founded by former Allianz executives. The funding round is led by Heartcore Capital and Vorwerk Ventures, including support from HCS Capital, and Revent Ventures.
The raise marks the largest European climate-focused seed funding round in over a year. Globally, it is the second-biggest seed funding in climate finance, highlighting significant interest for innovative approaches to carbon credits insurance.
The World’s First In-Kind Carbon Credit Insurance
In an era where companies heavily rely on carbon credits to achieve their net zero targets, the turbulence in carbon credit markets has marked the importance of credit integrity, rigorous risk underwriting, and assurance of real environmental gains.
CarbonPool addresses the need for such assurances by offering in-kind insurance to mitigate risks related to reaching net zero commitments. The carbon credit insurer will acquire high-quality carbon credits, keeping them on its balance sheet for future payouts.
This coverage extends to shortfalls, reversals, business interruptions, and natural disasters that might hamper the contracted carbon dioxide removals. It also applies to events that accidentally contribute to increased atmospheric CO2 levels such as wildfires.
Image from CarbonPool
The company’s interdisciplinary team, comprising insurance experts, climate scientists, weather modelers, geographers, and engineers, evaluates each risk to develop customized risk models.
Premiums collected from clients, combined with CarbonPool’s capital, are strategically invested in high-quality carbon removal projects. This unique approach ensures that claims can be in-kind, enhancing the credibility and reliability of carbon credit commitments.
A report by AlliedOffsets, covering 2000 to 2023, indicates a modest 45% average success rate in the issuance of carbon credits. This poses a significant challenge for corporate buyers striving to achieve their climate objectives.
Notably, current insurance offerings cover the assets underpinning carbon credits but don’t provide compensation for the credits’ real value. This is where CarbonPool’s in-kind insurance comes in to address the uncertainties and risks associated with carbon credit issuance.
Mitigating Climate Risks with CarbonPool’s Carbon Credit Assurance
Former regional CEO of Allianz Africa and Co-founder/CEO of CarbonPool, Coenraad Vrolijk, highlighted their unique approach to insurance, saying:
“CarbonPool’s in-kind payments make it unique among insurers in not only offering protection to holders of carbon credits in cases of natural disaster or technology breakdown but also in providing a guarantee that carbon credits live up to their promises, giving purchasers certainty and ensuring that they can meet their net zero goals.”
Christian Jepsen, a founding partner at Heartcore, emphasized the significant potential of insurance in the carbon trading space. He noted that while insurance typically constitutes 5-10% of mature markets’ revenue, it is just beginning to make an impact in carbon markets.
Participants in the carbon markets, where revenues will increase 4x to $2 trillion by 2050, have little access to these insurances. And the CarbonPool team aims to fill in this gap.
The insurer is actively progressing its insurance license application in Switzerland. Already engaging with clients, including corporations, institutional investors, and carbon removal developers, the company offers assessments and pre-underwriting agreements.
Additionally, CarbonPool is in talks with government bodies such as the United Nations and the State of California. The company is contributing insights on how insurance can effectively address key challenges within the industry.
Within the same tree but in a separate branch, climate focus startups are also attracting investors’ attention.
The Growing Support for Innovative Climate Solutions
Per Crunchbase data, investors are funding better, lower-carbon ships and boats. Their analysis reveals that companies focusing on reducing the carbon footprint of ships and watercraft have raised a total of over $1 billion.
The startups are using the funds to improve research and commercialization of electric motors, wind-powered ships, and other low-carbon ships.
For instance, Pure Watercraft, a startup providing battery-electric propulsion systems for boats, raised over $200 million in total equity funding. A French Ocean Zero portfolio company, Ayro, focusing on decarbonizing cargo ships through wind propulsion has closed over $32 million.
Climate tech startups and their backers continue to show that their carbon reduction innovations are here to stay. Despite the challenges ahead, they are driven by their visions to impact the industry and help in propelling the world towards net zero.
Fighting alongside these nautical startups is CarbonPool. The company’s successful funding round positions it as a key player in the emerging space of climate-focused startups. Together, they show the increasing recognition and support for innovative solutions addressing climate challenges.
BlueLayer has secured $10 million in funding to support carbon project developers worldwide in bringing high-quality carbon credits to market.
The end-to-end software platform, operating in stealth mode since late 2022, raised the funds through seed and pre-seed investment rounds. The seed round is led by Point Nine, a prominent European B2B software-focused VC firm.
With head office in Berlin and teams in London and Athens, BlueLayer aims to help carbon project developers manage their carbon credits at scale. The company will use the funds to expand its platform features to address the emerging and complex needs of developers.
Targeting Quality Carbon Credits at Scale
The pathway towards Net Zero begins with companies with Science Based Targets and commitments. And thus, addressing their value chain emissions through decarbonization efforts is crucial. This is where BlueLayer’s mission comes into play.
The platform aims to facilitate the connection between corporate leaders committed to Science Based Targets and project developers working on the ground to remove or avoid carbon emissions.
Experts predict that carbon markets need to scale significantly, reaching at least 20% of current global emissions or around 10 gigatons by 2050, representing a 40x increase from their current size.
McKinsey & Company projected an increase in global demand for voluntary carbon credits of up to 100x compared to 2020 levels, as seen below. BlueLayer seeks to contribute to this expansion by supporting developers in scaling carbon projects beyond value chain mitigation efforts.
On the demand side, buyers are willing to pay a premium for high-quality carbon credits, supported by reliable data.
A report by Ecosystem Marketplace in December last year shows a revealing trend within the voluntary carbon market. It highlighted that despite their higher price, demand concentrates toward high-integrity and high-quality carbon credits. These credits often offer other benefits that go beyond curbing carbon emissions.
To date, there are over 177 million carbon tonnes managed on BlueLayer’s platform.
The startup, co-founded by Vivian Bertseka, who has a decade-long background as a climate investor, has secured $10 million to address the challenges faced by carbon project developers. Highlighting the important role of their technology in raising quality of carbon credit market, Bertseka remarked that:
“BlueLayer empowers project developers to centralize and display data from different sources into one single set of information, which facilitates following well-established methodologies and understanding the requirements of rating agencies and standards…We also enable them to report and communicate their impact with ease, accuracy and detail.”
The team includes Alexander Argyros and Gerardo Bonilla who have experience in building global software businesses. They have identified the limitations project developers face in scaling high-quality projects due to inadequate resources and tools.
BlueLayer is engaging with over 200 carbon project developers and ecosystem players. The company discovered that despite increased attention and billions of dollars of funding, developers still struggle with hefty manual processes. They are also relying on outdated systems like spreadsheets.
According to an industry report, project developers may even lose $2.6 billion by 2030 due to verification delays. This can also cost the VCM 4.8 gigatons of carbon credits.
Recognizing such challenges, BlueLayer developed an all-in-one platform tailored to support developers across the entire project lifecycle. This includes the pre-feasibility stage, credit issuance, inventory tracking, and order management.
The platform caters to developers at all stages, while offering essential tools for project development, data management, and stakeholder communication.
BlueLayer’s enterprise-grade software aims to unlock growth, enhance transparency, and improve carbon project quality. Moreover, it provides immediate value to customers by optimizing revenues, reducing time to market, managing portfolio complexity, and improving data accessibility and auditability.
The company works with ecosystem leaders and seamlessly integrates with various third parties, including data providers and registries.
BlueLayer’s $10 million funding propels the European startup into the spotlight. With a mission to enhance carbon credit market quality, BlueLayer aims to revolutionize project development, contributing to the significant scaling of carbon markets predicted by experts.
PicoNext has recently announced a collaboration with Tomorrow’s Air, the flagship climate initiative of the Adventure Travel Trade Association. Tomorrow’s Air focuses on educating, inspiring, and mobilizing individuals to support carbon removal technologies and sustainable aviation fuel in the travel industry.
The initiative is part of a larger effort to promote sustainable travel practices and innovative climate solutions.
Every payment received by Tomorrow’s Air supports climate conscious travel education. It also funds the scale up of carbon emission reductions and carbon removal innovations.
PicoNext is an end-to-end platform for experienced brands to engage their customers using public ledgers. With integrated Digital Product Passport, sustainability transparency, and loyalty capabilities, PicoNext enables companies to use blockchains in promoting products/services.
What are Digital Product Passports?
As part of their collaboration, PicoNext is powering Tomorrow’s Air’s new Digital Product Passports designed for carbon removal purchases. These passports offer a unique way for travelers to track the progress and impact of associated carbon removal orders.
When individuals embark on a journey with one of Tomorrow’s Air’s partner travel businesses, the Digital Product Passport allows them to gain insights into how carbon dioxide emissions associated with their travel are being effectively removed from the atmosphere.
The Digital Product Passport includes a detailed representation of carbon removal purchases specific to a particular travel business. It offers travelers a deeper understanding of how industry partners are contributing to the scaling up of essential technologies for cleaning up excess CO2.
The carbon removal information stored in Tomorrow’s Air Digital Product Passports is cryptographically secure, ensuring the integrity of the data. This adds an extra layer of transparency and trust to the process, as the information can’t be changed or tampered with once it’s written to the blockchain.
Moreover, updates on the status of climate initiatives within the Digital Product Passport remain accessible indefinitely across distributed ledgers. As such, it provides travelers and Tomorrow’s Air’s travel business customers with insights into the progress of carbon removal actions.
The intuitive web-based viewer provided by PicoNext enables easy access to view the status of these public-ledger carbon removal events.
The Passport to Transparency in Carbon Removals
Tomorrow’s Air is advancing its approach to carbon capture reporting by transitioning from PDF-based certificates to PicoNext’s Digital Product Passports. This evolution aims to provide enhanced transparency to a broader audience of stakeholders using sustainable and energy-efficient public ledgers.
Unlike traditional PDF certificates, Digital Product Passports leverage blockchain technology to offer an easy-to-access method for gaining deeper insights into a company’s sustainability initiatives.
Underlining this aspect, Christina Beckmann, creator of Tomorrow’s Air remarked that:
“Tomorrow’s Air adds value by collaborating with the most trusted, reputable carbon removal suppliers – and by elevating transparency using Digital Product Passports we give our customers unmatched visibility into their carbon removal orders.”
By using Digital Product Passports, Tomorrow’s Air can engage customers with a more interactive and transparent representation of carbon removals. This approach not only substantiates a company’s commitment to sustainability but also fosters greater trust among stakeholders.
More notably, it serves as a proactive measure against greenwashing, addressing consumer concerns about the authenticity of sustainability claims.
Several high-profile cases have highlighted the negative consequences of greenwashing, leading to legal actions and reputational damage. Delta Air Lines, Evian Natural Spring Water, Nivea, TotalEnergies, KLM, and FIFA have all faced legal challenges related to their environmental claims.
It’s no surprise, therefore, that environmental groups unanimously agree in supporting environmental and social data in a Digital Product Passport. As shown in the chart below, 92% of environmental organizations/NGOs prefer to see environmental data in the passport.
PicoNext’s technology allows organizations to showcase their commitment to sustainability on a public ledger, providing a verifiable record of progress toward environmental goals. By leveraging this technology, companies demonstrate that their marketing claims align with genuine environmental impact, thus safeguarding their claims’ integrity.
This innovative approach is applicable across various industries, such as manufacturing, fashion, textiles, batteries, and electronics.
Furthermore, adopting Digital Product Passports assists companies in complying with European Union regulations that emphasize product-level transparency. The passports provide a transparent and substantiated record of sustainability data throughout a product’s lifecycle.
In conclusion, the collaboration between PicoNext and Tomorrow’s Air signifies a significant stride toward transparency and accountability in carbon removal efforts. The introduction of Digital Product Passports not only empowers travelers to track their carbon footprint but also sets a new standard for sustainability reporting in the travel industry.
Companies wanting to offset their harmful emissions have used a type of carbon credit known as “cookstove credits” to compensate for their pollution. But a new study suggests that the clean cookstove projects may be overstating their impact by about 1,000%.
The cookstove projects aim to address issues related to household air pollution and deforestation caused by traditional cooking methods. These projects are seen as a way to achieve UN sustainable development goals (SDGs) and have gained popularity.
Within 6 months in 2023, a report showed cookstove projects issued the most new credits in the market, taking 15% of the total, while also registering the most new projects.
However, the study published in Nature Sustainability suggests that these projects are exaggerating their climate benefits. It reveals that 9 out of 10 of the 96 million certified cookstove credits don’t avoid the emissions they claim.
Burning Questions: The Climate Impact of Cookstove Carbon Credits
Around 3.2 million premature deaths occur annually due to household air pollution, according to the Clean Cooking Alliance (CCA). Burning wood for cooking also contributes to about 2% of global greenhouse gas emissions.
The CCA, backed by governments including the Netherlands, Canada, and the United States, is working on an improved methodology for cookstove credits. The CCA aims to address the challenges associated with accurately measuring emissions reductions from cookstove projects. This is due to the complexity and resource-intensive nature of the task.
The alliance believes that the carbon market can play a significant role in addressing this issue with carbon credits.
Carbon credits represent one tonne of carbon emissions in theory. Companies buy them to offset their emissions, allowing them to neutralize their carbon footprint. These market instruments are facing increased scrutiny as concerns grow about the effectiveness of carbon offset schemes.
Cookstove credits, a type of carbon credit, have become one of the fastest-growing project types on the voluntary carbon market. These credits are issued when cleaner or less energy-intensive cookstoves are distributed to communities that traditionally rely on dirty fuels like wood or kerosene.
They typically cost much more than the other types of carbon credits available today, given the multiple SDGs they address. For instance, the carbon pricing from Gold Standard below shows that cookstove credits are priced higher than forestry credits.
Monetary Value of Gold Standard Project Impacts/Ton of CO2 Emissions Reductions
As of May 2023, cookstove projects represented 1,213 out of the 7,933 project activities on the VCM. They also generated ~78.9 million total issued credits in the market.
Moreover, cookstove offset projects can progress several SDGs such as climate, energy, health, gender, poverty and deforestation.
But the study, conducted by researchers at the University of California, Berkeley, challenges the projects’ claim. The researchers indicate that many offsetting schemes claiming to support “clean” cookstoves often fail to meet World Health Organization standards.
Their results raise concerns about the accuracy of the claimed climate benefits of such projects. They’re calling for a closer examination of their impact on air quality, deforestation, and overall environmental and social benefits.
Carbon Cookout: The Environmental Benefits of Cookstove Projects
The research indicates that the rules allow projects to exaggerate stove usage and the resulting benefits for nearby forests. In turn, they significantly inflate the claimed benefits for climate and biodiversity, the study noted.
Issued Cookstove Credits Across the VCM vs Study Sample
The above images map out the credits issued so far on the VCM across the five methodologies covered as of 9 November 2022 (top panel). The study sample (bottom panel) includes the 51 cookstove project activities. It covers the GS-TPDDTEC, GS-simplified, CDM-AMS-II-G, CDM-AMS-I-E and GS-metered. Source: Gill-Wiehl, A. et al. 2024
While acknowledging the issues, the researchers propose that reforms to the rules governing carbon credits could still make them a meaningful source of climate finance if properly implemented. They also offer a method for clean cookstove projects to avoid overstating their impact.
Some companies have reportedly adopted those practices during the paper’s peer-review process.
The lead author of the study, Annelise Gill-Wiehl, highlighted the potential impact of over-crediting. She stated that it “replaces direct emission reduction and other more effective climate mitigation activities”.
The study contributes to the ongoing scrutiny of the unregulated voluntary carbon market. Major concerns center on the generation of potentially questionable carbon offsets.
Barbara Haya, the director of the Berkeley Carbon Trading Project and a co-author of the study, expressed hope that the recommendations provided could contribute to improving the quality of carbon credits.
Clearing the Air: The Controversy
In response to the study, an open letter from carbon project developers and researchers highlighted concerns about the research. They argued that the academics focused on larger cookstove projects, which usually issued more credits distributed than smaller initiatives.
Carbon credit registries Verra and Gold Standard disputed the findings.
The Gold Standard, a major carbon credit certifier, has disputed the findings. Gold Standard stated that the study’s conclusions weren’t supported by the evidence and were at odds with wider academic literature. The researchers acknowledged that Gold Standard produced the best-quality method for producing offsets, with only a 1.5 times over-crediting.
Verra, the world’s largest carbon standard, also expressed disappointment in the continued attention on the study. The certifier emphasized that the findings did not directly relate to its current methods.
Verra is developing a new methodology for cookstoves that reflects best practices and includes measuring techniques to verify stove usage.
The cookstove company ATEC, working with UC Berkeley to measure benefits more accurately, supported the research’s goal of ensuring accurate emission reductions.
The study challenging the accuracy of cookstove carbon credits raises critical concerns about the claimed climate benefits. The industry disputed the findings, but the call for improved regulations and accurate measurements remain to ensure transparency and effectiveness of carbon offset markets.
According to an analysis by Global Witness, over 50 oil and gas companies signing the decarbonization pact at the COP28 climate summit are projected to emit over 150 billion metric tons of climate pollution by 2050. That represents about 62% of the remaining carbon dioxide budget to stay below the 1.5°C temperature rise limit.
The data used in the analysis covers only crude oil and gas. It didn’t include figures for NGL and condensate, which makes the production estimates conservative.
The analysts based their carbon budget calculations using the equivalent of 250 billion tonnes CO2 equivalent to retain a 50% chance of limiting warming to 1.5C, which is according to the latest peer-reviewed research.
The dataset includes all assets that are presently in production, under development (approved but haven’t commenced yet), discovery, and undiscovered. The data covers operating production from 2023 to 2050.
Unraveling the Hidden Impact of Oil & Gas Climate Pledge
The Oil and Gas Decarbonization Charter was introduced at COP28 by Saudi Arabia and conference president Sultan Ahmed Al Jaber. Al Jaber emphasized its significance, claiming that companies representing over 40% of global oil production committed to achieving net zero. The pact also commits to end methane emission and halt routine flaring by 2030.
Saudi Arabia’s Aramco and the UAE’s ADNOC, alongside 29 more national oil companies, inked the non-binding charter. PetroChina, ExxonMobil, TotalEnergies, Petrobras, and Shell have signed the agreement, though their agreement is only voluntary.
Direct GHG emissions of largest oil companies in 2022
The pact signifies a promising climate commitment from the oil majors. However, a significant loophole exists, as highlighted by Global Witness.
The charter exclusively addresses emissions directly released by those companies. They leave out the considerable impact of their products’ use, known as Scope 3 emissions. This pollution source comprises up to 90% of the oil and gas’ total carbon emissions.
Global Witness used data from Rystad Energy to look at the production plans of the pact’s signatories, including major state and private companies.
The analysts found out that the companies would produce 265 billion barrels of oil and 26.7 billion cubic meters of gas by 2050. This would result in 156 billion metric tons of CO2 equivalent emissions, or approximately 62% of the remaining carbon budget.
Source: Twitter.com/benmsanderson/
Among the companies that signed the pact, those with the largest carbon footprints through 2050 include ADNOC and Saudi Aramco. Together, they have a combined production of 136.4 billion barrels of oil and 5.5 billion cubic meters of gas between them.
Their projected production would emit more than a quarter of the remaining carbon budget – 64.7 billion tonnes of CO2.
ExxonMobil, Equinor, TotalEnergies, Eni, and Shell also have plans to emit as much as the European Union does in 15 years – 38.6 billion tonnes of CO2.
The Climate Challenges Beyond COP28 Promises
The findings further stir climate activists’ greenwashing claims against oil and gas companies. They have expressed concerns about fossil fuel companies prioritizing profit extraction over environmental preservation, reinforcing the perception of greenwashing.
In another analysis, the COP28 draft dropped mention of fossil fuel phase out. It instead advances the ramping up of renewable energy and efficiency measures. Campaigners stated that governments must do something urgent and concrete to phase out fossil fuels.
Concerns were raised about the portion of the industry’s emissions reduction commitments compared to the environmental impact of their products. A climate campaigner, Cara Jenkinson, Cities Manager at Ashden, remarked that:
“The only way to slash emissions from usage of oil and gas is to cut demand – governments across the world must speed up their electrification plans, with poorer nations being supported to bypass fossil fuel vehicles and ramp up clean renewable energy production.”
Responding to the concern, a spokesperson from Shell said that:
“While Shell’s targets are more comprehensive and ambitious than the Charter requirements, for example with carbon intensity targets that also cover the use of our energy products, we want to share our experience and learn as others in the industry move further along their journeys too.”
In the shadow of climate commitments at COP28, the analysis by Global Witness reveals a stark reality – oil and gas companies are to burn through 62% of the remaining carbon budget. The results raise critical questions about the industry’s true environmental costs.
Lithium, a vital elemental metal also dubbed “white gold”, has gained significant attention as a sought-after commodity. This is particularly due to its crucial role in battery manufacturing for electric vehicles (EVs).
The surge in EV sales has fueled optimism among investors regarding companies involved in lithium production and refinement. Despite being a common substance, lithium prices experienced an astounding 1,000% increase from 2021 to the end of 2022. This exceeds the previous highs set in 2017.
However, the landscape changed in 2023.
An increasing supply of lithium from mines in Africa and Australia is putting downward pressure on prices. Plus, reports of lower consumer demand for EVs in the U.S. and China may further contribute to a decline in lithium prices.
Following the unprecedented boom of 2021/2022, stocks of lithium producers have faced significant declines due to a continued plunge in lithium prices as seen above.
As with all commodity stocks, lithium stocks are intricately tied to supply and demand dynamics in the underlying materials they deal with. The future trajectory of lithium prices and associated stock values will likely be influenced by the continued demand for EVs.
Investing in top lithium stocks follows a similar process to investing in any other type of stock.
Here are our top picks for lithium stocks that are worth each penny of consideration.
Albemarle Corporation (ALB)
Market cap: US$15.1 billion
Enterprise value: US$17.1 billion
Albemarle Corp. stands prominently among the largest lithium stocks and is a key player in lithium mining. With a market value comparable to other major commodities such as Barrick Gold Corporation (GOLD).
The company’s substantial scale and the optimistic long-term forecasts for EV demand position Albemarle as one of the top lithium stocks in the current market. Albemarle has embarked on a significant production expansion initiative in South Carolina, projecting an annual capacity of about 225,000 metric tons of lithium.
The American lithium giant anticipates this capacity to triple by the 2030, aligning its growth plans and expectations for the growing EV sector.
Albemarle had warned of potential market share loss to Chinese producers after its unsuccessful takeover bid for Australian lithium producer Liontown Resources. The $4.2 billion merger was abandoned.
The largest producer of lithium for EV batteries has also revised its annual forecast downwards at the end of last year. They further reported a lower-than-expected quarterly profit due to declining prices for lithium.
Still, Albemarle now anticipates a 30% increase in lithium sales volume for the year. But with prices expected to rise only 15%, falling short of market expectations for robust growth.
The reduction in demand from consumers has led major EV manufacturers like Tesla, Ford Motor, General Motors, and Rivian to scale back production. Additionally, Toyota Motor has cut its EV sales forecast by 40% in 2024 due to lower demand in China. This reduced demand is impacting the lithium market and related stocks.
Albemarle’s peers have experienced similar declines. For instance, shares of Sociedad Química y Minera de Chile S.A. are down -39.4% YTD.
Sociedad Química y Minera S.A. (SQM)
Market cap: US$15.1 billion
Enterprise value: US$16.1 billion
Chile, globally recognized for its mineral wealth, features Sociedad Química y Minera de Chile (SQM) at the core of its mining industry. While SQM engages in the production of various minerals, its significance in lithium extraction is paramount.
Alongside diversified mining counterparts like Albemarle and Ganfeng, SQM maintains robust double-digit operating profit margins, substantial cash reserves for expansion, and minimal debt.
In 2022, SQM achieved its highest-ever corporate revenues, surpassing $10.7 billion in sales. A substantial 76% of this revenue was derived from lithium and related products.
SQM’s pivotal role goes beyond its economic contributions, as it stands as the largest taxpayer in Chile. Recent discussions about the government potentially increasing its stake in the company have emerged and raised eyebrows.
Such a move introduces the inherent risks associated with government ownership, including the possibility of political interference. Some investors don’t find it a favorable development.
The trajectory of SQM’s shares showed positive momentum until late 2022, when a decline followed. This is largely due to weakened lithium prices and concerns about the company receiving a fair valuation for the anticipated increased government stake.
The impending nationalization raises uncertainties about state control of lithium. Once this pushes through, it may impact SQM’s profitability.
Looking forward to a long-term demand for lithium to exceed supply, SQM has strategically invested in expanding its production capacity. These developments position the company to augment its market share in the lithium supply chain, particularly for EV batteries.
Li-FT Power (LIFT; LIFFF)
Market cap: US$168.5 million
Enterprise value: US$163.4 million
Given the insufficient domestic lithium reserves to meet demand, the U.S. is in a challenging position. With the need for a domestic supply, Canada is positioned to contribute to meeting U.S. lithium requirements. This is where a junior lithium company, Li-FT Power (LIFT: LIFFF), based in Vancouver, British Columbia, perfectly comes into the picture.
Li-FT has acquired promising lithium assets in Canada, starting drilling on their flagship project in June last year. The company’s investment thesis revolves around the aggressive exploration and expansion of high-grade lithium pegmatites to define world-scale resources in a proven mining jurisdiction.
The company’s strategy focuses on consolidating and advancing hard rock lithium pegmatite projects in Canada, particularly in known lithium districts. Li-FT Power aims to apply modern systematic exploration techniques to unveil value in these projects that historical work hasn’t fully realized.
The project portfolio includes assets in the Northwest Territories and Quebec, with flagship projects like the Yellowknife Lithium Project and the Pontax Project, which has revealed an 8km long lithium anomaly.
The company is well-financed to progress its projects, cementing its commitment to advancing the exploration and development of high-quality lithium assets in Canada.
LIFT strategically positions itself to take advantage of weak industry sentiment, allowing for the acquisition of shares at discounted valuations.
The Lithium Deficit Looms
While those top lithium stocks are making waves in 2024, projections indicate that lithium prices will further decline due to:
In China, lithium carbonate prices have plummeted from an all-time high of $81,360 per tonne in November 2022. This is the lowest level in two years at $20,782 per tonne in the current month. As lithium carbonate prices have fallen by 67% year-on-year, Chinese refining companies are responding by cutting production or suspending operations.
This represents a nearly 75% correction due to a series of negative catalysts that have suppressed lithium prices. The situation is even more challenging for lithium hydroxide markets, primarily due to the sluggish performance of the nickel cobalt manganese battery sector compared to the lithium iron phosphate battery sector.
Australia, which contributes 40% of global lithium production, expects a decline in the spot price of spodumene from around $3,840 per tonne in 2022 to $2,200 per tonne in 2025.
Lithium miners are adjusting to the sharp drop in demand for EVs in China by reducing costs and scaling back production expansion plans.
This response aligns with the challenges faced by lithium producers globally as the market grapples with oversupply and weakening demand for EVs.
The inability of China to meet its own demand for lithium, despite being the world’s 3rd-largest producer, has significant implications for other countries that rely on Chinese lithium. This is why the US aims to develop its own lithium supply chain that doesn’t depend on China.
The Inflation Reduction Act, in particular, specifically promotes onshoring of clean energy manufacturing, including EVs, within the U.S. And that also means to reduce or cut off import of lithium from China.
Corinne Blanchard, Deutsche Bank’s director of lithium and clean tech equity research, is among the analysts predicting a future shortage in the lithium industry. Despite forecasting supply growth, she believes that demand will outpace it at a much faster pace.
Blanchard anticipates a “modest deficit” of around 40,000 to 60,000 tonnes of lithium carbonate equivalent by the end of 2025, but she foresees a much larger deficit of 768,000 tonnes by the end of 2030. This forecast aligns with the broader industry expectations of increasing demand for lithium, particularly driven by the growing EV market.
2024 unfolds with challenges for the lithium market, witnessing stock declines post 2023’s meteoric rise. Despite the setback, top players like Albemarle, SQM, and Li-FT Power strategically position themselves. As global trends hint at a Chinese lithium market decline, industry experts see a future lithium deficit, driven by the relentless growth in the EV market.
Disclosure: Owners, members, directors, and employees of carboncredits.com have/may have stock or option positions in any of the companies mentioned: LIFFF.
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The voluntary carbon market (VCM) witnessed both considerable progress and significant hurdles in 2023 as reviewed by the MSCI Carbon Markets in its recent webinar.
The review includes key developments from 2023 and the potential inflection points to watch out for in 2024. Notably, the findings show that 2023 has the lowest number of credits issued in 3 years. In contrast, the year ended with a record number of monthly retirements.
Here’s a recap of the webinar, focusing on carbon credit issuances and retirements, demand, key market players, investment, major policy developments, and 2024 outlook.
Peaks, Valleys, and 2023’s Record Retirements
In 2023, credit issuances recorded the lowest annual total in 3 years after falling 25% year-on-year, as seen below. This slow down in supply was largely due to Nature-based and renewable energy projects issuing their lowest annual amounts in 5 and 4 years, respectively.
On the other hand, energy efficiency projects were the only major type to increase credit supply. It doubled in 2022 volumes, primarily driven by cook stove projects.
The MSCI report saw retirements rallied in Q4 2023, the second highest quarter on record. And that’s despite the slow down in corporate activity in mid-year. This momentum seems to have been carried into January this year.
In fact, that’s the second highest January to date and may even exceed the 17 MtCO2 set in 2022. December 2023 alone has seen 36 megatons of credit retirement, setting a new monthly high, around 25% above the previous high record.
When it comes to registries, the four largest, namely Verra, Gold Standard, ACR, and CAR continue to dominate the market. They provide more than 90% of the credits retired last year.
Retirements from these “Big 4” registries actually rose last year by 6%, while retirements across the next ten prominent names dropped slightly in 2023.
The Top 10 Credit Retirees
Of the top 10 retirees, Delta Airlines aced the first spot. They were also the largest retiree corporate in 2021 and 2022. While some of these companies exited the top 10 last year, others remain while new ones entered the market.
Shell topped the list in 2023 with around 16 million metric tonnes, followed by Volkswagen with over 8 MtCO2e. Overall, there are more joiners than leavers last year when it comes to retiring credits.
Unlocking the Nascent Carbon Removal Market
Gaining a lot of interest in 2023 is the nascent CDR market, referring to high permanent engineered carbon removals. These include biochar and direct air capture, which usually command a premium price than other project types. That’s because they’re known to be of higher quality and high durability.
Last year, the number of CDR transactions fell slightly year-on-year. But the quantity of credits, represented by the right hand chart, increased significantly to 5.4 million.
Navigating the Ups and Downs of Carbon Credit Prices
The declining trend in 2022 was carried over into the first half of 2023. But looking at the average level, the drop wasn’t that much. It was only 16% lower in 2022 compared to 2023.
In terms of price by project type for last year, all of them were lower in Q4, resulting in full year price declines. REDD+ projects saw the least drop, 15%, while renewable energy experienced the largest price decrease, 39%.
Both energy efficiency (pink line) and REDD+ (green line) projects were subject to increased media and academic scrutiny in 2023. They sustained weaker prices.
Interestingly, both nature restoration and non-CO2 gasses projects rebounded in November and December last year. Meanwhile, energy efficiency, REDD+, and non-CO2 gasses converged around the same price level at $4.65 by the end of the year.
This suggests that the market is not distinguishing between these project types, potentially signaling a weak market environment.
Policy Developments in 2023: From EU Directives to COP28’s Uncharted Territories
Last year also saw some major policy developments. For instance, the EU’s green claims directive aims to empower consumers for the green transition directive. It bans claims of neutral, reduced, or positive climate impact based on carbon offsetting, on the grounds that it’s a misleading consumer practice.
Moreover, the VCMI carbon integrity claims, the Claims Code of Practice (CCPs), is a significant regulation for the VCM.
There are also landmark regulations of market trading and standards wherein national governments are stepping in. For example, the US Commodity Futures Trading Commission (CFTC) introduced proposed guidance for trading of voluntary carbon credit derivative contracts.
In the Global South, there has been growth in national carbon credit markets while carbon pricing systems and schemes are being proposed in several African countries. Amid increased scrutiny in carbon credits certified by Verra, the leading carbon certifier updated its standards.
At the COP28 climate summit, carbon markets find their footing amid Article 6 frustrated talks. Article 6.2 rules are mostly in place but there’s a lack of Article 6.4 agreement on key steps. Disagreements centered on integrity concerns, yet Article 6 agreements are moving ahead.
Looking forward, MSCI Head of Carbon Markets, Guy Turner, raised a pertinent question: “Could we be at an inflection point for the market in 2024?”
There could be a number of inflection points, five in particular.
The potential new sources of demand driven by CORSIA, VCMI, SBTi, and more compliance markets in near and long term.
Quality initiatives moving into implementation.
Jurisdictional approaches are starting to take off – whether by governments or donor institutions. High interests are observed in jurisdictional soil carbon and blue carbon.
Increasing clarity for corporations on claims and disclosures on the use of credits, with the EU and UK taking the lead.
Macroeconomic cycle turning but political uncertainties
In the ever-evolving landscape of the voluntary carbon market, 2023 marked both triumphs and challenges. From record retirements to the rise of CDR investments, the market navigated uncertainties. As 2024 unfolds, potential inflection points await, shaping the future trajectory of the global carbon market.
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