No Net Zero Without Uranium: Here’s Why

In the realm of clean energy, uranium-powered nuclear plants often take a back seat to solar and wind, yet they stand as the second-largest low-carbon electricity source globally. Nuclear energy operates emission-free, mitigating carbon dioxide and curbing harmful air pollutants. It’s not just an alternative; it is pivotal to global clean, sustainable energy transition – the key for net zero emissions.  

In this article, we’ll explore the uniqueness and the driving forces behind the resurging interest in nuclear energy. This means delving into the uranium sector, an emerging bullish market and why it’s crucial for a net zero world. 

Moving Away From Coal With Nuclear Energy

Transitioning from coal to cleaner energy sources is a pivotal step in addressing climate change. 

For centuries, coal was the cornerstone of the industrial revolution, but its combustion accounts for over 40% of global carbon emissions. It’s also responsible for 75% of electricity generation emissions in 2019, as per the International Energy Agency (IEA)’s data. 

To align with the Paris Agreement’s objectives of curbing global warming below 1.5°C, phasing out coal is imperative.

The shift toward clean energy involves pivoting from high-emission sources to low-carbon alternatives to mitigate climate impacts. This energy transition aims to eliminate reliance on fossil fuels, amplifying renewable options such as hydro, solar, wind, and nuclear power. 

An excellent example of this transition is Ontario, which has been coal-free since 2014, primarily harnessing nuclear and hydro energy to power its grid sustainably.

Both coal and nuclear power plants operate using steam-driven turbines to generate electricity. Despite coal accounting for roughly ⅓ of global electricity generation, nuclear energy stands out for its capability to provide consistent baseload power, effectively supplementing intermittent renewable sources like solar and wind.

World Total Electricity Production by Energy Source

world total electricity production by source
Source: International Atomic Energy Agency

Back in 2003, Ontario pledged to phase out a quarter of its electricity generation by decommissioning nearly 9000 MW of coal capacity. To achieve this, the province refurbished nuclear units and integrated a mix of renewables and natural gas. Doing so allowed the Canadian province to successfully attain over 90% carbon-free electricity. 

It’s a testament to the feasibility of transitioning away from coal toward cleaner, more sustainable energy sources like nuclear. 

The adaptability of nuclear power plants in adjusting output according to demand and the availability of other energy sources adds resilience and stability to the grid, particularly in supporting variable renewables.

The recent report by the United States’ Department of Energy on nuclear power highlighted the potential to convert over 250 GW of coal capacity in the U.S. into nuclear power, effectively doubling the existing nuclear capacity. 

Moreover, the DOE’s analysis revealed various benefits for communities near the coal plants considering such a transition. This includes the creation of 650 jobs, generating $275 million in economic activity, and an 86% reduction in GHG emissions.

Deputy secretary, Andrew Griffith, noted that the expertise and skills learned from operating coal plants could be adapted to nuclear power. He further underlined that this potential extends beyond just integrating into the electricity grid, as some reactor concepts can also offer applications in industrial heat.

The agency also emphasized the multi-dimensional benefits that nuclear power could offer for the energy transition. 

Nuclear as Clean and Sustainable Energy Source

When the term “clean energy” is mentioned, most individuals tend to immediately think of solar panels or wind turbines. However, nuclear energy, often overlooked in these discussions, stands as the second-largest source of low-carbon electricity globally, trailing only hydropower.

To understand the cleanliness and sustainability of nuclear energy, consider these three key points:

  • Zero Emissions and Air Quality Protection: 

Nuclear energy is a zero-emission clean energy source. It operates via fission, splitting uranium atoms to generate energy. The resulting heat drives turbines for electricity production without emitting harmful byproducts present in fossil fuels. 

In 2020, the United States avoided over 471 million metric tons of carbon dioxide emissions through nuclear energy, surpassing the collective impact of all other clean energy sources combined. 

  • Small Land Footprint: 

Despite generating substantial carbon-free power, nuclear energy requires minimal land compared to other clean sources. A standard 1,000-megawatt nuclear facility in the U.S. operates on slightly over 1 square mile. 

In comparison, wind farms require 360x more land area, while solar plants demand 75x more space to produce equivalent electricity. In other words, millions of solar panels or hundreds of wind turbines are needed to match the power output of a typical nuclear reactor.

  • Extremely High Energy Density with Minimal Waste: 

Nuclear fuel boasts an incredibly high energy density, nearly 1 million times greater than traditional energy sources. Consequently, the volume of used nuclear fuel isn’t as extensive as commonly believed. 

Putting that in perspective: all the used nuclear fuel produced by the U.S. nuclear energy sector over 6 decades could fit within the dimensions of a football field at a depth of less than 10 yards. 

This waste can potentially be reprocessed and recycled, although this isn’t currently practiced in the U.S. However, emerging advanced reactor designs aim to operate on used fuel, offering promising solutions.

Consider the following facts. They underscore the significance of nuclear energy in the realm of clean and sustainable power generation.

facts on nuclear energy
Source: https://www.energy.gov/

Uranium Bull Market is Emerging

Delving into the current market scenario, it helps to consider the historical context of the past decades. 

Going back to the ‘60s and ‘70s, these were the pivotal periods when nuclear power stations were extensively built. These years marked the initial rise in demand coinciding with the emergency of nuclear technology. 

Unfortunately, a series of accidents, Three Mile Island and Chernobyl, led to nuclear downturn that put many projects on hold. This downturn persisted for about two decades. 

Fast forward to the early 2000s, the climate change challenges start to kick in, particularly the increasing greenhouse gas emissions. This moment was dubbed the Renaissance of nuclear energy when new projects were revealed. Consequently, this resulted in a spike in 2007 as shown in the chart. 

uranium prices 2000-2009

Then there has been a gradual but consistent uptick in uranium prices since 2019. Notably, this trend showed investors’ interest resurging due to the perceived potential in uranium investments. And a few days ago, uranium spot prices hit a 15-year high at $85 per pound. 

uranium price at 15-year highAnalysts even forecast more increases in prices, confirming that a uranium bull market is approaching, if it hasn’t come already. This makes GoldMining Inc (GLDG)’s uranium project even more valuable. As one of the companies making waves in the uranium market, GoldMining Inc brings exposure to one of the most exciting uranium exploration regions in the world.

How Does Uranium Help Achieve Net Zero Emission?

Uranium plays a significant role in the quest for achieving “net zero emissions“. It boasts a feature lacking in some renewable energy sources – capacity to provide reliable baseload energy production. 

While solar, renewables, and hydroelectric power receive continued investment due to their eco-friendliness, they face challenges in delivering consistent energy output. For instance, solar energy is inactive at night, and wind turbines remain idle when there’s no wind. Recent occurrences, such as lower wind speeds in the United Kingdom resulting in decreased turbine energy production, have forced a shift to natural gas.

Although natural gas is a cleaner energy source compared to coal or oil, its carbon footprint remains notably higher. Surprisingly, a substantial portion of the world still heavily relies on coal for electricity generation. 

In the United States, for instance, 19% of energy production persists from coal. Even in China, despite significant strides in reducing reliance on coal from 70% to 57% over a decade, there’s a fervent drive to further diminish this figure. This fuels China’s leadership in expanding nuclear capabilities as an alternative to coal.

Regardless if it’s coal or natural gas, it doesn’t matter. Nuclear is nearly 100% more effective than any other energy technology at reducing carbon emissions.

1. Amount of Fuel Fossil CO2 Generation Displaced by nuclear

These developments resonate strongly with investors, particularly in the context of Environmental, Social, and Governance (ESG) considerations. Many investors view nuclear energy as a low-carbon means of energy production, aligning with ESG principles. The rising importance of ESG considerations has sparked newfound interest in evaluating nuclear energy’s place within this framework.

Overall, the reliability and low-carbon nature of nuclear energy underscore its significance in pursuing cleaner and dependable energy solutions. There’s simply no reaching net zero without nuclear, and so uranium, too. 


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

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

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

Please read our Full RISKS and DISCLOSURE here.

Goldman Sachs Research Says Global Net Zero Journey Reaches a Critical Turning Point

0

According to Goldman Sachs Research, the push to bring the global economy to net zero emissions is reaching a turning point. Certain clean technologies like solar and batteries have experienced shifts in their costs in 2023; some become more costly while others become more financially accessible, enhancing the affordability of decarbonization. 

Riding the Cost Waves: 2023’s Clean Tech Shifts

Goldman Sachs’ analysis of the Carbonomics cost curve for 2023 reveals the influence of reduced energy prices coming from fossil fuels. This can consequently increase the cost of renewable energy sources. 

Goldman Sachs Research cost curve

Moreover, rising interest rates have also made construction expenses for projects most costly such as offshore wind energy. On the other hand, declining battery costs and the benefits of scaling up production of electric vehicles have made these technologies more economically viable. 

Michele Della Vigna, leading Natural Resources Research in Europe, the Middle East, and Asia at Goldman Sachs Research, highlights a pivotal shift in the affordability of clean technology. He stated that:

“From here on, the deflationary forces [solar and batteries] are likely to win, and this brings back an affordability to the decarbonization path that not only accelerates it but makes it more attractive to the consumer.”

As per their analysis, the result shows a consistent flattening of the cost curve since 2019. The 2023’s curve suggests that the cost to remove 75% of planet-warming emissions remains the same from 2022. 

cost curve

The 2023 results also show an increase in costs in the lower half of the cost curve. This is largely due to increasing interest rates and cost inflation. While the impact of these factors overall is limited, they drive 25% increase in the renewable power sector. 

2023 carbonomics cost curve

Additionally, a significant improvement in battery costs for the transport sector made the high cost decarbonization more affordable. The sector gets 30% cheaper with improved batteries, lower raw material costs, and simpler cell-to-vehicle integration. 

carbonomics cost curve

Balancing Policy Support and Climate Goals

Looking ahead to 2024, a significant aspect to monitor will be the level of policy support for decarbonization. Though policy support reached $500 billion through the Inflation Reduction Act (IRA), political uncertainties and delays in certain areas may cause project delays. 

Still, Della Vigna expects increased investment from the financial and corporate sectors. This surge in investment will focus on areas of decarbonization that are becoming more accessible and cost-effective. Solar installations and electric vehicles, in particular, stand out in their analysis. 

However, the investment and spending currently in place may not be enough to achieve climate goals, Della Vigna added. If the goal is to keep global warming well within 1.5 degrees Celsius, then the world remains off course. 

He noted that over the past year, global emissions have risen by 1%, reaching an all-time high. Coal demand has surged by 3%, and there has been a substantial $1 trillion worth of direct incentives for hydrocarbons. These trends don’t align with the pathway to achieve the 1.5-degree scenario. 

Moreover, the world is now at the midway point between the 2015 Paris agreement and its 2030 targets. Summing up all the government commitments to decarbonization, the outcome leads to flat, not declining, emissions. 

But for the 1.5-degree scenario, emissions would need to decrease by more than 50% by 2030. This stark contrast highlights the significant deviation from the required path to meet the climate objectives.

The Game-Changing Announcements at COP28

When it comes to the recently concluded COP28 climate conference in Dubai, there are three announcements that have the most impact to the market, per Della Vigna:

First is the growing green capex in the Gulf Coast region, estimated by Goldman Sachs Research to be over $600 billion over the next decade.

Next is the commitment to ramped up renewable power generation, which can improve affordability of clean technologies. The IEA’s updated Net Zero Roadmap shows that tripping global installed renewable energy capacity to 11,000 GW by 2030 will achieve the most emission reductions. 

Last is the Oil and Gas Decarbonization Charter formed by 50 companies, targeting zero methane emissions and ending routine flaring by 2030.

Goldman Sachs’ 2023 Carbonomics analysis reveals a pivotal moment in global net zero journey. Fluctuating costs in clean tech pose challenges—lower fossil fuel prices raise renewable energy expenses while rising interest rates affect construction. Yet, falling battery costs and EV expansion boost viability while solar and batteries driving affordability accelerates decarbonization.

Novel Nuclear Reactor Gets U.S. Approval After Half a Century

0

For the first time in over half a century, the US has granted permission for a novel nuclear reactor, signalling a growing openness among regulators toward diverse methods of generating power from nuclear fission.

California-based startup Kairos Power secured a construction permit from the Nuclear Regulatory Commission (NRC) for its Hermes demonstration reactor in Tennessee. 

In contrast to current commercial reactors that use water for cooling, Kairos’s technology employs molten fluoride salt as a coolant.

How Traditional Nuclear Reactor Works

The main function of the reactor centers on controlling nuclear fission, a process where atoms split and release energy.

Reactor fuel primarily contains uranium, processed into ceramic pellets and enclosed in sealed metal tubes known as fuel rods. These rods, often bundled together, form a fuel assembly. 

A typical reactor core houses hundreds of these assemblies, varying with power capacity.

Within the reactor vessel, the fuel rods are submerged in water, serving as both coolant and moderator. The moderator slows down the neutrons generated by fission, sustaining the chain reaction. The heat generated by fission converts water into steam, driving turbines that generate clean electricity.

All commercial nuclear reactors in the U.S. are light-water reactors, employing ordinary water as both coolant and neutron moderator. Over 65% of U.S. commercial reactors are pressurized-water reactors (PWRs), circulating water under high pressure within the reactor core to prevent boiling.

Amidst the global drive to accelerate nuclear power deployment in the battle against climate change, regulatory processes have historically hindered the approval of new reactor designs.

According to Mike Laufer, Kairos Power’s CEO, the NRC has the potential to approve unconventional approaches. He also said in an interview that the regulatory pathway “doesn’t have to be a barrier.”

Kairos is one of numerous companies striving to market designs that can be manufactured in facilities and set up on-site. The company claims it to be swifter and more cost-effective compared to the conventional large-scale reactors available today.

How Kairos Reactor Technology Works

Kairos Power’s innovative reactor uses molten fluoride salt as a coolant, a departure from conventional water-cooled nuclear reactors. These salts have remarkable chemical stability and exceptional heat transfer capabilities at very high temperatures. 

Kairos Power new nuclear reactor
Image from Kairos Power website

Studies conducted on U.S. reactor designs confirm the compatibility of molten fluoride salts with standard high-temperature structural materials. This is to ensure reliability and a prolonged service life, thus further enhancing commercial viability.

The reactor employs fully ceramic fuel that maintains its structural integrity even under extremely high temperatures.

The U.S. National Laboratories have successfully demonstrated fabrication and testing methods for these fuels. 

By using pebble-type fuel, Kairos Power reactors enable online refueling for reliability and operational availability. 

Moreover, the reactor adapts a model-to-learn approach to optimize the transition to clean energy. This adaptive strategy promises cost reduction while allowing development of innovative nuclear technologies that can revolutionize the global energy landscape.

Kairos advanced reactor is a type of small nuclear reactor (SMR). The International Atomic Energy Agency (IAEA) defines ‘small’ as under 300 MWe capacity. Present-day large conventional reactors typically boast around 1,000 megawatts of capacity.

The New Era of Nuclear Power

SMR development is taking place in Western countries with growing private investment. The involvement of these small investors indicate a significant shift happening from public-led and -funded nuclear R&D to private-led. The goal is to deploy affordable clean energy sources without harmful carbon emissions.    

small nuclear reactor in development globally
Source: world-nuclear.org

In 2020, the Department of Energy announced initial $30 million funding support for 5 US-based teams developing affordable reactor technologies. One of them is Kairos Power for their Hermes Reduced-Scale Test Reactor, a scaled-down version of its fluoride salt-cooled high temperature reactor (KP-FHR). 

Kairos plans to begin construction on its $100 million initiative next year and anticipates completing the system by the end of 2026. 

The objective is to showcase the viability of its design and the molten salt technology, potentially offering safety advantages over water-cooled systems. Laufer highlighted that the last non-water-cooled design approved in the US was back in 1968.

While Hermes itself won’t generate electricity, it’s considered as a precursor to the Hermes 2 project. This next phase would involve two similar reactors capable of producing a combined output of approximately 28 megawatts of electricity. 

  • The NRC is currently evaluating the company’s application for a construction permit for this venture.

Kairos’s ultimate vision involves a commercial endeavor featuring two larger reactors with a capacity exceeding 100 megawatts. However, Laufer indicated that it’s premature to speculate on the timeline for developments beyond the initial Hermes plant. He further noted that:

“We’re developing a technology that will be highly scalable. Affordability is really about being able to scale up.”

With the recent regulatory approval for its Hermes demonstration reactor, Kairos ushers in a new era of cleaner, safer, and scalable nuclear power. This innovative approach holds promise for addressing climate change by leveraging efficient, affordable, and sustainable energy sources.

COP28 Draft Drops Mention of Fossil Fuel Phase Out, Advances Renewables

0

A draft sheds light on the ongoing discussions and proposals within the United Nations climate talks, COP28, emphasizing the urgency to establish a global agreement aimed at phasing out fossil fuels while ramping up renewable energy and efficiency measures. 

The draft highlights the need to use more renewables like wind and solar power and reduced use of energy, but drops the direct mention of fossil fuel phase out.

Over a 100 countries came to Dubai to support the phase out. If the draft would not get widespread support, negotiators may have to debate again. The text brings the following notable aspects to the fore:

Exploring Bold Objectives for Renewable Energy & Efficiency

Last year’s COP27 marked a milestone as it was the first time a COP decision specifically addressed coal. But despite attempts by 80+ countries at COP27 to expand this to encompass all fossil fuels, their efforts were thwarted by a handful of opposing nations.

fossil fuel phaseout attempt at COPBuilding upon this foundation, COP28 introduced ambitious objectives: to triple renewable energy capacity and double energy efficiency enhancements by 2030.

That translates to 11,000 GW of renewable energy and an average annual rate of energy efficiency of 4.1%. This reflects a commitment backed by 123 countries in a recent pledge, outlining the immediate need for a rapid transition.

renewable energy capacity in NZE 2022, 2030
Source: International Energy Agency 2023 Net Zero Roadmap

However, concerns arose regarding a paragraph in the agreement advocating for scaling up abatement and removal technologies such as CCUS. The scientific community highlights the limitations of these technologies, e.g. scalability and affordability, in fighting climate change.

Weighing Options for Fossil Fuel Exit

The COP28 debate intensifies with two options presented for the phaseout of fossil fuels. 

Option 1 emphasizes a straightforward approach: “An orderly and just phase out of fossil fuels”. Option 2 invites the potential to phase out “unabated fossil fuels” and “rapidly reducing use to achieve net-zero CO2 in energy systems by or around mid-century”.

Climate experts pointed out that separating the discussions on scaling up renewables and efficiency from fossil fuel phase out raises an issue. They said that parties need to unify these aspects into a cohesive strategy centered on replacing fossils with renewable alternatives.

Emphasis on accelerated coal phase out gains support but is not enough without addressing oil and gas, experts add. Failure to include all fossil fuels will be deemed ineffective and inequitable, underscoring the need for a comprehensive approach.

But the agreed option at COP28 only noted coal while leaving out oil and gas:

“…the IPCC suggests a pathway involving a reduction of unabated coal use by 75% from 2019 levels by 2030”.

One specific area that speaks of clearly moving away from fossil fuels is in the transportation sector. “Rapidly increasing the deployment pace for zero-emission vehicles” (ZEVs). This involves putting an end to fossil fuel-powered vehicles. 

Several alternatives currently exist for ZEVs, including battery-powered vehicles and hydrogen-powered vehicles.

Still, there remains the need to broaden discussions beyond electric vehicles to include public and active transportation, too.

The Need for Financial Backing

When it comes to financial support, substantial money is a must to phase out fossil fuels. Interestingly, the current draft’s text specifying financial support only adopts the COP27 agreement, as seen below. 

clean energy investment by 2030 COP28Earlier this year, BloombergNEF reported that global clean energy transition investment rose by 31% in 2022, at $1.1 trillion. Renewable energy and electrified transport sectors got the most funding. 

global investment in clean energy transition by sector 2022

While that’s quite an achievement, more funds are needed (>$3 trillion) until the decade’s end to reach net zero emissions. This means strengthening the current draft’s financial support package for a successful fossil fuel phase out. 

Finally, there are suggestions to integrate energy transition considerations into Nationally Determined Contributions (NDCs) and long-term strategies under the Paris Agreement. This underlines the interconnectedness of climate goals and energy transitions. 

As COP28 progresses, clearly addressing the fossil fuel phase out language will be critical in shaping an effective and equitable energy package the world needs to steer toward a decarbonized and sustainable future. 

Uranium Prices Hit 15-Year High at $85 Per Pound

Uranium prices are a significant topic for investors, policymakers, and energy enthusiasts given its role in the global energy landscape. The uranium spot price is at 15-year high due to strong market demand and bullish long term outlook, confirming analysts’ forecast of a major sector rally. 

As technology progresses, the demand for effective energy sources grows. Uranium holds a key position in generating nuclear power, making it a standout energy resource. 

The Powerhouse Driving Nuclear Energy Revolution

Uranium Spot Price USD/Pound

uranium price at 15-year high
Source: numerco.com

The 15-year high uranium price at $85 per pound, the highest since January 2008, is influenced by several factors.  

Basically, supply and demand dynamics do impact uranium prices. Rising nuclear power adoption also drives demand up while mining challenges and political tensions affect the supply side. 

From 2019 onwards, the uranium market experienced a shortage in supply, depleting the surpluses accumulated since the Fukushima incident in 2011. This scarcity drove prices upward owing to limited availability.

Amid the soaring prices, mining uranium is costly; production expenses directly impact prices. Higher production costs set a price floor as miners avoid selling below production expenses.

National and global regulations also affect uranium markets. Stringent safety and environmental standards raise production costs, while policies supporting clean energy can stimulate demand.

The strong demand for uranium is further driven by its role in achieving net zero emissions and geopolitical risks. This prompted utilities to buy more than 150 million pounds of uranium in 2023, a record high since 2012.

It’s worthy to highlight that uranium prices aren’t just a number; it reflects the shifting global energy landscape. In addressing climate change and ensuring energy security, uranium continues to hold a critical role in the global energy mix.

  • Currently, there are 440 nuclear power plants across 33 countries, jointly contributing 10% of the world’s electricity supply. Moreover, plans are in place for an additional 90 nuclear reactors, while proposals exist for over 300 more.

The International Energy Agency stresses the necessity of doubling the size of the nuclear industry within the next two decades to meet net zero targets. 

Right now, around 400 nuclear reactors are operational worldwide, highlighting the anticipated growth and importance of nuclear energy in the future energy landscape.

Decarbonizing the Global Energy Matrix

At the recently concluded COP28, a pivotal decision emerged: to triple nuclear energy capacity by 2050. It marks a substantial victory against emissions, which is not surprising. 

Nuclear energy offers a high-output, low-carbon alternative to fossil fuels, a crucial step in reducing global warming.

A significant commitment has been made by the COP28 climate negotiators to boost nuclear energy by mid-century, aiding global decarbonization. The United States also joined the effort, signaling increased backing and potential funding for nuclear projects worldwide.

In addition to growing demand, there is also an influx of investment into the sector. Key players like Google and BNB Paribas are betting on nuclear, presenting a broader investment landscape in nuclear energy

Finally, the International Atomic Energy Agency (IAEA) also fully supports the nuclear movement, bolstering confidence in nuclear power. 

This significant shift signals a turn towards cleaner, more reliable, and cost-effective energy sources. With major nations like the U.S. onboard, significant government support and investment opportunities are anticipated in this growing market.

A comprehensive industry report also estimates that the global uranium market would reach an impressive $1,600 million by 2027. That represents a growth rate of over 7% from 2023. 

Rising Uranium Prices’ Impact on Energy Shift

Nuclear is remarkably efficient, cutting CO2 emissions by nearly 100%, whether replacing coal or gas. 

1. Amount of Fuel Fossil CO2 Generation Displaced by nuclear

There would be net zero without nuclear. Understanding its price trends is pivotal, not only for the nuclear sector but also for the global energy direction.

While uranium prices are still below the all-time high of $136/lb. in 2007, there’s a strong optimism for record-breaking highs in the current bullish market. With rising investor attention, soaring demand, and focus on energy security, more increase in uranium prices is very likely.

Moving forward, multiple factors are poised to impact the uranium price, notably the role of nuclear energy in combating climate change globally. Corporate endeavors and government policies aimed at emission reduction play a pivotal role in this regard. 

Despite criticism, nuclear power emerges as a credible option for providing consistent and substantial energy on a large scale as nations seek to curb carbon emissions.

We featured a very unique, fast moving company, GoldMining Inc (GLDG), and this price development is great news for their high-value assets. It’s one among the companies making waves in the uranium market.


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

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

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

Please read our Full RISKS and DISCLOSURE here.

BREAKING: The US House Passed a Bill that just Repatriated the Nuclear Cycle from Russia’s Control

You probably couldn’t pick Kazakhstan out on a map—even though it’s the ninth-largest country in the world.

But Kazakhstan is a superpower in its own right.

This little-known former Soviet state hosts seven of the twelve largest producing uranium deposits in the world.

Kazakhstan, using American technology, went from producing 1 million pounds annually to over 46 million pounds annually in 20 years and becoming the world’s largest producer of uranium.

In 2022, it was the top uranium producer, mining 43% of the world’s uranium at 46.8 million pounds. To put that in context: Kazakhstan produced more uranium than the next four countries combined.

uranium producing countriesThe renewed proliferation of nuclear power around the world has made Kazakhstan a hot commodity.

Only it hasn’t controlled its own uranium destiny.

Kazakhstan needed two crucial things to be able to secure a pathway to monetization of its uranium riches:

  • uranium refinement and enrichment infrastructure, and
  • trade agreements to access uranium sales to utilities around the world

Russia took quick advantage of Kazakhstan’s plight, providing both trade routes and uranium processing infrastructure. Certain companies in the west, like Cameco, took advantage also, which we will get to later.

  • For the last three decades, one-third of global uranium supply has been under the control of Rosatom, the state-owned Russian company created under the Russian President, Vladimir Putin’s watch.

But this is now changing in real time…

Russia has tried to implement a different kind of nuclear warfare: control over the energy security of the United States.

You see, Rosatom provides nearly one-third of the enrichment services and one-fifth of the uranium for U.S. nuclear power plants.

Currently, we’re reliant on Russia for nuclear fuel.
– former ExIm Bank Advisor Rich Powell

What does that mean?

1 in every 10 homes in America is powered by Russian enriched uranium.

Russia has repeatedly demonstrated its willingness to use that reliance as leverage—as when it threatened to cut off nuclear fuel access in 2014, or when it did cut off natural gas supplies to Europe in 2022.

That alone is a grave national security threat to the U.S. But it gets worse…

The uranium that Russia doesn’t have direct control over is rapidly coming under the domain of another country—one that is even more likely to use it as a weapon, China.

Never Wake a Sleeping Giant

In the last decade, China has increased its nuclear power generation by 400%. And they’re somehow still accelerating their nuclear buildout.

Currently, one-third of global nuclear reactors under construction in the world are in China.

And they’re planning to build at least 100 more.

It’s all part of a plan to become the largest producer of nuclear power in the world in just seven years.

But China has struggled to produce the uranium required to fuel those reactors. In 2023, it’s expected to mine just 15% of its domestic uranium demand.

And its uranium resources are rapidly shrinking.

Chinese Uranium Resources Declining
Chinese Uranium Resources Declining

At the current rate of decline, China’s entire uranium resources at any price point will last less than a decade. And that’s if it builds zero new reactors.

China is well aware that to secure its economic growth it must be able to secure lower cost clean base load energy.

Has America lost its Nuclear Advantage?

US Domestic Uranium Production

  • The U.S. could power about four of its nuclear reactors with domestic uranium production.

The other 92 require imported uranium.

From where? Mother Russia.

In 2021, 54% of U.S. uranium purchases came from Russia or former Soviet states (Kazakhstan and Uzbekistan).

The U.S. can’t buy more from Canada and Australia, the other two main producers as those nation producers have sold and hedged their production in long term contracts.

China has bought the dragon’s share of uranium in every other major producing country.

Here’s the bottom line…

  • If the U.S. does not immediately build a domestic uranium industry,
    Russia and China could easily destroy the United States’ secure supply of nuclear power.

U.S. leadership, including Trump, Biden, Congress, and the Secretary of Energy, recognizes the danger this presents.

Energy Secretary Dan Brouillette says that the current state of uranium production “threatens our national interest and our national security.”

So last year, a bill was introduced in the House and Senate: the National Opportunity to Restore Uranium Supply Services In America Act of 2022.

In case you missed the acronym, the bipartisan message is loud and clear: NO RUSSIA. Russia’s influence will be expelled from the U.S. uranium market.

Almost 30 years to the day that the Russian US HEU agreement was inked in Washington DC, Senator Joe Manchin introduced Bill S.452 on February 2, 2023.

If passed in Senate, it would require the Secretary of Energy to establish a Nuclear Fuel Security Program.

The bill passed the House and is expected to pass the Senate then requires president’s signature.

The U.S. government has officially reset the domestic uranium industry. And with that, power 91 nuclear power reactors that in total require over 50 million pounds of uranium to run rain or shine, day or night and supply its military nuclear fuel needs.

We have found a “value investors dream”.

This company we are highlighting in the report below has in the past valued the portfolio at almost a $1 Billion valuation.

Today, the company enterprise value (Market price minus cash and equitable securities) can be obtained for less than $30 Million.

Yet, just one of its assets, a uranium asset in the highest grade producing region in the world would be valued at $75 Million using a comparable peer valuation based on the $600 per hectare valuation the bankers just valued a large three way merger in the same mining district.

This is rare, unique and how one goes about value investing in the Energy Transition by finding discount to current value with considerable value in low risk jurisdictions that will benefit from Americas Nuclear Renaissance and Energy Transition.

Click here for a full report on the company.

Never bet against America, but rather benefit from America’s greatness.

Regards,

The www.carboncredits.com Team

Forest Carbon Offsets: Everything You Need To Know

As the world continues to grapple with climate change, forest carbon offsets have emerged as a promising solution. By preserving and protecting forests, we can capture and sequester carbon from the atmosphere, reducing greenhouse gas emissions. Not only does this benefit the environment, but it also creates economic opportunities for communities that rely on the forest for their livelihoods.

Introduction to Forest Carbon Offsets

For years, companies have been given an option to deal with their environmental impact: cancel out their carbon pollution by paying for efforts that protect the forests. That’s essentially the idea behind forest carbon offsets.

If you’re a landowner who wants to earn extra from keeping your trees standing, forest offsets suit you well. Or perhaps you’re a company owner willing to support forest protection initiatives, forest carbon offsets are perfect for you. 

Either way, let’s help you understand everything you need to know about this kind of carbon offset credit. From providing a detailed explanation of it to identifying its benefits and how to purchase it for your offsetting needs. 

What are Forest Carbon Offsets?

Forest carbon offsets involve a process where a forest, at risk of being chopped down or for other purposes, is protected in exchange for payment. This payment goes to the forest owner, which could be a government or private landowner, to prevent deforestation.

Once the owner and buyer close the deal, the forest area becomes a “carbon credit project.” Their agreement involves a commitment not to cut down the trees or be destroyed by fire. The organization or person managing this project sells these commitments and takes a portion of the money earned. 

On the other side, a company that pollutes can buy these credits to neutralize their emissions by a certain amount.

Trees are excellent at storing carbon in their structure, so when a tree grows larger, it can hold more carbon. This carbon storage also happens in soils and other vegetation. 

However, when a tree is cut down, the carbon it stores is released into the air. If the tree is used for timber, some carbon remains stored, but a significant portion is released into the atmosphere.

forest tree chop downA forest carbon offset, therefore, represents a metric ton of carbon dioxide equivalent (CO2e) of avoided or sequestered carbon. Emitters buy the offsets to compensate for their carbon emissions happening elsewhere.

What are the Types of Forest Carbon Offsets?

Currently, three forest project types qualify to generate carbon offsets: afforestation or reforestation, avoided conversion, and improved forest management (IFM). 

Each forest project type comes with its unique costs, benefits, and ways of accounting for carbon. Determining which one suits your property best is the initial stage in the exploration process. So, let’s differentiate each type to guide your climate mitigation decision.

Afforestation/Reforestation 

Afforestation, a vital environmental effort, revolves around reinstating tree cover on lands that were previously devoid of forests. These projects are fundamental in addressing deforestation, enhancing biodiversity, mitigating climate change, and contributing to ecosystem restoration.

However, embarking on afforestation initiatives often incurs substantial costs due to the comprehensive processes involved, including land preparation, tree planting, maintenance, innovation and technology, and long-term investment.

Avoided Conversion 

Avoided Conversion projects are crucial initiatives aimed at preventing the transformation of forested areas into non-forested landscapes. These projects, also called REDD+ (Reducing Emissions from Deforestation and Degradation), help fight climate change by safeguarding existing forest cover. 

But for this project to be considered eligible for carbon offset programs, project developers must substantiate that the land faces a substantial and imminent threat of conversion. 

Improved Forest Management (IFM)

IFM initiatives focus on optimizing the management practices of forested areas to enhance carbon sequestration, biodiversity, and overall ecosystem health. They aim to increase or maintain the carbon stored within forests, contributing to climate change mitigation efforts while ensuring sustainable use of forest resources.

  • Among these three forest types, IFM projects are the most frequently traded compliance offsets in California’s cap and trade program. 

According to a research by Haya et al. (2023), IFM projects provided 193 million carbon offset credits since 2008. This accounts for 28% of the total credits from forest projects and 11% of all credits generated in voluntary carbon markets.

forest carbon offset credits from IFM
Source: Haya et al. (2023). https://doi.org/10.3389/ffgc.2023.958879

Developers of IFM projects must demonstrate that their forests are capturing more carbon than what would happen in a ‘business-as-usual’ situation across these carbon credit types.

Benefits of Forest Carbon Offsets

Well-designed and effectively executed forest carbon offsets can serve as incentives to reduce deforestation and forest degradation. They also aid in enhancing forest governance while promoting support for the rights of Indigenous peoples and local communities. 

Supporting forestry projects through carbon offsets offers the following benefits:

  • Preserving intact forests and those that are mostly untouched to safeguard biodiversity and the services provided by ecosystems. Indigenous peoples’ territories are crucial in this regard, as they have a proven track record of effectively conserving forests.
  • Improving the management of production forests and plantations to supply essential materials, enabling a shift from a fossil-fuel-based to a bio-based economy. This involves developing alternatives for materials like cement and steel, which have a high carbon impact.
  • Boosting tree presence in agricultural lands by implementing diverse agroforestry systems and offering stronger financial and social incentives to communities.
  • Reviving degraded land across the planet to enhance ecosystem-based services. Similar to other nature-based solutions, this restoration should always be done collaboratively with local communities in ways that suit the local context.

Each of these aspects could be integrated into a program providing forestry carbon offsets. They represent a more effective approach to land stewardship, resulting not only in carbon storage but also in numerous advantages.

Forest Carbon Offsets in Climate Change Mitigation Strategies

Managing forests to capture carbon presents an opportunity to reverse the impacts of man-made climate change. Global greenhouse gas (GHG) levels have swiftly risen, with almost half of these emissions happening in the last 40 years.

GHG emissions since 1750

Forecasts from climate models foresee rising global temperatures, higher sea levels, and shifts in weather patterns. These shifts result in severe droughts, floods, and the intrusion of rising sea levels into freshwater reserves, threatening drinking water sources.

Research indicates that communities dependent on agriculture or in coastal regions will likely face significant challenges due to global warming.

Studies suggest that capturing carbon in forests can play a substantial role in lessening the effects of climate change. Currently, according to the US Forest Service, forests in the US absorb around 16% of the nation’s emissions generated from burning fossil fuels.

Furthermore, forests deliver diverse ecosystem services to the public, like managing water quality and quantity while providing habitats fostering biodiversity.

Market for Forest Carbon Offsets

In 2022, about 30% of all carbon offset credits for forestry projects came from voluntary registries. These projects, like IFM, REDD+, and afforestation, include various types. 

The research by Haya et al. also pointed out that the U.S. was the main contributor to forest offset credits from IFM projects, accounting for 94% of them. Most of these credits were registered under the CARB (California Air Resources Board) compliance carbon offset program, with almost half originating from U.S. forest projects.

So far, most forest offset credits from all registries have been given to projects that reduce tree harvesting significantly, aiming to prevent carbon losses in forests compared to standard scenarios.

To date, sellers of forest carbon are big forestland owners seeking to diversify their forest-based revenue streams. 

Pricing of Forest Carbon Offsets

Prices for carbon offset credits in voluntary markets have dropped in the past year. Forest carbon offsets belong to nature-based solutions represented by the Nature-Based Global Emissions Offsets (NGEOs).

While the prices of all VCM offsets have been hit, the decline in NGEO prices stands out because of the premium they were trading at over the other offsets last year.

NGEO prices falling 2022-2023

Several reasons caused this decline. Global economic challenges, such as high inflation, ongoing conflicts like the war in Ukraine, and lasting pandemic effects slowed economic growth in 2022 and continued into 2023.

Moreover, there hasn’t been progress on a unified standard for carbon credit markets globally at COP27. This lack of advancement is holding back growth in voluntary markets.

Nonetheless, emitters are actively seeking ways to offset their residual emissions, particularly in hard-to-abate sectors. If you’re one of them, the following section will help guide you on how to buy forest carbon credits for your offsetting needs.

Process of Purchasing Forest Carbon Offsets

Buying forest carbon offsets is pretty much similar to purchasing other types of carbon credits. You can opt for directly getting them from project developers, which means from a forestland owner. You can also buy the offsets from other providers. 

For instance, you can look for a broker. Brokers can make it easier and quicker for you to get the offsets you need, especially if you need a lot of them. 

A broker also handles all the transactions on your behalf, and this purchasing process doesn’t require long-term contracts. But it would cost you a bit more. 

Another provider would be the retailers, who can give you at least basic information about the offsets they’re selling. Usually, they hold an account on a carbon registry and retire the offsets on your behalf.

Alternatively, you can also buy forest carbon offsets from an exchange. There are several carbon exchanges or trading platforms that provide these offsets. They often collaborate with registries to enable trading transactions. 

Purchasing forest offsets from a trading platform would be easy and fast, and may cost less than brokers. However, you might find it more challenging to evaluate the quality of the offsets. 

Calculating Your Carbon Footprint

But before you look for the right offset provider, it’s best that you know how many credits you need. And that means calculating your carbon footprint first and deciding how much of it you have to offset. 

Remember that one forest carbon offset represents one tonne of carbon emission. So, if you or your company emitted a thousand tons of carbon dioxide or its equivalent in one year, you’ll need 1,000 offsets to neutralize all of them. 

After calculating your total footprint, you can then determine the amount of offsets to purchase. Below is our comprehensive guide on how to calculate how many offset credits you need. 

Purchasing and Using Offsets

Once you have purchased the offsets, using them does not just involve writing off your carbon footprint. It also includes some kind of responsibility and a couple of considerations. 

For instance, you need to be confident that the offset credits are from projects that deliver real carbon emission reductions. That entails knowing the project details (e.g. type, location, environmental impacts, carbon reduction/removal, etc.). 

You also have to ensure that the offsets are generated following credible and trusted carbon credit methodologies. This is crucial to make sure that you get the real value of each dollar you invest in the offsets. 

More remarkably, forest carbon offsets are now under growing scrutiny as some projects are found to underdeliver the claimed reductions. This brings us to the last part of this guide.

Criticisms & Drawbacks of Forest Carbon Offsets

One major issue is additionality. It refers to whether or not the reductions would have happened even without the offset project. For example, a forestry project wouldn’t provide additional action on climate if it’s protecting a forest that was never in threat of being chopped down. 

Another drawback of these offsets is permanence. It means the carbon reduction or removal should remain for 100 years to be permanent. 

While some forest projects are capable of achieving that, others are at risks of reversal. This happens when different factors come into play that destroy the forests. Wildfires are the biggest culprit.

wildfire destroying forest carbon offset projectSeveral forestry projects have been burned down by fires, reversing the reductions they promise to offer. For example, a study suggested that California’s buffer pool, a kind of self-insurance program to cover reversal, severely lacks capital. 

So long as the buffer pool stays solvent, the permanence of carbon offsets remains intact. But the study showed that the buffer pool for California’s forest carbon offset projects is unlikely to insure its integrity for a century. 

Additionally, the buffer pool didn’t account for the increase in wildfire risks. Failure to do so means that the forest fire-prone state will most likely see high offset reversals. 

Both Quality and Quantity Matter

There’s also the issue surrounding the mathematics on how much carbon is really captured and stored in a specific area. 

Forests vary widely—from tropical to temperate and boreal, each with unique ecosystems, species, and risks. They also store different amounts of carbon that can change due to seasons, events like tree cutting, wildfires, and droughts. 

Moreover, calculating carbon in forests is complex. It depends not just on science but also on policy choices about data use, which changes to consider, and which forests to involve. Some worry that certain governments’ practices might let companies sell offsets from replanting after they cleared forests initially.

The case of Canada’s forest carbon accounting offers an example. According to a report from the country’s Natural Resources Defense Council, the calculation used is misleading and damaging. 

The authors noted that the government didn’t account for the carbon released by wildfires. However, it includes the carbon captured by forest regrowth even if there’s no logging and no human activities at play.

Finally, the biggest criticism thrown at forest carbon offsetting projects is their ineffectiveness in actually reducing carbon emissions. A group of investigative journalists claimed that more than 90% of Verra’s REDD+ projects likely do not represent real reductions. 

The studies that journalists used for their analysis involve different methods and time periods. They also considered various ranges of Verra REDD+ projects, while noting that such studies do have some limitations. Yet, they noted that the data indicated consensus on the lack of effectiveness of the projects versus what Verra had approved. 

Forestry Carbon Offsets: Closing Thoughts

Forestry carbon offsets have emerged as a promising tool in combating climate change by preserving and protecting forests to capture and sequester carbon. This multifaceted approach not only benefits the environment by reducing carbon emissions but also presents economic opportunities for forest-dependent communities.

However, the market for forest offsets faces challenges, including pricing discrepancies, additionality concerns, and complexities in measuring carbon sequestration. Issues related to permanence and accurate quantification also remain critical areas demanding attention and robust evaluation within the offsetting paradigm.

Amidst these complexities, forest carbon offsets present both opportunities and challenges in achieving carbon neutrality. Collaborative efforts among governments, project developers, and market stakeholders are essential to address concerns, establish transparent methodologies, and ensure the credibility and effectiveness of forest carbon offset projects.

Bruce Power Pioneers Nuclear Carbon Offset Protocol

Bruce Power has introduced the inaugural carbon offset protocol for nuclear generation, marking a pioneering move in the industry.

The announcement was made by the Ontario-based power company at the United Nations climate conference, COP28, happening in Dubai.

Bruce Power delivers clean, reliable nuclear power to families and businesses across the Canadian province. It aims to be the first nuclear plant in North America to reach net zero greenhouse gas emissions by 2027.

The company’s Executive Director of Corporate Affairs, Pat Dalzell, highlighted the significance of this milestone in positioning the nuclear industry as a leader in clean energy, saying:

“This groundbreaking carbon offset protocol is yet another step in the right direction for the nuclear industry as a clean energy leader. Bruce Power is taking this next step to help battle climate change and achieve net zero goals…

Pioneering Nuclear Carbon Offset Protocol

Bruce Power has partnered with GHD, a global energy company, to develop the carbon offset protocol for nuclear generation.

This initiative follows the firm’s recent sale of Clean Energy Credits and aligns with their ambitious 2027 net zero target. The ultimate goal is to contribute to climate change efforts while fostering economic benefits for Canadian firms.

To achieve its net zero by 2027 goal, Bruce Power has the following interim net reduction targets using 2019 baseline:

Each day Bruce Power produces 30% of Ontario’s electricity and avoids about 19 million tonnes of greenhouse gasses a year. By helping Ontario phase out coal, it’s like taking 7 million cars off the road. 

The power company noted that it can avoid 15% of GHG emissions, reduce 18% through the use of lower carbon fuels, and substitute 36% of emissions for renewable/clean energy. 30% of its net zero efforts will involve purchasing carbon offsets.

Bruce Power Net Zero Strategy

Bruce Power net zero strategy

Carbon offsets represent a certain amount of reduced or removed carbon dioxide or its equivalent. While these offsets have been used by companies in their decarbonization strategies, this is the first that they’ll be used for nuclear power generation.

Ontario’s Minister of Energy, Todd Smith, emphasized Bruce Power’s pivotal role in transitioning the province away from coal-fired generation.

The company’s experience in clean energy, financial collaborations for its Green Bond program, and active engagement in Ontario’s Clean Energy Credit program reinforce the importance of credible, additional, and tangible clean energy credits and carbon offsets.

  • Nuclear power offers a clean energy alternative to fossil fuel while providing broader impacts to the grid’s stability. 

Bruce Power’s new carbon offset protocol, presently undergoing third-party validation, aims to leverage clean nuclear energy to meet growing demands. It will also enable consumers and businesses to continue their decarbonization journey through electrification. 

Amplifying Nuclear Power’s Clean Energy Impact

Bruce Power plans to increase its electricity production without adding more greenhouse gasses. They will do this by enhancing their systems, making them more efficient, and upgrading nuclear units equipment through Project 2030. 

The initiative seeks to optimize the output of their current assets, aiming to boost electricity generation from 6,550 MW to 7,000 MW by the 2030s. Project 2030’s main targets include:

This increase in nuclear power output at the Bruce Power site will lead to less use of emissions-heavy electricity produced from natural gas in the region. The main objectives of Project 2030 are to:

  • Lower the GHG emissions produced by Ontario’s grid by substituting some electricity generated by natural gas power plants.
  • Enhance the stability of Ontario’s electricity grid by diversifying the sources of electricity production.
  • Support Ontario’s objectives as per the Independent Electricity System Operator (IESO) guidelines

Nuclear Demand Surge and Investment Opportunities

Bruce Power’s groundbreaking news has never been more timely. Nuclear gained victory at COP28 climate talks where countries pledged big time commitment to this energy source.

In fact, the world’s nuclear energy capacity will triple by 2050, a massive deal to reduce emissions and decarbonize economies. This global agreement, called the Net Zero Nuclear Industry Pledge, reflects the surging global demand for nuclear energy.

Another innovative Canadian company, Uranium Royalty Corp. (NASDAQ: UROY, TSX: URC), showed support for the pledge, endorsed by 120 industry members at COP28. These include the US, UK, France, UAE, Japan, South Korea, and Canada.

URC’s CEO, Scott Melbye, expressed enthusiasm for nuclear energy’s role in curbing climate change, emphasizing URC’s readiness to support uranium demands as part of this clean energy push.

The International Atomic Energy Agency (IAEA) projected that worldwide nuclear installed capacity by 2030 will stand at 496 GW. In North America, that would be at 111 GW at the maximum, making it the second largest nuclear producing region. 

IAEA nuclear power projection 2030

Bruce Power’s introduction of the carbon offset protocol for nuclear generation marks a significant milestone in clean energy initiatives. Moreover, URC’s endorsement of nuclear power’s net zero pledge cements the industry’s leadership in the clean energy transition. These developments suggest a growing interest in nuclear power across different sectors, unlocking investment opportunities for sustainable energy. 

Global Carbon Council Revolutionizes Carbon Credit Management

The Global Carbon Council (GCC) and Global Environmental Markets Ltd. (GEM) joined forces to buy the Global Carbon Registry® (GCR). This registry will be used by GCC to manage carbon credits, making it easier to issue, transfer, and retire these credits. It’s also set up to handle Article 6.2 credits for countries interested in that.

GCC is an international carbon credit and sustainable development program. 

The GCR is an advanced system that helps track Article 6.2 credits, which are important for global climate efforts. It’s part of the voluntary carbon market (VCM) and offers several features to make transactions smoother and simpler.

Revolutionizing VCM with Global Carbon Registry

GCR is significant in reporting Internationally Transferred Mitigation Outcomes (ITMOs) or the Article 6.2 credits. 

ITMO is a carbon emissions trading system where countries can buy or sell carbon credits with other countries. This can open doors for developing new carbon markets and further reductions in global greenhouse gas emissions.

At COP27 last year, Ghana and Switzerland, along with Vanuatu, inked the first-ever voluntary cooperation involving ITMOs.

The innovative registry isn’t just for GCC; it’s also designed for governments and countries. They can create their own carbon registries using this system and thus, further develop VCM solutions. 

GCC’s founding chairman, Dr. Yousef, highlighted the importance of acquiring GCR in carbon markets, noting that:

“It represents a significant leap forward in seamlessly integrating carbon credit certifications and insurance. Our partnership not only revolutionizes the issuance of carbon credits but also empowers nations to shape their own registries, influencing the very structure of carbon markets.”

The GCR streamlines carbon market transactions. It manages everything from issuing credits to transferring and retiring them. It has a user-friendly interface that stands out in the carbon market industry.

Moreover, the registry connects with other platforms, making it easier for users to access and expand their market reach. It also meets requirements set by CORSIA, a regulatory program, ensuring that users comply with regulations while participating in the market.

Pioneering Solutions for Robust Carbon Markets

The Global Carbon Registry® and GCC have created a comprehensive solution that connects with exchanges and auctions. It would also link with CAD Trust (Climate Action Data Trust), and other registries.

Wayne Sharpe, CEO of GEM, expressed pride in partnering for a promising future in carbon markets. Nations worldwide seek a robust registry, and with the Global Carbon Registry®, they get cutting-edge technology and top-notch credit standards. This technology supports nations in setting up sub-registries affordably.

The announcement aligns with Global Carbon Council’s presence at COP28. They’re focusing on key topics like implementing Article 6.2 of the Paris Agreement, improving carbon credit integrity, and enhancing efficiency through digitization in carbon markets.

Just over a week ago, Nasdaq also revealed a revolutionary technology aimed at securely digitizing the issuance, settlement, and safekeeping of carbon credits. The move shares the same goal with GCC’s acquisition of GCR: foster the growth and institutionalization of global carbon markets. 

Amid over 118 governments pledging to triple renewable energy by 2030, GCC emphasizes the crucial role carbon markets play in financing this global transition.

Empowering Climate Action with Excellence 

In a separate deal, the Gulf Organisation for Research & Development (GORD), overseeing the GCC, has simultaneously introduced a pivotal initiative – the Climate Action Center of Excellence (CACE). 

The strategic launch aims to accelerate the implementation of Article 6 of the Paris Agreement. It’s one of the cornerstones as part of the GCC’s strategy to mitigate climate change. 

The main objective of CACE is to offer robust, impactful solutions that empower businesses and governments in mitigating carbon emissions. Additionally, it strives to mobilize climate finance efficiently, ensuring optimal use of investor funds while generating new sustainable projects.

The launch of CACE coincides with the staggering financial need estimated at around $ 4.4 trillion for developing countries to fulfill their Nationally Determined Contributions (NDCs). This underscores the critical role of the private sector in funding and supporting emission reduction activities needed by nations.

This is where the CACE framework comes in to channel substantial funding into projects that curb emissions.

The acquisition of GCR by GCC promises to enhance transparency, ease transactions, and foster the growth of global carbon markets, playing a pivotal role in the pursuit of sustainable development and climate change mitigation.

What it Takes to Close the Huge Carbon Removal Gap?

Boosting Carbon Dioxide Removal (CDR) is crucial alongside rapidly cutting emissions to meet the Paris Agreement’s climate targets. A detailed report, analyzing the industry’s various key aspects, looks at the current state of the CDR. 

The authors found that there’s a big difference between what countries plan to do and what’s needed to meet the global climate goals. 

The report is done by experts in the field of CDR, who are authors of Intergovernmental Panel on Climate Change (IPCC) reports and lead major CDR research projects.

Bridging the Carbon Removal Gap

To keep warming below 2°C, the world needs to remove vast amounts of CO2 from the air. CDR includes ways to capture CO2 and keep it stored in places like soil, oceans, or products. Examples include planting more trees, using certain technologies to capture carbon and storing it. 

For the first time, the report estimated the total amount of CDR currently being deployed globally. It found that most current CDR (2 billion tonnes of CO2 a year) comes from traditional methods like planting trees. That translates to 99.9% of virtually all current CDR, primarily through afforestation and reforestation. 

Only a very small fraction – 0.1% or 0.002 GtCO₂/year – comes from new CDR methods, as shown below. Examples of novel CDR are Bioenergy with Carbon Capture and Storage (BECCS), biochar, and Direct Air Carbon Capture and Storage (DACCS).  

total current amount of CDR per methodBut to limit warming to 1.5°C or 2°C, these removal methods and reducing deforestation must increase by a lot in the next few decades. By 2050, land-based removals double in 1.5°C pathways and increase by 50% in 2°C pathways relative to 2020 levels. 

Countries need to work hard to meet these goals by using policies and better land management to amplify these efforts. It’s a big challenge, but it’s essential to tackle climate change.

The “CDR gap” size varies among scenarios based on how the world shapes the global economy toward net zero emissions. But right now, countries have limited plans to increase CDR beyond current levels, creating a significant shortage.

National Commitments vs. Concrete Plans

According to the report, around 120 national governments have a net zero emissions target, implying the use of CDR for residual emissions. However, only a few have actionable plans for developing CDR in their Nationally Determined Contributions (NDCs), particularly for new methods.

CDR in three Paris Agreement scenarios

The chart above shows that CDR is crucial in scenarios to meet the Paris Agreement’s temperature goal, alongside emission reductions.

Closing the CDR gap, illustrated below, needs rapid growth of novel carbon removal methods. 

CDR gap between proposed levels and what is needed

The analysts suggest that novel CDR grows by a factor of 30 by the decade end and as much as 540 in certain scenarios. That growth goes up to a factor of 1,300 and as much as 4,900 in certain scenarios by 2050.

Innovation in CDR approaches has expanded significantly in recent years. It is evident in >$4 billion of public funds injected into Research, Development and Demonstration (RD&D) on CDR. Moreover, a total of about $200 million was invested in CDR from 2020 to 2022. 

Buyers of CDR credits have also shown growing support for novel methods. CDR purchases soared 437% in the first half of 2023. 

Public discussions about CDR are also increasing, yet awareness about it remains lower compared to other climate change aspects. Studies show that while people support research on CDR, they worry about its large-scale implementation. 

In particular, methods like afforestation, which seem more natural, receive better public perception compared to other CDR approaches. On Twitter, talks about CDR are rising, with most methods garnering positive sentiment, except for BECCS.

The Rising Profile of Carbon Removal

Given the uncertainties surrounding scaling up CDR, emitters can reduce reliance on it by swiftly cutting emissions and using energy more efficiently. 

Scientific scenarios outline various pathways to meet climate goals, suggesting various strategies like reducing fossil fuel use, switching to electric power in most sectors, stopping deforestation, and deploying both traditional and new CDR methods on land. 

Notably, new and innovative startups in the carbon removal sector show a strong dedication to fighting climate change by creating practical solutions to store CO2 in various environments. 

Though there are doubts about how well these methods can be scaled up, the substantial investments going into these projects highlight a growing belief in their crucial role in tackling climate change.

The global effort to limit temperature rise requires a robust strategy to close the Carbon Dioxide Removal (CDR) gap. Balancing traditional methods with innovative techniques is essential. Governments and industries must prioritize CDR development alongside emission reductions for a sustainable, low-carbon future.