Biden’s Tax Credit for Carbon Capture – $85 / Tonne

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Biden’s Tax Credit for Carbon Capture – $85 / Tonne

Since US President Joseph Biden took office in January, Democrats and Republicans have gone back and forth on almost every piece of legislation. The new budget bill has been no exception. However, sources say top Democratic lawmakers have finally reached an agreement that includes increasing tax credits for industrial carbon capture projects.

If implemented, this agreement would expand the 45-Q tax credit for carbon capture projects in heavy industries, such as cement and steel, to $85 per metric ton.  Currently, the credit varies from just under $12 to $50 per ton.

This agreement does not cover coal and natural gas, a significant source of US carbon emissions. However, Senator Joe Manchin of West Virginia is pushing for coal and natural gas to be included. Doing so would help boost his state’s economy while improving the environment.

Since Senator Manchin is a right-leaning Democrat, his vote is key to the budget bill’s passage.

US Representative Cheri Bustos, a Democrat who has sponsored carbon capture legislation, said that raising the credit “Would drastically increase our carbon capture capacity by 2035 and create tens of thousands of new jobs.”

Many of these new jobs would be within ethanol and manufacturing plants that are in rural locations. Since many workers across more rural states feel left behind, a bill such as this could positively impact communities.

The carbon credit industry is expected to reach $22 trillion by 2050. This year alone, it has expanded as governments, companies, investors, and individuals recognize its potential to offset carbon and spark economic development.

The US is the second-largest greenhouse gas emitter globally, just behind China and before India, so action is needed. Biden has expressed that the US is committed to meeting emissions goals by rejoining the Paris Agreement.

Additional regulations, the carbon credit and offset industry, and innovative technological advances all have a role to play. Combating climate change was a significant campaign promise, and many feel Biden hasn’t delivered.

SEC Starts to Focus on Climate Change Impact

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SEC Starts to Focus on Climate Change Impact

The SEC recently published a sample comment letter on climate change disclosure. The goal is to make companies aware of what is coming down the pipeline in terms of disclosure for climate change.

Earlier in July, SEC Chair Gary Gensler asked agency staff to submit a mandatory climate risk disclosures proposal for review. These reports may be required in an expanded Form 10-K and describe a company’s direct and indirect carbon emissions, including those by suppliers and partners.

SEC disclosure rules may require companies to disclose current & potential future material impacts of climate change on the company’s business and financial condition and performance.

According to the SEC, “Information related to climate change-related risks and opportunities may be required in disclosures related to a company’s description of business, legal proceedings, risk factors, and management’s discussion and analysis of financial condition and results of operations.”

For now, the SEC is asking companies to provide information about climate change’s direct and indirect impact on their business. This includes the impact of regulations.

In the future, companies may need to report on greenhouse gas emissions, the financial effects of climate change, and progress towards climate-related goals.

Gensler said he wants investors to have access to “consistent, comparable, and decision-useful disclosures.”

The tools to combat climate change are here. Between technological innovation and carbon offsetting, it is possible to achieve net-zero emission goals.

The SEC is expected to release more information by the end of this year…

What Role Will Carbon Credits Play in the Race to Net Zero?

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What Role Will Carbon Credits Play in the Race to Net Zero?

The carbon credit industry is booming and with good reason!

Carbon offsets produced through the purchase of carbon credits can improve the environment and spark socio-economic growth.

When speaking about the carbon credit and offset industry, Australian Federal Energy and Emissions Reduction Minister Angus Taylor said, “The fact is, the world won’t achieve net-zero emissions without offsets, including cross-border offsets.”

The reason why? Offsets can make the transition to low emissions simpler as industries develop the technology needed to get there. Without offsets, it would be impossible for the world to keep rising temperatures below 1.5 Degrees Celsius, which the Paris Agreement requires.

The technology to bring us to net-zero isn’t quite there yet. In fact, one report by the Intergovernmental Panel on Climate Change in August found that the world would need to reduce carbon emissions by 45% by 2030 to meet the Paris Agreement’s goal. Unfortunately, with emissions on track to rise by 16%, temperatures may increase by 2.7C. Hence why carbon credits are so important.

Some aren’t so sure.

Standard Chartered Group CEO Bill Winters said that “The voluntary market, as we see it, has an absolutely critical role to play. [But] It’s always going to be a secondary role to the primary focus of reducing the carbon intensity of our economy in every possible way.”

Winters believes the voluntary markets are critical for two reasons:

1.) The markets can move billions into the hands of people who can perform projects that will help improve the environment; and

2.) When appropriately done, the market can provide a price for carbon that is accurate – forcing corporations and the public to make better choices when it comes to their carbon footprint.

His concern is due to a lack of standards, transparency, and in some cases, integrity concerning the verification process. Though some of these concerns are valid, they may not be for long.  The verification process is improving, with many entities working together to create global benchmarks.

With some additional regulation and reform, it is safe to say that carbon offsets will play a significant role in helping the world meet net-zero goals.

New Infrastructure in China is Better – But Still Carbon-Intense

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New Infrastructure in China is Better – But Still Carbon-Intense

A new report from Greenpeace East Asia has calculated that emissions from China’s “new infrastructure” industries will only reduce emissions by 7.24% – far less than what was hoped for.

China is currently the world’s largest carbon emitter, accounting for 27% of the world’s greenhouse gas emissions. The United States comes in second, and India comes in third.

According to Greenpeace’s report, China’s new infrastructure policy language has focused on low-carbon development for their latest projects – which is great. However, because China hasn’t set green standards for the supply chains of these projects, the individual projects only go so far.

Essentially, if the carbon emissions to create these “green” projects is high, it negates the positive impact of the projects as a whole. It’s like running a mile, then eating a cake. You may not gain that much weight, but you’re not exactly the poster child of health and wellness either.

“The goal of infrastructure investment is often to increase productivity in the supply chain. Addressing the carbon profiles of individual projects, then, only goes so far. Without specific environmental standards for the entire supply chain, high carbon emissions will remain a major byproduct that offsets any low-carbon advances in project planning,” said Zhang Kai, deputy program director in Greenpeace East Asia’s Beijing office.

In other words, there’s room for improvement.

China’s new infrastructure includes:

  • 5G technology
  • Artificial Intelligence
  • Data Centers
  • Electric Vehicles
  • Infrastructure (such as Ultra-High Voltage Power Lines and “Smart” cities)
  • High-Speed Railways

In addition to “new infrastructure,” China started a national carbon trading market in July. Once it is fully operational, it is expected to be the largest carbon marketplace in the world.

Right now, experts believe the global carbon market could reach $22 trillion by 2050. Many view the carbon marketplace (where carbon offsets are purchased through credits) as integral to fighting climate change, promoting sustainability, and driving economic growth.

China hopes to peak its carbon emissions by 2030. Their ultimate goal is to achieve carbon neutrality before 2060.

If China can continue to work on their new infrastructure projects, cut supply chain emissions, and expand their carbon credit and offset industry, net-zero goals may be possible. Time will tell.

Is Carbon Neutral Mining Possible?

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Is Carbon Neutral Mining Possible?

Renewable energy is needed to reduce carbon emissions and combat climate change. The problem is, many aspects of renewable energy rely on mining, which is a significant source of carbon emissions.

Global Technology company ABB may have the solution. Their new program, ABB Ability eMine, is helping with the transition to make mining carbon neutral.

The implications of such an improvement are huge across the mining and carbon credit industry, as it can drastically reduce greenhouse gas emissions across the globe.

ABB’s eMine consists of electrification technology that uses digital applications and services within the mining process. This can optimize energy usage, reduce costs, and improve performance.

One part of ABB’s Ability eMine program is ABB Ability eMine FastCharge, which provides high-powered electric charging for haul trucks. It can be installed anywhere and charge an electric truck up to 600 kW. Depending on the battery capacity, the charging time could be as short as 15 minutes.

The technology is currently in its pilot phase, but ABB expects a 2022 release.

ABB is also hoping to incorporate the ABB Ability eMine Trolley System, reducing diesel consumption up to 90%.

According to Max Luedtke, ABB’s Global Mining Head, “The global mining industry is undergoing one of the most significant and important transformations of our generation – and that is to become zero-carbon.”

Since the mining industry generates between 1.9 and 5.1 gigatons of carbon emissions annually, a significant transformation is an understatement!

Technological innovations such as ABB’s, along with increased regulation and the carbon offset industry, are precisely what the world needs. It will be great to see how ABB’s eMine, FastCharge, and Trolley System programs will transform the mining industry moving forward.

Luedtke said, “Mines can become ever more energy efficient with vastly reduced levels of carbon dioxide emissions while staying competitive and ensuring high productivity.” The more projects created to reduce and offset carbon, the better.

With ABB celebrating 130 years in the mining industry, this announcement can propel them further into the future.

Thailand’s Biggest Companies Plan Carbon Credit Exchange

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Thailand’s Biggest Companies Plan Carbon Credit Exchange

Thailand’s state-owned electricity generating company and 10 of the nation’s biggest companies have set up a voluntary emissions-offset program.

This “Carbon Markets Club” has one of the world’s largest conglomerates (Charoen Pokphand Group) and Bangkok transit operator BTS Group Holdings as two of the founders.

Since its early start in June, the club has traded ~15,000 tonnes of CO2. The intent is to expand into a full carbon-trading exchange for the whole country. There are +40 other companies that have expressed interest in joining the group.

The plan is to build a system similar to exchanges in the European Union and China, where big emitters offset their carbon footprint by purchasing credits from companies.

Club members can trade credits over-the-counter in an effort to speed up energy transition. Revenues from the trades would be invested in clean energy or technologies.

With million tonnes of supply and not a lot of companies wanting to cap their own emissions, Thailand’s voluntary system still has more supply than demand and the prices are less than $1 per tonne.

This is a stark contrast to the other markers such as the EU where pricing is above $60 per tonne. The EU, where carbon-intensive sectors such as oil and steel are subject to a cap-and-trade that can push up prices as authorities tighten climate goals.

The Thai Government has also been promoting a bio-circular-green economic model, and their own voluntary emission reduction program called T-VER.

The ultimate goal is to extend the carbon market beyond T-VER to provide a platform for trading all carbon credits both within the country and across borders.

Voluntary corporate commitments to net-zero emissions are the main driving force behind increased carbon-credit demand, according to a World Bank report.

This is part of a bigger global effort to reduce climate change impacts and limit global warming from pre-industrial levels to well below 2 degrees Celsius.

Quebec Deposit and Investment Fund “Caisse” to Sell Off Remaining Oil Assets

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Quebec Deposit and Investment Fund “Caisse” to Sell Off Remaining Oil Assets

Quebec pension giant Caisse will sell off all remaining oil assets by next year as part of their ongoing effort to cut their carbon footprint in half by 2030.

Overall, Cassie holds about $390 billion in assets. One percent is currently tied up in oil-related investments.

“The climate situation affects everyone, and we can no longer address it with the same methods used a few years ago,” CEO Charles Emond said. “We have to make important decisions on issues such as oil production and decarbonizing sectors that are essential to our economies.”

A shift is happening within the investment community and with other pension funds, such as the Ontario Teachers’ Pension Plan, which has also gone green. ‘Code Red’ warnings and increasing temperatures could be the reason behind these changes. Investors can no longer sit idly by and ignore the environmental impacts of their investments.

In addition to selling remaining oil assets, Caisse will purchase $54 billion in green assets by 2050. They have also set aside $10 billion to invest in carbon-intensive companies transitioning into more sustainable energy (such as metals, plastics, transportation, and agriculture).

“With this new strategy, we are demonstrating our leadership as an investor and entering the next stage of climate investing. We believe this is in the interests of our depositors, our portfolio companies, and the communities we invest in,” Emond said.

Many companies are choosing to invest in carbon offsets. A new report from Ecosystem Marketplace shows that the carbon markets are booming and on track to reach $1B before the end of 2021. It is important to note that the global carbon market is expected to reach $22 trillion by 2050.

As investments begin to focus on green initiatives, the world’s net-zero goals seem more within reach.

Global Banking Carbon Credit Marketplace Announces First Trade

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Global Banking Carbon Credit Marketplace Announces First Trade

“Project Carbon” announced its first trade between the Nature Conservancy of Canada and the UK’s NatWest Group.

The sale included voluntary carbon credits issued by Verra. Verra is currently managing the leading global program to verify greenhouse gas emission reduction projects.

Project Carbon was set up in July between CIBC, Itaú Unibanco, National Australia Bank, and NatWest Group to grow the voluntary carbon credit industry through transparent, consistent pricing and standards.

The overall goal of the project is:

  • Increased delivery of high-quality carbon offset projects
  • Create a liquid carbon credit marketplace with price certainty and transparency
  • Develop a strong ecosystem to support the offset market
  • Create tools to help clients manage climate risk

Critics of the voluntary carbon credit industry say without consistency in pricing and standards, the carbon market will fail to deliver on its promises. Since the carbon market provides endless opportunities to improve the environment and drive economic development, efforts such as Project Carbon, can alleviate critic concerns and ensure its success.

Catherine Grenier, President and CEO of the Nature Conservancy of Canada, said that “Nature is our ally in the face of climate change challenges. The Nature Conservancy of Canada’s world-class Darkwoods Forest Carbon project taps the power and potential of private investment to meet our conservation and carbon reduction objectives. We are excited to be part of Project Carbon’s pilot trade, to join in driving advances in nature-based solutions through innovation.”

According to Harry Culham, Senior Executive Vice-President and Group Head of CIBC Capital Markets, “CIBC remains committed to enabling our clients to achieve their climate-related goals through commercial solutions that lead to tangible progress. Investments in technology and innovation are going to be important drivers of a reduction in GHG emissions. Project Carbon is one example of opportunities to unlock the potential of carbon removal, and we will continue to play an active role in helping this sector to grow.”

CIBC is a leading financial institution in North America with over 10 million clients. Their objective is net-zero emissions by 2050, with a sustainable finance target of $300 billion by 2030.

Experts believe the global carbon market can reach $22 trillion by 2050. With prices and interest surging to record levels this year alone, it will be interesting to see how Project Carbon impacts the industry for the better.

Carbon Neutrality Tokens Backed by Chinese Carbon Credits Sold in Singapore

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Carbon Neutrality Tokens Backed by Chinese Carbon Credits Sold in Singapore

Singapore startup Cyberdyne Tech Exchange (CTX) announced the sale of carbon neutrality tokens backed by Chinese carbon credits. These credits will offset nearly 5,000 metric tons of carbon through a wind project taking place in Zhangjiakou. Another 5,000 units will be released later this month.

China’s national carbon trading market issues tokens that contain “shared carbon information including emission records and tracing, carbon offsetting, carbon capture, storage, and reuse.”

This is an additional measure that China’s market is using to ensure that environmental objectives are achieved.

The global carbon market is anticipated to reach a value of $22T by 2050. China, which launched its carbon trading market in July, is expected to hold the largest carbon market in the world once it is fully operational.

Zhangjiakou will co-host the 2022 Winter Olympics, which may be why China (backing the project) is keen to showcase it. China is currently the world’s largest carbon emitter, producing about 10.06 billion metric tons of carbon annually.

As of 2019, this accounted for nearly 27% of the world’s greenhouse gases. The US came in second, at 11%, and India came in third at 6.6%.

China is determined to become a world leader when it comes to combating climate change. Last year, China’s President Xi announced that their emissions would peak before 2030. Their goal is to achieve carbon neutrality by 2060, using methods such as reforestation.

Some feel China’s efforts aren’t driven by environmental concerns but rather by economic growth. If China does not create more environmentally friendly policies, it could affect their ability to trade with the west. Regardless, with China onboard towards reducing emissions, the world reaps the benefits.

This is an all-hands-on-deck situation. The more countries committed to a greener, cleaner future, the better it is for us all.

 

Bezos Pledges $1B Towards Fighting Climate Change

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Bezos Pledges $1B Towards Fighting Climate Change

Jeff Bezos, has pledged $1 billion towards environmental conservation. The goal is to protect 30% of the Earth’s land and sea by 2030.

This $1 billion commitment is the largest from the Bezos Earth Fund, founded by Bezos in 2020. The fund is currently worth $10 billion.

Though Bezos’ dedication to combating climate change has been well received, some feel it is too little too late.

Bezos, who stepped down from Amazon in July, has long been criticized for the carbon footprint Amazon has created.  Their massive fleet of planes, trucks, vans, and 2-day delivery model, has pumped millions of tons of carbon into the atmosphere each year.

Amazon pledged in 2019 to make their company carbon neutral by 2040. Still, many believe other billionaires, such as Bill Gates and Warren Buffet, have done far more.

Regardless, most can agree that Bezos’ efforts are admirable, with the potential to make a real and positive impact on the environment.

According to The Washington Post, the Bezos Earth Fund will focus on “…areas that are important for biodiversity and carbon stocks and will emphasize the central role of local communities and Indigenous people in conservation efforts.”

It has the potential to protect up to 80% of plant and animal species, secure 60% of necessary carbon stocks, and sustain 2/3 of clean water.

A net-zero future seems within reach with billionaires like Bezos, Gates, and Buffet on the cause. Their investments in green technology and the global carbon market can help make a difference.

Unfortunately, time is running out. The threat of climate change is looming – and its effects are already starting to take place.

Bezos’ billion-dollar commitment towards combating climate change is a welcome announcement.

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