Shell Sets Sights on Sustainable Aviation Fuel

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Shell Sets Sights on Sustainable Aviation Fuel

Royal Dutch Shell will start producing low-carbon jet fuel by 2025. Currently, aviation accounts for 3% of greenhouse gas emissions across the globe.

Though the aviation industry has wanted to reduce its carbon emissions, it has been a real challenge. There are not many fuel alternatives available that can power jet engines. And, the sustainable aviation fuel (SAF) that is accessible costs about 8x more than standard fuel does. Because of the price and availability, SAF accounts for less than .1% of the fuel being used for planes today.

Regardless, Shell is focused on producing 2 million tons of SAF, which could cut up to 80% of aviation emissions. SAF is made of waste from cooking oil, plants, and animal fats. Shell is working on a synthetic aviation fuel that is made from hydrogen and recycled carbon.

Shell’s announcement couldn’t come soon enough. Just last week, the US announced that their goal is to cut greenhouse-gas emissions from aircraft by 20%.  Since Shell – one of the largest oil traders globally – has committed to SAF, it’s safe to say other producers will follow. The US goal could be a reality.

Anna Mascolo, Head of Shell Aviation, said that “Sustainable aviation fuel, whether bio SAF or synthetic SAF, remains the single biggest solution [to meeting emission reduction goals].” Shell’s refinery expects to produce 820,000 tons of fuel, with SAF making up half of that.

With news of warming temperatures and the need for immediate action, this is a step in the right direction. Interest in carbon markets is increasing, offsets are taking the lead, and technological advances (like SAF) are being pushed ahead. Plus, numerous countries have re-committed themselves to the Paris Agreement – an act of solidarity and action.

It seems that change is happening for the better.

Cue cautious optimism.

The World is on a ‘Catastrophic’ Path

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The World is on a ‘Catastrophic’ Path

The earth’s temperature is on track to increase heat by 2.7 degrees Celsius (or 36.8 degrees Fahrenheit). UN Chief Antonio Guterres warned that such an increase in temperature would be “catastrophic” and called on the world to act.

If the earth were to increase 2.7 degrees Celsius, Paris climate agreement figures aimed for warming below 2C would be destroyed. Guterres went on to say that “Failure to meet [climate goals] will be measured in the massive loss of lives and livelihoods.”

Unfortunately, many nations have been slow in responding to the Paris agreement, failing to slash emissions or aid climate-vulnerable countries. With temperatures rising, the opportunity to make a difference is starting to close.

In response to these findings, US President Joe Biden said that “We have to act, all of us, we have to act now.” He urged the world to bring its highest ambition to the UN Climate Conference taking place in November.

As of now, the earth’s average temperature will be 1.5C higher around 2030, which is a decade earlier than projected just three years ago. The Organization for Economic Co-operation and Development said they were disappointed in the progress made. UN Climate Chief Patricia Espinosa said that “Overall greenhouse gas emission numbers are moving in the wrong direction.”

If you think about it, the world is already seeing extreme weather patterns that have resulted in the loss of life and property. No country or person is unaffected by climate change. All can see the impact climate change has on their own lives and lives worldwide each day. What more do people need to get on board? Without action, these disasters will only continue to increase.

As discouraging as this news is, hope is not lost. 113 countries – including the US and those within the European Union have updated their pledges, expressing their commitment to carbon neutrality and net-zero emissions.

The carbon market is also expanding, which can reduce emissions and support socio-economic issues – providing companies and individuals alike the opportunity to grow.

As interest in the carbon market increases and more offset projects take place, these figures can improve. However, the fight against climate change can no longer be conducted by a brave few. The world needs to get on board by combating climate change together.

Carbon Markets Propel Forward Expected to Reach $1B in 2021

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Carbon Markets Propel Forward Expected to Reach $1B in 2021

According to a new report from Ecosystem Marketplace, carbon markets are on track to reach $1B before the end of the year.

This is a 60% increase from last year, driven by companies focused on achieving net-zero emissions.

To meet the Paris Agreement’s 1.5° target, the world will have to cut pollution levels in half by 2030. The goal is to reach net-zero emissions by 2050.

Stephen Donofrio, the report’s lead author, said, “We’re seeing record market volume and value in 2021. The markets are on track to hit $1 billion in transactions this year if current activity levels and growth continue. It’s not just companies buying carbon credits as a small piece of their net-zero corporate strategy.

There’s an increase in speculators purchasing credits. The combined value of those deals is becoming a serious source of finance for green projects around the world.”

To help ensure carbon credit quality and standardization, the Taskforce on Scaling Voluntary Carbon Markets (TSVCM), led by Mark Carney, UN special envoy for climate action and former Governor of the Bank of England, is forming an independent Governance Body.

Annette Nazareth, the Taskforce’s Operation Lead and former SEC commissioner, said, “The new Governance Body being established by TSVCM will play a key role in ensuring the large volume of carbon credits traded are of high quality and integrity.”

Since the supply of environmental projects is tightening, credit prices have gone up. Patrick Maguire, one of the report’s lead authors and Senior Manager of Ecosystem Marketplace, says that “Whether the higher prices will entice new supply to enter the market quickly enough to meet rising demand is still an open question. Most carbon projects typically take years to develop.”

Regardless, the higher prices are great news for project developers, many in Asia, Latin America, and Africa. These projects are sparking development in regions that need it most.

Michael Jenkins, CEO of the nonprofit group Forest Trends, a parent organization of Ecosystem Marketplace, says that the challenge for the voluntary carbon markets is no longer about finding credit buyers. “Now, we all need to guide the markets to deliver the highest quality possible, with the greatest benefit possible for the planet and communities.”

Some studies have indicated that by 2050, the global carbon market could top $22 trillion. With benefits spanning the environment and socio-economic development, is it any surprise? The carbon market has the potential to combat climate change and support sustainability around the world.

Cannabis Company HEXO Achieves Carbon Neutrality

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Cannabis Company HEXO Achieves Carbon Neutrality

Canadian-based HEXO Corp. (TSX: HEXO; NASDAQ: HEXO) announced they have reached carbon neutrality, offsetting 100% of their 2020 operational emissions, plus the emissions of their 1,200 employees.

To achieve their carbon-neutrality goal, HEXO partnered with Offsetters. This Vancouver-based organization supports renewable energy and forest carbon projects across the globe.

“At the start of the summer, we pledged that HEXO would not only become carbon neutral, but that we would also offset the personal carbon emissions generated by every one of our employees. Today we are proud to say we have achieved our goal, setting a new standard in sustainability for our industry,” said HEXO Corp. CEO and Co-founder, Sébastien St-Louis. “Consumers and investors demand greater environmental and social integrity from companies. We are proud to share our commitment to sustainability and support our consumers’ ability to purchase products that align with their values.”

HEXO is a leading cannabis producer in Canada and one of the top three in the world. They wanted to focus on offset projects that would support environmental initiatives taking place in Canada and globally.

In Canada, HEXO is supporting the Create Bear Forest Carbon Project. This is the first carbon project in North America on traditional territory, with unextinguished Aboriginal rights and titles. Globally, HEXO is supporting a large-scale solar energy project in Asia and a forest conservation project in South Africa.

In addition to offsetting carbon emissions, HEXO has partnered with Dymapak and Plastic Bank® to offset 63,000 kilograms of plastic. They are also working towards collecting 8,000 kg of ocean-bound plastic, preventing 3.55 million plastic bottles from entering the world’s oceans.

HEXO set this goal for themselves in June and achieved it by September through carbon offsets. They have offset a total of 25,965 tons of carbon. If other companies across Canada and the world followed suit, it is safe to say many more can achieve carbon neutrality.

The carbon market is expected to reach $22T by 2050. Success stories such as HEXO will only increase interest and growth. And, after seeing these results, there is no doubt that offsetting carbon is, and will continue to be, integral in the fight against climate change.

Carbon Capture Companies are sucking up CO2 and Investor Interest

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Carbon Capture Companies are sucking up CO2 and Investor Interest

Climeworks, a Swiss-based company that currently owns the world’s largest Direct Air Capture plant, are seeing a boost in interest from governments and investors alike. The reason? We are in a “code-red” climate crisis, and these organizations know it.

In early September, Climeworks opened their new plant, Orca, the largest in the world. It is expected to remove 4,000 tons of carbon from the air annually, using giant fans equipped with filters. Once captured, the carbon is then pumped deep underground, where it is turned to stone.

Last month, Climeworks won a $10 million deal to sell carbon credits to Swiss Re to help the reinsurance giant reach net-zero emissions. Other clients include Microsoft, Stripe, and Audi.

According to Co-Founder and Co-CEO Christoph Gebald, “When we started in 2009, many people were against, or recommended not to proceed with direct air capture. It’s a stark contrast with now.”

With interest in direct capture so high, Climeworks plans to build a second, larger plant in Iceland.

Backers of these technologies say that they need governments to support them through subsidies and fast. The price tag for carbon removal projects is high. Demand is only expected to increase after the U.N. Intergovernmental Panel on Climate change (IPCC) constituted a “code-red for humanity.”

U.S. President Joe Biden has proposed spending $3.5 billion on four different direct-air capture hubs. And, in July, Kansas-based engineering firm Black & Veatch won $2.5 million from the U.S. Department of energy for the research and development of a project using Global Thermostat’s technology to capture 100,000 tons of carbon each year.

Canadian-based company Carbon Engineering is working on a facility to capture up to a million tons of carbon annually in the U.S. They are also working alongside British firm Storegga on a plant in Scotland that could capture between 500,000 and one million tons each year as well.

Between direct air capture and carbon offsets – which are expected to hit $22T by 2050, a net-zero future feels within reach.

Millions May Move Due to Climate Change

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Millions May Move Due to Climate Change

The World Bank’s latest Groundswell report found that over 216 million people could move within their countries by 2050, as they seek refuge due to climate change.

If you are wondering why climate change would cause people to move, you are not alone. Many are confused about how climate change and mass migration relate.

Though they hear about climate change daily, they don’t fully understand how it can impact their lives. So, this report and a previous report by Groundswell are important.

You see, climate change doesn’t just affect wildlife and nature. It affects people who live within the environment, too. So, when these changes take place, it upsets the dynamics between populations and their economic development.

Just think, as water becomes less available or crops cannot be produced, people flee. People do not have water for basic needs; farmers do not have water to grow crops. Food becomes scarce, and economic opportunity is limited. Same when an area has rising sea levels or extreme weather – people cannot live where their safety is at risk.

If climate change continues, can you blame people for leaving areas most impacted? Most would have to find somewhere better to live – for the sake of themselves and their families. The trouble is, where will they all go?

According to Groundswell, mass migration patterns will emerge in 2030 and increase in intensity by 2050. Unfortunately, many areas may not have the infrastructure or resources to support these booming populations. This can place existing residents at risk, especially the most vulnerable.

Both Groundswell reports provide policy recommendations that can help regions slow and prepare for migration. However, quick, and targeted action across the globe to combat climate change could reduce these patterns by 80%. And let’s face it – reducing these patterns is really the best option. At the end of the day, people do not want to leave their homes – they just want to have the best lives possible within them.

The report’s lead authors, Kanta Rigaud and Viviane Clement believe there is hope. “Cutting emissions and ensuring that development is green, resilient, and inclusive is at the heart of curbing the human cost of climate change. At the same time, countries can also anticipate and prepare for the drivers of migration…by supporting communities to adapt in place by diversifying livelihoods or by facilitating mobility when needed.”

Carbon offsets may be the best solution. They help reduce carbon within the atmosphere and can boost socio-economic opportunities in areas most at risk.

Based on Groundswell’s latest report, it will be interesting to see how various regions react and prepare. The data is there: climate change is a significant threat to civilization as we know it. We can no longer idly sit by.

The time to act against climate change is now.

1st Carbon Credits Produced by State Run Trees

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1st Carbon Credits Produced by State Run Trees

The Bluesource/DNR Big Wild Forest Carbon Project will be the first forest in the United States to be state-run and produce carbon credits at the same time.

The forest covers 3.9 million hectares of state-run property in Michigan.

DTE Energy (DTE), the largest power supplier in Michigan, and The Department of Natural Resources (DNR) of Michigan came to an agreement regarding the project.

As a result, DTE will severely reduce its carbon footprint. The DNR will also add around $10 million dollars of revenue streams.

Following the announcement, the Governor of Michigan, Gretchen Whitmer said “To meet our long-term commitment to decarbonization, we need to utilize innovative partnerships to increase revenues for land and climate programs.”

Michigan can increase offsets by producing more carbon credits but also produce further revenue from the sale of carbon credits.

Each tree absorbs up to 48 pounds of carbon emissions. A tree that is 40 years old can store 1 ton of carbon. As a result, 3.9 million hectares of land full of trees would make a significant impact on emissions in Michigan.

DTE is aiming to be carbon neutral by 2050. As well, DTE will start receiving carbon credits in 2022 in exchange for payments to the state of Michigan. With the carbon race heating up, every measure is required.

European Central Bank to Examine Banks’ Expose to Climate Risk

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European Central Bank to Examine Banks’ Expose to Climate Risk
The European Central Bank (ECB) will examine large banks’ trading operations as part of its climate stress tests next year.
 
The ECB, which has not yet disclosed the criteria of its tests. It is expected to include a review of the operational & reputational risks that banks face.
This comes after determining that a review of the loan books alone would not provide enough insight into the exposure to climate change.
 
Inquiring into banks’ trading practices is an additional obstacle for an industry that has already warned that it would be unprepared for next year’s climate stress test.
 
Politicians in Europe want banks to play a crucial role in combating climate change by diverting capital away from polluters.
The ECB is requesting more information than other central banks and has increased pressure on the industry to fulfill the deadline.
 
Banks with carbon-intensive balance sheets may face increased capital requirements. This could in turn reducing their ability to pay dividends.
 
The ECB is also asking banks for data on emissions connected with their revenue. This is an approach that the Bank of England omitted for its climate tests this year due to a lack of relevant data.
 
EU banks will have to estimate the carbon footprints of their interest and fee income. The banks will also have to provide data on their biggest clients that they provide loans to.
 
This additional disclosure is another layer of complication to the procedure. But the extra data is expected to allow the ECB to see what would happen to portfolios if they are subject to the losses of carbon-intense companies.
 
Both the Bank of England and the ECB are encouraging lenders to use a 30-year horizon when analyzing their balance sheets and the risks associated with a transition away from polluting industries.
 
The Bank of England is requiring banks to also assess physical risks such as extreme weather or wildfires over a three-decade horizon.

Chevron Triples its Low-Carbon Investment to $10 Billion

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Chevron Triples its Low-Carbon Investment to $10 Billion

Chevron recently announced a $10 billion dollar investment into low carbon business initiatives. Half of that budget will be spent on reducing emissions from fossil fuel initiatives.

Here is the breakdown of the investment:

    • $3 billion for Carbon capture and offsets
    • $2 billion on reducing greenhouse gas
    • $3 billion on renewable fuels
    • $2 billion on hydrogen energy

To achieve this Chevron will increase:

    • Renewable fuels production to 100,000 barrels per day
    • Renewable natural gas output to 40 billion British thermal units (BTUs) per day.
    • Hydrogen production to 150,000 tonnes per year to provide industrial, power, and heavy-duty transportation clients
    • Carbon capture and offsets to 25 million tonnes per year.

This $10 billion investment’s goal is to reduce greenhouse gas emissions from its oil and gas production by 35 percent by 2028.

The company will be releasing its climate report later this year and will revisit its net-zero goal at that time.

Critics have stated that Chevron’s focus is on offsetting emissions from oil and gas production rather than lowering oil output.

European oil companies have set the benchmark for the transition away from fossil fuels by investing more in renewables and meeting 2050 emission objectives.

Chevron CEO, Michael Wirth, said the only a small percentage of the company’s shareholders presently support a European oil company strategy of investing in less lucrative solar and wind power.

US-based Chevron, Exxon, and Occidental Petroleum have also pledged to cut carbon emissions by supporting carbon capture and storage and doubling down on oil.

Commercial Real Estate Investment Firm to Offset Carbon Internally

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Commercial Real Estate Investment Firm to Offset Carbon Internally

The commercial real estate industry contributes between 30% and 40% of global carbon emissions each year.

To combat the amount of carbon being pumped into the atmosphere, a property trust has chosen to make an investment this week that could revolutionize the commercial real estate industry.

Standard Life Investments Property Income Trust (SLI) purchased 1,447 hectares (3,575 acres) of land in Cairngorm National Park in Scotland.

The objective is to plant 1.5 million trees to offset carbon emissions from its property portfolio. Their market cap is currently listed as £275 million.

While commercial real estate companies have been looking into energy-efficient retrofitting, solar installations, and carbon credit purchases, SLI has taken carbon offsetting to the next level by offsetting their own carbon themselves.

They purchased the property for £7.5 million, with the cost of planting trees covered by grants.

SLI is paying approximately £38 per ton of carbon (about $53 US dollars per ton). Since the global carbon market is expected to boom to $22T by 2050, it’s safe to say that SLI sees potential for growth and profits. The project is expected to offset 195,630 tons of carbon until 2060 – representing 73% of the company’s carbon output.

In addition to this land purchase, SLI installed a major Photo Voltaic (PV) solar panel scheme on one of its assets. The panels are expected to save the equivalent of 229 tons of carbon in the first year. SLI is also looking to roll out additional solar panel installations across its portfolio.

With environmental, social, and governance (ESG) issues at the forefront of SLI’s mind, Jason Baggaley – SLI’s Manager – has recently sold several older assets, utilizing funds to invest within more sustainable properties.

Reducing carbon emission continues to be at the top of consumer, company, and government agendas. SLI’s forward-thinking initiatives should present a lucrative opportunity for years to come. If more commercial real estate companies follow suit, carbon emissions will drop, revenues will increase, and the environment will improve.

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