Microsoft Leads as Carbon Removal Credits Hit 8 Million Tonnes in 2024

Jennifer L
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0
Microsoft Leads as Carbon Removal Credits Hit 8 Million Tonnes in 2024

Carbon removal credits are becoming a key tool for tackling climate change. The report from CDR.fyi shows that the carbon dioxide removal (CDR) market grew significantly in 2024. Carbon removal credits rose 78% to 8 million tonnes. This big rise shows more interest in carbon removal solutions for global climate action.

Carbon removal credits are different from regular carbon offsets. Instead of balancing emissions, they help fund projects that take CO₂ out of the air. This article explores the key trends, challenges, and outlook for the CDR market based on the latest findings from CDR.fyi. 

Big Tech Fuels CDR Market Boom 

Total CDR purchases reached nearly 8 million tonnes in 2024, a 78% increase over 2023, per CDR.fyi analysis. However, the number of unique purchasing companies grew by only 7%, from 202 to 216. 

Durable carbon removal credits CDR purchases 2024
Source: CDR.fyi report

The growth was primarily driven by repeat buyers such as Microsoft, Google, and Stripe. These big tech companies, along with other Frontier buyers accounted for about 80% of 2024 purchases. Their purchases highlight a high concentration of CDR demand. 

These companies lead in carbon removal investments, backing projects that grow new technologies. Their ongoing support is crucial. However, the few new players in the market raise worries about long-term stability.

  • Microsoft led the market with 5.1 million tonnes, making up 63% of the total volume. This is a small drop from its 70% share in 2023.
Top 20 CDR purchasers 2024
Source: CDR.fyi report

Microsoft, Google, Meta, and Salesforce created the Symbiosis Coalition. They promised to purchase 20 million tonnes of nature-based CDR by 2030.

CDR Supply Struggles to Keep Up

While the market is growing, demand remains insufficient to support the increasing number of suppliers. Only 36% of CDR suppliers listed on CDR.fyi registered a sale in 2024. Many suppliers might struggle to get funding without new buyers. This could lead to consolidations and bankruptcies in 2025 and 2026.

A few buyers dominate the market. If their priorities or financial plans change, progress could slow. Getting more industries on board is key for future growth. This includes manufacturing, transportation, and retail.

Microsoft and Frontier accounted for 12 of the top 20 purchases in 2024. Google increased its direct purchases, totaling 500,000 tonnes. Meta pledged to buy $35 million in carbon credits over the next year. The tech giant is still unsure how much to allocate to durable CDR or nature-based solutions.

top 10 CDR buyers 2024
Source: CDR.fyi report

Among suppliers, Stockholm Exergi’s 3.3 million-tonne sale to Microsoft set a new record. Ørsted expanded its relationship with Microsoft with an additional 1 million-tonne sale. Meanwhile, CO280, Terradot, and Gigablue made significant market entries with first-time sales.

top 10 CDR suppliers 2024
Source: CDR.fyi report

Meanwhile, venture investments in the CDR sector dropped 30% year-over-year in 2024 as investors exercised caution. Many are waiting to see which suppliers secure sales before committing additional funding. Suppliers who can’t make enough money might struggle financially. This can slow down innovation and reduce market variety.

Price Wars: Cheap vs. Costly CDR

The price of CDR credits remains a critical factor influencing market growth. The weighted average price per tonne decreased from $490 in 2023 to $320 in 2024. 

Remarkably, credit prices varied significantly based on removal technology. Biochar-based removal credits were cheaper. In contrast, direct air capture (DAC) credits stayed costly because of high tech and operation expenses.

Biochar, which converts waste into carbon that can be stored in soil, has prices ranging from $50 – $150 per tonne. In contrast, DAC, which extracts CO₂ from the air and stores it underground, remains costly, with prices going beyond $600 per tonne. 

The big cost difference slows down the use of DAC. It’s a great option for permanent carbon removal, but it’s still not widely adopted.

CDR pricing change 2023 to 2024
Source: CDR.fyi report

Biochar and Mineralization saw price increases, while other methods experienced declines. Most notably, mineralization saw a whopping 123% price increase, from $370 to $827 per tonne. 

The cost reductions indicate a narrowing gap between supplier and purchaser expectations. However, high-cost durable CDR methods may struggle to compete without additional buyer incentives.

The high price of high-quality CDR solutions continues to be a barrier to wider corporate adoption. To make CDR more accessible, costs must come down. This can be done through technological advances and economies of scale. This will help a wider range of companies and industries use CDR in their climate goals.

Durable CDR deliveries hit 318.6K tonnes in 2024. This is a 120% rise from 2023. However, the delivery-to-booked volume ratio was just 4.4%. Many companies are still increasing production. Biochar accounted for 86% of total deliveries. As other methods mature, the overall delivery rate is expected to rise.

CDR credits deliveries 2024
Source: CDR.fyi report

Policy Push and Tech Breakthroughs

Government policies and incentives are critical to sustaining growth in the CDR market. Some governments have taken proactive steps to integrate CDR into their climate strategies. The United States has increased funding for CDR projects with initiatives like the US 45Q tax credit. Meanwhile, the European Union is creating a certification framework for carbon removal. 

Denmark and Sweden’s BECCS subsidies have helped build expensive facilities. But, the absence of global standards makes it hard for companies to deal with regulations.

Better policy clarity and uniform regulations may enhance corporate confidence and promote broader adoption. 

Technology is also making carbon removal solutions more efficient and affordable. In 2024, DAC cut costs. Biochar and ocean-based CDR projects also gained traction. 

In addition, ocean-based carbon removal has gained interest due to its potential for large-scale impact. Techniques like ocean alkalinity enhancement boost the ocean’s ability to absorb CO₂. They’re currently being explored. 

However, scalability remains an issue. Deploying these technologies on a large scale needs a big investment. Many companies hesitate to invest without better financial incentives. If costs keep falling because of new technology, more companies may invest in CDR solutions. This could speed up market growth.

What’s Next for CDR? Challenges and Opportunities

Despite strong growth, the CDR market faces key challenges:

  • Dependence on a Few Buyers: The market needs new participants to ensure long-term stability.
  • High Costs: Prices must come down for broader adoption.
  • Regulatory Uncertainty: Standardized policies could provide clearer incentives for companies to invest.
  • Technological Barriers: Further advancements are needed to improve scalability and affordability.

However, there are also opportunities, namely:

  • Government Support: Increased funding and policy incentives could drive growth.
  • Innovation: Technological improvements could lower costs and enhance effectiveness.
  • New Market Entrants: Demand could expand significantly if more companies commit to CDR.

The carbon removal credits market in 2024 saw impressive growth, but it still faces hurdles. More companies should enter the market; costs must fall, and rules must change. With continued investment, innovation, and policy support, CDR could become a key component of global climate action, helping meet net-zero goals more effectively.

Carbon Markets in 2025: A New Era of Accountability, Quality, and Transparency

Saptakee S
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Carbon Markets in 2025: A New Era of Accountability, Quality, and Transparency

This year, companies are improving their climate strategies by integrating carbon offsets. The focus is on projects that create real environmental benefits. With public scrutiny increasing, transparency and quality are top priorities. Top market analysts predict that in 2025, the carbon market will shift. It will emphasize credible, high-integrity solutions. This change will create a stronger, more reliable system for achieving climate goals.

Clearer Rules for Offset Use in 2025

As per Wood Mackenzie, in 2024, independent standards updated 15 offset methods to align with best practices. These changes involve new methods for carbon removal and regional programs.

  • For example, the Science-Based Targets initiative (SBTi) requires companies to cut emissions by 90% across their value chains.

In 2025, SBTi will decide if offsets can apply to Scope 3 emissions or if they will encourage early investments in carbon removal. This decision will provide much-needed clarity for corporate climate plans.

As the year progresses, we can expect more advancements in these methods. They will boost the market’s credibility and reliability.

VCMs Embrace the Shift to Higher-Quality Carbon Credits

MSCI’s latest report on sustainability and climate trends shows big improvements in the quality of voluntary carbon market projects over the past year. Based on their carbon project ratings by mid-2024:

  • Nearly 50% of retired credits were rated B or lower, while only 8% were rated A or AA.

  • Although no projects achieved the highest AAA rating, the progress was evident.

Between Q2 2022 and Q2 2024, the share of the lowest-rated credits (CCC) dropped from 29% to 15%. The use of A or AA credits doubled. This shows a clear shift toward higher integrity and quality in carbon credits.

They analyzed 8,844 firms in the MSCI ACWI Investable Market Index (IMI) and found that firms using carbon credits reported their Scope 1, 2, and 3 emissions more transparently. Those firms were also more likely to set and achieve emission reduction targets more efficiently.

This analysis shows that carbon credits are usually part of larger climate strategies. They are not a replacement for cutting emissions.

Carbon Market

Core Carbon Principles Boost Credibility

In 2024, the ICVCM launched Core Carbon Principles (CCPs) to enhance the quality of carbon credits. These principles set strict standards, helping buyers choose reliable offsets. The ICVCM also labeled high-quality projects, guiding businesses toward credible options.

By January 2025, it planned to evaluate 90% of the market, ensuring informed decisions and better-quality credits.

Compliance Markets Go Global

India and Japan have launched hybrid emissions trading systems. Also, ICAO approved six offset standards for aviation under CORSIA. However, a shortage of carbon offsets has pushed prices higher.

Wood Mackenzie revealed,

  • Airlines need over 135 MtCO2e of offsets to keep emissions below 85% of 2019 levels, which highlights more need and demand for solutions.

Clearer guidelines, stricter standards, and rising demand are key for this year’s carbon markets. To achieve carbon reductions, businesses must be proactive and stay focused on their climate goals.

corsia CARBON MARKET

Carbon removal methods are gaining popularity. Two key methods are Direct Air Capture (DACCS) and Bioenergy with Carbon Capture and Storage (BECCS). They are known for their strong impact. These methods can be costly, but better techniques are making them more practical. Still, financing is a major barrier to scaling these technologies.

The graph shows how average prices and the share of carbon offset retirements have changed from 2015 to 2024. Removal offsets saw a sharp rise in prices starting in 2020, reaching about $11 per tCO2e by 2024.

This spike suggests a growing demand for removal offsets, driven by a stronger focus on long-term sustainability and effective carbon reduction solutions.

carbon offset price

Carbon Border Taxes: Expanding Beyond the EU

In 2025, the EU is set to provide updates on expanding its Carbon Border Adjustment Mechanism (CBAM). Key areas to watch include:

  • Coverage of indirect emissions in steel, aluminum, and hydrogen sectors.

  • Inclusion of transportation emissions and other materials like organic chemicals.

  • Timeline for adding other sectors under the EU Emissions Trading System (ETS) by 2030.

Importers will soon face financial obligations under CBAM, making carbon accounting essential. The EU will provide flexibility for emissions data, possibly exempting small and medium enterprises. The CBAM Registry will open for non-EU operators in 2025, encouraging companies to work closely with their suppliers.

Beyond the EU, other nations are also adopting carbon border taxes. The UK and Australia are moving forward with their CBAM plans in 2024. Meanwhile, Chile and Taiwan are adding carbon border mechanisms to their pricing systems.

In the US, support is growing for a carbon levy like the Foreign Pollution Fee Act. This is happening alongside a rise in protectionism.

COP29: A Boost for Global Carbon Markets

Last year’s COP29 is driving major growth in global carbon markets by advancing Article 6. It allows governments to buy offsets to meet their climate targets (NDCs). By February 2025, countries will update their NDCs. This will clarify how carbon offsets fit into their plans.

Article 6.2

Article 6.2 enables nations to trade Internationally Transferred Mitigation Outcomes (ITMOs). While some agreements are already in place, low-quality carbon projects remain a concern.

A better collaboration of governments, UN bodies, and voluntary carbon market (VCM) initiatives will be crucial to set clear standards and enhance transparency in carbon trading.

Paris Agreement Carbon Market (PACM)

The Paris Agreement Carbon Market (PACM) helps developing countries build strong carbon trading systems. At COP29, leaders agreed on high standards for project methodologies and social impacts.

Both MSCI and Wood Mackenzie expect detailed rules by 2025. They predict PACM credits will likely enter the market by late 2025. This will offer businesses new opportunities to align with the Paris Agreement.

Subsequently, companies must choose between adopting Article 6’s stricter standards or improving VCM systems. Investors might also face a similar dilemma—wait for Article 6 rules or utilize the current VCM. As Article 6 is expected to boost market credibility, it will also raise future demand by providing clearer guidelines and higher standards.

Governments to Tighten Reins on Carbon Markets

In 2025 and beyond, governments will play a bigger role in carbon markets. They aim to ensure transparency and accountability. For example, the EU plans to launch a Carbon Removal and Carbon Farming (CRCF) framework in 2025. This will include new methodologies. Meanwhile, the US and UK have introduced guiding principles for voluntary carbon markets.

The EU’s Green Claims Directive also bans offset-only claims. Now, European Sustainability Reporting Standards (ESRS) and International Financial Reporting Standards (IFRS) require detailed carbon offset disclosures. Yet, companies will need to adapt to meet these rising transparency standards.

The Carbon Credit Market Beyond 2025

By 2030, the carbon credit market might grow to between $7 and $35 billion, says MSCI. Looking ahead to 2050, the forecast is even brighter, with estimates of $45 to $250 billion. Key trends fueling this growth include:

  1. Corporate Climate Goals

  2. Rising Demand for Carbon Removal Credits

  3. Higher-Quality Credits

carbon market

As carbon markets continue to evolve, 2025 could be a pivotal year. Companies will likely adopt higher standards and clearer rules. They will also use innovative carbon removal technologies. With stronger government involvement and improved benchmarks, the market is poised for growth. This growth will ensure greater integrity and reliability.

Lithium’s Comeback in 2025: Will Surging EV Demand Fuel the Next Price Boom?

Jennifer L
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0
Lithium’s Comeback in 2025: Will Surging EV Demand Fuel the Next Price Boom?

In 2025, the lithium market is showing signs of recovery after a period of uncertainty. Lithium is key for electric vehicle (EV) batteries and consumer electronics. It is vital for the clean energy transition. 

The global lithium market is shaped by factors like EV growth, supply changes, and geopolitical issues. Here’s a closer look at what to expect for lithium this year and the near future.

EV Sales Surge: Can Lithium Keep Up?

A major factor boosting lithium demand is the rise in sales of plug-in electric vehicles (PEVs). This includes both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). 

In 2024, global PEV sales reached 16.5 million units, a 28.5% increase from the previous year, per S&P Global data. A significant portion of this growth came from China, which accounted for 86% of the global increase in PEV sales. 

The US also played a role, contributing 5.9%, while the European Union experienced a slight decline in sales due to policy changes.

In particular, China’s EV market has been bolstered by competitive pricing, government incentives, and a growing variety of models. As more consumers switch to EVs, the demand for lithium, a key component in EV batteries, continues to rise. 

This shift is crucial for cutting global carbon emissions. Electric vehicles are a cleaner option than traditional internal combustion engine (ICE) vehicles.

Lithium Prices on a Rollercoaster

Lithium prices have been volatile, with a rebound seen in early 2025. The price of lithium carbonate, used in batteries, rose by 4.5% in January 2025. This increase came from higher demand for restocking before the Lunar New Year holidays. Maintenance at many lithium refineries has also added to supply issues.

Despite this, the overall outlook for lithium prices remains cautious. In the face of a growing supply surplus, prices are expected to stabilize between $10,000 and $11,300 per ton through 2029. 

Supply growth may outpace demand for now, but market conditions could change by the decade’s end. A possible supply deficit might drive prices up.

The Lithium Power Struggle: US vs. China

Geopolitics plays a significant role in the lithium market. The US and China are competing for control in EV and battery tech. To protect their industries, both countries are imposing trade restrictions. 

In January 2025, China suggested restricting lithium extraction and refining technologies. This step helps the world’s largest carbon emitter gain more control over the global lithium supply chain. This is important for lithium-iron-phosphate (LFP) batteries.

China’s soaring demand for electric vehicles (EVs) has fueled a sharp increase in its lithium reserves. It is the largest EV market in the world and so it needs a lot of lithium for batteries. This demand is pushing the country to speed up exploration and resource development.

annual raw material demand China
Chart from ICCT

China’s lithium reserves have nearly tripled, making the country the second-largest holder worldwide. Demand is set to increase by 2025. This expansion shows China’s drive for more self-reliance in the electric vehicle supply chain.

The US, in response, is focusing on strengthening its domestic mining and refining capabilities. US President Donald Trump’s “Unleashing American Energy” order seeks to simplify permits for mining. This change may boost lithium production in the country.

However, the process of developing new lithium mines in the US is slow. On average, it takes around 16 years for a mine to go from discovery to production. This long timeline could limit the US’s ability to meet its domestic demand for lithium in the short term.

Surprise Lithium Giants: Who’s Joining the Race?

New lithium producers are joining traditional ones like Australia and Chile. For example, Saudi Arabia is investing heavily in lithium projects. 

In December 2024, Ma’aden, Saudi Arabia’s state-owned mining company, teamed up with the local startup Lithium Infinity. They will extract lithium from brine. This partnership helps Saudi Arabia diversify its economy and boost its role in the EV and battery markets.

This investment signals the growing global interest in securing reliable sources of lithium. Other countries want to boost their lithium production. Several African and European nations are making deals to develop lithium resources.

Challenges Ahead: Economic Uncertainty

The EV market is growing quickly, but the lithium industry faces challenges. Economic issues like inflation and changing government policies may lower consumer spending and demand for lithium. 

global lithium carbonate equivalent demand 2017-2027

For instance, in the US, President Trump’s policies might slow EV adoption by reversing climate goals. If the federal government cuts the $7,500 tax credit for EV buyers, electric vehicles may become more expensive. This change could hurt lithium demand.

In Europe, the situation is equally uncertain. The upcoming election in Germany could influence the future of the EV market. 

Germany plays a key role in Europe’s car industry. The election results could impact its push for electric mobility. The uncertainty around policy shifts in key markets like the US and Germany could result in fluctuating demand for lithium.

Lithium’s Next Chapter: Boom or Bust?

It is expected that the lithium market will face a surplus in 2025, as supply growth continues to outpace demand. However, the situation could change in the latter part of the decade, with a potential supply deficit driving prices higher. 

In 2025, the lithium market is navigating a period of uncertainty and opportunity. Prices should stabilize soon, but the long-term outlook looks bright. Strong demand from the electric vehicle industry drives this positivity. As companies and countries work to tackle climate-related issues, lithium becomes vital for the clean energy shift.

Amazon’s Q4 Triumph: Revenue Rises, Sustainability Shines

Saptakee S
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Amazon’s Q4 Triumph: Revenue Rises, Sustainability Shines

Amazon ended 2024 with strong sales, record-breaking revenue, and impressive profits. However, the stock market reacted cautiously due to a less optimistic forecast for early 2025. However, the retail giant focused on financial performance and made key strides in sustainability and innovation.

Amazon’s Holiday Sales Hit New Highs

The 2024 holiday season proved to be a major win for Amazon. The company reported $187.8 billion in sales for the fourth quarter, up 10% from 2023 and profits doubled to $20 billion or $1.86 per share. It exceeded analysts’ expectations of $1.49 per share.

Andy Jassy, President and CEO of Amazon, also affirmed by saying,

“The holiday shopping season was the most successful yet for Amazon and we appreciate the support of our customers, selling partners, and employees who helped make it so.”

Early Discounts, More Spending

This strategic approach to holiday sales contributed massively to its success. By offering deals as early as October, the company attracted early shoppers. It also helped maintain momentum through key events like Black Friday and Cyber Monday. This strategy made Amazon a top shopping spot for the holidays.

AWS Stands Out

Notably, Amazon Web Services (AWS), the company’s cloud computing arm, was a standout performer. AWS generated $10.6 billion in operating income, a rise from $7.2 billion in 2023. This growth highlighted the increasing demand for cloud and AI technologies.

For the entire year, Amazon recorded $638 billion in revenue, an 11% increase from 2023. Despite challenges like fluctuating exchange rates, the company maintained a consistent growth trajectory.

Andy Jassy further expressed himself by saying,

“When we look back on this quarter several years from now, I suspect what we’ll most remember is the remarkable innovation delivered across all of our businesses, none more so than in AWS where we introduced our new Trainium2 AI chip, our own foundation models in Amazon Nova, a plethora of new models and features in Amazon Bedrock that give customers flexibility and cost savings, liberating transformations in Amazon Q to migrate from old platforms, and the next edition of Amazon SageMaker to pull data, analytics, and AI together more concertedly. These benefits are often realized by customers (and the business) several months down the road, but these are substantial enablers in this emerging technology environment and we’re excited to see what customers build.”

Amazon revenue
Source: Amazon

2025 Forecast

Amazon expects first-quarter sales in 2025 to range from $151 billion to $155.5 billion. This shows a growth rate of 5% to 9% from last year. However, this outlook is below analysts’ expectations of $158.56 billion in revenue.

Amazon’s Commitment to Carbon Neutrality

Amazon is equally focused on sustainability. Its sustainability report revealed that in 2023, the company cut its carbon emissions by 3%. It reduced its carbon footprint to 68.82 MMT CO2e from 70.74 MMT CO2e in 2022. This was driven by an 11% drop in Scope 2 emissions and a 5% decline in Scope 3 emissions. However, Scope 1 emissions rose by 7% due to increased transportation fuel use.

Amazon also slashed its carbon intensity for the fifth year in a row. This means a 13% drop from 2022 levels. This progress shows its dedication to minimizing its environmental impact.

Amazon emissions
Source: Amazon

Renewable Energy Milestone

Additionally, Amazon is growing its renewable energy portfolio. This includes wind, solar, and new tech like small modular reactors. Its AWS is playing a crucial role in meeting growing energy demands.

Energy efficiency is a key focus for AWS data centers. Amazon collects data and designs systems to boost energy efficiency. This helps lower its carbon footprint. The company is also increasing battery storage capacity to stabilize energy grids and speed up the shift to clean energy.

It also invests in green tariffs and utility contracts to launch new renewable projects.

amazon renewable energy
Source: Amazon

Electrifying Transportation

Transportation is a critical area for Amazon’s emissions reduction strategy. The company plans to deploy 100,000 electric delivery vans by 2030. These vans will come from Rivian and other manufacturers. These efforts are transforming Amazon’s logistics network while cutting transportation-related emissions.

Investing in Carbon-Neutral Solutions

Amazon’s commitment to sustainability goes beyond emissions reduction. The company invests in new technologies through its $2 billion Climate Pledge Fund. This fund helps reduce the cost of decarbonization in various industries.

This initiative also supports startups developing solutions for hard-to-transform sectors and unavoidable emissions. Such strategies include:

  • Nature-Based Solutions: The company supports projects to reduce deforestation and restore ecosystems. These initiatives capture carbon, protect biodiversity, and benefit local communities.

  • Carbon Removal Technologies: Amazon is developing scalable solutions. These include direct air capture, bioenergy with carbon capture and storage (BECCS), and mineralization. These technologies remove CO2 from the air and address difficult emissions.

Amazon’s strong performance in 2024 shows its ability to balance growth and sustainability. It sets benchmarks for innovation and environmental responsibility. Despite challenges, its focus on efficiency, renewable energy, and decarbonization makes it a leader in creating a sustainable future.

Amazon-backed X-Energy Raises $700M: A Game-Changer for Small Modular Reactors (SMRs)

Jennifer L
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Amazon-backed X-Energy Raises $700M: A Game-Changer for Small Modular Reactors (SMRs)

X-Energy, a leading company in advanced nuclear reactor and fuel technology, closed a $700 million Series C-1 financing round. This increase follows a $500 million raise in October 2024. The new funds will speed up the growth of their Small Modular Reactor (SMR) technology. The company’s Xe-100 reactor, which could transform the future of clean energy, is at the center of this push.

X-Energy: Powering the Future with Next-Gen Reactors

Founded in 2009, X-Energy is located in Rockville, Maryland. The company leads in nuclear technology, creating reactors and fuel systems for clean energy. 

Amazon-backed X-Energy raised $700 million from various investors, such as Segra Capital Management, Jane Street, Ares Management, Emerson Collective, and Amazon’s Climate Pledge Fund. This funding is key for the company’s goals, including the following:

  • complete reactor designs, 
  • obtain licenses, and 
  • build the TRISO-X fuel facility in Oak Ridge, Tennessee.

Kam Ghaffarian, Ph.D., Founder and Executive Chairman of X-Energy, emphasized the importance of the raise, stating, 

“We are proud to have gained the additional support from our industry, government, and investment community… We look forward to continuing to advance and scale our technology and realize our vision of fulfilling the growing energy needs of future generations.”

X-Energy’s TRISO-X fuel is a key component of its SMR technology. This innovative fuel uses uranium particles with a tough shell. It can handle high temperatures without melting. This makes the Xe-100 reactor safer and more efficient than old reactors. It removes the need for large containment systems. Plus, the reactor can run continuously for up to 60 years.

Xe-100 Reactor: Revolutionizing the SMR Landscape

The Xe-100 reactor, which is powered by the TRISO-X fuel, is one of the most advanced Small Modular Reactors in development today. 

  • Each unit produces 80 megawatts of electricity, with plants typically consisting of multiple units to generate between 320 MW to 960 MW.

The modular design of the Xe-100 reactor is particularly attractive because it allows for easier transportation, faster construction, and more predictable costs. The technology also supports high-temperature steam production, ideal for both power generation and industrial uses, such as in chemical plants and data centers.

X-Energy is deploying its first Xe-100 plant at Dow’s UCC Seadrift Operations in Texas. This will be the first grid-scale advanced nuclear reactor in North America. The U.S. Department of Energy’s Advanced Reactor Demonstration Program supports it. The plant will deliver zero-carbon electricity and high-temperature steam for industrial use.

The company teams up with Amazon to add over 5 gigawatts of clean power by 2039. This partnership is vital for making SMRs a common energy source. Amazon’s investment supports its goal of reaching net-zero carbon emissions by 2040. This shows a rising interest in SMRs as a dependable, low-carbon energy option.

Why SMRs Are the Future of Nuclear Energy

Small Modular Reactors are poised to change the nuclear energy landscape. With a smaller footprint than traditional nuclear plants, SMRs can be deployed more quickly and at lower costs. This modular approach speeds up deployment. It’s faster than the multi-year timelines of larger reactors.

The flexibility of SMRs makes them an attractive option for a variety of applications. SMRs can power remote locations and industrial sites. They also boost renewable energy like solar and wind. As energy demand rises, especially in cloud computing, SMRs are viewed as a solution. Large data centers need stable and high energy output.

X-Energy’s Xe-100 reactor exemplifies the potential of SMRs. The modular design speeds up deployment and cuts down on construction risks and costs. This makes SMRs appealing to utilities and companies like Amazon. They need to meet rising energy demands while sticking to budgets and reducing environmental impact.

Billions Flow into SMRs as Demand Soars

The $700 million raised by X-Energy is part of a broader trend in the nuclear industry toward smaller, more affordable nuclear solutions. Interest in SMRs is rising worldwide. 

Governments and businesses want energy security and lower carbon emissions. Estimates suggest we could see up to 25 gigawatts of SMR capacity by 2030. By 2050, this could grow to 40 gigawatts if current policies stay in place.

SMRs are expected to play a crucial role in meeting the world’s energy needs while addressing climate change. They provide a low-carbon choice instead of fossil fuels. Their small size suits smaller grids or industrial sites. 

The International Atomic Energy Agency (IAEA) sees SMRs as a key technology for clean energy production. They can help produce reliable electricity to meet global energy needs.

In fact, a significant investment jump is anticipated in the coming years. From the current $5 billion market today, SMR investments could grow to $25 billion by 2030, totaling $670 billion by 2050. 

nuclear energy investment outlook by type 2050
Chart from the IEA

If SMR construction costs go down as expected, total capacity may reach 190 gigawatts by mid-century. This could lead to $900 billion in global investment.

The Road Ahead for SMRs

While SMRs offer immense potential, challenges remain. To unlock the full potential of SMRs, there’s a need to streamline regulations and cut construction costs. With ongoing investments from firms like X-Energy and rising support from governments and private sectors, SMRs will likely be vital in the future of nuclear energy.

X-Energy’s $700 million funding raise is just the beginning. As the company continues to develop and deploy its Xe-100 reactor technology, it will help pave the way for a new era in nuclear energy—one that is clean, safe, and reliable. 

Ford’s Q4 Success Overshadowed by EV Losses— What About its Carbon Reduction Goals?

Saptakee S
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0
Ford’s Q4 Success Overshadowed by EV Losses— What About its Carbon Reduction Goals?

Ford Motor Company ended 2024 with strong fourth-quarter results. This shows its growth and financial strength. However, the performance of its EV segment fell short of expectations.

Given that electric vehicles are central to Ford’s net-zero strategy, this raises an important question: Is Ford falling behind in its sustainability goals? Let’s study the revenue report and its sustainability outlook in detail.

Ford Closes 2024 with Strong Fourth-Quarter Performance

Revenue surged to $48.2 billion, marking a $2.2 billion increase from the same quarter in 2023. The company reported a net income of $1.8 billion, with adjusted EBIT reaching $2.1 billion. Operating cash flow came in at $3.0 billion, while adjusted free cash flow stood at $0.7 billion, highlighting its steady financial footing.

For the full year, Ford’s revenue rose by 5% to $185 billion.

The company finished the year with over $28 billion in cash and nearly $47 billion in liquidity. This gives them flexibility in an unpredictable market. However, there was disappointment in the stock market as shares fell after the Q4 earnings release.

Ford’s President and CEO Jim Farley said,

“Ford is becoming a fundamentally stronger company. We finished 2024 with a solid fourth quarter, capping the highest revenue year in Ford’s history. Our product portfolio offers the broadest powertrain choice. And Ford Pro, with its mid-teen margins, leading market position, and growing service and repair revenue, provides unique advantages for continued growth.”

Ford revenue
Source: Ford

Ford Pro Excels, Ford EV Disappoints

Ford Pro performed well, with revenue increasing by 15% to $66.9 billion. It earned $9.0 billion in profits, achieving a solid 13.5% margin. Software subscriptions increased by 27%, hitting close to 650,000 users. Also, telematics usage nearly doubled.

In 2024, Ford Blue’s revenue stayed the same at $101.9 billion. Higher prices made up for a 2% drop in sales after cutting low-profit products. The segment earned $5.3 billion in profits.

Ford’s EV segment struggled, losing $1.4 billion in the fourth quarter and $5.1 billion for the year. Despite selling about 105,000 EVs, generating $3.9 billion in revenue, losses exceeded sales.

Ford
Source: Ford

Ford’s 2025 Outlook: Modest Earnings and Cash Flow

Ford is expecting adjusted EBIT for 2025 to be between $7.0 billion and $8.5 billion, with adjusted free cash flow ranging from $3.5 billion to $4.5 billion. Capital spending is forecasted to be between $8.0 billion and $9.0 billion.

However, the company is preparing for some challenges due to market conditions. In the first quarter, Ford expects its adjusted EBIT to be nearly zero. This is because of lower sales, a less favorable product range, and ongoing launches at key U.S. plants like Kentucky Truck and Michigan Assembly.

Farley further added,

“In 2025, we expect to make significantly more progress on our two biggest areas of opportunity – quality and cost – as we enter the heart of our Ford+ transformation. We control those key profit drivers, and I am confident that we are on the right path to create long-term value for all our stakeholders.”

Ford’s Carbon Reduction Strategy for a Sustainable Future

Ford aims to cut greenhouse gas (GHG) emissions by boosting operational efficiency. Its Carbon Reduction Strategy aims to cut Scope 1 and 2 emissions by 76% by 2035, compared to 2017 levels.

  • To track progress, Ford also set a shorter-term goal to reduce these emissions by 18% from 2017 levels by 2023, focusing on its manufacturing operations.
Ford emissions
Source: Ford

In 2023, Ford exceeded its target, achieving a 49% reduction in manufacturing emissions, and a total of 47% across all facilities. These efforts are helping Ford stay on track to meet its 2035 target.

  • Additionally, its carbon-free electricity now accounts for 70.5% of its global manufacturing operations.
Ford carbon reduction
Source: Ford

Fuel Efficiency and Emission Cuts in Ford’s Vehicle Portfolio

Ford’s vehicle portfolio is increasingly focused on models with the greatest potential for reducing emissions. The company is working on improving fuel efficiency for its light- and medium-duty trucks while also offering fully electric and hybrid versions of popular models. Simply put EV adoption is an important element of its long-term decarbonization strategy

  • Data from the U.S. EPA shows that the real-world CO2 intensity of Ford’s light-duty vehicles in the U.S. improved by 21% for cars and 10% for trucks from 2017 to 2022.

One of Ford’s major projects includes developing hydrogen fuel cell technology for its medium- and heavy-duty vehicles. The company had partnered with the U.S. Department of Energy, to develop hydrogen fuel cell-powered Class-5 Super Duty trucks as part of the SuperTruck 3 program.

Ford fuel cell
Source: Ford

Ramping Up EV Production for Bigger Emissions Wins

Despite facing a drop in EV revenue, Ford would continue focusing on boosting its EV fleet. The plan includes battery-electric vehicles, hybrids, and fuel-efficient internal combustion engine (ICE) models. These options will help in areas where EV infrastructure is still growing.

  • Ford highlights that driving a Ford EV, using average U.S. grid power can cut GHG emissions by up to 62% when compared to a similar ICE vehicle.

This reduction occurs for two main reasons: the energy used to charge the vehicle and the lower emissions than regular gasoline cars.

In 2023, Ford sold nearly 280,000 hybrid vehicles, marking a 20% increase from the previous year. This growth shows that hybrids are becoming more popular. They are a lower-carbon choice compared to traditional vehicles.

Looking ahead, the shift toward EVs is expected to lead to even greater GHG savings as the electric grid becomes cleaner. As EVs become more affordable compared to traditional vehicles, it will also boost Ford’s market share in the low-emissions automobile domain.

China’s Renewable Energy Boom: A Record-Breaking Shift or Still Chained to Coal?

Jennifer L
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0
China’s Renewable Energy Boom: A Record-Breaking Shift or Still Chained to Coal?

China is making record-breaking progress in renewable energy. The country has already achieved its 2030 clean energy goal six years early. With massive investments and policy support, China is set to remain the global leader in renewable energy expansion. But can it sustain this rapid momentum while balancing energy security and economic growth?

Beating the Clock on Clean Energy: Surpassing Renewable Energy Targets

In 2020, China set a goal to install at least 1,200 gigawatts (GW) of solar and wind power by 2030. By the end of 2024, China had already surpassed this target, reaching this milestone 6 years ahead of schedule. This was made possible by aggressive investments, government policies, and a surge in solar and wind installations.

China’s solar capacity grew by an incredible 45.2% in 2024, adding 277 GW. Wind capacity also saw a strong increase of 18%, with an additional 80 GW installed. Overall, total power generation capacity rose by 14.6% in 2024, driven mainly by renewables.

China renewable growth, wind and solar Q3 2024

One major milestone was the completion of the Ruoqiang photovoltaic (PV) project. This massive 4-GW solar farm in the Taklamakan Desert is one of the world’s largest solar power projects. It is part of China’s broader strategy to peak emissions before 2030 and transition toward cleaner energy sources.

This rapid progress is due to strong government support, record investments, and local manufacturers producing affordable solar and wind components.

Leading the World in Renewable Investments

China is the world’s largest market for low-carbon energy investment. In 2024, the country attracted $818 billion in clean energy investments—more than the combined total of the U.S., the European Union, and the UK. This accounted for ⅔ of the global increase in clean energy investments that year.

The world’s biggest carbon emitter’s commitment to renewables is reshaping its energy mix. In June 2024, wind and solar power combined surpassed coal in installed capacity for the first time. 

China’s 14th Five-Year Plan set a goal for renewables to supply 33% of its electricity by 2025. By 2026, solar capacity alone is projected to overtake coal as China’s leading energy source, with 1.38 terawatts (TW) of solar power expected—150 GW more than coal.

China forecast renewable power generation 2050.jpg

Remi Eriksen, CEO of energy consultancy DNV, once remarked that:

“Intense policy focus and technological innovation are transforming China into a green energy powerhouse.”

And one of these innovations is in the field of nuclear power.

Nuclear Power and SMRs: A Game-Changer for China’s Energy Future?

China is also investing heavily in nuclear power, with 29 reactors under construction, totaling 33 GW of capacity. This makes up nearly half of all new nuclear projects worldwide. By 2030, China will surpass the U.S. as the largest nuclear power producer, with a projected capacity reaching up to 320 GW by 2050.

China nuclear power capacity under construction

Small Modular Reactors (SMRs) are a key part of China’s nuclear strategy. The country’s first SMR, a high-temperature gas-cooled reactor (HTR-PM), began operations in 2023. Other SMR designs, including the ACP100 and NHR200, are under development. 

These compact reactors will support industrial heating, electricity supply, and district heating. By 2050, China’s SMR capacity is expected to reach 35 GW, making it the leading global market for this next-generation nuclear technology.

number of SMRs announced China

China is quickly growing its renewable energy and advancing nuclear power. This makes it a leader in clean energy worldwide. Even though it still uses coal, the focus on renewables and nuclear is cutting carbon emissions a lot.

The Road to Net Zero: Can China Meet its 2060 Goal?

China has set ambitious climate goals. The country aims to peak its carbon emissions by 2030 and reach net zero by 2060. A key driver of this transition is energy independence, as China seeks to reduce reliance on imported fossil fuels.

A recent report from DNV highlights China’s rapid progress. The country had 1.45 TW of renewable energy capacity online by the end of 2024 and is on track to increase its clean energy capacity fivefold by 2050.

  • By that time, renewables are expected to supply 60% of China’s energy needs, although fossil fuels will still account for around 40% of the mix.

Challenges and the Role of Coal

Despite this rapid progress, coal remains a significant part of China’s energy system. The country still consumes over 50% of the world’s coal and continues to build new coal-fired power plants. In 2022, China approved 6x more new coal capacity than the rest of the world combined.

The heavy reliance on coal is partly due to energy security concerns. Events like Russia’s invasion of Ukraine and reduced rainfall affecting hydropower have made alternatives like gas and hydroelectric power more expensive.

  • Coal remains a backup energy source to support the country’s rising electricity demand, which increased by 6.8% in 2024.

However, China’s long-term goal is to reduce this dependence. The government is implementing policies to phase out fossil fuels gradually while ensuring energy stability. By 2050, China’s emissions are expected to drop by 70% compared to current levels, marking significant progress in its clean energy transition.

Future Outlook: A Renewable Superpower

China’s energy transition is at a critical turning point. The country’s investments and policy shifts indicate a strong commitment to clean energy. By 2030, China’s total energy consumption is expected to peak and then decline by 20% in 2050 due to increased efficiency and electrification.

China aims for net zero by 2060, which is ten years later than the UN’s 2050 target to keep global warming under 1.5°C. So, while progress is strong, more efforts are needed to speed up the shift from fossil fuels.

Overall, China is leading the world in renewable energy expansion, breaking records in solar and wind installations. The country’s rapid growth in clean energy capacity is reshaping its power mix and reducing its reliance on coal. 

SolarBank Commences its First 4.99 MW BESS Project in Ontario

Saptakee S
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0
SolarBank Commences its First 4.99 MW BESS Project in Ontario

Disseminated on behalf of SolarBank Corporation.

SolarBank Corporation (NASDAQ: SUUN; Cboe CA: SUNN, FSE: GY2) develops renewable energy projects in Canada and the USA. It recently announced the commencement of construction of its first Battery Energy Storage System (BESS) project in Ontario. Construction of the SFF-06 project in Cramahe will start the week of February 10, 2025. This project is a key step for SolarBank as it enters the growing battery storage market.

SolarBank Locks in Lucrative Deals for Its BESS Project

The press release highlights that the Royal Bank of Canada (RBC) is supporting the SFF-06 project and another, Project 903, with a $25.8 million loan. RBC acts as the lender, administrative agent, collateral agent, and agent for green loan structuring. Its involvement is critical for advancing these renewable energy efforts.

SolarBank is developing the Project through its partially owned subsidiary 1000234763 Ontario Inc. (“ProjectCo”), which owns the projects and borrows under the loan agreement. SolarBank’s link to ProjectCo comes from acquiring Solar Flow-Through Funds Ltd. in July 2024 at a $45 million valuation. This move strengthens SolarBank’s position in the fast-growing BESS market.

Project Execution

For the SFF-06 project, SolarBank has chosen Anvil Crawler Development Corp., a subsidiary of Skyline Group of Companies. Anvil Crawler has a $1.85 million contract for civil and electrical work.

Skyline is a key player in asset management and development. They manage over $5.4 billion in assets and have 20 years of experience. Their focus is on building sustainable communities in Canada.

The IESO Contract

In July 2023, the SFF-06 project won a 22-year contract with the Independent Electricity System Operator (IESO). This is part of the Expedited Long-Term RFP (E-LT1 RFP).

This agreement promises a fixed capacity payment of $1,221 per megawatt (MW) per business day. This rate is much higher than the $876/MW average for other projects in the same program.

  • Once operational, the project will provide a daily capacity of 4.74 MW for 251 business days each year.

This setup ensures a steady revenue stream for ProjectCo, making it a strong investment.

Strong Visibility to Continued Growth

SolarBank Bess
Source: SolarBank

Tax Incentives and Strategic Stakes

The project will benefit from Canada’s Clean Technology Investment Tax Credit, introduced in 2024. This refundable credit covers up to 30% of eligible capital costs for new clean tech projects. With this support, SolarBank can boost the project’s finances and move forward with its renewable energy goals. Government backing can enhance returns and speed up efforts for a greener future.

SolarBank also holds an indirect 50% stake in ProjectCo. A partnership of First Nations communities in Ontario owns the other half. This partnership shows SolarBank’s dedication to inclusive growth that would bring economic and social benefits to local communities.

Navigating Risks to Secure Long-Term Success

The SFF-06 project shows promise but faces challenges. It needs to secure permits, maintain third-party financing, and address construction hurdles to stay on schedule. Battery storage systems can degrade over time, which may impact capacity and efficiency.

Government policy changes or cuts to BESS incentives could jeopardize long-term success. So, SolarBank must actively implement maintenance plans and track policy changes to protect the project’s future.

SolarBank
Source: SolarBank

SolarBank’s BESS Vision: Paving the Way for a Low-Carbon Future

SolarBank leads in clean energy, specializing in solar power and EV charging. It serves utilities, businesses, municipalities, and homes throughout North America. Its portfolio includes utility partnerships, community solar projects, and virtual net metering initiatives.

As the global energy market shifts to BESS, this sector is growing rapidly. Organizations and governments want BESS technology to cut carbon emissions. Energy storage is becoming essential. BESS allows renewable energy, such as solar and wind, to be stored for later use, helping meet peak demand and ensuring a steady energy supply.

According to Fortune Business Insights:

  • In 2023, the global BESS market was valued at $18.2 billion, projected to reach $114.05 billion by 2032, with a CAGR of 20.88%.

  • In the U.S., the market is expected to grow at 16.3%, reaching $31.2 billion by 2029.

battery energy storage BESS
Source: Fortune Business Insights

SolarBank is entering the BESS market at a crucial time when energy storage is essential for meeting rising electricity demands and reducing emissions. The potential development pipeline exceeds one gigawatt. Additionally, the company has over 100 megawatts of completed renewable projects. The SFF-06 project will be an important step in Ontario’s clean energy transition.

This report contains forward-looking information. Please refer to the SolarBank press release entitled “SolarBank Announces Commencement of Construction of First Battery Energy Storage Project (BESS) in Ontario.”

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

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.

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Ferrari’s Road to Glory: Massive €1.74 Billion Revenue Boom and Net Zero Goals Aligned

Saptakee S
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0
Ferrari’s Road to Glory: Massive €1.74 Billion Revenue Boom and Net Zero Goals Aligned

The iconic luxury carmaker posted stellar growth in the fourth quarter while driving forward its sustainability goals. Ferrari’s exceptional financial performance in 2024, was fueled by strong revenues and effective market strategies.

Benedetto Vigna, CEO of Ferrari remarked on their glorious performance noting,

“Quality of revenues over volumes: I believe this best explains our outstanding financial results in 2024, thanks to a strong product mix and a growing demand for personalizations. On these solid foundations, we expect further robust growth in 2025, that will allow us to reach one year in advance the high-end of most of our profitability targets for 2026”

He further added,

“Last year’s results reflect a great teamwork that involved all our Company’s souls. This teamwork was also visible in a very competitive racing season. The will to progress that has always characterized Ferrari has led to innovation in our infrastructure, with the inauguration of the e-building; in our products, best highlighted by the new supercar, the Ferrari F80; and in R&D, with the new E-Cells Lab that will further strengthen our electrochemical knowledge to prepare us for the future. And we will reveal more of our future on 9 October at our Capital Markets Day.”

Ferrari Reports Strong Growth in 2024 Earnings and Revenue

Ferrari’s net revenue surged to €6,677 million in 2024, an 11.8% increase compared to the previous year. Its net Q4 revenue was €1,736 million. The contributing factors for revenue boom were:

  • Cars and Spare Parts: Generated €5,728 million, up 11.9%, driven by a richer product mix, strong demand, and personalized options.
  • Sponsorship and Brand Revenues: Rose 17.1% to €670 million, thanks to new sponsorship deals and lifestyle initiatives.
  • Other Revenue: Stayed stable. Higher-income from financial services balanced the end of the Maserati contract in 2023.

The company reported an industrial free cash flow of €1,027 million. This shows its strong operational efficiency.

Ferrari
Source: Ferrari

Higher Profit Margins

Ferrari achieved an operating profit (EBIT) of €1,888 million, a 16.7% increase over the previous year, with an EBIT margin of 28.3%. Net profit climbed to €1,526 million, and diluted earnings per share (EPS) stood at €8.46.

The company’s EBITDA rose 12.1% to €2,555 million, maintaining a robust margin of 38.3%.

Rise in Shipments

Ferrari shipped 13,752 cars in 2024, reflecting a modest 0.7% growth compared to the previous year. The increase was driven by strategic allocation across regions. Shipments in the EMEA region rose by 141 units, while the Americas added 192 units. However, this growth was partially offset by a decline of 328 units in Mainland China, Hong Kong, and Taiwan.

Meanwhile, the Rest of APAC region saw a slight increase of 84 units. The deliveries had ten internal combustion engine (ICE) models and six hybrid models. Hybrids made up 51% of the total shipments. This balance highlights Ferrari’s focus on innovation and sustainability while maintaining its signature performance.

Ferrari revenue
Source: Ferrari

Ferrari’s 2024 results showcase its ability to grow revenues, profits, and cash flow while maintaining exclusivity and innovation in its offerings. The company remains a benchmark in luxury performance.

EV Debut: What’s Next for the Iconic Brand?

Reuters reported that Ferrari will launch its first fully electric car on October 9 at its Maranello headquarters in Italy. CEO Benedetto Vigna announced the landmark debut, marking a bold shift from the brand’s signature petrol-powered engines. The event will take place during a capital markets day, kicking off the fourth quarter as planned.

The highly anticipated EV is one of six new models Ferrari plans to roll out this year. Despite global uncertainties, including U.S. trade policies, Vigna emphasized that the company’s plans remain on track.

China is a booming market for electric vehicles due to lower taxes and strong demand. This offers significant potential for Ferrari’s new EV. Ferrari’s new EV stands to benefit greatly. Vigna hinted that Ferrari’s sales cap policy changes in China will be announced at the October event. This could open up more opportunities in this important market.

Ferrari hopes to increase revenue and core earnings by at least 5% this year with this launch. This shows their confidence in an electrified future.

Ferrari’s Journey to Zero Emissions by 2030

Ferrari, a name synonymous with speed is also driving toward sustainability. It aims to be carbon neutral by 2030 by primarily cutting greenhouse gas (GHG) emissions in operations and the supply chain. It also embraces renewable energy and encourages community involvement.

Emission Reduction Goals

As per its latest sustainability report, in 2023, the company achieved a 7% reduction in Scope 1 emissions compared to 2022 with the electrification of its Maranello plant. Scope 2 emissions (market-based) stayed the same. This was due to ongoing investments in renewable energy. However, switching from natural gas to electricity caused location-based emissions to rise.

In total, Ferrari’s direct and energy-related emissions i.e. Scope 1 and Scope 2 amounted to 77,691 tCO₂eq in 2023, down from 84,012 tCO₂eq in 2022. Additionally, the company is focused on improving energy efficiency and these reductions show its commitment to eco-friendly practices at its production sites.

Ferrari
Source: Ferrari
Ferrari carbon emissions
Source: Ferrari

Other key air emissions come mainly from volatile organic compounds (VOCs) released during vehicle production. The company also keeps a close watch on emissions of nitrogen oxides (NOx), sulfur oxides (SOx), and dust to ensure continuous monitoring and control.

Ferrari revenue
Source: Ferrari

Its decarbonization efforts go beyond its factories. They also tackle Scope 3 emissions from raw materials and vehicle use. The strategy includes:

  1. By 2030, at least 50% of Ferrari’s vehicle offerings will be hybrid or electric, reducing CO2 emissions per car by half.
  2. The company plans to use recycled aluminum to cut raw material emissions by 30%.

Green Energy and Carbon Reduction Initiatives

Ferrari is integrating cutting-edge technology to lower its carbon footprint:

  • Fuel Cell Technology: In June 2023 it installed a 1 MW solid oxide fuel cell plant at its Maranello facilities, powering 5% of Ferrari’s production. This cuts gas use by 20% and reduces smog-causing pollutants by more than 99%.
  • Photovoltaic Systems: In July 2022, Ferrari collaborated with Enel X to expand solar energy production. They planned to install a new solar power system on the roofs of their Maranello factory. This system used 3,800 panels that were capable of generating 1,626,802 kWh annually, saving 740 tonnes of CO2 emissions per year.
  • Renewable Energy Community (REC): In May 2023, Ferrari launched Italy’s first Renewable Energy Community (REC) in Maranello and Fiorano with Enel X. A 1 MW solar system on Ferrari’s land will supply clean energy to help local communities and promote sustainable development.
Ferrari carbon neutral
Source: Ferrari

Replacing Gas with Renewables

Ferrari’s decarbonization journey doesn’t stop here. Last year in October it retired its gas-powered trigeneration plant three months early. This facility has supplied electricity, heat, and cooling energy since 2009. Notably this closure will reduce methane gas consumption by 70% and cut Scope 1 and 2 emissions by 60% annually.

The luxury car maker also plans to double its solar power systems. This will help it reach a peak capacity of 10 MW by 2030. This move will cut down its reliance on fossil fuels even more.

Ferrari’s Verra-Certified Carbon Credit Strategy

Carbon credits play a key role in supporting its 2030 carbon-neutral target. Ferrari invests in Verra-certified projects that follow the Verified Carbon Standard (VCS). This ensures its offsetting efforts are credible, clear, and effective.

The company teamed up with ClimateSeed for a carbon avoidance project in Quebec, Canada. This project includes over 800 local micro-projects. It involves SMEs, NGOs, and municipalities working together to reduce greenhouse gas (GHG) emissions. They work on boosting energy efficiency, redirecting landfill waste, and using cleaner fuels.

In addition to carbon credits, Ferrari launched Bosco Ferrari, an initiative to establish a forest in Italy. This project promotes biodiversity and offsets emissions locally, complementing its global decarbonization efforts.

Economic growth from environmental impact

Ferrari emissions
Source: Ferrari

All these efforts show how seriously the carmaker takes climate action. Ferrari takes climate action seriously, setting a standard for sustainability in the automotive industry. At the same time keeping their legacy of excellence.

Google’s Q4 Financial Success vs. Net-Zero Pledge: Can It Balance AI Growth with Sustainability?

Jennifer L
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0
Google’s Q4 Financial Success vs. Net-Zero Pledge: Can It Balance AI Growth with Sustainability?

Alphabet, Google’s parent company, posted strong Q4 earnings, but its cloud revenue missed expectations. While AI and data center expansion drive growth, emissions are rising. Can Google keep up its net-zero goal while scaling its tech ambitions? 

Alphabet’s Financial Snapshot: A Strong Q4 with a Cloud Slip

Alphabet had a great fourth quarter. Their earnings per share (EPS) were $2.15, beating Wall Street’s estimate of $2.13. The company’s total revenue reached $96.4 billion, slightly below the expected $96.6 billion.

Advertising is still Alphabet’s main source of income. It brought in $72.4 billion, which is more than the expected $71.7 billion. 

However, Google’s cloud segment fell short, earning $11.9 billion instead of the expected $12.1 billion. This shortfall hurt investor confidence, causing Alphabet’s stock to drop 7% in early trading.

Google cloud revenue
Chart from Yahoo

Despite this, Alphabet is boosting investments in artificial intelligence (AI) and cloud services. The company will raise capital spending from $57.9 billion to $75 billion by 2025. This will focus on AI-driven products and expanding data centers. This move aligns with competitors like Meta and Microsoft, which are also betting heavily on AI to enhance user engagement and ad revenue.

Alphabet’s cloud growth is crucial as it competes with Amazon Web Services (AWS) and Microsoft Azure. While Microsoft’s cloud revenue grew 21% year over year to $40 billion, it still fell short of Wall Street’s $41.1 billion forecast.

Google aims to be one step ahead by enhancing its cloud offerings and leveraging AI to attract enterprise clients. Remarking on this during the earnings call, CEO Sundar Pichai stated:

“Our sophisticated, global network of cloud regions and data centers provides a powerful foundation for us and our customers, directly driving revenue. We have a unique advantage because we develop every component of our technology stack, including hardware, compilers, models and products. This approach allows us to drive efficiencies at every level, from training and serving, to developer productivity.”

The company is facing more competition in AI from DeepSeek, a China-based firm. Their new models are cost-effective and very capable. DeepSeek’s rise has sparked worries about Alphabet’s AI leadership. This new technology could shake up the industry.

Even with these challenges, Alphabet’s stock rose by 41% in the past year. This beats Amazon’s 39% gain and far surpasses Microsoft’s 2% increase.

As Alphabet expands its AI and cloud businesses, its energy use keeps growing. To meet its net-zero goals, Google must find cleaner ways to power its data centers.

Google’s Path to Net Zero: Can It Deliver by 2030? 

Google aims to achieve net-zero emissions across its operations and value chain by 2030. They have two key strategies: reducing emissions and handling leftover emissions through carbon removal.

In 2023, total GHG emissions reached 14.3 million tCO₂e. This marks a 13% increase from last year, but it’s slower than in the past two years. This increase was mainly due to increased data center energy consumption and supply chain emissions. 

Google’s Scope 1 emissions were about 79,400 tCO2e, making up 1% of their total carbon footprint. Scope 2 (market-based) emissions reached 3.4 million tCO2e or 24%. Finally, their Scope 3 emissions were 10.8 million tCO2e, which is 75%.

Google 2023 carbon footprint or GHG emissions
Charts from Google’s 2024 Environmental Report

Progress Toward Net Zero

Google has improved in many areas. However, their total GHG emissions went up in 2023. This shows the difficulty of reducing emissions while also boosting compute power and investing in infrastructure.

The company’s goal is to cut emissions by 50% by 2030, using 2019 as the base year. However, recalculations changed their progress. Now, it shows a 48% increase from the 2019 baseline instead of a decrease.

Google carbon emission reductions 2023 progress

The company knows that reaching net zero by 2030 is an ambitious goal. It also faces many uncertainties, especially about how AI will affect the future. Yet, the tech giant stays committed to reducing its emissions through several means.  

Emissions Reduction Efforts

Renewable Energy 

Google has matched 100% renewable energy for seven years in a row. However, this doesn’t reduce their Scope 2 emissions. This is because the GHG Protocol considers regional clean energy sourcing. They aim for 24/7 carbon-free energy (CFE) across all grids by 2030, reaching 64% in 2023. 

The tech giant has signed contracts for about 4 GW of clean energy capacity. Despite rising electricity demand, they kept a 64% CFE average in data centers and offices.

Energy Efficiency 

Google’s data centers use much less energy than regular enterprise data centers. They are 1.8 times more efficient. In 2023, their average Power Usage Effectiveness (PUE) is 1.10. In comparison, the industry average PUE is 1.58.

They are always making AI hardware more power-efficient. For example, TPU v4 is 2.7 times more energy-efficient than TPU v3. They also use AI-driven optimizations. They’ve also piloted demand response capabilities to reduce power consumption during high-stress periods.

AI for Sustainability 

Google found ways to cut the energy used to train AI models by up to 100 times, lowering emissions by as much as 1,000 times. Gemini 1.5 Pro achieves comparable quality to Gemini 1.0 Ultra while using less compute. Their Go Green Software guide helps developers reduce their digital footprints.

Google is actively using AI to accelerate climate action. This includes: 

  • Fuel-efficient routing, which has reduced emissions by about 2.9 million metric tons since 2021.  
  • Flood forecasting, offering predictions in more than 80 countries.  
  • Optimizing traffic signals through the Green Light initiative. 

They’re also developing AI-powered tools for predicting extreme heat, identifying cool roofs, and monitoring methane emissions. These examples show the transformative potential of AI in addressing environmental challenges.

Carbon Removal: Google’s Big Bet

Google’s approach to achieving net-zero emissions by 2030 includes a crucial element: managing residual emissions through carbon removal. After prioritizing emission reductions, the company will offset remaining emissions using high-quality carbon removal credits. The tech giant’s carbon removal efforts include both technology-based and nature-based solutions.

Technology-based removals:

The main challenge here is the lack of scale – these solutions are currently expensive and mostly exist as small pilots. Google pledged $200 million to Frontier. 

They pledged to match the U.S. Department of Energy’s Carbon Dioxide Removal Purchase program dollar for dollar. Their goal is to secure at least $35 million in carbon removal credits within a year.

Nature-based removals:

Google backs nature-based removals to tackle scale and certainty issues. They’ve helped boost carbon markets through Google.org, giving over $7 million to groups like The Gold Standard and the ICVCM.

By the end of 2023, Google signed three deals for carbon credits with Charm Industrial, Lithos Carbon, and CarbonCapture. This means they will buy about 62,500 tCO2e of removal credits, set for delivery by 2030. 

Google contracted rarbon removal portfolio

In 2024, Google took big steps in carbon removal to reach net-zero emissions. In December, the company revealed a deal to buy 200,000 tonnes of carbon removal credits from Terradot. This startup uses enhanced rock weathering to capture CO₂ in crushed rocks and store it in soil. 

The big tech company promised to buy 50,000 metric tons of carbon removal credits from the Brazilian startup Mombak by 2030. Mombak works on reforestation in the Amazon rainforest. 

Google also made a deal with climate tech startup Holocene. Together, they plan to capture 100,000 tons of CO₂ by 2032. These initiatives reflect Google’s commitment to investing in innovative carbon removal solutions as part of its broader environmental strategy.

Overall, Google’s efforts demonstrate a significant commitment to sustainability. Still, its environmental data shows that big tech needs more progress in reducing carbon emissions alongside carbon removal initiatives. 

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