Carbon Credits Supply to Skyrocket 35x by 2050 – But at What Price?

Saptakee S
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Carbon Credits Supply to Skyrocket 35x by 2050 – But at What Price?

The global carbon market is undergoing a dramatic reset that could transform both supply and costs over the next 25 years. New projections from BloombergNEF (BNEF)  suggest that carbon credit supply may grow 20- to 35-fold by 2050, creating one of the most significant financial mechanisms for funding decarbonization. But the shape of this future market hinges on integrity, governance, and the types of projects that ultimately win buyers’ trust.

While the long-term trajectory points upward, the road is being shaped by near-term shifts. From surging issuances to a rapid geographic rebalancing, the market reset is already redefining which sectors and regions are taking the lead.

Carbon Credit Costs Head Higher

BNEF further points to steep increases in average costs as high-quality projects dominate. Prices could reach $60 per ton of CO₂e in 2030 and rise to $104 per ton in 2050 if technology-based removals, such as direct air capture (DAC), dominate the supply mix.

In scenarios where lower-quality credits flood the market, prices would remain significantly lower—just $69 per ton in 2050—but at the cost of weaker governance and reduced impact. This highlights the growing divide between volume-driven growth and integrity-driven supply.

carbon credits
Source: BNEF

Issuances Surge as Market Resets

According to Sylvera, new credit creation has picked up pace. In Q2 2025, issuances reached 77 million credits, up 39% from Q1 and 14% higher than Q2 2024. This signals renewed confidence among project developers and buyers, with particular momentum in both traditional land-use projects and industrial breakthroughs.

Nature-Based Leaders Face New Competition

Forestry and Land Use projects still dominate, making up 31% of Q2 issuances. Within this group, Afforestation, Reforestation, and Revegetation (ARR) projects stood out. These credits averaged $24 each, reflecting higher implementation costs and buyers’ willingness to pay for premium, nature-based removals. For higher-rated ARR projects (BBB+), the premium stretched closer to $27, driven by limited supply.

Yet the real story this quarter was the surge in Industrial and Commercial projects, which jumped from 7.9% of issuances in H1 2024 to 19% in H1 2025. These include refrigerant recovery, methane capture from coal mines, and advanced industrial efficiency. Meanwhile, REDD+ projects rebounded strongly, climbing to 16% of Q2 issuances, their highest share since mid-2023.

This diversification shows the market moving beyond forests alone, with industrial innovation gaining ground.

Carbon credits carbon markets
Source: Sylvera

North America Rises as Supply Hub

One of the most striking changes came from geography. North America more than doubled its share of issuances, rising from 21% in Q1 to 43% in Q2. This momentum made the American Carbon Registry (ACR) the top registry for the first time, accounting for 33% of all new credits.

It was followed by Gold Standard (25%) and Verra (21%), signaling a more competitive registry landscape. This shift reflects both investor appetite for high-integrity projects in North America and the region’s strong regulatory backdrop, which is creating demand for compliance-grade credits.

Cheap vs. Trusted: The Carbon Market’s Fork in the Road

BNEF outlined the possible futures for the global carbon credit market. Carbon credit supply could follow three different paths, shaped by governance, investor trust, and project quality.

  • High-Quality Scenario: If the market reset succeeds, supply reaches 2.6B tons in 2030 and 4.8B in 2050. The market stays smaller but centers on high-impact projects. Direct air capture (DAC) grows to 21% of supply by 2050, with prices averaging $104/ton.
  • Full Supply Scenario: If governance fails, supply surges to 5.3B tons in 2030 and 8.2B in 2050. Most credits come from avoided deforestation and reforestation, about two-thirds of the total. Prices stay low at $69/ton, but quality concerns weaken trust.
  • OTC Carbon Removal Scenario: This middle path sees bespoke deals growing 27 times since 2022. Supply hits 2B tons in 2030 and 5.3B in 2050. Bioenergy with carbon capture (BECCS) dominates, with prices at $98/ton by 2050.

The trade-off: Cheaper credits risk poor quality, while higher-cost, smaller markets could build the trust buyers want.

carbon credit supply
Source: BNEF

Buyers Pay Premium for Integrity

Even as average credit prices softened, buyers continued paying premiums for nature-based removal credits and high-rated projects. For instance, ARR credits rated BBB+ commanded roughly $27 each, compared to lower-rated alternatives.

This price differentiation shows that buyers—especially corporates seeking credible net-zero claims—are prioritizing quality over volume. Credits recognized in compliance systems or international frameworks also commanded higher prices, reflecting their stronger governance.

Carbon Pricing Expands Across Economies

Alongside the voluntary market reset, government-led carbon pricing systems are expanding. As per the World Bank Group, by mid-2025, 43 carbon taxes and 37 emissions trading systems (ETSs) were in place, covering 28% of global emissions—up from 24% just a year earlier.

Several major moves drove this growth:

  • China’s national ETS expanded beyond power to include cement, steel, and aluminum, adding 3 billion tons of coverage.
  • Colombia broadened its carbon tax to include coal combustion.

Together, these expansions lifted global coverage to nearly 15 billion tons CO₂e, representing two-thirds of global GDP under a direct carbon price.

carbon pricing
Source: World Bank Group

Power Sector Leads, Industry Joins In

The power sector continues to dominate carbon pricing. Over half of global power emissions—about 30% of global GHGs—are now priced. This matters because electrification of industry and transport can only deliver deep cuts if electricity itself is low-carbon.

Industry is catching up fast. Thanks to China’s ETS expansion, over 40% of industrial emissions are now covered, marking a major leap for one of the most carbon-intensive sectors.

Carbon Markets Channel Private Capital

Despite short-term price softening, demand remains resilient. Corporations remain the biggest buyers through voluntary and domestic compliance markets, viewing credits as essential for net-zero alignment. Global retirements rose in early 2025, driven by a spike in compliance demand.

This reflects carbon markets’ central role: channeling private capital into decarbonization projects while governments pursue broader policy goals like economic development, job creation, and fiscal stability.

The Political Economy of Pricing

The durability of carbon pricing depends not just on policy design but also on public sentiment and perceived fairness. Governments are balancing competing goals—emissions cuts, economic growth, and equity. As seen with China and Colombia, systems are being designed to ratchet up coverage and ambition over time, offering flexibility while building acceptance.

This political economy lens will be crucial as carbon pricing moves into harder-to-abate sectors like heavy industry and as middle-income economies such as Brazil, India, Indonesia, and Türkiye expand their systems.

Outlook: Carbon Market Integrity Over Volume

The global carbon market is no longer defined by raw volume. Instead, the reset since 2022 has pushed integrity to the forefront. Whether through nature-based solutions, industrial projects, or advanced removals, the projects that deliver measurable, durable impact will attract the highest demand and premiums.

What’s clear from BNEF’s forecast on carbon credits supply is that carbon markets will remain a cornerstone of climate finance, one where buyers, governments, and investors increasingly value quality over quantity.

U.S. Releases New Draft Critical Minerals List: Silver and Copper Join the Clean Energy Race

Jennifer L
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U.S. Releases New Draft Critical Minerals List: Silver and Copper Join the Clean Energy Race

The United States has released an updated list of critical minerals, highlighting the growing importance of metals that support clean energy, technology, and national security. This new list from the U.S. Geological Survey (USGS) and the Department of the Interior now has 51 minerals.

The draft recommends adding six minerals—potash, silicon, copper, silver, rhenium, and lead, listed in order of risk—to the U.S. Critical Minerals List, while removing two minerals, arsenic and tellurium.

Silver and copper are included for the first time. The update shows how crucial these resources are for America’s industrial and clean energy plans. Both metals are in high demand for renewable energy systems, electric vehicles, and advanced electronics.

The U.S. wants to expand the list to boost supply security, cut down on imports, and get ready for global competition over these resources.

Why the U.S. Updates Its Critical Minerals List

Critical minerals are defined as non-fuel minerals that are vital to the U.S. economy and security but are at risk of supply disruptions. The U.S. first released a formal list in 2018, and it has been updated several times as global demand and geopolitical risks shift.

The 2025 update considers several factors, including:

  • Economic importance: Minerals are essential for industries like defense, energy, and technology.
  • Supply chain risks: The potential for shortages due to import dependence or geopolitical tensions.
  • Future demand: Projected growth in renewable energy and electric vehicle markets.

Silver and copper were added because new data show their strategic role in clean energy. Both metals are widely available globally, but demand is increasing so quickly that supply risks are now more relevant.

This update highlights how the U.S. is adjusting its policies to keep pace with the global race for minerals.

Silver: A Rising Star in the Energy Transition

Silver’s addition to the list is significant. Traditionally known as a precious metal, silver is also one of the most effective conductors of electricity. This property makes it essential for solar panels, batteries, and electronics.

  • Solar panels: Silver paste is used in photovoltaic cells to conduct electricity. Each panel requires 15–20 grams of silver, and global solar demand is expected to drive record use.
  • Electronics: From smartphones to electric vehicles, silver is a critical component in circuit boards and electrical connections.
  • Medical uses: Silver’s antimicrobial properties also make it valuable for healthcare applications.

According to the Silver Institute, solar energy alone could account for nearly half of silver’s industrial demand by 2030. However, global mine supply has been relatively flat, creating concerns about shortages.

silver demand from solar 2030
Source: Silver Institute

By adding silver to the list, U.S. policymakers recognize the growing risk of relying too heavily on foreign sources. While the U.S. produces some silver, much of the supply comes from countries like Mexico, Peru, and China. This creates potential vulnerabilities as clean energy deployment accelerates.

United States's Silver Production from 1900 to 2024 in the chart
Source: CEIC Data

Copper: The Backbone of Electrification

Copper is another critical addition to the 2025 list. Known as the “metal of electrification,” copper is vital for power grids, renewable energy, electric vehicles, and data centers.

  • Electric vehicles (EVs): EVs require up to four times more copper than gasoline-powered cars, mainly for batteries and wiring.
  • Power grids: Copper is a key material in transmission lines, transformers, and substations. Expanding renewable energy capacity depends on copper-intensive infrastructure.
  • Clean energy: Wind turbines and solar farms use large amounts of copper in their electrical systems.

Global demand for copper is projected to double by 2035, according to industry forecasts. Yet, mining capacity has struggled to keep pace. Large new projects take years to develop, and permitting challenges in the U.S. have slowed growth.

copper supply and demand
Source: CRU, Wood Mackenzie

The U.S. currently imports a significant share of its copper, with major suppliers including Chile and Canada. The government calls copper a critical mineral. This signals a plan to boost domestic production and recycling. The goal is to reduce reliance on imports.

Broader Implications of the Critical Minerals List

The new list does more than identify resources; it also influences U.S. policy and investment. Minerals on the list qualify for government programs that support domestic exploration, mining, and processing. This can include federal funding, streamlined permitting, and public-private partnerships.

For companies, being linked to critical minerals often boosts investor interest. It signals long-term demand and potential access to U.S. government support. U.S. mining firms looking for silver and copper deposits could find more financing options.

The updated list also affects international trade. By focusing on these resources, the U.S. can form new partnerships with allies that have rich mineral reserves. This move also helps cut down reliance on countries with high supply risks.

Adding silver and copper to the critical minerals list is more than just a policy shift. It impacts markets, industries, and climate goals directly. Knowing how these metals influence clean energy and tech development shows why the update is important.

The Global Race for Silver and Copper

The U.S. is not alone in its push to secure mineral supplies. The European Union, Japan, and China are updating their plans. They want to secure steady access to silver, copper, and other key resources.

  • China: A dominant player in mineral refining and processing, especially for copper and rare earths. By 2025, China is set to produce 57% of the world’s refined copper. Its output is expected to rise by 7.5% to 12% each year, despite global copper shortages. China also leads in copper smelting and refining. Since 2019, it has added over 97% of the global capacity.
  • Europe: The region recycles around 37% of the world’s silver. This is much higher than its primary silver production, which is only about 7%. Most of that production comes from Poland and Sweden. In Europe, up to 90% of copper in buildings and infrastructure is recycled. This highlights the importance of reuse and circular economy initiatives.
  • Global supply: Silver and copper mining is concentrated in a few countries, such as China, Peru, Chile, and the DRC, raising concerns about bottlenecks.

As countries accelerate clean energy goals, competition for these metals is expected to grow. Some analysts warn of a potential supply gap in copper as early as 2030 if new projects do not come online quickly enough.

copper supply forecast IEA
Source: IEA

Mining, Recycling, and the Green Dilemma

While expanding mining is a logical solution to supply risks, it comes with challenges. Mining projects often raise environmental and social concerns, including water use, land disturbance, and impacts on local communities.

In the U.S., new projects frequently face delays due to permitting and opposition. Balancing the need for secure supply with environmental protections will remain a key challenge. Recycling may help close the gap, but new production will still be required.

The recognition of silver and copper as critical minerals reflects these trade-offs. Policymakers see the environmental challenges. They believe that securing supply is key to economic and climate goals.

Looking Ahead: U.S. Strategy for a Mineral-Driven Future

The updated critical minerals list reveals how the U.S. is getting ready for a future focused on clean energy, electrification, and digital technologies. Silver and copper are now seen not only as industrial metals but as pillars of energy security.

Moving forward, the U.S. will likely expand efforts to:

  • Support domestic mining and refining of silver and copper.
  • Increase recycling and circular economy solutions.
  • Build alliances with mineral-rich countries.
  • Balance environmental concerns with supply needs.

By naming silver and copper as critical, the U.S. is aligning its resource strategy with long-term economic and climate goals. The next decade will determine whether the country can secure enough of these essential metals to stay competitive in the global energy transition.

NIO Stock Surges 45%: Battery Swaps, SUVs, and a Net-Zero Drive

Jennifer L
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NIO Stock Surges 45%: Battery Swaps, SUVs, and a Net-Zero Drive

NIO stock has surged 45% in 2025 as strong SUV launches, record deliveries, and a growing battery swap network fuel investor optimism. The Chinese EV maker is moving forward on its net-zero roadmap. It focuses on renewable energy, green factories, and smart partnerships. This strategy helps it become a global leader in sustainable mobility.

Stock Ride: From Slump to Surge

Investor confidence in NIO has seen a notable rebound recently. The stock jumped after JPMorgan upgraded it. They raised NIO’s stock price target from $4.10 to $4.80 but kept a “Neutral” rating.

NIO stock price
Source: Yahoo Finance

JPMorgan also raised its delivery forecasts for 2026 and 2027 by 11–13%. This change reflects higher volume expectations from NIO’s new L90 and L80 SUV launches. This analyst upgrade gave the stock fresh momentum, helping push shares significantly higher.

The company boosted bullish sentiment by launching the ES8 SUV. This model offers six and seven seats and is priced at about US $43,000. It also includes a battery subscription option.

The combination of JPMorgan’s optimism and excitement around the ES8 launch lifted NIO’s shares by about 45% year to date.

Q2 Outlook: Deliveries on Overdrive

Looking ahead to Q2, NIO projected deliveries between 72,000 and 75,000 vehicles, which would mark growth of 25% to 31% year-over-year. In June alone, deliveries reached 24,925 units — an over 17% year-over-year increase.

In total, NIO delivered 72,056 vehicles in Q2, lifting its cumulative deliveries to more than 785,700 as of June 30, 2025. These results underscore strong demand momentum across its growing lineup.

Moving Toward Net-Zero: Battery Swaps, Renewables, and Efficiency

NIO continues to champion sustainability through innovation and cleaner operations. The company plans to achieve carbon neutrality in its operations and supply chain by 2045. This goal is backed by a clear Lifecycle Decarbonization Roadmap.

NIO’s Lifecycle Decarbonization Roadmap
Source: Nio

It boosted its renewable electricity usage to 56.6% in 2024, a 74% increase from last year. Plus, one factory received the “2024 Green Factory” award.

NIO factories cut emissions per vehicle by 12%. This shows the company’s progress in making manufacturing more efficient. However, the company’s most striking contribution to emissions reduction comes from its battery swap infrastructure.

Battery Swaps: NIO’s Secret Weapon

Battery swapping brings speed, convenience, and eco-benefits, with NIO leading global deployment. Here are the key facts of the company’s achievements so far: 

  • As of mid-2025, NIO operates over 3,400 Power Swap Stations globally, including more than 3,200 in China and 50+ in Europe. The company plans to reach 1,000 stations outside China by year-end.
  • The network has completed 80 million total swaps, averaging 97,000 swaps per day. Each swap-equipped station powers two million homes each year. It also saves users over 2,900 hours of charging time and around US$2.9 billion in energy costs.
  • In Chongqing alone, 75 stations now cover every district and county, facilitating over one million swaps. These stations serve as virtual power plants, balancing the grid and integrating renewables in dense urban areas.

This approach enhances user convenience while transforming EV infrastructure into a scalable, low-carbon solution. By late 2023, the network completed 30 million swaps. This saved about 891,700 metric tons of CO₂. That’s roughly 28 kilograms of CO₂ for each swap. It’s like avoiding 80 kilometers of emissions from gas cars per swap.

Powering Up with CATL Partnerships

NIO’s collaboration with industry partners amplifies its eco-impact, further aiding in its huge stock jump. In March 2025, NIO formed a key partnership with battery leader CATL. This deal includes an investment of up to US$346 million.

They will also work together on battery-swapping standards and infrastructure. Through this alliance, NIO aims to establish the largest battery swap network in China, covering over 2,300 county-level areas.

CATL is negotiating to buy a controlling stake in NIO Power, the unit that manages charging and swapping networks. This move supports CATL’s focus on green energy solutions. These collaborations help NIO reduce costs, scale infrastructure faster, and integrate best-in-class technology across its ecosystem.

SUVs, Hatchbacks, and Global Reach

NIO’s ambitions extend beyond flagship models. New releases — including the ES8 SUV and the compact hatchback Firefly — signal a push into broader market segments.

Firefly deliveries started in April. In May, NIO sold 3,680 units. They are also set to launch in 16 new markets across five continents through third-party dealers. Rising demand from the ONVO and Firefly lines also fueled a 53% year-over-year jump in April deliveries.

This multi-brand strategy provides flexibility to reach both premium and mass-market buyers — a key element for long-term growth and profitability.

Why ESG Goals Drive Investor Interest

NIO combines its profits, product plans, and sustainability goals into a future-oriented business model. The battery swap ecosystem reduces lifecycle emissions, enhances user convenience, and demonstrates progress toward net-zero goals.

The global EV battery swapping market is valued at about US$1.62 billion in 2025. It is expected to reach US$5.93 billion by 2030, showing a strong annual growth rate of 29.7%. The forecast below shows the regions where growth will be high and low.

EV battery swapping market

Another forecast anticipates an even broader expansion—from US$2.5 billion in 2024 to an astounding US$91.3 billion by 2034. These figures highlight a surging demand for fast, reliable EV charging alternatives.

In China, the ecosystem continues to expand rapidly. CATL will build 1,000 new swap stations in 2025. They aim to expand to 10,000 stations by 2028. This is part of their investment in fast and scalable EV infrastructure.

Nio’s renewable energy use and recognition for green manufacturing show that it is turning promises into results. Its global presence and partnerships extend this vision, with ESG initiatives spanning clean manufacturing, circular design, and active engagement in global climate forums. These moves strengthen its appeal to both environmentally minded investors and policymakers.

Balancing Losses with Long-Term Growth

NIO’s path forward sits at the intersection of growth and green innovation. Strong delivery numbers and better margins give it momentum. Also, the stock’s 40%+ rise in 2025 shows that investors support Nio’s growing model lineup and ESG investments.

Still, the company faces hurdles. NIO faces deep losses and strict pricing rules. So, it must focus on controlling costs and maintaining sustainable margins. Analysts predict adjusted operational profits by Q4 2025. However, full-year profits could take years to achieve.

NIO continues to blur lines between mobility, technology, and climate action. Its upcoming Q2 earnings will shed more light on revenue trends and delivery outlooks.

As the company grows its battery swap network and global reach, it can strengthen its position in clean technology and compete better in the mass-market EV sector. Thanks to its sustainability gains, investor confidence, and product innovation, NIO stands out as an EV maker aligning financial progress with real climate ambition.

World’s First Commercial CCS Plant Owned by Shell, Equinor, and TotalEnergies Injects CO2 in North Sea

Jennifer L
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World’s First Commercial CCS Plant Owned by Shell, Equinor, and TotalEnergies Injects CO2 in North Sea

Norway has opened the world’s first commercial-scale carbon capture and storage (CCS) facility, marking a turning point in global climate action. The project captures carbon dioxide (CO₂) emissions from a cement plant and stores them deep beneath the seabed in the North Sea. This is the first time a CCS project has been built and operated with a complete value chain: capture, transport, and permanent storage.

The facility, known as the Northern Lights, is part of Norway’s Longship initiative. This $3.4 billion program aims to prove that carbon capture can go beyond pilot projects and become commercially viable.

Shell, Equinor, and TotalEnergies owned the CCS plant. By proving the technology works at this level, Norway hopes to inspire other nations and industries to follow.

Transitioning from small demonstration projects to full-scale deployment is significant. Cement, steel, and chemical production are tough to decarbonize. CCS is one of the few methods that can directly reduce the industry’s emissions.

Norway’s success provides a real-world example that these industries can lower their carbon footprint without shutting down production. CEO of Equinor, Anders Opedal, remarked: 

“With CO2 safely stored below the seabed, we mark a major milestone. This demonstrates the viability of carbon capture, transport, and storage as a scalable industry. With the support from the Norwegian government and in close collaboration with our partners, we have successfully transformed this project from concept to reality.”

Beneath the North Sea: How CO₂ Is Locked Away

The captured CO₂ comes from the Brevik cement plant in southern Norway, operated by Heidelberg Materials. Cement production is a major emitter because CO₂ is released both from burning fuel and from the chemical process of turning limestone into clinker, the key ingredient in cement.

At Brevik, the gas is captured using a chemical process with amines that separate CO₂ from other gases. Once purified, the CO₂ is cooled and compressed into liquid form.

Special ships then transport the liquefied gas to the Northern Lights terminal on Norway’s west coast. From there, it is pumped through pipelines into a geological formation about 2,600 meters beneath the seabed.

Northern Lights CCS project scope
Source: Northern Lights

This deep saline aquifer, a porous rock layer sealed by thick caprock, ensures the CO₂ stays underground permanently. Geologists have studied the area for decades, and monitoring systems are in place to track the stored gas. The technology is designed to provide long-term security, with storage capacity estimated to last for hundreds of years.

What This Means for Carbon Storage

The project’s first phase can handle 1.5 million metric tons of CO₂ per year, already fully booked by customers. Phase two, planned in the coming years, aims to expand that capacity to 5 million tons annually.

For perspective, 5 million tons of CO₂ equals the annual emissions of about 2.5 million cars. While this is still a fraction of Europe’s total emissions, it shows how large-scale CCS can make a measurable impact.

The CCS project will store 127.8 million tonnes of CO₂ over its lifetime. It will emit only 3.3 million tonnes of CO₂e throughout its entire process, which includes capture, transport, and storage. This results in a net abatement rate of 97.4%. That means almost all the CO₂ captured is stored permanently and not released back into the atmosphere.

Carbon footprint of the Northern Lights JV
Source: Northern Lights

Many companies in Europe have agreed to use the Northern Lights system. This includes fertilizer makers, energy firms, and district heating providers. Interest is growing quickly, as industries see CCS as a way to meet tightening climate targets while continuing production.

The Brevik cement plant itself will capture about 400,000 tons of CO₂ per year, equal to half of its annual emissions. This captured carbon will flow directly into the Northern Lights storage system.

Heidelberg Materials will sell a special product named “evoZero.” It’s marketed as net-zero cement, made possible by CCS. All 2025 production has already been pre-sold, showing strong customer demand for low-carbon building materials.

Why It Matters for Hard-to-Decarbonize Industries

Cement, steel, and chemicals account for about 30% of global industrial emissions. These sectors are considered “hard-to-abate” because their emissions come from chemical reactions and processes, not just from burning fossil fuels. Switching to renewable electricity alone cannot eliminate them.

Cement production alone contributes nearly 8% of global CO₂ emissions. With global infrastructure demand rising, the sector cannot simply stop producing. That is why CCS is seen as one of the only practical solutions for cutting emissions while keeping production steady.

Billions in Backing: The Role of Public Funding

The facility is backed heavily by the Norwegian government, which provided $2.2 billion in subsidies for its first 10 years of operation. This covers nearly two-thirds of the total cost. Government support was critical to getting the project off the ground because CCS remains more expensive than simply emitting CO₂.

Critics argue that CCS will not scale without either higher carbon prices or continued government subsidies. At today’s carbon prices in Europe—around €60 to €80 per ton—the economics are still challenging. However, as technology improves and facilities grow, costs may fall.

Norway also sees this investment as a long-term opportunity. The country aims to be Europe’s “carbon storage hub” by creating the first complete CCS value chain. This will allow it to offer storage services to nations and industries that need them.

CCS on the Rise: Global Market Outlook

Globally, CCS capacity is still very small. As of 2024, about 50 million tons of CO₂ were captured worldwide each year, according to the International Energy Agency. To meet net-zero targets, this number needs to grow to more than 1 billion tons per year by 2030, and to several billion by 2050.

Several other large projects are under development. In the United States, the Inflation Reduction Act provides tax credits for CCS, spurring dozens of projects across the Midwest and Gulf Coast. The European Union also supports CCS as part of its Green Deal Industrial Plan, providing funding and regulatory support.

DNV_CCS_forecast_2050_CCS_uptake_in_selected_regions
Source: DNV

Analysts expect the global CCS market to reach a value of $10–15 billion annually by 2030, with steady growth beyond that. Cement, steel, and power generation would be the largest users. Shipping and aviation, which face limits on electrification, may also turn to CCS for synthetic fuels.

Companies are also exploring how CCS can pair with carbon dioxide removal (CDR), such as bioenergy with CCS (BECCS) and direct air capture (DAC). These technologies not only prevent new emissions but also remove existing CO₂ from the atmosphere. Norway’s Northern Lights project could eventually serve as a storage hub for such methods.

Hurdles Ahead: Can CCS Scale Fast Enough?

Despite its promise, CCS faces challenges. The technology is expensive, requires large-scale infrastructure, and depends on public acceptance of storing CO₂ underground. Environmental groups warn of risks, but studies over decades show the storage process is safe.

Another challenge is ensuring CCS does not delay the transition to renewables. Some critics worry that industries may use CCS as an excuse to keep burning fossil fuels longer. A Stanford University professor of environmental engineering, Mark Jacobson, stated in an interview: 

“You have to think about who’s proposing this technology. Who stands to benefit from carbon capture and direct air capture? It’s the fossil-fuel companies…They’re just saying, ‘Well, we’re extracting as much CO2 as we’re emitting. Therefore, we should be allowed to keep polluting, keep mining.”

Supporters argue that it should complement, not replace, clean energy deployment. Norway’s project is an important proof of concept. If it succeeds commercially, it could encourage similar hubs in the United Kingdom, the Netherlands, and the United States. 

The launch of the Northern Lights facility shows that CCS is moving from theory to practice. With capture, transport, and storage now working at scale, it represents a breakthrough in reducing industrial emissions.

China’s Clean Energy Cuts Emissions 1%, But Coal and Industry Cast a Shadow

Saptakee S
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0
China’s Clean Energy Cuts Emissions 1%, But Coal and Industry Cast a Shadow

China has two main trends: rapid clean energy growth and shifts in heavy industry that hurt air quality. A new report from the Centre for Research on Energy and Clean Air (CREA) shows emissions have decreased. But relocating industries is creating new pollution problems in areas that were once clean.

China’s Solar Power Drives Emissions Down

The first half of 2025 marked a positive change for China’s climate efforts. Carbon dioxide emissions fell about 1% year-on-year, the first sustained decline since the pandemic. This progress came mainly from clean energy growth.

China emissions
Source: Carbon Brief
  • Solar, wind, and nuclear energy produced an extra 270 terawatt hours (TWh) of electricity. This not only met the 170 TWh rise in demand but also cut fossil fuel use.
China clean energy
Source: Carbon Brief

Solar stood out with 170 TWh—equivalent to the annual output of Mexico or Turkey. Wind added 80 TWh, and nuclear contributed 20 TWh, while hydropower declined due to lower rainfall.

Now, low-carbon sources make up 40% of China’s electricity mix, up from 36% in early 2024. Rapid solar growth means 2025 could break records. It might add 212 gigawatts (GW) in just six months, right before a mid-year policy change. This surge makes solar the main driver of China’s emissions decline.

As a result, emissions from the power sector—the largest CO₂ source—fell by 3% compared to last year.

China solar
Source: CREA

Cleaner Air, But Regional Disparities

Air quality improved across the country. Fine particulate matter (PM2.5) fell by 5% year-on-year. Other pollutants, such as sulfur dioxide and nitrogen dioxide, either decreased or stayed the same.

However, improvements weren’t uniform. Western provinces faced stark contrasts. Guangxi saw PM2.5 levels soar by 32%, Yunnan by 14%, and Xinjiang by 8%. Unlike past spikes from weather, CREA found these increases stemmed from structural growth in emissions.

This rise is tied to relocating heavy industry westward, along with local factors like sandstorms and biomass burning. Regions once seen as safe from pollution are now emerging as new challenges for China’s air quality.

china emissions
Source: CREA

A Seasonal Double Threat

Even where pollution decreased, China faces a “two-season problem.” Winter smog is driven by coal use for heating and industry. Average national PM2.5 levels exceeded the official standard by 18%, with nearly three-quarters of provinces not meeting compliance goals.

In summer, ozone becomes the main issue. Unlike PM2.5, which declined, ozone pollution rose by 4% over the past year. This has become a significant challenge for China’s air quality policies. The mix of winter smog and summer ozone highlights the need for more adaptable governance.

Industry Moves West, Pollution Follows

The westward shift in industry is the main cause of rising pollution in inland regions. Provinces once seen as minor players in heavy manufacturing are now reporting sharp growth in steel, metals, and chemical production. Pig iron output rose over 10%, crude steel by nearly 6%, and non-ferrous metals by more than 4% in the first half of 2025.

Much of this growth relies on traditional, coal-heavy methods. Coal-based steelmaking and conventional coal chemical industries still dominate, offsetting gains from cleaner power elsewhere. As a result, polluted days are becoming more common in inland regions like Ningxia, Shanxi, and Hubei.

These trends show that industrial relocation is shifting not just jobs but also pollution from east to west.

Coal Still Impacts China’s Energy Transition

Coal remains a significant concern. Although coal-fired electricity generation has decreased, new coal plants are still being added rapidly. CREA estimates that coal power capacity could increase by 80 to 100 GW in 2025, setting a new record.

The coal-to-chemicals sector is another fast-growing source of emissions. Coal use for synthetic fuels and chemicals grew by 20% in the first half of the year. Since 2020, this sector has contributed 3% to China’s overall CO₂ emissions, with projections showing it could add another 2% by 2029.

Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air and senior fellow at Asia Society Policy Institute, shared in the guest post for Carbon Brief that, in 2024, this sector consumed 390 million tonnes of coal and emitted about 690 million tonnes of CO₂. It’s 6% of the country’s fossil emissions and nearly 10% of total coal use.

This expansion complicates China’s goal to peak emissions before 2030 and reach net zero by 2060.

Policy Needs to Catch Up

CREA’s analysis shows that China’s air quality efforts focus mainly on eastern “key control zones.” These areas were the first to face pollution challenges. In contrast, western and central provinces, where industry is expanding quickly, do not receive the same oversight, funding, or enforcement.

This creates a dangerous policy gap. Without stronger frameworks, pollution could simply shift inland, undermining national progress. CREA further recommends that the upcoming 15th Five-Year Plan (2026–2030) broaden air quality policies to fully include western and central regions, with specific targets and monitoring.

Stronger environmental assessments for new industrial projects, especially in coal-heavy sectors, could help prevent cumulative risks. At the same time, clean energy deployment and industrial electrification need to accelerate in coal-dependent provinces, supported by fiscal incentives and grid investment.

Missed Targets Increase Pressure

Despite the emissions drop this year, China is likely to miss several 2025 climate goals. These include reducing carbon intensity, curbing coal growth, and increasing the share of electric-arc steelmaking. This shortfall will heighten pressure on China’s next nationally determined contribution (NDC) for 2035 and its new five-year plan.

The good news is that the declining emissions trend, driven by solar growth, could inspire policymakers to set stronger goals. This trend shows that large-scale clean power expansion can slow and even reverse emissions growth.

The Road Ahead

China’s 2025 path shows a dual transition. Record solar growth and lower emissions indicate clean energy’s impact. Yet, pollution is moving west, ozone levels are rising, and coal-heavy industries keep expanding.

The coming years will reveal if China can close this gap. It must ensure that national progress isn’t slowed by regional issues. If air quality protections expand inland and clean energy surpasses fossil fuels, China could make lasting climate gains. Currently, its clean energy boom occurs alongside an industrial shift that may only move the pollution problem elsewhere.

Sasol’s (SSL) Stock Rises on Profits, Carbon Credit Surge, and Net-Zero Push

Jennifer L
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0
Sasol’s (SSL) Stock Rises on Profits, Carbon Credit Surge, and Net-Zero Push

Sasol Ltd., a South African energy and chemicals firm, is gaining attention. They reported stronger earnings and are shifting their strategy to buy more carbon credits. The move comes as the company, the second-biggest emitter of greenhouse gases in the region, boosts coal production and grows its renewable energy portfolio.

Investors, regulators, and climate observers are watching closely to see how Sasol balances its reliance on fossil fuels with its stated commitment to reaching net-zero emissions.

Earnings Power: Fueling a Dual Strategy

In its latest earnings report, Sasol posted a year-on-year improvement supported by stable product prices and efficiency gains. The company’s operating profit rose due to stronger chemical sales.

However, this was partly offset by higher costs in its coal division. Earnings were strong, giving Sasol the money to invest in fossil fuels and low-carbon projects.

For the fiscal year ending June 30, the company earned 10.60 rand per share. This is a turnaround from a loss of 69.94 rand per share. Asset write-downs fell sharply to 20.7 billion rand, down from 74.9 billion rand last year.

Sasol gained from a 4.3 billion rand settlement with Transnet over oil transport fees. Capital expenditure dropped 16% to 25.4 billion rand. This helped improve the company’s financial profile.

Management highlighted that a resilient balance sheet is critical as the company continues its transition journey.

Sasol has steady cash flows. This helps support its short-term coal operations. It also funds longer-term projects like renewable energy growth and carbon reduction efforts.

Sasol’s renewed profit helped lift investor sentiment. Following the earnings, the company’s shares climbed 7% in pre-market trading. Its stock on the Johannesburg Stock Exchange (JSE: SOL) surged by 44% over the last quarter.

Sasol SSL stock

Analysts predict that earnings per share will increase by 20% year-on-year. This shows rising confidence in the company’s ability to balance profit and sustainability.

Rising Carbon Credit Purchases: Flexibility or Delay?

One of the biggest headlines is Sasol’s decision to boost its purchase of carbon credits.

  • In the fiscal year that ended in June 2025, Sasol’s carbon credit purchases increased to R723 million, a 25% increase year-on-year.
  • This amount was nearly triple the value of the credits it bought in 2023.
  • Since 2019, Sasol has acquired more than 11 million South African carbon credits, which has reduced its carbon tax liability by more than R650 million.

Most of these credits come from international renewable energy and reforestation projects, while some are linked to African-based carbon offset programs. Sasol plans to grow its carbon credit portfolio, showing its commitment to climate responsibility.

Some offset projects supported by Sasol include:
  • Wonderbag: In 2021, Sasol announced it would use carbon credits generated by the Wonderbag project, which provides non-electric heat-retention cookers to reduce household emissions.
  • Bethlehem Hydro: In 2020, Sasol purchased over 100,000 credits from Bethlehem Hydro, a 7MW hydropower plant that was the first Independent Power Producer in South Africa.
  • Nitrous oxide abatement: As far back as 2007, Sasol received credits for a nitrous oxide abatement project at its nitric acid plants in Sasolburg and Secunda.

However, it recognizes that cutting emissions from its own operations is tough in the near term. The company plans to steadily increase reliance, but acknowledges that credits are a temporary solution.

The use of credits has generated debate. Supporters say it gives companies flexibility to meet interim targets while low-carbon technologies scale.

Critics argue it can delay direct emissions cuts. Sasol’s growing use of offsets shows the urgent climate pressures and the challenges of moving away from coal.

Coal’s Grip: South Africa’s Energy Dilemma

Sasol is one of South Africa’s top coal users. It relies on coal for power and to make synthetic fuels and chemicals. Its Secunda plant is one of the single largest point sources of carbon dioxide globally, emitting more than 56 million tons of CO₂ equivalent each year. 

The world’s biggest producer of fuels and chemicals from coal emits around 63 million tons of CO₂ equivalent each year. This makes it one of Africa’s largest industrial polluters.

Sasol emission reductions 2023
Source: Sasol

The company believes coal is still essential for South Africa’s energy and industry right now. This is especially true due to the country’s electricity shortages and its dependence on Eskom, the state utility. Sasol knows that relying on this can lead to risks such as regulatory pressure, investor scrutiny, and possible costs from future carbon pricing.

Counting Carbon: Sasol’s Net-Zero Targets and Progress

Despite its coal footprint, Sasol has stepped up efforts to diversify its energy mix. The company is putting money into renewable energy projects. This includes solar and wind farms. These efforts will help provide cleaner electricity for its operations.

Moreover, partnerships with independent power producers are helping Sasol shift portions of its energy use away from coal-generated power.

In addition, Sasol is advancing work in green hydrogen and sustainable aviation fuel (SAF). Its Fischer-Tropsch technology, long used for coal-to-liquids production, is being adapted for cleaner feedstocks, such as natural gas and green hydrogen. The company announced pilot projects to produce low-carbon chemicals for local and global markets.

Sasol aims to cut its Scope 1 and 2 emissions by 30% by 2030. This goal uses a 2017 baseline, which is about 72 million tons of CO₂e. Progress: current emissions are down about 13% from baseline.

Sasol net zero roadmap
Source: Sasol

It aims for net-zero emissions by 2050. However, it admits that success relies on policy support, technological progress, and available funding.

In summary, Sasol’s key emission reduction initiatives are:

  • Green hydrogen projects – Developing hydrogen production in South Africa through partnerships to support cleaner fuels and power.

  • Renewable energy procurement – Securing up to 1,200 MW of renewable electricity (wind and solar) to replace coal-based power at operations.

  • Energy efficiency improvements – Implementing process optimization and equipment upgrades to reduce energy use across its facilities.

  • Coal-to-gas transition – Shifting part of its feedstock mix from coal toward natural gas, which has a lower carbon footprint.

  • Carbon capture and utilization (CCU) – Exploring technologies to capture CO₂ from operations for use in chemicals or fuels.

  • Sustainable aviation fuel (SAF) development – Advancing projects to produce low-carbon jet fuel from sustainable feedstocks.

  • Offsets and carbon credits – Expanding purchases of carbon credits to compensate for hard-to-abate emissions.

How Sasol is reducing ghg emissions
Source: Sasol

Markets in Motion: Offsets, Renewables, and Risks

Sasol’s strategy reflects broader challenges facing energy and industrial companies worldwide. Carbon credits are gaining popularity. The voluntary carbon market was worth over $2 billion in 2024. It’s expected to grow to nearly $50 billion by 2030, under the best-case scenario.

global demand for voluntary carbon credits increase by factor of 15 by 2030 and factor of 100 by 2050

However, the credibility of offsets is under scrutiny, and investors are demanding more transparency on how credits are used.

At the same time, global coal demand remains strong, particularly in emerging markets. South Africa’s energy system still relies heavily on coal, which generates about 80% of the country’s electricity. This makes decarbonization complex, as companies like Sasol must balance energy security with climate commitments.

Meanwhile, renewable energy costs continue to fall. According to the International Renewable Energy Agency (IRENA), solar and wind are now the cheapest forms of new power generation in most regions. For Sasol, scaling renewables not only helps reduce emissions but also lowers long-term energy costs.

Balancing Growth, Risk, and Climate Goals

Sasol’s higher earnings give it the financial strength to follow its dual-track strategy. This means it can keep expanding coal operations and invest in low-carbon solutions. The company’s growing purchase of carbon credits shows its urgent need to meet climate goals. It also reflects the challenge of cutting emissions from coal-heavy operations.

Sasol’s future will depend on whether it can scale up renewable energy, develop viable low-carbon technologies, and manage the risks tied to its coal reliance. Its net-zero commitment remains a long-term goal. Yet, the company’s latest moves suggest it is trying to walk a fine line between financial performance and climate responsibility.

Kazatomprom Uranium Output Jumps 13% in 2025, But Plans for 2026 Cutback

Saptakee S
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0
Kazatomprom Uranium Output Jumps 13% in 2025, But Plans for 2026 Cutback

Kazatomprom, the world’s largest uranium producer and Kazakhstan’s national atomic company, has released its financial and production results for the first half of 2025. Despite reporting a sharp fall in profits compared to last year, the state-owned miner is sticking to its production guidance for the year and maintaining a cautious but stable outlook for the future.

Kazatomprom’s Profit and Revenue Decline in H1 2025

Kazatomprom’s consolidated revenue for the first half of 2025 was 660.2 billion tenge ($1.2 billion), down 6% from 2024 due to lower sales volumes.

  • Net profit fell 54% to 263.2 billion tenge ($489.5M) due to a one-time 2024 gain from consolidating the Budenovskoye JV. Excluding that, profit slipped only 5%.
  • Operating profit rose 12% to 253.7 billion tenge, helped by lower costs from buying less uranium from joint ventures.
  • Adjusted EBITDA slightly decreased 4% to 363.1 billion tenge, while attributable EBITDA—which counts only the company’s own share—increased 10% to 302.4 billion tenge.

This shows Kazatomprom kept costs under control and improved core profitability despite lower sales volume and the absence of one-time gains.

CEO Meirzhan Yussupov, made an elaborate statement, saying:

“As the world’s largest producer and seller of natural uranium, Kazatomprom fully recognises the critical role the Company has in supporting the global energy transition. We remain committed to delivering long-term value to all stakeholders. Kazatomprom is currently undertaking a large-scale exploration in Kazakhstan, which is a top priority for replenishing its resource base and maintaining its leading position as a global nuclear fuel supplier,” said

“Despite the volatility in the spot uranium market and the broader capital markets, some of which may be due to uncertainty brought by the tariff wars, uranium long-term price has remained stable at 80 US dollars per pound proving that fundamentals remain strong. However, the Company does not view the current market developments to be sufficient to return to the Company’s initial 100% levels at this time, which are now being decreased by roughly 8 million pounds, cutting about 5% of the world’s primary supply.

“Kazatomprom takes its role in strengthening global energy policy seriously. Its leadership in ESG, combined with the scale of its operations, enables the Company to remain a reliable and responsible supplier of natural uranium globally. We are ready to participate in diversification of utilities’ supply sources, and our strong position in this new cycle of long-term contracting reflects the trust and confidence the market places in us.”

Kazatomprom revenue
Source: Kazatomprom

Boost to Uranium Production and Sales

During the first six months of 2025, Kazatomprom produced 12,242 tonnes of uranium (tU) on a 100% basis, representing a 13% increase year-on-year.

Looking ahead, the miner expects to finish 2025 with annual output of 25,000–26,500 tU on a 100% basis. On its attributable basis (Kazatomprom’s own share in joint ventures), full-year production is estimated at 13,000–14,000 tU.

  • Uranium sales for this year are projected at 17,500–18,500 tonnes, while the all-in sustaining cash cost (AISC) is expected to stay between $29.00 and $30.50 per pound.
uranium Kazatomprom
Source: Kazatomprom

Plans for 2026 and Beyond

Kazatomprom also gave a crucial update regarding its 2026 production strategy. The company will reduce its nominal output level by about 10%, cutting production from roughly 32,777 tU to 29,697 tU. Most of this decrease will come from adjustments at the Budenovskoye operation.

Importantly, this decision is not tied to supply constraints. In fact, sulphuric acid — a critical input for Kazakhstan’s in-situ recovery mining — is expected to be available in stable amounts. Instead, the reduction reflects the company’s long-term policy of “value over volume”: prioritizing market balance and profitability over sheer output growth.

The company also highlighted Kazakhstan’s plans to develop its own nuclear power plants in the coming years. These facilities could create strong internal demand for uranium, giving Kazatomprom an additional domestic market alongside its dominant global role.

Kazakhstan’s Unique Advantage: Sustainable Uranium Mining with In-Situ Recovery (ISR)

One of Kazatomprom’s greatest strengths is its use of in-situ recovery (ISR) mining. This method extracts uranium from underground deposits using a liquid solution, eliminating the need for large open pits. This approach is:

  • Environmentally friendlier than conventional mining.
  • Less carbon-intensive, producing far lower greenhouse gas emissions.
  • More cost-efficient, keeping production competitive against global peers.

As of 2024, Kazatomprom produced 23,300 tonnes of uranium (100% basis) using ISR, equal to 21% of worldwide production. This made it the largest supplier of uranium on the planet, controlling about 40% of the global market.

uranium Kazatomprom
Source: Kazatomprom

ESG and Net-Zero Commitments

The uranium giant is not just a production leader, but also a champion of sustainable mining. Its updated 2025–2034 strategy places responsibility and environmental protection at the core of its business model.

Climate Targets

  • Achieve carbon neutrality by 2060.
  • Cut emissions by 10–15% by 2030, and by 55% by 2045.
  • Keep direct (Scope 1) emissions below Kazakhstan’s reporting threshold of 20,000 tonnes of CO₂ equivalent each year.

ESG Initiatives

  • Participates in Kazakhstan’s Emissions Trading System.
  • Regularly reports on environmental, social, and governance (ESG) performance.
  • Invests in renewable energy solutions, clean technology R&D, and energy efficiency upgrades.
  • Committed about $30 million in 2024 to green innovation, with plans to expand this spending moving forward.

As a result of these initiatives, S&P Global raised Kazatomprom’s ESG score to 50/100 in December 2024 — more than double the industry average.

Community Engagement and Social Responsibility

The company supports community initiatives like Earth Hour, Car-Free Day, and tree planting efforts across Kazakhstan. These campaigns aim to raise awareness about climate change and sustainability among both employees and the public.

The company also collaborates with research institutions for developing medical isotopes and recovering useful byproducts from uranium mining.

Reliable Uranium Supply Secures Kazatomprom’s Global Leadership

By maintaining its dominant share of the uranium market, Kazatomprom plays a central role in the global transition toward low-carbon and nuclear power generation. Nuclear energy is regaining demand worldwide as governments seek cleaner, stable energy sources to meet climate targets.

The company’s ability to provide a reliable uranium supply, combined with its focus on sustainability and climate action, positions it as not just a commercial giant but also a key partner in the fight against climate change.

Kazatomprom’s first-half 2025 results show stable core operations despite lower net profit. Costs stayed controlled, and adjusted profits dropped only slightly. The company chose not to return to full production. Instead, it plans a 10% cut for 2026 to focus on long-term market stability and growth. With advanced ISR mining, strong ESG goals, and global reach, Kazatomprom is set to remain a top uranium supplier.

Coffee and Carbon Credits: Revealing the Real Value of Shade-Grown Coffee

Jennifer L
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0
Coffee and Carbon Credits: Revealing the Real Value of Shade-Grown Coffee

Coffee is one of the most traded agricultural products in the world. Behind every cup lies a vast network of farms, many of which play a role in climate solutions. Shade-grown coffee farms, in particular, are gaining attention for their ability to store carbon and protect biodiversity.

Unlike conventional coffee grown under full sun, shade-grown coffee is cultivated beneath a canopy of trees. These trees capture carbon dioxide, cool the soil, and provide habitats for birds and insects.

Researchers estimate that shade-grown coffee farms store 70 to 80 metric tons of carbon per hectare. This is similar to what tropical forests can store. This makes them valuable natural carbon sinks. Yet in today’s carbon markets, their contributions are often undervalued or overlooked.

Why Shade-Grown Coffee Is Undervalued

Carbon credit markets reward activities that reduce or remove greenhouse gases, often through reforestation, renewable energy, or soil carbon projects. However, many coffee farms do not fit neatly into these categories.

Shade-grown coffee systems exist in a “gray zone.” They hold a lot of carbon, but current standards often miss their full impact.

Research in Phys.org, for example, shows that carbon captured in shade-grown coffee systems is seen as less valuable. This is compared to credits from large tree-planting projects. This undervaluation discourages farmers from maintaining or expanding these systems.

The challenge lies in verification. Measuring carbon in mixed-use farms is more complex than counting trees in a plantation.

Shade-grown farms mix crops with trees of various species and ages. This creates rich ecosystems, but it also complicates calculations. Without clear accounting frameworks, the market discounts their true value.

NZCBI ecologist Ruth Bennett, senior author of the study, remarked:

“There is a lot of money behind planting trees on degraded coffee farms, yet there are basically no financial incentives, outside of the Smithsonian Bird Friendly certification, to protect standing shade trees…To be clear, planting shade trees on monoculture coffee farms is a positive step, but our findings show tree planting alone can’t make up for what you lose when you remove mature shade trees.”

Global Evidence: What New Studies Reveal About Agroforestry

A recent meta-analysis published in Communications Earth & Environment offers fresh insights. The study looked at data from 67 research sites. It compared shaded monocultures, simple agroforestry, and complex agroforestry systems in various regions.

The findings show that complex agroforestry systems, which include mature native trees, store significantly more carbon than shaded monocultures. The study used statistical methods, such as Hedges’ g, to compare carbon stocks. It showed that farms with more tree species and higher tree density store more carbon.

Conceptual representation of carbon stock and biodiversity value across a gradient of coffee agroforestry complexity.

Conceptual representation of carbon stock and biodiversity value across a gradient of coffee agroforestry complexity
Source: https://doi.org/10.1038/s43247-025-02574-w

A study by the Smithsonian found that clearing shade-grown systems for plantations could release 174 to 221 million metric tons of carbon. That’s more than double what planting new trees on all plantation-style coffee farms could sequester.

The researchers found that coffee farms already hold about 482 million metric tons of carbon in their trees and plants. If all sun-grown farms added shade trees, they would only capture an extra 82 to 87 million metric tons of carbon.

These results show one key point: keeping existing shade trees gives more climate benefits than just planting new ones. It also highlights how current policies and market structures fail to account for these benefits.

Farmers at the Frontline: Unlocking Market Opportunities

If better recognition were given, millions of smallholder coffee farmers could benefit. Coffee is mostly grown in developing countries, where farmers often face unstable incomes. Linking shade-grown farms to carbon markets could provide an additional revenue stream.

For instance, carbon credit prices could go between $5 and $20 per ton in voluntary markets. Some credit types can cost less than five dollars, and others are above 20.

carbon credit price per project type abatable
Source: Abatable

Coffee farmers could earn more by selling credits for the carbon stored in their trees and soils. A hectare of shade-grown coffee that stores 70 tons of carbon could be worth hundreds or even thousands of dollars in credits over time.

However, this potential remains mostly untapped. Certification costs, complex verification, and limited buyer awareness all stand in the way. Without reforms, farmers lose both income opportunities and incentives to keep their land forested.

Broader Climate and Biodiversity Benefits

Shade-grown coffee does more than store carbon. It also delivers ecosystem services that align with global sustainability goals. These include:

  • Biodiversity protection: Forest-like farms support birds, pollinators, and other wildlife. Studies show that bird populations are much higher in shade-grown systems compared to sun-grown monocultures.
  • Soil health: The canopy reduces erosion and maintains soil fertility.
  • Water conservation: Tree cover shades streams and improves watershed health.
  • Resilience: Farms with diverse crops and trees are less vulnerable to climate extremes, pests, and diseases.

These co-benefits strengthen the case for integrating coffee farms into carbon markets. Buyers want high-quality carbon credits that offer biodiversity and community benefits. They look for more than just raw carbon numbers. Shade-grown coffee projects could meet this demand with appropriate recognition.

Barriers to Fair Trade in Carbon Markets

Despite the promise, several challenges remain. Current carbon accounting tools are not designed for agroforestry systems like coffee. Without standardized methods, it is difficult to prove and sell credits. Certification processes can also be expensive, often beyond the reach of small farmers.

Another issue is market awareness. Many credit buyers are more familiar with large-scale reforestation or renewable energy credits. Educating investors and companies about the benefits of agroforestry-based credits is key to driving demand.

Policymakers also have a role. Coffee-producing countries could add shade-grown systems to their climate plans. This would help them qualify for international carbon finance. Partnerships among certification bodies, NGOs, and farmer cooperatives can cut costs. This makes participation easier for everyone.

From Niche to Mainstream: Brewing Climate Solutions

For shade-grown coffee to reach its potential in carbon markets, a shift is needed. Recognition of agroforestry as a legitimate and measurable form of carbon storage is the first step, as analysts suggest. Improved science, digital monitoring tools, and satellite imagery are making this easier. When measurement is more reliable, verification costs may drop. This can help millions of farmers.

The global voluntary carbon market is projected to grow to $50 billion by 2030. Other estimates show it can reach up to $250 billion by 2050 in a high-demand scenario. If shade-grown coffee captures even a fraction of this, it could transform both farm incomes and climate outcomes.

carbon credit market value 2050 MSCI

Shade-grown coffee farms represent an overlooked climate asset. They store large amounts of carbon, protect biodiversity, and support rural livelihoods. Yet, carbon markets currently undervalue them, leaving both farmers and the environment at a disadvantage.

As carbon markets evolve, there is a growing opportunity to integrate coffee agroforestry systems. With better recognition, measurement tools, and supportive policies, shade-grown coffee could move from the margins to the mainstream of climate finance. For every cup of coffee, there could also be a story of carbon storage and environmental protection.

Deep Sky and Skyrenu Launch North America’s First Direct Air Capture (DAC) Storage Facility

Saptakee S
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Deep Sky and Skyrenu Launch North America’s First Direct Air Capture (DAC) Storage Facility

Deep Sky, Canada’s leading carbon removal project developer, has kicked off operations at Deep Sky Alpha, its flagship commercialization center in Innisfail, Alberta. The facility has achieved a major industry milestone—North America’s first-ever underground storage of CO₂ captured directly from the atmosphere.

This breakthrough was made possible through a partnership with Skyrenu Technologies, a Quebec-based startup specializing in direct air capture (DAC). Skyrenu’s system successfully removed CO₂ from the air and, working with Deep Sky, permanently stored it underground. The event marks the first complete carbon removal cycle using a Canadian-developed DAC solution.

Alex Petre, Deep Sky CEO, commented,

“This is exactly what Deep Sky Alpha was built for. A product of Sherbrooke University, Skyrenu’s achievement shows that Canadian climate tech can lead on a global stage and that carbon removal is ready to scale today.”

Skyrenu: A Canadian Climate Tech Success Story

Skyrenu is not just another climate startup. Born out of Sherbrooke University and spun from the XPRIZE Carbon Removal competition, the company first gained attention after winning the student prize in 2021. It later ranked among the top 20 finalists worldwide in the competition.

The company builds compact, modular DAC systems designed for:

  • Low energy consumption

  • Scalable deployment

  • Rapid commercialization

By developing cost-efficient and flexible technology, Skyrenu is positioning itself as one of Canada’s strongest climate technology innovators. Its DAC unit, now operating at Deep Sky Alpha, has the capacity to remove 50 tonnes of CO₂ per year.

Gabriel Vézina, Skyrenu CEO,

“We’re incredibly proud to lead the way as the first Quebec-based DAC technology to capture CO₂ for permanent storage in North America. Our partnership with Deep Sky is a powerful example of how to accelerate DAC to climate-relevant scale. Deep Sky’s ability to integrate the full value chain—from CO₂ capture to sequestration—perfectly complements Skyrenu’s focus on designing and producing high-performance DAC units. Together, we can deliver impactful projects faster, generate high-quality carbon removal, and set a new benchmark for the industry. This first win proves that we have the model to lead the way in Canada and beyond.”

Deep Sky’s Vision: Gigaton-Scale Carbon Removal

Montreal-based Deep Sky has quickly emerged as a global leader in carbon removal project development. Unlike single-technology players, Deep Sky is tech-agnostic—bringing together multiple DAC and ocean carbon capture technologies under one roof.

With $130 million in funding from high-profile backers like Investissement Québec, OMERS Ventures, BDC Climate Fund, Breakthrough Energy Catalyst, and leading Canadian banks, Deep Sky is building the world’s largest pipeline of high-quality carbon credits.

Its long-term mission is clear: remove gigatons of carbon from the atmosphere and permanently store it underground.

Deep Sky Alpha: Canada’s First Carbon Removal Commercialization Center

Located on five acres in Innisfail, Alberta, Deep Sky Alpha represents a world first in cross-technology carbon removal testing. The facility runs entirely on solar energy and is built to accelerate the transition from prototype to full commercialization.

Key highlights of the Alpha project include:

  • 3,000 tonnes of CO₂ capture per year capacity

  • 100% renewable power supply

  • Permanent underground storage in Alberta’s saline aquifers, 2 kilometers below ground

  • Rapid deployment timeline—built in just 12 months

  • Economic impact—over 110 construction jobs created and 15 permanent roles

By combining several DAC technologies under identical conditions, Alpha enables real-world validation, scalability testing, and generation of verifiable carbon credits.

Deep sky alpha
Source: Deep Sky

Why Alberta Is the Perfect Location?

Alberta’s geology makes it a prime site for permanent CO₂ storage. The province has abundant deep saline aquifers, rock formations capable of holding carbon safely for thousands of years.

Innisfail was chosen not only for its geology but also for its proximity to renewable energy sources and industrial infrastructure. This strategic setup supports cost-effective scaling of carbon removal projects while maintaining transparency and safety.

The First Step Toward a Global Carbon Removal Network

Deep Sky Alpha is more than just a standalone project—it’s the first step in a larger global rollout.

The company is already advancing large-scale carbon removal projects across Quebec, Alberta, and beyond. Its international ambitions are also backed by recent deals, including:

  • A $40 million grant from Breakthrough Energy Catalyst

  • Carbon credit purchase agreements with major buyers such as Microsoft and Royal Bank of Canada

With these partnerships, Deep Sky is laying the foundation for a global network of carbon removal hubs.

High-Quality Carbon Removal: Essential for Net Zero

As governments and corporations work toward net-zero goals, permanent carbon removal is becoming a non-negotiable part of climate action.

Unlike emission reductions alone, carbon dioxide removal (CDR) technologies provide a way to actively pull CO₂ out of the atmosphere. For hard-to-abate sectors like aviation, shipping, and heavy industry, solutions like DAC and geological storage are critical.

Skyrenu’s deployment at Deep Sky Alpha highlights the importance of homegrown, scalable, and verifiable CDR solutions. Each tonne of CO₂ captured and stored is measurable, permanent, and market-ready as a carbon credit.

Also moving on, Deep Sky’s selection of Skyrenu reflects the company’s rigorous criteria for technology partnerships. It seeks solutions that are:

  • Electrified: Must run entirely on clean electricity without relying on fossil-based heat sources.

  • Low-energy: Targeting 1,000 kWh per tonne of CO₂ or less to maximize efficiency.

  • Simple and focused: Technologies that concentrate purely on CO₂ capture rather than producing multiple byproducts, reducing logistical complexity.

This focus on scalability, simplicity, and efficiency helps Deep Sky fast-track technologies from lab prototypes to commercial solutions.

The Global Direct Air Capture (DAC) Market: Growing at Record Speed

Deep Sky’s work comes at a time when the Direct Air Capture market is booming.

DAC direct air capture
Source: Market.us

  • The global DAC market is projected to reach USD 120,811 billion by 2034, up from USD 1,007 billion in 2024.

  • That’s a staggering CAGR of 61.4% between 2025 and 2034.

  • North America is leading the sector, with 48.3% market share.

This growth reflects rising demand for high-quality carbon credits and the urgent need to balance global emissions. Deep Sky Alpha positions Canada as a leader in this emerging trillion-dollar industry.

LanzaTech (LNZA) Stock Soars 18%: Can Carbon Recycling Power Its Next Breakout?

Jennifer L
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0
LanzaTech (LNZA) Stock Soars 18%: Can Carbon Recycling Power Its Next Breakout?

LanzaTech Global (NASDAQ: LNZA) saw its shares jump nearly 18% in a single day, making it one of the top market gainers. The rally comes after weeks of steep declines, with the stock falling from $58 on July 25 to just $23. This sudden surge grabbed investors’ attention. It showed a renewed interest in the company’s role in clean energy and carbon recycling.

LanzaTech stock
Source: Yahoo Finance

The movement shows how the market feels about climate technology. It also highlights companies that offer scalable solutions to cut emissions. Investors seem to believe that LanzaTech’s technology can help with the clean energy shift. However, financial pressures still pose a challenge.

Microbes at Work: Turning Pollution Into Products

LanzaTech specializes in carbon capture and reuse technology. The company’s microbes convert harmful emissions, such as carbon monoxide and carbon dioxide, into useful products. The useful products include fuels, plastics, and chemicals that typically need fossil inputs. This unique process also helps stop air pollution.

The process is a form of carbon recycling, where pollution is captured and transformed into something valuable. LanzaTech has already partnered with steel plants, refineries, and airlines to show how its system can work at scale.

For example, its jet fuel made from captured carbon has already flown in commercial flights. This shows that industrial waste gases can fit into a circular economy.

This focus on turning emissions into resources has made LanzaTech a key player in the growing circular carbon economy, where waste is reused instead of released.

Lanzatech carbon recycling technology
Source: LanzaTech

ESG Profile and Net-Zero Role: Why Carbon Recycling Matters

LanzaTech’s business model is directly tied to climate and ESG (environmental, social, governance) goals. By helping industries lower emissions, it supports broader efforts to reach net-zero. According to company disclosures, its technology has already helped reduce millions of tons of carbon emissions from entering the atmosphere.

Its model also aligns with global decarbonization policies. Governments and investors increasingly support technologies that can cut emissions in hard-to-abate industries such as steel and cement. LanzaTech helps these sectors recycle their emissions. This approach provides a practical path to net-zero instead of complete elimination.

The company’s sustainability update showed that its projects have prevented over 500,000 metric tons of CO₂ emissions so far. It also mentioned that scaling its technology could recycle billions of tons globally. This would happen if it’s used at large industrial sites around the world.

The Cost of Clean: Financial Hurdles and Opportunities

Despite its technological progress, LanzaTech faces financial headwinds. The stock’s decline from late July shows how investor confidence has been tested. Revenue growth has been uneven, and profitability remains a long-term target rather than a near-term reality.

Its Q2 2025 earnings revealed a net loss of $25.5 million on $10.2 million in revenue, reflecting substantial investments in research and infrastructure.

Analysts point out that climate technology firms often face this challenge:

  • Scaling complex infrastructure projects requires heavy upfront investment before profits can be realized.

Partnerships with industrial players and government-backed funding are therefore critical for LanzaTech’s path forward.

The company has sought to strengthen its balance sheet through collaborations, licensing agreements, and government grants. Still, market volatility underscores the risks for early investors in climate technology stocks.

Semiconductors & Steel: Tackling Hard-to-Abate Emissions

Industries like chipmaking and heavy manufacturing show how complex emissions reduction can be. The semiconductor industry is responsible for about 0.5% of global greenhouse gas emissions, says the International Energy Agency. These processes require energy-intensive fabrication, chemicals, and logistics, which are hard to decarbonize.

LanzaTech’s technology sits at this intersection. It offers recycling options for industrial emissions. This tool helps boost renewable energy growth.

Instead of just focusing on cutting new emissions, it also ensures existing pollution is put back into the production cycle. This dual approach strengthens its position in global decarbonization strategies.

Carbon-to-Value: The Market That Could Hit Billions

The carbon recycling industry is growing quickly as countries and companies search for new ways to cut emissions. Experts say the global market for carbon capture, use, and storage (CCUS) could rise from about $3 billion in 2023 to over $15 billion by 2030. A large part of this growth will come from recycling carbon into fuels, chemicals, and consumer products.

CCUS by 2030 McKinsey.jpg
Source: McKinsey & Company

Several trends are driving the market. Stricter climate rules in the U.S., Europe, and Asia are forcing industries to lower pollution.

At the same time, new technologies like LanzaTech’s gas fermentation are making it easier to turn waste carbon into useful goods. Many big companies also want to buy recycled carbon products to reach their net-zero targets.

Airlines and shipping companies are trying out low-carbon fuels. Likewise, consumer brands are exploring packaging made from recycled carbon.

Reports suggest the “carbon-to-value” market—where waste carbon becomes new products—could be worth tens of billions of dollars by the 2030s. But there are still challenges:

  • Building plants is expensive,
  • Policies are not always clear, and
  • Production needs to scale up.

If these hurdles are solved, carbon recycling could play a big role in creating a circular carbon economy. This would give companies like LanzaTech a strong position in a growing industry.

Balancing Promise and Pressure: What’s Next for LanzaTech?

LanzaTech’s sharp daily gain highlights how investor interest in climate technology can shift quickly. While the stock remains far below its July peak, its clean technology narrative continues to drive attention.

Going forward, much will depend on LanzaTech’s ability to secure large-scale projects and prove consistent revenue growth. Its partnerships with airlines, consumer goods companies, and industrial sites look good. But the way to profit is still unclear.

Notably, rising pressure on industries to cut emissions ensures that solutions like LanzaTech’s will remain relevant. Governments are setting stricter climate policies, and companies are adopting net-zero pledges. LanzaTech fits into this landscape as both an enabler of emission reductions and a driver of the circular carbon economy.

Its sustainability profile aligns with ESG and net-zero goals, giving it strategic importance as industries search for scalable solutions. However, the stock’s volatility shows the financial hurdles that climate technology firms still face. LanzaTech’s future will depend on balancing technological breakthroughs with consistent financial performance.

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