Top 3 Nickel Stocks for 2024

Carbon Credits
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Top 3 Nickel Stocks for 2024

A Critical Mineral Analysis

As we edge closer towards a more sustainable world, the demand for nickel is skyrocketing. Nickel’s inherent properties such as strength, ductility, and resistance to heat and corrosion make it indispensable across various industries, notably the production of stainless steel.

But more importantly, nickel plays a pivotal role in the makeup of the lithium-ion batteries used in electric vehicles (EVs). With its key role in clean energy transition, as well as general industrial use, nickel was added to the U.S. government’s critical minerals list in 2022.

This list is the result of the Energy Act of 2020, which defined critical minerals as those:

“essential to the economic or national security of the United States; have a supply chain that is vulnerable to disruption; and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the U.S.”

There’s a lot to chew on there, but in simple terms: critical minerals are those that the U.S. can’t function without, or those that the U.S. depends too much on antagonistic foreign powers for.

It’s not just the U.S., either – several other countries have their own critical minerals lists, such as Canada, the EU, South Korea, and Japan – and they all have nickel on them.

nickel prices

But despite a brief spike in early 2022 when the Russian invasion of Ukraine drove prices up on fears of a potential supply disruption, nickel prices have stayed fairly stable over most of the past decade, generally trading in the band between $10,000-$20,000.

Though nickel is indeed crucial to our net zero future, a healthy surplus of mine supply combined with a global slump in steel demand have offset the strong growth of the EV market (shown below), leading to nickel’s current weak price environment.

increase nickel demand

Still, though the near-term outlook for nickel isn’t strong, the green transition is expected to widen the gap between supply and demand.

International Energy Agency (IEA) Forecast

The International Energy Agency (IEA) has forecasted that at the current pace of development, nickel demand will outstrip supply by roughly 25% in 2030, yielding a more positive long-term nickel prices outlook.

In the meantime, here’s a close look at the top three nickel stocks that are poised to capitalize on this growing demand, with a focus on their production capabilities, market positioning, and forward-looking strategies.

1. Vale S.A. (NYSE: VALE) Market Cap: US$48 Billion

As the world’s second largest producer of nickel in 2023, Vale stands out with operations spanning Brazil, Canada, Indonesia, and New Caledonia.

  • Notably, the company’s Long Harbour nickel processing plant in Canada set a benchmark in low-carbon nickel production, emitting about a third of the industry’s average CO2 levels.

Last year, Vale produced 164,900 tonnes of nickel, 8% lower than the year previous but in line with guidance due to ongoing development at some of its mines.

This scale, combined with its commitment to sustainability, positions Vale robustly in the face of escalating demand, especially from the EV battery sector. The company’s strategy to expand nickel output while adhering to environmental standards makes it a compelling choice for investors focusing on sustainable growth.

The main drawback with Vale lies in the fact that the company is a diversified miner that also produces iron ore and copper. In particular, nickel only represented 8.8% of the company’s operating revenue in 2023.

Still, this inclusion of other business segments isn’t necessarily a bad thing, as it does help lower the risk of the company as an investment. Those looking for a more conservative pick that still retains exposure to the growth of the nickel market can definitely consider Vale as a pick for their portfolios.

Vale S.A.

2. Glencore plc (LON: GLEN | OTC: GLNCY) Market Cap: US$70 Billion

Next on our list is the world’s third-largest producer of nickel, UK-based Glencore. Like Vale, Glencore is a diversified miner that operates in several different markets.

Last year, Glencore produced 97,600 tonnes of nickel. While that only accounted for a modest 4.2% of Glencore’s total revenue for 2023, one thing that sets Glencore apart from Vale is that it’s significantly more diversified than the latter, with an energy segment on top of its metals and minerals segment.

Glencore’s broad mandate combined with its size make it a relatively safe investment, and the company has done very well since the post-COVID market lows. The company has also received positive attention for its very aggressive emissions reduction targets that include a 25% reduction in Scope 1, 2, and 3 emissions by the end of 2030 and a 50% reduction by year-end 2035 against a 2019 baseline.

Many major companies still refuse to even report Scope 3 emissions, let alone set near-term emissions reduction targets for them, so Glencore is definitely ahead of the curve with their climate action plan.

Last but not least, Glencore’s primary listing on the London Stock Exchange makes it easier for Europe-based investors looking for nickel exposure, though the company also has foreign ordinary shares and ADRs listed on the U.S. OTC market.

Glencore

3. Canada Nickel Company (TSXV: CNC | OTC: CNIKF) Market Cap: US$160 Million

Finally, our last company is one for aggressive investors with a healthy appetite for risk, who are looking for more direct exposure to the growth of the nickel market compared to the diversified miners mentioned above.

Canada Nickel is a junior nickel miner based out of – you guessed it, Canada. While this may not seem like it warrants a special mention, it’s worth noting that the U.S. imports over 40% of its nickel from its northern neighbour. This makes Canada an extremely attractive jurisdiction for nickel producers, as a major buying market is only a short hop across the border.

The Crawford Nickel Project

The company has done an excellent job of consolidating nickel projects in the historically prolific Timmins mining camp in Ontario, one of the largest gold mining districts in the world. While nickel has traditionally been mined primarily as a by-product in the area, Timmins has struck proverbial gold with its flagship Crawford Nickel Project.

  • Right now, Crawford is actually the world’s second nickel operation by reserve size. Based on its bankable feasibility study, it’s projected to be the third largest nickel mine in the world in terms of annual production once it’s built.

Currently, Canada Nickel is still finishing the funding and permitting process for Crawford. The final decision on whether or not to build the mine is expected to happen mid next year, with first production expected by year-end 2027 if all goes according to plan.

Though Canada Nickel has acquired a number of other projects in the area, Crawford is definitely the main draw here. It’s expected to be a low-cost mine with robust economics and a lengthy 41-year mine life. The company’s novel approach to carbon storage, integrated into its mine plan, would also make Crawford not just a low-carbon-emission mine, but actually net carbon negative over its lifetime.

As good as all this sounds, however, it’s important to remember that as a junior miner that isn’t even producing any nickel yet, Canada Nickel is a highly speculative investment that should only be considered by investors with high risk tolerance.

While a number of major companies already have their eyes on Canada Nickel, with big names like Agnico Eagle, Samsung, and Anglo American taking significant ownership stakes, there’s no guarantee that Canada Nickel will be able to secure the funding and permits necessary to build a mine at Crawford, or that the company will succeed even if they do.

Still, if you’re looking for an investment with pure play exposure to nickel and have the right risk profile, Canada Nickel is one company you don’t want to miss.

Canada Nickel Company

A Brief Note on Norilsk Nickel (Nornickel)

Now, those of you who’ve looked at the companies above might be wondering something: why wasn’t the world’s largest nickel producer, Norilsk Nickel a.k.a. Nornickel, included?

Unfortunately, despite its attractiveness as the world’s largest nickel producer that’s also the closest thing you can get to a pure play major, there’s one major issue with Nornickel: it’s a Russian company.

Following the Russian invasion of Ukraine in 2022, Nornickel was one of several companies sanctioned by the West, leading to the stock getting delisted from both the American as well as the London stock markets.

As of June 2024, Nornickel is still listed on the Moscow Exchange. However, given that the Russian government has restricted foreign investors in “unfriendly” countries from buying and selling securities on the Moscow Exchange, the company is inaccessible to the average investor for the foreseeable future.

Nickel’s Importance in a Zero Emissions World

The global transition towards renewable energy and the exponential growth of the EV market are key drivers for demand growth for nickel. And lets not forget about lithium’s importance in “lithium ion” batteries along with nickel for new EVs.

RELATED: LiFT Power ($LIFFF), a fast developing North American lithium junior, is worth a look in the lithium space. 

lithium ion

The companies listed above aren’t just mining firms – they’re also strategic players in the global shift towards sustainable energy. Investing in these stocks offers potential exposure to a critical resource that powers both today’s industries and tomorrow’s technologies.

Each company’s focus on expanding production capabilities while maintaining environmental and ethical standards provides a strong foundation for growth.

As the net zero transition continues accelerating the pace of EV adoption and hence the growth of the nickel market, make sure you keep your eyes on these three companies.

$100B Carbon Market Could Drive $700B Annual Investments in Projects

Jennifer L
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$100B Carbon Market Could Drive $700B Annual Investments in Projects

A new report from a carbon rating company, BeZero Carbon, reveals that a $100 billion carbon market could protect 150 million hectares of land, equivalent to the size of Peru, and drive $700 billion annual investments in carbon projects. 

The report, “$100bn for Planet and People,” highlights the potential environmental and economic benefits of a global carbon market of this scale. BeZero also estimates that such a market could support 12.4 million jobs in forestry, nearly 3 million in sustainable agriculture, 310,000 in renewables, and 50,000 in adjacent industries.

Tommy Ricketts, CEO and co-founder of BeZero Carbon, stated: 

“A $100bn project-based carbon market would deliver immense benefits for the planet and people. It means companies spending billions on new technologies and land restoration, supporting more jobs than the oil and gas sector while reducing our global footprint.”

From Forests to Farmlands: Diverse Activities Generating Carbon Credits

Today, over 50 types of activities generate carbon credits, ranging from forestry and mangroves to methane capture and soil carbon sequestration. And the number is steadily increasing. 

Each carbon credit represents one tonne of carbon dioxide or another greenhouse gas equivalent (CO2e) mitigated by a specific activity over a defined period. 

This expanding array of carbon credit-generating activities highlights the versatile approaches available to combat climate change. It underscores the growing importance of the voluntary carbon market (VCM) in global emission reduction efforts.

The market has seen massive growth in 2021 but concerns over carbon credit integrity impacted the market. Issuances have dropped in two consecutive years as shown in the chart below. 

voluntary carbon credit retired and issued 2023

Still, forecasts are positive for the VCM’s growth as the world strives to mitigate climate change and cut carbon emissions.

BloombergNEF projects that the global carbon market will surpass $100 billion by the mid-2030s. The analyst also estimated demand for credits to reach 2.5 billion annually at an average price of $40. 

How a $100B Market Drives Emission Reductions

The report provided several relevant insights into what the $100 billion carbon credit market could offer. Here are some key findings that the entire sector should know. 

  1. A $100B carbon credit market in the mid-2030s could finance emissions removal projects delivering about 20% of the carbon removals needed for a 1.5-degree Celsius pathway, according to the Paris Agreement. Such a market would focus on projects like reforestation, Direct Air Capture (DAC), and Bioenergy with Carbon Capture and Storage (BECCS). 
  2. The market could drive $700 billion in annual investments into carbon projects, a ratio of 7:1. The revenue from carbon credits makes these projects viable, unlocking essential institutional capital, especially for technologies that need substantial upfront and operational investments like DAC. Without carbon credits, these projects would struggle to attract the necessary funding to reduce and remove carbon emissions effectively.
  3. The report suggests that in a $100B market, retired carbon credits will reduce or remove around 1.2 billion tonnes of CO2e emissions annually. This represents a significant environmental impact, equivalent to about 3% of current global emissions. This is equal to Japan’s annual emissions and one-and-a-half times that of the entire global aviation industry. 
  4. The $100 billion carbon credit market could finance nature-based projects covering around 150 million hectares, equivalent to 30% of global forest loss since 2000 and larger than Peru. These projects, such as afforestation in Brazil, blue carbon in Indonesia, and soil carbon initiatives in the US, support endangered species, protect coastal areas, and improve soil health. 

BeZero $100B carbon credit market report

By preserving and rebuilding diverse ecosystems, carbon credits contribute significantly to global environmental sustainability and biodiversity.

Moreover, these credits, based on conservative risk adjustments, ensure genuine emissions reductions and removals. As such, this underscores their role in mitigating climate change by effectively offsetting substantial amounts of greenhouse gas from various sectors.

Clearing The Path to Expansion

But to achieve a $100 billion market, rapid expansion is needed, addressing recent issues with carbon credit projects and enhancing verification and certification services. The report calls for integrating voluntary carbon credits into compliance markets, clear regulatory definitions, and operationalizing international carbon markets under Article 6 of the Paris Agreement.

The Science Based Targets Initiative (SBTI) is considering allowing carbon credits for companies’ Scope 3 emissions, potentially impacting six gigatonnes of CO2e. If approved, this could value the global carbon market at $100 billion annually.

The report also urges corporates to adopt internal carbon prices and project developers to enhance high-quality project delivery.

While supporters believe this approach could boost investment in carbon removal projects, critics worry it may undermine the integrity of science-based targets and reduce pressure on companies to cut supply chain emissions.

The potential of a $100 billion carbon credit market extends far beyond just economic benefits. By protecting 150 million hectares of land and creating millions of jobs across various sectors, such a market could drive substantial environmental and social progress. Addressing verification and certification challenges, integrating carbon credits into compliance markets, and enhancing high-quality project delivery are crucial steps toward realizing this vision. 

Howden Pioneers First-of-Its-Kind Carbon Credit Insurance W&I

Jennifer L
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Howden Pioneers First-of-Its-Kind Carbon Credit Insurance W&I

Howden, a London-based insurance intermediary group, has launched the first carbon credits warranty and indemnity (W&I) insurance policy. This policy covers the sale of carbon credits for Mere Plantations’ reafforestation project in Ghana, which rehabilitates degraded forest lands. A leading managing general agent underwrites the policy.

This milestone is pivotal for the voluntary carbon market, as it significantly boosts trust in the quality of carbon credits. It can potentially attract more investors into the market. 

Insurance’s Role in Climate Finance

The insurance sector, one of the largest pools of non-governmental capital globally, is crucial for funding infrastructure projects. In 2017, insurance companies faced $140 billion in climate-related infrastructure losses. 

A climate policy expert, Dr. Leah Stokes projected that the US alone would incur $500 billion in climate disaster costs in 2021. Lloyds of London reported that sea level rise increased Superstorm Sandy’s New York insurance losses by 30%. 

Additionally, over $500 billion of US coastal property could be underwater by 2100. These risks call for sector reform, redirecting trillions towards climate impact reduction. Without a carbon reduction plan, assets may not qualify for insurance coverage.

Additionally, the global economic losses attributed to weather and climate change are exploding. As seen below, it reached almost $1.5 billion between 2010 and 2019 timeline.

climate change cost or losses

The financial world is now recognizing the value of insuring climate-related projects. In 2022, Howden launched the first-ever carbon credit insurance to boost confidence in carbon markets. 

The largest European broker believes the VCM has a vital role in the world’s transition to a low-carbon economy. It just announced its first carbon credits Warranty and Indemnity (W&I) insurance policy for the forestry project of Mere Plantations. The UK-based company manages a teak plantation with 3+ million trees in Ghana, West Africa. 

By employing insurance as a governance tool, the W&I policy enhances the credibility and value of carbon credits. Mere Plantations can now assure buyers that their credits meet stringent environmental, social, and financial standards, supported by an insurance policy that guarantees their authenticity.

Charlie Pool, Head of Carbon Insurance at Howden, emphasized that insurance guarantees the credibility of carbon credits, attracting higher values and encouraging further project development. He further remarked that:

“The carbon markets are the best tool we have for putting a price on emissions. Traditionally held back by poor governance, the voluntary market can now be improved using market-based mechanisms.”

Leveraging Underwriting Expertise for Green Projects

The policy also allows project developers to leverage the underwriting expertise of the M&A insurance market, ensuring confidence in their carbon credit projects’ methodology and implementation. Recognizing this added protection and the high quality of the credits, buyers are willing to pay a premium compared to other reafforestation projects. 

Uniserve, a UK-based logistics company, is the first to purchase these credits.

This development follows other Howden-led initiatives, including the first voluntary carbon credit insurance product in 2022. It has also an insurance product covering carbon dioxide leakage from commercial-scale carbon capture and storage facilities in January 2024.

Mark Hogg, CEO of Mere Plantations, highlighted their mission to make reestablishing degraded forest land a viable commercial enterprise without aid or government intervention. He noted that this insurance offer unlocks the carbon market’s potential, aiding their mission.

Gary Cobbing, Uniserve’s Group Chief Commercial and Operating Officer, expressed confidence in the partnership with Mere Plantations, saying:

“Mere Plantations shares Uniserve’s commitment to sustainability and integrity, making them an ideal source for our investment in carbon credits as part of our ongoing carbon reduction plan.”

The Growing Carbon Credit Insurance Market

Howden isn’t the only big player in the burgeoning carbon credit insurance space. 

A UK-based carbon credit insurance startup Kita Earth offers policies for carbon removal credits. And market experts foresee new players joining soon propelled by the projection that it will become a billion-dollar market. 

According to an industry report, the carbon credit insurance market could reach around $1 billion in annual Gross Written Premium (GWP) by 2030, potentially growing to $10-30 billion by 2050. 

carbon credit insurance market

However, this may underestimate the market’s potential as it focuses only on the VCM and excludes the compliance market. In 2023, global compliance carbon markets were valued at over $900 billion, influenced by policy changes and geopolitical factors. 

The VCM was valued at $2 billion in 2022, but Abatable estimated $10 billion worth of deals that year, suggesting investment was 5x the value of issued carbon credits. A Barclays Special Report predicts the VCM could grow to $250 billion by 2030, although estimates vary widely from $10 billion to $250 billion. 

The report suggests that insurance can offer four key benefits to carbon markets: 

  • Balancing risk and innovation,
  • Boosting confidence,
  • Assessing project risks, and
  • Encouraging risk-taking.

Indeed, the rapidly evolving carbon markets present a complex landscape with unique risks and significant challenges. Introducing insurance mechanisms like that of Howden’s W&I policy can effectively address these risks, enhance investor confidence, and stimulate increased investment. This will enable the markets to scale at the necessary rate to align with global carbon emission reduction targets.

Paladin Energy Offers C$1.14 B to Canada’s Fission Uranium. What does it mean for Uranium Mining?

Saptakee S
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Paladin Energy Offers C$1.14 B to Canada’s Fission Uranium. What does it mean for Uranium Mining?

Australian uranium mining giant Paladin Energy Ltd. has announced a C$1.14 billion ($833 million) all-stock offer to acquire Canadian mining firm Fission Uranium Corp. Using uranium in nuclear power significantly contributes to achieving climate goals by providing reliable energy that reduces the global carbon footprint. Thus, this deal can bring a paradigm shift in uranium mining.

Canada: A Beacon of Nuclear Excellence

The acquisition will grant Paladin control over a top-tier mining project, located in western Canada’s Athabasca Basin, situated in Saskatchewan. This region is rich in high-grade uranium. Fission’s asset is set to begin operations in 2029, with an expected annual production of 9.1 million pounds of uranium over 10 years.

According the Paladin’s press release, the Transaction is targeted to close in the September 2024 quarter on meeting all the conditions under the Agreement. Paladin CEO Ian Purdy, is highly optimistic, noting,

“The rationale is very compelling. We see this as a fantastic asset. Regardless of where the uranium cycle is or how the industry’s doing, the combination of these two companies just makes fundamental sense.”

He further added that Fission is a natural fit for Paladin’s portfolio with the shallow high-grade Patterson Lake South (PLS) project located in Canada’s Athabasca Basin. The addition of PLS creates a leading Canadian development hub alongside Paladin’s Michelin project, with exploration upside across all Canadian properties.

URANIUMsource: Bloomberg

Paladin and Fission Merger Advantages

The merger of Paladin and Fission will establish a leading clean energy company, providing these benefits to shareholders of both companies:

  • Enhanced project development pipeline.
  • Multi-asset production projected by 2029.
  • Diversified presence across top uranium mining regions in Canada, Namibia, and Australia.
  • Increased exposure to favorable long-term uranium market fundamentals.
  • Expanded scale and global profile for Paladin with a TSX listing.

Furthermore, Fission shareholders are poised to benefit directly from the JV. They will get an attractive 30% premium to Fission’s 20-Day Volume-weighted average price (VWAP) and the opportunity to participate in Paladin’s future expansion plans.

Uranium Powerhouse- Paladin’s Path to Global Leadership

Paladin, an ASX 200-listed premier uranium company based in Perth, Western Australia, holds a 75% stake in the Langer Heinrich Mine (LHM) in Namibia. This mine has generated over 43 Mlbs of U3O8 and is poised for a robust return to production. The initial volumes are scheduled to be processed on 30 March 2024. After the Transaction closes, Fission shareholders will hold a 24.0% stake in Paladin. It is expected to have a market value of around US$3.5 billion.

The company boasts a diversified, high-quality uranium exploration and development portfolio in top mining regions, including Canada and Australia.

Paladin is dedicated to reducing carbon emissions and adopting nuclear energy. It supports strong nuclear safeguards for the peaceful use of nuclear materials to generate zero-emissions electricity.

As the Langer Heinrich Mine (LHM) resumes production, it will measure, track and report its emissions. Paladin strongly emphasizes sustainability managing their Scope 1 and Scope 2 carbon emissions.

Notably, Paladin does not face the Scope 3 emissions challenge, as nuclear power plants produce no greenhouse gas emissions during operation. They also predict that LHM’s uranium production will prevent approximately 1.3 BT of CO2 emissions, compared to equivalent coal-fired electricity generation.

Ian Purdy has significantly highlighted that the price of uranium has spiked <3x in the past five years. It surged further following the Russia-Ukraine war, highlighting the urgent need for alternative reactor fuel sources. Thus, he anticipates more uranium deals ahead.

Fission’s Athabasca Basin, a Geographical Bounty

Fission is among several junior mining companies, such as NexGen Energy Ltd. and Denison Mines Corp., developing projects in the Athabasca Basin. This area has become a mining hotspot due to rising supply concerns and increasing global interest in nuclear power as a sustainable alternative to fossil.

Located in Saskatchewan’s Athabasca Basin, PLS is home to the Triple R deposit. It is recognized as the region’s largest high-grade uranium reserve close to the surface. We discovered from the company’s Feasibility Study that Triple R has the potential to become one of the lowest-cost uranium mines globally. It also unveils its unique strategic position along all-weather Highway 955. It traverses the UEX-AREVA Shea Creek deposits and leads to the historical Cluff Lake uranium mine. These advantages make it one of the world’s most productive uranium mining regions.

Fission UraniumSource: Paladin

Due to its shallow nature, the PLS project offers flexibility for development through underground mining, open pit mining, or a hybrid approach. Considering sustainability, , Fission has chosen to pursue an underground-only mining strategy after deep consultation with local communities. This approach allows the company to fully extract the deposit while benefiting from reduced CAPEX and a minimized environmental impact.

Fission CEO Ross McElroy said that while the region holds high concentrations of uranium. Only a few companies have the expertise to explore and develop such projects. Undoubtedly, Paladin is one of them.

He further commented,

“Having worked the majority of my geology career in the Athabasca Basin, I can tell you that it takes a great deal of expertise to properly explore and make discoveries like this one.”

Nvidia Is the World’s Most Valuable Company, Giving Nuclear Power A Big Lift

Jennifer L
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Nvidia Is the World’s Most Valuable Company, Giving Nuclear Power A Big Lift

Nvidia, a leading chipmaker, has seen an extraordinary rise in market value, surpassing Microsoft and Apple, driven by its dominance in AI and accelerated computing. As Nvidia’s stock soars, the energy demands of AI have brought one clean energy into focus as a critical solution for sustainable growth: nuclear power.

Nvidia’s Meteoric Rise and Net Zero Game

In May last year, Nvidia, valued at about $750 billion, announced its first fiscal quarter results for 2024. Revenue grew by 19%, and net income rose by 26%, showing positive but not exceptional performance. What stirred excitement was Nvidia’s forecast for the next quarter, predicting a 65% revenue increase. 

CEO Jensen Huang highlighted the company’s leadership in accelerated computing and generative AI, predicting a significant shift in global data center infrastructure towards these technologies. Investors interpreted this as Nvidia seizing a trillion-dollar opportunity, driving its stock price to record highs.

The following day, Nvidia’s market cap surged by nearly $200 billion, marking the start of an unprecedented rally. By June 2023, Nvidia’s market cap surpassed $1 trillion, reaching $2 trillion on March 1, 2024, and surpassing $3 trillion just over three months later. Recently, after a stock split, Nvidia’s market cap at $3.34 trillion, soared past Microsoft and Apple, making it the world’s most valuable company.

Nvidia most valuable company

Nvidia’s standout metrics include its high gross margin of 78.4% in the latest quarter, compared to 46.6% for Apple and 70.1% for Microsoft. Moreover, Nvidia’s revenue growth over the past year was remarkable at 208%, contrasting with Apple’s 1% decline and Microsoft’s 14% growth, according to Statista.

While investors enjoyed this quick ascent, questions remain about whether Nvidia’s current high valuation would be long-term. More so, some environmental critics are questioning the company’s climate commitments and net zero targets. 

In Nvidia’s FY2023 Corporate Responsibility Report, the company outlines its key sustainability goals and metrics:

  • By the end of fiscal year 2025, and annually thereafter, Nvidia aims to achieve and maintain 100% renewable electricity for its offices and data centers under its operational control.
  • Nvidia’s Blackwell GPUs, introduced in March 2024, are reported to be generally 25x more energy-efficient than traditional CPUs for certain AI and high-performance computing (HPC) workloads.
  • Nvidia technologies currently power 23 of the top 30 systems on the latest Green500 list.

Apart from these, however, there’s no clear net zero strategy outlined in the chipmaker’s report, only Nvidia’s greenhouse gas emissions.

The Environmental Footprint of AI and Chips

Some believe Nvidia is poised at the forefront of the AI boom. And as AI capabilities improve and expand, so does its need for energy to fuel its exponential rise.

Notably, the environmental impact of using chips is well-documented. Researchers from Lancaster University estimate that information and communications technologies, including data centers, contribute between 1.8% and 2.8% of global greenhouse gas emissions. 

The International Energy Agency predicts that the sector’s electricity consumption could double from 2022 to 2026, reaching 4% of global demand, equivalent to Japan’s current energy use. This rising demand has slowed the retirement of coal-fired power plants, according to Bloomberg.

Less understood is how to mitigate the energy and environmental impact of manufacturing advanced chips used in data centers and large AI models.

A chip’s carbon footprint spans its entire production chain, from mining essential metals to using 1000-degree Celsius ovens during fabrication, and its energy use throughout its lifespan.

chip carbon emission sources semiconductor environmental footprint

Advanced chips, which feature wires as thin as 10 nanometers (one-thousandth the diameter of a human hair), require high-energy photons with short wavelengths for fabrication. State-of-the-art lithography processes contribute significantly to the carbon footprint of modern computing.

In an analysis by Gage Hills, Assistant Professor of Electrical Engineering at Harvard John A. Paulson School of Engineering and Applied Sciences, the energy needed to manufacture a computer chip can surpass the amount it consumes over its entire 10-year lifespan. 

Great Power Comes Great Energy Demand

The excitement around AI has further intensified, alongside projections that global spending on AI will exceed $300 billion by 2027. This surge has reignited interest in renewable energy sources to address the soaring demand for power while keeping environmental impact in mind.

More remarkably, it thrust nuclear power into the spotlight as a viable, clean energy source capable of meeting the immense energy demands of making chips and AI infrastructure. The U.S. nuclear fleet would play a crucial role in meeting these rising power needs by 2030. 

  • In Texas alone, data centers have requested the equivalent energy output of 41 nuclear power plants to sustain their operations.

Silicon Valley giants such as Microsoft’s Bill Gates, Amazon’s Jeff Bezos, and numerous venture capital firms have invested in nuclear startups to support their data center operations. OpenAI’s CEO, Sam Altman, underscored the urgency, describing a “desperate need for as much energy as we can manufacture.”

Investors eyeing opportunities in AI typically focus on ETFs containing semiconductor, cloud computing, and cybersecurity firms. However, they also have huge interest in utilities operating nuclear power plants and shares linked to nuclear power generation and its fuel uranium.   

Nuclear power’s appeal lies in its ability to provide compact, reliable, weather-independent electricity through fission, making it ideal for powering AI data centers. This demand is boosting uranium prices worldwide as supply struggles to keep pace.

These developments promise to redefine nuclear energy’s role in the global energy landscape, potentially aiding in significant decarbonization efforts.

Nvidia becoming the world’s most valuable company is further lifting nuclear power up to match the energy demand of the chipmaking industry. Yet, the world is also waiting when, or if, Nvidia will share its net zero strategy.

Flying Green: Boeing’s Plan to Propel Aviation Towards Net Zero

Saptakee S
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Flying Green: Boeing’s Plan to Propel Aviation Towards Net Zero

Aviation is one of the most carbon-intensive sectors and is tough to decarbonize. It contributes approximately 2-3% of global CO2 emissions. With the sector projected to grow, addressing its environmental impact is more crucial than ever. Airlines and manufacturers increasingly invest in sustainable aviation fuels, electric and hybrid aircraft technology, and improved operational efficiencies. In this mission, Boeing has immensely supported commercial aviation’s path toward net zero carbon emissions. Notably, initiatives like Boeing’s “Cascade” underscore a collective commitment to a greener, more sustainable future for air travel.

The Latest Advances in Aviation Decarbonization

Global aviation, including passenger and freight flights, emits around 1BT of CO2 annually.

The aviation sector faces significant challenges in reducing emissions due to specific parameters like the weight and size of the aircraft, long innovation cycles, and safety issues. Key technologies like Sustainable Aviation Fuels (SAFs) remain costly and are not yet widely adopted. According to last year’s McKinsey analysis, many stakeholders across the aviation value chain have committed to sustainability goals, including emission reductions, SAF adoption targets, and membership in coalitions. Furthermore, The Science Based Targets initiative (SBTi) has emerged as a leading standard, with 25 airlines and aerospace companies setting science-based targets as of April 2023.

Image: CO2 emissions in aviation in the Net Zero Scenario, 2000-2030

Aviation CO2 emissionssource: IEA

Boeing Takes on Climate Change Challenges

Last year Boeing disclosed its Scope 3 emissions, which arise when customers use their products. This move is in response to investor and climate activist demands for transparency regarding companies’ efforts to minimize their environmental footprint.

Remarkably for the third time in 2022, Boeing achieved net-zero carbon emissions at manufacturing sites and in business travel. David L. Calhoun, CEO of Boeing envisions that in the era of more sustainable aerospace, there is anticipation to achieve it together.

The key highlights from the 2023 Sustainability report are: The strategy for Scope 1 and Scope 2 emissions supports a 1.5 degrees Celsius global warming scenario and global climate goals. Subsequently, aligning with the goals of the Paris Agreement.

Detailed Picture of Boeing’s operational target progress:

Boeingsource: Boeing

Harnessing Sustainable Aviation Fuel

The International Air Transport Association (IATA) projects that Sustainable Aviation Fuel (SAF) could provide approximately 65% of the emissions reduction necessary for aviation to achieve net zero CO2 emissions by 2050.

What is Sustainable Aviation Fuel?

Sustainable Aviation Fuel (SAF) is a liquid fuel used in commercial aviation that reduces CO2 emissions by up to 80%. It is derived from various sources including waste oil, fats, green and municipal waste, and non-food crops. SAF can also be produced synthetically by capturing carbon directly from the air. It uses feedstocks that do not compete with food crops, or water supplies, or contribute to forest degradation.

Unlike fossil fuels that release previously stored carbon into the atmosphere, SAF recycles CO2 absorbed by biomass during its lifecycle, reducing overall emissions.

Renewable energy, including SAF, green hydrogen, and batteries, plays a crucial role in reducing carbon emissions throughout Boeing’s operations and products. Boeing believes SAF is vital for decarbonizing aviation and advocates for a strategy that integrates multiple renewable energy solutions. This approach includes advancing the viability and safe implementation of various renewable energy carriers on aircraft.

  • It is collaborating with suppliers to ensure all commercial airplanes delivered by 2030 are compatible with 100% sustainable aviation fuel (SAF).
  • In 2022, the airliner purchased 5.6 million gallons (21.2 million liters) of blended SAF to support commercial operations.

Strategic Partnerships

Boeing and NASA continued their partnership to test SAF emissions, conducting tests on the 2022 Boeing ecoDemonstrator, which included a 777-200ER with Rolls-Royce Trent 800 engines and a 787-10 with GEnx-1B engines.

It launched the Cascade Climate Impact Model (Cascade) two years back. This web application utilizes global digital technical data to illustrate the environmental impact of different sustainable aviation options. It also offers stakeholders a data-driven tool to navigate decisions towards achieving the industry’s net-zero 2050 goal.

Ted Colbert, president and CEO of Boeing Defense, Space & Security

“We believe that operational effectiveness and sustainability are two sides of the same coin. A more sustainable, lower-cost, energy-efficient defense enterprise is more operationally effective. That’s why we have a history of partnering with our customers to pioneer the use of sustainable aviation fuels and are leveraging digital design and production to reduce our carbon footprint throughout the life cycle of our products.”

The air company aims to achieve 100% renewable energy in operations by 2030, reaching 35% renewable electricity in 2022 through increased usage and the purchase of renewable energy credits.

Is Boeing Facing the Turbulence Right Now?

However, lately, the top-notch airliner has been making news for the infamous, Boeing Scandal. The families of victims in two Boeing 737 Max crashes accused the company of the “deadliest corporate crime in US history”. They have urged the Justice Department to impose the maximum $24 billion fine in a potential criminal trial. As per the latest reports, Prosecutors have not yet finalized the proceedings. The Justice Department may require the aircraft maker to install an independent federal monitor for safety and quality oversight.

2024 is The Golden Era For Europe’s Renewable Energy: Here’s Why

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2024 is The Golden Era For Europe’s Renewable Energy: Here’s Why

In 2024, Europe’s market for renewable power purchase agreements (PPAs) is poised for substantial growth. Moreover, major mergers and acquisitions (M&A) also happened in the region, targeting energy companies. These key developments indicate renewed investor interest in renewable energy after a slow first quarter. 

The Surge of High-Value European Green Energy Deals 

The year 2023 was the busiest and most dynamic period in Europe’s renewable energy power purchase agreement history. Yet, the market is now entering what experts dubbed its ‘Golden Era’.

Corporate buyers secured 21 TWh/year of green electricity from 10 GW of new projects in the first five months of 2024, maintaining a pace similar to 2023, according to S&P Global Commodity Insights. 

The number of deals increased to 145, compared to 94 in the same period of 2023, indicating more players entering the market. The growth was primarily driven by 10.2 TWh/year of wind PPAs in northern Europe and 7.5 TWh/year of solar PPAs, mainly in Spain.

For the same period, there were three major European M&As targeting energy companies. The largest deal involved US-based Energy Capital Partners acquiring British renewable energy firm Atlantica Sustainable Infrastructure for $2.56 billion in cash.

Energy Capital will purchase all Atlantica shares with Atlantica’s largest shareholder, Algonquin Power & Utilities, supporting the deal. The transaction is expected to close by early 2025, after which Atlantica will become privately held, delisting from public markets. 

The second-largest deal saw Canadian investor Brookfield Asset Management and co-investor Temasek proposing to acquire a majority stake in Neoen SA, an independent renewable energy producer. Neoen has about 8 GW in operation and under construction, plus 20 GW in development. 

After Brookfield’s Neoen bid announcement, JP Morgan analysts noted that investors appeared to be willing again to invest their money in green energy development pipelines. 

These high-value deals highlight a robust interest in renewable energy, underscoring the sector’s importance not just in Europe but in global energy strategies and investor portfolios.

Market Dynamics, Price Trends, and Regional Challenges

However, deal prices have declined due to lower electricity spot and forward prices. Iberian capture prices reached record lows this spring, influenced by bearish fundamentals and increasing solar capacity.

In Germany, May’s solar capture price dropped to its lowest since summer 2020, although forward contracts recovered, with the benchmark German year-ahead power contract rising almost 50% from its February lows.

forecast solar capture prices Germany
Source: Value

Spain and Italy face unique challenges. In Spain, despite strong corporate interest, volatile market conditions and high interest rates hindered PPA contracting. 

Insufficient grid capacity also posed challenges, a problem shared with Italy and Germany. In Italy, central permitting delays have slowed down project authorization, and restrictive auction systems further complicate the market.

Germany is expected to compete closely with Spain for PPA leadership in Europe. In the first five months of 2024, Germany signed 21 deals for 2 GW of capacity, focusing on utility-scale solar and offshore wind projects. 

Despite regulatory uncertainties, Germany’s large industrial base and tech sector drive PPA demand. New corporate sustainable reporting rules and mandatory datacenter requirements are additional demand drivers.

In the UK, the government-run contract for difference (CFD) auctions are highly attractive, potentially crowding out private sector deals. However, the ongoing Review of Electricity Market Arrangements (REMA) adds uncertainty, causing some market participants to pause activities.

Sectoral Shifts and New Opportunities

While Brookfield has the financial capacity for large-scale deals, few investors can match such substantial investments. Initially, oil majors were expected to be significant players in the renewable energy sector. 

However, the focus on energy security since Russia’s invasion of Ukraine has shifted their priorities. Recently, Norwegian state-owned power producer Statkraft AS completed a €1.8 billion acquisition of Spanish group Enerfín SA.

Additionally, several privately owned developers are anticipated to enter the market this year.

Market analysts project that this trend will continue as the cost of deploying renewables is falling significantly. As seen below, RMI data shows that costs drop by around 20% for every doubling of deployment.

renewable technology costs

Though tech companies remain the leading buyers of PPAs, the consumer goods, industrial, chemicals, and utility sectors are also emerging as significant offtakers. The rise of artificial intelligence computing power creates new opportunities, with countries like the Nordics and Iberia seeing increased activity. 

Spain, in particular, is becoming a key hub for data centers due to favorable conditions like low prices, low taxes, and renewables access.

The reform of the EU’s electricity market aims to broaden access to PPAs, with government support crucial to make these PPAs financeable.

Overall, 2024 is shaping up to be a pivotal year for Europe’s green power deals, driven by increased corporate commitment to renewable energy, the same trend happening in the U.S., despite facing significant regional and market-specific challenges. 

Audi and Alfa Romeo Take The Ride to Electrification

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Audi and Alfa Romeo Take The Ride to Electrification

Amid the rapid adoption of electrification, electric cars are reshaping the automotive industry, promising enhanced performance, efficiency, and a cleaner future. This momentum is seized by yet other big players in the vehicle industry, Audi and Alfa Romeo. Both have revealed their innovative electric car models: the 2025 Audi E-Tron GT and the Alfa Romeo Milano. 

Driving the Electrification Revolution

The electrification movement, driven by advancements in battery technology and supportive policies, underscores a pivotal shift toward sustainable transportation solutions.

According to the International Energy Agency (IEA), global electric car sales surged to nearly 14 million vehicles, with 95% of these sales occurring in China, Europe, and the United States in 2023. This marked a significant increase from previous years, totaling 3.5 million more electric cars sold compared to 2022, representing a remarkable 35% year-on-year growth. 

global EV sales 2016-2023

The total number of electric cars on the roads globally reached 40 million by the end of 2023, closely aligning with forecasts from the Global EV Outlook 2023.

The rapid adoption of electric vehicles (EVs) is underscored by the fact that in 2023, there were over 250,000 new electric car registrations per week, surpassing the entire annual total from a decade earlier in 2013. 

Furthermore, electric cars accounted for about 18% of all cars sold globally in 2023, up from 14% in 2022 and a mere 2% in 2018. This highlights the robust growth and maturation of the electric vehicle market.

This trend underscores the increasing preference for EVs, driven by battery technology advancements, expanding charging infrastructure, and supportive policies. All these aimed at reducing emissions and promoting sustainable transportation solutions.

In another report by RMI, transportation will keep pace with other sectors in electrification by 2050.

electrification in transport

Riding along this electrification trend are Audi and Alfa Romeo, which both revealed their latest EV models. 

Meet The Most Powerful Audi Ever

The 2025 Audi E-Tron GT has received a significant update following its Porsche Taycan counterpart earlier this year. Available in three variants, this electric sedan boasts enhanced power, charging speeds, and range. 

The flagship RS E-Tron GT Performance emerges as Audi’s most powerful production vehicle ever, delivering 912 horsepower and accelerating from 0 to 62 mph in just 2.5 seconds, slightly slower than the Taycan Turbo GT.

All models feature dual-motor all-wheel drive and benefit from an upgraded battery pack, now with 97.0 kWh capacity (up from 84.0 kWh), supporting a 320 kW maximum charging power. Charging from 10% to 80% takes 18 minutes under optimal conditions, providing 174 miles of range in just 10 minutes.

Introducing Alfa Romeo’s First Electric Car 

The Alfa Romeo Milano, a new small SUV under the Stellantis group, marks Alfa Romeo’s debut in electric vehicles (BEV) alongside a hybrid version. It aims to enhance sales within the expansive Stellantis portfolio, which includes Fiat, Jeep, Peugeot, and Vauxhall. 

The Milano showcases Italian design flair with a compact silhouette and distinctive features such as the ‘scudetto’ grille and advanced LED headlights. It stands 4.1m long, 1.5m tall, with short overhangs and a truncated rear reminiscent of the Sixties Giulia TZ. 

Built on the eCMP platform, it offers up to 238bhp from its electric motor and boasts a range of about 250 miles.

Alfa Romeo’s transition to electric power is crucial in reducing carbon emissions from vehicles, aligning with global efforts to mitigate environmental impact and promote sustainable transportation solutions.

How Clean is An EV vs. A Fossil Fuel Car?

A research done by the European Energy Agency suggested that EVs emit up to 30% less carbon than gas- or diesel-powered cars. Moreover, electricity sourced from clean energy or low-carbon sources further lowers the environmental impact of EVs.

Additionally, a Reuters analysis revealed that in worst case scenario (EV is charged from a coal-fired power source), an EV would release 4.1 million grams of CO2 a year. In contrast, a comparable gas car can generate over 4.6 million grams.

carbon emission of electric vehicle vs gas car

Accelerating EV Adoption in the United States

The United States saw robust growth in new electric car registrations last year, totaling 1.4 million vehicles—an increase of over 40% compared to 2022, per IEA data.

Although the year-over-year growth rate was slightly lower than in the preceding years, the demand for EVs remained strong. This is supported by revised qualifications for the Clean Vehicle Tax Credit and price reductions across popular EV models.

The updated criteria under the Inflation Reduction Act (IRA) played a pivotal role in boosting sales. Notably, the Tesla Model Y’s sales surged by 50% in 2023 after it became eligible for the full $7,500 tax credit. 

Despite initial concerns about potential bottlenecks due to stricter domestic content requirements for EV and battery manufacturing, vehicles like the Ford F-150 Lightning were able to navigate these challenges.

Looking ahead, the number of new EV models reaching the market is poised to accelerate. BloombergNEF projects that EVs could reach 45% of global passenger-vehicle sales by 2030 and 73% by 2040. 

global long-term EV sales by market 2040

These trends speak of the continued expansion of electric vehicle adoption in the US and beyond, underscoring the resilience of the EV market despite evolving regulatory landscapes and changing incentives. As the window for reaching net zero emissions in transportation is closing quickly, EVs remain the most cost-effective route to decarbonize the sector.

Is the EV Market’s Momentum Slowing?

Jennifer L
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Is the EV Market’s Momentum Slowing?

Bloomberg Outlook 2024

According to the Bloomberg EV Outlook Report, the global electric vehicle (EV) market in 2024 shows varied progress across different regions and segments. Most notably, while overall EV sales are increasing, some markets are slowing, and many automakers have delayed their EV targets. 

We crunched the report and have the following key takeaways, crucial for everyone interested in the industry to know.

Which Regions Are Charging Ahead in EV Sales?

The EV sales growth slowdown varies globally. China, India, and France continue to see healthy growth, while Germany, Italy, and the US face challenges. Meanwhile, Japan’s market is hampered by a lack of EV commitment from major carmakers and no new mini-car models. 

EV sales YoY Q1 2024 Bloomberg outlook

Despite the slowdown, global growth in 2024 aligns with BNEF’s forecasts. Some automakers have reduced their electrification targets, citing high production costs, while others, like Kia and Volvo, show strong results.

  • Kia aims for 1.6 million EV sales by 2030 and plans to launch an affordable EV3 SUV. Remarkably, Volvo’s EV sales surged 53% in April 2024, driven by the EX30 model.

BNEF projects that global passenger EV sales will grow, though at a slower pace, rising from 13.9 million in 2023 to over 30 million by 2027. The annual growth rate will average 21%, down from 61% between 2020 and 2023. 

By 2027, EVs will comprise 33% of global new passenger vehicle sales, with China and Europe leading at 60% and 41%, respectively. 

global passenger EV sales by market 2027

The Nordics will reach 90%, while Germany, the UK, and France exceed 40%. The US will see 29% EV sales, slowed by election-related uncertainties. Japan lags behind, but emerging economies like Brazil and India will experience rapid growth. 

Overall, the global EV fleet will expand to over 132 million by 2027, up from 41 million in 2023.

  • The long-term market outlook for electric vehicles is positive despite near-term challenges. 

Economic improvements are expected to drive continued growth, with EVs reaching 45% of global passenger vehicle sales by 2030 and 73% by 2040. However, Southeast Asia, India, and Brazil will lag behind the global average and require stronger regulatory support.

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Decarbonizing Commercial Vehicles

When it comes to decarbonizing commercial vehicles, including vans, trucks, and buses, electrification is also accelerating. 

Electric light-duty delivery vans and trucks are quickly gaining market share in China, South Korea, and parts of Europe, while the US still lags. As seen below, the global e-van market will near one-third of sales by 2030, reaching two-thirds by 2040. 

electric and fuel cell commercial vehicles

Electric heavy trucks will become economically viable for most uses by 2030, with initial adoption in urban areas and later expansion to long-haul routes. 

On the other hand, fuel cell trucks will remain viable for some applications, though their future is less certain. Zero-emission trucks will make up 18% of global sales by 2030 and 43% by 2040.

Who Will Drive the Future of Electric Trucks?

New environmental policies in Europe and the US will drive the adoption of electric and fuel-cell trucks. EU CO2 targets suggest high electrification rates by 2030. For instance, municipal buses are rapidly electrifying, expected to exceed 60% of sales by 2030 and 83% by 2040. 

However, global road transport is not yet on a net zero trajectory, and protectionist policies could hinder progress. To achieve zero emissions by 2050, combustion vehicle sales must end by around 2038, with leading markets phasing out earlier, per BNEF analysis. 

The Nordic countries are the only ones projected to fully phase out combustion vehicles before 2038 in the Economic Transition Scenario (ETS). Therefore, governments need to balance industrial strategies with maintaining competition and affordability in the EV market. Stronger regulatory pushes are necessary to bridge the gap between the Economic Transition Scenario and the Net Zero Scenario.

road transport toward net zero scenario

  • Significant spending is required for both scenarios. 

The cumulative value of EV sales across all segments will reach $9 trillion by 2030 and $63 trillion by 2050 in the Economic Transition Scenario. In the Net Zero Scenario, this value jumps to over $98 trillion by 2050. 

Governments are fiercely competing to develop local supply chains, with EVs and batteries remaining central to industrial policies for decades.

How Lithium Batteries Are Revolutionizing the EV Market

Lithium-iron-phosphate (LFP) batteries are dominating the EV market, reducing the need for metals like nickel and manganese. Competitive pricing is driving improvements in LFP technology, including super-fast charging, cold temperature performance, and higher energy densities. 

Lithium iron phosphate taking over the EV market

LFP is projected to capture over 50% of the global passenger EV market within two years, particularly in China, where many LFP cell manufacturers are based. This shift results in lower-than-expected consumption of nickel and manganese, with 2025 estimates for nickel at 517,000 metric tons and manganese at 131,000 metric tons.

lithium ion batteries under Net Zero scenario

Plug-in hybrids (PHEVs) are experiencing a resurgence, driven mainly by China, which became the largest PHEV market in 2022. The average electric range of PHEVs reached 80 km in 2023, with some models in China exceeding 100 km. 

Chinese PHEV battery packs are nearly twice the size of those in the US and Europe, often designed to meet fuel economy regulations. While PHEVs are seen as a bridge to a zero-emission future, their effectiveness is questionable. If they replace BEVs and aren’t fully utilized in electric mode, they could increase oil demand, undermining their environmental benefits.

PHEV is back

Charging into the Future: What Does a Fully Electric Fleet Mean?

A fully electric vehicle global fleet could consume twice the electricity the US did in 2023, per BNEF market outlook. By 2050, in the Net Zero Scenario, an all-electric vehicle fleet will require about 8,313 TWh of electricity, double the US’s 2023 consumption. 

Despite the increase, EVs can support energy system electrification through smart charging and flexible pricing. The EV charging industry must rapidly mature, requiring $1.6 to $2.5 trillion in infrastructure, installation, and maintenance investment by 2050. 

The adoption of EVs and electrification of commercial vehicles are on the rise, driven by new policies and technological advancements in battery technology. However, significant investments in infrastructure and regulatory support are crucial to sustain this momentum and achieve long-term environmental goals.

Microsoft Strikes 2 Record-Breaking Carbon Credit Deals

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Microsoft Strikes 2 Record-Breaking Carbon Credit Deals

Microsoft has entered into a groundbreaking agreement with BTG Pactual Timberland Investment Group (TIG), committing to provide 8 million carbon removal credits, marking the largest carbon dioxide removal transaction on record. 

In a separate deal, Microsoft also agreed to buy 40,000 agricultural soil carbon credits from Indigo Ag. It’s also the largest-ever purchase of an individual buyer from the ag company.

A Landmark Carbon Offset Agreement

Carbon offsets allow companies to compensate for some of their greenhouse gas emissions by funding projects that reduce emissions elsewhere. Each carbon offset credit corresponds to reducing one tonne of CO2 emissions and can be applied toward reaching corporate climate targets.

Last year, companies retired or used almost 180 million metric tonnes of CO2 equivalent in their climate commitments. 

voluntary carbon credit retired and issued 2023

The agreement between TIG and Microsoft involves the provision of up to 8 million nature-based carbon removal credits by 2043. Data from MSCI Carbon Markets confirms this as the largest transaction of its kind. 

The credits are part of TIG’s extensive reforestation and restoration strategy in Latin America. It involves a $1 billion initiative designed to conserve and restore deforested areas, including the crucial Cerrado biome in Brazil. 

The strategy aims to restore 135,000 hectares of natural forests and develop sustainable commercial tree farms on an additional 135,000 hectares.

TIG has already made significant progress, investing in 37,000 hectares, planting over 7 million seedlings, and beginning the restoration of 2,600 hectares of natural forest. 

Gerrity Lansing, Head of TIG, highlighted the importance of this groundbreaking carbon offset deal, saying:

“Institutional investors have a critical role to play in delivering nature-based solutions at a scale that matters for climate and biodiversity. The scale of the native forest restoration and sustainable timber production that TIG seeks to deliver with our reforestation strategy is what enables a carbon removal credit transaction of this size.”


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Microsoft’s Unwavering Support for Carbon Removal

Dr. M. Sanjayan, Conservation International CEO, emphasized that Microsoft’s commitment demonstrates the possibility of balancing ecological restoration with economic productivity. 

The transaction aligns with Microsoft’s ambitious goal to be carbon-negative by 2030 and to remove all historical emissions by 2050. The tech giant aims to eliminate its Scope 1 and 2 emissions through various means, including:

  • Increasing energy efficiency, 
  • Decarbonizing its operations, and 
  • Achieving 100% renewable energy by 2025. 

The company achieved a 6% reduction in its Scope 1 and 2 emissions from the 2020 baseline year. 

Microsoft 2030 carbon negative goal
Source: Microsoft website

However, the Scope 3 (value chain emissions) sources account for over 96% of Microsoft’s total emissions. The majority of these emissions come from purchased goods and services, capital goods, downstream, and the use of sold products. Reducing value chain emissions involves investing in large-scale, high-quality carbon removal projects. 

Brian Marrs, Senior Director for Energy & Carbon Removal at Microsoft, noted that achieving these goals requires innovative projects that can scale carbon removal swiftly and sustainably. He highlighted that this nature-based project exemplifies how such efforts can deliver significant carbon removal while restoring vital ecosystems.

In a related effort, Microsoft recently purchased 970,000 forest carbon removal credits from Anew Climate, further demonstrating its commitment to large-scale carbon removal projects.

The carbon credits under Anew agreement will come from improved forest management (IFM) projects across forestlands owned by Aurora Sustainable Lands, Acadian Timber Corp., and Baskahegan Company. IFM projects offer benefits such as avoiding net carbon emissions and removing carbon from the atmosphere. 

The Anew projects will create registry-recognized carbon removal credits generated from tree growth within its forestry portfolio.

Additionally, Microsoft, alongside Google, Meta, and Salesforce, has launched a 20-million-ton advance market commitment (AMC) collaboration to support the development and expansion of the nature-based carbon removal market.

Advancing Soil Carbon Removals

Most recently, Microsoft has agreed to purchase 40,000 agricultural soil-based carbon credits from Indigo Ag’s third carbon crop. This transaction marks the largest number of credits ever delivered by Indigo Ag to a single buyer.

These soil-based credits are verified and issued by the Soil Enrichment Protocol of the Climate Action Reserve, one of the world’s most trusted independent carbon registries.

Microsoft has chosen Indigo Ag’s carbon program to introduce soil carbon removals into its climate action portfolio. This agreement highlights the demand for robust, science-backed agriculture soil-based credits and their critical role in climate action, reflecting the increasing maturity of the voluntary carbon market.

Indigo Ag’s Carbon program is supported by the company’s scientifically peer-reviewed measurement, reporting, and verification (MRV) capabilities, ensuring the robustness, integrity, and durability of credits. This enables growers to realize the value of adopting and sustaining new practices that generate these credits.

how Indigo ag carbon farming program works
Indigo Ag Carbon Program

Beyond its carbon program, Indigo Ag deploys its MRV capabilities to help companies in the agri-food value chain reduce their Scope 3 emissions. It can also help them produce low carbon intensity crop feedstocks for biofuels.

To date, Indigo’s Sustainability Solutions have reduced and removed over 340,000 tons of GHG emissions and saved over 19 billion gallons of water used in agriculture.

Dean Banks, CEO of Indigo Ag, remarked:

“Today’s announcement is a major milestone for Indigo’s Carbon program and our increasing range of ag-based sustainability solutions. Microsoft is a leader in corporate climate action, a highly influential player in carbon removals and shares our commitment to support the transition to a more resilient and sustainable agriculture system.”

The landmark transactions between Microsoft and TIG as well as Indigo Ag underscore the potential for significant climate action through nature-based solutions. By advancing carbon removal at scale, Microsoft is paving the way for a more sustainable and low-carbon future.

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