Welcome to Greenify! A weekly newsletter providing you with 3 of the most important news and some crucial deep dives on matters such as #energytransition #decarbonisation #climatetech! We believe that a clear understanding of these topics is essential to thrive in the world of… TODAY!
Please help us improve by leaving a comment or feedback, and if you like what you are learning… share it with your network 😁!
📌 Fact of the week
Greece has passed its first climate law, vowing to cut dependence on fossil fuels 👍
Hottest news of the week…
Regulation 🗃 – Australia joins climate debate… better late than never!
What happened: On Saturday, Australians elected a new Prime Minister who is actually concerned about climate change! Anthony Albanese, leader of the labour party, will replace climate change sceptical Scott Morrison, and could potentially arrange a coalition with the Green party, which received 12% of votes. The labour party goals are to become a global leader in renewable generation, reduce emissions by 43% in 2030 and reach net zero by 2050. At the same time, the “greens” want commitment to no new coal mining projects and carbon emissions reduced by 60% in 2030… Whatever coalition will be formed, the good news is that Australia will finally join the climate debate from a political standpoint! 🌏
Zoom out: Previous irresponsible policies made Australia a climate laggard among developed nations and the 3rd largest exporter of fossil fuels. Things changed last Saturday, as the population voted for a radical change after a series of climate change disasters, such as the 2019 bushfires, ongoing floods and the gradual loss of the Great Barrier Reef. The issue is that a large share of the Australian economy depends on fossil fuels and therefore the phase out from fossil fuels will most likely be VERY gradual… In fact, despite being climate concerned, Mr Albanese purposely avoided promising the dismiss of fossil fuels projects throughout its green campaign, and 114 coal and gas projects are currently awaiting approval! 🤔
Business 💰 - The US battery sector is exploding!
What Happened: It has been an intense week for the battery sector in the US, as last Friday Hyundai unveiled a $5.5B plan to build car batteries in Georgia, while on Wednesday Stellantis and Samsung announced investments for $2.5B in a battery plant in Indiana. These investments do not come alone, as on Tuesday sector giants such as GM, Ford, Tesla, Panasonic, as well as various lithium miners joined the Coalition for American Battery Independence (CABI). The coalition will be lobbying to receive further support throughout the whole battery value chain, from mining rare earths to assembling battery packs.🔋
Zoom out: Currently the battery sector is largely dominated by one single country: China, which produces 75%+ of the world’s batteries. However, under the Biden administration, the U.S. is trying to catch up through grants, loans and favourable policies. Companies are responding well to the incentives, as also other giants such as GM and Ford announced investments of respectively $7B and $11B to produce and assembly batteries in US states. It will be difficult to catch up with China on the production of batteries, but as we currently experience the importance of localizing supply chains, the US’ plan to have an integrated EVs industry seems wise!👌
Innovation 💡 - Panama, have a SAFe flight!
What happened: A team of companies led by SGP BioEnergy has partnered with Panama’s government in the quest to build a biorefinery to produce sustainable aviation fuel (SAF). In a nutshell, a biorefinery is an industrial facility that integrates biomass conversion processes and equipment to produce fuels. The consortium expects the biorefinery capacity to be 180,000 barrels of biofuel per day and 2.6 billion gallons per year, once fully operational.💪
Zoom Out: Flying is a toll on the environment, but reducing emissions is a tough challenge for the industry. In an ideal world, planes should fly on green hydrogen: AirBus pledged to bring a hydrogen plane to market by 2035... On top of that, making an airplane suitable for hydrogen means changing completely its design, and airplane fleet is not something you change every year! As a result, SAFs are considered vital in the transition towards hydrogen powered planes. One hurdle is regulation, which is not tough enough, yet, in mandating SAFs in the fuel mix… In any case, have a SAFe flight!✈️
Deep dives of the week…
Graph of the week: Which country emits the most?🤔
Speaking about Australia we touched on how the country is one of the largest emitter per capita… wonder which other countries rank at the top? Here is the list of the worst ones, where fossil fuels exporting countries are dominating! 😐
Source: World Bank
Company of the week: Kelp + Wood + Limestone = The Perfect Cocktail 🍸
Yet again another carbon removal company! If you ever happen to see a buoy made of wood, limestone and kelp floating in the ocean, then remember you read the story here first. Running Tide uses kelp microforests, which absorb CO2, and then sinks these into the ocean. However, there are other components to the buoy: waste wood represents forest carbon that would be otherwise incinerated and limestone helps reverse ocean acidification. After having built the buoy (see picture below), it is placed in the ocean and eventually it is meant to break down, with the limestone dissolving and the wood and kelp drifting to the bottom of the seafloor. Some questions remain on the actual amount of carbon captured and stored by kelps over time, but we thought Running Tide deserved a mention regardless.
Source: The Atlantic
Analysis of the week: ESG, time for critiques!🙄
Last week we talked about the different forms of ESG investing, this week we will be harsh on the fundamentals of these investments: the ESG data itself! We want to give you a brief outline of some of the most widely recognized methodologic issues of measuring ESG:
Self-Reporting: Disclosed data is usually self-reported rather than measured or verified by externals, with only 50% of disclosing firms providing 3rd party verification.
Estimated data: Very little ESG data comes from actual measurement, the majority of ESG metrics are estimated using set of assumptions of varying validity, and whether data is measured or estimated is rarely flagged in reports.
Small Coverage: Nearly 17,000 firms worth US$21 trillion, including Chevron, Exxon Mobil, Glencore and Berkshire Hathaway, are still failing to disclose to CDP, the largest non-profit organisation running the global disclosure system.
Gap filling: Data is often missing, and ESG providers may use proxy metrics to gauge performance, leading to inaccuracy and inconsistency.
This outline should remind you to critically look at ESG performances rather than taking them as absolute representations of how sustainable a company is! ⚠️