Greenify #49: Oil & Gas, the party ain’t over yet.
February 10, 2023
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📌 Fact of the week
According to Reuters, the value of traded global markets for carbon dioxide permits hit a record $909 billion last year.💸
Hottest news of the week…
Regulation 🗃 – Italy wants to become an energy hub!
What happened: Italy’s prime Minister, Giorgia Meloni, declared intentions to use funds coming from REpowerEU to become fully independent from Russian gas and transform the country in an energy hub for Europe. The plan involves getting better agreements with Algeria and Libia, two gas rich countries, and could involve the construction of the so-called SouthH2 corridor, a pipeline designed to bring hydrogen produced in Africa to Europe (a very similar project is being explored in the north Sea, discussed in Greenify #47).
Zoom out: Italy’s relations with North African countries have always been strong, although they’ve been wrongly benched once the massive flows of cheap Russian gas started coming through. Now, re-establishing the old strong relationship seems like the best move for Italy but not for the climate. In fact, we were hoping for the REpowerEU money to be used to foster renewables in the continent, while agreements with North African countries would be based mainly on natural gas. Once again, additionally, we don’t think relying on geopolitically unpredictable countries with poor governance is the best move. Let’s hope at least for the construction of the SouthH2 corridor, which could be a game changer for the expansion of green hydrogen in Europe! 💪
Business 💰 – BP rethinks its strategy!
What happened: British Petroleum’s CEO, Bernarnd Looney, announced on Tuesday that the company is scaling back its commitment to cut oil Oil&Gas output by the end of the decade, from a 40% cut to only 25%. Looney justified the move by telling Bloomberg that “BP has to invest in today’s energy system, and the reality is that today’s energy system is predominantly an oil and gas system”. The market seemed to agree with him, as BP’s stock increased by 7.5%, the largest one-day jump in the past 2 years. 😮
Zoom out: The decision may seem short-sighted, however a CEO’s role is that to respond to the company’s owners, which, as the 7.5% stock’s jump shows, clearly want BP to focus on its core business. Why is that? As Bloomberg clearly explains, average returns on wind and solar investments are just around 6-8%, while Oil&Gas investments, now that prices are high, could be much better! Luckily for the planet, BP is still committed to invest billions in renewables and especially to maintain its focus on bioenergy, hydrogen, and charging points, which historically return around 15%! 👍
Innovation 💡 - Concrete innovations!
What happened: Heirloom Carbon Technologies and CarbonCure Technologies partnered in an attempt to use CO2 captured directly from the atmosphere and input it into concrete, thereby reducing the material’s overall emissions. To do it, Heirloom gathers limestone, one of the Earth’s most common rocks made of CO2 and calium oxide, and heats it up to release the CO2 in it. This is captured and stored by CarbonCure, who sells it to its customers (concrete producers). Once the CO2 is removed, remaining calcium oxide is spread onto vertically stacked trays and is able to absorb new CO2 from the atmosphere, hence reforming the original limestone rock. The plan is to repeat the process over and over again. 🔥
Zoom out: Cement accounts for c.7% of global greenhouse gas emissions, and is a key component in the manufacture of concrete. The latter is consumed on our planet in the shape of all sort of buildings and infrastructure. Given the low availability of scalable alternatives to concrete, reducing the material’s environmental footprint is the best option: to this end, finding substitutes of cement is key. In this case, once the captured CO2 is injected in concrete, it mineralizes and provides concrete with the same strength required. 💪
Deep dives of the week…
Chart of the week - Renewables set to be the largest source of electricity worldwide!
According to the International Energy Agency (IEA), renewables are set to surpass coal in electricity generation worldwide by 2025! This positive forecast is also a consequence of the fall in the costs of renewables, which, as shown in Greenify #46, are now the cheapest source of electricity! Watch out also for nuclear, as a +11% in 3 years is not bad at all!
Company of the week - Monetizing your sustainable efforts 😊
As carbon credits’ importance rises in fashion, farmers and land owners are looking into ways to make the most out of their land holdings. To help them, eAgronom developed a software that helps these farmers measure their emissions’ data and convert it into carbon credits which can eventually be sold to emitting companies. The Estonian based startup raised $7.4 million in a Series A round in 2022.💸
Analysis of the week - The EU closing down on chemicals!
What happened? ❓
This week, the European Union said it is considering the proposal to ban PFAS, also known as “forever chemicals”. These are chemicals used in industrial equipment, cars, and many other products, and are known due to their strength properties. However, they have also been associated to health risks for consumers and to environmental damage. According to the EU draft, chemical companies who manufacture these PFAS will be given between 18 months and 12 years (!) to substitute them with alternatives. ⌚
Who are the companies involved? 🏭
The main makers of these PFAS are industrial giants BASF, 3M, Bayer, Solvay, Merck and Chemours. Together, they formed a lobby group in an attempt to oppose to this decision, arguing there are no existing alternatives in some instances.🤔
Chemicals… a complicated industry🧑🔬
Chemical products can be flammable, dangerous and an environmental liability, and are often associated with environmental disasters, such as in the case of the Rhine river turning red following the 1986 accident at a nearby industrial warehouse. However, chemicals are vital and present in everyday products we consume, and in many cases are extremely useful in reducing CO2 emissions: for instance, some admixtures are used in concrete as a substitute to cement, lowering the overall CO2 impact of the building material.👍
👋 See you next Friday, for the best sum up of this coming week!
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