Greenify #54: Arctic drilling Vs. ESG activism
March 17, 2023
Welcome to Greenify!
Did a friend send you this? Subscribe now and thank us later for not missing the most insightful information on the booming #GreenTransition!
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
84% of electric-generating capacity installation in the US for 2023 will be green, with more than 50% planned to be solar capacity, according to the Energy Information Administration 🔥
Hottest news of the week…
Regulation 🗃 – More Arctic drilling approved!🤬
What happened: This Monday, the Biden administration approved the Willow project by ConocoPhillips, a massive Oil development in Alaska. This 30-years project will produce up to 180k barrels per day in peak times, according to the company. Willow would involve three drilling stations, ~42 kms of new gravel roads, many hundreds of kms of ice roads, and an airstrip! Since Monday, various lawsuits from famous environmental groups have been filed trying to stop the development.💪
Zoom out: The lawsuits base their thesis on how this approval would mine US’ climate targets. In fact, Willow is expected to produce 280 million metric tons of CO2 equivalent over its lifetime, mainly arising from the final consumption of the oil produced; this is roughly equal to 5% of US’ total emissions in 2021. The approval of project Willow seems to testify something: the US is still putting energy security ahead of emissions reduction. 😬
Business 💰 – ESG activism on the rise
What happened: In relation to its upcoming annual general meeting on April 27th, British Petroleum (BP) has recommended its shareholders to vote against a climate activist resolution proposed by activist climate group Follow This. The resolution pushes BP to commit to absolute emission cuts by 2030 in line with the Paris climate deal, including Scope 3 emissions. BP stood against this resolution, calling it “unclear”, “simplistic”, and “disruptive”. 😮
Zoom out: ESG activism has been a big trend recently, as shareholders require companies to improve their environmental footprint in light of the current climate crisis. Follow This’ anger arises from BP’s recent rethink on oil and gas output emissions; last month, the company rowed back on plans to cut oil and gas output. Its current 2030 plan implies producing 2 million barrels of oil equivalent per day by 2030, a 25% decline vs. 2019 levels yet significantly lower vs. the initial 40% cut targeted. BP, however, is not the only oil giant targeted by the activist group: Chevron, Exxon Mobile, and Shell are also on the agenda. 👮
Innovation 💡 - Electrifying aircrafts? Not just yet
What happened: On Tuesday, due to issues with regulation, Beta Technologies pushed back the debut of its electric aircraft. Beta is a company working towards electrifying aircrafts, particularly for short haul flights. The postponed aircraft belonged to the eVTOL (electric vertical take-off and landing) family, which, as the name suggests, take off and land vertically, like a helicopter. Despite delays, this technology remains promising, with Beta having already secured orders from companies like UPS and Air New Zealand. At the same time, the company announced plans to certify a more conventional version of its electric plane by 2025. The new electric plane announced is the CX300, which differs from eVTOLs as it requires a runway to take off and land. On a single charge, the CX300 has flown up to 386 miles. Regulation around safety remains the main barrier towards faster development. 🛩️
Zoom out: Air travel accounts for 4% of global greenhouse gas emissions. Most discussions on greenifying the industry revolve around shifting from burning kerosene to using sustainable aviation fuels (SAFs), and ultimately transitioning to hydrogen. Last week, we reported news about the largest hydrogen-fuelled aircraft to ever fly. SAFs and hydrogen would be ideal solution for all type of flights, short-haul and long-haul. Electrifying aviation has been less spoken about, and its use case looks to be confined to short-haul flights, both commercial and cargo delivery. 🔋
Deep dives of the week…
Chart of the week - SAF penetration, still low
We spoke about sustainable aviation fuels in the context of the airline industry. Taking a look at the data, you’ll see how penetration is still very low, despite recent growth. The IEA estimates SAFs will account for 18 billion litres by 2025, compared to 353 billion litres of fossil jet kerosene. This equates to a 5% market share for SAFs. By 2040, the IEA estimates SAFs will account for c.20% of the market.📈
Source: IEA
Company of the week - Amarenco: bringing solar PV developments to next level!
Amarenco, a Franco-Irish company focused on developing photovoltaic, agri-photovoltaic, and storage infrastructures, just raised €300 millions from Arjun Infrastructure Capital. Amarenco is the European leader in Agri PV, while in “standard” PV it is particularly focused on corporate off-takes, i.e. ad-hoc projects for companies willing to set up PV infrastructures to use their self-produced clean electricity. In the storage space, Amarenco is currently building one of the largest lithium-ion battery systems in Europe! This huge sum will be used to keep up the almost € 1/2 billion per year invested by the company in recent years!
Comment of the week - Desalination overview! 👀
Why do we need desalination? 🤔
Fresh water is needed everywhere. It is easy to think about drinking and other personal consumptions, but we should also think about agriculture, energy production and other industrial processes (yes, most of these cannot use brackish water).
From studying geography in middle school you will remember that only ~2.5% of the world’s water is fresh water, and only ~1.5% is actually accessible. To this fractional amount add an increasing number of severe draughts, contamination of rivers and lakes, and a constantly growing population, with high rates in water scarce areas.
What’s the current market like? 😳
The desalination market has been growing at 10%+ for the past 10 years and is expected to grow at similar levels until 2030. At the moment, more than half a billion people receive their daily drinking water by means of desalination.
The largest market is the US, which uses these plants especially in the dry southern states. While the fastest growing market is Middle-East, with Saudi Arabia, UAE, and Israel leading.
What are the challenges to scale it? 😬
High energy consumption – Desalination is an energy intensive practice, although it is becoming more efficient with time. In fact, Reverse Osmosis, the most common used technology nowadays, which removes salt using membranes, consumes a fraction of energy compared to the first thermal desalination plants.
High set-up costs: Building industrial-scale desalination plants (i.e. those that can be used by cities and communities) is extremely expensive, that is why desalination struggles to pick up in less developed African countries.
Product waste creation: 1 litre of drinking water creates 1.6 litres of brine, a very salty and contaminated substance that mines biodiversity when discharged. On top of salt, brine contains pollutants coming from additives used to efficiently maintain the desalination plants.
How can we solve them? 💪
With technological developments of course —> Scientists are working on more than 50 technologies to be ran along Reverse Osmosis or as a substitute for it, in an attempt to reduce energy consumption and waste creation. 👍
However pick up times in the industry are very long, as investors restrain from investing in early-stage technologies, given the high capital expenditure required and long-payback periods. On this note, it is time for governments to start adding desalination more consistently in green transition acts and funds! 😡
👋 See you next Friday, for the best sum up of this coming week!
If you enjoyed this edition, help us grow by liking this post, and share it with your network!