Greenify #59: G7 catch up, US policies, and various deals!
April 21, 2023
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📌 Fun/sad fact of the week
The US Defense Department has raised concerns about Biden's plans to install 30 GW of offshore wind power along the central Atlantic coast, as it warns that nearly all the new area identified for development conflicts with military 😳
Hottest news of the week…
Regulation 🗃 – G7 catch up in Japan
What happened: The G7, a group consisting of seven major global economies (Germany, France, UK, Italy, Canada, US and Japan), held a meeting in Japan to discuss renewables’ targets and fossil fuels. On the renewables side the outcome was positive overall, as the group committed to collectively increase offshore wind capacity by 150GW by 2030 and solar PV by 1TW by 2030. Conversations on reducing fossil fuel use have been slightly more ambiguous, with no specific announced commitment, sparking anger among green focused groups. 📈
Zoom out: Government delegations of the world’s largest countries tend to meet once a year to discuss climate targets and net zero pledges in what is known as COP (Conference of Parties). Last year’s conference concluded with a decision to establish and operationalize a loss and damage fund related to be funded by developed countries towards emerging countries in relation to climate disasters. However, the last COP also failed to come up with a plan to phase out gas and oil. 👎
Business 💰 – Automakers losing access to subsidies
What happened: A list of automakers in the U.S. have lost access to US EV tax credits incorporated in the IRA over sourcing issues related to minerals for their electric vehicles. These automakers include VW, Rivian, Nissan and BMW. On the matter, the IRA requires that 50% of the value of battery components be produced or assembled in North America to qualify for subsidies. 🚗
Zoom out: The Inflation Reduction Act (IRA) launched under Biden’s administration supports a wide range of industries in a push to decarbonization through grants/tax credits. However, it also focusses on making the U.S. more competitive vs. other regions, particularly China, in an effort known as “re-shoring”. This refers to building more localized supply chain in critical areas such as minerals’ sourcing for batteries. The IRA has been openly criticized by the European Commission, as some European industries are negatively affected by “re-shoring”; as a result, the continent is set to respond with its “Green Deal Industrial Plan.” 👍
Innovation & public financing 🗃 💡 - US subsidizes DAC 🇺🇸
What happened: The US government is leading the green transition with innovative policies, offering $3.5 billion in grants to build Direct Air Capture (DAC) mega plants. DAC is a process of capturing carbon dioxide (CO2) directly from the atmosphere and storing it permanently. This huge grant scheme is tempting all the largest DAC players around the world, including Climeworks (developer of the largest plant in the world), which has bid for 3 hubs in the US as a consequence. Winners of the grant will be announced this summer. 😎
Zoom out: According to UN’s scientists, billions of tonnes of carbon will need to be removed from the atmosphere annually to cap global warming at +1.5C. Although much of that removal will come from natural solutions such as planting more trees or increasing the ability of soil to sequester carbon, permanent carbon removal such as DAC will also be required. At the moment, even the largest DAC plants are capturing fractional amounts of CO2 (40,000 tons per year) at very high costs… However, this is exactly the type of sector that need government financing to develop. Well done US. 👍
Deep dives of the week…
Chart of the week - Refresher of the most important of all charts! 🙏
Weekly refresher on where do our emissions come from, as we believe it is the most important data to keep in mind when discussing global warming. Overall, c.73% of emissions come from energy use, whereas c.20% from agriculture. Looking at sub-sectors, road transportation and residential buildings lead the way, followed by iron and steel production, which account for roughly 12%, 11%, and 7% respectively!
Company of the week - Infogrid, making your building efficient! 🏠
Infogrid is a startup that leverages AI to gather and analyze data from IoT sensors that monitor air quality, occupancy, and energy consumption to help property managers and owners optimize their building's performance. They recently raised $90 million in a Series B round led by Northzone, which will be used for product development, strategic hires, and customer acquisition efforts. Infogrid uses IoT sensors to collect data on air quality, occupancy, and energy consumption in buildings. The platform analyzes this data to optimize building performance, reduce costs, and improve sustainability. Infogrid's success is attributed to the growing number of regulations and a significant transformation in real estate as companies seek less but more sustainable real estate, driving interest in remote monitoring. 👍
Deal of the week - Climate tech VCs manage to still raise money!
Venture capital firm Congruent Ventures, one of the first VC fund to focus solely on early-stage climate-oriented start-ups, has raised over $300m for a Continuity Fund aiming at supporting the scaling of its portfolio companies. The Continuity Fund will double down on 15 to 20 of the firm’s early-stage investments as those start-ups grow revenue and raise late B or C rounds. So far, the fund has invested in Amp Robotics, Meati Foods, Span, and Fervo Energy, discussed in Greenify #53.
The funding is particularly important for two reasons:
It comes at a time when VC funding is low, amid inflation, high interest rates and the collapse of leading climatetech bank SVB. 💪
Congruent Ventures raised money from various institutional investors, including US and Canadian pension funds, which have historically stayed away from the risky VC sector! 🤔
Good luck Congruent Ventures, let’s scale them! 🚀
👋 See you next Friday, for the best sum up of this coming week!
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