Greenify #66: Regulation round up & Carbon Sinks
June 9, 2023
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📌 Fact of the week
Singapore based exchange has cleared 12,000 tonnes of carbon credits on its first trading day.📈
Hottest news of the week…
Regulation 🗃 – Summarizing the week’s positives⬇️
1. Norwegian lawmakers have agreed to raise subsidies for offshore wind production.🌬️
2. U.N. talks on a global plastic treaty have ended with a mandate for a first draft to be released later this year.🤝
3. Germany is launching a $53bn stimulus program to accelerate industry’s decarbonization.
4. The EU and the United Arab Emirates (UAE) have pledged to seek support for global goals to expand renewable energy.☀️
Business 💰 – Mercedes and H2 green steel, a first step for a great patnership!
What happened: Mercedes has signed a supply agreement with H2 Green Steel for c.50,000 tonnes of green steel per year. The partnership should supply enough material for c.50,000 cars, as the average amount of steel used in a car is c.1 tonne. This amount represents only 2.5% of the group sales in 2022, but it is definitely an encouraging starting point! The car-maker was also an early investor of H2 Green Steel! 🚀
Zoom out: Iron and steel account for as much as c.7.5% of global emissions, hence decarbonizing the sector is a crucial challenge. Steel making is within the so-called “hard to abate sectors”, industries for which a simple decarbonization strategy does not exist; it’s production is very energy intensive and involves the use of coal to transform Iron ore into Iron. H2 green steel is trying to solve the problem by substituting coal with hydrogen and powering everything with renewables! The various complexities make this product more expensive, that is why it’s so good to see such an important partnerships coming along! 💪
Innovation 💡 - Sinking it all in 🛀
What happened: The MIT download dives into the story of Living Carbon, a climate start-up which just planted “photosynthesis-enhanced” poplar trees in Georgia. Trees are natural carbon sinks, as they absorb carbon from the atmosphere and store it in the wood as they grow, effectively acting as a CO2 natural remover. Living Carbon’s planted trees are an example of genetically engineered trees, able to grow in larger size and at faster rates, making them even more effective as carbon sinks. Concerns around genetically engineering remains still intact though, as potential effects on the surrounding ecosystem are largely unknown.🌲
Zoom out: The importance of forests as natural carbon sinks is paramount to maintain equilibrium in the current climate ecosystem. Last year, we discussed here how big of a role the elections in Brazil played in the fight against climate change, as policies regulating matters concerning the Amazon deforestation are crucial. Just to give you an idea, the Amazon is estimated to contain about 123 billion tonnes of carbon dioxide above and below ground.🏅
Deep dives of the week…
Chart of the week - No, this chart is not wrong!
The more it takes you to understand this chart, the more it’s making its point! It shows the level of income of Oil&Gas companies since the Paris Agreement (2015) next to the their level of spending on low carbon technologies over the same period! The basically non-existence of low carbon investment when compared to their income makes us understand that whenever we hear Oil&Gas companies investing in low-carbon technologies it is peanuts for them… some may call it green washing! ❎
Anyway this trend may not go on forever! We hope that with the latest huge earnings of 2022, they will find some REAL money for low carbon technologies.🤞
Company of the week - Capturing CO2 from the Ocean 🌊
This week we speak about a potentially revolutionary company, which aims to capture incredible amounts of CO2 through Direct Ocean Capture (DOC). Not everyone knows that the ocean is rich of CO2, as it naturally draws down ~30% of the global CO2 emissions. Captura, a spin out from the California Technology Institute, has developed a proprietary technology to capture the CO2 in the sea. The process involves some steps:
Some sea water is extracted and renewable electricity is used to split the salt and the water into an acid and an alkali base, in a process called electrodialysis.
The acid base is then used to extract the C02, which can then be stored permanently or reused
The acidic decarbonized water will be released back in the sea and restored by adding the Alkali base
➡️This decarbonized water will now be naturally ready to absorb the missing CO2, creating an interesting CO2 capture cycle! 🔄
Their latest plant has been tested in laboratory and is set to do ocean field trials this summer! If no major downsides are found, we could envision a real breakthrough in the carbon capture space🚀
Deal of the week - Just Climate - 1.5$bn inflow
Just Climate, an asset management firm backed by the Microsoft Climate Innovation fund, has just raised $1.5bn for its inaugural fund, “Climate Assets Fund I”, which will aim to invest only in “hard to abate” sectors such as cement or shipping. The fund was established by Generation Investment Management, another “green” asset manager spanning public and private markets created by Al Gore. Among Just Climate’s first investments, we can find EV charging company ABB E-mobility and Swedish gasification technology firm Meva Energy.
👋 See you next Friday, for the best sum up of this coming week!
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