Greenify #97: Energy ft. Artificial Intelligence
February 9, 2024
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📌 Fact of the week
By studying specific sea sponges, scientists might have discovered that human activity has already led to a 1.7°C temperature rise since the late 19th century… 😬
Hottest news of the week…
Regulation 🗃 – India Vs Europe
What happened: The Indian government is planning to protest Europe’s carbon tax at the next World Trade Organization (WTO) meeting. According to Reuters, sources close to the Indian government have said the EU’s carbon tax does not comply with WTO rules and represents a clear restriction on global trade. India is not the only country looking to file a complaint, as South Africa is likely to follow. Read below to learn more about the EU’s carbon tax. 🔢
Zoom out: The Carbon Border Adjustment Mechanism (CBAM) tax has been designed by the European Union to prevent carbon leakage. In other words, it is a tax for importers of materials like cement or steel to compensate for lower “green” standards. Indeed, as new regulations imposed in Europe force companies to have “greener” products, which are more costly, the EU wants to create a level playing field to avoid cheap imports with zero “green” credentials to enter the continent. The overall goal is to incentivize sustainability without putting Europe at a disadvantage.🤔
Business 💰 – A downgrade for Orsted
What happened: Orsted, world leading company in wind power generation, has seen its debt downgraded to BBB this week. The S&P flagged leverage concerns on the company’s balance sheet as well as U.S. impairments recorded by the company in 2023 following the cancellation of two large offshore projects. Orsted, which has temporarily halted its dividend pay out and paused capacity investments, said S&P’s decision will not have any implications on the company’s financing strategy. 💸
Zoom out: Through 2023, Orsted was the primary example of how bad the wind industry was doing. The company had to cancel two offshore projects in the U.S. due to rising inflation and supply chain issues. Higher interest rates and a weak underlying demand environment led to a series of profit warnings, with Orsted’s share price collapsing. This chain of events should also remind investors about the risks of valuing a business based on its project pipeline, as it may not necessarily materialize sometimes. 📉
Innovation 💡 - AI to boost recycling efficiency!
What happened: The Bollegraaf Group, a Dutch recycling leader, partnered with Greyparrot, a British AI startup specializing in waste analytics, to boost the digitization of waste management. This strategic partnership consists in utilizing Greyparrot’s AI solutions in Bollegraaf’s recycling plants with the goal of enhancing recycling efficiency and material recovery. The aim of Greyparrot is to make its technology central in the development of future recycling plants! ♻️
Zoom out: The partnership underscores the potential for AI to contribute to system-wide changes in how waste is processed, aiming for a reduction in waste generation and improvements in recycling efficiency. The initiative is also influenced by regulatory changes in Europe and beyond, which are pushing for increased use of recycled materials in products. Nonetheless, achieving these goals will require continued innovation, regulatory support, and shifts in consumer behavior towards more sustainable consumption patterns. 💪
Deep dives of the week…
Chart of the week - CBAM in practice 👓
In our Regulation news, we briefly touched upon what the EU’s carbon tax (CBAM) is and what is the logic behind it. Below, a very useful diagram to understand the mechanism by which importers will have to/won’t have to pay this tax. As a reminder, the CBAM is currently in place for the following industries: cement, iron & steel, aluminium, fertilisers, hydrogen, electricity.
Deal of the week - Using AI to forecast renewables output!
Jua, a Swiss startup leveraging AI to create a comprehensive "physics" model for the natural world, has successfully secured $16 million in a seed funding round, with 468 Capital and the Green Generation Fund taking the lead. Starting with climate and weather predictions aimed at the energy sector, Jua plans to expand its innovative forecasting solutions to agriculture, insurance, and more, as the unpredictability of climate change grows. Jua stands out for its ability to analyze vast amounts of data, offering more accurate predictions and aiming to transform how we understand and respond to the complexities of the natural environment with the help of AI. 👍
👋 See you next Friday, for the best sum up of this coming week!
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