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Summary

• Stem (STEM) has pivoted from a low-margin battery resale business to a comprehensive solar and battery optimization software provider.

• Non-GAAP gross margins have reached a record 55% thanks to this strategic shift.

• Substantial TAM expansion in the solar and battery sectors is a significant tailwind for the company.

• The company is cheap on paper, trading for less than 1x ARR, but the legacy of the old business model has led to a significant debt profile and declining revenues.

Stem (STEM) currently has a $54 million market cap.

The company sells software that monitors, controls, and optimizes clean energy assets. Solar farms, battery storage, and increasingly hybrid sites are using Stem’s software, called PowerTrack.

Their software touches projects in 55 countries. As of Q2 2026, they had 38 GW of solar and 1.8 GWh of storage under management.

Stem has been public since 2021, and earlier in its life– this was a behind-the-meter battery company reselling hardware at thin margins with software bolted on top. That model has been grossly unprofitable and has driven the company to dire straits.

Starting in 2024, management deliberately shrank the hardware business and pushed everything toward software.

The margin side of that transition is working. Revenues have not caught up yet.

While I can appreciate this shift to a capex-light software model, I think Stem needs more time to prove they can reach a positive net income.

Until that growth potential is proven out further, I have to rate the company a Hold.

Products

PowerTrack is the overall name of their software, and there are several different offerings.

PowerTrack Optimizer is asset performance management. It monitors, detects faults, and reports across mixed fleets. It’s hardware-agnostic, meaning it can ingest data from many inverter and battery brands.

The PowerTrack platform delivers up to a 3-5% reduction in operating expenses and a 1-5% increase in total energy production.

PowerTrack EMS is the energy management system, providing real-time control for battery sites.

And PowerTrack SCADA/PPC handles supervisory control and grid-code compliance.

Stem has also acquired the software assets of Raicoon, a Vienna-based provider of automated fault detection and event management for solar asset performance.

It’s also worth noting that they launched AIONA, an AI services offering. Right now this is a product focused on consulting for project roadmap planning, building AI agents, and systems integration.

Raicoon and AIONA represent further opportunities to drive upsells to new and existing customers. Revenue potential is unknown for now; we will have to wait and see how much of an impact these additions can make.

Business Model

When looking at this chart, keep in mind that Stem experiences seasonal demand, with Q4 being the best quarter and Q1 being the worst. Winter constraints on projects, tax incentive deadlines, and developers rushing to hit year-end deadlines all contribute to that trend.

Here is Q2 2026 revenue of around $34 million broken out:

PowerTrack software brought in roughly $11 million, up 11% year over year. That is the recurring SaaS.

Edge hardware, meaning the physical data collection and control devices installed at sites, was roughly $15 million and up 22%.

Managed services came in around $6 million, down 34%.

Project and professional services were about $2 million, down 6%.

And battery hardware resale, which used to be the biggest line item in the whole company, contributed roughly $300,000. So battery resale has almost been totally phased out now. This is what has led to material revenue declines.

Add the first four together, and you get $33.4 million, up 1% from $32.9 million a year ago.

So the core business is flat. The 12% headline decline is almost entirely the phase-out of battery resale.

Annual recurring revenue (ARR) ended the quarter around $62 million. PowerTrack accounts for $43 million of that, and managed services $19 million. Contracted ARR, which includes signed deals on systems not yet operating, is $69.0 million.

The business is now capital-light, but revenues will need to grow significantly to save this stock. Capex in the first half of the year was only $2.6 million, all allocated to software development.

Recurring revenue only makes up $62 million of a guided $140 to $190 million. Edge hardware and project services are transactional and lumpy. This is a software business with a legacy hardware segment that will take time to fully offload.

The company has now entered Latin America, with a key focus on growth in Chile and Colombia.

Industry

Stem sits at the intersection of two markets. Solar expansion and a battery storage boom.

This trend is being driven by data center energy demand and a desire for energy security amid instability in the Middle East. Not to mention solar panel costs declining significantly over the last decade.

The world installed a record 664 GW of solar in 2025, up 12% year over year, and solar accounted for 77% of all new renewable capacity added globally that year.

The total global solar fleet crossed 3 TW in early 2026, having tripled in roughly four years.

Storage is the faster-moving half. BloombergNEF counted 112 GW and 307 GWh of new battery storage additions globally in 2025, and forecasts 158 GW and 459 GWh for 2026. That is 41% growth in a year when solar volumes are actually expected to shrink. It only took four years for annual storage additions to go from 10 GW to over 100 GW, compared to eight years for solar.

Meanwhile, Stem currently has 38.3 GW of solar under management, which is roughly 1% of the 3 TW global fleet. In addition, Stem has 1.8 GWh of storage under management, compared with the 307 GWh the world added in 2025 alone.

So the pool of potential clients is enormous relative to what Stem has captured. Every one of those projects needs monitoring, and increasingly every solar site being paired with battery capacity needs a control system that can handle both.

With that said, Stem has been in this market for 15 years and holds barely 1% of it. Their core revenue grew 1% last quarter while the storage market grew 41%. Part of this lag may be the competitive landscape.

Competitors

Power Factors is the closest comparison. They’re competing directly on asset performance management for mixed renewable fleets. Generally considered the scale leader in independent APM. Power Factors manages 310+ GW of wind, solar, and storage capacity, so 10x the capacity of Stem.

FlexGen competes head-on with HybridOS, a hardware-agnostic EMS for utility-scale battery fleets.

Fluence Energy competes with its own asset performance management (APM) offering.

GreenPowerMonitor, owned by DNV, brings certification credibility and grid-code depth in Europe, which is one of the main regions where Stem is trying to expand.

Then you have Tesla with Autobidder, plus hardware vendors like Sungrow, all competing by bundling free or near-free software with their own equipment.

Stem’s initial focus on a capex-intensive battery resale business has severely dampened growth potential and has left them with a significant debt profile.

Stem can’t outspend anyone on R&D. Q2 research and development was $6.5 million, down 35% year over year.

The massive collapse of the stock price makes any additional dilution painful for existing stockholders. A main bottleneck will end up being the ability to raise funds– which they don’t have.

The only moats to speak of are switching costs for projects already integrated into their platform and some regulatory barriers for certifications where Stem is already established. I don’t consider either very strong, as Stem doesn’t hold a significant market share.

Share Structure

Stem executed a 1-for-20 reverse split in June 2025 to regain NYSE compliance. That took shares outstanding from 167 million down to 8.36 million.

As of June 30th, 2026, there are now 9.6 million shares outstanding.

Potentially dilutive securities total roughly 2.7 million shares. That breaks down to about 1.15 million RSUs, 172k stock options, 440k private placement warrants, and convertible notes representing roughly 950k shares.

That’s a 28% overhang on the current share count. The 2028 notes convert at $584.86 and the 2030 notes at $142.55. With the current stock price at $5.57, they’re not much of a concern.

A larger issue is a new ATM. Stem has entered a $30 million at-the-market program with Jefferies. Through June 30th, they issued 595,303 shares for $5.6 million. Whether it’s dilution or debt, the profitability issues are eating away at this company.

There has been zero insider buying in the last 12 months. Only selling. Not encouraging.

Financial Analysis

In Q2 2026, revenue came in at around $34 million, down 12% year over year and short of roughly $37 million consensus.

GAAP gross margin improved to 41% from 33%, and non-GAAP gross margin hit a record 55%, up from 49%.

Over the last several quarters, operating loss narrowed to $7.7 million from $13.3 million. Net loss was $14.4 million. Adjusted EBITDA was $6.2 million, up 63%, marking the fifth consecutive positive quarter. And operating cash flow was positive $0.3 million versus negative $21.3 million a year ago.

Gross margin has expanded consistently, from 46% non-GAAP in 2025 to 54% in the first half of 2026. Operating expenses fell from $57.8 million to $46.6 million year over year. Adjusted EBITDA went from negative $22.8 million in 2024 to positive $6.7 million in 2025, to $8.2 million in the first half of 2026 alone.

While things are improving margin-wise, they need some serious revenue growth and bottom-line progress to reach a better place.

Turning to the balance sheet, cash was $38 million. Total assets were $280 million, of which $113.0 million is intangibles. Total liabilities came to $550 million, including $107 million in current liabilities and roughly $440 million in long-term debt.

On the debt structure, in June 2025 Stem exchanged $350 million of convertibles for $155.4 million of new first-lien notes due December 2030, plus warrants and $10 million in cash. That cut roughly $195 million of debt.

Interest expense was $7.5 million in the quarter and $14.9 million in the first half. That tracks toward roughly $30 million annualized.

Full-year adjusted EBITDA guidance is $10 to $15 million. Which means they’re not even covering their current interest.

On guidance, they reaffirmed everything on the Q2 call. Revenue of $140 to $190 million, core revenue of $130 to $150 million, battery resale up to $40 million, and year-end ARR of $65 to $70 million.

That’s a 23% step up in a business that declined year over year in both quarters. The projections seem a bit unreasonable without assuming substantial revenue growth.

Risks

The worst is the debt. Roughly $550 million in total liabilities against $38 million in cash isn’t a great start. Interest expense runs about two times adjusted EBITDA.

Dilution is immediate. The ~$24 million of unused ATM capacity is 45% of the current market cap.

On the regulatory side, Stem names the One Big Beautiful Bill as a direct uncertainty affecting customers and suppliers, alongside tariffs.

Then there’s technology risk. R&D spending is down 35% year over year while better-capitalized rivals are eating up potential market share.

Listing risk is real too. Another compliance problem is plausible if the stock keeps sliding. Then you end up on the OTC with decreased access to capital and institutional investors.

Conclusion

The software transition is real. Fifth straight quarter of positive adjusted EBITDA, record 55% non-GAAP gross margins, opex down 19% year over year; the turnaround is in progress.

Trading at less than 1x ARR, it theoretically screens cheap for a software business.

An average public company in the SaaS space trades at around 6-8x ARR. Granted, Stem seems to deserve the low multiple for now.

Competition is a problem, but the target sectors are so large, with massive growth rates– it may not matter.

The caveat is consistent profitability issues and a business technically in decline as the battery resale model will be phased out.

It’s pretty much a coin flip to see how the next 1-2 years play out.

If they hit guidance and manage to get the debt situation under control, the stock could re-rate.

If revenue growth disappoints, we see continued dilution and serious liability concerns.

I can’t give the stock a Buy rating under these conditions; there are simply too many risks.

Until they make notable strides on the revenue front, onboarding more software clients- it’s worth watching how the turnaround goes, but I wouldn’t go any further than that for now.

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

Abaxx has released its second-quarter results for 2026, and it’s safe to say that everything is improving… except for the share price.

Back in May, the stock reached its peak of C$72 and has fallen to C$24. So, we have seen a decline of roughly 70% from the 52-week highs just a few months ago.

And that means it’s safe to say that short sellers have won this battle, as Viceroy Research and others sought to shake uninformed or anxious retail investors out of their shares. With the stock still being illiquid, and shorts adding fuel to the fire… it’s not very surprising to see how this has gone.

The main thing that surprised me was how many investors have ended up selling and being shaken out of a stock that’s about to hit a massive growth curve. But it is a great time to be a buyer if you missed out on the previous run-up.

Unfortunately, it’s not great for optics that Abaxx also had to refile its financials because of several reporting errors. Refiling documents isn’t uncommon; we are all human, and everyone makes mistakes.

Shorts will, of course, act like this should be a company-ending scandal. Because it financially benefits them if everyone thinks it is.

You can see a full analysis of the latest financials here, if you wish.

Ultimately, all of this will blow over, and the fundamentals will eventually drive us to new highs. And if you’re following the growth trajectory of this company, you’ll see why…

Growth

Diving into the numbers… management is confident they will achieve 50-100% H/H growth, and that will comfortably hit their goal of 1 million average daily volumes (ADV) in 1-3 years.

Q2 2026 total exchange volume was 888k contracts, up 276% from 236k in Q1. Average daily volume was 14k contracts, also up 276%.

Average daily open interest reached 641, up 129% from 280 in Q1.

H1 2026 volume was 1.1 million contracts up 613% when compared to the second half of 2025. Average daily volume was up 648%. Average daily open interest was up 28%.

July volume alone came in at 785k contracts, up 127% over June. Average daily volume hit 34k contracts, up 134% over the entire Q2 average.

Now, Joe Raia, the exchange’s President, made it clear that we should not expect July’s growth as typical as growth will fluctuate. But the clear trend every year will be substantial growth in contract volumes as the exchange’s ecosystem continues to expand.

When looking at individual contracts, precious metals account for the vast majority of trading and growth right now…

• Gold Singapore futures did roughly 630k contracts in Q2, up 287% from Q1.

• Silver Singapore futures launched on May 22nd and traded 107k contracts before the end of the quarter, an ADV of 4k.

• LNG, combining the Gulf of Mexico and North Pacific Asia contracts, reached 121k contracts in Q2, up 102%.

So, they have several contracts that are growing rapidly, likely going to be profitable in the next 1-2 years if they want to be.

Currently, they are spending any revenue they generate on liquidity incentives and rebates for market makers or traders to jumpstart their markets. A typical practice you see whenever exchanges in the industry are launching new contracts.

Josh Crumb, the CEO, noted that it’s possible they will reach financial breakeven before they need to raise more capital again. This last raise in May might be their last, unless they want growth capital for tech investments.

With all of this said, I haven’t even mentioned the growth of their exchange ecosystem yet…

• 2 settlement banks.

• 22 interdealer brokers.

• 11 software vendors offering access.

• Up to 7 clearing firms now, including Yongan.

• Over 100+ trading firms using the exchange.

• 5 data distributors (LSEG and Bloomberg being major additions).

This doesn’t include the 10 clearing firms, 4 ISVs, a tier-one bank clearing member coming online, etc in the pipeline.

Then, to add on top of that… new contracts coming in platinum, palladium, electricity, crude, environmental, agriculture, base, and battery metals.

And they’re going to 24/7 trading in 2027. And launching options, perpetuals, tokenized treasuries, funds, etc.

I just can’t imagine seeing this level of contract growth and market participant/contract pipeline… and being bearish.

Financials

Revenue in the quarter from transaction and clearing fees was up to C$4.5 million, with essentially all of it going back to liquidity-related credit. While this ratio will lower over time, it is possible we never see the total end of trading incentives. All exchanges still offer them at differing rates.

Total operating expenses have increased by approximately 60% compared to 2025. From C$12 million to C$19 million. Costs will increase minimally as the exchange is now running on all cylinders, but line items like salaries will rise as the tech side of the business expands.

Cash and equivalents on June 30th were C$95 million, with total assets of C$162 million.

C$51 million in total liabilities, mostly accounting for required holding funds or margin deposits for the exchange… as well as C$24 million in convertible debentures.

Opex is covered by cash on hand for at least a year, if not longer. Crumb said on the investor call he expects opex to flatten from here rather than continue stepping up, because the Q2 jump reflected a one-time build of the commercial team.

It’s also worth mentioning the company authorized a normal course issuer bid (share buybacks) for up to 400k shares, about 1% of the float, with an automatic securities purchase plan.

With no need to dilute for over a year, and substantial growth in all vectors of the business… shorts had their fun, but momentum will shift back in Abaxx’s favor soon enough.

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Disclaimer: I’m long Abaxx Technologies. I hold an equity position that was acquired at an average share price of $5.51. I was not compensated by the company to create this post.

The owner of Green Investing is not a licensed investment professional. Nothing produced under the Green Investing brand should be construed as investment advice. This content is made for entertainment and educational purposes. Do your own research.

Deep Isolation Nuclear (DBHL), has a market cap of roughly $300 million.

I have been searching for a capex-light business model to get exposure to the nuclear renaissance, and Deep Isolation might be the best way.

This is a company trying to create a permanent solution for nuclear waste. While anti-nuclear energy activists often sensationalize the issue and act like it’s worse than it really is... it is true that most power plants have no long-term plan to store the waste they generate. For now, it’s just stored in containers on site.

Deep has devised a novel way to store the waste underground, by using mostly standard oil and gas equipment:

• Instead of excavating a massive mined repository hundreds of feet underground, which is what most countries have spent decades and billions failing to permit...

• You drill a borehole one to two kilometers deep using drilling techniques borrowed from the shale industry.

• You place canisters of spent nuclear fuel in the horizontal section at the bottom, far below any groundwater, sealed in stable rock. Then you seal the hole.

This would be dramatically cheaper and faster to deploy than centralized repositories deep underground or in mountains.

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Business Model

Deep Isolation does generate some revenue today, but not from disposing of nuclear waste, because they have not disposed any nuclear waste yet. In the second quarter of 2026 the company reported revenues of $1.3 million, and that came primarily through consulting and advisory work, through a subsidiary they acquired called Freestone.

In term’s of Deep’s monetization plans, they have an asset-light nuclear waste disposal solution, and the ability to license out their vast IP portfolio to hasten the roll-out of their technology to utilities and government entities.

Once a company or government has entered the project pipeline as a serious potential buyer, they will work through a three stage process to evaluate any future project:

1. Strategic Appraisal - Taking approximately 4-6 months to complete for $100-200k. This is going over initial feasibility assessments and evaluating which solution might be best for the client.

2. Operational Planning - A roughly ~12 month process for $1-2 million in revenue for Deep. OP is a comprehensive feasibility assessment going over project geology, specified solution planning, creating a implementation model and looking at financing options, etc.

3. Implementation - Actually building out the waste solution is estimated to take 5-15 years, depending on project complexity and permitting. The potential revenue value of these contracts can exceed $1 billion in total revenues over the life of the project.

While the potential long-term value of nuclear waste disposal and storage can have large contracts attached, it will take a long time before Deep is starting to roll out commercial projects. In the mean time, investors are banking on various projects entering the planning phase and providing several million dollars in revenue.

As of this month, there are roughly 40 companies/entities in the project pipeline and 9 of those were somewhere in the contracting stages above.

In earlier presentations, management estimated that they could generate $140 million in revenues by 2030. That would likely be without a full commercial project online yet...

Income is lumpy and project-driven, but not nearly as risky and capex-intensive as something like Westinghouse building nuclear power plants themselves.

Partnerships/Validation

To reduce risk even further, Deep is partnered with:

• Amentum on engineering services and licensing/commercialization of their technology.

• Dominion Engineering on sales and deployment of patented disposal tech.

• NAC International on manufacturing and supply of canisters for waste storage.

• And Halliburton who will provide drilling and well construction expertise.

This isn’t even all of their partnerships, and these companies are experienced engineering and nuclear firms. They significantly de-risk Deep itself, and the roll-out of their disposal solution as they will have experienced partners every step of the way.

Even better, Westinghouse is involved as well, collaborating as a launch customer to help secure the NRC’s certification of Deep’s canister system.

If you are worried about whether the tech will work or not, there are no guarantees... but these various high-profile partners provide a level of credibility that I am looking for when investing in novel technologies.

I’m not a nuclear engineer, so I tend to rely on finding companies with external validation in cases like this. That’s the exact same reason I invested in Aduro and had faith in their process for plastic recycling. They had Shell and other majors on board testing their technology, that at least tells you they have something promising, if nothing else.

Deep Isolation is also running a full-scale demonstration, non-radioactive pilot in Texas. That launched in January. This is to demonstrate the drilling, placement of canisters at depth, and retrieval.

Industry

When looking at the industry broadly, the IAEA, EIA, and other governing bodies in the nuclear sector estimate that the addressable market for Deep could be roughly $300 billion by 2050.

The accelerating growth of small modular reactor development, and a growing desire to build large-scale nuclear plants will lead to higher demand for waste disposal as well.

The United States alone has about 90,000 metric tons of commercial spent fuel with no permanent repository in place. The federal government has been paying utilities damages for failing to take custody of it. Various countries around the world are facing the same issue.

Not only is there a commercial demand for Deep’s solution, but it would put the fears of nuclear doomers past us if we had a solid solution for storing nuclear waste.

Competitors

When thinking about competition for a company like Deep Isolation, the deep borehole concept itself is not proprietary to this company. The DOE studied deep borehole disposal for years. As of making this video, there are no other direct competitors trying to do this. Deep is the only one...

What Deep Isolation has done is build a patent portfolio around various implementation techniques to make it difficult for anyone else to copy them. Deep has 114 U.S. or international patents issued, and 44 more in development. So, they have a strong IP portfolio protecting their process. This portfolio spans repository architecture, site characterization, canister systems, emplacement and retrieval.

Their main competition is less so actual companies and more about a different approach. The main alternative is mined geological repositories, mined underground or in mountains. This is what Finland has done with Onkalo and what the US was attempting to do with Yucca Mountain.

Holtec International, NAC International, Orano and other nuclear industry players offer interim storage solutions, but none covering the entire waste disposal process like Deep does.

So, the primary moat at the moment is the company’s patent portfolio. Which can often be circumnavigated eventually, but that takes a long time. Now Deep has to prove itself and cross the regulatory and commercial thresholds to prove out the process and start generating significant revenues.

Financial Analysis

Moving onto the financials, in Q2 2026, revenue was $1.3 million. As mentioned earlier, that is from consulting services right now.

Research and development expenses were about $1.2 million, driven by ordering long-lead items and engineering for the demonstration project. SG&A was $2.7 million, up 24%, from higher accounting, legal, travel, and new hire expenses.

So, the overall net loss was $3.0 million for the quarter, versus a $1.4 million loss in Q2 2025. Losses are increasing, but still low when compared to other business models in the industry. But yes, this is essentially a pre-revenue company.

Looking at the balance sheet, cash was at $19 million, down from $27 million at year-end 2025, so they burned roughly $8 million in the first half of the year. Total liabilities were just $2.0 million, essentially no debt beyond small lease obligations.

Burning through $3-4 million per quarter gives them about a year of runway before they need to raise more capital.

With that said, that runway can be extended by non-dilutive and grant funding from government entities.

ARPA-E, an agency under the DOE, is set to provide up to $20 million in grant funding for the company to prove out its process. This is in addition to any other funding avenues Deep might find over the coming years. So, dilution could be relatively minimal.

Risks

Thinking about the risks for this company...

• It seems like the technology should be a safe bet, but there are always risks that something goes wrong.

• Financing and dilution is always a concern with pre-revenue stocks. We will see if they source non-dilutive funding that can cover costs until they reach profitability... chances are they will need to sell shares a few times.

• The company’s shares only started trading publicly, relatively recently. Long-term shareholders or insiders can now sell and that could create a potential overhang if any large shareholders want out.

• While this company will be capex-light compared to the rest of the industry, they still face timeline risk where regulatory approval and project build-outs can take many years.

Catalysts

Potential catalysts in the future:

• Further grant funding

• Progress on the demonstration project

• Any contract announcements with the government or utilities

I have been desperately searching for a good way to get exposure to the nuclear energy trend, which should continue into the decades to come. Deep Isolation might just be that stock. My main reservation is the timeline to their first initial commercial project...

Chances are this will take place after the main pilot demonstration, set to finish in 2027. And it will take years to finalize the first commercial project, so we are looking at... possibly the early 2030s. That is a long time to wait for validation and significant revenues from the main product.

Granted, they are estimating around $140 million in revenue by 2030, mostly from project appraisals and planning assessments. Various contract milestones.

With no real margin of safety to speak of, paying for a roughly $300 million market cap on a company potentially 5+ years away from its first commercial project is risky within itself. I think I will just watch the company for the next few years and see if management continues to execute.

If and when I decide to invest in the company, I will likely make a more in-depth report going over every aspect of the business. For now, it will be on the watch list.

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

On July 17th, 2026, the European Commission published COM(2026) 616, a long-anticipated revamp of the EU Emissions Trading System. The compliance carbon market that encompasses roughly 40% of the bloc’s total emissions.

The EU’s binding goal of a 90% net reduction against 1990 emissions numbers by 2040, of which at least 85% must be achieved domestically… can be a bit daunting for heavy-polluting industry.

As expected during a time of extreme geopolitical and economic turmoil, the EU is set to dial back some ambitious aspects of the program.

With prices rising broadly across the region, it’s no surprise that they are looking to shake things up. And this is why I have always advised against investing in industries reliant on government-driven markets or subsidies. At any moment, they might change the rules— and now you’re a bagholder in a sector begging for government handouts.

The state of EU Carbon Allowance (EUA) economics determines the financial viability of entire industries in the European region, like green hydrogen or carbon capture.

Technology standardizations over time as more projects are built, and a rising carbon price leads to profitability. Obviously, like any commodity, if the price falls… then that will eat into the cash flows from these projects.

This post will review the aspects that I think investors should know about investable industries, not the entirety of what was included in the document.

Before we conduct a deep dive into what changes are on the docket… keep in mind this is a proposal, not the law of the land. Negotiations will be ongoing in 2027, and a final draft will take effect in 2028.

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1. Slowing the Emissions Cap Decline

The EU Commission has proposed a linear reduction factor (LRF) of 3.7% for 2031–35 and 1.7% from 2036, versus 4.3–4.4% today. This refers to the emissions cap instituted by the program, which is set to decrease over time. So, allowances would keep being issued into the 2040s rather than running out by 2039.

This, of course, will lead to lower carbon allowance prices over the long run and stalls the pricing increase that would encourage energy-intensive industries to make a concerted effort to lower their emissions. Rather than just paying for allowances.

You can view the current price of EUAs here. Also known as permits.

2. Extending Free Allocation to 2038

To prevent businesses from moving away to avoid lowering emissions, the EU ETS allocates free allowances to energy-intensive industry. This is known as “carbon leakage.”

This policy was set to be ramped down between 2026 and 2034… now free allocation extends through 2040 (with CBAM phase-in slowed, extending free-allocation phase-out to 2038).

This directly lowers compliance costs for steel, cement, aluminum, fertilizers, hydrogen and electricity production. With that said, 80% of free allowances are now conditional on having a decarbonization plan in place from 2031, with the final 20% contingent on demonstrated emissions cuts.

3. Market Stability Reserve Reforms

The Market Stability Reserve (MSR) is an automated mechanism designed to balance the supply and demand of carbon allowances. It adjusts auction volumes by absorbing excess permits when a surplus occurs or releasing allowances back into the market during times of scarcity.

When total allowances in circulation (TNAC) exceed the upper threshold (1 billion allowances), fewer allowances are released into the market in auctions. And vice versa. The lower threshold is roughly 400 million.

Four changes are set to take effect if this legislation is approved:

• A new, lower buffer from 2028

• Dynamic thresholds declining 4% per year from 2029

• EUA intake rate halved to 12% from 2028, compared to 24%

• Folding cumulative 2012–2023 aviation demand into the TNAC, reducing the lower threshold by 173 million allowances, which makes the reserve release allowances earlier

TLDR, this releases more allowances to the market sooner and dampens EUA prices. Once again, carbon-intensive sectors are set to benefit.

4. Buying 260 Mt of Article 6 International Credits

The proposal allocates up to 260 million allowances to be auctioned to fund the purchase of up to 260 million tons of high-integrity Article 6 credits between 2036 and 2040.

Around ~180 million credits represents the current demand in the voluntary carbon markets per annum, as of this post. So, depending on the price of the Article 6 credits the EU ETS would be buying…

That would equate up to 3x the current VCM demand levels over the span of four years. Now, this proposal is not finalized and we are talking about a plan that would take effect a decade from here.

But, it’s certainly not a negative for players in the VCM space.

5. Permanent Carbon Removals (BioCCS & DACCS)

The proposal raises the ETS emissions cap by 250 million allowances, auctioned 2031–2040 to fund purchases of CRCF-certified BioCCS and DACCS removal credits.

Bioenergy with carbon capture, and direct air capture. Biochar and other removal options have been left out, which has sparked debate…

At a €200 per ton baseline carbon price, procuring 250 million tons across 2031–2040 implies a €50 billion compliance market for domestic CDR, with annual government-backed spend approaching €10 billion by 2040.

There’s skepticism about how many tons the government would actually buy, since selling 250 million allowances does not guarantee being able to buy 250 million removal credits. CDR credits cost at least a few hundred euros per ton. We’ll see.

As with the other changes, we are talking about timelines over a decade out. But these do represent long-term boons for these industries and can increase market certainty when making investments in carbon capture projects.

6. Financial support for Decarbonization Investment

The ETS has raised roughly €260 billion since 2013, the vast majority flowing to national treasuries. Member states are already required to spend 100% of that on climate and energy purposes, but the Commission has found that reporting is opaque and enforcement is weak. It’s estimated that only about 5% of national ETS revenues currently reach industrial decarbonization.

To solve for this, the EU has established the Industrial Decarbonization Bank (IDB) with €100 billion in total funding drawn from ETS revenues. Divided into two phases.

Phase one will be financed through the sale of 400 million allowances from 2028 to 2030. This phase is expected to deliver around €30 billion in support to decarbonization efforts.

Phase two is from 2031 and onward, also financed with a further 400 million allowances to fund Carbon Contracts for Difference (CfD). These are essentially a carbon pricing floor/ceiling to establish financial certainty for decarbonization projects. De-risking investments.

The Innovation Fund remains in place, one of the world's largest funding programs for commercializing net-zero and low-carbon technologies. The fund is backed by roughly €40 billion through 2030. It covers up to 60% of eligible project costs to scale green technologies.

These funding mechanisms are great news for novel or generally uneconomic technologies like hydrogen, carbon capture, batteries, etc.

7. Minimum Green Spending Requirements

Member states will be required to spend at least 50% of their ETS auction revenues on investments that reduce emissions in ETS-covered sectors. Against a current average of roughly 5%, that’s a tenfold increase.

Revenues must be spent on clean energy/grids, low-carbon transportation, industrial decarbonization, or research and innovation.

Winners

I would separate the clear winners into three categories:

• Carbon-intensive industry

  • Longer access to free allowances, slowing the decline in the emissions cap, etc, benefit heavy emitters.

• Carbon credit project developers

  • Buying Article 6-certified carbon credits represents a significant demand increase. Granted, this would take place a decade from now. Government support still leads to more investment as certainty improves for investors.

  • Investment options:

    • Base Carbon (BCBNF) is the only company with an inventory of Article 6-certified credits, sourced from the cookstove project they financed in Rwanda.

• Carbon capture

  • CCS is a winner in the long term and a loser in the short term. Guaranteed demand from the EU ETS ecosystem and other means of financial support represent a large boon for the industry, but it’s set to take effect a decade from now. It still bolsters investments in the future, but weaker carbon pricing hurts present-day economics.

  • The primary issue with carbon capture is that… nearly all of these companies are private. Aker Carbon Capture was likely the best option, but that company was delisted in 2025. There are still a few…

  • Investment options:

    • Drax Group (DRXGY) operates a portfolio of renewable energy assets, mostly in the UK, including bioenergy and carbon capture. If the UK ETS is linked with the EU ETS, they may benefit from these changes.

    • LanzaTech (LNZA) has six operational plants across China, Belgium, and India using their licensed technology to convert CO2 into ethanol. Lanza also has the LanzaJet joint venture, an SAF plant operator. Be careful with this company as they have profitability issues and continue to raise money through private placements.

Losers

Lower carbon pricing leads to the losers you would expect:

• Carbon Allowance ETFs

  • KraneShares Global Carbon Strategy ETF (KRBN) is the most liquid and has seen a slow decline since 2022. The changes made under political pressure will continue to be bearish for EUAs. This represents 55-60% of the total allowances held in the fund.

• Carbon capture

  • A probable winner in the long-term via government intervention, and a loser in the short and medium-term.

• Green hydrogen

  • Economics have already declined and taking losses in both the USA and EU with shifting political attitudes. Not a good industry to be in, for now.

• Any capital-intensive and currently uneconomic projects

We just saw Air Products cancel their planned $4.5 billion hydrogen and ammonia facility with CCS in Louisiana. I expect that trend to continue with more projects getting canned as support wanes.

Again, I would wait before acting on any of these EU ETS changes as they have yet to be approved. We’ll have to see how they turn out next year.

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

Management initially planned on doing just that.

Abaxx received Approval in Principle (AIP) as a Recognized Market Operator (RMO) in September 2020 and as an Approved Clearing House (ACH) in August 2021.

Investors thought— all that was left now was to cross the Ts and dot the Is.

I remember listening to Robert Friedland’s first appearance on Smarter Markets where he pitched the company… and man, was I hooked.

A disruptor in a maturing industry dominated by the oligopolistic giants CME and ICE, both companies openly admitting they are avoiding setting up complex markets. Instead settling for creating more financially-settled futures contracts and taking bets on the increasingly competitive prediction markets. Among other distractions.

The big boys are asleep at the wheel… and here comes an experienced team of ex-Goldman executives with a history of spinning up new exchanges, along with thousands of contracts.

Creating a unique, technologically advanced commodity exchange and clearinghouse in an area of the world set to dominate growth trends over the coming decades (Singapore/Asia).

Exchanges are among the highest-margin, highest-valued businesses in the financial sector. Nearly all of Abaxx’s peers are worth tens of billions of dollars. The market cap was around $200 million CAD when I started buying.

In my mind, this was about as obvious a positive asymmetrical bet as you could possibly find in the stock market.

Then, the delays started.

In 2022, management announced there would be delays to build out the exchange’s software capabilities with Exberry and Baymarkets. Their entire tech suite has since been designed from the ground up.

This was initially planned for “Phase 2” of the exchange launch, but they decided to defer commercial activities and pursue further development.

In retrospect, this was obviously the right move and gave them additional optionality in how to build out the exchange and new futures products. At the time, it was not as obvious to us retail investors lol. With that said, I did ultimately trust the vision.

Most investors found the company's communication lackluster, and there was only so much Josh Crumb (CEO) could disclose on Twitter at the time…

After that, there were delays with funding rounds as Abaxx tried to bring in strategic investors. Then there was the CBOE uplisting debacle, followed by delays with onboarding market participants. The list goes on.

To be fair, much of this was ultimately outside of Abaxx’s control. There is a reason no one else has built a commodity exchange and clearing house in over a decade…

The exchange finally launches in June 2024. This marks nearly three years of intellectual torment and a return from a -50%+ illiquid drawdown in the summer of 2022.

Keep in mind, all this does is quell fears that the exchange would never go live. Abaxx still had to contend with the issue of spinning up new markets. Which is no easy task.

This required setting up initial block trades. Additionally, onboarding market participants who are not keen on expending resources unless it passes through the painfully inefficient bureaucratic sniff test.

There is barely any trading activity on the exchange in the first year.

It wasn’t really until March 2026 that we had much activity at all. Gold contract volumes started to explode higher.

And now we find ourselves celebrating the two-year anniversary of the exchange’s launch. Topping it off, a press release about how the exchange just traded 100,000 contracts for the first time.

Setting a new record with gold Singapore futures trading 116,052 contracts on the day.

Yongan International SG has also been onboarded now, a subsidiary of the largest futures group in China.

Abaxx Exchange currently has 11 independent software vendors connected, with 5 more in the pipeline; 7 clearing firms connected, with 14 more in the pipeline; and 22 brokers connected, with 10 more in the pipeline. The network is growing steadily.

They have launched 18 futures contracts across 7 markets. This includes LNG, gold, silver, nickel, lithium, wind, solar, and carbon markets.

The business is firing on all cylinders. The fundamentals have never been better. And yet the stock price has nosedived, like it did in 2022.

Why? A haneously inaccurate short report that was ripped to shreds by retail investors and Abaxx’s management themselves. I recommend watching the conference call on this subject if you haven’t already.

That and possibly the news out from the CFTC allowing perpetual futures, aka “perps,” to be offered by contract markets like Coinbase and Kalshi. More on this topic here.

I truly think it’s a shame many retail investors have likely been shaken out of holding Abaxx because of Viceroy’s short report. Legal action is being taken now, and we will see where that goes over time.

I don’t plan to go through the short report and refute points, as that has already been done by others, bless them. My point with this article is simple…

Many of the investors holding this stock have been in for years now. As long as I have, if not longer.

We have watched this company go from an idea— to a full-fledged exchange with contracts across various markets, a growing ecosystem of exchange participants, and setting new trading records every month…

You could argue the risk-reward has never been better with how much the stock has been derisked.

We are just starting to hit the exponential growth curve.

Why on Earth would you sell now?

I continue to hold, and I scoff at the pitiful lies short sellers have to sling out when trying to get people to sell out of a great business. Don’t give them the satisfaction.

They got their win, you gotta give it to them. But if they mistake that for a long-term trend, I think they will be in for a rude awakening.

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Disclaimer: I’m long Abaxx Technologies. I hold an equity position that was acquired at an average share price of $5.51. I was not compensated by the company to create this post.

The owner of Green Investing is not a licensed investment professional. Nothing produced under the Green Investing brand should be construed as investment advice. This content is made for entertainment and educational purposes. Do your own research.

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Transcript

Sunrun (RUN) is the largest residential solar and battery installer in the United States. Currently sporting a market cap of approximately $3 billion.

They just signed a deal with Tesla and Renew Home to create a “virtual power plant,” which essentially just means they are coordinating thermostats and batteries in thousands of homes to shift energy usage. Creating a source of energy for data centers during peak demand hours.

In this video I’ll provide an overview of SunRun’s investment case, the deal with Tesla, and my thoughts on how appealing the stock is.

Starting off with their business model, SunRun designs, installs, owns, and maintains residential solar and battery systems. It was founded in 2007 in San Francisco to carve a niche in the solar space. The problem they set out to solve was that most homeowners could not or would not pay $20,000 to $40,000 dollars upfront for solar panels.

So Sunrun pioneered the “solar-as-a-service” model, where Sunrun owns the solar panels on your roof and you sign a roughly 20+ year long agreement to buy the power they produce, usually at a rate below what utilities charge. The consumer gets a lower power bill with no upfront cost, and Sunrun gets a multi-decade-long, guaranteed cash flow stream. This model makes up 65% of their revenues.

The second portion of their business involves just selling the energy systems and hardware outright. This makes up a smaller but still significant 35% of the company’s revenues.

Building solar panels and batteries is obviously not a capex-light business, so they have been funding expansion through debt financing. As well as taking advantage of tax credits and other government benefits.

The Big Beautiful Bill is a problem for the solar industry as it eliminated the 30% Section 25D residential tax credit. Which covered 30% of the gross installation costs for the consumer. Since that was slated to end in December 2025, that pulled installation demand forward through that year. So, that could dampen future demand for some time.

With that said, this might’ve actually benefited Sunrun, since the Section 48E tax credit for leased and third-party systems remains in place. So, since Sunrun operates with the solar-as-a-service model and owns the solar panels themselves… this actually benefits the company. Their competitors are hurting far more than Sunrun is.

Additionally, Sunrun sports a 73% battery storage attachment rate in their installs, nearly three out of four customers have a battery. This plays into the partnership with Tesla and Renew Home.

All of those batteries can be used to create virtual power plants, allowing them to control when to feed that leftover electricity back to the power grid during peak demand hours. Customers have to opt-in for their battery to be used, but they do receive some cash for doing so. There’s a good chance many homeowners would take the additional cash flow. Sunrun has 1.1 million customers and the largest residential battery base in the United States. They and Tesla combined cover a large portion of the solar market share that can be utilized for powering data centers.

In total, this deal includes Renew Home’s 8 million theomostats and potentially over 16 GW of flexible capacity that can be sold back to hyperscalers. This should lead to higher revenue potential than the previous efforts to sell excess power to standard utilities. It’s difficult to saw how much of that 16 GW can actually be allocated immediately, the number is likely significantly lower. Analysts estimate around 4 GW of that capacity is actually firm battery supply.

Moving onto the competitive landscape of the solar industry… there are obviously a large amount of competitors. Granted, the industry is reaching a point of consolidation and some competitors are being driven out of the market over policy changes. SunPower, one of the oldest solar companies in the United States, went bankrupt in 2024.

The most relevant competitors for Sunrun are Tesla Energy, Freedom Forever, and Palmetto.

Tesla Energy is the most important rival and also, awkwardly, Sunrun’s biggest new partner. Tesla competes on the hardware side of the business while being an ally on the grid side. Tesla is the main threat, as their business can be subsidized by profits from automotives and AI. Especially if Tesla were eventually merged into SpaceX, along with Elon’s other companies. Meanwhile, Sunrun is just a pure-play in the solar industry.

Freedom Forever and Palmetto have both been gaining market share.

So, with an industry that has various competitors, does Sunrun have any real moat? Not really. The hardware is commoditized; any solar developer can offer the same long-term financing model.

With that said, being the largest operator in the space does give them economies of scale for financing and operational cost reductions. Having the largest customer fleet of residential solar panels also gives them switching-cost benefits now that so many homes have already been serviced.

I don’t find either of these moats particularly compelling, but they are worth mentioning.

Sunrun has roughly 238.5 million shares outstanding as of March, 2026. This is a single class of common stock so the voting and share structure is simple.

In terms of dilution, over the last year, they diluted roughly 4% since the previous share count in March, 2025 was 228 million. So, they added 10 million shares over the span of a year. Not surprising.

There are currently around 3 million options outstanding, with a few million RSUs being granted per quarter. The company does issue some convertible senior notes as well, so that debt can convert into additional diluted shares. Overall, not a crazy level of dilution from what I’ve seen.

Insiders only own 2% of the company and pretty much consistently sell stock every single month. Which is not what we want to see as shareholders. Not exactly instilling confidence. At this point, the stock is mainly owned by institutional investors, which make up 93% of the investor base via share count.

When looking at the Q1 financials, revenue was $722 million, up 43% year over year and well above analyst expectations. Net income attributable to common stockholders was $167 million dollars. Gross margins came in around 32%, though operating margin was still slightly negative, at -1.7%. That tells us the profitability to common holders is being driven heavily by the financing and tax-credit structure rather than by clean operating profits.

Because they recognize the present value of future contracted cash flows from new customers, they appear profitable even as they have negative operating margins and free cash flows. The additional costs of marketing, G&A, and investing in the production of new solar panels necessitate taking on more debt to continue expanding.

On the balance sheet, Sunrun ended the quarter with $679 million in cash and total assets of $22.8 billion, including $17 billion worth of energy systems. Total debt was about $14.8 billion, $18 billion in total liabilities. $1.3 billion of that is current liabilities, so due in the next year.

So, overall, their gross margins have been improving; they’re seeing higher battery storage attachment rates as well. Revenues have been increasing nicely, benefiting from the rush to build out solar before certain government incentives ended. On the flip side, the debt profile is pretty significant, and this industry is really being propped up by tax credits and other incentives that are standing on shaky ground with Trump in office. That’s something to watch out for…

In summary, we have risks galore for this company. Capital-intensive, competitive industry, massive debt burden, profitability relies on subsidies that could be revoked at any time, no real moat, low insider ownership and consistent selling. Even if they benefit from the hype around data centers and generate some higher cash flows from selling additional power to them… I would probably never be interested in a company like this.

So, no, the flashy headline about providing power to data centers with Tesla did not sell me.

But I am just here to provide my two cents and not to provide any financial advice. So, interpret the situation how you wish. Either way, thanks for watching.

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

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Transcript

The closure of the Straight of Hormuz is already leading to jet fuel shortages in Asian countries, as a majority of the energy exports from the Gulf states did end up in Asia. That’s already bad enough. But Europe is already starting to see disruptions as well.

Airlines in Italy and the UK are already starting to ration fuel or cancel flights. Just recently, Lufthansa, the second largest European airline by passenger numbers, canceled 20,000 flights to ration fuel.

This is just the beginning…

Let’s discuss just how bad the fuel shortages are starting to get, and possible investment options to benefit from the chaos…

Everyone is talking about oil prices oscillating around $90 to $100 per barrel in the futures market, but jet fuel markets are being hit even harder. We’ve already seen jet fuel prices double to nearly $200 per barrel, according to the International Air Transport Association (IATA).

Oil refining capacity was already tight before the war started… and this crisis is only making things worse. Kuwait is a major producer of jet fuel, especially for Europe. The UK gets roughly a quarter of its aviation fuel from Kuwaiti sources. Kuwait is, of course, one of the Middle Eastern countries getting hit hard by Iran’s retaliatory strikes.

Diving into who got hit the hardest… it’s obviously Asian countries since 80% of the oil that transits the Strait goes to Asian buyers.

Vietnam Airlines has suspended some domestic routes indefinitely. Korean Air went into emergency management mode. There are hundreds of daily flight cancellations across Asia and the Arabian Gulf states.

China ordered all major domestic refiners to stop accepting new fuel export contracts.

Australia’s prime minister went on national television to urge citizens to take public transit to preserve fuel, both Australia and New Zealand have lucked into receiving some fuel shipments. But reserves are still only set to last around a month.

Things are getting dire in the region. and Europe is next.

The UK is likely the worst off. They’re the most exposed major economy in Europe. Kuwait has an outsized market share in UK jet fuel supply.

British Airways’ parent company IAG reportedly has five to six weeks of fuel reserves before shortages start affecting operations. That was reported around April 1st. So we’re looking at serious issues by mid-May.

Ryanair’s CEO estimates… if 10%-20% of fuel supply disappears during peak summer, airlines across Europe will be forced to cut capacity. He predicted 5%-10% of flights would be canceled this summer if the Strait stays closed. We will see how the numbers play out.

Either way, we know how jet fuel prices are looking, and as long as the war continues… it seems unlikely that prices would come down. At least in the short-term. So, what are our investment options?

When looking at the space, the reality is there aren’t any pure-play, literal jet fuel refining stocks that produce primarily jet fuel itself. In the traditional sense.

Jet fuel, which is typically kerosene, is only around 10% of the average oil refinery’s output. Kerosene is a by-product of the distillation process used to produce refined gasoline and diesel.

The U.S. refining record for the percentage of the end product being kerosene was only 11%, in 2024. Jet fuel prices skyrocketing via shortages will still benefit them, but if you’re going to take advantage of a trend… the best stocks tend to be pure-play producers. That’s why I always try to prioritize straightforward investment options with a relatively un-diversified product mix…

Interesting Oil Refiner Play

Before we talk about those options, if you want an established refiner to invest in, Par Pacific (PARR) would be an interesting stock to look into. Market cap of $3 billion.

They are estimated to have jet fuel sales revenue impact their product mix more than other refiners. Granted, it’s still not a crazy percentage. Jet fuel production could be up to 20%+ of their revenue.

Par’s Kapolei refinery produces 94,000 bpd, and is the largest and most complex refinery in Hawaii. It supplies roughly a third of the state’s refined products. Par has historically disclosed a Hawaii yield of roughly 67% combined distillate and low-sulfur fuel oil, with jet fuel being the single largest component of that distillate pool rather than diesel (which is the case for most mainland refiners).

Jet fuel likely accounts for 30–40% of Kapolei’s product yield, or roughly 28,000–38,000 bpd from that refinery alone. Which is an extraordinary concentration compared to the approximate 10–13% industry average. The Kapolei refinery was specifically configured for island demand in Hawaii, which calls for jet fuel, as tourism is such a large part of their economy.

Par also has a refinery in Tacoma, Washington, that refines 42,000 bpd, with a pipeline directly to Joint Base Lewis-McChord (formerly McChord Air Force Base). Other refining assets include one in Wyoming that processes 18,000 bpd and another in Montana that refines 63,000 bpd.

They also have some sustainable aviation fuel projects in the works. So, they are a traditional refining play that will do well in this pricing environment. Since oil prices are rising across the board, but they also have a slightly higher exposure to jet fuel price increases.

If your investment focus is purely on who will directly supply the European markets, your main options are really just the diversified oil giants. So, in my opinion, that does dilute the extent to which the share price will be impacted by jet fuel pricing itself. But if you’re interested in O&G majors with significant refining operations in Europe, you’re looking at TotalEnergies, Shell, and BP.

Besides buying oil refiners like Par, the other clear investment options would be sustainable aviation fuel (SAF) producers. SAF is produced from renewable waste or biomass and can be blended into traditional jet fuel. The price of SAF will rise accordingly, moving in tandem with traditional petroleum-based fuels.

Common examples of fuels used to make SAF would be cooking oils, ethanol, or wood waste.

SAF Producers - Investment Options

Investors can choose from three varying large public players in the SAF industry…

1. Neste is the world’s largest SAF producer with production capacity on three continents. They have a U.S. ADR with the ticker NTOIY and a market cap of $24 billion. They have SAF facilities or new projects in Singapore, the Netherlands, Finland, and California. The goal is to have renewable fuels production capacity targeting roughly 2.2 billion gallons annually by 2027, by far the highest SAF production in the world. They should benefit nicely from increasing SAF prices as the war with Iran rages on.

2. Calumet, ticker CLMT is the second player on our list. $2.6 billion market cap. Its Montana Renewables subsidiary is North America’s largest SAF producer at ~30 million gallons/year, with the MaxSAF expansion on track for mid-2026, boosting capacity to 150 million gallons/year. Set to scale to 300 million gallons by 2028. A $1.4 billion DOE loan guarantee was used to back the expansion. Calumet also operates specialty products (oils, solvents, waxes), so it’s not purely jet fuel, but SAF is its primary growth engine.

3. Gevo is the third stock, with a market cap of $430M. They are building the world’s first large-scale ethanol-to-jet fuel commercial facility (Net-Zero 1 in South Dakota), backed by another $1.5 billion conditional DOE loan guarantee. It has contracted demand for ~350 million gallons/year of SAF. Gevo achieved positive adjusted EBITDA in Q2–Q3 2025 from its ethanol and carbon capture operations, but is pre-revenue on SAF, making it higher risk.

There are some other pre-revenue companies that are looking to ramp up operations, but it would be preferable to invest in stocks that can actually take advantage of price increases over the next year and beyond. So, these are the top three I would find interesting if looking for a jet fuel investment option.

The Strait of Hormuz closure since early March 2026 has removed roughly 300,000 barrels per day of jet fuel from European supply chains, about 50% of the continent’s imports. Bloomberg estimates Europe has enough jet fuel through April, but we could see serious shortages in May. As we already discussed, various airlines are already starting to cancel flights…

It seems like we are no closer to seeing the Straight of Hormuz open as negotiations have backfired again and ships are being attacked for trying to leave. So, the situation is starting to look bleak with few options left to get the Straight back open. I am not optimistic.

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

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Trump’s New Budget Proposal

President Trump has asked Congress for a $2.2 trillion budget for discretionary spending in 2027. Which is set to include a $1.5 trillion allocation for the military. Which is a roughly 40% increase over our previous defense budget in 2026.

The President was even saying he wanted to shift to more of a wartime economy. A bit hyperbolic considering during WW2, 90% of the government’s budget went to military spending. Nowadays, it is less than 20%.

But if you’ve ever seen the memes on Twitter of people saying Trump is signing the “I Hate You All, Die” bill into law… that is quite literally what this is.

Because Trump is proposing massive cuts to the EPA, NIH, and spending for various health and environmental agencies.

Whether the cuts are even justified or not is one thing… but it’s a horrible look to slash major discretionary spending to funnel it all into funding an extremely unpopular war effort.

That $1.5 trillion breaks down to $1.1 trillion for base defense spending, and another $350 billion that the White House wants to get through budget reconciliation.

That is ON TOP of the $200 billion the Pentagon wants for the war with Iran already. That $200 billion is another separate budget item.

So, the budget is more like $1.7 trillion. The U.S. national debt is currently $39 trillion by the way.

Budget Winners

Let’s review what the budget increase will be allocated for, and what will be cut… including which stocks may benefit from these initiatives:

1. Shipbuilding. The new budget requests $65.8 billion for naval construction. For context, Congress approved $27.2 billion for shipbuilding in 2026. So we’re looking at more than doubling the shipbuilding budget. This includes 18 new battle force ships and 16 non-battle force vessels. Trump is calling for the build out of a “Golden Fleet,” including initial funding for new “Trump-class battleships.”

   1. General Dynamics (GD) is a key beneficiary as a large defense contractor, with a dedicated division to building nuclear-powered submarines and auxiliary ships for the U.S. Navy. They just secured a $1.27 billion contract modification for Virginia-class submarine support just days ago.

   2. Huntington Ingalls Industries (HII) is the largest shipbuilder for the U.S. government and the largest pure-play investment option. Huntington designs and builds amphibious assault ships, surface combatants, as well as nuclear submarines and aircraft carriers.

2. The Golden Dome. This is Trump’s signature defense initiative, a hemispheric missile defense shield designed to intercept hypersonic missiles, ballistic missiles, and even threats launched from space. The full program is estimated to cost around $175 to $185 billion over its lifetime. The 2027 budget allocates $17.5 billion for the Golden Dome in this fiscal year. But most of the Golden Dome funding will come from the $350 billion funding effort in a budget reconciliation bill. So, funding is dependent on less concrete sources right now. If that bill falls apart, so does Golden Dome’s timeline. Northrop Grumman (NOC) would be the biggest winner in a Golden Dome build-out. They are the dominant player in autonomous and space-based surveillance systems.

3. Munitions and weapons procurement. The budget allocates roughly $760 billion for weapons development and procurement combined. That’s about $260 billion for procurement and $220 billion for research and development in the base budget, with another $280 billion layered in through reconciliation. This benefits all the standard military defense contractor names like Lockheed Martin, RTX Corporation, etc.

4. Military pay raises. The budget includes a 5%-7% pay increase for service members, with junior enlisted members, those ranked E-5 and below, receiving the full 7%. They are hoping this will help with recruitment and retention, which have been issues.

5. Nuclear modernization. The National Nuclear Security Administration (NNSA) receives $32.8 billion in this budget, a $3.6 billion increase from 2026. This money goes toward developing new warheads, modernizing existing ones, and building technology for future naval nuclear systems.

6. Critical minerals. The budget includes provisions to make what the White House calls “transformative investments” in the domestic critical minerals industry, fixing what they describe as longstanding shortfalls in the National Defense Stockpile. There’s an explicit focus on reducing dependence on foreign mineral production, which is really code for reducing dependence on China.

   1. MP Materials (MP), USA Rare Earths (USAR), and others are key beneficiaries here. I made a previous video on how to invest in the U.S.’ efforts to diversify critical metals supply chains… and I’ll link one in the description. That video listed more investment ideas in the rare earths sector.

Budget Losers

Those are the six main trends or large budget items from Trump. Now, let’s talk about the other side, to partially offset this defense budget surge… the White House is proposing a 10% cut to non-defense discretionary spending. $73 billion in total cuts.

The Environmental Protection Agency (EPA) is getting cut in half. A 53% reduction. That includes eliminating the Superfund program, slashing state revolving funds for clean water and drinking water infrastructure, and killing all environmental justice programs. Not sure how much the environmental justice programs matter… but cutting funding for clean water infrastructure is a bad look.

National Institutes of Health (NIH) is taking a $5 billion hit, bringing its funding down by about 12%. Three individual institutes get eliminated: the National Institute on Minority Health and Health Disparities, the Fogarty International Center, and the National Center for Complementary and Integrative Health. The White House justification is that NIH “broke the trust of the American people with wasteful spending, misleading information, and risky research.” This is a direct callback to the 2020-era controversies surrounding gain-of-function research.

The National Science Foundation takes a 55 percent cut… from $9 billion down to $4 billion. AI and quantum computing research survive with about $886 million combined, but virtually everything else gets slashed. The budget explicitly targets what it calls “woke social, behavioral, and economic sciences.” The Department of Education sees significant cuts, including elimination of the Teacher Quality Partnerships program, $1.5 billion in cuts to the Office of Career, Technical, and Adult Education, and $354 million in cuts to minority-serving institution programs.

LIHEAP, the Low Income Home Energy Assistance Program, is being eliminated. That’s $4 billion that helped about 6 million Americans afford their utility bills. So, for example, poor Americans might go without heating in the winter, thanks to this. The administration has tried to kill this program six times now. Congress has saved it every single time so far. Other efforts for low-income Americans, such as community services grants or the Job Corps, are also being eliminated.

NOAA takes a $1.6 billion hit, with the entire Office of Oceanic and Atmospheric Research proposed for elimination.

On paper, NASA is getting a budget cut… but the budget actually requests $18.8 billion in discretionary spending for NASA, a 23% increase. In reality, Trump just wants to defund all Earth science and climate monitoring satellite programs. So, he is targeting any climate change efforts.

FEMA is taking a $1.3 billion cut to non-disaster grant programs. The World Health Organization and the Pan-American Health Organization will be defunded entirely. Biden-era infrastructure law funding for environmental programs is seeing $15 billion permanently canceled and another $4.5 billion repurposed.

Various departments are receiving broad cuts, The Department of Agriculture is being slashed 19%. Housing and Urban Development, 13%. Interior Department, 12%. Health and Human Services, 12% overall.

And the cherry on top is that the budget includes a $10 billion allocation for a mandatory fund to beautify Washington D.C. So, the President is cutting funding for a variety of beneficial government programs and signaling how much he truly doesn’t care… by funding decadence for the political class. Truly insane optics.

Of course, it’s not guaranteed that all of these changes will actually make it into Congress’ decisions. But we’ll have to see what ends up in writing. Obviously, anything reliant on environmental grants, EPA funding… environmental services, or water infrastructure could get hurt by this. Biotech as well, depending on how it plays out.

For example, a company that I have mentioned in the past, Zefiro Methane (ZEFI) is hurt by this because Trump is pausing or canceling the Biden-era funding for plugging leaking O&G wells. Much of that funding comes from O&G companies paying for the cleanup, or efforts by local governments. Seems like Trump doesn’t care about any of the negative health implications from anything he is doing and if fully prepared to just fund war efforts. So, that’s how this is going.

Shipbuilders, military contractors, and rare earth metals mining companies stand to gain from the initiatives Trump wants to put in place.

But yeah, I’ve already talked about rare earths in previous videos and military contractor names are well known, but I could make a video specifically on possible shipbuilding investment options if people wanted to see that. Either way, we’ll see how many of these changes actually make it into the 2027 budget.

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

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Call Notes:

• Now designing oil contracts, new precious metals (silver, palladium, etc), solar contracts, and uranium.

• 1500 ADV (mostly just gold) in Q4 2025. Now as of March, we are at 11,500 ADV. Trading is ongoing across all contracts, with most growth occurring on gold and LNG contracts currently.

• Overall growth of futures ADV so far in 2026 was +145% relative to Q4, 2025.

• LNG volumes have increased 84%, with a total of 59k contracts traded over GOM and NPA. The NPA contract represents over 40% of JKM’s volume, demonstrating the market’s desire for a viable LNG contract alternative.

  • Check out the Abaxx Exchange Data Tracker created by @nobenchmark

• Tends to take 3-5 years to build out a new commodity futures market to maturity, so it does take time. But these are extremely high-margin products; their software suite is the same. These are all capex-light forms of revenue generation once the design work is finished.

• MarketOS: ID++ suite of verifier, sign, messenger, and drive. Go-to-market timelines will emerge soon.

  • Three streams of revenue:

    • Platform access fees for all of the products above

    • Transaction fees on the platform

    • Basis-point fees on collateral

• This software platform can be used by any central counterparties (CCPs), prime brokers, or collateral managers in broad financial trading ecosystems. This applies to both traditional and tokenized assets.

• Digital Title pilot results:

  • Physical gold: Vaulted gold at Abaxx Spot was converted to transaction-ready collateral that could be used to finance margin trading in futures markets. Only possible with Digital Title providing documented and verifiable T+0 ownership of said gold.

  • Money market funds: Successfully collateralized a bilateral transaction of approximately $200k BMO Money Market Fund shares. These shares were transferred instantaneously upon margin call.

  • In-transit commodities: Testing in progress with Minehub Technologies for Digital Title usage on bills of lading for collateralization to be used in trading.

• Abaxx Clearing is working on integrating MarketOS already, subject to regulatory approval.

• First commercial licensing agreement for MarketOS usage is in advanced negotiations with a “traditional financial institution.”

• Recognized losses of around USD$30 million over 2025, slight 5-10% deficit increase in Q4 2025.

• The management team reduced 2025 year-end equity compensation by 20%.

• Josh is forgoing all of his year-end equity compensation in 2025 to leave more room to compensate a growing team… wow.

• They have CAD$15 million left in cash, CAD$35 million in marketable assets, so they have a cash runway at least through the end of the year.

• Current trading on the exchange is almost entirely just from Singapore, Thailand, with new Middle Eastern and Indian trading firms gaining access recently as well. Almost no trading from the United States, China, UK, etc. Onboarding is in progress with firms in all of these regions now.

• One leading U.S. bank FCM is looking to connect to the exchange, another two looking to join through a carry broker.

• Trayport connection has prompted three large banks to start onboarding on the exchange.

• In summary, there are a variety of clearing firms still working on connecting to the AEX.

• Josh is beginning to tease Nasdaq and SGX listings on Twitter. The company finally seems to be approaching that point.

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Transcript

Anthropic, the artificial intelligence company behind the Claude AI models, is planning to IPO this year. There’s no set date yet, but estimates are sometime in Q3 or Q4 of 2026. They might raise as much as $60 billion when they go to market.

The company was founded by seven former OpenAI researchers, led by the siblings Dario Amodei and Daniela Amodei. They had disagreements with OpenAI on safety and commercialization, thus Anthropic was born.

As of the most recent funding round in February, Anthropic is currently valued at $380 billion in private markets. Investors included Amazon, Google, Microsoft, Nvidia, and a variety of equity and sovereign wealth funds.

AI is obviously still a hot industry, and institutional and corporate investors want in just as much as retail will when this thing finally goes public.

Business Model

Diving into their business model, if you know anything about AI, their main path to revenue is by selling subscriptions:

• 70%-75% of revenues come from API consumption, usage in corporate/developer environments with customers paying-per-token for model access.

• 10%–15% of revenues comes from Direct-to-Consumer subscriptions (Claude Pro/Max)

• And another 10%–15% of revenues come from specific enterprise partnerships

Keep in mind, Claude has only recently been in the news after their falling out with President Trump over safety guidelines Anthropic was not willing to budge on. Most consumers had no idea what Claude was until then. This company has been focused on B2B, with 70%+ of its revenue being generated from enterprise customers.

OpenAI’s ChatGPT is, of course, the AI model everyone tends to think of when they think of AI since it became a phenomenon in 2022.

Anthropic has over 300,000 business customers and 70% of Fortune 100 companies are Claude customers.

The business model is obviously capex-intensive. Training frontier AI models costs billions per run. They have to build costly data centers. Anthropic has committed to roughly $80 billion in cloud infrastructure investments, buying more cloud services and computing power from big tech firms through 2029.

They have also committed to investing $50 billion to build AI data centers across the United States, including facilities in Texas and New York.

The company is unprofitable and burned approximately $3 billion in cash in 2025 and does not expect to reach cash-flow breakeven until 2028. Gross margins are currently around 50%, with management projecting as high as 77% margins by 2028 as they scale and renegotiate compute contracts.

Their revenues are a mixture of recurring subscriptions and usage-based consumption. Subscriptions give them some revenue predictability, but the majority of their revenue is from usage, which can be volatile. The enterprise focus does provide stickier revenue dynamics than a more consumer-focused model like ChatGPT.

Growth Opportunities

Anthropic has proven it can consistently release new features for consumers. Their current best model, Claude Opus 4.6, has consistently ranked as the top model in a competitive industry. Granted, these rankings change all the time, as these AI firms are constantly releasing new models.

The recent releases of Claude Code, a command-line coding agent, and Claude Cowork, their daily-task productivity agent… have impressed consumers in the space. In less than a year, Claude Code hit $2.5 billion in annualized revenue. Business subscriptions for the service have quadrupled in the first couple of months in 2026.

Also, something that just happened recently, we saw Anthropic make the mistake of leaking the code for their Claude Code application. Not the code for their actual AI models, but the Claude Coding service.

The issue was caused by human error, when someone over at Anthropic left a source map file, used for debugging, in a public registry that allowed developers to reconstruct the source code. Massive blunder by the company. No customer data was leaked, but throwing your code out for everyone to see does not help you maintain a lead over the competition. But I digress…

Claude is also the only AI model available across all three major cloud platforms. AWS Bedrock, Google Cloud, and Microsoft Azure. No other model developer has that level of distribution right now.

Anthropic is estimating that global AI spending will hit $2 trillion in 2026, and the company is positioned to capture a disproportionate share of that through its enterprise sales focus.

Anthropic’s management team has been projecting:

• $20 billion to $26 billion in revenue for 2026.

• Upwards of $55 billion in 2027.

• Upwards of $148 billion by 2029.

It’s difficult to know what products they might release to increase revenues further, the industry is constantly evolving. But even just current growth rates with their various subscriptions and model usage is more than enough on its own. Everyone knows AI is seeing insane growth.

Anthropic is still in the early innings of penetrating European, Middle Eastern, and Southeast Asian enterprise markets. Any region, really.

The company’s current annual recurring revenue (ARR) as of this month… is running at approximately $19 billion, according to Bloomberg. That is up from $9 billion at the end of 2025. So, their ARR is rising rapidly as Claude’s popularity has grown. Up 111% in just three months…

If you assume this $19 billion run rate is going to stick, or grow, then Anthropic is currently trading at nearly 20x revenues. Given their latest funding round, which valued them at $380 billion.

This valuation assumes they’re going to continue running incredible growth rates. And it’s hard to see how they won’t. Who knows what market cap the IPO might be placed at, but no doubt it will be pricing in perfection. Any slip-up or market crash, and investors will get punished.

Competitors

A key aspect of investing in the AI industry and Anthropic, is going to be… who wins the AI race? The competitive landscape has 4 primary competitors remaining.

OpenAI is the most direct competitor. With a projected $29.4 billion in full-year 2026 revenue and 800 million weekly users, using ChatGPT. OpenAI has a larger consumer business and higher overall revenue.

However, OpenAI is burning cash at a far higher rate… projecting $74 billion in operating losses through 2028. They are not expected to reach profitability until 2030, two years after Anthropic’s target.

OpenAI was recently valued at $850 billion in private markets. The key competitive difference between these two is that Anthropic leads in enterprise adoption. Anthropic has roughly 40% market share versus OpenAI’s 25%, while OpenAI dominates the consumer side of the market.

Google DeepMind is the second major competitor, with their Gemini models. Google does have the advantage of massive existing assets in cloud and search infrastructure. Google holds roughly 21% enterprise AI market share. Google has also invested $3 billion in Anthropic and provides TPU access, so the relationship is both competitive and cooperative.

Meta is number three. Meta does not sell model access via API but has become the primary force behind open-source AI through its LLaMA models. Meta’s strategy is to commoditize the base layer of AI, aka the model itself, and make AI access cheap or free.

Instead, the value would then shift to who owns the applications built on top of the open source models. This would directly undermine the business case for paid API access from companies like Anthropic.

If open-source, free models can do most of what Claude can do over time through open development… then Anthropic has to do more to justify their subscriptions, right.

xAI is the last competitor worth mentioning, via Grok. xAI has raised significant capital and recently merged with SpaceX ahead of its own expected IPO. It has less enterprise traction but benefits from Musk’s distribution network through Twitter.

There are a few Chinese players, some in other regions, but it’s clear that the American tech companies are the ones with all of the best models right now.

Who gives up, out of these four companies, could cede billions of dollars in revenue to the other players… so it will be interesting to see if any other companies drop out of the AI race.

Meta is in their own world, but it’s possible that we see either OpenAI or xAI have to drop off because of the massive capex required to compete.

Granted, it seems like these companies have endless levels of capital to access from private equity and corporate investors.

So, it’s hard to see any of them drop out unless liquidity dries up.

Competitive Moat

Moving on, we have to consider how much of a moat Anthropic really has

In theory, barriers to entry help them avoid new competition entering the industry by now, investing billions in building new data centers or computing power is simply not viable for most companies.

With that said, they are in a cutthroat competition with the remaining tech companies. So, that’s not much of an advantage.

Switching costs can be a pain for enterprise and retail consumers, once you’re using a model in all of your workflows… it’s a hassle to switch everything over. But that can be done. And the U.S. government is. They are swapping over from Claude to ChatGPT.

Overall, the industry is firmly in oligopoly territory, so the AI market is currently a tit-for-tat between the top companies on who has the best model. And the sector is constantly evolving over time.

As consumers, that competition works in our favor, but as investors, it leads to a brutal competitive landscape.

Risks

Diving into the risks of investing in Anthropic, I think it should be pretty obvious…

Capital-intensive data centers are burning billions in investor capital. All of these companies are running large losses. The AI arms race requires continuous massive investment in compute, and any slowdown in revenue growth could force Anthropic to raise more capital.

As we just went over, competition is fierce from both open-source and walled-off AI models, granted the industry is finally starting to consolidate.

And then the primary risk is probably some form of major government crackdown on Anthropic specifically or the AI sector at large. Potential copyright infrigement issues are still unsolved. We know Trump wants an AI legislation moritorium, but anti-AI sentiment has been growing… so. That’s something to consider.

In summary, you might struggle to find any other companies in the world that can grow as quickly as the AI model developers. Every big tech company you can think of is all in on this industry, besides Apple lol.

Investors will undoubtedly love what they’re seeing. I’m sure many retail investors are foaming at the mouth to get a chance to buy some of these pure-play AI companies. But the risks are certainly there, and you could see some black swan absolutely blow these companies to smithereens after they IPO.

With that said, I am under the assumption that they will reach profitability in the future. Much like Uber has relatively recently. It just took the industry quite some time to mature to that point. Anthropic is targeting 2028, and it wouldn’t surprise me at all to see them reach profitability.

I don’t tend to invest in stocks this large regardless, but especially not when the global stock markets and financial economy are in a dire situation thanks to the war in the Middle East. Either way, Anthropic should be dropping their S-1 form relatively soon, which would give us more info on their operations. So, investors will have to wait for that and see what they think.

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

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SpaceX IPO

SpaceX is about to be the biggest IPO in history, potentially raising as much as $75 billion at a $1.75 trillion valuation. The timing of the IPO is unknown, but estimates suggest it will happen in the summer.

They plan to raise more than double the previous record holder, Saudi Aramco, which raised $29 billion during its IPO in 2019. The world’s largest oil producer, almost entirely state-owned in Saudi Arabia.

Business Model

Let’s talk about what we know of SpaceX’s business. We don’t have an S-1 to get concrete details on their financials, or some other important info. For now, we can cover what has circulated in the news or analyst reports.

As you likely know, Elon Musk founded SpaceX in 2002 with one central goal: dramatically reduce the cost of space access, and eventually make humanity multi-planetary.

So, when many people think of SpaceX, they often think of the reusable rockets like the Starship and Falcon. You’ve probably seen the video of the spaceship landing back into the arm grabbers…

But the majority of their revenue is actually generated by Starlink, their constellation of roughly 10,000 satellites, that serves internet access to more than ten million broadband subscribers in over 160 countries. The satellite internet division is their true cash cow. PitchBook estimates Starlink generated roughly $10.6 billion dollars in revenue in 2025, representing about 67% of total company revenue at a 54% EBITDA margin. A type of margin you wouldn’t typically expect from what sounds like a capex-intensive business.

SpaceX, like Tesla, has substantially reduced costs through vertical integration. They design, manufacture, and launch their own satellites… and operate the entire network and supply chain.

That plays a key role in their second business line, the launch services. Putting spaceship payloads into orbit for government and commercial customers. Launch revenue was an estimated $3.5 billion in 2023 from Falcon 9 and Falcon Heavy missions, with individual Falcon 9 launches running about $62 million each and Falcon Heavy at around $125 million.

SpaceX is one of the largest U.S. government and military contractors, including a $5.9 billion Pentagon deal for 28 national security launch missions through 2029, and an $843 million NASA contract to deorbit the International Space Station (ISS)

SpaceX also holds broader contracts for commercial crew flights and cargo resupply missions to the ISS, as well as for the Artemis III Human Landing System using Starship.

So, much like Palantir, SpaceX will have incredibly sticky revenues from government contracts for the space launch business. And subscription revenues from residential or commercial customers for Starlink internet services.

Starlink also provides services through Starshield, similar to Starlink but for government or military applications.

This is a capital-intensive business for sure… but this level of recurring revenue, from subscriptions and contracts, is like investor heaven.

In total, PitchBook and Morningstar estimate SpaceX generated approximately $16 billion dollars in revenue and $7.5 billion in EBITDA in 2025. Revenue is expected to hit $22 to $24 billion this year. 50% potential revenue growth for a business at a nearly $2 trillion market cap is amazing. Granted, at these numbers, with a $1.75 trillion IPO, that means SpaceX could open trading around 95x times revenue and 200x times EBITDA.

Incredibly expensive, but if the markets over the last decade have proven anything, it’s that valuations can remain overextended for many years. So who knows. Companies like Palantir and Tesla have done well, overall, regardless of what the markets would traditionally think…

Their revenues are set to grow dramatically thanks to Starlink, and the kicker will be their direct-to-cell offering. DTC was initially rolled out in 2025 with T-Mobile, providing access directly to unmodified phones, without any need for a modem. The service now extends to AT&T and Verizon customers as well. This new piece of the business already has over 6 million monthly customers across 22 countries.

SpaceX’s deal with EchoStar, valued at $19 billion in total through 2027 in cash payments and stock, granted them access to Echo’s spectrum-platform and licenses to offer increased access to DTC customers across the globe.

As SpaceX enters more markets and expands coverage around the world, they have large potential markets to enter in developing economies. So, growth won’t be slowing down any time soon…

PitchBook projects the subscriber base could reach over 1 billion users by 2040. Even a fraction of that number translates to significant growth. So, the business is firing on all cylinders and has hit the growth phase of its lifecycle.

TAM and Competition

The World Economic Forum and McKinsey project that the space industry will be valued at $1.8 trillion by 2035, roughly tripling from current levels. Novaspace projects it will $1 trillion by 2034.

And there are various other estimates of course, they all point to one thing, substantial growth. And with substantial growth potential, substantial TAMs, comes competitors.

In launch services, Blue Origin is the most direct peer. Jeff Bezos’s company launched its New Glenn heavy-lift rocket in January 2025.

The United Launch Alliance, the Boeing-Lockheed Martin joint venture, operates the Vulcan Centaur rocket, which gained Space Force certification in early 2025. ULA has deep government relationships and receives roughly one billion dollars in annual military subsidies, but it cannot compete with SpaceX on price. Boeing and Lockheed will likely be totally focused on securing government contracts, but SpaceX has the clear advantage in both cases.

Rocket Lab (RKLB) is the most obvious public competitor for SpaceX. Its smaller Electron rocket has demonstrated real launch reliability, and the company is developing a medium-lift Neutron rocket, competing with SpaceX on smaller payload and satellite missions.

In the satellite broadband space:

1. Amazon’s Project Kuiper (Kyper) is on the rise. Amazon has committed $10 billion dollars to deploy 3,200 satellites by 2029. Kuiper has the capital and logistics infrastructure of Amazon behind it, but it’s years behind Starlink, which already has around 10,000 satellites in orbit.

2. OneWeb operates about 640 satellites with a focus on enterprise and government clients.

3. The EU’s IRIS program operates a network of 300 satellites to reduce reliance on foreign competitors for broadband services.

So, there is some competition for all aspects of SpaceX’s business, but they have a massive first-mover advantage here. No competitor out right now can match its vertically integrated model, where it launches its own satellites on its own rockets at its own cost structure.

A Wide Moat

This brings us to the question of how strong SpaceX’s moat is… and It is probably one of the widest existing moats in history. But competitors with vast resources, like Amazon, or Boeing and Lockheed, can crack it eventually.

No other company has figured out reusable boosters and this level of vertical integration. So, SpaceX’s launch costs are around 70 to 90% below what competitors can offer right now.

Of course, building and flying rockets requires billions in capital investments, years of development, and regulatory approval from government agencies. SpaceX launched its first rocket 4 years after the company was founded in 2006. And the first successful launch was 2 years later in 2008.

Switching costs are also high for government customers. If the U.S. Pentagon is relying on Starlink for battlefield connectivity or SpaceX for national security needs, then they are unlikely to replace that infrastructure.

In summary, you’re looking at cost leadership, regulatory barriers, and switching costs that put SpaceX in a great position, at this point.

Risks

Of course, first off, you have Elon Musk. He is the CEO, CTO, and Chief Designer at SpaceX. Whatever your personal opinions on the man, he is a genius, but… Musk is now splitting his time across at least six major ventures plus government advisory work. The man is distracted, and gets himself into trouble meddling in politics now.

Providing so many services to the U.S. government can also hurt him in markets like China or Russia. Usage by Ukrainian military forces and potentially in other military conflicts could even make SpaceX a military target.

Who knows how likely that is, but it is a possibility. So, anyone investing in SpaceX should realize both the positives and negatives Musk brings.

As I mentioned, competition with Amazon is intensifying and they can allocate essentially an unlimited level of capital if they choose to. Which would threaten Starlink’s growth. The payload launch business is more challenging for competitors to contend with.

Another one is, as I talked about at the start of the podcast… the valuation. 200 times EBITDA leaves little room for error. If the market crashes cause of the conflict in the Middle East, investors buying at IPO could get burned for years.

Any delays on Starship commercialization or slowdowns on Starlink subscriber growth could compress growth multiples and have a similar effect. People should be prepared to hold this stock for a long time if they want to buy in immediately.

SpaceX Subsidizing Musk’s AI Investments

And lastly, the acquisition of xAI and Twitter into SpaceX is clearly an attempt by Musk to justify his investments in the AI race. Merging an AI startup burning over $1.5 billion a quarter building out data centers into SpaceX, which has become incredibly profitable… just hurts the profitability numbers. Why should SpaceX have to subsidize Musk’s AI investments? Twitter is also losing $500 million a quarter, I believe. So, that’s over $2 billion in quarterly losses that SpaceX has to deal with.

There was also $17.5 billion in debt from xAI and Twitter combined, which has now been paid off. They did not say where the company came from, but xAI did do a $20 billion raise in January, so seems like it came from diluting xAI equity. They at least didn’t have to use SpaceX’s cash to do it. But it’s still ridiculous to me.

Musk justified merging Twitter and xAI into SpaceX because of the central data center issue. Maybe in the future… SpaceX can integrate with xAI and launch data centers into orbit.

This plan to create data centers in space, powered on solar power with no need for cooling… is just absurd. At least on any reasonable timeline. Remember, Elon Musk first talked about having 1 million Tesla vehicles in a Robotaxi network in 2019, and Tesla was just now getting the network started in 2025. Musk is now promising data centers in space in just 2-3 years from now. This man always predicts things will happen faster than they do. So… maybe it happens eventually. But it won’t be any time soon.

Sure, the acquisitions… in theory, made SpaceX more valuable. But this is a net-drag on the business. The only reason it makes any sense is cause Musk owns all the companies. Grok is over it’s head, in one of the most competitive markets on the planet right now, the AI race. Dealing with Google, Anthropic, and OpenAI.

SpaceX’s COO even said herself, xAI is largely operating as its own entity after the acquisition, so I don’t how the market can justify this is a good thing, but whatever. Elon gets to do what he wants.

Overall, SpaceX seems like it is a great business, but as always with Elon’s companies, the valuation is rich. We can see more concrete details when they file an S-1 form with the SEC, which might happen as early as next week.

I think there is a good chance retail investors get totally burned on this IPO, which insiders or large investors could use for exit liquidity right before a potential market crash due to a brewing energy crisis. But only time will tell. Long-term investors will be pleased with SpaceX, in the long run, either way if the company sustains the levels of growth it is seeing right now. We will have to watch and see what happens…

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

Subscribe now

Helium Shortage Inbound?

The closure of the Straight of Hormuz, thanks to the conflict in the Middle East, is choking off significant percentages of the world’s LNG and helium supply.

Morgan Stanley is warning that Taiwan typically only has about 10 days of LNG reserves, they are securing LNG cargos, but if this war is prolonged then the island could face major energy shortages.

Especially considering they have been shutting down nuclear power plants. Taiwan Semiconductor obviously can’t make semis without power.

So this shortage of natural gas supply from the region is hitting the Asian and Middle Eastern countries hardest.

Europe isn’t much better off, in some ways it’s even worse lol.

But everyone knows about the situation on the O&G front already. But there is a second commodity, that’s crucial to the semiconductor industry that is also set to face major shortages if this continues for long. Helium.

Qatar produces around 35% of the world’s helium supply, roughly 2.5 billion cubic feet (Bcf) annually from three extraction plants at the Ras Laffan Industrial Hub. They also produces 20% of the world’s LNG supply and 70% of the LNG supply from the region. The helium is produced as a by-product of LNG liquefaction…

So at least a third of the world’s helium supply comes from a single centralized location. Which has been shut down thanks to a drone and ballistic missle strikes on Ras Laffan, along with the blockage of the Straight.

That helium is shipped in specialized ISO containers on vessels that are currently stuck in the Persian Gulf, unable to leave.

Helium is non-substitutable in many critical applications.

• It cools the superconducting magnets in MRI machines.

• It’s essential for semiconductor manufacturing (cooling silicon wafers and etching processes).

• Pressurizes rocket fuel tanks for space programs.

• Enables fiber optic cable production.

And most of these applications require an incredibly high concentration of helium, we’re talking over 99.999% purified, several more decimal points out. Which limits supply even further.

The helium market entered 2025 in modest oversupply, with new capacity from Russia’s Amur GPP natural gas plant (that also produces helium), new Canadian facilities, and Linde’s Freeport plant.

These new plants pushed the global supply to ~6.5 Bcf against ~6.0 Bcf demand.

That gets thrown out the window with Qatar offline…

A popular consultant in the helium industry, Phil Kornbluth, has noted that the world simply cannot compensate for losing a third of its helium supply. Other producers like the USA, Algeria, Russia, and emerging Canadian operations… cannot ramp fast enough.

Semiconductor manufacturers have dealt with perpetual shortages of helium throughout the past two decades. This would be the industry’s sixth shortage since 2006… so many producers maintain several months worth of reserves.

The industrial gas giants in the industry like Linde, APD, or Air Liquide can provide a buffer for manufacturers since they have reserves as well, but that won’t last long if Qatar is shut down for an extended period of time…

Investment Angle: Helium Producers

So the question is, how do we benefit from a potential helium shortage, from disruption in the Middle East?

Buy stocks that produce helium in regions like North America. Which is where most of our potential investment options are located.

I will give you a short list of my top 3 investable companies that have already produced helium, or are already in the process of building a plant to produce or refine it.

The exploration business is significantly riskier so I strongly prefer companies that are already producing, or close to producing helium so they can actually take advantage of rising prices.

The benefit of investing in the helium industry is that it operates similarly to oil and gas, it’s the same extraction process.

So, there is already a workforce in place to hire talent from, and it doesn’t take as long to start generating revenue than it does in the mining world.

Helix Exploration

Helix Exploration (HHEXF) is the first stock on our list. Market cap of approximately $95 million USD. They are the first ever helium producer in the state of Montana. Their project in Montana, Rudyard project in Hill County sits on 5,600+ acres along the Sweet Grass Arch in northern Montana.

Helix drilled or acquired 4 production wells, all encountering commercial helium. Around 1% helium grades, which is considered economic.

The company purchased a proven Helium PSA processing plant for just $500,000, the unit had operated continuously from 2015–2022 with 98.5% uptime and 48,000 Mcf/year helium capacity.

It was refurbished and installed at the Rudyard project, with three helium wells already tied to it.

With a helium price of $300 to $500 Mcf that translates to between $14 million and $24 million in revenue. If we see helium prices skyrocket and Qatar helium production stays offline for a few months, or longer… then we could see that revenue figure explode higher. All depends on the geopolitical situation.

The stock has tripled since it listed due to how successful they have been, so recent news has been priced in, but if the conflict gets out of hands they they will be positioned to take advantage of rising prices.

Helix has no offtake agreements in place yet, as they were waiting to produce consistent helium supplies before signing any agreements. But potential distributors have visited the project, so they might have news there soon.

Given their operational results being priced in, this one of the more expensive helium stocks, the only downside I see with this one over a longer time horizon is that they have one of the smallest land packages of all the helium companies. Only around 5,000 acres for this project. Granted, they have some other exploration acreage in other regions.

Avanti Helium

Avanti Helium (ARGYF) is our #2 stock to mention. They have a market cap of $43 million USD. Avanti’s flagship helium asset is the Greater Knappen project, which spans approximately 75,000 acres across Montana and southern Alberta. They also have an additional 63,000 acres of exploration permits in Saskatchewan, totaling over 150,000 acres. All three wells drilled so far have encountered helium.

Two of the 3 wells were around 1.1% helium grade, and the third well was 0.41%, so the third well wasn’t as good.

But the second well they drilled, WNG 10-21. is considered one of the most prolific helium wells drilled in the last few decades in North America. Namely because of the incredible flow rate of helium.

The well was flowing over 20 million standard cubic feet per day. For reference, Helix’s wells are flowing around 2-3 million cubic feet per day. So, Avanti’s assets seem promising so far. Granted it isn’t very many wells yet.

In terms of processing the helium, Avanti has signed a definitive agreement to relocate an operational processing plant for $1.25 million. Similar to what Helix did with buying an existing plant instead of building one from scratch. The plant has existing capacity to process 100 Mcf per day of helium, with potential to upgrade to 150 Mcf per day later on.

The purity the helium is being refined to can also be upgraded. They are targeting their first helium sales, once the processing plant is reestablished at their project in mid-2026.

Avanti has signed a binding 3-year take-or-pay offtake agreement, which was finalized in August 2025, with an unnamed “leading global supplier of industrial gases.” And that is for 33% of the processing plant’s output. At least a majority of their supply is not contracted yet so it can be sold in spot sales for higher prices if the Middle East situation devolves further.

Overall, Avanti is a bit riskier than Helix since something could go wrong with establishing helium production and processing, but that also leads to greater reward if everything goes well and success isn’t priced in like it is for Helix. Either way, I think both Avanti and Helix are in similar situations from a fundamentals perspective.

But they are the best pure-play investment options that will be ready to take advantage of incoming price increases, in my opinion. Now, this is without me having had the time to research aspects like the management teams of these companies. Just going off of fundamentals, these seem to be the best two from what I’m seeing. Again, don’t take that as financial advice and make your own decisions. Do your own research.

Blue Star Helium

Now, our third stock of interest is Blue Star Helium (BSNLF). With a market cap of $27 million USD. Blue Star is a helium explorer and producer, focused on developing the Galactica-Pegasus project in southern Colorado.

The company holds approximately 312,000 gross acres of helium and CO₂ prospective acreage. Blue Star discovered the Galactica-Pegasus field in 2022 with four consecutive exploration wells returning helium concentrations as high as 6.06% at Galactica and 8.8% at the nearby Voyager prospect…. these are among the highest primary helium grades in the United States.

The company farmed out 50% of Galactica-Pegasus to Helium One, another public helium explorer. So the project is now a 50/50 JV with Helium One. Blue Star received US$1.5 million in cash plus ~US$2.7 million in free-carry development well funding, while retaining the operator role.

Blue Star and Helium One drilled seven-wells in the first half of 2025, with wells at a helium grade of 0.41% to 2.17%. The gas composition in the wells has been predominantly helium, carbon dioxide, and some nitrogen. The carbon dioxide can be processed as well and provides a secondary revenue stream that other peers don’t have.

The Pinon Canyon processing plant, designed and partially operated by Cimarron Midstream, achieved first refined helium in December 2025 and commenced fully integrated operations in March 2026. Four wells are currently producing into the plant, with two more awaiting tie-in.

CO₂ liquefaction and sales are targeted before the end of H1 2026, with merchant CO₂ pricing of $150–600 per ton representing a meaningful additional revenue stream. No binding long-term contracts have been signed yet, with negotiations ongoing for a variety of helium and carbon dioxide buyers.

Beyond the Galactica project, Blue Star holds an option on the Great Plains Field where the historical Bubba State-3 well flowed at 740 Mcf/d with 2.01% helium (better flow rate and grade than Galactica), so they have other promising exploration targets. The full Galactica development plan envisions 15+ total wells.

I consider Blue Star the worst of the three, while still promising, because they had to give away half ownership of their asset, and they have had declining helium grades feeding into their development asset.

What About Other Options?

People might see this post, and if they know some of the other companies in this industry, they may ask… why not ASP Isotopes, why not Pulsar Helium, and so on. ASP is not a pure-play helium company, their real substantial helium production would come from Phase 2 of their project, that isn’t going to be done for at least 4 years, and their management team has perpetually promised results that have not materialized. I think there are better optons for helium exposure.

In regards to Pulsar Helium or some of the other exploration options, I think the best, relatively sure-bets to actually take advantage of the price increases from volatility in the Middle East… will be existing producers. And Pulsar is likely around 2 years out from being able to produce any helium, if not longer. It could be interesting to watch, but doesn’t seem like the best buy right now.

I’m personally looking for already producing assets, outside of geopolitically dicey regions, with strong helium grades, hopefully prudent management teams. If a company has all that then they are already in a far stronger position than most companies you could look at in the commodities sector as a whole. If I end up buying one or multiple of these stocks, I will probably make a separate post talking about that. But for now I don’t own any of these companies. And I am going to continue watching how events unfold in the Middle East as that will decide how well these stocks perform…

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

P.S: None of these companies paid me or anything like that, I’m just providing some thoughts on some of the names I think might be the best… so others can research further if they like.

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Fertilizer Supply In Jeopardy…

A third of the world’s fertilizer travels through the Straight of Hormuz every year, and we still have nearly zero vessels traveling through the shipping lanes, since Iran continues to threaten violence.

With the shut down of LNG production at QatarEnergy’s Ras Laffan and Masaieed facilities, that also impacts the Qatar Fertilizer Company, which is the world’s largest urea supplier.

Bahrain’s Bapco Energies, which produces sulfur, and SABIC in Saudi Arabia have also had to curtail all production as none of their exports can leave the Gulf region.

In total, 46% of the world’s seaborne urea exports and 44% of its sulfer exports also travel through the Straight, which are key inputs for various fertilizers.

That’s already bad enough, but the blockage of natural gas supply is exacerbating the situation even more, since many Asian countries rely on this energy to power their fertilizer plants. So far, we’ve seen negative effects in Bangladesh and India. Which we will talk about in a bit, but first we have the most recent news out of China.

China

On March 16th, Bloomberg reported that China had ordered exporters to halt outbound shipments of nitrogen-potassium fertilizer blends.

Beijing also reiterated existing restrictions on urea exports… there would be no new export quotas issued anytime soon. In mid-March, Reuters reported that Beijing also banned exports of certain phosphate varieties.

China shipped over $13 billion dollars in fertilizer last year, they’re one of the world’s largest exporters.

According to Reuters’ analysis of Chinese customs data, between 50 to 80% of China’s fertilizer exports are now restricted. That could mean up to 40 million metric tons of product locked inside China’s borders.

They are keen to prioritize food security and insulate their domestic market from price shocks.

China imports around 45% of its crude oil from the Middle East and 25%-30% of its LNG. Half of the 9.6 million tons of sulfur China imported in 2025 came from the Middle East, and sulfur is essential for making phosphate fertilizers.

Chinese fertilizer plants that can’t get their feedstocks on schedule are facing rate cuts or temporary shutdowns.

The countries that depend on Chinese fertilizer are now in serious trouble.

Last year, China supplied roughly a fifth of fertilizer imports for Brazil, Indonesia, and Thailand. A third for Malaysia and New Zealand. About 16% for India. So, China closing off its markets only makes the situation worse…

Bangladesh

In Bangladesh, they have already had to shut down five of their six urea fertilizer plants due to natural gas shortages.

Bangladesh gets roughly two-thirds of its imported gas from Qatar. When QatarEnergy halted shipments, Bangladesh’s gas supply cratered. The government ordered the shutdowns to conserve what gas remained for household use and power generation.

Bangladesh needs about 2.6 million tons of urea every year for agriculture. They only produce about a million tons domestically… the rest is imported, largely from the Middle East. So they were already dependent on imports, and now their domestic production has collapsed too.

The government says they have 468,000 tons of stockpiled urea. Enough for now. But that clearly won’t be enough. They’re issuing emergency tenders LNG cargoes…

India

Moving onto India, they are the world’s largest importer of urea.

Bloomberg reported on March 4th that Indian urea producers had started trimming output after Qatari LNG supplies were suspended.

By March 11th, the situation had escalated… companies including the IFFCO, the Indian Farmers Fertiliser Cooperative, India’s top producer, had either halted facilities or moved up annual maintenance schedules.

Even if gas supplies were able to reach the country, it could take up to a month to get these facilities back online.

The Indian government invoked the Essential Commodities Act on March 9th, issuing what they called the Natural Gas Supply Regulation Order. Fertilizer plants are receiving 70% of the gas they garnered over a previous six-month average. So, they are already starting to ration natural gas supply.

More than half of India’s imported natural gas comes from the Gulf countries. India’s 32 fertilizer manufacturing plants all run on natural gas.

India imported over 40% of its urea and diammonium phosphate (DAP) from the Middle East last year. They’ve been scrambling to line up alternative suppliers like Indonesia, Malaysia, Egypt, and Russia, but they are competing with a variety of countries for the same supply.

Others From The MENA Region

All of this disruption is happening right before growing seasons in the Spring and Summer. Which means reduced crop yields, and price inflation in not just India. But likely across the globe.

In Pakistan, fertilizer producer Agritech announced its gas supply had been completely cut off. Pakistan is essentially 100% dependent on Qatari gas imports.

Egypt is facing similar issues. Egypt, which is one of the top ten fertilizer exporters globally and the largest in Africa, has its own vulnerability: it has relied heavily on Israeli gas imports, which are all shut down due to the conflict.

We are seeing fertilizer production or its inputs curtailed across the region.

Europe

Europe is getting hit too, even though it’s not directly importing from the Gulf on the same scale. The numbers aren’t much better. Dwindling O&G supplies coming in from Russia is certainly making things worse...

Poland’s Grupa Azoty, one of the largest fertilizer producers in the European Union, temporarily stopped accepting new orders for nitrogen fertilizers.

Slovakia’s Duslo, the country’s largest fertilizer producer, cut ammonia production to the “technical minimum.”

CRU Group, the commodities analytics firm, estimates that about 20% of European ammonia capacity and 25% of urea capacity are currently curtailed.

The timing of this war is catastrophic. The Northern Hemisphere spring planting window runs from mid-February to early May. And fertilizer is applied early in the crop cycle. If farmers can’t get it now, they have three options:

1. Pay astronomical prices for whatever’s available, which crushes their margins.

2. Reduce application rates, which means lower yields.

3. Switch crops, move from nitrogen-intensive corn to other crops like soybeans.

If we see crop switching on a mass scale, we’re looking at a major corn production shortfall in 2026, which cascades into livestock feed, ethanol, and consumer food prices.

It’s too early to say if we are going to see a global famine, but that at least seems likely in poorer regions of the world. Developing nations.

First world nations might be a bit better off, but we could face large-scale shortages or price hikes to deal with dwindling levels of supply.

At this point, we’re talking about 40-50% of the world’s fertilizer production being curtailed or outright shut down thanks to this war.

I’m not trying to fearmonger, but what other conclusion are we supposed to draw about this situation… even if peace is declared tomorrow, it will take months, if not far longer to unravel the damage that has been done. So, it’s already too late to salvage this year.

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

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Why Is Fertilizer In The News?

Roughly one-third of all seaborne fertilizer trade and nearly half of global urea exports travel through the Straight of Hormuz every year, and its closure has sent urea prices surging approximately 50% in under two weeks. Urea is a nitrogen-based fertilizer created from a reaction between ammonia and carbon dioxide.

The closure of the Straight thanks to the ongoing conflict between Iran and the USA/Israel is happening at the worst possible moment.

The Northern Hemisphere spring planting season is starting soon, so demand is about to peak as supply is being choked off.

Fertilizer producers like CF Industries (CF) and Nutrien (NTR) have seen their stock prices skyrocket as the war continues.

CF Industries is already up from $95 to $135 just in the span of the two weeks of this conflict so far. And we’ll talk about CF, as well as what other stocks benefit from this crisis, but first we have to go over why these stocks are starting to move…

It’s important to note that the Gulf countries produce ~49% of global urea exports, ~30% of global ammonia exports, ~30% of global phosphate exports, and 45–50% of global sulfur exports- sulfur being an essential input for phosphate fertilizer production. So, these are significant portions of the supply for nearly all inputs related to fertilizer production.

The country of Oman is the only Gulf producers with possible export routes outside of the Straight, so every other producer is effectively land-locked by the blockade created by Iran. Which doesn’t even have to be a literal blockade…

Just the threat of drone strikes, or mines laid in the sea is enough to ensure that most of the transportation vessels in the region will not try to enter or leave.

The creation of ammonia is a process that requires the usage of natural gas, and the Gulf countries are a source of incredibly cheap gas.

So, that’s why we find ourselves in this situation. And why there are so many fertilizer plants in the region. Natural gas represents 60–80% of ammonia’s variable production costs, making cheap gas the primary factor of consideration as to where to build a new fertilizer plant.

Middle Eastern producers pay $1–3/MMBtu for feedstock gas while European competitors, for example, pay $10–17/MMBtu.

That translates to a several-hundred-dollar cost advantage for fertilizers and makes producers simply unable to compete on price in other regions of the world.

Nitrogen fertilizers like urea are vital to growing crops like corn, which affect a variety of industries as as it used to feed roughly 40% of the livestock in the USA, and is used in around 90% of domestic ethanol production.

Nitrogen fertilizer accounts for ~59% of total global use, phosphate is ~21%, and potash is ~20%. About half of all fertilizer produced is consumed domestically and never enters international trade, making the seaborne trade that passes through Hormuz even more concentrated and critical.

The urea-to-corn price ratio, a key measure of farmer affordability, jumped from 75 bushels per ton in December to 126 bushels per ton by March 9th, approaching record levels and signaling that many corn farmers will lose money on every acre planted.

For fertilizer production, the closure of the Straight isn’t even the extent of the damage. Shortages of LNG will affect fertilizer production in countries like India and Bangladesh. The country of Bangladesh has already shut down 5 of its 6 fertilizer plants. Some of the Asian countries are heavily dependent on supplies from the Gulf states.

Investment Options

So, with all of that said, we know that the fertilizer industry is going to see large price spikes, as it has already… what stocks can we buy to benefit from this?

The key is going to be buying companies operating outside of the Middle East, obviously, but also producers that can access cheap gas without relying on imports from the region. The obvious winners in this scenario are producers in areas like North America, where there is plenty of cheap, unaffected natural gas production.

CF Industries (CF) — The clear #1 beneficiary

CF Industries is a pure-play nitrogen producer, operating the world’s largest ammonia production complex in Donaldsonville, Louisiana. Their total ammonia [production capacity is approximately 10 million short tons/year across facilities in Louisiana, Iowa, Mississippi, Ontario (Canada), the UK (Billingham), and in a Trinidad joint venture. Products include ammonia, granular urea, UAN, ammonium nitrate, and diesel exhaust fluid.

CF has a $4 billion joint venture targeting the production of 1.4 MT/year of blue ammonia, also under development in Louisiana.

Nutrien (NTR)

Nutrien is the world’s largest fertilizer company, covering all fertilizer inputs. They are the world’s largest potash producer (~20% global market share), a major nitrogen producer, and a significant phosphate player.

• Nutrien’s potash comes from six Saskatchewan mines with 20.6 million MT of nameplate capacity

• Nitrogen production guidance for 2026 is 9.2–9.7 MT from plants in Georgia, Louisiana, Ohio, Texas, and Trinidad.

• Phosphate guidance is 2.4–2.6 MT from North Carolina and Florida operations.

CVR Partners (UAN)

CVR Partners operates two nitrogen fertilizer plants in Kansas and Illinois.

The Kansas facility is the only North American nitrogen plant using petroleum coke gasification rather than natural gas, which insulates it more from gas pricing spikes. Combined annual capacity exceeds 800,000 tons ammonia and 1.3 million tons of urea ammonium nitrite.

Mosaic Company (MOS)

Mosaic is the world’s largest integrated phosphate producer with significant potash operations, as well. Phosphate capacity targets 6.9–7.2 MT from Florida and Louisiana facilities, while potash output targets 8.7–9.1 MT from Saskatchewan mines. Revenue runs approximately $12 billion annually. The problem with mosaic is that they produce phosphoric acid, which requires sulfur which has been soaring in price. So that is going to lead to more modest gains than other players in the space.

LSB Industries (LXU)

LSB is a pure-play North American nitrogen producer based in Oklahoma City, producing anhydrous ammonia, UAN, ammonium nitrate, and nitric acid with approximately 875,000 tonnes gross ammonia capacity annually.

Intrepid Potash (IPI)

Intrepid is a 100% U.S.-based potash producer operating solar evaporation facilities in New Mexico and Utah. Annual capacity is approximately 200,000–250,000 short tons of potash plus 150,000–200,000 tons of langbeinite, which contains potassium, magnesium, and sulfur.

So, besides the stocks mentioned already, there are a variety of potash producers or developers like Sage Potash, Brazil Potash, Buffalo Potash, and more. But we can’t cover them all, right.

The effects the closure of the Straight will have on fertilizer is in many ways worse than the oil and gas industry, since it’s not nearly as easy to come up with alternative sources of fertilizer. There are no strategic fertilizer reserves, this is capex-intensive industry or mining operations.

And even if the Straight reopens tomorrow, there is still damage from drone or missile strikes on various assets in the Middle East. It would take time to clear any mines in the Straight, production would need to be ramped up again. All of these issues would lead to sustained shortages for several quarters, if not longer.

It will be crucial to watch how things are unfolding in the region, especially following whether the conflict continues to escalate or parties begin to back off. We will see how it unfolds.

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Disclaimer

This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this video constitutes a solicitation, recommendation, endorsement, or offer by Green Investing to buy or sell any securities or other financial instruments in any jurisdiction.

All content in this video is information of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this video before making any decisions based on such information.

I plan to create content here again, and do so permanently, although I've been on hiatus for a bit.

As you are aware, the broader stock market has seemingly entered melt-up mode…

If you buy any ticker with a shred of hype around it, it’s been difficult to lose money.

That backdrop has been helpful. At the same time, the companies I’ve discussed for years have finally started to see meaningful share price appreciation through the achievement of many of their key milestones.

While they are often *theoretically* overvalued, my focus has been on finding undiscovered microcaps with capex-light business models, strong growth prospects, potential for durable moats, and prudent management teams.

This requires an almost unreasonable level of patience…

And risk-taking, as you will have to buy unprofitable companies if you want to find these qualities. If they were already profitable, then the stock wouldn’t be a microcap.

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Portfolio

Abaxx Technologies - ABXX (+298%)

Abaxx stock has been going vertical recently, just because of averaging enough futures contract volumes to generate a few million dollars of revenue a year, at best.

While volatile, trading has been ramping up. Josh Crumb provided an update on September 15th that the exchange had its first ~3,000 lot day. Abaxx had 1,938 lots trade for gold, and 987 lots for LNG.

If annualized, this would equate to ~$3.5 million in revenue for the exchange.

With volumes starting to ramp up, investors can see the writing on the wall. A few benchmark futures contracts and ABXX will be worth billions. The market is just starting to price that in.

Upcoming catalysts include:

• Continued ramp-up of trading volumes and onboarding market participants.

  • Abaxx has been making inroads in Asia, the largest region for LNG imports. Possibility for cross-border futures trading and collaboration with the commodity exchanges in China. Onboarding the major Asian and American players would essentially ensure benchmark status.

• Launching new weather futures, copper futures, cash-settled LNG futures, etc.

• Uplisting to the Nasdaq or other tier one stock exchanges.

• Foreign Board of Trade (FBOT) approval from the U.S. CFTC.

  • This will be a massive step forward as it will allow clients from the USA to access Abaxx markets.

• Pilots dedicated to showcasing FDT, MMF, and MineHub technological capabilities for tokenizing assets and modernizing commodity collateralization.

• Final, large raise to bring in strategic investors and finance the tech side?

Abaxx remains the largest position in my portfolio by weighting. I thought it was about as close to a slam dunk as you could get four years ago, and I still believe that now. Granted, it took a long time and a lot of volatility to reach this point lol.

Aduro Clean Technologies - ADUR (+503%)

Aduro is my second-largest position, and we’re up to a six-bagger here.

I figured we wouldn’t see much movement in the stock until they built out their second pilot unit, which should be operationally complete by the end of the year…

It turns out that the stock started to move before we even had any news on it.

The commissioning of the unit was scheduled to commence this month. With the expectation that the pilot will be able to recycle 8,000 tons of plastic waste annually.

In terms of what comes next… Aduro should have the unit operational soon; they will begin testing with various plastic feedstocks, and then we can expect some of their large partners to sign more concrete collaboration agreements.

Aduro is still in the Shell GameChanger program, and I would expect them to “graduate” after this pilot unit is operational.

TotalEnergies, Shell, GF Building Flow Solutions, and the other majors under NDA will certainly look to utilize Aduro’s technology if testing with this unit performs as expected.

It’s up to Aduro now— to prove the technology works at scale.

eXoZymes - EXOZ (-28%)

eXoZymes is a position that I haven’t really discussed before. This is a small position (5% weighting) that I’m waiting on to see if the company continues to deliver as Aduro and Abaxx have.

This company is developing a cell-free biomanufacturing process that can be used to produce pharmaceuticals, biofuels, and other chemicals.

The range of potential benefits of this technology is too long to list in a small update, but if the technology is proven out… this is a revolutionary process.

I strongly recommend reading Slack Capital’s extensive write-up on the company.

EXOZ has over 100 active NDA discussions with companies interested in using their technology.

Notably, like Aduro, eXoZymes is in the Shell GameChanger (GCxN) program run in collaboration with the US Department of Energy’s NREL division.

Over the years, they have received non-dilutive grant funding from:

• The National Institutes of Health (NIH)

• The U.S. National Science Foundation (NSF)

• The U.S. Department of Energy (DOE)

• The National Renewable Energy Laboratory (NREL)

• The U.S. Department of Defense (DOD)

I think seeing the large interest from parties like this, at least warrants a starter position to see how they progress over the next few years.

Watching

Zefiro Methane - ZEFI

If you want exposure to the carbon markets with a business model that can actually scale… Zefiro is likely going to be the best bet. This is one I’m still watching.

Zefiro Methane is a provider of well-plugging services for orphaned oil and gas (O&G) wells.

As I pointed out in a previous post, the stock IPO’d at a rich valuation. And the stock has subsequently suffered from a lack of initial results and the exercise of cheap warrants.

Catherine Flax has been appointed as interim CEO to turn this ship around. So, we’ll see what results the change in leadership will have over the next few quarters.

Sold Stocks

Base Carbon - BCBN

I made a previous post about how I sold Base Carbon in the past, but I figured it was worth mentioning again here.

This company has been run exceptionally well and is a glimmer of hope in an industry that is often plagued by failures. Aka the carbon markets.

Of course, as soon as I sold the stock, it proceeded to run up ~100%.

That’s why I try to make as few changes as possible in my portfolio. I swear, whenever I make a move, the market wants to make sure I know that I’m a fool.

As I mentioned previously, Base was a small position for me, so I’m not going to lose sleep over it. But I do hope the company continues to perform.

Ultimately, I needed to sell something, and I will prioritize growth companies over value companies.

For a variety of potential reasons, Base has been unable to expand its carbon credit project portfolio for years. This is a firmly a value stock, with relatively limited growth prospects, in a deeply unpopular industry. Granted, it is certainly undervalued.

As much as the industry fascinates me, if I have to choose… I would rather go where the growth is. And I suppose that has worked out so far.

This is not to say that Base can’t do well, but it seems unlikely that Base’s stock price will skyrocket like Abaxx's or Aduro’s can.

Northstar Clean Technologies - ROOF

It’s worth mentioning that I have sold Northstar as well. Again, this is not to say that I necessarily think the company has done anything wrong. I needed cash lol.

They have been slightly delayed on the operation of their first asphalt shingle recycling plant, but that is to be expected for a new technology, ramping up for the first time.

Other investors have sold due to a bit of a sleazy capital raise that was conducted below market and closed to most investors…

I can see why it’s a red flag.

There were initial signs of management self-serving when they re-priced their own options back in May 2024.

Management information circular (keyword search for re-price).

They amended the exercise price of their options from $0.35 to $0.21 (CAD) when it didn’t appear they would reach their desired share price.

I was personally willing to overlook that and not think much of it, but this raise was a pretty bad one. If you’re not on the management team ;)

Either way, I had already sold before needing to decide whether I would stomach that type of raise or not.

There is a difference between these companies rewarding themselves for their performance… or simply giving themselves free money.

I’ll probably just maintain higher ownership stakes in what I think will be higher-growth opportunities, avoiding buying back into Base or Northstar.

The owner of Green Investing is not a licensed investment professional. Nothing produced under the Green Investing brand should be construed as investment advice. This content is made for entertainment and educational purposes. Do your own research.

Transcript

MP Materials is one of the two large producers of rare earth metals outside of China, with the ticker MP, listed on the NYSE and a market cap of around $10 billion

In this video we will review the rare earth metals markets, the geopolitical tensions there between the United States and China. As well as the investment fundamentals of MP Materials, whether it’s worth taking a position in.

The rare earth elements, or metals, consist of the 17 various materials listed on the screen. They are used to create a variety of different crucial products. Aerospace components, superconductors, batteries, magnets, nuclear reactor control rods. It’s obvious why we need these materials.

The problem? China dominates the production of these metals. The entire supply chain is controlled by the Chinese. China produces around 60-70% of the supply of these crucial resources. The country owns an even larger percentage of the refining and processing capabilities. So, the West is dangerously dependent on China. Who can shut off exports at any times. As they have for some of these materials in the past.

Just a few months ago, China imposed export restrictions on seven medium and heavy rare earth metals. This was the cause of tense negotiations as China has essentially been holding the global economy hostage with its near monopoly over these industries.

Inevitably, neither the United States nor China can afford to let restrictions like that last for very long, so they recently reached a deal to mutually roll back retaliatory trade actions. So, China will resume supplying these rare earths to the West again.

But these tensions have made it clear that the United States is vulnerable, so we have been making investments to increase production outside of hostile nations like China. That’s where MP Materials comes in.

And that is exactly why the U.S. Department of Defense just signed a multi-billion-dollar commitment deal with MP Materials for a magnet production facility in the United States. This includes pricing floor guarantees for when buying the magnets, an offtake agreement, and a $400 million investment in MP’s stock. As of July, the DoD is now the largest shareholder of the stock, holding 15%. That magnet facility is expected to be completed in 2028. So, the United States is clearly committed to developing new domestic rare earths manufacturing capabilities. This trend is what makes MP such an interesting stock.

The company’s central goal is to become a scaled and vertically integrated rare earths producer, operating across the entire supply chain from mining the metals to producing finished products, aka the magnets used in munitions, electric vehicles, and more.

The company operates the Mountain Pass rare earths mine in California, situated in the Mojave Desert. The mine was previously owned by Molycorp until MP Materials took over control in 2017. MP bought the mine out of bankruptcy for $20 million. And since it has upgraded many of its operations and equipment, since this mine has been in operation since the 1950s.

Since there are 17 different rare earth metals, all of them with different supply and demand fundamentals… it’s important to know which metals this mine tends to find. The best approximations I could find were from 1980 estimates, so it may have changed slightly by now. But this is the best I got.

The mine is incredibly high-grade for a rare earths deposit. Grade, meaning how much ore can be found in the rock, on average. The grade of the ore body at Mountain Pass is approximately 6-8% total rare earth oxides (or TREO). This is significantly better than other global deposits, which typically range from 1-2%, and if not lower. Mining grades continue to decline as we have already mined out a large amount of the high-grade deposits around the world in the past. So, this is a great deposit.

Estimates from the 1980s tell us that the approximate percentage of the rare earths in the mineral body are as follows:

• Cerium is 50% of the TREO found in the mine

• Lanthanum is 34%

• Neodymium is 11%

• Praseodymiun is 4%

• And all of the other metals are around .5 percent of the ore or less

While many of these metals are valuable, our focus is primarily on the neodymium and the praseodymium, or NdPr. Because those metals combined are used in the magnets that the company plans to produce as part of the Department of Defense investment.

The production ramp up of Mountain Pass was laid out in a three stage plan:

1. The first stage was mining rare earth concentrate at a majority rare earth oxide content. All of that ore was originally being shipped to the Chinese company Shenghe Resources, which is actually a minority shareholder in MP. Those metals were being separated in China, but those shipments have now been halted. So, revenues will decline temporarily.

   1. Their goal is to mine 15,000 metric tons of rare earths from Mountain Pass, per quarter. Which they are getting relatively close to doing with 12,000 being produced in Q1.

2. The second stage was creating midstream operations to separate and refine the rare earths themselves. Which is now being done with the NdPr oxides for magnets. Their annual production target is to output 6,075 metric tonnes of NdPr oxide.

3. The third and final expansion stage is underway, taking NdPr oxide to produce neodymium-iron-boron alloy for magnets. Which they will be manufacturing in-house, at a facility in Texas.

MP has already started delivering NdPr metal and is expected to start producing finished magnet product by the end of this year. The initial facility, called Independence, will target a production capacity of 1,000 metric tons per year of magnets.

The 10X facility, which they have yet to determine a location for, will be much larger, increasing production capacity to around 10,000 metric tonnes per year. That is estimated to begin commissioning in 2028.

Transitioning from the lower end of the supply chain, just selling raw ore, to selling refined products like magnets… makes MP more interesting. They can probably receive higher margins depending on how things play out. Especially with a pricing floor from the Department of Defense.

When it comes to partnerships, MP has obviously been making strides with the Department of Defense since securing a rare earths supply chain is a matter of national security. But they have also made separate agreements with both General Motors and Apple.

General Motors is an offtaker for alloy and magnets from the initial Independence magnet facility.

Apple has also partnered with MP in a $500 million deal for magnets from that same facility. And establishing a supply chain for recycling old magnets at the Mountain Pass mine.

Further emphasizing this company’s importance, they are now working with high-profile companies seeking to localize the supply of key materials.

MP has also signed an MoU with the Saudi Arabian mining company Maaden. The largest mining company in the middle east, owned by the Saudis. They are going to work on developing a rare earths supply chain within Saudi Arabia. So, those could be some valuable joint ventures to establish another source for supply from a friendlier region than China.

In terms of valuation… significant growth is likely priced in at this point. Going off their slides they were estimating at least $650 million in EBITDA when Independence and the 10X magnet facilities are up and running, after ramp up. So, that would be in 2028 to 2029.

There will likely be additional growth opportunities from now until then, but going off today’s market cap of around $10 billion. Enterprise value is pretty similar, so an EV/EBITDA of 15x. And that is based off of projections for several years from now. What multiple MP Materials deserves… who knows. Your guess is as good as mine. This is a pretty unique situation.

We’re talking about a producer that mines around 10% of the world’s supply of some of these critical metals that are important to a variety of supply chains, located entirely in a safe jurisdiction in the United States. If you know of any comparables like that then feel free to post about it in the comments below.

Lynas Rare Earths, the other large rare earths producer outside of China is trading at quite high multiples. They are not generating very high profits yet either.

But your standard mining company like Rio Tinto or Barrick Gold trade at EV/EBITDA multiples of around 5-6. Yes, MP is a unique situation, but it’s not cut and dry whether you should be buying the stock or not after it has increased drastically. It could continue to do well, of course, but the stock has already moved up dramatically.

The stock has already doubled in price from when I made my video on rare earth mining investment options in June. Just a month ago.

Talking financials, things are going to take a downturn. As I mentioned earlier, MP has ceased all shipments of rare earths to China for processing, so they have to ramp up those operations on U.S. soil.

But before that even takes effect, we have the results from the first quarter of 2025. Revenues were around $60 million. After you account for cost of sales, SG&A, as well as depreciation, depletion, etc… MP was operating at a loss. Total operating expenses came in at $95 million. This resulted in a net loss of $22 million for the quarter.

It seems like financial results will be shaky until they start producing magnets in large numbers. But that’s why they have a solid balance sheet.

Total cash reserves and short term investments added up to $760 million. That does not include the recent raise that MP just did. On July 17th, MP is taking advantage of the run in the stock price to raise $650 million through a public offering. A great idea considering how much the stock has moved. But dilution risk is still high as MP is using their high stock price to fuel expansion.

The total liabilities were at $1.3 billion. Most of that being long-term debt at $850 million, which is maturing years from now. So, the company is doing well when it comes to the balance sheet. They have various sources they can receive funding from, whether that be raising money from the market or receiving funding from several different partners.

MP is also going to receive $1 billion in a committed financing facility from Goldman Sachs and JP Morgan, which should fund all planned capex for the 10X magnet facility.

With all of the positive aspects to the business being said, they have a lot of momentum on their side. Great growth prospects. But I think the valuation is getting extended here, as it likely already was before the stock jumped 100% since I talked about it last month.

Does that mean the stock won’t move up even higher… certainly not. We’re talking about strategic assets getting government support and a significant amount of news coverage. So, of course the stock could keep climbing. But I think it’s risky to say that MP Materials is a no-brainer buy at a $10 billion market cap. We’re pricing in years of growth, even if we assume they will trade at a far higher multiple than the industry standard.

We’ve seen with the nuclear energy stocks that valuations can get out of hand for years, and stay that way, but on the flip side if we see the stock market start to drop broadly… then an unprofitable mining company with significant capital expenditures is not going to perform well. So, these are situations I just tend to avoid, personally. But deciding what investments to buy is, as always, up to you.

General Environmental/Regulatory

• President Trump announced sweeping new tariffs invoking emergency powers, imposing a 10% baseline tax on all imports and much higher rates on major trading partners like China (34%) and the EU (20%) aimed at promoting U.S. manufacturing and achieving trade "reciprocity." This significant tax increase, bypassing Congress, risks triggering broad trade wars, disrupting global supply chains, and causing substantial inflation for American consumers and businesses, potentially leading to an economic slowdown.

• The European Parliament voted decisively on April 3rd, 2025, to approve delays in the implementation of key EU sustainability rules, namely the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). This proposal postpones the CSRD application by two years for companies not yet reporting and the implementation of CSDDD by one year. The delays are part of a wider push, known as the Omnibus I package, aimed at significantly reducing the regulatory and reporting burden on companies, especially smaller ones, potentially shrinking the scope of required disclosures considerably.

• The US Department of Energy is proposing to dismantle its Office of Clean Energy Demonstrations, cutting approximately $9 billion in awards for projects focused on carbon capture, direct air capture, solar, battery storage, and several regional hydrogen hubs. A final decision on the proposal could be made as early as next week.

Battery Metals

• Russia and the United States have initiated discussions regarding potential joint projects focused on rare earth metals and other resources within Russia. Some American companies have already expressed interest in these potential Russian projects. Further discussions on this cooperation might take place during the next round of Russia-U.S. talks, potentially scheduled for mid-April in Saudi Arabia.

• Responding to new U.S. tariffs, China implemented export controls on several key rare earth elements and related products like magnets starting April 4th, 2025. The country is set on tightening its grip on minerals crucial for Western defense, electronics, and EV industries. While stopping short of a full ban, the controls allow Beijing to restrict shipments via licensing and are seen as a significant escalation in the U.S. - China trade dispute.

Biofuels/Chemicals

• The US Department of Agriculture announced the release of $537 million in federal grants for 543 biofuel infrastructure projects across 29 states, combining nearly $260 million in new Trump administration commitments with previously obligated funds. Distributed through the Higher Blends Infrastructure Incentive Program (HBIIP), the funding aims to boost sales and consumption of ethanol and biodiesel by helping companies install or upgrade pumps, storage tanks, and blending equipment for higher biofuel blends.

Voluntary Carbon Markets (VCMs)

• Singapore's first government tender seeking high-quality, nature-based carbon credits garnered significant market response, attracting nearly $1 billion (S$1.3 billion) in total bids from 17 different submissions. Commodity trading giants Trafigura and Mercuria Asia Resources placed the largest bids for the credits, which must be delivered by February 2031 and meet criteria including alignment with Article 6 of the Paris Agreement. Following the strong interest in this initial round, the government intends to launch a second tender for at least 500,000 additional nature-based credits later in 2025.

Hydrogen

• A new analysis from Westwood Global Energy Group suggests Europe is unlikely to meet its 2030 hydrogen production targets, projecting that only 17% of the planned EU project pipeline will materialize by then without significant market intervention due to regulatory delays, high costs, and weak demand. The report indicates a similar challenge for the UK, estimating only up to 24% of its pipeline might be realized.

• Major oil companies, including BP dissolving its mobility team and Shell closing its California stations, are significantly scaling back or exiting hydrogen initiatives for transportation. The author contends this retreat isn't due to market immaturity but stems from the fundamental economic and practical challenges hydrogen faces against battery-electric solutions for both light-duty vehicles and heavy trucking. While some firms like TotalEnergies continue building subsidized infrastructure and others like ExxonMobil focus purely on industrial hydrogen production… the broader trend suggests the oil majors see little future for hydrogen as a widespread transportation fuel. The piece concludes that hydrogen's realistic application lies primarily in replacing existing industrial feedstocks, not in powering the movement of people and goods.

Liquified Natural Gas (LNG)

• The U.S. government is set to rescind a Biden-era policy that mandated new LNG projects begin exporting within seven years of receiving regulatory approval. This policy, implemented in April 2023, faced opposition from the LNG industry, which argued that many projects require longer development times. Under the new approach, the Department of Energy will revert to its previous practice, considering requests to extend the export commencement deadline on a case-by-case basis for good cause.

• The United Nations’ International Maritime Organization (IMO) is meeting in London over the next two weeks to discuss a potential levy on greenhouse gas emissions.

  • Shipping giant Maersk is warning that a proposed global emissions trading scheme (ETS) could promote the use of LNG over greener alternatives. The Danish company contends that the plan fails to adequately penalize LNG emissions, potentially making it a cheaper option for shipowners compared to truly low-carbon fuels like green methanol.

Nuclear Energy

• The North American uranium market is experiencing a significant slowdown as U.S. nuclear power companies pause purchases and delay new contracts due to the uncertainty surrounding potential tariffs on Canadian imports threatened by President Trump. Heavily reliant on Canada for fuel, US utilities are hesitant to commit while awaiting clarity on the scope and timing of the levies.

• A Texas state representative has introduced legislation proposing $2 billion in taxpayer-funded incentives to revitalize the state's long-dormant nuclear power industry by offsetting costs and encouraging the construction of new plants. The bill (HB 14), aims to establish a dedicated state office and provide grants to new nuclear developments.

Investment Funds

• Japan's Government Pension Investment Fund (GPIF) has introduced a comprehensive new policy prioritizing sustainability-focused investments, incorporating ESG and impact factors across its extensive portfolio. As a "universal owner," GPIF believes reducing sustainability risks and fostering sustainable corporate growth are crucial for overall market stability and its investment performance.

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General Environmental/Regulatory

• The SEC has announced it will no longer defend its climate disclosure rules in court, effectively halting enforcement and leaving the rule’s future in limbo. The rules, introduced in March 2024 to require public companies to report climate risks and emissions, had faced multiple legal challenges. Without SEC backing, courts could now strike down the rule without the agency formally rescinding it.

• Republicans are considering a “thoughtful” phaseout of clean energy tax credits from the Inflation Reduction Act (IRA), rather than a full repeal. House Budget Chair Jodey Arrington (R-Texas), once a vocal critic of the credits, now suggests a gradual transition to avoid disrupting markets. The shift comes amid internal GOP tensions, as nearly two dozen Republicans have expressed support for preserving the credits due to local economic benefits. With limited climate funding to cut, Republicans are reassessing their approach as they work to offset the cost of extending the 2017 Trump-era tax cuts in the upcoming reconciliation bill.

• A new PwC report reveals that 84% of companies are maintaining or accelerating their climate commitments, despite economic uncertainty and evolving regulations. Sustainability efforts are delivering financial benefits, with eco-friendly products earning 6% to 25% more than conventional ones, and smaller businesses are increasingly joining the decarbonization movement due to supply chain pressures.

Battery Metals

• J.P. Morgan has upgraded the mining and metals sector to “overweight,” citing a projected rebound in commodity prices and improving fundamentals, especially in copper. The firm expects a V-shaped recovery driven by China’s recent economic stimulus measures and tightening supply-demand dynamics, with copper forecast to rise 15% to $11,500/ton by Q2 2026. Mining equities have significantly underperformed since 2023, creating a valuation gap that J.P. Morgan sees as a strong upside opportunity.

• Rebels from Myanmar’s Kachin Independence Army (KIA) have seized control of rare earth mines producing about half of the world’s heavy rare earths, significantly disrupting supply chains and driving up prices, especially for terbium oxide. The KIA is using these resources to pressure China, which supports Myanmar’s military junta and relies on these mines for critical minerals used in EVs and wind turbines. India has shown interest in stepping in but faces logistical and processing challenges.

  • There are conflicting reports, Reuters states that the rebel group will allow the exportation of rare earths minerals to China.

• Tin prices surged after an earthquake in Myanmar raised concerns about delays in restarting mining operations in Wa State, which produces 70% of the country’s tin. Although the quake’s epicenter was over 400 km from the mining region, speculators drove prices up 2.5% to $36,140 per metric ton. Myanmar is a major tin supplier to China, and ongoing production suspensions since August 2023 were already tightening global supply. Combined with a halt at Alphamin’s mine in the DRC and low LME inventories, the market remains highly sensitive to any disruptions.

• Some of the battery metals like cobalt and lithium have had their prices experience precipitous declines after EV demand fell off. Firms like Goldman Sachs are starting to predict that lithium might have bottomed here or in the near future. See the chart below:

Biofuels/Chemicals

• IATA has launched the Civil Aviation Decarbonisation Organisation (CADO) to operate its upcoming Sustainable Aviation Fuel (SAF) Registry, aiming to create a transparent, global system for tracking SAF use and claims. CADO will be an independent body that is open to all SAF value chain stakeholders.

Carbon Capture

• Shell, Equinor, and TotalEnergies will invest $714 million to expand their Northern Lights carbon storage project in Norway, following a 15-year deal with Stockholm Exergi to store 900,000 tonnes of CO2 annually. The expansion will more than triple the facility’s capacity to 5 million tonnes per year— roughly 10% of Norway’s annual emissions. The investment also includes €131 million in funding from the European Commission, signaling strong EU support for large-scale carbon capture and storage (CCS).

Compliance Carbon Markets (CCMs)

• China will expand its national carbon trading market to include the steel, cement, and aluminum industries, adding around 1,500 new firms to the scheme. This move will increase the program’s coverage to 8 billion metric tons of CO2, over 60% of China’s total emissions. This makes it the world’s largest carbon market by volume.

• Mexico is set to bring its emissions trading system (ETS) online by the end of the year. The system will include the usage of carbon offsets. Details are scarce because Carbon Pulse is paywalled for institutional clients only.

Voluntary Carbon Markets (VCMs)

• The Science Based Targets initiative (SBTi) has released a draft update to its Corporate Net-Zero Standard (CNZS), firmly limiting the use of carbon credits for Scope 3 emissions, emphasizing instead internal decarbonization and action-based targets. The move follows internal dissent and external criticism over earlier proposals to expand carbon credit use. While carbon credits remain part of recommended “beyond-value chain mitigation” strategies, they can no longer be counted toward core abatement goals. The final publication of the standard is expected in 2026 following pilot testing and further consultation.

Liquified Natural Gas (LNG)

• U.S. natural gas demand is projected to remain at record highs through 2026, fueled by booming LNG exports and rising electricity consumption from new data centers. The U.S. remains the world’s top gas producer, but a lack of pipeline infrastructure is creating bottlenecks, driving up electricity costs and limiting supply delivery. EQT and ONEOK emphasized that pipeline investment is lagging, with projects like the Mountain Valley Pipeline taking years and billions over budget to complete.

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Most people are… because Substack does an awful job of documenting what running a paid newsletter is like on the backend… it wouldn’t surprise me if that was intentional.

At least from my experience, there are two primary issues:

1. Churn.

2. Sales taxes.

For those interested, I will elaborate. If you’re not, then feel free to skip around the next two sections.

1. Churn

Subscriber churn is a fact of life for a subscription business, but the stats can be shocking on Substack.

Sacra, a private markets research platform, estimates the average churn on Substack was around 50-60% of a newsletter’s revenue on an annual basis (in 2022):

Given so many people are starting to develop subscription fatigue, that average might be even higher today…

So, to make the same amount of money you were making a year ago— you need to increase your paid subscribers by over half your existing sub count.

Churn rates can vary, but everyone posting on this platform reports a similar situation.

People don’t view these informational newsletters like they would a SaaS product.

Many subscribers will pay for 1-2 months and leave. Some might come back later to consume the latest content, others don’t.

Don’t get me wrong—the high churn rates on my newsletter are my own fault. I naively thought that only discussing the stocks I was personally buying was a viable strategy for a subscription-based investing newsletter… it’s not.

Especially when I run a highly concentrated portfolio.

I figured if I offer news coverage in these industries and stock lists and kept adding on other additional content, then maybe that could counterbalance things out. No. That just diluted the service since I wasn’t focusing on the core product.

It turns out that people are subscribed to an investing newsletter primarily for stock picks. Other services are nice but not enough to merit a subscription on their own…

Truly a shocking revelation, I know.

But after reading about the experiences of others, I realized that even if I did dramatically increase the number of investment reports I put out, that wouldn’t change the fact that subscriber churn is significant on this website.

2. Sales Taxes

This is a topic that Substack hardly addresses at all.

The only way most people would figure out that Substack doesn’t handle sales tax collection or remittance for you is by specifically searching that out.

Other platforms provide detailed instructions about this, Substack doesn’t. The only information they have on the subject is one page about integrating with Stripe Tax.

Substack was the first platform I tried to monetize on, and I didn’t research any of the other options, so I was unaware of this issue.

A common theme you will see on the Substack subreddit is a variety of disgruntled writers talking about how they had no idea this was a thing.

I didn’t know either— until tax season came around and I realized that I never received any warning from Substack or Stripe about registering to collect sales taxes on behalf of several countries. Something I hadn’t been doing for over six months.

It’s safe to say I wasn’t pleased when I figured all of this out.

Registering with foreign governments to collect a tiny amount of sales or VAT taxes became an unsurprisingly burdensome administrative nightmare.

Plenty of countries will require you to register with their tax authorities just for making a single sale of a digital product or subscription to one of their citizens.

It’s worth noting that Stripe acquired Lemon Squeezy last year, which is similar to Gumroad and offers an MoR solution themselves. The specified purpose of said acquisition was to eventually have Stripe offer an MoR solution. So, it’s coming, but who knows how long it will take for them to develop it— and if Substack will even integrate it once it’s ready…

The Solution - Gumroad

If you haven’t heard of Gumroad before, it’s an incredibly popular option for online content creators looking to sell digital products. Which is exactly what I plan to do.

Instead of offering a subscription service like most of the newsletters on Substack, I’m going to sell each of my investment reports individually on Gumroad. Each report will be sold on its own in PDF format.

This will allow you to pick and choose which investment reports you want to buy instead of purchasing a monthly or yearly, broad subscription.

If I need to take a break for some reason, or if I don’t have a great stock idea in a particular month… then I don’t have to post anything. Subscribers won’t be annoyed that they paid for a month and didn’t receive enough value (totally fair).

Additionally, Gumroad is a Merchant of Record (MoR) now, meaning they handle all of the global tax registration and collection for me. So, I can focus on researching stocks instead of dealing with bureaucratic BS whenever I sell a subscription in a new country.

In summary, Gumroad offers more options for you— and less headaches for me.

Substack

I will continue to post free content on Substack. Any news trends or industry analysis will still be posted on here.

The Green Markets series will also be making a comeback. Instead of being posted daily, it will be sent out weekly, where I only focus on news that could impact businesses across an industry. Not just individual company news.

Existing and previous paid subscribers should receive a second email discussing refunds.

I plan on providing a link to my Gumroad page when I have some products on there. I’m still in the process of transferring things over.