Green Markets - July 1, 2024

Jul 02, 2024

Green Markets is a daily series dedicated to highlighting events of interest that could impact investments within environmental markets.

The U.S. Supreme Court has overturned the Chevron doctrine, a principle that stated courts should defer to a government agency’s interpretation of the law since they’re “experts,” in a 6-3 decision. Chief Justice John Roberts wrote the majority opinion, stating that agencies lack special competence in resolving statutory ambiguities, which should be the courts' role. This decision may impact climate policy, as it could limit the EPA's ability to regulate greenhouse gas emissions under older environmental laws. Despite this, the Inflation Reduction Act explicitly grants the EPA authority to regulate carbon dioxide emissions, potentially safeguarding some climate regulations.
The World Bank has launched a new program through its Multilateral Investment Guarantee Agency (MIGA) aimed at significantly increasing guarantees to $20 billion by the end of the decade. This initiative is designed to mobilize private sector investments for development and climate projects in low-income countries. The program, supported by the International Finance Corporation (IFC), will offer credit risk coverage for loans, trade finance guarantees, and political risk insurance.

Hedge funds like Anchorage Capital Advisors and Squarepoint Capital LLP are investing in cobalt by purchasing physical material due to falling spot prices and a more liquid futures market. The cobalt market has seen prices plummet to a seven-year low due to oversupply from the Democratic Republic of Congo and Indonesia. Squarepoint is reportedly buying cobalt metal, while Anchorage is acquiring both cobalt metal and hydroxide, actively trading with CME futures to capitalize on these market conditions.

Egypt has recently signed four agreements worth €31 billion to produce an estimated 6.2 million tonnes per annum (mtpa) of green ammonia:
- €13.5 billion, 2.5 million tonnes/year plant set to be complete by 2032, working with BP, Masdar, Hassan Allam Utilities, and Infinity Power.
- €3.9 billion, 900,000 tonnes/year plant set to be complete by 2031, working with Ocior Energy Holding.
- €3.8 billion, 355,700 tonnes/year plant set to be complete by 2032, working with TAQA Arabia and VOLTALIA.
- €10.2 billion, 1.7 million tonnes/year plant set to be complete by 2028, working with DAI Infrastruktur (DAI).

The Australian Renewable Energy Agency (ARENA) has conditionally approved $143 million in funding for up to 370 community batteries across Australia as part of its Community Battery Funding program's first round. This initiative is expected to attract a total investment of $359 million in renewable energy infrastructure nationwide.

Universal Hydrogen, a hydrogen-powered flight startup, has gone bankrupt after burning through $100 million in investor funding. The company aimed to replace fossil-fuel-powered flights with sustainable, emissions-free technology, achieving a milestone with a partially hydrogen-powered flight in Moses Lake, Washington. Despite being recognized by Fast Company as one of the "Most Innovative Companies of 2024" and preparing for further propulsion-system testing, the company failed to secure additional financing or a strategic exit.

A federal judge in Louisiana issued a preliminary injunction against Joe Biden’s temporary moratorium on new licenses for U.S. liquefied natural gas (LNG) exports, following a lawsuit by 16 states. These states argued that Biden violated federal law by halting licenses to assess the climate impact of LNG shipments. Despite the injunction, the practical effects are expected to be minimal as the Department of Energy will continue to scrutinize LNG export proposals under federal law.
Hanwha Ocean, a shipbuilding unit of South Korea's Hanwha Group, has secured contracts worth 2.16 trillion won ($1.57 billion) to build four LNG carriers and four VLCCs for undisclosed Middle Eastern shipowners. The contracts include a 1.44 trillion won deal for LNG ships to be delivered by October 2028, and a 720 billion won deal for crude oil carriers to be delivered by April 2027. These deals increase Hanwha's order backlog for the year to 16 LNG carriers, 2 ammonia-fuel-cell-powered VLACs, 1 VLGC, and 1 offshore rig, totaling $5.33 billion.

Brightmark, a California-based company, plans to invest $950 million in constructing a recycling facility in Thomaston, Georgia. The facility, expected to open in 2027, aims to recycle approximately 400,000 tons of plastic waste annually, preventing it from entering landfills or waterways.

PT Xurya Daya Indonesia, a renewable energy company, has secured a $55 million investment led by the Norwegian Climate Investment Fund managed by Norfund. Other participants include Swedfund, Clime Capital, British International Investment (BII), and AC Ventures, bringing Xurya's total investment to over $90 million.

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