Green Markets - July 11, 2024
News in environmental markets.
Green Markets is a daily series dedicated to highlighting events of interest that could impact investments within environmental markets.
Government/Regulatory
Brazil's development bank (BNDES) plans to allocate 32.1 billion reais (approximately US$5.94 billion) through its climate fund by the end of 2026. This funding will prioritize clean energy and transportation projects, offering financing with an average annual interest rate of 6.15%. The fund, established in 2009, operates with both non-refundable government budget resources managed by the environment ministry and subsidized loans managed by BNDES.
Agritech/Agriculture
The Saudi Arabian Ministry of Environment, Water, and Agriculture launched the Saudi AgriFood Tech Alliance, partnering with entities like the Research, Development, and Innovation Authority, KAUST, and Topian (NEOM Food Company). This initiative aims to unite around 40 stakeholders from various sectors to advance AgriFood technology solutions in Saudi Arabia. Goals include building national capabilities, attracting investments, and fostering partnerships across public and private sectors.
Battery Metals
BHP Group announced it will suspend its nickel operations in Western Australia starting in October, citing economic challenges exacerbated by global oversupply and low nickel prices. The decision affects operations including the Kwinana nickel refinery, Kalgoorlie nickel smelter, and the Mt Keith and Leinster mines, as well as the West Musgrave project. BHP plans to invest around $300 million annually post-transition to potentially restart the nickel business.
Biofuels/Chemicals
The Port of Beaumont has issued $382 million in revenue bonds to facilitate the development of a new dock at the Jefferson South Terminal. This initiative is part of a partnership between Jefferson Energy Companies and the Port of Beaumont to construct a new blue ammonia facility.
Electric Vehicles
General Motors and Stellantis are set to receive over $1 billion from the Biden administration to support their EV projects. This funding includes $500 million for GM’s Lansing Grand River Assembly plant in Michigan, $334.8 million for Stellantis’ Belvidere Assembly facility in Illinois, and $250 million for Stellantis’ upcoming EV drive module plant in Indiana. The grants are part of a broader initiative totaling $1.7 billion aimed at advancing EV-related initiatives across eight states.
General Motors is set to invest at least $900 million to convert its Lansing, Michigan, auto plant to EV production. The U.S. government will grant GM $500 million to support this conversion. This investment is part of GM's broader strategy to transition several plants from internal combustion engines to EV production, including facilities in Michigan, Tennessee, Ohio, and Kansas. GM aims to phase out gas-powered vehicle sales by 2035.
Liquified Natural Gas (LNG)
According to its 2024 energy outlook, BP expects global demand for LNG to rise by up to 40% by 2030 compared to 2022 levels. The outlook features two scenarios: current trajectory and net zero. In the current trajectory, LNG demand is driven by emerging economies, especially China, and Europe’s adjustment to the loss of Russian pipeline imports. In the net zero scenario, demand growth is tempered by a shift towards alternative energy sources and higher energy efficiency, particularly in the EU and UK.
Italian energy giant Eni has expanded its collaboration with energy and marine consultancy ABL for the first natural gas liquefaction project in Congo, assigning ABL marine warranty survey (MWS) services for the project's second phase. The Congo LNG project aims to utilize gas resources from the Marine XII project by installing two floating liquefied natural gas (FLNG) units, targeting a total production capacity of 3 million tons of LNG per year by 2025. Following the successful deployment of the first FLNG unit, Tango, in February 2024, the second unit, with a capacity of 2.4 mtpa, is scheduled to be operational by the end of next year.
Australian O&G giant Woodside has signed a sale and purchase agreement (SPA) with CPC Corporation for the long-term supply of LNG to Taiwan. Under this agreement, Woodside will supply approximately 6 million tonnes of LNG over 10 years, starting in July 2024. Additionally, pending conditions and agreement on terms, Woodside may deliver around 8.4 million tonnes of LNG to CPC for another 10 years from 2034 to 2043.