Green Markets - June 21, 2024

News in environmental markets.

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

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Government/Regulatory

• The IMF has approved $786.2M in funding for Tanzania to address climate change and authorized an additional $149.4M for budget support.

• Several prominent US environmental groups, including Conservation International, the Environmental Defense Fund, The Nature Conservancy, The American Forest Foundation, and the Wildlife Conservation Society, have publicly supported proposed pro-carbon credit reforms to the Science Based Targets initiative (SBTi). The groups argue that allowing carbon credits could enhance investment in climate and environmental actions.

• The Biden administration announced plans to allocate $850M in funding through the DOE and EPA to combat methane leaks from oil and gas production. This funding, distributed under the 2022 Inflation Reduction Act, will be released in three phases:

  • The first phase focuses on reducing emissions from existing oil wells and infrastructure.

  • The second phase targets methane leaks in equipment such as engines and compressors with up to 26 awards.

  • The third phase aims to enhance methane leak monitoring in communities near oil and gas facilities.

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Battery Metals

• According to data from the International Nickel Study Group (INSG), the global nickel market transitioned to a surplus of 1,000 metric tons in April from a deficit of 1,300 metric tons in March. This surplus was significantly lower than the 5,900-ton excess supply recorded in April 2023. For the first four months of 2024, the market had a surplus of 22,600 tons, down from 35,000 tons during the same period in 2023. Market data from Reuters:

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Biofuels/Chemicals

• Chevron Lummus Global (CLG) has secured a contract to implement its ISOTERRA technology for a groundbreaking sustainable aviation fuel (SAF) project in China. The project, set to be a significant player in the region's aviation fuel sector, will operate a renewable fuels plant with a capacity of 400 KTA.

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Carbon Capture

• Swiss WorldCargo, the air cargo division of Swiss International Air Lines, has launched an initiative to offset carbon emissions by integrating direct air capture (DAC) technology from Climeworks with sustainable aviation fuel (SAF). Swiss WorldCargo plans to offset 20% of CO2 emissions from its shipments through DAC, while using SAF, which offers an 80% net reduction in emissions compared to traditional aviation fuels.

• CarbonCapture has unveiled its Leo Series, the first U.S.-designed direct air capture (DAC) system tailored for mass production. Each Leo Series module, sized like a standard shipping container, can capture over 500 tons of carbon dioxide annually. Manufactured at a new facility in Mesa, Arizona, capable of producing up to 4,000 modules per year, the Leo Series is slated for deployment in 2025, targeting global carbon removal projects.

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Hydrogen

• Canada has enacted Bill C-69, which includes a refundable tax credit aimed at stimulating investments in clean hydrogen projects and clean technology manufacturing property.

• The European Commission has approved approximately $3.2B in state aid for the construction of a hydrogen pipeline network known as the Hydrogen Core Network (HCN). Germany aims to deploy over 9,700 km of pipelines, leveraging existing natural gas infrastructure. The network extension deadline has been extended by five years to 2037.

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Liquified Natural Gas (LNG)

• US Federal Energy Regulatory Commission (FERC) is scheduled to decide on Venture Global LNG's CP2 LNG project in Louisiana at its meeting on June 27th. The CP2 LNG facility, adjacent to Venture Global’s Calcasieu Pass plant, plans to have 18 liquefaction blocks with a capacity of 1.1M tonnes per annum each, alongside significant LNG storage capacity.

• Wison New Energies, a Chinese engineering firm, has announced that it will cease all ongoing projects in Russia and halt any new business ventures in the country indefinitely. This decision is a major blow to projects like the Arctic LNG 2, a major liquefied natural gas (LNG) initiative by Russia's Novatek, which had planned to utilize equipment from Wison for a gas turbine power station.

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Nuclear Energy

• Orano, a French nuclear energy company, announced that Nigerian authorities have revoked the operating permit for the Imouraren uranium mine, held by its subsidiary Imouraren SA since 2009. This decision to withdraw the permit follows Niger's Ministry of Mines citing concerns that Orano's development plans did not meet governmental expectations.

• China's Heqi-1 project, located at the Tianwan Nuclear Power Plant in Lianyungang, marks the country's first large-scale nuclear-powered industrial steam supply initiative. This project utilizes heat generated from the nuclear plant to produce 600 tonnes of industrial steam per hour through advanced multi-layered isolation systems and multi-stage heat transfer processes. Annually, Heqi-1 is expected to provide 4.8M tonnes of zero-carbon steam.

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Renewable Energy

• Equinor and Oceanex, through Novocastrian Wind, have been shortlisted for feasibility licenses to develop a 2 GW offshore wind project off the coast of Hunter, New South Wales. The decision is pending consultations with First Nations groups and local stakeholders and environmental assessments.

• Germany's latest offshore wind tender awarded 2.5 GW in the North Sea, with two bidders paying a combined €3B. Offshore Wind One won 1.5 GW with a bid of €1.305M per MW, while EnBW secured a 1 GW zone at €1.065M per MW. Notably, RWE withdrew from a winning bid, leaving TotalEnergies (Offshore Wind One) to handle the 1.5 GW zone alone.

• Indraprastha Gas (IGL) is planning to diversify beyond its core businesses of city gas distribution and liquefied natural gas into new sectors such as rooftop solar and EV battery recycling. Gail and BPCL each hold a 22.5% stake in IGL, with the remaining 55% owned by the public.

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