Green Markets - November 4, 2024
News in environmental markets.
Green Markets is a daily series dedicated to highlighting events of interest that could impact investments within environmental markets.
General Environmental/Regulatory
Aurelien Hamelle, strategy director at TotalEnergies, stated that if Donald Trump were to return as U.S. president, he does not expect Trump to withdraw from the Paris Agreement or reverse the Inflation Reduction Act (IRA) legislation aimed at reducing greenhouse gas emissions. He emphasized that for the IRA to be challenged, a Republican-controlled Congress would be necessary, which polls suggest is unlikely. TotalEnergies, a significant player in the U.S. energy sector with extensive natural gas and renewable projects, believes the U.S. will continue to lead the global energy transition despite political changes.
Anglo American has agreed to sell its 33.3% stake in the Jellinbah Group, an Australian coal mining joint venture, for approximately $1.1 billion. The sale, expected to be finalized by the second quarter of 2025, reflects Wanblad's push to focus on copper and iron ore, aiming to generate around 60% of the company’s revenue from copper. Despite recent speculation about BHP potentially making a renewed takeover bid, BHP has indicated it is moving on after Anglo American's shareholders rejected its earlier offer.
Biofuels/Chemicals
BP's joint venture, Pan American Energy Group, is considering an investment to produce SAF at its Campana refinery near Buenos Aires. The initiative is supported by Argentina's recent regulatory reforms under President Javier Milei, who is promoting energy investments through various incentives.
Related Stock List(s): Biofuels & Chemicals Stocks
Compliance Carbon Markets (CCMs)
Canada has announced a plan requiring Canada's oil and gas industry to reduce emissions by 35% from 2019 levels, which will be implemented through a cap-and-trade system. Starting in 2030, companies will have legal limits on their emissions, with a gradual reduction aimed at achieving net zero by 2050. Large operators will need to report their emissions starting in 2026, while small operators will begin reporting in 2029.
Related Stock List(s): Carbon Allowance Stocks
Hydrogen
China Coal Group's local subsidiary, China Coal Ordos, has begun building a $600 million green hydrogen and methanol facility in Inner Mongolia, near Ordos city. The plant will utilize 625 MW of combined wind and solar power to generate renewable hydrogen, which will then be combined with captured CO₂ to produce 100,000 tonnes of green methanol annually.
Related Stock List(s): Hydrogen Stocks
Liquified Natural Gas (LNG)
TotalEnergies has signed a long-term agreement with Sinopec to supply 2 million tons of LNG annually to China over 15 years, starting in 2028.
Related Stock List(s): LNG Stocks
Nuclear Energy
The U.S. Federal Energy Regulatory Commission (FERC) has rejected a proposal that would have allowed Amazon to increase its power usage from the adjacent Susquehanna nuclear power plant operated by Talen Energy. This decision impacts the tech industry's efforts to secure reliable energy for data centers. FERC commissioners voted 2-1 against the proposal, citing insufficient justification for the special contract and the need for a closer review of the implications for grid reliability and consumer rates. Amazon had previously invested $650 million in a data center near the plant and sought to raise its power usage from 300 MW to 480 MW. The ruling may hinder similar future arrangements between tech companies and energy producers.
Meta's plans to establish a nuclear-powered AI data center in the U.S. faced setbacks primarily due to the discovery of a rare bee species on the proposed site. While rivals like Amazon, Google, and Microsoft have successfully secured nuclear energy deals for their data centers, Zuckerberg expressed frustration over the limited nuclear options in the United States, particularly as Meta seeks to demonstrate the viability of its AI investments amid rising capital expenditures.
A Japanese nuclear reactor, the No. 2 reactor at the Onagawa nuclear power plant, was shut down just five days after it restarted for the first time in over 13 years. The restart occurred on October 29, following the 2011 Fukushima disaster, but an equipment glitch related to neutron data prompted the shutdown on November 3. Operator Tohoku Electric Power Co. stated that the reactor was functioning normally and there was no radiation release, but the decision to halt operations was made to re-examine the equipment due to safety concerns from residents.
Related Stock List(s): Nuclear Energy & Uranium Stocks
Recycling Technology
Ahead of the final round of U.N. negotiations on a global plastic treaty in Busan, South Korea, ten U.S. states, led by New York Attorney General Letitia James, are urging the U.S. government to support stricter measures beyond production caps. The letter recommends rejecting "false" solutions such as certain recycling methods and calls for protections for communities affected by plastic production. This follows the U.S. delegation's recent backing of a treaty, INC-5, that would impose global caps on plastic production—a shift from its earlier stance on letting countries make their own policies.
Related Stock List(s): Recycling Stocks