Green Markets - September 20, 2024
Green Markets - September 20, 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
The U.S. House of Representatives voted 215-191 to repeal the Biden administration's March 2023 clean-vehicle rules, which aim to cut tailpipe emissions by 50% from 2026 levels by 2032. Republicans argue that the stringent Environmental Protection Agency (EPA) regulations would push automakers to focus on electric vehicles, effectively phasing out gas-powered cars. President Biden has vowed to veto the measure if it passes the Senate.
Global climate finance from multilateral development banks reached a record $125 billion in 2023, a 25% increase from the previous year. The top recipients of this financing were France, Spain, and Italy, with a significant portion directed towards renewable energy and emission reductions rather than adaptation efforts.
The European Investment Bank (EIB) has approved €5.3 billion in financing to enhance climate resilience and business competitiveness across Europe. Of this amount, €3.5 billion will support urban development and smart city initiatives, while €1.4 billion is allocated for corporate innovation and investments in sectors like clean transport and hydrogen technology.
Dutch bank ING plans to cut ties with clients that have not made sufficient progress in reducing their carbon footprints. CEO Steven van Rijswijk announced that the bank has assessed 2,000 large clients and will restrict or stop financing for those unwilling to address their climate impacts, with a deadline set for 2026. ING aims to align its financing strategies with the goals of the Paris Agreement while acknowledging the financial risks associated with climate change, particularly in sectors like shipping and real estate.
Biofuels/Chemicals
Twelve has raised $645 million to scale its carbon transformation technology that converts CO2 into sustainable aviation fuel (SAF). The funds will support the construction of AirPlant One, its first SAF plant in Washington, set to begin production in 2025.
Mitsui O.S.K. Lines (MOL) has invested in HIF Global, which focuses on developing synthetic fuels, including e-methanol for the marine sector. HIF aims to produce approximately 4 million tons per year of e-fuels and e-methanol using green hydrogen and recycled CO2.
Related Stock List(s): Biofuels & Chemicals Stocks
Voluntary Carbon Markets (VCMs)
The U.S. Commodity Futures Trading Commission (CFTC) approved guidelines for trading voluntary carbon credit derivative contracts. These contracts allow market participants to hedge against or speculate on future carbon credit prices, aiding decarbonization efforts. Concerns over quality and manipulation have led regulators to push for stricter oversight of voluntary carbon markets, with CFTC Chairman Rostin Behnam emphasizing the importance of price discovery and risk mitigation.
Related Stock List(s): Carbon Credit Stocks
Energy Efficiency
The U.S. Energy Department plans to allocate $3 billion to 25 battery manufacturing projects across 14 states. This funding will support the development of battery materials, recycling efforts, and critical minerals, generating an estimated $16 billion in total investments. Notable recipients include Albemarle, Honeywell, and Dow, each receiving substantial funds for projects related to lithium-ion battery components.
Trina Solar has submitted plans for a significant battery storage facility in Australia, aiming to build the country's largest battery project with 660 MW of capacity and 2,640 MWh of storage. Construction is expected to start in the third quarter of 2026, with a timeline of approximately two years for completion.
Related Stock List(s): Energy Efficiency Stocks
Liquified Natural Gas (LNG)
Chevron has reportedly decided not to invest in U.S. LNG plants, opting instead to prioritize selling gas through existing midstream infrastructure and utilizing sales agreements with LNG developers. In line with this approach, Chevron recently entered long-term LNG agreements with Cheniere Energy and has avoided building U.S. LNG facilities, preferring third-party midstream developments.
Total has completed the acquisition of Anadarko’s 26.5% stake in a Mozambique LNG project for $3.9 billion. The project, Mozambique's first onshore LNG development, will develop the Golfinho and Atum fields and includes the construction of two liquefaction trains with a capacity of 12.9 million tonnes per year. Nearly 90% of the production is already sold through long-term contracts, primarily to buyers in Asia and Europe.
Related Stock List(s): LNG Stocks
Nuclear Energy
Microsoft has signed a 20-year deal to purchase power from the Three Mile Island nuclear plant, set to reopen in 2028 after a $1.6 billion upgrade by Constellation Energy. The plant's Unit 1, which was not involved in the 1979 accident, will provide clean energy for Microsoft's expanding AI data centers.
The U.S. Nuclear Regulatory Commission (NRC) has not yet received an application from Constellation Energy. NRC has stated it is ready to engage with Constellation once the application is filed, with a review expected to be completed by 2027.
Related Stock List(s): Nuclear Energy & Uranium Stocks