Green Markets - August 1, 2024
Green Markets - August 1, 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
South Africa's new government is accelerating the transition to renewable and nuclear energy by restructuring its energy ministries and implementing new policies to address the country's frequent power outages. Notably, South Africa has achieved a milestone of 100 days without power cuts, attributed to improved energy availability and collaborative efforts within the utility sector. The government plans to diversify the electricity market with the 2023 Electricity Regulation Amendment Bill, increase planned capacity to 84 GW by 2030, and add 2.5 GW of new nuclear capacity.
Battery Metals
Albemarle, the world's largest lithium producer, is implementing a second round of cost cuts this year due to falling lithium prices and a recent loss in the second quarter. The company is facing a downturn in the lithium market, driven by oversupply and slow EV adoption, leading to a drop in lithium prices from $20 to around $12-$15 per kilogram. Albemarle is conducting a comprehensive review of its operations and may implement additional measures in the future.
Related Stock List(s): Commodity Trust Stocks, Commodity Royalty Stocks
Biofuels/Chemicals
Masdar and TotalEnergies have announced a new collaboration to explore a green hydrogen-to-methanol-to-sustainable aviation fuel (SAF) project in Abu Dhabi. The initiative aims to decarbonize hard-to-abate industries such as aviation and maritime by utilizing green hydrogen from renewable energy and CO2 captured from industrial sources. This project follows a successful test flight in December 2023, which demonstrated the potential of converting methanol to SAF.
JetBlue has secured a new supply agreement with World Fuel Services for up to 5 million gallons of sustainable aviation fuel (SAF) to be used at New York’s JFK Airport. Deliveries will start in the fourth quarter of 2024. The agreement covers an initial 1 million gallons of neat SAF, with an option to purchase up to 4 million additional gallons.
Carbon Capture
BP has signed a cooperation agreement with the Bandung Institute of Technology (ITB) to advance carbon capture, utilization, and storage (CCUS) in Indonesia. The deal includes developing a new Tangguh CCS hub and supporting the existing Tangguh CCUS project, which could inject over 30 million tonnes of CO2.
Related Stock List(s): Carbon Capture Stocks
Compliance Carbon Markets (CCMs)
Rep. Paul Tonko from the United States has introduced the "Climate Pollution Standard and Community Investment Act of 2024," which aims to curb emissions by setting annual caps for industries such as power plants and refineries. The bill mandates the EPA to auction pollution allowances, with the number of available allowances decreasing over time to meet reduction targets. This legislation outlines a potential emissions trading system (ETS) for the United States, which currently only has regional compliance carbon markets in the West and North East of the lower 48.
Related Stock List(s): Carbon Allowance Stocks
Voluntary Carbon Markets (VCMs)
Global carbon exchange CBL Markets/Xpansiv is aiming to launch a Corsia-compliant spot contract in Q4 2024. This contract will align with phase one of the UN's Corsia aviation scheme, which focuses on reducing carbon emissions in the aviation industry.
Microsoft has signed a carbon removal deal with 3Degrees to purchase over 80,000 metric tons of carbon removals from the Blue Creek Improved Forest Management Project in Northern California.
Related Stock List(s): Carbon Credit Stocks
Energy Efficiency
Portugal's Ministry of Environment and Energy has launched a €99.75 million grant program to support the development of at least 500 MW of energy storage capacity by the end of 2025. This funding will be allocated to both grid-scale and distributed energy storage projects.
Related Stock List(s): Energy Efficiency Stocks
Hydrogen
The Italian government has announced a substantial investment of over €994 million in subsidies for hydrogen projects on the EU’s Hy2Infra Important Projects of Common European Interest (IPCEI) list. This funding will support the development of up to 600 MW of electrolysis capacity and hydrogen pipelines in Italy.
Related Stock List(s): Hydrogen Stocks
Liquified Natural Gas (LNG)
Spacenet Enterprises and Russian firm Modern Gas Technologies are forming a joint venture to develop LNG projects in India. In the first phase, the JV plans to set up 20 LNG gas stations and fuel retail outlets over about three years, with an expansion to 180 stations in the subsequent phase. Spacenet will hold a 15-25% stake in the joint venture, which will be financed by a Russian bank. The partnership will also focus on retrofitting heavy commercial vehicles to switch from diesel to LNG.
To address its power shortage crisis and avoid summer power cuts, Egypt has contracted three international companies, Trafigura, Vitol, and Glencore, for five LNG shipments between August and September.
YPF and Malaysian state company Petronas have chosen Río Negro over Buenos Aires Province for their ambitious LNG plant project, marking it as the largest investment in Argentina’s history, valued between $30 and $50 billion. The decision favors Río Negro due to its adherence to the RIGI Big Investment Incentive Regime. The plant will be located in Punta Colorada, Río Negro, with construction set to begin in 2031 and will significantly boost Argentina's LNG export capacity.
Jera has commenced commercial operation of the first new LNG unit at its Goi thermal power plant in Chiba, Japan. The newly launched unit, with a generating capacity of 780 MW, is part of a replacement project that includes the construction of three LNG units, each with the same capacity. The project aims to replace six aging gas-fired steam units at the facility.
South Korea scraps a variety of mega LNG projects: link
Related Stock List(s): LNG Stocks
Nuclear Energy
Sweden and the United States have signed a Memorandum of Understanding (MoU) to collaborate on the development of new nuclear power in both countries. The agreement aims to facilitate the exchange of expertise in policy, research, innovation, supply chains, financing models, skills development, and advanced nuclear fuel.
Related Stock List(s): Nuclear Energy & Uranium Stocks
Renewable Energy
The U.S. Department of Energy’s Water Power Technologies Office plans to allocate up to $112.5 million to advance wave energy technologies. This funding aims to support open water testing and system validation to enhance the commercial readiness of wave energy converters (WECs). The funding opportunity is expected to open in September 2024.
Goldman Sachs Alternatives has invested $440 million in BrightNight, a Florida-based renewable power company, to support its utility-scale renewable energy projects in the This investment aligns with Goldman Sachs' view of strong demand for renewable energy driven by corporate decarbonization and supportive policies.
China has reached a significant milestone in its energy transition, with wind and solar power capacity surpassing that of coal-fired generation for the first time. By the end of June 2024, China had installed 1,181 GW of wind and solar capacity, nearing its 2030 target of 1,200 GW. The rapid expansion in renewables, driven by massive annual installations and competitive domestic markets, is expected to see solar power alone surpass coal by 2026.
Investment Funds
Quinbrook Infrastructure Partners, an Australian private equity firm, has raised $3 billion in its largest fund closing to date. The new capital will be directed toward energy transition investments, focusing on battery storage, electric grids, large solar hybrid projects, and renewable fuels.